10QSB 1 doc1.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2005 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission file # 333-106291 AMP Productions, Ltd. (Exact Name of Registrant as Specified in its Charter) Nevada 98-0400189 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification number) 500-666 Burrard Street, Vancouver, British Columbia V6C 2X8 (Address of principal executive offices) (Zip Code) Issuer's telephone number: (604) 639-3178 Securities registered under Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.0001 par value 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 Issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ x ] No [ ] Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of Issuer's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. [ ] As of June 30, 2005, the Issuer had 9,750,000 shares of its Common Stock outstanding. Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X] PART I -- FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS
AMP PRODUCTIONS, LTD. (A development stage company) Balance Sheet June 30, 2005 (Unaudited - Prepared by Management) (EXPRESSED IN U.S. DOLLARS) ---------------------------------------------------------------------------------------------------------- June 30, 2005 March 31, 2005 ASSETS CURRENT Cash $ 107,313 $ 113,049 Prepaid expenses 4,196 3,070 ---------------------------------------------------------------------------------------------------------- TOTAL CURRENT ASSETS 111,509 116,119 ---------------------------------------------------------------------------------------------------------- EQUIPMENT, net 3,611 4,046 ---------------------------------------------------------------------------------------------------------- TOTAL ASSETS $ 115,120 $ 120,165 ========================================================================================================== LIABILITIES AND STOCKHOLDERS' DEFICIENCY LIABILITIES CURRENT Accounts payable and accrued liabilities $ 1,514 $ 980 Due to related parties (Note 4) 1,000 2,000 Promissory note and accrued interest (Note 3) - - ---------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES 2,514 2,980 ---------------------------------------------------------------------------------------------------------- COMMITMENTS AND CONTINGENCIES (NOTE 4) STOCKHOLDERS' EQUITY (DEFICIENCY) SHARE CAPITAL Authorized: 100,000,000 common shares with a par value of $0.0001 per share Issued and outstanding: 9,750,000 common shares 975 975 (March 31, 2005 - 9,750,000) ADDITIONAL PAID-IN CAPITAL 166,825 166,825 (DEFICIT) ACCUMULATED DURING THE DEVELOPMENT STAGE (55,194) (50,615) ---------------------------------------------------------------------------------------------------------- TOTAL STOCKHOLDERS' EQUITY (DEFICIENCY) 112,606 117,185 ---------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 115,120 $ 120,165 ========================================================================================================== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
AMP PRODUCTIONS, LTD. (A development stage company) Statement of Stockholders' Deficiency For the period from February 27, 2003 (inception) to June 30, 2005 (Unaudited - Prepared by Management) (EXPRESSED IN U.S. DOLLARS) --------------------------------------------------------------------------------------------------------------- Deficit accumulated during Total Common stock Additional development stockholders' Shares Amount paid-in capital stage deficiency --------------------------------------------------------------------------------------------------------------- Issuance of common stock for cash March 3, 2003, $0.0001 per share 8,000,000 $ 800 $ - $ - $ 800 Screenplays transferred from a shareholder - - (5,000) - (5,000) Loss and comprehensive loss for the period - - - (8,216) (8,216) --------------------------------------------------------------------------------------------------------------- Balance, March 31, 2003 8,000,000 $ 800 $ (5,000) $ (8,216) $ (12,416) --------------------------------------------------------------------------------------------------------------- Issuance of common stock for cash March 19, 2004, $0.0001 per share 98,000 10 9,790 - 9,800 Loss and comprehensive loss for the period - - - (15,053) (15,053) --------------------------------------------------------------------------------------------------------------- Balance, March 31, 2004 8,098,000 $ 810 $ 4,790 $ (23,269) $ (17,669) --------------------------------------------------------------------------------------------------------------- Issuance of common stock for cash February 11, 2005 - March 31, 2005, 0.10 per share, net of share issuance cost of $3,000 1,652,000 $ 165 $ 162,035 $ - $ 162,200 Loss and comprehensive loss for the period - - - (4,335) (4,335) --------------------------------------------------------------------------------------------------------------- Balance, March 31, 2005 9,750,000 $ 975 166,825 (50,615) 117,185 --------------------------------------------------------------------------------------------------------------- Loss and comprehensive loss for the period - - - (4,579) (4,579) --------------------------------------------------------------------------------------------------------------- Balance, June 30, 2005 9,750,000 $ 975 166,825 (55,194) 112,606 =============================================================================================================== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
AMP PRODUCTIONS, LTD. (A development stage company) Statement of Operations (Unaudited - Prepared by Management) (EXPRESSED IN U.S. DOLLARS) ----------------------------------------------------------------------------------- Cumulative February 27 2003 Three Months Three Months (inception) to Ended Ended June 30 June 30 June 30 2005 2005 2004 ----------------------------------------------------------------------------------- GENERAL AND ADMINISTRATIVE EXPENSES Accounting $ 9,523 $ - $ (1,127) Amortization 1,610 435 - Bank charges 1,300 64 105 Consulting 6,850 923 - Interest on promissory note 87 - 166 Legal 9,036 - - Listing and filing fees 7,794 160 550 Office 2,624 609 5,104 Printing 1,014 14 - Rent 14,184 537 - Transfer expense - - 801 Travel 2,918 1,837 - ----------------------------------------------------------------------------------- OPERATING (LOSS) (56,940) (4,579) (5,599) ----------------------------------------------------------------------------------- OTHER INCOME Foreign exchange gain 1,746 - 1,264 ----------------------------------------------------------------------------------- NET LOSS FOR THE PERIOD $ (55,194) $ (4,579) $ (4,335) BASIC AND DILUTED LOSS PER SHARE $ (0.00) $ (0.00) =================================================================================== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - basic and diluted 8,748,427 8,050,843 =================================================================================== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
AMP PRODUCTIONS, LTD. (A development stage company) Statement of Cash Flows (Unaudited - Prepared by Management) (EXPRESSED IN U.S. DOLLARS) ----------------------------------------------------------------------------------------------- Cumulative February 27 2003 Three Months Three Months (inception) to Ended Ended June 30 June 30 June 30 2005 2005 2004 ----------------------------------------------------------------------------------------------- CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES Loss for the period $ (55,199) $ (4,579) $ (4,335) Adjust for items not involving cash: - amortization 1,610 435 - CHANGES IN OTHER ASSETS AND LIABILITIES: - increase in prepaid expenses (4,196) (1,126) - - increase (decrease) in accounts payable and accrued liabilities 1,519 534 (7,984) - decrease in due to a related party (4,000) (1,000) (1,650) ----------------------------------------------------------------------------------------------- NET CASH USED IN OPERATING ACTIVITIES (60,266) (5,736) (12,319) ----------------------------------------------------------------------------------------------- CASH FLOWS USED IN INVESTING ACTIVITIES purchase equipment (5,221) - - ----------------------------------------------------------------------------------------------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds received on promissory note 10,324 - - Repayment of promissory note (10,324) - (10,324) Proceeds from issuance of common stock 172,800 - 96,540 ----------------------------------------------------------------------------------------------- Net cash provided by financing activities 172,800 - 96,216 ----------------------------------------------------------------------------------------------- INCREASE IN CASH 107,313 (5,736) 72,247 CASH, beginning of period - 113,049 9,124 ----------------------------------------------------------------------------------------------- CASH, end of period $ 107,313 $ 107,313 $ 81,371 =============================================================================================== SUPPLEMENTAL INFORMATION: Non-cash investing activities: Screenplays $ (5,000) $ - $ (5,000) Interest expenses paid in cash 387 - - THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
AMP PRODUCTIONS, LTD. (A development stage company) Notes to Financial Statements June 30, 2005 (Unaudited - Prepared by Management) (EXPRESSED IN U.S. DOLLARS) ------------------------------ 1. INCORPORATION AND CONTINUANCE OF OPERATIONS The Company was formed on February 27, 2003 under the laws of the State of Nevada. The Company has not commenced planned principal operations, producing filmed entertainment. The company is considered a development stage company as defined in SFAS No. 7. The Company has an office in Vancouver, Canada. These financial statements have been prepared in accordance with U.S. generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company has incurred operating losses and requires additional funds to maintain its operations. Management's plans in this regard are to raise equity financing as required. These conditions raise substantial doubt about the Company's ability to continue as a going concern. These financial statements do not include any adjustments that might result from this uncertainty. The Company has not generated any operating revenues to date. 2. SIGNIFICANT ACCOUNTING POLICIES (a) Cash and Cash Equivalents Cash equivalents comprise certain highly liquid instruments with a maturity of three months or less when purchased. As of June 30, 2005 the Company has no cash equivalents. (b) Accounting Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles 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 revenues and expenses during the reporting period. Actual results could differ from those estimates and assumptions. (c) Advertising Expenses The Company expenses advertising costs as incurred. There have been no advertising expenses incurred by the Company since the inception. (d) Loss Per Share Loss per share is computed using the weighted average number of shares outstanding during the period. Diluted loss per share is equivalent to basic loss per share. (e) Concentration of Credit Risk The Company places its cash and cash equivalents with high credit quality financial institutions. 2. SIGNIFICANT ACCOUNTING POLICIES (continued) (f) Foreign Currency Monetary items denominated in foreign currency are translated to U.S. dollars at the exchange rate in effect at the balance sheet date. Non-monetary items are translated at the exchange rates in effect when the assets are acquired or obligations incurred. Revenues and expenses are translated at the exchange rates in effect at the time of the transactions. Foreign exchange gains and losses are included in the statement of operations. (g) Fair Value of Financial Instruments The respective carrying value of certain on-balance-sheet financial instruments approximated their fair value. These financial instruments include cash, accounts payable, due to a related party and promissory note and accrued interest. Fair values were assumed to approximate carrying values for these financial instruments, except where noted, since they are short term in nature and their carrying amounts approximate fair values or they are receivable or payable on demand. Management is of the opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments. (h) Income Taxes The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been recognized in the Company's financial statements or tax returns using the liability method. Under this method, deferred tax liabilities and assets are determined based on the temporary difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. A valuation allowance is provided for the portion of deferred tax assets that is more likely than not to be unrealized. (i) Stock-Based Compensation The Company has adopted the disclosure-only provisions of Statement of Financial Accounting Standards No. 123 (SFAS 123), Accounting for Stock-based Compensation. SFAS 123 encourages, but does not require, companies to adopt a fair value based method for determining expense related to stock-based compensation. The Company accounts for stock-based compensation issued to employees and directors using the intrinsic value method as prescribed under Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees and related interpretations. The Company has not granted any stock options since inception. 2. SIGNIFICANT ACCOUNTING POLICIES (continued) (j) Comprehensive Income Comprehensive income comprises equity except those resulting from investments by owners and distributions to owners. The Company has no elements of "other comprehensive income" since the inception. (k) Equipment Equipment consists of computer equipment, which is stated at cost and is depreciated under the straight-line method over the estimated useful lives of the asset. Expenditures for betterments and additions are capitalized, while replacement, maintenance and repairs, which do not extend the lives of the respective assets, are charged to expense when incurred. (l) Long-Lived Assets Impairment Long-term assets of the Company are reviewed when changes in circumstances require as to whether their carrying value has become impaired. Management considers assets to be impaired if the carrying value exceeds the future projected cash flows from the related operations (undiscounted and without interest charges). If impairment is deemed to exist, the assets will be written down to fair value. (m) New Accounting Pronouncements In December 2004, the FASB issued SFAS No. 153, Exchanges of Nonmonetary Assets, an amendment of APB No. 29, Accounting for Nonmonetary Transactions. SFAS No. 153 requires exchanges of productive assets to be accounted for at fair value, rather than at carryover basis, unless (1) neither the asset received nor the asset surrendered has a fair value that is determinable within reasonable limits or (2) the transactions lack commercial substance. SFAS 153 is effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. The adoption of FASB No. 153 will not have a material impact on the Company's consolidated financial statements. In December 2004, the FASB issued SFAS No. 123(R), "Accounting for Stock-Based Compensation". SFAS 123(R) establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. This Statement focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions. SFAS 123(R) requires that the fair value of such equity instruments be recognized as expense in the historical financial statements as services are performed. Prior to SFAS 123(R), only certain pro-forma disclosures of fair value were required. SFAS 123(R) shall be effective for the Company as of the beginning of the first interim or annual reporting period that begins after April 1, 2006. The Company has not granted any stock option since inception. The adoption of FASB No. 123(R) will not have a material impact on the Company's financial statements. 3. PROMISSORY NOTE AND ACCRUED INTEREST -------------------------------------------------------------------------------- 2005 2004 -------------------------------------------------------------------------------- Principal, unsecured and bearing interest at 3% per annum - $ 10,000 Accrued interest - 387 -------------------------------------------------------------------------------- $ - $ 10,387 ================================================================================ As at June 30, 2005 the Company has fully paid the promissory note and accrued interest. 4. RELATED PARTY TRANSACTIONS AND COMMITMENTS On March 2, 2003, the Company entered into two purchase agreements with a director of the Company to acquire two screenplays. Pursuant to the agreements, the Company was granted an option to acquire all rights, titles and interests for the above two screenplays. The consideration for the option of acquisition is $2,500, with the total consideration for both options being $5,000. On March 2, 2005, the Company signed an Extension of Option to Purchase Agreement for the two screenplays for a period of one year, at a nominal amount of $10 per screenplay. As at June 30, 2005, the sum of $1,000 remains unpaid. The purchase prices for the two screenplays will be $10,000 and $20,000, respectively, plus the following contingent compensations for each of the screenplays: (a) In the event that a theatrical or televisions motion picture is produced by the Company or its assigns, based on the Property (the "Picture") and the budget of the Picture as of the first day of principal photography and as allowed by all entities financing or guaranteeing completion of the Picture, is not less than $1,500,000, the vendor shall receive additional compensation to make the Purchase Price equivalent to the Script Fee payable to a writer pursuant to the most current Independent Production Agreement of the Writer's Guild of Canada. (b) In addition to the amounts set out above, the Company shall pay to the vendor 3% of 100% of the Company's "Net Profits" of the Picture, or any television series, pilot or movie-of-the-week (as that term is used in the entertainment industry) that derives directly from the Property. "Net Profits" will be defined, computed, accounted for and paid in accordance with the Company's standard Net Profits definition based on the Company's "break even" negative cost position after payment of all reasonable production expenses and receipt by the Company of all distribution advances and gross receipt from exploitation of the Picture and the Property. 5. COMPARATIVE FIGURE Certain of the comparative figures have been reclassified to conform to the current year's presentation. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES We were incorporated for the purpose of developing, producing, marketing, and distributing low-budget feature-length films to movie theaters and ancillary markets. Our capital has been obtained via issuance of common stock and shareholder loans. On December 18, 2003, the Securities and Exchange Commission declared effective our Form SB-2 Registration Statement (Commission File No. 333-106291) concerning our initial public offering of 1,750,000 voting shares of our Common Stock at an offering price of $0.10 per share. The offering commenced on January 23, 2004 and was terminated on June 16, 2004. We sold 1,063,400 of the offered shares at a price of $0.10 per share, for gross proceeds of $106,340. On February 11, 2005, the Securities and Exchange Commission declared effective our Form SB-2 Registration Statement (Commission File No. 333-121503) concerning our public offering of 686,600 voting shares of our Common Stock at an offering price of $0.10 per share. The offering commenced on February 11, 2005 and was terminated on May 12, 2005. We sold all of the offered shares at a price of $0.10 per share, for gross proceeds of $68,660. As of June 30, 2005, we had total assets of $115,120, comprised of $107,313 in cash, $4,196 in prepaid expenses and $3,611 in capital assets. This resulted in a decrease of our total assets of $120,165 from March 31, 2005 primarily due to operating expenses. As of June 30, 2005, our total liabilities decreased nominally to $2,514 from $2,980 as of March 31, 2005. As of June 30, 2005, we had working capital of $107,313 compared with working capital of $113,049 as of March 31, 2005. We have not generated revenue since the date of inception. We presently have sufficient working capital to satisfy our cash requirements for the next 12 months of operations. We do not expect to purchase or sell any significant equipment nor do we expect any significant changes in the number of our employees. RESULTS OF OPERATIONS We posted an operating loss of $4,579 for the quarter ending June 30, 2005, due primarily to travel expenses, consulting fees, office expenses and rent. This was a decrease from the operating loss of $5,599 for the quarter ending June 30, 2004. ITEM 3. CONTROLS AND PROCEDURES (a) Evaluation of Disclosure Controls and Procedures. Our Chief Executive Officer, who is also our Chief Financial Officer, has, within 90 days of the filing date of this report, evaluated our internal controls and procedures designed to ensure that information required to be disclosed in reports under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within specified time periods. After such review, the Company's Chief Executive Officer and Chief Financial Officer concluded that said information was accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure. (b) Changes in Internal Controls. There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the evaluation referred to in paragraph (a) above. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Company is not a party to any material legal proceedings and to its knowledge, no such proceedings are threatened or contemplated. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS At present, our common stock is not traded publicly. As of June 30, 2005, there were 90 owners of record of the Company's common stock. DIVIDEND POLICY Our Board of Directors may declare and pay dividends on outstanding shares of common stock out of funds legally available there for in our sole discretion; however, to date no dividends have been paid on common stock and we do not anticipate the payment of dividends in the foreseeable future. USE OF PROCEEDS FROM REGISTERED SECURITIES On December 18, 2003, the Securities and Exchange Commission declared our Form SB-2 Registration Statement (Commission File No. 333-106291) effective. Our offering commenced on January 23, 2004, and terminated on June 16, 2004. We sold 1,063,400 shares through the offering at a price of $0.10 per share, for gross proceeds of $106,340. On February 11, 2005, the Securities and Exchange Commission declared our Form SB-2 Registration Statement (Commission File No. 333-121503) effective. Our offering commenced on February 11, 2005, and terminated on May 12, 2005. We sold 686,600 shares through the offering at a price of $0.10 per share, for gross proceeds of $68,660. The total gross proceeds from both offerings were $175,000. The following table sets out the calculation of net proceeds from our public offerings during the period from December 18, 2003, the effective date of our initial Registration Statement, until June 30, 2005: Amount ($) Gross offering proceeds as of June 30, 2005 175,000 Offering expenses incurred from December 18, 2003 to June 30, 2005 Legal fees (1) 3,000 -------------------------------------------------------------------------------- Total Expenses 3,000 Net offering proceeds as of June 30, 2005 172,000 Debt Repayment 10,387 Options to acquire literary properties 4,000 Motion picture development 2,027 Motion picture pre-production 4,000 Equipment 4,330 Working capital 20,142 Other professional fees 18,547 -------------------------------------------------------------------------------- Total use of net proceeds 57,703 (1) Offering expenses of $3,000 were substantially less than the anticipated aggregate offering expenses in the amount of $22,500 for both of our registration statements. The Company incurred additional other professional fees of $16,500. The remainder of the difference will be used for working capital. ITEM 3. DEFAULT UPON SENIOR NOTES Not applicable. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. ITEM 5. OTHER INFORMATION None. ITEM 6. EXHIBITS (A) EXHIBIT DESCRIPTION 31.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.1 Officers' Certification SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. AMP PRODUCTIONS, LTD. Date: August 15, 2005 /s/ Thomas E. Mills ---------------------- Thomas E. Mills President & Chief Financial Officer