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