U.S.
SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form
10-Q
|
Mark
One
[
X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE
ACT OF 1934
For
the quarter ended March 31, 2009
[ ] TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE
ACT OF 1934
For
the transition period from ______ to
_______
|
Commission
File No. 000-52753
Playbox (US) Inc.
(Name
of small business issuer in its charter)
|
|
|
Nevada
(State
or other jurisdiction of incorporation
or
organization)
|
n/a
(I.R.S.
Employer Identification No.)
|
|
|
Suite 3.19, 130 Shaftesbury
Avenue
London, England WID
SEU
(Address
of principal executive offices)
|
|
|
+44 (0) 20 7031
1189
(Issuer’s
telephone number)
|
n/a
(Address
of prior principal executive offices if changed from last
filing)
|
|
|
Securities
registered pursuant to Section
12(b)
of the Act:
|
Name
of each exchange on which
registered:
|
None
|
|
|
|
Securities
registered pursuant to Section 12(g) of the Act:
|
Common Stock,
$0.001
|
(Title
of
Class)
|
With a
copy to:
Diane D.
Dalmy
Attorney
at Law
8965 W.
Cornell Place
Lakewood,
CO 80227
303.985.9324
(telephone)
303.988.6954
(facsimile)
Indicate
by checkmark whether the issuer: (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
Yes [X
] No[ ]
Indicate
by check mark whether the registrant is a large accelerated filed, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.
Large
accelerated filer
[ ] Accelerated
filer [ ]
Non-accelerated
filer
[ ] Smaller
reporting company [X]
Indicate
by checkmark whether the registrant is a shell company (as defined in Rule 12b-2
of the Exchange Act). Yes [X] No [ ]
Applicable
Only to Issuer Involved in Bankruptcy Proceedings During the Preceding Five
Years.
N/A
Indicate
by checkmark whether the issuer has filed all documents and reports required to
be filed by Section 12, 13 and 15(d) of the Securities Exchange Act of 1934
after the distribution of securities under a plan confirmed by a
court. Yes[ ] No[ ]
Applicable
Only to Corporate Registrants
Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the most practicable date:
Class
|
Outstanding
as of May 12, 2009
|
Common
Stock, $0.001
|
54,186,299
|
Form
10-Q
Part
1
|
FINANCIAL
INFORMATION
|
Page
|
|
|
|
|
Financial Statements
|
|
|
Balance
Sheets
|
4
|
|
Statements
of Operations
|
5
|
|
Statements
of Cash Flows
|
6
|
|
Notes
to Financial Statements
|
7
|
|
|
|
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
13
|
|
|
|
|
Quantitative
and Qualitative Disclosures About Market Risk
|
21
|
|
|
|
|
Controls
and Procedures
|
22
|
|
|
|
Part
II.
|
OTHER
INFORMATION
|
|
|
|
|
|
Legal
Proceedings
|
23
|
|
|
|
Item
1A
|
Risk
Factors
|
|
|
|
|
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
23
|
|
|
|
|
Defaults
Upon Senior Securities
|
25
|
|
|
|
|
Submission
of Matters to a Vote of Security Holders
|
25
|
|
|
|
|
Other
Information
|
25
|
|
|
|
|
Exhibits
|
26
|
|
|
|
PART
I
ITEM
1.
FI
NANCIAL STATEMENTS
Playbox
(US) Inc.
|
|
(A
Development Stage Company)
|
|
Consolidated
Balance Sheets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
of
|
|
|
As
of
|
|
|
|
March
31, 2009
|
|
|
September
30, 2008
|
|
ASSETS
|
|
UNAUDITED
|
|
|
|
|
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
|
Cash
of Continuing Operations
|
|
|
$382
|
|
|
|
$382
|
|
Cash
of Discontinued Operations
|
|
|
4,749
|
|
|
|
4,749
|
|
Total
Cash
|
|
|
5,131
|
|
|
|
5,131
|
|
Other
Current assets - Discontinued Operations
|
|
|
1,391
|
|
|
|
1,391
|
|
Total
Current Assets
|
|
|
6,522
|
|
|
|
6,522
|
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
|
6,522
|
|
|
|
6,522
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
|
$53,878
|
|
|
|
$49,636
|
|
Accrued
liabilities
|
|
|
2,250
|
|
|
|
4,500
|
|
Due
to Related Parties
|
|
|
50,231
|
|
|
|
323,858
|
|
Amounts
owing pursuant to agreement for acquisition of Delta Music
Limited
|
|
|
142,140
|
|
|
|
181,750
|
|
Current
Liabilities - Discontinued Operations
|
|
|
64,217
|
|
|
|
64,217
|
|
Total
Current Liabilities
|
|
|
312,716
|
|
|
|
623,961
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES
|
|
|
312,716
|
|
|
|
623,961
|
|
STOCKHOLDERS’
DEFICIT
|
|
|
|
|
|
|
|
|
Capital
Stock
|
|
|
|
|
|
|
|
|
Preferred
Stock
|
|
|
|
|
|
|
|
|
Authorized: 5,000,000
shares with $0.001 par value. Issued: Nil
|
|
|
-
|
|
|
|
-
|
|
Common
Stock
|
|
|
|
|
|
|
|
|
Authorized:
100,000,000 common shares with $0.001 par value
|
|
|
|
|
|
Issued: 54,186,299
(March 31, 2009)
|
|
|
54,186
|
|
|
|
29,663
|
|
29,663,293
(September 30, 2008)
|
|
|
|
|
|
|
|
|
Obligation
to issue shares
|
|
|
0
|
|
|
|
2,000
|
|
Additional
paid-in capital
|
|
|
4,090,609
|
|
|
|
3,105,212
|
|
Accumulated
Other Comprehensive Income (Loss)
|
|
|
49,416
|
|
|
|
5,847
|
|
Deficit
- Accumulated during the development stage
|
|
|
(4,500,404
|
)
|
|
|
(3,760,161
|
)
|
TOTAL
STOCKHOLDERS' EQUITY (DEFICIT)
|
|
|
(306,194
|
)
|
|
|
(617,439
|
)
|
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
$6,522
|
|
|
|
$6,522
|
|
|
|
|
|
|
|
|
|
|
The
accompanying notes are an integral part of these consolidated financials
statements.
|
|
|
|
|
|
Playbox
(US) Inc.
|
|
(A
Development Stage Company)
|
|
Statements
of Operations
|
|
UNAUDITED
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incorporation
|
|
|
|
For
the Three Months
|
|
|
For
the Three Months
|
|
|
For
the Six Months
|
|
|
For
the Six Months
|
|
|
May
02, 2003
|
|
|
|
Ended
|
|
|
Ended
|
|
|
Ended
|
|
|
Ended
|
|
|
to
|
|
|
|
March
31, 2009
|
|
|
March
31, 2008
|
|
|
March
31, 2009
|
|
|
March
31, 2008
|
|
|
March
31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General
and Administrative Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounting
and auditing
|
|
|
2,625
|
|
|
|
9,553
|
|
|
|
4,125
|
|
|
|
31,583
|
|
|
|
270,383
|
|
Bank
Charges
|
|
|
23
|
|
|
|
436
|
|
|
|
85
|
|
|
|
663
|
|
|
|
2,019
|
|
Consulting
fees
|
|
|
-
|
|
|
|
79,927
|
|
|
|
360,000
|
|
|
|
110,604
|
|
|
|
627,004
|
|
Depreciation
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
1,887
|
|
Development
|
|
|
-
|
|
|
|
199,540
|
|
|
|
-
|
|
|
|
199,540
|
|
|
|
228,692
|
|
Filing
fees
|
|
|
3,020
|
|
|
|
1,520
|
|
|
|
3,020
|
|
|
|
1,520
|
|
|
|
13,062
|
|
Intellectual
properties
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,500,000
|
|
Investor
relations
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
18,000
|
|
Legal
|
|
|
1,447
|
|
|
|
7,467
|
|
|
|
11,197
|
|
|
|
25,190
|
|
|
|
132,225
|
|
Marketing
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
38,838
|
|
Office
& Miscellaneous
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
13,990
|
|
Salaries
& Benefits
|
|
|
-
|
|
|
|
25,179
|
|
|
|
360,000
|
|
|
|
29,340
|
|
|
|
574,811
|
|
Transfer
agent fees
|
|
|
-
|
|
|
|
130
|
|
|
|
1,816
|
|
|
|
130
|
|
|
|
6,625
|
|
Travel
& Entertainment
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4,038
|
|
Total
General and Administrative Expenses
|
|
|
7,116
|
|
|
|
323,751
|
|
|
|
740,244
|
|
|
|
398,570
|
|
|
|
4,431,574
|
|
|
|
|
(7,116
|
)
|
|
|
(323,751
|
)
|
|
|
(740,244
|
)
|
|
|
(398,570
|
)
|
|
|
(4,431,574
|
)
|
Income
(loss) from Continuing Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) from Discontinued Operations
|
|
|
0
|
|
|
|
(4,185
|
)
|
|
|
0
|
|
|
|
(8,519
|
)
|
|
|
(61,924
|
)
|
Other
Income (Expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
exchange gain (loss)
|
|
|
0
|
|
|
|
4,223
|
|
|
|
0
|
|
|
|
2,918
|
|
|
|
(7,786
|
)
|
Interest
income
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
881
|
|
Loss
for the period
|
|
$
|
(7,116
|
)
|
|
$
|
(323,713
|
)
|
|
|
(740,244
|
)
|
|
|
(404,171
|
)
|
|
$
|
(4,500,404
|
)
|
|
|
$
|
0.00
|
|
|
$
|
(0.01
|
)
|
|
|
(0.02
|
)
|
|
|
(0.01
|
)
|
|
|
|
|
Loss
per Share – Basic and Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
Average Shares Outstanding
|
|
|
54,186,299
|
|
|
|
28,845,139
|
|
|
|
48,147,138
|
|
|
|
28,845,139
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
Loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss
|
|
|
(7,116
|
)
|
|
|
(323,713
|
)
|
|
|
(740,244
|
)
|
|
|
(404,171
|
)
|
|
|
(4,500,404
|
)
|
Gain
(loss) on foreign exchange translation
|
|
|
3,548
|
|
|
|
(10,160
|
)
|
|
|
43,569
|
|
|
|
1,913
|
|
|
|
49,416
|
|
Total
Comprehensive Loss
|
|
|
(3,567
|
)
|
|
|
(333,873
|
)
|
|
|
(696,675
|
)
|
|
|
(402,258
|
)
|
|
|
(4,450,988
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
accompanying notes are an integral part of these consolidated financials
statements.
|
|
Playbox
(US) Inc.
|
|
(A
Development Stage Company)
|
|
Statements
of Cash Flows
|
|
UNAUDITED
|
|
|
|
For
the Six Months Ended March 31, 2009
|
|
For
the Six Months Ended March 31, 2008
|
|
|
Cumulative
from Incorporation
May
2, 2003 to
March
31, 2009
|
|
Operating
|
|
|
|
|
|
|
|
|
|
Net
Loss
|
|
$
|
(740,244
|
)
|
|
$
|
(404,171
|
)
|
|
$
|
(4,500,404
|
)
|
Items
not involving cash:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
-
|
|
|
|
-
|
|
|
|
1,887
|
|
Shares
issued for consulting services
|
|
|
360,000
|
|
|
|
50,000
|
|
|
|
416,085
|
|
Shares
issued for director's salaries
|
|
|
360,000
|
|
|
|
-
|
|
|
|
360,000
|
|
Shares
for intellectual properties
|
|
|
-
|
|
|
|
-
|
|
|
|
2,500,000
|
|
Shares
issued for settlement of debt
|
|
|
-
|
|
|
|
-
|
|
|
|
31,975
|
|
Changes
in non-cash working capital items:
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
|
4,242
|
|
|
|
42,773
|
|
|
|
53,878.41
|
|
Accrued
liabilities
|
|
|
(2,250
|
)
|
|
|
(841
|
)
|
|
|
11,250
|
|
Amounts
owing pursuant to agreement for acquisition of Delta Music
Limited
|
|
|
199,540
|
|
|
|
181,750
|
|
Effects
of accounts receivable in discontinued operation
|
|
|
-
|
|
|
|
(369
|
)
|
|
|
(1,391
|
)
|
Effects
of accounts payable in discontinued operation
|
|
|
-
|
|
|
|
(322
|
)
|
|
|
(15,532
|
)
|
Effects
of accrued liabilities in discontinued operations
|
|
|
-
|
|
|
|
7,869
|
|
|
|
(8,321
|
)
|
Effects
of amounts owing to related parties in discontinued
operations
|
|
|
-
|
|
|
|
26,633
|
|
|
|
185,697
|
|
Net
cash flows provided by (used in) operations
|
|
|
(18,252
|
)
|
|
|
(78,888
|
)
|
|
|
(783,126
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
acquired in purchase of Playbox Media Limited
|
|
|
-
|
|
|
|
-
|
|
|
|
130,626
|
|
Acquisition
of property and equipment
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,887
|
)
|
Net
cash flows from investing activities
|
|
|
0
|
|
|
|
0
|
|
|
|
128,739
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing
|
|
|
|
|
|
|
|
|
|
|
|
|
Due
to Boyd Holdings Inc.
|
|
|
-
|
|
|
|
-
|
|
|
|
32,170
|
|
Due
to related parties
|
|
|
14,335
|
|
|
|
42,501
|
|
|
|
329,193.52
|
|
Loan
payable
|
|
|
-
|
|
|
|
12,710
|
|
|
|
-
|
|
Share
issuances for cash
|
|
|
-
|
|
|
|
20,000
|
|
|
|
288,393
|
|
Net
cash flows from financing activities
|
|
|
14,335
|
|
|
|
75,211
|
|
|
|
649,757
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect
of exchange rate changes
|
|
|
3,917
|
|
|
|
1,913
|
|
|
|
9,764
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change
in Cash
|
|
|
0
|
|
|
|
(1,764
|
)
|
|
|
5,131
|
|
Cash
- Beginning
|
|
|
5,131
|
|
|
|
5,909
|
|
|
|
0
|
|
Cash
- Ending
|
|
|
$5,131
|
|
|
|
$4,145
|
|
|
|
$5,131
|
|
Supplemental
Cash Flow Information
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
paid for:
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
Taxes
|
|
|
$-
|
|
|
|
$-
|
|
|
|
$-
|
|
Interest
Paid
|
|
|
$-
|
|
|
|
$-
|
|
|
|
$-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
accompanying notes are an integral part of these consolidated financials
statements.
|
|
Playbox
(US) Inc.
|
(Formerly
Boyd Holdings Inc.)
|
(A
Development Stage Company)
|
Notes
to Consolidated Financial Statements
|
March
31, 2009
|
|
1.
Basis of Presentation
Organization
Playbox
(US) Inc. (the “Company” or "Boyd") was incorporated on April 1, 2005 under the
laws of the State of Nevada, under the name of Boyd Holdings Inc. On April 12,
2006, the Company changed its name to Playbox (US) Inc.
By letter
of intent dated April 18, 2005 and a Share Exchange Agreement ("Agreement")
dated May 23, 2005 and as amended June 30, 2005 with PlayBOX MEDIA LIMITED
("PlayBOX"), a United Kingdom corporation, wherein Boyd agreed to issue to the
shareholders of Playbox 12,000,000 Boyd shares in exchange for the 2,085,000
shares that constituted all the issued and outstanding shares of Playbox. On
March 24, 2006, Playbox completed the reverse acquisition (“RTO”) under the
Agreement with Boyd. Immediately before the date of the RTO, Boyd had
100,000,000 common shares authorized and 5,705,139 shares of common stock issued
and outstanding. Pursuant to the RTO, all of the 2,085,000 issued and
outstanding shares of common stock of Playbox were exchanged for 12,000,000 Boyd
shares on an approximate 5.755 to 1 basis.
PlayBOX
was incorporated on August 21, 2003 and is a technology and marketing company,
headquartered in London, England. The accompanying financial statements are the
historical financial statements of PlayBOX.
The major
asset of Playbox is the worldwide license (the “License”) to exploit software
that provides an integrated music interface and music collection manager running
on Windows, Linux and Macintosh operating systems. This software is currently
being marketed to both the end-user music listener and to record industry
companies to enable such companies to embed this software into their websites in
order to provide seamless access to on-line music for sale. The software has
also been developed to enable the end-user to control their music collection
being managed by the Playbox software wirelessly from commonly used devices such
as the listeners’ music system or cell phone and to be able to synchronize their
music cross-platform with portable music players (iPod, MP3 player, or
PDA).
Effective
July 1, 2008, the Company wound up Playbox Media Limited, the UK Subsidiary,
such that all operations are now conducted through Playbox (US) Inc. The
historical results of the wound-up subsidiary have been reclassified as
discontinued operations in these financial statements. This wind-up
is described in more detail in Note 7.
Unaudited Interim
Consolidated Financial Statements
The
accompanying unaudited interim consolidated financial statements have been
prepared in accordance with United States generally accepted accounting
principals for interim financial information and with the instructions to Form
10-Q of Regulation S-B. They do not include all information and
footnotes required by generally accepted accounting principles for complete
financial statements. However, except as disclosed herein, there have
been no material changes in the information disclosed in the notes to the
consolidated financial statements for the year ended September 30, 2008 included
in the Company’s 10-K filed with the Securities and Exchange
Commission. The unaudited interim consolidated financial statements
should be read in conjunction with those consolidated financial statements
included in the 10-K. In the opinion of management, all adjustments
considered necessary for a fair presentation, consisting solely of normal
recurring adjustments, have been made. Operating results for the
three months ended March 31, 2009 are not necessarily indicative of the results
that may be expected for the year ending September 30, 2009.
2.
|
Significant
Accounting Policies
|
|
The
following is a summary of significant accounting policies used in the
preparation of these financial statements.
|
|
a)
|
Basis
of Consolidation
|
|
|
These
consolidated financial statements include the accounts of PlayBOX MEDIA
LIMITED since its incorporation on August 21, 2003 and Playbox (US) Inc.
since the reverse acquisition on March 24, 2006. All intercompany balances
and transactions have been eliminated.
|
|
b)
|
Use
of Estimates
|
|
|
The
preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make certain estimates and assumptions that affect the
reported amounts and timing of revenues and expenses, the reported amounts
and classification of assets and liabilities, and disclosure of contingent
assets and liabilities. These estimates and assumptions are based on the
Company’s historical results as well as management’s future expectations.
The Company’s actual results could vary materially from management’s
estimates and assumptions.
|
|
c)
|
Development
Stage Company
|
|
|
The
Company is a development stage company as defined by SFAS No. 7. The
Company is devoting substantially all of its present efforts to establish
a new business. All losses accumulated since inception have been
considered as part of the Company’s development stage
activities.
|
|
d)
|
Cash
and Cash Equivalents
|
|
|
Cash
equivalents consist of highly liquid instruments purchased with an initial
maturity of three months or less.
|
|
e)
|
Revenue
Recognition
|
|
|
Revenues
are recognized when all of the following criteria have been met under SAB
No. 104, “
Revenue
Recognition in Financial Statements
”: persuasive evidence of an
agreement exists; delivery has occurred or services have been rendered;
the fee is fixed or determinable; and collectibility is reasonably
assured.
|
|
|
Revenue
arises from the following sources: creation of web-based music interfaces;
provision of hosting and bandwidth services; and revenue share
services.
|
|
|
Revenues
from the creation of web-based music interfaces come from set-up fees
based on the number of tracks to be uploaded and the number of hours of
development time to complete the interface and are recognized when all of
the following SAB No. 104 criteria are met: a web-based interface
development agreement is signed with an estimate of the total cost based
on agreed upon specifications. Revenue from the development of web-based
interfaces is recognized in accordance with the completed performance
method. Under this method, revenue is recognized at the completion of the
web-based interface as the service transaction taken as a whole can be
deemed to have taken place on completion of the development.
Collectability is reasonably assured as the Company receives the agreed
set-up fee prior to allowing access to the web- based
interface.
|
|
|
Revenues
from the provision of hosting and bandwidth services come from a one time
hosting set-up fee and monthly fees based on disk space and bandwidth to
be provided and are recognized when all of the following SAB No. 104
criteria are met: a website hosting agreement is signed with an initial
term of six months and from month to month thereafter until terminated by
either party. Each agreement has a hosting price structure where prices
can be determined.
|
|
|
Revenue
from the one time set-up fee is deferred and recognized over the initial
term of six months and revenue received from monthly fees is recognized at
the end of the month, when hosting services, server bandwidth and customer
support was made available to the client for the month. Collectability is
reasonably assured as the Company receives a one time set-up fee prior to
the provision of the services. Monthly fees are received in advance of
each month, which is recorded as deferred revenue, and are recognized when
the monthly service is rendered.
|
|
|
Revenues
from the revenue share services element come from a set revenue share
percentage of music download purchases, as set out in each customer’s
agreement and are recognized when all of the following SAB No. 104
criteria are met: a distributor agreement is signed with initial and
renewal terms determined on a case-by-case basis. Revenue is recognized
when the minimum revenue share threshold of British Pounds Sterling
(“GBP”) 100, every payment period, is achieved. If the revenue share is
less than GBP 100, payments shall be carried over to the next due payment
date. Collectability is reasonably assured as the Company collects its
revenue share directly from the secure online payment system which it
utilizes prior to transferring net revenues to the
customer.
|
|
f)
|
Foreign
Currency Translations
|
|
|
The
Company’s reporting currency is the U.S. dollar. All of the Company's
transactions are denominated in Canadian currency so the Company has
adopted the Canadian dollar as its functional and reporting
currency. All transactions initiated in other currencies are
re-measured into the functional currency as follows:
·
Assets
and liabilities at the rate of exchange in effect at the balance sheet
date,
·
Equity
at historical rates, and
·
Revenue
and expense items at the prevailing rate on the date of the
transaction.
Translation
adjustments resulting from translation of balances are accumulated as a
separate component of shareholders’ equity and reported as a component of
comprehensive income or loss.
|
|
g)
|
Income
Taxes
|
|
|
Income
taxes are accounted for using the asset and liability method. Deferred tax
assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying
amounts of assets and liabilities and their respective tax bases and
operating loss and tax credit carryforwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period
that includes the enactment date. A valuation allowance is provided for
deferred tax assets when it is more likely than not that such assets will
not be recovered.
|
|
h)
|
Fair
Value of Financial Instruments
|
|
|
The
Company’s financial instruments consist of cash, accounts receivable,
accounts payable, accrued liabilities and amounts due to related parties.
Unless otherwise noted, it is management’s opinion that this Company is
not exposed to significant interest or credit risks arising from these
financial instruments. The fair value of these financial instruments
approximate their carrying values, unless otherwise
noted.
|
|
i)
|
Segment
Reporting
|
|
|
SFAS
No. 131, "
Disclosures
about Segments of an Enterprise and Related Information
,” changed
the way public companies report information about segments of their
business in their quarterly reports issued to stockholders. It also
requires entity-wide disclosures about the products and services an entity
provides, the material countries in which it holds assets and reports
revenues and its major customers. The Company currently operates in two
segments, Western Europe and United
States.
|
|
j)
|
Stock-Based
Compensation
|
|
|
Effective
January 1, 2006, the Company adopted the provisions of Statement of
Financial Accounting Standards (“SFAS”) No. 123(R), “
Share-Based Payment
”,
which establishes accounting for equity instruments exchanged for employee
services. Under the provisions of SFAS 123(R), stock-based compensation
cost is measured at the grant date, based on the calculated fair value of
the award, and is recognized as an expense over the employees’ requisite
service period (generally the vesting period of the equity grant). Before
January 1, 2006, the Company accounted for stock-based compensation to
employees in accordance with Accounting Principles Board Opinion No. 25,
“Accounting for Stock Issued to Employees,” and complied with the
disclosure requirements of SFAS No. 123, “Accounting for Stock-Based
Compensation”.
|
|
|
The
Company adopted FAS 123(R) using the modified prospective method, which
requires the Company to record compensation expense over the vesting
period for all awards granted after the date of adoption, and for the
unvested portion of previously granted awards that remain outstanding at
the date of adoption. As the Company had no invested stock options
outstanding on the adoption date the financial statements for the periods
prior to January 1, 2006 have not been restated to reflect the fair value
method of expensing share-based compensation. Adoption of SFAS No. 123(R)
does not change the way the Company accounts for share-based payments to
non-employees, with guidance provided by SFAS 123 (as originally issued)
and Emerging Issues Task Force Issue No. 96-18, “
Accounting for Equity
Instruments That Are Issued to Other Than Employees for Acquiring, or in
Conjunction with Selling, Goods or Services
”.
|
|
k)
|
Comprehensive
Income
|
|
|
SFAS
No. 130,
"Reporting
Comprehensive Income,"
establishes standards for reporting and
display of comprehensive income and its components in a full set of
general-purpose financial statements.
|
|
l)
|
Loss
per Share
|
|
|
The
Company computes net loss per share in accordance with SFAS No. 128,
“
Earnings per
Share
”, which requires presentation of both basic and diluted loss
per share (“LPS”) on the face of the statement of operations. Basic LPS is
computed by dividing the net loss available to common shareholders by the
weighted average number of outstanding common shares during the period.
Diluted LPS gives effect to all potentially dilutive common shares
outstanding including convertible debt, stock options and share purchase
warrants, using the treasury stock method. The computation of diluted LPS
does not assume conversion, exercise or contingent exercise of securities
that would have an anti-dilutive effect on LPS. The diluted LPS equals the
basic LPS since the potentially dilutive securities are
anti-dilutive.
|
|
m)
|
Recently
Adopted Accounting Standards
|
|
|
|
|
|
In
December 2007, the FASB issued SFAS No. 160, “
Non-controlling Interests in
Consolidated Financial Statements
”. This Statement amends ARB 51 to
establish accounting and reporting standards for the non-controlling
(minority) interest in a subsidiary and for the deconsolidation of a
subsidiary. It clarifies that a non-controlling interest in a subsidiary
is an ownership interest in the consolidated entity that should be
reported as equity in the consolidated financial statements. The Company
has not yet determined the impact, if any, that SFAS No. 160 will have on
its consolidated financial statements. SFAS No. 160 is effective for the
Company’s fiscal year beginning October 1, 2009
.
|
|
|
In
December 2007, the FASB issued SFAS 141R,
Business Combinations
.
SFAS 141R replaces SFAS 141. The statement retains the purchase method of
accounting for acquisitions, but requires a number of changes, including
changes in the way assets and liabilities are recognized in the purchase
accounting. It changes the recognition of assets acquired and liabilities
assumed arising from contingencies, requires the capitalization of
in-process research and development at fair value, and requires the
expensing of acquisition-related costs as incurred. The statement will
apply prospectively to business combinations occurring in the Comapnys
fiscal year beginning October 1, 2009. We are evaluating the impact
adopting SFAS 141R will have on our financial
statements.
|
3.
|
Intellectual
Property
|
|
On
March 31, 2006 the Company acquired from its majority stockholder, the
PlayBOX Technology by issuing 10,000,000 common shares. The PlayBOX
Technology is an integrated music interface and music collection manager
running on Windows, Linux and Macintosh operating systems. The acquisition
is a related party transaction. The value assigned was $2,500,000, being
equal to the most recent share transaction of the Company of $0.25 per
share. This amount was written-off as the Company determined the PlayBOX
Technology was impaired in accordance with paragraph 34 of SOP 98-1 and
FASB 144, “
Accounting
for the Impairment or Disposal of Long-Lived
Assets
.”
|
4.
|
Related
Party Balances and Transactions
|
|
The
amounts due to related parties of $50,231 for six months ended March 31,
2009 are non-interest bearing, unsecured and due on demand. Included in
due to related parties are amounts owing to a corporate and individual
shareholder.
|
5.
|
Amounts
Payable Pursuant to Agreement for Acquisition of Delta Music
Limited
|
|
On
March 28, 2008, the Company entered into a Share Purchase Agreement (the
“Agreement”) for the proposed acquisition of UK based Delta Music Limited
(“Delta Music”). The acquisition never completed.
However,
under the terms of the Agreement, the Company agreed to pay GBP 100,000
(USD 142,140 as of M arch 31, 2009) to the attorneys of the Sellers to
fund certain expenses to be incurred by the Sellers and Delta Music in
connection with the acquisition regardless of whether or not the
acquisition completed.
As
of March 31, 2009, this amount has not been paid.
|
6.
|
Capital
Stock
|
|
The
Company’s capitalization is 100,000,000 common shares with a par value of
$0.001 per share and 5,000,000 preferred shares with a par value of
$0.001.
|
|
a)
|
On
April 21, 2008, the Company received $100,000 (GBP 49,192), from an
unrelated party, for 2,000,000 common shares at $0.05 per share. These
shares were issued on October 2, 2008.
|
|
b)
|
On
October 15, 2008, the Company issued 700,000 common shares at $0.09 per
share in full settlement of a $63,000 debt to Henry Maloney, a former
director of the Company.
|
|
c)
|
On
November 15, 2008, the Company issued 7,200,000 common shares at $0.05 per
share as prepayment of director’s fees pursuant to a director’s fee
agreement with Gideon Jung.
|
|
d)
|
On
November 19, 2008, the Company issued 5,623,008 common shares at $0.04 per
share in full settlement of a $224,920 debt to Debondo Capital Ltd., a
former related party.
|
|
e)
|
On
November 25, 2008, the Company issued 9,000,000 common shares at $0.04 per
share as prepayment of consulting fees pursuant to consulting agreement
with Jabeco Inc.
|
7.
|
Wind-up
of UK Subsidiary
|
Because
the Company has had a history of accumulating debt through its UK subsidiary,
the Company’s Board of Directors determined that it was in the best interests of
the Company to wind-up the UK subsidiary. An effective date of July
1, 2008 was set by the Board.
The
following table summarizes the net assets disposed of and accounted for in these
financials as discontinued operations:
Assets
|
|
|
|
Cash
|
|
|
4,749
|
|
Accounts
Receivable
|
|
|
1,391
|
|
Total
Assets Disposed of
|
|
|
$6,140
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Accounts
Payable
|
|
|
37,043
|
|
Accrued
Liabilities
|
|
|
541
|
|
Due
to related parties
|
|
|
26,633
|
|
Total
Liabilities disposed of
|
|
$
|
64,217
|
|
|
|
|
|
|
Net
Liabilities disposed of
|
|
$
|
58,077
|
|
|
|
|
|
|
|
|
|
|
|
8.
|
Going
Concern
|
|
The
accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern, which contemplates,
among other things, the realization of assets and satisfaction of
liabilities in the normal course of business. As at March 31, 2009, the
Company has an accumulated deficit of $4,500,404 and has incurred an
accumulated operating cash flow deficit of $783,126 since incorporation.
The Company intends to continue funding operations through equity
financing arrangements, which may be insufficient to fund its capital
expenditures, working capital and other cash requirements for the next
fiscal year.
Thereafter,
the Company will be required to seek additional funds, either through
equity financing, to finance its long-term operations. The successful
outcome of future activities cannot be determined at this time, and there
is no assurance that, if achieved, the Company will have sufficient funds
to execute its intended business plan or generate positive operating
results. In response to these conditions, management intends to raise
additional funds through future private placement offerings.
These
factors, among others, raise substantial doubt about the Company's ability
to continue as a going concern. The accompanying consolidated financial
statements do not include any adjustments that might result from the
outcome of this uncertainty.
|
9.
|
Subsequent
Events
|
|
There
are no subsequent events expected to have a material affect on the
presentation of these financials
statements.
|
FORWARD
LOOKING STATEMENTS
Statements
made in this Form 10-Q that are not historical or current facts are
"forward-looking statements" made pursuant to the safe harbor provisions of
Section 27A of the Securities Act of 1933 (the "Act") and Section 21E of the
Securities Exchange Act of 1934. These statements often can be identified by the
use of terms such as "may," "will," "expect," "believe," "anticipate,"
"estimate," "approximate" or "continue," or the negative thereof. We intend that
such forward-looking statements be subject to the safe harbors for such
statements. We wish to caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made. Any
forward-looking statements represent management's best judgment as to what may
occur in the future. However, forward-looking statements are subject to risks,
uncertainties and important factors beyond our control that could cause actual
results and events to differ materially from historical results of operations
and events and those presently anticipated or projected. We disclaim any
obligation subsequently to revise any forward-looking statements to reflect
events or circumstances after the date of such statement or to reflect the
occurrence of anticipated or unanticipated events.
ITEM
2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR
PLAN OF OPERATION
GENERAL
Playbox
(US) Inc. was incorporated on April 1, 2005 as Boyd Holdings Inc. under the laws
of the State of Nevada. On April 18, 2005, we entered into a letter of intent
with PlayBOX UK Media Limited (“PlayBOX UK”) proposing acquisition of PlayBOX UK
subject to certain conditions, including raising a minimum of $200,000. PlayBOX
UK was incorporated in the United Kingdom on August 21, 2003. On May 23, 2005,
we entered into a definitive share exchange agreement (the “Share Exchange
Agreement”) with PlayBOX UK and the shareholders of PlayBOX UK. The Share
Exchange Agreement originally contemplated a closing date of June 30, 2005. The
closing date was extended by agreement in order to provide PlayBOX UK with more
time to obtain necessary corporate approvals and to provide us with more time to
raise the required financing.
On March
24, 2006, we acquired all of the issued and outstanding shares of PlayBOX UK
pursuant to the terms and provisions of the Share Exchange Agreement in
consideration of the issuance of an aggregate of 12,000,000 shares of our common
stock to the shareholders of PlayBOX UK. On April 12, 2006, we changed our name
to Playbox (US) Inc.
Our
shares of common stock trade on the Over-the-Counter Bulletin Board under the
symbol “PYBX:BB”.
Please
note that throughout this Quarterly Report, and unless otherwise noted, the
words "we", "our", "us”, "the Company", “the Corporation”, “or "Playbox (US)
Inc." refers to Playbox (US) Inc.
CURRENT
BUSINESS OPERATIONS
We are
the owner of an online music hosting and downloading application targeted at
unsigned music acts and small- to medium-sized record labels enabling them to
establish their own music downloading or hosting services. The application is
offered with a number of supplemental services such as hosting, streaming,
e-commerce and digital rights management (DRM) using the latest MP3 and Windows
Multimedia technology. We pool these services together to offer our clients a
cost-effective and professional platform on which to sell and promote their
music products.
Our
PlayBOX online music application consists of four dynamic interfaces, namely
White Label, Aggregator, Bespoke and Jukebox, which provide an interface between
artists and content owners and their listeners via the Internet. The White Label
interface provides artists a way to offer their music for sale to listeners via
the Internet by enabling them to download individual songs either directly from
our website or from the artist’s own website. The Aggregator interface allows
small- to medium-sized record labels with a music catalogue of at least 50
tracks who wish to sell their tracks via an online downloading store with
e-commerce, tracking, reporting and billing functions built in. The interface
can be operated as a stand-alone website, or can be integrated into the client’s
existing website. For our Bespoke interface, we hire independent web designers
to create specialized interfaces for particular clients with unique needs and
requirements quickly and cheaply. Finally, our PlayBOX Jukebox interface
provides music listeners with a unique way to listen to their music and to
manage their music collections visually on their personal computer. The PlayBOX
Jukebox also lets users submit their personal ratings of the music they have
stored on the Jukebox, and the Jukebox can even recommend other music that will
match the user’s taste.
We have
completed the development of the PlayBOX online music application. However, we
have only commenced the process of commercializing our technology and we have
had very minimal sales to date. While we have achieved initial sales, these
sales cannot be viewed as significant in relation to our operating expenses.
Accordingly, we are in the early development stage of our business. Further, we
will require additional financing in order to complete commercialization of our
PlayBOX online music application. As a result of our limited financing, our
operations during the past year have been scaled back to reflect our limited
financial resources. Accordingly, we have not advanced our business to the
extent that we had planned during the past year.
Intellectual
Property Asset Purchase Agreement
On March
31, 2006, we acquired the intellectual property rights to the PlayBOX online
music application from PlayBOX Inc. in accordance with the terms and provisions
of the Intellectual Property Asset Purchase Agreement for total consideration of
the issuance of 10,000,000 shares of our restricted common stock. Concurrent
with the completion of this acquisition, PlayBOX Inc. transferred the 10,000,000
shares of our common stock to Keydata Technology as part of its arrangement to
re-acquire the intellectual property rights to the PlayBOX online music
application from Keydata Technology. Keydata Technology is a limited liability
partnership that was at arm’s length to PlayBOX Inc.
Jabeco
Inc.
On
November 25, 2008, we entered into a five-year consulting agreement (the
“Consulting Agreement”) with Jabeco Inc., a music industry consulting firm
located in the Commonwealth of Dominica (“Jabeco”). In accordance with the terms
and provisions of the Consulting Agreement: (i) Jabeco shall provide consulting
services to us in the area of securing music content from Asia in the form of
music video content, music distribution technology, music distribution through
Asian channels and portals both online and on mobile networks, and other
directly related advisory services; and (ii) we shall issue to Jabeco 9,000,000
shares of our restricted common stock.
RESULTS
OF OPERATION
We are a
development stage company and have not generated any revenue to date. We have
incurred recurring losses to date. Our financial statements have been prepared
assuming that we will continue as a going concern and, accordingly, do not
include adjustments relating to the recoverability and realization of assets and
classification of liabilities that might be necessary should we be unable to
continue in operation. We expect we will require additional capital to meet our
long term operating requirements. We expect to raise additional capital through,
among other things, the sale of equity or debt securities.
The
summarized financial data set forth in the table below is derived from and
should be read in conjunction with our unaudited financial statements for the
six month period ended March 31, 2009 and March 31, 2008, including the notes to
those financial statements which are included in this Quarterly Report. The
following discussion contains forward-looking statements that reflect our plans,
estimates and beliefs. Our actual results could differ materially from those
discussed in the forward looking statements. Our audited financial statements
are stated in United States Dollars and are prepared in accordance with United
States Generally Accepted Accounting Principles.
The
following table sets forth selected financial information for the periods
indicated.
|
|
|
|
|
|
Cumulative
|
|
|
|
From
|
|
|
|
|
|
|
Incorporation
|
|
|
For
the Six Months Ended
|
|
For
the Six Months Ended
|
|
May
2, 2003 to
|
|
|
March
31, 2009
|
|
March
31, 2008
|
|
March
31, 2009
|
General
and Administrative Expenses
|
|
|
|
|
|
|
Accounting
and auditing
|
|
4,125
|
|
31,583
|
|
270,383
|
Bank
Charges
|
|
85
|
|
663
|
|
2,019
|
Consulting
fees
|
|
360,000
|
|
110,604
|
|
627,004
|
Depreciation
|
|
-
|
|
|
|
1,887
|
Development
|
|
-
|
|
199,540
|
|
228,692
|
Filing
fees
|
|
3,020
|
|
1,520
|
|
13,062
|
Intellectual
properties
|
|
-
|
|
-
|
|
2,500,000
|
Investor
relations
|
|
-
|
|
-
|
|
18,000
|
Legal
|
|
11,197
|
|
25,190
|
|
132,225
|
Marketing
|
|
-
|
|
-
|
|
38,838
|
Office
& Miscellaneous
|
|
-
|
|
-
|
|
13,990
|
Salaries
& Benefits
|
|
360,000
|
|
29,340
|
|
574,811
|
Transfer
agent fees
|
|
1,816
|
|
130
|
|
6,625
|
Travel
& Entertainment
|
|
-
|
|
-
|
|
4,038
|
Total
General and Administrative Expenses
|
|
740,244
|
|
398,570
|
|
4,431,574
|
|
|
(740,244)
|
|
(398,570)
|
|
(4,431,574)
|
Income
(loss) from Continuing Operations
|
|
Income
(loss) from Discontinued Operations
|
|
-
|
|
(8,519)
|
|
(61,924)
|
Other
Income (Expense)
|
|
|
|
|
|
|
Foreign
exchange gain (loss)
|
|
-
|
|
2,918
|
|
(7,786)
|
Interest
income
|
|
-
|
|
0
|
|
881
|
Loss
for the period
|
$
|
(740,244)
|
|
(404,171)
|
$
|
(4,500,404)
|
|
|
|
|
|
|
|
Comprehensive
Loss
|
|
|
|
|
|
Net
Loss
|
(740,244)
|
|
(404,171)
|
|
(4,500,404)
|
Gain
(loss) on foreign exchange translation
|
43,569
|
|
1,913
|
|
49,416
|
Total
Comprehensive Loss
|
|
(696,675)
|
|
(402,258)
|
|
(4,450,988)
|
We have
incurred recurring losses to date. Our financial statements have been prepared
assuming that we will continue as a going concern and, accordingly, do not
include adjustments relating to the recoverability and realization of assets and
classification of liabilities that might be necessary should we be unable to
continue in operation.
We expect
we will require additional capital to meet our long term operating requirements.
We expect to raise additional capital through, among other things, the sale of
equity or debt securities.
Six
Month Period Ended March 31, 2009 Compared to Six Month Period Ended March 31,
2008.
Our
comprehensive loss for the six month period ended March 31, 2009 was ($696,675)
compared to a comprehensive loss of ($402,258) during the six month period ended
March 31, 2008 (an increase of $294,417). During the six month periods ended
March 31, 2009 and March 31, 2008, we did not generate any revenue.
During
the six month period ended March 31, 2009, we incurred general and
administrative expenses of $740,244 compared to $398,570 incurred during the six
month period ended March 31, 2008 (an increase of $341,674). This resulted in a
loss from continuing operations during the six month period ended March 31, 2009
of ($740,244) and a loss from continuing operations during the six month period
ended March 31, 2008 of ($398,570). These general and administrative expenses
incurred during the six month period ended March 31, 2009 consisted of: (i)
accounting and auditing of $4,125 (2008: $31,583); (ii) bank charges of $85
(2008: $663); (iii) consulting fees of $360,000 (2008: $110,604); (iv)
development of $-0- (2008: $199,540); (v) filing fees of $3,020 (2008: $1,520);
(vi) legal of $11,197 (2008: $25,190); (vii) salaries and benefits of $360,000
(2008: $29,340); and (viii) transfer agent fees of $1,816 (2008:
$130).
Expenses
incurred during the six month period ended March 31, 2009 compared to the six
month period ended March 31, 2008 increased primarily due to the increase in
consulting fees and salaries and benefits. On March 28, 2008, we had entered
into a Share Purchase Agreement (the “Agreement”) for the proposed acquisition
of U.K based Delta Music Limited (“Delta Music”). Under the terms of the
Agreement, we agreed to pay one hundred thousand British pounds (GBP 100,000) to
the attorneys of the sellers to fund certain expenses to be incurred by the
sellers and Delta Music in connection with completion of the acquisition.
Therefore, the increase in expenses in the current period for the consulting and
salaries were offset by the development fees of GBP 100,000 in the prior year.
General and administrative expenses generally include corporate overhead,
financial and administrative contracted services, marketing, and consulting
costs.
Loss from
continuing operations of ($740,244) during the six month period ended March 31,
2009 was decreased by the recording of $43,569 as foreign exchange translation
gain resulting in a comprehensive loss for the period of ($696,675). Loss from
continuing operations of ($398,570) during the six month period ended March 31,
2008 was decreased by the recording of $2,918 as foreign exchange gain and
$1,913 as foreign exchange translation gain, and increased by ($8,519) as loss
from discontinued operations.
Our
comprehensive loss during the six month period ended March 31, 2009 was
($696,675) compared to a comprehensive loss of ($402,258) incurred during the
six month period ended March 31, 2008. The weighted average number of shares
outstanding was 48,147,138 for the six month period ended March 31, 2009
compared to 28,845,139 for the six month period ended March 31,
2008.
Three
Month Period Ended March 31, 2009 Compared to Three Month Period Ended March 31,
2008.
During
the three month periods ended March 31, 2009 and March 31, 2008, we did not
generate any revenue. Our comprehensive loss for the three month period ended
March 31, 2009 was ($3,567) compared to a comprehensive loss of ($333,873)
during the three month period ended March 31, 2008 (a decrease of
($330,306).
During
the three month period ended March 31, 2009, we incurred general and
administrative expenses of $7,116 compared to $323,751 incurred during the three
month period ended March 31, 2008 (a decrease of $316,635). This resulted in a
loss from continuing operations during the three month period ended March 31,
2009 of ($7,116) and a loss from continuing operations during the three month
period ended March 31, 2008 of ($323,751). These general and administrative
expenses incurred during the three month period ended March 31, 2009 consisted
of: (i) accounting and auditing of $2,625 (2008: $9,553); (ii) bank charges of
$23 (2008: $436); (iii) consulting fees of $79,927 (2008: $360,000); (iv)
development of $-0- (2008: $199,540); (v) filing fees of $3,020 (2008: $1,520);
(vi) legal of $1,447 (2008: $7,467); (vii) salaries and benefits of $-0- (2008:
$25,179); and (viii) transfer agent fees of $-0- (2008: $130).
Expenses
incurred during the three month period ended March 31, 2009 compared to the
three month period ended March 31, 2008 decreased primarily due to the decrease
in development, consulting fees, legal and salaries and benefits.
Loss from
continuing operations of ($7,116) during the three month period ended March 31,
2009 was decreased by the recording of $3,548 as foreign exchange translation
gain resulting in a comprehensive loss for the period of ($3,567). Loss from
continuing operations of ($323,751) during the three month period ended March
31, 2008 was increased by the recording of ($4,185) in loss from discontinued
operations and ($10,160) in loss on foreign exchange translation and decreased
by $4,223 in foreign exchange gain, resulting in a comprehensive loss for the
period of ($333,873).
Our
comprehensive loss during the three month period ended March 31, 2009 was
($3,567) compared to a comprehensive loss of ($333,873) incurred during the
three month period ended March 31, 20078. The weighted average number of shares
outstanding was 54,186,299 for the three month period ended March 31, 2009
compared to 28,845,139 for the three month period ended March 31,
2008.
LIQUIDITY
AND CAPITAL RESOURCES
Six
Month Period Ended March 31, 2009
As at the
six month period ended March 31, 2009, our current assets were $6,522 and our
current liabilities were $312,716, which resulted in a working capital deficit
of ($306,194). As at the six month period ended March 31, 2009, current assets
were comprised of $382 in cash. As at the six month period ended March 31, 2009,
current liabilities were comprised of: (i) $53,878 in accounts payable; (ii)
$2,250 in accrued liabilities; (iii) $50,231 due to related parties; and (iv)
$142,140 in amounts owning pursuant to agreement for acquisition of Delta
Music. See “Material Commitments – Delta Music Limited.”
As at the
six month period ended March 31, 2009, our total assets were $382 comprised
entirely of cash. As at the six month period ended March 31, 2009,
our total liabilities were $312,716 comprised entirely of current liabilities.
The decrease in liabilities during the six month period ended March 31, 2009
from fiscal year ended September 30, 2008 was primarily due to the decrease in
amounts due to related parties.
Stockholders’
equity (deficit) decreased from ($617,439) for fiscal year ended September 30,
2008 to ($06,194) for the six month period ended March 31, 2009.
Cash
Flows from Operating Activities
We have
not generated positive cash flows from operating activities. For the six month
period ended March 31, 2009, net cash flows used in operating activities was
($18,262) consisting primarily of a net loss of ($740,244). During the six month
period ended March 31, 2009, net cash flows used in operating activities was
adjusted by items not requiring the use of cash for shares issued for consulting
services of $360,000 and shares issued for directors’ salaries of $360,000. Net
cash flows used in operating activities was further changed by $4,242 for
accounts payable and ($2,250) for accrued liabilities.
For the
six month period ended March 31, 2008, net cash flows used in operating
activities was ($78,888) consisting primarily of a net loss of ($404,171).
During the six month period ended March 31, 2008, net cash flows used in
operating activities was adjusted by items not requiring the use of cash for
shares issued for consulting services. Net cash flows used in operating
activities was further changed by $42,773 for accounts payable, ($841) for
accrued liabilities, ($369) for effects of accounts receivables in discontinued
operation, ($322) for effects of accounts payable in discontinued operation,
$7,869 for effects of accrued liabilities in discontinued operations, and
$26,633 for effects of amounts owing to related parties in discontinued
operations.
Cash
Flows from Investing Activities
For the
six month periods ended March 31, 2009 and March 31, 2008, net cash flows used
in investing activities was $-0-.
Cash
Flows from Financing Activities
We have
financed our operations primarily from either advancements or the issuance of
equity and debt instruments. For the six month period ended March 31, 2009, net
cash flows from financing activities was $14,335 compared to net cash flows from
financing activities of $75,211 for the six month period ended March 31, 2008.
Cash flows used by financing activities for the six month period ended March 31,
2009 consisted of $14,335 due to related party. Cash flows provided by financing
activities for the six month period ended March 31, 2008 consisted of $42,501
due to related parties, $12.,710 for loan payable and $20,000 for share
issuances for cash.
We expect
that working capital requirements will continue to be funded through a
combination of our existing funds and further issuances of securities and debt
instruments. Our working capital requirements are expected to increase in line
with the growth of our business.
PLAN
OF OPERATION AND FUNDING
We
estimate that our total expenditures over the next twelve months will be
approximately $175,000. We anticipate that our cash and working capital will not
be sufficient to enable us to undertake our plan of operations over the next
twelve months without our obtaining additional financing. We presently require
immediate financing in order that we have the cash necessary for us to continue
our operations. In view of our working capital deficit, we anticipate that we
will require additional financing in the approximate amount of $500,000 in order
to enable us to sustain our operations for the next twelve months.
Our plan
of operations is to commercialize and generate revenues from our PlayBOX online
music application. We have targeted unsigned music acts and small- to
medium-sized record labels as the potential customer base for the PlayBOX music
application. The PlayBOX music application is able to provide artists and
content owners with a range of services which incorporate the latest MP3 and
Windows Multimedia music formats. We also offer a number of services to
supplement these interfaces such as hosting, streaming, e-commerce and digital
rights management (DRM). We pool these services together to offer potential
customers a cost-effective and professional platform on which to sell and
promote their music products.
Our plan
of operations for the next twelve months is to complete the following objectives
within the time periods and budgets specified:
1.
|
We
plan to carry out sales and marketing of our PlayBOX online music service
with the objective of securing sales of our White Label interface to music
artists and our Aggregator interface to record labels. Our Bespoke
interfaces will be targeted predominantly towards companies involved in
the music industry. We plan to undertake a number of marketing and
promotional campaigns over the next 12 months with the objective of
establishing sales momentum. We estimate $7,000 per month will be spent on
our proposed marketing campaigns and promotions in that 12-month period,
for anticipated total annual expenditures of $84,000.
|
|
|
2.
|
We
anticipate spending approximately $10,000 over the next 12 months to
various third parties to run our PlayBOX service. These parties’ elements
are: (i) dedicated server through Open Hosting Ltd., (ii) ePDQ payment
interface, provided by Barclaycard UK, (iii) Digital Rights Management
Interface, provided by IFDNRG Ltd., (iv) the administration of these
elements in the PlayBOX system.
|
|
|
3.
|
We
anticipate spending approximately $17,000 over the next twelve months in
continuing the upgrading, development and design of our PlayBOX
system.
|
|
|
4.
|
We
anticipate spending approximately $2,000 in ongoing general and
administrative expenses per month for the next twelve months, for a total
anticipated expenditure of $24,000 over the next twelve months. The
general and administrative expenses for the year will consist primarily of
rent and office services, technical support and hosting services and
general office expenses.
|
|
|
5.
|
We
anticipate spending approximately $40,000 in complying with our
obligations as a reporting company under the Securities Exchange Act of
1934, as amended. These expenses will consist primarily of professional
fees relating to the preparation of our financial statements and
completing our annual report, quarterly report, current report and proxy
statement filings with the Securities and Exchange
Commission.
|
We
anticipate continuing to rely on equity sales of our common shares in order to
continue to fund our business operations. Issuances of additional shares will
result in dilution to our existing stockholders. We believe that debt financing
will not be an alternative for funding of our planned activities as we do not
have tangible assets to secure any debt financing.
We have
not entered into any financing agreements and we cannot provide investors with
any assurance that any financing we obtain will be sufficient to fund our plan
of operations. At this time, all potential investors and all discussions are
taking place outside of the United States. We may also seek to obtain additional
financing from our principal shareholders, although none of our shareholders
have committed to advance any shareholder loans to us. In the absence of such
financing, we may not be able to continue our plan of operations beyond the next
few months and our business plan will fail. If we do not continue to obtain
additional financing, we will be forced to abandon our plan of operations and
our business activities.
MATERIAL
COMMITMENTS
As of the
date of this Quarterly Report, we do not have any material commitments other
than as disclosed below:
Delta
Music Limited
On March
28, 2008, we entered into a share purchase agreement (the “Share Purchase
Agreement”) with Laurence Adams and Jacqueline Adams (the “Sellers”) for the
proposed acquisition of UK based Delta Music. The acquisition would have been
effected through the acquisition from the Sellers of 100% of the total issued
and outstanding shares of Delta Leisure, a private company that owned 75%
interest of the total issued and outstanding shares of Delta Music, and 25% of
the share capital of Delta Music. The consideration for the acquisition would
have been a combination of cash and shares of our common stock, as follows: (i)
cash of 1,400,000 Pounds Sterling payable on closing of the acquisition, and
(ii) a number of shares of our common stock equal to 10% of our common stock, on
a fully diluted basis, to be issued on closing of the acquisition.
The
completion of the acquisition was subject to the satisfaction of certain
conditions precedent to closing set forth in the Share Purchase Agreement by no
later than June 30, 2008. These conditions included the following in addition to
customary conditions of closing: (i) the completion by us of a private placement
financing to raise gross proceeds of no less than $4,000,000, and (ii) the
delivery to us of financial statements of Delta Music and Delta Leisure as
required to enable us to satisfy our reporting obligations under the Securities
Exchange Act of 1934 arising as a result of the completion of the
acquisition.
On July
2, 2008, we received notice of termination from the Sellers of termination of
the Share Purchase Agreement. The terms of the Share Purchase Agreement provided
that either party could terminate if the acquisition contemplated thereunder had
not occurred prior to June 30, 2008. Therefore, as of the date of this Quarterly
Report, the Share Purchase Agreement is deemed terminated.
However,
under the terms of the Share Purchase Agreement, we agreed to pay up to GBP
$100,000 as of September 30, 2008 to the attorneys of the Sellers to fund
certain expenses to be incurred by the Sellers and Delta Music in connection
with the acquisition regardless of whether or not the acquisition was completed.
As of December 31, 2008, the amount has not been paid. See “ – Unresolved SEC
Staff Comments.”
Unresolved
SEC Staff Comments
We
received a comment letter from the Securities and Exchange Commission dated
December 11, 2008 (the “2008 SEC Comment Letter”) pertaining to the Share
Purchase Agreement and our agreement to pay GBP $100,000 to the attorneys of the
Sellers to fund certain expenses to be incurred by the Sellers and Delta Music.
The comments pertained to the disclosure in our Current Report on Form 8-K filed
on December 8, 2008. On February 3, 2009, we filed an amended Current Report on
Form 8-K regarding “Item 4.02 Non-reliance on Previously Issued Financial
Statements or a Related Audit Report or Completed Interim Review” and a
subsequent amendment no. 2 to the Current Report on Form 8-K on February 16,
2009. We received a further comment letter from the Securities and Exchange
Commission dated April 7, 2009 (the “2009 SEC Comment Letter”) pertaining to our
Annual Report on Form 10-K for fiscal year ended September 30, 2008 and our
Quarterly Report on Form 10-Q for quarter ended December 31, 2008. As of the
date of this Quarterly Report, we have filed an amendment to our Quarterly
Report on Form 10-Q for the Quarter ended June 30, 2008 but have not yet filed
our Annual Report on Form 10-K for fiscal year ended September 30, 2008 and our
Quarterly Reports on Form 10-Q for the Quarter ended March 31, 2008 or December
31, 2008.
PURCHASE
OF SIGNIFICANT EQUIPMENT
We do not
intend to purchase any significant equipment during the next twelve
months.
OFF-BALANCE
SHEET ARRANGEMENTS
As of the
date of this Quarterly Report, we do not have any off-balance sheet arrangements
that have or are reasonably likely to have a current or future effect on our
financial condition, changes in financial condition, revenues or expenses,
results of operations, liquidity, capital expenditures or capital resources that
are material to investors.
GOING
CONCERN
The
independent auditors' report accompanying our September 30, 2008 and September
30, 2007 financial statements contains an explanatory paragraph expressing
substantial doubt about our ability to continue as a going concern. The
financial statements have been prepared "assuming that we will continue as a
going concern," which contemplates that we will realize our assets and satisfy
our liabilities and commitments in the ordinary course of business.
ITEM
III. Q
UA
NTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK.
Market
risk represents the risk of loss that may impact our financial position, results
of operations or cash flows due to adverse change in foreign currency and
interest rates.
Market
risk represents the risk of loss that may impact our financial position, results
of operations or cash flows due to adverse change in foreign currency and
interest rates.
EXCHANGE
RATE
Our
reporting currency is United States Dollars (“USD”). The British Pound has
been pegged to the USD with regards to the exchange rate system. Exchange rate
fluctuations may have a material impact on our consolidated financial reporting
and make realistic revenue projections difficult. Recently the British Pund
rose in value compared to the USD. This has not had an appreciable effect on our
operations and seems unlikely to do so.
The
exchange rate of the British Pound or other foreign currency may have positive
or negative impacts on our results of operations. Since all proposed
future sale revenues and expenses may be dominated in the British Pound or other
foreign currency, the net income effect of appreciation and devaluation of such
currency against the USD may be limited to our net operating
results.
INTEREST
RATES
Interest
rates in the United Kingdom are relatively low and stable and inflation is
controlled, due to the habit of the population to deposit and save money in the
banks (among with other reasons, such as the balance of trade surplus). Any
potential loans may relate mainly to trade payables and may be mainly
short-term. However our debt may be likely to rise in connection with
expansion and were interest rates to rise at the same time, this could become a
significant impact on our operating and financing activities.
We have
not entered into derivative contracts either to hedge existing risks or for
speculative purposes.
ITEM
IV
. CONTROLS AND PROCEDURES
FINANCIAL
DISCLOSURE CONTROLS AND PROCEDURES
“We
maintain "disclosure controls and procedures," as such term is defined in Rule
13a-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act"), that
are designed to ensure that information required to be disclosed in our Exchange
Act reports is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commission rules and forms, and
that such information is accumulated and communicated to our management,
including our Chief Executive Officer/Chief Financial Officer, as appropriate,
to allow timely decisions regarding required disclosure.
We
conducted an evaluation (the "Evaluation"), under the supervision and with the
participation of our Chief Executive Officer/Chief Financial Officer of the
effectiveness of the design and operation of our disclosure controls and
procedures ("Disclosure Controls") as of the end of the period covered by this
report pursuant to Rule 13a-15 of the Exchange Act. The evaluation of our
disclosure controls and procedures included a review of the disclosure controls’
and procedures’ objectives, design, implementation and the effect of the
controls and procedures on the information generated for use in this report. In
the course of our evaluation, we sought to identify data errors, control
problems or acts of fraud and to confirm the appropriate corrective actions, if
any, including process improvements, were being undertaken. Our Chief Executive
Officer/Chief Financial Officer concluded that, as of the end of the period
covered by this report, our disclosure controls and procedures were ineffective
and not operating at the reasonable assurance level.
Specifically,
we have noted the following material weaknesses and significant deficiencies in
our internal controls over financial reporting and disclosure:
·
|
we
do not have sufficient segregation of
duties;
|
·
|
we
do not have sufficient documentation for accounting or business
transactions;
|
·
|
we
have noted material weaknesses in the authorization and posting of general
ledger transactions, particularly those related to accruing liabilities
resulting from contractual commitments;
and
|
·
|
we
do not have an Audit Committee;
|
It is our
responsibility and that of our management to identify any deficiencies in
internal controls over financial reporting. We discovered certain deficiencies
in our internal control over financial reports, which resulted in the
restatement of our balance sheets and our statements of operations and
statements of stockholders’ equity at March 31, 2008 and June 30, 2008 to
properly reflect an obligation.
The
restatement was undertaken to properly reflect an obligation after further
consultation with our independent auditors. As a result of the
restatements of our financial statements, we have determined that such
significant deficiency did rise to the level of a material weakness in our
internal control over financial reporting.
However,
we have implemented measures as part of our internal controls to determine and
ensure that information required to be disclosed in reports filed under the
Exchange Act are recorded, processed, summarized and reported within the time
periods specified in the rules and forms including, but not limited to, the
following: (i) documentation of processes, performing testing and reviewing our
internal control over financial reporting in connection with our assessment
under Section 404 of the Sarbanes-Oxley Act; (ii) evaluation and implementation
of improvements to our accounting and management information systems; and (iii)
development and implementation of a remediation plan to address any perceived
deficiencies identified in our internal control over financial reporting. The
costs of these additional measures did not have a material impact on our future
results or operations liquidity.
PART
II. OTHER INFORMATION
ITEM
1. LE
G
AL PROCEEDINGS
Consumer
Protection Corporation vs. Playbox (US) Inc. – Consumer Protection Corporation
(CPP), an Arizona corporation, alleges that we and several other defendants
engaged in a unsolicited fax campaign to promote our stock. CPP claims to have
suffered damages resulting from being a recipient of one of the faxes. We have
denied any knowledge or involvement in the campaign. The other defendants have
already settled with the plaintiff and we are in the process of negotiating a
no-cost settlement with the plaintiff. We believe the likelihood of an
unfavorable outcome is remote and the range of potential loss is
immaterial
Management
is not aware of any other legal proceedings contemplated by any governmental
authority or any other party involving us or our properties. As of the date of
this Quarterly Report, no director, officer or affiliate is (i) a party adverse
to us in any legal proceeding, or (ii) has an adverse interest to us in any
legal proceedings. Management is not aware of any other legal proceedings
pending or that have been threatened against us or our properties.
ITEM
2.
CHANGES IN SECURITIES AND USE OF PROCEEDS
As of the
date of this Quarterly Report and during the three month period ended December
31, 2008, to reduce our debt as well as compensate a director and consultant, we
issued stock in private placement offerings pursuant to contractual agreements
as set forth below.
MALONEY
SETTLEMENT AGREEMENT
On
October 15, 2008, we entered into a settlement agreement (the “Maloney
Settlement Agreement”) with Henry C. Maloney, our prior officer and sole
director (“Maloney”). In accordance with the terms and provisions of the
Settlement Agreement: (i) we issued 700,000 shares of our restricted common
stock; and (ii) Maloney agreed to accept the issuance of the 700,000 shares our
restricted common stock in consideration of settling and relating any debt due
and owing by us to Maloney for his services as an officer and a director. The
shares of stock were issued in reliance on Regulation S promulgated under the
United States Securities Act of 1933, as amended (the “Securities Act”). The
shares of stock have not been registered under the Securities Act or under any
state securities laws and may not be offered or sold without registration with
the United States Securities and Exchange Commission or an applicable exemption
from the registration requirements. The per share price was arbitrarily
determined by our Board of Directors based upon analysis of certain factors
including, but not limited to, stage of development and exploration of
properties, industry status, investment climate, perceived investment risks, our
assets and net estimated worth.
DIRECTOR
SERVICE AGREEMENT
On
November 14, 2008, we entered into a director service agreement (the “Director
Service Agreement) with Gideon Jung, our sole director and President/Chief
Executive Officer, Chief Financial Officer/Treasurer and Secretary. In
accordance with the terms and provisions of the Director Service Agreement: (i)
Mr. Jung consented to his appointment as the President/Chief Executive Officer,
Chief Financial Officer/Treasurer for a three-year period; and (ii) we agreed to
issue Mr. Jung 7,200,000 shares of our restricted common stock in consideration
of his appointment. The shares of stock were issued in reliance on Regulation S
promulgated under the Securities Act. The shares of stock have not been
registered under the Securities Act or under any state securities laws and may
not be offered or sold without registration with the United States Securities
and Exchange Commission or an applicable exemption from the registration
requirements. The per share price was arbitrarily determined by our Board of
Directors based upon analysis of certain factors including, but not limited to,
stage of development and exploration of properties, industry status, investment
climate, perceived investment risks, our assets and net estimated
worth.
JABECO
CONSULTING AGREEMENT
On
November 25, 2008, we entered into the Consulting Agreement Jabeco. In
accordance with the terms and provisions of the Consulting Agreement: (i) Jabeco
shall provide consulting services to us in the area of securing music content
from Asia in the form of music video content, music distribution technology,
music distribution through Asian channels and portals both online and on mobile
networks, and other directly related advisory services; and (ii) we shall issue
to Jabeco 9,000,000 shares of our restricted common stock. The shares of stock
were issued in reliance on Regulation S promulgated under the Securities Act.
The shares of stock have not been registered under the Securities Act or under
any state securities laws and may not be offered or sold without registration
with the United States Securities and Exchange Commission or an applicable
exemption from the registration requirements. The per share price was
arbitrarily determined by our Board of Directors based upon analysis of certain
factors including, but not limited to, stage of development and exploration of
properties, industry status, investment climate, perceived investment risks, our
assets and net estimated worth.
DEBONDO SETTLEMENT AGREEMENT
On
November 19, 2008, we entered into a settlement agreement and general mutual
release (the “Debondo Settlement Agreement”) with Debondo Capital Inc., a
corporation incorporated in London, England (“Debondo”). In accordance with the
terms and provisions of the Debondo Settlement Agreement: (i) we issued to
Debondo an aggregate of 5,623,006 shares of our restricted common stock; and
(ii) Debondo agreed to accept the issuance of the 5,623,006 shares of our
restricted common stock in consideration of settling and releasing the debt due
and owing by us to Debondo of $224,920.24. We had previously entered into a
consulting services agreement on August 1, 2006 with Debondo pursuant to which
Debondo provided to us consulting and technical support services. At
September 30, 2008, the amount due and owing Debondo was $224,920.24. The shares
of stock were issued in reliance on Regulation S promulgated under the
Securities Act. The shares of stock have not been registered under the
Securities Act or under any state securities laws and may not be offered or sold
without registration with the United States Securities and Exchange Commission
or an applicable exemption from the registration requirements. The per share
price was arbitrarily determined by our Board of Directors based upon analysis
of certain factors including, but not limited to, stage of development and
exploration of properties, industry status, investment climate, perceived
investment risks, our assets and net estimated worth.
PRIVATE
OFFERING
Effective
on October 2, 2008, we completed a private placement offering (the “Private
Placement”) with a certain non-United States resident (the “Investor”). In
accordance with the terms and provisions of the Private Placement, we issued to
the Investor an aggregate of 2,000,000 shares of our restricted common stock at
a price of $0.05 per share for aggregate proceeds of $100,000.
The
shares under the Private Placement were sold to one non-United States Investor
in reliance on Regulation S promulgated under the United States Securities Act
of 1933, as amended (the “Securities Act”). The Private Placement has not been
registered under the Securities Act or under any state securities laws and may
not be offered or sold without registration with the United States Securities
and Exchange Commission or an applicable exemption from the registration
requirements. The per share price of the shares was arbitrarily determined by
our Board of Directors based upon analysis of certain factors including, but not
limited to, stage of development and exploration of properties, industry status,
investment climate, perceived investment risks, our assets and net estimated
worth. The Investor executed a subscription agreement and acknowledged that the
securities to be issued have not been registered under the Securities Act, that
he understood the economic risk of an investment in the securities, and that he
had the opportunity to ask questions of and receive answers from our management
concerning any and all matters related to acquisition of the
securities.
ITEM
3. DEF
A
ULTS UPON SENIOR SECURITIES
No report
required.
ITEM
4. SUB
MI
SSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
No report
required.
ITE
M
5. OTHER INFORMATION
NON-RELIANCE
ON PREVIOUSLY ISSUED FINANCIAL STATEMENTS OR A RELATED AUDIT REPORT OR COMPLETED
INTERIM REVIEW
2008
SEC Comment Letter
We
received a comment letter from the Securities and Exchange Commission dated
December 11, 2008 (the “2008 SEC Comment Letter”) pertaining to the Share
Purchase Agreement and our agreement to pay $181,750 ($100,000 GBP) to the
attorneys of the Sellers to fund certain expenses to be incurred by the Sellers
and Delta Music. The comments pertained to the disclosure in our Current Report
on Form 8-K filed on December 8, 2008. On February 3, 2009, we filed an amended
Current Report on Form 8-K regarding “Item 4.02 Non-reliance on Previously
Issued Financial Statements or a Related Audit Report or Completed Interim
Review.”
On
December 4, 2008, our President, Chief Financial Officer and sole director
concluded that the previously reported consolidated financial statements in our
Quarterly Report on Form 10-Q for the period ended June 30, 2008 filed with the
Securities & Exchange Commission (“SEC”) on August 19, 2008 should no longer
be relied upon.
After
further consideration initiated by a comment letter from the SEC dated December
11, 2008, our President, Chief Financial Officer and sole director concluded on
January 30, 2009 that the consolidated financial statements in our Quarterly
Form 10-Q for the period ended March 31, 2008 filed with the SEC on May 15, 2008
should also no longer be relied upon.
The
affects of the restatement are as follows:
·
|
Amend
the Balance Sheet to increase current liabilities by GBP
100,000
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·
|
Amend
the Income Statement to increase expenses for “Development Fees” by GBP
100,000
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·
|
Amend
the Statement of Cash Flows and Shareholders’ Equity to reflect the above
changes
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All of
the foregoing was discussed with Moore & Associates, our independent
registered public accounting firm. As of the date of this Quarterly Report, we
anticipate filing corrected financial information for the aforementioned periods
within thirty days. However, the time required to complete the restatements
cannot be stated with certainty at this time and will depend, in part, upon
completion of Moore & Associates’ review of the restatements. Until we have
reissued the restated results for the aforementioned periods, investors and
other users of our filings with the SEC are cautioned not to rely on the
financial statements in question, to the extent that they are affected by the
accounting issues described above.
2009
SEC Comment Letter
In
furtherance of the 2008 SEC Comment Letter, we received a comment letter from
the Securities and Exchange Commission dated April 7, 2009 (the “2009 SEC
Comment Letter”) pertaining to assessment of our internal controls and
procedures in our Annual Report on Form 10-K for fiscal year ended September 30,
2008 and the financial statements in our Quarterly Report on Form 10-Q for the
quarter ended December 31, 2008. As of the date of this Quarterly Report, we
anticipate filing an amendment to our Annual Report on Form 10-K for fiscal year
ended September 30, 2008 and our Quarterly Report on Form 10-Q for period ended
December 31, 2008 within the following two weeks.
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Exhibits:
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31.1
|
Certification
of Chief Executive Officer pursuant to Securities Exchange Act of 1934
Rule 13a-14(a) or 15d-14(a).
|
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31.2
|
Certification
of Chief Financial Officer pursuant to Securities Exchange Act of 1934
Rule
13a-14(a) or 15d-14(a).
|
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32.1
|
Certifications
pursuant to Securities Exchange Act of 1934 Rule 13a-14(b) or 15d-
14(b)
and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes- Oxley Act of 2002.
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SIGNATURES
In
accordance with the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
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PLAYBOX
(US) INC.
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Date:
May 18, 2009
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By:
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/s/
Gideon Jung
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Name:
Gideon Jung
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Title:
President and
Chief
Executive Officer
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Date: May
18, 2009
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By:
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/s/ Gideon
Jung
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Name: Gideon
Jung
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Title:
Chief Financial Officer
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