EX-99.5 37 v084285_ex99-5.htm


Sibling Entertainment Group Holdings, Inc.
(formerly Sona Development Corp.)

Sibling Entertainment Group, Inc.


Proforma Combined Financial Statements


For the Twelve Months Ended December 31, 2006 and
Three Months Ended March 31, 2007


 

Sibling Entertainment Group Holdings, Inc.

The Unaudited ProForma Combined Statement of Operations of the Company for the twelve months ended December 31, 2006 and the three months ended March 31, 2007 (the "ProForma Statements of Operations") and the Unaudited ProForma Combined Balance Sheet of the Company as of March 31, 2007 (the "ProForma Balance Sheet") and together with the ProForma Statements of Operations for the periods then ended, the ("ProForma Combined Financial Statements") have been prepared to illustrate the effect of the merger of the company and Sibling Entertainment Group, Inc. as if such transaction took place on January 1, 2006. The historical information for Sibling Entertainment Group Holdings, Inc. for the year ended December 31, 2006 and the three months ended March 31, 2007 are from the audited and reviewed financial statements of the company as of each period respectively. The historical information for Sibling Entertainment Group for the year ended December 31, 2006 and the three months ended March 31, 2007 were compiled from the quarterly reports filed by Sibling Entertainment Group, Inc. The ProForma Combined Financial Statements do not purport to be indicative of the results of operations or financial position of the Company that would have actually been obtained had such transactions been completed as of the assumed dates and for the periods presented, or which may be obtained in the future. The ProForma adjustments are described in the accompanying notes and are based upon available information and certain assumptions that the Company believes are reasonable. The ProForma Combined Financial Statements should be read in conjunction with the historical financial statements of the Company and Sibling Entertainment Group, Inc.
 
 
 
 

SIBLING ENTERTAINMET GROUP HOLDINGS, INC. AND SUBSIDIARIES
Combined Pro Forma Balance Sheet (Unaudited)

   
Sibling Entertainment Group Holdings, Inc. ("SIBE")
  
Sibling Entertainment Group, Inc. ("SEGI")
          
   
(A Development Stage Company)
 
(A Development Stage Company)
         
                   
   
 
  
 
  
Pro Forma
     
   
 
  
 
  
Adjustments
     
   
March 31,
  
March 31,
  
Increase
 
Pro Forma
 
   
2007
  
2007
  
(Decrease)
 
Combined
 
                   
ASSETS
                           
CURRENT ASSETS
                          
Cash
 
$
136
  
$
380,476
  
$
-
  
$
380,612
  
Due from related parties
   
-
   
199,939
   
-
   
199,939
 
Advances and prepaids
   
-
   
251,121
   
-
   
251,121
 
Loans receivable – related party
   
-
   
247,505
   
(11,077
)
  
236,428
 
Other receivables
   
-
   
161,483
   
-
   
161,483
 
                           
TOTAL CURRENT ASSETS
    
136
   
1,240,524
   
(11,077
)
  
1,229,583
 
                           
FIXED ASSETS
                          
Computer equipment, net of accumulated depreciation
   
-
   
104,459
   
-
   
104,459
 
                           
TOTAL FIXED ASSETS
    
-
   
104,459
   
-
   
104,459
 
                           
OTHER ASSETS
                          
Goodwill
    
-
   
9,684,781
   
-
   
9,684,781
 
Deposits
    
-
   
288,750
   
-
   
288,750
 
Recoupable advances
    
-
   
78,333
   
-
   
78,333
 
Production development costs
    
-
   
485,528
   
-
   
485,528
 
Investment in related companies
    
-
   
104,392
   
-
   
104,392
 
Other investments
    
1
   
8,766
   
-
   
8,767
 
Options purchased
    
-
   
22,000
   
-
   
22,000
 
Deferred loan costs
    
-
   
89,241
   
-
   
89,241
 
Deferred income taxes
    
-
   
104,000
   
-
   
104,000
 
                           
TOTAL OTHER ASSETS
    
1
   
10,865,791
   
-
   
10,865,792
 
                           
TOTAL ASSETS
  
$
137
  
$
12,210,774
  
$
(11,077
)
$
12,199,834
  
 
The accompanying notes are an integral part of the financial statements.
 
 
SIBLING ENTERTAINMET GROUP HOLDINGS, INC. AND SUBSIDIARIES
Combined Pro Forma Balance Sheet (Unaudited)
 
   
Sibling Entertainment Group Holdings, Inc. ("SIBE")
  
Sibling Entertainment Group, Inc. ("SEGI")
              
   
(A Development Stage Company)
 
(A Development Stage Company)
             
                       
   
 
  
 
      
Pro Forma
     
   
 
  
 
      
Adjustments
     
   
March 31,
  
March 31,
      
Increase
 
Pro Forma
 
   
2007
  
2007
      
(Decrease)
 
Combined
 
                       
LIABILITIES AND STOCKHOLDERS' EQUITY
                                 
CURRENT LIABILITIES
                                
Accounts payable
  
$
23,930
  
$
420,327
        
$
-
  
$
444,257
  
Accrued expenses
    
-
   
160,710
         
-
   
160,710
 
Due to related parties
   
50,517
   
93,500
         
(11,077
)
  
132,940
 
Short term loans payable
    
-
   
4,749,724
         
-
   
4,749,724
 
Current portion of long-term debt
    
-
   
10,248
         
-
   
10,248
 
Liabilities to be settled in stock
    
-
   
17,505
         
-
   
17,505
 
Deferred revenue
    
-
   
64,000
         
-
   
64,000
 
Derivative liability
    
-
   
41,643
         
-
   
41,643
 
Payroll liabilities
    
-
   
22,705
         
-
   
22,705
 
                                 
TOTAL CURRENT LIABILITIES
    
74,447
   
5,580,362
         
(11,077
)
  
5,643,732
 
                                 
LONG-TERM LIABILITIES
                                
Loan payable - related party
   
-
   
2,388,015
         
-
   
2,388,015
 
Long term convertible debentures, net of debt discount
    
-
   
726,190
         
-
   
726,190
 
Minority interest
    
-
   
424,590
         
-
   
424,590
 
                                 
TOTAL LIABILITIES
    
74,447
   
9,119,157
         
(11,077
)
  
9,182,527
 
                                 
EQUITY
                                
                                 
SIBE Common stock $0.0001 par value; 100,000,000 authorized shares; 13,074,066 shares issued and outstanding
    
1,307
   
-
   
(a)
 
  
3,536
   
4,843
 
SEGI Common stock $0.0001 par value; 100,000,000 authorized shares; 35,363,171 shares issued and outstanding
    
-
   
35,363
   
(a)
 
  
(35,363
)
  
-
 
Additional paid in capital - warrants
    
-
   
732,650
   
(b)
 
  
498,577
   
1,231,227
 
Additional paid in capital
    
3,288,424
   
7,560,383
   
(a)
(b)
(c)
 
  
(3,830,791
)
  
7,018,016
  
Accumulated deficit
    
-
   
(248,300
)
              
(248,300
)
Deficit accumulated during development stage
    
(3,364,041
)
  
(4,988,479
)
  
(b) (c)
 
  
3,364,041
    
(4,988,479
)
                                 
TOTAL EQUITY
    
(74,310
)
  
3,091,617
         
-
 
  
3,017,307
  
                                 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
  
$
137
  
$
12,210,774
        
$
(11,077
)
$
12,199,834
  
 
The accompanying notes are an integral part of the financial statements.
 
 
SIBLING ENTERTAINMET GROUP HOLDINGS, INC. AND SUBSIDIARIES

   
Sibling Entertainment Group Holdings, Inc. ("SIBE")
  
Sibling Entertainment Group, Inc. ("SEGI")
          
   
(A Development Stage Company)
 
(A Development Stage Company)
 
Pro Forma
     
                   
   
For the Year Ended
  
For the Year Ended
  
Adjustments
     
   
December 31,
  
December 31,
  
Increase
 
Pro Forma
 
   
2006
  
2006
  
(Decrease)
 
Combined
 
REVENUES
                          
Revenue - related companies
                          
Gross Box Office revenues
  
$
-
  
$
436,429
  
$
-
  
$
436,429
  
Consulting fee income - related company
    
-
   
52,854
   
-
   
52,854
 
Executive producer fees - related company
    
-
   
52,849
   
-
   
52,849
 
 
                          
TOTAL REVENUES
    
-
   
542,132
   
-
   
542,132
  
                           
EXPENSES
                          
Professional fees
  
$
63,540
  
$
685,883
 (b)(d)
$
435,037
  
$
1,184,460
  
Management fees - related company
    
-
   
19,600
   
-
   
19,600
 
General and Administrative
    
419,070
   
1,022,625
(d)  
(419,070
 )   
1,022,625
 
 
                          
PRODUCTION EXPENSES
    
-
   
1,303,637
   
-
   
1,303,637
 
 
    
  
         
  
   
     
 
OPERATING LOSS
  
$
(482,610
)
$
(2,489,613
)
$
(15,967
)
$
(2,988,190
)
                           
Other Income (Expense)
                      
-
 
Interest Income (Expense)
    
-
   
(12,994
)
  
-
   
(12,994
)
Impairment of investment - related company
    
-
   
(233,621
)
  
-
   
(233,621
)
Equity loss on investment - related company
    
-
   
(5,608
)
  
-
   
(5,608
)
Write down of promissory notes
    
(50,000
)
  
-
   
50,000
   
-
 
                           
NET LOSS BEFORE INCOME TAXES
  
$
(532,610
)
$
(2,741,836
)
$
34,033
 
$
(3,240,413
)
                           
TAXES
    
-
   
5,325
   
-
   
5,325
 
                           
NET LOSS
  
$
(532,610
)
$
(2,747,161
)
$
34,033
 
$
(3,245,738
)
                           
LOSS PER SHARE
     (0.05
)
   (0.10
)
         (0.09
)
                           
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED
     11,619,576     27,880,026           37,208,900  
 
The accompanying notes are an integral part of the financial statements.
 

SIBLING ENTERTAINMET GROUP HOLDINGS, INC. AND SUBSIDIARIES
Combined Pro Forma Statements of Operations (Unaudited)

   
Sibling Entertainment Group Holdings, Inc. ("SIBE")
  
Sibling Entertainment Group, Inc. ("SEGI")
          
   
(A Development Stage Company)
 
(A Development Stage Company)
         
                   
   
For the Three
  
For the Three
  
Pro Forma
     
   
Months Ending
  
Months Ending
  
Adjustments
     
   
March 31,
  
March 31,
  
Increase
 
Pro Forma
 
   
2007
  
2007
  
(Decrease)
 
Combined
 
REVENUES
                          
Revenue - related companies
                          
Gross Box Office revenues
  
$
-
  
$
670,112
  
$
-
  
$
670,112
  
Consulting fee income - related company
    
-
   
59
   
-
   
59
 
Executive producer fees - related company
    
-
   
-
   
-
   
-
 
                           
TOTAL REVENUES
    
-
   
670,171
   
-
   
670,171
 
                           
EXPENSES
                          
General and administrative :
                          
Professional fees
    
60,655
   
300,213
(d)   
(60,655
)
  
300,213
  
Management fees - related company
    
-
   
-
   
-
   
-
 
Other
    
-
   
678,168
   
-
   
678,168
 
                           
PRODUCTION EXPENSES
    
-
   
810,176
   
-
   
810,176
 
     
  
   
  
   
  
   
  
 
OPERATING LOSS
    
(60,655
)
  
(1,118,386
)
  
60,655
 
  
(1,118,386
)
                           
Other Income (Expense)
                          
Interest Income (Expense)
    
(208,157
)
  
(191,405
)(d)
  
208,157
    
(191,405
)
Amortization of loan origination costs
    
-
   
(44,621
)
  
-
   
(44,621
)
Investor expense
    
-
   
(41,643
)
  
-
   
(41,643
)
Impairment of investment - related company
    
-
   
-
   
-
   
-
 
Equity loss on investment - related company
    
-
   
(336
)
  
-
   
(336
)
Write down of promissory notes
    
-
   
-
   
-
   
-
 
                           
NET LOSS BEFORE INCOME TAXES
    
(268,812
)
  
(1,396,391
)
  
268,812
    
(1,396,391
)
                           
TAXES
    
-
   
(38,018
)
  
-
   
(38,018
)
                           
NET LOSS
  
$
(268,812
)
$
(1,434,409
)
$
268,812
  
$
(1,434,409
)
                           
LOSS PER SHARE
     (0.02
)
   (0.05
)
         (0.04
)
                           
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED
     12,635,122     28,286,552           37,208,900  

The accompanying notes are an integral part of the financial statements.
 

Sona Development Corp. and Subsidiaries
 
Notes to Pro Forma Consolidated Financial Statements
For the Three Months Ending March 31, 2007 (Unaudited)

NOTE-1 - Summary of Transaction

On June 28, 2006, the Company signed and publicly announced a definitive Agreement of Acquisition and Plan of Reorganization as a reorganization within the meaning of Section 368(a)(1)(C) of the Internal Revenue Code between Sona Development Corp (“Sona”) and Sibling Entertainment Group, Inc. (“Sibling”) further amended on December 12, 2006 and August 13, 2007 for Sona to purchase Sibling’s subsidiaries and all other assets and liabilities of the Sibling including outstanding convertible debentures and Sona will issue to Sibling up to 37,208,900 shares of common stock for all outstanding shares of Sibling and Sona will issue stock purchase warrants allowing warrant holders to purchase an additional 26,657,424 shares of common stock. The acquisition is currently valued at $0.35 per share, or $13,023,115.

The shares of Sona would be distributed to Sibling and subsequently to the shareholders of Sibling pursuant to a registration of Sona’s stock. The convertible debentures owed by Sibling would be debt in Sona. This transaction provides for the acquisition of the following Sibling subsidiaries:

Subsidiary
  
State of Incorporation
     
Sibling Music Corp.
  
Delaware
Sibling Pictures, Inc.
  
Delaware
Reel Love on Film LLC
  
New York
(subsidiary of Sibling Pictures, Inc.)
    
Reel Productions, Inc.
  
New York
(subsidiary of Sibling Pictures, Inc.)
    
Sibling Theatricals, Inc.
  
Delaware
Hats Holdings, Inc.
  
Delaware
(subsidiary of Sibling Theatricals, Inc.)
    
HATS Denver LLC
  
Delaware
(subsidiary of Hats Holdings, Inc.)
    
HATS Chicago, LLC
  
Illinois
Sibling Properties, Inc.
  
Delaware
ChiTex, LLC
  
Delaware

The acquisition of SEGI by the Company is considered a re-capitalization of SEGI and SEGI is considered the acquirer for accounting and financial reporting purposes. In accordance with reverse acquisition accounting the proforma financial statements include the historical information of SEGI, with the following adjustments:

 
NOTE-2 - Management Assumptions

The pro forma consolidated balance sheet and statements of operations assumes that the entities were together as of January 1, 2006.

The pro forma consolidated balance sheet assumes: (a) the issuance of the 35,363,171 shares outstanding as of March 31, 2007 with an adjustment between SEGI’s $0.001 par value and SIBE’s $0.0001 par value increasing SIBE’s reported par value by $3,536, decreasing SEGI Par Value by $35,363 and the net amount of $31,827 against SIBE’s Additional Paid in Capital; (b) upon closing Moneta Capital Advisors, Inc. shall be entitled to five million (5,000,000) stock purchase warrants with an exercise price of $0.275/share with a five (5) year term valued at $498,577 increasing Additional paid in capital - warrants and Professional Fees on Statement of Operations; (c) upon closing the SIBE’s “Deficit accumulated during development stage” is charged-off against the combined “Additional Paid in Capital”; and (d) The expenses of SIBE deemed to be non recurring expense pre eliminated.