UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
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|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2009
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
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Commission file number 000-53049
RESHOOT PRODUCTION COMPANY
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(Exact name of registrant as specified in its charter)
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Nevada 26-1665960
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2749 Kingclaven, Henderson, NV 89044
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(Address of principal executive offices)(Zip Code)
Issuer's telephone number, including area code: (702) 416-1004
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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 large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
definition of "accelerated filer and large accelerated filer" 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)
Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act). Yes |_| No |X|
As of November 16, 2009, the registrant's outstanding common stock consisted
of 766,667 shares, $0.001 par value. Authorized - 70,000,000 common voting
shares. No preferred issued, 5,000,000 preferred shares, par value $0.001
authorized.
Table of Contents
Reshoot Production Company
Index to Form 10-Q
For the Quarterly Period Ended September 30, 2009
Part I. Financial Information
Page
Item 1. Financial Statements
Balance Sheets as of September 30, 2009 and December 31, 2008 3
Statements of Operations for the three months and nine months
ended September 30, 2009 and 2008 4
Statements of Stockholders' Equity 5
Statements of Cash Flows for the nine months
ended September 30, 2009 and 2008 6
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 15
Item 3. Quantitative and Qualitative Disclosures About Market Risk 21
Item 4. Controls and Procedures 23
Part II Other Information
Item 1. Legal Proceedings 26
Item 1A. Risk Factors 26
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 26
Item 3 -- Defaults Upon Senior Securities 26
Item 4 -- Submission of Matters to a Vote of Security Holders 26
Item 5 -- Other Information 26
Item 6. Exhibits 27
Signatures 28
2
Part I. Financial Information
Item 1. Financial Statements
Reshoot Production Company
(A Development Stage Company)
Balance Sheets
(Unaudited)
September 30, December 31,
2009 2008
------------- ------------
ASSETS
Current assets:
Cash and equivalents $ - $ -
Prepaid Expense 1,000 -
------------- ------------
Total current assets 1,000 -
------------- ------------
TOTAL ASSETS $ 1,000 $ -
============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 1,250 $ 2,025
------------- ------------
Total liabilities 1,250 2,025
------------- ------------
Stockholders' equity:
Preferred stock; $0.001 par value;
5,000,000 shares authorized, none
issued or outstanding - -
Common stock, $0.001 par value; 70,000,000
shares authorized; 766,667, 766,667
issued and outstanding as of 9/30/09 and
12/31/08, respectively 767 767
Additional paid-in capital 11,633 4,633
(Deficit) accumulated during development
stage (12,650) (7,425)
------------- ------------
Total stockholders' equity (250) (2,025)
------------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,000 $ -
============= ============
The accompanying notes are an integral part of these financial statements.
3
Reshoot Production Company
(A Development Stage Company)
Statements of Operations
(Unaudited)
For the three For the nine October 31,
months ending months ending 2007
---------------------- ---------------------- (Inception) to
Sep. 30, Sep. 30, Sep. 30, Sep. 30, September 30,
2009 2008 2009 2008 2009
---------- ---------- ---------- ---------- --------------
REVENUE $ - $ - $ - $ - $ -
---------- ---------- ---------- ---------- --------------
EXPENSES:
Audit Fees 1,000 - 4,500 - 5,500
General &
administrative - - - - 5,500
Organizational
costs - - - - 400
Transfer
agent fees 150 - 725 525 1,250
---------- ---------- ---------- ---------- --------------
Total expenses 1,150 - 5,225 525 12,650
---------- ---------- ---------- ---------- --------------
Net (loss)
before income
taxes (1,150) - (5,225) (525) (12,650)
Income tax
expense - - - - -
---------- ---------- ---------- ---------- --------------
NET (LOSS) $ (1,150) $ - $ (5,225) $ (525) $ (12,650)
========== ========== ========== ========== ==============
NET (LOSS) PER
SHARE - BASIC
AND FULLY
DILUTED $ (0.00) $ 0.00 $ (0.00) $ (0.00)
========== ========== ========== ==========
WEIGHTED AVERAGE
NUMBER OF
COMMON SHARES
OUTSTANDING -
BASIC AND FULLY
DILUTED 766,667 766,667 766,667 766,667
========== ========== ========== ==========
The accompanying notes are an integral part of these financial statements.
4
Reshoot Production Company
(A Development Stage Company)
Statements of Stockholders' Equity
(Unaudited)
Accumulated
Preferred Common (Deficit) Total
Stock Stock Additional During Stock-
-------------- ------------------ Paid-in Development holders'
Shares Amount Shares Amount Capital Stage Equity
------ ------- ---------- ------- ------- ----------- ---------
October 2007
Contributed
Capital 400 400
December 2007
Contributed
Capital 5,000 5,000
Net loss for
the period ended
12/31/2007 (5,400) (5,400)
------ ------- ---------- ------- ------- ----------- ---------
Balance,
12/31/2007 - $ - - $ - $5,400 $ (5,400) $ -
January 2008
Reshoot & Edit
Spinoff to
Reshoot
Production
Company 766,667 767 (767) -
Net loss for
the year ended
12/31/2008 (2,025) (2,025)
------ ------- ---------- ------- -------- ---------- ---------
Balance,
12/31/2008 - $ - 766,667 $ 767 $ 4,633 $ (7,425) $ (2,025)
January 2009
Contributed
capital 1,500 1,500
February 2009
Contributed
capital 5,500 5,500
Net loss for
the period ended
9/30/2009 (5,225) (5,225)
------ ------- ---------- ------- -------- ---------- ---------
Balance,
9/30/2009 - $ - 766,667 $ 767 $11,633 $ (12,650) $ (250)
====== ======= ========== ======= ======== ========== =========
The accompanying notes are an integral part of these financial statements.
5
Reshoot Production Company
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
For the nine months ending October 31, 2007
September 30, (Inception) to
---------------------------- September 30,
2009 2008 2009
------------- ------------- ----------------
OPERATING ACTIVITIES
Net (loss) $ (5,225) $ (525) $ (12,650)
Adjustments to reconcile
net loss to net cash
provided (used) by
operating activities:
(Increase) in prepaid
expenses (1,000) - (1,000)
Increase (decrease)
in accounts payable (775) 525 1,250
------------- ------------- ----------------
Net cash (used) by
operating activities (7,000) - (12,400)
FINANCING ACTIVITIES
Contributed capital 7,000 - 12,400
------------- ------------- ----------------
Net cash provided by
financing activities 7,000 - 12,400
------------- ------------- ----------------
NET CHANGE IN CASH - - -
CASH - BEGINNING OF PERIOD - - -
------------- ------------- ----------------
CASH - END OF PERIOD $ - $ - $ -
============= ============= ================
SUPPLEMENTAL DISCLOSURES:
Interest paid $ - $ - $ -
Income taxes paid $ - $ - $ -
Non-cash transactions $ - $ - $ -
The accompanying notes are an integral part of these financial statements.
6
Reshoot Production Company
(A Development Stage Company)
Notes to Financial Statements
NOTE 1. General Organization and Business
Reshoot Production Company (the "Company") was organized October 31, 2007
(Date of Inception) under the laws of the State of Nevada, as Reshoot
Production Company. The Company was incorporated as a subsidiary of Reshoot
& Edit, a Nevada corporation. Reshoot & Edit was incorporated August 23,
2006, and at the time of spin off was listed on the Over-the-Counter Bulletin
Board.
The Company is a development stage enterprise in accordance with Statement
of Financial Accounting Standards ("SFAS") No. 7, "Accounting and Reporting
by Development Stage Enterprises". The Company plans to develop and market
medical devices.
NOTE 2. Summary of Significant Accounting Practices
The Company had assets of $1,000 and liabilities of $(1,250) as of
September 30, 2009. The relevant accounting policies are listed below.
Basis of Accounting
- -------------------
The basis is United States generally accepted accounting principles.
Earnings per Share
- ------------------
The basic earnings (loss) per share is calculated by dividing the Company's
net income (loss) available to common shareholders by the weighted average
number of common shares during the year. The diluted earnings (loss) per
share is calculated by dividing the Company's net income (loss) available to
common shareholders by the diluted weighted average number of shares
outstanding during the year. The diluted weighted average number of shares
outstanding is the basic weighted number of shares adjusted as of the first
of the year for any potentially dilutive debt or equity.
The Company has not issued any options or warrants or similar securities
since inception.
Dividends
- ---------
The Company has not yet adopted any policy regarding payment of dividends.
No Dividends have been paid during the period shown.
7
Reshoot Production Company
(A Development Stage Company)
Notes to Financial Statements
NOTE 2. Summary of Significant Accounting Practices (Continued)
Revenue recognition
- -------------------
Revenue from time and material service contracts is recognized as the
services are provided. Revenue from fixed price long-term service contracts
is recognized over the contract term based on the percentage of services that
are provided during the period compared with the total estimated services to
be provided over the entire contract. Losses on fixed price contracts are
recognized during the period in which the loss first becomes apparent.
Revenue from maintenance is recognized over the contractual period or as the
services are performed. Revenue in excess of billings on service contracts
is recorded as unbilled receivables and is included in trade accounts
receivable. Billings in excess of revenue that is recognized on service
contracts are recorded as deferred income until the above revenue recognition
criteria are met.
Income Taxes
- ------------
The provision for income taxes is the total of the current taxes payable and
the net of the change in the deferred income taxes. Provision is made for
the deferred income taxes where differences exist between the period in which
transactions affect current taxable income and the period in which they enter
into the determination of net income in the financial statements.
Year-end
- --------
The Company has selected December 31 as its year-end.
Advertising
- -----------
Advertising is expensed when incurred. There has been no advertising during
the period.
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 estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenue
and expenses during the reporting period. Actual results could differ from
those estimates.
8
Reshoot Production Company
(A Development Stage Company)
Notes to Financial Statements
NOTE 2. Summary of Significant Accounting Practices (Continued)
Recent Pronouncements
- ---------------------
June 2009, the FASB issued SFAS No. 166, "Accounting for Transfers of
Financial Assets - an amendment of FASB Statement No. 140" ("SFAS 166"). The
provisions of SFAS 166, in part, amend the derecognition guidance in FASB
Statement No. 140, eliminate the exemption from consolidation for qualifying
special-purpose entities and require additional disclosures. SFAS 166 is
effective for financial asset transfers occurring after the beginning of an
entity's first fiscal year that begins after November 15, 2009. The Company
does not expect the provisions of SFAS 166 to have a material effect on the
financial position, results of operations or cash flows of the Company.
In June 2009, the FASB issued SFAS No. 167, "Amendments to FASB
Interpretation No. 46(R) ("SFAS 167"). SFAS 167 amends the consolidation
guidance applicable to variable interest entities. The provisions of SFAS 167
significantly affect the overall consolidation analysis under FASB
Interpretation No. 46(R). SFAS 167 is effective as of the beginning of the
first fiscal year that begins after November 15, 2009. SFAS 167 will be
effective for the Company beginning in 2010. The Company does not expect the
provisions of SFAS 167 to have a material effect on the financial position,
results of operations or cash flows of the Company.
In June 2009, the FASB issued SFAS No. 168, "The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles -
a replacement of FASB Statement No. 162" ("SFAS No. 168"). Under SFAS No. 168
the "FASB Accounting Standards Codification" ("Codification") will become the
source of authoritative U.S. GAAP to be applied by nongovernmental entities.
Rules and interpretive releases of the Securities and Exchange Commission
("SEC") under authority of federal securities laws are also sources of
authoritative GAAP for SEC registrants. SFAS No. 168 is effective for
financial statements issued for interim and annual periods ending after
September 15, 2009. On the effective date, the Codification will supersede
all then-existing non-SEC accounting and reporting standards. All other
non-grandfathered non-SEC accounting literature not included in the
Codification will become non-authoritative. SFAS No. 168 is effective for
the Company's interim quarterly period beginning July 1, 2009. The Company
does not expect the adoption of SFAS No. 168 to have an impact on the
financial statements.
9
Reshoot Production Company
(A Development Stage Company)
Notes to Financial Statements
NOTE 2. Summary of Significant Accounting Practices (Continued)
Recent Pronouncements (Continued)
- ---------------------------------
In June 2009, the Securities and Exchange Commission's Office of the Chief
Accountant and Division of Corporation Finance announced the release of Staff
Accounting Bulletin (SAB) No. 112. This staff accounting bulletin amends or
rescinds portions of the interpretive guidance included in the Staff
Accounting Bulletin Series in order to make the relevant interpretive
guidance consistent with current authoritative accounting and auditing
guidance and Securities and Exchange Commission rules and regulations.
Specifically, the staff is updating the Series in order to bring existing
guidance into conformity with recent pronouncements by the Financial
Accounting Standards Board, namely, Statement of Financial Accounting
Standards No. 141 (revised 2007), Business Combinations, and Statement of
Financial Accounting Standards No. 160, Non-controlling Interests in
Consolidated Financial Statements. The statements in staff accounting
bulletins are not rules or interpretations of the Commission, nor are they
published as bearing the Commission's official approval. They represent
interpretations and practices followed by the Division of Corporation Finance
and the Office of the Chief Accountant in administering the disclosure
requirements of the Federal securities laws.
In April 2009, the FASB issued FSP No. FAS 107-1 and APB 28-1, Interim
Disclosures about Fair Value of Financial Instruments. This FSP amends FASB
Statement No. 107, Disclosures about Fair Value of Financial Instruments, to
require disclosures about fair value of financial instruments for interim
reporting periods of publicly traded companies as well as in annual financial
statements. This FSP also amends APB Opinion No. 28, Interim Financial
Reporting, to require those disclosures in summarized financial information
at interim reporting periods. This FSP shall be effective for interim
reporting periods ending after June 15, 2009. The Company does not have any
fair value of financial instruments to disclose.
In April 2009, the FASB issued FSP No. FAS 115-2 and FAS 124-2, Recognition
and Presentation of Other-Than-Temporary Impairments. This FSP amends the
other-than-temporary impairment guidance in U.S. GAAP for debt securities to
make the guidance more operational and to improve the presentation and
disclosure of other-than-temporary impairments on debt and equity securities
in the financial statements. The FSP does not amend existing recognition and
measurement guidance related to other-than-temporary impairments of equity
securities. The FSP shall be effective for interim and annual reporting
periods ending after June 15, 2009. The Company currently does not have any
financial assets that are other-than-temporarily impaired.
10
Reshoot Production Company
(A Development Stage Company)
Notes to Financial Statements
NOTE 2. Summary of Significant Accounting Practices (Continued)
Recent Pronouncements (Continued)
- ---------------------------------
In April 2009, the FASB issued FSP No. FAS 141(R)-1, Accounting for Assets
Acquired and Liabilities Assumed in a Business Combination That arise from
Contingencies, to address some of the application issues under SFAS 141(R).
The FSP deals with the initial recognition and measurement of an asset
acquired or a liability assumed in a business combination that arises from a
contingency provided the asset or liability's fair value on the date of
acquisition can be determined. When the fair value can-not be determined, the
FSP requires using the guidance under SFAS No. 5, Accounting for
Contingencies, and FASB Interpretation (FIN) No. 14, Reasonable Estimation of
the Amount of a Loss. This FSP was effective for assets or liabilities
arising from contingencies in business combinations for which the acquisition
date is on or after January 1, 2009. The adoption of this FSP has not had a
material impact on our financial position, results of operations, or cash
flows during the six months ended June 30, 2009.
In April 2009, the FASB issued FSP No. FAS 157-4, "Determining Fair Value
When the Volume and Level of Activity for the Asset or Liability Have
Significantly Decreased and Identifying Transactions That Are Not Orderly"
("FSP FAS 157-4"). FSP FAS 157-4 provides guidance on estimating fair value
when market activity has decreased and on identifying transactions that are
not orderly. Additionally, entities are required to disclose in interim and
annual periods the inputs and valuation techniques used to measure fair
value. This FSP is effective for interim and annual periods ending after
June 15, 2009. The Company does not expect the adoption of FSP FAS 157-4
will have a material impact on its financial condition or results of
operation.
In December 2008, the FASB issued FSP No. FAS 140-4 and FIN 46(R)-8,
"Disclosures by Public Entities (Enterprises) about Transfers of Financial
Assets and Interests in Variable Interest Entities." This disclosure-only FSP
improves the transparency of transfers of financial assets and an
enterprise's involvement with variable interest entities, including
qualifying special-purpose entities. This FSP is effective for the first
reporting period (interim or annual) ending after December 15, 2008, with
earlier application encouraged. The Company adopted this FSP effective
January 1, 2009. The adoption of the FSP had no impact on the Company's
results of operations, financial condition or cash flows.
11
Reshoot Production Company
(A Development Stage Company)
Notes to Financial Statements
NOTE 2. Summary of Significant Accounting Practices (Continued)
Recent Pronouncements (Continued)
- ---------------------------------
In December 2008, the FASB issued FSP No. FAS 132(R)-1, "Employers'
Disclosures about Postretirement Benefit Plan Assets" ("FSP FAS 132(R)-1").
FSP FAS 132(R)-1 requires additional fair value disclosures about employers'
pension and postretirement benefit plan assets consistent with guidance
contained in SFAS 157. Specifically, employers will be required to disclose
information about how investment allocation decisions are made, the fair
value of each major category of plan assets and information about the inputs
and valuation techniques used to develop the fair value measurements of plan
assets. This FSP is effective for fiscal years ending after December 15,
2009. The Company does not expect the adoption of FSP FAS 132(R)-1 will have
a material impact on its financial condition or results of operation.
NOTE 3 - Going concern
The Company's financial statements are prepared using the generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company has not commenced its planned principal
operations and it has not generated any revenues. As of September 30, 2009,
the Company has realized a loss of $(12,650). In order to obtain the
necessary capital, the Company is seeking equity and/or debt financing.
There are no assurances that the Company will be successful, without
sufficient financing it would be unlikely for the Company to continue as a
going concern.
NOTE 4 - Stockholders' Equity
The Company is authorized to issue 70,000,000 shares of its $0.001 par value
common stock and 5,000,000 shares of its $0.001 par value preferred stock.
On August 17, 2009, the Company initiated a twelve-for-one (12:1) reverse
stock split of its issued and outstanding common stock. This reverse stock
split had no affect on the authorized number of common shares, nor did it
affect the par value of the stock. The financial statements contained herein
reflect the reverse stock split on a retroactive basis.
12
Reshoot Production Company
(A Development Stage Company)
Notes to Financial Statements
NOTE 4 - Stockholders' Equity (Continued)
Preferred Stock
- ---------------
No shares of the Company's preferred stock have been issued.
Common Stock
- ------------
On January 30, 2008, record shareholders of Reshoot & Edit common stock were
entitled to receive a special stock dividend of Reshoot Production Company, a
Nevada corporation, a wholly owned subsidiary of Reshoot & Edit. This spin
off allowed both companies to focus on their different business plans, with
different management and not compete in accessing funding in capital markets.
The Company filed its initial Registration Statement on Form SB-2 with the
U.S. Securities and Exchange Commission on January 7, 2008. The Registration
Statement was declared effective on January 30, 2008.
On January 30, 2008, the record shareholders received one (1) common share,
par value $0.001, of Reshoot Production Company common stock for every share
of Reshoot & Edit common stock owned. The Reshoot & Edit stock dividend was
based on 9,200,000 shares of Reshoot & Edit common stock that were issued and
outstanding as of the record date. Subsequently, 766,667 (post-split) shares
were issued to the shareholders of Reshoot Production Company.
There have been no issuances of common or preferred stock.
NOTE 5. Related Party Transactions
The Company does not lease or rent any property. Office services are
provided without charge by a director. Such costs are immaterial to the
financial statements and, accordingly, have not been reflected therein. The
officers and directors of the Company are involved in other business
activities and may, in the future, become involved in other business
opportunities. If a specific business opportunity becomes available, such
persons may face a conflict in selecting between the Company and their other
business interests. The Company has not formulated a policy for the
resolution of such conflicts.
13
Reshoot Production Company
(A Development Stage Company)
Notes to Financial Statements
NOTE 6. Provision for Income Taxes
The Company accounts for income taxes under Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" ("SFAS No. 109"), which
requires use of the liability method. SFAS No. 109 provides that deferred
tax assets and liabilities are recorded based on the differences between the
tax bases of assets and liabilities and their carrying amounts for financial
reporting purposes, referred to as temporary differences.
Deferred tax assets and liabilities at the end of each period are determined
using the currently enacted tax rates applied to taxable income in the
periods in which the deferred tax assets and liabilities are expected to be
settled or realized.
The provision for income taxes differs from the amount computed by applying
the statutory federal income tax rate to income before provision for income
taxes. The sources and tax effects of the differences are as follows:
U.S federal statutory rate (34.0%)
Valuation reserve 34.0%
------
Total -%
NOTE 7. Operating Leases and Other Commitments
The Company has no lease or other obligations.
NOTE 8. Concentrations of Risks
Cash Balances
- -------------
The Company maintains its cash in institutions insured by the Federal Deposit
Insurance Corporation (FDIC). This government corporation insured balances
up to $100,000 through October 13, 2008. As of October 14, 2008 all
non-interest bearing transaction deposit accounts at an FDIC-insured
institution, including all personal and business checking deposit accounts
that do not earn interest, are fully insured for the entire amount in the
deposit account. This unlimited insurance coverage is temporary and will
remain in effect for participating institutions until December 31, 2009.
All other deposit accounts at FDIC-insured institutions are insured up to at
least $250,000 per depositor until December 31, 2009. On January 1, 2010,
FDIC deposit insurance for all deposit accounts, except for certain
retirement accounts, will return to at least $100,000 per depositor.
Insurance coverage for certain retirement accounts, which include all IRA
deposit accounts, will remain at $250,000 per depositor.
14
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Item 2. - Management's Discussion and Analysis of Financial Condition and
Results of Operations
Forward-Looking Information
The Company may from time to time make written or oral "forward-looking
statements" including statements contained in this report and in other
communications by the Company, which are made in good faith by the Company
pursuant to the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995.
These forward-looking statements include statements of the Company's plans,
objectives, expectations, estimates and intentions, which are subject to
change based on various important factors (some of which are beyond the
Company's control). The following factors, in addition to others not listed,
could cause the Company's actual results to differ materially from those
expressed in forward looking statements: the strength of the domestic and
local economies in which the Company conducts operations, the impact of
current uncertainties in global economic conditions and the ongoing financial
crisis affecting the domestic and foreign banking system and financial
markets, including the impact on the Company's suppliers and customers,
changes in client needs and consumer spending habits, the impact of
competition and technological change on the Company, the Company's ability to
manage its growth effectively, including its ability to successfully
integrate any business which it might acquire, and currency fluctuations. All
forward-looking statements in this report are based upon information available
to the Company on the date of this report. The Company undertakes no
obligation to publicly update or revise any forward-looking statement, whether
as a result of new information, future events, or otherwise, except as
required by law.
Critical Accounting Policies
- ----------------------------
There have been no material changes to our critical accounting policies and
estimates from the information provided in Item 7, "Management's Discussion
and Analysis of Financial Condition and Results of Operations", included in
our Annual Report for the fiscal year ended December 31, 2008.
15
Results of Operations
- ---------------------
Overview of Current Operations
- ------------------------------
The Company was organized October 31, 2007 (Date of Inception) under the laws
of the State of Nevada, as Reshoot Production Company The Company was
incorporated as a subsidiary of Reshoot & Edit, a Nevada corporation.
Reshoot Production Company Business Plan
- ----------------------------------------
Management of the Company is in the process of identifying a movie production
opportunity for the Company. The Company plans to acquire the motion picture
rights, or an option on such rights, to a literary property. At this point,
management has yet to identify any opportunities, and there are no assurances
that anything will result from these discussions.
Motion Picture Industry Overview
- --------------------------------
The "major" studios dominate the motion picture industry in the United States
by controlling the distribution of films that they produce as well as films
that are produced by "independent" studios. These major studios include
among others: The Walt Disney Company; Sony Pictures Entertainment;
Paramount Pictures; Twentieth Century Fox Film Corporation; Universal
Studios; and Warner Bros. Entertainment.
Historically, the major studios financed, produced and distributed the vast
majority of American-made motion pictures. Today, much of the financing and
distribution of major motion pictures remains in the control of these major
studios. But as many of the major studios have become part of large
conglomerate business operations, or diversified their operations, they have
adopted a policy of producing only a relatively small number of films each
year. As demand for filmed entertainment has increased, many smaller,
independent film production companies have been successfully established to
fill the excess demand for motion pictures.
Management believes that two convergent trends in the production and
distribution of motion pictures have led to an opportunity for independent
films to be profitably exploited. This includes: 1) the increasing
commercial success of independent films; and 2) the increasing commercial
success of DVDs.
16
In the last decade, the distribution of independent films, films produced by
independent production companies outside of the major studios, brought
increasing commercial success to the major studios that were distributing
them. Management believes that increasing commercial success of independent
films that cater to specific audiences or specialized tastes is an indication
that consumer tastes have proven broader than what the major studios can
fulfill.
As the demand for a diversity of motion pictures has expanded, so too has
audience market with the commercial success of the DVD format. The popular
and inexpensive DVD format has expanded the audience market beyond
traditional theatrical distribution. The high production, marketing, and
distribution costs for films produced for theatrical distribution
economically require that theatrically distributed films have the broadest
possible audience appeal.
Costs for Independent Productions
- ---------------------------------
Generally, budgets for the independently financed features fall into the
$250,000 to $10 million range versus $50 to $150 million for the big budget
films. As with the movie industry in general, a substantial number of
independently financed feature films are not commercially successful for a
variety of reasons. The gross revenue potential for motion pictures which
have a more limited release without famous talent may be substantially less
than for motion pictures that have a broad theatrical release. The
distribution of a film generally takes two to three years to run through all
the markets in every territory, from theatrical to pay-per-view to home
video, and then airlines, hotels network, cable and syndicated television.
A film may be shown on numerous occasions at different times on various
television stations.
Distribution
- ------------
Once the Company produces a motion picture, the management of Reshoot
Production Company will employ its best efforts to sell film and all
ancillary rights in all available markets. Theatrical distribution and
marketing of motion pictures involves licensing the right to exhibit motion
pictures on a rental basis to theaters, the creation and dissemination of
advertising and publicity, accounting, billing, credit and collection, the
manufacture, inspection and dissemination of prints used in exhibition, and
the maintenance, delivery, storage, inspection and repair of such prints.
Generally, distributors and theatre exhibitors will enter into agreements
whereby the exhibitor retains a portion of the gross box office receipts,
which are the admissions paid at the box office. The balance is remitted to
the distributor. Frequently, exhibitors and distributors must negotiate as to
the appropriate percentage to be remitted to the distributor, which may delay
payment of the gross film rental to the distributor.
17
Television Rights
- -----------------
In the United States, broadcast rights are granted to networks such as NBC,
ABC, CBS, or Fox for exhibition by all of the network's affiliates.
Syndicated rights include rights granted to individual local television
stations or groups of stations. Pay television rights include rights granted
to cable, direct broadcast satellite, microwave and other services paid for by
subscribers. The right to license a motion picture to the television markets
may be granted to domestic or foreign theatrical distributors. Not all films
are suitable for network television exhibition due to subject matter, editing
requirements and other factors. With the increasing market role of pay
television, the number of films licensed for and fees generated from network
television have decreased significantly in the last few years. Pay television
revenues, in many cases, have more than made up for this decline, with
substantial license fees based either on a fixed fee or per- subscriber
basis. There is no assurance that separate licenses will be negotiated for
cable or free television, or if any such agreements will be obtained.
Other Distribution Rights
- -------------------------
A motion picture typically becomes available on home DVD for purchase or
rental by consumers approximately six months after its initial theatrical
release. In addition to the distribution media and markets described above,
the owner of a film usually licenses the right to non-theatrical uses to
distributors who in turn make the film available to airlines, hotels, schools,
oil rigs, public libraries, prisons, community groups, the armed forces, ships
at sea and others, as well as the right to license the performance of musical
works and sound recordings embodied in a motion picture, including public
performance and sheet music publication. Again, there are no assurances that
separate licenses will be negotiated with these other mediums.
Competition
- -----------
The motion picture industry is intensely competitive. In addition to
competing with the major film studios that dominate the motion picture
industry, we will also compete with numerous independent motion picture
production companies, television networks, and pay television systems.
Virtually all of our competitors are significantly larger than we are, have
been in business much longer than we have, and have significantly more
resources at their disposal.
The motion picture industry at times may create an oversupply of motion
pictures in the market. The number of motion pictures released by different
movie studies, particularly the major U.S. studios, may create an oversupply
of product in the market, reduce our potential share of box office receipts
and make it more difficult for our film to succeed commercially. Oversupply
may become most pronounced during peak release times, such as school holidays
and national holidays, when theatre attendance is expected to increase.
18
The limited supply of motion picture screens compounds this product
oversupply problem. Currently, a substantial majority of the motion picture
screens in the U.S. typically are committed at any one time to only 10 to 15
films distributed nationally by major studio distributors. In addition, as a
result of changes in the theatrical exhibition industry, including
reorganizations and consolidations and the fact that major studio releases
occupy more screens, the number of screens available to us when we want to
release a picture may decrease. If the number of motion picture screens
decreases, box office receipts, and the correlating future revenue streams,
such as from home video and pay and free television, of our motion pictures
may also decrease, which could have a material adverse effect on our
business, results of operations and financial condition.
Reshoot Production Company's Funding Requirements
- -------------------------------------------------
We do not have sufficient capital to produce a motion picture. Management
anticipates Reshoot Production Company will require at least $1,000,000 to
produce a screenplay. There is no assurance that we will have revenue in the
future or that we will be able to secure the necessary funding to develop our
business. Without additional funding, it is most likely that our business
model will fail, and we shall be forced to cease operations.
Future funding could result in potentially dilutive issuances of equity
securities, the incurrence of debt, contingent liabilities and/or
amortization expenses related to goodwill and other intangible assets, which
could materially adversely affect the Company's business, results of
operations and financial condition. Any future acquisitions of other
businesses, technologies, services or product(s) might require the Company to
obtain additional equity or debt financing, which might not be available on
terms favorable to the Company, or at all, and such financing, if available,
might be dilutive.
Results of Operations for the quarter ended September 30, 2009
- --------------------------------------------------------------
During the nine month period ended September 30, 2009, the Company did not
generate any revenues. In addition, the Company does not expect to generate
any profit for the next year.
In its most recent nine month operating period ended September 30, 2009, the
Company generated no revenues. During the three months ended September 30,
2009, the Company had expenses of $1,150 as compared to no expenses for the
same period last year. During the nine months ended September 30, 2009, the
Company had expenses of $5,225 as compared to expenses of $525 for the same
period last year. These expenses represented audit fees to keep the
Company full reporting and transfer agent fees. Since the Company's
inception, on October 31, 2007, the Company experienced a net lost $(12,650).
19
Revenues
- --------
The Company has generated no revenues since its inception. As of
September 30, 2009, the Company had an accumulated deficit of $(12,650)
dollars. There can be no assurances that the Company can achieve or sustain
profitability or that the Company's operating losses will not increase in the
future.
Plan of Operation
- -----------------
Management does not believe that the Company will be able to generate
any significant profit during the coming year, as the company seeks financing
to execute its business plan. Management believes developmental and marketing
costs will most likely exceed any anticipated revenues for the coming year.
Management intends to personally finance Reshoot Production Company, without
seeking reimbursement, to ensure that the Company has enough funds to operate
for the next twelve (12) months without the need to raise additional capital
to meet its fully reporting obligations in its normal course of business.
Funding Requirements
- --------------------
Reshoot Production Company does not have the required capital or funding to
execute its business plan. Reshoot Production Company will require at least
$1,000,000 to produce a motion picture. Management has been seeking funding,
but has been unable to raise the necessary capital in this economic climate.
Future funding could result in potentially dilutive issuances of equity
securities, the incurrence of debt, contingent liabilities and/or
amortization expenses related to goodwill and other intangible assets, which
could materially adversely affect the Company's business, results of
operations and financial condition. Any future acquisitions of other
businesses, technologies, services or product(s) might require the Company to
obtain additional equity or debt financing, which might not be available on
terms favorable to the Company, or at all, and such financing, if available,
might be dilutive.
Going Concern
- -------------
Our independent auditors included an explanatory paragraph in their report on
the accompanying financial statements regarding concerns about our ability to
continue as a going concern. Our financial statements contain additional
note disclosures describing the circumstances that lead to this disclosure by
our independent auditors.
20
Summary of any product research and development that we will perform for
the term of our plan of operation.
- ------------------------------------------------------------------------
We do not anticipate performing any additional significant product research
and development under our current plan of operation.
Expected purchase or sale of plant and significant equipment.
- -------------------------------------------------------------
We do not anticipate the purchase or sale of any plant or significant
equipment; as such items are not required by us at this time.
Significant changes in the number of employees.
- -----------------------------------------------
As of September 30, 2009, we did not have any employees. We are dependent upon
our sole officer and director for our future business development. As our
operations expand we anticipate the need to hire additional employees,
consultants and professionals; however, the exact number is not quantifiable
at this time.
Liquidity and Capital Resources
- -------------------------------
The Company is authorized to issue 70,000,000 shares of its $0.001 par value
common stock and 5,000,000 shares of its $0.001 par value preferred stock.
As of November 16, 2009, the Company has 766,667 shares of common stock
issued and outstanding.
The Company has limited financial resources available, which has had an
adverse impact on the Company's liquidity, activities and operations.
These limitations have adversely affected the Company's ability to obtain
certain projects and pursue additional business. Without realization of
additional capital, it would be unlikely for the Company to continue as a
going concern. In order for the Company to remain a Going Concern it will
need to find additional capital. Additional working capital may be sought
through additional debt or equity private placements, additional notes
payable to banks or related parties (officers, directors or stockholders),
or from other available funding sources at market rates of interest, or a
combination of these. The ability to raise necessary financing will depend
on many factors, including the nature and prospects of any business to be
acquired and the economic and market conditions prevailing at the time
financing is sought. No assurances can be given that any necessary financing
can be obtained on terms favorable to the Company, or at all.
Our sole officer/director has agreed to donate funds to the operations of the
Company, in order to keep it fully reporting for the next twelve (12) months,
without seeking reimbursement for funds donated.
21
As a result of our the Company's current limited available cash, no officer
or director received compensation through the nine months ended September 30,
2009. No officer or director received stock options or other non-cash
compensation since the Company's inception through September 30, 2009. The
Company has no employment agreements in place with its officers. Nor does the
Company owe its officers any accrued compensation, as the Officers agreed to
work for company at no cost, until the company can become profitable on a
consistent Quarter-to-Quarter basis.
Off-Balance Sheet Arrangements
- ------------------------------
We do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes
in financial condition, revenues or expenses, results or operations,
liquidity, capital expenditures or capital resources that is material to
investors.
Critical Accounting Policies and Estimates
- ------------------------------------------
Revenue Recognition: We recognize revenue from product sales once all of the
following criteria for revenue recognition have been met: pervasive evidence
that an agreement exists; the services have been rendered; the fee is fixed
and determinable and not subject to refund or adjustment; and collection of
the amount due is reasonable assured.
New Accounting Standards
- ------------------------
In December 2007, the FASB issued SFAS No. 160, "Non-controlling Interests in
Consolidated Financial Statements". This statement amends ARB 51 to establish
accounting and reporting standards for the non-controlling (minority) interest
in a subsidiary and for the de-consolidation of a subsidiary. It clarifies
that a non-controlling interest in a subsidiary is equity in the consolidated
financial statements. SFAS No. 160 is effective for fiscal years and interim
periods beginning after December 15, 2008. The adoption of SFAS 160 is not
expected to have a material impact on the Company's financial position,
results of operation or cash flows.
As of January 1, 2008 we adopted SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities" ("SFAS No. 159"). SFAS No. 159
allows the company to choose to measure many financial assets and financial
liabilities at fair value. Unrealized gains and losses on items for which the
fair value option has been elected are reported in earnings. The adoption of
SFAS 159 has not had a material impact on our financial position, results of
operation or cash flows.
As of January 1, 2008 we adopted SFAS No. 157, "Fair Value Measurements"
("SFAS No. 157"). SFAS No. 157 defines fair value and provides guidance for
measuring and disclosing fair value. The adoption of SFAS 157 has not had a
material impact on our financial position, results of operation or cash flows.
22
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
Not applicable.
Item 4T. Controls and Procedures
Evaluation of disclosure controls and procedures
- ------------------------------------------------
Management is responsible for establishing and maintaining adequate internal
control over financial reporting and for the assessment of the effectiveness
of those internal controls. As defined by the SEC, internal control over
financial reporting is a process designed by our principal executive
officer/principal financial officer, who is also the sole member of our Board
of Directors, to provide reasonable assurance regarding the reliability of
financial reporting and the reparation of the financial statements in
accordance with U. S. generally accepted accounting principles.
As of the end of the period covered by this report, we initially carried out
an evaluation, under the supervision and with the participation of our chief
executive officer (who is also our principal financial and accounting
officer), of the effectiveness of the design and operation of our disclosure
controls and procedures. Based on this evaluation, our chief executive
officer and chief financial officer initially concluded that our disclosure
controls and procedures were not effective.
Management's Report On Internal Control Over Financial Reporting
- ----------------------------------------------------------------
Our management is responsible for establishing and maintaining adequate
internal control over financial reporting. Internal control over financial
reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the
Securities Exchange Act of 1934 as a process designed by, or under the
supervision of, the company's principal executive and principal financial
officers and effected by the company's board of directors, management and
other personnel, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with accounting principles generally accepted in the
United States of America and includes those policies and procedures that:
- - Pertain to the maintenance of records that in reasonable detail accurately
and fairly reflect the transactions and dispositions of the assets of the
company;
- - Provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with accounting
principles generally accepted in the United States of America and that
receipts and expenditures of the company are being made only in accordance
with authorizations of management and directors of the company; and
- - Provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the company's assets that
could have a material effect on the financial statements.
23
Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Projections of any
evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate. All
internal control systems, no matter how well designed, have inherent
limitations. Therefore, even those systems determined to be effective can
provide only reasonable assurance with respect to financial statement
preparation and presentation. Because of the inherent limitations of internal
control, there is a risk that material misstatements may not be prevented or
detected on a timely basis by internal control over financial reporting.
However, these inherent limitations are known features of the financial
reporting process. Therefore, it is possible to design into the process
safeguards to reduce, though not eliminate, this risk.
As of September 30, 2009 management assessed the effectiveness of our internal
control over financial reporting based on the criteria for effective internal
control over financial reporting established in Internal Control--Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission ("COSO") and SEC guidance on conducting such assessments. Based on
that evaluation, they concluded that, during the period covered by this
report, such internal controls and procedures were not effective to detect
the inappropriate application of US GAAP rules as more fully described below.
This was due to deficiencies that existed in the design or operation of our
internal controls over financial reporting that adversely affected our
internal controls and that may be considered to be material weaknesses.
The matters involving internal controls and procedures that our management
considered to be material weaknesses under the standards of the Public Company
Accounting Oversight Board were: (1) lack of a functioning audit committee
due to a lack of a majority of independent members and a lack of a majority
of outside directors on our board of directors, resulting in ineffective
oversight in the establishment and monitoring of required internal controls
and procedures; (2) inadequate segregation of duties consistent with control
objectives; and (3) ineffective controls over period end financial disclosure
and reporting processes. The aforementioned material weaknesses were
identified by our Chief Executive Officer in connection with the review of our
financial statements as of September 30, 2009.
Management believes that the material weaknesses set forth in items (2) and
(3) above did not have an effect on our financial results. However,
management believes that the lack of a functioning audit committee and the
lack of a majority of outside directors on our board of directors results in
ineffective oversight in the establishment and monitoring of required internal
controls and procedures, which could result in a material misstatement in our
financial statements in future periods.
24
Management's Remediation Initiatives
- ------------------------------------
In an effort to remediate the identified material weaknesses and other
deficiencies and enhance our internal controls, we have initiated, or plan to
initiate, the following series of measures:
We will create a position to segregate duties consistent with control
objectives and will increase our personnel resources and technical accounting
expertise within the accounting function when funds are available to us.
And, we plan to appoint one or more outside directors to our board of
directors who shall be appointed to an audit committee resulting in a fully
functioning audit committee who will undertake the oversight in the
establishment and monitoring of required internal controls and procedures
such as reviewing and approving estimates and assumptions made by management
when funds are available to us.
Management believes that the appointment of one or more outside directors,
who shall be appointed to a fully functioning audit committee, will remedy
the lack of a functioning audit committee and a lack of a majority of outside
directors on our Board.
We anticipate that these initiatives will be at least partially, if not fully,
implemented by December 31, 2009. Additionally, we plan to test our updated
controls and remediate our deficiencies by December 31, 2009.
Changes in internal controls over financial reporting
- -----------------------------------------------------
There was no change in our internal controls over financial reporting that
occurred during the period covered by this report, that has materially
affected, or is reasonably likely to materially affect, our internal controls
over financial reporting.
25
PART II. OTHER INFORMATION
Item 1 -- Legal Proceedings
From time to time, we may become involved in various lawsuits and legal
proceedings, which arise in the ordinary course of business. However,
litigation is subject to inherent uncertainties, and an adverse result in
these or other matters may arise from time to time that may harm our
business.
We are not presently a party to any material litigation, nor to the knowledge
of management is any litigation threatened against us, which may materially
affect us.
Item 1A - Risk Factors
See Risk Factors set forth in Part I, Item 1A of the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 2008 and the discussion
in Item 1, above, under " Liquidity and Capital Resources."
Item 2 -- Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3 -- Defaults Upon Senior Securities
None.
Item 4 -- Submission of Matters to a Vote of Security Holders
On August 17, 2009, five major stockholders representing approximately 91% of
the Company's outstanding and issued capital stock gave written consent to
approve a twelve-for-one (12:1) reverse stock split for Reshoot Production
Company's the common stock. The reverse stock split took effect on September
15, 2009. Upon the reverse stock split, the stock trading symbol for Reshoot
Production on the OTC-BB changed from RSPD to RSPO.
Item 5 -- Other Information
None.
26
Item 6 -- Exhibits
Filed Period Filing
Exhibit Exhibit Description herewith Form ending Exhibit date
- -------------------------------------------------------------------------------
3.1 Articles of Incorporation, SB-2 3.1 01/07/2008
as currently in effect
- -------------------------------------------------------------------------------
3.2 Bylaws SB-2 3.2 01/07/2008
as currently in effect
- -------------------------------------------------------------------------------
10.1 Option Purchase Agreement SB-2 10.1 01/07/2008
dated Dec. 17, 2007 between
Reshoot Production Company and
Braverman Productions, Inc.
- -------------------------------------------------------------------------------
31.1 Certification of President X
and Principal Financial
Officer, pursuant to Section
302 of the Sarbanes-Oxley
Act
- -------------------------------------------------------------------------------
31.2 Certification of President X
and Principal Financial
Officer, pursuant to Section
906 of the Sarbanes-Oxley
Act
- -------------------------------------------------------------------------------
27
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Reshoot Production Company
--------------------------
Registrant
Date: November 16, 2009 By: /s/ Ed DeStefano
----------------- -------------------------------------------
Ed DeStefano
Title: President, Chief Executive
Officer, Chief Financial Officer,
Secretary and Director (Principal
Executive, Financial, and Accounting
Officer)
28