U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarter ended August 31, 1999
Commission file no. 0-26475
ORANGE PRODUCTIONS, INC.
------------------------------------------------------------
(Name of Small Business Issuer in its Charter)
Florida 65-0790763
- ------------------------------------ -----------------------
(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification No.)
222 Lakeview Avenue, Suite 113 33401
- ------------------------------------- -----------------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (404) 321-1192
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange
on which registered
None None
- ----------------------------------- -----------------------------
Securities to be registered under Section 12(g) of the Act:
Common Stock, $.0001 par value per share
--------------------------------------------------------
(Title of class)
Copies of Communications Sent to:
Donald F. Mintmire
Mintmire & Associates
265 Sunrise Avenue, Suite 204
Palm Beach, FL 33480
Tel: (561) 832-5696 - Fax: (561) 659-5371
<PAGE>
Indicate by 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
--- ---
As of August 31, 1999, there are 2,054,000 shares of voting stock of
the registrant issued and outstanding.
<PAGE>
PART I
Item 1. Financial Statements
INDEX TO FINANCIAL STATEMENTS
Balance Sheets..........................................................F-2
Statements of Operations................................................F-3
Statements of Changes in Stockholders' Equity...........................F-4
Statements of Cash Flows................................................F-5
Notes to Financial Statements...........................................F-6
<PAGE>
<TABLE>
<CAPTION>
Orange Productions, Inc.
(A Development Stage Enterprise)
Balance Sheets
August 31, 1999
(Unaudited) February 28, 1999
-------------------- --------------------
ASSETS
<S> <C> <C>
CURRENT ASSETS
Cash $ 14,095 $ 9,993
Loan and accrued interest receivable 0 10,184
-------------------- --------------------
Total current assets 14,095 20,177
-------------------- --------------------
Total Assets $ 14,095 $ 20,177
==================== ====================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accrued expenses $ 0 $ 4,500
Accrued expenses - related party 4,000 4,000
-------------------- --------------------
Total current liabilities 4,000 8,500
-------------------- --------------------
Total Liabilities 4,000 8,500
-------------------- --------------------
STOCKHOLDERS' EQUITY
Preferred stock, $0.0001 par value, authorized 10,000,000
shares: none issued 0 0
Common stock, $0.0001 par value, authorized 50,000,000
shares: 2,054,000 issued and outstanding 206 206
Additional paid-in capital 20,134 20,134
Deficit accumulated during the development stage (10,245) (8,663)
-------------------- --------------------
Total Stockholders' Equity 10,095 11,677
-------------------- --------------------
Total Liabilities and Stockholders' Equity $ 14,095 $ 20,177
==================== ====================
</TABLE>
The accompanying notes are an integral part of the
financial statements.
F-2
<PAGE>
<TABLE>
<CAPTION>
Orange Productions, Inc.
(A Development Stage Enterprise)
Statements of Operations
(Unaudited)
For the Six Months From May 20, 1998 From May 20, 1998
Ended (Inception) Through (Inception) Through
August 31, 1999 August 31, 1998 August 31, 1999
---------------------- ---------------------- -------------------------
<S> <C> <C> <C>
Revenues $ 0 $ 0 $ 0
---------------------- ---------------------- -------------------------
Expenses
Bank charges 0 15 15
Consulting fees - related party 0 0 1,165
Organization expenses 384 92 551
Professional fees 1,265 0 5,765
Professional fees - related party 0 0 3,000
---------------------- ---------------------- -------------------------
Total expenses 1,649 107 10,496
---------------------- ---------------------- -------------------------
Loss from operations (1,649) (107) (10,496)
Other income (expense)
Interest income 67 0 251
---------------------- ---------------------- -------------------------
Net loss $ (1,582)$ (107)$ (10,245)
====================== ====================== =========================
Net loss per weighted average share, basic $ (.001)$ (.000)$ (.005)
====================== ====================== =========================
Weighted average number of shares 2,054,000 1,701,762 1,970,606
====================== ====================== =========================
</TABLE>
The accompanying notes are an integral part of the
financial statements.
F-3
<PAGE>
<TABLE>
<CAPTION>
Orange Productions, Inc.
(A Development Stage Enterprise)
Statements of Changes in Stockholders' Equity
Deficit
Accumulated
Additional During the Total
Number of Common Paid-in Development Stockholders'
Shares Stock Capital Stage Equity
------------- ----------- ------------ --------------- -----------------
<S> <C> <C> <C> <C> <C>
BEGINNING BALANCE, May 20, 1998 (Inception) 0 $ 0 $ 0 $ 0 $ 0
May 1998 - services ($0.0001/sh) 1,650,500 165 0 0 165
May 1998 - cash ($0.05/sh) 4,000 1 199 0 200
June 1998 - cash ($0.05/sh) 56,000 6 2,794 0 2,800
September 1998 - cash ($0.05/sh) 343,500 34 17,141 0 17,175
Net loss 0 0 0 (8,663) (8,663)
------------- ----------- ------------ --------------- -----------------
BALANCE, February 28, 1999 2,054,000 $ 206 $ 20,134 $ (8,663)$ 11,677
------------- ----------- ------------ --------------- -----------------
Net loss 0 0 0 (1,582) (1,582)
------------- ----------- ------------ --------------- -----------------
BALANCE, August 31, 1999 (Unaudited) 2,054,000 $ 206 $ 20,134 $ (10,245)$ 10,095
============= =========== ============ =============== =================
</TABLE>
The accompanying notes are an integral part of the
financial statements.
F-4
<PAGE>
<TABLE>
<CAPTION>
Orange Productions, Inc.
(A Development Stage Enterprise)
Statements of Cash Flows
(Unaudited)
For the Six Months From May 20, 1998 From May 20, 1998
Ended (Inception) Through (Inception) Through
August 31, 1999 August 31, 1998 August 31, 1999
---------------------- --------------------- ----------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C> <C>
Net loss $ (1,582)$ (107)$ (10,245)
Adjustments to reconcile net loss to net cash used by
development activities:
Stock issued in lieu of cash - related party 0 165 165
Changes in assets and liabilities:
Increase (decrease) in accrued interest receivable 184 0 0
Increase in accrued expenses (4,500) 0 0
Increase in accrued expenses - related party 0 0 4,000
---------------------- --------------------- ----------------------
Net cash provided (used) by operating activities (5,898) 58 (6,080)
---------------------- --------------------- ----------------------
CASH FLOW FROM INVESTING ACTIVITIES:
Increase in issuance of loan receivable 0 0 (10,000)
Proceeds from repayment of loan receivable 10,000 0 10,000
---------------------- --------------------- ----------------------
Net cash provided by investing activities 10,000 0 0
---------------------- --------------------- ----------------------
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 0 3,000 20,175
---------------------- --------------------- ----------------------
Net cash provided by financing activities 0 3,000 20,175
---------------------- --------------------- ----------------------
Net increase in cash 4,102 3,058 14,095
CASH, beginning of period 9,993 0 0
---------------------- --------------------- ----------------------
CASH, end of period $ 14,095 $ 3,058 $ 14,095
====================== ===================== ======================
</TABLE>
The accompanying notes are an integral part of the
financial statements.
F-5
<PAGE>
Orange Productions, Inc.
(A Development Stage Enterprise)
Notes to Financial Statements
(Information with respect to the six months ended August 31, 1999 is unaudited)
(1) Summary of Significant Accounting Principles
TheCompany Orange Productions, Inc. is a Florida chartered development
stage corporation which conducts business from its headquarters in Palm
Beach, Florida. The Company was incorporated on May 20, 1998, and has
elected February 28 as its fiscal year end.
The Company has not yet engaged in its expected operations. The
Company's future operations will be to provide graphic art services to
various consumer groups. Current activities include raising additional
equity and negotiating with potential key personnel and facilities.
There is no assurance that any benefit will result from such
activities. The Company will not receive any operating revenues until
the commencement of operations, but will nevertheless continue to incur
expenses until then.
The financial statements have been prepared in conformity with
generally accepted accounting principles. The financial statements for
the six months ended August 31, 1999 and the period from May 20, 1998
(Inception) through August 31, 1998 include all adjustments which in
the opinion of management are necessary for fair presentation. In
preparing the financial statements, management is required to make
estimates and assumptions that affect the reported amounts of assets
and liabilities as of the date of the statements of financial condition
and revenues and expenses for the period then ended. Actual results may
differ significantly from those estimates.
The following summarize the more significant accounting and reporting
policies and practices of the Company:
a) Start-up costs Costs of start-up activities, including organization
costs, are expensed as incurred, in accordance with Statement of
Position (SOP) 98-5.
b) Net loss per share Basic net loss per weighted average share is
computed by dividing the net loss by the weighted average number of
common shares outstanding during the period.
(2) Loan Receivable The Company authorized a loan in the amount of $10,000
at the rate of 7% per year, payable on demand. Interest of $184 was
accrued at February 28, 1999. The loan principal and accrued interest
were paid in full during March 1999.
(3) Stockholders' Equity The Company has authorized 50,000,000 shares of
$0.0001 par value common stock and 10,000,000 shares of $0.0001 par
value preferred stock. On May 20, 1998, the Company issued 1,650,500
restricted, under Rule 144, founders shares to its Officers and
Directors for the value of services rendered in connection with the
organization of the Company. In May, 1998, the Company issued 4,000
shares at $0.05 per share for $200 in cash. In June 1998, the Company
issued 56,000 shares of common stock at $0.05 per share for $2,800 in
cash. In September 1998, the Company issued 343,500 shares at $0.05 per
share for $17,175 in cash.
(4) Income Taxes Deferred income taxes (benefits) are provided for certain
income and expenses which are recognized in different periods for tax
and financial reporting purposes. The Company has net operating loss
carry-forwards for income tax purposes of approximately $10,245, with
$8,663 expiring in 2019 and $1,582 in 2020.
The amount recorded as deferred tax assets as of August 31, 1999 is
$2,016, which represents the amount of tax benefit of the loss
carryforward. The Company has established a 100% valuation allowance
against this deferred tax asset, as the Company has no history of
profitable operations.
F-6
<PAGE>
Orange Productions, Inc.
(A Development Stage Enterprise)
Notes to Financial Statements
(5) Going Concern As shown in the accompanying financial statements, the
Company incurred a net loss of $10,245 for the period from May 20, 1998
(Inception) through August 31, 1999. The ability of the Company to
continue as a going concern is dependent upon commencing operations and
obtaining additional capital and financing. The financial statements do
not include any adjustments that might be necessary if the Company is
unable to continue as a going concern. The Company is currently seeking
financing to allow it to begin its planned operations.
(6) Related Parties
Counsel to the Company indirectly owns 114,500 shares of the Company
through the 100% sole ownership of the common stock of another company
that has invested in the Company. The Company's President, Secretary,
Treasurer and Director directly owns an 80.36% interest in the Company,
consisting of 1,650,500 shares
As of August 31, 1999 and February 28, 1999, the Company owed legal
counsel for services performed during the year in the amount of $3,000,
and owed the former Vice President and former Director of the Company
$1,000 for consulting services rendered. These amounts are presented in
Accrued expenses - related party.
F-7
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation
General
Since its inception, the Company has conducted minimal business operations
except for organizational and capital raising activities. The Company has not
realized significant revenues since its inception due to the fact that it has
generally has been inactive, having conducted no business operations except
organizational and fund raising activities since its inception. As a result,
from inception (May 20, 1998) through August 31, 1999, the Company had interest
income of $251.00 from a loan to a related party. Cumulative operating expenses
as of August 31, 1999 were $10,496.00. The Company proposes to engage in the
business of providing graphic arts services to various consumer groups.
Mr. Peroulas decided to pursue the graphic arts services business via the
Company because of the belief that his formal training, will enable him to
develop a successful company which will have the advantages of, among other
things, greater availability of capital and potential for growth through the
vehicle of a public company as compared to a privately-held company. The time
required to be devoted to manage the day-to-day affairs of the Company is
presently estimated to be approximately five to ten hours per week. This time
commitment on the part of these individuals is expected to increase at such
time, if ever, as the Company obtains sufficient funding with which to commence
the search for business to finance/fund.
The Company will be dependent upon Mr. Peroulas to develop the client base
with whom to arrange funding. Mr. Peroulas has extensive experience in the
business and has managed his own business for the last two (2) years. While Mr.
Peroulas has been successful in the past, there can be no assurance that he will
be successful in building the client base necessary for the successful operation
of the Company.
Plan of Operation
If the Company is unable to generate sufficient revenue from operations to
implement its expansion plans, management intends to explore all available
alternatives for debt and/or equity financing, including but not limited to
private and public securities offerings.
Mr. Sam Peroulas, at least initially, will be solely responsible for
developing OPI's graphic arts services to various consumer groups. However, at
such time, if ever, as sufficient operating capital becomes available, Mr.
Peoulas expects to employ additional staffing and marketing personnel. In
addition, the Company expects to continuously engage in market research in order
to monitor new market trends, seasonality factors and other critical information
deemed relevant to OPI's business.
The Company intends to initially prospect graphic arts services to
consumers in the Atlanta, Georgia area, then enlarging to the entire State of
Georgia and thereafter in selected areas nationwide. The Company plans to be
able to provide a full spectrum of services for its clients.
In its initial phase, the Company will operate out of the facility provided
by Mr. Peroulas. Mr. Peroulas will begin by finding clients for the Company. In
the event the Company requiresadditional capital during this phase, Mr. Peroulas
4
<PAGE>
has committed to fund the operation until such time as additional capital is
available.
Due to the limited capital available to the Company, the principal risks
during this phase are that the Company is dependent upon Mr. Peroulas' efforts,
that Mr. Peroulas lacks experience and that the Company will not be able to
establish a sufficiently profitable client base to establish the business.
For the period from May 20, 1998 through August 31, 1999, the Company had a
cumulative loss from operations aggregating $10,245.00.
Financial Condition, Capital Resources and Liquidity
At August 31, 1999, the Company had assets totaling $14,095.00 and
liabilities of $4,000.00 attributable to accrued expenses. During May, June &
September, 1998, the Company issued and sold an aggregate of 403,500 shares of
Common Stock to Georgia and Florida residents for cash consideration totaling
$20,175. No underwriter was employed in connection with the offering and sale of
the shares. The Company claimed the exemption from registration in connection
with each of the offerings provided under Section 3(b) of the Act and Rule 504
of Regulation D promulgated thereunder, Section 10-5-9(13) of the Georgia Code
and Section 517.061(11) of the Florida Code.
The Company has no potential capital resources from any outside sources at
the current time. It is anticipated that the Company will require only nominal
capital to maintain the corporate viability of the Company. Any additional
capital needed will most likely be provided by the Company's existing
shareholders or its officers and directors.
The ability of the Company to continue as a going concern is dependent upon
the availability of obtaining additional capital and financing from such
shareholders and directors.
Net Operating Losses
The Company has net operating loss carryforwards of $10,245.00 which expire
in the years 2019 and 2020. Until the Company's current operations begin to
produce earnings, it is unclear whether the Company can utilize such
carryforwards.
Year 2000 Compliance
The Company is currently in the process of evaluating its information
technology for Year 2000 compliance. The Company does not expect that the cost
to modify its information technology infrastructure to be Year 2000 compliant
will be material to its financial condition or results of operations. The
Company does not anticipate any material disruption in its operations as a
result of any failure by the Company to be in compliance.
Forward-Looking Statements
This Form 10-QSB includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements, other than
5
<PAGE>
statements of historical facts, included or incorporated by reference in this
Form 10-QSB which address activities, events or developments which the Company
expects or anticipates will or may occur in the future, including such things as
future capital expenditures (including the amount and nature thereof), finding
suitable merger or acquisition candidates, expansion and growth of the Company's
business and operations, and other such matters are forward-looking statements.
These statements are based on certain assumptions and analyses made by the
Company in light of its experience and its perception of historical trends,
current conditions and expected future developments as well as other factors it
believes are appropriate in the circumstances. However, whether actual results
or developments will conform with the Company's expectations and predictions is
subject to a number of risks and uncertainties, general economic market and
business conditions; the business opportunities (or lack thereof) that may be
presented to and pursued by the Company; changes in laws or regulation; and
other factors, most of which are beyond the control of the Company.
Consequently, all of the forward-looking statements made in this Form 10-QSB are
qualified by these cautionary statements and there can be no assurance that the
actual results or developments anticipated by the Company will be realized or,
even if substantially realized, that they will have the expected consequence to
or effects on the Company or its business or operations. The Company assumes no
obligations to update any such forward-looking statements.
PART II
Item 1. Legal Proceedings.
The Company knows of no legal proceedings to which it is a party or to
which any of its property is the subject which are pending, threatened or
contemplated or any unsatisfied judgments against the Company.
Item 2. Changes in Securities and Use of Proceeds
None
Item 3. Defaults in Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted during the quarter ending August 31, 1999, covered
by this report to a vote of the Company's shareholders, through the solicitation
of proxies or otherwise.
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
6
<PAGE>
(a) The exhibits required to be filed herewith by Item 601 of Regulation
S-B, as described in the following index of exhibits, are incorporated
herein by reference, as follows:
Exhibit No. Description
- ----------------------------------------------------------------------
3(i).1 Articles of Incorporation of OPI effective May 20, 1998
3(ii).1 Bylaws of OPI
27.1 * Financial Data Schedule
- ----------------
(1) Incorporated herein by reference to the Company's Registration Statement on
Form 10-SB.
* Filed herewith
(b) No Reports on Form 8-K were filed during the quarter ended August 31,
1999.
SIGNATURES
----------
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ORANGE PRODUCTIONS, INC..
(Registrant)
Date: August 15, 1999 By: /s/ Sam Peroulas
--------------------------
Sam Peroulas, President, Secretary,
Chief Executive Officer & Director
[sign page ORANGE PRODUCTIONS, INC. 10Q 8.31.99]
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001065803
<NAME> ORANGE PRODUCTIONS, INC.
<MULTIPLIER> 1
<CURRENCY> U.S. Currency
<S> <C>
<PERIOD-TYPE> 6-mos
<FISCAL-YEAR-END> Feb-28-1999
<PERIOD-START> Mar-01-1999
<PERIOD-END> Aug-31-1999
<EXCHANGE-RATE> 1
<CASH> 14,095
<SECURITIES> 0
<RECEIVABLES> 184
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 14,095
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 14,095
<CURRENT-LIABILITIES> 4,000
<BONDS> 0
0
0
<COMMON> 206
<OTHER-SE> 10,095
<TOTAL-LIABILITY-AND-EQUITY> 14,095
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,649
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,582)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,582)
<EPS-BASIC> (.001)
<EPS-DILUTED> 0
</TABLE>
