U.S.
SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form
10-Q
|
Mark
One
[
X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE
ACT OF 1934
For
the quarter ended March 31, 2009
[ ] TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE
ACT OF 1934
For
the transition period from ______ to
_______
|
Playbox (US) Inc.
(Name
of small business issuer in its charter)
|
|
|
|
Nevada
(State
or other jurisdiction of incorporation
or
organization)
|
n/a
(I.R.S.
Employer Identification No.)
|
|
|
Suite 3.19, 130 Shaftesbury
Avenue
London, England WID
SEU
(Address
of principal executive offices)
|
|
|
|
+44 (0) 20 7031
1189
(Issuer’s
telephone number)
|
|
n/a
(Address
of prior principal executive offices if changed from last
filing)
|
|
|
|
Securities
registered pursuant to Section
12(b)
of the Act:
|
Name
of each exchange on which
registered:
|
None
|
|
|
|
Securities
registered pursuant to Section 12(g) of the Act:
|
|
Common Stock,
$0.001
|
|
(Title
of
Class)
|
Class
|
Outstanding
as of May 12, 2009
|
Common
Stock, $0.001
|
54,186,299
|
Part
1
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FINANCIAL
INFORMATION
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Page
|
Financial Statements
|
||
|
Balance
Sheets
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4
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|
Statements
of Operations
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5
|
Statements
of Cash Flows
|
6
|
|
Notes
to Financial Statements
|
7
|
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
13
|
|
|
||
Quantitative
and Qualitative Disclosures About Market Risk
|
21 | |
|
||
Controls
and Procedures
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22 | |
Part
II.
|
OTHER
INFORMATION
|
|
|
||
Legal
Proceedings
|
23
|
|
|
||
Item
1A
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Risk
Factors
|
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
23
|
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Defaults
Upon Senior Securities
|
25
|
|
|
||
Submission
of Matters to a Vote of Security Holders
|
25
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Other
Information
|
25
|
|
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||
Exhibits
|
26
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|
Playbox
(US) Inc.
|
||||||||
(A
Development Stage Company)
|
||||||||
Consolidated
Balance Sheets
|
||||||||
As
of
|
As
of
|
|||||||
March
31, 2009
|
September
30, 2008
|
|||||||
ASSETS
|
UNAUDITED
|
|||||||
Current
Assets
|
||||||||
Cash
of Continuing Operations
|
$382 | $382 | ||||||
Cash
of Discontinued Operations
|
4,749 | 4,749 | ||||||
Total
Cash
|
5,131 | 5,131 | ||||||
Other
Current assets - Discontinued Operations
|
1,391 | 1,391 | ||||||
Total
Current Assets
|
6,522 | 6,522 | ||||||
TOTAL
ASSETS
|
6,522 | 6,522 | ||||||
LIABILITIES
|
||||||||
Current
Liabilities
|
||||||||
Accounts
payable
|
$53,878 | $49,636 | ||||||
Accrued
liabilities
|
2,250 | 4,500 | ||||||
Due
to Related Parties
|
50,231 | 323,858 | ||||||
Amounts
owing pursuant to agreement for acquisition of Delta Music
Limited
|
142,140 | 181,750 | ||||||
Current
Liabilities - Discontinued Operations
|
64,217 | 64,217 | ||||||
Total
Current Liabilities
|
312,716 | 623,961 | ||||||
TOTAL
LIABILITIES
|
312,716 | 623,961 | ||||||
STOCKHOLDERS’
DEFICIT
|
||||||||
Capital
Stock
|
||||||||
Preferred
Stock
|
||||||||
Authorized: 5,000,000
shares with $0.001 par value. Issued: Nil
|
- | - | ||||||
Common
Stock
|
||||||||
Authorized:
100,000,000 common shares with $0.001 par value
|
||||||||
Issued: 54,186,299
(March 31, 2009)
|
54,186 | 29,663 | ||||||
29,663,293
(September 30, 2008)
|
||||||||
Obligation
to issue shares
|
0 | 2,000 | ||||||
Additional
paid-in capital
|
4,090,609 | 3,105,212 | ||||||
Accumulated
Other Comprehensive Income (Loss)
|
49,416 | 5,847 | ||||||
Deficit
- Accumulated during the development stage
|
(4,500,404 | ) | (3,760,161 | ) | ||||
TOTAL
STOCKHOLDERS' EQUITY (DEFICIT)
|
(306,194 | ) | (617,439 | ) | ||||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
$6,522 | $6,522 | ||||||
The
accompanying notes are an integral part of these consolidated financials
statements.
|
Playbox
(US) Inc.
|
||||||||||||||||||||
(A
Development Stage Company)
|
||||||||||||||||||||
Statements
of Operations
|
||||||||||||||||||||
UNAUDITED
|
||||||||||||||||||||
Cumulative
|
||||||||||||||||||||
From
|
||||||||||||||||||||
Incorporation
|
||||||||||||||||||||
For
the Three Months
|
For
the Three Months
|
For
the Six Months
|
For
the Six Months
|
May
02, 2003
|
||||||||||||||||
Ended
|
Ended
|
Ended
|
Ended
|
to
|
||||||||||||||||
March
31, 2009
|
March
31, 2008
|
March
31, 2009
|
March
31, 2008
|
March
31, 2009
|
||||||||||||||||
General
and Administrative Expenses
|
||||||||||||||||||||
Accounting
and auditing
|
2,625 | 9,553 | 4,125 | 31,583 | 270,383 | |||||||||||||||
Bank
Charges
|
23 | 436 | 85 | 663 | 2,019 | |||||||||||||||
Consulting
fees
|
- | 79,927 | 360,000 | 110,604 | 627,004 | |||||||||||||||
Depreciation
|
- | - | - | 1,887 | ||||||||||||||||
Development
|
- | 199,540 | - | 199,540 | 228,692 | |||||||||||||||
Filing
fees
|
3,020 | 1,520 | 3,020 | 1,520 | 13,062 | |||||||||||||||
Intellectual
properties
|
- | - | - | - | 2,500,000 | |||||||||||||||
Investor
relations
|
- | - | - | - | 18,000 | |||||||||||||||
Legal
|
1,447 | 7,467 | 11,197 | 25,190 | 132,225 | |||||||||||||||
Marketing
|
- | - | - | - | 38,838 | |||||||||||||||
Office
& Miscellaneous
|
- | - | - | - | 13,990 | |||||||||||||||
Salaries
& Benefits
|
- | 25,179 | 360,000 | 29,340 | 574,811 | |||||||||||||||
Transfer
agent fees
|
- | 130 | 1,816 | 130 | 6,625 | |||||||||||||||
Travel
& Entertainment
|
- | - | - | - | 4,038 | |||||||||||||||
Total
General and Administrative Expenses
|
7,116 | 323,751 | 740,244 | 398,570 | 4,431,574 | |||||||||||||||
(7,116 | ) | (323,751 | ) | (740,244 | ) | (398,570 | ) | (4,431,574 | ) | |||||||||||
Income
(loss) from Continuing Operations
|
||||||||||||||||||||
Income
(loss) from Discontinued Operations
|
0 | (4,185 | ) | 0 | (8,519 | ) | (61,924 | ) | ||||||||||||
Other
Income (Expense)
|
||||||||||||||||||||
Foreign
exchange gain (loss)
|
0 | 4,223 | 0 | 2,918 | (7,786 | ) | ||||||||||||||
Interest
income
|
0 | 0 | 0 | 0 | 881 | |||||||||||||||
Loss
for the period
|
$ | (7,116 | ) | $ | (323,713 | ) | (740,244 | ) | (404,171 | ) | $ | (4,500,404 | ) | |||||||
$ | 0.00 | $ | (0.01 | ) | (0.02 | ) | (0.01 | ) | ||||||||||||
Loss
per Share – Basic and Diluted
|
||||||||||||||||||||
Weighted
Average Shares Outstanding
|
54,186,299 | 28,845,139 | 48,147,138 | 28,845,139 | ||||||||||||||||
Comprehensive
Loss
|
||||||||||||||||||||
Net
Loss
|
(7,116 | ) | (323,713 | ) | (740,244 | ) | (404,171 | ) | (4,500,404 | ) | ||||||||||
Gain
(loss) on foreign exchange translation
|
3,548 | (10,160 | ) | 43,569 | 1,913 | 49,416 | ||||||||||||||
Total
Comprehensive Loss
|
(3,567 | ) | (333,873 | ) | (696,675 | ) | (402,258 | ) | (4,450,988 | ) | ||||||||||
The
accompanying notes are an integral part of these consolidated financials
statements.
|
Playbox
(US) Inc.
|
||||||||||||
(A
Development Stage Company)
|
||||||||||||
Statements
of Cash Flows
|
||||||||||||
UNAUDITED
|
||||||||||||
For
the Six Months Ended March 31, 2009
|
For
the Six Months Ended March 31, 2008
|
Cumulative
from Incorporation
May
2, 2003 to
March
31, 2009
|
||||||||||
Operating
|
||||||||||||
Net
Loss
|
$ | (740,244 | ) | $ | (404,171 | ) | $ | (4,500,404 | ) | |||
Items
not involving cash:
|
||||||||||||
Depreciation
|
- | - | 1,887 | |||||||||
Shares
issued for consulting services
|
360,000 | 50,000 | 416,085 | |||||||||
Shares
issued for director's salaries
|
360,000 | - | 360,000 | |||||||||
Shares
for intellectual properties
|
- | - | 2,500,000 | |||||||||
Shares
issued for settlement of debt
|
- | - | 31,975 | |||||||||
Changes
in non-cash working capital items:
|
||||||||||||
Accounts
payable
|
4,242 | 42,773 | 53,878.41 | |||||||||
Accrued
liabilities
|
(2,250 | ) | (841 | ) | 11,250 | |||||||
Amounts
owing pursuant to agreement for acquisition of Delta Music
Limited
|
199,540 | 181,750 | ||||||||||
Effects
of accounts receivable in discontinued operation
|
- | (369 | ) | (1,391 | ) | |||||||
Effects
of accounts payable in discontinued operation
|
- | (322 | ) | (15,532 | ) | |||||||
Effects
of accrued liabilities in discontinued operations
|
- | 7,869 | (8,321 | ) | ||||||||
Effects
of amounts owing to related parties in discontinued
operations
|
- | 26,633 | 185,697 | |||||||||
Net
cash flows provided by (used in) operations
|
(18,252 | ) | (78,888 | ) | (783,126 | ) | ||||||
Investing
|
||||||||||||
Cash
acquired in purchase of Playbox Media Limited
|
- | - | 130,626 | |||||||||
Acquisition
of property and equipment
|
- | - | (1,887 | ) | ||||||||
Net
cash flows from investing activities
|
0 | 0 | 128,739 | |||||||||
Financing
|
||||||||||||
Due
to Boyd Holdings Inc.
|
- | - | 32,170 | |||||||||
Due
to related parties
|
14,335 | 42,501 | 329,193.52 | |||||||||
Loan
payable
|
- | 12,710 | - | |||||||||
Share
issuances for cash
|
- | 20,000 | 288,393 | |||||||||
Net
cash flows from financing activities
|
14,335 | 75,211 | 649,757 | |||||||||
Effect
of exchange rate changes
|
3,917 | 1,913 | 9,764 | |||||||||
Change
in Cash
|
0 | (1,764 | ) | 5,131 | ||||||||
Cash
- Beginning
|
5,131 | 5,909 | 0 | |||||||||
Cash
- Ending
|
$5,131 | $4,145 | $5,131 | |||||||||
Supplemental
Cash Flow Information
|
||||||||||||
Cash
paid for:
|
||||||||||||
Income
Taxes
|
$- | $- | $- | |||||||||
Interest
Paid
|
$- | $- | $- | |||||||||
The
accompanying notes are an integral part of these consolidated financials
statements.
|
Playbox
(US) Inc.
|
(Formerly
Boyd Holdings Inc.)
|
(A
Development Stage Company)
|
Notes
to Consolidated Financial Statements
|
March
31, 2009
|
2.
|
Significant
Accounting Policies
|
|
The
following is a summary of significant accounting policies used in the
preparation of these financial statements.
|
||
a)
|
Basis
of Consolidation
|
|
These
consolidated financial statements include the accounts of PlayBOX MEDIA
LIMITED since its incorporation on August 21, 2003 and Playbox (US) Inc.
since the reverse acquisition on March 24, 2006. All intercompany balances
and transactions have been eliminated.
|
||
b)
|
Use
of Estimates
|
|
The
preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make certain estimates and assumptions that affect the
reported amounts and timing of revenues and expenses, the reported amounts
and classification of assets and liabilities, and disclosure of contingent
assets and liabilities. These estimates and assumptions are based on the
Company’s historical results as well as management’s future expectations.
The Company’s actual results could vary materially from management’s
estimates and assumptions.
|
||
c)
|
Development
Stage Company
|
|
The
Company is a development stage company as defined by SFAS No. 7. The
Company is devoting substantially all of its present efforts to establish
a new business. All losses accumulated since inception have been
considered as part of the Company’s development stage
activities.
|
||
d)
|
Cash
and Cash Equivalents
|
|
Cash
equivalents consist of highly liquid instruments purchased with an initial
maturity of three months or less.
|
||
e)
|
Revenue
Recognition
|
|
Revenues
are recognized when all of the following criteria have been met under SAB
No. 104, “Revenue
Recognition in Financial Statements”: persuasive evidence of an
agreement exists; delivery has occurred or services have been rendered;
the fee is fixed or determinable; and collectibility is reasonably
assured.
|
||
Revenue
arises from the following sources: creation of web-based music interfaces;
provision of hosting and bandwidth services; and revenue share
services.
|
||
Revenues
from the creation of web-based music interfaces come from set-up fees
based on the number of tracks to be uploaded and the number of hours of
development time to complete the interface and are recognized when all of
the following SAB No. 104 criteria are met: a web-based interface
development agreement is signed with an estimate of the total cost based
on agreed upon specifications. Revenue from the development of web-based
interfaces is recognized in accordance with the completed performance
method. Under this method, revenue is recognized at the completion of the
web-based interface as the service transaction taken as a whole can be
deemed to have taken place on completion of the development.
Collectability is reasonably assured as the Company receives the agreed
set-up fee prior to allowing access to the web- based
interface.
|
||
Revenues
from the provision of hosting and bandwidth services come from a one time
hosting set-up fee and monthly fees based on disk space and bandwidth to
be provided and are recognized when all of the following SAB No. 104
criteria are met: a website hosting agreement is signed with an initial
term of six months and from month to month thereafter until terminated by
either party. Each agreement has a hosting price structure where prices
can be determined.
|
Revenue
from the one time set-up fee is deferred and recognized over the initial
term of six months and revenue received from monthly fees is recognized at
the end of the month, when hosting services, server bandwidth and customer
support was made available to the client for the month. Collectability is
reasonably assured as the Company receives a one time set-up fee prior to
the provision of the services. Monthly fees are received in advance of
each month, which is recorded as deferred revenue, and are recognized when
the monthly service is rendered.
|
||
Revenues
from the revenue share services element come from a set revenue share
percentage of music download purchases, as set out in each customer’s
agreement and are recognized when all of the following SAB No. 104
criteria are met: a distributor agreement is signed with initial and
renewal terms determined on a case-by-case basis. Revenue is recognized
when the minimum revenue share threshold of British Pounds Sterling
(“GBP”) 100, every payment period, is achieved. If the revenue share is
less than GBP 100, payments shall be carried over to the next due payment
date. Collectability is reasonably assured as the Company collects its
revenue share directly from the secure online payment system which it
utilizes prior to transferring net revenues to the
customer.
|
||
f)
|
Foreign
Currency Translations
|
|
The
Company’s reporting currency is the U.S. dollar. All of the Company's
transactions are denominated in Canadian currency so the Company has
adopted the Canadian dollar as its functional and reporting
currency. All transactions initiated in other currencies are
re-measured into the functional currency as follows:
· Assets
and liabilities at the rate of exchange in effect at the balance sheet
date,
· Equity
at historical rates, and
· Revenue
and expense items at the prevailing rate on the date of the
transaction.
Translation
adjustments resulting from translation of balances are accumulated as a
separate component of shareholders’ equity and reported as a component of
comprehensive income or loss.
|
||
g)
|
Income
Taxes
|
|
Income
taxes are accounted for using the asset and liability method. Deferred tax
assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying
amounts of assets and liabilities and their respective tax bases and
operating loss and tax credit carryforwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period
that includes the enactment date. A valuation allowance is provided for
deferred tax assets when it is more likely than not that such assets will
not be recovered.
|
||
h)
|
Fair
Value of Financial Instruments
|
|
The
Company’s financial instruments consist of cash, accounts receivable,
accounts payable, accrued liabilities and amounts due to related parties.
Unless otherwise noted, it is management’s opinion that this Company is
not exposed to significant interest or credit risks arising from these
financial instruments. The fair value of these financial instruments
approximate their carrying values, unless otherwise
noted.
|
||
i)
|
Segment
Reporting
|
|
SFAS
No. 131, "Disclosures
about Segments of an Enterprise and Related Information,” changed
the way public companies report information about segments of their
business in their quarterly reports issued to stockholders. It also
requires entity-wide disclosures about the products and services an entity
provides, the material countries in which it holds assets and reports
revenues and its major customers. The Company currently operates in two
segments, Western Europe and United
States.
|
j)
|
Stock-Based
Compensation
|
|
Effective
January 1, 2006, the Company adopted the provisions of Statement of
Financial Accounting Standards (“SFAS”) No. 123(R), “Share-Based Payment”,
which establishes accounting for equity instruments exchanged for employee
services. Under the provisions of SFAS 123(R), stock-based compensation
cost is measured at the grant date, based on the calculated fair value of
the award, and is recognized as an expense over the employees’ requisite
service period (generally the vesting period of the equity grant). Before
January 1, 2006, the Company accounted for stock-based compensation to
employees in accordance with Accounting Principles Board Opinion No. 25,
“Accounting for Stock Issued to Employees,” and complied with the
disclosure requirements of SFAS No. 123, “Accounting for Stock-Based
Compensation”.
|
||
The
Company adopted FAS 123(R) using the modified prospective method, which
requires the Company to record compensation expense over the vesting
period for all awards granted after the date of adoption, and for the
unvested portion of previously granted awards that remain outstanding at
the date of adoption. As the Company had no invested stock options
outstanding on the adoption date the financial statements for the periods
prior to January 1, 2006 have not been restated to reflect the fair value
method of expensing share-based compensation. Adoption of SFAS No. 123(R)
does not change the way the Company accounts for share-based payments to
non-employees, with guidance provided by SFAS 123 (as originally issued)
and Emerging Issues Task Force Issue No. 96-18, “Accounting for Equity
Instruments That Are Issued to Other Than Employees for Acquiring, or in
Conjunction with Selling, Goods or Services”.
|
||
k)
|
Comprehensive
Income
|
|
SFAS
No. 130, "Reporting
Comprehensive Income," establishes standards for reporting and
display of comprehensive income and its components in a full set of
general-purpose financial statements.
|
||
l)
|
Loss
per Share
|
|
The
Company computes net loss per share in accordance with SFAS No. 128,
“Earnings per
Share”, which requires presentation of both basic and diluted loss
per share (“LPS”) on the face of the statement of operations. Basic LPS is
computed by dividing the net loss available to common shareholders by the
weighted average number of outstanding common shares during the period.
Diluted LPS gives effect to all potentially dilutive common shares
outstanding including convertible debt, stock options and share purchase
warrants, using the treasury stock method. The computation of diluted LPS
does not assume conversion, exercise or contingent exercise of securities
that would have an anti-dilutive effect on LPS. The diluted LPS equals the
basic LPS since the potentially dilutive securities are
anti-dilutive.
|
||
m)
|
Recently
Adopted Accounting Standards
|
|
In
December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in
Consolidated Financial Statements”. This Statement amends ARB 51 to
establish accounting and reporting standards for the non-controlling
(minority) interest in a subsidiary and for the deconsolidation of a
subsidiary. It clarifies that a non-controlling interest in a subsidiary
is an ownership interest in the consolidated entity that should be
reported as equity in the consolidated financial statements. The Company
has not yet determined the impact, if any, that SFAS No. 160 will have on
its consolidated financial statements. SFAS No. 160 is effective for the
Company’s fiscal year beginning October 1, 2009.
|
||
In
December 2007, the FASB issued SFAS 141R, Business Combinations.
SFAS 141R replaces SFAS 141. The statement retains the purchase method of
accounting for acquisitions, but requires a number of changes, including
changes in the way assets and liabilities are recognized in the purchase
accounting. It changes the recognition of assets acquired and liabilities
assumed arising from contingencies, requires the capitalization of
in-process research and development at fair value, and requires the
expensing of acquisition-related costs as incurred. The statement will
apply prospectively to business combinations occurring in the Comapnys
fiscal year beginning October 1, 2009. We are evaluating the impact
adopting SFAS 141R will have on our financial
statements.
|
3.
|
Intellectual
Property
|
|
On
March 31, 2006 the Company acquired from its majority stockholder, the
PlayBOX Technology by issuing 10,000,000 common shares. The PlayBOX
Technology is an integrated music interface and music collection manager
running on Windows, Linux and Macintosh operating systems. The acquisition
is a related party transaction. The value assigned was $2,500,000, being
equal to the most recent share transaction of the Company of $0.25 per
share. This amount was written-off as the Company determined the PlayBOX
Technology was impaired in accordance with paragraph 34 of SOP 98-1 and
FASB 144, “Accounting
for the Impairment or Disposal of Long-Lived
Assets.”
|
||
4.
|
Related
Party Balances and Transactions
|
|
The
amounts due to related parties of $50,231 for six months ended March 31,
2009 are non-interest bearing, unsecured and due on demand. Included in
due to related parties are amounts owing to a corporate and individual
shareholder.
|
||
5.
|
Amounts
Payable Pursuant to Agreement for Acquisition of Delta Music
Limited
|
|
On
March 28, 2008, the Company entered into a Share Purchase Agreement (the
“Agreement”) for the proposed acquisition of UK based Delta Music Limited
(“Delta Music”). The acquisition never completed.
However,
under the terms of the Agreement, the Company agreed to pay GBP 100,000
(USD 142,140 as of M arch 31, 2009) to the attorneys of the Sellers to
fund certain expenses to be incurred by the Sellers and Delta Music in
connection with the acquisition regardless of whether or not the
acquisition completed.
As
of March 31, 2009, this amount has not been paid.
|
||
6.
|
Capital
Stock
|
|
The
Company’s capitalization is 100,000,000 common shares with a par value of
$0.001 per share and 5,000,000 preferred shares with a par value of
$0.001.
|
||
a)
|
On
April 21, 2008, the Company received $100,000 (GBP 49,192), from an
unrelated party, for 2,000,000 common shares at $0.05 per share. These
shares were issued on October 2, 2008.
|
|
b)
|
On
October 15, 2008, the Company issued 700,000 common shares at $0.09 per
share in full settlement of a $63,000 debt to Henry Maloney, a former
director of the Company.
|
|
c)
|
On
November 15, 2008, the Company issued 7,200,000 common shares at $0.05 per
share as prepayment of director’s fees pursuant to a director’s fee
agreement with Gideon Jung.
|
|
d)
|
On
November 19, 2008, the Company issued 5,623,008 common shares at $0.04 per
share in full settlement of a $224,920 debt to Debondo Capital Ltd., a
former related party.
|
|
e)
|
On
November 25, 2008, the Company issued 9,000,000 common shares at $0.04 per
share as prepayment of consulting fees pursuant to consulting agreement
with Jabeco Inc.
|
7.
|
Wind-up
of UK Subsidiary
|
Assets
|
||||
Cash
|
4,749 | |||
Accounts
Receivable
|
1,391 | |||
Total
Assets Disposed of
|
$6,140 | |||
Liabilities
|
||||
Accounts
Payable
|
37,043 | |||
Accrued
Liabilities
|
541 | |||
Due
to related parties
|
26,633 | |||
Total
Liabilities disposed of
|
$ | 64,217 | ||
Net
Liabilities disposed of
|
$ | 58,077 | ||
8.
|
Going
Concern
|
The
accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern, which contemplates,
among other things, the realization of assets and satisfaction of
liabilities in the normal course of business. As at March 31, 2009, the
Company has an accumulated deficit of $4,500,404 and has incurred an
accumulated operating cash flow deficit of $783,126 since incorporation.
The Company intends to continue funding operations through equity
financing arrangements, which may be insufficient to fund its capital
expenditures, working capital and other cash requirements for the next
fiscal year.
Thereafter,
the Company will be required to seek additional funds, either through
equity financing, to finance its long-term operations. The successful
outcome of future activities cannot be determined at this time, and there
is no assurance that, if achieved, the Company will have sufficient funds
to execute its intended business plan or generate positive operating
results. In response to these conditions, management intends to raise
additional funds through future private placement offerings.
These
factors, among others, raise substantial doubt about the Company's ability
to continue as a going concern. The accompanying consolidated financial
statements do not include any adjustments that might result from the
outcome of this uncertainty.
|
|
9.
|
Subsequent
Events
|
There
are no subsequent events expected to have a material affect on the
presentation of these financials
statements.
|
Cumulative
|
|||||||
From
|
|||||||
Incorporation
|
|||||||
For
the Six Months Ended
|
For
the Six Months Ended
|
May
2, 2003 to
|
|||||
March
31, 2009
|
March
31, 2008
|
March
31, 2009
|
|||||
General
and Administrative Expenses
|
|||||||
Accounting
and auditing
|
4,125
|
31,583
|
270,383
|
||||
Bank
Charges
|
85
|
663
|
2,019
|
||||
Consulting
fees
|
360,000
|
110,604
|
627,004
|
||||
Depreciation
|
-
|
1,887
|
|||||
Development
|
-
|
199,540
|
228,692
|
||||
Filing
fees
|
3,020
|
1,520
|
13,062
|
||||
Intellectual
properties
|
-
|
-
|
2,500,000
|
||||
Investor
relations
|
-
|
-
|
18,000
|
||||
Legal
|
11,197
|
25,190
|
132,225
|
||||
Marketing
|
-
|
-
|
38,838
|
||||
Office
& Miscellaneous
|
-
|
-
|
13,990
|
||||
Salaries
& Benefits
|
360,000
|
29,340
|
574,811
|
||||
Transfer
agent fees
|
1,816
|
130
|
6,625
|
||||
Travel
& Entertainment
|
-
|
-
|
4,038
|
||||
Total
General and Administrative Expenses
|
740,244
|
398,570
|
4,431,574
|
||||
(740,244)
|
(398,570)
|
(4,431,574)
|
|||||
Income
(loss) from Continuing Operations
|
|||||||
Income
(loss) from Discontinued Operations
|
-
|
(8,519)
|
(61,924)
|
||||
Other
Income (Expense)
|
|||||||
Foreign
exchange gain (loss)
|
-
|
2,918
|
(7,786)
|
||||
Interest
income
|
-
|
0
|
881
|
||||
Loss
for the period
|
$
|
(740,244)
|
(404,171)
|
$
|
(4,500,404)
|
||
Comprehensive
Loss
|
|||||||
Net
Loss
|
(740,244)
|
(404,171)
|
(4,500,404)
|
||||
Gain
(loss) on foreign exchange translation
|
43,569
|
1,913
|
49,416
|
||||
Total
Comprehensive Loss
|
(696,675)
|
(402,258)
|
(4,450,988)
|
1.
|
We
plan to carry out sales and marketing of our PlayBOX online music service
with the objective of securing sales of our White Label interface to music
artists and our Aggregator interface to record labels. Our Bespoke
interfaces will be targeted predominantly towards companies involved in
the music industry. We plan to undertake a number of marketing and
promotional campaigns over the next 12 months with the objective of
establishing sales momentum. We estimate $7,000 per month will be spent on
our proposed marketing campaigns and promotions in that 12-month period,
for anticipated total annual expenditures of $84,000.
|
2.
|
We
anticipate spending approximately $10,000 over the next 12 months to
various third parties to run our PlayBOX service. These parties’ elements
are: (i) dedicated server through Open Hosting Ltd., (ii) ePDQ payment
interface, provided by Barclaycard UK, (iii) Digital Rights Management
Interface, provided by IFDNRG Ltd., (iv) the administration of these
elements in the PlayBOX system.
|
3.
|
We
anticipate spending approximately $17,000 over the next twelve months in
continuing the upgrading, development and design of our PlayBOX
system.
|
4.
|
We
anticipate spending approximately $2,000 in ongoing general and
administrative expenses per month for the next twelve months, for a total
anticipated expenditure of $24,000 over the next twelve months. The
general and administrative expenses for the year will consist primarily of
rent and office services, technical support and hosting services and
general office expenses.
|
5.
|
We
anticipate spending approximately $40,000 in complying with our
obligations as a reporting company under the Securities Exchange Act of
1934, as amended. These expenses will consist primarily of professional
fees relating to the preparation of our financial statements and
completing our annual report, quarterly report, current report and proxy
statement filings with the Securities and Exchange
Commission.
|
·
|
we
do not have sufficient segregation of
duties;
|
·
|
we
do not have sufficient documentation for accounting or business
transactions;
|
·
|
we
have noted material weaknesses in the authorization and posting of general
ledger transactions, particularly those related to accruing liabilities
resulting from contractual commitments;
and
|
·
|
we
do not have an Audit Committee;
|
·
|
Amend
the Balance Sheet to increase current liabilities by GBP
100,000
|
·
|
Amend
the Income Statement to increase expenses for “Development Fees” by GBP
100,000
|
·
|
Amend
the Statement of Cash Flows and Shareholders’ Equity to reflect the above
changes
|
Exhibits: | ||
|
31.1
|
Certification
of Chief Executive Officer pursuant to Securities Exchange Act of 1934
Rule 13a-14(a) or 15d-14(a).
|
31.2 | Certification of Chief Financial Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a). | |
32.1 | Certifications pursuant to Securities Exchange Act of 1934 Rule 13a-14(b) or 15d-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002. | |
PLAYBOX (US) INC. | |||
Date:
May 18, 2009
|
By:
|
/s/ Gideon Jung | |
Name: Gideon Jung | |||
Title: President and Chief Executive Officer | |||
Date: May
18, 2009
|
By:
|
/s/ Gideon Jung | |
Name: Gideon Jung | |||
Title: Chief Financial Officer | |||