UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended: March 31, 2009
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ____ to ________
RETROSPETTIVA, INC.
-------------------
(Exact Name of Registrant as Specified in its Charter)
CALIFORNIA 333-29295 95-4298051
- --------------------------------- ---------- ---------------
(State or other jurisdiction (Commission I.R.S. Employer
of incorporation or organization) File No.) Identification
Number
112 West 9th Street, Suite 518, Los Angeles, CA 90015
-----------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number including area code: (213) 623-9216
-------------------------------------------------
Former name, former address, and former fiscal year,
if changed since last report
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [_]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). Yes [X] No [_]
Indicate by checkmark whether the registrant is a large accelerated filer, a
non-accelerated filer, or a smaller reporting company. See the definitions of
"large accelerated filer," "accelerated filer" and "smaller reporting company"
in Rule 12b-2 of the Exchange Act.
Large accelerated filer [_] Accelerated filer [_]
Non-accelerated filer [_]
(Do not check if a smaller reporting company) Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
Yes [X] No [_]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 14,425,903 shares of common stock
outstanding as of May 11, 2009.
RETROSPETTIVA, INC.
Index
Page
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets as of March 31, 2009 (unaudited) and
December 31, 2008 3
Statements of Operations (unaudited) for the
three months ended March 31, 2009 and 2008, and for the
Development Period from October 11, 2006 to March 31, 2009 4
Statements of Cash Flows (unaudited) for the
three months ended March 31, 2009 and 2008, and for the
Development Period from October 11, 2006 to March 31, 2009 5
Notes to Financial Statements (unaudited) 6
Item 2. Management's Discussion and Analysis or Plan of Operation 9
Item 3. Quantitative and Qualitative Disclosures About Market Risk 11
Item 4. Controls and Procedures 11
Part II - OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 1A. Risk Factors 12
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits 12
SIGNATURES 13
RETROSPETTIVA, INC.
(A Development Stage Company)
BALANCE SHEETS
March 31, December 31,
2009 2008
----------- -----------
(Unaudited) (See Note 1)
ASSETS
Current assets:
Cash and cash equivalents $ -- $ --
----------- -----------
Total current assets $ -- $ --
=========== ===========
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Current liabilities:
Accounts payable $ 5,238 $ 6,395
Accrued expenses 1,000 800
Advances payable - officer 5,334 5,334
Notes payable - stockholders 126,218 117,159
Accrued interest - stockholders 11,928 9,609
----------- -----------
Total current liabilities 149,718 139,297
----------- -----------
Commitments and contingencies (Notes 1, 2, and 3)
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 18,751 29,172
----------- -----------
Total stockholders' (deficit) (149,718) (139,297)
----------- -----------
Total liabilities and stockholders' (deficit) $ -- $ --
=========== ===========
The accompanying notes are an integral part of these financial statements.
3
RETROSPETTIVA, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
for the three months ended March 31, 2009 and 2008, and for the
Development Period from October 11, 2006 to March 31, 2009
(Unaudited)
Development Period
October 11, 2006
2009 2008 to March 31, 2009
---------- ---------- -----------------
Revenues $ -- $ -- $ --
---------- ---------- ----------------
Expenses:
General and administrative:
Financing costs -- -- 2,917
Consulting fees -- -- 8,029
Accounting and legal 7,738 19,510 77,609
Investor relations 164 439 15,686
---------- ---------- ----------------
Total expenses 7,902 19,949 104,241
---------- ---------- ----------------
Operating (loss) (7,902) (19,949) (104,241)
---------- ---------- ----------------
Other income (expense):
Gain from litigation settlement -- -- 137,310
Interest (expense) (2,319) (1,907) (11,928)
---------- ---------- ----------------
(2,319) (1,907) 125,382
---------- ---------- ----------------
Income (loss) before income taxes (10,221) (21,856) 21,141
Provision for income taxes 200 -- 2,390
---------- ---------- ----------------
Net income (loss) $ (10,421) $ (21,856) $ 18,751
========== ========== ================
Net (loss) per common share:
Basic and Diluted $ Nil $ Nil $ Nil
========== ========== ==========
Weighted average shares outstanding:
Basic and Diluted 14,425,903 14,425,903 9,725,525
========== ========== ==========
The accompanying notes are an integral part of these financial statements.
4
RETROSPETTIVA, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
for the three months ended March 31, 2009 and 2008, and for the
Development Period from October 11, 2006 to March 31, 2009
(Unaudited)
Development Period
October 11, 2006
2009 2008 to March 31, 2009
--------- --------- -----------------
Cash flows from operating activities:
Net cash (used in) operating activities (9,059) (12,197) (131,552)
--------- --------- -----------------
Cash flows from investing activities:
Net cash (used in) investing activities -- -- --
--------- --------- -----------------
Cash flows from financing activities:
Proceeds from notes payable - stockholders 9,059 12,146 126,218
Advances from related party -- (360) 5,334
--------- --------- -----------------
Net cash provided by financing activities 9,059 11,786 131,552
--------- --------- -----------------
Net increase in cash and equivalents -- (411) --
Cash and equivalents at beginning of year -- 500 --
--------- --------- -----------------
Cash and equivalents at end of year $ -- $ 89 $ --
========= ========= =================
Supplemental Cash Flow Information
Interest paid $ -- $ -- $ --
========= ========= =================
Income taxes paid $ -- $ 1,310 $ 7,342
========= ========= =================
The accompanying notes are an integral part of these financial statements.
5
RETROSPETTIVA, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
March 31, 2009
(Unaudited)
1. Summary of Significant Accounting Policies
Interim Financial Information: The interim financial statements included
herein have been prepared by the Company, without audit, pursuant to the rules
and regulations of the Securities and Exchange Commission ("SEC") as promulgated
in Item 210 of Regulation S-X. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with accounting
principles generally accepted in the United States of America ("US GAAP") have
been condensed or omitted pursuant to such SEC rules and regulations. In the
opinion of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation of financial position as of March
31, 2009, results of operations for the three months ended March 31, 2009 and
2008, and cash flows for the three months ended March 31, 2009 and 2008, as
applicable, have been made. The results for these interim periods are not
necessarily indicative of the results for the entire year. The accompanying
financial statements should be read in conjunction with the financial statements
and the notes thereto included in the Company's Form 10-K.
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 warehouses were located primarily in
Europe. The Company ceased operations in 2001 and has been inactive since 2002.
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 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.
6
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 2009 and 2008, the Company has not issued any potentially dilutive
securities.
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. 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. Actual results could differ from these estimates.
Recent Accounting Pronouncements: There were various accounting standards
and interpretations recently issued, none of which are expected to a have a
material impact on the Company's financial position, operations or cash flows.
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 has a total stockholders'
deficit. 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 meet 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 periodic financial reports with
the 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. Related Party Transactions
Effective July 2, 2007, the Company entered into a note payable agreement
with a stockholder 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. As of March 31, 2009, the outstanding
balance of the note payable was $64,871, and the stockholder has agreed to
extend the due date of the note from June 30, 2008 to June 30, 2009.
7
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. As of March 31, 2009, outstanding borrowings under the agreement
totaled $61,347, including $9,059 borrowed during 2009.
The Company accrued interest expense of $2,319 on the two notes payable
during the three months ended March 31, 2009.
The Company's President periodically advances funds to the Company so that
it can meet its financial obligations. During 2009, the President advanced no
additional funds to the Company. As of March 31, 2009, the aggregate amounts
advanced, including amounts advanced and repayments during previous periods,
were $5,334. These advances are due on demand, 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.
4. 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) carryforwards. The net operating loss carryforwards, if not used,
will expire in various years through 2029, and are 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 carryforwards. 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 Tax Change in
NOL NOL Benefit from Valuation Valuation Net Tax
Period Ending Carry-forward Expires NOL Allowance Allowance Benefit
- -------------- ------------- ------- ------------- ---------- --------- -------
March 31, 2009 $538,000 Various $122,000 $(122,000) (2,000) --
Income taxes at the statutory rate are reconciled to the Company's reported
income tax expense (benefit) as follows:
Federal tax expense (benefit) at statutory rate (15.00%)
State tax expense (benefit), net of federal tax (7.65%)
Deferred income tax valuation allowance 22.65%
---------
Reported tax rate 0%
=========
The Company also paid franchise taxes and related fees totaling $nil in 2009 and
$1,310 in 2008 to the State of California. At March 31, 2009 and December 31,
2008, the Company had accrued franchise taxes and related fees payable to the
State of California totaling $1,000 and $800, respectively.
8
Item 2. Management's Discussion and Analysis or Plan of Operation
Overview
The following discussion updates our plan of operation for the next twelve
months. It also analyzes our financial condition at March 31, 2009 and compares
it to our financial condition at December 31, 2008. Finally, the discussion
summarizes the results of our operations for the three months ended March 31,
2009 and compares those results to the corresponding periods ended March 31,
2008. This discussion and analysis should be read in conjunction with our
audited financial statements for the two years ended December 31, 2008,
including footnotes, and the discussion and analysis included in our Form 10-K.
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. 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.
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 its
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.
Liquidity and Capital Resources
As of March 31, 2009, we had a working capital deficit of $(149,718). We had no
current assets and current liabilities of $149,718. This represents a $10,421
increase in the deficit from the working capital deficit of $(139,297) at
December 31, 2008. During the three months ended March 31, 2009, 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.
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. 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
note 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 March 31, 2009, we had borrowed $61,347 under this arrangement
and the amount available for future borrowings was $71,986.
9
Our President has periodically advanced funds to us to meet our working capital
needs. As of March 31, 2009, we owe our President $5,334 for advances which are
uncollateralized, non-interest bearing and due on demand. During the three
months ended March 31, 2009, we incurred other obligations and liabilities which
are reflected in the accompanying balance sheet as accounts payable and accrued
expenses.
Net cash used in operating activities was $9,059 during the first three months
of 2009 compared to cash used of $12,197 during the first three months of 2008.
For both periods, all of our cash needs were funded by related parties.
Results of Operations - Three Months Ended March 31, 2009 Compared to the Three
Months Ended March 31, 2008
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 three months ended March 31, 2009, we recorded a net loss of $(10,421),
or $ (0.00) per share, compared to a loss for the corresponding period of 2008
of $(21,856) or $(0.00) per share. In neither period did we report any revenue.
Operating expenses decreased to $7,902 for the three months ended March 31, 2009
compared to $19,949 during the comparable period of 2008. Accounting and
auditing fees decreased by $11,772 because the process of updating our affairs
and becoming current in our reporting obligations was completed during 2008, and
the costs incurred during 2009 are for meeting current reporting requirements
for a public company.
During the three months ended March 31, 2009, we incurred interest expense of
$2,319 related to the notes payable to stockholders, compared to $1,907 for the
three months ended March 31, 2008. Interest expense increased as the note
balances increased from $114,285 reported at March 31, 2008 to $126,218 at March
31, 2009.
Off-Balance Sheet Arrangements
As of and subsequent to March 31, 2009, we have no off-balance sheet
arrangements.
Forward-Looking Statements
This Form 10-Q 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
- statements of our expectations, beliefs, future plans and strategies,
anticipated developments and other matters that are not historical
facts.
10
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.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
The important factors that could prevent us from achieving our stated goals and
objectives include, but are not limited to, those set forth in our annual report
on Form 10-K, other reports filed with the SEC and the following:
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 Our ability to raise additional capital, as it may be affected by
current conditions in the stock market and competition for risk
capital;
o Environmental and other regulations, as the same presently exist and
may hereafter be amended.
We undertake no responsibility or obligation to update publicly these
forward-looking statements, but may do so in the future in written or oral
statements. Investors should take note of any future statements made by or on
our behalf.
Item 4. Controls and Procedures
(a) We maintain a system of controls and procedures designed to ensure that
information required to be disclosed by us in reports that we file or submit
under the Securities Exchange Act of 1934, as amended, is recorded, processed,
summarized and reported, within time periods specified in the SEC's rules and
forms and to ensure that information required to be disclosed by us in the
reports that we file or submit under the Securities Exchange Act of 1934, as
amended, is accumulated and communicated to our management, including our
Principal Executive Officer and Principal Financial Officer, as appropriate to
allow timely decisions regarding required disclosure. As of March 31, 2009,
under the supervision and with the participation of our Principal Executive
Officer and Principal Financial Officer, management has evaluated the
effectiveness of the design and operation of our disclosure controls and
procedures. Based on that evaluation, the Principal Executive Officer and
Principal Financial Officer concluded that our disclosure controls and
procedures were effective.
(b) Changes in Internal Controls. There were no changes in our internal
control over financial reporting during the quarter ended March 31, 2009 that
materially affected, or are reasonably likely to materially affect, our internal
controls over financial reporting.
11
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None
Item 1A. Risk Factors.
Not required for smaller reporting companies.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None
Item 3. Defaults Upon Senior Securities.
None
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 5. Other Information.
None
Item 6. Exhibits.
a. Exhibits
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.
12
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: May 11, 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: May 11, 2009 By: Borivoje Vukadinovic, Director,
Chief Executive Officer, and
Chief Financial Officer
13