FORM SB-2
PART 1 - INFORMATION REQUIRED IN PROSPECTUS
Item 1.
Front of Registration Statement and Outside Front Cover of
Prospectus.
Valhalla Motion Pictures Inc.
$5,000,000 Regulation A Offerings
$1,700,000 Series A Offerings
680 Series A 13% Cumulative Debenture Notes
Valhalla Motion Pictures Inc., a California Corporation, is
offering 680 Series A, 13% cumulative debenture Notes in a
best effort underwriting offering. The offering is the
first of three Series. The entire offering including the
Series A offering is $5 million.
Investing on these Debenture Notes involves a high degree
of risk. See "Risk Factors".
Per Debenture
Total
Offering Price $2,500
$1,700,000
Discount and Commission to Underwriters $ 400
$ 272,000
Offering Proceeds to Project $2,100
$1,428,000
Neither the Securities and Exchange Commission nor any
state securities commission has approved or disapproved of
these securities or determined if the prospectus is
accurate or complete. Any representation to the contrary is
a criminal offense.
The Notes matures in 24 months and subject to redemption,
without premium, after the last Interest payment date.
Canon Securities LLC expects to deliver the debenture Notes
to investors on August 16, 2001.
Canon Securities LLC
_______________
March 15, 2001
Item 2.
Inside Front and Outside Back Cover Pages of Prospectus
TABLE OF CONTENTS
Page
The Company....................... 8
Industry Overview...................... 8
Management's Discussion And Analysis............. 9
Officer, Directors And Key Advisors.............. 11
Competitive Advantage.................... 14
Sources And Use Of Proceeds.................. 15
The Offering........................ 16
Description Of Debentures Notes............... 18
Risk Factors......................... 21
Appendix A.......................... 25
Appendix B.......................... 27
Appendix C.......................... 30
Appendix D.......................... 31
Appendix E......................... 32
Appendix F......................... 33
Item 3.
Summary Information and Risk Factors
Competition
The motion picture industry involves a substantial degree
of risk. Each motion picture is an individual artistic
work, and its commercial success is primarily determined by
audience reaction, which is unpredictable. Accordingly,
there can be no assurance as to the financial success of
this film. The motion picture industry is extremely
competitive. The film will vie for audience attention with
many other motion pictures, many of which will be released
by companies having financial resources that are
substantially greater than those of the Company.
Nature of the Motion Picture Industry
The acquisition of movie scripts, development, casting,
production and post-production is an inexact science and
involves a high degree of risk. Studies show that log
openings or number of showings is the best determinate of
high grossing movies. The Company's goal is to finance
twenty-five or more of these lower budget movies and
maximize the number of log openings or number of showings.
Film Distribution
The Company intends to form alliances with third party
distribution entities and license certain distribution
rights in foreign territories through output arrangements
or on a film-by-film basis. The competition for screens in
the U.S. and internationally is often great, as the major
motion picture firms are able to commit far greater
resources towards the distribution of their films and tie
up numerous screens for their premium pictures.
History of Marginal Profitability
The Company has a history of limited working capital. The
Company in the future may seek or secure debt and or equity
from other sources in order to service this debt. There is
no assurance that any other such financings will be
available, or that they will be available on terms
favorable to the Company.
Risk of Production and Distribution of Films
The cost of producing and distributing motion pictures has
generally increased in recent years and may continue to
increase in the future. The Company intends to use the
monies from the Offering to produce and distribute full-
length fixed budget pictures that have production and
distribution budgets that are significantly less than the
major industry average. There are numerous risks involved
in producing and distributing films and, even if a film is
produced, it may not be done on a timely or cost-effective
basis and once distributed there is no guarantee that an
audience will accept the film. A significant time may
elapse
(8 - 12 months) between the expenditure of funds by the
Company and the receipt of corresponding revenues. While
individuals within the company do have identified and
previously used distribution channels, there can be no
assurance that the Company will recover its investment in
the film.
Development Stage Company
The Company is a development stage company and has no
history of operations. Accordingly, the Company has no
operating history upon which an evaluation of its prospects
can be based. Such prospect must be considered in light of
the risk, expenses and difficulties frequently encountered
in the establishment of a new business as well as the risk,
expenses and difficulties encountered in the shift from a
development stage company to a company with operating
revenues. Proposed operations will be subject to all risks
inherent in the establishment of a new business enterprise.
International Operations
A substantial portion of the films revenue will be derived
from the international distribution of motion pictures.
These operations are subject to all risk attendant to
international operation, including changes in foreign
governments, international political and economic
conditions, exchange control laws, imposition of quotas,
and other factors beyond the Company's control.
Labor Considerations
Most actors in the film industry who will be involved with
the film are members of the Screen Actor Guild, which
bargains collectively with producers on an industry-wide
basis from time to time. There is no assurance that labor
difficulties will not adversely affect the production of
the film.
Technological Developments
New technological developments will undoubtedly occur which
will change the way films are made, distributed or
exhibited. It is not possible to accurately forecast the
effect that recent and future technological development
will have on the value of the film.
No Public Market/Limitation on Transferability
There is no public trading market for the Notes of the
Company. While it is the intention of the Company to seek
to provide a public market for the Company's Notes in the
future, there is no assurance that this will happen.
No Guarantee of Returns
Investing in films is a high-risk business. No assurance
can be made or given that a purchase of Notes will realize
any return on investment or the he, she or it will not lose
his, her or its entire investment.
Interest and Principal Payments
Due to the start-up status of the Company and the
uncertainties associated with its operations during that
period of time, there can be no assurance that the Company
will make those interest and/or principal payments on time
or, in the event of sustaining significant losses from its
operations, at any time in the future. Interest in these
Notes is payable in arrears. However investors who
anticipate the need for interest from their investment in
the Company should not purchase the Notes offered hereby.
Financial Projections
The financial projections set forth in the materials
accompanying this offering memorandum have been developed
by the Company based wholly upon assumptions about
potential revenues and expenses, and such assumptions may
prove to be in part or wholly materially incorrect.
Investors should understand that such financial projections
are estimates only, subject to all the uncertainties of
projections for start-up enterprises, and that the actual
results of operations may be materially different from the
results shown or implied by such projections.
Best Effort Offering
No assurance can be given that all of the Notes being
offered hereby will be sold. To the extent that investors
subscribe to fewer than the maximum numbers of Notes
offered hereby, some or all of the Company's business plan
may be delayed or unfulfilled.
Item 3. (b)
Address and Phone Number of Executive Offices
Valhalla Motion Pictures Inc.
17011 Beach Blvd., Suite 900,
Huntington Beach, CA 92647
(714) 375 - 6641
(This space intentionally left blank)
Item 4.
Use of Proceeds
The following table sets forth the anticipated application
of the estimated net proceeds from this Offerings. Many of
the figures set forth are estimated and based on certain
assumptions and cannot be precisely calculated at this time
Maximum
Proceeds
Assuming 680
Notes
Sources:
Gross Offering Proceeds
$1,700,000
Offering Expenses:
Placement Agent Commission(1)
272,000
Reserve Fund (2)
122,400
Due Diligence(3)
51,000
Expenses(4)
102,000
Distribution/Show Expenses(5)
26,300
Total Sources (Net Offering Proceeds)
$1,126,300
(1) The shares are being offered on a "best effort"
basis through participation members (the Placement
Agent") of the National Association of Securities
Dealers, Inc ("NASD") who will be paid a commission of
16% of the price of each Note sold by such Placement
Agent.
(2) Reserve fund. These funds are invested in
marketable fixed income securities.
(3) The Placement Agent will also receive a non-
accountable expense or due diligence allowance equal
to 3% of the purchased price of each Note sold by such
Placement Agent.
(4) Includes non-accountable expense allowance and
wholesaling commission and investment banking fee and
other expenses, such as legal, accounting and
printing, mailing, postage, communication.
(5) These funds are invested in marketable fixed
income securities. Some of the important festivals
include Berlin, Cannes, Los Angeles, Lucarino, New
York, Seattle, Sundance, Telluride, Toronto Venice,
Santa Barbara, Palm Springs International including
hiring a local publicist for appropriate festival.
Item 5.
Determination of Offering Price.
The 680 Notes are priced to finance a full-length movie.
Each Note is priced at $2500.00.
Item 6.
Dilution.
Not Applicable.
Item 7.
Selling Security Holders
Not Applicable.
Item 8.
Plan Distribution
These Notes are offered as Best effort only through:
Canon Securities LLC
19700 Fairchild Road
Suite 150
Irvine, CA 92612
The two principals of Canon Securities each own 20% of
Valhalla Motion Pictures Inc.
The managing member of Canon Securities LLC, as part of
his fiduciary obligation to their clients and Valhalla
Motion Pictures Inc, shall oversee and monitor Valhalla
Motion Picture's Chief Financial Officer's
responsibilities.
Item 8. (b)
Business Experience of Principal Underwriters
Mr. Art Okun
Art Okun is the President and Principal of Canon
Securities LLC. He has been a registered representative
since 1992 with N. Y. Life Securities and has had
principal experience since 1993 in Fixed Income, Private
Placement offerings and Equities. Mr. Okun is a 1984
graduate from Augsburg College in Minneapolis, Minnesota
with a degree in Economics and Finance. Mr. Okun holds a
Principal's Supervisory Series 24 license, General
Securities Series 7, Financial and Operations Principal
Series 27, Series 63, California Insurance Agent License,
and he is a Chartered Financial Analyst Candidate. (CFA)
Mr. Okun is affiliated with Valhalla Motion Pictures and
a fiduciary for both the underwriter and issuer, and has
successfully participated in the funding of many fixed
income bonds and (2) private placement offerings raising
over $25 million.
Mr. Wes Kelley
Wes Kelley represents the investors in Valhalla Motion
Pictures, Inc., as a fiduciary for the underwriter. Mr.
Kelley is affiliated with Canon Securities, LLC, and holds a
securities Principal's Supervisory Series 39 license along
with Series 22 and 63 licenses. He is a 1975 graduate from
San Francisco State University with a degree in Broadcast
Communications and Advertising. During his broadcast
internship Mr. Kelley gained practical experience in
budgeting, writing, directing and producing corporate media,
including instructional video programs and P.R. related
materials. Mr. Kelley's education and background, combined
with his experience as an accomplished musician and
performer, provides investors with the unique advantage of an
in-depth knowledge of both the investment and entertainment
industry.
Item 8. (d)
Underwriter's Representative on the Board of Directors
The two principals of Canon Securities LLC are members of
the board of Directors of Valhalla Motion Pictures Inc.
Item 8. (e)
Indemnification of Underwriter
The issuer indemnifies Canon Securities LLC and it's
controlling persons against any liability arising under
the Securities Act.
Item 9.
Legal Proceedings
Certain legal matters, including the validity of the
securities being issued, will be passed upon by a
counsel. As of the date hereof, the Company has no
pending litigation.
Snell & Wilmer LLP
Law Offices
1920 Main Street, Suite 1200
Irvine, California 92614
Item 10.
Directors, Executive Officers, Promoters and Control
Persons
Name Age Position
Mr. Ric Gallaher 47 President, CEO
Mr. Art Okun(1) 43 Vice President/
Secretary Treasurer
Mr. Wes Kelley(1) 49 Vice President
Mr. Anthony Cannella 44 Vice
President/Director/Post-Production
Mr. Richard McHugh 47 Vice President/Music
Supervisor
(1) Member of audit committee
Mr. Anthony Cannella
Mr. Cannella has been involved with over 100 motion
pictures in his career covering 25 years. He has directed
two feature films (Sierra Quest, for PM Entertainment,
and Rule No. 3 for Arrow Entertainment) and been
Assistant Director, Co-writer or Producer on 24 other
films. As a film mixer and post-production supervisor,
Mr. Cannella has 133 films to his credit.
Born in Pittsburgh, Pa., Anthony moved to Las Vegas out
of high school in 1974 and began a career as a recording
engineer in commercial advertising and music. He moved to
Los Angeles in 1980 to expand his interest into films and
post-production work. Mr. Cannella has 14 gold records to
his credit as a music-recording engineer for Epic and
Capital Records and worked with Michael Jackson as his
personal engineer for 2 years. Mr. Cannella is currently
producing and Co-directing a series for Showtime call
"The Voyeur". This series will air 27 episodes in the
United States.
Mr. Richard McHugh
Mr. Richard (Rich) McHugh grew up in New York City and
has seized every opportunity to expand his creative and
business horizons as an accomplished musician of both
individual songs and production soundtracks. In his
prosperous career, Rich's talents have effortlessly
spanned the fields of TV Commercial Productions,
including McDonald's, Burger King, Chevrolet, Bordens,
Schafer Beer; Hit Broadway Show Productions, including "A
Chorus Line"; Video Productions, including the highly
successful workout video series "Crunch" (5 years, 130
episodes), "Yoga Zone" (60 shows), "Playboy" (many
productions); major Network TV Productions, including
"Brooklyn Bridge" (CBS), "A Year in a Life", "Sisters",
and "Hollywood Safari" (14 episodes); and Feature Film
Productions, including "Moscow on the Hudson" (Robin
Williams), "Three Fugitives" (Nick Nolte/Martin Short),
"Mystic Pizza" (Julia Roberts), "Dream Team" (Michael
Keaton). His most recent films include "Escape Under
Pressure", starring Rob Lowe, "Shark in a Bottle",
starring Ben Gazarra and Danny Knucci from "Titanic".
Rich is currently working on an action Sci-Fi film
tentatively titled "Epoch", starring Ryan O Neal and
Brian Keith.
In addition to his business talents, Rich is deeply
committed to community service, working with 15 children
weekly. His valuable and extraordinarily diversified
background, coupled with an uncompromising sense of
integrity, and a charismatic personality bring a
positive, vibrant and essential creative element to
Valhalla Motion Pictures (PMP).
Mr. Ric Gallaher
Ric Gallaher acts as a liaison between the Movie and the
investors. During his college years he worked in a local
TV station as a cameraman before moving to California in
1974 to pursue a music career. The 70's found Ric
Performing in venues that included the famous Cow Palace,
Bill Graham's Winterland, and Golden Gate Park where he
served as a singer, songwriter and guitarist for some of
the most talented musicians in the world. Mr. Gallaher
was a contracted staff composer for Columbia Pictures for
two years and has numerous films to his credit; including
"King of the Gypsies" (Dino DeLaurentis 1977),
"Punchline" (Tom Hanks) and "Celloso" (2000 South
American).
Mr. Gallaher has composed songs for the Pointer Sisters,
wrote the Title Cut for Timmy T's 2nd worldwide album,
and has written, performed and produced music for TV and
major motion pictures for over 25 years.
Mr. Gallaher also holds a securities Principal's
Supervisory Series 39 license along with Series 22 and 63
licenses. With his music background and securities
background Ric provides a clear bridge between Show and
Business.
Mr. Wes Kelley
Wes Kelley represents the investors in Valhalla Motion
Pictures, Inc., as a fiduciary for the underwriter. Mr.
Kelley is affiliated with Canon Securities, LLC, and holds a
securities Principal's Supervisory Series 39 license along
with Series 22 and 63 licenses. He is a 1975 graduate from
San Francisco State University with a degree in Broadcast
Communications and Advertising. During his broadcast
internship Mr. Kelley gained practical experience in
budgeting, writing, directing and producing corporate media,
including instructional video programs and P.R. related
materials. Mr. Kelley's education and background, combined
with his experience as an accomplished musician and
performer, provides investors with the unique advantage of an
in-depth knowledge of both the investment and entertainment
industry.
Mr. Art Okun
Art Okun is the President and Principal of Canon
Securities LLC. He has been a registered representative
since 1992 with N. Y. Life Securities and has had
principal experience since 1993 in Fixed Income, Private
Placement offerings and Equities. Mr. Okun is a 1984
graduate from Augsburg College in Minneapolis, Minnesota
with a degree in Economics and Finance. Mr. Okun holds a
Principal's Supervisory Series 24 license, General
Securities Series 7, Financial and Operations Principal
Series 27, Series 63, California Insurance Agent License,
and he is a Chartered Financial Analyst Candidate. (CFA)
Mr. Okun is affiliated with Valhalla Motion Pictures and
a fiduciary for both the underwriter and issuer, and has
successfully participated in the funding of many fixed
income bonds and (2) private placement offerings raising
over $25 million.
Item 11.
Security Ownership of Certain Beneficial Owners and
Management
Title of Class
Name and
Address
Percent of
Class
Amount of
Shares
President /CEO
James P.
Gallaher
29821
Imperial
Drive
San Juan
Capistrano,
CA 92675
20%
170,000
Shares
Vice President /
Secretary Treasurer
Art Kingsley
Okun
177 22nd
Street, #30
Costa Mesa,
CA 92627
20%
170,000
Shares
Vice
President/Distribution
Wesley Kelley
208 19th
Street, #4
Huntington
Beach CA
92648
20%
170,000
Shares
Vice President /
Director / Post
Production
Anthony
Cannella
18024 West
Grace Lane
Canyon
Country, CA
91351
20%
170,000
Shares
Vice President / Music
Supervisor
Richard
McHugh
5323 Sailboat
Circle
Agoura Hills,
CA 91301
20%
170,000
Shares
Item 12.
Description of Securities
Series A 13% Cumulative Debenture Notes. Maturity is 24
Months. Cumulative cash dividends is paid out of funds and
assets legally available from the movie, set at an annual
rate of 13% per Note, with semi-annual payments in arrears
commencing four months after the completion of the post-
production work on the movie. The estimated time from
script casting till final post-production is 8 months.
Accrued but unpaid dividends are payable upon redemption.
Interest accrual begins on final closing date.
Item 13.
Interest of Named Expert and Counsel
Not Applicable
Item 14.
Disclosure of Commission Position of Indemnification for
Securities Act Liabilities
The issuer indemnifies Canon Securities LLC and it's
controlling persons against any liability arising under the
Securities Act. Insofar as indemnification for liabilities
arising under the Securities Act of 1933 (the "Act") may be
permitted to directors, officers and controlling persons of
the small business issuer pursuant to the foregoing
provisions, or otherwise, the small business issuer has
been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore,
unenforceable.
In the event that a claim for indemnification against such
liabilities (other than the payment by the small business
issuer of expenses incurred or paid by a director, officer
or controlling person of the small business issuer in the
successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the small
business issuer will, unless in the opinion of its counsel
the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy
as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
Item 15.
Organization Within Last Five Years
Not Applicable
Item 16.
Description of Business
Valhalla Motion Pictures, Inc., (the Company), is a
California S Corporation organized in 2001 to capitalize on
a rising demand for low budget films by audiences
worldwide. The Company's objective is to acquire full-
length movie scripts and produce full-length, rated movies.
The target market for these movies are domestic theatrical,
International theatrical, cable T.V. movie channels,
International television channels, Direct-To-Video channels
and Others. The Company has extensive contacts and working
experience in the production and distribution of the under-
$2-million-segment of the independent film industry.
Valhalla Motion Pictures will draw upon existing
relationships with recognizable writers, producers,
directors and guild actors to create its low-budget films.
The Company expects to grow and achieve above-average
financial returns by re-defining distribution to the market
Although it will use traditional methods of film making and
distribution, Valhalla will build a brand name by
utilizing never before tapped marketing, distribution and
promotional venues. The company will also continue to
research and explore new film making and marketing
technologies, implementing them whenever it is deemed to be
both advantageous and necessary to maintain its competitive
and successful niche in the industry.
Item 16 (b)
Business of Issuer
The Company intends to capitalize on the growing demand for
low budget independent films, without trying to compete
head to head with the major studios. The Company's research
has revealed that while major high budget films continue to
be successful, there is a substantial market for lower
budget independent films. The major studios cannot and will
not compete in lower budget range, because of the enormous
overhead and the economy of scale the major studio
currently enjoy.
In implementing its business plan, the Company will finance
and produce three lower budget movies. The long-term
outlook is to fund 25 movies in 60 months. The Company
will implement the same proven strategy which was utilized
in movies such as the cult classic "Cellblock Sisters".
The Company will acquire proven scripts, cast relatively
famous actors (not too-famous), state-of-the act special
effects and combine all into a high quality full-length
production on a controlled budgets.
The Company will seek strategic alliances with distribution
companies, wherein the Company may still control
distribution rights and implement its own marketing
strategies, while having an agreement with the distribution
entity to place the films in domestic theatrical,
International theatrical, Cable T.V. movie channels,
International Television Channels, Direct-To-Video Channels
and others.
Implementing this business plan allow Valhalla Motion
Picture the potential for accelerated growth of revenue
from each film financed. The Company will actively attend
and feature the film in some of these important festivals
that best suit the genre in Berlin, Cannes, Los Angeles,
Lucarino, New York, Seattle, Sundance, Telluride, Toronto
Venice, Santa Barbara, Palm Springs International. This
will improve development of major distribution channels.
Item 16 (c)
Annual report and audited financial statements will be
voluntary sent to all investors. The public may read and
copy any material filed with SEC at the SEC's Public
Reference Room at 540 Fifty Street, N.W., Washington D.C.
20549. The public may also obtain the information on the
operation of the Public Reference Room by calling the SEC
at (800)-SEC-0330.
(This space intentionally left blank)
Item 17.
Management's Discussion and Analysis or Plan of Operation
The motion picture industry has always been dominated by a
few large studios, however the research shows that the
most significant change in the industry is the recent
success of lower budget, independent films. An independent
film is one that finds its production financing outside the
large studio system. It may end up being distributed by a
large studio, but the "negative cost" has been arranged
from other sources. Many of the large production companies
started as an independent studio with success of a single,
low budget film.
Upon examining the box-office records of three hundred
movies released between May 1985, and January 1986, two
economists became convinced that film viewers were behaving
like Einstein's random gas molecules movement. The evidence
showed that audiences were repeatedly attracted to a small
number of films. Four releases accounted for a fifth of the
total box-office revenue over the sample period.
The chaos of the film industry has to do with the way
millions of filmgoers and potential filmgoers exchange
information. Since people don't know whether they will like
a movie until they see it, they have to rely on what others
tell them. If they hear good things from friends, critics,
or whomever they will probably go and see the film; if they
hear bad things, they won't. The Economists defined this
process as "Information Cascade". Information Cascade,
like droughts, are impossible to forecast. Just as a winter
storm on the plains of Minnesota can affect the weather as
far away as the eastern seaboard, the way in which
filmgoers react to one movie can determine the fate of
dozens of others. A hit or a flop is generated by an
information cascade.
The yardstick definition of a high grossing movie is
revenue equaling three times the production cost. Studies
show that the mean of high grossing movies are dominated by
big events and a sample standard deviation does exist. A
regression analysis of these variables: budget, star power,
log opening screen, sequel, genre, rating, year and a
constant reveal that the highest predictive power for
revenue is number of showings (log opening screen).
Log Revenue {budget, star, log opening, sequel, genre,
rating, year, and constant}
The above regression analysis concluded that budget is not
a good predictor for high revenue. Star power tends to
raise revenue, however the high price and production
associated with high priced stars tend to outweigh its
perceived benefits. Sequels, genre, rating, year have also
been shown to be inferior predictors of high grossing
movies.
Studies show that based on rating, the highest grossing
movies are:
Rating % of High Grossing
"G" 16%
"PG" 16
"R" 11
"RX" 11
In implementing its business plan, the Company will finance
and produce three lower budget movies. The long-term
outlook is to fund 25 movies in 60 months. The breakeven
point for high budget increases the likelihood of lower
profits. An ideal budget range as depicted by three
examples given production budget for the same screenplay,
the box office grosses might look like this:
Budget Budget Budget
$500,000 $1,700,000
$8,000,000
Box Office Gross 3,500,000 19,100,000
29,000,000
Budget * 3 =
Breakeven Point -1,500,000 -5,100,000
-24,000,000
Box office Gross
After Breakeven $2,000,000 $14,000,000
$5,000,000
When a movie reaches approximately three times the film
budget, in each of the three cases, there is a profit
beyond the breakeven point for the investors. The Under $2
million budget full-length motion picture will realize a
better-than expected profits.
(Box office gross are estimates. The underlying assumption
requires that a distribution strategy actively pursue
representation at festivals, create a "buzz", seek domestic
theatrical distribution, foreign theatrical distribution,
home video distribution, cables and other television
distribution that best suit that particular motion picture)
Item 18.
Description of Property
Not Applicable.
Item 19.
Certain Relationship and Related Transaction
Not Applicable
Item 20.
Market for Common Equity and Related Stockholder Matters
Not Applicable
Item 21.
Executive Compensation
At the present time, all of the Company's officers and
directors serve without compensation. Once the offering is
funded, the officers and directors may be paid commensurate
with their activities, experience and ability.
Item 22.
Financial Statement
The financial statement will be filed after December 30th
2001.
Item 23.
Changes In and Disagreements With Accountant on Accounting
and Financial Disclosure.
Not Applicable
Item 24.
Indemnification of Director and Officers
Not Applicable
Item 25.
Other Expenses of Issuance and Distribution
Amount
Due Diligence $ 51,000
Expenses
Registration fees
State taxes
Printing
Legal
Accounting
102,000
Distribution/Show Expenses
26,300
TOTAL $179,300
Item 26.
Recent Sales of Unregistered Securities
Not Applicable.
Item 27.
Exhibits
See exhibits.
Item 28.
Undertakings
Not Applicable.
Index of Exhibits
Underwriting Agreement
Articles of incorporation
By-Laws
Instrument Defining The Rights of Holders of
Debentures
Financials Data
The Rights of Holders of Debentures
Voting
Series A Note holders have no voting rights, except
as otherwise provided by California General
Corporation Law. The Interest payment on the
debentures is cumulative.
Valhalla Motion Pictures
Pro Forma Balance Sheets
2001
ASSETS
Current Assets:
Cash and cash equivalents
$1,551,300.00
Short-term investments
26,300.00
Marketable investments
122,400.00
Accounts receivable
Other current assets
272,000.00
Total current assets
$1,700,000.00
Property and equipment, net
Accumulated depreciation
Other assets
Total assets
1,700,000.00
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable
Current potion of long-term debt
110,500.00
Account payable
153,000.00
Accrued expenses
Accrued compensation
Deferred revenue
Income taxes
Total Current Liabilities
263,500.00
Non-current Liabilities
Long-term debt, less current portion
1,428,000.00
Capital lease obligations
Other liabilities
Deferred income taxes
STOCKHOLDERS' EQUITY
Common stock, $.01 par value; 1,000,000 share
Authorized; 850,000 shares issued.
8,500.00
Additional paid-in-capital
Accumulated deficit
Other equity
Total stockholders' equity
8,500.00
Total liabilities and stockholders, equity
$1,700,000.00
(Projected balance sheet upon completion of funding)
Calculation of Registration Fee
Title of
each class
of
securities
to be
registered
Dollar
amount to
be
registered
Proposed
maximum
offering
price per
unit
Proposed
maximum
aggregate
offering
price
Amount of
registration
fee
Debenture
Notes
$1,700,000
$2500.00
$2500.00
$425.00
2