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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended March 31, 2013

Commission file number: 333-156832
I.R.S. Employer I.D. #: 56-2646829
 
 
a Delaware corporation

8200 Wilshire Boulevard,
Suite 200
Beverly Hills, CA 90211
310.461.3737
 
We have no securities registered under section 12(b) or 12(g) of the Securities Exchange Act of 1934.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. o Yes x No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act from their obligations under those Sections. x Yes o No

Indicate by check mark whether the registrant has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports). x Yes o 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 preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). o Yes  o No [not required]

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 amendments to this Form 10-K. 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.

Large accelerated filer
o
Accelerated filer
o
Non-accelerated filer
o
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 Act). o Yes x No

The aggregate market value of the voting common equity held by non-affiliates, computed by reference to the average bid and asked price of such common equity, as of the last business day of our most recently completed fiscal year, was approximately $1.7 million.

The number of shares outstanding of our Common Stock is 2,245,945,787 as of July 16, 2013.

The number of shares outstanding of our Preferred Stock is 10,000 as of July 16, 2013.

There are no other classes of stock.
 


 
 

 
 
TABLE OF CONTENTS
 
 
 
 
Page
 
PART I
 
 
     
ITEM 1. 
Business.
    3  
 
 
       
ITEM 1A.
Risk factors.
    4  
 
 
       
ITEM 1B.
Unresolved staff comments.
    6  
 
 
       
ITEM 2.
Properties.
    6  
 
 
       
ITEM 3.
Legal proceedings.
    6  
 
 
       
PART II
 
 
       
ITEM 5.
Market for registrant's common equity, related Stockholder matters and issuer purchases of equity securities.
    7  
 
 
       
ITEM 6.
Selected Financial Data
    9  
 
 
       
ITEM 7.
Management's discussion and analysis of financial condition and results of operations.
    9  
 
 
       
ITEM 7A
Quantitative and qualitative disclosures about market risk.
    16  
 
 
       
ITEM 8
Financial statements and supplementary data
    17  
 
 
       
 
Consolidated Balance Sheet
    18  
 
 
       
 
Consolidated Statement of Operations
    19  
 
 
       
 
Consolidated Statements of Changes in Shareholders’ Deficit
    20  
 
 
       
 
Consolidated Statement of Cash Flows
    21  
 
 
       
 
Note to Consolidated Financial Statement
    22  
 
 
       
ITEM 9
Changes in and disagreements with accountants on accounting and financial disclosure.
    36  
 
 
       
ITEM 9A.
Controls and Procedures.
    36  
 
 
       
ITEM 9B.
Other Information
    37  
 
 
       
PART III
 
 
       
ITEM 10.
Directors, executive officers, and corporate governance
    38  
 
 
       
ITEM 11.
Executive compensation.
    39  
 
 
       
ITEM 12.
Security ownership of certain beneficial owners and management and related stockholder matters.
    40  
 
 
       
ITEM 13.
Certain relationships and related transactions, and director independence
    41  
 
 
       
ITEM 14.
Principal accountant fees and services.
    41  
 
 
       
ITEM 15.
Exhibits and financial statement schedules.
    41  
 
 
2

 
 
PART I
 
ITEM 1.  BUSINESS.
 
Writers’ Group Film Corp (sometimes the "Company") is a Delaware corporation incorporated on March 9, 2007. On February 25, 2011, we acquired all of the outstanding shares of capital stock of Front Row Networks, Inc., a Nevada corporation (sometimes “Front Row”) from its shareholders and the Company, through Front Row Networks Inc., is engaged in content creation to produce, acquire and distribute live concerts in three dimensional format (“3D”) for initial worldwide digital broadcast into digitally-enabled movie theaters and thereafter, licensed to DVD and Blu-Ray retailers, free TV broadcasters, cable and emerging 3D cable channels, and mobile streaming providers. We believe that the licensing of the distribution rights to the live concerts will be the primary source of revenue for the Company. We further believe that we will be able to generate revenue when we present live concerts in 3D, at lower ticket prices, to a worldwide fan base in a cost-effective manner.
 
The Company intends to acquire and license certain merchandising rights from the content owners and event sponsors that will enable the Company to sell merchandise, such as clothing, and other products, tailored to each artist or sponsor, in movie theaters where the event is exhibited. We believe that by packaging new theatrical events with existing catalogues, Front Row can create a series of theatrical content, and an identity as the premiere brand in alternative theatrical content.
 
The Company believes that the theatrical filmed entertainment and music industries are experiencing major structural and technological changes, including a trend towards live concert tours in the music industry, and increased demand for 2D and 3D alternative content, or non-studio event films that can be exhibited in cinemas during the off-peak periods. Although the industry is dominated by the major studios, record labels, and concert promotional companies, the Company believes that there is still opportunity for it to provide targeted independent production of alternative theatrical event content. According to industry analysts, less than 5% of theater seats are occupied Monday through Thursday. Exhibitors want alternative content to attract audiences during off peak times. With major studios distributing fewer and fewer high budget films, both exhibitors and audiences are eager for more content.
 
We anticipate that the selection of any content and our participation in each project may be complex and extremely risky. Further, there can be no assurance that any of our digital broadcasts or theatrical releases that are completed will be successfully marketed. Due to current general economic condition and the shortages of available capital, there is no assurance that we will be able to identify and evaluate and produce marketable content. 

We intend to use third party project financing wherever it is possible for our 3D productions. This ability will allow the Company to attract higher quality independent projects. Typically a single purpose entity specific to the film project will be established to produce and finance the concert. This entity then contracts with the financing parties and the artists and sponsors. We will be competing, however, with other established and well-financed entities.
 
While the core business of Front Row Networks remains the production, acquisition and distribution of 2D and 3D theatrical event programming, the Company seeks to secure and distribute non-concert alternative theatrical programming, such as animated family content, music-related documentaries, and other gaming content that can be distributed via mobile and internet platforms. It is the Company’s strategic goal to acquire the broadest range of rights for exclusive programming, we may finance all or part of the production of our entertainment programs, acquire rights to completed projects, acquire content catalogues, or acquire companies which own or control content catalogues. We believe that we are positioned to benefit from the market growth and increased demand for alternative theatrical content and mobile content, and we intend to continue expansion of our exclusive library content throughout the coming year.
 
 
3

 

ITEM 1A. RISK FACTORS.

1.  Our auditor has expressed substantial doubt regarding our ability to continue as a going concern.

We continue to incur losses in our operations. While we expect to generate revenues within the next fiscal year, there is no assurance that we will be successful.
 
2.  The creation of content for the entertainment industry is highly competitive and we will be competing with companies with much greater resources than we have.
 
The business in which we engage is significantly competitive. Each of our primary business operations is subject to competition from companies which, in some instances, have greater production, distribution and capital resources than us. We compete for relationships with a limited supply of facilities and talented creative personnel to produce our films. We will compete with major entertainment companies, such as Sony, Warner Brothers, Disney, AEG, and Live Nation for content. We also anticipate that we will compete with a large number of United States-based and international distributors and sub-distributors of independent films and alternative content including divisions of Sony/MGM, Cinedigm Digital Cinema Corp., NCM Fathom, and Screenvision in the production of alternative event content that may be expected to appeal to national and international audiences. More generally, we anticipate we will compete with various other leisure-time activities, such as home videos, movie theaters, personal computers and other alternative sources of entertainment.
 
The production and distribution of Blu-Ray and video disks are significantly competitive businesses, as they compete with each other, in addition to other forms of entertainment and leisure activities. There will be a proliferation of free TV broadcasters, cable and emerging 3D cable channels, and mobile streaming providers looking for any content, to include content that is not related live concerts.
 
There is also active competition among all production companies in the entertainment and related industries for services of producers, directors, musicians and others and for the acquisition of literary properties. The increased number of theatrical films released in the United States has resulted in increased competition for theater space and audience attention and may have an effect on competing live 3D event and concert broadcasting.
 
Revenues for any entertainment products depend in part on general economic conditions, but the competitive situation of a producer of films and concerts is still greatly affected by the quality of, and public response to, the entertainment product that the artist makes available to the marketplace.
 
There is strong competition throughout the home video industry, both from home video subsidiaries of several major motion picture studios and from independent companies, as well as from new film viewing opportunities such as pay-per-view.
 
3.  Audience acceptance of our content will determine our success, and the prediction of such acceptance is inherently risky.
 
We believe that our live concert theatrical success will be dependent upon general public acceptance, marketing, advertising and the quality of the production. The Company's production will compete with numerous independent and foreign productions, in addition to productions produced and distributed by a number of major domestic companies, many of which are divisions of conglomerate corporations with assets and resources substantially greater than that of ours. Our management believes that in recent years with the current promotion of 3D movies and equipment to show 3D productions, that there has been an increase in competition in virtually all facets of our business. The growth of pay-per-view television and the use of home video products may have an effect upon theater attendance and non-theatrical motion picture distribution. As we may distribute productions to all of these markets, it is not possible to determine how our business will be affected by the developments, and accordingly, the resultant impact on our financial statements. Moreover, audience acceptance can be affected by any number of things over which we cannot exercise control, such as a shift in leisure time activities or audience acceptance of a particular style of music or artist.
 
 
4

 
 
4.  The competition for booking screens may have an adverse effect on theatrical revenues.
 
In the distribution of motion pictures, there is very active competition to obtain bookings of pictures in theaters and television networks and stations throughout the world. A number of major motion picture companies have acquired motion picture theaters. Such acquisitions may have an adverse effect on our distribution endeavors and our ability to book certain theaters which, due to their prestige, size and quality of facilities, are deemed to be especially desirable for motion picture bookings.
 
5.  We have limited financial resources and there are risks we may be unable to acquire financing when needed.
 
To achieve and maintain competitiveness, we may be required to raise substantial funds. Our forecast for the period for which our financial resources will be adequate to support our operations involves risks and uncertainties and actual results could fail as a result of a number of factors. We anticipate that we may need to raise additional capital to develop, promote and distribute our live concerts and to acquire property rights of the artists. Such additional capital may be raised through public or private financing as well as borrowings and other sources. Public or private offerings may dilute the ownership interests of our stockholders. Additional funding may not be available under favorable terms, if at all. If adequate funds are not available, we may be required to limit our operations significantly or to obtain funds through entering into arrangements with collaborative partners or others that may require us to relinquish rights to certain products and services that we would not otherwise relinquish and thereby reduce revenues to the company. 
 
6.  We are at the risk of mobile telephone and internet competition which may develop and the effects of which we cannot predict.
 
The mobile telephone application and internet market is new, rapidly evolving and intensely competitive. We believe that the principal competitive factors in maintaining a mobile telephone application and an internet business are selection, convenience of download and other features, price, speed and accessibility, customer service, quality of image and site content, and reliability and speed of fulfillment. Although we intend to be able to compete in this market, in 2D and maybe 3D when technology is further developed, many potential competitors have longer operating histories, more customers, greater brand recognition, and significantly greater financial, marketing and other resources. In addition, larger, well-established and well-financed entities may acquire, invest in, or form joint ventures as the Internet, and e-commerce in general, continue to become more widely accepted.
 
In addition, we will face competition on any sale of merchandise that is tailored to an artist and sponsor, or either. Many of our existing competitors, in addition to a number of potential new competitors, have significantly greater financial, technical and marketing resources than we do.
 
7.  We are at risk of technological changes to which we may be unable to adapt as swiftly as our competition.
 
We believe that our future success will be partially affected by continued growth in the use of digital and 3D broadcasting. The production, acquisition and distribution of live concerts in movie theaters and by DVD and Blu-Ray retailers, free TV broadcasters, cable and emerging 3D cable channels, and mobile streaming providers are still relatively new, and predicting the extent of further growth, if any, are difficult. The market for 3D content is characterized by rapid technological developments, evolving industry standards and customer demands and frequent new product introductions and enhancements. Our failure to adapt to any technological developments effectively could adversely affect our business, operating results, and financial condition.
 
 
5

 
 
8.  The DVD and Blu-Ray and the distribution of entertainment content and related materials are at a high risk for piracy which may affect our earnings.
 
The entertainment content distribution industry, including us, may continue to lose an indeterminate amount of revenue as a result of piracy both in the country to unauthorized copying from our product at post production houses, copies of prints in circulation to theaters, unauthorized videotaping at theaters and other illegal means of acquiring our copy written material. The USTR has placed Argentina, Brazil, Egypt, Indonesia, Israel, Kuwait, Lebanon, Pakistan, the Philippines, Russia, Ukraine and Venezuela on the 301 Special Watch List for excessive rates of piracy of motion pictures and optical disks. The USTR has placed Azerbaijan, Bahamas, Belarus, Belize, Bolivia, Bulgaria, Colombia, the Dominican Republic, Ecuador, Hungary, Italy, Korea, Latvia, Lithuania, Mexico, Peru, Romania, Taiwan, Tajikistan, Thailand, and Uzbekistan on the watch list for excessive piracy.
 
ITEM 1B. UNRESOLVED STAFF COMMENTS.

We have no unresolved comments from the Securities and Exchange Commission.

ITEM 2.  PROPERTIES.
 
We utilize an executive office at 8200 Wilshire Boulevard, Suite 200, Beverly Hills, California 90211. This space is located near the major production studios in Los Angeles County. Our rent consists of 200 square feet at $ 199.00 per month pursuant to a lease for one year.
 
ITEM 3.  LEGAL PROCEEDINGS.
 
There is no litigation pending or threatened by or against the Company.
 
 
6

 
 
PART II
 
ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
 
(a) Market Price.
 
The Company's common stock is publicly traded in the over-the-counter market in the OTC Bulletin Board System under the ticker symbol WRIT. The following table sets forth the reported high and low prices of our common stock for each quarter during the fiscal year ended March 31, 2013 and 2012. The prices reflect inter-dealer prices without mark-ups mark-downs, or commissions, and may not necessarily reflect actual transactions.

Fiscal Year Ended March 31, 2013
 
Quarter
 
High
 
 
Low
 
 
 
 
 
 
 
 
First
 
 
.0057
 
 
 
.0015
 
Second 
 
 
.0045
 
 
 
.0006
 
Third
 
 
.0019
 
 
 
.0005
 
Fourth 
 
 
.0014
 
 
 
.0005
 

Fiscal Year Ended March 31, 2012
 
Quarter
 
High
 
 
Low
 
 
 
 
 
 
 
 
First
 
 
.0619
 
 
 
.0155
 
Second 
 
 
.0170
 
 
 
.0065
 
Third
 
 
.0090
 
 
 
.0012
 
Fourth 
 
 
.0070
 
 
 
.0029
 
 
The Securities and Exchange Commission adopted Rule 15g-9, which established the definition of a "penny stock," for purposes relevant to the Company, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require: (i) that a broker or dealer approve a person's account for transactions in penny stocks; and (ii) the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased. In order to approve a person's account for transactions in penny stocks, the broker or dealer must (i) obtain financial information and investment experience and objectives of the person; and (ii) make a reasonable determination that the transactions in penny stocks are suitable for that person and that person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the Commission relating to the penny stock market, which, in highlight form, (i) sets forth the basis on which the broker or dealer made the suitability determination; and (ii) that the broker or dealer received a signed, written agreement from the investor prior to the transaction. Disclosure also has to be made about the risks of investing in penny stock in both public offering and in secondary trading, and about commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.
 
 
7

 
 
(b) Holders.
 
There are 148 holders of record of the Company's Common Stock. 
 
Currently, a certain number of our issued and outstanding shares of Common Stock held by non-affiliates are eligible for sale under Rule 144 promulgated under the Securities Act of 1933, as amended, subject to certain limitations included in said Rule. In general, under Rule 144, a person (or persons whose shares are aggregated), who has satisfied a six month holding period, under certain circumstances, has unlimited public resale under said Rule if the seller complies with said Rule

In summary, Rule 144 applies to affiliates (that is, control persons) and non-affiliates when they resell restricted securities (those purchased from the issuer or an affiliate of the issuer in nonpublic transactions) issued by a shell company. Non-affiliates reselling restricted securities, as well as affiliates selling restricted or non-restricted securities, are not considered to be engaged in a distribution and, therefore, are not deemed to be underwriters as defined in Section 2(11) if the seller complies with said Rule.

(c) Dividends.

We have declared no stock or cash dividends and we do not intend to declare or pay any dividends in the future.
 
(d) Application of California law.
 
Section 2115 of the California General Corporation law provides that a corporation incorporated under the laws of a jurisdiction other than California, but which has more than one-half of its "outstanding voting securities" and which has a majority of its property, payroll and sales in California, based on the factors used in determining its income allocable to California on its franchise tax returns, may be required to provide cumulative voting until such time as the Company has its shares listed on certain national securities exchanges, or designated as a national market security on NASDAQ (subject to certain limitations). Accordingly, holders of our Common Stock may be entitled to one vote for each share of Common Stock held and may have cumulative voting rights in the election of directors. This means that holders are entitled to one vote for each share of Common Stock held, multiplied by the number of directors to be elected, and the holder may cast all such votes for a single director, or may distribute them among any number of all of the directors to be elected.
 
(e) Purchases of Equity Securities.
 
We (and affiliated purchasers) have made no purchases or repurchases of any securities of the Company or any other issuer.
 
(f) Securities Authorized for Issuance under an Equity Compensation Plan.
 
We have not authorized the issuance of any of our securities in connection with any form of equity compensation plan.
 
 
8

 
 
(g) Recent Sale of Unregistered Securities
 
During the year ended March 31, 2013 we sold and issued an aggregate of 331,197,000 shares of common stock in exchange for services. The sale and issuance of the shares was exempt from registration under the Securities Act of 1933, as amended, by virtue of section 4(2) as a transaction not involving a public offering. Each of the three shareholders had acquired the shares for investment and not with a view to distribution to the public. All of these shares had been issued for investment purposes in a "private transaction" and were "restricted" shares as defined in Rule 144 under the Securities Act of 1933, as amended.
 
ITEM 6.  SELECTED FINANCIAL DATA.
 
Not applicable to smaller reporting companies.
 
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION and RESULTS OF OPERATIONS.
 
Special Note Regarding Forward Looking Statements
 
In addition to historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We use words such as “believe,” “expect,” “anticipate,” “project,” “target,” “plan,” “optimistic,” “intend,” “aim,” “will” or similar expressions which are intended to identify forward-looking statements. Such statements include, among others, those concerning market and industry segment growth and demand and acceptance of new and existing products; any projections of sales, earnings, revenue, margins or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements regarding future economic conditions or performance; as well as all assumptions, expectations, predictions, intentions or beliefs about future events. You are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including those identified in Item 1A “Risk Factors” in our annual report on Form 10-K for fiscal year ended March 31, 2012, as well as assumptions, which, if they were to ever materialize or prove incorrect, could cause the results of the Company to differ materially from those expressed or implied by such forward-looking statements. Forward looking statements made by penny stock issuers are excluded from the safe harbors in Section 27A of the Securities Act of 1933 and in Section 21E of the Securities Exchange Act of 1934.

Readers are urged to carefully review and consider the various disclosures made by us in this report and our other filings with the Security and Exchange Commission (“SEC”). These reports attempt to advise interested parties of the risks and factors that may affect our business, financial condition and results of operations and prospects. The forward-looking statements made in this report speak only as of the date hereof and we disclaim any obligation, except as required by law, to provide updates, revisions or amendments to any forward-looking statements to reflect changes in our expectations or future events.

Overview
 
Writers’ Group Film Corp. (“we”, “us”, “our”, “WRIT”, or the “Company”) was incorporated in Delaware on March 9, 2007 to produce films, television programs and similar entertainment programs for various media formats.
 
 
9

 
 
Front Row Networks (“FRN”) was incorporated on July 27, 2010 in the State of Nevada. The Company is a content creation company which intends to produce, acquire and distribute live concerts in 3D for initial worldwide digital broadcast into digitally-enabled movie theaters. This concept, known in the industry as alternative content, is intended to present live events theatrically in 2D and 3D, at lower ticket prices, to a massive fan base worldwide in a cost-effective manner. Following the initial theatrical run, the distribution rights to the events will be licensed to DVD and Blu-Ray retailers, Free TV broadcasters, cable and emerging 3D cable channels, and mobile streaming providers. Front Row Networks will also sell merchandising, such as clothing, and other goods and products, tailored to each Event, Artist and/or each Sponsor, in movie theaters where the concert is exhibited
 
In February 2011, FRN completed a reverse acquisition transaction through a share exchange with WRIT, whereby WRIT acquired 100% of the issued and outstanding capital stock of FRN in exchange for 100,000,000 shares of the Common Stock of WRIT. As a result of the reverse acquisition, FRN became WRIT’s wholly-owned subsidiary and the former FRN’s shareholders became controlling stockholders of WRIT. The share exchange transaction with WRIT was treated as a reverse acquisition, with FRN as the accounting acquirer and WRIT as the acquired party.
 
Consequently, the assets and liabilities and the historical operations that will be reflected in the consolidated financial statements for periods prior to the Share Exchange Agreement will be those of FRN and will be recorded at the historical cost basis. After the completion of the Share Exchange Agreement, the Company’s consolidated financial statements will include the assets and liabilities of both FRN and WRIT, the historical operations of FRN and the operations of WRIT from the closing date of the Share Exchange Agreement.
 
On July 7, 2011, we modified our February 2011 Share Exchange Agreement and agreed to assume $100,000 in new debt which is shown as a reduction of our Paid-In Capital.
 
Financial Performance Highlights
 
The following summarizes certain key financial information for the fiscal year ended March 31, 2013 and 2012:
 
·
Revenues: Our revenues were $8,855 and $397,000 for the fiscal years ended March 31, 2013 and 20for 12.
 
·
Net loss: Net loss was $392,769 and $216,784 for the fiscal years ended March 31, 2013 and 2012.
 
 
10

 
 
Results of Operations
 
The following table sets forth key components of our results of operations for the fiscal years ended March 31, 2013 and 2012.
 
 
 
For the Year
Ended
03/31/2013
   
For the Year Ended
03/31/2012
 
Total Revenue
 
$
8,855
   
$
397,000
 
Operating Expenses:
               
Wages and benefits
   
248,069
     
273,571
 
Audit and accounting
   
55,122
     
59,125
 
Legal fee
   
16,839
     
150,539
 
Other general and administrative
   
122,116
     
161,412
 
Loss from operations
   
(433,291
)
   
(247,647
)
Loss on extinguishment of debt
   
-
     
(8,189)
 
Gain on derivative liability
   
193,155
     
59,798
 
Interest expense
   
(152,633
)
   
(20,746
)
Net loss
 
$
(392,769
)
 
$
(216,784
)

Fiscal Year Ended March 31, 2013 Compared to Fiscal Year Ended March 31, 2012

Revenues.  Revenues decreased 98% to $8,855 for the fiscal year ended March 31, 2013 from $397,000 for the fiscal year ended March 31, 2012, due to a decrease in available produced and acquired content available for distribution.

Revenues in the amount of $8,855 for the fiscal year ended March 31, 2013 were comprised of $8,855 from 3D Conversion Rights LLC (“3D Conversion Rights”), a company wholly owned by Mr. John Diaz, the former CEO and major shareholder of the Company.

Revenues for the fiscal year ended March 31, 2012 were derived from a license fee of $172,000 from Anvil International, Ltd. (“Anvil International”) and a license fee of $225,000 from 3D Conversion Rights. The Company granted to Anvil International and 3D Conversion Rights the exclusive right and license under copyright, to distribute, transmit, display, exhibit, project, license, simulcast, perform and otherwise exploit certain 2D and 3D completed motion pictures based upon live concert performances.
 
 
11

 
 
Wages and benefits. Wages and benefits expenses decreased 9.3% to $248,069 for the fiscal year ended March 31, 2013 from $273,571 for the fiscal year ended March 31, 2012. The decrease is mainly due to the minimal personnel cost during the year. The wages and benefits expenses for the fiscal year ended March 31, 2013 and 2012 include employee stock compensation in the amount of $192,368 and $85,000, respectively.

Audit and accounting. Audit and accounting expenses was $55,122 for the fiscal year ended March 31, 2013. The decrease in the audit and accounting expense is mainly related to the change of accounting consultants.

Legal fee. Legal Fee decreased 88.8% to $16,839 for the fiscal year ended March 31, 2013 from $150,539 for the fiscal year ended March 31, 2012. The high legal fee in the fiscal year ended March 31, 2012 is mainly related to the George Sharp lawsuit, which is discussed in more details in Note 9 to our consolidated financial statements.

Other general and administrative expenses. Other general and administrative expenses decreased to $122,116 for the fiscal year ended March 31, 2013 from $161,412 for the fiscal year ended March 31, 2012.Those expenses consist primarily of company’s business development, consulting fees and other expenses incurred in connection with general operations.

Loss from operations. Our loss from operations was $433,291 for the fiscal year ended March 31, 2013 and $247,647 for the period ended March 31, 2012.

Loss on extinguishment of debt. We recorded a loss on extinguishment of debt of $0 for the fiscal year ended March 31, 2013 and $8,189 for the fiscal year ended March 31, 2012. The $8,189 loss resulted from the recognition of derivative liability in debt amendment. See more discussion in Note 7.

Gain or loss from derivative liability. We recorded a gain from derivative liability of $193,155 and 59,798 for the fiscal year ended March 31, 2013 and 2012, which is discussed in more detail in Note 5 “Convertible Debt”, Note 6 “Convertible Debt – Related Party” and Note 7 “Derivative Liabilities” to our consolidated financial statements.

Interest expense. We incurred $152,633 interest expense for the fiscal year ended March 31, 2013, and $20,746 interest expense for the fiscal year ended March 31, 2012. The increase in interest expense is mainly due to additional borrowings and debt discount amortization.

Net loss. As a result of the foregoing factors, we generated a net loss of $392,769 and $216,784 for the fiscal year ended March 31, 2013 and 2012, respectively.
 
 
12

 
 
Liquidity and Capital Resources

As reflected in the accompanying consolidated financial statements, the Company has accumulated deficits of $624,261 at March 31, 2013 that includes losses of $392,769 for the fiscal year ended March 31, 2013 and losses of $216,784 for the fiscal year ended March 31, 2012. The Company also had a working capital deficiency of $214,499 as of March 31, 2013 and a working capital deficiency of $697,902 as of March 31, 2012. These factors raise substantial doubt about the ability of the Company to continue as a going concern. Although management is currently attempting to implement its business plan, and is seeking additional sources of equity or debt financing, there is no assurance these activities will be successful.

As of March 31, 2013 and 2012, we have $1,143and $15,599 cash and cash equivalents, respectively. The following table provides detailed information about our net cash flow for all financial statement periods presented in this report. To date, we have financed our operations primarily through cash flows from operations and borrowings from third and related parties.

 
 
For the Year
Ended
3/31/2013
   
For the Year Ended
 03/31/2012
 
Net cash used in operating activities
  $ (164,736 )   $ (226,299 )
Net cash provided by investing activities
    -       13,500  
Net cash provided by financing activities
    150,280       169,800  
Net decrease in cash and cash equivalents
    (14,456 )     (42,999 )
Cash and cash equivalents at beginning of the period
    15,599       58,598  
Cash and cash equivalents at end of the period
  $ 1,143     $ 15,599  
 
Operating activities

Cash used in operating activities of $164,736 for fiscal year ended March 31, 2013 reflected our net loss of $392,769, adjusted for non-cash expenses, consisting primarily of $193,155 of gain on derivative liability, $254,340 of stock based compensation to employee, consultant and other services, $138,758 of amortization of debt discount, $2,500 of amortization of deferred financing costs, and $5,449 imputed interest on related party loan. Additional major sources of cash include decreases in related party accounts receivable of $46,800. Uses of cash included a decrease in accounts payable and accrued liability of $25,102

Cash used in operating activities of $226,299 for fiscal year ended March 31, 2012 reflected our net loss of $216,784, adjusted for revenue of $303,000 settled by debt cancellation and non-cash expenses, consisting primarily of $59,798 of gain on derivative liability, $8,189 of loss of debt extinguishment, $246,975 of stock based compensation to employee, consultant and other services, $12,835 of amortization of debt discount and $4,845 imputed interest on related party loan. Additional sources of cash include decreases in accounts receivable of $24,800 and increase in accounts payable and accrued liability of $97,592. Uses of cash included an increase in related party accounts receivable of $46,800.
 
 
13

 
 
Investing activities
 
The net cash provided by or used in investing activities is primarily due to funds lent to related parties. During the fiscal year ended March 31, 2013 and 2012, the related parties repaid $0 and $13,500 of the borrowing from the Company, respectively.
 
Financing activities
 
Net cash provided by financing activities of 150,280 for the fiscal year ended March 31, 2013 includes $116,000 of funds borrowed from third party, $35,000 of shares issued for cash and $2,780 of advances from related party, offset by $3,500 paid for deferred financing costs.

Net cash provided by financing activities of $169,800 for the fiscal year ended March 31, 2012 includes funds borrowed from third party.

Loan Commitments

Borrowings from Related Parties

The Company entered into a loan agreement with Mrs. Nancy Louise Jones, wife of Mr. John Diaz, the CEO and major shareholder of the Company, on November 26, 2010, to borrow $60,562 with maturity date at September 1, 2013. This loan bears no interest.

Borrowings from Third Parties

On April 23, 2012, the Company borrowed $32,500 from Asher Enterprises. The maturity date of this note is January 25, 2013. This loan bears an interest rate of 8% per annum from the issuance date before default. Interest on overdue principal after default accrues at an annual rate of 22%. After 180 days following the date of the note, Asher Enterprises has the right to convert all or a portion of the remaining outstanding principal amount of this note into shares of the Company’s Common Stock. The conversion price will be 49% multiplied by the average of the lowest two trading prices for the Common Stock during the twenty trading day period ending on the latest complete trading day prior to the conversion date. This note has been converted in its entirety and has been surrendered to the Company.

On June 21, 2012, the Company borrowed $37,500 from Asher Enterprises. The maturity date of this note is March 25, 2013. This loan bears an interest rate of 8% per annum from the issuance date before default. Interest on overdue principal after default accrues at an annual rate of 22%. After 180 days following the date of the note, Asher Enterprises has the right to convert all or a portion of the remaining outstanding principal amount of this note into shares of the Company’s Common Stock. The conversion price will be 53% multiplied by the average of the lowest two trading prices for the Common Stock during the forty trading day period ending on the latest complete trading day prior to the conversion date. This note has been converted in its entirety and has been surrendered to the Company.
 
 
14

 

On November 2, 2012, the Company borrowed $16,000 from Asher Enterprises. The maturity date of this note is August 5, 2013. This loan bears an interest rate of 8% per annum from the issuance date before default. Interest on overdue principal after default accrues at an annual rate of 22%. After 180 days following the date of the note, Asher Enterprises has the right to convert all or a portion of the remaining outstanding principal amount of this note into shares of the Company’s Common Stock. The conversion price will be 25% multiplied by the lowest trading price for the Common Stock during the one hundred twenty trading day period ending on the latest complete trading day prior to the conversion date. Along with the note payable, the Company issued warrants to purchase 49,230,769 shares of common stock. The warrants expire 5 years after issuance and have an exercise price of $0.0000325. The exercise price can adjust downward if the Company issues common stock at a price per share lower than the current exercise price.

On January 30, 2013, the Company borrowed $32,500 from Asher Enterprises. The maturity date of this note is November 1, 2013. This loan bears an interest rate of 8% per annum from the issuance date before default. Interest on overdue principal after default accrues at an annual rate of 22%. After 180 days following the date of the note, Asher Enterprises has the right to convert all or a portion of the remaining outstanding principal amount of this note into shares of the Company’s Common Stock. The conversion price will be 50% multiplied by the average of the lowest two trading prices for the Common Stock during the twenty trading day period ending on the latest complete trading day prior to the conversion date.

Obligations under Material Contracts
 
Except with respect to the loan obligations disclosed above, we have no obligations to pay cash or deliver cash to any other party.
 
Inflation
 
Inflation and changing prices have not had a material effect on our business and we do not expect that inflation or changing prices will materially affect our business in the foreseeable future. However, our management will closely monitor price changes in our industry and continually maintain effective cost controls in operations.
 
Off Balance Sheet Arrangements
 
We do not have any off balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity or capital expenditures or capital resources that is material to an investor in our securities.
 
Seasonality
 
Our operating results and operating cash flows historically have not been subject to seasonal variations. This pattern may change, however, as a result of new market opportunities or new product introduction.
 
 
15

 
 
Critical Accounting Policies
 
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires our management to make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any. We have identified certain accounting policies that are significant to the preparation of our financial statements. These accounting policies are important for an understanding of our financial condition and results of operation. Critical accounting policies are those that are most important to the portrayal of our financial conditions and results of operations and require management’s difficult, subjective, or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management’s current judgments. We believe the following critical accounting policies involve the most significant estimates and judgments used in the preparation of our financial statements:
 
·
Accounts Receivable: Accounts receivable are recorded at the net invoice value and are not interest bearing. We consider receivables past due based on the contractual payment terms. We perform ongoing credit evaluations of our customers, and generally we do not require collateral on our accounts receivable. We estimate the need for allowances for potential credit losses based on historical collection activity and the facts and circumstances relevant to specific customers and we record a provision for uncollectible accounts when collection is uncertain. To date, we have not experienced significant credit related losses.
 
·
Revenue Recognition: Based on Revenue Recognition Requirement for Film Sales (ASC 926-605-25), we recognize film license revenues when all of the following conditions are met:
 
- Persuasive evidence of a sale or licensing arrangement with a customer exists
- The film is complete and, in accordance with the terms of the arrangement, has been delivered or is available for immediate and unconditional delivery
- The license period of the arrangement has begun and the customer can begin its exploitation, exhibition, or sale
- The arrangement fee is fixed or determinable
- Collection of the arrangement fee is reasonably assured
 
Recent Accounting Pronouncements
 
See Note 1. “Organization, Business Operations and Significant Accounting Policies” to our audited consolidated financial statements included elsewhere in this report.
 
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
 
Not applicable to smaller reporting companies.
 
 
16

 
 
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To The Board of Directors
Writers' Group Film Corp.
Glendale, California

We have audited the accompanying consolidated balance sheets of Writers' Group Film Corp. and its wholly owned subsidiary (collectively, the “Company”) as of March 31, 2013 and March 31, 2012, the related consolidated statements of operations, cash flows and changes in shareholders’ deficit for the years then ended March 31, 2013 and 2012. These consolidated financial statements are the responsibility of Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatements. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, 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 consolidated financial statements referred to above present fairly, in all material respects, the financial position of Writers' Group Film Corp. and its wholly owned subsidiary as of March 31, 2013, and the results of their operations and their cash flows for the years then ended March 31, 2013 and 2012 in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has suffered losses from operations, which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

MaloneBailey, LLP
www.malonebailey.com
Houston, Texas

July 16, 2013
 
 
17

 
 
Writers' Group Film Corp.
 Consolidated Balance Sheets
 
   
March 31,
   
March 31,
 
   
2013
   
2012
 
Assets
           
Current Assets
           
Cash and cash equivalents
  $ 1,143     $ 15,599  
Accounts receivables, net
    200       200  
Accounts receivables - related party, net
    -       46,800  
Prepaid expense and other assets
    1,710       153  
Deferred financing costs
    3,500       -  
Due from related parties - short term
    -       208  
Total current assets
    6,553       62,960  
Total Assets
  $ 6,553     $ 62,960  
                 
Liabilities and Shareholders' Deficit
               
Current Liabilities
               
Accounts payable
  $ 31,520     $ 50,656  
Accrued liability
    39,433       49,999  
Convertible debts, net of unamortized discount of $0 and $15,120, respectively
    20,727       4,612  
Convertible debts - related party, net of unamortized discount of $0 and $0, respectively
    1,550       20,450  
Notes payable, net of unamortized discount of $7,362 and $0, respectively
    41,138       45,000  
Due to related parties - short term
    63,134       60,562  
Derivative liabilities
    23,550       529,583  
Total current liabilities
    221,052       760,862  
Total Liabilities
    221,052       760,862  
                 
Shareholders' Deficit
               
Preferred Stock:
               
Series A convertible preferred stock, $.00001 par, 130,000,000 shares authorized, 10,000 shares issued and outstanding
    -       -  
Series B convertible preferred stock, $.00001 par, 70,000,000 shares authorized, 10,000 and 10,000 shares issued and outstanding, respectively
    -       -  
Series C convertible preferred stock, $.00001 par, 20,000,000 shares authorized, none issued and outstanding
    -       -  
Common stock, $0.00001 par, 20,000,000,000 shares authorized, 1,573,982,182  and 535,120,750 shares issued and outstanding, respectively
    15,741       5,352  
Additional paid in capital
    394,021       (471,762 )
Retained deficit
    (624,261 )     (231,492 )
Total shareholders' deficit
    (214,499 )     (697,902 )
Total Liabilities and Shareholders' Deficit
  $ 6,553     $ 62,960  
 
The accompanying notes are an integral part of these consolidated financial statements.
 
 
18

 
 
Writers' Group Film Corp.
 Consolidated Statement of Operations
 
   
For The Years Ended March 31,
 
   
2013
   
2012
 
Revenues
           
Third party
  $ -     $ 172,000  
Related party
    8,855       225,000  
Total revenues
    8,855       397,000  
Operating Costs and Expenses
               
Wages and benefits
    248,069       273,571  
Audit and accounting
    55,122       59,125  
Legal fee
    16,839       150,539  
Other general and administrative
    122,116       161,412  
Total operating expenses
    442,146       644,647  
                 
Loss from operations
    (433,291 )     (247,647 )
                 
Other income (expense)
               
Loss on extinguishment of debt
    -       (8,189 )
Gain from derivative liabilities
    193,155       59,798  
Interest expense
    (152,633 )     (20,746 )
Net loss
    (392,769 )     (216,784 )
                 
Net loss per share
               
Basic
  $ -     $ -  
Diluted
  $ -     $ -  
                 
Weighted average common shares outstanding:
               
Basic
    819,739,016       430,329,627  
Diluted
    819,739,016       430,329,627  
 
The accompanying notes are an integral part of these consolidated financial statements.
 
 
19

 
 
WRITERS’ GROUP FILM CORP.
Consolidated Statements of Changes in Shareholders’ Deficit
 
For the Fiscal Years Ended March 31, 2013 and March 31, 2012
 
   
Common Stock
   
Preferred Stock - Series A
   
Preferred Stock - Series B
   
Additional Paid-in
   
Retained
   
Total Shareholder's
 
   
Shares
   
Amount
   
Shares
   
Amount
   
Shares
   
Amount
    Capital     Deficit     Deficit  
                                                       
Balance, March 31, 2011
    253,090,750     $ 2,531       10,000     $ -       8,500     $ -       (156,867 )   $ (14,708 )   $ (169,044 )
Issuance of Note payable
    -       -       -       -       -       -       (100,000 )     -       (100,000 )
Issuance of Series B Preferred Stock
    -       -       -       -       10,000       -       100,000       -       100,000  
Shares issued for convertible notes
    217,780,000       2,178       -       -       -       -       -       -       2,178  
Shares issued for preferred stock conversion
    17,000,000       170       -       -       (8,500 )     -       (170 )     -       -  
Shares issued for services
    22,250,000       223       -       -       -       -       92,752       -       92,975  
Shares issued to employees
    25,000,000       250       -       -       -       -       84,750       -       85,000  
Shares transferred to settle lawsuit
    -       -       -       -       -       -       69,000       -       69,000  
Imputed interest on related party loan
    -       -       -       -       -       -       4,845       -       4,845  
Reclassification of derivative to additional paid in capital
    -       -       -       -       -       -       (566,072 )     -       (566,072 )
Net loss
    -       -       -       -       -       -       -       (216,784 )     (216,784 )
Balance, March 31, 2012
    535,120,750     $ 5,352       10,000     $ -       10,000     $ -       (471,762 )   $ (231,492 )   $ (697,902 )
Shares issued for convertible notes
    637,664,432       6,377       -       -       -       -       131,128               137,505  
Shares issued for services
    331,197,000       3,312       -       -       -       -       251,028       -       254,340  
Shares issued for cash
    70,000,000       700       -       -       -       -       34,300       -       35,000  
Imputed interest on related party loan
    -       -       -       -       -       -       5,449       -       5,449  
Reclassification of derivative to additional paid in capital
    -       -       -       -       -       -       443,878       -       443,878  
Net loss
    -       -       -       -       -       -       -       (392,769 )     (392,769 )
Balance,  March 31, 2013
    1,573,982,182     $ 15,741       10,000     $ -       10,000     $ -       394,021     $ (624,261 )   $ (214,499 )
 
The accompanying notes are an integral part of these consolidated financial statements.
 
 
20

 
 
Writers' Group Film Corp.
 Consolidated Statement of Cash Flows
 
   
For The Year Ended March 31,
 
   
2013
   
2012
 
             
Cash Flows From Operating Activities
           
Net loss
  $ (392,769 )   $ (216,784 )
Adjustments to reconcile net loss to net cash used in operating activities:
               
                 
License revenue settled  by debt cancellation  - third party
    -       (124,800 )
License revenue settled by debt cancellation - related party
    -       (178,200 )
Loss on Debt Extinguishment
    -       8,189  
Gain on derivative liability
    (193,155 )     (59,798 )
Shares issued for services
    254,340       177,975  
Amortization of debt discount
    138,758       12,835  
Amortization of deferred financing costs
    2,500       -  
Shares issued for legal settlement
    -       69,000  
Imputed interest on related party loan
    5,449       4,845  
Changes in operating assets and liabilities:
               
Account receivable
    -       24,800  
Account receivable, related party
    46,800       (46,800 )
Prepaid expenses and other current assets
    (1,557 )     4,847  
Accounts payable
    (19,136 )     50,656  
Accrued liabilities
    (5,966 )     46,936  
Net cash used in operating activities
    (164,736 )     (226,299 )
                 
Cash Flows From Investing Activities
               
Loan repayment by related parties
    -       13,500  
Net cash provided by investing activities
    -       13,500  
                 
Cash Flows From Financing Activities
               
Shares issued for cash
    35,000       -  
Borrowing on short term notes payable
    116,000       169,800  
Proceeds from related party advances
    2,780       -  
Deferred financing costs
    (3,500 )     -  
Net cash provided by financing activities
    150,280       169,800  
                 
Net decrease in cash and cash equivalents
    (14,456 )     (42,999 )
Cash and cash equivalents, beginning of period
    15,599       58,598  
Cash and cash equivalents, end of period
  $ 1,143     $ 15,599  
                 
Supplemental disclosure information:
               
Income taxes paid
  $ -     $ -  
Interest paid
  $ -     $ -  
Non-cash financing activities:
               
Common shares issued for convertible debt and accrued interests
  $ 137,505     $ 2,178  
Common shares issued for preferred stock
    -       170  
Debt discount resulting from recognition of derivative liability
  $ 131,000     $ 25,062  
Issuance of note payable
  $ -     $ (100,000 )
Preferred stock issuance for note payable conversion
  $ -     $ 100,000  
Reclassification from related party debt to non-related party debt
  $ 18,900     $ -  
Reclassification from nonconvertible debt to convertible debt
  $ 45,000     $ -  
Reclassification of derivative liabilities to additional paid in capital
  $ 443,878     $ -  
 
The accompanying notes are an integral part of these consolidated financial statements.
 
 
21

 
 
WRITERS’ GROUP FILM CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION, BUSINESS OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

Organization and Business Operations

Writers’ Group Film Corp. (“we”, “our”, “WRIT” or the “Company”) was incorporated in Delaware on March 9, 2007 to produce films, television programs and similar entertainment programs for various media formats.
 
Front Row Networks, Inc. (“Front Row”) was incorporated on July 27, 2010 in Nevada. The Company is a content creation company which produces, acquires and distributes live concerts in 3D for initial worldwide digital broadcast into digitally-enabled movie theaters, TV and mobile streaming providers.
 
On February 25, 2011, the Company acquired Front Row in exchange for 100,000,000 common shares in a transaction accounted for as a reverse merger. As a result of this transaction, Front Row’s shareholders became the Company’s majority shareholders.

Basis of Presentation and Consolidation
 
These consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in the United States of America. The consolidated financial statements include the accounts of the Company and its subsidiary, Front Row Networks, Inc. All significant intercompany balances and transactions have been eliminated.
 
Prior to the acquisition of Front Row, WRIT’s operations were intermittent and insignificant. All WRIT assets were sold to Tal L. Kapelner, former major shareholder of WRIT, for a nominal amount when Front Row was purchased.
 
Use of Estimates
 
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the amount of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made. However, actual results could differ materially from those estimates.
 
Correction of Prior Period

In accordance with the SEC’s Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year misstatements when Quantifying Misstatements in Current Year Financial Statements,” the Company recorded a non-cash adjustment for the year ended March 31, 2012 which served to reduce additional paid-in capital by $566,072 and increase debt discount and retained earnings by $9,942 and $556,130, respectively. This non-cash adjustment resulted from liability classification of a conversion option embedded in existing convertible debt that was reclassified from equity to a liability due to the issuance of another instrument that contained no explicit limit to the number of shares to be issued upon settlement. The issuance of the new convertible instrument caused all other share-settleable instruments to be reclassified to liabilities on the date of issuance. The transaction was originally recorded as an increase in derivative liability of $566,072, loss on derivative liability of $541,010 and an increase in debt discount of $25,062, when it should have been recorded as a decrease in additional paid in capital of $566,072 and an increase in derivative liability of $566,072. Consequently, the March 31, 2012, balance sheet and the statements of operations, cash flows and stockholders’ equity (deficit) for year ended March 31, 2012 were adjusted to reflect the correction of this error. In evaluating materiality and determining the appropriateness of applying SAB 108 to this error, the Company considered materiality both qualitatively and quantitatively as prescribed by the SEC’s Staff Accounting Bulletin No. 99.
 
 
22

 

Cash and Cash Equivalents
 
Cash and cash equivalents include cash on hand, demand deposits with banks and liquid investments with an original maturity of three months or less.
 
Accounts Receivable
 
Accounts receivable are recorded at the net invoice value and are not interest bearing. We consider receivables past due based on the contractual payment terms. We perform ongoing credit evaluations of our customers, and generally we do not require collateral on our accounts receivable. We estimate the need for allowances for potential credit losses based on historical collection activity and the facts and circumstances relevant to specific customers and we record a provision for uncollectible accounts when collection is uncertain. To date, we have not experienced any credit related losses.
 
Revenue Recognition
 
Based on Revenue Recognition Requirement for Film Sales (ASC 926-605-25), the Company recognizes film license revenues when all of the following conditions are met:

- Persuasive evidence of a sale or licensing arrangement with a customer exists
 
- The film is complete and, in accordance with the terms of the arrangement, has been delivered or is available for immediate and unconditional delivery

- The license period of the arrangement has begun and the customer can begin its exploitation, exhibition, or sale

- The arrangement fee is fixed or determinable

- Collection of the arrangement fee is reasonably assured 

Income Taxes
 
The Company accounts for income taxes in accordance with ASC 740, which requires an asset and liability approach for financial accounting and reporting for income taxes and allows recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain.

Stock-based Compensation

Accounting Standards Codification (“ASC”) 718, “Accounting for Stock-Based Compensation" established financial accounting and reporting standards for stock-based compensation plans. It defines a fair value based method of accounting for an employee stock option or similar equity instrument. The Company accounts for compensation cost for stock option plans and for share based payments to non-employees in accordance with ASC 718. Accordingly, employee share-based payment compensation is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period. Additionally, share-based awards to non-employees are expensed over the period in which the related services are rendered at their fair value. The Company accounts for share based payments to non-employees in accordance with ASC 505-50 “Accounting for Equity Instruments Issued to Non-Employees for Acquiring, or in Conjunction with Selling, Goods or Services”.
 
 
23

 

Embedded Conversion Feature
 
The Company has issued convertible instruments which contain embedded conversion features. The Company evaluates the embedded conversion feature within its convertible debt instruments under ASC 815-15 and ASC 815-40 to determine if the conversion feature meets the definition of a liability and therefore need to bifurcate the conversion feature and account for it as a separate derivative liability.
 
If the embedded conversion feature does not meet the definition of a liability, the Company evaluated the conversion feature under ASC 815-40 for a beneficial conversion feature at inception. The effective conversion price was then computed based on the allocation of the proceeds to the convertible debt to determine if a beneficial conversion feature exists. The effective conversion price was compared to the market price on the date of the original note and was deemed to be less than the market value of the Company’s stock at the inception of the note. A beneficial conversion feature was recognized and gave rise to a debt discount that is amortized over the stated maturity of the convertible debt instrument or the earliest potential conversion date.

If the embedded conversion feature meets the definition of a liability, it is required a bifurcation of the conversion feature from the debt and accounting for the conversion feature as a derivative contract liability with changes in fair value recorded in the Statements of Operations.
 
Net Loss per Share
 
In accordance with ASC 260 “Earnings per Share,” basic net loss per common share is computed by dividing net loss for the period by the weighted average number of common shares outstanding during the period. Diluted net income/(loss) per share is computed by dividing the net income/(loss) for the period by the weighted average number of common and common equivalent shares, such as stock options and warrants, outstanding during the period. Such common equivalent shares have not been included in the computation of net loss per share as their effect would be anti-dilutive.
 
Fair Value Measurements

As defined in ASC 820 “Fair Value Measurements”, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement).

The three levels of the fair value hierarchy defined by ASC 820 are as follows:

Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities.

Level 2 – Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars.

Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value.
 
 
24

 
 
The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value as of March 31, 2013 and 2012. As required by ASC 820, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.
 
As of March 31, 2013
 
Total
 
Quoted Prices in Active Markets
for Identical Instruments Level 1
 
Significant Other Observable
Inputs Level 2
 
Significant Unobservable
Inputs Level 3
 
Derivative Liabilities
 
$
23,550
         
$
23,550
 
 
As of March 31, 2012
 
Total
 
Quoted Prices in Active Markets
for Identical Instruments Level 1
 
Significant Other Observable
Inputs Level 2
 
Significant Unobservable
Inputs Level 3
 
Derivative Liabilities
 
$
529,583
         
$
529,583
 

Recent Accounting Pronouncements
 
We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow.
 
NOTE 2 – GOING CONCERN

As reflected in the accompanying consolidated financial statements, the Company has an accumulated deficit of $624,261 at March 31, 2013 that includes loss of $392,769 for the year ended March 31, 2013. The Company also had a working capital deficiency of $214,499 at March 31, 2013. These factors raise substantial doubt about the ability of the Company to continue as a going concern. The consolidated financial statements have been prepared on a going concern basis and do not include any adjustments that might result from outcome of this uncertainty.

Although management is currently attempting to implement its business plan, and is seeking additional sources of equity or debt financing, there is no assurance these activities will be successful.
 
NOTE 3 – RELATED PARTY BALANCES AND TRANSACTIONS
 
Accounts receivable from related party

The Company and 3D Conversion Rights, a company wholly owned by Mr. John Diaz, the former CEO and major shareholder of the Company entered into an exclusive license agreement on March 25, 2012. Based on the terms of this license agreement, 3D Conversion Rights agreed to pay to the Company an aggregate amount of $225,000 as the license fee, by the cancellation of a $177,600 note payable to 3D Conversion Rights along with accrued interest of $600 and payment of $46,800 in certified funds before June 30, 2012. As of March 31, 2013 and 2012, the Company has a receivable from 3D Conversion Rights in the amount of $0 and $46,800.
 
 
25

 

Due to related party

Due to related party consists of the following:
 
   
March 31,
2013
   
March 31,
2012
 
             
Nancy Louise Jones
  $ 60,562     $ 60,562  
Other
  $ 2,572       -  
Total
  $ 63,134     $ 60,562  

Mrs. Nancy Louise Jones

On November 26, 2010, the Company borrowed $60,562 from Mrs. Nancy Louise Jones, wife of Mr. John Diaz, the former CEO and major shareholder. The maturity date of this loan is September 1, 2012 and was extended to September 8, 2013. The Company evaluated the application of ASC 470-50 and ASC 470-60 and concluded that the extension of maturity constituted a debt modification, rather than a debt extinguishment or a troubled debt restructuring. As this loan bears no interest, in accordance with ASC 835-30 Imputation of Interest, the Company uses 8%, the prevailing rate for similar debt, to recognize the imputed interest expense of $5,449 on this debt for the year ended March 31, 2013 and $4,845 for the year ended March 31, 2012. The imputed interest expense is accounted as a capital transaction and recorded as an increase of Additional Paid-In Capital.

NOTE 4 – NOTES PAYABLE

Note payable consists of the following:
 
   
March 31,
2013
   
March 31,
2012
 
             
Note payable, net of debt discount of $7,362 and $0 respectively
  $ 41,138     $ 45,000  
 
Asher Enterprises Notes Payable

Note payable balance as of March 31, 2012 consists of the $45,000 note from Asher Enterprises issued on February 9, 2012. The maturity date of this note is November 10, 2012. This loan bears an interest rate of 8% per annum. Interest on overdue principal after default accrues at an annual rate of 22%. On August 7, 2012, after 180 days following the date of the issuance, the note became convertible and was reclassified from nonconvertible debts. See more discussion about the conversion feature of this note in Note 5.
 
 
26

 

On November 2, 2012, the Company borrowed $16,000 from Asher Enterprises. The maturity date of this note is August 5, 2013. This loan bears an interest rate of 8% per annum. Interest on overdue principal after default accrues at an annual rate of 22%. After 180 days following the date of the note, Asher Enterprises has the right to convert all or a portion of the remaining outstanding principal amount of this note into shares of the Company’s Common Stock. The conversion price will be 25% multiplied by the lowest trading price for the Common Stock during the 120 trading day period ending on the latest complete trading day prior to the conversion date.

Along with the note payable, the Company issued warrants to purchase 49,230,769 shares of common stock. The warrants expire 5 years after issuance and have an exercise price of $0.0000325. The exercise price can adjust downward if the Company issues common stock at a price per share lower than the current exercise price. As of March 31, 2013, the warrants were treated as a derivative liability.

The Company analyzed the warrants for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the warrants should be classified as a liability due to their not being indexed to the Company’s common stock. The warrants were measured at fair value at the date of inception and at the end of each reporting period or termination of the instrument with the change in fair value recorded to earnings. The fair value of the warrants resulted in a full debt discount of $16,000. During the year ended March 31, 2013, debt discount of $8,638 related was amortized and the unamortized discount is $7,362 as of March 31, 2013. See discussion related to the derivative liabilities in Note 7 and warrants in Note 9.

On January 30, 2013, the Company borrowed $32,500 from Asher Enterprises. The maturity date of this note is November 1, 2013. This loan bears an interest rate of 8% per annum. Interest on overdue principal after default accrues at an annual rate of 22%. After 180 days following the date of the note, Asher Enterprises has the right to convert all or a portion of the remaining outstanding principal amount of this note into shares of the Company’s Common Stock. The conversion price will be 50% multiplied by the lowest two trading price for the Common Stock during the 20 trading day period ending on the latest complete trading day prior to the conversion date. As of March 31, 2013, the note is not convertible yet.
 
NOTE 5 – CONVERTIBLE DEBT

Convertible debt outstanding, net of debt discount of $0, on March 31, 2011
  $ 6,790  
Less: principal converted into common stock
    (2,178 )
Add: convertible debt transferred from related party to third party with accrued interest, net of debt discount of $15,120
    -  
Convertible debt outstanding, net of debt discount of $15,120, on March 31, 2012
  $ 4,612  
Add: reclassification from nonconvertible debt to convertible debt, net of debt discount of $45,000
    -  
Add: issuance of convertible debts, net of debt discount of $70,000
    -  
Add: reclassification from related-party convertible debt
    18,900  
Less: principal converted into common stock
    (132,905 )
Add: amortization of debt discount
    130,120  
Convertible debts outstanding, net of debt discount of $0 on March 31, 2013
  $ 20,727  

During the year ended March 31, 2013, $137,505 of convertible debts and accrued interests was converted into 637,644,432 shares of common stock.

During the year ended March 31, 2012, $2,178 of convertible debts was converted into 217.78 million shares of common stock at $0.00001 per share.
 
 
27

 

Asher Enterprises, Inc.

On February 9, 2012, the Company borrowed $45,000 from Asher Enterprises. The maturity date of this note is November 10, 2012. This loan bears an interest rate of 8% per annum. Interest on overdue principal after default accrues at an annual rate of 22%. On August 7, 2012, after 180 days following the date of the issuance, the note became convertible and was reclassified from nonconvertible debts. Asher Enterprises has the right to convert all or a portion of the remaining outstanding principal amount of this note into shares of the Company’s Common Stock. The conversion price is 58% multiplied by the average of the lowest two trading prices for the Common Stock during the twenty trading day period ending on the latest complete trading day prior to the conversion date. During the year ended March 31, 2013, Asher Enterprise converted the whole note along with accrued interest of $1,800 into 100,522,036 common shares.

On March 29, 2012, Asher Enterprises, Inc. purchased a convertible note for $15,120 with an annual interest rate of 10%, from Armada International, which is a related party. The new Asher convertible note is due on demand, with interest at 10%, and changes the conversion price from $0.00001 to 58% multiplied by the average of the lowest two trading prices for the Common Stock during the twenty trading day period ending on the latest complete trading day prior to the conversion date. During the year ended March 31, 2013, Asher Enterprise converted the whole note into 7,957,895 common shares.

On April 23, 2012, the Company borrowed $32,500 from Asher Enterprises. The maturity date of this note is January 25, 2013. This loan bears an interest rate of 8% per annum. Interest on overdue principal after default accrues at an annual rate of 22%. The note became convertible on October 20, 2012, after 180 days following the date of the note. Asher Enterprises has the right to convert all or a portion of the remaining outstanding principal amount of this note into shares of the Company’s Common Stock. The conversion price is 49% multiplied by the average of the lowest two trading prices for the Common Stock during the twenty trading day period ending on the latest complete trading day prior to the conversion date. During the year ended March 31, 2013, Asher Enterprise converted principal of $32,500 and accrued interest of $1,300 into 107,447,465 common shares, bringing the note balance to $0. 
 
On June 21, 2012, the Company borrowed $37,500 from Asher Enterprises. The maturity date of this note is March 25, 2013. This loan bears an interest rate of 8% per annum. Interest on overdue principal after default accrues at an annual rate of 22%. The note became convertible on December 18, 2012, after 180 days following the date of the note. Asher Enterprises has the right to convert all or a portion of the remaining outstanding principal amount of this note into shares of the Company’s Common Stock. The conversion price is 53% multiplied by the average of the lowest two trading prices for the Common Stock during the forty trading day period ending on the latest complete trading day prior to the conversion date. During the year ended March 31, 2013, Asher Enterprise converted principal of $37,500 and interest of $1,500 into 143,287,036 common shares, bringing the note balance to $0.

As of March 26, 2013, all the Asher convertible notes were fully converted.

The Company analyzed the conversion option of all the Asher notes for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the embedded conversion feature should be classified as a liability due to their being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options. The embedded conversion feature was measured at fair value at the date of inception and at the end of each reporting period or termination of the instrument with the change in fair value recorded to earnings.

Other Third Party Convertible Notes

The convertible debts were issued in September 2009, bear an interest rate at 8% per annum, due in one year, and are convertible at $0.00001 per share.

During the year ended March 31, 2013, $18,900 related party convertible debt was reclassified to third party convertible note. This is due to the debt assignment from a related-party debt holder to a third-party debt holder. The Company did not enter into a new debt agreement with the new debt holder and there is no change to the original terms of the promissory note.

During the year ended March 31, 2013, debt principal of $2,785 has been converted into 278,450,000 common shares.
 
 
28

 

As a result of the issuance of convertible debt to Asher Enterprise on March 29, 2012 and the reclassification of Asher Enterprise nonconvertible note to convertible note during the year ended March 31, 2013, the conversion option of all other third party convertible notes became tainted. Under ASC 815-15 “Derivatives and Hedging”, all other tainted share settle able instruments must be reclassified from liability to equity. As a result of the full conversion of Asher convertible debts on March 26, 2013, the derivative treatment on these other third convertible notes ended and the derivative liabilities must be reclassified back to equity. See discussion in Note 7.
 
NOTE 6 – CONVERTIBLE DEBTS – RELATED PARTY

Convertible debts – related party outstanding, net of debt discount of $12,835, on March 31, 2011
  $ 21,615  
Add: Amortization of debt discount
    12,835  
Less: convertible debt transferred from related party to third party - See Note 5     (14,000 )
Convertible debts – related party outstanding, net of debt discount of $0, on March 31, 2012
    20,450  
Less: reclassification to third party convertible debt
    (18,900 )
Convertible debts outstanding, net of debt discount of $0 on March 31, 2013
  $ 1,550  

These convertible debts were originally issued in March, and December 2010, respectively, bear an interest rate at 8% per annum, due in one year, and are convertible at $0.00001 per share. The debts are in default as of March 31, 2013.

As a result of the issuance of convertible debt to Asher Enterprise on March 29, 2012 and the reclassification of Asher Enterprise nonconvertible note to convertible note on August 7, 2012, the conversion option of all other related party convertible notes became tainted. Under ASC 815-15 “Derivatives and Hedging”, it should be reclassified from equity to liability. As a result of the full conversion of Asher convertible debts on March 26, 2013, the derivative treatment on these related party convertible notes ended and the derivative liabilities must be reclassified back to equity. See discussion in Note 7. 

NOTE 7 – DERIVATIVE LIABILITIES

FOR THE YEAR ENDED MARCH 31, 2013
Asher Enterprise, Inc. Convertible Notes
 
As discussed in Note 5, the Company determined that the instruments embedded in the convertible note should be classified as liabilities and recorded at fair value due to their being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options. The fair value of the instruments was determined using multinomial lattice model based on the following assumptions:

- The projected volatility curve for each valuation period was based on the historical volatility of 20 comparable companies.
- 1-year Volatility 156%-195%
- An event of default would occur 0% of the time, increasing 1.00% per month to a maximum of 5%;
- Asher would redeem based on availability of alternative financing, increasing 2.0% monthly to a maximum of 20%;
- Asher would automatically convert the note at maturity if the registration was effective and the company was not in default.
 
 
29

 
 
The fair value of the conversion feature of $15,120 Asher note issued on March 29, 2012 was determined to be $23,309. Out of $23,309, $15,120 was recognized as debt discount and $8,189 was recognized as loss on extinguishment of debt. As a result of the full conversions in April, 2012, under ASC 815-15 “Derivatives and Hedging”, the instruments are measured at fair value at the date of termination with the change in fair value recorded to earnings. The fair value of the instruments related to the $15,120 Asher note converted was $25,007 and was reclassified out of liabilities to equity. 

As discussed in Note 5, $45,000 Asher note issued on February 9, 2012 became convertible on August 7, 2012. The fair value of the conversion feature was determined to be $65,835. Out of $65,835, $45,000 was recognized as debt discount and $20,835 was recognized as loss on derivative. As a result of the note conversions in August, September October and November, 2012, under ASC 815-15 “Derivatives and Hedging”, the instruments are measured at fair value at the date of conversions with the change in fair value recorded to earnings. The fair value of the instruments related to $45,000 Asher note converted was $62,087 and was reclassified out of liabilities to equity.
 
As discussed in Note 5, $32,500 Asher note issued on April 23, 2012 became convertible on October 20, 2012. The fair value of the conversion feature on October 20, 2012 was determined to be $58,137. Out of $58,137, $32,500 was recognized as debt discount and $25,637 was recognized as loss on derivative. As a result of note conversions in October, November, December, 2012 and January 2013, under ASC 815-15 “Derivatives and Hedging”, the instruments are measured at fair value at the date of termination with the change in fair value recorded to earnings. The fair value of the instruments related to $32,500 Asher note converted was $60,238 and was reclassified out of liabilities to equity. 
 
As discussed in Note 5, $37,500 Asher notes became convertible on December 18, 2012. The fair value of the conversion feature was determined to be $66,326. Out of $66,326, $37,500 was recognized as debt discount and $28,826 was recognized as loss on derivative. As a result of note conversions in January, February and March, 2013, under ASC 815-15 “Derivatives and Hedging”, the instruments are measured at fair value of termination with the change in fair value recorded to earnings. The fair value of the instruments related to $37,500 Asher note converted was $68,693 and was reclassified out of liabilities to equity.

Other Third Party and Related Party Convertible Notes

The fair value of the instruments was determined based on the following assumptions:

- The projected volatility curve for each valuation period was based on the historical volatility of 20 comparable companies.
- 1-year Volatility 156%-195%
- An event of default would occur 0% of the time, increasing 1.00% per month to a maximum of 5%;
- The holder redeem based on availability of alternative financing, increasing 20.0% monthly to a maximum of 95%;
- The holder would convert monthly (equal to the average trading volume over the last 6 months)
- The holder would exercise the note as they become exercisable at the target price which is the greater of 20 times the initial exercise price; reset exercise price or stock price.

As a result of full conversion of $15,120 Asher note on April 9, 2012, under ASC 815-15 “Derivatives and Hedging”, all other tainted share settle able instruments must be measured at fair value of termination with the change in fair value recorded to earnings. The fair value of the conversion feature on April 9, 2012 was $246,559 and this value was reclassified out of liabilities to equity.
 
As discussed in Note 5, on August 7, 2012, $45,000 Asher note issued on February 9, 2012 became convertible. Under ASC 815-15 “Derivatives and Hedging”, all other share-settle able instruments must be reclassified from equity to liability. The fair value of the conversion feature on August 7, 2012 was determined to be $377,248 and this was recorded as a deduction in Additional Paid-in Capital.
 
As discussed in Note 5, $2,785 other convertible notes were converted to common stock during the year ended March 31, 2013. Under ASC 815-15 “Derivatives and Hedging”, the instruments are measured at fair value at the date of termination with the change in fair value recorded to earnings. The fair value of the instruments related to $2,785 notes converted was $52,562 and was reclassified out of liabilities to equity. 
 
 
30

 

As discussed in Note5, all the convertible Asher notes were fully converted to common stock on March 26, 2013, the conversion feature of these other convertible debts was no longer tainted. Under ASC 815-15 “Derivatives and Hedging”, the conversion feature of these other convertible debts must be measured at fair value of termination with the change in fair value recorded to earnings. The fair value of the conversion feature on these other convertible debts on March 26, 2013 was $305,980 and was reclassified out of liabilities to equity.
 
Warrants

As discussed in Note 4, 49,230,769 warrants to purchase common stock were issued to Asher Enterprise on November 2, 2012. The fair value of the warrants was determined using multinomial lattice model based on the following assumptions:

- The projected volatility curve for each valuation period was based on the historical volatility of 20 comparable companies.
- 5-year Volatility 342%-380%
- The holder would exercise the warrant as they become exercisable at target prices of 2 times the stock price or higher
- The holder would exercise the warrant at maturity if the stock price was above the project reset prices.
- The reset of the exercise price is highly probable and resets are projected to decrease the $0.0000325 exercise at issuance to $0.0000123 at maturity

The fair value of the warrants on issuance date was $21,143, out of which $16,000 was recorded as debt discount and $5,143 was recognized as loss on derivative.

Under ASC 815-15 “Derivatives and Hedging”, the derivative liabilities were subsequently measured at fair value at the end of each reporting period with the change in fair value recorded to earnings. The fair value of the derivatives related to the warrants on March 31, 2013 was $23,550. The change in fair value is $2,407 and was recognized as loss on derivative.

FOR THE YEAR ENDED MARCH 31, 2012

Asher Enterprise, Inc.

As discussed in Note 5, the Company determined that the instruments embedded in the $15,120 Asher convertible note should be classified as liabilities and recorded at fair value due to their being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options. The fair value of the instruments was determined to be $23,309 using the following assumptions:
 
- The projected volatility curve for each valuation period was based on the historical volatility of 20 comparable companies.
- 1-year Volatility on March 29, 2012 156%
- 1-year Volatility on March 31, 2012 156%
- An event of default would occur 0% of the time, increasing 1.00% per month to a maximum of 5%;
- Asher would redeem based on availability of alternative financing, increasing2.0% monthly to a maximum of 20%;
- Asher would automatically convert the note at maturity if the registration was effective and the company was not in default.

Out of $23,309, $15,120 was recognized as debt discount and $8,189 was recognized as loss on extinguishment of debt.

Other Third Party and Related Party Convertible Notes
 
As discussed in Note 5 and Note 6, as a result of the $15,120 Asher convertible note issued on March 29, 2012, under ASC 815-15 “Derivatives and Hedging”, all other share-settle able instruments must be reclassified from equity to liability. The fair value of the conversion feature on March 29, 2012 was determined to be $566,072, and this was recorded as a deduction in Additional Paid-in Capital. The fair value was measured using the following assumptions:
 
 
31

 

- The projected volatility curve for each valuation period was based on the historical volatility of 20 comparable companies.
- 1-year Volatility on March 29, 2012 156%
- 1-year Volatility on March 31, 2012 156%
- An event of default would occur 0% of the time, increasing 1.00% per month to a maximum of 5%;
- The holder redeem based on availability of alternative financing, increasing20.0% monthly to a maximum of 95%;
- The holder would convert monthly (equal to the average trading volume over the last 6 months)
- The holder have not converted to date despite the conversion option being in the money, so no trigger price for early conversion was considered.

Under ASC 815-15 “Derivatives and Hedging” the liabilities were subsequently measured at fair value at the end of each reporting period with the change in fair value recorded to earnings. The fair value of the embedded conversion feature of all the convertible notes on March 31, 2012 was $529,583 and $59,798 was recognized as gain on derivative.

The following table summarizes the derivative liabilities included in the consolidated balance sheet:
 
Balance at March 31, 2011
  $ -  
ASC 815-15 additions
    -  
(Asher Enterprise)
    23,309  
(Other Convertible Notes)
    566,072  
Change in fair value
    (59,798 )
Balance at March 31, 2012
    529,583  
ASC 815-15 addition (Asher)
    190,298  
ASC 815-15 addition (Other)
    377,248  
ASC 815-15 addition (Warrants)
    21,143  
ASC 815-15 deletion (Asher)
    (216,025 )
ASC 815-15 deletion (Other)
    (605,101
Change in fair value
    (273,596 )
         
Balance at March 31, 2013
  $ 23,550  

The following table summarizes the derivative (gain) or loss recorded as a result of the derivative liabilities above:
 
For the Year Ended March 31, 2012
     
Excess of fair value of liabilities over note payable
  $ 0  
Change in fair value
    (59,798 )
Total Derivative (Gain) Loss
  $ (59,798 )
         
For the Year Ended March 31, 2013
       
Excess of fair value of liabilities over note payable
  $ 80,441  
Change in fair value
    (273,596 )
Total Derivative (Gain) Loss
  $ (193,155 )

 
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NOTE 8 – PREFERRED STOCK
 
Each share of Series A preferred stock is convertible at any time into the number of common shares equal to four times the sum of all outstanding common and Series B and Series C preferred shares at the time of conversion divided by the number of Series A preferred shares. Series A shareholders may receive dividends as declared by the Board. The Company has 10,000 Series A preferred shares outstanding at March 31, 2013 and 2012.

On March 3, 2013 a Stock Purchase Agreement was consummated between John Diaz; the largest and controlling shareholder of Writers’ Group Film Corp., and its former President and Chairman, and EAM Delaware LLC, a Delaware limited liability company controlled by Eric Mitchell, the current President and Chairman of Writers’ Group Film Corp.

The transaction was for the sale of 10,000 shares of Preferred Class, Series A Stock in WRIT currently held by Mr. Diaz, which represents a controlling block of stock in consideration for $10,000.

Each share of Series B preferred stock is convertible into the number of common shares equal to the designated $2 initial price of the Series B preferred stock divided by one hundred times the par value of the common stock subject to adjustments as may be determined by the Board of Directors from time to time. Series B shareholders may receive dividends as declared by the Board. On July 7, 2011, the Company modified the February 3, 2011 Share Exchange Agreement and assumed $100,000 in new debt which is shown as a reduction of Paid-In Capital. The note was converted into 10,000 Series B shares during fiscal 2012.The Company has 10,000 Series B shares outstanding at March 31, 2013 and 2012. 8,500 Series B shares were converted into 17,000,000 common shares during fiscal 2012.

Each share of Series C preferred stock is convertible at any time into 500 common shares. Series C holders may receive dividends as declared by the Board. The Company has no Series C shares outstanding at March 31, 2013 and 2012.

The Company evaluated the application of ASC 815-15 and ASC 815-40 for the embedded conversion feature of preferred stock listed above and concluded the embedded conversion option should be classified as equity.

NOTE 9 – EQUITY

For the Year Ended March 31, 2013:

Shares issued for convertible notes:

During the year ended March 31, 2013, convertible debts of $132,905 along with accrued interest of $4,600 were converted into 637,664,432 common shares. See Note 5. 
 
Shares issued for services:

During the year ended March 31, 2013, the Company issued 331,197,000 shares of common stock to employees and third party consultants as compensation. The fair value of the shares was determined to be $254,340.

Shares issued for cash

During the year ended March 31, 2013, the Company issued 70,000,000 shares for cash totaling $35,000.
 
 
33

 
 
Warrants Issued
 
As discussed in Note 4, along with the note payable, the Company issued warrants to purchase 49,230,769 shares of common stock to Asher Enterprise Inc. The warrants expire 5 years after issuance and have an exercise price of $0.0000325. The exercise price can adjust downward if the Company issues common stock at a price per share lower than the current exercise price.  See discussion in Note 4 and 7. These are the only outstanding and exercisable warrants the Company has. The weighted average exercise price is $0.0000325, and the weighted average remaining term is 4.59 years. As of March 31, 2013, the warrants had an intrinsic value of $52,554.

For the Year Ended March 31, 2012:

Preferred Stock Conversion
 
In July and August 2011, certain Series B preferred stock holders converted 8,500 such shares into 17,000,000 common shares.

On July 7, 2011, the Company modified the February 3, 2011 Share Exchange Agreement and agreed to assume $100,000 in new debt which is shown as a reduction of our Paid-In Capital. The note was converted into 10,000 shares of Series B Preferred Stock during the fiscal year ended March 31, 2012.

Shares issued for services

On September 14, 2011, the Company issued 2.75 million common shares to a consulting company for services fair valued at $26,675.

On December 2, 2011, the Company issued 44.5 million common shares to its employees and various consulting companies with fair value totaling $151,300.

In February, 2012, a shareholder of the Company transferred 10 million shares to another individual for settling a lawsuit and valued at $69,000.

Shares issued for convertible notes

During the year ended March 31, 2012, $2,178 of convertible debts were converted into 217.8 million common shares.

NOTE 10 – CONCENTRATION
 
For the fiscal year ended March 31, 2013 and 2012, 100% of the Company’s revenue is generated from license fees from two customers, Anvil International and 3D Conversion Rights.
 
 
34

 
 
NOTE 11 – INCOME TAXES
 
Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has net losses of $392,769 and $216,784 as of March 31, 2013 and 2012. The following table shows the net deferred tax benefit:
 
   
March 31,
2013
   
March 31,
2012
 
Deferred Tax Benefit
  $ 69,145     $ 4,438  
Allowance
    (69,145 )     (4,438 )
Net Deferred Tax Benefit
  $ -     $ -  
 
Pursuant to ASC 740, the Company is required to compute tax asset benefits for net operating losses carried forward. Potential benefit of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely-than-not it will utilize the net operating losses carried forward in future years which will start to expire in the year of 2031.
 
NOTE 12 – SUBSEQUENT EVENTS
 
On April 10, 2013, the Company borrowed $28,000 from Asher Enterprises. The maturity date of this note is January 15, 2014. This loan bears an interest rate of 8% per annum. Interest on overdue principal after default accrues at an annual rate of 22%. The conversion price is 50% multiplied by the average of the lowest two trading prices for the Common Stock during the twenty trading day period ending on the latest complete trading day prior to the conversion date.

On May 2, 2013, Nancy Louise Jones assigned her $60,562 note to a third party and the Company entered into an amended convertible debt agreement with the third party creditor. The maturity date of this amended note is January 2, 2014. This loan bears an interest rate of 12% per annum. The conversion price is 55% multiplied by the lowest trading price for the Common Stock during the five trading day period ending on the latest complete trading day prior to the conversion date.

On May 9, 2013, the Company borrowed $11,500 from a third party. The maturity date of this note is January 9, 2014. This loan bears an interest rate of 12% per annum. Interest on overdue principal after default accrues at an annual rate of 22%. The conversion price is 55% multiplied by the lowest trading price for the Common Stock during the five trading day period ending on the latest complete trading day prior to the conversion date.

On May 13, 2013 the Company borrowed $27,500 from Asher Enterprises. The maturity date of this note is February 17, 2014. This loan bears an interest rate of 8% per annum. Interest on overdue principal after default accrues at an annual rate of 22%. The conversion price is 50% multiplied by the average of the lowest two trading prices for the Common Stock during the twenty trading day period ending on the latest complete trading day prior to the conversion date.

On May 1, Tal L Kapelner converted 10,000 shares of preferred stock series B into 100,000,000 common shares.

On June 5, 2013, Asher Enterprises exercised the warrants issued on November 2, 2012 for 26,373,626 shares of common stock at $0.000325 per share.
 
During April, May and June 2013, $61,985 of debts and accrued interests were converted into 545,589,979 common shares.
 
 
35

 
 
ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
 
None.
 
ITEM 9A. CONTROLS AND PROCEDURES.
 
(A) Evaluation of Disclosure Controls and Procedures
 
As of the end of the period covered by this Annual Report, we conducted an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934). Based on this evaluation, the CEO and CFO concluded that, because of the material weaknesses in our internal control over financial reporting described below, our disclosure controls and procedures were not effective as of March 31, 2013. The Company has taken the steps described below to remediate such material weaknesses.

(B) Internal Control over Financial Reporting
 
The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles ("GAAP"). The Company’s internal controls over financial reporting include policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets; (2) provide reasonable assurances that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures are being made only in accordance with authorizations of management and the directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’ assets that could have a material effect on our financial statements. Under the supervision and with the participation of our management, including our CEO, we evaluated the effectiveness of our internal control over financial reporting as of March 31, 2013. In its evaluation, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. Based on our assessment and the criteria described above, management has concluded that, as of March 31, 2013, our internal control over financial reporting was not effective. We have noted the following material weaknesses in our control environment: 
 
1. Material weaknesses in Our Control Environment. Our control environment did not sufficiently promote effective internal control over financial reporting throughout the organization. This material weakness exists because of the aggregate effect of multiple deficiencies in internal control which affect our control environment, including: a) the lack of an effective risk assessment process for the identification of fraud risks; b) the lack of an internal audit function or other effective mechanism for ongoing monitoring of the effectiveness of internal controls; c) deficiencies in our accounting system and controls which resulted in the theft by former CEO; d) and insufficient documentation and communication of our accounting policies and procedures as of March 31, 2013.
 
2. Material weaknesses in the staffing of our financial accounting department. Management had engaged an outside consultant to assist in the financial reporting. However, the number of qualified accounting personnel with experience in public company SEC reporting and GAAP is limited. This weakness does not enable us to maintain adequate controls over our financial accounting and reporting processes regarding the accounting for non-routine and non-systematic transactions. There is a risk that a material misstatement of the financial statements could be caused, or at least not be detected in a timely manner, by this shortage of qualified resources.
 
 
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3. Material weaknesses in Segregation of Duties. The limited number of qualified accounting personnel results in an inability to have independent review and approval of financial accounting entries. Furthermore, management and financial accounting personnel have wide-spread access to create and post entries in our financial accounting system. There is a risk that a material misstatement of the financial statements could be caused, or at least not be detected in a timely manner, due to insufficient segregation of duties. Because of its inherent limitation, internal control over financial reporting may not prevent or detect misstatements. Also, 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. Management is still determining additional measures to remediate deficiencies related to staffing.
 
Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process certain safeguards to reduce, though not eliminate, this risk. Management is responsible for establishing and maintaining adequate internal control over our financial reporting. This Annual Report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this Annual Report. 
 
Changes in Internal Controls
 
There have been no changes in our internal controls over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
 
The Company is not an "accelerated filer" for the fiscal year ended March 31, 2013 because it is qualified as a "small business issuer". Hence, under current law, the internal controls certification and attestation requirements of Section 404 of the Sarbanes-Oxley act will not apply to the Company. This Annual report on Form 10-K 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 temporary rules of the Securities and Exchange Commission that permit us to provide only management's report in this Annual Report on Form 10-K.
 
ITEM 9B. OTHER INFORMATION.
 
Other than the Form 8-Ks filed during the fourth quarter, we have no other information that we would have been required to disclose in a report on Form 8-K during a fourth quarter of the year covered by this Form 10K.
 
 
37

 
 
PART III
 
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE.
 
The members of our Board of Directors serve until the next annual meeting of the stockholders, or until their successors have been elected. The officers serve at the pleasure of the Board of Directors. Information as to the directors and executive officers of the Company is as follows:
 
Name 
 
Age
 
Position(s)
 
 
 
 
 
Eric Mitchell 
 
46
 
Director, CEO and President, Treasurer and CFO
 
 
 
 
 
Rebecca Bieker 
 
56
 
Secretary
 
Eric Mitchell, Director, Chief Executive Officer, President, Treasurer & Chief Financial Officer. Eric Mitchell has over 20 years of financial, business development, and strategic planning experience in the motion picture industry. Mr. Mitchell’s acquisition and financial talents helped Sony Pictures’ Tri-Star division acquire theatrical distribution rights to such hits as Cliffhanger, Sniper, Threesome, and Weekend at Bernie’s 2. Mitchell assisted Tri-Star in acquiring multi-picture distribution rights with Carolco Pictures; the deal generated $250 million in profit for the studio and led to such hits as LA Story, Universal Soldier, The Doors, Total Recall, Basic Instinct and Terminator 2. As an advisor to Ascendant Pictures and VIP Media Fund, the largest German tax fund, Eric participated in placing over $500 million dollars in production financing into 46 feature films. Mr. Mitchell is a graduate of Carnegie Mellon University and received his M.S. in Management from the Massachusetts Institute of Technology’s Sloan School.
 
Rebecca Bieker, Secretary. Ms. Bieker has over 32 years of administrative experience with regards to business management in real estate, investor development and accounting. Rebecca received her education from Moraine Park Technical Institute in Wisconsin, in Real Estate, Accounting and Computers, with further education from real estate and business schools in Las Vegas, Nevada.
 
Our officers and directors may be deemed promoters of the Company as those terms are defined by the Securities Act of 1933, as amended. All directors hold office until the next annual stockholders' meeting or until their death, resignation, retirement, removal, disqualification, or until their successors have been elected and qualified. Our officers serve at the will of the Board of Directors.
 
There are no agreements or understandings for any officer or director of the Company to resign at the request of another person and none of the officers or directors is acting on behalf of or will act at the direction of any other person.
 
We have checked the box provided on the cover page of this Form to indicate that there is no disclosure in this form of reporting person delinquencies in response to Item 405 of Regulation S-K.
 
 
38

 
 
Audit Committee.
 
Our board of directors has not established an audit committee. In addition, we do not have any other compensation or executive or similar committees. We will not, in all likelihood, establish an audit committee until such time as the Company generates a positive cash flow of which there can be no assurance. We recognize that an audit committee, when established, will play a critical role in our financial reporting system by overseeing and monitoring management's and the independent auditors' participation in the financial reporting process. At such time as we establish an audit committee, its additional disclosures with our auditors and management may promote investor confidence in the integrity of the financial reporting process.
 
Until such time as an audit committee has been established, the full board of directors will undertake those tasks normally associated with an audit committee to include, but not by way of limitation, the (i) review and discussion of the audited financial statements with management, and (ii) discussions with the independent auditors the matters required to be discussed by the Statement On Auditing Standards No. 61 and No. 90, as may be modified or supplemented.
 
Code of Ethics.
 
We have adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer and persons performing similar functions. The code of ethics will be posted on the investor relations section of the Company's website. At such time as we have posted the code of ethics on our website, we intend to satisfy the disclosure requirements under Item 10 of Form 8-K regarding an amendment to, or waiver from, a provision of the code of ethics by posting such information on the website.
 
ITEM 11. EXECUTIVE COMPENSATION
 
SUMMARY COMPENSATION TABLE
 
Name and Principal
Position
 
Year
 
Salary
   
Bonus
   
Stock
Awards
   
Option
Awards
   
Nonequity Incentive
Plan Compensation
   
Nonqualified Deferred Compensation Earnings
   
All Other
Compensation
   
Total
 
Eric Mitchell
 
FY2013
  $ 62,880     $ -     $ 58,560     $ -     $ -     $ -     $ -     $ 121,440  
President
 
FY2012
    56,558       -       -       -       -       -       -       56,558  
 
 
FY2011
    -       -       -       -       -       -       -       -  
Rebecca Bieker
 
FY2013
    1,000       -       15,000       -       -       -       -       16,000  
Secretary
 
FY2012
    -       -       -       -       -       -       -       -  
 
 
FY2011
    -       -       -       -       -       -       -       -  
 
 
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DIRECTOR COMPENSATION
 
Name
 
Fees
Earned or
Paid in
Cash
($)
   
Stock
Awards
($)
   
Option
Awards
($)
   
Non-Equity
Incentive
Plan
Compensation
($)
   
Nonqualified
Deferred
Compensation Earnings
($)
   
All
Other
Compensation
($)
   
Total
($)
 
Eric Mitchell
    -       -       -       -       -                  
 
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
 
(a) Security Ownership of Certain Beneficial Owners.
 
(b) Security Ownership of Management.
 
The following table sets forth the security and beneficial ownership for each class of equity securities of the Company owned beneficially and of record by all directors and officers of the Company, and any holder of more than 5% of each class of stock.
 
Title of Class
 
Name and Address of Beneficial Owner
 
Amount and Nature of Beneficial Owner
 
Percent of Class
 
 
 
 
 
 
 
Common Stock
 
John Diaz
 
164,370,000 shares
 
10.4%
 
 
 
 
 
 
 
Common Stock
 
Eric Mitchell 
 
117,120,000 shares 
 
7.4%
 
 
 
 
 
 
 
Common Stock
 
Wendy Haviland
 
20,707,000 shares
 
1.3%
 
 
 
 
 
 
 
Preferred Stock, Series A  
 
Eric Mitchell 
 
10,000 shares 
 
100%
 
(c) Ownership and Change in Control.
 
Each of the security ownership by the beneficial owners and by management is also the owner of record for the like number of shares.
 
There are currently no arrangements that would result in a change in our control.
 
 
40

 
 
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
 
The Company and 3D Conversion Rights LLC, a company wholly owned by Mr. John Diaz, the former CEO and major shareholder of the Company entered into an exclusive license agreement on March 25, 2012. Based on the terms of this license agreement, 3D Conversion Rights LLC agreed to pay to the Company an aggregate amount of $225,000 as the license fee, which included a payment of $46,800 in certified funds before June 30, 2012. As of March 31, 2013, the Company has a receivable from 3D Conversion Rights in the amount of $0.

The Company entered into a loan agreement with Mrs. Nancy Louise Jones, wife of Mr. John Diaz, the former CEO and major shareholder of the Company, on November 26, 2010, to borrow $60,562 with maturity date at September 8, 2013. This loan bears no interest before default, however, interest is payable after default with interest on overdue principal at a monthly rate of 0.5% compounded monthly.
 
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Audit and Non-Audit Fees

Fiscal Year Ended 
 
March 31,
2013
 
 
March 31,
2012
 
 
 
 
 
 
 
 
Audit Fees
 
Approximately $12,000
 
 
$
48,000
 
Audit Related Fees 
 
Approximately $0
 
 
$
0
 
Tax Fees
 
$
0
 
 
 
 
 
All Other Fees 
 
$
0
 
 
 
 
 
 
Pre-Approval of Services by the Independent Auditor
 
The Board of Directors has established policies and procedures for the approval and pre-approval of audit services and permitted non-audit services. The Board has the responsibility to engage and terminate the Company's independent registered public accountants, to pre-approve their performance of audit services and permitted non-audit services and to review with the Company's independent registered public accountants their fees and plans for all auditing services. All services provided by and fees paid to MaloneBailey LLP were pre-approved by the Board of Directors.
 
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
 
We are a reporting company pursuant to the requirements of the 1934 Act and we file quarterly, annual and other reports with the Securities and Exchange Commission. The reports and other information filed by us will be available for inspection and copying at the public reference facilities of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549.
 
Copies of such material may be obtained by mail from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. In addition, the Commission maintains a World Wide Web site on the Internet at http://www.sec.gov that contains reports, proxy and information statements and other information regarding registrants that file electronically with the Commission.
 
 
41

 
 
The following documents are filed as part of this report, except for those documents designated by an asterisk (*), which have been previously filed with the Securities and Exchange Commission and, pursuant to Rule 17 C.F.R. 230.411, are incorporated by reference to the document referenced in brackets following the descriptions of such exhibits.
 
*3.1
 
Certificate of Incorporation {Exhibit 3.1 to our Registration Statement on Form S-1/A (File No. 333-147959)}
     
*3.2
 
Bylaws {Exhibit 3.2 to our Registration Statement on Form S-1/A (File No. 333-147959)}
     
4.1
 
Certificate of Designation of Series A Cumulative Convertible Preferred Stock
     
4.2
 
Certificate of Designation of Series B Cumulative Convertible Preferred Stock
     
4.3
 
Certificate of Designation of Series C Cumulative Convertible Preferred Stock
     
*4.4
 
Common Stock Certificate Form
     
*4.5
 
Restated Share Exchange Agreement of February 25, 2011{Exhibit 2.1 to our Form 8-K/A (File No. 333-147959)}
     
10.1
 
June 30, 2011 Receivable from John Diaz
     
10.2
 
Loan Agreement with Nancy Louise Jones
     
*14.1
 
Code of Ethics {Exhibit 14 to our Form 10-K FYE March 31, 2008 (File No. 333-147959)}
     
*21.1
 
Subsidiaries of our Company {Exhibit 21.1 to our Registration Statement on Form SB-2/A (File No. 333-147959)}
     
23.1
 
Consent of Malone Bailey LLP, Independent Auditor
 
 
42

 
 
31.1 
 
Certification of Chief Executive Officer.
 
 
 
31.2
 
Certification of Chief Financial Officer.
 
 
 
32.1
 
Section 906 Certification.
 
101.INS **
 
XBRL Instance Document
 
 
 
101.SCH **
 
XBRL Taxonomy Extension Schema Document
 
 
 
101.CAL **
 
XBRL Taxonomy Extension Calculation Linkbase Document
 
 
 
101.DEF **
 
XBRL Taxonomy Extension Definition Linkbase Document
 
 
 
101.LAB **
 
XBRL Taxonomy Extension Label Linkbase Document
 
 
 
101.PRE **
 
XBRL Taxonomy Extension Presentation Linkbase Document
____________
** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
 
 
43

 
 
SIGNATURES
 
Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the Company has duly caused this Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
Writers’ Group Film Corp.
 
 
 
 
 
Date: July 16, 2013
By:
/s/ Eric Mitchell
 
 
 
Eric Mitchell
 
 
 
President and Director
 
 
 
 
 
 
By:
/s/ Eric Mitchell
 
 
 
Eric Mitchell
 
 
 
Chief Financial Officer and Chief Accounting Officer/Controller
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
 
Date: July 16, 2013
By:
/s/ Eric Mitchell
 
 
 
Eric Mitchell
 
 
 
President and Sole Director
 
 
 
 
 
44