As filed with the Securities and Exchange Commission on September
29, 2015
Registration No. 333-204570
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
AMENDMENT NO. 3 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 |
|
|
$ |
0.11 |
(2) |
|
$ |
4,744,475 |
|
|
$ |
551.31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
|
|
|
|
|
|
|
|
11,775,725 |
|
|
$ |
1,368.34 |
|
_______________
(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 September 24,
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 September 29,
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 September 28, 2015, the closing price
for one share of our common stock was $0.13.
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 September
__, 2015
TABLE OF CONTENTS
Page No.
Note Regarding Forward-Looking Statements |
2 |
Prospectus Summary |
3 |
Risk Factors |
6 |
Market and Other Data |
14 |
Use of Proceeds |
15 |
Determination of Offering Price |
16 |
Market For Our Common Stock and Other Related Stockholder Matters |
16 |
Our Business |
18 |
Description of Properties |
28 |
Legal Proceedings |
28 |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
28 |
Directors and Executive Officers |
37 |
Executive Compensation |
45 |
Certain Relationships and Related Transactions, and Director Independence |
53 |
Security Ownership of Certain Beneficial Owners and Management |
55 |
Selling Stockholders |
56 |
Dilution |
58 |
Plan of Distribution |
59 |
Description of Securities |
62 |
Shares Eligible For Future Sale |
64 |
Legal Matters |
65 |
Experts |
65 |
Change in Accountants |
65 |
Where You Can Find More Information |
66 |
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 September 29, 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.
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” software
technology, we plan to allow instant access to our available content from internet connected devices including home computers,
tablets, smart phones and other mobile devices. Upon the full launch of all three of our delivery platforms, which is contingent
upon our receipt of adequate funding, we plan to deliver a variety of content including:
|
§ |
Original Programming – featuring TV series,
mini-series, and documentaries. |
|
§ |
Feature Films – full-length feature films
from major Hollywood studios and independent production companies. |
|
§ |
Television Shows – TV series from major
networks and independent production companies. |
|
§ |
Concerts, Sports and Live Events – streaming
live music concerts, live sports events and other live events. |
Initially, we are distributing licensed content through our
cable television and hotel network distribution platforms.
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 |
Joseph Martin |
|
44 |
|
Director |
|
|
|
|
|
Advisory Board members: |
|
|
|
|
Scott Steiner |
|
|
|
|
Charles R. Dutton |
|
|
|
|
Our Growth Strategy
We are committed to establishing three
distinct distribution platforms for content, as further described below in the section entitled “Business.” As the
distribution platforms become established, we will seek to generate advertising revenue and subscription revenue from distributed
content.
Initially, we are distributing
content that we license from our supplier simplyME Distribution across two platforms: the cable television platform and hotel
network platforms. The Company’s objective is to provide its own content for distribution as it is developed and
acquired over time. Initially, all advertisers on the Zonzia channel have been secured by simplyME Distribution and its
outside ad agency.
We are currently focused on the following
three platforms to meet our distribution objectives:
| 1- | Cable Television Platform
|
|
· |
This platform has launched. It is currently live in 27 plus
million households in the United States through a Channel Distribution Agreement with simplyME Distribution LLC. |
|
· |
Our supplier simplyME has agreements with national cable
providers, including Comcast, Dish Network, and Verizon FiOS to distribute content. |
|
· |
We also 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 content through the cable television platform. |
|
· |
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. |
| 2- | Hotel Network Platform |
|
· |
The Company has an agreement with Sonifi Solutions, Inc.
to provide content to Sonifi’s hotel clients, which include the following, among others: |
|
o |
Marriott Hotel Group |
|
o |
Westin Hotels Group |
|
o |
Hilton Hotel Group |
|
· |
The initial roll-out to approximately
scheduled 546,000 hotel rooms was launched on August 1, 2015 with licensed content on a Free-To-Guest linear channel.
Our Free-To-Guest VOD channel also
went live in August 2105, with distribution scheduled in approximately 882,000 hotel rooms. |
|
· |
The revenue model contemplates Zonzia paying an advertising
agency commission and subsequently sharing the remaining revenue with content providers. |
|
· |
The growth strategy is to increase the number of hotel rooms
displaying content, implement video-on-demand distribution and to provide compelling content through both our content partners
and eventually, our own original content. |
| 3- | Website: Zonzia.com Platform |
|
· |
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 teasers of content offering to come such as the short interviews from the Tribeca Film Festival. |
|
· |
The Company is in negotiations for 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 228,840,975 shares issued and outstanding. If the direct offering is fully subscribed, there would be 275,715,975
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 sourced by simplyME 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.
Our dependence on a sole distribution
partner for current advertisers subjects us to commercial risk.
Currently, all of the advertisers on the
Zonzia channel are sourced through our content supplier and distribution partner, simplyME Distribution LLC, with whom we have
a revenue share arrangement. Since the contracts with advertisers lie with simplyME and/or its advertising firm and we do not
have a direct contractual relationship with these advertisers, our ability to generate advertising revenue would be adversely
impacted in the event that our relationship with simplyME erodes or is harmed.
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 228 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 premium of approximately 16% to the trailing 10-day trading day average closing bid and ask
prices of our common stock as of September 28, 2015, which was $0.1255. 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 September
28, 2015, the closing bid price for one share of our common stock was $0.1011. During the 60 trading days prior to September 28,
2015, the closing trading price ranged from $0.10 to $0.20. 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 |
|
|
|
|
|
|
|
|
Third Quarter (to September 28, 2015) |
|
$ |
0.22 |
|
|
$ |
0.10 |
|
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 September 28, 2015, there were
1,074 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 September 28, 2015, there were
228,840,975 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 December 31, 2014:
Equity Compensation Plan
Information
|
|
Number of securities to be issued upon exercise of outstanding options, |
|
Weighted-average exercise price of outstanding options, |
|
Number of securities remaining available for future issuance
under equity compensation plans (excluding 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 2,371,591 warrants outstanding with a weighted
average exercise price of $0.50. 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 platform;
2) Hotel
in-room channel platform; and
3) our
website Zonzia.com platform
Through an “Over-The-Top” software
technology we plan to allow instant access to our available content from internet connected devices including home computers,
tablets, smart phones and other mobile devices. Upon the full launch of all three of our delivery platforms, which is contingent
upon the receipt of adequate funding, we plan to deliver a variety of content including:
|
§ |
Original Programming – featuring TV series,
mini-series, and documentaries. |
|
§ |
Feature Films – full-length feature films
from major Hollywood studios and independent production companies. |
|
§ |
Television Shows – TV series from major
networks and independent production companies. |
|
§ |
Concerts, Sports and Live Events – streaming
live music concerts, live sports events and other live events. |
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 described below to generate advertising
revenue. Initially, we are distributing content that we license from our supplier simplyME Distribution across two platforms:
the cable television platform and the hotel network platforms. The Company’s objective is to provide its own original content
for distribution as it develops and acquires the content over time, eventually across all three platforms.
Platform #1-Cable Television
|
· |
This platform has launched. A Zonzia VOD channel is currently
live in 27 plus million households in the United States through a Channel Distribution Agreement with simplyME Distribution
LLC. |
|
· |
Our supplier simplyME has agreements with national cable
providers Comcast, Dish Network and Verizon FiOS to distribute content. Initially, we are licensing this content
from simplyME. |
|
· |
The business model is to generate advertising dollars from
users viewing distributed content through simplyME’s cable providers. As of June 30, 2015, we had not yet generated
advertising revenue, but expect to report advertising revenue for 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 named “Zonzia Kidz,” with its launch expected by early
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. The contractual relationship with these providers lies
with simplyME. 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 by the second quarter of 2016.
simplyME, our distribution and content
supplier, has secured advertisers in support of the initial programming, and we are working together with simplyME to secure
new advertisers in the coming months. With the current advertisers on the Zonzia channel provided through simplyME and
its advertising firm, Zonzia believes it will report revenue in the third quarter of 2015.
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 agreed to 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.
Addendum Regarding Content License
On July 31, 2015, the Company and simplyME
entered into an addendum to the Channel Distribution Agreement, whereby simplyME extended media license rights to the Company
with respect to specific content, as partial consideration for the revenue-sharing arrangement that is in place between the Companies
under the Channel Distribution Agreement. The term for this addendum is up to two years. simplyME represents and warrants in the
addendum that it has the right to license or sublicense, as applicable, the content being licensed to the Company pursuant to
the Addendum.
The following table summarizes programming licensed to the Company under the Addendum, which is the content initially being broadcast under the Channel Distribution
Agreement and related Addendum:
Series Title | |
Show Length | |
Genre | |
Episodes | |
Target Audience Age |
| |
| |
| |
| |
|
Roll In The City | |
0:30:00 | |
Celebrity Lifestyle | |
| |
25-45 |
| |
| |
| |
| |
|
What’s The 411 | |
0:30:00 | |
Celebrity News | |
10 | |
35-55 |
| |
| |
| |
| |
|
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 in early, 2016. A copy of this Addendum to the 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 VOD channel content offerings via our agreement with simplyME Distribution. Advertisers secured by simplyME 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 when dealing directly with the 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. A copy of this Agreement is listed as an exhibit to the registration
statement of which this prospectus is a part. |
|
·
· |
The initial roll-out to approximately
scheduled 546,000 hotel rooms was launched on August 1, 2015 with licensed content on a Free-To-Guest linear channel.
Our Free-To-Guest VOD channel also
went live in August 2105, with distribution scheduled in approximately 882,000 hotel rooms. |
|
· |
The revenue model contemplates Zonzia paying an advertising
agency commission and subsequently sharing the remaining revenue with content providers. |
|
· |
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.
|
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. The agreement provides that 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 has agreed to use commercially
reasonable efforts to distribute VOD submissions to approximately 900,000 guest rooms at Sonifi-served hotels under the Agreement.
The Submission/Insertion Order agreement with Sonifi was put in place between the parties to solidify the relationship and set
the main business terms in advance of the actual launch.
Payments to Sonifi for the 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.
Launch of Hotel Network Distribution
On August 1, 2015, distribution under the
Sonifi Solutions Hotel Network platform was launched, with initial linear based distribution to approximately 546,000 scheduled
hotel guest rooms under the channel name “ZONZIA PREMIERE.” This initial distribution was significantly broader than
the 450,000 hotel rooms contemplated by the agreement. Sonifi has confirmed that this Zonzia channel is available in the majority
of hotels served by Sonifi Solutions.
In August 2015, the Video-On-Demand (VOD)
distribution was launched under the agreement with Sonifi, with distribution scheduled in approximately 882,000 hotel rooms. With
respect to both the Linear and VOD distributions, launch number are based on rooms that were scheduled to receive the ZONZIA PREMIERE
content as of the launch; definitive counts of rooms in which the content was actually available and played/viewed will be available
on a historical basis. The Company has been advised by Sonifi that definitive room counts may deviate from scheduled room number
counts by up to approximately 10%.
Description of License Agreement with
Sonifi Solutions, Inc.
In connection with the launch of the Zonzia
Premiere channel on the Hotel Network, on August 1, 2015, the Company entered into a License Agreement with Sonifi Solutions,
Inc., whereby the Company granted Sonifi a non-exclusive, non-assignable, royalty free right and license to receive, transmit
and distribute through third parties, general entertainment programming provided by the Company. This allows Sonifi to distribute
the content through its in-guest room satellite-delivered television programming and/or interactive hotel entertainment platform.
The territory covered by the license includes the United States and the Caribbean. During the term, Sonifi shall earn a monthly
distribution fee of $0.22 for each guest room that subscribes to the distributed programming as of the end of the month. The agreement
has a term of two years, unless terminated earlier in accordance with the agreement.
Description of Content Offerings per the
Agreement with Sonifi Solutions Inc.
The following table summarizes the
programming that is initially available through the Sonifi Solutions, Inc. agreement at the time of its launch on August 1,
2015. Similar to the content being distributed through the Cable television distribution platform, all initial content that
is being distributed through the Hotel Network distribution platform is content that is being licensed from simplyME pursuant
to the Addendum to Distribution Channel Agreement described above. The Company has the right to broadcast content supplied by
simplyME for a period of two years, during which time the Company plans to acquire its own content.
SERIES TITLE | |
GENRE | |
EPISODES | |
AUDIENCE |
| |
| |
| |
|
Profiles | |
Celebrity | |
300 | |
25-55 |
| |
| |
| |
|
Runway France | |
Fashion | |
10 | |
20-45 |
| |
| |
| |
|
Nightclub Ratings | |
Nightlife | |
10 | |
18-34 |
| |
| |
| |
|
The Art of Fighting | |
Martial Arts | |
9 | |
18-45 |
| |
| |
| |
|
Music Confidential | |
Music | |
13 | |
18-34 |
| |
| |
| |
|
Game News Update | |
Video Games | |
13 | |
16-34 |
| |
| |
| |
|
John Legend Documentary | |
Documentary | |
1 | |
16-35 |
| |
| |
| |
|
Pharrell Williams Documentary | |
Documentary | |
1 | |
16-35 |
Description of the Revenue Model for the Hotel Channel
The Hotel Channel platform model is
very similar to the Cable Channel platform model in that we will secure advertisers for our Linear and VOD channel offerings.
Advertisers will be solicited and contracted by simplyME distribution and its 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 Zonzia’s bank account. The
usual and customary receivable timetable is net 60 days from national advertising agencies, and net 30 days when dealing
directly with the 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 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 the 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 our web pages are 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 when dealing directly with the 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:
|
§ |
Samsung |
|
§ |
Sony |
|
§ |
Panasonic |
|
§ |
Phillips |
|
§ |
Sharp |
|
§ |
Xbox one |
|
§ |
Xbox 360 |
|
§ |
Dish Hopper |
|
§ |
Apple TV |
|
§ |
Chromecast |
|
§ |
ROKU |
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 internet connected devices. Our content will be posted on www.zonzia.com. Over-The-Top
(OTT) refers to any content not delivered as specifically programmed linear channels from the pay TV operator, which may encompass
even on-demand content provided as TV Everywhere by the pay TV operator. Further, OTT has the component of running on the "open
internet" or an unmanaged network.
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 be required to fund $12,000,000 of the production budget for Season 1 of “Z – Inspired by Zorro”
series, less the $1,200,000 initial funding commitment. Zonzia would have additional funding requirements but 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 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 net 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 base, 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. The term of the
Consulting Agreement was 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. Subsequently, the engagement was terminated by the Company August 1, 2015.
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 United States Patent and Trademark Office (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 continue to do so on an on-going basis. Our overall
strategy is to provide, together with our business partners, a generous mix of 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
which will be contingent upon acquiring adequate funding.
The competition for well-known 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 point of differentiation from our competitors,
which we hope to establish as we develop and acquire content, is that we plan to make available a channel within a channel concept.
The consumer would pay the basic subscription price to access our general content and then will be able to add niche premium content
via sub-channels at an additional price. For example:
1- A specific sporting broadcast
and news channel
2- A specific entertainment
venue or concert series channel
3- A specific children program
channel
While the Company is still a development
company and has not yet acquired all of the content offerings described above, the Company believes its concept for a branded
layered channel is compelling. Ultimately, the vision is that a user could go to Zonzia Channel and access kids, sports, or entertainment
sub-channels, all within the Zonzia network.
Our business model and content strategy
is also based around the need to sell advertising.
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. |
Currently we have programming as described
in the Business section available through our Zonzia Cable television platform and our Hotel Network distribution platforms.
Our point of differentiation from our competitors, which we hope to establish as we develop and acquire content, is that we
plan to make available a channel within a channel concept. The consumer would pay the basic subscription price to access our general
content and then will be able to add niche premium content via sub-channels at an additional price, as described above in more
detail under “Business -- Content Strategy.”
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.
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 June 30,
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
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
Platform;
2) Hotel in-room
channel Platform; and
3) our website
Zonzia.com Platform
Through our “Over-The-Top) (OTT)
software technology, we plan to allow instant access to our available content from internet connected devices including home computers,
tablets, smart phones and other mobile devices. Upon the full launch of all three of our delivery platforms, which is contingent
upon our receipt of adequate funding, we plan to deliver variety of content including:
|
§ |
Original Programming –
featuring TV series, mini-series,, and documentaries. |
|
§ |
Feature Films – full-length feature films
from major Hollywood studios and independent production companies. |
|
§ |
Television Shows – TV series from major
networks and independent production companies. |
|
§ |
Concerts, Sports and Live Events – streaming
live music concerts, live sports events, and other live events. |
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 period ended June 30 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.
Revenue
We did not generate any revenue during
the three and six months ended June 30, 2015 or during the period from our inception through June 30, 2014. Through the second
half of 2015, we expect to begin to recognize revenue, initially expected to not be material to results of operations for the
fiscal year ended December 31, 2015, as we ramp up our content offerings. Additionally, if we are successful in our funding and
brand awareness campaigns we may be able to launch our subscription service in early to mid-2016.
Sales and Marketing
For the three and six months ended
June 30, 2015 we incurred sales and marketing expenses totaling approximately $135,000 and $259,000 (net of the non-cash reversal
of a non-recurring accrued obligations of approximately $422,000), respectively. Through June 30, 2015, we incurred $279,000 of
costs for the construction and development of our content delivery platforms.. 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
and six months ended June 30, 2015 of approximately $7,200,00 and $72,900,000 is primarily the result of non-recurring stock awards
to our officers and directors, inclusive of the modification of previously issued awards. Included in officer and director compensation
during the six month 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 and $2,770,833 of accrued compensation cost due to a previously
issued, but unvested restricted stock award issued to a current officer that has been cancelled. During the three months ended
June 30, 2015 we recognized total compensation cost of $4,269,230, associated with a stock based award granted to Mr. Myles Pressey
III, inclusive of the incremental cost associated with the modification of the award originally contained in the employment agreement
with an effective date of January 29, 2015. Pursuant to the modification, a stock based-award to Mr. Pressey III, consisting of
25,000,000 shares of restricted stock that was previously scheduled to be granted upon the first anniversary of his employment
agreement, was replaced with a performance-based stock award. Under the performance based award, Mr. Pressey III is eligible to
receive 62,500,000 shares of restricted stock upon the Company’s achievement of $25,000,000 in revenue on a consolidated
reporting basis for any calendar year, or upon the achievement of another corporate performance benchmark to be set by the Board
of Directors Our officer compensation cost for the period ended June 30, 214 of approximately $54,800 was associated with payments
made to our former CEO and Chairman under an informal arrangement.
We believe a significant portion of
the stock awards granted during the first six months 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 157,447,500 shares of fully vested, restricted and
unregistered shares of common stock to these individuals. Throughout the remainder of the fiscal year it is not anticipated that
officers will accrue compensation in excess of monthly salaries.
Professional Fees
The Company incurred approximately
$1,200,000 and $2,000,000 of professional fees during the three and six month period ended June 30, 2015, respectively. The majority
of these fees were incurred on a non-cash and non-recurring basis via the issuance of 5,334,524 shares of restricted and unregistered
common stock granted to various consultants for business development and contract review and generation. Professional fees of
$93,000 incurred during the period from inception through June 30, 2014 were the result of our initial entity creation. 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 approximately $64,000 and $387,000 for the three and six month periods ended June 30, 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 June 30, 2015, we had a working
capital deficit of approximately $1,465,000, 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.
As part of our agreements and insertion
order with Sonifi we are required make payments, beginning in August 2015, at the greater of $55,000 or fifty percent (50%) of
the of our gross advertising sales (net of any ad agency commission) per month, subject to a $140,000 monthly cap through August
of 2016. During the second and third years of the agreements with Sonifi we are obligated to pay 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,
and $110,000 per month, respectively. The agreement has an initial term ending in June 2018, subject to earlier termination rights
in accordance with the agreement.
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 six months ended June 30, 2015,
our cash used in operations totaling approximately $417,000 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 $75,000,000.
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
$554,000. 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.
Cash for the six month period ended
June 30, 2015 was provided by the issuance of 2,730,037 shares of restricted and unregistered shares of common stock totaling
$355,850 and the issuance of two promissory notes in the amount of $70,000.
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 July 2015 we raised an additional $60,000 through the issuance of 1,050,000 shares of restricted and unregistered
shares of common stock. In addition, in August 2015 we raised an additional $10,000 through the issuance of 102,564 shares of
restricted and unregistered shares of common stock. 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, live in 27 million households in the United States |
|
|
· Household Reach |
Available in an additional 13 million households
|
Fourth quarter 2015 |
· Programming Hours |
90 programming hours of content |
Second quarter 2016 |
|
|
|
2. Hotel-in-room channel
Current status: Launched with
linear channel under agreement with Sonifi, providing content to 545,000 hotel rooms
|
VOD distribution launch to approximately 882,000
hotel rooms |
Achieved |
·
Hotel Room Reach |
Expand
to 900,000 hotel rooms via VOD |
Fourth
quarter 2015 |
|
|
|
3. Website: Zonzia.com
Current status: site in initial stages, with
substantive content offerings to come
|
Partial functions available, including VOD
Complete website available, including original content |
First quarter 2016
Third 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 |
Offer
general content programming |
First quarter 2016
|
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 |
Third 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.
Develop High Quality and Entertaining
Content to Increase User Engagement
We expect to begin spending approximately
$3,000,000 dollars annually 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 June 30, 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
Initially, we are distributing content
that we license from our partner simplyME Distribution across two platforms: the cable and hotel network platforms. The Company’s
objective is to provide its own content for distribution as it developed and acquired over time. 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 pending the financial
ability to acquire and develop our intended content library.
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 |
Joseph Martin |
|
44 |
|
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.
Joseph Martin
Mr. Martin joined the Company’s Board of Directors
on July 30, 2015. As Co-Chair of the Intellectual Property Group at the 175-lawyer regional law firm Archer & Greiner, P.C.
from November 1999 through July 2015, Mr. Martin has represented cutting edge technology companies for a good part of his professional
career. As both an intellectual property litigator and a business consultant, Mr. Martin has specialized in helping entrepreneurial
clients protect and monetize their IP assets, resolve governance disputes, and grow revenue through strategic acquisitions and
financings. Since January 2010, Mr. Martin has served as the President of the Board of Trustees of the Tuckerton Seaport
Museum, where he leads an innovative Board and executive team which has garnered numerous awards and national recognition as a
museum of distinction. Mr. Martin is a graduate of Rutgers University School of Law where he earned his Juris Doctorate degree
and received his B.A. degree from the College of New Jersey.
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; |
|
|
|
|
(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
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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|
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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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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 | |
| – | | |
| – | | |
| – | | |
| – | |
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
Three 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 September 28, 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 | | |
| 55.04% | |
Stanley L. Teeple (3) | |
| 5,813,841 | (3) | |
| 2.49% | |
Lynwood A. Bibbens (4) | |
| 5,000,000 | | |
| 2.14% | |
Jonathan F. Adair (5) | |
| 5,000,000 | | |
| 2.14% | |
Frank McEnulty (6) | |
| 1,000,000 | | |
| * | |
Steven L. Sanders (Director) | |
| 150,000 | | |
| * | |
Philip Fraley (Director) | |
| – | | |
| * | |
Naresh Malik (7) | |
| 5,000,000 | | |
| 2.14% | |
Joseph Martin (Director) | |
| 3,331,819 | | |
| 1.43% | |
| |
| | | |
| | |
Officers and Directors as a group (8) persons | |
| 153,704,751 | | |
| 65.89% | |
_______________
† 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 228,840,975 shares of common
stock outstanding as of September 28, 2015, and outstanding options and warrants convertible into shares of common
stock totaling 4,439,773 for a grand total of 233,280,748. 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
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 |
3,331,818 |
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 |
2.10% |
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 |
1.61% |
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 |
1.61% |
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 |
51.62% |
Myles A. Pressey IV(6) |
227,273 |
227,273 |
0 |
0% |
Naresh
Malik(10) |
5,000,000 |
1,250,000 |
3,750,000 |
1.61% |
New
Hope Partners LLC |
16,381,105 |
11,881,105 |
4,500,000 |
1.92% |
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 |
1.47% |
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 |
191,821,576 |
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 233,280,748 shares, including outstanding options and warrants convertible into shares of common stock totaling
4,439,773 shares, were outstanding as of September 28, 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 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 shares
may be offered for sale at prevailing market prices or in privately 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.
In general, selling stockholders who
are 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.
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 OTCQB marketplace. 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 OTCQB. 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 September 28, 2015, we have
228,840,975 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.
CHANGE IN ACCOUNTANTS
On September
14, 2015, we were notified that the Haynie and Company audit partner on our account was no longer with the firm and had joined
the firm WSRP, LLC. As a result, Zonzia Media, Inc. dismissed Haynie and Company as our independent registered public accounting
firm effective immediately. The dismissal was approved by the Board of Directors of the Company.
Haynie’s
reports on the financial statements as of December 31, 2014 and for the period from May 24, 2014 (the Company’s inception)
to December 31, 2014 contained a going concern note resulting from the fact that the Company has no source of recurring revenue;
negative working capital; and has suffered recurring losses from operations. Other than the foregoing, Haynie’s reports on
the financial statements for the fiscal year end December 31, 2014 and for the period from May 24, 2014 to December 31, 2014 did
not contain an adverse opinion or a disclaimer of opinion and was not qualified or modified as to uncertainty, audit scope, or
accounting principles.
During the
Company’s period from May 24, 2014 to December 31, 2014 and through September 14, 2015, there were no disagreements with
Haynie on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which
disagreements, if not resolved to the satisfaction of Haynie, would have caused it to make reference to the subject matter of the
disagreements in connection with its report. Further, there were no reportable events as described in Item 304(a)(1)(v) of Regulation
S-K occurring during the Company’s period from May 24, 2014 to December 31, 2014 and through September 14, 2015.
The Company
provided a copy of the foregoing disclosures to Haynie prior to the date of our filing a current report on Form 8-K containg them
on September 18, 2015. Haynie furnished us with a letter addressed to the Securities and Exchange Commission, a copy of which
was filed as Exhibit 16.1 to such Form 8-K.
On September
14, 2015, the Board of Directors of the Company engaged WSRP, LLC (“WSRP”) as the Company’s new independent registered
public accounting firm. One of the partners with WSRP is the same auditor who was engaged on the audit of the Company while at
Haynie.
During the
period from May 24, 2014 to December 31, 2014 through September 14, 2015 and during any subsequent interim period preceding the
date of engagement, neither the Company, nor anyone acting on its behalf, consulted with WSRP regarding (a) the application of
accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that would have been
rendered on the Company’s financial statements, and no written report was provided to the Company nor was oral advice rendered
that was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting
issue; or (b) any matter that was either the subject of a disagreement (as defined in paragraph 304(a)(1)(iv) of Regulation S-K)
or a reportable event (as described in paragraph 304(a)(1)(v) of Regulation S-K.).
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 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 period ended June 30, 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
| |
June 30, 2015 | | |
December 31, 2014 | |
| |
(unaudited) | | |
| | |
ASSETS | |
| | | |
| | |
| |
| | | |
| | |
Current Assets | |
| | | |
| | |
Cash | |
$ | 9,173 | | |
$ | 208 | |
Prepaid professional fees | |
| 5,000 | | |
| – | |
| |
| | | |
| | |
Total current assets | |
| 14,173 | | |
| 208 | |
| |
| | | |
| | |
Other Assets | |
| | | |
| | |
Other assets | |
| 5,000 | | |
| – | |
| |
| | | |
| | |
Total assets | |
$ | 19,173 | | |
$ | 208 | |
| |
| | | |
| | |
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | |
| | | |
| | |
| |
| | | |
| | |
Current Liabilities | |
| | | |
| | |
Accounts payable | |
$ | 775,944 | | |
$ | 710,769 | |
Accrued expenses | |
| 362,200 | | |
| 690,247 | |
Related party accounts payable | |
| – | | |
| 340,163 | |
Promissory notes payable | |
| 70,000 | | |
| – | |
Accrued compensation | |
| 269,917 | | |
| 495,167 | |
Accrued interest | |
| 668 | | |
| – | |
| |
| | | |
| | |
Total current liabilities | |
| 1,478,729 | | |
| 2,236,346 | |
| |
| | | |
| | |
| |
| | | |
| | |
Stockholders' Equity (Deficit) | |
| | | |
| | |
Preferred stock, $0.001 par value, 200,000,000 shares authorized and none
issued and outstanding at June 30, 2015 and December 31, 2014 | |
$ | – | | |
$ | – | |
Common stock, $0.001 par value, 2,000,000,000 shares authorized and 227,640,975 and 758,065,119
shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively | |
| 227,641 | | |
| 758,065 | |
Additional paid in capital | |
| 98,672,757 | | |
| 22,923,087 | |
Accumulated deficit | |
| (100,359,954 | ) | |
| (25,917,290 | ) |
| |
| | | |
| | |
Total stockholders' equity (deficit) | |
| (1,459,556 | ) | |
| (2,236,138 | ) |
| |
| | | |
| | |
Total liabilities and stockholders' equity (deficit) | |
$ | 19,173 | | |
$ | 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 | | |
For the Six
Months Ended | | |
For the Periodfrom
Inception on May 24, 2014 | |
| |
June 30, | | |
June 30, | | |
to June 30, | |
| |
2015 | | |
2015 | | |
2014 | |
| |
(unaudited) | | |
(unaudited) | | |
(unaudited) | |
Revenue | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | |
Net revenue | |
$ | – | | |
$ | – | | |
$ | – | |
| |
| | | |
| | | |
| | |
Expenses | |
| | | |
| | | |
| | |
General and administrative | |
| 64,143 | | |
| 386,584 | | |
| 101 | |
Sales and marketing | |
| 135,086 | | |
| (162,842 | ) | |
| – | |
Officer and director compensation | |
| 7,214,200 | | |
| 72,889,877 | | |
| 54,800 | |
Professional fees | |
| 1,218,449 | | |
| 2,038,048 | | |
| 93,000 | |
| |
| | | |
| | | |
| | |
Total operating expenses | |
| 8,631,878 | | |
| 75,151,667 | | |
| 147,901 | |
| |
| | | |
| | | |
| | |
Gain (loss) from operations | |
| (8,631,878 | ) | |
| (75,151,667 | ) | |
| (147,901 | ) |
| |
| | | |
| | | |
| | |
Other income (expense) | |
| | | |
| | | |
| | |
Interest Expense | |
| (111,019 | ) | |
| (111,019 | ) | |
| – | |
| |
| | | |
| | | |
| | |
Net loss | |
$ | (8,742,897 | ) | |
$ | (75,262,686 | ) | |
$ | (147,901 | ) |
| |
| | | |
| | | |
| | |
Net loss per share - basic and diluted | |
$ | (0.04 | ) | |
$ | (0.27 | ) | |
$ | (0.00 | ) |
| |
| | | |
| | | |
| | |
Weighted average shares outstanding | |
| 222,421,326 | | |
| 275,532,037 | | |
| 48,500,000 | |
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)
| |
| | |
| | |
| | |
| | |
Total | |
| |
Common
Stock | | |
Paid in | | |
Accumulated | | |
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 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
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 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Stock based compensation in April 2015 | |
| 5,000,000 | | |
| 5,000 | | |
| 1,495,000 | | |
| – | | |
| 1,500,000 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Common stock issued for previously accrued consulting fees in April 2015 | |
| 4,500,000 | | |
| 4,500 | | |
| 922,554 | | |
| – | | |
| 927,054 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Common stock issued in lieu of interest in April 2015 | |
| 440,000 | | |
| 440 | | |
| 64,330 | | |
| – | | |
| 64,770 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Common stock issued for cash in April 2015 | |
| 25,445 | | |
| 25 | | |
| 4,975 | | |
| – | | |
| 5,000 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Stock based compensation in May 2015 | |
| 3,200,000 | | |
| 3,200 | | |
| 964,800 | | |
| – | | |
| 968,000 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Common stock issued for previously accrued consulting fees in May 2015 | |
| 509,524 | | |
| 510 | | |
| 112,111 | | |
| – | | |
| 112,621 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Common stock issued in lieu of interest in May 2015 | |
| 250,000 | | |
| 250 | | |
| 45,332 | | |
| – | | |
| 45,582 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Common stock issued for cash in May 2015 | |
| 1,641,929 | | |
| 1,642 | | |
| 168,358 | | |
| – | | |
| 170,000 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Stock based compensation in June 2015 | |
| 150,000 | | |
| 150 | | |
| 49,350 | | |
| – | | |
| 49,500 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Common stock issued for previously accrued consulting fees in June 2015 | |
| 250,000 | | |
| 250 | | |
| 49,750 | | |
| – | | |
| 50,000 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Common stock issued for cash in June 2015 | |
| 476,915 | | |
| 477 | | |
| 84,523 | | |
| – | | |
| 85,000 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Stock based compensation | |
| – | | |
| – | | |
| 4,269,230 | | |
| – | | |
| 4,269,230 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Related party debt forgiveness | |
| | | |
| | | |
| | | |
| | | |
| | |
Services contributed by employees/officers | |
| – | | |
| – | | |
| 288,988 | | |
| – | | |
| 288,988 | |
Related party debt forgiveness | |
| – | | |
| – | | |
| 100,000 | | |
| – | | |
| 100,000 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Net loss | |
| – | | |
| – | | |
| – | | |
| (75,262,686 | ) | |
| (75,262,686 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Balance June 30, 2015 | |
| 227,640,975 | | |
$ | 227,641 | | |
$ | 98,672,757 | | |
$ | (100,359,954 | ) | |
$ | (1,459,556 | ) |
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
(Unaudited)
| |
| | |
For the Period | |
| |
For the Six Months | | |
from Inception | |
| |
Ended | | |
on May 24, 2014 | |
| |
June 30, | | |
to June 30, | |
| |
2015 | | |
2014 | |
Cash Flows from Operating Activities | |
| | | |
| | |
| |
| | | |
| | |
Net loss | |
$ | (75,262,686 | ) | |
$ | (147,901 | ) |
| |
| | | |
| | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |
| | | |
| | |
Stock-based compensation | |
| 74,711,014 | | |
| – | |
Non-cash interest | |
| 110,352 | | |
| – | |
Gain on non-cash settlement of accrued expenses | |
| (809,714 | ) | |
| – | |
Change in prepaid professional fees | |
| (5,000 | ) | |
| – | |
Change in other assets | |
| (5,000 | ) | |
| (488 | ) |
Change in accounts payable | |
| 190,175 | | |
| – | |
Change in accrued expenses | |
| 94,401 | | |
| – | |
Change in accrued compensation | |
| 558,905 | | |
| – | |
Change in accrued interest | |
| 668 | | |
| – | |
| |
| | | |
| | |
Net cash used in operating activities | |
| (416,885 | ) | |
| (148,389 | ) |
| |
| | | |
| | |
Cash Flows from Financing Activities | |
| | | |
| | |
Proceeds from issuance of promissory notes payable | |
| 70,000 | | |
| 200,000 | |
Proceeds from issuance of common stock | |
| 355,850 | | |
| 488 | |
| |
| | | |
| | |
Net cash provided by financing activities | |
| 425,850 | | |
| 200,488 | |
| |
| | | |
| | |
Net increase in cash | |
| 8,965 | | |
| 52,099 | |
| |
| | | |
| | |
Cash at beginning of the period | |
| 208 | | |
| – | |
| |
| | | |
| | |
Cash at end of the period | |
$ | 9,173 | | |
$ | 52,099 | |
| |
| | | |
| | |
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 JUNE 30, 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 and six month periods ended June 30, 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.
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
June 30, 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 June 30, 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 six months ended June 30, 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 six months ended June 30, 2015 a
total of four of our Officers agreed to waive all or portions of their base salaries or previously accrued bonuses earned during
the year ended December 31, 2014 and through June 30, 2015 totaling $288,988. Since we consider our Officers related parties we
have determined the bonus and salary forgiveness was in the nature of a capital contribution and no gain was recognized 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 six months ended June 30, 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 six months ended June 30, 2015 associated with the cancellation and
replacement of this restricted stock award was $47,500,000.
During the six months ended June 30, 2015
we issued 2,000,000 shares of unregistered and restricted common stock to an affiliate for consulting services valued at $680,000.
A promissory note in the amount of $35,000 was issued to the same affiliate of the company, for cash proceeds of $35,000 in April
2015. As additional consideration on the promissory note, this same affiliate received 215,000 shares of unregistered and restricted
common stock valued at $32,039. Upon renewal of this promissory note in May 2015 this affiliate received 100,000 shares of unregistered
and restricted common stock valued at $17,260.
Employment Agreement Amendment
On May 29, 2015, we amended our Chairman and
Chief Business Development Office, Mr. Myles Pressey III’s, employment agreement. Mr. Pressey III was originally going to
be granted 25,000,000 shares of fully vested restricted and unregistered shares of common stock on January 29, 2016 whereas the
amendment calls for Mr. Pressey III to receive up to 62,500,000 shares of restricted and unregistered common stock subject to the
achievement of performance benchmarks set by the Board of Directors. On the modification date, the modification of Mr. Pressey
III’s equity award resulted in the recognition of $4,269,230 during the six months ended June 30, 2015.
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.
In April 2015 we issued 4,500,000 shares of
restricted and unregistered common stock for consulting services valued at $927,054.
In April 2015 we issued a total of 5,000,000
shares of restricted and unregistered shares of common stock as compensation to our officers valued at $1,500,000.
In April 2015 we issued 25,445 shares of restricted
and unregistered shares of common stock for cash totaling $5,000.
In May 2015 we issued a total of 3,200,000
shares of restricted and unregistered shares of common stock as compensation to our officers and directors valued at $968,000.
In May 2015 we issued 509,524 shares of restricted
and unregistered common stock for consulting services valued at $112,621.
In May 2015 we issued 1,641,929 shares of restricted
and unregistered shares of common stock for cash totaling $170,000.
In May 2015 we issued Warrants for the Purchase
of 1,500,000 shares of restricted and unregistered shares of common stock as additional incentive for a $150,000 cash investment
in the company that was part of the $170,000 in the previous footnote.
In May 2015 we issued 250,000 shares of restricted
and unregistered shares of common stock for interest on outstanding notes and payables valued at $45,582.
In June 2015 we issued a total of 150,000 shares
of restricted and unregistered shares of common stock as compensation to our officers and directors valued at $49,500.
In June 2015 we issued 250,000 shares of restricted
and unregistered common stock for settlement of an obligation valued at $50,000.
In June 2015 we issued 476,915 shares of restricted
and unregistered shares of common stock for cash totaling $85,000.
Warrants
During the quarter ended June 30, 2015 we issued
warrants to certain investors as part of the private placements of our restricted and unregistered common stock.
The following table presents a summary of our
warrant activity through June 30, 2015:
Warrants | |
Number | | |
Weighted Average Exercise Price | | |
Weighted Average Remaining Contractual Term (years) | |
Outstanding at December 31, 2014 | |
| 871,591 | | |
$ | 0.88 | | |
| 2.3 | |
Warrants granted | |
| 1,500,000 | | |
| 0.28 | | |
| 3.0 | |
Exercised | |
| – | | |
| – | | |
| | |
Forfeited, canceled or expired | |
| – | | |
| – | | |
| | |
| |
| | | |
| | | |
| | |
Outstanding at June 30,2015 | |
| 2,371,591 | | |
$ | 0.50 | | |
| 2.7 | |
The warrants did not have any intrinsic value
as of June 30, 2015 and 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.
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
In July 2015 we issued 1,050,000 shares of
restricted and unregistered common stock for cash totaling $60,000 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 $0.165 per share
for a period of three years.
On July 31, 2015, the Company and simplyME entered into an addendum
to the Channel Distribution Agreement, providing that while the Company is engaged in acquiring its own content, it may use programming
content provided by simplyME. The addendum clarifies that simplyME shall not be paid compensation for this content, but that
the revenue sharing agreement that is in place under the Channel Distribution Agreement above will also serve to compensate simplyME
for the use of its content. Under the Addendum, the Company has the right to broadcast content supplied by simplyME for a
period of two years. simplyME also represents and warrants in the addendum that is owns, or has the right to license and
sublicense, all of the content being provided to the Company pursuant to the Addendum.
In August 2015 we issued 102,564 shares of
restricted and unregistered common stock for cash totaling $10,000 to an investor.
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.
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. The agreement provides that initiall, 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 has agreed to use commercially
reasonable efforts to distribute VOD submissions to 900,000 guest rooms at Sonifi-served hotels under the Agreement. The Submission/Insertion
Order agreement was put in place among the parties pending the launch of the distribution channel.
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.
On August 1, 2015, distribution under the
Sonifi Solutions Hotel Network platform was launched, with initial linear based distribution to approximately 545,000 hotel guest
rooms.
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 April 2015 we issued 4,500,000 shares
of restricted and unregistered common stock for consulting services valued at $927,054.
In April 2015 we issued a total of
5,000,000 shares of restricted and unregistered shares of common stock as compensation to our officers valued at $1,500,000.
In April 2015 we issued 25,445 shares
of restricted and unregistered shares of common stock for cash totaling $5,000.
In May 2015 we issued a total of 3,200,000
shares of restricted and unregistered shares of common stock as compensation to our officers and directors valued at $968,000.
In May 2015 we issued 509,524 shares
of restricted and unregistered common stock for consulting services valued at $112,621.
In May 2015 we issued 1,641,929 shares
of restricted and unregistered shares of common stock for cash totaling $170,000.
In May 2015 we issued Warrants for
the Purchase of 1,500,000 shares of restricted and unregistered shares of common stock as additional incentive for a $150,000
cash investment in the company that was part of the $170,000 in the previous footnote.
In May 2015 we issued 250,000 shares
of restricted and unregistered shares of common stock for interest on outstanding notes and payables valued at $45,582.
In June 2015 we issued a total of 150,000
shares of restricted and unregistered shares of common stock as compensation to our officers and directors valued at $49,500.
In June 2015 we issued 250,000 shares
of restricted and unregistered common stock for settlement of an obligation valued at $50,000.
In June 2015 we issued 476,915 shares
of restricted and unregistered shares of common stock for cash totaling $85,000.
In July 2015 we issued 1,050,000 shares
of restricted and unregistered shares of common stock for cash totaling $60,000.
In August 2015 we issued 102,564 shares
of restricted and unregistered shares of common stock for cash totaling $10,000.
Item 16. Index To Exhibits
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 10.16 |
|
Addendum #2 to Distribution Channel Agreement with simplyME dated July 31, 2015 (10) |
Exhibit 10.17 |
|
License Agreement between the Company and Sonifi Solutions, Inc. dated August 1, 2015
(10) |
Exhibit 23.1 |
|
Consent of Haynie & Company |
Exhibit 23.2 |
|
Consent of Wilson & Oskam, LLP (included in Exhibit 5.1) |
Exhibit 24 |
|
Power of Attorney ** |
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)
(10) |
Incorporated by reference to Exhibit 10.1
to our Current Report on Form 8-K filed on July 10, 2015.
Incorporated by reference to
the applicable exhibit to our Current Report on Form 8-K filed on August 5, 2015. |
** Previously filed
|
(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 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 period ended June 30, 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 September 29, 2015.
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Zonzia Media, Inc. |
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By: |
/s/ Naresh Malik |
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Naresh Malik |
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Chief Executive Officer
(Principal Executive Officer) |
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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 |
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TITLE |
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DATE |
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/s/ Myles A. Pressey III* |
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Chairman of the Board of Directors |
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September 29, 2015 |
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/s/ Naresh Malik* |
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Chief Executive Officer |
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(Principal Executive Officer) |
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September 29, 2015 |
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/s/ Frank McEnulty |
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Chief Financial Officer |
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(Principal Accounting and Financial Officer) |
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September 29, 2015 |
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/s/ Philip Fraley |
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Director |
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September 29, 2015 |
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/s/ Joseph Martin |
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Director |
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September 29, 2015 |
*By /s/ Frank McEnulty
Frank McEnulty
Attorney-in-Fact
Exhibit Index
Exhibit Number |
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Description |
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Exhibit 3.1 |
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Amended and Restated Articles of Incorporation of Indigo-Energy, Inc. (3) |
Exhibit 3.2 |
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Amended and Restated Bylaws of Indigo-Energy, Inc. (4). |
Exhibit 5.1 |
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Opinion of Wilson & Oskam, LLP ** |
Exhibit 10.1 |
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Settlement Agreement dated January 22, 2015 (5) |
Exhibit 10.2 |
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Form of Subscription Agreement ** |
Exhibit 10.3 |
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Employment Agreement with Myles A. Pressey III (6) |
Exhibit 10.4 |
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Employment Agreement with Johnathan Adair (6) |
Exhibit 10.5 |
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Employment Agreement with Lynwood Bibbens (6) |
Exhibit 10.6 |
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Employment Agreement with Stanley L. Teeple ** |
Exhibit 10.7 |
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Employment Agreement with Naresh Malik ** |
Exhibit 10.8 |
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Employment Agreement with Frank McEnulty ** |
Exhibit 10.9 |
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Distribution Channel Agreement with simplyME dated February 9, 2015 (7) |
Exhibit 10.10 |
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Addendum to Distribution Channel Agreement with simplyME dated June 30, 2015 (8) |
Exhibit 10.11 |
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IT Services Agreement Between UM Technologies Exchange and the Company ** |
Exhibit 10.12 |
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Letter of Intent Between the Company and Georgeville Televison LLC dated March 25, 2015
** |
Exhibit 10.13 |
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Submission/Insertion Order Agreement with Sonifi Solutions, Inc. dated July 9, 2015 (9) |
Exhibit 10.14 |
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Amendment to Employment Agreement with Myles A. Pressey ** |
Exhibit 10.15 |
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Consulting Agreement with Benchmark Advisory Partners LLC dated May 5, 2015 ** |
Exhibit 10.16 |
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Addendum #2 to Distribution Channel Agreement with simplyME dated July 31, 2015 (10) |
Exhibit 10.17 |
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License Agreement between the Company and Sonifi Solutions, Inc. dated August 1, 2015
(10) |
Exhibit 23.1 |
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Consent of Haynie & Company |
Exhibit 23.2 |
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Consent of Wilson & Oskam, LLP (included in Exhibit 5.1) ** |
Exhibit 24 |
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Power of Attorney ** |
101.INS |
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XBRL Instances Document |
101.SCH |
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XBRL Taxonomy Extension Schema Document |
101.CAL |
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XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF |
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XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB |
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XBRL Taxonomy Extension Label Linkbase Document |
101.PRE |
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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. |
(10) |
Incorporated by reference to the applicable exhibit to our
Current Report on Form 8-K filed on August 5, 2015. |
** Previously filed
Exhibit 23.1
Consent
of Independent Registered Public Accounting Firm
As the former independent
registered public accountants of Zonzia Media, Inc., we hereby consent to the incorporation by reference in Amendment No. 3
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.
We also consent to the reference to our
firm under the caption “Experts”.
Haynie & Company
Salt Lake City, Utah
September 28, 2015
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