Attached files
As filed with the Securities and Exchange Commission on December 2, 2011
Registration No. 333-173164
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-1/A
AMENDMENT NO. 5
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
REDSTONE LITERARY AGENTS INC.
(Exact name of registrant as specified in its charter)
Nevada
(State or other jurisdiction of incorporation)
7389
(Primary Standard Industrial Classification Code Number)
27-3098487
(IRS Employer Identification No.)
1842 E Campo Bello Drive
Phoenix, AZ 85022
Telephone (602)867-0160 Facsimile (602) 865-7313
(Address and telephone number of registrant's principal executive offices)
Mary S. Wolf, President
Redstone Literary Agents Inc.
1842 E Campo Bello Drive
Phoenix, AZ 85022
Telephone (602)867-0160 Facsimile (602) 865-7313
(Name, address and telephone number of agent for service)
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement is declared effective.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act Registration Statement number of the earlier effective
Registration Statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
Registration Statement number of the earlier effective Registration Statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
Registration Statement number of the earlier effective Registration Statement
for the same offering. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company.
Large accelerated filer [ ] Accelerated Filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if a Smaller reporting company)
CALCULATION OF REGISTRATION FEE
================================================================================
Title of Each Proposed Proposed
Class of Maximum Maximum
Securities Offering Aggregate Amount of
to be Amount to be Price Per Offering Registration
Registered Registered Share (1) Price Fee (2)
--------------------------------------------------------------------------------
Common Stock,
Shares 3,000,000 $0.015 $45,000 $5.22
================================================================================
(1) This is an initial offering and no current trading market exists for our
common stock. The offering price was arbitrarily determined by RedStone
Literary Agents Inc.
(2) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457 under the Securities Act of 1933, as amended (the "Securities
Act").
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SUCH SECTION 8(A), MAY DETERMINE.
================================================================================
REDSTONE LITERARY AGENTS INC.
PROSPECTUS
3,000,000 SHARES
COMMON STOCK AT $.015 PER SHARE
This is the initial offering of common stock of RedStone Literary Agents Inc.
and no public market currently exists for the securities being offered. We are
offering for sale a total of 3,000,000 shares of common stock at a fixed price
of $.015 per share for the duration of the offering. The offering is being
conducted on a self-underwritten, all-or-none basis, which means our officer and
director will attempt to sell the shares. This Prospectus will permit our
officer and director to sell the shares directly to the public, with no
commission or other remuneration payable to her for any shares she may sell. She
will sell the shares and intends to offer them to friends, relatives,
acquaintances and business associates. In offering the securities on our behalf,
she will rely on the safe harbor from broker-dealer registration set out in Rule
3a4-1 under the Securities and Exchange Act of 1934. We intend to open a
standard, non-interest bearing, bank checking account to be used only for the
deposit of funds received from the sale of the shares in this offering. If all
the shares are not sold and the total offering amount is not deposited by the
expiration date of the offering, the funds will be promptly returned to the
investors, without interest or deduction; however there is no assurance we will
be able to return the funds as we are not holding the money in a trust or
similar account and a creditor may be able to execute a judgment against the
funds. The shares will be offered at a fixed price of $.015 per share for a
period of one hundred and eighty (180) days from the effective date of this
prospectus, unless extended by our board of director for an additional 90 days.
The offering will end on __________, 2011 (date to be inserted in a subsequent
amendment).
Offering Price Proceeds to Company
Per Share Commissions Before Expenses
--------- ----------- ---------------
Common Stock $0.015 Not Applicable $45,000
Total $0.015 Not Applicable $45,000
RedStone Literary Agents Inc. is a development stage company and currently has
no operations. Any investment in the shares offered herein involves a high
degree of risk. You should only purchase shares if you can afford a loss of your
investment. Our independent auditor has issued an audit opinion for RedStone
Literary Agents Inc. which includes a statement expressing substantial doubt as
to our ability to continue as a going concern.
As of the date of this prospectus, our stock is presently not traded on any
market or securities exchange and there is no assurance that a trading market
for our securities will ever develop.
THE PURCHASE OF THE SECURITIES OFFERED THROUGH THIS PROSPECTUS INVOLVES A HIGH
DEGREE OF RISK. YOU SHOULD CAREFULLY READ AND CONSIDER THE SECTION OF THIS
PROSPECTUS ENTITLED "RISK FACTORS", BEGINNING ON PAGE 4, BEFORE BUYING ANY
SHARES OF OUR COMMON STOCK.
NEITHER THE U.S. SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED ___________, 2011
TABLE OF CONTENTS
Page No.
--------
SUMMARY OF PROSPECTUS 3
General Information 3
The Offering 3
RISK FACTORS 4
Risks Associated with our Business 4
Risks Associated with this Offering 5
USE OF PROCEEDS 7
DETERMINATION OF OFFERING PRICE 8
DILUTION 8
PLAN OF DISTRIBUTION 9
Offering will be Sold by Our Officer and Director 9
Terms of the Offering 9
Deposit of Offering Proceeds 10
Procedures and Requirements for Subscribing 10
DESCRIPTION OF SECURITIES TO BE REGISTERED 10
INTERESTS OF NAMED EXPERTS AND COUNSEL 11
DESCRIPTION OF BUSINESS 11
Executive Summary 11
Distribution Methods 14
Competitive Strengths and Strategy 14
Sources and Availability of Raw Materials 14
Dependence on one or a few Major Customers 14
Patents, Trademarks, Franchises, Concessions, Royalty 15
Need for Government Approval for Proposed Products or Services 15
Bankruptcy or Similar Proceedings 15
Reorganization, Purchase or Sale of Assets 15
Effects of Exisiting or Probable Government Regulation 15
Research and Development Costs during the Last Two Years 15
Costs and Effects of Compliance with Environmental Laws 15
Employees and Employment Agreements 15
DESCRIPTION OF PROPERTY 15
LEGAL PROCEEDINGS 15
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 15
REPORTS TO SECURITY HOLDERS 17
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 17
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS 23
EXECUTIVE COMPENSATION 24
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 26
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 27
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES
ACT LIABILITIES 27
AVAILABLE INFORMATION 27
FINANCIAL STATEMENTS 27
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE 27
2
REDSTONE LITERARY AGENTS INC.
1842 E Campo Bello Drive
Phoenix, AZ 85022
PROSPECTUS SUMMARY
AS USED IN THIS PROSPECTUS, UNLESS THE CONTEXT OTHERWISE REQUIRES, "WE," "US,"
"OUR," "THE COMPANY" AND "RLA" REFERS TO REDSTONE LITERARY AGENTS INC. THE
FOLLOWING SUMMARY IS NOT COMPLETE AND DOES NOT CONTAIN ALL OF THE INFORMATION
THAT MAY BE IMPORTANT TO YOU. YOU SHOULD READ THE ENTIRE PROSPECTUS BEFORE
MAKING AN INVESTMENT DECISION TO PURCHASE OUR COMMON STOCK.
GENERAL INFORMATION ABOUT OUR COMPANY
RedStone Literary Agents was incorporated in the State of Nevada on July 20,
2010. We were formed to represent and bring to market literary works and
represent authors in North America. We are a development stage company and have
not yet opened for business or generated any revenues. We have been issued a
"substantial doubt" going concern opinion from our auditors and our only asset
is $3,936 in cash in the bank, consisting of $9,230 in cash generated from the
issuance of shares to our founder and related party loans, less expenses.
Redstone Literary Agents intends to represent authors to publishers. We will
negotiate contract details and provide representation if any part of the book is
illegally reproduced. It is our intention to first focus in the genre of health
and wellness as we currently have relationships with some published and
unpublished authors in the United States.
Our administrative offices are currently located at the residence of our
President, Mary Wolf which she donates to us on a rent free basis at 1842 E
Campo Bello Drive, Phoenix Arizona, 85022. We have not leased an office yet but
once we are successful in publishing a few titles we may consider doing so. Our
registered statutory office is located at 375 N Stephanie St, Suite 1411,
Henderson, NV 89014-8909. Our fiscal year end is December 31st.
There is no current public market for our securities. As our stock is not
publicly traded, investors should be aware they probably will be unable to sell
their shares and their investment in our securities is not liquid.
THE OFFERING
The Issuer: RedStone Literary Agents Inc.
Securities Being Offered: 3,000,000 shares of common stock.
Price per Share: $0.015
Offering Period: The shares are offered for a period not to exceed
180 days, unless extended by our board of directors
for an additional 90 days.
Net Proceeds: $45,000
Securities Issued
and Outstanding: 3,000,000 shares of common stock were issued and
outstanding as of the date of this prospectus.
Registration Costs: We estimate our total offering registration costs
to be $6,700.
Risk Factors: See "Risk Factors" and the other information in
this prospectus for a discussion of the factors you
should consider before deciding to invest in shares
of our common stock.
3
RISK FACTORS
An investment in our common stock involves a high degree of risk. You should
carefully consider the risks described below and the other information in this
prospectus before investing in our common stock. If any of the following risks
occur, our business, operating results and financial condition could be
seriously harmed. The trading price of our common stock, when and if we trade at
a later date, could decline due to any of these risks, and you may lose all or
part of your investment.
RISKS ASSOCIATED WITH OUR BUSINESS
SINCE WE ARE A DEVELOPMENT STAGE COMPANY, HAVE GENERATED NO REVENUES AND LACK AN
OPERATING HISTORY, AN INVESTMENT IN THE SHARES OFFERED HEREIN IS HIGHLY RISKY
AND COULD RESULT IN A COMPLETE LOSS OF YOUR INVESTMENT IF WE ARE UNSUCCESSFUL IN
OUR BUSINESS PLANS.
Our company was incorporated on July 20, 2010; we have not yet commenced our
business operations; and we have not yet realized any revenues. We have no
operating history upon which an evaluation of our future prospects can be made.
Such prospects must be considered in light of the substantial risks, expenses
and difficulties encountered by new entrants into the highly competitive
literary agent industry. Our ability to achieve and maintain profitability and
positive cash flow is highly dependent upon a number of factors, including our
ability to attract and retain writers to represent and get their work edited and
to market for publishing, while keeping costs to a minimum. Based upon current
plans, we expect to incur operating losses in future periods as we incur
significant expenses associated with the initial startup of our business.
Further, we cannot guarantee that we will be successful in realizing revenues or
in achieving or sustaining positive cash flow at any time in the future. Any
such failure could result in the possible closure of our business or force us to
seek additional capital through loans or additional sales of our equity
securities to continue business operations, which would dilute the value of any
shares you purchase in this offering.
WE DO NOT YET HAVE ANY SUBSTANTIAL ASSETS AND ARE TOTALLY DEPENDENT UPON THE
PROCEEDS OF THIS OFFERING TO FULLY FUND OUR BUSINESS.
The only cash currently available is the cash paid by our founder for the
acquisition of her shares. In the event we do not sell all of the shares and
raise the total offering proceeds, there can be no assurance that we would be
able to raise the additional funding needed to fully implement our business
plans or that unanticipated costs will not increase our projected expenses for
the year following completion of this offering. Our auditors have expressed
substantial doubt as to our ability to continue as a going concern.
WE DO NOT HAVE ANY ADDITIONAL SOURCE OF FUNDING FOR OUR BUSINESS PLANS AND MAY
BE UNABLE TO FIND ANY SUCH FUNDING IF AND WHEN NEEDED.
Other than the shares offered by this prospectus, no other source of capital has
been has been identified or sought. As a result we do not have an alternate
source of funds should we fail to complete this offering. If we do find an
alternative source of capital, the terms and conditions of acquiring such
capital may result in dilution and the resultant lessening of value of the
shares of stockholders.
If we are not successful in raising sufficient capital through this offering, we
will be faced with several options:
1. abandon our business plans, cease operations and go out of business;
2. continue to seek alternative and acceptable sources of capital; or
3. bring in additional capital that may result in a change of control.
In the event of any of the above circumstances you could lose a substantial part
or all of your investment. In addition, there can no guarantee that the total
4
proceeds raised in this offering will be sufficient, as we have projected, to
fund our business plans or that we will be profitable. As a result, you could
lose any investment you make in our shares.
WE CANNOT PREDICT WHEN OR IF WE WILL PRODUCE REVENUES, WHICH COULD RESULT IN A
TOTAL LOSS OF YOUR INVESTMENT IF WE ARE UNSUCCESSFUL IN OUR BUSINESS PLANS.
Although we have had a few meetings with two authors to edit and represent their
work, we have not yet confirmed any representation contracts and have not yet
generated any revenues from operations. In order for us to continue with our
plans and open our business, we must raise our initial capital to do so through
this offering. The timing of the completion of the milestones needed to commence
operations and generate revenues is contingent on the success of this offering.
There can be no assurance that we will generate revenues or that revenues will
be sufficient to maintain our business. As a result, you could lose all of your
investment if you decide to purchase shares in this offering and we are not
successful in our proposed business plans.
OUR CONTINUED OPERATIONS DEPEND ON LITERARY TRENDS. IF OUR AUTHORS AND LITERARY
WORKS ARE NOT TRENDING TOPICS PUBLISHING HOUSES ARE LOOKING FOR THIS COULD BE
ADVERSELY AFFECTED.
The proper representation of trending and expert authors important to our
success and competitive position, and the inability to continue to develop and
offer such unique products to our customers could harm our business. We cannot
be certain that any author and his or her topic of literature will be in demand.
In addition, there are no assurances that our future authors will be successful,
and any unsuccessful literary representation could adversely affect our
business.
COMPETITION IN THE LITERARY INDUSTRY IS FIERCE. IF WE CAN NOT SUCCESSFULLY
COMPETE, OUR BUSINESS MAY BE ADVERSELY AFFECTED.
The literary publishing industry is intensely competitive and fragmented. We
will compete against a large number of well-established companies with greater
product and name recognition and with substantially greater financial, marketing
and distribution capabilities than ours, as well as against a large number of
small specialty producers. Our competitors include, by way of example, Wiley
Books, Fitzhenry Whiteside, Simon and Schuster and other well known and
respected publishers. There can be no assurance that we can compete successfully
in this complex and changing market. If we can not, our business will be
adversely affected.
BECAUSE OUR SOLE OFFICER AND/OR DIRECTOR HAS NO EXPERIENCE OR BACKGROUND IN
REPRESENTING AUTHORS OR IN THE LITERARY FIELD, THERE IS A HIGHER RISK OUR
BUSINESS WILL FAIL.
Our sole officer and director, Mary S. Wolf, has no experience or background in
representing authors or in the literary field. Her prior business experiences
have primarily been in manufacturing and tax accounting. With no direct training
or experience in the literary field, our management may not be fully aware of
the specific requirements related to working within this industry. Our
management's decisions and choices may not take into account standard procedures
or managerial approaches agents and literary companies commonly use.
Consequently, our operations, earnings, and ultimate financial success could
suffer irreparable harm due to management's lack of experience in this field.
RISKS ASSOCIATED WITH THIS OFFERING
BUYING LOW-PRICED PENNY STOCKS IS VERY RISKY AND SPECULATIVE.
The shares being offered are defined as a penny stock under the Securities and
Exchange Act of 1934, and rules of the Commission. The Exchange Act and such
penny stock rules generally impose additional sales practice and disclosure
requirements on broker-dealers who sell our securities to persons other than
certain accredited investors who are, generally, institutions with assets in
excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or
5
annual income exceeding $200,000, or $300,000 jointly with spouse), or in
transactions not recommended by the broker-dealer. For transactions covered by
the penny stock rules, a broker-dealer must make a suitability determination for
each purchaser and receive the purchaser's written agreement prior to the sale.
In addition, the broker-dealer must make certain mandated disclosures in penny
stock transactions, including the actual sale or purchase price and actual bid
and offer quotations, the compensation to be received by the broker-dealer and
certain associated persons, and deliver certain disclosures required by the
Commission. Consequently, the penny stock rules may affect the ability of
broker-dealers to make a market in or trade our common stock and may also affect
your ability to resell any shares you may purchase in this offering in the
public markets. See the Plan of Distribution section.
WE ARE SELLING THIS OFFERING WITHOUT AN UNDERWRITER AND MAY BE UNABLE TO SELL
ANY SHARES.
This offering is self-underwritten, that is, we are not going to engage the
services of an underwriter to sell the shares; we intend to sell them through
our officer and director, who will receive no commissions. She will hold
investment meetings and invite friends, acquaintances and relatives in an effort
to sell the shares to them; however, there is no guarantee that she will be able
to sell any of the shares. In the event she does not sell all of the shares
before the expiration date of the offering, all funds raised will be promptly
returned to the investors, without interest or deduction.
DUE TO THE LACK OF A TRADING MARKET FOR OUR SECURITIES, YOU MAY HAVE DIFFICULTY
SELLING ANY SHARES YOU PURCHASE IN THIS OFFERING.
There is presently no demand for our common stock. There is presently no public
market for the shares being offered in this prospectus. We intend to contact a
market maker and have them file an application on our behalf for quotation of
the shares on the Over-the-Counter Bulletin Board. We estimate this process to
take 3 to 6 months to complete. As of the date of this filing, there have been
no discussions or understandings between RLA and anyone acting on our behalf,
with any market maker regarding participation in a future trading market for our
securities. We cannot guarantee that the application will be approved and our
stock listed and quoted for sale. If no market is ever developed for our common
stock, it will be difficult for you to sell any shares you purchase in this
offering. In such a case, you may find that you are unable to achieve any
benefit from your investment or liquidate your shares without considerable
delay, if at all. In addition, if we fail to have our common stock quoted on a
public trading market, your common stock will not have a quantifiable value and
it may be difficult, if not impossible, to ever resell your shares, resulting in
an inability to realize any value from your investment.
YOU WILL INCUR IMMEDIATE AND SUBSTANTIAL DILUTION OF THE PRICE YOU PAY FOR YOUR
SHARES.
Our existing stockholder acquired her shares at a cost substantially less than
that which you will pay for the shares you purchase in this offering.
Accordingly, any investment you make in these shares will result in the
immediate and substantial dilution of the net tangible book value of those
shares from the $.015 you pay for them. Upon completion of the offering, the net
tangible book value of your shares will be $.007 per share, $.008 less than what
you paid for them.
WE WILL BE HOLDING ALL THE PROCEEDS FROM THE OFFERING IN A STANDARD BANK
CHECKING ACCOUNT UNTIL ALL THE SHARES ARE SOLD. BECAUSE THE PROCEEDS ARE NOT
HELD IN AN ESCROW OR TRUST ACCOUNT THERE IS A RISK YOUR MONEY WILL NOT BE
RETURNED IF ALL THE SHARES ARE NOT SOLD.
All funds received from the sale of shares in this offering will be deposited
into a standard bank checking account until all shares are sold and the offering
is closed, at which time, the proceeds will be transferred to our business
operating account. In the event all shares are not sold we have committed to
promptly return all funds to the original purchasers. However since the funds
will not be placed into an escrow, trust or other similar account, there can be
no guarantee that any third party creditor who may obtain a judgment or lien
against us would not satisfy the judgment or lien by executing on the bank
account where the offering proceeds are being held, resulting in a loss of any
investment you make in our securities.
6
WE WILL INCUR ONGOING COSTS AND EXPENSES FOR SEC REPORTING AND COMPLIANCE.
WITHOUT REVENUE WE MAY NOT BE ABLE TO REMAIN IN COMPLIANCE, MAKING IT DIFFICULT
FOR INVESTORS TO SELL THEIR SHARES, IF AT ALL.
Our business plan allows for the payment of the estimated $6,700 cost of this
registration statement to be paid from existing cash on hand. If necessary, our
director has verbally agreed to loan the Company funds to complete the
registration process. We plan to contact a market maker immediately following
the close of the offering to have the market maker file an application on our
behalf in order to make a market for our common stock and have the shares quoted
on the OTC Electronic Bulletin Board. To be eligible for quotation, issuers must
remain current in their filings with the SEC. In order for us to remain in
compliance we will require future revenues to cover the cost of these filings,
which could comprise a substantial portion of our available cash resources. If
we are unable to generate sufficient revenues to remain in compliance it may be
difficult for you to resell any shares you may purchase, if at all.
MARY WOLF, A COMPANY DIRECTOR, BENEFICIALLY OWNS 100% OF THE OUTSTANDING SHARES
OF OUR COMMON STOCK. AFTER THE COMPLETION OF THIS OFFERING SHE WILL OWN 50% OF
THE OUTSTANDING SHARES. IF SHE CHOOSES TO SELL HER SHARES IN THE FUTURE IT MAY
HAVE AN ADVERSE EFFECT OF THE PRICE OF OUR STOCK.
Due to the amount of Ms. Wolf's share ownership in our company, if she chooses
to sell her shares in the public market, the market price of our stock could
decrease and all shareholders suffer a dilution of the value of their stock. If
she does sell any of his common stock, she will be subject to Rule 144 under the
1933 Securities Act which will restrict her ability to sell her shares.
USE OF PROCEEDS
Assuming sale of all of the shares offered herein, of which there is no
assurance, the net proceeds from this offering will be $45,000. The proceeds are
expected to be disbursed, in the priority set forth below, during the first
twelve (12) months after the successful completion of the offering:
Planned Expenditures Over
Category The Next 12 Months
-------- ------------------
Advertising & Marketing $13,500
Website Design $ 6,000
Equipment $ 2,500
Accounting, Auditing & Legal $10,500
Office & Administration $ 7,500
Working Capital $ 5,000
-------
TOTAL PROCEEDS TO COMPANY $45,000
=======
We will establish a separate bank account and all proceeds will be deposited
into that account until the total amount of the offering is received and all
shares are sold, at which time the funds will be released to us for use in our
operations. In the event we do not sell all of the shares before the expiration
date of the offering, all funds will be returned promptly to the subscribers,
without interest or deduction. There is no assurance we will be able to return
the funds as we are not holding the money in a trust or similar account and a
creditor may be able to execute a judgment against the funds. If necessary our
director has verbally agreed to loan the Company funds to complete the
registration process but we will require full funding to implement our complete
business plan. The offering expenses, estimated to be $6,700, may properly be
deferred and charged against the gross proceeds of the offering per ASC
340-10-S99-1 however; the Company has elected to record and pay the offering
expenses as they are incurred.
7
DETERMINATION OF OFFERING PRICE
The offering price of the shares has been determined arbitrarily by us. The
price does not bear any relationship to our assets, book value, earnings, or
other established criteria for valuing a privately-held company. In determining
the number of shares to be offered and the offering price, we took into
consideration our cash on hand and the amount of money we would need to
implement our business plans. Accordingly, the offering price should not be
considered an indication of the actual value of the securities.
DILUTION
Dilution represents the difference between the offering price and the net
tangible book value per share immediately after completion of this offering. Net
tangible book value is the amount that results from subtracting total
liabilities and intangible assets from total assets. Dilution arises mainly as a
result of our arbitrary determination of the offering price of the shares being
offered. Dilution of the value of the shares you purchase is also a result of
the lower book value of the shares held by our existing shareholders.
As of June 30, 2011, the net tangible book value of our shares was $1,436 or
$.0005 per share, based upon 3,000,000 shares outstanding.
Upon completion of this offering, but without taking into account any change in
the net tangible book value after completion of this offering other than that
resulting from the sale of the shares and receipt of the total proceeds of
$45,000 and payment of the unpaid expenses of $2,000 associated with the
offering, the net tangible book value of the 6,000,000 shares to be outstanding
will be $44,436, or approximately $.007 per share. Accordingly, the net tangible
book value of the shares held by our existing stockholder (3,000,000 shares)
will be increased by $.007 per share without any additional investment on her
part. The purchasers of shares in this offering will incur immediate dilution (a
reduction in the net tangible book value per share from the offering price of
$.015 (per share) of $.008 per share. As a result, after completion of the
offering, the net tangible book value of the shares held by purchasers in this
offering would be $.007 per share, reflecting an immediate reduction in the
$.015 price per share they paid for their shares. After completion of the
offering, the existing shareholder will own 50% of the total number of shares
then outstanding, for which she will have made an investment of $15,000 or $.005
per share. Upon completion of the offering, the purchasers of these shares
offered hereby will own 50% of the total number of shares then outstanding, for
which they will have made a cash investment of $45,000, or $.015 per share.
The following table illustrates the per share dilution to the new investors:
Public Offering Price Per Share $ .015
Net Tangible Book Value Prior to this Offering $ .0005
Net Tangible Book Value After Offering $ .007
Immediate Dilution per Share to New Investors $ .008
The following table summarizes the number and percentages of shares purchased,
the amount and percentage of consideration paid and the average price per share
paid by our existing stockholder and by new investors in this offering, the
investment by the existing stockholder includes a subscription receivable of
$5,000:
Total
Price Number of Percent of Consideration
Per Share Shares Held Ownership Paid
--------- ----------- --------- ----
Existing
Shareholder $.005 3,000,000 50% $15,000
Investors in
this Offering $.015 3,000,000 50% $45,000
8
PLAN OF DISTRIBUTION
INVESTORS SHOULD BE AWARE THAT THERE IS CURRENTLY NO MARKET FOR ANY OF OUR
SHARES. WE CANNOT ASSURE YOU THAT THE SHARES OFFERED WILL HAVE A MARKET VALUE,
OR THAT THEY CAN BE RESOLD AT THE OFFERED PRICE IF AND WHEN AN ACTIVE SECONDARY
MARKET MIGHT DEVELOP. THERE IS ALSO NO ASSURANCE THAT IF A PUBLIC MARKET FOR OUR
SECURITIES IS EVER DEVELOPED THAT IT COULD BE SUSTAINED.
OFFERING WILL BE SOLD BY OUR OFFICER AND DIRECTOR
This is a self-underwritten offering. This prospectus permits our officer and
director to sell the shares directly to the public, with no commission or other
remuneration payable to her for any shares she may sell. There are no plans or
arrangement to enter into any contracts or agreements to sell the shares with a
broker or dealer. Our officer and director, Mary Wolf, will sell the shares and
intends to offer them to friends, relatives, acquaintances and business
associates. In offering the securities on our behalf, she will rely on the safe
harbor from broker dealer registration set out in Rule 3a4-1 under the
Securities Exchange Act of 1934.
Ms. Wolf will not register as a broker-dealer pursuant to Section 15 of the
Securities Exchange Act of 1934, in reliance upon Rule 3a4-1, which sets forth
those conditions under which a person associated with an Issuer may participate
in the offering of the Issuer's securities and not be deemed to be a
broker-dealer.
a. Our officer/director was not subject to a statutory disqualification,
as that term is defined in Section 3(a)(39) of the Act, at the time of
her participation; and,
b. Our officer/director will not be compensated in connection with her
participation by the payment of commissions or other remuneration
based either directly or indirectly on transaction in securities; and
c. Our officer/director is not, nor will she be at the time of her
participation in the offering, an associated person of a
broker-dealer; and
d. Our officer/director meets the conditions of paragraph (a)(4)(ii) of
Rule 3a4-1 of the Exchange Act, in that she (A) primarily performs or
is intended primarily to perform at the end of the offering,
substantial duties for or on behalf of our company, other than in
connection with transactions in securities; and (B) is not a broker or
dealer, or been an associated person of a broker or dealer, within the
preceding twelve months; and (C) has not participated in selling and
offering securities for any Issuer more than once every twelve months
other than in reliance on Paragraphs (a)(4)(i) or (a) (4)(iii).
Ms. Wolf, who will be offering the securities, may be deemed to be an
underwriter of this offering within the meaning of that term as defined in
Section 2(11) of the Securities Act of 1933, as amended. She intends to find
purchasers by discussing this offering with past and present friends and
business associates, as well as the friends and business associates of friends
and business associates. A copy of this prospectus will be provided to any
prospective investor.
Our officer, director, control person and affiliates of same do not intend to
purchase any shares in this offering.
TERMS OF THE OFFERING
The shares will be sold at the fixed price of $.015 per share until the
completion of this offering. There is no minimum amount of subscription required
per investor, and subscriptions, once received, are irrevocable.
9
This offering will commence on the date of this prospectus and will continue for
a period of 180 days (the "Expiration Date"), unless extended by our Board of
Directors for an additional 90 days.
DEPOSIT OF OFFERING PROCEEDS
This is an "all or none" offering and, as such, we will not be able to spend any
of the proceeds unless all the shares are sold and all proceeds are received. We
intend to hold all funds collected from subscriptions in a separate bank account
until the total amount of $45,000 has been received. At that time, the funds
will be transferred to our business account for use in implementation of our
business plan. In the event the offering is not sold out prior to the Expiration
Date, all money will be promptly returned to the investors, without interest or
deduction. We determined the use of the standard bank account was the most
efficient use of our current limited funds. There is no assurance we will be
able to return the funds as we are not holding the money in a trust or similar
account and a creditor may be able to execute a judgment against the funds.
Please see the "Risk Factors" section to read the related risk to you as a
purchaser of any shares.
PROCEDURES AND REQUIREMENTS FOR SUBSCRIPTION
If you decide to subscribe to any shares in this offering, you will be required
to execute a Subscription Agreement and tender it, together with a check or bank
money order made payable to RedStone Literary Agents Inc. Subscriptions, once
received by the Company, are irrevocable.
DESCRIPTION OF SECURITIES
COMMON STOCK
Our Articles of Incorporation authorizes the issuance of 75,000,000 shares of
common stock, $0.001 par value per share. The holders of our common stock:
* have equal ratable rights to dividends from funds legally available if
and when declared by our board of directors;
* are entitled to share ratably in all of our assets available for
distribution to holders of common stock upon liquidation, dissolution
or winding up of our affairs;
* do not have preemptive, subscription or conversion rights and there
are no redemption or sinking fund provisions or rights; and
* are entitled to one non-cumulative vote per share on all matters on
which stockholders may vote.
NON-CUMULATIVE VOTING
Holders of shares of our common stock do not have cumulative voting rights,
which means that the holders of more than 50% of the outstanding shares, voting
for the election of directors, can elect all of the directors to be elected, if
they so choose, and, in that event, the holders of the remaining shares will not
be able to elect any of our directors. The current officer and director owns
100% of our outstanding shares.
CASH DIVIDENDS
As of the date of this prospectus, we have not paid any cash dividends to
stockholders. The declaration of any future cash dividend will be at the
discretion of our board of directors and will depend upon our earnings, if any,
our capital requirements and financial position, our general economic
conditions, and other pertinent conditions. It is our present intention not to
pay any cash dividends in the foreseeable future, but rather to reinvest
earnings, if any, in our business operations.
REPORTS
We are not required to furnish you with an annual report. We will be required to
file reports with the SEC under section 15(d) of the Securities Act upon
effectiveness of the registration statement. The reports will be filed
10
electronically. The reports we will be required to file are on forms 10-K, 10-Q,
and 8-K. You may read copies of any materials we file with the SEC at the SEC's
Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. You may
obtain information on the operation of the Public Reference Room by calling the
SEC at 1-800-SEC-0330. The SEC also maintains an Internet site that will contain
copies of the reports we file electronically. The address for the Internet site
is www.sec.gov.
INTEREST OF NAMED EXPERTS AND COUNSEL
None of the below described experts or counsel have been hired on a contingent
basis and none of them will receive a direct or indirect interest in the
Company.
The Law Office of Dennis Brovarone, P.C. has passed upon the validity of the
shares being offered in connection with this offering.
Our audited financial statement for the period from inception to December 31,
2010, included in this prospectus has been audited by Ronald R. Chadwick, P.C.
We include the financial statements in reliance on their report, given upon
their authority as experts in accounting and auditing.
DESCRIPTION OF OUR BUSINESS
EXECUTIVE SUMMARY
RedStone Literary Agents Inc. ("RLA") was incorporated in Nevada on July 20,
2010 and is considered a development stage company. At that time Mary Wolf was
appointed CEO, President, Secretary, CFO, Treasurer and Director. The Board
voted to seek capital and begin development of our business plan. We received
our initial funding of $15,000 through the sale of common stock to Mary Wolf who
purchased 3,000,000 shares of our Common Stock at $0.005 per share on July 20,
2010.
The company does not consider itself to be a blank check company as defined in
Rule 419 of Regulation C of the Securities Act of 1933. The company has a
specific business plan and is seeking the funds to execute its business plan.
Rule 419 of Regulation C promulgated under the Securities Act of 1933 applies to
companies having no specific business plans other than to engage in a merger or
acquisition with an unidentified company or companies, or other entity. We do
not anticipate or intend to be used as a vehicle for a reverse merger or merge
with or acquire another company in the foreseeable future. We are aggressively
pursuing our business plan given the current financial status of the company and
the fact that we were very recently incorporated. The corporation was formed for
the purpose of executing a specific business plan developed by our founder, Mary
S. Wolf, as set forth in the prospectus. We are moving forward with our
development as defined in the business plan. Based upon the above, we believe we
are not within the scope of Rule 419.
PRINCIPAL PRODUCTS OR SERVICES AND THEIR MARKETS
RLA intends to represent authors to publishers. RLA will negotiate contract
details and provide representation if any part of the book is illegally
reproduced. RLA will be selective about who they will represent, and it is
usually helpful for an author to be referred by people who work in or are
familiar with the publishing industry.
It is our intention to first focus in the genre of health and wellness as we
currently have relationships with some published and unpublished authors in the
United States.
11
NEEDS ASSESSMENT
The process for getting literary work published can be an arduous one for some
authors. For each author under contract we will conduct a "Needs Assessment" to
determine who else may already exist in the category of literature. From there
we will determine the feasibility of making the new title a success. In
addition, sending the completed manuscript to the right publisher is extremely
important. Valuable time can be wasted by sending manuscripts to publishers who
are not publishing in that genre. This is why a proper "Needs Assessment" is
essential. We will determine which publisher is best suited for the manuscript
and which publishers are publishing material that is similar to the author by
visiting bookstores. Bookstore shelves offer a wealth of information, including
the books the author will be competing against, how popular the genre is, and
which publishers are involved in the market. Similar information can usually be
found online (publishers' websites and online bookstores). It is probably the
most important aspect of the entire process.
BOOK PROPOSAL GUIDELINES
The most important aspect of a manuscript submission to publishers is the book
proposal. The author needs to prepare a carefully detailed and compelling
proposal to convince a publisher that his or her book is worth publishing. The
proposal is valuable in negotiating a good sale by allowing publishers to
evaluate the project quickly and to determine their ability to market the book
successfully. The proposal represents the promise of a book; it must be
distinctive and engaging so that the editor becomes enthusiastic about signing
the project. The difference between a good proposal and an excellent one can
determine whether an offer is received - and can make the difference between a
modest advance and a large one.
Every book is unique, but almost every proposal contains the elements listed
below:
ABOUT THE BOOK
We will prepare a brief (three to five pages) overview and introduction to the
project. This section contains the information that would be used in the jacket
copy, book synopsis and market survey.
We will describe the reasons an author was inspired to write the book and what
makes it valuable. We will be sure to explain what makes the book different from
other, similar books and mention any special features or approaches offered.
The author will give a two or three paragraph synopses of the contents,
illustrating in detail the logic his or her book follows to satisfy its premise.
Addtionally, he or she will explain why he or she as an author is uniquely
qualified to write this book. Included will be relevant experience and
credentials, as well as any supporting professional expertise or publishing
credits.
MARKET & COMPETITION
We will address who is the audience for this book, and why they need to buy this
book, including providing demographic data that reinforces the writer's
hypothesis.
We will address the competition. List each title that would be in direct
competition with the book, along with the author, publisher, and year of
publication. We will explain why the book would be better, or how it fills a
vacant niche in the market.
CHAPTER OUTLINE
We will provide a brief chapter-by-chapter outline of the book. Here we try to
convey both the content and tone of each chapter succinctly. Where possible, we
use quotations, anecdotes and examples to describe the chapters.
12
SAMPLE CHAPTER
We will include one or two sample chapters, preferably not the introduction or
first chapter, to give the publisher an idea of the writing style and the actual
content of the book.
PUBLISHING DETAILS
We will describe the physical form the Author plans for his/her book.
Included will be:
* Proposed book length, measured in words
* The number and type of photographs and/or illustrations to be used
* Any special considerations for book size, format, design or layout
* Estimated time the author will need to deliver the completed
manuscript.
ABOUT THE AUTHOR
The author will provide a detailed biography of him or herself, with emphasis on
background experience in the respective field and credentials relevant to his or
her book. If applicable, we will suggest attaching a copy of his or her resume
or curriculum vitae.
The goal for any author who comes to RedStone Literary Agents is to get their
work in front of potential publishing houses for commercialization. In order to
do that certain milestones will have to be achieved to ensure the
marketabilityand appeal for the title is optimized.
1. Conduct Genre Audit: It is imperative to know who has published work on the
topic at hand before. Questions to be asked will focus on geographical regions,
metrics on volume and retail feedback. Additionally, the audit will include what
modalities were used to promote the book online and offline. This process will
be done on a fee for service basis as some genres will require more research
time and analysis.
2. Synopses of current work will have to be edited and put in a marketing
context for procuring potential publishers. This will be done on an hourly fee
with a 25% top up on any fees paid to the editing team.
3. Once work is placed and represented with a publisher, RedStone will take 25%
of the advance fee paid to an author as placement fee.
4. RedStone will also negotiate an allowance to be paid for PR representation to
promote the launch of the book on and offline.
To date two authors have been approached in the lifestyle and wellness category.
Both have self-published work previously and are looking to obtain
representation for current draft manuscripts. These authors have been brought
forward to RedStone through a PR contact that has successfully represented this
genres and her work resulted in best seller placements. Contracts for both
authors are expected to be confirmed by late summer or early fall 2011. We will
also use social media to promote our services for representation on Twitter and
Facebook.
Sample Revenue Model with 3 Authors being represented:
Utilizing an average retail price of each book at $9.95, revenue breakdown would
be:
$1.95 to author
$4.00 to marketing/promotion
$1.00 for printing collateral
$3.00 Net Royalty Fee to RedStone
13
Selling an average 20,000 Books at $3.00 per copy (Net Royalty Fee) = $60,000
per author
Total Anticipated Revenue to Redstone: $180,000
The revenue numbers are estimates and there is no guarantee that we would be
able to sign 3 authors or that the books would sell at the price and quantity
being quoted due to external factors out of our control.
Management believes we will need to sign a minumum of 4 authors per year to be
profitable. Each contract would be for a period of 18 months, 6 months for the
author to write the book and 12 months for the promotional period. At any given
time we would then have a minimum of 4 to 6 authors under contract.
DISTRIBUTION METHODS OF THE PRODUCTS OR SERVICES
Once a book has been published it will need a Distributor. If we use an
established publishing house they will already have distribution contacts. If we
choose to self-publish or publish with a very small house that does not have
distribution set up, we will work with the author to make this contact.
Distributors will generally take 55-65% of the cover price (40% of which is
going to the bookseller). We will work with the author to make sure their
pricing formula has taken this into account.
ENGAGING A PR CAMPAIGN:
All Publicists know that the first step to obtaining good publicity is the media
list. Knowing where to mail review copies and having the full contact
information for follow-up calls and letters is vitally important. Many
publishers have a publicity department that will handle this while the book is
on the front list. However, once the next season is published, or we have
self-published the book, the job of getting publicity exposure for the book
falls to the authors themselves. In some cases we may engage a publicist to keep
the interest in relevant markets going.
Once we have our contacts in order, we will have to start writing press releases
and dealing with the media. This is a very different process than that of
writing a book.
STATUS OF ANY PUBLICLY ANNOUNCED NEW PRODUCT OR SERVICE
None.
COMPETITION, COMPETITIVE POSITION IN THE INDUSTRY AND METHODS OF COMPETITION
Getting a literary agent can be the first vital step towards getting published.
Writers who want to become authors are interested in one thing only and that is
writing. They do not want to worry about how or what is involved in the process
that eventually leads to getting their work published and in bookstores for the
masses to engage and enjoy. We believe also that since we have chosen a niche
(health and wellness) that we can be very focused in our submissions and
targeting the right distributor/publisher.
Additionally, non-published writers have a more difficult time getting the
attention of the bigger literary agent as often they already represent an author
in the said genre.
SOURCES AND AVAILABILITY OF RAW MATERIALS AND THE NAMES OF PRINCIPAL SUPPLIERS
We do not rely on any "real" raw materials to speak of as the marketable part of
our work will be the literature which will be representing. We plan to outsource
all of our editing and publicity work to third parties. Currently, we have not
retained editing personnel but we have retained The Marquis Group, LLC as Public
Relations Agent for RLA.
14
DEPENDENCE ON ONE OR A FEW MAJOR CUSTOMERS
We feel that, because of the potential wide base of customers for our products,
there will be no problem with dependence on one or few major customers.
PATENTS, TRADEMARKS, LICENSES, FRANCHISES, CONCESSIONS, ROYALTY AGREEMENTS OR
LABOR CONTRACTS
We currently have no patents or trademarks for our products or brand name;
however, as business is established and operations expand, we may seek such
protection. We act as Agents for our writers and so have limited rights and
access to published work while retained under contract.
NEED FOR ANY GOVERNMENT APPROVAL OF PRINCIPAL PRODUCTS OR SERVICES
None.
BANKRUPTCY OR SIMILAR PROCEEDINGS
There has been no bankruptcy, receivership or similar proceeding.
REORGANIZATION, PURCHASE OR SALE OF ASSETS
There have been no material reclassifications, mergers, consolidations, or
purchase or sale of a significant amount of assets not in the ordinary course of
business.
EFFECT OF EXISTING OR PROBABLE GOVERNMENTAL REGULATIONS ON THE BUSINESS
None.
RESEARCH AND DEVELOPMENT ACTIVITIES DURING THE LAST TWO YEARS
We have not expended funds for research and development costs since inception.
COSTS AND EFFECTS OF COMPLIANCE WITH ENVIRONMENTAL LAWS
None.
NUMBER OF TOTAL EMPLOYEES AND NUMBER OF FULL TIME EMPLOYEES
We currently have one employee, Ms. Mary Wolf who devotes full time to our
business.
DESCRIPTION OF PROPERTY
We do not currently own any property. We are currently operating out of the
premises of our President on a rent free basis while we are in the
organizational stage. We consider our current principal office space arrangement
adequate and will reassess our needs based upon the future growth of the
Company.
LEGAL PROCEEDINGS
We are not involved in any pending legal proceeding nor are we aware of any
pending or threatened litigation against us.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
No public market currently exists for shares of our common stock. Following
completion of this offering, we intend to contact a market maker and have them
file an application on our behalf for quotation of the shares on the
Over-the-Counter Bulletin Board. We estimate this process to take 3 to 6 months
to complete. As of the date of this filing, there have been no discussions or
understandings between RLA and anyone acting on our behalf, with any market
maker regarding participation in a future trading market for our securities.
15
PENNY STOCK RULES
The Securities and Exchange Commission has also adopted rules that regulate
broker-dealer practices in connection with transactions in penny stocks. Penny
stocks are generally equity securities with a price of less than $5.00 (other
than securities registered on certain national securities exchanges or quoted on
the FINRA system, provided that current price and volume information with
respect to transactions in such securities is provided by the exchange or
system).
A purchaser is purchasing penny stock which limits the ability to sell the
stock. The shares offered by this prospectus constitute penny stock under the
Securities and Exchange Act of 1934. The shares will remain penny stocks for the
foreseeable future. The classification of penny stock makes it more difficult
for a broker-dealer to sell the stock into a secondary market, which makes it
more difficult for a purchaser to liquidate his/her investment. Any
broker-dealer engaged by the purchaser for the purpose of selling his or her
shares in us will be subject to Rules 15g-1 through 15g-10 of the Securities and
Exchange Act of 1934. Rather than creating a need to comply with those rules,
some broker-dealers will refuse to attempt to sell penny stock.
The penny stock rules require a broker-dealer, prior to a transaction in a penny
stock not otherwise exempt from those rules, to deliver a standardized risk
disclosure document, which:
- contains a description of the nature and level of risk in the market
for penny stock in both public offerings and secondary trading;
- contains a description of the broker's or dealer's duties to the
customer and of the rights and remedies available to the customer with
respect to a violation of such duties or other requirements of the
Securities Act of 1934, as amended;
- contains a brief, clear, narrative description of a dealer market,
including "bid" and "ask" price for the penny stock and the
significance of the spread between the bid and ask price;
- contains a toll-free telephone number for inquiries on disciplinary
actions;
- defines significant terms in the disclosure document or in the conduct
of trading penny stocks; and
- contains such other information and is in such form (including
language, type, size and format) as the Securities and Exchange
Commission shall require by rule or regulation.
The broker-dealer also must provide, prior to effecting any transaction in a
penny stock, to the customer:
- the bid and offer quotations for the penny stock;
- the compensation of the broker-dealer and its salesperson in the
transaction;
- the number of shares to which such bid and ask prices apply, or other
comparable information relating to the depth and liquidity of the
market for such stock; and
- monthly account statements showing the market value of each penny
stock held in the customer's account.
In addition, the penny stock rules require that prior to a transaction in a
penny stock not otherwise exempt from those rules; the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written acknowledgment of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitability statement.
These disclosure requirements will have the effect of reducing the trading
16
activity in the secondary market for our stock because it will be subject to
these penny stock rules. Therefore, stockholders may have difficulty selling
their securities.
REGULATION M
Our officer and director, who will offer and sell the shares, is aware that she
is required to comply with the provisions of Regulation M promulgated under the
Securities Exchange Act of 1934, as amended. With certain exceptions, Regulation
M precludes officers and directors, sales agents, any broker-dealer or other
person who participate in the distribution of shares in this offering from
bidding for or purchasing, or attempting to induce any person to bid for or
purchase any security which is the subject of the distribution until the entire
distribution is complete.
STOCK TRANSFER AGENT
The Company's stock transfer agent is Holladay Stock Transfer.
REPORTS TO SECURITY HOLDERS
Upon effectiveness of the registration statement, of which this prospectus is a
part, will be subject to certain reporting requirements by the U.S. Securities
and Exchange Commission (SEC) and will furnish annual financial reports to our
stockholders, certified by our independent accountants, and will furnish
un-audited quarterly financial reports in our quarterly reports filed
electronically with the SEC. All reports and information filed by us can be
found at the SEC website, www.sec.gov.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
We have generated no revenue since inception and have incurred $8,564 in
expenses through June 30, 2011. The following table provides selected financial
data about our company for the period from the date of incorporation through
June 30, 2011. For detailed financial information, see the financial statements
included in this prospectus.
Balance Sheet Data: 6/30/2011
------------------- ---------
Cash $3,936
Total assets $3,936
Total liabilities $2,500
Subscription Receivable $5,000
Shareholders' equity $1,436
Other than the shares offered by this prospectus, no other source of capital has
been identified or sought. If we experience a shortfall in operating capital
prior to funding from the proceeds of this offering, our director has verbally
agreed to advance the Company funds to complete the registration process.
GOING CONCERN
Our auditor has issued a going concern opinion. This means that there is
substantial doubt that we can continue as an on-going business for the next
twelve months unless we obtain additional capital to pay our bills. This is
because we have not generated revenues and no revenues are anticipated until we
begin selling our services. There is no assurance we will ever reach that point.
Our current cash balance is $3,936, with $2,500 in outstanding liabilities and
$5,000 in share subscription receivable. We believe our cash balance is
sufficient to fund our limited levels of operations until we receive funding, at
this time we estimate the costs to be $3,500, consisting of general
administrative costs for the next three months. If we experience a shortage of
17
funds prior to funding we may utilize funds from our director, who has
informally agreed to advance funds to allow us to pay for offering costs, filing
fees, and professional fees; however she has no formal commitment, arrangement
or legal obligation to advance or loan funds to the Company and there is
currently no limit on the amount of funds she has informally agreed to loan to
the Company. In order to achieve our business plan goals, we will need the
funding from this offering. We are a development stage company and have
generated no revenue to date. We have sold $15,000 in equity securities to pay
for our minimum level of operations.
PLAN OF OPERATION
The following criteria for the milestones are based on estimates derived from
research and marketing data accumulated by our director. They are estimates
only. We will require the funding from our offering in order to fully implement
our business plan. The following chart outlines how we plan to use the proceeds
from the offering.
Planned Expenditures Over
Category The Next 12 Months
-------- ------------------
Advertising & Marketing $13,500
Website Design $ 6,000
Equipment $ 2,500
Accounting, Auditing & Legal $10,500
Office & Administration $ 7,500
Working Capital $ 5,000
-------
TOTAL PROCEEDS TO COMPANY $45,000
=======
The milestones for the twelve months following funding are:
FIRST QUARTER
We will produce executed contracts with the two authors who have asked us to
work with them in editing book outlines and direct the creation of manuscripts
in order to commercialize a publishing contract. In other words once we have a
manuscript synopsis and outline this will allow us to speak to potential
publishing houses in North America to secure a publishing contract for our
contracted authors. Author bios will be completed as well as headshots and
chapter outlines for each author. The Website for the company will be designed
and written to reflect service and genres of focus. We will also be securing
freelance editors to work with each author to complete chapter outlines and
synopsis of book.
We will complete the website for RedStone Literary Agents LLC. This site will in
addition to showing scope of service will also promote the two authors under
contract. The site will give a sampling from a few chapters of their work. In
addition, we will begin researching literary shows to attend in order to bid
publishing deals. These shows will also serve as a vehicle to secure additional
representation of other up and coming authors. We will investigate industry
groups to subscribe to like the Association of Authors Representatives Inc. We
will conduct interviews to hire a Publicist to give Authors advance promotion.
If resources are available, it would be strategic to attend Book Expo America in
New York (May 23-26). We believe the Book Expo will show us the leading genres
that book publishers are currently sourcing. As well, other agents will be
looking for some other regional agents to assist with PR and also speaking
engagements for new releases. If funding is not available we will find another
similar trade show to attend later in the year.
(Estimated expenses: Advertising and Marketing $4,000, Website Design $4,000,
Accounting, Auditing & Legal $2,500, Office & Administration $1,500, Working
Capital $1,250 - Total $13,250)
18
SECOND QUARTER
If resources are available we will hire a part time assistant who will be
responsible for many aspects of our operation, from administration to book title
procurement. A book selling strategy will be agreed upon to find the right
publisher in order to negotiate successful publishing deals. We will engage in a
search engine optimization campaign to assist us with awareness for our authors.
Search engine optimization (SEO) is the process of improving the visibility of a
website or a web page in search engines via the "natural" or un-paid search
results. In general, the earlier (or higher on the page), and more frequently a
site appears in the search results list, the more visitors it will receive from
the search engine's users. As an Internet marketing strategy, SEO considers how
search engines work, what people search for, the actual search terms typed into
search engines and which search engines are preferred by their targeted
audience. Optimizing a website may involve editing its content and HTML and
associated coding to both increase its relevance to specific keywords and to
remove barriers to the indexing activities of search engines. If an author is
looking for a literary agent it is likely that they will either look for this
via contacts in the industry or through conducting a search on the internet. A
SEO campaign would assist RedStone in attracting incremental business.
In addition we will launch with a PR campaign consisting of various lectures and
radio interviews to help brand each author and promote content of book. The area
of focus for our literary agency will be to focus on authors in the field of
health and wellness.
Chapter outlines and book manuscripts should be completed for both authors
represented. A campaign will also take place to continue to secure additional
authors. This will be an ongoing task to keep feelers out to prospective authors
looking to publish his or her work. We need to launch a networking strategy in
order to find places which RedStone can make contact with more publishers and
editors. These include conferences, workshops, seminars both online and in
person. As a back up we also need to plan a strategy for self-publishing that
would include an investor package for funding.
(Estimated expenses: Advertising and Marketing $2,000, Website Design $2,000,
Equipment $2,500, Accounting, Auditing & Legal $2,500, Office & Administration
$2,000, Working Capital $1,250 - Total $12,250)
THIRD QUARTER
Final edits to take place for manuscripts in order to secure publishing
contracts. We will be sourcing retails contacts to ensure distribution to lineup
with PR Campaigns. Retail contacts will be comprised of both offline and online
retailers. For example, we will look to secure books to be downloaded via Itunes
or purchased at Barnes and Noble. Both outlets provide a retail connection for
consumers to purchase the book titles.
(Estimated expenses: Advertising and Marketing $4,000, Accounting, Auditing &
Legal $2,500, Office & Administration $2,000, Working Capital $1,250 - Total
$9,750)
FOURTH QUARTER
A PR campaign for completed manuscript Authors will still extend to radio and
seminars in regional areas. As we procure more authors the process of going from
outlines, edit and manuscript rotate with networking and PR support. An author
would appear on various regional media outlets to not only share the new book
but also share that he or she will be speaking in the area at a specific
location. For example, if one of our titles is written by a Cardiologist on the
topic of heart disease we would have him or her on media outlets to talk about
the new book and also share that Dr. XYZ will be having a seminar at location AA
and it is open to the public. Typically speaking events result in increased
awareness and incremental book sales. Books would also be on sale at the
seminar.
(Estimated expenses: Advertising and Marketing $3,500, Accounting, Auditing &
Legal $3,000, Office & Administration $2,000, Working Capital $1,250 - Total
$9,750)
19
Our continued operations depend on literary trends. If our authors and literary
works are not trending topics publishing houses are looking for this could
adversely affect our business. The proper representation of trending and expert
authors important to our success and competitive position, and the inability to
continue to develop and offer such unique products to our customers could harm
our business. We cannot be certain that any author and his or her topic of
literature will be in demand. In addition, there are no assurances that our
future authors will be successful, and any unsuccessful literary representation
could adversely affect our business.
Competition in the literary industry is fierce. If we can not successfully
compete, our business may be adversely affected. If we are able to establish our
business we will compete against a large number of well-established companies
with greater product and name recognition and with substantially greater
financial, marketing and distribution capabilities than ours, as well as against
a large number of small specialty producers. There can be no assurance that we
can compete successfully in this complex and changing market.
CURRENT MARKET TRENDS
Management believes E-Books are becoming a larger and larger revenue stream for
book publishers. Without a doubt, the e-book is the biggest thing that's hit the
publishing industry since the invention of movable type. Publishers and e-book
resellers are reporting astronomical growth.
1. Enhanced E-Books Are Coming and Will Only Get Better
Consumers have already shown that they love e-books for their convenience and
accessibility, but ultimately most e-books today are the same as print, just in
digital form. The e-book of the not-too-distant future will be much more than
text. Interactivity has arrived and will change the nature of the e-book.
Whether a consumer's choice is Kindle or iPad, Management believes the war of
devices soon will not matter as many will have the same titles to offer
consumers for sale and enjoyment.
The industry is starting to see prices climb for literary works downloaded on
these devices. The real opportunity for publishers will be to develop e-books
that offer interactive features. We believe customers will demand interactive
books that provide a much better, more informed and enriching experience. For
them, the experience (not the cost) is often the primary driver.
2. The Contextual Upsell Will be a Business Model to Watch
E-books allow publishers to interact with their customers in new ways. For
example a customer is trying to learn statistics and gets stuck on a particular
formula. They ask friends but no one can explain it well. They're stuck. They
click a help button, which points them to the publisher site where they can
download relevant tutorials about specific formulas for $2.99. They choose the
one they need and get a new learning tool, which helps them progress in their
class. Multiply this by hundreds of thousands of students who share similar
learning gaps who will purchase through the book ("in-book app purchase") and it
becomes a new marketing opportunity.
3. Publishers Will Be More Important Than Ever
Despite the hype around self-publishing via the web, we believe publishing
houses will play an even greater role in an e-book world. Commodity content is
everywhere (and largely free), so high-quality vetted, edited content -- which
takes a staff of experts -- will be worth a premium.
USA TODAY added e-book bestsellers to its list in July 2009. The USA TODAY list
differs from the Times list in that it is a single list including hardcover and
paperback, e-books, fiction and nonfiction, and all genres in one list. (It also
does not exclude "evergreen" titles.") "The aim of the list is to tell our
readers what the ranking of titles was in a particular week," says Anthony
DeBarros, USA TODAY's Senior Database Editor. If a title is released in
20
hardcover and is published six months later in paperback and e-formats, "we take
the sales of all those formats and put them together so that a book's rank is
determined by a combination of sales for e-books and whatever print format it's
selling in. For some titles, we track several different ISBNs and put those all
together." The list does note which format was the bestselling for that week.
In 2010 year, the publishers surveyed by the Association of American Publishers
saw 8.3 percent of domestic net sales from e-books. Three months into 2011,
Simon and Schuster's e-book sales had climbed to 17 percent of revenue; at
Hachette, parent company of Little, Brown, the figure was 22 percent. From
November to May, according to a Pew Internet Project study, the percentage of
American adults with a dedicated e-reader (like a Nook or Kindle) leaped from 6
percent to 12 percent. Another 8 percent now have tablets. To add a little
context, fewer than half of Americans even buy a book in a typical year. So for
12 percent of all Americans to have an e-reader is not trivial.
Meanwhile, print sales are down about 25 percent. Physical bookstores, including
the Borders chain, which is in bankruptcy reorganization, are on the rocks,
rapidly adding stationery sections and ticketed author events to make up for
plummeting book sales. And Amazon, which offers books in every possible format
but is heavily promoting its proprietary Kindle device, announced in January
2011 that it is now selling more copies digitally than in paperback.
We will be focusing on e-books as they are relatively inexpensive to get to
market and in the hands of readers than paperbacks or hard cover. We will market
by sending chapters to book reviewers and also build a database of customers for
the launch of each book title. Management believes e-books will only get more
inexpensive (relative to hardcover) as there is so much content going digital
that any barriers to entry are being minimized or eliminated. We believe the key
will be to secure engaging authors in the growing segments in self-help,
alternative medicine and new age health.
OFF-BALANCE SHEET ARRANGEMENTS
We do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that is material to investors.
LIMITED OPERATING HISTORY; NEED FOR ADDITIONAL CAPITAL
There is no historical financial information about us on which to base an
evaluation of our performance. We are a development stage company and have not
generated revenues from operations. We cannot guarantee we will be successful in
our business operations. Our business is subject to risks inherent in the
establishment of a new business enterprise, including limited capital resources,
possible delays in implementing our business plan, and possible cost overruns
due to increases in the cost of services.
To become profitable and competitive, we must implement our business plan and
generate revenue. We are seeking funding from this offering to provide the
capital required to implement the business plan. We believe that the funds from
this offering will allow us to operate for one year.
21
LIQUIDITY AND CAPITAL RESOURCES
To meet our need for cash we are attempting to raise money from this offering.
We cannot guarantee that we will be able to sell all the shares required. If we
are successful any money raised will be applied to the items set forth in the
Use of Proceeds section of this prospectus.
Our director has verbally agreed to advance funds as needed for filing and
professional fees until the offering is completed or failed. While she has
agreed to advance the funds, the agreement is verbal and is unenforceable as a
matter of law.
We received our initial funding of $15,000 through the sale of common stock to
Mary Wolf, our CEO, who purchased 3,000,000 shares of our common stock at $0.005
per share on July 20, 2010, the investment by the existing stockholder includes
a subscription receivable of $5,000. From inception until the date of this
filing we have had no operating activities. Our financial statements from
inception (July 20, 2010) through June 30, 2011 report no revenues and net
losses of $8,564.
SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The financial statements of the Company have been prepared in accordance with
generally accepted accounting principles in the United States of America and are
presented in US dollars.
DEVELOPMENT STAGE COMPANY
The Company complies with the ASC 915, its characterization of the Company as a
development stage enterprise.
USE OF ESTIMATES AND ASSUMPTIONS
The preparation of financial statements in conformity with 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 period. Actual results
could differ from those estimates.
The carrying value of cash and accounts payable and accrued liabilities
approximates their fair value because of the short maturity of these
instruments. Unless otherwise noted, it is management's opinion the Company is
not exposed to significant interest, currency or credit risks arising from these
financial instruments.
INCOME TAXES
The Company follows the liability method of accounting for income taxes. Under
this method, deferred income tax assets and liabilities are recognized for the
estimated tax consequences attributable to differences between the financial
statement carrying values and their respective income tax basis (temporary
differences). The effect on deferred income tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.
22
At June 30, 2011, a full deferred tax asset valuation allowance has been
provided and no deferred tax asset has been recorded.
EARNING PER SHARE
The Company computes loss per share in accordance with ASC 105, "Earnings per
Share" which requires presentation of both basic and diluted earnings per share
on the face of the statement of operations. Basic loss per share is computed by
dividing net loss available to common shareholders by the weighted average
number of outstanding common shares during the period. Diluted loss per share
gives effect to all dilutive potential common shares outstanding during the
period. Dilutive loss per share excludes all potential common shares if their
effect is anti-dilutive.
The Company has no potential dilutive instruments and accordingly basic loss and
diluted loss per share are equal.
STOCK-BASED COMPENSATION
The Company accounts for employee and non-employee stock awards under ASC 718,
whereby equity instruments issued to employees for services are recorded based
on the fair value of the instrument issued and those issued to non-employees are
recorded based on the fair value of the consideration received or the fair value
of the equity instrument, whichever is more reliably measurable.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The name, age and title of our executive officers and directors are as follows:
Name and Address of Executive
Officer and/or Director Age Position
----------------------- --- --------
Mary Wolf 52 CEO, President, Secretary, CFO,
1842 E Campo Bello Drive Treasurer and Director
Phoenix, AZ 85022
The person named is the promoter of the company, as that term is defined in the
rules and regulations promulgated under the Securities and Exchange Act of 1933.
The person named above has served in the positions stated above from inception
until present.
TERM OF OFFICE
Directors are appointed to hold office until the next annual meeting of our
stockholders or until a successor is elected and qualified, or until resignation
or removal in accordance with the provisions of the Company by-laws or Nevada
corporate law. Officers are appointed by our Board of Directors and holds office
until removed by the Board. The Board of Directors has no nominating, auditing
or compensation committees.
SIGNIFICANT EMPLOYEES
We currently have one employee, Mary Wolf. Ms. Wolf currently devotes full time
to our business and is responsible for our general strategy and fund raising.
No officer, director, or persons nominated for such positions, promoter or
significant employee has been involved in the last ten years in any of the
following:
23
* Any bankruptcy petition filed by or against any business of which such
person was a general partner or executive officer either at the time
of the bankruptcy or within two years prior to that time,
* Any conviction in a criminal proceeding or being subject to a pending
criminal proceeding (excluding traffic violations and other minor
offenses),
* Being subject to any order, judgment, or decree, not subsequently
reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining, barring,
suspending or otherwise limiting his involvement in any type of
business, securities or banking activities,
* Being found by a court of competent jurisdiction (in a civil action),
the Commission or the Commodity Futures Trading Commission to have
violated a federal or state securities or commodities law, and the
judgment has not been reversed, suspended, or vacated.
* Having any government agency, administrative agency, or administrative
court impose an administrative finding, order, decree, or sanction
against them as a result of their involvement in any type of business,
securities, or banking activity.
* Being the subject of a pending administrative proceeding related to
their involvement in any type of business, securities, or banking
activity.
* Having any administrative proceeding been threatened against you
related to their involvement in any type of business, securities, or
banking activity.
BACKGROUND INFORMATION ABOUT OUR OFFICER AND DIRECTOR
Mary S. Wolf, EA has been President, CEO and Chairman of the Board of Directors
of the Company since inception. From January 1998 to present she has owned and
operated a Tax Accounting business, Mary S. Wolf, EA, Phoenix, Arizona. On
August 9th, 1995 she received her Enrolled Agent Certificate which allows her to
practice before the Internal Revenue Service. An Enrolled Agent (EA) is a tax
professional who has passed an IRS test covering all aspects of taxation, plus
passed an IRS background check. Enrolled Agents have passed a two-day, 8-hour
examination. The examination covers all aspects of federal tax law, including
the taxation of individuals, corporations, partnerships, and various regulations
governing IRS collections and audit procedures. Like CPAs and tax attorneys, EAs
can handle any type of tax matter and represent their client's interests before
the IRS. Unlike CPAs and tax attorneys, Enrolled Agents are tested directly by
the IRS, and enrolled agents focus exclusively on tax accounting. From January
1990 to April 1997 Ms. Wolf worked for H&R Block preparing tax returns for their
Phoenix, Arizona personal and business district offices. From June 1987 through
December 1989, she was employed by Syntellect, Inc., Phoenix, Arizona, a voice
response hardware manufacturer as an installer of their software domestically
and internationally. Prior to June of 1987 she was a controller for a
multi-company group that computerized equipment for manufacturers, sold all
types of metal and woodworking machinery , and developed specialized machinery
for businesses, Quality Machine Tools, Inc., Quantum Machine Services, Inc. and
Falcon Manufacturing, Inc.
EXECUTIVE COMPENSATION
Currently our officer and director receives no compensation for her services
during the development stage of our business operations. She is reimbursed for
any out-of-pocket expenses she may incur on our behalf. In the future, we may
approve payment of salaries for officers and directors, but currently, no such
plans have been approved. We do not have any employment agreements in place with
our officer and director. We also do not currently have any benefits, such as
health or life insurance, available to our employee.
24
SUMMARY COMPENSATION TABLE
Change in
Pension
Value and
Non-Equity Nonqualified
Incentive Deferred All
Name and Plan Compen- Other
Principal Stock Option Compen- sation Compen-
Position Year Salary Bonus Awards Awards sation Earnings sation Totals
------------ ---- ------ ----- ------ ------ ------ -------- ------ ------
Mary Wolf, CEO 2010 0 0 0 0 0 0 0 0
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
Option Awards Stock Awards
----------------------------------------------------------------- ----------------------------------------------
Equity
Incentive
Equity Plan
Incentive Awards:
Plan Market or
Awards: Payout
Equity Number of Value of
Incentive Number Unearned Unearned
Plan Awards; of Market Shares, Shares,
Number of Number of Number of Shares Value of Units or Units or
Securities Securities Securities or Units Shares or Other Other
Underlying Underlying Underlying of Stock Units of Rights Rights
Unexercised Unexercised Unexercised Option Option That Stock That That That
Options (#) Options (#) Unearned Exercise Expiration Have Not Have Not Have Not Have Not
Name Exercisable Unexercisable Options (#) Price Date Vested(#) Vested Vested Vested
---- ----------- ------------- ----------- ----- ---- --------- ------ ------ ------
Mary Wolf 0 0 0 0 0 0 0 0 0
DIRECTOR COMPENSATION
Change in
Pension
Value and
Fees Non-Equity Nonqualified
Earned Incentive Deferred
Paid in Stock Option Plan Compensation All Other
Name Cash Awards Awards Compensation Earnings Compensation Total
---- ---- ------ ------ ------------ -------- ------------ -----
Mary Wolf 0 0 0 0 0 0 0
On July 20, 2010, a total of 3,000,000 shares of common stock were issued to
Mary Wolf in exchange for cash in the amount of $15,000 or $0.005 per share.
There are no annuity, pension or retirement benefits proposed to be paid to the
officer or director or employees in the event of retirement at normal retirement
date pursuant to any presently existing plan provided or contributed to by the
Company.
25
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information concerning the number of
shares of our common stock owned beneficially as of the date of this prospectus
by: (i) each person (including any group) known to us to own more than five
percent (5%) of any class of our voting securities, (ii) our directors, and or
(iii) our officers. Unless otherwise indicated, the stockholder listed possesses
sole voting and investment power with respect to the shares shown.
Amount and Nature Percentage
Name and Address of Beneficial of Common
Title of Class of Beneficial Owner Ownership Stock(1)
-------------- ------------------- --------- --------
Common Stock Mary Wolf, CEO 3,000,000 100%
1842 E Campo Bello Drive Direct
Phoenix, AZ 85022
Common Stock Officers and/or directors 3,000,000 100%
as a Group
HOLDERS OF MORE THAN 5% OF OUR COMMON STOCK
N/A
----------
(1) A beneficial owner of a security includes any person who, directly or
indirectly, through any contract, arrangement, understanding, relationship,
or otherwise has or shares: (i) voting power, which includes the power to
vote, or to direct the voting of shares; and (ii) investment power, which
includes the power to dispose or direct the disposition of shares. Certain
shares may be deemed to be beneficially owned by more than one person (if,
for example, persons share the power to vote or the power to dispose of the
shares). In addition, shares are deemed to be beneficially owned by a
person if the person has the right to acquire the shares (for example, upon
exercise of an option) within 60 days of the date as of which the
information is provided. In computing the percentage ownership of any
person, the amount of shares outstanding is deemed to include the amount of
shares beneficially owned by such person (and only such person) by reason
of these acquisition rights. As a result, the percentage of outstanding
shares of any person as shown in this table does not necessarily reflect
the person's actual ownership or voting power with respect to the number of
shares of common stock actually outstanding as of the date of this
prospectus. As of the date of this prospectus, there were 3,000,000 shares
of our common stock issued and outstanding.
FUTURE SALES BY EXISTING STOCKHOLDERS
A total of 3,000,000 shares have been issued to the existing stockholder, all of
which are held by Ms. Wolf, the officer and director of the Company and are
restricted securities, as that term is defined in Rule 144 of the Rules and
Regulations of the SEC promulgated under the Act. Under Rule 144, such shares
can be publicly sold, subject to volume restrictions and certain restrictions on
the manner of sale, commencing six months after their acquisition.
Rule 144(i)(1) states that the Rule 144 safe harbor is not available for the
resale of securities "initially issued" by a shell company (other than a
business combination related shell company) or an issuer that has "at any time
previously" been a shell company (other than a business combination related
shell company). Consequently, the Rule 144 safe harbor is not available for the
resale of such securities unless and until all of the conditions in Rule
144(i)(2) are satisfied at the time of the proposed sale.
Any sale of shares held by the existing stockholder (after applicable
restrictions expire) and/or the sale of shares purchased in this offering (which
would be immediately resalable after the offering), may have a depressive effect
on the price of our common stock in any market that may develop, of which there
can be no assurance. Our principal shareholder does not have any plans to sell
his shares at any time after this offering is complete.
26
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On July 20, 2010, the Company issued a total of 3,000,000 shares of common stock
to Mary Wolf for cash at $0.005 per share for a total of $15,000.
As of June 30, 2011, the Company has a loan of $2,500 owing to Mary Wolf, the
loan bears no interest rate, and has no term of repayment.
We do not currently have any conflicts of interest by or among our current
officer, director, key employee or advisors. We have not yet formulated a policy
for handling conflicts of interest; however, we intend to do so upon completion
of this offering and, in any event, prior to hiring any additional employees.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "Act") may be permitted to directors, officers and controlling persons
of the small business issuer pursuant to the By-Laws of the Company, or
otherwise, we have been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act, and is, therefore unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment of expenses incurred or paid by a director, officer or
controlling person in the successful defense of any action, suit or proceeding)
is asserted by such director, officer, or other control person in connection
with the securities being registered, we will, unless in the opinion of our
legal counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it, is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
AVAILABLE INFORMATION
We have filed a registration statement on Form S-1, of which this prospectus is
a part, with the U.S. Securities and Exchange Commission. Upon completion of the
registration, we will be subject to the informational requirements of the
Exchange Act and, in accordance therewith, will file all requisite reports, such
as Forms 10-K, 10-Q and 8-K, proxy statements, under Sec.14 of the Exchange Act,
and other information with the Commission. Such reports, proxy statements, this
registration statement and other information, may be inspected and copied at the
public reference facilities maintained by the Commission at 100 F Street NE,
Washington, D.C. 20549. Copies of all materials may be obtained from the Public
Reference Section of the Commission's Washington, D.C. office at prescribed
rates. You may obtain information regarding the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330. The Commission also
maintains a Web site that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission at http://www.sec.gov
FINANCIAL STATEMENTS
The financial statements of RedStone Literary Agents, Inc. for the year ended
December 31, 2010 and related notes, included in this prospectus have been
audited by Ronald R. Chadwick, P.C., and have been so included in reliance upon
the opinion of such accountants given upon their authority as an expert in
auditing and accounting.
The financial statements of RedStone Literary Agents, Inc. for the quarter ended
June 30, 2011 and related notes, included in this prospectus have been prepared
by the company and reviewed by Ronald R. Chadwick, P.C.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
We have had no changes in or disagreements with our accountants.
27
REDSTONE LITERARY AGENTS, INC.
FINANCIAL STATEMENTS
JUNE 30, 2011
(UNAUDITED)
F-1
Redstone Literary Agents, Inc.
Balance Sheets
(A Development Stage Company)
(Expressed in US Dollars)
--------------------------------------------------------------------------------
June 30, December 31,
2011 2010
-------- --------
(Unaudited) (Audited)
ASSETS
CURRENT ASSETS
Cash $ 3,936 $ 9,230
-------- --------
TOTAL ASSTS $ 3,936 $ 9,230
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ -- $ --
Loans from related parties 2,500
-------- --------
TOTAL CURRENT LIABILITIES 2,500 --
-------- --------
STOCKHOLDERS' EQUITY
Capital stock
Authorized 75,000,000 ordinary voting shares at $0.001 per share
Issued and outstanding:
3,000,000 common shares at par value 3,000 3,000
Additional paid in capital 12,000 12,000
Share subscription receivable (5,000) (5,000)
-------- --------
10,000 10,000
Deficit accumulated during the development stage (8,564) (770)
-------- --------
TOTAL STOCKHOLDERS' EQUITY 1,436 9,230
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,936 $ 9,230
======== ========
Approved on behalf of the board
_______________________________, Director
_______________________________, Director
F-2
Redstone Literary Agents, Inc.
Statements of Operations
(A Development Stage Company)
(Expressed in US Dollars)
(Unaudited)
--------------------------------------------------------------------------------
Accumulated From
Six Months Three Months Inception Date of
Ended Ended July 20, 2010 to
June 30, June 30, June 30,
2011 2011 2011
---------- ---------- ----------
GENERAL AND ADMINISTRATIVE EXPENSES
Bank charges and interest $ 191 $ 51 $ 252
Professional Fees 4,700 450 4,700
Office expenses 2,903 2,903 3,612
---------- ---------- ----------
Total general and administrative expenses 7,794 3,404 8,564
---------- ---------- ----------
Net loss $ (7,794) $ (3,404) $ (8,564)
========== ========== ==========
EARNINGS PER SHARE - BASIC AND DILUTED $ (0.00) $ (0.00)
========== ==========
WEIGHTED AVERAGE OUTSTANDING SHARES 3,000,000 3,000,000
========== ==========
F-3
Redstone Literary Agents, Inc.
Statement of Stockholders' Equity
(A Development Stage Company)
(Expressed in US Dollars)
(Unaudited)
--------------------------------------------------------------------------------
Deficit
Accumulated Total
Price Number of Additional Total During the Stock-
Per Common Par Paid-in Capital Development holders'
Share Shares Value Capital Stock Stage Equity
----- ------ ----- ------- ----- ----- ------
Balance, July 20, 2010 -- $ -- $ -- $ -- $ -- $ --
July 20, 2010
Subscribed for cash $0.005 3,000,000 3,000 12,000 15,000 -- 15,000
Share subscription receivable (5,000) (5,000)
Net loss (770) (770)
---------- ------- -------- -------- ------- --------
Balance, December 31, 2010 3,000,000 3,000 12,000 10,000 (770) 9,230
Net loss (7,794) (7,794)
---------- ------- -------- -------- ------- --------
Balance, June 30, 2011 3,000,000 $ 3,000 $ 12,000 $ 10,000 $(8,564) $ 1,436
========== ======= ======== ======== ======= ========
F-4
Redstone Literary Agents, Inc.
Statements of Cash Flows
(A Development Stage Company)
(Expressed in US Dollars)
(Unaudited)
--------------------------------------------------------------------------------
Accumulated From
Six Months Three Months Inception Date of
Ended Ended July 20, 2010 to
June 30, June 30, June 30,
2011 2011 2011
-------- -------- --------
CASH DERIVED FROM (USED FOR) OPERATING ACTIVITIES
Net loss for the period $ (7,794) $ (3,404) $ (8,564)
Adjustments to reconcile net loss to net cash
Provided by (used in) operating activities
Changes in operating assets and liabilities
Accounts payable -- -- --
-------- -------- --------
Net cash (used in) operating activities (7,794) (3,404) (8,564)
-------- -------- --------
FINANCING ACTIVITIES
Loans from related party 2,500 -- 2,500
Shares subscribed for cash -- -- 10,000
-------- -------- --------
Net cash provided by financing activities 2,500 -- 12,500
-------- -------- --------
INVESTING ACTIVITIES -- -- --
-------- -------- --------
Net cash used for investing activities -- -- --
-------- -------- --------
Cash increase during the period (5,294) (3,404) 3,936
Cash beginning of the period 9,230 7,340 --
-------- -------- --------
Cash end of the period $ 3,936 $ 3,936 $ 3,936
======== ======== ========
F-5
Redstone Literary Agents, Inc.
Notes to Financial Statements
June 30, 2011
(A Development Stage Company)
(Expressed in US Dollars)
(Unaudited)
--------------------------------------------------------------------------------
1. NATURE AND CONTINUANCE OF OPERATIONS
Redstone Literary Agents, Inc. ("the Company") was incorporated under the
laws of State of Nevada, U.S. on July 20, 2010, with an authorized capital
of 75,000,000 common shares with a par value of $0.001. The Company's year
end is the end of December. The Company is in the development stage of its
publishing service business. During the period ended December 31, 2010, the
Company commenced operations by issuing shares.
These financial statements have been prepared on a going concern basis
which assumes the Company will be able to realize its assets and discharge
its liabilities in the normal course of business for the foreseeable
future. The Company has incurred losses since inception resulting in an
accumulated deficit of $8,564 as at June 30, 2011 and further losses are
anticipated in the development of its business raising substantial doubt
about the Company's ability to continue as a going concern. The ability to
continue as a going concern is dependent upon the Company generating
profitable operations in the future and/or to obtain the necessary
financing to meet its obligations and repay its liabilities arising from
normal business operations when they come due. Management intends to
finance operating costs over the next twelve months with existing cash on
hand and loans from directors and or private placement of common stock.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The financial statements of the Company have been prepared in accordance
with generally accepted accounting principles in the United States of
America and are presented in US dollars.
DEVELOPMENT STAGE COMPANY
The Company complies with the ASC 915, its characterization of the Company
as a development stage enterprise.
USE OF ESTIMATES AND ASSUMPTIONS
The preparation of financial statements in conformity with 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 period. Actual results could differ from those estimates.
The carrying value of cash and accounts payable and accrued liabilities
approximates their fair value because of the short maturity of these
instruments. Unless otherwise noted, it is management's opinion the Company
is not exposed to significant interest, currency or credit risks arising
from these financial instruments.
INCOME TAXES
The Company follows the liability method of accounting for income taxes.
Under this method, deferred income tax assets and liabilities are
recognized for the estimated tax consequences attributable to differences
between the financial statement carrying values and their respective income
tax basis (temporary differences). The effect on deferred income tax assets
and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.
At June 30, 2011, a full deferred tax asset valuation allowance has been
provided and no deferred tax asset has been recorded.
F-6
Redstone Literary Agents, Inc.
Notes to Financial Statements
June 30, 2011
(A Development Stage Company)
(Expressed in US Dollars)
(Unaudited)
--------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
EARNING PER SHARE
The Company computes loss per share in accordance with ASC 105, "Earnings
per Share" which requires presentation of both basic and diluted earnings
per share on the face of the statement of operations. Basic loss per share
is computed by dividing net loss available to common shareholders by the
weighted average number of outstanding common shares during the period.
Diluted loss per share gives effect to all dilutive potential common shares
outstanding during the period. Dilutive loss per share excludes all
potential common shares if their effect is anti-dilutive.
The Company has no potential dilutive instruments and accordingly basic
loss and diluted loss per share are equal.
STOCK-BASED COMPENSATION
The Company accounts for employee and non-employee stock awards under ASC
718, whereby equity instruments issued to employees for services are
recorded based on the fair value of the instrument issued and those issued
to non-employees are recorded based on the fair value of the consideration
received or the fair value of the equity instrument, whichever is more
reliably measurable.
3. COMMON STOCK
The total number of common shares authorized that may be issued by the
Company is 75,000,000 shares with a par value of one tenth of one cent
($0.001) per share and no other class of shares is authorized.
During the period ended December 31, 2010, the Company issued 3,000,000
shares of common stock for total cash proceeds of $15,000. At June 30, 2011
there were no outstanding stock options or warrants.
4. INCOME TAXES
As of June 30, 2011, the Company had net operating loss carry forwards of
approximately $8,564 that may be available to reduce future years' taxable
income through 2030. Future tax benefits which may arise as a result of
these losses have not been recognized in these financial statements, as
their realization is determined not likely to occur and accordingly, the
Company has recorded a valuation allowance for the deferred tax asset
relating to these tax loss carry-forwards.
5. SUBSEQUENT EVENT
The Company has evaluated subsequent events through the date of issuance of
these financial statements and determined that thee are no reportable
subsequent events.
F-7
RONALD R. CHADWICK, P.C.
Certified Public Accountant
2851 South Parker Road, Suite 720
Aurora, Colorado 80014
Telephone (303)306-1967
Fax (303)306-1944
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors
Redstone Literary Agents, Inc.
Phoenix, Arizona
I have audited the accompanying balance sheet of Redstone Literary Agents, Inc.
(a development stage company) as of December 31, 2010, and the related
statements of operations, stockholders' equity and cash flows for the period
from July 20, 2010 (inception) through December 31, 2010. These financial
statements are the responsibility of the Company's management. My responsibility
is to express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that I plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. I believe that my audit provides a reasonable
basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Redstone Literary Agents, Inc. as
of December 31, 2010, and the results of its operations and its cash flows for
the period from July 20, 2010 (inception) through December 31, 2010 in
conformity with accounting principles generally accepted in the United States of
America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements the Company has suffered a loss from operations and has
limited working capital that raise substantial doubt about its ability to
continue as a going concern. Management's plans in regard to these matters are
also described in Note 1. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Aurora, Colorado /s/ Ronald R. Chadwick, P.C.
March 15, 2011 -----------------------------------
RONALD R. CHADWICK, P.C.
F-8
Redstone Literary Agents, Inc.
Balance Sheets
(A Development Stage Company)
(Expressed in US Dollars)
--------------------------------------------------------------------------------
December 31,
2010
--------
ASSETS
CURRENT ASSETS
Cash $ 9,230
--------
TOTAL ASSTS $ 9,230
========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ --
--------
TOTAL CURRENT LIABILITIES --
--------
STOCKHOLDERS' EQUITY
Capital stock
Authorized 75,000,000 ordinary voting shares at
$0.001 per share
Issued and outstanding:
3,000,000 common shares at par value 3,000
Additional paid in capital 12,000
Share subscription receivable (5,000)
--------
10,000
Deficit accumulated during the development stage (770)
--------
TOTAL STOCKHOLDERS' EQUITY 9,230
--------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 9,230
========
Approved on behalf of the board
_______________________________, Director
_______________________________, Director
F-9
Redstone Literary Agents, Inc.
Statement of Operations
(A Development Stage Company)
(Expressed in US Dollars)
--------------------------------------------------------------------------------
Accumulated
From Inception
Date of
July 20, 2010 to
December 31,
2010
----------
GENERAL AND ADMINISTRATIVE EXPENSES
Bank charges and interest $ 61
Office expenses 709
----------
Total general and administrative expenses 770
----------
Net loss $ (770)
==========
EARNINGS PER SHARE - BASIC AND DILUTED $ (0.00)
==========
WEIGHTED AVERAGE OUTSTANDING SHARES 3,000,000
==========
F-10
Redstone Literary Agents, Inc.
Statement of Stockholders' Equity
(A Development Stage Company)
(Expressed in US Dollars)
--------------------------------------------------------------------------------
Deficit
Accumulated Total
Price Number of Additional Total During the Stock-
Per Common Par Paid-in Capital Development holders'
Share Shares Value Capital Stock Stage Equity
----- ------ ----- ------- ----- ----- ------
Balance, July 20, 2010 -- $ -- $ -- $ -- $ -- $ --
July 20, 2010
Subscribed for cash $0.005 3,000,000 3,000 12,000 15,000 -- 15,000
Share subscription receivable (5,000) (5,000)
Net loss (770) (770)
---------- ------- -------- -------- ------- --------
Balance, December 31, 2010 3,000,000 $ 3,000 $ 12,000 $ 10,000 $ (770) $ 9,230
========== ======= ======== ======== ======= ========
F-11
Redstone Literary Agents, Inc.
Statements of Cash Flows
(A Development Stage Company)
(Expressed in US Dollars)
--------------------------------------------------------------------------------
Accumulated
From Inception
Date of
July 20, 2010 to
December 31,
2010
--------
CASH DERIVED FROM (USED FOR) OPERATING ACTIVITIES
Net loss for the period $ (770)
Adjustments to reconcile net loss to net cash
Provided by (used in) operating activities
Changes in operating assets and liabilities
Accounts payable --
--------
Net cash (used in) operating activities (770)
--------
FINANCING ACTIVITIES
Loans from related party --
Shares subscribed for cash 10,000
--------
Net cash provided by financing activities 10,000
--------
INVESTING ACTIVITIES --
--------
Net cash used for investing activities --
--------
Cash increase during the period 9,230
Cash beginning of the period --
--------
Cash end of the period $ 9,230
========
F-12
Redstone Literary Agents, Inc.
Notes to Financial Statements
December 31, 2010
(A Development Stage Company)
(Expressed in US Dollars)
--------------------------------------------------------------------------------
1. NATURE AND CONTINUANCE OF OPERATIONS
Redstone Literary Agents, Inc. ("the Company") was incorporated under the
laws of State of Nevada, U.S. on July 20, 2010, with an authorized capital
of 75,000,000 common shares with a par value of $0.001. The Company's year
end is the end of December. The Company is in the development stage of its
publishing service business. During the period ended December 31, 2010, the
Company commenced operations by issuing shares. Redstone Literary Agents
represents authors in the both the developmental stage of creating content
for their book and the representation of finished works to potential book
publishers.
These financial statements have been prepared on a going concern basis
which assumes the Company will be able to realize its assets and discharge
its liabilities in the normal course of business for the foreseeable
future. The Company has incurred losses since inception resulting in an
accumulated deficit of $770 as at December 31, 2010 and further losses are
anticipated in the development of its business raising substantial doubt
about the Company's ability to continue as a going concern. The ability to
continue as a going concern is dependent upon the Company generating
profitable operations in the future and/or to obtain the necessary
financing to meet its obligations and repay its liabilities arising from
normal business operations when they come due. Management intends to
finance operating costs over the next twelve months with existing cash on
hand and loans from directors and or private placement of common stock.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The financial statements of the Company have been prepared in accordance
with generally accepted accounting principles in the United States of
America and are presented in US dollars.
DEVELOPMENT STAGE COMPANY
The Company complies with the ASC 915, its characterization of the Company
as a development stage enterprise.
USE OF ESTIMATES AND ASSUMPTIONS
The preparation of financial statements in conformity with 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 period. Actual results could differ from those estimates.
The carrying value of cash and accounts payable and accrued liabilities
approximates their fair value because of the short maturity of these
instruments. Unless otherwise noted, it is management's opinion the Company
is not exposed to significant interest, currency or credit risks arising
from these financial instruments.
INCOME TAXES
The Company follows the liability method of accounting for income taxes.
Under this method, deferred income tax assets and liabilities are
recognized for the estimated tax consequences attributable to differences
between the financial statement carrying values and their respective income
tax basis (temporary differences). The effect on deferred income tax assets
and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.
At December 31, 2010, a full deferred tax asset valuation allowance has
been provided and no deferred tax asset has been recorded.
F-13
Redstone Literary Agents, Inc.
Notes to Financial Statements
December 31, 2010
(A Development Stage Company)
(Expressed in US Dollars)
--------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
EARNING PER SHARE
The Company computes loss per share in accordance with ASC 105, "Earnings
per Share" which requires presentation of both basic and diluted earnings
per share on the face of the statement of operations. Basic loss per share
is computed by dividing net loss available to common shareholders by the
weighted average number of outstanding common shares during the period.
Diluted loss per share gives effect to all dilutive potential common shares
outstanding during the period. Dilutive loss per share excludes all
potential common shares if their effect is anti-dilutive.
The Company has no potential dilutive instruments and accordingly basic
loss and diluted loss per share are equal.
STOCK-BASED COMPENSATION
The Company accounts for employee and non-employee stock awards under ASC
718, whereby equity instruments issued to employees for services are
recorded based on the fair value of the instrument issued and those issued
to non-employees are recorded based on the fair value of the consideration
received or the fair value of the equity instrument, whichever is more
reliably measurable.
3. COMMON STOCK
The total number of common shares authorized that may be issued by the
Company is 75,000,000 shares with a par value of one tenth of one cent
($0.001) per share and no other class of shares is authorized.
During the period ended December 31, 2010, the Company issued 3,000,000
shares of common stock for total cash proceeds of $15,000. At December 31,
2010 there were no outstanding stock options or warrants.
4. INCOME TAXES
As of December 31, 2010, the Company had net operating loss carry forwards
of approximately $770 that may be available to reduce future years' taxable
income through 2030. Future tax benefits which may arise as a result of
these losses have not been recognized in these financial statements, as
their realization is determined not likely to occur and accordingly, the
Company has recorded a valuation allowance for the deferred tax asset
relating to these tax loss carry-forwards.
5. SUBSEQUENT EVENT
The Company has evaluated subsequent events through the date of issuance of
these financial statements and determined that thee are no reportable
subsequent events.
F-14
DEALER PROSPECTUS DELIVERY OBLIGATION
"UNTIL ______________, 2011, ALL DEALERS THAT EFFECT TRANSACTIONS IN THESE
SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO
DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE DEALERS' OBLIGATION TO DELIVER
A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS."
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated costs of this offering are as follows:
Expenses (1) US($)
------------ ---------
SEC Registration Fee $ 5.00
Legal and Professional Fees $2,600.00
Accounting and Auditing $4,000.00
Printing of Prospectus $ 95.00
---------
TOTAL $6,700.00
=========
----------
(1) All amounts are estimates, other than the SEC's registration fee.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Our By-Laws allow for the indemnification of Company officers and directors in
regard to their carrying out the duties of their offices. The board of directors
will make determination regarding the indemnification of the director, officer
or employee as is proper under the circumstances if he/she has met the
applicable standard of conduct set forth in the Nevada General Corporation Law.
Section 78.751 of the Nevada Business Corporation Act provides that each
corporation shall have the following powers:
"1. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
except an action by or in the right of the corporation, by reason of any fact
that he is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses, including attorneys fees, judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with the action, suit or proceeding if he acted in good faith and in
a manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a pleas of nolo contendere or its equivalent, does not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and that, with respect to any criminal action or
proceeding, he had a reasonable cause to believe that his conduct was unlawful.
2. A corporation may indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or suit by or
in the right of the corporation to procure a judgment in its favor by reason of
the fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses, including amounts paid in
settlement and attorneys fees actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit if he acted in
good faith and in a manner which he reasonably believed to be in or not opposed
to the best interests of the corporation. Indemnification may not be made for
any claim, issue or matter as to which such a person has been adjudged by a
court of competent jurisdiction, after exhaustion of all appeals therefrom, to
be liable to the corporation or for amounts paid in settlement to the
corporation, unless and only to the extent that the court in which the action or
suit was brought or other court of competent jurisdiction, determines upon
II-1
application that in view of all the circumstances of the case, the person is
fairly and reasonably entitled to indemnity for such expenses as the court deems
proper.
3. To the extent that a director, officer, employee or agent of a corporation
has been successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in sections 1 and 2, or in defense of any claim, issue or
matter therein, he must be indemnified by the corporation against expenses,
including attorneys fees, actually and reasonably incurred by him in connection
with the defense.
4. Any indemnification under sections 1 and 2, unless ordered by a court or
advanced pursuant to section 5, must be made by the corporation only as
authorized in the specific case upon a determination that indemnification of the
director, officer, employee or agent is proper in the circumstances. The
determination must be made:
a. By the stockholders;
b. By the board of directors by majority vote of a quorum consisting of
directors who were not parties to the act, suit or proceeding;
c. If a majority vote of a quorum consisting of directors who were not
parties to the act, suit or proceeding so orders, by independent legal
counsel, in a written opinion; or
d. If a quorum consisting of directors who were not parties to the act,
suit or proceeding cannot be obtained, by independent legal counsel in
a written opinion.
5. The certificate of articles of incorporation, the bylaws or an agreement made
by the corporation may provide that the expenses of officers and directors
incurred in defending a civil or criminal action, suit or proceeding must be
paid by the corporation as they are incurred and in advance of the final
disposition of the action, suit or proceeding, upon receipt of an undertaking by
or on behalf of the director or officer to repay the amount if it is ultimately
determined by a court of competent jurisdiction that he is not entitled to be
indemnified by the corporation. The provisions of this section do not affect any
rights to advancement of expenses to which corporate personnel other than
director or officers may be entitled under any contract or otherwise by law.
6. The indemnification and advancement of expenses authorized in or ordered by a
court pursuant to this section:
a. Does not include any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under the
certificate or articles of incorporation or any bylaw, agreement, vote
of stockholders or disinterested directors or otherwise, for either an
action in his official capacity or an action in another capacity while
holding his office, except that indemnification, unless ordered by a
court pursuant to section 2 or for the advancement of expenses made
pursuant to section 5, may not be made to or on behalf of any director
or officer if a final adjudication establishes that his acts or
omission involved intentional misconduct, fraud or a knowing violation
of the law and was material to the cause of action.
b. Continues for a person who has ceased to be a director, officer,
employee or agent and inures to the benefit of the heirs, executors
and administrators of such a person.
c. The Articles of Incorporation provides that "the Corporation shall
indemnify its officers, directors, employees and agents to the fullest
extent permitted by the General Corporation Law of Nevada, as amended
from time to time."
As to indemnification for liabilities arising under the Securities Act of 1933
for directors, officers or persons controlling RedStone Literary Agents, Inc.,
we have been informed that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy and unenforceable.
II-2
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
Set forth below is information regarding the issuance and sales of securities
without registration since inception. No such sales involved the use of an
underwriter; no advertising or public solicitation was involved; the securities
bear a restrictive legend; and no commissions were paid in connection with the
sale of any securities.
On July 20, 2010, the Company issued a total of 3,000,000 shares of common stock
to Mary Wolf for cash at $0.005 per share for a total of $15,000.
These securities were issued in reliance upon the exemption contained in Section
4(2) of the Securities Act of 1933. These securities were issued to a promoter
of the Company and bear a restrictive legend.
ITEM 16. EXHIBITS.
The following exhibits are included with this registration statement:
Exhibit
Number Description
------ -----------
3.1 Articles of Incorporation (previously filed)
3.2 Bylaws (previously filed)
5.1 Opinion re: Legality and Consent of Counsel (previously filed)
23.1 Consent of Independent Auditor
99.1 Subscription Agreement (previously filed)
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which it offers or sales are being made, a
post effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate,, represent a fundamental change in the information in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of Prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
(2) That, for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered that remain unsold at the termination of
the offering.
II-3
(4) That, for the purpose of determining liability under the Securities Act to
any purchaser, if the registrant is subject to Rule 430C, each prospectus
filed pursuant to Rule 424(b) as part of a registration statement relating
to an offering, other than registration statements relying on Rule 430B or
other than prospectuses filed in reliance on Rule 430A, shall be deemed to
be part of and included in the registration statement as of the date it is
first used after effectiveness. Provided, however, that no statement made
in a registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by
reference into the registration statement or prospectus that is part of the
registration statement will, as to a purchaser with a time of contract of
sale prior to such first use, supersede or modify any statement that was
made in the registration statement or prospectus that was part of the
registration statement or made in any such document immediately prior to
such date of first use.
(5) That, for the purpose of determining liability of the registrant under the
Securities Act of 1933 to any purchaser in the initial distribution of the
securities:
The undersigned registrant undertakes that in a primary offering of
securities of the undersigned registrant pursuant to this registration
statement, regardless of the underwriting method used to sell the
securities to the purchaser, if the securities are offered or sold to such
purchaser by means of any of the following communications, the undersigned
registrant will be a seller to the purchaser and will be considered to
offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned registrant
relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering prepared by or on
behalf of the undersigned registrant or used or referred to by the
undersigned registrant;
(iii) The portion of any other free writing prospectus relating to the
offering containing material information about the undersigned
registrant or its securities provided by or on behalf of the
undersigned registrant; and
(iv) Any other communication that is an offer in the offering made by the
undersigned registrant to the purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director, officer, or
controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer, or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-4
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Phoenix,
State of Arizona, U.S.A, on December 2, 2011.
RedStone Literary Agents, Inc., Registrant
By: /s/ Mary S. Wolf
---------------------------------------
Mary S. Wolf, CEO
Principal Executive Officer, Principal
Financial Officer, Principal Accounting
Officer and Director
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
/s/ Mary S. Wolf Principal Executive Officer December 2, 2011
--------------------------- --------------------------- ----------------
Mary S. Wolf Title Date
/s/ Mary S. Wolf Principal Financial Officer December 2, 2011
--------------------------- --------------------------- ----------------
Mary S. Wolf Title Date
/s/ Mary S. Wolf Principal Accounting Officer December 2, 2011
--------------------------- ---------------------------- ----------------
Mary S. Wolf Title Date
/s/ Mary S. Wolf Sole Director December 2, 2011
--------------------------- ---------------------------- ----------------
Mary S. Wolf Title Date
II-