Attached files
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| EX-31.1 - STEREO VISION ENTERTAINMENT INC | form10ka063009ex31.htm |
| EX-32.1 - STEREO VISION ENTERTAINMENT INC | form10ka063009ex32.htm |
U.S. SECURITIES AND EXCHANGE
COMMISSION
Washington,
D.C. 20549
FORM
10-K/A
Amendment #2
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE
ACT OF 1934
For
the fiscal year ended June 30, 2009
Commission
file number: 000--28553
STEREO
VISION ENTERTAINMENT, INC.
(Exact
name of registrant as specified in its charter)
|
Nevada
|
95-4786792
|
|
|
(State
of incorporation)
|
(I.R.S.
Employer Identification No.)
|
15452
Cabrito Rd., Suite 204, Van Nuys, CA 91406
(Address
of principal executive offices)
(818)
456-3858
(Registrant’s
telephone number, including area code)
Securities
registered pursuant to Section 12(b) of the Exchange Act:
None
Securities
registered pursuant to Section 12(g) of the Exchange Act:
Common
Stock, $0.001 par value
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. Yes ¨ No x
Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act. Yes ¨ No x
Indicate
by check mark whether the registrant (1) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act 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 if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (§229.405 of this chapter) is not contained herein, and will not
be contained, to the best of registrant’s knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. x
1
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 ¨
(Do
not check if a smaller reporting company)
|
Smaller Reporting Company x
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes ¨ No x
The
issuer’s revenues for its most recent fiscal year were $Nil
The
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the average bid and asked price of such
common equity as August 31, 2009 was approximately $1,188,748.
The
number of shares of the issuer’s common stock issued and outstanding as of
August 31, 2009 was 23,786,138 shares.
Documents
Incorporated By Reference: None
Explanatory
Note
We are filing this Amendment to our
Annual Report on Form 10-K for the year ended June 30, 2009 to respond to
certain comments received by us from the Staff of the Securities and Exchange
Commission (“SEC”) in connection with its review of our Form 10K. Our financial
position and results of operations for the periods presented have not been
restated from the financial position and results of operations originally
reported.
For convenience and ease of reference
we are filing this Annual Report in its entirety with the applicable changes.
Unless otherwise stated, all information contained in this amendment is as of
October 13, 2009, the filing date of our Annual Report on Form 10-K for the
fiscal year ended June 30, 2009. Accordingly, this Amendment to the Annual
Report on Form 10-K should be read in conjunction with our subsequent filings
with the SEC.
2
PART
I
ITEM
1. DESCRIPTION OF BUSINESS
General
The Company intends to position itself
to evolve into a vertically integrated, diversified media entertainment company.
The Company anticipates generating revenues from several sources, including
production of new and existing feature films in both 3-D and 2-D format for
theatrical and direct to DVD release, as well as expanding into other areas of
the entertainment industry including the licensing of video game
rights.
The Company’s common stock is traded on
the NASDAQ OTC Bulletin Board market under the symbol: SVSN.
History
StereoVision Entertainment, Inc.
("SVEI") was originally incorporated in the State of Arizona as Arizona Tax Pros
& Insurance Wholesalers, Inc., on December14, 1993. Arizona Tax Pros &
Insurance Wholesalers, Inc., changed its name to Kestrel Equity Corporation
("Kestrel") on September 30, 1997. On July 20, 1999, Kestrel entered into an
Acquisition Agreement and Plan of Reverse Merger with StereoVision
Entertainment, Inc., a privately held Nevada corporation ("StereoVision") (the
"Merger"). Pursuant to the Merger, which was consummated on December 30, 1999,
StereoVision was merged with and into "Kestrel". Each share of
StereoVision common stock outstanding was exchanged for 120 shares of Kestrel's
common stock, $.001 par value (the "Common Stock").
On January 31, 2000, "Kestrel" changed
its state of incorporation from Arizona to Nevada, and also changed its name to
StereoVision Entertainment, Inc.
3
Since the time of its inception until
the effective date of the Merger, Kestrel Equity Corporation was a development
stage company with no active business operations and no revenues. As such,
Kestrel was considered a "shell" corporation with a principal purpose of
locating and consummating a merger or acquisition with a private entity.
Beginning in August 1999, the business activities of Kestrel, prior to the
Merger, encompassed administrative and organizational matters and identifying
additional acquisition opportunities for operating companies and intellectual
property assets in the global multi-media industries. Upon the consummation of
the Merger, Kestrel acquired all of the assets of StereoVision with the intent
of continuing StereoVision's business and expanding into new areas of the
entertainment industry. StereoVision was incorporated in the State of Nevada on
May 5, 1999 for purposes of acquiring multi-media/entertainment industry assets
and pursuing merger opportunities with an existing publicly traded company. Mr.
Kallett, an officer and director of Kestrel Equity Corporation, and Mr. Honour,
a principal shareholder of Kestrel, both owned common stock in StereoVision
representing an aggregate of 51% of the issued and outstanding capital stock of
StereoVision. The operations and management of the merged companies (SVEI) were
then integrated following the replacement of StereoVision's sole officer and
director with the then sole officer and director of Kestrel.
On December 17, 1999 "Kestrel" filed
its Form 10-SB with the U.S. Securities and Exchange Commission. Upon the
consummation of the merger on December 30, 1999, shortly thereafter in January
of 2000, SVEI elected new officers and directors. Since January 2000,
the Company's activities have been developing entertainment projects, both
musical and theatrical, and identifying and securing candidates with
entertainment industry experience to serve on the SVEI Board of Directors and
identifying additional opportunities for the acquisition of operating
entertainment oriented companies as well as acquiring intellectual property
assets. Although acquisition opportunities have been identified, no transactions
have been consummated and there is no guarantee that any transactions will be
consummated in the near future.
The executive offices of the Company
are located at 15452 Cabrito Road., Suite 204, Van Nuys, CA 91406. Its telephone
number is (818) 909-7911.
OPERATING
LOSSES
The Company has incurred net losses of
approximately $465,000 and $1,333,000 for the fiscal years ended June 30, 2009
and 2008. Such operating losses reflect developmental and other
start-up activities for 2009 and 2008. The Company expects to incur
losses in the near future until revenues are generated and profitability is
achieved. The Company’s operations are subject to numerous risks
associated with establishing any new business, including unforeseen expenses,
delays and complications. There can be no assurance that the Company
will achieve or sustain profitable operations or that it will be able to remain
in business.
4
FUTURE
CAPITAL NEEDS AND UNCERTAINTY OF ADDITIONAL FUNDING
SVEI anticipates it will begin to
generate operating revenues during its next fiscal year as it becomes
operational and begins production of 3-D films and associated entertainment
offerings. "SVEI" management acknowledges that during its next fiscal year there
is no assurance that "SVEI" will transition itself from a development stage
company to an operational one and SVEI's continued operations will be dependent
upon additional shareholder loans and/or proceeds from "SVEI" debt/equity
offerings. There currently are no agreements in place for future
shareholder loans and management has no assurances as to any market acceptance
of any future SVEI debt/equity offerings.
BUSINESS OVERVIEW
Management believes that StereoVision’s
principal expertise lies in the content production segment of the multi-media
entertainment industry. The Company’s main line of business will be to provide
original 3-D and 2-D programming including low to medium cost productions for
theatrical release and direct to DVD. Pay-per-view films, television/cable
films, and other entertainment related projects, including merchandising 3-D
technology and items related to specific creative content will also be
targeted. Unique self-developed projects will initially focus on low
to medium budget films (below $
25,000,000 production cost).
STEREOVISION
ENTERTAINMENT PRODUCTIONS
The film content production business
is very capital intensive and StereoVision will need to raise and secure
significant equity and/or debt financing to implement its specific production
objectives. If the Company receives such financing, it anticipates
producing and/or co-producing cutting edge, commercially successful independent
feature length film productions in all genres. Financing for these
productions, when possible, will be accomplished through off balance
sheet partnerships or joint ventures in order to minimize company
risk. When feasible, StereoVision anticipates each production will be structured
as a stand-alone limited liability company, thus diminishing the equity dilution
impact on the Company. StereoVision intends to act as the executive producer of
each film project and to collect the customary up front executive producer’s
fee. There is no assurance that StereoVision can secure financing to produce
films or even if films are produced that they can be profitably
distributed.
5
BUSINESS
EXPANSION; CAPITAL GROWTH
StereoVision intends to position
itself to evolve into a vertically integrated, diversified multimedia
entertainment company with an initial concentration on low to medium budget 3-D
and 2-D films. StereoVision intends to finance its business expansion initially
through working capital injections of equity as well as borrowings to finance
its films. The Company can give no assurance that any attempt to borrow funds or
offer its equity securities for sale will be successful. If the
Company is unable to successfully raise debt and/or equity financing its ability
to fund its business plan would be significantly limited.
The ability of StereoVision to
implement its business strategy depends upon its ability to successfully create,
produce, and market entertainment content and ancillary products for traditional
real-world distribution channels including, but not limited to,
retailers, television, theatres and home markets and newly emerging
distribution channels such as the Internet.
StereoVision intends to produce and
develop 3-D and 2-D films and DVD’s in all genres for its library, as well as to
acquire additional film assets. While the Company may enter into participation,
licensing or other financial arrangements with third parties in order to
minimize its financial involvement in production, it will be subject to
substantial financial risks relating to content. StereoVision expects that it
will typically be required to pay for the production of film content during the
production period prior to release and will most likely be able to recoup these
costs and make profits from revenues from ticket sales within to 18 to 24 months
following release. The company will, however, always seek to arrange presales to
both foreign and domestic buyers such as studios, distribution companies, cable
networks, equity partners etc. It will also seek to negotiate product
integration arrangements as well as take advantage of tax subsidies in the
locations in which it films.
StereoVision anticipates generating
revenues from several sources, including production and distribution of new and
existing independent 3-D and 2-D feature films, TV movies and direct to DVD
films and licensing of video game rights. The company will also
license the rights to its products for ancillary markets where
appropriate.
6
MANAGEMENT
OF GROWTH
In order to maximize the potential
growth of the Company's various opportunities, StereoVision believes that it
must expand rapidly and significantly upon its entrance into the marketplace.
This impetus for expansion will place a significant strain on the Company's
management, operational and financial resources. In order to manage
growth, the Company must implement and continually improve its operational and
financial systems, expand operations, attract and retain superior management and
train, manage and expand its employee base. StereoVision cannot guarantee that
it will effectively manage the rapid expansion of its operations, that its
systems, procedures or controls will adequately support its operations or that
its management will successfully implement its business plan. If the Company
cannot effectively manage its growth, its business, financial condition and
results of operations could suffer a material adverse effect.
StereoVision expects that it will
require significant additional equity and/or credit financing prior to becoming
cash self-sufficient which could lead to further dilution. There can
be no assurances that the Company will successfully negotiate or obtain
additional financing, or that it will obtain financing on terms favourable or
acceptable to it. StereoVision does not have any commitments for additional
financing. The Company’s ability to obtain additional capital depends on market
conditions, the global economy and other factors outside its
control. If the Company does not obtain adequate financing or such
financing is not available on acceptable terms, its ability to finance its
expansion, develop or enhance products or services or respond to competitive
pressures would be significantly limited. StereoVision's failure to
secure necessary financing could have a material adverse effect on its business,
prospects, financial condition and results of operations.
GOVERNMENT
REGULATION
The Classification and Rating
Administration of the Motion Picture Association of America, an industry trade
association, assigns ratings for age-group suitability for motion pictures. SVEI
plans to submit its pictures for such ratings. Management's current policy is to
produce motion pictures that qualify for a rating no more restrictive than "PG
13."
The Company is subject to all pertinent
Federal, State, and Local laws governing its business. The Company is
subject to licensing and regulation by a number of authorities in its State or
municipality. These may include health, safety, and fire
regulations. The Company’s operations are also subject to Federal and
State minimum wage laws governing such matters as working conditions and
overtime.
7
RISK
OF LOW-PRICED STOCKS
Rules 15g-1 through 15g-9 promulgated
under the Securities Exchange Act of 1934 (the “Exchange Act”) impose sales
practice and disclosure requirements on certain brokers and dealers who engage
in certain transactions involving “a penny stock.”
Currently, the Company’s Common Stock
is considered a penny stock for purposes of the Exchange Act. The
additional sales practice and disclosure requirements imposed on certain brokers
and dealers could impede the sale of the Company’s Common Stock in the secondary
market. In addition, the market liquidity for the Company’s
securities may be severely adversely affected, with concomitant adverse effects
on the price of the Company’s securities.
Under the penny stock regulations, a
broker or dealer selling penny stock to anyone other than an established
customer or “accredited investor” (generally, an individual with net worth in
excess of $1,000,000 or annual incomes exceeding $200,000, or $300,000 together
with his or her spouse) must make a special suitability determination for the
purchaser and must receive the purchaser’s written consent to the transaction
prior to sale, unless the broker or dealer or the transaction is otherwise
exempt. In addition, the penny stock regulations require the broker
or dealer to deliver, prior to any transaction involving a penny stock, a
disclosure schedule prepared by the Securities and Exchange Commission (the
“SEC”) relating to the penny stock market, unless the broker or dealer or the
transaction is otherwise exempt. A broker or dealer is also required
to disclose commissions payable to the broker or dealer and the registered
representative and current quotations for the Securities. In
addition, a broker or dealer is required to send monthly statements disclosing
recent price information with respect to the penny stock held in a customer’s
account and information with respect to the limited market in penny
stocks.
INTELLECTUAL
PROPERTY AND PROPRIETARY RIGHTS
The Company relies on a combination of
trade secret, copyright and trademark law, nondisclosure agreements and
technical security measures to protect its products. Notwithstanding
these safeguards, it is possible for competitors of the company to obtain its
trade secrets and to imitate its products. Furthermore, others may
independently develop products similar or superior to those developed or planned
by the Company.
Distribution rights to motion pictures
are granted legal protection under the copyright laws of the United States and
most foreign countries. These copyright laws provide substantial civil and
criminal sanctions for unauthorized duplication and exhibition of motion
pictures. Motion pictures, musical works, sound recordings, artwork, still
photography and motion picture properties are each separate works subject to
copyright under most copyright laws, including the United States Copyright Act
of 1976, as amended.
8
COMPETITION
SVEI competes with a large array of
diverse global media conglomerates, startup "entertainment, information and
commerce" companies, as well as with a number of smaller, independent production
companies.
A portion of these companies compete
for motion picture projects and talent and are producing motion pictures that
compete for exhibition time at theaters, on television, and on home DVD with
films to be produced by the Company. Most of SVEI's competitors have operating
histories, larger customer bases and significantly greater financial, marketing
and other resources. Certain of SVEI's competitors have the financial resources
to devote greater resources to marketing and promotional campaigns and devote
substantially more resources to technology development. Increased competition
may result in reduced operating margins.
EMPLOYEES
As of August 31, 2009, SVEI employed
three employees. SVEI considers its employee relations to be satisfactory at
present.
ITEM
2. DESCRIPTION OF PROPERTY
SVEI's principal executive offices are
located at 15452 Cabrito Road, Suite 204, Van Nuys, CA 91406 and consist of
approximately 2,500 square feet of furnished executive suite offices and
reception and conference room arrangements. The lease expired in June 2005.
Since the lease expired, the Company is on a month to month
lease. The monthly rent for the property is $2,500.
In March,
2008, the Board approved a new benefits package for its CEO, Mr. Jack Honour
which includes payment for housing at the rate of $4,500 per month plus
utilities as well as the use of a car. The annual cost of these benefits is
estimated to be $85,000 p.a.
9
ITEM
3. LEGAL PROCEEDINGS
In September of 2001 the company
entered into a promissory note with Duncan MacPhearson to be payable within the
year. A dispute arose and the note was not timely paid, which led to a court
action styled R. Duncan
MacPhearson vs. Stereo Vision Entertainment, et. al., Case No. LC
0611749, in Los Angeles, California. Subsequently, the parties, on January 26,
2004, entered into a Settlement Agreement, including default provisions if
scheduled payments did not occur as agreed. 25,000 shares of restricted stock,
valued at $25,000, were delivered and $42,500 of payments was made, but the
final $10,000 was not paid. According to the stipulated judgment agreement, this
resulted in the plaintiff's entry of a judgment, according to notice received by
the company, of $37,411, which was then appealed by the Company as incorrect.
The appellate court disagreed and allowed the entry of judgment as filed,
stating that the 25,000 shares had "no value" and allowing $37,411 to be imposed
against the Company. Therefore, the company has paid $42,500 in cash, $25,000 in
restricted stock, and owed $37,411, which had been accrued as a liability in the
financial statements, for a total lawsuit resolution of $104,911. At
June 30, 2009 and 2008, the total amount due was $32,411.
The
Company has been served with a judgment in the amount of $6,600 by an individual
in Pennsylvania. As of June 30, 2009, this amount has been recorded
as a liability in the accompanying financial statements.
The
Company has received notice that it is in breach of its former contract with the
Investor Relations Group which claims it is owed $17,676.25 as well as 40,000
shares of restricted stock. As of June 30, 2009, this amount has been
recorded as a liability in the accompanying financial statements. The issuance
of the common stock has also been recorded and valued at $10,100. As
of June 30, 2009, the stock has not been issued.
The
Company has brought a defamation action against Ed Meyer and Adirondack
Pictures. A cross complaint has been filed by Adirondack against the Company
alleging claims for breach of contract, intentional misrepresentation and
declaratory relief. The Company has answered the cross-complaint, denying all of
the material allegations and intends to vigorously defend the claims
made. During the quarter ended March 31, 2009, the Company reached an
agreement with Mr. Meyer and Adirondack Pictures whereby upon execution of the
agreement by all parties, the plaintiffs and defendants fully and mutually
release and forever discharge each other from any and all claims.
ITEM
4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS
In accordance with Nevada corporate
law, no matters were subject to a vote of security holders during the year ended
June 30, 2009.
10
PART
II
ITEM
5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
MARKET
INFORMATION
The Company’s Common Stock is traded on
the NASDAQ OTC Bulletin Board market under the symbol “SVSN.” The
following table presents the high and low bid quotations for the Common Stock as
reported by the NASD for each quarter during the last two years. Such
prices reflect inter-dealer quotations without adjustments for retail markup,
markdown or commission, and do not necessarily represent actual
transactions.
Prior to December 2, 1999, there was no
trading market for Company's Common Stock. As of December 2, 1999, SVEI's Common
Stock has been traded on the OTC Bulletin Board under the trading symbol "SVED."
On June 2, 2003, the Company changed its trading symbol to
SVSN.OB. The price for the common stock has approximately ranged in
price as follows:
|
Quarter
Ended
|
High
|
Low
|
||||||
|
September
30, 2007
|
$ | 0.40 | $ | 0.39 | ||||
|
December
31, 2007
|
$ | 0.20 | $ | 0.17 | ||||
|
March
31, 2008
|
$ | 0.28 | $ | 0.28 | ||||
|
June
30, 2008
|
$ | 0.25 | $ | 0.25 | ||||
|
September
30, 2008
|
$ | 0.28 | $ | 0.15 | ||||
|
December
31, 2008
|
$ | 0.23 | $ | 0.05 | ||||
|
March
31, 2009
|
$ | 0.20 | $ | 0.05 | ||||
|
June
30, 2009
|
$ | 0.19 | $ | 0.09 | ||||
The number of shareholders of record of
the Company’s Common Stock as of August 31, 2009 was approximately
900.
DIVIDENDS
SVEI has never paid a cash dividend on
its Common Stock nor does it anticipate paying cash dividends on its Common
Stock in the near future. It is the present policy of SVEI not to pay cash
dividends on the Common Stock but to retain earnings, if any, to fund growth and
expansion. Any payment of cash dividends on the Common Stock in the future will
be dependent upon SVEI's financial condition, results of operations, current and
anticipated cash requirements, plans for expansion, as well as other factors the
Board of Directors deems relevant.
11
TRANSFER
AGENT
The Company has appointed Holladay
Stock Transfer, Inc., with offices at 2939 North 67th Place, Scottsdale,
Arizona, 85215, phone number 480-481-3940, as transfer agent for our shares of
common stock. The transfer agent is responsible for all record-keeping and
administrative functions in connection with the common shares and stock
warrants.
RECENT
SALES OF UNREGISTERED SECURITIES
During
the quarter ended September 30, 2008, the Company issued a net
new number of shares totaling 1,740,000 as follows: 500,000 shares
for cash at a price of $.20 per share; 100,000 shares for cash at a price of
$.105 per share; 140,000 shares to two individuals who agreed to participate in
two of the Company’s feature films valued at $.20 per share;1,000,000 shares to
its CEO, Jack Honour as conversion of $250,000 of accrued salary valued at $.25
per share; 500,000 shares to its CFO, Theodore Botts as conversion of $125,000
of accrued salary. This share issuance was subsequently canceled upon the
resignation of Mr. Botts on September 17, 2008 who agreed to waive all of his
accrued salary since becoming CFO on August 1, 2008. Lastly, the Company issued
2,500,000 shares to its newly appointed CEO, Mr. Lawrence Biggs, on August 1,
2008. Mr. Biggs resigned on September 16, 2008 and returned the shares for
cancellation.
During
the quarter ended March 31, 2009, the Company issued a net new number of shares
totaling 615,000 as follows: 100,000 shares for interest expense of $10,000 at a
price of $0.10 per share; 100,000 shares for cash of $10,000; 215,000 shares for
services valued at $22,650; 200,000 shares for accrued rent of $20,000 on the
corporate offices. During the quarter ended March 31, 2009, the
Board of Directors authorized the cancellation of 1,815,000 shares of common
stock. These shares have been returned to the treasury and
cancelled.
During
the quarter ended June 30, 2009, the Company issued a net new number of shares
totaling 576,000 as follows: 200,000 shares for cash of $20,000;
50,000 shares for consulting services of $7,000 at a price of $0.14 per share;
290,000 shares for conversion of notes payable totaling $29,000; 36,000 shares
for rent and interest expense of $3,960 at a price of $0.11 per
share.
During
the year ended June 30, 2009, 50,000 shares of common stock were returned to the
treasury and cancelled.
12
ITEM
6. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATIONS
Plan of Operations - The
following discussion should be read in conjunction with the Company's audited
financial statements.
SVEI intends to pursue opportunities in
three product segments of the entertainment industry:
Feature
length 3-D and 2-D films for theatrical release
Direct to
DVD 3-D and 2-D films
Licensing
of Video Game rights
StereoVision intends to be the only
public company in Hollywood focused on developing a library of films using 3-D
technology. The company intends to develop four new scripts for theatrical
release and direct to DVD movies each year and will concentrate on the most
popular genres including horror, visual thrillers, sci-fi CGI effect movies,
comedies and family films.
As a development stage company, SVEI
has minimal historical operations, no revenues and negative cash flows. In order
to satisfy cash requirements for SVEI's production and revenue goals, management
must obtain working capital through either debt or equity financing which will
lead to further dilution.
The entertainment industry is an
intensely competitive one, where price, service, location, and quality are
critical factors. The Company has many established competitors, ranging from
similar local single unit operations to large multi-national operations. The
entertainment industry may be affected by changes in customer tastes, economic,
and demographic trends. Factors such as inflation, increased supplies costs and
the availability of suitable employees may adversely affect the entertainment
industry in general and the Company in particular. In view of the Company's
limited financial resources and management availability, the Company will
continue to be at a significant competitive disadvantage vis-a-vis the Company's
competitors.
During the year ended June 30, 2008,
the Company began developing five 3D film projects: “Aubrey Blaze
Piranhas”, “Booty”, “Gonzos 3DD”, “Kung Fu U”, and “Three Dimension of
Jerusalem”. These projects are in different stages of development.
Per the Company’s proposed financing agreements, the Company will form stand
alone LLC’s on a project by project basis. Upon the completion of each film
financing, StereoVision will earn Industry standard 5% Producer’s fees from each
budget, and will use this money for debt retirement, operations, and project
development.
13
“Aubrey
Blaze Piranhas” in 3D (ABP) has been fully scripted and budgeted. We
have capitalized costs of $76,500 related to this project. ABP is a sci-fi
horror movie currently budgeted at $12,000,000. It the story of hit video game
creators who go the Amazon to film underwater video for their new video game
sensation, “Aubrey Blaze”. There they encounter mutated Piranhas that fly right
out of the water at your throat in 3D. The film is to be shot in the
phosphorescent caves in Puerto Rico. Through the already enacted Puerto Rican
government’s film producer’s rebate legislation, we expect to receive up to 40%
of the budget in a rebate. We will raise the balance of the
production budget by selling foreign distribution rights. We are offering high
net worth investors the opportunity to own half the film, for their $1,000,000
cash advance, and an $8,000,000 million dollar letter of credit (LOC). The
$1,000,000 will be used to attach a bankable director, a bankable actor, and
producers, and screenwriter’s fees. The LOC is necessary to qualify for the
Puerto Rican rebates, and the gap loans against foreign distribution contract’s.
This formula is minimally dilutive and upon successful deployment, will allow
the Company to go into the production of the movie, with full ownership of
domestic distribution. The Company has paid a $100,000 equipment leasing advance
to a 3D camera equipment company.
“Booty”
has been fully scripted and budgeted. We have capitalized costs of
$205,578 related to this project. We optioned this property from Sony
for $50,000 and will have a $500,000 rights payment due to Sony thirty days
after commencement of principal photography. “Booty” is a family fun
pirate’s movie where eight women get kidnapped by pirates and upon arrival at
the pirate’s Caribbean hideout, the women overthrow the pirates and steal their
ship filled with all the pirate’s booty. A chase ensues that has all of
history’s famous pirate’s after the women, and the treasure laden
ship. “Booty” is to be shot in Puerto Rico. The financing formula for
“Booty” is the same one that we’re using for “Aubrey Blaze Piranhas”. The
difference being that the “Booty” budget is $25,000,000. The $1,000,000 advance
in this financing model, will pay for the bankable star and director, and the
$500,000 option fee due Sony. We are in discussions with numerous potential
funding candidates. Subsequent to the completion of the financing, as with all
of our movies, it will take about one year to get the film into
distribution.
“Three
Dimensions of Jerusalem” (TDOJ) has been fully scripted and
budgeted. We have capitalized costs of $52,500 related to this
project. This is a family oriented faith-based movie and has a $6,000,000
production budget. Because there will not be a large enough budget to allow a
bankable star to utilize the Puerto Rican film producer’s rebate’s, this
financing formula calls for the investor to advance $3,000,000 for half
ownership. The balance of the budget will be funded through the Puerto Rican
rebates, and distribution advances. This is an action/adventure story
about three 12 year old boys that live in Jerusalem. One’s Christian, one’s
Muslim, and one’s Jewish. They’re best friends and this story outlines the
trials and, dangers that they encounter in today’s Jerusalem.
We have
capitalized costs related to “Gonzos 3DD” (G3D) of $42,500. With G3D being only
a three million dollar budget, a bankable star isn’t likely. Our plan is to
secure a sponsor type investor, and use G3D as a 3D advertising
vehicle.
14
For “Kung
Fu U” (KFU), we have capitalized costs of $53,000. This is the story of a
martial arts academy near Beverly Hills. They’re sponsoring a summer self
defense program with famous super hero’s, where they teach the schools nerdy
rich kids self defense. KFU is a comedy. The budget is $8,000,000. We
plan to shoot this in Louisiana where we can capitalize on the 25% film
producer’s subsidy, and we’re currently looking to secure a studio partnership
for this project. Things with studios move slowly though, so this movie is not a
top priority. While StereoVision has been in the business of attempting to
develop 3D entertainment business for 10 years, 3D has only begun receiving
mainstream acceptance in the last year or so.
During
the year ended June 30, 2009, the Company began planning the development of two
more film projects.
“Secrets
of the Lost San Sabas” (SLSS) has a completed script story
treatment. SLSS is the story of an Indian guide to the afterlife on a
300 year quest for justice. No costs have been capitalized as of June
30, 2009
“Terror
in Paradise” has a completed script story treatment. This is comedy
about an alien invasion at a beauty pageant. No costs have been capitalized as
of June 30, 2009.
In May
2010, we began looking into the development of a 3D cable television
network. We have retained the services of three professionals for the
planning and development.
Results of Operations - There
were no revenues from sales for the two years ended June 30, 2009 and 2008. SVEI
has sustained a net loss of approximately $465,000 for the year ended June 30,
2009, which was largely attributable to payments in cash and
stock for acquisition of scripts, interest on debt, investor
relations and third party consulting fees, office
rent, housing, car and consulting fees for the CEO and
accrued salaries. .From May 5, 1999 the Company was a development stage company
and had not begun principal operations. Accordingly, comparisons with prior
periods are not meaningful.
15
For the
year ended June 30, 2009, the Company had a net loss of $465,097, compared to a
net loss of $1,333,429 for the year ended June 30, 2008. The net loss
decreased from 2008 to 2009 because of a decrease in salaries and consulting
expense and a gain on forgiveness of debt for the year ended June 30,
2009. Salaries and consulting expense was $246,908 for the year ended
June 30, 2009, as compared to $892,949 for the year ended June 30,
2008. This decrease is attributable to several
factors. Officers salaries decreased in 2009 as compared to 2008 by
$112,500. This decreased because of the resignation of an officer
during the first quarter of 2009, leaving one officer accruing a salary in
2009. During 2008, the Company also issued stock to the board of
directors that was valued at $145,000. No stock was issued to
directors in 2009. During 2009 there was also a decrease in
consulting expense from $410,448 in 2008 to $21,908 in 2009. During
2008, the Company issued stock valued at $242,000 for consulting
expense. During 2009, the Company issued stock valued at $18,000 for
consulting expense. The decrease in consulting expense was also due
to a decrease in operations. General and administrative expenses was
$248,639 for the year ended June 30, 2009 and $316,676 for the year ended June
30, 2008. This decrease is mainly due to a decrease in
operations.
Interest
income decreased from $2,561 for the year ended June 30, 2008 to $1 for the year
ended June 30, 2009. This decrease was due to lower cash balances in
2009 as compared to 2008.
Interest
expense was $106,251 for 2009 as compared to $118,965 for 2008. This
decrease is attributable to certain loans being repaid in stock in 2008 and
2009, thus decreasing the amount of interest being accrued.
For the
year ended June 30, 2009, the Company had a gain on forgiveness of debt of
$137,500. This gain was from a former officer of the Company
forgiving accrued salary of $137,500 in its entirety. There was no
gain from forgiveness of debt during 2008.
LIQUIDITY
AND CAPITAL RESOURCES
The Company has developed a detailed
plan of operations to exploit the opportunities it sees in the entertainment
industry and to take advantage of the skills and experience of its management
team. On a preliminary basis, the Company estimates that it will require
approximately $1,500,000 over a period of 12 months to fund initial development
of existing projects as well as operate the company. In order to fund the actual
production of a feature film, the Company estimates it will require
approximately up to an additional $25,000,000 which it will obtain from a
variety of sources including partner distributors, tax rebates for on site
production in certain jurisdictions as well as debt and equity sources. The
Company may attempt to arrange joint ventures with studios to facilitate the
development of new movies.
16
The aforementioned estimates of capital
required are still preliminary in nature and are subject to substantial and
continuing revisions. Although the Company has not yet commenced any formal
capital raising efforts, the Company expects that any capital that it raises
will be in the form of one or more debt or equity financings. However, there can
be no assurances that the Company will be successful in raising any required
capital on a timely basis and/or under acceptable terms and conditions. To the
extent that the Company does not raise sufficient capital to implement its plan
of operations on a timely basis, it will have to curtail, revise and/or delay
its business plans. The Company has financed its operations to date from the
sale of stock and loans from related parties. During the year ended June 30,
2009, the Company received approximately $126,497 from related party loans and
$140,500 from the private placement of unregistered shares with individuals.
There can be no assurances that additional loans will be forthcoming from
officers, directors, or shareholders or that the Company will be able to
successfully sell shares.
We had
total current assets of $38,950 at June 3, 2009 consisting of cash of $0 and
prepaid expense of $38,950. We had total liabilities of $1,620,364 at June 30,
2009 all of which are current liabilities consisting of accounts payable,
accrued liabilities and loans from shareholders. At June 30, 2009, we
had a working capital deficit of $1,581,414.
Cash used
in operations was $276,047 for the year ended June 30, 2009 while it was
$770,391 for 2008. A significant portion of the decrease was due to a
large reduction in investments in films in 2009 compared to 2008. In
2009 we invested $23,328 in films, while in 2008 we invested $305,750 in
films. The effect of the change over the two year period resulted in
a $282,422 difference in cash flows from 2009 compared to 2008. Also
contributing to the decrease in cash used in operations was a decrease in the
net loss to $465,097 in 2009 from $1,333,429 in 2008. This decrease
was a result of a decrease in operations in 2009 compared to 2008.
Cash from
operations from inception to date has not been sufficient to provide the
operating capital necessary to operate. We have relied on loans from
shareholders and sales of restricted common stock for cash.
We had no
investing activities in 2009. In 2008, our investing activities were
the result of the Company purchasing $3,000 of equipment.
We had
cash provided by financing activities of $271,706 in 2009, compared to cash
provided of $638,530 in 2008. A significant portion of the decrease
was due to a decrease in loans from shareholders in 2009 compared to
2008. Loans from shareholders were $126,497 in 2009, compared to
$588,530 in 2008. This was partially offset by an increase in cash
provided from issuance of common stock. In 2009 we received cash of
$140,500 from sales of common stock, compared to $50,000 in 2008.
17
Going Concern
Consideration
Management
believes that the gross proceeds from the issuance of common stock and from
shareholder loans will be sufficient to continue our planned activities until
June 30, 2010, the end of our next fiscal year. However, we anticipate
generating losses and therefore we may be unable to continue operations in the
future as a going concern. No adjustment has been made in the accompanying
financial statements to the amounts and classification of assets and liabilities
that could result should we be unable to continue as a going
concern.
We
currently have no agreements, arrangements or understandings with any person to
obtain funds through bank loans, lines of credit or any other
sources.
Accordingly,
our independent auditors included an explanatory paragraph in their report on
the accompanying financial statements regarding concerns about our ability to
continue as a going concern. Our financial statements contain additional note
disclosures describing the circumstances that lead to this disclosure by our
independent auditors.
Government Regulations - The
Company is subject to all pertinent Federal, State, and Local laws governing its
business. The Company is subject to licensing and regulation by a
number of authorities in its State or municipality. These may include
health, safety, and fire regulations. The Company's operations are
also subject to Federal and State minimum wage laws governing such matters as
working conditions and overtime.
Critical Accounting Policies
-The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosure of contingent assets and liabilities
of the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Note 1 to the Consolidated
Financial Statements describes the significant accounting policies and methods
used in the preparation of the Consolidated Financial Statements. Estimates are
used for, but not limited to, contingencies and taxes. Actual results
could differ materially from those estimates. The following critical accounting
policies are impacted significantly by judgments, assumptions, and estimates
used in the preparation of the Consolidated Financial Statements.
We are
subject to various loss contingencies arising in the ordinary course of
business. We consider the likelihood of loss or impairment of an
asset or the incurrence of a liability, as well as our ability to reasonably
estimate the amount of loss in determining loss contingencies. An
estimated loss contingency is accrued when management concludes that it is
probable that an asset has been impaired or a liability has been incurred and
the amount of the loss can be reasonably estimated. We regularly
evaluate current information available to us to determine whether such accruals
should be adjusted.
18
We
recognize deferred tax assets (future tax benefits) and liabilities for the
expected future tax consequences of temporary differences between the book
carrying amounts and the tax basis of assets and liabilities. The
deferred tax assets and liabilities represent the expected future tax return
consequences of those differences, which are expected to be either deductible or
taxable when the assets and liabilities are recovered or
settled. Future tax benefits have been fully offset by a 100%
valuation allowance as management is unable to determine that it is more likely
than not that this deferred tax asset will be realized.
The
Company’s film costs and music licensing rights and production costs are
capitalized as incurred. We periodically review properties in
development to determine whether they will ultimately be used in the production
of a film. When we determine that a property will not be used, a
charge is made to the income statement in the period that determination is
made. It is presumed that the Company will dispose of a property, by
sale or abandonment, if it has not been set for production with three years from
the time of the first capitalized transaction. The loss would be
measured by the amount by which the carrying amount of the project exceeds its
fair value.
Recently Enacted and Proposed
Regulatory Changes - Recently enacted and proposed changes in the laws
and regulations affecting public companies, including the provisions of the
Sarbanes-Oxley Act of 2002 and rules proposed by the SEC and NASDAQ could cause
us to incur increased costs as we evaluate the implications of new rules and
respond to new requirements. The new rules could make it more difficult for us
to obtain certain types of insurance, including directors and officers liability
insurance, and we may be forced to accept reduced policy limits and coverage or
incur substantially higher costs to obtain the same or similar coverage. The
impact of these events could also make it more difficult for us to attract and
retain qualified persons to serve on the Company's board of directors, or as
executive officers. We are presently evaluating and monitoring developments with
respect to these new and proposed rules, and we cannot predict or estimate the
amount of the additional costs we may incur or the timing of such
costs.
In April 2009, the FASB updated ASC 820
to provide additional guidance for estimating fair value when the volume and
level of activity for the asset or liability have decreased significantly. ASC
820 also provides guidance on identifying circumstances that indicate a
transaction is not orderly. The implementation of ASC 820 did not have a
material effect on the Company’s financial statements.
In April 2009, the FASB updated ASC 825
regarding interim disclosures about fair value of financial
instruments. ASC 825 requires disclosures about fair value of
financial instruments in interim reporting periods of publicly traded companies
that were previously only required to be disclosed in annual financial
statements. The implementation of ASC 825 did not have a material effect on the
Company’s financial statements.
19
In April 2009, the FASB updated ASC 320
for proper recognition and presentation of other-than-temporary
impairments. ASC 320 provides additional guidance designed to create
greater clarity and consistency in accounting for and presenting impairment
losses on securities. The implementation of ASC 320 did not have a
material effect on the Company’s consolidated financial statements.
In June 2009, the FASB created the
Accounting Standards Codification, which is codified as ASC 105. ASC
105 establishes the codification as the single official non-governmental source
of authoritative accounting principles (other than guidance issued by the SEC)
and supersedes and effectively replaces previously issued GAAP hierarchy
framework. All other literature that is not part of the codification
will be considered non-authoritative. The codification is effective
for interim and annual periods ending on or after September 15,
2009. The Company has applied the codification, as required,
beginning with the 2009 Form 10-K. The adoption of the codification
did not have a material impact on the Company’s financial position, results of
operations or cash flows.
In June 2009, the FASB updated ASC 855,
which established principles and requirements for subsequent
events. This guidance details the period after the balance sheet date
which the Company should evaluate events or transactions that may occur for
potential recognition or disclosure in the financial statements, the
circumstances under which the Company should recognize events or transactions
occurring after the balance sheet date in its financial statements and the
required disclosures for such events. ASC 855 is effective for
interim and annual periods ending after June 15, 2009. The
implementation of ASC 855 did not have a material effect on the Company’s
financial statements.
In October 2009, the Financial
Accounting Standards Board (“FASB”) issued Accounting Standards Update 2009-13
(ASU 2009-13), which provided an update to ASC 605. ASU 2009-13
addresses how to separate deliverables and how to measure and allocate
arrangement consideration to one or more units of accounting in
multiple-deliverable arrangements. The amendments in this update will be
effective prospectively for revenue arrangements entered into or materially
modified in fiscal years beginning on or after June 15, 2010. The Company is
currently evaluating the impact that this update will have on its Financial
Statements.
ITEM
7. FINANCIAL STATEMENTS
The financial statements of the Company
and supplementary data are included beginning immediately following the
signature page to this report.
20
ITEM 8. CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
There are not and have not been any
disagreements between the Company and its accountants on any matter of
accounting principles, practices or financial statements
disclosure.
ITEM
8A(T). CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and
Procedures
As
required by Rule 13a-15 under the Securities Exchange Act of 1934 (the “Exchange
Act”), the Company’s management carried out an evaluation of the effectiveness
of the design and operation of its disclosure controls and procedures as of June
30, 2009, being the date of the Company’s most recently completed fiscal year
end. This evaluation was carried out under the supervision and with the
participation of our Principal Executive Officer and Principal Financial
Officer, Mr. Jack Honour, (the “Certifying Officer”). Based upon that
evaluation, the Certifying Officer concluded that our disclosure controls and
procedures were not effective as the end of the period covered by this Annual
Report on Form 10-K (“Annual Report”).
Changes
in Internal Control Over Financial Reporting
During
the last fiscal quarter, there was a change in the Registrant’s internal control
over financial reporting that has materially affected, or is reasonable likely
to materially affect, the Registrant’s internal control over financial
reporting. During the most recently completed fiscal year ended June
30, 2009, the Company reduced its staff and as a result, a limitation in the
segregation of duties occurred. The Company also does not have a
separate CFO at this time, resulting in less effective disclosure controls and
procedures.
Evaluation of Internal Control Over
Financial Reporting
Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting. Our internal control system has been designed
to provide reasonable assurance to our management and board of directors
regarding the preparation and fair presentation of our published financial
statements. All internal control systems, no matter how well designed, have
inherent limitations. Therefore, even those systems determined to be effective
can provide only reasonable assurance with respect to financial statement
preparation and presentation.
Management
conducted an evaluation of the design and operation of the Company’s internal
control over financial reporting as of June 30, 2009, based on the criteria set
forth in Internal Control – Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission. This evaluation
included review of the documentation of controls, evaluation of the design
effectiveness of controls, testing of the operating effectiveness of controls
and a conclusion on this evaluation. Based on this evaluation, management
concluded that our internal control over financial reporting was not effective
as of June 30, 2009 due to the following material weakness:
21
|
·
|
Our
Company’s administration is composed of a small number of administrative
individuals resulting in a situation where limitations on segregation of
duties exist. In order to remedy this situation we would need to
hire additional staff to provide greater segregation of duties.
Currently, it is not feasible to hire additional staff to obtain optimal
segregation of duties. Management will reassess this matter in the
following year to determine whether improvement in segregation of duty is
feasible.
|
|
·
|
Our
Company currently does not have a CFO, and our CEO does not have the
background in financial reporting to ensure that information required to
be disclosed is recorded, processed, summarized and reported within the
time periods specified in the Commission’s rules and forms and is
accumulated and communicated to management as appropriate to allow timely
decisions regarding required
disclosures.
|
This
annual report does not include an attestation report of our registered public
accounting firm regarding internal control over financial
reporting. Management’s report was not subject to attestation by our
registered public accounting firm pursuant to temporary rules of the Securities
and Exchange Commission that permit us to provide only management’s report in
this annual report.
22
PART
III
ITEM
9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Executive
Officers and Directors
The composition of the Board of
Directors as well as the Officers of the company has undergone significant
change since the end of the company’s fiscal year ending June 30, 2007. Mr.
Theodore Botts was appointed a member of the Board as well as Chief Financial
Officer of the Company on August 1, 2007. He resigned from both those positions
on September 19, 2008. Mr. Douglas Schwartz, Chairman of the Board (and
subsequently, Co Chairman) and Chief Production Officer resigned from both those
positions on September 20, 2008. Governor Carlos Romero Barcelo was
elected to the Board in March, 2008. Mr. Lawrence Biggs was appointed Chief
Executive Officer and to the Board on July 25, 2008. He resigned from both those
positions on September 16, 2008. Mr. Anthony Munafo was elected to the Board and
appointed Chief Operating Officer on August 6, 2008. Mr. John Honour, Co
Chairman was appointed by the Board to be interim CEO on September 19, 2008 and
to the positions of Chairman and interim CFO in a Board meeting on September 22.
At that same board meeting, Steven Curran and Michael Hippert were elected to
the Board and Gov. Romero Barcelo was elected to the position of Vice Chairman.
Messrs. Hippert and Bodziak resigned their positions as board members effective
November 11, 2008.
The members of the Board of Directors
of the Company serve until the next annual meeting of stockholders, or until
their successors have been elected. The officers serve at the
pleasure of the Board of Directors. The following table sets forth
the name, age, and position of each executive officer and director of the
Company: as of November 14, 2009:
|
Name of Director
|
Age
|
Current Position
|
Position Held Since
|
|||
|
Gov.
Carlos Romero Barcelo
|
73
|
Vice
Chairman, Director
|
March,
2008
|
|||
|
Jack
Honour
|
58
|
Chairman,
(Interim) CEO
|
June,
2001
|
|||
|
Anthony
Munafo
|
48
|
COO,
Director
|
August,
2008
|
|||
|
Herky
Williams
|
54
|
Secretary/Treasurer,
Director
|
May,
2000
|
|||
|
Steven
Curran
|
55
|
Director
|
Sept.
2008
|
23
Jack Honour, Chairman,
President and CEO, CFO
Mr.
Honour has been the driving force behind the Company’s vision and strategy. He
founded the Company in 1999 in order to capitalize on what he saw as the
emerging transition from traditional entertainment to state of the art
multimedia entertainment. His diverse career has included starting a number of
businesses in Restaurant Management, Real Estate and an Import/Export Trading
Company. Since he founded StereoVision Entertainment he has gathered together
the management team and Board of Directors necessary to develop the various
facets of the business. In addition, Mr. Honour has succeeded in identifying
attractive projects for the Company and forging close relationships with key
strategic partners.
Steven Williams, Secretary and
Treasurer, Director
Mr.
Williams has served as Secretary/Treasurer and a member of the board of
directors since May, 2000. Mr. Williams has an extensive background and
experience in various facets of the music industry. He served as Senior Director
of A&R for Capitol Records in 1995/6 where his duties included signing
artists as well as artist development. Such artists included Willie Nelson,
Garth Brooks, Charlie Daniels and Tanya Tucker.
Governor
Carlos Romero Barcelo, Vice Chairman
Gov.
Romero is the former two time governor of Puerto Rico, two term mayor of San
Juan and two term US congressman. He is a leading political and business figure
in Puerto Rico. He has been instrumental in helping the Company establish itself
there in preparation for its plans to build up a local post production facility
to support the ambitious plans to make Puerto Rico a leading destination for
film makers.
Anthony
Munafo, Chief Operating Officer, Director
Mr.
Munafo began his career in financial services in 1983 as a broker with Merrill
Lynch and continued in that role with Alex Brown until 1991 when he joined the
Baltimore office of Morgan Stanley. In 2000 he joined a local boutique
investment bank, Observation Capital in their corporate finance division where
he remained until 2002. Since that time he has managed his own financial
services firm, A.M. Capital Partners. During his career, Mr. Munafo has assisted
many different companies with various types of debt and equity
offerings.
Steven
Curran, Director
Steve Curran is a prominent Dallas
businessman. He was President of Marlin Financial from 2002 - 2007. For the past
year he has been developing oil and gas deals in Dallas. Steve studied at the
University of Texas in Austin
24
Audit
Committee Financial Expert
The Company's board of directors does
not have an "audit committee financial expert," within the meaning of such
phrase under applicable regulations of the Securities and Exchange Commission,
nor does it have an audit committee. The board of directors believes that its
members are financially literate and experienced in business matters, and that
one or more members are capable of (i) understanding generally accepted
accounting principles ("GAAP") and financial statements, (ii) assessing the
general application of GAAP principles in connection with our accounting for
estimates, accruals and reserves, (iii) analyzing and evaluating our financial
statements, (iv) understanding our internal controls and procedures for
financial reporting.. However, the board of directors believes that there is not
any member who has obtained these attributes through the experience specified in
the SEC's definition of "audit committee financial expert." Further, like many
small companies, it is difficult for the Company to attract and retain board
members who qualify as "audit committee financial experts," and competition for
these individuals is significant. The board believes that it is able to fulfill
its role under SEC regulations despite not having a designated "audit committee
financial expert."
Conflicts
of Interest
Certain conflicts of interest existed
at June 30, 2009 and may continue to exist between the Company and some of its
officers and directors due to the fact that each may have other business
interests to which they devote his primary attention. Each of these
officers and directors may continue to do so notwithstanding the fact that
management time should be devoted to the business of the Company.
Certain conflicts of interest may exist
between the Company and its management, and conflicts may develop in the
future. The Company has not established policies or procedures for
the resolution of current or potential conflicts of interests between the
Company, its officers and directors or affiliated entities. There can
be no assurance that management will resolve all conflicts of interest in favor
of the Company, and failure by management to conduct the Company's business in
the Company's best interest may result in liability to the
management. The officers and directors are accountable to the Company
as fiduciaries, which means that they are required to exercise good faith and
integrity in handling the Company's affairs. Shareholders who believe that the
Company has been harmed by failure of an officer or director to appropriately
resolve any conflict of interest may, subject to applicable rule of civil
procedure, be able to bring a class action or derivative suit to enforce their
rights and the Company's rights.
Board
Meetings and Committees
Our Board of Directors conducts its
business through telephonic meetings of the Board. During the fiscal year ended
June 30, 2009, the Board consisted of five individuals. As of August 31, 2009 it
consists of five individuals.
25
The Board does not currently have any
committees, but intends to establish an audit committee and a compensation
committee as soon as formal operations commence.
Code
of Ethics
We do not currently have a Code of
Ethics applicable to our principal executive, financial and accounting officers.
We do not have an independent “financial expert” on the board.
Compliance
with Section 16(a) of the Exchange Act
Based solely upon a review of forms 3,
4, and 5 and amendments thereto, furnished to the Company during or respecting
its last fiscal year, no director, officer, beneficial owner of more than 10% of
any class of equity securities of the Company or any other person known to be
subject to Section 16 of the Exchange Act of 1934, as amended, failed to file on
a timely basis reports required by Section 16(a) of the Exchange Act for the
last fiscal year.
ITEM
10. EXECUTIVE COMPENSATION
None of the executive officers’ annual
salary and bonus exceeded $200,000 during any of the Company’s last two fiscal
years and no Officer has received any cash salary payments. For the twelve
months ended June 30, 2009, the Chief Executive Officer accrued a
salary at the rate of $200,000 per year plus received benefits (housing, car,
moving expenses, consulting fees, etc.) totaling approximately
$80,000.
ITEM
11. SECURITY OWNERSHIP OF BENEFICIAL OWNERS AND MANAGEMENT
Principal
Shareholders
The table below sets forth information
as to each person owning of record or who was known by the Company to own
beneficially more than 5% of the 23,786,138 shares of issued and outstanding
Common Stock of the Company as of August 31, 2009 and information as to the
ownership of the Company's Stock by each of its directors and executive officers
and by the directors and executive officers as a group. Except as
otherwise indicated, all shares are owned directly, and the persons named in the
table have sole voting and investment power with respect to shares shown as
beneficially owned by them.
26
|
Name
and Address of
|
Nature
of
|
|||||
|
Beneficial
Owners / Directors
|
Ownership
|
Shares
Owned
|
Percent
|
|||
|
All
Executive Officers
|
||||||
|
and
Directors as a Group *
|
||||||
|
(5
persons)
|
Common
|
8,926,784
|
37.53.%
|
|||
|
Anthony
Munafo
|
Common
|
565,850
|
2.38%
|
|||
|
John
Honour
|
Common
|
7,024,934
|
29.53%
|
|||
|
Herky
Williams
|
Common
|
671,000
|
2.82%
|
|||
|
Gov.
Carlos Romero Barcelo
|
Common
|
100,000
|
0.42%
|
|||
|
Steven
Curran
|
Common
|
100,000
|
0.42%
|
*The
address of all five officers and directors is in care of the
Company.
ITEM
12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As of
June 30, 2009 and 2008, the company owed $981,491 and $795,079 respectively to
various shareholders and officers/directors. The loans are unsecured
with interest at rates of between 4.00% to 12% and have no fixed terms of
repayment. During the year ended June 30, 2009, the
Company received $126,497 in new loans from related parties, which are included
in the total above.
On June
27, July 31 and August 27, 2007, the Company borrowed $125,000, $150,000 and
$225,000 respectively from a shareholder at an interest rate of 12% per
annum. Interest of $5,000 per month was due and payable monthly
beginning in September 2007 and continuing through the payment due date on
February 21, 2009. On February 19, the Company borrowed an additional
$200,000 under the same terms. This loan was collateralized with 1,000,000
shares of Mr. John Honour’s shares. Interest of $7,000 per month is due and
payable monthly. At June 30, 2008 the total amount due on this loan
was $706,667. This amount is included in the total amount of loans
shown above. For the four month period of March-June, 2008, the lender accepted
100,000 shares of restricted stock valued at $.28 per share as payment for the
interest for those four months. At March 31, 2009, the company owed
$769,667 on this loan. The $700,000 note is convertible at the option
of the lender on the due date at a per share price equal to 75% of the closing
price on the day of conversion.
During
the year ended June 30, 2009, the Company borrowed $115,000 from various
shareholders. These loans are convertible to common stock of the
Company at a conversion rate of $.10 per share. The $115,000 in notes
payable are convertible into 1,150,000 restricted common shares. The
notes are convertible immediately and are due on demand. The Company
has recognized $13,640 of interest expense related to the beneficial conversion
feature of the notes payable. As of June 30, 2009, $29,000 of these
notes payable have been converted into 290,000 shares of common
stock.
27
ITEM
13. EXHIBITS, AND REPORTS ON FORM 8-K
Exhibits
The
following exhibits are included as part of this report:
|
Exhibit Number
|
Title of Document
|
|
2.1
*
|
Acquisition
Agreement and Plan of Reverse Merger by and between StereoVision Vision
Entertainment, Inc. and Kestrel Equity Corporation dated
December 3, 1999. (incorporated by reference to Form 10-SB
filed with the SEC on December 17, 1999)
|
|
2.2
*
|
Agreement
and Plan of Merger by and between Kestrel Equity Corporation and SVE
Merger, Inc. dated January 10, 2000.
|
|
3.1
*
|
Articles
of Incorporation of Kestrel Equity Corporation filed with the State of
Arizona on December 14, 1993. (incorporated by reference to Form 10-SB
filed with the SEC on December 17, 1999)
|
|
3.2
*
|
Articles
of Amendment of Articles of Incorporation of Kestrel Equity Corporation
filed with the State of Arizona on June 18, 1997. (incorporated
by reference to Form 10-SB filed with the SEC on December 17,
1999)
|
|
3.3
*
|
Articles
of Amendment of Articles of Incorporation of Kestrel Equity Corporation
filed with the State of Arizona on September 30,
1997. (incorporated by reference to Form 10-SB filed with the
SEC on December 17, 1999)
|
|
3.4
*
|
Bylaws
of the Kestrel Equity Corporation. (incorporated by reference to Form
10-SB filed with the SEC on December 17, 1999)
|
|
3.5
*
|
Articles
of Incorporation of SVE Merger, Inc. filed with the State of Nevada on
December 23, 1999.
|
|
3.6
*
|
Bylaws
of SVE Merger, Inc.
|
|
4.1
*
|
Specimen
Stock Certificate of Kestrel Equity Corporation. (incorporated by
reference to Form 10-SB filed with the SEC on December 17,
1999)
|
|
4.2
*
|
Specimen
Stock Certificate of SVE Merger, Inc.
|
|
10.1*
|
Stock
Purchase Agreement by and between Kestrel Equity Corporation and John
Honour, dated September 25, 1999.
|
|
31
|
Certification
of Principal Executive and Principal Financial Officer Pursuant to 18
U.S.C Section 1350 as Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
|
32
|
Certification
of Principal Executive and Principal Financial Officer Pursuant to 18
U.S.C Section 1350 as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
|
|
(*)
|
Incorporated
by reference to the Registrant’s registration statement on Form 10-SB
filed on August 9, 2000.
|
|
(a)
|
Reports on Form 8-K
filed.
|
The Company filed reports on Form 8-K
on August 25, 2008, September 23, 2008 and November 13, 2008.
28
ITEM
14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Robison, Hill & Co. has served as
the Company’s Principal Accountant since 1999. Their pre-approved fees billed to
the Company are set forth below:
|
Fiscal
year ending
June
30, 2009
[Missing Graphic Reference]
|
Fiscal
year ending
June
30, 2008
[Missing Graphic Reference]
|
|||||||
|
Audit
Fees
|
$ | 24,270 | $ | 29,351 | ||||
|
Audit
Related Fees
|
NIL
|
NIL
|
||||||
|
Tax
Fees
|
480 | 480 | ||||||
|
All
Other Fees
|
NIL
|
NIL
|
||||||
Audit Fees. Consists of fees
billed for professional services rendered for the audits of our consolidated
financial statements, reviews of our interim consolidated financial statements
included in quarterly reports, services performed in connection with filings
with the Securities & Exchange Commission and related comfort letters and
other services that are normally provided by Robison, Hill & Company in
connection with statutory and regulatory filings or engagements.
Tax Fees. Consists of fees
billed for professional services for tax compliance, tax advice and tax
planning. These services include assistance regarding federal, state and local
tax compliance and consultation in connection with various transactions and
acquisitions.
Audit Committee Pre-Approval
of Audit and Permissible Non-Audit Services of Independent
Auditors
The Board
of Directors is to pre-approve all audit and non-audit services provided by the
independent auditors. These services may include audit services, audit-related
services, tax services and other services as allowed by law or regulation.
Pre-approval is generally provided for up to one year and any pre-approval is
detailed as to the particular service or category of services and is generally
subject to a specifically approved amount. The independent auditors and
management are required to periodically report to the Board regarding the extent
of services provided by the independent auditors in accordance with this
pre-approval and the fees incurred to date. The Board may also pre-approve
particular services on a case-by-case basis.
29
SIGNATURES
Pursuant to the requirements of section
13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant
has duly caused this report to be signed on it behalf by the undersigned,
thereunto duly authorized.
STEREOVISION
VISION ENTERTAINMENT, INC.
|
Dated:
July 16, 2010
|
By /S/ John
Honour
|
|
C.E.O.,
President, Director
|
Pursuant to the requirements of the
Securities Exchange Act of 1934, as amended, this report has been signed below
by the following persons on behalf of the Registrant and in the capacities
indicated on this 16th day of July 2010.
Signatures
& Title
/S/ John
Honour
John
Honour
C.E.O.,
President, Director
(Principal
Executive Officer and Principal Financial Officer)
/s/ Anthony Munafo
Anthony
Munafo
Director
/S/ Andres Romero
Andres
Romero
Director
/S/ Herky Williams
Herky
Williams
Secretary-Treasurer/Director
Steven
Curran
Director
30
STEREO
VISION ENTERTAINMENT, INC.
(A
Development Stage Company)
-:-
INDEPENDENT
REGISTERED PUBLIC ACCOUNTANTS REPORT
JUNE
30, 2009 AND 2008
CONTENTS
|
Page
|
|
|
Report
of Independent Registered Public Accountants
|
F -
1
|
|
Consolidated
Balance Sheets
|
|
|
June
30, 2009 and 2008
|
F -
3
|
|
Consolidated
Statements of Operations for the
|
|
|
Years
Ended June 30, 2009 and 2008 and the Cumulative
|
|
|
Period
May 5, 1999 (inception) to June 30, 2009
|
F -
4
|
|
Consolidated
Statement of Stockholders' Equity for the
|
|
|
Period
May 5, 1999 (Inception) to June 30, 2009
|
F -
5
|
|
Consolidated
Statements of Cash Flows for the
|
|
|
Years
Ended June 30, 2009 and 2008 and the Cumulative
|
|
|
Period
May 5, 1999 (Inception) to June 30, 2009
|
F -
22
|
|
Notes
to Consolidated Financial Statements
|
F -
24
|
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
Stereo
Vision Entertainment, Inc.
(A
Development Stage Company)
We have
audited the accompanying consolidated balance sheets of Stereo Vision
Entertainment, Inc. (a development stage company) as of June 30, 2009 and 2008
and the related consolidated statements of operations, and cash flows for the
years ended June 30, 2009 and 2008 and the cumulative period May 5, 1999
(inception) to June 30, 2009 and the consolidated statement of stockholders’
equity for the period from May 5, 1999 (inception) to June 30,
2009. These consolidated 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 audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require
that we plan and perform the 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 also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of Stereo Vision Entertainment,
Inc. (a development stage company) as of June 30, 2009 and 2008 and
the results of its operations and its cash flows for the years ended June 30,
2009 and 2008 and the cumulative period May 5, 1999 (inception) to June 30,
2009, in conformity with accounting principles generally accepted in the United
States of America.
F -
1
The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has suffered recurring losses from operations
and has a net capital deficiency that raise substantial doubt about its ability
to continue as a going concern. Management’s plans in regard to these
matters are also described in Note 1. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
/S/
Robison, Hill & Co.
Certified
Public Accountants
Salt Lake
City, Utah
October
12, 2009
F -
2
STEREO VISION ENTERTAINMENT,
INC.
(A Development Stage
Company)
CONSOLIDATED BALANCE
SHEETS
|
ASSETS:
|
June
30,
|
|||||||
|
2009
|
2008
|
|||||||
|
Current
Assets:
|
||||||||
|
Cash
|
$ | - | $ | 4,341 | ||||
|
Prepaid
Expense
|
38,950 | 6,750 | ||||||
|
Total
Current Assets
|
38,950 | 11,091 | ||||||
|
Fixed
Assets:
|
||||||||
|
Office
Equipment
|
16,745 | 16,745 | ||||||
|
Less
Accumulated Depreciation
|
(15,335 | ) | (14,375 | ) | ||||
|
Net
Fixed Assets
|
1,410 | 2,370 | ||||||
|
Intangible
and Other Non- Current Assets:
|
||||||||
|
Investment
in JamOakie
|
11,893 | 11,893 | ||||||
|
Films,
Manuscripts, Recordings and Similar Property
|
430,078 | 406,750 | ||||||
|
Net
Intangible and Other Non-Current Assets
|
441,971 | 418,643 | ||||||
|
|
||||||||
|
Total
Assets
|
$ | 482,331 | $ | 432,104 | ||||
|
LIABILITIES AND STOCKHOLDERS’
EQUITY:
|
||||||||
|
Liabilities:
|
||||||||
|
Accounts
Payable
|
$ | 198,844 | $ | 188,510 | ||||
|
Accrued
Expenses
|
402,908 | 613,790 | ||||||
|
Bank
Overdraft
|
4,709 | |||||||
|
Lawsuit
Payable
|
32,411 | 32,411 | ||||||
|
Loans
from Shareholders
|
981,492 | 795,079 | ||||||
|
Total
Current Liabilities
|
1,620,364 | 1,629,790 | ||||||
|
Stockholders'
Equity:
|
||||||||
|
Common
Stock, $.001 Par value
|
||||||||
|
Authorized
100,000,000 shares,
|
||||||||
|
Issued
23,786,138 shares at June 30, 2009
|
||||||||
|
and
22,720,138 shares at June 30, 2008
|
23,786 | 22,720 | ||||||
|
Common
Stock to be Issued, 96,000 shares at
|
||||||||
|
June
30, 2009 and 2008
|
96 | 96 | ||||||
|
Additional
Paid in Capital
|
15,858,149 | 15,334,465 | ||||||
|
Deficit
Accumulated During the Development Stage
|
(17,020,064 | ) | (16,554,967 | ) | ||||
|
Total
Stockholders' Equity
|
(1,138,033 | ) | (1,197,686 | ) | ||||
|
Total
Liabilities and Stockholders' Equity
|
$ | 482,331 | $ | 432,104 | ||||
The accompanying notes are an integral
part of these financial statements.
F -
3
STEREO VISION ENTERTAINMENT,
INC.
(A Development Stage
Company)
CONSOLIDATED STATEMENTS OF
OPERATIONS
|
Cumulative
|
||||||||||||
|
Since
May 5,
|
||||||||||||
|
1999
|
||||||||||||
|
For
the Years Ended
|
Inception
of
|
|||||||||||
|
June
30,
|
Development
|
|||||||||||
|
2009
|
2008
|
Stage
|
||||||||||
|
Revenues
|
$ | - | $ | - | $ | - | ||||||
|
Expenses
|
||||||||||||
|
Research
& Development
|
- | - | 293,000 | |||||||||
|
General
& Administrative
|
248,639 | 316,676 | 9,166,953 | |||||||||
|
Salaries
& Consulting
|
246,908 | 892,949 | 6,526,721 | |||||||||
|
Advertising
& Promotion
|
- | - | 418,423 | |||||||||
|
Loss
on Investment
|
- | - | 558,191 | |||||||||
|
Lawsuit
Settlement
|
- | 6,600 | 111,511 | |||||||||
|
Operating
Loss
|
(495,547 | ) | (1,216,225 | ) | (17,074,799 | ) | ||||||
|
Other
income (expense):
|
||||||||||||
|
Interest
income
|
1 | 2,561 | 2,562 | |||||||||
|
Interest
expense
|
(106,251 | ) | (118,965 | ) | (672,503 | ) | ||||||
|
Forgiveness
of debt
|
137,500 | - | 600,138 | |||||||||
|
Investment
Fee
|
- | - | (75,000 | ) | ||||||||
|
Loss
on Sale of Assets
|
- | - | (15,883 | ) | ||||||||
|
Write
off of Note Receivable
|
- | - | (191,701 | ) | ||||||||
|
Gain
(Loss) on Available for Sale
|
||||||||||||
|
Securities
|
- | - | 412,772 | |||||||||
|
Total
Other Income (expense)
|
31,250 | (116,404 | ) | 60,385 | ||||||||
|
Net
Loss Before Taxes
|
(464,297 | ) | (1,332,629 | ) | (17,014,414 | ) | ||||||
|
Income
Tax Expense
|
(800 | ) | (800 | ) | (5,650 | ) | ||||||
|
Net
Loss
|
$ | (465,097 | ) | $ | (1,333,429 | ) | $ | (17,020,064 | ) | |||
|
Basic
& Diluted loss Per Share
|
$ | (0.02 | ) | $ | (0.06 | ) | ||||||
|
Weighted
Average
|
23,700,946 | 21,453,676 | ||||||||||
The
accompanying notes are an integral part of these financial
statements.
F -
4
STEREO VISION ENTERTAINMENT,
INC.
(A Development Stage
Company)
CONSOLIDATED STATEMENT OF
STOCKHOLDERS' EQUITY
|
Deficit
|
||||||||||||||||||||
|
Accumulated
|
||||||||||||||||||||
|
Common
|
Additional
|
During
|
||||||||||||||||||
|
Common
Stock
|
Stock
|
Paid
in
|
Development
|
|||||||||||||||||
|
Shares
|
Value
|
to
be Issued
|
Capital
|
Stage
|
||||||||||||||||
|
May
5, 1999 Stock Issued for Services
|
||||||||||||||||||||
|
and
Payment of Accounts Payable
|
1,530,000 | $ | 1,530 | $ | - | $ | 3,470 | $ | - | |||||||||||
|
Net
Loss
|
- | - | - | - | (144,977 | ) | ||||||||||||||
|
Balance
at June 30, 1999
|
1,530,000 | 1,530 | - | 3,470 | (144,977 | ) | ||||||||||||||
|
Retroactive
Adjustment for 25:1
|
||||||||||||||||||||
|
Stock
Split May 30, 2003
|
(1,468,800 | ) | (1,469 | ) | - | 1,469 | - | |||||||||||||
|
Restated
Balance June 30, 1999
|
61,200 | 61 | - | 4,939 | (144,977 | ) | ||||||||||||||
|
December
2, 1999 Stock Issued in
|
||||||||||||||||||||
|
Exchange
for Assets
|
58,800 | 59 | - | 4,011,841 | - | |||||||||||||||
|
December
3, 1999 Stock Issued in
|
||||||||||||||||||||
|
Connection
to Merger with Kestrel
|
||||||||||||||||||||
|
Equity
Corporation
|
48,000 | 48 | - | (112,114 | ) | - | ||||||||||||||
|
December
31, 1999 Stock Issued
|
||||||||||||||||||||
|
for
Services
|
14,000 | 14 | - | 699,986 | - | |||||||||||||||
|
February
14, 2000 Stock Issued
|
||||||||||||||||||||
|
for
Services
|
4,000 | 4 | - | 99,996 | - | |||||||||||||||
|
April
17, 2000 Stock Issued for
|
||||||||||||||||||||
|
Services
|
4,000 | 4 | - | 99,996 | - | |||||||||||||||
|
May
4, 2000 Stock Issued for Cash
|
2,200 | 2 | - | 54,998 | - | |||||||||||||||
|
June
2, 2000 Stock Issued for Services
|
4,000 | 4 | - | 99,996 | - | |||||||||||||||
|
June
30, 2000 Stock Issued for Cash
|
1,420 | 2 | - | 35,498 | - | |||||||||||||||
|
Net
Loss
|
- | - | - | - | (2,680,213 | ) | ||||||||||||||
F -
5
STEREO VISION ENTERTAINMENT,
INC.
(A Development Stage
Company)
CONSOLIDATED STATEMENT OF
STOCKHOLDERS' EQUITY
(Continued)
|
Deficit
|
||||||||||||||||||||
|
Accumulated
|
||||||||||||||||||||
|
Common
|
Additional
|
During
|
||||||||||||||||||
|
Common
Stock
|
Stock
|
Paid
in
|
Development
|
|||||||||||||||||
|
Shares
|
Value
|
to
be Issued
|
Capital
|
Stage
|
||||||||||||||||
|
Balance
at June 30, 2000
|
197,620 | $ | 198 | $ | - | $ | 4,995,136 | $ | (2,825,190 | ) | ||||||||||
|
September
13, 2000 Stock Issued for
|
||||||||||||||||||||
|
Conversion
of notes payable
|
5,000 | 5 | - | 141,245 | - | |||||||||||||||
|
September
29, 2000 Stock Issued for
|
||||||||||||||||||||
|
Advertising
|
4,000 | 4 | - | 94,996 | - | |||||||||||||||
|
October
27, 2000 Stock Issued for
|
||||||||||||||||||||
|
Advertising
|
500 | - | - | 12,500 | - | |||||||||||||||
|
November
15, 2000 Stock Issued for
|
||||||||||||||||||||
|
Conversion
of Note Payable
|
32,000 | 32 | - | 407,106 | - | |||||||||||||||
|
November
22, 2000 Stock Issued for
|
||||||||||||||||||||
|
Conversion
of Note Payable
|
2,000 | 2 | - | 24,998 | - | |||||||||||||||
|
November
22, 2000 Stock Issued for
|
||||||||||||||||||||
|
Consulting
|
4,080 | 4 | - | 101,996 | - | |||||||||||||||
|
December
4, 2000 Stock Issued for
|
||||||||||||||||||||
|
Services
|
400 | - | - | 10,200 | - | |||||||||||||||
|
December
14, 2000 Stock Issued for
|
||||||||||||||||||||
|
Services
|
4,000 | 4 | - | 105,996 | - | |||||||||||||||
|
January
23, 2001 Stock Issued for
|
||||||||||||||||||||
|
Cash
|
600 | 1 | - | 14,999 | - | |||||||||||||||
|
January
30, 2001 Stock Issued for
|
||||||||||||||||||||
|
Services
|
4,724 | 4 | - | 64,946 | - | |||||||||||||||
|
March
10, 2001 Stock Issued for
|
||||||||||||||||||||
|
Services
|
8,000 | 8 | - | 153,992 | - | |||||||||||||||
F -
6
STEREO VISION ENTERTAINMENT,
INC.
(A Development Stage
Company)
CONSOLIDATED STATEMENT OF
STOCKHOLDERS' EQUITY
(Continued)
|
Deficit
|
||||||||||||||||||||
|
Accumulated
|
||||||||||||||||||||
|
Common
|
Additional
|
During
|
||||||||||||||||||
|
Common
Stock
|
Stock
|
Paid
in
|
Development
|
|||||||||||||||||
|
Shares
|
Value
|
to
be Issued
|
Capital
|
Stage
|
||||||||||||||||
|
April
9, 2001 Stock Issued for
|
||||||||||||||||||||
|
Advertising
|
3,600 | $ | 4 | $ | - | $ | 49,496 | $ | - | |||||||||||
|
April
18, 2001 Stock Issued for
|
||||||||||||||||||||
|
Acquisition
of Wilfield Entertainment
|
16,000 | 16 | - | 219,984 | - | |||||||||||||||
|
May
25, 2001 Shares Cancelled for
|
||||||||||||||||||||
|
Non-Performance
of Advertising and
|
||||||||||||||||||||
|
Services
|
(14,000 | ) | (14 | ) | - | (328,486 | ) | - | ||||||||||||
|
June
1, 2001 Shares Issued for
|
||||||||||||||||||||
|
Conversion
of Notes Payable
|
840 | 1 | - | 7,512 | - | |||||||||||||||
|
June
15, 2001 Shares Issued for
|
||||||||||||||||||||
|
Services
|
1,000 | 1 | - | 14,999 | - | |||||||||||||||
|
June
28, 2001 Shares Issued for
|
||||||||||||||||||||
|
Advertising
|
4,000 | 4 | - | 59,996 | - | |||||||||||||||
|
June
28, 2001 Shares Issued for
|
||||||||||||||||||||
|
Services
|
6,000 | 6 | - | 89,994 | - | |||||||||||||||
|
June
29, 2001 Shares Issued for
|
||||||||||||||||||||
|
Conversion
of Notes Payable
|
34,000 | 34 | - | 224,966 | - | |||||||||||||||
|
Net
Loss
|
- | - | - | - | (4,572,325 | ) | ||||||||||||||
|
Balance
at June 30, 2001
|
314,364 | 314 | - | 6,466,571 | (7,397,515 | ) | ||||||||||||||
|
July
3, 2001 Shares Issued for Expense
|
1,000 | 1 | - | 9,999 | - | |||||||||||||||
|
July
3, 2001 Shares Issued for Services
|
5,000 | 5 | - | 74,995 | - | |||||||||||||||
|
July
25, 2001 Shares Issued for Cash
|
1,600 | 1 | - | 19,999 | - | |||||||||||||||
F -
7
STEREO VISION ENTERTAINMENT,
INC.
(A Development Stage
Company)
CONSOLIDATED STATEMENT OF
STOCKHOLDERS' EQUITY
(Continued)
|
Deficit
|
||||||||||||||||||||
|
Accumulated
|
||||||||||||||||||||
|
Common
|
Additional
|
During
|
||||||||||||||||||
|
Common
Stock
|
Stock
|
Paid
in
|
Development
|
|||||||||||||||||
|
Shares
|
Value
|
to
be Issued
|
Capital
|
Stage
|
||||||||||||||||
|
July
30, 2001 Shares Issued for
|
||||||||||||||||||||
|
Consulting
|
4,400 | $ | 4 | $ | - | $ | 45,096 | $ | - | |||||||||||
|
August
29, 2001 Shares Issued for
|
||||||||||||||||||||
|
Interest
on Notes Payable
|
13,400 | 13 | - | 100,487 | - | |||||||||||||||
|
September
10, 2001 Shares Issued for
|
||||||||||||||||||||
|
Services
|
800 | 1 | - | 5,999 | - | |||||||||||||||
|
September
10, 2001 Shares Issued for
|
||||||||||||||||||||
|
Conversion
of Note Payable
|
4,000 | 4 | - | 25,596 | - | |||||||||||||||
|
September
25, 2001 Shares Canceled
|
||||||||||||||||||||
|
For
Non-Performance of Contract
|
(4,000 | ) | (4 | ) | - | 70,536 | - | |||||||||||||
|
September
27, 2001 Shares Issued for
|
||||||||||||||||||||
|
Services
|
101,000 | 101 | - | 1,136,149 | - | |||||||||||||||
|
September
27, 2001 Shares Issued for
|
||||||||||||||||||||
|
Cash
and Commission
|
2,000 | 2 | - | 24,998 | - | |||||||||||||||
|
October
2, 2001 Shares Issued for
|
||||||||||||||||||||
|
Services
|
18,000 | 18 | - | 242,982 | - | |||||||||||||||
|
October
31, 2001 Shares Issued for
|
||||||||||||||||||||
|
Conversion
of Note Payable
|
10,182 | 10 | - | 89,085 | - | |||||||||||||||
|
November
1, 2001 Shares Issued for
|
||||||||||||||||||||
|
Services
|
2,825 | 3 | - | 14,123 | - | |||||||||||||||
|
November
7, 2001 Shares Issued for
|
||||||||||||||||||||
|
Conversion
of Note Payable
|
8,910 | 9 | - | 55,676 | - | |||||||||||||||
F -
8
STEREO VISION ENTERTAINMENT,
INC.
(A Development Stage
Company)
CONSOLIDATED STATEMENT OF
STOCKHOLDERS' EQUITY
(Continued)
|
Deficit
|
||||||||||||||||||||
|
Accumulated
|
||||||||||||||||||||
|
Common
|
Additional
|
During
|
||||||||||||||||||
|
Common
Stock
|
Stock
|
Paid
in
|
Development
|
|||||||||||||||||
|
Shares
|
Value
|
to
be Issued
|
Capital
|
Stage
|
||||||||||||||||
|
December
19, 2001 Shares Issued for
|
||||||||||||||||||||
|
Services
|
44,000 | $ | 44 | $ | - | $ | 153,956 | $ | - | |||||||||||
|
December
19, 2001 Shares Issued for
|
||||||||||||||||||||
|
Conversion
of Note Payable
|
6,820 | 7 | - | 23,863 | - | |||||||||||||||
|
December
20, 2001 Shares Issued for
|
||||||||||||||||||||
|
Services
|
30,000 | 30 | - | 157,470 | - | |||||||||||||||
|
January
15, 2002 Shares Issued for
|
||||||||||||||||||||
|
Cash
|
12,000 | 12 | - | 99,988 | - | |||||||||||||||
|
January
24, 2002 Shares Issued for
|
||||||||||||||||||||
|
Previous
Conversion of Note Payable
|
55,660 | 56 | - | (57 | ) | - | ||||||||||||||
|
February
25, 2002 Shares Issued for
|
||||||||||||||||||||
|
Previous
Conversion of Note Payable
|
63,525 | 64 | - | (64 | ) | - | ||||||||||||||
|
April
10, 2002 Shares Issued for
|
||||||||||||||||||||
|
Conversion
of Note Payable
|
9,920 | 10 | - | 32,617 | - | |||||||||||||||
|
April
15, 2002 Shares Issued for Rent
|
2,000 | 2 | - | 3,998 | - | |||||||||||||||
|
April
15, 2002 Shares Issued for Cash
|
4,000 | 4 | - | 2,996 | - | |||||||||||||||
|
April
29, 2002 Shares Issued for
|
||||||||||||||||||||
|
Project
Agreement
|
8,000 | 8 | - | 11,992 | - | |||||||||||||||
|
April
29, 2002 Shares Issued for
|
||||||||||||||||||||
|
Consulting
|
4,000 | 4 | - | 5,996 | - | |||||||||||||||
|
May
8, 2002 Shares Issued for Cash
|
4,000 | 4 | - | 2,496 | - | |||||||||||||||
|
May
24, 2002 Shares Issued for
|
||||||||||||||||||||
|
Consulting
|
4,000 | 4 | - | 3,496 | - | |||||||||||||||
F -
9
STEREO VISION ENTERTAINMENT,
INC.
(A Development Stage
Company)
CONSOLIDATED STATEMENT OF
STOCKHOLDERS' EQUITY
(Continued)
|
Deficit
|
||||||||||||||||||||
|
Accumulated
|
||||||||||||||||||||
|
Common
|
Additional
|
During
|
||||||||||||||||||
|
Common
Stock
|
Stock
|
Paid
in
|
Development
|
|||||||||||||||||
|
Shares
|
Value
|
to
be Issued
|
Capital
|
Stage
|
||||||||||||||||
|
May
30, 2002 Shares Issued for
|
||||||||||||||||||||
|
Project
Agreement
|
4,000 | $ | 4 | $ | - | $ | 2,996 | $ | - | |||||||||||
|
June
24, 2002 Shares Issued for Cash
|
4,000 | 4 | - | 7,496 | - | |||||||||||||||
|
Net
Loss
|
- | - | - | - | (1,066,683 | ) | ||||||||||||||
|
Balance
at June 30, 2002
|
739,406 | 739 | - | 8,891,530 | (8,464,198 | ) | ||||||||||||||
|
July
1, 2002 Shares Issued for Cash
|
34,000 | 34 | - | 9,466 | - | |||||||||||||||
|
July
8, 2002 Shares Issued for
|
||||||||||||||||||||
|
Interest
on Debt Retirement
|
85,344 | 85 | - | 81,582 | - | |||||||||||||||
|
December
20, 2002, Shares returned
|
||||||||||||||||||||
|
to
treasury and cancelled
|
(20,000 | ) | (20 | ) | - | 20 | - | |||||||||||||
|
December
23, 2002, Shares
|
||||||||||||||||||||
|
Cancelled
for non-performance of
|
||||||||||||||||||||
|
Services
|
(104,000 | ) | (104 | ) | - | (1,054,396 | ) | - | ||||||||||||
|
January
1, 2003, Shares Issued for
|
||||||||||||||||||||
|
Services
|
494,000 | 494 | - | 370,006 | - | |||||||||||||||
|
March
18, 2003, Shares Issued for
|
||||||||||||||||||||
|
Services
|
52,600 | 53 | - | 26,247 | - | |||||||||||||||
|
March
26, 2003, Shares Issued for
|
||||||||||||||||||||
|
Conversion
of Debt
|
160,000 | 160 | - | 274,772 | - | |||||||||||||||
|
March
26, 2003, Shares Issued for
|
||||||||||||||||||||
|
Services
|
13,200 | 13 | - | 6,587 | - | |||||||||||||||
|
May
9, 2003, Shares Issued for
|
||||||||||||||||||||
|
Services
|
101,600 | 102 | - | 25,298 | - | |||||||||||||||
F -
10
STEREO VISION ENTERTAINMENT,
INC.
(A Development Stage
Company)
CONSOLIDATED STATEMENT OF
STOCKHOLDERS' EQUITY
(Continued)
|
Deficit
|
||||||||||||||||||||
|
Accumulated
|
||||||||||||||||||||
|
Common
|
Additional
|
During
|
||||||||||||||||||
|
Common
Stock
|
Stock
|
Paid
in
|
Development
|
|||||||||||||||||
|
Shares
|
Value
|
to
be Issued
|
Capital
|
Stage
|
||||||||||||||||
|
May
29, 2003, Shares Issued for
|
||||||||||||||||||||
|
Services
|
108,000 | $ | 108 | $ | - | $ | 121,932 | $ | - | |||||||||||
|
June
2, 2003, Shares Issued for
|
||||||||||||||||||||
|
Services
|
38,000 | 38 | - | 42,902 | - | |||||||||||||||
|
June
2, 2003, Shares Issued for
|
||||||||||||||||||||
|
Conversion
of Debt
|
88,000 | 88 | - | 19,912 | - | |||||||||||||||
|
June
3, 2003, Shares Cancelled for
|
||||||||||||||||||||
|
Non-Performance
of Service
|
(12,000 | ) | (12 | ) | - | (56,988 | ) | - | ||||||||||||
|
June
12, 2003, Shares Issued for
|
||||||||||||||||||||
|
Services
|
2,000,000 | 2,000 | - | 598,000 | - | |||||||||||||||
|
June
20, 2003, Shares Issued for
|
||||||||||||||||||||
|
Services
|
10,000 | 10 | - | 5,990 | - | |||||||||||||||
|
June
25, 2003, Shares Issued for
|
||||||||||||||||||||
|
Conversion
of Debt
|
40,000 | 40 | - | 15,451 | - | |||||||||||||||
|
Net
Loss
|
- | - | - | - | (1,447,447 | ) | ||||||||||||||
|
Balance
at June 30, 2003
|
3,828,150 | 3,828 | - | 9,378,311 | (9,911,645 | ) | ||||||||||||||
|
July
1, 2003, Shares Issued for
|
||||||||||||||||||||
|
Services
|
100,000 | 100 | - | 47,900 | - | |||||||||||||||
|
July
8, 2003 Loan Converted to Shares
|
30,000 | 30 | - | 8,875 | - | |||||||||||||||
|
July
9, 2003, Shares Issued for
|
||||||||||||||||||||
|
Services
|
70,000 | 70 | - | 23,930 | - | |||||||||||||||
F -
11
STEREO VISION ENTERTAINMENT,
INC.
(A Development Stage
Company)
CONSOLIDATED STATEMENT OF
STOCKHOLDERS' EQUITY
(Continued)
|
Deficit
|
||||||||||||||||||||
|
Accumulated
|
||||||||||||||||||||
|
Common
|
Additional
|
During
|
||||||||||||||||||
|
Common
Stock
|
Stock
|
Paid
in
|
Development
|
|||||||||||||||||
|
Shares
|
Value
|
to
be Issued
|
Capital
|
Stage
|
||||||||||||||||
|
September
11, 2003, Shares Issued
|
||||||||||||||||||||
|
for
Services
|
218,000 | $ | 218 | $ | - | $ | 101,382 | $ | - | |||||||||||
|
September
17, 2003, Shares Issued
|
||||||||||||||||||||
|
for
Services
|
100,000 | 100 | - | 51,900 | - | |||||||||||||||
|
September
29, 2003, Shares Issued
|
||||||||||||||||||||
|
for
Services
|
710,000 | 710 | - | 403,990 | - | |||||||||||||||
|
October
1, 2003, Shares Issued for
|
||||||||||||||||||||
|
Cash
|
200,000 | 200 | - | 55,300 | - | |||||||||||||||
|
October
1, 2003, Shares Issued for
|
||||||||||||||||||||
|
Services
|
20,000 | 20 | - | 4,980 | - | |||||||||||||||
|
November
17, 2003, Shares
|
||||||||||||||||||||
|
Canceled
for Non-Performance
|
(100,000 | ) | (100 | ) | - | (47,800 | ) | - | ||||||||||||
|
December
2, 2003, Shares Issued for
|
||||||||||||||||||||
|
Services
|
1,223,072 | 1,223 | - | 210,277 | - | |||||||||||||||
|
January
12, 2004, Shares Issued for
|
||||||||||||||||||||
|
Services
|
90,000 | 90 | - | 53,910 | - | |||||||||||||||
|
January
20, 2004, Shares Issued for
|
||||||||||||||||||||
|
Conversion
of Note Payable
|
200,000 | 200 | - | 34,846 | - | |||||||||||||||
|
February
2, 2004, Shares Issued for
|
||||||||||||||||||||
|
Cash
|
400,000 | 400 | - | 99,600 | - | |||||||||||||||
|
February
9, 2004, Shares Canceled
|
||||||||||||||||||||
|
for
Non-Performance
|
(20,000 | ) | (20 | ) | - | (4,980 | ) | - | ||||||||||||
F -
12
STEREO VISION ENTERTAINMENT,
INC.
(A Development Stage
Company)
CONSOLIDATED STATEMENT OF
STOCKHOLDERS' EQUITY
(Continued)
|
Deficit
|
||||||||||||||||||||
|
Accumulated
|
||||||||||||||||||||
|
Common
|
Additional
|
During
|
||||||||||||||||||
|
Common
Stock
|
Stock
|
Paid
in
|
Development
|
|||||||||||||||||
|
Shares
|
Value
|
to
be Issued
|
Capital
|
Stage
|
||||||||||||||||
|
March
9, 2004, Shares Issued for
|
||||||||||||||||||||
|
Cash
|
25,000 | $ | 25 | $ | - | $ | 12,475 | $ | - | |||||||||||
|
March
9, 2004, Shares Issued for
|
||||||||||||||||||||
|
Rent
and Accounts Payable
|
100,000 | 100 | - | 24,900 | - | |||||||||||||||
|
March
9, 2004, Shares Canceled for
|
||||||||||||||||||||
|
Non-Performance
|
(156,000 | ) | (156 | ) | - | (75,276 | ) | - | ||||||||||||
|
March
11, 2004, Shares Issued for
|
||||||||||||||||||||
|
Services
|
345,000 | 345 | - | 689,655 | - | |||||||||||||||
|
April
7, 2004, Shares Issued for
|
||||||||||||||||||||
|
Services
|
60,000 | 60 | - | 122,740 | - | |||||||||||||||
|
April
7, 2004, Shares Issued for
|
||||||||||||||||||||
|
Cash
|
375,000 | 375 | - | 214,495 | - | |||||||||||||||
|
April
7, 2004, Loan Converted to
|
||||||||||||||||||||
|
Shares
|
30,000 | 30 | - | 14,169 | - | |||||||||||||||
|
April
14, 2004, Shares Issued for
|
||||||||||||||||||||
|
Cash
|
100,000 | 100 | - | 25,000 | - | |||||||||||||||
|
May
6, 2004, Shares Issued for
|
||||||||||||||||||||
|
Cash
|
10,000 | 10 | - | 4,990 | - | |||||||||||||||
|
May
25, 2004, Shares Issued for
|
||||||||||||||||||||
|
Services
|
50,000 | 50 | - | 40,450 | - | |||||||||||||||
|
June
8, 2004, Shares Issued for
|
||||||||||||||||||||
|
Investment
Expense
|
100,000 | 100 | - | 74,900 | - | |||||||||||||||
F -
13
STEREO VISION ENTERTAINMENT,
INC.
(A Development Stage
Company)
CONSOLIDATED STATEMENT OF
STOCKHOLDERS' EQUITY
(Continued)
|
Deficit
|
||||||||||||||||||||
|
Accumulated
|
||||||||||||||||||||
|
Common
|
Additional
|
During
|
||||||||||||||||||
|
Common
Stock
|
Stock
|
Paid
in
|
Development
|
|||||||||||||||||
|
Shares
|
Value
|
to
be Issued
|
Capital
|
Stage
|
||||||||||||||||
|
June
16, 2004, Shares Issued for
|
||||||||||||||||||||
|
Services
|
240,000 | $ | 240 | $ | - | $ | 79,761 | $ | - | |||||||||||
|
Cancellation
of Stock Options for
|
||||||||||||||||||||
|
Non-Performance
|
- | - | - | 487,500 | - | |||||||||||||||
|
Net
Loss
|
- | - | - | - | (2,945,325 | ) | ||||||||||||||
|
Balance
at June 30, 2004
|
8,348,222 | 8,348 | - | 12,138,180 | (12,856,970 | ) | ||||||||||||||
|
July
13, 2004, Shares issued for
|
||||||||||||||||||||
|
Consulting
|
128,333 | 128 | - | 54,805 | - | |||||||||||||||
|
July
22, 2004, Shares issued for
|
||||||||||||||||||||
|
Consulting
|
280,000 | 280 | - | 121,920 | - | |||||||||||||||
|
July
31, 2004, Shares issued for cash
|
100,000 | 100 | - | 24,870 | - | |||||||||||||||
|
August
9, 2004, Shares issued for
|
||||||||||||||||||||
|
Consulting
|
620,000 | 620 | - | 183,380 | - | |||||||||||||||
|
August
26, 2004 Shares issued for cash
|
100,000 | 100 | - | 24,900 | - | |||||||||||||||
|
August
30, 2004 Shares issued for cash
|
200,000 | 200 | - | 49,800 | - | |||||||||||||||
|
August
30, 2004, Shares issued for
|
||||||||||||||||||||
|
Consulting
|
70,000 | 70 | - | 17,430 | - | |||||||||||||||
|
September
17, 2004, Shares issued for
|
||||||||||||||||||||
|
Services
|
136,000 | 136 | - | 82,464 | - | |||||||||||||||
|
December
8, 2004, Shares issued for
|
||||||||||||||||||||
|
Services
|
36,000 | 36 | - | 17,964 | - | |||||||||||||||
F -
14
STEREO VISION ENTERTAINMENT,
INC.
(A Development Stage
Company)
CONSOLIDATED STATEMENT OF
STOCKHOLDERS' EQUITY
(Continued)
|
Deficit
|
||||||||||||||||||||
|
Accumulated
|
||||||||||||||||||||
|
Common
|
Additional
|
During
|
||||||||||||||||||
|
Common
Stock
|
Stock
|
Paid
in
|
Development
|
|||||||||||||||||
|
Shares
|
Value
|
to
be Issued
|
Capital
|
Stage
|
||||||||||||||||
|
December
15, 2004, Shares Issued for
|
||||||||||||||||||||
|
Services
|
45,000 | $ | 45 | $ | - | $ | 19,955 | $ | - | |||||||||||
|
December
15, 2004, Loans Converted
|
||||||||||||||||||||
|
To
Shares
|
103,300 | 103 | - | 38,897 | - | |||||||||||||||
|
December
17, 2004, Shares issued for
|
||||||||||||||||||||
|
Services
|
5,000 | 5 | - | 1,845 | - | |||||||||||||||
|
January
24, 2005, Shares issued for
|
||||||||||||||||||||
|
Services
|
15,000 | 15 | - | 3,735 | - | |||||||||||||||
|
January
24, 2005, Shares issued for
|
||||||||||||||||||||
|
Cash
|
20,000 | 20 | - | 4,980 | - | |||||||||||||||
|
February
1, 2005, Shares issued for
|
||||||||||||||||||||
|
Cash
|
120,000 | 120 | - | 24,880 | - | |||||||||||||||
|
February
22, 2005, Shares issued for
|
||||||||||||||||||||
|
Cash
|
20,000 | 20 | - | 4,980 | - | |||||||||||||||
|
March
30, 2005, Shares issued for
|
||||||||||||||||||||
|
Services
|
355,000 | 355 | - | 163,745 | - | |||||||||||||||
|
March
30, 2005, Shares issued for
|
||||||||||||||||||||
|
Accounts
payable
|
100,000 | 100 | - | 24,900 | - | |||||||||||||||
|
April
4, 2005, Shares issued for
|
||||||||||||||||||||
|
Services
|
20,000 | 20 | - | 6,980 | - | |||||||||||||||
|
Shares
to be issued for payroll
|
- | - | 267 | 266,399 | - | |||||||||||||||
|
Shares
to be issued for Investment
|
||||||||||||||||||||
|
In
JamOakie Productions, Inc.
|
- | - | 20 | 5,980 | - | |||||||||||||||
|
Shares
to be issued for expenses
|
- | - | 100 | 34,900 | - | |||||||||||||||
F -
15
STEREO VISION ENTERTAINMENT,
INC.
(A Development Stage
Company)
CONSOLIDATED STATEMENT OF
STOCKHOLDERS' EQUITY
(Continued)
|
Deficit
|
||||||||||||||||||||
|
Accumulated
|
||||||||||||||||||||
|
Common
|
Additional
|
During
|
||||||||||||||||||
|
Common
Stock
|
Stock
|
Paid
in
|
Development
|
|||||||||||||||||
|
Shares
|
Value
|
to
be Issued
|
Capital
|
Stage
|
||||||||||||||||
|
Shares
to be issued for conversion of
|
||||||||||||||||||||
|
Loans
payable
|
- | $ | - | $ | 153 | $ | 31,847 | $ | - | |||||||||||
|
Net
Loss
|
- | - | - | - | (1,833,011 | ) | ||||||||||||||
|
Balance
at June 30, 2005
|
10,821,855 | 10,821 | 540 | 13,349,736 | (14,689,981 | ) | ||||||||||||||
|
August
24, 2005 - Shares issued for
|
||||||||||||||||||||
|
payroll
- authorized in prior year
|
266,666 | 267 | (267 | ) | - | - | ||||||||||||||
|
August
24, 2005 - Shares issued for
|
||||||||||||||||||||
|
accrued
consulting
|
15,000 | 15 | - | 14,985 | - | |||||||||||||||
|
February
15, 2006 - Shares issued for
|
||||||||||||||||||||
|
investment
in JamOakie Productions,
|
||||||||||||||||||||
|
Inc.
- authorized in prior year
|
20,000 | 20 | (20 | ) | - | - | ||||||||||||||
|
February
15, 2006 - Shares issued for
|
||||||||||||||||||||
|
conversion
of loans payable -
|
||||||||||||||||||||
|
authorized
in prior year
|
137,000 | 137 | (137 | ) | - | - | ||||||||||||||
|
February
15, 2006 - Shares issued for
|
||||||||||||||||||||
|
conversion
of loans payable
|
832,083 | 832 | - | 84,043 | - | |||||||||||||||
|
February
15, 2006 - Shares issued for
|
||||||||||||||||||||
|
expenses
|
277,500 | 278 | - | 23,579 | - | |||||||||||||||
|
March
17, 2006 - Shares returned to
|
||||||||||||||||||||
|
treasury
and cancelled
|
(50,000 | ) | (50 | ) | - | 50 | ||||||||||||||
|
April
18, 2006 - Shares returned to
|
||||||||||||||||||||
|
treasury
and cancelled
|
(100,000 | ) | (100 | ) | - | 100 | - | |||||||||||||
|
April
18, 2006 - Shares issued for
|
||||||||||||||||||||
|
conversion
of loans payable
|
50,000 | 50 | - | 4,950 | - | |||||||||||||||
F -
16
STEREO VISION ENTERTAINMENT,
INC.
(A Development Stage
Company)
CONSOLIDATED STATEMENT OF
STOCKHOLDERS' EQUITY
(Continued)
|
Deficit
|
||||||||||||||||||||
|
Accumulated
|
||||||||||||||||||||
|
Common
|
Additional
|
During
|
||||||||||||||||||
|
Common
Stock
|
Stock
|
Paid
in
|
Development
|
|||||||||||||||||
|
Shares
|
Value
|
to
be Issued
|
Capital
|
Stage
|
||||||||||||||||
|
May
30, 2006 - Shares issued for
|
||||||||||||||||||||
|
conversion
of loans payable
|
2,749,972 | $ | 2,750 | $ | - | $ | 273,047 | $ | - | |||||||||||
|
June
29, 2006 - Shares issued for
|
||||||||||||||||||||
|
consulting
expense
|
200,000 | 200 | - | 19,800 | - | |||||||||||||||
|
June
29, 2006 - Shares issued for
|
||||||||||||||||||||
|
conversion
of loans payable
|
25,000 | 25 | - | 2,475 | - | |||||||||||||||
|
Shares
to be issued for loans payable
|
- | - | 40 | 3,960 | - | |||||||||||||||
|
Net
Loss
|
- | - | - | - | (487,303 | ) | ||||||||||||||
|
Balance
at June 30, 2006
|
15,245,076 | 15,245 | 156 | 13,776,725 | (15,177,284 | ) | ||||||||||||||
|
July
7, 2006 - Shares issued for cash
|
100,000 | 100 | - | 7,900 | - | |||||||||||||||
|
July
24, 2006 - Shares issued for cash
|
16,250 | 16 | - | 1,284 | - | |||||||||||||||
|
July
27, 2006 - Shares issued for cash
|
125,000 | 125 | - | 9,875 | - | |||||||||||||||
|
September
13, 2006 - Shares issued for
|
||||||||||||||||||||
|
cash
|
50,000 | 50 | - | 3,975 | - | |||||||||||||||
|
October
12, 2006 - Shares issued for
|
||||||||||||||||||||
|
accounts
payable and accrued
|
||||||||||||||||||||
|
expenses
|
575,000 | 575 | (100 | ) | 47,025 | - | ||||||||||||||
|
November
1, 2006 - Shares issued for
|
||||||||||||||||||||
|
accrued
expenses
|
70,000 | 70 | - | 6,930 | ||||||||||||||||
|
November
14, 2006 - Shares issued
|
||||||||||||||||||||
|
for
cash
|
28,600 | 29 | - | 1,971 | - | |||||||||||||||
|
December
8, 2006 - Shares issued for
|
||||||||||||||||||||
|
cash
|
41,250 | 41 | - | 2,859 | - | |||||||||||||||
F -
17
STEREO VISION ENTERTAINMENT,
INC.
(A Development Stage
Company)
CONSOLIDATED STATEMENT OF
STOCKHOLDERS' EQUITY
(Continued)
|
Deficit
|
||||||||||||||||||||
|
Accumulated
|
||||||||||||||||||||
|
Common
|
Additional
|
During
|
||||||||||||||||||
|
Common
Stock
|
Stock
|
Paid
in
|
Development
|
|||||||||||||||||
|
Shares
|
Value
|
to
be Issued
|
Capital
|
Stage
|
||||||||||||||||
|
December
11, 2006 - Shares issued for
|
||||||||||||||||||||
|
cash
|
50,000 | $ | 50 | $ | - | $ | 3,450 | $ | - | |||||||||||
|
December
11, 2006 - Shares issued for
|
||||||||||||||||||||
|
legal
expenses
|
50,000 | 50 | - | 4,950 | - | |||||||||||||||
|
January
31, 2007 - Shares issued for
|
||||||||||||||||||||
|
loans
payable
|
20,000 | 20 | - | 1,980 | - | |||||||||||||||
|
February
8, 2007 - Shares issued for
|
||||||||||||||||||||
|
accrued
salary
|
2,000,000 | 2,000 | - | 198,000 | - | |||||||||||||||
|
February
27, 2007 - Shares issued for
|
||||||||||||||||||||
|
loans
payable
|
305,000 | 305 | - | 30,195 | - | |||||||||||||||
|
February
27, 2007 - Shares issued for
|
||||||||||||||||||||
|
cash
|
75,000 | 75 | - | 6,425 | - | |||||||||||||||
|
March
28, 2007-Shares issued for cash
|
500,000 | 500 | - | 24,500 | - | |||||||||||||||
|
March
28, 2007 - Shares issued for
|
||||||||||||||||||||
|
consulting
services
|
100,000 | 100 | - | 9,900 | - | |||||||||||||||
|
April
2, 2007 - Shares issued for cash
|
625,000 | 625 | - | 108,565 | - | |||||||||||||||
|
April
5, 2007 - Shares issued for
|
||||||||||||||||||||
|
consulting
services
|
206,000 | 206 | - | 20,394 | - | |||||||||||||||
|
April
23, 2007 - Shares issued for cash
|
123,333 | 124 | - | 39,875 | - | |||||||||||||||
|
Accrued
expenses converted to
|
||||||||||||||||||||
|
contributed
capital
|
- | - | - | 412,541 | - | |||||||||||||||
|
Net
loss
|
- | - | - | - | (44,254 | ) | ||||||||||||||
|
Balance
at June 30, 2007
|
20,305,509 | 20,306 | 56 | 14,719,319 | (15,221,538 | ) | ||||||||||||||
F -
18
STEREO VISION ENTERTAINMENT,
INC.
(A Development Stage
Company)
CONSOLIDATED STATEMENT OF
STOCKHOLDERS' EQUITY
(Continued)
|
Deficit
|
||||||||||||||||||||
|
Accumulated
|
||||||||||||||||||||
|
Common
|
Additional
|
During
|
||||||||||||||||||
|
Common
Stock
|
Stock
|
Paid
in
|
Development
|
|||||||||||||||||
|
Shares
|
Value
|
to
be Issued
|
Capital
|
Stage
|
||||||||||||||||
|
July
12, 2007 - Shares issued for
|
||||||||||||||||||||
|
consulting
expense
|
200,000 | $ | 200 | $ | - | $ | 64,800 | $ | - | |||||||||||
|
September
11, 2007 - Shares issued for
|
||||||||||||||||||||
|
investor
relations expense
|
220,000 | 220 | - | 76,780 | - | |||||||||||||||
|
September
19, 2007 - Shares issued for
|
||||||||||||||||||||
|
loan
fees
|
100,000 | 100 | - | 34,900 | - | |||||||||||||||
|
September
19, 2007 - Shares issued for
|
||||||||||||||||||||
|
accrued
rent
|
37,879 | 37 | - | 12,463 | - | |||||||||||||||
|
September
19, 2007-Additional shares
|
||||||||||||||||||||
|
related
to prior issuance
|
6,750 | 7 | - | (7 | ) | - | ||||||||||||||
|
October
15, 2007 - Shares issued for
|
||||||||||||||||||||
|
board
of directors fees
|
500,000 | 500 | - | 109,500 | - | |||||||||||||||
|
February
12, 2008 - Shares issued for
|
||||||||||||||||||||
|
consulting
expense
|
100,000 | 100 | - | 19,900 | - | |||||||||||||||
|
February
12, 2008 - Shares issued for
|
||||||||||||||||||||
|
investment
in Booty 3D
|
200,000 | 200 | - | 31,800 | - | |||||||||||||||
|
February
12, 2008 - Shares issued for
|
||||||||||||||||||||
|
loan
fees
|
100,000 | 100 | - | 17,900 | - | |||||||||||||||
|
February
12, 2008 - Shares issued for
|
||||||||||||||||||||
|
investor
relations fees
|
250,000 | 250 | - | 44,750 | - | |||||||||||||||
|
February
28, 2008 - Shares issued for
|
||||||||||||||||||||
|
investment
in Booty 3D
|
100,000 | 100 | - | 26,900 | - | |||||||||||||||
|
March
6, 2008 - Shares issued for
|
||||||||||||||||||||
|
investment
in Kung Fu U 3D
|
100,000 | 100 | - | 17,900 | - | |||||||||||||||
|
April
22, 2008 - Shares issued for
|
||||||||||||||||||||
|
interest
expense
|
100,000 | 100 | - | 27,900 | - | |||||||||||||||
F -
19
STEREO VISION ENTERTAINMENT,
INC.
(A Development Stage
Company)
CONSOLIDATED STATEMENT OF
STOCKHOLDERS' EQUITY
(Continued)
|
Deficit
|
||||||||||||||||||||
|
Accumulated
|
||||||||||||||||||||
|
Common
|
Additional
|
During
|
||||||||||||||||||
|
Common
Stock
|
Stock
|
Paid
in
|
Development
|
|||||||||||||||||
|
Shares
|
Value
|
to
be Issued
|
Capital
|
Stage
|
||||||||||||||||
|
May
8, 2008 - Shares issued for
|
||||||||||||||||||||
|
consulting
expense
|
100,000 | $ | 100 | $ | - | $ | 34,900 | $ | - | |||||||||||
|
May
8, 2008 - Shares issued for
|
||||||||||||||||||||
|
board
of directors fees
|
100,000 | 100 | - | 34,900 | - | |||||||||||||||
|
June
20, 2008 - Shares issued for
|
||||||||||||||||||||
|
cash
|
200,000 | 200 | - | 49,800 | - | |||||||||||||||
|
Shares
recorded but not yet issued for
|
||||||||||||||||||||
|
investor
relation fees
|
- | - | 40 | 10,060 | - | |||||||||||||||
|
Net
loss
|
- | - | - | - | (1,333,429 | ) | ||||||||||||||
|
Balance
at June 30, 2008
|
22,720,138 | 22,720 | 96 | 15,334,465 | (16,554,967 | ) | ||||||||||||||
|
July
14, 2008 – Shares issued
|
||||||||||||||||||||
|
for
cash
|
500,000 | 500 | - | 99,500 | - | |||||||||||||||
|
July
14, 2008 – Shares issued for services
|
100,000 | 100 | - | 19,900 | - | |||||||||||||||
|
July
28, 2008 – Shares issued for services
|
40,000 | 40 | - | 7,960 | - | |||||||||||||||
|
August
6, 2008 – Shares issued for accrued
|
||||||||||||||||||||
|
salary
|
1,000,000 | 1,000 | - | 249,000 | - | |||||||||||||||
|
September
12, 2008 – Shares issued for cash
|
100,000 | 100 | - | 10,400 | - | |||||||||||||||
|
January
26, 2009 – Shares issued for cash
|
50,000 | 50 | - | 4,950 | - | |||||||||||||||
|
January
26, 2009 – Shares issued for
|
||||||||||||||||||||
|
consulting
and professional fees
|
115,000 | 115 | - | 12,535 | - | |||||||||||||||
|
March
17, 2009 – Shares issued for cash
|
50,000 | 50 | - | 4,950 | - | |||||||||||||||
|
March
17, 2009 – Shares issued for interest
|
||||||||||||||||||||
|
expense
|
100,000 | 100 | - | 9,900 | - | |||||||||||||||
|
March
17, 2009 – Shares issued for
|
||||||||||||||||||||
|
accrued
rent
|
200,000 | 200 | - | 19,800 | - | |||||||||||||||
|
March
17, 2009 – Shares issued for
|
||||||||||||||||||||
|
services
|
100,000 | 100 | - | 9,900 | - | |||||||||||||||
|
April
6, 2009 – Shares issued for cash
|
100,000 | 100 | - | 9,900 | - | |||||||||||||||
F -
20
STEREO VISION ENTERTAINMENT,
INC.
(A Development Stage
Company)
CONSOLIDATED STATEMENT OF
STOCKHOLDERS' EQUITY
(Continued)
|
Deficit
|
||||||||||||||||||||
|
Accumulated
|
||||||||||||||||||||
|
Common
|
Additional
|
During
|
||||||||||||||||||
|
Common
Stock
|
Stock
|
Paid
in
|
Development
|
|||||||||||||||||
|
Shares
|
Value
|
to
be Issued
|
Capital
|
Stage
|
||||||||||||||||
|
April
27, 2009 – Shares issued for cash
|
100,000 | $ | 100 | $ | - | $ | 9,900 | $ | - | |||||||||||
|
April
27, 2009 – Shares issued for
|
||||||||||||||||||||
|
notes
payable
|
70,000 | 70 | - | 6,930 | - | |||||||||||||||
|
April
27, 2009 – Shares issued for
|
||||||||||||||||||||
|
consulting
services
|
50,000 | 50 | - | 6,950 | - | |||||||||||||||
|
May
5, 2009 – Shares issued for
|
||||||||||||||||||||
|
notes
payable
|
200,000 | 200 | - | 19,800 | - | |||||||||||||||
|
May
19, 2009 – Shares issued for
|
||||||||||||||||||||
|
notes
payable
|
20,000 | 20 | - | 1,980 | - | |||||||||||||||
|
June
15, 2009 – Shares issued for
|
||||||||||||||||||||
|
rent
expense
|
36,000 | 36 | - | 3,924 | - | |||||||||||||||
|
Shares
returned to treasury and cancelled
|
(1,865,000 | ) | (1,865 | ) | - | 1,865 | - | |||||||||||||
|
Interest
expense recorded to paid-in capital
|
||||||||||||||||||||
|
due
to beneficial conversion features
|
||||||||||||||||||||
|
from
notes payable
|
- | - | - | 13,640 | - | |||||||||||||||
|
Net
loss
|
- | - | - | - | (465,097 | ) | ||||||||||||||
|
Balance
at June 30, 2009
|
23,786,138 | $ | 23,786 | $ | 96 | $ | 15,858,149 | $ | (17,020,064 | ) | ||||||||||
The
accompanying notes are an integral part of these financial
statements.
F -
21
STEREO VISION ENTERTAINMENT,
INC.
(A Development Stage
Company)
CONSOLIDATED STATEMENTS OF
CASH FLOWS
|
Cumulative
|
||||||||||||
|
Since
May 5,
|
||||||||||||
|
1999
|
||||||||||||
|
For
the Years Ended
|
Inception
of
|
|||||||||||
|
June
30,
|
Development
|
|||||||||||
|
2009
|
2008
|
Stage
|
||||||||||
|
CASH FLOWS FROM OPERATING
ACTIVITIES:
|
||||||||||||
|
Net
Loss
|
$ | (465,097 | ) | $ | (1,333,429 | ) | $ | (17,020,064 | ) | |||
|
Adjustments
to reconcile net loss to net
|
||||||||||||
|
cash
used in operating activities:
|
||||||||||||
|
Depreciation
and Amortization
|
960 | 630 | 3,538,018 | |||||||||
|
Interest
expense from beneficial conversion features
|
13,640 | - | 13,640 | |||||||||
|
Issuance
of Common Stock for Expenses
|
71,610 | 478,100 | 6,908,295 | |||||||||
|
Stock
Issued for Payment of Accounts Payable
|
20,000 | - | 70,500 | |||||||||
|
Stock
Issued for accrued expenses
|
- | 12,500 | 494,166 | |||||||||
|
Compensation
Expense from Stock Options
|
- | - | 487,500 | |||||||||
|
Realized
gain on trading investments
|
- | - | (412,773 | ) | ||||||||
|
Loss
on sale of assets
|
- | - | 15,883 | |||||||||
|
Loss
on Investment Written Off
|
- | - | 557,008 | |||||||||
|
Gain
on Forgiveness of Debt
|
(137,500 | ) | - | (600,138 | ) | |||||||
|
Cash
acquired in merger
|
- | - | 332 | |||||||||
|
Change
in operating assets and liabilities:
|
||||||||||||
|
Prepaid
Expense
|
(32,200 | ) | (6,750 | ) | (38,950 | ) | ||||||
|
Investment
in films, manuscripts, recordings
|
||||||||||||
|
and
similar property
|
(23,328 | ) | (305,750 | ) | (625,086 | ) | ||||||
|
Accounts
Payable
|
10,334 | 55,590 | 353,080 | |||||||||
|
Accrued
Expenses
|
265,534 | 328,718 | 1,428,723 | |||||||||
|
Lawsuit
Payable
|
- | - | 32,411 | |||||||||
|
Payable
to SAG for Route 66
|
- | - | 71,493 | |||||||||
|
Net
Cash Used in operating activities
|
(276,047 | ) | (770,391 | ) | (4,725,962 | ) | ||||||
|
CASH FLOWS FROM INVESTING
ACTIVITIES:
|
||||||||||||
|
Purchase
of investment
|
- | - | (5,892 | ) | ||||||||
|
Purchase
of equipment
|
- | (3,000 | ) | (16,745 | ) | |||||||
|
Proceeds
from sale of assets
|
- | - | 51,117 | |||||||||
|
Proceeds
from sale of investments
|
- | - | 565,773 | |||||||||
|
Net
cash provided (used) in investing activities
|
- | (3,000 | ) | 594,253 | ||||||||
F -
22
STEREO VISION ENTERTAINMENT,
INC.
(A Development Stage
Company)
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Continued)
|
Cumulative
|
||||||||||||
|
Since
May 5,
|
||||||||||||
|
1999
|
||||||||||||
|
For
the Years Ended
|
Inception
of
|
|||||||||||
|
June
30,
|
Development
|
|||||||||||
|
2009
|
2008
|
Stage
|
||||||||||
|
CASH FLOWS FROM FINANCING
ACTIVITIES:
|
||||||||||||
|
Net
proceeds from loans from shareholders
|
$ | 126,497 | $ | 588,530 | $ | 2,786,289 | ||||||
|
Proceeds
from issuance of common stock
|
140,500 | 50,000 | 1,276,711 | |||||||||
|
Proceeds
from issuance of short-term notes
|
- | - | 64,000 | |||||||||
|
Bank
Overdraft
|
4,709 | - | 4,709 | |||||||||
|
Net
Cash Provided by Financing Activities
|
271,706 | 638,530 | 4,131,709 | |||||||||
|
Net
(Decrease) Increase in Cash
|
(4,341 | ) | (134,861 | ) | - | |||||||
|
Cash
at Beginning of Period
|
4,341 | 139,202 | - | |||||||||
|
Cash
at End of Period
|
$ | - | $ | 4,341 | $ | - | ||||||
|
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION:
|
||||||||||||
|
Cash
paid during the year for:
|
||||||||||||
|
Interest
|
$ | - | $ | 24,877 | $ | 68,676 | ||||||
|
Income
taxes
|
$ | - | $ | 7,670 | $ | 7,670 | ||||||
|
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND
FINANCING ACTIVITIES:
|
||||||||||||
|
Common
Stock Issued for Investment in
|
||||||||||||
|
Wilfield
Entertainment
|
$ | - | $ | - | $ | 220,000 | ||||||
|
Common
Stock Issued for Investment in
|
||||||||||||
|
Mad
Dogs & Oakies Project
|
$ | - | $ | - | $ | 3,000 | ||||||
|
Common
Stock Issued for Investment in
|
||||||||||||
|
In
the Garden of Evil Project
|
$ | - | $ | - | $ | 12,000 | ||||||
|
Common
Stock Issued for Investment in
|
||||||||||||
|
Booty
3D
|
$ | - | $ | 59,000 | $ | 59,000 | ||||||
|
Common
Stock Issued for Investment in
|
||||||||||||
|
Kung
Fu U 3D
|
$ | 18,000 | $ | 18,000 | ||||||||
|
Notes
Payable Converted to Stock
|
$ | 29,000 | $ | 81,500 | $ | 1,739,608 | ||||||
The accompanying notes are an integral
part of these financial statements.
F -
23
STEREO VISION ENTERTAINMENT,
INC.
(A Development Stage
Company)
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This
summary of accounting policies for Stereo Vision Entertainment, Inc. is
presented to assist in understanding the Company's financial
statements. The accounting policies conform to generally accepted
accounting principles and have been consistently applied in the preparation of
the financial statements.
Nature of Operations and
Going Concern
The
accompanying financial statements have been prepared on the basis of accounting
principles applicable to a “going concern”, which assumes that the Company will
continue in operation for at least one year and will be able to realize its
assets and discharge its liabilities in the normal course of
operations.
Several
conditions and events cast doubt about the Company’s ability to continue as a
“going concern”. The Company has incurred net losses of approximately
$17,020,065 for the period from May 5, 1999 (inception) to June 30, 2009, has a
liquidity problem, and requires additional financing in order to finance its
business activities on an ongoing basis. The Company is actively
pursuing alternative financing and has had discussions with various third
parties, although no firm commitments have been obtained. In the
interim, shareholders of the Company have continued to meeting its minimal
operating expenses as they have done in the past.
The
Company’s future capital requirements will depend on numerous factors including,
but not limited to, continued progress developing its products and market
penetration and profitable operations.
These
financial statements do not reflect adjustments that would be necessary if the
Company were unable to continue as a “going concern”. While
management believes that the actions already taken or planned, will mitigate the
adverse conditions and events which raise doubt about the validity of the “going
concern” assumption used in preparing these financial statements, there can be
no assurance that these actions will be successful.
If the
Company were unable to continue as a “going concern”, then substantial
adjustments would be necessary to the carrying values of assets, the reported
amounts of its liabilities, the reported expenses, and the balance sheet
classifications used.
Principles of
Consolidation
The
consolidated financial statements for the year ended June 30, 2009 include the
accounts of the parent entity and its wholly-owned subsidiary TDOJ
LLC. TDOJ LLC was formed on March 17, 2009 and has no operations as
of June 30, 2009.
All
significant intercompany balances and transactions have been
eliminated.
F -
24
STEREO VISION ENTERTAINMENT,
INC.
(A Development Stage
Company)
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
NOTE 1 - ORGANIZATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Organization and Basis of
Presentation
The
Company was incorporated under the laws of the State of Nevada on May 5,
1999. As of June 30, 2009, the Company is in the development stage,
and has not commenced planned principal operations.
Nature of
Business
The
Company intends to position itself to evolve into a vertically integrated,
diversified media entertainment company. The Company anticipates
generating revenues from several sources, including production of new feature
films in both 3-D and 2-D format for theatrical and direct to DVD release, as
well as expanding into other areas of the entertainment industry including the
licensing of its film rights to the video gaming industry.
Cash and Cash
Equivalents
For
purposes of the statement of cash flows, the Company considers all highly liquid
debt instruments purchased with a maturity of three months or less to be cash
equivalents to the extent the funds are not being held for investment
purposes.
Pervasiveness of
Estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles required 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.
Fair Value of Financial
Instruments
The
carrying value of the Company's financial instruments, including accounts
payable and accrued liabilities at June 30, 2009 and 2008 approximates their
fair values due to the short-term nature of these financial
instruments.
F -
25
STEREO VISION ENTERTAINMENT,
INC.
(A Development Stage
Company)
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
NOTE 1 - ORGANIZATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Property and
Equipment
Property
and equipment are stated at cost. Depreciation is provided for in
amounts sufficient to relate the cost of depreciable assets to operations over
their estimated service lives, principally on a straight-line basis from 3 to 5
years.
Upon sale
or other disposition of property and equipment, the cost and related accumulated
depreciation or amortization are removed from the accounts and any gain or loss
is included in the determination of income or loss.
Expenditures
for maintenance and repairs are charged to expense as incurred. Major
overhauls and betterments are capitalized and depreciated over their useful
lives.
The
Company identifies and records impairment losses on long-lived assets such as
property and equipment when events and circumstances indicate that such assets
might be impaired. The Company considers factors such as significant
changes in the regulatory or business climate and projected future cash flows
from the respective asset. Impairment losses are measured as the
amount by which the carrying amount of intangible asset exceeds its fair
value.
Advertising
Costs
Advertising
costs are expensed as incurred. For the years ended June 30, 2009 and
2008, advertising expense was $0 and $0, respectively.
Concentration of Credit
Risk
The
Company has no significant off-balance-sheet concentrations of credit risk such
as foreign exchange contracts, options contracts or other foreign hedging
arrangements. The Company maintains the majority of its cash balances
with one financial institution, in the form of demand deposits.
F -
26
STEREO VISION ENTERTAINMENT,
INC.
(A Development Stage
Company)
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
NOTE 1 - ORGANIZATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Loss per
Share
Basic
loss per share has been computed by dividing the loss for the year applicable to
the common stockholders by the weighted average number of common shares
outstanding during the year. The effect of outstanding common stock
equivalents would be anti-dilutive for June 30, 2009 and 2008 and are thus not
considered. At June 30, 2009 and 2008, there were no outstanding common stock
equivalents.
Reclassification
Certain
reclassifications have been made in the 2008 financial statements to conform
with the 2009 presentation.
Intangible
Assets
Intangible assets consist of movie and
music licensing rights and production costs and are valued at cost. As of June
30, 2009 and 2008, the Company had $430,078 and $406,750 in film costs that are
in the development stage or pre-production stage.
The Company identifies and records
impairment losses on intangible assets when events and circumstances indicate
that such assets might be impaired or when the property is not set for
production within three years of acquisition. The Company considers
factors such as significant changes in the regulatory or business climate and
projected future cash flows from the respective asset. Impairment
losses are measured as the amount by which the carrying amount of intangible
asset exceeds its fair value.
NOTE 2 - INCOME
TAXES
As of
June 30, 2009, the Company had a net operating loss carry forward for income tax
reporting purposes of approximately $17,020,000 that may be offset against
future taxable income through 2029. Current tax laws limit the amount
of loss available to be offset against future taxable income when a substantial
change in ownership occurs. Therefore, the amount available to offset
future taxable income may be limited. No tax benefit has been
reported in the financial statements, because the Company believes there is a
50% or greater chance the carry-forwards will expire
unused. Accordingly, the potential tax benefits of the loss
carry-forwards are offset by a valuation allowance of the same
amount.
|
2009
|
2008
|
|||||||
|
Net
Operating Losses
|
$ | 2,553,000 | $ | 2,483,250 | ||||
|
Valuation
Allowance
|
(2,553,000 | ) | (2,483,250 | ) | ||||
| $ | - | $ | - | |||||
The
provision for income taxes differs from the amount computed using the federal US
statutory income tax rate as follows:
|
2009
|
2008
|
|||||||
|
Provision
(Benefit) at US Statutory Rate
|
$ | 69,750 | $ | 200,100 | ||||
|
Increase
(Decrease) in Valuation Allowance
|
(69,750 | ) | (200,100 | ) | ||||
| $ | - | $ | - | |||||
F -
27
STEREO VISION ENTERTAINMENT,
INC.
(A Development Stage
Company)
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
NOTE 2 - INCOME TAXES
(continued)
The
Company evaluates its valuation allowance requirements based on projected future
operations. When circumstances change and causes a change in
management's judgment about the recoverability of deferred tax assets, the
impact of the change on the valuation is reflected in current
income.
NOTE 3 - DEVELOPMENT STAGE
COMPANY/ GOING CONCERN
The
Company has not begun principal operations and as is common with a development
stage company, the Company has had recurring losses during its development
stage. Continuation of the Company as a going concern is dependent
upon obtaining the additional working capital necessary to be successful in its
planned activity. The management of the Company has developed a
strategy, which it believes will accomplish this objective through additional
equity funding and long term financing, which will enable the Company to operate
for the coming year.
NOTE 4 - RENT
EXPENSE
The
Company’s principal executive offices are located at 15452 Cabrito Road, Suite
204, Van Nuys, CA 91406 and consist of approximately 2,500 square feet of
furnished executive suite offices and reception and conference room
arrangements. The lease expired in June 2005. Since the lease expired, the
Company is on a month to month lease. The monthly rent for the
property is $2,500. For the years ended June 30, 2009 and 2008, rent
expense was $30,000 and $30,000, respectively.
In March,
2008, the Board approved a new benefits package for its CEO, Mr. Jack Honour
which includes payment for housing at the rate of $4,500 per month plus
utilities as well as the use of a car. The annual cost of these benefits is
estimated to be $85,000 p.a.
NOTE 5 - LOANS FROM
SHAREHOLDERS AND OTHER RELATED PARTY TRANSACTIONS
As of
June 30, 2009 and 2008, the company owed $981,491 and $795,079 respectively to
various shareholders and officers/directors. The loans are unsecured
with interest at rates of between 4.00% to 12% and have no fixed terms of
repayment. During the year ended June 30, 2009, the
Company received $126,497 in new loans from related parties, which are included
in the total above.
On June
27, July 31 and August 27, 2007, the Company borrowed $125,000, $150,000 and
$225,000 respectively from a shareholder at an interest rate of 12% per
annum. Interest of $5,000 per month was due and payable monthly
beginning in September 2007 and continuing through the payment due date on
February 21, 2009. On February 19, the Company borrowed an additional
$200,000 under the same terms. This loan was collateralized with 1,000,000
shares of Mr. John Honour’s shares. Interest of $7,000 per month is due and
payable monthly. At June 30, 2008 the total amount due on this loan
was $706,667. This amount is included in the total amount of loans
shown above. For the four month period of March-June, 2008, the lender accepted
100,000 shares of restricted stock valued at $.28 per share as payment for the
interest for those four months. At March 31, 2009, the company owed
$769,667 on this loan. The $700,000 note is convertible at the option
of the lender on the due date at a per share price equal to 75% of the closing
price on the day of conversion.
During
the year ended June 30, 2009, the Company borrowed $115,000 from various
shareholders. These loans are convertible to common stock of the
Company at a conversion rate of $.10 per share. The $115,000 in notes
payable are convertible into 1,150,000 restricted common shares. The
notes are convertible immediately and are due on demand. The Company
has recognized $13,640 of interest expense related to the beneficial conversion
feature of the notes payable. As of June 30, 2009, $29,000 of these
notes payable have been converted into 290,000 shares of common
stock.
F -
28
STEREO VISION ENTERTAINMENT,
INC.
(A Development Stage
Company)
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
NOTE 6 - COMMON STOCK
TRANSACTIONS
The
Company was initially authorized to issue 100,000,000 common shares with a par
value of $0.001.
At
inception, the company issued 61,200 (1,530,000 pre-split) shares of common
stock to its officers and directors for services performed and payments made on
the Company's behalf during its formation. This transaction was valued at
approximately $0.003 per share or an aggregate approximate value of $5,000.
These shares were issued under Rule 4(2).
On
December 2, 1999, the Company issued 58,800 (1,470,000 pre split) shares of
common stock in exchange for $350,000 investment in 3-D projects, $255,000
licensing and distribution rights, $3,306,900 3-D film production and exhibition
equipment, and $100,000 patent pending. On September 25, 2001 the
asset acquisition was rescinded and the assets acquired were returned and the
common stock was returned to treasury.
In
addition to the asset acquisition, on December 3, 1999, the company entered into
an acquisition agreement and plan of reverse merger with Kestrel Equity
Corporation whereby the company acquired $332 cash, $153,001 trading
investments, $100,686 reduction in accounts payable, and 4,366,084 in notes
payable in exchange for 48,000 (1,200,000 pre-split) shares of common stock. By
virtue of the merger and the asset acquisition, the Company issued 106,800
(2,670,000 pre-split) shares of common stock of the surviving corporation and
acquired assets valued at $4,013,100 or approximately $1.50 per
share.
On
December 31, 1999, the Company issued 14,000 (350,000 pre-split) shares to
several employees (Rick Ducommun and Rocco Urbisci) and a consultant for project
related services rendered and to be rendered, valued at $2.00 per share. These
shares were issued in reliance upon the Rule 4(2) exemptive provisions, and no
advertising nor solicitation occurred.
On
February 14, 2000, the Company issued 4,000 (100,000 pre-split) shares of common
stock as payment for services rendered by Mr. Herky Williams valued at $1.00 per
share. The services rendered were for the development of the company's music
division. The shares were issued under Rule 4(2) to an officer of the
Company.
On April
17, 2000, the Company issued 4,000 (100,000 pre-split) shares of common stock to
Shauna Gilibarti as payment for marketing related services valued at
$100,000. They were cancelled on May 25, 2001 for failure to
perform.
F -
29
STEREO VISION ENTERTAINMENT,
INC.
(A Development Stage
Company)
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
NOTE 6 - COMMON STOCK
TRANSACTIONS (continued)
On May 4,
2000, the Company issued 2,200 (55,000 pre-split) shares of common stock for
cash of $55,000.
On June
2, 2000, the Company issued 4,000 (100,000 pre-split) shares of common stock to
Profit Earth as payment for market development services valued at $100,000. They
were cancelled for non performance on September 25, 2001.
On June
30, 2000, the Company issued 1,420 (35,500 pre-split) shares of common stock for
cash of $35,500.
On
September 13, 2000, the Company issued 5,000 (125,000 pre-split) shares of
common stock for conversion of notes payable totaling $141,250. The
value of these shares was $1.13 per share, according to the terms of the
original loan agreement.
On
September 27, 2000, the company entered into a contract with Ron Whiten to make
strategic introductions on behalf of the Company to the investment community in
exchange for 4,000 (100,000 pre-split) common shares. On September 29, 2000, the
shares were issued at a value of $95,000, which was the quoted market price on
the date of issue. The contract is for a period of time covering 3 quarterly
financial statements. To the best knowledge and belief of the company, no
services were performed by Mr.Whiten pursuant to this agreement. On May 25,
2001, the 4,000 shares of stock issued to Mr. Whiten were cancelled for
non-performance of services.
On
October 27, 2000, the Company issued 500 (12,500 pre-split) shares of common
stock valued at $1.00 per share to National Financial Group for financial
services previously rendered. These shares were issued under Rule
4(2).
On
November 15, 2000, the Company issued 32,000 (800,000 pre-split) shares of
common stock for conversion of notes payable totaling $407,138. The
value of these shares was $0.51 per share, according to the terms of the
original loan agreement.
On
November 22, 2000, the Company issued 2,000 (50,000 pre-split) shares of common
stock for conversion of notes payable totaling $25,000. The value of
these shares was $0.50 per share according to the terms of the original
agreement.
On
November 22, 2000, the Company issued 4,080 (102,000 pre-split) shares of common
stock to Daniel Symmes as payment for 3-D consulting services valued at
$102,000.
On
December 4, 2000, the Company issued 400 (10,000 pre-split) shares of common
stock as payment for services valued at $10,200.
On
December 14, 2000, the Company issued 4,000 (100,000 pre-split) shares of common
stock to Rod Whiton as payment for advertising services valued at
$106,000. These shares were cancelled for non-performance on May 25,
2001.
F -
30
STEREO VISION ENTERTAINMENT,
INC.
(A Development Stage
Company)
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
NOTE 6 - COMMON STOCK
TRANSACTIONS (continued)
On
January 23, 2001, the Company issued 600 (15,000 pre-split) shares of common
stock for cash $15,000.
On
January 30, 2001, the Company issued 4,724 (118,100 pre-split) shares of common
stock to six individuals as payment for services valued at $64,950. These
services included advising on the film “On Route 66” as well as website
design. On May 25, 2001, 2,000 of these shares were cancelled for
non-performance.
On March
10, 2001, the Company issued 8,000 (200,000 pre-split) shares of common stock to
Herky Williams (100,000) and Jerry Crutchfield (100,000) valued at $154,000 as
payment for services regarding the production of a record album.
On April
9, 2001, the Company issued 3,600 (90,000 pre-split) shares of common stock to
Charles Marshall as payment for advertising expense valued at
$49,500.
Pursuant
to an agreement made with an affiliate company of Mr. Williams (the
Secretary-Treasurer and a Director of the Company) called Wilfield
Entertainment, the Company issued 16,000 (400,000 pre-split) shares of common
stock at a market price of $.55 per share on April 18, 2001 for its
participation in the joint venture. The joint venture with Wilfield is for the
production of thirteen
musical
albums. The company will supply the necessary funding for the production of
these albums and after capital repayment has occurred, the Company will receive
51% of the profits from the projects. The estimated production costs per album
are projected to be $80,000.
On May
25, 2001, 14,000 (350,000 pre split) shares that were issued during the years
ended June 30, 2001 and 2000 to various people for services were
cancelled. These shares were cancelled for non-performance of
services. The expenses related to these shares were recorded when the
shares were issued. The expenses related to the issuance of these
shares were reversed upon the cancellation of the shares.
F -
31
STEREO VISION ENTERTAINMENT,
INC.
(A Development Stage
Company)
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
NOTE 6 - COMMON STOCK
TRANSACTIONS (continued)
On June
1, 2001, the Company issued 840 (21,000 pre-split) shares of common stock for
conversion of notes payable totaling $7,513, according to the terms of the
original agreement.
On June
15, 2001, the Company issued 1,000 (25,000 pre-split) shares of common stock as
payment for services valued at $15,000.
On June
28, 2001, the Company issued 10,000 (250,000 pre-split) shares of common stock
to Vision Publishing (100,000) and Jim and Cynthia Pitochelli (150,000) as
payment for services and advertising expenses valued at $150,000.
On June
29, 2001, the Company issued 34,000 (850,000 pre-split) shares of common stock
for conversion of notes payable totaling $225,000, according to the terms of the
original loan agreement.
On August
29, 2001, the Company issued 13,400 (335,000 pre-split) shares of common stock
for conversion of notes payable totaling $100,500, according to the terms of the
original loan agreement.
During
the quarter ended September 30, 2001, 4,000 (100,000 pre-split) shares were
issued for conversion of notes payable totaling $25,600. The value of these
shares was $0.26 per share, as agreed in the original loan documents. These
shares were issued under Rule 4(2).
On
September 25, 2001, 4,000 (100,000 pre-split) shares that were issued during the
year ended June 30, 2000 for services were cancelled. These shares
were cancelled for non-performance of services. The expenses related
to these shares were recorded when the shares were issued. The
expenses related to the issuance of these shares were reversed upon the
cancellation of the shares. Also on September 25, 2001, the asset
acquisition agreement with 3-D was rescinded and the assets acquired by the
Company were returned to 3-D. The stock issued by the Company in the
acquisition was not returned. There was a net increase in total
stockholders’ equity of $70,532.
During
the quarter ended September 30, 2001, the company issued 112,200 (2,805,000
pre-split) shares to the Company's officers and directors for services rendered
in their various capacities (J. Honour (1,500,000), H. Williams (600,000), J.
Bodziak, R. Urbisci and T. Noonan (100,000 each)) at the market value of the
stock on the date of agreed (not actual) issuance of $0.30 to $0.45 per
share.
During
the quarter ended September 30, 2001, 3,600 (90,000 pre-split) restricted common
shares were issued to individuals for cash at $0.50 per share trading value. All
shares were issued under Rule 4(2).
F -
32
STEREO VISION ENTERTAINMENT,
INC.
(A Development Stage
Company)
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
NOTE 6 - COMMON STOCK
TRANSACTIONS (continued)
During
the quarter ended December 31, 2001, the Company issued 25,912 (647,795
pre-split) shares of stock for conversion of notes payable totaling $135,596,
for accrued interest on the notes payable of $12,275, and for consulting
services of $20,779. The value of the shares was between $0.14 and $0.35 per
share. The share values were always determined based upon the trading price of
the stock on the date of the agreement, not on the date of issuance of the
shares. All shares were issued in reliance on the exemption provided by Rule
4(2).
During
the quarter ended December 31, 2001, the Company issued 94,825 (2,370,631
pre-slit) shares to twelve different individuals for services at the market
value on the date of the agreements, between $0.21 and $0.54 per
share. Such services included financial and market advisory as well
as project advisory.
On
January 15, 2002, 12,000 (300,000 pre-split) shares of common stock were issued
for cash at $0.33 per share.
During
the quarter ended March 30, 2002, 119,185 (2,979,625 pre split) shares were
issued in connection with previous debt cancellation, pursuant to the terms of
the convertible instrument. These shares were issued under Rule 4(2), and the
recipient was an accredited investor.
On April
10, 2002, the Company issued 9,920 (248,000 pre-split) shares of common stock
for conversion of notes payable totaling $32,627 according to the terms of the
original agreement.
On April
29, 2002, 8,000 (200,000 pre-split) common shares were issued for the purchase
of "In the Garden of Eden"
album. The value of the shares was $0.06 on the date of contractual
agreement, and the shares were issued under Rule 4(2), but later rescinded for
failure of the owner to deliver the rights. These shares were
cancelled on June 3, 2003.
On May
30, 2002, 4,000 (100,000 pre-split) common shares were issued to various people
for services, which included writing, arranging, composing and product
placement, all connected with the project "Mad Dogs and Oakies." The
value of the shares was $.03 per share on the date of contract. These shares
were issued to non-affiliates under Rule 4(2).
During
the quarter ended June 30, 2002, the Company issued 12,000 (300,000 pre-split)
shares of common stock for cash. Shares were issued for $.025 to $.075 per
share.
During
the quarter ended June 30, 2002, 10,000 (250,000 pre-split) shares were issued
for consulting and rent expense. The value of the shares was between $.03 (April
15) and $.08 (May 24) per share.
F -
33
STEREO VISION ENTERTAINMENT,
INC.
(A Development Stage
Company)
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
NOTE 6 - COMMON STOCK
TRANSACTIONS (continued)
On July
1, 2002, 34,000 (850,000 pre-split) common shares were issued for cash of
$9,500, based upon a conversion contract entered into earlier.
On July
8, 2002, 85,334 (2,133,334 pre-split) shares were issued in connection with a
previous debt cancellation, based upon the terms of the note and conversion
price therein committed. These shares were issued to an accredited investor
under Rule 506 of Regulation D.
On
December 20, 2002, 20,000 (500,000 pre-split) shares were returned to the
treasury and cancelled.
On
December 23, 2002, 104,000 (2,600,000 pre split) common shares were cancelled
from various shareholders for non-performance of services. 750,000
shares were initially issued December 20, 2001, 1,500,000 shares were initially
issued September 27, 2001, and 450,000 shares were initially issued October 2,
2001. The shares were recorded as a prepaid asset at the time of
issuance. The entry recording the issuance of the shares was reversed
upon cancellation.
During
the quarter ended March 31, 2003, a total of 559,800 (13,995,000 pre-split)
common shares were issued to individuals for services. This total included
issuances to officers and directors, at $0.029 per share (restricted) of
13,450,000 shares (J. Honour (10,000,000), H. Williams (1,500,000), T. Noonan
(500,000), J. Bodziak (250,000) and R. Urbisci (100,000)) and outside
consultants providing media solicitation services (Ron Kelley, 1,100,000
shares).
On March
26, 2003, 160,000 (4,000,000 pre-split) common shares were issued for conversion
of notes payable of $274,932. These shares were issued to an accredited
investor, in conversion of pre-existing rights, under Rule 506.
On May 9,
2003, 101,600 (2,540,000 pre-split) shares were issued to 7 individuals
providing various consulting services, all as described in the Form S8
registration statement, filed April 29, 2003. The value of the registered shares
was effectively $0.01 per share. The private placement shares were issued under
the exemption available through Rule 4(2).
On June
2, 2003, 88,000 common shares were issued for conversion of debt totaling
$20,000 according to the terms of the original agreement.
On June
3, 2003, 12,000 shares were cancelled for non-performance of
services. These shares were originally issued during the year ended
June 30, 2002. 8,000 shares were initially issued April 29, 2002 and
recorded as other assets. 4,000 shares were initially issued
September 27, 2001 and recorded as a prepaid asset. The journal
entries recording the issuance of these shares was reversed upon
cancellation.
F -
34
STEREO VISION ENTERTAINMENT,
INC.
(A Development Stage
Company)
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
NOTE 6 - COMMON STOCK
TRANSACTIONS (continued)
On June
25, 2003, 40,000 shares were issued for conversion of debt totaling $15,491,
issued to Freddi Sidi, an accredited investor, under Rule 506.
During
the quarter ended June 30, 2003, 2,156,000 shares were issued to various people
for services which included 2,000,000 shares issued to Jack Honour, the Company
President, in exchange for $600,000 of past and current services ($.30 per share
or a 50% discount to market), and 156,000 shares issued to nine additional
issuees for services whose shares were valued from $.60 per share to $1.13 per
share (market value on the date of issuance) as their contract dates differed
from Honour’s. These shares were issued under Rule 4(2).
On July
8, 2003, 30,000 shares of common stock were issued for conversion of debt
totaling $8,905, according to the terms of the original agreement.
During
the quarter ended September 30, 2003, 1,198,000 shares were issued to various
people for services. A registration statement on Form S8 was filed covering
710,000 of these shares to the 5 individuals listed therein, at 100% of market
on the date of issuance and registration ($0.57). The value of the unregistered
shares, when originally issued, was between $0.47 and $0.52 per share on the
various agreement dates. These recipients (Buss, McLane,Tribe, Duke Films, Doug
Schwartz, Lawrence Kallet, Edby and Eric Honour) provided consulting services in
locating and securing new media projects. These shares were issued under Rule
4(2).
On
November 17, 2003, 100,000 shares were cancelled for non-performance of
services. These shares were originally issued in July 2003 to Rod
McLane and the expense associated with these shares was recorded when
the shares were issued. The expense related to the issuance of these
shares was reversed upon the cancellation of the shares.
During
the quarter ended December 31, 2003, 523,072 shares were issued for $68,000 in
services at approximately $0.13 per share (50% discount to market on October 1,
2003). During the quarter, 20,000 shares were issued to Chicago Investment Group
and Greg Myers for financial consulting services at $0.26 per share, the market
value on the date of issuance (October 1, 2003). In addition,
700,000 shares total were issued to Herky Williams (500,000), John Bodziak
(100,000) and Tom Noonan (100,000) for employment and consulting services as
officers and directors of the company, at approximately $0.20 per share (50%
discount to market on November 23, 2003). Also, the Company issued 200,000
shares to pay an accounts payable of $55,500 due to Adams Technical Solutions at
a price of approximately $0.26 per share, (market value on date of issuance on
October 1, 2003). All shares were issued under the Rule 4 (2)
exemption.
On
January 12, 2004, 90,000 shares were issued to Focus Partners West, for
financial services valued at $54,000.
F -
35
STEREO VISION ENTERTAINMENT,
INC.
(A Development Stage
Company)
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
NOTE 6 - COMMON STOCK
TRANSACTIONS (continued)
On
January 20, 2004, the Company converted debt of $35,046 to 200,000 shares of
common stock, pursuant to terms of pre-existing contracts.
On
February 9, 2004, 20,000 shares were cancelled for non-performance of
services. These shares were originally issued to Chicago investment
Group and Greg Myers in October 2003, and the expense associated with these
shares was recorded when the shares were issued. The expense related
to the issuance of these shares was reversed upon the cancellation of the
shares.
On March
9, 2004, 156,000 shares were cancelled for non-performance of
services. These shares were originally issued to Tribe Communications
for provision of advertising services in September 2003, and the expense
associated with these shares was recorded when the shares were
issued. The expense related to the issuance of these shares was
reversed upon the cancellation of the shares.
On March
9, 2004, 100,000 shares were issued to pay rent valued at $25,000, according to
the terms of a previous agreement.
On March
11, 2004, 345,000 shares were issued to employees and consultants at $2.00,
which was the market price on the date of issuance, and these shares, issued to
7 named individuals, were the subject of a registration statement on Form S8,
filed March 5, 2004.
During
the quarter ended March 31, 2004, the Company issued 400,000 shares for cash
(cancellation of indebtedness of $100,000) at $.25 per share, the price pre-set
in the conversion agreements. The Company also issued 25,000 shares for cash
(cancellation of indebtedness of $12,500) at $.50 per share, the price pre-set
in the conversion agreements.
On April
7, 2004, the Company issued 60,000 shares of common stock to Messrs. Goldman and
Botts, at $2.04 per share (the then market price), for the provision of
financial advisory services.
On April
7, 2004 the Company issued 375,000 shares of common stock for cash of $215,000,
valued at $0.57 per share, in accordance with previously agreed conversion
rights. In addition, approximately $14,200 in loans were converted into 30,000
shares of common stock, at a conversion price of $0.47 per share, the pre-agreed
conversion price. All shares were issued under the exemption provided by Rule
4(2).
On April
14, 2004, the Company issued 100,000 shares of common stock for cash at $0.25
per share, resulting from an option exercise.
On May 6,
2004, the Company issued 10,000 shares of common stock for cash at $0.50 per
share.
F -
36
STEREO VISION ENTERTAINMENT,
INC.
(A Development Stage
Company)
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
NOTE 6 - COMMON STOCK
TRANSACTIONS (continued)
On May
25, 2004, the Company issued 50,000 shares of common stock to Var Growth valued
at $0.81 per share for marketing services.
On June
8, 2004, the Company issued 100,000 shares of common stock for cash at $0.75 per
share, to acquire distribution rights in Baywatch 3 DD, a planned
movie. These shares were issued to an accredited investor under Rule
506.
On June
16, 2004, 240,000 shares were issued to Jack Fennie for an $80,000 debt of the
company which he paid, at $0.33 per share, representing 50% of the market price
on the date of delivery of the executed contract.
During
the quarter ended September 30, 2004, the Company issued 1,234,333 shares of
common stock to nine individuals for services rendered, including financial
advisory, marketing, PR and strategic advice. Consulting expense of
$461,233 was recognized in connection with these issuances. Also
during the quarter 400,000 shares were issued for cash at $0.25 per share equal
to 50% of the bid price.
During
the quarter ended December 31, 2004, the Company issued 189,300 shares of common
stock as follows: 86,000 shares to five individuals for services including
secretarial, marketing and public relations. This included issuance of 56,000
S-8 shares valued at the closing price of the stock on the day prior to issuance
and 30,000 restricted shares valued at fifty per cent of the price of the stock
on the day prior to issuance. Consulting expense of $39,850 was recognized in
connection with these issuances. Also during the quarter, $39,000 in loans was
converted into 103,300 shares of common stock.
During
the quarter ended March 31, 2005, the Company issued 160,000 shares of common
stock for cash of $35,000. These shares were valued at $.25 per
share, which was equal to a discount of 50% of the prevailing market price due
for restricted securities.
During
the quarter ended March 31, 2005, the Company issued 100,000 shares of common
stock for $25,000 of accounts payable. These shares were valued at
$.25 per share, which was equal to a discount of 50% of the prevailing market
price due for restricted securities.
During
the quarter ended March 31, 2005, the Company issued 370,000 shares of common
stock to various people for services valued at $167,850. The shares
were valued at the market price on the date of the signing of the agreements,
which ranged from $.25 to $.70 per share.
During
the quarter ended March 31, 2005, the officers of the Company agreed to convert
accrued payroll of $281,666 for the period from September 1, 2004 to March 31,
2005 to 281,666 shares of common stock, at a price of $1 per share, versus the
then market price of $.40 per share. On August 24, 2005, these shares
were issued.
F -
37
STEREO VISION ENTERTAINMENT,
INC.
(A Development Stage
Company)
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
NOTE 6 - COMMON STOCK
TRANSACTIONS (continued)
On April
4, 2005, the Company issued 20,000 shares of common stock for consulting and
legal services at $.35 per share, the closing price on the day prior to
issuance, resulting in expense of $7,000 being recognized.
During
the quarter ended June 30, 2005, the Company entered into an agreement to issue
20,000 shares of common stock valued at $.30 per share in exchange for a 10%
interest in JamOakie Productions, Inc. On February 15, 2006, these
shares were issued.
During
the quarter ended June 30, 2005, the Company entered into an agreement to
issue 100,000 shares of common stock for payment of $35,000 in
accounts payable. As of June 30, 2006, these shares had not been
issued.
During
the quarter ended June 30, 2005, the Company entered into three separate
agreements to issue a total of 153,000 shares of common stock for conversion of
notes payable of $32,000. As of June 30, 2005, these shares had not
been issued. On February 15, 2006, the Company issued 137,000 of the
above shares. As of June 30, 2006, 16,000 shares had yet to be
issued.
During
the quarter ended December 31, 2005, the Company entered into an agreement to
borrow $10,000 from an individual not associated with the company in exchange
for 40,000 restricted common shares as well as full repayment of the loan in two
equal monthly installments commencing January 20, 2006. These shares were issued
on October 28, 2005.
Also
during the quarter ended December 31, 2005, a shareholder advanced $11,000 to
the company in return for 110,000 restricted common shares, equivalent to the
offer price at the time the advance was made (November 14,
2005). These shares were issued on February 7, 2006.
During
the quarter ended March 31, 2006, the Company issued a total of 1,266,583
restricted common shares to nine individuals and two entities for both expenses
and loans made to the Company during the March 31, 2006 quarter, as well as for
services, loans and a small acquisition made/received in previous
quarters. Of the total shares issued, 500,000 were issued at $.10 per
share for conversion of loans of $50,000 made during the current quarter;
469,083 shares were issued from $.10 to $.15 per share for loans of $62,875
received by the Company in prior periods; 277,500 shares were issued from $.0775
to $.10 per shares to pay fees and expenses valued at $23,356 which were
incurred during the quarter; and 20,000 shares were issued for an acquisition of
10% of Jamoakie Productions agreed in May, 2005.
F -
38
STEREO VISION ENTERTAINMENT,
INC.
(A Development Stage
Company)
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
NOTE 6 - COMMON STOCK
TRANSACTIONS (continued)
During
the quarter ended June 30, 2006, the Company issued a total of 3,024,972
restricted common shares as follows: 2,500,000 shares to one shareholder and
160,000 shares to a second shareholder for conversion of accrued
expenses at $ .10 per share; 79,972 shares for conversion of an outstanding debt
of $7,972, 50,000 shares and 10,000 shares for conversion of a $5,000 and a
$1,000 loan received by the company during the quarter from two individuals,
25,000 shares for a previous loan of $2,000 as well as a new advance of $500
from the same individual, and 200,000 shares to a consultant for IR services to
be provided. During the quarter, a net total of 150,000 shares were returned to
the treasury and cancelled.
During
the quarter ended September 30, 2006, the Company sold 291,583 restricted common
shares to four individuals for a total of $23,325 at a price of $.08 per
share. The Company issued 225,000 of those shares during the
quarter.
During
the quarter ended December 31, 2006 the Company issued 881,100 new unregistered
shares of its common stock as follows: 575,000 shares in payment for $82,500 of
accrued rent for the period February 1, 2004 to October 31, 2006; 119,850 shares
for loans of $ 8,400 to the Company during the quarter at an
average price of $.07 per share; 70,000 shares for accrued expenses
of $7,000 at a price of $.10 per share; 66,250 shares for past loans to the
Company in the amount of $5,300 at a price of $.08 per share; and 50,000 shares
for legal services valued at $5,000 at a price of $.10 per share.
During
the quarter ended March 31, 2007, the Company issued a total of 3,000,000 new
unregistered shares of its common stock as follows: 1,250,000 shares to John
Honour which represented a conversion of $125,000 of his accrued salary at $.10
per share; 750,000 shares to Theodore Botts which represented a conversion of $
75,000 of John Honour’s accrued salary at $.10 per share; 500,000 shares which
represented exercise of options issued during the quarter to purcahse the shares
at $.05 per share; 325,000 shares to three individuals which represented
conversion of $32,500 of John Honour’s loans to the Company at $.10 per share;
100,000 shares to an individual for film consulting services valued at $10,000;
75,000 shares to an individual for conversion of accrued expenses at $.0866 per
share.
During
the quarter ended June 30, 2007, the Company issued 954,333 restricted common
shares as follows: 500,000 shares were issued to an individual for $100,000 in
cash at a price of $.20 per share; 125,000 shares were issued to six individuals
for conversion of loans to the Company of $9,190 made in the previous
quarter at a price of $.07 per share; 123,333 shares were issued to an
individual for $40,000 in cash at a price of $.32 per share; 6,000 shares were
issued for bookkeeping services at $.10 per share; and 200,000 shares were
issued for consulting services at $.10 per share.
During
the quarter ended September 30, 2007, the Company issued 564,629 restricted
common shares as follows: 220,000 shares to The Investor Relations
Group (under the names of two individuals) for commencement of IR/PR work,
valued at $.35 per share for total expenses of $77,000; 200,000 shares to the
Lichtman Group for agency services valued at $.325 per share for expense of
$65,000; 100,000 shares as a loan origination fee valued at $.35 per share for
expense of $35,000; 37,879 shares to cover accrued rent of $12,500 at $.325 per
share; and 6,750 shares to cover a shortfall from a previous
issuance.
During
the quarter ended December 31, 2007, the Company issued a total of 800,000
shares as follows: 100,000 restricted common shares at a per share price of $.22
to each of its five Board members for serving on the Board; 300,000 shares to
replace a lost certificate.
F -
39
STEREO VISION ENTERTAINMENT,
INC.
(A Development Stage
Company)
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
NOTE 6 - COMMON STOCK
TRANSACTIONS (continued)
During
the quarter ended March 31, 2008, the Company issued a total of 850,000 shares
as follows: 400,000 shares at prices ranging between $.16 and $.18 to four
individuals for services in connection with two film projects; 250,000 shares
valued at $.18 per share to an individual for IR services; 100,000 shares at
$.18 per share as a loan origination fee; and 100,000 shares valued at $.20 per
share to an individual who paid a supplier of a service on the Company’s
behalf.
During
the quarter ended June 30, 2008, the Company issued 500,000 restricted
shares as
follows: 200,000 shares to a shareholder for cash at a price of $.25 per share;
100,000 shares to a shareholder at a value of $.28 per share as payment of four
months interest on his $700,000 loan to the Company; 100,000 shares at a value
of $.35 per share to a newly elected Board member; and 100,000 shares at a value
of $.35 per share to the newly appointed President of the Company’s Puerto Rico
subsidiary.
During
the quarter ended September 30, 2008, the Company issued a net
new number of shares totaling 1,740,000 as follows: 500,000 shares
for cash at a price of $.20 per share; 100,000 shares for cash at a price of
$.105 per share; 140,000 shares to two individuals who agreed to participate in
two of the Company’s feature films valued at $.20 per share;1,000,000 shares to
its CEO, Jack Honour as conversion of $250,000 of accrued salary valued at $.25
per share; 500,000 shares to its CFO, Theodore Botts as conversion of $125,000
of accrued salary. This share issuance was subsequently canceled upon the
resignation of Mr. Botts on September 17, 2008 who agreed to waive all of his
accrued salary since becoming CFO on August 1, 2008. Lastly, the Company issued
2,500,000 shares to its newly appointed CEO, Mr. Lawrence Biggs, on August 1,
2008. Mr. Biggs resigned on September 16, 2008 and returned the shares for
cancellation.
During
the quarter ended March 31, 2009, the Company issued a net new number of shares
totaling 615,000 as follows: 100,000 shares for interest expense of $10,000 at a
price of $0.10 per share; 100,000 shares for cash of $10,000; 215,000 shares for
services valued at $22,650; 200,000 shares for accrued rent of $20,000 on the
corporate offices. During the quarter ended March 31, 2009, the
Board of Directors authorized the cancellation of 1,815,000 shares of common
stock. These shares have been returned to the treasury and
cancelled.
During
the quarter ended June 30, 2009, the Company issued a net new number of shares
totaling 576,000 as follows: 200,000 shares for cash of $20,000;
50,000 shares for consulting services of $7,000 at a price of $0.14 per share;
290,000 shares for conversion of notes payable totaling $29,000; 36,000 shares
for rent and interest expense of $3,960 at a price of $0.11 per
share.
During
the year ended June 30, 2009, 50,000 shares of common stock were returned to the
treasury and cancelled.
NOTE 7 - STOCK
SPLIT
On May
30, 2003, the Board of Directors approved a proposal to effectuate a 25 to 1
reverse stock split of the Company’s outstanding common shares with no effect on
the par value or on the number of authorized shares. As a result of
this action, the total number of outstanding shares of common stock is reduced
from 37,903,485 to 1,516,150 shares. All references to common stock in the
financial statements have been changed to reflect the stock split.
NOTE 8 -
COMMITMENTS
On April
25, 2000, the Board of Directors approved a stock option plan whereby 2,675,000
common shares have been set aside for employees and consultants to be
distributed at the discretion of the Board of Directors. The option
shares will be exercisable on a cashless basis at a 15% discount to market
value. No formal plan has been adopted as of the date of this
report.
On August
6, 2008, the Company entered into an employment agreement with John Honour
whereby Mr. Honour will be paid $200,000 per year. This agreement
shall be in effect for a period of three years.
F -
40
STEREO VISION ENTERTAINMENT,
INC.
(A Development Stage
Company)
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
NOTE 9 - STOCK
OPTIONS
Pursuant
to a year 2000 Stock Option and Compensation Plan, grants of shares can be made
to employees, officers, directors, consultants and independent contractors of
non-qualified stock options as well as for the grant of stock options to
employees that qualify as incentive stock options under Section 422 of the
Internal Revenue Code of 1986 or as non-qualified stock options. The
Plan is administered by the Board of Directors (“Board”), which has, subject to
specified limitations, the full authority to grant options and establish the
terms and conditions for vesting and exercise thereof.
In order
to exercise an option granted under the Plan, the optionee must pay the full
exercise price of the shares being purchased. Payment may be made either: (i) in
cash; or (ii) at the discretion of the Board, by delivering shares of common
stock already owned by the optionee that have a fair market value equal to the
applicable exercise price; or (iii) with the approval of the Board, with monies
borrowed from the Company.
Subject
to the foregoing, the Board has broad discretion to decide the terms and
conditions applicable to options granted under the Plan. The Board may at any
time discontinue granting options under the Plan or otherwise suspend, amend or
terminate the Plan and may, with the consent of an optionee, make such
modification of the terms and conditions of such optionee's option as the Board
shall deem advisable.
On March
11, 2004, the Company granted its attorney an option to purchase 20,000 shares
of its common stock at an exercise price of $1.00 for an exercise period of two
years. As a result of the grant, $20,000 was recorded as compensation
expense. The options expired unexercised.
At June
30, 2009 and 2008, there were no stock options outstanding.
NOTE 10 - LEGAL
PROCEEDINGS
In
September of 2001 the company entered into a promissory note with Duncan
MacPhearson to be payable within the year. A dispute arose and the note was not
timely paid, which led to a court action styled R. Duncan MacPhearson vs. Stereo
Vision Entertainment, et. al., Case No. LC 0611749, in Los Angeles,
California. Subsequently, the parties, on January 26, 2004, entered into a
Settlement Agreement, including default provisions if scheduled payments did not
occur as agreed. 25,000 shares of restricted stock, valued at $25,000, were
delivered and $42,500 of payments was made, but the final $10,000 was not paid.
According to the stipulated judgment agreement, this resulted in the plaintiff's
entry of a judgment, according to notice received by the company, of $37,411,
which was then appealed by the Company as incorrect. The appellate court
disagreed and allowed the entry of judgment as filed, stating that the 25,000
shares had "no value" and allowing $37,411 to be imposed against the Company.
Therefore, the company has paid $42,500 in cash, $25,000 in restricted stock,
and owed $37,411, which had been accrued as a liability in the financial
statements, for a total lawsuit resolution of $104,911. At June 30,
2009 and 2008, the total amount due was $32,411.
The
Company has been served with a judgment in the amount of $6,600 by an individual
in Pennsylvania. As of June 30, 2009 and 2008, this amount has been
recorded as a liability in the accompanying financial statements.
The
Company has received notice that it is in breach of its former contract with the
Investor Relations Group which claims it is owed $17,676.25 as well as 40,000
shares of restricted stock. As of June 30, 2009 and 2008, this amount
has been recorded as a liability in the accompanying financial statements. The
issuance of the common stock has also been recorded and valued at
$10,100. As of June 30, 2009, the stock has not been
issued.
F -
41
STEREO VISION ENTERTAINMENT,
INC.
(A Development Stage
Company)
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
NOTE 10 - LEGAL PROCEEDINGS
(continued)
The
Company has brought a defamation action against Ed Meyer and Adirondack
Pictures. A cross complaint has been filed by Adirondack against the Company
alleging claims for breach of contract, intentional misrepresentation and
declaratory relief. The Company has answered the cross-complaint, denying all of
the material allegations and intends to vigorously defend the claims
made. During the quarter ended March 31, 2009, the Company reached an
agreement with Mr. Meyer and Adirondack Pictures whereby upon execution of the
agreement by all parties, the plaintiffs and defendants fully and mutually
release and forever discharge each other from any and all claims.
NOTE 11 - INVESTMENT IN
JAMOAKIE PRODUCTIONS
On May 2,
2005, the Company signed an agreement with Mr. Jamie Oldaker to acquire a 10%
interest in JamOakie Productions which entitles the company to 10% of the
profits from the album, “Mad Dogs and Oakies” which has subsequently been
released. The Company has the right but not the obligation to finance future
JamOakie projects. The price paid was 20,000 unregistered common shares of the
Company which were worth $6,000 at the time, and $5,893 in cash.
NOTE 12 - FILM AND MUSIC
COSTS
The
Company has intangible assets which consist of movie licensing rights and
development costs which are valued at cost. As of June 30, 2009 and 2008, the
Company had $430,078 and $406,750 invested in film projects that are in the
development or pre-production stage.
F -
42