UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10

 

GENERAL FORM FOR REGISTRATION OF SECURITIES

Pursuant to Section 12(b) or (g) of The Securities Exchange Act of 1934

 

All for One Media Corp.

(Exact name of Registrant as specified in its charter)

 

Utah

5592357-1042

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

 

Attn: Brian Lukow

236 Sarles Street

Mt. Kisco, New York 10549

(914) 574-6174

(Address and Telephone Number of Registrant’s Principal Executive Offices and Principal Place of Business)

 

Securities to be registered pursuant to Section 12(b) of the Act:

 

Title of each class to be so registered

Name of each exchange on which each class is to be registered

None

None

 

Securities to be registered pursuant to Section 12(g) of the Act:

 

Common Stock, par value $0.001

(Title of class)

 

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

¨

Accelerated filer

¨

Non-accelerated filer

¨

Smaller reporting company

x

(Do not check if a smaller reporting company)

 


 

 
 

 

 

Table of Contents

 

Item 1.

Business.

3

Item 1A.

Risk Factors.

4

Item 2.

Financial Information.

10

Item 3.

Properties.

12

Item 4.

Security Ownership of Certain Beneficial Owners and Management.

12

Item 5.

Directors and Executive Officers.

13

Item 6.

Executive Compensation.

15

Item 7.

Certain Relationships and Related Transactions, and Director Independence.

16

Item 8.

Legal Proceedings.

17

Item 9.

Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters.

17

Item 10.

Recent Sales of Unregistered Securities.

17

Item 11.

Description of Registrant’s Securities to be Registered.

19

Item 12.

Indemnification of Directors and Officers.

19

Item 13.

Financial Statements and Supplementary Data.

20

Item 14.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

21

Item 15.

Financial Statements and Exhibits.

21

SIGNATURES

22

 

 
2

 

Item 1. Business.

 

All for One Media Corp. (referred to herein as the “Company,” “All for One” or “AFOM”) was incorporated under the laws of the State of Utah on March 2, 2004, as “Early Equine, Inc.” The Company is principally engaged in content development of media targeted at the “tween” demographic consisting of children between the ages of seven and fourteen. We specialize in creating, launching, and marketing original pop music performed by “boy bands” and “girl groups,” though we also produce motion pictures, pre-recorded music, television, live concert performances, and licensed merchandise. On October 26, 2015, the Company entered into an asset exchange agreement with Crazy for the Boys, LLC, a Delaware limited liability company (“CFTB”), wherein the Company acquired movie screenplays, master recordings, trademarks, URLs, and other assets from CFTB in exchange for 5,201,500 shares of the Company’s common stock. As of the date of this registration statement, CFTB beneficially owns approximately 31.54% of the Company’s outstanding common stock. The Company also carries out its business through its subsidiary, Tween Entertainment Brands Inc., a corporation organized under the laws of the state of Florida. On November 4, 2015 the Company changed its name to All for One Media Corp.

 

From inception to date, we have generated no revenues, we have an accumulated deficit of $2,399,072 as of June 30, 2016, and we anticipate generating losses for the next twelve months. As of June 30, 2016, we had cash and cash equivalents of $30,694, and we will need to raise capital to implement our planned operations. If we are unable to do so, an entire investment in our stock could be lost. To address this concern, we have had discussions with prospective investors interested in financing the Company directly, as well as joint venture partners who have expressed interest in funding or co-funding certain of our projects. Our independent public accounting firm has issued an audit opinion, which includes a statement that the results of our operations and our financial condition raise substantial doubt about our ability to continue as a going concern.

 

The address of our principal executive office is:

 

All for One Media Corp.

236 Sarles Street

Mt. Kisco, New York 10549

 

Our telephone number is (914) 574-6174. Our e-mail address is brian@entbrands.com. Our website can be viewed at www.allforone.media. Information included in our website is not a part of this registration statement.

 

Competition

 

The Company competes with all forms of entertainment. A large number of companies, many with significantly more resources than All for One Media, Inc., produce and distribute film and music recordings, exploit products in the home entertainment market, and produce music for live theater and performance. Our competitive position primarily depends on the amount and quality of the content produced, its distribution and marketing success, and public response. We also compete to obtain creative and performing talents, story properties, and many other rights that are essential to the success of our business. Operating results for these offerings are influenced by seasonal consumer purchasing behavior, consumer preferences, levels of marketing and promotion, and by the timing and performance of releases, which may be directly or indirectly influenced by competitors.

 

Trademarks & Copyrights

 

We own the website URLs www.crazyfortheboys.com, www.allforone.media, and www.thescab.org.

 

Regulatory Matters

 

Children’s Privacy

 

Various laws and regulations intended to protect the interests of children are applicable to our business, including measures designed to protect the privacy of minors online. As we are currently focused on marketing content to this demographic, we will be subject to these regulations. The U.S. Children’s Online Privacy Protection Act (“COPPA”) limits the collection of personal information online from children under the age of 13 by operators of websites or online services. Effective July 1, 2013, the Federal Trade Commission adopted revisions to regulations under COPPA to further expand the scope of the regulations. Such regulations also limit the types of advertising we are able to sell on our websites and applications and impose strict liability for certain actions of advertisers, which could affect advertising demand and pricing. State and federal policymakers are also considering regulatory and legislative methods to protect consumer privacy on the Internet, and these efforts have focused particular attention on children and teens.

 

 
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Legal Proceedings

 

We know of no existing or pending legal proceedings against us, nor are we involved as a plaintiff in any proceeding or pending litigation. There are no proceedings in which any of our directors, officers or any of their respective affiliates, or any beneficial stockholder, is an adverse party or has a material interest adverse to our interest.

 

Employees

 

The Company currently has one full-time employee and no part-time employees.

 

Through in-house and third-party production service companies, we will engage the services of writers, directors, performers, musicians, and various crew members who are subject to certain industry-wide and/or specially negotiated collective bargaining agreements or one-off letter agreements. The Alliance of Motion Picture and Television Producers is a multi-employer trade association, which, along with and on behalf of hundreds of member companies, negotiates the industry-wide collective bargaining agreements with these parties. Any labor dispute with the labor organizations that represent any of these parties could disrupt our operations and reduce our revenues.

 

Item 1A. Risk Factors.

 

This investment has a high degree of risk. Before you invest you should carefully consider the risks and uncertainties described below and the other information in this prospectus. If any of the following risks actually occur, our business, operating results and financial condition could be harmed and the value of our stock could go down. This means you could lose all or a part of your investment.

 

RISKS RELATED TO OUR COMPANY

 

We may not achieve profitability or positive cash flow.

 

Our ability to achieve and maintain profitability and positive cash flow will be dependent upon such factors as our ability to organize and promote concerts. Based upon current plans, we expect to incur operating losses in future periods because we expect to incur expenses that will exceed revenues for an unknown period of time. We cannot guarantee that we will be successful in generating sufficient revenues to support operations in the future.

 

We have a limited operating history which may not be an indicator of our future results.

 

We are a development stage company with a limited capital base. We have been engaged in organization and start-up activities related to financing the launch of a girl group band. We have no operating history investors may use to evaluate our future performance. As a result of our limited operating history, our plan for rapid growth, and the increasingly competitive nature of the markets in which we operate, the historical financial data is of limited value in evaluating our future revenue and operating expenses. Our planned expense levels will be based in part on expectations concerning future revenue, which is difficult to forecast accurately based on current plans of expansion and growth. We may be unable to adjust spending in a timely manner to compensate for any unexpected shortfall in revenue. Further, general and administrative expenses may increase significantly as we expand operations. To the extent that these expenses precede, or are not rapidly followed by, a corresponding increase in revenue, our business, operating results, and financial condition will suffer.

 

We have never produced, distributed or marketed a movie.

 

We intend to rely on a number of production, distribution, and marketing methods. Our primary focus will be the production, distribution, and marketing of Crazy For The Boys. Our management team has never produced, distributed or marketed a movie. Production, distribution, and marketing of movies is highly competitive and there can be no assurance that we will be able to market our product.

  

We are dependent on a limited number of proprietary copyrights.

 

We will initially derive all revenue from two properties, the Crazy For The Boys film and the Crazy For The Boys soundtrack, which, even if successful, will likely generate revenues for only a limited period of time. Because our licensing revenue is highly subject to the changing trends in the entertainment business, our licensing revenue may be subject to dramatic increases and decreases. Nevertheless, we feel that by promoting these two properties to launch our brand, we can successfully leverage the maturity of social media to connect tweens with content that is relevant and with which they can identify.

 

 
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Competition in the entertainment industry may make it difficult to succeed long-term.

 

The recorded music, motion picture, and music publishing industries are highly competitive. Our competition includes major media and entertainment studios, independent film and music production companies, and television networks, both generally and concurrently at the time of release of our respective content. We compete with larger production studios that are better capitalized, who can fund projects based on the returns of prior productions. We will compete with these companies for artists, talent, airtime, and space in retail outlets. We are not at present, and do not expect in the foreseeable future to be, a significant participant in this marketplace. The market for music and movie production, distribution, and marketing is very competitive, and our lack of experience, compared to that of these competitors, may impair our ability to successfully produce content that creates a positive return on investment. Furthermore, we face indirect competition from alternative forms of leisure, such as travel, sporting events, outdoor recreation, and other cultural activities.

 

The entertainment industry is highly competitive, rapidly evolving, and subject to constant change. Other entertainment companies currently offer one or more of each of the types of products and services we plan to offer. In addition, our music and motion picture productions will compete for audience acceptance and exhibition outlets with music and motion pictures produced and distributed by other larger, more established companies. As a result, the success of any of our recorded music products or motion pictures is dependent not only on the quality and acceptance of a particular production, but also on numerous independent companies with whom we may partner. Some of our competitors in the music business will include Motown, Time Warner Inc., Universal Music Group, Sony BMG, and EMI, and numerous independent companies. We expect that our film business will compete with well-established companies, including MGM, DreamWorks, Time Warner Inc., Sony, Paramount, and Universal, as well as numerous small independent companies, all of which produce, develop or market films, DVDs, television, and cable programming.

 

The Company must respond successfully to ongoing changes in the U.S. video entertainment industry and consumer viewing patterns to remain competitive.

 

The Company expects that a substantial portion of its revenues and profits will be derived from the production and licensing of video entertainment offerings. The U.S. video entertainment industry is evolving, with developments in technology leading to new video services that are experiencing rapid growth, resulting in higher overall video content consumption as well as a shift in consumer viewing patterns as consumers seek more control over when, where, and how they view video content. These changes pose risks to the traditional U.S. television industry and some of the Company’s business models, including the disruption of the traditional television content delivery model by video streaming services, some of which are growing rapidly. The Company’s strategy to address these risks, including continuing to produce high-quality original content, and investing in technology and working with partners to enhance our content offerings, may not be successful. The Company may incur significant costs to implement its strategy and respond to and mitigate the risks from these changes, and, if not successful, could experience a significant adverse impact on the Company’s competitive position, businesses and results of operations.

 

The popularity of content is difficult to predict and can change rapidly, and low public acceptance of the Company’s content will adversely affect its results of operations.

 

The revenues expected from the sale, distribution, and licensing of television programming, feature films, music, and other content will depend primarily on widespread public acceptance of that content, which is difficult to predict and can change rapidly. The Company must invest substantial amounts in the production and marketing of its content before it learns whether such content will reach anticipated levels of popularity with consumers. The popularity of the Company’s content depends on many factors, only some of which are within the Company’s control. Examples include the popularity of competing content (including locally-produced content internationally), the availability of alternative forms of leisure and entertainment activities, the Company’s ability to maintain or develop strong brand awareness and target key audiences, and the Company’s ability to successfully anticipate (and timely adapt its content to) changes in consumer tastes in the countries and territories in which the Company operates. Low public acceptance of the Company’s content will adversely affect its results of operations.

 

Generally, feature films that perform well upon initial release also have commercial success in subsequent distribution channels. Therefore, the underperformance of a feature film, especially an “event” film, upon its public release can result in lower than expected revenues for the Company from the license of the film to broadcast and cable networks. If a new “event” film fails to achieve commercial success upon release, it may limit the Company’s ability to create new content. The failure to develop successful new content could have an adverse effect on the Company’s results of operations.

 

Consumer purchasing habits are not consistent throughout the year.

 

Sales of music and licensed goods concepts are seasonal, with a high percentage of retail sales occurring during the third and fourth quarters of the calendar year. As a result of the seasonal nature of our industry, we would be significantly and adversely affected by unforeseen events that negatively impact the retail environment or consumer buying patterns, particularly if such events were to impact the key-selling season.

 

Some initiatives to respond to and address the changes to the U.S. entertainment industry and consumer viewing and listening patterns may be outside the Company’s control.

 

While the Company supports the development of better consumer interfaces, the development and implementation of these interfaces are often outside the Company’s control. In addition, the Company may not be able to introduce new business models and products to enhance the value of its content without the cooperation of affiliates or other partners.

 

 
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Advances in technology may have a material adverse effect on our revenues.

 

Advances in technology may affect the manner in which entertainment content is distributed to consumers. These changes, which might affect the entertainment industry as a whole, include the proliferation of digital music players, cloud-based services that allow consumers to download and store single songs, and pay-per-view movie services. These developments have created new outlets for consumers to purchase entertainment content. These new outlets may affect the quantity of entertainment products available for purchase and may reduce the amount that consumers are willing to pay for particular products. As a result, there could be a negative impact on our ability to sell DVDs and CDs. Any failure to adapt our business model to these changes could have a material adverse effect on our revenues.

 

Our success will depend on external factors in the music and film industries.

 

Operating in the music and film industries involves a substantial degree of risk. Each planned girl group and boy band music project or film production is an individual artistic work, and unpredictable audience reactions determine commercial success. The commercial success of a music or film project also depends on:

 

· the quality and acceptance of other competing records or films released into the marketplace at or near the same time;
· critical reviews;
· the availability of alternative forms of entertainment and leisure activities;
· general economic conditions; and
· various other tangible and intangible factors.

 

Each of these factors is subject to change and cannot be predicted with certainty. There can be no assurance that our planned music and film projects will receive favorable ratings or reviews or that consumers will purchase our entertainment products and services.

 

The Company’s results of operations may be adversely affected if the Company’s efforts to increase sales of its video content and make digital ownership of content more compelling to consumers are not successful.

 

Several factors have contributed to an industry-wide decline in sales of home entertainment products in physical formats in recent years, including consumers shifting to on demand video subscriptions and electronic purchases and rentals; consumers electing to rent films using discount rental kiosks; changing retailer strategies and initiatives ( e.g. , reduction in floor space devoted to home entertainment products in physical formats); retail store closures; weak economic conditions; increasing competition for consumer discretionary time and spending; and piracy. The Company’s efforts to offset the decline in sales of home entertainment products in physical formats and to make digital ownership of content more attractive to consumers may not be successful or may take several more years to become successful.

 

The Company may be adversely affected if distributors fail to adequately promote our creative projects.

 

Decisions regarding the timing of release and promotional support of our girl group and boy band music, music video, motion picture, television, and related licensing products are important in determining the success of the Company. As with most production companies, we do not control the manner in which our distributing partners distribute our content to final consumers. Although our distributors will have a financial interest in the success of our girl group and boy band projects, and decision by our distributors to not promote our products, or to promote a competitor’s products, could have a material adverse affect on our business and financial condition.

 

If the Company fails to compete successfully against alternative sources of entertainment, there may be an adverse effect on the Company’s results of operations.

 

The Company competes with all other sources of entertainment, including television, premium pay television services, on demand video subscriptions, feature films, the Internet, home entertainment products, videogames, social networking, print media, pirated content, live sports and other events, for consumers’ leisure and entertainment time and discretionary spending. The increased number of media and entertainment choices available to consumers has made it much more difficult to attract and obtain their attention and time. There can be no assurance that the Company will be able to compete successfully in the future against existing or new competitors.

 

 
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The Company must protect its intellectual property.

 

We will rely on copyright, trademark, and other proprietary rights law to protect the intellectual property of our girl group and boy band projects. Our business is subject to the risk of third parties infringing on these intellectual property rights. We may need to pursue litigation to protect our intellectual property and that of our authorized licensors, which could result in substantial costs and divert resources.

 

Threats of piracy of the Company’s content, products, and other intellectual property may further decrease the revenues received from the legitimate sale, licensing, and distribution of its content and adversely affect its business and profitability.

 

Though the Company has never been victim of copyright piracy, it may be negatively affected this practice, and any piracy of the Company’s content, products and other intellectual property could reduce the revenues the Company earns from the legitimate sale, licensing and distribution of its content, products and other intellectual property. The risks relating to piracy have increased in recent years due to technological developments that have made it easier to create, distribute and store high-quality unauthorized copies of content, such as the proliferation of cloud-based storage and streaming services, increased broadband Internet speeds and penetration rates, and increased availability and speed of mobile data transmission. Piracy is particularly prevalent in countries that lack effective copyright and technical legal protections or enforcement measures, and illegitimate operators based in those parts of the world can attract viewers from anywhere in the world. Once our projects are produced for mass distribution, the Company will devote the necessary resources to protect its content, products and intellectual property, but these efforts to enforce rights and combat piracy may not be successful.

 

The Company may be subject to claims that it infringed intellectual property rights of others, which could require the Company to change its business practices.

 

Successful claims that the Company infringes on the intellectual property rights of others could require the Company to enter into royalty or licensing agreements on unfavorable terms, incur substantial monetary liability, be prohibited preliminarily or permanently from further use of the intellectual property in question or require the Company to change its business practices to stop the infringing use, which could limit its ability to compete effectively. Even if the Company believes a claim of intellectual property infringement is without merit, defending against the claim can be time-consuming and costly and divert management’s attention and resources away from its businesses.

 

We may be negatively affected by adverse general economic conditions.

 

Current conditions in domestic and global economies are extremely uncertain. Adverse changes may occur as a result of softening global economies, wavering consumer confidence caused by the threat of terrorism and war, and other factors capable of affecting economic conditions. Such changes could have a material adverse effect on our business, financial condition, and results of operations.

 

The Company’s businesses are subject to labor interruption.

 

The Company and some of its suppliers and business partners retain the services of writers, directors, actors, technicians, trade employees and others involved in the development and production of its television, feature film, and music content, who are covered by collective bargaining agreements. If negotiations to renew expiring collective bargaining agreements are not successful or become unproductive, the affected unions could take actions such as strikes, work slowdowns or work stoppages. Such actions or the possibility of such actions could result in delays in the production of the Company’s television programming and feature films. The Company could also incur higher costs from such actions, new collective bargaining agreements or the renewal of collective bargaining agreements on less favorable terms. Many of the collective bargaining agreements that cover individuals providing services to the Company are industry-wide agreements, and the Company may lack practical control over the negotiations and terms of these agreements. Depending on their duration, such union or labor disputes could have an adverse effect on the Company’s results of operations.

 

Our success depends largely on our management.

 

We are dependent on the continued employment of Brian Lukow, our President and CEO. Although we believe that we would be able to locate a suitable replacement, if we lose the services of Mr. Lukow, we cannot assure you that we would be able to do so. Additionally, our future operating results will substantially depend on our ability to attract and retain highly qualified management, financial, technical, creative, and administrative personnel. Competition for such people is intense and can lead to increased compensation expenses. We cannot assure you that we will be able to attract and retain the personnel necessary for the development of our business.

 

 
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We need to obtain additional financing in order to continue our operations.

 

On a prospective basis, we will require both short-term financing for operations and long-term capital to fund our expected growth. We have no existing bank lines of credit and have not established any definitive sources for additional financing programs. The entertainment industry is rapidly evolving and our inability to take advantage of opportunities because of capital constraints may have a material adverse effect on our current business and future prospects.

 

RISKS RELATED TO OUR SECURITIES

 

Our stock price may be volatile, which may result in losses to our shareholders.

 

The stock markets have experienced significant price and trading volume fluctuations, and the market prices of companies listed on the OTC Pink and other similarly-tiered quotation boards have been volatile in the past and have experienced sharp share price and trading volume changes. The trading price of our common stock is likely to be volatile and could fluctuate widely in response to many factors, including the following, some of which are beyond our control:

 

· variations in our operating results;
· changes in expectations of our future financial performance, including financial estimates by securities analysts and investors;
· changes in operating and stock price performance of other companies in our industry;
· additions or departures of key personnel; and
· future sales of our common stock.

 

Domestic and international stock markets often experience significant price and volume fluctuations. These fluctuations, as well as general economic and political conditions unrelated to our performance, may adversely affect the price of our common stock.

 

Our common shares may become thinly traded and you may be unable to sell at or near ask prices, or at all.

 

We cannot predict the extent to which an active public market for trading our common stock will be sustained. This situation is attributable to a number of factors, including the fact that we are a small company that is relatively unknown to stock analysts, stock brokers, institutional investors and others in the investment community who generate or influence sales volume. Even if we came to the attention of such persons, those persons tend to be risk-averse and may be reluctant to follow, purchase, or recommend the purchase of shares of an unproven company such as ours until such time as we become more seasoned and viable. As a consequence, there may be periods of several days or more when trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share price. We cannot give you any assurance that a broader or more active public trading market for our common stock will develop or be sustained, or that current trading levels will be sustained.

 

The market price for our common stock is particularly volatile given our status as a relatively small company, which could lead to wide fluctuations in our share price. You may be unable to sell your common stock at or above your purchase price if at all, which may result in substantial losses to you.

 

Shareholders should be aware that, according to SEC Release No. 34-29093, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Such patterns include (1) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; (2) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (3) boiler room practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons; (4) excessive and undisclosed bid-ask differential and markups by selling broker-dealers; and (5) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the resulting inevitable collapse of those prices and with consequent investor losses. Our management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to our securities. The occurrence of these patterns or practices could increase the volatility of our share price.

 

 
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Because the SEC imposes additional sales practice requirements on brokers who deal in shares of penny stocks, some brokers may be unwilling to trade our securities. This means that you may have difficulty reselling your shares, which may cause the value of your investment to decline.

 

Our shares are classified as penny stocks and are covered by Section 15(g) of the Exchange Act, which imposes additional sales practice requirements on brokers-dealers who sell our securities. For sales of our securities, broker-dealers must make a special suitability determination and receive a written agreement prior from you to making a sale on your behalf. Because of the imposition of the foregoing additional sales practices, it is possible that broker-dealers will not want to make a market in our common stock. This could prevent you from reselling your shares and may cause the value of your investment to decline.

 

Financial Industry Regulatory Authority (FINRA) sales practice requirements may limit your ability to buy and sell our common stock, which could depress the price of our shares.

 

FINRA rules require broker-dealers to have reasonable grounds for believing that an investment is suitable for a customer before recommending that investment to the customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status and investment objectives, among other things. Under interpretations of these rules, FINRA believes that there is a high probability such speculative low-priced securities will not be suitable for at least some customers. Thus, FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our shares, have an adverse effect on the market for our shares, and thereby depress our share price.

 

Volatility in our common share price may subject us to securities litigation.

 

The market for our common stock is characterized by significant price volatility as compared to seasoned issuers, and we expect that our share price will continue to be more volatile than a seasoned issuer for the indefinite future. In the past, plaintiffs have often initiated securities class action litigation against a company following periods of volatility in the market price of its securities. We may, in the future, be the target of similar litigation. Securities litigation could result in substantial costs and liabilities and could divert management's attention and resources.

 

Our business is subject to changing regulations related to corporate governance and public disclosure that have increased both our costs and the risk of noncompliance.

 

Because our common stock is publicly traded, we are subject to certain rules and regulations of federal, state and financial market exchange entities charged with the protection of investors and the oversight of companies whose securities are publicly traded. These entities, including the Public Company Accounting Oversight Board, the SEC and FINRA, have issued requirements and regulations and continue to develop additional regulations and requirements in response to corporate scandals and laws enacted by Congress, most notably the Sarbanes-Oxley Act of 2002. Our efforts to comply with these regulations have resulted in, and are likely to continue resulting in, increased general and administrative expenses and diversion of management time and attention from revenue-generating activities to compliance activities. Because new and modified laws, regulations and standards are subject to varying interpretations in many cases due to their lack of specificity, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions to our disclosure and governance practices.

 

Sales of our currently issued and outstanding stock may become freely tradable pursuant to Rule 144 and may dilute the market for your shares and have a depressive effect on the price of the shares of our common stock.

 

A majority of the outstanding shares of our common stock are “restricted securities” within the meaning of Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”) (“Rule 144”). As restricted shares, these shares may be resold only pursuant to an effective registration statement or under the requirements of Rule 144 or other applicable exemptions from registration under the Securities Act and as required under applicable state securities laws. Rule 144 provides in essence that one year following a company filing Form 10 information with the SEC to that effect, a non-affiliate who has held restricted securities for a period of at least six months may sell their shares of common stock. Under Rule 144, affiliates who have held restricted securities for a period of at least six months may, under certain conditions, sell every three months, in brokerage transactions, a number of shares that does not exceed the greater of 1% of a company’s outstanding shares of common stock or the average weekly trading volume during the four calendar weeks prior to the sale.

 

We may seek to raise additional funds, finance acquisitions or develop strategic relationships by issuing capital stock.

 

We may finance our operations and develop strategic relationships by issuing equity or debt securities, which could significantly reduce the percentage ownership of our existing stockholders. Furthermore, any newly issued securities could have rights, preferences and privileges senior to those of our existing stock. Moreover, any issuances by us of equity securities may be at or below the prevailing market price of our stock and in any event may have a dilutive impact on your ownership interest, which could cause the market price of our stock to decline.

 

 
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Our preferred stock could be issued to inhibit potential investors or delay or prevent a change of control that may favor you.

 

Some of the provisions of our certificate of incorporation, our bylaws and Utah law could, together or separately, discourage potential acquisition proposals or delay or prevent a change in control. In particular, our board of directors is authorized to issue up to 5,000,000 shares of preferred stock (less any outstanding shares of preferred stock) with rights and privileges that might be senior to our common stock, without the consent of the holders of the common stock.

 

Our common stock is subject to the "penny stock" rules of the SEC and the trading market in our securities is limited, which makes transactions in our stock cumbersome and may reduce the value of an investment in our stock.

 

The Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a "penny stock," for the purposes relevant to us, 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:

 

· that a broker or dealer approve a person’s account for transactions in penny stocks; and
· 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:

 

· obtain financial information and investment experience objectives of the person; and
· make a reasonable determination that the transaction in penny stocks are suitable for that person and the 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 prescribed by the Commission relating to the penny stock market, which, in highlight form:

 

· sets forth the basis on which the broker or dealer made the suitability determination; and
· that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

 

Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock.

 

Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the 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.

 

Item 2. Financial Information.

 

The following discussion should be read in conjunction with the financial statements and related notes that appear elsewhere in this prospectus. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements.   All forward-looking statements speak only as of the date on which they are made. We undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made.

 

Management’s Discussion and Analysis or Plan of Operations

 

Certain statements in this Report constitute “forward-looking statements.” Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Factors that might cause such a difference include, among others, uncertainties relating to general economic and business conditions; industry trends; changes in demand for our products and services; uncertainties relating to customer plans and commitments and the timing of orders received from customers; announcements or changes in our pricing policies or that of our competitors; unanticipated delays in the development, market acceptance or installation of our products and services; changes in government regulations; availability of management and other key personnel; availability, terms and deployment of capital; relationships with third-party equipment suppliers; and worldwide political stability and economic growth. The words "believe", "expect", "anticipate", "intend" and "plan" and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made.

 

 
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Liquidity and Capital Resources

 

Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. We have not generated revenues to fund our operating expenses. At September 30, 2015, we had a cash balance of $102 and working capital deficit of $102,337. At June 30, 2016, we had a cash balance of $30,694 and working capital deficit of $66,493. The Company’s principal liquidity for the year ended September 30, 2015 debt financing of approximately $22,000. The Company’s principal liquidity for the nine months ended June 30, 2016 came from the sale of equity interests of approximately $203,000 and debt financing of approximately $30,000.

 

As discussed above, the Company anticipates incurring significant expenditures during the coming year and to pursue its planned business operations including development of content and entertainment media. The Company’s ability to execute on these plans is dependent on its ability to generate additional investment proceeds. In the event that the Company is unable to raise the necessary funds, it would have to modify its current business plans and may not be able to attract the customers necessary to generate positive income from operations in such case; the business plan would have to be modified to address the funding issues.

 

As noted, the past operating expenses and cash needs are not indicative of our current operations which require substantially more cash to operate. At this time, the Company is dependent on outside funding to support its operations and anticipates it will need outside funding for at least the next twelve to twenty four months to support its business model. If the Company is unable to obtain continued outside funding, its operations would be severely impacted and it may not be possible to remain in business. Given current operations, traditional debt financing is not likely and the Company will have to continue to rely on equity or debt investments for outside non-banking sources.

 

Plan of Operations

 

All For One Media Corp. is in the business of exploiting the lucrative tween demographic across a multitude of entertainment platforms. The Company's primary business objective is to embark on creating, launching and marketing original pop music groups, commonly referred to as "boy bands" and "girl groups," by utilizing both traditional and social media models. All For One Media created and owns over thirty completed master recordings as well as a full length motion picture called "Crazy For The Boys," which is a musical comedy that also serves as the back story to the Company's plan to launch a new girl group. 

 

The Company expects to generate revenues from sales, downloads and streaming of original recorded music, videos, motion pictures, music publishing, live performances, licensed merchandise and corporate sponsorships. 

 

The Company is currently developing a new girl group (hereinafter the “Girl Group,” though the exact name has yet to be determined) brand based on an original pop group consisting of five teenage girls. Each group member portrays a different fictional character . Each character represents a distinct cross section of popular teen personas. They are: the “hip hop girl,” the “punk rocker,” the “biker babe,” the “hippie chick,” and “preppie cheerleader.” Each character will be highly stylized to represent a distinct fashion statement. An overriding theme to the group is the celebration of individuality. The underlying social message is anti–clique. The girl group will be marketed to children primarily between the ages of seven and fourteen. This target demo is often referred to as the “tween market.” Management is committed to recruiting girls of the highest triple threat caliber. “Triple threat” refers to a performer’s ability to excel at singing, dancing, and acting. 

 

The production process starts with a series of auditions held in New York City, New York and Los Angeles, California to find the key acting and singing performers, which began in October 2016. We enlisted reputable personnel to assist in this process, including highly regarded youth casting directors, choreographers, a vocal coach, an audition pianist, and a representative from our social media agency. The cost for this step in the process is approximately $100,000.

 

Currently, our casting directors are negotiating offers with leading candidates and their agents for the five Girl Group roles, which is expected to continue through December 2016. We anticipate incurring expenses of approximately $10,000 during this phase.

 

Preliminary recordings and rehearsal is expected to begin January 2017, which is expected to last six weeks. Full-scale filming and production for Crazy for the Boys will begin when the Company finalizes all necessary financing, ideally in March 2017. We currently plan for the shooting schedule to require 23 days, followed by ten weeks of post-production editing and reviewing.

 

Each cast member will be signed to exclusive production and management contracts with the Company. The cast members of the Girl Group will be paid a guaranteed salary. Girl Group members will be contractually obligated to make the group their full time professional commitment.

 

The Company plans to retain control of all future original master recordings by the Girl Group. The Company believes that ownership of the masters will allow for both the maximum financial return and greatest leverage. 

 

The Company is likewise developing a cast and projects for a boy band (hereinafter the “Boy Band,” though the exact name has yet to be determined) that will be comprised of five teenage boys. The cast members of the Boy Band will be paid a guaranteed salary. The Boy Band members will be contractually obligated to make the Boy Band their full time professional commitment. Management believes the boys cast for the group will be of the highest triple threat caliber. When the Company is ready to produce Boy Band projects, it expects the costs and scheduling of such to be similar to those incurred for the production of the Girl Group and Crazy for the Boys.

 

 
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Target Market

 

The Girl Group and the Boy Band will be focused on exploiting what is now commonly referred to as the “tween” market, consisting of children between the ages of seven to fourteen years old. This demographic represents a significant opportunity for companies who are successful in penetrating it. Currently there are an estimated thirty-five million tweens in the United States alone. Over the last decade, the tween population has grown at twice the rate of the overall U.S. population. It is estimated that aggregate spending by U.S. tweens was over $41 billion in 2015. Additionally, tweens influence a staggering $270 billion of their parents’ spending. The biggest segments of tween spending are clothes, music, toys and hobbies, video games, and entertainment.

 

The financing required to execute these steps will be approximately $1,000,000 over the next twelve months of operation.

 

Results of Operations

 

The Company principally engaged in content development of media targeted at the “tween” demographic consisting of children between the ages of seven and fourteen. During the year ended September 30, 2015 and for the nine months ended June 30, 2016, we did not generate any revenue.

 

Total operating expenses for the year ended September 30, 2015 as compared to the year ended September 30, 2014, were approximately $54,000 and $23,000, respectively. The $31,000 increase in operating expenses was primarily due to increased legal and consulting fees.

 

Total operating expenses for the nine months ended June 30, 2016 as compared to the nine months ended June 30, 2015, were approximately $2,067,000 and $40,000, respectively. The $2,027,000 increase in operating expenses for the nine months ended June 30, 2016 is comprised largely of a $675,000 increase in compensation to our CEO and the recognition of stock based compensation to our CEO, an increase of $1,329,000 in professional and consulting primarily due to the recognition of stock based consulting fees to consultants and two of our directors and an increase of $23,000 in general and administrative expenses due to an increase in rent and office expenses.

 

Off Balance Sheet Arrangements

 

The Company has not had any off balance sheet arrangements.

 

Item 3. Properties.

 

The Company currently maintains a corporate office at 236 Sarles Street, Mt. Kisco, New York 10549. The Company leases this property from its President, Brian Lukow, for $1,000 a month, which includes telephone, Internet, and electricity utilities. The Company’s subsidiary also leases this space from the Company’s President, under the same terms. The Company feels this space is sufficient until the Company commences full operations.

 

Item 4. Security Ownership of Certain Beneficial Owners and Management.

 

The following table lists, as of October 11, 2016, the number of shares of common stock of our Company that are beneficially owned by (i) each person or entity known to our Company to be the beneficial owner of more than 5% of the outstanding common stock; (ii) each officer and director of our Company; and (iii) all officers and directors as a group. Information relating to beneficial ownership of common stock by our principal shareholders and management is based upon information furnished by each person using beneficial ownership‚ concepts under the rules of the Securities and Exchange Commission. Under these rules, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or direct the voting of the security, or investment power, which includes the power to vote or direct the voting of the security. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Under the Securities and Exchange Commission rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary beneficial interest. Except as noted below, each person has sole voting and investment power.

 

The percentages below are calculated based on 16,489,852 shares of our common stock issued and outstanding as of October 11, 2016. We do not have any outstanding options, or other securities exercisable for or convertible into shares of our common stock. Unless otherwise indicated, the address of each person listed is c/o All for One Media Corp., 236 Sarles Street, Mt. Kisco, New York 10549.

 

 
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Name and Address of Beneficial Owner

 

Title of Class

 

Amount and Nature of Beneficial Ownership (1)

 

 

Percent of Class (2)

 

Brian Lukow (3)

 

Common Stock

 

 

4,116,641

 

 

 

24.96 %

Brian Gold (4)

 

Common Stock

 

 

4,126,880

 

 

 

25.03 %

Aimee Ventura O’Brien (5)

 

Common Stock

 

 

1,426,580

 

 

 

8.65 %

Directors and Officers as a Group

 

 

 

 

9,670,101

 

 

 

58.64 %

Crazy for the Boys, LLC (6)

 

Common Stock

 

 

5,201,500

 

 

 

31.54 %

Michael Strasser (7)

 

Common Stock

 

 

1,000,000

 

 

 

6.06 %

 

____________________

1. The number and percentage of shares beneficially owned is determined under the rules of the SEC and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares as to which the individual has sole or shared voting power or investment power and also any shares, which the individual has the right to acquire within 60 days through the exercise of any stock option or other right. The persons named in the table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to community property laws where applicable and the information contained in the footnotes to this table.
2. Based on 16,489,852 issued and outstanding shares of common stock as of October 11, 2016.
3. Brian Lukow is a director and the Company’s President. Mr. Lukow’s ownership includes his interests in Crazy for the Boys, LLC.
4. Brian Gold is a director of the Company. Mr. Gold’s ownership includes his interests in Crazy for the Boys, LLC.
5. Aimee Ventura O’Brien is a director and the Company’s Secretary.
6. Brian Lukow, the Company’s President and director, is the managing member of Crazy for the Boys, LLC and owns approximately 17% of CFTB. Brian Gold, a director of the Company, owns approximately 20% of CFTB.
7. Michael Strasser is a member of CFTB.

 

Item 5. Directors and Executive Officers.

 

Directors and Executive Officers

 

Set forth below are the names, ages and present principal occupations or employment, and material occupations, positions, offices or employments for the past five years of our current directors and executive officers. Unless otherwise indicated, the address of each person listed is c/o All for One Media Corp., 236 Sarles Street, Mt. Kisco, New York 10549.

 

Name and Business Address

Age

Position

Brian J. Lukow

57

President and Director

Brian Gold

60

Director

Aimee Ventura O’Brien

52

Secretary and Director

 

Brian J. Lukow, 57, President and Director. Brian Lukow has been an officer and director of All For One Media since fall 2015. He has also served as the Co-Managing Member of Crazy For the Boys, LLC since August 2012. Prior to that he worked for Entertainment Brands, Inc. from 2007 to 2012. Mr. Lukow began his professional career on Wall Street. He was a senior vice President of Lehman Brothers from 1984 to 1991 and a managing director of Ladenburg Thalmann from 1992 to 1994. Mr. Lukow was most recently the highly talented co-creator and co-producer of Huckapoo. Prior to that, Mr. Lukow was the co-creator and executive producer of Dream Street, a very successful boy band, and one of the best selling pop music acts in recent years, whose debut album reached number one on the Billboard Magazine Independent charts. The original girl group concept is his creation and is built upon his experience and success with Dream Street and Huckapoo. In addition to his production credits, Mr. Lukow is also an accomplished songwriter. Among Mr. Lukow’s writing credits is the song “Jennifer Goodbye“ which was recorded by Dream Street on its first album; that album went on to sell nearly one million units. Mr. Lukow is a co-writer on five of the original Huckapoo recordings as well. Additionally, Mr. Lukow is the associate producer of the motion picture “The Biggest Fan” starring Chris Trousdale, Cindy Williams, and Pat Morita. From 1994 to 1996 Mr. Lukow was President of Brirock Entertainment, a firm specializing in artist management.

 

 
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Aimee Ventura O’Brien, 60, Secretary and Director. Aimee Ventura O’Brien has a diverse background in business, including experiences on Wall Street and in the world of architecture. On Wall Street, Ms. O’Brien traded complex equity derivatives for Credit Suisse and Fidelity Investment. She eventually decided to return to school to become an architect. Ms. O’Brien holds a bachelor’s degree in mathematics and business from Skidmore College and a bachelor’s of architecture from NY Institute of Technology, where she studied from 2008-2012. Since graduating in 2012, Ms. O’Brien has worked for two large building envelope firms in New York, learning about the complex design of building skins. From September 2012 to February 2016, Ms. O’Brien worked as a Senior Manager at Hoffman Architects in New York City. From February 2016 to July 2016, she worked as the Director of Business Development at Vidaris, Inc. in New York City. Since July 2016, she has been the Director of Business Development for DIRTT Environmental Solutions in New York City. Ms. O’Brien as won awards from the American Institute of Architects, Henry Adams Certificate, Robert Jensen Memorial Award, and the Maria Bentel Memorial Thesis Travel Grant.

  

Brian D. Gold, 52, Director. Brian D. Gold is currently the president and CEO of his family’s business, Sultana Distribution Services, Inc., which is the largest candy re-distributor in the United States, selling to hundreds of wholesalers across the country. Mr. Gold started with the company in 1975, joining Sultana Crackers, Inc., a company started by his father, Bernard, in 1947, that was predominately a specialty cracker supplier and distributor. Brian has long been active in the snack industry and considers himself an original member of the New York City Confectionery Club, who named him their Man of the Year for 1978. Mr. Gold was inducted into the Candy Hall of Fame in 2014.

   

Board Composition

 

Our bylaws provide that the Board of Directors shall consist of one or more members. Each director of the Company serves for a term of one year or until the successor is elected at the Company’s annual shareholders’ meeting and is qualified, subject to removal by the Company’s shareholders. Each officer serves, at the pleasure of the Board of Directors, for a term of one year and until the successor is elected at the annual meeting of the Board of Directors and is qualified.

 

Significant Employees

 

Other than the above-named officers and directors, we have no full-time employees whose services are materially significant to our business and operations.

 

Family Relationships

 

There are no familial relationships among any of our officers or directors. None of our directors or officers is a director in any other reporting companies. The Company is not aware of any proceedings to which any of the Company‚ officers or directors, or any associate of any such officer or director, is a party adverse to the Company or any of the Company‚ subsidiaries or has a material interest adverse to it or any of its subsidiaries.

 

Involvement in Legal Proceedings

 

During the past ten years, none of our present or former directors, executive officers or persons nominated to become directors or executive officers:

 

· have been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offences);
· had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time;
· have been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity;
· have been found by a court of competent jurisdiction in a civil action or by the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;
· have been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or have been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26)), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29)), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

 

 
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Item 6. Executive Compensation.

 

Summary Table.  The following table sets forth information concerning the annual and long-term compensation awarded to, earned by, or paid to the named executive officer for all services rendered in all capacities to our company, or any of its subsidiaries, for the years ended September 30, 2015 and 2014:

 

Compensation Table for Executives

 

Name & Principal Position

 

Year

 

Salary

($)

 

 

Bonus

 

 

Stock

Awards
($)

 

 

Non-Equity
Incentive
Plan
Compensation

 

 

Nonqualified
Deferred
Compensation
Earnings

 

 

All Other
Compensation

 

 

Total

($)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brian Lukow,

 

2015

 

$ 0

 

 

$ 0

 

 

$ 0

 

 

$ 0

 

 

$ 0

 

 

$ 0

 

 

$ 0

 

President

 

2014

 

$ 0

 

 

$ 0

 

 

$ 0

 

 

$ 0

 

 

$ 0

 

 

$ 0

 

 

$ 0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aimee Ventura O’Brien,

 

2015

 

$ 0

 

 

$ 0

 

 

$ 0

 

 

$ 0

 

 

$ 0

 

 

$ 0

 

 

$ 0

 

Secretary

 

2014

 

$ 0

 

 

$ 0

 

 

$ 0

 

 

$ 0

 

 

$ 0

 

 

$ 0

 

 

$ 0

 

 

Employment Agreements

 

The Company has an employment contract with Brian Lukow, its President, which provides for a monthly salary of $5,000 plus 20,000 shares of common stock, issued at a cost basis of $0.25 per share. The employment contract also has customary provisions for other benefits and includes non-competition and non-solicitation clauses. The employment agreement was entered into October 2015, constitutes an “at will” employment arrangement, and may be terminated by either Lukow or the Company upon two months written notice if without cause.

 

The Company has no other formal employment agreements.

 

Compensation of Directors

 

Summary Table.  The following table sets forth information concerning the annual and long-term compensation awarded to, earned by, or paid to the named Directors for all services rendered in all capacities to our company, or any of its subsidiaries, for the year ended September 30, 2015:

 

Compensation Table for Directors

 

Name

 

Fees earned or paid in cash
($)

 

 

Stock awards
($)

 

 

Option awards
($)

 

 

Non-Equity
Incentive
Plan
Compensation
($)

 

 

Change in pension value and nonqualified deferred compensation earnings

 

 

All Other
Compensation
($)

 

 

Total

($)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brian Lukow

 

$ 0

 

 

$ 0

 

 

$ 0

 

 

$ 0

 

 

$ 0

 

 

$ 0

 

 

$ 0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brian Gold

 

$ 0

 

 

$ 0

 

 

$ 0

 

 

$ 0

 

 

$ 0

 

 

$ 0

 

 

$ 0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aimee Ventura O’Brien

 

$ 0

 

 

$ 0

 

 

$ 0

 

 

$ 0

 

 

$ 0

 

 

$ 0

 

 

$ 0

 

 

 
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Item 7. Certain Relationships and Related Transactions, and Director Independence.

 

Related Party Transactions

 

Between October 2015 and January 2016, the Company issued 65,806 shares of its common stock to the CEO of the Company as payment for services rendered pursuant to the CEO’s employment agreement with the Company. The Company valued these common shares at the fair value of $16,452, or $0.25 per common share, based on the sale of common stock in a private placement at $0.25 per common share.

 

Between October 2015 and January 2016, the Company issued an aggregate of 19,740 shares of its common stock to the three directors of the Company as payment for services rendered pursuant to corporate director agreements. The Company valued these common shares at the fair value of $4,935, or $0.25 per common share, based on the sale of common stock in a private placement at $0.25 per common share.

 

In February 2016, the Company issued 20,000 shares of its common stock to the CEO of the Company as payment for services rendered pursuant to his employment agreement. The Company valued these common shares at the fair value of $5,000, or $0.25 per common share, based on the sale of common stock in a private placement at $0.25 per common share.

 

In February 2016, the Company issued an aggregate of 6,000 shares of its common stock to the three directors of the Company as payment for services rendered pursuant to corporate director agreements. The Company valued these common shares at the fair value of $1,500, or $0.25 per common share, based on the sale of common stock in a private placement at $0.25 per common share.

 

Between March 2016 and May 2016, the Company issued 60,000 shares of the Company’s common stock to the CEO of the Company as payment for services rendered pursuant to the Employment agreement. The Company valued these common shares at the fair value ranging from $0.17 to $0.37 per common share or $14,800 based on the quoted trading price on the date of grants.

 

Between March 2016 and May 2016, the Company issued an aggregate of 18,000 shares of the Company’s common stock to the three directors of the Company as payment for services rendered pursuant to corporate director agreements. The Company valued these common shares at the fair value ranging from $0.17 to $0.37 per common share based on the quoted trading price on the date of grants.

 

In April 2016, the Company sold 40,000 shares of the Company’s common stock to a director of the Company for gross proceeds of $4,000. The Company recorded stock based compensation of $10,800, which is equal to the fair value of shares issued in excess of the purchase price of $4,000. The Company has determined that the fair value of the common stock is $0.37 per share, which is based on the quoted trading price on the date of grant.

 

In June 2016, the Company issued 3,000,000 common shares to Brian Lukow, 3,000,000 common shares to Brian Gold, and 1,000,000 common shares to Aimee Ventura O’Brien, at $0.0025 per common share, for proceeds of $10,000 which was paid in and included a settlement of accrued salaries to the CEO of the Company for $7,500. The Company recorded stock based compensation of $1,382,500, which is equal to the fair value of shares issued in excess of the purchase price of $17,500. The Company has determined that the fair value of the common stock is $0.20 per share, which is based on the quoted trading price on the date of grant.

 

In June 2016, the Company issued 1,000,000 common shares to Michael Strasser at $0.0025 per common share, or $2,500. Mr. Strasser is a member of Crazy for the Boys, LLC. The Company recorded stock based compensation of $197,500, which is equal to the fair value of shares issued in excess of the purchase price of $2,500. The Company has determined that the fair value of the common stock is $0.20 per share, which is based on the quoted trading price on the date of grant.

 

In June 2016, the Company issued 20,000 shares of the Company’s common stock to the CEO of the Company as payment for services rendered pursuant to the Employment agreement. The Company valued these common shares at the fair value of $15,000 or $0.25 per common share based on the quoted trading price on the date of grant.

 

In June 2016, the Company issued an aggregate of 6,000 shares of the Company’s common stock to the three directors of the Company as payment for services rendered and to be rendered for future services pursuant to corporate director agreements. The Company valued these common shares at the fair value of $1,500 or $0.25 per common share based on the quoted trading price on the date of grant.

 

Promoters and Certain Control Person

 

During the past five fiscal years, we have not had any promoters at any time.

 

Director Independence

 

Our securities are not listed on a national securities exchange or on any inter-dealer quotation system which has a requirement that a majority of directors be independent. Our board of directors has undertaken a review of the independence of each director by the standards for director independence set forth in the NASDAQ Marketplace Rules. Under these rules, a director is not considered to be independent if he or she also is an executive officer or employee of the corporation. Our board of directors has determined that the Company does not have any independent directors.

 

 
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Item 8. Legal Proceedings.

 

We know of no existing or pending legal proceedings against us, nor are we involved as a plaintiff in any proceeding or pending litigation. There are no proceedings in which any of our directors, officers or any of their respective affiliates, or any beneficial stockholder, is an adverse party or has a material interest adverse to our interest.

 

Item 9. Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters.

 

(a) Market Information.

 

Our common stock was first quoted on an over-the-counter market on September 9, 2009 and is currently listed as an OTC Pink company, trading under the symbol “AFOM.”

 

(b) Holders.

 

As of October 11, 2016, there were 16,489,852 shares of our common stock issued and outstanding, held by 73 stockholders of record. Once this registration statement has been effective for 90 days, then all shares held by shareholders that are not affiliates of the Company will be able to sell their shares, as long as they have been held for longer than six months, according to market conditions and if a market develops.

 

(c) Warrants

 

We have not issued any derivative securities, nor are there any warrants, options or other convertible securities outstanding.

 

(d) Dividends.

 

We have not declared or paid dividends on our common stock since our formation, and we do not anticipate paying dividends in the foreseeable future. Declaration or payment of dividends, if any, in the future, will be at the discretion of our Board of Directors and will depend on our then current financial condition, results of operations, capital requirements and other factors deemed relevant by the Board of Directors. There are no contractual restrictions on our ability to declare or pay dividends.

 

(e) Securities Authorized for Issuance under Equity Compensation Plans.

 

We do not have any compensation plan under which equity securities are authorized for issuance.

 

Item 10. Recent Sales of Unregistered Securities.

 

Common Stock

 

The below listed issuances of unregistered securities were exempt pursuant to Section 4(2) of the Securities Act, as they did not constitute a public offering, nor was there advertising or commissions paid. Furthermore, no underwriters were used in connection with the below issuances. Accordingly, the stock certificates representing these shares were issued with restrictive legends indicating that the shares have not been registered and may not be traded until registered or otherwise exempt. All of the investors are accredited investors as defined under the Securities Act.

 

On October 26, 2015, the Company entered into an Asset Exchange Agreement with CFTB and certain members owning membership interest in CFTB, pursuant to which the Company issued 5,201,500 shares of its common stock to certain of CFTB’s members. As consideration for the shares, the Company acquired certain assets from CFTB, including movie screenplays, master recordings, trademarks, and web domain names.

 

In October 2015, the Company sold an aggregate of 440,000 shares of the Company’s common stock for cash and received net proceeds of $104,075. The Company paid $5,000 legal fees and $925 escrow fees in connection with the sale. The Company used these proceeds to pay certain debts, convertible notes and accrued interest owed by the Company.

 

 
17
Table of Contents

 

In October 2015, the Company sold an aggregate 1,248,500 shares of the Company’s common stock to three unrelated parties with purchase prices ranging from $0.001 to $0.08 per common share or $50,124. The Company recorded stock based compensation of $262,001 which is equal to the fair value of shares issued in excess of the purchase price of $50,124. The Company has determined that the fair value of the common stock is $0.25 per share which is based on the sale of common stock in the recent private placement.

 

In December 2015, the Company sold an aggregate of 140,000 shares of its common stock for total gross proceeds of $30,000 and subscription receivable of $5,000. The Company collected the subscription receivable in January 2016.

 

Between October 2015 and January 2016, the Company issued 65,806 shares of its common stock to the CEO of the Company as payment for services rendered pursuant to the CEO’s employment agreement with the Company. The Company valued these common shares at the fair value of $16,452, or $0.25 per common share, based on the sale of common stock in a private placement at $0.25 per common share.

 

Between October 2015 and January 2016, the Company issued 65,806 shares of its common stock to a consultant as payment for services rendered. The Company valued these common shares at the fair value of $16,452, or $0.25 per common share, based on the sale of common stock in a private placement at $0.25 per common share.

 

Between October 2015 and January 2016, the Company issued an aggregate of 19,740 shares of its common stock to the three directors of the Company as payment for services rendered pursuant to corporate director agreements. The Company valued these common shares at the fair value of $4,935, or $0.25 per common share, based on the sale of common stock in a private placement at $0.25 per common share.

 

In February 2016, the Company issued 20,000 shares of its common stock to the CEO of the Company as payment for services rendered pursuant to his employment agreement. The Company valued these common shares at the fair value of $5,000, or $0.25 per common share, based on the sale of common stock in a private placement at $0.25 per common share.

 

In February 2016, the Company issued 20,000 shares of its common stock to a consultant as payment for services rendered. The Company valued these common shares at the fair value of $5,000, or $0.25 per common share, based on the sale of common stock in a private placement at $0.25 per common share.

 

In February 2016, the Company issued an aggregate of 6,000 shares of its common stock to the three directors of the Company as payment for services rendered pursuant to corporate director agreements. The Company valued these common shares at the fair value of $1,500, or $0.25 per common share, based on the sale of common stock in a private placement at $0.25 per common share.

 

Between March 2016 and May 2016, the Company issued 60,000 shares of the Company’s common stock to the CEO of the Company as payment for services rendered pursuant to the Employment agreement. The Company valued these common shares at the fair value ranging from $0.17 to $0.37 per common share or $14,800 based on the quoted trading price on the date of grants.

 

Between March 2016 and May 2016, the Company issued an aggregate of 18,000 shares of the Company’s common stock to the three directors of the Company as payment for services rendered pursuant to corporate director agreements. The Company valued these common shares at the fair value ranging from $0.17 to $0.37 per common share based on the quoted trading price on the date of grants.

 

In April 2016, the Company sold 40,000 shares of the Company’s common stock to a director of the Company for gross proceeds of $4,000. The Company recorded stock based compensation of $10,800 which is equal to the fair value of shares issued in excess of the purchase price of $4,000. The Company has determined that the fair value of the common stock is $0.37 per share which is based on the quoted trading price on the date of grant.

 

In April 2016, the Company issued 50,000 shares of the Company’s common stock to a consultant as payment for financial advisory services rendered. These shares vested immediately on the date of issuance. The Company valued these common shares at the fair value of $18,500 or $0.37 per common share based on the quoted trading price on the date of grant.

 

In June 2016, the Company sold an aggregate of 7,000,000 shares of its common stock at $0.0025 per common share for proceeds of $10,000 which was paid by two directors of the Company and a settlement of accrued salaries to the CEO of the Company for $7,500. The Company recorded stock based compensation of $1,382,500 which is equal to the fair value of shares issued in excess of the purchase price of $17,500. ASC 718 establishes that share-based payment transactions with employees shall be measured at the fair value of the equity instruments issued. The Company has determined that the fair value of the common stock is $0.20 per share which is based on the quoted trading price on the date of grant.

 

In June 2016, the Company sold 1,000,000 shares of the Company’s common stock to a consultant at $0.0025 per common share or $2,500. The Company recorded stock based compensation of $197,500 which is equal to the fair value of shares issued in excess of the purchase price of $2,500. The Company has determined that the fair value of the common stock is $0.20 per share which is based on the quoted trading price on the date of grant. The Company recorded subscription receivable of $2,500 as of June 30, 2016. The Company collected the subscription receivable on September 20, 2016. The consultant is one of the members of CFTB.

 

 
18
Table of Contents

 

In June 2016, the Company issued 20,000 shares of the Company’s common stock to the CEO of the Company as payment for services rendered pursuant to the Employment agreement. The Company valued these common shares at the fair value of $15,000 or $0.25 per common share based on the quoted trading price on the date of grant.

 

In June 2016, the Company issued an aggregate of 6,000 shares of the Company’s common stock to the three directors of the Company as payment for services rendered and to be rendered for future services pursuant to corporate director agreements. The Company valued these common shares at the fair value of $1,500 or $0.25 per common share based on the quoted trading price on the date of grant.

 

Item 11. Description of Registrant’s Securities to be Registered.

 

The following description of our capital stock is a summary and is qualified in its entirety by the provisions of our Certificate of Incorporation, which has been filed as an exhibit to this registration statement.

 

Our authorized capital stock consists of 55,000,000 shares, of which 50,000,000 are shares of Common Stock, $0.001 par value (“Common Stock”), and 5,000,000 are shares of Preferred Stock, $0.001 par value (“Preferred Stock”).

 

Common Stock

 

This registration statement on Form 10 is to register shares of our common stock. We are authorized to issue 50,000,000 shares of common stock, par value $0.001, of which 16,489,852 shares are issued and outstanding as of October 11, 2016. Each holder of shares of our common stock is entitled to one vote for each share held of record on all matters submitted to the vote of stockholders, including the election of Directors. The holders of shares of common stock have no preemptive, conversion, subscription or cumulative voting rights. There is no provision in our Certificate of Incorporation or By-laws that would delay, defer, or prevent a change in control of our Company.

 

Non-cumulative Voting

 

Holders of shares of our common stock do not have cumulative voting rights, which means that the holders of more than 50% of the outstanding shares, voting for the election of directors, can elect all of the directors to be elected, if they so choose, and, in such event, the holders of the remaining shares will not be able to elect any of our directors.

 

Transfer Agent

 

The Company has retained the services Interwest Transfer Co., Inc. as its transfer agent.

 

Item 12. Indemnification of Directors and Officers.

 

Our officers and directors are indemnified as provided by the Utah Revised Business Corporation Act and our Articles of Incorporation.

 

Under the Utah Revised Business Corporation Act, director immunity from liability to a company or its shareholders for monetary liabilities applies automatically unless it is specifically limited by a company’s Articles of Incorporation. Our Articles of Incorporation do not specifically limit our directors’ immunity. Excepted from that immunity are: (a) a willful failure to deal fairly with the company or its stockholders in connection with a matter in which the director has a material conflict of interest; (b) a violation of criminal law, unless the director had reasonable cause to believe that his or her conduct was lawful or no reasonable cause to believe that his or her conduct was unlawful; (c) a transaction from which the director derived an improper personal profit; and (d) willful misconduct.

 

Our Articles of Incorporation provide that we will indemnify our directors and officers to the fullest extent permitted by Utah law, provided, however, that we may modify the extent of such indemnification by individual contracts with our directors and officers; and, provided, further, that we shall not be required to indemnify any director or officer in connection with any proceeding, or part thereof, initiated by such person unless such indemnification: (a) is expressly required to be made by law, (b) the proceeding was authorized by our board of directors, (c) is provided by us, in our sole discretion, pursuant to the powers vested in us under Utah law or (d) is required to be made pursuant to the bylaws.

 

 
19
Table of Contents

 

Item 13. Financial Statements and Supplementary Data.

  

 

ALL FOR ONE MEDIA CORP.

FINANCIAL STATEMENTS

SEPTEMBER 30, 2015 AND 2014

 

ALL FOR ONE MEDIA CORP.

INDEX

 

Reports of Independent Registered Public Accounting Firms

F-1 - F-2 

Balance Sheets as of September 30, 2015 and 2014

F-3

Statements of Operations for the Years Ended September 30, 2015 and 2014

F-4

 

Statements of Changes in Stockholders’ Deficit for the Years Ended September 30, 2015 and 2014

F-5

 

Statements of Cash Flows for the Years Ended September 30, 2015 and 2014

F-6

 

Notes to Financial Statements

F-7

 

 
20
 

  

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and Stockholders

All For One Media Corp. (formerly Early Equine, Inc.)

Mt. Kisco, New York

 

We have audited the accompanying balance sheet of All For One Media Corp. (formerly Early Equine, Inc.) (the “Company”) as of September 30, 2015 and the related statements of operations, changes in stockholders' deficit, and cash flows for the year ended September 30, 2015. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

 

We conducted our audit in accordance with the 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 financial statements are free of material misstatement. 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 also includes examining, on a test basis, evidence supporting the amounts and disclosures in the 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 audit provides a reasonable basis for our opinion.

 

In our opinion, the accompanying financial statements of the Company present fairly, in all material respects, its financial position as of September 30, 2015, and the results of its operations and its cash flows for the year ended September 30, 2015, in conformity with accounting principles generally accepted in the United States.

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has incurred net losses and had a working capital deficit and negative cash flow from operations, which raises substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

/s/ MaloneBailey, LLP                          

MaloneBailey, LLP

Houston, Texas

October 11, 2016

 

 
F-1
Table of Contents

 

 


Report of Independent Registered Public Accounting Firm

 

The Board of Directors and Shareholders

All For One Media Corp. (formerly Early Equine, Inc.)

 

We have audited the accompanying balance sheet of All For One Media Corp. (formerly Early Equine, Inc.) as of September 30, 2014, and the related statements of operations, stockholders’ deficit, and cash flows for the year ended September 30, 2014. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

 

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company has determined that it 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 purposes of expressing an opinion on the effectiveness of the Company’s internal controls 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 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 audit 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 All For One Media Corp. as of September 30, 2014 and the results of its operations and cash flows for the year ended September 30, 2014, in conformity with accounting principles generally accepted in the United States of America.

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has an accumulated deficit and has minimal assets and operations as of September 30, 2014. These issues raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustment that might result from the outcome of this uncertainty.

 

/s/ Mantyla McReynolds, LLC                                      

Mantyla McReynolds, LLC

Salt Lake City, Utah

December 24, 2014

 

 
F-2
Table of Contents

 

ALL FOR ONE MEDIA CORP.

(FORMERLY EARLY EQUINE, INC.)

BALANCE SHEETS

 

 

 

 

 

 

 

 

 

September 30,

 

 

September 30,

 

 

 

2015

 

 

2014

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash

 

$ 102

 

 

$ 2,573

 

Inventory

 

 

-

 

 

 

2,000

 

Total current assets

 

 

102

 

 

 

4,573

 

TOTAL ASSETS

 

$ 102

 

 

$ 4,573

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$ 17,805

 

 

$ 449

 

Accounts payable and accrued liabilities - related party

 

 

12,273

 

 

 

7,564

 

Accrued interest

 

 

491

 

 

 

-

 

Accrued interest - related party

 

 

13,870

 

 

 

7,798

 

Convertible notes payable - related party

 

 

58,000

 

 

 

58,000

 

Total current liabilities

 

 

102,439

 

 

 

73,811

 

 

 

 

 

 

 

 

 

 

Long-term liabilities:

 

 

 

 

 

 

 

 

Convertible note payable

 

 

11,250

 

 

 

-

 

Convertible note payable - related party

 

 

11,100

 

 

 

-

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES

 

 

124,789

 

 

 

73,811

 

 

 

 

 

 

 

 

 

 

Commitments and Contingencies (see Note 8)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' deficit:

 

 

 

 

 

 

 

 

Preferred stock, $0.001 par value; 5,000,000 shares authorized: none shares issued and outstanding

 

 

-

 

 

 

-

 

Common stock, $0.001, 50,000,000 shares authorized: 998,500 shares issued and ouststanding as of September 30, 2015 and 2014

 

 

999

 

 

 

999

 

Additional paid-in capital

 

 

171,893

 

 

 

165,901

 

Accumulated deficit

 

 

(297,579 )

 

 

(236,138 )

Total Stockholders' deficit

 

 

(124,687 )

 

 

(69,238 )

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT

 

$ 102

 

 

$ 4,573

 

 

See accompanying notes to financial statements.

 

 
F-3
Table of Contents

 

ALL FOR ONE MEDIA CORP.

(FORMERLY EARLY EQUINE, INC.)

STATEMENTS OF OPERATIONS

 

 

 

For the Years Ended

 

 

 

September 30,

 

 

 

2015

 

 

2014

 

 

 

 

 

 

 

 

Net revenues

 

$ -

 

 

$ -

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Impairment loss

 

 

-

 

 

 

8,900

 

General and administrative expense

 

 

54,449

 

 

 

14,468

 

Total operating expense

 

 

54,449

 

 

 

23,368

 

Loss from operations

 

 

(54,449 )

 

 

(23,368 )

 

 

 

 

 

 

 

 

 

Other expense

 

 

 

 

 

 

 

 

Interest expense

 

 

(6,992 )

 

 

(5,475 )

Total other expense

 

 

(6,992 )

 

 

(5,475 )

 

 

 

 

 

 

 

 

 

Loss before provision for income taxes

 

 

(61,441 )

 

 

(28,843 )

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

-

 

 

 

-

 

Net loss

 

$ (61,441 )

 

$ (28,843 )

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE COMMON SHARES

 

 

 

 

 

 

 

 

Basic and Diluted

 

 

998,500

 

 

 

998,500

 

 

 

 

 

 

 

 

 

 

NET LOSS PER COMMON SHARE:

 

 

 

 

 

 

 

 

OUTSTANDING - Basic and Diluted

 

$ (0.06 )

 

$ (0.03 )

 

See accompanying notes to financial statements.

 

 
F-4
Table of Contents

 

ALL FOR ONE MEDIA CORP.

(FORMERLY EARLY EQUINE, INC.)

STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT

FOR THE YEARS ENDED SEPTEMBER 30, 2015 AND 2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred Stock

$0.001 Par Value

 

 

Common Stock

$0.001 Par Value

 

 

Additional

Paid-in

 

 

Accumulated

 

 

Total

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

 Capital

 

 

Deficit

 

 

Deficit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, September 30, 2013

 

 

-

 

 

$ -

 

 

 

998,500

 

 

$ 999

 

 

$ 165,143

 

 

$ (207,295 )

 

$ (41,153 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Imputed interest on accrued liabilities - related party as of September 30, 2014

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

758

 

 

 

-

 

 

 

758

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss for the year ended September 30, 2014

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(28,843 )

 

 

(28,843 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, September 30, 2014

 

 

-

 

 

 

-

 

 

 

998,500

 

 

 

999

 

 

 

165,901

 

 

 

(236,138 )

 

 

(69,238 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Imputed interest on accrued liabilities - related party as of September 30, 2015

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

428

 

 

 

-

 

 

 

428

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital contribution by a former director of the Company

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

5,564

 

 

 

-

 

 

 

5,564

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss for the year ended September 30, 2015

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(61,441 )

 

 

(61,441 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, September 30, 2015

 

 

-

 

 

$ -

 

 

 

998,500

 

 

$ 999

 

 

$ 171,893

 

 

$ (297,579 )

 

$ (124,687 )

 

See accompanying notes to financial statements

 

 
F-5
Table of Contents

 

ALL FOR ONE MEDIA CORP.

(FORMERLY EARLY EQUINE, INC.)

STATEMENTS OF CASH FLOWS

 

 

 

For the Years Ended

 

 

 

September 30,

 

 

 

2015

 

 

2014

 

 

 

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

Net Loss

 

$ (61,441 )

 

$ (28,843 )

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Impairment loss

 

 

-

 

 

 

8,900

 

Imputed interest on accrued liabilities - related party

 

 

428

 

 

 

758

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

 

23,606

 

 

 

(2,446 )

Accounts payable and accrued liabilities - related party

 

 

12,273

 

 

 

-

 

Accrued interest

 

 

491

 

 

 

-

 

Accrued interest - related party

 

 

6,072

 

 

 

4,717

 

NET CASH USED IN OPERATING ACTIVITIES

 

 

(18,571 )

 

 

(16,914 )

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Proceeds from convertible notes payable

 

 

5,000

 

 

 

-

 

Proceeds from convertible notes payable - related party

 

 

11,100

 

 

 

16,000

 

NET CASH PROVIDED BY FINANCING ACTIVITIES

 

 

16,100

 

 

 

16,000

 

 

 

 

 

 

 

 

 

 

NET INCREASE IN CASH AND CASH EQUIVALENTS

 

 

(2,471 )

 

 

(914 )

 

 

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS- beginning of year

 

 

2,573

 

 

 

3,487

 

 

 

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS- end of year

 

$ 102

 

 

$ 2,573

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

 

 

 

 

 

 

 

 

Cash paid for:

 

 

 

 

 

 

 

 

Interest

 

$ -

 

 

$ -

 

Income taxes

 

$ -

 

 

$ -

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital contribution from a former director of the Company

 

$ 5,564

 

 

$ -

 

Imputed interest on accrued liabilities - related party

 

$ 428

 

 

$ 758

 

Convertible note issued for legal fees paid by note holder on behalf of the Company

 

$ 6,250

 

 

$ -

 

 

See accompanying notes to financial statements.

 

 
F-6
Table of Contents

 

ALL FOR ONE MEDIA CORP.

(formerly Early Equine, Inc.)

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2015 AND 2014

 

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

 

All For One Media Corp. (formerly Early Equine, Inc.) (the “Company”) was incorporated in the State of Utah on March 2, 2004. The Company is a media and entertainment company focused on creating, launching and marketing original pop music groups commonly referred to as “Boy Bands and “Girl Groups”. The Company’s former operations were in the business of acquiring, training, and reselling horses with an emphasis in the purchase of thoroughbred weanlings or yearlings that were resold as juveniles.

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of presentation and going concern

 

The financial statements are prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”). As reflected in the accompanying financial statements, the Company has a net loss and net cash used in operations of $61,441 and $18,571, respectively, for the year ended September 30, 2015. Additionally the Company has a working capital deficit and accumulated deficit of $102,337 and $297,579, respectively, at September 30, 2015 and has no revenues. As reflected in the accompanying financial statements, the Company has a net loss and net cash used in operations of $28,843 and $16,914, respectively, for the year ended September 30, 2014. Additionally the Company has a working capital deficit and accumulated deficit of $69,238 and $236,138, respectively, at September 30, 2014 and has no revenues. These circumstances cause substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to further implement its business plan, raise capital, and generate revenues. Currently, management is seeking capital to implement its business plan. Management believes that the actions presently being taken provide the opportunity for the Company to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

Cash

 

The Company considers all highly liquid investments with a maturity of three months or less when acquired to be cash equivalents. The Company did not have cash equivalents at September 30, 2015 and 2014. The Company places its cash with high credit quality financial institutions. The Company’s accounts at these institutions are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. At September 30, 2015 and 2014, the Company had not reached bank balances exceeding the FDIC insurance limit on interest bearing accounts. To reduce its risk associated with the failure of such financial institutions, the Company evaluates at least annually the rating of the financial institutions in which it holds deposits.

 

Use of estimates

 

In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet, and revenues and expenses for the period then ended. Actual results may differ significantly from those estimates. Significant estimates made by management include, but are not limited to the valuation of deferred tax assets.

 

Inventory

 

As of September 30, 2014, the Company owned thoroughbred horses that were available for resale after approximately six months to one year of training. Inventory is stated at the lower of cost or market. Inventory cost is determined by specific identification.

 

 
F-7
Table of Contents

 

ALL FOR ONE MEDIA CORP.

(formerly Early Equine, Inc.)

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2015 AND 2014

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

 

Fair value of financial instruments

 

The Company adopted Accounting Standards Codification (“ASC”) ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company’s financial position or operating results, but did expand certain disclosures. ASC 820 defines fair value as 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. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:

 

 

Level 1:

Observable inputs such as quoted market prices in active markets for identical assets or liabilities

 

Level 2:

Observable market-based inputs or unobservable inputs that are corroborated by market data

 

Level 3:

Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.

 

The Company analyzes all financial instruments with features of both liabilities and equity under the FASB’s accounting standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Depending on the product and the terms of the transaction, the fair value of notes payable and derivative liabilities were modeled using a series of techniques, including closed-form analytic formula, such as the Black-Scholes option-pricing model.

 

The carrying amounts reported in the balance sheets for cash, accounts payable and accrued liabilities, and accrued interest approximate their estimated fair market value based on the short-term maturity of these instruments. The Company did not identify any other assets or liabilities that are required to be presented on the balance sheets at fair value in accordance with the accounting guidance.

 

The Company’s convertible notes payable approximate the fair value of such instruments based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangements at September 30, 2015 and 2014.

 

Basic and diluted net loss per share

 

Basic net loss per share is computed by dividing the net loss by the weighted average number of common shares during the period. Diluted net loss per share is computed using the weighted average number of common shares and potentially dilutive securities outstanding during the period. At September 30, 2015 and 2014, the Company has 378,844 and 263,192 potentially dilutive securities outstanding, respectively, related to the convertible promissory note. Those potentially dilutive common stock equivalents were excluded from the dilutive loss per share calculation as they would be antidilutive due to the net loss.

 

Income taxes

 

The Company accounts for income taxes pursuant to the provision of ASC 740-10, “Accounting for Income Taxes” (“ASC 740-10”), which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized.

 

 
F-8
Table of Contents

 

ALL FOR ONE MEDIA CORP.

(formerly Early Equine, Inc.)

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2015 AND 2014  

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

 

The Company follows the provision of ASC 740-10 related to Accounting for Uncertain Income Tax Positions. When tax returns are filed, there may be uncertainty about the merits of positions taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions.

 

Tax positions that meet the more likely than not recognition threshold are measured at the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefit associated with tax positions taken that exceed the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination.

 

The Company believes its tax positions are all more likely than not to be upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits.

 

The Company has adopted ASC 740-10-25, “Definition of Settlement”, which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion and examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they are filed. The Company currently has no federal or state tax examinations nor has it had any federal or state examinations since its inception. The Company's 2014, 2013, and 2012 tax years may still be subject to federal and state tax examination.

 

Recent Accounting Pronouncements

 

Accounting standards that have been issued or proposed by the FASB that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption.

 

NOTE 3 - INCOME TAXES

 

The Company has incurred aggregate net operating losses of approximately $280,369 for income tax purposes as of September 30, 2015. The net operating loss carries forward for United States income taxes, which may be available to reduce future years’ taxable income. These carry forwards will expire, if not utilized, through 2035. Management believes that the realization of the benefits from these losses appears not more than likely due to the Company’s limited operating history and continuing losses for United States income tax purposes. Accordingly, the Company has provided a 100% valuation allowance on the deferred tax asset to reduce the asset to zero. Management will review this valuation allowance periodically and make adjustments as necessary.

 

 
F-9
Table of Contents

 

ALL FOR ONE MEDIA CORP.

(formerly Early Equine, Inc.)

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2015 AND 2014  

 

NOTE 3 - INCOME TAXES (continued)

 

The items accounting for the difference between income taxes at the effective statutory rate and the provision for income taxes were as follows: 

 

 

 

Year Ended

September 30,
2015

 

 

Year Ended

September 30,
2014

 

Income tax benefit at U.S. statutory rate of 34%

 

$ (20,890 )

 

$ (10,095 )

Income tax benefit - State

 

 

(3,072 )

 

 

(1,154 )

Non-deductible expenses

 

 

167

 

 

 

256

 

Increase in valuation allowance

 

 

23,795

 

 

 

10,993

 

Total provision for income tax

 

$ -

 

 

$ -

 

 

The Company’s approximate net deferred tax asset was as follows:

 

Deferred Tax Asset:

 

September 30,
2015

 

 

September 30,
2014

 

Net operating loss carryforward

 

$ 109,344

 

 

$ 85,549

 

Valuation allowance

 

 

(109,344 )

 

 

(85,549 )

Net deferred tax asset

 

$ -

 

 

$ -

 

 

The net operating loss carryforward was $280,369 at September 30, 2015. The Company provided a valuation allowance equal to the deferred income tax asset for the year ended September 30, 2015 and 2014 because it was not known whether future taxable income will be sufficient to utilize the loss carryforward. The increase in the allowance was $23,795 in fiscal 2015. The potential tax benefit arising from the loss carryforward will expire in 2035.

 

Additionally, the future utilization of the net operating loss carryforward to offset future taxable income may be subject to an annual limitation as a result of ownership changes that could occur in the future. If necessary, the deferred tax assets will be reduced by any carryforward that expires prior to utilization as a result of such limitations, with a corresponding reduction of the valuation allowance. The Company does not have any uncertain tax positions or events leading to uncertainty in a tax position

 

NOTE 4 - IMPAIRMENT OF INVENTORY

 

The Company’s inventory at September 30, 2014, was comprised of one horse. The horse suffered a slab fracture of a front knee. The horse would not be able to race in the future which impairs the resale value of the filly for purposes of pin hooking. Accordingly, the Company recognized an impairment loss of $8,900 during the year ended September 30, 2014. Management was unsuccessful in finding a third party purchaser and on April 24, 2015, the Company released the horse to the Company’s former director and officer, Mr. John Brocklebank, in exchange for settlement of fees owed (see Note 6).

 

 
F-10
Table of Contents

 

ALL FOR ONE MEDIA CORP.

(formerly Early Equine, Inc.)

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2015 AND 2014  

 

NOTE 5 - CONVERTIBLE NOTES PAYABLE

 

Convertible notes payable consisted of the following:

 

 

 

September 30,
2015

 

 

September 30,
2014

 

Convertible notes payable – unrelated party

 

$ 11,250

 

 

$ -

 

Convertible notes payable – related party

 

 

69,100

 

 

 

58,000

 

Less: long-term maturities

 

 

(22,350 )

 

 

(58,000 )

Convertible notes payable, net of long-term maturities

 

$ 58,000

 

 

$ -

 

 

As of September 30, 2015 and 2014, accrued interest related to these convertible notes totaled $14,361 and $7,798, respectively.

 

Convertible note payable – related party

 

Between January 2012 and August 2015, the Company issued 8% convertible promissory notes to Duane S. Jenson, the Company’s former President and director that provided for additional working capital in the total amount of $69,100. The notes were convertible into shares of the Company’s common stock at a conversion price of $0.25 per share at the option of the Company. The principal amount of the note for $20,000 and accrued interest were due on demand. The principal amount of the note for $38,000 and $11,100 were due on June 19, 2016 and February 25, 2018, respectively.

 

Convertible note payable – unrelated party

 

Additionally between February 2015 and June 2015, Clearline Ventures, LLC, an unrelated party, entered into an 8% convertible promissory note to provide additional working capital to the Company in the amount of $11,250 of which $6,250 was paid directly by the note holder for legal fees on behalf of the Company. The principal amount of the note was due on February 25, 2018.

 

Management evaluated these convertible notes in accordance with ASC 815 and determined that there is no embedded derivative associated with the conversion feature of the note on the date of issuance. Management evaluated these convertible note payable in accordance with ASC 470 and determined that there was no beneficial conversion associated with these notes on the date of issuance.

 

In October 2015, the Company fully paid the total principal of $80,350 and accrued interest of $14,672 leaving a zero outstanding balance.

 

NOTE 6 - RELATED PARTY TRANSACTIONS

 

Parties are considered to be related to the Company if the parties directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal stockholders of the Company, its management, members of the immediate families of principal stockholders of the Company and its management and other parties with which the Company may deal where one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions. All transactions shall be recorded at fair value of the goods or services exchanged. Property purchased from a related party is recorded at the cost to the related party and any payment to or on behalf of the related party in excess of the cost is reflected as compensation or distribution to related parties depending on the transaction.

 

The Company had related party accrued liabilities of $7,564 which the Company had recorded imputed interest of $428 and $758 for the years ended September 30, 2015 and 2014, respectively. The imputed interest has been included to additional paid in capital.

 

 
F-11
Table of Contents

 

ALL FOR ONE MEDIA CORP.

(formerly Early Equine, Inc.)

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2015 AND 2014  

 

NOTE 6 - RELATED PARTY TRANSACTIONS (continued)

 

On April 24, 2015, the Company entered into a release agreement with Mr. John Brocklebank, the Company’s former director and officer, whereby it exchanged the impaired horse for release of the then outstanding related party fees owed in the amount of $7,564. The amount of the settlement over the impaired value was $5,564 which has been attributed as capital contribution and recorded to additional paid in capital during the year ended September 30, 2015.

 

The Company had an accounts payable owed to an affiliated company amounting to $12,273 at September 30, 2015. The Company’s former president and director is an officer of the affiliated company. In October 2015, the Company fully paid the total balance of $12,273.

 

NOTE 7 - STOCKHOLDERS’ DEFICIT

 

The authorized capital of the Company consists of 50,000,000 shares of common stock, par value $0.001 per share and 5,000,000 shares of preferred stock, par value $0.001 per share. As of September 30, 2015 and 2014, the Company had 998,500 shares of common stock issued and outstanding.

 

NOTE 8 - COMMITMENTS AND CONTINGENCIES

 

Litigation

 

From time to time, the Company is involved in litigation matters relating to claims arising from the ordinary course of business. While the results of such claims and legal actions cannot be predicted with certainty, the Company’s management does not believe that there are claims or actions, pending or threatened against the Company, the ultimate disposition of which would have a material adverse effect on the Company’s business, results of operations, financial condition or cash flows.

 

NOTE 9 - SUBSEQUENT EVENTS

 

The Company evaluates events that have occurred after the balance sheet date through October 11, 2016. Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the accompanying financial statements other than those set forth below.

 

Convertible Notes Payable

 

In October 2015, the Company fully paid the remaining balance of the principal convertible notes of $80,350 and accrued interest of $14,672 leaving a zero outstanding balance (see Note 5).

 

On June 27, 2016, the Company issued a 10% convertible promissory note for principal borrowings of up to $80,000. The 10% convertible promissory note and all accrued interest are due on June 21, 2018. The Company received initial proceed of $30,000 in June 2016. The note is unsecured and bears interest at the rate of 10% per annum from the issuance date thereof until the note is paid. The note holder shall have the right to convert beginning on the date which is 180 days following the issuance date the outstanding principal amount and accrued but unpaid interest into the Company’s common stock at a conversion price equal to a price which is 50% of the volume weighted average price of the Company’s common stock during the 20 trading days immediately preceding the conversion date. During the first 180 days following the date of the note the Company has the right to prepay the principal and accrued but unpaid interest due under the note, together with any other amounts that the Company may owe the holder under the terms of the note, at a premium of 150%. After this initial 180 day period, the Company does not have a right to prepay the note. The conversion price, however, is subject to full ratchet anti-dilution in the event that the Company issues any securities at a per share price lower than the conversion price then in effect.

 

 
F-12
Table of Contents

 

ALL FOR ONE MEDIA CORP.

(formerly Early Equine, Inc.)

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2015 AND 2014  

 

NOTE 9 - SUBSEQUENT EVENTS (continued)

 

In July 2016, the Company received the remaining proceeds from this convertible note in an aggregate amount of $45,000 and the Company paid original issuance cost of $5,000 in connection with this note payable which is being amortized over the term of the note.

 

The Company evaluated whether or not the convertible promissory note contain embedded conversion features, which meet the definition of derivatives under ASC 815 and related interpretations. The Company determined that the terms of the notes discussed above include a down-round provision under which the conversion price could be affected by future equity offerings undertaken by the Company which cause the embedded conversion options to be accounted for as derivative liabilities. In accordance with ASC 815, the Company shall bifurcate the conversion feature of the convertible notes and record derivative liabilities on their issuance date and adjusted to fair value through earnings at each reporting date. The Company uses the Black-Scholes option pricing model to value the derivative liabilities.

 

Asset Exchange Agreement

 

On October 26, 2015, the Company entered into an Asset Exchange Agreement (the “Asset Exchange”) with Crazy For The Boys, LLC (“CFTB”), a privately held company, and certain members owning membership interest in CFTB whereby the Company acquired certain assets from CFTB in exchange for 5,201,500 shares of the Company’s common stock. The assets that were acquired included a movie screenplay, master recordings, trademarks, and web domain names (the “CFTB Assets”).

 

Consequently, the issuance of 5,201,500 shares of the Company’s common stock to CFTB accounted for approximately 66% of the total issued and outstanding stock of the Company as of October 26, 2015 and the Company became a majority owned subsidiary of CFTB. Upon the closing of the Asset Exchange, the Company’s director resigned and a new board of directors and new officers were appointed which consists of Brian Lukow, Brian Gold and Aimee O’Brien. Following the closing, Mr. Lukow was also appointed as Chief Executive Officer and President of the Company. Mr. Lukow and Mr. Gold (the “CFTB Members”) own approximately 17% and 20% membership interest in CFTB, respectively. Accordingly, the CFTB Members are considered to be founders and promoters of CFTB.

 

The Company accounted for the acquisition of the CFTB Assets pursuant to the Asset Exchange under ASC 845-10-S99 “Transfer of Nonmonetary Assets by Promoters or Shareholders” whereby the transfer of nonmonetary assets to a company by its promoters or shareholders in exchange for stock prior to or at the time of the company's initial public offering normally should be recorded at the transferors' historical cost basis determined under US GAAP. The Company recorded the acquired CFTB assets at historical cost basis of the nonmonetary assets transferred which amounted to $0. Consequently, the Company valued the issuance of 5,201,500 shares of common stock in connection with the Asset Exchange at par value and a corresponding decrease in additional paid in capital.

 

Additionally, the Company evaluated this acquisition transaction in accordance with ASC 805 and determined that the CFTB Assets do not constitute a business. The assets acquired have no processes and no outputs but rather comprised of certain assets consisting of a movie screenplay, master recordings, trademarks, and web domain names.

 

Employment agreement

 

In October 2015, the Company entered into an Employment Agreement (the “Employment Agreement”) with Mr. Brian Lukow, the CEO of the Company. As compensation for his services per the terms of the Employment Agreement, the Company shall pay $5,000 per month and 20,000 shares of the Company’s common stock calculated at $0.25 per share. The Employment Agreement may be terminated by either party upon two months written notice.

 

 
F-13
Table of Contents

 

ALL FOR ONE MEDIA CORP.

(formerly Early Equine, Inc.)

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2015 AND 2014  

 

NOTE 9 - SUBSEQUENT EVENTS (continued)

 

Corporate director agreements

 

In October 2015, the Company entered into three corporate director agreements with Mr. Brian Lukow, Mr. Brian Gold and Ms. Aimee O’Brien to serve as members of the Company’s board of directors. The term of the agreements shall continue until September 30, 2016 unless earlier terminated by the Company. As compensation for their services per the terms of their respective corporate director agreements, the Company pays fees to i) Mr. Lukow of 2,000 shares of the Company’s common stock per month calculated at $0.25 per share ii) Ms. O’Brien of 2,000 shares of the Company’s common stock per month calculated at $0.25 per share and iii) Mr. Gold of 2,000 shares of the Company’s common stock per month during the month of service. Pursuant to the agreement, the director who will introduce and arrange for equity funding and acquisitions shall be entitled with a 10% commission fee as defined in the agreement.

 

Consulting agreement

 

On January 5, 2016, the Company entered into a two month consulting agreement with a consultant company to provide business advisory services. Pursuant to the consulting agreement, the Company paid a total of $5,000 during the term of the agreement. One of the members of CFTB is an affiliate of this consulting company.

 

On March 29, 2016, the Company entered into a six-month consulting agreement with a consultant who has agreed to provide strategic planning and business development consulting services to the Company. The term of the agreement commenced on June 1, 2016. In August 2016, the Company entered into an amendment agreement with such consultant to amend the compensation terms whereby both parties agree that the consultant, in exchange for his services will be issued 1,000,000 shares of the Company’s common stock upon effectiveness of the Company’s registration statement and another 1,000,000 shares to be issued upon the effectiveness of another registration statement as defined in the consulting agreement. An additional 2,000,000 share of the Company’s common stock will be issued if the Company renews and extends the term of this agreement.

 

Operating Lease

 

In December 2015, the Company executed a month-to-month operating lease agreement located in Boca Raton, Florida. The lease is for a period of 12 months commencing in December 2015 and expiring in December 2016. The lease requires the Company to pay a monthly rent of $1,000. The Company terminated these month-to-month lease agreement for the Boca Raton office in February 2016.

 

In December 2015, the Company through its wholly owned subsidiary, Tween Entertainment, executed a month-to-month operating lease agreement with the CEO of the Company. The leased premises is located in Mt. Kisco, New York and the initial term is for a period of 12 months commencing in December 2015 and expiring in December 2016. The lease requires the Company to pay a monthly rent of $1,000.

 

Related Party Loans

 

During April 2016, the CEO and a director of the Company loaned $201 and $2,500, respectively, to the Company for working capital purposes. This loan is non-interest bearing and is due on demand.

 

Issuance of Common Stock

 

In October 2015, the Company sold an aggregate of 440,000 shares of the Company’s common stock for cash and received net proceeds of $104,075. The Company paid $5,000 legal fees and $925 escrow fees in connection with the sale. The Company used these proceeds to pay certain debts, convertible notes and accrued interest owed by the Company.

 

 
F-14
Table of Contents

 

ALL FOR ONE MEDIA CORP.

(formerly Early Equine, Inc.)

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2015 AND 2014  

 

NOTE 9 - SUBSEQUENT EVENTS (continued)

 

In October 2015, the Company sold an aggregate 1,248,500 shares of the Company’s common stock to three unrelated parties with purchase prices ranging from $0.001 to $0.08 per common share or $50,124. The Company recorded stock based compensation of $262,001 which is equal to the fair value of shares issued in excess of the purchase price of $50,124. The Company has determined that the fair value of the common stock is $0.25 per share which is based on the sale of common stock in the recent private placement.

 

The common stock sold in October 2015 are subject to a Lock-up/Leak-out Agreement whereby the buying stockholders are restricted from selling the purchased common stock for a period of ninety days from the date the Company close on the Asset Exchange Agreement with CFTB (the “Lock-Up Period”) and a six month Leak-Out Period under which only 1/6 th of the holdings of the purchaser can be sold on the six consecutive months following the Lock-Up Period, on a non-cumulative basis. Additionally, in October 2015, certain existing stockholders of the Company who previously held an aggregate of 358,878 shares of common stock also entered into the Lock-Up/Leak-Out Agreement.

 

In December 2015, the Company sold an aggregate of 140,000 shares of the Company’s common stock for gross proceeds of $30,000 and subscription receivable of $5,000. The Company collected the subscription receivable of $5,000 in January 2016. The Company used these proceeds for working capital purposes.

 

Between October 2015 and January 2016, the Company issued 65,806 shares of the Company’s common stock to the CEO of the Company as payment for services rendered pursuant to the Employment agreement (see Note 8). The Company valued these common shares at the fair value of $16,452 or $0.25 per common share based on the sale of common stock in a private placement at $0.25 per common share.

 

Between October 2015 and January 2016, the Company issued 65,806 shares of the Company’s common stock to a consultant as payment for services rendered. The Company valued these common shares at the fair value of $16,452 or $0.25 per common share based on the sale of common stock in a private placement at $0.25 per common share.

 

Between October 2015 and January 2016, the Company issued an aggregate of 19,740 shares of the Company’s common stock to the three directors of the Company as payment for services rendered pursuant to corporate director agreements (see Note 8). The Company valued these common shares at the fair value of $4,935 or $0.25 per common share based on the sale of common stock in a private placement at $0.25 per common share.

 

In February 2016, the Company issued 20,000 shares of the Company’s common stock to the CEO of the Company as payment for services rendered pursuant to the Employment agreement (see Note 8). The Company valued these common shares at the fair value of $5,000 or $0.25 per common share based on the sale of common stock in a private placement at $0.25 per common share.

 

In February 2016, the Company issued 20,000 shares of the Company’s common stock to a consultant as payment for services rendered. The Company valued these common shares at the fair value of $5,000 or $0.25 per common share based on the sale of common stock in a private placement at $0.25 per common share.

 

In February 2016, the Company issued an aggregate of 6,000 shares of the Company’s common stock to the three directors of the Company as payment for services rendered pursuant to corporate director agreements (see Note 8). The Company valued these common shares at the fair value of $1,500 or $0.25 per common share based on the sale of common stock in a private placement at $0.25 per common share.

 

Between March 2016 and May 2016, the Company issued 60,000 shares of the Company’s common stock to the CEO of the Company as payment for services rendered pursuant to the Employment agreement. The Company valued these common shares at the fair value ranging from $0.17 to $0.37 per common share or $14,800 based on the quoted trading price on the date of grants.

 

 
F-15
Table of Contents

 

ALL FOR ONE MEDIA CORP.

(formerly Early Equine, Inc.)

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2015 AND 2014  

 

NOTE 9 - SUBSEQUENT EVENTS (continued)

 

Between March 2016 and May 2016, the Company issued an aggregate of 18,000 shares of the Company’s common stock to the three directors of the Company as payment for services rendered pursuant to corporate director agreements. The Company valued these common shares at the fair value ranging from $0.17 to $0.37 per common share based on the quoted trading price on the date of grants.

 

In April 2016, the Company issued 50,000 shares of the Company’s common stock to a consultant as payment for financial advisory services rendered. These shares vested immediately on the date of issuance. The Company valued these common shares at the fair value of $18,500 or $0.37 per common share based on the quoted trading price on the date of grant.

 

In April 2016, the Company sold 40,000 shares of the Company’s common stock to a director of the Company for gross proceeds of $4,000. The Company recorded stock based compensation of $10,800 which is equal to the fair value of shares issued in excess of the purchase price of $4,000. The Company has determined that the fair value of the common stock is $0.37 per share which is based on the quoted trading price on the date of grant.

 

In June 2016, the Company sold an aggregate of 7,000,000 shares of its common stock at $0.0025 per common share for proceeds of $10,000 which was paid by 2 directors of the Company and a settlement of accrued salaries to the CEO of the Company for $7,500. The Company recorded stock based compensation of $1,382,500 which is equal to the fair value of shares issued in excess of the purchase price of $17,500. ASC 718 establishes that share-based payment transactions with employees shall be measured at the fair value of the equity instruments issued. The Company has determined that the fair value of the common stock is $0.20 per share which is based on the quoted trading price on the date of grant.

 

In June 2016, the Company sold 1,000,000 shares of the Company’s common stock to a consultant at $0.0025 per common share or $2,500. The Company recorded stock based compensation of $197,500 which is equal to the fair value of shares issued in excess of the purchase price of $2,500. The Company has determined that the fair value of the common stock is $0.20 per share which is based on the quoted trading price on the date of grant. The Company recorded subscription receivable of $2,500 as of June 30, 2016. The Company collected the subscription receivable on September 20, 2016. The consultant is one of the members of CFTB.

 

In June 2016, the Company issued 20,000 shares of the Company’s common stock to the CEO of the Company as payment for services rendered pursuant to the Employment agreement. The Company valued these common shares at the fair value of $15,000 or $0.25 per common share based on the quoted trading price on the date of grant.

 

In June 2016, the Company issued an aggregate of 6,000 shares of the Company’s common stock to the three directors of the Company as payment for services rendered and to be rendered for future services pursuant to corporate director agreements. The Company valued these common shares at the fair value of $1,500 or $0.25 per common share based on the quoted trading price on the date of grant.

 

Between July 2016 and August 2016, the Company issued 40,000 shares of the Company’s common stock to the CEO of the Company as payment for services rendered pursuant to the Employment agreement (see Note 8). The Company shall value these shares based on the quoted trading price on the date of grants.

 

In July 2016, the Company issued an aggregate of 30,000 shares of the Company’s common stock to the three directors of the Company as payment for services rendered and to be rendered for future services pursuant to corporate director agreements (see Note 8). The Company shall value these shares based on the quoted trading price on the date of grants.

 

 
F-16
 

 

 

ALL FOR ONE MEDIA CORP. AND SUBSIDIARY

CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016

UNAUDITED

 

ALL FOR ONE MEDIA CORP. AND SUBSIDIARY

INDEX

 

Consolidated Balance Sheets at June 30, 2016 and September 30, 2015 (Unaudited)

F-18

Consolidated Statements of Operations for the three and nine months ended June 30, 2016 and 2015 (Unaudited)

F-19

Consolidated Statements of Cash Flows for the nine months ended June 30, 2016 and 2015 (Unaudited)

F-20

Notes to Unaudited Consolidated Financial Statements

F-21

 

 
F-17
 

 

ALL FOR ONE MEDIA CORP. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

 

September 30,

 

 

 

 

2016

 

 

2015

 

 

 

 

(Unaudited)

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash

 

 

$ 30,694

 

 

$ 102

 

Subscription receivable

 

 

 

2,500

 

 

 

-

 

Prepaid expense

 

 

 

1,500

 

 

 

-

 

Total current assets

 

 

 

34,694

 

 

 

102

 

TOTAL ASSETS

 

 

$ 34,694

 

 

$ 102

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

Accounts payable and accrued liaiblities

 

 

$ 34,471

 

 

$ 17,805

 

Accounts payable and accrued liaiblities - related party

 

 

 

-

 

 

 

12,273

 

Accrued interest

 

 

 

-

 

 

 

491

 

Convertible notes payable - related party

 

 

 

-

 

 

 

58,000

 

Accrued interest - related party

 

 

 

-

 

 

 

13,870

 

Due to related parties

 

 

 

2,701

 

 

 

-

 

Derivative liabilities

 

 

 

64,015

 

 

 

-

 

Total current liabilities

 

 

 

101,187

 

 

 

102,439

 

 

 

 

 

 

 

 

 

 

 

Long-term liabilities:

 

 

 

 

 

 

 

 

 

Convertible note payable including accrued interest, net of debt discount

 

 

 

108

 

 

 

11,250

 

Convertible note payable - related party

 

 

 

-

 

 

 

11,100

 

Total liabilities

 

 

 

101,295

 

 

 

124,789

 

 

 

 

 

 

 

 

 

 

 

Commitments and Contingencies (see Note 8)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' deficit:

 

 

 

 

 

 

 

 

 

Preferred stock, $0.001 par value; 5,000,000 shares authorized: none shares issued and outstanding

 

 

 

-

 

 

 

-

 

Common stock, $0.001, 50,000,000 shares authorized: 16,419,852 shares and 998,500 shares issued and ouststanding as of June 30, 2016 and September 30, 2015, respectively

 

 

 

16,420

 

 

 

999

 

Additional paid-in capital

 

 

 

2,316,051

 

 

 

171,893

 

Accumulated deficit

 

 

 

(2,399,072 )

 

 

(297,579 )

Total Stockholders' deficit

 

 

 

(66,601 )

 

 

(124,687 )

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

$ 34,694

 

 

$ 102

 

 

See accompanying notes to unaudited consolidated financial statements.

 

 
F-18
Table of Contents

 

ALL FOR ONE MEDIA CORP. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

June 30,

 

 

For the Nine Months Ended

June 30,

 

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenues

 

 

$ -

 

 

$ -

 

 

$ -

 

 

$ -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation expense

 

 

 

619,900

 

 

 

-

 

 

 

675,203

 

 

 

-

 

Professional and consulting expense

 

 

 

1,028,528

 

 

 

24,978

 

 

 

1,361,353

 

 

 

32,333

 

General and administrative expense

 

 

 

8,902

 

 

 

166

 

 

 

30,504

 

 

 

7,484

 

Total operating expense

 

 

 

1,657,330

 

 

 

25,144

 

 

 

2,067,060

 

 

 

39,817

 

Loss from operations

 

 

 

(1,657,330 )

 

 

(25,144 )

 

 

(2,067,060 )

 

 

(39,817 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative expense

 

 

 

(37,417 )

 

 

-

 

 

 

(37,417 )

 

 

-

 

Change in fair value of derivative liabilities

 

 

 

3,402

 

 

 

-

 

 

 

3,402

 

 

 

-

 

Interest expense

 

 

 

(107 )

 

 

(1,867 )

 

 

(418 )

 

 

(5,021 )

Total other income (expense)

 

 

 

(34,122 )

 

 

(1,867 )

 

 

(34,433 )

 

 

(5,021 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before provision for income taxes

 

 

 

(1,691,452 )

 

 

(27,011 )

 

 

(2,101,493 )

 

 

(44,838 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Net loss

 

 

$ (1,691,452 )

 

$ (27,011 )

 

$ (2,101,493 )

 

$ (44,838 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE COMMON SHARES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted

 

 

 

10,906,863

 

 

 

998,500

 

 

 

8,347,057

 

 

 

998,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS PER COMMON SHARE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OUTSTANDING - Basic and Diluted

 

 

$ (0.16 )

 

$ (0.03 )

 

$ (0.25 )

 

$ (0.04 )

 

See accompanying notes to unaudited consolidated financial statements.

 

 
F-19
Table of Contents

 

ALL FOR ONE MEDIA CORP. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended

June 30,

 

 

 

 

2016

 

 

2015

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

Net Loss

 

 

$ (2,101,493 )

 

$ (44,838 )

Adjustments to reconcile net loss to net cash from operating activities:

 

 

 

 

 

 

 

 

 

Amortization of debt discount

 

 

 

83

 

 

 

-

 

Stock-based compensation

 

 

 

1,953,879

 

 

 

-

 

Derivative expense

 

 

 

37,417

 

 

 

-

 

Imputed interest on accrued liabilities - related party

 

 

 

-

 

 

 

428

 

Change in fair value of derivative liabilities

 

 

 

(3,402 )

 

 

-

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

 

Prepaid expenses

 

 

 

(1,500 )

 

 

-

 

Accounts payable and accrued liabilities

 

 

 

16,666

 

 

 

15,356

 

Accounts payable and accrued liabilities - related parties

 

 

 

(12,273 )

 

 

-

 

Accrued interest

 

 

 

(466 )

 

 

-

 

Accrued interest - related party

 

 

 

(13,870 )

 

 

4,593

 

NET CASH USED IN OPERATING ACTIVITIES

 

 

 

(124,959 )

 

 

(24,461 )

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

 

Advances from related party

 

 

 

2,701

 

 

 

-

 

Payments on convertible notes

 

 

 

(80,350 )

 

 

-

 

Proceeds from notes payable

 

 

 

30,000

 

 

 

-

 

Proceeds from notes payable - related party

 

 

 

-

 

 

 

22,250

 

Proceeds from sale of common stock, net of issuance costs

 

 

 

203,200

 

 

 

-

 

NET CASH PROVIDED BY FINANCING ACTIVITIES

 

 

 

155,551

 

 

 

22,250

 

 

 

 

 

 

 

 

 

 

 

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

 

 

 

30,592

 

 

 

(2,211 )

 

 

 

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS- beginning of period

 

 

 

102

 

 

 

2,573

 

 

 

 

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS- end of period

 

 

$ 30,694

 

 

$ 362

 

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

 

 

 

 

 

 

 

 

 

Cash paid for:

 

 

 

 

 

 

 

 

 

Interest

 

 

$ 14,672

 

 

$ -

 

Income taxes

 

 

$ -

 

 

$ -

 

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

 

Subscription receivable

 

 

$ 2,500

 

 

$ -

 

Debt discount due to derivative liabiltiy

 

 

$ 30,000

 

 

$ -

 

Issuance of common stock in connection with asset exchange agreement

 

 

$ 5,201

 

 

$ -

 

 

See accompanying notes to unaudited consolidated financial statements.

 

 
F-20
Table of Contents

 

ALL FOR ONE MEDIA CORP. AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016 AND 2015


NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

 

All For One Media Corp. (formerly Early Equine, Inc.) (the “Company”) was incorporated in the State of Utah on March 2, 2004. The Company is a media and entertainment company focused on creating, launching and marketing original pop music groups commonly referred to as “Boy Bands and “Girl Groups”. The Company’s former operations were in the business of acquiring, training, and reselling horses with an emphasis in the purchase of thoroughbred weanlings or yearlings that were resold as juveniles.

 

On October 26, 2015, the Company entered into an Asset Exchange Agreement (the “Asset Exchange”) with Crazy For The Boys, LLC (“CFTB”), a privately held company, and certain members owning membership interest in CFTB whereby the Company acquired certain assets from CFTB in exchange for 5,201,500 shares of the Company’s common stock. The assets that were acquired included a movie screenplay, master recordings, trademarks, and web domain names (the “CFTB Assets”).

 

Consequently, the issuance of 5,201,500 shares of the Company’s common stock to CFTB accounted for approximately 66% of the total issued and outstanding stock of the Company as of October 26, 2015 and the Company became a majority owned subsidiary of CFTB. Upon the closing of the Asset Exchange, the Company’s director resigned and a new board of directors and new officers were appointed which consists of Brian Lukow, Brian Gold and Aimee O’Brien. Following the closing, Mr. Lukow was also appointed as Chief Executive Officer and President of the Company. Mr. Lukow and Mr. Gold (the “CFTB Members”) own approximately 17% and 20% membership interest in CFTB, respectively. Accordingly, the CFTB Members are considered to be founders and promoters of CFTB.

 

The Company accounted for the acquisition of the CFTB Assets pursuant to the Asset Exchange under Accounting Standards Codification (“ASC”) 845-10-S99 “Transfer of Nonmonetary Assets by Promoters or Shareholders” whereby the transfer of nonmonetary assets to a company by its promoters or shareholders in exchange for stock prior to or at the time of the company's initial public offering normally should be recorded at the transferors' historical cost basis determined under US GAAP. The Company recorded the acquired CFTB assets at historical cost basis of the nonmonetary assets transferred which amounted to $0. Consequently, the Company valued the issuance of 5,201,500 shares of common stock in connection with the Asset Exchange at par value and a corresponding decrease in additional paid in capital. Additionally, the Company evaluated this acquisition transaction in accordance with ASC 805 and determined that the CFTB Assets do not constitute a business. The assets acquired have no processes and no outputs but rather comprised of certain assets consisting of a movie screenplay, master recordings, trademarks, and web domain names.

 

On December 15, 2015 the Company organized a new wholly owned subsidiary in the state of Florida, Tween Entertainment Brands, Inc. (“Tween Entertainment”). To date, Tween Entertainment has minimal operating activities and the Company plans to discontinue this subsidiary.

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of presentation and principles of consolidation

 

The accompanying interim unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information, which includes consolidated financial statements and present the consolidated financial statements of the Company and its wholly-owned subsidiary as of June 30, 2016. All intercompany transactions and balances have been eliminated. Accordingly, the unaudited consolidated financial statements do not include all the information and notes necessary for a comprehensive presentation of financial position and results of operations and should be read in conjunction with the Annual Report for the year ended September 30, 2015. It is management's opinion that all material adjustments (consisting of normal recurring adjustments) have been made, which are necessary for a fair financial statement presentation. Significant intercompany accounts and transactions have been eliminated in consolidation. The results for the interim period are not necessarily indicative of the results to be expected for the year ending September 30, 2016.

 

 
F-21
Table of Contents

 

ALL FOR ONE MEDIA CORP. AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016 AND 2015

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

 

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, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Cash

 

The Company considers all highly liquid investments with a maturity of three months or less when acquired to be cash equivalents. The Company did not have cash equivalents at June 30, 2016. The Company places its cash with high credit quality financial institutions. The Company’s accounts at these institutions are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. At June 30, 2016, the Company had not reached bank balances exceeding the FDIC insurance limit on interest bearing accounts. To reduce its risk associated with the failure of such financial institutions, the Company evaluates at least annually the rating of the financial institutions in which it holds deposits.

 

Use of estimates

 

In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated balance sheet, and revenues and expenses for the period then ended. Actual results may differ significantly from those estimates. Significant estimates made by management include, but are not limited to asset valuations and the fair value of common stock issued, valuation of debt discount, the valuation of derivative liabilities and the valuation of stock-based compensation.

 

Fair value of financial instruments

 

The Company adopted ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company’s financial position or operating results, but did expand certain disclosures.

 

ASC 820 defines fair value as 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. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:

 

 

Level 1:

Observable inputs such as quoted market prices in active markets for identical assets or liabilities

 

Level 2:

Observable market-based inputs or unobservable inputs that are corroborated by market data

 

Level 3:

Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.

 

The Company analyzes all financial instruments with features of both liabilities and equity under the FASB’s accounting standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Depending on the product and the terms of the transaction, the fair value of notes payable and derivative liabilities were modeled using a series of techniques, including closed-form analytic formula, such as the Black-Scholes option-pricing model.

 

 
F-22
Table of Contents

 

ALL FOR ONE MEDIA CORP. AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016 AND 2015

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

 

The carrying amounts reported in the consolidated balance sheets for cash, prepaid expense, accounts payable and accrued expenses approximate their estimated fair market value based on the short-term maturity of these instruments. The Company did not identify any other assets or liabilities that are required to be presented on the consolidated balance sheets at fair value in accordance with the accounting guidance.

 

The Company’s convertible notes payable approximate the fair value of such instruments based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangements at June 30, 2016 and 2015.

 

Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis

 

Level 3 Financial Liabilities - Derivative Liability on Conversion Feature

 

The Company uses Level 3 of the fair value hierarchy to measure the fair value of the derivative liabilities and revalues its derivative liability on the conversion feature at every reporting period and recognizes gains or losses in the statements of operations that are attributable to the change in the fair value of the derivative liabilities.

 

The following table presents the derivative financial instruments, measured and recorded at fair value on the Company’s unaudited condensed balance sheets on a recurring basis, and their level within the fair value hierarchy as of June 30, 2016:

 

 

 

Amount

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

Derivative liability - Embedded conversion 

 

$ 64,015

 

 

$ -

 

 

$ -

 

 

$ 64,015

 

 

Basic and diluted net loss per share

 

Basic net loss per share is computed by dividing the net loss by the weighted average number of common shares during the period. Diluted net loss per share is computed using the weighted average number of common shares and potentially dilutive securities outstanding during the period. At June 30, 2016 and 2015, the Company has 285,707 and 321,000 potentially dilutive securities outstanding, respectively, related to the convertible promissory note. Those potentially dilutive common stock equivalents were excluded from the dilutive loss per share calculation as they would be antidilutive due to the net loss.

 

Income taxes

 

The Company accounts for income taxes pursuant to the provision of ASC 740-10, “Accounting for Income Taxes” (“ASC 740-10”), which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized.

 

The Company follows the provision of ASC 740-10 related to Accounting for Uncertain Income Tax Positions. When tax returns are filed, there may be uncertainty about the merits of positions taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions.

 

 
F-23
Table of Contents

 

ALL FOR ONE MEDIA CORP. AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016 AND 2015

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

 

Tax positions that meet the more likely than not recognition threshold are measured at the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefit associated with tax positions taken that exceed the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all more likely than not to be upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits.

 

The Company has adopted ASC 740-10-25, “Definition of Settlement”, which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion and examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they are filed. The Company currently has no federal or state tax examinations nor has it had any federal or state examinations since its inception. The Company's 2015, 2014, and 2013 tax years may still be subject to federal and state tax examination.

 

Stock-based compensation

 

Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award.

 

Pursuant to ASC Topic 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company initially records compensation expense based on the fair value of the award at the reporting date.

 

Recent Accounting Pronouncements

 

Accounting standards that have been issued or proposed by the FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption.

 

NOTE 3 - GOING CONCERN

 

As reflected in the accompanying unaudited consolidated financial statements, the Company had a net loss and net cash used in operations of approximately $2,101,000 and $125,000, respectively, for the nine months ended June 30, 2016. Additionally the Company had an accumulated deficit of approximately $2,400,000 and working capital deficit of approximately $66,000 at June 30, 2016. These circumstances cause substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. The Company’s ability to raise additional capital through the future issuances of common stock is unknown. The obtainment of additional financing, the successful development of the Company’s contemplated plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations.

 

 
F-24
Table of Contents

 

ALL FOR ONE MEDIA CORP. AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016 AND 2015

 

NOTE 3 - GOING CONCERN (continued)

 

Uncertainty regarding these matters, raises substantial doubt about the Company’s ability to continue as a going concern. The unaudited consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. While the Company believes in the viability of its strategy to generate revenues, there can be no assurances to that effect.

 

NOTE 4 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES

 

Accounts payable and accrued expenses consist of the following:

 

 

 

June 30,
2016

(Unaudited)

 

 

 

 

 

Accounts payable

 

$ 11,520

 

Accrued salaries

 

 

20,251

 

Accrued rent

 

 

2,700

 

Total

 

$

34,471

 

 

NOTE 5 - CONVERTIBLE NOTES PAYABLE

 

Convertible notes payable consisted of the following:

 

 

 

June 30,
2016

 

 

September 30,
2015

 

Convertible notes payable – unrelated party

 

$ -

 

 

$ 11,250

 

Convertible notes payable – related party

 

 

-

 

 

 

69,100

 

Less: current maturities

 

 

-

 

 

 

(22,350 )

Convertible notes payable, net of current maturities

 

$ -

 

 

$ 58,000

 

 

Convertible note payable – related party

 

Between January 2012 and August 2015, the Company issued 8% convertible promissory notes to Duane S. Jenson, the Company’s former President and director that provided for additional working capital in the total amount of $69,100. The notes were convertible into shares of the Company’s common stock at a conversion price of $0.25 per share at the option of the Company. The principal amount of the note for $20,000 and accrued interest were due on demand. The principal amount of the note for $38,000 and $11,100 were due on June 19, 2016 and February 25, 2018, respectively.

 

Convertible note payable – unrelated party

 

Additionally between February 2015 and June 2015, Clearline Ventures, LLC, an unrelated party, entered into an 8% convertible promissory note to provide additional working capital to the Company in the amount of $11,250. The principal amount of the note was due on February 25, 2018.

 

Management evaluated these convertible notes in accordance with ASC 815 and determined that there is no embedded derivative associated with the conversion feature of the note on the date of issuance. Management evaluated these convertible note payable in accordance with ASC 470 and determined that there was no beneficial conversion associated with these notes on the date of issuance.

 

In October 2015, the Company fully paid the total principal of $80,350 and accrued interest of $14,672 leaving a zero outstanding balance related to this note as of June 30, 2016.

 

 
F-25
Table of Contents

 

ALL FOR ONE MEDIA CORP. AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016 AND 2015

 

NOTE 5 - CONVERTIBLE NOTES PAYABLE (continued)

 

Long-term convertible note payable

 

At June 30, 2016, convertible notes payable consisted of the following:

 

 

 

June 30,
2016

 

Principal amount

 

$ 30,000

 

Accrued interest

 

 

25

 

Less: unamortized debt discount

 

 

(29,917 )

Convertible notes payable, net – long-term

 

$ 108

 

 

The Company issued a 10% Convertible Promissory Note for principal borrowings of up to $80,000. The 10% convertible promissory note and all accrued interest are due on June 21, 2018. The Company received initial proceed of $30,000 in June 2016. The note is unsecured and bears interest at the rate of 10% per annum from the issuance date thereof until the note is paid. The note holder shall have the right to convert beginning on the date which is 180 days following the issuance date the outstanding principal amount and accrued but unpaid interest into the Company’s common stock at a conversion price equal to a price which is 50% of the volume weighted average price of the Company’s common stock during the 20 trading days immediately preceding the conversion date. During the first 180 days following the date of the note the Company has the right to prepay the principal and accrued but unpaid interest due under the note, together with any other amounts that the Company may owe the holder under the terms of the note, at a premium of 150%. After this initial 180 day period, the Company does not have a right to prepay the note. The conversion price, however, is subject to full ratchet anti-dilution in the event that the Company issues any securities at a per share price lower than the conversion price then in effect.

 

In July 2016, the Company received the remaining proceeds from this convertible note in an aggregate amount of $45,000 and the Company paid original issuance cost of $5,000 in connection with this note payable which is being amortized over the term of the note.

 

The Company evaluated whether or not the convertible promissory note contain embedded conversion features, which meet the definition of derivatives under ASC 815 and related interpretations. The Company determined that the terms of the notes discussed above include a down-round provision under which the conversion price could be affected by future equity offerings undertaken by the Company which cause the embedded conversion options to be accounted for as derivative liabilities. In accordance with ASC 815, the Company has bifurcated the conversion feature of the convertible notes and recorded derivative liabilities on their issuance date and adjusted to fair value through earnings at each reporting date. The Company uses the Black-Scholes option pricing model to value the derivative liabilities.

 

The note issued during June 2016 were discounted in the amount of $30,000 based on the valuations and the Company recognized an initial derivative expense of $37,417 upon initial recording of the derivative liabilities. The total debt discount from the valuation of the derivatives are being amortized over the terms of the note. These derivative liabilities are then revalued on each reporting date. The gain resulting from the decrease in fair value of these convertible instruments was $3,402 for the nine months ended June 30, 2016. At June 30, 2016, the Company had recorded derivative liability of $64,015.

 

 
F-26
Table of Contents

 

ALL FOR ONE MEDIA CORP. AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016 AND 2015

 

NOTE 5 - CONVERTIBLE NOTES PAYABLE (continued)

 

During the nine months ended June 30, 2016, the fair value of the derivative liabilities were estimated using the Black-Scholes pricing model with the following assumptions:

 

Dividend rate

 

 

0

 

Term (in years)

 

1.98 to 2.00 years

 

Volatility

 

 

197 %

Risk-free interest rate

 

0.58% to 0.61

%

 

For the nine months ended June 30, 2016, amortization of debt discounts related to these convertible notes amounted to $83, which has been included in interest expense on the accompanying consolidated statements of operations. Accrued interest related to this convertible note – long term amounted to $25 and $0 at June 30, 2016 and September 30, 2015, respectively.

 

NOTE 6 - RELATED PARTY TRANSACTIONS

 

Parties are considered to be related to the Company if the parties directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal stockholders of the Company, its management, members of the immediate families of principal stockholders of the Company and its management and other parties with which the Company may deal where one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions. All transactions shall be recorded at fair value of the goods or services exchanged. Property purchased from a related party is recorded at the cost to the related party and any payment to or on behalf of the related party in excess of the cost is reflected as compensation or distribution to related parties depending on the transaction.

 

Between January 2012 and August 2015, the Company issued an 8% convertible promissory notes to Duane S. Jenson, the Company’s former President and director that provided for additional working capital in the total amount of $69,100. In October 2015, the Company fully paid the total principal of $69,100 and accrued interest of $13,870 leaving a zero outstanding balance as of June 30, 2016 (see Note 5).

 

In December 2015, the Company through its wholly owned subsidiary, Tween Entertainment, executed a month to month operating lease agreement with the CEO of the Company. The lease premises is located in Mt. Kisco, New York and the initial term is for a period of 12 months commencing in December 2015 and expiring in December 2016. The lease requires the Company to pay a monthly base rent of $1,000. The Company has paid rent of $4,700 during the nine months ended June 30, 2016.

 

On January 5, 2016, the Company entered into a 2 month consulting agreement with a consultant company to provide business advisory services. Pursuant to the consulting agreement, the Company paid a total of $5,000 during the term of the agreement. One of the members of CFTB is an affiliate of this consulting company (see Note 8).

 

During April 2016, the CEO and a director of the Company loaned $201 and $2,500, respectively, to the Company for working capital purposes. This loan is non-interest bearing and is due on demand.

 

On April 5, 2016, the Company sold 40,000 shares of the Company’s common stock to a director of the Company for gross proceeds of $4,000 (see Note 7).

 

In June 2016, the Company sold 1,000,000 shares of the Company’s common stock to a consultant at $0.0025 per common share or $2,500. The Company recorded subscription receivable of $2,500 as of June 30, 2016. The Company collected the subscription receivable on September 20, 2016. The consultant is one of the members of CFTB (see Note 7).

 

 
F-27
Table of Contents

 

ALL FOR ONE MEDIA CORP. AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016 AND 2015

 

NOTE 7 - STOCKHOLDERS’ DEFICIT

 

The authorized capital of the Company consists of 50,000,000 shares of common stock, par value $0.001 per share and 5,000,000 shares of preferred stock, par value $0.001 per share.

 

Common stock

 

On October 26, 2015, the Company entered into the Asset Exchange with CFTB and certain members owning membership interest in CFTB whereby the Company acquired certain assets from CFTB in exchange for 5,201,500 shares of the Company’s common stock (see Note 1). The asset that were acquired included a movie screenplay, master recordings, trademarks, and web domain names. Consequently, the issuance of 5,201,500 shares of the Company’s common stock to CFTB accounted for approximately 66% of the total issued and outstanding stock of the Company as of October 26, 2015 and the Company became a majority owned subsidiary of CFTB. Upon the closing of the Asset Exchange, the Company’s directors resigned and a new board of directors and new officers were appointed which consists of Brian Lukow, Brian Gold and Aimee O’Brien. Following the closing, Mr. Lukow was also appointed as Chief Executive Officer and President of the Company. Mr. Lukow and Mr. Gold own approximately 17% and 20% membership interest in CFTB, respectively. Accordingly, the CFTB Members are considered to be founders and promoters of CFTB.

 

The Company accounted for the acquisition of the CFTB Assets pursuant to the Asset Exchange under ASC 845-10-S99 “Transfer of Nonmonetary Assets by Promoters or Shareholders” whereby the transfer of nonmonetary assets to a company by its promoters or shareholders in exchange for stock prior to or at the time of the company's initial public offering normally should be recorded at the transferors' historical cost basis determined under US GAAP. The Company recorded the acquired CFTB assets at historical cost basis of the nonmonetary assets transferred which amounted to $0. Consequently, the Company valued the issuance of 5,201,500 shares of common stock in connection with the Asset Exchange at par value and a corresponding decrease in additional paid in capital. Additionally, the Company evaluated this acquisition transaction in accordance with ASC 805 and determined that the CFTB Assets do not constitute a business. The assets acquired have no processes and no outputs but rather comprised of certain assets consisting of a movie screenplay, master recordings, trademarks, and web domain names.

 

In October 2015, the Company sold an aggregate of 440,000 shares of the Company’s common stock for cash and received net proceeds of $104,075. The Company paid $5,000 legal fees and $925 escrow fees in connection with the sale. The Company used these proceeds to pay certain debts, convertible notes and accrued interest owed by the Company.

 

In October 2015, the Company sold an aggregate 1,248,500 shares of the Company’s common stock to three unrelated parties with purchase prices ranging from $0.001 to $0.08 per common share or $50,124. The Company recorded stock based compensation of $262,001 which is equal to the fair value of shares issued in excess of the purchase price of $50,124. The Company has determined that the fair value of the common stock is $0.25 per share which is based on the sale of common stock in the recent private placement.

 

In December 2015, the Company sold an aggregate of 140,000 shares of the Company’s common stock for gross proceeds of $30,000 and subscription receivable of $5,000. The Company collected the subscription receivable of $5,000 in January 2016. The Company used these proceeds for working capital purposes.

 

Between October 2015 and January 2016, the Company issued 65,806 shares of the Company’s common stock to the CEO of the Company as payment for services rendered pursuant to the Employment agreement (see Note 8). The Company valued these common shares at the fair value of $16,452 or $0.25 per common share based on the sale of common stock in a private placement at $0.25 per common share.

 

Between October 2015 and January 2016, the Company issued 65,806 shares of the Company’s common stock to a consultant as payment for services rendered. The Company valued these common shares at the fair value of $16,452 or $0.25 per common share based on the sale of common stock in a private placement at $0.25 per common share.

 

 
F-28
Table of Contents

 

ALL FOR ONE MEDIA CORP. AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016 AND 2015

 

NOTE 7 - STOCKHOLDERS’ DEFICIT (continued)

 

Between October 2015 and January 2016, the Company issued an aggregate of 19,740 shares of the Company’s common stock to the three directors of the Company as payment for services rendered pursuant to corporate director agreements (see Note 8). The Company valued these common shares at the fair value of $4,935 or $0.25 per common share based on the sale of common stock in a private placement at $0.25 per common share.

 

In February 2016, the Company issued 20,000 shares of the Company’s common stock to the CEO of the Company as payment for services rendered pursuant to the Employment agreement (see Note 8). The Company valued these common shares at the fair value of $5,000 or $0.25 per common share based on the sale of common stock in a private placement at $0.25 per common share.

 

In February 2016, the Company issued 20,000 shares of the Company’s common stock to a consultant as payment for services rendered. The Company valued these common shares at the fair value of $5,000 or $0.25 per common share based on the sale of common stock in a private placement at $0.25 per common share.

 

In February 2016, the Company issued an aggregate of 6,000 shares of the Company’s common stock to the three directors of the Company as payment for services rendered pursuant to corporate director agreements (see Note 8). The Company valued these common shares at the fair value of $1,500 or $0.25 per common share based on the sale of common stock in a private placement at $0.25 per common share.

 

Between March 2016 and May 2016, the Company issued 60,000 shares of the Company’s common stock to the CEO of the Company as payment for services rendered pursuant to the Employment agreement (see Note 8). The Company valued these common shares at the fair value ranging from $0.17 to $0.37 per common share or $14,800 based on the quoted trading price on the date of grants.

 

Between March 2016 and May 2016, the Company issued an aggregate of 18,000 shares of the Company’s common stock to the three directors of the Company as payment for services rendered pursuant to corporate director agreements (see Note 8). The Company valued these common shares at the fair value ranging from $0.17 to $0.37 per common share based on the quoted trading price on the date of grants.

 

In April 2016, the Company issued 50,000 shares of the Company’s common stock to a consultant as payment for financial advisory services rendered. These shares vested immediately on the date of issuance. The Company valued these common shares at the fair value of $18,500 or $0.37 per common share based on the quoted trading price on the date of grant.

 

In April 2016, the Company sold 40,000 shares of the Company’s common stock to a director of the Company for gross proceeds of $4,000. The Company recorded stock based compensation of $10,800 which is equal to the fair value of shares issued in excess of the purchase price of $4,000. The Company has determined that the fair value of the common stock is $0.37 per share which is based on the quoted trading price on the date of grant.

 

In June 2016, the Company sold an aggregate of 7,000,000 shares of its common stock at $0.0025 per common share for proceeds of $10,000 which was paid by 2 directors of the Company and a settlement of accrued salaries to the CEO of the Company for $7,500. The Company recorded stock based compensation of $1,382,500 which is equal to the fair value of shares issued in excess of the purchase price of $17,500. ASC 718 establishes that share-based payment transactions with employees shall be measured at the fair value of the equity instruments issued. The Company has determined that the fair value of the common stock is $0.20 per share which is based on the quoted trading price on the date of grant.

 

 
F-29
Table of Contents

 

ALL FOR ONE MEDIA CORP. AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016 AND 2015

 

NOTE 7 - STOCKHOLDERS’ DEFICIT (continued)

 

In June 2016, the Company sold 1,000,000 shares of the Company’s common stock to a consultant at $0.0025 per common share or $2,500. The Company recorded stock based compensation of $197,500 which is equal to the fair value of shares issued in excess of the purchase price of $2,500. The Company has determined that the fair value of the common stock is $0.20 per share which is based on the quoted trading price on the date of grant. The Company recorded subscription receivable of $2,500 as of June 30, 2016. The Company collected the subscription receivable on September 20, 2016. The consultant is one of the members of CFTB.

 

In June 2016, the Company issued 20,000 shares of the Company’s common stock to the CEO of the Company as payment for services rendered pursuant to the Employment agreement (see Note 8). The Company valued these common shares at the fair value of $15,000 or $0.25 per common share based on the quoted trading price on the date of grant.

 

In June 2016, the Company issued an aggregate of 6,000 shares of the Company’s common stock to the three directors of the Company as payment for services rendered and to be rendered for future services pursuant to corporate director agreements (see Note 8). The Company valued these common shares at the fair value of $1,500 or $0.25 per common share based on the quoted trading price on the date of grant.

 

NOTE 8 - COMMITMENTS AND CONTINGENCIES

 

Employment agreement

 

In October 2015, the Company entered into an Employment Agreement (the “Employment Agreement”) with Mr. Brian Lukow, the CEO of the Company. As compensation for his services per the terms of the Employment Agreement, the Company shall pay $5,000 per month and 20,000 shares of the Company’s common stock calculated at $0.25 per share. The Employment Agreement may be terminated by either party upon two months written notice. As of June 30, 2016, accrued salaries to Mr. Lukow amounted to $20,251 and was included in accounts payable and accrued expenses as reflected in the accompanying consolidated balance sheets.

 

Corporate director agreements

 

In October 2015, the Company entered into three corporate director agreements with Mr. Brian Lukow, Mr. Brian Gold and Ms. Aimee O’Brien to serve as members of the Company’s board of directors. The term of the agreements shall continue until September 30, 2016 unless earlier terminated by the Company. As compensation for their services per the terms of their respective corporate director agreements, the Company pays fees to i) Mr. Lukow of 2,000 shares of the Company’s common stock per month calculated at $0.25 per share ii) Ms. O’Brien of 2,000 shares of the Company’s common stock per month calculated at $0.25 per share and iii) Mr. Gold of 2,000 shares of the Company’s common stock per month during the month of service. Pursuant to the agreement, the director who will introduce and arrange for equity funding and acquisitions shall be entitled with a 10% commission fee as defined in the agreement. As of June 30, 2016, accrued director fees amounted to $0.

 

Consulting agreement

 

On March 29, 2016, the Company entered into a six-month consulting agreement with a consultant who has agreed to provide strategic planning and business development consulting services to the Company. The term of the agreement commenced on June 1, 2016. In August 2016, the Company entered into an amendment agreement with such consultant to amend the compensation terms whereby both parties agree that the consultant, in exchange for his services will be issued 1,000,000 shares of the Company’s common stock upon effectiveness of the Company’s registration statement and another 1,000,000 shares to be issued upon the effectiveness of another registration statement as defined in the consulting agreement. An additional 2,000,000 share of the Company’s common stock will be issued if the Company renews and extends the term of this agreement.

 

 
F-30
Table of Contents

 

ALL FOR ONE MEDIA CORP. AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016 AND 2015

 

NOTE 8 - COMMITMENTS AND CONTINGENCIES (continued)

 

Operating Lease

 

In December 2015, the Company through its wholly owned subsidiary, Tween Entertainment, executed a month to month operating lease agreement located in Boca Raton, Florida. The lease is for a period of 12 months commencing in December 2015 and expiring in December 2016. The lease requires the Company to pay a monthly rent of $1,000. The Company terminated these month to month lease agreement for the Boca Raton office in February 2016.

 

In December 2015, the Company through its wholly owned subsidiary, Tween Entertainment, executed a month to month operating lease agreement with the CEO of the Company. The lease premises is located in Mt. Kisco, New York and the initial term is for a period of 12 months commencing in December 2015 and expiring in December 2016. The lease requires the Company to pay a monthly rent of $1,000.

 

Rent expense was $10,400 for the nine months ended June 30, 2016.

 

NOTE 9 - SUBSEQUENT EVENTS

 

The Company evaluates events that have occurred after the balance sheet date through October 11, 2016. Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the accompanying unaudited consolidated financial statements other than those set forth below.

 

Between July 2016 and August 2016, the Company issued 40,000 shares of the Company’s common stock to the CEO of the Company as payment for services rendered pursuant to the Employment agreement (see Note 8). The Company shall value these shares based on the quoted trading price on the date of grants.

 

In July 2016, the Company issued an aggregate of 30,000 shares of the Company’s common stock to the three directors of the Company as payment for services rendered and to be rendered for future services pursuant to corporate director agreements (see Note 8). The Company shall value these shares based on the quoted trading price on the date of grants.

 

 
F-31
Table of Contents

 

Item 14. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

 

Not applicable.

 

Item 15. Financial Statements and Exhibits.

 

(a) Financial Statements.

 

The financial statements included in this Registration Statement on Form 10 are listed in Item 13.

 

(b) Exhibits.

 

Exhibit Number

Description

3.1

 

Certificate of Incorporation

3.2

 

By-Laws

3.3

 

Articles of Amendment

10.1

 

Asset Exchange Agreement with Crazy For the Boys, LLC dated October 26, 2015

10.2

 

Employment Agreement with Brian Lukow

10.3

 

Board of Directors Agreement with Brian Lukow

10.4

 

Board of Directors Agreement with Brian Gold

10.5

 

Consulting Agreement

10.6

 

Amendment to Consulting Agreement

10.7

 

Promissory Note with Apollo Capital Corp. dated June 27, 2016

10.8

 

Promissory Note with Apollo Capital Corp. dated August 25, 2016

10.9

 

Promissory Note with Apollo Capital Corp. dated October 25, 2016

 

 
21
Table of Contents

  

SIGNATURES

 

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized. 

 

ALL FOR ONE MEDIA CORP.
     

Date: November 21, 2016

By: /s/ Brian Lukow

Name:

Brian Lukow  
Title: President and Chief Executive Officer

(Principal Executive Officer)

 

 

 

 

 

Date: November 21, 2016

By:

/s/ Brian Lukow

 

 

Name:

Brian Lukow

 

 

Title:

Acting Chief Financial Officer

(Acting Principal Financial and Accounting Officer)

 

 

 

 

 

Date: November 21, 2016

By:

/s/ Brian Lukow

 

 

Name:

Brian Lukow

 

 

Title:

Director

 

 

 

 

 

Date: November 21, 2016

By:

/s/ Brian Gold

 

 

Name:

Brian Gold

 

 

Title:

Director

 

 

 

 

 

Date: November 21, 2016

By:

/s/ Aimee Ventura O’Brien

 

 

Name:

Aimee Ventura O’Brien

 

 

Title:

Director

 

 

 

22

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