UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended September 30, 2008.
[ ] Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period to .
--------- ----------
Commission File Number 333-145743
BONFIRE PRODUCTIONS, INC.
-----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Nevada 75-3260546
- -------------------------------- ------------------------------------
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
2018 156th Avenue NE, Building F, Suite 100
Bellevue, WA 98007
----------------------------------------
(Address of principal executive offices)
(425) 748-5041
---------------------------
(Issuer's telephone number)
None
- --------------------------------------------------------------------------------
(Former name,former address and former fiscal year,if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
Yes [ ] No [X]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section l2, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.
Yes [ ] No [ ]
<page>
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 6,503,332 Shares of $0.001 par value
Common Stock outstanding as of October 28, 2008.
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
<page>
BONFIRE PRODUCTIONS, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
September 30, 2008
(Unaudited)
BALANCE SHEETS
STATEMENTS OF OPERATIONS
STATEMENTS OF CASH FLOWS
STATEMENT OF STOCKHOLDERS' EQUITY
NOTES TO FINANCIAL STATEMENTS
<page>
BONFIRE PRODUCTIONS, INC.
(A Development Stage Company)
BALANCE SHEETS
September 30, June 30,
2008 2008
---- ----
(Unaudited) (Audited)
ASSETS
------
Current assets
Cash $ 7,295 $ 410
Prepaid expenses 31 31
--------- ----------
Total current assets 7,326 441
Equipment, net 1,713 1,852
Security deposit 200 200
--------- ----------
Total Assets $ 9,239 $ 2,493
========= ==========
LIABILITIES & STOCKHOLDERS' EQUITY
----------------------------------
Current liabilities
Accounts payable and accrued liabilities $ 6,647 $ 6,312
Due to related parties 4,400 2,745
Loan payable - related parties - 26,632
--------- ----------
Total current liabilities 11,047 35,689
Total Liabilities 11,047 35,689
--------- ----------
Stockholders' Equity
Capital stock
75,000,000 shares authorized, $0.001 par value
6,503,332 shares issued and outstanding
(June 30, 2008 - 6,503,332) 6,503 6,503
Additional paid in capital 42,047 42,047
Deficit accumulated during the development stage ( 50,358) ( 81,746)
--------- ----------
Total Stockholders' Equity ( 1,808) ( 33,196)
--------- ----------
Total Liabilities and Stockholders' Equity $ 9,239 $ 2,493
========= ==========
The accompanying notes are an integral part of these financial statements
<page>
BONFIRE PRODUCTIONS, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
<table>
<caption>
Three Months August 25, 2006
Ended (Inception) through
September 30, September 30,
2008 2007 2008
---- ---- ----
<s> <c> <c> <c>
Revenue $ 7,500 $ - $ 7,500
---------- --------- --------
Expenses:
Amortization $ 139 $ - $ 215
Audio production - - 14,500
General and Administrative 12,760 11,364 78,798
---------- --------- --------
( 12,899) ( 11,364) (93,513)
---------- --------- --------
Loss from operations ( 5,399) ( 11,364) (86,013)
Other income (expense)
Interest expense ( 336) ( 244) ( 1,468)
Gain on settlement of amounts due to related party 37,123 - 37,123
---------- --------- --------
Income (loss) before provision for income tax 31,388 ( 11,608) (50,358)
Provision for income tax - - -
---------- --------- --------
Net income (loss) $ 31,388 $( 11,608) $(50,358)
========== ========= ========
Income (loss) per share $ 0.01 $( 0.01)
========== =========
Weighted average number of common shares outstanding 6,503,332 3,500,000
========== =========
</table>
The accompanying notes are an integral part of these financial statements
<page>
BONFIRE PRODUCTIONS, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
<table>
<caption>
Three Months August 25, 2006
Ended (Inception) through
September 30, September 30,
2008 2007 2008
---- ---- ----
<s> <c> <c> <c>
Operating Activities:
Net income (loss) $ 31,388 $( 11,608) $( 50,358)
Adjustment to reconcile net income to net
cash provided by (used for) operating activities:
Amortization 139 - 215
Prepaid expenses - ( 31) ( 31)
Security deposit - ( 200) ( 200)
Accounts payable and accrued liabilities 335 ( 4,500) 6,648
Accounts payable related parties 4,810 759 7,555
Gain on settlement of amounts due to related party ( 37,123) - ( 37,123)
---------- ---------- ----------
Net cash provided by (used for)
operating activities ( 451) ( 15,580) ( 73,294)
---------- ---------- ----------
Investing Activities
Purchase of fixed assets - - ( 1,929)
---------- ---------- ----------
Net cash provided by (used for)
investing activities - - ( 1,929)
---------- ---------- ----------
Financing Activities:
Loan payable - related party 7,336 244 33,968
Proceeds from issuance of common stock - - 48,550
---------- ---------- ----------
Net cash provided by (used for)
financing activities 7,336 244 82,518
---------- ---------- ----------
Net Increase (Decrease) In Cash 6,885 ( 15,336) 7,295
Cash At The Beginning Of The Period 410 16,253 -
---------- ---------- ----------
Cash (Bank Indebtedness) At The End
Of The Period $ 7,295 $ 1,187 $ 7,295
========== ========== ===========
Schedule Of Non-Cash Investing And Financing Activities
- -------------------------------------------------------
None
Supplemental Disclosure
- -----------------------
Cash paid for:
Interest $ - $ - $ -
========== ========= =========
Income Taxes $ - $ - $ -
========== ========= =========
</table>
The accompanying notes are an integral part of these financial statements
<page>
BONFIRE PRODUCTIONS, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
August 25, 2006 (Inception) Through June 30, 2008
(Unaudited)
<table>
<caption>
Deficit
Accumulated
Common Shares During the
------------- Paid In Development
Number Par Value Capital Stage Total
------ --------- ------- ----- -----
<s> <c> <c> <c> <c> <c>
Balances, August 25, 2006 - $ - $ - $ - $ -
Issued for cash:
Common stock December, 2006 - at $0.001 3,500,000 3,500 - - 3,500
Net gain (loss) for the period ended June 30, 2007 - - - ( 10,211) ( 10,211)
--------- ----------- ----------- ----------- ------------
Balances, June 30, 2007 3,500,000 3,500 - ( 10,211) ( 6,711)
Issued for cash:
Common stock November, 2007 - at $0.015 3,003,332 3,003 42,047 - 45,050
Net gain (loss) for the period ended June 30, 2008 - - - ( 71,535) ( 71,535)
--------- ----------- ----------- ----------- ------------
Balances, June 30, 2008 6,503,332 6,503 42,047 ( 81,746) ( 33,196)
Net gain (loss) for the period ended September 30, 2008 - - - 31,388 31,388
--------- ----------- ----------- ----------- ------------
Balances, September 30, 2008 6,503,332 $ 6,503 $ 42,047 $( 50,358) $ ( 1,808)
========= =========== =========== =========== ============
</table>
The accompanying notes are an integral part of these financial statements
<page>
BONFIRE PRODUCTIONS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
September 30, 2008
(Unaudited)
Note 1 Nature and Continuance of Operations
------------------------------------
Organization
------------
The Company was incorporated in the State of Nevada, United States
of America on August 25, 2006 and its fiscal year end is June 30.
The Company is engaged in recording, publishing and distribution
of multicultural stories and fairy tales for children through its
website www.bonfiretales.com and other internet retailers.
Going Concern
-------------
These financial statements have been prepared on a going concern
basis. The Company has a working capital deficiency of $3,721, and
has accumulated deficit of $50,358 since inception. Its ability to
continue as a going concern is dependent upon the ability of the
Company to generate profitable operations in the future and/or to
obtain the necessary financing to meet its obligations and repay
its liabilities arising from normal business operations when they
come due. The outcome of these matters cannot be predicted with
any certainty at this time. These factors raise substantial doubt
that the company will be able to continue as a going concern.
Management plans to continue to provide for its capital needs by
the issuance of common stock and related party advances. These
financial statements do not include any adjustments to the amounts
and classification of assets and liabilities that may be necessary
should the Company be unable to continue as a going concern.
Unaudited Interim Financial Statements
--------------------------------------
The accompanying unaudited interim financial statements have been
prepared in accordance with United States generally accepted
accounting principles for interim financial information and with
the instructions to Form 10-QSB of Regulation S-B. Certain
information and footnote disclosures normally included in
financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have
been condensed or omitted pursuant to such rules and regulations.
However, except as disclosed herein, there have been no material
changes in the information disclosed in the notes to the financial
statements for the year ended June 30, 2008, included in the
Company's annual report on Form10KSB filed with the Securities and
Exchange Commission. The interim unaudited financial statements
should be read in conjunction with those financial statements
included in the Form 10KSB. In the opinion of Management, all
adjustments considered necessary for a fair presentation,
consisting solely of normal recurring adjustments, have been made.
Operating results for the three months ended September 30, 2008
are not necessarily indicative of the results that may be expected
for the year ending June 30, 2009.
<page>
Bonfire Productions, Inc.
(A Development Stage Company)
Notes to Financial Statements
September 30, 2008
(Unaudited) - Page 2
Note 2 Summary of Significant Accounting Policies
------------------------------------------
The financial statements of the Company have been prepared in
accordance with generally accepted accounting principles in the
United States of America. Because a precise determination of many
assets and liabilities is dependent upon future events, the
preparation of financial statements for a period necessarily
involves the use of estimates which have been made using careful
judgement. Actual results may vary from these estimates.
The financial statements have, in management's opinion, been
properly prepared within reasonable limits of materiality and
within the framework of the significant accounting policies
summarized below:
Development Stage Company
-------------------------
The Company complies with Financial Accounting Standard Board
Statement ("FAS") No. 7 and The Securities and Exchange Commission
Act Guide 7 for its characterization of the Company as development
stage.
Revenue Recognition
-------------------
We recognize revenue from product sales when the following four
revenue recognition criteria are met: persuasive evidence of an
arrangement exists, delivery has occurred or services have been
rendered, the selling price is fixed or determinable, and
collectibility is reasonably assured. Product sales and shipping
revenues, net of promotional discounts, rebates, and return
allowances, are recorded when the products are shipped and title
passes to customers.
Impairment of Long-lived Assets
-------------------------------
Capital assets are reviewed for impairment in accordance with FAS
No. 144, "Accounting for the Impairment or Disposal of Long-lived
Assets", which was adopted effective January 1, 2002. Under FAS
No. 144, these assets are tested for recoverability whenever
events or changes in circumstances indicate that their carrying
amounts may not be recoverable. An impairment charge is recognized
for the amount, if any, which the carrying value of the asset
exceeds the fair value.
Technology and Content
----------------------
Technology and content expenses consist principally of
consultants' fees and expenses related to website development,
editorial content, and systems support. Technology and content
costs are expensed as incurred.
Advertising Costs
-----------------
The Company's policy regarding advertising is to expense
advertising when incurred. The Company had not incurred any
advertising expense as of September 30, 2008.
<page>
Bonfire Productions, Inc.
(A Development Stage Company)
Notes to Financial Statements
September 30, 2008
(Unaudited) - Page 3
Note 2 Summary of Significant Accounting Policies - (cont'd)
------------------------------------------
Foreign Currency Translation
----------------------------
The financial statements are presented in United States dollars.
In accordance with Statement of Financial Accounting Standards No.
52, "Foreign Currency Translation", since the functional currency
of the Company is U.S. dollars, the foreign currency financial
statements of the Company's subsidiaries are re-measured into U.S.
dollars. Monetary assets and liabilities are re-measured using the
foreign exchange rate that prevailed at the balance sheet date.
Revenue and expenses are translated at weighted average rates of
exchange during the year and stockholders' equity accounts and
furniture and equipment are translated by using historical
exchange rates. Any re-measurement gain or loss incurred is
reported in the income statement.
Net Loss per Share
------------------
Basic loss per share includes no dilution and is computed by
dividing loss available to common stockholders by the weighted
average number of common shares outstanding for the period.
Dilutive losses per share reflects the potential dilution of
securities that could share in the losses of the Company. Because
the Company does not have any potentially dilutive securities, the
accompanying presentation is only of basic loss per share.
Stock-based Compensation
------------------------
The Company has not adopted a stock option plan and has not
granted any stock options. Accordingly no stock-based compensation
has been recorded to date.
Income Taxes
------------
The Company uses the asset and liability method of accounting for
income taxes in accordance with FAS No. 109 "Accounting for Income
Taxes". Under this method, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to
temporary differences between the financial statements carrying
amounts of existing assets and liabilities and loss carryforwards
and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply
to taxable income in the years in which those temporary
differences are expected to be recovered or settled.
Fair Value of Financial Instruments
-----------------------------------
The carrying value of the Company's financial instruments
consisting of cash, accounts payable and accrued liabilities,
agreement payable and due to related party approximate their
carrying value due to the short-term maturity of such instruments.
Unless otherwise noted, it is management's opinion that the
Company is not exposed to significant interest, currency or credit
risks arising from these financial instruments.
<page>
Bonfire Productions, Inc.
(A Development Stage Company)
Notes to Financial Statements
September 30, 2008
(Unaudited) - Page 4
Note 2 Summary of Significant Accounting Policies - (cont'd)
------------------------------------------
Recent Accounting Pronouncements
--------------------------------
In May 2008, the Financial Accounting Standards Board ("FASB")
issued SFAS No.163, "Accounting for Financial Guarantee Insurance
Contracts-and interpretation of FASB Statement No.60". SFAS No.163
clarifies how Statement 60 applies to financial guarantee
insurance contracts, including the recognition and measurement of
premium revenue and claims liabilities. This statement also
requires expanded disclosures about financial guarantee insurance
contracts. SFAS No. 163 is effective for fiscal years beginning on
or after December 15, 2008, and interim periods within those
years. SFAS No.163 has no effect on the Company's financial
position, statements of operations, or cash flows at this time.
In May 2008, the Financial Accounting Standards Board ("FASB")
issued SFAS No. 162, "The Hierarchy of Generally Accepted
Accounting Principles". SFAS No. 162 sets forth the level of
authority to a given accounting pronouncement or document by
category. Where there might be conflicting guidance between two
categories, the more authoritative category will prevail. SFAS No.
162 will become effective 60 days after the SEC approves the
PCAOB's amendments to AU Section 411 of the AICPA Professional
Standards. SFAS No. 162 has no effect on the Company's financial
position, statements of operations, or cash flows at this time.
In March 2008, the Financial Accounting Standards Board, or FASB,
issued SFAS No. 161, Disclosures about Derivative Instruments and
Hedging Activities--an amendment of FASB Statement No. 133. This
standard requires companies to provide enhanced disclosures about
(a) how and why an entity uses derivative instruments, (b) how
derivative instruments and related hedged items are accounted for
under Statement 133 and its related interpretations, and (c) how
derivative instruments and related hedged items affect an entity's
financial position, financial performance, and cash flows. This
Statement is effective for financial statements issued for fiscal
years and interim periods beginning after November 15, 2008, with
early application encouraged. The Company has not yet adopted the
provisions of SFAS No. 161, but does not expect it to have a
material impact on its consolidated financial position, results of
operations or cash flows.
In December 2007, the SEC issued Staff Accounting Bulletin (SAB)
No. 110 regarding the use of a "simplified" method, as discussed
in SAB No. 107 (SAB 107), in developing an estimate of expected
term of "plain vanilla" share options in accordance with SFAS No.
123 (R), Share-Based Payment. In particular, the staff indicated
in SAB 107 that it will accept a company's election to use the
simplified method, regardless of whether the company has
sufficient information to make more refined estimates of expected
term. At the time SAB 107 was issued, the staff believed that more
detailed external information about employee exercise behavior
(e.g., employee exercise patterns by industry and/or other
categories of companies) would, over time, become readily
available to companies. Therefore, the staff stated in SAB 107
that it would not expect a company to use the simplified method
for share
<page>
Bonfire Productions, Inc.
(A Development Stage Company)
Notes to Financial Statements
September 30, 2008
(Unaudited) - Page 5
Note 2 Summary of Significant Accounting Policies - (cont'd)
------------------------------------------
Recent Accounting Pronouncements - (cont'd)
---------------------------------
option grants after December 31, 2007. The staff understands that
such detailed information about employee exercise behavior may not
be widely available by December 31, 2007. Accordingly, the staff
will continue to accept, under certain circumstances, the use of
the simplified method beyond December 31, 2007. The Company
currently uses the simplified method for "plain vanilla" share
options and warrants, and will assess the impact of SAB 110 for
fiscal year 2009. It is not believed that this will have an impact
on the Company's consolidated financial position, results of
operations or cash flows.
In December 2007, the FASB issued SFAS No. 160, Noncontrolling
Interests in Consolidated Financial Statements--an amendment of
ARB No. 51. This statement amends ARB 51 to establish accounting
and reporting standards for the noncontrolling interest in a
subsidiary and for the deconsolidation of a subsidiary. It
clarifies that a noncontrolling interest in a subsidiary is an
ownership interest in the consolidated entity that should be
reported as equity in the consolidated financial statements.
Before this statement was issued, limited guidance existed for
reporting noncontrolling interests. As a result, considerable
diversity in practice existed. So-called minority interests were
reported in the consolidated statement of financial position as
liabilities or in the mezzanine section between liabilities and
equity. This statement improves comparability by eliminating that
diversity. This statement is effective for fiscal years, and
interim periods within those fiscal years, beginning on or after
December 15, 2008 (that is, January 1, 2009, for entities with
calendar year-ends). Earlier adoption is prohibited. The effective
date of this statement is the same as that of the related
Statement 141 (revised 2007). The Company will adopt this
Statement beginning March 1, 2009. It is not believed that this
will have an impact on the Company's consolidated financial
position, results of operations or cash flows.
In December 2007, the FASB, issued FAS No. 141 (revised 2007),
Business Combinations.'This Statement replaces FASB Statement No.
141, Business Combinations, but retains the fundamental
requirements in Statement 141. This Statement establishes
principles and requirements for how the acquirer: (a) recognizes
and measures in its financial statements the identifiable assets
acquired, the liabilities assumed, and any noncontrolling interest
in the acquiree; (b) recognizes and measures the goodwill acquired
in the business combination or a gain from a bargain purchase; and
(c) determines what information to disclose to enable users of the
financial statements to evaluate the nature and financial effects
of the business combination. This statement applies prospectively
to business combinations for which the acquisition date is on or
after the beginning of the first annual reporting period beginning
on or after December 15, 2008. An entity may not apply it before
that date. The effective date of this statement is the same as
that of the related FASB Statement No. 160, Noncontrolling
Interests in Consolidated Financial Statements. The Company will
adopt this statement beginning March 1, 2009. It is not believed
that this will have an impact on the Company's consolidated
financial position, results of operations or cash flows.
<page>
Bonfire Productions, Inc.
(A Development Stage Company)
Notes to Financial Statements
September 30, 2008
(Unaudited) - Page 6
Note 2 Summary of Significant Accounting Policies - (cont'd)
------------------------------------------
Recent Accounting Pronouncements - (cont'd)
---------------------------------
In February 2007, the FASB, issued SFAS No. 159, The Fair Value
Option for Financial Assets and Liabilities--Including an Amendment
of FASB Statement No. 115. This standard permits an entity to
choose to measure many financial instruments and certain other
items at fair value. This option is available to all entities. Most
of the provisions in FAS 159 are elective; however, an amendment to
FAS 115 Accounting for Certain Investments in Debt and Equity
Securities applies to all entities with available for sale or
trading securities. Some requirements apply differently to entities
that do not report net income. SFAS No. 159 is effective as of the
beginning of an entities first fiscal year that begins after
November 15, 2007. Early adoption is permitted as of the beginning
of the previous fiscal year provided that the entity makes that
choice in the first 120 days of that fiscal year and also elects to
apply the provisions of SFAS No. 157 Fair Value Measurements. The
Company has adopted SFAS No. 159 beginning March 1, 2008 and is
currently evaluating the potential impact the adoption of this
pronouncement will have on its consolidated financial statements.
In September 2006, the FASB issued SFAS No. 157, Fair Value
Measurements This statement defines fair value, establishes a
framework for measuring fair value in generally accepted accounting
principles (GAAP), and expands disclosures about fair value
measurements. This statement applies under other accounting
pronouncements that require or permit fair value measurements, the
Board having previously concluded in those accounting
pronouncements that fair value is the relevant measurement
attribute. Accordingly, this statement does not require any new
fair value measurements. However, for some entities, the
application of this statement will change current practice. This
statement is effective for financial statements issued for fiscal
years beginning after November 15, 2007, and interim periods within
those fiscal years. Earlier application is encouraged, provided
that the reporting entity has not yet issued financial statements
for that fiscal year, including financial statements for an interim
period within that fiscal year. The Company has adopted this
statement March 1, 2008, and it is not believed that this will have
an impact on the Company's consolidated financial position, results
of operations or cash flows.
Note 3 Capital Stock
-------------
The total number of common shares authorized that may be issued by
the Company is 75,000,000 shares with a par value of one tenth of
one cent ($0.001) per share and no other class of shares is
authorized.
During the period from August 25, 2006 (inception) to June 30,
2007, the Company issued 3,500,000 shares of common stock to its
director for total proceeds of $3,500. During the year ended June
30, 2008, the Company issued 3,003,332 shares of common stock at
$0.015 per share for total proceeds of $45,050.
To September 30, 2008, the Company has not granted any stock
options and has not recorded any stock-based compensation.
<page>
Bonfire Productions, Inc.
(A Development Stage Company)
Notes to Financial Statements
September 30, 2008
(Unaudited) - Page 7
Note 4 Related Party Transactions
--------------------------
a) The President of the Company provides consulting services to
the Company. During the three months ended September 30, 2008
consulting services of $Nil (June 30, 2008 - $2,066) were
charged to operations.
b) A director of the Company provides consulting services to the
Company. During the period ended September 30, 2008,
consulting services of $4,000 (June 30, 2008 - $Nil) were
charged to operations.
c) As at September 30, 2008, the Company owed $4,400 to directors
of the Company for consulting services and cash advances
provided to the Company during the period ended September 30,
2008.
d) During the period ended June 30, 2007, the former President of
the Company provided a $15,000 loan to the Company. The loan
was payable on demand, unsecured, bore interest at 6.45% per
annum, and consisted of $15,000 of principal due on or after
June 19, 2008, and $1,000 of accrued interest payable as at
June 30, 2008.
During the year ended June 30, 2008, the former President of
the Company provided a $10,500 loan to the Company. The loan
was payable on demand, unsecured, bore interest at 6.45% per
annum, and consisted of $9,500 of principal due on or after
April 16, 2009, $1,000 of principal due on or after May 22,
2009 and $133 of accrued interest payable as at June 30, 2008.
During the period ended September 30, 2008, the former
President of the Company provided a $7,000 loan to the
Company. The loan was payable on demand, unsecured, bore
interest at 6.45% per annum, and consisted of $7,000 of
principal due on or after July 5, 2009, and $336 of accrued
interest payable as at August 29, 2008.
On August 29, 2008, the amounts due to the former President of
the Company were settled and the Company recorded a $37,123
gain on the settlement of amounts due to related party.
<page>
Forward-Looking Statements
- --------------------------
This Form 10-QSB includes "forward-looking statements" within the meaning of the
"safe-harbor" provisions of the Private Securities Litigation Reform Act of
1995. Such statements are based on management's current expectations and are
subject to a number of factors and uncertainties that could cause actual results
to differ materially from those described in the forward-looking statements.
All statements other than historical facts included in this Form, including
without limitation, statements under "Plan of Operation", regarding our
financial position, business strategy, and plans and objectives of management
for the future operations, are forward-looking statements.
Although we believe that the expectations reflected in such forward-looking
statements are reasonable, it can give no assurance that such expectations will
prove to have been correct. Important factors that could cause actual results to
differ materially from our expectations include, but are not limited to, market
conditions, competition and the ability to successfully complete financing.
Item 2. Plan of Operation
For the next twelve months our specific goal will be to produce, subject to
financing, additional collections of children's stories from around the world
and begin promotion of our website. To date, we have produced four stories which
are available for purchase and download from our website www.bonfiretales.com.
We estimate the cost of recording of four additional stories with an average
duration of 15-20 minutes with musical effects and casting of at least two voice
talent artists to be approximately $14,000.
We plan dedicating $5,000 to marketing and promotion of our website, subject to
financing. In addition, we plan optimizing our website for search engines, and
getting listed in online directories. We also plan devoting funds to
advertisements on parent-oriented websites such as ivillage.com, parenting.com
and todaysparent.com, subject to financing.
As well, we anticipate spending an additional $10,000 on professional fees,
general administrative costs and expenditures associated with complying with
reporting obligations. Total expenditures over the next 12 months are therefore
expected to be $29,000.
To September 30, 2008, the Company has funded its initial operations through the
issuance of 6,503,332 shares of capital stock for proceeds of $48,550 and loans
from former director in the total amount of $32,500. The loans were unsecured,
payable on demand and bore interest at 6.45% per annum.
We anticipate that additional funding will be required in the form of equity
financing from the sale of our common stock. However, at this time, we cannot
provide investors with any assurance that we will be able to raise sufficient
funding from the sale of our common stock, or through loans from our directors,
to fund our operations, marketing plan and to meet our obligations over the next
twelve months. We do not have any arrangements in place for any future equity
financing.
Results of Operations For Period Ending September 30, 2008, and 2007
- --------------------------------------------------------------------
Our gross revenue from the sale of distribution license for the three-month
period ended September 30, 2008, was $7,500, compared to $Nil for the
three-month period ended September 30, 2007.
During the three-month period ended September 30, 2008, we incurred operating
expenses in the amount of $12,760 (September 30, 2007: $11,364). These operating
expenses, presented as general and administrative expenses on the statements of
operations as of September 30, 2008, were comprised of accounting and audit fees
of $6,700 (September 30, 2007: $2,000), consulting fees of $4,000 (September 30,
2007: $Nil), legal fees of $820 (September 30, 2007: $5,500), management fees of
$Nil (September 30, 2007: $1,000), transfer agent expense of $303 (September 30,
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2007: $Nil), rent of $715 (September 30, 2007: $730) and office and
administrative expenses of $222 (September 30, 2007: $2,134). In addition the
company recorded amortization expense of $139 (September 30, 2007: $Nil) and
interest expense of $336 (September 30, 2008 - $244).
As at September 30, 2008, the Company had assets totalling $9,239(June 30, 2008:
$2,439), and liabilities totalling $11,047(June 30, 2008: $35,689) for a working
capital deficiency of $3,721.
As of September 30, 2008, we have recorded and published on our website our
first four collections of children's stories from around the world. We have
completed development of our website by adding four additional pages dedicated
to the stories recorded to date and adding a shopping cart. The stories are
available for purchase and download at a price of $2.99 per story. For this
purpose, we hired a recording studio, which sourced the voice talents, and
managed the recording process. To date we incurred $14,000 in recording costs
and $500 in script writing costs. As of September 30, 2008 we earned $7,500 from
the sale of audio files distribution license.
On September 14, 2007, the Company's Registration Statement on the Form SB-2
became effective. To date the Company issued 3,003,332 shares of common stock at
$0.015 per share for cash proceeds of $45,050 pursuant to this Registration
Statement.
Management
- ----------
On August 29, 2008, the Company has accepted the resignation of Alexander
Kulyashov, from his positions as the Company's President, Chief Executive
Officer and as a member of the Company's Board of Directors. Mr.Kulyashov
resigned to pursue other interests. Nadezda Maximova, our Chief Financial
Officer, was appointed as President and Chief Executive Officer of the Company.
In addition, Mrs. Elena Bylbash has been appointed by to our Board of Directors.
Mrs. Elena Bylbash, 30, has earned a law degree from St. Petersburg State
University. Prior to her appointment, she has been involved with several
publishing projects over the past 2 years. Elena Bylbash is not a director or
officer of any other public company.
During the period from August 25, 2006 (Inception) to August 29, 2008, the
former President of the Company provided loans to the Company totalling $32,500,
plus accrued interest of $1,458. The loans were unsecured, payable on demand and
bore interest at 6.45% per annum. On August 29, 2008, the amounts due to the
former President of the Company were settled and the Company recorded a $37,123
gain on the settlement of amounts due to related party.
We have generated minimal revenue since inception and are dependent upon
obtaining financing to pursue recording, marketing and distribution activities.
For these reasons, our auditors believe that there is substantial doubt that we
will be able to continue as a going concern.
Critical Accounting Policies
- ----------------------------
Our financial statements are prepared in accordance with accounting principles
generally accepted in the United States of America. Preparing financial
statements in accordance with generally accepted accounting principles requires
management to make estimates and assumptions which affect the reported amounts
of assets and liabilities and the disclosure of contingent assets and
liabilities at the balance sheet dates, and the recognition of revenues and
expenses for the reporting periods. These estimates and assumptions are affected
by management's application of accounting policies.
Revenue Recognition
- -------------------
We recognize revenue from product sales when the following four revenue
recognition criteria are met: persuasive evidence of an arrangement exists,
delivery has occurred or services have been rendered, the selling price is fixed
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or determinable, and collectibility is reasonably assured. Product sales and
shipping revenues, net of promotional discounts, rebates, and return allowances,
are recorded when the products are shipped and title passes to customers.
Item 3 Controls and Procedures
- ------------------------------
Evaluation of Disclosure Controls
We evaluated the effectiveness of our disclosure controls and procedures as of
October 28, 2008. This evaluation was conducted by Nadezda Maximova and Elena
Bylbash, our chief executive officer and our principal accounting officer.
Disclosure controls are controls and other procedures that are designed to
ensure that information that we are required to disclose in the reports we file
pursuant to the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported.
Limitations on the Effective of Controls
Our management does not expect that our disclosure controls or our internal
controls over financial reporting will prevent all error and fraud. A control
system, no matter how well conceived and operated, can provide only reasonable,
but no absolute, assurance that the objectives of a control system are met.
Further, any control system reflects limitations on resources, and the benefits
of a control system must be considered relative to its costs. These limitations
also include the realities that judgments in decision-making can be faulty and
that breakdowns can occur because of simple error or mistake. Additionally,
controls can be circumvented by the individual acts of some persons, by
collusion of two or more people or by management override of a control. A design
of a control system is also based upon certain assumptions about potential
future conditions; over time, controls may become inadequate because of changes
in conditions, or the degree of compliance with the policies or procedures may
deteriorate. Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and may not be detected.
Conclusions
Based upon their evaluation of our controls, Nadezda Maximova and Elena Bylbash,
our chief executive officer and principal accounting officer, have concluded
that, subject to the limitations noted above, the disclosure controls are
effective providing reasonable assurance that material information relating to
us is made known to management on a timely basis during the period when our
reports are being prepared. There were no changes in our internal controls that
occurred during the quarter covered by this report that have materially
affected, or are reasonably likely to materially affect our internal controls.
PART II - OTHER INFORMATION
- ---------------------------
Item 1. Legal Proceedings
- -------------------------
The Company is not a party to any pending legal proceedings. Management is not
aware of any threatened litigation, claims or assessments.
Item 2. Changes in Securities
- -----------------------------
None.
Item 3. Defaults Upon Senior Securities
- ---------------------------------------
None.
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Item 4. Submission of Matters to a Vote of Security Holders
- -----------------------------------------------------------
None.
Item 5. Other Information
- -------------------------
None.
Item 6. Exhibits and Report on Form 8-K
- ---------------------------------------
31.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
31.2 Certification pursuant to 18 U.S.C. Section 1350, 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
32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
On August 29, 2008, we have filed the Form 8-K announcing changes in the
Company's Board of Directors.
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.
Bonfire Productions, Inc.
/s/ Nadezda Maximova
---------------------------
Nadezda Maximova
President, Chief Executive
Officer, and Director
Dated: October 28, 2008
/s/ Elena Bylbash
----------------------------------
Elena Bylbash
Chief Financial Officer, Secretary
Treasurer, principal accounting
officer and Director
Dated: October 28, 2008