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, 2013
Commission File Number 000-55049
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 12, 2013, 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 12, 2013.
ITEM 1. FINANCIAL STATEMENTS
Redstone Literary Agents, Inc.
Balance Sheets
(A Development Stage Company)
(Expressed in US Dollars)
--------------------------------------------------------------------------------
September 30, December 31,
2013 2012
-------- --------
(Unaudited) (Audited)
ASSETS
CURRENT ASSETS
Cash $ 26,116 $ 41,789
-------- --------
TOTAL ASSTS $ 26,116 $ 41,789
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ -- $ --
Loans from related parties 9,161 9,161
-------- --------
TOTAL CURRENT LIABILITIES 9,161 9,161
-------- --------
STOCKHOLDERS' EQUITY
Capital stock
Authorized 75,000,000 ordinary voting shares at $0.001 per share
Issued and outstanding:
6,000,000 common shares at par value 6,000 6,000
Additional paid in capital 54,000 54,000
Share subscription receivable -- --
-------- --------
60,000 60,000
Deficit accumulated during the development stage (43,045) (27,372)
-------- --------
TOTAL STOCKHOLDERS' EQUITY 16,955 32,628
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 26,116 $ 41,789
======== ========
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,
2013 2012 2013 2012 2013
---------- ---------- ---------- ---------- ----------
SALES $ -- $ 3,750 $ -- $ 3,750 $ 11,150
GENERAL AND ADMINISTRATIVE EXPENSES
Bank charges and interest 51 17 153 164 882
Consulting fees 250 4,080 950 5,430 12,130
Professional fees 1,500 1,500 6,250 7,750 23,700
Filing and transfer fees 5,800 -- 7,753 -- 7,753
Office expenses 242 1,232 567 2,756 9,730
---------- ---------- ---------- ---------- ----------
Total general and administrative expenses 7,843 6,829 15,673 16,100 54,195
---------- ---------- ---------- ---------- ----------
Net loss $ (7,843) $ (3,079) $ (15,673) $ (12,350) $ (43,045)
========== ========== ========== ========== ==========
EARNINGS PER SHARE - BASIC AND DILUTED $ (0.00) $ (0.00) $ (0.00) $ (0.00)
========== ========== ========== ==========
WEIGHTED AVERAGE OUTSTANDING SHARES 6,000,000 4,200,000 6,000,000 4,200,000
========== ========== ========== ==========
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,
2013 2012 2013
-------- -------- --------
CASH DERIVED FROM (USED FOR) OPERATING ACTIVITIES
Net loss for the period $(15,673) $(12,350) $(43,045)
Adjustments to reconcile net loss to net cash
Provided by (used in) operating activities
Changes in operating assets and liabilities
Accounts payable -- -- --
-------- -------- --------
Net cash (used in) operating activities (15,673) (12,350) (43,045)
-------- -------- --------
FINANCING ACTIVITIES
Loans from related party -- 4,000 9,161
Shares subscribed for cash -- 29,100 60,000
-------- -------- --------
Net cash provided by financing activities -- 33,100 69,161
-------- -------- --------
INVESTING ACTIVITIES -- -- --
-------- -------- --------
Net cash used for investing activities -- -- --
-------- -------- --------
Cash increase during the period (15,673) 20,750 26,116
Cash beginning of the period 41,789 920 --
-------- -------- --------
Cash end of the period $ 26,116 $ 21,670 $ 26,116
======== ======== ========
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Redstone Literary Agents, Inc.
Notes to Financial Statements
September 30, 2013
(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 $43,045 as at September 30, 2013 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, 2013, 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, 2013
(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, 2013, the Company has issued 6,000,000 shares of common
stock for total cash proceeds of $60,000. At September 30, 2013 there were no
outstanding stock options or warrants.
4. INCOME TAXES
As of September 30, 2013, the Company had net operating loss carry forwards of
approximately $43,045 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, 2013, we had cash on hand of $26,116 and $9,161 in outstanding
liabilities.
We had $0 and $3,750 in revenue for the three months ended September 30, 2013
and 2012, respectively. We incurred operating expenses of $7,843 and $6,829 for
the three months ended September 30, 2013 and 2012, respectively. These expenses
consisted of general and administrative expenses.
We had $0 and $3,750 in revenue for the nine months ended September 30, 2013 and
2012, respectively. We incurred operating expenses of $15,673 and $16,100 for
the nine months ended September 30, 2013 and 2012, 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. During the year ended December 31, 2013 we
completed an offering of 3,000,000 shares at a price of $0.015 per share for
proceeds of $45,000. Our financial statements from inception (July 20, 2010)
through September 30, 2013 report $11,150 in revenues and net losses of $43,045.
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The following table provides selected financial data about our company for the
period ended September 30, 2013:
Balance Sheet Data: 09/30/13
------------------- --------
Cash $26,116
Total assets $26,116
Total liabilities $ 9,161
Shareholders' equity $16,955
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 $26,116 cash in the bank which comprises our total assets.
Management believes that the current cash is sufficient to fund operations for
the next twelve months.
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. The following chart outlines how we plan to use the proceeds from our
recent 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
=======
The milestones for the twelve months following funding are:
FIRST QUARTER - JANUARY-MARCH 2013
We produced and 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. We completed and set up a
social media account for RedStone Literary Agents LLC on Twitter.
8
Clients First was already working with a Publisher but asked that we provided
publishing support for advance copies to secure the New York Bestseller listing
at launch which was October 2012. It did in fact reach the best seller list.
Social media accounts were also created for the book in order to secure more
awareness for post launch efforts.
The second contract also had a Publisher but requested media relations support
and social media support for the author in Canada and USA. The Alzheimer's
Prevention Cookbook and a website for Marwansabbaghmd.com was created to assist
in the procurement of media and social media postings. Twitter was also created
for him and is currently being maintained by a consultant we hired to assist us
who has public relations and social media experience in both countries.
Author bios were completed as well as headshots and chapter outlines for each
author. The Website for the company is on hold until more authors are secured
for promotion. Social media seems to be a very effective tool to promote these
authors and increase sales of books. That said, it is a strategy we would like
to continue pursuing. We will also secured a freelance editor to work with each
author to complete chapter outlines and synopsis of book.
In addition, began 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
hired a Publicist to give Authors advance promotion and she is also as stated
above assisting with social media awareness. 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 - APRIL - JUNE 2013
Resources have been limited to hire a part time assistant who would be
responsible for many aspects of our operation, from administration to book title
procurement. A book selling strategy is being explored to find the right
publisher in order to negotiate successful publishing deals. 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.
9
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.
THIRD QUARTER - JULY - SEPTEMBER 2013
We obtained bids for 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 for author
procurement. As it turned out a number of vendors were late giving us their
submissions and so we will be addressing this later in the fall.
We have been to be actively looking for authors to procure literary
representation.
(Estimated expenses: Advertising and Marketing $10,000, Accounting, Auditing &
Legal $2,500, Office & Administration $2,000, Working Capital $1,250 - Total
$15,750)
FOURTH QUARTER - OCTOBER - DECEMBER 2013
The SEO third party vendor has been shortlisted to two organizations. Each
company is providing references and examples of campaigns. A PR plan 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
10
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
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, 2013.
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, 2013, 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 12, 2013.
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 12, 2013
By: /s/ Mary S. Wolf
---------------------------------------
Mary S. Wolf, Director, President,
Principal Executive Officer,
Principal Financial Officer and
Principal Accounting Officer
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