Jupiter 10K
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10KSB
[X]
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
For
the
fiscal year ended December 31, 2004
[
]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
For
the
transition period from ________ to _________
Commission
File No. 000-27233
JUPITER
GLOBAL HOLDINGS, CORP.
(Exact
name of Registrant as specified in its charter)
NEVADA
|
98-0204736
|
(State
or other jurisdiction of
|
(I.R.S.
Employer Identification Number)
|
incorporation
or organization)
|
|
62
W. 8th Avenue, 4th Floor
Vancouver,
British Columbia, Canada V5Y 1M7
(Address
of principal executive offices) (Zip Code)
Registrant's
telephone number, including area code: (604)
682-6541
Securities
registered pursuant to Section 12(b) of the Act: NONE
Securities
registered pursuant to Section 12 (g) of the Act:
Common
stock authorized at $.0001 par value.
Check
whether the issuer (l) has filed all reports required to be filed by Section
13
or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been
subject to such filing requirements for the past 90 days. [ ] Yes [X ]
No
Check
if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]
Revenues
for 2004 were $683,613.
The
aggregate market value of the voting stock held by non-affiliates computed
by
reference to the last reported sale price of such stock as of July 31, 2005
is
$647,623. Our common stock is quoted at the present time. At July 31, 2005,
our
stock's closing price was $0.0004 per share. This price, however, is an
inter-dealer price without retail mark-up, mark-down or commission and may
not
represent an actual transaction.
The
number of shares of the issuer's Common Stock outstanding as of July 31, 2005
was 1,619,057,020.
Transitional
Small Business Disclosure Format (check one):
Yes
[ ]
No [ X ]
PART
I
Item
1. Description of Business
CORPORATE
HISTORY
United
Management, Inc. was incorporated on January 29, 1997 under the laws of the
State of Nevada. In December 2000, United entered into an agreement to merge
with RRUN Ventures, Inc. by acquiring all of RRUN's issued and outstanding
shares of capital stock. RRUN Ventures Inc. was founded in Vancouver, British
Columbia in June of 2000 and incorporated in October 2000 under the laws of
Nevada. Final approval of this merger was obtained from the shareholders in
August, 2001. At the same time as the approval of the merger, United adopted
its
new name, RRUN Ventures Network, Inc. Also acquired in the merger was a majority
shareholder position in RAHX, Inc., a Nevada corporation, which was incorporated
in 2000 ("RAHX"). In September, 2001, JUPITER co-founded AXXUS Corporation,
a
Nevada Corporation, which was incorporated in September 2001. In August of
2002,
the Company formed RVNI Management Ltd., a British Columbia Corporation, as
a
wholly owned subsidiary. In November of 2002 the Company divested of its AXXUS
Corporation subsidiary. A discussion of the divestiture of AXXUS Corporation
may
be found in Form 8-K filed with the Commission on December 16, 2002. In June
2003, RRUN Ventures Network, Inc. changed its name to LIVESTAR ENTERTAINMENT
GROUP, INC. as the Company began to purely development entertainment businesses.
In the fiscal year 2004 the Company consolidated its common stock 1000:1 in
September, 2004, and a second time consolidation of 2000:1 in November, 2004.
In
January 2005 the Company changed its name to JUPITER GLOBAL HOLDINGS, CORP.
The
Company changed its name to better reflect is shift from focusing solely on
entertainment by implementing a diversification plan.
GENERAL
OVERVIEW
JUPITER
GLOBAL HOLDINGS, CORP. ("JPHC" or "JUPITER" or "the Company") is
a
holding company with interests and developments in a diverse number of growing
industries such as the VoIP telecom industry, promotional marketing industry
and
entertainment industry.
During
the fiscal year 2003 the Company implemented its plan of focusing mostly on
entertainment businesses. During the fiscal year 2004 the Company continued
the
execution of its business plan of producing live events and developing and
operating entertainment establishments. In the latter part of the final quarter
of 2004 the Company began the implementation of a diversification plan to
transition the company to a holding company structure with holdings in
industries other that entertainment.
In
January 2005 the Company changed its name to JUPITER GLOBAL HOLDINGS, CORP.
to
better reflect is shift from focusing solely on entertainment by implementing
a
diversification plan.
The
following is an overview of the business operations of the Company under its
diversification plan:
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.
|
CURRENT
BUSINESS STRATEGY
Our
business strategy is to build through venture development and acquisition a
holding company with holdings in a diverse range of businesses.
Our
overall implementation plan of this strategy is to build our lines of businesses
through venture development, acquisitions and mergers.
The
Company intends to initially focus investment capital it intends on the
following lines of business and respective holdings:
1.
VOIP
Telecom
2.
Promotional Marketing
3.
Entertainment
Currently
the Company's RAHX business unit is non-operational. RAHX houses several
entertainment technology based concepts and properties that, based on the
decision of management, may be terminated, or divested of. RAHX may also be
used
to house businesses core to, or related to, the Company’s live entertainment
strategy. The Company’s RRUN Labs unit is non-operational and at the appropriate
time may be wound-down.
Other
subsidiaries may be formed to house certain business operations or synergistic
secondary business operations.
As
the
Company progresses on its diversification plan, it may venture develop lifestyle
businesses that synergize with its holdings. These other potential venture
development businesses may include, but not be limited to, music, online
entertainment, merchandising, membership services, and media publishing and
filmed entertainment. Many of these potential venture development businesses
were previously identified as being in the future plans for the Company. The
Company is also reviewing potential acquisitions and venture development in
other diverse industries such financial, technology and real
estate.
REVENUE
GENERATION
As
a
venture development and holding company JUPITER hopes to generate income through
the following methods:
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.
|
OUR
BUSINESSES
VOXBOX
OVERVIEW
Voice
Over Internet Protocol (VOIP) is a technology that allows people to make
telephone calls using a broadband Internet connection instead of a regular
(or
analog) phone line. Through VOIP, consumers are able to make local and
long-distance calls for a flat rate that is lower than their existing analog
rate and with the same quality.
VOXBOX
MARKET ANALYSIS
There
were an estimated 1 - 2 million VoIP users in North America at the end of 2004.
Industry projections are that VoIP will carry 75% of the industry’s traffic by
2007.
During
the 1990s, regulatory bodies the world over deregulated national telecom
industries. As a result, nascent players jumped into the fixed-line and mobile
telco markets. However, the new players faced significant barriers to
entry:
· |
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.
|
After
15
years of heavy competition over the telecom landscape worldwide telecom prices
have decreased significantly, but to a large degree the original incumbents
control most of the market. There has been significant encroachment on related
telco turf, as cable operators have made a significant dent in providing
high-speed (broadband) Internet service.
VOXBOX
COMPETITORS AND COMPETITIVE BUSINESS CONDITIONS
There
are
several different kinds of VOIP providers within the industry
including:
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.
|
VoxBox
will compete against the providers outlined by being a locally focused service.
In doing so, VoxBox will be able to adapt to the needs of that market and
provide a customized solution.
PROMO
STAFFING OVERVIEW
Promostaffing
is a promotional marketing business based in Miami, Florida with clients that
span across the United States. The Company specializes in helping brands reach
the 18-34 year old market by using staffers to execute a number of consumer
promotions in a live environment. Promostaffing offers a range of integrated
services that allow its clients to deliver a desired consumer experience.
Promostaffing
utilizes a number of divisions that complement one another:
Helps
guide and implements critical campaigns, media awareness, logistics, and full
creative packages.
Based
on
Promostaffing’s unique proprietary software solution, PromoClicks provides
innovative ways to take a client’s event to the next level with on-site
photography that drives consumers to their website to pick up their branded
photographs.
Bridges
the gap between brands and events by identifying the right sponsorship
opportunity for a brand to participate in.
Develops
customized and innovative programs designed to help brands connect with the
urban lifestyle; specializing in fashion, entertainment, music, and
food.
PROMO
STAFFING MARKET ANALYSIS
Traditional
marketing methods years ago comprised of print, radio and television buying
that
targeted a mass audience. As western consumers became wealthier, consumer
markets became highly fragmented and it became increasingly difficult to reach
key demographics (particularly 15-45 year olds). The scramble to reach finicky
consumers in part resulted in the development of the promotional marketing
industry; some aspects of which have been applied for many years and can now
be
considered as being under the banner of mainstream marketing.
Promotional
marketing is becoming one of the fastest growing sectors of the marketing &
advertising industry and those companies that can provide these services can
capture a highly profitable portion of the $140 Billion advertising market.
According to Promo Magazine, the Top Ten Ranked Agencies alone account for
2003
revenues of $710 Million.
It
is
estimated to be worth in the range of 20% of GDP in advanced economies and
is
growing at slightly less than nominal GDP (about 3%-5% pre year).
Figures
for the size of the promotional marketing industry are difficult to come by,
as
many of these activities defy categorization, but it is safe to assume that
the
promotional marketing industry is worth several tens of billions of dollars
worldwide, with an epicenter in the United States where many of the techniques
have been and are continuing to be pioneered. The promotional marketing industry
is estimated to be growing at 2x-3x the stagnant growth rate of the overall
marketing industry.
Promotional
marketing services are comprised of:
· |
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.
|
PROMO
STAFFING COMPETITORS AND COMPETITIVE BUSINESS CONDITIONS
Promostaffing
faces competition from the following major rivals:
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
|
The
following factors, contribute to Promostaffing’s ability to grow and move ahead
of its competition:
· |
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.
|
LIVESTAR
LIVE ENTERTAINMENT EVENTS OVERVIEW
There
are
many companies that provide or organize live events.
However
there are no major companies that focus on events produced for nightclubs,
or
events strictly aimed at the 18-34 year old market.
JUPITER's
Live Events unit plans to service its target market with dynamic live
entertainment ranging from concerts, festivals and special events such as
fashion shows and contests.
The
Live
Events unit will be a stand alone business although synergistic with other
Company units. Therefore the Live Events unit will produce events outside of
the
potential network of establishments in other venues and possibly in
establishments owned by competitors. We plan to be a promoter of live events
in
USA, Canada and eventually internationally as our business grows. The live
concert events that we plan to promote and distribute will reflect a diverse
array of music genres, including pop, rock, hard rock, latin, hip hop, rap,
blues, R&B, jazz, soul, funk, and may appeal to an equally diverse
demographic base although focused on 18-34 year olds.
The
Live
Events unit aims to become the leader in promoting and marketing special events
and concerts targeted at 18-34 year olds by:
-
Focusing on producing only entertainment focused special events and
concerts.
-
Being
very DJ and urban music driven.
-
Producing hi-concept one of a kind events and tours, whether one time only
or
recurring periodically.
-
Opening
regional operations in specific geographic markets.
-
Having
the exclusive rights to producing events at all potential JUPITER entertainment
establishments.
-
Obtaining touring rights from touring shows. Touring shows consist primarily
of
revivals of previous commercial successes or new productions of theatrical
shows.
-
Executing partnerships, mostly exclusive in nature, with local independent
event
promoters to produce and promote special events and concerts. Gaining
competitive advantage by using these independent promoters to lower costs,
reduce risks, and learn specific market intelligence of that area.
We
plan
to execute on this believed competitive advantage through the
following:
-
JUPITER
plans to take advantage of the above opportunity by producing events and
concerts primarily for its potential establishments.
-
JUPITER
management has extensive knowledge of the networks of the independent special
events promoters and intends to use this special knowledge to acquire them
or
form partnerships with them, and to promote both independent special events
and
also events targeted to its potential establishment operations.
As
a
producer of live events JUPITER plans to generate revenues through profit
sharing agreements with promoters, a percentage of the promoters' ticket sales,
merchandising, sponsorships, licensing and the exploitation of intellectual
property and other rights related to the production. JUPITER plans to produce
certain tours on both a national and regional basis.
A
key
future growth driver for the Company's Live Event unit is the possible
presentation of live performances at our potential establishments by digitally
capturing a wide array of audio and visual live entertainment content and
distributing it through a variety of media, including the internet, and other
forms of digital media, television and radio. This opportunity is especially
apparent for touring shows that can attract a media viewing
audience.
The
Company anticipates that attendees of LIVESTAR's live events will remain
connected and informed of upcoming events through various technology based
products. The management anticipates that additional offline and online product
and service offerings for its customers will be evaluated, developed according
to feasibility and return on investment.
Sponsorships
and Advertising
JUPITER
plans to actively pursue the sale of corporate sponsorships for "official"
event
or tour sponsors to corporate types such as, beverage companies, credit card
companies, phone companies, film manufacturers and radio stations, among others.
Sponsorship arrangements can provide significant additional revenues at
negligible incremental cost.
LIVE
ENTERTAINMENT MARKET ANALYSIS
Live
Events and Concerts (specifically live music entertainment)
According
to Pollstar, the industry leader for the concerts industry, the U.S. industry
is
now a $2 billion dollar industry. The industry is dominated by Clear Channel
Entertainment and House of Blues Entertainment.
The
live
music entertainment business is a large and growing industry. Artists have
traditionally embraced live performances as a critical promotional tool for
their recordings, as a platform to maintain direct interaction with fans and
as
a way to achieve a sense of authenticity and spontaneity in their
work.
Similarly,
consumers have typically sought out live performances to experience a personal
connection with their favorite artists and fellow music enthusiasts and a unique
presentation of their favorite songs.
Participants
in the Live Music Entertainment Industry
The
process of bringing a live concert to an audience requires the involvement
of
four key parties:
-
artists;
-
booking
agents and other artists' representatives;
-
promoters; and
-
venue
owners and operators.
An
artist's representative, such as a booking agent, works with an artist to
arrange a venue and date, or series of venues and dates, for performances and
typically enters into contracts with promoters operating in the various regions
of the planned tour. A promoter is responsible for securing individual venues
for the event on given dates, marketing the event, selling tickets and arranging
for local production services, such as stage, set, sound and lighting. The
promoter may also provide limited production services. The promoter offers
the
artist a guaranteed dollar amount per show based on the expected attendance
and
the ticket price that is negotiated with the artist. The promoter and artist's
representative also negotiate how the revenue in excess of the promoter's
operating expenses and the artist's guaranteed amount will be
split.
A
venue
operator provides the venue or establishment, which will host the event, and
is
responsible for supplying, either through internal means or by subcontracting,
all of the necessary supplementary services required for the event. The venue
operator is paid a fee for the use of the venue and receives a rental payment
based on a percentage of ticket revenues. The operator also generates revenues
from the services it supplies, including concessions sales, merchandise sales,
parking and other ancillary services, as well as sponsorships. Additionally,
the
operator generates ancillary revenues from other high margin services such
as
VIP parking, corporate box seating, and related amenities, which generally
command premium pricing. Industry participants, like House of Blues, often
perform more than one of the booking, promotion and venue operation
functions.
Venues
typically fall into one of the following categories:
-
stadiums, generally accommodating more than 32,000 patrons;
-
arenas,
generally accommodating 15,000 to 25,000 patrons;
-
amphitheatres, open air performance spaces generally accommodating 4,000 to
32,000 patrons;
-
theatres, enclosed venues generally accommodating up to 6,000 patrons in fixed
seating; and
-
concert
clubs, generally accommodating 2,000 or fewer patrons in more casual settings
than theatres.
LIVESTAR
ENTERTAINMENT COMPETITORS AND COMPETITIVE BUSINESS CONDITIONS
Competitors
Overview
In
its
live events business JUPITER faces two major competitors. These
are:
3. Clear Channel Entertainment
The
House
of Blues operates in the US and operates only in large live venues. It has
a
live events arm and a media arm. However it is oriented towards a mass market
and not specifically to 18-34 year olds.
Likewise
Clear Channel Entertainment primarily operates in the US but is again oriented
towards a mass market. It is the largest live entertainment company in the
world
and is not focused on developing niches such as hip-hop or
nightclubs.
Live
Events Competitive Conditions
We
expect
to compete for music consumers, for relationships with artists, their
representatives and record companies, as well as for advertisers and sponsors
in
markets where we plan to potentially own or operate an establishment and in
markets where JUPITER does not now or plan to potentially own or operate
establishment.
In
markets where we plan to potentially own or operate an establishment, JUPITER
will compete with other venues or establishments to serve artists likely to
perform in that general region.
In
markets where JUPITER does not potentially own or operate an establishment,
JUPITER will compete with other venues for dates for popular national tours.
Consequently, touring artists have significant alternatives to potential JUPITER
establishments in scheduling tours. In addition, in the markets in which JUPITER
will promote live events and musical concerts, it will face competition from
event producers, promoters, as well as from certain artists that promote their
own concerts. JUPITER believes that barriers to entry into the live events
and
promotion services business are low and that certain local promoters are
increasingly expanding the geographic scope of their operations.
In
addition to the competitive factors outlined above for each of the Company's
business units, the success of the Company's entertainment operations are
dependent upon numerous factors beyond the Company's control, including economic
conditions, amounts of available leisure time, transportation costs, lifestyle
trends and weather conditions.
JUPITER
INTELLECTUAL PROPERTY
Trademarks
We
believe that our success may depend to a significant extent on the strength
of
our trademarks, servicemarks, trade dress, copyrights and other proprietary
rights that we plan to file for registration. The Company plans to file
Intent-To-Use Trademark Applications for certain brands we are developing for
our business units, for the various classes of goods and services in which
the
Company's marks will be utilized. In addition, the Company may file
Intent-To-Use Trademark Applications for other proprietary programs developed
by
the Company. There can be no assurance, however, that these trademarks will
proceed to registration, and if so registered, that the trademarks, in any
one
or more classes, will not violate the proprietary rights of others, that any
registration of the trademarks or the Company's use thereof will be upheld
if
challenged, or that the Company will not be prevented from using the
trademarks.
Patents
The
Company is developing propriety, processes, products and services it may attempt
to protect with patents.
JUPITER
POTENTIAL LIABILITY
In
addition to the Risk Factors described in the Exhibit to this filing, the
operation of JUPITER’s businesses may result in liabilities or levels of
unacceptance that may affect its profitability. Specifically, one or more of
the
factors listed below may result in liability or levels of unacceptance that
may
harm its present or future operations:
Governmental
Licenses and Approvals
The
Company is subject to various rules, regulations and laws affecting its various
businesses. Each of the Company's businesses may be subject to licensing and
regulations by a number of governmental authorities, including state, province
or municipality in which the businesses conduct operations. Difficulties in
obtaining or failure to obtain the required licenses or approvals could prevent
or delay the development of our businesses in a current or new
location.
Various
Canadian federal and provincial labour laws govern the Company's relationship
with its employees, including such matters as minimum wage requirements,
overtime and other working conditions. Significant additional government-imposed
increases in minimum wage, paid leaves of absences and mandated health benefits,
or increased tax reporting and tax payment requirements for employees who
receive gratuities, may impose significant burdens on the Company. The Company's
businesses in the United States are subject to similar
requirements.
Regulation
and Licenses
The
Company’s businesses may be subject to federal, state and local laws affecting
its business, including various health, sanitation and safety standards. The
Company's entertainment operations are subject to state and local government
regulation, including regulations relating to live music performances. Each
live
concert performance must comply with regulations adopted by federal agencies
and
with licensing and other regulations enforced by state and local health,
sanitation, safety, fire and other departments. Difficulties or failures in
obtaining the required licenses or approvals can delay and sometimes prevent
the
promotion of live events and concerts. The failure to receive or retain, or
delay in obtaining, a license to serve alcohol and beer in a particular location
could adversely affect the Company's operations in that location and impair
the
Company's ability to obtain licenses elsewhere. The failure or inability of
the
Company to obtain and maintain insurance coverage could materially and adversely
affect the Company.
EMPLOYEES
At
December 31, 2004, JUPITER had two Executive Officers and two Directors, and
employed a total of 15 people including officers and employees. JUPITER and
its
subsidiaries intend to hire additional employees in the foreseeable
future.
RESEARCH
AND DEVELOPMENT EXPENDITURES
JUPITER
is not expected to incur research and development expenditures over the twelve
months following December 31, 2004.
UPDATE
OF
BUSINESS DEVELOPMENTS FOR FISCAL YEAR AND SUBSEQUENT
In
March
2004, the Company executed a Letter Intent with Manhattan Restaurant located
in
La Jolla California whereas the Company is planning to purchase control of
the
liquor license only and redevelop the business instead of a purchase of the
business. The Company has subsequently ceased negotiations with Manhattan
Restaurant and ceased pursuit of the Manhattan Restaurant business venture.
In
June
2004, the Company changed the business direction of one of its subsidiaries,
LIVESTAR Entertainment Capital Corporation to use the corporation for its events
business. Subsequently, the name of LIVESTAR Entertainment Capital Corporation
was changed to LIVESTAR Entertainment Events International Inc. The name change
occurred prior to the Company implementing any of its plans for the capital
corporation.
In
November 2004, the Company executed a Letter Intent with Las Vegas Shoe Company
located in La Vegas, Nevada to purchase 51% of the Las Vegas Shoe Company.
The
Company has subsequently ceased negotiations with Las Vegas Shoe Company and
has
ceased pursuit of the Las Vegas Shoe Company acquisition.
In
December 2004, the Company executed a joint venture agreement with Global
Bancorp, Inc. to develop a Voice Over Internet Protocol (VOIP) business called
VOXBOX. The joint venture agreement resulted in the formation of VOXBOX Telecom,
Inc. The joint venture agreement also resulted in the Company acquiring a 50%
equity position of VOXBOX Telecom, Inc. as per the terms of the joint venture
agreement.
In
December 2004, the Company was forced to cease operations of its wholly owned
subsidiary 1614718 Ontario, Inc. (Sequel Nightclub) due to disputes with the
landlord of the premises (i.e. regarding arrears, future renovations, and new
lease negotiations) that had been ongoing for several months. In the opinion
of
the Company and the attorneys of the Company the landlord illegally seized
the
premises and locked out our business from operating. In addition, to the lock
out, the landlord seized the assets and of the business that were in the
premises. This illegal act by the landlord had consequences to 1614718 Ontario,
Inc. including but not limited to, the loss of operations and its ability to
generate revenue, the loss of a loyal customer base, the loss of interest from
investors for future projects and a default of the business lease. The Company
had initially retained a litigation attorney to prepare to a lawsuit against
the
landlord of the premises and to date still has the litigation attorney available
for such action. The Company is still strongly considering the pursuit of action
against the landlord of the premises but the cost of litigation, especially
the
ability for the Company to pay for a protracted litigation effort, has slowed
the Company’s pursuit of legal action. In addition to cost having an impact on
the Company’s desire to pursue litigation, the Company’s decision in late 2004
to begin to make changes, it has subsequently implemented, to reconfigure its
business strategy from solely entertainment to one of a diversified holding
company strategy, also had a impact on not pursuing litigation immediately.
The
implementation of Company’s diversification was of paramount importance to get
started quickly and productively. All actions regarding 1614718 Ontario, Inc.
were implemented with the notion to not affect the future success of the
Company’s new diversification business plan. For example, to avoid costly
litigation due to the default of the business lease the Company entered a
settlement agreement that would minimize the cost it felt it would have faced
if
it unsuccessfully defended litigation regarding the business lease.
In
December 2004, the Company put all
establishment projects and operations on hold until further notice. The Elm
Street Bar and Restaurant development project in Toronto, Canada was included
in
this and subsequently the Company ceased all development of the Elm Street
Project due to lack of capital and delays caused by regulatory issues pertaining
to the attainment of development permits from the City of Toronto.
Subsequent
to December 31, 2004, the Company’s wholly owned subsidiary 1614718 Ontario Inc.
entered into a Settlement Agreement with 1485684 Ontario Limited in settlement
of the business lease agreement (for the Sequel Nightclub) between the parties
executed May 25, 2004. The Settlement Agreement was entered into by the Company
to avoid litigation due to the discontinuation of operations. The Settlement
agreement provides to 1614718 Ontario inc. to pay 1485684 Ontario Limited the
sum of $414,000 CDN.
Subsequent
to December 31, 2004, in January 2005, the Company entered into an Agreement
and
Plan of Acquisition to acquire 60% of the issued and outstanding shares of
Promo
Staffing.com LLC. (“Promo Staffing”) of Miami, Florida.
Subsequent
to December 31, 2004, and as our prior filings have discussed, In April 2005,
the Company, entered into an Amended and Restated Plan of Acquisition Agreement
for the acquisition of 60% of Promostatting.com LLC located in Miami, Florida
(‘Promo Staffing”). Per the agreement, the Company is responsible for providing
audited financial statements of Promo Staffing within 75 days of
closing.
We
expect
the filing of audited financial statements on Promo Staffing so that the
transaction can be finalized under the rules of the Securities and Exchange
Commission.
Subsequent
to December 31, 2004, the Company entered into a share purchase agreement with
Global Bancorp Inc. as per the terms of the Definitive Joint Venture Agreement
between the Company and Global Bancorp Inc. dated December 28, 2004. Under
the
terms of the share purchase agreement the Company acquired 800 shares in the
capital stock of VOXBOX Telecom Inc. from Global Bancorp Inc. Consideration
for
the purchase of the shares is $40,000 USD previously advanced to Global Bancorp
Inc. In
addition, in satisfaction of the terms of the Definitive Joint Venture Agreement
between the Company and Global Bancorp dated December 28, 2004 the Company
issued a Promissory Note, in February 2005, to VOXBOX Telecom, Inc. in the
face
value of $420,000 for the issuance of 8400 shares of VOXBOX Telecom,
Inc.
Subsequent
to December 31, 2004, the Company entered into a Stock Purchase Agreement dated
June 16, 2005 between the Company and Global Bancorp, Inc., the Company sold
to
Global Bancorp, Inc. its entire holding of 9200 shares of VOXBOX Telecom, Inc.
and a Promissory Note of a face value of $420,000 owing to VOXBOX Telecom Inc.
for 5,000,000 common shares of Global Bancorp, Inc. which were valued at
$50,000, and rights to purchase up to 50% of the issued and outstanding common
shares of Global Bancorp, Inc. up to June 16, 2008.
Subsequent
to December 31, 2004, the Company entered into a financing agreement whereby
a
lender may provide financing subject to potential milestones imposed on the
Company by the lender being met. The Company received $100,000 in February
2005
and issued a convertible promissory note to the lender. The note is convertible
at the option of the holder into common shares of the Company at the conversion
price of $0.016 per share. The note is payable on February 16, 2006 and bears
interest at 8% per annum.
Subsequent
to December 31, 2004, on February 22, 2005, the Company signed a letter of
intent in respect of an offer to purchase up to 80% of the equity in a private
Georgia based company for $1,360,000, subject to due diligence procedures being
carried out and execution of a final agreement. The Letter of Intent was not
consummated until the payment of a $30,000 deposit which took place in June
2005.
Subsequent
to December 31, 2004, the Company deregistered a total of 4,900,000,000 shares
from it’s previously registration under Form S-8. These options and shares were
to be issued pursuant to the EMPLOYEE STOCK INCENTIVE PLAN FOR THE YEAR 2004
NO.
6 and the NON-EMPLOYEE DIRECTORS AND CONSULTANTS RETAINER STOCK PLAN FOR THE
YEAR 2004 NO.3.
Item
2. Description of Property
We
have
no real estate property holdings and at this time we have no agreements to
acquire any properties. The Company currently has its headquarters at premises
at 62 W. 8th Avenue, 4th Floor, Vancouver, British Columbia, Canada V5Y 1M7.
The
Company is currently occupying the same premises on a sublease basis with terms
of CDN $5,300 per month for 12 months until June 2005, thereafter on a
month-to-month basis. The sublease is with 673422 B.C. Ltd. a company controlled
by Edwin Kwong, the Company’s CFO. The Company has closed its business
development office in La Jolla California. The Company maintains a business
development office in Las Vegas, Nevada with terms of USD $200 per month for
12
month term until December 2005.
Item
3. Legal Proceedings
Other
than the proceedings described herein, JUPITER is not a party to any material
legal proceedings and to JUPITER's knowledge, no such proceedings are threatened
or contemplated. At this time we have no bankruptcy, receivership or similar
proceedings pending.
In
October 2004, Traci Niederriter filed a lawsuit in the Lynchburg General
District Court for the Commonwealth of Virginia. The action concerned an alleged
claim for unpaid wages of an employee of RRUN Labs, Inc., a subsidiary of
JUPITER Global Holdings, Corp. The amount of the lawsuit is $5,838.46, not
including interest accruing from October 30, 2001 plus court costs and attorney
fees of $1,656.55.
In
addition, the Company believes that there are approximately two-dozen other
former employees of RRUN Labs, Inc. who are owed wages by RRUN Labs, Inc. The
total amount of unpaid wages claims, not yet subject to any lawsuit against
the
Company, is approximately $160,000. All amounts have been included in the
Financial Statements as of December 31, 2004
In
March
2005, Nautilus Design Group, Inc. filed a lawsuit in the Toronto Small Claims
Court in the city of Toronto, Ontario. The action concerned an alleged claim
for
unpaid invoices.The suit names the Company and two subsidiaries of the Company
(Livestar Entertainment Canada, Inc. and 1615496 Ontario Ltd. ) as defendants.
The amount of the lawsuit is $5227.31 CDN, not including court imposed interest,
costs and disbursements pursuant to Small Claims Court Rules.
In
March
2005, FU Associates Ltd. filed a lawsuit in the Toronto Small Claims Court
in
the city of Toronto, Ontario. The action concerned an alleged claim for unpaid
invoices. The suit names the Company and two subsidiaries of the Company
(Livestar Entertainment Canada, Inc. and 1615496 Ontario Ltd. ) as defendants.
The amount of the lawsuit is $8175.25 CDN, not including court imposed interest,
costs and disbursements pursuant to Small Claims Court Rules.
The
Company believes that, as it grows revenue-producing operations and as it raises
capital, we will have the resources to settle the abovementioned case and we
have every intention of doing so if the lawsuits merit settlement. We are
working to reduce or prevent collection litigation by creditors or others.
Settlements in stock may result in unforeseen dilution to current
shareholders.
Item
4. Submission of Matters to a Vote of Security Holders
In
October 2004, our majority shareholder voted their holding of approximately
58%
(3,002,592,324) of the voting power of the outstanding shares of the Company’s
Common and Preferred Stock (par value $0.0001) to approve the following:
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.
|
Part
II
Item
5. Market for Registrant's Common Equity and Related Stockholders
Matters
TRADING
SYMBOL CHANGE
Prior
to
September 2001, there was no trading market for our common stock. The Company
received approval for listing and in September, 2001, the Company obtained
a
trading symbol of "RRUN" and began trading on the NASD Over-the-Counter
Bulletin
Board.
In
July, 2003 the Company changed its trading symbol from “RRUN” to “LSTA” to
reflect the name change of the Company from RRUN Ventures Network Inc. to
LIVESTAR Entertainment Group, Inc. In September, 2004 the Company changed its
trading symbol from “LSTA” to “LSTE” due to a 1000:1 share consolidation of the
Company’s shares. In November, 2004 the Company changed its trading symbol from
“LSTE” to “LVSG” due to 2000:1 share consolidation of the Company’s shares. In
January, 2005 the Company changed its trading symbol from “LVSG” to “JPHC” to
reflect the name change of the Company from RRUN Ventures Network Inc. to
LIVESTAR Entertainment Group, Inc. to JUPITER Global Holdings, Corp. Although
we
have a listing on the Bulletin Board, it is impossible to know or predict from
day to day how active that market will be. There presently is a trading market
for our stock, however, we cannot guarantee that a trading market will continue.
As at December 31, 2004 there were 149 record holders of the Company's common
stock.
MARKET
PRICE
Our
common stock is quoted at the present time. At July 31, 2005, our stock's
closing price was $0.0004 per share. This price, however, is an inter-dealer
price without retail mark-up, mark-down or commission and may not represent
an
actual transaction. The Securities and Exchange Commission has adopted a Rule
that defines a "penny stock," for purposes relevant to us, as any equity
security that has a market price of less than $5.00 per share or with an
exercise price of less than $5.00 per share, subject to certain exceptions.
Our
common stock is presently considered a "penny stock" and is subject to such
market rules.
|
|
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.
|
*The
prices are all "closing" prices and appear as approximate figures.
The
source of these high and low prices was the OTC Bulletin Board as reported
on
<www.nasdaq.com>. These quotations reflect inter-dealer prices, without
retail mark-up, mark-down or commissions and may not represent actual
transactions.
The
market price of our common stock is subject to significant fluctuations in
response to variations in our quarterly operating results, our public
announcements regarding our then business activities, general trends in the
market for the products and services we have been developing, and other factors,
over many of which we have little or no control. In addition, board market
fluctuations, as well as general economic, business and political conditions,
may adversely affect the market for our common stock, regardless of our actual
or projected performance.
DIVIDENDS
We
have
not paid any dividends to date, and have no plans to do so in the immediate
future.
TRANSFER
AGENT
We
have
retained the services of Jersey Transfer and Trust as our transfer agent at
this
time.
SECURITIES
AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS.
Equity
Compensation Plan Information
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
|
Item
6. Management's Discussion and Analysis or Plan of
Operation
The
following discussion should be read along with the financial statements and
notes, and by other more detailed financial information appearing in other
parts
of this annual report.
RESULTS
OF OPERATIONS
For
the
Year Ended December 31, 2004 compared to Year Ended December 31,
2003.
For
the
fiscal year ended December 31, 2004, and December 31, 2003, the Company earned
revenues of $683,613 and $500, respectively. Revenues in 2004 were a result
of
the Company’s Entertainment operations, namely Nightclubs and Live Events. The
Company started its current Nightclub operations in 2004 in Toronto, and due
to
unseen circumstances also ceased its operations. The Company plans to continue
business development activities in Nightclubs and hopes to find suitable
locations to purchase or develop. The other operation in its Entertainment
business is Live Events, which included Cyberfest in October 2004, and Planet
New Year in December 2004. .
Revenues
in 2003 were related to one Live Event. Future revenues for the Company are
associated with the realization of its new business strategy, the further
development and operation of its live entertainment business, and the
development of other diverse businesses as outlined below.
For
the
fiscal year ended December 31, 2004, and December 31, 2003, the Company incurred
operational expenses of $3,986,993 and $957,011, respectively, of which $168,254
and $251,159 were accrued, respectively. These operating expenses included:
$900,270 and $200,539, respectively, in consulting fees; $444,597 and $348,113,
respectively in business development costs; $304,111 and $104,174, respectively
in Professional Fees; and $1,767,306 and $85,505, respectively, in Wages and
Benefits. Of the Wages and Benefits expense in 2004, $1,587,783 was recorded
as
Stock Compensation Expense. The overall increase in the Company's operating
expenses and changes across all above categories is due to expanded business
efforts to develop and realize its business plan. For the fiscal year ended
December 31, 2004, and December 31, 2003, the Company incurred a net loss from
operations of $4,668,266 and $909,856, respectively.
LIQUIDITY
AND FINANCIAL CONDITION AS OF DECEMBER 31, 2004
We
had
cash-on hand of totaling $8,240 as of December 31, 2004. Although the Company
maintains minimal cash reserves and continues to experience uncertainty
regarding future revenues, management strives to maintain and grow its current
operations, remain viable and develop sustainable revenue streams and positive
cash flow. Our sources of liquidity includes sales of our common stock, and
loans from management, shareholders and other close affiliates to the Company,
and intended cash revenues from operations as developed as per the business
strategy described below.
Management’s
current and business strategy is oriented to maximize our chances of success.
Additional financial and liquidity issues relating to the current business
strategy are outlined in the JUPITER GLOBAL HOLDINGS, CORP. Implementation
Plan
section below.
BUSINESS
STRATEGY FOR JUPITER’S BUSINESSES
Our
business strategy is to focus our immediate efforts on closing our acquisitions
and developing the business of our holdings. The development of these businesses
will require a staff of approximately 10-15 persons consisting of marketing,
business operations, accounting, administration, corporate finance, venture
development and merger and acquisition professionals.
JUPITER
intends to develop a comprehensive program for its business to conduct its
research and development. JUPITER expects that it must devote a minimum of
approximately 5% of it revenues towards research and development.
Over
the
twelve months following December 31, 2004, JUPITER’s business may conduct
significant research and development, or R & D for their development of
products and services.
The
R
& D anticipated to be executed by JUPITER for its business will not be
limited to:
JUPITER
plans to coordinate operations out of its Vancouver, British Columbia, Canada
facility. JUPITER currently has business and operational development offices
in
Las Vegas, Nevada. At the required time the Company plans to open other business
development, finance or operational offices in other Canadian and U.S.
cities.
JUPITER
IMPLEMENTATION PLAN
JUPITER
requires approximately $4,500,000 in operational capital for the 12 month period
following December 31, 2004. The JUPITER implementation is planned over a period
of four phases totaling 12 months. Each phase is three months. The
implementation plan during each phase describes the activity of JUPITER across
various departments such as Operations, Finance, Mergers and Acquisitions,
Venture Development/Product Development, and Sales/Marketing/Business
Development.
Our
immediate aim is to finalize the acquisition of Promo Staffing, continue the
development of our Live Events business and our VOXBOX joint venture.
JUPITER's
2005 implementation plan regarding its business units is as
follows:
-
Phase
One (Jan - March 2005): Planning for Live Events schedule for 2005. Begin review
of establishment business feasibility. Begin development of VOXBOX business.
Seek acquisitions as per diversification plan; secure first acquisition of
diversification plan; continue debt reduction plan via voluntary creditor write
offs and stock based settlements; headhunt and secure key consultants and
possible staff members to execute development of new business units; commence
additional staff hiring.
-
Phase
Two (April - June 2005): Continue planning of Live Events schedule for 2005;
Continuing development of corporate finance department; Secure agreement for
first stage of capital; Close acquisitions (Promo Staffing) secured from Phase
One of implementation plan; continue development of VOXBOX business; Continue
seeking acquisitions as per diversification plan; finalize operations and
marketing plans of holdings; continue debt reduction plan via voluntary creditor
write offs and stock based settlements;
-
Phase
Three (July - September 2005): Fully launch corporate finance department,;
Secure next stage of capital; Launch summer and fall schedule of events;.
Continue development of VOXBOX and Promo Staffing businesses; Continue seeking
acquisitions as per diversification plan; secure next acquisition of
diversification plan; continue implementation of operations and marketing plans
of business units; continue debt reduction plan via voluntary creditor
write offs and stock based settlements; continue additional staff hiring if
necessary; open business development office in Miami, Florida to support Promo
Staffing.
-
Phase
Four (October - December 2005): Launch winter schedule of events; Continue
development of VOXBOX and Promo Staffing businesses; Secure next stage of
capital; Continue seeking acquisitions as per diversification plan; secure
next
acquisition of diversification plan; continue implementation of operations
and
marketing plans of business units; continue additional staff hiring
if
necessary; open business development office in New York, NY.
FINANCING
STRATEGIES
In
order
to finance our acquisitions and developments, and our phases of implementation
we plan to raise investment capital through the execution of the following
finance strategy:
In
order
to finance its acquisitions and/or venture developments the Company may use
its
preferred or common stock to finance the acquisition or venture development
or
to raise the necessary capital for acquisition or venture development.
We
also
may fund our acquisitions or venture developments through the selling of a
minority interest in the new acquisitions or venture developments through the
sale of up to 49% of the equity or through limited partnerships under a direct
investments strategy. This minority interest is hoped to be sold to either
individual investors who wish to invest directly into one of our businesses.
The
Company hopes to establish an internal corporate finance department and external
network or syndicate of investment advisors, investment bankers and broker
dealers that will raise capital via the direct investments strategy. It is
planned that investors under this strategy are planned to receive cash dividends
and possibly some capital stock or warrants in the Company.
We
believe that this direct investments strategy may enable us to achieve our
goals
with a hope over the long-term of reducing the potential dilution to our
existing shareholders. By raising capital directly in each business we may
not
have to dilute the existing shareholders of JUPITER to any great extent to
grow
the business. As our cash producing businesses grow due to the planned
implementation and hopeful success of this direct investments strategy we plan
to utilize the available cash to pay for operations
without having to use stock to pay for large and important operational items
item such as staff and consultants.
The
result of this is, that as our cash flow may grow as our dilution may slow.
More
specifically, we have developed comprehensive business and financial plans
that
result in our development of our businesses that should operate on a cash
positive basis and without incurring substantial dilution to stockholders such
that the Company can possibly increase its overall valuation substantially.
This
possible increase in the Company’s overall valuation may be accomplished by
using the positive cash flow to buy back the Company’s common stock from the
public float. There is no current plans to implement a stock buy back program,
although one is intended over the long-term and will only be implemented based
on the success of the foregoing and solely of the discretion of the Company’s
management and board of directors.
In
addition to the above we plan we plan to invite direct investments into the
Company to provide funds for general corporate purposes.
CAPITAL
REQUIREMENTS
We
believe that the Promo Staffing acquisition will require approximately a minimum
of $600,000 for the acquisition, plus approximately $100,000 in legal,
accounting and administrative expenses. In addition, our the VOXBOX venture
development will require a minimum of another $500,000 plus approximately
$100,000 in legal, accounting and administrative expenses.. This is a minimum
total of approximately $1,300,000 that will be required in the first two
quarters during. In the following 6 months, we plan to execute one or two
additional acquisitions or venture developments. We believe that the cost of
a
second and third acquisition or development project will be approximately a
minimum of $1,000,000 each and that approximately another $100,000 minimum
each
will be required for the same purposes as listed above for the first acquisition
or development and for working capital and general corporate purposes. The
Company believes it will require approximately $1,000,000 to continue productive
development of its live events business unit, including the cost of live event
acquisitions or development and their subsequent integration throughout the
year
of 2005. Thus, we anticipate needing a minimum of $4,500,000 of investment
capital during the fiscal year.
CAPITAL
ACQUIRING PLANS
Management
plans on initiating a series of securities offerings to raise the investment
capital needed to meet our acquisition and development plans. Although we will
make efforts to minimize dilution to current shareholders, we may not be able
to
avoid significant dilution due to many factors, including but not limited to,
the closing of financing at lower than the desired market price of the Company's
common stock.
JUPITER
hopes to secure the financing to satisfy the capital needs for each phase of
its
implementation plan through the execution of various funding methods, primarily
financing through its direct investment strategy, private placement investments
or debt financing. JUPITER hopes to achieve this by securing relationships
with
accredited individual investors, investment bankers, venture capitalists, and/or
finance investment advisors that have the experience and relationships to aid
JUPITER with its capital raising efforts. The source of the capital may be
comprised of a mix of principal shareholders, private investors and venture
capital companies.
If
needed
capital investment for our acquisitions or developments is not available, in
whole or in part, we intend to delay the implementation plan regarding our
acquisitions or development plans until sufficient investment capital becomes
available. We cannot give any assurances that we will raise sufficient
investment capital to meet the business plan. In addition to delays to the
implementation plan regarding our acquisition or development plans due to
insufficiency of investment capital, we may suffer other consequences, including
but not limited to the following: We may have to significantly alter the scope
of our business plan and subsequent capital requirements; We may have to suspend
or discontinue operations of one or more of our business units or; we may have
to suspend or discontinue operations of the Company if we become insolvent
as a
result.
Until
planned acquisitions (current and future) and new venture developments begin
to
produce significant revenues and subsequent positive cash flow, we will be
reliant on capital received from private placements, loans, and the exercise
of
options and warrants. Due to the depressed market for our securities, we may
not
be able avoid significant dilution to current shareholders. In addition, we
expect to continue to retain certain management, staff and consultants, such
as
legal counsel, and may need to compensate these individuals through the issuance
of our common stock as compensation. These stock based compensations may result
in significant dilution to current shareholders due to the depressed market
for
our securities. We also continue to reduce or prevent collection of outstanding
vendor debts and accounts with creditors, such as suppliers and consultants,
which could result in litigation against the Company. There can be no guarantee
that all of these negotiations will be successful and the outcome of these
negotiations may include settlements in cash and/or issuance of common stock.
These stock based settlements may result in significant dilution to current
shareholders due to the depressed market for our securities. We plan on
continuing to meet certain of our expenses through the issuance of our shares
of
common stock, which may cause additional and significant dilution to existing
shareholders due to the depressed market for our securities.
Subsequent
to December 31, 2004, the Company entered into a financing agreement whereby
a
lender may provide financing subject to potential milestones imposed on the
Company by the lender being met. The Company received $100,000 in February
2005
and issued a convertible promissory note to the lender. The note is convertible
at the option of the holder into common shares of the Company at the conversion
price of $0.016 per share. The note is payable on February 16, 2006 and bears
interest at 8% per annum.
FORWARD-LOOKING
STATEMENTS
Many
statements made in this report are forward-looking statements that are not
based
on historical facts. Because these forward-looking statements involve risks
and
uncertainties, there are important factors that could cause actual results
to
differ materially from those expressed or implied by these forward-looking
statements. The forward looking statements made in this report relate only
to
events as of the date on which the statements are made.
Item
7. Financial Statements
The
information requested by this item is set forth following Item 14 of this
Report.
Item
8. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure
There
have been no changes in and disagreements with Accountants on Accounting and
Financial Disclosure as of the fiscal year end 2002.
Item
8A. Controls and Procedures.
As
required by Rule 13a-14 under the Securities Exchange Act of 1934 (the "Exchange
Act"), we carried out an evaluation of the effectiveness of the design and
operation of our disclosure controls and procedures within the 90 days prior
to
the filing date of this report. This evaluation was carried out under the
supervision and with the participation of our Chief Executive Officer, Ray
Hawkins and Chief Financial Officer, Edwin Kwong. Based upon that evaluation,
our Chief Executive Officer and Chief Financial Officer concluded that our
disclosure controls and procedures are effective in timely alerting management
to material information relating to us which is required to be included in
our
periodic SEC filings. There have been no changes in our internal controls or
in
other factors that could significantly affect internal controls subsequent
to
the date we carried out our evaluation.
Disclosure
controls and procedures are controls and other procedures that are designed
to
ensure that information required to be disclosed our reports filed or submitted
under the Exchange Act is recorded, processed, summarized and reported, within
the time periods specified in the Securities and Exchange Commission's rules
and
forms. Disclosure controls and procedures include, without limitation, controls
and procedures designed to ensure that information required to be disclosed
in
our reports filed under the Exchange Act is accumulated and communicated to
management, including our Chief Executive Officer and Chief Financial Officer,
to allow timely decisions regarding required disclosure.
Item
8B. Other Information
On
October 9, 2004, the Company’s subsidiary Livestar Entertainment Events
International Inc. (LEEI) commenced a joint venture as per the Joint Venture
Deal Memorandum (the “Memorandum”) in the form attached hereto as an Exhibit,
between LEEI and A.C.D. Inc. d/b/a Coolworld Entertainment (“Coolworld”).
Speaking generally, the Memorandum provides for LEEI to joint venture with
Coolworld to produce two or three music festivals events. LEEI’s
responsibilities under the Memorandum included: the co-producing of the events,
providing co-production staff and; to use best efforts to provide up to $300,000
to the joint venture. Coolworld’s responsibilities under the Memorandum
included: providing to the joint venture the services of executive production,
production, talent buying and marketing. The joint venture would result in
the
formation of a subsidiary under LEEI (namely Live and Cool One, Inc.) whereby
LEEI would own 51% of the outstanding shares and Coolworld would own 49% of
the
outstanding shares.
On
December 28, 2004, the Company entered into a definitive Joint Venture Agreement
(the “Agreement”) in the form attached hereto as an Exhibit, with Global
Bancorp, Inc. (“Global”). Speaking generally, the Agreement provides for the
Company to joint venture with Global to develop a Voice Over Internet Protocol
(VOIP) business called VOXBOX. The joint venture would result in: the formation
of VOXBOX Telecom, Inc.; the Company buying 800 shares of VOXBOX Telecom, Inc.
from Global for $40,000 and; also purchasing an additional 8400 shares in VOXBOX
Telecom, Inc. for $420,000.00. Both purchases of equity would result in the
Company owing 50% of VOXBOX Telecom, Inc.
PART
III
Item
9. Directors and Executive Officers of the Registrant
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.
|
TERMS
OF
OFFICE
All
executive officers provide services to JUPITER on a full-time basis. The above
listed directors will serve until the next annual meeting of the shareholders
or
until their death, resignation, retirement, removal, or disqualification, or
until their successors have been duly elected and qualified. Vacancies in the
existing Board of Director are filled by majority vote of the remaining
Directors. The officers serve at the will of the Board of Directors. There
are
no family relationships between any executive officer and director.
MANAGEMENT
Ray
Hawkins - Director, President & CEO.
As
the
President & CEO, Mr. Hawkins duties include the forging of business
development, securing of partnerships, and overseeing product development,
and
marketing campaigns. Mr. Hawkins is a serial entrepreneur with over a decade
of
experience in the fields of media, entertainment, and marketing. From 1990-1995,
Mr. Hawkins operated his own music artist management firm, RAH Talent. During
that time Mr. Hawkins also acted as the CEO of Empire Communications, a record
label that produced a number of cutting edge music artists. Also from 1990
-
1995 Mr. Hawkins acted as CEO of RAH Entertainment, a concert and event
corporation. From 1993-1997 Mr. Hawkins acted as a music consultant, procuring
cutting edge music for movie and television production houses like Paramount
Pictures and video game companies like Electronic Arts. From 1996-1999 Mr.
Hawkins was the founder, President, and CEO of TAXI Communications Network
Inc.,
a leading edge media and marketing firm that produced a popular local culture
magazine, TAXI Vancouver, and developed urban based marketing campaigns for
companies like Labatt Breweries, Universal Music, Virgin Megastore and Molson
Canada.
Edwin
Kwong - Director, COO and CFO.
Mr.
Kwong
uses his background in finance and project management to oversee the day-to-day
operations of LIVESTAR. Mr. Kwong has over 5 years of international management
consulting experience in Project Management and Finance in Canada and Asia.
In
1993 Mr. Kwong received a Bachelor of Commerce in Finance from the University
of
British Columbia. In 1996 Mr. Kwong received a Graduate Diploma in Asian Pacific
Management. From 1994-1996 Mr. Kwong worked as Investment Advisor Assistant
for
Great Pacific Management in Vancouver. From 1996 to 1997 Mr. Kwong acted as
a
consultant in Hong Kong for Manulife International Ltd. and Ernst and Young
Management Consulting. From 1997-1998 Mr. Kwong was a Project Executive for
Hopewell Holdings in Hong Kong and Indonesia. From 1999-2000 Mr. Kwong was
the
Senior Business Specialist for INTRIA Items Inc., a financial technology
solutions division of Canadian Imperial Bank of Commerce.
SIGNIFICANT
EMPLOYEES
Other
than those individuals described above, JUPITER does not have any employees
who
are not executive officers that are expected to make a significant contribution
to the business.
SECTION
16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The
following persons have failed to file, on a timely basis, the identified reports
required by Section 16(a) of the Exchange Act during the most recent fiscal
year:
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
|
CODE
OF
ETHICS
The
Company has adopted a Code of Ethics, a copy of which is included with this
filing as Exhibit 14.1 by being incorporated by reference.
Item
10. Executive Compensation
The
following table sets forth certain information as to our President and CEO
and
the highest paid officers and directors for our last fiscal year ended December
31, 2004. No other compensation was paid to any such officers or directors
during this time period.
Annual
Compensation Table
|
|
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
|
|
$
-
|
-
|
(1)
At
December 31, 2004, Mr. Ray Hawkins and RYM Management, Ltd., collectively,
was
entitled to receive an additional $308,863 of executive compensation as per
agreements, and this entire amount has been accrued.
(2)
At
December 31, 2004, Mr. Edwin Kwong and 673100 BC Ltd, collectively, was entitled
to receive an additional $214,341 of executive compensation as per agreements
with the Company, and this entire amount has been accrued.
(3)
Mr.
Hawkins and Mr. Kwong, the Company’s Chief Executive Officer and Chief Financial
Officer respectively, have restructured their Management Services Memorandum
with the Company. See Item 12 for a description of new service arrangements.
Effective
November 2003, and January 2004, respectively, the Company executed Management
Services Memorandums with two key directors/officers. The memorandums provide
for performance bonuses and total annual compensation in the upcoming four
fiscal years as follows:
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
|
Item
11. Security Ownership of Certain Beneficial Owners and
Management
The
following table lists as of July 15, 2005, the beneficial ownership of
LIVESTAR's common stock by each person known by JUPITER to beneficially own
more
than 5% of LIVESTAR's common stock outstanding and by the officers and directors
of JUPITER as a group. Except as otherwise indicated, all shares are owned
directly. JUPITER knows of no other person who is the beneficial owner of more
than five percent of LIVESTAR's common stock. Unless specifically indicated,
the
shareholders listed possess sole voting and investment power with respect to
the
shares shown.
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..
|
For
information regarding Equity Compensation Plans, please refer to Item 5 of
this
document.
Item
12. Certain Relationships and Related Transactions
Except
as
disclosed below, none of the following parties since the date of JUPITER 's
incorporation has had any material interest, direct or indirect, in any
transaction with JUPITER or in any presently proposed transaction that, in
either case, has or will materially affect JUPITER.
- Director
or officer of LIVESTAR
- Proposed
nominee for election as a director of JUPITER
- Person
who beneficially owns, directly or indirectly, shares carrying more than 10%
of
the voting rights attached to all outstanding shares of JUPITER.
- Promoter
of JUPITER
- Relative
or spouse of any of the foregoing persons
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
1.
Incentive Stock Options. Option rights issued to Officers and Directors under
our Incentive Stock Option Plan. A copy of the Plan as well as Incentive Stock
Option Agreements for each Executive Officer and Director were attached as
Exhibits to Form
10-KSB
filed on October 15, 2001. Options awarded to Officers and Directors have been
disclosed in Item 10 of this filing.
2.
As of
September 1, 2001, JUPITER Ventures Network Inc. owed a total of $321,598 to
JUPITER Ventures Network Inc.'s President and CEO, Ray Hawkins. JUPITER is
obligated to repay such loans as per terms of a Promissory Note issued to Ray
Hawkins dated September 1, 2001. This debt is interest free and has a repayment
term of one year from the date of September 1, 2001. In exchange for a reduction
of $50,544 indebtedness by JUPITER, Ray Hawkins subscribed to additional shares
of common stock of the Company. The Company also repaid $11,537 during the
fourth quarter of 2001. In addition, at September 1, 2001, Ray Hawkins was
granted the option to convert to common shares an additional $20,000 in debt
owed by the Company. The terms of such conversion are that Ray Hawkins is
granted the right to convert such debt to stock at $0.02 per share; however,
Ray
Hawkins cannot execute such conversion until after February 28,
2002.
In
February, 2002, the Company executed an amendment to the Promissory Note dated
September 1, 2001 with Ray Hawkins. The amended Promissory reflected the amount
owning from JUPITER to Ray Hawkins as of December 31, 2001, as a total of
$259,517.00. JUPITER is obligated to repay such loans as per terms of the
amended Promissory Note issued to Ray Hawkins in February, 2002. The debt is
interest free and has a repayment term of one year from the date of the
February, 2002 Promissory Note. Ray Hawkins was granted the option to convert
to
common shares the entire amount of outstanding debt owed to Ray Hawkins by
the
Company. The terms of such conversion are that Ray Hawkins is granted the right
to convert such debt to stock at $0.02 per share. Ray Hawkins cannot execute
such conversion until after September 1, 2002.
In
August
2002, the Company executed an amendment to the amended Promissory Note of
February 2002 with Ray Hawkins. The amendment provides that Ray Hawkins cannot
execute the conversion provision, as per the February 2002 Promissory Note,
until after November 30, 2003.
In
November 2003, the Company executed an amendment to the amended Promissory
Note
of February 2002 with Ray Hawkins. The amendment provides that Ray Hawkins
cannot execute the conversion provision, as per the February 2002 Promissory
Note, until after June 30, 2004.
In
November 2003, the Company also repaid $8,000 towards the Promissory Note due
to
Ray Hawkins.
In
February 2004, the Company repaid $1,200 towards the Promissory Note due to
Ray
Hawkins. In May 2004, the Company issued 60,000,000 Series B Preferred to Ray
Hawkins for the cancellation of $102,000 towards the Promissory Note due to
Ray
Hawkins. The Series B Preferred stock is convertible at the option of holder
into shares of common stock of the registrant on a share for share basis, and
is
able to vote the equivalent of 50 shares of common stock.
In
June
2004, the Company executed an amendment to the amended Promissory Note of
February 2002 with Ray Hawkins. The amendment provides that Ray Hawkins cannot
execute the conversion provision, as per the February 2002 Promissory Note,
until after June 30, 2006.
3.
In
October 2004, the Company issued 80,000,000 shares of Series B Preferred stock
to Ray Hawkins. The Shares were issued in exchange for the cancellation of
debt
in the total amount $20,000.00 which was owed to Ray Hawkins for executive
services. The series B stock are convertible at the option of holder into shares
of common stock of the registrant on a share for share basis, and is able to
vote the equivalent of 50 shares of common stock.
4.
In
September, 2001, JUPITER owed a total of $9,435 to JUPITER’ COO, Edwin Kwong.
JUPITER is obligated to repay such loans. This debt is interest free and
repayable within one year from date of the promissory note issued to Edwin
Kwong
from JUPITER dated September 1, 2001. In exchange for a reduction of $3,900
indebtedness by JUPITER, Edwin Kwong subscribed to additional shares of common
stock of the Company. In addition, at September 1, 2001, Edwin Kwong was granted
the option to convert the outstanding balance in debt to common shares at $0.02
per share; however, Edwin Kwong cannot execute such conversion until after
September 1, 2002.
In
August
2002, the Company executed an amendment to the Promissory Note of September
2001
with Edwin Kwong. The amendment provides that Edwin Kwong cannot execute the
conversion provision, as per the September 2001 Promissory Note, until after
November 30, 2003.
At
December 31, 2001 JUPITER Ventures Network Inc. owed a balance of $103,053
to
Edwin Kwong. This debt is interest free and is repayable within one year from
the date of each promissory note, respectively, issued to Edwin Kwong. As of
February 7, 2002 JUPITER executed two Promissory Notes totaling $100,035. In
addition, Edwin Kwong was granted the option to convert to common shares the
outstanding balance in debt owed by the Company at $0.10 per share; however,
Edwin Kwong cannot execute such conversion until after May 31, 2002.
Subsequently in May 2002, the Company
executed
an amendment to the two Promissory Notes of February 2002. The amendment
provides that Edwin Kwong cannot execute such conversion, as per the two
Promissory Notes of February 2002, till July 31, 2002. In July 2002, the Company
executed an amendment to the two February 2002 Promissory Notes, and reissued
two amended Promissory Notes. The two amended Promissory Notes of July 2002
provide that the debt remains interest free and is repayable within one year
from the date of each promissory note. In addition, Edwin Kwong was granted
the
option to convert to common shares the outstanding balance in debt owed by
the
Company at $0.05 per share; however, Edwin Kwong cannot execute such conversion
until after August 30, 2002.
In
August
2002, the Company executed an amendment to the two Promissory Notes of July
2002
with Edwin Kwong. The amendment provides that Edwin Kwong cannot execute the
conversion provision, as per the two July 2002 Promissory Note, until
after
November
30, 2003.
As
of
February 27, 2002, JUPITER executed a Promissory Note totaling $5,550, where
by
Edwin Kwong was granted the option to convert to common shares the outstanding
balance in debt owed by the Company at $0.17 per share; however, Edwin Kwong
cannot execute such conversion until after August 31, 2002.
In
August
2002, the Company executed an amendment to the Promissory Note of February
27,
2002 with Edwin Kwong. The amendment provides that Edwin Kwong cannot execute
the conversion provision, as per the February 27, 2002 Promissory Note, until
after November 30, 2003.
In
March
of 2003, Edwin Kwong requested the removal of the conversion restrictions to
one
of his Promissory Notes. In May 2003, the Company approved the removal of the
Conversion Restriction and subsequently, Edwin Kwong converted that Promissory
Note. Edwin Kwong received 1,584,608 shares at $0.004 per share, which repaid
a
total of $6,338.43 of debt.
In
November 2003, the Company executed amendments to the remaining Promissory
Notes
with Edwin Kwong. The amendment provides that Edwin Kwong cannot execute the
conversion provision, as per the August 2002 Promissory Note Amendments, until
after June 30, 2004.
In
June
2004, the Company executed amendments to the remaining Promissory Notes with
Edwin Kwong. The amendment provides that Edwin Kwong cannot execute the
conversion provision, as per the August 2002 Promissory Note Amendments, until
after June 30, 2006.
5.
In
November 2003, JUPITER entered into an Agreement with RYM Management Ltd.
(“RYM”) for executive management services. Under the Agreement RYM will supply
JUPITER with the services of Mr. Ray Hawkins, who will serve as President CEO
of
LIVESTAR. This Agreement replaces the Agreement between the Company and Ray
Hawkins dated January 1, 2002.
6.
In
January, 2004, JUPITER entered into an Agreement with 673100 BC Ltd. (“673”) for
executive management services. Under the Agreement 673 will supply JUPITER
with
the services of Mr. Edwin Kwong, who will serve as COO and CFO of LIVESTAR.
This
Agreement replaces the Agreement between the Company and Edwin Kwong dated
January 1, 2002.
7.
In
July 2004, the Company entered into a sublease agreement with 673422 BC Ltd.,
a
company controlled by Edwin Kwong, the Company’s COO and CFO, to provide office
space for the company’s corporate operations for a term of 12 months at
CDN$5,300 per month.
PART
IV
Item
13. Exhibits
2.1
Agreement and Plan of Reorganization (1)
2.2
Amendment to Merger Agreement (1)
3.1
Amended Articles of Incorporation (1)
3.2
Amended Bylaws (2)
3.3
Stock
Option Plan of JUPITER GLOBAL HOLDINGS, CORP. (2)
10.1
Sample of Form of Promissory Note: Ray Hawkins (2)
10.2
Sample of Form of Promissory Note: Edwin Kwong (2)
10.3
Lease Agreement dated November 9, 1999 with RAH Media (2)
10.4
Assignment of Lease dated August 31, 2001 with RAH Media (2)
10.5
Management Services Memorandum: Ray Hawkins (2)
10.6
Management Services Memorandum: Edwin Kwong (2)
10.7
Management Services Memorandum: RYM Management Ltd. (4)
10.8
Management Services Memorandum: 673100 B.C. Ltd. (4)
10.9
Definitive Joint Venture Agreement by and between the Company and Global
Bancorp, Inc. regarding VOXBOX joint venture
10.10
Joint Venture Memorandum by and between Livestar Entertainment Events
International Inc. and A.C.D. Inc. and Sason Parry regarding Live and COOL
One,
Inc. joint venture
14.1
Code
of Ethics (4)
16.
Letter from Cordovano & Harvey (3)
21.
Subsidiaries of the Registrant
31.1
Certification
of CEO pursuant to Securities Exchange Act rules 13a-15 and 15d-15(c) as adopted
pursuant to section 302 of the Sarbanes-Oxley act of 2002.
31.2
Certification
of CFO pursuant to Securities Exchange Act rules 13a-15 and 15d-15(c) as adopted
pursuant to section 302 of the Sarbanes-Oxley act of 2002.
32.1
Certification
of CEO pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906
of
the Sarbanes-Oxley act of 2002.
32.2
Certification of CFO pursuant to 18 U.S.C. section 1350, as adopted pursuant
to
section 906 of the Sarbanes-Oxley act of 2002.
99.1
Risk
Factors
99.4
Incentive Stock Option Agreement with Ray Hawkins (2)
99.5
Incentive Stock Option Agreement with Edwin Kwong (2)
(1)
Incorporated into this Form 10-KSB by reference to the
Registrant's
previous filing of this Exhibit in its Form 8-K
filed
with the Commission on August 20, 2001.
(2)
Incorporated into this Form 10-KSB by reference to the
Registrant's
previous filing of this Exhibit in its Form 10-KSB filed with the Commission
on
October 15, 2001.
(3)Letter
dated August 28, 2001 is incorporated into this Form
10-KSB
by
reference to the Registrant's previous filing of
this
Exhibit in its Form 8-K/A filed with the Commission on
September
17, 2001.
(4)
Incorporated into this Form 10-KSB by reference to the
Registrant's
previous filing of this Exhibit in its Form 10-KSB filed with the Commission
on
April 14, 2004.
Item
14. Principal Accountant Fees and Services
Audit
Fees
The
aggregate fees billed by our auditors for professional services rendered in
the
fiscal year ended December 31, 2003 was $ $15,750, of which $11,125 was rendered
for the audit of its annual financial statements for year ended December 31,
2003, and $4,625 was rendered for the reviews of its quarterly financial
statements.. As of the date of this filing, the invoices are not completed
for
the fees for the preparation of the audited financial statements for the fiscal
year ended December 31, 2004, and so those amounts are unknown.
Audit-Related
Fees
Our
auditors did not bill any additional fees for assurance and related services
that are reasonably related to the performance of the audit or review of our
financial statements.
Tax
Fees
The
aggregate fees billed by our auditors for professional services for tax
compliance, tax advice and tax planning were $0 and $0 for the fiscal years
ended December 31, 2003, and 2004.
All
Other Fees
The
aggregate fees billed by our auditors for all other non-audit services, such
as
attending meetings and other miscellaneous financial consulting for the fiscal
years ended December 31, 2003, and 2004 were $0 and $0, respectively.
SIGNATURES
In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
JUPITER
GLOBAL HOLDINGS, CORP.
By:
/s/
Ray Hawkins
Ray
Hawkins, President
Date:
September 14, 2005
In
accordance with the Securities Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities
and
on the dates indicated.
By:
/s/
Ray Hawkins
Ray
Hawkins, Director
Principal
Executive Officer
Date:
September 14, 2005
/s/
Edwin Kwong
Edwin
Kwong, Director
Principal
Financial Officer
Principal
Accounting Officer
Date:
September 14, 2005
Financial
Statements
JUPITER's
audited Consolidated Financial Statements, as described
below,
are attached hereto.
1.
Audited Financial Statements
(a)
Auditor's Report
(b)
Consolidated Balance Sheets
(c)
Consolidated Statements of Operations and Deficit
(d)
Consolidated Statements of Cash Flows
(e)
Consolidated Statements of Stockholder's Deficiency
(f)
Notes
to Consolidated Financial Statements
JUPITER
GLOBAL HOLDINGS CORP.
(Formerly
Livestar Entertainment Group Inc.)
CONSOLIDATED
FINANCIAL STATEMENTS
DECEMBER
31, 2004 AND 2003
(Stated
in U.S. Dollars)
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
MORGAN
& COMPANY
CHARTERED
ACCOUNTANTS
To
the
Stockholders and Board of Directors
Jupiter
Global Holdings Corp.
(Formerly
Livestar Entertainment Group Inc.)
We
have
audited the accompanying consolidated balance sheets of Jupiter Global Holdings
Corp. (formerly Livestar Entertainment Group Inc.) as at December 31, 2004
and
2003, and the related consolidated statements of operations, stockholders’
deficiency, and cash flows for each of the two years in the period ended
December 31, 2004. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express
an
opinion on these consolidated financial statements based on our
audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that
we plan
and perform an audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining,
on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In
our
opinion, these consolidated financial statements referred to above present
fairly, in all material respects, the financial position of the Company as
at
December 31, 2004 and 2003, and the results of its operations and its cash
flows
for the periods indicated in conformity with U.S. generally accepted accounting
principles.
The
Company is not required to have, nor were we engaged to perform, an audit
of its
internal control over financial reporting. Our audits included consideration
of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose
of
expressing an opinion on the effectiveness of the Company’s internal control
over financial reporting. Accordingly, we express no such opinion.
The
accompanying consolidated financial statements have been prepared assuming
that
the Company will continue as a going concern. As discussed in Note 1(c) to
the
consolidated financial statements, the Company has accumulated a deficit
of
$8,847,847, has not attained profitable operations and is dependent upon
obtaining adequate financing to fulfill its business activities. These factors
raise substantial doubt that the Company will be able to continue as a going
concern. Management’s plans in regard to these matters are discussed in Note
1(c). The financial statements do not include any adjustments that might
result
from the outcome of this uncertainty.
As
described in Note 5(c) and Note 7(c) to the consolidated financial statements,
the accompanying consolidated financial statements of Jupiter Global Holdings
Corp. (formerly Livestar Entertainment Group Inc.) as at December 31, 2003
have
been restated.
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
|
JUPITER
GLOBAL HOLDINGS CORP.
(Formerly
Livestar Entertainment Group Inc.)
CONSOLIDATED
BALANCE SHEETS
(Stated
in U.S. Dollars)
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
accompanying notes are an integral part of these consolidated financial
statements.
JUPITER
GLOBAL HOLDINGS CORP.
(Formerly
Livestar Entertainment Group Inc.)
CONSOLIDATED
STATEMENTS OF OPERATIONS
(Stated
in U.S. Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
accompanying notes are an integral part of these consolidated financial
statements.
JUPITER
GLOBAL HOLDINGS CORP.
(Formerly
Livestar Entertainment Group Inc.)
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Stated
in U.S. Dollars)
|
|
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
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
accompanying notes are an integral part of these consolidated financial
statements.
F-4
JUPITER
GLOBAL HOLDINGS CORP.
(Formerly
Livestar Entertainment Group Inc.)
CONSOLIDATED
STATEMENT OF STOCKHOLDERS’ DEFICIENCY
YEARS
ENDED DECEMBER 31, 2004 AND 2003
(Stated
in U.S. Dollars)
(Restated
- Note 5(c) and Note 7(c))
|
|
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
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
accompanying notes are an integral part of these consolidated financial
statements.
F-5
JUPITER
GLOBAL HOLDINGS CORP.
(Formerly
Livestar Entertainment Group Inc.)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2004 AND 2003
(Stated
in U.S. Dollars)
1. NATURE
OF OPERATIONS
a) Organization
The
Company was incorporated in the State of Nevada, U.S.A., on October 12, 2000.
During the year ended December 31, 2004, the Company consolidated its issued
and
outstanding common shares on a 1 new share for 2,000,000 old share basis.
The
consolidation, otherwise known as a reverse stock split, happened over two
periods as disclosed in note 6.
All
common stock and per share amounts referred to in these consolidated financial
statements have been adjusted to reflect the stock consolidations. In addition,
subsequent to December 31, 2004, the Company changed its name to Jupiter
Global
Holdings Corp. from Livestar Entertainment Group Inc.
b)
Business Activities
The
Company was organized as a holding company to develop or acquire innovative
ventures with an emphasis on serving the lifestyle needs of the 18 - 34 year
Digital Generation through the production and marketing of lifestyle products
and services. At this time, the Company’s focus is the continued advancement as
a holding company with interests and developments in a diverse number of
growing
industries such as the VoIP telecom industry, promotional marketing industry
and
entertainment industry. The Company’s interests in the entertainment industry
generated significant revenues during the year ended December 31, 2004.
Accordingly, the Company is no longer classified as a development stage company.
During
the year 2004, as part its Entertainment operations, the Company started
and
ceased Nightclub operations in Toronto, Canada under 1614718 Ontario Inc.
operating as the Sequel Lounge. The Company recorded approximately $250,000
of
revenue from those operations. In addition to its night club operations,
live
event revenues were incurred through the Company’s 51% owned subsidiary LIVE
& Cool One, Inc. As a result of LIVE & Cool One’s significant losses
incurred to date, and the Company’s inability to recover the minority interest
share of losses, the Company has recorded 100% of the losses of LIVE & Cool
One, Inc. since its inception in these consolidated financial
statements.
F-6
JUPITER
GLOBAL HOLDINGS CORP.
(Formerly
Livestar Entertainment Group Inc.)
CONSOLIDATED
BALANCE SHEETS
(Stated
in U.S. Dollars)
1. NATURE
OF OPERATIONS
(Continued)
Since
inception, the Company has suffered recurring losses, net cash outflows from
operations and, at December 31, 2004, has accumulated a deficit of $8,847,847
and a working capital deficiency of $3,024,611. The Company expects to continue
to incur substantial losses to complete the development of its business.
Since
its inception, the Company has funded operations through common stock issuances
and related party loans in order to meet its strategic objectives. Management
believes that sufficient funding will be available to meet its business
objectives, including anticipated cash needs for working capital, and is
currently evaluating several financing options. However, there can be no
assurance that the Company will be able to obtain sufficient funds to continue
the development of and, if successful, to commence the sale of its products
and
services under development. As a result of the foregoing, there exists
substantial doubt about the Company’s ability to continue as a going concern.
These consolidated financial statements do not include any adjustments that
might result if the Company is unable to realize its assets and settle its
obligations in the normal course of business.
2. SIGNIFICANT
ACCOUNTING POLICIES
The
consolidated financial statements of the Company have been prepared in
accordance with generally accepted accounting principles in the United States
of
America. Because a precise determination of many assets and liabilities is
dependent upon future events, the preparation of consolidated financial
statements for a period necessarily involves the use of estimates which have
been made using careful judgment.
The
consolidated financial statements have, in management’s opinion, been properly
prepared within reasonable limits of materiality and within the framework
of the
significant accounting policies summarized below:
a) Consolidation
These
consolidated financial statements include the accounts of the Company, its
100%
owned subsidiaries, RRUN Labs Incorporated, LIVESTAR Entertainment Canada
Inc.,
1615496 Ontario Ltd., 1614718 Ontario Inc., LIVESTAR Entertainment Establishment
Ltd., LIVESTAR Entertainment Events International Inc., its 67% owned
subsidiary, RAHX, Inc., and its 51% owned subsidiary LIVE & Cool One,
Inc..
b)
Investments
Investments
in companies owned less than 20% are recorded at the lower of cost or fair
market value.
F-7
JUPITER
GLOBAL HOLDINGS CORP.
(Formerly
Livestar Entertainment Group Inc.)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2004 AND 2003
(Stated
in U.S. Dollars)
2. SIGNIFICANT
ACCOUNTING POLICIES
(Continued)
c) |
Software
Development Costs
|
The
costs
to develop new software products and enhancements to existing software products
are expensed as incurred until technological feasibility has been established.
Once technological feasibility has been established, any additional costs
are
capitalized.
The
Company has adopted Statement of Financial Accounting Standards No. 109 -
“Accounting for Income Taxes” (SFAS 109). This standard requires the use of an
asset and liability approach for financial accounting and reporting on income
taxes. If it is more likely than not that some portion or all of a deferred
tax
asset will not be realized, a valuation allowance is recognized.
Capital
assets are being amortized over their estimated useful lives on the
straight-line basis at the following rates:
Computer
equipment
|
3
years
|
Computer
software
|
3
years
|
Office
furniture and equipment
|
5
years
|
|
f)
|
Stock
Based Compensation
|
The
Company accounts for stock based employee compensation arrangements in
accordance with the provisions of Accounting Principles Board Opinion No.
25 -
“Accounting for Stock Issued to Employees” (APB No. 25) and complies with the
disclosure provisions of Statement of Financial Accounting Standards No.
123 -
“Accounting for Stock Based Compensation” (SFAS No. 123). Under APB No. 25,
compensation expense is recognized based on the difference, if any, on the
date
of grant between the estimated fair value of the Company’s stock and the amount
an employee must pay to acquire the stock. Compensation expense is recognized
immediately for past services and rateably for future services over the option
vesting period.
The
Company’s financial instruments consist of cash, accounts receivable, Goods and
Services Tax recoverable, accounts payable and accrued liabilities, and loans
and advances payable.
JUPITER
GLOBAL HOLDINGS CORP.
(Formerly
Livestar Entertainment Group Inc.)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2004 AND 2003
(Stated
in U.S. Dollars)
2.
|
SIGNIFICANT
ACCOUNTING POLICIES (Continued)
|
|
g)
|
Financial
Instruments (Continued)
|
Unless
otherwise noted, it is management’s opinion that this Company is not exposed to
significant interest or credit risks arising from these financial instruments.
The fair value of these financial instruments approximate their carrying
values,
unless otherwise noted.
Basic
earnings per share is computed by dividing income available to common
shareholders by the weighted average number of common shares outstanding
in the
period. Diluted earnings per share takes into consideration common shares
outstanding (computed under basic earnings per share) and potentially dilutive
common stock equivalents including warrants, options and convertible
instruments. Diluted loss per share equals loss per share as the exercise
of any
common stock equivalents would be anti-dilutive.
|
i)
|
Foreign
Currency Translation
|
Transaction
amounts denominated in foreign currencies are translated at exchange rates
prevailing at transaction dates. Carrying values of monetary assets and
liabilities are adjusted at each balance sheet date to reflect the exchange
rate
at that date. Non-monetary assets and liabilities are translated at the exchange
rate on the original transaction date. Gains and losses from restatement
of
foreign currency monetary and non-monetary assets and liabilities are included
in the statements of operations. Revenues and expenses are translated at
the
rates of exchange prevailing on the dates such items are recognized in the
statements of operations.
j)
Revenue
Recognition
The
Company recognizes revenue when persuasive evidence of an arrangement exists,
services have been rendered, the sales price is fixed or determinable, and
collectibility is reasonably assured. For the Company’s Live Events operations,
revenues are recognized at the time the events are held.
For
the
Company’s Nightclub operations, revenues are recognized on the day services are
performed and at point of sale for beverage products.
During
the year 2004, the Company closed its Nightclub operations.
JUPITER
GLOBAL HOLDINGS CORP.
(Formerly
Livestar Entertainment Group Inc.)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2004 AND 2003
(Stated
in U.S. Dollars)
2.
|
SIGNIFICANT
ACCOUNTING POLICIES (Continued)
|
k) Recently
Issued Accounting Pronouncements.
In
December 2004, the FASB issued SFAS No. 123R, "Share-Based Payment" to revise
SFAS No. 123. SFAS No. 123R establishes standards for the accounting for
transactions in which an entity exchanges its equity instruments for goods
or
services. This Statement focuses primarily on accounting for transactions
in
which an entity obtains employee services in share-based payment transactions.
SFAS No. 123R requires that the fair value of such equity instruments be
recognized as expense in the historical financial statements as services
are
performed. Prior to SFAS No. 123R, only certain pro forma disclosures of
fair
value were required. SFAS No. 123R shall be effective for small business
issuers
as of the beginning of the first interim or annual reporting period that
begins
after December 15, 2005. The impact of the adoption of this new accounting
pronouncement would be similar to the Company’s calculation of the pro forma
impact on net income of SFAS 123 included in the note for stock
compensation.
The
Company does not expect the adoption of any other recently issued accounting
pronouncements to have a significant impact on the results of operations,
financial position or cash flow.
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-10
JUPITER
GLOBAL HOLDINGS CORP.
(Formerly
Livestar Entertainment Group Inc.)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2004 AND 2003
(Stated
in U.S. Dollars)
4.
ADVANCES
RECEIVABLE
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 Series A Preferred
Shares for $50,000 cash.
5. LOANS
AND ADVANCES
All
loans
and advances payable are past due or are repayable within one year and are
unsecured. As at the year ended 2004, loans and advances consisted
of:
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
The
past
due convertible loans and advances were issued in the years ended December
31,
2002 and 2001. They are now past due. The holders have not demanded payment.
The
amounts are non-interest bearing and are convertible at the option of the
holder.
JUPITER
GLOBAL HOLDINGS CORP.
(Formerly
Livestar Entertainment Group Inc.)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2004 AND 2003
(Stated
in U.S. Dollars)
5. LOANS
AND ADVANCES (Continued)
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JUPITER
GLOBAL HOLDINGS CORP.
(Formerly
Livestar Entertainment Group Inc.)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2004 AND 2003
(Stated
in U.S. Dollars)
5. LOANS
AND ADVANCES (Continued)
|
|
$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.
|
The
fair
value of the convertible notes and advances at December 31, 2004 and 2003
is not
determinable due to uncertainties relating to the timing and nature of eventual
settlement.
c) The
accompanying financial statements for the year ended December 31, 2003 have
been
restated to correct an error in the accounting for the beneficial conversion
feature on the convertible notes.
Emerging
Issues Task Force Release Nos. 98-5 and 00-27 state that any embedded beneficial
conversion features present in convertible securities should be valued
separately at issuance. The embedded beneficial conversion feature should
be
recognized and measured by allocating a portion of the proceeds equal to
the
intrinsic value of that feature to additional paid-in capital. That amount
should be calculated at the commitment date as the difference between the
effective conversion price and the fair value of the common stock or other
securities into which the security is convertible, multiplied by the number
of
shares into which the security is convertible. The Emerging Issues Task Force
observed that in certain circumstances, the intrinsic value of the beneficial
conversion feature may be greater than the proceeds allocated to the convertible
instrument. In those situations, the amount of the discount assigned to the
beneficial conversion feature is limited to the amount of the proceeds allocated
to the convertible instrument. For convertible instruments that have a stated
redemption date (such as term debt) the discount resulting from recording
a
beneficial conversion option should be accreted from the date of issuance
to the
stated redemption date of the convertible instrument. In the event of early
conversion or default, the remaining discount would be recognized as interest
expense during the period in which such early conversion or default
occurs.
In
correcting the accounting for the convertible notes to apply the provisions
of
the above pronouncements, the Company recorded a discount on the convertible
debentures in the amount of $271,742 and $3,900 in the years ended December
31,
2002 and 2001 respectively. This discount has been accreted to interest
expense.
The
restatement had the effect of increasing the previously reported deficit
at
December 31, 2003 and 2002 by the $275,642 amount of the discount, and
increasing additional paid in capital by the same amount. The restatement
had no
effect on the previously reported loss or loss per share for the year ended
December 31, 2003.
JUPITER
GLOBAL HOLDINGS CORP.
(Formerly
Livestar Entertainment Group Inc.)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2004 AND 2003
(Stated
in U.S. Dollars)
6. CAPITAL
STOCK
On
June
23, 2003, the Company amended its articles of incorporation to increase its
authorized common stock from 100,000,000 to 250,000,000 shares, and on December
3, 2003 from 250,000,000 to 1,000,000,000 shares. On June 24, 2004, the company
amended its authorized common stock from 1,000,000,000 shares to 10,000,000,000
shares.
During
the year ended December 31, 2004, the Company completed common stock
consolidations of 1,000 shares for 1 share on September 1, 2004 and 2000
shares
for 1 share on November 8, 2004. All references to common shares and per
share
amounts in these Financial Statements have been adjusted to reflect the effect
of these consolidated stock consolidations.
7.
CONVERTIBLE PREFERRED STOCK
On
June
23, 2003, the Company amended its articles of incorporation to authorize
200,000,000 shares of Preferred stock.
|
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.
|
Series
A
Preferred Shares have Conversion & Voting Rights of 40 Common Shares for 1
Preferred Share. During the year ended December 31, 2004, Series A Preferred
Shares experienced the same 2,000,000:1 consolidation as the common stock,
leaving 1 Series A Preferred Share outstanding at December 31, 2004.
JUPITER
GLOBAL HOLDINGS CORP.
(Formerly
Livestar Entertainment Group Inc.)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2004 AND 2003
(Stated
in U.S. Dollars)
7. CONVERTIBLE
PREFERRED STOCK (Continued)
|
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.
|
Dividends
shall be paid with respect to shares of Series B convertible Preferred Stock
only as dividends are paid with respect to the shares of common stock of
the
corporation. Shares of Series B convertible preferred stock shall only receive
dividends to which they would be entitled if they were converted into shares
of
common stock immediately prior to the payment of the dividend.
As
a
result of the issuance of the 80,060,000 Series B preferred shares to a director
of the Company, the director holds voting rights of the equivalent of
4,003,000,000 common shares which as at December 31, 2004 represents 99%
of
total shareholder votes available.
|
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.
|
F-15
JUPITER
GLOBAL HOLDINGS CORP.
(Formerly
Livestar Entertainment Group Inc.)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2004 AND 2003
(Stated
in U.S. Dollars)
8.
|
STOCK
OPTIONS AND WARRANTS
OUTSTANDING
|
On
January 30, 2004, March 5, 2004, May 6, 2004, June 28, 2004, August 2, 2004,
and
November 3, 2004 respectively, the Board of Directors approved six Employee
Stock Incentive Plans (“ESIP”) for the Year 2004 under which designated officers
and employees of the Company and its subsidiaries may be granted stock options.
The plans are administered by the Company’s Board of Directors, who have
substantial discretion to determine the persons, amounts, time of exercise,
price, exercise terms, and restrictions on the options.
ESIP
plans 1 to 4 are variable stock option plans. The minimum exercise price
for
options granted under the plans is 85% of the fair market value of the
underlying common stock on the date of exercise of the option. The Company
records 15% of the market value of the underlying shares on the date of exercise
as the intrinsic value of these options.
ESIP
plans 5 and 6 are fixed stock option plans. The exercise price for options
granted is a minimum of 85% of the fair market value of the underlying common
stock on the date of grant. The Company records 15% of the market value of
the
underlying shares on the date of grant as the intrinsic value of these
options.
Under
the
plans above, the Company was authorized to grant up to a total of 5,780,856,390
common shares. Options granted under these plans have a 10 year expiry, and
vest
immediately. At December 31, 2004, 5,730,840,000 employee options remained
available for grant.
On
January 5, 2005, the Company amended ESIP No. 6 to deregister 4,493,000,000
common shares authorized to be issued pursuant to option grants, and as a
result, 1,237,840,000 employee options remained available for grant under
these
plans.
The
amounts of options then available for grant under the plans were proportionately
adjusted as a result of the 2004 stock consolidation for ESIP plans 1 to
3. For
ESIP plans 4 to 6, the options available for grant were not affected by the
stock consolidation.
During
the year ended December 31, 2004, 12,356,802 options were exercised on behalf
of
employees on a cashless basis through an outside broker for proceeds to the
Company of $1,138,021.
F-16
JUPITER
GLOBAL HOLDINGS CORP.
(Formerly
Livestar Entertainment Group Inc.)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2004 AND 2003
(Stated
in U.S. Dollars)
8.
|
STOCK
OPTIONS AND WARRANTS OUTSTANDING
(Continued)
|
|
a)
|
Stock
options (Continued)
|
As
at
December 31, 2004, options were outstanding and exercisable for the purchase
of
common shares as follows:
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A
summary
of the changes in stock options for the years ended December 31, 2004 and
2003
is presented below:
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
JUPITER
GLOBAL HOLDINGS CORP.
(Formerly
Livestar Entertainment Group Inc.)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2004 AND 2003
(Stated
in U.S. Dollars)
8.
|
STOCK
OPTIONS AND WARRANTS OUTSTANDING
(Continued)
|
|
b)
|
Share
Purchase Warrants
|
As
at
December 31, 2004, share purchase warrants were outstanding for the purchase
of
common shares as follows:
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JUPITER
GLOBAL HOLDINGS CORP.
(Formerly
Livestar Entertainment Group Inc.)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2004 AND 2003
(Stated
in U.S. Dollars)
8.
|
STOCK
OPTIONS AND WARRANTS OUTSTANDING
(Continued)
|
|
b)
|
Share
Purchase Warrants (Continued)
|
A
summary
of the changes in shares which may be purchased on exercise of warrants for
the
year ended December 31, 2004 is presented below:
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
At
December 31, 2004, a total of 22 warrants remain issued and outstanding,
and
underlie the shares listed in the table above.
9.
|
STOCK
BASED COMPENSATION
|
On
March
12, 2004, the Board of Directors approved the 2004 Compensation Plan for
Consultants and Others, for the issue to employees and consultants of up
to 75
shares of common stock at a price of $4,000 for fees for services performed
or
to be performed. Pursuant to the plan, 65 shares have been issued for services
and a total of 10 shares remain available for issuance under the plan at
December 31, 2004.
JUPITER
GLOBAL HOLDINGS CORP.
(Formerly
Livestar Entertainment Group Inc.)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2004 AND 2003
(Stated
in U.S. Dollars)
9.
|
STOCK
BASED COMPENSATION
(Continued)
|
|
a)
|
Non-Employees
(Continued)
|
On
July
1, 2004, the Board of Directors approved the Non-Employee Director and
Consultants Retainer Stock Plan (“NESP”),No. 1,for the issue to employees,
directors and consultants of up to 350,000 shares of common stock at a price
of
$0.0007 for fees for services performed or to be performed. The Company
transferred the 350,000 authorized common shares available for grant to the
ESIP
Plan #4 (Note 8(a)). No common shares remain to be issued under NESP
No.1.
On
August
2, 2004, the Board of Directors approved NESP No. 2 for the issue to employees,
directors and consultants of up to 975,012,500 shares of common stock at
a price
of $0.0002 for fees for services performed or to be performed. During the
year,
15,212,500 common shares were issued for services and the settlement of debt.
.
959,800,000 shares remain available for issue under the plan at December
31,
2004.
On
November 3, 2004, the Board of Directors approved NESP No. 3 for the issue
to
employees, directors and consultants of up to 500,000,000 shares of common
stock
at a price of $0.0001 for fees for services performed or to be performed.
No
shares were issued under this plan during the year. On January 5, 2005, the
Board of Directors reduced the number of the common shares available for
this
Plan. As a result of this amendment, 3,000,000 shares remain available for
issue
under the Plan at January 5, 2005.
In
addition to the plans above, a total of 26 common shares were issued during
the
year to settle outstanding debt.
Shares
issued to non-employees are recorded at the market price of the shares on
the
date service agreements are entered into. In 2004, the Company recorded $238,360
(2003 - $416,900) of non-cash consulting expense.
JUPITER
GLOBAL HOLDINGS CORP.
(Formerly
Livestar Entertainment Group Inc.)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2004 AND 2003
(Stated
in U.S. Dollars)
9.
|
STOCK
BASED COMPENSATION
(Continued)
|
During
the period ended December 31, 2004, the Company recorded stock based
compensation of $1,587,753 as wages and benefits in the consolidated statement
of operations. Of the amount expensed, $457,404 represents the intrinsic
value
of the options granted and exercised under the various ESIP plans (Note 8(a)).
In addition, the Company recorded $1,130,349 for additional benefit provided
to
employees resulting from lower exercise proceeds received by the Company
than
the 85% of the fair market value on the date of grant as specified under
the
terms of ESIP plan 5.
For
options granted and exercised during 2004, fair value approximates the recorded
amounts due to their limited term, generally less than two weeks. The fair
value
of the options granted and outstanding at the end of the year were estimated
at
the date of grant using the Black-Scholes option pricing model with the
following assumptions:
|
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
|
Black-Scholes
is a widely accepted stock option pricing model. However, the ultimate value
of
stock options granted will depend on the actual lives of the options and
future
price levels of the Company’s stock.
Had
the
Company determined compensation cost based on fair values for its employees
stock options, the net loss would have increased by $211,502 for the period
ended December 31, 2004, (2003 - $69,942) as indicated below:
|
|
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
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
JUPITER
GLOBAL HOLDINGS CORP.
(Formerly
Livestar Entertainment Group Inc.)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2004 AND 2003
(Stated
in U.S. Dollars)
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).
|
d)During
the year ended December 31, 2004, the Company incurred $26,456 (2003 - $9,854)
in administration, office, and equipment rental expenses with companies
controlled by directors.
11.
|
SUPPLEMENTAL
DISCLOSURE OF NON CASH FINANCING AND INVESTING
ACTIVITIES
|
During
the years ended December 31, 2004 and 2003, the Company had the following
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JUPITER
GLOBAL HOLDINGS CORP.
(Formerly
Livestar Entertainment Group Inc.)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2004 AND 2003
(Stated
in U.S. Dollars)
|
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.
|
JUPITER
GLOBAL HOLDINGS CORP.
(Formerly
Livestar Entertainment Group Inc.)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2004 AND 2003
(Stated
in U.S. Dollars)
A
reconciliation of income taxes at statutory rates with the reported taxes
is as
follows:
|
|
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
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Significant
components of the Company’s future tax assets based on statutory tax rates are
as follows:
|
|
2004
|
|
2003
|
|
|
|
|
|
|
|
Future
tax assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
carryforwards
|
|
|
|
|
$
|
2,520,000
|
|
|
|
|
$
|
1,318,000
|
|
Valuation
allowance
|
|
|
|
|
|
(2,520,000
|
)
|
|
|
|
|
(1,318,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
Company has approximately $7,413,000 (2003 - $3,875,000) of operating loss
carryforwards which expire beginning in 2020.
The
Company has provided a valuation allowance against its deferred tax assets
given
that it is more likely than not that these benefits will not be
realized.
The
Company currently operates in a single business segment, “Entertainment”, in a
single geographic area, North America.
JUPITER
GLOBAL HOLDINGS CORP.
(Formerly
Livestar Entertainment Group Inc.)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2004 AND 2003
(Stated
in U.S. Dollars)
|
|
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.
|
b) In
January 2005, the Company entered into an Agreement and Plan of Acquisition
to
acquire 60% of the issued and outstanding shares of Promo Staffing.com LLC.
(“Promo Staffing”) of Miami, Florida. Consideration for the acquisition will
consist of the issuance of 92,307,692 shares of common stock to the sole
shareholder of Promo Staffing. The common stock was held by the attorney
for the
Company until the Company and Promo Staffing finalized the valuation of Promo
Staffing.
In
April
2005, the Company entered into an Amended and Restated Agreement and Plan
of
Acquisition to acquire 60% of the issued and outstanding shares of “Promo
Staffing”. Consideration for the acquisition will consist of the issuance of
64,615,352 shares of common stock to the sole shareholder of Promo Staffing
valued at $588,000. As per the Amended and Restated Agreement and Plan of
Acquisition, 27,692,341 common shares previously held with the attorney of
the
Company were cancelled and returned to the authorized capital of the Company.
Per the agreement, the Company is responsible for providing audited financial
statements of Promo Staffing within 75 days of closing.
In
addition, the Company agreed to provide $600,000 in convertible debt financing
to Promo Staffing in ten monthly instalments of $60,000 each beginning within
30
days of the filing of audited financial statements of Promo
Staffing.
Pursuant
to a Joint Venture agreement dated December 28, 2004 between the Company
and an
unrelated company Global Bancorp Inc (“Global”), the Company acquired 800 shares
of VOXBOX Telecom Inc. (“VOXBOX”), a Nevada incorporated company for cash
consideration of $40,000. Per the agreement, the Company had the right to
purchase an additional 8,400 shares of VOXBOX from Global (the sole shareholder
of VOXBOX) for $420,000 cash over a twelve month period beginning upon the
establishment of VOXBOX. VOXBOX was incorporated on January 27, 2005. At
the
time of the incorporation, VOXBOX is related to the Company by virtue of
having
a director in common.
Pursuant
to a stock purchase agreement dated June 16, 2005 between the Company and
Global, the Company sold the 800 shares of VOXBOX and the right to purchase
the
additional 8,400 shares of VOXBOX back to Global in exchange for 5,000,000
common shares of Global which were valued at $50,000, and rights to purchase
up
to 50% of the issued and outstanding common shares of Global up to June 16,
2008.
JUPITER
GLOBAL HOLDINGS CORP.
(Formerly
Livestar Entertainment Group Inc.)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2004 AND 2003
(Stated
in U.S. Dollars)
15. SUBSEQUENT
EVENTS
(Continued)
d) In
January 2005, the Company issued 37,712,154 common shares at $0.0013 per
share
for the reduction of debt in the amount of $49,026.
e) Subsequent
to December 31, 2004, the Company issued 94,500,000 common shares for consulting
services provided in the amount of $(131,800).
f) The
Company entered into a financing agreement whereby a lender may provide
financing subject to potential milestones imposed on the Company by the lender
being met. The Company received $100,000 in February 2005 and issued a
convertible promissory note to the lender. The note is convertible at the
option
of the holder into common shares of the Company at the conversion price of
$0.016 per share. The note is payable on February 16, 2006 and bears interest
at
8% per annum.
g) On
February 22, 2005, the Company signed a letter of intent in respect of an
offer
to purchase up to 80% of the equity in a private Georgia based company for
$1,360,000, subject to due diligence procedures being carried out and execution
of a final agreement.
F-26