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 three month period end June 30, 2004
Commission File Number 0-27609
MONET ENTERTAINMENT GROUP, LTD.
-------------------------------
(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
-------------------------------------------------
(Address of principal executive offices) (Zip Code)
(303) 329-3479
--------------
(Registrant's telephone number, including area code)
N/A
-----------------------------
(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 August 10, 2004 the Company had 5,000,000 shares of Common Stock issued
and outstanding.
ITEM 1. FINANCIAL STATEMENTS
Index to Unaudited Financial Statements
Balance Sheet F-1
Statement of Income and Retained Earnings F-2
Statement of Cash Flows F-3
Statement of Stockholders Equity F-4
Notes to Unaudited Financial Statements F-5
2
Monet Entertainment Group, Ltd.
(A Development Stage Enterprise)
June 30, December 31,
Balance Sheet at 2004 2003
-------- --------
Assets
Cash $ 9,035 $ 9,000
Investments
Energy Acquisition Group, Common Stock 115 115
------- -------
Total Assets $ 9,150 $ 9,115
======= =======
Liabilities
Note Payable 6,710 4,510
------- -------
Total Liabilities 6,710 4,510
------- -------
Shareholders' Equity
Common stock, no par value, 25,000,000 shares authorized,
of which 5,000,000 are outstanding 9,919 9,919
Preferred stock, no par value, 25,000,000 authorized,
none outstanding
Retained Earnings (Deficit) Accumulated in
the Development Stage (7,479) (5,314)
------- -------
Total Shareholders' Equity 2,440 4,605
------- -------
------- -------
Total Liabilities and Shareholders' Equity $ 9,150 9,115
======= =======
The accompanying notes are an integral part of these financial statements
F-1
Monet Entertainment Group, Ltd.
(A Development Stage Enterprise)
Statement of Income and Retained Earnings
For Year Ended December 31, 2003 and Quarter Ended June 30, 2004
Six Months Ended Year Ended
June 30, 2004 December 31, 2003
---------------- -----------------
Income
Miscelleanous Fees $ 2,051
Interest Income $ 35 77
------- -------
Total Income 35 2,128
Expenses 2,200 4,610
------- -------
Net Operating Income Before Taxes (2,165) (2,482)
Extraordinary Loss (5,000)
Income Tax Expense
------- -------
Net Income(Loss) (2,165) (7,482)
Retained Earnings(Deficiency) - Beginning (5,314) 2,168
------- -------
Retained Earnings(Deficiency) - Ending ($7,479) ($5,314)
------- -------
Earnings (Loss) Per Share (5,000,000 outstanding) ($0.00048) ($0.00149)
The accompanying notes are an integral part of these financial statements
F-2
Monet Entertainment Group, Ltd.
(A Development Stage Enterprise)
Statement of Cash Flows
Year Ended December 31, 2003 and Quarter Ended June 30, 2004
Six Months Ended Year Ended
June 30, 2004 December 31, 2003
---------------- -----------------
Cash Flows From Operating Activities
Cash Received from Customers $ 2,051
Interest Income Received $ 35 77
Cash Paid for Professional Services (2,200) (3,370)
Cash Paid to Taxing Authorities (1,207)
Other Cash Payments (100)
------- -------
Net Cash Provided by Operating Activities (2,165) (2,549)
------- -------
Cash Flows From Investing Activities
------- -------
Net Cash Provided by Investing Activities 0 0
------- -------
Cash Flows From Financing Activities
Issuance of Capital Stock 0 0
Borrowings During Period 2,200 3,370
------- -------
Net Cash Provided by Financing Activities 2,200 3,370
------- -------
Net Increase (Decrease) in Cash 35 821
Cash, Beginning of Period 9,000 8,179
------- -------
Cash, End of Period $ 9,035 $ 9,000
======= =======
The accompanying notes are an integral part of these financial statements
F-3
Monet Entertainment Group, Ltd.
(A Development Stage Enterprise)
Statement of Stockholders Equity
Inception (September 20, 1996) through December 31, 2003 and
Six Months Ended June 30, 2004
Share-
Holders Shares Equity
Equity Outstanding Per Share
---------------------------------------------
Issued and Outstanding at December 31, 1996 $9,919 5,000,000 $0.00198
Changes During Years 1997 Through 2001 -0- -0- -0-
Issued and Outstanding at December 31, 2001 $9,919 5,000,000 0.00198
Change During Year Ended December 31, 2002 $2,168 -0- 0.00043
Issued and Outstanding at December 31, 2002 $12,087 5,000,000 0.00241
Change During Year Ended December 31, 2003 ($7,482) -0- (0.00150)
Issued and Outstanding at December 31, 2003 $4,605 5,000,000 0.00091
Change During Six Months Ended June 30, 2004 (2,165) -0- (0.00043)
Issued and Outstanding at June 30, 2004 2,440 5,000,000 0.00049
The accompanying notes are an integral part of these financial statements
F-4
Monet Entertainment Group, Ltd.
(A Development Stage Enterprise)
Notes to Financial Statements
Years Ended December 31, 2003
And Six Months -Ended June 30, 2004
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 for 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 goes over budget or
does 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 filmmakers.
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. Income reported during this period was realized from
consulting fees paid to the Company for the efforts of Mr. Replin, President of
Monet Entertainment Group, Ltd. The income is incidental to the principal
business purpose of the Company.
F-5
Monet Entertainment Group, Ltd.
(A Development Stage Enterprise)
Notes to Financial Statements
-----------------------------
Accounting Policies
The accompanying financial statements are presented in the format prescribed for
development stage enterprises by Statement of Financial Accounting Standards No.
7 issued by the Financial Accounting Standards Board.
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.
Miscellaneous Income and Expense During the year ended December 31, 2003 the
Company earned miscellaneous consulting fees for work unrelated to its principal
business purpose and incurred expenses of an administrative nature, primarily
for professional services.
From inception through June 30, 2004 the Company has earned miscellaneous and
interest income totaling $8,370, and incurred operating expenses of $6,810. An
investment of $5,000 in a motion picture held for sale was written off in 2003.
F-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.
Item 3 Controls and procedures
The Company maintains disclosure controls and procedures that are designed to
ensure that information required to be disclosed in the Company's Exchange Act
reports is recorded, processed, summarized and reported within the time periods
specified in the SEC's rules and forms, and that such information is accumulated
and communicated to the Company's management, including its Chief Executive
Officer and Chief Financial Officer, as appropriate, to allow timely decisions
regarding required disclosure based closely on the definition of "disclosure
controls and procedures" in Rule 13a-14(c). The Company's disclosure controls
and procedures are designed to provide a reasonable level of assurance of
reaching the Company's desired disclosure control objectives. In designing and
evaluating the disclosure controls and procedures, management recognized that
any controls and procedures, no matter how well designed and operated, can
provide only reasonable assurance of achieving the desired control objectives,
and management necessarily was required to apply its judgment in evaluating the
cost-benefit relationship of possible controls and procedures. The Company's
certifying officer has concluded that the Company's disclosure controls and
procedures are effective in reaching that level of assurance.
3
Within 90 days prior to the date of this report, the Company carried out an
evaluation, under the supervision and with the participation of the Company's
management, including the Company's Chief Executive Officer and the Company's
Chief Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures. Based on the foregoing, the
Company's Chief Executive Officer and Chief Financial Officer concluded that the
Company's disclosure controls and procedures were effective.
There have been no significant changes in the Company's internal controls or in
other factors that could significantly affect the internal controls subsequent
to the date the Company completed its evaluation.
PART II
OTHER INFORMATION
Item 1. Legal Proceedings. None.
Item 2. Changes in Securities. None
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.
(A) Exhibits
3 Articles and Bylaws(1)
31.1 Sarbanes Oxley Section 302 Certification
31.2 Sarbanes Oxley Section 302 Certification
32.1 Sarbanes Oxley Section 906 Certification
(1) Incorporated by reference, and as same exhibit number, from the
Company's Registration Statement on Form 10-SB (Commission File Number
0-27609).
(B) Reports on Form 8-K: None
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 13th day of August 2004.
MONET ENTERTAINMENT GROUP, LTD.
/s/ Stephen D. Replin
-----------------------------
Stephen D. Replin, President,
Chief Executive Officer and
Principal Financial Officer
4