Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Jun. 30, 2014 | Aug. 08, 2014 | |
Document and Entity Information: | ' | ' |
Entity Registrant Name | 'Medient Studios, Inc. | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Jun-14 | ' |
Amendment Flag | 'false | ' |
Entity Central Index Key | '0001476278 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
Entity Common Stock, Shares Outstanding | ' | 2,644,187,167 |
Balance_Sheets
Balance Sheets (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Current assets | ' | ' |
Cash and Cash Equivalents | $156,331 | ' |
Accounts Receivable | ' | 2,061,000 |
Accounts Receivable - Related Party | ' | 3,329,080 |
Deposits | 44,700 | 74,700 |
Prepayments | 99,164 | ' |
Total current assets | 300,195 | 5,464,780 |
Non-Current Assets | ' | ' |
Film Costs, net of accumulated amortization | 10,000,000 | 21,004,258 |
Land | 22,100,000 | 22,100,000 |
Site Development Costs | 652,952 | 349,703 |
Equipment | 51,284 | 38,482 |
Accumulated Depreciation | -10,907 | -5,779 |
Total Non-Current Assets | 32,793,329 | 43,486,664 |
Total Assets | 33,093,524 | 48,951,444 |
Current liabilities | ' | ' |
Accounts Payable | ' | 187,500 |
Accounts Payable - Related Parties | ' | 698,623 |
Accrued Expenses | 415,396 | 1,082,020 |
Notes Payable | 1,072,059 | 5,844,000 |
Credit line | ' | 788,289 |
Restricted Notes | 1,850,607 | 966,000 |
Aged Debt | 1,538,265 | 617,382 |
Total Current Liabilities | 4,876,327 | 10,183,814 |
Long Term Liabilities | ' | ' |
Capital Lease Obligation | 4,046,122 | 3,635,538 |
Deferred Government Assistance | 18,464,462 | 18,464,462 |
Total Long Term Liabilities | 22,510,584 | 22,100,000 |
Total Liabilities | 27,386,911 | 32,283,814 |
Shareholders' Equity (Deficit) | ' | ' |
Preferred Stock 50,000,000 shares Authorized, and 50,000,000 and 10,000,000 shares Issued and Outstanding respectively | 10,040,000 | 10,000,000 |
Common stock, $0.001 par value, 5,000,000,000 shares authorized and 2,329,050,866 and 109,841,420 shares issued and outstanding, respectively | 2,329,051 | 109,841 |
Additional Paid-In Capital | 10,967,859 | 8,167,131 |
Retained (Deficit) | -17,630,297 | -1,609,342 |
Total Stockholders' Equity | 5,706,613 | 16,667,630 |
Total Liabilities and Stockholders' Equity | $33,093,524 | $48,951,444 |
Balance_Sheets_Parenthetical
Balance Sheets (Parenthetical) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Balance Sheets | ' | ' |
Preferred Stock, Shares Authorized | 50,000,000 | 50,000,000 |
Preferred Stock, Shares Issued | 50,000,000 | 10,000,000 |
Preferred Stock, Shares Outstanding | 50,000,000 | 10,000,000 |
Common Stock, Shares Authorized | 500,000,000,000 | 500,000,000,000 |
Common Stock, Par or Stated Value Per Share | $0.00 | $0.00 |
Common Stock, Shares, Issued | 2,329,050,866 | 109,841,420 |
Common Stock, Shares, Outstanding | 2,329,050,866 | 109,841,420 |
Statements_of_Operations_Unaud
Statements of Operations (Unaudited) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Income Statement | ' | ' | ' | ' |
Revenue | ' | ' | $29,143 | $1,950,000 |
Cost of Sales | ' | ' | ' | ' |
Amortization of Film Costs | 8,623,322 | ' | 8,624,791 | 1,063,269 |
Total Cost of Sales | 8,623,322 | ' | 8,624,791 | 1,063,269 |
Gross Loss | 8,623,322 | ' | 8,595,648 | 886,731 |
Operating Expenses | ' | ' | ' | ' |
Depreciation Expense | 207,856 | 950 | 418,879 | 1,900 |
General and Administrative Expense | 254,014 | 52,674 | 1,221,043 | 157,655 |
Provision for Doubtful Debts | 5,250,774 | ' | 5,250,774 | ' |
Licensing Fees | ' | ' | ' | 2,638 |
Professional Fees | 169,436 | 37,750 | 394,299 | 47,750 |
Total Operating Expenses | 5,882,080 | 91,374 | 7,284,995 | 209,943 |
Other | ' | ' | ' | ' |
Write Off Investment in Subsidiary - Atlas | 126,537 | ' | 126,537 | ' |
Other (Income) / Expense (Net) | 33,455 | 59,558 | 13,775 | 111,885 |
Taxation | ' | -30,000 | ' | 125,216 |
Net Income / (Loss) after Taxation | ($14,655,394) | ($120,923) | ($16,020,955) | $439,687 |
Earnings per share information: | ' | ' | ' | ' |
Net Profit / (Loss) per common share, basic and fully diluted | ($0.01) | ($0.00) | ($0.01) | $0.01 |
Weighted Average number of common stock outstanding, basic and diluted | 2,329,050,866 | 33,856,551 | 2,329,050,866 | 32,265,334 |
Statements_of_Cash_Flows_Unaud
Statements of Cash Flows (Unaudited) (USD $) | 6 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Cash Flows from Operating Activities | ' | ' |
Net Profit / (Loss) | ($16,020,955) | $439,687 |
Adjustments to Reconcile Net Profit / (Loss) to Net Cash used in Operating Activities | ' | ' |
Depreciation Expense | -207,856 | 1,900 |
Amortization of Film Costs | 8,623,322 | 1,063,269 |
Provision for Doubtful Debts | 5,250,774 | ' |
Movement in Assets and Liabilities | ' | ' |
(Increase) in Accounts Receivable | ' | -1,950,000 |
Capitalization of Additions to Film Costs | ' | -57,019 |
(Increase) in Prepayments | -99,164 | ' |
(Decrease) in Accounts Payable | -48,194 | ' |
(Decrease) in Notes Payable | -2,563,733 | -3,000,000 |
Increase / (Decrease) in Accounts Payable - Related Parties | -750,211 | 139,973 |
Increase / (Decrease) in Accrued Expenses | -615,036 | 130,777 |
Increase in Accrued Interest on Loans | ' | 111,885 |
Taxes Payable | 0 | 125,216 |
Net Cash Used in Operating Activities | -6,015,341 | -3,433,999 |
Cash Flows Used In Investing Activities | ' | ' |
Purchase of Fixed Assets | -12,802 | ' |
Net Cash Used In Investing Activities | -316,051 | -94,594 |
Site Development Costs | -303,249 | ' |
Capitalization of Pre Acquisition Costs | ' | -94,594 |
Cash Flows from Financing Activities | ' | ' |
Issuance of Preferred Stock | 40,000 | ' |
Issuance of Common Stock | 5,019,938 | 3,000,000 |
Restricted Notes Borrowing | 884,607 | 141,000 |
Increase in Capital Lease Obligation | 410,584 | ' |
Other borrowings | 132,594 | ' |
Cash Flows Provided by Financing Activities | 6,487,723 | 3,141,000 |
Net increase in cash | 156,331 | ' |
Cash at Beginning of Period | ' | ' |
Cash at End of Period | 156,331 | ' |
Supplemental Disclosure of Non-Cash Activities: | ' | ' |
Debt Converted to Common Stock | 1,538,265 | ' |
Notes Issued for Film Costs | $2,623,926 | ' |
Business_Basis_of_Presentation
Business, Basis of Presentation and Significant Accounting Policies | 6 Months Ended | |
Jun. 30, 2014 | ||
Business, Basis of Presentation and Significant Accounting Policies [Abstract] | ' | |
BUSINESS, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | ' | |
NOTE 1 - BUSINESS, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | ||
Business | ||
Medient Studios, Inc. is a Georgia, U.S. based film production company. In 2013, the Company entered into a lease agreement with the Effingham County Industrial Development Authority (“IDA”) whereby it has beneficial ownership of 1560 acres in Effingham County. The Company plans to construct motion picture studios and other related amenities on the property for film production. These facilities will include sound stages, production and post production offices, editing suites, warehouses, mills and set fabrication facilities. We refer to this fully integrated film production campus as a “Studioplex.” | ||
Basis of Presentation | ||
The Company prepares its financial statements on the accrual basis of accounting. Management believes that all adjustments necessary for a fair presentation of the results of the three and six months ended June 30, 2014 and 2013 respectively have been made. The Company currently has one subsidiary, Atlas International Film, GmbH (“Atlas”) that it acquired in January, 2014. The financial statements of Atlas were consolidated with the Company’s financial statements for the three months ended March 31, 2014. This included primarily goodwill (preliminary allocation pending valuation of other assets, primarily a film library) and debt that was a legal obligation of Atlas. | ||
On July 7, 2014, the Company was advised that on July 4, 2014, Atlas filed for insolvency in the Munich District Court in Germany. Under the terms of the Sale and Purchase Agreement with Medient, the holder of the senior debt in Atlas is able to foreclose on the assets of Atlas as collateral. In addition, the previous shareholders of Atlas have the ability to buy back the shares of Atlas that the Company acquired of Atlas for $1. Management believes that there is no asset value accruing to the Company, and nor is there an ongoing obligation to settle any of Atlas’ debt. As Atlas has filed for insolvency, the Company no longer controls the ownership of Atlas or the assets and liabilities of Atlas. In view of this, management believes that it is appropriate to report only the results for Medient and not to consolidate the results or assets and liabilities of Atlas. | ||
In addition, the Company has written off its loans to Atlas in the amount of $126,537 as of July 7, 2014. | ||
Significant Accounting Policies | ||
The Company’s management selects accounting principles generally accepted in the United States of America and adopts methods for their application. The application of accounting principles requires the estimating, matching and timing of revenue and expense. It is also necessary for management to determine, measure and allocate resources and obligations within the financial process according to those principles. The accounting policies used conform to generally accepted accounting principles which have been consistently applied in the preparation of these financial statements. | ||
The financial statements and notes are representations of the Company’s management that is responsible for their integrity and objectivity. Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company's system of internal accounting control is designed to assure, among other items, that 1) recorded transactions are valid; 2) valid transactions are recorded; and 3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods being presented. | ||
Use of Estimates | ||
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities 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 investments with an original maturity of three months or less and money market instruments to be cash equivalents | ||
Film Costs | ||
The Company has acquired the rights to two completed films: Storage 24 and Yellow. Storage 24 was released in Europe in 2012 and in the United States in 2013. The Company is currently reviewing dates for domestic and international release of Yellow. | ||
Film costs include the costs of the film rights that were acquired by the Company plus additional costs incurred prior to release. The films are amortized using the individual film forecast method, and the costs are amortized pro-rata for the current period’s revenue over management’s estimate of ultimate revenue. The Company began amortizing films in the fourth quarter of 2012, when it began to recognize revenue from Storage 24. | ||
Film costs are presented as the lower of amortized cost or estimated fair value. Each film will be reviewed quarterly and if circumstances indicate that the fair value of the film (calculated as the discounted future cash flows from the film) is less than its unamortized cost, then impairment will be recorded. Estimates of future revenue are based on the best information currently available, but do involve uncertainty, and it is possible that reductions in the carrying value of the film assets may be required as a result of changes in circumstances that affect the revenue estimates for the future. | ||
Impairment of Long Lived Assets | ||
The Company evaluates, on a periodic basis, long-lived assets to be held and used for impairment in accordance with the reporting requirements of ASC 360-10, “Accounting for the Impairment or Disposal of Long-Lived Assets”. The evaluation is based on certain impairment indicators, such as the nature of the assets, the future economic benefit of the assets, any historical or future profitability measurements, as well as other external market conditions or factors that may be present. If these impairment indicators are present or other factors exist that indicate that the carrying amount of the asset may not be recoverable, then an estimate of the value of expected future discounted operating cash flows is used to determine whether the asset is recoverable and the amount of any impairment is measured as the difference between the carrying amount of the asset and its estimated fair value. The fair value is estimated using valuation techniques such as market prices for similar assets or future discounted operating cash flows. The Company reviews capitalized film costs for impairment whenever events or changes in circumstances indicate that the carrying amounts of such assets may not be recoverable or at least once per year. As of June 30, 2014, management determined that the Company’s rights in the movies Yellow and Storage 24 were significantly impaired and accordingly has written down the value of the film assets to what management consider the value of expected future discounted operating cash flows expected to be derived from said assets. | ||
Revenue Recognition | ||
The Company recognizes revenue from the sale or licensing arrangement of a film in accordance with ASC 605-15 “Revenue Recognition”. Revenue will be recognized only when all of the following criteria have been met: | ||
· | Persuasive evidence of a sale or licensing arrangement with a customer exists; | |
· | The film is complete and, in accordance with the terms of the arrangement, has been delivered or is available for immediate and unconditional delivery; | |
· | The license period of the arrangement has begun and the customer can begin its exploitation, exhibition, or sale; | |
· | The arrangement fee is fixed or determinable; | |
· | Collection of the arrangement fee is reasonably assured; and | |
· | A written contract with a distributor indicating the film name, territory and period is required for the recognition of revenue. | |
Revenue is recognized when the performance criteria in the contracts have been met. | ||
In the case of Storage 24, various rights were sold for $2,065,500 in 2013. Filings since the date of the sale of those rights adhered to the criteria noted above. However, the recipient of those rights was unable to “on-sell” said rights having now participated in an entire cycle of major film markets, and was therefore unable to settle the accounts receivable with the Company. Accordingly, the Company on July 7, 2014 formally terminated the Rights Acquisition Agreement and the rights therein were returned to the Company. The accounts receivable in the amount of $2,065.500 was written off as a bad debt during the three months ended June 30, 2014. | ||
Film Tax Relief Revenue | ||
Many countries make tax credits and other incentives available to encourage film production in their country. The Company benefits from the United Kingdom Film Tax Relief (“FTR”). The FTR may be treated as a reduction in the capitalized costs of the film assets financed or as revenue to the production company. The FTR has been earned by the production company, assigned to the previous film rights owner, Medient Unstoppable Limited (“MUL”), and then assigned to the Company as revenue. | ||
Medient Unstoppable Limited Revenue | ||
Receivables are due to the Company from a related party, MUL, in the amount of the net proceeds from the FTR, as well as income from sales of rights in Storage 24. MUL is an entity in which the Company’s co-founder is a director. In accordance with an intercompany agreement between the Company and MUL, all revenues earned by MUL for the movie Storage 24 are due to the Company. This includes FTR. | ||
MUL has not as of June 30, 2014 made payment to the Company, and therefore management has instructed litigation counsel to prepare a demand letter to recover the FTR and any other funds from MUL and related parties. These receivables (including FTR - see above under Film Tax Relief Revenue) previously anticipated to be receivable from MUL, are now, in management’s opinion, doubtful, and accordingly, as at June 30, 2014 the full amount of the accounts receivable - related party, in the amount of $3,355,246 has been reserved for. | ||
Earnings per Share | ||
Earnings per share (basic) is calculated by dividing the net income (loss) by the weighted average number of common shares outstanding for the period covered. As the Company incurred a net loss during the three and six months ended June 30, 2014 and for the three and six months ended June 30, 2013 the basic and diluted loss per common share is the same amount, as any common stock equivalents would be considered anti-dilutive. | ||
Comprehensive Income | ||
ASC 220 establishes standards for reporting and display of comprehensive income and its components in a full set of general purpose financial statements. For the three and six months ended June 30, 2014 and 2013, the Company had no items of other comprehensive income. Therefore, the net loss equals the comprehensive loss for the three months then ended. | ||
Income Taxes | ||
Provision for income taxes represents actual or estimated amounts payable on tax return filings each year. Deferred tax assets and liabilities are recorded for the estimated future tax effects of temporary differences between the tax basis of assets and liabilities and amounts reported in the accompanying balance sheets, and for operating loss and tax credit carry forwards. The change in deferred tax assets and liabilities for the period measures the deferred tax provision or benefit for the period. Effects of changes in enacted tax laws on deferred tax assets and liabilities are reflected as adjustment to the tax provision or benefit in the period of enactment. | ||
Fair Value of Financial Instruments | ||
In accordance with the reporting requirements of ASC 820, the Company calculates the fair value of its assets and liabilities which qualify as financial instruments under this statement and includes this additional information in the notes to the financial statements when the fair value is different than the carrying value of those financial instruments. At June 30, 2014, the Company did not have any financial instruments. | ||
Emerging Growth Company Critical Accounting Policy Disclosure | ||
The Company qualifies as an “emerging growth company” under the 2012 JOBS Act. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, for complying with new or revised accounting standards. As an emerging growth company, the Company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company may elect to take advantage of the benefits of this extended transition period in the future. | ||
Recent Accounting Pronouncements | ||
There were various accounting standards and interpretations issued during the six months ended June 30, 2014, none of which are expected to have a material impact on the Company's financial position, operations or cash flows. |
Capital_Lease_and_Government_A
Capital Lease and Government Assistance | 6 Months Ended | ||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||
Capital Lease And Government Assistance [Abstract] | ' | ||||||||||||||||||
CAPITAL LEASE AND GOVERNMENT ASSISTANCE | ' | ||||||||||||||||||
NOTE 2 - CAPITAL LEASE AND GOVERNMENT ASSISTANCE | |||||||||||||||||||
On August 21, 2013, the Company entered into a lease agreement (“Lease”) with the Effingham County Industrial Development Authority (the “IDA”). Under the Lease, the Company leased approximately 1,560 acres of land located primarily within Effingham County, Georgia. The Lease is effective from August 21, 2013 through July 1, 2033. No interest is payable and no payments are due for the first two years, with the total rent of $10 million being paid in 18 equal annual installments, commencing February 28, 2016. The Company is obligated to pay additional rent if it does not achieve the specified goals of $90 million in investment and 1,000 jobs on or before the end of year 5 (five). At the end of the Lease, the Company has the option to purchase the Property for $100. Furthermore, the State of Georgia and the IDA are providing additional cash grants, rebates, and tax incentives for the planned Studioplex. The Lease has been accounted for as a capital lease and the net present value of the minimum lease payments under the Lease is $3.6 million. | |||||||||||||||||||
The Company obtained an independent third party appraisal on the land leased by the Company, which indicated that the land has a fair market value of $22.1 million. The difference between the net present values of the minimum lease payments and the fair market value of the land is considered the value of the government assistance under the Lease. | |||||||||||||||||||
The $18.5 million of government assistance has been deferred on the accompanying balance sheet until such time as the Company’s obligations under the Lease have been fulfilled. During the course of the Lease, the Company has beneficial ownership of the land and can utilize the land as collateral for financing purposes. The Company incurred approximately $303,249 and $0 of site development costs on the land in the six months ended June 30, 2014 and 2013, respectively. | |||||||||||||||||||
The discounted rate used in calculating the present value of the minimum lease payment was 10.72%, which represented the Company’s incremental borrowing rate as at August, 2013. | |||||||||||||||||||
A discount accretion of $410,584 and $0 has been recorded in the six months ended June 30, 2014 and 2013 respectively relative to the present value of the minimum lease payments. | |||||||||||||||||||
Future interest and principal payments under the Lease are as follows: | |||||||||||||||||||
For Period Ended | Interest | Principal | Total Payment | Balance | |||||||||||||||
2014 | $ | 4,158,082 | |||||||||||||||||
2015 | 4,622,217 | ||||||||||||||||||
2016 | $ | 465,478 | $ | 90,078 | $ | 555,556 | 4,532,141 | ||||||||||||
2017 | 455,410 | 100,146 | 555,556 | 4,431,994 | |||||||||||||||
2018 | 444,213 | 111,343 | 555,556 | 4,320,651 | |||||||||||||||
Thereafter | $ | 5,034,899 | $ | 3,298,433 | $ | 8,333,332 | $ | 0 |
Acquisition_of_Atlas_Internati
Acquisition of Atlas International Film Gmbh | 6 Months Ended |
Jun. 30, 2014 | |
Acquisition of Atlas International Film GMBH [Abstract] | ' |
ACQUISITION OF ATLAS INTERNATIONAL FILM GMBH | ' |
NOTE 3 – ACQUISITION OF ATLAS INTERNATIONAL FILM GMBH | |
In January 2014, the Company completed the acquisition of Atlas. Under the Sale and Purchase Agreement, the Company purchased 100% of the issued and paid up capital of Euro 100,000 for $50,000, payable by issuing 5,000,000 common shares of the Company at $0.001 per share. | |
Atlas had been consolidated as of March 31, 2014 and its results of operations were recorded subsequent to the date of acquisition. The Company had temporarily recorded the excess purchase price as goodwill as of March 31, 2014. The Company was to undertake a third party appraisal of Atlas’ film library as soon as practicable and believed that most of the goodwill would be allocated to the film library at that time. | |
On July 7, 2014, the Company was advised that Atlas had filed for insolvency in the Munich District Court in Germany on July 4, 2014. The filing for insolvency indicates that the Company no longer has control of Atlas, its stock, assets and liabilities, and therefore is no longer consolidating Atlas as of June 30, 2014. | |
Up to and including the three months ended June 30, 2014, the Company advanced $126,537 to Atlas to support its operating overheads. This amount has been written off in the three months ended June 30, 2014 as irrecoverable from Atlas. |
Material_Agreements
Material Agreements | 6 Months Ended |
Jun. 30, 2014 | |
Material Agreement [Abstract] | ' |
MATERIAL AGREEMENTS | ' |
NOTE 4 – MATERIAL AGREEMENTS | |
The Company was assigned agreements with Universal Pictures Visual Programming Limited (“Universal”) to distribute the film Storage 24 for a period of 25 years commencing on the date of the firm release of the film through any media by Universal. The territories covered by this agreement are the United Kingdom and Eire, Australasia (as defined), Germany, Austria, and German speaking Switzerland and Benelux (consisting of Belgium, Netherlands and Luxembourg). The agreement outlines the royalty payments, which vary based on the type of distribution (internet streaming, free television, pay television, e.t.c.) and range from 20% to 50% of net receipts. Other distribution agreements with similar terms have been entered into for other territories, including the United States and other international territories, for Storage 24. The Company is owed approximately $3.4 million under this agreement. The Company has been unable to collect these receivables under the agreement and has instructed its litigation counsel to take legal action to collect them. The receivables have been fully reserved as of June 30, 2014. | |
The Company had sold the rights for the development, production and exploitation of any prequel, sequel or remake film(s) of the Storage 24, together with such rights required for the inclusion of the Monster in film(s) for approximately $2.1 million. As a result of non-payment by the purchaser, the Company was forced to terminate the rights agreement with the rights included therein having been transferred back to the Company. The amount of accounts receivable of $2,065,500 has been treated as a bad debt and provided for as a doubtful debt in full. | |
As of March 20, 2014 the Company contracted with Shore Development & Construction, LLC to act as general contractor for the building of the Company’s planned Studioplex in Effingham, Georgia. | |
On June 26, 2014 the Company engaged Foley Design Associates Architects, Inc. for services including architectural design, interior design, engineering and land planning for the first phase of the production facilities on the Studioplex site in Effingham, Georgia. | |
Since a management realignment in June 2014, management has significantly modified its design plans for the Studioplex, concentrating on the construction of the initial sound stages, production and post production offices in a phased construction plan so that movie production can begin as soon as reasonably possible. Further phases of construction will commence in a strategic phased approach. |
Film_Costs
Film Costs | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Film Costs [Abstract] | ' | ||||||||
FILM COSTS | ' | ||||||||
NOTE 5 – FILM COSTS | |||||||||
The Company had acquired the rights to two completed films: Storage 24 and Yellow. | |||||||||
Storage 24 was released in Europe in 2012 in the United States in 2013. The residual value of Storage 24 was $1,771,880 as of March 31, 2014. Given the subsequent termination of the sale of rights agreement and the consequent writing down of the accounts receivable, management does not consider that Storage 24 will now generate further significant revenues and has, therefore, has written down the residual value of Storage 24 to $0 in the three months ended June 31, 2014, | |||||||||
The Company is currently reviewing domestic and international release dates for Yellow. | |||||||||
Previous impairment analyses had indicated a prints and advertising (“P&A”) spend of $20 million to release the movie in the US. Such a level of P&A spend should have generated sufficient revenues (when added to the expected revenues from the foreign market) to recover the costs of Yellowin full. At that time management was of the opinion that the $20 million would be able to be raised to support the film’s release. | |||||||||
Since that time, the SEC temporarily suspended trading in the Company’s stock, making it more difficult to raise the required $20 million for P&A. Monies raised from the public markets are now being utilized to support corporate overheads, pre-production of future films, and the build of the Studioplex. | |||||||||
Accordingly, given this change of circumstance, management no longer believes that a “wide” release of the film is likely or realistic, and its performance and therefore generation of revenues will be reduced accordingly. | |||||||||
Under its current impairment analysis, management concluded that the fair value of Yellow is $10,000,000, and has written the cost of the film to this amount in the three months ended June 30, 2014. This resulted in an impairment charge of $5,343,221 in the quarter. | |||||||||
A number of other films were being developed by the Company. Management believes that these films are now unlikely to be produced or exploited and have written their cost of $206,421 down to $0 in the three months ended June 30, 2014. | |||||||||
The Company had filmed a documentary in India with it’s initial preproduction costs of $50,300 paid by the Company in the three months ended March 31, 2014. The Company considers these costs irrecoverable, and has therefore written these costs down to $0 in the three months ended June 30, 2014. The Company has issued a demand for the return of the funds or return of the documentary footage. | |||||||||
No further costs have been incurred in respect of Film Costs in the three months ended June 30, 2014. | |||||||||
The following presents the cost basis of each of the Company’s films: | |||||||||
June 30 | December 31 | ||||||||
2014 | 2013 | ||||||||
Yellow | $ | 15,343,221 | $ | 14,653,173 | |||||
Storage 24 | 5,500,000 | 5,500,000 | |||||||
Films in Development | 358,721 | 34,000 | |||||||
Film Costs, Prior to Amortization | $ | 21,201,942 | $ | 20,187,173 | |||||
Less: Accumulated Amortization | 11,201,942 | 2,658,647 | |||||||
Total Film Costs (net) | $ | 10,000,000 | $ | 17,528,526 | |||||
Film costs include the unamortized costs of the film rights that were acquired by the Company in addition to film costs incurred by the Company. The films are amortized using the individual film forecast method, and the costs are amortized pro-rata for the current period’s revenue over management’s estimate of ultimate revenue. | |||||||||
Film costs are presented as the lower of amortized cost or estimated fair value. Each film will be reviewed quarterly and if circumstances indicate that the fair value of the film (calculated as the discounted future cash flows from the film) is less than its unamortized cost, then impairment will be recorded. Estimates of future revenue are based on the best information currently available, but do involve uncertainty, and it is possible that reductions in the carrying value of the film assets may be required as a result of changes in circumstances that affect the revenue estimates for the future. | |||||||||
The Company evaluates, on a periodic basis, long-lived assets to be held and used for impairment in accordance with the reporting requirements of ASC 360-10, “Accounting for the Impairment or Disposal of Long-Lived Assets”. The evaluation is based on certain impairment indicators, such as the nature of the assets, the future economic benefit of the assets, any historical or future profitability measurements, as well as other external market conditions or factors that may be present. If these impairment indicators are present or other factors exist that indicate that the carrying amount of the asset may not be recoverable, then an estimate of the value of expected future operating cash flows is used to determine whether the asset is recoverable and the amount of any impairment is measured as the difference between the carrying amount of the asset and its estimated fair value. The fair value is estimated using valuation techniques such as market prices for similar assets or future operating cash flows. | |||||||||
As of June 30, 2014, management determined that both major assets Storage 24 and Yellow were significantly impaired and accordingly has written down the value of the film assets to $0 for Storage 24 and $10,000,000 for Yellow, which represents what management considers the value of expected future discounted operating cash flows expected to be derived from these assets. | |||||||||
In addition, the Company had previously been charged with various further costs in the amount of $2,500,000 in respect of Yellow and pre-vizualization costs of $1,264,000 in connection with two further productions - Production 16 and Production 17. These charges have been withdrawn as of the three months ended June 30, 2014. | |||||||||
Because Atlas has filed for insolvency (as at July 4, 2014), the Company no longer has control of Atlas or its assets. As a result Atlas’ film assets will not be consolidated with the Company’s film assets. |
Notes_Payable
Notes Payable | 6 Months Ended | ||||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||||
Notes Payable [Abstract] | ' | ||||||||||||||||||||||
NOTES PAYABLE | ' | ||||||||||||||||||||||
NOTE 6 – NOTES PAYABLE | |||||||||||||||||||||||
The following presents the notes payable outstanding as of June 30, 2014. | |||||||||||||||||||||||
30-Jun-14 | |||||||||||||||||||||||
Lender | Date of | Due Date | Original | Principal | Balance | Film | |||||||||||||||||
Loan | Principal | Balance | with Accrued | ||||||||||||||||||||
Amount | Only | Interest | |||||||||||||||||||||
Tommee May | 5/18/11 | Post Release | 180,000 | 180,000 | 180,000 | Yellow | |||||||||||||||||
AMAG | 9/13/11 | 8/31/12 | 1,000,000 | 92,268 | 292,059 | Yellow | |||||||||||||||||
Derreck Lee | 5/1/11 | Post Release | 500,000 | 600,000 | 600,000 | Yellow | |||||||||||||||||
$ | 872,268 | $ | 1,072,059 | ||||||||||||||||||||
Tommee May, a media investor, made a loan of $180,000 towards the production cost of the film Yellow. This liability was assumed by the Company upon the acquisition of the rights in Yellow as of October 18, 2012. No interest is payable. | |||||||||||||||||||||||
AMAG, Inc., a media investment company made a loan of $1,000,000 to the Company, which has accumulated $199,791 of interest, towards the production cost of the film Yellow. This liability was assumed by the Company upon the acquisition of the rights in Yellow as of October 18, 2012 and is due $292,059 (including interest). Interest is accruing at a penalty rate of 18%. In addition to repayment of principal and interest, AMAG shall receive a three percent profit participation in Yellow. The Company is in the process of negotiating an extension of the maturity date. During the three months ended June 30, 2014, $792,024 has been repaid. | |||||||||||||||||||||||
Derreck Lee, a media investor made a loan of $500,000 to the Company, which has accumulated $100,000 of interest, towards the production cost of the film Yellow. In addition to repayment of principal and interest, Mr. Lee shall receive profit participation in the film after all other debts and equity investors in the film are paid in full. This liability was assumed by the Company upon the acquisition of the rights in Yellow as of October 18, 2012. No interest is current payable. | |||||||||||||||||||||||
As of June 30, 2014, it cannot be reasonably estimated as to how much, if any, may be paid out as profit participation under these agreements and therefore, nothing (other than interest where applicable) has been accrued. | |||||||||||||||||||||||
Credit_Line
Credit Line | 6 Months Ended |
Jun. 30, 2014 | |
Credit Line [Abstract] | ' |
CREDIT LINE | ' |
NOTE 7 - CREDIT LINE | |
As of June 30, 2014, the Company’s credit line, in the amount of $806,506 (which includes $600,000 that was drawn down, interest and other costs) was repaid in full on May 13, 2014. The Company has no other outstanding liabilities on any credit facilities. |
Restricted_Notes
Restricted Notes | 6 Months Ended | ||
Jun. 30, 2014 | |||
Restricted Notes [Abstract] | ' | ||
RESTRICTED NOTES | ' | ||
NOTE 8 – RESTRICTED NOTES | |||
During the three months ended June 30, 2014, the Company issued $1,301,700 of Convertible Notes. Of these Restricted Notes $1,256,432 were converted to common stock during the period. The balance of Restricted Notes as at June 30, 2014 was $1,850,607. | |||
The Restricted Notes typically mature in six to 12 months, and carry an interest charge of between 0% and 12% per annum. Penalty interest is typically 18% per annum and repayment is typically at 150% of face value. | |||
The Restricted Notes usually have conversion rights that typically are priced as follows: | |||
i) | Fixed price | ||
ii) | At a discount calculated over a period of time (ordinarily 5-10 days) prior to the date of conversion. Discounts typically range from 37% to 45%. | ||
iii) | An option of either a fixed price or discount. | ||
Accrued Interest as of June 30, 2014 on the Restricted Notes was $0 as industry practice indicates no interest is charged on conversion. |
Aged_Debt
Aged Debt | 6 Months Ended | ||
Jun. 30, 2014 | |||
Aged Debt [Abstract] | ' | ||
AGED DEBT | ' | ||
NOTE 9 – AGED DEBT | |||
During the three months to June 30, 2014, the Company retired debt with the use of Aged Debt in the amount of $2,737,770. Of the total Aged Debt, $1,475,964 was converted to common stock during the period, with a balance outstanding of $1,538,265 as at June 30, 2014. | |||
The Aged Debt typically matures in six to 12 months, and carry an interest charge of between 0% and 12% per annum. Penalty interest is typically 18% per annum and repayment is typically at 150% of face value. | |||
The Aged Debt usually has conversion rights that typically are priced as follows: | |||
i) | Fixed price | ||
ii) | At a discount calculated over a period of time (ordinarily 5-10 days) prior to the date of conversion. Discounts typically range from 37% to 45%. | ||
iii) | An option of either a fixed price or discount | ||
Interest Accrued on Aged Debt as of June 30, 2014 was $0 as industry practice indicates no interest is charged on conversion. |
Screen_Actors_Guild
Screen Actors Guild | 6 Months Ended |
Jun. 30, 2014 | |
Screen Actors Guild [Abstract] | ' |
SCREEN ACTORS GUILD | ' |
NOTE 10 – SCREEN ACTORS GUILD | |
During the year ended December 31, 2013, the Company assumed a debt due to the Screen Actors Guild (“SAG”) regarding the film, Yellow, in the amount of $311,244 of which $269,244 was outstanding at December 31, 2013. The Company repaid the full $269,244 of the debt in the three months ended March 31, 2014. | |
The Company also has a deposit held by SAG in the amount of $70,000 as at March 31, 2013. During the three months ended June 30, 2014, some $30,000 was agreed to be released to SAG in satisfaction of further debts re Yellow. |
Stockholders_Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2014 | |
Stockholders' Equity [Abstract] | ' |
STOCKHOLDERS' EQUITY | ' |
NOTE 11 - STOCKHOLDERS' EQUITY | |
The authorized capital stock of the Company is 5,000,000,000 shares with a $0.001 par value. At June 30, 2014 and 2013, the Company had 2,329,050,866 and 33,856,551 shares of its common stock issued and outstanding respectively. The Company has 50,000,000 Series A preferred shares authorized and 50,000,000 and 10,000,000 Series A preferred shares issued and outstanding as at June 30, 2014 and June 30, 2013 respectively. | |
During the three months ended June 30, 2014 and 2013, the Company issued 2,001,167,212 and zero, common stock respectively. During the three months ended June 30, 2014 and 2013 the Company issued 40,000,000 shares of preferred stock and zero shares of Series A preferred stock respectively. |
Income_Taxes
Income Taxes | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Income Taxes [Abstract] | ' | ||||||||
INCOME TAXES | ' | ||||||||
NOTE 12- INCOME TAXES | |||||||||
The Company has adopted ASC 740-10 that requires the use of the liability method in the computation of income tax expense and the current and deferred income taxes payable (deferred tax liability) or benefit (deferred tax asset). Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. | |||||||||
The cumulative tax effect at the expected tax rate of 20% of significant items comprising the Company’s net deferred tax amounts as of June 30, 2014 and December 31, 2013 are as follows: | |||||||||
Prior Year | $ | 321,869 | $ | 48,543 | |||||
Tax Benefit for Period | 3,204,191 | 273,326 | |||||||
Total Deferred Tax Asset | 3,526,060 | 321,869 | |||||||
Less: Valuation Allowance | (3,526,060 | ) | (321,869 | ) | |||||
Net Deferred Tax Asset | $ | 0 | $ | 0 | |||||
At June 30, 2014 and at December 31, 2013, the Company had net deferred tax assets of $0 for federal income tax purposes. These assets, if not utilized to offset taxable income, will begin to expire in 2028. |
Employee_Benefit_Plans
Employee Benefit Plans | 6 Months Ended |
Jun. 30, 2014 | |
Employee Benefit Plans [Abstract] | ' |
EMPLOYEE BENEFIT PLANS | ' |
NOTE 13 – EMPLOYEE BENEFIT PLANS | |
During the three months ended June 30, 2014 and 2013, there were no qualified or non-qualified employee pension, profit sharing, stock option, or other plans authorized for any class of employees. |
Accounts_Payable_Related_Parti
Accounts Payable - Related Parties | 6 Months Ended |
Jun. 30, 2014 | |
Accounts Payable - Related Parties [Abstract] | ' |
ACCOUNTS PAYABLE - RELATED PARTIES | ' |
NOTE 14 - ACCOUNTS PAYABLE - RELATED PARTIES | |
Our former Chief Executive Officer, Manu. Kumaran had previously advanced the Company various monies for operating expenses. The amount due to related parties at June 30, 2013 was $626,878. |
Commitments_and_Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2014 | |
Commitments and Contingencies [Abstract] | ' |
COMMITMENTS AND CONTINGENCIES | ' |
NOTE 15 - COMMITMENTS AND CONTINGENCIES | |
As presented in Note 6, the Company has entered into participation agreements in which the Company will pay the participation holders a portion of the proceeds from films after all debt has been repaid. As of June 30, 2014, it cannot be reasonably estimated as to how much, if any, may be paid out under these agreements, and therefore, no interest has been accrued. |
Subsequent_Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2014 | |
Subsequent Events [Abstract] | ' |
SUBSEQUENT EVENTS | ' |
NOTE 16 - SUBSEQUENT EVENTS | |
Effective July 7, 2014 the Company terminated the Rights Acquisition Agreement (“RAA”) dated March 25, 2013 and the Extension to the Rights Acquisition Agreement dated August 5, 2013 between the Company and Stealth Media Group Limited (“SMG”) pursuant to which the Company agreed to sell certain rights in the motion picture Storage 24 to SMG. Under the RAA Euro 1,500,000 was to be paid to the Company on or before July 23, 2013 that was subsequently extended to October 31, 2013. SMG was unable to sell the rights as originally contracted and failed to pay the required payment under the RAA. As a result the Company terminated the RAA and all rights that were to be transferred to SMG reverted to the Company in full. | |
There are no material early termination penalties incurred by the Company in the termination of the RAA. | |
On July 7, 2014 the Company was advised that its wholly owned subsidiary, Atlas had filed for insolvency with the Munich District Court on July 4, 2014. The acquisition of Atlas by the Company was completed in January, 2014. |
Business_Basis_of_Presentation1
Business, Basis of Presentation and Significant Accounting Policies (Policies) | 6 Months Ended | |
Jun. 30, 2014 | ||
Business, Basis of Presentation and Significant Accounting Policies [Abstract] | ' | |
Basis of Presentation | ' | |
Basis of Presentation | ||
The Company prepares its financial statements on the accrual basis of accounting. Management believes that all adjustments necessary for a fair presentation of the results of the three and six months ended June 30, 2014 and 2013 respectively have been made. The Company currently has one subsidiary, Atlas International Film, GmbH (“Atlas”) that it acquired in January, 2014. The financial statements of Atlas were consolidated with the Company’s financial statements for the three months ended March 31, 2014. This included primarily goodwill (preliminary allocation pending valuation of other assets, primarily a film library) and debt that was a legal obligation of Atlas. | ||
On July 7, 2014, the Company was advised that on July 4, 2014, Atlas filed for insolvency in the Munich District Court in Germany. Under the terms of the Sale and Purchase Agreement with Medient, the holder of the senior debt in Atlas is able to foreclose on the assets of Atlas as collateral. In addition, the previous shareholders of Atlas have the ability to buy back the shares of Atlas that the Company acquired of Atlas for $1. Management believes that there is no asset value accruing to the Company, and nor is there an ongoing obligation to settle any of Atlas’ debt. As Atlas has filed for insolvency, the Company no longer controls the ownership of Atlas or the assets and liabilities of Atlas. In view of this, management believes that it is appropriate to report only the results for Medient and not to consolidate the results or assets and liabilities of Atlas. | ||
In addition, the Company has written off its loans to Atlas in the amount of $126,537 as of July 7, 2014. | ||
Significant Accounting Policies | ' | |
Significant Accounting Policies | ||
The Company’s management selects accounting principles generally accepted in the United States of America and adopts methods for their application. The application of accounting principles requires the estimating, matching and timing of revenue and expense. It is also necessary for management to determine, measure and allocate resources and obligations within the financial process according to those principles. The accounting policies used conform to generally accepted accounting principles which have been consistently applied in the preparation of these financial statements. | ||
The financial statements and notes are representations of the Company’s management that is responsible for their integrity and objectivity. Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company's system of internal accounting control is designed to assure, among other items, that 1) recorded transactions are valid; 2) valid transactions are recorded; and 3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods being presented. | ||
Use of Estimates | ' | |
Use of Estimates | ||
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities 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 | ' | |
Cash and Cash Equivalents | ||
The Company considers all highly liquid investments with an original maturity of three months or less and money market instruments to be cash equivalents | ||
Film Costs | ' | |
Film Costs | ||
The Company has acquired the rights to two completed films: Storage 24 and Yellow. Storage 24 was released in Europe in 2012 and in the United States in 2013. The Company is currently reviewing dates for domestic and international release of Yellow. | ||
Film costs include the costs of the film rights that were acquired by the Company plus additional costs incurred prior to release. The films are amortized using the individual film forecast method, and the costs are amortized pro-rata for the current period’s revenue over management’s estimate of ultimate revenue. The Company began amortizing films in the fourth quarter of 2012, when it began to recognize revenue from Storage 24. | ||
Film costs are presented as the lower of amortized cost or estimated fair value. Each film will be reviewed quarterly and if circumstances indicate that the fair value of the film (calculated as the discounted future cash flows from the film) is less than its unamortized cost, then impairment will be recorded. Estimates of future revenue are based on the best information currently available, but do involve uncertainty, and it is possible that reductions in the carrying value of the film assets may be required as a result of changes in circumstances that affect the revenue estimates for the future. | ||
Impairment of Long Lived Assets | ' | |
Impairment of Long Lived Assets | ||
The Company evaluates, on a periodic basis, long-lived assets to be held and used for impairment in accordance with the reporting requirements of ASC 360-10, “Accounting for the Impairment or Disposal of Long-Lived Assets”. The evaluation is based on certain impairment indicators, such as the nature of the assets, the future economic benefit of the assets, any historical or future profitability measurements, as well as other external market conditions or factors that may be present. If these impairment indicators are present or other factors exist that indicate that the carrying amount of the asset may not be recoverable, then an estimate of the value of expected future discounted operating cash flows is used to determine whether the asset is recoverable and the amount of any impairment is measured as the difference between the carrying amount of the asset and its estimated fair value. The fair value is estimated using valuation techniques such as market prices for similar assets or future discounted operating cash flows. The Company reviews capitalized film costs for impairment whenever events or changes in circumstances indicate that the carrying amounts of such assets may not be recoverable or at least once per year. As of June 30, 2014, management determined that the Company’s rights in the movies Yellow and Storage 24 were significantly impaired and accordingly has written down the value of the film assets to what management consider the value of expected future discounted operating cash flows expected to be derived from said assets. | ||
Revenue Recognition | ' | |
Revenue Recognition | ||
The Company recognizes revenue from the sale or licensing arrangement of a film in accordance with ASC 605-15 “Revenue Recognition”. Revenue will be recognized only when all of the following criteria have been met: | ||
· | Persuasive evidence of a sale or licensing arrangement with a customer exists; | |
· | The film is complete and, in accordance with the terms of the arrangement, has been delivered or is available for immediate and unconditional delivery; | |
· | The license period of the arrangement has begun and the customer can begin its exploitation, exhibition, or sale; | |
· | The arrangement fee is fixed or determinable; | |
· | Collection of the arrangement fee is reasonably assured; and | |
· | A written contract with a distributor indicating the film name, territory and period is required for the recognition of revenue. | |
Revenue is recognized when the performance criteria in the contracts have been met. | ||
In the case of Storage 24, various rights were sold for $2,065,500 in 2013. Filings since the date of the sale of those rights adhered to the criteria noted above. However, the recipient of those rights was unable to “on-sell” said rights having now participated in an entire cycle of major film markets, and was therefore unable to settle the accounts receivable with the Company. Accordingly, the Company on July 7, 2014 formally terminated the Rights Acquisition Agreement and the rights therein were returned to the Company. The accounts receivable in the amount of $2,065.500 was written off as a bad debt during the three months ended June 30, 2014. | ||
Film Tax Relief Revenue | ||
Many countries make tax credits and other incentives available to encourage film production in their country. The Company benefits from the United Kingdom Film Tax Relief (“FTR”). The FTR may be treated as a reduction in the capitalized costs of the film assets financed or as revenue to the production company. The FTR has been earned by the production company, assigned to the previous film rights owner, Medient Unstoppable Limited (“MUL”), and then assigned to the Company as revenue. | ||
Medient Unstoppable Limited Revenue | ||
Receivables are due to the Company from a related party, MUL, in the amount of the net proceeds from the FTR, as well as income from sales of rights in Storage 24. MUL is an entity in which the Company’s co-founder is a director. In accordance with an intercompany agreement between the Company and MUL, all revenues earned by MUL for the movie Storage 24 are due to the Company. This includes FTR. | ||
MUL has not as of June 30, 2014 made payment to the Company, and therefore management has instructed litigation counsel to prepare a demand letter to recover the FTR and any other funds from MUL and related parties. These receivables (including FTR - see above under Film Tax Relief Revenue) previously anticipated to be receivable from MUL, are now, in management’s opinion, doubtful, and accordingly, as at June 30, 2014 the full amount of the accounts receivable - related party, in the amount of $3,355,246 has been reserved for. | ||
Earnings per Share | ' | |
Earnings per Share | ||
Earnings per share (basic) is calculated by dividing the net income (loss) by the weighted average number of common shares outstanding for the period covered. As the Company incurred a net loss during the three and six months ended June 30, 2014 and for the three and six months ended June 30, 2013 the basic and diluted loss per common share is the same amount, as any common stock equivalents would be considered anti-dilutive. | ||
Comprehensive Income | ' | |
Comprehensive Income | ||
ASC 220 establishes standards for reporting and display of comprehensive income and its components in a full set of general purpose financial statements. For the three and six months ended June 30, 2014 and 2013, the Company had no items of other comprehensive income. Therefore, the net loss equals the comprehensive loss for the three months then ended. | ||
Income Taxes | ' | |
Income Taxes | ||
Provision for income taxes represents actual or estimated amounts payable on tax return filings each year. Deferred tax assets and liabilities are recorded for the estimated future tax effects of temporary differences between the tax basis of assets and liabilities and amounts reported in the accompanying balance sheets, and for operating loss and tax credit carry forwards. The change in deferred tax assets and liabilities for the period measures the deferred tax provision or benefit for the period. Effects of changes in enacted tax laws on deferred tax assets and liabilities are reflected as adjustment to the tax provision or benefit in the period of enactment. | ||
Fair Value of Financial Instruments | ' | |
Fair Value of Financial Instruments | ||
In accordance with the reporting requirements of ASC 820, the Company calculates the fair value of its assets and liabilities which qualify as financial instruments under this statement and includes this additional information in the notes to the financial statements when the fair value is different than the carrying value of those financial instruments. At June 30, 2014, the Company did not have any financial instruments. | ||
Emerging Growth Company Critical Accounting Policy Disclosure | ' | |
Emerging Growth Company Critical Accounting Policy Disclosure | ||
The Company qualifies as an “emerging growth company” under the 2012 JOBS Act. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, for complying with new or revised accounting standards. As an emerging growth company, the Company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company may elect to take advantage of the benefits of this extended transition period in the future. | ||
Recent Accounting Pronouncements | ' | |
Recent Accounting Pronouncements | ||
There were various accounting standards and interpretations issued during the six months ended June 30, 2014, none of which are expected to have a material impact on the Company's financial position, operations or cash flows. |
Capital_Lease_and_Government_A1
Capital Lease and Government Assistance (Tables) | 6 Months Ended | ||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||
Capital Lease And Government Assistance [Abstract] | ' | ||||||||||||||||||
Schedule of future interest and principal payments | ' | ||||||||||||||||||
For Period Ended | Interest | Principal | Total Payment | Balance | |||||||||||||||
2014 | $ | 4,158,082 | |||||||||||||||||
2015 | 4,622,217 | ||||||||||||||||||
2016 | $ | 465,478 | $ | 90,078 | $ | 555,556 | 4,532,141 | ||||||||||||
2017 | 455,410 | 100,146 | 555,556 | 4,431,994 | |||||||||||||||
2018 | 444,213 | 111,343 | 555,556 | 4,320,651 | |||||||||||||||
Thereafter | $ | 5,034,899 | $ | 3,298,433 | $ | 8,333,332 | $ | 0 |
Film_Costs_Tables
Film Costs (Tables) | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Film Costs [Abstract] | ' | ||||||||
Summary of presents the cost basis of each of the Company's films | ' | ||||||||
June 30 | December 31 | ||||||||
2014 | 2013 | ||||||||
Yellow | $ | 15,343,221 | $ | 14,653,173 | |||||
Storage 24 | 5,500,000 | 5,500,000 | |||||||
Films in Development | 358,721 | 34,000 | |||||||
Film Costs, Prior to Amortization | $ | 21,201,942 | $ | 20,187,173 | |||||
Less: Accumulated Amortization | 11,201,942 | 2,658,647 | |||||||
Total Film Costs (net) | $ | 10,000,000 | $ | 17,528,526 | |||||
Notes_Payable_Tables
Notes Payable (Tables) | 6 Months Ended | ||||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||||
Notes Payable [Abstract] | ' | ||||||||||||||||||||||
Schedule of notes payable outstanding | ' | ||||||||||||||||||||||
30-Jun-14 | |||||||||||||||||||||||
Lender | Date of | Due Date | Original | Principal | Balance | Film | |||||||||||||||||
Loan | Principal | Balance | with Accrued | ||||||||||||||||||||
Amount | Only | Interest | |||||||||||||||||||||
Tommee May | 5/18/11 | Post Release | 180,000 | 180,000 | 180,000 | Yellow | |||||||||||||||||
AMAG | 9/13/11 | 8/31/12 | 1,000,000 | 92,268 | 292,059 | Yellow | |||||||||||||||||
Derreck Lee | 5/1/11 | Post Release | 500,000 | 600,000 | 600,000 | Yellow | |||||||||||||||||
$ | 872,268 | $ | 1,072,059 | ||||||||||||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Income Taxes [Abstract] | ' | ||||||||
Schedule of net deferred tax amounts | ' | ||||||||
Prior Year | $ | 321,869 | $ | 48,543 | |||||
Tax Benefit for Period | 3,204,191 | 273,326 | |||||||
Total Deferred Tax Asset | 3,526,060 | 321,869 | |||||||
Less: Valuation Allowance | (3,526,060 | ) | (321,869 | ) | |||||
Net Deferred Tax Asset | $ | 0 | $ | 0 |
Business_Basis_of_Presentation2
Business, Basis of Presentation and Significant Accounting Policies (Details) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | 3 Months Ended | 0 Months Ended | 6 Months Ended |
Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jul. 07, 2014 | Jun. 30, 2014 | |
Accounts Receivable [Member] | Subsequent Event [Member] | MUL [Member] | ||||
Business Basis Of Presentation And Significant Accounting Policies (Textuals) | ' | ' | ' | ' | ' | ' |
Write Off Investment In Subsidiary | $126,537 | $126,537 | ' | ' | $126,537 | ' |
Rights sold | ' | ' | 2,065,500 | ' | ' | ' |
Provision for Doubtful Accounts | $5,250,774 | $5,250,774 | ' | $2,065.50 | ' | $3,355,246 |
Capital_Lease_and_Government_A2
Capital Lease and Government Assistance (Details) (USD $) | Jun. 30, 2014 |
Assets Disposed of by Method Other than Sale, in Period of Disposition [Line Items] | ' |
2014 | $4,158,082 |
2015 | 4,622,217 |
2016 | 4,532,141 |
2017 | 4,431,994 |
2018 | 4,320,651 |
Thereafter | 0 |
Interest | ' |
Assets Disposed of by Method Other than Sale, in Period of Disposition [Line Items] | ' |
2016 | 465,478 |
2017 | 455,410 |
2018 | 444,213 |
Thereafter | 5,034,899 |
Principal | ' |
Assets Disposed of by Method Other than Sale, in Period of Disposition [Line Items] | ' |
2016 | 90,078 |
2017 | 100,146 |
2018 | 111,343 |
Thereafter | 3,298,433 |
Total Payment | ' |
Assets Disposed of by Method Other than Sale, in Period of Disposition [Line Items] | ' |
2016 | 555,556 |
2017 | 555,556 |
2018 | 555,556 |
Thereafter | $8,333,332 |
Capital_Lease_and_Government_A3
Capital Lease and Government Assistance (Details Textual) (USD $) | 6 Months Ended | |
Jun. 30, 2014 | Dec. 31, 2013 | |
Installments | ||
acre | ||
Capital Lease And Government Assistance (Textuals) | ' | ' |
Area of leased land | 1,560 | ' |
Lease expiration date | 1-Jul-33 | ' |
Rent paid | $10,000,000 | ' |
Number of installments taken to pay rent | 18 | ' |
Additional rent payment term | 'The Company is obligated to pay additional rent if it does not achieve the specified goals of $90 million in investment and 1,000 jobs on or before the end of year 5 (five). | ' |
Purchase options, land | 100 | ' |
Minimum lease payments | 4,000,000 | ' |
Land | 22,100,000 | 22,100,000 |
Deferred Government Assistance | 18,464,462 | 18,464,462 |
Site development costs | -303,249 | ' |
Increase in Capital Lease Obligation | $410,584 | ' |
Discount rate | 10.72% | ' |
Acquisition_of_Atlas_Internati1
Acquisition of Atlas International Film Gmbh (Details) | 3 Months Ended | 6 Months Ended | 0 Months Ended | 3 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2014 | Jan. 03, 2014 | Jan. 03, 2014 | Jun. 30, 2014 | |
USD ($) | USD ($) | Atlas International Film Gmbh [Member] | Atlas International Film Gmbh [Member] | Atlas International Film Gmbh [Member] | |
USD ($) | EUR (€) | USD ($) | |||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' |
Percentage of acquiree stock | ' | ' | 100.00% | 100.00% | ' |
Business acquisition value | ' | ' | $50,000 | € 100,000 | ' |
Business acquisition shares | ' | ' | 5,000,000 | 5,000,000 | ' |
Business acquisition, price per share | ' | ' | $0.00 | ' | ' |
Write off investment in atlas | $126,537 | $126,537 | ' | ' | $126,537 |
Material_Agreements_Details
Material Agreements (Details) (USD $) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | |
Material Agreement (Textual) | ' | ' | ' |
Company owed | $3,400,000 | $3,400,000 | ' |
Sold the rights for the development, production and exploitation | 22,100,000 | 22,100,000 | 22,100,000 |
Bad debt and provided for as a doubtful debt in full | 5,250,774 | 5,250,774 | ' |
Minimum [Member] | ' | ' | ' |
Material Agreement (Textual) | ' | ' | ' |
Royalty net receipts rate | ' | 20.00% | ' |
Maximum [Member] | ' | ' | ' |
Material Agreement (Textual) | ' | ' | ' |
Royalty net receipts rate | ' | 50.00% | ' |
Accounts Receivable [Member] | ' | ' | ' |
Material Agreement (Textual) | ' | ' | ' |
Bad debt and provided for as a doubtful debt in full | $2,065.50 | ' | ' |
Film_Costs_Details
Film Costs (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Films in Development | $358,721 | $34,000 |
Film Costs, Prior to Amortization | 21,201,942 | 20,187,173 |
Less: Accumulated Amortization | 11,201,942 | 2,658,647 |
Total Film Costs (net) | 10,000,000 | 17,528,526 |
Yellow [Member] | ' | ' |
Film Costs, Prior to Amortization | 15,343,221 | 14,653,173 |
Storage 24 [Member] | ' | ' |
Film Costs, Prior to Amortization | $5,500,000 | $5,500,000 |
Film_Costs_Details_Textual
Film Costs (Details Textual ) (USD $) | 3 Months Ended | |
Jun. 30, 2014 | Mar. 31, 2014 | |
Yellow [Member] | ' | ' |
Film cost textuals | ' | ' |
Residual value | $0 | ' |
Printing And Advertising Expense | 20,000,000 | ' |
Value of film assets, write off | 10,000,000 | ' |
Initial preproduction costs | 10,000,000 | 50,300 |
Impairment Charge on Reclassified Assets | 5,343,221 | ' |
Irrecoverable cost description | 'The Company considers these costs irrecoverable, and has therefore written these costs down to $0 in the three months ended June 30, 2014. | ' |
Film Written Down Cost Description | 'Management believes that these films are now unlikely to be produced or exploited and have written their cost of $206,421 down to $0 in the three months ended June 30, 2014. | ' |
Miscellaneous Expenses | 2,500,000 | ' |
Pre-Vizualization Costs | 1,264,000 | ' |
Storage 24 [Member] | ' | ' |
Film cost textuals | ' | ' |
Residual value | ' | 1,771,880 |
Value of film assets, write off | $0 | ' |
Notes_Payable_Details
Notes Payable (Details) (USD $) | 6 Months Ended |
Jun. 30, 2014 | |
Short-term Debt [Line Items] | ' |
Principal Balance Only | $872,268 |
Balance with Accrued Interest | 1,072,059 |
Tommee May [Member] | ' |
Short-term Debt [Line Items] | ' |
Date of Loan | 18-May-11 |
Due Date | 'Post Release |
Original Principal Amount | 180,000 |
Principal Balance Only | 180,000 |
Balance with Accrued Interest | 180,000 |
Film | 'Yellow |
AMAG [Member] | ' |
Short-term Debt [Line Items] | ' |
Date of Loan | 13-Sep-11 |
Due Date | '8/31/12 |
Original Principal Amount | 1,000,000 |
Principal Balance Only | 92,268 |
Balance with Accrued Interest | 292,059 |
Film | 'Yellow |
Derreck Lee [Member] | ' |
Short-term Debt [Line Items] | ' |
Date of Loan | 1-May-11 |
Due Date | 'Post Release |
Original Principal Amount | 500,000 |
Principal Balance Only | 600,000 |
Balance with Accrued Interest | $600,000 |
Film | 'Yellow |
Notes_Payable_Details_Textual
Notes Payable (Details Textual) (USD $) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2014 | Jun. 30, 2014 | |
Tommee May [Member] | ' | ' |
Note Payable (Textual) | ' | ' |
Production cost loan | $180,000 | $180,000 |
AMAG [Member] | ' | ' |
Note Payable (Textual) | ' | ' |
Production cost loan | 1,000,000 | 1,000,000 |
Penalty interest rate | ' | 18.00% |
Accumulated interest | 199,791 | 199,791 |
Due amount including interest | 292,059 | 292,059 |
Debt repaid to related party | 792,024 | ' |
Derreck Lee [Member] | ' | ' |
Note Payable (Textual) | ' | ' |
Production cost loan | 500,000 | 500,000 |
Accumulated interest | $100,000 | $100,000 |
Credit_Line_Details
Credit Line (Details) (USD $) | 6 Months Ended | |
Jun. 30, 2014 | Dec. 31, 2013 | |
Credit Line [Abstract] | ' | ' |
Credit line, outstanding amount | ' | $788,289 |
Interest and Debt Expense | $600,000 | ' |
Restricted_Notes_Details
Restricted Notes (Details) (Restricted Notes [Member], USD $) | 6 Months Ended |
Jun. 30, 2014 | |
Short-term Debt [Line Items] | ' |
Convertible notes | $1,301,700 |
Restricted stock converted to common stock | 1,256,432 |
Restricted stock outstanding | 1,850,607 |
Interest rate maximum | 12.00% |
Interest rate minimum | 0.00% |
Penalty interest rate | 18.00% |
Repayment percentage of face value | 150.00% |
Accrued interest | $0 |
Minimum [Member] | ' |
Short-term Debt [Line Items] | ' |
Convertible note conversion discount percentage | 37.00% |
Maximum [Member] | ' |
Short-term Debt [Line Items] | ' |
Convertible note conversion discount percentage | 45.00% |
Aged_Debt_Details
Aged Debt (Details) (Aged Debt [Member], USD $) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2014 | Jun. 30, 2014 | |
Aged Debt (Textual) | ' | ' |
Original debt, amount | $2,737,770 | ' |
Amount of debt converted | 1,475,964 | ' |
Amount of debt outstanding | 1,538,265 | 1,538,265 |
Interest rate maximum | ' | 0.00% |
Interest rate minimum | ' | 12.00% |
Penalty interest rate | ' | 18.00% |
Accrued interest | $0 | $0 |
Repayment percentage of face value | ' | 150.00% |
Minimum [Member] | ' | ' |
Aged Debt (Textual) | ' | ' |
Convertible note conversion discount percentage | ' | 37.00% |
Maximum [Member] | ' | ' |
Aged Debt (Textual) | ' | ' |
Convertible note conversion discount percentage | ' | 45.00% |
Screen_Actors_Guild_Details
Screen Actors Guild (Details) (USD $) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | |
Screen Actors Guild (Textual) | ' | ' | ' |
Assumed debt | ' | $311,244 | ' |
Assumed debt outstanding | ' | 269,244 | ' |
Repayments of assumed debt | 269,244 | ' | ' |
Deposit held | $30,000 | ' | $70,000 |
Stockholders_Equity_Details
Stockholders' Equity (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Common Stock [Member] | Common Stock [Member] | Series A Preferred Stock [Member] | Series A Preferred Stock [Member] | |||
Stockholders Equity Textual [Abstract] | ' | ' | ' | ' | ' | ' |
Common Stock, Shares Authorized | 500,000,000,000 | 500,000,000,000 | ' | ' | ' | ' |
Common Stock, Par or Stated Value Per Share | $0.00 | $0.00 | ' | ' | ' | ' |
Common Stock, Shares, Issued | 2,329,050,866 | 109,841,420 | ' | ' | ' | ' |
Common Stock, Shares, Outstanding | 2,329,050,866 | 109,841,420 | ' | ' | ' | ' |
Preferred Stock, Shares Authorized | 50,000,000 | 50,000,000 | ' | ' | ' | ' |
Preferred Stock, Shares Issued | 50,000,000 | 10,000,000 | ' | ' | ' | ' |
Preferred Stock, Shares Outstanding | 50,000,000 | 10,000,000 | ' | ' | ' | ' |
Issuance of shares | ' | ' | 2,001,167,212 | 0 | 40,000,000 | 0 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Income Taxes [Abstract] | ' | ' |
Prior Year | $321,869 | $48,543 |
Tax Benefit for Period | 3,204,191 | 273,326 |
Total Deferred Tax Asset | 3,526,060 | 321,869 |
Less: Valuation Allowance | -3,526,060 | -321,869 |
Net Deferred Tax Asset | $0 | $0 |
Income_Taxes_Details_Textual
Income Taxes (Details Textual) (USD $) | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | |
Income Tax (Textual) | ' | ' | ' |
Expected tax rate | ' | 20.00% | ' |
Net Deferred Tax Asset | $0 | ' | $0 |
Deferred tax assets expiration | 'begin to expire in 2028. | ' | ' |
Accounts_Payable_Related_Parti1
Accounts Payable - Related Parties (Details) (USD $) | Jun. 30, 2013 |
Accounts Payable Related Parties (Textual) | ' |
Amount due to Related Parties | $626,878 |
Subsequent_Events_Details
Subsequent Events (Details) (Rights Acquisition Agreement [Member], Subsequent Event [Member]) | 0 Months Ended |
Jul. 07, 2014 | |
Rights Acquisition Agreement [Member] | Subsequent Event [Member] | ' |
Subsequent Event [Line Items] | ' |
Agreement termination date | 25-Mar-13 |
Agreement description term | 'Euro 1,500,000 was to be paid to the Company on or before July 23, 2013 that was subsequently extended to October 31, 2013. |