UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549




FORM 10-K




x
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the fiscal year ended August 31, 2011




or




o
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




LUX DIGITAL PICTURES, INC.


(Exact name of Registrant as specified in its charter)





Wyoming

26-2589503(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)





Registered Agent:





Corp 95


1617 No. Main Street


Suite B


Sheridan, WY 82801-2668





12021 Wilshire Blvd. #450


Los Angeles, CA. 90025


(Address of principal executive offices) (Zip Code)




(510)-948-4000


(Registrant’s telephone number, including area code)





Indicate by check mark whether the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes oNo x





Indicate by check mark whether the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes oNo x





Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 xNo o





Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405 of Regulation  S-K is not contained  herein,  and will not 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-K or any amendment to this Form 10-K x





Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act.




Large accelerated filer
o
Accelerated filer
oNon-accelerated filer
o
Smaller reporting company
x




Indicate by check mark whether the registrant is a shell company (as defined in rule 12b-2 of the Exchange Act).  Yes oNo x





As of November 28, 2011 the Company’s common stock had a bid price of $.0065 per share and a ask price of $.0080 per share.





At November 27, 2011, there were 69,191,023 shares of Registrant's ordinary shares outstanding.





Document incorporated by reference:  None.













FORWARD LOOKING STATEMENTS




In General




This Annual Report contains statements that plan for or anticipate the future.  In this Annual Report, forward-looking statements are generally identified by the words "anticipate," "plan," "believe," "expect," "estimate," and the like.  These forward-looking statements include, but are not limited to, statements regarding the following:




*
our product and marketing plans*
consulting and strategic business relationships;*
statements about our future business plans and strategies;*
anticipated operating results and sources of future revenue;*
our organization's growth;*
adequacy of our financial resources;*
development of new products and markets;*
competitive pressures;*
changing economic conditions;*
expectations regarding competition from other companies; and*
our ability to manufacture and distribute our products.




Although we believe that any forward-looking statements we make in this Annual Report are reasonable, because forward-looking statements involve future risks and uncertainties, there are factors that could cause actual results to differ materially from those expressed or implied.  For example, a few of the uncertainties that could affect the accuracy of forward-looking statements, besides the specific factors identified above in the Risk Factors section of this Annual Report, include:




*
changes in general economic and business conditions affecting the motion picture industry;*
developments that make our particular film products less competitive and that may reduce the value of our unamortized film costs;*
changes in our business strategies;*
the level of demand for our products; and




In light of the significant uncertainties inherent in the forward-looking statements made in this Annual Report, particularly in view of our early stage of operations, the inclusion of this information should not be regarded as a representation by us or any other person that our objectives and plans will be achieved.




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PART I




ITEM 1.       DESCRIPTION OF BUSINESS




The Company




Any references to “we”,”our”, “us”, “Lux” and the “Company” refer to Lux Digital Pictures, Inc. The Company has only a three and one half (3.5) year operating history. The Company’s primary, current, business is the production and distribution of motion pictures. As of the end of our fiscal year ending August 31, 2011 the Company had Total Assets of $585,852 and Total Stockholders’ Equity of $458,212. Revenues for the fiscal year were $305,140 and the Company had a Net loss of $205,620. Please see the “Selected Financial Data” for more complete details.




Corporate Background




Lux Digital Pictures, Inc was incorporated in the State of Wyoming on May 6, 2008. We were formed to develop businesses, assets and opportunities in the motion picture production and distribution industry and allied industries, which the Company believed would have significant growth potential as new Digital delivery and distribution platforms evolve. Lux markets and intends to market its motion picture product and distribution businesses under several names (”brands”) including Lux Digital Pictures, Midnight Movies, New Broadway Cinema and Short Screams. Lux expects to compete in today’s entertainment industry market place by controlling costs of production and distribution by outsourcing most functions to third parties and using, primarily, online marketing tools to promote its products and further its digital strategies. Lux also believes it has developed unique production strategies for the production of a unique brand of commercial documentary feature films. Lux’s future growth is contingent upon raising sufficient new capital to expand its brands, developing its digital strategies and on identifying and acquiring allied businesses.




Business Overview




Our objective is to establish the Company as a leading producer and distributor of quality motion picture product that can be successfully marketed and distributed via emerging digital distribution platforms, such as Video On Demand (“VOD.”), and on conventional cable channels and on the Internet as well as in traditional world wide markets such as broadcast television and home video.




Lux releases its product through third parties to minimize expense. The Company has five (5) motion pictures “Night of the Living Dead 3D”, “Nightmares in Red, White and Blue”, “American Grindhouse”, “Area 51:The Alien Interview”, “Films of Fury” and “Night of the Living Dead 3D: Reanimation”, currently, in distribution in various media in world wide markets, via both international sales agents and domestic sub-licensees. “Night of the Living Dead 3D”, (www.nightofthelivingdead3d.com ) the Company’s initial release, continues to be distributed in the US and Canada via Lions Gate Films, Inc and Screen Media Ventures, LLC is distributing it in markets outside of the US and Canada. Although the film was, originally, released in 2007 it continues to produce regular income for the Company. The Company produced a ‘prequel’ in fiscal 2011 entitled “Night of the Living Dead 3D: Reanimation” written, produced and directed by Jeff Broadstreet starring Andrew Divoff and Jeffrey Combs, which will be released in all worldwide markets by Screen Media Ventures, LLC in late 2011 and through 2012. “Nightmares in Red, White and Blue” (www.nightmaresinredwhiteandblue.com ) written and produced by Joseph Maddrey, from his book, and directed by Andrew Monument is a feature-length documentary film on the evolution of the American horror film and has been in active distribution since mid 2010.. This motion picture is represented by Screen Media Ventures, LLC, in markets outside of the US and Canada and Lions Gate Films UK will be releasing it in the UK in January 2012. The film is distributed in the US and Canadian theatrical, television and home entertainment markets via Kino Lorber, Inc and to the domestic VOD. market through Warner Bros Digital and Gravitas Ventures, LLC. “American Grindhouse” (www.americangrindhouse.com ), written, directed and co-produced by Elijah Drenner is a feature-length documentary on the history of the American exploitation film industry. The film’s international rights are distributed by Content Media Corp, which is actively marketing the film outside the US and Canada. Since mid 2010 the film has been distributed in the US and Canadian theatrical, television and home entertainment markets by Kino Lorber, Inc and to the domestic VOD. market through Warner Bros Digital and Gravitas Ventures, LLC. In its latest fiscal year the Company completed production of “Films of Fury: The Kung Fu Movie Movie” (www.filmsoffury.com ) a feature documentary on the history of Kung Fu Cinema that was written by Ric Meyers, based on his book by the same title, and directed by Andrew Corvey and Andrew Robinson, which also has 10 minutes of original animation created by Upon Studios. “Films of Fury” is being distributed in all markets outside of the US and Canada by Content Media Corporation and all US and Canadian rights were acquired by and will be distributed by Phase 4 Films Inc. The Company also has two (2) films in the latter stages of production; “Gameplay: The Story of the Videogame Revolution” is a comprehensive feature-length documentary on the history of the video game industry, written and produced by Bill Logudice and Matt Barton, directed by Richard Goldgewicht which the Company expects to be completed in early 2012, Also in production is “Money For Nothing” a feature documentary on the history of the music video written by Saul Austerlitz, based on his book, which is being directed by Jamin Bricker and is expected to be completed  and ready for release in early 2012.




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Lux believes that the particular brand of documentary films it is producing capitalizes on extensive available content, can be produced economically, has established niche audiences and will have viable world wide commercial appeal that can, possibly, make Lux a market leader in this type of production.




The Company also intends to develop its brand Midnight Movies as a US specialty theatrical distributor that will provide limited, multi-market releases for some of its own product and film product that may be acquired from third parties such as the aforementioned “3-D” motion pictures “Night of the Living Dead 3D” and its prequel “Night of the Living Dead 3D:Reanimation” (www.nightofthelivingdead3d.com ).




The Company is also developing, but not yet operating pending further capitalization, a new internet business which will be known as Short Screams. Short Screams,when constructed, will be an online web portal that will stream and broadcast independently produced short (under 6 minutes) horror, suspense and fantasy films, rank them by popularity and volume of downloads and incubate and develop the most popular short films into feature motion pictures. Like YouTube and other socially active web portals that use viral marketing tools to reach internet audiences, known more commonly as “web 2.0” applications, Short Screams will, when operative, allow its members to view and upload an unlimited amounts of content, provided it fits the genre, is not offensive or obscene, is under 6 minutes in length and they accept the terms and conditions of membership. More details on the business are on the Company’s web site (www.luxdigitalpictures.com ). The Company expects this business, when capitalized and operational, to generate revenues from online advertising, the distribution of the web site content and through the exploitation of the motion picture product it develops and distributes.




The Company is also developing, but not yet operating pending capitalization, New Broadway Cinemaa business that will exclusively produce and distribute film adaptations of established theatrical stage productions using the Company’s proprietary DigiTheater® production process. DigiTheater® is a filming process developed by the Company that films theater productions on stages that capture the performances in front of a ‘green screen’ which allows digital effects to be inserted during post production. For more information on this business see the Company’s web site (www.luxdigitalpictures.com ).





In its latest fiscal year the Company has negotiations with several Companies regarding acquisitions and reverse mergers. In June the Company entered into negotiations with a Company in the digital online advertising business and signed a non-binding Letter of Intent to acquire the business via a reverse merger. After extensive due diligence the Company was unable to confirm the Financial Statements presented by the business and the Company had to terminate negotiations. The prospective acquisition also failed to pay the legal expenses accrued in connection with the proposed transaction defaulting on their written agreement to absorb all of these costs leaving the Company with a substantial liability. The Company intends to file an action against the business to recover its legal expenses and other damages.





As of mid November 2011 the Company has had extensive negotiations and is actively conducting due diligence on a new, prospective reverse merger with a company that is in a related entertainment field and which holds several, important assets. As of mid November the talks and negotiations were continuing but no formal agreement has been reached and there is no assurance that agreement will be reached.





The Company has not been successful raising any new capital except for a small Convertible Note and has limited liquidity in its publicly traded shares and although we continue to explore various merger opportunities we have not yet formalized a transaction. Without far greater liquidity or new outside investment it will be very difficult to grow the Company in any meaningful way in the near term as the Company will be solely reliant on generating income from its motion picture properties and assets. The Company is also, currently, exploring and considering several potential options to re-capitalize the Company, to the long term benefit of shareholders, including possible mergers, as described herein, and/or share distributions, which may substantially dilute share holders and which may result in the Company installing new management and, potentially, operating new businesses.





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Industry Overview





The worldwide motion picture industry is dominated by several very large, fully integrated conglomerates and ‘end users’ that are focused, primarily, on capturing market share via wide, domestic and international releases of mega budgeted, branded films and sequels, Digital 3-D animated pictures and other proven and star driven entertainment projects, commonly known in the industry as ‘tent pole projects’, with smaller, ‘specialty’ divisions responsible for releasing, on a more limited basis, the less costly and talent driven ‘execution dependent’ films, and these several large companies are continuing to grow and expand and increase overall worldwide market share.





In recent years there was also a large influx of outside capital into the studio and independent motion picture business, primarily allocated to the ‘major’ film companies that resulted and a glut of new motion picture product and increased competition for audiences across all revenue streams. The overall motion picture business is also experiencing a significant downward correction from former, traditionally strong, predictable ancillary markets, specifically DVD home entertainment, as consumers have begun to migrate to various digital platforms to acquire and view audio visual entertainment.  We expect that it will take a number of years before distributors adapt to the changing viewing habits, present conditions and the ever expanding capacity of the World Wide Web to deliver content. These circumstances present challenges to the most sophisticated business models. These significant developments have had an even greater impact on the small, so called ‘independent’ producers and distributors who have traditionally relied on the home entertainment markets for their principal revenues.





Lux believes that its business and its proposed businesses are strategically designed to capitalize on the inevitable ‘shakeout’ of current film producer/distributors that will result over the next few years and, as the industry converts to new digital distribution platforms, there will exist opportunity for the Company’s businesses and proposed operations.




Competition




There is significant competition in the world wide motion picture business. It is an industry that generates many billions in annual revenues from many exploitation and media sources including theaters, home entertainment, television and now, ever increasingly, online and digital channels.




It takes substantial capital to compete in the entertainment business and the return on capital, even for the best product, takes a considerable time period. Costs to produce and market wide audience motion pictures is prohibitive to all but the most deep pocketed entities and individuals and there is not, nor has there ever been, a certain basis to, accurately, forecast success. The small, independent side of the industry has a much lower cost of entry, due in part to the new, digital filmmaking advances, but is, in fact, even more speculative as thousands of films are produced annually that get little or no distribution.




Although the Company does not intend to directly compete against the major film companies, and it will not attempt to finance any projects beyond the limited scope of its distribution plans and emerging digital opportunities, it will still face formidable competition from a wide range of smaller, independently financed, production and distribution entities, more established and, in many instances, better capitalized than the Company.




There, currently, exists hundreds of legitimate, viable independent movie companies, around the world, that will have resources to compete with our Company for product, distribution access, financing and market share. The Company believes in its strategies and business concepts, however, there is competition for all audiences and the attention of media consumers and there is no certainty that the Company will be able to compete, successfully, in this environment.




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Intellectual Property & Proprietary Rights




We regard substantial elements of our businesses, product and web site content as proprietary and we shall attempt to protect them by relying on copyright, trademark, service mark and trade secret laws, restrictions on disclosure and transferring title and other methods. The Company has been granted preliminary approval by the U.S. Patent Office for its “DigiTheater” trademark.




Regulation




Our businesses are regulated by governmental authorities in the jurisdictions in which we operate. Because of our international operations we must comply with diverse and evolving regulations. Regulation relates to, among other things, management, licensing, foreign investment, use of confidential customer information and content. Our failure to comply with all applicable laws and regulations could result in, among other things, regulatory actions or legal proceedings against us, the imposition of fines, penalties or judgments against us or significant limitations on our activities. In addition the regulatory environment in which we operate is subject to change. New or revised requirements imposed by governmental authorities could have adverse effect on us, including increased cost of compliance. Changes in the regulation of our operations or changes in interpretations of existing regulations by courts or regulators or our inability to comply with current or future regulations could adversely affect us by reducing our revenues, increasing our operating expenses and exposing us to significant liabilities. Our business involves risks of liability associated with entertainment content, which could adversely affect our business, financial conditions or results of operations. As a developer and distributor of media content, we may face potential liability for any of: defamation, invasion of privacy, copyright infringement, actions for accountings or royalties, trademark infringement, trade secret misappropriation, breach of contract, negligence, and/or other claims based on the nature and content of the materials distributed.




These types of claims have been brought, sometimes successfully, against broadcasters, publishers, merchandisers, movie companies and distributors, online services and other developers and distributors of entertainment content. We could be exposed to liability in connection with material available through our internet sites. Any imposition of liability that is not covered by the limited liability insurance that we carry on our motion pictures productions could have a material effect on us.




Employees




We are a new, developing company and we currently have only one part-time employee who does not receive a salary, Ingo Jucht, who is Director and Chief Executive Officer of the Company. We look to Mr. Jucht for his entrepreneurial skills and talents. For information on Mr. Jucht’s experience please see “Directors, Executive Officers, Promoters and Control Persons”.




Corporate Contact Information




Our principal place of business and executive offices are located at 12021 Wilshire Blvd. #450, Los Angeles, California 90025. Telephone number: (510)-948-4000.




6




ITEM 1A.




RISK FACTORS




WE HAVE A LIMITED OPERATING HISTORY THAT YOU CAN USE TO EVALUATE US, AND THE LIKELIHOOD OF OUR SUCCESS MUST BE CONSIDERED IN LIGHT OF THE PROBLEMS, EXPENSES, DIFFICULTIES, COMPLICATIONS AND DELAYS FREQUENTLY ENCOUNTERED BY A SMALL DEVELOPING COMPANY.





We were incorporated in Wyoming in May 2008. We have limited financial resources and only limited revenues to date. The likelihood of our success must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered by a small developing company starting a new business enterprise and the highly competitive environment in which we will operate. Since we have a limited operating history, we cannot assure you that our business will be profitable or that we will ever generate sufficient revenues to fully meet our expenses and totally support our anticipated activities.





We estimate that we will have sufficient capital to operate for the next twelve (12) months and sufficient capital to complete the unfinished motion pictures we have in production. We cannot assure you, however, that we will be able to sustain the business for the long term nor that we may not need to obtain additional capital in the future. We can also not assure you that we will be able to obtain any required financing on a timely basis, or if obtainable, that the terms will not materially dilute the equity of our current stockholders. If we are unable to obtain financing on a timely basis, we may have to significantly or entirely curtail our business objectives, which could result in our having to discontinue some of our operations and plans.





WE DEPEND HIGHLY ON OUR CURRENT MANAGER WHO HAS LIMITED EXPERIENCE IN RUNNING A PUBLIC COMPANY AND NO FORMAL EMPLOYMENT AGREEMENT.




We depend highly on Ingo Jucht, our President, Treasurer, and Sole Director, who may be difficult to replace. Ingo Jucht who, also has other business interests,, at this point only devotes approximately 50% of his time per week to our business, has only several years of industry experience and has not previously headed a public Company. Our plan of operations is dependent upon the continuing support and expertise of Mr. Jucht.





LOSS OF OUR CEO COULD ADVERSLY AFFECT OUR BUSINESS




Loss of Mr. Jucht could slow the growth of our business, or it may cease to operate at all, which may result in the total loss of investor’s investments. Mr. Jucht is not, presently, receiving a salary from the Company it is unknown, at this time, if or when the Company may be able to compensate Mr. Jucht for his management services. The company does not anticipate Mr. Jucht receiving a salary in the foreseeable future however in September 2011 he was granted Company’s shares for his management services.





7





OUR MANAGEMENT HAS LIMITED EXPERIENCE IN RUNNING A PUBLIC COMPANY




Although, our managers have extensive experience in the film industry, our sole officer, Mr. Jucht, has no experience in running a public company. He is vaguely familiar with the reporting requirements of the Securities and Exchange Commission. Mr Jucht will rely on the expertise of outside counsel and consultants to insure proper filing and the meeting of deadlines.





SINCE A SINGLE STOCKHOLDER BENEFICIALLY OWNS THE SIGNIFICANT MAJORITY OF OUR OUTSTANDING COMMON SHARES, AND AS SUCH THAT SINGLE STOCKHOLDER WILL RETAIN THE ABILITY TO POTENTIALLY CONTROL OUR MANAGEMENT AND THE OUTCOME OF CORPORATE ACTIONS REQUIRING STOCKHOLDER APPROVAL NOTWITHSTANDING THE OVERALL OPPOSITION OF OUR OTHER STOCKHOLDERS. THIS CONCENTRATION OF OWNERSHIP COULD DISCOURAGE OR PREVENT A POTENTIAL TAKEOVER OF OUR COMPANY THAT MIGHT NEGATIVELY IMPACT THE VALUE OF YOUR COMMON SHARES.





Lux Digital Pictures GmbH Partners (“Lux GmbH”) owns approximately 62% of our outstanding common shares and 100% of the issued and outstanding Preferred Shares. As a consequence of its controlling stock ownership position, Lux, through its Operating Manager and representative Ingo Jucht, will retain the ability to elect a majority of our board of directors, and thereby control our management. Lux GmbH also has the ability to control the outcome of corporate actions requiring stockholder approval, including mergers and other changes of corporate control, any private transactions, and other extraordinary transactions. The concentration of ownership by Lux GmbH could discourage investments in our company, or prevent a potential takeover of our company which will have a negative impact on the value of our securities. Lux GmbH also has an anti-dilution clause in its agreement with the Company which it intends to activate in the 4th Quarter of 2011 which will result in further, substantial dilution to shareholders.





BECAUSE OF COMPETITIVE PRESSURES FROM COMPETITORS WITH MORE RESOURCES, LUX DIGITAL PICTURES MAY FAIL TO IMPLEMENT ITS BUSINESS MODEL PROFITABLY.





The independent motion picture business is highly fragmented and extremely competitive. The market for customers is intensely competitive and such competition is expected to continue to increase (see “Competition”). We believe that our ability to compete depends upon many factors within and beyond our control, including the timing and market acceptance of new solutions and enhancements to existing businesses developed by us, our competitors, and their advisors.





WE ARE DEPENDENT ON THE POPULARITY OF OUR FILM PRODUCTS.




Our ability to generate revenue and be successful in implementing our business plan is dependent on our ability to develop, produce, acquire and distribute entertainment products that are popular with audiences and sold via distribution channels that are efficient and cost effective.





WE MAY BE UNABLE TO COMPETE WITH LARGER OR MORE ESTABLISHED FILM COMPANIES.





We face a large and growing number of competitors in the film and entertainment industry. Many of these competitors have substantially greater financial, technical and marketing resources, larger customer bases, longer operating histories, greater name recognition, and more established relationships in the industry than does the Company. As a result, certain of these competitors may be in better positions to compete with us for product and audiences. We cannot be sure that we will be able to compete successfully with existing or new competitors.





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WE REQUIRE ADDITIONAL FINANCING IN ORDER TO IMPLEMENT OUR BUSINESS PLAN. IN THE EVENT WE ARE UNABLE TO ACQUIRE ADDITIONAL FINANCING, WE MAY NOT BE ABLE TO IMPLEMENT OUR BUSINESS PLAN RESULTING IN A LOSS OF REVENUES AND ULTIMATELY THE LOSS OF ANY SHAREHOLDER’S INVESTMENT.





Due to our limited operating history, we will have to use all our existing resources to complete and market our motion picture products and develop our distribution channels.





Following this offering we may need to raise additional funds to expand our operations. We may raise additional funds through private placements, registered offerings, debt financing or other sources to maintain and expand our operations. Adequate funds for this purpose on terms favorable to us may not be available, and if available, on terms significantly more adverse to us than are manageable. Without new funding, we may be only partially successful or completely unsuccessful in implementing our business plan, and our stockholders will lose part or all of their investment.




OUR PRODUCTS OR PROCESSES COULD GIVE RISE TO CLAIMS THAT OUR PRODUCTS INFRINGE ON THE RIGHTS OF OTHERS.





We are potentially subject to claims and litigation from third parties claiming that our products or processes infringe their patent or other proprietary rights. If any such actions are successful, in addition to any potential liability for damages, we could be required to obtain a license in order to continue to manufacture, use or sell the affected product or process. Litigation, which could result in substantial costs to us, may also be necessary to enforce our proprietary rights and/or to determine the scope and validity of the proprietary rights of others. Any intellectual property litigation would be costly and could divert the efforts and attention of our management and technical personnel, which could have a material adverse effect on our business, financial condition and results of operations. We cannot assure you that infringement claims will not be asserted in the future or that such assertions, if proven to be true, will not prevent us from selling our products or materially and adversely affect our business, financial condition and results of operations. If any such claims are asserted against us, we may seek to enter into a royalty or licensing arrangement. We cannot assure you that a license will be available on commercially reasonable terms, or at all.





WE MAY BE SUBJECT TO CLAIMS OF TRADEMARK INFRINGEMENT, WHICH MAY HARM OUR BUSINESS.





The Company has one, current trademark filed and pending for its DigiTheater business concept which is not yet fully developed. We may be subject to legal proceedings alleging claims of trademark infringement in the future. If we must rebrand, it may result in significant marketing expenses and additional management time and resources, which may adversely affect our business.





Additionally, we cannot guarantee that our trademarks will be completely protected. This could cause harm to our brand and ultimately, to us. We could also spend additional time and resources fighting other entities that might infringe upon our trademarks.





WE MAY BE UNABLE TO SCALE OUR OPERATIONS SUCCESSFULLY.




Our plan is to grow rapidly. Our growth will place significant demands on our management and technology development, as well as our financial, administrative and other resources. We cannot guarantee that any of the systems, procedures and controls we put in place will be adequate to support the commercialization of our operations. Our operating results will depend substantially on the ability of our officers and key employees to manage changing business conditions and to implement and improve our financial, administrative and other resources. If we are unable to respond to and manage changing business conditions, or the scale of our products, services and operations, then the quality of our services, our ability to retain key personnel and our business could be harmed.





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MR. JUCHT HAS LIMITED EXPERIENCE IN ALL OF THE ENTERTAINMENT BUSINESSES WE ARE ENTERING AND HE WILL BE RELIANT ON CONSULTANTS AND OTHERS WHO HAVE GREATER MANAGEMENT EXPERIENCE. THE LACK OF EXPERIENCE IN ALL OF THE BUSINESSES WE ARE ENTERING COULD IMPACT OUR RETURN ON INVESTMENT, IF ANY.





As a result of our reliance on Mr. Jucht and his limited experience in developing comparable film businesses, our investors are at risk in losing their entire investment. Mr. Jucht intends to hire personnel in the future who will have the experience required to manage our company, when the Company is sufficiently capitalized. Until such management is in place, we are reliant upon Mr. Jucht to make the appropriate management decisions.





BECAUSE OUR SECURITIES MAY BE SUBJECT TO PENNY STOCK RULES, YOU MAY HAVE DIFFICULTY RESELLING YOUR SHARES.





Since our stock may be subject to penny stock rules, you may have difficulty reselling your shares. Penny stocks are covered by section 15(g) of the Securities Exchange Act of 1934 which imposes additional sales practice requirements on broker/dealers who sell the Company’s securities including the delivery of a standardized disclosure document; disclosure and confirmation of quotation prices; disclosure of compensation the broker/dealer receives; and, furnishing monthly account statements. For sales of our securities, the broker/dealer may be required to make a special suitability determination and receive from its customer a written agreement prior to making a sale. The imposition of the foregoing additional sales practices could adversely affect a shareholder’s ability to dispose of his stock.




BECAUSE ALL OF OUR OFFICERS AND DIRECTORS ARE LOCATED IN NON-U.S. JURISDICTIONS, YOU MAY HAVE NO EFFECTIVE RECOURSE AGAINST THE MANAGEMENT FOR MISCONDUCT AND MAY NOT BE ABLE TO ENFORCE JUDGMENT AND CIVIL LIABILITIES AGAINST OUR OFFICERS, DIRECTORS, EXPERTS AND AGENTS.




All of our directors and officers are nationals and/or residents of countries other than the United States, and all or a substantial portion of such persons' assets are located outside the United States. All directors and officers are residing in Germany. As a result, it may be difficult for investors to enforce within the United States any judgments obtained against our officers or directors, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state thereof.




BECAUSE WE DO NOT INTEND TO PAY ANY DIVIDENDS ON OUR COMMON STOCK, INVESTORS SEEKING DIVIDEND INCOME OR LIQUIDITY SHOULD NOT PURCHASE SHARES OF OUR COMMON STOCK.




We have not declared or paid any dividends on our common stock since our inception, and we do not anticipate paying any such dividends for the foreseeable future. Investors should not rely on an investment in our company if they require dividend income and income to them would only come from any rise in the market price of our stock, which is uncertain and unpredictable.




BECAUSE WE CAN ISSUE ADDITIONAL SHARES OF COMMON STOCK, HOLDERS OF OUR COMMON STOCK MAY INCUR IMMEDIATE DILUTION AND MAY EXPERIENCE FURTHER DILUTION.




We are authorized to issue up to 1,000,000,000 shares of common stock, of which 61,268,701 shares are issued and outstanding as of August 31, 2011. Our Board of Directors has the authority to cause the Company to issue additional shares of common stock, and to determine the rights, preferences and privilege of such shares, without the consent of any of our stockholders. Consequently, the stockholder may experience more dilution in their ownership of Lux Digital Pictures in the future, as the issuance by us of additional equity securities would result in further dilution in the equity interests of our current stockholders.




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THERE IS A LIMITED TRADING MARKET FOR OUR COMMON STOCK AND YOU MAY BE UNABLE TO SELL YOUR SHARES OF OUR COMMON STOCK IF A MARKET DOES NOT DEVELOP FOR OUR COMMON STOCK.




There is currently a limited active trading market for our common stock and such a market may not further develop or be sustained. The market price of our common stock may be significantly affected by factors such as actual or anticipated fluctuations in our operation results, general market conditions and other factors. In addition, the stock market has from time to time experienced significant price and volume fluctuations that have particularly affected the market prices for the shares of developmental stage companies, which may materially and adversely affect the market price of our common stock.




OUR STOCK IS A PENNY STOCK. TRADING OF OUR STOCK MAY BE RESTRICTED BY THE SEC'S PENNY STOCK REGULATIONS AND THE NASD'S SALES PRACTICE REQUIREMENTS, WHICH MAY LIMIT ASTOCKHOLDER'S ABILITY TO BUY AND SELL OUR STOCK.




Our stock is a penny stock. The U.S. Securities and Exchange Commission has adopted regulations which generally define "penny stock" to be any equity security that has a market price less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are subject to the penny stock rules promulgated by the Securities and Exchange Commission, which imposes rules of additional sales practice disclosure requirements. The rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document, which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer's account. The bid and offer quotations and the broker-dealer and salesperson compensation information must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock and adversely affect the price of our shares.




In addition to the "penny stock" rules, the NASD has adopted rules requiring that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for the customer. The NASD requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.




11





ITEM 1B.     UNRESOLVED STAFF COMMENTS.




None




ITEM 2.        DESCRIPTION OF PROPERTY




The Company maintains offices at 12021 Wilshire Blvd. #450, Los Angeles, California. Our Company CEO provides the offices to us at no cost.




ITEM 3.        LEGAL PROCEEDINGS




None.




ITEM 4.        SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS




None, except as previously disclosed.




12





PART II




ITEM 5.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS




Market Information




Our common stock is listed and traded on the Over-the-Counter Electronic Bulletin Board Exchange and the OTCQB Exchange under the symbol “LUXD.OB”. As of November 28, 2011 the Company’s stock had a bid price of $.0065 and an ask price of $.0080.




Rules Governing Low-Price Stocks that May Affect Our Shareholders' Ability to Resell Shares of Our Common Stock




Quotations on the OTC/BB reflect inter-dealer prices, without retail mark-up, markdown or commission and may not reflect actual transactions.  Our common stock may be subject to certain rules adopted by the SEC that regulate broker-dealer practices in connection with transactions in "penny stocks".  Penny stocks generally are securities with a price of less than $5.00, other than securities registered on certain national exchanges or quoted on Nasdaq system, provided that the exchange or system provides current price and volume information with respect to transaction in such securities.  The additional sales practice and disclosure requirements imposed upon broker-dealers may discourage broker-dealers from effecting transactions in our shares which could severely limit the market liquidity of the shares and impede the sale of our shares in the secondary market.




The penny stock rules require broker-dealers, prior to a transaction in a penny stock not otherwise exempt from the rules, to make a special suitability determination for the purchaser to receive the purchaser’s written consent to the transaction prior to sale, to deliver standardized risk disclosure documents prepared by the SEC that provides information about penny stocks and the nature and level of risks in the penny stock market.  The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock.  In addition, the penny stock regulations require the broker-dealer to deliver, prior to any transaction involving a penny stock, a disclosure schedule prepared by the SEC relating to the penny stock market, unless the broker-dealer or the transaction is otherwise exempt.  A broker-dealer is also required to disclose commissions payable to the broker-dealer and the registered representative and current quotations for the securities.  Finally, a broker-dealer is required to send monthly statements disclosing recent price information with respect to the penny stock held in a customer's account and information with respect to the limited market in penny stocks.




Holders




As of the date of this report, we have approximately 101 shareholders of record of the Company’s common stock.




Dividends.




We have not paid any dividends to our shareholders.  There are no restrictions which would limit our ability to pay dividends on common equity or that are likely to do so in the future. Wyoming General Corporation Law, however, prohibits us from declaring dividends where, after giving effect to the distribution of the dividend, we would not be able to pay our debts as they become due in the usual course of business; or if our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution.




13





Material Subsequent Events.




On September 19, 2011 the Company entered into agreement with a third party for a Convertible Note of $78,500, which the holder may elect to convert to common stock, after 6 months, at a 39% discount to market price. On September 23, 2011 the Company entered into a Management Agreement with its CEO to provide him common shares as compensation for his services in lieu of cash compensation. Our Company CEO will be entitled to receive 1,250,000 new common shares per Quarter, which will be issued in accordance with the Company S-8 Registration Statement No. 333-177311 filed and effective as of October 14, 2011. On November 29, 2011 the Company issued a Resolution to convert the 2,500,000 Preferred Shares held by its principal shareholder into 25,000,000 new shares of its common stock and the Company also resolved to issue 34,200,000 new shares of common stock to its principal shareholder to fully resolve an anti-dilution provision contained in its agreement dated June 8, 2008 with Lux Digital Pictures GmbH.




EQUITY COMPENSATION PLAN INFORMATION




Number of

securities to be

issued upon

exercise of

outstanding

options,

warrants and

rights (a)


Weighted

average

exercise

price of

outstanding

options,

warrants

and rights

(b)


Number of securities

remaining available

for future issuances

under equity

compensation plans

(excluding securities

reflected in column

(a)) (c)Equity compensation plans approved by

security holders


0



0



0Equity compensation plans not approved

by security holders


0



0



0Total


0



0



0




Recent Sales of Unregistered Securities




NONE




14




ITEM 6. SELECTED FINANCIAL DATA




August 31, 2011


August 31, 2010ASSETSTotal Current Assets


283,628



372,864Other AssetsUnamortized film costs, net


295,414



406,150TOTAL ASSETS

$
585,852


$
779,014LIABILITIES AND STOCKHOLDERS’ EQUITYTotal Current Liabilities


127,640



156,682STOCKHOLDERS’ EQUITYCommon stock (1,000,000,000 shares authorized; $.001 par value; 61,268,701 and 50,273,400 shares issued and outstanding, respectively)


61,268



50,273Preferred stock (10,000,000 shares authorized; $.001 par value; 2,500,000 shares issued and outstanding)


2,500



2,500Paid in capital


704,008



673,503Retained earnings


(309,964
)


(104,344
)Total Stockholders’ Equity


458,212



622,332TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$
585,852


$
779,014




August 31, 2011


August 31, 2010GROSS REVENUES

$
305,140


$
133,681TOTAL OPERATING EXPENSES


349,546



307,640NET OPERATING INCOME (LOSS)


(44,406
)


(173,959
)TOTAL OTHER INCOME (EXPENSE)


(107,629
)


9,726NET INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES


(152,035
)


(164,233
)PROVISION FOR INCOME TAX EXPENSE (BENEFIT)


(53,585
)


(55,000
)NET INCOME (LOSS)

$
(205,620
)

$
(109,233
)WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING FOR THE PERIOD


51,567,308



48,895,718NET INCOME (LOSS) PER SHARE

$
(0.00
)

$
0.00




15





ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS




Certain statements in this Management's Discussion and Analysis of Financial Condition and Results of Operations which are not historical facts are forward-looking statements such as statements relating to future operating results, existing and expected competition, financing and refinancing sources and availability and plans for future development or expansion activities and capital expenditures.  Such forward-looking statements involve a number of risks and uncertainties that may significantly affect our liquidity and results in the future and, accordingly, actual results may differ materially from those expressed in any forward-looking statements.  Such risks and uncertainties include, but are not limited to, those related to effects of competition, maintaining sufficient working capital for our operations, and the general economic conditions and environment in which we operate.  The following discussion and analysis should be read in conjunction with the consolidated financial statements and notes thereto appearing elsewhere in this report.




OVERVIEW




We were incorporated on May 6, 2008. Under the Securities Act of 1933, our registration statement was deemed effective by the Securities and Exchange Commission and declared effective on May 21, 2009.




We were formed to develop businesses, assets and opportunities, some acquired and contributed from third parties and our founding shareholders, in the motion picture production and distribution industry and some related fields. Lux Digital Pictures, Inc. (“Lux” or the “Company”) operates its businesses under several names and divisions (“brands”). The Company is attempting to compete in today’s entertainment industry marketplace by controlling production costs and by limiting its distribution expenses using, primarily, online marketing tools to promote its products and to further develop its digital strategies and by using third part distributors. The Company is also exploring opportunities to grow and expand more rapidly through acquisition of other existing businesses.




The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements.




Significant Accounting Policies and Estimates




Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses the Company’s consolidated financial statements which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates and judgments on historical experiences and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.




16





Revenue Recognition




Revenue consists substantially of fees earned from movies and videos that we have interests in. We recognize revenue from a sale or licensing arrangement of a film when all of the following conditions are met: persuasive evidence of a sale or licensing arrangement with a customer exists; the film is complete and, in accordance with the terms of the arrangement, has been delivered or is available for immediate and unconditional delivery; the license period of the arrangement has begun and the customer can begin its exploitation, exhibition, or sale; the arrangement fee is fixed or determinable; and collection of the arrangement fee is reasonably assured.




Unamortized Film Costs




Unamortized film costs consist of investments in films which have been produced and distributed either directly by the Company or through third party licensing agreements. The costs include all direct production and financing costs and production overhead. Costs of acquiring and producing films are amortized using the individual-film-forecast method, whereby these costs are amortized and participation and residual costs are accrued in the proportion that current year’s revenue bears to management’s estimate of ultimate revenue at the beginning of the current year expected to be recognized from the exploitation, exhibition or sale of the films.




Ultimate revenue includes estimates over a period not to exceed ten years following the date of initial release. Unamortized film costs are stated at the lower of amortized cost or estimated fair value on an individual film basis. The valuation of investment in films is reviewed on a title-by-title basis, when an event or changes in circumstances indicates that the fair value of a film is less than its unamortized cost. The fair value of the film is determined using management’s future revenue and cost estimates. Additional amortization is recorded in the amount by which the unamortized costs exceed the estimated fair value of the film. Estimates of future revenue involve measurement uncertainty and it is therefore possible that reductions in the carrying value of investment in films may be required as a consequence of changes in management’s future revenue estimates.




Use of Estimates




The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires us to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statement and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from the estimates.





17





Results of Operations for the year ending August 31, 2011





Assets




As of the fiscal year ending August 31, 2011 the Company had Total Assets of $585,852, Total Current Liabilities of $127,640 and Total Stockholders’ Equity of $458,212 compared with Total Assets of $779,014, Total Current Liabilities of $156,682 and Total Stockholders’ Equity of $779,014 for the Company’s prior fiscal year ending August 31, 2010. The decrease in Company assets in the current fiscal year is, principally, attributable to the write down of an impaired $100,000 advertising asset and more aggressive amortization of our film product during the year. The decrease in Total Current Liabilities was, primarily, due to the Convertible Note holder converting a substantial portion of the Note into common stock during the year and the decrease in Stockholder’s Equity was due, primarily, to the Company taking a significant write down as result of an impaired advertising asset and the significant accelerated amortization of some of its film product.





Revenue and Operating Expense




For the fiscal year ending August 31, 2011 the Company had Gross Revenues of $305,140 compared with Gross Revenues of $133,681 for the Company’s prior fiscal year ending August 31, 2010. The increase of Gross Revenues in the current fiscal year was due, primarily, to the Company collecting more revenues from its motion picture releases including booking contractual obligations from distributors for the prequel “Night of the Living Dead 3D: Reanimation” and “Films of Fury” plus continuing domestic VOD and DVD revenues from “Nightmares in Red, White and Blue” and “American Grindhouse”, which we expect to continue to produce steady revenues for the Company through fiscal 2012. For the fiscal year ending August 31, 2011 the Company had Total Operating Expenses of $349,546 compared with Total Operating Expenses of $307,640 for the Company’s prior fiscal year ending August 31, 2010. The increase in Total Operating Expenses was, primarily, due to the Company more aggressively amortizing its film product including new releases “Night of the Living Dead 3D: Reanimation” and “Films of Fury” for which the Company could not, reasonably, forecast material revenues, in the near term, beyond their contractual advance guarantees.





Net Income and Loss




For the fiscal year ending August 31, 2011 the Company had a Net Loss of $205,620 compared with Net Loss of $109,233 for the Company’s prior fiscal year ending August 31, 2010. The Company’s larger Net Loss in its current fiscal year is, primarily, due to the Company’s write down of a $100,000 advertising asset, $239,732 in film cost amortization and a $53,585 income tax provision.





18





Liquidity and Capital Resources




As of the period ending August 31, 2011 the Company had $34,928 in cash, $248,700 in Accounts Receivable and $295,414 in net unamortized film costs. As of August 31, 2010 the Company had $133,537 in cash, $64,500 in Accounts Receivable and $406,150 in net unamortized film costs. The Company’s cash was generated from a shareholder loan, revenue from its motion picture distribution, proceeds from a Convertible Note and interest income from its money market account. The decrease of cash was due to greater investment into its motion pictures product during the year and no new third party Debt contributions in the period. The increase in Accounts Receivable is due, primarily, to payments due for new motion picture product distribution being contractually payable after the fiscal year end. At the end of fiscal 2011 the Company had only $28,500 remaining on the Convertible Note, which was fully paid down right after the end of the fiscal year, and the Company has, subsequent to the period, entered into agreement with the Convertible Note holder for a new loan of $78,500, effective September 19, 2011, under the same terms and conditions. The Company believes that as a result of the new Convertible Note and projected film product revenues it has sufficient cash resources available to fund its primary operations for the next twelve (12) months subject to collecting booked receivables. The Company also expects to continue to explore ways in which to raise new capital to expand and grow its business including through additional Convertible Notes, co-productions and re-capitalizations. The Company has no, current, off balance sheet arrangements and does not anticipate entering into any off balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition. The Company has no agreements in place with its shareholders, officer and director or with any third parties to fund operations. The Company has not negotiated nor has available to it any other third party sources of liquidity.





Recent Accounting Pronouncements




During the fiscal year ending August 31, 2011 there have been no new accounting pronouncements which are expected to significantly impact our consolidated financial statements.





Controls and Procedures




19





Evaluation of Disclosure Controls and Procedures





The Company carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of August 31, 2009.  This evaluation was accomplished under the supervision and with the participation of our chief executive officer / principal executive officer, and chief financial officer / principal financial officer who concluded that our disclosure controls and procedures are currently effective to ensure that all material information required to be filed in the annual report on Form 10-K has been made known to them.





For purposes of this section, the term disclosure controls and procedures means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Act (15 U.S.C. 78a et seg.) is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms.  Disclosure, controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by in our reports filed under the Securities Exchange Act of 1934, as amended (the "Act") is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.





Based upon an evaluation conducted for the period ended August 31, 2011, our Chief Executive Officer and Chief Financial Officer as of August 31, 2011, and as of the date of this Report, have concluded that as of the end of the periods covered by this report, they have identified no material weakness of Company internal controls.





Corporate expenses incurred are processed and paid by the officers of the Company.  The current number of transactions is not sufficient to justify the retaining of additional accounting personnel.





20





Management’s Report on Internal Control over Financial Reporting





Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our internal control system was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes, in accordance with generally accepted accounting principles in the United States of America.  Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.





Because of inherent limitations, a system of internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate due to change in conditions, or that the degree of compliance with the policies or procedures may deteriorate.





Our management conducted an evaluation of the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework.  Based on its evaluation, our management concluded that, as of August 31, 2009, our internal control over financial reporting was effective.





This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting.  Management’s report was not subject to the attestation by the Company’s registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this annual report.





Changes in Internal Controls over Financial Reporting





We have not yet made any changes in our internal controls over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.




ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





Not applicable




21
 
 
 LUX DIGITAL PICTURES, INC.
 
 TABLE OF CONTENTS
 
 AUGUST 31, 2011
  CONTENTS
  PAGEReport of Independent Registered Public Accounting Firm


F-1Balance Sheets as of August 31, 2011 and 2010


F-2Statements of Operations for the years ended August 31, 2011 and 2010


F-3Statement of Stockholders’ Equity as of August 31, 2011


F-4Statements of Cash Flows for the years ended August 31, 2011 and 2010


F-5Notes to the Financial Statements


F-6  to F-12
  22
  Silberstein Ungar, PLLC CPAs and Business Advisors
 Phone (248) 203-0080
 Fax (248) 281-0940
 30600 Telegraph Road, Suite 2175
 Bingham Farms, MI 48025-4586
 www.sucpas.com
 
 Report of Independent Registered Public Accounting Firm
 
 To the Board of Directors
 Lux Digital Pictures, Inc.
 Los Angeles, California
 
 We have audited the accompanying balance sheets of Lux Digital Pictures, Inc. as of August 31, 2011 and 2010, and the related statements of operations, stockholders’ equity and cash flows for the years then ended.  These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our audit.
 
 We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Company has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.  Accordingly, we express no such opinion.  An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.
 
 In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Lux Digital Pictures, Inc. as of August 31, 2011 and 2010, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
 
 
 /s/ Silberstein Ungar, PLLC
 Silberstein Ungar, PLLC
 
 Bingham Farms, Michigan
 November 29, 2011
 
 F-1
 
 LUX DIGITAL PICTURES, INC.
 BALANCE SHEETS
 AS OF AUGUST 31, 2011 AND 2010
  August 31, 2011


August 31, 2010ASSETSCurrent AssetsCash

$
34,928


$
133,537Accounts receivable


248,700



64,500Prepaid advertising


0



100,000Prepaid consulting


0



11,542Deferred tax asset


0



63,285Total Current Assets


283,628



372,864Property and equipment, net


6,810



0Other AssetsUnamortized film costs, net


295,414



406,150TOTAL ASSETS

$
585,852


$
779,014LIABILITIES AND STOCKHOLDERS’ EQUITYLiabilitiesCurrent LiabilitiesAccounts payable

$
22,020


$
11,621Accrued taxes


0



9,700Accrued interest


15,573



7,811Estimated costs to complete films


15,000



42,500Note payable – legal


17,997



0Note payable – shareholder


13,500



0Note payable – shareholder


15,050



15,050Convertible note payable


28,500



70,000Total Current Liabilities


127,640



156,682STOCKHOLDERS’ EQUITYCommon stock (1,000,000,000 shares authorized; $.001 par value; 61,268,701 and 50,273,400 shares issued and outstanding, respectively)


61,268



50,273Preferred stock (10,000,000 shares authorized; $.001 par value; 2,500,000 shares issued and outstanding)


2,500



2,500Paid in capital


704,008



673,503Treasury stock


400



400Accumulated deficit


(309,964
)


(104,344
)Total Stockholders’ Equity


458,212



622,332TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$
585,852


$
779,014
  The accompanying notes are an integral part of the financial statements.
 
 F-2
  LUX DIGITAL PICTURES, INC.
 STATEMENTS OF OPERATIONS
 FOR THE YEARS ENDED AUGUST 31, 2011 AND 2010
  Year ended August 31, 2011


Year ended August 31, 2010GROSS REVENUES

$
305,140


$
133,681OPERATING EXPENSESBank fees


504



121Consulting fees


12,472



4,542Depreciation


1,135



0Filing fees


2,791



4,012General administrative expenses


19,355



36,171Insurance


11,813



5,790Licenses


200



0Marketing


150



2,000Office expenses


19,808



0Professional fees/Compensation


32,672



27,438Travel


5,814



4,202Utilities


3,100



4,453Amortization of film costs


43,499



23,500Impairment of film costs


196,233



195,411TOTAL OPERATING EXPENSES


349,546



307,640LOSS FROM OPERATIONS


(44,406
)


(173,959
)OTHER INCOME (EXPENSE)Impairment of prepaid advertising


(100,000
)


0Interest income


133



479Interest expense


(7,762
)


(7,811
)Recovery of bad debt


0



18,000Bad debt expense


0



(942
)TOTAL OTHER INCOME (EXPENSE)


(107,629
)


9,726LOSS BEFORE PROVISION FOR INCOME TAXES


(152,035
)


(164,233
)(PROVISION) BENEFIT FOR INCOME TAX EXPENSE


(53,585
)


55,000NET LOSS

$
(205,620
)

$
(109,233
)WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING FOR THE PERIOD


51,567,308



48,895,718NET LOSS PER SHARE

$
(0.00
)

$
(0.00
)
 
 The accompanying notes are an integral part of the financial statements.
 
 F-3
  LUX DIGITAL PICTURES, INC.
 STATEMENT OF STOCKHOLDERS’ EQUITY
 AS OF AUGUST 31, 2011
 
 Common Stock


Preferred Stock


Additional

Paid


Treasury


Retained EarningsShares


Amount


Shares


Amount


in Capital


Stock


(Deficit)


TotalBalance, August 31, 2008


47,990,000


$
47,990



2,500,000


$
2,500


$
644,352


$
0


$
33,569


$
728,411Net loss for the year ended August 31, 2009


-



-



-



-



-



-



(28,680
)


(28,680
)Balance, August 31, 2009


47,990,000



47,990



2,500,000



2,500



644,352



0



4,889



699,731Issuance of common stock as compensation


500,000



500



-



-



9,500



-



-



10,000Issuance of common stock for services at $0.01 per share


2,183,400



2,183



-



-



19,651



-



-



21,834Shares returned to treasury


(400,000
)


(400
)


-



-



-



400



-



0Net loss for the year ended August 31, 2010


-



-



-



-



-







(109,233
)


(109,233
)Balance, August 31, 2010


50,273,400



50,273



2,500,000



2,500



673,503



400



(104,344
)


622,332Issuance of common stock in exchange for convertible debt


10,995,301



10,995



-



-



30,505



-



-



41,500Net loss for the year ended August 31, 2011


-



-



-



-



-



-



(205,620
)


(205,620
)Balance, August 31, 2011


61,268,701


$
61,268



2,500,000


$
2,500


$
704,008


$
400


$
(309,964
)

$
458,212
  The accompanying notes are an integral part of the financial statements.
 
 F-4
 
 LUX DIGITAL PICTURES, INC.
 STATEMENTS OF CASH FLOWS
 FOR THE YEARS ENDED AUGUST 31, 2011 AND 2010
 
 Year ended August 31, 2011


Year ended August 31, 2010Cash Flows from Operating Activities:Net loss for the year

$
(205,620
)

$
(109,233
)Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:Depreciation


1,135



0Impairment of film assets


196,233



195,411Impairment of prepaid advertising


100,000



0Stock issued for services


0



21,834Stock issued as compensation


0



10,000Bad debt expense


0



942Amortization of film assets


43,499



23,500Deferred tax provision


53,585



(55,000
)Changes in Assets and Liabilities(Increase) in accounts receivable


(184,200
)


(37,442
)(Increase) decrease in prepaid consulting


11,542



(11,542
)Increase (decrease) in accounts payable


10,399



(2,992
)(Decrease) reserve for residuals and participants


0



(2,500
)Increase in accrued interest – related parties


7,762



7,811Increase (decrease) in estimated costs to complete films


(27,500
)


12,500Net Cash Provided by Operating Activities


6,835



53,289Cash Flows from Investing Activities:Purchase of assets


(7,945
)


0Investment in new films


(128,996
)


(111,770
)Net Cash Used in Investing Activities


(136,941
)


(111,770
)Cash Flows from Financing Activities:Proceeds from loans


31,497



0Proceeds (repayment) convertible note payable – related party


0



70,000Net Cash Provided by  Financing  Activities


31,497



70,000Net Increase (Decrease) in Cash and Cash Equivalents


(98,609
)


11,519Cash and Cash Equivalents – Beginning


133,537



122,018Cash and Cash Equivalents – Ending

$
34,928


$
133,537Supplemental Cash Flow Information:Cash Paid for Interest

$
0


$
0Cash Paid for Income Taxes

$
0


$
0Supplemental Non-Cash Investing and Financing TransactionsConversion of debt to common stock

$
41,500


$
70,000Reclassification of accounts receivable to unamortized film costs

$
0



33,400
 
 The accompanying notes are an integral part of the financial statements.
 
 F-5
 
 LUX DIGITAL PICTURES, INC.
 NOTES TO FINANCIAL STATEMENTS
 AUGUST 31, 2011
 
 NOTE 1: NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
 
 The Company
  Lux Digital Pictures, Inc. was incorporated on May 6, 2008 under the laws of the State of Wyoming. Lux Digital Pictures, Inc. is referred to herein as the "Company". The Company operates in the entertainment industry; specifically, in connection with the development, production, marketing and distribution of digital films.
 
 Use of Estimates
  The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statement and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from the estimates.
 
 Cash Equivalents
  For purposes of reporting cash flows, the Company considers all short-term investments with an original maturity of three months or less to be cash equivalents.
 
 Property and Equipment
  The capital assets are being depreciated over their estimated useful lives using the straight-line method of depreciation for book purposes.
 
 Revenue Recognition
  Revenue consists substantially of fees earned from movies and videos that we have interests in. We recognize revenue from a sale or licensing arrangement of a film when all of the following conditions are met:  persuasive evidence of a sale or licensing arrangement with a customer exists; the film is complete and, in accordance with the terms of the arrangement, has been delivered or is available for immediate and unconditional delivery; the license period of the arrangement has begun and the customer can begin its exploitation, exhibition, or sale; the arrangement fee is fixed or determinable; and collection of the arrangement fee is reasonably assured.
 
 Advertising
  The Company reports the costs of future economic benefits that it expects will result from some or all advertising as assets when the costs are incurred and amortizes the costs to expense in the current and subsequent periods, as the advertising takes place.  If it determined that advertising that has been paid for will not be used, then expense is recorded at the time of that determination. See Note 3.
 
 Fair Value of Financial Instruments
  The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, prepaid consulting, prepaid advertising, deferred tax assets, accounts payable, accrued taxes, accrued interest, note payable and convertible note payable. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.
 
 F-6
 
 LUX DIGITAL PICTURES, INC.
 NOTES TO FINANCIAL STATEMENTS
 AUGUST 31, 2011
 
 NOTE 1: NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (continued)
 
 Unamortized Film Costs
  Unamortized film costs consist of investments in films which include the costs of completed films which have been produced by the Company. The costs include all direct production and financing costs and production overhead. Costs of acquiring and producing films are amortized using the individual-film-forecast method, whereby these costs are amortized and participation and residual costs are accrued in the proportion that current year’s revenue bears to management’s estimate of ultimate revenue at the beginning of the current year expected to be recognized from the exploitation, exhibition or sale of the films.
 
 Ultimate revenue includes estimates over a period not to exceed ten years following the date of initial release.  Unamortized film costs are stated at the lower of amortized cost or estimated fair value on an individual film basis. The valuation of investment in films is reviewed on a title-by-title basis, when an event or changes in circumstances indicates that the fair value of a film is less than its unamortized cost. The fair value of the film is determined using management’s future revenue and cost estimates. Additional amortization is recorded in the amount by which the unamortized costs exceed the estimated fair value of the film. Estimates of future revenue involve measurement uncertainty and it is therefore possible that reductions in the carrying value of investment in films may be required as a consequence of changes in management’s future revenue estimates. See Note 2.
 
 Income Taxes
  The Company uses the asset and liability method of accounting of income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  We evaluate deferred tax assets to determine whether it is more likely than not that they will be realized.  To the extent we believe that realization is not likely, we establish a valuation allowance.  See Note 6.
 
 Comprehensive Income
  The Company established standards for reporting and display of comprehensive income, its components and accumulated balances. When applicable, the Company would disclose this information on its Statement of Stockholder’s Equity. Comprehensive income comprises equity except those resulting from investments by owners and distributions to owners. The Company has not had any transactions that are required to be reported in other comprehensive income.
 
 Basic and Diluted Income (Loss) Per Share
  Basic earnings (loss) per common share is computed by dividing net income or (loss) available to common stockholders by the weighted average number of common shares outstanding. Diluted earnings per common share is computed similar to basic earnings per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. At August 31, 2011 the Company had no stock equivalents that were anti-dilutive and excluded in the earnings per share computation.
 
 Recent Accounting Pronouncements
  The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the results of its operations, financial position or cash flow.
 
 F-7
 
 LUX DIGITAL PICTURES, INC.
 NOTES TO FINANCIAL STATEMENTS
 AUGUST 31, 2011
 
 NOTE 2:  PROPERTY AND EQUIPMENT
 
 Property and equipment consist of the following as of August 31, 2011 and 2010:
 
 2011


2010Furniture and fixtures

$
7,945


$
0Less accumulated depreciation


(1,135
)


0Property and equipment, net

$
6,810


$
0
 
 NOTE 3:  UNAMORTIZED FILM COSTS
 
 Unamortized Film Costs included the following as of August 31, 2011 and 2010:
 
 2011


2010Night of the Living Dead 3D,

$
59,221


$
59,221Nightmares in Red, White and Blue , American Grindhouse and


138,181



138,181Area 51: The Alien Interview film assets


200,000



200,000Acquisition of remaining 50% of Alien film


33,400



33,400Production contracts


26,000



26,000Media insurance and legal opinion


38,771



38,000SAG residuals


7,500



7,500Films of Fury


119,847



82,223Gameplay


45,304



41,112Money for Nothing


51,135



41,112Night of the Living Dead 3D Prequel


76,386



0Total Unamortized Film Costs


795,745



666,749Less: amortization


(108,687
)


(65,188
)Less: impairment charges


(391,644
)


(195,411
)Unamortized Film Costs, net

$
295,414


$
406,150
 
 Unamortized film costs assigned to film asset purchases and film production and marketing expenses include costs for completed motion pictures “Night of the Living Dead 3D”, “Nightmares in Red, White and Blue”, “American Grindhouse” and “Area 51: The Alien Interview”, all of which remain in worldwide distribution, and recently completed motion pictures “Films of Fury” and the ‘prequel’ to “Night of the Living Dead 3D”, “Night of the Living Dead 3D:Reanimation”, as well as two films still in production “Gameplay” and “Money For Nothing”, a development project “Fanime” and certain production contracts, media insurance and legal costs.
 
 The Company originally issued shares of its stock in 2008 valued at $397,402 to acquire films assets including “Night of the Living Dead 3D”, two films in developments and an interest in “Area 51; The Alien Interview” and, subsequently, forgave an additional $33,400 in debt to acquire full ownership of “Area 51: The Alien Interview”. In its fiscal year ended August 31, 2010 the Company, in addition to its customary amortization of these capitalized expenses, recognized a $195,411 impairment charge to “Area 51:The Alien Interview” based on conservative estimates of future revenues. The other original films and projects continue to meet revenue forecasts and the Company has amortized an additional $31,500 for these films for the fiscal year ended August 31, 2011.
 
 F-8
 
 LUX DIGITAL PICTURES, INC.
 NOTES TO FINANCIAL STATEMENTS
 AUGUST 31, 2011
 
 NOTE 3:  UNAMORTIZED FILM COSTS (CONTINUED)
 
 The Company has secured both domestic and international distribution for its recently completed motion picture “Films of Fury” and has entered into licensing contracts which provide for advance guarantees. The Company is conservatively estimating that this film will not, likely, earn revenues beyond the contracted guarantees, during the next two years, so it is electing to fully impair the $119,847 in costs accrued in connection with the production and marketing of this film in its fiscal year ended August 31, 2011.
 
 As of August 31, 2011 the Company’s motion picture ‘Night of the Living Dead 3D: Reanimation” was in its final stages of production and the Company has contracted for its worldwide distribution, which provides for an advance guarantee payable to the Company for these rights. The Company estimates that it will not collect additional revenues beyond the advance guarantee, within the next two years, so it has, elected to impair $76,386 of its investment in this film for the fiscal year ended August 31, 2011.
 
 The Company’s motion pictures “Gameplay” and “Money For Nothing” continue to progress in production and are expected to be completed in late 2011 or early 2012. The Company will begin to amortize those capitalized expenses in its next fiscal year.
 
 NOTE 4: PREPAID EXPENSES
 
 Prepaid advertising
  The Company acquired rights to radio media from RTV Media Corp. on June 1, 2008 in exchange for 2,000,000 shares of common stock, which we valued at $.10 per share.  The Company was assigned rights to receive certain radio media, approximately 1,000 sixty second ads or 2,000 thirty second ads, or some combination of both on a national radio network.  At August 31, 2008 we estimated that only $100,000 of the media rights would be used in the future. In its 3rd Quarter of its fiscal year ending August 31, 2011 the Company determined that there was no, current, certainty that this assets would be , timely, utilized so the asset has been determined to be impaired and an expense of $100,000 has been recognized. The carrying value of the prepaid advertising is $0 at August 31, 2011.
 
 Prepaid consulting
  The Company entered into two consulting agreements during the year ended August 31, 2010.  In exchange for consulting services, 208,400 and 1,400,000 shares of common stock were issued at a total value of $16,084. The consulting services are being expensed over the term of the contracts which is one year in both cases.  The remaining balance of prepaid consulting was $0 as of August 31, 2011.
 
 NOTE 5: NOTE PAYABLE – LEGAL
 
 The Company entered into negotiations, during the period for a reverse merger.  After careful due diligence it was determined that the prospective merger candidate misrepresented itself and its financial position thus ending the reverse merger.  The prospective merger candidate had a written contract to assume all legal costs in connection with the transaction however they failed to pay the debts.  The Company has assumed the legal costs believing that it may have use for the work product in the future.  The Company entered into an unsecured note with a law firm as means of paying these legal fees. The terms of the note are 7.5% interest with full payment due on or before July 31, 2012.  The balance of the note payable at August 31, 2011 is $17,997.
 
 
 F-9
 
 LUX DIGITAL PICTURES, INC.
 NOTES TO FINANCIAL STATEMENTS
 AUGUST 31, 2011
 
 NOTE 6: NOTES PAYABLE – SHAREHOLDERS
 
 The Company’s principal shareholder, Lux Digital Pictures GmbH loaned the Company $15,050 on May 29, 2008. The loan is unsecured, bears 18% interest and is due on demand.  Interest expense of $2,709 was recorded on this loan during the year ended August 31, 2011.
 
 One of the Company’s shareholders loaned the Company $13,500 on March 30, 2011. The loan is unsecured, bears no interest if the balance is paid in full by December 31, 2011.  If unpaid at that date the Company agrees to pay 10% interest and the loan becomes is due on demand.  Interest expense of $0 was recorded on this loan during the year ended August 31, 2011.
 
 NOTE 7: CONVERTIBLE NOTE PAYABLE
 
 The Company issued a convertible note for $70,000 to an unrelated party on May 14, 2010.  The note bears 8% interest and matured on February 14, 2011. The note is convertible into shares of common stock of the Company beginning 120 days after the issuance and up until the note comes due (or later if extended).  The note is convertible into shares of common stock at a rate of 61% of the market price on the date of conversion.  The investor will be limited to convert no more than 4.99% of the issued and outstanding common stock at time of conversion at any one time. Interest expense of $1,688 was recorded on this loan during the year ended August 31, 2010.
 
 On February 9, 2011, the Company converted $10,000 of the loan to 1,265,823 shares of common stock.
 
 On August 10, 2011, the Company converted $31,500 of the loan to 9,729,478 shares of common stock.
 
 Interest expense of $5,053 was recorded on this loan for the year ended August 31, 2011.  The balance due on the convertible note payable was $28,500 as of August 31, 2011. Subsequent to the end of the fiscal year, in early September 2011 the Note holder fully converted the Note and the debt has been fully paid. The Company has, subsequent to the end of its fiscal year on September 27, 2011, entered into a new agreement with the Investor for a Convertible Note for $78,500 on similar terms as the prior Note.
 
 NOTE 8: STOCKHOLDERS’ EQUITY
  The Company issued both common and preferred stock during the period ended August 31, 2008. 2,000,000 shares of common stock were issued in exchange for future radio media initially valued at $200,000. Another 2,000,000 shares of common stock were issued in exchange for a completed but unexploited film valued at $200,000. Also, 990,000 shares of common stock were issued in a private placement for total proceeds of $97,440.
 
 The remaining 43,000,000 shares of common stock and 2,500,000 shares of preferred stock were issued to the founders of the Company in exchange for the rights to film assets, a number of "brands", domain names and other assets valued at $197,402, which was the historical cost of these assets to the founders, and for future consulting services. The amount of shares issued for these assets was arrived at through negotiations and management believes the fair values of these assets are equal to or greater than the values assigned.
 
 F-10
 
 LUX DIGITAL PICTURES, INC.
 NOTES TO FINANCIAL STATEMENTS
 AUGUST 31, 2011
 
 NOTE 8: STOCKHOLDERS’ EQUITY (CONTINUED)
 
 The 2,500,000 shares of preferred stock are convertible to common shares, at the holder's election, at a rate of 10 common shares for each preferred share, provided they have been held for at least two years.
 
 The Company issued 500,000 shares of common stock to an officer of the company during the year ended August 31, 2010.  The shares were valued $0.02 per share for a total expense of $10,000.
 
 The Company also issued 2,183,400 shares of common stock for services during the year ended August 31, 2010.  These shares were valued at $0.01 per share for a total expense of $21,834.
 
 Also during the year ended August 31, 2010, the Company returned 400,000 shares of common stock to its treasury.
 
 On February 9, 2011, the Company issued 1,265,823 shares of common stock in exchange for $10,000 of the convertible note payable.
 
 On August 10, 2011, the Company issued 9,729,478 shares of common stock in exchange for $31,500 of the convertible note payable.
 
 The Company had 61,268,701 shares of common stock issued as of August 31, 2011.
 
 NOTE 9 – INCOME TAXES
 
 The components of the provision for income tax expense (benefit) are as follows:
 
 August 31, 2011


August 31, 2010Current:Federal corporate income tax (20%)

$
0


$
(33,500
)State corporate income tax (13%)


0



(21,500
)Total


0



(55,000
)Deferred:Federal corporate income tax


(54,300
)


0State corporate income tax


0



0Less: valuation allowance


107,885



0Total


0



0Total Provision (Benefit) for Income Taxes

$
53,585


$
(55,000
)
 
 NOTE 10 – COMMITMENTS AND CONTINGENCIES
 
 The Company neither owns nor leases any real or personal property. An officer has provided office services without charge.  There is no obligation for this arrangement to continue.  Such costs are immaterial to the financial statements and accordingly are not reflected herein.
 
 F-11
 
 LUX DIGITAL PICTURES, INC.
 NOTES TO FINANCIAL STATEMENTS
 AUGUST 31, 2011
 
 NOTE 11 – SUBSEQUENT EVENTS
 
 On September 27, 2011 the Company entered into agreement with a third party for a Convertible Note for $78,500 bearing interest at 8% per annum and convertible into shares of the Company’s common stock at a 39% discount after 180 days.
 
 On September 17, 2011 the Company entered into a Management Agreement with its CEO to provide him 1,250,000 shares of common stock each Quarter, for a year, in lieu of any cash compensation. The Company filed a Form S-8 Registration Statement No. 333-177311 which was declared effective October 14, 2011.
 
 In accordance with ASC Topic 855-10, the Company has analyzed its operations subsequent to August 31, 2011 to November 29, 2011, the date these financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these financial statements other than the events discussed above.
 
 F-12


ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE


None.
  ITEM 9AT.CONTROLS AND PROCEDURES
  Evaluation of Disclosure Controls and Procedures.
  As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Based upon that evaluation, our Chief Financial Officer concluded that our disclosure controls and procedures are adequate to ensure that information required to be disclosed by us in reports that we file or submit to the Securities and Exchange Commission (the "SEC") under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.
  Changes in Internal Controls over Financial Reporting.
  There was no change in our internal control over financial reporting during our fourth quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
  ITEM 9B.OTHER INFORMATION
  None.
  23
  PART III.
  ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
  Directors, Executive Officers
  Our director and executive officer, his age, positions held, and term served is as follows:
  Name
Position Held with the Company
Age
Date First

Elected or AppointedIngo Jucht
Director, President (Principal Executive Officer), Treasurer (Principal Accounting Officer) and Principal Financial Officer.
40
Director, President (Principal Executive Officer), Treasurer (Principal Accounting Officer), Principal Financial Officer and Secretary since inception
 
 Business Experience of Director and Consultant
  Ingo Jucht has been the President and Chief Executive officer of the Company since inception. Mr. Jucht is also the Operating Manager of Lux Digital Picture GmbH Partners and oversees all aspects of the Company’s operation. For the last five (5) years Mr. Jucht has also been a principal with the Zurich Consulting Group to which he continues to devote, approximately, 50% of his time. Mr. Jucht is the Executive Producer of the Company motion pictures “Night of the Living Dead 3D” and its prequel, “Nightmares in Red, White and Blue”, “American Grindhouse” and ‘Films of Fury”. Mr. Jucht is a graduate of the Kaskeline Film Akademie and, prior to joining the Company, he worked for 10 years, in a variety of positions, in the entertainment industry in Germany.
  T. Joseph Coleman was the principal Consultant to the Company upon its inception until his contract expired in 2009. Mr. Coleman is a beneficiary of a Trust that holds, approximately, 9% of the Company’s outstanding common stock and he remains available to provide advice to Mr. Jucht on all aspects of the Company’s operations and development and future strategies. Mr. Coleman is an entertainment industry veteran. He was the sole founder and CEO of the Atlantic Entertainment Group an independent movie studio. Between 1975 and 1989 Atlantic distributed over 120 motion pictures and Mr. Coleman, personally, produced or Executive Produced 40 films including the 1978 Academy Award winning ‘Madame Rosa”, the teen film hits “Valley Girl’ and “Teen Wolf”, “Extremities”, “1969” and many others. Mr. Coleman was also the founder, in 1998, of the RTV Television Network and the Former Chairman of the Sun Network Group. Mr. Coleman is an Executive member of the Academy of Motion Picture Arts and Sciences and is, currently, an industry consultant for the Zurich Consulting Group based in Switzerland.
  Our Director will hold office until the next annual meeting of shareholders and the election and qualification of his successors. Our Director receives no compensation for serving on the Board of Directors.
  Committees of the Board
  We do not have an audit or compensation committee at this time.
  24
  Involvement in Certain Legal Proceedings
  Our directors, executive officers and control persons have not been involved in any of the following events during the past five years:
  1. any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
  2. any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
  3. being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or
  4. being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.
  Conflict of Interest
  None of our officers or directors will be subject to a conflict of interest.
  ITEM 11. EXECUTIVE COMPENSATION
  The following table summarizes the compensation of our President (Principal Executive Officer) during the period from September 1, 2008 to August 31, 2011.
  SUMMARY COMPENSATION TABLEAnnual Compensation
Long Term

Compensation
Pay-

outsName and Principal

Position
Year
Salary
Bonus
Other

Annual

Compen-

sation
Securities

Under

Options/

SAR's

Granted
Restricted

Shares or

Restricted

Share Units
LTIP

Pay-

outs
All Other

Compen-

sationIngo Jucht, CEO
2011
Nil
Nil
Nil
Nil
Nil
Nil
NilIngo Jucht, CEO
2010
Nil
Nil
Nil
Nil
Nil
Nil
NilIngo Jucht, CEO
2009
Nil
Nil
Nil
Nil
Nil
Nil
Nil
  As of August 31, 2011 we had not entered into any employment agreement or management agreement with our director and chief executive officer but did so subsequent to the period on September 23, 2011 in an agreement which will provide him with Company common shares through an S-8 Registration Statement filed outside of the period. The Company shall pay its CEO, under the agreement, 1,250,000 shares of its common stock, each Quarter, in exchange for his management services. The Company provided a Consultant with 5,000,000 restricted shares of its common stock and 500,000 common shares issued from a prior S-8 Registration Statement under a Consulting Agreement, which has expired. Currently the Company has no agreement in place with the Consultant to provide additional Consultation but he continues to do so on an as available basis. There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. Our director and executive officer may receive stock options at the discretion of our board of directors in the future, although no stock option plan is currently in place. We do not have any material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of our board of directors and the Company may pay for certain expenses incurred by its Consultants, Director and others for managing its office, supervising its business activities, traveling on behalf of the Company, entertaining on behalf of the Company and conducting other activities as well as providing certain insurance and other expenses. The Company had previously filed an S-8 Registration Statement registering up to 10,000,000 shares of its common stock, which became effective December 30, 2009, for the purpose of making its common shares available to pay for future services and compensation for its CEO, Consultants and others who may perform services for the Company. As of November 18, 2010 the Company had issued approximately 1,648,400 new common shares the three (3) different Consultants in exchanges for services rendered to the Company. The Company’s December 30, 2009 S-8 Registration Statement has expired and been discontinued.
  25
  Directors Compensation
  We have reimbursed our director for expenses incurred in connection with attending board meetings and other Company meetings but have we have not paid any directors fees or other cash compensation for services rendered as a director in the period ended August 31, 2011.
  We have no formal plan for compensating our director for his services in their capacity as a director and, until such time as the Company has an effective S-8 filing, no compensation as an officer. In the future we may grant options to our directors to purchase shares of common stock as determined by our Board of Directors or a compensation committee that may be established. We do not, however, have a stock option plan in place at this time. Directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of our board of directors. The board of directors may award special remuneration to any director, officer, Consultant or other undertaking any special services on behalf of Lux Digital Pictures, Inc other than services ordinarily required of a director. Other than as indicated in this prospectus, no director received and/or accrued any compensation for his or her services as a director, including committee participation and/or special assignments
  ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
  Principal Stockholders
  The following table sets forth, as of August 31, 2011, certain information with respect to the beneficial ownership of our common stock by each stockholder known by us to be the beneficial owner of more than 5% of our common stock and by each of our current directors and executive officers. Each person has sole voting and investment power with respect to the shares of common stock, except as otherwise indicated. Beneficial ownership consists of a direct interest in the shares of common stock, except as otherwise indicated.
  Name and Address of Beneficial Owner
Amount and Nature of

Beneficial Ownership
Percentage

of Class(1)Lux Digital Pictures GmbH Partners, Ingo Jucht Operating Manager, 12021 Wilshire Blvd. #450, Los Angeles, CA. 90025
38,000,000 common shares

2,500,000 preferred shares
62%

100%Coleman Family Trust, T. Joseph Coleman and William H. Coleman Trustees, 10 Victoria Circle, Norwood, MA. 02062
5,500,000 common shares
9%Directors and Executive Officers as a Group
43,500,000 common shares
71%
 
 (1) Based on 61,268,701 shares of common stock issued and outstanding as of August 31, 2011. Except as otherwise indicated, we believe that the beneficial owners of the common stock listed above, based on information furnished by such owners, have sole investment and voting power with respect to such shares, subject to community property laws where applicable. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities.
  26
 
 Changes in Control
  We are unaware of any contract or other arrangement the operation of which may at a subsequent date result in a change of control of Lux Digital Pictures, Inc.
  Subsequent Events
  On September 23, 2011 the Company entered into a Management Agreement with its CEO, Ingo Jucht, to provide common stock to Mr Jucht as compensation for his management services to the Company in lieu of a cash compensation or salary. In consideration for his services Mr. Jucht will receive 1,250,000 shares of Company common stock each Quarter for the next year, subject to performance terms. The shares issued to Mr Juch will come from an S-8 Registration Statement No. 333- 177311 filed and made effective October 14, 2011. The Company, at the request of its principal shareholder, the holder of all previously issued Preferred Stock, in a Corporate Resolution to be effective November 28, 2011 converted the 2,500,000 Preferred Shares to 25,000,000 common shares and issued the new common shares to Lux Digital Pictures GmbH Partners to effectuate the original intent of issuance. The Company also issued, in the same Resolution to be effective November 29, 2011, 34,200,000 new common shares to its principal shareholder Lux Digital Pictures GmbH to fully satisfy the terms and conditions of an anti-dilution provision contained in the agreement dated June 8, 2008 by and between the Company and Lux Digital Pictures GmbH Partners.
  ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
  The Company’s principal shareholder and its CEO have made two (2) loans to the Company. The first loan, in the amount of $15,050, was made to the Company from its principal shareholder in 2008 and bears interest at the rate of 18% and a second loan in the amount of $13,500 was made by the CEO to the Company in March 2011 and is interest free provided the Company repays the loan by December 31, 2011. After that date the loan begins to accrue interest at the rate of 10% per annum. Both loans are non-recourse to the Company. Please also note Item 12 Subsequent Events.
  ITEM 14.    PRINCIPAL ACCOUNTING FEES AND SERVICES.
  (1)  Audit Fees
  The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for our audit of annual financial statements and review of financial statements included in our S-1 Registration Statement-Qs or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years was:
  2010

$
10,600

Silberstein Ungar, PLLC2011

$
7,700

Silberstein Ungar, PLLC
  27
 
 (2)           Audit-Related Fees
  The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountants that are reasonably related to the performance of the audit or review of our financial statements and are not reported in the preceding paragraph:
  2010

$
Nil

Silberstein Ungar, PLLC2011

$
Nil

Silberstein Ungar, PLLC
  (3)  Tax Fees
  The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning was:
  2010

$
Nil

Silberstein Ungar, PLLC2011

$
Nil

Silberstein Ungar, PLLC
  (4)  All Other Fees
  The aggregate fees billed in each of the last two fiscal years for the products and services provided by the principal accountant, other than the services reported in paragraphs (1), (2), and (3) was:
  2010

$
Nil

Silberstein Ungar, PLLC2011

$
Nil

Silberstein Ungar, PLLC
  (5)  Our audit committee's pre-approval policies and procedures described in paragraph (c)(7)(i) of Rule 2-01 of Regulation S-X were that the audit committee pre-approve all accounting related activities prior to the performance of any services by any accountant or auditor.
  (6)  The percentage of hours expended on the principal accountant's engagement to audit our financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant's full time, permanent employees was 10%.
  28
 
 PART IV.
  ITEM 15.Exhibits
  Exhibit No.

Document Description2.1

Promissory Note dated March, 28, 20112.2

Convertible Note dated May 19, 2010
 
 The following Exhibits are incorporated herein by reference from the Registrant's Form S-1 Registration Statement filed with the Securities and Exchange Commission, SEC file 0001442376-09-000021. Registrants Form S-8 Registration Statement filed with the Securities and Exchange Commission SEC file 333-177311. Such exhibits are incorporated herein by reference pursuant to Rule 12b-32:
  Exhibit No.

Document Description3.1

Articles of Incorporation.3.2

Bylaws.
 
 The following documents are included herein:
  Exhibit No.

Document Description23.1

Consent of Independent Registered Public Accounting Firm.31.1

Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended.32.1

Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer and Chief Financial Officer).
 
 29
 
 SIGNATURES
 
 Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
  Lux Digital Pictures, IncDate: November 29, 2011
By:
/s/ Ingo JuchtName: Ingo JuchtTitle:   President, Chief Financial Officer and Director
 
 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the Registrant and in the capacities and on the dates indicated.
  Date: November 29, 2011
By:
/s/ Ingo JuchtName; Ingo Jucht,Title:   President, Chief Financial Officer and Director(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)
  30