AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION ON JULY 15, 2005 REGISTRATION NO.: 333-123611
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 2 TO
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
FUTURA PICTURES, INC.
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
DELAWARE 7200
(State or Jurisdiction of (Primary Standard Industrial
Incorporation or Organization) Classification Code Number)
56-2495218
(IRS Employer Identification No.)
17337 VENTURA BOULEVARD, SUITE 208
ENCINO, CALIFORNIA 91316
(818) 759-1876
(Address and Telephone Number of Principal Executive Offices and
Principal Place of Business)
BUDDY YOUNG
17337 VENTURA BOULEVARD, SUITE 208
ENCINO, CALIFORNIA 91316
(818) 759-1876
(Name, Address and Telephone Number of Agent for Service)
COPIES OF COMMUNICATIONS TO:
L. STEPHEN ALBRIGHT, ESQ.
17337 VENTURA BOULEVARD, SUITE 208
ENCINO, CALIFORNIA 91316
(818) 789-0779
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT
IF THIS FORM IS FILED TO REGISTER ADDITIONAL SECURITIES FOR AN OFFERING
PURSUANT TO RULE 462(B) UNDER THE SECURITIES ACT, PLEASE CHECK THE FOLLOWING BOX
AND LIST THE SECURITIES ACT REGISTRATION STATEMENT NUMBER OF THE EARLIER
EFFECTIVE REGISTRATION STATEMENT FOR THE SAME OFFERING. [_]
IF THIS FORM IS A POST-EFFECTIVE AMENDMENT FILED PURSUANT TO RULE 462(C)
UNDER THE SECURITIES ACT, CHECK THE FOLLOWING BOX AND LIST THE SECURITIES ACT
REGISTRATION STATEMENT NUMBER OF THE EARLIER EFFECTIVE REGISTRATION STATEMENT
FOR THE SAME OFFERING. [_]
IF THIS FORM IS A POST-EFFECTIVE AMENDMENT FILED PURSUANT TO RULE 462(D)
UNDER THE SECURITIES ACT, CHECK THE FOLLOWING BOX AND LIST THE SECURITIES ACT
REGISTRATION STATEMENT NUMBER OF THE EARLIER EFFECTIVE REGISTRATION STATEMENT
FOR THE SAME OFFERING. [_]
IF DELIVERY OF THE PROSPECTUS IS EXPECTED TO BE MADE PURSUANT TO RULE 434,
PLEASE CHECK THE FOLLOWING BOX. [_]
CALCULATION OF REGISTRATION FEE
======================================================================================
TITLE OF PROPOSED MAXIMUM PROPOSED AMOUNT OF
SECURITIES AMOUNT TO BE OFFERING PRICE MAXIMUM AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PER SHARE (1) OFFERING PRICE FEE
- ----------------- ------------ ---------------- ----------------- ------------
Common Stock 3,000,000 $0.20 $600,000 $70.62
- ----------
<FN>
(1) Estimated solely for purpose of calculating the registration fee pursuant to
Rule 457(c).
</FN>
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
PROSPECTUS
Dated July __ , 2005 Subject to Completion
$600,000
FUTURA PICTURES, INC.
3,000,000 SHARES OF COMMON STOCK
This is our initial public offering. We are offering up to 3,000,000
shares of our common stock for $0.20 per share with no minimum purchase
requirements. Our officers, on a "best efforts" basis, are selling the offering,
there is no minimum number of shares that must be sold and there are no escrow
arrangements for the proceeds. There is no public market for the shares. The
offering will terminate upon the earlier of two years from the date of this
prospectus or the listing of our shares in a public market. The price of the
common stock has been arbitrarily determined by us.
PLEASE REVIEW THE "RISK FACTORS" WHICH BEGIN ON PAGE 5. THESE PROVIDE
IMPORTANT INFORMATION REGARDING THE RISKS ASSOCIATED WITH THE PURCHASE OF
SHARES. YOU SHOULD PURCHASE THESE SHARES ONLY IF YOU CAN AFFORD TO LOSE YOUR
ENTIRE INVESTMENT.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Price to Offering Proceeds
Purchasers Expenses to Company
- --------------------------------------------------------------------------------
Per share.......................... $0.20 $0.02 $0.18
Aggregate.......................... $600,000 $60,000 $540,000
================================================================================
Assumes the sale of all 3,000,000 shares of common stock we are offering.
This prospectus is dated July__, 2005.
1
TABLE OF CONTENTS
PAGE
----
Prospectus Summary......................................................... 3
Risk Factors............................................................... 5
Disclosure Regarding Forward Looking Statements............................ 7
Use of Proceeds............................................................ 8
Dilution................................................................... 9
Market for Common Equity and Related Stockholder Information............... 9
Determination of Offering Price............................................ 11
Management's Discussion and Analysis or Plan of Operation.................. 12
Business................................................................... 14
Management................................................................. 20
Certain Relationships and Related Transactions............................. 24
Principal Stockholders .................................................... 25
Plan of Distribution....................................................... 26
Description of Securities.................................................. 27
Disclosure of Commission Position on Indemnification for
Securities Act Liabilities.............................................. 27
Legal Matters.............................................................. 27
Experts.................................................................... 28
Where You Can Find More Information........................................ 28
Index to Financial Statements.............................................. F-1
Back Cover of Prospectus....................................... (no page number)
-----------
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE
HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT
FROM THAT CONTAINED IN THIS PROSPECTUS. WE ARE OFFERING TO SELL, AND SEEKING
OFFERS TO BUY, SHARES OF THE COMPANY'S COMMON STOCK IN JURISDICTIONS WHERE
OFFERS AND SALES ARE PERMITTED. THE INFORMATION IN THIS PROSPECTUS MAY ONLY BE
ACCURATE AS OF THE DATE OF THIS PROSPECTUS REGARDLESS OF THE TIME OF DELIVERY OF
THIS PROSPECTUS OR OF ANY SALE OF OUR COMMON STOCK.
2
PROSPECTUS SUMMARY
THE COMPANY
Futura Pictures, Inc. (throughout this Prospectus, the terms "we,"
"us," "our," and "Futura Pictures" refer to Futura Pictures, Inc.) was
incorporated in the State of Delaware on December 10, 2003. Our business is the
production, and the co-financing of motion pictures whose production budgets are
estimated to range between $500,000 and $1,500,000, (referred to in this
Prospectus as "low budget films"), produced solely for distribution directly to
the domestic and international home video markets.
Our principal executive offices are located at 17337 Ventura Boulevard,
Suite 208 Encino, California 91316. The phone number is (818) 759-1876.
THE OFFERING
Futura Pictures is offering 3,000,000 of its shares for sale to the
public at a price of $0.20 per share.
SHARES OUTSTANDING PRIOR TO OFFERING
The total number of shares of Futura Pictures's common stock which are
issued and outstanding prior to this offering is 1,250,000. No other shares,
warrants or options for Futura Pictures's common stock have been issued.
SHARES OUTSTANDING ASSUMING THE ENTIRE OFFERING IS SOLD
Assuming that all 3,000,000 shares offered for sale by this offering
are sold, then the total number of Futura Pictures's issued and outstanding
shares would be 4,250,000.
USE OF PROCEEDS
We estimate the expenses of this offering, such as printing, legal and
accounting costs, will be approximately $60,000. If we are successful in selling
all 3,000,000 shares we anticipate having approximately $540,000 in net proceeds
available to us. However, we cannot know how many shares will be sold.
Accordingly, depending upon the amount of proceeds generated by this offering,
we plan to use the balance of the proceeds as follows: 93% for the purpose of
optioning or acquiring screenplays for future production, and the co-financing
of motion pictures whose production budgets are estimated to range between
$500,000 and $1,500,000. These motion pictures will be distributed directly to
home video, and will not have any traditional theatrical distribution. We plan
to finance 100% of certain films, if and when our capital resources permit.
There can be no assurance that our financial resources will ever be adequate
enough to finance 100% of the production costs.
The remaining 7% will be used for general working capital. General
working capital funds will be used to pay base salaries to management personnel,
script readers and to pay salaries to administrative office personnel, rent, and
other general office expenses. The number of people hired
3
will depend upon the funds available to us for these purposes. We do not believe
we require any additional management or administrative personnel to implement
our business plan. However, if we are unable to raise sufficient funds via this
Offering or via a private placement of our stock, and are unable to access
traditional borrowing sources, we will be extremely limited as to our ability to
produce or co-finance a motion picture (see RISK FACTORS page 5). None of the
proceeds of this Offering will be used to repay loans from our president and
principal shareholder.
SUMMARY FINANCIAL DATA
The data summarized below is not complete. It should be read in conjunction
with the Company's financial statements and accompanying notes contained in this
registration statement on page F-1 and following pages.
From
For the December 10,
Three Months 2003 (Date of
Ended Inception) to
May 31, May 31,
2005 2005
-------- --------
INCOME STATEMENT DATA
Net Revenue ............................ $ -- $ --
Net Loss ............................... (11,067) (16,919)
Net Loss per Share ..................... $ (0.01) $ (0.01)
BALANCE SHEET DATA
Cash ................................... $ 3,623 $ 3,623
Total Assets ........................... 18,081 18,081
Stockholders' Equity ................... $ 18,081 $ 18,081
4
RISK FACTORS
An investment in shares of Futura Pictures common stock involves a high
degree of risk. Management believes that all the material risk factor have been
addressed in this section. You should carefully consider the following factors
and the other information contained in this prospectus before deciding to
purchase shares in Futura Pictures.
You should consider these risks as well as the uncertainties, delays
and difficulties normally associated with the development or expansion of any
new business, many of which may be beyond our control.
WITH NO OPERATING HISTORY, IT IS DIFFICULT TO PREDICT WHETHER OR NOT WE
WILL BE SUCCESSFUL. We have no operating history. This factor makes it more
difficult and riskier for you to estimate our chances for success. We
incorporated Futura Pictures on December 10, 2003 and had no operations until
January 2005. We initiated our operations on January 19, 2005 when we acquired
an option on a screenplay entitled, CASS & KARRI, written by Don Tsuchiyama.
Additionally, on January 24, 2005 we acquired an option on a screenplay
entitled, LIFE-DOT-COM, written by Frank Gillman. As indicated above, we very
recently started our operations, and therefore, the following limited financial
information has been included this prospectus:
OUR INDEPENDENT AUDITORS HAVE EXPRESSED DOUBT ABOUT OUR ABILITY TO
CONTINUE AS A GOING CONCERN, WHICH MAY HINDER OUR ABILITY TO OBTAIN FUTURE
FINANCING.
In their report dated March 18, 2005, our independent auditors stated
that our financial statements for the year ended February 28, 2005 were prepared
assuming that we would continue as a going concern. Our ability to continue as a
going concern is an issue raised as a result of our planned production of films
and our current cash resources. Our ability to continue as a going concern is
subject to our ability to obtain necessary funding from outside sources,
including obtaining funding from the sale of our securities included in this
filing, generating positive cash flows form the planned sale of films or
obtaining loans and grants from various financial institutions where possible.
The going concern qualification in the auditor's report increases the difficulty
in meeting such goals and there can be no assurances that such methods will
prove successful.
OUR OPERATIONS WILL REQUIRE OUTSIDE FINANCING THAT MAY NOT BE AVAILABLE
TO US OR MAY NOT BE AVAILABLE ON FAVORABLE TERMS. Assuming that we are able to
sell all of the shares offered by this prospectus, we believe that will be able
to fund operations for the next 12 months. If we sell fewer shares than are
offered, we may seek additional equity or debt financing. If this is the case,
we may not be able to obtain such financing on favorable terms, if at all.
ADVERSE EFFECTS IF ONLY A NOMINAL AMOUNT OF SECURITIES IS SOLD IN THIS
OFFERING.
If we are unable to sell more than a nominal amount of securities via
this Offering, and are unable to raise additional funds through a private
placement of our stock, or through traditional borrowing sources, we will be
unable to either produce or co-finance any motion picture. Management believes
that in order to implement our business plan we must raise approximately
5
$300,000. If that amount is not available from any of these sources, we may be
required to scale back our planned operations, or be forced to totally abandon
our business plan and seek other business opportunities in a related or
unrelated industry. Such opportunities may include a reverse merger with a
privately held company. The result of which could cause the existing shareholder
to be severely diluted. As we cannot predict if and when this prospectus will be
declared effective by the Securities and Exchange Commission, nor how successful
this offering will be, nor how much, if any, funds we can raise through other
sources, we cannot predict whether we will ever be able to implement our plan of
producing or co-financing motion pictures, and as a result, cannot predict
whether or not the Company will ever earn revenues.
POSSIBLE SUBSTANTIAL DILUTION.
Two companies previously controlled by Mr. Young and other members of
our management entered into reverse merger transactions with privately held
companies. These transactions resulted in significant dilution to the existing
shareholders of these companies. Additionally, Further equity or debt financing
would result in diluting our existing stockholders' equity. We are unable to
predict whether any debt or equity financing would result in dilution that would
be substantial. Additionally, any debt financing would increase our need for
cash to service the debt.
BLANK CHECK COMPANIES.
The Securities & Exchange Commission defines a blank check company as a
development stage company that has no specific business plan or purpose or has
indicated its business plan is to engage in a merger or acquisition with an
unidentified company or companies, other entity, or person. Because of the
nature of blank check companies, the SEC does not allow them to use some of the
exemptions from the registration requirements when selling their securities.
However, management does not believe Futura is a blank check company as defined
by the SEC for the following reasons: (a) we have a specific business plan in a
targeted industry, (b) we have secured options on two (2) screen plays, (c) the
proceeds of this offering are specifically allocated, and (d) management is made
up of individuals who have a significant amount of experience in the motion
picture industry, including production, marketing and distribution.
NONE OF OUR CURRENT MANAGEMENT HAS AN EMPLOYMENT CONTRACT OR RECEIVES
ANY CASH COMPENSATION. Our success depends in large part on the continued
service of Buddy Young, our president and chief executive officer, Frank Capra
Jr., our vice president of production, Joseph Adelman, our vice president of
distribution, Dennis Spiegelman, our director of development, and Mel Powell,
director of acquisitions. None of our officers have employment contracts with
us. Further, due to our very limited cash resources, none of our officers have
received any cash compensation to date and no arrangements have been made or
agreed upon with any of them as to cash compensation in the future.
IF WE WERE TO LOSE THE SERVICES OF OUR CURRENT MANAGEMENT, WE MIGHT NOT
BE ABLE TO FIND SUITABLE REPLACEMENTS. As stated above, our success depends in
large part on the continued service of our president and chief executive
officer, and our vice presidents of production and distribution. The loss of the
services of any of these key individuals could have a material adverse effect on
our business. Competition for qualified personnel is intense and there are a
limited number of people
6
with knowledge of and experience in the motion picture industry who are willing
to initially work without receiving compensation. If any of our current officers
left us, we might not be able to find qualified replacements and might be forced
to make significant changes to our business.
AS A RESULT OF OUR LIMITED CAPITAL RESOURCES, OUR CURRENT STAFF IS VERY
RESTRICTED. Currently we do not have any full time employees. Until cash flow
permits, we will continue to utilize independent outside resources and part time
personnel for legal, accounting, and administrative functions. Our management
devotes approximately 20% of their time to Futura Pictures. All of our current
officers have various outside business interests that preclude them from
devoting full time to the operations of the Company. None of these
aforementioned interests are in conflict with the Company's business. We
anticipate that each of our officers will be able to devote approximately 20% of
their time to our operations. However, we have no control over the amount of
time the officers will devote to the Company.
THERE IS NO ASSURANCE THAT WE WILL BE ABLE TO DEVELOP A PUBLIC MARKET
FOR OUR STOCK AND INVESTORS MAY NOT BE ABLE TO SELL THEIR SECURITIES. Currently,
there is no trading market for any of our stock. Although we contemplate
developing a market for our stock in the future, there can be no assurance that
a market for our stock will be created or, if such a market is created, that it
will be sustained. Accordingly, purchasers of the stock may have to hold the
stock indefinitely. Further, the Securities and Exchange Commission has adopted
regulations which define a "Penny Stock" to be any equity security that has a
market price (as therein defined) of less than $5.00 per share or an exercise
price of less than $5.00 per share, subject to certain exceptions. For any
transactions involving a penny stock , unless exempt, the rules require the
delivery, prior to any transaction involving a penny stock by a retail customer,
of a disclosure schedule prepared by the Commission relating to the penny stock
market. Disclosure is also required to be made about commissions payable to both
the Broker/Dealer and the registered representative and current quotations for
the securities. Finally, monthly statements are required to be sent disclosing
recent price information for the penny stock held in the account and information
on the limited market in penny stocks.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
All statements, other than statements of historical fact, contained
within this prospectus constitute "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. In some cases
you can identify forward-looking statements by terms such as "may," "intend,"
"might," "should," "could," "would," "expect," "believe," "estimate,"
"potential," "anticipate" or the negative of these terms, and similar
expressions intended to identify forward-looking statements.
These forward-looking statements reflect our current views with respect
to future events and are based on assumptions and subject to risks and
uncertainties. Also, these forward-looking statements present our estimates and
assumptions only as of the date of this prospectus. Except for our ongoing
obligation to disclose material information as required by federal securities
laws, we do not intend to update you concerning any future revisions to any
forward-looking statements to reflect events or circumstances occurring after
the date of this prospectus.
7
Actual results may differ substantially from the results that the
forward-looking statements suggest for various reasons, including those
discussed in the section entitled "Risk Factors."
USE OF PROCEEDS
The following table describes how we plan to allocate the proceeds of
this offering, assuming we sell either half or all of the 3,000,000 shares of
common stock we are offering:
Sale of Sale of
1,500,000 3,000,000
Shares Shares
(50% of (100% of
Offering) Offering)
-------- --------
Gross proceeds ................................. $300,000 $600,000
Estimated offering expenses (e.g.,
printing and mailing costs, legal and
accounting fees, SEC registration fee,
and blue sky fees) .......................... 60,000 60,000
-------- --------
Estimated net proceeds ......................... $240,000 $540,000
======== ========
Estimated uses of proceeds
Acquisition or optioning of screenplays,
and the co-Financing of low budget films . $200,000 $500,000
General working capital ........................ 40,000 40,000
-------- --------
$240,000 $540,000
======== ========
Assuming the sale of 3,000,000 shares in the offering, we believe that
the net proceeds of the offering will be sufficient to cover our existing
capital needs for at least the next twelve months. If we sell fewer than
3,000,000 shares, we may be required to seek financing from other sources or
scale back our business plans accordingly.
A slightly more detailed analysis of our use of proceeds includes the
following. $500,000, representing approximately 93% of the net proceeds, will be
used for the acquisition or optioning of screenplays and the co-financing of low
budget motion pictures for distribution directly to the domestic and
international home video markets. The remaining $40,000, representing
approximately 7% of the net proceeds, will be used to pay general and
administrative costs during the next 12 months. These costs include professional
fees of approximately $24,000, utilities totaling approximately $6,000, and
miscellaneous office expense and consulting fees totaling $10,000. We do not
anticipate hiring any salaried employees during the next 12 months.
8
The amounts allocated as outlined above, will be adjusted in accordance
with the results of this offering. If we are not successful in raising the full
amount of the offering, each category listed above, will be proportionately
decreased.
If and when Futura Pictures's stock becomes publicly traded, whether on
a national exchange, NASDAQ, the OTC Bulletin Board or the Pink Sheets, then
this offering will automatically terminate and no further shares offered will be
sold. Thus, the amount of proceeds from the sale of shares in this offering may
be reduced if Futura Pictures's shares become publicly traded before all
3,000,000 shares are sold.
If we sell less than fifty percent (50%) of this offering, we will use
the proceeds to first pay the costs of this offering, such as printing, legal
and accounting costs, which are estimated to be approximately $60,000. The
balance of the net proceeds will be used as follows: 80% to 85% for the
acquisition or optioning of screenplays and the financing or co-financing of low
budget motion pictures; 15% to 20% for general working capital. None of the
proceeds of this Offering will be used to repay loans from our president and
principal shareholder.
DILUTION
NUMBER OF SHARES SOLD
---------------------------
1,500,000 3,000,000
--------- ---------
Offering price per share of common stock $ 0.20 $ 0.20
Net tangible book value per share
as of May 31, 2005 $ 0.00 $ 0.00
Increase in net tangible book value
per share attributable to new investors $ 0.09 $ 0.13
Pro forma net tangible book value per share
as of May 31, 2005 after the offering $ 0.09 $ 0.13
Per share immediate dilution of net tangible
book value per share to new investors $ 0.11 $ 0.07
Percentage Dilution Per Share 56% 36%
The net tangible assets consists of the cash balance of $3,623 at May 31, 2005.
MARKET FOR COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
NO PUBLIC MARKET
There is currently no public market for our common stock. When we
receive notice from the Securities and Exchange Commission that this
registration statement has become effective, we will seek to have our stock
quoted for trading on either the Over-The-Counter Bulletin Board System (also
known as "OTCBB") or the Pink Sheets Electronic Quotation Service. There can be
no
9
assurance that this registration statement will be declared effective by the
Commission or that we will qualify to have our stock quoted on the OTCBB, the
Pink Sheets Electronic Quotation System or any stock exchange or stock market.
Both the OTCBB and the Pink Sheets Electronic Quotation Service have
very minimal listing requirements imposed on companies that desire to be listed
in their systems.
The OTCBB requires that the company's stock be registered with the
Securities and Exchange Commission, that the company be current with its
Securities and Exchange Commission filing requirements, and have at lease one
(1) market maker. There are no requirements as to stock price, bid and asked
quotes, number of shareholders, the number of shares held by each shareholder,
or the number of shares traded.
The Pink Sheets quotation system requires that the company's stock be
registered with the Securities and Exchange Commission, have at least one (1)
market maker and have a Form 15-211(c) on file with the National Association of
Securities Dealers (also known as the NASD). The Pink Sheets do not have any
minimum requirements as to stock price, bid and asked quotes, number of
shareholders, the number of shares held by each shareholder, or the number of
shares traded.
If and when Futura Pictures is successful in having its shares listed
and publicly traded, this offering will automatically terminate. The reason that
the offering will be terminated is that it is impossible for the Company to know
what the market price of the Company's stock will be once it is listed on a
securities market, and therefore, it would be inappropriate to continue to offer
stock under this Registration Statement at a predetermined price.
If we require additional funding following the termination of this
offering, the Company may sell additional equity through a private placement of
its stock, or incur debt. There can be no assurance that will be successful in
these efforts. Additionally, the raising of funds through the sale of equity or
by incurring debt may cause substantial dilution to the existing shareholders.
COMMON STOCK
The Company's certificate of incorporation provides for the
authorization of 25,000,000 shares of Common Stock, $0.0001 par value. As of
February 28, 2005, 1,250,000 shares of Common Stock were issued and outstanding,
all of which are fully paid and non-assessable. As of February 28, 2005, there
were eight shareholders of record.
The Company has never declared or paid any cash dividends on its Common
Stock. Management currently intends to retain future earnings, if any, for
operations and to develop and expand our business. We do not anticipate paying
any dividends on our Common Stock in the foreseeable future. Any future
determination with respect to the payment of dividends on the Common Stock will
be at the discretion of the board of directors and will depend on, among other
things, operating results, financial condition and capital requirements, the
terms of then-existing indebtedness, general business conditions, and other
factors the board of directors deems relevant.
10
Each share of our Common Stock is entitled to one vote. Our
stockholders have no preemptive rights.
DETERMINATION OF OFFERING PRICE
We have arbitrarily set the offering price for our Common Stock. The
offering price does not bear any direct relationship to our book value,
contemplated earnings, or any other objective standard of worth. No public
market exists for shares of our Common Stock; thus, we have no history of market
prices to use as a measure of the value of the shares we are offering.
If and when we are successful in having our shares listed and publicly
traded, thereby creating a market for the stock, this offering will
automatically terminate and no further shares will be offered for sale or sold
under this offering. The termination will apply to all unsold shares as of the
date Futura Pictures' stock becomes publicly traded.
11
MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATION
CRITICAL ACCOUNTING POLICIES
Our discussion and analysis of our financial condition and results of
operations are based upon our statements, which have been prepared in accordance
with accounting principles generally accepted in the United States. The
preparation of these financial statements requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenues and
expenses. In consultation with our Board of Directors, we have identified one
accounting policy that we believe is key to an understanding of our financial
statements. This is an important accounting policy that requires management's
most difficult, subjective judgment:
NON-CASH EQUITY ISSUANCES. We periodically issue shares of our common
stock in exchange for, or in settlement of, services. Our management values the
shares issued in such transactions at either the then market value of our common
stock, as determined by the Board of Directors and after taking into
consideration factors such as the volume of shares issued or trading
restrictions, or the value of the services received, whichever is more readily
determinable.
GENERAL
Although the Company was incorporated on December 10, 2003, we had no
operations until January 2005. As a result, we had no revenue from operations,
nor did we incur any expense during fiscal 2004. Therefore, no discussion of
that period is presented here.
PLAN OF OPERATION
During the next 12 months our immediate goal and focus will be on
raising the necessary funds to implement our business plan. This will involve
the filing of future amendments to this Registration Statement. If and when this
Registration Statement is declared effective by the Securities and Exchange
Commission, members of management will provide friends and business associates
with a copy of this Prospectus, along with other appropriate information
concerning the Company to ascertain their interest in purchasing shares of our
common stock pursuant to this offering. Additionally, we may seek to raise funds
through a private placement of our stock, and or, through traditional borrowing
sources. As stated earlier, if sufficient funding to meet our needs, which we
estimate to be approximately $300,000, is not available from any of these
sources, we may be required to scale back our planned operations, or be forced
to totally abandon our business plan and seek other business opportunities in a
related or unrelated industry. Such opportunities may include a reverse merger
with a privately held company. The result of which could cause the existing
shareholder to be severely diluted (see RISK FACTORS page 5).
Concurrent with our efforts to raise funds as outlined above, our vice
president of production Frank Capra Jr., will work on further developing the two
screenplays that were optioned by us earlier this year. He will work with the
screenwriters to mold the scripts from their present form into the form that
best combines the artistic elements with the commercial viability of the
resulting film. A
12
careful analysis of the story told by the script will lead to changes such as
strengthening certain aspects of the story by increasing the focus,
Additionally, each scene must be analyzed to determine if its presentation is
best suited to its purpose--will the scene, translate from page to film, make
the point it is intended to make and move the audience in the way the audience
should be moved. Overall, the script development process is designed to maximize
the success of the film by tailoring the script to meet the overall needs of the
story, the production, and the market.
We anticipate that the cash provided to us by our president and
principal shareholder, under a promissory note dated February 16, 2005, will be
sufficient to fund our cash requirements for the above mentioned activities. As
we cannot predict if and when this prospectus will be declared effective by the
Securities and Exchange Commission, nor how successful this offering will be,
nor how much, if any, funds we can raise through other sources, we cannot
predict whether we will ever be able to implement our plan of producing or
co-financing motion pictures, and as a result, cannot predict whether or not the
Company will ever earn revenues (see RISK FACTORS page 5).
We have issued 10,000 shares of our common stock to each of our
directors and executive officers, excluding Buddy Young, our president and
principal shareholder, for services to the Company. These services include
advice on the development of our business plan, introduction to motion picture
production and distribution personnel, assistance in the preparation of this
Registration Statement, and negotiations with screenwriters. We do not have any
consulting or employment agreements with any of our officers or directors.
In February 2005, the Company issued to our president, Buddy Young,
190,000 as compensation for his agreement to lend up to $100,000 to the Company
to fund any cash shortfalls. The note bears interest at 8% and is due no later
than December 31, 2006. No amounts were borrowed or outstanding on this loan at
May 31, 2005. Except for the shares indicated here, no other shares have been
issued to any person or entity for services rendered to the Company.
EMPLOYEES
Due to our very limited financial resources, other than the Company's
President, Buddy Young, along with our vice presidents Frank Capra Jr., Joseph
Adelman, and Mel Powell, our Director of acquisitions, all of whom work on a
part-time basis and have not yet received any cash compensation from the
Company, we have no other full-time or part-time employees. Additionally, we
regularly utilize the services of independent firms to handle our accounting and
certain administrative matters. If and when our capital resource permits, we
will hire full-time professional and administrative employees.
LIQUIDITY AND CAPITAL RESOURCES
We are a development stage company with no operating history.
We had a cash balance of $3,574 on June 30, 2005. We have an agreement
with our President and majority shareholder to fund any shortfall in cash flow
up to $100,000 at 8% interest through February 28, 2006.
13
We believe the raising of funds through this offering and further
borrowings from our President or traditional borrowing sources will be
sufficient to satisfy our budgeted cash requirements through February 28, 2006.
Additionally, we may continue to attempt to raise funds through a private
placement sale of our common stock. Further, our ability to pursue any business
opportunity that requires us to make cash payments would also depend on the
amount of funds that we can secure from these various sources. If funding is not
available from any of these sources to meet our needs, we will delay any further
acquisitions of literary properties, and delay any business transaction
requiring the payment of cash.
BUSINESS
DEVELOPMENT OF BUSINESS
We were incorporated in the State of Delaware on December 10, 2003.
During the next twelve months management devoted its time to develop our
business plan of producing and co-financing motion pictures whose production
budgets are estimated to range between $500,000 and $1,500,000, (referred to in
this Prospectus as "low budget films"), produced solely for distribution to the
domestic and international home video markets.
On January 19, 2005 we acquired an option on a screenplay entitled CASS
& KARRI, written by Don Tsuchiyama. The plot revolves around two mismatched
young women, both accomplished thieves, who are hired to steal a high-tech
"invisibility" suit. The intrigue is whether the people who hired them are the
good guys they claim to be...or is something far more devious and dangerous
behind this caper? The two women, despite mutual disgust for each other, need to
figure it out to save their skins.
Additionally, on January 24, 2005 we acquired an option on a screenplay
entitled LIFE-DOT-COM, written by Frank Gillman. The sci-fi comedy plot revolves
around a brilliantly-creative but workaholic young woman who is the writer of
several internet-broadcast interactive "television" shows, all big hits. A freak
power surge, along with the perfect alignment of the planets, zaps her into her
own shows, trapped in the world of the characters she has created. The only way
out is to find the balance that's been missing in her life.
DESCRIPTION OF BUSINESS
As stated earlier, our business is the co-financing or producing of
motion pictures whose production budgets are estimated to range between $500,000
and $1,500,000, produced solely for distribution to the domestic and
international home video markets. These films will mainly be targeted to family
audiences, encompassing among others, such genres as sports, sci-fi, mystery,
action/adventure and comedy. We do not intend to co-finance or produce any
x-rated films.
GENERAL
OVERVIEW OF THE MOTION PICTURE INDUSTRY
As demonstrated by the changes in the motion picture industry, the
production and
14
distribution of motion pictures is no longer limited to "traditional"
distribution through theaters, cable and satellite broadcasts. For the past
three years, the motion picture industry had been steadily expanding to include
the "direct to home video" segment of the market. Consequently, there are
increasing numbers of motion pictures which are being produced for release and
distribution in the home video market and "direct to home video" has become part
of the motion picture industry. Except for the final distribution of the
completed project, the production of motion pictures has not changed and the
Company will follow traditional routes in that regard.
Although our company's business is the producing and co-financing of
low budget motion pictures produced solely for distribution to the domestic and
international home video markets, we thought it would be helpful to provide you
with a general overview of the motion picture industry, and a detailed look at
the home video market.
The industry is dominated by the so-called "major" motion picture
studios: Disney (including Miramax Films), MGM-UA, Paramount, Sony Pictures
Entertainment (including both Columbia Pictures and Tri-Star Pictures),
Twentieth Century Fox, Universal, and Warner Brothers. Each of these major
studios is either a large, diversified entertainment corporation or a subsidiary
of an "umbrella" corporation, and all have strong, long-standing relationships
with creative talent, exhibitors, and others involved in the entertainment
industry. The operations of these companies outside of the motion picture
industry provide stable revenue sources, which offset variations in the
financial performance for their motion picture operations. In addition to the
major companies listed above, the industry is comprised of many small
independent production and distribution companies.
The two principal activities of companies in the industry consist of
production and distribution. Since we plan to use other companies to distribute
the films we co-finance or produce, the discussion below is limited to the
production of motion pictures.
PRODUCTION
Motion picture production breaks down into four stages: development and
finance, pre-production, principal photography, and post-production.
DEVELOPMENT AND FINANCE
Development involves the acquisition of the property that may become
the feature film. This process includes reading existing screenplays and
untapped books, or hearing creative pitches of ideas and stories, seeking the
ones that management believe are the most interesting, entertaining and
commercial. Once a story is acquired, in whatever form, it is put into
development. In most cases, the development process entails the hiring of a
writer to draft a screenplay or re-write the existing screenplay, in order to
present it to directors, actors, and financiers to generate their interest in
participating in the picture. When the producer is convinced that the screenplay
has become strong enough to be commercially viable, the project is packaged with
talent and the pre-sale process commences.
It is at this point that the producer attempts to obtain financing for
the project. Sources of financing typically include the major film studios,
private investors, publicly or privately raised pools
15
of film investment capital, pre-sales of ancillary rights, and guarantees for
United States theatrical distribution rights. Historically, most feature-length
films have been financed by the major motion picture distribution companies.
These companies advance the entire cost of producing the picture, and then
recoups that cost from the revenues generated by the distribution of the picture
in all media. This method of studio-production motion picture financing
continues to exist, but an increasingly prevalent alternative for smaller
production companies is financing obtained either from private investors, from
the "pre-sale" of distribution rights, or through a combination of financing
from both private investors and pre-sales.
A producer can obtain an advance payment, known as pre-selling, for
licensing (prior to the release of the picture) the right to exhibit or exploit
a picture in one or more media in one or more territories. As an example, the
producer might pre-sell the rights to exhibition in the domestic territory--the
United States and Canada--and pre-sell the foreign territories, individually or
in one or more groups, in separate agreements. The rights that a producer may
pre-sell include traditional theatrical exhibition, pay television exhibition,
domestic network television syndication exhibition, foreign television
exhibition, non-theatrical exhibition (such as airlines, armed forces bases, and
educational institutions), and DVDs and videocassettes. In some cases, a portion
of the pre-sale advance is paid upon execution of the pre-sale agreement or
during production of the picture. More commonly, however, the advance is
payable, sometimes in installments, upon or immediately following the completion
of the picture. In this latter case, the producer may generate production cash
by assigning its right to receive payment under the pre-sale agreement to a bank
as security for a loan. While institutional production financing tends to be
difficult for a for smaller production company to obtain, advantageous pre-sale
agreements can tip the scales in the producer's favor. Key factors in making
pre-sales are the quality of the screenplay, the director, and the key actors of
the picture.
PRE-PRODUCTION
Once it is determined that a motion picture screenplay has the
potential for commercial viability, the producer puts the pre-production phase
into action. Key personnel will be hired, building the team of a director,
principal and supporting cast, and production personnel. The project will choose
production locations and set shooting schedules, create a "story board" for the
screenplay, revise and finalize the screenplay, develop a detailed budget, and
complete the financing. Producers generally engage in costly pre-production only
when they believe the project will become a motion picture, but still these
pre-production activities do not ensure that a motion picture will be produced.
The producer may not be able to secure all of the elements necessary to the
production of a commercially viable picture, and even if all of the elements are
secured, the producer may decide not to continue production for any number of
creative or economic reasons. Nevertheless, these steps are vital to the
completion of the picture and maximize its chances of success.
PRINCIPAL PHOTOGRAPHY
Principal photography is the actual filming of a motion picture, scene
by scene and location by location. During this process, weather at exterior
locations, illness of a cast or crew member, and other problems may occur which
may delay production and increase costs. Even where principal photography stays
on schedule and budget, a review of the daily footage may reveal that some
scenes
16
need to be re-filmed. Production budgets will include room for such
contingencies, but this reserve may be insufficient and insurance coverage may
be inadequate to cover additional costs. While most motion pictures reaching
this stage are completed, it is nevertheless possible that funds in excess of
the budgeted amount become necessary but are not available. However, the
producer will have put all elements into play to ensure the best chance of
completion in the commercially viable form intended from the outset.
POST-PRODUCTION
Post-production involves the editing of the picture, adding of music
and sound effects and synchronizing them with the motion picture, and inserting
special effects, among other tasks. The motion picture is brought to the
completed form called the "answer print." During editing, problems may come to
light suggesting that additional photography is needed, or costs may be greater
than anticipated. On the whole, however, motion pictures reaching this stage are
generally completed. At that point, the film is ready for distribution.
THE HOME ENTERTAINMENT MARKET
Once a film is completed, the traditional means of distribution has
been to the movie houses for public viewing. However, increasingly, the industry
now focuses on the delivery of feature films for in-home viewing.
Home video has become a primary focus of both the entertainment
industry and of the consumers who crave motion picture entertainment. Industry
resources such as the Video Software Dealer's Association (VSDA) estimate that
home video accounts for nearly three times the recent feature-film major-studio
revenue than that generated by the traditional theatrical release of the film.
DVD is now considered to be the centerpiece of home entertainment, with
its ease of use, lack of moving parts as compared even to VHS videotapes, and
compact size. In addition, home video includes options unavailable to in-theater
versions of films: the bonus materials, such as interviews, outtakes, and
commentary.
Along with these attributes, home video has affected consumer habits. A
major report in USA Today found that the number of hours spent watching movies
at home is increasing steadily, and many consumers say they don't bother going
to see a movie in a theater, preferring to wait for the home version to be
released. This trend opens the marketplace to direct-to-home-video films, with
their significantly lower costs of duplication.
The market for purchases of home entertainment is at its highest point
in history. The Digital Entertainment Group (a trade association of DVD software
and hardware companies ("DEG") determined that in 2004 some 37 million new DVD
players were sold to consumers. Roughly three-fourths of all television
households in the United States, or 70 million, now own a DVD player. In
contrast, a CBS News report in 2003 noted that DVD home penetration was only at
50%. Meanwhile, VHS is available in almost every television-viewing home in the
United States. Nearly 300 million cassettes were sold in 2003, and although the
market penetration of U.S. households with VCRs has nearly reached full
penetration, still the numbers increase (from 90% to 91% in 2002
17
and 2003, respectively).
The overall sell-through market for home video, including both VHS and
DVD, continues to increase. According to VSDA reports, consumer spending on
home-video entertainment has increased every year since 1981, to $10.2 billion
in 2001, $12.1 billion in 2002, and $14.0 billion in 2003. The projected
revenues for 2004 and forward show a trend of expected consistent increases
every year as far into the future as 2013.
DEG estimates that an additional nine million households also have the
means to play a DVD on a computer or a game console, even if not on a
traditional television screen. DEG estimates that by the end of 2005 the
percentage market penetration will increase to 80%.
In the fourth quarter of 2004, 530 million DVDs were shipped to
retailers, an increase of 39% over the same holiday-season period in 2003.
The overall home video market, including VHS and DVD, increased 9%,
with an estimated total of consumer spending on DVD alone of $21.2 billion.
Driving this market is the timing of the distribution window of feature
films to home-video format. Among the distribution channels available to
filmmakers are pay-per-view, video-on-demand, premium television, basic cable
and network and syndicated television. Because of this highly competitive range
of options, the rapid growth of the DVD industry makes the DVD and home-video
distribution window a significant advantage to the United States retail home
video industry in general.
The expanding number of venues from which DVD and VHS are purchased has
also bolstered the market. Previously, feature films were available on
theatrical screens only. Eventually, they came to television. Now, in the VHS
and DVD formats, they are available not only at "traditional" video retailers
such as Blockbuster, but also at the general chain stores such as Wal-Mart. Thus
home-video playback capability exists in most domestic homes, and DVD and
videocassettes themselves are more readily available. Each of these factors has
combined to explode the market to a public receptive to purchasing DVDs for
in-home entertainment.
The foreign markets are increasingly receptive to the DVD business as
well. By way of example, the Australian Film Commission, an agency of that
nation's government, estimates that by the end of 2003, DVD players were in 60%
of Australian homes. DVD revenue increased from a 2000 level of $69 million to a
2003 level of almost $800 million, an increase of than 1,100%. The industry in
Australia is expected to continue to increase. VHS is already almost universally
available.
COMPETITION
The industry is comprised of numerous large, mid-sized, and small
independent motion picture production companies. Many of these companies have
access to vast financial resources. Additionally, they have established long
standing relationships with talent in all areas of motion picture production. We
cannot and do not intend to compete with either the large or mid-sized
18
companies. Our plan is to co-finance or produce low budget films that are
targeted exclusively for the home video market.
In addition to the films distributed to the home video market following
their theatrical release we will be competing with films produced by companies
that produce movies for cable and network television. In many cases these films
are then made available to the home video market.
Our success will depend in large part on our ability to obtain and
sustain ongoing relationships with writers, directors, actors, and distributors
of motion pictures to the home video market. Although the Company's current
business relationships are limited to the two screenwriters from whom we have
optioned screenplays, members of management, in particular Frank Capra Jr., and
Joseph Adelman, who have both served for many years in various positions within
the motion picure industry, have had and maintain personal relationships with
industry personnel. These relationships will be utilized if and when we are in a
position to produce or co-finance a motion picture. Additionally, and most
importantly, our success is dependant on the quality and entertainment value of
the films either co-financed or produced by us.
EMPLOYEES
Due to our very limited financial resources, other than the Company's
President, Buddy Young, along with our vice presidents Frank Capra Jr, Joseph
Adelman, and Mel Powell, our Director of Acquisitions, all of whom work on a
part time basis and have not yet received any cash compensation from the
Company, we have no other full-time or part-time employees. Additionally, we
regularly utilize the services of independent firms to handle our accounting and
certain legal matters. If and when our capital permits, we will hire full-time
professional and administrative employees (see Employees in Management's
Discussion and Analysis or Plan of Operation, page 13).
DESCRIPTION OF PROPERTY
We currently utilize at no cost office space consisting of
approximately 600 square feet from our Secretary, Director, and corporate
attorney, L. Stephen Albright, located at 17337 Ventura Boulevard, Suite 208,
Encino, California 91316. We anticipate leasing office space from an
unaffiliated third party consisting of approximately 1,000 square feet as soon
as cash resources permit.
We do not have any agreement or understanding with Mr. Albright
regarding future compensation for work. Mr. Albright, at his discretion will
continue to devote time to the Company without compensation. At the Company's
option and discretion, we may issue additional equity to Mr. Albright and at
such time as we have sufficient funds to permit, we may elect to provide cash
compensation to Mr. Albright for his efforts.
LEGAL PROCEEDINGS
As of the date hereof, we are not a party to any material legal
proceedings, and we are not aware of any such claims being contemplated against
us.
19
MANAGEMENT
The following table sets forth the current officers and directors of
Futura Pictures:
NAME AGE POSITION
- ---- --- --------
Buddy Young 70 President, Chief Executive
Officer, Chief Financial
Officer and Chairman
Joseph Adelman 71 Vice President and Director
L. Stephen Albright 53 Secretary and Director
Frank Capra Jr. 71 Vice President
Mel Powell 40 Director
Dennis Spiegelman 59 Director
BUDDY YOUNG has served as president, chief executive officer, chief
financial officer and chairman of the board of directors of Futura Pictures,
Inc. since its inception in December 2003. Additionally, ever since June 2000,
he has served as an officer and director of Advanced Media Training, a company
that produces and distributes management and general workforce training
products. Since August 1996, Mr. Young has also managed a privately owned merger
and acquisition consulting business under the name of Advantage Mergers and
Acquisitions, a fictitious name,(dba) established by Mr. Young for this purpose.
These consulting services focus mainly on expanding a company's business through
mergers or acquisitions. Mr. Young/Advantage does not offer any consulting or
other services relating to the offering or sale of securities. From 1999 through
April 29, 2003, Mr. Young served as the chief executive officer and a director
of Enhance Biotech, Inc. (f.k.a. Becor Communications, Inc.), a company involved
in the development of therapeutic pharmaceuticals. In addition, he currently
serves as a director of the Wien Group, Inc., a publicly held merchant banking
company. Mr. Young was an officer and director of Sporting Magic, Inc., now
known as Next, Inc, a company in the business of marketing, and distributing
licensed and branded promotional products and imprinted sportswear. From August
1998 until he resigned from those positions on February 1, 2002. From March 1998
until July 1999, Mr. Young also served as president, chief executive officer and
a director of MGPX Ventures, Inc., now known as Contango Oil & Gas, Mr. Young
assisted MGPX Ventures in adopting a new business plan and recruiting new
management to implement its operations in the oil and gas exploration industry.
From 1992 until July 1996, Mr. Young served as president and chief executive
officer of Bexy Communications, Inc., a publicly held company, now known as
Cheniere Energy, a natural gas and oil company. For varying periods of time
following his tenure as an officer and director at Enhance Biotech, Cheniere
Energy, and Next, Inc. Mr. Young/Advantage served as a consultant to these
companies and received cash compensation for his consulting services. He no
longer serves as a consultant, nor has any other
20
affiliation with any of these companies. From June 1983 until December 1991, Mr.
Young was president, chief executive officer and a director of Color Systems
Technology, Inc., a publicly held company whose stock traded on the American
Stock Exchange. Color Systems' major line of business is the use of its patented
computer process for the conversion of black and white motion pictures to color.
Prior to joining Color Systems, Mr. Young served from 1965 to 1975 as Director
of West Coast Advertising and Publicity for United Artists Corporation, from
1975 to 1976 as Director of Worldwide Advertising and Publicity for Columbia
Pictures Corp., from 1976 to 1979 as Vice President of Worldwide Advertising and
Publicity for MCA/Universal Pictures, Inc., and from 1981 to 1982 as a principal
in the motion picture consulting firm of Powell & Young, which represented some
of the industry's leading film makers. Enhance Biotech, along with Wien Group,
Next, Contango Oil & Gas, Advanced Media Training and Cheniere Energy are
currently SEC reporting companies. For over thirty-five years, Mr. Young has
been an active member of The Academy of Motion Picture Arts and Sciences and has
served on a number of industry-wide committees.
JOSEPH ADELMAN has served as an officer and director of Futura Pictures
since December 2004. Since 1991 he has served as the Chief Executive Officer of
International Entertainment Enterprises, a leading independent sales and
business representative for United States and international producers and owners
of feature films, documentaries and children's animation. He started his
entertainment industry career in 1958 when he joined the New York legal
department at United Artists Corp. In 1962 he moved to Los Angeles where he
assumed the position of Vice-President, West Coast Business Affairs for United
Artists. From 1977 to 1979 Mr. Adelman served as the Chief Operating Officer of
the Association of Motion Picture & Television Producers, where his
responsibilities included negotiating on behalf of the major motion picture
companies with Hollywood labor unions and with government regulatory agencies.
From 1979 to 1983, he served as Vice President of Business Affairs at
Paramount Pictures supervising all of the feature film production and
distribution negotiations with producers, directors, writers, stars, and
composers. In 1983 he co-founded KidPix, a Distributor of children's animated
features for worldwide television and home video markets. In 1986, and until he
joined International Entertainment Enterprises in 1991, he served as President
of distribution at CST Entertainment, where his duties included overall
responsibility for negotiating and supervising worldwide television, home video
and merchandising licenses for film library consisting of 100 motion pictures
plus cartoon series & TV series.
Mr. Adelman is a graduate of New York University and Harvard law
School, and a member of the Bar in both California and New York. He is currently
a member of the Executive Branch of the Academy of Motion Picture Arts and
Sciences, and the National Association of Television Programming Executives.
L. STEPHEN ALBRIGHT has served as a director and as secretary of Futura
Pictures since its inception in December 2003. Additionally, since June 2000, he
has served as an officer and director of Advanced Media Training . He served in
the same positions with Sporting Magic Inc., now known as Next, Inc. from
September 1998 until January 2000. Since July 2000, Mr. Albright has also served
as a consultant and counsel to Advantage Mergers and Acquisitions, a privately
held merger and acquisition business. Prior to becoming associated with
Advantage Mergers and Acquisitions in
21
July 2000, Mr. Albright was employed as an associate attorney with Wasserman,
Comden & Casselman, L.L.P. a law firm located in Tarzana (Los Angeles)
California from June, 1994 through June, 2000. Mr. Albright started his own law
practice in June, 2000. Mr. Albright received his undergraduate degree in
business administration and marketing from West Virginia University in 1975.
Following careers in industrial sales and new home construction, Mr. Albright
entered Whittier College School of Law in 1980. Mr. Albright was admitted to
practice law in the State of California in 1983. Mr. Albright spent
approximately half of his legal career in private practice, where he has been
primarily engaged in transactional work, business litigation, and providing
general legal business advice to clients. Mr. Albright also spent seven years as
in-house counsel, vice president, general counsel and secretary to Color Systems
Technology, Inc., a publicly-held company whose stock traded on The American
Stock Exchange. While with Color Systems, Mr. Albright was responsible for all
aspects of the company's business, including annual shareholder's meetings;
preparation and filing of the company's proxy materials, annual reports on Form
10-K, and quarterly reports on Form 10-Q; and drafting and negotiating lease
agreements, distribution and licensing agreements and debt and equity funding
arrangements.
FRANK CAPRA JR., has served as an officer of Futura Pictures since
December 2004 in the capacity of vice president of production. He has been the
President and CEO of EUE Screen Gems Studios, a motion picture and television
production studio located in Wilmington, North Carolina, since 1997. The son of
famed Hollywood director Frank Capra, he began his career in the entertainment
industry more than 40 years ago as a second Assistant Director, progressing to
production manager, associate producer and producer. His work includes
television, TV movies and feature films, including wide screen and IMAX formats.
A short list of his major film projects include: GUNSMOKE, ESCAPE FROM THE
PLANET OF THE APES, PLAY IT AGAIN SAM, ESCAPE FROM NEW YORK, and FIRESTARTER. He
also was Executive Producer of DEATH BEFORE DISHONOR.
Frank Capra Jr. teaches classes at the University of North Carolina at
Wilmington, in their film studies program, which he started.
He has a B.A. in Geology from Pomona College and has attended classes
at Cal-Tech. Mr. Capra sits on numerous boards, including the Executives Branch
of the Academy of Motion Pictures Arts and Sciences, the National Board of the
Directors Guild of America and the North Carolina Governor's Film Council. Mr.
Capra received a Directors Guild of America award in 2000 in recognition of his
instrumental role in transforming Wilmington into a regional production center.
MEL POWELL has served as a director since December 2004. Mr. Powell
brings a background in law, writing, and marketing to the Company. He attended
Yale as an undergraduate, and graduated from UCLA Law School in 1988. Mr. Powell
is a member of the California Bar Association, and practiced family law from
1988 through 1992 at the Los Angeles based law firm of Trope & Trope.
Additionally, since June 2000, he has served as an officer and director of
Advanced Media Training, Since 1992 Mr. Powell has been self-employed through
his privately held company, Breakaway Entertainment. During his time at
Breakaway, he has written feature screenplays, teleplays, radio screenplays for
Premiere Radio Networks, and screenplays for corporate training videos.
Additionally, he is an independent associate with Pre-Paid Legal Services, Inc.,
a company that provides legal services to middle- and lower-income individuals
and families, as well as providing legal and other consultation services to
small businesses. He is a member of the Sherman
22
Oaks, CA, Chamber of Commerce and the State Bar of California.
DENNIS SPIEGELMAN has served as a director of Futura Pictures since
December 2004. Mr. Spiegelman is an experienced sales and marketing executive
with a successful track record in many aspects of the entertainment industry.
Since June 2000, he has also served as an officer and director of Advanced Media
Training, He is currently senior vice president of worldwide sales for Axium
Entertainment, a privately held technology and financial services provider to
the entertainment industry. Prior to rejoining Axium in 2004 he served as vice
president of sales and marketing at Cast & Crew Entertainment Services, Inc., a
position he accepted in April 1998. From 1995 to April 1998, Mr. Spiegelman was
the vice president of sales and marketing for Axium Entertainment, Inc. Both
Cast & Crew and Axium specialize in providing payroll and payroll related
services to the motion picture and television entertainment industries. Before
joining Axium, he held similar positions with AP Services, Inc. and IDC
Entertainment Services. During his career of more than 25 years, Mr. Spiegelman
has held various other senior positions, including director of operations at
Heritage Entertainment, and president and director of All American Group, Inc.
While at these companies, Mr. Spiegelman was mainly responsible for the sale of
feature films to foreign theatrical, video, and television markets. In addition,
Mr. Spiegelman has served as executive producer of the theatrical motion picture
entitled NOBODY'S PERFECT and is a past president of Financial, Administrative,
and Management Executives in Entertainment, a 50-year-old networking
organization for entertainment industry executives.
Directors are elected in accordance with our bylaws to serve until the
next annual stockholders meeting and until their successors are elected and
qualified or until their earlier resignation or removal.
Officers are elected by the board of directors and hold office until
the meeting of the board of directors following the next annual meeting of
stockholders and until their successors shall have been chosen and qualified.
Any officer may be removed, with or without cause, by the board of directors.
Any vacancy in any office may be filled by the board of directors.
There is no family relationship between any director or executive
officer of Futura Pictures.
COMPENSATION OF OFFICERS AND DIRECTORS
To date, as a result of our current limited available cash, no officer
or director of Futura Pictures received any cash compensation. We intend to pay
salaries when cash flow permits. With the exception of Buddy Young, our
president and principal shareholder, each of our directors and executive
officers has received 10,000 shares of our common stock as compensation for
their work on our behalf. To date, no officer or director has received any stock
options or other non-cash compensation, except as disclosed above. We currently
have no employment agreement with any officer of Futura Pictures.
23
SUMMARY COMPENSATION TABLE
- ----------------- -------- ------------ --------- ---------------- -------------- --------------- ----------- -----------------
Restricted Securities
Other Annual Stock Underlying LTIP All Other
Name Year Salary Bonus Compensation Awards Options/SARS Payouts Compensation
- ----------------- -------- ------------ --------- ---------------- -------------- --------------- ----------- -----------------
Buddy Young 2004 &
2005 -0- -0- -0- -0- -0- -0- (1)
- ----------------- -------- ------------ --------- ---------------- -------------- --------------- ----------- -----------------
L. Stephen 2004 &
Albright 2005 -0- -0- -0- 10,000 -0- -0- (1) (2)
- ----------------- -------- ------------ --------- ---------------- -------------- --------------- ----------- -----------------
Joseph Adelman 2004 &
2005 -0- -0- -0- 10,000 -0- -0- (1) (2)
- ----------------- -------- ------------ --------- ---------------- -------------- --------------- ----------- -----------------
Dennis 2004 &
Spiegelman 2005 -0- -0- -0- 10,000 -0- -0- (1) (2)
- ----------------- -------- ------------ --------- ---------------- -------------- --------------- ----------- -----------------
Frank Capra, Jr. 2004 &
2005 -0- -0- -0- 10,000 -0- -0- (1) (2)
- ----------------- -------- ------------ --------- ---------------- -------------- --------------- ----------- -----------------
Mel Powell 2004 &
2005 -0- -0- -0- 10,000 -0- -0- (1) (2)
- ----------------- -------- ------------ --------- ---------------- -------------- --------------- ----------- -----------------
(1) All officers and directors assumed their positions in January 2004.
(2) Each received 10,000 shares in January, 2004 in exchange for services
to the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We have an agreement with our President and majority shareholder to
borrow up to $100,000 at 8% interest through February 28, 2006. Repayment is to
be made when funds are available with the balance of principal and interest due
December 31, 2006. Through June 18, 2005, the Company has not borrowed any funds
under this agreement. On February 16, 2005, the Company paid Mr. Young 190,000
shares of the Company's common stock with an aggregate value of $19,000 for the
loan commitment.
We currently utilize, at no cost, office space from L. Stephen
Albright, our Secretary and member of the board of directors, located at 17337
Ventura Blvd., Suite 208 Encino, CA 91316. We anticipate that for the
foreseeable future Mr. Albright will continue to allow us to utilize this space,
consisting of a total of approximately 600 square feet, and that it will be
adequate for our operations through the end of our current fiscal year.
The promoters of the Company consist of the following founding
shareholders, all of whom received their stock in January, 2004. Buddy Young
formed the Company with a capital contribution of $10,000 in exchange for
1,000,000 shares. Mr. Young had those shares issued to the Young
24
Family Trust. Mr. Young and his wife are beneficiaries and trustees of the Young
Family Trust. Joseph Adelman, Dennis Spiegelman, L. Stephen Albright, Mel
Powell, and Frank Capra, Jr. each received 10,000 shares for services rendered
to the Company. All of these transactions were valued at substantially less than
$60,000. Provided, however, that the Young Family Trust received an additional
190,000 shares in exchange for Mr. Young's commitment to provide certain
financing to the Company.
At such time as the Company's revenues may permit, the Company will
consider paying salaries to its officers and directors, some of whom may be
promoters. In the future, the Company may consider paying Mr. Albright for legal
services to the Company. The Company, at its discretion, may issue equity to its
officers, directors, employees, some of whom may be promoters, for services
rendered to the Company.
None of the Company's assets were or are to be acquired from any of the
Company's promoters. Further, no asset of the Company was transferred to any of
the promoters.
PRINCIPAL STOCKHOLDERS
The following table sets forth information about the beneficial
ownership of our outstanding common stock by each person beneficially owning
more than 5% of the shares, by each of our directors and officers, and by all of
our directors and officers as a group. The table shows the number and percentage
of shares held by each person as of February 28, 2005, before the offering
described in this prospectus. The table also shows the number of shares
beneficially owned by each person after the completion of this offering. The
address of each person listed in the table is 17337 Ventura Boulevard, Suite
208, Encino, California 91316.
NUMBER PERCENTAGE PERCENTAGE
OF SHARES OF CLASS OF CLASS
OWNED OWNED OWNED
BEFORE THE BEFORE THE AFTER THE
NAME AND ADDRESS OFFERING OFFERING OFFERING
- --------------------------------- ---------- ---------- ----------
Young Family Trust .............. 1,190,000(1) 95.20% 28.0%
Buddy Young and
Rebecca Young ................... 1,190,000(1) 95.20% 28.0%
Joseph Adelman .................. 10,000 0.80% 0.24%
Stephen Albright ................ 10,000 0.80% 0.24%
Frank Capra Jr. ................. 10,000 0.80% 0.24%
Mel Powell ...................... 10,000 0.80% 0.24%
Dennis Spiegelman ............... 10,000 0.80% 0.24%
25
All officers and directors
as a group (6 persons) ........ 1,240,000 99.20% 29.18%(2)
- ---------------
(1) All of the shares beneficially owned by the Young Family Trust are also
beneficially owned by Buddy Young and Rebecca Young, who, as co-trustees of
the Trust, share voting and investment power over the shares. Buddy Young
is a director and executive officer of Futura Pictures
(2) Assumes that all 3,000,000 of the shares offered by Futura Pictures are
sold in this offering. If we sold none of those shares, then the
percentages shown in this column would increase from 29.18 to 100%.
PLAN OF DISTRIBUTION
We are offering up to 3,000,000 shares of our common stock for $0.20
per in this initial public offering of our common stock. This is a best-efforts
offering and will only be offered for sale by four of our officers and
directors, namely, Buddy Young, Dennis Spiegelman, Joseph Adelman and Mel
Powell. Thus, we are not required to sell a minimum number of shares or a
minimum dollar amount before we are entitled to keep an investor's payment for
shares. All funds received from investors will not be deposited in any escrow,
trust or similar account. All funds received from investors will be available
for our immediate use.
Since we are making this offering on a best-efforts basis, we do not
plan to use any underwriters or broker-dealers to assist in the sale of the
shares offered for sale. We may continue offering these shares for sale for up
to two years from the date of this prospectus.
Our officers and directors, namely, Buddy Young, Dennis Spiegelman, Mel
Powell and Joseph Adelman will commence this offering promptly and will make the
offering on a continuous basis for up to two years from the date of this
prospectus or until earlier completion or termination.
We have not entered into, nor do we intend to enter into, any
agreement, understanding or arrangement with any underwriter or broker-dealer
regarding the sale of common stock in this offering, nor is there an underwriter
or coordinating broker acting on our behalf in connection with this offering.
Neither Buddy Young, Dennis Spiegelman, Mel Powell nor Joseph Adelman
is a registered securities broker-dealer. As officers and directors of Futura
Pictures, they will be offering the shares for sale in reliance upon Rule 3a4-1
of the rules promulgated under the Securities Exchange Act of 1934, which rule
permits the sale of securities by persons associated with the issuer company.
We have agreed to pay all expenses of this offering, including legal
and accounting fees, SEC filing fees, expenses of compliance with state and
provincial securities laws, and printing costs.
The Company will not commence the registration or qualification process
in any state until after the effective date of this Registration Statement. In
the states were the sale of the Company's stock is registered or qualified, Mr.
Buddy Young, Mr. Dennis Spiegelman, Mr. Joseph Adelman and
26
Mr. Mel Powell, who are officers or directors, or both, of the Company will
commence offering our stock. The offering will be made on a continuous basis in
the states where the Company is registered or qualified for a period of two
years following the effective date of this prospectus or until any earlier
completion or termination.
DESCRIPTION OF SECURITIES
We have one class of common stock authorized for issuance. Of the
25,000,000 shares of common stock authorized, 1,250,000 shares are currently
issued and outstanding. We do not have any preferred stock authorized for
issuance.
Holders of common stock are entitled to receive such dividends as the
board of directors may from time to time declare out of funds legally available
for the payment of dividends. To date we have not paid any dividends on our
common stock, and we do not anticipate paying any dividends in the foreseeable
future.
Each share of our common stock is entitled to one vote. Our
stockholders have no preemptive rights.
If and when this Prospectus is declared effective by the Securities &
Exchange Commission we plan to retain the services of U.S. Stock Transfer
Corporation, located at 1745 Gardena Avenue, 2nd Floor, Glendale, California
91204, to serve as our transfer agent for our common stock
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Section 145 of the Delaware General Corporation Law authorizes us to
indemnify any director or officer under prescribed circumstances and subject to
certain limitations against certain costs and expenses, including attorneys'
fees actually and reasonably incurred in connection with any action, suit or
proceedings, whether civil, criminal, administrative or investigative, to which
such person is a party by reason of being one of our directors or officers if it
is determined that the person acted in accordance with the applicable standard
of conduct set forth in such statutory provisions. Article Seventh of our
certificate of incorporation provides for the indemnification of directors and
officers to the full extent permitted by Delaware law.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
Futura Pictures pursuant to the foregoing provisions, or otherwise, we have been
advised that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in such Act and is,
therefore, unenforceable.
LEGAL MATTERS
Certain legal matters in connection with the issuance of the securities
offered hereby will be passed upon for Futura Pictures by L. Stephen Albright,
attorney at law, Los Angeles, California.
27
Mr. Albright was not hired on a contingent basis and will not receive a
direct or indirect interest in the business of issuer in connection with his
issuance of an opinion regarding our stock. Mr. Albright is a promoter, as that
term includes "founders" and is an officer and director of the Company. However,
Mr. Albright will not be engaged, directly or indirectly, in the solicitation of
purchasers for our securities, the general promotion of our securities or the
Company and is not an underwriter.
EXPERTS
The financial statements of Futura Pictures, Inc. as of February 28,
2005 have been included in this prospectus in reliance on the report of Farber &
Hass LLP, independent registered public accountants, given on the authority of
that firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, which includes both a copy of
this prospectus and additional information. Following the date of this
prospectus, we will also be required to file periodic reports and other
information with the SEC pursuant to the Securities Exchange Act of 1934. You
may access and copy our registration statement and any other documents that we
file with the SEC by visiting the SEC's web site on the Internet at
http://www.sec.gov. You may also read and copy any document we file at the SEC's
public reference rooms located at Room 1024, Judiciary Plaza, 450 5th Street,
N.W., Washington, D.C. 20549. You may obtain information on the operation of the
SEC's public reference rooms by calling the SEC at 1-800-SEC-0330.
You should rely only on the information provided in this prospectus. We
have not authorized anyone else to provide you with different information. You
should not assume that the information in this prospectus is accurate as of any
date after the date of this prospectus.
28
FUTURA PICTURES, INC.
INDEX TO FINANCIAL STATEMENTS
PAGE
----
Balance Sheet as of May 31, 2005 (unaudited) ........................ F-2
Condensed Statements of Operations (unaudited) ...................... F-3
Three Months Ended May 31, 2005
Period from December 10, 2003 (Date of Inception) to
May 31, 2005
Condensed Statements of Stockholders' Equity (unaudited) ............ F-4
Period from December 10, 2003 (Date of Inception) to
May 31, 2005
Condensed Statements of Cash Flows (unaudited) ...................... F-5
Three Months Ended May 31, 2005
Period from December 10, 2003 (Date of Inception) to
May 31, 2005
Notes to Financial Statements - May 31, 2005 ........................ F-7
Independent Registered Auditors' Report.................................. F-10
Balance Sheet as of February 28, 2005.................................... F-11
Statements of Operations................................................. F-12
Year Ended February 28, 2005
Period from December 10, 2003 (Date of Inception) to
February 28, 2005
Statements of Stockholders' Equity....................................... F-13
Period from December 10, 2003 (Date of Inception) to
February 28, 2005
Statements of Cash Flows................................................. F-14
Year Ended February 28, 2005
Period from December 10, 2003 (Date of Inception) to
February 28, 2005
Notes to Financial Statements - February 28, 2005 ....................... F-16
F-1
FUTURA PICTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED BALANCE SHEET
MAY 31, 2005
(Unaudited)
ASSETS
Cash ......................................................... $ 3,623
Investments in screenplays ................................... 1,000
Prepaid loan commitment - related party ...................... 13,458
-----------
TOTAL ASSETS ............................................ $ 18,081
===========
STOCKHOLDERS' EQUITY
Common stock, par value $0.0001 per share
Authorized - 25,000,000 shares
Issued and outstanding - 1,250,000 shares ............... $ 125
Additional paid-in capital ................................... 34,875
Deficit accumulated during the development stage ............. (16,919)
-----------
TOTAL STOCKHOLDERS' EQUITY .............................. $ 18,081
===========
The accompanying notes are an integral part of these financial statements.
F-2
FUTURA PICTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
FROM
DECEMBER 10,
FOR THE 2003 (DATE
THREE OF INCEPTION)
MONTHS ENDED TO MAY 31,
MAY 31, 2005 2005
----------- -----------
DEVELOPMENT STAGE EXPENSES
Selling, general and administrative ...... $ 11,067 $ 11,919
Directors' fees, non-cash compensation ... -- 5,000
----------- -----------
TOTAL DEVELOPMENT STAGE EXPENSES .... $ 11,067 $ 16,919
----------- -----------
NET (LOSS) ....................................... $ (11,067) $ (16,919)
=========== ===========
NET (LOSS) PER COMMON SHARE
Basic and diluted ........................ $ (0.01) $ (0.01)
=========== ===========
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING
Basic and diluted ........................ 1,250,000 1,162,877
=========== ===========
The accompanying notes are an integral part of these financial statements.
F-3
FUTURA PICTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM DECEMBER 10, 2003 (DATE OF INCEPTION) TO MAY 31, 2005
(Unaudited)
DEFICIT
ACCUMULATED
COMMON STOCK ADDITIONAL DURING THE TOTAL
--------------------- PAID-IN DEVELOPMENT STOCKHOLDERS'
SHARES AMOUNT CAPITAL STAGE DEFICIT
--------- --------- --------- --------- ---------
Issuance of common stock for
cash - January 9, 2005 1,000,000 $ 100 $ 9,900 $ -- $ 10,000
Issuance of common stock for
directors' fees -
January 9, 2005 ....... 50,000 5 4,995 -- 5,000
Issuance of common stock for
loan commitment -
related party -
February 16, 2005 ..... 190,000 19 18,981 -- 19,000
Issuance of common stock for
screenplay options -
February 28, 2005 ..... 10,000 1 999 -- 1,000
Net (loss) for the year ended
February 28, 2005 ..... -- -- -- (5,852) (5,852)
--------- --------- --------- --------- ---------
Balance, February 28, 2005 .... 1,250,000 $ 125 $ 34,875 $ (5,852) $ 29,148
--------- --------- --------- --------- ---------
Net (loss) for the three months
Ended May 31, 2005 .... -- -- -- (11,067) (11,067)
--------- --------- --------- --------- ---------
Balance, May 31, 2005 ......... 1,250,000 $ 125 $ 34,875 $ (16,919) $ 18,081
========= ========= ========= ========= =========
The accompanying notes are an integral part of these financial statements.
F-4
FUTURA PICTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF CASH FLOW
(Unaudited)
FROM
DECEMBER 10,
FOR THE 2003 (DATE
THREE OF INCEPTION)
MONTHS ENDED TO MAY 31,
MAY 31, 2005 2005
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) .................................... $(11,067) $(16,919)
Adjustments to reconcile net (loss) to net cash
(used) by operating activities:
Common stock issued for directors' fees .. -- 5,000
Amortization expense ..................... 4,750 5,542
-------- --------
NET CASH (USED) BY OPERATING
ACTIVITIES ............................... (6,317) (6,377)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of common stock ............ -- 10,000
-------- --------
NET CASH PROVIDED BY FINANCING
ACTIVITIES ............................... -- 10,000
-------- --------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS .......................... $ (6,317) $ 3,623
CASH AND CASH EQUIVALENTS
AT THE BEGINNING OF THE PERIOD ................ 9,940 --
-------- --------
CASH AND CASH EQUIVALENTS
AT THE END OF THE PERIOD ...................... $ 3,623 $ 3,623
======== ========
F-5
FUTURA PICTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF CASH FLOW (CONTINUED)
(Unaudited)
FROM
DECEMBER 10,
FOR THE 2003 (DATE
THREE OF INCEPTION)
MONTHS ENDED TO MAY 31,
MAY 31, 2005 2005
-------- --------
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION
Interest paid ................................ $ -- $ --
Taxes paid ................................... $ -- $ --
SCHEDULE OF NON-CASH INVESTING AND
FINANCING ACTIVITIES:
Issuance of 50,000 shares of common stock for
directors' fees ............................ $ -- $ 5,000
Issuance of 190,000 shares of common stock for
loan commitment ............................ $ -- $19,000
Issuance of 10,000 shares of common stock for
screenplay options ......................... $ -- $ 1,000
The accompanying notes are an integral part of these financial statements.
F-6
FUTURA PICTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
MAY 31, 2005
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION AND NATURE OF BUSINESS
Futura Pictures, Inc. (the "Company") was incorporated under the laws
of the state of Delaware on December 10, 2003. The Company was formed
to engage in the production, and the co-financing of motion pictures
whose production budgets are estimated to range between $500,000 and
$1,500,000, produced solely for the distribution directly to the
domestic and international home video markets.
The Company has adopted February 28 as its fiscal year end. The
Statements of Operations and Cash Flows are not presented separately
for the period from March 1, 2004 to May 31, 2004 as the Company had no
transactions prior to January 5, 2005.
PRESENTATION
The interim financial statements of the Company are condensed and do
not include some of the information necessary to obtain a complete
understanding of the financial data. Management believes that all
adjustments necessary for a fair presentation of results have been
included in the unaudited financial statements for the interim period
presented. Operating results for the three months ended May 31, 2005
are not necessarily indicative of the results that may be expected for
the year ended February 28, 2006. Accordingly, your attention is
directed to footnote disclosures found in the February 28, 2005 Annual
Report and particularly to Note 1, which includes a summary of
significant accounting policies.
UNCLASSIFIED BALANCE SHEET
In accordance with the provisions of AICPA Statement of Position 00-2,
"ACCOUNTING BY PRODUCERS OR DISTRIBUTORS OF FILMS", the Company has
elected to present an unclassified balance sheet.
NOTE 2 SIGNIFICANT UNCERTAINTY REGARDING THE COMPANY'S ABILITY TO CONTINUE AS
A GOING CONCERN AND MANAGEMENT PLANS
The accompanying financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The
Company's current financial resources are not considered adequate to
fund its planned operations. This condition raises substantial doubt
about its ability to continue as a going concern. The accompanying
financial statements do not include any adjustments relating to the
recoverability and classification of recorded
F-7
FUTURA PICTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)
MAY 31, 2005
asset amounts or the amounts and classification of liabilities that
might be necessary should the Company be unable to continue as a going
concern.
The Company's continuation as a going concern currently is dependent
upon it timely procuring significant external debt and/or equity
financing to fund its immediate and nearer-term operations, and
subsequently realizing operating cash flows from sales of its film
products sufficient to sustain its longer-term operations and growth
initiatives, including its desired marketing and new potential film
screenplays.
NOTE 3 DEVELOPMENT STAGE OPERATIONS
As of May 31, 2005, the Company was in the development stage of
operations. According to the Financial Accounting Standards Board of
the Financial Accounting Foundation, a development stage Company is
defined as a company that devotes most of its activities to
establishing a new business activity. In addition, planned principal
activities have not commenced, or have commenced and have not yet
produced significant revenue.
NOTE 4 INVESTMENT IN SCREENPLAYS
During January 2005, the Company acquired an option on a screenplay
entitled "Cass & Karri", written by Don Tsuchiyama, the "Writer", in
exchange for 5,000 shares of the Company's common stock with an
aggregate value of $500. The agreement calls for the Writer to grant
the Company an exclusive and irrevocable option to purchase all motion
picture, television, and allied rights in "Cass & Karri" for the term
of one year. The option has an exercise price of $10,000 upon execution
plus one percent of the final budget, upon commencement of principal
photography.
Also during January 2005, the Company acquired an option on a
screenplay entitled "Life.dot.com", written by Frank Gillman in
exchange for 5,000 shares of the Company's common stock with an
aggregate value of $500. The agreement calls for the Writer to grant
the Company an exclusive and irrevocable option to purchase all motion
picture, television, and allied rights in "Life.dot.com" for the term
of one year. The option has an exercise price of $10,000 upon execution
plus one percent of the final budget, upon commencement of principal
photography.
F-8
FUTURA PICTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)
MAY 31, 2005
A summary of the Company's investment in screenplays is as follows:
"Cass & Karri", by Don Tsuchiyama $ 500
"Life.dot.com", by Frank Gillman 500
---------
Total investment in screenplays $ 1,000
=========
NOTE 5 RELATED PARTY TRANSACTION
PREPAID LOAN COMMITMENT
On February 16, 2005, the Company's President, Buddy Young, accepted an
unsecured promissory note from the Company and agreed to lend up to
$100,000 to the Company to fund any cash shortfalls. The note bears
interest at 8% and is due upon demand, no later than December 31, 2006.
The Company paid Mr. Young 190,000 shares of the Company's common stock
with an aggregate value of $19,000 for the loan commitment. No amounts
were borrowed or outstanding on this loan at May 31, 2005. Accumulated
amortization at May 31, 2005 is $5,542.
F-9
INDEPENDENT REGISTERED AUDITORS' REPORT
To the Board of Directors and Stockholders
of Futura Pictures, Inc.:
We have audited the accompanying balance sheet of Futura Pictures, Inc. (a
development stage company; the "Company") as of February 28, 2005 and the
related statements of operations, stockholders' deficit and cash flows for the
year ended February 28, 2005 and from inception (December 10, 2003)to February
28, 2005. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on 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 amount s and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall presentation of the financial statements. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the accompanying consolidated financial statements present
fairly, in all material respects, the financial position of the Company at
February 28, 2005 and the results of its operations and its cash flows for the
year ended February 28, 2005 and from inception to February 28, 2005, in
conformity with accounting principles generally accepted in the United States.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company's current financial resources are not
considered adequate to fund its planned operations. This condition raises
substantial doubt about its ability to continue as a going concern. Management's
plans regarding this matter is described in Notes 2. The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
/s/ Farber & Hass LLP
March 18, 2005
Camarillo, California
F-10
FUTURA PICTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
FEBRUARY 28, 2005
ASSETS
Cash ........................................................ $ 9,940
Investments in screenplays .................................. 1,000
Prepaid loan commitment - related party ..................... 18,208
--------
TOTAL ASSETS ....................................... $ 29,148
========
STOCKHOLDERS' EQUITY
Common stock, par value $0.0001 per share
Authorized - 25,000,000 shares
Issued and outstanding - 1,250,000 shares .............. $ 125
Additional paid-in capital .................................. 34,875
Deficit accumulated during the development stage ............ (5,852)
--------
TOTAL STOCKHOLDERS' EQUITY .................................. $ 29,148
========
The accompanying notes are an integral part of these financial statements.
F-11
FUTURA PICTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
From
December 10,
For the 2003 (Date of
Year Ended Inception) to
February February 28,
28, 2005 2005
--------- ---------
DEVELOPMENT STAGE EXPENSES
Selling, general and administrative ...... $ 852 $ 852
Directors' fees, non-cash compensation ... 5,000 5,000
--------- ---------
TOTAL DEVELOPMENT STAGE EXPENSES .... $ 5,852 $ 5,852
--------- ---------
NET (LOSS) ..................................... $ (5,852) $ (5,852)
========= =========
NET (LOSS) PER COMMON SHARE
Basic and diluted ........................ $ (0.04) $ (0.05)
========= =========
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING
Basic and diluted ........................ 150,082 122,825
========= =========
The accompanying notes are an integral part of these financial statements.
F-12
FUTURA PICTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM DECEMBER 10, 2003
(DATE OF INCEPTION) TO FEBRUARY 28, 2005
DEFICIT
ACCUMULATED
COMMON STOCK ADDITIONAL DURING THE TOTAL
---------------------------- PAID-IN DEVELOPMENT STOCKHOLDERS'
SHARES AMOUNT CAPITAL STAGE DEFICIT
---------- ------------ --------- --------- ---------
Issuance of common stock for
cash - January 9, 2005 1,000,000 $ 100 $ 9,900 $ -- $ 10,000
Issuance of common stock for
directors' fees -
January 9, 2005 ...... 50,000 5 4,995 -- 5,000
Issuance of common stock for
loan commitment -
related party -
February 16, 2005 .... 190,000 19 18,981 -- 19,000
Issuance of common stock for
screenplay options -
February 28, 2005 .... 10,000 1 999 -- 1,000
Net (loss) for the year ended
February 28, 2005 .... -- -- -- (5,852) (5,852)
--------- --------- --------- --------- ---------
Balance, February 28, 2005 ... 1,250,000 $ 125 $ 34,875 $ (5,852) $ 29,148
========= ========= ========= ========= =========
The accompanying notes are an integral part of these financial statements.
F-13
FUTURA PICTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
FROM
FOR THE DECEMBER 10,
YEAR 2003 (DATE OF
ENDED INCEPTION) TO
FEBRUARY FEBRUARY
28, 2005 28, 2005
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) ............................. $ (5,852) $ (5,852)
Adjustments to reconcile net (loss)
to net cash (used) by operating
activities:
Common stock issued for
directors' fees ................ 5,000 5,000
Amortization expense .............. 792 792
-------- --------
NET CASH (USED) BY OPERATING
ACTIVITIES ........................ (60) (60)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of common stock ..... 10,000 10,000
-------- --------
NET CASH PROVIDED BY FINANCING
ACTIVITIES ........................ 10,000 10,000
-------- --------
NET INCREASE IN CASH
AND CASH EQUIVALENTS ................... $ 9,940 $ 9,940
CASH AND CASH EQUIVALENTS
AT THE BEGINNING OF THE PERIOD ......... -- --
-------- --------
CASH AND CASH EQUIVALENTS
AT THE END OF THE PERIOD ............... $ 9,940 $ 9,940
======== ========
The accompanying notes are an integral part of these financial statements.
F-14
FUTURA PICTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOW (CONTINUED)
FROM
FOR THE DECEMBER 10,
YEAR 2003 (DATE OF
ENDED INCEPTION) TO
FEBRUARY FEBRUARY
28, 2005 28, 2005
-------- --------
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION
Interest paid ............................ $ -- $ --
Taxes paid ............................... $ -- $ --
SCHEDULE OF NON-CASH INVESTING AND
FINANCING ACTIVITIES:
Issuance of 50,000 shares of common
stock for directors' fees .............. $ 5,000 $ 5,000
Issuance of 190,000 shares of
common stock for loan commitment ....... $ 19,000 $ 19,000
Issuance of 10,000 shares of common
stock for screenplay options ........... $ 1,000 $ 1,000
The accompanying notes are an integral part of these financial statements.
F-15
FUTURA PICTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 2005
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION AND NATURE OF BUSINESS
Futura Pictures, Inc. (the "Company") was incorporated under the laws
of the state of Delaware on December 10, 2003. The Company was formed
to engage in the production, and the co-financing of motion pictures
whose production budgets are estimated to range between $500,000 and
$1,500,000, produced solely for the distribution directly to the
domestic and international home video markets.
UNCLASSIFIED BALANCE SHEET
In accordance with the provisions of AICPA Statement of Position 00-2,
"ACCOUNTING BY PRODUCERS OR DISTRIBUTORS OF FILMS", the Company has
elected to present an unclassified balance sheet.
CASH AND CASH EQUIVALENTS
For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with an original maturity of
three months or less to be cash equivalents.
PREPAID EXPENSES
The Company amortizes its prepaid expenses on a straight-line basis
over the period during which it will receive the underlying services.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make certain estimates and assumptions that affect the
reported amounts and timing of revenues and expenses, the reported
amounts and classification of assets and liabilities, and the
disclosure of contingent assets and liabilities. These estimates and
assumptions are based on the Company's historical results as well as
management's future expectations. The Company's actual results could
vary materially from management's estimates and assumptions.
F-16
FUTURA PICTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 2005
NOTE 1 SUMMARY OF SIGNIFICATE ACCOUNTING POLICIES (CONTINUED)
VALUE OF STOCK ISSUED FOR SERVICES
The Company periodically issues shares of its common stock in exchange
for, or in settlement of, services. The Company's management values the
shares issued in such transactions at either the then market price of
the Company's common stock, , as determined by the Board of Directors
and after taking into consideration factors such as volume of shares
issued or trading restrictions, or the value of the services rendered,
whichever is more readily determinable.
RECENTLY-ISSUED ACCOUNTING PRONOUNCEMENTS
There are no accounting standards with pending adoptions that have any
applicability to the Company.
NET INCOME (LOSS) PER SHARE
The Company adopted Statement of Financial Accounting Standards No. 128
that requires the reporting of both basic and diluted earnings (loss)
per share. Basic earnings (loss) per share is computed by dividing net
income (loss) available to common stockholders by the weighted average
number of common shares outstanding for the period. Diluted earnings
(loss) per share reflect the potential dilution that could occur if
securities or other contracts to issue common stock were exercised or
converted into common stock. In accordance with FASB 128, any
anti-dilutive effects on net income (loss) per share are excluded. The
Company has no potentially dilutive securities outstanding at February
28, 2005.
INCOME TAXES
Provisions for income taxes are based on taxes payable or refundable
for the current year and deferred taxes on temporary differences
between the amount of taxable income and pretax financial income and
between the tax bases of assets and liabilities and their reported
amounts in the financial statements. Deferred tax assets and
liabilities are included in the financial statements at currently
enacted income tax rates applicable to the period in which the deferred
tax assets and liabilities are expected to be realized or settled as
prescribed in FASB Statement No. 109, "Accounting for Income Taxes". As
changes in tax laws or rates are enacted, deferred tax assets and
liabilities are adjusted through the provision for income taxes.
F-17
FUTURA PICTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 2005
NOTE 1 SUMMARY OF SIGNIFICATE ACCOUNTING POLICIES (CONTINUED)
DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company estimates that the fair value of all financial instruments
at February 28, 2005 as defined in FASB 107 does not differ materially
from the aggregate carrying values of its financial instruments
recorded in the accompanying balance sheet. The estimated fair value
amounts have been determined by the Company using available market
information and appropriate valuation methodologies. Considerable
judgment is required in interpreting market data to develop the
estimates of fair value, and accordingly, the estimates are not
necessarily indicative of the amounts that the Company could realize in
a current market exchange.
NOTE 2 SIGNIFICANT UNCERTAINTY REGARDING THE COMPANY'S ABILITY TO CONTINUE AS
A GOING CONCERN AND MANAGEMENT PLANS
The accompanying financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The
Company's current financial resources are not considered adequate to
fund its planned operations. This condition raises substantial doubt
about its ability to continue as a going concern. The accompanying
financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or the
amounts and classification of liabilities that might be necessary
should the Company be unable to continue as a going concern.
The Company's continuation as a going concern currently is dependent
upon it timely procuring significant external debt and/or equity
financing to fund its immediate and nearer-term operations, and
subsequently realizing operating cash flows from sales of its film
products sufficient to sustain its longer-term operations and growth
initiatives, including its desired marketing and new potential film
screenplays.
NOTE 3 DEVELOPMENT STAGE OPERATIONS
As of February 28, 2005, the Company was in the development stage of
operations. According to the Financial Accounting Standards Board of
the Financial Accounting Foundation, a development stage Company is
defined as a company that devotes most of its activities to
establishing a new business activity. In addition, planned principal
activities have not commenced, or have commenced and have not yet
produced significant revenue.
F-18
FUTURA PICTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 2005
NOTE 4 INVESTMENT IN SCREENPLAYS
During January 2005, the Company acquired an option on a screenplay
entitled "Cass & Karri", written by Don Tsuchiyama, the "Writer", in
exchange for 5,000 shares of the Company's common stock with an
aggregate value of $500. The agreement calls for the Writer to grant
the Company an exclusive and irrevocable option to purchase all motion
picture, television, and allied rights in "Cass & Karri" for the term
of one year. The option has an exercise price of $10,000 upon execution
plus one percent of the final budget, upon commencement of principal
photography.
Also during January 2005, the Company acquired an option on a
screenplay entitled "Life.dot.com", written by Frank Gillman in
exchange for 5,000 shares of the Company's common stock with an
aggregate value of $500. The agreement calls for the Writer to grant
the Company an exclusive and irrevocable option to purchase all motion
picture, television, and allied rights in "Life.dot.com" for the term
of one year. The option has an exercise price of $10,000 upon execution
plus one percent of the final budget, upon commencement of principal
photography.
A summary of the Company's investment in screenplays is as follows:
"Cass & Karri", by Don Tsuchiyama .. $ 500
"Life.dot.com", by Frank Gillman ... 500
------
Total investment in screenplays $1,000
======
NOTE 5 RELATED PARTY TRANSACTION
PREPAID LOAN COMMITMENT
On February 16, 2005, the Company's President, Buddy Young, accepted an
unsecured promissory note from the Company and agreed to lend up to
$100,000 to the Company to fund any cash shortfalls. The note bears
interest at 8% and is due no later than December 31, 2006. The Company
paid Mr. Young 190,000 shares of the Company's common stock with an
aggregate value of $19,000 for the loan commitment. No amounts were
borrowed or outstanding on this loan at February 28, 2005. Accumulated
amortization at February 28, 2005 is $792.
F-19
FUTURA PICTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 2005
NOTE 6 STOCKHOLDERS' EQUITY
During the year the Company issued the following shares of stock:
January 9, 2005 - 1,000,000 shares to the Company's Founder and
President, Buddy Young, in exchange for $10,000 cash.
January 9, 2005 - 50,000 shares valued at $5,000 to five of the
Company's board of director members in exchange for services rendered
during the year ended February 28, 2005.
February 16, 2005 - 190,000 shares valued at $19,000 to the Company's
President, Buddy Young, in payment of a loan commitment.
February 28, 2005 - 5,000 shares valued at $500 to Don Tsuchiyama for
the option on his screenplay.
February 28, 2005 - 5,000 shares valued at $500 to Frank Gillman for
the option on his screenplay.
NOTE 7 INCOME TAXES
DEFERRED TAX COMPONENTS
Significant components of the Company's deferred tax assets are as
follows at February 28, 2005:
Net operating loss carry-forward $ 1,200
Less valuation allowance (1,200)
-------
Net deferred tax assets ......... $ 0
=======
Summary of valuation allowance:
Balance, March 1, 2004 .......... $ 0
Addition for the year ended
February 28, 2005 ............ 1,200
-------
Balance, February 28, 2005 ...... $ 1,200
=======
F-20
FUTURA PICTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 2005
NOTE 7 INCOME TAXES (CONTINUED)
In assessing the realizability of deferred tax assets, management
considers whether it is more likely than not that some portion or all
of the deferred tax assets is dependent upon the generation of future
taxable income during the periods in which those temporary differences
become deductible. Management considers the scheduled reversal of
deferred tax liabilities, projected future taxable income and tax
planning strategies in making this assessment.
NET OPERATING LOSS
The Company has the following net operating loss carry-forwards:
YEAR OF LOSS EXPIRATION DATE AMOUNT
------------ --------------- ------
February 28, 2005 February 28, 2025 $ 5,852
F-21
BACK COVER OF PROSPECTUS
DEALER PROSPECTUS DELIVERY OBLIGATION
THE EARLIER OF EITHER TWO YEARS ANNIVERSARY OF EFFECTIVE DATE, OR THE DATE ON
WHICH OUR SHARES BECOME LISTED ON EITHER THE OVER THE COUNTER BULLETIN BOARD
SYSTEM OR THE PINK SHEETS ELECTRONIC QUOTATION SYSTEM. ALL DEALERS EFFECTING
TRANSACTIONS IN THESE SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS OFFERING,
MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE DEALER'S
OBLIGATION TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT
TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The liability of our officers and directors is or may be affected by
the following provisions of applicable state law and of our certificate of
incorporation and bylaws:
Section 145 of the Delaware General Corporation Law permits our board
of directors to indemnify any person against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with any threatened, pending or completed action,
suit or proceeding in which such person is made a party by reason of his being
or having been a director, officer, employee or agent of each such corporation,
in terms sufficiently broad to permit such indemnification under certain
circumstances for liabilities (including reimbursement for expenses incurred)
arising under the Securities Act of 1933. The statute provides that
indemnification pursuant to its provisions is not exclusive of other rights of
indemnification to which a person may be entitled under any bylaw, agreement,
vote of stockholders or disinterested directors, or otherwise.
Section 102(b)(7) of the Delaware General Corporation Law permits us to
adopt a provision in our certificate of incorporation eliminating or limiting
the personal liability of our directors to the corporation and its stockholders
for monetary damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law (relating to the payment of
unlawful dividends and unlawful stock purchases and redemptions), or (iv) for
any transaction from which the director derived an improper personal benefit.
Under Section 2115 of the California General Corporation Law, certain
provisions of the California General Corporation Law may be deemed to apply to
Futura Pictures as a Delaware corporation doing business in the state of
California. Those sections include Section 317, which makes provision for the
indemnification of officers and directors in terms sufficiently broad to include
indemnification under certain circumstances for liabilities, including
reimbursement for expenses incurred, arising under the Securities Act of 1933.
Our certificate of incorporation provides for mandatory indemnification
of our directors and officers to the full extent permitted by law. Our
certificate of incorporation further provides that the personal liability of our
directors is eliminated to the fullest extent permitted by Section 102(b)(7) of
the Delaware General Corporation Law, as the same may be amended and
supplemented from time to time.
i
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
We estimate the following expenses in connection with this registration
and offering of common stock by the Young Family Trust. Futura Pictures will pay
all of these expenses.
SEC registration fee ....... $ 71
Printing costs ............. 500
Blue sky fees .............. 3,000
Accounting fees and expenses 7,500
Legal fees and expenses .... 45,000
Miscellaneous .............. 3,500
-------
Total ................ $59,571
=======
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
In January 2005, we sold 1,000,000 shares of common stock to Buddy
Young, our president and majority shareholder for $10,000, and in February 2005,
we issued 190,000 shares of our Common Stock for his commitment to fund any cash
shortfall for our operations up to $100,000, during the next twelve months.
Additionally, with the exception of Buddy Young, our president and principal
shareholder, each of our directors and executive officers has received 10,000
shares of our common stock as compensation for their work on our behalf. The
sales of these shares were exempt from registration under Section 4(2) of the
Securities Act of 1933 as a transaction not involving a public offering. We
issued the shares subject to resale restrictions.
In February 2005, we issued 5,000 shares of our common stock to both
Frank Gillman and Don Tsuchiyama as compensation for the option we acquired on
their screenplays (see BUSINESS, page 14).
ITEM 27. EXHIBITS.
3.1 Certificate of Incorporation of the registrant dated December
10, 2003 and filed with the Delaware Secretary of State on
December 10, 2003.
3.5 Bylaws of Futura Pictures, Inc.
4.1 Form of Certificate of Common Stock of Futura Pictures, Inc.
5.1 Opinion of L. Stephen Albright regarding the legality of the
securities being registered (filed herewith).
23.1 Consent of Farber & Hass LLP (filed herewith).
23.2 Consent of L. Stephen Albright (included in Exhibit 5.1 filed
herewith).
10.1 Option Agreement for screenplay by Don Tsuchiyama (filed
herewith).
ii
10.2 Option Agreement for screenplay by Frank Gillman (filed
herewith).
99.1 Selected pages from the 2004 Annual Report on the Home
Entertainment Industry (filed herewith).
99.2 Four (4) page article from the January 6, 2005 publication
"Variety" regarding the DVD market (filed herewith).
99.3 October 20, 2003, text of a CBS News Report regarding DVD
sales (filed herewith).
99.4 Selected pages from Motion Picture Association 2003 Market
Statistics (filed herewith).
99.5 Four (4) page article from the Australian Film Commission,
2003, entitled "What Australians are Watching, The Video
Industry in Australia 2003: the DVD Revolution" (filed
herewith).
ITEM 28. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration
statement to:
(i) Include any prospectus required by section 10(a)(3)
of the Securities Act of 1933;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental
change in the information in the registration
statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered
(if the total dollar value of securities offered
would not exceed that which was registered) and any
deviation from the low or high end of the estimated
maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change
in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the
effective registration statement;
(iii) To include any additional or changed material
information on the plan of distribution;
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of
the securities offered, and the offering of the securities at
that time to be the initial bona fide offering; and
iii
(3) File a post-effective amendment to remove from registration
any of the securities that remain unsold at the end of the
offering.
(e) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such
issue.
iv
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form S-B2, as amended, and authorized this
registration statement to be signed on its behalf by the undersigned, in the
City of Encino, State of California, on July 15, 2005.
FUTURA PICTURES, INC.
Registrant
By: /S/BUDDY YOUNG
-------------------------------------
Buddy Young
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME TITLE DATE
- ---- ----- ----
/S/ BUDDY YOUNG President, Chief Executive July 15, 2005
- ---------------------------- Officer, Chief Financial
Buddy Young Officer and Director
(Principal Executive,
Financial and Accounting
Officer)
/S/ JOSEPH ADELMAN Director July 15, 2005
- ----------------------------
Joseph Adelman
/S/ L. STEPHEN ALBRIGHT Director July 15, 2005
- ----------------------------
L. Stephen Albright
/S MEL POWELL Director July 15, 2005
- ----------------------------
Mel Powell
/S/ DENNIS SPIEGELMAN Director July 15, 2005
- ----------------------------
Dennis Spiegelman
S-1
EXHIBITS INDEX
(All Exhibits are Incorporated by Reference, Except as noted)
EXHIBIT NO. TITLE OF DOCUMENT
----------- --------------------------------------------------------------
3.1 Certificate of Incorporation of the registrant dated December
10, 2003 and filed with the Delaware Secretary of State on
December 10, 2003.
3.5 Bylaws of Futura Pictures, Inc.
4.1 Form of Certificate of Common Stock of Futura Pictures, Inc.
5.1 Opinion of L. Stephen Albright regarding the legality of the
securities being registered (included herewith).
23.1 Consent of Farber & Hass LLP (included herewith).
23.2 Consent of L. Stephen Albright (included in Exhibit 5.1 filed
herewith).
10.1 Option Agreement for screenplay by Don Tsuchiyama (filed
herewith).
10.2 Option Agreement for screenplay by Frank Gillman (filed
herewith).
99.1 Selected pages from the 2004 Annual Report on the Home
Entertainment Industry (filed herewith);
99.2 Four (4) page article from the January 6, 2005 publication
"Variety" regarding the DVD market (filed herewith).
99.3 October 20, 2003, text of a CBS News Report regarding DVD
sales (filed herewith).
99.4 Selected pages from Motion Picture Association 2003 Market
Statistics (filed herewith).
99.5 Four (4) page article from the Australian Film Commission,
2003, entitled "What Australians are Watching, The Video
Industry in Australia 2003: the DVD Revolution" (filed
herewith).
EX-1