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United States Securities and Exchange Commission
Washington, DC 20549
FORM 20-F/A
AMENDMENT #1
[ ]
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) or (g) OF THESECURITIES EXCHANGE ACT OF 1934.
OR
[x ]
ANNUAL REPORT PURSUANT TO SECTIONS “13” OR “15(d)” OF THESECURITIES EXCHANGE ACT OF 1934.
For the fiscal year ended ………December 31, 2004…………………………………
OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934.
For the transition period from …………………………………………………………….…
Commission file number: 0-30942
STREAM COMMUNICATIONS NETWORK AND MEDIA INC.
________________________________________________________________________
(Exact name of registrant as specified in its charter)
Not Applicable
(Translation of registrant’s name into English)
British Columbia, Canada
(Jurisdiction of incorporation or organization)
Suite 1020 – 400 Burrard Street
Vancouver, British Columbia, V6C 3A6
(Address of principal executive offices)
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-- Stream Communications Network, Inc. --
Securities to be registered pursuant to Section 12(b) of the Act.
None.
Securities registered pursuant to Section 12(g) of the Act.
Common Shares, without par value.
(Title of Class)
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
None.
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.
37,833,800 common shares at December 31, 2004
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of theSecurities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes: ü No: N/A
Indicate by checkmark which financial statement item the registrant has elected to follow:
Item 17 ü Item 18 _______
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-- Stream Communications Network, Inc. --
FORM 20-F
INDEX
Item 5 – Operating and Financing Review and Prospects
Liquidity, Capital Resources and Subsequent Events
IITEM15 - Disclosure Controls and Procedures
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Notes to this amendment #1
Stream Communications Network & Media Inc. are filing this Amendment No. 1 on Form 20-F/A to their Annual Report on Form 20-F for the fiscal year ended December 31, 2004, which was originally filed with the Securities and Exchange Commission on June 30, 2005, to amend Items 3, 5 and 15, each of which is amended by replacing such Item in its entirety.
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| Item 3 has been corrected to show net income for the year ended December 31, 2002 to include foreign exchange income as part of comprehensive income. |
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| Item 5, “Liquidity, Capital Resources and Subsequent Events”, has been amended to indicate the likelihood of the Company being able to achieve its plans to raise funds. |
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| Item 15 has been amended to restate the scope and content of control and procedures described. |
The Annual Report, as amended by this amendment, continues to speak as of the date of its original filing, and the Company has not updated the disclosure as of a later date.”
PART 1
Item 3 – Key Information
A. Selected Financial Data
Financial Highlights
The following table sets forth our selected consolidated financial data for the years ended December 31, 2004, December 31, 2003, December 31, 2002, the two months ended December 31, 2001 and the two years ended October 31, 2001 prepared in accordance with Canadian generally accepted accounting principles (“Canadian GAAP”). The table also summarizes certain corresponding information prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”). This selected consolidated financial data include the accounts of our parent and our subsidiaries.
Year ended December 31, | Year ended December 31, | Year ended December 31, | Two months ended December 31, | Year ended October 31, | |||
2004 | 2003 | 2002 | 2001 | 2001 | |||
$CDN | $CDN | $CDN | $CDN | $CDN | |||
Revenues | 4,415,461 | 3,700,160 | 3,736,716 | 639,871 | 2,079,504 | ||
Net income (loss) from continuing operations | |||||||
Canadian GAAP | (6,564,715) | (6,254,620) | (3,626,325) | (773,491) | (2,301,619) | ||
US GAAP | (5,248,173) | (8,064,275) | (3,051,713) | (773,491) | (2,301,619) | ||
Net income (loss) from discontinued operations | |||||||
Canadian GAAP | - | - | (2,362,877) | (267,198) | (2,231,941) | ||
US GAAP | - | - | (2,362,877) | (267,198) | (1,097,691) | ||
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-- Stream Communications Network, Inc. --
Item 5 – Operating and Financing Review and Prospects
Liquidity, Capital Resources and Subsequent Events
Our working capital deficiency as at December 31, 2004 was $2,845,579. As over 93% of our assets are plant, property and equipment and intangibles pursuant to the subscriber base, there is room to finance our activities with commercial loans. At December 31, 2004 we had a bank credit facility in Poland of $500,000 USD.
Most of the capital flowing into Stream during 2004 was loans of some $4 million from Edward Mazur, a former director. Mr. Mazur has loaned the sum of some $3.4 million USD of which $2 million USD is secured by certain Polish cable TV networks. The loan is repayable on demand by giving notice of one year and presently is not repayable before March 31, 2006.
In December 2004, Stream borrowed the sum of $650,000 from Quest Capital Corp. (“Quest”) to cover short-term needs. This loan is to be repaid on or before June 30, 2005. The loan is personally guaranteed by Stan Lis, Casey Forward and Edward Mazur. In addition, Quest has a general security over the assets of Stream and 3 million shares of Stream as collateral security. The loan attracts interest at 1% per month, with interest payable monthly. A fee of 175,000 shares of Stream was paid to Quest as a loan fee. Stream is endeavouring to find additional equity capital or debt to repay the Quest loan and to make further acquisitions.
In 2005 the Company has conducted a private placement of up to 1,500,000 units ("Unit") at a price of $0.60 USD per unit. Each Unit is comprised of one common share and one half non-transferable share purchase warrant, with each two warrants entitling the holder to purchase an additional common share of the Company at a purchase price of $0.80 USD per common share for a period of two years. Originally the Company had proposed pricing of $0.75 per unit, but market pressure caused a price reduction. In response to the private placement Stream has additionally received various financing proposals that are being evaluated either as an adjunct to the private placement or as a separate issue.
For the year ended December 31, 2003, we received Cdn $1,264,542 (2002 - $2,005,646) from the exercise of warrants to purchase 702,526 (2002 – 986,470) shares.
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For the two months ended December 31, 2001, we raised an additional Cdn $1,557,095 from private placement of equity in the company’s stock. During the year ended October 31, 2001, we raised Cdn $347,300 from the exercise of stock options and $6,983,523 CDN from private placements. For the years ended December 31, 2003 and 2002 the following warrants were exercised:
Year | Number of Units | Price ($CDN) | Amount ($CDN) | Cash Commission ($CDN) | Net ($CDN) | |
Subscriptions | 2002 | 1,136,728 | 1,136,728 | |||
Exercise of warrants | 2002 | 200,000 | 2.85 | 570,000 | 570,000 | |
Exercise of warrants | 2002 | 100,000 | 2.00 | 100,000 | 100,000 | |
Exercise of warrants | 2002 | 1,036,770 | 1.80 | 1,866,186 | 1,866,186 | |
Exercise of warrants | 2003 | 702,526 | 1.80 | 1,264,542 | 1,264,542 | |
Stock options | Nil |
We continue to raise cash from equity sources and we will continue with this program until we achieve sufficient cash flow to allow for debt financing and debt servicing. We believe the Company is at the threshold of being able to make acquisitions by way of debt financing.
Our senior management establishes our overall funding and capital policies, monitors the availability of sources of financing and reviews the foreign exchange risk. We will continue to raise funds by way of private placements in our capital stock and exercise of stock options and warrants although there can be no guarantee that such funds will be available in the future. We have received the majority of funding by way of private placement of our common shares.
The ability of the Company to raise the capital needed and desired is not known. The auditors have indicated that there is no assurance that the Company will be successful in raising adequate financing and continue as a going concern and that the values used in the financial statements are based on the assumption of the Company continues as a going concern.
The Company has been able to raise equity money in the past, of which the majority has been spent on acquisitions. During the past three years, the Company has raised some $10.8 million of which $9.6 was invested into the acquisition of cable TV subscribers. This has left the Company with a negative working capital position of $2.8 million and some $4.2 million in debt to a former related party. It may be possible to convert some of the debt into equity shares, but no arrangements have been made.
If the Company cannot raise the necessary capital it may have to sell some of its cable assets. The viability of the Company is based on its cable assets and the revenue from operations. The Company has excess capacity put in place to handle additional subscribers and would have to reduce this and other costs in head office to reduce expense to try to find a profitable operating level. This may be impossible and the Company may be forced to liquidate if funding or profitability cannot be found.
IITEM15 - Disclosure Controls and Procedures
Our management, including our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) as of the end of the period covered by this annual report on Form 20-F. Based upon that evaluation, our chief executive officer and chief financial officer have concluded that, as of such date, our disclosure controls and procedures were effective to ensure that information required to be disclosed by our company in the reports that we file or submit under the U.S. Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms.
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Although our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives, all internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective may not prevent or detect misstatements and can provide only reasonable assurance with respect to financial statement preparation and presentation. Our disclosure controls and procedures are designed to provide a reasonable level of assurance of reaching our control objectives.
Under Sarbanes-Oxley and in view of the attestation requirement where the Company’s auditor will be required to provide a report on management’s assessment of its internal control over financing reporting, the Company is preparing to implement fully assessable procedures by the end of 2005. We are required to have attestation done for our year ended December 31, 2006.
In addition the audit committee is playing a larger role in this process. The primary roles and responsibilities of the Audit Committee include:
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reviewing and recommending to the Board for approval, the Company’s annual financial statements and the related discussion and analysis of management;
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reviewing and approving the Company’s interim financial statements (prior to their publication, filing or delivery to securityholders) and the related discussion and analysis of management;
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reviewing and approving, as prescribed, other financial information;
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evaluating and ensuring the independence of the Company’s auditor;
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reviewing and pre-approving the terms of the annual external audit engagement plan, as well as non-audit services the auditor is to perform; reviewing results of external audit activities;
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reviewing the Company’s ongoing relationship with its auditor;
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reviewing and assessing regularly:
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the quality and acceptability of accounting policies and financial reporting practices used by the Company;
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any significant proposed changes in financial reporting and accounting policies and practices to be adopted by the Company;
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any new or pending developments, in accounting and reporting standards that may affect the Company;
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reviewing and obtaining reasonable assurance that the Company’s internal financial control and information systems are properly designed and effectively implemented to produce accurate, appropriate and timely financial information;
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receiving a report on the Company’s material subsidiaries concerning any material non-routine structures; reviewing corporate policies within the scope of its responsibility and monitoring compliance with such policies;
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in respect of matters within the Audit Committee’s purview and delegation, assisting the Board in its oversight of the Company’s compliance with legal and regulatory requirements; and,
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reporting to the Board at each regularly scheduled meeting following any Audit Committee meeting.
The Audit Committee has the authority to engage independent counsel and other advisers having special competencies, as it determines necessary to carry out its duties, and it determines the appropriate amount of funding the Company is to provide for compensation of such advisors.Since the commencement of the Company's most recently completed financial year, the Audit Committee
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has not made any recommendations to nominate or compensate an external auditor which were not adopted by the board of directors of the Company.
SIGNATURE PAGE
Pursuant to the requirements of Section 12 of theSecurities Exchange Act of 1934, the Company certifies that it meets all of the requirements for filing on Form 20-F and has duly caused this amendment No. 1 to this annual report to be signed on its behalf by the undersigned, thereunto duly authorized.
Dated:
November 9, 2005
ON BEHALF OF THE COMPANY,
STREAM COMMUNICATIONS NETWORK, INC.
Per:
“Casey Forward”
Casey Forward, Chief Financial Officer
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