SECURITIES AND EXCHANGE COMMISSION FORM 10KSB Annual and transition reports of small business issuers [Section 13 or 15(d), not S-B Item 405] Filing Date: 2000-09-13 | Period of Report: 2000-05-31 SEC Accession No. 0000912057-00-041260 (HTML Version on secdatabase.com) FILER FALCON ENTERTAINMENT CORP Mailing Address Business Address 71 GREAT PASTURE ROAD 71 GREAT PASTURE ROAD CIK:1089046| State of Incorp.:DE | Fiscal Year End: 0531 REDDING CT 06896 REDDING CT 06896 Type: 10KSB | Act: 34 | File No.: 000-26443 | Film No.: 722471 2039380737 SIC: 4833 Television broadcasting stations Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-KSB (Mark One) |X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For fiscal year ended MAY 31, 2000 ---------------------------------------------------------- or |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ----------------- ------------------------------ Commission file number ---------------------------------------------------------- FALCON ENTERTAINMENT CORP. -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) <TABLE> <CAPTION> <S> <C> DELAWARE 22-281-1783 ------------------------------------------------- -------------------------------- State or other jurisdiction of (I.R.S. Employer incorporation or organization Identification No.) </TABLE> <TABLE> <CAPTION> <S> <C> 675 THIRD AVENUE, 12TH FLOOR NEW YORK, NEW YORK 10017 ----------------------------------------------------------------------------------------------------------- ----------------------- (Address of principal executive offices) (Zip Code) </TABLE> Registrant's telephone number, including area code (212) 557-5557 ----------------------------------------------------- Securities registered pursuant to Section 12(b) of the Act: <TABLE> <CAPTION> <S> <C> Title of each class Name of each exchange on which registered --------------------------------------------------------------------- ------------------------------------------------------------- None None </TABLE> Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.00005 per share ------------------------------------------------------------------------------- (Title of Class) 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 the past 90 days. |X| Yes |_| No Check if 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. | | Issuer's revenues for the fiscal year ended May 31, 2000 were $76,549. Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document The aggregate market value of the voting and non-voting common equity held by non-affiliates of the issuer, based upon the closing price of such common equity on August 31, 2000, as reported on the OTC Bulletin Board, was approximately $28,287,000 (affiliates being, for these purposes only, directors, executive officers and holders of more than 5% of the issuer's common stock). As of September 13, 2000, the Registrant had 13,375,724 shares of common stock outstanding. 1 PART I ITEM 1. DESCRIPTION OF BUSINESS. CERTAIN STATEMENTS CONTAINED IN THIS ANNUAL REPORT ON FORM 10-KSB, INCLUDING, WITHOUT LIMITATION, STATEMENTS CONTAINING THE WORDS "BELIEVES", "ANTICIPATES", "ESTIMATES", "EXPECTS", AND WORDS OF SIMILAR IMPORT, CONSTITUTE FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. READERS ARE REFERRED TO THE "RISK FACTORS" SECTION CONTAINED HEREIN, WHICH IDENTIFIES IMPORTANT RISK FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN THE FORWARD LOOKING STATEMENTS. OVERVIEW Falcon Entertainment Corp. (collectively with its subsidiaries, "Falcon" or the "Company") is a diversified entertainment company that broadcasts music videos of amateur and professional artists over cable and direct satellite television on its television channel, IMNTV, and that webcasts those videos over the Internet through its web site, www.IMNTV.com. It also operates a record label, InVision Records, and intends to commence operations of a second record label, Ecity Records. Through these labels, the Company intends to produce and mass market the music of artists and bands, including certain of those who submit videos for broadcast over IMNTV. It further intends to develop its web site into a web portal to promote the Company's products and services, promote the musicians signed to its record labels, provide music news and related informational services and provide links to related web sites. To date, the Company has not generated revenues from the operation of its current business model. For the fiscal years ended May 31, 2000 and 1999, the Company incurred losses of $5,866,842 and $62,619, respectively. In March 2000, the Company completed a private offering of its common stock, raising approximately $7,395,000 after deductions for commissions, fees and offering expenses. The Company was incorporated in March 1986 under the laws of the State of Delaware under the name AVTR Systems, Inc. In April 1999 the Company changed its name to Independent Music Group, Inc., and in December 1999 it changed its name to Falcon Entertainment Corp. In April 1999, the Company acquired all of the issued and outstanding capital stock of Independent Music Network, Inc., a Delaware corporation, from the Company's President, Chief Executive Officer and Chairman. INDUSTRY BACKGROUND The Company believes that the broadcast television market for music videos and music programming has grown significantly since the introduction of MTV in 1981. Music enthusiasts are now able to view musical genres ranging from country to rock to rap to salsa on cable television, with major channels generating significant revenues from growing cable subscriptions and increasing advertiser support. The Company's research indicates that the amateur music industry has experienced a corresponding significant growth phase. According to the Gallup Organization of Princeton, New Jersey ("Gallup"), in 1999 approximately 53% of all U.S. households owned at least one musical instrument, 50% of all U.S. households had one member who played an instrument and 40% of U.S. households had two or more members who played an instrument. According to Gallup, in the U.S. alone, nearly $6.8 billion was spent on musical instruments and accessories in 1999, representing an increase of approximately 27% from 1994. According to a 1999 study by the Recording Industry Association of America ("RIAA"), the demographic profile of consumers of recorded music has aged along with the population. Consumers age 29 and under accounted for 44.2% of music purchases in 1999 as compared to 57.0% in 1990. Similarly, consumers over the age of 45 comprised 24.7% of the market in 1999 compared with 11.1% in 1990. Based on RIAA data, there have been significant gains in popular music listenership among the 35 and over category, tracking the aging of the "baby boomer" generation. While spending by young Americans remains Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document predictably strong, the baby boomers (particularly those in the age 40-44 category) have shown the most notable increase, jumping from a 7.8% market share in 1990 to 9.3% in 1999. These shifting demographic patterns strengthen the Company's belief that its concept will appeal to a wide domestic audience. 2 The Company believes that no medium currently exists which gives amateur musicians the opportunity to present themselves on national television. Channels such as MTV and VH1 primarily program well-known artists who are listed on the Billboard 100 or similar charts. The Company also believes that many major and independent record labels and talent agencies are seeking a cost-effective method to discover and showcase new talent on a non-preferential basis. IMNTV The Company began broadcasting music videos of independent artists over its television channel, Independent Music Network, or IMNTV, on June 1, 2000. Through an agreement with Yahoo! Inc., IMNTV's programming is simulcast over the Internet. Independent Music Network's programming currently consists of a variety of music video content packaged into 1/2-hour segments, each including approximately seven music videos. Independent Music Network's programming is presently being broadcast in the Miami, Florida; Orlando, Florida; Norfolk, Virginia; Los Angeles, California and San Diego, California television markets and other limited national television markets to a subscriber base of approximately 2,325,000 households. The Company intends to: o continually increase the length and quality of IMNTV's programming; o expand the size and number of broadcast markets