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EXCEL - IDEA: XBRL DOCUMENT - SEEN ON SCREEN TV INC.Financial_Report.xls
EX-31.1 - SARBANES-OXLEY 302 CERTIFICATION - PRINCIPAL EXECUTIVE AND PRINCIPAL FINANCIAL OFFICER. - SEEN ON SCREEN TV INC.exh31-1.htm
EX-32.1 - SARBANES-OXLEY 906 CERTIFICATION - CHIEF EXECUTIVE AND CHIEF FINANCIAL OFFICER. - SEEN ON SCREEN TV INC.exh32-1.htm
EX-10.1 - MASTER LICENSE AGREEMENT WITH BOLD IDEAS GROUP S.A.R.L. - SEEN ON SCREEN TV INC.exh10-1.htm





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

FORM 10-Q

[X]
QUARTERLY REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED APRIL 30, 2013
 
 
OR
 
 
 
[   ]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number   000-21812

SEEN ON SCREEN TV INC.
(Exact name of registrant as specified in its charter)

NEVADA
(State or other jurisdiction of incorporation or organization)

4017 Colby Avenue
Everett, Washington   98201
(Address of principal executive offices, including zip code.)

425-367-4668
(Registrant’s telephone number, including area code)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 last 90 days. YES [   ]     NO [X]

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,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

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]

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date:
43,732,523 as of April 30, 2013.






TABLE OF CONTENTS

 
Page
 
 
 
3
 
   
Financial Statements.
3
 
   
 
Financial Statements:
 
   
3
   
4
 
 
5
   
6
 
   
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
12
 
   
Quantitative and Qualitative Disclosures About Market Risk.
15
 
   
Controls and Procedures.
15
 
   
 
15
 
   
Risk Factors.
15
 
   
Unregistered Sales of Equity Securities and Use of Proceeds.
15
     
Other Information.
16
     
Exhibits.
16
 
   
17
 
 
18








 
-2-


PART I B FINANCIAL INFORMATION

ITEM 1.
FINANCIAL STATEMENTS.

SEEN ON SCREEN TV, INC.
 
Balance Sheets
 
 
 
 
 
             
   
April 30,
   
October 31,
 
   
2013
   
2012
 
   
unaudited
   
audited
 
ASSETS
           
Current assets:
           
Cash
  $ 2,299     $ 1,154  
Accounts receivable
    5,369     $ -  
Inventory
    182,803       182,803  
Employee advance
    -       2,365  
Security deposit
    2,515       2,515  
Total current assets
    192,986       188,837  
 
               
Total assets
  $ 192,986     $ 188,837  
 
               
 
               
LIABILITIES
               
Current liabilities:
               
Accounts payable and accrued taxes
  $ 58,675     $ 45,931  
Note Payable
    8,008       8,008  
Total current liabilities
    66,683       53,939  
 
               
Long-term liabilities:
               
Due to related parties:
               
Accrued rent payable
    110,753       98,753  
Accrued compensation
    1,660,000       1,468,000  
Officer and shareholder payable
    170,800       163,027  
Affiliate company
    2,500          
 
               
Total long term liabilities
    1,944,053       1,729,780  
 
               
Total liabilities
    2,010,736       1,783,719  
 
               
 
               
STOCKHOLDERS’ DEFICIT
               
Common stock, $0.001 par value, 195,000,000 authorized,
43,732,523 and 38,876,523 shares issued and outstanding
    43,733       38,877  
Preferred stock, authorized: 5,000,000 shares, par value $0.001,
no preferred shares outstanding
               
Capital in excess of par value
    33,754,515       33,464,571  
Stock subscription
    -       254,600  
Accumulated deficit
    (35,615,998 )     (35,352,930 )
Total stockholders’ deficit
    (1,817,750 )     (1,594,882 )
Total liabilities and stockholders’ deficit
  $ 192,986     $ 188,837  


The accompanying notes are an integral part of these statements.
F-1

 
-3-



SEEN ON SCREEN TV, INC.
 
Statements of Operations
 
 
 
 
 
   
Three months
   
Three months
   
Six months
   
Six months
 
   
Ended
   
Ended
   
ended
   
ended
 
   
April 30,
   
April 30,
   
April 30,
   
April 30,
 
   
2013
   
2012
   
2013
   
2012
 
   
unaudited
   
unaudited
   
unaudited
   
unaudited
 
                         
Sales
  $ 14,084     $ 67,512     $ 58,469     $ 218,661  
                                 
Cost of Sales
    553       54,589       3,322       109,473  
                                 
Gross Profit
    13,531       12,923       55,147       109,188  
                                 
General and administrative expenses:
                               
Wages and salaries
    109,076       121,926       235,781       239,985  
Taxes
    3,866       3,607       7,493       6,336  
Advertising and marketing
    50       5,896       651       6,903  
Legal and professional
    11,800       7,846       14,800       7,846  
Travel and entertainment
    174       2,032       365       2,603  
Rent
    14,395       48,227       36,388       105,959  
Other office and miscellaneous
    10,511       (19,341 )     22,313       48,008  
Total operating expenses
    149,872       170,193       317,791       417,640  
(Loss) from operations
    (136,341 )     (157,270 )     (262,644 )     (308,452 )
                                 
Other income (expense):
                               
Interest (expense)
    (208 )     (29,216 )     (423 )     (30,373 )
Income/(Loss) before taxes
    (136,549 )     (186,486 )     (263,067 )     (338,825 )
Provision/(credit) for taxes on income
    -       -       -       -  
Net Income/(loss)
  $ (136,549 )   $ (186,486 )   $ (263,067 )   $ (338,825 )
                                 
                                 
Basic earnings/(loss) per common share
  $ (0.00 )   $ (0.01 )   $ (0.01 )   $ (0.01 )
                                 
Weighted average number of shares
outstanding
    38,876,523       34,743,192       38,876,523       34,876,525  















The accompanying notes are an integral part of these statements.
F-2

 
-4-



SEEN ON SCREEN TV, INC.
 
Statement of Cash Flows
 
 
 
 
 
   
Six months
   
Six months
 
   
ended
   
ended
 
   
April 30,
   
April 30,
 
   
2013
   
2012
 
 
 
unaudited
   
unaudited
 
Cash flows from operating activities:
           
Net income (loss) from Continuing Operations
  $ (263,067 )   $ (338,825 )
Rounding
    (1 )        
Adjustments to reconcile net (loss) to cash provided (used)
by developmental stage activities:
               
Change in current assets and liabilities:
               
Accounts receivable
    (5,369 )        
Other current assets
    2,365       (16,024 )
Accounts payable and accrued expenses
    12,744       (21,326 )
Net cash flows from operating activities
    (253,328 )     (376,175 )
 
               
Cash flows from investing activities:
               
 
            -  
Net cash flows from investing activities
    -       -  
 
               
Cash flows from financing activities:
               
Proceeds from sale of common stock
    40,200       61,031  
Stock subscription
            132,500  
Related party transaction
    214,273       172,405  
Net cash flows from financing activities
    254,473       365,936  
Net cash flows
    1,145       (10,239 )
 
               
Cash and equivalents, beginning of period
    1,154       10,626  
Cash and equivalents, end of period
  $ 2,299     $ 387  
 
               
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS FOR:
               
Interest
  $ (423 )   $ (30,373 )
Income taxes
  $ -     $ -  

















The accompanying notes are an integral part of these statements.
F-3

 
-5-


SEEN ON SCREEN TV, INC.
NOTES TO FINANCIAL STATEMENTS
April 30, 2013



Note 1 - Summary of Significant Accounting Policies

General Organization and Business

The Company was originally incorporated as “Naxos Resources Ltd.” (“Naxos”) in British Columbia under the Canada Business Corporation Act on May 23, 1986, with its principal place of business in Vancouver, BC.  In 2000, The Company moved its executive and administrative offices to San Francisco, CA, USA.

On October 15, 2001, the shareholders approved the domiciliation of the Company to the United States.  On October 29, 2001, Articles of Incorporation and Articles of Domestication were filed with the Secretary of State of Nevada and Naxos was “continued” as a Nevada Corporation under the name of Franklin Lake Resources, Inc.  On January 3, 2002, Industry Canada Issued a Certificate of Discontinuance, formally ending the Company’s legal ties to Canada.  On January 9, 2002, the name change to Franklin Lake Resources, Inc. became effective for trading purposes.

The Company was in the business of exploring for precious metals, developing processes for extracting them from the earth and if warranted, developing sites for possible exploration. As of November 2008, the Company has refocused its operations and now operates as a retail store under the name Seen On Screen TV, Inc. and purchases products from companies advertising on TV. The Company trades under the symbol SONT.

Basis of presentation

The accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America, and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and reflect all adjustments, consisting of normal recurring adjustments, which management believes are necessary to fairly present the financial position, results of operations and cash flows of the Company for the periods ending April 30, 2013 and year ending October 31, 2012 as well as for the three and six month periods ended April 30, 2013 and 2012.

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and cash equivalents

The Company maintains a cash balance in a non-interest-bearing account that currently does not exceed federally insured limits. For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. There were no cash equivalents as of April 30, 2013 and October 31, 2012.

Inventory

Inventory is recorded at the lower of cost or market and is computed on a first-in first-out basis.  The inventory consists of various products that have been previously marketed via infomercials on various cable and TV stations across the nation. These products are sourced from the original marketing company and from generic suppliers serving the same niche. For the period ended April 30, 2013, there was no change in inventory as the goods stored in the warehouse remained in storage and any purchases were directly shipped to the retail stores. An inventory count was completed in September 2013 and an adjustment was booked retroactively to adjust the value to actual.




F-4

 
-6-


SEEN ON SCREEN TV, INC.
NOTES TO FINANCIAL STATEMENTS
April 30, 2013



Accounts receivable

Trade receivables are carried at original invoice amount.  Management has determined that no allowance is necessary.  The allowance for doubtful accounts is based on management estimates of accounts that will not be collected in the future.  Receivables past due for more than 90 days are considered delinquent.  Management determines uncollectible accounts by regularly evaluating individual customer receivables and considering a customer’s financial condition, credit history, and current economic conditions and by using historical experience applied to an aging of accounts.  Recoveries of trade receivables previously written off are recorded when received.

Fair value of financial instruments and derivative financial instruments

The Company’s financial instruments include cash, accounts receivable, accounts payable, and notes payable. All instruments are accounted for on a historical cost basis, which, due to the short maturity of these financial instruments, approximates fair value at April 30, 2013 and October 31, 2012. The Company did not engage in any transaction involving derivative instruments.

Federal income taxes

The Company accounts for its income taxes in accordance with Income Taxes Topic of the FASB ASC 740, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date.

Net Loss Per Share of Common Stock

Net loss per share is provided in accordance with FASB ASC 260-10, “Earnings per Share”. Basic net loss per common share (“EPS”) is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing net income by the weighted average shares outstanding, assuming all dilutive potential common shares were issued, unless doing so is anti-dilutive.

Common Stock Registration Expenses

The Company considers incremental costs and expenses related to the registration of equity securities with the SEC, whether by contractual arrangement as of a certain date or by demand, to be unrelated to original issuance transactions.  As such, subsequent registration costs and expenses are reflected in the accompanying financial statements as general and administrative expenses, and are expensed as incurred.

Advertising:

The Company expenses all costs of advertising as incurred.  The advertising costs included in general and administrative expenses for the period ended April 30, 2013 and 2012 were $651 and $6,903, respectively.

Recently Issued Accounting Pronouncements:

For the period ended April 30, 2013 and year ended October 31, 2012, the Company does not expect any of the recently issued accounting pronouncements to have a material impact on its financial condition or results of operations.





F-5

 
-7-


SEEN ON SCREEN TV, INC.
NOTES TO FINANCIAL STATEMENTS
April 30, 2013



Note 2 - Uncertainty, going concern:

The Company’s financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs to allow it to continue as a going concern. As of April 30, 2013, the Company had an accumulated deficit of $35,615,998. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. The Company is contemplating conducting an offering of its debt or equity securities to obtain additional operating capital. The Company is dependent upon its ability, and will continue to attempt, to secure equity and/or debt financing. There are no assurances that the Company will be successful and without sufficient financing it would be unlikely for the Company to continue as a going concern.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

Note 3 - Related Party Transactions

The Company has multiple related party transactions.  These related party transactions include accrued rent, accrued compensation and officer and shareholder payable.  These accounts are provided for working capital purposes, and are unsecured, non-interest bearing, and have no specific terms of repayment.

For the period ending October 31, 2012, the Company has increased the balance of accrued rent by $24,000, increased accrued compensation by $384,000 and decreased officer and shareholder payable by $87,067.

The balance of these related party transactions on October 31, 2012 was $1,729,780.

For the period ending April 30, 2013, the Company has increased the balance of accrued rent by $12,000, increased accrued compensation by $192,000, increased officer and shareholder payable by $7,773 and increased loans from affiliates by $2,500.

The balance of these related party transactions on April 30, 2013 was $1,944,053.

Note 4 – Contingent Liabilities

The Company has a note payable with a former employee.  The note is related to unpaid wages associated with a store in California.  The balance of this payable at October 31, 2012 was $8,008.

In July 2013, the employee filed a claim with the State of California for unpaid wages.  The State of California has placed a judgment against the Company for $37,574.  The Company has presently recorded the amount they believe is owed to this former employee and is disputing the amount with State of California.

Note 5 - Common Stock

On March 19, 2009, the Company filed Articles of Amendment to consolidate the issued and outstanding common shares of the Company at a 2 - 5 reverse split.  As a result, the issued and outstanding shares decreased from 20,960,325 to 8,384,130 shares of common stock.  All share amounts have been retroactively adjusted for all periods presented.

During the fiscal year ending October 31, 2011, the Company issued 3,624,523 shares for $248,492.

F-6

 
-8-


SEEN ON SCREEN TV, INC.
NOTES TO FINANCIAL STATEMENTS
April 30, 2013



On April 30, 2012, The Company issued 2,650,000 for settlement of $132,500 of related party debt.  The Company has not issued these shares as of April 30, 2012.  The Company has recorded these shares as a stock subscription.

During the fiscal period ending July 31, 2012, the Company received $99,100 for unissued 1,982,000 shares of stock.  These shares are listed as a stock subscription until issued.

During the fiscal period ending October 31, 2012, the Company received $23,000 for unissued 460,000 shares of stock.  These shares are listed as a stock subscription until issued.

During the fiscal year ending October 31, 2012, the Company issued 4,610,000 shares for $99,032 cash.

During the fiscal period ending January 31, 2013, the Company received $12,700 for unissued 254,000 shares of stock.  These shares are listed as a stock subscription until issued.

During the fiscal period ending April 30, 2013, the Company received $27,500 cash for 550,000 shares of stock.

During the fiscal period ending April 30, 2013, the Company issued 4,306,000 shares for all shares that money was received and not issued.  These amounts were listed as stock subscription.

Note 6 - Income Taxes

We follow Accounting Standards Codification regarding Accounting for Income Taxes. Deferred income taxes reflect the net effect of (a) temporary difference between carrying amounts of assets and liabilities for financial purposes and the amounts used for income tax reporting purposes, and (b) net operating loss carryforwards. No net provision for refundable Federal income tax has been made in the accompanying statement of loss because no recoverable taxes were paid previously. Similarly, no deferred tax asset attributable to the net operating loss carryforward has been recognized, as it is not deemed likely to be realized.

The provision for refundable Federal income tax consists of the following:

 
2012
 
2011
 
Refundable Federal income tax attributable to:
       
Current operations
$ (226,914 ) $ (332,364 )
Less, Nondeductible expenses
  -0-     -0-  
-Less, Change in valuation allowance
  226,914     332,364  
Net refundable amount
  -0-     -0-  

The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows:

 
2012
 
2011
 
Deferred tax asset attributable to:
       
Net operating loss carryover
$ 822,971   $ 596,057  
Less, Valuation allowance
  (822,971 )   (596,057 )
Net deferred tax asset
  -     -  

At October 31, 2012, an unused net operating loss carryover approximating $1,962,619 is available to offset future taxable income; it expires beginning in 2034.





F-7

 
-9-


SEEN ON SCREEN TV, INC.
NOTES TO FINANCIAL STATEMENTS
April 30, 2013



Reconciliation between the statutory rate and the effective tax rate is as follows at October 31, 2012 and 2011:

Federal statutory tax rate
    (35.0 )%
Permanent difference and other
    35.0 %
Effective tax rate
    0.0 %

Note 7 – Discontinued Operations

During the period ending October 31, 2012, the Company discontinued operation of three additional stores.  During the period ending October 31, 2012, the Company opened 4 new stores and closed an additional three.  The closures resulted in a discontinued loss of $48,314.  The Company currently has three stores open and operating.

SEEN ON SCREEN TV, INC.
 
Discontinued Operations
 
October 31, 2012
 
 
 
   
Year ended
             
   
October 31,
   
Stores
       
   
2012
   
Closed
   
Net
 
                   
Sales
  $ 399,325     $ 167,653     $ 231,672  
                         
Cost of Sales
    165,168       67,061       98,107  
                         
Gross Profit
    234,157       100,592       133,565  
                         
General and administrative expenses:
                       
Wages and salaries
    535,036       30,501       504,535  
Taxes
    22,516       1,189       21,327  
Advertising and marketing
    11,431               11,431  
Legal and professional
    17,551               17,551  
Computer and internet
    -               -  
Travel and entertainment
    7,494               7,494  
Product development costs
    -               -  
Bank charges
    -               -  
Rent
    233,941       86,077       147,864  
Depreciation and amortization
    -               -  
Other office and miscellaneous
    59,239       31,139       28,100  
Total operating expenses
    887,208       148,906       738,302  
(Loss) from operations
    (653,051 )     (48,314 )     (604,737 )
                         
Other income (expense):
                       
Interest income
                       
Interest (expense)
    (32,300 )             (32,300 )
Income/(Loss) before taxes
    (685,351 )     (48,314 )     (637,037 )
Provision/(credit) for taxes on income
    -       -       -  
                         
Net loss before discontinued operations
    (685,351 )     48,314       (637,037 )
Net loss on discontinued operations, net of tax
    -       (48,314 )     (48,314 )
Net Income/(loss)
  $ (685,351 )   $ -     $ (685,351 )
F-8

 
-10-


SEEN ON SCREEN TV, INC.
NOTES TO FINANCIAL STATEMENTS
April 30, 2013



Note 8 – Foreign Operations

As of March 31, 2013, the company executed a contract with Bold Ideas Group S.A.R.L., a Lebanese Corporation, in which Bold Ideas Group S.A.R.L. will will conduct business under the name Seen On ScreenTV, Inc. and remit non-refundable royalties of 3% of gross sales of each store and a non-refundable royalty of 3% on gross profit on each internet site.

Note 9 – Subsequent Events

In accordance with SFAS 165 (ASC 855-10) management has reviewed events between October 31, 2012 and January 21, 2014 and has identified the following for disclosure:

On July 31, 2013, the company issued 1,740,000 shares for a value of $87,000 for 5 cents per share.

On October 31, 2013, the company issued 1,454,000 shares for a value of $72,700 for 5 cents per share.

On January 10, 2014 the Company issued 7,700,000 shares for services valued at $385,000 and 2,034,280 shares to pay off amounts owed to shareholders of $101,714.  



































F-9

 
-11-


ITEM 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.

This section of this quarterly report includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of our prospectus. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.

Overview

We were formed for the purpose of selling products in our retail stores located throughout the United States. We have one retail store in the state of Washington.

Our financial statements were prepared on a going concern basis, which assumes that we will be able to realize assets and discharge liabilities in the normal course of business. The ability to continue as a going concern is dependent on the Company’s ability to generate profitable operations in the future, to maintain adequate financing, and to achieve a positive cash flow. There is no assurance it will be able to meet any or all of such goals.

Results of Operations

Gross Profit (Loss)

For the three months ended April 30, 2013 and April 30, 2012, we had a gross profit of $13,531 and $12,923, respectively. The $608 increase at April 30, 2013 compared with April 30, 2012 is due to the lower cost of goods sold due to having only one operating store by the end of April 30, 2013.

Total Expenses

Our total cost and expenses which consist of payroll and related benefits, consulting expenses, marketing, general and administrative expenses, depreciation and amortization, and research and development expenses decreased by 20,321 from $170,193 for the period ended April 30, 2012 to $149,872 for the period ended April 30, 2013. From the period ending April 30, 2013, we had only one operating store.

Loss from Operations

Our operating loss from operations for the period ended April 30, 2013 was $136,341 compared to a loss of $157,270 for the period ended April 30, 2012. The decrease in loss from operations of $20,929 was due to the decrease in the wages and salaries, increase in taxes, decrease in rent, and increase in other office and miscellaneous.

Interest Expense

Interest expense and related financing fees for the period ended April 30, 2013 was $208 compared to $29,216 for the period ended April 30, 2012, a decrease of $29,008. The decrease in interest expense and related financing fees was due to the reduction in the number of operating stores to one

Net Loss

During the periods ended April 30, 2013 and April 30, 2012, we incurred net losses of $136,549 and $186,486 respectively. The decrease loss of $49,937 was primarily due to the decrease in expenses during 2013.


 
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Liquidity and Capital Resources

As of April 30, 2013, we had a working capital deficit since inception of $35,615,998, as compared to a working capital deficit of $35,352,930 as of October 31, 2012. In the past we have relied on sales of our equity to raise funds for our working capital requirements, as well as loans from our majority stockholder. We will need to raise additional capital in order to implement our business plan and will seek to sell additional equity and/or debt to accomplish this objective. There can be no assurance that we will be able to raise funds sufficient to carry out our business plan, or that if funds are available to us that they will be on acceptable terms.

Operating Activities

Net cash flow from operating activities decreased by $122,847 from $367,175 during the period ending April 30, 2012, to $253,328 for the period ending April 30, 2013.  This decrease is due to a decrease in the net loss from Continuing Operation as well as a decrease in accounts receivable, and an increase in other current assets and an increase in accounts payable and accrued expenses.

Investing Activities

During the period ended April 30, 2013 and the period ended April 30, 2012, we had no investing activities.

Financing Activities

During the period ended April 30, 2013, we raised $40,200 from the sale of restricted shares of common stock to affiliates and unrelated parties.

Seasonality Results

We do not expect to experience any seasonality in our operating results.

Off-Balance Sheet Arrangements

We currently do not have any off-balance sheet arrangements or financing activities with special purpose entities.

Principles of Consolidation

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and in accordance with the SEC’s accounting rules under Regulation S-X. All material inter-company accounts and transactions have been eliminated in consolidation.

Critical Accounting Policies and Estimates

Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. To prepare these financial statements, we must make estimates and assumptions that affect the reported amounts of assets and liabilities. These estimates also affect our reported revenues and expenses. On an ongoing basis, management evaluates its estimates and judgment, including those related to revenue recognition, accrued expenses, financing operations and contingencies and litigation. Management bases its estimates and judgment on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The most significant accounting estimates inherent in the preparation of our financial statements are set forth in Note 1 to our audited financial statements.

 
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Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Fair Value of Financial Instruments

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under Financial Accounting Standards Board (FASB) guidance regarding disclosures about fair value of financial instruments, approximate the carrying amounts presented in the accompanying consolidated balance sheets.

Inventory

Inventories consist of merchandise that is ready for sale to end-user customers. Inventories are recorded at the lower of average cost or market. In-bound freight-related costs from our vendors are included as part of the net cost of merchandise inventories. Other costs associated with acquiring, storing and transporting merchandise inventories are expensed as incurred. Our inventories are acquired and carried for retail sale and, accordingly, the carrying value is susceptible to, among other things, market trends and conditions and overall customer demand. We use our best estimates of all available information to establish reasonable inventory quantities. However, these conditions may cause our inventories to become obsolete and/or excessive. We review our inventories periodically for indications that reserves are necessary to reduce the carrying values to the lower of cost or market values. For all periods presented, the Company determined that no reserves were necessary.

Property and Equipment

Computer equipment, computer software and furniture and fixtures are stated at cost and depreciated on a straight-line basis over an estimated useful life of five years. Upon disposal, assets and related accumulated depreciation are removed from the accounts and the related gain or loss is included in results from operations.

Impairment of Long-Lived Assets and Other Intangible Assets

We evaluated the recoverability of long-lived assets with finite lives in accordance with ASC 350. Intangible assets, including purchased technology and other intangible assets, are carried at cost less accumulated amortization. Finite-lived intangible assets are being amortized on a straight-line basis over their estimated useful lives of five to ten years. ASC 350 requires recognition of impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying value amount of an asset may not be recoverable. An impairment charge is recognized in the event the net book value of such assets exceeds the future undiscounted cash flows attributable to such assets. A significant impairment of finite-lived intangible assets could have a material adverse effect on our financial position and results of operations. For all periods presented, we determined that no impairment charges were incurred.

Revenue Recognition

Overview

We recognize revenue when persuasive evidence of an arrangement exists, we have delivered the product or performed the service, the fee is fixed or determinable and collection is reasonably assured. If any of these criteria are not met, we defer recognizing the revenue until such time as all criteria are met. Determination of whether or not these criteria have been met may require us to make judgments, assumptions and estimates based upon current information and historical experience.

 
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The Company markets its products direct to customers and has developed retail pricing for all revenue generating products. In addition the Company may mark-down prices on an individual case basis to increase demand on our products, and increase our sales to boost up the market.

Advertising and Marketing Costs

The company expenses advertising and marketing costs as they are incurred.

Computation of (Loss) Per Share

Basic earnings (loss) per share is calculated by dividing the earnings (loss) by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share is calculated by dividing the earnings (loss) by the weighted average number of common shares and potentially dilutive securities outstanding during the period. Potentially dilutive common shares consist of incremental common shares issuable upon exercise of stock options, warrants and shares issuable upon the conversion of convertible notes. The dilutive effect of the convertible notes is calculated under the if-converted method. The dilutive effect of outstanding shares is reflected in diluted earnings per share by application of the treasury stock method. This method includes consideration of the amounts to be paid by the employees, the amount of excess tax benefits that would be recognized in equity if the instruments were exercised and the amount of unrecognized stock-based compensation related to future services.

ITEM 3.         QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 4.         CONTROLS AND PROCEDURES.

Under the supervision and with the participation of our management, including the Principal Executive Officer and Principal Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, the Principal Executive Officer and Principal Financial Officer have concluded that these disclosure controls and procedures are effective.  There was no change in our internal control over financial reporting during the quarter ended April 30, 2013 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.




PART II. OTHER INFORMATION
 
ITEM 1A. RISK FACTORS.
 
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
 
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
 
During the period ending April 30, 2013, we received $27,500 in cash and issued 550,000 shares of our restricted common stock therefore. Additionally, we issued 4,306,000 shares of our restricted common stock in consideration of $254,600 in cash which was paid to us during the period ending January 31, 2013. During the period ended January 31, 2013, these amounts were listed as stock subscription. 100,000 shares were sold to Charles Carafoli, one of our directors and an affiliate, and 4,206,000 shares were sold to unrelated third parties.
 
 
 
-15-

 
 
ITEM 5. OTHER INFORMATION.
 
During the period ended January 31, 2013, we failed to file a Form 8-K (Item 3.02) to disclose the sale of 4,206,000 restricted shares of common stock.
 
During the period ended April 30, 2013, we failed to file a Form 8-K (Item 3.02) to disclose the sale of 550,000 restricted shares of common stock.
 
During the period ending April 30, 2013, we received $27,500 in cash and issued 550,000 shares of our restricted common stock therefore. Additionally, we issued 4,306,000 shares of our restricted common stock in consideration of $254,600 in cash which was paid to us during the period ending January 31, 2013. During the period ended January 31, 2013, these amounts were listed as stock subscription. 100,000 shares were sold to Charles Carafoli, one of our directors and an affiliate, and 4,206,000 shares were sold to unrelated third parties

ITEM 6. EXHIBITS.

   
Incorporated by reference
Filed
Exhibit
Document Description
Form
Date
Number
herewith
3.1
Articles of Incorporation.
10-KSB
2/04/02
3.1
 
 
         
3.2
Bylaws.
10-KSB
2/04/02
3.2
 
 
         
3.3
Articles of Domestication.
10-KSB
2/04/02
3.3
 
 
         
10.1
Asset Purchase Agreement.
10-K
8/31/11
10.1
 
 
         
10.2
Rescission Agreement.
10-K
8/31/11
10.2
 
 
         
14.1
Code of Ethics.
10-K
8/31/11
14.1
 
 
         
10.1
Master License Agreement with Bold Ideas Group s.a.r.l.
     
X
 
         
31.1
Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
     
X
 
         
32.1
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
     
X
 
         
99.1
Audit Committee Charter.
10-K
8/31/11
99.2
 
 
         
99.2
Disclosure Committee Charter.
10-K
8/31/11
99.3
 
 
         
101.INS
XBRL Instance Document.
     
X
 
         
101.SCH
XBRL Taxonomy Extension – Schema.
     
X
 
         
101.CAL
XBRL Taxonomy Extension – Calculations.
     
X
 
         
101.DEF
XBRL Taxonomy Extension – Definitions.
     
X
 
         
101.LAB
XBRL Taxonomy Extension – Labels.
     
X
 
         
101.PRE
XBRL Taxonomy Extension – Presentation.
     
X


 
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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, on this 18th day of February, 2014.

 
SEEN ON SCREEN TV INC.
 
   
 
BY:
ANTOINE JARJOUR
   
Antoine Jarjour
   
President, Principal Executive Officer, Treasurer, Principal Financial Officer, and Principal Accounting Officer

















 
-17-



EXHIBIT INDEX

   
Incorporated by reference
Filed
Exhibit
Document Description
Form
Date
Number
herewith
3.1
Articles of Incorporation.
10-KSB
2/04/02
3.1
 
 
         
3.2
Bylaws.
10-KSB
2/04/02
3.2
 
 
         
3.3
Articles of Domestication.
10-KSB
2/04/02
3.3
 
 
         
10.1
Asset Purchase Agreement.
10-K
8/31/11
10.1
 
 
         
10.2
Rescission Agreement.
10-K
8/31/11
10.2
 
 
         
14.1
Code of Ethics.
10-K
8/31/11
14.1
 
 
         
10.1
Master License Agreement with Bold Ideas Group s.a.r.l.
     
X
 
         
31.1
Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
     
X
 
         
32.1
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
     
X
 
         
99.1
Audit Committee Charter.
10-K
8/31/11
99.2
 
 
         
99.2
Disclosure Committee Charter.
10-K
8/31/11
99.3
 
 
         
101.INS
XBRL Instance Document.
     
X
 
         
101.SCH
XBRL Taxonomy Extension – Schema.
     
X
 
         
101.CAL
XBRL Taxonomy Extension – Calculations.
     
X
 
         
101.DEF
XBRL Taxonomy Extension – Definitions.
     
X
 
         
101.LAB
XBRL Taxonomy Extension – Labels.
     
X
 
         
101.PRE
XBRL Taxonomy Extension – Presentation.
     
X







 
-18-