AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 3, 2004
REGISTRATION NO._________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM SB-2
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
EYE SPAN ENTERTAINMENT NETWORK, INC.
--------------------------------------------
(Name of Small Business Issuer in Its Charter)
NEVADA 8771 20-0409147
(State or Other Jurisdiction (Primary Standard (I.R.S. Employer
of Incorporation or Organization Industrial Classification No.) Identification No.)
41 North Mojave Road
Las Vegas, NV 89101
(702) 651-9100
(Address and Telephone Number of Principal Executive Offices)
Ron Foster, Chief Executive Officer
EYE SPAN ENTERTAINMENT NETWORK, INC.
41 North Mojave Road
Las Vegas, NV 89101
(702) 651-9100
(Name, Address and Telephone Number of Agent for Service)
Ron Foster, Chief Executive Officer
Las Vegas, NV 89101
(702) 651-9100
Copies of all communications to:
Joseph Lambert Pittera, Esq.
Law Offices of Joseph Lambert Pittera
2214 Torrance Boulevard
Torrance, California 90501
Telephone: (310) 328-3588
Facsimile No. (310) 328-3063
1
Approximate Date of Proposed Sale to the Public: As soon as practicable after
the effective date of this Registration Statement.
We hereby amend this Registration Statement on such date or dates as may be
necessary to delay its effective date until we file a further amendment which
specifically states that this Registration Statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of 1933, as
amended, or until the Registration Statement shall become effective on such date
as the Securities and Exchange Commission, acting under Section 8(a), may
determine.
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering.[ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.[ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering.[ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.[ ]
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Maximum Maximum Amount of
Title of Each Class of Securities Amount to be Offering Price Aggregate Registration
to be Registered Registered Per Share[1] Offering Price Fee
- -------------------------------------------------- ------------ ---------------- -------------- ------------
Shares of common stock, $ .001 par value 798,995 $ 2.00 $ 1,597,990 $ 147.92
- -------------------------------------------------- ------------ ---------------- -------------- ------------
Total 798,995 $ 2.00 $ 1,597,990 $ 147.92
================================================== ============ ================ ============== ============
(1) Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457(c) and Rule 457(g) under the Securities Act of
1933.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
2
SUBJECT TO COMPLETION
PROSPECTUS
EYE SPAN ENTERTAINMENT NETWORK, INC.
798,995 SHARES OF COMMON STOCK
This prospectus covers the 798,995 shares of common stock of EYE SPAN
ENTERTAINMENT NETWORK, INC. being offered for resale by certain selling security
holders.
The selling shareholders may sell common stock from time to time in the
principal market on which our stock is traded at the prevailing market price or
in negotiated transactions. Eye Span Entertainment Network, Inc. is deemed an
underwriter of the shares of common stock they are offering. We will pay the
expenses of registering all shares.
You should read this document and any prospectus supplement carefully before you
invest.
Our common stock is not currently registered. Once this registration is
effective, we will apply for a listing on the Over-the-Counter Bulletin Board.
-------------------------------------
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 7.
-------------------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is June 1, 2004
3
PROSPECTUS SUMMARY
This summary contains what we believe is the most important information about us
and the offering. You should read the entire document for a complete
understanding of our business and the transactions in which we are involved. The
purchase of the securities offered by this prospectus involves a high degree of
risk. See the "Risk Factors" section of this prospectus for risk factors.
THE COMPANY
BUSINESS DESCRIPTION
The Company was organized on November 25, 2003. Eye Span Entertainment Network,
Inc. ("ESEN" or the "Company") is itself a start-up, development Stage Company,
and was formed for the purpose of becoming a diversified, full-service
entertainment company. The Company currently has three business lines: film and
television production, film and television distribution, and new
media/television station ownership.
As of February 15, 2004, ESEN, Inc., had the following subsidiaries: Latino
Bingo, Inc., a Nevada corporation; and a 45% equity interest in ValCom
Broadcasting, LLC, a New York limited liability company, which operates KVPS
(Channel 8), an independent broadcaster located in Palm Springs, California. The
Company's subsidiaries are themselves start-up, development stage companies.
ESEN's growth strategy has two parts. The first part includes expanding the
Company's existing film and production business by developing and producing more
programs for its current customers. The second part of the Company's strategy
involves expanding through the creation of a television distribution division,
whereby the Company will not only retain that portion of the revenue that is
lost to third-party distributors, but will also have the ability to launch new
programming into the television marketplace without being dependent on those
third-party distributors.
For additional information, please contact the Company's Web site: www.ESEN.tv
4
THE OFFERING
SELLING SHAREHOLDERS
This Prospectus covers up to 798,995 shares of common stock which may be sold by
the selling stockholders identified in this Prospectus.
SUMMARY FINANCIAL INFORMATION
The financial data set forth below under the captions "Results of Operations
Data" and "Balance Sheet Data," as of February 15, 2004, are derived from the
audited financial statements of Eye Span Entertainment Network, Inc., included
elsewhere in this Prospectus, by Jay J. Shapiro, CPA, independent public
accountants. The data set forth below should be read in conjunction with the
financial statements and notes thereto included elsewhere in this Prospectus and
"Management's Discussion and Analysis or Plan of Operation." Note that current
financial condition is not indicative of future results. The financial data set
forth below for the Quarter ended March 31, 2004 is audited information provided
by management.
RESULTS OF OPERATIONS DATA
CASH FLOWS STATEMENT - Period from Inception: January 7, 2004 to
February 15, 2004
- --------------------------------------------------------------------------------
Operations:
Net loss $ (7,562)
Accounts payable 1,000
---------
Net cash used for operations (6,562)
---------
Financing
Cash contributed by founding shareholders
(150,000 shares on 1-7-04) 15,000
---------
Net cash provided by financing 15,000
---------
Investing
Additions to organization costs (6,600)
---------
Net cash used for investing (6,600)
---------
Net change in cash and equivalents 1,838
Cash and equivalents, beginning of year 0
---------
Cash and equivalents, end of year $ 1,838
=========
5
BALANCE SHEET DATA
Period From Inception January 7, 2004 to February 15, 2004
ASSETS:
Current assets:
Cash and equivalents $ 1838
---------
Total current assets 1,838
Organization Costs, net 6,600
26,000
---------
Total assets $ 8,438
=========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable - shareholder $ 1,000
---------
Total current liabilities 1,000
Contingencies and Commitments (note 4)
Stockholders' equity:
Common stock- shares at $.001 par value;
authorized shares- 75,000,000; shares issued
and outstanding- 150,000 150
Additional Paid- in- Capital 14,850
Accumulated Deficit During the Development Stage (7,562)
---------
Total stockholders' equity 7,438
---------
Total liabilities and stockholders' equity $ 8,438
=========
FORWARD LOOKING STATEMENTS
The discussion in this Prospectus regarding our business and operations includes
"forward looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1996. Such statements consist of any statement other
than a recitation of historical fact and can be identified by the use of
forward-looking terminology such as "may," "expect," "anticipate," "estimate" or
"continue" or the negative thereof or other variations thereon or comparable
terminology. The reader is cautioned that all forward-looking statements are
speculative, and may involve known and unknown risks and uncertainties and other
factors that could cause actual events or results to differ from those referred
to in such forward-looking statements. This disclosure highlights some of the
important risks regarding our business. The risks included should not be assumed
to be the only things that could affect future performance.
6
RISK FACTORS
The Shares are highly speculative in nature, involve a high degree of risk and
should be purchased only by persons who can afford to lose their entire
investment. Accordingly, prospective investors should carefully consider, along
with other matters referred to in this document, the following risk factors in
evaluating us and our business before purchasing any Shares. This Prospectus
contains forward-looking statements which involve risks and uncertainties. Our
actual results could differ materially from those anticipated in these
forward-looking statements as a result of certain factors, including those set
forth in the following risk factors and elsewhere in this prospectus.
You should carefully consider the risks described below before making an
investment decision. Please also note that there are other risks and
uncertainties not presently known to us or that we currently deem immaterial. If
any of the following or such other risks actually occur, our business, financial
condition or results of operations could be materially and adversely affected.
RISKS RELATED TO OUR BUSINESS:
WE HAVE A LIMITED OPERATING HISTORY IN WHICH TO EVALUATE OUR BUSINESS.
The Company has only been in business since November 2003, less than six (6)
months. It has a limited development history and, notwithstanding agreements
reached with ValCom, Inc., generally limited assets. The Company's financial
resources are significantly less than those of other companies that can develop
products similar to ours.
ANY INABILITY TO ADEQUATELY RETAIN OR PROTECT OUR EMPLOYEES, CUSTOMER
RELATIONSHIPS AND PROPRIETARY INTELLECTUAL PROPERTY COULD HARM OUR ABILITY TO
COMPETE.
Competition in the film and television entertainment business is diverse and
fragmented, with scores of companies operating at various levels of product
budget and scope. The market is overwhelmingly dominated by the major Hollywood
studios, with the top-ranked company usually commanding 15 to 20 percent of the
domestic market share in any given year. Our future success and ability to
compete depends in part upon our employees, customer relationships, proprietary
intellectual property, which we attempt to protect with a combination of secrecy
and registration, as well as with our confidentiality procedures and contractual
provisions. These legal protections afford only limited protection and are
time-consuming and expensive to obtain and/or maintain. Further, despite our
efforts, we may be unable to prevent third parties from soliciting our employees
or customers or infringing upon or misappropriating our intellectual property.
Our employees, customer relationships and intellectual property may not be
adequate to provide us with a competitive advantage.
THE DEPARTURE OF CERTAIN KEY PERSONNEL COULD HARM THE FINANCIAL CONDITION OF THE
COMPANY.
Ronald Foster and Stephen Monaco are intimately involved in our business and
have day to day relationships with critical customers. The Company is not able
to afford additional staff to supplement these key personnel. Competition for
highly skilled business, product development, technical and other personnel is
intense, and there can be no assurance that we will be successful in recruiting
new personnel or in retaining our existing personnel. A failure on our part to
retain the services of these key personnel could have a material adverse effect
on our operating results and financial condition. We do not maintain key man
life insurance on any of our employees.
WE FACE NUMEROUS COMPETITORS.
We have many competitors with comparable characteristics and capabilities that
compete for the same group of customers. Our competitors are competent and
experienced and are continuously working to take projects away from us. Some of
our competitors have greater financial, technical, marketing and other resources
than we do. Our ability to compete effectively may be adversely affected by the
ability of these competitors to devote greater resources to the development,
sales and marketing of their products and services than are available to us.
7
INDEPENDENT PRODUCTION COMPANIES.
Consolidation through acquisition has recently reduced the number of independent
production companies in operation. However, barriers to entry remain relatively
low, and management anticipates that the market segments in which it intends to
compete will remain highly competitive.
WE MAY NEED TO RAISE ADDITIONAL CAPITAL IN ORDER TO CONTINUE TO IMPLEMENT OUR
BUSINESS PLAN.
The Company's growth strategy has two parts. The first part includes expanding
its existing film and production business by developing and producing more
programs for its current customers. The second part of the Company's business
strategy involves expanding through the creation of a television distribution
division whereby the Company will not only retain that portion of the revenue
that is lost to third-party distributors, but additionally will have the ability
to launch new programming into the television marketplace without being
dependent on those third-party distributors. To implement this strategy, the
Company will need to raise $5 million. There are no guarantees that sufficient
funds will be raised to implement our strategy or that our strategy will be
successful. Our failure to secure necessary financing may have a material
adverse effect on our financial condition and results of operation
WE MAY NOT BE ABLE TO RAISE CAPITAL ON TERMS ACCEPTABLE TO US.
We require additional funding to complete our growth strategy. Such funding may
be difficult or impossible to acquire. Even if such funding is acquired, the
terms may cause dilution to the current shareholders or impose a heavy financial
burden on the Company. We cannot guarantee that we will be successful in
obtaining capital upon terms acceptable to us, if at all.
THERE IS A LIMITED MARKET FOR OUR COMMON STOCK.
Our common stock is expected to be traded in the Over-the-Counter Bulletin Board
market, and this may cause delays in the timing of transactions and reductions
in the number and quality of securities analysts' reporting on us and the extent
of our coverage in the media. Trading in our common stock may be sporadic, and
at present, there is a limited market for it. There can be no assurance that a
strong market will develop. Even if such a market does develop, it may not be
sustained. As a result, you may find it difficult to dispose of shares of our
common stock and you may suffer a loss of all or a substantial portion of your
investment in our common stock.
FUTURE SALES OF OUR COMMON STOCK BY EXISTING SHAREHOLDERS UNDER RULE 144 COULD
DECREASE THE TRADING PRICE OF OUR COMMON STOCK.
As of May 31, 2004, a total of 3,151,004 shares of our outstanding common stock
were "restricted securities" and could be sold in the public markets only in
compliance with Rule 144 adopted under the Securities Act of 1933 or other
applicable exemptions from registration. Rule 144 provides that a person holding
restricted securities for a period of one year may thereafter sell, in brokerage
transactions, an amount not exceeding in any three-month period the greater of
either (i) 1% of the issuer's outstanding common stock or (ii) the average
weekly trading volume in the securities during a period of four calendar weeks
immediately preceding the sale. Persons who are not affiliated with the issuer
and who have held their restricted securities for at least two years are not
subject to the volume limitation. Possible or actual sales of our common stock
by present shareholders under Rule 144 could have a depressive effect on the
price of our common stock.
WE HAVE NO PLANS TO PAY DIVIDENDS.
Payment of dividends on the shares of our common stock is within the discretion
of our Board of Directors and will depend upon our future earnings, our capital
requirements, our financial condition and other relevant factors. We have no
plan to declare any dividends in the foreseeable future.
THE INTERESTS OF OUR CONTROLLING STOCKHOLDERS COULD CONFLICT WITH THOSE OF OUR
OTHER STOCKHOLDERS.
Our directors and executive officers, together with our other principal
stockholders, own or control approximately 79.8% of our voting securities, after
the offering. These stockholders are able to influence the outcome of
stockholder votes, including votes concerning: the election of directors;
amendments to our articles of incorporation
8
and by-laws; and the approval of significant corporate transactions like
merger(s) or sale of our assets. This controlling influence could have the
effect of delaying or preventing a change in control, even if many of our
stockholders believe it would be in their best interest.
OUR COMMON STOCK IS SUBJECT TO "PENNY STOCK" RULES.
Our common stock is classified as a penny stock by the Securities and Exchange
Commission. At least for the foreseeable future, our common stock will continue
to be deemed to be a "penny stock" as that term is defined in Rule 3a51-1 under
the Securities Exchange Act of 1934. Rule 15g-2 under the Exchange Act requires
broker/dealers dealing in penny stocks to provide potential investors with a
document disclosing the risks of penny stocks and to obtain from these investors
a manually signed and dated written acknowledgement of receipt of the document
before effecting a transaction in a penny stock for the investor's account.
Compliance with these requirements may make it more difficult for holders of our
free-trading common stock to resell their shares to third parties or otherwise,
which could have a material adverse effect on the liquidity and market price of
our common stock. Penny stocks are stocks:
(i) with a price of less than $5.00 per share; or
(ii) that are not traded on NASDAQ or a national securities exchange;
(iii) are issued by companies with net tangible assets of less than: (A)
$2.0 million (if the issuer has been in continuous operation for at
least three years); or (B) $5.0 million (if in continuous operation
for less than three years); or
(iv) which have average revenue of less than $6.0 million for the last
three years.
FORWARD LOOKING ASSESSMENTS PREPARED BY OUR CURRENT MANAGEMENT.
Our ability to accomplish our objectives, and whether or not we will be
financially successful is dependent upon numerous factors, each of which could
have a material effect on the results obtained. Some of these factors are in the
discretion and control of management and others are beyond management's control.
The assumptions and hypothesis used in preparing any forward-looking assessments
of profitability contained herein are considered reasonable by management. There
can be no assurance, however, that any projections or assessments contained
herein or otherwise made by management will be realized or achieved at any
level. Prospective purchasers of our common stock should have this prospectus
document reviewed by their personal investment advisors, legal counsel and/or
accountants to properly evaluate the risks and contingencies purchasing and
investing in our common stock.
USE OF PROCEEDS
This prospectus relates to the registration of 798,995 shares of our common
stock which may be sold from time to time by the selling shareholders. We will
not receive any part of the proceeds of the sale of common stock by the selling
shareholders.
MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDERS MATTERS
As of May 31, 2004, our common stock shares were held by 372 shareholders of
record, including those holders of record through depository accounts. The
transfer agent of our common stock is Transfer Online, Inc., 317 SW Alder
Street, 2nd Floor, Portland, Oregon 97204, Telephone (503) 227-2950, Facsimile
(503) 227-6874.
DIVIDEND POLICY
Our board of directors determines any payment of dividends. We have never
declared or paid cash dividends on our common stock. We do not expect to
authorize the payment of cash dividends on our shares of common stock in the
foreseeable future. Any future decision with respect to dividends will depend on
future earnings, operations, capital requirements and availability, restrictions
in future financing agreements and other business and financial considerations.
9
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
OVERVIEW
On November 25, 2003, Eye Span Entertainment Network, Inc. ("Company"), was
formed in the State of Nevada. The Company was originally formed to engage in
the acquisition of any speculative investment or business opportunity without
restriction as to type or classification. On February 16, 2004, the Company
purchased ValCom, Incorporated's 45% interest in ValCom Broadcasting, consisting
of a joint venture agreement with New Global Communications, Inc. As part of the
purchase agreement, New Global Communications, Inc. agreed to contribute
$500,000 to the joint venture in exchange for a 55% equity interest in ValCom
Broadcasting, LLC, a New York limited liability company, and Eye Span
Entertainment Network, Inc. would contribute certain fixed assets and manage the
operations of the joint venture in return for its 45% interest in ValCom
Broadcasting, Inc. The joint venture operates a newly developed low power
television broadcast station, K08MX-LP, in Palm Springs, California. The
February 16, 2004 Asset Purchase Agreement with ValCom, Inc. also included the
purchase by the Company of 143 titles from the ValCom, Inc. film library, along
with the copyrights, trademarks, equipment, legal options, supplies, spare
parts, inventory, and all other tangible personal property related to bingo
owned and used or useful in the operation of Latino Bingo, Satellite Bingo and
all other related items. Pursuant to the February 16, 2004 Asset Purchase
Agreement, the Company also purchased from ValCom, Inc. a 10% ownership interest
in Las Vegas Studios located at 41 North Mojave Road, Las Vegas, Nevada 89101.
For the purchase of the 45% interest in ValCom Broadcasting, LLC, the 143 film
and television titles, all of the rights, title and interest in Latino Bingo and
Satellite Bingo, as well as the 10% interest in Las Vegas Studios, the Company
issued, on February 28, 2004, 750,000 common shares at $2.00 per share to the
shareholders of interest of ValCom, Inc. as of December 15, 2003.
As of February 15, 2004 the Company had total assets of $8,438.00, comprising
$1,000.00 in accounts payable to a shareholder, 150,000 issued shares of common
stock at $.001 par value for a total of $150.00, additional paid in capital of
$14,850.00 as against an accumulated deficit the development stage of $7,562.00
for total stockholder's equity of $7,438.00 and thus total assets of $8,438.00.
As of February 28, 2004 the Company had issued an additional 750,000 common
shares of its common stock in order to consummate the terms of the February 16,
2004 Asset Purchase Agreement whereby the Company acquired $1,500,000 in
additional assets not reflected in the Company's balance sheet as of February
15, 2004.
At the end of the first quarter of 2004, the Company had not realized any
revenue whatsoever from sales.
The following should be read in conjunction with our Consolidated Financial
Statements and the related notes included elsewhere in this Prospectus.
FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS
Except for historical information contained herein, the matters discussed in
this report are forward-looking statements made pursuant to the safe harbor
provisions of the Securities Litigation Reform Act of 1995. These
forward-looking statements are based largely on our expectation and are subject
to a number of risks and uncertainties, including but not limited to factors
discussed elsewhere in this prospectus and in other documents filed by us with
the Securities and Exchange Commission from time to time. Many of these factors
are beyond our control. Actual results could differ materially from the
forward-looking statements. In light of these risks and uncertainties, there can
be no assurance that the forward-looking information contained in this
prospectus will, in fact, occur.
CRITICAL ACCOUNTING POLICIES
GENERAL
Our discussion and analysis of our financial condition and our plan of operation
and the results of our operations are based upon our financial statements and
the data used to prepare them. The Company's financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States. On an ongoing basis we endeavor and plan to re-evaluate our
judgments and estimates including those related to product variables, overhead
costs, inventories, long-lived assets, income taxes and contingencies. We base
our estimates and judgments on our brief historical experience, knowledge of
current conditions and our beliefs of what could occur in
10
the future considering available information. Actual results may differ from
these estimates under different assumptions and conditions.
RESULTS OF OPERATIONS
The following table sets forth the Statement of Operations from the period from
Inception (January 7, 2004) to February 15, 2004.
Revenue $ 0
Operating expenses:
Cost of revenue 0
General and Administrative (2.562)
Professional Fees (5,000)
----------
Total operating expenses (7,562)
----------
Operating loss (7562)
----------
Provision for income taxes 0
----------
Net loss $ (7,562)
----------
Basic and diluted loss per share: $ (0.05)
----------
Weighted average shares outstanding:
Basic and Diluted 150,000
----------
The Company has incurred a net loss since inception on January 7, 2004 of
$7,562. These losses will hopefully have resulted in net operating loss
carry-forwards when we begin to achieve and then sustain revenues from sales.
The Company recorded its losses without recording them as deferred income tax
assets, offsets against future tax liability, since future utilization of these
losses is subject to the Company's ability to generate taxable income. There was
no taxable income to speak of from the Company's inception on January 7, 2004
through February 15, 2004 since the Company did not generate any sales revenue.
LIQUIDITY AND CAPITAL RESOURCES
The Company at February 15, 2004 had paid-in capital of $14,850 which came from
a promissory note that was then converted into equity. The paid-in capital was
used for startup costs of the Company.
Since inception, the Company has funded its development stage activity through
paid-in capital.
RECENT AUDITING PRONOUNCEMENTS
In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based
Compensation-Transition and Disclosure ("SFAS 148"), which amended SFAS No. 123,
"Accounting for Stock-Based Compensation" to provide alternative methods of
transition for a voluntary change to the fair value based method of accounting
for stock-based compensation. In addition, this statement amended the disclosure
requirements of SFAS No. 123 to require prominent disclosures in both annual and
interim financial statements about the method of accounting for stock-based
employee compensation and the effect of the chosen method on reporting results.
With the exception of SFAS No. 148, the Company does not believe that any
recently issued, but not yet effective, accounting standards, if currently
adopted, will have a material effect on the Company's consolidated financial
position, results of operations or cash flows.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
The Company has had no change of, nor disagreement with, its accountants since
inception.
11
BUSINESS
GENERAL
SPECIAL CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS
Various matters discussed in this document and in documents incorporated by
reference herein, including matters discussed under the caption "Management's
Discussion and Analysis of Financial Condition and Results of Operations," may
constitute forward-looking statements for purposes of the Securities Act and the
Securities Exchange Act. These forward-looking statements may involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of Eye Span Entertainment Network, Inc.
(the "Company") to be materially different from future results, performance or
achievements expressed or implied by such forward-looking statements. The words
"expect," "anticipate," "intend," "plan," "believe," "seek," "estimate," and
other similar expressions are intended to identify such forward-looking
statements. The Company's actual results may differ materially from the results
anticipated in these forward-looking statements due to a variety of factors. All
written or oral forward-looking statements attributable to the Company are
expressly qualified in their entirety by these cautionary statements.
BACKGROUND
Eye Span Entertainment Network, Inc., (the "Company") was organized under the
laws of the State of Nevada on November 25, 2003. Originally the Company was
formed to engage in the acquisition of any speculative investment or business
opportunity without restriction as to type or classification.
On February 24, 2004, the Board of Directors approved appointment of Transfer
Online, Inc. to handle all stock transactions for the Company.
PRODUCTS
We are still in the earliest stage of commercial operations and have realized no
revenues from sales to date (i.e. May 31, 2004. On December 1, 2003 the Company
agreed to acquire the assets of K08MX (Channel 8), an independent broadcaster in
the Palm Springs, California market. Currently a Mas Musica affiliate (Spanish
MTV), the Company intends to reconfigure the format to include entertainment,
sports and local news. The plan is to consolidate Television stations in
high-growth secondary cities with Channel 8 being the seed acquisition. The
Company plans to acquire additional stations that can generate profits at high
margins. The Palm Springs television advertising market is worth approximately
$20 million and Channel 8 anticipates obtaining 10% of that market. The Company
has identified a group of outside investors who will supply the capital for the
Channel 8 acquisition in exchange for a 55% ownership interest in the station.
The Company will control the project and provide programming. As part of the
Company's strategy with respect to programming, the Company acquired 143 film
and television titles from ValCom, Inc. in an Asset Purchase Agreement signed on
February 16, 2004. By acquiring programming and a broadcast studio in Palm
Springs the Company plans on developing additional in-house programming. Some of
the current programming products under development consist of "ATM Bingo" for
syndication, "Latino Bingo" for Telemundo Network, "Marriage-Go-Round," "Fender
Bender," and "Satellite Bingo." The Company has established its own programming
distribution division to be able to distribute its own in-house film and
television productions.
CURRENT STATE OF PROGRESS
On February 16, 2004, the Company purchased ValCom, Incorporated's 45% interest
in ValCom Broadcasting, consisting of a joint venture agreement with New Global
Communications, Inc. As part of the purchase agreement, New Global
Communications, Inc. agreed to contribute $500,000 to the joint venture in
exchange for a 55% equity interest in ValCom Broadcasting, LLC, a New York
limited liability company, and Eye Span Entertainment Network, Inc. would
contribute certain fixed assets and manage the operations of the joint venture
in return for its 45% interest in ValCom Broadcasting, Inc. The joint venture
operates a newly developed low power television broadcast station, K08MX-LP, in
Palm Springs, California. The February 16, 2004 Asset Purchase Agreement with
ValCom, Inc. also included the purchase by the Company of 143 titles from the
ValCom, Inc. film library, along with the copyrights, trademarks, equipment,
legal options, supplies, spare parts, inventory, and all other tangible personal
property related to bingo owned and used or useful in the operation of Latino
Bingo, Satellite Bingo and all
12
other related items. Pursuant to the February 16, 2004 Asset Purchase Agreement,
the Company also purchased from ValCom, Inc. a 10% ownership interest in Las
Vegas Studios located at 41 North Mojave Road, Las Vegas, Nevada 89101. For the
purchase of the 45% interest in ValCom Broadcasting, LLC, the 143 film and
television titles, all of the rights, title and interest in Latino Bingo and
Satellite Bingo, as well as the 10% interest in Las Vegas Studios, the Company
issued, on February 28, 2004, 750,000 common shares at $2.00 per share to the
shareholders of interest of ValCom, Inc. as of December 15, 2003.
Since the February 16, 2004 Asset Purchase Agreement, the Company has actively
begun in-house production of a number of television programs such as "ATM Bingo"
for syndication, "Latino Bingo" for Telemundo Network, "Marriage-Go-Round,"
"Fender Bender," and "Satellite Bingo." The Company has established its own
programming distribution division to be able to distribute its own in-house film
and television productions.
INTERACTIVE TECHNOLOGY
The Company has experience in the interactive communications and entertainment
fields, which brings together elements of the Internet. It has created and
broadcast interactive national and international television programs using
state-of-the-art computer technology, proprietary software programs, satellite
communications, and advanced telecommunications. The Company's management
believes that its experience in developing and delivering interactive television
programs, as well as its ownership of proprietary software enhances its ability
to launch new entertainment and information programs.
CURRENT BUSINESS DIVISIONS
TELEVISION AND FILM PRODUCTION DIVISION
The rise of co-productions and specialty programming for many cable and
broadcast markets continues to drive significant growth in television
production. The Television & Film Production/Distribution division will endeavor
to retain ownership and control distribution of its developed properties in
order to build the asset library of its content-based divisions:
BUSINESS AND LEGAL AFFAIRS. Business and Legal Affairs executives negotiate
contracts and deals with all "above-the-line" talent, including actors, writers,
producers and others. They also handle general corporate, tax, and regulatory
issues affecting the Company. In addition, they document agreements and work
with the Development department to maintain close relationships with the
creative community. The Company will initially use its outside counsel to handle
business and legal affairs, but ultimately hire an employee to handle these
matters when the internal workload justifies it.
MARKETING AND DISTRIBUTION. Marketing and Distribution executives set the
strategy for marketing campaigns. The Company believes it will save substantial
fixed overhead costs as well as demands on senior management's time by
contracting these services out during the first several years of operation.
TELEVISION STATION DIVISION
The Company owns a 45% equity interest in ValCom Broadcasting, LLC, a New York
limited liability company, which operates KVPS (Channel 8), an independent
television broadcaster in the Palm Springs, California market, which is
strategically located in the middle of four major markets including Los Angeles,
Phoenix, Las Vegas and San Diego. The Palm Springs TV advertising market is $20
million strong and Channel 8 anticipates obtaining a significant share of that
market. The Company has identified a group of outside investors who will supply
the capital for the Channel 8 acquisition in exchange for a 55% ownership
interest in the station. The Company will control the project and provide
programming.
FUTURE DIVISIONS
FILM AND VIDEO PROGRAM DISTRIBUTION DIVISION
Attractive opportunities exist for distributing the Company's own programming.
Management will establish a distribution organization utilizing executives and
personnel that have the necessary experience, background and relationships to
launch new programs into the television syndication and network marketplace.
Other than pilot or presentation tapes (for which the Company will utilize its
existing studio and production facilities to keep costs to a minimum), programs
won't be produced unless they are already pre-sold into the marketplace. As a
result, a majority of the marketing and production costs will not be incurred
unless the show is actually launched. The
13
Company will have complete control over the costs and marketing success of its
programming, while additionally having the ability to retain 100% of the revenue
generated from its programming.
OPERATIONS
CRITICAL SUCCESS FACTORS
Management's successful experience to date coupled with strategic analysis
indicate five key success factors for this type of business operation:
- - The ability to EFFICIENTLY MANAGE A STUDIO FACILITY to ensure optimal
financial management, measured growth, consistent quality and service, and
superior utilization of stage space for maximum profit opportunities.
- - The ability to IDENTIFY KEY CREATIVE TALENT AND DEVELOP EFFECTIVE
COLLABORATIVE RELATIONSHIPS with top-caliber actors, writers, directors and
their agents to ensure a consistently high quality flow of projects and material
for television development and distribution.
- - The ability to operate on a LOW-COST, LOW-OVERHEAD BASIS that limits capital
risk and minimizes wasteful spending on projects that serve agendas other than
the creation of shareholders value.
- - The ability to AGGRESSIVELY EXPLOIT EVERY PROFITABLE REVENUE OPPORTUNITY
through proper marketing.
- - The ability to BE FLEXIBLE, NIMBLE AND RESPONSIVE to change in a fast growing
and fast changing industry.
The Company's management is confident that its experienced, well-rounded
executive team possesses the skills, knowledge and acumen to successfully meet
all of these challenges.
KEY OPERATING TACTICS
MINIMIZATION OF CAPITAL RISK
Investments in entertainment content can be extremely risky. The Company will
endeavor to minimize the risk exposure of its investors' capital by undertaking
only those projects where the conservatively estimated potential financial
returns exceed the cost of capital. Management will also strive to reduce risk
through pre-sales, joint ventures, and other license arrangements.
PROJECT-DRIVEN SPENDING
The Company will emphasize controlled growth through the project-driven
expansion of its development and production efforts. "Project-driven" refers to
an operational model, which allows for the initiation of new projects and the
launch of individual divisions only when secure contracts have been established
which manifest the need for additional labor and overhead. This conservative
approach is essential to the management of a "mini studio" that needs to contain
its overhead and operating expenses during lean production periods.
RIGOROUS CONTROL OF OVERHEAD
The Company will maintain strict and diligent control of its overhead by
adhering to a conservative hiring policy and by contracting out as many
administrative functions as possible until the scale of the Company's activities
justify bringing these overhead functions in-house. The Company's initial
staffing plan is to hire only those individuals that are necessary to run the
initial operations. These individuals will primarily be division heads who will
perform all divisional duties until the workload demands that additional
individuals be hired.
The Company believes that it can achieve a substantial reduction of overhead
expenses--as well as a reduction on the demands of senior management's time--by
contracting out certain overhead-intensive logistical activities to third party
providers.
STRATEGY FOR CREATING SHAREHOLDERS VALUE
The Company creates value for its investors and shareholders in two principal
ways:
1. OPTIMIZATION OF THE COMPANY'S PRODUCTIONS OPERATIONS. Management believes
that the general business environment and the specific opportunities for an
improved business mix will lead to a substantially higher level of profitability
for the company's production over the next 2-3 years.
2. CREATE TELEVISION PROGRAM DISTRIBUTION DIVISION. The decade-long trend in
television (and even more recently on the Internet) toward lower-cost,
"non-scripted" programming favors nimble production companies with
14
low overhead and strong production capabilities. The Company is well positioned
to capitalize on this trend by producing low-cost programs like the
reality-based shows that are so successful today. These types of programs can be
mounted quickly, generate relatively quick returns, and be exploited across
multiple media platforms.
Management envisions a phased implementation of the business plan over a
five-year period to ensure a conservative, risk-tempered approach to the
Company's growth.
PHASE I (June 2004-August 2004)
During Phase I the Company has, or proposes to, accomplished the following:
- - Established its core management team.
- - Become a reporting public company with a broad base of shareholders
- - Initiated two accretive acquisitions
PHASE II (September 2004-August 2005)
Now that the Company will have established a stable base of operations and
delivered positive cash flow and earnings, it will be poised for additional
growth. In this phase the company will:
- - Complete acquisitions of post-production facility and first TV station
- - Purchase additional production equipment for rental
- - Establish its television program distribution division
- - Put at least 3 television projects into development
- - Begin sales of 1-2 television projects into the syndication marketplace
PHASE III (September 2005-August 2006)
Now that the Company will have launched a significant base of programming in the
television marketplace, it will be poised for even more growth. In this phase
the company will:
- - Identify additional TV stations for possible acquisition
- - Identify additional studio facilities for possible management agreements
or acquisition
- - Expand its television program distribution division
- - Put at least 3 new television projects into development
- - Begin sales of additional 1-2 television projects into the syndication
marketplace
PHASE IV (September 2006-December 2007)
By Phase IV, management anticipates that it will have sufficient cash flow,
asset base and operating history to raise additional equity capital to expand
its operations. At the beginning of this phase management will re-evaluate its
goals and operating procedures, and develop a long-term plan for the Company's
future growth. As needs arise and opportunities are judged to be attractive, the
Company will extend its activities into new media ancillary businesses on an
opportunistic basis.
TARGET MARKET PROFILE
Every few decades a major new technology or market trend results in a leap in
business opportunities for creators of filmed entertainment. In the 1930s and
1940s the introduction of sound and color photography necessitated a vast
overhaul of the entertainment industry's infrastructure and talent pool. In the
1950s and 1960s the rapid penetration of television led to the growth of a large
programming production industry. In the 1970s and 1980s widespread consumer
adoption of cable delivery and videocassette recorders which enabled film and
television producers to more than double their revenue base in a few short
years. Now in the 21st Century, rapidly accelerating demand for highly
entertaining reality-based programming is driving a new wave of growth and
profitability for American production companies. New distribution technologies
like digital cable and direct-to-home satellite transmission have increased the
number of channels available, and the need for inexpensive programming content
has risen accordingly. Although there are many established companies competing
against one another in the entertainment industry, there are still abundant
opportunities for new startups with sound market niche strategies.
The Company is engaged in the development, financing, and production of
entertainment content for the worldwide audience. The Company intends to focus
its activities primarily on the creation of film and video programs for domestic
television distribution, with a secondary focus on internationally suited
programming. The Company's objective is to build asset value by creating a
library of wholly owned programs whose distribution rights will be exploited in
all markets and forms of media. The Company will also establish divisions to
exploit ancillary revenue opportunities generated by its programs in the book,
recording, new media, and merchandising industries.
15
In the context of the domestic market, television production and distribution is
a mature, moderate growth business, with generally reasonable profit margins.
But within this large and complex industry there are a few areas of high growth
and attractive profitability, most notably the production and distribution of
low-cost and reality programming. The Company will concentrate its business
focus on these more attractive market niches in the industry.
In the worldwide market, the Motion Pictures Association of America has reported
that the last decade has seen a steady worldwide growth in the number of theater
complexes, an increase in television stations, expansion in the new technologies
of cable and satellite broadcasting and the emergence of the Internet as a
future distribution channel. Together, these new distribution mediums have
created a large demand for new entertainment product and with it a need for new
programming.
In order for the Company to expand in its market niche it plans to use the
following strategies:
- PROJECT-DRIVEN. The Company's investment and growth will occur on a strict
"as-needed basis, with projects initiated only when their commercial
prospects are reasonably assured and the investment risk is minimized.
- ECONOMICAL. Management will exercise rigorous control over the Company's
costs, both at the corporate overhead level and the individual project
level. Necessary expenditures will be made only where the expected
financial returns on investment are attractive. The Company will refrain
from engaging in costly bidding wars for talent or material.
- TALENT-FRIENDLY. The Company's principals recognize that success in the
film entertainment industry is driven largely by the ability to attract top
quality creative talent. Management will draw upon its extensive
relationships with talent and strive to create a culture that is attractive
to and supportive of writers, directors, and actors.
- RESPONSIVE. The size and numerous layers of bureaucracy of the major
studio's make the project decision-making process slow and unwieldy. The
Company will differentiate itself and keep costs down by streamlining this
process. Management will take hands-on responsibility for personally
reading scripts and evaluating projects quickly and minimizing the
bureaucracy and the time for making decisions. The Company's close
collaboration with its producers will enable it to prevent catastrophic
cost overruns such as those that occur with the larger studio films.
COMPETITION
Competition in the entertainment industry is extremely fragmented and diverse,
with fairly low barriers to entry. The industry is intensely competitive with
respect to product quality, access to key talent and material, and access to
channels of distribution. In addition, there are many well-established
entertainment competitors with substantially greater financial and other
resources than the Company and with substantially greater financial and other
resources than the Company and with substantially longer operating histories
than the Company. In fact, the major Hollywood studios overwhelmingly dominate
the market with the top-ranked company, Disney, usually commanding between 10%
and 15% of the domestic market share in any given year. The Company believes
that it can be competitive with other producers, studios, distributors and
financiers of entertainment content.
The Company's operations are in competition with all aspects of the
entertainment industry, locally, nationally and worldwide. The Company
experiences competition from three market segments (1) traditional television,
(2) game shows and reality television drama, and (3) movies for television and
theatrical releases.
The Company will succeed by choosing its projects and markets carefully, and by
selecting segments and programming where it can build proprietary competitive
advantages. It will utilize executives with existing background, relationships
and success in their related fields.
With the proper positioning and segment focus, the Company believes it can
insulate itself from the brunt of competition in the entertainment content
business. Since the entertainment sector's revenues from foreign markets are
also growing rapidly, a sound market niche strategy should ensure profitability.
16
EMPLOYEES
As of February 15, 2004, the Company had 3 full-time employees, including two
officers and one professional staff person. None of the Company's employees are
represented by a labor union, nor governed by any collective bargaining
agreements. The Company considers relations with its employees as satisfactory.
DESCRIPTION OF PROPERTY
We presently lease 3,000 square feet of office space at 41 North Mojave Road Las
Vegas, NV 89101 where our telephone number is (702) 651-9100. Our lease is paid
through the end of the current fiscal year.
LEGAL PROCEEDINGS
There are presently no legal proceedings against the Company. The Company's
corporate counsel is Joseph L. Pittera, Esq. of the Law Offices of Joseph L.
Pittera located at 2214 Torrance Boulevard, Suite 101, Torrance, California
90501 with telephone number (310) 328-3588 and facsimile number (310) 328-3063.
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
Our directors, control persons and executive officers are as follows:
NAME AGE POSITION
- ---- --- --------
Ronald Foster 62 President, Chief Executive Officer, Director
Stephen Monaco 42 Executive Vice President, Director
Richard Shintaku 57 Director
Claude Pichard 50 Director
Jeff Gleckman 51 Director
Directors serve until the next annual meeting and until their successors are
elected and qualified. There are no family relationships between any of our
directors or officers.
RONALD FOSTER, PRESIDENT AND CHIEF EXECUTIVE OFFICER -Mr. Foster is presently
the President and Chief Executive Officer as well as a member of the Board of
Directors of Eye Span Entertainment Network, Inc. He has been working with the
Company since its inception. His primary responsibilities include finance,
marketing and technical review. In addition to his responsibilities with the
Company, Mr. Foster has held a number of other management positions over the
years. From 2000 to 2002, he served as Executive Vice President, Secretary and
member of the Board of Directors of ValCom, Inc., a publicly traded company.
From 1986 to 2001, Mr. Foster was President, Chief Executive Officer and
Chairman of the Board of SBI Communications Inc., a publicly traded company.
From 1984 to 1986, he was Executive Vice President and producer of Pioneer Games
of America Satellite Bingo in Albany, Georgia. Mr.Foster was also the owner and
operator of Artist Management & Promotions where he was responsible for
coordinating television entertainers, sports figures and other celebrities for
department store promotions. Previously, he served as President and Director of
El-Phills Inc., and Executive Vice President and member of the Board of
Directors of Golden American Network. From 1984 to 1994, he was the President
and Chief Executive Officer of ROPA Communications Inc., which owned and
operated WTAU-TV-19 in Albany, Georgia. He created and produced "Stock Outlook
87, 88, 89", a video presentation of public companies through Financial News
Network (FNN), a national cable networks.
STEPHEN MONACO, EXECUTIVE VICE PRESIDENT, DIRECTOR-Over the course of the last
20 years, Stephen Monaco has developed an exciting career in the marketing of
intellectual property, new media and entertainment. Mr. Monaco began his career
as a recording engineer in Hollywood, and then transitioned to Warner Bros.
Television in Burbank, California. Mr. Monaco served as co-Chief Executive
Officer and Chief Marketing Officer at Datastorm Technologies, Inc. for ten
years and successfully led the company from its start-up phase through 40
consecutively profitable quarters, to its $71 million acquisition by a NASDAQ
registered company. Mr. Monaco currently serves
17
as the President for ShootFirst Films, LLC, a motion picture and television
production company with offices in Los Angeles and Kansas City. For the last
several years, Mr. Monaco has been a private investor, and has co-founded or
served as a board member for various new media companies. Mr. Monaco has
produced documentary segments for MTV News and commercials that have aired
nationally on network television. He has owned a digital recording studio and
produced music for various rock and pop bands, and Rick Dees, host of the
internationally syndicated weekly radio show, "Rick Dees and the Weekly Top 40."
Mr. Monaco's educational background includes the Missouri Institute of
Technology and the University of Missouri. He graduated from a private
Audio/Video Institute in North Hollywood, California and is a certified
recording engineer.
RICHARD SHINTAKU, DIRECTOR - Mr. Shintaku is a Director of the Company. He is
currently President and Chief Executive Officer of Inter-Continental Associates
Group, LLC and ICAG, Inc. ICAG has been a leading investment and consulting firm
in the Asia/Pacific region since 1973. ICAG is a Merrill Lynch investment
"Alliance Partner." Mr. Shintaku is currently Vice President and principal of
MRI International, Inc., one of the nation's largest medical receivables funding
companies, Executive Vice President and principal of JMR Nevada, Inc. (Harmon
Medical Center) and KK JMR Medical (Japan). Mr. Shintaku is also Chairman and
Chief Executive Officer of Premier Entertainment Services, Inc., (product
placement in movies and TV shows), in Digatech International, Inc. (gaming
technology), owner/proprietor of The Royal Hawaiian Farms (Pistachio/Grapes),
partner of Super Nova Financial Services (New York Mercantile Exchange). Mr.
Shintaku also serves on various board of directors of many Asian and domestic
firms. He has recently been asked to serve as the first Honorary Consul General
of Japan in the State of Nevada.
CLAUDE PICHARD, DIRECTOR - Claude A. Pichard has been a television producer and
director for over thirty years. His experiences range from "live" programming
and commercial work, to regional and national sporting events, and game shows.
Mr. Pichard's career has taken him from Miami, Florida to Hollywood, California
and even, South America. Mr. Pichard is experienced in all aspects of television
production including producing, directing, shooting, editing and
post-production. He is currently employed in the communication field by the
State of Florida.
JEFF GLECKMAN, DIRECTOR - Jeff Gleckman is a director of the Company. Mr.
Gleckman has extensive experience with mergers and acquisitions and has been a
private investor in both private and public companies. From 1998 through 2004
Mr. Gleckman was President of Aadvantage Airwaves, Inc., a large retailer of
cellular telephones. Between 1998 and 2002 Mr. Gleckman was President and Chief
Executive Officer of Five Star Advantage, Inc., one of the largest internet
sites operating out of California. Five Star Advantage's website was rated
number seven in California for being one of the largest internet sites
specializing in the marketing and promotion of products through the internet.
From 1984 through 1998 Mr. Gleckman served as President and Chief Executive
Officer of Tech-ni-comm, Inc., one of the oldest whole-sellers of cellular
telephones and accessories in California and the United States in general. Mr.
Gleckman helped open up Mexico to cellular telephones with a sale to the
government of Mexico in 1990 and established a base office in Mexico City for
ten years. Mr. Gleckman has had extensive sales experience of cellular
telephones throughout South and Central America as well as establishing
manufacturing relationships for telecommunications equipment in Hong Kong,
China, Mexico, and Canada. In the entertainment field Mr. Gleckman has been
Executive Producer of "Spin Cycle" the movie, starring Howie Mandel, and
produced the documentary "Guns of the Old West."
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities and Exchange Act of 1934 may require the
Company's directors and officers, and persons who own more than ten-percent
(10%) of the Company's common stock, to file with the Securities and Exchange
Commission reports of ownership on Form 3 and reports of change in ownership on
Forms 4 and 5. Such officers, directors and ten-percent stockholders are also
required to furnish the company with copies of all Section 16(a) reports they
file. The Company is not a public company yet, however the Company does intend
to comply with the provisions of Section 16(a) of the Exchange Act.
BOARD OF DIRECTORS
Each director is elected at our annual meeting of shareholders and holds office
until the next annual meeting of stockholders, or until the successors are
elected and qualified. Currently we have six directors. The bylaws of the
Company permit the Board of Directors to fill any vacancy and such director may
serve until the next annual
18
meeting of shareholders or until his successor is elected and qualified.
Officers are elected by the Board of Directors and their terms of office are,
except to the extent governed by employment contracts, at the discretion of the
Board. There are no familial relationships between any of the executive officers
and directors. Our officers devote their full time to the business of the
Company.
BOARD COMMITTEES
The Board of Directors has not established an audit committee or a compensation
committee. The Board establishes guidelines and standards relating to the
determination of executive compensation and compensation for our other
employees.
The Board of Directors recommends independent auditors, reviews internal
financial information, reviews audit reports and management letters,
participates in the determination of the adequacy of the internal accounting
control system, reviews the results of audits with independent auditors,
oversees quarterly and yearly reporting, and is responsible for policies,
procedures, and other matters relating to business integrity, ethics and
conflicts of interest.
COMPENSATION OF DIRECTORS AND OFFICERS
Directors and Officers are currently not compensated for serving on our Board of
Directors and all there currently are no Officer salaries.
EXECUTIVE COMPENSATION
The following table sets forth the compensation we paid for services on our
behalf by directors and officers from inception November 25, 2003 through May
31, 2004:
SUMMARY COMPENSATION TABLE
----------------------------
Annual Compensation Long-Term Compensation
--------------------------- ---------------------------------
Awards Payouts
---------------------------------
Securities
Name and Other Underlying
Principal Annual Options/ LTIP All Other
Position Year Salary($) Bonus($) Compensation(#) SARs (#) Payouts Compensation
- -------------------------- ------ --------- -------- --------------- ---------- ------- ------------
Ron Foster 2003/ $0 - - - - -
President, CEO and 2004
Director
Stephen Monaco 2003/ $0 - - - - -
Exec Vice President and 2004
Director
Richard Shintaku 2003/ $0 - - - - -
Director 2004
Claude Pichard 2003/ $0 - - - - -
Director 2004
Jeff Gleckman 2003/ $0 - - - - -
Director 2004
There are no annuity, pension or retirement benefits currently proposed to be
paid to Officers, Directors, or employees in the event of retirement at normal
retirement date pursuant to any existing plan provided by the Registrant. We
have no employment agreements in place at May 31, 2004.
The Company has no formal stock option plan.
19
Equity Compensation Plan Information
------------------------------------
Number of Securities to Weighted Average
be issued upon exercise of Exercise Price of Number of Securities
outstanding options, Outstanding Options, Remaining Available for
warrants and rights Warrants and rights Future Issuance
Plan Category (a) (b) (c)
- ---------------------------- -------------------------- -------------------- -----------------------
Equity compensation plans
approved by security holders
Equity compensation plans 0 $0 -
not approved by security
holders
Total 0 (Aggregate Price) -
$0
The following table sets forth certain information concerning grants of
non-plan options to the Named Executive Officers during the period from
inception (November 25, 2003) to May 31, 2004:
OPTION GRANTS FOR FISCAL YEAR ENDED DECEMBER 31, 2004
Individual
Number of Grants
Securities Percent of
Underlying Total Options
Options granted Exercise or
Granted to Employees Base Price Expiration
Name (shares) in Fiscal Year ($/share) Date
- ----------------------- ---------- -------------- ----------- ----------
Ron Foster 0 - - -
President, CEO and
Director
Stephen Monaco 0 - - -
Exec Vice President and
Director
Richard Shintaku 0 - - -
Director
Claude Pichard 0 - - -
Director
Jeff Gleckman 0 - - -
Director
20
CERTAIN TRANSACTIONS
On January 7, 2004 Vince Vellardita loaned the Company $5,000.00 and received a
promissory note for repayment and on February 1, 2004 converted payment to
common shares at $0.10 per shares or 50,000 shares.
On January 7, 2004 Stephen Monaco loaned the Company $10,000.00 and received a
promissory note for repayment and on February 1, 2004 converted payment to
common shares at $0.10 per shares or 100,000 shares.
On February 16, 2004, the Company purchased ValCom, Incorporated's 45% interest
in ValCom Broadcasting, consisting of a joint venture agreement with New Global
Communications, Inc. As part of the purchase agreement, New Global
Communications, Inc. agreed to contribute $500,000 to the joint venture in
exchange for a 55% equity interest in ValCom Broadcasting, LLC, a New York
limited liability company, and Eye Span Entertainment Network, Inc. would
contribute certain fixed assets and manage the operations of the joint venture
in return for its 45% interest in ValCom Broadcasting, Inc. The joint venture
operates a newly developed low power television broadcast station, K08MX-LP, in
Palm Springs, California. The February 16, 2004 Asset Purchase Agreement with
ValCom, Inc. also included the purchase by the Company of 143 titles from the
ValCom, Inc. film library, along with the copyrights, trademarks, equipment,
legal options, supplies, spare parts, inventory, and all other tangible personal
property related to bingo owned and used or useful in the operation of Latino
Bingo, Satellite Bingo and all other related items. Pursuant to the February 16,
2004 Asset Purchase Agreement, the Company also purchased from ValCom, Inc. a
10% ownership interest in Las Vegas Studios located at 41 North Mojave Road, Las
Vegas, Nevada 89101. For the purchase of the 45% interest in ValCom
Broadcasting, LLC, the 143 film and television titles, all of the rights, title
and interest in Latino Bingo and Satellite Bingo, as well as the 10% interest in
Las Vegas Studios, the Company issued, on February 28, 2004, 750,000 common
shares at $2.00 per share to the shareholders of interest of ValCom, Inc. as of
December 15, 2003 on the basis of 30 shares of ValCom for 1 share of the
Company. The present registration statement is being filed to register the
shares of the Company as distributed to the shareholders of ValCom pursuant to
the February 16, 2004 Asset Purchase Agreement.
21
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information regarding beneficial
ownership of our common stock as of February 15, 2004 (i) by each person who is
known by us to beneficially own more than 5% of our common stock; (ii) by each
of our officers and directors; and (iii) by all of our officers and directors as
a group:
May 15, 2004
------------
Name and Address Number Percentage
Title of Class (1) of Beneficial Owner of Shares Of Class
- ------------------ ------------------- ----------- ----------
Common Stock Stephen Monaco 850,000 21.52
13205 Cedar Street
Leawood, KS 66209
Common Stock Ron Foster 836,875 21.19
41 North Mojave Road
Las Vegas, NV 89101
Common Stock Vince Vellardita 858,308 21.73
24634 Brighton Drive
Suite "A"
Valencia, CA 91355
Common Stock ValCom, Inc. 290,753 7.36
26030 Avenue Hall
Studio #5
Valencia, CA 91355
Common Stock Jeff Gleckman 253,334 6.41
25438 Verne Court
Stevenson Ranch, CA 91381
Common Stock Claude Pichard 50,067 1.27
1315 Dillard Street
Tallahassee, Florida 32317
Common Stock Richard Shintaku 11,667 .30
P.O. Box 530388
Henderson, NV 89053
----------- ----------
Total Shares of 5% or more Beneficial Ownership 3,089,270 78.81
Total Shares of Officers and Directors as a Group 2,001,943 50.69
Total Shares Issued and Outstanding (May 31, 2004) 3,949,999
(1) Except as otherwise indicated, all shares are owned directly. Beneficial
Ownership is determined in accordance with the rules of the Securities and
Exchange Commission and generally includes voting or investment power with
respect to securities. To the best knowledge of ESEN, each of the beneficial
owners listed herein has direct ownership of and sole voting power and
investment power with respect to the shares of our common stock, except as set
forth herein.
22
DESCRIPTION OF SECURITIES
The following description of our capital stock is a summary and is qualified in
its entirety by the provisions of our Articles of Incorporation, with
amendments, all of which have been filed as exhibits to our registration
statement of which this prospectus is a part.
COMMON STOCK
Our Articles of Incorporation authorize the issuance of 75,000,000 shares of
common stock, $.001 par value per share. Holders of shares of common stock are
entitled to one vote for each share on all matters to be voted on by the
shareholders. Holders of common stock have cumulative voting rights. Holders of
shares of common stock are entitled to share ratably in dividends, if any, as
may be declared, from time to time by the Board of Directors, in its discretion,
from funds legally available therefore. In the event of a liquidation,
dissolution or winding up of the Company, the holders of shares of common stock
are entitled to share pro rata all assets remaining after payment in full of all
liabilities. Holders of common stock have no preemptive or other subscription
rights, and there are no conversion rights or redemption or sinking fund
provisions with respect to such shares.
SELLING SECURITY HOLDERS
This prospectus relates to the registration of shares of our common stock. We
will not receive any proceeds from the sale of the shares by the selling
shareholders. The selling shareholders may resell the shares they acquire by
means of this Prospectus from time to time in the public market. The costs of
registering the shares offered by the selling shareholders are being paid by us.
The selling shareholders will pay all other costs of the sale of the shares
offered by them.
The following table sets forth the name of the selling shareholders, the number
of common shares that may be offered by the selling shareholders and the number
of common shares to be owned by the selling shareholders after the offering. The
table also assumes that each selling shareholder sells all common shares listed
by the shareholder's name.
The table below sets forth information as of May 31, 2004.
COMMON SHARES OWNED
NAME OF SHAREHOLDER FOR REGISTRATION
- -------------------------------------------------- -------------- -----------
NO. OF SHARES PERCENTAGE
-------------- -----------
DON MAGIER 153,542 3.89%
TRACEY ELAND 151,783 3.84%
CEDE & CO 133,008 3.37%
E-BLASTER 100,000 2.53%
GREAT ASIAN HOLDINGS PTE LIMITED 70,347 1.78%
KARIEN ANDERSON 50,000 1.27%
LISA EVANS 20,000 *
SAMANTHA HUNT 20,000 *
SHEA KERCE 20,000 *
DEANNA ANDERSON 20,000 *
RADORM TECHNOLOGY LTD. 18,928 *
CLAY HARRISON 9,250 *
STEVE STAMETS 4,667 *
EGAN ELLEDGE 3,583 *
KRISHNA SWAMI ALLADI 3,333 *
DOUGLAS S SCOTT 1,848 *
WAYNE LEPOFF 1,667 *
PHIL MICHALS 1,667 *
STEPHEN WEBER 1,333 *
WOODY FRASER 833 *
KATHY STARK 833 *
RICHARD ABBENANTE 667 *
23
ALAN STONE & COMPANY LLC 667 *
BRADLEY M TATE 667 *
THE ENGLAND PECAN COMPANY INC. 667 *
C/O V CARLYSLE SULLIVAN JR
ATTN LEONARD DAVIES 567 *
% BAHAMAS FINANCIAL CENTER
AL MAKHANIAN 500 *
ANDREW F POLLET & 467 *
SALLY M POLLETT REVOC TRUST
SHARI EDWARDS 417 *
THE SCOTT FAMILY TRUST BETTY L SCOTT 368 *
TRUSTEE/ MARGIE JO SCOTT
ANINDYA NOVYAN BAKRIC 333 *
STEVE MAKHANIAN 333 *
RAJ MITTA 333 *
CAROL SHERMAN 333 *
SAMIN TAN 300 *
RACHEL E ZITTA 267 *
MARGIE JO SCOTT 222 *
LINDA LAYTON 168 *
KRISHNA SWMI ALLADI 167 *
MARGARET GAUTIER 167 *
GEORGE LASAKO 167 *
TROY LINGER 167 *
NALIN RATHOD 167 *
MANOJ KUMAR SAMTANI 167 *
SHERYL A SENER 167 *
DENNIS VELLARDITA 167 *
MARC A WILLE 167 *
MARK GOULDY 150 *
ADVANTAGE DESIGN & TOOL INC 133 *
ERICK E RICHARDSON 133 *
TIM BAKER 117 *
RACHEL DIX 117 *
PATRICIA GOODROW 117 *
ROBERT TUBB 117 *
MAKHANIAN ENTERPRISE 100 *
SANJEEV GUPTA 100 *
LISA WILLIAMS 100 *
ARIE K KRESNADI 93 *
EARL KUESTER 87 *
DYLAN NUGENT 83 *
HEATHER WIMETT 83 *
CHARLES M. FORMAN 73 *
HARLIN RAHARDJO 73 *
RIGOBERTO BAHENA 69 *
LAL RATI 69 *
JOSEPH DALTON & KARIN DALTON JTTEN 67 *
EDELMAN AND EDELMAN CHARTERED 67 *
ALLISON P OKON 67 *
NIMISH P PATEL POPOV MCCULLOUGH 67 *
ANGELA G JOHNSON 53 *
BARRY L COHEN CLIENT TRUST ACCOUNT 46 *
ADAM KLIARSKY 35 *
JAMES WARNOCK 35 *
ROMAN YEREMA 35 *
DEANNA ANDERSON 33 *
TIMOTHY M BAKER 33 *
SUZANNE BURR 33 *
24
RALPH CANTELOPE & JEAN M CANTELOPE TEN ENT 33 *
KERRY DALTON 33 *
ANDRES GARCIA 33 *
THOMAS HASKINS 33 *
MELODEE HOLSINGER 33 *
WEN WEN HSU 33 *
GWEN IVANIC 33 *
STEVE JASIK 33 *
JACOB KELSO 33 *
BISMARKA KURNIAWAN 33 *
ISABEL MARTINEZ 33 *
JESUS MARTINEZ 33 *
VINO NASUTION 33 *
MARCUS OMOTE 33 *
T.R. SEETHARAMAN 33 *
KIMBERLY SPARKS 33 *
GAHN SUWANNUKUL 33 *
T.L.C. PRODUCTIONS INC 33 *
JULIANDUS TOBING 33 *
MATTHEW VELLARDITA & MARIE VELLARDITA JTTEN 33 *
HAROLD FEDERBUSH & LORRAINE FEDERBUSH TR 17 *
ARTHUR G SCHAEFFER 17 *
BRIAN J RICE 15 *
STEPHEN H HOMER 13 *
EDWARD KAMENIR TR 13 *
THE KAMENIR FAMILY TRUST
ROBERT M ROSE & MYRNA A ROSE JTTEN 11 *
BERT LOUIS BOTTA 10 *
ROBERT LEE & DIANE LEE JT TEN 10 *
WALTRAUD RYMAN-SMITH 10 *
CHESTER ANDRZEJCZAK 9 *
FREDERICK RICCIO CONSULTANTS INC 9 *
GRAHAM J PARKES 8 *
MICHAEL J. RUNE 8 *
ROY LEE WEEKLY JR & PAMELA A WEEKLY JT TEN 8 *
EDDIE A GRAHAM 7 *
MICHAEL A HUGGINS 7 *
DAVID KROH 7 *
JODIE ROY ROBINSON & CAROL F ROBINSON JT TEN 7 *
SHELIA MCMULLEN
EARL M BYE 6 *
OPERATOR DISTRIBUTING INC 6 *
CHRISTINE M BRANNIN 5 *
BARBARA G WILLS 5 *
WILLIAM H CANNON & PEGGY E CANNON JTTEN 4 *
KEVIN B. COTTOM 4 *
NEW ENGLAND CIRCUIT SALES 4 *
DARRYL T RONNING & JILL K RONNING JTTEN 4 *
JAMES TOUS & LOIS A. TOUS JTTEN 4 *
LUIS R AVILA 3 *
HENRY BERTOLON & DONNA BERTOLON JT TEN 3 *
BELVA BLOOMER 3 *
GENA CALLIS 3 *
FREDERICK PETER COPPOLA 3 *
JAMES M FRIDENBERG 3 *
LEONARD E GEIGER 3 *
JOEL S. HENRIE 3 *
TIM JAKSA 3 *
25
JAMES R KELLY 3 *
ALBERT KOTOCH 3 *
ROBERT J. KRZYS 3 *
GERARD LAIBEN 3 *
LLOYD L LUCO & JO ANN LUCO JTTEN 3 *
DOROTHEA S. MORRIS 3 *
JULIE A PARKE 3 *
ROBERT F. PETRY 3 *
DON L. SIMON 3 *
ROBERT M. WALT 3 *
GARY L WATTS & LINDA S WATTS JTTEN 3 *
WENDY WILLIAMS 3 *
GEORGE ZAINO 3 *
RICHARD AMBORN 2 *
ATHANASIOS ANAGNOSTOPOULOS 2 *
WILLIAM J ANSTEAD & PATRICIA A ANSTEAD JTTEN 2 *
JOSEPH AVALLONE 2 *
INGRID C. BEEBE 2 *
MATTHEW BURROUGHS PROFIT SHARING PLAN DTD 1/1/84 2 *
JAMES M BURTON 2 *
JEANNE CANNON 2 *
ORAZIO M CELONA 2 *
ROBERT L CHARLEBOIS 2 *
JACKIE CHRISTIANSON & KELY CHRISTIANSON JTTEN 2 *
JOHN R CLARK 2 *
ROSALIE COHEN 2 *
ANTHONY DE SOUSA & BARBARA DE SOUSA JT TEN 2 *
LEONARD J DIMAURO 2 *
FRANK M. ELACQUA 2 *
KATHRYN FREID & ADAM FREID JT TEN 2 *
THOMAS JACK GIBSON 2 *
THOMAS H. GORHAM 2 *
JEFF HUNTLEY 2 *
TERESA A. KAISER 2 *
WALTER F KEANE 2 *
ZOLTAN KROH 2 *
JAMES LANGOS & ROMALUE A LANGOS JTTEN 2 *
CHARLOTTE LARSEN 2 *
DONALD C. MEANEY 2 *
DAN E. MONTENEGRO 2 *
JAMES T POLLARD & GERI A POLLARD JTTEN 2 *
JOHN L ROSS 2 *
GEORGE SCATURRO & GRACE F SCATURRO JTTEN 2 *
PAUL G SCHAMELL 2 *
TRACY SCIARRINO 2 *
MICHAEL D SMITH & BARBARA E SMITH JT TEN 2 *
JOSEPH SPANO & MICHAEL PARKER JT TEN 2 *
STATE CONTROLLER STATE OF CALIFORNIA-DIVISON OF 2 *
COLLECTIONS
RICHARD TRIMMER 2 *
ROBERT ELDEAN TETER 2 *
MICHAEL B. VAGENAS 2 *
STEVE WEBER 2 *
RUTH WEST 2 *
MALVIN F WHITE 2 *
SCOTT WHYTE 2 *
CHARLES T. ALFERES 1 *
RUSSELL F. AMES JR. & DENNIS J. MONTGOMERY TENCOM 1 *
26
LILLIAN F APPELL 1 *
NIKOLAOS ARVANITIS & ANTOINETTE ARVANITIS JTTEN 1 *
KEVIN ASMUS 1 *
DOUGLAS J BAKER 1 *
TULLIO J. BALDI & HARRIETTE E. BALDI JTTEN 1 *
HARRY BANK 1 *
EDWARD N. BAST 1 *
PHILIP D BAUER & SUSAN T BAUER JTTEN 1 *
HERBERT F BENTZ 1 *
ALTON E. BODENHEIMER CTSY ADVANCE INVSTMTS 1 *
BARBARA L BONTJES 1 *
OTTO BORSICH & ROSE C BORSICH JT TEN 1 *
ROSE B BOSWELL & BUDDY D BOSWELL JTTEN 1 *
MARK BREGE & SCOTT BREGE JT TEN 1 *
CATHERINE J. BROBST & RONALD R. BROBST JTTEN 1 *
MARIA BROCCO 1 *
JERRY L BUSH 1 *
MALCOLM CAIN 1 *
DAVID P CALLAHAN & JOAN L CALLAHAN JT TEN 1 *
MICHAEL A CALOGERAKIS 1 *
RON CARAGIAS & SHARON CARAGIAS JT TEN 1 *
RONALD A. CARAGIAS 1 *
CAR-TUNES AUTO SOUND CENTER 1 *
KAREN CEDERSTORM & MARTY CEDERSTORM JTTEN 1 *
WILLIAM J CERAMI 1 *
JERRY J CHALSON & JUNE CHALSON JTTEN 1 *
CRAIG CHAMBLISS C/O BOULDER STEEL 1 *
SANG HO CHUNG & CHI SUNG CHUNG JTTEN 1 *
CHARLES C. CONOVER 1 *
ROBERT F. COULTHARD JR. 1 *
FRANK COURVOISIER & LINDA COURVOISIER JT TEN 1 *
LOU M. COUTINHO 1 *
JOHN B. CROSBY JR. & MARSHA KERST CROSBY JTTEN 1 *
GEORGE CRUZ 1 *
ANGELO F. CUCE & ANTOINETTE CUCE JTTEN 1 *
ANTOINETTE CUCE TR UA 12/8/95 CUCE FAMILY TRUST 1 *
ARNOLD D'AMBROSA 1 *
ELINOR A. DE GENNARO & DONALD E.DE GENNARO JTTEN 1 *
WAYNE W DOBSON 1 *
JAMES A. DOHERTY & SARA K. DOHERTY TEN COM 1 *
CHRISTINE DOORBETAKIS 1 *
RICHARD R DWYER & PHYLLIS L DWYER JT TEN 1 *
STEPHEN S. ECCHER & BEVERLY D. ECCHER JTWROS 1 *
STEPHEN FACEY & BARBARA J. FACEY JT TEN 1 *
DORIS S. FAULK 1 *
JOHN P. FERRANDO & MARY J. FERRANDO JTTEN 1 *
WILLIAM L. FLAVELL & CYNTHIA L. FLAVELL JTTEN 1 *
SHARON L FOLK 1 *
FORKNER LIVING TRUST 1 *
LEE V. FORTNER 1 *
AGLMUT FRANZ 1 *
DENNIS G GARRISON & MARGARET A GARRISON JTTEN 1 *
MARY V. GAVIGAN 1 *
RICHARD GHEZZL 1 *
ANDREW J. GILLESPIE 1 *
WILLIAM J GILMORE 1 *
DONALD GOODWIN & SHEILA GOODWIN JT TEN 1 *
27
HAROLD E. GOODWIN & GAIL GOODWIN JTTEN 1 *
MILDRED L. GORI 1 *
BETH GROVER 1 *
RAYMOND J. GUANTI 1 *
RAYMOND JOHN GUANTI 1 *
ROBIN C HALEY 1 *
CLIFFORD L. HANSOPN & BESSIE F. HANSON JT TEN 1 *
GARY M HARTMAN & DEON L HARTMAN JTTEN 1 *
E DAVID HASKEL & SHARON R HASKEL JTTEN 1 *
FRED HEBBLETHWAITE & MARGARET L. HEBBLETHWAITE 1 *
GEORGE P HERMAN 1 *
DONNA M. HEYNE 1 *
FRANCES C. HINTE 1 *
JAMES J HIPP 1 *
BERNARD B HORTON 1 *
LYNDALL HUGHES 1 *
BENEDICT M JACOBS & ROSEMARY JACOBS JT TEN 1 *
RAYMOND D JAMES JR 1 *
CAROLE JOHNSON 1 *
ROBERT T JONES 1 *
DRU E. KEGREIRS 1 *
FRANK D. KERAGA & BARBARA A. KERAGA JTTEN 1 *
GORO KOBAYASHI 1 *
JOHN J KOSLUCHER & HELEN M KOSLUCHER JTTEN 1 *
JAMES W.KUEKER & MIRJANA KUEKER JTWROS 1 *
MICHAEL LAPORTE 1 *
KARL P. LEBERT 1 *
BERTEL A. LEE 1 *
CLEMET A LEIER & SHIRLEY LEIER JTTEN 1 *
FRED LO GRASSO & MARY LO GRASSO JT TEN 1 *
MICHAEL JOHN LOCILENTO 1 *
ALBINA J. LOGAN 1 *
SANDRA LOGAN 1 *
HAROLD L. LOVE 1 *
SUSAN JANE MALMAD 1 *
LAWRENCE A. MANGINI & JANICE T. MANGINI JTWROS 1 *
KEVIN A. MANIAS 1 *
CHARLES A. MARBLE JR. & LOIS T. MARBLE JTTEN 1 *
ROBERT J MAREK 1 *
RONALD E. MC KELVY 1 *
MORIA MCBREEN & WILLIAM T MCBREEN JTTEN 1 *
DAVE L MCGUERTY 1 *
DAVID D. MINTZ & RACHEL MINTZ JTTEN 1 *
DAVID E MOORE & JO ANN B MOORE JTTEN 1 *
LANCE JASON MORGAN 1 *
FRANK L. MUOLO 1 *
BRENDA A MYERS 1 *
KELLY NELSON 1 *
CHUCK NICOLA & REBECCA J NICOLA JT TEN 1 *
CHARLES NICOLA 1 *
DONALD E. OUTRAM 1 *
MIKELE R PADOVICH 1 *
DAVID PAUL PAHOS 1 *
JAMES A PALLADINO 1 *
CLAIRE PARTYKA 1 *
DONALD E PATTERSON & LATANYA D PATTERSON JTTEN 1 *
THOMAS E PLEMEL & ANNA-MAE PLEMEL JTTEN 1 *
28
MINERVA H. POLING 1 *
FREDERICK W POLLINI 1 *
CHARLES PRATHER & KATIE PRATHER JTTEN 1 *
STEPHEN PRENDERGAST 1 *
TERRY E PRISTAS 1 *
CHRIS G. PRITSIS 1 *
STELLA B RANEY 1 *
ERNEST J ROBIDOUX & BARBARA A ROBIDOUX JT TEN 1 *
ROY M ROLLMAN & SALLY V ROLLMAN JTTEN 1 *
GEORGE N SAITTA 1 *
HANS SCHLAMME & BETH SCHLAMME JT TEN 1 *
DEBRA J. SCHLEGEL 1 *
ROBERT E. SCHLEGEL & ELAINE E. SCHLEGEL JTTEN 1 *
CHAD SCHOENBORN 1 *
BOBBY SENZON & VIRGINIA SENZON JT TEN 1 *
BETTY SHEPARD 1 *
BETTY J SHEPARD 1 *
STANLEY SILVERMAN 1 *
H N SIMPSON III 1 *
JAMES M SINGER 1 *
STEVEN D SIPES 1 *
DONALD R SMITH 1 *
JOHN D SNIDER & POLLY J SNIDER JTTEN 1 *
BETTY J. SPARKS 1 *
MARIE SPECK 1 *
FRAN SPENCER 1 *
LAWRENCE STANASEK 1 *
ROBERT S STAPLES 1 *
ALBERT C STENZEL & DOROTHY M STENZEL JT TEN 1 *
LAWRENCE STIGLITZ 1 *
FELIX STRATER & JUDITH STRATER JTTEN 1 *
DENNIS B SWEENEY 1 *
JOSEPH A. TAVANI & REGINA M. TAVANI JT TEN 1 *
WILLIAM H. TAYLOR III & SUSAN M. TAYLOR JTTEN 1 *
GARY E. TETER & MARY ELLEN TETER JTTEN 1 *
BRUCE R THOMAS 1 *
THOMAS J. DAMON 1 *
JAMES B. THOMAS 1 *
RICHARD THOMAS & F. ROBERTA THOMAS JTTEN 1 *
JOHN L TRYGG & LONA A TRYGG JTTEN 1 *
JOSE L VELASQUEZ 1 *
CHERYL L VERRY 1 *
ROBERT W. WAINWRIGHT 1 *
CAROL S. WALKER 1 *
RONALD W WATSON & LINDA E WATSON JTTEN 1 *
THOMAS P. WEEKS 1 *
DAVID F. WELLS 1 *
HAROLD WEXLER 1 *
MALVIN F. WHITE 1 *
PAUL CHARLES WILKINSON & LEONA B. WILKINSON JTWROS 1 *
JOE D. WILLIAMS 1 *
FRANK A WOELFLIRA 1 *
MELISSA WOHL 1 *
GAIL A. WRIGHT 1 *
GEORGE ZAING 1 *
Total 798,995
* Less than 1% of the issued and outstanding shares.
29
PLAN OF DISTRIBUTION
The shares of common stock owned, or which may be acquired, by the selling
shareholders may be offered and sold by means of this prospectus from time to
time as market conditions permit in the over-the-counter market, or otherwise,
at prices and terms then prevailing or at prices related to the then-current
market price, or in negotiated transactions. These shares may be sold by one or
more of the following methods, without limitation:
- a block trade in which a broker or dealer so engaged will attempt to
sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction;
- purchases by a broker or dealer as principal and resale by such
broker or dealer for its account pursuant to this prospectus;
- ordinary brokerage transactions and transactions in which the broker
solicits purchasers; and
- face-to-face transactions between sellers and purchasers without a
broker/dealer.
In effecting sales, brokers or dealers engaged by the selling shareholders may
arrange for other brokers or dealers to participate. Such brokers or dealers may
receive commissions or discounts from selling shareholders in amounts to be
negotiated.
The selling shareholders and any broker/dealers who act in connection with the
sale of the shares hereunder may be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Acts of 1933, and any commissions
received by them and profit on any resale of the shares as principal might be
deemed to be underwriting discounts and commissions under the Securities Act. We
have agreed to indemnify the selling shareholders, and any securities
broker/dealers who may be deemed to be underwriters against certain liabilities,
including liabilities under the Securities Act as underwriters or otherwise.
We have advised the selling shareholders that they and any securities
broker/dealers or others who may be deemed to be statutory underwriters will be
subject to the prospectus delivery requirements under the Securities Act. We
have also advised each selling shareholder that in the event of a "distribution"
of the shares owned by the selling shareholder, such selling shareholder, any
"affiliated purchasers", and any broker/dealer or other person who participates
in such distribution, may be subject to Rule 102 under the Securities Exchange
Act of 1934 until their participation in that distribution is completed. Rule
102 makes it unlawful for any person who is participating in a distribution to
bid for or purchase stock of the same class as is the subject of the
distribution. A "distribution" is defined in Rule 102 as an offering of
securities "that is distinguished from ordinary trading transactions by the
magnitude of the offering and the presence of special selling efforts and
selling methods". We have also advised the selling shareholders that Rule 101
under the 1934 Act prohibits any "stabilizing bid" or "stabilizing purchase" for
the purpose of pegging, fixing or stabilizing the price of the common stock in
connection with this offering.
We do not intend to distribute or deliver the prospectus by means other than by
hand or mail.
LEGAL MATTERS
The validity of the shares of common stock being offered hereby will be passed
upon for us by Joseph L. Pittera, Esq., 2214 Torrance Boulevard, Suite 101,
Torrance, California 90501.
EXPERTS
The consolidated financial statements of the Company and Subsidiaries as of
February 16, 2004 have been audited by Jay J. Shapiro, CPA, a professional
corporation, certified public accountants, and have been included in this
Prospectus in reliance upon the report of Jay J. Shapiro, CPA and upon their
authority as experts in accounting and auditing.
30
ADDITIONAL INFORMATION
We have filed with the SEC the registration statement on Form SB-2 under the
Securities Act for the common stock offered by this prospectus. This prospectus,
which is a part of the registration statement, does not contain all of the
information in the registration statement and the exhibits filed with it,
portions of which have been omitted as permitted by SEC rules and regulations.
For further information concerning us and the securities offered by this
prospectus, we refer to the registration statement and to the exhibits filed
with it. Statements contained in this prospectus as to the content of any
contract or other document referred to are not necessarily complete. In each
instance, we refer you to the copy of the contracts and/or other documents filed
as exhibits to the registration statement, and these statements are qualified in
their entirety by reference to the contract or document.
The registration statement, including all exhibits, may be inspected without
charge at the SEC's Public Reference Room at 450 Fifth Street, N.W. Washington,
D.C. 20549, and at the SEC's regional offices located at the Woolworth Building,
233 Broadway, New York, New York 10279 and Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of these materials may also
be obtained from the SEC's Public Reference at 450 Fifth Street, N.W., Room
1024, Washington, D.C. 20549, upon the payment of prescribed fees. You may
obtain information on the operation of the Public Reference Room by calling the
SEC at 1-800-SEC-0330.
The registration statement, including all exhibits and schedules and amendments,
has been filed with the SEC through the Electronic Data Gathering, Analysis and
Retrieval system, and are publicly available through the SEC's Web site located
at http://www.sec.gov.
31
INDEPENDENT AUDITORS' REPORT
Board of Directors
EYE SPAN ENTERTAINMENT NETWORK, INC.
We have audited the accompanying balance sheet of EYE SPAN ENTERTAINMENT
NETWORK, INC. (a development stage enterprise), (the" Company") as of February
15, 2004 and the related statements of operations, stockholders' equity and cash
flows for the period from Inception (January 7, 2003) to February 15, 2004.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above presently fairly, in
all material respects, the financial position of the Company as of February 15,
2004 and the results of its operations and its cash flow for the period from
Inception (January 7, 2004) to February 15, 2004 in conformity with accounting
principles generally accepted in the United States of America.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Notes 1 and 2
to the accompanying financial statements, the Company has no established source
of revenue, and may be unable to generate any cash from operations as a result
of contemplated funding or corporate acquisitions, all of which raise
substantial doubt about its ability to continue as a going concern. Management's
plan in regard to these matters is also discussed in Note 2. These financial
statements do not include, any adjustments that might result from the outcome of
these uncertainties.
JAY J. SHAPIRO, CPA
a professional corporation
Los Angeles, California
February 16, 2004
32
EYE SPAN ENTERTAINMENT NETWORK, INC. (a development stage enterprise)
BALANCE SHEET - February 15, 2004
ASSETS:
Current assets:
Cash and equivalents $ 1838
---------
Total current assets 1,838
Organization Costs, net 6,600
26,000
---------
Total assets $ 8,438
=========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable - shareholder $ 1,000
---------
Total current liabilities 1,000
Contingencies and Commitments (note 4)
Stockholders' equity:
Common stock- shares at $.001 par value; authorized
shares-75, 000,000; shares issued and
outstanding- 150,000 150
Additional Paid- in- Capital 14,850
Accumulated Deficit During the Development Stage (7,562)
---------
Total stockholders' equity 7,438
---------
Total liabilities and stockholders' equity $ 8,438
=========
SEE ACCOMPANYING NOTES.
33
EYE SPAN ENTERTAINMENT NETWORK, INC. (a development stage enterprise)
STATEMENT OF OPERATIONS - Period from Inception (January 7, 2004) to February
15, 2004
Revenue $ 0
Operating expenses:
Cost of revenue 0
General and Administrative (2.562)
Professional Fees (5,000)
---------
Total operating expenses (7,562)
---------
Operating loss (7562)
---------
Provision for income taxes 0
Net loss $ (7,562)
---------
Basic and diluted loss per share: $ (0.05)
---------
Weighted average shares outstanding:
Basic and Diluted 150,000
---------
SEE ACCOMPANYING NOTES.
34
EYE SPAN ENTERTAINMENT NETWORK, INC. (a development stage enterprise)
CASH FLOWS STATEMENT- Period from Inception (January 7, 2004) to February 15,
2004
- --------------------------------------------------------------------------------
Operations:
Net loss $ (7,562)
Accounts payable 1,000
---------
Net cash used for operations (6,562)
---------
Financing
Cash contributed by founding shareholders
(150,000 shares on 1-7-04) 15,000
---------
Net cash provided by financing 15,000
---------
Investing
ADDITIONS TO ORGANIZATION COSTS (6,600)
---------
Net cash used for investing (6,600)
---------
Net change in cash and equivalents 1,838
Cash and equivalents, beginning of year 0
---------
Cash and equivalents, end of year $ 1,838
=========
SEE ACCOMPANYING NOTES.
35
EYE SPAN ENTERTAINMENT NETWORK, INC. (a development stage enterprise)
STOCKHOLDERS' EQUITY STATEMENT -Inception (January 7, 2004) to February 15,
2004
COMMON STOCK AND ADDITIONAL PAID-IN CAPITAL
Balance, beginning of period $ 0
Common stock purchased by founding shareholders 15,000
---------
Balance, end of year 15,000
RETAINED EARNINGS
Balance, beginning of year 0
---------
Net loss (7,562)
---------
Balance, end of year (7,562)
---------
Total stockholders' equity $ 7,438
=========
SEE ACCOMPANYING NOTES.
36
EYE SPAN ENTERTAINMENT NETWORK, INC.(a development stage enterprise)
NOTES TO FINANCIAL STATEMENTS - February 15, 2004
NOTE 1 - ACCOUNTING POLICIES:
FINANCIAL REPORTING
The financial statements and accompanying notes are prepared in accordance with
accounting principles generally accepted in the United States of America. EYE
SPAN ENTERTAINMENT NETWORK, INC. (the "Company"), and Nevada Corporation, formed
on November 25, 2003 has yet to commence intended operations and is a
development stage enterprise beginning on January 7, 2004.
ESTIMATES AND ASSUMPTIONS
Preparing financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenue,
and expenses. Examples include estimates of loss contingencies, assumptions such
as amortization of organization costs over sixty months, and determining when
permanent asset impairments have occurred. Actual results and outcomes may
differ from management's estimates and assumptions.
GOING CONCERN
The Company has not generated any operating revenue or cash flow to date and
management provides no assurance that the Company will ever achieve this
objective. (See Note 2).
INTANGIBLE ASSETS
Organization costs including legal fees, filing fees, and registration costs for
formation of the Company are amortized using the straight-line method over sixty
months commencing February 1, 2004.
EMPLOYEE STOCK PLAN
The Company adopts the fair value recognition provision of SFAS 123, ACCOUNTING
FOR STOCK-BASED COMPENSATION, effective February 15 2004, however no options or
stock for services have been issued to date.
NOTE 2- SUBSEQUENT EVENTS, CONTINGENCIES, AND COMMITMENTS:
The Company intends on registering common shares for sale in the near future.
The shares will be used for acquisitions and generation of cash for operating
activities sufficient for twelve months. Management also contemplates
acquisitions of film libraries, film development projects, and entertainment
facilities. However, the Company has yet to generate any revenues and no
assurance is made that any revenues will ever be generated by these contemplated
acquisitions. Therefore, an uncertainty regarding the going concern assumption
exists at February 15, 2004.
37
You should rely only on the information contained in this document or that we
have referred you to. We have not authorized anyone to provide you with
information that is different. This prospectus does not constitute an offer of
any securities other than those to which it relates or an offer to sell, or a
solicitation of any offer to buy, to any person in any jurisdiction where such
an offer or solicitation would be unlawful. Neither the delivery of this
prospectus nor any sale made hereunder shall, under any circumstances, create an
implication that the information set forth herein is correct as of any time
subsequent to the date hereof.
TABLE OF CONTENTS
Page
----
Prospectus Summary............................................ 4
Forward-Looking Statements.................................... 3
Risk Factors.................................................. 7
Use of Proceeds............................................... 10
Market for Common Equity and Related Shareholder's Matters.... 10
Dividend Policy............................................... 10
Management's Discussion and Analysis or Plan of Operation..... 11
Business...................................................... 14
Management.................................................... 20
Certain Transactions.......................................... 24
Principal Shareholders........................................ 25
Description of Securities..................................... 27
Selling Security Holders...................................... 28
Plan of Distribution.......................................... 36
Legal Matters................................................. 36
Experts....................................................... 36
Additional Information........................................ 37
Financial Statements.......................................... F-1
38
798,995 Shares
EYE SPAN ENTERTAINMENT NETWORK, INC.
PROSPECTUS
June 1, 2004
PART TWO
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 78.138 of the Nevada Revised Statute permits a corporation to include in
its Articles of Incorporation provisions eliminating or limiting the personal
liability of directors for monetary damages in an action brought by or in the
right of the corporation for breach of a director's fiduciary duties, subject to
certain limitations. Section 78.7502 of the Nevada Revised Statute requires a
corporation to indemnify its directors and other agents to the extent they incur
expenses in successfully defending lawsuits brought against them by reason of
their status as directors or agents. Section 78.7502(3) also permits a
corporation to indemnify its directors and other agents to a greater extent than
specifically required by law.
Our Articles of Incorporation, as amended, eliminate the personal liability of
directors of the Company for monetary damages to the fullest extent permissible
under Nevada law. Article VI of our Bylaws requires that the Company, to the
maximum extent permitted by Nevada law, indemnify each of its agents against
expenses, judgments, fines, settlements and other amounts actually and
reasonably incurred in connection with any proceeding arising by reason of the
fact such person is or was an agent of the Company. The term "agent" includes
any person who (i) is or was a director, officer, employee or other agent of the
Company, (ii) is or was serving at the request of the Company, as a director,
officer, employee or agent of another business entity or (iii) was a director,
officer, employee or agent of a corporation which was a predecessor corporation
of the Company or of another enterprise at the request of such predecessor
corporation.
The effect of these provisions in our Articles of Incorporation and Bylaws is to
eliminate the rights of our Company and shareholders (through shareholders
derivative suits on behalf of our Company) to recover monetary damages against a
director except as limited by Nevada law. These provisions do not limit or
eliminate the rights of our Company or any shareholders to seek non-monetary
relief. In any proceeding arising by reason of the fact a person is or was an
agent of the Company, the agent will be indemnified if he or she acted in good
faith and in a manner the person reasonably believed to be in the best interests
of the corporation and, in the case of a criminal proceeding, had no reasonable
cause to believe the conduct of the person was unlawful. There can be no
indemnification with respect to any matter as to which the agent is adjudged to
be liable to the Company, unless and only to the extent that the court in which
such proceeding was brought determines upon application that, in view of all of
the circumstances of the case, the agent is fairly and reasonably entitled to
indemnity for expenses as the court shall deem proper.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth an itemization of all estimated expenses, all
of which we will pay, in connection with the issuance and distribution of the
securities being registered:
NATURE OF EXPENSE AMOUNT
- ---------------------------------- ----------
SEC registration fee 147.92
Accounting fees and expenses 5,000.00
Legal fees and expenses 12,500.00
Printing and related expenses 500.00
- ---------------------------------- ----------
TOTAL 18,147.92
================================== ==========
* Estimated.
39
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
The Company had no sales of unregistered securities. The following transactions
did result in a distribution of shares to shareholders of the Company for which
the Company received no funds.
On January 7, 2004 Vince Vellardita loaned the Company $5,000.00 and received a
promissory note for repayment and on February 1, 2004 converted payment to
common shares at $0.10 per shares or 50,000 shares.
On January 7, 2004 Stephen Monaco loaned the Company $10,000.00 and received a
promissory note for repayment and on February 1, 2004 converted payment to
common shares at $0.10 per shares or 100,000 shares.
On February 16, 2004, the Company purchased ValCom, Incorporated's 45% interest
in ValCom Broadcasting, consisting of a joint venture agreement with New Global
Communications, Inc. As part of the purchase agreement, New Global
Communications, Inc. agreed to contribute $500,000 to the joint venture in
exchange for a 55% equity interest in ValCom Broadcasting, LLC, a New York
limited liability company, and Eye Span Entertainment Network, Inc. would
contribute certain fixed assets and manage the operations of the joint venture
in return for its 45% interest in ValCom Broadcasting, Inc. The joint venture
operates a newly developed low power television broadcast station, K08MX-LP, in
Palm Springs, California. The February 16, 2004 Asset Purchase Agreement with
ValCom, Inc. also included the purchase by the Company of 143 titles from the
ValCom, Inc. film library, along with the copyrights, trademarks, equipment,
legal options, supplies, spare parts, inventory, and all other tangible personal
property related to bingo owned and used or useful in the operation of Latino
Bingo, Satellite Bingo and all other related items. Pursuant to the February 16,
2004 Asset Purchase Agreement, the Company also purchased from ValCom, Inc. a
10% ownership interest in Las Vegas Studios located at 41 North Mojave Road, Las
Vegas, Nevada 89101. For the purchase of the 45% interest in ValCom
Broadcasting, LLC, the 143 film and television titles, all of the rights, title
and interest in Latino Bingo and Satellite Bingo, as well as the 10% interest in
Las Vegas Studios, the Company issued, on February 28, 2004, 750,000 common
shares at $2.00 per share to the shareholders of interest of ValCom, Inc. as of
December 15, 2003 on the basis of 30 shares of ValCom for 1 share of the
Company. The present registration statement is being filed to register the
shares of the Company as distributed to the shareholders of ValCom pursuant to
the February 16, 2004 Asset Purchase Agreement
ITEM 27. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
Exhibit No. Description of Document
(1) Articles of Incorporation and By Laws
1.1 Amended and Restated Articles of Incorporation
1.2 By-Laws of the Corporation
(2) Instruments Defining the Rights of Security Holders.
2.1 Specimen common stock certificate
(3) Opinion of Counsel
3.1 Opinion of Joseph L. Pittera, Esq.
(4) Material Contracts
4.1 Asset Purchase Agreement Dated February 16, 2004
(5) Consents
5.1 Consent of Independent Auditor
5.2 Consent of Joseph L. Pittera, Esq. (included in Exhibit 3.1)
40
ITEM 28. UNDERTAKINGS
The undersigned Registrant undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10 (a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to section 13 or section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "Securities Act") may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission (the "Commission") such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or preceding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant 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.
41
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on this Form SB-2 and authorized this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Las Vegas, Nevada on May 31, 2004.
EYE SPAN ENTERTAINMENT NETWORK, INC.
BY:/s/ RON FOSTER
--------------------------------
RON FOSTER,
CHIEF EXECUTIVE OFFICER
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/S/ RON FOSTER CHIEF EXECUTIVE OFFICER MAY 31, 2004
- ---------------------- (PRINCIPAL EXECUTIVE OFFICER)
RON FOSTER
/S/ RON FOSTER PRESIDENT, DIRECTOR MAY 31, 2004
- ----------------------
RON FOSTER
/S/ STEPHEN MONACO EXECUTIVE VICE PRESIDENT MAY 31, 2004
- ---------------------- AND DIRECTOR
STEPHEN MONACO
/S/ RICHARD SHINTAKU DIRECTOR MAY 31, 2004
- ----------------------
RICHARD SHINTAKU
/S/ JEFF GLECKMAN DIRECTOR MAY 31, 2004
- ----------------------
JEFF GLECKMAN
/S/ CLAUDE PICHARD DIRECTOR MAY 31, 2004
- ---------------------
CLAUDE PICHARD
42