Golden Ally Lifetech Group, Inc. - Quarter Report: 2009 June (Form 10-Q)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
Form
10-Q
(Mark
one)
|
x
|
Quarterly
Report Under Section 13 or 15(d) of the Securities Exchange Act of
1934
|
For
the quarterly period ended June 30, 2009
|
o
|
Transition
Report Under Section 13 or 15(d) of the Securities Exchange Act of
1934
|
For the transition period from ______________ to _____________
Commission
File Number: 000-51185
Signet
International Holdings, Inc.
(Exact
name of registrant as specified in its charter)
|
Delaware
|
16-1732674
|
|
|
(State
of incorporation)
|
(IRS
Employer ID
Number)
|
205 Worth Avenue, Suite 316,
Palm Beach, Florida 33480
(Address
of principal executive offices)
(561)
832-2000
(Issuer's
telephone number)
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 past 90 days. YES
x NO
o
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. See the definitions of “large accelerated filer”,
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act. (Check one):
|
Large
Accelerated Filer o
|
|
Non-Accelerated
Filer
o
|
|
|
Accelerated
Filer
o
|
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
x NO
o
State the
number of shares outstanding of each of the issuer's classes of common equity as
of the latest practicable date:August 10, 2009:
4,731,962
Signet
International Holdings, Inc.
Form 10-Q
for the Quarter ended June 30, 2009
Table of
Contents
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Page
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Part
I - Financial Information
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Item
1 - Financial Statements
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3
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|
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Item
2 - Management's Discussion and Analysis or Plan of
Operation
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15
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|
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Item
3 - Quantitative and Qualitative Disclosures About Market
Risk
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17
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Item
4 - Controls and Procedures
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18
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Part
II - Other Information
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||
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Item
1 - Legal Proceedings
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18
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|
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Item
2 - Recent Sales of Unregistered Securities and Use of
Proceeds
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18
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Item
3 - Defaults Upon Senior Securities
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19
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Item
4 - Submission of Matters to a Vote of Security Holders
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19
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Item
5 - Other Information
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19
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Item
6 - Exhibits
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19
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Signatures
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20 |
-2-
Item 1
Part
1 - Financial Statements
Signet
International Holdings, Inc. and Subsidiary
(a
development stage enterprise)
Consolidated
Balance Sheets
June 30,
2009 and December 31, 2008
|
(Unaudited)
|
(Audited)
|
|||||||
|
June
30,
|
December
31,
|
|||||||
|
2009
|
2008
|
|||||||
|
ASSETS
|
||||||||
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Current
Assets
|
||||||||
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Cash in
bank
|
$ | 33,282 | $ | 44,996 | ||||
|
Other
Assets
|
||||||||
|
Option
agreement
|
100,000 | 100,000 | ||||||
|
Broadcast and
intellectual properties,
|
||||||||
|
net of
accumulated amortization of $-0-
|
4,007,249 | 4,007,249 | ||||||
|
Total
Other Assets
|
4,107,249 | 4,107,249 | ||||||
|
Total
Assets
|
$ | 4,140,531 | $ | 4,152,245 | ||||
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
(DEFICIT)
|
||||||||
|
Liabilities
|
||||||||
|
Current
Liabilities
|
||||||||
|
Accounts payable -
trade
|
$ | 148,144 | $ | 137,520 | ||||
|
Other accrued
liabilities
|
414,375 | 343,375 | ||||||
|
Accrued officer
compensation
|
389,683 | 355,920 | ||||||
|
Total
Current Liabilities
|
952,202 | 836,815 | ||||||
|
Commitments
and Contingencies
|
||||||||
|
Shareholders’
Equity (Deficit)
|
||||||||
|
Preferred stock -
$0.001 par value
|
||||||||
|
50,000,000
shares authorized
|
||||||||
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5,000,000
shares designated,
|
||||||||
|
issued and
outstanding, respectively
|
5,000 | 5,000 | ||||||
|
Common stock -
$0.001 par value.
|
||||||||
|
100,000,000
shares authorized.
|
||||||||
|
4,731,962 and
4,706,962 shares
|
||||||||
|
issued and
outstanding, respectively
|
4,732 | 4,707 | ||||||
|
Additional paid-in
capital
|
4,872,314 | 4,847,339 | ||||||
|
Deficit accumulated
during the development stage
|
(1,693,717 | ) | (1,541,616 | ) | ||||
|
Total
Shareholders’ Equity (Deficit)
|
3,188,329 | 3,315,430 | ||||||
|
Total Liabilities and
Shareholders’ Equity
|
$ | 4,140,531 | $ | 4,152,245 | ||||
-3-
Signet
International Holdings, Inc. and Subsidiary
(a
development stage enterprise)
Consolidated
Statements of Operations and Comprehensive Loss
Six and
Three months ended June 30, 2009 and 2008 and
Period
from October 17, 2003 (date of inception) through June 30, 2009
(Unaudited)
|
Period
from
|
||||||||||||||||||||
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October
17, 2003
|
||||||||||||||||||||
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Six
months
|
Six
months
|
Three
months
|
Three
months
|
(date
of inception)
|
||||||||||||||||
|
ended
|
ended
|
ended
|
ended
|
through
|
||||||||||||||||
|
June
30,
|
June
30,
|
June
30,
|
June
30,
|
June
30,
|
||||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
2009
|
||||||||||||||||
|
Revenues
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
|
Expenses
|
||||||||||||||||||||
|
Organizational and
formation expenses
|
- | - | - | - | 89,801 | |||||||||||||||
|
Officer
compensation
|
35,000 | 35,000 | 17,500 | 17,500 | 396,670 | |||||||||||||||
|
Other
salaries
|
65,000 | 58,500 | 32,500 | 26,000 | 372,125 | |||||||||||||||
|
Other general and
administrative expenses
|
52,101 | 51,491 | 19,964 | 19,964 | 644,691 | |||||||||||||||
|
“Consulting
expense”related to sale of
|
||||||||||||||||||||
|
common
stock at less than “fair value”
|
- | - | - | - | 181,430 | |||||||||||||||
|
Total
Expenses
|
152,101 | 144,991 | 87,771 | 63,464 | 1,684,717 | |||||||||||||||
|
Loss
from Operations
|
(152,101 | ) | (144,991 | ) | (87,771 | ) | (63,464 | ) | (1,684,717 | ) | ||||||||||
|
Other
Expense
|
||||||||||||||||||||
|
Interest
expense
|
- | - | - | - | (9,000 | ) | ||||||||||||||
|
Loss
before Provision
for Income Taxes
|
(152,101 | ) | (144,991 | ) | (87,771 | ) | (63,464 | ) | (1,693,717 | ) | ||||||||||
|
Provision
for Income Taxes
|
- | - | - | - | - | |||||||||||||||
|
Net
Loss
|
(152,101 | ) | (144,991 | ) | (87,771 | ) | (63,464 | ) | (1,693,717 | ) | ||||||||||
|
Other
Comprehensive Income
|
- | - | - | - | - | |||||||||||||||
|
Comprehensive
Loss
|
$ | (152,101 | ) | $ | (144,991 | ) | $ | (87,771 | ) | $ | (63,464 | ) | $ | (1,693,717 | ) | |||||
|
Loss
per weighted-average
|
||||||||||||||||||||
|
share
of common stock outstanding,
computed
|
||||||||||||||||||||
|
on
Net Loss - basic and fully diluted
|
$ | (0.03 | ) | $ | (0.03 | ) | $ | (0.02 | ) | $ | (0.01 | ) | $ | (0.35 | ) | |||||
|
Weighted-average
number
|
||||||||||||||||||||
|
of
shares of common
|
||||||||||||||||||||
|
stock
outstanding
|
4,714,835 | 4,505,391 | 4,722,621 | 4,505,819 | 4,033,688 | |||||||||||||||
-4-
Signet
International Holdings, Inc. and Subsidiary
(a
development stage enterprise)
Consolidated
Statements of Cash Flows
Six
months ended June 30, 2009 and 2008 and
Period
from October 17, 2003 (date of inception) through June 30, 2009
(Unaudited)
|
Period
from
|
||||||||||||
|
17-Oct-03
|
||||||||||||
|
Six
months
|
Six
months
|
(date
of inception)
|
||||||||||
|
ended
|
ended
|
through
|
||||||||||
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June
30, 2009
|
June
30, 2008
|
June
30, 2009
|
||||||||||
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Cash
Flows from Operating Activities
|
|
|
|
|||||||||
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Net
Loss
|
$ | (151,101 | ) | $ | (144,991 | ) | $ | (1,693,717 | ) | |||
|
Adjustments to
reconcile net income to net cash
|
||||||||||||
|
provided by
operating activities
|
||||||||||||
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Depreciation
|
- | - | - | |||||||||
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Organizational
expenses paid with issuance
|
||||||||||||
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of
common and preferred stock
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- | - | 50,810 | |||||||||
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Expenses paid with
common stock
|
- | - | 125,000 | |||||||||
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“Compensation
expense” related
|
||||||||||||
|
to sale
of common stock at less than “fair value”
|
- | - | 181,430 | |||||||||
|
Increase (Decrease)
in
|
||||||||||||
|
Accounts
payable - trade
|
10,624 | 16,128 | 73,144 | |||||||||
|
Accrued
liabilities
|
71,000 | 64,500 | 414,375 | |||||||||
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Accrued
officers compensation
|
33,763 | 35,000 | 389,683 | |||||||||
|
Net
cash used in operating activities
|
(36,714 | ) | (29,363 | ) | (459,275 | ) | ||||||
|
Cash
Flows from Investing Activities
|
- | - | - | |||||||||
|
Cash
Flows from Financing Activities
|
||||||||||||
|
Cash proceeds from
note payable
|
- | - | 90,000 | |||||||||
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Cash paid to retire
note payable
|
- | - | -90,000 | |||||||||
|
Cash proceeds from
sale of common stock
|
25,000
|
800
|
519,189
|
|||||||||
|
Purchase of
treasury stock
|
- | - | -50,000 | |||||||||
|
Cash paid to
acquire capital
|
- | - | -10,447 | |||||||||
|
Capital contributed
to support operations
|
- | - | 33,815 | |||||||||
|
Net
cash provided by financing activities
|
25,000 | 800 | 492,557 | |||||||||
|
Increase
(Decrease) in Cash and Cash Equivalents
|
(11,714 | ) | (28,563 | ) | 33,282 | |||||||
|
Cash
and cash equivalents at beginning of period
|
44,996 | 42,434 | - | |||||||||
|
Cash
and cash equivalents at end of period
|
$ | 33,282 | $ | 13,871 | $ | 33,282 | ||||||
|
Supplemental
Disclosures of Interest and Income Taxes Paid
|
||||||||||||
|
Interest paid
during the period
|
$ | - | $ | - | $ | - | ||||||
|
Income taxes paid
(refunded)
|
$ | - | $ | - | $ | - | ||||||
-5-
Signet
International Holdings, Inc. and Subsidiary
(a
development stage enterprise)
Notes
to Consolidated Financial Statements
June 30,
2009 and 2008
Note
A - Organization and Description of Business
Signet
International Holdings, Inc. (Company) was incorporated on February 2, 2005 in
accordance with the Laws of the State of Delaware as 51142, Inc. The
Company changed its corporate name to Signet International Holdings, Inc. in
conjunction with the September 8, 2005 transaction discussed below.
On
September 8, 2005, pursuant to a Stock Purchase Agreement and Share Exchange
(Agreement) by and among Signet International Holdings, Inc. (Signet); Signet
Entertainment Corporation (SIG) and the shareholders of SIG (Shareholders)
(collectively SIG and the SIG shareholders shall be known as the “SIG Group”),
Signet acquired 100.0% of the then issued and outstanding preferred and common
stock of SIG for a total of 3,421,000 common shares and 5,000,000 preferred
shares of Signet’s stock issued to the SIG Group. Pursuant to the
agreement, SIG became a wholly owned subsidiary of Signet.
Signet
Entertainment Corporation was incorporated on October 17, 2003 in accordance
with the Laws of the State of Florida. SIG was formed to establish a
television network “The Gaming and Entertainment Network”. To date,
this effort has been incomplete.
The
Company is considered in the development stage and, as such, has generated no
significant operating revenues and has incurred cumulative operating losses of
approximately $1,700,000.
Note
B - Preparation of Financial Statements
The
acquisition of Signet Entertainment Corporation by Signet International
Holdings, Inc. effected a change in control of Signet International Holdings,
Inc. and is accounted for as a “reverse acquisition” whereby Signet
Entertainment Corporation is the accounting acquirer for financial statement
purposes. Accordingly, for all periods subsequent to the “reverse
merger” transaction, the financial statements of the Signet International
Holdings, Inc. will reflect the historical financial statements of Signet
Entertainment Corporation from it’s inception and the operations of Signet
International Holdings, Inc. subsequent to the September 8, 2005 transaction
date.
The
Company follows the accrual basis of accounting in accordance with accounting
principles generally accepted in the United States of America and has a year-end
of December 31.
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Management
further acknowledges that it is solely responsible for adopting sound accounting
practices, establishing and maintaining a system of internal accounting control
and preventing and detecting fraud. The Company’s system of internal
accounting control is designed to assure, among other items, that 1) recorded
transactions are valid; 2) valid transactions are recorded; and 3) transactions
are recorded in the proper period in a timely manner to produce financial
statements which present fairly the financial condition, results of operations
and cash flows of the Company for the respective periods being
presented.
During
interim periods, the Company follows the accounting policies set forth in its
annual audited financial statements filed with the U. S. Securities and Exchange
Commission on its Annual Report on Form 10-K for the year ended December 31,
2008. The information presented within these interim financial
statements may not include all disclosures required by generally accepted
accounting principles and the users of financial information provided for
interim periods should refer to the annual financial information and footnotes
when reviewing the interim financial results presented herein.
-6-
Signet
International Holdings, Inc. and Subsidiary
(a
development stage enterprise)
Notes
to Consolidated Financial Statements - Continued
June 30,
2009 and 2008
Note
B - Preparation of Financial Statements - Continued
In the
opinion of management, the accompanying interim financial statements, prepared
in accordance with the U. S. Securities and Exchange Commission’s instructions
for Form 10-Q, are unaudited and contain all material adjustments, consisting
only of normal recurring adjustments necessary to present fairly the financial
condition, results of operations and cash flows of the Company for the
respective interim periods presented. The current period results of
operations are not necessarily indicative of results which ultimately will be
reported for the full fiscal year ending August 31, 2009.
The
accompanying consolidated financial statements contain the accounts of Signet
International Holdings, Inc. and its wholly-owned subsidiary, Signet
Entertainment Corporation. All significant intercompany transactions
have been eliminated. The consolidated entities are collectively
referred to as “Company”.
Note
C - Going Concern Uncertainty
The
Company is still in the process of developing and implementing it’s business
plan and raising additional capital. As such, the Company is
considered to be a development stage company.
The
Company's continued existence is dependent upon its ability to generate
sufficient cash flows from operations to support its daily operations as well as
provide sufficient resources to retire existing liabilities and obligations on a
timely basis.
The
Company anticipates that future sales of equity securities to fully implement
it’s business plan or to raise working capital to support and preserve the
integrity of the corporate entity may be necessary. There is no
assurance that the Company will be able to obtain additional funding through the
sales of additional equity securities or, that such funding, if available, will
be obtained on terms favorable to or affordable by the Company.
If no
additional capital is received to successfully implement the Company’s business
plan, the Company will be forced to rely on existing cash in the bank and upon
additional funds which may or may not be loaned by management and/or significant
stockholders to preserve the integrity of the corporate entity at this
time. In the event, the Company is unable to acquire sufficient
capital, the Company’s ongoing operations would be negatively
impacted.
It is the
intent of management and significant stockholders to provide sufficient working
capital necessary to support and preserve the integrity of the corporate
entity. However, no formal commitments or arrangements to advance or
loan funds to the Company or repay any such advances or loans
exist. There is no legal obligation for either management or
significant stockholders to provide additional future funding.
While the
Company is of the opinion that good faith estimates of the Company’s ability to
secure additional capital in the future to reach our goals have been made, there
is no guarantee that the Company will receive sufficient funding to sustain
operations or implement any future business plan steps.
Note
D - Summary of Significant Accounting Policies
|
1.
|
Cash and cash
equivalents
|
For
Statement of Cash Flows purposes, the Company considers all cash on hand and in
banks, certificates of deposit and other highly-liquid investments with
maturities of three months or less, when purchased, to be cash and cash
equivalents.
|
2.
|
Organization
costs
|
The
Company has adopted the provisions of AICPA Statement of Position 98-5,
“Reporting on the Costs of Start-Up Activities” whereby all organizational and
initial costs incurred with the incorporation and initial capitalization of the
Company were charged to operations as incurred.
-7-
Signet
International Holdings, Inc. and Subsidiary
(a
development stage enterprise)
Notes
to Consolidated Financial Statements - Continued
June 30,
2009 and 2008
Note
D - Summary of Significant Accounting Policies - Continued
|
3.
|
Research and
development expenses
|
Research
and development expenses are charged to operations as incurred.
|
4.
|
Advertising
expenses
|
The
Company does not utilize direct solicitation advertising. All other
advertising and marketing expenses are charged to operations as
incurred.
|
5.
|
Income
Taxes
|
The
Company files income tax returns in the United States of America and may file,
as applicable and appropriate, various state(s). With few exceptions,
the Company is no longer subject to U.S. federal, state and local, as
applicable, income tax examinations by regulatory taxing authorities for years
before 2006. The Company does not anticipate any examinations of
returns filed since 2006.
The
Company uses the asset and liability method of accounting for income
taxes. At June 30, 2009 and December 31, 2008, respectively, the
deferred tax asset and deferred tax liability accounts, as recorded when
material to the financial statements, are entirely the result of temporary
differences. Temporary differences generally represent differences in
the recognition of assets and liabilities for tax and financial reporting
purposes, primarily accumulated depreciation and amortization, allowance for
doubtful accounts and vacation accruals.
The
Company adopted the provisions of FASB Interpretation No. 48, “Accounting for
Uncertainty in Income Taxes”, on January 1, 2007. FASB Interpretation
No. 48 requires the recognition of potential liabilities as a result of
management’s acceptance of potentially uncertain positions for income tax
treatment on a “more-likely-than-not” probability of an assessment upon
examination by a respective taxing authority. As a result of the
implementation of Interpretation 48, the Company did not incur any liability for
unrecognized tax benefits.
|
6.
|
Earnings (loss) per
share
|
Basic
earnings (loss) per share is computed by dividing the net income (loss)
available to common shareholders by the weighted-average number of common shares
outstanding during the respective period presented in our accompanying financial
statements.
Fully
diluted earnings (loss) per share is computed similar to basic income (loss) per
share except that the denominator is increased to include the number of common
stock equivalents (primarily outstanding options and warrants).
Common
stock equivalents represent the dilutive effect of the assumed exercise of the
outstanding stock options and warrants, using the treasury stock method, at
either the beginning of the respective period presented or the date of issuance,
whichever is later, and only if the common stock equivalents are considered
dilutive based upon the Company’s net income (loss) position at the calculation
date.
At June
30, 2009 and 2008, and subsequent thereto, the Company’s issued and outstanding
preferred stock is considered anti-dilutive due to the Company’s net operating
loss position.
|
7.
|
Pending and/or New
Accounting Pronouncements
|
The
Company is of the opinion that any pending accounting pronouncements, either in
the adoption phase or not yet required to be adopted, will not have a
significant impact on the Company's financial position or results of
operations.
-8-
Signet
International Holdings, Inc. and Subsidiary
(a
development stage enterprise)
Notes
to Consolidated Financial Statements - Continued
June 30,
2009 and 2008
Note
E - Fair Value of Financial Instruments
The
carrying amount of cash, accounts receivable, accounts payable and notes
payable, as applicable, approximates fair value due to the short term nature of
these items and/or the current interest rates payable in relation to current
market conditions.
Interest
rate risk is the risk that the Company’s earnings are subject to fluctuations in
interest rates on either investments or on debt and is fully dependent upon the
volatility of these rates. The Company does not use derivative
instruments to moderate its exposure to interest rate risk, if any.
Financial
risk is the risk that the Company’s earnings are subject to fluctuations in
interest rates or foreign exchange rates and are fully dependent upon the
volatility of these rates. The company does not use derivative
instruments to moderate its exposure to financial risk, if any.
Note
F - Option Agreement
On July
23, 2008, we executed an Option to Purchase Asset Agreement (Agreement) with
Access Media Group, Inc. (a Florida Corporation) dba AMG TV, headquartered in
Jensen Beach, FL, to acquire 100% of the assets, satellite delivery service
contracts, customer service agreements in the USA and the Caribbean, including
the business operations located in Pittsburgh and North New Jersey for an agreed
purchase price is $3 million, payable as set forth in the Agreement, and the
issuance of 100,000 shares of our restricted, unregistered common
stock. The term of our option is one (1) year and expires on July 22,
2009. As consideration for the Agreement, the Company issued 20,000
shares of restricted, unregistered common stock to Access Media Group, Inc. with
a mutually agreed-upon value of $100,000.
The
Company has 180 days to complete the acquisition after serving notice to AMG TV
that the Company intends to exercise the option and is actively pursuing capital
resources in order to exercise the option and integrate these operations
according to the Company’s Business Plan.
Note
G - Broadcast and Intellectual Properties
On April
20, 2007, the Company entered into a new purchase agreement with Freehawk for
100% of the rights to 21 television series to be produced by Freehawk
exclusively for Signet. The total consideration paid by the Company
for these rights was 270,000 shares of restricted, unregistered common stock and
a $50,000 open account payable. Based on an independent third-party
appraisal, the Company valued this transaction at approximately
$2,870,625. The common stock was issued pursuant to an exemption from
registration under Section 4(2) of the Securities Act of 1933, as amended, and
no underwriter was used in this transaction.
On May
22, 2007, the Company acquired the exclusive television rights to “Tales From
The moe.Republic”, by John E. Derhak. This full-length novel is in
the process of being published and is currently being sold in an abridged,
autographed limited edition through the website
www.moerepublic.org. Total consideration paid by the Company for
these rights was 113,662 shares of restricted, unregistered common stock and a
$25,000 promissory note. Based on an independent third-party
appraisal, the Company valued this transaction at approximately
$1,136,600. The common stock was issued pursuant to an exemption from
registration under Section 4(2) of the Securities Act of 1933, as amended, and
no underwriter was used in this transaction.
(Remainder
of this page left blank intentionally)
-9-
Signet
International Holdings, Inc. and Subsidiary
(a
development stage enterprise)
Notes
to Consolidated Financial Statements - Continued
June 30,
2009 and 2008
Note
H - Income Taxes
The
components of income tax (benefit) expense each of the six and three month
periods ended June 30, 2009 and 2008 and for the period from October 17, 2003
(date of inception) through June 30, 2009, are as follows:
|
Period
from
|
||||||||||||||||||||
|
August
1, 2007
(date of
|
||||||||||||||||||||
|
Six
months
|
Six
months
|
Three
months
|
Three
months
|
bankruptcy
settlement)
|
||||||||||||||||
|
ended
|
ended
|
ended
|
ended
|
through
|
||||||||||||||||
|
June
30,
|
June
30,
|
June
30,
|
June
30,
|
June
30,
|
||||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
2009
|
||||||||||||||||
|
Federal:
|
||||||||||||||||||||
|
Current
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
|
Deferred
|
- | - | - | - | - | |||||||||||||||
| - | - | - | - | - | ||||||||||||||||
|
State:
|
||||||||||||||||||||
|
Current
|
- | - | - | - | - | |||||||||||||||
|
Deferred
|
- | - | - | - | - | |||||||||||||||
| - | - | - | - | - | ||||||||||||||||
|
Total
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
As of
June 30, 2009, the Company has a net operating loss carryforward of
approximately $744,000 for Federal income tax purposes and approximately
$634,000 for State income tax purposes. The amount and availability
of any future net operating loss carryforwards may be subject to limitations set
forth by the Internal Revenue Code. Factors such as the number of shares
ultimately issued within a three year look-back period; whether there is a
deemed more than 50 percent change in control; the applicable long-term tax
exempt bond rate; continuity of historical business; and subsequent income of
the Company all enter into the annual computation of allowable annual
utilization of the carryforwards.
The
Company's income tax expense (benefit) for each of the six months ended June 30,
2009 and 2008 and for the period from October 17, 2003 (date of inception)
through June 30, 2009, respectively, differed from the statutory federal rate of
34 percent as follows:
|
Period
from
|
||||||||||||
|
October
17, 2003
|
||||||||||||
|
Six
months
|
Six
months
|
(date
of inception)
|
||||||||||
|
ended
|
ended
|
through
|
||||||||||
|
June
30,
|
June
30,
|
June
30,
|
||||||||||
|
2009
|
2008
|
2009
|
||||||||||
|
Statutory
rate applied to income before income taxes
|
$ | (52,000 | ) | $ | (49,000 | ) | $ | (576,000 | ) | |||
|
Increase
(decrease) in income taxes resulting from:
|
||||||||||||
|
State
income taxes
|
- | - | - | |||||||||
|
Non-deductible
accrued compensation
|
34,000 | 32,000 | 261,000 | |||||||||
|
Non-deductible
consulting fees related to issuance
|
||||||||||||
|
of common stock at
less than “fair value”
|
- | - | 62,000 | |||||||||
|
Other,
including reserve for deferred tax
|
||||||||||||
|
asset and
application of net operating loss carryforward
|
18,000 | 17,000 | 253,000 | |||||||||
|
Income
tax expense
|
$ | - | $ | - | $ | - | ||||||
(Remainder
of this page left blank intentionally)
-10-
Signet
International Holdings, Inc. and Subsidiary
(a
development stage enterprise)
Notes
to Consolidated Financial Statements - Continued
June 30,
2009 and 2008
Note
H - Income Taxes - Continued
Temporary
differences, consisting primarily of the prospective usage of net operating loss
carryforwards give rise to deferred tax assets and liabilities as of June 30,
2009 and December 31, 2008, respectively:
|
June
30,
|
December
31,
|
|||||||
|
2009
|
2008
|
|||||||
|
Deferred
tax assets
|
||||||||
|
Net operating loss
carryforwards
|
$ | 253,000 | $ | 236,000 | ||||
|
Officer
compensation deductible when paid
|
261,000 | 224,000 | ||||||
|
Less valuation
allowance
|
(514,000 | ) | (460,000 | ) | ||||
|
Net Deferred Tax
Asset
|
$ | - | $ | - | ||||
During
the six months ended June 30, 2009 and the year ended December 31, 2008,
respectively, the valuation allowance for the deferred tax asset increased by
approximately $54,000 and $144,000.
Note
I - Preferred Stock
On March
14, 2007, the Company formally designated a series of Super Preferred Stock of
the Company’s 50,000,000 authorized shares of the capital preferred stock of the
Corporation. The designated Series A Convertible Super Preferred
Stock (the "Series A Super Preferred Stock"), to consist of 5,000,00 shares, par
value $.001 per share, which shall have the following preferences, powers,
designations and other special rights:
|
Voting:
|
Holders
of the Series A Super Preferred Stock shall have ten votes per share held
on all matters submitted to the shareholders of the Company for a vote
thereon. Each holder of these shares shall have the option to
appoint two additional members to the Board of Directors. Each
share shall be convertible into ten (10) shares of common
stock.
|
|
Dividends:
|
The
holders of Series A Super Preferred Stock shall be entitled to receive
dividends or distributions on a pro rata basis with the holders of common
stock when and if declared by the Board of Directors of the
Company. Dividends shall not be cumulative. No
dividends or distributions shall be declared or paid or set apart for
payment on the Common Stock in any calendar year unless dividends or
distributions on the Series A Preferred Stock for such calendar year are
likewise declared and paid or set apart for payment. No
declared and unpaid dividends shall bear or accrue
interest.
|
|
Liquidation:
Preference
|
Upon
the liquidation, dissolution and winding up of the Company, whether
voluntary or involuntary, the holders of the Series A Super Preferred
Stock then outstanding shall be entitled to, on a pro-rata basis with the
holders of common stock, distributions of the assets of the Corporation,
whether from capital or from earnings available for distribution to its
stockholders.
|
The Board
of Directors has the authority, without further action by the shareholders, to
issue, from time to time, preferred stock in one or more series for such
consideration and with such relative rights, privileges, preferences and
restrictions that the Board may determine. The preferences, powers, rights and
restrictions of different series of preferred stock may differ with respect to
dividend rates, amounts payable on liquidation, voting rights, conversion
rights, redemption provisions, sinking fund provisions and purchase funds and
other matters. The issuance of preferred stock could adversely affect the voting
power or other rights of the holders of common stock.
On
October 20, 2003, in conjunction with the formation and incorporation of Signet
Entertainment Corporation, SIG issued 4,000,000 shares of preferred stock to the
incorporating persons. This transaction was valued at
approximately $40,000, which approximates the value of the services
provided.
-11-
Signet
International Holdings, Inc. and Subsidiary
(a
development stage enterprise)
Notes
to Consolidated Financial Statements - Continued
June 30,
2009 and 2008
Note
I - Preferred Stock - Continued
On July
19, 2005, the Company issued 1,000,000 shares of preferred stock to an existing
shareholder and Company officer for services related to the organization and
structuring of the Company and it’s proposed business plan. This
transaction was valued at approximately $10,000, which approximates the value of
the services provided.
Concurrent
with the reverse merger transaction, these shareholders exchanged their Signet
Entertainment Corporation preferred stock for equivalent shares of Signet
International Holdings, Inc. Series A Super Preferred stock, as described
above.
Note
J - Common Stock Transactions
On
October 17, 2003 and November 1, 2003, in connection with the incorporation and
formation of the Company, an aggregate of approximately 3,294,000 shares of
restricted, unregistered shares of common stock and were issued to various
founding individuals. This combined preferred stock and common stock
issuances were collectively valued at approximately $40,810, which approximated
the fair value of the time provided by the individuals and the related
out-of-pocket expenses.
On June
16, 2004 and December 3, 2004, the Company sold, in three separate transactions
to three unrelated individuals, an aggregate 70,000 shares of restricted,
unregistered common stock for $35,000 cash. These shares were sold
pursuant to an exemption from registration under Section 4(2) of the Securities
Act of 1933, as amended, and no underwriter was used any of the three
transactions.
Between
July 20, 2005 and August 26, 2005, Signet Entertainment Corporation sold an
aggregate 57,000 shares of common stock to existing and new shareholders at a
price of $0.01 per share for gross proceeds of approximately $570. As
this selling price was substantially below the “fair value” of comparable
transactions, the Company recognized a charge to operations for consulting
expense equivalent to the difference between the established “fair value” of
$1.00 per share (as determined by the pricing in the September 2005 Private
Placement Memorandum) and the selling price of $0.01 per share.
On
September 9, 2005, the Company commenced the sale of common stock pursuant to a
Private Placement Memorandum in a self-underwritten offering. This
Memorandum is offering for sale to persons who qualify as accredited investors
and to a limited number of sophisticated investors, on a best efforts basis, up
to 2,000,000 of our common shares at $1.00 per share, for anticipated gross
proceeds of $2,000,000. The common shares will be offered through the
Company’s officers and directors on a best-efforts basis. The minimum
investment is $1,000, however, the Company might, at it’s sole discretion,
accept subscriptions for lesser amounts. Funds received from all
subscribers will be released to the Company upon acceptance of the subscriptions
by the Company’s management. Through December 31, 2006, the
Company has sold an aggregate 381,000 shares for gross proceeds of $381,000
under this Memorandum.
On March
31, 2006, the Company repurchased 50,000 shares of common stock from the estate
of a deceased shareholder which purchased said shares for $50,000 cash pursuant
to the aforementioned September 2005 Private Placement Memorandum for $50,000
cash. In June 2006, the Company’s Board of Directors cancelled these
shares and returned them to unissued status.
On June
22, 2006, the Company issued 250,000 shares of unregistered, restricted common
stock, valued at $0.50 per share or $125,000, in payment of
consulting fees. As the agreed-upon value of the services
provided was less than the “fair value” of comparable transactions, the Company
has recognized an additional charge to Consulting Fees equivalent to the
difference between the established “fair value” of $1.00 per share (as
determined by the pricing in the September 2005 Private Placement Memorandum)
and the agreed-upon value of $0.50 per share in the corresponding line item in
the Company’s Statement of Operations.
-12-
Signet
International Holdings, Inc. and Subsidiary
(a
development stage enterprise)
Notes
to Consolidated Financial Statements - Continued
June 30,
2009 and 2008
Note
J - Common Stock Transactions - Continued
On April
16, 2007, the Company issued 270,000 shares of unregistered, restricted common
stock for the acquisition of certain broadcast and other production
rights. These shares were sold pursuant to an exemption from
registration under Section 4(2) of the Securities Act of 1933, as amended, and
no underwriter was used in this transaction.
On May 2,
2007, the Company sold, in a private transaction, 6,800 shares of unregistered,
restricted common stock at a price of $1.00 per share for cash. These
shares were sold pursuant to an exemption from registration under Section 4(2)
of the Securities Act of 1933, as amended, and no underwriter was used in this
transaction.
On May
22, 2007, the Company issued 113,662 shares of unregistered, restricted common
stock for the acquisition of intellectual properties related to literary
works. These shares were sold pursuant to an exemption from
registration under Section 4(2) of the Securities Act of 1933, as amended, and
no underwriter was used in this transaction.
On August
30, 2007, the Company sold, in a private transaction, 12,500 shares of
unregistered, restricted common stock at a price of $1.00 per share for
cash. These shares were sold pursuant to an exemption from
registration under Section 4(2) of the Securities Act of 1933, as amended, and
no underwriter was used in this transaction.
On June
5, 2008, the Company sold, in a private transaction, 3,000 shares of
unregistered, restricted common stock for cash proceeds of $800, which
approximated the fair value and closing quoted price of the Company’s common
stock on the transaction date. These shares were sold pursuant to an
exemption from registration under Section 4(2) of the Securities Act of 1933, as
amended, and no underwriter was used in this transaction.
On July
24, 2008 the Company issued 20,000 shares of unregistered, restricted common
stock as a deposit on and in consideration for a Purchase Option Agreement
executed on July 23, 2008 with a TV distribution and syndication
company. The deposit/option fee will be deducted from the total
100,000 shares of unregistered, restricted common stock to be issued upon
closing of the transaction upon exercise of the option. The
total shares issued and to be issued are part of the terms of the Purchase
Option Agreement that specifies a total purchase price of $3.0 million plus a
management contract to be in place shortly after closing. Terms of
the management contract requires a payment of $20,000 per month to the present
manager/owner. The term of Purchase Option Agreement is one year from
date of execution.
On August
19, 2008, the Company sold, in a private transaction, 5,000 shares of
unregistered, restricted common stock for cash proceeds of $3,000, which
approximated the fair value and closing quoted price of the Company's common
stock on the transaction date. These shares were sold pursuant to an exemption
from registration under Section 4(2) of the Securities Act of 1933, as amended,
and no underwriter was used in this transaction.
On August
22, 2008, the Company sold, in a private transaction, 174,000 shares of
unregistered, restricted common stock for cash proceeds of $55,000, which
approximated the fair value and closing quoted price of the Company's common
stock on the transaction date. These shares were sold pursuant to an exemption
from registration under Section 4(2) of the Securities Act of 1933, as amended,
and no underwriter was used in this transaction.
On May 5,
2009, the Company sold, in a private transaction, 25,000 shares of unregistered,
restricted common stock for cash proceeds of $25,000, which approximated the
fair value and closing quoted price of the Company's common stock on the
transaction date. These shares were sold pursuant to an exemption from
registration under Section 4(2) of the Securities Act of 1933, as amended, and
no underwriter was used in this transaction.
Note
K - Commitments
Leased office
space
The
Company operates from leased office facilities at 205 Worth Avenue, Suite 316
Palm Beach, FL 33480 under an operating lease. The lease agreement
was originally expired to expire in July 2009 and has been subsequently amended
to a month-to-month basis. The lease currently requires monthly
payments of approximately $1,000. The Company is not responsible for
any additional charges for common area maintenance.
-13-
Signet
International Holdings, Inc. and Subsidiary
(a
development stage enterprise)
Notes
to Consolidated Financial Statements - Continued
June 30,
2009 and 2008
Note
K - Commitments
Leased office
space
The
Company also reimburses two non-executive personnel for the use of their
personal home offices, which are not exclusive to the Company’s business, at
approximately $250 per month. These agreements are on a
month-to-month basis.
For the
respective years ended December 31, 2008 and 2007, respectively, the Company
paid or accrued an aggregate of approximately $21,068 and $19,325 for rent under
all of these agreements.
Triple Play Management
Agreement
On
October 23, 2003, Signet Entertainment Corporation, the wholly-owned subsidiary
of the Company, entered into a Management Agreement with Triple Play Media
Management (Triple Play) of Peoria, Arizona. Triple Play is engaged
to be the management company to manage and operate any acquired Signet facility
in the TV and other Media operations market on a permanent basis for Signet for
a period often years (the initial period) with an automatic extension of an
additional ten years unless the dissenting party gives proper
notice.
Upon
Signet's successfully raising the necessary required funding through a secondary
offering, Signet will begin funding the working capital requirements of Triple
Play for a share of Triple Play's profit. The working capital
commitment will be based on mutually agreed budgets and, at the present time,
the company has no requirements for these services.
Big Vision Management
Contract
On July
22, 2005, Signet Entertainment Corporation, the wholly-owned subsidiary of the
Company, entered into a Management Agreement with Big Vision Studios, a Nevada
Limited Liability Company (Big Vision) located in both Las Vegas, Nevada and
Burbank, California whereby Big Vision will be the exclusive supplier of High
Definition Equipment and Studio rental for Signet in future periods after the
completion of a successful secondary public offering of the Company’s securities
to provide sufficient operating capital for the establishment of the Company’s
network. At the present time, the Company has no requirements for
these services.
Option
Agreement
On July
23, 2008, we executed an Option to Purchase Asset Agreement (Agreement) with
Access Media Group, Inc. (a Florida Corporation) dba AMG TV, headquartered in
Jensen Beach, FL, to acquire 100% of the assets, satellite delivery service
contracts, customer service agreements in the USA and the Caribbean, including
the business operations located in Pittsburgh and North New Jersey for an agreed
purchase price is $3 million, payable as set forth in the Agreement, and the
issuance of 100,000 shares of our restricted, unregistered common
stock. The term of our option is one (1) year and expires on July 22,
2009. As consideration for the Agreement, the Company issued 20,000
shares of restricted, unregistered common stock to Access Media Group, Inc. with
a mutually agreed-upon value of $100,000.
The
Company has 180 days to complete the acquisition after serving notice to AMG TV
that the Company intends to exercise the option and is actively pursuing capital
resources in order to exercise the option and integrate these operations
according to the Company’s Business Plan.
Licensing
Agreement
On April
6, 2009, the Company entered into an Exclusive Licensing Agreement (Agreement)
with Kerner Broadcasting Corporation, a Nevada Corporation (KBC) and Signet
Entertainment Corporation, the Company’s wholly-owned
subsidiary. Pursuant to the Agreement, KBC grants to the Company,
through it’s subsidiary, the exclusive, nontransferable right and license to
use, market, sell, and otherwise to commercialize KBC’s 3-D
television technology.
-14-
Part
I - Item 2
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
(1)
Caution
Regarding Forward-Looking Information
Certain
statements contained in this quarterly filing, including, without limitation,
statements containing the words "believes", "anticipates", "expects" and words
of similar import, constitute forward-looking statements. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors that
may cause the actual results, performance or achievements of the Company, or
industry results, to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements.
Such
factors include, among others, the following: international, national and local
general economic and market conditions: demographic changes; the ability of the
Company to sustain, manage or forecast its growth; the ability of the Company to
successfully make and integrate acquisitions; raw material costs and
availability; new product development and introduction; existing government
regulations and changes in, or the failure to comply with, government
regulations; adverse publicity; competition; the loss of significant customers
or suppliers; fluctuations and difficulty in forecasting operating results;
changes in business strategy or development plans;
business disruptions; the ability to attract and retain qualified
personnel; the ability to protect technology; and other factors referenced in
this and previous filings.
Given
these uncertainties, readers of this Form 10-Q and investors are cautioned not
to place undue reliance on such forward-looking statements. The Company
disclaims any obligation to update any such factors or to publicly announce the
result of any revisions to any of the forward-looking statements contained
herein to reflect future events or developments.
(2) Results
of Operations
We had no
revenue for either of the respective six or three month periods ended June 30,
2009 or 2008, respectively.
General
and administrative expenses for the six months ended June 30, 2009
and 2008 were approximately $52,000 and $51,000, respectively. These
costs relate principally to the maintenance of our corporate offices, compliance
with the periodic reporting requirements of the Securities Exchange Act of 1934,
as amended, and continued efforts to implement our business plan.
For the
six months ended June 30, 2009 and 2008, we accrued compensation to our chief
executive officer, Ernest W. Letiziano of $35,000 for each respective
period. We further accrued compensation to non-executive personnel
for their assistance in our efforts to implement our business plan of
approximately $65,000 for each respective period. None of these
persons has made a demand for payment and have agreed to defer payment until
such time that the Company has a viable and functioning business plan with
positive cash flows from operations.
Our net
loss for the six months ended June 30, 2009 and 2008, respectively, was
approximately $(152,000) and $(145,000). Our earnings per share for
the respective quarters ended June 30, 2009 and 2008 were approximately $(0.03)
and $(0.03) based on the respective weighted-average shares issued and
outstanding at the end of the respective period.
The
Company does not expect to generate any meaningful revenue or incur operating
expenses for purposes other than fulfilling the obligations of a reporting
company under the Securities Exchange Act of 1934 unless and until such time
that the Company’s operating subsidiary begins meaningful
operations.
At June
30, 2009 and 2008, respectively, the Company had working capital of
approximately $(163,000) and $(155,000), exclusive of accrued officer and other
compensation. As noted previously, none of these persons has made a
demand for payment and have agreed to defer payment until such time that the
Company has a viable and functioning business plan with positive cash flows from
operations.
(3)
Plan of Business
In March
2007, we began implementation of our initially disclosed business plan relating
to the acquisition of LPTV stations by executing by executing Sale & Share
Exchange Contracts with the LPTV Stations. To date, we have been
presented with several acquisition opportunities; however, we have been
unsuccessful in raising sufficient capital to fulfill the cash requirements to
consummate closing on any one of these potential acquisitions.
-15-
Acquisition of Access Media
Group, Inc. and its Subsidiary, AMG-TV
We have
executed an Option to Purchase Agreement which will allow our acquisition of a
programming distribution and syndication company which is essential to the
success of the Signet plan of establishing our own network and to also offer an
exclusive 3-D TV Network.
AMG-TV
(AMG) currently has programming content that is currently being aired in over
50.0 million television households in the United States. AMG provides
delivery of programming to all of the Caribbean, New Zealand, Germany, Central
and South America and, currently anticipates, a Q3-2009 launch in Asia through
affiliations with over 200 digital full power stations consisting
of independents, national affiliates, cable networks, and satellite
services such as Dish Network and DirecTV on a daily basis. We
believe that AMG’s programming is useful, informative, entertaining and
distinctive that fulfills the entertainment requirements of today’s global
viewing audiences.
AMG
currently holds over 2,000 broadcast property titles at the Pittsburgh
library. A second library of 1,500 feature films and vintage
programming is housed outside of Dallas and the library in New Jersey consists
of 500 music specials and films. These assets are available in
numerous formats.
AMG has a
distribution footprint that includes a potentially unexploited market which
extends from the United States/ Mexican border and passes South through Central
America and extends throughout all of the South American countries to the
southernmost tip of Chile.
The Acquisition of Exclusive
Licensing Rights from Kerner Broadcasting Corporation
Kerner
Broadcasting Corporation (KBC) and its affiliate, Kerner Labs, represent the
current amalgamation of talented professionals their common goal of which is to
design and develop state-of-the-art stereoscopic 3-D hardware and, related
technologies.
Kerner
Labs is affiliated with Kerner Optical LLC, a studio and movie effects group
whose formation and historical background rise from the spinoff of Industrial
Light & Magic (ILM), a special effects company founded and developed by
George Lucas and his team. Kerner's engineers, machinists and
technology experts have been building extraordinary cameras and rigs to
accommodate whatever the ILM photographic effects artists required to create
astounding visual effects imagery in motion pictures.
Studios
and broadcasters are endeavoring to align with a 3-D distribution format
compatible with the existing Digital 2-D pipeline. However, the
competing TV/DVD manufacturers are incorporating different 3-D formats into
their systems or just brand their systems as "3-D
Ready." Kerner Labs has developed a set-top box which decodes
multiple existing 3-D formats for display on a variety of different types and
styles of 3-D monitors from various manufacturers. This converter box
appears to be the hardware preferred by major manufacturers.
Historically,
competing broadcast and replay formats and hardware have taken several years and
multiple versions for the consuming public and various standard setting
organizations to determine the most feasible and/or popular format and delivery
system. With the Kerner technology, it is anticipated that display
manufacturers will be able to display a clear, high quality 3-D TV content and
distribution through the proprietary Kerner 3-D set top converter
box.
The
technology behind this converter box was developed by a group of individuals
with significant experience and focus on 3-D generation that joined Kerner in
order to better focus their energies on developing the highest caliber 3-D
products and technologies to meet the anticipated emerging 3-D
boom. Kerner and its affiliates have applied for and received several
3-D patents and are working on key new technologies that will result in a number
of additional new patents.
As
Signet’s new licensor, Kerner will be in a position to support AMG to
effectively bring Kenner’s cutting-edge 3-D technology to the AMG client base
and consumer homes. This combination will afford Kerner the cost effective
benefit of not having to create an extensive sales and distribution structure,
not to mention having its own TV Network which literally spans the terrestrial
skyscape. Kerner also anticipates development efforts to create
step-ahead technology, improve 3-D and develop more solutions. AMG
will be in the position to grow its brand by offering 3-D TV exclusively into
its markets.
We
anticipate that the acquisition of AMG and the distribution agreement with KBC
will impart crucial benefits for success because we will be able to meet the
needs for supplying content, syndicating and distributing the content, and
realizing the sales in one complete triangle of a scalable
business.
-16-
(4)
Capital Resources and Liquidity
As of
June 30, 2009, we had approximately $33,000 in cash. Our monthly cash
requirements have been reduced to approximately $8,000 per
month. Given our current circumstances, we will continue to have
additional sources of cash to preserve our plan of operation or terminate all
activities.
It is the
belief of management and significant stockholders that they will provide
sufficient working capital necessary to support and preserve the integrity of
the corporate entity. However, there is no legal obligation for
either management or significant stockholders to provide additional future
funding. Further, the Company is at the mercy of future economic
trends and business operations for the Company’s majority stockholder to have
the resources available to support the Company. Should this pledge
fail to provide financing, the Company has not identified any alternative
sources. Consequently, there is substantial doubt about the Company's
ability to continue as a going concern.
As
reflected in the accompanying financial statements, we are in the development
stage with no operations. Our ability to continue as a going concern
is dependent on our ability to raise additional capital and implement our
business plan. The financial statements do not include any
adjustments that might be necessary if we are unable to continue as a going
concern. We have no plans to pay no salaries per month to our sole
officer and employee until we are properly funded. We intend to raise additional
capital to continue our operations although there is no assurance we will be
successful. Currently we have no material commitments to make capital
expenditures.
Our need
for capital may change dramatically as a result of any business acquisition or
combination transaction. There can be no assurance that we will
identify any such business, product, technology or company suitable for
acquisition in the future. Further, there can be no assurance that we
would be successful in consummating any acquisition on favorable terms or that
it will be able to profitably manage the business, product,
technology or company it acquires.
Management
believes that actions presently being taken to obtain additional funding and
implement its strategic plans provide the opportunity for us to continue as a
going concern. The Company is still in the process of developing and
implementing it’s business plan and raising additional capital. As
such, the Company is considered to be a development stage company.
(5)
Critical
Accounting Policies
Our
financial statements and related public financial information are based on the
application of accounting principles generally accepted in the United States
(“GAAP”). GAAP requires the use of estimates; assumptions, judgments
and subjective interpretations of accounting principles that have an impact on
the assets, liabilities, revenue and expense amounts reported. These
estimates can also affect supplemental information contained in our external
disclosures including information regarding contingencies, risk and financial
condition. We believe our use if estimates and underlying accounting
assumptions adhere to GAAP and are consistently and conservatively
applied. We base our estimates on historical experience and on
various other assumptions that we believe to be reasonable under the
circumstances. Actual results may differ materially from these
estimates under different assumptions or conditions. We continue to monitor
significant estimates made during the preparation of our financial
statements.
Our
significant accounting policies are summarized in Note D of our financial
statements. While all these significant accounting policies impact
our financial condition and results of operations, we view certain of these
policies as critical. Policies determined to be critical are those policies that
have the most significant impact on our financial statements and require
management to use a greater degree of judgment and estimates. Actual
results may differ from those estimates. Our management believes that given
current facts and circumstances, it is unlikely that applying any other
reasonable judgments or estimate methodologies would cause effect on our
consolidated results of operations, financial position or liquidity for the
periods presented in this report.
Item
3 - Quantitative and Qualitative Disclosures About Market Risk
The
Company may be subject to certain market risks, including changes in interest
rates and currency exchange rates. At the present time, the Company
does not undertake any specific actions to limit those exposures.
-17-
Item
4 - Controls and Procedures
(a) Evaluation
of Disclosure Controls and Procedures
The
Company maintains disclosure controls and procedures that are designed to ensure
that information required to be disclosed in its Exchange Act reports is
recorded, processed, summarized and reported within the time periods specified
in the U. S. Securities and Exchange Commission's rules and forms, and that such
information is accumulated and communicated to the Company's management,
including the Company's Chief Executive Officer and Chief Financial Officer, as
appropriate, to allow timely decisions regarding required disclosure. Management
necessarily applied its judgment in assessing the costs and benefits of such
controls and procedures, which, by their nature, can provide only reasonable
assurance regarding management's control objectives.
The
Company carried out an evaluation, under the supervision and with the
participation of its management, including its Chief Executive Officer and Chief
Financial Officer, on the effectiveness of the design and operation of its
disclosure controls and procedures pursuant to Exchange Act Rules 13a-15 and
15d-15 as of the end of the period covered by this report. Based upon
that evaluation, the Company's Chief Executive Officer and Chief Financial
Officer concluded that the Company's disclosure controls and procedures are
effective in timely alerting them to information relating to the Company
required to be included in the Company's Exchange Act reports.
While the
Company believes that its existing disclosure controls and procedures have been
effective to accomplish their objectives, the Company intends to continue to
examine, refine and document its disclosure controls and procedures and to
monitor ongoing developments in this area.
(b)
Changes
in Internal Controls
During
the quarter ended June 30, 2009, there were no changes (including corrective
actions with regard to significant deficiencies or material weaknesses) in the
Company's internal control over financial reporting that have materially
affected, or are reasonably likely to materially affect, the Company's internal
control over financial reporting.
Part
II - Other Information
Item
1 - Legal Proceedings
From time
to time, as we acquire operating properties, we may become subject to various
legal proceedings that are incidental to the ordinary conduct of its
business. Although, to date, there have been no such proceedings, we
do not anticipate that any future proceedings, either individually or in the
aggregate, will become material to our business or be likely to result in a
material adverse effect on our future operating results, financial condition, or
cash flows.
Item
2 - Recent Sales of Unregistered Securities and Use of Proceeds
On May 5,
2009, the Company sold, in a private transaction, 25,000 shares of unregistered,
restricted common stock for cash proceeds of $25,000, which approximated the
fair value and closing quoted price of the Company's common stock on the
transaction date. These shares were sold pursuant to an exemption from
registration under Section 4(2) of the Securities Act of 1933, as amended, and
no underwriter was used in this transaction. The proceeds from this
transaction were used to support operations and for working
capital.
-18-
Item
3 - Defaults on Senior Securities
None
Item
4 - Submission of Matters to a Vote of Security Holders
The
Company has held no regularly scheduled, called or special meetings of
shareholders during the reporting period.
Item
5 - Other Information
None
Item
6 - Exhibits and Reports on Form 8-K
Exhibits
|
|
31.1
|
Certification
pursuant to Section 302 of Sarbanes-Oxley Act of
2002
|
|
|
32.1
|
Certification
pursuant to Section 906 of Sarbanes-Oxley Act of
2002.
|
-19-
SIGNATURES
In
accordance with the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
| Signet International Holdings, Inc. | |||
|
Dated: August
11, 2009
|
By:
|
/s/ Ernest W. Letiziano | |
| Ernest W. Letiziano | |||
| President and Director | |||