As filed with the Securities and Exchange
Commission on July 10, 2015
Registration No. 333-204570
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
AMENDMENT NO. 1 to
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933
ZONZIA MEDIA, INC.
(Exact name of registrant in its charter)
Nevada |
|
2741 |
|
84-0871427 |
(State or other Jurisdiction of |
|
(Primary Standard Industrial |
|
(I.R.S. Employer |
Incorporation or Organization) |
|
Classification Code Number) |
|
Identification No.) |
ZONZIA MEDIA, INC.
74 N. Pecos Road, Suite D
Henderson, NV 89074
(702) 463-8528
(Address and telephone number of principal
executive offices and principal place of business)
Stanley L. Teeple
74 N. Pecos Road, Suite D
Henderson, NV 89074
(702) 463-8528
(Name, address and telephone number of agent
for service)
With a copy to
Wilson & Oskam, LLP
Attention: Chris A. Wilson, Esq.
9110 Irvine Center Drive, Irvine, CA 92618
Approximate date of proposed sale to the
public: From time to time after this Registration Statement becomes effective.
If any securities being registered on this
Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities
offered only in connection with dividend or interest reinvestment plans, check the following box: x
If this Form is filed to register additional
securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement for the same offering. o
If this Form is a post-effective amendment
filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering. o
If this Form is a post-effective amendment
filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering. o
If delivery of the prospectus is expected
to be made pursuant to Rule 434, please check the following box. o
Indicate by a check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions
of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2
of the Exchange Act. (Check One)
Large Accelerated Filer o |
Accelerated Filer o |
Non-accelerated Filer o |
Smaller Reporting Company x |
CALCULATION OF REGISTRATION
FEE
Title of Each Class of Securities
To Be Registered |
|
Amount To Be Registered |
|
|
Proposed Maximum Offering Price Per Share |
|
|
Proposed Maximum
Aggregate Offering Price |
|
|
Amount
Of Registration Fee(4) |
|
Common Stock, $0.001 par value per share(1) for sale by Selling Stockholders |
|
|
43,131,591 |
|
|
$ |
0.17 |
(2) |
|
$ |
7,332,370 |
|
|
$ |
852.02 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock, $0.001 par value per share(1) for sale by our Company |
|
|
46,875,000 |
|
|
$ |
0.15 |
(3) |
|
$ |
7,031,250 |
|
|
$ |
817.03 |
|
TOTAL |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,669.05 |
|
_______________
(1) |
Pursuant to Rule 416 of the Securities Act, this registration statement also registers such additional shares of common stock as may become issuable to prevent dilution as a result of stock splits, stock dividends or similar transactions. |
(2) |
This represents a price that is calculated in accordance
with Rule 457(c) of the Securities Act of 1933 solely for the purpose of computing the amount of the registration fee. Our
common stock is not traded on a national exchange, but is traded as of the date of this prospectus on the OTCQB marketplace.
The offering price is based on the average of the bid and ask price of our common stock on that market on July 6, 2015. |
(3) |
The price at which securities are being offered by the Company. |
(4) |
Calculated in accordance with Rule 457(o) under the Securities
Act of 1933, as amended. A registration fee of $3,353.15 was previously paid. |
The registrant hereby amends this registration
statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment
which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange
Commission, acting pursuant to said Section 8(a), may determine.
SUBJECT TO COMPLETION, DATED July 10,
2015
The information
in this prospectus is not complete and may be changed. The selling stockholders may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these
securities and is not soliciting an offer to buy these securities in any state where the sale is
not permitted.
PROSPECTUS
ZONZIA MEDIA, INC.
This prospectus relates to the resale
of up to 43,131,591 shares of our common stock by selling stockholders referenced herein. These shares may be offered for sale
from time to time by the selling stockholders acting as principal for their own accounts or in brokerage transactions at prevailing
market prices or privately negotiated prices. The selling stockholders reserve the right to accept or reject, in whole or in part,
any proposed purchase of shares. Accordingly, the amount of any applicable underwriting discounts and commissions will be determined
at the time of such sale by the selling stockholders. See “Selling Stockholders” and “Plan of Distribution”
in this prospectus. We will pay all of the expenses incident to the registration of the shares offered under this prospectus,
except for sales commissions and other expenses of selling stockholders applicable to the sales of their shares.
This prospectus also relates to the direct
offering of up to 46,875,000 shares of our common stock, to be sold at the price of $0.15 per share, which was determined
by the Company’s Board of Directors based upon recent trading activity and reflects the size of offering the Company expects
to sell within two years from the initial effective date of registration. The offering does not require that we sell a minimum
number of shares; therefore not all of the shares may be sold. The proceeds from the sale of these shares will be available for
use by the company. However, the amount raised may be minimal and there is no assurance that we will be able to raise sufficient
amount to fund ongoing operations.
Our executive officers, as authorized
by the Board of Directors, may offer and sell the direct offering shares registered herein, with no commission or other remuneration
payable to such executive officers for any shares they may sell. In offering the securities on our behalf, our executive
officers will rely on the safe harbor from broker-dealer registration set forth in Rule 3a4-1 under the Securities Exchange Act
of 1934.
There is no established public trading
market for our common stock. The quotation of bid and ask prices of our common stock on the OTCQB marketplace under the symbol
“ZONX” does not constitute an established public trading market. At July 8, 2015, the closing bid price for one share
of our common stock was $0.15.
The offering will terminate on the earlier
of (i) the date when the selling stockholders have sold all of the 43,131,591 shares of common stock offered by them and
the company has sold all of the 46,875,000 shares of common stock offered by it; or (ii) when the Board of Directors decides it
is in the best interest of the Company to terminate the offering prior to the completion of the sale of all such shares.
An investment in our common stock is
speculative and involves a high degree of risk. Investors should carefully consider the risk factors and other uncertainties described
in this prospectus before purchasing our common stock. See “Risk Factors” beginning on page 6.
NEITHER THE SECURITIES AND EXCHANGE
COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS
IS TRUTHFUL, ACCURATE, OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is July
__, 2015
TABLE OF CONTENTS
Page No.
Note Regarding Forward-Looking Statements |
2 |
Prospectus Summary |
3 |
Risk Factors |
6 |
Market and Other Data |
13 |
Use of Proceeds |
13 |
Determination of Offering Price |
14 |
Market For Our Common Stock and Other Related Stockholder Matters |
14 |
Our Business |
16 |
Description of Properties |
25 |
Legal Proceedings |
25 |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
26 |
Directors and Executive Officers |
34 |
Executive Compensation |
41 |
Certain Relationships and Related Transactions, and Director Independence |
47 |
Security Ownership of Certain Beneficial Owners and Management |
49 |
Selling Stockholders |
50 |
Dilution |
52 |
Plan of Distribution |
53 |
Description of Securities |
55 |
Shares Eligible For Future Sale |
57 |
Legal Matters |
58 |
Experts |
58 |
Where You Can Find More Information |
58 |
Index to Financial Statements |
F-1 |
AVAILABLE INFORMATION
This prospectus constitutes
a part of a registration statement on Form S-1 (together with all amendments and exhibits thereto, the “Registration Statement”)
filed by us with the SEC under the Securities Act of 1933, as amended (the “Securities Act”). As permitted by the rules
and regulations of the SEC, this prospectus omits certain information contained in the Registration Statement, and reference is
made to the Registration Statement and related exhibits for further information with respect to Zonzia Media, Inc. and the securities
offered hereby. With regard to any statements contained herein concerning the provisions of any document filed as an exhibit to
the Registration Statement or otherwise filed with the SEC, in each instance reference is made to the copy of such document so
filed. Each such statement is qualified in its entirety by such reference.
Unless otherwise
specified, the information in this prospectus is set forth as of July 10, 2015, and we anticipate that changes in our affairs
will occur after such date. We have not authorized any person to give any information or to make any representations, other than
as contained in this prospectus, in connection with the offer contained in this prospectus. If any person gives you any information
or makes representations in connection with this offer, do not rely on it as information we have authorized. This prospectus is
not an offer to sell our common stock in any state or other jurisdiction to any person to whom it is unlawful to make such offer.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
All statements other than statements of
historical facts included or incorporated by reference in this report, including, without limitation, statements regarding our
future financial position and capital needs, business strategy, projected product development, budgets, projected revenues, projected
costs and plans and objectives of management for future operations, are forward-looking statements. Forward-looking statements
generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,”
“intend,” “project,” “estimate,” “anticipate,” or “believe” or the
negative thereof or any variation thereon or similar terminology.
Such forward-looking statements are made
based on management's beliefs, as well as assumptions made by, and information currently available to, management. Although we
believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations
will prove to have been correct. Such statements are not guarantees of future performance or events and are subject to known and
unknown risks and uncertainties that could cause the Company's actual results, events or financial positions to differ materially
from those included within the forward-looking statements. Important factors that could cause actual results to differ materially
from our expectations include, but are not limited to:
|
· |
future financial and operating results, including projections of sales, revenue, income, expenditures, liquidity, and other financial items; |
|
· |
our ability to develop relationships with new customers and maintain or improve existing customer relationships; |
|
· |
development of new products, brands and marketing strategies; |
|
· |
current or future revenue and revenue projections; |
|
· |
management’s goals and plans for future operations; |
|
· |
our ability to improve operational efficiencies, manage costs and business risks and improve or maintain profitability; |
|
· |
growth, expansion, diversification and acquisition strategies, the success of such strategies, and the benefits we believe can be derived from such strategies; |
|
· |
personnel; |
|
· |
the outcome of regulatory, tax and litigation matters; |
|
· |
overall industry and market performance; |
|
· |
effects of competition; and |
|
· |
other assumptions described in this report or underlying or relating to any forward looking statements. |
Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the date made. All subsequent written and oral forward-looking
statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by these cautionary statements.
Except as required by law, we undertake no obligation to disclose any revision to these forward-looking statements to reflect events
or circumstances after the date made, changes in internal estimates or expectations, or the occurrence of unanticipated events.
PROSPECTUS SUMMARY
This summary highlights information
contained elsewhere in this prospectus. Because this is only a summary, it does not contain all of the information that may be
important to you. You should read this entire prospectus and should consider, among other things, the matters set forth under “Risk
Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our
consolidated financial statements and related notes thereto appearing elsewhere in this prospectus before making your investment
decision.
Unless the context otherwise requires,
any reference to “the Company,” “we,” “us,” or, “our” refers to Zonzia Media, Inc.,
a Nevada corporation.
ZONZIA MEDIA, INC.
Our Business
Zonzia Media, Inc. is
a multi-platform entertainment company focused on delivering compelling, innovative content with the objective of
generating advertising revenue and subscription revenue. We plan to distribute content through three distinct platforms: 1)
Cable television; 2) Hotel in-room channel; and 3) our website Zonzia.com. Through on over-the-top platform, we plan to
allow instant access to our available content from the home, from any mobile device, and through any smart phone, tablet,
pad, or other internet connected device. Upon the full launch of all three of our delivery platforms, which is contingent
upon our receipt of adequate funding, we plan to deliver family friendly content and original programming entertainment
including:
| § | Original
Programming – featuring TV series, mini-series, full length films, short
films, and documentaries of all genres produced and directed by well-known individuals
within the entertainment industry as well as new up-and-comers. |
| § | Feature
Films – full-length feature films from major Hollywood studios and independent
films from established production companies. |
| § | Television
Shows – TV series from the major networks as well as originally developed
series from independent production companies exclusively available on the Zonzia delivery
platforms. |
| § | Concerts,
Sports and Live Events – streaming live music concerts, live sports
events, and other live entertainment events from around the world. |
Corporate History
We were originally incorporated in 1981
in the State of Nevada. Our principal executive offices are located at 74 N. Pecos Road, Suite D, Henderson, Nevada 89074,
and our telephone number at that location is (702) 463-8528. Our website address is www.zonziamedia.com. The information on our
website is not part of this prospectus.
Management
The management of Zonzia Media, Inc. includes:
Name |
|
Age |
|
Office |
Naresh Malik |
|
49 |
|
Chief Executive Officer |
Myles A. Pressey III |
|
58 |
|
Chairman of the Board and Chief Business Development Officer |
Lynwood A. Bibbens |
|
43 |
|
Chief Strategy Officer |
Johnathan F. Adair |
|
50 |
|
Chief Operating Officer |
Stanley L. Teeple |
|
63 |
|
Chief Compliance Officer |
Steven L. Sanders |
|
55 |
|
Director |
Frank McEnulty |
|
58 |
|
Chief Financial Officer |
Philip Fraley |
|
33 |
|
Director |
|
|
|
|
|
Advisory Board members: |
|
|
|
|
Scott Steiner |
|
|
|
|
Charles R. Dutton |
|
|
|
|
Our Growth Strategy
We are committed to establishing three
distinct distribution platforms for content, as described below. As the distribution platforms become established, we will seek
to generate advertising revenue from distributed content. We are currently focused on the following platforms to meet our distribution
objectives:
Cable Platform
| · | This
platform has already launched and is currently available in over 27 million households
in the Southeastern United States. |
| · | The
cable providers include Comcast, Dish Network, and Verizon FiOS. |
| · | We
have content on the Zonzia Video on Demand (VOD) Channel provided through a Channel Distribution
Agreement with simplyME Distribution LLC. |
| · | The
business model is to generate advertising revenue from users viewing our content through
our cable providers. |
| · | The
growth strategy for this distribution platform is to both enhance the quality of the
channel content and increase the total amount of content over time. |
| · | The
Company plans to use internet marketing, social media, and other advertising to drive
traffic to this channel. |
Hotel Network
| · | The
Company has an agreement with Sonifi Solutions, Inc. to provide Zonzia content to their
U.S. hotel clients via our hotel channels. Sonifi’s hotel clients include: |
| · | The
initial roll-out to approximately 450,000 hotel rooms is targeted for 3rd
quarter 2015 with the contract providing for expansion to 900,000 rooms. The 450,000
rooms will be provided via our Zonzia linear dedicated hotel channel while the 900,000
rooms are targeted for both our linear and Video On Demand (VOD) service. |
| · | The
revenue model contemplates payment by Zonzia of an advertising agency commission,
and sharing remaining revenue with content providers. |
| · | The
growth strategy is to increase the number of hotel rooms displaying content, and to provide
compelling content through both our content partners and eventually, our own original
content. |
Website: Zonzia.com
| · | The
webite, while up and operating, functions for now essentially as a placeholder for content
offerings to come. |
| · | Today,
a visit to the website shows trailers and teasers of content offering to come such as
the one-minute interviews from the Tribeca Film Festival. |
| · | The
Company is in negotiations for a number of original program offerings with various companies. |
| · | The
growth of the business model will target advertising revenue based upon the number of site
visits and subscription revenue based upon the number of subscribers acquired, both of
which are predicated upon the quality of the content. |
The Offering
This prospectus covers: (i) up to 43,131,591
shares of our common stock that may be offered for resale by the persons named in this prospectus under the heading “Selling
Stockholders”; and (ii) the direct offering of up to 46,875,000 shares of our common stock to be issued and sold by us at
a price of $0.15.
The 43,131,591 shares being offered
for resale include: (i) shares that were sold in private placements of our common stock; and (ii) shares to compensate our executives
and our consultants, and (iii) as consideration to extinguish debts and contractual payment obligations of the Company. We agreed
to file a registration statement with the U.S Securities and Exchange Commission providing for the resale of the shares sold to
accredited third party investors that are covered hereby.
In addition, this prospectus covers up
to 46,875,000 shares of common stock to be sold by the company at an offering price of $0.15 per share in a direct
public offering.
We note for potential investors that, pursuant
to this Registration Statement, some of the Company’s executive officers may sell shares they own personally, and will also
be seeking to sell shares of stock offered by the Company. This presents a conflict of interest in that each such executive officer
could be presented an opportunity to sell shares either personally or on behalf of the Company, to a given potential investor.
The Company’s management has considered this conflict and has resolved upon the following practices in effort to minimize
the practical effects of this conflict. In general, executive officers will make sales of shares they hold personally through their
individual brokers, and not as principal acting for their own accounts, and accordingly, will not directly solicit potential investors
with offers to sell stock they hold personally. In addition, the executive officers will prioritize any potential offers of sales
of significant amounts of stock, in amounts of $30,000 or higher, to be made on behalf of the Company and will not personally attempt,
in any event, to sell their own shares representing greater amounts to potential investors.
Offering Summary
Common Stock Offered by Zonzia Media, Inc. |
Up
to 46,875,000 shares, to be sold by the Company on a best-efforts basis with no minimum subscription requirement, at a purchase
price of $0.15 per share. |
|
|
Common Stock Offered by Selling Stockholders |
Up to 43,131,591 shares
of our common stock, all of which are being offered for resale by selling stockholders, including third party investors
and shares issued to our officers, employees and consultants.
|
Common Stock Outstanding
|
As of the date of this prospectus, there
are 226,822,131 shares issued and outstanding. If the direct offering is fully subscribed, there would be 273,697,131 shares issued
and outstanding.
|
Offering Price |
The price of the shares being
offered by us is $0.15 per share.
The shares being offered by selling stockholders
may be offered and sold from time to time at prevailing market prices or privately negotiated prices.
|
Termination of the Offering |
The offering will conclude when
the selling shareholders have sold all 43,131,591 shares of common stock offered by them and the company has sold
all of the 46,875,000 shares of common stock offered by it. The company may, in its sole discretion, decide
to terminate the registration of the shares offered by the company.
|
Use of Proceeds |
We intend to use the net proceeds from
the sale of shares by us to repay certain indebtedness and for working capital and other general corporate purposes to fund our
growth strategy. We may also use a portion of the net proceeds to acquire other businesses or technologies. We will not receive
any proceeds from shares sold by the selling stockholders. See “Use of Proceeds.”
|
Risk Factors |
An investment in our common stock is highly speculative and involves a high degree of risk. Investors should carefully consider the risk factors and other uncertainties described in this prospectus before purchasing our common stock. See “Risk Factors” beginning on page 6. |
|
|
Fees and Expenses |
We will pay all expenses incident to the registration of such shares, except for sales commissions and other expenses of selling stockholders. |
|
|
RISK FACTORS
An investment in our common stock involves
a high degree of risk. You should carefully consider the following risk factors in addition to other information in this prospectus,
including the financial statements and the related notes thereto, and in our other filings with the SEC before purchasing our common
stock. The risks and uncertainties described below are those that are currently deemed to be material and specific to our Company
and industry. If any of these risks actually occur, our business may be adversely affected, and you may lose all or part of your
investment.
Risks Related to Our Business and Industry
Our sole operation has experienced
a net loss since its inception in May 2014, and because it has a limited operating history, our ability to fully and successfully
develop our business is unknown.
We do not have a significant operating
history with which investors can evaluate its business. We have only generated de minimis click-through revenue and have
not fully launched our content delivery platforms while incurring expenses.
There is a risk that we may not be
able to successfully develop our content and attract customers on favorable terms necessary to realize consistent, meaningful
revenues and profit. For us to achieve success, our services must receive broad market acceptance by consumers. Without this market
acceptance, we will not be able to generate sufficient revenue to continue our business operation, and our business may fail.
Our ability to achieve and maintain profitability
and positive cash flow is dependent upon our ability to generate revenues, manage development costs and expenses and compete successfully
with our direct and indirect competitors.
Based on current plans, we expect to incur
operating losses in future periods. This will happen because there are expenses associated with the development, marketing and
provision of our services. As a result, we may not generate significant net income from operations in the future. Failure to generate
significant net income from operations in the near future may cause us to reduce or cease activities.
Our company’s independent auditors
have expressed substantial doubt about our ability to continue as a going concern.
We have incurred losses and during our
short history we have been in a development phase without material revenues or operational cash flows. Additionally, we currently
have limited viable funding sources to pay our on-going obligations. Next, we do not currently have, and do not expect to have,
recurring revenue generating sources until we fully launch our advertising business while continuing to incur operating expenses.
These factors, along with having no substantial firm funding commitments, result in substantial doubt about our ability to continue
as a going concern. As such, our independent auditors included an explanatory paragraph regarding the substantial doubt about the
ability to continue as a going concern. The financial statements contain additional note disclosures describing the circumstances
that led to the inclusion of the explanatory paragraph.
Beginning in the third quarter
of 2015, we expect to generate a significant portion of our near-term revenues from advertising, and a reduction in
spending by or loss of advertisers could seriously harm our business.
In the near term (the next 12 to 18
months), we expect nearly all of our revenue will be generated from advertisers. We expect to begin earning advertising revenue
in the third quarter of 2015 through advertisements placed with our content and distribution partner simplyME Distribution. Our
ability to attract advertisers will be limited, and existing advertisers will not continue to do business with us, if their investment
in advertising with us (and our content partners) does not generate sales leads, and ultimately customers, or if we and our distribution
partners such as simplyME do not deliver their advertisements in an appropriate and effective manner. If we are unable to remain
competitive and provide value to our advertisers, they may stop placing ads with us, which would adversely affect our revenues
and business.
In addition, expenditures by advertisers
tend to be cyclical, reflecting overall economic conditions and budgeting and buying patterns. Adverse macroeconomic conditions
can also have a material negative impact on the demand for advertising and cause our advertisers to reduce the amounts they spend
on advertising, which could adversely affect our revenues and business.
We face intense competition. If we
do not continue to innovate and provide content and products that are useful to users, we may not remain competitive, and our revenues
and operating results could be adversely affected.
Our business is rapidly evolving and intensely
competitive, and is subject to changing technologies, shifting user needs, and frequent introductions of new products and services.
Our ability to compete successfully depends heavily on providing products and services that provide enjoyable experiences and entertain
users. The competitive pressure to innovate encompasses providing a wider range of products and services and relevant and entertaining
content that may not have been a part of previous core business plans.
We have many competitors in different industries,
most of which have stronger brand recognition, longer operating histories, and significantly more financial resources. Our competitors
can use their experience and resources in ways that could affect our competitive position, including by making acquisitions, investing
aggressively in research and development, aggressively initiating intellectual property claims (whether or not meritorious) and
competing aggressively for advertisers and consumers.
Our competitors are constantly developing
innovations content delivery, online advertising, and web-based products and services. The development of new, technologically
advanced products is also a complex and uncertain process requiring high levels of innovation and investment, as well as the accurate
anticipation of technology, market trends and consumer needs. As a result, we may not be able to compete on a timely basis, particularly
with competitors with greater financial resources and longer operating histories. If we are unable to provide quality content
using effective and engaging distribution methods, then we will have difficulty generating user engagement and ultimately, advertising
revenue. If our competitors are more successful than we are in developing compelling content or in attracting and retaining users,
advertisers, and content providers, our revenues and operating results could be adversely affected.
Our business depends on a strong
brand, and failing to maintain and enhance our brand would hurt our ability to expand our base of users, advertisers, and other
partners.
We are in the early stages of building
a strong brand identity that will be critical to the success of our business. We believe that the importance of brand recognition
remains crucial due to the relatively low barriers to entry in the internet market. Our brand may be negatively impacted by a number
of factors, including data protection and security issues, service outages, and product malfunctions. Failure to increase, maintain,
and continually enhance our brand, which likely will require us to incur significant, and potentially excessive, expenses will
adversely affect our business in a material manner.
If we fail to attract users
to our viewer and consumer base our revenue, financial results, and business may be significantly harmed.
Our user base size and our users’
level of engagement are critical to our success. Our financial performance will be significantly determined by our success in adding,
retaining and engaging active users. If we are unable to attract and publish engaging content, then our active user rate will decline,
and we will be unable to attract advertising and ecommerce customers. If individual consumers across our target audience do not
perceive our products to be useful, reliable and trustworthy, then we may not be able to attract or retain users or otherwise maintain
or increase the frequency and duration of their engagement. We may not be able to expand our active user base to levels to generate
positive cash flows from operations. Consumer engagement patterns are constantly evolving and difficult to measure, and if we cannot
provide timely evolution of our brands, then our financial results will severely harmed. Any number of factors could potentially
negatively affect user retention, growth and engagement, including if:
|
· |
users increasingly engage with other products or activities; |
|
· |
we fail to introduce content and other video products that users find engaging; |
|
· |
consumer experience is diminished as a result of the decisions we make with respect to the frequency, prominence and size of ads that we display or the quality of the ads displayed; |
|
· |
we are unable to manage and prioritize information to ensure users are presented with content that is interesting, useful and relevant to them; |
|
· |
there are adverse changes in our products that are mandated by legislation, regulatory authorities or litigation, including settlements or consent decrees; or |
|
· |
technical or other problems prevent us from delivering our products in a rapid and reliable manner or otherwise affect the user experience, such as any failure to prevent spam or similar content. |
Our new products and changes to existing
products could fail to attract or retain users or generate revenue.
Our ability to retain, increase and engage
our user base and to increase our revenue depends heavily on our ability to provide successful new product offerings, such as original
television or other videos, both independently and/or in conjunction with developers or other third parties. Our product reviews
and introductions may include new and unproven products, including with which we have little or no prior experience. If new or
enhanced products fail to engage users, developers or marketers, then we may fail to attract or retain users or to generate sufficient
revenue or operating margin, and our business may be adversely affected.
We prioritize user growth and engagement
and the user experience over short-term financial results.
We sometimes make decisions
regarding our content and distribution methods that may reduce our short-term revenue or profitability if we believe that the
decisions are consistent with our mission and benefit the aggregate user experience and will thereby improve our financial
performance over the long term. For example, from time to time we may change the size, frequency or relative prominence of
ads in order to improve ad quality and overall user experience. Similarly, from time to time we may adjust our content or
websites to deliver the most relevant content to our users, which may adversely affect certain advertisers and could reduce
their incentive to invest in their marketing efforts on our platforms and those of our brand partners. We also may introduce
changes to existing content mixes to attract new targeted demographics that direct previous users away from our sites. These
decisions may not produce the long-term benefits that we expect, in which case our user growth and engagement, our
relationships with developers and advertisers and our business and results of operations could be harmed.
Our dependence on a sole back-office
technology partner subjects us to commercial risk.
Currently, all of our advertising sales,
support, revenue generation and tracking and collections efforts are provided by one third party vendor, UM Technologies. If our
relationship with this service provider erodes or is harmed, that would likely result in the interruption of our business plan
and likely will result in adverse impacts on our financial results and future performance.
A variety of new and existing
U.S. laws could subject us to claims or otherwise harm our business.
We are subject to numerous U.S. laws
and regulations covering a wide variety of subject matters. New laws and regulations (or new interpretations of existing laws
and regulations) also may impact our business. The costs of compliance with these laws and regulations are high and are likely
to increase in the future. Any failure on our part to comply with these laws and regulations can result in negative publicity
and diversion of management time and effort and may subject us to significant liabilities and other penalties.
Furthermore, many of these laws were adopted
before the advent of the internet and related technologies and, as a result, do not contemplate or address the unique issues of
the internet and related technologies. The laws that do reference the internet are being interpreted by the courts, but their
applicability and scope remain uncertain. For example, the laws relating to the liability of providers of online services are
currently unsettled within the U.S. Claims may be filed against us under U.S. laws for defamation, invasion of privacy and
other tort claims, unlawful activity, patent, copyright and trademark infringement or other theories based on the nature and content
of the materials searched and the ads posted by our users, our products and services or content generated by our users.
In addition, the Digital Millennium
Copyright Act has provisions that limit, but do not necessarily eliminate, our liability for listing or linking to third-party
websites that include materials that infringe copyrights or other rights, so long as we comply with the statutory requirements
of this act. Any future legislation impacting these safe harbors may adversely impact us. Various U.S. laws restrict the distribution
of materials considered harmful to children and impose additional restrictions on the ability of online services to collect information
from minors. In the area of data protection, many states have passed laws requiring notification to users when there is a security
breach for personal data, such as California’s Information Practices Act.
We may be subject to legal liability
associated with providing online services or content.
We will provide a wide variety of products
that enable users to exchange information and product and service providers to advertise and engage in various online activities.
The law relating to the liability of providers of these online services and products for activities of their users is still somewhat
unsettled. Claims may be threatened or brought against us for defamation, negligence,
breaches of contract, copyright or trademark infringement, unfair competition, unlawful activity, tort, including personal injury,
fraud or other theories based on the nature and content of information that we publish or to which we provide links or that may
be posted online or generated by us or by third parties, including our users. In addition, we may be subject to domestic or international
actions alleging that certain content we have generated or third-party content that we have made available within our services
violates U.S. and non-U.S. law.
Interruption or failure of our information
technology and communications systems could hurt our ability to effectively provide our products and services, which could damage
our reputation and harm our operating results.
The availability of our products and services
depends on the continuing operation of our information technology and communications systems. Our systems are vulnerable to damage
or interruption from earthquakes, terrorist attacks, floods, fires, power loss, telecommunications failures, computer viruses,
computer denial of service attacks or other attempts to harm our systems.
The occurrence of a natural disaster could
result in lengthy interruptions in our service. In addition, our products and services are highly technical and complex and may
contain errors or vulnerabilities. Any errors or vulnerabilities in our products and services, or damage to or failure of our systems,
could result in interruptions in our services, which could reduce our revenues and profits and damage our brand.
Our operating results may fluctuate,
which makes our results difficult to predict and could cause our results to fall short of expectations.
Our operating results may fluctuate as
a result of a number of factors, many outside of our control, and we have a short operating history. As a result, comparing our
operating results on a period-to-period basis will take time as we build our history and may not be meaningful in any period. As
a result, you should not rely on our past results as an indication of our future performance. Our quarterly, year-to-date and annual
revenues and expenses may differ significantly from our projected rates. Any of these events could cause our stock price to fall.
Each of the risk factors listed in this section in addition to the following factors may affect our operating results:
|
· |
our ability to continue to attract users to our distribution
platforms; |
|
· |
our ability to monetize advertising revenue from distributed
content; |
|
· |
revenue fluctuations caused by changes in property mix, platform mix and geographical mix; |
|
· |
the amount and timing of operating costs and expenses and capital expenditures related to the maintenance and expansion of our businesses, operations and infrastructure; |
|
· |
our focus on long-term goals over short-term results; |
|
· |
our ability to keep our content platforms operational at
a reasonable cost and without service interruptions; and |
|
· |
because our business is changing and evolving, and because of our lack of historical operating results, predicting our future operating results is not reliable. In addition, advertising spending has historically been cyclical in nature, reflecting overall economic conditions, as well as budgeting and buying patterns. |
We rely on highly skilled personnel,
and if we are unable to retain or motivate key personnel, hire qualified personnel or maintain our corporate culture, then we may
not be able to grow effectively.
Our performance largely depends on the
talents and efforts of highly skilled individuals. Our future success depends on our continuing ability to identify, hire, develop,
motivate and retain highly skilled personnel for all areas of our organization. Competition in our industry for qualified employees
is intense. In addition, our compensation arrangements, such as our equity award programs, may not always be successful in attracting
new employees and retaining and motivating our existing employees. Our continued ability to compete effectively depends on our
ability to attract new employees and to retain and motivate our existing employees.
Claims that current or future technologies
used in our products and services infringe or misappropriate the proprietary rights of others could adversely affect our ability
to use those technologies and cause us to incur additional costs.
We could be subject to third party infringement
claims if third parties challenge our use of a particular technology or proprietary information in our sites. Any litigation, regardless
of its outcome, would likely result in the expenditure of significant financial resources and the diversion of management’s
time and resources. In addition, litigation in which we are accused of infringement may cause negative publicity, adversely impact
prospective customers and require us to develop non-infringing technology, make substantial payments to third parties or enter
into royalty or license agreements, which may not be available on acceptable terms or at all.
We may acquire technologies or companies
in the future, and such acquisitions could disrupt our business and dilute our stockholders’ interests.
We may acquire additional technologies
or other companies in the future, and we cannot provide assurances that we will be able to successfully integrate their operations
or that the cost savings we anticipate will be fully realized. Entering into an acquisition or investment entails many risks, any
of which could materially harm our business, including:
|
· |
the diversion of management’s attention from other business concerns; |
|
· |
the failure to effectively assimilate the acquired technology, employees or other assets of the acquired company into our business; |
|
· |
the loss of key employees from either our current business or the acquired business; and |
|
· |
the assumption of significant liabilities of the acquired company. |
If we complete acquisitions, we may dilute
the ownership of current stockholders. In addition, achieving the expected returns and cost savings from our past and future acquisitions
will depend in part on our ability to integrate the products and services, technologies, research and development programs, operations,
sales and marketing functions, finance, accounting and administrative functions and other personnel of these businesses into our
business in an efficient and effective manner. Any businesses that we acquire may not perform at anticipated levels. If we are
unable to successfully integrate acquired businesses, then our anticipated revenues may be lower, and our operational costs may
be higher.
Our strategy for growth may include
joint ventures, strategic alliances and mergers and acquisitions, which could be difficult to manage.
The successful execution of our growth
strategy will depend on many factors, including identifying suitable companies, negotiating acceptable terms, successfully consummating
the corporate relationships and obtaining the required financing on acceptable terms. We may be exposed to risks that we may incorrectly
assess new businesses and technologies. We could face difficulties and unexpected costs during and after the establishment of corporate
relationships.
Our insurance may not be sufficient.
We will carry insurance that we consider
adequate having regard to the nature of the risks of doing business and costs of coverage. We may not, however, be able to obtain
insurance against certain risks or for certain products or other resources located from time to time in certain areas of the world
to the extent that we may be forced to rely on outside providers. Currently, we are not fully insured against all possible risks,
nor are all such risks insurable. Our insurance coverage may not be adequate.
We do not own all of the intellectual
property that is needed for use of our content storage and distribution plans, and thus rely on contractual rights to use certain
intellectual property that is needed for our content storage and distribution infrastructure.
Pursuant to our agreement with UM Technologies,
we have the rights to use all software developed for our back-office infrastructure. However, we do not own all of the underlying
intellectual property and thus, rely on our contractual relationship for our ability to use certain intellectual property necessary
to run our business.
We may seek to protect intellectual
property through contracts, including, when possible, confidentiality agreements and inventors’ rights agreements with our
business partners and employees.
We intend to seek to protect intellectual
property, to the extent it is developed over time, in part by confidentiality agreements and, if applicable, inventors’
rights agreements with strategic partners and employees, although such agreements have not been and may not be put in place in
every instance. These agreements may not adequately protect our trade secrets and other intellectual property or proprietary
rights. There is also a risk that the parties that enter into such agreements with us may breach them, that we will not have adequate
remedies for any breach or that such persons or institutions will assert rights to intellectual property arising out of these
relationships.
Our failure to obtain or maintain
the right to use certain intellectual property may negatively affect our business.
Our future success and
competitive position depend in part on our ability to obtain and maintain rights with regard to certain intellectual
property used in our solutions. This may be achieved, in part, by prosecuting claims against others who we believe are
infringing our rights and by defending claims of intellectual property infringement brought by others. While we are not
currently engaged in any intellectual property litigation, in the future we may commence lawsuits against others if we
believe that they have infringed our rights, or we may become subject to lawsuits alleging that we have infringed the
intellectual property rights of others. For example, to the extent that we have previously incorporated third party
technology and/or know-how into certain systems for which we do not have sufficient license rights, we could incur
substantial litigation costs, be forced to pay substantial damages or royalties or even be forced to cease operations in the
event that any owner of such technology or know-how were to challenge our subsequent installation of such system (and any
progeny thereof). Our involvement in intellectual property litigation could result in significant expense to us, adversely
affect the development of our waste remediation intellectual property and divert the efforts of our technical and management
personnel, whether or not such litigation is resolved in our favor. In the event of an adverse outcome in any
such litigation, we may, among other things, be required to:
|
· |
pay substantial damages; |
|
· |
cease the development, manufacture, use, sale or importation of machines or systems or components thereof that infringe on other patented intellectual property; |
|
· |
expend significant resources to develop or acquire non-infringing intellectual property; |
|
· |
discontinue processes or systems incorporating infringing technology; or |
|
· |
obtain licenses to the infringing intellectual property. |
Any such development, acquisition or license
could require the expenditure of substantial time and other resources and could have a material adverse effect on our business,
results of operations and financial condition.
Risks Related to our Common Stock
Our executive officers and directors
collectively have the power to control our management and operations, and have a significant majority in voting power on all matters
submitted to the stockholders of the company.
Management and affiliates of our management
currently beneficially own a majority of our outstanding common stock. Consequently, management has the ability to influence control
of the operations of the Company and, acting together, will have the ability to influence or control substantially all matters
submitted to stockholders for approval, including:
|
· |
Election of our board of directors; |
|
· |
Removal of directors; |
|
· |
Amendment to the Company’s Articles of Incorporation or Bylaws; and |
|
· |
Adoption of measures that could delay or prevent a change in control or impede a merger, takeover or other business combination. |
These stockholders have complete control
over our affairs. Accordingly, this concentration of ownership by itself may have the effect of impeding a merger, consolidation,
takeover or other business consolidation, or discouraging a potential acquirer from making a tender offer for the Common Stock.
Our executive officers face a conflict
since they will be seeking to sell shares offered hereunder on behalf of the Company, and may also sell shares that they hold personally
that are registered hereby,since our executive offices are included as selling stockholders herein.
This Registration Statement
covers both the offering of shares of our common stock to the public by the Company and the sale of shares held by selling
stockholders, including some of the Company’s executive officers. Thus, the Company’s executive officers may sell
shares they own personally, and will also be seeking to sell shares of stock offered by the Company. This presents a conflict
of interest in that each such executive officer could be presented an opportunity to sell shares either personally or on
behalf of the Company, to a given potential investor. If an executive officer prioritized the sale of his or her own shares,
this could harm the Company.
Our common stock has not been widely
traded, and the price of our common stock may fluctuate substantially.
To date, there has been a limited public
market for shares of our common stock, with limited trading. An active public trading market may not develop or, if developed,
may not be sustained. The current market price of our common stock and any possible subsequent listing on the NASDAQ Market or
other securities exchange, if and when we are successful in doing so, will be affected by a number of factors, including those
discussed above.
Future sales of our common stock
by existing stockholders could cause our stock price to decline.
If our existing stockholders sell substantial
amounts of our common stock in the public market, then the market price of our common stock could decrease significantly. The perception
in the public market that our stockholders might sell shares of common stock also could depress the market price of our common
stock. There are approximately 226 million shares of our common stock outstanding, of which approximately 2,055,833 shares are
currently freely tradable. The balance of our shares currently contains certain restrictions on resale. We may in the future issue
and register additional shares of our common stock that might be freely transferable at the time of such transaction.
A decline in the price of shares of our
common stock might impede our ability to raise capital through the issuance of additional shares of our common stock or other equity
securities.
We do not expect to pay dividends
in the foreseeable future, and any return on investment may be limited to the value of our common stock.
We do not anticipate paying dividends on
our common stock in the foreseeable future. The payment of dividends on our common stock will depend on our earnings, financial
condition, opportunities to invest in the growth of our business and other business and economic factors affecting us at such time
as our Board of Directors may consider relevant. If we do not pay dividends, then our common stock may be less valuable because
a return on investment will occur only if our stock price increases.
Our charter documents may discourage
or prevent a change in control, even if an acquisition would be beneficial to our stockholders, which could adversely affect our
stock price and prevent attempts by our stockholders to replace or remove our current management.
Our current articles of incorporation and
bylaws, which will remain in effect after the effective date of this Report, contain provisions that could delay or prevent a change
in control of our company or changes in our Board of Directors that our stockholders might consider favorable and limit the price
that certain investors might be willing to pay in the future for our securities. Among other things, these provisions:
|
· |
Authorize the issuance of preferred stock that can be designated and issued by our Board of Directors without prior stockholder approval and with rights senior to those of our common stock. |
|
· |
Require advance written notice of stockholder proposals and director nominations to be considered at stockholders’ meetings. |
These and other provisions in our articles
of incorporation and bylaws could make it more difficult for stockholders or potential acquirers to obtain control of our Board
of Directors or to initiate actions that are opposed by our then current Board of Directors, including a merger, tender offer or
proxy contest involving our company. Any delay or prevention of a change in control transaction or changes in our Board of Directors
could cause the market price of our common stock to decline.
We are authorized to issue preferred
stock, which could adversely affect the value of shares of our common stock.
Our articles of incorporation authorize
us to issue up to 2,000,000,000 shares of common stock and 200,000,000 shares of preferred stock, approximately 100,000,000 shares
of which preferred shares are available for future issuance as of the date of this Report. Our Board of Directors could designate
and issue preferred stock, in one or more series, the terms of which may be determined at the time of issuance by our Board of
Directors, without further action by stockholders. Terms of preferred stock could include voting rights, including the right to
vote as a series on particular matters, preferences as to dividends and liquidation, conversion rights, redemption rights and sinking
fund provisions. The designation of preferred stock could have a material adverse effect on the rights of holders of our common
stock and therefore could reduce the value of shares of our common stock. In addition, specific rights granted to future holders
of preferred stock could be used to restrict our ability to merge with, or sell our assets to, a third party. The ability of our
Board of Directors to issue preferred stock could have the effect of rendering more difficult, delaying, discouraging, preventing
or rendering more costly an acquisition of our company or a change in control of our company, thereby preserving control of our
company by current management.
Our common stock is deemed to be
a “penny stock,” which may make it more difficult for investors to sell their shares due to suitability requirements.
Our common stock is deemed to be a “penny
stock” as that term is defined in Rule 3a51-1 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”). This classification reduces the potential market for our common stock by reducing the number of potential investors.
This would be detrimental to the development of active trading in our common stock and make it more difficult for investors in
our common stock to sell shares to third parties or to otherwise dispose of them. This also could cause our stock price to decline
or impede any increase in price. Penny stocks are stocks:
|
· |
with a price of less than $4.00 per share; |
|
· |
that are not traded on a “recognized” national exchange; or |
|
· |
in issuers with net tangible assets less than $2 million (if the issuer has been in continuous operation for at least three years) or $10 million (if the issuer has been in continuous operation for less than three years), or with average revenues of less than $6 million for the last three years. |
Broker-dealers dealing in penny stocks
are required to provide potential investors with a document disclosing the risks of penny stocks. Moreover, broker-dealers are
required to determine whether an investment in a penny stock is a suitable investment for a prospective investor. Many broker-dealers
will not offer penny stocks to their clients. Moreover, many investors are disinclined to purchase penny stocks.
If we raise additional funds through
the issuance of equity or convertible debt securities, your ownership will be diluted.
If we raise additional funds through the
issuance of equity or convertible debt securities, the percentage ownership held by existing stockholders will be reduced, and
new securities may contain certain rights, preferences or privileges that are senior to those of our common stock. Furthermore,
any additional equity financing may be dilutive to stockholders, and debt financing, if available, may involve restrictive covenants,
which may limit our operating flexibility with respect to certain business matters.
Grants of stock options and other
rights to our employees may dilute your stock ownership.
We plan to attract and retain employees
in part by offering stock options and other purchase rights for a significant number of shares of our common stock. We intend to
grant stock options to certain officers and directors of our company. The issuance of shares of common stock pursuant to such stock
options, and stock options issued in the future, will have the effect of reducing the percentage of ownership in our company of
our then existing stockholders.
FINRA sales practice requirements
also may limit a stockholder’s ability to buy and sell our stock.
In addition to the “penny stock”
rules described above, the Financial Industry Regulatory Authority (known as “FINRA”) has adopted rules that
require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment
is suitable for that customer. Before 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, investment objectives
and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low
priced securities will not be suitable for at least some customers. 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 stock and have an adverse
effect on the market for our shares.
MARKET AND OTHER DATA
The industry and market data contained
in this prospectus are based on independent industry publications, reports by market research firms or other published independent
sources and, in each case, are believed by us to be reliable and accurate. However, industry and market data is subject to change
and cannot always be verified with complete certainty due to limits on the availability and reliability of raw data, the voluntary
nature of the data gathering process and other limitations and uncertainties inherent in any statistical survey. In addition, consumption
patterns and customer preferences can and do change. The industry and market data sources upon which we relied are publicly available
and were not prepared for our benefit or paid for by us.
USE OF PROCEEDS
With respect to shares of our common stock
that may be offered and sold from time to time by the selling stockholders, we will receive no proceeds from the sale of those
shares of common stock in this offering.
With respect to up to 46,875,000 shares
of common stock to be sold by us, unless we provide otherwise in a supplement to this prospectus, we intend to use the net proceeds
from the sale of our securities for one or more of the following:
|
· |
to execute on our Plan of Operations described below under “Management’s Discussion and Analysis – Plan of Operations,” including: |
| · | the development or acquisition of high quality content; |
| · | advertising and marketing expenses; and |
| · | attracting and retaining highly talented professionals; |
|
· |
payment of accounts payable; and |
|
· |
working capital and other general corporate purposes. |
|
· |
We may also use a portion of the net proceeds to acquire other businesses, technologies or intellectual properties valuable to our business. |
The charts below set
forth our anticipated net proceeds assuming various percentages of the public offering are completed, as well as how we anticipate
that the net proceeds from the public offering of our common stock would be used:
|
25% Offering Proceeds |
50% Offering Proceeds |
75% Offering Proceeds |
100% Offering Proceeds |
Gross Proceeds |
$1,757,813 |
$3,515,625 |
$5,273,438 |
$7,031,250 |
Offering Expenses |
50,000 |
50,000 |
50,000 |
50,000 |
Net Proceeds |
$1,707,813 |
$3,465,625 |
$5,223,438 |
$6,981,250 |
|
25% Offering Proceeds |
50% Offering Proceeds |
75% Offering Proceeds |
100% Offering Proceeds |
Development and Acquisition of Content |
$250,000 |
$750,000 |
$1,750,000 |
$2,250,000 |
Build out of software and hardware infrastructure |
$250,000 |
$500,000 |
$500,000 |
$750,000 |
Advertising and Marketing expenses |
$250,000 |
$500,000 |
$500,000 |
$750,000 |
Payment of Accounts Payable |
$250,000 |
$500,000 |
$500,000 |
$500,000 |
General Corporate (including past due salary and professional fees) |
$707,813 |
$1,215,625 |
$1,973,438 |
$2,731,250 |
TOTAL |
$1,707,813 |
$3,465,625 |
$5,223,438 |
$6,981,250 |
DETERMINATION OF OFFERING PRICE
The offering price of the shares of
common stock in the direct offering is related to the price at which shares have recently traded in the over the counter market,
as follows: the offering price reflects a discount of approximately 14% to the trailing 10-day trading day average closing bid and
ask prices of our common stock as of July 9, 2015, which was $0.1746. The price does not necessarily bear any relationship to
our book value, assets, past operating results, financial condition or any other established criteria of value.
MARKET PRICE OF AND DIVIDENDS OF THE
COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
(a) Market Information.
Our shares of common stock are
not traded on a national exchange; rather, they are traded on the OTCQB marketplace under the symbol “ZONX”. At
July 8, 2015, the closing bid price for one share of our common stock was $0.15. During the 20 trading days prior to July 9,
2015, the closing trading price ranged from $0.11 to $0.30. The following table sets forth, for the periods indicated, the
high and low trade prices for our common stock as reported on the on the OTCQB marketplace. During 2012 and 2013, our common
stock did not trade above $0.01.
On November 21, 2014, we completed a 1
for 44 reverse split of our common stock. The following reverse split adjusted table reflects the high and low quarterly quotations
or traded prices. (source: www.otcmarkets.com).
Quarterly Period |
|
High |
|
|
Low |
|
2015 |
|
|
|
|
|
|
|
|
Second Quarter |
|
$ |
0.34 |
|
|
$ |
0.11 |
|
First Quarter |
|
$ |
0.44 |
|
|
$ |
0.05 |
|
|
|
|
|
|
|
|
|
|
2014 |
|
|
|
|
|
|
|
|
Fourth Quarter |
|
$ |
0.93 |
|
|
$ |
0.07 |
|
Third Quarter |
|
$ |
0.44 |
|
|
$ |
0.03 |
|
Second Quarter |
|
$ |
0.66 |
|
|
$ |
0.05 |
|
First Quarter |
|
$ |
0.18 |
|
|
$ |
0.02 |
|
Trading in stocks quoted on the OTCQB
marketplace is often thin and is characterized by wide fluctuations in trading prices due to many factors that may have little
to do with a company’s operations or business prospects. We cannot assure you that there will be a market for our common
stock in the future.
Our transfer agent is Continental Stock
Transfer & Trust Company with an office at 17 Battery Place, 8th Floor, New York, New York 10004.
(b) Holders.
At July 9, 2015, there were 1,072 stockholders
of record of our company’s common stock. Company stockholders who hold their shares in electronic format in U.S. brokerage
accounts are not deemed to be separate stockholders, as such shares are held of record by CEDE and Co., which is counted by our
company’s transfer agent as a single stockholder of record. As of July 9, 2015, there were 226,822,131 shares of our company’s
common stock issued and outstanding and no shares of our preferred stock issued and outstanding.
(c) Dividends.
During the most recent fiscal year, we
did not declare or pay cash dividends. Our company does not intend to pay cash dividends on its common stock in the foreseeable
future. We anticipate retaining earnings (if any) for investing in our business and increasing our working capital. We are not
subject to restrictions respecting the payment of dividends, except that they may not be paid to render us insolvent.
(d) Securities Authorized for Issuance
under Equity Compensation Plans.
We have one equity compensation plan,
our company’s 2007 Stock Option Plan. See “Executive Compensation—2007 Stock Option Plan.” Set forth in
the table below are (a) the number of shares of our common stock to be issued upon the exercise of outstanding options, (b) the
weighted-average exercise price of the outstanding options and (c) other than shares of our common stock to be issued upon the
exercise of the outstanding options, the number of shares of our common stock remaining available for future issuance under our
company’s 2007 Stock Option Plan as of June 30, 2015.
The following table summarizes certain
information regarding our 2007 Stock Option Plan as of June 30, 2015:
Equity Compensation
Plan Information
| |
| |
| |
Number of securities |
| |
| |
| |
remaining available for |
| |
| |
| |
future issuance under |
| |
Number of securities to | |
Weighted-average | |
equity compensation |
| |
be issued upon exercise | |
exercise price of | |
plans (excluding |
| |
of outstanding options, | |
outstanding options, | |
securities reflected in |
Plan category | |
warrants and rights | |
warrants and rights | |
column (a)) |
| |
(a) | |
(b) | |
(c) |
Equity compensation plans approved by security holders | |
568,182 | |
$6.60 | |
340,909 |
Equity compensation plans not approved by security holders | |
871,591 | |
$0.88 | |
N/A |
Total | |
1,439,773 | |
| |
340,909 |
The above table has been adjusted to reflect
retrospective application of our 1-for-44 reverse stock split, effective November 12, 2014.
2007 Stock Option Plan
Before December 31, 2011, we issued options
to both employees and non-employees under our 2007 Stock Option Plan, which reserved 909,091 shares of common stock pursuant to
the issuance of stock options under the Plan. As of June 30, 2015, we had 568,182 shares of common stock subject to outstanding
common stock options with a weighted average exercise price of $6.60. As of June 30, 2015, 340,909 shares of common stock
were available for future award grants under the 2007 Stock Option Plan.
In addition, we issued warrants to employees
and non-employees not reserved under a formal Plan. As of June 30, 2015, we had 871,591 warrants outstanding with a weighted
average exercise price of $0.88. All numbers relating to the 2007 Stock Option Plan have been adjusted to reflect the retrospective
application of our 1-for-44 reverse stock split effective November 12, 2014.
BUSINESS
Overview
Zonzia Media, Inc. is
a multi-platform entertainment company focused on delivering compelling, innovative content with the objective of
generating advertising revenue and subscription revenue. We plan to distribute content through three distinct platforms: 1)
Cable television; 2) Hotel in-room channel; and 3) our website Zonzia.com. Through an over-the-top technology and
content offerings, we plan to allow instant access to our available content from the home, from any mobile device, and
through any smart phone, tablet, pad, or other internet connected device. Together with our content and distribution partner
simplyME Distribution, we currently offer a collection of comedy, cooking and celebrity programming, which is currently
available in over 27 million households. Upon the full launch of all three of our delivery platforms, which is contingent
upon the receipt of adequate funding, we plan to deliver family friendly content and original programming entertainment
including:
| § | Original
Programming – featuring TV series, mini-series, full length films, short
films, and documentaries of all genres produced and directed by well-known individuals
within the entertainment industry as well as new up-and-comers. |
| § | Feature
Films – full-length feature films from major Hollywood studios and independent
films from established production companies. |
| § | Television
Shows – TV series from the major networks as well as originally developed
series from independent production companies exclusively available on the Zonzia delivery
platforms. |
| § | Concerts,
Sports and Live Events – streaming live music concerts, live sports
events, and other live entertainment events from around the world. |
When referring to our company and using
phrases such as “we” and “us,” our intent is to refer to Zonzia Media, Inc. (formerly Indigo-Energy, Inc.
and HDIMAX Media, Inc.).
We were originally incorporated in 1981
in the State of Nevada. Our principal executive offices are located at 74 N. Pecos Road, Suite D, Henderson, Nevada 89074,
and our telephone number at that location is (702) 463-8528. Our website address is www.zonzia.com. The information on
our website is not part of this prospectus.
Zonzia Media
We are a new multi-platform entertainment
distribution business with the goal of using the following three distribution platforms to generate advertising revenue:
Platform #1-Cable Television
| · | Our
cable platform has already launched and is currently available in approximately 27 million
households in the Southeastern United States. |
| · | Our
cable providers include Comcast, Dish Network, and Verizon FiOS. |
| · | We
currently have content on the Zonzia Channel provided through a Channel Distribution
Agreement with simplyME Distribution LLC. |
| · | The
business model is to generate advertising dollars from users viewing our content through
our cable providers. As of June 30, 2015, we had not yet generated advertising revenue,
but expect to begin generating advertising revenue in the third quarter of 2015. |
| · | The
growth strategy is to enhance the quality of the channel content and to increase the
total amount of content thereby generating increased advertising revenue. |
| · | The
Company plans to use internet marketing, social media, and other advertising to drive
traffic to this channel. |
| · | Pursuant
to an addendum to our Channel Distribution Agreement with simplyME, we have secured an
additional channel, to be called “Zonzia Kidz,” with a launch of this additional
channel expected by January 1, 2016. |
We are teaming up with simplyME Distribution to provide
programming, which is supported by national branded advertisers, to cable households through cable television providers Comcast,
Dish Network and Verizon FiOS. We currently have 30 hours of programming and are in the process of ramping up our programming
efforts which we anticipate will expand to approximately 90 hours of content sometime in the fourth quarter of this year.
Through our partnership with simplyME we have already secured
advertising partners in support of our programming and we are working together to secure new advertisers in the coming months.
Those advertisers include Citigroup, State Farm Insurance, Hormel Chili, and Ford Motor Company.
With its current ad partners, Zonzia believes it will report
revenue from these advertisers in the third quarter of 2015. With the anticipated addition of new advertisers, Zonzia expects
to recognize a growth in revenue in conjunction with its ongoing programming efforts.
Description of Channel Distribution Agreement with simplyME
On February 9, 2015, Zonzia Media, Inc. (the “Company”)
entered into a Channel Distribution Agreement with simplyME Distribution (“simplyME”), whereby simplyME agreed to
transmit or otherwise distribute the Company’s content to end users across cable, satellite, IPTV, Internet, mobile and
television platforms. Under this agreement, simplyME will use its contracts with providers to place the Company’s content
across on-demand platforms which include: Verizon FiOS, Verizon Wireless, DISH Network, DISH Hopper, Comcast, XBOX and a sub-channel
to be named by the Company. In exchange for these distribution services, the Company agreed to pay simplyME a distribution fee
due 30 days before launch, with an ongoing monthly fee. The parties agreed to split evenly advertising revenue under the agreement.
The agreement has an initial term of two years and may be renewed thereafter. A copy of this Channel Distribution Agreement is
filed as an exhibit to the registration statement of which this prospectus is a part.
The following table summarizes the programming that is currently
available through the simplyME agreement in over 27 million households serviced by this agreement.
Series Title | |
Show Length | |
Genre | |
Episodes | |
Target Audience Age |
| |
| |
| |
| |
|
A Tehraner’s Memoir | |
0:15:00 | |
Comedy | |
13 | |
18-40 |
| |
| |
| |
| |
|
Graci In The Kitchen | |
0:05:00 | |
Cooking | |
9 | |
18-40 |
| |
| |
| |
| |
|
Roll In The City | |
0:30:00 | |
Celebrity Lifestyle | |
| |
25-45 |
| |
| |
| |
| |
|
What’s The 411 | |
0:30:00 | |
Celebrity News | |
10 | |
35-55 |
| |
| |
| |
| |
|
The Mixology | |
0:10:00 | |
Beverage | |
16 | |
25-45 |
| |
| |
| |
| |
|
The Food Channel | |
0:30:00 | |
Cooking | |
29 | |
25-45 |
| |
| |
| |
| |
|
Urban Rajah | |
0:05:00 | |
Food | |
25 | |
20-45 |
| |
| |
| |
| |
|
Hot Kitchen | |
1:00:00 | |
Cooking | |
30 | |
16-55 |
Zonzia Kidz
On June 30, 2015, we entered into an addendum to our Channel
Distribution Agreement with simplyME Distribution to secure an additional cable channel through simplyME, which we plan to dedicate
to children’s programming. To secure this channel, we agreed to commence making monthly payments on November 1, 2015, with
the launch of Zonzia Kidz expected to occur by January 1, 2016. A copy of this Addendum to Channel Distribution Agreement is filed
as an exhibit to the registration statement of which this prospectus is a part.
Description of the Revenue Model for Cable Television
Advertisers are provided access to our Linear and VOD channel
content offerings via our agreement with simplyME Distribution. Advertisers pay us on the number of times one of our shows is
viewed. The benchmark metric for this calculation is known as CPM (cost per thousand views). Our CPM is tracked and reported by
the cable provider such as Comcast and Verizon, which we have the right to audit. Once the CPM is calculated, simplyME invoices
the advertisers, provides Zonzia with the breakout and audit trail, and wires funds into Zonzia’s bank account. The usual
and customary receivable timetable is net 60 days from national advertising agencies, and net 30 days in dealing directly with
advertising companies.
Platform #2- Hotel Network
| · | The
Company has an agreement with Sonifi Solutions, Inc. to provide Zonzia content to hotel
rooms across the U.S. The content will be provided on a Free-To-Guest Video-On-Demand
basis and through a Free-To-Guest Linear Channel. A copy of this Agreement is listed as
an exhibit to the registration statement of which this prospectus is a part. |
| · | The
content will be both library content and eventually original programming. The initial
roll-out to approximately 450,000 hotel rooms with linear hotel channel offerings is
targeted for 3rd quarter 2015 with VOD (Video on Demand) offerings available
to up to 900,000 hotel rooms in the same period. |
| · | The
growth strategy is to increase the number of hotel rooms displaying our content and to
provide compelling content through both our content partners and our own original content.
We are targeting expanding to approximately 1 million hotel rooms within the next 12
months. |
Description of the agreement with
Sonifi Solutions, Inc. for Hotel Chanel Distribution
On July 9, 2015, we entered into a
Submission/Insertion Order Agreement with Sonifi Solutions, Inc. Pursuant to the agreement, commencing July 15, 2015, Sonifi agrees
to make audio-video content provided by the Company available in hotel rooms on both a looping, free-to-guest linear channel and
on a free-to-guest Video-on-Demand (“VOD”) basis. Submissions for distribution on either the linear basis or VOD basis
will be scheduled monthly. Initially, submissions offered on a linear basis will be distributed to a minimum of 450,000 hotel
guest rooms that are served by Sonifi and through Sonifi’s mobile applications. Sonifi will use commercially reasonable
efforts to distribute VOD submissions to 900,000 guest rooms at Sonifi-served hotels.
Payments to Sonifi for linear based and VOD based submissions are structured
as follows: for the first twelve months of the term, the Company shall pay Sonifi the greater of $55,000 or fifty percent (50%)
of the Company’s gross advertising sales (net of any ad agency commission) per month, subject to a $140,000 monthly cap.
For the second twelve months, the Company shall pay Sonifi the greater of $70,000 or fifty percent (50%) of the Company’s
gross advertising sales (net of any ad agency commission) per month, subject to the same monthly cap. Thereafter for the remainder
of the initial term, the Company would pay $110,000 per month. The agreement has an initial term ending in June 2018, subject
to earlier termination rights in accordance with the agreement.
Description of Content Offerings per the Agreement with Sonifi
Solutions Inc.
The following table summarizes the programming that we anticipate
will be available through the Sonifi Solutions, Inc. agreement.
SERIES TITLE | |
GENRE | |
EPISODES | |
AUDIENCE |
Budz | |
Animated Comedy | |
13 | |
20-40 |
American 4x4 | |
Auto | |
10 | |
18-34 |
Cars 'N' Coffee | |
Auto | |
10 | |
20-40 |
The Mixology | |
Beverage | |
16 | |
25-45 |
The Spirited Actor | |
Business | |
10 | |
18-34 |
Guerilla Gourmet | |
Business | |
13 | |
18-40 |
High Flyers | |
Business | |
30 | |
25-45 |
The Real Brazil | |
Business | |
1 | |
24-45 |
Asia Stars | |
Business | |
67 | |
25-55 |
Risk Takers | |
Business | |
6 | |
25-45 |
Enterprise | |
Business | |
23 | |
25-45 |
Innovators | |
Business | |
4 | |
25-45 |
The Mentor | |
Business | |
23 | |
25-45 |
Brink | |
Business | |
12 | |
20-45 |
Inside Stories | |
Business | |
14 | |
25-45 |
Thailand Attracts | |
Business | |
3 | |
25-45 |
C-Suite | |
Business | |
16 | |
18-45 |
Voyager | |
Business | |
4 | |
25-45 |
Singapore Sessions | |
Business | |
8 | |
25-45 |
Ryan's Russia | |
Business | |
17 | |
25-45 |
Tweeds Russian Train Trip | |
Business | |
2 | |
25-45 |
Specials | |
Business | |
25 | |
25-45 |
Faith in Finance | |
Business | |
12 | |
25-45 |
Profiles | |
Celebrity | |
300 | |
25-55 |
On the Flipside | |
Celebrity Lifestyle | |
25 | |
16-40 |
Roll in the City | |
Celebrity Lifestyle | |
10 | |
25-45 |
Famous | |
Celebrity Lifestyle | |
96 | |
18-45 |
What's the 411 | |
Celebrity News | |
10 | |
35-55 |
A Tehraner’s Memoir | |
Comedy | |
13 | |
18-40 |
The Food Channel | |
Cooking | |
29 | |
25-55 |
All Mixed Up | |
Cooking | |
20 | |
20-45 |
Graci In The Kitchen | |
Cooking | |
9 | |
18-40 |
Hot Kitchen | |
Cooking | |
30 | |
16-55 |
SERIES TITLE | |
GENRE | |
EPISODES | |
AUDIENCE |
Game Changers | |
Docu-Business | |
41 | |
25-45 |
Notorious B.I.G | |
Documentary | |
1 | |
18-45 |
John Legend Documentary | |
Documentary | |
1 | |
16-35 |
Sangre Negra | |
Drama | |
13 | |
25-55 |
Pregnant By The Pastor | |
Drama | |
1 | |
25-55 |
Hey Diddle Diddle | |
Drama | |
9 | |
18-35 |
7 Cities | |
Drama | |
6 | |
18-35 |
Runway Magazine | |
Fashion | |
10 | |
20-45 |
Simply Fashion | |
Fashion | |
1 | |
16-45 |
Urban Rajah | |
Food | |
25 | |
20-45 |
Mission Makeover | |
Health & Fitness | |
39 | |
20-45 |
Access Health | |
Health & Wellness | |
13 | |
20-55 |
Total Faith Show | |
Inspirational | |
5 | |
35-50 |
Designing Spaces | |
Interior Design | |
39 | |
20-45 |
Jenny Live | |
Lifestyle | |
30 | |
18-40 |
Girls Night Out | |
Lifestyle | |
39 | |
18-45 |
Balancing Act | |
Lifestyle | |
13 | |
20-50 |
The Art of Fighting | |
Martial Arts | |
9 | |
18-45 |
Xtreme Fighting Championships | |
Martial Arts | |
26 | |
18-45 |
This Thing of Ours | |
Movies | |
1 | |
20-45 |
Usher | |
Movies | |
1 | |
18-45 |
Kush | |
Movies | |
1 | |
18-45 |
Barrio Beats | |
Music | |
1 | |
18-32 |
Port City P.D. | |
Police Drama | |
9 | |
18-36 |
The Mayor Life | |
Reality | |
2 | |
25-55 |
Anica | |
Science Fiction | |
5 | |
20-40 |
The Black Dawn | |
Sci-Fi | |
9 | |
18-32 |
Million Dollar Shootout | |
Sports | |
7 | |
18-45 |
Eye to Eye | |
Talk | |
22 | |
25-45 |
Tech Stars | |
Technology | |
3 | |
25-45 |
Secret Diary of an American | |
Teen Drama | |
4 | |
13-17 |
Cheerleader | |
| |
| |
|
Travelista | |
Travel | |
8 | |
20-35 |
Black Man N Robin | |
Video Games | |
13 | |
16-34 |
Description of the Revenue Model
for the Hotel Channel
The Hotel Channel model is
very similar to the Cable Channel model in that we will secure advertisers for our Linear and VOD channel offerings.
Advertisers will be solicited and contracted by simplyME distribution and an outside ad agency. We anticipate that
advertisers will pay us on the number of times one of our shows is viewed. The benchmark metric for this calculation is known
as CPM (cost per thousand views). Our Hotel Channel CPMs will be tracked and reported by Sonifi. Based on the tracking report
simplyME and the advertising agency will invoice the advertisers and will subsequently collect payments. Once they receive payments
from the advertisers, simplyME and the advertising agency will wire the funds to the Zonzia account. The usual and customary
receivable timetable is net 60 days from national advertising agencies, and net 30 days in dealing directly with
advertising companies.
Platform #3- Website: Zonzia.com
|
· |
The website, while up and operating,
functions for now essentially as a placeholder for content offerings to come. |
|
|
|
|
· |
Today, a visit to the website shows
teasers of content offerings to come, such as the one-minute interviews from the Tribeca Film Festival. |
|
|
|
|
· |
The Company is in negotiations for
a number of original program offerings with various companies and is working on preparing to launch a fully operational, ad
revenue and subscription revenue generating model. |
|
|
|
|
· |
The growth of the business model
will be advertising revenue based upon the number of site visits and subscribers signing up to the site, both of which are
predicated upon the quality of the content. |
Description of the Revenue Model for Zonzia Website
Advertisers will be provided
access to our internet website to compliment the content offerings. Our intent is that advertisers for our website will
be solicited and contracted by an outside advertising agency. Advertisers would then pay us on the number of times one of
our shows is viewed. The benchmark metric for this calculation is known as CPM (cost per thousand views). The CPM for our
website will be calculated and reported by a third party vendor, UM Technologies, who is also our website and
infrastructure provider. Once the tracking report has been issued and the CPMs calculated, an ad agency (to be selected)
would invoice the advertisers, collect the payments and wire the funds into Zonzia’s bank account. The usual and
customary receivable timetable is net 60 days from national advertising agencies, and net 30 days in dealing directly with
advertising companies.
Through our multi-platform distribution
channel agreement with simplyME Distribution LLC, we have access to Flipps.com which is a mobile app provider platform that gives
us access to and the ability to connect on any internet connected television and smart-televisions, including:
A user may simply download the Flipps App on an iPhone or
Android device, and then enjoy full access to the then-available Zonzia content.
Additionally, over time we plan to
give our viewers access to social media pages, behind the scenes access, games, and more. We also anticipate
providing our viewers with the opportunity to receive instant coupons from our participating advertisers.
Offerings Under Development
Our strategy involves
our continued effort to develop the following core offerings. Please see “Management’s Discussion & Analysis
– Plan of Operations” for more information.
Zonzia (Over-The-Top) Channel
We plan to make our content readily
available on computers, tablets, mobile devices, and other connected devices. Our content will be posted on www.zonzia.com.
Video on Demand (VOD) / Subscription
Video on Demand (SVOD)
We have entered into a Letter
of Intent with Georgeville TV in connection with the intended development, co-production and
distribution of a 10 episode original series currently titled “Z- Inspired by Zorro.” By the terms of this
agreement, once a number of development elements have successfully been met, Zonzia would have an initial funding commitment
of $1,200,000 to fund preproduction activities and the scripts for certain episodes ahead of the parties
“greenlighting” the Series. Under the letter of intent, if the Series is ultimately produced, Zonzia would have
additional funding requirements and would retain all of the U.S. VOD, SVOD and linear (television channel) broadcast and
exhibition rights to the series for 2 years and the rights to extended seasons. A copy of this letter of intent is filed as
an exhibit to the registration statement of which this prospectus is a part.
We anticipate that our Video on Demand
(VOD) and Streaming Video on Demand (SVOD) offerings will include full length feature films, TV series, documentaries, live events
and general programming. We are cross-soliciting film, TV and live event promoters, offering them a number of unique and favorable
deal options which will allow them to have direct access to our targeted demographics including charging them up-front production
fees and entering into revenue sharing deals. By matching video and live event producers and promoters with our advertising customers,
advertisers will have the ability to produce and embed user-targeted commercials in our VOD and SVOD offerings. Our intention
is that by providing entertaining content to an expanding end user base, our brand awareness will increase, enabling
us to develop strong relationships and retention rates with our advertisers, ecommerce and other brand partners.
In addition to being able to deliver
innovative and entertaining content across all of our delivery platforms, our overall success is heavily dependent on our ability
to develop nationwide brand recognition which is intended to result in a significant viewer and ultimately consumer base. Our
brand recognition and viewer base are expected to drive rapid expansion of individual consumer impressions that are essential
in the development and effectiveness of our advertising program offerings. Since we generate advertising revenue from the number
of user impressions we achieve, our content and other product offerings must be attractive to our individual users.
Viewer Subscriptions
As we launch our delivery platforms,
particularly our website and mobile applications, our content and accompanying interactive services may be initially available
for free for limited periods in order to aggressively increase our brand awareness and consumer base.
As our brand awareness and consumer
base gains momentum, we will launch a targeted subscription campaign drive which we anticipate will begin in the fourth quarter
of 2015 or the first quarter of 2016. Subsequent to the initial launch and trial period, we expect to begin charging subscribers
a monthly fee of $4.99 per month. Our content offerings may include sporting events, concerts, and live performances.
Advertising
To date, our advertising relationships
have evolved through our agreement with simplyME Distribution LLC. That agreement contemplates that advertisers may advertise
through video, sponsorship and/or banner advertising slots. Under our agreement with simplyME, we will evenly split all advertising
revenue generated pursuant to that agreement with simplyME. The core revenue model for monetizing the three platforms, is advertising
driven. Advertisers pay on a Cost Per Thousand Impression (CPM) basis. For example, if our CPM rate was at $30 and our platforms
are visited (tuned on or turned on) for a viewership of 10 million views, that would equate to $300,000 in revenue. If a consumer,
or hotel patron is tuned to our channel and particular advertising is shown while the event or programming is being viewed, then
the views are recorded, verified, and the advertiser is invoiced at the CPM rate.
We intend to use advertising as a means
of generating revenue by engaging users on all of our Platforms, including our website, www.zonzia.com, mobile applications, and
VOD and other channel offerings.
Our advertising program, which provides
our customers many different options, is designed to maximize relevance to search queries and web content. Our advertising options,
which will be specifically co-designed by our sales and marketing team, will allow our customers to create targeted ads to appear
beside related search results or web content on our websites and include:
|
· |
Display Advertising – This includes banner ads and consists of text and graphics based ads that appear next to content relevant to the various product offerings. We will offer these banner ads in several sizes, allowing for each to contain logos, pictures, other graphics and video. |
|
· |
Display Advertorials – Display advertorials are
advertisements in the form of editorial content and designed to provide consumers additional insights to our customers’
products or services. Advertorials are generally limited to 500 words and may be created by our content development team
or may be provided directly by the customer or the customer’s representative. Advertorials are believed to be the
most cost-effective digital advertising, based on their high search engine optimization. |
|
· |
Native Advertising – Native advertising programs are designed to specifically match content and advertising directed at smaller, targeted groups of users based on specific interests. |
|
· |
Video Advertising – Similar to television commercials widely seen on network TV, video advertisements will run throughout some of our streaming video offerings. |
Sales and Support
Our sales support, billing systems,
customer tracking and revenue collection efforts are provided by a third party vendor, UM Technologies, who is also our website
and infrastructure provider.
Pursuant to an IT Services Agreement between the Company
and UM Technologies dated September 8, 2014, UM Technologies develops and maintains software systems for the Company, which are
used for sales support, billing and revenue collection. The agreement contemplates a total of $780,000 in payments being made
over a one-year period. Under the agreement, the Company has a royalty-free, non-transferable rights to use the software developed
by UM Technologies, and UM Technologies retains rights with regard to techniques, know-how, and source code developed in the course
of the engagement. UM Technologies provides a limited warranty with regard to its work during the term of the engagement and for
one month thereafter. A copy of this IT Services Agreement is filed as an exhibit to the registration statement of which this
prospectus is a part.
We are targeting developing
and growing our sales and support infrastructure in-house as cash flow and talent become available. When we are in a position
to perform these functions internally, we expect to initially operate from leased offices in Los Angeles and New York City,
with the Los Angeles facility encompassing a production facility where we will produce some of our own
original content.
Marketing
In line with our overall business plan,
we are focusing on the continued growth and recognition of our brands through providing meaningful content and high-quality products
and consumer experience. Our marketing, promotional and public relations activities are designed to promote our brand image and
differentiate it from competitors. In doing so, we believe our viewer, and ultimately our consumer base, will grow rapidly
and provide our customers with increasing impressions, allowing for maximization of advertising efforts.
Investor Relations
We engaged Benchmark Advisory Partners LLC of Del Mar, California
as our investor relations firm pursuant to a Consulting Agreement dated May 5, 2015. We believe they will use the available public
information to make a concerted effort to reach and engage the current shareholders as well as assist in information and press
release dissemination. The term of the Consulting Agreement is six months, and we paid this consultant a one-time fee of 500,000
shares of restricted stock upon signing the agreement. A copy of this Consulting Agreement is filed as an exhibit to the registration
statement of which this prospectus is a part.
Information Technology and Intellectual
Property
We have engaged UM Technologies to
build the infrastructure to support our content delivery platforms, pursuant to the IT Services Agreement described above. We
have, and expect to continue to invest heavily in this infrastructure on an on-going basis.
Intellectual property rights involving
our technology platforms are important to the future success of our Company. As a result, we consider the acquisition and
maintenance of certain protectable and enforceable rights in patent, trademark, copyright, trade dress, trade secret and know
how in those technology platforms to be important to the future growth of our Company, and in that regard we intend to continue
to maintain and to formalize on a going forward basis rights in our service marks, our trademarks, our copyrighted materials
and content, our website and mobile applications, our domain names and our patentable business methods, as needed. With respect
to our trade secrets and know how in our technology platforms, we have and will continue to maintain a regime of entering into
protective confidentiality and intellectual property license agreements with our employees, our customers, our partners and other
third parties to protect our confidential technology and business information.
As of the date of this report the Company
has filed Trademark Applications with the USPTO for:
|
§ |
ZONZIAKIDZ |
Serial Number 86656259 |
|
§ |
ZONZIA |
Serial Number 86656246 |
|
§ |
Zonzia |
Serial Number 86656250 |
|
§ |
ON (stylized) |
Serial Number 86656262 |
|
§ |
On (stylized) |
Serial Number 86656267 |
Content Strategy
We have expended
significant financial and other Company resources in developing our content strategy and expect to do on an on-going basis.
Our overall strategy is to provide, together with our business partners, a generous mix of an established video libraries
consisting of well-known movies, television shows, historical sporting events, documentaries and docu-movies; as well as
original productions and co-productions contingent upon adequate funding.
The competition for well-known, critically
acclaimed, and highly-rated programming across all genres is intense, and most of our competitors consist of large companies with
well established brands and significantly greater resources.
Our business model and content strategy
is based around our ability to sell advertising, taking advantage of the careful monitoring and analyzing of our consumer demographics.
We believe our model provides our advertisers the ability to achieve significant value in their marketing strategy, through knowing
their audience in advance. If we effectively monetize our user demographics and experience satisfaction, we believe this would
serve as a competitive strength as we seek to enter into favorable licensing and revenue sharing arrangements with our content
developers and potential licensing partners.
Video
We believe the growing demand for streaming
entertainment, increasingly available on mobile devices and tablets, is evident from the increasing development activity from
major cable networks, film and production studios, and sports leagues to name a few. Companies like Netflix, one of the first
and most well-known brands streaming digital content, have experienced extreme success in rapidly building their brands and market
share while monetizing that success by requiring users to pay fees. We believe that our business model and content strategy allows
us to provide users a unique and entertaining streaming digital experience for certain of our products.
We anticipate that our streaming platforms
will allow aspiring film, short film and television directors/producers to showcase their accomplishments in addition to showings
of other first run movies and live streaming concerts and sporting events. We anticipate that our movies, short films and
television shows will include various genres, such as documentaries, docu-series, biopics and children’s programming. Our
strategy and safety policies strictly prohibit the streaming of adult entertainment and any form of pornography.
We also are seeking commercial arrangements
with concert and sporting event promoters in which we would charge them a production fee to reach the targeted demographics that
our website, mobile applications, and other distribution channels provide. Additionally, our officers have relationships with a
significant number of freelance video contributors.
Competition
The digital broadcasting industry is
intensely competitive and many of our competitors are well established internet companies, ecommerce and search engine companies,
television networks and conglomerates. Many of these competitors have significantly greater financial resources and may prove
to be more attractive to our content providers and developers.
Our business is characterized by rapid
change and converging, as well as new and disruptive, technologies. We face formidable competition in every aspect of our business,
particularly from companies that seek to connect people with information on the web and provide them with relevant advertising.
Our advertising business faces competition from:
|
· |
Various types of search engines, ecommerce websites, news-based content providers and other media and entertainment based sites. Many of these sites have more established brands and possess significant financial resources causing significant barriers to entry. |
|
· |
Other forms of advertising, such as television, radio, newspapers, magazines, billboards and yellow pages, for ad dollars. Our advertisers typically advertise in multiple media, both online and offline. |
|
· |
Providers of online products and services. Our online products and services compete directly with new and established companies, which offer communication, information and entertainment services integrated into their products or media properties. |
We compete to attract and retain users,
for whom other products and services are literally one click away, primarily on the basis of the relevance and usefulness of our
content, features, availability and ease of use of our products and services.
Employees
We presently have five full-time corporate
officers including: Chairman of the Board and Chief Business Development Officer Myles A. Pressey III, Naresh Malik -- Chief Executive
Officer, Lynwood Bibbens -- Chief Strategy Officer, Johnathan F. Adair -- Chief Operations Officer, and Stanley L. Teeple -- Chief
Compliance Officer. Frank McEnulty, our Chief Financial Officer, is in the process of winding down his other private company obligations
and presently contributes approximately 75% of his time to the Company, with the expectation to become full-time with the Company
by the end of 2015.
Our operations are overseen directly
by our corporate officers. Our officers oversee all responsibilities in the areas of corporate administration, business development
and research. The Company contemplates engaging a full-time Chief Content Officer as business and cash flow allow for the expansion.
We intend to expand our current sales and
marketing teams; administrative teams; and content and business development teams. Competition for qualified personnel in our industry
is intense.
Seasonality
We do not expect seasonality to have
a material impact on our business.
Research and Development
We do not expect to incur material research
and development costs for the next 12 months.
Government Regulation
We are subject to numerous domestic and
foreign laws and regulations covering a wide variety of subject matter. New laws and regulations (or new interpretations of existing
laws and regulations) also may impact our business. The costs of compliance with these laws and regulations are high and are likely
to increase in the future. Any failure on our part to comply with these laws may subject us to significant liabilities and other
penalties.
Corporate History
Zonzia Media, Inc. was originally incorporated
in 1981 in the State of Nevada. In December 2005, following a recapitalization that resulted in a change of control, Indigo was
an independent energy company that engaged primarily in the exploration of natural gas and oil in the Appalachian Basin in Pennsylvania,
West Virginia, Illinois, and Kentucky through December 2010. These activities were carried out on leased properties,
some of which were proven, primarily through the entry into joint venture and other operating agreements.
In December 2010, the Company’s management
was notified by a representative of the New Jersey Attorney General’s Office (“NJAG”) that they were pursuing
a civil action against Everett Charles Ford Miller (“Everett Miller”) and related entities alleging violations of securities
laws amongst others. At the time of the civil action, Everett Miller was a Board Member of the Company, a significant shareholder,
and a significant note holder. On December 17, 2010, the Company was named as a nominal defendant in the civil complaint as a result
of Carr Miller Capital’s significant investment in the Company. At the time, and through the date of this filing,
there have been no allegations of wrongdoing on the Company’s part but the complaint does state that the Company was unjustly
enriched by the actions of Carr Miller Capital. The Company had no knowledge of any wrongdoing alleged to have been
committed by Everett Miller and a release from the NJAG was ultimately obtained on July 29, 2013.
On July 29, 2013, a group of large equity
and debt holders formed a new entity, New Hope Partners, LLC, and entered into a settlement agreement with the receiver to effectively
purchase a majority interest in the Company. The closing of the transaction between the receiver and New Hope Partners resulted
in a change of control of the Company (for more detail, including the settlement agreement, see Current Report on Form 8-K filed
August 5, 2013).
Subsequent to New Hope Partners obtaining
a controlling interest in the second half of 2013, the Company’s primary focus was on organizational efforts, settling previously
outstanding obligations on the best terms possible, and re-establishing its regulatory compliance. On May 12, 2014 the Company
filed its annual report on Form 10-K for the fiscal year ended December 31, 2013 and believes it has subsequently been current
with its periodic filing requirements under the Exchange Act of 1934. Additionally and as further discussed below, the Company
settled over $12 million of previously accrued liabilities primarily through the issuance of shares of restricted common stock
during the first half of 2014.
Since entering into a plan of merger on
May 25, 2014, as amended on September 2, 2014 and November 20, 2014, the Company has been engaged in the digital publishing and
broadcasting business. In this regard, the Company completed a merger with HDIMAX, Inc., a private operating company, on November
21, 2014 and changed its name to HDIMAX Media, Inc.
On January 22, 2015, the Company entered
into a Settlement Agreement with the former owner of HDIMAX, Inc. effectively and substantively cancelling the merger. For additional
details, including a copy of the Settlement Agreement, please see our Current Report on Form 8-K filed on January 29, 2015.
On March 9, 2015 the Company changed its
name to Zonzia Media, Inc. and its ticker symbol changed to “ZONX”. The Company is aggressively developing its digital
content and multi-platform entertainment distribution channels.
Where You Can Find More Information
We file annual, quarterly and other requisite
filings with the U.S. Securities and Exchange Commission (the “SEC”). Members of the public may read and copy materials
that we file with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Members
of the public may obtain additional information about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
The SEC also maintains an internet site that contains reports, proxy and information statements and other information regarding
issuers that file electronically with the SEC. That site is located at http://www.sec.gov.
You also may request a copy of our filings,
at no cost, by writing or telephoning us at:
Zonzia Media, Inc.
74 N. Pecos Road, Suite D
Henderson, Nevada 89074
Telephone: (702) 463-8528
Attention: Investor Relations
Consequence of Delays
The timing and successful execution of
our overall business strategy is dependent upon our current ability to raise additional capital at terms favorable to us. If outside
funds are not obtained through the sale of securities or other financing arrangements, the Company’s revenues will be limited.
DESCRIPTION OF PROPERTY
As of July 9, 2015, the Company did
not have any owned or leased property.
LEGAL PROCEEDINGS
Congoo, LLC v. HDIMAX Max Media, Inc.
Civ. Action No. 3:15-cv-01423
The Plaintiff’s in the case provide
online advertising opportunities for a fee. The Plaintiff alleged the Company owes them in excess of $422,000 based on an agreement,
dated prior to our merger, with an entity controlled by our former Chairman and Chief Executive Officer. The plaintiff alleges
that the entity with the prior agreement merged into our Company and changed the name. We are contesting the claim and have filed
an initial response on March 23, 2015.
On April 24, 2015 the Plaintiff’s
attorney notified the district court judge requesting our adjournment from participation in the complaint and that we may be entitled
to a dismissal. It is expected that by July 24, 2015, the Plaintiff will file an Amended Complaint.
From time to time, we are involved in lawsuits,
claims, investigations and proceedings that arise in the ordinary course of business. There are no matters pending that we expect
to have a material adverse impact on our business, results of operations, financial condition or cash flows.
MANAGEMENT’S DISCUSSION AND ANALYSIS
The following discussion of our financial
condition and results of operations should be read in conjunction with (i) our audited financial statements for the period from
May 24, 2014 (inception) through December 31, 2014 and (ii) the unaudited financial statements for the period ended March 31, 2015
that appear elsewhere in this registration statement.
This registration statement contains
certain forward-looking statements and our future operating results could differ materially from those discussed herein. Certain
statements contained in this discussion, including, without limitation, statements containing the words “believes”,
“anticipates,” “expects” and the like, constitute “forward-looking statements” within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the
Exchange Act). However, as we will issue “penny stock,” as such term is defined in Rule 3a51-1 promulgated under the
Exchange Act, we are ineligible to rely on these safe harbor provisions. Such forward-looking statements involve known and unknown
risks, uncertainties and other factors which 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. Given these uncertainties,
readers are cautioned not to place undue reliance on such forward-looking statements. We disclaim any obligation to update any
such factors or to announce publicly the results of any revisions of the forward-looking statements contained herein to reflect
future events or developments. For information regarding risk factors that could have a material adverse effect on our
business, refer to the Risk Factors section of this prospectus beginning on page 4.
Overview
We are a new multi-platform
entertainment distribution channel with the goal of being a unique hybrid of a linear channel, a video-on-demand channel and
an over-the-top channel. Viewer immersion technology will allow instant access to our available content. Upon the full launch
of our delivery platforms, which is contingent upon our receipt of adequate funding, we intend to deliver all kinds of
innovative entertainment including:
|
· |
Original Programming – featuring documentaries,
short films, mini-series, and television shows of all genres produced and directed by well-known individuals within the entertainment
industry as well as up and comers. |
|
· |
Feature Films – full-length films
from major studio productions and independent film makers. |
|
· |
Television Shows – shows from all the
major networks as well as originally developed shows available on delivery platforms. |
|
· |
Sports, Concerts, and Live Events – streaming
sports, music, and other live entertainment events from around the world. |
Together with our content and distribution
partner simplyME Distribution, we currently offer a collection of programming through our cable television platform, which is
available in over 27 million households. Upon the full launch of all three of our delivery platforms, our core offerings are
expected to include the following:
Zonzia.com
We plan to have compelling content
offerings drive traffic to the website, which will equate to advertising fees paid by site visit. Our agreement with simplyME
provides that they will establish the advertising channels and our technology partner UM Technologies will audit the traffic and
revenue streams.
Video on Demand (VOD)
We are presently targeting
and cross-soliciting film and live event promoters, offering direct access to our targeted demographics in exchange for
an up-front production fee. By matching video and live event producers and promoters with our advertising customers,
advertisers will have the ability to produce and embed user-targeted commercials in our streaming VOD offerings. We believe
that, by providing entertaining content to our expanding end user base, our brand awareness will increase significantly,
enabling us to develop strong relationships and retention rates with our advertisers, ecommerce and other brand
partners.
Zonzia (Over-The-Top) Channel
Our Zonzia channel, via our contract
with Sonifi Solutions, Inc. provides that our content offerings for both free television as well as VOD will be available in hotel
rooms throughout the United States. The initial roll-out to approximately 300,000 hotel rooms is targeted for 3rd quarter
2015.
In addition to being able to deliver
innovative and entertaining content across all of our delivery platforms, our overall success is heavily dependent on our ability
to develop nationwide brand recognition which is intended to result in a significant viewer and ultimately consumer base. Our
brand recognition and viewer base are expected to drive rapid expansion of individual consumer impressions that are essential
in the development and effectiveness of our advertising program offerings. Since we generate advertising revenue from the number
of user impressions we achieve, our content and other product offerings must be attractive to our individual users.
Subscription Video-On-Demand (SVOD)
As we launch our delivery
platforms, particularly our website mobile applications, we anticipate that our content and accompanying interactive services
will be available for free for limited periods in order to aggressively increase our brand awareness and
consumer base.
Results of Operations
For the period from May 24, 2014 (inception)
through December 31, 2014:
The financial statements and dollar amounts
included herein are stated in United States dollars and are prepared in accordance with United States generally accepted accounting
principles.
Since HDIMAX, Inc. was considered the accounting
acquirer and surviving entity upon completion of the merger transaction on November 21, 2014 and subsequently cancelled in January
2015, the following management’s discussion and analysis provides information and analysis associated with our advertising
and content development operations. Additionally, since the inception date of HDIMAX was contained in 2014; accordingly, no 2013
comparative operational results exist and are correspondingly omitted. The results of operations are not expected to be indicative
of our future operations due to the Settlement Agreement with an effective date of January 22, 2015.
Revenue
During the period ended December 31, 2014
we generated net revenue of $439. The amount recognized was based on a lower than market net cost per impression as dictated by
our third party service provider arrangement. Through the remainder of 2015, we expect to launch our subscription services and
begin our advertising campaigns and other goods and services offerings.
Sales and Marketing
We incurred total sales and marketing expenses
of $1,006,012 during the period ended December 31, 2014. The majority of these expenses consisted of payments to third party content
developers, lead and internet impression generators, and other brand marketing expenses primarily paid on behalf on our former
website brand partners.
Officer Compensation
Officer compensation for period ended December
31, 2014 of $23,295,167 is primarily the result of accruing compensation due under employment agreements that became effective
upon the completion of the reverse acquisition of HDIMAX, Inc. Of the amount incurred for the period, $22,800,000 relates to the
obligation to issue 60,000,000 shares of common stock to former officers and directors. Upon entry into the settlement agreement
with HDIMAX, Inc. and related entities on January 22, 2015, the compensation obligations were forgiven and no shares of common
stock will be issued under the former agreements. In addition, approximately $130,000 of incurred and accrued cash based compensation
recognized during the period ended December 31, 2014 has been forgiven.
Professional Fees
The Company incurred $729,411 of professional
fees during the period ended December 31, 2014. The majority of these fees were incurred for the preparation and completion of
our reverse acquisition of HDIMAX, Inc. During the on-going ramp up of our principal business operations, through at least the
first half of 2015, we expect to continue to incur significant legal, accounting, and other consulting fees associated with entering
into material definitive contracts.
General & Administrative
Our general and administrative expenses
totaling $53,565 for the period ended December 31, 2014 were primarily associated with our on-going capital raising efforts and
administrative costs associated with the completion of the HDIMAX, Inc. acquisition. Our general and administrative costs are expected
to significantly fluctuate until we fully commence our planned principle business operations expected to occur in the second half
of 2015.
For the three months ended March 31,
2015:
Given the inception date in May 2014, the
following analysis of our results will not be based on comparisons to the comparable period during 2014, but rather with regard
to such other periods within our history as deemed applicable.
The financial statements and dollar amounts
included herein are stated in United States dollars and are prepared in accordance with United States generally accepted accounting
principles. The results of operations may not be indicative of our future operations as we continue to develop our content delivery
platforms.
The following discussion of the financial
condition and results of operations should be read together with our condensed financial statements for the three month period
ended March 31, 2015.
Revenue
We did not generate any revenue during
the three months ended March 31, 2015. Through the remainder of 2015 we expect to launch our video on demand offerings which are
expected to result in the generation of advertising revenues. Additionally, if we are successful in our funding and brand awareness
campaigns we may be able to launch our subscription service near the end of the year or in early 2016.
Sales and Marketing
For the three months ended March 31, 2015
we incurred expenses totaling approximately $163,000 for the construction and development of our content delivery platforms. Offsetting
these expenses during the first quarter of 2015 was a non-recurring reversal of a previously accrued obligation totaling $422,448.
As we continue to build our brand awareness and video and other content libraries, along with our infrastructure, we expect our
sales and marketing expenses to increase throughout the next twelve months and beyond.
Officer and Director Compensation
Officer compensation for the three months
ended March 31, 2015 of $65,675,677 is primarily the result of non-recurring stock awards to our officers and directors. Included
in officer and director compensation during the period was the recognition, totaling $9,975,000, of unrecognized compensation cost
associated with the cancellation of an unvested restricted stock award issued to a former officer.
We believe a significant portion of the
stock awards granted during the first quarter of 2015 were necessary to attract and retain individuals to serve in officer, director,
and other consulting roles. In this regard, we issued a total of 145,200,000 shares of fully vested, restricted and unregistered
shares of common stock to these individuals.
Professional Fees
The Company incurred $819,599 of professional
fees during the period ended March 31, 2015. The majority of these fees were incurred on a non-cash basis via the issuance of 3,750,000
shares of restricted and unregistered common stock granted to various consultants for business development and contract review
and generation. We expect our professional fees to steadily decline as we approach the launch date of our principal business activities.
General & Administrative
Our general and administrative expenses
totaling $322,441 for the period ended March 31, 2015 were primarily associated with our on-going capital raising efforts and other
administrative costs. Additionally, we incurred one-time charges totaling approximately $298,000 associated with the Settlement
Agreement with our former Officers and Directors. Our general and administrative costs are expected to significantly fluctuate
until we fully commence our planned principal business operations expected to occur in the second half of 2015.
Liquidity and Capital Resources
Working Capital
At December 31, 2014, we had a working
capital deficit of approximately $2,236,000, primarily due to professional service providers, officers and directors, and other
related parties.
At March 31, 2015, we had a working capital
deficit of approximately $1,250,000, primarily due to professional service providers, officers and directors, and other related
parties. Our working capital is not sufficient to meet our operations, inclusive of plans for rapid growth. Additionally, our ability
to execute our content strategy and meet our day to day liquidity needs through the remainder of the year requires us to raise
additional capital.
Accordingly, our plans presented in this
Report, particularly under “Plan of Operations” below, are dependent upon our ability to raise significant capital
in the near term. If we are unsuccessful in generating sufficient cash through operations or raising additional capital through
means such as debt issuances, equity offerings or short-term advances from related parties, we will be required to significantly
reduce our operational efforts and curtail our rapid growth strategy. Further, as of the date of this Report we do not have any
firm funding commitment.
Cash Flow
Cash Used in Operating Activities
For the period ended December 31, 2014,
our cash used in operations totaling approximately $560,000 primarily consisted of payments to service providers to prepare for,
and assist in the completion of, the merger transaction and to maintain relationships with image providers and content developers.
For the near term, and under informal agreements, many of our services providers and related parties have agreed to defer payment
until we increase our liquidity, which resulted in off-sets to our net loss and cash used in operations totaling approximately
$1,230,000. Additionally, we recognized approximately $23.6 million in stock based compensation, a non-cash premium for the assumption
of the net liabilities of HDIMAX, Inc., and debt discount amortization. As noted above, we will require additional capital in order
to monetize our content strategy and overall plan of operations.
For the three months ended March 31, 2015,
our cash used in operations totaling approximately $92,000 primarily consisted of payments to service providers to prepare and
execute our Settlement Agreement with our former officers and directors. Our operational cash used significantly declined from
the quarter ended December 31, 2014 as a result of significant, non-recurring, stock based compensation of nearly $67,000,000.
For the near term, and under informal agreements, many of our services providers and related parties have agreed to defer payment
until we increase our liquidity, which resulted in off-sets to our net loss and cash used in operations totaling approximately
$405,000. Additionally, we recognized non-cash gains of approximately $917,000 related to the reversal of previously accrued compensation
due to our former officers and an internet marketing service provider that we were released from during the period, partially off-set
by the approximately $108,000 expense for our Settlement Agreement. As noted above, we will require additional capital in order
to monetize our content strategy and overall plan of operations.
Cash Provided by Financing Activities
All of our cash for the period ended December
31, 2014 was provided by short-term notes payable, some of which were convertible and converted during the period ended December
31, 2014. The proceeds from the notes payable, including those convertible totaled $560,000.
All of our cash for the three months ended
March 31, 2015 was provided by the issuance of 585,748 shares of restricted and unregistered shares of common stock totaling $95,850.
Our ability to continue as a going concern
for at least the next 12 months will depend on our ability to raise the money we require through equity or debt financing. Through
the end of April 2015 we raised an additional $70,000 through the issuance of short-term notes payable due to related parties,
the proceeds of which were primarily used to prepare and file our annual report on Form 10-K for the period ended December 31,
2014. Further, during May 2015 we raised an additional $160,000 through the sale of our common stock in private placements to third
party investors. There is no assurance that we will be able to obtain further funds required for our continued operations or that
additional financing will be available to us when needed or, if available, that it can be obtained on reasonable terms. If we are
not able to obtain the additional financing on a timely basis, we will not be able to meet our other obligations as they become
due, and we will be forced to scale down or perhaps even cease our operations. As of the date of this Report we do not have any
firm funding commitment.
Plan of Operations
While our officers have extensive experience
in internet and channel content distribution, our company is in the early stages of pursuing our mission to entertain a global
audience through content that we license, acquire, or develop revenue share opportunities with content providers. Our primary
targeted genres include sports, movies, TV shows, comedy, music, food and health and fitness. We believe our business model and
content strategy gives us a significant opportunity to deliver value to users, developers and marketers while realizing our monetization
objectives. Keys to meeting our objectives include, but are not limited to:
|
· |
Establish multiple distribution channels
for our content, each with an extensive reach to potential users. |
|
· |
Distribute high definition television
content available through our content partner simplyME. |
|
· |
Attract popular licensed television
content. This is a targeted objective of our Advisory Board. |
|
· |
Develop a strong
ad operation setup to sell across all of our content delivery platforms, including through our distribution partner
simplyME Distribution. |
|
· |
Execute on a solid marketing strategy to promote our content on social media and top consumer websites which is under
construct ion via an agreement with technology provider UM Technologies, with an initial roll-out projected for
the 4th quarter 2015. |
The chart below summarizes some of the Company’s targeted
milestones and related timeframes with regard to its objectives to establish distribution platforms, license or develop content
and secure advertisers.
Objective: Establish Distribution Platforms
Distribution Platform |
Targeted Development Milestone
|
Targeted
Timeframe |
1.
Cable Television
Current Status: Launched with 30 programming
hours, available in 27.5 million households in Southeastern United States |
|
|
·
Household Reach |
Available in an
additional13 million households |
Fourth quarter
2015 |
·
Programming Hours |
Ÿ 90
programming hours of content |
Second quarter
2016 |
|
|
|
2.
Hotel-in-room channel
Current status: Agreement in
place with Sonifi to provide Zonzia content to Marriott and Westin Hotel Groups
|
|
|
·
Hotel Room Reach |
Initial Roll-out to approximately 450,000 hotel
rooms
Expand to 900,000 hotel rooms via VOD |
Third quarter 2015
Second quarter 2016 |
|
|
|
3.
Website: Zonzia.com
Current status: site in initial stages,
with substantive content offerings to come
|
Ÿ Partial
functions available, including VOD.
Complete website available, including original content |
First quarter 2016
Fourth quarter 2016 |
Objective: Content Development and Acquisition
Offering |
Targeted Milestone
|
Targeted
Timeframe |
Linear Programming
|
Content provided through simplyME
Original programming |
Achieved
Fourth quarter 2016
|
Zonzia
Over-the-top Channel |
|
Fourth quarter 2015
|
Video
on Demand (VOD) and Subscription Video on Demand (SVOD) |
Offer full length feature films, TV series, documentaries,
live events and general programming
|
First quarter 2016 |
Objective: Secure Advertisers across
All Distribution Platforms
Platform |
Targeted
Timeframe |
Cable
television |
Third quarter 2015 |
Hotel-in-room
channel |
Third quarter 2015 |
Zonzia.com
and original content |
Fourth quarter
2016 |
Objective: Secure Capital to Fund
Development
The timing and successful execution of
our overall business strategy is dependent upon our current ability to raise additional capital at terms favorable to us. Our officers
and directors have spent significant time and effort cultivating relationships with individuals and entities that may be interested
in investing in our Company.
Since late in 2014 through the date of
this report, our Officers, Directors and other consultants and Advisory Board Members have devoted significant time and effort
to raising the capital necessary to fully implement our principal business plans including securing content and building the required
content delivery infrastructure. While we have received positive feedback from these efforts and much preliminary interest from
potential debt and/or equity investors, we do not have any firm funding commitments as of the date of this report sufficient to
fully implement our business strategies in the near term.
Please see the section entitled “Use
of Proceeds” on page 13 for a detailed description on how the Company intends to use proceeds raised from this offering
in seeking to accomplish the development milestones set forth in this Plan of Operations.
Launch Strategy
Our content and platform launch strategy
is to produce and acquire compelling content that creates a connection with our targeted audience across desired platforms. If
we are successful in our capital raising efforts, we intend to be operating in all of our delivery platforms and subscription
services in the first quarter of 2016.
The overall objective is to drive significant
viewers to engage in the offerings of our video on demand and over the top Channel. We intend to engage in an aggressive business
to business public relations drive to rapidly evolve a marketplace for our viewers, clients, and consumers. We have also begun
forming relationship and partnerships with several large television and wireless providers that will provide us basic access to
several million households nationwide.
Develop High Quality and Entertaining
Content to Increase User Engagement
We expect to begin spending approximately
$3,000,000 dollars on the production of a series of originally created available half-hour long comedy, dramatic and romance television
shows by the first quarter of 2016. Additionally, we believe some of our potential licensing partners will require non-refundable,
prepaid royalty payments in order to present their content on our distribution platforms. The majority of the costs incurred
with this type of third party content development are paid through revenue sharing arrangements in which the vendors receive a
percentage of the impression revenue from our advertising basis. We intend to prioritize product development investments that
we believe will drive user engagement. One of our critical, near-term uses of funds is to significantly improve and expand our
content library and unique offerings. Our expenditures likely will include, at least partially, up-front payments to movie and
live event producers and/or promoters. Key to increasing our content offerings is our ability to analyze and organize vast amounts
of information in real time to enable us to select the unique content that we believe will be most interesting to show to each
user. We are focused on providing entertaining content and other products to increase engagement, representing a core part of
our strategy to maximize our long-term business performance.
Marketing and Business Development
As at March 31, 2015, we had spent over
$1,000,000 on sales and marketing expenses, reflecting our commitment to invest to improve our ad products in order to attract
more customers to work with us, to create more value for marketers and to enhance marketers’ ability to make their advertising
more relevant for users. Our advertising strategy centers on the belief that, with ad products that are relevant, well-targeted,
social and well-integrated with our content offerings, we can enhance the user experience while providing an attractive return
for marketers. We expect to continue to spend significantly in order to grow our brand awareness, develop relevant ecommerce partner
relationships and increase advertising value.
Attract and Retain Highly Talented
Management and Professional Consultants
The technology industry is highly competitive
and heavily dependent upon attracting and maintaining innovative and experienced individuals. We are heavily dependent on our officer
group, and loss of the services of these officers could have a material impact on our ability to implement our business plan.
Based on our value based approach, we seek
to engage legal, accounting and other management consulting professionals upon the completion of extensive due diligence processes
accounting for experience level, customer satisfaction and cost comparisons.
Content Storage and Delivery
We engaged UM Technologies to build
the infrastructure to store our anticipated content library on a cloud based server; provide necessary display setting conversions
allowing the content to be viewed on multiple devices including mobile phones, tablets, and televisions as well as in high definition;
and allow for direct delivery to our strategic content delivery interface partners who ultimately provide the material to our
targeted viewers.
In April 2015 we began a test of this
process in which we provided our content interface partner with a small amount of programming that became available on-demand
to over 27 million cable served household subscribers in the Southeastern Region of the United States. We have determined that
we can securely deliver and make the content available to the end user.
Through our technology partner UM Technologies
LLC we have made contact with several parties to begin building the platforms that will allow us to distribute our content securely
in a variety manners including television on demand, mobile devices, and other devices with internet capability. Through our content
partner simplyME Distribution LLC and out Channel Distribution Agreement with them, we presently have access to a mobile portal
provide via a digital app with Flipps.com.
Content Development
The key to our success is providing entertaining
and engaging content to our end users allowing us to attract subscribers and advertising clients. Under the direct supervision
of our Officers we have made significant contacts within the industry and have had preliminary meetings with various entertainers,
producers, and other developers to provide a significant volume of video and other live streaming events. While we await the financial
ability to acquire our intended content library, we believe our relationships and preliminary discussions will allow to us to rapidly
increase our content offerings.
Brand Awareness
Through our officers and other relationships
within in the industry we have begun a social media brand awareness campaign designed to attract consumers to our content delivery
platforms.
Recent Activities
Subsequent to the Settlement Agreement
with our former CEO in January 2015, we have spent significant amounts of time and effort attracting and retaining highly experienced
individuals to form our management team, Board of Directors, and Advisory Board. We believe that we have successfully attracted
and retained these individuals. Once in place, our team began the process of rebranding the Company into Zonzia Media and assessing
the value of various content delivery platforms and developing the corresponding relationships with applicable service providers.
Off Balance Sheet Arrangements
We currently do not have any off-balance
sheet arrangements.
Critical Accounting Policies and Estimates
The accompanying financial statements have
been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States
of America and have been presented on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities
in the normal course of business. These accounting principles require management to use estimates, judgments and assumptions that
affect the reported amounts of assets and liabilities as of the date of the financial statements and revenues and expenses during
the reporting period.
Our accounting policies that require significant
management judgment and estimates include:
Stock Based Compensation
We have on occasion issued equity and equity
linked instruments to employees and non-employees in lieu of cash for the receipt of goods and services and, in certain circumstances
the settlement of short-term loan arrangements. The applicable GAAP establishes that share-based payment transactions with non-employees
shall be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever
is more reliably measurable.
In these transactions, the Company issues
unregistered and restricted equity instruments.
While the Company believes that its shareholders
currently have approximately 12 million shares of freely-traded stock with a quoted market price (a Level 1input within
the GAAP hierarchy), the fair value of the unregistered and restricted shares issued in compensation transactions with non-employees
as valued by the quoted market price does not reflect the economic substance of the transactions and does not represent the Company’s
principal market, correspondingly, the quoted market price is not the most reliably measurable fair value. This determination
was based upon the liquidity restrictions placed upon our unregistered restricted equity instruments along with the quoted market
not being the most active or principal trading market.
When unregistered common shares are issued
for the settlement of short-term financing arrangements, the reacquisition price of the extinguished financing arrangement is determined
by the value of the debt which is more clearly evident, and no additional inducement expense is recognized.
In situations in which we issue unregistered
restricted common shares in exchange for goods and services, and the value of the goods and services are not the most reliably
measurable, we recognize the fair value of the unregistered restricted equity instruments based on the value of similar instruments
issued in private placements in exchange for cash in the most recent transactions (a Level 2 input within the GAAP hierarchy).
The Company has determined this methodology reflects the risk adjusted fair value of our unregistered restricted equity instruments
using a commercially reasonable valuation technique within the most active market.
Quantitative and Qualitative Disclosures
About Market Risk
Under the scaled disclosure requirements
applicable to smaller reporting companies (as defined in Item 10(f)(1) of Regulation S-K), we are not required to report quantitative
and qualitative disclosures about market risk specified in Item 305 of Regulation S-K.
DIRECTORS AND EXECUTIVE OFFICERS
The following individuals serve as directors
and executive officers of our company as of the date of this report. All directors of our company hold office until the next annual
meeting of our stockholders or until their successors have been elected and qualified. The executive officers of our company are
appointed by our board of directors and hold office until their death, resignation or removal from office.
Name |
|
Age |
|
Office |
Naresh Malik |
|
49 |
|
Chief Executive Officer |
Myles A. Pressey III |
|
58 |
|
Chairman of the Board and Chief Business Development Officer |
Lynwood A. Bibbens |
|
43 |
|
Chief Strategy Officer |
Johnathan F. Adair |
|
50 |
|
Chief Operating Officer |
Stanley L. Teeple |
|
63 |
|
Chief Compliance Officer |
Steven L. Sanders |
|
55 |
|
Director |
Frank McEnulty |
|
58 |
|
Chief Financial Officer |
Philip Fraley |
|
33 |
|
Director |
|
|
|
|
|
Advisory Board members: |
|
|
|
|
Charles R. Dutton |
|
|
|
|
Scott Steiner |
|
|
|
|
Naresh Malik
Mr. Malik has served as the Company’s
Chief Executive Officer since April 2015. Prior to joining Zonzia Media, Mr. Malik served as President – Media and Creative
Services, for Reliance Media Works. Reliance Media Works Limited is a film and entertainment Services Company and a member of
the Reliance Group, from January 2010 to April 2015. The Group has a comprehensive presence in Film and Media Services, Productions,
Sales & Distribution and Exhibition; Motion Picture Processing and DI; Film, Audio Restoration and Image Enhancement; 3D;
Digital Mastering: Studios and Equipment rentals; Visual Effects; Animation; Broadcast, Television Commercials Post Production
& Feature Film Promotion services with presence across India, USA and UK and offers end to end integrated services across
the entire film and media services value chain to production houses, studios and broadcasters, globally. Mr. Malik resigned his
position with Reliance Media Works in order to take the helm as CEO of Zonzia Media, Inc.
In connection with Mr. Malik’s’
appointment as the Company’s Chief Executive Officer, Mr. Malik entered into an employment agreement with the Company on
April 15, 2015. The employment agreement provides for an initial term of four years, with an automatic one-year renewal thereafter,
unless the employment agreement is terminated by advance written notice of either party. Under the terms of the employment agreement,
Mr. Malik receives a base salary in the amount of $250,000 per year. Subject to the discretion of the CEO and the Board of Directors,
Mr. Malik shall be eligible for an annual bonus of not less than fifteen percent (15%) and not more than thirty-five percent (35%)
of annual base salary. Mr. Malik shall receive an initial grant of 5,000,000 shares of the Company’s restricted common stock
within 30 days of signing the employment agreement, and will be granted 2,500,000 additional shares of the Company’s common
stock on each of the subsequent four anniversaries of the commencement of employment, should Mr. Malik continue to be employed
in good standings on such dates. The employment agreement further provides that Mr. Malik is entitled to 4 weeks of paid vacation
per year.
The Company may terminate the employment
agreement with Mr. Malik for cause, without cause, or by reason of his death or disability. Mr. Malik may terminate the employment
agreement for any reason by advance written notice. If the employment agreement is terminated by reason of death, disability,
resignation by Mr. Malik or termination by the Company without Cause (as defined in the employment agreement) then the Company
will be required to pay to Mr. Malik severance pay of four months base compensation and continue all other benefits under the
agreement for a period of four months. If the Company terminates the employment agreement for Cause, then Mr. Malik will only
be entitled to the base salary and benefits earned through and including the date of termination. Mr. Malik has agreed not to
compete with us during the term of his employment agreement and for a period of twelve months thereafter. We also agree to indemnify
Mr. Malik pursuant to the employment agreement.
With over two decades of experience in
management and core skills within the Media & Entertainment business, Mr. Malik has been in the Executive Positions at Reliance,
Prime Focus, Pixion, Ideal System Asia Pacific amongst others.. Having led the function of Global Sales, Production and Transmission
for Film and Broadcast Industry has given him the unique and unparalleled expertise across this sector.
Myles A. Pressey III
Since September 2014, Mr. Pressey has
devoted his full time to the Company, first as Chief Business Development Officer and then, beginning in late January 2015, as
both Chairman of the Board and Chief Business Development Officer. Throughout his career, Mr. Pressey served in many roles in
investment and relationship management. Mr. Pressey has provided financial advisor services to high net worth individuals, represented
retired professional basketball players in sponsorship deals and negotiated and managed endorsement and television appearance
deals for athletes and entertainers. From February 2012 through July 2014, Mr. Pressey has owned and operated Regency Park Entertainment,
an independent film production and finance company. From January2010 to January 2012, Mr. Pressey was the Managing Director of
Film & Media at Sun Center Studios, Pennsylvania’s only state-of-the-art sound stage facility and campus dedicated to
servicing major film and television production companies within the entertainment industry. Before joining Sun Center Studios
in 2010, Mr. Pressey served as the Chief Executive Officer of Pressey Padell Sports & Entertainment, which was founded in
2008 and focused on all facets of business management for athletes and entertainers. Pressey Padell Sports & Entertainment
handled not only endorsements and TV appearances but also guided each athlete and entertainer and their families through all of
their financial, marketing and endorsement matters. Mr. Pressey devotes his full time business efforts on behalf of Zonzia Media,
Inc.
In connection
with Mr. Pressey’ appointment as the Company’s Chairman of the Board of Directors and Chief Business Development Officer,
Mr. Pressey entered into an employment agreement with the Company on January 29, 2015. The employment agreement provides for an
initial term of four years, with an automatic one-year renewal thereafter, unless the employment agreement is terminated by advance
written notice of either party. Under the terms of the employment agreement, Mr. Pressey receives a base salary in the amount
of $250,000 per year. Subject to the discretion of the CEO and the Board of Directors, Mr. Pressey shall be eligible for an annual
bonus of not less than fifteen percent (15%) and not more than thirty-five percent (35%) of annual base salary. Mr. Pressey received
an initial grant of 125,000,000 shares of the Company’s restricted common stock within 30 days of signing the employment
agreement. In addition, pursuant to an amendment to Mr. Pressey’s compensation approved by the Board of Directors, Mr. Pressey
is entitled to a potential subsequent equity award; provided that this entire subsequent award is subject to the achievement of
corporate performance benchmarks set by the Board of Directors. For example, if the
Company achieves twenty-five million dollars ($25,000,000) in revenue on a consolidated reporting basis during any calendar year,
Mr. Pressey III will be entitled to the entire award of 62,500,000 shares to be issued in equal annual increments over the remaining
term of his employment agreement, all subject to Mr. Pressey’s continued servie. The employment agreement further provides
that Mr. Pressey is entitled to 4 weeks of paid vacation per year.
The Company may terminate the employment
agreement with Mr. Pressey for cause, without cause, or by reason of his death or disability. Mr. Pressey may terminate the employment
agreement for any reason by advance written notice. If the employment agreement is terminated by reason of death, disability,
resignation by Mr. Pressey or termination by the Company without Cause (as defined in the employment agreement) then the Company
will be required to pay to Mr. Pressey severance pay of four months base compensation and continue all other benefits under the
agreement for a period of four months. If the Company terminates the employment agreement for Cause, then Mr. Pressey will only
be entitled to the base salary and benefits earned through and including the date of termination. Mr. Pressey has agreed not to
compete with us during the term of his employment agreement and for a period of twelve months thereafter. We also agree to indemnify
Mr. Pressey pursuant to the employment agreement.
Before establishing Pressey Padell
Sports& Entertainment, Mr. Pressey held various business and investment management roles. Mr. Pressey holds a Bachelor of
Arts Degree from Antioch University.
Mr. Pressey’s experience with
current and retired professional athletes, entertainers, capital market and investment and business management is critical to
our content, marketing and business development strategy that is centered around our ability to establish and maintain long-term
relationships with content providers across all of our media offerings.
Lynwood A. Bibbens
Mr. Bibbens has served as the Company’s
Chief Strategy Officer since January 2015. Prior to that, Mr. Bibbens was self-employed from January 2010 through December 2014
developing a series of programming and content driven relationships in the technology and broadcasting industry. Mr. Bibbens is
a serial entrepreneur who's founded and sold several technology and e-commerce companies including American Discount Warehouse,
a company he founded in 1996 and sold in 3 years for over 10 times EBITDA. Mr. Bibbens has the ability to foresee the needs of
Distributors, Brands, and Consumers as such he has formed long term relationships with corporations such as Samsung, Toshiba,
Vizio, Amazon, CBS and Comcast. From 2007, Mr. Bibbens has focused on the Media and Entertainment industry by integrating multiple
dynamic content platforms that use proprietary technology which enable top Brands to better understand their clients. He has teamed
up with Syndication partners Dailymotion, Google, Roku, Opera, X Box, Dish, Comcast, Verizon, and Amazon. Mr. Bibbens also sits
on the board of several companies; Adelman Enterprises, New England Technology, Moblty, and The Invictus Firm. Presently Mr. Bibbens
devotes his full-time business activities to Zoznia Media, Inc.
Mr. Bibbens also co-founded and launched
The Invictus Firm, a Private Equity & Strategic Consulting Firm, based on his extensive background in Technology, Entertainment
Content, Distribution and Syndication. Mr. Bibbens’ investment focus is on existing and new Technology companies that are
dynamic and disruptive, specifically, companies that can capture and monetize content across multiple platforms while being able
to capture critical data in real time. Over his 20+ years of experience, Mr. Bibbens has been directly involved with structuring,
advising and distributing global private equity deals.
In connection with Mr. Bibbens’
appointment as the Company’s Chief Strategy Officer, Mr. Bibbens entered into an employment agreement with the Company on
January 29, 2015. The employment agreement provides for an initial term of four years, with an automatic one-year renewal thereafter,
unless the employment agreement is terminated by advance written notice of either party. Under the terms of the employment agreement,
Mr. Bibbens receives a base salary in the amount of $250,000 per year. Subject to the discretion of the CEO and the Board of Directors,
Mr. Bibbens shall be eligible for an annual bonus of not less than fifteen percent (15%) and not more than thirty-five percent
(35%) of annual base salary. Mr. Bibbens received an initial grant of 5,000,000 shares of the Company’s restricted common
stock within 30 days of signing the employment agreement, and will be granted 2,500,000 additional shares of the Company’s
common stock on each of the subsequent four anniversaries of the commencement of employment, should Mr. Bibbens continue to be
employed in good standings on such dates. The employment agreement further provides that Mr. Bibbens is entitled to 4 weeks of
paid vacation per year.
The Company may terminate the employment
agreement with Mr. Bibbens for cause, without cause, or by reason of his death or disability. Mr. Bibbens may terminate the employment
agreement for any reason by advance written notice. If the employment agreement is terminated by reason of death, disability, resignation
by Mr. Bibbens or termination by the Company without Cause (as defined in the employment agreement) then the Company will be required
to pay to Mr. Bibbens severance pay of four months base compensation and continue all other benefits under the agreement for a
period of four months. If the Company terminates the employment agreement for Cause, then Mr. Bibbens will only be entitled to
the base salary and benefits earned through and including the date of termination. Mr. Bibbens has agreed not to compete with us
during the term of his employment agreement and for a period of twelve months thereafter. We also agree to indemnify Mr. Bibbens
pursuant to the employment agreement.
Johnathan F. Adair
Mr. Adair has served as the Company’s
Chief Operating Officer since January 2015. Mr. Adair is a seasoned veteran and well versed in all aspects of the entertainment
industry with over 20 years of experience. Mr. Adair’s background includes post at Sony Pictures Entertainment, Universal
Pictures, The Walt Disney Company and the Los Angeles Philharmonic. From February 2012 through December 2014, Mr. Adair served
as a partner at Regency Park Entertainment, an independent film production and finance company. From January 2010 to January 2012
Mr. Adair served as a partner at Valley Vista Entertainment an independent film and TV production company. At Sony Pictures, Mr.
Adair created and guided the marketing strategies for the company’s licensed consumer products division including the blockbuster
Spiderman 2, which broke both box office and licensed sales records. At Universal Pictures, Mr. Adair ran the worldwide marketing
operations for Universal Home Entertainment Productions representing over $120 million in revenue. While at the Walt Disney Company,
Mr. Adair directed the consumer products marketing and promotional strategies for the Winnie The Pooh and Mickey Mouse brands
and Disney’s television and live action film properties. Mr. Adair devotes full-time of his business efforts to Zonzia Media,
Inc.
In connection with Mr. Adair’
appointment as the Company’s Chief Operating Officer, Mr. Adair entered into an employment agreement with the Company on
January 29, 2015. The employment agreement provides for an initial term of four years, with an automatic one-year renewal thereafter,
unless the employment agreement is terminated by advance written notice of either party. Under the terms of the employment agreement,
Mr. Adair receives a base salary in the amount of $250,000 per year. Subject to the discretion of the CEO and the Board of Directors,
Mr. Adair shall be eligible for an annual bonus of not less than fifteen percent (15%) and not more than thirty-five percent (35%)
of annual base salary. Mr. Adair received an initial grant of 5,000,000 shares of the Company’s restricted common stock
within 30 days of signing the employment agreement, and will be granted 2,500,000 additional shares of the Company’s common
stock on each of the subsequent four anniversaries of the commencement of employment, should Mr. Adair continue to be employed
in good standings on such dates. The employment agreement further provides that Mr. Adair is entitled to 4 weeks of paid vacation
per year.
The Company may terminate the employment
agreement with Mr. Adair for cause, without cause, or by reason of his death or disability. Mr. Adair may terminate the employment
agreement for any reason by advance written notice. If the employment agreement is terminated by reason of death, disability, resignation
by Mr. Adair or termination by the Company without Cause (as defined in the employment agreement) then the Company will be required
to pay to Mr. Adair severance pay of four months base compensation and continue all other benefits under the agreement for a period
of four months. If the Company terminates the employment agreement for Cause, then Mr. Adair will only be entitled to the base
salary and benefits earned through and including the date of termination. Mr. Adair has agreed not to compete with us during the
term of his employment agreement and for a period of twelve months thereafter. We also agree to indemnify Mr. Adair pursuant to
the employment agreement.
An accomplished and award winning violinist
and pianist, Johnathan headed the marketing and communications divisions of the Los Angeles Philharmonic Association. Johnathan
began his career at Sony Music where he served in the business affairs, marketing and A&R divisions. Johnathan is a graduate
with honors of Harvard University.
Stanley L. Teeple
Mr. Teeple has served as the Company’s
Secretary and Chief Compliance Officer since December 2014. From October 2006 through December 2010 Mr. Teeple was Chief Financial
Officer for Indigo-Energy, Inc. (a former name of the Company). From January 2011 through September 2013, as President of Stan
Teeple, Inc., Mr. Teeple provided services as Chief Financial Officer and provided consulting services for various companies,
including Element Renewal, a privately held water treatment company. In October 2013, Mr. Teeple undertook the engagement from
New Hope Partners LLC, a privately held group of shareholders of Indigo-Energy, Inc., to work on the turnaround and compliance-related
efforts, in hopes of returning the company to fully-reporting status. In May 2014, that task was accomplished and Indigo Energy
engaged Mr. Teeple as its interim CFO and consultant. That engagement continued until December 1, 2014 when the Company named
Mr. Teeple as its Chief Compliance Officer and Secretary.
In connection with Mr. Teeple’
appointment as the Company’s Secretary and Chief Compliance Officer, Mr. Teeple entered into an employment agreement with
the Company on December 1, 2014 and a subsequent Modification Agreement on January 29, 2015. The employment agreement and modification
provides for an initial term of four years, with an automatic one-year renewal thereafter, unless the employment agreement is
terminated by advance written notice of either party. Under the terms of the employment agreement, Mr. Teeple receives a base
salary in the amount of $250,000 per year. Subject to the discretion of the CEO and the Board of Directors, Mr. Teeple shall be
eligible for an annual bonus of not less than fifteen percent (15%) and not more than thirty-five percent (35%) of annual base
salary. Mr. Teeple received an initial grant of 5,000,000 shares of the Company’s restricted common stock within 30 days
of signing the employment agreement, and will be granted 2,500,000 additional shares of the Company’s common stock on each
of the subsequent four anniversaries of the commencement of employment, should Mr. Teeple continue to be employed in good standings
on such dates. The employment agreement further provides that Mr. Teeple is entitled to 4 weeks of paid vacation per year.
The Company may terminate the employment
agreement with Mr. Teeple for cause, without cause, or by reason of his death or disability. Mr. Teeple may terminate the employment
agreement for any reason by advance written notice. If the employment agreement is terminated by reason of death, disability,
resignation by Mr. Teeple or termination by the Company without Cause (as defined in the employment agreement) then the Company
will be required to pay to Mr. Teeple severance pay of four months base compensation and continue all other benefits under the
agreement for a period of four months. If the Company terminates the employment agreement for Cause, then Mr. Teeple will only
be entitled to the base salary and benefits earned through and including the date of termination. Mr. Teeple has agreed not to
compete with us during the term of his employment agreement and for a period of twelve months thereafter. We also agree to indemnify
Mr. Teeple pursuant to the employment agreement.
Over the last 30 years Mr. Teeple has
held numerous senior management positions in a number of public and private companies across a broad spectrum of industries. Additionally
he has operated and worked for various court appointed trustees and principals as CEO, COO, and CFO in the entertainment, pharmaceuticals,
food, travel, and tech industries. He previously operated his consulting business on a project-to-project basis, and holds various
other directorships and now devotes full time to Zonzia Media, Inc.. His businesses operational strengths include knowing how
to manage and maximize the resources and preserve the integrity of a company from start-up through to maturity.
Steven L. Sanders
Mr. Sanders has served as a member
of the Board of Directors of Zonzia Media, Inc. since February 19, 2105. As Chairman, CEO, and Chief Investment Strategist (CIS)
at StoneRidge Investment Partners, LLC since 2009, Steven Sanders is a leader in the money management industry. Mr. Sanders has
led multiple firms to growth and profitability over his extensive 30-year career. In 2009, Mr. Sanders led the growth of StoneRidge
from $200 Million to $1.2 Billion in assets under management while driving enhancements to the firm's equity investment process
and helping launch and develop StoneRidge’s suite of custom designed fixed income products.
Possessing nearly 30 years of investment
and entrepreneurial experience, Mr. Sanders serves as Board Chairman of Beltraith Capital, LLC, a holding company formed by Mr.
Sanders to raise capital and acquire a controlling interest in StoneRidge in 2009.
Prior to joining StoneRidge, from 2006-2009,
Mr. Sanders served as Chief Investment Strategist at Creative Financial Group Asset Management, with $1.8 Billion in assets under
management. During that period, Mr. Sanders Co-founded and served as Chairman & CEO of First Genesis Financial Group, a subdivision
of Creative Financial Group. While there, Mr. Sanders developed and co-managed the firm’s absolute return, macro-economic
thematic investment strategy.
Mr. Sanders has provided economic
and financial market commentary to national and local television networks such as CNBC, Bloomberg, CNN, ABC World News, Fox
TV, and CN8’s Money Matters Today. His presentations on Macro Economics and Financial Markets are in demand at many
investment conferences. Mr. Sanders has served as a spokesperson for Citibank Master Card and Visa’s national financial
education program and authored a booklet about the virtues of saving and spending wisely, “Money Matters for Young
Adults”. Since 2007, he has co-hosted Financial Voices; a weekly financial and economic awareness program which airs on
900AM WURD Radio in Philadelphia and broadcast internationally via the web. Mr. Sanders serves as Chairman of the Investment
Committee for The Philadelphia Foundation, a member of the Board of Trustees at the Pennsylvania Academy of Fine Arts,
Advisory Board member of The Network for Teaching Entrepreneurship Philadelphia and Board member for TOCFWH. Mr.
Sanders holds a B.B.A. in Risk Management from Howard University. His engagement provides that Zonzia issues 150,000 shares
of restricted stock annually for his service as a member of the Board of Directors.
Frank McEnulty
Mr. Frank McEnulty was appointed our
interim Chief Financial Officer effective February 19, 2015 and took over the full title as Chief Financial Officer on May 2,
2015. Mr. McEnulty devotes approximately 75% of his efforts toward his position as CFO of Zonzia Media, Inc.
Mr. McEnulty’s employment as
interim CFO was on a consulting basis compensated at $2,000 per week. With the signing of his full CFO Employment Agreement of
May 2, 2015, Mr. McEnulty assumed the full duties and responsibilities of his office and his base salary increased to $182,000
annually, and an initial stock issuance of one-million shares of stock. His agreement also provides for a review within one-hear
of this agreement to adjust his compensation to a higher executive level package, if warranted.
Mr. McEnulty is an experienced financial
executive with an extensive background in finance and accounting, multiple location management, real estate development, financial
analysis, workout and mediation, presentations and public speaking, cash management, property management, business startup, development
and operations. Mr. McEnulty also currently serves as the President and CFO of Meghan Matthews, Inc., a privately owned venture
management company where he has served for the past 19 years, overseeing the start-up, investment and growth of numerous new companies
dealing with a wide variety of products. A partial list of these companies have been a music magazine, a chain of brewpub restaurants,
live music clubs in California and Tennessee, a record label, live-pay-per view events, a new surfboard technology, consumer products
and movie and video production in addition to managing the financial activities of the owners of the company and their large real
estate portfolio. Among his development projects have been major apartment complexes, single-family homes, golf-course communities,
shopping centers, and mid and low-rise condominium projects. Mr. McEnulty has been responsible for the management of thousands
of apartment units and over 2,000,000 square feet of retail space at one time. Over time, Mr. McEnulty has been responsible for
the acquisition, disposition, development and/or financing of over $750,000,000 in real estate projects. Mr. McEnulty also currently
serves on the Board of Directors of Ojai Oil Company a diversified oil producer and self-storage company and on the Board of Directors
of Cell Medx, Corp a start-up pain management company in the field of diabetics. Mr. McEnulty received his MBA in Venture Management
from the University of Southern California in 1980 and has undergraduate degrees in Accounting and Finance from California State
University at Long Beach.
Philip Fraley
Mr. Fraley is President of Real
Partners, LLC, a financial services and wealth advisory firm, where he has served since May 2012. Prior to that, Mr. Fraley served
as a Director of Guggenheim Partners from May 2010 to May 2012. He has spent the past 10 years of his career working in the
family office and investment advisory industry specializing in investment, wealth management and merchant banking for both U.S.
and international clients. Previously, Philip held positions at Guggenheim Partners and BNY Mellon. Philip is a graduate
of the University of Pittsburgh with a B.S. in Accounting.
Mr. Fraley joined the Zonzia Board
of Directors on June 3, 2015 and continues to pursue his other business interests providing Zonzia services as required. His engagement
provides that Zonzia issues 150,000 shares of restricted stock annually for his service as a member of the Board of Directors.
Advisory Board
The
Advisory Board Charter provides that Advisory Board members will assist Zonzia’s Directors, management, and specifically
the Chairman of the Board of Directors regarding business issues including marketing, content development, sales, financing, expansion,
creativity and others.
Mandate for Membership
Selection
as an Advisory Board member is due to an individual’s specific skill-set of knowledge and experiences that places him or
her on the leading edge of what Zonzia has defined as its operating model. Each member has distinct knowledge on different aspects
of business such as marketing, product development and sales techniques that are of use to the Directors. Each must be a seasoned
professional who has unique insight, knowledge, and experience in the world of entertainment, film, music, and development of
creative content. Moreover, each must have a like mind with the Board and management of the Company in areas of character, moral
codes, and faith which is so important to our corporate mission.
Charles “Roc” Dutton
Mr. Dutton
joined the Company’s Advisory Board in May of 2015 and is compensated for his contributions with an annual stock award of
75,000 shares of restricted common stock.
Charles Roc Dutton, 61 hails from Baltimore, Maryland. In his youth, Dutton had
a short-lived stint as an amateur boxer with the nickname "Roc." Upon graduation from Hagerstown Junior College in
Maryland he enrolled as a drama major at Towson State University in Towson, Maryland. After his time at Towson, Dutton earned
a master's degree in acting from the Yale School of Drama.
From January
2009 until January 2013 Mr. Dutton worked as a self-employed developer, actor, and producer of various made-for-television and
film roles. From February- October 2013 Mr. Dutton was engaged as a primary actor in the television series “Zero Hour”.
From November –December 2013 Mr. Dutton was engaged filing the feature film “The Monkey’s Paw”. From January
2014 through June 2015 Mr. Dutton worked as an independent actor and television and film producer.
In 1984, Dutton
made his Broadway debut in August Wilson's Ma Rainey's Black Bottom, winning a Theatre World Award and
a Tony Award nomination for Best Actor. In 1988, Dutton played a killer in the television miniseries The Murder
of Mary Phagan opposite Jack Lemmon and Kevin Spacey. 1990 brought him a second Best Actor Tony nomination
for his role in another Wilson play, The Piano Lesson. From 1991-1994, he starred in the Fox television
series Roc. Dutton co-starred in Alien 3, the debut film of director David Fincher, then co-starred
in 1993's Rudy. Other films he has appeared in include Get on the Bus; A Time to Kill; Cookie's
Fortune; Crocodile Dundee II; Country; Menace; and Secret Window.
Dutton won
Outstanding Guest Actor Emmy Awards in 2002 and 2003 for his roles in The Practice and Without
a Trace. He was previously nominated in 1999, for his guest-starring role as Alvah Case in the HBO prison drama Oz in
its second season premiere episode. For this role, he was also nominated for an NAACP Image Award. Also in 1999, he
starred in an ensemble cast in Aftershock: Earthquake in New York in which he played the Mayor of New York City.
Dutton gained acclaim for his comedy show Roc shown on FOX television (but produced by HBO) from 1991–1994,
especially mid-run when the show was broadcast live. His work in this role won him a NAACP Image Award. He co-starred in the popular
but short-lived 2005 CBS science fiction series, Threshold.
In 2000, Dutton
directed the HBO miniseries The Corner. The miniseries was close to his heart for Dutton grew up on the streets of
East Baltimore. It was adapted from The Corner: A Year in the Life of an Inner-City Neighborhood (Broadway Books,
1997) by David Simon (a reporter for the Baltimore Sun) and Ed Burns (a retired Baltimore homicide
detective). The Corner won several Emmys in 2000, including Best Miniseries. Dutton won for his direction of
the miniseries. He worked with Simon previously in a 1996 episode of Homicide: Life on the Street.
He starred
as Montgomery County, Maryland Police Chief Charles Moose in the 2003 made-for-TV movie D.C. Sniper:
23 Days of Fear, and appears in Season 2 of The L Word. Dutton also appeared in "Another Toothpick,"
an episode of The Sopranos. He guest starred on House M.D. as the father of Doctor Eric Foreman (Omar
Epps) and on Sleeper Cell: American Terror as the father of undercover FBI agent Darwyn Al-Sayeed. He also
directed two episodes of Sleeper Cell.
On February
14, 2013 Dutton returned to TV in Zero Hour playing the role of a priest.
In 2013, Dutton
played Detective Margolis in the horror film The Monkey's Paw.
Scott Steiner
Mr. Steiner joined
the Company’s Advisory Board in February 2015. Mr. Steiner has a twenty year work history in the energy and IT
industries. He currently serves as COO of Taylor Consulting which he founded in 2004. Taylor grew from an initial
product release in 2009 to one of the largest and fastest growing energy services companies in the nation. Mr. Steiner
also serves as the CEO and President of UM Technologies, an information technology firm he founded in 2014. UM Technologies
recently purchased SEA, Hydro4GE and TR Technology Solutions.
Mr. Steiner’s other interests
include investments and Board positions in Cupcake Digital, Herotainment, Zonzia Media and Modomodo. Scott graduated from
Temple University with BS in Architecture and from Mt Saint Mary's College with a MBA in International Marketing. He lives
in Pennsylvania with his wife Karen and daughter Stephani.
Family Relationships
There are no family relationships among
our directors or officers.
Conflicts Of Interest
Our directors and officers are subject
to restrictions regarding opportunities that may compete with our company’s business plan. New opportunities that are brought
to the attention of our directors and officers must be presented to our Board of Directors and made available to our company for
consideration and review under principles of state law corporate opportunity doctrines.
Involvement in Certain Legal Proceedings
None of our directors or executive officers
have been involved in any of the following events during the past ten years:
|
(a) |
any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years before that time; |
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|
|
(b) |
any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offences); |
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|
(c) |
being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; |
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|
|
(d) |
being found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission 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; |
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|
|
(e) |
being 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, relating to an alleged violation of: (i) any federal or state securities or commodities law or regulation; or (ii) 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 (iii) any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or |
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|
(f) |
being 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 Securities Exchange Act of 1934), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. |
EXECUTIVE COMPENSATION
Summary Compensation Table
Executives and Directors Compensation
During the period ended December 31, 2014
we entered into various employment arrangements with our previous and current executive officers. Some of these arrangements were
retroactively forgiven and cancelled as part of our Master Settlement Agreement entered into on January 22, 2015, as described
in the notes to the Summary Compensation Table. For a more detailed description of the Master Settlement Agreement, please see
Item 1 – Description of Business.
The following table provides certain summary
information concerning compensation of our named executive officers:
Summary Compensation Table
Name
($) |
Year
($) |
|
Salary
($) |
|
|
Bonus
($) |
|
|
Stock
Awards
($) |
|
|
Option
Awards
($) |
|
|
Non-
Equity
Incentive
Plan
Comp
($) |
|
|
Non-
qualified Deferred
Comp.
Earnings
($) |
|
|
All Other
Comp.
($) |
|
|
TOTAL
($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
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|
|
|
|
|
|
Rajinder Brar, Former CEO and CFO (1) |
2014 |
|
|
$370,511 |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
$370,511 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aneliya Vasilieva, Former Chief Content Officer (2) |
2014 |
|
|
$83,333 |
|
|
|
– |
|
|
|
$9,975,000 |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
$10,058,333 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Myles A. Pressey III, Interim CEO and Chief Business Development Officer (3) |
2014 |
|
|
$93,833 |
|
|
|
– |
|
|
|
$13,725,000 |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
$13,818,833 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
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James Walter Sr., Former CEO and CFO (4) |
2014 |
|
|
- |
|
|
|
– |
|
|
|
$476,875 |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
$476,875 |
|
_______________
|
(1) |
Mr. Brar was appointed Chairman and Chief Executive Officer on November 21, 2014. Effective January 22, 2015 Mr. Brar resigned all previously appointed Officer and Board positions. |
|
(2) |
Ms. Vasilieva was appointed Chief Content Officer on November 21, 2014. Effective January 22, 2015 Ms. Vasilieva resigned as Chief Content Officer. The above compensation represents accrued amounts related to a December 2014 employment agreement that was retroactively cancelled with all previously accrued amounts being forfeited. Stock awards, representing 26,250,000 shares of restricted and unregistered common stock, scheduled to vest on January 1, 2015 were cancelled. |
|
(3) |
Mr. Pressey III was appointed Chief Business Development Officer and a Board Member on November 21, 2014. Effective January 22, 2015 Mr. Pressey III resigned as Chief Business Development Officer and Director. The above compensation represents accrued amounts related to a December 2014 employment agreement that was retroactively cancelled. Stock awards, representing 33,750,000 shares of restricted and unregistered common stock, scheduled to vest on January 1, 2015 were cancelled. Additionally, $900,000 of stock based compensation was earned on a pre-merger basis while in the employ of the public shell company and correspondingly eliminated from being presented in the accompanying statement of operations for the period ended December 31, 2014. Mr. Pressey was appointed as the Company’s Chief Business Development Officer and its Interim Chief Executive Officer and Interim Chief Financial Officer on January 29, 2015. |
|
(4) |
Mr. Walter Sr. resigned as the Sole Officer and Director of the Company on November 21, 2014. Additionally, $476,875 of stock based compensation was earned on a pre-merger basis while in the employ of the public shell company and correspondingly eliminated from being presented in the accompanying statement of operations for the period ended December 31, 2014. On January 22, 2015 Mr. Walter was appointed as the Sole Officer and Director and subsequently resigned all Officer positions on January 29, 2015. |
Compensation of Executive Officers
Other than Mr. James C. Walter Sr., none
of the named executive officers shown in the Summary Compensation Table served as executive officers of the non-surviving public
company shell.
Outstanding Equity Awards at Fiscal
Year End
As of December 31, 2014 the Company’s
named executive officers collectively held restricted stock awards totaling 120,000,000 shares of common stock, half of which were
scheduled to vest as of January 1, 2015 with an additional 60,000,000 shares of restricted common stock scheduled to vest as of
July 15, 2015. In accordance with our Settlement Agreement dated January 22, 2015 all of these previously issued equity compensation
awards were retroactively cancelled in January 2015. Accordingly, they are not shown in the table below. The table below sets forth
all other options and stock awards received by the named executive officers of the Company with respect to fiscal year 2014:
|
|
Option Awards |
|
Stock Awards |
|
Name |
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable |
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable |
|
|
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#) |
|
|
Option
Exercise
Price
($) |
|
Option
Expiration
Date |
|
Number of
Shares or
Units of
Stock that
Have Not
Vested
(#) |
|
|
Market
Value of
Shares or
Units of
Stock that
Have Not
Vested
($) |
|
|
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights that
Have Not
Vested
(#) |
|
|
Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights that
Have Not
Vested
(#) |
|
James C. Walter Sr. |
|
|
250,000 |
|
|
|
– |
|
|
|
– |
|
|
$ |
11.00 |
|
10/16/17 |
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
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|
|
|
|
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|
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|
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|
Compensation of Directors
For the period ended December 31, 2014,
each of our Directors also served as an executive officer of the Company. No director received additional compensation in respect
to his service on the Board in 2014. Accordingly, the tabular disclosure called for by Item 402(r) of Regulation S-K is not applicable.
Employment Agreements
We have entered into employment
agreements with the following current executive officers, the terms of which are summarized below.
Naresh Malik, Chief Executive Officer
Mr. Malik entered into an employment agreement
with the Company effective April 21, 2015. The employment agreement provides for an initial term of four years, with an automatic
one-year renewal thereafter, unless the employment agreement is terminated by advance written notice of either party. Under the
terms of the employment agreement, Mr. Malik receives a base salary in the amount of $250,000 per year. Subject to the discretion
of the Board of Directors, Mr. Malik shall be eligible for an annual bonus of not less than fifteen percent (15%) and not more
than thirty-five percent (35%) of annual base salary. Mr. Bibbens shall receive an initial grant of 5,000,000 shares of the Company’s
restricted common stock within 30 days of signing the employment agreement, and will be granted 2,500,000 additional shares of
the Company’s common stock on each of the subsequent four anniversaries of the commencement of employment, should Mr. Malik
continue to be employed in good standings on such dates. The employment agreement further provides that Mr. Bibbens is entitled
to 4 weeks of paid vacation per year and other executive level benefits.
The Company may terminate the employment
agreement with Mr. Malik for cause, without cause, or by reason of his death or disability. Mr. Malik may terminate the employment
agreement for any reason by advance written notice. If the employment agreement is terminated by reason of death, disability, resignation
by Mr. Malik or termination by the Company without Cause (as defined in the employment agreement) then the Company will be required
to pay to Mr. Malik severance pay of four months base compensation and continue all other benefits under the agreement for a period
of four months. If the Company terminates the employment agreement for Cause, then Mr. Malik will only be entitled to the base
salary and benefits earned through and including the date of termination. Mr. Malik has agreed not to compete with us during the
term of his employment agreement and for a period of twelve months thereafter. We also agree to indemnify Mr. Malik pursuant to
the employment agreement.
Myles A. Pressey III, Chairman
and Chief Business Development Officer
Mr. Pressey
III entered into an employment agreement with the Company on January 29, 2015. The employment agreement provides for an initial
term of four years, with an automatic one-year renewal thereafter, unless the employment agreement is terminated by advance written
notice of either party. Under the terms of the employment agreement, Mr. Pressey III receives a base salary in the amount of $250,000
per year. Subject to the discretion of the Board of Directors, Mr. Pressey III shall be eligible for an annual bonus of not less
than fifteen percent (15%) and not more than thirty-five percent (35%) of annual base salary. Mr. Pressey received an initial
grant of 125,000,000 shares of the Company’s restricted common stock within 30 days of signing the employment agreement.
In addition, pursuant to an amendment to Mr. Pressey’s compensation approved by the Board of Directors, Mr. Pressey is entitled
to a potential subsequent equity award; provided that this entire subsequent award is subject to the achievement of corporate
performance benchmarks set by the Board of Directors. For example, if the Company
achieves twenty-five million dollars ($25,000,000) in revenue on a consolidated reporting basis during any calendar year, Mr.
Pressey III will be entitled to the entire award of 62,500,000 shares to be issued in equal annual increments over the remaining
term of his employment agreement, all subject to Mr. Pressey’s continued servie. The employment agreement further provides
that Mr. Pressey is entitled to 4 weeks of paid vacation per year.
The Company may terminate the employment
agreement with Mr. Pressey III for cause, without cause, or by reason of his death or disability. Mr. Pressey III may terminate
the employment agreement for any reason by advance written notice. If the employment agreement is terminated by reason of death,
disability, Mr. Pressey III’s resignation or termination by the Company without Cause (as defined in the employment agreement)
then the Company will be required to pay to Mr. Pressey III severance pay of four months base compensation and continue all other
benefits under the agreement for a period of four months. If the Company terminates the employment agreement for Cause, then Mr.
Pressey III will be entitled to the base salary and benefits earned through and including the date of termination. Mr. Pressey
III has agreed not to compete with us during the term of his employment agreement and for a period of twelve months thereafter.
The Company also agreed to indemnify Mr. Pressey III pursuant to the employment agreement.
Stanley L. Teeple, Chief Compliance
Officer
We entered into an employment agreement
with Stanley Teeple, our Chief Compliance Officer dated December 1, 2014. Mr. Teeple performs the duties and functions of his office
under the supervisory authority of our Board of Directors and Chief Executive Officer. The employment agreement provides for an
initial term ending December 31, 2016, with an automatic one-year renewal thereafter, unless the employment agreement is terminated
by advance written notice of either party. Under the terms of the employment agreement, Mr. Teeple receives a base salary in the
amount of $250,000 per year, subject to review at least annually by the CEO or Board of Directors. For 2014, Mr. Teeple is eligible
for a $100,000 bonus and for 2015 and subsequent years, a bonus of not less than 5% and not more than thirty-five percent (35%)
of prior year annual base salary shall be awarded in the discretion of the CEO and Board of Directors or committee thereof. Mr.
Teeple shall receive a one-time grant of one million shares of the Company’s common stock, to be issued not later than June
30, 2015. Mr. Teeple is also entitled to participate in and receive such other benefits and compensation that our company may furnish
to other management personnel or employees generally. The employment agreement further provides that Mr. Teeple is entitled to
3 weeks of paid vacation per year commencing January 1 2015. He is also entitled to and other executive level benefits under the
employment agreement.
We may terminate the employment agreement
with Mr. Teeple for cause, without cause, or by reason of his death or disability. Mr. Teeple may terminate the employment agreement
for any reason by advance written notice. If the employment agreement is terminated by reason of death, disability, or termination
by the Company without Cause (as defined in the employment agreement) then our company will be required to pay to Mr. Teeple severance
pay of four months base compensation and continue all other benefits under the agreement for a period of four months. If we terminate
the employment agreement for cause or if Mr. Teeple terminates the employment agreement, then Mr. Teeple will be entitled to the
base salary and benefits earned through and including the date of termination. Mr. Teeple has agreed not to compete with us during
the term of his employment agreement and for a period of twelve months thereafter. We also agree to indemnify Mr. Teeple pursuant
to the employment agreement.
Johnathan F. Adair, Chief Operating
Officer
Mr. Adair entered into an employment agreement
with the Company on January 29, 2015. The employment agreement provides for an initial term of four years, with an automatic one-year
renewal thereafter, unless the employment agreement is terminated by advance written notice of either party. Under the terms of
the employment agreement, Mr. Adair receives a base salary in the amount of $250,000 per year. Subject to the discretion of the
CEO and the Board of Directors, Mr. Adair shall be eligible for an annual bonus of not less than fifteen percent (15%) and not
more than thirty-five percent (35%) of annual base salary. Mr. Adair shall receive an initial grant of 5,000,000 shares of the
Company’s restricted common stock within 30 days of signing the employment agreement, and will be granted 2,500,000 additional
shares of the Company’s common stock on each of the subsequent four anniversaries of the commencement of employment, should
Mr. Adair continue to be employed in good standings on such dates. The employment agreement further provides that Mr. Adair is
entitled to 4 weeks of paid vacation per year.
The Company may terminate the employment
agreement with Mr. Adair for cause, without cause, or by reason of his death or disability. Mr. Adair may terminate the employment
agreement for any reason by advance written notice. If the employment agreement is terminated by reason of death, disability, resignation
by Mr. Adair or termination by the Company without Cause (as defined in the employment agreement) then the Company will be required
to pay to Mr. Adair severance pay of four months base compensation and continue all other benefits under the agreement for a period
of four months. If the Company terminates the employment agreement for Cause, then Mr. Adair will only be entitled to the base
salary and benefits earned through and including the date of termination. Mr. Adair has agreed not to compete with us during the
term of his employment agreement and for a period of twelve months thereafter. We also agree to indemnify Mr. Adair pursuant to
the employment agreement.
Frank McEnulty, Chief Financial Officer
Mr. McEnulty entered into an employment
agreement with the Company effective as of May 2, 2015 to serve as the Company’s Chief Financial Officer. The agreement provides
for two different stages of employment: Stage 1 commences on the effective date of the agreement and lasts until the earlier of
the Board of Directors implementing Stage 2 of the agreement or the first anniversary of the agreement, at which time the Board
may either implement Stage 2 or terminate the Agreement. During Stage 1, Mr. McEnulty receives a base salary in the amount of $182,500
per year, and is entitled to 1,000,000 shares of common stock within 30 days of the employment agreement. Salary and any additional
potential stock awards associated with Stage 2 would be determined by the Board of Directors upon implementation of Stage 2. During
Stage 2, if applicable, Mr. McEnulty would be eligible for an annual bonus of not less than fifteen percent (15%) and not more
than thirty-five percent (35%) of annual base salary.
The Company may terminate the employment
agreement with Mr. McEnulty for cause, without cause, or by reason of his death or disability. Mr. McEnulty may terminate the employment
agreement for any reason by advance written notice. If the employment agreement is terminated by reason of death, disability, resignation
by Mr. McEnulty or termination by the Company without Cause (as defined in the employment agreement) then the Company will be required
to pay to Mr. McEnulty severance pay of four months base compensation and continue all other benefits under the agreement for a
period of four months. If the Company terminates the employment agreement for Cause, then Mr. McEnulty will only be entitled to
the base salary and benefits earned through and including the date of termination. Mr. McEnulty has agreed not to compete with
us during the term of his employment agreement and for a period of twelve months thereafter. We also agree to indemnify Mr. McEnulty
pursuant to the employment agreement.
Lynwood Bibbens, Chief Strategy Officer
In connection with Mr. Bibbens’ appointment
as the Company’s Chief Strategy Officer, Mr. Bibbens entered into an employment agreement with the Company on January 29,
2015. The employment agreement provides for an initial term of four years, with an automatic one-year renewal thereafter, unless
the employment agreement is terminated by advance written notice of either party. Under the terms of the employment agreement,
Mr. Bibbens receives a base salary in the amount of $250,000 per year. Subject to the discretion of the CEO and the Board of Directors,
Mr. Bibbens shall be eligible for an annual bonus of not less than fifteen percent (15%) and not more than thirty-five percent
(35%) of annual base salary. Mr. Bibbens shall receive an initial grant of 5,000,000 shares of the Company’s restricted common
stock within 30 days of signing the employment agreement, and will be granted 2,500,000 additional shares of the Company’s
common stock on each of the subsequent four anniversaries of the commencement of employment, should Mr. Bibbens continue to be
employed in good standings on such dates. The employment agreement further provides that Mr. Bibbens is entitled to 4 weeks of
paid vacation per year.
The Company may terminate the employment
agreement with Mr. Bibbens for cause, without cause, or by reason of his death or disability. Mr. Bibbens may terminate the employment
agreement for any reason by advance written notice. If the employment agreement is terminated by reason of death, disability, resignation
by Mr. Bibbens or termination by the Company without Cause (as defined in the employment agreement) then the Company will be required
to pay to Mr. Bibbens severance pay of four months base compensation and continue all other benefits under the agreement for a
period of four months. If the Company terminates the employment agreement for Cause, then Mr. Bibbens will only be entitled to
the base salary and benefits earned through and including the date of termination. Mr. Bibbens has agreed not to compete with us
during the term of his employment agreement and for a period of twelve months thereafter. We also agree to indemnify Mr. Bibbens
pursuant to the employment agreement.
Pension Benefits
We do not maintain any pension plan or
arrangement under which our named executive officers are entitled to participate or receive post-retirement benefits.
NonQualified Deferred Compensation
We do not maintain any nonqualified deferred
compensation plan or arrangement under which our named executive officers are entitled to participate.
Employee Benefit Plans
2007 Stock Option Plan. Our Board
of Directors adopted our company’s 2007 Stock Option Plan (the “2007 Stock Option Plan”). The 2007 Stock Option
Plan was approved by our stockholders at a meeting of stockholders held on October 15, 2007. The description set forth below summarizes
the principal terms and conditions of the 2007 Stock Option Plan, does not purport to be complete and is qualified in its entirety
by reference to the 2007 Stock Option Plan, a copy of which has been filed with the Securities and Exchange Commission as an Exhibit
to this Report.
General. The primary objectives
of the 2007 Stock Option Plan are to:
|
· |
attract and retain selected key employees, consultants and directors; |
|
· |
encourage their commitment; |
|
· |
motivate superior performance; |
|
· |
facilitate attainment of ownership interests in our company; |
|
· |
align personal interests with those of our stockholders; and |
|
· |
enable them to share in the long-term growth and success of our company. |
Shares Subject to 2007 Stock Option
Plan. The number of shares of common stock of our company reserved under the 2007 Stock Option Plan is 90,90911.
The number of shares available under both the 2007 Stock Option Plan and outstanding incentive awards are subject to adjustments
to prevent enlargement or dilution of rights resulting from stock dividends, stock splits, recapitalization or similar transactions,
or resulting from a change in applicable laws or other circumstances.
Administration. The Plan shall be
administered by either the Board of Directors of the Company (the “Board”) or by a committee (the “Committee”)
to which administration of the Plan, or of part of the Plan, may be delegated by the Board (in either case, the “Administrator”).
The Board shall appoint and remove members of such Committee, if any, in its discretion in accordance with applicable laws. If
necessary in order to comply with Rule 16b-3 under the Exchange Act and Section 162(m) of the Code, the Committee shall, in the
Board’s discretion, be comprised solely of “non-employee directors” within the meaning of said Rule 16b-3 and
“outside directors” within the meaning of Section 162(m) of the Code. The foregoing notwithstanding, the Administrator
may delegate nondiscretionary administrative duties to such employees of the Company as it deems proper and the Board, in its absolute
discretion, may at any time and from time to time exercise any and all rights and duties of the Administrator under the Plan.
_______________
1 This reflects the 1-for-44
reverse stock split, which became effective on November 12, 2014. Originally, 40,000,000 shares of our common stock was reserved
under the 2007 Stock Option Plan.
Eligibility. Every person who at
the date of grant of an Option is an employee of the Company or of any Affiliate (as defined below) of the Company is eligible
to receive Non-qualified stock options (“NQSOs”) or Incentive Stock Options (“ISOs”) under the Plan. Every
person who at the date of grant is a consultant to, or non-employee director of, the Company or any Affiliate (as defined below)
of the Company is eligible to receive NQSOs under the Plan. The term “Affiliate” as used in the Plan means a parent
or subsidiary corporation as defined in the applicable provisions (currently Sections 424(e) and (f), respectively) of the Code.
The term “employee” includes an officer or director who is an employee of the Company. The term “consultant”
includes persons employed by, or otherwise affiliated with, a consultant.
Terms and Conditions
All Options granted under the 2007 Stock
Option Plan shall be subject to the terms and conditions provided therein, including:
1. Time of Option
Exercise. Subject to the other relevant provisions of the Plan, Options granted under the Plan shall be exercisable (a) immediately
as of the effective date of the stock option agreement granting the Option, or (b) in accordance with a schedule as may be set
by the Administrator (each such date on such schedule, the “Vesting Base Date”) and specified in the written stock
option agreement relating to such Option. In any case, no Option shall be exercisable until a written stock option agreement in
form satisfactory to the Company is executed by the Company and the optionee.
2. Nontransferability
of Option Rights. Except with the express written approval of the Administrator which approval the Administrator is authorized
to give only with respect to NQSOs, no Option granted under the Plan shall be assignable or otherwise transferable by the optionee
except by will, by the laws of descent and distribution or pursuant to a qualified domestic relations order. During the life of
the optionee, an Option shall be exercisable only by the optionee.
3. Payment. All
options issued under the Plan are deemed to be cashless. Options may be exercised using the intrinsic value of the options.
4. Termination
of Employment. All options issued under the plan are to be vested immediately unless stipulated otherwise by the Administrator
at the time of issuance. The Employee shall have 90 days from termination to exercise the option or it shall expire.
5. Determination
of Value. For purposes of the Plan, the fair market value of Shares or other securities of the Company shall be determined as follows:
(a) Fair market value
shall be the closing price of such stock on the date before the date the value is to be determined on the principal recognized
securities exchange or recognized securities market on which such stock is reported, but if selling prices are not reported, its
fair market value shall be the mean between the high bid and low asked prices for such stock on the date before the date the value
is to be determined (or if there are no quoted prices for such date, then for the last preceding business day on which there were
quoted prices).
(b) In the absence
of an established market for the stock, the fair market value thereof shall be determined in good faith by the Administrator, with
reference to the Company’s net worth, prospective earning power, dividend-paying capacity, and other relevant factors, including
the goodwill of the Company, the economic outlook in the Company’s industry, the Company’s position in the industry,
the Company’s management, and the values of stock of other corporations in the same or similar line of business.
Federal Income Tax Consequences
The holder of an ISO does not realize taxable
income upon the grant or upon the exercise of the option (although the option spread is an item of tax preference income potentially
subject to the alternative minimum tax). If the stock acquired upon exercise of the options sold or otherwise disposed of within
two (2) years from the option grant date or within one year from the exercise date then, in general, gain realized on the sale
is treated as ordinary income to the extent of the option spread at the exercise date, and the Company receives a corresponding
deduction. Any remaining gain is treated as capital gain. If the stock is held for at least two (2) years from the grant date and
one year from the exercise date, then gain or loss realized upon the sale will be capital gain or loss and the Company will not
be entitled to a deduction. A special basis adjustment applies to reduce the gain for alternative minimum tax purposes.
Section 409A of the Code generally provides
that any deferred compensation arrangement that does not satisfy specific written requirements regarding (i) timing and form of
payouts, (ii) advance election of deferrals and (iii) restrictions on acceleration of payouts results in immediate taxation of
all amounts deferred to the extent not subject to a substantial risk of forfeiture. In addition, tax on the amounts included in
income also are subject to a 20% excise tax and interest. In general, to avoid a violation of Section 409A of the Code, amounts
deferred may be paid out only upon separation from service, disability, death, a specified time, a change in control (as defined
by the Treasury Department) or an unforeseen emergency. Furthermore, the election to defer generally must be made in the calendar
year before performance of services, and any provision for accelerated payout other than for reasons specified by the Treasury
may cause the amounts deferred to be subject to early taxation and to the imposition of the excise tax. Section 409A of the Code
is broadly applicable to any form of deferred compensation other than tax-qualified retirement plans and bona fide vacation, sick
leave, compensatory time, disability pay or death benefits and may be applicable to certain awards under the 2007 Stock Option
Plan. The Treasury Department has provided guidance on transition issues and final regulations under new Section 409A of the Code.
Incentive awards under the 2007 Stock Option Plan that are subject to Section 409A of the Code are intended to satisfy the requirements
of Section 409A of the Code, as specified in an incentive agreement.
Generally, taxable compensation earned
by “covered employees” (as defined in Section 162(m) of the Code) for options or other applicable incentive awards
is intended to constitute qualified performance-based compensation. We should, therefore, be entitled to a tax deduction for compensation
paid in the same amount as the ordinary income recognized by the covered employees without any reduction under the limitations
of Section 162(m) on deductible compensation paid to such employees. However, the committee may determine, within its sole discretion,
to grant incentive awards to such covered employees that do not qualify as performance-based compensation. Under Section 162(m),
our company is denied a deduction for annual compensation paid to such employees in excess of $1,000,000.
THE FOREGOING IS A SUMMARY OF THE UNITED
STATES FEDERAL INCOME TAX CONSEQUENCES THAT GENERALLY WILL ARISE UNDER THE CODE WITH RESPECT TO INCENTIVE AWARDS GRANTED UNDER
THE 2007 STOCK OPTION PLAN AND DOES NOT PURPORT TO BE A COMPLETE STATEMENT OF ALL RELEVANT PROVISIONS OF THE CODE.
MOREOVER, THIS SUMMARY IS BASED ON CURRENT
FEDERAL INCOME TAX LAWS UNDER THE CODE, WHICH ARE SUBJECT TO CHANGE. THE TREATMENT OF FOREIGN, STATE, LOCAL OR ESTATE TAXES IS
NOT ADDRESSED. THE TAX CONSEQUENCES OF THE INCENTIVE AWARDS ARE COMPLEX AND DEPENDENT ON EACH INDIVIDUAL’S PERSONAL TAX SITUATION.
ALL PARTICIPANTS ARE ADVISED TO CONSULT WITH THEIR OWN TAX ADVISERS RESPECTING INCENTIVE AWARDS.
Limitation of Liability and Indemnification
Matters
Our articles of incorporation contain provisions
that limit the liability of our directors for monetary damages to the fullest extent permitted by Nevada law.
Our articles of incorporation and bylaws
authorize our company to provide indemnification to our directors and officers and persons who are or were serving at our request
as a director, officer, manager or trustee of another corporation or of a partnership, limited liability company, joint venture,
trust or other enterprise to the fullest extent permitted by Nevada law. Our articles of incorporation and bylaws also authorize
our company, by action of our Board of Directors, to provide indemnification to employees and agents of our company and persons
who are serving or did serve at our request as an employee or agent of another corporation or of a partnership, limited liability
company, joint venture, trust or other enterprise with the same scope and effect as provided to our directors and officers as described
above.
Our company has not entered into any indemnification
agreement with any of its directors or officers.
We anticipate obtaining director and officer
liability insurance with respect to possible director and officer liabilities arising out of certain matters, including matters
arising under the Securities Act.
Option Exercises and Stock Vested
None of our named executive officers exercised
stock options during 2014 and through the date of this Report.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
AND DIRECTOR INDEPENDENCE
Other than as disclosed below, none of
the following persons have, since our date of incorporation, had any material interest, direct or indirect, in any transaction
with us or in any presently proposed transaction that has or will materially affect us:
|
· |
Any person proposed as a nominee for election as a director; |
|
· |
Any person who beneficially owns, directly or indirectly, shares carrying more than 10% of the voting rights attached to our outstanding shares of common stock; |
|
· |
Any relative or spouse of any of the foregoing persons who has the same house as such person. |
Related Transactions
On May 24, 2014 our prior Chairman and
Chief Executive Officer contributed the brands, rights, and ecommerce opportunities of HDIMAX.com and Frontlinewire.com to the
Company in exchange for 48,500,000 shares of common stock of the Company. Since we were under control of our founder on the date
of the transaction, our founder’s historical cost became the carrying cost of the contributed assets totaling $488. As of
December 31, 2014the cost of registering the websites was fully amortized, however, we maintained the rights to the domain names.
During the period ended December 31, 2014
we paid our founder, Chairman, and Chief Executive Officer and related entities $211,591 for the development of content and other
marketing related expenses. The amount is classified in sales and marketing in the accompanying statement of operations.
As of December 31, 2014 we owed a related
party $340,163 as result of the related party directly paying third party vendors on our behalf. In February 2015 we issued 7,500,000
shares of restricted and unregistered common stock in full settlement of these previously accrued obligations.
Section 16(a) Beneficial Ownership Reporting
Compliance
Section 16(a) of the Exchange Act requires
that the directors, officers and persons who beneficially own more than 10% of the equity securities of reporting companies, file
reports of ownership and changes in ownership with the Securities and Exchange Commission (the “SEC”). Directors, officers
and greater than 10% stockholders are required by SEC regulation to furnish our company with copies of all Section 16(a) forms
that they file. Based solely on our review of the copies of such forms we received, we believe that during the year ended December
31, 2014, and through the date of this Report, all such filing requirements applicable to our company were complied with.
Code of Ethics
We have not adopted a corporate code of
ethics that applies to our Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer or controller,
or persons performing similar functions. Our decision not to adopt such a code of ethics results from our having only a limited
number of officers and directors operating as the management for our company. We believe that, as a result of the limited interaction
that occurs, having such a small management structure for our company eliminates the current need for such a code.
Committees of our Board of Directors
Audit Committee
We do not have a formal standing audit
committee. Rather, audit committee functions are performed by our entire Board of Directors. These functions include: (1) selection
and oversight of our independent accountant; (2) establishing procedures for the receipt, retention and treatment of complaints
regarding accounting, internal controls and auditing matters; (3) establishing procedures for the confidential, anonymous submission
by our employees of concerns regarding accounting and auditing matters; (4) engaging outside advisors; and (5) funding for the
outside auditory and outside advisors engagement by the audit committee.
Audit Committee Financial Expert
None of our directors or officers has the
qualifications or experience to be considered a financial expert. We believe that the cost related to retaining a financial expert
at this time is prohibitive. However, we do intend to appoint an audit committee financial expert in the foreseeable future.
Disclosure Committee
Disclosure committee functions are performed
by our entire Board of Directors.
Director Independence
Two of the members of our Board of Directors
may be deemed to be independent under the standards for independence contained in the Nasdaq Marketplaces Rules, Rule 4350(d) and
Rule 4200(a)(15).
Compensation Committee
Compensation committee functions are performed
by our entire Board of Directors. Our Board of Directors does not have a charter or other formal policies regarding compensation.
Nominating and Corporate Governance
Committee
Nominating and Corporate Governance committee
functions are performed by our entire Board of Directors. Our Board of Directors does not have a charter or other formal policies
regarding director nominations or corporate governance.
Stockholder Communications
Any stockholder may communicate directly
to our Board of Directors by sending a letter to our company’s address of record.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
Principal Stockholders and Management
The following table provides certain information regarding
the ownership of our common stock as of July 9, 2015 by:
|
· |
each of our executive officers; |
|
· |
each of our directors; |
|
· |
each person known to us to own more than 5% of our outstanding common stock; and |
|
· |
all of our executive officers and directors and as a group. |
Name and Address of Stockholders† | |
Shares Beneficially Owned (1)(2) | | |
Percentage Ownership (1) | |
Myles A. Pressey III (Chairman of the Board and Chief Business Development Officer) | |
| 128,409,091 | | |
| 56.17% | |
Stanley L. Teeple (3) | |
| 5,813,841 | (3) | |
| 2.54% | |
Lynwood A. Bibbens (4) | |
| 5,000,000 | | |
| 2.18% | |
Jonathan F. Adair (5) | |
| 5,000,000 | | |
| 2.18% | |
Frank McEnulty (6) | |
| 1,000,000 | | |
| * | |
Steven L. Sanders (Director) | |
| 150,000 | | |
| * | |
Philip Fraley (Director) | |
| – | | |
| * | |
Naresh Malik (7) | |
| 5,000,000 | | |
| 2.18% | |
| |
| | | |
| | |
Officers and Directors as a group (8) persons | |
| 150,372,932 | | |
| 65.77% | |
_______________
† Each stockholder’s address is c/o Zonzia
Media, Inc. 74 N. Pecos Road, Suite D, Henderson, Nevada 89074
* Represents less than 1%.
|
(1) |
Based on an aggregate of 226,822,131 shares of
common stock outstanding as of July 3, 2015, and outstanding options and warrants convertible into shares of common stock
totaling 1,780,682 for a grand total of 228,602,813. Rounded to the nearest hundredth of a percent. |
|
|
|
|
(2) |
Unless otherwise indicated, shares are fully vested shares of the Company common stock.. |
|
|
|
|
(3) |
Includes 132,023 shares held by Stan Teeple, Inc., an entity which Mr. Teeple controls as its CEO. Mr. Teeple was appointed Chief Compliance Officer effective December 3, 2014. |
|
|
|
|
(4) |
Appointed Chief Strategy Officer effective January 29, 2015. |
|
|
|
|
(5) |
Appointed Chief Operating Officer effective January 29, 2015. |
|
|
|
|
(6) |
Appointed Chief Financial Officer effective May 2, 2015. |
|
|
|
|
(7) |
Appointed Chief Executive Officer effective April 21, 2015. |
Changes in Control
Not applicable.
SELLING STOCKHOLDERS
This prospectus covers the resale by the
selling stockholders named below from time to time of up to a total of 43,131,591 shares of our common stock that were
issued to the selling stockholders pursuant to transactions exempt from registration under the Securities Act. All of the common
stock offered by the selling stockholders is being offered for their own accounts.
Issuances of Securities being Offered
A description of each transaction in which
common stock being offered in this offering was sold to the selling stockholders is set forth below. Generally, the shares that
are being offered for resale by the selling stockholders can be categorized as follows: (i) shares that were sold in private placements
of our common stock; and (ii) shares to compensate our executives and our consultants, and (iii) as consideration to extinguish
debts and contractual payment obligations of the Company.
Private Placement Transactions
A majority of the shares included in the
selling stockholder table below are held by third party investors. Each of the investors in the foregoing private placements is
a U.S. person having sufficient knowledge in business and financial matters to be capable of evaluating the merits and risks of
the transaction. The transactions were exempt from registration under the Securities Act of 1933, based upon Section 4(2) for transactions
by the issuer not involving any public offering and Rule 506 of Regulation D promulgated thereunder. There was no underwriter,
no underwriting discounts or commissions, no general solicitation, no advertisement, and resale restrictions were imposed by placing
restrictive legends on the certificates.
Issuance to Executives and Consultants
Shares held by affiliates represent approximately
one third of the shares included in the Selling Stockholders’ table. Mr. Pressey III beneficially owns a total of approximately
128 million shares of restricted common stock, of which 8,000,000, or approximately 6.25%, are being registered hereby. Pursuant
to our employment agreements with each of the following executive officers, we have issued 5,000,000 shares of restricted common
stock, of which 1,250,000 shares are being registered for each such officer: Naresh Malik, our Chief Executive Officer; Lynwood
Bibbens, our Chief Strategy Officer; and Johnathan Adair, our Chief Operating Officer. In addition, we are registering 2,250,000
shares held by our Chief Compliance Officer, Stanley Teeple, 500,000 shares held by Director James C. Walter Sr. and 150,000 shares
held by Director Steven Sanders.
The remainder of the shares included in
the table below, were issued to consultants in exchange for services or were issued as consideration to extinguish historical debts
and contractual payment obligations of the Company.
Selling Stockholders
The following table sets forth certain
information regarding the selling stockholders and the shares offered by them in this prospectus.
Except as specifically set forth in the
footnotes to the table, none of the selling stockholders has held a position as an officer or director of the Company, nor has
any selling stockholder had any material relationship of any kind with us or any of our affiliates, other than as an employee,
as set forth in the footnotes to the table. All information with respect to share ownership has been furnished by the selling stockholders.
The shares being offered are being registered to permit public resale of the shares and each selling stockholder may offer all
or part of the shares owned for resale from time to time. In addition, none of the selling stockholders has any family relationships
with our officers, directors or controlling stockholders, except as indicated in the footnotes to the table. For additional information
regarding our capitalization, including shares held by officers, directors and 5% holders, refer to “Security Ownership of
Certain Beneficial Owners and Management” above.
The term “selling stockholders”
also includes any transferees, pledges, donees, or other successors in interest to the selling stockholders named in the table
below. To our knowledge, subject to applicable community property laws, each person named in the table has sole voting and investment
power with respect to the shares of common stock set forth opposite such person’s name. We will file a supplement to this
prospectus to name successors to any named selling stockholders who are able to use this prospectus to resell the securities registered
hereby.
We will receive no proceeds from the sale
of the registered shares. We have agreed to bear the expenses of registration of the shares, other than commissions and discounts
of agents or broker-dealers and transfer taxes, if any. We have no contractual obligations to provide any of our shareholders with
registration of their shares.
Name of Selling Stockholder1 |
Number
of Shares of Common Stock Beneficially Owned Prior to Offering2 |
Total Number of
Shares to be Offered for
Selling Stockholders
Account |
Total Shares to be Owned and
Percent of Total Outstanding After
Completion of this Offering2,3,4 |
Briana Pressey(6) |
227,273 |
227,273 |
0 |
0% |
David Stang |
90,909 |
90,909 |
0 |
0% |
Davis Martin Consulting, LLC |
3,181,818 |
3,181,818 |
0 |
0% |
Ingenium Accounting Associates |
108,182 |
108,182 |
0 |
0% |
International Private Capital Group LLC |
2,046,765 |
2,046,765 |
0 |
0% |
James C. Walter Jr. |
5,402,273 |
500,000 |
4,902,273 |
2.15% |
Jerry Bratz Jr. |
36,364 |
36,364 |
0 |
0% |
Jerry Bratz Sr. |
1,556,851 |
1,556,851 |
0 |
0% |
Jim Dunn III |
545,185 |
545,185 |
0 |
0% |
Jimmy Oliver |
227,273 |
227,273 |
0 |
0% |
Johnathan Adair(7) |
5,000,000 |
1,250,000 |
3,750,000 |
1.64% |
Karrey Anne Geddes |
17,045 |
17,045 |
0 |
0% |
Kirsten Braatz |
523,480 |
523,480 |
0 |
0% |
Lance A. McKinlay |
184,393 |
184,393 |
0 |
0% |
Leslie Greif |
490,332 |
490,332 |
0 |
0% |
Linda Pressey(6) |
227,273 |
227,273 |
0 |
0% |
Lynwood Bibbens(8) |
5,000,000 |
1,250,000 |
3,750,000 |
1.64% |
Margaret W. Morie |
130,360 |
130,360 |
0 |
0% |
Mark Spuler |
277,777 |
277,777 |
0 |
0% |
Michael J. Ducas |
6,568,182 |
3,068,182 |
3,500,000 |
1.5% |
Myles A. Pressey III(9) |
128,409,091 |
8,000,000 |
120,409,091 |
52.69% |
Myles A. Pressey IV(6) |
227,273 |
227,273 |
0 |
0% |
Naresh Malik(10) |
5,000,000 |
1,250,000 |
3,750,000 |
1.64% |
New Hope Partners LLC |
16,381,105 |
11,881,105 |
4,500,000 |
2.0% |
Raymond Gawronski |
18,182 |
18,182 |
0 |
0% |
Raynard A. Barnard |
57,971 |
57,971 |
0 |
0% |
Robert Rosania |
22,510 |
22,510 |
0 |
0% |
Sandra Delgozzo |
22,727 |
22,727 |
0 |
0% |
Scott Alan Stiner |
2,250,000 |
2,250,000 |
0 |
0% |
Stanley L. Teeple(11) |
5,813,841 |
2,382,023 |
3,431,818 |
1.50% |
Steven P. Durdin(13) |
1,307,024 |
760,221 |
546,803 |
* |
Steven Sanders |
150,000 |
150,000 |
0 |
0% |
Steve Mongiardo |
17,045 |
17,045 |
0 |
0% |
Weltman Bernfield LLC |
52,627 |
52,627 |
0 |
0% |
William Michael Long |
25,445 |
25,445 |
0 |
0% |
Christopher A. Wilson |
37,500 |
37,500 |
0 |
0% |
Gerard L. Oskam |
37,500 |
37,500 |
0 |
0% |
Total |
191,671,576 |
43,131,591 |
148,539,985 |
|
1. |
Unless a relationship is specified in the notes below, each selling stockholder is a third party investor with no other relationship with the registrant. |
2. |
The number of shares listed in these columns include all shares beneficially owned and all options or warrants to purchase shares held, whether or not deemed to be beneficially owned, by the selling stockholder. The ownership percentages listed in these columns include only shares beneficially owned by the listed selling stockholder. Beneficial ownership is determined in accordance with the rules of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, we have included the shares the person has the right to acquire within 60 days of the date above, including through the exercise of any option, warrant or other right or conversion of any security. The shares that a stockholder has the right to acquire within 60 days, however, are not included in the computation of the percentage ownership of any other stockholder. The ownership percentages are calculated assuming that 228,506,664 shares, including outstanding options and warrants convertible into shares of common stock totaling 1,780,682 shares, were outstanding as of July 3, 2015. |
3. |
Shares have been adjusted for the 1 for 44 reverse stock split effective November 12, 2014 |
4. |
Under the rules adopted by the SEC, a person is deemed to be a beneficial owner of securities with respect to which the person has or shares: (a) voting power, which includes the power to vote or direct the vote of the security, or (b) investment power, which includes the power to dispose of or to direct the disposition of the security. Unless otherwise indicated below, the persons named in the table above have sole voting and investment power with respect to all shares beneficially owned. Assumes that all the securities listed hereunder have been sold. |
5. |
* denotes less than 1%. |
6. |
Linda Pressey, Briana Pressey, and Myles A. Pressey IV are the children of Myles A. Pressey III, our director and Chief Business Development Officer who each own stock in her or his own name, respectively, and has sole voting and investment power over the shares indicated. |
7. |
Johnathan F. Adair was appointed as our Chief Operating Officer on January 29, 2015. |
8. |
Lynwood A. Bibbens was appointed as our Chief Strategy Officer on January 29, 2015. |
9. |
Myles A. Pressey III was elected as a director and our Chief Business Development Officer effective January 29, 2015. |
10. |
Naresh Malik was appointed as our Chief Executive Officer on April 21, 2015. |
11.
12. |
Mr. Teeple was appointed as our Chief Compliance Officer effective December 3, 2014. The shares being registered include 2,250,000 shares held by Mr. Teeple individual and 132,023 shares held by Stan Teeple, Inc., an entity controlled by Stanley L. Teeple. |
13.
|
Mr. Durdin is a former Director and our former President and Chief Executive Officer. He resigned as a Director and as the President and Chief Executive Officer effective December 10, 2012. Includes 2,273 shares held by Durdin Insurance, an entity controlled by Mr. Durdin. |
DILUTION
At March 31, 2015,
our net tangible book value was approximately $(1,252,404), or $(.00552) per share of common stock then outstanding. Net tangible
book value per share represents the amount of our total tangible assets less total liabilities, divided by the number of shares
of common stock outstanding. Pro forma net tangible book value dilution per share represents the difference between the
amount per share paid by purchasers of shares of common stock in this offering and the pro forma net tangible book value
per share of common stock immediately after completion of this offering on a pro forma as adjusted basis. After giving
effect to the sale of 9,375,000 shares of common stock by us at the offering price of $0.15 per share, a total of 220,872,162
shares of common stock would be outstanding, with a pro forma net tangible book value of approximately $.00621 per share.
This would represent an immediate increase in net tangible book value of approximately $.01214 per share to existing stockholders
and an immediate dilution of approximately $.3138 per share to investors in this offering. Dilution is determined by subtracting
net tangible book value per share after this offering from the amount paid by investors in this offering per share of common stock
(minus placement agent fees and expenses and other estimated offering expenses). The following table illustrates the per share
dilution:
PURCHASERS OF SHARES IN THE PUBLIC OFFERING IF 100% OF PUBLIC OFFERING SHARES SOLD | |
| | |
| |
Offering price per share | |
| | | |
$ | 0.15 | |
Net tangible book value per share before offering | |
$ | (.00552 | ) | |
| | |
Increase in pro forma net tangible book value per share attributable to this offering | |
$ | .02645 | | |
| | |
Pro forma net tangible book value per share after this offering | |
| | | |
$ | .02093 | |
Dilution per share to new investors | |
| | | |
$ | .1291 | |
PURCHASERS OF SHARES IN THE PUBLIC OFFERING IF 75% OF PUBLIC OFFERING SHARES SOLD | |
| | |
| |
Offering price per share | |
| | | |
$ | .15 | |
Net tangible book value per share before offering | |
$ | (.00552 | ) | |
| | |
Increase in pro forma net tangible book value per share attributable to this offering | |
$ | .02068 | | |
| | |
Pro forma net tangible book value per share after this offering | |
| | | |
$ | .01516 | |
Dilution per share to new investors | |
| | | |
$ | .1348 | |
PURCHASERS OF SHARES IN THE PUBLIC OFFERING IF 50% OF PUBLIC OFFERING SHARES SOLD | |
| | |
| |
Offering price per share | |
| | | |
$ | .15 | |
Net tangible book value per share before offering | |
$ | (.00552 | ) | |
| | |
Increase in pro forma net tangible book value per share attributable to this offering | |
$ | .01437 | | |
| | |
Pro forma net tangible book value per share after this offering | |
| | | |
$ | .00884 | |
Dilution per share to new investors | |
| | | |
$ | .1412 | |
PURCHASERS OF SHARES IN THE PUBLIC OFFERING IF 25% OF PUBLIC OFFERING SHARES SOLD | |
| | |
| |
Offering price per share | |
| | | |
$ | .15 | |
Net tangible book value per share before offering | |
$ | (.00552 | ) | |
| | |
Increase in pro forma net tangible book value per share attributable to this offering | |
$ | .00743 | | |
| | |
Pro forma net tangible book value per share after this offering | |
| | | |
$ | .00743 | |
Dilution per share to new investors | |
| | | |
$ | .1418 | |
PLAN OF DISTRIBUTION
By Selling Stockholders
The selling stockholders and any of its
pledgees, donees, transferees, assignees and successors-in-interest may, from time to time, sell any or all of its shares of common
stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions. These sales
will be at the fixed offering price of $0.15 until such time that the Company’s common stock is traded on an established
trading market, and thereafter, at prevailing market prices or negotiated prices. The selling stockholder may use any one or more
of the following methods when selling shares:
|
· |
ordinary brokerage transactions and transactions in which the broker-dealer solicits investors; |
|
· |
block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; |
|
· |
purchases by a broker-dealer as principal and resale by the broker-dealer for its account; |
|
· |
an exchange distribution in accordance with the rules of the applicable exchange; |
|
· |
privately negotiated transactions; |
|
· |
to cover short sales made after the date that this Registration Statement is declared effective by the Commission; |
|
· |
broker-dealers may agree with the selling stockholder to sell a specified number of such shares at a stipulated price per share; |
|
· |
a combination of any such methods of sale; and |
|
· |
any other method permitted pursuant to applicable law; provided, however, that selling stockholders who are executive officers or directors of the Company have agreed to sell the shares they hold personally through their individual broker (not a broker that may be engaged on behalf of the Company, if applicable) and not as principal acting for their own accounts. |
The selling stockholder may also sell shares
under an exemption from the registration requirements under the Securities Act, if available, rather than under this prospectus.
Broker-dealers engaged by the selling stockholders
may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the selling
stockholder (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated.
The selling stockholders may from time
to time pledge or grant a security interest in some or all of the Shares owned by it and, if it defaults in the performance of
their secured obligations, the pledgees or secured parties may offer and sell shares of common stock from time to time under this
prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act of
1933 amending the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders
under this prospectus.
Upon the company being notified in writing
by a selling stockholder that any material arrangement has been entered into with a broker-dealer for the sale of common stock
through a block trade, special offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, a
supplement to this prospectus will be filed, if required, pursuant to Rule 424(b) under the Securities Act, disclosing (i) the
name of each such selling stockholder and of the participating broker-dealer(s), (ii) the number of shares involved, (iii) the
price at which such the shares of common stock were sold, (iv) the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not conduct any investigation to verify the information
set out or incorporated by reference in this prospectus, and (vi) other facts material to the transaction. In addition, upon the
company being notified in writing by a selling stockholder that a donee or pledgee intends to sell more than 500 shares of common
stock, a supplement to this prospectus will be filed if then required in accordance with applicable securities law.
The selling stockholder also may transfer
the shares of common stock in other circumstances, in which case the transferees, pledgees or other successors in interest will
be the selling beneficial owners for purposes of this prospectus.
The selling stockholders and any broker-dealers
or agents that are involved in selling the shares may be deemed to be “underwriters” within the meaning of the Securities
Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Because
the selling stockholder may be deemed to be an underwriter within the meaning of the Securities Act, they will be subject to the
prospectus delivery requirements of the Securities Act. Discounts, concessions, commissions and similar selling expenses, if any,
that can be attributed to the sale of Securities will be paid by the selling stockholder and/or the purchasers. The selling stockholder
has represented and warranted to the company that it acquired the securities subject to this registration statement in the ordinary
course of the selling stockholder’s business and, at the time of its purchase of such securities the selling stockholder
had no agreements or understandings, directly or indirectly, with any person to distribute any such securities.
The company has advised the selling stockholders
that it may not use shares registered on this Registration Statement to cover short sales of common stock made prior to the date
on which this Registration Statement shall have been declared effective by the Commission. If the selling stockholder uses this
prospectus for any sale of the common stock, it will be subject to the prospectus delivery requirements of the Securities Act.
The selling stockholder will be responsible to comply with the applicable provisions of the Securities Act and Exchange Act, and
the rules and regulations thereunder promulgated, including, without limitation, Regulation M, as applicable to such selling stockholder
in connection with resales of their respective shares under this Registration Statement.
The company is required to pay all fees
and expenses incident to the registration of the shares, but the company will not receive any proceeds from the sale of the common
stock by selling stockholders. The company has agreed to indemnify the selling stockholder against certain losses, claims, damages
and liabilities, including liabilities under the Securities Act.
By Our Company
We are offering up to 46,875,000 shares
of Common Stock at a price of $0.15 per share. We are offering the shares directly to the public until such shares are
sold, however, we may terminate the offering prior to that date. There is no minimum amount of shares that must be sold
before we use the proceeds. Proceeds will not be returned to investors if we sell less than all of the 46,875,000 shares
being offered in this prospectus. The proceeds from the sales of the shares will be paid directly to us promptly following
each sale and will not be placed in an escrow account.
The offering will be conducted by our executive
officers, including Naresh Malik, our CEO; Frank McEnulty, our CFO; and Myles A. Pressey III, our Chairman and Chief Business Development
Officer. Under Rule 3a 4-1 of the Securities Exchange Act an issuer may conduct a direct offering of its securities
without registration as a broker/dealer. Such offering may be conducted by officers who perform substantial duties for
or on behalf of the issuer otherwise than in connection with securities transactions and who were not brokers or dealers or associated
persons of brokers or dealers within the preceding 12 months and who have not participated in selling an offering of securities
for any issuer more than once every 12 months, with certain exceptions.
Furthermore, such persons may not be subject
to a statutory disqualification under Section 3(a) (39) of the Securities Exchange Act and may not be compensated in connection
with securities offerings by payment of commission or other remuneration based either directly or indirectly on transactions in
securities and at the time of offering our shares may not be associated persons of a broker or dealer. Messrs.
Malik, McEnulty and Pressey III will meet these requirements.
How to Invest :
Subscriptions for purchase of shares offered
by this prospectus can be made by completing, signing and delivering to us, the following:
1) an executed copy of the Subscription
Agreement, available from the company; and
2) a check payable to the order of Zonzia Media, Inc. in
the amount of $0.15 for each share you want to purchase.
DESCRIPTION OF REGISTRANT’S SECURITIES
Authorized Capital Stock
Our authorized capital stock consists of
2,200,000,000 shares, 2,000,000,000 shares of which are common stock, par value $.001 per share, and 200,000,000 shares of which
are preferred stock, par value $.001 per share.
Common Stock
Dividends. Each share of our common
stock is entitled to receive an equal dividend, if one is declared, which is unlikely. We have never paid dividends on our common
stock and do not intend to do so in the foreseeable future. We intend to retain future earnings (if any) to finance our growth.
See “Risk Factors.”
Liquidation. If our company is liquidated,
then assets that remain (if any) after the creditors are paid and the owners of preferred stock receive liquidation preferences
(as applicable) will be distributed to the owners of our common stock pro rata.
Voting Rights. Each share of our
common stock entitles the owner to one vote. There is no cumulative voting. A simple majority can elect all of the directors of
our company at a given meeting, and the minority would not be able to elect any director of our company at that meeting.
Preemptive Rights. Owners of our
common stock have no preemptive rights. We may sell shares of our common stock to third parties without first offering such shares
to current stockholders.
Redemption Rights. We do not have
the right to buy back shares of our common stock except in extraordinary transactions, such as mergers and court approved bankruptcy
reorganizations. Owners of our common stock do not ordinarily have the right to require us to buy their common stock. We do not
have a sinking fund to provide assets for any buy back.
Conversion Rights. Shares of our
common stock cannot be converted into any other kind of stock except in extraordinary transactions, such as mergers and court approved
bankruptcy reorganizations.
Nonassessability. All outstanding
shares of our common stock are fully paid and nonassessable.
Preferred Stock
Our articles of incorporation authorize
our Board of Directors to issue “blank check” preferred stock. Our Board of Directors may divide this preferred stock
into series and establish the rights, preferences and privileges thereof. Our Board of Directors may, without prior stockholder
approval, issue any or all of the shares of this preferred stock with dividend, liquidation, conversion, voting or other rights
that could adversely affect the relative voting power or other rights of our common stock. Preferred stock could be used as a method
of discouraging, delaying or preventing a takeover or other change in control of our company. Issuances of preferred stock in the
future could have a dilutive effect on our common stock. See “Risk Factors—Risks Related to our Common Stock.”
As of the date of this Report, there are
no shares of our preferred stock outstanding.
Nevada Anti-Takeover Statutes
Nevada law provides that an acquiring person
who acquires a controlling interest in a corporation may only exercise the voting rights of control shares if those voting rights
are conferred by a majority vote of the corporation’s disinterested stockholders at a special meeting held upon the request
of the acquiring person. If the acquiring person is accorded full voting rights and acquires control shares with at least a majority
of all the voting power, then stockholders who did not vote in favor of authorizing voting rights for those control shares are
entitled to payment for the fair value of such stockholders’ shares. A “controlling interest” is an interest
that is sufficient to enable the acquiring person to exercise at least one-fifth of the voting power of the corporation in the
election of directors. “Control shares” are outstanding voting shares that an acquiring person or associated persons
acquire or offer to acquire in an acquisition and those shares acquired during the 90-day period before the person involved became
an acquiring person.
These provisions of Nevada law apply only
to “issuing corporations” as defined therein. An “issuing corporation” is a Nevada corporation that (a)
has 200 or more stockholders, with at least 100 of such stockholders being both stockholders of record and residents of Nevada,
and (b) does business in Nevada directly or through an affiliated corporation. As of the date of this Report, we do not have 100
stockholders of record that are residents of Nevada. Therefore, these provisions of Nevada law do not apply to acquisitions of
our shares and will not so apply until such time as both of the foregoing conditions are satisfied. At such time as these provisions
of Nevada law may apply to us, they may discourage companies or persons interested in acquiring a significant interest in or control
of our company, regardless of whether such acquisition may be in the interest of our stockholders.
Nevada law also restricts the ability of
a corporation to engage in any combination with an interested stockholder for three years from when the interested stockholder
acquires shares that cause the stockholder to become an interested stockholder, unless the combination or purchase of shares by
the interested stockholder is approved by the board of directors before the stockholder became an interested stockholder. If the
combination was not previously approved, then the interested stockholder may only effect a combination after the three-year period
if the stockholder receives approval from a majority of the disinterested shares or the offer satisfies certain fair price criteria.
An “interested stockholder”
is a person who is:
|
· |
the beneficial owner, directly or indirectly, of 10% or more of the voting power of the outstanding voting shares of the corporation; or |
|
· |
an affiliate or associate of the corporation and, at any time within three years immediately before the date in question, was the beneficial owner, directly or indirectly of 10% or more of the voting power of the then outstanding shares of the corporation. |
Our articles of incorporation and bylaws
do not exclude us from these restrictions.
These provisions are intended to enhance
the likelihood of continuity and stability in the composition of the board of directors and in the policies formulated by the board
of directors and to discourage some types of transactions that may involve the actual or threatened change of control of our company.
These provisions are designed to reduce our vulnerability to an unsolicited proposal for the potential restructuring or sale of
all or a part of our company. However, these provisions could discourage potential acquisition proposals and could delay or prevent
a change in control of our company. They also may have the effect of preventing changes in our management.
Periodic Securities and Exchange Commission
Reports
We file reports with the SEC electronically.
The reports we file are Forms 10-K, 10-Q and 8-K. You may read copies of materials we file with the SEC at the SEC’s Public
Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference
Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet site that will contain copies of the reports we file
electronically. The address for the Internet site is www.sec.gov.
Stock Transfer Agent
Our stock transfer agent for our securities
is Continental Stock Transfer & Trust Company.
SHARES ELIGIBLE FOR FUTURE SALE
Market Considerations
Currently, our common stock trades on the
OTC Pink Current Information market. This market is separate and distinct from the NASDAQ stock market and other stock exchanges.
NASDAQ has no business relationship with issuers of securities quoted on the OTC Pink Current Information market. The SEC’s
order handling rules, which apply to NASDAQ-listed securities, do not apply to securities quoted on the OTC.
Shares Covered by this Prospectus
As of July 62015, we have 226,822,131
shares of our common stock outstanding, of which approximately 2,055,833 shares are currently freely tradable prior to this offering.
Of the outstanding shares, all of the 43,131,591 shares being registered for resale in this offering may be sold without restriction
or further registration under the Securities Act, except for any shares purchased by our “affiliates,” as that term
is defined in Rule 144 under the Securities Act, whose sales may be made only in compliance with the limitations of Rule 144 described
below.
The remaining shares outstanding after
this offering are deemed “restricted securities” under Rule 144. Restricted securities may be sold in the public market
only if registered or if they qualify for an exemption under the Securities Act, such as Rule 144, which rule is summarized below.
Rule 144
Certain outstanding shares of our common
stock which are not included in this prospectus may be eligible for sale in the public market under Rule 144. In general, under
Rule 144 as currently in effect, a person who has beneficially owned restricted shares of our common stock for at least six months
would be entitled to sell their securities provided that (1) such person is not deemed to have been one of our affiliates at the
time of, or at any time during the three months preceding, a sale, (2) we are subject to the reporting requirements of the Exchange
Act for at least 90 days before the sale and (3) if the sale occurs prior to satisfaction of a one-year holding period, we provide
current information at the time of sale.
In the event that the registration statement
of which this prospectus is a part lapses for any reason (the Company is required to maintain its effectiveness for one year after
the effective date), all currently outstanding shares of common stock will be subject to resale pursuant to Rule 144, subject to
the limitations described herein. Common stock issued upon exercise of the options at any time while a registration statement covering
such shares is not effective will be subject to sale pursuant to Rule 144 upon the expiration of the holding period, which commences
on the date the Company receives payment of the exercise price under the option agreements.
Persons who have beneficially owned restricted
shares of our common stock for at least six months but who are our affiliates at the time of, or at any time during the three months
preceding, a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three-month
period only a number of securities that does not exceed the greater of:
|
· |
1% of the total number of securities of the same class then outstanding; or |
|
· |
the average weekly trading volume of such securities during the four calendar weeks preceding the filing of a notice on Form 144 with respect to such sale. |
provided, that, in each case, that
we are subject to the periodic reporting requirements of the Exchange Act for at least three months before the sale.
However, since our common stock is traded
over the counter, which is not an “automated quotation system,” our stockholders will not be able to rely on the market-based
volume limitation described in the second bullet above. If, in the future, our securities are listed on an exchange or quoted on
NASDAQ, then our stockholders would be able to rely on the market-based volume limitation. Unless and until our stock is so listed
or quoted, our stockholders can only rely on the percentage based volume limitation described in the first bullet above.
Such sales by affiliates must also comply
with the manner of sale, current public information and notice provisions of Rule 144. The selling stockholders will not be governed
by the foregoing restrictions when selling their shares pursuant to this prospectus.
Restrictions on the Use of Rule 144
by Shell Companies or Former Shell Companies
Rule 144 is not available for the resale
of securities initially issued by companies that are, or previously were, shell companies, like us, unless certain conditions are
met. As a result, it is likely that pursuant to Rule 144 our non-stockholders, who were issued shares of our common stock while
we were a shell company, will be able to sell the their shares of our common stock from and after November 26, 2015 (the one year
anniversary of the Form 10 disclosure) without registration. However, we are registering for public resale certain shares of our
outstanding common stock which were issued prior to the acquisition of HDIMAX, as described elsewhere in this in the registration
statement of which this prospectus forms a part.
LEGAL MATTERS
The validity of the issuance of the common
stock offered by the selling stockholders under this prospectus will be passed upon for us by Wilson & Oskam, LLP. Wilson &
Oskam, LLP’s partners and affiliates own a total of 259,393 shares of our common stock.
EXPERTS
The financial statements for the period
ended December 31, 2014 included in this prospectus and elsewhere in the registration statement, have been audited by Haynie &
Company, an independent registered public accounting firm, to the extent and for the periods indicated in their report appearing
elsewhere herein, and are included in reliance upon such report and upon the authority of such firm as experts in accounting and
auditing.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration
statement on Form S-1 under the Securities Act with respect to the common stock offered by this prospectus. This prospectus, which
is part of the registration statement, omits certain information, exhibits, schedules and undertakings set forth in the registration
statement. For further information pertaining to us and our common stock, reference is made to the registration statement and the
exhibits and schedules to the registration statement. Statements contained in this prospectus as to the contents or provisions
of any documents referred to in this prospectus are not necessarily complete, and in each instance where a copy of the document
has been filed as an exhibit to the registration statement, reference is made to the exhibit for a more complete description of
the matters involved.
You may read and copy all or any portion
of the registration statement without charge at the public reference room of the SEC at 100 F Street, N. E., Washington, D. C.
20549. Copies of the registration statement may be obtained from the SEC at prescribed rates from the public reference room of
the SEC at such address. You may obtain information regarding the operation of the public reference room by calling 1-800-SEC-0330.
In addition, registration statements and certain other filings made with the SEC electronically are publicly available through
the SEC’s web site at http://www.sec.gov. The registration statement, including all exhibits and amendments thereto, has
been filed electronically with the SEC.
We are subject to the information and periodic
reporting requirements of the Exchange Act and, accordingly, we file annual reports containing financial statements audited by
an independent registered public accounting firm, quarterly reports containing unaudited financial data, current reports and other
reports and information with the SEC. You may inspect and copy each of our periodic reports, proxy statements and other information
at the SEC’s public reference room, and at the web site of the SEC referred to above.
INDEX TO FINANCIAL STATEMENTS
Financial Statements of Zonzia Media, Inc. |
|
Report of Independent Registered Public Accounting Firm, Haynie & Company, Certified Public Accountants |
|
|
F-2 |
|
Balance Sheets as at March 31, 2015 and December 31, 2014 |
|
|
F-3 |
|
Statement of Operations for the period from May 24, 2014 (inception)
through December 31, 2014 |
|
|
F-4 |
|
Statement of Stockholders’ Deficit for the period from May 24,
2014 (inception) through December 31, 2014 |
|
|
F-5 |
|
Statement of Cash Flows for the period from May 24, 2014 (inception)
through December 31, 2014 |
|
|
F-6 |
|
Notes to financial statements |
|
|
F-7 |
|
Unaudited Interim Financial Statements of Zonzia Media, Inc. for the three months ended March 31, 2015 |
|
|
|
|
Condensed Balance Sheet |
|
|
F-16 |
|
Condensed Statement of Operations |
|
|
F-17 |
|
Condensed Statement of Stockholders’ Deficit |
|
|
F-18 |
|
Condensed Statement of Cash Flows |
|
|
F-19 |
|
Notes to condensed financial statements |
|
|
F-20 |
|
All schedules have been omitted because the information required
to be presented in them is not applicable or is shown in the financial statements or related notes.
INDEPENDENT AUDITOR’S REPORT
To the Board of Directors
Zonzia Media, Inc. (formerly HDIMAX Media, Inc. and Indigo-Energy,
Inc.)
Henderson, NV
We have audited the accompanying balance sheet
of Zonzia Media, Inc. (formerly HDIMAX Media, Inc. and Indigo- Energy, Inc.) as of December 31, 2014 and the related statement
of operations, stockholders’ deficit and cash flows for the period from May 24, 2014 to December 31, 2014. These consolidated
financial statements are the responsibility of Zonzia Media, Inc.’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 audits 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 financial statements referred
to above present fairly, in all material respects, the financial position of Zonzia Media, Inc. (formerly HDIMAX Media, Inc. and
Indigo-Energy, Inc.), as of December 31, 2014 and the results of their operations and their cash flows for the period from May
24, 2014 to December 31, 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 3 to the financial statements, the
Company has no source of recurring revenue; negative working capital; and has suffered recurring losses from operations; which
raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are
also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Haynie & Company
Haynie & Company
Salt Lake City, Utah
Date: April 15, 2015
ZONZIA MEDIA, INC.
(formerly HDIMAX Media, Inc. and Indigo-Energy,
Inc.)
BALANCE SHEET
| |
December 31, 2014 | |
ASSETS | |
| |
| |
| |
Current Assets | |
| |
Cash | |
$ | 208 | |
| |
| | |
Total assets | |
$ | 208 | |
| |
| | |
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | |
| | |
| |
| | |
Current Liabilities | |
| | |
Accounts payable | |
$ | 710,769 | |
Accrued expenses | |
| 690,247 | |
Related party accounts payable | |
| 340,163 | |
Accrued compensation | |
| 495,167 | |
| |
| | |
Total current liabilities | |
| 2,236,346 | |
| |
| | |
Stockholders' Equity (Deficit) | |
| | |
Preferred stock, $0.001 par value, 200,000,000 shares authorized and none issued and outstanding at December 31, 2014 | |
| | |
Common stock, $0.001 par value, 2,000,000,000 shares authorized and 758,065,119 shares issued and outstanding at December 31, 2014 | |
$ | 758,065 | |
Additional paid in capital | |
| 22,923,087 | |
Accumulated deficit | |
| (25,917,290 | ) |
| |
| | |
Total stockholders' equity (deficit) | |
| (2,236,138 | ) |
| |
| | |
Total liabilities and stockholders' equity (deficit) | |
$ | 208 | |
The accompanying notes are an integral part
of these financial statements
ZONZIA MEDIA, INC.
(formerly HDIMAX Media, Inc. and Indigo-Energy,
Inc.)
STATEMENT OF OPERATIONS
| |
For the Period from Inception on May 24, 2014 to December 31, 2014 | |
Revenue | |
| | |
Net revenue | |
$ | 439 | |
| |
| | |
Expenses | |
| | |
General and administrative | |
| 53,565 | |
Sales and marketing | |
| 1,006,102 | |
Officer compensation | |
| 23,295,167 | |
Professional fees | |
| 729,411 | |
| |
| | |
Total operating expenses | |
| 25,084,245 | |
| |
| | |
Gain (loss) from operations | |
| (25,083,806 | ) |
| |
| | |
Other income (expense) | |
| | |
Interest expense | |
| (13,462 | ) |
| |
| | |
Total other expenses | |
| (13,462 | ) |
| |
| | |
Net loss | |
$ | (25,097,268 | ) |
| |
| | |
Net loss per share - basic and diluted | |
$ | (0.14 | ) |
| |
| | |
Weighted average shares outstanding | |
| 185,663,218 | |
The accompanying notes are an integral part
of these financial statements
ZONZIA MEDIA, INC.
(formerly HDIMAX Media, Inc. and Indigo-Energy,
Inc.)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
|
|
Common Stock |
|
|
Paid in |
|
|
Accumulated |
|
|
Total Equity |
|
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
(deficit) |
|
Balance, Inception May 24, 2014 |
|
|
– |
|
|
$ |
– |
|
|
$ |
488 |
|
|
$ |
– |
|
|
$ |
488 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of founder's shares in May 2014 |
|
|
48,500,000 |
|
|
|
48 |
|
|
|
(48 |
) |
|
|
– |
|
|
|
– |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cancellation of founder's shares related to reverse capitalization in November 2014 |
|
|
(48,500,000 |
) |
|
|
(48 |
) |
|
|
47 |
|
|
|
– |
|
|
|
(1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reverse capitalization in November 2014 |
|
|
757,689,386 |
|
|
|
757,689 |
|
|
|
(488 |
) |
|
|
(820,022 |
) |
|
|
(62,821 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued for debt settlement in December 2014 |
|
|
375,733 |
|
|
|
376 |
|
|
|
123,088 |
|
|
|
– |
|
|
|
123,464 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock based compensation |
|
|
– |
|
|
|
– |
|
|
|
22,800,000 |
|
|
|
– |
|
|
|
22,800,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
(25,097,268 |
) |
|
|
(25,097,268 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance December 31, 2014 |
|
|
758,065,119 |
|
|
$ |
758,065 |
|
|
$ |
22,923,087 |
|
|
$ |
(25,917,290 |
) |
|
$ |
(2,236,138 |
) |
The accompanying notes are an integral part
of these financial statements.
ZONZIA MEDIA, INC.
(formerly HDIMAX Media, Inc. and Indigo-Energy,
Inc.)
STATEMENT OF CASH FLOWS
| |
For the Period from Inception on May 24, 2014 to December 31, 2014 | |
Cash Flows from Operating Activities | |
| | |
Net loss | |
$ | (25,097,268 | ) |
| |
| | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |
| | |
Stock-based compensation | |
| 22,800,000 | |
Debt discount and deferred issuance cost amortization | |
| 12,560 | |
Change in accounts payable | |
| 460,530 | |
Change in accrued expenses | |
| 496,754 | |
Change in related party accounts payable | |
| 272,465 | |
Change in accrued payroll | |
| 495,167 | |
| |
| | |
Net cash used in operating activities | |
| (559,792 | ) |
| |
| | |
Cash Flows from Financing Activities | |
| | |
Proceeds from related party notes payable | |
| 560,000 | |
| |
| | |
Net cash provided by financing activities | |
| 560,000 | |
| |
| | |
Net increase in cash and cash equivalents | |
| 208 | |
| |
| | |
Cash and cash equivalents at beginning of the period | |
| – | |
| |
| | |
Cash and cash equivalents at end of the period | |
$ | 208 | |
| |
| | |
Supplementary Disclosures of Cash Flow Information | |
| | |
Cash paid for income taxes | |
$ | – | |
Cash paid for interest | |
$ | – | |
The accompanying notes are an integral part
of these financial statements
ZONZIA MEDIA, INC.
(formerly HDIMAX Media, Inc. and Indigo-Energy,
Inc.)
Notes to Financial Statements
NOTE 1 - DESCRIPTION OF BUSINESS
Zonzia Media, Inc, initially organized as HDIMAX
Media, Inc., and incorporated in the State of Delaware in May 2014, is a digital publishing and broadcast Company focused on content
development and multi-platform content distribution, advertising, and ecommerce.
Reverse Merger with Indigo-Energy, Inc.
On November 21, 2014, through a wholly-owned
subsidiary of a public shell Company then known as Indigo-Energy, Inc., HDIMAX Acquisition Corporation, a Nevada corporation, was
merged with and into HDIMAX, Inc., a Delaware corporation (“HDIMAX”) (such merger, the “Merger”) pursuant
to the Agreement and Plan of Merger, effective as of September 2, 2014, and as amended effective as of November 20, 2014, by and
among Indigo-Energy, Inc. (our “company” or “we” or “us”), HDIMAX and HDIMAX Acquisition Corporation
(the “Merger Agreement”). HDIMAX was the surviving corporation of the Merger and as such will continue as a wholly-owned
subsidiary of our Company. Upon closing the merger, we changed our name to HDIMAX Media, Inc.
As a result of the Merger, all of HDIMAX’s
common stock was converted into 712,121,205 shares of our Company’s common stock, which represents approximately 94% of the
outstanding shares of our company’s common stock after giving effect to the Merger. The common stock issuance, representing
94% of the outstanding shares of the consolidated Company was accounted for as a reverse capitalization in accordance with accounting
principles generally accepted in the United States (“US GAAP”) and the Rules and Regulations as promulgated by the
United States Securities and Exchanges Commission (“SEC”).
In accordance with US GAAP, and as previously
disclosed in our original Current Report on Form 8-K as filed on November 26, 2014, HDIMAX, Inc. (private operating company) was
deemed the accounting acquirer. Further, as of the date of the reverse capitalization transaction, the legal acquirer also deemed
the accounting acquiree, Zonzia Media, Inc. (formerly HDIMAX Media, Inc. and Indigo-Energy, Inc.) was considered a shell company
as defined in Rule 12b-2 promulgated under the Securities Exchange Act of 1934. Further, the Staff of the Securities and Exchange
Commission considers a public shell reverse acquisition to be a capital transaction in substance, rather than a business combination.
That is, the transaction is a reverse recapitalization, equivalent to the issuance of stock by the private company (HDIMAX, Inc.)
for the net monetary assets of the shell corporation accompanied by a recapitalization. The accounting is similar to that resulting
from a reverse acquisition, except that no goodwill or other intangible assets should be recorded.
As of December 31, 2014, we provided clients
and customers advertising and ecommerce opportunities through engaging consumers on two websites, Frontlinewire.com and HDIMAX.com.
HDIMAX.com - Operates as an internet
television network. HDI Max is engaged in the internet delivery of television shows, movies and original content to its customers
directly on televisions, computers, and mobile devices in the United States and Internationally. The original content ranges from
news and comedy to travel and sports.
HDIMAX.com offers consumers live video streaming
that will be unique to internet television in that users are not charged based on usage and all consumers have unlimited access
to live streaming or other previously posted content such as movies and television.
Frontlinewire.com (FLW) - Frontlinewire.com
was launched to provide a premier news service that delivers the latest breaking news and information on the latest
top stories, weather, business, entertainment, politics, and more.
In addition to the above websites, we previously
had an agreement to provides ecommerce opportunities to other websites, all of which were controlled by our former, Chairman, and
Chief Executive Office, Rajinder Brar, including www.fashionstylemag.com, www.themanlife.com, www.thewomanlife.com, and www.southasianlife.com.
On January 22, 2015, we entered into a Settlement
Agreement in which we cancelled all of the 712,121,205 shares of restricted and unregistered common stock previously issued to
effectuate the merger with Rajinder Brar, the previous sole owner of HDIMAX, Inc. In consideration for the shares being cancelled,
we forfeited our rights to sell advertising and other products on websites previously controlled Mr. Brar and related entities,
with the exception of www.hdimax.com. An outline of the significant terms of the Settlement Agreement include, but are not limited
to, the following:
|
· |
The 712,121,205
million shares of HDIMAX Media, Inc. (formerly Indigo-Energy) common stock issued to Rajinder Brar, the owner of 100% of the
previously outstanding stock of HDIMAX, Inc. immediately preceding the reverse acquisition transaction, were cancelled. |
|
· |
Rajinder Brar, Aneliya Vasileva, and Myles Pressey III, previously appointed as the Company’s officers and Board of Directors immediately following the completion of the reverse acquisition, resigned and forfeited future compensation terms associated with any and all previously agreed upon employment agreements, inclusive of the compensation accrued as of December 31, 2014. |
|
· |
Mr. James C. Walter Sr. was reappointed to serve as a Director charged with appointing new officers. Mr. Walter Sr. served as the Sole Officer and Director of the Company immediately preceding the completion of the reverse acquisition transaction. |
|
· |
The Company’s option agreement to acquire Fashion Style Magazine, Inc., an entity wholly owned by Rajinder Brar, was cancelled. |
|
· |
The Omnibus Agreement and License dated November 21, 2014, by and between the Company and Fashion Style Magazine, Inc. was terminated. The brands and assets wholly owned by Rajinder Brar through Fashion Style Magazine, Inc. were intended to be a core portion of the consolidated Company’s business operations subsequent to the completion of the reverse acquisition. |
|
· |
The Company forfeited all rights to Frontlinewire.com, a brand and website acquired in the reverse acquisition. |
|
· |
The Company maintained all rights to hdimax.com, a brand and website acquired in the reverse acquisition, but agreed to assign those assets back to their original owners by May 1, 2015. We do not intend to further develop or publish content at www.hdimax.com. |
For additional details, including
a copy of the Settlement Agreement, please see our Current Report on Form 8-K filed on January 29, 2015.
On March 9, 2015 we changed our name to
Zonzia Media, Inc. and we are developing a new multi-platform entertainment distribution channel with the goal of being a unique
hybrid of a linear channel, a video-on-demand channel and an over-the-top channel.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Basis of Presentation
The accompanying financial statements have
been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States
of America (“US GAAP”) and have been presented on a going concern basis, which contemplates the realization of assets
and satisfaction of liabilities in the normal course of business.
Use of Estimates
The preparation of financial statements in
conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting periods. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid instruments
with an original maturity of 90 days or less at the time of purchase to be cash equivalents. The Company did not have any cash
equivalents at December 31, 2014.
Revenue Recognition
We recognize revenues when the services or
products have been provided or delivered, the fees we charge are fixed or determinable, we and our advertisers or other customers
understand the specific nature and terms of the agreed upon transactions, and collectability is reasonably assured.
Most of our advertising customers pay on a
cost-per-impression basis that enables advertisers to pay us based on the number of times their ads display on our websites. For
the sale of certain third-party products and services, we recognize revenue on negotiated commission rate as a percentage of the
gross amount billed to the customers.
Fair Value Measurements
The fair value of a financial instrument is
the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer
prices. The fair value should be calculated based on assumptions that market participants would use in pricing the asset
or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration
of non-performance risk, including the party’s own credit risk.
Fair value measurements do not include transaction
costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair
values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair
value measurement. The fair value hierarchy is defined into the following three categories:
Level 1: 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 that
are not corroborated by market data.
Stock Based Compensation
The Company has on occasion issued equity and
equity linked instruments to employees and non-employees in lieu of cash for the receipt of goods and services and, in certain
circumstances the settlement of short-term loan arrangements. The applicable GAAP establishes that share-based payment transactions
with non-employees shall be measured at the fair value of the consideration received or the fair value of the equity instruments
issued, whichever is more reliably measurable.
In these transactions, the Company issues unregistered
and restricted equity instruments.
While the Company currently has 2,055,832 shares
of freely-traded stock with a quoted market price (a Level 1input within the GAAP hierarchy), the fair value of the unregistered
and restricted shares issued in compensation transactions with non-employees as valued by the quoted market price does not always
reflect the economic substance of the transactions and does not always represent the Company’s principal market, correspondingly,
the quoted market price is not always the most reliably measurable indicator of the fair value. The determination of fair value
is based upon facts and circumstances including the liquidity restrictions placed upon our unregistered restricted equity instruments
along with the quoted market not being the most active or principal trading market.
When unregistered common shares are issued
for the settlement of short-term financing arrangements, the reacquisition price of the extinguished financing arrangement is determined
by the value of the debt which is more clearly evident, and no additional inducement expense is recognized.
In situations in which we issue unregistered
restricted common shares in exchange for goods and services, and the value of the goods and services are not the most reliably
measurable, we recognize the fair value of the unregistered restricted equity instruments based on the value of similar instruments
issued in private placements in exchange for cash in the most recent transactions (a Level 2 input within the GAAP hierarchy).
The Company has determined this methodology reflects the risk adjusted fair value of our unregistered restricted equity instruments
using a commercially reasonable valuation technique within the most active market.
Income Taxes
Income taxes are recorded in the period in
which the related transactions have been recognized in the financial statements. Deferred tax assets and liabilities are recorded
for expected future tax consequences of loss carryforwards and temporary differences. Temporary differences are the differences
between the reported amounts of assets and liabilities in the financial statements and their tax basis. Deferred tax assets are
reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of, or all of,
the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax
laws and rates on the date of enactment.
Loss Per Common Share
Basic net loss per common share is computed
by dividing net loss by the weighted average number of common shares outstanding. Dilutive loss per common share includes additional
dilution from common stock equivalents, such as stock options and warrants, and convertible instruments, if the impact is not antidilutive.
Recently Issued Accounting Pronouncements
In May 2014, the Financial Accounting Standards
Board (“FASB”) issued Accounting Standards (“ASU”) No. 2014-09, Revenue from Contracts with Customers.
The objective of this update is to 1) remove inconsistencies and weaknesses in revenue requirements, 2) provide a robust framework
for addressing revenue recognition issues, 3) improve comparability of revenue recognition practices across entities, industries,
jurisdictions, and capital markets 4) provide more useful information to users of financial statements through improved disclosure
requirements, and 5) simplify the preparation of financial statements. This update is effective in annual reporting periods beginning
after December 15, 2016 and the interim periods within that year. The Company will be evaluating the impact of this update
as it pertains to the Company’s financial statements and other required disclosures on an on-going basis, currently contingent
the commencement of principal revenue generating activities, until its eventual adoption and implementation.
In June 2014, the FASB issued ASU No. 2014-10,
Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable
Interest Entities Guidance in Topic 810, Consolidation, which removes all incremental financial reporting requirements from GAAP
for development stage entities, including the removal of Topic 915 from the FASB Accounting Standards Codification. The presentation
and disclosure requirements in Topic 915 will no longer be required for the first annual period beginning after December 15, 2014.
The revised consolidation standards are effective one year later, in annual periods beginning after December 15, 2015. Early adoption
is permitted. We adopted ASU No. 2014-10 effective on our inception date of May 24, 2014.
In June 2014, the FASB issued
ASU No. 2014-12, Stock Compensation. The amendments require that a performance target that affects vesting and that could be achieved
after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in
as it relates to awards with performance conditions that affect vesting to account for such awards. As such, the performance target
should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period
in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable
to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being
achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively
over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service
period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately
vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award
if the performance target is achieved. As indicated in the definition of vest, the stated vesting period (which includes the period
in which the performance target could be achieved) may differ from the requisite service period. The amendment is effective for
annual periods beginning after December 15, 2015 with early adoption permitted. The Company is currently evaluating the impacts
of this amendment on the stock-based compensation awards expected to be issued in future periods.
In August 2014, the FASB issued
ASU No. 2014-15 Presentation of Financial Statements – Going Concern. In connection with preparing financial statements for
each annual and interim reporting period, an entity's management should evaluate whether there are conditions or events, considered
in the aggregate, that raise substantial doubt about the entity's ability to continue as a going concern within one year after
the date that the financial statements are issued (or within one year after the date that the financial statements are
available to be issued when applicable).
Management's evaluation should
be based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements
are issued (or at the date that the financial statements are available to be issued when applicable).
Substantial doubt about an
entity's ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate
that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that
the financial statements are issued (or available to be issued).
When management identifies
conditions or events that raise substantial doubt about an entity's ability to continue as a going concern, management should consider
whether its plans that are intended to mitigate those relevant conditions or events will alleviate the substantial doubt. The mitigating
effect of management's plans should be considered only to the extent that (1) it is probable that the plans will be effectively
implemented and, if so, (2) it is probable that the plans will mitigate the conditions or events that raise substantial doubt about
the entity's ability to continue as a going concern.
If conditions or events raise
substantial doubt about an entity's ability to continue as a going concern, but the substantial doubt is alleviated as a result
of consideration of management's plans, the entity should disclose information that enables users of the financial statements to
understand all of the following (or refer to similar information disclosed elsewhere in the footnotes):
a. Principal conditions
or events that raised substantial doubt about the entity's ability to continue as a going concern (before consideration of management's
plans)
b. Management's evaluation
of the significance of those conditions or events in relation to the entity's ability to meet its obligations
c. Management's plans
that alleviated substantial doubt about the entity's ability to continue as a going concern.
If conditions or events raise
substantial doubt about an entity's ability to continue as a going concern, and substantial doubt is not alleviated after consideration
of management's plans, an entity should include a statement in the footnotes indicating that there is substantial doubt about
the entity's ability to continue as a going concern within one year after the date that the financial statements are issued
(or available to be issued). Additionally, the entity should disclose information that enables users of the financial statements
to understand all of the following:
a. Principal conditions
or events that raise substantial doubt about the entity's ability to continue as a going concern
b. Management's evaluation
of the significance of those conditions or events in relation to the entity's ability to meet its obligations
c. Management's plans
that are intended to mitigate the conditions or events that raise substantial doubt about the entity's ability to continue as a
going concern.
We do not expect the effective implementation
of this ASU, beginning in fiscal 2017, to materially impact future disclosures.
In November 2014, the FASB issued ASU No. 2014-16
Derivatives and Hedging. For hybrid financial instruments issued in the form of a share, an entity (an issuer or an investor) should
determine the nature of the host contract by considering all stated and implied substantive terms and features of the hybrid financial
instrument, weighing each term and feature on the basis of relevant facts and circumstances. That is, an entity should determine
the nature of the host contract by considering the economic characteristics and risks of the entire hybrid financial instrument,
including the embedded derivative feature that is being evaluated for separate accounting from the host contract.
In evaluating the stated and implied substantive
terms and features, the existence or omission of any single term or feature does not necessarily determine the economic characteristics
and risks of the host contract. Although an individual term or feature may weigh more heavily in the evaluation on the basis of
facts and circumstances, an entity should use judgment based on an evaluation of all the relevant terms and features. For example,
the presence of a fixed-price, noncontingent redemption option held by the investor in a convertible preferred stock contract is
not, in and of itself, determinative in the evaluation of whether the nature of the host contract is more akin to a debt instrument
or more akin to an equity instrument. Rather, the nature of the host contract depends on the economic characteristics and risks
of the entire hybrid financial instrument. The amendment is effective for fiscal years beginning after December 15, 2015 and may
be retroactively applied for all periods. We are currently evaluating the potential impacts on our financial statements in the
event we enter into these types of arrangements in the future.
In February 2015 the FASB issued ASU No. 2015-02,
Consolidation. Under current GAAP we may be required to consolidate another legal entity in situations in which our contractual
rights do not give us the ability to act primarily on our own behalf, we do not hold a majority of the legal entity's voting rights,
or we are not exposed to a majority of the legal entity's economic benefits or obligations. The Standards Update amends the GAAP
to require that all legal entities are subject to reevaluation under the revised consolidation model.
Specifically, the amendments:
1. Modify the evaluation
of whether limited partnerships and similar legal entities are variable interest entities (VIEs) or voting interest entities
2. Eliminate the
presumption that a general partner should consolidate a limited partnership
3. Affect the consolidation
analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships
4. Provide a scope
exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with
or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered
money market funds.
We do not believe this updated
consolidation guidance will have a material impact on our future financial position, results of operations, or cash flows.
In April 2015 the FASB issued
ASU No. 2015-03, Interest-Imputation of Interest. The Standards Update requires that debt issuance costs related to a recognized
debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent
with debt discounts. We do not believe this updated presentation requirement will have a material impact on our future financial
position, results of operations, or cash flows.
There have been no other recently issued accounting
pronouncements through the date of this report that the Company believes will have a material impact on the financial position,
results of operations, or cash flows.
NOTE 3 - GOING CONCERN
Since our inception on May 24, 2014, we have
generated immaterial revenues resulting in the incurrence of a net loss for the period ended December 31, 2014. This has further
led to negative working capital, all which results in substantial doubt about the Company’s ability to continue as a going
concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Our management, Board, and Advisory Board has
focused its efforts and our limited resources on raising additional capital through debt or equity offerings at terms not detrimental
to our planned future operations. As of the date of this report we do not have any firm funding commitments.
NOTE 4 - NOTES PAYABLE
In June and September we received proceeds
from short-term loans from Indigo-Energy, the pre-merger public shell Company used to effectuate our reverse capitalization, for
proceeds of $200,000 and $250,000, respectively. Indigo-Energy financed the loans to us on a pre-merger basis, totaling $450,000,
via the issuance of 2,272,727 (100,000,000 pre-merger) shares to investors. Upon completion of the merger with Indigo-Energy, considered
to be the accounting acquiree in accordance with US GAAP, the note payable was eliminated and the corresponding 2,272,727 shares
issued were including in our reverse capitalization adjustment.
In November 2014 we entered into two convertible
short-term notes payable with investors for proceeds totaling $110,000. The notes, at the option of the holder, were convertible
into shares of our restricted common stock at a 25% discount to the average closing quoted market price for the ten days immediately
prior to the conversion date. On December 17, 2014, the holders of the notes converted all of the principal and accrued interest
into 375,733 shares of restricted common stock. Since the notes were convertible into a predominantly fixed monetary value on
the dates of issuance in accordance with US GAAP, we determined the notes would be net settled via the issuance of restricted
common stock which resulted in the conversion feature being classified as a liability. During the period ended December 31, 2014
we recognized interest expense totaling $11,660 resulting from the accretion of interest through the date of conversion.
NOTE 5 - RELATED PARTY TRANSACTIONS
On May 24, 2014 our prior Chairman and Chief
Executive Officer contributed the brands, rights, and ecommerce opportunities of HDIMAX.com and Frontlinewire.com to the Company
in exchange for 48,500,000 shares of common stock of the Company. Since we were under control of our founder on the date of the
transaction, our founder’s historical cost became the carrying cost of the contributed assets totaling $488. As of December
31, 2014 the cost of registering the websites was fully amortized, however, we maintained the rights to the domain names.
During the period ended December 31, 2014 we
paid our founder, Chairman, and Chief Executive Officer and related entities $211,591 for the development of content and other
marketing related expenses. The amount is classified in sales and marketing in the accompanying statement of operations.
As of December 31, 2014 we owed a related party
$340,163 as result of the related party directly paying third party vendors on our behalf. We do not have any formalized arrangement
for the settlement of this obligation and the related party has informally agreed to defer payment until we have obtained the appropriate
level of capital resources and liquidity. Since the obligations are effectively due on demand they are classified as current in
the accompanying balance sheet.
NOTE 6 - ACCRUED EXPENSES
Subsequent to the completion of our reverse
merger and recapitalization and corresponding Settlement Agreement, as more fully discussed in Note 10 – Subsequent Events,
we have been named as debtors by certain creditors of entities controlled by our former Chairman, Chief Executive Officer, and
majority shareholder through which we previously held an option to acquire and had certain Omnibus and License Agreements. As of
December 31, 2014 we have accrued total obligations of $690,247 associated with our exposure to these liabilities. We have engaged
legal counsel to vigorously dispute our alleged obligations to settle these accrued expenses.
NOTE 7 - STOCKHOLDERS’ EQUITY
Common Stock
As of December 31, 2014 we had 758,065,119
shares of common stock issued and outstanding. Our common stock transactions through the date of this report are as follows:
On May 24, 2014 we issued 48,500,000 shares
of common stock to our prior Chairman and Chief Executive Officer in exchange for contributed assets with a total value of $488.
On November 21, 2014, upon completion of our
merger, we issued our prior Chairman and Chief Executive Officer 712,121,205 shares of restricted and unregistered common stock.
Since we were deemed the accounting acquirer in our reverse merger transaction with a public shell company we determined the substance
of the transaction was capital in nature, rather than a business combination. In accounting for the reverse recapitalization we
recognized the net issuance of 709,189,386 shares of common stock for the assumption of net liabilities resulting in a net equity
deduction of $62,821.
On November 21, 2014 we entered into employment
agreements with two of our former officers to grant an aggregate of 120,000,000 shares of common stock for compensation. The grants
were to vest in two tranches, the first of which was on January 1, 2015. For the period ended December 31, 2014 we recognized compensation
cost associated with these employment agreements of $22,800,000. In January 22, 2015, as part of our Settlement Agreement, we retroactively
cancelled these employment agreements and all previously accrued compensation and related burden was forgiven.
In December 2014 we issued a total of 375,733
shares of restricted and unregistered common stock in settlement of convertible notes payable with a principal balance of $110,000
and unamortized discounts of $13,088.
In January 2015 we issued 75,000 shares of
restricted and unregistered common stock for consulting services valued at $25,000.
In January 2015 we issued 57,971 shares restricted
and unregistered shares of common stock for cash totaling $10,000.
In January 2015 we issued a total of 145,000,000
shares of restricted and unregistered shares of common stock as compensation to our officers, directors, and other consultants
valued at $54,016,061.
In January 2015 we issued 5,000,000 shares
of restricted and unregistered shares of common stock to a former employee of HDIMAX, Inc. valued at $1,900,000.
In January 2015, in accordance with the terms
of our Settlement Agreement with our former Chairman and Chief Executive Officer, we cancelled 712,121,205 shares of unregisters
and restricted common stock.
In February 2015 we issued 142,500 shares of
restricted and unregistered common stock for accounting and legal services valued at $21,179.
In February 2015 we issued a total of 200,000
shares of restricted and unregistered shares of common stock as compensation directors valued at $38,348.
In February 2015 we issued 3,750,000 shares
of restricted and unregistered common stock for consulting services valued at $719,021.
In February 2015 we issued 177,777 restricted
and unregistered shares of common stock for cash totaling $32,800.
In February 2015 we issued 7,500,000 shares
of restricted and unregistered common stock in settlement of previously accrued related party liabilities totaling $340,163.
Stock Options
In accordance with the terms of our Merger
Agreement, the Company exchanged all of the previously outstanding options on a one for one basis. The options are fully vested
and all associated compensation expense was recognized in periods prior to that presented. The stock option grant date fair value
was estimated using a Black-Scholes pricing model.
As of December 31, 2014 the Company had 568,182
stock options outstanding. During the period presented there were no options granted, exercised, cancelled, or forfeited, correspondingly,
no additional compensation expense was recognized for the periods presented. All options outstanding are exercisable and do not
have any intrinsic value at December 31, 2014 and are set to expire in October of 2017. At December 31, 2014 the weighted average
exercise price of the outstanding options was $6.60 with a weighted average remaining term of 2.83 years.
Warrants
In accordance with the terms of our Merger
Agreement, the Company exchanged all of the previously outstanding warrants on a one for one basis. The warrants are fully vested
and all associated consideration was recognized in periods prior to that presented. The warrant grant date fair value was estimated
using a Black-Scholes pricing model.
As of the December 31, 2014, the Company had
outstanding warrants of 871,591. The weighted average exercise price of the outstanding warrants at December 31, 2014 was $0.88
with a weighted average remaining term of 2.83 years as of December 31, 2014. The warrants did not have any intrinsic value as
of December 31, 2014 and were fully vested. Of the outstanding warrants, 862,500 are contingently exercisable only in the event
that other equity-linked instruments are exercised.
NOTE 8 - INCOME TAXES
Income taxes from continued operations for the period ended December
31, 2014 consist of the following:
| |
2014 | |
Current: | |
| | |
Federal | |
$ | – | |
| |
| | |
Deferred: | |
| | |
NOL Carryforwards | |
$ | 887,000 | |
Valuation allowance | |
| (887,000 | ) |
Deferred tax assets, net | |
$ | – | |
At December 31, 2014 we had federal net operating
losses of approximately $2,609,000 which will begin to expire in 2034 and could be subject to certain limitations under section
382 of the Internal Revenue Code associated with changes in control we effectuated in the first quarter of 2015.
The Company has provided a full valuation allowance
for all periods for its net deferred tax assets as it cannot conclude it is more likely than not that they will be realized or
limited and / or forfeited under the applicable provisions of the Internal Revenue Code prior to expiration.
As of December 31, 2014, the Company did not
have any unrecognized tax benefits. The Company's policy is to recognize interest and penalties related to income tax matters
in income tax expense. The Company currently has no federal or state tax examinations in progress. The Company is subject to U.S.
federal and state income tax examination from inception in 2014.
NOTE 9 - REVERSE MERGER AND
RECAPITALIZATION
On November 21, 2014 we recapitalized the previously
outstanding 48,500,000 outstanding shares of HDIMAX, Inc. common stock via a reverse merger with a wholly-owned subsidiary of Indigo-Energy,
Inc., a public shell company. In order to complete the reverse merger, Indigo-Energy, Inc., defined as the legal acquirer, issued
712,121,205 shares of restricted and unregistered shares of common stock. The issuance of the shares of common stock resulted in
a change of control of Indigo-Eneregy, Inc. in which the previous shareholder of HDIMAX, Inc. obtained approximately 94% of the
consolidated Company immediately following the transaction.
Further, in accounting for the reverse merger,
HDIMAX is deemed to be the accounting acquirer. Since as of the date of the transaction, Indigo-Energy, Inc., the legal acquirer
also deemed the accounting acquiree, was considered a shell company as defined in Rule 12b-2 promulgated under the Securities Exchange
Act of 1934, we determined the transaction was capital in nature rather than a business combination. Correspondingly, in accordance
with the Rules and Regulations as promulgated by the Securities and Exchange Commission (“SEC”), we recognized the
issuance of the restricted and unregistered shares of common stock based on the assumption of net monetary liabilities, along with
a recapitalization. On the date of merger we assumed net liabilities of $107,901. Additionally, as a result of the par value of
the stock being excess of the net liabilities assumed and the pre-merger equity of the shell company, we recognized an adjustment
to our accumulated deficit of $820,022 associated with the completion of the transaction since the par value and assumed liabilities
exceeded our previous excess capital.
NOTE 10 - SUBSEQUENT EVENTS
See Note 7 – Stockholders’ Equity
for a description of the unregistered and restricted share issuances subsequent to December 31, 2014 and through the date of this
report.
On January 22, 2015 we entered into a Settlement
Agreement with Rajinder Brar, the previous sole owner of HDIMAX, Inc., in which we cancelled all of the 712,121,205 shares of common
stock previously issued to Mr. Brar. In consideration for the shares being cancelled, we forfeited our rights to sell advertising
and other products on websites previously controlled Mr. Brar and related entities, with the exception of www.hdimax.com. An outline
of the significant terms of the Settlement Agreement include, but are not limited to, the following:
|
· |
The 712,121,205 million shares of HDIMAX Media, Inc. (formerly Indigo-Energy) common stock issued to Rajinder Brar, the owner of 100% of the previously outstanding stock of HDIMAX, Inc. immediately preceding the reverse acquisition transaction, were cancelled. |
|
· |
Rajinder Brar, Aneliya Vasileva, and Myles Pressey III, previously appointed as the Company’s officers and Board of Directors immediately following the completion of the reverse acquisition, resigned and forfeited future compensation terms associated with any and all previously agreed upon employment agreements. |
|
· |
Mr. James C. Walter Sr. was reappointed to serve as a Director charged with appointing new officers. Mr. Walter Sr. served as the Sole Officer and Director of the Company immediately preceding the completion of the reverse acquisition transaction. |
|
· |
The Company’s option agreement to acquire Fashion Style Magazine, Inc., an entity wholly owned by Rajinder Brar, was cancelled. |
|
· |
The Omnibus Agreement and License dated November 21, 2014, by and between the Company and Fashion Style Magazine, Inc. was terminated. The brands and assets wholly owned by Rajinder Brar through Fashion Style Magazine, Inc. were intended to be a core portion of the consolidated Company’s business operations subsequent to the completion of the reverse acquisition. |
|
· |
The Company forfeited all rights to Frontlinewire.com, a brand and website acquired in the reverse acquisition. |
|
· |
The Company maintained all rights to hdimax.com, a brand and website acquired in the reverse acquisition, but agreed to assign those assets back to their original owners by May 1, 2015. |
We do not intend to further develop or publish
content at www.hdimax.com. For additional details, including a copy of the Settlement Agreement, please see our Current Report
on Form 8-K filed on January 29, 2015.
During the first quarter of 2015, associated
with the cancellation of our previously effective employment agreements with two former officers, we reversed previously accrued
compensation expense and related burden, inclusive of stock-based compensation, totaling $23,295,167.
ZONZIA MEDIA, INC.
(formerly HDIMAX Media, Inc. and Indigo-Energy,
Inc.)
CONDENSED BALANCE SHEETS
| |
March 31, 2015 | | |
December 31, 2014 | |
| |
(unaudited) | | |
| |
ASSETS | |
| | | |
| | |
| |
| | | |
| | |
Current Assets | |
| | | |
| | |
Cash | |
$ | 3,936 | | |
$ | 208 | |
Prepaid professional fees | |
| 2,420 | | |
| – | |
| |
| | | |
| | |
Total assets | |
$ | 6,356 | | |
$ | 208 | |
| |
| | | |
| | |
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | |
| | | |
| | |
| |
| | | |
| | |
Current Liabilities | |
| | | |
| | |
Accounts payable | |
$ | 749,526 | | |
$ | 710,769 | |
Accrued expenses | |
| 267,799 | | |
| 690,247 | |
Related party accounts payable | |
| – | | |
| 340,163 | |
Accrued compensation | |
| 241,435 | | |
| 495,167 | |
| |
| | | |
| | |
Total current liabilities | |
$ | 1,258,760 | | |
$ | 2,236,346 | |
| |
| | | |
| | |
| |
| | | |
| | |
Stockholders' Equity (Deficit) | |
| | | |
| | |
| |
| | | |
| | |
Preferred stock, $0.001 par value, 200,000,000 shares authorized and none issued and outstanding at March 31, 2015 and December 31, 2014 | |
$ | – | | |
$ | – | |
Common stock, $0.001 par value, 2,000,000,000 shares authorized and 211,197,162 and 758,065,119 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively | |
| 211,197 | | |
| 758,065 | |
Additional paid in capital | |
| 90,153,456 | | |
| 22,923,087 | |
Accumulated deficit | |
| (91,617,057 | ) | |
| (25,917,290 | ) |
| |
| | | |
| | |
| |
| | | |
| | |
Total stockholders' equity (deficit) | |
$ | (1,252,404 | ) | |
$ | (2,236,138 | ) |
| |
| | | |
| | |
Total liabilities and stockholders' equity (deficit) | |
$ | 6,356 | | |
$ | 208 | |
The accompanying notes are an integral part
of these unaudited condensed financial statements.
ZONZIA MEDIA, INC.
(formerly HDIMAX Media, Inc. and Indigo-Energy,
Inc.)
CONDENSED STATEMENT OF OPERATIONS
| |
For the Three Months | |
| |
Ended | |
| |
March 31, | |
| |
2015 | |
| |
(unaudited) | |
Revenue | |
| | |
| |
| | |
Net revenue | |
$ | – | |
| |
| | |
Expenses | |
| | |
General and administrative | |
| 322,441 | |
Sales and marketing | |
| (297,928 | ) |
Officer and director compensation | |
| 65,675,677 | |
Professional fees | |
| 819,599 | |
| |
| | |
Total operating expenses | |
| 66,519,789 | |
| |
| | |
Loss from operations | |
| (66,519,789 | ) |
| |
| | |
| |
| | |
Net loss | |
$ | (66,519,789 | ) |
| |
| | |
Net loss per share - basic and diluted | |
$ | (0.20 | ) |
| |
| | |
Weighted average shares outstanding | |
| 326,733,511 | |
The accompanying notes are an integral part
of these unaudited condensed financial statements.
ZONZIA MEDIA, INC.
(formerly HDIMAX Media, Inc. and Indigo-Energy,
Inc.)
CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY
(DEFICIT)
(Unaudited)
|
|
Common Stock |
|
|
Paid in |
|
|
Accumulated |
|
|
Total Equity |
|
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
(deficit) |
|
Balance, Inception May 24, 2014 |
|
|
– |
|
|
$ |
– |
|
|
$ |
488 |
|
|
$ |
– |
|
|
$ |
488 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of founder's shares in May 2014 |
|
|
48,500,000 |
|
|
|
48 |
|
|
|
(48 |
) |
|
|
– |
|
|
|
– |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cancellation of founder's shares related to reverse capitalization in November 2014 |
|
|
(48,500,000 |
) |
|
|
(48 |
) |
|
|
47 |
|
|
|
– |
|
|
|
(1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reverse capitalization in November 2014 |
|
|
757,689,386 |
|
|
|
757,689 |
|
|
|
(488 |
) |
|
|
(820,022 |
) |
|
|
(62,821 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued for debt settlement in December 2014 |
|
|
375,733 |
|
|
|
376 |
|
|
|
123,088 |
|
|
|
– |
|
|
|
123,464 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock based compensation |
|
|
– |
|
|
|
– |
|
|
|
22,800,000 |
|
|
|
– |
|
|
|
22,800,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
(25,097,268 |
) |
|
|
(25,097,268 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance December 31, 2014 |
|
|
758,065,119 |
|
|
$ |
758,065 |
|
|
$ |
22,923,087 |
|
|
$ |
(25,917,290 |
) |
|
$ |
(2,236,138 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Settlement agreement with former officers and directors in January 2015 |
|
|
(709,121,205 |
) |
|
$ |
(709,121 |
) |
|
$ |
162,000 |
|
|
$ |
820,022 |
|
|
$ |
272,901 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock based compensation in January 2015 |
|
|
145,000,000 |
|
|
|
145,000 |
|
|
|
63,846,061 |
|
|
|
– |
|
|
|
63,991,061 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued for previously accrued consulting fees in January 2015 |
|
|
75,000 |
|
|
|
75 |
|
|
|
24,925 |
|
|
|
– |
|
|
|
25,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued for cash in January 2015 |
|
|
307,971 |
|
|
|
308 |
|
|
|
34,692 |
|
|
|
– |
|
|
|
35,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued for employment agreement termination in January 2015 |
|
|
5,000,000 |
|
|
|
5,000 |
|
|
|
1,895,000 |
|
|
|
– |
|
|
|
1,900,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Related party debt forgiveness |
|
|
– |
|
|
|
– |
|
|
|
100,000 |
|
|
|
– |
|
|
|
100,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued for cash in February 2015 |
|
|
177,777 |
|
|
|
177 |
|
|
|
32,623 |
|
|
|
– |
|
|
|
32,800 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock based compensation in February 2015 |
|
|
4,092,500 |
|
|
|
4,093 |
|
|
|
774,455 |
|
|
|
– |
|
|
|
778,548 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued for settlement of related party accounts payable in February 2015 |
|
|
7,500,000 |
|
|
|
7,500 |
|
|
|
332,663 |
|
|
|
– |
|
|
|
340,163 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued for cash in February 2015 |
|
|
100,000 |
|
|
|
100 |
|
|
|
27,950 |
|
|
|
– |
|
|
|
28,050 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
(66,519,789 |
) |
|
|
(66,519,789 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance March 31, 2015 |
|
|
211,197,162 |
|
|
$ |
211,197 |
|
|
$ |
90,153,456 |
|
|
$ |
(91,617,057 |
) |
|
$ |
(1,252,404 |
) |
The accompanying notes are an integral part
of these unaudited condensed financial statements.
ZONZIA MEDIA, INC.
(formerly HDIMAX Media, Inc. and Indigo-Energy,
Inc.)
CONDENSED STATEMENT OF CASH FLOWS
| |
For the Three Months | |
| |
Ended | |
| |
March 31, | |
| |
2015 | |
| |
(unaudited) | |
Cash Flows from Operating Activities | |
| | |
| |
| | |
Net loss | |
$ | (66,519,789 | ) |
| |
| | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |
| | |
Stock-based compensation | |
| 66,834,609 | |
Gain on non-cash settlement of accrued expenses | |
| (809,714 | ) |
Change in prepaid professional fees | |
| (2,420 | ) |
Change in accounts payable | |
| 163,757 | |
Change in accrued expenses | |
| – | |
Change in related party accounts payable | |
| – | |
Change in accrued payroll | |
| 241,435 | |
| |
| | |
Net cash used in operating activities | |
| (92,122 | ) |
| |
| | |
Cash Flows from Financing Activities | |
| | |
Proceeds from issuance of common stock | |
| 95,850 | |
| |
| | |
Net cash provided by financing activities | |
| 95,850 | |
| |
| | |
Net increase in cash | |
| 3,728 | |
| |
| | |
Cash at beginning of the period | |
| 208 | |
| |
| | |
Cash at end of the period | |
$ | 3,936 | |
| |
| | |
Supplementary Disclosures of Cash Flow Information | |
| | |
| |
| | |
Cash paid for income taxes | |
$ | – | |
Cash paid for interest | |
$ | – | |
| |
| | |
The accompanying notes are an integral part
of these unaudited condensed financial statements.
ZONZIA MEDIA, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2015
(UNAUDITED)
1. Interim Financial Statements
The accompanying interim unaudited condensed
financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three month period ended March 31, 2015, are not necessarily indicative of the results
that may be expected for the year ending December 31, 2015. For further information, refer to the financial statements and footnotes
thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014. Further, the accompanying condensed
statement of operations and cash flows do not contain the comparative period ended March 31, 2014 due to our inception date being
May 24, 2014.
The accompanying condensed financial statements
have been prepared in conformity with accounting principles generally accepted in the United States of America which contemplate
continuation of the Company as a going concern.
Description of Business
Zonzia Media, Inc, initially organized as HDIMAX
Media, Inc., and incorporated in the State of Delaware in May 2014, is a digital publishing and broadcast Company focused on content
development and multi-platform content distribution, advertising, and ecommerce.
Reverse Merger with Indigo-Energy, Inc.
On November 21, 2014, through a wholly-owned
subsidiary of a public shell Company then known as Indigo-Energy, Inc., HDIMAX Acquisition Corporation, a Nevada corporation, was
merged with and into HDIMAX, Inc., a Delaware corporation (“HDIMAX”) (such merger, the “Merger”) pursuant
to the Agreement and Plan of Merger, effective as of September 2, 2014, and as amended effective as of November 20, 2014, by and
among Indigo-Energy, Inc. (our “company” or “we” or “us”), HDIMAX and HDIMAX Acquisition Corporation
(the “Merger Agreement”). HDIMAX was the surviving corporation of the Merger and as such will continue as a wholly-owned
subsidiary of our Company. Upon closing the merger, we changed our name to HDIMAX Media, Inc.
As a result of the Merger, all of HDIMAX’s
common stock was converted into 712,121,205 shares of our Company’s common stock, which represents approximately 94% of the
outstanding shares of our company’s common stock after giving effect to the Merger. The common stock issuance, representing
94% of the outstanding shares of the consolidated Company was accounted for as a reverse capitalization in accordance with accounting
principles generally accepted in the United States (“US GAAP”) and the Rules and Regulations as promulgated by the
United States Securities and Exchanges Commission (“SEC”).
On January 22, 2015, we entered into a Settlement
Agreement in which we cancelled all of the 712,121,205 shares of restricted and unregistered common stock previously issued to
effectuate the merger with Rajinder Brar, the previous sole owner of HDIMAX, Inc. In consideration for the shares being cancelled,
we forfeited our rights to sell advertising and other products on websites previously controlled Mr. Brar and related entities,
with the exception of www.hdimax.com. An outline of the significant terms of the Settlement Agreement
includes, but is not limited to, the following:
|
· |
The 712,121,205 million shares of HDIMAX Media, Inc. (formerly Indigo-Energy) common stock issued to Rajinder Brar, the owner of 100% of the previously outstanding stock of HDIMAX, Inc. immediately preceding the reverse acquisition transaction, were cancelled. |
|
· |
Rajinder Brar, Aneliya Vasileva, and Myles Pressey III, previously appointed as the Company’s officers and Board of Directors immediately following the completion of the reverse acquisition, resigned and forfeited future compensation terms associated with any and all previously agreed upon employment agreements, inclusive of the compensation accrued as of December 31, 2014. |
|
· |
Mr. James C. Walter Sr. was reappointed to serve as a Director charged with appointing new officers. Mr. Walter Sr. served as the Sole Officer and Director of the Company immediately preceding the completion of the reverse acquisition transaction. |
|
· |
The Company’s option agreement to acquire Fashion Style Magazine, Inc., an entity wholly owned by Rajinder Brar, was cancelled. |
|
· |
The Omnibus Agreement and License dated November 21, 2014, by and between the Company and Fashion Style Magazine, Inc. was terminated. The brands and assets wholly owned by Rajinder Brar through Fashion Style Magazine, Inc. were intended to be a core portion of the consolidated Company’s business operations subsequent to the completion of the reverse acquisition. |
|
· |
The Company forfeited all rights
to Frontlinewire.com, a brand and website acquired in the reverse acquisition. |
|
· |
The Company maintained all rights to hdimax.com, a brand and website acquired in the reverse acquisition, but agreed to assign those assets back to their original owners by May 1, 2015. We do not intend to further develop or publish content at www.hdimax.com. |
For additional details, including a copy of
the Settlement Agreement, please see our Current Report on Form 8-K filed on January 29, 2015.
On March 9, 2015 we changed our name to Zonzia
Media, Inc. and we are developing a new multi-platform entertainment distribution channel with the goal of being a unique hybrid
of a linear channel, a video-on-demand channel and an over-the-top channel. Our technology will allow our viewers instant access
to our available content.
Use of Estimates
In preparing financial statements in conformity
with generally accepted accounting principles, we are required to make estimates and assumptions that affect the reported amounts
of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues
and expenditures during the reported periods. Actual results could differ materially from those estimates.
Cash and Cash Equivalents
We consider all highly liquid instruments with
an original maturity of 90 days or less at the time of purchase to be cash equivalents. We did not have any cash equivalents at
March 31, 2015 or December 31, 2014.
Recently Issued Accounting Pronouncements
There have been no recently issued accounting
pronouncements that were not previously disclosed in our annual report on Form 10-K filed on April 15, 2015 through the date of
this report that we believe will have a material impact on our financial position, results of operations, or cash flows.
2. Going Concern
Since our inception on May 24, 2014, we have
generated immaterial revenues resulting in the incurrence of net losses through March 31, 2015. This has further led to negative
working capital, all which results in substantial doubt about the Company’s ability to continue as a going concern. The financial
statements do not include any adjustments that might result from the outcome of this uncertainty.
Our management, Board, and Advisory Board has
focused its efforts and our limited resources on raising additional capital through debt or equity offerings at terms not detrimental
to our planned future operations. As of the date of this report we do not have any firm funding commitments.
3. Related Party Transactions
During the three months ended March 31, 2015
we settled prior obligations due to a related party totaling $340,163 via the issuance of 7,500,000 shares of restricted and unregistered
shares of common stock. The settled obligation also represents that balance outstanding as of December 31, 2014.
During the three months ended March 31, 2015
our Chief Compliance Officer agreed to forgive an accrued bonus at December 31, 2014 totaling $100,000. Since we consider our Chief
Compliance Officer a related party we have determined the bonus forgiveness was in the nature of a capital contribution and no
gain was recognized for the forgiveness of the obligation in the accompanying condensed statement of operations.
We issued a Director 250,000 shares of restricted
and unregistered shares of common stock for cash proceeds totaling $25,000 in January 2015.
As part of the Settlement Agreement we entered
into on January 22, 2015 we cancelled restricted stock award grants to two of our former officers. Since we did not replace a cancelled
award totaling 52,500,000 shares of restricted and unregistered shares of common stock, and effectively repurchased the award for
no consideration as assumed by the application of accounting principles generally accepted in the United States, the unrecognized
grant-date fair value of the award totaling $9,975,000 was recognized during the three months ended March 31, 2015. Additionally,
we cancelled a restricted stock award granted to our current Interim Chief Executive Officer totaling 67,500,000 shares and replaced
the award with the grant of 125,000,000 shares of restricted and unregistered shares as part of a new employment agreement on January
29, 2015. The total compensation cost recognized during the three months ended March 31, 2015 associated with the cancellation
and replacement of this restricted stock award was $47,500,000.
4. Stockholders’ Equity
The following provides information for the
shares of restricted and unregistered shares of common stock that we issued (or cancelled) from January 1, 2015 through the date
of this report:
In January 2015 we issued 75,000 shares of
restricted and unregistered common stock for consulting services valued at $25,000.
In January 2015 we issued 57,971 shares restricted
and unregistered shares of common stock for cash totaling $10,000.
We issued a Director 250,000 shares of restricted
and unregistered shares of common stock for cash proceeds totaling $25,000 in January 2015.
In January 2015 we issued a total of 145,000,000
shares of restricted and unregistered shares of common stock as compensation to our officers, directors, and other consultants
valued at $54,016,061.
In January 2015 we issued 5,000,000 shares
of restricted and unregistered shares of common stock to a former employee of HDIMAX, Inc. valued at $1,900,000.
In January 2015, in accordance with the terms
of our Settlement Agreement with our former Chairman and Chief Executive Officer, we cancelled 712,121,205 shares of unregistered
and restricted common stock. We recognized settlement expense, included in the general and administrative expenses in the accompanying
condensed statement of operations, totaling $107,901 and reversed the previously recognized accumulated deficit adjustment of $820,022
associated with the Settlement.
In February 2015 we issued 142,500 shares of
restricted and unregistered common stock for accounting and legal services valued at $21,179.
In February 2015 we issued a total of 200,000
shares of restricted and unregistered shares of common stock as compensation directors valued at $38,348.
In February 2015 we issued 3,750,000 shares
of restricted and unregistered common stock for consulting services valued at $719,021.
In February 2015 we issued 177,777 restricted
and unregistered shares of common stock for cash totaling $32,800.
In February 2015 we issued 7,500,000 shares
of restricted and unregistered common stock in settlement of previously accrued related party liabilities totaling $340,163.
In March 2015 we issued 100,000 restricted
and unregistered shares of common stock for cash totaling $28,050.
In April 2015 we issued 440,000 shares of restricted
and unregistered common stock in conjunction with the issuance of notes payable for total consideration of $70,000.
5. Accrued Expenses
During the quarter ended March 31, 2015 our
management, with the assistance of our defense attorney, analyzed the merit and likelihood of an unfavorable outcome in the matter
of Congoo, LLC v. HDIMAX Max Media, Inc. Civ. Action No. 3:15-cv-01423. Based on the facts and circumstances, we determined
the likelihood of an unfavorable outcome to be remote. Correspondingly, we reversed the previously accrued obligation of $422,448
as presented in sales and marketing expense in the accompanying condensed statement of operations.
6. Subsequent Events
On April 21, 2015, our Chairman of the Board
of Directors, Myles A. Pressey III, resigned as Interim Chief Executive Officer. On the same date, we appointed Naresh Malik to
serve as our Chief Executive Officer. Mr. Malik possesses extensive experience in the film and entertainment services industry.
Upon the appointment of Mr. Malik, we entered into an employment agreement providing for a base salary of $250,000 and a one-time
grant of 5,000,000 fully vested shares of restricted and unregistered common stock. Mr. Malik is also entitled to receive other
performance based bonuses and customary benefits.
In May 2015 we issued 1,500,000 shares of restricted
and unregistered common stock for cash totaling $150,000 to an investor. The investor also received a total of 1,500,000 warrants,
each convertible into one share of restricted and unregistered common stock at an exercise price of $0.275 per share for a period
of three years.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution
The actual and estimated expenses in connection
with this offering, all of which will be borne by us, are as follows:
SEC Registration Fee |
|
$ |
3,353.15 |
|
Accounting Fees |
|
|
25,000 |
* |
Legal Fees and Expenses |
|
|
15,000 |
* |
Transfer Agent Fee |
|
|
2,000 |
* |
Miscellaneous |
|
|
3,000 |
* |
|
|
|
|
|
Total |
|
$ |
48,353.15 |
* |
*estimated
Item 14. Indemnification of Directors and Officers
Section 78.7502 of the Nevada Revised Statutes
provides that a corporation may indemnify directors and officers as well as other employees and individuals against expenses including
attorneys' fees, judgments, fines and amounts paid in settlement in connection with various actions, suits or proceedings, whether
civil, criminal, administrative or investigative other than an action by or in the right of the corporation, a derivative action,
if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation,
and, with respect to any criminal action or proceeding, if they had no reasonable cause to believe their conduct was unlawful.
A similar standard is applicable in the case of derivative actions, except that indemnification only extends to expenses including
attorneys' fees incurred in connection with the defense or settlement of such actions, and the statute requires court approval
before there can be any indemnification where the person seeking indemnification has been found liable to the corporation. The
statute provides that it is not exclusive of other indemnification that may be granted by a corporation's Amended and Restated
Articles of Incorporation, Bylaws, agreement, a vote of stockholders or disinterested directors or otherwise.
The Company’s Amended and Restated
Articles of Incorporation provides that it will indemnify and hold harmless, to the fullest extent permitted by Chapter 78 of the
Nevada Revised Statutes, as amended from time to time, each person that such section grants us the power to indemnify.
The Nevada Revised Statutes permit a corporation
to provide in its Amended and Restated Articles of Incorporation that a director of the corporation shall not be personally liable
to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability for:
|
· |
any breach of the director's duty of loyalty to the corporation or its stockholders; |
|
· |
acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; |
|
· |
payments of unlawful dividends or unlawful stock repurchases or redemptions; or |
|
· |
any transaction from which the director derived an improper personal benefit. |
The Company’s Amended and Restated
Articles of Incorporation provides that, to the fullest extent permitted by applicable law, none of our directors will be personally
liable to us or our stockholders for monetary damages for breach of fiduciary duty as a director. Any repeal or modification of
this provision will be prospective only and will not adversely affect any limitation, right or protection of a director of our
Company existing at the time of such repeal or modification.
Item 15. Recent Sale of Unregistered
Securities
On November 21, 2014, we issued 712,121,205
shares of common stock in exchange for the all of the issued and outstanding stock of HDIMAX, Inc. There was no underwriter, no
underwriting discounts or commissions, no general solicitation, no advertisement, and resale restrictions are being imposed by
placing a Rule 144 legend on the certificate(s). The one person who received securities, Rajinder Brar, had such knowledge in business
and financial matters that he is capable of evaluating the merits and risks of the transaction. This transaction was exempt from
registration under the Securities Act of 1933, based on Section 4(a)(2) for transactions by the issuer not involving any public
offering. All of these shares were subsequently canceled pursuant to the terms of a Settlement Agreement dated January 22, 2015.
In November 2014 the Company issued 113,636
shares of restricted and unregistered common stock for consulting services valued at $45,454.
In November 2014 the Company issued 712,121,205
shares of restricted and unregistered common stock to effectuate the merger with HDIMAX, Inc. Subsequently, in January 2015, the
712,121,205 shares to complete the merger with HDIMAX, Inc. were cancelled as part of a Settlement Agreement resulting in the disposition
of a majority of the previously acquired assets of HDIMAX, Inc.
In December 2014, the Company issued 375,733
shares of restricted and unregistered common stock for the settlement of discounted convertible notes and accrued interest totaling
$123,463.
In January 2015 we issued 75,000 shares
of restricted and unregistered common stock for consulting services valued at $25,000.
In January 2015 we issued 57,971 shares
restricted and unregistered shares of common stock for cash totaling $10,000.
In January 2015 we issued a total of 145,200,000
shares of restricted and unregistered shares of common stock as compensation to our officers, directors, and other consultants
valued at $54,054,409.
In January 2015 we issued 5,000,000 shares
of restricted and unregistered shares of common stock to a former employee of HDIMAX, Inc. valued at $1,900,000.
In January 2015, in accordance with the
terms of our Settlement Agreement with our former Chairman and Chief Executive Officer, we cancelled 712,121,205 shares of unregisters
and restricted common stock.
In February 2015 we issued 142,500 shares
of restricted and unregistered common stock for accounting and legal services valued at $20,000.
In February 2015 we issued a total of 200,000
shares of restricted and unregistered shares of common stock as compensation directors valued at $38,348.
In February 2015 we issued 3,750,000 shares
of restricted and unregistered common stock for consulting services valued at $719,021.
In February 2015 we issued 177,777 restricted
and unregistered shares of common stock for cash totaling $32,800.
In February 2015 we issued 7,500,000 shares
of restricted and unregistered common stock in settlement of previously accrued related party liabilities totaling $340,163.
In March 2015 we issued 100,000 restricted
and unregistered shares of common stock for cash totaling $28,050.
In April 2015 we issued 440,000 shares
of restricted and unregistered common stock in conjunction with the issuance of notes payable for total consideration of $70,000.
In May 2015 we issued a total of 1,725,445
shares of restricted and unregistered common stock to third party investors for total cash consideration of $193,050.
In May 2015 we issued 8,000,000 shares
of restricted and unregistered common stock as compensation to our officers for services rendered, valued at $2,480,000
and 5,059,524 shares of restricted and unregistered common stock to consultants and advisors for services rendered valued at
$1,568,452.
In May 2015 we issued an aggregate of 200,000
in settlement of various obligations including promissory notes and extensions of promissory notes valued at $62,000.
In May 2015 we issued a total of 200,000
shares of restricted and unregistered common stock as compensation for Board and Advisory Board members valued at $62,000.
Item 16. Index To Financial Statements
Exhibit Index
Exhibit Number |
|
Description |
|
|
|
Exhibit 3.1 |
|
Amended and Restated Articles of Incorporation of Indigo-Energy, Inc. (3) |
|
|
|
Exhibit 3.2 |
|
Amended and Restated Bylaws of Indigo-Energy, Inc. (4). |
|
|
|
Exhibit 5.1 |
|
Opinion of Wilson & Oskam, LLP |
|
|
|
Exhibit 10.1 |
|
Settlement Agreement dated January 22, 2015 (5) |
|
|
|
Exhibit 10.2 |
|
Form of Subscription Agreement |
|
|
|
Exhibit 10.3 |
|
Employment Agreement with Myles A. Pressey III (6) |
|
|
|
Exhibit 10.4 |
|
Employment Agreement with Johnathan Adair (6) |
|
|
|
Exhibit 10.5 |
|
Employment Agreement with Lynwood Bibbens (6) |
|
|
|
Exhibit 10.6 |
|
Employment Agreement with Stanley L. Teeple |
|
|
|
Exhibit 10.7 |
|
Employment Agreement with Naresh Malik |
|
|
|
Exhibit 10.8 |
|
Employment Agreement with Frank McEnulty |
|
|
|
Exhibit 10.9 |
|
Distribution Channel Agreement with simplyME dated February
9, 2015(7) |
|
|
|
Exhibit 10.10 |
|
Addendum to Distribution Channel Agreement with simplyME
dated June 30, 2015(8) |
|
|
|
Exhibit 10.11 |
|
IT Services Agreement Between UM Technologies Exchange and
the Company |
|
|
|
Exhibit 10.12 |
|
Letter of Intent Between the Company and Georgeville Televison
LLC dated March 25, 2015 |
|
|
|
Exhibit 10.13 |
|
Submission/Insertion Order Agreement with Sonifi Solutions,
Inc. dated July 9, 2015(9) |
|
|
|
Exhibit 10.14 |
|
Amendment to Employment Agreement with Myles A. Pressey |
|
|
|
Exhibit 10.15 |
|
Consulting Agreement with Benchmark Advisory Partners LLC
dated May 5, 2015 |
|
|
|
Exhibit 23.1 |
|
Consent of Haynie & Company |
|
|
|
Exhibit 23.2 |
|
Consent of Wilson & Oskam, LLP (included in Exhibit 5.1 herein) |
|
|
|
Exhibit 24 |
|
Power of Attorney (previously filed) |
101.INS |
|
XBRL Instances Document |
101.SCH |
|
XBRL Taxonomy Extension Schema Document |
101.CAL |
|
XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF |
|
XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB |
|
XBRL Taxonomy Extension Label Linkbase Document |
101.PRE |
|
XBRL Taxonomy Extension Presentation Linkbase Document |
* Schedules and exhibits have been omitted pursuant to Item
601(b)(2) of Regulation S-K.
_______
(1) |
Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed September 4, 2014 |
(2) |
Incorporated by reference to the applicable exhibit of the registrant’s Current Report on Form 8-K filed on November 26, 2014. |
(3) |
Incorporated by reference to the registrant’s definitive Information Statement on Schedule 14C filed on October 20, 2014. |
(4) |
Incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed October 6, 2014. |
(5) |
Incorporated by reference to Exhibit 99.1 to our Current Report on Form 8-K filed on January 28, 2015. |
(6) |
Incorporated by reference to the applicable exhibit to our Current Report on Form 8-K filed on February 4, 2015. |
(7) |
Incorporated by reference to Exhibit 10.1 to our Current
Report on Form 8-K filed on July 1, 2015. |
(8) |
Incorporated by reference to the applicable exhibit to our
Current Report on Form 8-K filed on July 7, 2015. |
(9) |
Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on July
10, 2015. |
|
(B) |
Financial Statement Schedules |
The following financial statements of the registrant, along
with the notes thereto and the Report of Independent Registered Public Accounting Firm, are filed herewith.
Financial Statements
INDEX TO FINANCIAL
STATEMENTS
Financial Statements of Zonzia Media, Inc. |
|
Report of Independent Registered Public Accounting Firm, Haynie & Company, Certified Public Accountants |
|
|
F-2 |
|
Balance Sheets as at March 31, 2015 and December 31, 2014 |
|
|
F-3 |
|
Statement of Operations for the period from May 24, 2014 (inception) through December 31, 2014 |
|
|
F-4 |
|
Statement of Stockholders’ Deficit for the period from May 24, 2014 (inception) through December 31, 2014 |
|
|
F-5 |
|
Statement of Cash Flows for the period from May 24, 2014 (inception) through December 31, 2014 |
|
|
F-6 |
|
Notes to financial statements |
|
|
F-7 |
|
Unaudited Interim Financial Statements of Zonzia Media, Inc. for the three months ended March 31, 2015 |
|
|
|
|
Condensed Balance Sheet |
|
|
F-16 |
|
Condensed Statement of Operations |
|
|
F-17 |
|
Condensed Statement of Stockholders’ Deficit |
|
|
F-18 |
|
Condensed Statement of Cash Flows |
|
|
F-19 |
|
Notes to condensed financial statements |
|
|
F-20 |
|
All schedules have been omitted because
the information required to be presented in them is not applicable or is shown in the financial statements or related notes.
Item 17. Undertakings
Insofar as indemnification for liabilities
arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to
the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Commission such indemnification
is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which
offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required
by Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts
or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement;
and
(iii) To include any material information
with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such
information in the registration statement.
(2) That, for the purpose of determining
any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means
of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
SIGNATURES
Pursuant to the requirements
of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the city of Henderson, State of Nevada, on July 10, 2015.
|
Zonzia Media, Inc. |
|
|
|
|
By: |
/s/ Naresh Malik |
|
|
|
Naresh Malik |
|
|
|
Chief Executive Officer
(Principal Executive Officer) |
|
Pursuant to the requirements
of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the
dates indicated
SIGNATURE |
|
TITLE |
|
DATE |
|
|
|
/s/ Myles A. Pressey III* |
|
Chairman of the Board of Directors |
|
July 10, 2015 |
|
|
|
|
|
/s/ Naresh Malik* |
|
Chief Executive Officer |
|
|
|
|
(Principal Executive Officer) |
|
July 10, 2015 |
|
|
|
|
|
/s/ Frank McEnulty |
|
Chief Financial Officer |
|
|
|
|
(Principal Accounting and Financial Officer) |
|
July 10, 2015 |
|
|
|
/s/ Philip Fraley |
|
Director |
|
July 10, 2015 |
|
|
|
|
|
/s/ Steven Sanders* |
|
Director |
|
July 10, 2015 |
|
|
|
|
|
|
|
|
*By /s/ Frank McEnulty
Frank McEnulty
Attorney-in-Fact
Exhibit Index
Exhibit Number |
|
Description |
|
|
|
Exhibit 3.1 |
|
Amended and Restated Articles of Incorporation of Indigo-Energy, Inc. (3) |
|
|
|
Exhibit 3.2 |
|
Amended and Restated Bylaws of Indigo-Energy, Inc. (4). |
|
|
|
Exhibit 5.1 |
|
Opinion of Wilson & Oskam, LLP |
|
|
|
Exhibit 10.1 |
|
Settlement Agreement dated January 22, 2015 (5) |
|
|
|
Exhibit 10.2 |
|
Form of Subscription Agreement |
|
|
|
Exhibit 10.3 |
|
Employment Agreement with Myles A. Pressey III (6) |
|
|
|
Exhibit 10.4 |
|
Employment Agreement with Johnathan Adair (6) |
|
|
|
Exhibit 10.5 |
|
Employment Agreement with Lynwood Bibbens (6) |
|
|
|
Exhibit 10.6 |
|
Employment Agreement with Stanley L. Teeple |
|
|
|
Exhibit 10.7 |
|
Employment Agreement with Naresh Malik |
|
|
|
Exhibit 10.8 |
|
Employment Agreement with Frank McEnulty |
|
|
|
Exhibit 10.9 |
|
Distribution Channel Agreement with simplyME dated February 9, 2015(7) |
|
|
|
Exhibit 10.10 |
|
Addendum to Distribution Channel Agreement with simplyME dated June 30, 2015(8) |
|
|
|
Exhibit 10.11 |
|
IT Services Agreement Between UM Technologies Exchange and the Company |
|
|
|
Exhibit 10.12 |
|
Letter of Intent Between the Company and Georgeville Televison LLC dated March 25, 2015 |
|
|
|
Exhibit 10.13 |
|
Submission/Insertion Order Agreement with Sonifi Solutions, Inc. dated July 9, 2015(9) |
|
|
|
Exhibit 10.14 |
|
Amendment to Employment Agreement with Myles A. Pressey |
|
|
|
Exhibit 10.15 |
|
Consulting Agreement with Benchmark Advisory Partners LLC dated May 5, 2015 |
|
|
|
Exhibit 23.1 |
|
Consent of Haynie & Company |
|
|
|
Exhibit 23.2 |
|
Consent of Wilson & Oskam, LLP (included in Exhibit 5.1 herein) |
|
|
|
Exhibit 24 |
|
Power of Attorney (previously filed) |
101.INS |
|
XBRL Instances Document |
101.SCH |
|
XBRL Taxonomy Extension Schema Document |
101.CAL |
|
XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF |
|
XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB |
|
XBRL Taxonomy Extension Label Linkbase Document |
101.PRE |
|
XBRL Taxonomy Extension Presentation Linkbase Document |
_______________
(1) |
Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed September 4, 2014 |
(2) |
Incorporated by reference to the applicable exhibit of the registrant’s Current Report on Form 8-K filed on November 26, 2014. |
(3) |
Incorporated by reference to the registrant’s definitive Information Statement on Schedule 14C filed on October 20, 2014. |
(4) |
Incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed October 6, 2014. |
(5) |
Incorporated by reference to Exhibit 99.1 to our Current Report on Form 8-K filed on January 28, 2015. |
(6) |
Incorporated by reference to the applicable exhibit to our Current Report on Form 8-K filed on February 4, 2015. |
(7) |
Incorporated by reference to Exhibit 10.1 to our Current
Report on Form 8-K filed on July 1, 2015. |
(8) |
Incorporated by reference to the applicable exhibit to our
Current Report on Form 8-K filed on July 7, 2015. |
(9) |
Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on July
10, 2015. |
Exhibit 10.11
IT Services Agreement
Between
UM Technologies Exchange and HDIMAX
This Agreement is made this 8th
day of September, 2014, by and between UM Technologies Exchange, 330 Montage Mountain Road, Moosic, Pennsylvania 18507,
(hereinafter "UMTech'', "we", or ''us") and HDIMAX, a Delaware C Corporation headquartered at 260 Madison,
Manhattan Midtown, NY, 10016.
WHEREAS, UMTech is a Pennsylvania
limited liability company which is engaged and has been engaged in business providing professional Information Technology services
since 2014;
WHEREAS, HDIMAX is a Delaware C
Corporation which is engaged and has been engaged in business since August, 2014;
WHEREAS, HDIMAX desires and UMTech
wishes to provide Information Technology services for the development and maintenance of software systems;
NOW, THEREFORE, in consideration
of the premises and of the mutual covenants of the Parties hereto, and other valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, it is hereby agreed as follows:
1. Services — UMTech will
provide to HDIMAX a total of 6,000 (six thousand) hours of Information Technology services over the course of one (1) calendar
year (hereinafter "Service Term") commencing on the date of execution of this Agreement. Services are valued at $130
(one hundred thirty US Dollars) per hour; total value of Services included in this Agreement is $780,000.00 (seven hundred eighty
thousand US Dollars, hereinafter "Total Cost").
The Parties acknowledge that the needs
of HDIMAX are rapidly changing and difficult to predict. Therefore, UMTech will work on whatever is identified by representatives
of HDIMAX as having highest priority at any given time. HDIMAX further acknowledges that UMTech may not be able to deliver everything
that HDIMAX desires within the Service Term, using the allocated hours. Any requirement that would cause the Total Cost to be exceeded
will be subject of an amendment or a separate agreement. UMTech will notify HDIMAX in writing of such requirement with details
of the amendment or separate agreement as soon as UMTech believes the Total Cost will be exceeded. UMTech will continue such work
only after approval from HDIMAX.
2. Payment — HDIMAX will
pay UMTech the full value of its services according to the following schedule:
(a) Months 1 and 2: no payment required
(b) Months 3 through 6: minimum payment of $25,000 per month
(c) Months 7 through 12: minimum payment of $65,000 per
month
(d) Term End: full remaining balance of Total Cost
3. Late Fees — Any balance
that remains unpaid after 30 days past the end of the Service Term will be assessed a service charge of 1.5% per month, calculated
from the last day of the Service Term.
4. Confidentiality — We
will maintain the confidentiality of your confidential information in accordance with professional standards. Neither Party will
disclose any confidential material obtained from the other without prior written consent, except to the extent such disclosure
is an agreed objective of this engagement. Both Parties agree to the use of fax, email, telephone, and voicemail to communicate
both sensitive and nonsensitive matters; provided, however, that protected or sensitive information regarding customers or consumers
shall not be communicated by unencrypted email. We may use a third-party service provider in providing professional services which
may require sharing confidential information with the provider.
5. Consumer Privacy — In
order to provide the Services called for in this engagement, you may be disclosing to us certain nonpublic personal information
regarding your accounts, customers, and consumers. To the extent permitted by law, we will not disclose any such nonpublic personal
information except to you and our employees and agents. However, in circumstances that fall under an exception in the regulations
"Privacy of Consumer Financial Information" implementing the Gramm-Leach-Bliley Act, we may disclose or use such nonpublic
personal information in the ordinary course of business to carry out the Services in this engagement. We have implemented and will
maintain physical, electronic and procedural safeguards ("Safeguards") reasonably designed to protect the security, confidentiality
and integrity of, to prevent unauthorized access to or use of, and to ensure the proper disposal, of nonpublic personal information
regarding your customers or consumers. We further agree that the Safeguards shall meet the objectives of the Interagency Guidelines
Establishing Information Security Standards, adopted by the Office of the Comptroller of the Currency, the Board of Governors of
the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of Thrift Supervision, as they currently
exist, or as they may be amended from time to time.
6. Ownership — You shall
have royalty-free, non-transferable rights to use the software we develop for you throughout the course of this engagement. Your
use of the software shall be limited to its stated purpose and intended business use only. UMTech retains the right to use the
ideas, concepts, techniques, industry data, knowhow, design, analysis, and source code we use or develop in the course of the engagement
and all enhancements or modifications.
7. Buq Remedy — For a period
of one (1) calendar month following the end of the Service Term, UMTech warrants that all delivered system components authored
by UMTech shall perform in a manner which does not exhibit implementation or design deficiency ("bugs") with respect to its projected use. You must report all deficiencies
in writing within the warranty period in order to receive warranty remedies. UMTech shall correct any deficiencies, in a timely
fashion using all due diligence and without charge, provided that written statement of such deficiency is received within the warranty
period.
8. Applicable Law — This
Agreement and any disputes arising hereunder will be governed and construed in accordance with the laws of the Commonwealth of
Pennsylvania, without regard to conflict of law rules.
9. Jointly Prepared — This
Agreement shall be deemed to have been jointly prepared. If any ambiguity or dispute arises as to the construction of this Agreement,
it shall not be interpreted against any of the Parties but shall be resolved neutrally without regard to authorship.
10. Severability — If any
provision of this Agreement is declared invalid by a court of competent jurisdiction or by the express act of any legislative body
with authority to affect this agreement, only the provision found or declared to be invalid shall be deemed and valid and the remainder
shall remain in full force and effect.
11. Assignment — The rights
of HDIMAX under this Agreement cannot be assigned or otherwise transferred without the prior, express written consent of UMTech.
Any assignment or attempt to assign will result in termination of this Agreement.
12. Entire Agreement —
This constitutes the entire Agreement between the Parties and fully supersedes and replaces any and all prior or contemporaneous
written or oral agreements, promises, representations or promises. No modification, amendment or waiver of any of the provisions
of this Agreement shall be effective unless in writing and signed by the Parties.
13. Limitation of Liability —
Our Services and software are provided as-is, and are to be used at your own risk. UMTech provides no warranty of any kind, express
or implied, including warranties of merchantability or fitness for any particular purpose.
(a) UMTech is not responsible for hardware
or software damage, loss of wages or data, or any other financial, business, or personal loss resulting from the use of, or inability
to use, any software developed or sold by us.
(b) In no event shall UMTech, its officers,
directors, agents, or employees be liable to you or any other entity for any direct, indirect, special, incidental, punitive, exemplary,
or consequential damages whatsoever, including, without limitation, procurement of substitute goods or services; damages for loss
of business profits, business interruption, loss of business information, or any other pecuniary loss, arising out of the use of
or inability to use the software or the provision of or failure to provide support services, even if UMTech, its officers, directors,
agents, or employees have been advised of the possibility of such damages.
(c) You specifically acknowledge and agree
that in no event shall our total aggregate liability exceed the total amount paid by you for the particular Services that are the
subject of the cause of action. The foregoing limitation of liability shall apply to the fullest extent permitted by law, and shall
survive any termination or expiration of this agreement.
14. Notices — All bills, notices
or communications which you may desire or be required to give to UMTech shall be deemed sufficiently given if in writing and either
hand delivered to us or sent by registered or certified mail addressed to UMTech, 330 Montage Mountain Road, Moosic, PA 18507,
with a copy to Karen Tomaine, Esq., 28 Kipling Drive, Moosic, PA, 18507.
IN WITNESS WHEREOF, the Parties
have executed this agreement on the day and date written above.
Exhibit 10.12
March 25, 2015
Georgeville Television LLC
7955 West 3rd Street
Los Angeles, CA 90048
RE: Letter of Intent for acquiring all
Domestic (U.S.) rights for the Series Z — Inspired by Zorro
This binding Letter Of Intent (L01) is entered
into by Zonzia Media Inc. ("Zonzia") and Georgeville Television LLC a Reliance Company ("GVTV") in connection
with the intended development, coproduction and distribution of the series with the current working title Z — Inspired
by Zorro ("Zorro" or the "Series"). Now therefore the parties agree as follows:
1. | | Series Elements: Zonzia commits to co-develop the Series subject to the following: |
a. | | Approval of the Director for Episode 1 (with Louis Leterrier pre approved); |
b. | | Approval of the Showrunner (Zonzia agrees not to unreasonably withhold its approval
of showrunner that is network approved); |
c. | | Approval of the Series Creators (with Whit Brayton and Zack Rice pre-approved); |
d. | | Approval of the draft script for Episode 1 (which Zonzia confirms it has received
and approved); |
e. | | Approval of the series bible (which Zonzia confirms it has received and approved);
and |
f. | | Receipt of a tentative financial plan and production budget for all ten episodes of
Season 1, the gross amount of which will be at least USD 28,000,000; and |
g. | | Third party sales estimates for the Series. |
The foregoing items are
hereinafter referred to as the "Series Elements".
2. | | Initial Commitment: Upon Zonzia approving or receiving (as applicable) each
of the Series Elements, this LO1 will automatically become a binding agreement between the parties and by no later than May 17,
2015, Zonzia will provide GVTV with USD 1,200,000 (the "Initial Funding") to be used by GVTV in connection with customary
preproduction activities including preparation of scripts for Episodes 2, 3, 4 and 5 for the Series and creation of the other
Greenlight Elements identified below. If the parties "greenlight" the Series, the Initial Funding will be amortized
across the entire production budget for Season 1. If the Series is not greenlit (i.e. if the Greenlight Elements are not mutually
approved by Zonzia and GVTV; or if GVTV fails to submit the Greenlight Elements in a timely fashion), then GVTV will return the
Initial Funding to Zonzia within ten (10) business days of such disapproval. |
3. | | Greenlight: Formal "greenlight" of the Series will be contingent
upon the following: |
112 West 34th Street, Suite
1555
New York, NY 10120
www.zonzia.com
a. | | The submission and mutual approval of a detailed production budget and production
schedule/timeline for all ten Episodes of Season 1 of the Series (with the understanding that the production budget will include
the Initial Commitment) (the parties currently anticipate that the total gross production budget to produce all ten Episodes
of Season 1, inclusive of the Initial Commitment, will be USD 28,000,000); |
b. | | The submission and mutual approval of the first 5 episode scripts; and |
c. | | Mutual approval of the principal cast; |
The foregoing items are hereinafter referred to as the "Greenlight
Elements." Each of the parties agrees that its respective approval of each Greenlight Element will not be unreasonably withheld,
conditioned or delayed.
4. | | Production Funding / Escrow: If the Series is greenlit as provided above, Zonzia
will fund USD 12,000,000 of the production budget for Season 1 of the Series (the "Production Funding"), less the Initial
Commitment. GVTV will be responsible for providing the remainder of the production budget and the parties agree that in no event
will Zonzia be required to fund more than USD 12,000,000 even if the gross production budget for Season 1 exceeds USD 28,000,000.
Zonzia will deposit the Production Funding into an escrow account controlled by the completion bond company for the Series prior
to the start of principal photography of Episode — 1. The Production Funding will not be released from escrow until the
balance of the "strike price" for Season 1 has been received by the completion bond company. |
5. Series Rights / Revenue: If the Series is greenlit,
and provided HZonzia timely provides the Production Funding, the rights and revenue relating to the Series will be as follows:
a. | | Zonzia will retain all exclusive U.S. Linear, VOD, and SVOD rights to the Zorro Series
for a term of 24 months commencing on the earlier of (i) the date of initial U.S. exhibition of the last episode (Episode —
10) of the Series and (ii) six months after delivery of all Episodes to Zonzia. |
h. | | Zonzia and GVTV will equally split 50/50 all net revenue received from Home Entertainment,
Gaming and Merchandising rights. |
c. | | Zonzia will retain all exclusive U.S. Licensing and Branding rights to the Series
for the duration of the distribution term. |
d. | | Zonzia will receive a total of 20% of Zorro's total net revenue from all other territories
worldwide which remains after payment of all distribution and sales fees and expenses, guild residuals, collection costs and recoupment
of the negative production cost and a mutually agreed return on equity). |
6. | | Subsequent Seasons: The greenlighting of the second (and subsequent) season
will be contingent upon the first season meeting specific thresholds (TBD) which will be mutually agreed upon by Zonzia and GVTV.
If those thresholds are satisfied, and the parties mutually agree to greenlight the next season, Zonzia will have the exclusive
option to co-finance and license the subsequent season of the Series on materially the same terms hereof (with the understanding
that the production budget for subsequent seasons will increase which will result in a pro rata increase to the amount of the
Production Funding to be provided by Zonzia). Zonzia will retain all exclusive U.S. Linear, VOD and SVOD rights for each subsequent
season for a term of 24 months commencing from the initial U.S. exhibition of that season's last episode of the Series.
|
112 West 34th Street, Suite
1555
New York, NY 10120
www.zonzia.com
A long-form agreement will follow which will entail in detail the
entire terms and conditions of this intended production and distribution partnership agreement will be executed between Zonzia
Media Inc. and Georgeville Television LLC. Until such time as the long form agreement is entered into, this LOI shall constitute
the sole and binding agreement between the parties regarding the Series.
112 West 34th Street, Suite
1555
New York, NY 10120
www.zonzia.com
Exhibit 10.14
AMENDMENT No. 1 to EMPLOYMENT AGREEMENT
Effective Date: May 29, 2014
This Amendment No. 1 (this “Amendment”) to that certain
Employment Agreement between Zonzia Media, Inc., a Nevada corporation (formerly known as HDIMAX Media, Inc., the “Company”)
and Myles A. Pressey III (“Executive”) effective January 29, 2015 (the “Employment Agreement”), is entered
into as of the date set forth on the signature page hereto, and effective as of the date first set forth above by and between Executive
and the Company. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Employment
Agreement.
WHEREAS, on May 29, 2015, the Company and Executive, the Company’s
Chairman and Chief Business Development Officer, agreed to amend Executive’s Employment Agreement regarding future equity
compensation;
WHEREAS, the Employment Agreement originally called for the issuance
of a second equity award to Mr. Pressey in the amount of twenty-five million (25,000,000) shares upon the first anniversary of
employment, contingent only on Executive’s continued employment at such time;
WHEREAS, the Board of Directors of the Company and Executive agreed
to (i) increase the size of the potential equity award to sixty-two million five hundred thousand (62,500,000) shares, and (ii)
make the entire award subject to the achievement of corporate performance benchmarks set by the Board of Directors.
NOW, THEREFORE, in compliance with the provisions of the Employment
Agreement allowing for amendment thereof, and for good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company and Executive agree as follows:
1. | | Revised Equity Compensation. Section 3B of the Employment Agreement
shall be amended and restated in its entirety, to read as set forth below: |
“B. Bonus Plan- Equity Awards. Chief Business Development
Officer shall receive a one-time initial grant of shares of common stock in the corporation within 30 days of signing this Agreement
in an amount of one-hundred twenty-five million (125,000,000) shares.
Performance
Award. Upon the Company’s achievement of twenty-five million dollars ($25,000,000) in revenue on a consolidated reporting
basis for any calendar year, or the achievement of another corporate performance benchmark to be set by the Board of Directors,
a restricted stock issuance will be granted in the amount of sixty-two million five hundred thousand (62,500,000) shares, to be
issued on a fully vested basis over the years remaining in this Agreement in equal installments on the anniversary of the date
of this Agreement. All shares are to be common shares issued as restricted stock.”
(a) Except for the amendments set forth herein, the Employment
Agreement shall remain in full force and effect without change.
(b) This Amendment may be executed in counterparts, each of which
shall be an original, but all of which together shall constitute one and the same instrument.
(c) This Amendment shall be governed by and construed and enforced
in accordance with the laws of the State of California, without reference to the conflict of laws principles thereof.
(d) This Amendment and the Employment Agreement
shall constitute the entire agreement between the parties hereto pertaining to the subject matter hereof.
IN WITNESS WHEREOF, each of the undersigned has duly executed
this Amendment as of the date first written above.
“Company” |
ZONZIA MEDIA, INC., |
|
a Nevada corporation |
|
|
|
|
|
By: /s/ Stanley L. Teeple |
|
Name: Stanley L. Teeple |
|
Title: Chief Compliance Officer |
|
|
|
Date: July 6, 2015 |
“Executive” |
/s/ Myles A. Pressey III |
By: Stanley L. Teeple |
|
|
Date: July 6, 2015 |
[Signature page to Amendment No. 1 to Employment
Agreement]
Exhibit 10.15
CONSULTING AGREEMENT
Pursuant to our recent conversations, Benchmark Advisory Partners
LLC a California. Limited Liability Company ("Consultant") hereby submits Zonzia Media, Inc. (the "Company),
this Consulting Agreement (the "Agreement") dated as of May 5, 2015.
This Consulting Agreement sets forth the new terms pursuant
to which Consultant will act as the Company's financial consultant providing strategic advice and consulting services regarding
matters more specifically set forth below. This Agreement and supersedes all prior understanding and agreements, whether written
or oral, among the parties with respect to such subject matter. Specifically, all prior agreements and contracts entered into by
and between the party s hereto shall immediately terminate upon the execution of this Agreement and neither party shall have any
further obligations thereunder.
1. | | Agreement. For one dollar in hand, and other good and valuable
consideration including the commitments made by each party hereto to the other, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follow |
a. | | Consultant operates a financial consulting and advising firm that provides business
and financial advice to various companies such as the Company, and also introduces companies to securities law professionals,
legal terms, accountants, auditors, investment bankers, brokerage firms, venture capital firms, banks, private equity firms, special
situation investors, alternative debt financiers and others (hereinafter "Entity" or " Entities") who may
be able to provide equity or debt financing to Consultant's clients. |
b. | | Company hereby retains Consultant to perform the aforesaid consulting services for
Company on the terms and for the consideration set forth below, and Consultant hereby agrees to perform said consulting services
on the terms and for the consideration set forth herein. |
c. | | Pursuant to the terms of this Agreement, Consultant has now identified one specific
entity, and will make an introduction of said entity to the Company. Consultant also knows other entities whom Consultant will
also introduce to the Company. In each case, Consultant believes these entities may have an interest in providing public company
resources and perhaps financing to the Company. |
2. | | General Services.
Provide strategic advice and consulting services, on an as needed basis as determined
by the mutual agreement of both Consultant and the Company, with regard to the Company
including but not limited to: (i) introduction and facilitation with legal counsel, auditors,
GAAP accountants and transfer agents to facilitate a better public company outlook (ii)
introduction and facilitation with investor relations firm (iii) introduction to potential
capital investors. The scope of the Services and additional compensation structure, if
any, for strategic advice, consulting, and other investment banking related services
on behalf of the Company or otherwise, shall be determined on a case-by-case basis by
the parties. |
3. | | Performance
of Services. In conjunction with the performance of the Services, Consultant
agrees to: |
a. | | Make itself available to the Company for phone conferences during normal business
hours for reasonable periods of time, subject to reasonable advance notice and mutually convenient scheduling, for the purpose
of advising the Company with regard to the Services to be performed and the preparation of such reports, summaries, corporate
profiles, suggested terms for recapitalization or restructuring of financial instruments, due diligence packages, corporate presentations,
and/or other material and documentation as shall be necessary to properly present the Company to individuals and/or entities that
could be a benefit to the Company. |
b. | | Advise the Company in evaluating proposals from potential strategic is alliances.
Consultant may be involved in negotiating with potential strategic alliances on behalf of the Company; provided, however, that
Consultant shall not be involved in the negotiations with potential investors in the Company. |
c. | | In connection with Consultant providing the Services, the Company agrees to keep
Consultant up to date and apprised of all business, market an legal developments related to the Company and its operations
and management. Consultant shall devote such time and effort, as it deems commercially reasonable under the circumstances to
the affairs of the Company to render the Services. Consultant shall not provide any services that constitute the rendering of
a legal opinion or perform any work that is in the ordinary purview of the Certified Public Accountant. Consultant cannot
guarantee results on behalf of the Company, but shall pursue all avenues that it deems reasonable through its experience and
network of contacts, it is understood that a portion of the compensation paid hereunder is being paid by the Company to have
Consultant remain available to advise it on transactions on an as-needed basis. |
d. | | The Company shall provide to Consultant copies of the Company's Business Plan, PowerPoint
Presentation and such other collateral materials necessary for Consultant's performance hereunder. The Company shall also make
available certain public of its employees and advisors (including but not limited to legal and accounting) for the purposes of
expert advice and perspective for the Services to be performed by Consultant as well as for presentations and meetings. Consultant
acknowledges and agrees that the Company's Business Plan, PowerPoint Presentation and other collateral materials to which Consultant
may have access to during the performance of this Agreement are confidential information and as such, shall not be distributed
to third parties which such distribution is outside the scope of the services to be performed hereunder. |
4. | | Term.
The term of this Agreement shall commence on the date first written above and shall end
six (6) months thereafter, unless terminated in accordance with the provisions set forth
below, or extended by the mutual written consent of the panics hereto (the "Term").
This Agreement may be terminated only: |
a. | | By the Company or Consultant for any reason upon thirty (30) days’ written notice
prior to the completion of the initial term; or By Consultant upon default in the payment of any amounts due to Consultant pursuant
to this agreement, if such default continues for more than fifteen (15) day following receipt by the Company from Consultant of
written notice of such default and demand for payment. All monies owed are due upon termination; or |
b. | | By mutual agreement of the parties. If the Company terminates the agreement, the Company
does so upon their own volition and without recourse, and will not receive any amount of monies paid in the form of a refund,
credit, or any other form of payment upon termination, Upon payment to Consultant, the Company forfeits all future rights to the
monies paid to the Consul ant for services. The Company shall be free during the period services are rendered to retain other
entities, consultants, brokers or others, and with such persons as it deems fit and this agreement does not provide for an exclusive
arrangement. Section 4 is irrevocable and survives the termination or the Agreement. |
5. | | Compensation for Service. As consideration for the performance of the
services, the Company shall pay Consultant a one time consultant's retainer fee (the "Consulting Fee") of
five hundred thousand shares (500,000) shares of Reg D Rule 144 Restricted ZONX Stock, due at the signing of this agreement,
for the Consultant's aforementioned services. |
| | The Consultant agrees in good faith to consistently provide introduction to public
company resources, capital resources, investor relations resources and legal and accounting resources, on an as prioritized
basis by the Company, as stated in Section (1) for a period of six (6) months from the date of this Agreement. |
| | The Consultant agrees to provide a weekly update of all introductions and dispositions of
each introduction to the Company. The Consultant agrees to take direction from the Company on an as-needed basis to
further the relations aps between the Company and the Entities. |
6. | | Travel Expenses. The Company hereby agrees that all fees paid under
this Agreement, are exclusive of any reasonable out of pocket travel, hotel and meal expenses that will be incurred by the members
of Consultant pursuant to providing the Services. The Company and Consultant further agree that prior to any ravel by a Consultant
member, Consultant will notify the Company of the purpose of the travel and the estimated air travel and hotel expenses to be
incurred and the Company will either pay such expenses for such member or notify Consultant that the expenses are not authorized.
The Company will reimburse any pre-approved reasonable meal expenses incurred by a Consultant member in relation to such travel
within fifteen (15) days of being invoiced by Consultant for such expenses. |
7. | | Use of Name. The Company shall not utilize the name "Benchmark
Advisory Partners LLC", or any derivative thereof, in any publication, announcement or otherwise, without the prior written
consent of Consultant. |
8. | | Indemnification and Warranties. |
a. | | The Company agrees to indemnify Consultant and Consultant agrees to indemnify Company
to hold it harmless against any losses, claims damages or liabilities arising out of, in connection with, or relating in any manner,
directly or indirectly, to a breach of this Agreement or the performance of the Services hereunder, unless it is finally determined
by a court of competent jurisdiction that such losses, claims, damages or liabilities arose out of the gross negligence of Consultant,
or any violation of applicable law by Consultant, including any misrepresentation of a material fact contained in information
furnished in writing by Consultant. |
b. | | The Company and Consultant agrees that if any indemnification sought pursuant to the
preceding paragraph is finally judicially determine to be unavailable, then the Company and Consultant shall contribute to the
losses. claims, liabilities, damages and expenses for which such indemnification or reimbursement is held unavailable in such
proportion as is appropriate to reflect the relative fault of the Company, on the one hand, and Consultant, on the other, in connection
with this Agreement, subject the limitation that in any event Consultant's, contribution to all losses, claims, liabilities, damages
and expenses with respect to which contribution is available hereunder shall not exceed the amount of the cash fees actually received
by Consultant hereunder. |
c. | | Consultant represents and warrants that the Services performed hereunder shall at
all times be in compliance with all applicable state and federal laws and regulations, including, but not limited to, securities
law and regulations. |
d. | | Consultant has no liability to the Company for any acts or omissions is in the performance
of services except for act or omissions that are due to the gross negligence of Consultant. |
| | The Company recognizes that Consultant, is not a broker or dealer as such terms are
defined under the 1933 and 1934 Securities Acts as well as all regulations and promulgations interpreting or enforcing the
terms of such acts (the "Acts") As such, the parties expressly acknowledge that all fees paid to Consultant
hereunder shall constitute consulting fees for its strategic advice and not for raising money for the Company, and that the
services of Consultant described in this Consulting Agreement are not intended to engage Consultant to provide services as a
broker or dealer acting on behalf of the Company in any placement of securities. Consultant shall engage in no negotiations
on behalf of the Company, nor shall Consultant participate in discussions between any entity introduced by Consultant and the
Company over terms for infusion of capital into the Company. Consultant shall not at as a broker or a dealer in any way, and
the parties acknowledge that Consultant is not licensed to do so. Consultant's only activity in connection with introductions
to potential capital funding sources is to make the introduction and nothing more. Consultant's compensation set forth herein
is based solely or the introduction to the general category or entities and is not related to specific entities which may be
introduced by Consultant, and is not in any way a commission with respect to any specific transaction or entity funding. |
| | As such, because there is no specific limit to the value of the services provided,
the Company agrees to pay the Consultant in accordance with the above payment schedule during the term of this agreement and
for five years after the term nation of the Agreement, if any corporate milestones are reached as the result of the Consultant's introductions or efforts. And as such, because
the introduction is between the consultant and entities may develop relationships that last longer than the term of his contract,
and as such these relationships may possibly lead to future of opportunities for the Company without the Consultant being explicitly
involved, the Company hereby agrees to pay the Consultant the full amount of this contract without exception on the date of signature.
No amounts will be refunded to the Company regardless of the date of termination or any reasons given for the termination, in accordance
with Section 4. All payments are final and non-fundable, without exception. Section 9 is irrevocable and will survive part the
termination date. |
10. | | Independent Contractor. The parties hereto agree that Consultant is
an independent contractor and shall not in any manner be deemed an agent or partner of, or co-venturer with the Company. In no
event is Consultant authorized or obligated to commit the Company to any agreement and the Company shall have no obligation to
enter- into any transaction identified by Consultant. The Company is not obligated or required to accept any
offer to purchase equity securities by any Investor identified by Consultant. |
11. | | Assignments and Binding Effect. This Agreement shall be binding on and
inure to the benefit of the parties hereto and their respective successors and permitted assigns. The rights and obligations of
the Company under this Agreement may not be assigned or delegated without the prior written consent of Consultant, and any purported
assignment without the written consent of Consultant shall be null and void. |
12. | | Modification and Waiver. Only an instrument in writing executed by the
parties hereto may amend this Agreement. The failure of any party to insist upon strict performance of any of the provisions of
this Agreement shall not be construed as a waiver of any subsequent default of the same or similar nature, or any other
nature. |
13. | | Construction. The captions used in this Agreement are provided for convenience
only and shall not affect the meaning or interpretation of any provision of his Agreement. |
14. | | Facsimile Signature. Facsimile transmission of any signed original document,
and retransmission of any signed facsimile transmission, shall be the same as delivery of an original. At the request of either
party, the parties shall confirm facsimile transmitted signatures by signing an original document. |
15. | | Governing Law. The subject matter of this Agreement shall be governed
by and construed in accordance with the laws of the State of California (without reference to its choice of law principles), and
to the exclusion of the law of any other forum, without regard to the jurisdiction in which any action or special proceeding may
be instituted. |
EACH PARTY HERETO AGREES TO SUBMIT TO THE PERSONAL
JURISDICTION AND VENUE OF THE STATE AND/OR FEDERAL COURTS LOCATED IN THE STATE OF CALIFORNIA FOR RESOLUTION OF ALL DISPUTES ARISING
OUT OF, IN CONNECTION WITH, OR BY REASON OF THE INTERPRETATION, CONSTRUCTION, AND ENFORCEMENT OF THIS AGREEMENT, AND HEREBY WAIVE
THE CLAIM OR DEFENSE THEREIN THAT SUCH COURTS CONSTITUTE AN INCONVENIENT FORUM. AS A MATERIAL INDUCEMENT FOR THIS AGREEMENT. EACH
PARTY SPECIFICALLY WAIVES THE RIGHT TO TRIAL BY JURY OF ANY ISSUES SO TRIABLE.
16. | | Severability. If any provision of this Agreement shall be invalid or
unenforceable in any respect for any reason, the validity and enforceability of any such provision in any other respect, and of
the remaining provisions of this Agreement, steal not be in any way impaired. |
17. | | Non-Exclusive. Consultant acknowledges and agrees that it is being granted
nonexclusive rights with respect to the Services to be provided to the Company and the Company is free to engage other parties
to provide consulting services similar to those being provided by Consultant hereunder. The parties may agree to enter into an
exclusive opportunity and shall provide a written agreement necessary. |
18. | | Non-Circumvention.
Neither party shall attempt to or actually circumvent or interfere with business relationships between the Company and/or Consultant,
their clients or sources of transactions. Further, now and for two years after the date hereof, the Company shall not, directly
or indirectly, establish, or receive or pay compensation for or financing for or receive, any interest, investment, financing,
or participate in any merger, acquisition, joint venture, agency, vendor, issuance of securities or other relationship with Consultant's
clients or sources of transactions that were introduced to the Company by Consultant or became aware of the Company through the
provision of Services by Consultant, in circumvention of the business relationships between the Company and Consultant, Consultant's
clients of sources of transactions established in this Consulting Agreement. As such, because there is no specific limit to the
value of the services provided, the Company agrees to day the Consultant in accordance with the above payment schedule during
the tern of this agreement and for two years after the termination of the Agreement, if any corporate milestones are reached as
the result of the Consultant's introductions or efforts. Recognizing that the business trajectory and relationships as a direct
result of Consultant may surpass two years, the Company agrees to pay in full the Consulting Fee at the time of signature of this
agreement. The Company hereby irrevocably agrees not to circumvent, avoid, bypass, or obviate, directly or indirectly, the intent
of this Agreement. |
19. | | Survivability. Neither the termination of this Agreement nor the completion
of any services to be provided by Consultant hereunder, shall affect the provisions of this Agreement that shall remain operative
and in full force and effect. |
20. | | Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties hereto with respect to the subject matter of this Agreement and supersedes all prior understandings
and agreements, whether written or oral, among the parties with respect to such subject matter. Specifically all prior agreements
and contracts entered into by and between the parties hereto shall immediately terminate upon the execution of this Agreement
and neither party shall have any further obligations thereunder. |
If the foregoing correctly sets forth the
understanding between the Consultant and the Company, please so indicate in the space provided below for that purpose within 10
days of the date hereof or this Agreement shall be withdrawn and become null and void. The undersigned parties hereto have caused
this Agreement to be duly executed by their authorized representatives pursuant to corporate board approval and intend to be legally
bound.
Company: Zonzia Media, Inc. |
Consultant: Benchmark Advisory Partners |
|
|
By: Myles Pressey III |
Timothy Connor, President |
|
|
Date: 5/6/15 |
Date 5/6/2015 |
|
|
Signature: /s/ Myles Pressey |
Signature: /s/ Timothy J. Connor |
|
|
Exhibit 5.1
Date:
July 10, 2015
Zonzia Media, Inc.
74 N. Pecos, Suite D
Henderson, NV 89074
Re: Registration Statement on Form S-1
Ladies and Gentlemen:
With respect to the Registration Statement on Form S-1 filed with
the Securities and Exchange Commission on May 29, 2015, File number 333-204570, as amended (the "Registration Statement")
by Zonzia Media, Inc., a Nevada corporation (the "Company") under the Securities Act of 1933, as amended, relating to
the sale of up to 43,131,591 shares of Common Stock of the Company, $.001 par value (the "Common Stock"), by the selling
stockholders named in the Registration Statement (the "Selling Stockholders") and 46,875,000 shares of Common Stock registered
for sale by the Company, we advise you as follows:
We are counsel for the Company and have participated in the preparation
of the Registration Statement. We have reviewed the Company's Articles of Incorporation, as amended to date, the corporate action
taken to date in connection with the Registration Statement and the issuance of the shares and such other documents and authorities
as we deem relevant for the purpose of this opinion.
Based upon the foregoing and in reliance thereon, we are of the
opinion that, upon compliance with the Securities Act of 1933, as amended, and with the securities or "blue sky" laws
of the states in which the shares are to be offered for sale, the 43,131,591 shares of Common Stock registered for resale by the
Selling Stockholders have been validly issued, fully paid and non-assessable and the 46,875,000 shares registered for sale by the
Company, when subscribed and paid for, will be validly issued, fully paid and non-assessable.
This opinion speaks as of the date hereof and
through the effectiveness of the Registration Statement; however, we assume no obligation to advise you or any other person with
regard to any change in the circumstances or the law that may bear on the matters set forth herein after the effectiveness of the
Registration Statement. We consent to your filing this opinion as an exhibit to the Registration Statement and to the reference
to our firm in the Prospectus under the heading "Legal Matters."
Very truly yours,
/s/ Wilson & Oskam LLP
9110 Irvine Center Drive
I Irvine, California 92618 I
Tel: 949.752.1100 I Fax: 949.752.1144
I www.wilsonoskam.com
Exhibit 23.1
Consent
of Independent Registered Public Accounting Firm
As the
independent registered public accountants of Zonzia Media, Inc., we hereby consent to the incorporation by reference in
Amendment No. 1 to the the Form S-1 of Zonzia Media, Inc., our report dated April 15, 2015, relating to the consolidated
balance sheet of Zonzia Media, Inc., as of December 31, 2014, and the related consolidated statement of operations,
stockholders' deficit and cash flows for the period from May 24, 2014 to December 31, 2014, and the related notes to the
consolidated financial statements.
Haynie & Company
Salt Lake City, Utah
July 10, 2015
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