U.S.SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13) or 15(d) of The Securities Act of 1934
For the Fiscal Year ended July 31, 2008
Commission File Number 333-146934
PUNCHLINE ENTERTAINMENT, INC.
(Exact Name of Registrant as Specified in its charter)
Nevada
N/A
(State of incorporation) (Employer ID Number)
991 24th Drive, S.E.
Everett, WA 98208
(425)-923-8012
(Address and telephone number of principal executive offices)
Securities registered pursuant to section 12(b) of the Act:
None
Securities registered pursuant to section 12(g) of the Act:
Common stock, $.001 par value
Indicate by check mark if the registrant is a well- known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes ( ) No (X)
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act, Yes ( ) No(X)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by section 13 or 15 (d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.
Yes(X) No ( )
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein and will not be contained, to the best
of the registrant's knowledge, in definitive proxy or information statements
incorporated by references in Part III of this form 10-K or any amendment to
this form 10-K. ( )
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ( ) Accelerated Filer ( )
Non-accelerated filer ( ) Smaller reporting company (X)
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in
rule 12b-2 of the Exchange Act). Yes(X) No ( )
As of October 29, 2008, the registrant had 5,000,000 shares of common stock
issued and outstanding. No market value has been computed based upon the fact
that no active trading market has been established as of October 29, 2008.
TABLE OF CONTENTS
Page
ITEM 1: DESCRIPTION OF BUSINESS..............................................4
ITEM 1A: RISK FACTORS ........................................................4
ITEM 2: DESCRIPTION OF PROPERTY..............................................5
ITEM 3: LEGAL PROCEEDINGS....................................................6
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..................6
ITEM 5: MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.............6
ITEM 6: MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION............7
ITEM 7: FINANCIAL STATEMENTS................................................11
ITEM 8: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES ..............................................23
ITEM 8A: CONTROLS AND PROCEDURES.............................................23
ITEM 9: DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS........24
ITEM 10: EXECUTIVE COMPENSATION..............................................25
ITEM 11: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT......26
ITEM 12: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS......................26
ITEM 13: PRINCIPAL ACCOUNTANT FEES AND SERVICES..............................26
ITEM 14: EXHIBITS............................................................26
ITEM 1 DESCRIPTION OF BUSINESS
ORGANIZATION WITHIN THE LAST FIVE YEARS
We were incorporated on December 11, 2006 under the laws of the State of
Nevada. On that date, Nikolai Malitski was appointed as President, Secretary,
Treasurer, Chief Executive Officer and Director.
IN GENERAL
We are a development stage company. We are engaged in the placing of strength
testing amusement gaming machines called Boxers, in venues such as bars, pubs
and night clubs in the Seattle area, in the State of Washington. As of July 31,
2008, we have acquired one Boxer that has been placed in Lynwood, Washington.
We expect to continually receive revenue from this placement, however there is
no guarantee that this will occur.
Our business plan for the next twelve months is to contact 100 or more
locations in the North West of the United States. We hope to place 15-20
machines in those locations. Our entertainment machine is unique from any
other vending and computer arcade machines. It can easily compliment or
replace existing entertainment machines such as electronic arcade games, darts
and even pool tables. We anticipate that that these activities will cost
approximately $100,000.
In the next 12 months we also anticipate spending an additional $20,000 on
professional fees and general administrative expenses including fees payable in
connection with the filing of this annual report and complying with reporting
obligations.
ITEM 1A RISK FACTORS
IF WE DO NOT OBTAIN ADDITIONAL FINANCING, OUR BUSINESS WILL FAIL
As of July 31, 2008, we had cash in the amount of $2,198.
We currently have no operations and no income. Our business plan calls for
significant expenses in connection with marketing and the placement of
machines. We do not have sufficient funds on hand, therefore if we are unable
to obtain additional funding we will have to cease operations.
The most likely source of future funds available to us, is through the sale of
equity capital. Any sale of share capital will result in the dilution to
existing shareholders.
HIGH RISK OF BUSINESS FAILURE
The current slow-down in general business activity has made it very difficult
for us to re-commence operations and we have no income because the machine that
we have placed is in need of repair. Potential investors should be aware of
the challenges involved in our business and the high rate of failure of this
type of enterprise.
WE NEED TO CONTINUE AS A GOING CONCERN IF OUR BUSINESS IS TO SUCCEED.
Our business condition raises substantial doubt as to our continuance as a
going concern. To date, we have completed only part of our business plan and
we can provide no assurance that we will be able to generate enough revenue
from our business in order to achieve profitability. It is not possible at
this time for us to predict with assurance the potential success of our
business.
BECAUSE MANAGEMENT HAS NO EXPERIENCE IN THE GAMING MACHINE BUSINESS, OUR
BUSINESS HAS A HIGHER RISK OF FAILURE.
Our director has no technical training or experience in operating and maintain
the machines. In addition, we do not have any employees with experience in
this business sector. As a result, we may not be able to recognize and take
advantage of product and market trends in the sector and we may be unable to
accurately predict consumer demand. As well, our directors' decisions and
choices may not be well thought out and our operations, earnings and ultimate
financial success may suffer irreparable harm as a result.
ANY ADDITIONAL FUNDING WE ARRANGE THROUGH THE SALE OF OUR COMMON STOCK WILL
RESULT IN DILUTION TO EXISTING SHAREHOLDERS.
We must raise additional capital in order for our business plan to succeed. Our
most likely source of additional capital will be through the sale of additional
shares of common stock. Such stock issuances will cause stockholders' interests
in our company to be diluted. Such dilution will negatively affect the value of
an investor's shares.
BECAUSE OUR DIRECTOR AND OFFICER OWNS 60% OF OUR OUTSTANDING COMMON STOCK, THEY
WILL MAKE AND CONTROL CORPORATE DECISIONS THAT MAY BE DISADVANTAGEOUS TO
MINORITY SHAREHOLDERS.
Mr. Nikolai Malitski, our director, owns approximately 60% of the outstanding
shares of our common stock. Accordingly, he will have significant influence in
determining the outcome of all corporate transactions or other matters,
including the election of directors, mergers, consolidations and the sale of
all or substantially all of our assets, and also the power to prevent or cause
a change in control. The interests of the individual may differ from the
interests of the other stockholders and thus result in corporate decisions that
are disadvantageous to other shareholders.
OUR PRESIDENT HAS OTHER BUSINESS INTERESTS AND MAY NOT BE ABLE OR WILLING TO
DEVOTE SUFFICIENT TIME TO OUR BUSINESS OPERATIONS, CAUSING OUR BUSINESS TO FAIL
Our president, CEO and Principal Financial Officer, Mr. Malitski intends to
respectively devote 30% of his business time to our affairs. It is possible
that the demands on Mr. Malitski from their other obligations could increase
with the result that he would no longer be able to devote sufficient time to
the management of our business. In addition, Mr. Malitski may not possess
sufficient time for our business if the demands of managing our business
increased substantially beyond current levels.
FORWARD LOOKING STATEMENTS
This annual report contains forward- looking statements that involve risks and
uncertainties. We use words such as anticipate, believe, plan, expect, future,
intend and similar expressions to identify such forward looking statements. You
should not place too much reliance on these forward-looking statements. Our
actual results may differ materially from those anticipated in these forward-
looking statements for many reasons, including the risks faced by us described
in the "Risk Factors" section and elsewhere in this annual report.
ITEM 2 DESCRIPTION OF PROPERTY
THE COMPANY DOES NOT OWN OR LEASE ANY PROPERTY
ITEM 3 LEGAL PROCEEDINGS
We are not currently involved in any legal proceedings and we are not aware of
any pending or potential legal actions.
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of the security holders during the
year ended July 31, 2008.
PART 11
ITEM 5 MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Our shares are quoted on the Over-the-Counter Bulletin Board (OTC BB) under the
symbol "PUNL". The OTCBB is a regulated quotation service that displays real-
time quotes, last sale prices and volume information in over-the counter
securities. To be eligible for quotations on the OTCBB issuers must remain
current in their filings with the SEC or applicable regulatory authority.
Securities quoted on the OTCBB that become delinquent in their required filings
will be removed following a grace period, if they do not make their required
filing in that time. We cannot guarantee that we will continue to have the
funds required to remain in compliance with our reporting obligations.
There has been no active trading of our securities and therefore no high and
low bid pricing. As of the date of this report we had 27 shareholders of
record. We have paid no cash dividends and have no outstanding options.
PENNY STOCK RULES
The Securities and Exchange Commission has also adopted rules that regulate
broker-dealer practices in connection with transactions in penny stocks. Penny
stocks are generally equity securities with a price of less than $5.00 (other
than securities registered on certain national securities exchanges or quoted
on the FINRA system, provided that current price and volume information with
respect to transactions in such securities is provided by the exchange or
system).
A purchaser is purchasing penny stock which limits the ability to sell the
stock. Our shares constitute penny stock under the Securities and Exchange Act.
The shares will remain penny stocks for the foreseeable future. The
classification of penny stock makes it more difficult for a broker-dealer to
sell the stock into a secondary market, which makes it more difficult for a
purchaser to liquidate his/her investment. Any broker-dealer engaged by the
purchaser for the purpose of selling his or her shares in us will be subject to
Rules 15g-1 through 15g-10 of the Securities and Exchange Act. Rather than
creating a need to comply with these rules,
Some broker-dealers will refuse to attempt to sell penny stock.
The penny stock rules require a broker-dealer, prior to transaction in a penny
stock not otherwise exempt from these rules, to deliver a standardized
disclosure document, which:
Contains a description of the nature and level of risk in the
market for penny stock in both public offerings and secondary
trading;
Contains a description of the broker's or dealer's duties to the
customer and of the rights and remedies available to the customer
with respect to a violation of such duties or requirements of the
Securities Act of 1934, as amended;
Contains a brief, clear, narrative description of a dealer market,
including "bid" and "ask" price for the penny stock and the
significance of the spread between the bid and ask price;
Contains a toll-free telephone number for inquiries on
disciplinary actions;
Defines significant terms in the disclosure document or in the
conduct of trading penny stocks; and
Contains such other information and is in such form( including
language, type, size and format) as the Securities and exchange
Commission shall require by rule or regulation;
The broker-dealer also must provide, prior to effecting any transaction in a
penny stock, to the customer:
The bid and offer quotation for the penny stock;
The compensation of the broker-dealer and its salesperson in the
transaction;
The number of shares to which such bid and ask prices apply, or
other comparable information relating to the depth and liquidity
of the market for said stock; and
Monthly account statements showing the market value of each penny
stock held in the customer's account.
In addition, the penny stock rules require that prior to a transaction in a
penny stock not otherwise exempt from these rules; the broker dealer must make
a special written determination that the penny stock is a suitable investment
for the purchaser and receive the purchaser's written acknowledgement of the
receipt of a risk disclosure statement, a written agreement to transactions
involving penny stocks and a signed and dated copy of a suitability statement.
These disclosure requirements will have the effect of reducing the trading
activity in the secondary market for our stock because it will be subject to
these penny stock rules. Therefore stockholders may have difficulty selling
their securities.
REPORTS
We are subject to certain filing requirements and will furnish annual financial
reports to our stockholders, certified by our independent accountant and will
furnish financial reports in our quarterly and annual reports filed
electronically with the SEC. All reports and information filed by us can be
found at the SEC website, www.sec.gov.
ITEM 6 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
RESULTS OF OPERATIONS
We have incurred operating expenses in the amount of $32,423 for the year
ending July 31, 2008. The operating costs were comprised primarily of general
and administrative expenses.
We earned revenues of $915 during the year ending July 31, 2008. Our net
loss for the three month period ending July 31, 2008 was $2,820. Our net loss
from inception through July 31, 2008 was $32,905.
At July 31, 2008, we had total assets of $7,198 consisting of $2,198 in cash
and $5,000 in vending equipment. At the same date we had no liabilities.
We have not attained profitable operations and are dependent upon obtaining
financing to pursue the purchase of amusement games. For these reasons our
auditors believe that there is substantial doubt that we will be able to
continue as a going concern.
Total expenditures over the next twelve months are therefore expected to be
approximately $120,000.
OFF-BALANCE SHEET ARRANGEMENTS
We have no off- balance sheet arrangements.
SIGNIFICANT ACCOUNTING POLICIES
It is suggested that these financial statements be read in conjunction with our
July 31, 2007 audited financial statements and notes thereto, which can be
found in our SB-2 Registration Statement and amendments thereto, on the SEC
website at www.sec.gov under our SEC File Number 333-146934.
BASIS OF PRESENTATION
The accounting and reporting policies of the Company conform to U.S. generally
accepted principles (US GAAP) applicable to development stage companies and are
presented in US dollars.
USE OF ESTIMATES AND ASSUMPTIONS
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets, liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash in bank, money market funds and
certificate to term deposits with maturities of less than three months from
inception, which are readily convertible to known amounts of cash and which, in
the opinion of management, are subject to an insignificant risk of loss in
value.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying value of cash, accounts payable and accrued liabilities
approximates their fair value because of the short maturity of these
instruments. Unless otherwise noted, in the management's opinion the Company is
not exposed to significant interest currency or credit risks arising from these
financial instruments.
FOREIGN CURRENCY TRANSLATION
The financial statements are presented in US dollars. In accordance with
Statement of Financial Accounting Standards No.52 "Foreign Currency
Translation," foreign denominated monetary assets and liabilities are
translated into their United States Dollar equivalents using foreign exchange
rates which prevailed at the balance sheet date. Non monetary assets and
liabilities are translated at the exchange rates prevailing on the transaction
date. Revenues and expenses are translated at average rates of exchange during
the year. Gains or losses resulting from foreign currency transactions are
included in results of operations.
FEDERAL INCOME TAXES
Deferred income taxes are reported for timing differences between items of
income or expense reported in the financial statements and those reported for
income tax purposes in accordance with SFAS Number 109 "Accounting for Income
Taxes", which requires the use of the assets/liability method of accounting for
income taxes. Deferred income taxes and tax benefits are recognized for the
future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets, liabilities, their respective
tax bases and for tax loss and credit carry-forwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The company provides for deferred taxes for the estimated
future tax effects attributable to temporary differences and carry-forwards
when realization is more likely than not.
BASIC AND DILUTED LOSS PER SHARE
The Company computes loss per share in accordance with SFAS 128. "Earnings per
Share", which requires presentation of both basic and diluted earnings per
share on the face of the statement of operations. Basic loss per share is
computed by dividing net loss available to common shareholders by the weighted
average number of outstanding common shares during the period. Diluted loss per
share gives effect to all dilutive potential common share outstanding during
the period. Dilutive loss per share excludes all potential common shares if
their effect is anti-dilutive.
The Company has no potential dilutive instruments and accordingly, basic loss
and diluted share loss per share are equal.
STOCK-BASED COMPENSATION
In December 2004, the FASB issued SFAS No.123R, "Share-based Payments," which
replaced SFAS 123, "Accounting for Stock-based Compensation" and superseded APB
Opinion No. 25, "Accounting for Stock Issued to Employees." In January 2005,
the Securities and Exchange Commission ("SEC") issued Staff Accounting Bulletin
("SAB") No.107, "Share-Based Payment," which provides supplemental
implementation guidance for SFAS No. 123R requires all share- based payments to
employees, including grants of employee stock options, to be recognized in the
financial statements based on the grant date fair value of the award. SFAS
No.123 was to be effective for interim or annual reporting periods beginning on
or after June15, 2005, but in April 2005, the SEC issued a rule that will
permit most registrants to implement SFAS No. 123R at the beginning of their
next fiscal year, instead of the next reporting period as required by SFAS No.
123R. The pro-forma disclosures previously permitted under SFAS No. 123R no
longer will be an alternative to financial statement recognition. Under SFAS
No.123R, the Company must determine the appropriate fair value model to be used
for valuing share-based payments, the amortization method for compensation
costs and the transition method to be used at date of adoption.
The transition methods include prospective and retroactive adoption options.
Under the retroactive options, prior periods may be restated either as of the
beginning of the year of adoption or for all periods presented. The prospective
method requires that compensation expense be recorded for all unvested stock
options and restricted stock at the beginning of the first quarter of adoption
of SFAS No. 123R, while the retroactive methods would record compensation
expense for all unvested stock options and restricted stock beginning with the
first period restated. The Company adopted the modified prospective approach of
SFAS No.123R. The Company did not report any compensation expense for the
period ended July 31, 2008 because there were no stock options outstanding
prior to the adoption or at July 31, 2008.
REVENUE RECOGNITION
The Company recognizes revenue from the sale of products and services in
accordance with Securities and Exchange Commission Staff Accounting Bulletin
No.104 ("SAB"), "Revenue Recognition in Financial Statements". Revenue will
consist of service income and will be recognized only when all of the following
criteria have been met:
(I) Persuasive evidence for an agreement exists;
(II) Service has occurred;
(III) The fee is fixed or determinable; and
(IV) Revenue is reasonably assured.
RECENT ACCOUNTING PRONOUNCEMENTS
In February 2006, the FASB issued SFAS No. 155, "Accounting for Certain Hybrid
Financial Instruments-an amendment of FASB Statements No. 133 and 140", to
simplify and make more consistent the accounting for certain financial
instruments. SFAS No.155 amends SFAS No.133, "Accounting for Derivative
Instruments and Hedging Activities", to permit fair value re-measurements for
any hybrid financial instrument with an embedded derivative that otherwise
would require bifurcation, provided that the whole instrument is accounted for
on a fair value basis. SFAS No.155 amends SFAS No.140, "Accounting for the
Impairment of Disposal of Long-Lived Assets", to allow a qualifying special
purpose entity to hold a derivative financial instrument that pertains to a
beneficial interest other than another derivative financial instrument. SFAS
No. 155 applies to all financial instruments acquired or issued after the
beginning of an entity's first fiscal year that begins after September 15,
2006, with earlier application allowed. This standard is not expected to have
a significant effect on the Company's future reported financial position or
results of operation.
In March 2006, the FASB issued SFAS No.156, "Accounting for Servicing of
Financial Assets", and amendment of FASB Statement No.140, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities".
This Statement requires all separately recognized servicing assets and
servicing liabilities be initially measured at fair value, if practicable,
and permits for subsequent measurement using either fair value measurement with
changes in fair value reflected in earnings or the amortization and impairment
requirements of Statement No. 140. The subsequent measurement of separately
recognized servicing assets and servicing liabilities at fair value eliminates
the necessity for entities that manage the risks inherent in servicing assets
and servicing liabilities with derivatives to qualify for hedge accounting
treatment and eliminates the characterization of declines in fair value as
impairments or direct write-downs. SFAS No. 156 is effective for an entity's
first fiscal year beginning after September 15, 2006. The adoption of this
Statement is not expected to have a significant effect on the Company's future
reported financial position or results of operations.
In September 2006, FASB issued Financial Accounting Standards No.157, "Fair
Value Measurements". This Statement defines fair value, establishes a framework
for measuring fair value in generally accepted accounting principles (GAAP) and
expands disclosures about fair value measurements. This Statement applies under
other accounting pronouncements that require or permit fair value measurements,
the Board having previously concluded in those accounting pronouncements that
fair value is the relevant measurement attribute. Accordingly, this Statement
does not require any new fair value measurements. However, for some entities,
the application of this Statement will change current practice. SFAS 157 is
effective in the first fiscal year that begins after November 15, 2007. The
adoption of this Statement is not expected to have any significant effect on
the Company's future financial position or results of operations.
In September 2006, FASB issued Financial Accounting Standards No 158,
"Employers' Accounting for Defined Benefit Pension and Other Post -Retirement
Plans-an amendment of FASB Statements No.'s 87, 88, 106 and 132(R)". This
Statement improves financial reporting by requiring an employer to recognize
the over-funded or under-funded status of a defined post
retirement plan (other than a multiemployer plan) as an asset or liability in
its statement of financial position and to recognize changes in that funded
status in the year in which the changer occur through comprehensive income of a
business entity or changes in unrestricted net assets of a not- for- profit
organization. This Statement also improves financial reporting by requiring an
employer to measure the funded status of a plan as of the date of its year -end
statement of financial position, with limited exceptions. SFAS 158 is
effective. An employer with publically traded equity securities is required to
initially recognize the funded status of a defined benefit post retirement plan
and to provide the required disclosures as of the end of the first fiscal year
ending after December 15, 2006. The adoption of this Statement is not expected
to have any significant effect on the Company's future reported financial
position or results of operations.
In February 2007, FASB issued Financial Accounting Standards No. 159 "The Fair
Value Option for Financial Assets and Financial Liabilities-Including an
amendment of FASB Statement No. 115". This Statement permits entities to choose
to measure many financial instruments and certain other items at fair value.
The objective is to improve financial reporting by providing entities with the
opportunity to mitigate volatility in reporting earnings caused by measuring
related assets and liabilities differently without having to apply complex
hedge accounting provisions. This Statement is expected to expand the use of
fair value measurement, which is consistent with the Board's long-term
measurement objectives for financial instruments. SFAS 159 is effective as of
the beginning of an entity's first fiscal year that begins after November 15,
2007. The adoption of this Statement is not expected to have any significant
effect on the Company's future reported financial position or results of
operations.
The Company does not expect the adoption of recently issued accounting
pronouncements to have a significant impact on the Company's results of
operations, financial position or cash flow.
As new accounting pronouncements are issued, the Company will adopt those that
are applicable under the circumstances.
ITEM 7 FINANCIAL STATEMENTS
PUNCHLINE ENTERTAINMENT, INC.
Index
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
FINANCIAL STATEMENTS:
BALANCE SHEET - JULY 31, 2008 AND 2007
STATEMENT OF OPERATIONS - YEARS ENDED JULY 31, 2008 AND 2007
STATEMENT OF STOCKHOLDERS' EQUITY - YEARS ENDED JULY 31, 2008 AND 2007
STATEMENT OF CASH FLOWS - YEARS ENDED JULY 31, 2008 AND 2007
NOTES TO FINANCIAL STATEMENTS
GEORGE STEWART, CPA
2301 SOUTH JACKSON STREET, SUITE 101-G
SEATTLE, WASHINGTON 98144
(206) 328-8554 FAX(206) 328-0383
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE BOARD OF DIRECTORS
PUNCHLINE ENTERTAINMENT, INC.
I HAVE AUDITED THE ACCOMPANYING BALANCE SHEET OF PUNCHLINE ENTERTAINMENT, INC.
(A DEVELOPMENT STAGE COMPANY) AS OF JULY 31, 2008 & 2007, AND THE RELATED
STATEMENT OF OPERATIONS, STOCKHOLDERS' EQUITY AND CASH FLOWS FOR YEARS THEN
ENDED AND THE PERIOD FROM DECEMBER 11, 2006 (INCEPTION), TO JULY 31, 2008.
THESE FINANCIAL STATEMENTS ARE THE RESPONSIBILITY OF THE COMPANY'S MANAGEMENT.
MY RESPONSIBILITY IS TO EXPRESS AN OPINION ON THESE FINANCIAL STATEMENTS BASED
ON MY AUDIT.
I CONDUCTED MY AUDIT IN ACCORDANCE WITH THE STANDARDS OF THE PUBLIC COMPANY
ACCOUNTING OVERSIGHT BOARD (UNITED STATES). THOSE STANDARDS REQUIRE THAT I 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. I BELIEVE THAT MY
AUDIT PROVIDES A REASONABLE BASIS FOR MY OPINION.
IN MY OPINION, THE FINANCIAL STATEMENTS REFERRED TO ABOVE PRESENT FAIRLY, IN
ALL MATERIAL RESPECTS, THE FINANCIAL POSITION OF PUNCHLINE ENTERTAINMENT,
INC., (A DEVELOPMENT STAGE COMPANY) AS OF JULY 31, 2008 AND 2007, AND THE
RESULTS OF ITS OPERATIONS AND CASH FLOWS FOR THE YEARS THEN ENDED AND FROM
DECEMBER 11, 2006 (INCEPTION), TO JULY 31, 2008 IN CONFORMITY WITH GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES IN THE UNITED STATES OF AMERICA.
THE ACCOMPANYING FINANCIAL STATEMENTS HAVE BEEN PREPARED ASSUMING THE COMPANY
WILL CONTINUE AS A GOING CONCERN. AS DISCUSSED IN NOTE # 1 TO THE FINANCIAL
STATEMENTS, THE COMPANY HAS HAD NO OPERATIONS AND HAS NO ESTABLISHED SOURCE OF
REVENUE. THIS RAISES SUBSTANTIAL DOUBT ABOUT ITS ABILITY TO CONTINUE AS A
GOING CONCERN. MANAGEMENT'S PLAN IN REGARD TO THESE MATTERS IS ALSO DESCRIBED
IN NOTE # 1. THE FINANCIAL STATEMENTS DO NOT INCLUDE ANY ADJUSTMENTS THAT
MIGHT RESULT FROM THE OUTCOME OF THIS UNCERTAINTY.
SEATTLE, WASHINGTON
OCTOBER 24, 2008
PUNCHLINE ENTERTAINMENT, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
AS OF AS OF
JULY 31, JULY 31,
2008 2007
ASSETS
CURRENT ASSETS
Cash $2,198 $22,618
TOTAL CURRENT ASSETS 2,198 22,618
OTHER ASSETS
Vending Equipment 5,000 5,000
TOTAL OTHER ASSETS 5,000 5,000
TOTAL ASSETS $7,198 $27,618
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $2,003 $
Loan from Director 10,100 100
TOTAL CURRENT LIABILITIES 12,103 100
TOTAL LIABILITIES 12,103 100
STOCKHOLDERS' EQUITY
Common stock, ($0.001 par
value, 75,000,000 shares
authorized; 5,000,000 shares
issued and outstanding
as of July 31, 2007 5,000 5,000
Additional paid-in capital 23,000 23,000
Deficit accumulated during
exploration stage (32,905) (482)
TOTAL STOCKHOLDERS' EQUITY (4,905) 27,518
TOTAL LIABILITIES &
STOCKHOLDERS' EQUITY $7,198 $27,618
PUNCHLINE ENTERTAINMENT, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
DECEMBER 11, 2006
(INCEPTION)
YEAR ENDED YEAR ENDED THROUGH
JULY 31, JULY 31, JULY 31,
2008 2007 2008
REVENUES
Revenues $915 $- $915
TOTAL REVENUES 915 - 915
GENERAL &ADMINISTRATIVE
EXPENSES 33,338 482 33,820
TOTAL GENERAL &
ADMINISTRATIVE
EXPENSES 33,338 (482) 33,820
NET INCOME (LOSS) $(32,423) $(482) $(32,905)
BASIC EARNING (LOSS)
PER SHARE $0.01 $(0.00)
WEIGHTED AVERAGE
NUMBER OF COMMON
SHARES OUTSTANDING 5,000,000 4,565,625
PUNCHLINE ENTERTAINMENT, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FROM DECEMBER 11, 2006 (INCEPTION) THROUGH JULY 31, 2008
DEFICIT
COMMON COMMON ADDITIONAL ACCUMULATED
STOCK STOCK PAID-IN DURING TOTAL
AMOUNT CAPITAL EXPLORATION
STAGE
BALANCE, DECEMBER
11, 2006 $- $- $- $- $-
Stock issued for
cash on February 22,
2007 @ $0.001
per share 3,000,000 $3,000 $3,000
Stock issued for
cash on March 15,
2007 @$0.01
per share 1,500,000 $1,500 $13,500 $15,000
Stock issued for
cash on May 9,
2007 @ $0.02
per share 500,000 $500 $9,500 $10,000
Net loss, July 31,
2007 (482) (482)
BALANCE, JULY 31,
2007 5,000,000 $5,000 $23,000 $(482) $27,518
Net loss, July 31,
2008 (32,423) (32,423)
BALANCE, JULY 31,
2008 5,000,000 $5,000 $23,000 $(32,905) $(4,905)
PUNCHLINE ENTERTAINMENT, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
DECEMBER 11, 2006
(INCEPTION)
YEAR ENDED YEAR ENDED THROUGH
JULY 31, JULY 31, JULY 31,
2008 2007 2008
CASH FLOWS FROM
OPERATING ACTIVITIES
Net income (loss) $(32,423) $(482) $(32,905)
Adjustments to
reconcile net
loss to net cash
provided by (used in)
operating activities:
changes in operating
assets and liabilities:
(Increase) Decrease in
Accounts Payable 0 2,003 2,003
(Increase) Decrease
in Loan from Director 10,000 100 10,100
NET CASH PROVIDED BY
(USED IN) OPERATING
ACTIVITIES (20,420) (382) (20,802)
CASH FLOWS FROM
INVESTING ACTIVITIES
Purchase Vending
Equipment (5,000) (5,000)
NET CASH PROVIDED BY
(USED IN) INVESTING
ACTIVITIES - (5,000) (5,000)
CASH FLOWS FROM
FINANCING ACTIVITIES
Issuance of common
stock 5,000 5,000
Additional paid-in capital 23,000 23,000
NET CASH PROVIDED
BY (USED IN) FINANCING
ACTIVITIES - 28,000 28,000
NET INCREASE
(DECREASE) IN CASH (20,420) 22,618 2,198
CASH AT BEGINNING
OF PERIOD 22,618 - -
CASH AT END OF YEAR $2,198 $22,618 $2,198
SUPPLEMENTAL
DISCLOSURES OF
CASH FLOW
INFORMATION
Cash paid during
year for :
Interest $- $- $-
Income Taxes $- $- $-
Punchline Entertainment, Inc.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2008
1. ORGANIZATION
Punchline Entertainment, Inc. (the "Company") is a Nevada corporation
incorporated on December 11, 2006. The Company is a development stage
company that intends to place vending machines in venues such as bars, pubs
and night clubs in the Seattle, Washington area.
GOING CONCERN AND LIQUIDITY CONSIDERATIONS
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern, which contemplates, among other
things at quarter ending, July 31, 2008, the Company had a loss from
operations of $ 32,905, working capital equity of $ 2,198 and has earned $915
in revenues since inception. The Company intends to fund operations through
equity financing arrangements, which may be insufficient to fund its capital
expenditures, working capital and other cash requirements for the year ending
December 31, 2008.
The ability of the Company to emerge from the development stage is dependent
upon, among other things, revenues and obtaining additional financing to
continue operations.
These factors, among others, raise substantial doubt about the Company's
ability to continue as a going concern. The accompanying financial
statements do not include any adjustments that might result from the outcome
of this uncertainty.
2. SIGNIFICANT ACCOUNTING POLICIES
a) Basis of Presentation
The accounting and reporting policies of the Company conform to U.S.
generally accepted accounting principles (US GAAP) applicable to
development stage companies.
b) Fiscal Periods
The Company's fiscal year end is July 31.
c) Use of Estimates
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amount of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Punchline Entertainment, Inc.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2008
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
d) Cash and Cash Equivalents
Cash and cash equivalents include cash in banks, money market funds, and
certificates of term deposits with maturities of less than three months
from inception, which are readily convertible to known amounts of cash
and which, in the opinion of management, are subject to an insignificant
risk of loss in value. The Company had $2,198 in cash and cash
equivalents at July 31, 2008.
e) Fair Value of Financial Instruments and Derivative Financial Instruments
The Company has adopted Statement of Financial Accounting Standards
("SFAS") Number 119, "Disclosure About Derivative Financial Instruments
and Fair Value of Financial Instruments." The carrying amount of accrued
liabilities approximates its fair value because of the short maturity of
this item. Certain fair value estimates may be subject to and involve,
uncertainties and matters of significant judgment, and, therefore, cannot
be determined with precision. Changes in assumptions could significantly
affect these estimates. The Company does not hold or issue financial
instruments for trading purposes, nor does it utilize derivative
instruments in the management of its foreign exchange, commodity price or
interest rate market risks.
f) Segmented Reporting
SFAS Number 131, "Disclosure About Segments of an Enterprise and Related
Information", changed the way public companies report information about
segments of their business in their quarterly reports issued to
shareholders. It also requires entity-wide disclosures about the
products and services an entity provides, the material countries in which
it holds assets and reports revenues and its major customers.
g) Federal Income Taxes
Deferred income taxes are reported for timing differences between items
of income or expense reported in the financial statements and those
reported for income tax purposes in accordance with SFAS Number 109,
"Accounting for Income Taxes", which requires the use of the
asset/liability method of accounting for income taxes. Deferred income
taxes and tax benefits are recognized for the future tax consequences
attributable to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax
bases, and for tax loss and credit carry-forwards. Deferred tax assets
and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are
expected to be recovered or settled. The Company provides for deferred
taxes for the estimated future tax effects attributable to temporary
differences and carry-forwards when realization is more likely than not.
Punchline Entertainment, Inc.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2008
2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
h) Earnings (Loss) per Share
The Company has adopted Financial Accounting Standards Board ("FASB")
Statement Number 128, "Earnings per Share," ("EPS") which requires
presentation of basic and diluted EPS on the face of the income statement
for all entities with complex capital structures and requires a
reconciliation of the numerator and denominator of the basic EPS
computation to the numerator and denominator of the diluted EPS
computation. In the accompanying financial statements, basic earnings
(loss) per share is computed by dividing net income/loss by the weighted
average number of shares of common stock outstanding during the period.
i) Stock-Based Compensation
The Company adopted the provisions of Statement of Financial Accounting
Standards ("SFAS") No. 123(R), "Share-Based Payment", which establishes
accounting for equity instruments exchanged for employee services. Under
the provisions of SFAS 123(R), stock-based compensation cost is measured
at the grant date, based on the calculated fair value of the award, and
is recognized as an expense over the employees' requisite service period
(generally the vesting period of the equity grant). The Company accounts
for share-based payments to non-employees, in accordance with SFAS 123
(as originally issued) and Emerging Issues Task Force Issue No. 96-18,
"Accounting for Equity Instruments That Are Issued to Other Than
Employees for Acquiring, or in Conjunction with Selling, Goods or
Services". For the period ended January 31, 2008 the Company did not
have any stock-based compensation.
j) Revenue Recognition
The Company recognizes revenue from the sale of products and services in
accordance with Securities and Exchange Commission Staff Accounting
Bulletin No. 104 ("SAB 104"), "Revenue Recognition in Financial
Statements." Revenue will consist of services income and will be
recognized only when all of the following criteria have been met:
(i) Persuasive evidence for an agreement exists;
(ii) Service has occurred;
(iii) The fee is fixed or determinable; and
(iv) Revenue is reasonably assured.
k) Start-up Costs
In accordance with the American Institute of Certified Public Accountants
statement of Position 98-5, "Reporting on the Costs of Start-up
Activities." The company expenses all incurred in connection with the
start-up and organization of the Company.
l) Foreign Currency Transactions
The Company's functional and reporting currency will be the U.S. Dollar.
No significant gains or losses were recorded form inception to July 31,
2008.
Punchline Entertainment, Inc.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2008
3. CAPITAL STOCK
a) Authorized Stock
The Company has authorized 75,000,000 common shares with $0.001 par
value. Each common share entitles the holder to one vote, in person or
proxy, on any matter on which action of the stockholder of the
corporation is sought.
b) Share Issuances
From inception of the Company (Dec 11, 2006), to April 30, 2008, the
Company has issued:
3,000,000 shares of common stock to the director at $.001/per share.
1,500,000 shares were issued to private shareholders at $.01/per share.
500,000 shares to private shareholders at $.02/ per share for a total
of $28,000.
4. INCOME TAXES
The company has incurred operating losses of $ 32,905, which, if unutilized,
will begin to expire in 2027. Future tax benefits, which may arise as a
result of these losses, have not been recognized in these financial
statements, and have been off set by a valuation allowance.
Details of future income tax assets are as follows:
Future income tax assets: 2008
Net operating loss (from inception (Dec 11, 2006 to July 31, 2008) $32,905
Statutory tax rate (combined federal and state) 34%
Non-capital tax loss 11,188
Valuation allowance (11,188)
$-
The potential future tax benefits of these losses have not been recognized in
these financial statements due to uncertainty of their realization. When the
future utilization of some portion of the carryforwards is determined not to
be "more likely than not," a valuation allowance is provided to reduce the
recorded tax benefits from such assets.
Punchline Entertainment, Inc.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2008
5. RECENT ACCOUNTING PRONOUNCEMENTS
The Company does not expect the adoption of recently issued accounting
pronouncements to have any significant impact on the Company's results of
operation, financial position or cash flow.
As new accounting pronouncements are issued, the Company will adopt those that
are applicable under the circumstances.
6. RELATED PARTY TRANSACTIONS
Nikolai Malitski, the sole officer and director of the Company may, in the
future, become involved in other business opportunities as they become
available, thus he may face a conflict in selecting between the Company and his
other business opportunities. The company has not formulated a policy for the
resolution of such conflicts.
Nikolai Malitski, the sole officer and director of the Company, will not be
paid for any underwriting services that he performs on behalf of the Company
with respect to the Company's upcoming SB-2 offering. He will also not receive
any interest on any funds that he advances to the Company for offering expenses
prior to the offering being closed which will be repaid from the proceeds of the
offering While the company is seeking additional capital, Mr. Malitski has
advanced funds to the company to pay for any costs incurred by it. These funds
are interest free. The balance due Mr. Malitski was $ 10,100 on July 31, 2008.
ITEM 8 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES
There have been none.
ITEM 8A CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS, PROCEDURES & CHANGES TO INTERNAL CONTROLS
Under the supervision and with the participation of our management, including
our principal executive officer and principal financial officer, we have
conducted an evaluation of the effectiveness of the design and operation of our
disclosure controls and procedures and defined in Rules 13a-15(e) and 15d-15(e)
under the Securities and Exchange Act of 1934, as of the end of the period
covered by this report. Based on this evaluation, our principal executive
officer and principal financial officer concluded as of the evaluation date,
that our disclosure controls and procedures were effective such that the
material information required to be included in our Securities and Exchange
Commission reports is recorded, processed, summarized and reported within the
time periods specified in SEC rules and forms relating to our Company,
particularly during the period when this report was being prepared.
Additionally, there were no significant changes in our internal controls or in
other factors that could significantly affect these controls subsequent to the
evaluation date. We have not identified any significant deficiencies or
material weakness in our internal controls and therefore there were no
corrective actions taken.
MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining adequate
internal control over financial reporting, as such term is defined in rules
13a-15(f) and 15d-15(f) under the Exchange Act, for the Company.
Internal control over financial reporting includes those policies and
procedures that: (1) pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and dispositions of our
assets; (2) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance with
generally accepted accounting principles and that our receipts and expenditures
are being made only in accordance with authorizations of its management and
directors; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of our assets that
could have a material effect on the financial statements.
Management recognizes that there are inherent limitations in the effectiveness
of any system of internal control and accordingly, even effective internal
control can provide only reasonable assurance with respect to financial
statement preparation and may not prevent or detect material misstatements. In
addition, effective internal control at a point in time may become ineffective
in future periods because of changes in conditions or due to deterioration in
the degree of compliance with our established policies and procedures.
A material weakness is a significant deficiency, or combination of significant
deficiencies, that results in there being a more than remote likelihood that a
material misstatement of the annual or interim financial statements will not be
prevented or detected.
Under the supervision and with the participation of our Chief Executive Officer
and Chief Financial Officer, management conducted an evaluation of the
effectiveness of our internal control over financial reporting, as of the
Evaluation date, based on the framework set forth in Internal Control
Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway
Commission (COSO). Based on its evaluation under this framework, management
concluded that our internal control over financial reporting was not effective
as of the Evaluation date.
Management assessed the effectiveness of the Company's internal control over
financial reporting as of Evaluation date and indentified the following
material weaknesses:
INSUFFICIENT RESOURCES: We have an inadequate number of personal with requisite
expertise in the key functional areas of finance and accounting.
INADEQUATE SEGREGATION OF DUTIES: We have an inadequate number of personal to
properly implement control of procedures.
LACK OF AUDIT COMMITTEE & OUTSIDE DIRECTORS: We do not have a functional audit
committee and we have no outside directors serving on the Company's Board of
Directors, resulting in ineffective oversight in the establishment and
monitoring of required internal controls and procedures.
Management is committed to improving its internal controls and will (1)continue
to use third party specialists to address shortfalls in staffing and to assist
the Company with accounting and finance responsibilities, (2)increase the
frequency
of independent reconciliations of significant accounts which will mitigate the
lack of segregation of duties until there are sufficient personnel and (3)may
consider appointing outside directors and audit committee members in the
future.
Management, including our Chief Executive Officer and Chief Financial Officer,
has discussed the material weakness noted above with our independent public
accounting firm. Due to the nature of this material weakness, there is a more
than remote likelihood that misstatements which could be material to the annual
or interim financial statements could occur that would not be prevented or
detected.
This Annual Report does not include an attestation report of our registered
public accounting firm regarding internal control over financial reporting.
Management's report was not subject to attestations by our registered public
accounting firm pursuant to temporary rules of the SEC that permit us to
provide only management's report in this Annual Report.
PART III
ITEM 9 DIRECTORS AND EXECUTIVE OFFICERS
Our executive officers and directors and their respective ages as of the date
of this annual report is as follows:
DIRECTORS:
Name of Director Age
Nikolai Malitski 58
EXECUTIVE OFFICERS:
Name of Officer Age Office
Nikolai Malitski 58 President, Chief Executive Officer,
Secretary, Treasurer and Director
BIOGRAPHICAL INFORMATION
Set forth below is a brief description of the background and business
experience of our officer and director for the past five years.
Mr. Nikolai Malitski has acted as our President, Chief Executive Officer,
Treasurer, Secretary and Director since our incorporation on December 11, 2006.
He has been involved in maintenance and collection work for amusement games for
getting on for three years. He has developed contacts in the business of
vending arcade games and we intend to take advantage of his acquired expertise
in the field and his accumulated contacts.
Mr. Malitski devotes about 20% of his time planning and organizing activities
on behalf of our Company.
ITEM 10 EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
Name & Nikolai Maliski, President, CEO, CFO, Treasurer and
Title: Director
Year: 2008, 2007, 2006
Salary: 0 0 0
Bonus: 0 0 0
Stock Awards: 0 0 0
Option Awards: 0 0 0
Non-Equity
Incentive Plan
Compensation: 0 0 0
Change in Pension
Value and Non-Qualified
Deferred Compensation
Earnings: 0 0 0
All Other Compensation: 0 0 0
Totals: 0 0 0
STOCK OPTION GRANTS
We have not granted any stock options to the executive officers since our
inception.
CONSULTING AGREEMENTS
We do not have any employment or consulting agreement with Mr. Malitski. We do
not pay them any amount for acting as an officer or director.
ITEM 11 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table provides the name and addresses of each person known to us
to own more than 5% of our outstanding common stock as of the date of this
annual report and by the officer and director, individually. Except as
otherwise indicated, all shares are owned directly.
Amount of Percent of
Title of Class Name & Address Beneficial Owner Beneficial Ownership
Ownership
Common Stock Nikolai Malitski 3,000,000 60%
991 24thDrive S.E.
Everett, WA 98208
U.S.A
Common Stock All Officers & directors 3,000,000 60%
as a group that consists
of one person
The percent of class is based on 5,000,000 shares of common stock issued and
outstanding as of the date of this report.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the year ended July 31, 2008, Mr. Malitski loaned the Company $10,000
for operating costs. He previously loaned the Company $100 for start up costs.
As of July 31, 2008, the Company owes Mr. Malitski $10,100. These loans are
interest free and there are no specific terms for repayment.
None of the following parties has, since our date of incorporation, had any
material interest, direct or indirect, in any transaction with us or in any
presently proposed transaction that has or will materially affect us:
{circle}Any director or officer;
{circle}Any person as a nominee for election as a director;
{circle}Any person who beneficially owns, directly or indirectly,
shares carrying more than 10% of the voting rights attached
to our outstanding shares of common stock;
{circle}Any member of the immediate family of any of the foregoing
persons.
ITEM 13. PRINCIPAL ACCOUNTING FEES AND SERVICES
The total fees charged to the Company for audit and bookkeeping services
including quarterly reviews through July 31, 2008, is $10,900.
Part IV
ITEM 14 EXHIBITS
The following exhibits are included with this annual filing. Those marked with
an asterisk and required to be filed hereunder, are incorporated by reference
and can be found in their entirety in our form SB-2 Registration Statement,
filed under SEC File Number 333-146934, at the SEC website at www.sec.gov:
EXHIBIT
NUMBER DESCRIPTION
3.1 Articles of Incorporation*
3.2 Bylaws*
31.1 Sec. 302 Certification of Principal Executive Officer
31.2 Sec. 302 Certification of Principal Financial Officer
32.1 Sec. 906 Certification of Principal Executive Officer
32.2 Sec. 906 Certification of Principal Financial Officer
* filed as an exhibit to our registration statement on Form SB-2
dated October 27, 2007
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
October 29, 2008 Punchline Entertainment Inc., Registrant
By: /s/ Nikolai Malitski
Nikolai Malitski, President, Chief Executive
Officer, Principal Financial Officer, Principal
Accounting Officer and Director