x
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ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Eastern Resources, Inc.
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|||
(Exact name of registrant as specified in its charter)
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|||
Delaware
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45-0582098
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(State or other jurisdiction of incorporation or organization)
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(IRS Employer Identification No.)
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4 Park Ave., Suite 16K, New York, NY
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10016
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(Address of principal executive offices)
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(Postal Code)
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Large Accelerated Filer ¨
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Accelerated
Filer ¨
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Non-Accelerated Filer ¨
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Smaller
reporting company x
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(Do not check if a smaller reporting company)
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Page
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||
FORWARD-LOOKING
STATEMENTS
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3
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|
PART
I
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4
|
|
ITEM
1.
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BUSINESS
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4
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ITEM
1A.
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RISK
FACTORS
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11
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ITEM
1B.
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UNRESOLVED
STAFF COMMENTS
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22
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ITEM
2.
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PROPERTIES
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22
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ITEM
3.
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LEGAL
PROCEEDINGS
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22
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ITEM
4.
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SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS
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22
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PART
II
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22
|
|
ITEM
5.
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MARKET
FOR REGISTRANT’S COMMON EQUITY, RELATED
|
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STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY
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||
SECURITIES
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22
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|
ITEM
6.
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SELECTED
FINANCIAL DATA
|
23
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ITEM
7.
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MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL
|
|
CONDITION
AND RESULTS OF OPERATIONS
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23
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|
ITEM
8.
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FINANCIAL
STATEMENTS AND SUPPLEMENTAL DATA
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26
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ITEM
9.
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CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
|
|
ACCOUNTING
AND FINANCIAL DISCLOSURE
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26
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ITEM
9A.[T]
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CONTROLS AND PROCEDURES | 26 |
ITEM
9B.
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OTHER
INFORMATION
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27
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PART
III
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28
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ITEM
10.
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DIRECTORS,
EXECUTIVE OFFICERS, AND CORPORATE
|
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GOVERNANCE
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28
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ITEM
11.
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EXECUTIVE
COMPENSATION
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30
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ITEM
12.
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SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
|
|
MANAGEMENT
AND RELATED STOCKHOLDER MATTERS
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31
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|
ITEM
13.
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CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND
|
|
DIRECTOR
INDEPENDENCE
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33
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|
ITEM
14.
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PRINCIPAL
ACCOUNTANT FEES AND SERVICES
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34
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PART
IV
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35
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ITEM
15.
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EXHIBITS
AND FINANCIAL STATEMENT SCHEDULES
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35
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ITEM
1.
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BUSINESS
|
Title (Distributor)
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Worldwide Box
Office (in
millions)
|
Budget
(in millions)
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Gross
(in millions)
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|||||||
The
Blair Witch Project (Artisan Entertainment)
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$
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248.6
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$
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0.06
|
$
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248.54
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||||
Chasing
Amy (Miramax)
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$
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12.0
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*
|
$
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0.25
|
$
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11.75
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|||
Crash
(Lions Gate)
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$
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98.4
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$
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6.5
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$
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91.9
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||||
The
Full Monty (Fox Searchlight)
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$
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257.9
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$
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3.5
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$
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254.4
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||||
In
the Company of Men (Sony Classics)
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$
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2.9
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*
|
$
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0.03
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$
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2.87
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|||
Juno
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$
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231.4
|
$
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7.5
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$
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143.5
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||||
Kids
(Miramax)
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$
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7.4
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*
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$
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1.5
|
$
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5.9
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|||
Memento
(Newmarket Group)
|
$
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39.7
|
$
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9.0
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$
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30.7
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||||
Monster’s
Ball (Lions Gate)
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$
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44.9
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$
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4.0
|
$
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40.9
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||||
My
Big Fat Greek Wedding (IFC)
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$
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368.7
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$
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5.0
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$
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363.7
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||||
Napoleon
Dynamite (Fox Searchlight)
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$
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46.1
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$
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0.4
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$
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45.7
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||||
Open
Water (Lions Gate)
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$
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54.7
|
$
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0.5
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$
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54.2
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||||
Pi
(Artisan Entertainment)
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$
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3.2
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*
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$
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0.06
|
$
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3.14
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|||
Saw
II (Lions Gate)
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$
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147.7
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$
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4.0
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$
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143.7
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||||
Sex,
Lies, & Videotape (Miramax)
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$
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24.7
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*
|
$
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1.2
|
$
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23.5
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|||
Sling
Blade (Miramax)
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$
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24.4
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*
|
$
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1.0
|
$
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23.4
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|||
Swingers
(Miramax)
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$
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4.6
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*
|
$
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0.2
|
$
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4.4
|
|||
The
Usual Suspects (Gramercy Pictures)
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$
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23.3
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*
|
$
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6.0
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$
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17.3
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|||
Welcome
to the Dollhouse (Sony Classics)
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$
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4.6
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*
|
$
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0.8
|
$
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3.8
|
|||
Whale
Rider (Newmarket Group)
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$
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41.4
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$
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3.5
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$
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37.9
|
||||
You
Can Count on Me (Paramount Classics)
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$
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11.0
|
$
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1.2
|
$
|
9.8
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A.
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Pre-Production
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B.
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Production
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C.
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Post-Production
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D.
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Marketing
|
|
·
|
The
film’s production will be announced in the production charts that are
carried in the industry’s trade publications, i.e., The Hollywood Reporter
and Variety. These charts are read by bankers, distributors and
the film community regularly and are a good source to begin positive
word-of-mouth.
|
|
·
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Early
publicity will be generated as key casting announcements and other
production elements come into place. Periodic press releases
will be sent to the trades and other local and national publication for
“stories” on the development of the
production.
|
|
·
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Work
will begin on a press kit and a unit photographer will be
hired. These will be important tools for the eventual
advertising and publicity of the
film.
|
|
·
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Early
production stories will be supplied to major newspaper and magazines in
order to establish early name recognition. Topics will include
stories on cast and crew, locations, soundtracks, independent filmmaking
and more.
|
|
·
|
A
video team will be hired to shoot “behind-the-scenes” footage, which will
be used for the future electronic press kit. These kits
typically include interviews of the cast, the director and the producers
as well as the film’s trailer and clips. It represents an
essential marketing tool to help develop the film’s profile with the
electronic media.
|
|
·
|
The
producer will finalize the selection of musical talent and secure musical
rights if necessary.
|
|
·
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Distributors
will be invited into the editing room as a way to involve them in the
process and generate advance interest in the
film.
|
|
·
|
The
press kit will be finalized.
|
|
·
|
The
films will be submitted to numerous film festivals, including, but not
limited to:
|
|
·
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The
Sundance Film Festival
|
|
·
|
The
American Film Market
|
|
·
|
The
Berlin International Film Festival
|
|
·
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The
Toronto International Film Festival and
Market
|
|
·
|
The
Telluride Film Festival
|
|
·
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The
New Directors/New Film Series presented by the Film Society of Lincoln
Center
|
|
·
|
The
Independent Feature Film Market
|
|
·
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The
Taos Film Festival
|
|
·
|
The
Hamptons Film Festival
|
|
·
|
The
Tribeca Film Festival
|
|
·
|
A
rough cut of the film’s trailer will be
assembled.
|
|
·
|
Theatrical
distribution deals will be closely examined, particularly regarding print
and advertising commitments.
|
|
·
|
The
producer will work closely with distributors to create an advertising
campaign and promotional platform for the
film
|
E.
|
Distribution
|
They include:
|
A division of:
|
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Miramax
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Walt
Disney Corporation
|
|
Sony Pictures Classics
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Sony
Pictures Entertainment
|
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Paramount Vantage
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Paramount
Pictures/Viacom
|
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Fox Searchlight Pictures
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Twentieth
Century Fox Corporation
|
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Focus Features
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Universal
Pictures
|
F.
|
Competition
|
ITEM
1A.
|
RISK
FACTORS
|
|
·
|
talent
and crew availability;
|
|
·
|
financing
requirements;
|
|
·
|
distribution
strategy, including the time of the year and the number of venues in which
the production will be shown;
|
|
·
|
the
number, quality and acceptance of other competing films released into the
marketplace at or near the same
time;
|
|
·
|
critical
reviews;
|
|
·
|
the
availability of alternative forms of entertainment and leisure time
activities;
|
|
·
|
piracy
and unauthorized recording, transmission and distribution of motion
pictures;
|
|
·
|
general
socioeconomic conditions and political
events;
|
|
·
|
weather
conditions; and
|
|
·
|
other
tangible and intangible factors.
|
|
·
|
personal
taste
|
|
·
|
perceived
marketability
|
|
·
|
cost
of purchasing the rights to the
film
|
|
·
|
the
film’s genre
|
|
·
|
the
film’s director
|
|
·
|
the
attached talent and its performance
|
|
·
|
the
story line
|
|
·
|
success
at festivals
|
|
·
|
overall
quality of the film
|
|
·
|
fluctuating
foreign exchange rates;
|
|
·
|
differing
cultural tastes and attitudes;
|
|
·
|
financial
instability and increased market concentration of buyers in foreign
television markets;
|
|
·
|
differing
degrees of protection for intellectual
property;
|
|
·
|
laws
and policies affecting trade, investment and taxes, including laws and
policies relating to the repatriation of funds and withholding taxes, and
changes in these laws;
|
|
·
|
changes
in local regulatory requirements, including restrictions on
content;
|
|
·
|
the
instability of foreign economies and governments;
and
|
|
·
|
war
and acts of terrorism.
|
|
·
|
meet
our capital needs;
|
|
·
|
expand
our systems effectively or efficiently or in a timely
manner;
|
|
·
|
allocate
our human resources optimally;
|
|
·
|
identify
and hire qualified employees or retain valued employees;
or
|
|
·
|
incorporate
effectively the components of any business that we may acquire in our
effort to achieve growth.
|
ITEM
1B.
|
UNRESOLVED
STAFF COMMENTS
|
ITEM
2.
|
PROPERTIES
|
ITEM
3.
|
LEGAL
PROCEEDINGS
|
ITEM
4.
|
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY
HOLDERS
|
Quarter Ended
|
High Bid
|
Low Bid
|
||||||
December
31, 2008
|
$ | 0.25 | $ | 0.10 | ||||
September
30, 2008
|
N/A | N/A |
ITEM
6.
|
SELECTED
FINANCIAL DATA
|
ITEM
8.
|
FINANCIAL
STATEMENTS AND SUPPLEMENTAL DATA
|
ITEM
9B.
|
OTHER
INFORMATION
|
Name
|
Positions Held
|
Age
|
||
Thomas H. Hanna, Jr.
|
President, Treasurer and Director
|
43
|
||
Dylan Hundley
|
Vice President, Secretary and Director
|
38
|
||
Kristie Rubendunst
|
Director
|
55
|
ITEM
11.
|
EXECUTIVE
COMPENSATION
|
Name and Principal
Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-
Equity
Incentive
Plan
Compen-
sation ($)
|
Change in
Pension
Value
and
Non-
qualified
Deferred
Compen-
sation
Earnings
($)
|
All
Other
Compen-
sation ($)
|
Total
($)
|
||||||||||||||||||||||||
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
||||||||||||||||||||||||
Thomas
H. Hanna,
|
2008(1)
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
Jr.,
Chief Executive
|
2007(1)
|
0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
and
Financial
|
|||||||||||||||||||||||||||||||||
Officer
|
|
·
|
each
person or entity known by us to be the beneficial owner of more than 5% of
our common stock;
|
|
·
|
each
of our directors;
|
|
·
|
each
of our executive officers; and
|
|
·
|
all
of our directors and executive officers as a
group.
|
Name and Address of
Beneficial Owner(3)
|
Title of Class
|
Amount and
Nature
of Beneficial
Ownership(1)
|
Percentage
of
Class(2)
|
|||||
Thomas H. Hanna, Jr.
|
Common Stock,
$0.00001 par value
|
5,755,000
shares - Direct
|
27.9 | % | ||||
Dylan Hundley
|
Common Stock,
$0.00001 par value
|
5,751,000
shares - Direct
|
27.9 | % | ||||
Kristie Rubendunst
|
Common Stock,
$0.00001 par value
|
0
shares
|
0 | |||||
All
officers and directors as a group (3 persons)
|
Common Stock,
$0.00001 par value
|
11,506,000
shares
|
55.8 | % |
|
(1)
|
As
used herein, the term beneficial ownership with respect to a security is
defined by Rule 13d-3 under the Securities Exchange Act of 1934 as
consisting of sole or shared voting power (including the power to vote or
direct the vote) and/or sole or shared investment power (including the
power to dispose or direct the disposition of) with respect to the
security through any contract, arrangement, understanding, relationship or
otherwise, including a right to acquire such power(s) during the next 60
days. Unless otherwise noted, beneficial ownership consists of
sole ownership, voting and investment
rights.
|
|
(2)
|
There
were 20,629,000 shares of our common stock issued and outstanding on March
27, 2009.
|
|
(3)
|
The
address for each of the named beneficial owners of our common stock is c/o
Eastern Resources, Inc., 4 Park Avenue, Suite 16K, New York, NY
10016.
|
Fee Category
|
Fiscal year ended
December 31, 2008
|
Fiscal year ended
December 31, 2007
|
||||||
Audit
fees (1)
|
40,000 | 25,000 | ||||||
Audit-related
fees (2)
|
6,000 | 0 | ||||||
Tax
fees (3)
|
0 | 0 | ||||||
All
other fees (4)
|
0 | 0 | ||||||
Total
fees
|
46,000 | 25,000 |
(1)
|
Audit
fees consist of fees incurred for professional services rendered for the
audit of consolidated financial statements, for reviews of our interim
consolidated financial statements included in our quarterly reports on
Form 10-QSB and for services that are normally provided in connection with
statutory or regulatory filings or
engagements.
|
(2)
|
Audit-related
fees consist of fees billed for professional services that are reasonably
related to the performance of the audit or review of our consolidated
financial statements, but are not reported under “Audit
fees.”
|
(3)
|
Tax
fees consist of fees billed for professional services relating to tax
compliance, tax planning, and tax
advice.
|
(4)
|
All
other fees consist of fees billed for all other
services.
|
Financial Statements
|
Page
|
|
Report
of Independent Registered Public Accounting Firm
|
F-2
|
|
Consolidated
Balance Sheets as of December 31, 2008 and 2007
|
F-3
|
|
Consolidated
Statements of Operations for the years ended December 31, 2008 and
2007
|
||
and
for the period from Inception (March 15, 2007) to December 31,
2008
|
F-4
|
|
Consolidated
Statements of Changes in Stockholders’ Equity (Deficit) for the period
from
|
||
Inception
(March 15, 2007) to December 31, 2008
|
F-5
|
|
Consolidated
Statements of Cash Flows for the years ended December 31, 2008 and
2007
|
||
and
for the period from Inception (March 15, 2007) to December 31,
2008
|
F-6
|
|
Notes
to Consolidated Financial Statements
|
F-7 – F-11
|
|
•
|
should
not in all instances be treated as categorical statements of fact, but
rather as a way of allocating the risk to one of the parties if those
statements prove to be inaccurate;
|
|
•
|
have
been qualified by disclosures that were made to the other party in
connection with the negotiation of the applicable agreement, which
disclosures are not necessarily reflected in the
agreement;
|
|
•
|
may
apply standards of materiality in a way that is different from what may be
viewed as material to you or other investors;
and
|
|
•
|
were
made only as of the date of the applicable agreement or such other date or
dates as may be specified in the agreement and are subject to more recent
developments.
|
Exhibit No.
|
SEC
Report
Reference
No.
|
Description
|
||
3.1
|
3.1
|
Articles
of Incorporation of Registrant (1)
|
||
3.2
|
3.2
|
By-Laws
of Registrant (1)
|
||
10.1
|
10.1
|
Literary
Purchase Agreement, dated April 1, 2007, among Buzz Kill, Inc. and
Seasmoke, Inc. f/s/o Steven Kampmann and Matt Smollon (1)
|
||
10.2
|
10.2
|
Director
Agreement, dated April 13, 2007, between Buzz Kill, Inc. and Seasmoke,
Inc.
(1)
|
||
10.3
|
10.3
|
Memorandum
of Agreement, dated April 17, 2007, between Dylan Hundley and Buzz Kill,
Inc. (1)
|
||
10.4
|
10.4
|
Investment
Agreement, dated May 1, 2007, between Buzz Kill, Inc. and Eastern
Resources, Inc. (1)
|
||
10.5
|
10.5
|
Producer
Agreement, dated August 1, 2007, between Buzz Kill, Inc. and
Thomas Hanna (1)
|
||
10.6
|
10.9
|
Form
of 10% Note Series issued by Buzz Kill, Inc. (1)
|
||
14.1
|
*
|
Code
of Ethics
|
||
21
|
*
|
List
of Subsidiaries
|
||
31.1
/ 31.2
|
*
|
Rule
13(a)-14(a)/15(d)-14(a) Certification of Principal Executive and Financial
Officer
|
||
32.1
/ 32.2
|
*
|
Rule
1350 Certification of Chief Executive and Financial
Officer
|
EASTERN RESOURCES, INC.
|
||
Dated: March 30, 2009
|
By:
|
/s/ Thomas H. Hanna, Jr.
|
Thomas H. Hanna, Jr., President and
|
||
Principal Executive Officer
|
/s/ Thomas H. Hanna, Jr.
|
Thomas H. Hanna, Jr., President, Principal Executive
Officer, Principal Financial and Accounting Officer and
Director
|
/s/ Dylan Hundley
|
Dylan Hundley, Director
|
/s./ Kristie Rubendunst
|
Kristie Rubendunst, Director
|
Page
|
|
Report
of Independent Registered Public Accounting Firm
|
F-2
|
Consolidated
Balance Sheets as of December 31, 2008 and 2007
|
F-3
|
Consolidated
Statements of Operations for the years ended December 31, 2008 and 2007
and for the period from Inception (March 15, 2007) to December 31,
2008
|
F-4
|
Consolidated
Statements of Changes in Stockholders’ Equity (Deficit) for the period
from Inception (March 15, 2007) to December 31, 2008
|
F-5
|
Consolidated
Statements of Cash Flows for the years ended December 31, 2008 and 2007
and for the period from Inception (March 15, 2007) to December 31,
2008
|
F-6
|
Notes
to Consolidated Financial Statements
|
F-7 – F-11
|
/s/ Sherb & Co., LLP
|
|
Sherb
& Co., LLP
|
|
Certified
Public Accountants
|
December 31, 2008
|
December 31, 2007
|
|||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash
|
$ | 15,056 | $ | 75,768 | ||||
Total
current assets
|
15,056 | 75,768 | ||||||
Capitalized
film costs
|
1,271,611 | 1,216,908 | ||||||
TOTAL
ASSETS
|
$ | 1,286,667 | $ | 1,292,676 | ||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable and accrued expenses
|
$ | 11,532 | $ | 9,100 | ||||
Loan
payable-stockholder
|
40,000 | 40,000 | ||||||
Compensation
payable
|
355,462 | 355,462 | ||||||
Total
current liabilities
|
406,994 | 404,562 | ||||||
NOTES
PAYABLE
|
208,422 | 189,085 | ||||||
STOCKHOLDERS'
EQUITY:
|
||||||||
Preferred
Stock, $.001 par value,
|
||||||||
5,000,000
shares authorized; none issued
|
||||||||
Common
Stock, $.001 par value,
|
||||||||
300,000,000
shares authorized; 20,629,000 and 20,029,000 issued and
|
||||||||
outstanding
at December 31, 2008 and 2007, respectively
|
20,629 | 20,029 | ||||||
Additional
paid in capital
|
903,771 | 844,371 | ||||||
Deficit
accumulated in the development stage
|
(253,149 | ) | (153,871 | ) | ||||
Subscriptions
receivable
|
- | (11,500 | ) | |||||
TOTAL
STOCKHOLDERS' EQUITY
|
671,251 | 699,029 | ||||||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
$ | 1,286,667 | $ | 1,292,676 |
For the Year
|
From Inception
|
From Inception
|
||||||||||
Ending
|
(March 15, 2007) to
|
(March 15, 2007) to
|
||||||||||
December 31, 2008
|
December 31, 2007
|
December 31, 2008
|
||||||||||
Revenues
|
$ | - | $ | - | $ | - | ||||||
Operating
expenses
|
||||||||||||
General
and administrative
|
101,609 | 155,563 | 257,172 | |||||||||
Total
operating expenses
|
101,609 | 155,563 | 257,172 | |||||||||
Net
loss before other income
|
(101,609 | ) | (155,563 | ) | (257,172 | ) | ||||||
Interest
Income
|
2,331 | 1,692 | 4,023 | |||||||||
Net
loss
|
$ | (99,278 | ) | $ | (153,871 | ) | $ | (253,149 | ) | |||
Basic
and diluted earnings per share
|
$ | (0.00 | ) | $ | (0.01 | ) | ||||||
Weighted
average number of common shares outstanding - Basic and
diluted
|
20,375,849 | 17,594,600 |
Additional
|
Deficit Accumulated
|
Stock
|
Total
|
|||||||||||||||||||||
Common stock
|
Common stock
|
Paid-in
|
During
|
Subscription
|
Stockholders'
|
|||||||||||||||||||
Shares
|
Amount
|
Capital
|
Development Stage
|
Receivable
|
Equity
|
|||||||||||||||||||
Balance,
March 15, 2007 (Inception)
|
- | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||
Stock
issued to founders at par
|
11,500,000 | 11,500 | - | - | (11,500 | ) | - | |||||||||||||||||
Stock
issued for cash at $.10 per share
|
8,529,000 | 8,529 | 844,371 | - | - | 852,900 | ||||||||||||||||||
Net
loss
|
- | - | - | (153,871 | ) | - | (153,871 | ) | ||||||||||||||||
Balance,
December 31, 2007
|
20,029,000 | 20,029 | 844,371 | (153,871 | ) | (11,500 | ) | 699,029 | ||||||||||||||||
Stock
issued for cash at $.10 per share
|
600,000 | 600 | 59,400 | - | - | 60,000 | ||||||||||||||||||
Write-off
of subscription receivable
|
- | - | - | - | 11,500 | 11,500 | ||||||||||||||||||
Net
loss
|
- | - | - | (99,278 | ) | - | (99,278 | ) | ||||||||||||||||
Balance,
December 31, 2008
|
20,629,000 | $ | 20,629 | $ | 903,771 | $ | (253,149 | ) | $ | - | $ | 671,251 |
For the Year
|
From Inception
|
From Inception
|
||||||||||
Ending
|
(March 15, 2007) to
|
(March 15, 2007) to
|
||||||||||
December 31, 2008
|
December 31, 2007
|
December 31, 2008
|
||||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
Net
loss
|
$ | (99,278 | ) | $ | (153,871 | ) | $ | (253,149 | ) | |||
Adjustments to reconcile net loss
to net cash
used in operating activities:
|
- | |||||||||||
Increase
in film costs
|
(59,312 | ) | (1,216,908 | ) | (1,276,220 | ) | ||||||
Increase
in capitalized interest
|
4,609 | 29,085 | 33,694 | |||||||||
Increase in
accounts payable and accrued expenses
|
2,432 | 9,100 | 11,532 | |||||||||
Officer
stock compensation
|
11,500 | - | 11,500 | |||||||||
Increase
in compensation payable
|
- | 355,462 | 355,462 | |||||||||
NET
CASH USED IN OPERATING ACTIVITIES
|
(140,049 | ) | (977,132 | ) | (1,117,181 | ) | ||||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
Proceeds
from loans payable
|
- | 160,000 | 160,000 | |||||||||
Proceeds
from loan payable-shareholder
|
- | 40,000 | 40,000 | |||||||||
Increase
in note payable accrued interest
|
19,337 | - | 19,337 | |||||||||
Proceeds
from issuance of common stock
|
60,000 | 852,900 | 912,900 | |||||||||
NET
CASH PROVIDED BY FINANCING ACTIVITIES
|
79,337 | 1,052,900 | 1,132,237 | |||||||||
INCREASE
(DECREASE) IN CASH
|
(60,712 | ) | 75,768 | 15,056 | ||||||||
CASH-BEGINNING
OF PERIOD
|
75,768 | - | - | |||||||||
CASH-END
OF PERIOD
|
$ | 15,056 | $ | 75,768 | $ | 15,056 | ||||||
CASH
PAID FOR:
|
||||||||||||
Interest
|
$ | - | $ | - | $ | - | ||||||
Income
Taxes
|
$ | - | $ | - | $ | - |
Benefit
computed at statutory rate
|
$
|
39,600
|
||
Permanent difference
|
(4,600
|
)
|
||
Income
tax benefit not utilized
|
(35,000
|
)
|
||
Net
income tax benefit
|
$
|
-
|
Tax
benefit of net operating loss carryforward
|
$
|
86,100
|
||
Valuation
allowance
|
(86,100
|
)
|
||
Net
deferred tax asset recorded
|
$
|
-
|
(a)
|
On
April 17, 2007, Ms. Hundley entered into a memorandum agreement with the
Company pursuant to which Ms. Hundley agreed to introduce Buzz Kill to
third parties who may be interested in lending or investing or in any
other way financing all or a portion of the development and / or
production of our film, BuzzKill. Under the
agreement, Ms. Hundley is entitled to the following payments (i) $40,000
in finder’s fees, of which $20,000 is deferred, (ii) $50,000 in deferred
compensation for her producer services and (iii) contingent compensation
in an amount equal to 5% of the “net proceeds” of the
film.
|
|
|
(b)
|
On August 1, 2007, Mr. Hanna
entered into a producer agreement with Buzz Kill, Inc. pursuant to which
Mr. Hanna will provide preparation, production and post-production
services in connection with the film, BuzzKill. Mr. Hanna’s compensation under
the agreement included (a) $50,000, of which $25,000 remains unpaid at
December 31, 2008, (b) a deferral in the amount of $150,000 and (c) the
remaining “net proceeds” generated by the film after deducting
“off-the-top” of all third party profit
participations.
|
|
|
(c)
|
On April 1, 2007, the Company
agreed to purchase all rights, title and interests in the screenplay
(“BuzzKill”). The initial consideration was $12,500 and a deferral of
$25,462. The Company is contingently obligated for 7% of the net proceeds.
If the picture is released as a theatrical motion picture and the box
office receipts from exhibition in “North America” reach or exceed
$15,000,000, the Company will pay the seller $25,000 and an additional
$25,000 for each additional $15,000,000 in receipts
thereafter.
|
|
|
(d)
|
On April 13, 2007, the Company
engaged the services of a director for the screenplay “BuzzKill”. Agreed upon compensation
amounted to $105,000, of which $20,000 was paid, $35,000 was due at
December 31, 2008 and $50,000 was deferred. Additional compensation is
payable at 5% of the net proceeds. If the picture is released as a
theatrical motion picture and box office receipts reach or exceed
$15,000,000, the Company will pay the director $25,000 and an additional
$25,000 for each $15,000,000 in receipts
thereafter.
|
(a)
|
Ms
Hundley, Vice President
|
$
|
70,000
|
||
(b)
|
Mr
Hanna, President.
|
175,000
|
|||
(c)
|
Story
and author’s rights
|
25,462
|
|||
(d)
|
Director
|
85,000
|
|||
$
|
355,462
|