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 November 30, 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
November 30, 1999 February 28, 1999
-------------------- --------------------
(unaudited)
ASSETS
<S> <C> <C>
CURRENT ASSETS
Cash $ 12,368 $ 9,993
Loan and accrued interest receivable 0 10,184
-------------------- --------------------
Total current assets 12,368 20,177
-------------------- --------------------
Total Assets $ 12,368 $ 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 (11,972) (8,663)
-------------------- --------------------
Total Stockholders' Equity 8,368 11,677
-------------------- --------------------
Total Liabilities and Stockholders' Equity $ 12,368 $ 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 Nine Months From May 20, 1998 From May 20, 1998
Ended (Inception) Through (Inception) Through
November 30, 1999 November 30, 1998 November 30, 1999
---------------------- ---------------------- -------------------------
<S> <C> <C> <C>
Revenues $ 0 $ 0 $ 0
---------------------- ---------------------- -------------------------
Expenses
General and administrative expenses 459 182 641
Consulting fees - related party 0 0 1,165
Professional fees 2,918 0 7,418
Professional fees - related party 0 0 3,000
---------------------- ---------------------- -------------------------
Total expense (3,377) (182) (12,224)
---------------------- ---------------------- -------------------------
Loss from operations (3,377) (182) (12,224)
Other income (expense)
Interest income 67 12 251
---------------------- ---------------------- -------------------------
Net loss $ (3,310)$ (170)$ (11,973)
====================== ====================== =========================
Net loss per weighted average share, basic $ (.00) $ (.00) (.00)
====================== ====================== =========================
Weighted average number of shares 2,054,000 1,852,822 1,984,182
====================== ====================== =========================
</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 (3,309) (3,309)
------------- ----------- ------------ --------------- -----------------
BALANCE, November 30, 1999 (Unaudited) 2,054,000 $ 206 $ 20,134 $ (11,972)$ 8,368
============= =========== ============ =============== =================
</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 Nine Months From May 20, 1998 From May 20, 1998
Ended (Inception) Through (Inception) Through
November 30, 1999 November 30, 1998 November, 1999
---------------------- --------------------- ----------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C> <C>
Net loss $ (3,309)$ (8,663)$ (11,972)
Adjustments to reconcile net loss to net cash used by
operating activities:
Stock issued in lieu of cash - related party 0 165 165
Changes in assets and liabilities:
Increase (decrease) in accrued interest receivable 184 (184) 0
Increase in accrued expenses (4,500) 4,500 0
Increase in accrued expenses - related party 0 4,000 4,000
---------------------- --------------------- ----------------------
Net cash provided (used) by operating activities (7,625) (182) (7,807)
---------------------- --------------------- ----------------------
CASH FLOW FROM INVESTING ACTIVITIES:
Increase in issuance of loan receivable 0 (10,000) (10,000)
Proceeds from repayment of loan receivable 10,000 0 10,000
---------------------- --------------------- ----------------------
Net cash provided by investing activities 10,000 (10,000) 0
---------------------- --------------------- ----------------------
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 0 20,175 20,175
---------------------- --------------------- ----------------------
Net cash provided by financing activities 0 20,175 20,175
---------------------- --------------------- ----------------------
Net increase in cash 2,375 9,993 12,368
CASH, beginning of period 9,993 0 0
---------------------- --------------------- ----------------------
CASH, end of period $ 12,368 $ 9,993 $ 12,368
====================== ===================== ======================
</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 nine months
ended November 30, 1999 is unaudited)
(1) Summary of Significant Accounting Principles
The Company 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 nine months ended November 30, 1999 and the period from May 20,
1998 (Inception) through November 30, 1998 include all adjustments
which in the opinion of management are necessary for fair presentation,
and such adjustments are of a normal and recurring nature. 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. Rights and privileges of the preferred stock are
to be determined by the Board of Directors prior to issuance. 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 $11,972, with
$8,663 expiring in 2019 and $3,309 in 2020.
The amount recorded as deferred tax assets as of November 30, 1999 is
approximately $2,300, 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 November 30, 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 November 30, 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 November 30, 1999, the Company had
interest income of $251.00 from a loan to a related party. Cumulative operating
expenses as of November 30, 1999 were $12,224. 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.
4
<PAGE>
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 requires additional capital during this phase,
Mr. Peroulas 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 November 30, 1999, the Company
had a cumulative loss from operations aggregating $11,973.
Financial Condition, Capital Resources and Liquidity
At November 30, 1999, the Company had assets totaling $12,368 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 $11,972, with
$8,663 expiring in 2019 and $3,309 expiring in 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 Year 2000 issue is the result of potential problems with computer
systems or any equipment with computer chips that use dates where the date has
been stored as just two digits (e.g. 98 for 1998). On January 1, 2000, any clock
or date recording mechanism including date sensitive software which uses only
two digits to represent the year, may recognize the date using 00 as the year
1900 rather than the year 2000. This could result in a system failure or
miscalculations causing disruption of operations, including among other things,
a temporary inability to process transactions, send invoices, or engage in
similar activities.
5
<PAGE>
The Company did not experience a materially negative impact during the
Year 2000 date switch-over and it has determined that there will be minimal
impact if any to its business, operations or financial condition since all of
the internal software to be developed and utilized by the Company will be and
has been upgraded to support Year 2000 versions.
There can be no assurance, however, that the systems of other companies
on which the Company's systems may have to rely also will be timely converted or
that any such failure to convert by another company would not have an adverse
affect on the Company's systems. Currently the Company does not rely on other
systems that might have an adverse affect on any Company systems and does not
anticipate any such reliance in the near future.
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 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
6
<PAGE>
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 November 30, 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
(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 November 30,
1999.
7
<PAGE>
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: January 14, 2000 By: /s/ Sam Peroulas
--------------------------
Sam Peroulas, President, Secretary,
Chief Executive Officer & Director
8
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001065803
<NAME> ORANGE PRODUCTIONS, INC.
<MULTIPLIER> 1
<CURRENCY> U.S. Currency
<S> <C>
<PERIOD-TYPE> 9-mos
<FISCAL-YEAR-END> Feb-28-1999
<PERIOD-START> Mar-01-1999
<PERIOD-END> Nov-30-1999
<EXCHANGE-RATE> 1
<CASH> 12,368
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 12,368
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 12,368
<CURRENT-LIABILITIES> 4,000
<BONDS> 0
0
0
<COMMON> 206
<OTHER-SE> 8,368
<TOTAL-LIABILITY-AND-EQUITY> 12,368
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> (3,377)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,377)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,377)
<EPS-BASIC> (.00)
<EPS-DILUTED> 0
</TABLE>
