U.S. Securities and Exchange Commission
Washington D.C. 20549
Form 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2004
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ______________ to _______________
Commission file number 0-50164
DOLPHIN PRODUCTIONS, INC.
(Exact name of small business issuer as specified in its charter)
Nevada 87-0618756
----------------------------- ----------------------
(State or other jurisdiction of (Employer Identification No.)
incorporation or organization)
2068 Haun Avenue, Salt Lake City, Utah 84121
(Address of principal executive offices)
(801) 450-0716
(Issuer's telephone number)
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 ( )
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 770,000 as of December
31, 2004.
DOLPHIN PRODUCTIONS, INC.
INDEX TO FORM 10-QSB
PAGE
PART I FINANCIAL INFORMATION
NUMBER
Item 1. Financial Statements for DOLPHIN PRODUCTIONS, INC. 3-9
Unaudited Condensed Balance Sheets
December 31, 2004 and September 30, 2004
Unaudited Condensed Statements of Operations -
Three Months Ended December 31, 2004 and December 31, 2003
From Inception on June 26, 1998 through December 31, 2004
Unaudited Condensed Statements of Cash Flows -
Three Months Ended December 31, 2004 and December 31, 2003
From Inception on June 26, 1998, through December 31, 2004
Notes to Unaudited Condensed Financial Statements
Item 2. Management's Discussion and Analysis of 10
Financial Condition and Results of Operation
Item 3. Controls and Procedures 10
PART II OTHER INFORMATION 10
SIGNATURE 10
Item 1. Financial Statements for DOLPHIN PRODUCTIONS, INC.
DOLPHIN PRODUCTIONS, INC.
[A Development Stage Company]
UNAUDITED CONDENSED BALANCE SHEETS
ASSETS
December 31,September 30,
2004 2004
___________ ___________
CURRENT ASSETS:
Cash $ 16,135 $ 21,002
Income taxes receivable 730 730
___________ ___________
Total Current Assets
16,865 21,732
___________ ___________
$ 16,865 $ 21,732
___________ ___________
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 2,275 $ 1,709
Accrued payroll taxes 2,994
___________ ___________
Total Current Liabilities 2,275 4,703
___________ ___________
STOCKHOLDERS' EQUITY:
Common stock, $.001 par value,
50,000,000 shares authorized,
770,000 shares issued and
outstanding 770 770
Capital in excess of par value 55 ,230 55,230
Deficit accumulated during the
development stage (41,410) (38,971)
___________ ___________
Total Stockholders' Equity 14,590 17,029
___________ ___________
$ 16,865 $ 21,732
___________ ___________
Note: The balance sheet at September 30, 2004 was taken from the audited
financial statements at that date and condensed.
The accompanying notes are an integral part of these unaudited condensed
financial statements
3
DOLPHIN PRODUCTIONS, INC.
[A Development Stage Company]
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
For the Three From Inception
Months Ended on June 26,
December 31, 1998 Through
______________________ December 31,
2004 2003 2004
__________ __________ ____________
REVENUE $ - $ - $ 37,890
EXPENSES:
Selling - - 4,561
General and administrative 2,439 1,300 74,420
__________ __________ ____________
Total Expenses 2,439 1,300 78,981
__________ __________ ____________
LOSS BEFORE OTHER INCOME (EXPENSE) (2,439) (1,300) (41,091)
OTHER INCOME (EXPENSE)
Interest expense - - (25)
__________ __________ ____________
LOSS BEFORE INCOME
TAXES (2,439) (1,300) (41,116)
CURRENT TAX EXPENSE
(BENEFIT) - - 294
DEFERRED TAX EXPENSE
(BENEFIT) - - -
__________ __________ ____________
NET LOSS $ (2,439) $ (1,300) $ (41,410)
__________ __________ ____________
LOSS PER COMMON SHARE $ (.00) $ (.00) $ (.08)
__________ __________ ____________
The accompanying notes are an integral part of these unaudited condensed
financial statements.
4
DOLPHIN PRODUCTIONS, INC.
[A Development Stage Company]
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
For the Three From Inception
Months Ended on June 26,
December 31, 1998 Through
______________________ December 31,
2004 2003 2004
__________ __________ ____________
Cash Flows from Operating Activities:
Net loss $ (2,439) $ (1,300) $ (41,410)
Adjustments to reconcile net loss
to net cash provided (used) by
operating activities:
Non-cash expense for services
rendered - - 5,000
Changes in assets and liabilities:
(Increase) in income taxes
receivable - - (730)
Increase in accounts payable 566 240 2,275
Increase (decrease) in accrued
payroll taxes (2,994) - -
__________ __________ ____________
Net Cash (Used) by
Operating Activities (4,867) (1,060) (34,865)
__________ __________ ____________
Cash Flows from Investing Activities - - -
__________ __________ ____________
Net Cash Provided by
Investing Activities - - -
__________ __________ ____________
Cash Flows from Financing Activities:
Proceeds from issuance of common stock - - 51,000
__________ __________ ____________
Net Cash Provided by
Financing Activities - - 51,000
__________ __________ ____________
Net Increase (Decrease) in Cash and
Cash Equivalents (4,867) (1,060) 16,135
Cash and Cash Equivalents at
Beginning of Period 21,002 2,995 -
__________ __________ ____________
Cash and Cash Equivalents at End
of Period $ 16,135 $ 1,935 $ 16,135
__________ __________ ____________
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ - $ - $ -
Income taxes $ - $ - $ 1,024
Supplemental Schedule of Non-cash Investing and Financing Activities:
For the three months ended December 31, 2004:
None
For the three months ended December 31, 2003:
None
The accompanying notes are an integral part of these unaudited condensed
financial statements.
5
DOLPHIN PRODUCTIONS, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - Dolphin Productions, Inc. ("the Company") was organized
under the laws of the State of Nevada on June 26, 1998. The Company
provides musical and other performance services for concerts and other
events. The Company has not yet generated significant revenues from its
planned principal operations and is considered a development stage company
as defined in Statement of Financial Accounting Standards No. 7. The
Company, at the present time, has not paid any dividends and any dividends
that may be paid in the future will depend upon the financial requirements
of the Company and other relevant factors.
Condensed Financial Statements - The accompanying financial statements
have been prepared by the Company without audit. In the opinion of
management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position, results
of operations and cash flows at December 31, 2004 and 2003 and for the
periods then ended have been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles in the United States of America have been condensed
or omitted. It is suggested that these condensed financial statements be
read in conjunction with the financial statements and notes thereto
included in the Company's September 30, 2004 audited financial statements.
The results of operations for the periods ended December 31, 2004 and 2003
are not necessarily indicative of the operating results for the full year.
Fiscal Year - The Company's fiscal year-end is September 30th.
Cash and Cash Equivalents - The Company considers all highly liquid debt
investments purchased with a maturity of three months or less to be cash
equivalents.
Accounts Receivable - The Company records accounts receivable at the lower
of cost or fair value. The Company recognizes interest income on an
account receivable based on the stated interest rate for past-due accounts
over the period that the account is past due. The Company accumulates and
defers fees and costs associated with establishing a receivable to be
amortized over the estimated life of the related receivable. The Company
estimates allowances for doubtful accounts based on the aged receivable
balances and historical losses. The Company records interest income on
delinquent accounts receivable only when payment is received. The Company
first applies payments received on delinquent accounts receivable to
eliminate the outstanding principal. The Company charges off
uncollectible accounts receivable when management estimates no possibility
of collecting the related receivable. The Company considers accounts
receivable to be past due or delinquent based on contractual terms.
6
DOLPHIN PRODUCTIONS, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Continued]
Revenue Recognition - The Company recognizes revenue from providing
musical and other performances for concerts and other events for a
negotiated fee in the period when the services are provided. The Company
records only its fee from a concert performance and reflects the Company's
expenses related to the performance as general and administrative expense.
The Company recognizes revenue from the sale of compact discs when the
product is delivered.
Advertising Costs - Advertising costs, except for costs associated with
direct-response advertising, are charged to operations when incurred. The
costs of direct-response advertising are capitalized and amortized over
the period during which future benefits are expected to be received.
During the three months ended December 31, 2004 and 2003, advertising
costs amounted to $0 and $0, respectively.
Income Taxes - The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109 "Accounting for Income
Taxes" [See Note 4].
Loss Per Share - The computation of loss per share is based on the
weighted average number of shares outstanding during the period presented
in accordance with Statement of Financial Accounting Standards No. 128,
"Earnings Per Share" [See Note 6].
Accounting Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles in the United
States of America requires management to make estimates and assumptions
that effect the reported amounts of assets and liabilities, the
disclosures 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
estimated by management.
Recently Enacted Accounting Standards - Statement of Financial Accounting
Standards ("SFAS") No. 151, "Inventory Costs - an amendment of ARB 43,
Chapter 4", SFAS No. 152, "Accounting for Real Estate Time-Sharing
Transactions - an amendment of FASB Statements No. 66 and 67", SFAS No.
153, "Exchanges of Nonmonetary Assets - an amendment of APB Opinion No.
29", and SFAS No 123 (revised 2004), "Share-Based Payment", were recently
issued. SFAS No. 151, 152, 153 and 123 (revised 2004) have no current
applicability to the Company or their effect on the financial statements
would not have been significant.
Restatement - On January 15, 1999, the Company effected a 5-for-2 forward
stock split. The financial statements have been restated, for all periods
presented, to reflect the stock split [See Note 2].
Reclassification - The financial statements for periods prior to December
31, 2004 have been reclassified to conform to the headings and
classifications used in the December 31, 2004 financial statements.
7
DOLPHIN PRODUCTIONS, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 2 - CAPITAL STOCK
Common Stock - During June 1998, the Company issued 500,000 shares of its
previously authorized but unissued common stock for cash of $2,000 (or
$.004 per share).
During January 1999, the Company issued 20,000 shares of its previously
authorized but unissued common stock for cash of $4,000 (or $.20 per
share).
During September of 2004, the Company sold 225,000 shares of its
previously authorized but unissued stock for $45,000 ($.20 per share).
During September of 2004, the Company issued 25,000 shares of its
previously authorized but unissued stock to certain officers and
directors. The Company assigned a value of $5000 ($.20 per share) to the
shares issued.
Stock Split - On January 15, 1999, the Company effected a five for two
common stock split. The financial statements, for all periods presented,
have been restated to reflect the stock split.
NOTE 3 - RELATED PARTY TRANSACTIONS
Management Compensation and Accrued Expenses - Salary expense to the
officers of the Company for the three months ended December 31, 2004 and
2003 amounted to $0 and $0, respectively.
Legal Services and Accrued Expenses - During the three months ended
December 31, 2004 and 2003, respectively, the Company's President provided
legal services of $0 and $0 to the Company
NOTE 4 - INCOME TAXES
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109 "Accounting for Income Taxes".
SFAS No. 109 requires the Company to provide a net deferred tax
asset/liability equal to the expected future tax benefit/expense of
temporary reporting differences between book and tax accounting methods
and any available operating loss or tax credit carryforwards. At December
31, 2004, the Company has available unused operating loss carryforwards of
approximately $41,100, which may be applied against future taxable income
and which expire in various years through 2025.
The amount of and ultimate realization of the benefits from the deferred
tax assets for income tax purposes is dependent, in part, upon the tax
laws in effect, the future earnings of the Company, and other future
events, the effects of which cannot be determined. Because of the
uncertainty surrounding the realization of the deferred tax assets, the
Company has established a valuation allowance equal to their tax effect
and, therefore, no deferred tax asset has been recognized for the deferred
tax assets. The net deferred tax assets, which consist mainly of net
operating loss carryforwards, are approximately $6,200 and $5,800 as of
December 31, 2004 and September 30, 2004, respectively, with an offsetting
valuation allowance of the same amount, resulting in a change in the
valuation allowance of approximately $400 during the three months ended
December 31, 2004.
8
DOLPHIN PRODUCTIONS, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 5 - GOING CONCERN
The accompanying financial statements have been prepared in conformity
with generally accepted accounting principles in the United States of
America which contemplate continuation of the Company as a going concern.
However, the Company has not yet been successful in establishing
profitable operations and has incurred significant losses in recent years.
These factors raise substantial doubt about the ability of the Company to
continue as a going concern. In this regard, management is proposing to
raise any necessary additional funds through loans or through additional
sales of its common stock or through the possible acquisition of other
companies. There is no assurance that the Company will be successful in
raising this additional capital or in achieving profitable operations.
NOTE 6 - LOSS PER SHARE
The following data show the amounts used in computing loss per share:
For the Three From Inception
Months Ended on June 26,
December 31, 1998 Through
______________________ December 31,
2004 2003 2004
__________ __________ ____________
Net loss available to common
shareholders (numerator) $ (2,439) $ (1,300) $ (41,410)
__________ __________ ____________
Weighted average number of
common shares outstanding
used in loss per share for the
period (denominator) 770,000 520,000 528,273
__________ __________ ____________
Dilutive loss per share was not presented, as the Company had no common
stock equivalent shares for all periods presented that would affect the
computation of diluted loss per share.
9
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain
significant factors that have affected the Company's financial condition
and operating results for the period included in the accompanying
financial statements. The accompanying Unaudited Condensed Financial
Statements as of December 31, 2004, including the Notes to Unaudited
Condensed Financial Statements, are, by this reference, included in this
Managements Discussion and Analysis of Financial Condition and Results of
Operations.
Results of Operations
Three Months Ended December 31, 2004 Compared to Three Months Ended
December 31, 2003
DOLPHIN PRODUCTIONS, INC. (the Company), did not generate revenues during
the quarters ending December 31, 2004, December 31, 2003, respectively.
The Company is exploring the risks, costs and feasibility of its entry
into the business of marketing original music through e-commerce.
DOLPHIN PRODUCTIONS, INC. recorded a net loss of $2,439 for the quarter
ending December 31, 2004, compared to a net loss of $1,300 for the
comparable quarter ending December 31, 2003.
DOLPHIN PRODUCTIONS, INC. has no plans to produce concerts or to provide
concert-related services in the future, except as such services may be
ancillary to the Companys efforts to promote and sell original music
through the Internet.
DOLPHIN PRODUCTIONS, INC., has no prospects for generating revenues from
its operations during the foreseeable future. The magnitude of the
revenues, if any, will depend upon many factors, including the Companys
ability to compete with better capitalized distributors of recorded
music.
Liquidity and Capital Resources
As of December 31, 2004, the Company had on hand cash of $16,135. It owed
accounts payable of $2,275.
Item 3. Controls and Procedures
As of January 15, 2005, an informal evaluation was performed under the
supervision and with the participation of the Company's management,
including the CEO, the CFO, and the Chair of the Companys Audit Committee,
as to the effectiveness of the design and operation of the Company's
disclosure controls and procedures. Based on that evaluation, the
Company's management concluded that the Company's disclosure controls and
procedures were effective as of January 15, 2005. There have been no
significant changes in the Company's internal controls or in other factors
that could significantly affect internal controls subsequent to January
15, 2005.
PART II-OTHER INFORMATION
None
SIGNATURE
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 thereunto duly authorized.
DOLPHIN PRODUCTIONS, INC.
Date: February 7, 2005 /s/ Richard H. Casper
--------------------------------
Richard H. Casper, President