Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
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[X]
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ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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| For the fiscal year ended June 30, 2010 | ||
| [ ] | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT | |
| For the transition period from _________ to ________ | ||
| Commission file number: 333-156254 |
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Republik Media and Entertainment, Ltd.
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| (Exact name of registrant as specified in its charter) | |
| Nevada | 26-0884454 |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
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PO Box 778146
Henderson, Nevada
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89077
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| (Address of principal executive offices) |
(Zip Code)
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| Registrant’s telephone number: (702) 405-9927 | |
| Securities registered under Section 12(b) of the Exchange Act: | |
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Title of each class
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Name of each exchange on which registered
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| None |
not applicable
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| Securities registered under Section 12(g) of the Exchange Act: | |
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Title of each class
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None
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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 checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceeding 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 whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceeding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ ] No [X]
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. Yes [X] No [ ]
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.
Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [X] No []
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter. N/A
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. 5,216,000 as of June 30, 2010.
TABLE OF CONTENTS
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PART I
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PART II
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PART III
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PART IV
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| Item 15. | Exhibits, Financial Statement Schedules | 24 |
PART I
Item 1. Business
Business Development
We were incorporated as MojoRepublik, Inc. in the state of Delaware on September 10, 2007. On October 1, 2008, we changed our name to Republik Media and Entertainment, Ltd. (the “Company” or “Republik Media” or “Republik”).
MojoRepublik LLC, our wholly owned subsidiary, was organized on June 14, 2007 in the State of Nevada. We develop and run our website, www.mojorepublik.com the “Site” or the “Web Site”), through MojoRepublik LLC.
LiveBrew.com LLC (“Live Brew”), our wholly owned subsidiary, was organized on May 23, 2008 in the State of Nevada. We engage in event production and promotion activities through Live Brew.
Description of Business
Mojorepublik LLC
We are engaged in the business of developing and promoting an Internet-based entertainment, lifestyle, and design website through our wholly-owned subsidiary, MojoRepulik LLC. We have attempted, and had limited success, selling advertising on our Site to generate revenue. We have designed our Site with the intention of appealing to individuals who follow the latest entertainment, lifestyle, fashion, and design trends. While it is our desire to continuously upgrade and update our Site, at this point in time we do not possess the financial resources necessary to perform any significant upgrading of the Site. Additionally, insufficient capital prevents us from providing continuous updates of the Site. We do possess the capacity, however, to update the Site very sporadically, and do so with pictures of concert and club goers. In the event we are able to obtain additional financial resources, we plan to continue to provide both design and content on our Site that will attract such individuals as viewers and customers.
To date the Site has provided local content for Las Vegas. In the future, if the Las Vegas website becomes profitable, we intend to provide local content for multiple communities, beginning with Los Angeles, California, and Austin, Texas, and expanding to more communities as we grow. Contingent upon successful expansion in Los Angeles and Austin, we will expand into other cities, including San Diego, California; Phoenix, Arizona; San Francisco, California; and Seattle, Washington. Should we meet with operational success in the foregoing round of cities, we will expand into cities in other areas of the United States. As part of our future expansion we also intend to provide more generalized content relevant to our customers who are not residents of any of the communities for which we plan to provide localized content.
Las Vegas was selected as the original city because it is known as the “Entertainment Capital of the World.” Not only is Las Vegas among the fastest growing cities in America with a vibrant and growing night life for locals, but the city is also a major travel destination. Los Angeles and Austin were selected for the initial round of expansion for the following reasons:
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Los Angeles is known as the “Film Capital of the World.” It is the second largest city in the United States, has the second largest television market, is a popular home for celebrities, and has an active night life as well.
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Austin is known as the “Live Music Capital of the World” and was rated by Forbes as one of the “Top 3 Best Places to Live.” It hosts over 1500 live acts per night, and has an abundance of clubs and night spots for our photographers to frequent in their marketing activities.
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Web Site
Our Internet Site has been available to the public since October 15, 2007. Initially, we drove traffic to our Site primarily through the use of photographers at local clubs and events. Customers at these clubs and events represent our target audience. Photographers would hand out promotional cards for our Web Site, directing photography subjects and others to our Site. Promotional cards informed club patrons that they would be able to view the photos of themselves, their friends, and others on our Web Site, save the photos in order to print them later, and email them to friends and family. Because of a lack of operational funds we no longer hire photographers. Should sufficient operational funds become available, either through a capital raise or revenue generated by the Site, then it is our intent to again hire photographers and use them in the manner described to drive traffic to our Site
Content
We seek diverse contributors to create a broad view of pop culture and trends for our Site viewers. Our Site’s content is focused on Entertainment which is an umbrella under which we cover the following:
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Entertainment:
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Nightlife – nightclub culture including club events, promotions, parties, local nightspots, and eateries.
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Music Arts –musical icons, upcoming musicians, critiques, and interviews.
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Live Music – articles and streaming media of live concerts as well as information such as tour itineraries and recording studios.
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Our articles, interviews, and editorials are commissioned on the same contract basis that many print magazines utilize. As a result, our current lack of operational capital has recently prevented us from commissioning new articles, interviews, and editorials. If additional capital becomes available then we will bring current our Entertainment coverage.
If, in the future, we possess sufficient capital to upgrade and expand our Site, we would like the Site’s content to include the following three categories:
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Lifestyle – This category will focus on modern living with topics that appeal to a design-oriented community. Articles will include design, art, interior design, travel, beauty, green and healthy living, books, urban living, social events, sports, and cooking.
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Fashion – Our Fashion category will include regular fashion layout spreads and interviews with designers, manufacturers, and models. A focus on fashion is intended to attract advertisers.
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Design – Content will include design topics such as architecture, technology, automobiles, local and national high-rise development projects, interior design, and modern art.
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If we are able to expand the Site, then in addition to the major content categories previously described, we intend to provide the following local content relevant to each of our destination cities:.
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Events – Club events, restaurant openings, live concerts, and theatrical plays.
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Hot Spots –Popular destinations such as night clubs, restaurants, fashion boutiques, and art galleries.
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Trendsetters – Entrepreneurs, charities, developers, artists, designers.
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Live Brews, LLC
We are engaged in the organization and promotion of live events, ranging from concerts to brew tasting, through our wholly-owned subsidiary, Live Brews, LLC. We take advantage of the entertainment industry contacts of our President to schedule entertainers for such events. We promote these events as heavily as possible (including on our Site) and attempt to generate enough revenue through ticket sales, advertising, and cross-promotions to generate a net profit for the events. More importantly, however, we use the events to promote our Site as much as possible, driving traffic through signage, marketing materials, and event photographers.
The first event we produced was a brew tasting event with live music at the MGM Grand in Las Vegas, NV on June 27, 2008. We provided over 50 premium, specialty beers and microbrews, hors d’oeuvres, and live music. The bands were The Skooners, and Draw the Line, the only Aerosmith Tribute band endorsed by Aerosmith. While attendance and revenues were within our budget, we had some unexpected last-minute expenses that kept the event from generating a net profit. However, the event served to drive significant traffic to our Site, as well as to establish our reputation as event producers and promoters in the Las Vegas area.
Subsequently, we had tentatively planned a second, similar event for May of 2009. We had planned to host a small festival at the Clark County Amphitheatre, a venue with capacity for 5,000 people. The festival would have had brew tasting and live music. This festival was ultimately not staged because of budgetary concerns for both Clark County and ourselves. We explored staging the Festival with the City of Henderson, a municipality located within Clark County, but the City of Henderson’s budgetary concerns derailed this effort. As a result of ours and the governments’ budgetary concerns, the festival has been postponed indefinitely. We do not anticipate being able to stage further events unless we receive additional capital.
Competition
We compete with a number of established companies who publish online magazines, and with others who produce and promote festivals, concerts, and other events. These companies enjoy brand recognition which exceeds that of our brand name and have significantly greater financial, distribution, advertising, and marketing resources than we do. We compete primarily on the basis of the quality of our Product. Providing one location where readers can get all the information they need on pop culture and local events is a relatively unique approach, which we hope will allow us to compete in this arena. We believe that our success will depend upon our ability to remain competitive in our Product area. The failure to compete successfully in the future could result in a material deterioration of customer loyalty and our image and could have a material adverse effect on our business.
We also have a number of competitors using similar direct marketing strategies combined with guerilla marketing. These competitors also use photographers to take pictures of their target audience at events and nightclubs, which they then post on their own web sites. Our competitors include:
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Spy on Vegas - www.spyonvegas.com – Spy On Vegas contains listings of Events; Nightspots, which is a listing of clubs; Members, a gallery of event photos; and an Edit My Profile section. They do not provide editorial content.
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Napkin Nights - www.napkinnights.com - Napkin Nights is a complete interactive resource for individuals seeking information on local nightlife. They offer no articles and little content. Their photographers take pictures at local events in Phoenix, Las Vegas, San Diego, Sacramento, and San Francisco.
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We intend to differentiate ourselves from our competitors by providing a broader social content that is less discriminating, aimed to attract an even larger target audience. Rival online competitors, using similar strategies of taking photographs at events as a marketing tool, are primarily focused on the nightlife club scene with little or no editorial content. Their web sites consist primarily of photos and listings of linked events. We are an online magazine with an expanded portfolio of editorial content that we feel will attract a larger target audience. As with other aspects of our business plan, implementation of this portion of our plan is contingent upon us raising additional capital.
Intellectual Property
We have registered the domain name of our primary web Site, MojoRepublik.com and also www.LiveBrew.com. In addition, we have secured federal trademark registrations on “LIVE BREW” and on “MOJO REPUBLIK”. To date, we do not yet own any other patent, trademark, or legally enforceable claim to proprietary intellectual property.
Research and Development Expenditures
We have not incurred any research or development expenditures since our incorporation.
Regulatory Matters
We are unaware of and do not anticipate having to expend significant resources to comply with any governmental regulations relating to online publishing. We are subject to the laws and regulations of those jurisdictions in which we plan to promote events, which are generally applicable to general business operations, such as transactional regulations, business licensing requirements, income taxes and payroll taxes. In general, our website is not subject to special regulatory and/or supervisory requirements. We do have professional promoter licenses for each of Clark County, Las Vegas, and Henderson, Nevada.
Employees
Our only employee is our President and sole director, David Woo. We have no other employees. Our President oversees all of our limited operations. In the event we are able to expand our current operations, we would also need to expand our current management to retain skilled directors, officers, and employees with experience relevant to our business focus as business conditions warrant.
Subsidiaries
We conduct all of our business operations through our wholly-owned subsidiaries, MojoRepublik, LLC, which was organized in the state of Nevada on June 14, 2007, and Live Brew, LLC, which was organized in the state of Nevada on May 23, 2008.
Environmental Laws
We have not incurred and do not anticipate incurring any expenses associated with environmental laws.
Item 2. Properties
Our Executive Offices
At this time we do not have full time office space. To the extent that we require formal office space from time to time, we have arranged to borrow space from Drex Agency, the firm that designed our website, at 6623 Las Vegas Blvd South, Ste. 220, Las Vegas, Nevada.
Item 3. Legal Proceedings
We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.
Item 4. (Removed and Reserved)
PART II
Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
Our common stock is currently quoted on the OTC Bulletin Board (“OTCBB”), which is sponsored by FINRA. The OTCBB is a network of security dealers who buy and sell stock. The dealers are connected by a computer network that provides information on current "bids" and "asks", as well as volume information. Our shares are quoted on the OTCBB under the symbol “REPU.OB.”
The following table sets forth the range of high and low bid quotations for our common stock for each of the periods indicated as reported by the OTCBB. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.
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Fiscal Year Ending June 30, 2010
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Quarter Ended
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High $
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Low $
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June 30, 2010
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N/A
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N/A
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March 31, 2010
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N/A
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N/A
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December 31, 2009
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N/A
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N/A
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September 30, 2009
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N/A
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N/A
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Fiscal Year Ending June 30, 2009
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Quarter Ended
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Low $
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June, 2009
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N/A
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N/A
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March 31, 2009
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N/A
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N/A
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December 31, 2008
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N/A
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N/A
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September 30, 2008
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N/A
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N/A
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Penny Stock
The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a market price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that: (a) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; (b) contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties or other requirements of the securities laws; (c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price; (d) contains a toll-free telephone number for inquiries on disciplinary actions; (e) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and (f) contains such other information and is in such form, including language, type size and format, as the SEC shall require by rule or regulation.
The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) a monthly account statement showing the market value of each penny stock held in the customer's account.
In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement as to transactions involving penny stocks, and a signed and dated copy of a written suitability statement.
These disclosure requirements may have the effect of reducing the trading activity for our common stock. Therefore, stockholders may have difficulty selling our securities.
Holders of Our Common Stock
As of June 30, 2010, we had 5,216,000 shares of our common stock issued and outstanding, held by 36 shareholders of record.
Dividends
The Company has not declared, or paid, any cash dividends since inception.
Nevada law prohibits our board from declaring or paying a dividend where, after giving effect to such a dividend, (i) we would not be able to pay our debts as they came due in the ordinary course of our business, or (ii) our total assets would be less than the sum of our total liabilities plus the amount that would be needed, if the corporation were to be dissolved at the time of distribution, to satisfy the rights of any creditors or preferred stockholders.
Recent Sales of Unregistered Securities
We did not issue any unregistered securities during the quarter ended June 30, 2010.
Securities Authorized for Issuance under Equity Compensation Plans
We do not have any equity compensation plans.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.
Plan of Operation
Event Promotion
All event promotion occurs in our wholly-owned subsidiary, Live Brew.com LLC. Our current lack of capital has forced us to indefinitely postpone our event promotion. If we are able to raise additional capital, then we intend to produce additional events in an attempt to generate revenue. Further, we intend to send photographers to all events that we help promote as part of our promotion. By taking and posting photographs of the event on our Site, we will generate interest in the event for the following year which will be a sales point in seeking clients for further event promotion. More importantly, photographers at music festivals, art festivals, concerts, and other events will serve to drive significant traffic to our Site as described below. All of our event production and promotion activities will ultimately serve to drive traffic to our Site, if this occurs, then we anticipate that this Site traffic should increase our appeal to advertisers.
Driving Traffic to Web Site
Our success relies heavily on our ability to attract visitors to our Site. If we are able to drive a heavy level of traffic to our site, we are confident in our ability to generate advertising revenue based upon our traffic. To increase revenue, we must attract a high volume of consumers to our Site. The online market is becoming more competitive, so driving traffic to web sites is generally becoming more expensive. The highest rated sites are firmly established, and highly relevant to the search queries they attract, so they receive quite a bit of natural traffic flow. To attract more visitors and increase revenue, less established sites must often pay more for advertising.
We do not currently possess the operational capital to market the Site. If we are able to raise additional capital, then we will resume our hybrid strategy of conventional direct marketing and undercover marketing to increase traffic in the most cost-effective way possible. Undercover marketing is also known as “guerilla” or “buzz” campaigning. Our approach to undercover marketing involves photographers in designated cities capturing patrons at popular clubs and other nightspots. Customers at these clubs represent our target audience. Photographers will hand out promotional cards for our Web Site, directing photography subjects and others to our Site. Promotional cards will inform club patrons that they will be able to view the photos of themselves, their friends, and others on our Web Site, save the photos in order to print them later, and email them to friends and family. In the past, when we had operational capital, we engaged photographers and found that these activities generated the majority of the traffic coming to our Site. However, we do not currently possesses sufficient capital to hire photographers, and we do not anticipate being able to hire them in the future unless we receive additional capital.
In addition to undercover marketing at clubs and other popular night spots, we intend to develop reciprocal advertising relationships with online dating and social networking Internet sites, such as MySpace.com. Will intend to drive traffic to their site and allow them to drive traffic to our site, as the profiles of our target customers are very similar.
In addition to undercover marketing at clubs and other popular night spots, we can generate traffic to our Site if the Site appears at the top of search engine searches for phrases relating to clubs, design, fashion, entertainment, etc. Initially we have relied upon our Web designers to build our site in a way that we are at the top of search engine searches. A site can also appear at the top of search engine searches by paying popular search engines to place them there. We do not currently possess sufficient capital to pay for search engine placement, but, if additional capital becomes available, we are willing to pay popular search engines for top placement if we determine such placement would be beneficial.
We have relied upon our club and event based photographers, word of mouth and search engine placement to generate traffic to our Site. We have focused on drawing a high volume of visitors to our Site in the hopes that this traffic would lead to a high Internet traffic ranking value and, therefore, high advertising sales potential. Because we have been unable to sustain these marketing efforts we have not generated the volume of traffic necessary to attract advertisers. If we receive an infusion of capital then we intend to resume our marketing efforts with the goal of generating a high volume of traffic, thereby hopefully increasing our appeal to advertisers.
Intellectual Property Protection
Our business depends, in part, on the protection of our intellectual property, including our business name, logo, and distinctive branding. We have registered the domain name of our primary web Site, MojoRepublik.com and also for www.LiveBrew.com. In addition, we have secured federal trademark registrations on “LIVE BREW” and on “MOJO REPUBLIK”. To date, we do not yet own any other patent, trademark, or legally enforceable claim to proprietary intellectual property.
Significant Equipment
We do not intend to purchase any significant equipment for the next twelve months.
Expenses
At present we lack the capital necessary to pursue our business plan. Were we able to raise the necessary capital, we estimate the costs to implement our business strategy over the following twelve months would be substantially as follows:
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Event Production and Promotion, which will consist of the production and promotion of our own music festival as well as the promotion of other events. We expect such costs to include food and beverage expenses, licensing, permits, insurance, and the costs of bands and other entertainment. We estimate Production and Promotion expenses for the next twelve months will be approximately $50,000;
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Site Content and Development costs consist of the expenses associated with maintaining and constantly redesigning our Site, including: photographers, writers, graphic artists, web hosting companies, and Site developers. While our costs in this area are significantly reduced because of the significantly reduced rate provided by our Site developer, Drex Agency, we still anticipate our Site Content and Development expenses for the next twelve months to be approximately $50,000; and
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General and Administrative costs consist of the daily operational expenses, which are expected to include, but are not necessarily limited to, salaries for administrative personnel, insurance, Professional fees consisting of the costs associated with the legal and accounting services we will require to maintain compliance with reporting and other requirements, and all other general expenses. General and administrative costs are expected to be approximately $100,000 for the next twelve months.
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We intend to obtain business capital through the use of private equity fundraising or shareholders loans. We anticipate that, in time, the primary source of revenues for our business model will be from online advertisers.
Significant Equipment
We do not intend to purchase any significant equipment for the next twelve months.
Significant Equipment
We do not intend to purchase any significant equipment for the next twelve months.
Results of Operations for the years ended June 30, 2010 and 2009 and from Inception on September 10, 2007 through June 30, 2010.
Our revenue reported for the years ended June 30, 2010 and June 30, 2009 and from our inception on September 10, 2007 through June 30, 2010, was $0, $4,394 and $8,523, respectively. Revenue generated was attributable to the sale of advertising and revenue generated by our live event.
Our operating expenses for the years ended June 30, 2010 and June 30, 2009 and from our inception on September 10, 2007 through June 30, 2010, were $99,878, $104,651 and $289,286, respectively. The primary expense for the years ended June 30, 2010 and June 30, 2009 were professional fees of $95,088 and $77,720. The primary expenses since our inception on September 10, 2007 through June 30, 2010 were advertising and promotion expenses of $53,241, professional fees of $186,921 and general and administrative expenses of $40,288. We recorded a net loss of $104,164 for the year ended June 30, 2010, $104,186 for the year ended June 30, 2009 and $289,544 from our inception on September 10, 2007 through June 30, 2010.
Liquidity and Capital Resources
As of June 30, 2010, we had $497 in current assets and $270,293 in current liabilities. On June 30, 2010, we had working capital deficit of $269,796.
Operating activities used $4,132 in cash for the year ended June 30, 2010 as compared with $43,419 for the year ended June 30, 2009. Our net loss of $104,164 for the year ended June 30, 2010 and net loss of $104,186 for the year ended June 30, 2009 were the primary negative components of our operating cash flow. Financing activities generated $2,000 in proceeds from related party payables for the 12 months ended June 30, 2010 and netted $40,831 in proceeds from related party payables for the year ended June 30, 2009.
Operating activities used $98,251 in cash from our inception on September 10, 2007 through June 30, 2010. Our net loss of $289,544 since our inception on September 10, 2007 through June 30, 2010 was the primary negative component of our operating cash flow. Financing activities generated net cash of $99,971 during this same period consisting of a net $63,091 of proceeds from related parties payables, $10,000 of proceeds from notes payable and $26,880 in proceeds from the issuance of common stock.
As of June 30, 2010, there was cash in the amount of $497, which we believe is not sufficient cash to operate and achieve implementation of our full business plan. The Company's financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.
In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.
Research and Development
We will not be conducting any product research or development during the next 12 months.
Off Balance Sheet Arrangements
As June 30, 2010, there were no off balance sheet arrangements.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
A smaller reporting company is not required to provide the information required by this Item.
Item 8. Financial Statements and Supplementary Data
Index to Financial Statements Required by Article 8 of Regulation S-X:
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Audited Financial Statements:
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15
SEALE AND BEERS, CPAs
PCAOB & CPAB REGISTERED AUDITORS
www.sealebeers.com
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
Republik Media and Entertainment, LTD.
(A Development Stage Company)
We have audited the accompanying balance sheets of Republik Media and Entertainment, LTD. (A Development Stage Company) as of June 30, 2010 and 2009, and the related statements of operations, stockholders’ equity (deficit) and cash flows for the years ended June 30, 2010 and 2009, and since inception on September 10, 2007 through June 30, 2010. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conduct our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes 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 financial statements referred to above present fairly, in all material respects, the financial position of Republik Media and Entertainment, LTD. (A Development Stage Company) as of June 30, 2010 and 2009, and the related statements of operations, stockholders’ equity (deficit) and cash flows for the years ended June 30, 2010 and 2009, and since inception on September 10, 2007 through June 30, 2010, in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has not yet established an ongoing source of revenues sufficient to cover its operating costs, which raises substantial doubt about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Seale and Beers, CPAs
Seale and Beers, CPAs
Las Vegas, Nevada
September 28, 2010
50 S. Jones Blvd. Suite 202 Las Vegas, NV 89107 Phone: (888)727-8251 Fax: (888)782-2351
REPUBLIK MEDIA AND ENTERTAINMENT, LTD.
(A Development Stage Company)
Consolidated Balance Sheets
(Audited)
| ASSETS |
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June 30,
2010 |
June 30,
2009 |
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CURRENT ASSETS
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Cash
|
$ | 497 | $ | 2,629 | |
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Total Current Assets
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497 | 2,629 | |||
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EQUIPMENT, net
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- | 735 | |||
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TOTAL ASSETS
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$ | 497 | $ | 3,364 | |
| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | |||||
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CURRENT LIABILITIES
|
|||||
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Accounts payable and accrued expenses
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$ | 188,316 | $ | 93,306 | |
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Accrued interest payable
|
1,752 | 852 | |||
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Accrued interest payable - related party
|
7,134 | 3,747 | |||
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Related party payables
|
63,091 | 61,091 | |||
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Notes payable
|
10,000 | 10,000 | |||
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Total Current Liabilities
|
270,293 | 168,996 | |||
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TOTAL LIABILIITES
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270,293 | 168,996 | |||
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STOCKHOLDERS' EQUITY (DEFICIT)
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Preferred stock, $0.00001 par value, 10,000,000 shares authorized, -0- shares issued and outstanding
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- | - | |||
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Common stock, $0.00001 par value, 100,000,000 shares authorized, 5,216,000 shares issued and outstanding
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52 | 52 | |||
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Additional paid-in capital
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19,696 | 19,696 | |||
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Deficit accumulated during the development stage
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(289,544) | (185,380) | |||
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Total Stockholders' Equity (Deficit)
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(269,796) | (165,632) | |||
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
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$ | 497 | $ | 3,364 | |
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The accompanying notes are an integral part of these consolidated financial statements.
REPUBLIK MEDIA AND ENTERTAINMENT, LTD.
(A Development Stage Company)
Consolidated Statements of Operations
(Audited)
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For the Years Ended
June 30, |
From Inception
on September 10, |
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2010
|
2009
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2010
|
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|
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REVENUES
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$ | - | $ | 4,394 | $ | 8,523 | ||||
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OPERATING EXPENSES
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Advertising and promotion
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247 | 12,493 | 53,241 | |||||||
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Depreciation expense
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244 | 244 | 732 | |||||||
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Professional fees
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95,088 | 77,720 | 186,921 | |||||||
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Website expenses
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2,369 | 2,836 | 7,613 | |||||||
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Impairment of fixed assets
|
491 | - | 491 | |||||||
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General and administrative
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1,439 | 11,358 | 40,288 | |||||||
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Total Operating Expenses
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99,878 | 104,651 | 289,286 | |||||||
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LOSS FROM OPERATIONS
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(99,878 | ) | (100,257 | ) | (280,763) | |||||
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OTHER INCOME AND EXPENSE
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Other income
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- | 7 | 104 | |||||||
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Interest expense
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(4,286 | ) | (3,936 | ) | (8,885) | |||||
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Total Other Expenses
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(4,286 | ) | (3,929 | ) | (8,781) | |||||
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NET LOSS BEFORE TAXES
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(104,164 | ) | (104,186 | ) | (289,544) | |||||
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Income taxes
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- | - | - | |||||||
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NET LOSS
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$ | (104,164 | ) | $ | (104,186 | ) | $ | (289,544) | ||
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BASIC LOSS PER COMMON SHARE
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$ | (0.02 | ) | $ | (0.02 | ) | ||||
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WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
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5,216,000 | 5,216,000 | ||||||||
The accompanying notes are an integral part of these consolidated financial statements.
REPUBLIK MEDIA AND ENTERTAINMENT, LTD.
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Deficit)
(Audited)
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Common Stock
|
Additional
Paid-In |
Deficit
Accumulated |
Total
Stockholders' |
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Shares
|
Amount
|
Capital
|
Stage
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(Deficit)
|
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Balance, at inception of the development stage, September 10, 2007
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- | $ | - | $ | - | $ | - | $ | - | |||||||
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Common stock issued in accordance with share purchase agreement for MojoRepublik, LLC on September 10, 2007 at $0.00001
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4,320,000 | 43 | (7,175 | ) | - | (7,132) | ||||||||||
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Shares issued for cash on December 31, 2007 at $0.03 per share
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896,000 | 9 | 26,871 | - | 26,880 | |||||||||||
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Net loss from inception through June 30, 2008
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- | - | - | (81,194 | ) | (81,194) | ||||||||||
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Balance, June 30, 2008
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5,216,000 | 52 | 19,696 | (81,194 | ) | (61,446) | ||||||||||
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Net loss for the year ended June 30, 2009
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- | - | - | (104,186 | ) | (104,186) | ||||||||||
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Balance, June 30, 2009
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5,216,000 | 52 | 19,696 | (185,380 | ) | (165,632) | ||||||||||
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Net loss for the year ended June 30, 2010
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- | - | - | (104,164 | ) | (104,164) | ||||||||||
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Balance, June 30, 2010
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5,216,000 | $ | 52 | $ | 19,696 | $ | (289,544 | ) | $ | (269,796) | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
REPUBLIK MEDIA AND ENTERTAINMENT, LTD.
(A Development Stage Company)
Consolidated Statements of Cash Flows
(Audited)
|
For the Years Ended
June 30, |
From Inception
on September 10, 2007 Through |
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2010
|
2009
|
2010
|
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OPERATING ACTIVITIES
|
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Net loss
|
$ | (104,164 | ) | $ | (104,186 | ) | $ | (289,544) | ||
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Adjustments to Reconcile Net Loss to Net
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Cash Used by Operating Activities:
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Acquisition of subsitiary with negative book value
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- | - | (7,132) | |||||||
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Depreciation expense
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244 | 244 | 732 | |||||||
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Impairment of fixed assets
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491 | - | 491 | |||||||
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Changes in operating assets and liabilities:
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Accrued interest payable
|
4,287 | 3,936 | 8,886 | |||||||
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Accounts receivable
|
- | 350 | - | |||||||
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Unearned revenue
|
- | (2,184 | ) | - | ||||||
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Accounts payable and accrued expenses
|
95,010 | 58,421 | 188,316 | |||||||
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Net Cash Used in Operating Activities
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(4,132 | ) | (43,419 | ) | (98,251) | |||||
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INVESTING ACTIVITIES
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||||||||||
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Purchase of equipment
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- | - | (1,223) | |||||||
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Net Cash Used in Investing Activities
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- | - | (1,223) | |||||||
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FINANCING ACTIVITIES
|
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Proceeds from related party payables
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2,000 | 42,831 | 65,091 | |||||||
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Repayments of related party payables
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- | (2,000 | ) | (2,000) | ||||||
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Proceeds from notes payable
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- | - | 10,000 | |||||||
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Proceeds from issuance of common stock
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- | - | 26,880 | |||||||
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Net Cash Provided by Financing Activities
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2,000 | 40,831 | 99,971 | |||||||
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NET (DECREASE) INCREASE IN CASH
|
(2,132 | ) | (2,588 | ) | 497 | |||||
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CASH AT BEGINNING OF PERIOD
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2,629 | 5,217 | - | |||||||
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CASH AT END OF PERIOD
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$ | 497 | $ | 2,629 | $ | 497 | ||||
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SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
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CASH PAID FOR:
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Interest
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$ | - | $ | - | $ | - | ||||
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Income Taxes
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$ | - | $ | - | $ | - | ||||
The accompanying notes are an integral part of these consolidated financial statements.
REPUBLIK MEDIA AND ENTERTAINMENT, LTD.Notes to Consolidated Financial Statements
June 30, 2010 and 2009
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
Republik Media and Entertainment, Ltd. (the Company) was incorporated in the State of Delaware on September 10, 2007. The Company was originally incorporated as Mojo Republik, Inc., and was incorporated to engage in any lawful act or activity for which a Corporation may be organized under the DGCL. As of October 1, 2008, the Company changed its name to Republik Media and Entertainment, Ltd. The Company conducts business through its two wholly owned subsidiaries.
MojoRepublik, LLC, a wholly owned subsidiary of the Company, was organized on June 14, 2007 in the State of Nevada. MojoRepublik, LLC is in the business of developing and promoting a website, mojorepublik.com.
Live Brews, LLC, a wholly owned subsidiary of the Company, was organized on May 23, 2008 in the State of Nevada. Live Brews, LLC is in the business of organizing and promoting live events.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Accounting Basis
The basis is accounting principles generally accepted in the United States of America. The Company has adopted a June 30 fiscal year end. The Company has not realized significant sales through June 30, 2010 and is classified as a development stage company.
Principles of Consolidation
The accompanying consolidated financial statements for the years ended June 30, 2010 and 2009 include the accounts of the Company and its subsidiaries, MojoRepublik, LLC and Live Brews, LLC. All significant intercompany balances and transactions have been eliminated in consolidation.
Cash and Cash Equivalents
For purposes of the Statement of Cash Flows, the Company considers all highly liquid 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.
Fixed Assets
Fixed assets are recorded as cost. Major additions and improvements are capitalized. Maintenance and repairs that do not extend the useful life of the assets are expensed as incurred. Depreciation of property and equipment is determined using the straight-line method over their useful lives, primarily 5 years. As of June 30, 2010 and 2009 the Company had purchased $1,223 of machinery and equipment and had recognized $732 and $489 of accumulated depreciation.
REPUBLIK MEDIA AND ENTERTAINMENT, LTD.
Notes to Consolidated Financial Statements
June 30, 2010 and 2009
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Impairment of Long-Lived Assets
The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.
Stock-based compensation
As of June 30, 2010, the Company has not issued any share-based payments to its employees.
The Company adopted FASB ASC 718 effective January 1, 2006 using the modified prospective method. Under this transition method, stock compensation expense includes compensation expense for all stock-based compensation awards granted on or after January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of FASB ASC 718.
Revenue Recognition
The Company generates revenue in exchange for advertising on the website owned by our wholly owned subsidiary, MojoRepublik LLC. Additionally, we are engaged in the organization and promotion of live events through our wholly-owned subsidiary, LiveBrew.com LLC. The Company recognizes revenue when products services have been provided and collection is reasonably assured.
Advertising and Promotional Expenses
The Company’s policy regarding advertising is to expense advertising when incurred. The Company incurred $247 and $12,493 of advertising expense during the years ended June 30, 2010 and 2009, respectively.
Basic (Loss) per Common Share
Basic (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as of June 30, 2010 or 2009.
Income Taxes
The Company provides for income taxes under FASB ASC 740 which requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. The Company’s predecessor operated as entity exempt from Federal and State income taxes.
FASB ASC 740 also requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
REPUBLIK MEDIA AND ENTERTAINMENT, LTD.
Notes to Consolidated Financial Statements
June 30, 2010 and 2009
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income Taxes (continued)
The provision for income taxes differs from the amounts which would be provided by applying the statutory federal income tax rate of 39% to net loss before provision for income taxes for the following reasons:
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June 30,
2010
|
June 30,
2009
|
||||
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Income tax expense at statutory rate
|
$ | (40,624) | $ | (40,633) | |
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Valuation allowance
|
40,624 | 40,633 | |||
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Income tax expense per books
|
$ | - | $ | - | |
Net deferred tax assets consist of the following components as of:
|
June 30,
2010
|
June 30,
2009
|
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NOL carryover
|
$ | 112,922 | $ | 72,298 | |
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Valuation allowance
|
(112, 922) | (72,298) | |||
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Net deferred tax asset
|
$ | - | $ | - | |
Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards of $289,053 for federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur net operating loss carry forwards may be limited as to use in future years.
The tax years that remain subject to examination by major taxing jurisdictions are for the years ended December 31, 2010, 2009, and 2008.
Recent Accounting Pronouncements
Management has considered all recent accounting pronouncements issued since the last audit of our financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.
In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.
F-8
REPUBLIK MEDIA AND ENTERTAINMENT, LTD.
Notes to Consolidated Financial Statements
June 30, 2010 and 2009
NOTE 2 - GOING CONCERN (CONTINUED)
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
NOTE 3 – EQUIPMENT
Equipment is stated at cost. Depreciation expense for the years ended June 30, 2010 and 2009 $244. Gains from losses on sales and disposals are included in the statements of operations. Maintenance and repairs are charged to expense as incurred.
The Company performed an impairment analysis as of June 30, 2010 to determine if the carrying value of its fixed assets exceeded the through undiscounted expected future cash flows to be realized from those assets. The Company determined that the remaining assets required impairment and recorded $491 in impairment expense as of June 30, 2010. This resulted in the Company recording no fixed assets as of June 30, 2010.
As of June 30, 2010 and 2009, equipment consisted of the following:
|
June 30,
2010
|
June 30,
2009
|
||||
|
Machinery and equipment
|
$ | 1,223 | $ | 1,223 | |
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Accumulated depreciation
|
(732) | (488) | |||
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Impairment Expense
|
(491) | - | |||
|
Total
|
$ | - | $ | 735 | |
NOTE 4 – NOTES PAYABLE AND RELATED PARTY PAYABLES
The Company has $10,000 in notes payable outstanding for the financing of its operations as of June 30, 2010. The notes are unsecured, bear interest at six percent (6.0%) per annum and were due in August 2009. The notes are currently in default and are classified as current liabilities. As of June 30, 2010 and 2009 the Company has accrued a total of $1,752 and $852 on this note.
Various expenses of the Company including advertising, promotional expenses, and general and administrative expenses as well as loans for operating purposes have been paid for or made by the officers of the Company. The related party payables total $63,091and $61,091 at June 30, 2010 and 2009, respectively. The payables bear interest at six percent (6.0%), are unsecured and due upon demand. As of June 30, 2010 and 2009 the Company has accrued a total of $7,134 and $3,747 on these payables.
F-9
REPUBLIK MEDIA AND ENTERTAINMENT, LTD.
Notes to Consolidated Financial Statements
June 30, 2010 and 2009
NOTE 5 – EQUITY ACTIVITY
The Company is authorized to issue two classes of stock. The total number of shares authorized to be issued by the Company is 100,000,000 shares of common stock at a par value of $0.00001 and 10,000,000 shares of preferred stock at a par value of $0.00001 per share.
The Company did not issue any common or preferred stock during the years ended June 30, 2010 and 2009.
NOTE 6 – SUBSEQUENT EVENTS
In accordance with FASB ASC 855, Company management reviewed all material events through the date of this report and there are no material subsequent events to report.
Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As required by Rule 13a-15 under the Securities Exchange Act of 1934 (the “1934 Act”), as of June 30, 2010, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer (our principal executive officer) and our Chief Financial Officer (our principal financial officer), who concluded, that because of the material weakness in our internal control over financial reporting described below, our disclosure controls and procedures were not effective as of June 30, 2010.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. This rule defines internal control over financial reporting as a process designed by, or under the supervision of, the Company’s Chief Executive Officer and Chief Financial Officer, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. Our internal control over financial reporting includes those policies and procedures that:
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•
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Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
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|
•
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Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
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|
•
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Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
|
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, 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.
Mr. David Woo, our Chief Executive Officer and the Chief Financial Officer, conducted an evaluation of the effectiveness of our internal control over financial reporting. Based on this evaluation, our management has concluded that our internal control over financial reporting was not effective as of June 30, 2010 as the result of a material weakness. The material weakness results from significant deficiencies in internal control that collectively constitute a material weakness.
A significant deficiency is a deficiency, or combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of the registrant’s financial reporting. The Company had the following significant deficiencies at June 30, 2010:
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·
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The company is effectively insolvent, and only has one employee to oversee bank reconciliations, posting payables, and so forth, so there are no checks and balances on internal controls.
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This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to an exemption for non-accelerated filers set forth in Section 989G of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Remediation of Material Weakness
We are unable to remedy our internal controls until we are able to locate another business opportunity, or receive financing to hire additional employees. At this time, we are effectively not a going concern.
Limitations on the Effectiveness of Internal Controls
Our management, including our Chief Executive Officer and our Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting are or will be capable of preventing or detecting all errors or all fraud. Any control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements, due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns may occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risk.
Item 9B. Other Information
None
PART III
Item 10. Directors, Executive Officers and Corporate Governance
The following information sets forth the name of our current director who also is our sole executive officer, his age as of June 30, 2010 and his present positions.
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Name
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Age
|
Position Held with the Company
|
|
David Woo
|
57
|
President, Chief Executive Officer, Principal Executive Officer, Chief Financial Officer, Principal Financial Officer, Principal Accounting Officer, and Director
|
Set forth below is a brief description of the background and business experience of the executive officer and director.
David Woo has been our President, CEO, CFO, and sole director since our inception in 2007. From 2002 through 2007, Mr. Woo was a founder and President of Innovation Flooring + Furniture Design LLC, a flooring and furniture company based in Las Vegas, Nevada. Mr. Woo is a 1974 graduate of the School of the Worcester Art Museum.
Family Relationships
There are no family relationships between or among the directors, executive officers or persons nominated or chosen by us to become directors or executive officers.
Involvement in Certain Legal Proceedings
To the best of our knowledge, during the past five years, none of the following occurred with respect to a present or former director, executive officer, or employee: (1) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (2) any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (3) being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his or her involvement in any type of business, securities or banking activities; and (4) being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.
Audit Committee
We do not have a separately-designated standing audit committee. The entire board of directors performs the functions of an audit committee, but no written charter governs the actions of the board of directors when performing the functions of that would generally be performed by an audit committee. The board of directors approves the selection of our independent accountants and meets and interacts with the independent accountants to discuss issues related to financial reporting. In addition, the board of directors reviews the scope and results of the audit with the independent accountants, reviews with management and the independent accountants our annual operating results, considers the adequacy of our internal accounting procedures and considers other auditing and accounting matters including fees to be paid to the independent auditor and the performance of the independent auditor.
We do not have an audit committee financial expert because of the size of our company and our board of directors at this time. We believe that we do not require an audit committee financial expert at this time because we retain outside consultants who possess these attributes.
For the fiscal year ending June 30, 2010, the board of directors:
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1.
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Reviewed and discussed the audited financial statements with management, and
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2.
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Reviewed and discussed the written disclosures and the letter from our independent auditors on the matters relating to the auditor's independence.
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Based upon the board of directors’ review and discussion of the matters above, the board of directors authorized inclusion of the audited financial statements for the year ended June 30, 2010 to be included in this Annual Report on Form 10-K and filed with the Securities and Exchange Commission.
Code of Ethics
As of June 30, 2010, we had not adopted a Code of Ethics for Financial Executives, which would include our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.
Item 11. Executive Compensation
Compensation Discussion and Analysis
Summary Compensation Table
The table below summarizes all compensation awarded to, earned by, or paid to both to our officers and to our directors for all services rendered in all capacities to us for our fiscal years ended June 30, 2010 and 2009.
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SUMMARY COMPENSATION TABLE
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Name and
principal position
|
Year
|
Salary ($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity
Incentive Plan
Compensation
($)
|
Nonqualified
Deferred
Compensation
Earnings ($)
|
All Other
Compensation
($)
|
Total
($)
|
|
David Woo, President, Chief Executive Officer, Principal Executive Officer, Chief Financial Officer, Principal Financial Officer, Principal Accounting Officer, and Director
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2010
2009
|
0
0
|
0
0
|
0
0
|
0
0
|
0
0
|
0
0
|
0
0
|
0
0
|
Narrative Disclosure to the Summary Compensation Table
We do not have any written or oral agreements with any officer or director at this time.
Stock Option Grants
We have not granted any stock options to the executive officers or directors since our inception.
Outstanding Equity Awards at Fiscal Year-End
The table below summarizes all unexercised options, stock that has not vested, and equity incentive plan awards for each named executive officer as of June 30, 2010.
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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
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OPTION AWARDS
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STOCK AWARDS
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Name
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
Number
of
Shares
or Units
of
Stock That
Have
Not
Vested
(#)
|
Market
Value
of
Shares
or
Units
of
Stock
That
Have
Not
Vested
($)
|
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That Have
Not
Vested
(#)
|
Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
(#)
|
|
David Woo, President, Chief Executive Officer, Principal Executive Officer, Chief Financial Officer, Principal Financial Officer, Principal Accounting Officer, and Director
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Compensation of Directors
We do not compensate our directors for their service at this time.
Stock Option Plans
We did not have a stock option plan in place as of June 30, 2010.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table sets forth certain information known to us with respect to the beneficial ownership of our Common Stock as of the effective date of the Merger by (1) all persons who are beneficial owners of 5% or more of our voting securities, (2) each director, (3) each executive officer, and (4) all directors and executive officers as a group. The information regarding beneficial ownership of our common stock has been presented in accordance with the rules of the Securities and Exchange Commission. Under these rules, a person may be deemed to beneficially own any shares of capital stock as to which such person, directly or indirectly, has or shares voting power or investment power, and to beneficially own any shares of our capital stock as to which such person has the right to acquire voting or investment power within 60 days through the exercise of any stock option or other right. The percentage of beneficial ownership as to any person as of a particular date is calculated by dividing (a) (i) the number of shares beneficially owned by such person plus (ii) the number of shares as to which such person has the right to acquire voting or investment power within 60 days by (b) the total number of shares outstanding as of such date, plus any shares that such person has the right to acquire from us within 60 days. Including those shares in the tables does not, however, constitute an admission that the named stockholder is a direct or indirect beneficial owner of those shares. Unless otherwise indicated, each person or entity named in the table has sole voting power and investment power (or shares that power with that person’s spouse) with respect to all shares of capital stock listed as owned by that person or entity.
Except as otherwise indicated, all Shares are owned directly and the percentage shown is based on 5,216,000 Shares of Common Stock issued and outstanding as of June 30, 2010. Addresses for all of the individuals listed in the table below are c/o Republik Media and Entertainment, Ltd., P.O. Box 778146, Henderson, NV 89077.
| Title of class | Name and address of beneficial owner |
Amount of
beneficial ownership
|
Percent
of class
|
| Current Executive Officers & Directors: | |||
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Common
|
David Woo
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2,000,000
|
38.34%
|
|
Total of All Current Directors and Officers:
|
2,000,000
|
38.34%
|
|
|
More than 5% Beneficial Owners
|
|||
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Common
|
David Woo
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2,000,000
|
38.34%
|
|
Common
|
Ashley Esquivel
|
1,000,000
|
19.17%
|
|
Common
|
Andrew Bernardo
|
1,000,000
|
19.17%
|
| Total of All 5% Beneficial Owners | 4,000,000 | 76.68% | |
Item 13. Certain Relationships and Related Transactions, and Director Independence
Except as stated herein, none of our directors or executive officers, nor any proposed nominee for election as a director, nor any person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to all of our outstanding shares, nor any members of the immediate family (including spouse, parents, children, siblings, and in-laws) of any of the foregoing persons has any material interest, direct or indirect, in any transaction over the last two years or in any presently proposed transaction which, in either case, has or will materially affect us.
As of the date of this annual report, our common stock is traded on the OTC Bulletin Board (the “Bulletin Board”). The Bulletin Board does not impose on us standards relating to director independence or the makeup of committees with independent directors, or provide definitions of independence.
Item 14. Principal Accounting Fees and Services
Below is the table of Audit Fees (amounts in US$) billed by our auditor in connection with the audit of the Company’s annual financial statements for the years ended:
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Financial Statements for the Year Ended June 30
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Audit Services
|
Audit Related Fees
|
Tax Fees
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Other Fees
|
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2010
|
$4,750
|
$0
|
$0
|
$0
|
|
2009
|
$3,520
|
$0
|
$0
|
$0
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PART IV
Item 15. Exhibits, Financial Statements Schedules
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(a)
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Financial Statements and Schedules
The following financial statements and schedules listed below are included in this Form 10-K.
Financial Statements (See Item 8)
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(b)
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Exhibits
|
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Exhibit Number
|
Description
|
|
3.1
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Articles of Incorporation, as amended (1)
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3.2
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Bylaws, as amended (1)
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| 23.1 | Consent of Seale and Beers, CPAs |
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(1)
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Incorporated by reference to the Registration Statement on Form SB-2 filed with the Securities and Exchange Commission on December 17, 2008.
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SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
REPUBLIK MEDIA AND ENTERTAINMENT, LTD.
By: /s/ David Woo
David Woo
President, Chief Executive Officer, and Director
September 28, 2010
In accordance with Section 13 or 15(d) of the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:
By: /s/ David Woo
David Woo
President, Chief Executive Officer, and Director
September 28, 2010