SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Amendment No. 1
Current Report
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: (Date of earliest event reported) : December 1, 2003
Commission File No. 0-24370
SKREEM ENTERTAINMENT CORPORATION
---------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 33-0611748
------------------------------- ------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
11637 Orpington, Orlando, FL 32817
------------------------------------------------------
(Address of principal executive offices)
407-207-0400
--------------------------------------
(Issuer telephone number)
Stanford Capital Corporation
10th Floor, Chiyu Bank Bld.
No. 78. Des. Voeux Rd., Central Hong Kong
----------------------------------------------------------
Former Name and Address
Item 1. Changes in Control of the Registrant
As a result of the acquisition of Skreem Entertainment Corporation, control of
the Registrant changed to the fomer shareholder of Skreem Entertainment
Corporation. The new principal shareholders, their shareholdings and percentages
are as follows:
Shareholder Shares Owned Percentage
Martin Consultants, Inc 15,000,000 57.71%
Jeff Martin. 7,000,000 26.93%
Item 2. Acquisitions or Dispositions of Assets
A. On December 1, 2003, the acquisition of Stanford Capital International Ltd.
was recinded in exchange for 50,000 per split common shares of the
Registrant.
B. On January 30, 2004, the Registrant acquired all of the issued and
outstanding shares of Skreem Entertainment Corporation ("Skreem") for
22,000,000 post reverse split common shares. Skreem is in the business of
searching for recording talent and promoting and funding such talent.
Item 5. Other Events.
On March 16, 2004, the Registrant filed a Certificate of Amendment with
the Delaware Secretary of State changing the Company's name to Skreem
Entertainment Corporation and reverse splitting the Company's shares on a one
(1) for (5) five basis.
Item 7. Financial Statements and Exhibits
a) Financial Statements of the Business Acquired
SKREEM ENTERTAINMENT CORPORATION
INDEX TO FINANCIAL STATEMENTS
Pages
Report of Independent Auditors F-1
Balance Sheets as of December 31, 2003 and 2002 F-2
Statements of Operations for the years ended
December 31, 2003 and 2002 and the period from
Inception (August 19, 1999) to December 31, 2003 F-3
Statements of Changes in Shareholders' Deficit
From inception (August 19, 1999) to December 31, 2003 F-4
Statements of Cash Flows for the years ended
December 31, 2003 and 2002 and the period from
Inception (August 19, 1999) to December 31, 2003 F-5
Notes to Financial Statements F-6
Unaudited Balance Sheet as of March 31, 2004 F-13
Unaudited Statements of Operations for the three months Ended
March 31, 2004 and 2003 and the period from
Inception (August 19, 1999) to March 31, 2004 F-14
Unaudited Statements of Cash Flows for the three months
Ended March 31, 2004 and 2003 and the period from
Inception (August 19, 1999) to March 31, 2004 F-15
Notes to Unaudited Financial Statements F-16
Unaudited Proforma Financial Information F-17
INDEPENDENT AUDITOR'S REPORT
The Board of Directors and Shareholders
Skreem Entertainment Corporation
We have audited the accompanying balance sheets of Skreem Entertainment
Corporation (a development stage company) (the "Company"), as of December 31,
2003 and 2002, and the related statements of operations, shareholders' deficit
and cash flows for the years then ended and for the period from August 19, 1999
(date of inception) through December 31, 2003. 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 present fairly, in
all material respects, the financial position of Skreem Entertainment
Corporation as of December 31, 2003 and 2002, and the results of its operations,
and its cash flows for the years then ended and for the period August 19, 1999
(date of inception), through December 31, 2003 in conformity with accounting
principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company is in the development stage and has suffered
recurring losses from operations and had a net capital deficit, which raise
substantial doubt about its ability to continue as a going concern. Management
plans to continue funding the operation through an affiliate owned by the sole
shareholder and also plans to sell the Company. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
/s/ Thomas Leger & Co. L.L.P.
Thomas Leger & Co. L.L.P.
June 15, 2004
Houston, Texas
F-1
SKREEM ENTERTAINMENT CORPORATION
(A Development Stage Company)
BALANCE SHEETS
DECEMBER 31, 2003 AND 2002
ASSETS
2003 2002
---- ----
CURRENT ASSETS
Cash and cash equivalents $ 14,603 $ 3,170
Prepaid expenses
4,408 -
-------- --------
Total current assets 19,011 3,170
-------- --------
PROPERTY AND EQUIPMENT, net 8,168 10,891
DEPOSITS 19,920 -
-------- --------
TOTAL ASSETS $ 47,099 $ 14,061
======== ========
LIABILITIES AND SHAREHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 20,561 $ 9,254
Accrued interest payable to affiliates 6,205 143,493
Notes payable to affiliates 369,000 1,055,600
--------- ----------
Total current liabilities 395,766 1,208,347
---------- ----------
SHAREHOLDERS' DEFICIT
Preferred stock, par value $0.001, 5,000,000
shares authorized, no shares issued and outstanding
- -
Common stock, par value $0.001, 50,000,000 shares authorized,
63,000 and 20,000 shares issued and outstanding, respectively
63 20
Paid-in capital 1,581,940 -
Deficit accumulated during the development stage (1,930,670) (1,194,306)
---------- ----------
Total shareholders' deficit (348,667) (1,194,286)
---------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT $ 47,099 $ 14,061
========== ===========
The accompanying notes are an integral part of these financial statements
F-2
SKREEM ENTERTAINMENT CORPORATION
(A Development Stage Company)
STATEMENT OF OPERATIONS
August 19, 1999
(Date of Inception)
For the Years Ended December 31 to
-------------------------------
2003 2002 Dec. 31, 2003
---- ---- -------------
REVENUES $ 376 $ 2,550 $ 2,926
EXPENSES
Operating expenses (470,331) (188,575) (950,460)
General and administrative expenses (103,775) (37,962) (245,096)
Salaries and benefits (91,505) (88,155) (388,504)
Impairment of loan receivable - - (130,000)
---------- ----------- ------------
Loss from operations (665,235) (312,142) (1,711,134)
OTHER INCOME (EXPENSE)
Interest expense (71,129) (72,448) (219,536)
----------- ----------- ------------
NET LOSS $(736,364) $ (384,590) $ (1,930,670)
=========== =========== =============
The accompanying notes are an integral part of these financial statements
F-3
SKREEM ENTERTAINMENT CORPORATION
(A Development Stage Company)
STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT
FROM AUGUST 19, 1999 (DATE OF INCEPTION) TO DECEMBER 31, 2003
Paid
Common Stock In Retained
Shares Amount Capital Deficit Total
-------- -------- ----------- ------------ ---------
Balance at inception, August 19, 1999 - $ - $ - $ - -
Issuance of common stock 20,000 20 - - 20
Net Loss - - - (84,021) (84,021)
------- ------ ------- --------- --------
Balance at December 31, 1999 20,000 20 - (84,021) (84,001)
Net loss - - - (230,879) (230,879)
------- ------ ------- --------- ------------
Balance at December 31, 2000 20,000 20 - (314,900) (314,880)
Net loss - - - (494,816) (494,816)
------- ------ ------- ---------- ------------
Balance at December 31, 2001 20,000 20 - (809,716) (809,696)
Net loss - - - (384,590) (384,590)
------- ------ ------- ----------- ------------
Balance at December 31, 2002 20,000 20 - (1,194,306) (1,194,286)
Reclassification of debt to equity 43,000 43 1,581,940 - 1,581,983
Net loss - - - (736,364) (736,364)
------- ------ --------- ----------- ------------
$ 63
Balance at December 31, 2003 63,000 $ 1,581,940 $ (1,930,670) $ (348,667)
======= ====== ========== ============ ============
The accompanying notes are an integral part of these financial statements
F-4
SKREEM ENTERTAINMENT CORPORATION
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
August 19, 1999
For the Years Ended December 31, (Date of
Inception) to
2003 2002 December 31, 2003
---- ---- -----------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (736,364) $ (384,590) (1,930,670)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation expense 6,220 5,359 31,142
Impairment of loan receivable
- - 130,000
Changes in operating assets and liabilities:
Increase in prepaid expenses
(4,408) - (4,388)
Increase in other assets
(19,920) - (19,920)
Increase in accounts payable
and accrued liabilities
11,307 - 20,561
Increase in interest payable to affiliates
71,095 72,447 214,589
------- ------- -------
Total adjustments
64,294 77,806 371,984
Net cash used in operating activities
(672,070) (306,784) (1,558,686)
--------- --------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment
(3,497) (2,365) (39,311)
Loan receivable - - (130,000)
---------- --------- ---------
Net cash used by investing activities (3,497) (2,365) (169,311)
---------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable to affiliates
687,000 305,500 1,792,600
Principal payments on notes payable to affiliates ---------- --------- ----------
- - (50,000)
---------- --------- ----------
Net cash provided by financing activities 687,000 305,500 1,742,600
---------- --------- ----------
Net increase (decrease) in cash and cash equivalents 11,433 (3,649) 14,603
CASH AND CASH EQUIVALENT AT BEGINING OF YEAR $ 3,170 $ 6,819 $ -
----------- --------- ----------
CASH AND CASH EQUIVALENT AT END OF YEAR $ 14,603 $ 3,170 $ 14,603
=========== ========= ==========
The accompanying notes are an integral part of these financial statements
F-5
1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of the business
Skreem Entertainment Corporation (the "Company") is a development stage company
that was incorporated in Nevada on August 19, 1999. The Company was formed to
promote, finance and manage artists and projects in the music industry.
Basis of presentation
The financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America.
Cash and cash equivalents
Cash and cash equivalents consist of cash on hand and on deposit at a major
financial institution. The Company considers highly liquid investments with
original maturities of three months or less when purchased to be cash
equivalents.
Advances to Artists
The Company advances monies to artists upon the artist signing the "Exclusive
Recording Artist Agreement." An advance paid to an artist shall be reported as
an asset if the past performance and current popularity of the artist to whom
the advance is made provide a sound basis for estimating that the amount of the
advance will be recoverable from future royalties to be earned by the artist.
Any portion of advances that subsequently appear not to be fully recoverable
from future royalties to be earned by the artist shall be charged to expense
during the period in which the loss becomes evident.
Property and equipment
Property and equipment are stated at cost. Provisions for depreciation are
computed using the double-declining method based on the estimated useful lives
of the assets, generally five to seven years. Expenditures that increase the
value or extend the life of the asset are capitalized, while cost of maintenance
and repairs are expensed as incurred. Leasehold improvements are amortized on a
straight-line basis over the shorter of the useful life of the improvement or
the term of the lease. When assets are retired or otherwise disposed of, the
cost and related accumulated depreciation are removed from the accounts, and any
resulting gain or loss is recognized.
In accordance with Statement of Financial Accounting Standards (SFAS) No. 144,
"Accounting for the Impairment or Disposal of Long-lived Assets," the Company
examines the possibility of decrease in value of fixed assets when events or
changes in circumstances reflect the fact that their recorded value may not be
recoverable.
Record masters
A record master borne by the Company is reported as a cost of production when
the past performance and current popularity of the artist does not provide a
sound basis for estimating that the cost will be recovered from future sales.
Operating expenses
Operating expenses include music production costs, artist compensation costs,
and other operating expenses. The Company enters into production, promotion and
related consulting agreements in the ordinary course of business.
F-6
1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
Continued
Use of estimates
The preparation of financial statements in conformity with general accepted
accounting principles in the United States of America requires management to
make estimates and assumptions that affect the reported amounts of 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.
Income taxes
From inception of the Company through August 31, 2003, the Company's sole
shareholder has elected to be taxed under Subchapter S of the Internal Revenue
Code. As a result, corporate income or loss passes through to the shareholder
and therefore, no provision for federal or state income taxes is recorded by the
Company. On August 31, 2003, the Company converted certain debt and accrued
interest owed to affiliates to equity. The affiliates were a corporation and a
partnership which made the Company ineligible to be taxed under subchapter S of
the Internal Revenue Code. Subsequent to August 31, 2003, the Company accounts
for income tax using Statements of Financial Accounting (SFAS) No. 109
"Accounting for Income Taxes."
Recent accounting pronouncements
In January 2003, and as revised in December 2003, the Financial Accounting
Standards Board ("FASB") issued Interpretation No.46 ("FIN 46") "Consolidation
of Variable Interest Entities." Until this interpretation, a company generally
included another entity in its consolidated financial statements only if it
controlled the entity through voting interest. FIN 46 requires a variable
interest entity, as defined, to be consolidated by a company if that company is
subject to a majority of the risk of loss from the variable interest entity's
activities or entitled to receive a majority of the entity's residual returns.
Certain provisions of FIN 46 were deferred until the period ending after March
15, 2004. The adoption of FIN 46 for provisions effective during 2003 did not
have a material impact on the Company's financial position, cash flows or
results of operations.
In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities" ("SFAS 149"), which amends SFAS
133 for certain decisions made by the FASB Derivatives Implementation Group, In
Particular, SFAS 149: (1) clarifies under what circumstances a contract with an
initial net investment meets the characteristic of a derivative, (2) clarifies
when a derivative contains a financing component, (3) amends the definition of
an underlying to conform it to language used in FASB Interpretation No. 45
"Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others," and (4) amends certain other
existing pronouncements. This Statement is effective for contracts entered into
or modified after June 30, 2003, and for hedging relationships designated after
June 30, 2003. In addition, most provisions of SFAS 149 are to be applied
prospectively. The adoption of SFAS 149 did not have a material impact on the
Company's financial position, cash flows or results of operations.
F-7
1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
Continued
In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity" ("SFAS 150").
SFAS 150 changes the accounting for certain financial instruments that under
previous guidance issuers could account for as equity. It requires that those
instruments be classified as liabilities in balance sheets. The guidance in SFAS
150 is generally effective for all financial instruments entered into or
modified after May 31, 2003, and otherwise is effective on July 1, 2003. The
adoption of SFAS 150 did not have a material impact on the Company's financial
position, cash flows or results of operations.
Going Concern
The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. The Company sustained losses of
$736,364 and $384,590 at December 31, 2003 and December 31, 2002, respectively.
The Company had an accumulated deficit of $1,930,670 at December 31, 2003. These
factors raise substantial doubt about the ability of the Company to continue as
a going concern for a reasonable period of time. The Company is highly dependent
on its ability to continue to obtain investment capital from an affiliate in
order to fund the current and planned operating levels. The financial statements
do not include any adjustments relating to the recoverability and classification
of recorded asset amounts or the amounts and classification of liabilities that
might be necessary should the Company be unable to continue as a going concern.
The Company's continuation as a going concern is dependent upon its ability to
continue receiving investment capital from an affiliate to complete promotion of
the Company's artists, continue production of music and achieve a level of
success that will enable it to sustain its operations. No assurance can be given
that the Company will be successful in these efforts.
2. PROPERTY AND EQUIPMENT
Property and equipment is comprised of the following at December 31, 2003 and
2002:
2003 2002
------ -------
Furniture $ 18,161 $ 18,161
Music equipment 17,164 13,665
-------- --------
35,325 31,826
Less: accumulated depreciation (27,157) (20,935)
$ 8,168 $ 10,891
======== =========
Depreciation expense was $6,220 and $5,359 for the years ended December 31, 2003
and 2002, respectively.
3. DEPOSITS
At December 31, 2003, the Company had deposits of $15,366 for the rental of a
vehicle and $4,554 for the rental of housing for the Artists and Manager of "3rd
Wish" .
F-8
4. INCOME TAXES
From inception of the Company through August 31, 2003, the Company's sole
shareholder has elected to be taxed under Subchapter S of the Internal Revenue
Code. As a result, corporate income or loss passes through to the shareholder
and therefore, no provision for federal or state income taxes is recorded by the
Company. On August 31, 2003, the Company converted certain debt and accrued
interest owed to affiliate to equity. The affiliates were a corporation and a
partnership which made the Company ineligible to be taxed under subchapter S of
the Internal Revenue Code. Subsequent to August 31, 2003, the Company accounts
for income tax using Statements of Financial Accounting (SFAS) No. 109
"Accounting for Income Taxes."
The following table sets forth a reconciliation of federal income tax for the
year ended December 31, 2003:
2003
------
Pro-rata loss before income taxes $ (245,455)
Income tax benefit computed at statuatory
rates (83,455)
Valuation allowance 83,210
Permanent differences, nondeductible
expenses 245
----------
Tax benefit $ -
==========
As of December 31, 2003, the Company has net operating loss carryforwards of
approximately $244,734. The carryforwards begin to expire in the year 2023. The
Company's net operating loss carry forwards may be subject to annual
limitations, which could reduce or defer the utilization of the losses as a
result of an ownership change as defined in section 382 of the Internal Revenue
Code. The tax effects of the temporary differences between reportable financial
statement income and taxable income are recognized as a deferred tax asset and
liability.
Significant components of the deferred tax assets are set out below along with a
valuation allowance to reduce the net deferred tax asset to zero. In order to
comply with generally accepted accounting principles, management has decided to
establish the valuation allowance because of the potential that the tax benefits
underlying deferred tax asset may not be realized. Significant components of the
Company's deferred tax asset at December 31, 2003 are as follows:
4. INCOME TAXES -
Deferred tax assets: 2003
-------
Net operating loss carry forwards $(83,210)
Less: valuation allowance 83,210
--------
Net deferred tax assets $ -
========
F-9
5. NOTES PAYABLE TO AFFILIATES
Notes payable to affiliates consist of the following:
2003 2002
------------- -------------
Notes payable upon demand to Martin Consultants, Inc.,
secured by the assets of the
Company, interest at 8% $ 369,000 $ 1,005,600
Note payable upon demand to JT Investments, Ltd.,
unsecured, interest at 10% - 50,000
------------- -------------
$ 369,000 $ 1,055,600
============= =============
The Company's Board of Directors held a meeting on August 30, 2003 and
unanimously approved a proposal received from Martin Consultants, Inc. and JT
Investments, Ltd., affiliates of the Company, to convert the debt and accrued
interest owed by the Company to equity. The affiliates are owned by the sole
shareholder of the Company. The notes payable and related accrued interest of
$1,373,600 and $208,383, respectively were reclassified to equity on August 31,
2003 and Martin Consultants, Inc. was issued 43,000 shares of common stock.
6. RELATED PARTY TRANSACTIONS
Accounts payable due to an affiliate consisted of $9,254 for health
insurance as of December 31, 2003 and 2002. Additionally, notes payable due to
affiliates as of December 31, 2003 and 2002 are presented at Note 5.
The Company promotes an artist who is the son of the Company's sole shareholder.
Total advances to the son are $121,090 and $32,599 as of December 31, 2003 and
2002, respectively.
7. OPERATING LEASES
The Company leases a vehicle and housing for the Artists and Manager of "3rd
Wish" in Germany. Total rent expense was $42,637 for the year ended December 31,
2003. There was no rent expense for the year ended December 31, 2002.
Future minimum noncancelable lease payments for years ending December 31, 2003
are as follows:
2004 $ 66,683
2005 17,516
--------
$ 84,199
========
F-10
8. NU-SOL AGREEMENT AND IMPAIRMENT
During May 2000, the Company entered into a financing agreement with Nu-Sol
Productions, Inc. (NU-SOL). The purpose of the agreement shall be for NU-SOL to
produce, manufacture, market, and commercially exploit the first LP by Precious
Francis "Precious" entitled "Big Girls Don't Cry" and singles derived therefrom
(the Property) and the Company funding the costs and expenses of $130,000 with
respect to the production, manufacturing, marketing, and exploitation of the
Property. All net revenues shall be distributed first to the Company until the
Company recoups 100% of the $130,000 advanced plus an additional $39,000, and
thereafter 30% of all net revenues derived. The Company had originally recorded
the advance to NU-SOL as a loan receivable and during 2001, the Company deemed
the amount advanced uncollectible and recorded an impairment charge.
9. COMMITMENTS
On July 26, 2002, the Company entered into a Music Publishing Agreement, a
Personal Management Agreement and an Exclusive Artist Recording Agreement with
the Artists of "3rd Wish."
Additionally, on July 14, 2003, the Company entered into an Exclusive Artist
Recording Agreement with Precious Dawn Francis.
10. SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
No cash was paid during the year ended December 31, 2003 and 2002 for interest
or income taxes.
Non-cash financing transactions:
A reclassification of notes payable and accrued interest to equity of
$1,581,983 was approved by the Board of Directors during 2003 and is
presented at Note 5.
11. CONCENTRATIONS OF RISK
The Company is economically dependent on an affiliate owned by the Company's
sole shareholder.
The Company is dependent on the success of the Artists. The talent would be
difficult to replace.
12. SUBSEQUENT EVENTS
Exchange Agreement
During January 2004, the Board of Directors agreed to merge the Company with
Stanford Capital Corporation ("Stanford") a publicly held corporation organized
under the laws of the State of Delaware. Management under the constituent
corporations have determined that it is in the best interest of the parties that
Stanford acquire 100% of the issued and outstanding securities of the Company in
exchange for the issuance of certain shares of Stanford. Stanford agrees to take
the name of the Company.
F-11
12. Subsequent Event - continued
Private Placement Memorandum
The Company has offered a Private Placement Memorandum ("PPM") which offers for
sale a maximum of 3,000,000 and a minimum of 1,000,000 shares of its common
stock, $.001 par value at $.50 per share ("the Offering"). The shares are
offered on a "best efforts" basis. The Offering will be made in reliance upon an
exemption from registration under the federal securities laws provided by
Regulation D as promulgated by the United States Securities and Exchange
Commission ("SEC"). The Offering will terminate upon the earlier of (i) the sale
of the 3,000,000 shares or (ii) May 31, 2004 unless extended by the Company for
sixty days. The Company has issued 507,656 shares with proceeds of $253,828
through June 15, 2004.
Distribution and Service Agreement
During May 2004, the Company entered into a 5.5 year Distribution and Service
Agreement with Cheyenne Records GmbH (Cheyenne). The agreement grants Cheyenne
certain exclusive rights to distribute and sell recordings. In addition,
Cheyenne will perform certain services in accordance with the agreement.
Music Video Production Agreement
During May 2004, the Company entered into a Music Video Production Agreement
with 1171 Production Group (Production Company). Production Company will produce
a music video embodying the performance by "3rd Wish". In consideration for
services rendered by Production Company, the Company agrees to pay $100,000 upon
the terms and conditions set forth in the agreement. In connection with the
music video, the Company has agreed to pay $40,000 to a third party for the
performance of "Baby Bash" in the music video.
F-12
SKREEM ENTERTAINMENT CORPORATION
(A Development Stage Company)
BALANCE SHEET
MARCH 31, 2004 (UNAUDITED)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 4,984
--------
Total current assets 4,984
--------
PROPERTY AND EQUIPMENT, net 6,895
DEPOSITS 19,921
--------
TOTAL ASSETS $ 31,800
========
LIABILITIES AND SHAREHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 42,954
Accrued interest payable to affiliates 15,658
Notes payable to affiliates 525,592
--------
Total current liabilities 584,204
--------
SHAREHOLDERS' DEFICIT
Preferred stock, par value $0.001, 5,000,000
shares authorized, no shares issued and outstanding
-
Common stock, par value $0.001, 50,000,000
shares authorized, 63,000 shares issued
and outstanding 63
Paid-in capital 1,581,940
Deficit accumulated during the development stage (2,134,407)
-----------
Total shareholders' deficit (552,404)
----------
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT $ 31,800
==========
F-13
SKREEM ENTERTAINMENT CORPORATION
(A Development Stage Company)
STATEMENTS OF OPERATIONS (UNAUDITED)
August 19, 1999
(Date of Inception)
Three Months Ended March 31 to
---------------------------
2004 2003 Mar. 31, 2004
---- ---- -------------
REVENUES $ - $ 200 $ 2,926
EXPENSES
Operating expenses
(144,179) (83,653) (1,094,639)
General and administrative
expenses (31,290) (4,304) (276,386)
Salaries and benefits
(18,815) (27,882) (407,319)
Impairment of loan receivable
--------- ----------
- - (130,000)
--------- ----------
Loss from operations
(194,284) (115,639) (1,905,418)
OTHER INCOME (EXPENSE)
Interest expense --------- ---------- ----------
(9,453) (22,746) (228,989)
--------- ---------- ----------
NET LOSS $ (203,737) $ (138,385) $ (2,134,407)
========= =========== ===========
F-14
SKREEM ENTERTAINMENT CORPORATION
(A Development Stage Company)
STATEMENTS OF CASH FLOWS (UNAUDITED)
August 19, 1999
Three Months Ended March 31, (Date of
Inception) to
2004 2003 March 31, 2004
---- ---- --------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (203,737) $ (138,385) $ (2,134,407)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation expense 1,273 1,343 32,415
Impairment of loan receivable - - 130,000
Changes in operating assets and liabilities:
Decrease in prepaid expenses 4,408 - 20
Increase in other assets - - (19,920)
Increase in accounts payable
and accrued liabilities 22,393 - 42,954
Increase in interest payable to affiliates 9,453 22,746 224,042
----------- ---------- ----------
Total adjustments
37,527 24,089 409,511
Net cash used in operating activities (166,210) (114,296) (1,724,896)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment
- (1,940) (39,311)
Loan receivable - - (130,000)
----------- ----------- ------------
Net cash used by investing activities
- (1,940) (169,311)
----------- ----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable to affiliates 156,591 115,000 1,949,191
Principal payments on notes payable to affiliates - - (50,000)
---------- ----------- -----------
Net cash provided by financing activities 156,591 115,000 1,899,191
---------- ----------- ------------
Net increase (decrease) in cash and cash equivalents (9,619) (1,236) 4,984
CASH AND CASH EQUIVALENT AT BEGINING OF PERIOD $ 14,603 3,170 -
----------- ----------- ============
CASH AND CASH EQUIVALENT AT END OF PERIOD $ 4,984 1,934 4,984
=========== =========== ============
F-15
NOTE 1. - BASIS OF PRESENTATION
The accompanying unaudited financial statements of Skreem
Entertainment Corporation have been prepared in accordance with
accounting principles generally accepted in the United States of
America for interim financial information and with the instructions to
Form 10QSB and Item 310(b) of Regulation S-B. They do not include all
of the information and footnotes required by accounting principles
generally accepted in the United States of America for complete
financial statements. In the opinion of management, all adjustments,
consisting only of normal recurring adjustments, considered necessary
for a fair presentation, have been included in the accompanying
unaudited financial statements. Operating results for the periods
presented are not necessarily indicative of the results that may be
expected for the full year.
These financial statements should be read in conjunction with the
financial statements and footnotes, which are included as part of
financial statements for the years ended December 31, 2003 and 2002.
F-16
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
The following unaudited pro forma condensed combined financial statements give
effect to the acquisition of all issued and outstanding shares of Skreem
Entertainment Corporation (Skreem) by Stanford Capital Corporation (Stanford).
The following unaudited pro forma condensed combined financial statements and
the accompanying notes should be read in conjunction with the historical
financial statements of Skreem which are included elsewhere in this document.
The unaudited pro forma condensed combined financial statements are provided for
information purposes only and does not purport to represent what the combined
financial position and results of operations would have been had the merger in
fact occurred on the dates indicated. The following unaudited pro forma combined
balance sheet represents the combined financial position of Stanford and Skreem
as of March 31, 2004, assuming that the merger occurred on March 31, 2004. The
unaudited pro forma combined statements of operations give effect to the
proposed merger of Stanford and Skreem by combining the results of operations
for the year ended December 31, 2003 and the three month period ended March 31,
2004, assuming the merger occurred in the earliest period. The unaudited pro
forma condensed combined financial statements are presented for illustrative
purposes only. The pro forma adjustments are based upon available information
and assumptions that management believes are reasonable.
F-17
STANFORD CAPITAL CORPORATION AND
SKREEM ENTERTAINMENT CORPORATION
PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2004
STANFORD SKREEM
CAPITAL ENTERTAINMENT
CORPORATION CORPORATION PRO FORMA
(Unaudited) (Unaudited) ADJUSTMENTS PRO FORMA
--------------- --------------- ------------ ---------------------
Revenue $ - $ - - $ -
Operating expenses - (144,179) - (144,179)
General and administrative expenses - (59,558) - (59,558)
------------- --------------- --------------- --------------
Net loss $ - $ (203,737) $ - $ (203,737)
============= =============== =============== ==============
Net loss per common share
Basic and diluted
Net loss per share $ - $ (3.23) $ (0.01)
============= =============== ================
Weighted average number of common
shares outstanding
Basic 3,996,925 63,000 25,996,925
Notes to Pro Forma Financial Statements
1. Adjustment to record changes for stock issued and recapitalize Stanford
Capital Corporation with the capital structure of Skreem Entertainment
Corporation.
F-18
STANFORD CAPITAL CORPORATION AND
SKREEM ENTERTAINMENT CORPORATION
PRO FORMA COMBINED BALANCE SHEET
MARCH 31, 2004
STANFORD SKREEM
CAPITAL ENTERTAINMENT
CORPORATION CORPORATION PRO FORMA
(Unaudited) (Unaudited) ADJUSTMENTS PRO FORMA
-------------------- --------------------- --------------- ----------------
ASSETS
CURRENT ASSETS
Cash $ - $ 4,984 $ - $ 4,984
-------------------- --------------------- --------------- ----------------
Total current assets 4,984
- 4,984 -
Property and equipment, net - 6,895 - 6,895
Deposits - 19,921 - 19,921
-------------------- --------------------- --------------- ----------------
TOTAL ASSETS $ - $ 31,800 $ - $ 31,800
==================== ===================== =============== ================
LIABILITIES AND SHAREHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ - $ 42,954 $ - $ 42,954
Interest payable to affiliates - 15,658 - 15,658
Notes payable to affiliates - 525,592 - 525,592
-------------------- --------------------- --------------- ----------------
Total current liabilities 584,204 584,204
- -
TOTAL LIABILITIES - 584,204 - 584,204
Shareholders' deficit
Common stock 3,997 63 21,937 1 25,997
Paid-in capital 50,726 1,581,940 (76,660) 1 1,556,006
Deficit accumulated in development stage (54,723) (2,134,407) 54,723 1 (2,134,407)
-------------------- --------------------- --------------- ----------------
Total shareholders' deficit - (552,404) - (552,404)
-------------------- --------------------- --------------- ----------------
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT $ - $ 31,800 $ - $ 31,800
==================== ===================== =============== ================
Notes to Pro Forma Financial Statements
1. Adjustment to record changes for stock issued and recapitalize Stanford
Capital Corporation with the capital structure of Skreem Entertainment
Corporation.
F-19
STANFORD CAPITAL CORPORATION AND
SKREEM ENTERTAINMENT CORPORATION
PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2003
STANFORD SKREEM
CAPITAL ENTERTAINMENT
CORPORATION CORPORATION PRO FORMA
(Unaudited) (Audited) ADJUSTMENTS PRO FORMA
------------------- ------------------ ----------------- ---------------------
$ - $ 376 $ - $ 376
Revenue
Operating expenses - (470,331) - (470,331)
General and administrative expenses (2,275) (266,409) - (268,684)
------------------- ------------------ ----------------- ---------------------
$ (2,275) $ (736,364) $ -
Net loss $ (738,639)
=================== ================== ================= =====================
Income (loss) per common share
Basic and diluted
$ (0.00) (11.69) $ (0.03)
Net loss per share
=================== ================== =====================
Weighted average number of common
shares outstanding
Basic 3,996,925 63,000 25,996,925
Notes to Pro Forma Financial Statements
1. Adjustment to record changes for stock issued and recapitalize Stanford
Capital Corporation with the capital structure of Skreem Entertainment
Corporation.
F-20
b) Exhibits
2.1 * Termination Agreement - terminating the acquisition of Stanford
Capital International Ltd.
2.2 * Exchange Agreement for the acquisition of Skreem Entertainment
Corporation
3.1 * Certification of Amendment to the Certificate of Incorporation
changing the Company's name to Skreem Entertainment Corporation and
reverse splitting the shares on a (1) one for (5) five basis.
* Previously filed.
Signatures
Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SKREEM ENTERTAINMENT CORPORATION
July 22, 2004 /s/ Karen Pollino
-------------------------
Karen Pollino
Secretary
21