SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 2006
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE EXCHANGE ACT OF 1934
From the transition period from ____________ to ___________.
Commission File Number 0-22236
SKREEM ENTERTAINMENT CORPORATION
-----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Delaware 33-0565710
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
11637 Orpington Street, Orlando, Florida 32817
(Address of principal executive offices)
(407) 207-0400
(Issuer's telephone number)
N/A
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) 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 |_|
Class Shares Outstanding Date
Common, $.001 par value 24,758,950 July 26, 2006
TABLE OF CONTENTS
SKREEM ENTERTAINMENT CORPORATION
Part I. Financial Information
Item 1. Consolidated Financial Statements
Unaudited Consolidated Condensed Balance Sheet - June 30, 2006 3
Unaudited Consolidated Condensed Statements of Operations for the three months ended
June 30, 2006 and 2005 and for the period from inception, August 19, 1999, to June
30, 2006 4
Unaudited Consolidated Condensed Statement of Changes in Shareholders' Deficit
for the period from inception, August 19, 1999, to June 30, 2006 5
Unaudited Consolidated Condensed Statements of Cash Flows for the three months ended
June 30, 2006 and 2005 and for the period from inception, August 19, 1999, to June
30, 2006 6
Notes to the Unaudited Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis or Plan of Operation 9
Item 3. Controls and Procedures 11
Part II. Other Information
Item 1. Legal Proceedings 12
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits 12
Signatures 13
Certifications 14
SKREEM ENTERTAINMENT CORPORATION
(A DEVELOPMENT STAGE COMPANY)
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEET
June 30, 2006
ASSETS
Current assets:
Cash and Cash equivalents $ 7,475
-------------
Total current assets 7,475
Property and equipment, net 6,423
------------
Total assets $ 13,898
============
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
Accounts payable and accrued liabilities $ 192,897
Related party payable 9,254
Deferred revenue 28,565
Accrued interest - shareholder and affiliates 236,966
Notes payable - shareholder 576,770
Notes payable - affiliates 973,620
------------
Total current liabilities 2,018,072
------------
Shareholders' equity:
Preferred shares - $0.001 par value; 1,000,000
authorized, no shares issued or outstanding -
Common shares - $0.001 par value; 50,000,000
authorized; 24,758,950 shares issued and
outstanding 24,759
Additional paid - in capital 3,510,267
Losses accumulated in the development stage (5,539,200)
------------
Total shareholders' deficit (2,004,174)
------------
Total liabilities and shareholders' deficit $ 13,898
============
The accompanying notes are an integral part of these consolidated
condensed financial statements
SKREEM ENTERTAINMENT CORPORATION
(A DEVELOPMENT STAGE COMPANY)
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS For the Three Months
Ended June 30, 2006 and 2005 and for the Period From Inception, August 19, 1999,
to June 30, 2006
Three Months Ended Inception to
------------------------- -------------
June 30, June 30, June 30,
2006 2005 2006
------------- ---------- -------------
Revenue $ 29,695 $ 22,759 $ 218,420
Revenue - related party 37,000 - 37,000
----------- ---------- ------------
Total Revenue 66,695 22,759 255,420
Expenses
Operating (323,105) (362,823) (3,648,467)
General and administrative (149,352) (106,166) (1,505,771)
Impairment of loan receivable - - (130,000)
----------- ----------- ------------
Total expenses (472,457) (468,989) (5,284,238)
----------- ----------- ------------
Loss from operations (405,762) (446,230) (5,028,818)
Interest expense (27,776) (36,507) (510,382)
----------- ----------- ------------
Net loss $ (433,538) $ (482,737) $(5,539,200)
=========== ===========
Weighted Average Shares Outstanding -
basic and diluted 24,612,455 23,107,856
=========== ===========
Loss Per Share -
basic and diluted $ (0.02) $ (0.02)
============ ===========
The accompanying notes are an integral part of these consolidated
condensed financial statements
SKREEM ENTERTAINMENT CORPORATION
(A DEVELOPMENT STAGE COMPANY)
UNAUDITED CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS' DEFICIT
For the period from inception, August 19, 1999, to June 30, 2006
Common Stock Additional During the Losses
------------------------- Paid-In Development Accumulated
Shares Amount Capital Stage Total
----------- ---------- ----------- ------------- -------------
Balance at Inception,
August 19,1999 - $ - $ - $ - $ -
Issuance of common stock 20,000 20 - - 20
Net loss - - - (84,021) (84,021)
---------- ------ --------- --------- -----------
Balance at December 31, 1999 20,000 20 - (84,021) (84,001)
Net loss - - - (230,879) (230,879)
---------- ------ --------- --------- -----------
Balance at December 31, 2000 20,000 20 - (314,900) (314,880)
Net loss - - - (494,816) (494,816)
---------- ------ --------- --------- ------------
Balance at December 31, 2001 20,000 20 - (809,716) (809,696)
Net loss - - - (384,590) (384,590)
---------- ------ --------- --------- -----------
Balance at December 31, 2002 20,000 20 - (1,194,306) (1,194,286)
Reclassification of debt to equity 43,000 43 1,581,940 - 1,581,983
Net loss - - - (736,364) (736,364)
---------- ------ --------- --------- -----------
Balance at December 31, 2003 63,000 63 1,581,940 (1,930,670) (348,667)
Effect of issuance of common
stock and recapitalization
in a reverse acquisition
transaction 25,943,925 25,944 (25,944) - -
Net loss - - - (205,994) (205,994)
---------- ------ --------- --------- -----------
Balance at March 31, 2004 26,006,925 26,007 1,555,996 (2,136,664) (554,661)
Proceeds from issuance of
common stock 603,856 604 301,324 - 301,928
Cancellation of shares (3,502,925) (3,503) 3,503 - -
Net loss - - (1,592,469) (1,592,469)
---------- ------ --------- --------- -----------
Balance at March 31, 2005 23,107,856 23,108 1,860,823 (3,729,133) (1,845,202)
Proceeds from issuance
of common stock 276,400 276 276,124 - 276,400
Stock issued for accounts
payable 50,000 50 49,950 - 50,000
Stock issued for conversion
of debt 1,050,000 1,050 1,048,950 - 1,050,000
Net loss - - - (1,376,529) (1,376,529)
---------- ------ --------- --------- -----------
Balance at March 31, 2006 24,484,256 24,484 3,235,847 (5,105,662) (1,845,331)
Proceeds from issuance
of common stock 24,694 25 24,670 - 24,695
Stock issued for services 250,000 250 249,750 - 250,000
Net loss - - - (433,538) (433,538)
---------- ------ --------- --------- -----------
Balance at June 30, 2006 24,758,950 $24,759 $3,510,267 $(5,539,200) $(2,004,174)
========== ========= ========== =========== ===========
The accompanying notes are an integral part of these unaudited
consolidated condensed financial statements.
SKREEM ENTERTAINMENT CORPORATION
(A DEVELOPMENT STAGE COMPANY)
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS For the Three Months
Ended June 30, 2006 and 2005 and for the Period From Inception, August 19, 1999,
to June 30, 2006
Three Months Ended
----------------------- Inception to
June 30, June 30, June 30,
2006 2005 2006
--------- ---------- --------------
Cash Flows from Operating Activities:
Net loss $ (433,538) $ (482,737) $ (5,539,300)
Adjustments to reconcile net loss to net cash
used by operating activities:
Depreciation expense 980 892 45,564
Impairment of loan receivable - - 130,000
Accrued interest converted to equity - - 208,405
Expenses paid by shareholder and affiliate - 35,000 121,796
Stock issued for services 250,000 - 250,000
Changes in operating assets and liabilities:
Decrease in accounts receivable - 114,257 -
Decrease in prepaid expenses and deposits - 1,557 -
Increase (decrease) in accounts payable and
accrued liabilities 19,487 80,538 252,151
Increase in interest payable to affiliates 19,776 30,008 236,966
(Decrease) increase in deferred revenue 4,065 (15,990) 28,565
----------- ----------- -----------
Net cash used in operating activities (139,230) (236,475) (4,265,752)
----------- ----------- -----------
Cash Flows from Investing Activities
Payments for purchase of property and equipment (373) - (51,987)
Loan receivable - - (130,000)
----------- ----------- ------------
Net cash used in investing activities (373) - (181,987)
----------- ----------- ------------
Cash Flows from Financing Activities
Proceeds from issuance of common stock 24,695 - 603,023
Proceeds from notes payable - other - - 385,000
Proceeds from notes payable - shareholder 20,000 184,000 1,543,000
Proceeds from notes payable - affiliate 40,000 15,000 2,479,191
Principal payments on notes payable - other - - (335,000)
Principal payments on notes payable - shareholder - - (80,000)
Principal payments on notes payable - affiliate - - (140,000)
------------ ---------- ------------
Net cash provided by financing activities 84,695 199,000 4,455,214
------------ ---------- ------------
Net increase (decrease) in cash and cash equivalents (54,908) (37,475) 7,475
Cash and cash equivalents, beginning of period 62,383 52,195 -
------------ ---------- ------------
Cash and cash equivalents, end of period 7,475 $ 14,720 $ 7,475
============ ========== ============
The accompanying notes are an integral part of these unaudited
consolidated condensed financial statements
SKREEM ENTERTAINMENT CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Note 1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated condensed financial statements of Skreem
Entertainment Corporation have been prepared in accordance with accounting
principles generally accepted in the United States of America for interim
financial information and with the instructions to Form 10QSB and Item 310(b) of
Regulation S-B. They do not include all of the information and footnotes
required by accounting principles generally accepted in the United States of
America for complete financial statements. In the opinion of management, all
adjustments, consisting only of normal recurring adjustments, considered
necessary for a fair presentation, have been included in the accompanying
unaudited consolidated financial statements. Operating results for the periods
presented are not necessarily indicative of the results that may be expected for
the full year.
These unaudited consolidated financial statements should be read in conjunction
with the consolidated financial statements and footnotes, which are included as
part of consolidated financial statements as of March 31, 2006 included in the
Company's Form 10KSB.
Note 2 - ACCOUNTING POLICY FOR REVENUE RECOGNITION
Revenue is recognized in accordance with Staff Accounting Bulletin No. 104 (SAB
104) when persuasive evidence of an arrangement exists, the price to the buyer
is fixed or determinable; delivery has occurred or services have been rendered
or the license period has begun; and collect ability is reasonably assured.
Revenue from the distribution of recordings under license and distribution
agreements is recognized as earned under the criteria established by Statement
of Financial Accounting Standard No 50. Revenue is generally recognized when the
Company receives an "accounting" of recordings sold with payment from the
licensee. In the event the Company has not received an "accounting" from the
licensee and if the Company has information related to the licensed use of
recordings that would result in the revenue being fixed and determinable, and
collection is reasonably assured, then revenue is recognized in the periods in
which the license revenue is earned. Minimum guarantees (advances) received from
licensees are recorded as deferred revenue and are amortized over the
performance period, which is generally the period covered by the agreement.
Note 3 - NOTES PAYABLE
Shareholder
During the quarter ended June 30, 2006, Jeffrey D. Martin, a major stockholder
loaned the Company $20,000. The note is payable on demand and bears interest at
the rate of 8% per annum. Interest on this note begins to accrue on July 1,
2006.
Affiliates
During the quarter ended June 30, 2006, the company borrowed $40,000 from Martin
Consultants, Inc. The note is payable on demand and bears interest at a rate of
8% per annum. Interest on this note begins to accrue on July 1, 2006. Martin
Consultants, Inc. is 100% owned by Jeffrey D. Martin, a major shareholder of the
company.
SKREEM ENTERTAINMENT CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Note 4 - GOING CONCERN
The accompanying consolidated condensed financial statements have been prepared
on a going concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The Company
sustained losses of $ 287,705 for the quarter ended June 30, 2006. The Company
had an accumulated deficit of $5,393,367 at June 30, 2006. These factors raise
substantial doubt about the ability of the Company to continue as a going
concern for a reasonable period of time. The Company is highly dependent on its
ability to continue to obtain investment capital and loans from a major
shareholder and an affiliate in order to fund the current and planned operating
levels. The financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or the amounts and
classification of liabilities that might be necessary should the Company be
unable to continue as a going concern. The Company's continuation as a going
concern is dependent upon its ability to continue receiving investment capital
from a shareholder and an affiliate and obtaining loans to complete promotion of
the Company's artists, continue production of music and achieve a level of
success that will enable it to sustain its operations. No assurance can be given
that the Company will be successful in these efforts.
Note 5 - PRODUCTION AGREEMENT
On June 13, 2006, the Company entered into an agreement with1171 Productions
(1171) for the purpose of creating interest in and securing meeting
opportunities of the "Star Maker" reality series. The Company shall pay a
commission of 5% of the net profits of the "Star Maker" series worldwide. In
addition, the Company agrees to use 1171 in the production of the series. The
Company has not recorded any transactions related to this agreement.
Note 6 - LICENSE AGREEMENT
During the quarter ended June 30, 2006, the Company entered into a 5 year
License Agreement with Zero Degrees Entertainment (Zero). The agreement grants
Zero certain exclusive rights to distribute and sell recordings of the artist
"3rd Wish" in France. The Company shall receive royalties of 17% to 20%
calculated on 100% net sales.
Note 7 - ADVERTISING AND PROMOTIONAL SERVICE AGREEMENT
On May 24, 2006, the Company entered into a one-year agreement with Hobson,
Bowerstock, & Associates, LLC (HLB) in which HLB will prepare and implement a
promotional campaign for the Company. In accordance with the agreement, the
Company shall pay HLB 500,000 shares of restricted 144 common stock and 500,000
shares of free trading common stock of the Company. During the quarter ended
June 30, 2006, the Company issued 250,000 shares of common stock and recorded
advertising expense of $250,000.
Note 8 - RELATED PARTY REVENUE
During the quarter ended June 30, 2006, there were unsold recordings returned to
the Company by Cheyenne Records. Am-Pac Investment (Am-Pac) purchased these
remaining recordings and the Company recorded this sale as related party
revenue. Am-Pac is owned by Jeffery Martin, a major shareholder of the Company.
Note 9 - SUBSEQUENT EVENT
On July 1, 2006, the Company entered into a 2 year Strategic Research and
Analysis Agreement with Sterling LLC ("Sterling"). The Company retains Sterling
to do research, market review and strategic analysis for the Company and to
provide review and planning services. The Company agrees to compensate Sterling
3,000 free trading shares per month for year one and 5,000 free trading shares
per month for year two, and additional incentives as described in the agreement.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Plan of Operation
The Company plans to continue operations by developing current acts into
successful music performing and recording acts. The Company currently is
actively promoting three acts, "3rd Wish", "Pat Moe" and "Willie Will". These
three acts will tour, perform, make public appearances, and continue to record
as opportunities are located. The Company is uncertain as to when these acts may
enter the U.S. market. As of June 30, 2006, none of the Company's acts has
received gold records for album sales.
The countries in which the Company is currently promoting its acts are as
follows:
Pat Moe 3rd Wish
-------- ----------
Germany, Switzerland, Austria Germany, Switzerland and Austria
UK, Eire, Australia,
New Zealand, France
Andorra, Monaco, Belgium, Russia, Azerbaijan,
Armenia, Georgia,
Moldova
Kazakstan, Krygyzstan, Tajikistan, Uzbekistan,
Turkmenistan,
Ukraine, Republic of Belarus, Lithuania, Latvia,
Estonia,
Israel, Portugal
The Company's cash balance is insufficient to satisfy the Company's cash
requirements for the next 12 months. The Company believes it can satisfy it's
cash requirements for 6 months with current cash and receivables. The Company is
dependent on continued receipt of revenues and will need outside funding from
the sale of shares or debt financing in order to continue operations beyond
that.
The Company does not anticipate acquiring any significant equipment during the
next twelve months.
The Company does not anticipate any significant changes in the number of
employees in the next twelve months. The Company has two full time employees.
The Company has entered into various license agreements that grant certain
exclusive rights to sell and distribute certain recordings by "3rd Wish".
Approximately 42% of the Company's revenue for the quarter ended June 30, 2006
came from the Cheyenne Records agreement. During the quarter ended June 30,
2006, there were unsold recordings returned to the Company by Cheyenne Records.
A related party purchased these remaining recordings which represent
approximately 55% of the total revenue. The remaining contracts represent,
individually, less than 1% of revenue.
The table below sets forth the parties, material terms, and territories covered
by these license agreements:
Party(Licensee) Territories
Cheyenne Records Germany, Switzerland and Austria
Our agreement with Cheyenne Records provide that Cheyenne will market and sell
3rd Wish's recordings for a period of 5 years beginning in March 2004. Cheyenne
will retain approximately 25% to 45% of revenue from distribution and sales and
the Company will pay the costs of production. The term of the contract is 5.5
years from May 2004.
Three 8 Music Limited UK, Eire
Our agreement with Three 8 provides that they will receive royalties from 3rd
Wish's first three singles released. Royalties are 19% on record sales and 50%
on third party licensing. The term of the contract is 15 years from October
2004.
Shock Records Pty Ltd Australia, New Zealand
Our agreement with Shock Records provides for royalties of 18-22% on album sales
and 50% to Shock for third party licensing. The term of the contract is
approximately 5 years from January 2005.
NRJ Music France, Andorra, Monaco, Belgium
Our agreement with NRJ provides for royalties of 13-22% for record sales. The
Company will bear the costs of production, the term is 5 years from January
2005.
Megaliner Records Russia, Azerbaijan, Armenia, Georgia, Moldova,
Kazakstan, Kyrgyzstan,
Tajikistan, Uzbekistan, Turkmenistan,
Ukraine, Republic of Belarus, Lithuania, Latvia, Estonia
Our agreement with Megaliner provides Megaliner with 20% of income from record
sales and 60% of third party licensing and broadcasting revenue. The term is
three years.
NMC Music Ltd. Israel
NMC will receive royalties of approximately 18% of all record sales. The
contract expires in December 2009.
Vidisco Portugal
Vidisco will receive a royalty of approximately 18% of all record sales. The
contract expires in January of 2010.
Zero Degrees France
Zero will receive a royalty of approximately 17-20% of record sales. The
contract Expires in 2011.
The Company plans to officially launch its new online video site Skreem.TV on
September 1st. It will provide music videos of top artists, unsigned artists,
and custom programming produced by the Company. Revenues will be generated by
advertising, pay to play videos, as well as music and video downloads.
Revenue is recognized in accordance with Staff Accounting Bulleting No. 104 (SAB
104) when persuasive evidence of an arrangement exists, the price to the buyer
is fixed or determinable; delivery had occurred or services have been rendered
or the license period has begun; and collect ability is reasonably assured.
Revenue from the distribution of recordings under license and distribution
agreements is recognized as earned under the criteria established by Statement
of Financial Accounting Standard No. 50. Revenue is generally recognized when
the Company receives an "accounting" of recordings sold with payment from the
licensee. In the event the Company has not received an "accounting" from the
licensee and if the Company has information related to the licensed use of
recordings that would result in the revenue being fixed and determinable, and
collection is reasonably assured, then revenue is recognized in the periods in
which the license revenue is earned. Minimum guarantees (advances) received from
licensees are recorded as deferred revenue and are amortized over the
performance period, which is generally the period covered by the agreement.
Results of Operations for the Three Months Ended June 30, 2006 as Compared to
the Three Months Ended June 30, 2005
Revenues - The Company recorded revenue of $66,695 and $22,759 for the three
months ended June 30, 2006 and June 30, 2005, respectively. The revenue consists
of earnings from Licensing agreements to distribute 3rd Wish's music and sales
of recordings to a related party.
Operating expenses - Operating expenses for the three months ended June 30, 2006
were $323,105, a decrease of $39,718 or 11% from $362,823 for the corresponding
period ended June 30, 2005. The decrease is primarily due to less tour expenses
and a decrease in travel and support for artists in Germany.
General and Administrative Expenses - General and administrative expenses
increased by $43,186 or 40.68% to $149,352 for the three months ended June 30,
2006 from $106,166 for the corresponding period ended June 30, 2005. This
increase is primarily attributable to an increase in salaries, delivery expense,
and other general and administrative expenses offset by a decrease in
professional fees.
Interest Expense - Interest expense decreased by $8,731 or 23.9% to $27,776 for
the three months ended June 30, 2006 from $36,507 for the corresponding period
of the prior year. This decrease is attributable to having less debt outstanding
during the three months ended June 30, 2006.
Liquidity and Capital Resources
As of June 30, 2006, the Company had cash of $7,475 and a deficit in working
capital of $2,010,597. This compares with cash of $62,383 and a deficit in
working capital of $1,852,361 as of March 31, 2006.
Cash used in operations decreased by $97,245 to $139,230 for the three months
ended June 30, 2006 from $236,475 for the corresponding period of the prior
year.
Cash provided by financing activities for the three months ended June 30, 2006
was $84,695 from the issuance of promissory notes and common stocks. This
compares with $199,000 of cash being provided from financing activities during
the three months ended June 30, 2005, all from the issuance of promissory notes.
Historically, the Company has been funded by the sale of its shares and loans
from its Shareholders. However, the Company's continuation as a going concern is
dependent upon its ability to continue receiving investment capital and
obtaining loans to complete promotion of the Company's artists, continue
production of music and achieve a level of success that will enable it to
sustain its operations. No assurance can be given that the Company will be
successful in these efforts.
ITEM 3. CONTROLS AND PROCEDURES
As of the end of the period covered by this report, we have evaluated the
effectiveness of the design and operation of our disclosure controls and
procedures under the supervision of and with the participation of our Chief
Executive Officer ("CEO") and our Chief Financial Officer ("CFO"). Based on this
evaluation, our management, including our CFO and CEO, concluded that our
disclosure controls and procedures were effective, and that there have been no
significant changes in our internal controls or in other factors that could
significantly affect internal controls subsequent to the evaluation.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEDINGS
None
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS
Number Description
------ -----------
10.1 Strategic Research & Analysis Agreement with Sterling LLC dated July 1,
2006
31.1 Certification of Chief Executive Officer of Skreem Entertainment
Corporation Required by Rule 13a-14(1) or Rule 15d-14(a) of the Securities
Exchange Act of 1934, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
31.2 Certification of Chief Financial Officer of Skreem Entertainment
Corporation Required by Rule 13a-14(1) or Rule 15d-14(a) of the Securities
Exchange Act of 1934, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
32.1 Certification of Chief Executive Officer of Skreem Entertainment
Corporation Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
and Section 1350 Of 18 U.S.C. 63
32.2 Certification of Chief Financial Officer of Skreem Entertainment
Corporation Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
and Section 1350 Of 18 U.S.C. 63
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.
SKREEM ENTERTAINMENT CORPORATION
Date: August 14, 2006 By: /s/ Charles Camorata
----------------------------
Charles Camorata
Principal Executive Officer
Date: August 14, 2006 By: /s/ Karen Pollino
----------------------------
Karen Pollino
Chief Financial Officer
STERLING LLC
STRATEGIC RESEARCH & ANALYSIS AGREEMENT
This Strategic Research & Analysis Agreement ("Agreement") is made and
entered into as of the 1st day of July, 2006 by and between Sterling LLC
("STERLING"), with its office at 2350 Temple Dr. Winter Park, FL 32789, and
Skreem Entertainment Corporation ("SKREEM"), with its principal executive office
at 11637 Orpington St. Orlando, FL, 32817.
WITNESSETH
WHEREAS, SKREEM has recently gone public and is interested in having market
research and analysis done on it's current market, music trends, possible
acquisitions and the development of SkreemTV.com;
WHEREAS, STERLING is engaged in the business of providing research, analysis,
special reports and strategic planning;
WHEREAS, SKREEM is desirous of retaining STERLING;
NOW, THEREFORE, in consideration of the mutual promises contained herein, the
parties hereto, intending to be legally bound hereby, agree as follows:-
1. Engagement
SKREEM hereby retains STERLING to do research, market review and strategic
analysis for Skreem Entertainment, and provide review and planning
services for Skreem.TV
2. Term
This Agreement shall commence on the date of the Exchange Agreement and
shall last for 24 months, cancelable by Skreem Entertainment with 60 days
notice.
3. Service
In consideration of the compensation as stated herein, STERLING shall
perform the following services for SKREEM:-
(a) Help with research and analysis for strategic planning so as to
arouse the interest of investors.
(b) Help in the strategy, writing and editing of press releases,
research and investor reports for SKREEM and/or its investor
relations firm.
(c) Assist in the planning and development of SkreemTV.com. One member
of the STERLING team will be included on the Skreem.TV "Board of
Advisors" when developed, and with appropriate card title on SKREM
approved projects.
(d) When requested, schedules permitting, STERLING will be available for
travel at SKREEM's request and expense to do competitive analysis ,
A&R work, and review and analysis of possible corporate acquisition
targets.
(e) Find, on a best effort basis, possible acquisitions and or new acts
for SKREEM. If STERLING is successful in this endeavor, STERLING
will receive 5% of the acquisition agreement total, in SKRM free
trading shares or, shares with registration rights. If the
acquisition is later spun-off, STERLING will receive 10% of the
issued and outstanding shares of the spin-off SKREEM, this
compensation is understood to be in effect even if the agreement is
cancelled at a later date.
4. Compensation
As consideration for the services set forth in clause 3 of this Agreement,
the SKREEM hereby agrees to give to STERLING compensation which shall be
computed as follows:
(1) Year One--3,000 free trading shares per month, paid quarterly in
advance.
(2) Year Two--5,000 free trading shares per month, paid quarterly in
advance.
(3) Advertising: 10% for unsigned bands who advertise themselves on
Skreem.TV. If STERLING has pre-approval to hire "interns" to recruit
bands and other talent, then an override of 2.5% of advertising sales
generated will be paid to STERLING. If STERLING is successful in
signing non-band advertisers or sponsors for Skreem.TV and/or any
other SKREEM marketing endeavor, STERLING will receive 20% of the
revenues.
(4) Spin-off Bonus: When Skreem.TV is spun off from SKREEM, STERLING will
receive 5% of the spin-off company's issued and outstanding shares
with registration rights.
5. Expenses
SKREEM shall reimburse STERLING for any pre-approved requested travel,
"new media community marketing/networking campaigns" requiring
pre-approved software, phone room or direct response marketers, special
order research materials, out-of-pocket graphic materials, and any
printing beyond normal copying. It also is understood that neither
STERLING, nor employees and agents of STERLING, shall be responsible for
any fees or commissions payable to any finder or to any other financial or
other advisor retained by SKREEM.
6. Liability of STERLING
SKREEM assumes and claims all responsibility and liability for the content
of information disseminated on behalf of SKREEM, which has been approved by
SKREEM.
7. Competitors
SKREEM recognizes that STERLING now renders or may in the future render
consulting services to other companies which may or may not conduct
business and activities similar to SKREEM. STERLING shall not be required
to devote its full time and attention to the performance of its duties
under this agreement, but shall devote only so much of its time and
attention as shall be reasonably necessary for such purposes.
8. Indemnification
SKREEM will indemnify and defend STERLING against all claims, proceedings,
suits or other matters that might be asserted against STERLING by reason
of this letter Agreement and SKREEM will pay STERLING's reasonable
attorney's fees and expenses in connection with such matters; provided
that STERLING acts within the scope of this Agreement and is not
negligent.
9. Confidential Information
STERLING acknowledges that it will gain knowledge of information of
substantial value to SKREEM regarding SKREEM's business which is not
generally known and which gives SKREEM an advantage over competitors who
do not know, or use, such information, including, but not limited to,
know-how, trade secrets techniques, designs sales and customer
information, and business and financial information relating to the
business, products services practices or techniques of SKREEM's plans for
future products or developments ("Confidential Information"). STERLING
agrees to, at all times, regard and preserve such information as
confidential. STERLING further agrees that such Confidential Information
will not be disclosed by it to any person or entity without the prior
written consent of SKREEM.
10. Notices
All notices, requests, demands or other communications required or
authorized or contemplated to be given by this Agreement shall be in
writing and shall be deemed to have been duly given if hand delivered,
sent by commercial overnight courier or sent by certified or registered
mail. A facsimile transmission, when received, shall be considered
delivery of written notice.
11. Governing Law
This Agreement shall be governed by the laws of Florida.
12. Entire agreement
The provisions of this letter Agreement set forth the entire binding
agreement between the parties and supersede all prior written and oral
communications, discussions, and negotiations between the parties
concerning the proposed transaction. The terms of this letter agreement
may be amended only in writing and when signed by both parties.
13. Binding effect
This Agreement shall be binding upon the parties hereto and their
respective heirs, successors and assigns.
14. Arbitration
Both parties agree to settle any and all differences through The Orange
County arbitration services.
Signed by:
For and on Behalf of Skreem Entertainment Corporation
/s/
For and on Behalf of Sterling LLC
/s/ Tyler T. Tedrow
Tyler T. Tedrow
President
Exhibit31.1
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Charles Camorata, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Skreem
Entertainment Corporation
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Dated: August 14, 2006
By: /s/ Charles Camorata
Charles Camorata
Chief Executive Officer
Exhibit31.2
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Karen Pollino, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Skreem
Entertainment Corporation
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Dated: August 14, 2006
By: /s/ Karen Pollino
Karen Pollino
Chief Financial Officer
Exhibit 32.1
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
--------------------------------------------------------------------------------
CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS
ADOPTED PURSUANT TO SECTION 906 OF TEHE SARBANES-OXLEY ACT OF 2002
I, Charles Camorata, certify, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly
Report of Skreem Entertainment Corporation on Form 10-QSB for the quarterly
period ended June 30, 2006 fully complies with the requirements of Section 13(a)
or 15(d) of the Securities Exchange Act of 1934 and that information contained
in such Form 10-QSB fairly presents in all material respects the financial
condition and results of operations of Skreem Entertainment Corporation
By: /s/ Charles Camorata
Name: Charles Camorata
Title: Chief Executive Officer
August 14, 2006
Exhibit 32.2
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
--------------------------------------------------------------------------------
CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS
ADOPTED PURSUANT TO SECTION 906 OF TEHE SARBANES-OXLEY ACT OF 2002
I, Karen Pollino, certify, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly
Report of Skreem Entertainment Corporation on Form 10-QSB for the quarterly
period ended June 30, 2006 fully complies with the requirements of Section 13(a)
or 15(d) of the Securities Exchange Act of 1934 and that information contained
in such Form 10-QSB fairly presents in all material respects the financial
condition and results of operations of Skreem Entertainment Corporation
----------------------------
By: /s/ Karen Pollino
Name: Karen Pollino
Title: Chief Financial Officer
August 14, 2006