UNITEDSTATES

SECURITIESAND EXCHANGE COMMISSION

Washington,D.C. 20549

 

FORM10-QSB

 

[X]QUARTERLY REPORT UNDER SECTION 13 OR 15(d)

OF THESECURITIES EXCHANGE ACT OF 1934

 

[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR

15(d) OFTHE SECURITIES EXCHANGE ACT OF 1934

 

For thequarterly period ended: September 30, 2003

 

Commissionfile number 000-25415

 

TwinFaces East Entertainment Corporation

(Exactname of registrant as specified in its charter)

 

| **Nevada **  
 **94-3326901**
(State or other      jurisdiction of   
 (I.R.S.      Employer
incorporation or      organization)   
 Identification      Number)
 

**94 Arthur      Hills Court**
**Henderson,      Nevada **  
 **89074**
(Address of      Principal Executive Offices)   
 (Zip      Code)
 

(702)617-8832

(Registrant'stelephone number, including area code)

 

       Indicate by check mark whether the registrant (1) filed all reports required tobe filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 duringthe last 12 months (or for such shorter period that the registrant was requiredto file such reports), and (2) has been subject to such filing requirements forthe past 90 days.

 

Yes X  No ____

 

       The number of shares of Common Stock, $0.001 par value, outstanding on September30, 2003, was 9,717,348 shares, held by approximately 55 shareholders.

 

       Transitional Small Business Disclosure Format (check one):

 

Yes____  No X
** 

 

TwinFaces East Entertainment Corporation

(aDevelopment Stage Company)

BalanceSheet**
 

ITEM 1. FINANCIALSTATEMENTS

 

 
**September      30, 2003

(Unaudited)**December      31, 2002

(Audited)**Assets
Current assets:
         Cash and equivalents
$                                  15
$                                65
              Total current assets
15
65
Fixed assets, net
0
201
Other noncurrent      assets
230,000
230,000
$                         230,015
$                       230,266**Liabilities and      Stockholders' Equity
Current      liabilities:
         Accrued salaries and benefits
$                      1,153,015
$                       826,915
         Other accrued expenses
1,294,859
694,063
         Short-term note payable
73,000
73,000
         Stockholders' advances
458,749
458,749
         Total current liabilities
2,979,623
2,052,727
              Long-term debt
465,900
465,900
3,445,523
2,518,627
Stockholders'      equity:
         Preferred stock, $.001 par value, authorized 5,000,000 shares

         no shares issued and outstanding
-
 

-
         Common stock, $.001 par value, authorized 20,000,000

         shares; 9,717,348 issued and outstanding at 9/30/03 and

         8,527,348 shares issued and outstanding at 12/31/03
9,717
 

 

8,527
         Additional paid-in capital
1,271,328
1,136,208
         (Deficit) accumulated during development stage
(4,526,578)
(3,463,181)
         Prior period adjustment
30,025
30,025
(3,215,508)
(2,288,361)
$                         230,015
$                       230,266
Theaccompanying notes are an integral part of these financial statements.
** 

 

TwinFaces East Entertainment Corporation

(aDevelopment Stage Company)

Statementsof Operations

for thethree and nine months ended September 30, 2003 and 2002

and forthe period December 5, 1997 (inception) to September 30, 2003

 **
**For the three      months ended****September 30,**
**For the nine months ended September      30,**
**December 5, 1997 (inception) to      September 30,**
**2003**
**2002**
**2003**
**2002**
**2003**
Pre-Operating      Revenue
Interest and      Sales income
$                            -
$                    3,675
$                            -
$                    4,645
$                              878
Pre-Operating      Expenses:
       Professional services
26,487
80,320
396,432
316,824
1,262,884
  Salaries      and benefits
133,750
229,825
401,250
351,075
1,761,434
       Commissions and fees
16,800
-
36,800
-
36,800
  General      and administrative
62,842
79,669
176,774
508,715
1,219,414
       Depreciation and amortization
-
-
-
-
901
239,879
389,814
1,011,256
1,176,614
4,281,433
Net pre-operating      (loss)
(239,879)
(386,139)
(1,011,256)
(1,171,969)
(4,280,555)
Other income      (expenses):
  Interest
(17,504)
(50,978)
(51,941)
(50,978)
(120,423)
Net (loss) before      discontinued operations
(257,383)
(437,117)
(1,063,197)
(1,222,947)
(4,400,978)
(Loss) from      discontinued operations
-
-
-
-
(125,600)
Net (loss)
$              (257,383)
$              (437,117)
$           (1,063,197)
$           (1,222,947)
$                 (4,526,578)
Weighted average      number of
common shares      outstanding - basic and fully diluted
9,647,348
8,194,000
9,122,348
8,085,500
Net (loss) per      share before discontinued operations
$                    (0.03)
$                    (0.05)
$                    (0.12)
$                    (0.15)
Net (loss) per      share from discontinued operations
0.00
0.00
0.00
0.00
Net (loss) per      share - basic and fully diluted
$                    (0.03)
$                    (0.05)
$                    (0.12)
$                    (0.15)** 

 **
Theaccompanying notes are an integral part of these financial statements.
** 

 

TwinFaces East Entertainment Corporation

(aDevelopment Stage Company)

Statementof Cash Flows

for thenine months ended September 30, 2003 and 2002

and forthe period December 5, 1997 (inception) to September 30, 2003**
 
** 

 

For      the nine months ended

September      30,**December      5, 1997

(inception)

to      September 30,

2003**2003**2002**Cash flows from      operating activities
Net (loss)
$              (1,063,197)
$             (1,222,947)
$                           (4,526,578)
       Depreciation
-
-
901
  Prior      period adjustment
-
-
30,025
  Shares      issued for salaries - related party
119,450
-
119,450
  Shares      issued for services
16,800
-
492,207
  Shares      issued for employment enticement
-
-
5,000
  Shares      issued for debt enticement
-
-
20,000
Adjustments to      reconcile net (loss) to net cash
(used) by      operating activities:
  Increase      in accrued salaries and benefits
326,100
281,361
1,628,216
  Increase      in other accrued expenses
600,797
255,079
1,294,859
Net cash (used)      by operating activities
(50)
(686,507)
(935,920)**Cash flows from      investing activities
  Purchase      of equipment
-
-
(1,102)
  Investment      in Magellan International, Inc.
-
(48,500)
(180,000)
  Short-term      note payable
-
(73,000)
73,000
  Proceeds      from long-term debt
498,000
465,900
  Payments      on long-term debt
-
(220,000)
-
Net cash provided      by investing activities
-
156,500
357,798**Cash flows from      financing activities
       Stockholders' advances
-
41,856
458,749
  Issuance      of common stock
-
55,000
119,388
Net cash provided      by financing activities
-
96,856
578,137
Net increase      (decrease) in cash
(50)
(433,151)
15
Cash and      equivalents - beginning
65
390
-
Cash and      equivalents - ending
$                            15
$                (432,761)
$                                         15
Supplemental      disclosures:
  Interest      paid
$                               -
$                              -
$                                            -
  Income      taxes paid
$                               -
$                              -
$                                            -
  Non-cash      transactions:
          Number of shares issued for consulting services
140,000
-
2,604,889
          Number of shares issued for salaries - related party
1,050,000
-
1,050,000
          Number of shares issued to satisfy accrued salaries - related party
-
-
1,000,000
          Number of shares issued for employment enticement
-
-
50,000
          Number of shares issued for debt enticement
-
-
333,333
          Shares issued for contractual payment to acquire Magellan
-
-
500,000**Theaccompanying notes are an integral part of these financial statements.

 

 

TWIN        FACES EAST ENTERTAINMENT CORPORATION

(a        development stage company)

NOTES        TO UNAUDITED FINANCIAL STATEMENTS
**Note 1 - Basis ofPresentation

 

Theaccompanying unaudited condensed financial statements at September 30, 2003 havebeen prepared in accordance with generally accepted accounting principles forinterim financial information and with the instructions to Form 10-QSB andreflect all adjustments which, in the opinion of management, are necessary for afair presentation of financial positions as of September 30, 2003 and results ofoperations and cash flows for the nine months ended September 30, 2003. All suchadjustments are of a normal recurring nature. The results of operations for theinterim period are not necessarily indicative of the results expected for a fullyear. The statements should be read in conjunction with the financial statementsand footnotes thereto included in the Company's Form 10-KSB for the year endedDecember 31, 2002.
**Note 2 - Going Concern

 

Theaccompanying financial statements at September 30, 2003 have been prepared on agoing concern basis, which contemplated the realization of assets and thesatisfaction of liabilities in the normal course of business. The Company hassuffered losses from operations during its operating history. The ability of theCompany to continue as a going concern is dependent upon obtaining futureprofitable operations. Management is in the process of acquiring and developingproducts for sale which would generate revenue to sustain the operations of theCompany. The financial statements do not include any adjustments relating to therecoverability and classification of recorded assets and classification ofliabilities that might be necessary should the Company be unable to continue asa going concern.
**Note 3 - Related PartyTransactions

 

The Company accrued atotal of $326,100 in salaries and benefits owed to its officers and directorsduring the nine months ended September 30, 2003.

 

The Company accrued atotal of $165,406 in other expenses owed to its officers and directors duringthe nine months ended September 30, 2003.

 

The Company issued1,050,000 shares of its $0.001 par value common stock to its officers in lieu ofsalaries totaling $119,450 during the nine months ended September 30, 2003.
**Note 4 - Common Stock

 

The Company issued140,000 shares of its $0.001 par value common stock during the nine months endedSeptember 30, 2003 to various individuals and entities for consulting servicesvalued at $16,800.

 

 
**Item 2.Plan of Operation

 **
       With the exception of historical matters, the matters discussed herein areforward-looking statements that involve risks and uncertainties. Forward-lookingstatements include, but are not limited to, statements concerning anticipatedtrends in revenues and net income, the date of introduction or completion of ourproducts, projections concerning operations and available cash flow. Our actualresults could differ materially from the results discussed in suchforward-looking statements primarily as the result of insufficient cash topursue production and marketing efforts. The following discussion of ourfinancial condition and results of operations should be read in conjunction withour financial statements and the related notes thereto appearing elsewhereherein.

 
*Overview

 *
       Twin Faces was incorporated on December 5, 1997 under the laws of the State ofDelaware and reincorporated under the laws of the State of Nevada on June17,1998. We are in the development stage as an entertainment and film productioncompany.

 

       We have yet to generate revenues from operating activities and there is asubstantial going concern issue as to whether we will ever be able to produceand market our films and generate sufficient, if any, revenues to satisfy ourworking capital requirements. Since inception we have been dependent on the saleof our equity securities and loans from affiliates to satisfy our workingcapital requirements. We continue to have a working capital deficiency thatraises substantial concern regarding our ability to continue as a going concern.

 
**Plan ofOperation

 **
       During the next twelve months we plan to focus our efforts on our development offour primary properties, including, "Pages From A Rabbit Journal","The Town That Arrested Santa Claus", and the "Einstein"property. We are also working on the production of a new feature film, "AReal Man", written by Johnnie King; however actual production will notcommence until we have sufficient capital for production and marketing.

 
***       Satisfaction of our cash obligations for the next 12 months. Our plan ofoperation has been stalled by our lack of cash. Under our current plan ofoperation we will be required to generate at least $800,000 (minimal cashrequirement) to continue in operation for the next 12 months.

 
***       Summary of any product research and development that we will perform for theterm of our plan of operation. We do not anticipate performing anysignificant product research and development under our plan of operation.

 
***       Expected purchase or sale of plant and significant equipment. We do notanticipate the purchase or sale of any plant or significant equipment, as suchitems are not required by us at this time or in the next 12 months.

 
***       Significant changes in the number of employees. In the event we aresuccessful in obtaining additional debt or equity, which will provide us withthe cash to develop an entertainment product, then in that event we will berequired to hire 2 additional full time staff members for the company.

 

 
**Liquidityand Capital Resources

 **
       On June 20, 2003, we entered into an Investment Agreement with Johnnie King, ourDirector of Film Development. On September 29, 2003, we executed a newInvestment Agreement with Mr. King to extend the funding dates that wepreviously agreed on in the June 20 agreement. Pursuant to the terms of theagreement, Mr. King will make a direct $4,000,000 cash investment as purchase ofseries C preferred stock. Within 30 days of funding we will issue 1,000,000shares of series C preferred stock of the Company to Mr. King. The stock willcarry conversion rights to common on an annual basis the first week of thefunding month each year commencing the month of funding, for a period of 4 yearsaccording to the formula below.

 

       The preferred stock shall be converted to common stock in the Company on thedates following:

 

       One year from funding date, conversion of 250,000 shares preferred stock tocommon stock,

       Two years from funding date, conversion of 250,000 shares preferred stock tocommon stock,

       Three years from funding date, conversion of 250,000 shares preferred stock tocommon stock,

       Four years from funding date, conversion of 250,000 shares preferred stock tocommon stock.

 

       We will issue a 5% cash dividend on the principle amount of the unconvertedpreferred stock, payable in common stock as follows:

 

       One year from funding date, $200,000 of common stock,

       Two years from funding date, $120,000 of common stock,

       Three years from funding date, $100,000 of common stock,

       Four years from funding date, $50,000 of common stock.

 

       At our option the stock shall be converted according to either of the following:

 

       Option 1- Average prior 30 days closing price on current quoted exchangeso the market value of the common issued is one million five hundred thousanddollars ($1,500,000). For example, if the funding date is December 31, 2003, andif the 30-day average quoted closing price is $1 per share on December 31, 2004,Mr. King will receive 1,500,000 shares of common stock for his 250,000 shares ofpreferred stock for a valuation conversion of 6 common shares for each preferredshare.

 

       Option 2- The stock may be converted at a conversion ratio of 2 commonshares for each preferred share. For example, if the funding date is December31, 2003, on December 31, 2004 we may convert the 250,000 shares of preferredstock to 500,000 shares of common stock in the Company.

 

       On June 20, 2003, we executed a Promissory Note with Johnnie King, our Directorof Film Development for the principal amount of $4,000,000. On September 29,2003, we executed a new Promissory Note to extend the funding dates under thenote. The funding date is on or before September 30, 2004 and the due date is onor before five years from the funding date. Pursuant to the note we promise topay to the order of Johnnie King the sum of $4,000,000 together with interestthereon at 10% per annum as prescribed below. The sum and interest shall be paidin the manner following:

 

       Interest due one year from funding date-

               Payable as $400,000 worth of 144 stock or $400,000 cash

       Interest due two years from funding date-

               Payable as $400,000 worth of 144 stock or $400,000 cash

       Interest due three years from funding date-

               Payable as $400,000 worth of 144 stock or $400,000 cash

       Interest due four years from funding date-

               Payable as $400,000 worth of 144 stock or $400,000 cash

 

 

       At the principal due date of the note, we agree to pay to Mr. King, at ouroption either $4,400,000 cash or $4,800,000 worth of 144 stock.

 

       We may prepay the promissory note at any time, without penalty, by delivery ofthe principal amount in cash and appropriate pro-rata interest as prescribedabove.

 

       As of the date of this filing we have not yet received any funds from Mr. King.Upon receipt of funds we will file a Form 8-K.

 

       A critical component of our operating plan impacting our continued existence isthe ability to obtain additional capital through additional equity and/or debtfinancing. We do not anticipate enough positive internal operating cash flowuntil such time as we can generate substantial revenues from fees earned as aresult of our documentary films of Dr. Albert Einstein and feature film andtelevision scripts, which may take the next few years to fully realize. In theevent we cannot obtain the necessary capital to pursue our strategic plan, wemay have to cease or significantly curtail our operations. This would materiallyimpact our ability to continue operations.

 

       Our near term cash requirements are anticipated to be offset through the receiptof funds from private placement offerings and loans obtained through privatesources. Since inception, we have financed cash flow requirements through debtfinancing and issuance of common stock for cash and services. As we expandoperational activities, we may continue to experience net negative cash flowsfrom operations, pending receipt of servicing or licensing fees, and will berequired to obtain additional financing to fund operations through common stockofferings and bank borrowings to the extent necessary to provide workingcapital.

 

       Over the next twelve months we believe that existing capital and anticipatedfunds from operations will not be sufficient to sustain operations and plannedexpansion. Consequently, we will be required to seek additional capital in thefuture to fund growth and expansion through additional equity or debt financingor credit facilities. No assurance can be made that such financing would beavailable, and if available it may take either the form of debt or equity. Ineither case, the financing could have a negative impact on our financialcondition and our Stockholders.

 

       We anticipate incurring operating losses over the next twelve months. Our lackof operating history makes predictions of future operating results difficult toascertain. Our prospects must be considered in light of the risks, expenses anddifficulties frequently encountered by companies in their early stage ofdevelopment. Such risks include, but are not limited to, an evolving andunpredictable business model and the management of growth. To address theserisks we must, among other things, obtain a customer base, implement andsuccessfully execute our business and marketing strategy, continue to developand upgrade technology and products, respond to competitive developments, andattract, retain and motivate qualified personnel. There can be no assurance thatwe will be successful in addressing such risks, and the failure to do so canhave a material adverse effect on our business prospects, financial conditionand results of operations.

 
**GoingConcern

 **
       The consolidated financial statements included in this filing have been preparedin conformity with generally accepted accounting principles that contemplate thecontinuance of the Company as a going concern. The Company's cash position maybe inadequate to pay all of the costs associated with production and marketing.Management intends to use borrowings and security sales to mitigate the effectsof its cash position, however no assurance can be given that debt or equityfinancing, if and when required will be available. The financial statements donot include any adjustments relating to the recoverability and classification ofrecorded assets and classification of liabilities that might be necessary shouldthe Company be unable to continue existence.

 

 
**Item 3.Controls and Procedures**-  Under    the supervision and with the participation of our management, including our    President and Chief Financial Officer, we evaluated the effectiveness of the    design and operation of our disclosure controls and procedures, as such term    is defined under Rule 13a-14(c) promulgated under the Securities Exchange    Act of 1934, as amended, within 90 days prior to the filing date of this    report. Based on their evaluation, our President and Chief Financial Officer    concluded that our disclosure controls and procedures are effective.There    have been no significant changes (including corrective actions with regard    to significant deficiencies or material weaknesses) in our internal controls    or in other factors that could significantly affect these controls    subsequent to the date of the evaluation referenced in paragraph (a) above.**PARTII--OTHER INFORMATION

 

Item 1.Legal Proceedings

 **
       None

 
**Item 2.Changes in Securities

 **
       On July 10, 2003, we issued 50,000 shares of our $0.001 par value common stockto Frank Bauco for services rendered as a consultant of the Company. The shareswere deemed to have been issued pursuant to an exemption provided by section4(2) of the Act, which exempts from registration "transactions by an issuernot involving any public offering."

 

       On July 10, 2003, we issued 50,000 shares of our $0.001 par value common stockto Vijay Arunachalan Kumar for services rendered as a consultant of the Company.The shares were deemed to have been issued pursuant to an exemption provided bysection 4(2) of the Act, which exempts from registration "transactions byan issuer not involving any public offering."

 

       On July 10, 2003, we issued 40,000 shares of our $0.001 par value common stockto Frank McEnulty for services rendered as a consultant of the Company. Theshares were deemed to have been issued pursuant to an exemption provided bysection 4(2) of the Act, which exempts from registration "transactions byan issuer not involving any public offering."

 
**Item 3.Defaults by the Company upon its Senior Securities

 **
       None
** 

Item 4.Submission of Matter to a Vote of Security Holders

 **
       None

 
**Item 5.Other Information

 

 **
Consultants
* 

       MSquare Trust: On April 15, 2003, we executed a Consulting Agreement withMSquare Trust ("MSquare"). Our Board of Directors accepted theagreement on July 10, 2003. MSquare has various connections and networkingcontacts in the entertainment business. Pursuant to the agreement, MSquare shallprovide us with services on an as requested basis and in any capacity as werequest for development of our strategic marketing plan for our entertainmentbusiness. The Term of the agreement is for the year 2003 at which time allobligations under the agreement shall cease.

 

Weshall compensate MSquare for its services as follows:
-  Reimbursement    for all direct company related expenses for any travel or pre-approved    business expense other than usual travel and related expenses within 50    miles of the MSquare office.Fifty    Thousand Dollars ($50,000) in fees payable the later of May 1, 2003 or the    Company's receipt of funding in the amount of $2 million or greater.*       Interstate Housing Resources: On April 15, 2003, we executed a ConsultingAgreement with Interstate Housing Resources ("ISH"). Our Board ofDirectors accepted the agreement on July 10, 2003. ISH has expertise ineffective communications with potential investors, relationship withentertainment and related companies, potential Company clients and a knowledgeof the Company. We retained ISH to advise and assist in development of ourclient base and entertainment business and related fields. ISH will use itsresources to develop additional clients and business and expand upon currentbusiness in place or in development for the company. The term of the agreementis for one year commencing April 15, 2003. The agreement may be terminated byeither party by giving 30 days notice to the other without cause, after one yearfrom the date of signing of the agreement, provided all compensation is current.We shall pay ISH $180,000 per year all due and payable upon the later of May 1,2003 or when we receive funds of $2 million dollars or greater.

 
*       Maiolini: On June 30, 2003, we executed a Consulting Agreement with JayMaiolini. Our Board of Directors accepted the agreement on July 10, 2003. Mr.Maiolini has various connections and networking contacts in the corporatefinance business and development business. Pursuant to the agreement, Mr.Maiolini shall provide us with services on an as requested basis and in anycapacity as we request for securing financing for the maintenance of ourbusiness. The term of the agreement is for the year 2003 at which time allobligations under the agreement shall cease.

 

       We shall compensate Mr. Maiolini for his services as follows:
-  Nine    Thousand One Hundred Dollars ($9,100) in fees payable the earlier of August    1, 2003 or when we receive funds in the amount of $1 million dollars or    greater.*       Crawmerica: On June 30, 2003, we executed a Consulting Agreement withCrawmerica ("Craw"). Our Board of Directors accepted the agreement onJuly 10, 2003. Craw has various connections and networking contacts in thesports entertainment and development business. Pursuant to the agreement, Crawshall provide us with services on an as requested basis and in any capacity aswe request for securing financing for the maintenance of the business. The termof the agreement is for the year 2003 at which time all obligations under theagreement shall cease.

 

       We shall compensate Craw for its services as follows:
-  Twenty    Five Thousand Dollars (25,000) in fees payable the earlier of August 1, 2003    or when we receive funds in the amount of $1 million dollars or greater.
 

 
*       Bauco: On June 30, 2003, we executed a Consulting Agreement with Frank Bauco.Our Board of Directors accepted the agreement on July 10, 2003. Mr. Bauco hasvarious connections and networking contacts in the corporate finance businessand development business. Pursuant to the agreement Mr. Bauco shall provide uswith services on an as requested basis and in any capacity as we request forsecuring financing for the maintenance of the business. The term of theagreement is for the year 2003 at which time all obligations under the agreementshall cease.

 

Weshall compensate Mr. Bauco for his services as follows:
-  Fifty    Thousand Dollars ($50,000) in fees payable the earlier of August 1, 2003 or    when we receive funds in the amount of $1 million dollars or greater, andFifty    Thousand shares of restricted (rule 144) common stock.*       Kumar: On June 30, 2003, we executed a Consulting Agreement with VijayArunachalam Kumar. Our Board of Directors accepted the agreement on July 10,2003. Mr. Kumar has various connections and networking contacts in the corporatefinance business and development business. Pursuant to the agreement Mr. Kumarshall provide us with services on an as requested basis and in any capacity aswe request for securing financing for the maintenance of the business. The termof the agreement is for the year 2003 at which time all obligations under theagreement shall cease.

 

       We shall compensate Mr. Kumar for his services as follows:
-  Twenty    Five Thousand Dollars ($25,000) in fees payable the earlier of August 1,    2003 or when we receive funds in the amount of $1 million dollars or    greater, andFifty    Thousand shares of restricted (rule 144) common stock.*       McEnulty: On June 30, 2003, we executed a Consulting Agreement with FrankMcEnulty ("Mr. McEnulty"). Our Board of Directors accepted theagreement on July 10, 2003. Mr. McEnulty has various connections and networkingcontacts in the corporate finance business and has been asked to go outside hisusual duties associated with our business, and thereby entitled to additionalconsideration. Pursuant to the agreement Mr. McEnulty shall provide us withservices on an as requested basis and in any capacity as we request for securingfinancing for the maintenance of the business. The term of the agreement is forthe year 2003 at which time all obligations under the agreement shall cease.

 

       We shall compensate Mr. McEnulty for his services as follows:
-  Reimbursement    for office space required to operate 3 months at one thousand dollars    ($1,000) per month for a total of $3,000, andTwenty    Two Thousand Dollars ($22,000) in fees payable the earlier of August 1, 2003    or when we receive funds in the amount of $1 million dollars or greater, andForty    Thousand shares of restricted (rule 144) common stock.
DevelopmentFinancing Agreement

 

       On September 22, 2003, we entered into a Development Financing Agreement toproduce additional episodes of "Jack London's Call of the Wild" (the"Series"), with O'Dea & Company LLC ("O'Dea"), whereaswe desire to engage O'Dea to arrange the production financing (the"Production Finance") necessary to produce an additional 13 episodesof the Series. Thirteen episodes of the Series have already been produced andanother 13 episodes are intended to be developed, financed, produced, anddistributed. In order to enable O'Dea to arrange the Production Finance, we willprovide the development budget (the "Development Budget") to O'Dea,which O'Dea will use to arrange the Production Finance. We will provide 

 

 

O'Dea$421,000 for the Development Budget when we receive a combined total cashinvestment (in the form or forms of long-term debt, preferred stock, or commonstock) in the amount equal to at least $4,000,000 and when all the conditionsprecedent stated in the agreement are fulfilled.

 

       If O'Dea is successful in arranging the production finance, we will become thedistributor (the "Distributor") of all 26 episodes of the Series. Ourintent is to cause all distribution rights related to the Series (all 26episodes) to be granted to us as the Distributor. The term is for 15 years fromthe date of completion of episodes 14-26 of the Series.

 

       We will be compensated for our investment of the Development Budget. O'Dea willcause the Development Budget to be repaid to us upon release of the first drawdown of the Production Finance. We will receive a Distributor's Distribution Feeand Sales Agent's sales agency fee, a combined total of 25%. A copy of theDevelopment Financing Agreement is attached hereto as an exhibit.

 
**Item 6.Exhibits and Reports of Form 8-K

 **
(a)   Exhibits

 

10.1   
 Consulting      Agreement of MSquare Trust, dated April 15, 2003
10.2   
 Consulting      Agreement of Interstate Housing Resources, dated April 15, 2003
10.3   
 Consulting      Agreement of Jay Maiolini, dated June 30, 2003
10.4   
 Consulting      Agreement of Crawmerica, Inc., dated June 30, 2003
10.5   
 Consulting      Agreement of Frank Bauco, dated June 30, 2003
10.6   
 Consulting      Agreement of Vijay Arunachalam Kumar, dated June 30, 2003
10.7   
 Consulting      Agreement of Frank McEnulty, dated June 30, 2003
10.8   
 Investment      Agreement between Twin Faces and Johnnie King, dated September 29, 2003
10.9   
 Promissory      Note of Johnnie King, dated September 29, 2003
10.10 
 Development      Financing Agreement for "Jack London's Call of the Wild"
31.1      
 Certification      of Michael Smolanoff Pursuant to Section 302 of the Sarbanes-Oxley Act
31.2      
 Certification      of Stanley L. Teeple Pursuant to Section 302 of the Sarbanes-Oxley Act
32.1      
 Certification      of Michael Smolanoff Pursuant to Section 906 of the Sarbanes-Oxley Act
32.2      
 Certification      of Stanley L. Teeple Pursuant to Section 906 of the Sarbanes-Oxley Act
 

(b)   Form 8-K

 

       None

 

 
**SIGNATURES

 **
       Pursuant to the requirements of the Securities Exchange Act of 1934, theRegistrant has duly caused this report to be signed on its behalf by theundersigned, thereunto duly authorized.

 

 

TWIN FACES EASTENTERTAINMENT CORPORATION

(Registrant)

 

 

By: /S/MichaelSmolanoff                
**     Michael Smolanoff, President**
 

Date: November 6, 2003*************************************************** |
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