-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, L+YYsSjbOWRJuOd46XOl1o6S3XzaqL6kDUnAQvvUT/7207QLubcivJpUqfrSzQp4 dsqNINtDODS/vPJtj3KvIg== 0001093094-05-000064.txt : 20050720 0001093094-05-000064.hdr.sgml : 20050720 20050719173629 ACCESSION NUMBER: 0001093094-05-000064 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20050620 ITEM INFORMATION: Other Events FILED AS OF DATE: 20050720 DATE AS OF CHANGE: 20050719 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KINGS ROAD ENTERTAINMENT INC CENTRAL INDEX KEY: 0000773588 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MOTION PICTURE & VIDEO TAPE PRODUCTION [7812] IRS NUMBER: 953587522 STATE OF INCORPORATION: DE FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-14234 FILM NUMBER: 05962343 BUSINESS ADDRESS: STREET 1: 3489 WEST CAHUENGA BLVD STREET 2: SUITE D CITY: HOLLYWOOD STATE: CA ZIP: 90068 BUSINESS PHONE: (323) 512-5045 MAIL ADDRESS: STREET 1: 1901 AVE OF THE STARS STREET 2: SUITE 1545 CITY: LOS ANGELES STATE: CA ZIP: 90067 8-K 1 form8k71805.txt FORM 8-K REGARDING SEC COMMENTS UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): June 20, 2005 -------------- KINGS ROAD ENTERTAINMENT, INC. (Exact name of Registrant as specified in its charter) Delaware -------- (State or other jurisdiction of Incorporation or organization) 0-14234 95-3587522 --------------------- -------------------------------- (Commission File Number) (I.R.S. Employer Identification No.) 447 B Doheny Drive, Beverly Hills, California 90210 - --------------------------------------------- ----- (Address of principal executive offices) (Zip Code) 310-278 9975 ------------ (Registrant's telephone number, including area code) 1 Item 8.01 Other Events. On June 20, 2005 the Company was contacted by the Division of Corporate Finance at the United States Securities and Exchange Commission regarding questions that arose following a review of the Company's filing on Form 10-KSB for the year ended December 31, 2004. On June 21, 2005 the Company replied to the Division of Corporate Finance acknowledging receipt of the comments and questions and setting forth a timeline for responding to the inquiry, and, on July 8, 2005 the Company replied with answers to all questions raised by the Division of Corporate Finance. On July 10, 2005 the company received notice that the responses to the inquiry were acceptable and the Division of Corporate Finance requested this information be made availible to the public in a filing on Form 8-K. A copy of the letter dated June 20, 2005 from the Division of Corporate Finance to the Company, is attached hereto and incorporated herein by this reference as Exhibit 99.1. A copy of the interim response on June 21, 2005 to the Division of Corporate Finance is attached hereto and incorporated by this reference as Exhibit 99.2. A copy of the complete response to the inquiry on July 8, 2005 is attached hereto and incorporated by this reference as Exhibit 99.3. 2 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. Kings Road Entertainment, Inc. Dated: July 18, 2005 /s/ Geraldine Blecker ------------------------------- By: Geraldine Blecker Its: Chief Executive Officer Dated: July 18, 2005 /s/ H. Martin DeFrank ------------------------------- By: H. Martin DeFrank Its: President and Chief Financial Officer 3 INDEX TO EXHIBITS Exhibit Number Exhibit - ------------------------------------------------------------------------------- 99.1 Letter from Division of Corporate Finance to the Company dated June 20, 2005 99.2 Letter from the Company to the Division of Corporate Finance dated June 21, 2005 99.3 Letter from the Company to the Divsion of Corporate Finance dated July 8, 2005 These exhibits are furnished to, but not filed with, the Commission by inclusion herein. 4 EX-99 2 ex99-1.txt JUNE 20, 2005 LETTER FROM DIV OF CORP FINANCE Exhibit 99.1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 June 20, 2005 Mail Stop 03-05 Via US Mail and Facsimile - ------------------------- Mr. H. Martin DeFrank President and Chief Financial Officer 447B Doheny Drive Beverly Hills, California 90210 Re: Kings Road Entertainment, Inc. Form 10-KSB for the year ended December 31,2004 Commission file #: 000-14234 Dear Mr. DeFrank: We have reviewed the above referenced filing and have the following comments. Where indicated, we think you should revise your document in response to these comments. If you disagree, we will consider your explanation as to why our comment is inapplicable or a revision is unnecessary. Please be as detailed as necessary in your explanation. In some of our comments, we may ask you to provide us with supplemental information so we may better understand your disclosure. After reviewing this information, we may or may not raise additional comments. Please understand that the purpose or our review process it to assist you in your compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filing. We look forward to working with you in these respects. We welcome any questions you may have about our comments or any other aspect of our review. Feel free to call us at the telephone numbers listed at the end of this letter. *********************************** Form 10-KSB for the year ended December 31, 2004 Financial Statements - -------------------- Statements of Cash Flows - ------------------------ 1. We note that your statements of cash flow present the change in film development costs as an operating activity in 2003 and an investing activity in 2004. In future filings, please classify all outflows of cash related to film development costs as an operating activity. See paragraph 55 of SOP 00-02. Mr. H. Martin DeFrank Kings Road Entertainment, Inc. June 20, 2005 Page 2 Notes to Financial Statements - ----------------------------- Note 1. Significant Accounting Policies - --------------------------------------- - -General - -------- 2. We note that your accounts receivable balance is a significant portion of total assets. Please tell us, and include in future filings, your accounting policy for establishing as allowance for doubtful accounts, determining past due or delinquency status and charging off uncollectible receivables. Additionally, please tell us if there is an allowance for doubtful accounts established as of December 31, 2004. See paragraph 13 a-c of SOP 01-6. Also, tell us your basis for your conclusion that you net accounts receivable aggregating $166,906 at December 31, 2004 are collectible. - -Film Development Costs - ----------------------- 3. We note that you refer to the accounting guidance set forth in FASB Statement No. 53 as applicable for the accounting for film development costs. In future filings, please refer to, and ensure you are following SOP 00-2,the accounting literature that is applicable based on SFAS 139,which superceded SFAS No.53 in June 2000. Note 2. Film development Costs - ------------------------------ 4. Tell us and explain in detail in the notes to your financial statements in future filings your basis for your conclusion that capitalized film development costs aggregating $69,437 are realizable at December 31,2004. As part of your response and your revised disclosure, please explain in further detail how you evaluated these capitalized costs for impairment. We may have further comment upon receipt of your response. Note 6. Commitments and Contingencies, page F-15 - ------------------------------------------------ 5. We note from your disclosure that you filed suit against Messrs. Berresheim, Ottens, the Florida entities, et al, for the sum of $103,517. Please tell us, and disclose in future filings, if this amount is included as a receivable on the balance sheet at December 31, 2004. If it is included in receivables, please tell us if there is a reserve established against the receivable. If not, please explain why. Mr. H. Martin DeFrank Kings Road Entertainment, Inc. June 20,2005 Page 3 Note 8. Discontinued Operations - ------------------------------- 6. Please tell us the nature and amount of the consideration received in connection with the sale of the Animal Town subsidiary and explain how the gain on the sale of this subsidiary during 2003 of $33,043 was calculated or determined. Forms 10-QSB for the quarters ended July 31, 2004, October 31, 2004, and January 31, 2005 7. Comply with the comments on the Form 10-KSB for the year ended April 30, 2004 as they apply to filings on Form 10-QSB. Also, please file your delinquent Quarterly Reports on Form 10-QSB as soon as possible or explain why this cannot be done. ********************************** As appropriate, please respond to these comments with 10 business days or tell us when you will provide us with a response. Please furnish a cover letter that keys your response to our comments and provides any requested supplemental information. Please understand that we may have additional comments after reviewing your responses to our comments. We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filings reviewed by the staff to be certain that they have provided all information investors require for an informed decision. Since the company and its management are in possession of all facts relating to a company's disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made. In connection with responding to our comments, please provide, in writing, a statement from the company acknowledging that: the company is responsible for the adequacy and accuracy of the disclosure in the filings; staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and the company may not assert comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. Mr. H. Martin DeFrank Kings Road Entertainment, Inc. June 20, 2005 Page 4 In addition, please be advised that the Division of Enforcement has access to all information you provide to the staff of the Division of Corporation Finance in our review of your filing or in response to our comments on your filing. You may contact Claire Lamoureux at 202-551-3301 or me at 202-551-3813 if you have questions. Sincerely, /s/ Linda Cvrkel Linda Cvrkel Branch Chief EX-99 3 ex99-2.txt JUNE 21, 2005 LETTER TO DIV OF CORP FINANCE Exhibit 99.2 KINGS ROAD ENTERTAINMENT 447 B North Doheny Drive Beverly Hills CA 90210 T 310 278 9975 F 310 278 9975 kingsroadscreen@aol.com June 21, 2005 Linda Cvrkel, Branch Chief Securities and Exchange Commission Washington, DC 20549 Mail Stop 03-05 Re: Kings Road Entertainmen, Inc., Form 10-KSB for year ended December 31, 2004. Commission file #: 000-14234 Dear Ms. Cvrkel We acknowledge receipt, by facsimile, of your letter dated June 20, 2005. We have forward your letter, its review of the above 10-KSB, and its request for information, to our accountants and auditors who will be providing a response by July 15, 2005. Yours sincerely /s/ H. Martin DeFrank H. Martin DeFrank President and Chief Financial Officer EX-99 4 ex99-3.txt JULY 8, 2005 LETTER TO DIV OF CORP FINANCE Exhibit 99.3 KINGS ROAD ENTERTAINMENT 447-B N Doheny Drive Beverly Hills, California 90210 Tel: 310 278 9975 / Fax: 310 278 9975 GeraldineKREN@aol.com - ------------------------------------------------------------------------------- July 8, 2005 Ms. Linda Cvrkel, Branch Chief Securities and Exchange Commission Mail Stop 03-05 Washington, DC 20549 Ms. Claire Lamoureux Division of Corporate Finance Securities and Exchange Commission Dear Ladies, Thank you for your review of our filings and your comments thereon as contained in your letter dated June 20, 2005. We will undertake to implement your recommendations in the filing of our Form 10-KSB as is it being prepared for the year ended April 30, 2005. Our specific responses to each of your comments are as follows: Financial Statements - -------------------- Statements of Cash Flows - ------------------------ 1. In all future filings we will classify cash outflows for film development costs as an operating activity pursuant to paragraph 55 of SOP 00-02. Notes to Financial Statements - ----------------------------- Note 1. Significant Accounting Policies - --------------------------------------- - -General - -------- 2. Our accounts receivable are comprised of accrued royalties from the distribution of the music and films developed by our company. If the actual amount earned by us is known when we prepare our accounting, we accrue that amount. However, our film and music distributors often do not report or pay the royalties they owe us until well beyond the due date of our filings. In that case we accrue the estimated amount of royalties which we expect to collect for the period. The accrual is computed based upon the historical receipts from the distributor for the financial period being reported. Therefore the accrual is net of any estimated uncollectible amounts so no additional allowance is required. We assume that you mean April 30, 2004 when you ask about the allowance. There is no allowance at April 30, 2004 because at the time the $166,906 was accrued all amounts had been collected and reported by the distributors. There was no doubt of collection. In our April 30, 2005 financial statements, we will expand our disclosure to explain the allowance for doubtful accounts. - -Film Development Costs - ----------------------- 3. In our April 30, 2005 financial statements we will refer to SOP 00-02 and SFAS 139 instead of SFAS 53. We have ensured that we follow the most recent accounting pronouncements. Note 2. Film Development Costs - ------------------------------ 4. In each fiscal period the Company's accounting staff speaks with its film development personnel to determine that status of each film project. Each film is evaluated to determine if we intend to continue its development and if it is economically viable. The film development costs are expensed in the period that they are determined to not be recoverable. We follow the provisions of SOP 00-02 and SFAS 139. Note 6 Commitments and Contingencies, page F-15 - ----------------------------------------------- 5. The amount of the lawsuit against Messrs. Berresheim, Ottens, the Florida entities, et al is not included as a receivable at April 30, 2004. The receivable has been reserved in full. We will disclose this fact in our April 30, 2005 financial statements. Note 8 Discontinued Operations - ------------------------------ 6. The only consideration received in the sale of the Animal Town subsidiary was the assumption of the debts of Animal Town by the buyer. The liabilities of Animal Town exceed its assets by $33,043, at the date of the sale, which is the gain. 7. We are completing our delinquent 10-QSB filings at this time. We are implementing these comments in those filings. We have distributed these comments to all persons responsible for our filings so that all are aware of them. We acknowledge that the Company is responsible for the adequacy and accuracy of the disclosure in the filings; staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. Sincerely, Kings Road Entertainment, Inc. /s/ Geraldine Blecker Geraldine Blecker Chief Executive Officer -----END PRIVACY-ENHANCED MESSAGE-----