Edgar Filing: ePunk, Inc.

f10k2010_epunk.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

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

For the fiscal year ended September 30, 2010

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

For the transition period from _____________________ to ______________

Commission File Number: 000-52810

ePunk, Inc.

(formerly Truesport Alliances & Entertainment, Ltd.)

(formerly Sewell Ventures, Inc.)

(Exact name of small business issuer as specified in its charter)

Nevada		26-1395403
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

34105 Pacific Coast Highway

Dana Point, CA 92629

(Address of principal executive offices)

(949) 429-7868

(Registrant's telephone number, including area code)

TRUESPORT ALLIANCES & ENTERTAINMENT, LTD.

5795-A Rogers Street

Las Vegas, Nevada 89118

(Former name or former address, if changed since last report)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes o No o

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 o No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o	Smaller reporting company x
(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 o No x

There were 25,058,534 shares of common stock outstanding as of August 11, 2011. The shares of common stock outstanding reflect the 100:1 reverse split effected by a majority of the shareholders on June 20, 2011 and subsequent issuance of 24,750,000 shares on July 8, 2011. The registrant’s common stock is listed but not traded on the Over the Counter exchange under the symbol “PUNK.OB”.

Documents Incorporated by Reference: None.

ePunk, Inc.

(formerly Truesport Alliances & Entertainment, Ltd.)

(formerly Sewell Ventures, Inc.)

Table of Contents to the Annual Report on Form 10-K

for the Fiscal Year Ended September 30, 2010


ITEM		PAGE

PART I

Item 1	Business	1
Item 1A	Risk Factors	3
Item 1B	Unresolved Staff Comments	3
Item 2	Properties	3
Item 3	Legal Proceedings	3
Item 4	(Removed and Reserved)	3

PART II

Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	4
Item 6	Selected Financial Data	6
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	6
Item 7A	Quantitative and Qualitative Disclosures About Market Risk	12
Item 8	Financial Statements and Supplementary Data	13
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	32
Item 9A	Controls and Procedures	32
Item 9B	Other Information	34

PART III

Item 10	Directors, Executive Officers and Corporate Governance	34
Item 11	Executive Compensation	38
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	39
Item 13	Certain Relationships and Related Transactions, and Director Independence	41
Item 14	Principal Accounting Fees and Services	41

PART IV

Item 15	Exhibits, Financial Statement Schedules	42

SIGNATURES		43

Rule 8-02 of Regulation S-X requires that annual financial statements included in annual reports on Form 10-K be audited by an independent public accountant using professional standards and procedures for conducting such audits, as established by generally accepted auditing standards, as may be modified or supplemented by the Securities and Exchange Commission (SEC). The Company has not obtained an audit of its financial statements included in the report before the filing date due to the inability of current management to gain the cooperation of former management who holds the prior Company’s records. Consequently the accompanying financial statements as of September 30, 2010 and for the year then ended have not been audited by an independent public accountant.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

The information contained in this Annual Report on Form 10-K, including in the documents incorporated by reference into this Annual Report on Form 10-K, includes some statements that are not purely historical and that are “forward-looking statements.” Such forward-looking statements include, but are not limited to, statements regarding the Company and its management’s expectations, hopes, beliefs, intentions or strategies regarding the future, including its financial condition and results of operations. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipates,” “believes,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “might,” “plans,” “possible,” “potential,” “predicts,” “projects,” “seeks,” “should,” “will,” “would” and similar expressions, or the negatives of such terms, may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements contained in this Annual Report on Form 10-K are based on current expectations and beliefs concerning future developments and the potential effects on the parties and the transaction. There can be no assurance that future developments actually affecting the Company will be those anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond the parties’ control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements.

PART I

ITEM 1. BUSINESS.

ACQUISITION AND REORGANIZATION

On December 16, 2009, the date of the Acquisition of Seven Base Consulting, LLC. (“7Base”), 7Base was adopted as our business. The merger was accounted for as a reverse merger with Seven Base Consulting, LLC deemed the accounting acquirer. The Company then changed our name to Truesport Alliances and Entertainment, Ltd. (“Truesport”). Then, on April 22, 2011, the Company entered into an agreement with Seven Base Consulting, LLC and LMS, LLC for the purpose of separating the business of 7Base from the business of Truesport. In exchange for all the assets, liabilities (except approximately $359,000 of notes payable) and business of every kind of 7Base, ePunk, Inc. (fka Truesport) received back to treasury and canceled 9,000,000 (Pre reverse split) shares of its common stock. Pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Subtopic 205-20, Discontinued Operations, our fiscal year 2010 financial statement amounts have been reclassified to reflect the impact of the discontinued operations of our 7Base business activities, which was the sole focus of the Company during 2010. Unless otherwise noted, the information provided within our MD&A reflects only the continued operations of our business.

Corporate Information

ePunk, Inc. (the “Company”)(formerly Truesport Alliances & Entertainment, Ltd.) (formerly Sewell Ventures, Inc.) was incorporated under the laws of the State of Delaware on April 27, 2007 to search for investment opportunities.

On December 16, 2009, the Company acquired Seven Base Consulting, LLC, d.b.a. “7Base” a privately owned Nevada limited liability company (“7Base”), pursuant to an Acquisition Agreement (the “Exchange”). 7Base was organized under the laws of the State of Nevada on October 17, 2008. 7Base is a diversified company engaged in the business of designing, manufacturing, selling, distributing, and licensing to others the right to resell high quality, branded apparel, sporting goods, fitness equipment, merchandise, training centers and events under their own brand image. In addition, 7Base generates additional revenues through the sale of consulting, media, and entertainment services related to the mixed martial arts industry. Upon consummation of the Exchange, the Registrant adopted the business plan of 7Base.

Pursuant to the terms of the Exchange, the Company acquired 7Base in exchange for an aggregate of 20,000,000 newly issued shares (the “Exchange Shares”) of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), resulting in an aggregate of 29,200,000 shares of the Company common stock issued and outstanding. As a result of the Exchange, 7Base became a wholly-owned subsidiary of the Company. The Company shares were issued to the members of 7Base on a pro rata basis, on the basis of the membership interests of 7Base held by such 7Base members at the time of the Exchange.

As a result of the ownership interests of the former shareholders of 7Base, for financial statement reporting purposes, the merger between the Company and 7Base was treated as a reverse acquisition with 7Base deemed the accounting acquirer and the Company deemed the accounting acquiree under the purchase method of accounting in accordance with paragraph 805-40-05-2 of the FASB Accounting Standards Codification. The reverse merger was deemed a capital transaction and the net assets of 7Base (the accounting acquirer) were carried forward to the Company (the legal acquirer and the reporting entity) at their carrying value before the combination. The acquisition process utilizes the capital structure of the Company and the assets and liabilities of 7Base which are recorded at historical cost. The equity of the Company is the historical equity of 7Base retroactively restated to reflect the number of shares issued by the Company in the transaction.

On January 15, 2010, the Issuers name was changed with the State of Delaware from Sewell Ventures, Inc. to Truesport Alliances, Ltd., and on January 29, 2010, the Company changed its state of incorporation to the State of Nevada and restated the articles of incorporation changing the name to Truesport Alliances & Entertainment, Ltd.

On April 22, 2011, the Company and Seven Base Consulting, LLC entered into an Agreement and Plan of Reorganization whereby the Company divested all Seven Base Consulting, LLC business related assets, liabilities and rights to the operation of the Seven Base Consulting, LLC business to Seven Base Consulting, LLC in exchange for the return of 9,000,000 shares of Truesport Alliances & Entertainment, Ltd. Common stock held by Seven Base Consulting, LLC members. As a result of this transaction all the Company’s assets were transferred and the Company kept certain notes payable totaling approximately $359,000. Pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Subtopic 205-20, Discontinued Operations, our fiscal year 2010 financial statement amounts have been reclassified to reflect the impact of the discontinued operations of our 7Base business activities, which was the sole focus of the Company during 2010. Unless otherwise noted, the information provided within our MD&A reflects only the continued operations of our business.

On June 15, 2011, Excelsior Management, LLC, (“Seller”) as agent for the beneficial owners of a total of twenty million two hundred and eighty five thousand one hundred sixty seven (20,285,167) shares of common stock (the “Common Shares”), of Truesport Alliances & Entertainment, Ltd. (now known as ePunk, Inc.), (the “Company”), entered into a stock purchase agreement (the “Stock Purchase Agreement”) with Richard Jesse Gonzales, Justin Matthew Dornan, and Frank J. Drechsler (collectively referred to as the “Purchaser”) for the sale and purchase of the Common Shares. As a result of the execution of the Stock Purchase Agreement, the Seller sold, 65.75% of the issued and outstanding shares of common stock of the Company to the Purchaser in exchange for $23,451.97. Concurrently with the closing of the Stock Purchase Agreement, Scott Ence, resigned from his positions as the Company’s President, Chief Executive Officer, Treasurer, Secretary, and Chairman of the Board of Directors and Brent Stuchlik resigned from his position as a Director of the Company. On June 20, 2011 a majority of the shareholders of the Company approved the appointment of Richard Jesse Gonzales, Justin Matthew Dornan, and Frank J. Drechsler to the Board of Directors. In addition, at such time, Richard Jesse Gonzales was appointed the Company’s President and Chief Executive Officer, Justin Matthew Dornan as Treasurer, and Frank J. Drechsler as Secretary. None of the appointed directors or officers entered into an employment agreement with the Company, nor will any be compensated for their services as officers or directors of the Company.

On June 20, 2011, the board of directors and a majority of the shareholders of the Company approved the name change of the Company from TrueSport Alliance & Entertainment, Ltd. to ePunk, Inc. On June 20, 2011, the Company amended Article 1 of its Articles of Incorporation to change the Company’s name to ePunk, Inc.

On June 20, 2011, the shareholders and the board of directors of ePunk authorized a 100 for 1 reverse stock split. FINRA approved the reverse split on June 28, 2011 and declared the reverse split effective as of July 5, 2011.

On June 30, 2011, The board and majority of the shareholders of the Company approved the issuance of 24,750,000 shares of common stock (post reverse split) in exchange for 100% of the issued and outstanding capital stock of Punk Industries, Inc. causing Punk Industries, Inc. to become a wholly owned subsidiary of the Company. Punk Industries, Inc. was formed in February 2011 to develop off-road vehicle distribution. The Merger will be accounted for as a “reverse merger,” as the stockholders of Punk Industries, Inc. owned a majority of the outstanding shares of ePunk, Inc. common stock immediately following the Merger. Punk Industries, Inc. was deemed to be the acquirer in the reverse merger. Consequently, the assets and liabilities and the historical operations of Punk Industries prior to the Merger will be reflected in the financial statements at the historical cost basis of Punk Industries, Inc. Our consolidated financial statements after completion of the Merger will include the assets and liabilities of both ePunk, Inc. and Punk Industries, Inc., the historical operations of Punk Industries, Inc. and our ePunk, Inc. operations from the Effective Date of the Merger. We will account for the merger under recapitalization accounting whereby the equity of the acquiring enterprise (Punk Industries, Inc.) will be presented as the equity of the combined enterprise and the capital stock account of the acquiring enterprise is adjusted to reflect the par value of the outstanding stock of the legal acquirer (ePunk, Inc.) after giving effect to the number of shares issued in the business combination. Shares retained by the legal acquirer (ePunk, Inc.) are reflected as an issuance as of the reverse merger date (June 30, 2011) for the historical amount of the net assets of the acquired entity.

Our principal executive offices are located at 34105 Pacific Coast Highway, Dana Point, CA 92629, and our telephone number is (949) 429-7868

Employees

At September 30, 2010 we had 3 full-time employees. There are no collective bargaining contracts covering any of our employees. We believe our relationship with our employees is satisfactory.

ITEM 1A. RISK FACTORS.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

None.

ITEM 2. PROPERTIES.

Our principal executive offices are located at 34105 Pacific Coast Highway, Dana Point, CA 92629. We lease our office for $4,525 per month beginning on July 15, 2011 on a month-to-month basis.

We believe our facilities are currently suitable and adequate for our current needs.

ITEM 3. LEGAL PROCEEDINGS.

There are no pending legal proceedings to which the Company is a party or as to which any of its property is subject, and no such proceedings are known to the Company to be threatened or contemplated against it.

ITEM 4. (REMOVED AND RESERVED)

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Market Information

Our common stock has listed on the OTCBB since September 1, 2009 under the symbol “SEWE.OB.” Prior to that date, our common stock was not actively traded in the public market. As a result of the Merger with Seven Base Consulting, LLC in December 2009 and change in our name to Truesport Alliances & Entertainment, Ltd , our common stock has been listed on the OTCBB since approximately January 2010 under the symbol “TSAN.OB.” As a result of our name change to ePunk, Inc. In June 2011, our common stock has been listed on the OTCBB since June 2011 under the symbol “PUNK.PK.” Since there has been no active trading of our securities there is no high and low bid pricing.

If and when our common stock is traded, the price of our common stock will likely fluctuate. The stock market in general has experienced extreme stock price fluctuations in the past few years. In some cases, these fluctuations have been unrelated to the operating performance of the affected companies. Many companies have experienced dramatic volatility in the market prices of their common stock. We believe that a number of factors, both within and outside our control, could cause the price of our common stock to fluctuate, perhaps substantially. Factors such as the following could have a significant adverse impact on the market price of our common stock:

·	Our ability to obtain additional financing and, if available, the terms and conditions of the financing;

·	Our financial position and results of operations;

·	Concern as to, or other evidence of, the reliability and efficiency of our proposed products and services to our competitors’ products and services;

·	Announcements of innovations or new products or services by us or our competitors;

·	Federal and state governmental regulatory actions and the impact of such requirements on our business;

·	The development of litigation against us;

·	Period-to-period fluctuations in our operating results;

·	Changes in estimates of our performance by any securities analysts;

·	The issuance of new equity securities pursuant to a future offering or acquisition;

·	Changes in interest rates;

·	The issuance of new equity securities pursuant to a future offering or acquisition;

·	Changes in interest rates;

·	Competitive developments, including announcements by competitors of new products or services or significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments;

·	Investor perceptions of our Company; and

·	General economic and other national conditions.

Holders

As of September 30, 2010, we had 43 stockholders of record of 308,534 shares of our common stock. There are no shares held by broker-dealers. 76,176 shares are owned by our officers and directors, and may only be resold in compliance with Rule 144 of the Securities Act of 1933.

Dividends

We do not expect to declare or pay any cash dividends on our common stock in the foreseeable future, and we currently intend to retain future earnings, if any, to finance the expansion of our business. The decision whether to pay cash dividends on our common stock will be made by our board of directors, in their discretion, and will depend on our financial condition, operating results, capital requirements and other factors that the board of directors considers significant. We did not pay cash dividends in the years ended September 30, 2010 and 2009.

Transfer Agent

The transfer agent and registrar for our common stock is Empire Stock Transfer Co., Inc., of 2470 St. Rose Parkway, Henderson, NV 89074 is our stock transfer agent. They can be contacted by telephone at (702) 818-5898 and by facsimile at (702) 974-1444.

Equity Compensation Plans

On December 16, 2009, the Company adopted the 2009 Equity Incentive Plan (the “Plan”). The Plan provides that key employees, consultants and non-employee directors of the Company or an affiliate may be granted: (1) options to acquire shares of the Company’s common stock, (2) shares of restricted common stock (3) stock appreciation rights, (4) performance-based awards, (5) “Dividend Equivalents,” and (6) other stock-based awards (collectively, “Awards”).

The total number of shares of common stock that may be subject to Awards under the Plan will not exceed five million (5,000,000) shares. No stock or options were granted under the Plan through September 30, 2010.

Recent Sales of Unregistered Securities

On March 31, 2010, the Company issued 800,000 shares of common stock through a private placement memorandum at $0.25 per share for total proceeds of $200,000.

On April 1, 2010, the Company issued 100,000 shares of common stock through a private placement memorandum at $0.25 per share for total proceeds of $25,000.

On May 1, 2010, the Company issued 253,400 shares of common stock through a private placement memorandum at $0.30 per share for total proceeds of $76,020.

On June 30, 2010, the Company issued Scott Ence, CEO, 500,000 shares of common stock valued at $0.025 per share and used the issuance to repay certain liabilities owed to Mr. Ence.

All funds received from the sale of our shares were used for working capital purposes.

All shares bear a legend restricting their disposition.

The shares were issued in reliance upon an exemption from registration pursuant to Section 4(2) of the Securities Act or Rule 506 of Regulation D promulgated under the Securities Act. Each investor took his securities for investment purposes without a view to distribution and had access to information concerning us and our business prospects, as required by the Securities Act. In addition, there was no general solicitation or advertising for the purchase of our shares. Our securities were sold only to an accredited investor, as defined in the Securities Act with whom we had a direct personal preexisting relationship, and after a thorough discussion. Finally, our stock transfer agent has been instructed not to transfer any of such shares, unless such shares are registered for resale or there is an exemption with respect to their transfer.

Each purchaser was provided with access to our filings with the SEC, including the following:

·	Our annual report to stockholders for the most recent fiscal year, the definitive proxy statement filed in connection with that annual report, and, if requested by the purchaser in writing, a copy of our most recent Form 10-K under the Exchange Act.

·	The information contained in an annual report on Form 10-K under the Exchange Act.

·	The information contained in any reports or documents required to be filed under sections 13(a), 14(a), 14(c), and 15(d) of the Exchange Act since the distribution or filing of the reports specified above.

·	A brief description of the securities being offered, the use of the proceeds from the offering, and any material changes in San West’ affairs that are not disclosed in the documents furnished.

Additional Information

Copies of our annual reports, quarterly reports, current reports, and any amendments to those reports, are available free of charge on the internet at www.sec.gov. All statements made in any of our filings, including all forward-looking statements, are made as of the date of the document in which the statement is included, and we do not assume or undertake any obligation to update any of those statements or documents unless we are required to do so by law.

ITEM 6. SELECTED FINANCIAL DATA.

A registrant that qualifies as a smaller reporting company, as defined by §229.10(f)(1), is not required to provide the information required by this Item.

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

Forward-Looking Statements

The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes, and the other financial information included in this prospectus.

This prospectus contains forward-looking statements. The words “anticipated,” “believe,” “expect, “plan,” “intend,” “seek,” “estimate,” “project,” “could,” “may,” and similar expressions are intended to identify forward-looking statements. These statements include, among others, information regarding future operations, future capital expenditures, and future net cash flow. Such statements reflect our management’s current views with respect to future events and financial performance and involve risks and uncertainties, including, without limitation, general economic and business conditions, changes in foreign, political, social, and economic conditions, regulatory initiatives and compliance with governmental regulations, the ability to achieve further market penetration and additional customers, and various other matters, many of which are beyond our control. Should one or more of these risks or uncertainties occur, or should underlying assumptions prove to be incorrect, actual results may vary materially and adversely from those anticipated, believed, estimated or otherwise indicated. Consequently, all of the forward-looking statements made in this prospectus are qualified by these cautionary statements and there can be no assurance of the actual results or developments.

The following discussion and analysis of the results of operations and financial condition of the Company for the years ended September 30, 2010 and 2009 and should be read in conjunction with our financial statements, and the notes to those financial statements that are included elsewhere in this Prospectus. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors. We use words such as “anticipate,” “estimate,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expression to identify forward-looking statements.

Recent Events

On June 15, 2011, Excelsior Management, LLC, (“Seller”) as agent for the beneficial owners of a total of twenty million two hundred and eighty five thousand one hundred sixty seven (20,285,167) shares of common stock (the “Common Shares”), of Truesport Alliances & Entertainment, Ltd. (now known as ePunk, Inc.), (the “Company”), entered into a stock purchase agreement (the “Stock Purchase Agreement”) with Richard Jesse Gonzales, Justin Matthew Dornan, and Frank J. Drechsler (collectively referred to as the “Purchaser”) for the sale and purchase of the Common Shares. As a result of the execution of the Stock Purchase Agreement, the Seller sold, 65.75% of the issued and outstanding shares of common stock of the Company to the Purchaser in exchange for $23,451.97. Concurrently with the closing of the Stock Purchase Agreement, Scott Ence, resigned from his positions as the Company’s President, Chief Executive Officer, Treasurer, Secretary, and Chairman of the Board of Directors and Brent Stuchlik resigned from his position as a Director of the Company. On June 20, 2011 a majority of the shareholders of the Company approved the appointment of Richard Jesse Gonzales, Justin Matthew Dornan, and Frank J. Drechsler to the Board of Directors. In addition, at such time, Richard Jesse Gonsales was appointed the Company’s President and Chief Executive Officer, Justin Matthew Dornan as Treasurer, and Frank J. Drechsler as Secretary. None of the appointed directors or officers entered into an employment agreement with the Company, nor will any be compensated for their services as officers or directors of the Company.

Critical Accounting Policies

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires us to make judgments, assumptions and estimates that affect the amounts reported. Note A of Notes to Financial Statements describes the significant accounting policies used in the preparation of the financial statements. Certain of these significant accounting policies are considered to be critical accounting policies, as defined below.

A critical accounting policy is defined as one that is both material to the presentation of our financial statements and requires management to make difficult, subjective or complex judgments that could have a material effect on our financial condition and results of operations. Specifically, critical accounting estimates have the following attributes:

	·	We are required to make assumptions about matters that are highly uncertain at the time of the estimate; and
	·	Different estimates we could reasonably have used, or changes in the estimate that are reasonably likely to occur, would have a material effect on our financial condition or results of operations.

Estimates and assumptions about future events and their effects cannot be determined with certainty. We base our estimates on historical experience and on various other assumptions believed to be applicable and reasonable under the circumstances. These estimates may change as new events occur, as additional information is obtained and as our operating environment changes. These changes have historically been minor and have been included in the consolidated financial statements as soon as they became known. Based on a critical assessment of our accounting policies and the underlying judgments and uncertainties affecting the application of those policies, management believes that our financial statements are fairly stated in accordance with accounting principles generally accepted in the United States, and present a meaningful presentation of our financial condition and results of operations.

In preparing our financial statements to conform to accounting principles generally accepted in the United States, we make estimates and assumptions that affect the amounts reported in our financial statements and accompanying notes. These estimates include useful lives for fixed assets for depreciation calculations and assumptions for valuing options and warrants. Actual results could differ from these estimates.

Revenue Recognition

The Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is realized or realizable and earned less estimated future doubtful accounts. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.

Stock-Based Compensation

The Company accounts for all compensation related to stock, options and warrants using a fair value based method whereby compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. When issued, we use the Black-Scholes pricing model to calculate the fair value of options and warrants issued to both employees and non-employees.

In calculating this fair value, there are certain assumptions that we use consisting of:

The expected life of the option. No incentive stock options have been granted to date. In the event the Company issues employee options, we will base our determination of expected life on the guidance in ASC 718-10-55-29 to 34. The Company utilizes the contract term of each non qualified option except in the event that the option is not transferrable in which case we apply the aforementioned guidance in determining the expected term.

2)	Risk-free interest rate. We use the treasury bill rate that most closely aligns with the duration of the derivative.

3)	Dividend yield. Until a dividend is offered this input will always be zero.

4)	Volatility. We use the Dow Jones Internet Composite Index (Ticker: FDN) from inception of the index to the date of grant.

5)	Forfeiture rate. To date this rate has been zero.

6)	Stock price (see discussion below).

The use of a different estimate for any one of these components could have a material impact on the amount of calculated compensation expense.

We may periodically issue common stock as compensation. Pursuant to ASC 505-50-30-6 issuances are valued using the market price of the stock or value of the services rendered on the date of the related agreement, whichever is more readily determinable. To date, common stock granted and issued for services has been issued free of obligation to the recipient and for no consideration. The shares are valued at the price non-employees are willing to accept as payment in lieu of cash, which, historically, has been the price per share of recent sales of unregistered securities or value of debt converted to common stock.

Long-lived Assets

Long-lived assets, comprised of equipment, and identifiable intangible assets, are evaluated for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors that may cause an impairment review include significant changes in technology that make current computer-related assets that we use in our operations obsolete or less useful and significant changes in the way we use these assets in our operations. When evaluating long-lived assets for potential impairment, we first compare the carrying value of the asset to the asset’s estimated future cash flows (undiscounted and without interest charges). If the estimated future cash flows are less than the carrying value of the asset, we calculate an impairment loss. The impairment loss calculation compares the carrying value of the asset to the asset’s estimated fair value, which may be based on estimated future cash flows (discounted and with interest charges). We recognize an impairment loss if the amount of the asset’s carrying value exceeds the asset’s estimated fair value. If we recognize an impairment loss, the adjusted carrying amount of the asset becomes its new cost basis. The new cost basis will be depreciated (amortized) over the remaining useful life of that asset. Using the impairment evaluation methodology described herein, there have been no long-lived asset impairment charges for each of the last two years.

Our impairment loss calculations contain uncertainties because they require management to make assumptions and to apply judgment to estimate future cash flows and asset fair values, including forecasting useful lives of the assets and selecting the discount rate that reflects the risk inherent in future cash flows.

We have not made any material changes in our impairment loss assessment methodology during the past two fiscal years. We do not believe there is a reasonable likelihood that there will be a material change in the estimates or assumptions we use to calculate long-lived asset impairment losses. However, if actual results are not consistent with our estimates and assumptions used in estimating future cash flows and asset fair values, we may be exposed to losses that could be material.

Income Taxes

Provisions for income taxes are based on taxes payable or refundable for the current period and deferred taxes on temporary differences between the amount of taxable income and pretax financial income and between the tax bases of assets and liabilities and their reported amounts in the financial statements. Deferred tax assets and liabilities are included in the financial statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled.

When accounting for Uncertainty in Income Taxes, first, the tax position is evaluated to determine the likelihood that it will be sustained upon external examination. If the tax position is deemed “more-likely-than-not” to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50 percent likelihood of being realized upon ultimate settlement. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company underwent a change of control for income tax purposes on October 8, 2003 according to Section 381 of the Internal Revenue Code. The Company’s utilization of U.S. Federal net operating losses will be limited in accordance to Section 381 rules. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

RESULTS OF OPERATIONS

Results of Operations

Year Ended September 30, 2010 Compared With the Year Ended September 30, 2009

As of April 22, 2011, the operations of the Company were discontinued pursuant to the Agreement and Plan of Reorganization. As such, all operations for 2009 and a majority of the operations for 2010 were adjusted and are reflected as discontinued operations. The adjustment of all 2009 operations to “discontinued operations” is due to the method of accounting employed as a result of the reverse merger with Seven Base Consulting, LLC on December 16, 2009 whereby the historical operations of Seven Base Consulting, LLC are reflected as the historical operations of the merged company. Since the business of Seven Base Consulting, LLC was discontinued, so was the entirety of their operations during the year ended September 30, 2009. The discussion below reflects the discontinued operations as if they occurred from October 1, 2008.

Revenues

None.

Operating Expenses

Total operating expenses for the year ended September 30, 2009 were approximately $20,877 compared to $0 for the year ended September 30, 2009. The $20,877 represents the non Seven Base Consulting, LLC expenses incurred by the Company during 2010.

Other Income and Expense

Total other income and expense was expense of $157,050 for the year ended September 30, 2010 compared to $0 of expense for the year ended September 30, 2009. The $157,050 represents $149,354 of beneficial conversion being amortized and $7,696 of interest expense on related party convertible notes payable that remained on the books of the Company and did not transfer to Seven Base Consulting, LLC pursuant to the April 22, 2011 Agreement and Plan of Reorganization.

Loss from Continuing Operations

Our loss from continuing operations was $177,927 for the year ended September 30, 2010, compared to a loss from continuing operations of $0 for the year ended September 30, 2009.

Loss from Discontinued Operations

Our loss from discontinued operations was $875,265 for the year ended September 30, 2010, compared to a loss from discontinued operations of $374,299 for the year ended September 30, 2009. The $500,966 increase in the loss from discontinued operations is the result of increased business activities after the merger between Seven Base Consulting, LLC and Sewell Ventures, Inc. (now ePunk, Inc.) on December 16, 2009.

Net Loss

As a result of the foregoing, our net loss was $1,053,192 for the year ended September 30, 2010, compared to a net loss of $374,299 for the year ended September 30, 2009.

Liquidity and Capital Resources

The Company had cash of $0 from continuing operations and $2,815 from discontinued operations and current assets of $909,954 as of September 30, 2010. On the same date, current liabilities totaled $1,463,696.

Since inception, the Company has expended substantial resources on formulating and developing its business plan. Consequently, we have sustained substantial losses. The Company has an accumulated deficit of $1,427,491 at September 30, 2010.

Net cash used by operating activities was $334,499 for the year ended September 30, 2010 as compared to $94,978 for the year ended September 30, 2009.

Net cash used by investing activities was $434,578 for the year ended September 30, 2010 as compared to cash used of $315,467 for the year ended September 30, 2009.

Net cash provided by financing activities was $767,268 for the year ended September 30, 2010 as compared to $415,069 for the year ended September 30, 2009.

Off-Balance Sheet Arrangements

We have no off-balance sheet transactions.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Impact of Inflation

General inflation in the economy has driven the operating expenses of many businesses higher, and, accordingly we have experienced increased salaries and higher prices for supplies, goods and services. We continuously seek methods of reducing costs and streamlining operations while maximizing efficiency through improved internal operating procedures and controls. While we are subject to inflation as described above, our management believes that inflation currently does not have a material effect on our operating results. However, inflation may become a factor in the future.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Index to Consolidated Financial Statements

	Page

Report of Independent Registered Public Accountant	14

Unaudited Consolidated Balance Sheets as of September 30, 2010 and 2009	15

Unaudited Consolidated Statements of Operations for the Years Ended September 30, 2010 and 2009	16

Unaudited Consolidated Statements of Stockholders Equity for the Years Ended September 30, 2010 and 2009	17

Unaudited Consolidated Statements of Cash Flows for the Years Ended September 30, 2010 and 2009	18

Notes to Financial Statements	19-31

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The unaudited financial statements and accompanying notes have not been audited by an independent public accountant as required by Regulation S-X because of the inability of current management to gain the cooperation of former management who holds the prior Company’s records.

ePunk, Inc.
(formerly Truesport Alliances & Entertainment, Ltd.)
(formerly Sewell Ventures, Inc.)
Unaudited Consolidated Balance Sheets

	September 30,
	2010			2009
ASSETS
Current assets:
Cash	$	-		$	-
Assets of discontinued operations (Note B)		909,954			383,314
Total current assets		909,954			383,314

Total assets	$	909,954		$	383,314

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Related party convertible notes payable - current (Note C)		167,037			-
Liabilities of discontinued operations (Note B)		1,296,659			640,738
Total current liabilities		1,463,696			640,738
Related party convertible notes payable (Note C)		180,500			-
Total liabilities		1,644,196			640,738

Commitments and contingencies

Stockholders' deficit (Note D):
Preferred stock, $0.0001 par value; 25,000,000 authorized; none issued and outstanding		-			-
Common stock, $0.0001 par value; 100,000,000 shares authorized; issued and outstanding 308,534 and 200,000 at September 30, 2010 and 2009, respectively.		31			20
Additional paid-in capital		693,218			117,855
Stock subscription receivable		-			(1,000	)
Accumulated deficit		(1,427,491	)		(374,299	)
Total stockholders' deficit		(734,242	)		(257,424	)
Total liabilities and stockholder's deficit	$	909,954		$	383,314

The accompanying notes are an integral part of these financial statements

ePunk, Inc.
(formerly Truesport Alliances & Entertainment, Ltd.)
(formerly Sewell Ventures, Inc.)
Unaudited Consolidated Statements of Operations
For the Years Ended September 30, 2010 and 2011

	Year Ended
	September 30,
	2010			2009
Net sales	$	-		$	-
Cost of sales		-			-
Gross margin		-			-

Operating expenses
General and administrative		20,877			-

		20,877			-
Operating (loss)		(20,877	)		-
Non-operating (expense) income:
Amortization of beneficial conversion feature		(149,354	)		-
Interest expense		(7,696	)		-
		(157,050	)		-
Loss from continuing operations before income taxes		(177,927	)		-
Income tax provision (benefit)		-			-
Loss from continuing operations		(177,927	)		-
Loss from discontinued operations		(875,265	)		(374,299	)
Net Loss	$	(1,053,192	)	$	(374,299	)

Net income (loss) per common share:
Basic:
Income (loss) from continuing operations	$	(0.64	)	$	-
Income (loss) from discontinued operations		(3.13	)		(2.03	)
Net income (loss) per share	$	(3.77	)	$	(2.03	)

Weighted average common shares outstanding basic		279,417			184,464

The accompanying notes are an integral part of these financial statements

ePunk, Inc.
(formerly Truesport Alliances & Entertainment, Ltd.)
(formerly Sewell Ventures, Inc.)
Unaudited Consolidated Statement of Stockholder's Equity
For the Years Ended September 30, 2010 and 2009

					Additional			Stock						Total
	Common stock				paid-in			Subscriptions			Accumulated			Stockholders'
	Shares		Amount		Capital			Receivable			Deficit			Deficit
Balance at inception, October 17, 2008		-	$	-	$	-		$	-		$	-		$	-

Stock issued to founders		131,494		13		91,395			(657	)		-			90,751
Stock issued for cash and equipment		68,506		7		26,460			(343	)		-			26,124
Net loss		-		-		-			-			(374,299	)		(374,299	)
Balance, September 30, 2009		200,000		20		117,855			(1,000	)		(374,299	)		(257,424	)

Stock issued for acquisition		92,000		9		(9	)		-			-			-
Stock issued through private
placement memorandum		11,534		1		301,019			-			-			301,020
Stock issued for liabilities		2,975		1		74,370			-			-			74,371
Stock issued for services		2,025		-		50,629									50,629
Payment of stock subscription
receivable		-		-		-			1,000			-			1,000
Debt discount resulting from
beneficial conversion feature
of convertible notes payable		-		-		149,354			-			-			149,354
Net loss		-		-		-			-			(1,053,192	)		(1,053,192	)
Balance, September 30, 2010		308,534	$	31	$	693,218		$	-		$	(1,427,491	)	$	(734,242	)

The accompanying notes are an integral part of these financial statements

ePunk, Inc.
(formerly Truesport Alliances & Entertainment, Ltd.)
(formerly Sewell Ventures, Inc.)
Unaudited Consolidated Statements of Cash Flows
For the Years Ended September 30, 2010 and 2011

	Year Ended
	September 30,
	2010			2009
Cash flows from operating activities:
Net loss from continuing operations	$	(177,927	)	$	-
Income (loss) from discontinued operations		(875,265	)		(374,299	)
Income (loss) from continuing operations		(1,053,192	)		(374,299	)
Reconciliation to net cash provided by (used in)
continuing operations:
Interest expense due to amortization of debt discount		149,354			-
Changes in certain assets and liabilities:		-			-
Net cash provided (used) by operating activities of continuing operations		(28,573	)		-
Net cash provided (used) by operating activities of discontinued operations		(305,926	)		(94,978	)
Net cash provided (used) by operating activities		(334,499	)		(94,978	)
Cash flows from investing activities:
Capital expenditures, net		-			-

Net cash provided (used) by investing activities of continuing operations		-			-
Net cash provided (used) by investing activities of discontinuing operations		(434,578	)		(315,467	)
Net cash provided (used) by investing activities		(434,578	)		(315,467	)
Net cash provided by financing activities:
Proceeds from the issuance of common stock		301,020			-
Borrowings on convertible notes payable - related parties		347,537			-
Proceeds from repayment of stock subscription receivable		1,000			-
Net cash provided (used) by financing activities from continuing operations		649,557			-
Net cash provided (used) by financing activities from discontinued operations		117,711			415,069
Net cash provided (used) by financing activities		767,268			415,069
Net increase in cash		(1,809	)		4,624
Cash - beginning of period		-			-
Cash of discontinued operations - beginning of period		4,624			-
Less cash of discontinued operations - end of period		(2,815	)		(4,624	)
Cash - end of period	$	-		$	-

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
CASH PAID DURING THE YEAR FOR:
Income taxes	$	-		$	-
Interest	$	-		$	-

The accompanying notes are an integral part of these financial statements

ePunk, Inc.

(Formerly Truesport Alliances and Entertainment, Ltd.)

(Formerly Sewell Ventures, Inc.)

Unaudited Notes to Financial Statements

For the Years Ended September 30, 2010 and 2009

Note A-Organization and Summary Of Significant Accounting Policies

Organization

ePunk, Inc.

(Formerly Truesport Alliances and Entertainment, Ltd.)

(Formerly Sewell Ventures, Inc.)

Notes to Financial Statements

For the Years Ended September 30, 2010 and 2009

Note A-Organization and Summary Of Significant Accounting Policies (Continued)

Organization (Continued)

On June 15, 2011, Excelsior Management, LLC, (“Seller”) as agent for the beneficial owners of a total of twenty million two hundred and eighty five thousand one hundred sixty seven (20,285,167) shares of common stock (the “Common Shares”), of Truesport Alliances & Entertainment, Ltd. (now known as ePunk, Inc.), (the “Company”), entered into a stock purchase agreement (the “Stock Purchase Agreement”) with Richard Jesse Gonzales, Justin Matthew Dornan, and Frank J. Drechsler (collectively referred to as the “Purchaser”) for the sale and purchase of the Common Shares. As a result of the execution of the Stock Purchase Agreement, the Seller sold, 65.75% of the issued and outstanding shares of common stock of the Company to the Purchaser in exchange for $23,451.97. Concurrently with the closing of the Stock Purchase Agreement, Scott Ence, resigned from his positions as the Company’s President, Chief Executive Officer, Treasurer, Secretary, and Chairman of the Board of Directors and Brent Stuchlik resigned from his position as a Director of the Company. On June 20, 2011 a majority of the shareholders of the Company approved the appointment of Richard Jesse Gonzales, Justin Matthew Dornan, and Frank J. Drechsler to the Board of Directors. In addition, at such time, Richard Jesse Gonsales was appointed the Company’s President and Chief Executive Officer, Justin Matthew Dornan as Treasurer, and Frank J. Drechsler as Secretary. None of the appointed directors or officers entered into an employment agreement with the Company, nor will any be compensated for their services as officers or directors of the Company.

ePunk, Inc.

(Formerly Truesport Alliances and Entertainment, Ltd.)

(Formerly Sewell Ventures, Inc.)

Notes to Financial Statements

For the Years Ended September 30, 2010 and 2009

Note A-Organization and Summary Of Significant Accounting Policies (Continued)

Going Concern

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America, which contemplate continuation of the Company as a going concern. In the course of funding development activities and sales initiatives, the Company has sustained operating losses and has an accumulated deficit of $1,427,491 and $374,299 at September 30, 2010 and 2009, respectively. In addition, the Company has negative working capital of $553,742 and $257,424 at September 30, 2010 and 2009, respectively.

The Company has and will continue to use significant capital to commercialize its products. These factors raise substantial doubt about the ability of the Company to continue as a going concern. In this regard, management is proposing to raise any necessary additional funds not provided by operations through loans or through additional sales of their common stock. There is no assurance that the Company will be successful in raising this additional capital or in achieving profitable operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from this uncertainty.

Accounting estimates

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

Cash and cash equivalents

For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents may at times exceed federally insured limits. To minimize this risk, the Company places its cash and cash equivalents with high credit quality institutions.

Accounts Receivable

Accounts receivable are reported at the customers' outstanding balances. The Company does not have a history of significant bad debt and has not recorded any allowance for doubtful accounts. Interest is not accrued on overdue accounts receivable. The Company evaluates receivables on a regular basis for potential reserve.

Fixed assets

Fixed assets are stated at cost. Major renewals and improvements are charged to the asset accounts while replacements, maintenance and repairs, which do not improve or extend the lives of the respective assets, are expensed. At the time fixed assets are retired or otherwise disposed of, the asset and related accumulated depreciation accounts are relieved of the applicable amounts. Gains or losses from retirements or sales are credited or charged to income.

Depreciation of fixed assets is provided on the straight-line method over the estimated useful lives of the assets. The estimated useful lives used are 3 years for computer equipment, office equipment and software. Accelerated methods of depreciation of fixed assets are used for income tax purposes.

Revenue recognition policy

Revenue for our services is recognized when all of the following criteria are satisfied: (i) persuasive evidence of an arrangement exists; (ii) the price is fixed or determinable; (iii) collectibility is reasonably assured; and (iv) services have been performed.

Deferred Revenue: Revenue is deferred for any undelivered elements and is recognized upon product delivery or when the service has been performed.

ePunk, Inc.

(Formerly Truesport Alliances and Entertainment, Ltd.)

(Formerly Sewell Ventures, Inc.)

Notes to Financial Statements

For the Years Ended September 30, 2010 and 2009

Note A-Organization and Summary Of Significant Accounting Policies (Continued)

Sales and marketing costs

Sales and marketing expenses include advertising expenses, seminar expenses, commissions and personnel expenses for sales and marketing. Marketing and advertising costs to promote the Company's products and services are expensed in the period incurred.

Fair Value of Financial Instruments

The Company’s financial instruments include cash and accounts receivable. The carrying amount of these financial instruments has been estimated by management to approximate fair value.

“Disclosures about Fair Value of Financial Instruments,” requires disclosures of information regarding the fair value of certain financial instruments for which it is practicable to estimate the value. For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale of liquidation.

The company accounts for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

Level 1—inputs are based upon unadjusted quoted prices for identical instruments traded in active markets. We have no Level 1 instruments as of September 30, 2010.

Level 2—inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. the Black-Scholes model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, foreign exchange rates, and forward and spot prices for currencies and commodities. We have no Level 2 instruments as of September 30, 2010.

Level 3—inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. We have no Level 3 instruments as of September 30, 2010.

Research and Development

Expenses related to present and future products are expensed as incurred.

Earnings (Loss) per common share

The Company reports both basic and diluted earnings (loss) per share. Basic loss per share is calculated using the weighted average number of common shares outstanding in the period. Diluted loss per share includes potentially dilutive securities such as outstanding options and warrants, using the “treasury stock” method and convertible securities using the “if-converted” method.

Impairment of Long-Lived Assets

Accounting for the Impairment or Disposal of Long-Lived Assets requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the historical cost-carrying value of an asset may not be recovered. The Company assesses recoverability of the carrying value of an asset by estimating the fair value of the asset. If the fair value is less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset's carrying value and fair value. The Company has never recognized an impairment charge.

ePunk, Inc.

(Formerly Truesport Alliances and Entertainment, Ltd.)

(Formerly Sewell Ventures, Inc.)

Notes to Financial Statements

For the Years Ended September 30, 2010 and 2009

Note A-Organization and Summary Of Significant Accounting Policies (Continued)

Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on differences between financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

The Company records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. A valuation allowance is established against deferred tax assets that do not meet the criteria for recognition. In the event the Company were to determine that it would be able to realize deferred income tax assets in the future in excess of their net recorded amount, we would make an adjustment to the valuation allowance which would reduce the provision for income taxes.

The Company follows the accounting guidance which provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax provisions must meet a more-likely-than-not recognition threshold at the effective date to be recognized initially and in subsequent periods. Also included is guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

Stock-Based Compensation

The Company accounts for all compensation related to stock, options or warrants using a fair value based method whereby compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. We use the Black-Scholes pricing model to calculate the fair value of options and warrants issued to both employees and non-employees. In calculating this fair value, there are certain assumptions that we use consisting of the expected life of the option, risk-free interest rate, dividend yield, volatility and forfeiture rate. The use of a different estimate for any one of these components could have a material impact on the amount of calculated compensation expense.

We periodically issue common stock as compensation. Pursuant to ASC 505-50-30-6 issuances are valued using the market price of the stock or value of the services rendered on the date of the related agreement, whichever is more readily determinable. To date, common stock granted and issued for services has been issued free of obligation to the recipient and for no consideration. The shares are valued at the price non-employees are willing to accept as payment in lieu of cash, which, historically, has been the price per share of recent sales of unregistered securities or value of debt converted to common stock.

Recent Accounting Pronouncements

On July 1, 2009, the FASB officially launched the FASB ASC 105 - Generally Accepted Accounting Principles, which established the FASB Accounting Standards Codification (“the Codification”), as the single official source of authoritative, nongovernmental, U.S. GAAP, in addition to guidance issued by the Securities and Exchange Commission. The Codification is designed to simplify U.S. GAAP into a single, topically ordered structure. All guidance contained in the Codification carries an equal level of authority. The Codification is effective for interim and annual periods ending after September 15, 2009. Accordingly, the Company refers to the Codification in respect of the appropriate accounting standards throughout this document as “FASB ASC”. Implementation of the Codification did not have any impact on the Company’s consolidated financial statements.

ePunk, Inc.

(Formerly Truesport Alliances and Entertainment, Ltd.)

(Formerly Sewell Ventures, Inc.)

Notes to Financial Statements

For the Years Ended September 30, 2010 and 2009

Note A-Organization and Summary Of Significant Accounting Policies (Continued)

Recent Accounting Pronouncements (Continued)

On June 30, 2009, the FASB issued Accounting Standard Update (ASU) No. 2009-01 (Topic 105) – Generally Accepted Accounting Principles – amendments based on – Statement of Financial Accounting Standards No. 168 –The FASB Accounting and Standards Codification and the Hierarchy of Generally Accepted Accounting Principles. Beginning with this Statement the FASB will no longer issue new standards in the form of Statements, FASB Staff Positions, or Emerging Issues Task Force Abstracts. Instead, it will issue Accounting Standard Updates. This ASU includes FASB Statement No. 168 in its entirety. While ASU’s will not be considered authoritative in their own right, they will serve to update the Codification, provide the bases for conclusions and changes in the Codification, and provide background information about the guidance. The Codification modifies the GAAP hierarchy to include only two levels of GAAP: authoritative and nonauthoritative. ASU No. 2009-01 is effective for financial statements issued for the interim and annual periods ending after September 15, 2009. The Company adopted this statement no significant financial impact.

In August 2009, the FASB issued ASU No. 2009-05 – Fair Value Measurements and Disclosures (Topic 820) – Measuring Liabilities at Fair Value. This ASU clarifies the fair market value measurement of liabilities. In circumstances where a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using one or more of the following techniques: a technique that uses quoted price of the identical or a similar liability or liabilities when traded as an asset or assets, or another valuation technique that is consistent with the principles of Topic 820 such as an income or market approach. ASU No. 2009-05 was effective upon issuance and it did not result in any significant financial impact on the Company upon adoption.

In September 2009, the FASB issued ASU No. 2009-12 – Fair Value Measurements and Disclosures (Topic 820) – Investments in Certain Entities That Calculate Net Asset Value per Share (or its equivalent). This ASU permits use of a practical expedient, with appropriate disclosures, when measuring the fair value of an alternative investment that does not have a readily determinable fair value. ASU No. 2009-12 is effective for interim and annual periods ending after December 15, 2009, with early application permitted. Since the Company does not currently have any such investments, this statement had no impact on its financial statements.

In February 2010, the FASB issued ASU No. 2010-09, “Subsequent Events (Topic 855); Amendments to Certain Recognition and Disclosure Requirements.” This Statement addresses accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or available to be issued. FASB ASC 855 requires disclosure of the date through which an entity has evaluated subsequent events and the basis for that date, the date issued or date available to be issued. The Company adopted this Statement in the second quarter of 2009. As a result the date through which the Company has evaluated subsequent events and the basis for that date have been disclosed in Note K, Subsequent Events.

In April 2009, the FASB issued an update to FASB ASC 820, “Fair Value Measurements and Disclosures,” related to providing guidance on when the volume and level of activity for the asset or liability have significantly decreased and identifying transactions that are not orderly. The update clarifies the methodology to be used to determine fair value when there is no active market or where the price inputs being used represent distressed sales. The update also reaffirms the objective of fair value measurement, as stated in FASB ASC 820, which is to reflect how much an asset would be sold in and orderly transaction, and the need to use judgment to determine if a formerly active market has become inactive, as well as to determine fair values when markets have become inactive. The Company adopted this Statement in the third quarter of 2009 without significant financial impact.

In April 2009, the FASB ASC 320, “Investments – Debt and Equity,” amends current other-than-temporary guidance for debt securities through increased consistency in the timing of impairment recognition and enhanced disclosures related to credit and noncredit components impaired debt securities that are not expected to be sold. Also, the Statement increases disclosures for both debt and equity securities regarding expected cash flows, securities with unrealized losses, and credit losses. The Company adopted this Statement in the third quarter of 2009 without significant impact to our financial statements.

ePunk, Inc.

(Formerly Truesport Alliances and Entertainment, Ltd.)

(Formerly Sewell Ventures, Inc.)

Notes to Financial Statements

For the Years Ended September 30, 2010 and 2009

Note A-Organization and Summary Of Significant Accounting Policies (Continued)

Recent Accounting Pronouncements (Continued)

In April 2009, the FASB issued an update to FASB ASC 825, “Financial Instruments,” to require interim disclosures about the fair value of financial instruments.” This update enhances consistency in financial reporting by increasing the frequency of fair value disclosures of those assets and liabilities falling within the scope of FASB ASC 825. The Company adopted this update in the third quarter of 2009 without significant impact to the financial statements.

In April 2009, the FASB issued an update to FASB ASC 805, “Business Combinations,” that clarifies and amends FASB ASC 805, as it applies to all assets acquired and liabilities assumed in a business combination that arise from contingencies. This update addresses initial recognition and measurement issues, subsequent measurement and accounting, and disclosures regarding these assets and liabilities arising from contingencies in a business combination. The Company adopted this Statement in the third quarter of 2009 without significant impact to the financial statements.

In November 2008, EITF issued new guidance under FASB ASC 350, “Intangibles – Goodwill and Other on accounting for defensive intangible assets.” The new guidance applies to all acquired intangible assets in which the acquirer does not intend to actively use the asset but intends to hold (lock up) the asset to prevent its competitors from obtaining or using the asset (a defensive asset). This guidance was adopted by the Company in January 2009 without impact to the financial statements.

NOTE B – DISCONTINUED OPERATIONS

On April 22, 2011, the Company and Seven Base Consulting, LLC entered into an Agreement and Plan of Reorganization whereby the Company divested all Seven Base Consulting, LLC business related assets, liabilities and rights to the operation of the Seven Base Consulting, LLC business to Seven Base Consulting, LLC in exchange for the return of 9,000,000 shares of Truesport Alliances & Entertainment, Ltd. Common stock held by Seven Base Consulting, LLC members. As a result of this transaction all the Company’s assets were transferred and the Company kept certain notes payable totaling approximately $359,000 as of the date above. Pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Subtopic 205-20, Discontinued Operations, our fiscal year 2010 financial statement amounts have been adjusted to reflect the impact of the discontinued operations of our 7Base business activities, which was the sole focus of the Company during 2010.

ePunk, Inc.

(Formerly Truesport Alliances and Entertainment, Ltd.)

(Formerly Sewell Ventures, Inc.)

Notes to Financial Statements

For the Years Ended September 30, 2010 and 2009

NOTE B – DISCONTINUED OPERATIONS (Continued)

ePunk, Inc.
(formerly Truesport Alliances & Entertainment, Ltd.)
(formerly Sewell Ventures, Inc.)
Balance Sheets
	2010									2009
	September 30,									September 30,
	2010			Adjustments			Total			2009			Adjustments			Total
ASSETS
Current assets:
Cash	$	2,815		$	(2,815	)	$	-		$	4,624		$	(4,624	)	$	-
Accounts receivable		66,855			(66,855	)		-			26,102			(26,102	)		-
Related party advances		-			-			-			10,882			(10,882	)		-
Inventory		72,861			(72,861	)		-			12,500			(12,500	)		-
Other current assets		1,317			(1,317	)		-			2,525			(2,525	)		-
Assets of discontinued operations		-			909,954			909,954			-			383,314			383,314

Total current assets		143,848			766,106			909,954			56,633			326,681			383,314
Related party notes receivable		576,698			(576,698	)		-			207,555			(207,555	)		-
Property, plant and equipment:
MMA gym buildouts		103,021			(103,021	)		-			90,877			(90,877	)		-
Furniture and equipment		21,144			(21,144	)		-			20,260			(20,260	)		-
Leasehold improvements		22,875			(22,875	)		-			5,525			(5,525	)		-
Computers and equipment		18,507			(18,507	)		-			7,250			(7,250	)		-
Construction in progress		23,800			(23,800	)		-			-			-			-

		189,347			(189,347	)		-			123,912			(123,912	)		-
Less accumulated depreciation		(26,300	)		26,300			-			(4,786	)		4,786			-
		163,047			(163,047	)		-			119,126			(119,126	)		-
Deferred royalty expenses		26,361			(26,361	)		-			-			-			-
Total assets	$	909,954		$	-		$	909,954		$	383,314		$	-		$	383,314

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable	$	292,840		$	(292,840	)	$	-		$	60,749		$	(60,749	)	$	-
Deferred revenue		243,895			(243,895	)		-			19,754			(19,754	)		-
Accrued compensation		32,817			(32,817	)		-			49,440			(49,440	)		-
Accrued compensation - related party		94,118			(94,118	)		-			105,850			(105,850	)		-
Notes payable		22,109			(22,109	)		-			-			-			-
Related party convertible notes payable - current		201,624			(34,587	)		167,037			-			-			-
Other current liabilities		57,611			(57,611	)		-			-			-			-
Liabilities of discontinued operations					1,296,659			1,296,659			-			640,738			640,738

Total current liabilities		945,014			518,682			1,463,696			235,793			404,945			640,738
Notes payable to stockholders		392,960			(392,960	)		-			362,945			(362,945	)		-
Related party convertible notes payable		180,500			-			180,500			-			-			-
Deferred royalty revenue		52,722			(52,722	)		-			-			-			-
Related party notes payable		73,000			(73,000	)		-			42,000			(42,000	)		-
Total liabilities		1,644,196			-			1,644,196			640,738			-			640,738

Commitments and contingencies

Stockholders' deficit
Preferred stock		-			-			-						-			-
Common stock		31			-			31			20			-			20
Additional paid-in capital		693,218			-			693,218			117,855			-			117,855
Stock subscription receivable		-			-			-			(1,000	)		-			(1,000	)
Accumulated deficit		(1,427,491	)		-			(1,427,491	)		(374,299	)		-			(374,299	)
Total stockholders' deficit		(734,242	)		-			(734,242	)		(257,424	)		-			(257,424	)
Total liabilities and stockholder's deficit	$	909,954		$	-		$	909,954		$	383,314		$	-		$	383,314

The accompanying notes are an integral part of these financial statements

ePunk, Inc.

(Formerly Truesport Alliances and Entertainment, Ltd.)

(Formerly Sewell Ventures, Inc.)

Notes to Financial Statements

For the Years Ended September 30, 2010 and 2009

NOTE B – DISCONTINUED OPERATIONS (Continued)

ePunk, Inc.
(formerly Truesport Alliances & Entertainment, Ltd.)
(formerly Sewell Ventures, Inc.)
Statements of Operations
For the Years Ended September 30, 2010 and 2011
	2010									2009
	September 30,									September 30,
	2010			Adjustments			Total			2009			Adjustments			Total
Net sales	$	782,690		$	(782,690	)	$	-		$	258,559		$	(258,559	)	$	-
Cost of sales		512,169			(512,169	)		-			167,705			(167,705	)		-
Gross margin		270,521			(270,521	)		-			90,854			(90,854	)		-

Operating expenses
General and administrative		1,081,131			(1,060,254	)		20,877			134,145			(134,145	)		-
Guaranteed payments		53,260			(53,260	)		-			331,008			(331,008	)		-
		1,134,391			(1,113,514	)		20,877			465,153			(465,153	)		-
Operating (loss)		(863,870	)		842,993			(20,877	)		(374,299	)		374,299			-
Non-operating (expense) income:
MMA club investment loss		(13,598	)		13,598			-			-			-			-
Amortization of beneficial conversion feature		(149,354	)		-			(149,354	)		-			-			-
Interest expense		(26,370	)		18,674			(7,696	)		-			-			-
		(189,322	)		32,272			(157,050	)		-			-			-
Loss from continuing operations before income taxes		(1,053,192	)		875,265			(177,927	)		(374,299	)		374,299			-
Income tax provision (benefit)		-			-			-			-			-			-
Loss from continuing operations		(1,053,192	)		875,265			(177,927	)		(374,299	)		374,299			-
Loss from discontinued operations		-			(875,265	)		(875,265	)		-			(374,299	)		(374,299	)
Net Loss	$	(1,053,192	)	$	-		$	(1,053,192	)	$	(374,299	)	$	-		$	(374,299	)
					-									-
Net income (loss) per common share:
Basic:
Income (loss) from continuing operations	$	(3.77	)	$	3.13		$	(0.64	)	$	(2.03	)	$	2.03		$	-
Income (loss) from discontinued operations		-			(3.13	)		(3.13	)		-			(2.03	)		(2.03	)
Net income (loss) per share	$	(3.77	)	$	-		$	(3.77	)	$	(2.03	)	$	-		$	(2.03	)

Weighted average common shares outstanding basic		279,417			279,417			279,417			184,464			184,464			184,464

The accompanying notes are an integral part of these financial statements

ePunk, Inc.

(Formerly Truesport Alliances and Entertainment, Ltd.)

(Formerly Sewell Ventures, Inc.)

Notes to Financial Statements

For the Years Ended September 30, 2010 and 2009

NOTE B – DISCONTINUED OPERATIONS (Continued)

ePunk, Inc.
(formerly Truesport Alliances & Entertainment, Ltd.)
(formerly Sewell Ventures, Inc.)
Statements of Cash Flows
For the Years Ended September 30, 2010 and 2011
	2010									2009
	September 30,									September 30,
	2010			Adjustments			Total			2009			Adjustments			Total


Cash flows from operating activities:
Net loss from continuing operations	$	(1,053,192	)	$	875,265		$	(177,927	)	$	(374,299	)	$	374,299		$	-
Income (loss) from discontinued operations		-			(875,265	)		(875,265	)		-			(374,299	)		(374,299	)
Income (loss) from continuing operations		(1,053,192	)		-			(1,053,192	)		(374,299	)		-			(374,299	)
Reconciliation to net cash provided by (used in)
continuing operations:
Depreciation and amortization		21,514			(21,514	)		-			4,786			(4,786	)		-
Stock based compensation expense		50,629			(50,629	)		-			90,751			(90,751	)
Stock issued in exchange for liabilities		74,371			(74,371	)		-			-			-			-
Interest expense due to amortization of debt discount		149,354			-			149,354			-			-			-
Changes in certain assets and liabilities:
Accounts receivable		(40,753	)		40,753			-			(26,102	)		26,102			-
Related party advances		10,882			(10,882	)		-			(10,882	)		10,882			-
Inventory		(60,361	)		60,361			-			(12,500	)		12,500			-
Other current assets		1,208			(1,208	)		-			(2,525	)		2,525			-
Deferred royalty expenses		(26,361	)		26,361			-			-			-			-
Accounts payable		232,091			(232,091	)		-			60,749			(60,749	)		-
Deferred revenue		224,141			(224,141	)		-			19,754			(19,754	)		-
Accrued compensation		(16,623	)		16,623			-			49,440			(49,440	)		-
Accrued compensation - related party		(11,732	)		11,732			-			105,850			(105,850	)		-
Deferred royalty revenue		52,722			(52,722	)		-			-			-			-
Other current liabilities		57,611			(57,611	)		-			-			-			-
Net cash provided (used) by operating activities of continuing operations		(334,499	)		-			(28,573	)		(94,978	)		-			-
Net cash provided (used) by operating activities of discontinued operations		-			305,926			(305,926	)		-			94,978			(94,978	)
Net cash provided (used) by operating activities		(334,499	)					(334,499	)		(94,978	)					(94,978	)
Cash flows from investing activities:
Capital expenditures, net		(65,435	)		65,435			-			(107,912	)		107,912			-
Loans to related parties		(369,143	)		369,143			-			(207,555	)		207,555			-
Net cash provided (used) by investing activities of continuing operations		(434,578	)		434,578			-			(315,467	)		315,467			-
Net cash provided (used) by investing activities of discontinuing operations					(434,578	)		(434,578	)					(315,467	)		(315,467	)
Net cash provided (used) by investing activities		(434,578	)		-			(434,578	)		(315,467	)		-			(315,467	)
Net cash provided by financing activities:
Proceeds from the issuance of common stock		301,020			-			301,020			-			-			-
Borrowings on convertible notes payable - related parties		382,124			(34,587	)		347,537			-			-			-
Borrowings on notes payable		22,109			(22,109	)		-			42,000			(42,000	)		-
Borrowings on notes payable - related parties		61,015			(61,015	)		-			373,069