Quarterly Report (10-q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2014

☐ 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 333-186079

STARSTREAM ENTERTAINMENT, INC.

(Exact name of registrant as specified in its charter)

Nevada		68-0682786
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

100 Sky Park Drive
Monterey, California		93940
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code 203-881-6060

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

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 ☐	Accelerated filer ☐
Non accelerated filer ☐	Smaller reporting company ☒

(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

The number of shares of the Common Stock of the registrant outstanding as of August 15, 2014 was 17,924,412.

TABLE OF CONTENTS

		PAGE
PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements	4

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23

Item 4.	Controls and Procedures	23

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	24

Item 1A.	Risk Factors	24

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24

Item 3.	Defaults Upon Senior Securities	24

Item 4.	Mine Safety Disclosures	24

Item 5.	Other Information	24

Item 6.	Exhibits	25

Signatures		26

EXPLANATORY NOTE

As previously reported in a Current Report on Form 8-K filed by Starstream Entertainment, Inc. (the “Company”) on May 9, 2014, the Company effected a reverse split of its issued and outstanding common stock at a ratio of one-for-three (the “Reverse Stock Split”) effective May 8, 2014 (the “Effective Date”). As a result, every three shares of the Company’s common stock that were issued and outstanding as of the Effective Date were automatically combined into one issued and outstanding share of common stock. Immediately prior to the effectiveness of the Reverse Stock Split, there were 53,712,973 shares of the Company’s common stock issued and outstanding, and immediately after the effectiveness of the Reverse Stock Split, there were 17,904,357 shares of common stock issued and outstanding. Throughout this Quarterly Report on Form 10-Q, share amounts, share prices and other share-related numbers have been adjusted to retroactively give effect to the Reverse Stock Split.

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Starstream Entertainment, Inc. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
AS OF JUNE 30, 2014 AND DECEMBER 31, 2013

	June 30,			December 31,
	2014			2013

ASSETS

CURRENT ASSETS:
Cash and cash equivalents	$	38,959		$	100,012
Employee advances		35,841			25,685
Deferred financing costs		19,658			-
Prepaid expenses and other current assets		38,402			46,557
Total Current Assets		132,860			172,254

Property and equipment, net		68,851			77,553
Security deposits		17,717			17,417
Investments in film productions, at cost		3,043,433			3,046,413
Film production costs		109,056			98,732

TOTAL ASSETS	$	3,371,917		$	3,412,369

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	596,509		$	371,591
Accrued interest		49,308			21,614
Due to related parties		707,296			112,600
Payroll and related liabilities		49,201			69,157
Convertible notes payable		350,000			350,000
Convertible notes payable, related party		150,000			150,000
Note payable		-			60,000
Current portion of loans payable		611,885			11,681
Total Current Liabilities		2,514,199			1,146,643

Long term portion of loans payable		54,609			61,361
TOTAL LIABILITIES		2,568,808			1,208,004

Commitments and contingencies		-			-

STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par value, 10,000,000 shares authorized;
Series A; 2 shares authorized, issued and outstanding, respectively		-			-
Common stock, $0.001 par value, 100,000,000 shares authorized;
17,924,412 and 17,874,322 shares issued and outstanding, respectively		17,924			17,874
Additional paid-in capital		4,222,704			4,103,680
Accumulated deficit		(3,641,540	)		(2,141,148	)
TOTAL STARSTREAM ENTERTAINMENT INC. STOCKHOLDERS' EQUITY		599,088			1,980,406

Non-controlling interest		204,021			223,959
TOTAL STOCKHOLDERS' EQUITY		803,109			2,204,365
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	3,371,917		$	3,412,369

The accompanying notes are an integral part of these condensed consolidated financial statements

Starstream Entertainment, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2014 AND 2013

	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
	2014			2013			2014			2013

NET REVENUES:
Film production income	$	-		$	-		$	-		$	-
TOTAL NET REVENUES		-			-			-			-

GENERAL AND ADMINISTRATIVE:
General and administrative expenses	$	70,974		$	66,659		$	94,298		$	66,659
Professional fees		215,839			38,141			757,008			38,141
Payroll and related expenses		168,460			3,500			360,509			3,500
Depreciation and amortization expenses		4,375			175			8,702			175
Travel expenses		38,128			-			89,257			-
Meals and entertainment expenses		14,228			-			31,724			-
Insurance expenses		28,700			-			55,861			-
Outside services		380			21,000			(3,600	)		21,000
Filing fees		6,967			500			20,760			500
Rent and related expenses		35,824			-			74,613			-
TOTAL GENERAL AND ADMINISTRATIVE		583,875			129,975			1,489,132			129,975

INCOME (LOSS) FROM OPERATIONS		(583,875	)		(129,975	)		(1,489,132	)		(129,975	)

OTHER (EXPENSE) INCOME:
Interest expense, net		(15,356	)		(3,186	)		(31,198	)		(3,186	)
TOTAL OTHER (EXPENSE) INCOME		(15,356	)		(3,186	)		(31,198	)		(3,186	)

NET LOSS		(599,231	)		(133,161	)		(1,520,330	)		(133,161	)

Net loss attributable to the non-controlling interest		19,938			-			19,938			-

NET LOSS ATTRIBUTABLE TO STARSTREAM ENTERTAINMENT, INC.	$	(579,293	)	$	(133,161	)	$	(1,500,392	)	$	(133,161	)

NET LOSS PER COMMON SHARE:
Basic and diluted	$	(0.03	)	$	(0.02	)	$	(0.08	)	$	(0.02	)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING:
Basic and diluted		17,908,979			8,743,501			17,902,133			8,743,501

The accompanying notes are an integral part of these condensed consolidated financial statements

Starstream Entertainment, Inc. and Subsidiaries
CONDENSED CONSOLIDATED CASH FLOW STATEMENT (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 2014 AND 2013

	2014			2013

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(1,520,330	)	$	(133,161	)
Adjustment to reconcile net loss to net cash used in operating activities:
Depreciation expense		8,702			175
Common stock issued for consulting services		88,925			-
Changes in operating assets and liabilities:
Related parties receivable		(10,156	)		-
Amortization of deferred financing costs		20,342			-
Production costs		(10,324	)		-
Prepaid expenses and other current assets		8,155			(11,706	)
Accounts payable and accrued expenses		254,917			24,567
Accrued interest		27,694			3,188
Payroll and related liabilities		(19,956	)		-

NET CASH USED IN OPERATING ACTIVITIES		(1,152,031	)		(116,937	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in film productions		(68,875	)		(1,955,882	)
Proceeds from film productions		71,855			-
Payments towards security deposits		(300	)		-

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES		2,680			(1,955,882	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from convertible notes payable		-			425,000
Proceeds from loan payable		560,000			-
Principal payment of note payable		(60,000	)		-
Principal payments towards loan payable		(6,548	)		-
Advances from related parties		594,696			95,764
Capital contributions from non-controlling interest owners		150			225,000
Capital contributions		-			1,350,000

NET CASH PROVIDED BY FINANCING ACTIVITIES		1,088,298			2,095,764

Net (decrease) increase in cash and cash equivalents		(61,053	)		22,945

Cash and cash equivalents, beginning of period		100,012			-

Cash and cash equivalents, end of period	$	38,959		$	22,945

SUPPLEMENTAL CASH FLOW INFORMATION:

Cash paid for interest	$	1,636		$	-

NON-CASH ACTIVITIES:
Deferred financing costs associated with the Tim Nye loan	$	40,000		$	-
Common stock issued for accrued consulting services	$	30,000		$	-

The accompanying notes are an integral part of these condensed consolidated financial statements

NOTE 1.

ORGANIZATION AND DESCRIPTION OF BUSINESS

Starstream Entertainment, LLC (“SSE”) was formed on January 10, 2013, in the State of Delaware. SSE was formed to produce, promote, support and/or develop motion pictures and engage in any and all activities necessary or incidental to the foregoing.

SSE originally had three members: Charles Bonan (“Bonan”), Kim Leadford, (“Leadford”) and Daniel McCarney.

Starstream Films, LLC (“SSF”) was formed on April 11, 2012, in the State of Delaware. SSF’s purpose is to have an ownership interest in Butler Films, LLC (“Butler”), a Delaware limited liability company. Butler was formed for the purpose of financing, developing, producing, distributing and exploiting the motion picture currently entitled “The Butler.”

SSF originally had two members: Bonan and Lawrence Ladove (“Ladove”). Bonan originally had a 70% ownership interest in SSF and Ladove originally had a 30% ownership interest in SSF.

In August 2013, Bonan and Ladove assigned their respective membership interests in SSF to SSE. In connection with and in consideration of the assignment by Ladove, SSF initiated a payment direction order for 30% of its film rights with respect to “The Butler” to the Ladove Family Trust. As a result, SSF became a wholly owned subsidiary of SSE entitled to 70% of such rights.

Starstream ELP, LLC (“ELP”) was formed on December 7, 2012, in the State of Delaware. ELP was formed to produce, promote, support and/or develop motion pictures and engage in any and all activities necessary or incidental to the foregoing.

ELP originally had three members: Bonan, NV Productions LLC (“NV”) and Bryan Mansour (“Mansour”). Bonan had a 79.032% ownership interest in ELP, NV had a 14.516% ownership interest in ELP and Mansour had a 6.452% ownership interest in ELP.

In August 2013, Bonan assigned his membership interest in ELP to SSE. In December 2013, Mansour assigned his membership interest in ELP to SSE. As a result, SSE became entitled to 85.484% ownership interest in ELP and NV had a 14.516% ownership interest in ELP.

Since the assignment of the membership interests are between entities under common control, the transfers have been accounted for in a manner similar to a pooling of interests. As a result, the assets and liabilities are recorded at their historical carrying values and the combination has been given retroactive effect in these consolidated financial statements. Non-controlling interest represents the ownership interests in ELP that have not been assigned to SSE.

SSE owns 100% of SUAD Film, LLC (“SUAD”), a Delaware limited liability company formed on August 27, 2013. SUAD was formed to produce, promote, support and/or develop motion pictures and engage in any and all activities necessary or incidental to the foregoing. Under the terms of the SUAD limited liability company agreement, SSE is committed to funding SUAD with $100,000. As of June 30, 2014, SSE has funded $109,038 to SUAD, of which $11,604 were direct expenses paid by SSE on behalf of SUAD.

The Company is committed to funding various entities that are producing certain motion pictures. As such, the Company may need to raise additional funds to meet those funding commitments.

On October 8, 2013, SSE and members of SSE (the “Starstream Members”) entered into a Securities and Exchange Agreement (the “Securities and Exchange Agreement”) with Starstream Entertainment, Inc. (“SSET”). Pursuant to the Securities Exchange Agreement, on October 8, 2013, the Starstream Members assigned 100% of the membership interests of SSE held by them to SSET, in consideration of an aggregate of 12,200,822 newly issued shares of SSET’s Common Stock. The shares of SSET’s Common Stock received by the Starstream Members in such transaction constituted approximately 62.4% of SSET’s issued and outstanding Common Stock, giving effect to the issuance of shares pursuant to the Securities and Exchange Agreement. As a result, SSE became SSET’s wholly owned subsidiary. This transaction is being accounted for as a reverse merger (“Reverse Merger”) and SSE is deemed to be the acquirer. Consequently, the assets and liabilities and the historical operations that will be reflected in the consolidated financial statements prior to the Reverse Merger will be those of SSE.

Effective November 4, 2013, the Company effected a stock dividend of 3.272 shares of common stock for each share of common stock issued and outstanding on that date. On November 4, 2013, the Company initially issued 1,276,087 shares of common stock on account of the dividend. The remaining 12,234,678 shares of common stock related to the stock dividend were issued in February 2014.

On March 24, 2014, SSE entered into an operating agreement by and between SSE, Zoë Worth (“Worth”) and Dylan Harris (“Harris”), collectively its members, as to the formation of Bentley House Productions, LLC (“BHP”), formerly Big Picture Productions, LLC.

On April 23, 2014 and April 24, 2014 the Board of Directors and the stockholders, respectively, of SSET approved a one-for-three reverse stock split of the Company’s common stock to be effected on May 7, 2014. The effect of the November 2013 stock dividend and the May 2014 stock split have been given retroactive treatment in these financial statements.

SSET, its subsidiary SSE, and SSE’s subsidiaries SUAD, SSF, ELP, and BHP are collectively referred to as the “Company”.

NOTE 2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete consolidated financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

Basis of accounting

The Company’s policy is to maintain its books and prepare its consolidated financial statements on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America.

Principles of consolidation

Accounting principles generally accepted in the United States of America address the consolidation of entities where the usual condition (ownership of a majority voting interest) of consolidation does not apply. In the absence of clear control through voting interest, a company’s exposure (variable interest) to the economic risks and potential rewards from the activities of variable interest entities (“VIEs”) is the best evidence of control. If a company holds a majority of the variable interests of another entity, it would be considered the primary beneficiary.

The Company has determined that BHP is a variable interest entity of which the Company is the primary beneficiary since it is the only investor providing financial support. Every reporting period, the Company reassesses whether BHP is a VIE and if the Company remains the primary beneficiary. As such, the conclusion regarding the primary beneficiary status is subject to change and circumstances are continually reevaluated.

The accompanying consolidated financial statements include the activities of SSET, SSE, SSF, ELP, SUAD, and BHP. All intercompany transactions have been eliminated in these consolidated financial statements.

In accordance with Accounting Standards Codification (“ASC”) 810 “Consolidations”, the Company has reported non-controlling interest as a separate component of stockholders’ equity and presents the net loss allocable to non-controlling interest and the net loss attributable to the stockholders of the Company separately in the consolidated statements of operations.

Use of estimates

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

Reclassifications

Certain prior period amounts were reclassified to conform with the current period presentation.

Cash and cash equivalents

The Company considers highly liquid investments with original maturities of three months or less when purchased as cash equivalents. At times throughout the year, the Company might maintain bank balances that exceed Federal Deposit Insurance Corporation insured limits. Periodically, the Company evaluates the credit worthiness of the financial institutions, and has not experienced any losses in such accounts.

Property and equipment, net

Property and equipment are stated at cost, less accumulated depreciation and amortization. Expenditures for maintenance and repairs are charged to expense when incurred, while renewals and betterments that materially extend the life of an asset are capitalized.

The costs of assets sold, retired, or otherwise disposed of, and the related allowance for depreciation, are eliminated from the accounts, and any resulting gain or loss is recognized in the results from operations. Depreciation is provided using the straight-line method over the estimated useful lives of the assets, which are as follows:

Automobiles

3 and 5 years

Investments in film productions

The Company accounts for its investments in film productions under the cost method, as the Company does not exercise significant control over such investments. The Company’s investments in film productions are increased by additional capital contributions to such investments and are reduced by distributions received from the investments. Once the Company has recouped its investment, any additional distributions received from the investments will be reflected as income.

Investments in film productions are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the investments may no longer be appropriate. When warranted, the Company assesses recoverability of the investments in film productions by estimating the future net cash flows expected to result from the investments. If the future net cash flows are less than the carrying value of the investments, an impairment loss is recorded equal to the difference between the carrying value and fair value.

As of June 30, 2014 and December 31, 2013, the Company has determined that its investments in film productions were not impaired and, therefore, has not recorded an impairment loss.

Income taxes

For the period prior to October 8, 2013, SSE, and its subsidiaries, are not subject to Federal and State income taxes, as they are all limited liability companies. Each member was responsible for the tax liability, if any, related to its proportionate share of their taxable income. SSE and its subsidiaries are pass-through entities. SSET, along with its consolidated subsidiaries, is deemed a corporation and thus is a taxable entity. No provision for income taxes was reflected in the accompanying consolidated financial statements as the Company did not have income through June 30, 2014. There were no uncertain tax positions that would require recognition in the consolidated financial statements through June 30, 2014.

Generally, federal, state and local authorities may examine the Company’s tax returns for three years from the date of filing, and the current and prior three years remain subject to examination as of June 30, 2014.

The Company’s conclusions regarding uncertain tax positions may be subject to review and adjustment at a later date based upon ongoing analyses of tax laws, regulations and interpretations thereof as well as other factors.

The Company accounts for income taxes under ASC 740-10-30. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. 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. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date.

Long-lived assets

On a periodic basis, management assesses whether there are any indicators that the value of the Company’s long-lived assets may be impaired. An asset’s value may be impaired only if management’s estimate of the aggregate future cash flows, on an undiscounted basis, to be generated by the asset are less than the carrying value of the asset.

If impairment has occurred, the loss is measured as the excess of the carrying amount of the asset over its fair value. The Company’s estimates of aggregate future cash flows expected to be generated by each long-lived asset are based on a number of assumptions that are subject to economic and market uncertainties. As these factors are difficult to predict and are subject to future events that may alter management’s assumptions, the future cash flows estimated by management in their impairment analyses may not be achieved. No impairment was identified during the six months ended June 30, 2014 and the year ended December 31, 2013.

Fair value measurement

The carrying amounts reported in the Company’s consolidated financial statements for employee advances, prepaid expenses, accounts payable, and accrued expenses approximate their fair value because of the immediate or short-term nature of these financial instruments. The carrying amounts reported in the balance sheet for its notes payable and convertible notes payable approximates fair value as the contractual interest rate and features are consistent with similar instruments of similar risk in the market place.

Film production costs

For films produced by the Company, capitalized costs include all direct production costs and production overhead. As of June 30, 2014, the Company had $109,056 in film production costs.

NOTE 3.

VARIABLE INTEREST ENTITY

Bentley House Productions

The classification and carrying amounts of assets and liabilities of BHP in the consolidated balance sheet are as follows for the periods ended June 30, 2014 and December 31, 2013:

	June 30, 2014		December 31, 2013

Cash and cash equivalents	$	6,129	$	--
	$	6,129	$	--

Non-controlling interest		19,902		--
	$	19,902	$	--

As of June 30, 2014, SSE has contributed $35,832, of which, $832 were expenses paid directly by SSE on behalf of BHP.

NOTE 4.

GOING CONCERN UNCERTAINTY

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business and does not include any adjustments that might result from uncertainty about the Company’s ability to continue as a going concern.

The Company incurred a net loss of $1,520,330 and $133,161 for the six months ending June 30, 2014 and 2013, respectively. These matters raise reasonable doubt about the ability of the Company to continue as a going concern.

Management believes that it will be successful in obtaining sufficient financing to execute its operating plan. However, no assurances can be provided that the Company will secure additional financing, or achieve and sustain a profitable level of operations. To the extent that the Company is unsuccessful in its plans, the Company may find it necessary to contemplate the sale of its assets and curtail operations.

NOTE 5.

INVESTMENTS IN FILM PRODUCTIONS

Investments in film productions, carried at cost, represent the following as of June 30, 2014 and December 31, 2013:

	2014		2013
Film Production	Investment Balance		Investment Balance

TUELP Investments, LLC	$	1,614,592	$	1,614,592
Butler Films, LLC		91,732		148,586
Life After Beth LLC		1,015,000		1,012,500
Pigeon The Cat Films, Inc.		322,109		270,735
	$	3,043,433	$	3,046,413

TUELP Investments, LLC

In January 2013, ELP entered into an agreement with Abbolita Productions, Inc. and the Ladove Family Trust, whereby ELP agreed to obtain 47% equity ownership in TUELP Investments, LLC (“TUELP”) for $1,525,000. TUELP is an entity formed for the sole purpose of financing Switch Productions LLC (“Switch”), an entity formed to develop, produce, promote and sell the motion picture currently entitled “Life of Crime”. In January 2013, TUELP obtained 100% equity ownership in Switch for a commitment amount of $3,250,000, subject to change in accordance with financing requirements for the production of “Life of Crime”, and as approved by TUELP.

As of June 30, 2014 and December 31, 2013, ELP has contributed $1,614,592 to the production of “Life of Crime”, of which $26,991 were expenses paid directly by SSE on behalf of Switch. For its part, ELP has maintained a 47% equity ownership of TUELP, and in turn, Switch.

As of June 30, 2014 and December 31, 2013, SSE has an 85.484% equity ownership in ELP.

Butler Films, LLC

In August 2012, SSF entered into an agreement with Butler Films, LLC, an entity formed to develop, produce, promote and sell the motion picture currently titled “Lee Daniels’ The Butler.” SSF agreed to co-finance the production costs of the motion picture. As of December 31, 2012, SSF had contributed $500,000 in return for 3.57% equity ownership in Butler Films, LLC. SSF did not make any further contributions through June 30, 2014. The film is complete and no further contributions by the Company are anticipated.

On August 2, 2013, Ladove assigned his 30% equity interest in SSF to SSE, making SSF a wholly owned subsidiary of SSE. In exchange for his assignment, SSF assigned 30% of its equity ownership in Butler Films, LLC to the Ladove Family Trust.

Through June 30, 2014, in accordance with its 70% entitlement to monies received by Butler Films, LLC, the Company has received $258,268 in cash proceeds from Butler Films, LLC.

Life After Beth LLC

In May 2013, SSE entered into an agreement with Life After Beth LLC, an entity formed to develop, produce, promote and sell the motion picture currently titled “Life After Beth”, to co-finance the production costs for the motion picture. As of June 30, 2014 and December 31, 2013, the Company has funded $1,030,000 and $1,012,500 in return for 42% equity ownership in Life After Beth LLC.

On January 16, 2014, the Company received $15,000 towards the recoupment of the investment.

As of June 30, 2014, the film is complete and no additional contributions by SSE or the Company are anticipated.

Pigeon The Cat Films, Inc.

In June 2013, SSE entered into an agreement with Pigeon the Cat Films, Inc., (“PTCF”), a New York corporation incorporated to develop, produce, promote and sell the motion picture currently titled “Trouble Dolls”. As of June 30, 2014, SSE has committed $322,109 to the production costs associated with the motion picture. The commitment amount is subject to change as financing needs for the film are adjusted, and as approved by SSE. For their part, SSE is a 50% shareholder in PTCF.

As of June 30, 2014 and December 31, 2013, SSE has contributed $322,109 and $270,735, respectively, of which $78,110 were expenses paid directly by SSE on behalf of PTCF. “Trouble Dolls” is in post-production stage, and further contributions associated with post-production and promotion are anticipated by the Company.

NOTE 6.

PROPERTY AND EQUIPMENT

Property and equipment consisted of the following as of June 30, 2014 and December 31, 2013:

	2014			2013
Vehicles	$	82,625		$	82,625
Less: accumulated depreciation		(13,774	)		(5,072	)

Property and Equipment, Net	$	68,851		$	77,553

Depreciation expense for the six months ended June 30, 2014 and 2013 was $8,702 and $175, respectively.

NOTE 7.

CONVERTIBLE NOTES PAYABLE

On July 19, 2013, SSE entered into a Securities Purchase Agreement with an accredited investor for a financing of up to $200,000 (the “July 2013 Agreement”), whereby it issued to the investor a 10% senior secured convertible note in the principal amount of $100,000 (the “Note”). The Note is secured by all the assets of SSE and ranks senior to any other indebtedness of SSE. The Note is convertible at the option of the note holder into shares of the common stock of SSET at a conversion price equal to 75% of the per share price of the private placement consummated in connection with the Reverse Merger.

On July 24, 2013, SSE and the investors amended and restated the July 2013 Agreement by entering into an Amended and Restated Securities Purchase Agreement, which increased the maximum amount of the financing from $200,000 to $400,000. In connection with the amendment and restatement of the July 2013 Agreement, SSE completed a second closing under the agreement, whereby it issued to certain accredited investors 10% senior secured convertible notes in the aggregate principal amount of $300,000 (the “July Notes”) on the same terms as the Note. Of the total principal issued, $150,000 was issued to Bonan, a related party. On July 24, 2014, SSET and Bonan entered into an extension agreement extending the $150,000 convertible note payable to a due date of July 24, 2015.

In January 2014, $125,000 of a $150,000 10% senior secured convertible note was assigned to a different holder. The new holder of this note has agreed to forbear exercising any rights with respect to the note while the holder and SSET negotiate a restructuring of the note intended to extend the maturity date of the note to October 24, 2014.

On August 6, 2013, SSE and the investors amended and restated the July 2013 Agreement by entering into an Amended and Restated Securities Purchase Agreement, which increased the amount of the financing from $400,000 to $1,000,000. In connection with the amendment and restatement of the July 2013 Agreement, SSE completed a third closing under the July 2013 Agreement, whereby it issued to an accredited investor a 10% senior secured convertible note in the principal amount of $100,000, on the same terms as the Note.

NOTE 8.

NOTE AND LOANS PAYABLE

On October 10, 2013, SSET entered into a six year loan agreement to borrow funds for the purchase of a vehicle. The total principal amount of the loan was $74,950. The loan has an annual interest rate of 3.47% and monthly payments are made in the amount of $1,169, ending October 3, 2019. As of June 30th, 2014, the remaining principal balance outstanding is $66,494.

On February 10, 2014, SSET and SSE entered into a one-year loan agreement to borrow funds for exclusive use as working capital and to pay the associated loan fees, lender legal fee, accrued interest and expenses of the lender. These funds or advances are not to exceed $600,000. The loan was advanced to SSET in the full amount of $600,000 on February 14, 2014. From this initial amount, the lender paid the $25,000 lender loan fee and the $15,000 lender legal fee, with the remaining $560,000 balance delivered to SSET. Interest is to accrue at a rate of 1% per month, compounded monthly, beginning on the date of the initial advance until the loan is paid in full. The loan, and all accrued interest, are payable on the first of the following to occur: (a) an event of default; (b) February 10, 2015; or (c) the date the borrowers (or the collection account related to the security agreement described below) receive monies from any mandatory prepayments in connection with the loan collateral or the financial close of a distribution deal for the film “Life After Beth,” until the loan is fully repaid.

The borrowers also entered into a security agreement dated February 10, 2014 with the lender, pursuant to which, as security for the full payment and performance of their obligations under the loan agreement and related documents, the borrowers granted the lender a first priority security interest in their membership interest in Life After Beth, LLC (a limited liability company of which a 42% interest is held directly by SSE and, therefore, indirectly by SSET) and in their right, title and interest in and to the motion picture “Life After Beth” and any and all payments, proceeds or other consideration received by the borrowers arising from such membership interest or motion picture. The full value of the loan is classified as a loan payable on the balance sheet. As of June 30, 2014, the total principal and accrued interest outstanding on the loan is $602,700.

NOTE 9.

RELATED PARTY TRANSACTIONS

Employee advances

Employee advances include funds advanced on behalf of an employee of the Company, totaling $35,841. Such advances are short-term advances that are non-interest bearing and that are due on demand. The total balance owed is expected to be paid in full in 2014.

Due to related parties

Due to related parties represents funds advanced to the Company to fund working capital needs of the Company. Such advances are short-term advances that are non-interest bearing and that are due on demand. As of June 30, 2014, a total of $668,696 in principal amount is due to Bonan and $38,600 is due to other related parties.

NOTE 10.

EQUITY

On October 8, 2013, the Company amended its Articles of Incorporation to increase its authorized stock to 110,000,000 shares consisting of 100,000,000 shares of common stock, par value $0.001 per share, and 10,000,000 shares of “blank check” preferred stock, par value $0.001 per share. Our Board of Directors has the authority, without further action by the stockholders, to issue from time to time the blank check preferred stock in one or more series for such consideration and with such relative rights, privileges, preferences and restrictions that the Board may determine. The preferences, powers, rights and restrictions of different series of preferred stock may differ with respect to dividend rates, amounts payable on liquidation, voting rights, conversion rights, redemption provisions, sinking fund provisions and purchase funds and other matters.

Preferred Stock

After the Reverse Merger, on October 9, 2013, the Company filed with the Secretary of State of the State of Nevada a Certificate of Designation of Preferences and Rights of Series A Preferred Stock (the “Series A Certificate”). Pursuant to the Series A Certificate, there are two shares of Series A Preferred Stock authorized. Shares of Series A Preferred Stock have no dividend rights. On October 9, 2013, the Company issued two shares of Series A Preferred Stock, one each to Bonan and Leadford.

The holders of the Series A Preferred Stock are entitled to vote together with the holders of the Company’s common stock, with such holders entitled together to 66.7% of the total votes on all such matters, and the holders of common stock and any other shares entitled to vote are entitled to their proportional share of the remaining 33.3% of the total votes based on their respective voting power. The holders of Series A Preferred Stock may only vote unanimously. Each share of Series A Preferred Stock is convertible into one share of the Company’s common stock at the option of the holder. Shares of Series A Preferred Stock are not redeemable and have no liquidation preference.

Common stock

On October 8, 2013, Yulia Marach, shareholder, director and chief executive officer of the Company, and SSE entered into a Stock Purchase Agreement, pursuant to which Ms. Marach sold to SSE an aggregate of 1,333,333 shares of the Company’s common stock representing approximately 77.4% of the then issued and outstanding shares of common stock. SSE agreed to cancel the shares purchased from Ms. Marach following the issuance of common stock in accordance with the Securities Exchange Agreement.

Pursuant to the Securities Exchange Agreement, on October 8, 2013, the Starstream Members assigned 100% of the membership interests of SSE held by them to SSET, in consideration of an aggregate of 12,200,822 newly issued shares of SSET’s common stock. The shares of SSET’s common stock received by the SSE Members in such transaction constituted approximately 62.4% of SSET’s issued and outstanding common stock after giving effect to the issuance of shares pursuant to the Securities Exchange Agreement. As a result, SSE became SSET’s wholly owned subsidiary. This transaction is being accounted for as a reverse acquisition and SSE is deemed to be the acquirer. Consequently, the assets and liabilities and the historical operations that will be reflected in our consolidated financial statements prior to the Reverse Merger will be those of SSE.

On October 8, 2013, SSET issued 994,742 shares of common stock to a consultant for consulting services rendered valued at $0.5829 per share, or $579,801.

Upon closing of the Reverse Merger, certain 10% convertible promissory notes in the aggregate principal amount of $825,000 previously issued by SSE were automatically converted into 1,864,762 shares of common stock of SSET together with the interest accrued on such notes from the date of issuance to the closing date of the Reverse Merger, October 8, 2013, in the amount of $24,653, which converted into 55,724 shares of common stock of SSET.

On October 8, 2013, SSET entered into and consummated transactions pursuant to a subscription agreement with certain accredited investors whereby SSET issued and sold to the investors for $0.5829 per share an aggregate of 857,833 shares of Common Stock for an aggregate purchase price of $500,000.

On November 15, 2013, SSET entered into and consummated transactions pursuant to a subscription agreement with certain accredited investors whereby SSET issued and sold to the investors for $2.49 per share an aggregate of 160,281 shares of common stock for an aggregate purchase price of $399,100.

On December 26, 2013, SSET issued 52,910 shares of common stock to Mansour for his 6.452% interest in ELP valued at $1.89 per share, or $100,000.

On December 26, 2013, SSET issued 21,164 shares of common stock at a share price of $1.89 per share for $40,000.

On January 6, 2014, the Company issued 20,000 shares of common stock for consulting services, valued at $3.51 per share, or $70,200

On March 11, 2014, the Company issued 10,000 shares of common stock for consulting services, valued at $2.25 per share, or $22,500.

On May 19, 2014, the Company issued 20,000 shares of common stock for consulting services, valued at $1.31 per share or $26,225.

NOTE 11.

COMMITMENTS AND CONTINGENCIES

Concentration of credit risk

The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents in financial institutions. At times, such deposits and investments may be in excess of amounts insured by the Federal Deposit Insurance Corporation. The Company’s management does not believe the Company is exposed to any significant credit risk on its cash and cash equivalents.

Professional service agreement

In July 2013, the Company entered into a professional service agreement with a consultant, whereby it agreed to pay the consultant a guaranteed fee of $150,000, payable in equal quarterly amounts over a 12-month period. As of December 31, 2013, the Company paid the consultant $75,000. As of December 31, 2013, the remaining balance, totaling $75,000, has been accrued for in accounts payable and accrued expenses in the accompanying December 31, 2013 consolidated balance sheet.

For the six months ended June 30, 2014, the Company has made $112,500 of the remaining payments under the agreement, and $37,500 remains accrued in accounts payable and accrued expenses in the accompanying June 30, 2014 consolidated balance sheet.

Lease agreements

On September 23, 2013, the Company entered into a lease agreement to rent office space in Los Angeles, California. The lease is for one year and begins on October 1, 2013. Monthly payments are for $11,500, and a security deposit of $15,000 was paid in September 2013, along with the first month’s rent.

Overhead Agreement

On February 19, 2014, SSET entered into a two-year overhead operating agreement with Destro Films, LLC. Under the terms of the agreement, SSET will pay Destro Films, LLC a total of $250,000, in six equal installments, for the first year beginning February 24, 2014 when the first payment was made. SSET will pay Destro Films, LLC an additional total of $250,000 over the course of the second year of the agreement in six equal installments, ending February 23, 2016. In exchange for the funding, SSET shall have a right of first negotiation to provide production financing for each motion picture for which Destro Films, LLC or its affiliates owns and/or controls the rights. For the six months ended June 30, 2014, the Company has paid $83,334 to Destro Films, LLC.

NOTE 12.

FAIR VALUE OF FINANCIAL INSTRUMENTS

Management believes that the carrying values of the Company’s financial instruments approximate their respective fair values as of June 30, 2014 and December 31, 2013.

NOTE 13.

SUBSEQUENT EVENTS

On July 21, 22 and 29, 2014 and August 5, 2014, the Company entered into short-term loans with Bonan in the amounts of $5,000, $5,000, $60,000 and $40,000, respectively. These loans represent advances to the company, have no stated maturity date and are not interest-bearing loans.

As of July 19, 2014, a $100,000 convertible note payable was due and is now in default. Default interest begins 10 days after the maturity date at a rate of 15% per annum.

On July 24, 2014, the Company received $535,611 from Life After Beth towards the recoupment of the investment. The Company then paid $535,611 toward the principal balance of the $600,000 loan advanced on February 14, 2014.

On July 24, 2014, SSET and Bonan entered into an extension agreement extending the $150,000 convertible note maturity date to July 24, 2015.

As of July 24, 2014, a $100,000 convertible note payable was due and is now in default. Default interest begins 10 days after the maturity date at a rate of 15% per annum.

As of July 24, 2014 the holder of $125,000 of the $150,000 convertible note payable has agreed to forbear exercising any rights with respect to the note while the holder and SSET negotiate a restructuring of the note intended to extend the maturity date of the note to October 24, 2014. The balance of $25,000 is in default. Default interest begins 10 days after the maturity date at a rate of 15% per annum.

On July 28, 2014, the Company entered into two short-term loans with related parties. The company borrowed $32,500 from each of the two related parties for total short-term borrowing of $65,000. These loans have no stated maturity dates and are non-interest-bearing.

On July 31, 2014, the Company entered into a loan agreement for $250,000. The loan bears an interest rate of 1% per annum (term 120 days) to be calculated on the basis of a 360-day year. Additional consideration in the amount of $25,000, minus any interest that was already paid, is due on or before the maturity date of the loan for a total payment due of $275,000. The entirety of the proceeds of the loan are being used to invest in the production of a new film, described below.

In July 2014, the Company formed a new wholly owned subsidiary, YHSSE, LLC, a Delaware limited liability company (“YHSSE”), in connection with the Company’s plans to produce and invest in a new feature-length motion picture to be titled “Yoga Hosers,” which is to star Johnny Depp and be directed by Kevin Smith. Similar to the structure of the Company’s other production and finance transactions, YHSSE will own a partial interest in the underlying production company, Yoga Hosers, LLC, a California limited liability company, which will oversee directly the production of the film. Beginning July 22, 2014, Yoga Hosers, LLC (the production entity) commenced production activities on “Yoga Hosers.”

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws. These include statements about our expectations, beliefs, intentions or strategies for the future, which we indicate by words or phrases such as “anticipate,” “expect,” “intend,” “plan,” “will,” “we believe,” “management believes” and similar language. Except for the historical information contained herein, the matters discussed in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in this Quarterly Report are forward-looking statements that involve risks and uncertainties. The risks discussed, as well as any cautionary language, in this Quarterly Report and in other of our filings with the Securities and Exchange Commission provide examples of risks, uncertainties and events that may cause our actual results to differ materially from those projected. Except as may be required by law, we undertake no obligation to update any forward-looking statement to reflect events after the date of this Quarterly Report.

Overview

Reverse Acquisition

On October 8, 2013, Starstream Entertainment, LLC (“SSE”) entered into a Securities Exchange Agreement with Starstream Entertainment, Inc. (formerly Gelia Group Corp., “SSET”). Pursuant to the Securities Exchange Agreement, on October 8, 2013, the members of SSE assigned 100% of the membership interests of SSE held by them to SSET, in consideration of an aggregate of 12,200,822 newly issued shares of SSET’s Common Stock. The shares of SSET’s Common Stock received by the SSE members in such transaction constituted approximately 62.4% of SSET’s issued and outstanding Common Stock after giving effect to the issuance of shares pursuant to the Securities Exchange Agreement. As a result, SSE became SSET’s wholly owned subsidiary. This transaction is being accounted for as a reverse acquisition (“Reverse Acquisition”) and SSE is deemed to be the acquirer. Consequently, the assets and liabilities and the historical operations that are reflected in our consolidated financial statements prior to the Reverse Acquisition are those of SSE.

Business Overview

The Company is an independent entertainment production company. We develop, produce, market and obtain distribution for feature-length motion pictures and entertainment projects. For the year ended December 31, 2013, the Company received first proceeds from exploitation of its film rights in the amount of $201,413. For the six months ended June 30, 2014, the Company received an additional $71,855 in proceeds from exploitation of its film rights. These proceeds will be applied against the respective investment balance until it exceeds the total amount invested, at which point the excess will be accounted for as revenues on the statement of operations.

The Company’s business is to produce motion pictures and entertainment projects and to fully exploit the projects and their ancillary rights through several avenues, including, but not limited to, theatrical release, video-on-demand, digital distribution, and television outlets. The Company generally acquires ownership in media properties at a late stage when the properties are fully packaged and ready for production, and creates value by providing production and marketing expertise. The Company’s target segment of the entertainment industry is the emerging market of high-quality, low-cost, commercially viable content. To date, the Company has produced and/or financed four feature films and the Company is currently preparing to assist with the financing and production of a new feature film to be called “YOGA HOSERS” to star Johnny Depp and be directed by Kevin Smith. Similar to the structure of the Company’s other production and finance transactions, a newly formed subsidiary of the Company will invest in and support the production entity, which will oversee directly the production of the film. The Company will also perform production activities for the film.

Results of Operations

For the three months ended June 30, 2014 and 2013

For the three months ended June 30, 2014 and 2013, we had total expenses of $599,231 and $133,161, respectively. Total expenses for the six months ended June 30, 2014 primarily included general and administrative expenses of $70,974, professional fees of $215,839, payroll costs of $168,460, travel expense of $38,128, meals and entertainment expenses of $14,228, insurance expense of $28,700, rent and related expenses of $35,824, interest expense of $15,356, and depreciation expenses of $4,375. The increase in expenses was due to the expansion of our operations, which necessitated hiring additional personnel and increased use of professional services. The Company expects expenses to continue to grow in the future in direct correlation with the future expansion of our business operations.

Net loss for the three months ended June 30, 2014 and 2013 was $599,231 and $133,161, respectively, and is primarily attributable to expenses incurred for several projects to develop, produce, market and plan to distribute feature-length motion pictures, as well as consulting fees paid in common stock and legal fees associated with SEC filings.

For the six months ended June 30, 2014 and 2013

For the six months ended June 30, 2014 and 2013, we had total expenses of $1,520,330 and $133,161, respectively. Total expenses for the six months ended June 30, 2014 primarily included general and administrative expenses of $94,298, professional fees of $757,008, payroll costs of $360,509, travel expense of $89,257, meals and entertainment expenses of $31,724, insurance expense of $55,861, rent and related expenses of $74,613, interest expense of $31,198, and depreciation expenses of $8,702. The increase in expenses was due to the expansion of our operations, which necessitated hiring additional personnel and increased use of professional services. For the six months ended June 30, 2014, the Company incurred consulting expenses of $88,925 through the issuance of common stock to a consultant. The Company expects expenses to continue to grow in the future in direct correlation with the future expansion of our business operations.

Net loss for the six months ended June 30, 2014 and 2013 was $1,520,330 and $133,161, respectively, and is primarily attributable to expenses incurred for several projects to develop, produce, market and plan to distribute feature-length motion pictures, as well as consulting fees paid in common stock and legal fees associated with SEC filings.

For the period prior to October 8, 2013, SSE, and its subsidiaries, were not subject to Federal and State income taxes, as they were all limited liability companies. Each member was responsible for the tax liability, if any, related to its proportionate share of its taxable income. SSE and its subsidiaries are pass-through entities. SSET, along with its consolidated subsidiaries, is deemed a corporation and thus is a taxable entity. Accordingly, no provision for income taxes was reflected in the accompanying consolidated financial statements as the Company did not have income through June 30, 2014.

Liquidity, Capital Resources and Going Concern

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States, which contemplates continuation of the Company as a going concern.

The Company has experienced recurring losses through June 30, 2014. The Company recognized a net loss of $1,520,330 and $133,161 for the six months ended June 30, 2014 and 2013, respectively. As of June 30, 2014, the Company had cash on hand of $38,959, and current liabilities of $2,514,199. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The recoverability of a major portion of the recorded asset amounts shown in the accompanying consolidated balance sheet is dependent upon continued operations of the Company, which, in turn, is dependent upon the Company’s ability to raise capital and/or generate positive cash flows from operations. The consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded assets and classifications that might be necessary in the event the Company cannot continue in existence.

The Company is committed to funding various entities that are producing certain motion pictures. As of June 30, 2014, the Company has funded $3,344,100 in such commitments. The Company has met all of its current funding commitments for film productions. The Company will need to raise additional funds to meet any future funding obligations and working capital needs until significant revenues begin to be realized from exploitation of the film rights to the Company’s productions. For the six months ended June 30, 2014 and the year ended December 31, 2013, SSE received cash proceeds from exploitation of its film rights in the amount of $71,855 and $201,413, respectively, and anticipates receiving additional cash proceeds, although such proceeds would be realized in the future, if at all. The Company expects to realize revenues from its additional film projects after the films are released and revenues are allocated per each film's collection account management agreements. In addition, the Company continues to pursue distribution and other monetization avenues for its film projects. The Company is exploring working capital sources including equity and debt issuances to meet the Company’s short and medium term needs including the service or refinancing of existing indebtedness. There is no guarantee that we will be able to raise any additional capital, or that, if such capital is available, it will be available on terms acceptable to us.

The foregoing represents the Company’s best estimates as of the date of this report and may materially vary based upon actual experience. The inability of the Company to obtain funding, either in the near term and/or longer term, or to realize significant revenue from its motion picture projects, will materially affect the ability of the Company to implement its business plan and such failure could jeopardize the viability of the Company. In that case, the Company may need to suspend its operations and reevaluate and revise its plan of operations.

As of June 30, 2014, the Company had a working capital deficit of $2,381,339. The Company has liabilities totaling $2,568,808 as of June 30, 2014, which is generally comprised of accounts payable and accrued expenses of $596,509, convertible notes payable of $500,000, accrued interest of $49,308, loans payable totaling $666,494, and amounts due to related parties of $707,296.

Net cash used in operating activities

Net cash used in operating activities was $1,152,031 and $116,937 for the six months ended June 30, 2014 and 2013, respectively. Cash was used primarily to fund our operating losses exclusive of non-cash expenditures such as stock compensation for services. For the six months ended June 30, 2014, operating activities were generally impacted by increases in net loss of $1,387,169, offset by an increase in accounts payable and accrued expenses of $230,350 and an increase in the issuance of common stock of $88,925, all of which were primarily related to expenditures incurred to develop the operations of the Company.

Net cash provided by investing activities

Net cash provided by investing activities was $2,680 for the six months ended June 30, 2014, as compared to net cash used in investing activities of $1,955,882 for the six months ended June 30, 2013. Cash invested in film productions for the six months ended June 30, 2014 and 2013 totaled $68,875 and $1,955,882, respectively. The Company also received $71,855 in cash proceeds from the exploitation of its film rights during the six months ended June 30, 2014.

Net cash provided by financing activities

Net cash provided by financing activities was $1,088,298 and $2,095,764 for the six months ended June 30, 2014 and 2013, respectively. For the six months ended June 30, 2014, the Company received $560,000 in proceeds from loans payable, and $594,696 in advances from related parties, while making payments towards the principal of notes payable of $60,000, and loans payable of $6,548.

Off-balance Sheet Arrangements

We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources and would be considered material to investors.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company, as defined in Rule 12b-2 of the Exchange Act, we are not required to furnish information under this Item 3.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this report.

Based on such evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of such period, our disclosure controls and procedures are not effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by us in the reports that we file or submit under the Exchange Act and are not effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in our internal controls over financial reporting during our last fiscal quarter that have materially affected or are reasonably likely to materially affect these controls.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

There are no material pending legal proceedings to which we or our subsidiaries are a party or of which any of our or their property is the subject, nor, to the knowledge of the executive officers of the Company, are any such proceedings contemplated by any governmental authority.

There are no material proceedings to which any director, officer, or affiliate of the Company, any owner of record or beneficially of more than five percent of any class of voting securities of the Company, or any associate of any such director, officer, affiliate or security holder is a party adverse to the Company or any of our subsidiaries or in which any such person has a material interest adverse to the Company or any of our subsidiaries.

However, from time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.

ITEM 1A. RISK FACTORS

There have been no material changes in the risk factors previously disclosed in our most recent Annual Report on Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Set forth below are securities we have sold or issued during the quarter ended June 30, 2014 and subsequent thereto through the date of this report that were not registered under the Securities Act, in reliance upon the exemption from registration pursuant to Section 4(2) of the Securities Act or Regulation D of the Securities Act, and that we have not previously reported in a Quarterly Report on Form 10-Q or a Current Report on Form 8-K:

On May 19, 2014, the Company issued an aggregate of 20,000 shares of Common Stock to a consultant in payment of consulting services valued at $26,225.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

SSE is in default under certain 10% senior secured convertible notes issued in July and August 2013. The default is a result of not having paid the principal and interest due thereunder within 5 days of the applicable maturity dates in July and August 2014. As of the date of filing this report, an aggregate of $225,000 in principal amount of such notes is unpaid and in default and an aggregate of $20,890 in accrued interest on such notes is unpaid. In addition, SSE is past due on another 10% senior secured convertible note originally issued in July 2013 in the principal amount of $125,000. As of the date of filing this report, accrued but unpaid interest on this note totals $11,680. The holder of this note has agreed to forbear exercising any rights with respect to the note while the holder and SSET negotiate a restructuring of the note intended to extend the maturity date of the note to October 24, 2014. In addition, Bonan, the holder of a 10% senior secured convertible note originally issued in July 2013 in the principal amount of $150,000 has agreed to extend the maturity date of that note to July 2015 and that note is not in default but remains unpaid and outstanding.

ITEM 4. MINE SAFETY DISCLOSURES

We have no disclosure applicable to this item.

ITEM 5. OTHER INFORMATION

The Company entered into short-term loans with Bonan in the following aggregate amounts: $137,221 in April 2014, $250,000 in May 2014, $132,029 in June 2014, $70,000 in July 2014 and $40,000 in August 2014 (through the date of filing this report). These loans represent advances to the Company, have no stated maturity date and are not interest-bearing loans.

ITEM 6. EXHIBITS

The following documents are filed as part of this report:

Exhibit No.		Description

2.1		Form of Securities Exchange Agreement by and among the Company, SSE and members of SSE dated October 8, 2013⁽¹⁾

3.1		Articles of Incorporation, as amended⁽²⁾

3.2		Certificate of Formation of SSE⁽¹⁾

3.3		Certificate of Formation of Starstream Films, LLC⁽¹⁾

3.4		Certificate of Formation of Starstream ELP, LLC⁽¹⁾

3.5		Certificate of Formation of SUAD Film, LLC⁽¹⁾

3.6		Bylaws⁽³⁾

3.7		Certificate of Formation of YHSSE LLC*

4.1		Certificate of Designations, Preferences, Rights and Limitations of Series A Preferred Stock⁽¹⁾

4.2		Form of Bridge Notes issued pursuant to an Amended and Restated Securities Purchase Agreement dated August 6, 2013⁽¹⁾

10.1		Limited Liability Company Agreement of YHSSE LLC*

31.1		Certification of our Chief Executive Officer, pursuant to Securities Exchange Act rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

31.2		Certification of our Chief Financial Officer, pursuant to Securities Exchange Act rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

32.1		Statement of our Chief Executive Officer under Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)*

32.2		Statement of our Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)*

101.INS		XBRL Instance Document**

101.SCH		XBRL Taxonomy Extension Schema Document**

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document**

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document**

101.LAB		XBRL Taxonomy Extension Label Linkbase Document**

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document**

______________

* Filed herewith

** Furnished herewith. XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

(1)

Incorporated by reference to our Current Report on Form 8-K filed with the SEC on October 15, 2013.

(2)

Incorporated by reference to our Annual Report on Form 10-K for the year ended December 31, 2013 filed with the SEC on April 11, 2014.

(3)

Incorporated by reference to our Registration Statement on Form S-1 (File No. 333-186079) filed with the SEC on January 17, 2013.

SIGNATURES

Pursuant to the requirements 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, on August 19, 2014.

	By:	/s/ Kim Leadford
		Kim Leadford
		Chief Executive Officer

		/s/ Mark Corrao
		Mark Corrao
		Chief Financial Officer

Exhibit 3.7

CERTIFICATE OF FORMATION

YHSSE LLC

This Certificate of Formation of YHSSE LLC has been duly executed and is being filed by the undersigned authorized person for the purpose of forming a limited liability company pursuant to the Delaware Limited Liability Company Act, (6 Del. C. §§18-101, et seq.)

1. Name. The name of the limited liability company formed hereby (the “Company”) is YHSSE LLC.

2. Registered Office. The address of the registered office of the Company in the State of Delaware is c/o Delaware Corporate Services Inc., 901 N. Market St., Suite 705, Wilmington, County of New Castle, Delaware 19801.

3. Registered Agent. The name and address of the registered agent for service of process on the Company in the State of Delaware are Delaware Corporate Services Inc., 901 N. Market St., Suite 705, Wilmington, County of New Castle, Delaware 19801.

IN WITNESS WHEREOF, the undersigned authorized person has caused this Certificate of Formation to be duly executed as of the 28th day of July, 2014.

	Delaware Corporate Services Inc.
	Authorized Person

	By:	/s/ Stefanie Hernandez
		Stefanie Hernandez
		Secretary

	*State of Delaware*
	*Secretary of State*
	*Division of Corporations*
	*Delivered 09:19 AM 07/28/2014*
	*FILED 09:16 AM 07/28/2014*
	*SRV 141001396 - 5575777 FILE*

Exhibit 10.1

LIMITED LIABILITY COMPANY AGREEMENT

YHSSE, LLC

a Delaware limited liability company

This LIMITED LIABILITY COMPANY OPERATING AGREEMENT (this “Agreement”) of YHSSE, LLC (the “Company”) is entered into, as of July 29, 2014 by and among Starstream Entertainment, LLC (“SSE”).

RECITALS

WHEREAS, the parties to this Agreement shall be the sole Members of the Company;

THEREFORE, in consideration of the recitals and the mutual rights and obligations contained herein, the Members hereby agree to the Company’s Operating Agreement as follows:

ARTICLE 1

ORGANIZATION

1.1

Name. The name of the Company is YHSSE, LLC.

1.2

Formation. The Company has been organized as a Delaware Limited Liability Company by the filing of Articles under the Act and the issuance of a certificate of organization by the Secretary of State of Delaware.

1.3

Purposes. The Company is formed to engage in any lawful activity for which limited liability companies may be formed under the Act including, without limitation, to produce, promote, support and/or develop motion pictures and engaging in any and all activities necessary or incidental to the foregoing.

1.4

Registered Office. The Company shall maintain a registered office at 100 Skypark Drive, Monterey, CA 93840.

1.5

Other Offices. The Company may have, in addition to its registered office, offices and places of business at such places, both within and outside the State of Delaware, as the Manager may from time to time determine or the business of the Company may require.

1.6

Registered Agent. The name and address of the registered agent of the Company for service of process on the Company shall be Delaware Corporate Services, Inc.,901 Market Street, Suite 705, Wilmington, Delaware 19801.

1.7

Powers of the Company. The Company shall have the power and authority to take any and all actions necessary, appropriate, advisable, convenient or incidental to or for the furtherance of the purposes set forth herein.

1.8

Term. The Company commenced on the date set forth in the certificate of organization issued for the Company by the Secretary of State of Delaware, and shall continue in existence for the period fixed in its Articles for the duration of the Company, or such earlier times as this Agreement may specify.

1.9

No State Law Partnership. The Members intend that the Company shall not be a partnership (including, without limitation, a limited partnership) and that no Member shall be a partner of any other Member for any purposes other than federal and state tax purposes, and the provisions of this Agreement may not be construed to suggest otherwise.

1.10

Liability to Third Parties. The Members or its designated Manager shall not be liable for the debts, liabilities, contracts or other obligations of the Company, including under a judgment or order of a court.

ARTICLE 2

CONTRIBUTIONS TO CAPITAL

2.1

Member Contribution. The Member contributions to capital shall be in the form and amounts as set forth in Schedule A. The equity ownership of the Company shall be in an amount that is in direct proportion to each Member’s equity contribution.

2.2

No Right to Return. The Member has no right to require the return of all or any part of their capital contribution from the Company prior to its termination, other than that which is granted and received under the Collection Account Management Agreement in connection with the Picture.

2.3

No Interest. No interest shall be payable on any capital contribution made to the Company or on any capital account.

2.4

Increases or Decreases in Capital. It is recognized and anticipated that the Company may require additional capital from time to time, and it is hereby agreed that the Manager shall determine the amount by which the capital of the Company shall be increased or decreased from time to time. Any additional capital contributions shall require a majority vote of Members.

2.5

Allocation of Profits and Losses. The Company’s profits and losses shall be allocated to the Member and the Member’s capital account, if any.

2.6

Transfer. If the Member’s interest is transferred during a fiscal year of the Company, the taxable year of the Company shall not close, instead, all profits and losses shall be prorated for the entire taxable year. Gains or losses from capital transactions shall be allocated to the Member of record on the date of such transaction.

2.7

Distributions. The Company shall not make a distribution to a Member on account of its interest in the Company if such distribution would violate the Act or other applicable law.

2.8

Limited Liability. Except as otherwise provided by the Act and by equitable principles, the debts, obligations and liabilities of the Company shall be solely the debts, obligations and liabilities of the Company, and neither any Member nor any Manager shall be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a Member or Manager of the Company, respectively.

ARTICLE 3

MANAGEMENT

3.1

Powers of Manager. The Manager will have the power on behalf of, and in the name of, the Company to carry out any and all of the purposes described herein and to perform all acts which it may, in its sole discretion, deem necessary, appropriate, advisable, convenient or incidental in furtherance of such purposes. The Manager of the Company shall be SSE.

3.3

Reimbursement of Manager’s Expenses. The Manager shall be reimbursed by the Company for all reasonable out-of-pocket expenses properly incurred by them in connection with the discharge of their obligations under this Agreement in their capacity as a Manager, or otherwise properly incurred on behalf of the Company.

ARTICLE 4

LIABILITY AND INDEMNIFICATION OF MANAGER

The Manager shall not be liable, responsible, or accountable in damages or otherwise to the Company or to the Member for any action taken or failure to act on behalf of the Company, unless (i) such action or omission was performed or omitted in bad faith or constituted gross negligence, willful misconduct, breach of fiduciary duty; (ii) such action resulted in receipt by the Manager of a financial benefit to which it/he/she was not entitled; or (iii) such action constitutes a violation of criminal law. The Company shall indemnify and hold harmless the Manager, and their agents, from and against any and all liabilities, losses, expenses, damages or injuries suffered or sustained by reason of any acts, omissions or alleged acts or omissions in their capacity as Manager hereunder arising out of his activities on behalf of the Company or in furtherance of the interests of the Company, including, but not limited to, any judgment, award, settlement, penalties, fines, reasonable attorneys’ fees and other costs and expenses (which may be advanced by the Company) incurred in connection with the defense of any actual or threatened action, proceeding or claim, provided that such Manager acted in good faith and in a manner reasonably believed to be in the best interests of the Company or not opposed to the best interests of the Company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.

ARTICLE 5

VOTING RIGHTS OF MEMBERS

Each Member shall be entitled to cast one vote for each percentage of ownership interest in the company on all matters properly brought before the Members, and all decisions of the Members shall be made by a majority of the votes cast in the manner set forth immediately above, except as otherwise provided for in this Article 5 or in the Articles of Organization of the Company or in the Members Financing Funding Memorandum and Security Agreement. Furthermore, a majority of votes cast by the Members in the manner set forth in the preceding sentence shall be required to approve the following matters:

A. Dissolution and winding up the affairs of the Company.

B. Merger or consolidation of the Company.

C. Additional Members and/or additional Capital Contributions including any additional loans.

D. Addition of any Officer and/or replacement of any Officer.

Any amendment to this Agreement shall require a unanimous vote of the Members.

No contract or transaction between the Company and one or more of its Members, or a person in which such Member has a financial interest, shall be void or voidable solely because the interested Member was present at or participated in the meeting which authorized the contract or transaction, or solely because his or their votes were counted for such purpose, if the material facts as to his interest and to the contract or transaction were disclosed or known to the Members, and the contract or transaction was approved by a majority vote without counting the vote of the interested Member, or if the contract or transaction was fair to the Company as of the time it was authorized, approved or ratified by the Members. Interested Members may be counted in determining the presence of a quorum at a meeting that authorized the contract or transaction.

ARTICLE 6

WITHDRAWAL

6.1 Bankruptcy or insolvency of any Member, the application for or appointment of a receiver of any Members, the general assignment of any Members for the benefit of creditors, the attempt by any Member to take advantage of any other bankruptcy or insolvency laws, or the seizure of any Member’s interest in the Company under a writ of execution, if the seizure is not released within thirty (30) days, shall cause said Member to be considered as having withdrawn, effective immediately, from this Company; however, the Company shall not hereby be terminated or dissolved, but such happening shall automatically provide each of the other Members (the "Non-withdrawing Members") with an option to purchase a pro rata share of the interest in the Company belonging to said Member involved in such proceedings (the "Withdrawing Member"), at the Fair Market Value as determined hereinafter. Each of such options may be exercised in accordance with the procedures established below:

A. Within sixty (60) days following the date of any such event, one or more of the Non-withdrawing Members (the "Notice Member") may give written notice to the other Non-withdrawing Members of his desire to consider exercise of such option or options. Thereupon the Notice Member shall give written notice to the Withdrawing Member and all legally interested third parties, of the necessity for a determination of Fair Market Value pursuant to this Article.

B. Upon receipt by the Notice Member of the written determination of Fair Market Value, he shall send a copy to each of the Non- withdrawing Members, and shall advise them of the ratable amounts in the offered interest of the Withdrawing Member to which they would be entitled if their options were exercised.

C. Each of the Non-withdrawing Members may exercise the option only by giving written notice to the Notice Member within fifteen (15) days thereafter, and each Member who exercises his option to purchase shall set forth in his notice of acceptance the amount of the interest of the Withdrawing Member to be purchased by him, which amount may not be in excess of the amount specified by the Notice Member as available.

D. If the total amount included in the options exercised shall be less than the interest to be sold, the Notice Member shall notify the Non- withdrawing Members immediately of the difference, and they shall have fifteen (15) days in which to make voluntary arrangements among themselves to purchase the difference and to notify the Notice Member in writing of such arrangement.

E. The Notice Member shall promptly notify the Withdrawing Member and all interested third parties of the options exercised, and the closing for the options exercised shall be held within thirty (30) days following the effective date of exercise.

F. It shall not be necessary that the total of the options exercised include the entire interest of the Withdrawing Member.

G. For all purposes of this Agreement, FAIR MARKET VALUE shall be determined by valuing the immovable and other property of the Company in the following manner: The Fair Market Value of all property of the Company other than immovable property shall be determined by the accountants of the Company by using the value thereof as shown on the books and records of the Company using generally accepted accounting practices. The immovable property of the Company shall be valued as provided for hereinafter. The Notice Member contemporaneously with notice, offer or option, shall name an MAI appraiser, and upon written notice of such appointment to the remaining Members, said appraiser shall be the sole determiner of the Fair Market Value of the immovable property in question unless within ten (10) days following such notice of appointment of appraiser, any or all of the other Members give written notice naming their selection of another MAI appraiser to represent them, in which case the two appraisers shall proceed forthwith to determine Fair Market Value of such immovable property. If, within thirty (30) days following appointment of the second appraiser, the two appraisers are not able to agree, they shall appoint a third appraiser of their choosing and the third appraiser shall within twenty (20) days make a determination of the Fair Market Value of such immovable property and the determination by the third appraiser shall be conclusive and binding on all Members. A report of the appraiser shall be sent to the Notice Member. There shall be subtracted from the Fair Market Value of the immovable and movable property of the Company all encumbrances affecting same, and the remaining value is the Fair Market Value of the total interest of all Members in the Company. The Fair Market Value of the interest in the Company of the Member in question shall be his proportional part of the Fair Market Value of the interests in the Company of all the Members therein.

6.2 No Member shall sell all or any portion of his interest in the Company to any third party unless he first offers to sell such interest to all other Members (the "Non-selling Members") in accordance with the procedures contained herein below:

A. The selling Member ("Seller") shall deposit with the Non-selling Members his written offer to sell to the Non-selling Members setting forth the price and all other terms and conditions of the offer. Each of the Non-selling Members shall have an option to purchase a pro rata share of the interest of the Seller, such pro rata share to be based upon the percentages of ownership of the Non-selling Members ("Ratable Amount").

B. Each option may be exercised only by giving written notice to the Seller within thirty (30) days after the date of the mailing or delivery of a copy of the signed written offer to each Non-selling Member as set forth above. Each Non-selling Member who exercises his option to purchase shall set forth in his notice of acceptance the amount of the interest of the Seller to be purchased by him which amount may not be in excess of his Ratable Amount.

C. If the total amount included in the options accepted shall be less than the entire interest offered by the Seller, the Seller shall notify the Non-selling Members immediately of the difference. Thereafter the Non-selling Members shall have fifteen (15) days in which to make voluntary arrangements among themselves to purchase such difference, and to notify the Seller in writing of such arrangements.

D. Thereafter the Non-selling Members shall promptly notify the Seller whether his offer has been accepted or rejected.

E. Failure of the Non-selling Members to exercise options sufficient to purchase the entire interest offered by the Seller shall constitute a rejection of all options and of the offer by the Seller, and such interest may then be sold to any third party at the same price and upon the same terms and conditions as were provided in the offer from the Seller to the Non-selling Members. Such sale to a third party must be closed within ninety (90) days after the date of the notice of rejection given by the Notice Member, and if not so closed within said time, no transfer shall be made by the Seller, without the Seller repeating anew the procedure set forth above.

F. If the Non-selling Members exercise the options provided in this Article so as to acquire the entire interest offered, the closing shall be held within thirty (30) days after the date on which the notice of acceptance of the offer is given by the Non-selling Members.

6.3 Notwithstanding anything to the contrary set forth elsewhere in this Agreement, each Member shall be free to sell, donate or transfer in any manner whatsoever, all or a portion of his undivided interest in the Company without the necessity of offering such interest to all or any of the other Members in the following cases:

A. Where the transfer by the Member is to any one or more of the following relatives of the Member or a trust established for such relative; namely, a spouse, a direct ascendant or descendant, or the spouse of a direct descendant; and

B. Where, as a result of the death of a Member, his interest is transferred to his succession, his heirs or legatees.

6.4 Unless expressly provided to the contrary, any person acquiring an interest in the Company by any method whatsoever, irrespective of whether such person is a third party, or a Member to this Agreement, or a beneficiary of a trust which is a Member, or a relative of a Member as defined in Paragraph 6.3 of this Article or an heir, legatee or a succession representative of a deceased Member, shall, by the acquisition of such interest, be subject to all terms and conditions of this Agreement as completely as though the acquirer had been an original Member hereto. Nevertheless, each of such persons shall signify his acceptance of the terms and conditions of this Agreement by giving written notice of such to the remaining Members in a form acceptable to said Members.

ARTICLE 7

TAXES

7.1 Fiscal Year. The fiscal year of the Company shall begin on January 1^st and shall be on a calendar year basis.

7.2 Tax Returns. The Manager shall cause to be prepared and filed all necessary federal and state tax returns and make all elections necessary or appropriate, and may retain a certified public accountant for that purpose.

7.3 Partnership Taxation. Neither the Company, nor any Member, may make an election for the Company to be excluded from the application of the provisions of Subchapter K (Partners & Partnership) of Chapter 1 (Normal Taxes & Surtaxes) of Subtitle A (Income Taxes) of the Internal Revenue Code or any similar provisions of applicable state law. The Members agree that for federal and state tax purposes the Company shall be qualified and shall operate as a partnership; however, for all other state law purposes the Company shall not be a partnership, but shall constitute a limited liability company.

ARTICLE 8

GOVERNING LAW AND ASSURANCES

8.1 Indemnification. The Company shall indemnify the Members or Manager (any such person is hereinafter referred to in this Section 8 as an “Indemnified Person”) against expenses (including, but not limited to, attorneys’ fees), judgments, fines and amounts paid in settlement, actually and reasonably incurred by such Indemnified Person (“liabilities”), to the fullest extent now or hereafter permitted by law in connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (as used in this Section 8, “Proceeding” or, in the plural, “Proceedings”), brought or threatened to be brought against such Indemnified Person by reason of the fact that he or she is or was serving in any such capacity.

8.2 Applicability; Survival. The provisions of Sections 8.1 shall be applicable to all Proceedings commenced after the date of this Agreement and arising out of acts or omissions which occur after the date hereof and shall continue as to a person who has ceased to be an Indemnified Person, and shall inure to the benefit of the heirs, executors and administrators of such a person.

8.3 Non-Exclusivity. The indemnification of expenses provided by, or granted pursuant to, this Section 8, shall not be deemed exclusive of any other rights to which those seeking indemnification of expenses may be entitled under this Agreement, under contract or otherwise.

8.4 Governing Law. This Agreement shall be governed by, and construed under, the laws of the State of Delaware without regard to the rules of conflict of laws thereof.

8.5 Severability of Provisions. Each provision of this Agreement shall be considered severable, and if for any reason any provision or provisions herein are determined to be invalid, unenforceable or illegal under any existing or future law, such invalidity, unenforceability or illegality shall not impair the operation of or affect those portions of this Agreement that are valid, enforceable and legal.

8.6 Sole Benefit of Members. The provisions of this Agreement are intended solely to benefit the Members and, to the fullest extent permitted by applicable law, shall not be construed as conferring any benefit upon any creditor of the Company (and no such creditor shall be a third-party beneficiary of this Agreement), and the Member shall have no duty or obligation to any creditor of the Company to make any contributions or payments to the Company.

	MEMBERS:

	STARSTREAM ENTERTAINMENT, LLC

	By:
	Title:

SCHEDULE A

Starstream Entertainment, LLC

100 Skypark Drive

Monterey, CA 93940

EXHIBIT 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a), AS ADOPTED

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Kim Leadford, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Starstream Entertainment, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

	(c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	(d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 19, 2014

/s/ Kim Leadford
Kim Leadford
Chief Executive Officer
(Principal Executive Officer)

EXHIBIT 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a), AS ADOPTED

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Mark Corrao, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Starstream Entertainment, Inc.;

	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

	(c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	(d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 19, 2014

/s/ Mark Corrao
Mark Corrao
Chief Financial Officer
(Principal Financial Officer)

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Starstream Entertainment, Inc. (the “Registrant”) for the period ended June 30, 2014, as filed with the Securities and Exchange Commission on the date hereof, I, Kim Leadford, Chief Executive Officer of the Registrant, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. Based on my knowledge, the Quarterly Report on Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and

2. The information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Starstream Entertainment, Inc.

Dated: August 19, 2014	/s/ Kim Leadford
	Kim Leadford
	Chief Executive Officer
	Starstream Entertainment, Inc.

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Starstream Entertainment, Inc. and will be retained by Starstream Entertainment, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Starstream Entertainment, Inc. (the “Registrant”) for the period ended June 30, 2014, as filed with the Securities and Exchange Commission on the date hereof, I, Mark Corrao, Principal Financial Officer of the Registrant, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. Based on my knowledge, the Quarterly Report on Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and

2. The information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Starstream Entertainment, Inc.