UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] Quarterly report filed under Section 13 or 15 (d) of the Securities
Exchange Act of 1934 For the Quarterly Period Ended September 30, 2004.
or
[ ] Transitional report filed under Section 13 or 15 (d) of the
Exchange Act.
Commission File No. 0-23365
BONGIOVI ENTERTAINMENT, INC.
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(Name of Small Business Issuer in its Charter)
Nevada 33-0840184
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State or other jurisdiction of I.R.S. Employer Identification Number
incorporation or organization
39 Hansen Farm Road, North Haven, Connecticut 06473
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(Address of principal executive office)
Issuer's telephone number: (203) 239-9734
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Check whether the issuer: (1) filed all reports required to be filed by section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) been
subject to such filing requirements for the past ninety (90) days.
Yes X No
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State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practical date: As of November 1, 2004, there were
100,000,000 shares of Common Stock, par value $.001 per share, outstanding.
Transitional Small Business Disclosure Format (check one):
Yes No X
--- --
1
TABLE OF CONTENTS
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PART I FINANCIAL INFORMATION
Page
----
Item 1. FINANCIAL STATEMENTS
a. Balance Sheet 3
b. Statements of Operations 4
c. Statements of Cash Flows 5
d. Notes to Financial Statements 6-7
Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS 8-9
Item 3. CONTROLS AND PROCEDURES 9
PART II OTHER INFORMATION 10
Item 1. LEGAL PROCEEDINGS
Item 2. CHANGES IN SECURITIES
Item 3. DEFAULTS ON SENIOR SECURITIES
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Item 5. OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON 8-K
SIGNATURE PAGE 11
CERTIFICATION 12
2
BONGIOVI ENTERTAINMENT, INC.
BALANCE SHEET
SEPTEMBER 30, 2004
(UNAUDITED)
ASSETS
CURRENT ASSETS
Total current assets $ --
============
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 13,456
Due to shareholders 9,450
------------
Total current liabilities 22,906
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STOCKHOLDERS' (DEFICIT)
Preferred stock, $.001 par value, 10,000,000 shares
authorized, none issued and outstanding --
Common stock, $.001 par value, 100,000,000
shares authorized, 100,000,000 shares
issued and outstanding 100,000
Additional paid in capital 7,876,681
Accumulated (deficit) (7,999,587)
------------
(22,906)
------------
$ --
============
See the accompanying notes to the financial statements.
F-1
BONGIOVI ENTERTAINMENT, INC.
STATEMENTS OF OPERATIONS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(UNAUDITED)
THREE MONTHS NINE MONTHS
------------- -----------
2004 2003 2004 2003
------------- ------------- ------------- -------------
REVENUE
Net sales $ -- $ -- $ -- $ --
------------- ------------- ------------- -------------
OPERATING COSTS AND EXPENSES
General and administrative 13,976 -- 22,906 --
------------- ------------- ------------- -------------
(13,976) -- (22,906) --
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OTHER EXPENSES:
Interest expense -- 175,000 330,490 562,000
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NET (LOSS) $ (13,976) $ (175,000) $ (353,396) $ (562,000)
============= ============= ============= =============
PER SHARE INFORMATION (basic and fully diluted)
Weighted average common shares outstanding 100,000,000 4,200,000 46,901,099 4,200,000
============= ============= ============= =============
(Loss) per share $ (0.00) $ (0.04) $ (0.01) $ (0.13)
============= ============= ============= =============
See the accompanying notes to the financial statements.
F-2
BONGIOVI ENTERTAINMENT, INC.
STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
(UNAUDITED)
2004 2003
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Cash flow from operating activities:
Net cash provided by operating activities $ -- $ --
------------ -----------
Cash flows from investing activities:
Net cash provided by investing activities -- --
------------ -----------
Cash flows from financing activities:
Net cash provided by financing activities -- --
------------ -----------
Increase (decrease) in cash -- --
Cash - beginning of period -- --
------------ -----------
Cash - end of period $ -- $ --
============ ===========
See the accompanying notes to the financial statements.
F-3
Bongiovi Entertainment, Inc.
Notes to Financial Statements
September 30, 2004
(Unaudited)
(1) Basis Of Presentation
The accompanying unaudited financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America
("GAAP") for interim financial information. They do not include all of the
information and footnotes required by GAAP for complete financial statements. In
the opinion of management, all adjustments (consisting only of normal recurring
adjustments) considered necessary for a fair presentation have been included.
The results of operations for the periods presented are not necessarily
indicative of the results to be expected for the full year. For further
information refer to the financial statements of Bongiovi Entertainment, Inc. as
of December 31, 2003 and for each of the two years then ended and from inception
to December 31, 2003, included in the filing on Form 10-KSB.
(2) Earnings Per Share
The Company calculates net income (loss) per share as required by SFAS No. 128,
"Earnings per Share." Basic earnings (loss) per share is calculated by dividing
net income (loss) by the weighted average number of common shares outstanding
for the period. Diluted earnings (loss) per share is calculated by dividing net
income (loss) by the weighted average number of common shares and dilutive
common stock equivalents outstanding. During the periods presented common stock
equivalents were not considered, as their effect would be anti-dilutive.
(3) Due to Shareholders
During the period from April through September 30, 2004 the majority shareholder
advanced the Company an aggregate of $9,450 by the direct payment of certain
obligations of the Company. These advances are due on demand and do not bear
interest.
(4) Notes Payable
In conjunction with the recapitalization of the Company in September 2002 the
Company incurred debt for services provided pursuant to a promissory note in the
amount of $600,000 with interest at 8% per annum exclusive of interest and
penalties charged for late payments. The note was payable in monthly
installments commencing on November 10, 2002. Each payment was to be the greater
of $100,000 or 20% of the net equity proceeds received by the Company in the
period since the last payment date. The balance of the note was due on April 30,
2003. The holder was entitled to convert any unpaid principal at April 30, 2003
into common shares of the Company at a conversion price equal to 70% of the
average closing bid price of the Company's common stock for the 10 lowest of the
30 days preceding the conversion date. Through June 23, 2004, no payments had
been made and the note was in default. In addition, through June 23, 2004, an
aggregate of $1,109,157 in interest and penalties related to this note had been
accrued. On June 23, 2004, the holder of the note converted the principal,
accrued interest and penalties into 96,000,000 shares of common stock.
F-4
(5) Stockholders' (Deficit)
During February 2003 the Company issued 200,000 shares of its common stock to an
escrow account for sale to third parties. During October 2003 the Company
cancelled the 200,000 shares issued during February 2003 to an escrow agent.
These shares were retired by the Company during the period ended June 30, 2004.
On June 14, 2004, the Company's then principal shareholders returned 16,000,000
shares of common stock to the Company in exchange for the transfer of certain
assets and liabilities to these shareholders (see Note 7).
On June 23, 2004, the Company issued 96,000,000 shares of common stock for the
conversion of $1,709,157 in debt including interest and penalties (see Note 4).
(6) Going Concern
The Company's financial statements are presented on a going concern basis, which
contemplates the realization of assets and satisfaction of liabilities in the
normal course of business.
The Company has experienced a significant loss from operations as a result of
its investment necessary to achieve its operating plan, which is long-range in
nature. For the period ended September 30, 2004, the Company incurred net losses
of $353,396 and has working capital and stockholder deficits of $22,906 and no
revenue generating operations.
The Company's ability to continue as a going concern is contingent upon its
ability to attain profitable operations and secure financing. In addition, the
Company's ability to continue as a going concern must be considered in light of
the problems, expenses and complications frequently encountered by entrance into
established markets and the competitive environment in which the Company
operates.
The Company is pursuing equity financing for its operations and an operating
business with which to merge. Failure to secure such financing or to raise
additional capital or borrow additional funds and/or merge with an operating
entity may result in the Company not being able to continue in existence.
The financial statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amounts
and classification of liabilities that may result from the possible inability of
the Company to continue as a going concern.
(7) Transfer of Assets
On June 14, 2004, certain shareholders of the Company purchased back the shares
of an entity, which they formerly controlled in exchange for these shareholders
returning 16,000,000 shares of common stock to the Company. The acquisition of
the entity had been accounted for as a recapitalization of the Company during
September 2002. The accounts of the entity acquired in the recapitalization have
been removed from the financial statements of the Company for all periods
presented.
The assets and liabilities of the entity consisted of the following at June 14,
2004.
Other assets $ 355,000
Current liabilities $ 895,000
F-5
Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
PRELIMINARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Statements contained in this Plan of Operation of this Quarterly Report on Form
10-QSB include "forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933 as amended (the "Securities Act") and Section 21E of
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Forward-looking statements involve known and unknown risks, uncertainties and
other factors which could cause the actual results of the Company (sometimes
referred to as "we", "us" or the "Company"), performance (financial or
operating) or achievements expressed or implied by such forward-looking
statements not to occur or be realized. Such forward-looking statements
generally are based upon the Company's best estimates of future results, general
merger and acquisition activity in the marketplace, performance or achievement,
based upon current conditions and the most recent results of operations.
Forward-looking statements may be identified by the use of forward-looking
terminology such as "may," "will," "project," "expect," "believe," "estimate,"
"anticipate," "intends," "continue", "potential," "opportunity" or similar
terms, variations of those terms or the negative of those terms or other
variations of those terms or comparable words or expressions. (See the Company's
Form 10SB for a description of certain of the known risks and uncertainties of
the Company.)
Overview of the Company's Business
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Bongiovi Entertainment, Inc. ("the Company") is a Nevada corporation.
The Company's previous name was "Interruption Television, Inc." The Company
changed its name in September, 2002 in connection with the share exchange
transaction described below.
As of September 10, 2002, the Company consummated a transaction,
whereby the Company acquired all of the issued and outstanding shares of
Bongiovi Entertainment, Inc., a Florida corporation ("Bongiovi") in exchange for
the issuance by the Company of a total of 16,000,000 newly issued restricted
shares of common voting stock to Bongiovi shareholders pursuant to the Agreement
and Plan of Reorganization, as amended (the "Agreement"), dated as of September
10, 2002, by and between the Company and Bongiovi. Immediately prior to the
share exchange, there were 4,000,000 shares of the Company's common stock issued
and outstanding. The Company effected a 1-for-11.5 reverse stock split of its
common stock as of September 3, 2002. As a result of the acquisition, there were
20,000,000 shares of common stock issued and outstanding.
As of June 14, 2004, the Company entered into an Asset Purchase and
Sale Agreement (the "Sale Agreement") with certain shareholders of the Company
(collectively, the "Shareholders"), pursuant to which the Shareholders purchased
back certain assets of the Company (the "Transferred Assets") and assumed
certain liabilities of the Company in consideration for transferring back to the
Company a total of 16,000,000 shares of common stock owned by the Shareholders.
Such shares were delivered to the Company for cancellation or deposit in the
treasury. At the closing of the transaction, the current officers and directors
of the Company resigned, and Larry Shatsoff was appointed as the new president
and director of the Company.
On June 23, 2004 the holder of the promissory note in the principal
amount of $600,000 (the "Note"), Sarmatan Developments, Ltd, elected to convert
all principal and accrued interest and penalties into common shares of the
Company. The total conversion amount, including accrued interest and penalties,
was $1,709,157.35. The Company defaulted on the payment of the Note at the
maturity date on April 30, 2003. The conversion price was 70% of the average
closing bid price for the ten (10) lowest of the thirty (30) trading days
immediately preceding the conversion date. The average closing price was $.025
of which 70% was $.0175. The conversion of the Note would have resulted in the
issuance of more than 96 million shares required to be issued which would then
exceed the 100 million authorized by the Company's Articles of Incorporation, so
Sarmatan Developments, Ltd. agreed to accept 96 million shares and forego the
remaining amount due. Sarmatan Developments, Ltd. holds in excess of 96% of the
Company's common stock. There were 4 million shares outstanding just prior to
the conversion of the Note, and 100 million shares of common stock outstanding
after the conversion of the Note.
8
Plan of Operations
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Our net loss for the three months period ending September 30, 2004 was
$(13,976)compared to our net loss for the three months period ending
September 30, 2004 which was $(175,000).
Our general and administrative expenses for the nine months ended
September 30, 2004 were $22,906. Our general and administrative expenses for the
three months ended September, 2004 were $13,976 .
Interest expense for all periods presented relates to the $600,000 note
payable described above.
Currently there are no signed contracts that will produce revenue and
there can be no assurances that management will be successful in negotiating
such contracts.
Item 3. Controls and Procedures
The Company's Chief Executive Officer and Chief Financial Officer
evaluated the Company's disclosure controls and procedures as of the date of
this report. Based upon this evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that the Company's disclosure controls and
procedures are effective in ensuring that material information required to be
disclosed is included in the reports that it files with the Securities and
Exchange Commission. There were no significant changes in the Company's internal
controls or, to the knowledge of the management of the Company, in other factors
that could significantly affect these controls subsequent to the evaluation
date.
9
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
NONE
ITEM 2 - CHANGES IN SECURITIES
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
NONE
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
NONE
ITEM 5 - OTHER INFORMATION
NONE
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 31 CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF
FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT
Exhibit 32 CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF
FINANCIAL OFFICER PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT
Reports on Form 8-K: none
10
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
Registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
BONGIOVI ENTERTAINMENT, INC.
By: /s/ Larry Shatsoff
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Larry Shatsoff, Chief Executive Officer
and Chief Financial Officer
Dated: November 15, 2004
11