U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended May 31, 2000
Commission file no. 0-26475
ORANGE PRODUCTIONS, INC.
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(Name of Small Business Issuer in its Charter)
Florida 65-0790763
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(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification No.)
222 Lakeview Avenue, Suite 113 33401
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (404) 321-1192
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange
on which registered
None None
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Securities to be registered under Section 12(g) of the Act:
Common Stock, $.0001 par value per share
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(Title of class)
Copies of Communications Sent to:
Donald F. Mintmire
Mintmire & Associates
265 Sunrise Avenue, Suite 204
Palm Beach, FL 33480
Tel: (561) 832-5696 - Fax: (561) 659-5371
Indicate by Check whether the issuer (1) filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act 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
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As of May 31, 2000, there are 2,054,000 shares of voting stock of the
registrant issued and outstanding.
PART I
Item 1. Financial Statements
INDEX TO FINANCIAL STATEMENTS
Balance Sheets..........................................................F-2
Statements of Operations................................................F-3
Statements of Stockholders' Equity......................................F-4
Statements of Cash Flows................................................F-5
Notes to Financial Statements...........................................F-6
Orange Productions, Inc.
(A Development Stage Enterprise)
Balance Sheets
February 29, May 31,
2000 2000
----------------- ---------------
(unaudited)
ASSETS
CURRENT ASSETS
Cash $ 12,288 $ 12,059
----------------- ---------------
Total current assets 12,288 12,059
----------------- ---------------
Total Assets $ 12,288 $ 12,059
================= ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accrued expenses $ 0 $ 4,500
Accrued expenses - related party 4,160 4,160
----------------- ---------------
Total current liabilities 4,160 8,660
----------------- ---------------
Total Liabilities 4,160 8,660
----------------- ---------------
STOCKHOLDERS' EQUITY
Preferred stock, $0.0001 par value, authorized
10,000,000 shares:
none issued 0 0
Common stock, $0.0001 par value, authorized
50,000,000 shares:
2,054,000 issued and outstanding 206 206
Additional paid-in capital 20,134 20,134
Deficit accumulated during the development stage (12,212) (16,941)
----------------- ---------------
Total Stockholders' Equity 8,128 3,399
----------------- ---------------
Total Liabilities and Stockholders' Equity $ 12,288 $ 12,059
================= ===============
The accompanying notes are an integral part of the
financial statements.
F-2
Orange Productions, Inc.
(A Development Stage Enterprise)
Statements of Operations
Three Months Ended May 31,
(Unaudited)
Period from
May 20, 1998
(Inception)
through
2000 1999 May 31, 2000
----------------- ----------------- ---------------------
Revenues $ 0 $ 0 $ 0
----------------- ----------------- ---------------------
Expenses
General and administrative 229 384 950
Consulting fees - related party 0 0 1,165
Professional fees 4,500 0 11,917
Professional fees - related party 0 0 3,160
----------------- ----------------- ---------------------
Total expenses 4,729 384 17,192
----------------- ----------------- ---------------------
Loss from operations (4,729) (384) (17,192)
Other income (expense)
Interest income 0 68 251
----------------- ----------------- ---------------------
Net loss $ (4,729)$ (316)$ (16,941)
================= ================= =====================
Net loss per weighted average share, basic $ (0.01) (0.01)
================= =================
Weighted average number of shares 2,054,000 2,054,000
================= =================
The accompanying notes are an integral part of the
financial statements.
F-3
Orange Productions, Inc.
(A Development Stage Enterprise)
Statements of Stockholders' Equity
Period from May 20, 1998 (Inception)
through May 31, 2000
Deficit
Accumulated
Additional During the Total
Number of Preferred Common Paid-in Development Stockholders'
Shares Stock Stock Capital Stage Equity
------------ ------------ ---------- ------------ --------------- ---------------
BEGINNING BALANCE, May 20, 1998 0 $ 0 $ 0 $ 0 $ 0 $ 0
Year Ended February 28, 1999:
- ----------------------------
May 1998 - services ($0.0001/sh) 1,650,500 0 165 0 0 165
May 1998 - cash ($0.05/sh) 4,000 0 1 199 0 200
June 1998 - cash ($0.05/sh) 56,000 0 6 2,794 0 2,800
September 1998 - cash ($0.05/sh) 343,500 0 34 17,141 0 17,175
Net loss 0 0 0 0 (8,663) (8,663)
------------ ------------ ---------- ------------ --------------- ---------------
BALANCE, February 28, 1999 2,054,000 0 206 20,134 (8,663) 11,677
Year Ended February 29, 2000:
- ----------------------------
Net loss 0 0 0 0 (3,549) (3,549)
------------ ------------ ---------- ------------ --------------- ---------------
BALANCE, February 29, 2000 2,054,000 0 206 20,134 (12,212) 8,128
Three Months Ended May 31, 2000: (unaudited)
- -------------------------------
Net loss 0 0 0 0 (4,729) (4,729)
------------ ------------ ---------- ------------ --------------- ---------------
ENDING BALANCE, May 31, 2000
(unaudited) 2,054,000 $ 0 $ 206 $ 20,134 $ (16,941)$ 3,399
============ ============ ========== ============ =============== ===============
The accompanying notes are an integral part of the
financial statements.
F-4
Orange Productions, Inc.
(A Development Stage Enterprise)
Statements of Cash Flows Period
from May 20, 1998 (Inception) through May 31, 2000
(Unaudited)
Period from
May 20, 1998
(Inception)
through
2000 1999 May 31, 2000
---------------- -------------- ----------------
CASH FLOWS FROM DEVELOPMENT ACTIVITIES:
Net loss $ (4,729) $ (316) $ (16,941)
Adjustments to reconcile net loss to net cash used by
development activities
Stock issued in lieu of cash - related party 0 0 165
Changes in assets and liabilities
(Increase) decrease in accrued interest receivable 0 184 0
Increase (decrease) in accrued expenses 4,500 0 4,500
Increase in accrued expenses - related party 0 0 4,160
---------------- -------------- ----------------
Net cash used by development activities (229) (132) (8,116)
---------------- -------------- ----------------
CASH FLOW FROM INVESTING ACTIVITIES:
Increase in issuance of loan receivable 0 0 (10,000)
Repayment of loan receivable 0 10,000 10,000
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Net cash used by investing activities 0 10,000 0
---------------- -------------- ----------------
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 0 0 20,175
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Net cash provided by financing activities 0 0 20,175
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Net increase (decrease) in cash (229) 9,868 12,059
CASH, beginning of period 12,288 9,993 0
---------------- -------------- ----------------
CASH, end of period $ 12,059 $ 19,861 $ 12,059
================ ============== ================
The accompanying notes are an integral part of the
financial statements.
F-5
Orange Productions, Inc.
(A Development Stage Enterprise)
Notes to Financial Statements
(Information with respect to the three months
ended May 31, 2000 and 1999 is unaudited)
(1) Summary of Significant Accounting Principles
The Company Orange Productions, Inc. is a Florida chartered development
stage corporation which conducts business from its headquarters in Palm
Beach, Florida. The Company was incorporated on May 20, 1998.
The Company has not yet engaged in its expected operations. The
Company's future operations will be to provide graphic art services to
various consumer groups. Current activities include raising additional
equity and negotiating with potential key personnel and facilities.
There is no assurance that any benefit will result from such
activities. The Company will not receive any operating revenues until
the commencement of operations, but will nevertheless continue to incur
expenses until then.
The financial statements have been prepared in conformity with
generally accepted accounting principles. In preparing the financial
statements, management is required to make estimates and assumptions
that affect the reported amounts of assets and liabilities as of the
date of the statements of financial condition and revenues and expenses
for the period then ended. Actual results may differ significantly from
those estimates.
The following summarize the more significant accounting and reporting
policies and practices of the Company:
a) Start-up costs Costs of start-up activities, including organization
costs, are expensed as incurred, in accordance with Statement of
Position (SOP) 98-5.
b) Net loss per share Basic is computed by dividing the net loss by the
weighted average number of common shares outstanding during the period.
c) Interim financial information The financial statements for the three
months ended May 31, 2000 and 1999 are unaudited and include all
adjustments which in the opinion of management are necessary for fair
presentation, and such adjustments are of a normal and recurring
nature. The results for the three months are not indicative of a full
year results.
(2) Stockholders' Equity The Company has authorized 50,000,000 shares of
$0.0001 par value common stock and 10,000,000 shares of $0.0001 par
value preferred stock. Rights and privileges of the preferred stock are
to be determined by the Board of Directors prior to issuance. The
Company had 2,054,000 and 0 shares of common and preferred stock issued
and outstanding, respectively, at May 31, 2000. The Company, on May 20,
1998, issued 1,650,500 restricted shares to its Officers and Directors
for the value of services rendered in connection with the organization
of the Company. In May, 1998, the Company issued 4,000 shares at $0.05
per share for $200 in cash. In June 1998, the Company issued 56,000
shares of common stock at $0.05 per share for $2,800 in cash. In
September 1998, the Company issued 343,500 shares at $0.05 per share
for $17,175 in cash.
(3) Income Taxes Deferred income taxes (benefits) are provided for certain
income and expenses which are recognized in different periods for tax
and financial reporting purposes. The Company has net operating loss
carry- forwards for income tax purposes of approximately $16,900,
expiring $8,700, $3,500 and $4,700 at February 28, 2019, 2020 and 2021.
The amount recorded as deferred tax assets as of May 31, 2000 is
$2,500, which represents the amount of tax benefit of the loss
carryforward. The Company has established a valuation allowance against
this deferred tax asset, as the Company has no history of profitable
operations.
F-6
Orange Productions, Inc.
(A Development Stage Enterprise)
Notes to Financial Statements
(Information with respect to the three months
ended May 31, 2000 and 1999 is unaudited)
(4) Going Concern As shown in the accompanying financial statements, the
Company incurred a net loss of $16,900 for the period from May 20, 1998
(Inception) through May 31, 2000. The ability of the Company to
continue as a going concern is dependent upon commencing operations and
obtaining additional capital and financing. The financial statements do
not include any adjustments that might be necessary if the Company is
unable to continue as a going concern. The Company is currently seeking
financing to allow it to begin its planned operations.
(5) Related parties
Counsel to the Company indirectly owns 114,500 shares of the Company
through the 100% sole ownership of the common stock of another company
that has invested in the Company.
As of May 31, 2000, the Company owed legal counsel for services
performed in the amount of $3,160, and owed the former Vice President
and former Director of the Company $1,000 for consulting services
rendered. These amounts are presented in Accrued expenses - related
party.
F-7
Item 6. Management's Discussion and Analysis or Plan of Operation
Since its inception, the Company has conducted minimal business
operations except for organizational and capital raising activities. The Company
has not realized any revenues since its inception. As a result, from inception
May 1998 through May 31, 2000 the Company generated cumulative net losses of
$16,941. Due to the Company's limited operating history and limited resources,
among other factors, there can be no assurance that profitability or significant
revenues on a quarterly or annual basis will occur in the future.
If the Company is unable to generate sufficient revenue from operations
to implement its expansion plans, management intends to explore all available
alternatives for debt and/or equity financing, including but not limited to
private and public securities offerings. The Company has set a goal of $500,000
in business revenues in the next twelve (12) months to satisfy cash requirements
and to justify expansion plans.
Mr. Peroulas, at least initially, will be solely responsible for
developing OPI's business. However, at such time, if ever, as sufficient
operating capital becomes available, management expects to employ additional
staffing and marketing personnel. In addition, the Company expects to
continuously engage in market research in order to monitor new market trends,
seasonality factors and other critical information deemed relevant to OPI's
business.
In addition, at least initially, the Company intends to operate out of
the home of Mr. Peroulas. Thus, it is not anticipated that OPI will lease or
purchase office space in the foreseeable future. OPI may in the future establish
its own facilities and/or acquire equipment if the necessary capital becomes
available.
Results of Operations - Full Quarters Ending May 31, 1999 and 2000
Revenues
Revenues for the three month period ended May 31, 1999 was $ 0 and for
the three month period ending May 31, 2000 was $ 0.
Operating Expenses
Operating Expenses for the three (3) months ending May 31, 2000 were
$4,729 versus $384 for the three (3) months ending May 31, 1999. Net loss was
$4,729 and $384 respectively. This change resulted from an increase in
organizational expenses related primarily to professional fees.
Assets and Liabilities
Assets were $12,059 as of May 31, 2000. As of May 31, 2000, assets
consisted entirely of cash. Liabilities were $8,660 May 31, 2000. As of May 31,
2000, liabilities consisted primarily of accrued expenses.
Stockholders' Equity
Stockholders' equity was $3,399 as of May 31, 2000. The Company had
2,054,00 shares of common stock issued and outstanding at May 31, 2000.
10
Financial Condition, Liquidity and Capital Resources
At May 31, 2000 the Company had cash on hand of $12,059.
Year 2000 Compliance
The Year 2000 Issue is the result of potential problems with computer
systems or any equipment with computer chips that use dates where the date has
been stored as just two digits (e.g. 98 for 1998). On January 1, 2000, any clock
or date recording mechanism including date sensitive software which uses only
two digits to represent the year, may have recognized the date using 00 as the
year 1900 rather than the year 2000. This may have resulted in a system failure
or miscalculations causing disruption of operations, including among other
things, a temporary inability to process transactions, send invoices, or engage
in similar activities.
The Company has confirmed that its systems are Year 2000 Compliant. It
has experienced no Y2K problems to date.
The Company believes that it has disclosed all required information
relative to Year 2000 issues relating to its business and operations. However,
there can be no assurance that the systems of other companies on which the
Company's systems rely also will be timely converted or that any such failure to
convert by another company would not have an adverse affect on the Company's
systems.
Forward-Looking Statements
This Form 10-QSB includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. All statements, other
than statements of historical facts, included or incorporated by reference in
this Form 10-QSB which address activities, events or developments which the
Company expects or anticipates will or may occur in the future, including such
things as future capital expenditures (including the amount and nature thereof),
finding suitable merger or acquisition candidates, expansion and growth of the
Company's business and operations, and other such matters are forward-looking
statements. These statements are based on certain assumptions and analyses made
by the Company in light of its experience and its perception of historical
trends, current conditions and expected future developments as well as other
factors it believes are appropriate in the circumstances. However, whether
actual results or developments will conform with the Company's expectations and
predictions is subject to a number of risks and uncertainties, general economic
market and business conditions; the business opportunities (or lack thereof)
that may be presented to and pursued by the Company; changes in laws or
regulation; and other factors, most of which are beyond the control of the
Company. Consequently, all of the forward-looking statements made in this Form
10-QSB are qualified by these cautionary statements and there can be no
assurance that the actual results or developments anticipated by the Company
will be realized or, even if substantially realized, that they will have the
expected consequence to or effects on the Company or its business or operations.
The Company assumes no obligations to update any such forward-looking
statements.
11
PART II
Item 1. Legal Proceedings.
The Company knows of no legal proceedings to which it is a party or to
which any of its property is the subject which are pending, threatened or
contemplated or any unsatisfied judgments against the Company.
Item 2. Changes in Securities and Use of Proceeds
None
Item 3. Defaults in Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted during the quarter ending May 31, 2000, covered
by this report to a vote of the Company's shareholders, through the solicitation
of proxies or otherwise.
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) The exhibits required to be filed herewith by Item 601 of Regulation
S-B, as described in the following index of exhibits, are incorporated
herein by reference, as follows:
Exhibit No. Description
- ----------------------------------------------------------------------
3(i).1 Articles of Incorporation of OPI effective May 20, 1998
3(ii).1 Bylaws of OPI
27.1 * Financial Data Schedule
- ----------------
(1) Incorporated herein by reference to the Company's Registration Statement on
Form 10-SB.
* Filed herewith
(b) No Reports on Form 8-K were filed during the quarter ended May 31,
2000.
12
SIGNATURES
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In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
ORANGE PRODUCTIONS, INC..
(Registrant)
Date: July 24, 2000 By: /s/ Sam Peroulas
--------------------------------------
Sam Peroulas, President, Secretary,
Chief Executive Officer & Director
13