UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2008
|_| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from ____ to ____
Commission file number 333-29295
RETROSPETTIVA, INC.
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(Exact name of registrant as specified in its charter)
California 95-4298051
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
112 West 9th Street, Suite 518, Los Angeles, CA 90015
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(Address of principal executive offices) (Zip Code)
(213) 623-9216
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(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
None N/A
Title of each class Name of each exchange on which registered
Securities registered pursuant to Section 12(g) of the Act:
No Par Value Common Stock
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(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 |_| No [X]
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. Yes [X] No |_|
Indicate by check mark whether the issuer (1) filed all reports required to be
filed by Sections 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 checkmark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (ss. 229.405 of this chapter) 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-KS
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 |_| 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 [_]
The aggregate market value of the Common Stock of Retrospettiva, Inc. by
non-affiliates as of the last business day of the registrant's most recently
completed second fiscal quarter was $152,000.
As of April 13, 2009, there were 14,425,903 shares of Common Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE: None.
TABLE OF CONTENTS
PART I
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ITEM 1: BUSINESS 1
ITEM 1A RISK FACTORS 6
ITEM 1B UNRESOLVED STAFF COMMENTS 6
ITEM 2: PROPERTIES 6
ITEM 3: LEGAL PROCEEDINGS 7
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 7
PART II
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ITEM 5: MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
PURCHASES OF EQUITY SECURITIES 7
ITEM 6: SELECTED FINANCIAL DATA 8
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION 8
ITEM 8: FINANCIAL STATEMENTS 12
ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE 24
ITEM 9A(T): CONTROLS AND PROCEDURES 24
ITEM 9B: OTHER INFORMATION 25
PART III
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ITEM 10: DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE 26
ITEM 11: EXECUTIVE COMPENSATION 27
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS 28
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
DIRECTOR INDEPENDENCE 28
ITEM 14: PRINCIPAL ACCOUNTING FEES AND SERVICES 29
PART IV
ITEM 15: EXHIBITS 29
SIGNATURES 30
ADDITIONAL INFORMATION
Descriptions of agreements or other documents contained in this report are
intended as summaries and are not necessarily complete. Please refer to the
agreements or other documents filed or incorporated herein by reference as
exhibits. Please see the exhibit index at the end of this report for a complete
list of those exhibits.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report contains "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. These statements are subject
to risks and uncertainties and are based on the beliefs and assumptions of
management and information currently available to management. The use of words
such as "believes", "expects", "anticipates", "intends", "plans", "estimates",
"should", "likely" or similar expressions, indicates a forward-looking
statement.
The identification in this report of factors that may affect future
performance and the accuracy of forward-looking statements is meant to be
illustrative and by no means exhaustive. All forward-looking statements should
be evaluated with the understanding of their inherent uncertainty.
Factors that could cause actual results to differ materially from those
expressed or implied by forward-looking statements include, but are not limited
to:
o The worldwide economic situation;
o Any change in interest rates or inflation;
o The willingness and ability of third parties to honor their
contractual commitments;
o The Company's ability to raise additional capital, as it may be
affected by current conditions in the stock market and competition for
risk capital;
o The Company's capital costs, as they may be affected by delays or cost
overruns;
o The Company's costs of production;
o Environmental and other regulations, as the same presently exist or
may later be amended;
o The Company's ability to identify, finance and integrate any future
acquisitions; and
o The volatility of the Company's stock price.
PART I
ITEM 1. BUSINESS.
Overview
Retrospettiva, Inc. was organized under the laws of the State of California in
November, 1990 for the purpose of manufacturing and importing textile products,
including finished garments and fabrics. Our manufacturing facilities and
inventories were primarily located in Europe. Our European operations were based
in and around Macedonia. On July 2, 2001, we announced that the civil war in
Macedonia rendered it impossible to continue operations. We ceased operations
and liquidated all of our assets.
From 2002 until 2006, the Company was dormant. Effective October 11, 2006
(commencement of new development stage), the Company commenced activities to
become current in reporting with the SEC with the intention to become a publicly
trading company. Retrospettiva intends to evaluate, structure and complete a
merger with, or acquisition of, one or a small number of private companies,
partnerships or sole proprietorships. Retrospettiva may seek to acquire a
controlling interest in one or more private companies in contemplation of later
completing an acquisition.
Retrospettiva believes that there is a demand by non-public corporations for
shell corporations that have a public distribution of securities, such as
Retrospettiva. Retrospettiva believes that demand for shell corporations has
increased dramatically since the Securities and Exchange Commission, or the SEC,
imposed additional requirements upon "blank check" companies pursuant to Reg.
419 of the Securities Act of 1933, as amended. According to the SEC, Rule 419
was designed to strengthen regulation of securities offerings by blank check
companies, which Congress has found to have been a common vehicle for fraud and
manipulation in the penny stock market. See Securities Act Releases No. 6891
(April 17, 1991), 48 SEC Docket 1131 and No. 6932 (April 13, 1992) 51 Docket
0382, SEC Docket 0382. The foregoing regulation has substantially decreased the
number of "blank check" offerings filed with the SEC, and as a result has
stimulated an increased demand for shell corporations. While Retrospettiva has
made the foregoing assumption, there is no assurance that the same is accurate
or correct and, accordingly, no assurance that Retrospettiva will merge with or
acquire an existing private entity.
General
Retrospettiva proposes to seek, investigate and, if warranted, acquire an
interest in one or more business opportunity ventures. As of the date hereof,
Retrospettiva has no business opportunities or ventures under contemplation for
acquisition or merger but proposes to investigate potential opportunities with
investors or entrepreneurs with a concept which has not yet been placed in
operation, or with firms which are developing companies. Retrospettiva may seek
established businesses which may be experiencing financial or operational
difficulties and are in need of the limited additional capital Retrospettiva
could provide. After Retrospettiva has completed a merger or acquisition, the
surviving entity would be Retrospettiva; however, management from the acquired
entity would in all likelihood be retained to operate Retrospettiva. Due to the
absence of capital available for investment by Retrospettiva, the types of
business seeking to be acquired by Retrospettiva will invariably be small and
high risk types of businesses. In all likelihood, a business opportunity will
involve the acquisition of or merger with a corporation which does not need
additional cash but which desires to establish a public trading market for its
common stock.
1
Retrospettiva does not propose to restrict its search for investment
opportunities to any particular industry or geographical location and may,
therefore, engage in essentially any business, anywhere, to the extent of its
limited resources.
It is anticipated that business opportunities will be available to Retrospettiva
and sought by Retrospettiva from various sources throughout the United States,
including its officers and directors, professional advisors such as attorneys
and accountants, securities broker dealers, venture capitalists, members of the
financial community, other businesses and others who may present solicited and
unsolicited proposals. Management believes that business opportunities and
ventures will become available to it due to a number of factors, including,
among others: (1) management's willingness to enter into unproven, speculative
ventures; (2) management's contacts and acquaintances; and (3) Retrospettiva's
flexibility with respect to the manner in which it may structure potential
financing, mergers or acquisitions. However, there is no assurance that
Retrospettiva will be able to structure, finance, merge with or acquire any
business opportunity or venture.
Operation of Retrospettiva
Retrospettiva intends to search throughout the United States for a merger or
acquisition candidate; however, because of its lack of capital, Retrospettiva
believes that the merger or acquisition candidate will be conducting business
within limited geographical area.
Retrospettiva's executive officers will seek acquisition/merger candidates or
orally contact individuals or broker dealers and advise them of the availability
of Retrospettiva as an acquisition candidate. Retrospettiva's executive officers
will review material furnished to them by the proposed merger or acquisition
candidates and will ultimately decide if a merger or acquisition is in the best
interests of Retrospettiva and its shareholders.
Retrospettiva may employ outside consultants until a merger or acquisition
candidate has been targeted by Retrospettiva, however, management believes that
it is impossible to consider the criteria that will be used to hire such
consultants. While Retrospettiva may hire independent consultants, it has not
considered any criteria regarding their experience, the services to be provided,
or the term of service. As of the date hereof, Retrospettiva has not had any
discussions with any consultants and there are no agreements or understandings
with any consultants. Other than as disclosed herein, there are no other plans
for accomplishing the business purpose of Retrospettiva.
Selection of Opportunities
The analysis of new business opportunities will be undertaken by or under the
supervision of Retrospettiva's executive officers and directors who are not
professional business analysts and have had little previous training or
experience in business analysis. In as much as Retrospettiva will have no funds
available to it in its search for business opportunities and ventures,
Retrospettiva will not be able to expend significant funds on a complete and
exhaustive investigation of such business or opportunity. Retrospettiva will,
however, investigate, to the extent believed reasonable by its management, such
potential business opportunities or ventures.
2
As part of Retrospettiva's investigation, representatives of Retrospettiva will
meet personally with management and key personnel of the firm sponsoring the
business opportunity, visit and inspect plants and facilities, obtain
independent analysis or verification of certain information provided, check
references of management and key personnel, and conduct other reasonable
measures, to the extent of Retrospettiva's limited financial resources and
management and technical expertise.
Prior to making a decision to recommend to shareholders participation in a
business opportunity or venture, Retrospettiva will generally request that it be
provided with written materials regarding the business opportunity containing
such items as a description of products, services and company history,
management resumes, financial information, available projections with related
assumptions upon which they are based, evidence of existing patents, trademarks
or service marks or rights thereto, current and proposed forms of compensation
to management, a description of transactions between the prospective entity and
its affiliates during relevant periods, a description of current and required
facilities, an analysis of risks and competitive conditions, and other
information deemed relevant.
It is anticipated that the investigation of specific business opportunities and
the negotiation, drafting and execution of relevant agreements, disclosure
documents and other instruments will require substantial management time and
attention and costs for accountants, attorneys and others. Retrospettiva's
executive officers anticipate funding Retrospettiva's operations, including
providing funds necessary to search for acquisition candidates, until an
acquisition candidate is found, without regard to the amount involved.
Accordingly, no alternative cash resources have been explored.
Retrospettiva will have unrestricted flexibility in seeking, analyzing and
participating in business opportunities. In its efforts, Retrospettiva will
consider the following kinds of factors:
o Potential for growth, indicated by new technology, anticipated market
expansion or new products;
o Competitive position as compared to other firms engaged in similar
activities;
o Strength of management;
o Capital requirements and anticipated availability of required funds
from future operations, through the sale of additional securities,
through joint ventures or similar arrangements or from other sources;
and
o Other relevant factors.
Potentially available business opportunities may occur in many different
industries and at various stages of development, all of which will make the task
of comparative investigation and analysis of such business opportunities
extremely difficult and complex. Potential investors must recognize that due to
Retrospettiva's limited capital available for investigation and management's
limited experience in business analysis, Retrospettiva may not discover or
adequately evaluate adverse facts about the opportunity to be acquired.
Retrospettiva is unable to predict when it may participate in a business
opportunity. It expects, however, that the analysis of specific proposals and
the selection of a business opportunity may take several months or more.
Retrospettiva does not plan to raise any capital at the present time, by private
placements; public offerings, pursuant to Regulation S promulgated under the
Securities Act, or by any means whatsoever. Further, there are no plans,
proposals, arrangements or understandings with respect to the sale or issuance
of additional securities prior to the identification of an acquisition or merger
candidate.
3
Form of Merger or Acquisition
The manner in which Retrospettiva participates in an opportunity will depend
upon the nature of the opportunity, the respective needs and desires of
Retrospettiva and the merger or acquisition candidate, and the relative
negotiating strength of Retrospettiva and such merger or acquisition candidate.
The exact form or structure of Retrospettiva's participation in a business
opportunity or venture will be dependent upon the needs of the particular
situation. Retrospettiva's participation may be structured as an asset purchase,
a lease, a license, a joint venture, a partnership, a merger or an acquisition
of securities.
As set forth above, Retrospettiva may acquire its participation in a business
opportunity through the issuance of common stock or other securities in
Retrospettiva. Although the terms of any such transaction cannot be predicted,
it should be noted that in certain circumstances the criteria for determining
whether or not an acquisition is a so-called "tax free" reorganization under
Section 368(a)(1) of the Internal Revenue Code of 1954, as amended, may depend
upon the issuance to the shareholders of the acquired company of at least 80% of
the common stock of the combined entities immediately following the
reorganization. If a transaction were structured to take advantage of these
provisions rather than other "tax free" provisions provided under the Internal
Revenue Code, all prior shareholders may, in such circumstances, retain 20% or
less of the total issued and outstanding common stock. If such a transaction
were available to Retrospettiva, it will be necessary to obtain shareholder
approval to effectuate a reverse stock split or to authorize additional shares
of common stock prior to completing such acquisition. This could result in
substantial additional dilution to the equity of those who were shareholders of
Retrospettiva prior to such reorganization. Further, extreme caution should be
exercised by any investor relying upon any tax benefits in light of the proposed
new tax laws. It is possible that no tax benefits will exist at all. Prospective
investors should consult their own legal, financial and other business advisors.
The present management and shareholders of Retrospettiva will in all likelihood
not have control of a majority of the voting shares of Retrospettiva following a
reorganization transaction. In fact, it is probable that the shareholders of the
acquired entity will gain control of Retrospettiva. The terms of sale of the
shares presently held by management of Retrospettiva may not be afforded to
other shareholders of Retrospettiva. As part of any transaction, Retrospettiva's
directors may resign and new directors may be appointed without any vote by the
shareholders.
Retrospettiva has an unwritten policy that it will not acquire or merge with a
business or company in which Retrospettiva's management or their affiliates or
associates directly or indirectly have an ownership interest. Management is not
aware of any circumstances under which the foregoing policy will be changed and
management, through their own initiative, will not change said policy.
Pursuant to regulations promulgated under the Securities Exchange Act of1934, as
amended, Retrospettiva will be required to obtain and file with the SEC audited
financial statements of an acquisition candidate not later than 60 days from the
date the Form 8-K is due at the SEC disclosing the merger or acquisition.
Rights of Dissenting Shareholders
Under the Colorado Business Corporation Act, a business combination typically
requires the approval of a majority of the outstanding shares of both
participating companies. Shareholders who vote against any business combination
in certain instances may be entitled to dissent and to obtain payment for their
shares pursuant to Sections 7-113-102 and 7-113-103 of the Colorado Business
Corporation Act. The requirement of approval of Retrospettiva's shareholders in
any business combination is limited to those transactions identified as a merger
or a consolidation. A business combination identified as a share exchange under
which Retrospettiva would be the survivor does not require the approval of
Retrospettiva's shareholders, nor does it entitle shareholders to dissent and
obtain payment for their shares. Accordingly, unless the acquisition is a
statutory merger, requiring shareholder approval, Retrospettiva will not provide
shareholders with a disclosure document containing audited or unaudited
financial statements, prior to such acquisition.
4
Prior to any business combination for which shareholder approval is required,
Retrospettiva intends to provide its shareholders complete disclosure
documentation concerning the business opportunity or target company and its
business. Such disclosure will in all likelihood be in the form of a proxy
statement which will be distributed to shareholders at least 20 days prior to
any shareholder meeting.
None of Retrospettiva's officers, directors, promoters, their affiliates or
associates have had any preliminary contact or discussions with, and there are
no present plans, proposals, arrangements or understandings with, any
representatives of the owners of any business or company regarding the
possibility of an acquisition or merger transaction contemplated in this report.
Not an "Investment Adviser"
Retrospettiva is not an "investment adviser" under the Federal Investment
Advisers Act of 1940, which classification would involve a number of negative
considerations. Accordingly, Retrospettiva will not furnish or distribute
advice, counsel, publications, writings, analysis or reports to anyone relating
to the purchase or sale of any securities within the language, meaning and
intent of Section 2(a)(11) of the Investment Advisers Act (15 U.S.C.
80b2(a)(11)).
Not an "Investment Company"
Retrospettiva may become involved in a business opportunity through purchasing
or exchanging the securities of such business. Retrospettiva does not intend,
however, to engage primarily in such activities and is not registered as an
"investment company" under the Federal Investment Company Act of 1940.
Retrospettiva believes such registration is not required.
Retrospettiva must conduct its activities so as to avoid becoming inadvertently
classified as a transient "investment company" under the Federal Investment
Company Act, which classification would affect Retrospettiva adversely in a
number of respects. Section 3(a) of the Investment Company Act provides the
definition of an "investment company" which excludes an entity which does not
engage primarily in the business of investing, reinvesting or trading in
securities, or which does not engage in the business of investing, owning,
holding or trading "investment securities" (defined as "all securities other
than United States government securities or securities of majority-owned
subsidiaries",) the value of which exceeds 40% of the value of its total assets
(excluding government securities, cash or cash items). Retrospettiva intends to
implement its business plan in a manner which will result in the availability of
this exemption from the definition of "investment company." Retrospettiva
proposes to engage solely in seeking an interest in one or more business
opportunities or ventures.
5
Effective January 14, 1981, the SEC adopted Rule 3a-2 which deems that an issuer
is not engaged in the business of investing, reinvesting, owning, holding or
trading in securities for purposes of Section 3(a)(1) cited above if, during
period of time not exceeding one year, the issuer has a bona fide intent to be
engaged primarily, or as soon as reasonably possible (in any event by the
termination of a one year period of time), in a business other than that of
investing, reinvesting, owning, holding or trading in securities and such intent
is evidenced by Retrospettiva's business activities and appropriate resolution
of Retrospettiva's Board of Directors duly adopted and duly recorded in the
minute book of Retrospettiva. The Rule 3a-2 "safe harbor" may not be relied on
more than one single time.
Reports to Security Holders.
Retrospettiva is subject to reporting obligations under the Exchange Act. These
obligations include an annual report under cover of Form 10-K, with audited
financial statements, unaudited quarterly reports and the requisite proxy
statements with regard to annual shareholder meetings. The public may read and
copy any materials Retrospettiva files with the SEC at the SEC's Public
Reference Room at 100 F Street, NE, Washington, DC 20549. The public may obtain
information of the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0030.The SEC maintains an Internet site (http://www.sec.gov) that
contains reports, proxy and information statements and other information
regarding issuers that file electronically with the SEC.
Office
Our principal executive offices are located at 112 West 9th Street, Suite 518,
Los Angeles 90015, and our telephone number is (213) 623-9216. We share office
space with our President. Our office needs are minimal and we do not pay rent
for the shared office space. We expect to share office space with our officers
or directors until we complete a business combination.
Employees
We currently have no salaried employees and none of our officers, directors or
principle stockholders are currently receiving any compensation for their
services. Management expects to use consultants, attorneys and accountants as
necessary, and does not anticipate a need to engage any full-time employees so
long as it is seeking and evaluating business opportunities. The need for
employees and their availability will be addressed in connection with the
decision whether or not to acquire or participate in a specific business
opportunity.
ITEM 1A. RISK FACTORS
Not required.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
Retrospettiva owns no property.
Retrospettiva uses the offices of its President for its minimal office facility
needs for no consideration. No provision for these costs has been provided since
it has been determined that they are immaterial.
6
ITEM 3. LEGAL PROCEEDINGS
We are not currently subject to any legal proceedings, and to the best of our
knowledge, no such proceeding is threatened, the results of which would have a
material impact on our results of operation or financial condition. Nor, to the
best of our knowledge, are any of our officers or directors involved in any
legal proceedings in which we are an adverse party.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5. MARKET FOR COMMON EQUITY. RELATED STOCKHOLDER MATTERS AND PURCHASES OF
EQUITY SECURITIES
Market Information
Information about our common stock is reported by Pink Sheets LLC at
www.pinksheets.com. Pink Sheets LLC is a provider of trading systems, pricing,
and financial information for over the counter (OTC) markets. Pink Sheets LLC
provides broker-dealers, market data providers, issuers and investors with
software and information services that improve the transparency and efficiency
of the OTC markets. The table below sets forth the high and low prices of our
common stock as reflected by Pink Sheets LLC for the period from January 1, 2007
to date. Quotations represent prices between dealers, do not include retail
markups, markdowns or commissions, and do not necessarily represent prices at
which actual transactions were effected.
Year Ending
December 31, 2009 High Low
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First Quarter $ 0.025 $ 0.020
December 31, 2008
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First Quarter $ 0.030 $ 0.010
Second Quarter $ 0.080 $ 0.021
Third Quarter $ 0.080 $ 0.050
Fourth Quarter $ 0.070 $ 0.025
December 31, 2007
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First Quarter $ 0.006 $ 0.006
Second Quarter $ 0.006 $ 0.006
Third Quarter $ 0.110 $ 0.010
Fourth Quarter $ 0.030 $ 0.015
On April 9, 2009, the "best bid" and "best ask" quotations by Pink Sheets LLC
were $0.020 and $0.020, respectively, and no trades were reported.
Holders
As of April 13, 2009, a total of 14,425,903 shares of our common stock were
outstanding and there were approximately 72 holders of record.
7
Penny Stock Rules
Due to the price of our common stock, as well as the fact that we are not listed
on Nasdaq or a national securities exchange, our stock is characterized as
"penny stocks" under applicable securities regulations. Our stock will therefore
be subject to rules adopted by the Securities and Exchange Commission ("SEC")
regulating broker-dealer practices in connection with transactions in penny
stocks. The broker or dealer proposing to effect a transaction in a penny stock
must furnish his customer a document containing information prescribed by the
SEC and obtain from the customer an executed acknowledgment of receipt of that
document. The broker or dealer must also provide the customer with pricing
information regarding the security prior to the transaction and with the written
confirmation of the transaction. The broker or dealer must also disclose the
aggregate amount of any compensation received or receivable by him in connection
with such transaction prior to consummating the transaction and with the written
confirmation of the trade. The broker or dealer must also send an account
statement to each customer for which he has executed a transaction in a penny
stock each month in which such security is held for the customer's account. The
existence of these rules may have an effect on the price of our stock, and the
willingness of certain brokers to effect transactions in our stock.
Transfer Agent
We have appointed Corporate Stock Transfer, Inc. ("CST") as the transfer agent
for our common stock. The principal office of CST is located at 3200 Cherry
Creek Drive South, Suite 430, Denver, CO 80209 and its telephone number is (303)
282-4800.
Dividend Policy
We have never declared or paid dividends on our common stock. Payment of future
dividends, if any, will be at the discretion of our Board of Directors after
taking into account various factors, including the terms of any credit
arrangements, our financial condition, operating results, current and
anticipated cash needs and plans for expansion. At the present time, we intend
to retain any earning in our business, and therefore do not anticipate paying
dividends in the foreseeable future.
Recent Sales of Unregistered Securities; Use of Proceeds From Unregistered
Securities
None.
ITEM 6. SELECTED FINANCIAL DATA
Not required.
ITEM 7. MANAGEMENTS'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION
Introduction
The following discussion updates our plan of operation for the next twelve
months. This discussion also analyzes our financial condition at December 31,
2008 and compares it to our financial condition at December 31, 2007. This
discussion summarizes the results of our operations for the year ended December
31, 2008 and compares those results to the year ended December 31, 2007.
Plan of Operation
Retrospettiva, Inc. (the "Company") was organized under the laws of the State of
California in November, 1990. Prior to 2002, our business was to manufacture and
import textile products, including both finished garments and fabrics. Our
manufacturing facilities and inventories were primarily located in Europe. Our
European operations were based in and around Macedonia. On July 2, 2001, we
announced that the civil war in Macedonia rendered it impossible to continue
operations. We ceased operating and liquidated all of our assets.
8
On August 2, 2004, the Company was terminated, by administrative action of the
State of California as a result of non-filing of required documents with the
State of California. Effective February 15, 2007, the Company reinstated it
charter.
We have updated our affairs and become current in our various reporting
obligations. We intend to combine the Company with another entity in a merger,
acquisition, or similar transaction and are seeking potential candidates. Our
plan is to evaluate prospects, structure a transaction, and ultimately combine
with another entity. We are unable, at this time, to predict when, if ever, our
objectives will be achieved.
Capital Investment
We do not anticipate any significant capital expenditures for at least the next
twelve months.
Liquidity and Capital Resources
As of December 31, 2008, we had a working capital deficit of $(139,297). We had
no current assets and current liabilities were $139,297. This represents a
$36,277 increase in the deficit from the working capital deficit of $(103,020)
reported at December 31, 2007. During the year ended December 31, 2008, our
working capital deficit increased because of costs incurred to revive our
business and to meet the ongoing reporting requirements for a public company.
These costs were funded by an increase in current liabilities.
On September 22, 2008, our stockholders approved an increase in authorized
shares of no par value common stock from 15,000,000 shares to 100,000,000
shares. The increase in the number of authorized shares of common stock may
assist us in future financing and will provide sufficient authorized shares of
common stock to permit conversion of our shares of preferred stock, and our
convertible note payable into common stock.
We will need additional funding to achieve our ultimate goals. We do not believe
we are a candidate for conventional debt financing and in the past we have
relied on loans and advances from stockholders to fund our operations; however
we have no guarantee that our stockholders will be willing and able to fund all
of our future financing needs.
We entered into a note payable agreement with one of our stockholders effective
July 2, 2007. The note provides for borrowings up to the principal amount of
$64,871, is uncollateralized, and bears interest at an annual rate of 8%. We
issued 945,987 shares of our common stock as additional consideration for the
loan agreement. During 2007 we received proceeds of $64,871 under this
agreement. The stockholder has agreed to extend the due date of the note from
June 30, 2008 to June 30, 2009.
On November 14, 2007, we entered into a loan agreement with our President and a
stockholder. The principal maximum amount that can be borrowed is $133,333. The
loan is due on demand, is uncollateralized, bears interest at 8% per annum, and
is convertible into restricted common stock at $0.10 per share. We issued
10,000,000 shares of common stock as additional consideration for the note
payable. As of December 31, 2008, we had borrowed $52,288 under this arrangement
and the amount available for future borrowings was $81,045.
9
Our President has periodically advanced funds to us to meet our working capital
needs. As of December 31, 2008, we owe our President $5,334 for advances which
are uncollateralized, non-interest bearing and due on demand. During 2008 we
incurred other obligations and liabilities which are reflected in the
accompanying balance sheet as accounts payable and accrued liabilities.
Net cash used in operating activities was $24,457 during the year ended December
31, 2008, compared to $82,479 used during 2007. For both years, all of our
expenses were funded by related parties.
Results of Operations - Year Ended December 31, 2008 Compared to Year Ended
December 31, 2007
We are considered a development stage company for accounting purposes, since we
are working to revive the Company and to implement our plan of operations. We
are unable to predict with any degree of accuracy when this classification will
change. We expect to incur losses until such time, if ever, we begin generating
revenue from operations.
For the year ended December 31, 2008, we recorded a net loss of $(36,277), or
$(0.00) per share, compared to net income for 2007 of $91,889 or $0.02 per
share. In neither period did we report any revenue.
During 2007, we recorded a gain from the settlement of litigation. We negotiated
a settlement with Emeryworld, a company which, on May 20, 2002, obtained a
judgment against us in the amount of $165,060. On October 26, 2007, we reached a
settlement agreement with them under which they agreed to accept a cash payment
of $27,750. The settlement resulted in a gain of $137,310.
Operating expenses decreased to $27,044 for the year ended December 31, 2008,
compared to $43,655 for 2007, a difference of $16,611. Legal fees decreased by
$17,674 from 2007 to 2008 because substantial fees were incurred during 2007 to
defend a stockholder lawsuit which was settled during 2007. No litigation
occurred during 2008. Consulting fees of $8,000 were incurred in 2007 related to
reactivation of the company and commencing activities. They were paid in the
form of stock issued for entering a note payable agreement. Also during 2007, we
incurred fees to engage our stock transfer agent. Accounting and auditing fees
increased by $17,400 during 2008 as we updated our affairs and became current in
our various reporting obligations. During both years, we incurred taxes and
governmental fees associated with our corporate status.
Off-Balance Sheet Arrangements
As of and subsequent to December 31, 2008, we have no off-balance sheet
arrangements.
Forward-Looking Statements
This Form 10-K contains or incorporates by reference "forward-looking
statements," as that term is used in federal securities laws, about our
financial condition, results of operations and business. These statements
include, among others:
- statements concerning the benefits that we expect will result from
our business activities and results of business development that we
contemplate or have completed, such as increased revenues; and
10
- statements of our expectations, beliefs, future plans and strategies,
anticipated developments and other matters that are not historical
facts.
These statements may be made expressly in this document or may be incorporated
by reference to other documents that we will file with the SEC. You can find
many of these statements by looking for words such as "believes," "expects,"
"anticipates," "estimates" or similar expressions used in this report or
incorporated by reference in this report.
These forward-looking statements are subject to numerous assumptions, risks and
uncertainties that may cause our actual results to be materially different from
any future results expressed or implied in those statements. Because the
statements are subject to risks and uncertainties, actual results may differ
materially from those expressed or implied. We caution you not to put undue
reliance on these statements, which speak only as of the date of this report.
Further, the information contained in this document or incorporated herein by
reference is a statement of our present intention and is based on present facts
and assumptions, and may change at any time and without notice, based on changes
in such facts or assumptions.
11
ITEM 8. FINANCIAL STATEMENTS
Index to Financial Statements:
Report of Independent Registered Public Accounting Firm
Balance Sheets as of December 31, 2008 and 2007
Statements of Operations for the years ended December 31, 2008 and 2007,
and for the Development Period from October 11, 2006
to December 31, 2008
Statement of Changes in Stockholders' (Deficit) for the Development Period
from October 11, 2006 to December 31, 2008
Statements of Cash Flows for the years ended December 31, 2008 and
2007, and for the Development Period from October 11, 2006 to
December 31, 2008
Notes to Financial Statements
12
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors and Shareholders
Retrospettiva, Inc.
Los Angeles, California
We have audited the accompanying balance sheets of Retrospettiva, Inc. as of
December 31, 2008 and 2007 and the related statements of operations, changes in
stockholders' (deficit) and cash flows for the years ended December 31, 2008 and
2007, and for the period from October 11, 2006 (commencement of development
stage) to December 31, 2008. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based upon our audits.
We conducted our audits in accordance with the 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. The Company is not required to have, nor were we
engaged to perform, an audit of its internal control over financial reporting.
Our audit included consideration of internal control over financial reporting as
a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company's internal control over financial reporting.
Accordingly, we express no such opinion. 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 Retrospettiva, Inc. as of
December 31, 2008 and 2007, and the results of its operations and its cash flows
for the years ended December 31, 2008 and 2007 and for the period from October
11, 2006 (commencement of development stage) to December 31, 2008, 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 described in Note 2, the Company
has no business operations and has negative working capital and stockholders'
(deficits), which raise substantial doubt about its ability to continue as a
going concern. Management's plan in regard to this matter is also discussed in
Note 2. The financial statements do not include any adjustments that might
result from the outcome of these uncertainties.
/s/ Schumacher & Associates, Inc.
- ---------------------------------
April 13, 2009
Denver, Colorado
13
RETROSPETTIVA, INC.
(A Development Stage Company)
BALANCE SHEETS
December 31, December 31,
2008 2007
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ -- $ 500
----------- -----------
Total current assets $ -- $ 500
=========== ===========
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Current liabilities:
Accounts payable $ 6,395 $ 2,418
Accrued expenses 800 1,600
Advances payable - officer 5,334 5,613
Notes payable - stockholders 117,159 92,923
Accrued interest - stockholders 9,609 966
----------- -----------
Total current liabilities 139,297 103,520
----------- -----------
Commitments and contingencies (Notes 1, 2, 3, 5 and 6)
Stockholders' (deficit):
Preferred stock - no par value, authorized 1,000,000 shares:
No shares issued or outstanding -- --
Common stock - no par value, 100,000,000 shares authorized:
14,425,903 shares issued and outstanding 6,903,766 6,903,766
Additional paid-in capital 230,000 230,000
Accumulated deficit through October 11, 2006 (7,302,235) (7,302,235)
Retained earnings during development period 29,172 65,449
----------- -----------
Total stockholders' (deficit) (139,297) (103,020)
----------- -----------
Total liabilities and stockholders' (deficit) $ -- $ 500
=========== ===========
The accompanying notes are an integral part of these financial statements.
14
RETROSPETTIVA, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
for the years ended December 31, 2008 and 2007 and
for the Development Period from October 11, 2006 to December 31, 2008
Development Period
October 11, 2006
to December 31,
2008 2007 2008
------------ ------------ ----------------
Revenues $ -- $ -- $ --
------------ ------------ ----------------
Expenses:
General and administrative:
Financing costs -- 2,917 2,917
Consulting fees -- 8,029 8,029
Accounting and legal 22,220 22,636 69,871
Investor relations 4,824 10,073 15,522
------------ ------------ ----------------
Total expenses 27,044 43,655 96,339
------------ ------------ ----------------
Operating (loss) (27,044) (43,655) (96,339)
------------ ------------ ----------------
Other income (expense):
Gain from litigation settlement -- 137,310 137,310
Interest (expense) (8,643) (966) (9,609)
------------ ------------ ----------------
(8,643) 136,344 127,701
------------ ------------ ----------------
Income (loss) before income taxes (35,687) 92,689 31,362
Provision for income taxes 590 800 2,190
------------ ------------ ----------------
Net income (loss) $ (36,277) $ 91,889 $ 29,172
============ ============ ================
Net (loss) per common share:
Basic and Diluted $ Nil $ 0.02 $ Nil
============ ============ ================
Weighted average shares outstanding:
Basic and Diluted 14,425,903 5,239,285 9,204,548
============ ============ ================
The accompanying notes are an integral part of these financial statements.
15
RETROSPETTIVA, INC.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
for the Development Period from October 11, 2006 to December 31, 2008
Retained
Earnings
Accumulated (Accumulated
Deficit Deficit)
Additional through During the Total
Common Stock Paid - in October 11, Development Stockholders'
Shares Amount Capital 2006 Stage (Deficit)
----------- ----------- ----------- ----------- ----------- -----------
Balance, October 11, 2006 3,479,916 $ 6,892,820 $ 230,000 $(7,302,235) $ -- $ (179,415)
Net (loss) -- -- -- -- (26,440) (26,440)
----------- ----------- ----------- ----------- ----------- -----------
Balance, December 31, 2006 3,479,916 6,892,820 230,000 (7,302,235) (26,440) (205,855)
Shares issued for loan fees at
$0.001 per share, July 2, 2007 945,987 946 -- -- -- 946
Shares issued for loan fees at
$0.001 per share, November 14, 2007 10,000,000 10,000 -- -- -- 10,000
Net income -- -- -- -- 91,889 91,889
----------- ----------- ----------- ----------- ----------- -----------
Balance, December 31, 2007 14,425,903 6,903,766 230,000 (7,302,235) 65,449 (103,020)
Net (loss) -- -- -- -- (36,277) (36,277)
----------- ----------- ----------- ----------- ----------- -----------
Balance, December 31, 2008 14,425,903 $ 6,903,766 $ 230,000 $(7,302,235) $ 29,172 $ (139,297)
=========== =========== =========== =========== =========== ===========
The accompanying notes are an integral part of these financial statements.
16
RETROSPETTIVA, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
for the years ended December 31, 2008 and 2007,
and for the Development Period from October 11, 2006 to December 31, 2008
Development Period
October 11, 2006
to December 31,
2008 2007 2008
--------- --------- ---------------
Cash flows from operating activities:
Net income (loss) $ (36,277) $ 91,889 $ 29,172
--------- --------- ---------------
Adjustments to reconcile net income (loss)
to net cash used by operating activities:
Gain from litigation settlement -- (137,310) (137,310)
Shares issued for loan fees and consulting fees -- 10,946 10,946
Changes in operating assets and liabilities:
Decrease (increase) in prepaid expenses -- 2,461 --
Increase (decrease) in accounts payable and
accrued expenses 3,177 (23,681) (7,160)
(Decrease) in judgement payable -- (27,750) (27,750)
Increase in accrued interest 8,643 966 9,609
--------- --------- ---------------
Total adjustments 11,820 (174,368) (151,665)
--------- --------- ---------------
Net cash (used in) operating activities (24,457) (82,479) (122,493)
--------- --------- ---------------
Cash flows from investing activities:
Net cash (used in) investing activities -- -- --
--------- --------- ---------------
Cash flows from financing activities:
Proceeds from notes payable - stockholders 24,236 92,923 117,159
Advances from related party (279) (9,944) 5,334
--------- --------- ---------------
Net cash provided by financing activities 23,957 82,979 122,493
--------- --------- ---------------
Net increase in cash and equivalents (500) 500 --
Cash and equivalents at beginning of year 500 -- --
--------- --------- ---------------
Cash and equivalents at end of year $ -- $ 500 $ --
========= ========= ===============
Supplemental Cash Flow Information
Interest paid $ -- $ -- $ --
========= ========= ===============
Income taxes paid $ 1,390 $ 5,952 $ 7,342
========= ========= ===============
The accompanying notes are an integral part of these financial statements.
17
RETROSPETTIVA, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
1. Overview and Summary of Significant Accounting Policies
Basis of Presentation: Retrospettiva, Inc. (the "Company") was organized
under the laws of the State of California in November, 1990 to manufacture and
import textile products, including both finished garments and fabrics. The
Company's manufacturing facilities and inventories were primarily located in
Europe. The Company ceased operations in 2001 and has been inactive since 2002.
Effective August 2, 2004, the Company was terminated, by administrative action
of the State of California as a result of non-filing of required documents with
the State of California. Effective February 15, 2007, the Company reinstated its
charter.
Effective October 11, 2006 (commencement of the development stage) efforts
commenced to revive the Company. Legal counsel was hired to address litigation
involving the Company and activities were undertaken to prepare and file
delinquent tax and financial reports. Furthermore, a financial judgment against
the Company dating back to 2002 was addressed and a final settlement was reached
in October, 2007. The Company filed various delinquent reports to become current
in its reporting obligations to the Securities and Exchange Commission ("SEC")
and various taxing authorities.
The Company intends to evaluate, structure and complete a merger with, or
acquisition of, prospects consisting of private companies, partnerships or sole
proprietorships. The Company may seek to acquire a controlling interest in such
entities in contemplation of later completing an acquisition.
Development Stage Company: Based on the Company's business plan, it is a
development stage company since planned principle operations have not yet
commenced. Accordingly, the Company presents its financial statements in
conformity with the accounting principles generally accepted in the United
States of America that apply to developing enterprises. As a development stage
enterprise, the Company discloses its retained earnings (or deficit accumulated)
during the development stage and the cumulative statements of operations and
cash flows from commencement of development stage to the current balance sheet
date. The development stage began on October 11, 2006, when management
commenced its efforts to revive the Company.
Revenue Recognition: The Company has not generated any revenues since
entering the development stage. It is the Company's policy that revenues will be
recognized in accordance with SEC Staff Bulletin (SAB) 104, "Revenue
Recognition". Under SAB 104, product revenues (or service revenues) are
recognized when persuasive evidence of an arrangement exists, delivery has
occurred (or service has been performed), the sales price is fixed and
determinable, and collectability is reasonably assured.
Cash and Cash Equivalents: The Company considers cash in banks, deposits
in transit, and highly liquid debt instruments purchased with original
maturities of three months or less to be cash and cash equivalents.
18
Stock Based Compensation: The Company accounts for stock based
compensation in accordance with SFAS 123(R), "Share Based Payment," requiring
the Company to record compensation costs in accordance with the fair value based
method prescribed in SFAS 123(R).
The Company accounts for common stock issued to employees for services
based on the fair value of the instruments issued, and accounts for common stock
issued to other than employees based on the fair value of the consideration
received or the fair value of the equity instruments, whichever is more reliably
measurable.
The Company has no stock option plan and did not make any option grants
during 2008 or 2007, and, accordingly, has not recognized any stock based
compensation expense related to options. During 2007, the Company issued common
shares in exchange for services and recorded an expense based upon the fair
market value of the shares issued.
Per Share Amounts: SFAS 128, "Earnings Per Share," provides for the
calculation of "Basic" and "Diluted" earnings per share. Basic earnings per
share includes no dilution and is computed by dividing net income (or loss) by
the weighted-average number of shares outstanding during the period. Diluted
earnings per share reflect the potential dilution of securities that could share
in the earnings of the Company, similar to fully diluted earnings per share.
During 2008 and 2007, the Company has not issued any potentially dilutive
securities.
Income Taxes: The Company accounts for income taxes in accordance with
SFAS 109, "Accounting for Income Taxes", which requires the use of the asset and
liability method of computing deferred income taxes. The objective of the asset
and liability method is to establish deferred tax assets and liabilities for the
temporary differences between the book basis and the tax basis of the Company's
assets and liabilities at enacted tax rates expected to be in effect when such
amounts are realized or settled.
FIN 48 is an interpretation of SFAS 109 and clarifies the accounting for
uncertainty in income taxes recognized in an entity's financial statements in
accordance with SFAS 109, and prescribes a recognition threshold and measurement
attributes for financial statement disclosure of tax positions taken or expected
to be taken on a tax return. Under FIN 48, the impact of an uncertain income tax
position on the income tax return must be recognized at the largest amount that
is more-likely-than-not to be sustained upon audit by the relevant taxing
authority. An uncertain income tax position will not be recognized if it has
less than a 50% likelihood of being sustained. Additionally, FIN 48 provides
guidance on derecognition, classification, interest and penalties, accounting in
interim periods, disclosure and transition. The Company adopted the provisions
of FIN 48 on January 1, 2007, which did not have any impact on the financial
statements.
Use of Estimates: The preparation of financial statements in conformity
with US GAAP requires management to make estimates and assumptions that affect
the reported amount of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Management
routinely makes judgments and estimates about the effects of matters that are
inherently uncertain. Estimates that are critical to the accompanying financial
statements include the identification and valuation of assets and liabilities,
valuation of deferred tax assets, and the likelihood of loss contingencies.
Management bases its estimates and judgments on historical experience and on
various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results could differ from these estimates. Estimates and
assumptions are revised periodically and the effects of revisions are reflected
in the financial statements in the period it is determined to be necessary.
Fair Value of Financial Instruments: SFAS 107, "Disclosures About Fair
Value of Financial Instruments," requires disclosure of fair value information
about financial instruments. Fair value estimates discussed herein are based
upon certain market assumptions and pertinent information available to
management as of December 31, 2008.
19
The respective carrying value of certain on-balance-sheet financial
instruments approximate their fair values. These financial instruments include
cash, accounts payable, advances payable and notes payable. Fair values were
assumed to approximate carrying values for these financial instruments since
they are short term in nature and their carrying amounts approximate fair value,
or they are receivable or payable on demand.
Concentrations: The Company is not currently a party to any financial
instruments that potentially subject it to concentrations of credit risk.
Recent Pronouncements: In December 2007 the FASB issued FAS No. 141
(revised 2007), Business Combinations ("SFAS 141(R)"). This statement replaces
SFAS 141, Business Combinations. The statement provides guidance for how the
acquirer recognizes and measures the identifiable assets acquired, liabilities
assumed and any non-controlling interest in the acquiree. SFAS 141(R) provides
for how the acquirer recognizes and measures the goodwill acquired in the
business combination or a gain from a bargain purchase. The statement determines
what information to disclose to enable users to be able to evaluate the nature
and financial effects of the business combination. The provisions of SFAS 141(R)
are effective for the first annual reporting period beginning on or after
December 15, 2008, and do not allow early adoption. Management is currently
evaluating the impact of adopting this statement.
In December 2007, the FASB issued FAS No. 160, "Noncontrolling Interests in
Consolidated Financial Statements," (SFAS 160), which becomes effective for
annual periods beginning after December 15, 2008. This standard establishes
accounting and reporting standards for ownership interests in subsidiaries held
by parties other than the parent, the amount of consolidated net income
attributable to the parent and to the noncontrolling interest, changes in a
parent's ownership interest and the valuation of retained non-controlling equity
investments when a subsidiary is deconsolidated. The Statement also establishes
reporting requirements that provide sufficient disclosures that clearly identify
and distinguish between the interests of the parent and the interests of the
non-controlling owners. Management is currently evaluating the impact of
adopting this statement.
In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative
Instruments and Hedging Activities - an Amendment of FASB Statement No. 133,"
(SFAS 161), which becomes effective for periods beginning after November 15,
2008. This standard changes the disclosure requirements for derivative
instruments and hedging activities. Entities are required to provide enhanced
disclosures about (a) how and why an entity uses derivative instruments, (b) how
derivative instruments and related hedged items are accounted for under SFAS 133
and its related interpretations, and (c) how derivative instruments and related
hedged items affect an entity's financial position, financial performance, and
cash flows. Management is currently evaluating the impact of adopting this
statement.
There were various other accounting standards and interpretations issued
during 2008 and 2007, none of which are expected to have a material impact on
the Company's financial position, operations, or cash flows.
20
2. Going Concern
The Company's financial statements are prepared on a going concern basis,
which contemplates the realization of assets and the satisfaction of obligations
in the normal course of business. However, the Company has no business
operations and has negative working capital and stockholders' (deficits). These
conditions raise substantial doubt about the ability of the Company to continue
as a going concern.
In view of these matters, continuation as a going concern is dependent upon
continued operations of the Company, which in turn is dependent upon the
Company's ability to meets its financial requirements, raise additional capital,
and the success of its future operations. The financial statements do not
include any adjustments to the amount and classification of assets and
liabilities that may be necessary should the Company not continue as a going
concern.
Management has opted to file the Company's delinquent financial reports
with the Securities and Exchange Commission (SEC) and then to raise funds
through a private placement. Management believes that this plan provides an
opportunity for the Company to continue as a going concern.
3. Income Taxes
Deferred income taxes arise from temporary timing differences in the
recognition of income and expenses for financial reporting and tax purposes. The
Company's deferred tax assets consist entirely of the benefit from net operating
loss (NOL) carry forwards. The net operating loss carry forward, if not used,
will expire in various years through 2028, and is severely restricted as per the
Internal Revenue code if there is a change in ownership. The Company's deferred
tax assets are offset by a valuation allowance due to the uncertainty of the
realization of the net operating loss carry forwards. Net operating loss
carryforwards may be further limited by other provisions of the tax laws.
The Company's deferred tax assets, valuation allowance, and change in
valuation allowance are as follows:
Estimated Estimated Change in
NOL NOL Tax Benefit Valuation Valuation Net Tax
Period Ending Carry-forward Expires from NOL Allowance Allowance Benefit
----------------- ------------- ------- -------- --------- --------- -------
December 31, 2008 $500,000 Various $113,250 $(113,250) $ -- --
December 31, 2007 $500,000 Various $113,250 $(113,250) $ -- --
Income taxes at the statutory rate are reconciled to the Company's actual
income taxes as follows:
Income tax benefit at statutory rate resulting
from net operating loss carryforward (15.00%)
State tax (benefit) net of federal benefit (7.65%)
Deferred income tax valuation allowance 22.65%
------------
Actual tax rate 0%
============
21
The Company also paid franchise taxes and related fees totaling $1,390 in 2008
and $5,952 in 2007 to the state of California. At December 31, 2008 and 2007,
the Company owed franchise taxes and related fees totaling $800 and $1,600,
respectively, to the state of California.
4. Capital Stock
Preferred Stock The Company has authorized 1,000,000 shares of no par
value preferred stock. These shares may be issued in series with such rights and
preferences as may be determined by the Board of Directors. The Company has not
issued any preferred shares.
Common Stock The Company has authorized 100,000,000 shares of no par
value common stock. On September 22, 2008, the stockholders approved an increase
in the authorized shares of common stock from 15,000,000 shares to 100,000,000
shares. As of December 31, 2008, there were 14,425,903 shares issued and
outstanding.
During 2007, the Company issued 10,945,987 shares of common stock as
additional consideration under loan arrangements provided by the President and a
stockholder. The shares were valued by the Company at $0.001 per share, and the
Company recorded financing costs and consulting fees totaling $10,945 related to
this stock issuance.
5. Related Party Transactions
Effective July 2, 2007, the Company entered into a note payable agreement
with a related party that provides for borrowings up to the principal amount of
$64,871. The note is uncollateralized and bears interest at an annual rate of
8%. The Company issued 945,987 shares of its common stock as additional
consideration for the note payable. During 2007, the Company received proceeds
of $64,871 under this borrowing arrangement. The stockholder has agreed to
extend the due date of the note from June 30, 2008 to June 30, 2009.
Effective November 14, 2007, the Company entered into a revolving
convertible loan agreement with the President and a stockholder. The agreement
provides for borrowings up to the principal amount of $133,333. The note is due
on demand, is uncollateralized, bears interest at an annual rate of 8%, and is
convertible into restricted common stock at $0.10 per share. The Company issued
10,000,000 shares of its common stock as additional consideration for the note
payable. The stock was valued at $10,000 and the Company recorded the $10,000
expense as financing costs of $1,971 and consulting fees of $8,029. As of
December 31, 2008, outstanding borrowings under the agreement totaled $52,288,
including $24,236 borrowed during 2008. The amount available for future
borrowings was $81,045 at December 31, 2008.
The Company accrued interest expense of $8,643 on the two notes payable to
stockholders during 2008.
The Company's President periodically advances funds to the company so that
it can meet its financial obligations. During 2008, the President advanced an
additional $232 to the Company and the Company repaid $511 to the President. The
advances payable totaled $5,334 and $5,613 at December 31, 2008 and 2007,
respectively. These advances are due on demand, are uncollateralized and bear no
interest.
The Company uses the offices of its President for its minimal office
facility needs for no consideration. No provision for these costs has been
provided since it has been determined that they are immaterial.
22
6. Commitment and Contingencies
During 2007, the Company recorded a gain of $137,310 from the settlement of
litigation. On May 20, 2002, Emeryworld, a supplier of transportation services,
obtained a judgment against the Company in the amount of $165,060. The entire
amount of the judgment was recorded in the Company's financial statements as a
liability. On October 26, 2007, the Company reached a settlement agreement under
which Emeryworld agreed to accept a cash payment of $27,750 as payment in full.
The $27,750 was paid in October 2007, and the judgment was released.
In October 2006, the Company received notice that they were the defendant
in a lawsuit. On March 13, 2007, the lawsuit was dismissed.
23
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There were no changes in or disagreements with our accountants during the two
years ended December 31, 2008.
ITEM 9A(T). CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures. Our management, with the
participation of our President, evaluated the effectiveness of our disclosure
controls and procedures as of the end of the period covered by this report.
Based on that evaluation, our President concluded that our disclosure controls
and procedures as of the end of the period covered by this report were effective
such that the information required to be disclosed by us in reports filed under
the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and
reported within the time periods specified in the SEC's rules and forms and (ii)
accumulated and communicated to our management, including our President, as
appropriate to allow timely decisions regarding disclosure. A controls system
cannot provide absolute assurance, however, that the objectives of the controls
system are met, and no evaluation of controls can provide absolute assurance
that all control issues and instances of fraud, if any, within a company have
been detected.
Management's Annual Report on Internal Control over Financial Reporting.
Our management is responsible for establishing and maintaining adequate internal
control over financial reporting (as defined in Rule 13a-15(f) under the
Exchange Act). Our internal control over financial reporting is a process
designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in
accordance with accounting principles generally accepted in the United States.
Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Therefore, even those systems
determined to be effective can provide only reasonable assurance of achieving
their control objectives. Furthermore, smaller reporting companies face
additional limitations. Smaller reporting companies employ fewer individuals and
find it difficult to properly segregate duties. Often, one or two individuals
control every aspect of the Company's operation and are in a position to
override any system of internal control. Additionally, smaller reporting
companies tend to utilize general accounting software packages that lack a
rigorous set of software controls.
Our management, with the participation of the President, evaluated the
effectiveness of the Company's internal control over financial reporting as of
December 31, 2008. In making this assessment, our management used the criteria
set forth by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) in Internal Control -- Integrated Framework. Based on this
evaluation, our management, with the participation of the President, concluded
that, as of December 31, 2008, our internal control over financial reporting was
not effective due to material weaknesses in the system of internal control.
24
Specifically, management identified the following control deficiencies. (1)
The Company has not properly segregated duties as one or two individuals
initiate, authorize, and complete all transactions. The Company has not
implemented measures that would prevent the individuals from overriding the
internal control system. The Company does not believe that this control
deficiency has resulted in deficient financial reporting because the Chief
Executive Officer and Chief Financial Officer is aware of his responsibilities
under the SEC's reporting requirements and personally certifies the financial
reports. (2) The Company has installed accounting software that does not prevent
erroneous or unauthorized changes to previous reporting periods and does not
provide an adequate audit trail of entries made in the accounting software. The
Company does not think that this control deficiency has resulted in deficient
financial reporting because the Company has implemented a series of manual
checks and balances to verify that previous reporting periods have not been
improperly modified and that no unauthorized entries have been made in the
current reporting period.
Accordingly, while the Company has identified certain material weaknesses
in its system of internal control over financial reporting, it believes that it
has taken reasonable steps to ascertain that the financial information contained
in this report is in accordance with generally accepted accounting principles.
Management has determined that current resources would be appropriately applied
elsewhere and when resources permit, they will alleviate material weaknesses
through various steps.
(b) Changes in Internal Control over Financial Reporting. During 2008,
there were no changes in the Company's internal controls over financial
reporting, known to the Chief Executive Officer and the Chief Financial Officer,
that have materially affected, or are reasonably likely to materially affect,
the Company's internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
25
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Directors and Executive Officers
The following individual presently serves as our sole officer and director:
Board
Name and Position
Municipality of Residence Age Positions With the Company Held Since
- ------------------------- --- -------------------------- ----------
Borivoje Vukadinovic
Los Angeles, CA 49 President, Chief Executive 1991
Officer, Chief Financial
Officer and Director
Our director is serving a term which expires at the next annual meeting of
shareholders and until his or her successor is elected and qualified or until he
or she resigns or is removed. Our officer serves at the will of our Board of
Directors.
The following information summarizes the business experience of each of our
officer and directors for at least the last five years:
Borivoje Vukadinovic. Mr. Vukadinovic has served as a director and executive
officer since 1991 and has been our Chief Executive Officer since January 1993.
From June 1990 to August 1993, he was Vice President and a principal stockholder
of Celtex ENT, a Los Angeles, California based company that established and
administered production of yarns and raw textiles in Yugoslavia, Turkey, and
Macedonia. From May 1988 to June 1990, he was founder, owner, and President of
DUTY OFF, Inc., a Los Angeles, California based company that produced young
men's apparel. He earned a Bachelor of Arts degree in Business from the
University of Banja Luka in Yugoslavia and a Bachelor of Arts degree in Art from
Bern University in Switzerland.
Board Committees
Our Board of Directors has not established a standing Audit, Compensation and
Nominating Committee during 2008.
Section 16(a) Beneficial Ownership Reporting Compliance
We are not registered under the Securities Exchange Act of 1934, as amended, and
are not subject to the reporting requirements of Section 16(a).
26
Code of Ethics
We have not yet adopted a written Code of Ethics, however, we believe our Chief
Executive Officer and Chief Financial Officer conducts himself honestly and
ethically with respect to our business affairs. As the company is still in the
process of putting its formal corporate governance structure into place, we plan
to adopt a formal Code of Ethics in the future.
ITEM 11. EXECUTIVE COMPENSATION
The following table summarizes the total compensation for the last two years of
all persons who served as our chief executive officer ("Named Executive
Officers") Our company did not award cash bonuses, stock awards, stock options
or non-equity incentive plan compensation to any Named Executive Officer during
the past two fiscal years, thus these items are omitted from the table below:
Summary Compensation Table
All
Name and Other
Principal Position Year Salary Compensation Total
- ------------------ ---- ------ ------------ -----
Borivoje Vukadinovic 2008 $ 0 $ 0 $ 0
Director, C.E.O., and 2007 $ 0 $ 0 $ 0
C.F.O.
As of December 31, 2008, and for the two years ended December 31, 2008, we did
not have an employment agreement with our executive officer.
Director Compensation Table
All
Fees Earned or Stock Option Other
Name Paid in Cash Awards Awards Compensation Total
- --------------------- -------------- ------ ------ ------------ -----
Borivoje Vukadinovic $ 0 $ 0 $ 0 $ 0 $ 0
All officers and directors are reimbursed for reasonable and necessary expenses
incurred in their capacities as such.
Outstanding Equity Awards at Fiscal Year-End
As of December 31, 2008, there were no outstanding equity awards. During the two
years ended December 31, 2008, we did not grant any equity awards.
27
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
As of April 13, 2009, there are a total of 14,425,903 shares of our common stock
outstanding, our only class of voting securities currently outstanding. The
following table describes the ownership of our voting securities by: (i) each of
our officers and directors; (ii) all of our officers and directors as a group;
and (iii) each shareholder known to us to own beneficially more than 5% of our
common stock. All ownership is direct, unless otherwise stated.
Name and Address of Shares Beneficially Owned
Beneficial Owner Number Percentage (%)
- --------------------------------------------------------------------------------
Borivoje Vukadinovic(1) 5,945,987 41.1%
112 West 9th Street, Suite 518
Los Angeles, CA 90015
Gary Agron 5,945,987 41.1%
5445 DTC Parkway, Suite 520
Englewood, CO 80111
All officers and directors
as a group (1 persons) 5,945,987 41.1%
- --------------------
(1) Officer and director.
Changes in Control
Our two principal stockholders own 11,891,974 shares, or 82% of our outstanding
common stock. One of the principal stockholders serves as our sole officer and
director. They exercise significance influence over the control of our Company
and may be able to cause or prevent a change in control.
Equity Incentive Plan
We do not have an equity incentive plan.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
During 2008, 2007, and 2006, Borivoje Vukadinovic advanced $29,741 to us so that
we could meet our financial obligations. We have repaid $24,407 of these
advances and the balance owed at December 31, 2008 is $5,334. In addition,
effective July 2, 2007, we entered into a note payable agreement with Gary Agron
that provides for maximum borrowings up to $64,871. The note is due June 30,
2009, as extended, is uncollateralized, and bears interest at an annual rate of
8%. The Company issued 945,987 shares of its common stock as additional
consideration for the note payable. During 2007, we received proceeds of $64,871
under the terms of this note. Effective November 14, 2007, we entered into a
revolving convertible loan agreement with Borivoje Vukadinovic and Gary Agron
that provides for maximum borrowings up to $133,333. The note is due on demand,
is uncollateralized, bears interest at an annual rate of 8%, and is convertible
into restricted common stock at $0.10 per share. The Company issued 10,000,000
shares of its common stock as additional consideration for the note payable.
During 2008 and 2007, we received proceeds of $52,288 under the terms of this
note.
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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The following table sets forth fees billed by our principal accounting firm of
Schumacher & Associates, Inc. in the last two years ended December 31, 2008:
2008 2007
------- -------
Audit Fees $13,100 $ 2,500
Audit Related Fees 0 0
Tax Fees 0 0
All Other Fees 0 0
------- -------
Total Fees $13,100 $ 2,500
======= =======
It is the policy of our Board of Directors to engage the principal
accounting firm selected to conduct the financial audit for our company and to
confirm, prior to such engagement, that such principal accounting firm is
independent of our company. All services of the principal accounting firm
reflected above were approved by the Board of Directors.
PART IV
ITEM 15. EXHIBITS
The following exhibits are filed with or incorporated by referenced in this
report:
31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for
Borivoje Vukadinovic .
32.1 Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for
Borivoje Vukadinovic.
29
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
RETROSPETTIVA, INC.
/s/ Borivoje Vukadinovic
-----------------------------------
Dated: April 13, 2009 By: Borivoje Vukadinovic, Director,
Chief Executive Officer, and
Chief Financial Officer
In accordance with the Exchange Act, this Report has been signed below by
the following persons on behalf of the Company and in the capacities and on the
dates indicated.
RETROSPETTIVA, INC.
/s/ Borivoje Vukadinovic
-----------------------------------
Dated: April 13, 2009 By: Borivoje Vukadinovic, Director,
Chief Executive Officer, and
Chief Financial Officer
30