Attached files
| file | filename |
|---|---|
| EX-31.1 - 8650 SECTION 302 CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER - AUTRIS | bigsky10q093010ex31.htm |
| EX-32.1 - CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 - AUTRIS | bigsky10q093010ex32.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
|
(X )
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITES EXCHANGE ACT OF 1934
|
|
For the quarter period ended September 30, 2010
|
|
( )
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE EXCHANGE ACT
|
|
For the transition period from to
|
|
|
Commission File number 333-152955
|
|
BIGSKY PRODUCTIONS, INC.
|
(Exact name of small business issuer as specified in its charter)
|
Nevada
|
51-0670127
|
|
(State or other jurisdiction of incorporation or organization)
|
(IRS Employer Identification No.)
|
|
204 Mescal Circle, NW
Albuquerque, New Mexico 87105
|
|
(Address of principal executive offices)
|
|
310.430.1388
|
|
(Issuer’s telephone number)
|
|
N/A
|
|
(Former name, former address and former fiscal year, if changed since last report)
|
Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). The registrant has not been phased into the Interactive Data reporting system. . Yes [ ] No [ X ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See definition of “large accelerated filer”, “accelerated filer” and “small reporting company” Rule 12b-2 of the Exchange Act.
Large accelerated [ ] Accelerated filer [ ]
Non-accelerated filer [ ]
(Do not check if a small reporting company) Small reporting company [X]
1
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes [X] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PROCEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 after the distribution of securities subsequent to the distribution of securities under a plan confirmed by a court. Yes □ No □
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: November 22, 2010: 12,063,381 common shares with a par value of $0.001 per share.
2
INDEX
|
Page
Number
|
||
|
PART 1.
|
FINANCIAL INFORMATION
|
|
|
ITEM 1.
|
Financial Statements (unaudited)
|
4
|
|
Condensed Balance Sheet as at September 30, 2009 and June 30, 2010
|
F-1
|
|
|
Condensed Statement of Operations
For the three and nine months ended September 30, 2010 and 2009 and for the period February 28, 2008 (Date of Inception) to September 30, 2010
|
F-2
|
|
|
Condensed Statement of Cash Flows
For the three months ended September 30, 2010 and 2009 and for the period February 28, 2008 (Date of Inception) to September 30, 2010
|
F-3
|
|
|
Notes to the Financial Statements.
|
F-4-6
|
|
|
ITEM 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
5
|
|
ITEM 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
9
|
|
ITEM 4.
|
Controls and Procedures
|
9
|
|
PART 11.
|
OTHER INFORMATION
|
11
|
|
ITEM 1.
|
Legal Proceedings
|
11
|
|
ITEM 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
11
|
|
ITEM 3.
|
Defaults Upon Senior Securities
|
11
|
|
ITEM 4.
|
Submission of Matters to a Vote of Security Holders
|
11
|
|
ITEM 5.
|
Other Information
|
11
|
|
ITEM 6.
|
Exhibits
|
12
|
|
SIGNATURES.
|
13
|
|
3
PART 1 – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The accompanying balance sheets of BigSky Productions, Inc. (a development stage company) at September 30, 2010 (with comparative figures as at June 30, 2010) and the condensed statement of operations for the three months ended September 30, 2010 and 2009 and for the period from February 28, 2008 (date of incorporation) to September 30, 2010, shareholders’ equity at September 30, 2010 and the condensed statement of cash flows for the three months ended September 30, 2010 and 2009 and for the period from February 28, 2008 (date of incorporation) to September 30, 2010 have been prepared by the Company’s management in conformity with accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature.
The financial statements within this report reflect the restatement of the 2009 figures. In financial statements issued from March 31, 2009 through March 31, 2010, the Company had incorrectly listed a shareholder loan payable for $22,500 ($23,000 after June 30, 2009). The Company has established that the loan was never valid and should have never been posted within the financial records of the Company. The financial statements are restated to remove the erroneously posted note payable and associated accrued interest thereto.
Operating results for the quarter ended September 30, 2010 are not necessarily indicative of the results that can be expected for the year ending June 30, 2011.
4
BIGSKY PRODUCTIONS, INC.
(A Development Stage Enterprise)
Condensed Financial Statements
September 30, 2010 and 2009
(Unaudited)
BIGSKY PRODUCTIONS, INC.
(A Development Stage Enterprise)
Condensed Financial Statements
September 30, 2010 and 2009
(Unaudited)
CONTENTS
|
Page(s)
|
||
|
Condensed Balance Sheets as of September 30, 2010 and June 30, 2010
|
F-1
|
|
|
Condensed Statements of Operations for the three months ended September 30, 2010 and 2009 and the period of February 28, 2008 (Inception) to September 30, 2010
|
F-2
|
|
|
Condensed Statements of Cash Flows for the three months ended September 30, 2010 and 2009 and the period of February 28, 2008 (Inception) to September 30, 2010
|
F-3
|
|
|
Notes to the Condensed Financial Statements
|
F-4-6
|
|
|
BIGSKY PRODUCTIONS, INC
|
||||||||
|
(A Development Stage Enterprise)
|
||||||||
|
Condensed Balance Sheets
|
||||||||
|
September 30, 2010
|
June 30, 2010
|
|||||||
|
(Unaudited)
|
||||||||
|
ASSETS
|
||||||||
|
Current assets
|
||||||||
|
Cash
|
$ | 119 | $ | 1,233 | ||||
|
Accounts receivable
|
500 | 450 | ||||||
|
Officer receivable
|
1,240 | 1,240 | ||||||
|
Other current assets
|
2,500 | 1,196 | ||||||
|
Total current assets
|
4,359 | 4,119 | ||||||
|
Total assets
|
$ | 4,359 | $ | 4,119 | ||||
|
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
||||||||
|
Current liabilities
|
||||||||
|
Accounts payable
|
$ | 25,804 | $ | 25,662 | ||||
|
Deferred revenue
|
10,000 | 3,098 | ||||||
|
Total current liabilities
|
35,804 | 28,760 | ||||||
|
Stockholders' Deficit
|
||||||||
|
Common stock, $0.001 par value; 75,000,000 shares authorized, 12,063,381 shares issued and outstanding
|
12,063 | 12,063 | ||||||
|
Additional paid in capital
|
81,595 | 81,595 | ||||||
|
Deficit accumulated during the development stage
|
(125,103 | ) | (118,299 | ) | ||||
|
Total stockholders' deficit
|
(31,445 | ) | (24,641 | ) | ||||
|
Total liabilities and stockholders' deficit
|
$ | 4,359 | $ | 4,119 | ||||
|
See accompanying notes to condensed financial statements
|
||||||||
F-1
|
(A Development Stage Enterprise)
|
||||||||||||
|
Condensed Statements of Operations
(Unaudited)
|
||||||||||||
|
From February 28, 2008 (inception) to September 30, 2010
|
||||||||||||
|
Three months ended September 30,
|
||||||||||||
|
2010
|
2009
|
|||||||||||
|
(Restated)
|
||||||||||||
|
Revenue
|
$ | 3,598 | $ | - | $ | 42,029 | ||||||
|
Cost of revenue
|
4,746 | - | 35,903 | |||||||||
|
Gross margin
|
(1,148 | ) | - | 6,126 | ||||||||
|
Operating Expenses
|
||||||||||||
|
Professional fees
|
3,110 | 10,000 | 118,708 | |||||||||
|
General and administrative
|
2,546 | - | 12,524 | |||||||||
|
Total operating expenses
|
5,656 | 10,000 | 131,232 | |||||||||
|
Other income
|
||||||||||||
|
Interest income
|
- | - | 3 | |||||||||
|
Total other income
|
- | - | 3 | |||||||||
|
Net loss
|
$ | (6,804 | ) | $ | (10,000 | ) | $ | (125,103 | ) | |||
|
Basic and diluted loss per common share
|
$ | (0.00 | ) | $ | (0.00 | ) | ||||||
|
Weighted average shares outstanding
|
12,063,381 | 10,661,380 | ||||||||||
|
See accompanying notes to condensed financial statements
|
||||||||||||
F-2
|
(A Development Stage Enterprise)
|
||||||||||||
|
Condensed Statements of Cash Flows
(Unaudited)
|
||||||||||||
|
For the period from February 28, 2008 (inception) to September 30, 2010
|
||||||||||||
|
Three months ended September 30,
|
||||||||||||
|
2010
|
2009
|
|||||||||||
|
(Restated)
|
||||||||||||
|
Cash flows from operating activities
|
||||||||||||
|
Net loss
|
$ | (6,804 | ) | $ | (10,000 | ) | $ | (125,103 | ) | |||
|
Adjustments to reconcile net loss to net cash used in operating activities
|
||||||||||||
|
Common stock issued for services
|
- | - | 37,658 | |||||||||
|
Changes in operating assets and liabilities
|
||||||||||||
|
Accounts receivable
|
(50 | ) | (500 | ) | ||||||||
|
Prepaid expenses
|
- | 500 | - | |||||||||
|
Officer receivable
|
- | (1,240 | ) | |||||||||
|
Other current asset
|
(1,304 | ) | (2,500 | ) | ||||||||
|
Accounts payable
|
142 | 9,500 | 25,804 | |||||||||
|
Deferred revenue
|
6,902 | 10,000 | ||||||||||
|
Net cash used in operating activities
|
(1,114 | ) | - | (55,881 | ) | |||||||
|
Cash flows from investing activities
|
- | - | - | |||||||||
|
Cash flows from financing activities
|
||||||||||||
|
Shareholder loan
|
- | 100 | - | |||||||||
|
Proceeds from sale of stock
|
- | - | 56,000 | |||||||||
|
Net cash provided by financing activities
|
- | 100 | 56,000 | |||||||||
|
Net change in cash
|
(1,114 | ) | 100 | 119 | ||||||||
|
Cash at beginning of period
|
1,233 | 10 | - | |||||||||
|
Cash at end of period
|
$ | 119 | $ | 110 | $ | 119 | ||||||
|
Supplemental disclosure of non-cash investing and financing activities:
|
||||||||||||
|
Issuance of common stock for professional and consulting services
|
$ | - | $ | - | $ | 37,658 | ||||||
|
Supplemental cash flow Information:
|
||||||||||||
|
Cash paid for interest
|
$ | - | $ | - | $ | - | ||||||
|
Cash paid for income taxes
|
$ | - | $ | - | $ | - | ||||||
|
See accompanying notes to condensed financial statements
|
||||||||||||
F-3
BIGSKY PRODUCTIONS, INC.
(A Development Stage Enterprise)
Notes to Condensed Financial Statements
(Unaudited)
Note 1 – Nature of Business and Basis of Presentation
The accompanying unaudited financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America. However, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted or condensed pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, all adjustments of a normal recurring nature necessary for a fair presentation have been included. The results for interim period is not necessarily indicative of results for the entire year. These condensed financial statements and accompanying notes should be read in conjunction with the Company’s annual financial statements and the notes thereto for the fiscal year ended June 30, 2010 included in its Annual Report on Form 10-K.
BigSky Productions, Inc. (the Company) was incorporated in the State of Nevada on February 28, 2008. BigSky Productions, Inc. is developing a business plan as a producer of low-budget motion pictures. The Company intends to use Canada as its primary area for producing these feature films. To date, our business activities have been limited to organizational matters, reselling of advertising time, research of film scripts on which to acquire film rights, developing our website and the preparation and filing of the registration statement of which this prospectus is a part. The Company has elected a fiscal year end of June 30.
The Company currently has limited operations and, in accordance with ASC 915 “Development Stage Entities,” is considered a Development Stage Enterprise. The Company has been in the development stage since its formation and has realized minimal revenues from its operations.
Note 2 – Significant Accounting Policies
Earnings Per Share Information
FASB ASC 260, “Earnings Per Share” provides for calculation of "basic" and "diluted" earnings per share. Basic earnings per share includes no dilution and is computed by dividing net income (loss) available to common shareholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity similar to fully diluted earnings per share. Basic and diluted loss per share were the same, at the reporting dates, as there were no common stock equivalents outstanding.
Going concern
The Company's financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.
F-4
BIGSKY PRODUCTIONS, INC.
(A Development Stage Enterprise)
Notes to Condensed Financial Statements
Note 2 - Significant Accounting Policies (continued)
In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plans to obtain such resources for the Company include (1) obtaining capital from management and significant stockholders sufficient to meet its minimal operating expenses, and (2) as a last resort, seeking out and completing a merger with an existing operating company. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Revenue Recognition
The Company's financial statements are prepared under the accrual method of accounting. Revenues are recognized when evidence of an agreement exists, the price is fixed or determinable, collectability is reasonably assured and goods have been delivered or services performed.
The Company derives revenues from the sale of advertising space on its radio program “The Opportunity Show.” “The Opportunity Show” is a paid news magazine airing on select AM radio stations in the United States. Clients and/or guests compensate the Company for time on this program to expose their business or stories to the listening audience.
Advertising contracts are structured to run for a time period between 30 and 90 days. Accordingly, revenues are recognized on a pro-rata basis resulting in recognized revenue and deferred revenue of $3,598 and $10,000 as of and for the three months ended September 30, 2010.
Note 3 – Restatement
The September 30, 2009 financial statements have been restated to properly reflect transactions related to activities of a former consultant. In financial statements issued from March 31, 2009 through March 31, 2010, the Company had listed a shareholder loan payable for $22,500 ($23,000 after June 30, 2009) for services paid for on behalf of the Company. The loan was listed due to a consultant that had never acquired shares in the Company. The Company disavows any knowledge of the loan, that the loan did not exist and that several vendors listed never performed services for the Company. The financial statements are restated to remove the misposted note payable and accrued interest that the Company shows never existed.
From June 2008 through November 2008, the Company advanced funds to the consultant for services rendered that were never recorded in the books and records of the Company. Also, an officer of the Company had provided services for the Company and the invoice was not included in the financial statements. The financial statements are restated to include the transactions of the President of the Company.
F-5
BIGSKY PRODUCTIONS, INC.
(A Development Stage Enterprise)
Notes to Condensed Financial Statements
Note 3 - Restatement (continued)
The September 30, 2009 financial statements included a material invoice from the attorney who had prepared the S-1 filing, comment responses, post-effective amendments, and the first Form 10-Q in March 2009, all services provided prior to June 30, 2009. The $35,000 invoice had been included in the accounts payable and income statements as of September 30, 2009 but should have been included in the June 2009 financial statements. The June 2009 financial statements have been restated to reflect this correction which has adjusted the statement of operations for the three months ended September 30, 2009.
The net effect on the revised statement of operations for September 30, 2009 are:
|
As Reported
|
Adjustments
|
As Restated
|
||||||||||
|
Statement of operations:
|
||||||||||||
|
Professional fees
|
$ | 45,000 | $ | (35,000 | ) | $ | 10,000 | |||||
|
Interest expense
|
341 | (341 | ) | - | ||||||||
|
Net loss
|
(45,341 | ) | 35,341 | (10,000 | ) | |||||||
F-6
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
The following discussion should be read in conjunction with the information contained in the financial statements of BigSky Productions, Inc. (“BSPI”) and the notes which form an integral part of the financial statements which are attached hereto.
The financial statements mentioned above have been prepared in conformity with accounting principles generally accepted in the United States of America and are stated in United States dollars.
BSPI is a start-up, development Stage Company, incorporated in the State of Nevada on February 28, 2008 and with a fiscal year end of June 30. We have no subsidiaries, affiliated companies or joint venture partners.
Since our inception, we have been engaged in business planning activities, including researching the industry, developing our economic models and financial forecasts, performing due diligence regarding potential geographic locations most suitable for our services and identifying future sources of capital.
Since our inception, we have been engaged in business planning activities, including researching the industry, developing our economic models and financial forecasts, performing due diligence regarding potential geographic locations most suitable for our services and identifying future sources of capital is developing a business plan as a producer of low-budget motion pictures. The Company intends to use Canada as its primary area for producing these feature films. Within the past year we have engaged in minimal operations. We have been involved with the productions of an AM radio show called “Ellis Martin Report” whereby we sell radio airtime to customers who tell their story with the hopes of attracting potential investors and/or partners. The airtime is purchased from a third party radio airtime broker at a discount to the Company. Since inception, through this activity we have generated revenues in the amount of $42,029 with a gross margin of approximately $6,126with a net loss since inception of ($125,103). We cannot provide any assurance or guarantee that we will be able to continue generating revenues in the future years through this activity and become profitable. Potential investors must be aware if we are unable to raise additional funds in the next three to six months and/or generate sufficient revenues, any investment made into the Company would be lost in its entirety.
Currently, BSPI has three (3) Officers Ellis Martin (President/CEO/CFO), Mirza Santillan (Secretary/Treasurer) and Brett Whitelaw (Vice President). The Company has two (2) Directors, Ellis Martin and Brett Whitelaw. To date, Mr. Martin has assumed the primary responsibility for all planning, development and operational duties, and will continue to do so throughout the beginning stages of the Company.
Other than the Officers/Directors, there are no employees at the present time and there are no plans to hire employees during the next twelve months.
Principal Office
Our principal office is located at 204 Mescal Circle NW, Albuquerque, New Mexico 87105. Our telephone number is (310) 430-1388 and our e-mail contact is Sky@big-skyproductions.com. We are currently developing our website which can be viewed at www.big-sky productions.com
BigSky’s management does not currently have policies regarding the acquisition or sale of real estate assets primarily for possible capital gain or primarily for income. BigSky does not presently hold any investments or interests in real estate, investments in real estate mortgages or securities of or interests in persons primarily engaged in real estate activities.
5
Other information
As of September 30, 2010 BSPI had 12,063,381 shares outstanding.
BSPI is responsible for filing various forms with the United States Securities and Exchange Commission (the “SEC”) such as Form 10K and Form 10Qs. The shareholders may read and copy any material filed by BSPI with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, DC, 20549. The shareholders may obtain information on the operations of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information which BSPI has filed electronically with the SEC by assessing the website using the following address: http://www.sec.gov.
Planned Business
The following discussion should be read in conjunction with the information contained in the financial statements of BSPI and the notes, which forms an integral part of the financial statements, which are attached hereto.
DESCRIPTION OF THE PROPERTY
We own no property.
Plan of Operation
We must raise cash to implement our business plan. We will require approximately $100,000 for the next nine months in order to continue our proposed business. We have liabilities of $35,804. We estimate that we will require $12,000 for reporting requirements (bookkeeping, accounting, and filing fees) for the remainder of our fiscal year (which ends June 30) leaving the Company with approximately $52,000 to expend towards the development of its business.
Since incorporation, the Company has financed its operations through minimal initial capitalization, sale of its common stock, and nominal business activity. As of September 30, 2010 we had $119 of cash on hand. We had total liabilities of $35,804. The Company has not implemented its fully planned principal operations or strategic business plan. Presently, BSPI is attempting to secure sufficient monetary assets to increase operations. BSPI cannot assure any investor that it will be able to enter into sufficient business operations adequate enough to insure continued operations. If BSPI does not produce sufficient cash flow to support its operations over the next 12 months, the Company will need to raise additional capital by issuing capital stock in exchange for cash in order to continue as a going concern. There are no formal or informal agreements to attain such financing. BSPI cannot assure any investor that, if needed, sufficient financing can be obtained or, if obtained, that it will be on reasonable terms. Without realization of additional capital, it would be unlikely for operations to continue and any investment made by an investor would be lost in its entirety.
BSPI management does not expect to incur research and development costs within the next twelve months.
BSPI currently does not own any significant plant or equipment that it would seek to sell in the near future
The Company has not paid for expenses on behalf of any director. Additionally, BSPI believes that this policy shall not materially change within the next twelve months.
6
Competitive Factors
The motion picture industry is intensely competitive. Competition comes from companies within the same business and companies in other entertainment media that create alternative forms of entertainment. The industry is currently evolving in such a way that certain multinational multimedia firms will be able to dominate this space because of their control over key film, magazine, and television content, as well as key network and cable outlets. These organizations have numerous competitive advantages, such as the ability to acquire financing for their projects and to make favorable arrangements for the distribution of completed films. All of our competitors will likely be organizations of substantially larger size and capacity, with far greater financial and personnel resources and longer operating histories, and may be better able to acquire properties, personnel and financing, and enter into more favorable distribution agreements. Our success will depend on public taste, which is both unpredictable and susceptible to rapid change.
As an independent film production company, we most likely will not have the backing of a major studio for production and distribution support. Consequently, we may not be able to complete a motion picture.
In order to be competitive, we intend to create independent motion pictures that may appeal to a wide range of public taste both in the United States and abroad. Moreover, by producing our films in Canada we believe that we will be able to significantly reduce production costs, and thereby offer our films to distributors at competitive pricing. Investors must be aware that at this time we have not produced any film and may not ever be successful in doing so in the future.
Regulations
If and when BigSky begins operations the business may be subjected to governmental regulation and required to comply in the following areas:
Distribution Arrangements. We intend to release our films in the United States through existing distribution companies, primarily independent distributors. We will retain the right for ourselves to market the films on a jurisdiction-by-jurisdiction basis throughout the rest of the world and to market television and other uses separately. To the extent that we may engage in foreign distribution of our films, we will be subject to all of the governmental regulations of doing business abroad including, but not limited to, government censorship, exchange controls, and copying, and licensing or qualification. At this point it is not possible to predict, with certainty, the nature of the distribution arrangements and extent of exact governmental regulations that may impact our business.
Intellectual Property Rights. Rights to motion pictures are granted legal protection under the copyright laws of the United States and most foreign countries, including Canada. These laws provide substantial civil and criminal penalties for unauthorized duplication and exhibition of motion pictures. Motion pictures, musical works, sound recordings, artwork, and still photography are separately subject to copyright under most copyright laws. The results of such investigations may warrant legal action, by the owner of the rights, and, depending on the scope of the piracy, investigation by the Federal Bureau of Investigation and/or the Royal Canadian Mounted Police with the possibility of criminal prosecution. Under the copyright laws of Canada and the United States, copyright in a motion picture is automatically secured when the work is created and "fixed" in a copy. We intend to register our films for copyright with both the Canadian Copyright Office and the United States Copyright Office. Both offices will register claims to copyright and issue certificates of registration but neither will "grant" or "issue" copyrights. Only the expression (camera work, dialogue, sounds, etc.) fixed in a motion picture can be protected under copyright. Registration with the appropriate office establishes a public record of the copyright claim.
Censorship. An industry trade association, the Motion Picture Association of America, assigns ratings for age group suitability for domestic theatrical distribution of motion pictures under the auspices of its Code and Rating Administration. The film distributor generally submits its film to the Code and Rating Administration for a rating. We plan to follow the practice of submitting our motion pictures for ratings.
Labor Laws. Many of the screenplay writers, performers, directors and technical personnel in the entertainment industry who we intend to be involved in our productions are members of guilds or unions that bargain collectively on an industry-wide basis and may have state and governmental regulations that we must comply with.
7
Employees
BSPI management does not anticipate the need to hire employees over the next twelve (12) months. Currently, the Company believes the services provided by its officer and director appears sufficient at this time. Our officers and directors do not have an employment agreement with us. We presently do not have pension, health, annuity, insurance, profit sharing or similar benefit plans; however, we may adopt such plans in the future. There are presently no benefits available to any employee.
Investment Policies
BSPI does not have an investment policy at this time. Any excess funds it has on hand will be deposited in interest bearing notes such as term deposits or short term money instruments. There are no restrictions on what the director is able to invest or additional funds held by BSPI. Presently BSPI does not have any excess funds to invest.
Since we have had very minimal business activity, it is the opinion of management that the most meaningful financial information relates primarily to current liquidity and solvency. As at September 30, 2010, we had $119 cash on hand and liabilities of $35,804. Unless we raise additional funds immediately, we will be faced with a working capital deficiency that may result in the failure of our business, resulting in a complete loss of any investment made into the Company. Our future financial success will be dependent on the success of obtaining capital.
Our financial statements contained herein have been prepared on a going concern basis, which assumes that we will be able to realize our assets and discharge our obligations in the normal course of business. We incurred a net loss for the period from the inception of our business on February 28, 2008 to September 30, 2010 of ($125,103). We did have minimal revenues for the three months ended September 30 2010 of approximately $3,598 compared to $0 in 2009 for the same period. The revenue was the result of media marketing services during the aforementioned period. There can be no guarantee or assurance we will continue having revenues from this service in the future.
Critical Accounting Policies. Our discussion and analysis of its financial condition and results of operations, including the discussion on liquidity and capital resources, are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, management re-evaluates its estimates and judgments. The going concern basis of presentation assumes we will continue in operation throughout the next fiscal year and into the foreseeable future and will be able to realize our assets and discharge our liabilities and commitments in the normal course of business. Certain conditions, discussed below, currently exist which raise substantial doubt upon the validity of this assumption. The financial statements do not include any adjustments that might result from the outcome of the uncertainty.
Our intended business activities are dependent upon our ability to obtain third party financing in the form of debt and equity and ultimately to generate future profitable business activity. We may look to secure additional funds through future debt or equity financings. Such financings may not be available or may not be available on BSPI terms.
Trends. We are a development stage business and have generated minimal revenue and have bleak prospects of generating sufficient revenue in future quarters. There can be no guarantee or assurance that management will be successful in developing the proposed business of the Company. Investors must be aware that failure to do so would result in a complete loss of any investment made into the Company
Limited Operating History; Need for Additional Capital. There is minimal historical financial information about us upon which to base an evaluation of our performance as a business. We are a development stage company and have only generated minimal revenues since our formation on February 28, 2008. We require immediate additional capital in order to continue as a going concern. If we are unable to secure at a minimum approximately $15,000 over the course of the next three months our business would be in jeopardy of failing, and if we fail, any investment made into the Company would be lost in its entirety.
8
We cannot guarantee we will be successful in our business activities or in any activity that management directs the business. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, and possible cost overruns due to price and cost increases in services.
Results of Operations – September 30, 2010.
For the three months ended September 30, 2010, we had a net loss of $6,804 compared to a net loss of $10,000 for the three months period ended September 30, 2009.
The losses were a result of the Company having minimal revenues for either of the periods in 2010 or 2009. The expenses for these periods were related to professional fees and fees associated with maintaining reporting company status and purchase of “air time” for the Ellis Martin Report broadcast. The Company had an accumulated loss since inception of $125,103.
Balance Sheet as at September 30, 2010. We had $119 of cash available as at September 30, 2010. Our total liabilities at September 30, 2010 were $35,804 Total shares issued outstanding, as at September 30, 2010, was 12,063,381.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This Form 10-Q contains statements that constitute forward-looking statements. The words “expect,” “estimate,” “anticipate,” “predict,” “believe,” and similar expressions and variations thereof are intended to identify forward-looking statements. Such forward-looking statements include statements regarding, among other things, (a) our estimates of raw material, (b) our projected sales and profitability, (c) our growth strategies, (d) anticipated trends in our industry, (e) our future financing plans, (f) our anticipated needs for working capital and (g) the benefits related to ownership of our common stock. This information may involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from the future results, performance, or achievements expressed or implied by any forward-looking statements for the reasons, among others, described within the various sections of this Form 10-Q.
In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this Form 10-Q will in fact occur as projected. We undertake no obligation to release publicly any updated information about forward-looking statements to reflect events or circumstances occurring after the date of this Form 10-Q or to reflect the occurrence of unanticipated events.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MAKET RISK
We believe that there have been no significant changes in our market risk exposures for the three months ended September 30, 2010.
ITEM 4. CONTROLS AND PROCEDURES
Ellis Martin, Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer/Chief Financial Officer concluded that these disclosure controls and procedures are not effective. See below within this section “CONCLUSION” for specifics of why the controls and procedures were determined to be ineffective.
There were no changes in our internal control over financial reporting during the quarter ended September 30, 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. See below within this section “CONCLUSION” for management’s plans relating to controls and procedures in the future.
9
CEO/CFO CERTIFICATIONS
Appearing immediately following the Signatures section of this Amended Quarterly Report there are two separate forms of "Certifications" of the CEO/CFO, Ellis Martin. The second form of Certification is required in accord with Section 302 of the Sarbanes-Oxley Act of 2002 (the Section 302 Certification). This section of the Quarterly Report, which you are currently reading is the information concerning the Controls Evaluation referred to in the Section 302 Certifications and this information should be read in conjunction with the Section 302 Certifications for a more complete understanding of the topics presented.
DISCLOSURE CONTROLS AND INTERNAL CONTROLS.
Disclosure Controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 (Exchange Act), such as this Quarterly Report, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's (SEC) rules and forms. Disclosure Controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. Internal Controls are procedures which are designed with the objective of providing reasonable assurance that (1) our transactions are properly authorized; (2) our assets are safeguarded against unauthorized or improper use; and (3) our transactions are properly recorded and reported, all to permit the preparation of our financial statements in conformity with generally accepted accounting principles. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives.
LIMITATIONS ON THE EFFECTIVENESS OF CONTROLS.
The Company's management, including the CEO and CFO, does not expect that our Disclosure Controls or our Internal Controls will prevent all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control.
The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed achieving its stated goals under all potential future conditions; over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
CONCLUSION
In accordance with SEC requirements, the CEO/CFO note that, as of the quarter ended September 30, 2010 covered by this report, there were material weaknesses in our Internal Controls.
• Policies and Procedures for the Financial Close and Reporting Process — Currently there are no policies or procedures that clearly define the roles in the financial close and reporting process. The various roles and responsibilities related to this process should be defined, documented, updated and communicated. Failure to have such policies and procedures in place amounts to a material weakness to the Company’s internal controls over its financial reporting processes.
10
• Representative with Financial Expertise — For the period ending September 30, 2010, the Company did not have a representative with the requisite knowledge and expertise to review the financial statements and disclosures at a sufficient level to monitor the financial statements and disclosures of the Company. Failure to have a representative with such knowledge and expertise amounts to a material weakness to the Company’s internal controls over its financial reporting processes.
• Adequacy of Accounting Systems at Meeting Company Needs — The accounting system in place at the time of the assessment lacks the ability to provide high quality financial statements from within the system, and there were no procedures in place or built into the system to ensure that all relevant information is secure, identified, captured, processed, and reported within the accounting system. Failure to have an adequate accounting system with procedures to ensure the information is secure and accurately recorded and reported amounts to a material weakness to the Company’s internal controls over its financial reporting processes.
• Segregation of Duties — Management has identified a significant general lack of definition and segregation of duties throughout the financial reporting processes. Due to the pervasive nature of this issue, the lack of adequate definition and segregation of duties amounts to a material weakness to the Company’s internal controls over its financial reporting processes.
In light of the foregoing, once we have the adequate funds, management plans to develop the following additional procedures to help address these material weaknesses:
• Since the last report BigSky has created an audit committee, furthermore, we plan to continue to create and refine a structure in which critical accounting policies and estimates are identified, and together with other complex areas, are subject to multiple reviews by accounting personnel. In addition, we plan to enhance and test our month-end and year-end financial close process. Additionally, our audit committee will increase its review of our disclosure controls and procedures. We also intend to develop and implement policies and procedures for the financial close and reporting process, such as identifying the roles, responsibilities, methodologies, and review/approval process. We believe these actions will remediate the material weaknesses by focusing additional attention and resources in our internal accounting functions. However, the material weaknesses will not be considered remediated until the applicable remedial controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.
PART 11 – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no legal proceedings to which BSPI or is a party or is subject, nor to the best of management’s knowledge are any material legal proceedings contemplated.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There have been no matters brought forth to the securities holders to vote upon during this quarter.
ITEM 5. OTHER INFORMATION
None
11
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) (3) Exhibits
The following exhibits are included as part of this report:
|
31.1
|
8650 SECTION 302 CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
|
|
32.1
|
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
|
Reports on Form 8-K
None
12
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.
|
BIGSKY PRODUCTIONS, INC.
|
|
|
(Registrant)
|
|
|
Date: November 22, 2010
|
/S/ ELLIS MARTIN
|
|
Chief Executive Officer, President and Director Chief Financial Officer, Chief Accounting Officer, and Director
|
|
13