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EX-32.1 - CERTIFICATION - Writ Media Group, Inc.writ_ex321.htm
EX-31.2 - CERTIFICATION - Writ Media Group, Inc.writ_ex312.htm
EX-31.1 - CERTIFICATION - Writ Media Group, Inc.writ_ex311.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2013

 
WRITERS’ GROUP FILM CORP.
 
a Delaware corporation

8200 Wilshire Boulevard,
Suite 200
Beverly Hills, CA  90211
310.461.3737
 
Commission file number: 333-156832
 
I.R.S. Employer I.D. #: 56-2646829

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days  x Yes  o No
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o    No  o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
 
Large accelerated filer
o
Accelerated filer
o
Non-accelerated filer
o
Smaller reporting company
x
(Do not check if a smaller reporting company)
     
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  o Yes   x No
 
The number of shares outstanding of our Common Stock is 4,691,853,212 as of November 19, 2013
 
The number of shares outstanding of our Series A Preferred Stock is 10,000 as of November 19, 2013.
 


 
 

 
 
FINANCIAL INFORMATION
 
ITEM 1.   FINANCIAL STATEMENTS
 
Writers' Group Film Corp.
 Consolidated Balance Sheets
 (unaudited)
 
   
September 30,
   
March 31,
 
   
2013
   
2013
 
Assets
           
Current Assets
           
Cash and cash equivalents
  $ 3,560     $ 1,143  
Accounts receivables, net
    200       200  
Prepaid expense and other assets
    3,750       1,710  
Deferred financing costs
    8,500       3,500  
Total current assets
    16,010       6,553  
                 
Long Term Assets
               
Software
    19,640       -  
                 
Intangibles
               
Customer Relationships
    134,503       -  
Goodwill
    265,497       -  
      400,000       -  
                 
Total Assets
  $ 435,650     $ 6,553  
                 
Liabilities and Shareholders' Deficit
               
Current Liabilities
               
Accounts payable
  $ 61,376     $ 31,520  
Accrued liability
    74,912       39,433  
Convertible debts, net of unamortized discount of $4,741 and $0, respectively
    21,591       20,727  
Convertible debts - related party, net of unamortized discount of $0 and $0, repsectively
    1,550       1,550  
Notes payable, net of unamortized discount of $0 and $7,362, respectively
    67,500       101,700  
Due to related parties - short term
    3,682       2,572  
Derivative liabilities
    -       23,550  
Total current liabilities
    230,611       221,052  
Total Liabilities
    230,611       221,052  
                 
Shareholders' Equity (Deficit)
               
Preferred Stock:
               
Series A convertible preferred stock, $.00001 par, 130,000,000 shares authorized, 10,000 shares issued and outstanding
    -       -  
Series B convertible preferred stock, $.00001 par, 70,000,000 shares authorized, 0 and 10,000 shares issued and outstanding, respectively
    -       -  
Series C convertible preferred stock, $.00001 par, 20,000,000 shares authorized, none issued and outstanding
    -       -  
Common stock, $0.00001 par, 20,000,000,000 shares authorized, 4,239,148,212 and 1,573,982,182 shares issued and outstanding, respectively
    42,393       15,741  
Additional paid in capital
    (303,063 )     394,021  
Retained Earning (Deficit)
    465,709       (624,261 )
Total shareholders' equity (Deficit)
    205,039       (214,499 )
Total Liabilities and Shareholders' Equity (Deficit)
  $ 435,650     $ 6,553  
 
The accompanying notes are an integral part of these unaudited consolidated financial statements.
 
 
2

 
 
Writers' Group Film Corp.
Consolidated Statement of Operations
 (unaudited)
 
   
For The Three Months Ended September 30,
   
For The Six Months Ended September 30,
 
   
2013
   
2012
   
2013
   
2012
 
Revenues
                       
Related party
    -       6,110       -       6,110  
Total revenue
    -       6,110       -       6,110  
Operating Costs and Expenses
                               
Wages and benefits
    4,000       188,041       49,578       226,051  
Audit and accounting
    15,166       10,000       30,057       30,400  
Legal fee
    10,647       11,712       18,580       16,089  
Other general and administrative
    129,331       14,010       151,184       24,621  
Total operating expenses
    159,144       223,763       249,399       297,161  
                                 
Loss from operations
    (159,144 )     (217,653 )     (249,399 )     (291,051 )
                                 
Other income (expense)
                               
Gain (Loss) from derivative liability
    2,657,680       101,103       1,458,309       359,120  
Interest expense
    (65,894 )     (48,870 )     (118,940 )     (56,081 )
Net income (loss)
    2,432,642       (165,420 )     1,089,970       11,988  
                                 
Net income (loss) per share:
                               
Basic
  $ -     $ -     $ -     $ -  
Diluted
  $ -     $ -     $ -     $ -  
                                 
Weighted average common shares outstanding:
                               
Basic
    2,983,874,470       554,580,476       2,432,964,594       548,682,192  
Diluted
    20,636,700,651       554,480,476       20,047,457,442       3,109,069,384  
 
The accompanying notes are an integral part of these unaudited consolidated financial statements.
 
 
3

 
 
Writers' Group Film Corp.
 Consolidated Statement of Cash Flows
 (unaudited)
 
   
For The Six Months Ended September 30,
 
   
2013
   
2012
 
             
Cash Flows From Operating Activities
           
Net Income
  $ 1,089,970     $ 11,988  
Adjustments to reconcile net income (loss) to net cash used in operating activities:
         
Gain on Derivative Liability
    (1,458,309 )     (359,120 )
Shares issued for services
    81,624       -  
Amortization of debt discount
    109,183       50,625  
Imputed interest on related party loan
    -       2,596  
Changes in operating assets and liabilities:
               
Account receivable, related party
    -       46,800  
Prepaid expenses and other assets
    (2,040 )     (2,002 )
Accounts payable
    29,154       (15,487 )
Accrued liabilities
    44,365       184,772  
Net cash used in operating activities
    (106,053 )     (79,828 )
                 
Cash Flows From Investing Activities
               
Development of software
    (19,640 )     -  
Loan repayment by related parties
    -       208  
Net cash provided by (used in) investing activities
    (19,640 )     208  
                 
Cash Flows From Financing Activities
               
Borrowing on short term notes payable
    77,000       70,000  
Advances from related parties
    1,110       607  
Deferred financing costs
    (5,000 )     (2,500 )
Proceeds from shares issuance for cash
    55,000       -  
Net cash provided by financing activities
    128,110       68,107  
                 
Net increase (decrease) in cash and cash equivalents
    2,417       (11,513 )
Cash and cash equivalents, beginning of period
    1,143       15,599  
Cash and cash equivalents, end of period
  $ 3,560     $ 4,086  
                 
Income taxes paid
  $ -     $ -  
Interest paid
  $ -     $ -  
Non-cash financing activities:
               
Common Shares issued for convertible debt and accrued interest
  $ 120,326     $ 38,120  
Common Shares issued for acquisition Amiga Games, Inc.
    400,000       -  
Debt discount resulting from recognition of derivative liability
  $ 104,562     $ 45,000  
Reclassification of derivative liabilities to additional paid in capital
  $ 1,330,899     $ 74,025  
Reclassification from nonconvertible debt to convertible debt
  $ -       45,000  
Conversion from Series B preferred stock to common stock
  $ 1,000     $ -  
Common Shares issued for prior year accrued interest
  $ 3,517     $ -  
Cashless warrant exercise
  $ 264     $ -  
 
The accompanying notes are an integral part of these unaudited consolidated financial statements.
 
 
4

 

WRITERS’ GROUP FILM CORP.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2013

NOTE 1 – ORGANIZATION, BUSINESS OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

Organization and Business Operations

Front Row Networks, Inc. (“Front Row”) is a content creation company which produces, acquires and distributes live concerts in 3D for initial worldwide digital broadcast into digitally-enabled movie theaters, TV and mobile streaming providers.
 
The accompanying unaudited interim financial statements of Writers’ Group Film Corp. have been prepared in accordance with accounting principles generally accepted in the United States of America and rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s annual report on Form 10-K for the initial period ended March 31, 2013 as filed with the SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the consolidated financial statements which would substantially duplicate the disclosure contained in the audited financial statements as reported in the annual report on Form 10-K have been omitted.

A reclassification has been made to the balance sheet as of March 31, 2013 to conform to the current period’s presentation.

Capitalized Software Costs

Software costs incurred internally in creating computer software products are expensed until technological feasibility has been established upon completion of a detailed program design. Thereafter, all software development costs are capitalized until the point that the product is ready for sale, and are subsequently reported at the lower of unamortized cost or net realizable value. The Company considers annual amortization of capitalized software costs based on the ratio of current year revenues by product to the total estimated revenues by the product, subject to an annual minimum based on straight-line amortization over the product’s estimated economic useful life, not to exceed five years. The Company periodically reviews capitalized software costs for impairment where the fair value is less than the carrying value.

Goodwill and intangible assets

The Company accounts for goodwill and intangible assets in accordance with ASC 350 "Intangibles-Goodwill and Other" ("ASC 350"). ASC 350 requires that goodwill and other intangibles with indefinite lives be tested for impairment annually or on an interim basis if events or circumstances indicate that the fair value of an asset has decreased below its carrying value.

Goodwill represents the excess of the purchase price over the fair value of net assets acquired in the Company's share exchange with Amiga Games, Inc. which occurred on August 19, 2013. ASC 350 requires that goodwill be tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis and between annual tests when circumstances indicate that the recoverability of the carrying amount of goodwill may be in doubt. Application of the goodwill impairment test requires judgment, including the identification of reporting units; assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value.

Significant judgments required to estimate the fair value of reporting units include estimating future cash flows, determining appropriate discount rates and other assumptions. Changes in these estimates and assumptions or the occurrence of one or more confirming events in future periods could cause the actual results or outcomes to materially differ from such estimates and could also affect the determination of fair value and/or goodwill impairment at future reporting dates.

 
5

 
 
Fair Value Measurements

As defined in ASC 820 “Fair Value Measurements”, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement).

The three levels of the fair value hierarchy defined by ASC 820 are as follows:

Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities.

Level 2 – Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars.

Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value.
 
The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value as of September 30, 2013 and March 31, 2013. As required by ASC 820, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.
 
As of September 30, 2013
 
Total
 
Quoted Prices in Active
Markets
for Identical Instruments
Level 1
 
Significant Other
Observable
Inputs Level 2
 
Significant Unobservable
Inputs Level 3
 
Derivative Liabilities
 
$
-
         
$
-
 
 
 
As of March 31, 2013
 
Total
 
Quoted Prices in Active
Markets
for Identical Instruments
Level 1
 
Significant Other
Observable
Inputs Level 2
 
Significant
Unobservable
Inputs Level 3
 
Derivative Liabilities
 
$
23,550
         
$
23,550
 
 
 
6

 
 
NOTE 2 – GOING CONCERN

As reflected in the accompanying consolidated unaudited financial statements, the Company has suffered recurring losses from operations and had a working capital deficit of $214,601 at September 30, 2013. These factors raise substantial doubt about the ability of the Company to continue as a going concern. The consolidated financial statements have been prepared on a going concern basis and do not include any adjustments that might result from outcome of this uncertainty.

Although management is currently attempting to implement its business plan, and is seeking additional sources of equity or debt financing, there is no assurance these activities will be successful. 

NOTE 3 – NOTES PAYABLE

Notes payable consists of the following:
   
September 30,
2013
   
March 31,
2013
 
             
Note payable, net of debt discount of $0 and $7,362,  respectively
 
$
67,500
   
$
101,700
 
 
Asher Enterprises Notes Payable

On April 10, 2013, the Company borrowed $28,000 from Asher Enterprises. The maturity date of this note is January 15, 2014. This loan bears an interest rate of 8% per annum. Interest on overdue principal after default accrues at an annual rate of 22%. After 180 days following the date of the note, Asher Enterprises has the right to convert all or a portion of the remaining outstanding principal amount of this note into shares of the Company’s Common Stock. The conversion price will be 50% multiplied by the average of the lowest two trading prices for the Common Stock during the twenty trading day period ending on the latest complete trading day prior to the conversion date. As of September 30, 2013, the note is not convertible yet.

On May 13, 2013 the Company borrowed $27,500 from Asher Enterprises. The maturity date of this note is February 17, 2014. This loan bears an interest rate of 8% per annum. Interest on overdue principal after default accrues at an annual rate of 22%. After 180 days following the date of the note, Asher Enterprises has the right to convert all or a portion of the remaining outstanding principal amount of this note into shares of the Company’s Common Stock. The conversion price will be 50% multiplied by the average of the lowest two trading prices for the Common Stock during the twenty trading day period ending on the latest complete trading day prior to the conversion date. As of June 30, 2013, the note is not convertible yet.

Mrs. Nancy Louise Jones

On November 26, 2010, the Company borrowed $60,562 from Mrs. Nancy Louise Jones, wife of Mr. John Diaz, the former CEO and major shareholder. The note carried zero interest and is due on September 8, 2013. On May 2, 2013, Nancy Louise Jones assigned her $60,562 note to Magna Group LLC (see Note 4). The maturity date of this amended note is January 2, 2014. This loan bears an interest rate of 12% per annum. The note is convertible into common stock at a price of 55% multiplied by the lowest volume weighted average price for the Common Stock during the five trading day period ending on the latest complete trading day prior to the conversion date. Additionally, in no event shall the conversion price be less than $0.00004. The Company evaluated the application of ASC 470-50 and ASC 470-60 and concluded the addition of a conversion feature constituted a debt extinguishment rather than a troubled debt restructuring. See more discussion about the new debt in Note 4.

On June 12, 2013, the Company borrowed $12,000 from Mrs. Nancy Louise Jones. Out of the $12,000 debt proceeds $2,000 was paid to Mrs. Nancy Louise Jones for legal and administrative fees. The maturity date of this note is August 31, 2013. This loan bears an interest rate of 12% per annum.

 
7

 
 
NOTE 4 – CONVERTIBLE DEBT

Convertible debt outstanding, net of debt discount of $0 on March 31, 2013
  $ 20,727  
Add: Issuance of convertible debts, net of debt discount of $11,500
    -  
         Assignment from Nancy Louise Jones, net of debt discount of $60,562
    -  
         Reclassification of Asher $16,000 debt dated November 2, 2012 from nonconvertible debt to convertible debt, net of debt discount of $7,362
    8,638  
         Reclassification of Asher $32,000 debt dated January 30, 2013 from nonconvertible debt to convertible debt, net of debt discount of $32,000
    -  
        Amortization of debt discount
    107,183  
Less: principal converted into common stock
    (114,957 )
Convertible debt outstanding, net of debt discount of $4,741
  $ 21,591  

During the six months ended September 30, 2013, $­­­­­114,957 of convertible debts and $5,369 of accrued interest was converted into 1,652,322,404 shares of common stock.
 
 Asher Enterprises, Inc.

On November 2, 2012, the Company borrowed $16,000 from Asher Enterprises. The maturity date of this note is August 5, 2013. This loan bears an interest rate of 8% per annum. Interest on overdue principal after default accrues at an annual rate of 22%. On May 1, 2013, after 180 days following the date of the note, the note became convertible. Asher Enterprises had the right to convert all or a portion of the remaining outstanding principal amount of this note into shares of the Company’s Common Stock. The conversion price was 25% multiplied by the lowest trading price for the Common Stock during the 120 trading day period ending on the latest complete trading day prior to the conversion date.  Along with the note payable, the Company issued warrants to purchase 49,230,769 shares of common stock. The warrants expire 5 years after issuance and have an exercise price of $0.0000325. The exercise price can adjust downward if the Company issues common stock at a price per share lower than the current exercise price.  Asher Enterprise converted principal of $16,000 and interest of $640 into 135,938,462 common shares, bringing the note balance to $0.  Debt discount of $7,362 was amortized during the three months ended June 30, 2013.

On January 30, 2013, the Company borrowed $32,500 from Asher Enterprises. The maturity date of this note is November 1, 2013. This loan bears an interest rate of 8% per annum. Interest on overdue principal after default accrues at an annual rate of 22%. On July 29, 2013, after 180 days following the date of the note, the note became convertible. Asher Enterprises had the right to convert all or a portion of the remaining outstanding principal amount of this note into shares of the Company’s Common Stock. The conversion price was 50% multiplied by the lowest trading price for the Common Stock during the 20 trading day period ending on the latest complete trading day prior to the conversion date. Asher Enterprise converted principal of $32,500 and interest of 1,300 into 338,000,000 common shares, bringing the note balance to $0.  Debt discount of $32,500 was amortized during the six months ended September 30, 2013.

The Company analyzed the conversion option of the Asher note for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the embedded conversion feature should be classified as a liability due to there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options. The embedded conversion feature was measured at fair value at the date of inception and at the termination of the instrument with the change in fair value recorded to earnings.

The Company analyzed the warrants for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the warrants should be classified as a liability due to their not being indexed to the Company’s common stock. The warrants were measured at fair value at the date of inception and at the end of each reporting period or termination of the instrument with the change in fair value recorded to earnings. See discussion related to the derivative liabilities in Note 5 and warrants in Note 6.

 
8

 
 
Magna Group, LLC

On May 2, 2013 Magna Group LLC purchased the note payable of $60,562 from Mrs. Nancy Louise Jones and entered into an amended debt agreement with the Company. See Note 3. On May 9, 2013, Magna issued another convertible note of $11,500 to the Company. The note bears interest of 12% per annum, is due on January 9, 2014 and is convertible into common shares at a price of 55% multiplied by the lowest volume weighted average price for the Common Stock during the five trading day period ending on the latest complete trading day prior to the conversion date. Magna converted debt principal of $60,562 and interest of $579 into 303,883,942 common shares during the six months ended September 30, 2013.

As the Asher debt became convertible on May 1, 2013 and July 29, 2013, the conversion option of Magna convertible notes became tainted, that is, under ASC 815-15 “Derivatives and Hedging”, it should be recorded as derivative liability. The derivative treatment resulted in a full debt discount on the Magna notes. During the six months ended September 30, 2013, debt discount of $67,321 was amortized and the unamortized discount is $4,741 as of September 30, 2013. As a result of the full conversion of Asher convertible debt on September 9, 2013, the derivative treatment on Magna debts ended and the derivative liabilities were reclassified back to equity.  See discussion in Note 5.

Other Convertible Notes

The convertible debts were issued in September 2009, bear an interest rate at 8% per annum, due in one year, and are convertible at $0.00001 per share.

On September 12, 2013, one of the debt holder assigned $9,170 note to Fierce Entertainment LLC. The maturity date of this amended note is September 12, 2014. This loan bears an interest rate of 8% per annum. The note is convertible into common stock at $0.0001 per share. The Company evaluated the application of ASC 470-50 and ASC 470-60 and concluded the amended term dose not constituted a debt extinguishment or troubled debt restructuring.

During the six months ended September 30, 2013, debt principal of $5,895 and interest of $2,850 has been converted into 874,500,000 common shares. As of September, 30, 2013, the convertible note has an outstanding balance of $14,382.
 
In addition, the Company also had a convertible note due to related party of $1,550 as of September 30, 2013.

As the Asher debt became convertible on May 1, 2013 and July 29, 2013, the conversion option of all other third party convertible notes became tainted. Under ASC 815-15 “Derivatives and Hedging”, it should be recorded as derivative liability. As a result of the full conversion of Asher convertible debt on September 9, 2013, the derivative treatment on these convertible debts ended and the derivative liabilities were reclassified back to equity. See discussion in Note 5.

NOTE 5 – DERIVATIVE LIABILITIES

Convertible Notes
 
The Company valued the embedded derivatives (see discussion below) using Black-Scholes Option Pricing Model based on the following assumptions:
 
- Dividend yield: 0%
- Volatility: 216.68%-290.85%
- Risk free rate: 0.03%-0.10% 
 
 
9

 
 
Asher Enterprises
As discussed in Note 4, Asher note of $16,000 and $32,500 became convertible on May 1, 2013 and July 29, 2013, respectively. The conversion feature for Asher note of $16,000 and $32,500 should be classified as derivative liabilities and recorded at fair value. The fair value of the conversion feature for Asher note of $16,000 was determined to be $132,409 on May 1, 2013 and was recognized as additional paid in capital. The fair value of the conversion feature for Asher note of $32,500 was determined to be $74,286 on July 29, 2013 of which $32,500 was recorded as debt discount and 41,786 was recorded as derivative loss. As a result of full conversion on May 29, 2013 and September 9, 2013, under ASC 815-15 “Derivative and Hedging”, the instrument should be measured at fair value at the date of the termination with the change in fair value recorded earnings. Total fair value of the conversion feature on conversion dates was $223,892 and this value was reclassified out of liabilities to equity.

Magna Group LLC
As discussed in Note 4, the conversion feature of Magna notes were tainted by Asher note on May 1, 2013 and July 29, 2013 and should be classified as derivative liabilities and recorded at fair value. On May 1, 2013 the fair value of the conversion feature of the two Magna notes was determined to be $139,524, out of which $72,062 was recorded as debt discount and $67,462 was recorded as derivative loss. On July 29, 2013 the fair value of the conversion feature of the two Magna notes was determined to be $50,575 and was recognized as additional paid in capital. As a result of conversion of $10,000, $8,000 and $9,362 debt principal on May 10, 2013, July 30, 2013 and August 19, 2013, respectively and the termination of derivative treatment on May 29, 2013 and September 9, 2013, under ASC 815-15 “Derivative and Hedging”, the instrument should be measured at fair value at the date of the termination with the change in fair value recorded earnings. Total fair value of the conversion feature on conversion and termination dates was $202,465 and this value was reclassified out of liabilities to equity.

Other Third Party and Related Party Convertible Notes
As discussed in Note 4, the conversion feature of other third party notes was tainted by Asher note on May 1, 2013 and July 29, 2013. In addition, the conversion feature of related party convertible debt of $1,550 was also tainted for the same reason. The conversion features should be classified as derivative liabilities and recorded at fair value. On May 1, 2013 and July 29, 2013, the fair value of the conversion feature of these debts was determined to be $2,485,220 and $805,280, respectively and was recorded as additional paid in capital. As a result of conversion of $250 and $2,250 debt principal on May 2, 2013 and August 21, 2013, respectively and the termination of derivative treatment on May 29, 2013 and September 9, 2013, under ASC 815-15 “Derivative and Hedging”, the instrument should be measured at fair value at the date of the termination with the change in fair value recorded earnings. Total fair value of the conversion feature on conversion and termination dates was $1,692,317 and this value was reclassified out of liabilities to equity.

Warrants

As discussed in Note 4, 49,230,769 warrants issued with the Asher debt should be classified as derivative liability and recorded at fair value at the termination date. Asher settled all the warrants on June 5, 2013. The fair value of the warrants on June 5, 2013 was determined to be $24,614 using Black-Scholes Option Pricing Model based on the following assumptions and was reclassified out of liabilities to equity:

- Dividend yield: 0%
- Volatility: 353.50%
- Risk free rate: 0.75%

 
10

 
 
The following table summarizes the derivative liabilities included in the consolidated balance sheet:

Balance at March 31, 2013
  $ 23,550  
ASC 815-15 additions
       
                     Asher Enterprise note
    206,695  
                     Magna Group LLC notes
    190,099  
                     Other convertible notes
    3,290,500  
ASC 815-15 deletions
       
                     Asher Enterprise note
    (223,892 )
                     Magna Group LLC notes
    (202,465 )
                     Other convertible notes
    (1,692,317 )
                     Asher Enterprise warrants
    (24,614 )
Change in fair value
    (1,567,556 )
Balance at September 30, 2013
  $ 0  

The following table summarizes the derivative (gain) or loss recorded as a result of the derivative liabilities above:
 
For the Six Months Ended September 30, 2013
       
Excess of fair value of liabilities over note payable
 
$
109,247
 
Change in fair value
   
(1,567,556
)
Total Derivative (Gain) Loss
 
$
1,458,309
 

NOTE 6 – EQUITY

Warrants

As discussed in Note 4, along with the note payable, the Company issued warrants to purchase 49,230,769 shares of common stock to Asher Enterprise Inc. The warrants expire 5 years after issuance and have an exercise price of $0.0000325. The exercise price can adjust downward if the Company issues common stock at a price per share lower than the current exercise price.  

 
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On June 5, 2013, Asher Enterprises exercised 26,373,626 warrants for common stock. Instead of paying cash to the Company, Asher Enterprises forfeited the remaining 22,857,143 warrants as consideration given to exercise the warrants. The following table summarizes the Company’s warrant activity for the six months ended September 30, 2013:

   
Number of Units
   
Weighted-Average Exercise Price
   
Weighted-Average Remaining Contractual Term (in years)
   
Intrinsic value
 
Outstanding at March 31, 2013
    49,230,769     $ 0.00       4.59     $ 52,554  
Exercises
    (26,373,626 )     0.00       -       -  
Forfeitures
    (22,857,143 )     0.00       -       -  
Outstanding at September 30,  2013
    -     $ -       -     $ -  

Common Shares issued for convertible notes and cash:

During the six months ended September 30, 2013, convertible debts of $114,957 along with accrued interest of $5,369 were converted into 1,652,322,404 common shares. See Note 4.

Conversion of Preferred Stock into Common Shares

On May 1, 2013, Tal L Kapelner converted 10,000 shares of preferred stock series B into 100,000,000 common shares.

Common shares issued for services

During the six months ended September 30, 2013, the Company issued 276,470,000 shares of common stock to employees and third party consultants as compensation. The fair value of the shares was determined to be $85,141 of which $3,517 was for deferred compensation accrued as of March 31, 2013.

Common shares issued for cash

During the six months ended September 30, 2013, the Company issued 110,000,000 shares of common stock for cash totaling $55,000.

Common shares issued acquisition of Amiga Games, Inc.

On August 19, 2013, the Company issued 500,000,000 common stocks in exchange for all of the outstanding shares of Amiga Games, Inc. The fair value of the shares was determined to be $400,000. See note 7.

 
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NOTE 7 – ACQUISITION

On August 19, 2013, the Company purchased all of the outstanding shares of Amiga Games, Inc. for 500,000,000 common shares. Amiga Games, Inc. licenses classic video game libraries and intends to resurrect classic game titles by giving them new life on today's gaming platforms such as smart phones, PCs, modern game consoles, and tablets. The Company has determined that control of the acquired assets changed hands on August 19, 2013 in accordance with ASC 805-10 (Business Combination) the 500,000,000 shares were valued using the $0.0008 per share closing price on that date for total purchase price consideration of $400,000.

In accordance with purchase acquisition accounting, the company initially allocated the consideration to the net tangible and identifiable intangible assets, based on their estimated fair values as of the date of acquisition. Goodwill represents the excess of the purchase price over the fair value of the underlying net tangible and identifiable intangible assets.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date.
 
 
Tangible assets   $ -  
Customer relationships     134,503  
Goodwill     265,497  
Total purchase price   $ 400,000  
 
The tangible and identifiable intangible assets acquired have minimal activities in the past years. The Company believes the operating activity does not have a material impact on the unaudited consolidated pro forma information.
 
NOTE 8 – SUBSEQUENT EVENTS
 
During October, 2013, Asher converted debt principal of $5,800 into 116,000,000 common shares, Fierce Entertainment LLC converted debt principal of $9,170 into 91,705,000 common shares and other convertible debt holders converted debt principal of $2,450 into 245,000,000 common shares.
 
On October 22, 2013, the Company borrowed $14,000 from SFH Capital LLC. The maturity date of this note is October 22, 2014. This loan bears an interest rate of 12% per annum.
 
On October 29, 2013, the Company borrowed $4,000 from SFH Capital LLC. The maturity date of this note is October 29, 2014. This loan bears an interest rate of 8% per annum.
 
 
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ITEM 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
 
Special Note Regarding Forward Looking Statements
 
In addition to historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We use words such as “believe,” “expect,” “anticipate,” “project,” “target,” “plan,” “optimistic,” “intend,” “aim,” “will” or similar expressions which are intended to identify forward-looking statements. Such statements include, among others, those concerning market and industry segment growth and demand and acceptance of new and existing products; any projections of sales, earnings, revenue, margins or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements regarding future economic conditions or performance; as well as all assumptions, expectations, predictions, intentions or beliefs about future events. You are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including those identified in Item 1A “Risk Factors” in our annual report on Form 10-K for fiscal year ended March 31, 2013, as well as assumptions, which, if they were to ever materialize or prove incorrect, could cause the results of the Company to differ materially from those expressed or implied by such forward-looking statements. Forward looking statements made by penny stock issuers are excluded from the safe harbors in Section 27A of the Securities Act of 1933 and in Section 21E of the Securities Exchange Act of 1934.

Readers are urged to carefully review and consider the various disclosures made by us in this report and our other filings with the Security and Exchange Commission (“SEC”). These reports attempt to advise interested parties of the risks and factors that may affect our business, financial condition and results of operations and prospects. The forward-looking statements made in this report speak only as of the date hereof and we disclaim any obligation, except as required by law, to provide updates, revisions or amendments to any forward-looking statements to reflect changes in our expectations or future events.

Overview

Writers’ Group Film Corp. (“we”, “us”, “our”, “WRIT”, or the “Company”) was incorporated in Delaware on March 9, 2007 to produce films, television programs and similar entertainment programs for various media formats.

Front Row Networks (“FRN”) was incorporated on July 27, 2010 in the State of Nevada. The Company is a content creation company which intends to produce, acquire and distribute live concerts in 3D for initial worldwide digital broadcast into digitally-enabled movie theaters. This new concept is intended to present live concerts in 3D, at lower ticket prices, to a massive fan base worldwide in a cost-effective manner. Following the initial 3D theatrical run, the distribution rights to the concerts will be licensed, in both 2D and 3D format, to DVD and Blu-Ray retailers, Free TV broadcasters, cable and emerging 3D cable channels, and mobile streaming providers. Front Row Networks will also sell merchandising, such as clothing, household goods, and other products, tailored to each Artist and to each Sponsor, in movie theaters where the live concert is exhibited

In February 2011, FRN completed a reverse acquisition transaction through a share exchange with WRIT, whereby WRIT acquired 100% of the issued and outstanding capital stock of FRN in exchange for 100,000,000 shares of the Common Stock of WRIT. As a result of the reverse acquisition, FRN became WRIT’s wholly-owned subsidiary and the former FRN’s shareholders became controlling stockholders of WRIT. The share exchange transaction with WRIT was treated as a reverse acquisition, with FRN as the accounting acquirer and WRIT as the acquired party.

Consequently, the assets and liabilities and the historical operations that will be reflected in the consolidated financial statements for periods prior to the Share Exchange Agreement will be those of FRN and will be recorded at the historical cost basis. After the completion of the Share Exchange Agreement, the Company’s consolidated financial statements will include the assets and liabilities of both FRN and WRIT, the historical operations of FRN and the operations of WRIT from the closing date of the Share Exchange Agreement.

On July 7, 2011, we modified our February 2011 Share Exchange Agreement and agreed to assume $100,000 in new debt which is shown as a reduction of our Paid-In Capital.

 
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While the core business of Front Row Networks remains the production, acquisition and distribution of 2D and 3D theatrical event programming, the Company seeks to secure and distribute non-concert alternative theatrical programming, such as animated family content, music-related documentaries, and other gaming content that can be distributed via mobile and internet platforms. It is the Company’s strategic goal to acquire the broadest range of rights for exclusive programming, we may finance all or part of the production of our entertainment programs, acquire rights to completed projects, acquire content catalogues, or acquire companies which own or control content catalogues. We believe that we are positioned to benefit from the market growth and increased demand for alternative theatrical content and mobile content, and we intend to continue expansion of our exclusive library content throughout the coming year.

On August 19, 2013, Writers’ Group Film Corp. completed an acquisition transaction through a share exchange with Amiga Games Inc., whereby Writers’ Group Film Corp. acquired 100% of the issued and outstanding capital stock of Amiga Games Inc. in exchange for 500,000,000 shares of the Common Stock of WRIT. As a result of the acquisition, Amiga Games Inc. became WRIT’s wholly-owned subsidiary. After the completion of the Share Exchange Agreement, the Company’s consolidated financial statements will include the assets and liabilities of both WRIT and Amiga Games Inc., the historical operations of WRIT and the operations of Amiga games Inc. from the closing date of the Share Exchange Agreement.
 
Results of Operations
 
Three Months Ended September 30, 2013 and 2012
 
Revenues. No revenues were recognized for the three months ended September 30, 2013 and $6,110 recognized for three months ended September 30, 2012.

Wages and benefits.  Wages and benefits expenses decreased by $184,041for the three months ended September 30, 2013 as compared to the same period in 2012. The decrease is mainly due to the decrease in salary rate.

Audit and accounting.  Audit and accounting expenses increased $5,166 and 52% for the three months ended September 30, 2013 as compared to the same period in 2012. The increase  in the audit and accounting expense is mainly related to need for additional professional services.

Other general and administrative expenses.  Other general and administrative expenses increased by $115,321 and 823% for the three months ended September 30, 2013 as compared to the same period in 2012. Those expenses consist primarily of company’s business development, consulting fees and other expenses incurred in connection with general operations. The increase is mainly related to the consulting fees related to the fund raising projects.

Loss from operations. Our loss from operations was $159,144 for the three months ended September 30, 2013 and $217,653 for the same period in 2012.

Gain or loss from derivative liability. We recorded again from derivative liability of $2,657,680 for the three months ended September 30, 2013, which is discussed in more detail in Note 5 “Derivative Liabilities” to our consolidated financial statements. There was a gain of $101,103 from derivative liability for the three months ended September 30, 2012.

Interest expense. We incurred $65,894 of interest expense for the three months ended September 30, 2013 and $48,870 for the same period in 2012. The increase in interest expense is mainly related to the amortization of debt discount.

Net income or loss. As a result of the foregoing factors, we generated a net income of $2,432,642 for the three months ended September 30, 2013, and we generated a net loss of $165,420 for the same period in 2012.

 
15

 
 
Six Months Ended September 30, 2013 and 2012

Revenues.  Revenues decreased from $6,110 to $0 for the six months ended September 30, 2013 as compared to the same period in 2012. The decrease in revenue was primarily due to management time spent on adding the new mobile gaming and entertainment lines of business.
 
Wages and benefits.   Wages and benefits expenses decreased by ($176,473) and 78.07% for the six months ended September 30, 2013 as compared to the same period in 2012. The decrease in reducing personnel expense during the quarter was related to revenue levels while adding the new lines of business.

Audit and accounting.   Audit and accounting expenses remained almost unchanged and decreased by ($343) and 1.13% for the six months ended September 30, 2013 as compared to the same period in 2012. The small decrease in the audit and accounting expense is mainly related to receiving the same level of services as compared to the same period in 2012.

Legal fee.   Legal fee increased by $2,491 and 15.48% for the six months ended September 30, 2013 as compared to the same period in 2012. The increase in legal fees is mainly related to activities related to the new lines of business and new financing agreements with third parties.

Other general and administrative expenses.  Other general and administrative expenses increased by $126,563 and 514.04% for the six months ended September 30, 2013 as compared to the same period in 2012. Those expenses consist primarily of company’s business development, consulting fees and other expenses incurred in connection with general operations. The increase is mainly related to the addition of the new lines of business.

Loss from operations . Our loss from operations was ($249,399) for the six months ended September 30, 2013 and ($291,051) for the same period in 2012. The decrease is mainly related to the net effect of a decrease in wages and benefits and increase in other general and administrative expenses.

Gain or loss from derivative liability. We recorded a gain from derivative liability of $1,458,309 and $359,120 for the six months ended September 30, 2013 and 2012which is discussed in more detail in Note 5 “Convertible Debt”, Note 6 “Convertible Debt – Related Party” and Note 7 “Derivative Liabilities” to our consolidated financial statements.

Interest expense. We incurred $118,940 in interest expense for the six months ended September 30, 2013 and $56,081 for the same period in 2012. The increase in interest expense is mainly related to the amortization of debt discount.

Net income or loss. As a result of the foregoing factors, we generated a net income of $1,089,970 for the six months ended September 30, 2013, and a net income of $11,988 for the same period in 2012. The increase is mainly related to the increase in gain from derivative liabilities of $1,458,309, a decrease in operating expenses of ($47,762) and increase in interest expense of $62,859 from the same period in 2012.

Liquidity and Capital Resources

As reflected in the accompanying consolidated financial statements, the Company has suffered recurring net loss and had a working capital deficiency of $214,601. These factors raise substantial doubt about the ability of the Company to continue as a going concern. Although management is currently attempting to implement its business plan, and is seeking additional sources of equity or debt financing, there is no assurance these activities will be successful.

As of September 30, 2013 and March 31, 2013, we have $3,560 and $1,143 cash and cash equivalents, respectively. To date, we have financed our operations primarily through cash flows from borrowings from third and related parties.

 
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Operating activities

Net Cash used in operating activities of $106,053 for the six months ended September 30, 2013 reflected our net income of $1,089,970, adjusted for $109,183 of amortization of debt discount, $81,624 stock base compensation and $1,458,309 gain on derivative liability. Additional sources of cash include increase in accrued liability of $44,365 and increase in accounts payable of $29,154. Uses of cash included an increase in prepaid expenses of $2,040.

Net cash used in operating activities was $79,828 for the six months ended September 30, 2012. The net cash used in operating activities is primarily due to the net loss and partially offset by amortization of debt discount, decrease in accounts payable, increase in accrued liabilities and the decrease in accounts receivable during the quarter.

Investing activities
 
Net cash used in investing activities is $19,640 for the six months ended September 30, 2013 for development of software.
 
Net cash provided by investing activities for the six months ended September 30, 2012 is advances from related party.
 
Financing activities
 
Net cash provided by financing activities of $128,110 for the six months ended September 30, 2013 includes funds of $77,000 borrowed from third party, payment of $5,000 for deferred financing costs, proceeds from related party advances of $1,110, and proceeds from shares issuance of $55,000.

Net cash provided by financing activities was $68,107 for the six months ended September 30, 2012. The net cash provided by financing activities is primarily due to short term borrowings during the quarter.
 
Loan Commitments

Borrowings from Third Parties

 On September 9, 2013 Writers’ Group Film Corp., a Delaware corporation (the “Company”), entered into an Investment Agreement (the “Investment Agreement”) with Dutchess Opportunity Fund, II, LP, a Delaware limited partnership (the “Investor”). Pursuant to the Investment Agreement, and subject to certain restrictions and conditions, the Company may issue and sell to the Investor, and the Investor shall purchase from the Company, up to that number of shares of the Company’s common stock having an aggregate purchase price of ten million dollars ($10,000,000), over a period of 36 months from the first trading day following the effectiveness of the registration statement registering the resale of shares purchased by the Investor pursuant to the Investment Agreement.

On September 12, 2013 Fierce Entertainment LLC purchased the note payable of $9,170.50 from Powerguard International Inc. and entered into an amended debt agreement with the Company. The note bears interest of 8% per annum, is due on September 12, 2014 and is convertible into common shares at a price of $0.0001. Fierce Entertainment LLC converted debt principal of $9,170.50 into 91,705,000 common shares on October 21, 2013.

 
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Obligations under Material Contracts
 
Except with respect to the loan obligations disclosed above, we have no obligations to pay cash or deliver cash to any other party.
 
Inflation
 
Inflation and changing prices have not had a material effect on our business and we do not expect that inflation or changing prices will materially affect our business in the foreseeable future. However, our management will closely monitor price changes in our industry and continually maintain effective cost controls in operations.
 
Off Balance Sheet Arrangements
 
We do not have any off balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity or capital expenditures or capital resources that is material to an investor in our securities.
 
Seasonality
 
Our operating results and operating cash flows historically have not been subject to seasonal variations. This pattern may change, however, as a result of new market opportunities or new product introduction.

Critical Accounting Policies
 
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires our management to make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any. We have identified certain accounting policies that are significant to the preparation of our financial statements. These accounting policies are important for an understanding of our financial condition and results of operation. Critical accounting policies are those that are most important to the portrayal of our financial conditions and results of operations and require management’s difficult, subjective, or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management’s current judgments. We believe the following critical accounting policies involve the most significant estimates and judgments used in the preparation of our financial statements:
 
      ·
Accounts Receivable: Accounts receivable are recorded at the net invoice value and are not interest bearing. We consider receivables past due based on the contractual payment terms. We perform ongoing credit evaluations of our customers, and generally we do not require collateral on our accounts receivable. We estimate the need for allowances for potential credit losses based on historical collection activity and the facts and circumstances relevant to specific customers and we record a provision for uncollectible accounts when collection is uncertain. To date, we have not experienced significant credit related losses.
 
      ·
Revenue Recognition: We recognize revenues when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable and collectability is reasonably assured.
 
 
18

 
 
Recent Accounting Pronouncements
 
We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow.
 
CONTROLS AND PROCEDURES.
 
Evaluation of Disclosure Controls and Procedures
 
As of the end of the period covered by this Quarterly Report, we conducted an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934). Based on this evaluation, the CEO and CFO concluded that, because of the material weaknesses in our internal control over financial reporting described below, our disclosure controls and procedures were not effective as of September 30, 2013 See our discussion at “Item 9A Controls and Procedures” on Form 10-K for the year ended March 31, 2013.  
 
Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process certain safeguards to reduce, though not eliminate, this risk. Management is responsible for establishing and maintaining adequate internal control over our financial reporting.
 
Changes in Internal Controls
 
There have been no changes in our internal controls over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
 
LEGAL PROCEEDINGS

There is no litigation pending or threatened by or against the Company.
 
Exhibits.

Consolidated Financial statements are included in the body of this report.

Exhibit Index:
 
*  Rule 15d-14(a) Certifications    Exhibit (31)(i)and(ii)
* Section 1350 Certification      Exhibit (32)
 
101.INS **
 
XBRL Instance Document
     
101.SCH **
 
XBRL Taxonomy Extension Schema Document
     
101.CAL **
 
XBRL Taxonomy Extension Calculation Linkbase Document
     
101.DEF **
 
XBRL Taxonomy Extension Definition Linkbase Document
     
101.LAB **
 
XBRL Taxonomy Extension Label Linkbase Document
     
101.PRE **
 
XBRL Taxonomy Extension Presentation Linkbase Document

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
 
 
19

 
 
Signatures.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

.
 
WRITERS’ GROUP FILM CORP
 
       
November  19, 2013
By:
/s/ Eric Mitchell
 
   
Eric Mitchell, President and Sole Director
 
       
 
By:
/s/ Eric Mitchell
 
   
Chief Financial Officer and Chief Accounting Officer/Controller
 
       
 
 20