UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended June 30, 2009
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period fromto.
Commission file number: 333-145743
BONFIRE PRODUCTIONS, INC.
(Name of Registrant in its charter)
Nevada 75-3260546
------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
6302 Mesedge Drive
Colorado Springs, CO 80919
(Address of principal executive offices)
(719)598-2469
Registrant's telephone number
Securities registered under Section 12(b) of the Exchange Act:
Name of each exchange on which
Title of each class registered
None None
Securities registered under Section 12(g) of the Exchange Act:
None
(Title of Class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
[ ] Yes [X] No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act
[ ] Yes [X] No
Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 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[X] No[ ]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, 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 [X] No (Not required by smaller reporting companies)
Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K contained is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | [ ] |
| Accelerated filer | [ ] |
Non-accelerated filer | [ ] | (Do not check if a smaller reporting company) | Smaller reporting company | [x] |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ X] No []
State issuer's revenues for its most recent fiscal year: Nil
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of a specified date within the past 60 days. (See definition of affiliate in Rule 12b-2 of the Exchange Act.)
$4,204,664
State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date.
65,033,320 shares of common stock at December 1, 2009
Documents incorporated by reference: None
TABLE OF CONTENTS
Table of Contents
ITEM 1B. UNRESOLVED STAFF COMMENTS
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
ITEM 6. SLECTED FINANCIAL DATA
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION
ITEM 7A. QUANTITTIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
ITEM 9A: CONTROLS AND PROCEDURES
ITEM 10: DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE
ITEM 11: EXECUTIVE COMPENSATION
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
ITEM 15: EXHIBITS, FINANCIAL STATEMENT SCHEDULES
ITEM 1: BUSINESS
SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act, that are based on the beliefs of our management as well as assumptions made by and information currently available to us. When we use the words "believe," "plan," "will likely result," "expect," "intend," "will continue," "is anticipated," "estimate," "project," "may," "could," "would," "should," and similar expressions in this Form 10-K as they relate to us or our management, we are intending to identify forward-looking information statements. These statements reflect our current views with respect to expected future plans, initiatives, operating conditions and other potential events and are subject to certain risks, assumptions, and uncertainties. The statements contained herein that are not purely historical are forward-looking statements including without limitation statements regarding our expectations, beliefs, intentions or strategies regarding the future. Such statements include information contained in this Form 10-K regarding pending legal proceedings and the results thereof as well as any statements regarding our future product development, governmental or other regulatory approval prospects and related matters. All forward-looking statements included in this document or incorporated by reference herein are based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth in "Risk Factors" below.
Business Overview
General
We were incorporated in the State of Nevada on August 25, 2006. We have commenced operations by launching a website and sourcing content for our first audio recordings. We are a start-up stage corporation with limited operations and no revenues to date from our business operations. For the period ended June 30, 2009 we generated no revenue. Our business office is located at 6302 Mesedge Drive, Colorado Springs, CO 80919, 719-598-2469.
Industry Overview
Our Services
We hoped to market and sell online multicultural children's content in audio format. Our objective was to become a provider of folk stories, fairy tales and traditional stories from around the world. We planned to acquire rights to content, subject to financing, in either the original language or a translated-to-English version and produce audio and video recordings that will be sold in the popular MP3 format online or on CDs and DVDs.
We are now in the business of pursuing an outside merger candidate with an ongoing business venture.
Employees
We have no employees as of the date of this report other than our one director.
Research and Development Expenditures
We have not incurred any other research or development expenditures since our incorporation.
Subsidiaries
We do not have any subsidiaries.
Patents and Trademarks
We have applied for a U.S. trademark for "Bonfire Tales" with the U.S. Trademark and Patent Office. The serial number for the application is 77241986. The USPTO has issued on July 1, 2008, a "Notice of Allowance" in regard to the use of our trade mark.
ITEM 1A RISK FACTORS
In addition to the other information in this annual report, the following factors should be carefully considered in evaluating our business and prospects:
COMPANY RISK FACTORS
1. There is substantial uncertainty as to whether we will continue operations.If we discontinue operations, you could lose your investment.
Our auditors have discussed their uncertainty regarding our business operations in their audit report dated December 2, 2009. This means that there is substantial doubt that we can continue as an ongoing business for the next 12 months. The financial statements do not include any adjustments that might result from the uncertainty about our ability to continue in business. As such, we may have to cease operations and you could lose your entire investment.
2. We lack an operating history and have losses which we expect to continue into the future. There is no assurance our future operations will result in profitable revenues. If we cannot develop an established merger, our business will fail.
We were incorporated on August 25, 2006 and we have not realized any revenues. We have very little operating history upon which an evaluation of our future success or failure can be made. Our net loss since inception on August 25, 2006 to June 30, 2009 is $127,888.
Based upon current plans, we expect to incur operating losses in future periods because we will be incurring expenses and not generating revenues. We cannot guarantee that we will be successful in generating revenues in the future. Failure to generate revenues will cause us to go out of business.
3. Our future success is dependent on our existing management team and hiring and assimilating new key employees, and our inability to attract or retain key personnel in the future would materially harm our business and results of operations.
Our future success depends on the continuing efforts and abilities of our current management team. In addition, our future success will depend, in part, on our ability to attract and retain highly skilled employees, including management, technical and sales personnel. The loss of services of any of our key personnel, the inability to attract or retain key personnel in the future, or delays in hiring required personnel could materially harm our business and results of operations. We may be unable to identify and attract highly qualified employees in the future. In addition, we may not be able to successfully assimilate these employees or hire qualified personnel to replace them.
4. Our operating results may prove unpredictable which could negatively affect our operating results.
Our operating results are likely to fluctuate significantly in the future due to a variety of factors, many of which are outside of our control. Factors that may cause our operating results to fluctuate significantly include the following:
o our ability to generate enough working capital from future equity sales;
o the amount and timing of operating costs and capital expenditures relating to expansion of our business, operations and infrastructure; and
o general economic conditions
If realized, any of these risks could have a material adverse effect on our business, financial condition and operating results.
5. Our directors do not have experience in the recording industry, or brand development and marketing of products. As a result, we may not be able to recognize and take advantage of opportunities without the aid of qualified marketing and business development consultants. Our directors' decisions and choices may not be well thought out and our operations, earnings and ultimate financial success may suffer irreparable harm as a result.
6. Because we are small and do not have much capital, we must limit our efforts in marketing of our services and products. If we do not make a profit or find a merger candidate, we may have to suspend or cease operations.
Because we are small and do not have much capital, we must limit our efforts.
7. We do not intend to pay dividends and there will be less ways in which you can make a gain on any investment in Bonfire Productions.
We have never paid any cash dividends and currently do not intend to pay any dividends for the foreseeable future. To the extent that we require additional funding currently not provided for in our financing plan, our funding sources may likely prohibit the payment of a dividend. Because we do not intend to declare dividends, any gain on an investment in Bonfire Productions will need to come through appreciation of the stock's price.
8. Because our directors own 53.82 % of our outstanding common stock, he could make and control corporate decisions that may be disadvantageous to other minority shareholders.
Our President and director, Tim DeHerrera and past directors Richard Luthmann and P James Voloshin, own a combined 53.82% of the outstanding shares of our common stock as of the date of this report. Accordingly, they have a significant influence in determining the outcome of all corporate transactions or other matters, including mergers, consolidations, and the sale of all or substantially all of our assets. They also have the power to prevent or cause a change in control. The interests of our past director may differ from the interests of the other stockholders and thus result in corporate decisions that are disadvantageous to other shareholders.
RISK FACTORS RELATING TO OUR COMMON STOCK
9. If a market for our common stock does not develop, shareholders may be unable to sell their shares.
Our common stock is currently traded on the FINRA over the counter bulletin board. However, we can provide investors with no assurance that a liquid public market for our shares will materialize. If no market is ever developed for our shares, it will be difficult for shareholders to sell their stock. In such a case, shareholders may find that they are unable to achieve benefits from their investment.
10. If a market for our common stock develops, our stock prices may be volatile.
If a market for our common stock develops, we anticipate that the market price of our common stock will be subject to wide fluctuations in response to several factors, including:
(1) actual or anticipated variations in our results of operations;
(2) our ability or inability to generate new revenues;
(3) increased competition; and
(4) conditions and trends in the audio recording and publishing industry.
Further our common stock price may be impacted by factors that are unrelated or disproportionate to our operating performance. These market fluctuations, as well as general economic, political and market conditions, such as recessions, interest rates or international currency fluctuations may adversely affect the market price of our common stock.
11. Penny stock regulations may impose certain restrictions on marketability of our stock.
The Securities and Exchange Commission has adopted regulations which generally define a "penny stock" to be any equity security that has a market price (as defined) of less than $5.00 per share, subject to certain exceptions. As a result, our common stock is subject to rules that impose additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited investors (generally those with assets in excess of $1,000,000 or annual income exceeding $200,000, or $300,000 with their spouse). For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchase of such securities and have received the purchaser's written consent to the transaction prior to the purchase. Additionally, for any transaction involving a penny stock, unless exempt, the rules require delivery, prior to the transaction, of a risk disclosure document mandated by the Commission relating to the penny stock market. The broker-dealer must also disclose the commission payable to both the broker-dealer and the registered representative, current quotations for the securities and, if the broker-dealer is the sole market maker, the broker-dealer must disclose this fact and the broker-dealers presumed control over the market. Finally, monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. Consequently, the "penny stock" rules may restrict the ability of broker-dealers to sell the Company's securities and may affect the ability of purchasers to sell the Company's securities in the secondary market and the price at which such purchasers can sell any such securities.
12. We may be exposed to potential risks resulting from new requirements under Section 404 of the Sarbanes-Oxley Act of 2002.
In June 2003, the United States Securities and Exchange Commission (“SEC”) adopted final rules under Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”) , as amended by SEC Release No. 33-8934 on June 26, 2008. Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, we will be required, commencing with our annual report for the fiscal year ending October 31, 2010, to include in our annual report our assessment of the effectiveness of our internal control over financial reporting as of the end of fiscal year 2010. The internal control report must include a statement
*
Of management's responsibility for establishing and maintaining adequate internal control over our financial reporting;
*
Of management's assessment of the effectiveness of our internal control over financial reporting as of year end;
*
Of the framework used by management to evaluate the effectiveness of our internal control over financial reporting; and
*
that our independent accounting firm has issued an attestation report on management's assessment of our internal control over financial reporting, which report is also required to be filed.
Furthermore, our independent registered public accounting firm will be required to attest to whether our assessment of the effectiveness of our internal control over financial reporting is fairly stated in all material respects and separately report on whether it believes we have maintained, in all material respects, effective internal control over financial reporting as of October 31, 2010. We have not yet completed our assessment of the effectiveness of our internal control over financial reporting. We expect to incur additional expenses and diversion of management's time as a result of performing the system and process evaluation, testing and remediation required in order to comply with the management certification and auditor attestation requirements.
We do not have a sufficient number of employees to segregate responsibilities and may be unable to afford increasing our staff or engaging outside consultants or professionals to overcome our lack of employees. During the course of our testing, we may identify other deficiencies that we may not be able to remediate in time to meet the deadline imposed by the Sarbanes-Oxley Act for compliance with the requirements of
Section 404. In addition, if we fail to achieve and maintain the adequacy of our internal controls, as such standards are modified, supplemented or amended from time to time, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act. Moreover, effective internal controls, particularly those related to revenue recognition, are necessary for us to produce reliable financial reports and are important to help prevent financial fraud. If we cannot provide reliable financial reports or prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price of our common stock, if a market ever develops, could drop significantly.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2: PROPERTIES
Our business office is located at6302 Mesedge Drive, Colorado Springs, Co 80919; we do not have a lease agreement and share a small office at this location.
ITEM 3: LEGAL PROCEEDINGS
On May 1, 2009,, the Christian Samuels Group filed a lawsuit in the Dallas District Court DC-09-05496-G, alleging the Company and its executives did not perform on the delivery of share ownership to the Christian Samuels investors and other issues towards the other parties named in the suit. On July 15, 2009, the Company filed a counter-claim against the Christian Samuels Group and other parties alleging that they had not preformed in funding the Company pursuant to a stock purchase agreement.
On May 4, 2009, the Company filed an action against several Christian Samuels Group investors and other individuals in the District Court, Clark County, Nevada, case number A589507. The suit alleges that shares of the company were inadvertently delivered to Christian Samuel investors and demanding payment for such shares.
The parties have reached a settlement agreement as of the date of this filing but have not finalized and settled the cases. The Company does not believe these lawsuits or their respective settlements will have a material impact on the Company’s financial statements
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted during the fourth quarter of our fiscal year to a vote of security holders, through the solicitation of proxies or otherwise.
ITEM 5: MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
Our shares of common stock commenced quotation on the OTC Bulletin Board under the symbol BNFR on January 7, 2008.
For the periods indicated, the following table presents the range of high and low bid quotations for the common stock as reported by the OTC Bulletin Board for the respective market on which our common stockwas listed during the quarter being reported. Prices below reflect inter-dealer prices, without retail write-up, write-down or commission and may not represent actual transactions.
2009 |
| High |
| Low |
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First Quarter |
| $ 0.25 |
| $ 0.02 |
Second Quarter |
| $ 0.25 |
| $ 0.02 |
Third Quarter |
| $ 0.25 |
| $ 0.02 |
Fourth |
| $ 0.25 |
| $ 0.23 |
|
|
|
|
|
2008 |
| High |
| Low |
|
|
|
|
|
Third Quarter (from 1/7/08) |
|
|
|
|
Fourth Quarter |
|
|
|
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We have 54 shareholders of record as at the date of this annual report.
Dividends
There are no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where, after giving effect to the distribution of the dividend:
1. we would not be able to pay our debts as they become due in the usual course of business; or
2. our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution.
We have not declared any dividends, and we do not plan to declare any dividends in the foreseeable future.
ITEM 6. SLECTED FINANCIAL DATA
Not required for smaller reporting companies.
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION
FORWARD LOOKING STATEMENTS
GENERAL
The following discussion and analysis should be read in conjunction with our financial statements and related footnotes for the year ended June 30, 2009 elsewhere in this Annual Report on Form 10-K. The discussion of results, causes and trends should not be construed to imply any conclusion that such results or trends will necessarily continue in the future. We were incorporated in the State of Nevada on August 25, 2006. We have commenced operations by recording and publishing on our website our first four collections of children's stories from around the world.
For the next twelve months we anticipate seeking potential merger partners who have an ongoing business.
To June 30, 2009, the Company has funded its initial operations through the issuance of 6,503,332 shares of capital stock for proceeds of $48,550 and loans from directors and related parties in the total amount of $63,018. The outstanding loan payables are unsecured, carry zero interest and are payable on demand.
We anticipate that additional funding will be required in the form of equity financing from the sale of our common stock. However, at his time, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock, or through loans from our directors, to fund our operations, marketing plan and to meet our obligations over the next twelve months. We do not have any arrangements in place for any future equity financing.
Results of Operations for the Year Ended June 30, 2009, and for the period from August 25, 2006 (Inception) to June 30, 2009.
We did not earn any revenues during the year ended June 30, 2009, and during the period from August 25, 2006 (Inception) to June 30, 2009.
During the year ended June 30, 2009, we incurred operating expenses in the amount of $46,142 (June 30, 2008: $71,535).
As of June 30, 2009, we recorded and published on the Company’s website our first four collections of children's stories from around the world. This website is no longer in use.
During the period ended June 30, 2009, the former President of the Company provided a $1,900 loan to the Company. The loan payable is unsecured, bears interest at 6.45% per annum, and has been paid in full.
As at June 30, 2009, the Company had assets totaling $459, and liabilities totaling $27,042 for a working capital deficiency of $26,583.
On September 14, 2007, the Company's Registration Statement on the Form SB-2 became effective. To date the Company issued 3,003,332 shares of common stock at $0.015 per share for cash proceeds of $45,050 pursuant to this Registration Statement.
We have not generated any revenue since inception and are dependent upon obtaining financing to pursue recording, marketing and distribution activities. For these reasons, our auditors believe that there is substantial doubt that we will be able to continue as a going concern.
ITEM 7A. QUANTITTIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not required by smaller reporting companies.
BONFIRE PRODUCTIONS, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
June 30, 2009
BALANCE SHEETS
STATEMENTS OF OPERATIONS
STATEMENTS OF CASH FLOWS
STATEMENT OF STOCKHOLDERS' EQUITY
NOTES TO FINANCIAL STATEMENTS
SEALE AND BEERS, CPAs
PCAOB & CPAB REGISTERED AUDITORS
www.sealebeers.com
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
Bonfire Productions, Inc.
(A Development Stage Company)
We have audited the accompanying balance sheets of Bonfire Productions, Inc. (A Development Stage Company) as of June 30, 2009 and 2008, and the related statements of operations, stockholders’ equity (deficit) and cash flows for the years ended June 30, 2009, 2008 and since inception on August 25, 2006 through June 30, 2009. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conduct our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Bonfire Productions, Inc. (A Development Stage Company) as of June 30, 2009 and 2008, and the related statements of operations, stockholders’ equity (deficit) and cash flows for the years ended June 30, 2009 2008 and since inception on August 25, 2006 through June 30, 2009, in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has an accumulated deficit of $127,888, working capital deficiency of $(26,583) since inception, which raises substantial doubt about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Seale and Beers, CPAs
Seale and Beers, CPAs
Las Vegas, Nevada
December 2, 2009
50 S. Jones Blvd. Suite 202 Las Vegas, NV 89107 Phone: (888)727-8251 Fax: (888)782-2351
June 30, June 30,
2009 2008
---- ----
(Audited) (Audited)
ASSETS
------
Current assets
Cash $ 459 $ 410
Prepaid expenses 31
------------ -------------
Total current assets 459 441
Other assets
Equipment, net 1,852
Security deposit 200
------------ -------------
Total Assets $ 459 $ 2,493
============ =============
LIABILITIES & STOCKHOLDERS' EQUITY
----------------------------------
Current liabilities
Accounts payable and accrued liabilities $ 5,792 $ 6,312
Due to related parties 2,745
Loan payable - related parties 21,250 26,632
------------ ------------
Total current liabilities 27,042 35,689
Total Liabilities 27,042 35,689
------------ ------------
Stockholders' Equity
Capital stock
75,000,000 shares authorized, $0.001 par value
65,033,320 shares issued and outstanding
(June 30, 2008 - 65,033,320) 65,033 65,033
Additional paid in capital 36,272 ( 16,483)
Deficit accumulated during the development stage ( 127,888) ( 81,746)
------------- ------------
Total Stockholders' Equity ( 26,583) ( 33,196)
------------- ------------
Total Liabilities and Stockholders' Equity $ 459 $ 2,493
============= ============
The accompanying notes are an integral part of these financial statements
BONFIRE PRODUCTIONS, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
Year Year August 25, 2006
Ended ended (Inception) through
June 30, June 30, June 30,
2009 2008 2009
---- ---- ----
Net Income $ - $ - $ -
------------ ------------ ------------
Expenses:
Amortization $ $ 76 $ 76
Audio production 14,500 14,500
Professional/Legal Fees 15,792 15,792
General and Administrative 30,014 55,856 90,052
------------ ------------ ------------
45,806 70,432 126,420
------------ ------------ ------------
Loss from operations ( 45,806) ( 70,432) ( 126,420)
Other income (expense)
Interest expense ( 336) ( 1,103) ( 1,468)
------------ ------------ ------------
Income (loss) before provision for income tax ( 46,142) ( 71,535) ( 127,888)
Provision for income tax - - -
------------ ------------ ------------
Net income (loss) $( 46,142) $( 71,535) ( 127,888)
============ ============ ============
Loss per share $( 0.00) $( 0.00) ( 0.00)
============ ============ ============
Weighted average number of common
shares outstanding 65,033,320 55,992,796 65,033,320
============ ============ ============
The accompanying notes are an integral part of these financial statements
BONFIRE PRODUCTIONS, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
Year Year August 25, 2006
Ended ended (Inception) through
June 30, 2009 June 30, 2008 June 30, 2009
------------- ------------- -------------
Operating Activities:
Net income (loss) $( 46,142) $( 81,746) $( 127,888)
Adjustment to reconcile net income to net
cash provided by (used for) operating activities:
Amortization 76 76
Prepaid expenses 31 ( 31) -
Security deposit 200 ( 200) -
Accounts payable and accrued liabilities ( 520) 94 5,792
----------- ---------- ----------
Net cash provided by (used for)
operating activities ( 46,431) ( 70,837) ( 122,020)
----------- ---------- ----------
Investing Activities
Purchase of fixed assets ( ) ( 1,929) ( 1,929)
Disposition of fixed assets 1,852 1,852
----------- ---------- ----------
Net cash provided by (used for)
investing activities 1,852 ( 1,929) ( 77)
----------- ---------- -----------
Financing Activities:
Contributions from related party 52,755 12,362 81,215
Accounts payable related parties ( 8,127) - ( 8,127)
Proceeds from issuance of common stock 45,050 48,550
----------- ---------- -----------
Net cash provided by (used for)
financing activities 52,755 56,653 94,741
----------- ---------- -----------
Net Increase (Decrease) In Cash 49 ( 16,113) 459
Cash At The Beginning Of The Period 410 16,523 -
----------- ---------- -----------
Cash (Bank Indebtedness) At The End
Of The Period $ 459 $ 410 $ 459
=========== ========== ===========
Non-Cash Investing And Financing Activities
-------------------------------------------------------
None $ - $ - $ -
=========== ========== ===========
Supplemental Disclosure
-----------------------
Cash paid for:
Interest $ - $ - $ -
=========== ========== ===========
Income Taxes $ - $ - $ -
=========== ========== ===========
The accompanying notes are an integral part of these financial statements
Deficit
&nb sp; Accumulated
During the
Common Shares Paid In Development
-------------
Number Par Value Capital Stage Total
------ --------- ------- ----- -----
Balances, August 25, 2006 - $ - $ - $ - $ -
Issued for cash:
Common stock December, 2006 - at $0.001 35,000,000 35,000 ( 31,500) - 3,500
Net gain (loss) for the period ended June 30, 2007 - - - ( 10,211) ( 10,211)
---------- ---------- ---------- ------------ -----------
Balances, June 30, 2007 35,000,000 35,000 ( 31,500) ( 10,211) ( 6,711)
Issued for cash:
Common stock October/November, 2007 - at $0.001 30,033,320 30,033 15,017 - 45,050
Net gain (loss) for the year ended June 30, 2008 - - - ( 71,535) ( 71,535)
---------- ---------- ---------- ------------ ------------
Balances, June 30, 2008 65,033,320 65,033 ( 16,483) ( 81,746) ( 33,196)
Gain on Disposition of related party debt 52,755 52,755
------------ ------------
Net gain (loss) for the period ended June 30, 2009 - - - ( 46,142) $ ( 46,142)
----------- ---------- ------------ ------------ ------------
Balances, June 30, 2009 (Forward Split 10 for 1) 65,033,320 65,033 36,272 ( 127,888) $ ( 26,583)
========== ========== =========== ============ ============
The accompanying notes are an integral part of these financial statements
The Company was incorporated in the State of Nevada, United States of America on August 25, 2006 and its fiscal year end is June 30. The Company was engaged in recording, publishing and distribution of multicultural stories and fairy tales for children through its website www.bonfiretales.com and other internet retailers. It no longer operates Bonfiretales and is seeking a merger partner to bring in a business.
Going Concern
These financial statements have been prepared on a going concern basis. The Company has a working capital of $459.00 and has accumulated deficit of $127,888 since inception. Its ability to continue as a going concern is dependent upon the ability of the Company to generate profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. The outcome of these matters cannot be predicted with any certainty at this time. These factors raise substantial doubt that the company will be able to continue as a going concern. Management plans to continue to provide for its capital needs by the issuance of common stock and related party advances. These financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern.
Note 2 Summary of Significant Accounting Policies The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgment. Actual results may vary from these estimates.
The financial statements have, in management's opinion, been properly prepared within reasonable limits of materiality and within the framework of the significant accounting policies summarized below:
Development Stage Company
The Company complies with Financial Accounting Standard Board Statement ("FAS") No. 7 and The Securities and Exchange Commission Act Guide 7 for its characterization of the Company as development stage.
Revenue Recognition
We recognize revenue from product sales when the following four revenue recognition criteria are met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the selling price is fixed or determinable, and collectibility is reasonably assured. Product sales and shipping revenues, net of promotional discounts, rebates, and return allowances, are recorded when the products are shipped and title passes to customers.
Impairment of Long-lived Assets
Capital assets are reviewed for impairment in accordance with FAS No. 144, "Accounting for the Impairment or Disposal of Long-lived Assets", which was adopted effective January 1, 2002. Under FAS No. 144, these assets are tested for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable.
Bonfire Productions, Inc.
(A Development Stage Company)
Notes to Financial Statements
June 30, 2009
Page 2
Note 2 Summary of Significant Accounting Policies - (cont'd)
Technology and Content
Technology and content expenses consist principally of consultants' fees and expenses related to website development, editorial content, and systems support. Technology and content costs are expensed as incurred.
Advertising Costs
The Company's policy regarding advertising is to expense advertising when incurred. The Company had not incurred any advertising expense as of June 30, 2009.
Foreign Currency Translation
The financial statements are presented in United States dollars. In accordance with Statement of Financial Accounting Standards No. 52, "Foreign Currency Translation", since the functional currency of the Company is U.S. dollars, the foreign currency financial statements of the Company's subsidiaries are re-measured into U.S. dollars. Monetary assets and liabilities are re-measured using the foreign exchange rate that prevailed at the balance sheet date. Revenue and expenses are translated at weighted average rates of exchange during the year and stockholders' equity accounts and furniture and equipment are translated by using historical exchange rates. Any re-measurement gain or loss incurred is reported in the income statement.
Stock-based Compensation
The Company has not adopted a stock option plan and has not granted any stock options. Accordingly no stock-based compensation has been recorded to date.
Income Taxes
The Company uses the asset and liability method of accounting for income taxes in accordance with FAS No. 109 "Accounting for Income Taxes". Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and loss carryforwards and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
Fair Value of Financial Instruments
The carrying value of the Company's financial instruments consisting of cash, accounts payable and accrued liabilities, agreement payable and due to related party approximate their carrying value due to the short-term maturity of such instruments. Unless otherwise noted, it is management's opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments.
Recent Accounting Pronouncements
In June 2009, the FASB issued SFAS No. 166, “Accounting for Transfers of Financial Assets—an amendment of FASB Statement No. 140” (“SFAS 166”). The provisions of SFAS 166, in part, amend the derecognition guidance in FASB Statement No. 140, eliminate the exemption from consolidation for qualifying special-purpose entities and require additional disclosures. SFAS 166 is effective for financial asset transfers occurring after the beginning of an entity’s first fiscal year that begins after November 15, 2009. The Company does not expect the provisions of SFAS 166 to have a material effect on the financial position, results of operations or cash flows of the Company.
Bonfire Productions, Inc.
(A Development Stage Company)
Notes to Financial Statements
June 30, 2009
Page 3
Note 2 Summary of Significant Accounting Policies - (cont'd)
In June 2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation No. 46(R) (“SFAS 167”). SFAS 167 amends the consolidation guidance applicable to variable interest entities. The provisions of SFAS 167 significantly affect the overall consolidation analysis under FASB Interpretation No. 46(R). SFAS 167 is effective as of the beginning of the first fiscal year that begins after November 15, 2009. SFAS 167 will be effective for the Company beginning in 2010. The Company does not expect the provisions of SFAS 167 to have a material effect on the financial position, results of operations or cash flows of the Company.
In June 2009, the FASB issued SFAS No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles – a replacement of FASB Statement No. 162” (“SFAS No. 168”). Under SFAS No. 168 the “FASB Accounting Standards Codification” (“Codification”) will become the source of authoritative U. S. GAAP to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. SFAS No. 168 is effective for financial statements issued for interim and annual periods ending after September 15, 2009. On the effective date, the Codification will supersede all then-existing non-SEC accounting and reporting standards. All other non-grandfathered non-SEC accounting literature not included in the Codification will become non-authoritative. SFAS No. 168 is effective for the Company’s interim quarterly period beginning July 1, 2009. The Company does not expect the adoption of SFAS No. 168 to have an impact on the financial statements.
In June 2009, the Securities and Exchange Commission’s Office of the Chief Accountant and Division of Corporation Finance announced the release of Staff Accounting Bulletin (SAB) No. 112. This staff accounting bulletin amends or rescinds portions of the interpretive guidance included in the Staff Accounting Bulletin Series in order to make the relevant interpretive guidance consistent with current authoritative accounting and auditing guidance and Securities and Exchange Commission rules and regulations. Specifically, the staff is updating the Series
in order to bring existing guidance into conformity with recent pronouncements by the Financial Accounting Standards Board, namely, Statement of Financial Accounting Standards No. 141 (revised 2007), Business Combinations, and Statement of Financial Accounting
Standards No. 160, Non-controlling Interests in Consolidated Financial Statements. The statements in staff accounting bulletins are not rules or interpretations of the Commission, nor are they published as bearing the Commission's official approval. They represent interpretations and practices followed by the Division of Corporation Finance and the Office of the Chief Accountant in administering the disclosure requirements of the Federal securities laws.
In April 2009, APB 12-5, Disclosure of depreciable assets and depreciation. Depreciation was calculated using the straight line method over a five year period.
In April 2009, the FASB issued FSP No. FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments. This FSP amends FASB Statement No. 107, Disclosures about Fair Value of Financial Instruments, to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. This FSP also amends APB Opinion No. 28, Interim Financial Reporting, to require those disclosures in summarized financial information at interim reporting periods. This FSP shall be effective for interim reporting periods ending after June 15, 2009. The Company does not have any fair value of financial instruments to disclose.
In April 2009, the FASB issued FSP No. FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments. This FSP amends the other-than-temporary impairment guidance in U.S. GAAP for debt securities to make the guidance more operational and to improve the presentation and disclosure of other-than-temporary impairments on debt and equity securities in the financial statements. The FSP does not amend existing recognition and measurement guidance related to other-than-temporary impairments of equity securities. The FSP shall be effective for interim and annual reporting periods ending
Bonfire Productions, Inc.
(A Development Stage Company)
Notes to Financial Statements
June 30, 2009
Page 4
Note 2 Summary of Significant Accounting Policies - (cont'd)
after June 15, 2009. The Company currently does not have any financial assets that are other-than-temporarily impaired.
In April 2009, the FASB issued FSP No. FAS 141(R)-1, Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies, to address some of the application issues under SFAS 141(R). The FSP deals with the initial recognition and measurement of an asset acquired or a liability assumed in a business combination that arises from a contingency provided the asset or liability’s fair value on the date of acquisition can be determined. When the fair value can-not be determined, the FSP requires using the guidance under SFAS No. 5, Accounting for Contingencies, and FASB Interpretation (FIN) No. 14, Reasonable Estimation of the Amount of a Loss. This FSP was effective for assets or liabilities arising from contingencies in business combinations for which the acquisition date is on or after January 1, 2009. The adoption of this FSP has not had a material impact on our financial position, results of operations, or cash flows during the six months ended June 30, 2009.
In April 2009, the FASB issued FSP No. FAS 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FSP FAS 157-4”). FSP FAS 157-4 provides guidance on estimating fair value when market activity has decreased and on identifying transactions that are not orderly. Additionally, entities are required to disclose in interim and annual periods the inputs and valuation techniques used to measure fair value. This FSP is effective for interim and annual periods ending after June 15, 2009. The Company does not expect the adoption of FSP FAS 157-4 will have a material impact on its financial condition or results of operation.
In October 2008, the FASB issued FSP No. FAS 157-3, “Determining the Fair Value of a Financial Asset When the Market for That Asset is Not Active,” (“FSP FAS 157-3”), which clarifies application of SFAS 157 in a market that is not active. FSP FAS 157-3 was effective upon issuance, including prior periods for which financial statements have not been issued. The adoption of FSP FAS 157-3 had no impact on the Company’s results of operations, financial condition or cash flows.
In December 2008, the FASB issued FSP No. FAS 140-4 and FIN 46(R)-8, “Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities.” This disclosure-only FSP improves the transparency of transfers of financial assets and an enterprise’s involvement with variable interest entities, including qualifying special-purpose entities. This FSP is effective for the first reporting period (interim or annual) ending after December 15, 2008, with earlier application encouraged. The Company adopted this FSP effective January 1, 2009. The adoption of the FSP had no impact on the Company’s results of operations, financial condition or cash flows.
In December 2008, the FASB issued FSP No. FAS 132(R)-1, “Employers’ Disclosures about Postretirement Benefit Plan Assets” (“FSP FAS 132(R)-1”). FSP FAS 132(R)-1 requires additional fair value disclosures about employers’ pension and postretirement benefit plan assets consistent with guidance contained in SFAS 157. Specifically, employers will be required to disclose information about how investment
allocation decisions are made, the fair value of each major category of plan assets and information about the inputs and valuation techniques used to develop the fair value measurements of plan assets. This FSP is effective for fiscal years ending after December 15, 2009. The Company does not expect the adoption of FSP FAS 132(R)-1 will have a material impact on its financial condition or results of operation.
In September 2008, the FASB issued exposure drafts that eliminate qualifying special purpose entities from the guidance of SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,” and FASB Interpretation 46 (revised December 2003), “Consolidation of Variable Interest Entities - an interpretation of ARB No. 51,” as well as other modifications. While the proposed revised pronouncements have not been finalized and the proposals are subject to further public
Bonfire Productions, Inc.
(A Development Stage Company)
Notes to Financial Statements
June 30, 2009
Page 5
Note 2 Summary of Significant Accounting Policies - (cont'd)
comment, the Company anticipates the changes will not have a significant impact on the Company’s financial statements. The changes would be effective March 1, 2010, on a prospective basis.
Note 3 Capital Stock The total number of common shares authorized that may be issued by the Company is 75,000,000 shares with a par value of one tenth of one cent ($0.001) per share and no other class of shares is authorized.
During the period from August 25, 2006 (inception) to June 30, 2007, the Company issued 3,500,000 shares of common stock to its director for total proceeds of $3,500. During the year ended June 30, 2008, the Company issued 3,003,332 shares of common stock at $0.015 per share for total proceeds of $45,050.
To March 31, 2009, the Company has not granted any stock options and has not recorded any stock-based compensation.
On April 20, 2009 the Company implemented a 10 for 1 forward stock split whereby each shareholder of record received an additional 9 shares of common stock for every 1 share held of record.
Note 4 Related Party Transactions
a) The President of the Company provides consulting services to the Company. During the year ended June 30, 2009 consulting services of $Nil (June 30, 2008 - $2,066) were charged to operations.
b) At March 31, 2009, the Company owed $1,900 to directors of the Company for cash advances provided to the Company. The loan is payable on demand. This cash advance was paid in full at June 30, 2009
c) During the period ended September 30, 2008, the former President of the Company provided a $7,000 loan to the Company. The loan was payable on demand, unsecured, bore interest at 6.45% per annum, and consisted of $7,000 of principal due on or after July 5, 2009, and $336 of accrued interest payable as at August 29, 2008.
d) On August 29, 2008, the amounts due to the former President of the Company were settled and the Company recorded a $37,123 gain on the settlement of related party debt.
e) On April 7, 2009, funds were disbursed from escrow for the purchase of approximately 54% control of the Company. Three million five hundred thousand (3,500,000) shares were purchased. The shares were purchased pursuant to an Affiliate Stock Purchase Agreement by Tim C. DeHerrera (1,166,667 shares), P. James Voloshin (1,166,667 shares) and Richard A. Luthmann (1,166,666 shares). Control was assumed from Alexander Kulyashov pursuant to the Agreement. As part of the purchase of control, Tim C. DeHerrera consented to act as President, Secretary and Director, P. James Voloshin consented to act as Treasurer and Director, and Richard Luthmann consented to act as Executive Vice President, Chief Legal Officer and Director of the Company. With the transfer of control, an additional $15,632 gain on settlement and related party debt was recorded.
f) On May 18, 2009, Shareholder Mr. Vikram Khanna provided a $5,000 loan to the Company. The loan is payable on demand with no fixed term or set duration of repayment.
g) On June 15, 2009, Shareholder Mr. Vikram Khanna provided a $16,250 loan to the Company. The loan is payable on demand with no fixed term or set duration of repayment.
Bonfire Productions, Inc.
(A Development Stage Company)
Notes to Financial Statements
June 30, 2009
Page 6
Note 5 Disposition of Assets
a) On April 7, 2009 at the time of the Change of Control, the Company allowed previous management to retain the company deposit in the amount of $200 and the Company laptop computer valued at $1,532.
Note 6 Legal Proceedings
On May 1, 2009,, the Christian Samuels Group filed a lawsuit in the Dallas District Court DC-09-05496-G, alleging the Company and its executives did not perform on the delivery of share ownership to the Christian Samuels investors and other issues towards the other parties named in the suit. On July 15, 2009, the Company filed a counter-claim against the Christian Samuels Group and other parties alleging that they had not preformed in funding the Company pursuant to a stock purchase agreement.
On May 4, 2009, the Company filed an action against several Christian Samuels Group investors and other individuals in the District Court, Clark County, Nevada, case number A589507. The suit alleges that shares of the company were inadvertently delivered to Christian Samuel investors and demanding payment for such shares.
The parties have reached a settlement agreement as of the date of this filing but have not finalized and settled the cases. The Company does not believe these lawsuits or their respective settlements will have a material impact on the Company’s financial statements
Note 7 Subsequent Events
On October 6, 2009, Richard Luthmann and P. James Voloshin resigned as officers and directors of the Company.
Note 8 Restatements Due to Accounting Error
The Company’s financial statements have presented that the income shown on the first, second and third quarters’ interim financial statements as filed in the Company’s interim 10Q filings was an accounting error. There were two accounting errors discovered by management: first, the Company incorrectly reported a related party loan as income in the amount of $7,500 on September 30, 2008 during the first fiscal quarter; and second, the Company incorrectly reported the forgiveness of related party debt as Other Income also during the first fiscal quarter as filed in the Company’s Form 10QSB for the period ending September 30, 2008 filed on October 28, 2008. These errors were reported again during the second and third quarters in the Company’s 10Q filings for the periods ending December 31, 2008 and March 31, 2009 filed on February 2, 2009 and May 15, 2009, respectively.
On December 1, 2009 the Company filed an 8K - Non-Reliance on Previously Issued Financial Statements. In this 8K filing the Company represented it will restate each prior quarter upon filingthe 10Q forms for each quarter of fiscal 2010.
In addition to the above, which only has impact on our interim financial statements, we have reclassified a $759 related party loan repayment during 2008 from the operation section of our Statement of Cash Flows to the Financing section of our statement of Cash Flows. This change has no other impact on any of our other financial statements.
ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
For Fiscal Year 2009 we changed Certifying Accountants to Seele and Beers, CPA’s and they billed the following fees and had to re-audit Fiscal 2008 In a letter dated September 2, 2009, we were advised that on August 27, 2009 the Public Company Accounting Oversight Board ("PCAOB") revoked the registration of Moore because of violations of PCAOB rules and auditing standards in auditing the financial statements, PCAOB rules and quality controls standards and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and noncooperation with a Board investigation.ITEM 9A: CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls
We evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the 2009 fiscal year. This evaluation was conducted with the participation of our chief executive officer and our principal accounting officer.
Disclosure controls are controls and other procedures that are designed to ensure that information that we are required to be disclosed in the reports we file pursuant to the Securities Exchange Act of 1934 is recorded, processed, summarized and reported.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is designed to provide reasonable assurances regarding the reliability of financial reporting and the preparation of our financial statements in accordance with U.S. generally accepted accounting principles, or GAAP. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree or compliance with the policies or procedures may deteriorate.
With the participation of our Chief Executive and Financial Officer, our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of June 30, 2009, based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Based on our evaluation, management concluded that we did not maintain effective internal control over financial reporting as of June 30, 2009, based on the COSO framework criteria.
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.
Limitations on the Effective of Controls
Our management does not expect that our disclosure controls or our internal controls over financial reporting will prevent all error and fraud. A control system, no matter how well conceived and operated, can provide only reasonable, but no absolute, assurance that the objectives of a control system are met. Further, any control system reflects limitations on resources, and the benefits of a control system must be considered relative to its costs. These limitations also include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of a control. A design of a control system is also based upon certain assumptions about potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected.
Conclusions
Based upon their evaluation of our controls, the chief executive officer and principal accounting officer have concluded that, subject to the limitations noted above, the disclosure controls are not effective in providing reasonable assurance that material information relating to us is made known to management on a timely basis during the period when our reports are being prepared due to a lack of segregation of duties as the Company has only one officer and director. There were no changes in our internal controls that occurred during the quarter covered by this report that have materially affected, or are reasonably likely to materially affect our internal controls.
ITEM 9B: OTHER INFORMATION
ITEM 10: DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATEGOVERNANCE
DIRECTORS AND EXECUTIVE OFFICERS
Our executive officers and directors and their respective ages as of the date of this annual report are as follows:
Directors | ||||
Name of Director |
| Age |
|
|
Tim DeHerrera |
| 52 |
|
|
|
|
|
|
|
Executive Officers | ||||
Name of Officer |
| Age |
| Office |
Tim DeHerrera |
| 52 |
| President, and Chief Executive Officer |
The directors will serve as directors until our next annual shareholder meeting or until a successor is elected who accepts the position. Directors are elected for one-year terms. Officers hold their positions at the will of the Board of Directors, absent any employment agreement. There are no arrangements, agreements or understandings between non-management shareholders and management under which non-management shareholders may directly or indirectly participate in or influence the management of Bonfire Productions' affairs.
Tim DeHerrera, President, CEO and Director
Mr. DeHerrera is also current President and CEO of InterVision Network Corporation. InterVision Network Corporation is a global on-line broadcast company publicly traded on the Pinksheets. Mr. DeHerrera has been President and a Director of the company, formerly called Future Quest Nevada, Inc., since February 2004. Mr. DeHerrera orchestrated the purchase of the Intervision assets into Future Quest in January 2008 and changed the company’s name and recapitalized the company. Previously he was President and CEO of the public company Atlantis Business Development Corporation, now Atlantis Technology Group. Prior to joining Atlantis he was in the financial services sector for over fifteen years, most recently as president and founder of Alternative Finance Advisors, Inc, a consulting company to the credit industry.
Significant Employees
We have no significant employees other than the officer and director described above.
Committees of the Board Of Directors
At present, we do not have an audit committee, compensation committee, nominating committee, an executive committee of our board of directors, stock plan committee or any other committee.
Family Relationships
There are no family relationships among our directors or officers.
Involvement in Certain Legal Proceedings
Our directors, executive officers and control persons have not been involved in any of the following events during the past five years:
1. any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
2. any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
3. being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or
4. being found by a court of competent jurisdiction (in a civil action), the Securities and Exchange 4 Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.
Audit Committee and Audit Committee Financial Expert
We have no audit committee financial expert. We believe that the cost related to retaining a financial expert at this time is prohibitive. Further, because of our stage of development, we believe the services of a financial expert are not warranted.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our executive officers and directors and persons who own more than 10% of a registered class of our equity securities to file with the SEC initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of our common stock and other equity securities, on Forms 3, 4 and 5 respectively. Executive officers, directors and greater than 10% shareholders are required by the SEC regulations to furnish us with copies of all Section 16(a) reports that they file.
Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, we believe that all filing requirements applicable to our officers, directors and greater than ten percent beneficial owners were complied with, with the exception of the following:
---------------------------------------------------------------------------------------
Number of Late Number of Transactions Not Failure to File
Name Reports Reported on a Timely Basis Requested Forms
---------------------------------------------------------------------------------------
Alexander Kulyashov 1(1) 1 Nil
Tim DeHerrera 1 1
P James Voloshin 1 1
Richard A Luthmann 1 1
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(1) The named officer, director or greater than 10% stockholder, as applicable, filed a late Form 3 -Initial Statement of Beneficial Ownership of Securities or has not filed a Form 3- Initial Statement of Beneficial Ownership.
ITEM 11: EXECUTIVE COMPENSATION
The following summary compensation table sets forth information concerning compensation for services rendered in all capacities during 2008 and 2009 awarded to, earned by or paid to our executive officers.
SUMMARY COMPENSATION TABLE
Change in
Pension
&nbs p; Value and
Non-Equity Nonqualified
Incentive Deferred
Name and Stock Option Plan Compensation All Other
Principal Salary Bonus Awards Awards Compensation Earnings Compensation Total
Position Year ($) ($) ($) ($) ($) ($) ($) ($)
(a) (b) (c) (d) (e) (f) (g) (h) (i) (j)
--------------------------------------------------------------------------------------------------------------------------------
Alexander Kulyashov,Chief Executive Officer 2008 $ 0 0 0 0 0 0 5,000 $ 5,000
--------------------------------------------------------------------------------------------------------------------------------
Nadezda Maximova, Chief Financial Officer 2008 $ 0 0 0 0 0 0 2,066 $ 2,066
--------------------------------------------------------------------------------------------------------------------------------
Tim DeHerrera,Chief Executive Officer 2009 $ 0 0 0 0 0 0 0 $ 0
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*Richard A Luthmann,VP, General Council 2009 $ 0 0 0 0 0 0 0 $ 0
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*P. James Voloshin,Treasure, Director 2009 $ 0 0 0 0 0 0 0 $ 0
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* Richard Luthmann and P. James Voloshin resigned as officers and directors on October 6, 2009.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
Option Awards Stock Awards
------------------------------------------------------------------------------------- - ---------------------------------------------
Name Number of Number of Equity Option Option Number Market Equity Equity
(a) ------------------ Securities Incentive Exercise Expiration of Shares Value of Incentive Incentive
Securities Underlying Plan Price Date or Units Shares or Plan Plan
Underlying Unexercised Awards: ($) (f) of Stock Units Awards: Awards:
Unexercised Options Number of (e) That Have of Stock Number Market
Options (#) Securities Not That Have of or Payout
(#) (Unexercisable) Underlying Vested Not Unearned Value of
(Exercisable) (c) Unexercised (#) Vested Shares, Unearned
(b) Unearned (g) ($) Units or Shares,
Options (h) Other Units or
(#) Rights Other
(d) That Rights
Have Not That
Vested Have Not
(#) Vested
(i) ($)
(j)
-----------------------------------------------------------------------------------------------------------------------------------
Tim DeHerrera 0 0 0 0 N/A 0 $ 0 0 0
Richard A Luthmann 0 0 0 0 N/A 0 $ 0 0 0
P.James Voloshin 0 0 0 0 N/A 0 $ 0 0 0
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DIRECTOR COMPENSATION TABLE FOR FISCAL 2008
Name Fees Stock Option Non-Equity Change in All Other Total
(a) Earned Awards Awards Incentive Plan Pension Value Compensation ($)
or Paid ($) ($) Compensation and ($) (h)
in (c) (d) ($) Nonqualified (g)
Cash (e) Deferred
($) Compensation
(b) Earnings
($)
&n bsp; (f)
-----------------------------------------------------------------------------------------------------------------------------------
Alexander Kulyashov 0 0 0 0 0 0 $ 0
Nadezda Maximova 0 0 0 0 0 0 $ 0
Tim DeHerrera 0 0 0 0 0 0 $ 0
Richard A Luthmann 0 0 0 0 0 ��0 $ 0
P. James Voloshin 0 0 0 0 0 0 $ 0
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Option Grants in 2009
No options were granted during 2009.
Aggregated Option Exercises in 2009 and 2009 Year-End Option Values
No options were exercised by our Officers or Directors during 2009.
Stock Incentive Plan - Awards in 2009
During 2009, no shares, options or other rights were granted to any of our employees or Officers.
Director Compensation
No options were granted or payments made in compensation for services rendered to any Bonfire Productions directors.
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth information regarding the beneficial ownership of our shares of common stock at December 1, 2009 by (i) each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock, (ii) each of our directors, (iii) our executive officers, and (iv) by all of our directors and executive officers as a group. Each person named in the table, has sole voting and investment power with respect to all shares shown as beneficially owned by such person and can be contacted at our executive office address.
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TITLE OF CLASS | NAME OF BENEFICIAL OWNER | SHARES OF COMMON STOCK | PERCENT OF CLASS |
|
|
|
|
Common | Tim DeHerrera | 11,666,667 | 18% |
Common | Richard A Luthmann* | 11,666,666 | 18% |
Common | P. James Voloshin* | 11,666,667 | 18% |
|
|
|
|
Directors and Officers as a Group |
| 53.82% | |
|
| ||
|
|
|
|
* Richard Luthmann and P. James Voloshin resigned as officers and directors on October 6, 2009.
The percent of class is based on 6,503,332 shares of common stock issued and outstanding as of the date of this annual report.
The Company has no securities authorized for issuance under equity compensation plans.
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
During the fiscal year ended June 30, 2009:
a) The President of the Company provides consulting services to the Company. During the year ended June 30, 2009 consulting services of $Nil (June 30, 2008 - $2,066) were charged to operations.
b) At March 31, 2009, the Company owed $1,900 to directors of the Company for cash advances provided to the Company. The loan is payable on demand. This cash advance was paid in full at June 30, 2009
c) During the period ended September 30, 2008, the former President of the Company provided a $7,000 loan to the Company. The loan was payable on demand, unsecured, bore interest at 6.45% per annum, and consisted of $7,000 of principal due on or after July 5, 2009, and $336 of accrued interest payable as at August 29, 2008.
d) On August 29, 2008, the amounts due to the former President of the Company were settled and the Company recorded a $37,123 gain on the settlement of amounts due to related party.
e) On April 7, 2009, funds were disbursed from escrow for the purchase of approximately 54% control of the Company. Three million five hundred thousand (3,500,000) shares were purchased. The shares were purchased pursuant to an Affiliate Stock Purchase Agreement by Tim C. DeHerrera (1,166,667 shares), P. James Voloshin (1,166,667 shares) and Richard A. Luthmann (1,166,666 shares). Control was assumed from Alexander Kulyashov pursuant to the Agreement. As part of the purchase of control, Tim C. DeHerrera consented to act as President, Secretary
and Director, P. James Voloshin consented to act as Treasurer and Director, and Richard Luthmann consented to act as Executive Vice President, Chief Legal Officer and Director of the Company. Additionally, with the transfer of control all liabilities were paid including all related party loans.
f) On May 18, 2009, Shareholder Mr. Vikram Khanna provided a $5,000 loan to the Company. The loan is payable on demand with no fixed term or set duration of repayment.
g) On June 15, 2009, Shareholder Mr. Vikram Khanna provided a $16,250 loan to the Company. The loan is payable on demand with no fixed term or set duration of repayment.
Otherwise, neither our directors and officers, nor any proposed nominee for election as a director, nor any person who beneficially owns, directly or indirectly, shares carrying more than 10% of the voting rights attached to all of our outstanding shares, nor any promoter, nor any relative or spouse of any of the foregoing persons has any material interest, direct or indirect, in any transaction since our incorporation or in any presently proposed transaction which, in either case, has or will materially affect us.
Our management is involved in other business activities and may, in the future become involved in other business opportunities. If a specific business opportunity becomes available, such persons may face a conflict in selecting between our business and their other business interests. In the event that a conflict of interest arises at a meeting of our directors, a director who has such a conflict will disclose his interest in a proposed transaction and will abstain from voting for or against the approval of such transaction.
None of our directors is independent, as described in the standards for independence set forth in the Rules of the American Stock Exchange.
Director Independence
Our common stock is quoted on the OTC bulletin board interdealer quotation system, which does not have director independence requirements. Under NASDAQ rule 4200(a)(15), a director is not considered to be independent if he or she is also an executive officer or employee of the corporation. Our director, Tim DeHerrera is also our chief executive officer. As a result, we do not have any independent directors.
As a result of our limited operating history and limited resources, our management believes that we will have difficulty in attracting independent directors. In addition, we would be likely be required to obtain directors and officers insurance coverage in order to attract and retain independent directors. Our management believes that the costs associated with maintaining such insurance is prohibitive at this time.
ITEM 14: PRINCIPAL ACCOUNTANT FEES AND SERVICES
Our principal accountants, Moore and Associates, Chartered Accountants and Advisors, billed the following fees for the services indicated for Fiscal year ended June 30, 2008, For Fiscal Year 2009 we changed Certifying Accountants to Seele and Beers, CPA’s and they billed the following fees and had to re-audit Fiscal 2008 In a letter dated September 2, 2009, we were advised that on August 27, 2009 the Public Company Accounting Oversight Board ("PCAOB") revoked the registration of Moore because of violations of PCAOB rules and auditing standards in auditing the financial statements, PCAOB rules and quality controls standards and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and noncooperation with a Board investigation.
Fiscal year-ended
June 30, 2009 June 30, 2008
------------- -------------
Audit fees $8,750 $ 3,500
Audit-related fees Nil Nil
Tax fees Nil Nil
All other fees Nil 5,100
Audit fees consist of fees related to professional services rendered in connection with the audit of our annual financial statements. All other fees relate to professional services rendered in connection with the review of the quarterly financial statements.
Our policy is to pre-approve all audit and permissible non-audit services performed by the independent accountants. These services may include audit services, audit-related services, tax services and other services. Under our audit committee's policy, pre-approval is generally provided for particular services or categories of services, including planned services, project based services and routine consultations. In addition, the audit committee may also pre-approve particular services on a case-by-case basis. Our audit committee approved all services that our independent accountants provided to us in the past two fiscal years.
PARTI IV
ITEM 15: EXHIBITS, FINANCIAL STATEMENT SCHEDULES
The following exhibits are included as part of this report:
Exhibit
Number Title of Document
------- -----------------
3.1 Articles of Incorporation*
3.2 Bylaws*
31.1 Certification pursuant to Rule 13a-14(a) under the Securities
Exchange Act of 1934
31.2 Certification pursuant to Rule 13a-14(a) under the Securities
Exchange Act of 1934
32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002
32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002
*Incorporated by reference to similarly numbered exhibits filed with the Company's Registration Statement on Form SB-2 on August 28, 2007.
SIGNATURES
Pursuant to the requirements of Section 13 and 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Dated: December 2, 2009
BONFIRE PRODUCTIONS, INC.
/s/ Tim DeHerrera
---------------------------
Tim DeHerrera
President, Chief Executive Officer and Director
(Principal Executive Officer)
