Item 3.02. Unregistered Sales of
In order to obtain funds to cover a portion of its past operating deficit, the
Registrant has raised approximately
Also for the purpose of covering a portion of the Registrant's operating
deficit,
The above issuances were made in reliance on an exemption from registration
under Section 4(a)(2) of the Securities Act of 1933 (the "Securities Act").
None of the issuances involved a "a public offering" within the meaning of
Section 4(a)(2) of the Securities Act: (i) the Registrant did not engage in any
general solicitation or advertising to market the securities; (ii) each
purchaser was provided the opportunity to ask questions and receive answers from
the Registrant regarding the Registrant and the issuance; (iii) the securities
were issued to persons with knowledge and experience in financial and business
maters so that he or she is capable of evaluating the merits of an investment in
the Registrant; and (iv) the recipients received "restricted securities" that
include a restrictive legend on the certificate, which legend restricts the
shares from being transferred except pursuant to a registration statement that
is effective with the
Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
The Board of Directors of the Registrant has amended Section 3.9 of the
Registrant's Bylaws to change the notice requirement for a Special meeting of
the Board from ten days to two days. This amendment was approved by a written
Consent of Directors on
Item 8.01. Other Events.
The information in this Item 8.01 is neither an offer of securities nor the solicitation of an offer to purchase or sell securities. This information is intended to provide updated information concerning the Registrant.
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Summary Description of Business of Registrant.
As previously reported, the Registrant has acquired a number of media rights
from
The media rights also include rights to the plan and concept for a virtual film studio which is intended to constitute a platform for actors, producers, writers, managers, agents, casting agents and others to meet in a virtual setting to conduct business and other activities. The Registrant is in the process of developing and building this virtual studio.
Music Recordings. All four recording artists referred to above have single
records that the Company currently is attempting to market and promote through
radio promotion and social media. These recording artists are Black Pontiac,
Films. As of
Subject to many of the same uncertainties including Covid-19 and obtaining
funding, the Registrant anticipates that two other films (currently designated
as "Unchain My Heart" and "Curse of
Television Shows. Writing for a Television (TV) show currently referred to as
"Cyclone" has been completed, and pre-production activities are scheduled to be
completed by the end of
Pre-production activities for another TV show (currently designated as "Celebrity Face-Off"), are underway with the primary remaining activity to be casting of contestants. Subject to any disruption from the Covid pandemic, the Registrant plans to begin shooting episodes in the third quarter of 2021. At that time, the TV network that will be purchasing the show will provide funding for the actual production activities.
With respect to a third TV show (currently designated as "Infusion"), the Registrant has completed production of 13 episodes and has engaged a TV sales marketing company to attempt to sell the rights to that show in a number of different countries. There is no assurance that the TV sales marketing company will be successful in selling these rights.
The fourth TV show (currently designated as "The Philanthropist") is in more preliminary stages of development than the other three TV shows described above.
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Other Activities. As referred to above, the Registrant also is in the process of attempting to continue to develop and build its virtual studio, for which significant additional expenditures are needed and for which there are no revenues anticipated in the near future.
The Registrant also intends to attempt to create and develop additional film, TV and music opportunities.
Financial Circumstances of the Registrant.
At the present time, the Registrant's only incoming operating revenues are from
certain of its music recording distribution activities, but these revenues are
not sufficient to cover the Registrant's ongoing operating costs, and the
Registrant has no other existing resources from which to fund its operating
costs. To date, the excess of operating costs over revenues has been funded by
a
The Registrant is in the process of a receiving a payment of approximately
As stated in Item 3.02 of this Report, in order to obtain funds to cover a
portion of the past operating deficit, the Registrant raised approximately
At the present time, the Registrant does not have sufficient financial resources to fully pursue its business plan. The Registrant is in discussions with at least one possible source of additional funding, but it has no binding commitments, and there is no assurance that it will be able to obtain additional funding. Any such additional funding, of which there is no assurance, is anticipated to be through the issuance of additional equity securities or debt instruments. If the Registrant is able to obtain funding, of which there is no assurance, it is anticipated that such funding would have a significantly dilutive effect on the existing capital structure of the Company. Such dilution also would be expected to have a significant adverse effect on any trading market for the Registrant's common stock.
Lack of a
At the present time, there is not a liquid trading market for the Registrant's common stock. If the Registrant does not obtain sufficient financial resources in the near future, and there is no assurance that it can, the Registrant will not be able to fully pursue its business plan in the manner planned.
4 Risk Factors.
In addition to its pressing need for capital as referenced above and the risk that the Registrant will not be able to obtain the capital needed to pursue its business plan fully, as well as the lack of a liquid trading market for its stock, also as referenced above, the Registrant faces numerous other risks in pursuing its business plan.
A number of the other significant risks (in addition to the risk of not having sufficient capital) include, among others, the Covid-19 pandemic and the delays, increased costs and other disruption that the Covid-19 pandemic could cause to the Registrant's business; and the competition the Registrant faces in the entertainment industry from companies that may be able to compete successfully against the Registrant because they are much larger, have significantly greater financial and other resources, and are more established in the industry.
The Registrant also faces the risk of not being able to employ and/or keep competent personnel at compensation rates that the Registrant can afford, the risks of not being able to keep up with and not being able to afford technological advances in the industry, and the risk of not being able to protect its intellectual property from claims and/or piracy of competitors.
With respect to industry technological advances and advances in delivery of entertainment content, the Registrant faces the risk of being able to keep pace with these changes and the resulting new methods of delivery. Other risks include the uncertainty of being able to engage artists in order to be able to offer products that will be attractive to consumers, as well as other uncertainties related to demand for the Registrant's products, and the risks that the Registrant's operating costs may increase so substantially that the Registrant may not be able to sustain its operations.
Company Matters.
The members of the Registrant's Board of Directors are
The Registrant currently employs 15 persons on a full-time basis.
There currently are approximately 53,106,612 shares of the Registrant's common
stock outstanding, including the 13 million shares from the private placement
described above and the 12.5 million shares issued to
The foregoing update concerning the Company, and this Report in general, are not intended to be, and do not constitute, an offer or solicitation for the purchase or sale of stock of the Registrant.
Management and Employee Summary Information.
Background information concerning the directors of the Registrant and certain of the employees is as follows:
Stephen started producing in music as the founder of a successful independent
record label in the 90's. One of the first to envision how the Internet would
take a major position in the music and film distribution market, Stephen
pioneered a streaming video company, Vidnet, which grew significantly as an
internet entertainment site under his leadership. Stephen was the President,
CEO and a director of Appreciated Media Holdings Inc. from
Item 9.01. Financial Statements and Exhibits
(d) Exhibits. Exhibit No. Description
99.1 Text of Amendment to Section 3.9 to the Registrant's Bylaws, which
reduces the notice period for a special meeting of the board directors to two days from ten days.
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