SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2001
Commission File Number 0-27609
MONET ENTERTAINMENT GROUP, LTD.
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(Exact name of registrant as specified in its charter)
Colorado 84-1391993
- ------------------------------- ----------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
222 Milwaukee Street, Suite 304, Denver, CO 80206
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(Address of principal executive offices) (Zip Code)
(303) 329-3479
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(Registrant's telephone number, including area code)
N/A
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(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) or the Securities Exchange Act of 1934 during
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 X No
--- ---
As of September 30, 2001 the Company had 5,000,000 shares of Common Stock issued
and outstanding.
1
MONET ENTERTAINMENT GROUP, LTD.
(A Development Stage Enterprise)
BALANCE SHEET
<Table>
<Caption>
December 31, 2000 September 30, 2001
----------------- ------------------
ASSETS
Cash $1,961 $1,961
Investments
Energy Investment Group, 115 115
Common Stock (Note B)
Interest in motion picture (Note C) 5,000 5,000
Organization Expenses (Note D) 2,843 2,843
------ ------
TOTAL ASSETS $9,919 $9,919
SHAREHOLDERS EQUITY
Common stock, no par value, $9,919 $9,919
25,000,000 shares authorized, of
which 5,000,000 are outstanding
(Notes B and C)
Preferred Stock, no par value,
25,000,000 authorized, none
outstanding -- --
------ ------
Total Shareholders Equity $9,919 $9,919
------ ------
TOTAL LIABILITIES AND
SHAREHOLDERS EQUITY $9,919 $9,919
====== ======
</Table>
The accompanying notes are an integral part of these financial statements
2
MONET ENTERTAINMENT GROUP, LTD
(A Development Stage Enterprise)
STATEMENTS OF INCOME AND RETAINED EARNINGS
<Table>
<Caption>
Twelve months
Ended Nine Months Ended
December 31, 2000 September 30, 2001
----------------- ------------------
Income $0 $0
Expense 0 0
Net Operating Income Before Taxes 0 0
Net Income 0 0
Beginning Retained Earnings 0 0
Ending Retained Earnings
</Table>
The accompanying notes are an integral part of these financial statements
3
MONET ENTERTAINMENT GROUP, LTD
(A Development Stage Enterprise)
STATEMENTS OF CASH FLOWS
<Table>
<Caption>
Twelve months ended Nine months ended
December 31, 2000 September 30, 2001
----------------- ------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 0 $ 0
Net Cash Provided by Operating Activities 0 0
CASH FLOWS FROM INVESTING ACTIVITIES
Net Cash Provided by Investing Activities 0 0
CASH FLOW FROM FINANCING ACTIVITIES
Issuance of Capital Stock 0 0
Net Cash Provided by Financing Activities 0 0
NET INCREASE IN CASH 0 0
CASH, BEGINNING OF PERIOD 1,961 1,961
CASH, END OF PERIOD 1,961 1,961
</Table>
The accompanying notes are an integral part of these financial statements
4
MONET ENTERTAINMENT GROUP, LTD
(A Development Stage Enterprise)
Notes to Financial Statements
A. Background and Summary of Significant Accounting Policies
Background
The Monet Entertainment Group, Ltd., (the Company) was formed on
September 20, 1996 for the purpose of engaging in two pursuits within the
entertainment industry which involve developing a unique "completion guarantee"
to assure the completion of selected projects and developing a financing program
fur full length motion pictures:
1. Completion bonding activities are associated with and a part
of commercial film production and other entertainment
production activities. A "completion bond" is a guarantee that
should a film project go over budget or not have sufficient
capital to complete the film, the guarantor will provide the
additional capital needed to insure completion of the project.
This guarantee for small independent producers is unique in
the entertainment industry. At present completion bonding has
been a requirement for medium and large budget productions but
generally unavailable for small producers. Lack of
availability of this or a similar financial product has
resulted in secondary producers having great difficulty in
obtaining financing and has kept many worthwhile projects from
reaching theaters. It is anticipated that Monet's completion
bonds will be reinsured with companies with sufficient capital
resources to preclude the possibility that Monet will ever be
at risk for capital shortages in bonded projects.
2. Financing feature length budget films will be accomplished
through the formation of a continuing series of joint ventures
with independent film makers. Plans include taking fractional
interests in selected film projects, thus spreading investor
risk in the most advantageous manner. Project involvement will
be financed through joint-venture arrangements with individual
investors and small non-entertainment related companies.
Monet Entertainment Group, Ltd., is considered to be a Development
Stage Enterprise because planned principal operations have not commenced and
there has been no revenue therefrom.
Basis of Presentation
The accompanying financial statements have been prepared in accordance
with rules established by the Securities and Exchange Commission for Form 10-Q.
Not all financial disclosures required to present the financial position and
results of operations in accordance with generally accepted accounting
principles are included herein. The reader is referred to the Company's
Financial Statements included in the registrant's Annual Report on Form 10-K for
the year ended December 31, 2000. In the opinion of management, all accruals and
adjustments (each of which is of a normal recurring nature) necessary for a fair
presentation of the financial position as of September 30, 2001 and the results
of operations for the nine month period then ended have been made. Significant
accounting policies have been consistently applied in the interim financial
statements and the annual financial statements.
5
MONET ENTERTAINMENT GROUP, LTD
(A Development Stage Enterprise)
Notes to Financial Statements
B. Investments
The Company has exchanged shares of its common stock for shares of
Series C common stock of Energy Acquisition Companies, Inc. (Energy), a New York
Corporation.
The exchange, which was effective on October 7, 1996, (the date the
Certificate of Share Exchange was filed by the Colorado Secretary of State and
by the New York Department of State), resulted in the exchange of 115,531 shares
of Energy Acquisition Companies, Inc., Series C, Par Value $0.001 Common Stock
for 500,000 shares of Monet Entertainment Group, Ltd. Common Stock.
The 115,531 shares of Energy Acquisition Companies, Inc. common stock
received by Monet represents 9/10 of one percent of Energy's outstanding shares.
The 500,000 shares of Monet common stock surrendered to Energy represents eleven
percent of the Company's outstanding common stock, and two percent of its
authorized stock.
C. Interest in Motion Picture
During its initial operating period the Company acquired an interest in
a feature-length motion picture, tentatively entitled Salvation. This interest
was conveyed by Mr. Stephen Replin, President and principal stockholder of Monet
Entertainment Group, Ltd., in exchange for 2,295,000 shares of common stock. In
1996 Mr. Replin purchased a 25 percent interest in the film for $25,000. He
conveyed 20 percent of his interest in the film, thereby providing Monet with a
five percent ownership position.
When Monet Entertainment acquired its interest the film was incomplete;
however, the film has since been completed. Management continues efforts to sell
the film outright to a distributor, however a sale in the immediate future is
not anticipated. An outright sale contemplates a fixed price agreement in which
the sellers do not retain rights to share in the profits, if any, resulting from
the distribution and promotion of the film. It is not anticipated that the
owners of the film, including Monet Entertainment Group, will be required to
contribute additional capital to sell the film.
D. Organizational Expenses
Three former officers of the Corporation were each awarded 435,000
shares of common stock in recognition for their service rendered without
compensation to the Corporation. The value of their contribution has been
classified as an organizational expense and will be amortized over a period of
time consistent with tax law, once the corporation is no longer classified as a
development stage enterprise.
6
ITEM 2. PLAN OF OPERATION
Monet Entertainment Group, Ltd., (the "Company") was formed in 1996 in
order to finance the production of low budget feature length motion pictures and
a variety of other entertainment projects including documentaries, video
recordings and musical recordings. Many small independent producers are
financially unsophisticated and have little experience in raising the capital
required to produce their projects. As a result, the Company believes that there
is an opportunity to provide financing for projects which have a production
budget of between $50,000 and $1,000,000. The Company is of the opinion that
there is virtually no organized competition for financing of this nature.
The financing to be provided by the Company will typically be in the
form of one or more of the following:
1. Direct loans
2. Equity participations
3. Project completion bonds
In addition to direct funding from the Company or a Company sponsored
joint venture, the Company also plans to provide small independent producers
with assistance in raising financing for entertainment projects with production
budgets in the range of $50,000 to $1,000,000. The Company intends to introduce
independent producers to persons willing to fund entertainment projects and
prepare, or supervise the preparation of, all documentation required to obtain
such financing.
Before the Company can begin operations, the Company will need to raise
at least $250,000 so that the Company will be in a position to begin funding
entertainment projects and/or issuing completion bonds. The Company will attempt
to raise this capital through:
1. The private sale of its debt and/or equity securities.
2. Borrowings from private lenders.
3. Joint ventures which will be formed by the Company and third parties
for the purpose of funding one or more entertainment projects.
The Company does not have any commitments from any person to provide
any capital to either the Company or to any producer of motion pictures or other
form of entertainment. The Company does not have any agreements with any motion
picture producer or producer of other forms of entertainment to finance the
production of any entertainment project. There can be no assurance that the
Company will be successful in terms of raising any capital, funding any
entertainment projects, or earning any profits.
7
PART II
Item 6.
(A) Exhibits
No exhibits are filed with this report.
(B) Reports on Form 8-K
The Company did not file any reports on Form 8-K during the quarter
ended September 30, 2001.
SIGNATURES
In accordance with Section 13 or 15(a) of the Exchange Act, the
Registrant has caused this Report to be signed on its behalf by the undersigned,
thereunto duly authorized on the 14th day of November, 2001.
MONET ENTERTAINMENT GROUP, LTD.
/s/ Stephen D. Replin
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Stephen D. Replin, President,
Chief Executive Officer and
Principal Financial Officer
8