SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1999
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File No. 0-27609
MONET ENTERTAINMENT GROUP, LTD.
(Name of Small Business Issuer in its charter)
Colorado 84-1391993
(State of incorporation) (IRS Employer
Identification No.)
222 Milwaukee Street, Suite 304
Denver, Colorado 80206
(Address of Principal Executive Office) Zip Code
Registrant's telephone number, including Area Code: (303) 329-3479
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock
(Title of Class)
Check whether the Registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the Registrant was required to file such
reports) and (2) has been subject to such filing requirements for the past 90
days.
X
YES NO
Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]
The Company's revenues for the most recent fiscal year were $ -0- .
The aggregate market value of the voting stock held by non-affiliates of the
Company on March 20, 2000 was $0.00.
As of March 20, 2000 the Company had 5,000,000 issued and outstanding shares of
common stock.
<PAGE>
ITEM 1. DESCRIPTION OF BUSINESS Monet Entertainment Group, Ltd., (the "Company")
was formed in 1996 in order to finance the production of low budget feature
length motion pictures and a variety of other entertainment projects including
documentaries, video recordings and musical recordings. Many small independent
producers are financially unsophisticated and have little experience in raising
the capital required to produce their projects. As a result, the Company
believes that there is an opportunity to provide financing for projects which
have a production budget of between $50,000 and $1,000,000. The Company is of
the opinion that there is virtually no organized competition for financing of
this nature.
The Company's offices are located at 222 Milwaukee St., Suite 304, Denver,
Colorado 80206. The Company's telephone number is (303) 329-3479.
The financing to be provided by the Company will typically be in the form of one
or more of the following:
1. Direct loans
2. Equity participations
3. Project completion bonds
In the case of direct loans, the interest rate will normally be five to
seven percentage points above the then prevailing prime lending rate, plus an
origination fee which will normally not exceed 3% of the amount of the loan. The
loans will generally have a maturity of two years or less. Direct loans will be
secured by the specific project being financed, the personal guarantees of the
producer and/or others involved in the project and in some cases by other
collateral.
Equity participation will involve an investment in the entertainment
project in return for a percentage of any profits earned from the commercial
exploitation of the project.
A completion bond will be the financial guaranty of the Company to
complete production of the project in the event that the production exceeds its
budget and additional capital is unavailable. The Company plans to reinsure any
bonds which its issues with insurers of sufficient financial resources such that
the Company will never be fully at risk for any capital which may be required if
the Company is called upon to pay the bond. In the alternative, the production
entity may be asked to pledge sufficient collateral to cover the bonded guaranty
such that the Company will be fully covered in the event there is any call on
the bond. The Company believes that its proposed completion bond program will
assist small independent producers in obtaining financing for their projects and
will be unique in the industry. The Company will charge the producer receiving
the bond a fee, which will normally be in the range of 3% to 5% of the amount of
the bond, for providing the completion bond.
<PAGE>
In addition to direct funding from the Company or a Company sponsored
joint venture, the Company also plans to provide small independent producers
with assistance in raising financing for entertainment projects with production
budgets in the range of $50,000 to $1,000,000. The Company intends to introduce
independent producers to persons willing to fund entertainment projects and
prepare, or supervise the preparation of, all documentation required to obtain
such financing.
The Company may also assist small independent producers in the
distribution of low budget motion pictures. In addition to standard theatrical
release, other distribution channels which the Company will pursue include video
cassette, video disc, DVD technology, airline syndication and foreign television
syndication. Depending upon the nature and commercial appeal of the project, the
Company may also license the sound track to a motion picture and the rights to
market merchandise based upon the film. If the Company can obtain distribution
agreements for a motion picture and/or licensing agreements pertaining to the
commercial exploitation of ancillary rights to the film, the Company is of the
opinion that obtaining production financing will be less difficult.
In 1996 Stephen Replin, an officer, director and principal shareholder of
the Company, purchased a 25% interest in a feature-length motion picture (then
in production) for $25,000. In 1996 Mr. Replin conveyed a 5% interest in the
film (20% of Mr. Replin's interest) to the Company in exchange for 2,295,000
shares of the Company's common stock. The film in which the Company has a 5%
interest was completed in 1998 and its producer is presently attempting to sell
the film to a distributor. If a sale is completed it is not expected that the
Company or the other owners of the film will retain any rights in the profits,
if any, resulting from the distribution of the film.
At the present time, the Company is in the development stage and has not
earned any revenues from its proposed operations.
Before the Company can begin operations, the Company will need to raise at
least $250,000 so that the Company will be in a position to begin funding
entertainment projects and/or issuing completion bonds. The Company will attempt
to raise this capital through:
1. The private sale of its debt and/or equity securities.
2. Borrowings from private lenders.
3. Joint ventures which will be formed by the Company and third parties
for the purpose of funding one or more entertainment projects.
The Company does not have any commitments from any person to provide any
capital to either the Company or to any producer of motion pictures or other
form of entertainment. The Company does not have any agreements with any motion
<PAGE>
picture producer or producer of other forms of entertainment to finance the
production of any entertainment project. There can be no assurance that the
Company will be successful in terms of raising any capital, funding any
entertainment projects, or earning any profits.
Employees and Offices
As of March 20, 2000, the Company did not have any full time employees.
The Company's offices are located at 222 Milwaukee St., Suite 304, Denver,
CO 80206 and its telephone number is (303) 329-3479.
ITEM 2. DESCRIPTION OF PROPERTIES
See Item 1 of this report.
ITEM 3. LEGAL PROCEEDINGS.
The Company is not party to any pending legal proceeding nor is any of its
property the subject of any pending legal proceeding. The Company is not aware
of any proceeding that a governmental authority is contemplating.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not Applicable
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
As of March 20, 2000, there were approximately 1,300 beneficial owners of
the Company's common stock. The Company's common stock is not publicly traded.
Common Stock
The Company is authorized to issue 25,000,000 shares of common stock (the
"Common Stock"). Holders of Common Stock are entitled to cast one vote for each
share held of record of all matters presented to shareholders. Cumulative voting
is not allowed, which allows the holders of a majority of the outstanding Common
Stock to elect all directors.
Holders of Common Stock are entitled to receive such dividends as may be
declared by the Board of Directors out of funds legally available for the
payment of dividends and, in the event of liquidation, to share pro rata in any
distribution of the Company's assets after payment of liabilities. The Company
has never declared a dividend and it is not anticipated that dividends will be
paid in the foreseeable future.
<PAGE>
Holders of Common Stock do not have preemptive rights to subscribe to
additional shares issued by the Company. All of the outstanding shares of Common
Stock are fully paid and non-assessable.
Preferred Stock
The Company is authorized to issue up to 25,000,000 shares of preferred
stock. The Company's Articles of Incorporation provide that the Board of
Directors has the authority to issue the Preferred Stock from time to time, with
such designations, preferences, conversion rights, cumulative, relative,
participating, optional or other rights, qualifications, limitations, or
restrictions thereof as they determine, within the limitations provided by
Colorado statute.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
See Item 1 of this Report.
ITEM 7. FINANCIAL STATEMENTS
See the financial statements attached to this report.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS,
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Name Age Position
Stephen D. Replin 52 President and a Director
Raven Printz 58 Executive Vice-President and Secretary
Directors are elected at each annual general meeting and serve until their
successors have been elected. Officers are appointed by the board of directors
and serve at the pleasure of the board.
Stephen D. Replin has been an officer and director of the Company since
its inception in September 1996. From October 1988 through the present, Mr.
Replin has served as the President of Regatta Capital, Ltd. Mr. Replin has been
an asset-based lender in the state of Colorado since 1977. Mr. Replin received a
Bachelor of Science Degree in accounting from the University of Colorado in June
1969 and a Masters Degree in Business Administration, with distinction, from the
<PAGE>
New York University Graduate School of Business in June 1971, majoring in
corporate finance and investments. Mr. Replin received his law degree from the
University of Denver College of Law in June 1976, and a Master of Law Degree
(LL.M) in taxation from the New York University School of Law in June 1977. Mr.
Replin is a certified public accountant, licensed in the state of Colorado.
Raven Printz has been an officer of the Company since January 1999. Since
July 1996 Ms. Printz has been the President of Cherry Creek Film, Inc., a
corporation engaged in the development of independent full length feature films.
Cherry Creek Film also provides consulting services to the motion picture
industry and sponsors instructional seminars in the fields of filmmaking and
screen writing. For the past twenty-three years Ms. Printz has been involved
with over twenty full length feature films or documentaries as either a
producer, co-producer, writer, director, technical director, production
assistant, casting director, talent assistant, or consultant.
ITEM 10. EXECUTIVE COMPENSATION
The following table on discloses all compensation received by the
Company's President (the Company's Chief Executive Officer) during the three
years ending December 31, 1999. During this three-year period no executive
officer received annual salary and bonus payments from the Company in excess of
$100,000.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Annual Compensation Long Term Compensation
Other Securities All
Name and Annual Restricted Underlying Other
Principal Compen- Stock Options/ LTIP Compen-
Position Year Salary Bonus sation Awards SARs Payouts sation
Stephen Replin, 1999 - - - - - - -
President 1998 - - - - - - -
1997 - - - - - - -
</TABLE>
The following table shows the amount which the Company expects to pay its
executive officers during the year ending December 31, 2000 and the time which
the Company's executive officers plan to devote to the Company's business.
Proposed Time to be Devoted to
Name Compensation the Company's Business
Stephen D. Replin $5,000 10%
Raven Printz (1) $25,000 50%
(1) It is not expected that Ms. Printz will devote any substantial time to the
Company's business until the Company raises approximately $250,000 in
capital.
<PAGE>
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table shows the ownership of the Company's common stock by
the Company's officers and directors and by those persons known by the Company
to be the beneficial owners of more than 5% of the Company's common stock as of
March 20, 2000. Unless otherwise indicated all shares are owned of record.
Percent of
Name and Address Shares Owned Class
Stephen D. Replin 3,870,000 (1) 77.4%
222 Milwaukee St.
Suite 304
Denver, CO 80206
Raven Printz 75,000 1.5
222 Milwaukee St.
Suite 304
Denver, CO 80206
Chester Cedars
222 Milwaukee St. 450,000 9.0%
Suite 304
Denver, CO 80206
Laurie Rhoades
222 Milwaukee St. 450,000 9.0%
Suite 304
Denver, CO 80206
All Officers and Directors as
a Group (2 persons) 3,945,000 78.9%
(1) Includes shares owned by various business entities controlled by Mr. Replin.
There are no arrangements known to the Company which may result in a
change in control of the Company.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Since September 1996 Regatta Capital, Ltd. has provided office space,
furniture, and office equipment to the Company. Regatta Capital is controlled by
Stephen Replin, an officer and director of the Company. As of December 31, 1999
<PAGE>
Regatta Capital had not charged the Company for rent or any related costs or
expenses. It is not expected that Regatta Capital will charge the Company for
rent or other services until the Company begins to generate revenues.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Number Exhibit Page Number
3 Articles and Bylaws (1)
4 Instruments Defining the Rights of Security Holders (2)
10 Material Contracts None
27 Financial Data Schedule _____
(1) Incorporated by reference, and as same exhibit number, from the
Company's Registration Statement on Form 10-SB (Commission File
Number 0-27609).
(2) Included as part of Exhibit 3.
(b) The Company did not file any reports on Form 8-K during the quarter ending
December 31, 1999.
<PAGE>
FINANCIAL STATEMENTS
<PAGE>
Story & Company, P.C.
Certified Public Accountants
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors
Monet Entertainment Group, Ltd.
We have audited the accompanying balance sheets of the Monet Entertainment
Group, Ltd. (a Development Stage Enterprise) as of December 31, 1998 and 1999
and the related statements of income, stockholders' equity, and cash flows for
the two years then ended. These financial statements are the responsibility of
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance as to whether the balance sheet is free of material misstatements. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall balance sheet presentation. We believe that our audit
of the financial statements provides a reasonable basis for our opinion. . In
our opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Monet Entertainment Group, Ltd. (a
Development Stage Enterprise) as of December 31, 1998 and 1999, and the results
of its operations and its cash flows for the two years then ended. in conformity
with generally accepted accounting principles.
Story and Company, P.C.
Certified Public Accountants
March 6, 2000
Denver, Colorado
<PAGE>
MONET ENTERTAINMENT GROUP, LTD
(A Development Stage Enterprise)
BALANCE SHEET
December 31, 1998 and 1999
ASSETS: 1999 1998
- ------- ---- ----
Cash $1,961 $1,961
Investments
Energy Acquisition Group, Common Stock (note B) 115 115
Interest in motion picture (note C) 5,000 5,000
Organizational Expenses (note D) 2,843 2,843
------- -------
TOTAL ASSETS $9,919 $9,919
====== ======
SHAREHOLDERS EQUITY
Common Stock, no par value, 25,000,000 shares
authorized, of which 5,000,000 are outstanding
(notes B and C) $9,919 $9,919
Preferred stock, no par value, 25,000,000
authorized, none outstanding ------ ------
Total Shareholders Equity 9,919 9,919
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY $9,919 $9,919
- ----------------------------------------- ===== ======
The accompanying notes are an integral part of these financial statements
<PAGE>
MONET ENTERTAINMENT GROUP, LTD
(A Development Stage Enterprise)
STATEMENT OF INCOME AND RETAINED EARNINGS
For Years Ended December 31, 1998 and 1999
1999 1998
Income: $0 $0
Expense 0 0
--- --
Net Operating Income Before Taxes 0 0
---- --
Net Income 0 0
---- --
Beginning Retained Earnings 0 0
---- ----
Ending Retained Earnings $ 0 $ 0
====== =====
The accompanying notes are an integral part of these financial statements
<PAGE>
MONET ENTERTAINMENT GROUP, LTD
(A Development Stage Enterprise)
STATEMENT OF CASH FLOWS
From the Years Ended December 31, 1998 and 1999
1999 1998
Cash Flows From Operating Activities
Net Income $ 0 $ 0
----- -----
Net Cash provided by Operating Activities 0 0
------ ------
Cash Flows From Investing Activities
Net Cash provided by Investing Activities 0 0
------ ------
Cash Flow From Financing Activities
Issuance of Capital Stock 0 0
------ ------
Net Cash Provided by Financing Activities 0 0
------ ------
Net Increase in Cash 0 0
Cash, Beginning of Year 1,961 1,961
----- -----
Cash, December 31, 1999; 1998 $1,961 $1,961
====== ======
The accompanying notes are an integral part of these financial statements
<PAGE>
MONET ENTERTAINMENT GROUP, LTD
(A Development Stage Enterprise)
Notes to Financial Statements
A - Background and Summary of Significant Accounting Policies
Background
The Monet Entertainment Group, Ltd.. (the Company) was formed on September 20,
1996 for the purpose of engaging in two pursuits within the entertainment
industry which involve developing a unique "completion guarantee" to assure the
completion of selected projects and developing a financing program for full
length motion pictures:
1. Completion bonding activities are associated with and a part of
commercial film production and other entertainment production activities. A
"completion bond" is a guarantee that should a film project go over budget or
not have sufficient capital to complete the film, the guarantor will provide the
additional capital needed to insure completion of the project. This guarantee
for small independent producers is unique in the entertainment industry. At
present completion bonding has been a requirement for medium and large budget
productions but generally unavailable for small producers. Lack of availability
of this or a similar financial product has resulted in secondary producers
having great difficulty in obtaining financing and has kept many worthwhile
projects from reaching theaters. It is anticipated that Monet's completion bonds
will be reinsured with companies with sufficient capital resources to preclude
the possibility that Monet will ever be at risk for capital shortages in bonded
projects.
2. Financing feature length budget films will be accomplished through the
formation of a continuing series of joint ventures with independent film makers.
Plans include taking fractional interests in selected film projects, thus
spreading investor risk in the most advantageous manner. Project involvement
will be financed through joint-venture arrangements with individual investors
and small non-entertainment related companies.
Monet Entertainment Group, Ltd. is considered to be a Development Stage
Enterprise because planned principal operations have not commenced and there has
been no revenue therefrom.
Accounting Policies
The accompanying balance sheet is presented in the format prescribed for
development stage enterprises by Statement of Financial Accounting Standards No.
7 issued by the Financial Accounting Standards Board.
<PAGE>
MONET ENTERTAINMENT GROUP, LTD
(A Development Stage Enterprise)
Notes to Financial Statements
B - Investments The Company has exchanged shares of its common stock for shares
of Series C common stock of Energy Acquisition Companies, Inc.(Energy), a New
York Corporation.
The exchange, which was effective on October 7, 1996, (the date the Certificate
of Share Exchange was filed by the Colorado Secretary of State and by the New
York Department of State), resulted in the exchange of 115,531 shares of Energy
Acquisition Companies, Inc. Series C, Par Value $0.001 Common Stock for 500,000
shares of Monet Entertainment Group, Ltd. Common Stock
The 115,531 shares of Energy Acquisition Companies, Inc. common stock received
by Monet represents 9/10 of one percent of Energy's outstanding shares. The
500,000 shares of Monet common stock surrendered to Energy represents eleven
percent of of the Company's outstanding common stock, and two percent of its
authorized stock.
C - Interest in Motion Picture During its initial operating period the Company
acquired an interest in a feature-length motion picture, tentatively entitled
Salvation. This interest was conveyed by Mr. Stephen Replin, President and
principal stockholder of Monet Entertainment Group, Ltd., in exchange for
2,295,000 shares of common stock. In 1996 Mr. Replin purchased a 25 percent
interest in the film for $25,000. He conveyed 20 percent of his interest in the
film, thereby providing Monet with a five percent ownership position.
When Monet Entertainment acquired its interest the film was incomplete. As of
December 31, 1999 the film has been completed for more than a year. Management
continues efforts to sell the film outright to a distributor, however a sale in
the immediate future is not anticipated. An outright sale contemplates a fixed
price agreement in which the sellers do not retain rights to share in the
profits, is any, resulting from the distribution and promotion of the film. It
is not anticipated that the owners of the film, including Monet Entertainment
Group, will be required to contribute additional capital to sell the film.
D - Organizational Expenses Three former officers of the Corporation were each
awarded 435,000 shares of common stock in recognition for their service rendered
without compensation to the Corporation. The value of their contribution has
been classified as an organizational expense and will be amortized over a period
of time consistent with tax law, once the corporation is no longer classified as
a development stage enterprise.
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(a) of the Exchange Act, the Registrant
has caused this Report to be signed on its behalf by the undersigned, thereunto
duly authorized on the ____ day of March, 2000.
MONET ENTERTAINMENT GROUP, LTD.
By /s/ Stephen D. Replin
Stephen D. Replin, President,
Chief Executive Officer and
Pricipal Financial Officer
In accordance with the Exchange Act, this Report has been signed by the
following persons on behalf of the Registrant in the capacities and on the dates
indicated.
Signature Title Date
/s/ Stephen Replin
Stephen Replin Director March 27, 2000
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