U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q/A
(Mark One)
[X] Quarterly Report under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended May 31, 2008
[_] Transition Report under Section 13 or 15(d) of the Exchange Act for the
Transition Period from ________ to ___________
Commission File Number: 333-123611
FUTURA PICTURES, INC.
(Exact name of small business issuer as specified in its charter)
Delaware 56-2495218
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
17337 Ventura Boulevard, Suite 208
Encino, California 91316
Issuer's Telephone Number: (818) 784-0040
(Address and phone number of principal executive offices)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [X] No [_]
Check whether the issuer is a "shell company" as defined in Rule 12b-2
of the Securities Exchange Act of 1934. Yes [_] No [X]
The Registrant has 1,599,750 shares of Common stock, par value $.0001
per share issued and outstanding as of June 30, 2008.
There currently is no public market for the Company's Stock.
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of "large accelerated filer," "accelerated filer," and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer [_] Accelerated filer [_]
Non-accelerated filer [_] Smaller reporting company [X]
(Do not check if a smaller reporting company)
Traditional Small Business Disclosure Format (check one) Yes [_] No [X]
AMENDMENT OF FORM 10Q
Subsequent to the issuance of the financial statements for the three months
ended May 31, 2008 the Company identified an error in the recording of
production in progress which resulted in an overstatement of research and
development in the amount of $2,000 for the three months ended May 31, 2008 and
$13,000 for the period of inception, December 10, 2003, to May 31, 2008 and an
understatement of production in progress in the amount of $13,000. Accordingly,
the financial statements for the three months ended May 31, 2008 have been
restated to correct the error.
2
INDEX TO QUARTERLY REPORT
ON FORM 10-Q/A
PART I FINANCIAL INFORMATION
PAGE
Item 1. Financial Statements (Unaudited) 4
Condensed Balance Sheets
May 31, 2008 and February 29, 2008 (as restated) 5
Condensed Statements of Operations
For the Three Months Ended May 31, 2008 and 2007 and from
December 10, 2003 (Date of Inception) to
May 31, 2008 (as restated) 6
Condensed Statements of Shareholders' Deficit
From December 10, 2003 (Date of Inception)
to the May 31, 2008 (as restated) 7
Condensed Statements of Cash Flows For the Three Months Ended
May 31, 2008 and 2007 and from December 10, 2003 (Date of
Inception) to May 31, 2008 (as restated) 9
Notes to Financial Statements (as restated) 11
Item 2. Management's Discussion and Analysis or Plan
of Operation 15
Item 3 Quantitative and Qualitative Disclosures About Market Risk 20
Item 4 Controls and Procedures 20
PART II OTHER INFORMATION
Item 1. Legal Proceedings 20
Item 2. Unregistered Sale of Equity and Use of Proceeds 20
Item 3. Defaults upon Senior Securities 20
Item 4. Submission of Matters to a Vote of Security Holders 20
Item 5. Other Information 20
Item 6. Exhibits 21
Signatures 22
3
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
(Financial Statements Commence on Following Page)
4
FUTURA PICTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED BALANCE SHEETS
AS RESTATED
MAY 31, 2008 FEBRUARY 29,
(Unaudited) 2008
AS RESTATED AS RESTATED
------------ ------------
ASSETS
Cash .................................................... $ 20,848 $ 20,823
Prepaid expenses ........................................ -- 1,000
Production in progress .................................. 13,000 11,000
------------ ------------
TOTAL ASSETS ....................................... $ 33,848 $ 32,823
============ ============
LIABILITIES
Accrued expenses ........................................ $ 12,560 $ 3,737
Unearned revenue ........................................ 25,000 25,000
Accrued interest - related party ........................ 31 12
Loan payable - related party ............................ 957 957
------------ ------------
TOTAL LIABILITIES .................................. 38,548 29,706
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, par value $0.0001 per share
Authorized - 100,000,000 shares
Issued and outstanding - 1,599,750
shares and 1,538,750 shares, respectively .......... 160 154
Additional paid-in capital .............................. 234,740 217,396
Deficit accumulated during the development stage ........ (239,600) (214,433)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) ............... (4,700) 3,117
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 33,848 $ 32,823
============ ============
The accompanying notes are an integral part of these financial statements.
5
FUTURA PICTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
AS RESTATED
FROM
DECEMBER 10,
FOR THE THREE 2003 (DATE
MONTHS ENDED FOR THE THREE OF INCEPTION)
MAY 31, 2008 MONTHS ENDED MAY 31, 2008
AS RESTATED MAY 31, 2007 AS RESTATED
------------ ------------ ------------
DEVELOPMENT STAGE EXPENSES
Selling, general and administrative .. $ 24,367 $ 19,892 $ 230,600
Directors' fees, non-cash compensation -- -- 5,000
------------ ------------ ------------
TOTAL DEVELOPMENT STAGE EXPENSES . 24,367 19,892 235,600
------------ ------------ ------------
(LOSS) BEFORE INCOME TAXES .............. (24,367) (19,892) (235,600)
Income tax expense ................... 800 800 4,000
NET (LOSS) .............................. $ (25,167) $ (20,692) $ (239,600)
============ ============ ============
NET (LOSS) PER COMMON SHARE
Basic and diluted .................... $ (0.02) $ (0.02) $ (0.18)
============ ============ ============
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING
Basic and diluted .................... 1,591,924 1,359,897 1,338,388
============ ============ ============
The accompanying notes are an integral part of these financial statements.
6
FUTURA PICTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE PERIOD FROM DECEMBER 10, 2003
(DATE OF INCEPTION) TO MAY 31, 2008
(Unaudited)
AS RESTATED
DEFICIT
ACCUMULATED TOTAL
COMMON STOCK ADDITIONAL DURING THE STOCKHOLDERS'
--------------------------- PAID-IN DEVELOPMENT EQUITY
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
------------ ------------ ------------ ------------ ------------
Contributed services -- -- 41,600 -- 41,600
Net (loss) for the year ended
February 28, 2006 -- -- -- (78,776) (78,776)
------------ ------------ ------------ ------------ ------------
Balance, February 28, 2006 1,250,000 $ 125 $ 76,475 $ (84,628) $ (8,028)
------------ ------------ ------------ ------------ ------------
7
FUTURA PICTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE PERIOD FROM DECEMBER 10, 2003
(DATE OF INCEPTION) TO MAY 31, 2008
(Unaudited)
AS RESTATED
DEFICIT
ACCUMULATED TOTAL
COMMON STOCK ADDITIONAL DURING THE STOCKHOLDERS'
--------------------------- PAID-IN DEVELOPMENT EQUITY
SHARES AMOUNT CAPITAL STAGE (DEFICIT)
------------ ------------ ------------ ------------ ------------
Issuance of common stock for
cash $ 102,750 $ 10 $ 20,540 $ -- $ 20,550
Contributed services -- -- 41,600 -- 41,600
Net (loss) for the year ended
February 28, 2007 -- -- -- (65,231) (65,231)
------------ ------------ ------------ ------------ ------------
Balance, February 28, 2007 1,352,750 $ 135 $ 138,615 $ (149,859) $ (11,109)
------------ ------------ ------------ ------------ ------------
Issuance of common stock for
cash 186,000 19 37,181 -- 37,200
Contributed services -- -- 41,600 -- 41,600
Net (loss) for the year
ended February 29, 2008 -- -- -- (64,574) (64,574)
------------ ------------ ------------ ------------ ------------
Balance, February 29, 2008 1,538,750 154 217,396 (214,433) 3,117
------------ ------------ ------------ ------------ ------------
Issuance of common stock for
cash 61,000 6 12,194 -- 12,200
Contributed services -- -- 5,150 -- 5,150
Net (loss) for the three months
ended May 31, 2008 -- -- -- (25,167) (25,167)
------------ ------------ ------------ ------------ ------------
Balance, May 31, 2008 1,599,750 $ 160 $ 234,740 $ (239,600) $ (4,700)
============ ============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
8
FUTURA PICTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
AS RESTATED
FROM
FOR THE DECEMBER 10,
THREE FOR THE 2003 (DATE OF
MONTHS ENDED THREE INCEPTION) TO
MAY 31, 2008 MONTHS ENDED MAY 31, 2008
AS RESTATED MAY 31, 2007 AS RESTATED
----------- ----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) ....................................... $ (25,167) $ (20,692) $ (239,600)
Adjustments to reconcile net (loss) to net cash
(used) by operating activities:
Common stock issued for directors' fees .... -- -- 5,000
Contributed services ....................... 5,150 10,400 129,950
Amortization expense ....................... -- -- 20,000
Changes in operating assets and liabilities:
Prepaid expenses ...................... 1,000 -- --
Accrued expenses ...................... 8,842 7,410 12,591
Unearned revenue ...................... -- -- 25,000
----------- ----------- -----------
NET CASH (USED) BY OPERATING ACTIVITIES ....... (10,175) (2,882) (47,059)
----------- ----------- -----------
CASH FLOWS (USED) BY INVESTING ACTIVITIES:
Production in progress ........................... (2,000) -- (13,000)
----------- ----------- -----------
NET CASH (USED) BY FINANCING ACTIVITIES ........ (2,000) -- (13,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from loan payable - related party ....... -- -- 11,500
Repayments on loan payable - related party ....... -- -- (10,543)
Proceeds from sale of common stock ............... 12,200 2,000 79,950
----------- ----------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES ...... 12,200 2,000 80,907
----------- ----------- -----------
NET INCREASE (DECREASE) IN CASH ..................... 25 (882) 20,848
CASH AT THE BEGINNING OF THE PERIOD ................. 20,823 5,151 --
----------- ----------- -----------
CASH AT THE END OF THE PERIOD ....................... $ 20,848 $ 4,269 $ 20,848
=========== =========== ===========
9
FUTURA PICTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF CASH FLOWS (CONTINUED)
(Unaudited)
AS RESTATED
FROM
FOR THE DECEMBER 10,
THREE FOR THE 2003 (DATE OF
MONTHS ENDED THREE INCEPTION) TO
MAY 31, 2008 MONTHS ENDED MAY 31, 2008
AS RESTATED MAY 31, 2007 AS RESTATED
----------- ----------- -----------
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION
Interest paid $ -- $ -- $ --
Taxes paid $ -- $ 800 $ 2,571
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.
10
FUTURA PICTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
RESTATEMENT OF FINANCIAL STATEMENTS
Subsequent to the issuance of the financial statements for the three
months ended May 31, 2008 the Company identified an error in the
recording of production in progress which resulted in an overstatement
of research and development in the amount of $2,000 for the three
months ended May 31, 2008 and $13,000 for the period of inception,
December 10, 2003, to May 31, 2008 and an understatement of production
in progress in the amount of $13,000. Accordingly, the financial
statements for the three months ended May 31, 2008 have been restated
to correct the error.
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.
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 (consisting of only normal recurring adjustments, unless
otherwise noted) 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, 2008
are not necessarily indicative of the results that may be expected for
the year ended February 28, 2009. Accordingly, your attention is
directed to footnote disclosures found in the February 29, 2008 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.
11
FUTURA PICTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
PRODUCTION IN PROCESS
The Company capitalizes costs incurred in the development of a
documentary under a Production Agreement (the "Agreement"; see Note 5).
The Company utilizes the Completed Contract method for this Agreement
and, accordingly, costs incurred are capitalized and receipts are
recorded as Unearned Revenue until completion of the documentary.
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.
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 timely procuring significant external debt and/or equity financing
to fund its immediate and near-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.
12
FUTURA PICTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
NOTE 3 DEVELOPMENT STAGE OPERATIONS
As of May 31, 2008, 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 UNEARNED REVENUE
On December 27, 2007, the Company entered into a Production Agreement
(the "Agreement") with the Hathaway Group to develop and produce a one
hour television documentary (the "Project"). The material terms of the
Agreement are: (a) the Company will receive $150,000 as total
compensation for writing, shooting, producing, editing, and in all
respects completing the Project in accordance with standard television
broadcast specifications; (b) upon signing the Agreement, the Company
received the initial payment of $25,000 (recorded as Deferred Revenue
in the accompanying balance sheet), with the balance to be paid in
accordance with the Agreement's materials delivery schedule; (c) the
Company shall supervise and be responsible for the entire production
work, and shall arrange and pay for all materials and labor required to
complete the Project; and, (d) the Company shall submit a script for
the Project no later than June 30, 2008, for review and approval, and
complete the Project no later than December 31, 2008.
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 through December
31, 2008. The note bears interest at 8% and is due upon demand, no
later than June 30, 2009. The outstanding balance was $957 as of May
31, 2008.
CONSULTING AGREEMENT
During September 2007, the Company entered into a consulting agreement
(the "contract") with Calvin Young, brother to the Company's President,
Buddy Young, whereby Calvin Young provides the Company consulting
13
FUTURA PICTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
services in relation to the development of a script under the Agreement
noted in Note 4. Per the contract, the Company pays Calvin Young $2,000
per month. As of May 31, 2008, the Company's costs incurred were
$13,000 under this agreement.
NOTE 6 STOCKHOLDERS' DEFICIT
For the three months ended May 31, 2008 and 2007, the Company's
President devoted time to the development process of the Company.
Compensation expense totaling $10,400 has been recorded in each period.
Of this amount, the President was paid $5,250 and $-0- during the three
months ended May 31, 2008 and 2007, respectively. The President has
waived reimbursement of $5,150 and $10,400 during the three months
ended May 31, 2008 and 2007, respectively.
NOTE 7 SUBSEQUENT EVENT (UNAUDITED)
During June 2008, the Company submitted the script to the Hathaway
Group in accordance with the Agreement (see Note 4) and received an
additional $25,000 payment.
14
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
You should read this section together with our financial statements and
related notes thereto included elsewhere in this report. In addition to the
historical information contained herein, this report contains forward-looking
statements that are subject to risks and uncertainties. Forward-looking
statements are not based on historical information but relate to future
operations, strategies, financial results or other developments. Forward-looking
statements are necessarily based upon estimates and assumptions that are
inherently subject to significant business, economic and competitive
uncertainties and contingencies, many of which are beyond our control and many
of which, with respect to future business decisions, are subject to change.
Certain statements contained in this Form 10, including, without limitation,
statements containing the words "believe," "anticipate," "estimate," "expect,"
"are of the opinion that" and words of similar import, constitute
"forward-looking statements." You should not place any undue reliance on these
forward-looking statements.
You should be aware that our results from operations could materially
be effected by a number of factors, which include, but are not limited to the
following: economic and business conditions specific to the motion picture,
television, and home video industries; competition from other producers of home
video content; and television documentaries, our ability to control costs and
expenses, access to capital, and our ability to meet contractual obligations.
There may be other factors not mentioned above or included elsewhere in this
report that may cause actual results to differ materially from any
forward-looking information.
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 two
accounting policies that we believe are key to an understanding of our financial
statements. These are important accounting policies that require management's
most difficult, subjective judgment.
GOING CONCERN. 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.
15
The Company's continuation as a going concern currently is dependent
upon timely procuring significant external debt and/or equity financing to fund
its immediate and near-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.
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.
SELECT FINANCIAL INFORMATION
For the Three Months Ended
--------------------------------
5/31/08 5/31/07
(Unaudited) (Unaudited)
------------ ------------
Statement of Operations Data
Total revenue .......................... $ -- $ --
Operating loss ......................... $ (24,367) $ (19,892)
Net loss after taxes ................... $ (25,167) $ (20,692)
Net loss per share ..................... $ (0.02) $ (0.02)
Balance Sheet Data
Total assets ........................... $ 33,848 $ 4,269
Total liabilities ...................... $ 38,548 $ 23,670
Stockholder's equity (deficit) ......... $ (4,700) $ (19,401)
THREE-MONTH PERIOD ENDED MAY 31, 2008 COMPARED TO THREE-MONTH PERIOD ENDED MAY
31, 2007
GENERAL
The Company was incorporated on December 10, 2003. We had no operations
until fiscal 2005. 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.
16
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. Both options remain
in force pursuant to extensions granted to the Company.
On December 27, 2007, we entered into a Production Agreement with
the Hathaway Group to develop and produce a one hour television documentary. The
material terms of the Agreement are: (a) we will receive $150,000 as total
compensation for writing, shooting, producing, editing, and in all respects
completing the documentary in accordance with standard television broadcast
specifications; (b) upon signing the Agreement, the Company received the initial
payment of $25,000 (recorded as Deferred Revenue in the accompanying balance
sheet), with the balance to be paid in accordance with the Agreement's materials
delivery schedule; (c) The Company shall supervise and be responsible for the
entire production work, and shall arrange and pay for all materials and labor
required to complete the documentary by December 31, 2008.
REVENUES
Since our inception in 2003, we have had no revenues from operations,
although we anticipate having revenues from operations during fiscal 2009
related to the production of a documentary.
EXPENSES
To date, our expenses have consisted mainly of general and
administrative expenses. The main components being contributed services,
professional services and the amortization of our loan commitment fee. During
the three month period ended May 31, 2008, we incurred a total of $24,367
general and administrative expenses. This consisted of $5,150 of contributed
services by our CEO, Buddy Young, $5,250 of compensation expense paid to our
CEO, Buddy Young and $9,198 of professional fees incurred for our audited
financial statements and related filings. We valued the contributed services
from Buddy Young at $100 per hour. During the same period in 2007, we incurred a
total of $19,892 general and administrative expenses. This consisted primarily
of $10,400 of contributed services by our CEO, Buddy Young, $8,154 of
professional fees incurred for our audited financial statements and related
filings.
While we cannot guarantee the level of our expenses in the future, we
anticipate them to increase as we fulfill our contractual requirement related to
the television documentary production.
17
PLAN OF OPERATION
During the past twelve months, our main activities were focused on
raising funds through the sale of equity, or other traditional borrowing sources
in order to enable us to begin production on one of the above referenced
projects. Additionally, in an effort to generate revenue from operations during
fiscal 2009, and to help establish the Company within the motion picture
industry, management obtained an agreement to produce a one hour television
documentary During the next twelve months our efforts will continue to be
focused on raising the funds required to develop and produce the screenplays
that we have optioned, as well as enabling us to take advantage of business
opportunities that may arise during the normal course of business. Such
opportunities may include the optioning and development of additional scripts
and participating in the co-financing of films produced by other companies.
There is no assurance that any such opportunities will arise, nor whether we
will have the funds available to us that will be sufficient to allow us to
capitalize on them.
In addition to our fund raising efforts we will focus our activities on
completing the television documentary in accordance with the provisions
contained in the production agreement referred to above. Among others, these
activities include: (a) completing the documentary script, (b) locating and
obtaining related archival film and photographs, (c) casting and filming the
on-camera host, (d) editing and sound mixing, and (e) completing post production
to comply with domestic and foreign television broadcast standards.
If during the next twelve months we are unable to raise the funds
through the sale of additional equity, or from traditional borrowing sources
necessary to begin production on either of the screenplays, we may be forced to
scale back our operations, or to totally abandon that part of our business plan
and seek other business opportunities in a related or unrelated industry.
However, if we are successful in raising sufficient funds, our principal
activities following the receipt of the funds will be as follows: (a) exercise
our option to acquire the rights to one of the aforementioned scripts, (b)
prepare a production budget for that film, (c) hire a director, (d) retain the
services of a production company to assemble the production crew, (e) cast the
film, (f) choose a location, (g) begin principal photography,(h) complete the
post production process, and (i) arrange for the films distribution.
We anticipate that cash obtained as a result of the sale of equity, or
funds available from traditional borrowing sources, the funds provided to us by
our president and principal shareholder, under a promissory note dated February
16, 2005, as amended, and funds received as a result of the aforementioned
television documentary agreement will be sufficient to fund our cash
requirements to continue our efforts as outlined above. As we cannot predict
whether we will be successful in raising sufficient funds, we cannot predict
whether we will ever be able to implement our plan of producing or co-financing
motion pictures.
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In 2005 we 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, and handling negotiations with industry
personnel. 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 shares of our common stock 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 June 30, 2009. As of May 31, 2008, the balance
owing on this agreement was $957. 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, the Company's President,
Buddy Young, along with Joseph Adelman, and Mel Powell, our Director of
acquisitions, work on a part-time basis. Other than Mr. Young, no employee has
received 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 $20,848 on May 31, 2008. Other than funds
received pursuant to the above mentioned documentary production agreement, at
this time, our only other known cash resource comes from the sale of equity, and
an agreement with our President and majority shareholder to fund any shortfall
in cash flow up to $100,000 at 8% interest through December 31, 2008. As of May
31, 2008 the balance owing on this agreement is $957. Payment of principal and
interest is due on this loan on June 30, 2009.
We believe the raising of funds through the sale of equity and further
borrowings from our President will be sufficient to satisfy our budgeted cash
requirements through February 28, 2009. 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.
During June 2008, we submitted the script to the Hathaway Group and
received an additional $25,000 payment per the Agreement. See Note 4 to the
financial statements.
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ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Based on the nature of our current operations, we have not identified
any issues of market risk at this time.
ITEM 4. CONTROLS AND PROCEDURES
The principal executive officer and principal financial officer of the
Company, who are the same person ("the Certifying Officer") with the assistance
of advisors, evaluated the effectiveness of the design and operation of the
Company's disclosure controls and procedures (as defined in section
240.13a-14(c) and 240.15d-14(c) under the Exchange Act) within 90 days prior to
the filing of this report. Based upon the subsequent discovery of the error in
our accounting for research and development expenses, the Certifying Officer now
concludes that the Company's disclosure controls and procedures are not
effective in timely alerting management to material information relative to the
Company which is required to be disclosed in its periodic filings with the SEC.
There were no significant changes in the Company's internal controls or
in other factors that could significantly affect these controls subsequent to
the date of their evaluation. We intend to address the deficiency noted above in
the second quarter of 2009 and take corrective actions with regard to
significant deficiencies and material weaknesses.
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS None.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the quarter ended May 31, 2008, no matters were submitted to the
Company's security holders.
ITEM 5. OTHER INFORMATION None.
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ITEM 6. EXHIBITS
31.1 Certification of CEO Pursuant to Securities Exchange Act Rules
13a-14 and 15d-14, as Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
32.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
FUTURA PICTURES, INC.
(Registrant)
Dated: April 8, 2009 /S/ BUDDY YOUNG
------------------------------------
Buddy Young, President and Chief
Executive Officer
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