-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NWtf4cjhtebXSgAl56z6C9Yq/Jrs3pUlWF86tgI/FzSgsZpmy4an91nlqSUwRkoJ 2ZI4yq0Frz3eFrPs+qcwVg== 0001144204-07-061564.txt : 20071114 0001144204-07-061564.hdr.sgml : 20071114 20071114163349 ACCESSION NUMBER: 0001144204-07-061564 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20070930 FILED AS OF DATE: 20071114 DATE AS OF CHANGE: 20071114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WINSONIC DIGITAL MEDIA GROUP LTD CENTRAL INDEX KEY: 0001120411 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 522236253 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-32231 FILM NUMBER: 071245436 BUSINESS ADDRESS: STREET 1: 10120 S. EASTERN AVENUE STREET 2: SUITE 200 CITY: LAS VEGAS STATE: NV ZIP: 89052 BUSINESS PHONE: (702) 492-1282 MAIL ADDRESS: STREET 1: 10120 S. EASTERN AVENUE STREET 2: SUITE 200 CITY: LAS VEGAS STATE: NV ZIP: 89052 FORMER COMPANY: FORMER CONFORMED NAME: WINSONIC DITIGAL MEDIA GROUP LTD DATE OF NAME CHANGE: 20041129 FORMER COMPANY: FORMER CONFORMED NAME: MEDIA & ENTERTAINMENT COM INC DATE OF NAME CHANGE: 20001228 10QSB 1 v093665_10qsb.htm Unassociated Document
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-QSB

(Mark One) 
 
x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
for the quarter ended September 30, 2007
 
¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
for the transition period from _______ to _______
 
Commission file number 000-32231 
  
WINSONIC DIGITAL MEDIA GROUP, LTD.
(Name of small business issuer in its charter)

Nevada
 
52-2236253
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)

101 Marietta Street, Suite 2600
 
 
Atlanta, Georgia
(Address of principal executive offices)
 
30303
(Zip Code)
 
Issuer’s telephone number (404) 230-5705

(not applicable)
(former name, former address, if changed since last report)

Check whether the issuer: (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 past 90 days.
Yes x No ¨   

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x  

The issuer had 68,828,844 shares of common stock outstanding as of November 13, 2007.

Transitional Small Business Disclosure Format (Check one): Yes ¨ No x  
 
 

Quarterly Report on Form 10-QSB
Quarter Ended September 30, 2007

Table of Contents 
 
 
Page
 
 
PART I FINANCIAL INFORMATION
 
Item 1. Consolidated Financial Statements:
 
Consolidated Balance Sheets, September 30, 2007 (Unaudited) and December 31, 2006
2
Consolidated Statements of Operations, for the three months and nine months endedSeptember 30, 2007 and 2006 and from inception (September 10, 2002) to September 30, 2007 (Unaudited)
3
Consolidated Statements of Cash Flows, for the nine months ended September 30, 2007 and 2006 and from inception (September 10, 2002) to September 30, 2007 (Unaudited)
4
Statement of Stockholders’ Deficit (Unaudited)
5
Notes to the Financial Statements (Unaudited)
9
Item 2. Management’s Discussion and Analysis
30
Item 3. Controls and Procedures
37
 
 
PART II OTHER INFORMATION
 
 Item 1. Legal Proceedings
38
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
38
 Item 3. Defaults Upon Senior Securities
38
 Item 6. Exhibits
38
 
 
SIGNATURES
39
 
 
EXHIBIT INDEX
 


PART I - FINANCIAL INFORMATION

 
Item 1. Financial Statements.

WINSONIC DIGITAL MEDIA GROUP, LTD.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 2007 (UNAUDITED) & DECEMBER 31, 2006 (AUDITED)
 
     
Unaudited 
9/30/2007
   
Audited 
12/31/2006
 
ASSETS
 
          
ASSETS:
          
 
          
Cash
  
$
415
  
$
3,506
  
Accounts receivable
    
374,699
    
464,612
  
Prepaid expense
    
127,601
    
67,667
  
Inventory
    
6,743
    
5,387
  
Construction in process
    
210,580
    
254,640
  
 Total current assets
    
720,038
    
795,812
  
 
              
Fixed assets, net of accumulated depreciation of $868,871 and $784,318, respectively
    
777,700
    
783,115
  
Goodwill
    
984,291
    
984,291
  
Other assets
    
85,816
    
25,000
  
TOTAL ASSETS
  
$
2,567,845
  
$
2,588,218
  
 
          
LIABILITIES AND STOCKHOLDERS' DEFICIT
               
LIABILITIES:
          
 
          
Current liabilities:
          
Accounts payable and accrued expenses
  
$
3,958,596
  
$
2,859,371
  
Bank overdraft
    
7,829
    
-
  
Billings on construction in process
    
398,316
    
489,261
  
Accrued payroll and related taxes
    
4,395,449
    
2,138,152
  
Legal settlement liabilities
    
1,877,000
    
775,000
  
Due to other related parties
    
48,570
    
-
  
Loans payable
    
354,384
    
347,743
  
Loans payable -related party
    
542,279
    
414,555
  
Derivative liability related to convertible debentures
    
32,411
    
339,450
  
Warrant liability related to convertible debentures
    
28,122
    
300,420
  
Convertible debentures - 2004/2005 Agreements
    
35,025
    
257,469
  
Convertible debentures, net of debt discount totaling $355,200 and $794,784, respectively
    
1,074,504
    
507,524
  
Current portion of long term liabilities
    
80,950
    
90,197
  
 Total current liabilities
    
12,833,435
    
8,519,142
  
               
Long term debt
    
-
    
44,822
  
 
              
TOTAL LIABILITIES
    
12,833,435
    
8,563,964
  
 
            
Stockholders' deficit:
            
Preferred stock, $0.001 par value, 20,000,000 shares authorized, no shares issued and outstanding at September 30, 2007 and December 31, 2006, respectively.
    
-
    
-
  
Common stock, $0.001 par value, 200,000,000 shares authorized, 66,312,433 and 49,578,057 shares issued and outstanding at September 30, 2007 and December 31, 2006, respectively.
    
66,312
    
49,578
  
Additional paid-in capital
    
23,425,377
    
13,609,264
  
Common stock payable
   
358,724
    
1,107,426
  
Common stock advance for future services
    
-
    
(48,175
)
Accumulated deficit during development stage
    
(34,116,003
)
  
(20,693,839
)
 Total stockholders' deficit
    
(10,265,590
)
  
(5,975,746
)
 TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
  
$
2,567,845
  
$
2,588,218
  
 
The accompanying notes to the financial statements should be
read in conjunction with these Balance Sheets.

2

WINSONIC DIGITAL MEDIA GROUP, LTD.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS & NINE MONTHS ENDED SEPTEMBER 30, 2007 & 2006
AND FROM INCEPTION (September 10, 2002) TO SEPTEMBER 30, 2007 (UNAUDITED)
 
   
 For the three months ended
September 30,
 
 For the nine months ended
September, 30 
  
 Inception (September 10, 2002) to September
  
   
 2007
 
 2006
 
 2007
 
 2006
 
30, 2007
  
REVENUE
 
$
233,181
  
$
310,364
 
$
1,368,865
  
$
547,140
 
$
2,186,171
  
 
                           
COST OF GOODS SOLD
   
824,780
    
284,993
   
1,760,235
    
440,942
   
3,408,134
  
 
                           
GROSS PROFIT
   
(591,599
)
  
25,371
   
(391,370
)
  
106,198
   
(1,221,963
)
 
                           
EXPENSES:
                           
Selling, general and administrative
   
935,122
    
477,531
   
2,041,920
    
1,190,788
   
7,952,072
  
Payroll expense
    
1,094,482
    
984,366
    
4,539,179
    
2,854,260
    
10,507,433
  
Consulting services - related party
   
20,930
    
-
    
20,930
    
-
    
2,444,227
  
Depreciation and amortization expense
   
13,301
    
35,176
   
84,554
    
107,170
   
1,142,851
  
Total expenses  
   
2,063,835
    
1,497,073
   
6,686,583
    
4,152,218
   
22,046,583
  
 
                           
OPERATING LOSS
   
(2,655,434
)
  
(1,471,702
)
  
(7,077,953
)
  
(4,046,020
)
  
(23,268,546
)
 
                           
OTHER INCOME/(EXPENSES):
                           
Interest expense
   
(3,240,611
)
  
(417,687
)
  
(5,646,865
)
  
(844,054
)
  
(8,786,048
)
Interest expense - related party
    
(41,824
)
  
(27,021
)
  
(116,683
)
  
(66,391
)
  
(410,848
)
Legal settlement costs
   
(1,100,000
)
  
13,500
   
(1,160,000
)
  
2,000
   
(2,378,000
)
Unrealized gain (loss) on adjustments of derivative and warrant liability to fair value of underlying securities
   
345,454
   
(520,006
)
  
579,337
    
(814,709
)
  
606,765
  
Interest income
   
-
    
29
   
-
    
321
   
730
  
Other income
   
-
    
(1,033
)
  
-
    
28
   
119,944
  
Total other income/(expenses)  
   
(4,036,981
)
  
(952,218
)
  
(6,344,211
)
  
(1,722,805
)
  
(10,847,457
)
 
                           
NNET LOSS BEFORE PROVISION FOR INCOME TAXES
   
(6,692,415
)
  
(2,423,920
)
  
(13,422,164
)
  
(5,768,825
)
  
(34,116,003
)
 
                           
PROVISION FOR INCOME TAXES
   
-
    
-
   
-
    
-
   
-
  
 
                           
NET LOSS
 
$
(6,692,415
)
$
(2,423,920
)
$
(13,422,164
)
$
(5,768,825
)
$
(34,116,003
)
 
                     
Basic weighted average number of common shares outstanding
   
56,053,950
    
46,539,328
   
51,787,515
    
43,218,180
       
 
                         
Net loss per basic and diluted common share
 
$
(0.12
)
$
(0.05
)
$
(0.26
)
$
(0.13
)
    
 
The accompanying notes to the financial statements should be
read in conjunction with these Statements of Operations.

3

WINSONIC DIGITAL MEDIA GROUP, LTD.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2007 & 2006
AND FROM INCEPTION (September 10, 2002) TO SEPTEMBER 30, 2007 (UNAUDITED)
 
     
For the nine months ended
September 30,
    
September 10, 2002 
(Inception) to
 
     
2007
    
2006
    
September 30, 2007
  
CASH FLOWS FROM OPERATING ACTIVITIES:
                   
Net loss
  
$
(13,422,164
 )
$
(5,768,825
)
$
(34,116,003
)
Adjustments to reconcile net loss to net cash used in operating activities:
                   
Depreciation
   
84,554
    
107,170
    
1,142,851
  
Accretion of principal and interest related to convertible debentures
   
1,612,939
    
(756,052
)
  
3,530,874
  
Unrealized gain on adjustment of derivative and warrant liability to fair value of underlying securities
   
(579,337
)
  
814,709
    
(606,765
)
Stock based compensation
   
1,626,001
    
1,810,819
    
6,022,635
  
Operating expenses paid with stock, options and warrants
    
-
    
-
    
1,036,822
  
Operating expenses paid by note payable
    
-
    
-
    
60,000
  
Interest expense paid with stock
    
-
    
-
    
185,621
  
Financing costs paid with stock and stock payable
    
3,647,523
    
-
    
3,647,523
  
Financing costs related to conversion of notes and related party notes to stock
    
285,424
    
-
    
285,424
  
Consulting services paid with stock and stock payable
    
165,850
    
-
    
165,850
  
Amortization of common stock advances for future services
    
48,175
    
-
    
48,175
  
Interest accrued and added to notes
    
96,719
    
-
    
276,280
  
Forgiveness of accrued interest - Digital Services International, Inc.
    
-
    
-
    
152,592
  
Other non-cash financing costs
    
29,732
    
-
    
29,732
  
Change in operating assets and liabilities:
                   
Decrease (increase) in accounts receivable
    
89,913
    
(153,586
)
  
(183,916
)
Increase in prepaid expenses
    
(59,934
)
  
(16,101
)
  
(125,281
)
Increase in inventory
    
(1,356
)
  
-
    
(1,356
)
Decrease (increase) in construction in process
    
44,060
    
(74,687
)
  
(180,616
)
Increase in other assets
    
(60,816
)
  
(27,843
)
  
(85,816
)
Increase in advances to related companies
    
48,570
    
-
    
48,570
  
Increase in accounts payable and accrued expenses
   
1,099,225
    
391,867
    
4,171,912
  
(Decrease) increase in billings on construction in process
    
(90,945
)
  
86,986
    
255,995
  
Increase in accrued payroll and related taxes
   
2,257,297
    
1,257,664
    
5,447,805
  
Increase in legal settlement liabilities
    
1,160,000
    
5,000
    
2,385,000
  
Net cash used in operating activities
   
(1,918,570
)
  
(2,322,879
)
  
(6,406,092
)
 
                   
CASH FLOWS FROM INVESTING ACTIVITIES:
                   
Cash acquired through business acquisitions  
   
-
    
20,511
    
16,670
  
Purchase of fixed assets
   
(140,269
)
  
(180,691
)
  
(1,588,733
)
Net cash used in investing activities
   
(140,269
)
  
(160,180
)
  
(1,572,063
)
 
                   
CASH FLOWS FROM FINANCING ACTIVITIES:
                   
Increase (decrease) in bank overdraft
   
7,829
    
(8,909
)
  
7,829
  
Proceeds from loans payable
   
40,000
    
69,666
    
475,251
  
Payment on loans payable
    
-
    
-
    
(23,335
)
Proceeds from loan payable - related party
   
395,893
    
20,082
    
1,334,604
  
Payment on note payable - related party
   
(37,000
)
  
(120,830
)
  
(314,970
)
Payment on convertible debentures
    
(39,448
)
        
(39,448
)
Proceeds from convertible debentures
   
1,688,474
    
1,233,950
    
4,538,539
  
Proceeds from common stock issued
   
-
    
1,289,100
    
2,000,100
  
Net cash provided by financing activities
   
2,055,748
    
2,483,059
    
7,978,570
  
 
                   
NET (DECREASE) INCREASE IN CASH
   
(3,091
)
  
-
    
415
  
 
                   
CASH, BEGINNING OF PERIOD
   
3,506
    
-
   
-
  
 
                   
CASH, END OF PERIOD
 
$
415
  
$
-
  
$
415
  
 
                   
SUPPLEMENTARY INFORMATION:
                   
Interest paid
 
$
4,448
    
47,695
 
$
51,572
  
Income taxes paid
 
$
-
  
$
-
  
$
-
  
NON-CASH ACTIVITIES:
                    
Issuance of common stock for common stock payable
  
$
-
  
$
19,867
  
$
820,000
  
Forgiveness of salary payable to officer
 
$
-
  
$
399,919
  
$
702,644
  
Forgiveness of payroll tax for officer
 
$
-
  
$
-
  
$
20,655
  
Issuance of common stock as deposit on lease obligation
 
$
-
  
$
-
  
$
250,000
  
Issuance of common stock and stock payable as payment for subsidiaries acquired
 
$
-
  
$
168,902
  
$
939,528
  
Issuance of common stock as payment on loans payable and loan payable - related party
 
$
585,984
  
$
-
  
$
896,984
  
Issuance of common stock and warrants for salary payable
  
$
-
  
$
314,823
  
$
515,679
  
Issuance of common stock upon conversion of debentures
 
$
1,827,115
  
$
889,709
  
$
3,468,299
  
Adjustment to paid in capital for accumulated depreciation
 
$
-
  
$
-
  
$
281,481
  
Issuance of common stock for legal settlement
 
$
58,000
  
$
450,000
  
$
508,000
  
 
The accompanying notes to financial statements should be
read in conjunction with these Statements of Cash Flows.

4

WINSONIC DIGITAL MEDIA GROUP, LTD.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' DEFICIT
(UNAUDITED)
 
 
  
 
  
 
  
 
  
 
  
 
  
 
  
Common 
  
Accumulated
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
Stock
  
Deficit
  
 
  
 
  
 
  
 
  
 
  
 
  
Additional
  
Common
 
Advance for
  
During
  
Total
  
 
  
Preferred Stock
  
Common Stock
  
Paid-in
  
Stock
  
Future
  
Development
  
Stockholders'
  
 
  
Shares
  
Amount
  
Shares
  
Amount
  
Capital
  
Payable
  
Services
  
Stage
  
Deficit
  
Balance, September 10, 2002 (Inception) - No Par Stock
    
10,000,000
 
$
-
    
10,000,000
 
$
-
  
$
-
  
$
-
  
$
-
  
$
-
  
$
-
  
 
                                                      
Reverse Merger - Reacquisition of all outstanding shares of Winsonic Acquisition Sub, Inc. - No Par Stock (Recasted to inception)
    
(10,000,000
)
  
-
   
(10,000,000
)
  
-
   
-
    
-
    
-
    
-
    
-
 
 
                                                      
Issuance of common stock to founder for services
    
-
    
-
   
6,004,200
    
6,004
   
-
   
-
    
-
    
-
    
6,004
 
 
                                                      
Balance, September 10, 2002 (Recasted)
    
-
 
$
-
    
6,004,200
 
$
6,004
 
$
-
 
$
-
 
$
-
 
$
-
  
$
6,004
 
 
                                                      
Issuance of stock warrants (December 26, 2002)
    
-
   
-
   
-
   
-
   
-
   
990,600
   
-
   
-
   
990,600
 
 
                                                      
Net loss
    
-
   
-
   
-
   
-
   
-
   
-
   
-
   
(647,417
)
  
(647,417
)
 
                                                      
Balance, December 31, 2002 (Restated)
    
-
 
$
-
    
6,004,200
 
$
6,004
 
$
-
 
$
990,600
 
$
-
 
$
(647,417
)
$
349,187
 
 
                                                      
Issuance of stock warrants
    
-
   
-
   
-
   
-
   
-
   
1,009,500
   
-
   
-
   
1,009,500
 
 
                                                      
Net loss
    
-
   
-
   
-
   
-
   
-
   
-
   
-
   
(1,905,884
)
  
(1,905,884
)
 
                                                      
Balance, December 31, 2003 (Restated)
    
-
 
$
-
    
6,004,200
 
$
6,004
 
$
-
 
$
2,000,100
 
$
-
 
$
(2,553,301
)
$
(547,197
)
 
                                                      
Issuance of common stock for services, $0.75 average price per share
    
-
   
-
   
1,980,946
   
1,981
   
1,488,328
   
-
   
-
   
-
   
1,490,309
 
 
                                                      
Issuance of common stock in satisfaction of debts of $331,000 and deemed interest of $242,500
    
-
   
-
   
758,000
   
758
   
572,742
   
-
   
-
   
-
   
573,500
 
 
                                                      
Issuance of common stock, $1.00 price per share
    
-
   
-
   
921,600
   
922
   
920,678
   
(921,600
)
  
-
    
-
   
-
 
 
                                                      
Conversion of common stock payable to loan payable
    
-
   
-
   
-
   
-
   
60,000
   
(258,500
)
  
-
    
-
   
(198,500
)
 
                                      
Issuance of common stock related to reverse-merger
    
-
   
-
   
23,956,138
   
23,956
   
(123,487
)
  
-
   
-
   
-
   
(99,531
)
 
                                                      
Net loss
    
-
   
-
   
-
   
-
   
-
   
-
   
-
   
(5,790,794
)
  
(5,790,794
)
 
                                                        
Balance, December 31, 2004 (Restated)
    
-
 
$
-
    
33,620,884
 
$
33,621
  
$
2,918,261
  
$
820,000
  
$
-
  
$
(8,344,095
)
$
(4,572,213
)
 
5
 
WINSONIC DIGITAL MEDIA GROUP, LTD.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' DEFICIT
(UNAUDITED)
 
 
  
 
  
 
  
 
  
 
  
 
  
 
  
Common 
  
Accumulated
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
Stock
  
Deficit
  
 
  
 
  
 
  
 
  
 
  
 
  
Additional
  
Common
 
Advance for
  
During
  
Total
  
 
  
Preferred Stock
  
Common Stock
  
Paid-in
  
Stock
  
Future
  
Development
  
Stockholders'
  
 
  
Shares
  
Amount
  
Shares
  
Amount
  
Capital
  
Payable
  
Services
  
Stage
  
Deficit
  
Issuance of common stock for services, $1.30 average price per share
    
-
    
-
    
94,615
   
95
   
122,905
   
-
    
-
    
-
    
123,000
 
 
                                      
Issuance of common stock for services, $0.82 average price per share
    
-
    
-
    
91,463
   
91
   
74,909
   
-
    
-
    
-
    
75,000
 
 
                                      
Issuance of common stock for services, $0.68 average price per share
    
-
    
-
    
66,667
   
67
   
45,267
   
-
    
-
    
-
    
45,334
 
 
                                      
Issuance of common stock for equity investment in NATVN
    
-
    
-
    
1,670,000
   
1,670
   
(1,670
)
  
-
    
-
    
-
    
-
 
 
                                      
Issuance of common stock to founder to relieve related party note payable due him, at $0.33 average price per share
    
-
    
-
    
700,000
   
700
   
230,300
   
-
    
-
    
-
    
231,000
 
 
                                      
Issuance of common stock to founder for services, $0.33 average price per share
    
-
    
-
    
500,000
   
500
   
164,500
   
-
    
-
    
-
    
165,000
 
 
                                      
Issuance of common stock for services, $0.70 average price per share
    
-
    
-
    
900,000
   
900
   
629,100
   
-
    
-
    
-
    
630,000
 
 
                                      
Issuance of common stock for services, $0.48 average price per share
    
-
    
-
    
225,000
   
225
   
107,775
   
-
    
-
    
-
    
108,000
 
 
                                      
Issuance of common stock in satisfaction of convertible debentures debts of $118,000, at $0.20 average price per share
    
-
    
-
    
590,000
   
590
   
117,410
   
-
    
-
    
-
    
118,000
 
 
                                      
Issuance of common stock as lease deposit, $0.27 average price per share
    
-
    
-
    
925,927
   
926
   
249,074
   
(250,000
)
  
-
    
-
    
-
 
 
                                      
Issuance of common stock for common stock payable, $1.00 average price per share
    
-
    
-
    
820,000
   
820
   
819,180
   
(820,000
)
  
-
    
-
    
-
 
 
                                      
Return of pledged assets, reversal of accumulated depreciation, and forgiveness of debt - related party
    
-
    
-
    
-
    
-
    
281,481
   
-
    
-
    
-
    
281,481
 
 
                                      
Forgiveness of interest expense - related party
    
-
    
-
    
-
    
-
    
152,592
   
-
    
-
    
-
    
152,592
 
 
                                      
Vested common stock award for officer
    
-
    
-
    
-
    
-
    
185,000
   
-
    
-
    
-
    
185,000
 
 
                                      
Common stock payable to officer for separation agreement, $0.33 average price per share
    
-
    
-
    
-
    
-
    
-
   
270,000
   
-
    
-
    
270,000
 
 
                                      
Record forgiveness of accrued salary for officer per separation agreement
    
-
    
-
    
-
    
-
    
270,000
   
-
    
-
    
-
    
270,000
 
 
                                      
Record adjustment for accrued payroll taxes for officer per separation agreement
    
-
    
-
    
-
    
-
    
20,655
   
-
    
-
    
-
    
20,655
 
 
                                      
Vested stock options granted to officer for separation agreement
    
-
    
-
    
-
        
131,068
   
-
   
-
   
-
    
131,068
 
 
                                      
Net loss
    
-
   
-
   
-
   
-
   
-
   
-
   
-
   
(4,105,613
)
  
(4,105,613
)
 
                                      
Balance, December 31, 2005
    
-
 
$
-
    
40,204,556
 
$
40,205
  
$
6,517,807
  
$
20,000
  
$
-
  
$
(12,449,708
)
$
(5,871,696
)
 
6
 
WINSONIC DIGITAL MEDIA GROUP, LTD.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' DEFICIT
(UNAUDITED)

 
  
 
  
 
  
 
  
 
  
 
  
 
  
Common 
  
Accumulated
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
Stock
  
Deficit
  
 
  
 
  
 
  
 
  
 
  
 
  
Additional
  
Common
 
Advance for
  
During
  
Total
  
 
  
Preferred Stock
  
Common Stock
  
Paid-in
  
Stock
  
Future
  
Development
  
Stockholders'
  
 
  
Shares
  
Amount
  
Shares
  
Amount
  
Capital
  
Payable
  
Services
  
Stage
  
Deficit
  
Issuance of common stock in accordance with mutual general release and settlement agreement at $0.50 average price per share
    
-
        
-
        
900,000
    
900
   
449,100
    
-
   
-
   
-
    
450,000
 
 
                                                              
Issuance of common stock in conversion of shareholder note payable, 0.20 per share
   
-
        
-
        
3,184,899
    
3,185
    
633,795
    
-
   
-
   
-
    
636,980
  
 
                                                            
Shares issued to employee upon exercise of warrant at $0.01 per share
   
-
        
-
        
500,000
   
500
   
4,500
   
-
   
-
   
-
    
5,000
 
 
                                                            
Issuance of stock in acquisition of subsidiary
    
-
        
-
        
411,956
    
412
    
168,490
    
-
   
-
   
-
    
168,902
 
 
                                                            
Issuance of stock for services to employees
    
-
        
-
        
750,000
    
750
   
299,250
    
-
   
-
   
-
    
300,000
 
 
                                                            
Issuance of common stock subject to conversion of option for services at $0.39 average price per share
    
-
        
-
        
82,051
    
82
    
31,918
    
-
   
-
   
-
    
32,000
  
 
                                                            
Incentive stock options for employees
    
-
        
-
        
-
    
-
    
1,167,419
    
-
   
-
   
-
    
1,167,419
  
 
                                                            
Discount allocated to warrant on convertible debt
    
-
        
-
        
-
    
-
    
1,248,688
    
-
   
-
   
-
    
1,248,688
 
 
                                                            
Initial fair value of embedded derivative related to convertible debt
    
-
        
-
        
-
    
-
    
605,479
    
-
   
-
   
-
    
605,479
 
 
                                              
Fair market value of options to purchase shares of common stock at $0.01 to $0.53 per share, issued to consultants for financial consulting services
    
-
       
-
       
-
   
-
   
197,847
    
-
    
-
    
-
    
197,847
  
 
                                                            
To record forgiveness of accrued salary for officer
    
-
        
-
        
-
    
-
   
399,919
   
-
   
-
   
-
    
399,919
 
 
                                                          
Issuance of stock to shareholder in repayment of funds loaned to Company at $0.53 per share
    
-
        
-
        
489,850
    
490
    
259,129
   
-
   
-
   
-
    
259,619
  
 
                                                            
To record forgiveness of debt by related party
   
-
        
-
        
-
    
-
    
6,000
   
-
   
-
   
-
    
6,000
  
 
                                                            
Issuance of shares upon exercise of convertible notes at $0.40 per share
    
-
        
-
        
2,153,010
   
2,153
    
859,051
   
-
   
-
   
-
    
861,204
 
 
                                                            
Issuance of common stock subject to conversion of option for services at $0.65 per share
    
-
        
-
        
89,231
    
89
    
57,911
    
-
   
-
   
-
    
58,000
  
 
                                                            
Fair market value of shares issued to financial consultant for services at fair market value ranging from $0.01 to $0.53 per share
    
-
        
-
        
410,000
    
410
    
160,940
    
-
   
(42,875
)
  
-
    
118,475
  
 
                                              
Shares issued upon exercise of warrant by consultant at $0.01 per share
    
-
       
-
       
300,000
   
300
    
2,700
   
-
   
-
   
-
    
3,000
  
 
                                              
Shares issued as repayment of loans valued at $0.40 per share
    
-
       
-
       
62,504
   
62
   
24,940
    
-
   
-
   
-
    
25,002
  
 
                                              
Discount of beneficial conversion feature on convertible notes
    
-
       
-
       
-
   
-
   
97,475
    
-
   
-
   
-
    
97,475
  
 
                                              
Forgiveness of salary by related party
    
-
       
-
       
-
   
-
   
32,725
    
-
   
-
   
-
   
32,725
  
 
                                              
Fair market value of warrants issued to employees for services
    
-
       
-
       
-
   
-