NEVADA
|
98-0204736
|
(State
or other jurisdiction of
|
(I.R.S.
Employer Identification Number)
|
incorporation
or organization)
|
o |
On
December 28, 2004, the Company executed a joint venture agreement
to
develop a Voice Over Internet Protocol (VOIP) business called VOXBOX.
The
joint venture agreement resulted in the formation of VOXBOX Telecom,
Inc.
where the Company acquired 50% of VOXBOX Telecom, Inc. In June 2005
the
Company restructured its holding in VOXBOX Telecom, Inc. with
its
joint venture partner Global Bancorp, Inc. whereas the Company sold
its
holding in VOXBOX Telecom, Inc. to Global Bancorp, Inc. for a minority
to
stake in Global Bancorp, Inc. a (Global Bancorp, Inc. is now called
(VOXBOX World Telecom, Inc. and trades its common stock on the Pink
Sheets
under the ticker symbol VXBX)
|
o |
The
Company is currently negotiating to acquire other assets or businesses
to
aid in the development of its VoIP
business.
|
o |
On
April 15, 2005 the Company executed an agreement to acquire 60%
of
Promostafffing.com LLC. (“Promo Staffing”), a business in the promotional
marketing industry.
|
§ |
Although
the Company contractually closed the transaction to acquire Promo
Staffing, the Company anticipates that the transaction may have
to be
voided due to unforeseen delays that have caused disputes between
the
Company and Promo Staffing, specifically the Company’s providing of
financing post-closing to Promo Staffing, pursuant to the acquisition
agreement underlying the transaction. In addition, pursuant to
the
agreement, the Company is responsible for providing audited financial
statements of Promo Staffing within 75 days of the filing of the
Form 8-K
disclosing the acquisition. There have been delays in completion
of the
required audit as a result of delays caused by the accountants
assigned to
complete the Promo Staffing financial statements. Nonetheless,
the Company
is still working towards the filing of audited financial statements
of
Promo Staffing so that the transaction can be finalized in accordance
with
the rules of the Securities and Exchange Commission. The Company
anticipates resolving any impending problems or disputes with Promo
Staffing in order to overcome the issues that may result in a voiding
of
the transaction.
|
o |
The
Company currently has operations in the entertainment specifically
live
events through its LIVESTAR Entertainment Events International Inc.
and
LIVESTAR Entertainment Canada, Inc. wholly owned subsidiaries.. The
Company is currently assessing its plan to continue business in the
entertainment establishment industry due to the development of this
line
of business of being suspended by management of the Company in December
2004.
|
§ |
In
December 2004 the Company’s establishment business in terms of development
and operations were suspended indefinitely. This overall suspension
of
operations and developments was done due to lack of capital to sustain
operations and developments and also to provide management the opportunity
to determine the role of its entertainment businesses in its
diversification plan. Specifically, the operations of 1614718 Ontario
Inc.
operating under a business lease of the nightclub Sequel was discontinued
in December 2004. The discontinuation of operations was due to a
lack of
capital to fund ongoing operations and continued disputes with the
landlord regarding rents due and a new premises lease. These disputes
with
the landlord resulted in the landlord taking possession of the premises
in
December 2004. The Company is strongly considering plans to pursue
legal
remedies against the landlord for damages the Company feels may have
been
caused to it due to the landlord’s actions. The Company, in December 2004,
also discontinued its development of the Elm Street establishment
project
in Toronto, Ontario. This discontinuation was a direct result of
the lack
of financing to continue and therefore complete the Elm Street project.
Other establishment projects under negotiation or development such
as the
Manhattans restaurant project were also discontinued in late 2004.
These
other projects such as the Manhattan’s restaurant project were
discontinued due to the lack of capital to continue and therefore
complete
the projects.
|
o |
The
Company is currently working to acquire other assets or businesses
to add
to its holdings.
|
1. |
Product
Sales - sales of products and services generated via the JUPITER
subsidiaries/business units.
|
2. |
Administration
Fees - JUPITER may charge its business units a number of fees that
include: rent, utilities, leasing, corporate
services.
|
3. |
Revenue
Sharing - as a method of return of investment from a business unit,
JUPITER may directly share in the revenue generated by the
unit.
|
4. |
Dividends
- at the end of each period, JUPITER will receive its proportionate
profit
share from the dividends issue, if any, from each of its business
units.
|
5. |
Sale
Of Business Units - JUPITER will only sell a partial or full ownership
stake in a business unit when the sale will benefit the JUPITER
shareholders more than continuing the operations of the unit through
the
JUPITER organization.
|
6. |
Financing
Charges - JUPITER plans to earn interest and other financial related
income for possibly lending capital to its business units. This lending
activity may only happen upon the Company acquiring its capital needs.
|
7. |
Venture
Development & Support Services - JUPITER may charge its subsidiaries
fees for the use of its functional units that help develop the business
unit. This includes use of the Accounting, HR, Marketing, Sales,
Technology Development, and
Finance.
|
· |
the
capital costs of market entry were high (especially for those new
entrants
who chose to build their own backbone, or trunk
network)
|
· |
on
the fixed-line service side, established players controlled the “last
mile” connection to the consumer, which the incumbents used to slow the
competitive onslaught.
|
1. |
VOIP Providers:
often focused on their own brand of hardware, usually offering
only a
minimum of software, and variable amounts of service and support.
Their
services are solely providing VOIP and are the early entrants in
the
industry, (ex. Vonage). However, these companies are not local to
their
customer, which is becoming a barrier. For example, ISP providers
like AOL
and Prodigy provided Internet connectivity in the early days, but
soon
lost significant market share to companies that could provide same
service
locally with value added services. As the VOIP industry matures,
these
companies will loose market share as more community based programs
emerge.
|
2. |
Chain
stores and computer superstores: usually offer decent walk-in service,
with very aggressive pricing, and little support. Many have formed
relationships with companies such as Primus, who sells their VOIP
service
through stores such as Future Shop.
|
3. |
Online orders:
offer aggressive pricing of boxed product. For the purely price-driven
buyer, who buys boxes and expects no service, these are very good
options.
In the long term not a viable business strategy and will be the first
companies acquired in the consolidation process by local companies
offering the same service, but
local.
|
1. |
PromoAdvisors
|
2. |
PromoClicks
|
3. |
PromoSponsors
|
4. |
PromoUrban
|
· |
Spokesmodel/staffing
solutions - whereby a marketing firm provides individuals tutored
in a
client’s products/services as an extension of a client’s internal sales
force.
|
· |
Interactive
marketing - traditional marketing often asks little from a potential
customer except passive attention; by contrast interactive marketing
programs are designed to have the potential customer participate
actively;
the simplest forms of interactive marketing can involve (e.g.)
participation in a game for prizes, but increasingly marketers are
applying more advanced techniques, often in situations where a potential
consumer has no idea he/she is participating in a marketing
activity.
|
· |
Creative/niche
sponsoring activities - may include product
placement
|
· |
Aspects
of online marketing.
|
Company
|
Parent
Co.
|
2004
Revenues
|
2
Yr Growth
|
Major
Clients
|
Momentum
Worldwide
|
Interpublic
Group of Companies
|
$81
M
|
43%
|
Microsoft,
Amex, Coca-Cola
|
GMR
Marketing
|
Omnicom
Group
|
$91
M
|
29%
|
New
Balance, Sony, Whirlpool
|
Aspen
Marketing Services
|
Independent
|
$59
M
|
66%
|
General
Motors, Walgreens, Qwest
|
· |
Proximity
to Key Influencers - Since Promostaffing is based in Miami, Fl, it
is in a
location where 18-34 year olds visit throughout the year. Miami is
recognized for their nightlife and fashion, two key aspects of the
demographic’s lifestyle. Being in Miami allows the Company to stay in tune
with the latest trends and styles - valuable information for the
Company’s
target clients.
|
· |
Packaged
Solution - Because Promostaffing can provide an end-to-end solution,
it
provides a more efficient experience for clients. With many competitors,
clients need to use an ad agency for creative, a promotional marketing
company for execution, and another company or internal division for
measurement. With Promostaffing they only need to deal with one company
for all the above. In addition, Promostaffing’s various divisions offer
complementary services that provide additional value to the
client.
|
· |
Full
Time Staff - Unlike many of its competitors, Promostaffing does not
use
free-lance staffers who they call when there is work. Instead, the
Company
has a full-time staff that is paid on regular intervals, not just
when
they work. This allows the Company to have the ability to turn on
a
promotion within short notice (2 days). Because of this flexibility,
Promostaffing has often been called upon to take over a client’s promotion
at the last minute because the old vendor was not able to execute
the
campaign.
|
1. |
House
of Blues
|
o |
The
reverse split of the Company’s Common and Preferred Stock (par value
$0.0001) so that upon effectuation of the split, one (1) New Share
of the
Company’s Common and Preferred Stock will be issued for up to each two
thousand (2,000) shares of the Company’s Common and Preferred Stock
currently issued and outstanding with each fractional share rounded
up to
the next whole share (the “Reverse
Split”);
|
o |
Amend
our articles of incorporation to reduce the par value of our common
stock
from $0.0001 per share to $0.00001 per
share;
|
o |
Amend
our articles of incorporation to increase the number of our authorized
shares of common stock to 20,000,000,000 shares and to increase our
authorized number of shares of preferred stock from 200,000,000 preferred
shares to 500,000,000 shares of preferred stock.
|
HIGH
|
LOW
|
|||
|
|
|||
2003**
|
||||
First
Quarter
|
$
|
0.0080
|
$
|
0.0023
|
Second
Quarter
|
0.0150
|
0.0035
|
||
Third
Quarter
|
0.0210
|
0.0035
|
||
Fourth
Quarter
|
0.0170
|
0.0031
|
||
2004**
|
||||
First
Quarter
|
$
|
0.0043
|
$
|
0.0017
|
Second
Quarter
|
0.0023
|
0.0005
|
||
Third
Quarter
|
0.0650
|
0.0001
|
||
Fourth
Quarter
|
0.0600
|
0.0001
|
||
*The
prices are all "closing" prices and appear as approximate
figures.
**
Prices in the table are unadjusted for the share consolidations in
September 2004 and November 2004.
|
HIGH
|
LOW
|
|||
|
|
|||
2003***
|
||||
First
Quarter
|
$
|
16,000.000
|
$
|
4,600.000
|
Second
Quarter
|
$
|
30,000.000
|
$
|
7,000.000
|
Third
Quarter
|
$
|
42,000.000
|
$
|
7,000.000
|
Fourth
Quarter
|
$
|
34,000.000
|
$
|
6,200.000
|
2004***
|
||||
First
Quarter
|
$
|
8,600.000
|
$
|
3,400.000
|
Second
Quarter
|
$
|
4,600.000
|
$
|
1,000.000
|
Third
Quarter
|
$
|
1,200.000
|
$
|
0.200
|
Fourth
Quarter
|
$
|
0.060
|
$
|
0.007
|
*The
prices are all "closing" prices and appear as approximate
figures.
***
Prices in the table have been adjusted to account for the share
consolidations in September 2004 and November
2004.
|
Plan
category
|
Number
of securities to be issued upon exercise of outstanding options,
warrants
and rights
|
Weighted
average exercise price of outstanding options, warrants and
rights
|
Number
of securities remaining available for future issuance
|
(a)
|
(b)
|
(c)
|
|
Equity
compensation plans approved by security holders
|
-0-
|
n/a
|
-0-
|
Equity
compensation plans not approved by security holders
|
37,659,602
|
$.010
|
5,730,840,000
|
Total
|
37,659,602
|
$.010
|
5,730,840,000
|
Name
|
Age
|
Offices
Held
|
|
|
|
Ray
A. Hawkins (1)
|
35
|
President,
Chief Executive
Officer,
Director
|
Edwin
Kwong (1)
|
33
|
Chief
Operations Officer, Chief Financial Officer, Treasurer, Secretary
and
Director
|
(1)
Directors were appointed to the Board on August 17,
2001.
|
Name
and principal position
|
Number
of late Reports
|
Transactions
not Timely Reported
|
Known
Failures to File a Required Form
|
Ray
A. Hawkins
CEO,
President and Director
|
2
|
2
|
0
|
Edwin
Kwong
COO,
CFO, Treasurer,
Secretary
and Director
|
0
|
0
|
0
|
Annual
Compensation
|
Long
Term
|
|||||
Compensation
|
||||||
Name
and Title
|
Year
|
Salary
|
|
Bonus
|
Options
/ SARs (#)
|
|
Ray
A. Hawkins(3) President ,CEO
|
2002
|
$
17,429
|
|
$
-
|
200,000
|
|
and
Director
|
2003
|
$
30,202
|
(1)
|
$
-
|
-
|
|
2004
|
$
86,188
|
|
$
-
|
-
|
||
Edwin
Kwong(3) COO, CFO and
|
2002
|
$
7,497
|
|
$
-
|
200,000
|
|
Director
|
2003
|
$
21,058
|
(2)
|
$
-
|
-
|
|
2004
|
$
55,950
|
|
$
-
|
-
|
Year
ended December 31, 2005 $
200,000
|
Year
ended December 31, 2006 $
200,000
|
Options/SAR
Grants in Last Fiscal Year
|
||||
(Individual
Grants)
|
||||
Name
|
Number
of
|
Percent
of
|
Exercise
or
|
Expiration
date
|
Securities
|
options/SARs
|
base
price
|
||
Underlying
|
granted
|
($/Sh)
|
||
Options/SARs
|
employees
in
|
|||
Granted
(#)
|
fiscal
year
|
|||
Ray
A. Hawkins
|
0
|
n/a
|
n/a
|
n/a
|
Edwin
Kwong
|
0
|
n/a
|
n/a
|
n/a
|
Name
|
Shares
|
Value
|
Number
of
|
Value
of unexercised
|
acquired
|
realized
|
unexercised
options
|
in-the-money
options
|
|
on
|
($)
|
/SARs
at FY-end (#)
|
/SARs
at FY-end($)
|
|
exercise
|
exercisable/
|
exercisable/
|
||
(#)
|
unexercisable
|
unexercisable
|
||
Ray
A. Hawkins
|
0
|
0
|
1
/
0
|
$0/$0
|
Edwin
Kwong
|
0
|
0
|
1
/
0
|
$0/$0
|
Directors,
Officers and 5% Stockholders
|
Shares
Beneficially Owned
|
||
Number
|
Percent
|
||
550605
B.C. Ltd
4th
Floor, 62 W. 8th Avenue
Vancouver,
B.C. V5Y 1M7
|
3
(1)
|
**%
|
|
Ray
A. Hawkins
#71-1075
Granville Street
Vancouver,
B.C. V6Z 1L4
|
80,060,006(3)(4)
|
4.71%
|
|
RYM
Management Ltd
71
- 1075 Granville St
Vancouver,
BC
Canada
V6Z 1L4
|
1
(2)
|
**%
|
|
Edwin
Kwong
#5
- 744 West 7th Avenue
Vancouver,
B.C. V5Z 1B8
|
9(3)
|
**%
|
|
All
JUPITER directors and officers as a group (2 persons)
|
80,060,016(3)
|
4.71%
|
|
**
- indicates less than 0.1%
(1)
Ray A. Hawkins owns 74% of 550605 B.C. Ltd.
(2)
Ray A. Hawkins owns 100% of RYM Management Ltd.
(3)
Includes shares issuable upon the exercise of options within 60
days.
(4)
Includes shares issuable upon the conversion of 80,000,000 Series
B
Preferred Shares, with the Conversion Rights of 1 Common Shares to
1
Preferred Share..
|
Vancouver,
B.C.
August
12, 2005
|
"Morgan
& Company"
Chartered
Accountants
|
Tel
604.687.5841
Fax
604.687.0075
www.morgan-cas.com
|
Member
of
ACPA
International
|
P.O.
Box 100007 Pacific Centre
Suite
1488-700 West Georgia Street
Vancouver,
B.C. V7Y 1A1
|
DECEMBER
31
|
|||||||||||||
2004
|
2003
|
||||||||||||
|
|
|
|||||||||||
(Restated
-
Notes
5(c) & 7(c))
|
|||||||||||||
ASSETS
|
|||||||||||||
Current
|
|||||||||||||
Cash
|
$
|
8,240
|
$
|
14,892
|
|||||||||
Goods
and Services Tax recoverable
|
3,757
|
6,621
|
|||||||||||
Prepaid
expense, advances and other
|
8,496
|
78,471
|
|||||||||||
20,493
|
99,984
|
||||||||||||
Capital
Assets
(Note 3)
|
5,972
|
6,729
|
|||||||||||
Advances
Receivable
(Note 4)
|
-
|
281,219
|
|||||||||||
$
|
26,465
|
$
|
387,932
|
||||||||||
|
|
|
|
||||||||||
LIABILITIES
|
|||||||||||||
Current
|
|||||||||||||
Accounts
payable and accrued liabilities
|
$
|
2,306,523
|
1,530,926
|
||||||||||
Loans
and advances payable (Note 5)
|
738,581
|
397,913
|
|||||||||||
|
|
|
|
||||||||||
3,045,104
|
1,928,839
|
||||||||||||
|
|
|
|
||||||||||
STOCKHOLDERS’
DEFICIENCY
|
|||||||||||||
Capital
Stock
(Notes 6 and 7)
|
|||||||||||||
Authorized:
|
|||||||||||||
10,000,000,000
(2003: 100,000,000) common shares, par value $0.0001 per
share
|
|||||||||||||
200,000,000
(2003: 200,000,000) preferred shares, par value $0.0001 per
share
|
|||||||||||||
Issued
and outstanding:
|
|||||||||||||
27,569,926
common shares at December 31, 2004 and 140 at December 31,
2003
|
2,757
|
-
|
|||||||||||
80,060,000
series B preferred shares at December 31, 2004, Nil at December
31, 2003
and 1 Series A preferred share at December 31, 2004 and
2003
|
8,006
|
-
|
|||||||||||
Additional
paid-in capital
|
5,818,445
|
2,638,674
|
|||||||||||
Accumulated
Deficit
|
(8,847,847
|
)
|
(4,179,581
|
)
|
|||||||||
|
|
|
|
||||||||||
(3,018,639
|
)
|
(1,540,907
|
)
|
||||||||||
|
|
||||||||||||
$
|
26,465
|
$
|
387,932
|
||||||||||
|
|
|
|
YEARS
ENDED
|
|||||||||||||
DECEMBER
31
|
|||||||||||||
2004
|
2003
|
||||||||||||
|
|
|
|||||||||||
Revenue
|
|||||||||||||
Entertainment
|
$
|
683,613
|
$
|
500
|
|||||||||
Operating
Costs
|
1,364,886
|
-
|
|||||||||||
|
|
||||||||||||
(681,273
|
)
|
500
|
|||||||||||
|
|
||||||||||||
Expenses
|
|||||||||||||
Administrative
services
|
29,660
|
7,146
|
|||||||||||
Amortization
|
33,521
|
3,173
|
|||||||||||
Business
development
|
444,597
|
348,113
|
|||||||||||
Consulting
|
900,270
|
200,539
|
|||||||||||
Foreign
exchange
|
59,883
|
-
|
|||||||||||
Investor
relations
|
26,684
|
55,625
|
|||||||||||
Marketing
|
10,120
|
-
|
|||||||||||
Media
design
|
-
|
1,435
|
|||||||||||
Office,
rent and sundry
|
276,593
|
112,643
|
|||||||||||
Professional
fees
|
304,111
|
104,174
|
|||||||||||
Travel
|
134,248
|
38,658
|
|||||||||||
Wages
and benefits
|
1,767,306
|
85,505
|
|||||||||||
|
|
|
|
||||||||||
3,986,993
|
957,011
|
||||||||||||
|
|
||||||||||||
Loss
Before The Following
|
(4,668,266
|
)
|
(956,511
|
)
|
|||||||||
Forgiveness
Of Debt
|
-
|
46,655
|
|||||||||||
Minority
Interest In Loss Of Subsidiary
|
138,801
|
-
|
|||||||||||
Losses
In Excess Of Equity In Subsidiary
|
(138,801
|
)
|
-
|
||||||||||
|
|
||||||||||||
Net
Loss For The Period
|
$
|
(4,668,266
|
)
|
$
|
(909,856
|
)
|
|||||||
|
|
||||||||||||
Net
Loss Per Share,
Basic and diluted
|
$
|
(1.84
|
)
|
$
|
(14,442.00
|
)
|
|||||||
|
|
||||||||||||
Weighted
Average Number Of Common Shares Outstanding
|
2,536,592
|
63
|
|||||||||||
|
|
YEARS
ENDED
|
|||||||||||||
DECEMBER
31
|
|||||||||||||
2004
|
2003
|
||||||||||||
|
|
|
|||||||||||
Cash
Flows From Operating Activities
|
|||||||||||||
Loss
for the period from continuing operations
|
$
|
(4,668,266
|
)
|
$
|
(909,856
|
)
|
|||||||
Adjustments
To Reconcile Net Loss To Net Cash Used By Operating
Activities
|
|||||||||||||
Amortization
|
33,521
|
3,173
|
|||||||||||
Stock
based compensation
|
1,587,753
|
65,093
|
|||||||||||
Issue
of common stock for expenses
|
238,360
|
416,900
|
|||||||||||
Change
in working capital items:
|
|||||||||||||
Notes
receivable
|
-
|
13,125
|
|||||||||||
Goods
and Services Tax recoverable
|
2,864
|
(835
|
)
|
||||||||||
Prepaid
expense
|
69,975
|
(78,126
|
)
|
||||||||||
Accounts
payable and accrued liabilities
|
899,997
|
251,159
|
|||||||||||
Advances
receivable written off as business development
|
281,219
|
(81,219
|
)
|
||||||||||
|
|
|
|
||||||||||
(1,554,577
|
)
|
(320,586
|
)
|
||||||||||
|
|
||||||||||||
Cash
Flows From Investing Activities
|
|||||||||||||
Purchase
of capital assets
|
(32,764
|
)
|
(1,672
|
)
|
|||||||||
Cash
Flows From Financing Activities
|
|||||||||||||
Shares
issued for cash
|
1,138,021
|
320,124
|
|||||||||||
Share
subscriptions received
|
-
|
(1,450
|
)
|
||||||||||
Loans
and advances payable
|
442,668
|
18,444
|
|||||||||||
|
|
|
|
||||||||||
1,580,689
|
337,118
|
||||||||||||
|
|
||||||||||||
(Decrease)
Increase In Cash
|
(6,652
|
)
|
14,860
|
||||||||||
Cash,
Beginning Of Period
|
14,892
|
32
|
|||||||||||
|
|
||||||||||||
Cash,
End Of Period
|
$
|
8,240
|
$
|
14,892
|
|||||||||
|
|
||||||||||||
Supplemental
Disclosure Of Cash Flow Information
(Note 11)
|
|||||||||||||
Interest
paid
|
$
|
-
|
$
|
-
|
|||||||||
Income
taxes paid
|
-
|
-
|
|||||||||||
|
|
PREFERRED
STOCK
|
PREFERRED
STOCK
|
|
|||||||||||||||||||||||||||||||||||||||||
SERIES
A
|
SERIES
B
|
COMMON
STOCK
|
|
||||||||||||||||||||||||||||||||||||||||
|
|
|
ADDITIONAL
PAID-IN
|
||||||||||||||||||||||||||||||||||||||||
SHARES
|
AMOUNT
|
SHARES
|
AMOUNT
|
SHARES
|
AMOUNT
|
CAPITAL
|
DEFICIT
|
TOTAL
|
|||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
Balance,
December 31, 2002
|
-
|
$
|
-
|
-
|
$
|
-
|
23
|
$
|
-
|
$
|
1,367,292
|
$
|
(3,244,725
|
)
|
$
|
(1,877,433
|
)
|
||||||||||||||||||||||||||
Shares
issued for debt
|
-
|
-
|
-
|
-
|
38
|
-
|
244,265
|
-
|
244,265
|
||||||||||||||||||||||||||||||||||
Shares
issued for services
|
-
|
-
|
-
|
-
|
46
|
-
|
416,900
|
-
|
416,900
|
||||||||||||||||||||||||||||||||||
Shares
issued for cash
|
-
|
-
|
-
|
-
|
33
|
-
|
370,124
|
-
|
370,124
|
||||||||||||||||||||||||||||||||||
Shares
issued as advance on
acquisition (Note 4)
|
1
|
-
|
-
|
-
|
-
|
-
|
200,000
|
-
|
200,000
|
||||||||||||||||||||||||||||||||||
Shares
redeemed (Series A preferred)
|
-
|
-
|
-
|
-
|
-
|
-
|
(25,000
|
)
|
(25,000
|
)
|
(50,000
|
)
|
|||||||||||||||||||||||||||||||
Stock
based compensation
|
-
|
-
|
-
|
-
|
-
|
-
|
65,093
|
-
|
65,093
|
||||||||||||||||||||||||||||||||||
Loss
for the year
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(909,856
|
)
|
(909,856
|
)
|
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
Balance,
December 31, 2003
|
1
|
-
|
-
|
-
|
140
|
-
|
2,638,674
|
(4,179,581
|
)
|
(1,540,907
|
)
|
||||||||||||||||||||||||||||||||
Shares
issued for debt
|
-
|
-
|
-
|
-
|
800,026
|
80
|
104,320
|
-
|
104,400
|
||||||||||||||||||||||||||||||||||
Shares
issued for services
|
-
|
-
|
-
|
-
|
14,412,565
|
1,441
|
236,919
|
-
|
238,360
|
||||||||||||||||||||||||||||||||||
Shares
issued for cash
|
-
|
-
|
-
|
-
|
12,356,802
|
1,236
|
1,136,785
|
-
|
1,138,021
|
||||||||||||||||||||||||||||||||||
Adjustment
for fractional shares
upon stock consolidations
|
-
|
-
|
-
|
-
|
393
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||||||||||
Shares
issued for debt to a director
|
-
|
-
|
80,060,000
|
8,006
|
-
|
-
|
113,994
|
-
|
122,000
|
||||||||||||||||||||||||||||||||||
Stock
based compensation
|
-
|
-
|
-
|
-
|
-
|
-
|
1,587,753
|
-
|
1,587,753
|
||||||||||||||||||||||||||||||||||
Loss
for the year
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(4,668,266
|
)
|
(4,668,266
|
)
|
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
Balance,
December 31, 2004
|
1
|
$
|
-
|
80,060,000
|
$
|
8,006
|
27,569,926
|
$
|
2,757
|
$
|
5,818,445
|
$
|
(8,847,847
|
)
|
$
|
(3,018,639
|
)
|
||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
c)
|
Going
Concern
|
c) |
Software
Development Costs
|
d) |
Income
Taxes
|
e) |
Amortization
|
Computer
equipment
|
3
years
|
Computer
software
|
3
years
|
Office
furniture and equipment
|
5
years
|
f)
|
Stock
Based Compensation
|
g)
|
Financial
Instruments
|
2.
|
SIGNIFICANT
ACCOUNTING POLICIES (Continued)
|
g)
|
Financial
Instruments (Continued)
|
h)
|
Net
Loss Per Share
|
i)
|
Foreign
Currency Translation
|
2.
|
SIGNIFICANT
ACCOUNTING POLICIES (Continued)
|
3.
|
CAPITAL
ASSETS
|
2004
|
|||||||||||||||||||||||||
|
|||||||||||||||||||||||||
ACCUMULATED
|
NET
BOOK
|
||||||||||||||||||||||||
COST
|
AMORTIZATION
|
VALUE
|
|||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||
Computer
equipment
|
$
|
14,897
|
$
|
8,943
|
$
|
5,954
|
|||||||||||||||||||
Office
furniture and equipment
|
7,663
|
7,645
|
18
|
||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||
$
|
23,016
|
$
|
17,044
|
$
|
5,972
|
||||||||||||||||||||
|
|
|
2003
|
|||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||
|
NET
BOOK
|
||||||||||||||||||||||||||||||
|
|
|
AMORTIZATION
|
VALUE
|
|||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||
Computer
equipment
|
$
|
11,910
|
$
|
6,420
|
$
|
5,490
|
|||||||||||||||||||||||||
Office
furniture and equipment
|
2,430
|
1,191
|
1,239
|
||||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||
$
|
14,796
|
8,067
|
6,729
|
||||||||||||||||||||||||||||
|
|
|
2004
|
2003
|
||||||||||||
|
|
||||||||||||
Convertible
Loans & Advances
|
|||||||||||||
-
past due
|
$
|
285,788
|
$
|
12,970
|
|||||||||
-
due within one year
|
226,576
|
380,269
|
|||||||||||
|
|
||||||||||||
512,364
|
393,239
|
||||||||||||
Non
Convertible Loans & Advances
|
226,217
|
4,674
|
|||||||||||
|
|
||||||||||||
Total
Loans & Advances Payable
|
$
|
738,581
|
$
|
397,913
|
|||||||||
|
|
a)
|
Of
the Loans and Advances that are not convertible into Common Stock,
additional details have been listed
below:
|
2004
|
2003
|
||||||||||||
AMOUNT
|
AMOUNT
|
||||||||||||
|
|
||||||||||||
Bears
no interest
|
$
|
81,385
|
$
|
4,674
|
|||||||||
Bears
no interest, paid Loan fee of $10,500
|
65,500
|
-
|
|||||||||||
Bears
an interest rate of 10% and paid loan fees of $6,000
|
62,000
|
-
|
|||||||||||
Accrued
Loan Fees on Convertible Debt
|
13,100
|
-
|
|||||||||||
Accrued
Interest to be paid on Convertible Debt
|
4,232
|
-
|
|||||||||||
|
|
||||||||||||
Total
Loan & Advances Payable - non convertible
|
$
|
226,217
|
$
|
4,674
|
|||||||||
|
|
b)
|
All
of the Loans and Advances convertible into Common Stock are convertible
only at the option of the holder. Additional details are listed
below:
|
2004
|
2003
|
||||||||||||
AMOUNT
|
AMOUNT
|
||||||||||||
|
|
||||||||||||
Convertible
at a rate to be agreed between the Company and the holder within
48 hrs of
holder’s request for conversion, bears interest rate of 5%
|
$
|
102,000
|
$
|
-
|
|||||||||
Convertible
at a rate to be agreed between the Company and the holder within
48 hrs of
request for conversion, bears no interest rate
|
114,500
|
-
|
|||||||||||
Convertible
at a rate to be mutually agreed between the Company and the holder,
bears
no interest rate
|
10,076
|
-
|
|||||||||||
Convertible
at $0.02 per share, bears no interest
|
1,855
|
1,400
|
|||||||||||
Convertible
at $0.12 per share, bears no interest
|
12,479
|
11,570
|
|||||||||||
Convertible
after June 30, 2006 at $0.02 per share, bears no interest
|
160,796
|
271,087
|
|||||||||||
Convertible
after June 30, 2006 at $0.05 per share, bears no interest
|
110,658
|
109,182
|
|||||||||||
|
|
||||||||||||
Convertible
loans and advances
|
$
|
512,364
|
$
|
393,239
|
|||||||||
|
|
$272,760
of the convertible loans and advances are due to related parties.
During
the year ended December 31, 2004, conversion privileges on $271,454
of the
related party amounts were extended from June 30, 2004 to June
30,
2006.
|
a)
|
On
July 2, 2003, the Company issued 1,000,000 pre-consolidated Series
A
Convertible Preferred Shares for non cash consideration of $200,000
pursuant to a pending acquisition of a Nightclub Operation located
in
Toronto, Canada. In May 2004, the acquisition discussions evolved
into a
business lease arrangement which resulted in the above Series A
Preferred
Shares consideration, and $81,219 cash advanced to the nightclub
owners,
being expensed as a business development cost. On October 3, 2003,
the
Company redeemed 125,000 of the pre-consolidated Series A Preferred
Shares
for $50,000 cash.
|
b)
|
On
May 27, 2004, the Company issued 60,000,000 Series B Preferred
Stock for
the cancellation of $102,000 of debt owed to a director. Series
B
Preferred Stock has a Conversion Right of 1 Common Share for 1
Preferred
Share and are convertible at the option of the holder for a period
of 10
years from the date of issuance. Series B convertible preferred
stock has
Voting Right of 50 Common Shares for 1 Preferred Share. During
the first
consolidation of common stock in 2004, these shares were consolidated
on a
1 for 1,000 shares basis, leaving 60,000 post consolidation Series
B
Preferred Shares outstanding. On October 12, 2004, the rights of
the
Series B Preferred Shares were amended to include Anti-dilutive
rights;
and thus, the 60,000 Series B Preferred Shares were not subject
to the
2000:1 share consolidation of November 8, 2004. On October 19,
2004, the
Company issued an additional 80,000,000 Series B Preferred Shares
for non
cash consideration of the cancellation of $20,000 of debt owed
to a
director.
|
c)
|
The
accompanying financial statements for the year ended December 31,
2003
have been restated to correct an error in the accounting treatment
of the
October 3, 2003 redemption by the Company of 125,000 Series A convertible
preferred shares. Pursuant to APB #6, when a corporation’s stock is
purchased for retirement an excess of purchase price over par or
stated
value may be allocated between capital surplus and retained earnings.
The
portion of excess allocated to capital surplus is limited to the
sum of
(a) all capital surplus arising from previous retirements and net
gains on
sales of treasury stock of the same issue, and (b) the pro-rata
portion of
capital surplus paid in on the same issue. The Company retroactively
adjusted additional paid-in capital for the $25,000 pro-rata portion
of
the $50,000 cash repurchase of Series A convertible preferred stock.
The
restatement has no effect on previously reported loss or loss per
share.
|
8.
|
STOCK
OPTIONS AND WARRANTS
OUTSTANDING
|
a)
|
Stock
options
|
8.
|
STOCK
OPTIONS AND WARRANTS OUTSTANDING
(Continued)
|
a)
|
Stock
options (Continued)
|
NUMBER
OF
SHARES
|
GRANT
DATE PRICE
PER
SHARE
|
EXPIRY
DATE
|
|||||
|
|
|
|||||
2
|
$
|
200,000
|
February
8, 2005
|
||||
262,500
|
$
|
0.025
|
November
10, 2014
|
||||
13,397,100
|
$
|
0.009
|
November
2, 2014
|
||||
24,000,000
|
$
|
0.011
|
December
1, 2014
|
||||
|
|||||||
37,659,602
|
|||||||
|
NUMBER
OF
OPTIONS
|
GRANT
DATE
WEIGHTED
AVERAGE
EXERCISE
PRICE
|
|||||||||
|
|
|||||||||
Balance,
December 31, 2002
|
14
|
$
|
320,000
|
|||||||
Granted
|
34
|
14,209
|
||||||||
Exercised
|
(31
|
)
|
(14,697
|
)
|
||||||
Expired
|
(10
|
)
|
(368,000
|
)
|
||||||
|
||||||||||
Balance,
December 31, 2003
|
7
|
126,215
|
||||||||
Granted
|
51,076,534
|
0.08
|
||||||||
Exercised
|
(12,356,802
|
)
|
(0.23
|
)
|
||||||
Expired
|
(1,060,137
|
)
|
(0.62
|
)
|
||||||
|
||||||||||
Balance,
December 31, 2004
|
37,659,602
|
$
|
0.02
|
|||||||
|
8.
|
STOCK
OPTIONS AND WARRANTS OUTSTANDING
(Continued)
|
b)
|
Share
Purchase Warrants
|
NUMBER
OF
SHARES
|
PRICE
PER
SHARE
|
EXPIRY
DATE
|
|||||
|
|
|
|||||
1
|
$
|
20,000
|
May
28, 2006
|
||||
2
|
|
$
|
50,000
|
July
15, 2005
|
|||
2
|
|
$
|
100,000
|
July
15, 2005
|
|||
2
|
|
$
|
120,000
|
May
28, 2005
|
|||
3
|
$
|
200,000
|
February
6, 2005
|
||||
2
|
$
|
400,000
|
April
30, 2005
|
||||
1
|
$
|
400,000
|
May
16, 2005
|
||||
1
|
$
|
500,000
|
January
17, 2005
|
||||
1
|
$
|
500,000
|
March
31, 2005
|
||||
1
|
$
|
800,000
|
May
16, 2005
|
||||
1
|
$
|
1,000,000
|
March
20, 2005
|
||||
1
|
$
|
1,000,000
|
May
16, 2005
|
||||
1
|
$
|
1,500,000
|
May
16, 2005
|
||||
1
|
$
|
2,000,000
|
March
20, 2005
|
||||
2
|
$
|
6,000,000
|
September
17, 2006
|
||||
|
|||||||
22
|
|||||||
|
8.
|
STOCK
OPTIONS AND WARRANTS OUTSTANDING
(Continued)
|
b)
|
Share
Purchase Warrants (Continued)
|
NUMBER
OF
SHARES
|
WEIGHTED
AVERAGE
EXERCISE
PRICE
|
|||||||||
|
|
|||||||||
Balance,
December 31, 2001
|
24
|
$
|
1,208,333
|
|||||||
Granted
|
20
|
488,000
|
||||||||
Exercised
|
(2
|
)
|
(400,000
|
)
|
||||||
Cancelled
|
(1
|
)
|
(120,000
|
)
|
||||||
|
||||||||||
Balance,
December 31, 2002
|
41
|
922,927
|
||||||||
Granted
|
1
|
20,000
|
||||||||
|
||||||||||
Balance,
December 31, 2003
|
42
|
901,429
|
||||||||
Cancelled
|
(20
|
)
|
(810,000
|
)
|
||||||
|
||||||||||
Balance,
December 31, 2004
|
22
|
$
|
984,545
|
|||||||
|
9.
|
STOCK
BASED COMPENSATION
|
a)
|
Non-Employees
|
9.
|
STOCK
BASED COMPENSATION
(Continued)
|
a)
|
Non-Employees
(Continued)
|
9.
|
STOCK
BASED COMPENSATION
(Continued)
|
b)
|
Employees
|
2004
|
2003
|
|||
|
|
|||
Risk-free
interest rate
|
1.97%
|
3.10%
|
||
Expected
term of options
|
4
months
|
1
week
|
||
Expected
volatility
|
311%
|
41%
- 432%
|
||
Dividend
yield
|
Nil
|
Nil
|
2004
|
2003
|
||||||||||||
|
|
||||||||||||
Net
loss, as reported
|
$
|
(4,668,266
|
)
|
$
|
(909,856
|
)
|
|||||||
Add:
Stock based compensation expense included in net loss, as
reported
|
1,587,753
|
65,093
|
|||||||||||
Deduct:
Stock based compensation expense determined under fair value
method
|
(1,799,255
|
)
|
(135,035
|
)
|
|||||||||
|
|
||||||||||||
Net
loss, pro-forma
|
$
|
(4,879,768
|
)
|
$
|
(979,798
|
)
|
|||||||
|
|
||||||||||||
Net
loss per share (basic and diluted), as reported
|
$
|
(1.84
|
)
|
$
|
(14,442
|
)
|
|||||||
|
|
||||||||||||
Net
loss per share (basic and diluted), pro-forma
|
$
|
(1.92
|
)
|
$
|
(15,553
|
)
|
|||||||
|
|
10.
|
RELATED
PARTY TRANSACTIONS
|
a) |
Included
in accounts payable at December 31, 2004 is $523,203 (2003 - $546,152)
owing to directors or companies controlled by
directors.
|
b) |
Included
in loans and advances payable at December 31, 2004 is $351,289
(2003 -
$373,009) owing to directors or a companies controlled by
directors.
|
c) |
During
the year ended December 31, 2004, the Company incurred $200,004
(2003 -
$200,285) in consulting and business development expenses with
directors
and $14,000 in consulting expense paid to a brother of a director
(2003 -
$NIL).
|
11.
|
SUPPLEMENTAL
DISCLOSURE OF NON CASH FINANCING AND INVESTING
ACTIVITIES
|
2004
|
2003
|
||||||||||||
|
|
||||||||||||
Shares
issued for debt and services
|
$
|
342,760
|
$
|
661,165
|
|||||||||
|
|
||||||||||||
Series
B convertible preferred shares issued for debt owing to a
director
|
$
|
122,000
|
$
|
-
|
|||||||||
|
|
||||||||||||
Series
A convertible preferred shares issued as an advance on an
acquisition
|
$
|
-
|
$
|
200,000
|
|||||||||
|
|
12.
|
COMMITMENTS
|
a)
|
During
the years ended December 31, 2004 and 2003, the Company executed
Management Services Memorandums with two separate companies controlled
by
two directors to provide Management Services effective on January
1, 2004
and November 1, 2003, respectively. The memorandums provide for
performance bonuses and total annual compensation as
follows:
|
Year
ended December 31, 2005
|
$
|
200,000
|
Year
ended December 31, 2006
|
$
|
200,000
|
Year
ended December 31, 2007
|
$
|
0
|
b)
|
During
the year ended December 31, 2004, the Company signed consulting
agreements
for services to be performed in the next fiscal year totalling
$185,200,
of which $12,000 is due to a related
party.
|
c)
|
During
the year ended December 31, 2004, the Company signed short term
lease
agreements for office space, and related services, in both Las
Vegas,
Nevada, and Vancouver, British Columbia. The agreements provide
for
payments as follows:
|
Year
ended December 31, 2005
|
$
|
30,708
|
Year
ended December 31, 2006
|
$
|
0
|
Year
ended December 31, 2007
|
$
|
0
|
d)
|
Pursuant
to an agreement dated December 28, 2004 with Global Bancorp Inc.,
the
Company has a commitment to acquire 800 shares of VOXBOX Telecom
Inc. (a
Nevada incorporated company) for a cash consideration of $40,000
(Note
14(c)).
|
e)
|
During
the year ended December 31, 2004, the Company entered into a business
lease agreement to pay CDN$5,500 per month for a term of five years
beginning April 1, 2004 to lease the Sequel Lounge Nightclub in
Toronto,
Canada. The Company defaulted on its lease payments and, subsequent
to
December 31, 2004, entered into a settlement agreement to pay,
on or
before June 30, 2005, CDN$414,000 to the lessor in settlement of
the
business lease agreement. The amount has been accrued as at December
31,
2004 and expensed as an operating cost in the consolidated statement
of
operations. Subsequent to December 31, 2004, approximately CDN$
400,000
has been paid to this settlement.
|
13.
|
INCOME
TAXES
|
2004
|
2003
|
||||||||||||
|
|
||||||||||||
Statutory
rate
|
34
|
%
|
34
|
%
|
|||||||||
|
|
||||||||||||
Provision
for income taxes based on statutory rate
|
$
|
(1,580,000
|
)
|
$
|
(309,000
|
)
|
|||||||
Non-deductibles
|
384,000
|
(22,000
|
)
|
||||||||||
|
|
||||||||||||
Income
tax recovery
|
(1,196,000
|
)
|
(331,000
|
)
|
|||||||||
Unrecognized
benefit of operating loss carry forwards
|
1,196,000
|
331,000
|
|||||||||||
|
|
||||||||||||
Income
tax recovery
|
$
|
-
|
$
|
-
|
|||||||||
|
|
2004
|
2003
|
||||||||||||
|
|
||||||||||||
Future
tax assets
|
|||||||||||||
Loss
carryforwards
|
$
|
2,520,000
|
$
|
1,318,000
|
|||||||||
Valuation
allowance
|
(2,520,000
|
)
|
(1,318,000
|
)
|
|||||||||
|
|
||||||||||||
$
|
-
|
$
|
-
|
||||||||||
|
|
14.
|
BUSINESS
SEGMENTS
|
15.
|
SUBSEQUENT
EVENTS
|
|
a)
Subsequent to December 31, 2004, the Company granted stock options
to
employees to acquire up to 2.192.000.000 shares of common stock
at various
exercise prices between $0.0003 and $0.025 per share. Of the stock
options
granted 160,000,000 have been cancelled, and 1,194,023,175 have
been
exercised providing proceeds to the Company of
$882,913.
|
|
h)
See also Note 12(e).
|