The financial information presented herein has
been prepared by management
The accompanying notes are an integral part
of these financial statements.
Notes
to Consolidated Financial Statements
June
30, 2014 and 2013
Note
A - Organization and Description of Business
Signet
International Holdings, Inc. (Company) was incorporated on February 2, 2005 in accordance with the Laws of the State of Delaware
as 51142, Inc. The Company changed its corporate name to Signet International Holdings, Inc. in conjunction with the
September 8, 2005 transaction discussed below.
On
September 8, 2005, pursuant to a Stock Purchase Agreement and Share Exchange (Agreement) by and among Signet International Holdings,
Inc. (Signet); Signet Entertainment Corporation (SIG) and the shareholders of SIG (Shareholders) (collectively SIG and the SIG
shareholders shall be known as the “SIG Group”), Signet acquired 100.0% of the then issued and outstanding preferred
and common stock of SIG for a total of 3,421,000 common shares and 5,000,000 preferred shares of Signet’s stock issued to
the SIG Group. Pursuant to the agreement, SIG became a wholly owned subsidiary of Signet.
Signet
Entertainment Corporation was incorporated on October 17, 2003 in accordance with the Laws of the State of Florida. SIG
was formed to establish a television network “The Gaming and Entertainment Network”. To date, this effort
has been incomplete.
The
Company is considered in the development stage and, as such, has generated no significant operating revenues and has incurred
cumulative operating losses of approximately $3,580,000.
Note
B - Preparation of Financial Statements
The
acquisition of Signet Entertainment Corporation by Signet International Holdings, Inc. effected a change in control of Signet
International Holdings, Inc. and is accounted for as a “reverse acquisition” whereby Signet Entertainment Corporation
is the accounting acquirer for financial statement purposes. Accordingly, for all periods subsequent to the “reverse
merger” transaction, the financial statements of the Signet International Holdings, Inc. will reflect the historical financial
statements of Signet Entertainment Corporation from its inception and the operations of Signet International Holdings, Inc. subsequent
to the September 8, 2005 transaction date.
The
Company follows the accrual basis of accounting in accordance with accounting principles generally accepted in the United States
of America and has a year-end of December 31.
The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
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 amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Management
further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system
of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting
control is designed to assure, among other items, that 1) recorded transactions are valid; 2) valid transactions are recorded;
and 3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly
the financial condition, results of operations and cash flows of the Company for the respective periods being presented.
Signet
International Holdings, Inc. and Subsidiary
(a
development stage enterprise)
Notes
to Consolidated Financial Statements - Continued
June
30, 2014 and 2013
Note
B - Preparation of Financial Statements - Continued
During
interim periods, the Company follows the accounting policies set forth in its annual audited financial statements filed with the
U. S. Securities and Exchange Commission on its Annual Report on Form 10-K for the year ended December 31, 2013. The
information presented within these interim financial statements may not include all disclosures required by generally accepted
accounting principles and the users of financial information provided for interim periods should refer to the annual financial
information and footnotes when reviewing the interim financial results presented herein.
In
the opinion of management, the accompanying interim financial statements, prepared in accordance with the U. S. Securities and
Exchange Commission’s instructions for Form 10-Q, are unaudited and contain all material adjustments, consisting only of
normal recurring adjustments necessary to present fairly the financial condition, results of operations and cash flows of the
Company for the respective interim periods presented. The current period results of operations are not necessarily
indicative of results which ultimately will be reported for the full fiscal year ending December 31, 2014.
The
accompanying consolidated financial statements contain the accounts of Signet International Holdings, Inc. and its wholly-owned
subsidiary, Signet Entertainment Corporation. All significant intercompany transactions have been eliminated. The
consolidated entities are collectively referred to as “Company”.
Note
C - Going Concern Uncertainty
The
Company is still in the process of developing and implementing its business plan and raising additional capital. As
such, the Company is considered to be a development stage company.
The
Company's continued existence is dependent upon its ability to generate sufficient cash flows from operations to support its daily
operations as well as provide sufficient resources to retire existing liabilities and obligations on a timely basis.
The
Company anticipates that future sales of equity securities to fully implement its business plan or to raise working capital to
support and preserve the integrity of the corporate entity may be necessary. There is no assurance that the Company
will be able to obtain additional funding through the sales of additional equity securities or, that such funding, if available,
will be obtained on terms favorable to or affordable by the Company.
If
no additional capital is received to successfully implement the Company’s business plan, the Company will be forced to rely
on existing cash in the bank and upon additional funds which may or may not be loaned by management and/or significant stockholders
to preserve the integrity of the corporate entity at this time. In the event, the Company is unable to acquire sufficient
capital; the Company’s ongoing operations would be negatively impacted.
It
is the intent of management and significant stockholders to provide sufficient working capital necessary to support and preserve
the integrity of the corporate entity. However, no formal commitments or arrangements to advance or loan funds to the
Company or repay any such advances or loans exist. There is no legal obligation for either management or significant
stockholders to provide additional future funding.
While
the Company is of the opinion that good faith estimates of the Company’s ability to secure additional capital in the future
to reach our goals have been made, there is no guarantee that the Company will receive sufficient funding to sustain operations
or implement any future business plan steps.
Signet
International Holdings, Inc. and Subsidiary
(a
development stage enterprise)
Notes
to Consolidated Financial Statements - Continued
June
30, 20144 and 2013
Note
D - Summary of Significant Accounting Policies
1.
|
Cash
and cash equivalents
|
For
Statement of Cash Flows purposes, the Company considers all cash on hand and in banks, certificates of deposit and other highly-liquid
investments with maturities of three months or less, when purchased, to be cash and cash equivalents.
The
Company has adopted the provisions of provisions required by the Start-Up Activities topic of the FASB Accounting Standards Codification
whereby all organizational and initial costs incurred with the incorporation and initial capitalization of the Company were charged
to operations as incurred.
3.
|
Research
and development expenses
|
Research
and development expenses are charged to operations as incurred.
The
Company does not utilize direct solicitation advertising. All other advertising and marketing expenses are charged
to operations as incurred.
The
Company files income tax returns in the United States of America and may file, as applicable and appropriate, various state(s). With
few exceptions, the Company is no longer subject to U.S. federal, state and local, as applicable, income tax examinations by regulatory
taxing authorities for years before 2006. The Company does not anticipate any examinations of returns filed since 2006.
The
Company uses the asset and liability method of accounting for income taxes. At June 30, 2014 and December 31, 2013,
respectively, the deferred tax asset and deferred tax liability accounts, as recorded when material to the financial statements,
are entirely the result of temporary differences. Temporary differences generally represent differences in the recognition
of assets and liabilities for tax and financial reporting purposes, primarily accumulated depreciation and amortization, allowance
for doubtful accounts and vacation accruals.
The
Company has adopted the provisions required by the Income Taxes topic of the FASB Accounting Standards Codification. The
Codification Topic requires the recognition of potential liabilities as a result of management’s acceptance of potentially
uncertain positions for income tax treatment on a “more-likely-than-not” probability of an assessment upon examination
by a respective taxing authority. As a result of the implementation of the Codification’s Income Tax Topic, the
Company did not incur any liability for unrecognized tax benefits.
Signet
International Holdings, Inc. and Subsidiary
(a
development stage enterprise)
Notes
to Consolidated Financial Statements - Continued
June
30, 2014 and 2013
Note
D - Summary of Significant Accounting Policies - Continued
6.
|
Earnings
(loss) per share
|
Basic
earnings (loss) per share is computed by dividing the net income (loss) available to common shareholders by the weighted-average
number of common shares outstanding during the respective period presented in our accompanying financial statements.
Fully
diluted earnings (loss) per share is computed similar to basic income (loss) per share except that the denominator is increased
to include the number of common stock equivalents (primarily outstanding options and warrants).
Common
stock equivalents represent the dilutive effect of the assumed exercise of the outstanding stock options and warrants, using the
treasury stock method, at either the beginning of the respective period presented or the date of issuance, whichever is later,
and only if the common stock equivalents are considered dilutive based upon the Company’s net income (loss) position at
the calculation date.
At
June 30, 2014 and 2013, and subsequent thereto, the Company’s issued and outstanding preferred stock is considered anti-dilutive
due to the Company’s net operating loss position.
7.
|
Pending
and/or New Accounting Pronouncements
|
The
Company is of the opinion that any pending accounting pronouncements, either in the adoption phase or not yet required to be adopted,
will not have a significant impact on the Company's financial position or results of operations.
Note
E - Fair Value of Financial Instruments
The
carrying amount of cash, accounts receivable, accounts payable and notes payable, as applicable, approximates fair value due to
the short term nature of these items and/or the current interest rates payable in relation to current market conditions.
Interest
rate risk is the risk that the Company’s earnings are subject to fluctuations in interest rates on either investments or
on debt and is fully dependent upon the volatility of these rates. The Company does not use derivative instruments
to moderate its exposure to interest rate risk, if any.
Financial
risk is the risk that the Company’s earnings are subject to fluctuations in interest rates or foreign exchange rates and
are fully dependent upon the volatility of these rates. The company does not use derivative instruments to moderate
its exposure to financial risk, if any.
Note
F - Option Agreement
On
July 23, 2008, we executed an Option to Purchase Asset Agreement (Agreement) with Access Media Group, Inc. (a Florida Corporation)
dba AMG TV, headquartered in Jensen Beach, FL, to acquire 100% of the assets, satellite delivery service contracts, customer service
agreements in the USA and the Caribbean, including the business operations located in Pittsburgh and North New Jersey for an agreed
purchase price is $3 million, payable as set forth in the Agreement, and the issuance of 100,000 shares of our restricted, unregistered
common stock. The term of our option is one (1) year and expires on July 22, 2009. As consideration for
the Agreement, the Company issued 20,000 shares of restricted, unregistered common stock to Access Media Group, Inc. with a mutually
agreed-upon value of $100,000.
The
Company has 180 days to complete the acquisition after serving notice to AMG TV that the Company intends to exercise the option
and is actively pursuing capital resources in order to exercise the option and integrate these operations according to the Company’s
Business Plan.
On
September 18, 2009, the Company and the owners of Access Media Group, Inc. executed an Asset Purchase Agreement whereby the Company
will acquire “... one hundred percent (100%) of the Pittsburgh, PA leased facility (and/or any other leased facility owned
or leased by Seller), licenses, equipment and ancillaries of the assets listed and identified on Exhibit A which includes a list
of Affiliates and Clearances and all other assets including but not limited to intellectual properties, leases, licenses, permits,
clients lists, contracts, applications pending or otherwise owned by AMG-TV without lien or security interest. The
purchase price is approximately $3,000,000 composed of 100,000 shares of common stock valued at $5.00 per share and a note payable
of $2,500,000. The $2,500,000 note payable bears interest at prime plus 2%, [accruing from September 18, 2009] and
is payable in increments of $100,000 starting on the 180th day after September 18, 2009 and $100,000 every 90 days thereafter. In
the event that the Company is successful in selling any part of a future stock offering, 33.3% of the net proceeds of said offering
will be applied to reduction of this note payable up to $1,500,000 or a maximum of the total balance due at that time.
This
Purchase Agreement was originally scheduled to close and become effective as of January 1, 2010; however, in March 2010, the Company
and Access Media Group, Inc. mutually agreed to defer the closing on this Purchase Agreement with no other changes to the terms
and conditions until funding sources can be arranged.
Signet
International Holdings, Inc. and Subsidiary
(a
development stage enterprise)
Notes
to Consolidated Financial Statements - Continued
June
30, 2014 and 2013
Note
G - Broadcast and Intellectual Properties
On
April 20, 2007, the Company entered into a new purchase agreement with FreeHawk for 100% of the rights to 21 television series
to be produced by FreeHawk exclusively for Signet. The total consideration paid by the Company for these rights was
270,000 shares of restricted, unregistered common stock and a $50,000 open account payable. Based on an independent
third-party appraisal, the Company valued this transaction at approximately $2,870,625. The common stock was issued
pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended, and no underwriter was
used in this transaction.
On
May 22, 2007, the Company acquired the exclusive television rights to “Tales From The moe. Republic”, by John E. Derhak. This
full-length novel is in the process of being published and is currently being sold in an abridged, autographed limited edition
through the website www.moerepublic.org. Total consideration paid by the Company for these rights was 113,662 shares
of restricted, unregistered common stock and a $25,000 promissory note. Based on an independent third-party appraisal,
the Company valued this transaction at approximately $1,136,600. The common stock was issued pursuant to an exemption
from registration under Section 4(2) of the Securities Act of 1933, as amended, and no underwriter was used in this transaction.
Note
H - Income Taxes
The
components of income tax (benefit) expense each of the six and three month periods ended June 30, 2014 and 2013 and for the period
from October 17, 2003 (date of inception) through June 30, 2014, are as follows:
|
|
|
|
Six
months
ended
June 30,
2014
|
|
|
|
Six
months
ended
June 30,
2013
|
|
|
|
Three
months
ended
June 30,
2014
|
|
|
|
Three
months
ended
June 30,
2013
|
|
|
|
Period
from October 17, 2003 (date of inception) through
June 30,
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Deferred
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
State:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Deferred
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
As
of June 30, 2013, the Company has a net operating loss carryforward of approximately $1,550,000 for Federal income tax purposes
and approximately $1,300,000 for State income tax purposes. The amount and availability of any future net operating
loss carryforwards may be subject to limitations set forth by the Internal Revenue Code. Factors such as the number of shares
ultimately issued within a three year look-back period; whether there is a deemed more than 50 percent change in control; the
applicable long-term tax exempt bond rate; continuity of historical business; and subsequent income of the Company all enter into
the annual computation of allowable annual utilization of the carryforwards.
(Remainder
of this page left blank intentionally)
Signet
International Holdings, Inc. and Subsidiary
(a
development stage enterprise)
Notes
to Consolidated Financial Statements - Continued
June
30, 2014 and 2013
Note
H - Income Taxes - Continued
The
Company's income tax expense (benefit) for each of the six months ended June 30, 2014 and 2013 and for the period from October
17, 2003 (date of inception) through June 30, 2014, respectively, differed from the statutory federal rate of 34 percent as follows:
|
|
Six
months ended
June 30,
2014
|
|
|
Six
months ended
June 30,
2013
|
|
|
Period
from October 17, 2003 (date of inception) through
June 30,
2014
|
|
Statutory
rate applied to income before income taxes
|
|
$
|
(61,659
|
)
|
|
$
|
(67,740
|
)
|
|
$
|
(1,217,422
|
)
|
Increase (decrease)
in income taxes resulting from:
|
|
|
|
|
|
|
|
|
|
|
|
|
State income taxes
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Non-deductible accrued
compensation
|
|
|
35,530
|
|
|
|
35,700
|
|
|
|
598,704
|
|
Non-deductible consulting
fees related to issuance of common stock at less than “fair value”
|
|
|
-
|
|
|
|
-
|
|
|
|
62,000
|
|
Other,
including reserve for deferred tax asset and application of net operating loss carryforward
|
|
|
26,129
|
|
|
|
32,040
|
|
|
|
556,717
|
|
Income
tax expense
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Temporary
differences, consisting primarily of the prospective usage of net operating loss carryforwards give rise to deferred tax assets
and liabilities as of June 30, 2014 and December 31, 2013, respectively:
|
|
June 30,
2014
|
|
|
December 31, 2013
|
|
Deferred tax assets
|
|
|
|
|
|
|
Net operating loss carryforwards
|
|
$
|
26,129
|
|
|
$
|
565,500
|
|
Officer compensation deductible when paid
|
|
|
35,530
|
|
|
|
575,000
|
|
Less valuation allowance
|
|
$
|
(61,659
|
)
|
|
$
|
(1,140,500
|
)
|
Net Deferred Tax Asset
|
|
$
|
-
|
|
|
$
|
-
|
|
During
the three months ended June 30, 2014 and the year ended December 31, 2013, respectively, the valuation allowance for the deferred
tax asset increased by approximately $30,000 and $280,000.
Signet
International Holdings, Inc. and Subsidiary
(a
development stage enterprise)
Notes
to Consolidated Financial Statements - Continued
June
30, 2014 and 2013
Note
I - Preferred Stock
On
March 14, 2007, the Company formally designated a series of Super Preferred Stock of the Company’s 50,000,000 authorized
shares of the capital preferred stock of the Corporation. The designated Series A Convertible Super Preferred Stock
(the "Series A Super Preferred Stock"), to consist of 5,000,00 shares, par value $.001 per share, which shall have the
following preferences, powers, designations and other special rights:
Voting:
|
Holders of the Series A
Super Preferred Stock shall have ten votes per share held on all matters submitted to the shareholders of the Company for
a vote thereon. Each holder of these shares shall have the option to appoint two additional members to the Board
of Directors. Each share shall be convertible into ten (10) shares of common stock.
|
Dividends:
|
The holders of Series A
Super Preferred Stock shall be entitled to receive dividends or distributions on a pro rata basis with the holders of common
stock when and if declared by the Board of Directors of the Company. Dividends shall not be cumulative. No
dividends or distributions shall be declared or paid or set apart for payment on the Common Stock in any calendar year unless
dividends or distributions on the Series A Preferred Stock for such calendar year are likewise declared and paid or set apart
for payment. No declared and unpaid dividends shall bear or accrue interest.
|
Liquidation
Preference
|
Upon the liquidation, dissolution
and winding up of the Company, whether voluntary or involuntary, the holders of the Series A Super Preferred Stock then outstanding
shall be entitled to, on a pro-rata basis with the holders of common stock, distributions of the assets of the Corporation,
whether from capital or from earnings available for distribution to its stockholders.
|
The
Board of Directors has the authority, without further action by the shareholders, to issue, from time to time, preferred stock
in one or more series for such consideration and with such relative rights, privileges, preferences and restrictions that the
Board may determine. The preferences, powers, rights and restrictions of different series of preferred stock may differ with respect
to dividend rates, amounts payable on liquidation, voting rights, conversion rights, redemption provisions, sinking fund provisions
and purchase funds and other matters. The issuance of preferred stock could adversely affect the voting power or other rights
of the holders of common stock.
On
October 20, 2003, in conjunction with the formation and incorporation of Signet Entertainment Corporation, SIG issued 4,000,000
shares of preferred stock to the incorporating persons. This transaction was valued at approximately $40,000,
which approximates the value of the services provided.
On
July 19, 2005, the Company issued 1,000,000 shares of preferred stock to an existing shareholder and Company officer for services
related to the organization and structuring of the Company and its proposed business plan. This transaction was valued
at approximately $10,000, which approximates the value of the services provided.
Concurrent
with the reverse merger transaction, these shareholders exchanged their Signet Entertainment Corporation preferred stock for equivalent
shares of Signet International Holdings, Inc. Series A Super Preferred stock, as described above.
Signet
International Holdings, Inc. and Subsidiary
(a
development stage enterprise)
Notes
to Consolidated Financial Statements - Continued
June
30, 2014 and 2013
Note
J - Common Stock Transactions
On
October 17, 2003 and November 1, 2003, in connection with the incorporation and formation of the Company, an aggregate of approximately
3,294,000 shares of restricted, unregistered shares of common stock and were issued to various founding individuals. This
combined preferred stock and common stock issuances were collectively valued at approximately $40,810, which approximated the
fair value of the time provided by the individuals and the related out-of-pocket expenses.
On
June 16, 2004 and December 3, 2004, the Company sold, in three separate transactions to three unrelated individuals, an aggregate
70,000 shares of restricted, unregistered common stock for $35,000 cash. These shares were sold pursuant to an exemption
from registration under Section 4(2) of the Securities Act of 1933, as amended, and no underwriter was used any of the three transactions.
Between
July 20, 2005 and August 26, 2005, Signet Entertainment Corporation sold an aggregate 57,000 shares of common stock to existing
and new shareholders at a price of $0.01 per share for gross proceeds of approximately $570. As this selling price
was substantially below the “fair value” of comparable transactions, the Company recognized a charge to operations
for consulting expense equivalent to the difference between the established “fair value” of $1.00 per share (as determined
by the pricing in the September 2005 Private Placement Memorandum) and the selling price of $0.01 per share.
On
September 9, 2005, the Company commenced the sale of common stock pursuant to a Private Placement Memorandum in a self-underwritten
offering. This Memorandum is offering for sale to persons who qualify as accredited investors and to a limited number
of sophisticated investors, on a best efforts basis, up to 2,000,000 of our common shares at $1.00 per share, for anticipated
gross proceeds of $2,000,000. The common shares will be offered through the Company’s officers and directors
on a best-efforts basis. The minimum investment is $1,000, however, the Company might, at its sole discretion, accept
subscriptions for lesser amounts. Funds received from all subscribers will be released to the Company upon acceptance
of the subscriptions by the Company’s management. Through December 31, 2006, the Company has sold an aggregate
381,000 shares for gross proceeds of $381,000 under this Memorandum.
On
March 31, 2006, the Company repurchased 50,000 shares of common stock from the estate of a deceased shareholder which purchased
said shares for $50,000 cash pursuant to the aforementioned September 2005 Private Placement Memorandum for $50,000 cash. In
June 2006, the Company’s Board of Directors cancelled these shares and returned them to unissued status.
On
June 22, 2006, the Company issued 250,000 shares of unregistered, restricted common stock, valued at $0.50 per share or $125,000, in
payment of consulting fees. As the agreed-upon value of the services provided was less than the “fair
value” of comparable transactions, the Company has recognized an additional charge to Consulting Fees equivalent to the
difference between the established “fair value” of $1.00 per share (as determined by the pricing in the September
2005 Private Placement Memorandum) and the agreed-upon value of $0.50 per share in the corresponding line item in the Company’s
Statement of Operations.
On
April 16, 2007, the Company issued 270,000 shares of unregistered, restricted common stock for the acquisition of certain broadcast
and other production rights. These shares were sold pursuant to an exemption from registration under Section 4(2) of
the Securities Act of 1933, as amended, and no underwriter was used in this transaction.
On
May 2, 2007, the Company sold, in a private transaction, 6,800 shares of unregistered, restricted common stock at a price of $1.00
per share for cash. These shares were sold pursuant to an exemption from registration under Section 4(2) of the Securities
Act of 1933, as amended, and no underwriter was used in this transaction.
On
May 22, 2007, the Company issued 113,662 shares of unregistered, restricted common stock for the acquisition of intellectual properties
related to literary works. These shares were sold pursuant to an exemption from registration under Section 4(2) of
the Securities Act of 1933, as amended, and no underwriter was used in this transaction.
On
August 30, 2007, the Company sold, in a private transaction, 12,500 shares of unregistered, restricted common stock at a price
of $1.00 per share for cash. These shares were sold pursuant to an exemption from registration under Section 4(2) of
the Securities Act of 1933, as amended, and no underwriter was used in this transaction.
On
June 5, 2008, the Company sold, in a private transaction, 3,000 shares of unregistered, restricted common stock for cash proceeds
of $800, which approximated the fair value and closing quoted price of the Company’s common stock on the transaction date. These
shares were sold pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended, and
no underwriter was used in this transaction.
Signet
International Holdings, Inc. and Subsidiary
(a
development stage enterprise)
Notes
to Consolidated Financial Statements - Continued
June
30, 2014 and 2013
Note
J - Common Stock Transactions - Continued
On
July 24, 2008 the Company issued 20,000 shares of unregistered, restricted common stock as a deposit on and in consideration for
a Purchase Option Agreement executed on July 23, 2008 with a TV distribution and syndication company. The deposit/option
fee will be deducted from the total 100,000 shares of unregistered, restricted common stock to be issued upon closing of the transaction
upon exercise of the option. The total shares issued and to be issued are part of the terms of the Purchase Option
Agreement that specifies a total purchase price of $3.0 million plus a management contract to be in place shortly after closing. Terms
of the management contract requires a payment of $20,000 per month to the present manager/owner. The term of Purchase
Option Agreement is one year from date of execution.
On
August 19, 2008, the Company sold, in a private transaction, 5,000 shares of unregistered, restricted common stock for cash proceeds
of $3,000, which approximated the fair value and closing quoted price of the Company's common stock on the transaction date. These
shares were sold pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended, and
no underwriter was used in this transaction.
On
August 22, 2008, the Company sold, in a private transaction, 174,000 shares of unregistered, restricted common stock for cash
proceeds of $55,000, which approximated the fair value and closing quoted price of the Company's common stock on the transaction
date. These shares were sold pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended,
and no underwriter was used in this transaction.
On
May 5, 2009, the Company sold, in a private transaction, 25,000 shares of unregistered, restricted common stock for cash proceeds
of $25,000, which approximated the fair value and closing quoted price of the Company's common stock on the transaction date.
These shares were sold pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended,
and no underwriter was used in this transaction.
On
September 18, 2009, in connection with an Asset Purchase Agreement, the Company issued 100,000 shares of common stock valued at
$5.00 per share as a down payment against the Agreement. These shares were issued pursuant to an exemption from registration
under Section 4(2) of the Securities Act of 1933, as amended, and no underwriter was used in this transaction.
On
October 26, 2009, the Company, pursuant to an Investment Agreement executed on October 23, 2007, sold 89,260 shares of the Company’s
common stock for cash proceeds of approximately $31,241 or $0.35 per share, which approximated the “fair value” of
the Company’s common stock on the date of the transaction. This transaction was in accordance with a Registration Rights
Agreement executed on November 5, 2007 with a Private Equity Fund whereby the Company agreed to sell an indeterminate amount of
its shares to the Fund and provided for the registration of said shares pursuant to a Registration Statement on Form SB-2 under
the Securities Act of 1933 as amended. The Company incurred costs of raising capital of approximately $5,300 on this transaction.
On
May 25, 2010 the Company, pursuant to an executed Binding Letter of Intent dated May 25, 2010 issued 100 shares of the Company’s
Common Stock to Pllx3, Inc. a California corporation in consideration for the acquisition of Pllx3, Inc. the closing to be on
or before December 31, 2010.
On
August 2, 2010 the Company, pursuant to an Investment Agreement executed on October 23, 2007, issued 14,000 shares of the Company’s
Common Stock. This transaction was in accordance with a Registration Rights Agreement executed on November 5, 2007
with a Private Equity Fund whereby the Company agreed to sell an indeterminate amount of its shares to the Fund and to provide
registration rights under the Securities Act of 1933 as amended.
On
September 1, 2010 the Company sold, in a private transaction, 14,285 shares of unregistered, restricted common stock for cash
which approximated the fair value and closing quoted price of the Company's common stock on the transaction date. These shares
were sold pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended, and no underwriter
was used in this transaction.
On
September 2, 2010 the Company sold, in a private transaction, 2,000 shares of unregistered, restricted common stock for cash which
approximated the fair value and closing quoted price of the Company’s common stock on the transaction date. These shares
were sold pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended, and no underwriter
was used in this transaction.
Signet
International Holdings, Inc. and Subsidiary
(a
development stage enterprise)
Notes
to Consolidated Financial Statements - Continued
June
30, 2014 and 2013
Note
J - Common Stock Transactions – Continued
On
September 9, and 24, 2010 the Company sold, in a private transaction, 73,745 shares of unregistered , restricted common stock
for cash which approximated the fair value and closing quoted price of the Company’s common stock on the transaction date.
These shares were sold pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended,
and no underwriter was used in this transaction.
On
September 29, 2010 the Federal Court for the Northern District of Texas ordered the return of 146,000 shares of common
stock. Pursuant to the Company's registration filing, Sb-2 effective February 2, 2007, the Company issued restricted
common stock to its founders who contributed their efforts in the formation of the company. By July 2007, the company
learned that one founder had unscrupulously attempted to conspire with others to sell all or part of his restricted 151,000 shares.
It became apparent that the shareholder had no intentions of assisting the company as promised. Consequently, the Company
issued a demand for the return of issued shares. On September 17, 2007, the Company filed a brief with the Dallas County Court,
Texas petitioning for the return of the Company's remaining shares of stock. On October 1, 2007 as a result of a court ordered
mediation, the Company was granted rescission of all the remaining 146,000 shares and imposed other constraints upon the defendant. On
January 18, 2008, the defendant filed a Motion for a New Trial in Dallas, Texas. On September 29, 2010 the Federal
Court for the Northern District of Texas denied the defendant’s appeal and ordered the return of the Company’s stock.
On
October 15, 2010 The Company issued 50,000 shares of unregistered, restricted common stock in consideration for the obtaining
legal filings to recover the Federal Court for the Northern District of Texas awarded return of the Company’s stock. The
issued stock value approximated the fair value and closing quoted price of the Company’s common stock on the issue date.
These shares were issued pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended,
and no underwriter was used in this transaction.
On
December 29, 2010 The Company sold in a private transaction, 6,000 shares of unregistered, restricted common stock for cash which
approximated the fair value and closing quoted price of the Company’s common stock on the transaction date. These shares
were sold pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended, and no underwriter
was used in this transaction.
On
March 1, 2011 The Company sold in a private transaction, 16,700 shares of unregistered, restricted common stock for cash which
approximated the fair value and closing quoted price of the Company’s common stock on the transaction date. These shares
were sold pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended, and no underwriter
was used in this transaction.
On
March 3, 2011 The Company issued 1.0 Million shares of unregistered, restricted common stock to a Public Relations and Investors
Relations firm in consideration for professional services to further the company’s efforts to expand public awareness. By
mutual agreement, the company has reserved the right of rescission predicated upon the success of the PR Firm. These shares were
issued pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended, and no underwriter
was used in this transaction.
On
March 8, 2011 The Company sold in a private transaction, 1,500 shares of unregistered, restricted common stock for cash which
approximated the fair value and closing quoted price of the Company’s common stock on the transaction date. These shares
were sold pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended, and no underwriter
was used in this transaction..
On
March 10, 2011 The Company sold in a private transaction, 8,000 shares of unregistered, restricted common stock for cash which
approximated the fair value and closing quoted price of the Company’s common stock on the transaction date. These shares
were sold pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended, and no underwriter
was used in this transaction.
On
March 31, 2011 The Company sold in a private transaction, 82,200 shares of unregistered, restricted common stock for cash which
approximated the fair value and closing quoted price of the Company’s common stock on the transaction date. These shares
were sold pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended, and no underwriter
was used in this transaction.
Signet
International Holdings, Inc. and Subsidiary
(a
development stage enterprise)
Notes
to Consolidated Financial Statements - Continued
June
30, 2014 and 2013
Note
J - Common Stock Transactions – Continued
On
April 28, 2011 The Company sold in a private transaction, 6,000 shares of unregistered, restricted common stock for cash which
approximated the fair value and closing quoted price of the Company’s common stock on the transaction date. These shares
were sold pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended, and no underwriter
was used in this transaction.
On
May 2, 2011 The Company sold in a private transaction, 10,000 shares of unregistered, restricted common stock for cash which approximated
the fair value and closing quoted price of the Company’s common stock on the transaction date. These shares were sold pursuant
to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended, and no underwriter was used in
this transaction.
On
June 1, 2011 The Company sold in a private transaction, 100,000 shares of unregistered, restricted common stock for cash which
approximated the fair value and closing quoted price of the Company’s common stock on the transaction date. These shares
were sold pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended, and no underwriter
was used in this transaction.
On
August 8, 2011, The Company sold in a private transaction, 10,500 shares of unregistered, restricted common stock for cash which
approximated the fair value and closing quoted price of the Company’s common stock on the transaction date. These shares
were sold pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended, and no underwriter
was used in this transaction.
On
October 7, 2011, The Company sold in a private transaction, 100,000 shares of unregistered, restricted common stock for cash,
which approximated the fair value and closing quoted price of the Company’s common stock on the transaction date. These
shares were sold pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended, and
no underwriter was used in this transaction.
On
December 13, 2011, The Company sold in a private transaction, 6,698 shares of unregistered, restricted common stock for cash,
which approximated the fair value, and closing quoted price of the Company’s common stock on the transaction date. These
shares were sold pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended, and
no underwriter was used in this transaction.
On
March 29, 2012, The Company sold in a private transaction, 250,000 shares of unregistered, restricted common stock for cash, which
approximated the fair value and closing quoted price of the Company’s common stock on the transaction date. These shares
were sold pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended, and no underwriter
was used in this transaction.
On
June 13, 2012, The Company issued 80,000 shares of unregistered, restricted common stock in return for consulting services
(50,000) and for contractual obligations (30,000), which approximated the fair value and closing quoted price of the Company’s
common stock on the transaction date. These shares were sold pursuant to an exemption from registration under Section 4(2) of
the Securities Act of 1933, as amended, and no underwriter was used in this transaction.
On
April 4, 2012 through June 28, 2012 The Company sold in a private transaction, 1,738,400 shares of unregistered, restricted common
stock for cash, which approximated the fair value and closing quoted price of the Company’s common stock on the transaction
date. These shares were sold pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended,
and no underwriter was used in this transaction.
On
August 7, 2012, The Company sold in a private transaction, 50,000 shares of unregistered, restricted common stock for cash, which
approximated the fair value and closing quoted price of the Company’s common stock on the transaction date. These shares
were sold pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended, and no underwriter
was used in this transaction.
On
September 10, 2012, The Company issued, 50,000 shares of unregistered, restricted common stock for cash, which approximated the
fair value and closing quoted price of the Company’s common stock on the transaction date. These shares were issued in
consideration for marketing services and pursuant to an exemption from registration under Section 4(2) of the Securities Act of
1933, as amended.
On
February 10, 2013, The Company issued, 35,000 shares of unregistered, restricted common stock for cash, which approximated the
fair value and closing quoted price of the Company’s common stock on the transaction date. These shares were issued in
consideration for marketing services and pursuant to an exemption from registration under Section 4(2) of the Securities Act of
1933, as amended.
Signet
International Holdings, Inc. and Subsidiary
(a
development stage enterprise)
Notes
to Consolidated Financial Statements - Continued
June
30, 2014 and 2013
Note
J - Common Stock Transactions – Continued
On
June 25, 2013, The Company issued, 101,600 shares of unregistered, restricted common stock for cash, which approximated the fair
value and closing quoted price of the Company’s common stock on the transaction date. These shares were sold pursuant to
an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended, and no underwriter was used in this
transaction.
On
July 18, 2013, The Company issued, 40,000 shares of unregistered, restricted common stock for cash, which approximated the fair
value and closing quoted price of the Company’s common stock on the transaction date. These shares were sold pursuant to
an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended, and no underwriter was used in this
transaction.
On
September 10, 2013, The Company issued, 44,000 shares of unregistered, restricted common stock for cash, which approximated the
fair value and closing quoted price of the Company’s common stock on the transaction date. These shares were sold pursuant
to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended, and no underwriter was used in
this transaction.
On
September 10, 2013, The Company issued, 33,300 shares of unregistered, restricted common stock for cash, which approximated the
fair value and closing quoted price of the Company’s common stock on the transaction date. These shares were sold pursuant
to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended, and no underwriter was used in
this transaction
On
November 9, 2013, The Company issued, 66,600 shares of unregistered, restricted common stock for cash, which approximated the
fair value and closing quoted price of the Company’s common stock on the transaction date. These shares were sold pursuant
to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended, and no underwriter was used in
this transaction
On
December 5 and 30, 2013 The Company issued, 81,830 shares of unregistered, restricted common stock for cash, which
approximated the fair value and closing quoted price of the Company’s common stock on the transaction date. These shares
were sold pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended, and no underwriter
was used in this transaction.
On
January 14, 2014, The Company issued, 50,000 shares of unregistered, restricted common stock for cash, which approximated the
fair value and closing quoted price of the Company’s common stock on the transaction date. These shares were sold pursuant
to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended, and no underwriter was used in
this transaction.
On
February 14, and March 4, 2014 The Company issued, 519,555 shares of unregistered, restricted common stock for cash, which approximated
the fair value and closing quoted price of the Company’s common stock on the transaction date. These shares were sold pursuant
to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended, and no underwriter was used in
this transaction.
Signet
International Holdings, Inc. and Subsidiary
(a
development stage enterprise)
Notes
to Consolidated Financial Statements - Continued
June
30, 2014 and 2013
Note
K - Commitments
Leased
office space
We
currently operate from leased office facilities at 205 Worth Avenue, Suite 316 Palm Beach, FL 33480 under an operating
lease. This lease agreement expires in March 2014. The lease currently requires monthly payments of
approximately $1,000 and we are not responsible for any additional charges for common area maintenance.
The
Company also operates from a Laboratory and Studio leased facility at 301 Broadway, Suite #203 Riviera Beach, FL 33404. The
lease term requires monthly payments of approximately $700. The Company is not responsible for any additional charges for common
area maintenance. This facility offers a high degree security requiring guard/gate admittance and touch plate entrance
recognition.
We
also reimburse two non-executive personnel for the use of their personal home offices, which are not exclusive to the Company
s business, at approximately $250 per month. These agreements are on a month -to-month basis.
For
the respective years ended December 31, 2013 and 2012, we paid or accrued an aggregate of $33,800 and $36,400 for rent under these
agreements.
Triple
Play Management Agreement
On
October 23, 2003, Signet Entertainment Corporation, the wholly-owned subsidiary of the Company, entered into a Management Agreement
with Triple Play Media Management (Triple Play) of Peoria, Arizona. Triple Play is engaged to be the management company
to manage and operate any acquired Signet facility in the TV and other Media operations market on a permanent basis for Signet
for a period often years (the initial period) with an automatic extension of an additional ten years unless the dissenting party
gives proper notice.
Upon
Signet's successfully raising the necessary required funding through a secondary offering, Signet will begin funding the working
capital requirements of Triple Play for a share of Triple Play's profit. The working capital commitment will be based
on mutually agreed budgets and, at the present time, the company has no requirements for these services.
Big
Vision Management Contract
On
July 22, 2005, Signet Entertainment Corporation, the wholly-owned subsidiary of the Company, entered into a Management Agreement
with Big Vision Studios, a Nevada Limited Liability Company (Big Vision) located in both Las Vegas, Nevada and Burbank, California
whereby Big Vision will be the exclusive supplier of High Definition Equipment and Studio rental for Signet in future periods
after the completion of a successful secondary public offering of the Company’s securities to provide sufficient operating
capital for the establishment of the Company’s network. At the present time, the Company has no requirements
for these services.
Option
Agreement
On
July 23, 2008, we executed an Option to Purchase Asset Agreement (Agreement) with Access Media Group, Inc. (a Florida Corporation)
dba AMG TV, headquartered in Jensen Beach, FL, to acquire 100% of the assets, satellite delivery service contracts, customer service
agreements in the USA and the Caribbean, including the business operations located in Pittsburgh and North New Jersey for an agreed
purchase price is $3 million, payable as set forth in the Agreement, and the issuance of 100,000 shares of our restricted, unregistered
common stock. The term of our option is one (1) year and expires on July 22, 2009. As consideration for
the Agreement, the Company issued 20,000 shares of restricted, unregistered common stock to Access Media Group, Inc. with a mutually
agreed-upon value of $100,000.
The
Company has 180 days to complete the acquisition after serving notice to AMG TV that the Company intends to exercise the option
and is actively pursuing capital resources in order to exercise the option and integrate these operations according to the Company’s
Business Plan.
Signet
International Holdings, Inc. and Subsidiary
(a
development stage enterprise)
Notes
to Consolidated Financial Statements - Continued
June
30, 2014 and 2013
Note
K - Commitments - Continued
On
September 18, 2009, the Company and the owners of Access Media Group, Inc. executed an Asset Purchase Agreement whereby the Company
will acquire “... one hundred percent (100%) of the Pittsburgh, PA leased facility (and/or any other leased facility owned
or leased by Seller), licenses, equipment and ancillaries of the assets listed and identified on Exhibit A which includes a list
of Affiliates and Clearances and all other assets including but not limited to intellectual properties, leases, licenses, permits,
clients lists, contracts, applications pending or otherwise owned by AMG-TV without lien or security interest. The
purchase price is approximately $3,000,000 composed of 100,000 shares of common stock valued at $5.00 per share and a note payable
of $2,500,000. The $2,500,000 note payable bears interest at prime plus 2%, [accruing from September 18, 2009] and
are payable in increments of $100,000 starting on the 180th day after September 18, 2009 and $100,000 every 90 days thereafter. In
the event that the Company is successful in selling any part of a future stock offering, 33.3% of the net proceeds of said offering
will be applied to reduction of this note payable up to $1,500,000 or a maximum of the total balance due at that time.
This
Purchase Agreement was originally scheduled to close and become effective as of January 1, 2010; however, in March 2010, the Company
and Access Media Group, Inc. mutually agreed to defer the closing on this Purchase Agreement until with no other changes to the
terms and conditions.
Licensing
Agreement
On
April 6, 2009, the Company entered into an Exclusive Licensing Agreement (Agreement) with Kerner Broadcasting Corporation, a Nevada
Corporation (KBC) and Signet Entertainment Corporation, the Company’s wholly-owned subsidiary. Pursuant to the
Agreement, KBC grants to the Company, through its subsidiary, the exclusive, nontransferable right and license to use, market,
sell, and otherwise to commercialize KBC’s 3-D television technology.
On
April 9, 2010, one of the principals of KBC confirmed to the Company that at the time it entered into the Agreement with us, KBC
did not own the rights to the above referenced 3D technology and that KBC has since ceased all operations and has been dissolved
as a corporation. We, in consultation with our legal counsel, are considering all available legal remedies that may be available
as a consequence of KBC's conduct relative to this matter. However, the possibility of any recovery from an action we initiate
may be remote.
As
our management believes that this technology will be the next breakthrough in television production and broadcasting, we have
started preliminary confidential negotiations with two other 3D technology developers that we believe have a viable product in
an effort to obtain the required technology for the continued development of 3D TV Network.
Note
L - Subsequent Events
Management
has evaluated all activity of the Company through August 13, 2014 (the issue date of the financial statements) and concluded that
no additional subsequent events have occurred that would require recognition in the financial statements or disclosure in
the notes to financial statements.
Part I - Item 2