UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2012
Commission File Number 333-173164
REDSTONE LITERARY AGENTS INC.
(Exact name of registrant as specified in its charter)
NEVADA
(State or other jurisdiction of incorporation or organization)
1842 E Campo Bello Drive
Phoenix, AZ 85022
(Address of principal executive offices, including zip code)
(602)867-0160
(Telephone number, including area code)
Mary S. Wolf, President
Redstone Literary Agents Inc.
1842 E Campo Bello Drive
Phoenix, AZ 85022
Telephone (602)867-0160 Facsimile (602)865-7313
(Name, address and telephone number of agent for service)
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to section 12(g) of the Act:
Common Stock, $.001 par value
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the last 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 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,"
"non-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 [ ]
As of November 21, 2012, the registrant had 3,000,000 shares of common stock
issued and outstanding. No market value has been computed based upon the fact
that no active trading market had been established as of November 19, 2012.
ITEM 1. FINANCIAL STATEMENTS
Redstone Literary Agents, Inc.
Balance Sheets
(A Development Stage Company)
(Expressed in US Dollars)
--------------------------------------------------------------------------------
September 30, December 31,
2012 2011
-------- --------
Unaudited Audited
ASSETS
CURRENT ASSETS
Cash $ 21,670 $ 920
-------- --------
TOTAL ASSTS $ 21,670 $ 920
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Loans from related parties $ 9,000 $ 5,000
Share subscriptions received 29,100 --
-------- --------
TOTAL CURRENT LIABILITIES 38,100 5,000
-------- --------
STOCKHOLDERS' EQUITY
Capital stock
Authorized 75,000,000 ordinary voting shares at $0.001 per share
Issued and outstanding:
3,000,000 common shares at par value (3,000,000 common shares as
of September 30, 2012 and December 31, 2011) 3,000 3,000
Additional paid in capital 12,000 12,000
Share subscription receivable (5,000) (5,000)
-------- --------
10,000 10,000
Deficit accumulated during the development stage (26,430) (14,080)
-------- --------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (16,430) (4,080)
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 21,670 $ 920
======== ========
Approved on behalf of the board
_______________________________, Director
_______________________________, Director
2
Redstone Literary Agents, Inc.
Statements of Income
(A Development Stage Company)
(Expressed in US Dollars)
(Unaudited)
--------------------------------------------------------------------------------
Accumulated
From Inception
Three Months Three Months Nine Months Nine Months Date of
Ended Ended Ended Ended July 20, 2010 to
September 30, September 30, September 30, September 30, September 30,
2012 2011 2012 2011 2012
---------- ---------- ---------- ---------- ----------
SALES $ 3,750 $ -- $ 3,750 $ -- $ 3,750
GENERAL AND ADMINISTRATIVE EXPENSES
Bank charges and interest 17 51 164 242 517
Consulting fees 4,080 -- 5,430 -- 5,430
Professional fees 1,500 3,500 7,750 8,200 15,950
Office expenses 1,232 330 2,756 3,233 8,283
---------- ---------- ---------- ---------- ----------
Total general and administrative expenses 6,829 3,881 16,100 11,675 30,180
---------- ---------- ---------- ---------- ----------
Net loss $ (3,079) $ (3,881) $ (12,350) $ (11,675) $ (26,430)
========== ========== ========== ========== ==========
EARNINGS PER SHARE - BASIC AND DILUTED $ (0.00) $ (0.00) $ (0.00) $ (0.00)
========== ========== ========== ==========
WEIGHTED AVERAGE OUTSTANDING SHARES 3,000,000 3,000,000 3,000,000 3,000,000
========== ========== ========== ==========
3
Redstone Literary Agents, Inc.
Statements of Cash Flows
(A Development Stage Company)
(Expressed in US Dollars)
(Unaudited)
--------------------------------------------------------------------------------
Accumulated
From Inception
Nine Months Nine Months Date of
Ended Ended July 20, 2010 to
September 30, September 30, September 30,
2012 2011 2012
-------- -------- --------
CASH DERIVED FROM (USED FOR) OPERATING ACTIVITIES
Net loss for the period $(12,350) $(11,675) $(26,430)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities
Changes in operating assets and liabilities
Accounts payable -- -- --
Share subscriptions received 29,100 -- 29,100
-------- -------- --------
Net cash (used in) operating activities 16,750 (11,675) 2,670
-------- -------- --------
FINANCING ACTIVITIES
Loans from related party 4,000 5,000 9,000
Shares subscribed for cash -- -- 10,000
-------- -------- --------
Net cash provided by financing activities 4,000 5,000 19,000
-------- -------- --------
INVESTING ACTIVITIES
Net cash used for investing activities -- -- --
-------- -------- --------
Cash increase during the period 20,750 (6,675) 21,670
Cash beginning of the period 920 9,230 --
-------- -------- --------
Cash end of the period $ 21,670 $ 2,555 $ 21,670
======== ======== ========
4
Redstone Literary Agents, Inc.
Notes to Financial Statements
September 30, 2012
(A Development Stage Company)
(Expressed in US Dollars)
(Unaudited)
--------------------------------------------------------------------------------
1. NATURE AND CONTINUANCE OF OPERATIONS
Redstone Literary Agents, Inc. ("the Company") was incorporated under the laws
of State of Nevada, U.S. on July 20, 2010, with an authorized capital of
75,000,000 common shares with a par value of $0.001. The Company's year end is
the end of December. The Company is in the development stage of its publishing
service business. During the period ended December 31, 2010, the Company
commenced operations by issuing shares.
These financial statements have been prepared on a going concern basis which
assumes the Company will be able to realize its assets and discharge its
liabilities in the normal course of business for the foreseeable future. The
Company has incurred losses since inception resulting in an accumulated deficit
of $26,430 as at September 30, 2012 and further losses are anticipated in the
development of its business raising substantial doubt about the Company's
ability to continue as a going concern. The ability to continue as a going
concern is dependent upon the Company generating profitable operations in the
future and/or to obtain the necessary financing to meet its obligations and
repay its liabilities arising from normal business operations when they come
due. Management intends to finance operating costs over the next twelve months
with existing cash on hand and loans from directors and or private placement of
common stock.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The financial statements of the Company have been prepared in accordance with
generally accepted accounting principles in the United States of America and are
presented in US dollars.
DEVELOPMENT STAGE COMPANY
The Company complies with the ASC 915, its characterization of the Company as a
development stage enterprise.
USE OF ESTIMATES AND ASSUMPTIONS
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the period. Actual results
could differ from those estimates.
The carrying value of cash and accounts payable and accrued liabilities
approximates their fair value because of the short maturity of these
instruments. Unless otherwise noted, it is management's opinion the Company is
not exposed to significant interest, currency or credit risks arising from these
financial instruments.
INCOME TAXES
The Company follows the liability method of accounting for income taxes. Under
this method, deferred income tax assets and liabilities are recognized for the
estimated tax consequences attributable to differences between the financial
statement carrying values and their respective income tax basis (temporary
differences). The effect on deferred income tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.
At September 30, 2012, a full deferred tax asset valuation allowance has been
provided and no deferred tax asset has been recorded.
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Redstone Literary Agents, Inc.
Notes to Financial Statements
September 30, 2012
(A Development Stage Company)
(Expressed in US Dollars)
(Unaudited)
--------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
EARNING PER SHARE
The Company computes loss per share in accordance with ASC 105, "Earnings per
Share" which requires presentation of both basic and diluted earnings per share
on the face of the statement of operations. Basic loss per share is computed by
dividing net loss available to common shareholders by the weighted average
number of outstanding common shares during the period. Diluted loss per share
gives effect to all dilutive potential common shares outstanding during the
period. Dilutive loss per share excludes all potential common shares if their
effect is anti-dilutive.
The Company has no potential dilutive instruments and accordingly basic loss and
diluted loss per share are equal.
STOCK-BASED COMPENSATION
The Company accounts for employee and non-employee stock awards under ASC 718,
whereby equity instruments issued to employees for services are recorded based
on the fair value of the instrument issued and those issued to non-employees are
recorded based on the fair value of the consideration received or the fair value
of the equity instrument, whichever is more reliably measurable.
3. COMMON STOCK
The total number of common shares authorized that may be issued by the Company
is 75,000,000 shares with a par value of one tenth of one cent ($0.001) per
share and no other class of shares is authorized.
As of September 30, 2012, the Company has issued 3,000,000 shares of common
stock for total cash proceeds of $15,000. At September 30, 2012 there were no
outstanding stock options or warrants.
4. INCOME TAXES
As of September 30, 2012, the Company had net operating loss carry forwards of
approximately $26,430 that may be available to reduce future years' taxable
income through 2030. Future tax benefits which may arise as a result of these
losses have not been recognized in these financial statements, as their
realization is determined not likely to occur and accordingly, the Company has
recorded a valuation allowance for the deferred tax asset relating to these tax
loss carry-forwards.
5. SUBSEQUENT EVENT
The Company has evaluated subsequent events through the date of issuance of
these financial statements and determined that thee are no reportable subsequent
events.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
FORWARD LOOKING STATEMENTS
Some of the statements contained in this Form 10-Q that are not historical facts
are "forward-looking statements" which can be identified by the use of
terminology such as "estimates," "projects," "plans," "believes," "expects,"
"anticipates," "intends," or the negative or other variations, or by discussions
of strategy that involve risks and uncertainties. We urge you to be cautious of
the forward-looking statements, that such statements, which are contained in
this Form 10-Q, reflect our current beliefs with respect to future events and
involve known and unknown risks, uncertainties and other factors affecting our
operations, market growth, services, products and licenses. No assurances can be
given regarding the achievement of future results, as actual results may differ
materially as a result of the risks we face, and actual events may differ from
the assumptions underlying the statements that have been made regarding
anticipated events.
All written forward-looking statements made in connection with this Form 10-Q
that are attributable to us or persons acting on our behalf are expressly
qualified in their entirety by these cautionary statements. Given the
uncertainties that surround such statements, you are cautioned not to place
undue reliance on such forward-looking statements.
The safe harbours of forward-looking statements provided by the Securities
Litigation Reform Act of 1995 are unavailable to issuers not subject to the
reporting requirements set forth under Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended. As we have not registered our securities
pursuant to Section 12 of the Exchange Act, such safe harbours set forth under
the Reform Act are unavailable to us.
RESULTS OF OPERATIONS
We are still in our development stage and have generated no revenue to date. At
September 30, 2012, we had cash on hand of $21,670 and 38,100 in outstanding
liabilities.
We had revenue of $3,750 and $0 for the three months ended September 30, 2012
and 2011, respectively. We incurred operating expenses of $6,829 and $3,881 for
the three months ended September 30, 2012 and 2011, respectively. These expenses
consisted of general and administrative expenses.
We had revenue of $3,750 and $0 for the nine months ended September 30, 2012 and
2011, respectively. We incurred operating expenses of $16,100 and $11,675 for
the nine months ended September 30, 2012 and 2011, respectively. These expenses
consisted of general and administrative expenses.
We received our initial funding of $15,000 through the sale of common stock to
Mary Wolf, our CEO, who purchased 3,000,000 shares of our common stock at $0.005
per share on July 20, 2010, the investment by the existing stockholder includes
a subscription receivable of $5,000. From inception until the date of this
filing we have had no operating activities. Our financial statements from
inception (July 20, 2010) through June 30, 2012 report no revenues and net
losses of $26,430.
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The following table provides selected financial data about our company for the
period ended September 30, 2012:
Balance Sheet Data: 09/30/12
------------------- --------
Cash $ 21,670
Total assets $ 21,670
Total liabilities $ 38,100
Shareholders' equity $(16,430)
Our auditors have expressed their doubt about our ability to continue as a going
concern unless we are able to generate profitable operations.
LIQUIDITY AND CAPITAL RESOURCES
We currently have $21,670 cash in the bank which comprises our total assets.
Management believes that the current cash is not sufficient to fund operations
for the next twelve months if we are able to carry out our full plan of
operations.
We currently have no plans to hire additional employees in the next twelve
months unless sales are sufficient to cover the cost.
PLAN OF OPERATION
The following criteria for the milestones are based on estimates derived from
research and marketing data accumulated by our director. They are estimates
only. We will require the funding from our offering in order to fully implement
our business plan. The following chart outlines how we plan to use the proceeds
from the offering.
Planned Expenditures Over
Category The Next 12 Months
-------- ------------------
Advertising & Marketing $13,500
Website Design $ 6,000
Equipment $ 2,500
Accounting, Auditing & Legal $10,500
Office & Administration $ 7,500
Working Capital $ 5,000
-------
TOTAL PROCEEDS TO COMPANY $45,000
=======
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The milestones for the next twelve months are:
FIRST QUARTER
We will produce executed contracts with the two authors who have asked us to
work with them in editing book outlines and direct the creation of manuscripts
in order to commercialize a publishing contract. In other words once we have a
manuscript synopsis and outline this will allow us to speak to potential
publishing houses in North America to secure a publishing contract for our
contracted authors. Author bios will be completed as well as headshots and
chapter outlines for each author. The Website for the company will be designed
and written to reflect service and genres of focus. We will also be securing
freelance editors to work with each author to complete chapter outlines and
synopsis of book.
We will complete the website for RedStone Literary Agents LLC. This site will in
addition to showing scope of service will also promote the two authors under
contract. The site will give a sampling from a few chapters of their work. In
addition, we will begin researching literary shows to attend in order to bid
publishing deals. These shows will also serve as a vehicle to secure additional
representation of other up and coming authors. We will investigate industry
groups to subscribe to like the Association of Authors Representatives Inc. We
will conduct interviews to hire a Publicist to give Authors advance promotion.
If resources are available, it would be strategic to attend Book Expo America in
New York (May 23-26). We believe the Book Expo will show us the leading genres
that book publishers are currently sourcing. As well, other agents will be
looking for some other regional agents to assist with PR and also speaking
engagements for new releases. If funding is not available we will find another
similar trade show to attend later in the year.
(Estimated expenses: Advertising and Marketing $4,000, Website Design $4,000,
Accounting, Auditing & Legal $2,500, Office & Administration $1,500, Working
Capital $1,250 - Total $13,250)
SECOND QUARTER
If resources are available we will hire a part time assistant who will be
responsible for many aspects of our operation, from administration to book title
procurement. A book selling strategy will be agreed upon to find the right
publisher in order to negotiate successful publishing deals. We will engage in a
search engine optimization campaign to assist us with awareness for our authors.
Search engine optimization (SEO) is the process of improving the visibility of a
website or a web page in search engines via the "natural" or un-paid search
results. In general, the earlier (or higher on the page), and more frequently a
site appears in the search results list, the more visitors it will receive from
the search engine's users. As an Internet marketing strategy, SEO considers how
search engines work, what people search for, the actual search terms typed into
search engines and which search engines are preferred by their targeted
audience. Optimizing a website may involve editing its content and HTML and
associated coding to both increase its relevance to specific keywords and to
remove barriers to the indexing activities of search engines.
If an author is looking for a literary agent it is likely that they will either
look for this via contacts in the industry or through conducting a search on the
internet. A SEO campaign would assist RedStone in attracting incremental
business.
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In addition we will launch with a PR campaign consisting of various lectures and
radio interviews to help brand each author and promote content of book. The area
of focus for our literary agency will be to focus on authors in the field of
health and wellness.
Chapter outlines and book manuscripts should be completed for both authors
represented. A campaign will also take place to continue to secure additional
authors. This will be an ongoing task to keep feelers out to prospective authors
looking to publish his or her work. We need to launch a networking strategy in
order to find places which RedStone can make contact with more publishers and
editors. These include conferences, workshops, seminars both online and in
person. As a back up we also need to plan a strategy for self-publishing that
would include an investor package for funding.
(Estimated expenses: Advertising and Marketing $2,000, Website Design $2,000,
Equipment $2,500, Accounting, Auditing & Legal $2,500, Office & Administration
$2,000, Working Capital $1,250 - Total $12,250)
THIRD QUARTER
Final edits to take place for manuscripts in order to secure publishing
contracts. We will be sourcing retails contacts to ensure distribution to lineup
with PR Campaigns. Retail contacts will be comprised of both offline and online
retailers. For example, we will look to secure books to be downloaded via Itunes
or purchased at Barnes and Noble. Both outlets provide a retail connection for
consumers to purchase the book titles.
(Estimated expenses: Advertising and Marketing $4,000, Accounting, Auditing &
Legal $2,500, Office & Administration $2,000, Working Capital $1,250 - Total
$9,750)
FOURTH QUARTER
A PR campaign for completed manuscript Authors will still extend to radio and
seminars in regional areas. As we procure more authors the process of going from
outlines, edit and manuscript rotate with networking and PR support. An author
would appear on various regional media outlets to not only share the new book
but also share that he or she will be speaking in the area at a specific
location. For example, if one of our titles is written by a Cardiologist on the
topic of heart disease we would have him or her on media outlets to talk about
the new book and also share that Dr. XYZ will be having a seminar at location AA
and it is open to the public. Typically speaking events result in increased
awareness and incremental book sales. Books would also be on sale at the
seminar.
(Estimated expenses: Advertising and Marketing $3,500, Accounting, Auditing &
Legal $3,000, Office & Administration $2,000, Working Capital $1,250 - Total
$9,750)
Our continued operations depend on literary trends. If our authors and literary
works are not trending topics publishing houses are looking for this could
adversely affect our business. The proper representation of trending and expert
authors important to our success and competitive position, and the inability to
continue to develop and offer such unique products to our customers could harm
our business. We cannot be certain that any author and his or her topic of
10
literature will be in demand. In addition, there are no assurances that our
future authors will be successful, and any unsuccessful literary representation
could adversely affect our business.
Competition in the literary industry is fierce. If we can not successfully
compete, our business may be adversely affected. If we are able to establish our
business we will compete against a large number of well-established companies
with greater product and name recognition and with substantially greater
financial, marketing and distribution capabilities than ours, as well as against
a large number of small specialty producers. There can be no assurance that we
can compete successfully in this complex and changing market.
OFF-BALANCE SHEET ARRANGEMENTS
We have no off-balance sheet arrangements.
ITEM 4. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Management maintains "disclosure controls and procedures," as such term is
defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the
"Exchange Act"), that are designed to ensure that information required to be
disclosed in our Exchange Act reports is recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commission rules and forms, and that such information is accumulated and
communicated to management, including our Chief Executive Officer and Chief
Financial Officer, as appropriate, to allow timely decisions regarding required
disclosure.
In connection with the preparation of this quarterly report on Form 10-Q, an
evaluation was carried out by management, with the participation of the Chief
Executive Officer and the Chief Financial Officer, of the effectiveness of our
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
under the Exchange Act) as of September 30, 2012.
Based on that evaluation, management concluded, as of the end of the period
covered by this report, that our disclosure controls and procedures were
effective in recording, processing, summarizing, and reporting information
required to be disclosed, within the time periods specified in the Securities
and Exchange Commission's rules and forms.
CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING
As of the end of the period covered by this report, there have been no changes
in our internal controls over financial reporting during the quarter ended
September 30, 2012, that materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting subsequent to
the date of management's last evaluation.
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PART II. OTHER INFORMATION
ITEM 6. EXHIBITS
The following exhibits are included with this quarterly filing. Those marked
with an asterisk and required to be filed hereunder, are incorporated by
reference and can be found in their entirety in our Registration Statement on
Form S-1, filed under SEC File Number 333-173164, at the SEC website at
www.sec.gov:
Exhibit No. Description
----------- -----------
3.1 Articles of Incorporation*
3.2 Bylaws*
31.1 Certification pursuant to Rule 13a-14(a) under the Exchange Act of
1934
31.2 Certification pursuant to Rule 13a-14(a) under the Exchange Act of
1934
32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101 Interactive data files pursuant to Rule 405 of Regulation S-T
SIGNATURES
In accordance with the requirements of the Securities Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized, on November 21, 2012.
Redstone Literary, Inc., Registrant
By: /s/ Mary S. Wolf
---------------------------------------
Mary S. Wolf, Director, President,
Principal Executive Officer, Principal
Financial Officer and Principal
Accounting Officer
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
Redstone Literary, Inc., Registrant
November 21, 2012
By: /s/ Mary S. Wolf
---------------------------------------
Mary S. Wolf, Director, President,
Principal Executive Officer, Principal
Financial Officer and Principal
Accounting Officer
12