SEEN ON SCREEN TV INC. - FORM 10-Q

Attached files

file	filename
EX-32.1 - SARBANES-OXLEY 906 CERTIFICATION. - SEEN ON SCREEN TV INC.	exh32-1.htm
EX-31.1 - SARBANES-OXLEY 302 CERTIFICATION. - SEEN ON SCREEN TV INC.	exh31-1.htm

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X]	QUARTERLY REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	FOR THE QUARTERLY PERIOD ENDED JANUARY 31, 2009

OR

[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 000-21812

SEEN ON SCREEN TV INC.

(Exact name of registrant as specified in its charter)

NEVADA

(State or other jurisdiction of incorporation or organization)

4017 Colby Avenue

Everett, Washington 98201

(Address of principal executive offices, including zip code.)

425-367-4668

(telephone number, including area code)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 last 90 days. YES [ ] NO [X]

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,” “non-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]
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES [ ] NO [X]

State the number of shares outstanding of each of the issuer=s classes of common equity, as of the latest practicable date: 25,384,000 as of June 30, 2009.

PART I B FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

SEEN ON SCREEN TV INC.

(formerly, FRANKLIN LAKE RESOURCES, INC.)

(An Exploration Stage Company)

Notes to Financial Statements

January 31, 2009

(unaudited)

INDEX

Balance Sheets	F-1

Statements of Operations	F-2

Statements of Cash Flows	F-3

Notes to the Financial Statements	F-4 – F-8

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Seen on Screen TV, Inc.

Balance Sheet

January 31, 2009 and January 31, 2008

				1/31/2009		1/31/2008
Assets
Current Assets
	Cash and Cash Equivalents		$	20,545	$	30,816
	Accounts Receivable			4,742
	Inventory			545,872
	Security Deposits			2,045
Total Current Assets				573,204		30,816

Fixed Assets
	Equipment			12,629		21,319
	Accumulated depreciation			(1,408)		(886)
		Total fixed assets		11,221		20,433

Other Assets
	Water Rights			6,250		6,250
	Reclamation bond			-		19,867
		Total Other Assets		6,250		26,117

Total Assets			$	590,675	$	77,366

Liabilities and Shareholder’s Equity
Current Liabilities
	Accounts Payable and accrued liabilities		$	296,712	$	12,697
	Deferred Gain on Sales of Equipment				$	8,550
	Advances from Stockholders			360,749		292,558
		Total Current Liabilities		657,461		313,805
		Total Liabilities		657,461		313,805

Preferred stock, authorized: 5,000,000 shares: par value $.001, no preferred shares outstanding

Common stock, $.001 par value; authorized 195,000,000 shares; 25,384,000 issued and outstanding at January 31, 2009				25,384		18,034

Additional paid in capital				32,810,840		32,476,350
Accumulated deficit				(32,903,011)		(32,730,823)
Total Shareholder’s Equity				(66,786)		(236,439)

Total Liabilities and Shareholder’s Equity			$	590,675		77,366

The accompanying notes are an integral part of these statements.

F-1

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Seen on Screen TV, Inc.

Income Statement

For the 3 months ended January 31, 2009 and 2008

				1/31/09		1/31/08

Income
	Sales		$	392,003	$	-
	Store rent and payroll			227,558
	Purchases			148,604
	Total Cost of Goods Sold			376,162

	Gross Profit (loss)			15,840

Expenses
	Mineral Exploration Costs					36,227
	Depreciation and Amortization Expenses					651
	General and Administrative			37,594		28,258
	Intellectual Property
	Total Expenses			37,594		65,136
Other Income
	Gain (Loss) on sale of equipment					3,390
	Gain on disposal of reclamation bond
	Precious metal sales
		Total Other Income		-		3,390


		Net Loss	$	(21,754)	$	(68,526)

	Interest expense			5,840

Net Income (loss)			$	(27,594)	$	(68,526)

Weighted Average Common Stock Outstanding				25,384,000		18,037,745
Net Loss per Common Share				(0.0011)		(0.0038)

The accompanying notes are an integral part of these statements.

F-2

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Seen on Screen TV, Inc.

Statement of Cash Flows

For the 3 months ended January 31, 2009 and January 31, 2008

			1/31/2009		1/31/2008
			$		$
Cash Flows From Operating Activities
Net Loss			(27,594)		(206,341)
Adjustments to reconcile net loss to net cash used in operating activities:
	Amortization / depreciation		-		2,604
	Gain (loss) on sale of plant equipment		-		1,540
	Contribution of capital for lease expense				6,000
	Common stock issued for equipment		-		43,500
	Gain on disposal of Reclamation Bond				(39,052)
	Increases in Shareholders advances		-		43,500
	Increase in accounts receivable		4,742
					-
Changes in operating assets and liabilities:					-
	Increase in inventory		(72,279)		-
	Increase in accounts payable and accrued liabilities		-		(13,879)

Net Cash Used in Operating Activities			(95,131)		(162,128)

Cash Flows used by Investing Activities
	Purchase of plant and equipment				(27,219)
	Sale of plant equipment				5,000
	Disposal of Reclamation Bond				58,919

Total Cash Flows Provided by (used) in Investing Activities			-		36,700

Cash Flows from Financing Activities
	Common Stock issued for cash
	Loan proceeds
	Common Stock issued for exercise of warrants				60,000
	Advances (repayments) from officers/directors/affiliates		74,562		72,854

Cash Flows Provided by Financing Activities			74,562		132,854

Net Increase (Decrease) in Cash			(20,569)		7,426

Increase in Cash and Cash Equivalents, Beginning			41,114		33,688

Increase in Cash and Cash Equivalents, End		$	20,545	$	41,114

Supplemental Disclosures
	Contribution of capital for lease expense				6,000
	Common stock issued for compensation, rent, and officers advances				232,558
	Common stock issued for unit of SOS TV LLC		17,000,000

The accompanying notes are an integral part of these statements.

F-3

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SEEN ON SCREEN TV, INC.

Notes to the Financial Statements

January 31, 2009

1. HISTORY

The company was originally incorporated as “Naxos Resources Ltd.” (“Naxos”) in British Columbia under the Canada Business Corporations Act on May 23, 1986, with its principal place of business in Vancouver. In the year 2000, the Company moved its executive and administrative offices to South San Francisco, California, USA, effectively ending its business connections with Canada.

On October 15, 2001, the shareholders approved the redomiciliation of the Company to the United States. On October 29, 2001, Articles of Incorporation and Articles of Domestication were filed with the Secretary of State of Nevada and Naxos was "continued" as a Nevada corporation under the name of Franklin Lake Resources Inc. On January 3, 2002, Industry Canada issued a Certificate of Discontinuance, formally ending the Company's legal ties to Canada. On January 9, 2002, the name change (to Franklin Lake Resources Inc.) became effective for trading purposes. At the same time, a reverse split of the Company's shares on the basis of one new share for each ten shares held also became effective and the Company received a new symbol, FKLR.

The Company was in the business of exploring for precious metals, developing processes for extracting them from the earth, and, if warranted, developing sites for possible development. As of November, 2008 has changed to a retail store operation under the name Seen On Screen TV, Inc., SONT.

2. BASIS OF PRESENTATION

These financial statements reflect all adjustments that, in the opinion of management, are necessary to present fairly the results of operations for the interim periods presented. All adjustments are of a normal recurring nature, unless otherwise disclosed.

3. SIGNIFICANT ACCOUNTING POLICIES

(a) Accounting Methods

The Company recognizes income and expense based on the accrual method of accounting.

(b) 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 amount 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.

F-4

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SEEN ON SCREEN TV, INC.

Notes to the Financial Statements

January 31, 2009

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

The Company has not adopted a policy regarding the payment of dividends and does not anticipate payments of dividends in the future.

(d) Basic and Dilutive Net Income (Loss) Per Share

Basic net income (loss) per share amounts is computed based on the weighted average number of shares outstanding in accordance with SFAS 128 “Earnings per Share.” Diluted net income (loss) per share amounts are computed using the weighted average number of common shares and common equivalent shares outstanding as if shares had been issued on the exercise of any common share rights unless the exercise becomes anti-dilutive and then only the basic per share amounts are shown in the report.

(e) Comprehensive Income

The Company adopted SFAS 130, “Reporting Comprehensive Income,” which requires inclusion of foreign currency translation adjustments, reported separately in its Statement of Stockholders’ Equity, in other comprehensive income. Such amounts are immaterial and have not been reported separately. The Company had no other forms of comprehensive income since inception.

(f) Stock Based Compensation

On November 1, 2006 the Company adopted SFAS 123, Share-Based Payments (SFAS 123R), which requires the measurement and recognition of compensation expense for all share-based awards made to employees and directors based on estimated fair values. In March 2005, the Securities and Exchange Commission issued Staff Accounting Bulletin 107 (SAB 107) relating to SFAS 123(R) regarding the adoption of the provisions of SFAS 123(R). The Company has applied the provisions of SAB 107 in its adoption of SFAS 123(R) using the modified prospective transition method, which requires the application of the accounting standards beginning in fiscal years ended after December 15, 2005.

(g) Income Taxes

The Company utilizes the liability method of accounting for income taxes. Under the liability method, deferred tax assets and liabilities are determined based on the differences between financial reporting and the tax bases of the assets and liabilities and are measured using the enacted tax rates and laws that will be in effect, when the differences are expected to reverse. An allowance against deferred tax assets is recognized when it is more likely than not, that such tax benefit will not be realized. On October 31, 2008, the Company had net operating losses to be carried forward in the amounts of approximately $32,896,871. The tax benefit of approximately $4,934,531 at October 31, 2008 has been fully offset by a valuation reserve because the use of the future benefit is doubtful since the Company has not generated taxable income since inception. The net operating loss expires starting 2008 through 2027.

F-5

SEEN ON SCREEN TV, INC.

Notes to the Financial Statements

January 31, 2009

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

Due to the uncertainty regarding the Company’s future profitability, the future tax benefits of its losses have been fully reserved and no net tax benefit has been recorded in these financial statements.

(h) Fair Value of Financial Instruments

The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, tax credit recoverable, reclamation bond, accounts payable and accrued liabilities, amount due to a director and loan payable.

(i) Recent Accounting Pronouncements

The Company does not expect that the adoption of other recent accounting pronouncements will have a material effect on its financial statements.

(j) Revenue Recognition

Revenue will be recognized on the sale and delivery of a product or the completion of a service provided.

(k) Statement of Cash Flows

For the purposes of the statement of cash flows, the Company considers all highly liquid investments with a maturity of three months or less to be cash equivalents.

(l) Financial and Concentration Risk

The Company does not have any concentration or related financial credit risk.

4. COMMON STOCK

The trading volume of the Company’s shares is low and the price per share is highly volatile based upon relatively small amounts of trading activity. The price of shares in sales by the Company for cash and the values of shares issued in other transactions are determined by private negotiations between the parties involved.

On March 19, 2009, the Company filed Articles of Amendment to consolidate the issued and outstanding common shares of the Company at a 2 for 5 reverse split. As a result, the issued and outstanding shares decreased from 20,960,325 to 8,384,130 shares of common stock. All share amounts have been retroactively adjusted for all periods presented.

F-6

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SEEN ON SCREEN TV, INC.

Notes to the Financial Statements

January 31, 2009

5. RELATED PARTY TRANSACTIONS AND OPERATING LEASES

During the periods covered by this report the Company rented office space in Everett, Washington from a company owned by stockholders Roula and Antoine Jarjour at $2,000 per month. There is no formal lease at this time.

6. GOING CONCERN

The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. The Company has incurred losses since its inception and has not yet been successful in establishing profitable operations. These factors raise substantial doubt about the ability of the Company to continue as a going concern. Continuance of the Company as a going concern is dependent upon obtaining additional working capital through additional sales of the Company’s common stock. There is no assurance that the Company will be successful in raising this additional capital or achieving profitable operations. The Company is reorganizing the location and operating procedures for its stores to improve its profit margins. By the end of April the Company will have three stores in Florida, two stores in California, and one in Washington.

The accompanying financial statements do not include any adjustments that might result from the outcome of these uncertainties.

7. SUBSEQUENT EVENTS

a)	On March 19, 2009, Franklin Lake Resources Inc. (“FKLR”) underwent a corporate name change to “Seen on Screen TV” (“SONT”) and changed its year end to December 31.

b)	On March 19, 2009, the Company amended the number of authorized shares and the par value as follows:

i)	5,000,000 shares of preferred, $0.001 par value per share

ii)	195,000,000 shares of common stock, $0.001 par value per share.

F-7

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SEEN ON SCREEN TV, INC.

Notes to the Financial Statements

January 31, 2009

7. SUBSEQUENT EVENTS (continued)

On April 6, 2010 the Company entered into stock purchase agreement and plan of reorganization with Antoine Jarjour and Roula Jarjour, husband and wife, wherein the company agree to acquire all of the ownership units of Seen on Screen TV, LLC in exchange for 17,000,000 restricted shares of common stock. The effective date of the Agreement was November 1, 2008.

e) The Company has incurred lease costs for its retail stores of:

2009	$	200,648
2010		219,530
2011		42,441

There are no long term leases in effect at January 31, 2009.

8. EXECUTIVE COMPENSATION

The Company does not have any formal plans or standard arrangements to compensate its directors for their services as directors, other than the occasional granting of stock options. No options have been awarded during the past three years and no options were outstanding at the end of the fiscal year.

The following table sets forth a summary of compensation received by each of our officers and directors who received compensation from the Company during the three months covered by this report.

Antoine Jarjour	$	45,000
Roula Jarjour		36,000
George Jarjour		20,000
Kamal Alawas		30,000

F-8

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ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

We were originally incorporated as “Naxos Resources Ltd.” (“Naxos”) in British Columbia under the Canada Business Corporations Act on May 23, 1986, with our principal place of business in Vancouver. In 2000, we moved our executive and administrative offices to South San Francisco, California, USA, effectively ending its business connections with Canada.

On October 15, 2001, the our shareholders approved the change of our domicile to the United States. On October 29, 2001, Articles of Incorporation and Articles of Domestication were filed with the Secretary of State of Nevada and Naxos was "continued" as a Nevada corporation under the name of Franklin Lake Resources Inc. On January 3, 2002, Industry Canada issued a Certificate of Discontinuance, formally ending our legal ties to Canada. On January 9, 2002, we changed our name to Franklin Lake Resources Inc. At the same time, we reverse split our common shares on the basis of one new share for each ten shares and received a new trading symbol - FKLR.

We were in the business of exploring for precious metals, developing processes for extracting them from the earth, and, if warranted, developing sites for possible development. As of November 2008 we changed our business purpose to a retail store operation under the name Seen On Screen TV, Inc., SONT.

On October 6, 2008 we entered into an asset purchase agreement with Antoine Jarjour and Roula Jarjour, husband and wife, wherein we agreed to purchase certain assets from Mr. and Mrs. Jarjour in exchange for 17,000,000 post reverse split shares of common stock.

On November 19, 2008, we amended the foregoing agreement to revise the list of assets to be acquired by us.

On November 12, 2008, we reverse split our common stock on the basis of 2 shares for each 5 shares of common stock outstanding. Prior to the reverse split, we had 20,960,325 shares of common stock outstanding. After the reverse split we will have 8,384,130 shares of common stock outstanding, each with a par value of $0.001 per share. Outstanding certificates will be exchanged for new certificates reflecting the post reverse split shares of common stock. Preferred shares were not affected. We have no shares of preferred stock outstanding at this time.

On November 13, 2008, we amended our articles of incorporation and changed our name from Franklin Lake Resources Inc. to Seen on Screen TV Inc. We also amended our articles of incorporation to increase our authorized capital to 200,000,000 shares comprised of 195,000,000 shares of common and 5,000,000 shares of preferred stock, each with a par value of $0.001 per share.

Our financial information for the period ended January 31, 2009 reflected our new retail store operations and the acquisition of assets from Antoine and Roula Jarjour. As a result of the change in business direction and the acquisition of assets our balance sheet reflects an increase in total assets from $77,366 at January 31, 2008 to $90,675 at January 31, 2009; and increase in total liabilities from $313,805 at January 31, 2008 to $657,461 at January 31, 2009; and a decrease in shareholder deficit from $236,439 at January 31, 2008 to $66,786 at January 31, 2009. For the period ending January 31, 2008, we did not generate any revenues while we were engaged in the mining business. For the period ending January 31, 2009 we generated gross sales of $392,003 with cost of goods sold of $376,162 resulting in a gross profit of $15,840. We incurred expenses of $37,594 resulting in a net loss of $27,594.

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ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 4.

CONTROLS AND PROCEDURES

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure based closely on the definition of disclosure controls and procedures in Rule 13a-15(e). The Company’s disclosure controls and procedures are designed to provide a reasonable level of assurance of reaching the Company’s desired disclosure control objectives. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. The Company’s certifying officer has concluded that the Company’s disclosure controls and procedures are not effective in reaching that level of assurance.

As of the end of the period being reported upon, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and the Company’s Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective.

Management’s Report on Internal Control over Financial Reporting

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Section 13a-15(f) of the Securities Exchange Act of 1934, as amended). Internal control over financial reporting is a process designed by, or under the supervision of, the Company’s CFO to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external reporting purposes in conformity with U.S. generally accepted accounting principles.

As of the date of this report, management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting based on the framework established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on the criteria established by COSO management concluded that the Company’s internal control over financial reporting was not effective as a result of the identification of the material weaknesses described below.

A material weakness is a deficiency or combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

Specifically, management identified the following control deficiencies. (1) The Company has not properly delegated duties to any individual to be responsible for financial reporting.

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Accordingly, while the Company has identified certain material weaknesses in its system of internal control over financial reporting, it believes that it has taken reasonable steps to ascertain that the financial information contained in this report is in accordance with generally accepted accounting principles.

Changes in Internal Control over Financial Reporting

There was no changes in the Company’s internal controls that occurred during the reported period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Remediation Plan

Addition of staff

We have identified that additional staff will be required to properly segment the accounting duties of the Company. However, we do not currently have resources to fulfill this part of our plan and will be addressing this matter once sufficient resources are available.

PART II. OTHER INFORMATION

ITEM 1A.

RISK FACTORS

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 6.

EXHIBITS.

The following documents are included herein:

Exhibit No.	Document Description

31.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to section 906 of the Sarbanes-Oxley Act of 2002.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the Registrant and in the capacities on this 28th day of March, 2012.

	SEEN ON SCREEN TV INC.

	BY:	ANTOINE JARJOUR
		Antoine Jarjour
		President, Principal Executive Officer, Treasurer, Principal Financial Officer, and Principal Accounting Officer

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EXHIBIT INDEX

Exhibit No.	Document Description

31.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to section 906 of the Sarbanes-Oxley Act of 2002.

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SEEN ON SCREEN TV INC. - FORM 10-Q - March 28, 2012

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SEEN ON SCREEN TV INC. Reports