Attached files
| file | filename |
|---|---|
| EXCEL - IDEA: XBRL DOCUMENT - AUTRIS | Financial_Report.xls |
| EX-32 - EXHIBIT 32 - AUTRIS | ex32.htm |
| EX-31 - EXHIBIT 31 - AUTRIS | ex31.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 2012
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission File No. 000-54000
Big Sky Productions, Inc.
(Exact name of registrant as specified in its charter)
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Nevada
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88-0410480
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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12021 Wilshire Blvd. #234, Los Angeles, CA
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90025
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(Address of principal executive offices)
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(Zip Code)
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1-310-430-1388
(Registrant’s telephone number, including area code)
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Securities registered pursuant to Section 12(b) of the Act:
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None
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Securities registered pursuant to Section 12(g) of the Act:
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Common Stock, par value $0.001 per share
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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
o Yes x No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.
o Yes x No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
x Yes o No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
x Yes o No (Not required)
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer o
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Accelerated filer o
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Non-accelerated filer o
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Smaller reporting company ý
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). oYes x No
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter: approximately $97,090 at December 31, 2011.
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date: 12,063,381 shares of common stock as of June 30, 2012.
DOCUMENTS INCORPORATED BY REFERENCE
None.
1
FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objections of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements or belief; and any statements of assumptions underlying any of the foregoing. Forward-looking statements may include the words “may,” “could,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate” or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Except for our ongoing securities laws, we do not intend, and undertake no obligation, to update any forward-looking statement. Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any or our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. The factors impacting these risks and uncertainties include, but are not limited to; increased competitive pressures from existing competitors and new entrants; our ability to efficiently and effectively finance our operations; deterioration in general or regional economic conditions; adverse state or federal legislation or regulation that increases the costs of compliance; ability to achieve future sales levels or other operating results; the fact that our accounting policies and methods are fundamental to how we report our financial condition and results of operations, and they may require management to make estimates about matters that are inherently uncertain; changes in U.S. GAAP or in the legal, regulatory and legislative environments in the markets in which we operate; inability to efficiently manage our operations; the inability of management to effectively implement our strategies and business plans; and the other risks and uncertainties detailed in this report.
Throughout this Annual Report on Form 10-K references to “we”, “our”, “us”, “BSP”, “the Company”, and similar terms refer to Big Sky Productions, Inc.
2
INDEX TO FORM 10-K
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PART I
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Page
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Item 1
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Business
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4 |
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Item 1A
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Risk Factors
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6 |
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Item 1B
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Unresolved Staff Comments
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6 |
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Item 2
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Properties
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6 |
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Item 3
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Legal Proceedings
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6 |
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Item 4
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Mine Safety Disclosures
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7 |
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PART II
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||
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Item 5
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Market for Registrant’s Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities
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7 |
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Item 6
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Selected Financial Data
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Item 7
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Management’s Discussion and Analysis of Financial Condition and
Results of Operations
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8 |
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Item 7A
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Quantitative and Qualitative Disclosures About Market Risk
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8 |
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Item 8
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Financial Statements and Supplementary Data
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9 |
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Item 9
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Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure
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9 |
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Item 9A
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Controls and Procedures
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9 |
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Item 9B
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Other Information
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10 |
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PART III
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||
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Item 10
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Directors, Executive Officers and Corporate Governance
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10 |
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Item 11
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Executive Compensation
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11 |
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Item 12
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Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
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11 |
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Item 13
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Certain Relationships and Related Transactions, and Director Independence
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12 |
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Item 14
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Principal Accounting Fees and Services
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12 |
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PART IV
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Item 15
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Exhibits, Financial Statement Schedules
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13
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3
PART I
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Item 1
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Business
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CORPORATE HISTORY AND BACKGROUND
Big Sky Productions, Inc. (the “Company”) was incorporated in the State of Nevada on February 28, 2008. The Company has elected a fiscal year end of June 30.
BUSINESS
Our business is focused on (i) film production and distribution, and (ii) an online news magazine and terrestrial radio program broadcast known as the “Ellis Martin Report”.
Film Production and Distribution
With respect to our film production and distribution business we have been engaged in business planning activities, including researching the industry, developing our economic models and financial forecasts, performing due diligence regarding potential geographic locations most suitable for our services, identifying future sources of capital and developing a business plan as a producer of low-budget motion pictures. Our Company intends to use North America as its primary area for producing these feature films. We cannot provide any assurance or guarantee that we will be able to generate revenues in the future years through this activity.
Ellis Martin Report
Our radio program is broadcast during market hours in several key US cities and worldwide on the web featuring small-cap or microcap companies from a variety of industry sectors trading on a number of North American and foreign exchanges. We produce and provide news, general analyst opinions and other programming content. Our content is distributed to radio stations and digital platforms. We sell radio airtime to customers who discuss their company. The airtime is purchased from a third party radio airtime broker at a discount to our company. We derive substantially all of our revenue from the sale of 3 minute, 5 minute, and 10 minute and 60 second commercial airtime increments to companies. Our clients who target local/regional audiences generally find that an effective method is to purchase shorter duration interviews, which are principally correlated to our stock and information related programming and content. Our clients who target national audiences generally find that a cost effective method is to purchase longer airtime, which are principally correlated to our news, stock market related programming and content. A growing number of advertisers purchase both local/regional and national airtime. Our goal is to maximize the yield of our available commercial airtime to optimize revenue and profitability.
There are a variety of factors that influence our revenue on a periodic basis, including but not limited to:
· economic conditions and the relative strength or weakness in the United States economy;
· advertiser spending patterns and the timing of the broadcasting of our programming, principally the seasonal nature of financial programming;
· changes in ratings/audience levels for our programming; increases or decreases in our portfolio of program offerings and the audiences of our programs, including changes in the demographic composition of our audience base;
· advertiser demand on a local/regional or national basis for radio related advertising products; increases or decreases in the size of our advertiser sales force; and
· competitive and alternative programs and advertising mediums.
4
Our commercial airtime is perishable, and accordingly, our revenue is significantly impacted by the commercial airtime available at the time we enter into an arrangement with a company. Our ability to specifically isolate the relative historical aggregate impact of price and volume is not practical as commercial airtime is sold and managed on an order-by-order basis. We closely monitor advertiser commitments for the current calendar year, with particular emphasis placed on the annual upfront process. We take the following factors, among others, into account when pricing commercial airtime: (1) the dollar value, length and breadth of the order; (2) the desired reach and audience demographic; (3) the quantity of commercial airtime available for the desired demographic requested by the advertiser for sale at the time their order is negotiated; and (4) the proximity of the date of the order placement to the desired broadcast date of the commercial airtime.
The principal components of our operating expenses are programming, production and distribution costs (including affiliate compensation and broadcast rights fees), selling expenses, including commissions, promotional expenses and bad debt expenses, depreciation and amortization, and corporate general and administrative expenses.
We consider our operating cost structure to be largely fixed in nature, and as a result, we need several months lead time to make significant modifications to our cost structure to react to what we view are more than temporary increases or decreases in advertiser demand. This becomes important in predicting our performance in periods when advertiser revenue is increasing or decreasing. In periods where advertiser revenue is increasing, the fixed nature of a substantial portion of our costs means that operating income will grow faster than the related growth in revenue. Conversely, in a period of declining revenue, operating income will decrease by a greater percentage than the decline in revenue because of the lead-time needed to reduce our operating cost structure. If we perceive a decline in revenue to be temporary, we may choose not to reduce our fixed costs, or may even increase our fixed costs, so as to not limit our future growth potential when the advertising marketplace rebounds. We carefully consider matters such as credit and commercial inventory risks, among others, in assessing arrangements with our programming and distribution partners. In those circumstances where we function as the principal in the transaction, the revenue and associated operating costs are presented on a gross basis in the accompanying Statement of Operations. In those circumstances where we function as an agent or sales representative, our effective commission is presented within revenue with no corresponding operating expenses. Although no individual relationship is significant, the relative mix of such arrangements is significant when evaluating operating margin and/or increases and decreases in operating expenses.
Competitive Factors
The motion picture industry is intensely competitive. Competition comes from companies within the same business and companies in other entertainment media that create alternative forms of entertainment. The industry is currently evolving in such a way that certain multinational multimedia firms will be able to dominate this space because of their control over key film, magazine, and television content, as well as key network and cable outlets. These organizations have numerous competitive advantages, such as the ability to acquire financing for their projects and to make favorable arrangements for the distribution of completed films. All of our competitors will likely be organizations of substantially larger size and capacity, with far greater financial and personnel resources and longer operating histories, and may be better able to acquire properties, personnel and financing, and enter into more favorable distribution agreements. Our success will depend on public taste, which is both unpredictable and susceptible to rapid change.
As an independent film production company, we most likely will not have the backing of a major studio for production and distribution support. Consequently, we may not be able to complete a motion picture.
In order to be competitive, we intend to create independent motion pictures that may appeal to a wide range of public taste both in the United States and abroad. Moreover, by producing our films in Canada we believe that we will be able to significantly reduce production costs, and thereby offer our films to distributors at competitive pricing. Investors must be aware that at this time we have not produced any film and may not ever be successful in doing so in the future.
Regulations
Big Sky is subject to the following governmental regulation and required to comply in the following areas:
5
Distribution Arrangements
We intend to release our films in the United States through existing distribution companies, primarily independent distributors. We will retain the right for ourselves to market the films on a jurisdiction-by-jurisdiction basis throughout the rest of the world and to market television and other uses separately. To the extent that we may engage in foreign distribution of our films, we will be subject to all of the governmental regulations of doing business abroad including, but not limited to, government censorship, exchange controls, and copying, and licensing or qualification. At this point it is not possible to predict, with certainty, the nature of the distribution arrangements and extent of exact governmental regulations that may impact our business.
Intellectual Property Rights
Rights to motion pictures are granted legal protection under the copyright laws of the United States and most foreign countries, including Canada. These laws provide substantial civil and criminal penalties for unauthorized duplication and exhibition of motion pictures. Motion pictures, musical works, sound recordings, artwork, and still photography are separately subject to copyright under most copyright laws. The results of such investigations may warrant legal action, by the owner of the rights, and, depending on the scope of the piracy, investigation by the Federal Bureau of Investigation and/or the Royal Canadian Mounted Police with the possibility of criminal prosecution. Under the copyright laws of Canada and the United States, copyright in a motion picture is automatically secured when the work is created and "fixed" in a copy. We intend to register our films for copyright with both the Canadian Copyright Office and the United States Copyright Office. Both offices will register claims to copyright and issue certificates of registration but neither will "grant" or "issue" copyrights. Only the expression (camera work, dialogue, sounds, etc.) fixed in a motion picture can be protected under copyright. Registration with the appropriate office establishes a public record of the copyright claim.
Censorship
An industry trade association, the Motion Picture Association of America, assigns ratings for age group suitability for domestic theatrical distribution of motion pictures under the auspices of its Code and Rating Administration. The film distributor generally submits its film to the Code and Rating Administration for a rating. We plan to follow the practice of submitting our motion pictures for ratings.
Labor Laws
Many of the screenplay writers, performers, directors and technical personnel in the entertainment industry who we intend to be involved in our productions are members of guilds or unions that bargain collectively on an industry-wide basis and may have state and governmental regulations that we must comply with.
Employees
Currently, the Company believes the services provided by its officers and directors are sufficient at this time.
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Item 1A
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Risk Factors
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Not required for a smaller reporting company.
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Item 1B
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Unresolved Staff Comments
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Not required for a smaller reporting company.
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Item 2
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Properties
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None.
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Item 3
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Legal Proceedings
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None.
6
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Item 4
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Mine Safety Disclosures |
Not applicable.
PART II
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Item 5
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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Our Common Stock is currently listed to trade in the over-the-counter securities market through OTC Markets Pink Sheets under the symbol “BGSI”.
The following table sets forth the quarterly high and low prices for our Common Stock since we began trading on January 20, 2011. The quotations reflect inter-dealer prices, without retail mark-up, markdown or commission, and may not necessarily represent actual transactions.
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Bid Prices ($)
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||
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Quarter Ending
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High
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Low
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June 30, 2012
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0.25
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0.07
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March 31, 2012
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0.07
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0.07
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December 31, 2011
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0.07
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0.07
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September 30, 2011
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0.07
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0.07
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June 30, 2011
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0.11
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0.07
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March 31, 2011
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0.24
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0.11
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Holders
As of June 30, 2012, we had 53 holders of our common stock.
Dividend Policy
The payment of dividends in the future rests within the discretion of our Board of Directors and will depend upon our earnings, capital requirements and financial condition, as well as other relevant factors. We do not intend to pay any cash dividends in the foreseeable future, but intend to retain all earnings, if any, for use in our business.
Equity Compensation Plan Information
None.
Recent Sales of Unregistered Securities
None.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
None.
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Item 6
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Selected Financial Data
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Not required for smaller reporting companies.
7
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Item 7
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Results of Operations
The following discussion of the financial condition and results of operations should be read in conjunction with the financial statements included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future.
Years ended June 30, 2012 and 2011:
Net Revenue
2012: $182,847
2011: $81,114
The increase in revenues for 2012 was related to increased revenue from the Ellis Martin Report.
Expenses
2012: $166,255
2011: $124,199
The increase in expenses for 2012 was related to increased professional fee costs associated with being a public company.
Net Profit (Loss)
2011: $15,415
2010: ($43,651)
Liquidity and Financial Condition
As of June 30, 2012, the Company had current assets of $5,583 and current liabilities of $62,783; our cash balance was $0.
We anticipate that additional capital will be required to implement our business plan for the next 12 months. In order to obtain the necessary capital, the Company may need to sell additional shares of common stock or borrow funds from private lenders.
Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses, fail to collect significant amounts owed to us or experience unexpected cash requirements that would force us to seek alternative financing. Further, if we issue additional equity or debt securities as a means of raising additional capital, stockholders may experience dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of common stock.
Summary of Significant Accounting Policies
See Note 3 to our financial statements.
Recent Accounting Pronouncements
See Note 3 to our financial statements.
Off-Balance Sheet Arrangements
None.
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Item 7A
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Quantitative and Qualitative Disclosures About Market Risk
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Not required for smaller reporting companies.
8
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Item 8
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Financial Statements and Supplementary Data
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See F-1 hereto.
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Item 9
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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None.
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Item 9A
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Controls and Procedures
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Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), are our controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Act is accumulated and communicated to our management, including our Chief Executive and Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Rules 13a-15(b) and 15d-15(b) under the Exchange Act, requires us to carry out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2012, being the date of our most recently completed fiscal year end. This evaluation was implemented under the supervision and with the participation of our Chief Executive and Financial Officer.
Based on that evaluation, our management, including our Chief Executive and Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are not effective in ensuring that information required to be disclosed in our Exchange Act reports is (1) recorded, processed, summarized and reported in a timely manner, and (2) accumulated and communicated to our management, including our Chief Executive and Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Management’s Annual Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control system was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation and fair presentation of our financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Our officers have assessed the effectiveness of our internal controls over financial reporting as of June 30, 2012. In making this assessment, management used the criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based upon its assessment, management concluded that, as of June 30, 2012, our internal control over financial reporting was not effective.
This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to an exemption for smaller reporting companies under Section 989G of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
9
Changes in Internal Control over Financial Reporting
During the final quarter of the year ended June 30, 2012, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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Item 9B
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Other Information
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None.
PART III
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Item 10
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Directors, Executive Officers and Corporate Governance
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Ellis Martin, 56
Chief Executive Officer, Chief Financial Officer, President and Director since inception.
From 2000 to present, Mr. Martin has been the Executive Producer of The Opportunity Show and is the President and CEO of the parent corporation, Sol Media International Ltd. Sol Media produces and airs syndicated financial and talk radio programs such as The Opportunity Show heard on radio stations across North America. Prior to this employment Mr. Martin has held a variety of broadcasting positions in California, New York and New Mexico. He has been a member of the Hollywood Screen Actor’s Guild since 1990. He is a founding director of the New Mexico Film Industry Coalition, as well as the Southwest Playwright’s Laboratory.
D. Brett Whitelaw, 58
Vice-President and Director since August 26, 2009.
Since January 2000, Mr. Whitelaw has been an officer and director of Conquest Resources Limited, which trades on the TSX Venture exchange under the ticker symbol “CQR” where he heads up the corporate development and investor relations department.
Mirza Santillan, 34
Vice-President and Secretary since inception.
Since 2007, Ms. Santillan has worked at Sol Media as the Director of Operations where she has been engaged in research, investigation and reporting in addition to her management role. During her tenure at Sol Media, she has assisted in the Company’s radio production of its syndicated national program, “The Opportunity Show.” As Director of Operations she has been responsible for management of the staff, scheduling guests and managing the financial needs of Sol Media. Prior to this employment, Ms. Santillan worked for the Law Offices of L. Edmund Kellogg as Office Manager and a paralegal. She is approved as a paralegal by the American Bar Association. She received her training at Pasadena City College.
Relationships
There are no familial relationships among our officers or directors. Our current directors and officers do not serve as a director for any other reporting companies. None of our directors or officers has been affiliated with any company that has filed for bankruptcy within the last five years. The Company is not aware of any proceedings to which any of the Company’s officers or directors, or any associate of any such officer or director, is a party adverse to the Company.
Director Qualifications
The Company has determined that Mr. Martin and Mr. Whitelaw are qualified to serve as directors due to their experience in film production, radio programming and public company obligations.
10
Code of Ethics
The Company’s Board of Directors has approved a Code of Ethics for management relating to financial disclosures and filings related to future reporting requirements. A copy of the Code of Ethics will be made available to you by contacting the Company at its headquarters.
Board Committees
The Board of Directors has no committees due to its small size. The Board acts as audit committee.
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Item 11
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Executive Compensation
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Name and Principal
Position
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Year
Ended
June 30
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Salary
$
|
Other Annual
Compensation
$
|
Total
$
|
||||
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Ellis Martin
|
2011
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30,300
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58,950
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89,250
|
||||
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CEO, CFO, Director
|
2012
|
54.975
|
82.115
|
137,090
|
||||
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Mirza Santillan
|
2011
|
4,047
|
-
|
4,057
|
||||
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VP, Secretary
|
2012
|
2,000
|
-
|
2,000
|
||||
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D. Brett Whitelaw
|
2011
|
-
|
-
|
-
|
||||
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VP, Director
|
2012
|
-
|
-
|
-
|
Director Compensation
None
Employment Agreements with our Executive Officers
None
Equity Compensation Plans
None.
|
Item 12
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
The following table provides the names of each person known to the Company to own more than 5% of the outstanding common stock as of June 30, 2012, and by the officers and directors, individually and as a group. Except as otherwise indicated, all shares are owned directly.
|
Title of Class
|
Name and Address
of Beneficial Owner
|
Amount of
Beneficial
Ownership
|
Percent
of Class*
|
||||
|
Common Stock
|
Ellis Martin
|
5,411,381
|
44.86
|
%
|
|||
|
Common Stock
|
Mirza Santillan
|
250,000
|
2.07
|
%
|
|||
|
Common Stock
|
D. Brett Whitelaw
|
5,015,000
|
41.46
|
%
|
|||
|
officer and directors as a group
|
10,676,381
|
88.39
|
%
|
*The percent of class is based on 12,063,381 shares of common stock issued and outstanding as of June 30, 2012
11
|
Item 13
|
Certain Relationships and Related Transactions, and Director Independence
|
Related Party Transactions
During the year ended June 30, 2012 and 2011, the Company received loans from related parties totaling $5,000 and $3,500 to fund operations with a total of $8,500 and $3,500 due as of June 30, 2012 and 2011. The loans are non-interest bearing, due on demand and as such are included in current liabilities.
During the year ended June 30, 2012, the Company paid $82,115 (2011 - $58,950) in commissions to a director and officer of the Company related to advertising sales during the period. As of June 30, 2012, $5,583 (June 30, 2011 - $20,800) has been deferred and recorded as an other current asset on the balance sheet.
During the year ended June 30, 2012 the Company incurred $2,000 (2011 - $4,057) in transcription and administrative services to an officer of the Company.
During the year ended June 30, 2012, the Company incurred $54,975 (2011 - $30,300) in management fees to a director and officer of the Company.
Director Independence
The Company has no independent directors.
|
Item 14
|
Principal Accounting Fees and Services
|
2012:
Our principal accountant for the year ended June 30, 2012 was L.L. Bradford.
|
Audit Fees:
|
$15,000
|
|
Audit-Related Fees:
|
$9,000
|
|
Tax Fees:
|
$0
|
|
All Other Fees:
|
$0
|
2011:
Our principal accountant for the year ended June 30, 2011 is L.L. Bradford.
|
Audit Fees:
|
$9,876 (1)
|
|
Audit-Related Fees:
|
$12,975 (2)
|
|
Tax Fees:
|
$0
|
|
All Other Fees:
|
$0
|
|
|
(1)
|
$4,876 of these fees were incurred by prior principal accountant Kyle L. Tingle, CPA, LLC.
|
|
|
(2)
|
$11,000 of these fees were incurred by prior principal accountant Davidson & Company LLP, and $1,975 of these fees were incurred by prior principal accountant Kyle L. Tingle, CPA, LLC.
|
12
PART IV
|
Item 15
|
Exhibits, Financial Statement Schedules
|
|
Number
|
Exhibit
|
|
31
|
Certification of Principal Executive and Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
32
|
Certification of Principal Executive and Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
101.INS*
|
XBRL Instance Document
|
|
101.SCH*
|
XBRL Taxonomy Extension Schema Document
|
|
101.CAL*
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.DEF*
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
101.LAB*
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
101.PRE*
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
* Pursuant to applicable securities laws and regulations, we are deemed to have complied with the reporting obligation relating to the submission of interactive data files in such exhibits and are not subject to liability under any anti-fraud provisions of the federal securities laws as long as we have made a good faith attempt to comply with the submission requirements and promptly amend the interactive data files after becoming aware that the interactive data files fail to comply with the submission requirements. Users of this data are advised that, pursuant to Rule 406T, these interactive data files are deemed not filed and otherwise are not subject to liability.
13
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
Big Sky Productions, Inc.
|
|
|
Date: August 27, 2013
|
/s/ Ellis Martin
|
|
Ellis Martin, Chief Executive Officer
|
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
|
Signature
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Title
|
Date
|
|
|
/s/ D. Brett Whitelaw
|
Director
|
August 27, 2013
|
|
| D. Brett Whitelaw | |||
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/s/ Ellis Martin
|
Director and Chief Executive Officer
(Principal Executive, Financial and Accounting Officer)
|
August 27, 2013
|
|
| Ellis Martin |
14
BIG SKY PRODUCTIONS, INC.
(A Development Stage Enterprise)
Financial Statements
June 30, 2012 and 2011
BIG SKY PRODUCTIONS, INC.
(A Development Stage Enterprise)
Financial Statements
June 30, 2012 and 2011
CONTENTS
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Page(s)
|
||
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Report of Independent Registered Accounting Firm
|
F-1
|
|
|
Balance Sheets as of June 30, 2012 and 2011
|
F-2
|
|
|
Statements of Operations for the years ended June 30, 2012 and 2011 and the period of February 28, 2008 (Inception) to June 30, 2012
|
F-3
|
|
|
Statement of Changes in Stockholders’ Deficit
|
F-4
|
|
|
Statements of Cash Flows for the years ended June 30, 2012 and 2011 and the period of February 28, 2008 (Inception) to June 30, 2012
|
F-5
|
|
|
Notes to the Financial Statements
|
F-6 – F-10
|
|
Report of Independent Registered Public Accounting Firm
Board of Directors and Stockholders
Big Sky Productions, Inc.
We have audited the accompanying balance sheets of Big Sky Productions as of June 30, 2012 and 2011 and the related statements of operations, stockholders’ deficit, and cash flows for the years ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Big Sky Productions as of June 30, 2011 and 2012 and the results of its operations, stockholders’ deficit, and cash flows for the years then ended in conformity accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has suffered losses from operations, which 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 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ L.L.Bradford &Company, LLC
Las Vegas, Nevada
August 27, 2013
F-1
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BIG SKY PRODUCTIONS, INC
|
||||||||
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(A Development Stage Enterprise)
|
||||||||
|
Balance Sheets
|
||||||||
|
June 30,
|
||||||||
|
2012
|
2011
|
|||||||
|
ASSETS
|
||||||||
|
Current assets
|
||||||||
|
Cash
|
$ | - | $ | 40,263 | ||||
|
Accounts receivable
|
- | 2,000 | ||||||
|
Prepaid expenses and other current assets (Note 5)
|
5,583 | 21,138 | ||||||
|
Total current assets
|
5,583 | 63,401 | ||||||
|
Equipment, net of accumulated depreciation of $7,380 and $715, respectively (Note 3)
|
5,479 | 6,046 | ||||||
|
Total assets
|
$ | 11,062 | $ | 69,447 | ||||
|
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
||||||||
|
Current liabilities
|
||||||||
|
Accounts payable
|
$ | 42,436 | $ | 38,796 | ||||
|
Bank overdraft
|
401 | - | ||||||
|
Note payable – related party, net of $767 and $0 discount, respectively (Note 5)
|
7,733 | 3,500 | ||||||
|
Deferred revenue
|
12,213 | 95,443 | ||||||
|
Total current liabilities
|
62,783 | 137,739 | ||||||
|
Stockholders' Deficit
|
||||||||
|
Common stock, $.001 par value; 75,000,000 shares authorized, 12,063,381 shares issued and outstanding as of June 30, 2012 and 2011, respectively
|
12,063 | 12,063 | ||||||
|
Additional paid in capital
|
82,751 | 81,595 | ||||||
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Deficit accumulated during the development stage
|
(146,535 | ) | (161,950 | ) | ||||
|
Total stockholders' deficit
|
(51,721 | ) | (68,292 | ) | ||||
|
Total liabilities and stockholders' deficit
|
$ | 11,062 | $ | 69,447 | ||||
|
The accompanying notes are an integral part to financial statements.
|
||||||||
F-2
|
BIGSKY PRODUCTIONS, INC
|
||||||||||||
|
(A Development Stage Enterprise)
|
||||||||||||
|
Statements of Operations
|
||||||||||||
|
From
February 28, 2008
(inception) to
June 30, 2012
|
||||||||||||
|
Years ended June 30,
|
||||||||||||
|
2012
|
2011
|
|||||||||||
|
Revenue
|
$ | 381,531 | $ | 160,955 | $ | 580,917 | ||||||
|
Cost of revenue
|
198,684 | 79,841 | 309,682 | |||||||||
|
Gross margin
|
182,848 | 81,114 | 271,236 | |||||||||
|
Operating Expenses
|
||||||||||||
|
Professional fees
|
111,862 | 98,149 | 325,609 | |||||||||
|
Depreciation
|
6,665 | 715 | 7,380 | |||||||||
|
General and administrative
|
47,728 | 25,335 | 83,041 | |||||||||
|
Total operating expenses
|
166,255 | 124,199 | 416,030 | |||||||||
|
Other income (expense)
|
||||||||||||
|
Gain on foreign currency exchange
|
- | 102 | 102 | |||||||||
|
Interest income
|
- | - | 3 | |||||||||
|
Other income
|
- | - | - | |||||||||
|
Interest expense
|
(1,177 | ) | (668 | ) | (1,845 | ) | ||||||
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Total other income (expense)
|
(1,177 | ) | (566 | ) | (1,740 | ) | ||||||
|
Net income (loss)
|
$ | 15,415 | $ | (43,651 | ) | $ | (146,535 | ) | ||||
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Basic and diluted income (loss) per common share
|
$ | (0.00 | ) | $ | 0.00 | |||||||
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Weighted average shares outstanding
|
12,063,381 | 12,063,381 | ||||||||||
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The accompanying notes are an integral part to financial statements.
|
||||||||||||
F-3
|
BIGSKY PRODUCTIONS, INC
|
||||||||||||||||||||
|
(A Development Stage Enterprise)
|
||||||||||||||||||||
|
Statement of Changes in Stockholders' Deficit
|
||||||||||||||||||||
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Common Stock
|
Additional
Paid In
Capital
|
Accumulated
Deficit
|
Total
|
|||||||||||||||||
|
Shares
|
Amount
|
|||||||||||||||||||
|
Balance, February 28, 2008 (Inception)
|
- | $ | - | $ | - | $ | - | $ | - | |||||||||||
|
Common stock issued for cash, $.001 per share
|
2,500,000 | 2,500 | - | - | 2,500 | |||||||||||||||
|
Common stock issued for services, $.0026 per share
|
8,161,381 | 8,161 | 12,897 | - | 21,058 | |||||||||||||||
|
Net loss, period ended June 30, 2008
|
- | - | - | (2,000 | ) | (2,000 | ) | |||||||||||||
|
Balance, June 30, 2008
|
10,661,381 | 10,661 | 12,897 | (2,000 | ) | 21,558 | ||||||||||||||
|
Net loss, year ended June 30, 2009
|
- | - | - | (71,748 | ) | (71,748 | ) | |||||||||||||
|
Balance, June 30, 2009
|
10,661,381 | 10,661 | 12,897 | (73,748 | ) | (50,190 | ) | |||||||||||||
|
Common stock issued for cash
|
1,070,000 | 1,070 | 52,430 | - | 53,500 | |||||||||||||||
|
Common stock issued for services
|
332,000 | 332 | 16,268 | - | 16,600 | |||||||||||||||
|
Net loss, year ended June 30, 2010
|
- | - | - | (44,551 | ) | (44,551 | ) | |||||||||||||
|
Balance, June 30, 2010
|
12,063,381 | 12,063 | 81,595 | (118,299 | ) | (24,641 | ) | |||||||||||||
|
Net loss, year ended June 30, 2011
|
- | - | - | (43,651 | ) | (43,651 | ) | |||||||||||||
|
Balance, June 30, 2011
|
12,063,381 | 12,063 | 81,595 | (161,950 | ) | (68,292 | ) | |||||||||||||
|
Imputed interest
|
1,156 | 1,156 | ||||||||||||||||||
|
Net income, year ended June 30, 2012
|
- | - | - | 15,415 | 15415 | |||||||||||||||
|
Balance, June 30, 2012
|
12,063,381 | 12,063 | 82,751 | (146,535 | ) | (51,721 | ) | |||||||||||||
|
The accompanying notes are an integral part to financial statements.
|
||||||||||||||||||||
F-4
|
BIGSKY PRODUCTIONS, INC
|
||||||||||||
|
(A Development Stage Enterprise)
|
||||||||||||
|
Statements of Cash Flows
|
||||||||||||
|
For the period
from February
28, 2008
(inception) to
June 30, 2012
|
||||||||||||
|
Year ended June 30,
|
||||||||||||
|
2012
|
2011
|
|||||||||||
|
Cash flows from operating activities
|
||||||||||||
|
Net income (loss)
|
$ | 15,415 | $ | (43,651 | ) | $ | (146,535 | ) | ||||
|
Adjustments to reconcile net loss to net cash used in operating activities
|
||||||||||||
|
Common stock issued for services
|
- | - | 37,658 | |||||||||
|
Depreciation
|
6,665 | 715 | 7,380 | |||||||||
|
Amortization of discount
|
389 | - | 389 | |||||||||
|
Changes in operating assets and liabilities
|
||||||||||||
|
Accounts receivable
|
2,000 | (1,550 | ) | - | ||||||||
|
Prepaid expenses and other current asset
|
15,555 | (18,702 | ) | (5,583 | ) | |||||||
|
Accounts payable
|
3,640 | 13,134 | 42,436 | |||||||||
|
Deferred revenue
|
(83,230 | ) | 92,345 | 12,213 | ||||||||
|
Net cash used in operating activities
|
(39,566 | ) | 42,291 | (52,042 | ) | |||||||
|
Cash flows from investing activities
|
||||||||||||
|
Purchase of equipment
|
(6,098 | ) | (6,761 | ) | (12,859 | ) | ||||||
|
Cash flows from investing activities
|
(6,098 | ) | (6,761 | ) | (12,859 | ) | ||||||
|
Cash flows from financing activities
|
||||||||||||
|
Bank overdraft
|
401 | - | 401 | |||||||||
|
Related party payable
|
5,000 | 3,500 | 8,500 | |||||||||
|
Proceeds from sale of stock
|
- | - | 56,000 | |||||||||
|
Net cash provided by financing activities
|
5,401 | 3,500 | 64,901 | |||||||||
|
Net change in cash
|
(40,263 | ) | 39,030 | - | ||||||||
|
Cash at beginning of period
|
40,263 | 1,233 | - | |||||||||
|
Cash at end of period
|
$ | - | $ | 40,263 | $ | - | ||||||
|
Supplemental disclosure of non-cash investing and financing activities:
|
||||||||||||
|
Issuance of common stock for professional and consulting services
|
$ | - | $ | - | $ | 37,658 | ||||||
|
Supplemental cash flow Information:
|
||||||||||||
|
Cash paid for interest
|
$ | - | $ | - | $ | 668 | ||||||
|
Cash paid for income taxes
|
$ | - | $ | - | $ | - | ||||||
|
The accompanying notes are an integral part to financial statements.
|
||||||||||||
F-5
BIG SKY PRODUCTIONS, INC.
(A Development Stage Enterprise)
Notes to Financial Statements
Note 1 – Nature of Business
Big Sky Productions, Inc. (the “Company”) was incorporated in the State of Nevada on February 28, 2008. Big Sky Productions, Inc. is developing a business plan as a producer of radio advertisements for small businesses. To date, our business activities have been limited to organizational matters, reselling of advertising time, developing our website and the preparation and filing of the registration statement. The Company has elected a fiscal year end of June 30.
Note 2 - Basis of Presentation:
The accompanying financial statements have been prepared by the Company in conformity with accounting principles generally accepted in the United States of America applicable to financial information and with the rules and regulations of the United States Securities and Exchange Commission. In the opinion of management, the financial statements include all adjustments necessary for the fair presentation of the results of the periods presented. All adjustments are of a normal recurring nature.
Note 3 – Significant Accounting Policies
Estimates
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 reporting period. Areas requiring the use of estimates include impairment of long lived assets, valuation allowance applied to deferred tax assets and useful lives used in the depreciation of equipment. Actual results could differ from those estimates.
Cash and Cash Equivalents
All highly liquid investments with maturity of three months or less are considered to be cash equivalents. There were no cash equivalents as of June 30, 2012 or 2011.
Income taxes
The Company accounts for income taxes under ASC 740 "Income Taxes" which codified SFAS 109, "Accounting for Income Taxes" and FIN 48 “Accounting for Uncertainty in Income Taxes – an Interpretation of FASB Statement No. 109.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.
F-6
BIG SKY PRODUCTIONS, INC.
(A Development Stage Enterprise)
Notes to Financial Statements
Note 3 - Significant Accounting Policies (continued)
Fair Value of Financial Instruments
The Company's financial instruments as defined by FASB ASC 825-10-50 include cash, accounts receivable, related party payable and accounts payable. The fair value of accounts receivable, related party payable and accounts payable approximate the financial statement carrying amounts due to the short-term maturities of these instruments.
FASB ASC 820 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements. ASC 820 establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows:
Level 1. Observable inputs such as quoted prices in active markets;
Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
Level 3. Unobservable inputs in which there is little or no market data, which requires the reporting entity to develop its own assumptions.
The Company’s cash was measured using level I inputs.
Earnings (Loss) Per Share Information
FASB ASC 260, “Earnings Per Share” provides for calculation of "basic" and "diluted" earnings (loss) per share. Basic earnings per share includes no dilution and is computed by dividing net income (loss) available to common shareholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity similar to fully diluted earnings per share. Basic and diluted loss per share were the same, at the reporting dates, as there were no common stock equivalents outstanding.
Share Based Expenses
ASC 718 "Compensation - Stock Compensation" codified SFAS No. 123 prescribes accounting and reporting standards for all stock-based payments award to employees, including employee stock options, restricted stock, employee stock purchase plans and stock appreciation rights. , may be classified as either equity or liabilities. The Company should determine if a present obligation to settle the share-based payment transaction in cash or other assets exists. A present obligation to settle in cash or other assets exists if: (a) the option to settle by issuing equity instruments lacks commercial substance or (b) the present obligation is implied because of an entity's past practices or stated policies. If a present obligation exists, the transaction should be recognized as a liability; otherwise, the transaction should be recognized as equity.
The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50 "Equity - Based Payments to Non-Employees" which codified SFAS 123 and the Emerging Issues Task Force consensus in Issue No. 96-18 ("EITF 96-18"), "Accounting for Equity Instruments that are Issued to Other Than Employees for Acquiring or in Conjunction with Selling, Goods or Services". Measurement of share-based payment transactions with non-employees shall be based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction should be determined at the earlier of performance commitment date or performance completion date.
F-7
BIG SKY PRODUCTIONS, INC.
(A Development Stage Enterprise)
Notes to Financial Statements
Note 3 - Significant Accounting Policies (continued)
Going concern
The Company's financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.
In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plans to obtain such resources for the Company include (1) obtaining capital from management and significant stockholders sufficient to meet its minimal operating expenses, and (2) as a last resort, seeking out and completing a merger with an existing operating company. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Revenue Recognition
The Company's financial statements are prepared under the accrual method of accounting. Revenues are recognized when evidence of an agreement exists, the price is fixed or determinable, collectability is reasonably assured and goods have been delivered or services performed.
The Company derives revenues from the sale of advertising space on its radio program “The Ellis Martin Report.” “The Ellis Martin Report” is a paid news magazine airing on select AM radio stations in the United States. Clients and/or guests compensate the Company for time on this program to expose their business or stories to the listening audience.
Advertising contracts are structured to run for a time period between 30 and 120 days. Accordingly, revenues are recognized on a pro-rata basis resulting in recognized revenue and deferred revenue of $12,213 and $95,443 respectively for and as of the year ended June 30, 2012.
Recent Accounting Pronouncements
The Company has evaluated recent accounting pronouncements and their adoption has not had or is not expected to have a material impact on the Company’s financial position, or statements.
F-8
BIG SKY PRODUCTIONS, INC.
(A Development Stage Enterprise)
Notes to Financial Statements
Note 3 - Significant Accounting Policies (continued)
Property and Equipment
Property and equipment are carried at cost. Expenditures for maintenance and repairs are charged against operations. Renewals and betterments that materially extend the life of the assets are capitalized. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in income for the period.
Depreciation is computed for financial statement purposes on a straight-line basis over estimated useful lives of the related assets. The estimated useful lives of depreciable assets are:
|
Estimated Useful Lives
|
|
|
Furniture and Fixtures
|
5 - 10 years
|
|
Computer Equipment
|
2 - 5 years
|
|
Vehicles
|
5 - 10 years
|
For federal income tax purposes, depreciation is computed under the modified accelerated cost recovery system. For audit purposes, depreciation is computed under the straight-line method. At June 30, 2012 and 2011, the Company had the following property and equipment:
|
June 30,
|
||||||||
|
2012
|
2011
|
|||||||
|
Leasehold improvements
|
$ | 2,795 | $ | - | ||||
|
Computer and video equipment
|
10,064 | 6,761 | ||||||
|
Sub Total
|
$ | 12,859 | $ | 6,761 | ||||
|
Accumulated depreciation
|
(7,380 | ) | (715 | ) | ||||
|
Total
|
$ | 5,479 | $ | 6,046 | ||||
Note 4 - Segmented Information
The Company operates in one reportable business segment, being the sale of advertising space. All revenues for the years ended June 30, 2012 and 2011 were earned in the United States. All equipment is located in the United States.
Note 5 – Related Party Transactions
During the year ended June 30, 2012, the Company received cash advances totaling $5,000 from a related party to fund operations. As of June 30, 2012, the total amount owing to related parties was $8,500.
Notes payable consisted of the following at June 30:
|
June 30, 2012
|
June 30, 2011
|
|||||||
|
Related Party payable
|
$ | 8,500 | $ | 3,500 | ||||
|
Discount on note
|
(767 | ) | - | |||||
|
Net Total
|
$ | 7,733 | $ | 3,500 | ||||
The loans are non-interest bearing, due on demand and as such are included in current liabilities. The Company has imputed interest at a rate of approximately 5% for each of the aforementioned notes, which has been recorded as a discount to each note with an increase in paid in capital. Imputed interest expense for the years ended June 30, 2012 and 2011 was $389 and $0, respectively.
F-9
BIG SKY PRODUCTIONS, INC.
(A Development Stage Enterprise)
Notes to Financial Statements
Note 5 – Related Party Transactions (continued)
During the year ended June 30, 2012, the Company paid $82,115 (2011 - $58,950) in commissions to a director and officer of the Company related to advertising sales during the period. As of June 30, 2012, $5,583 (June 30, 2011 - $20,800) has been deferred and recorded as an other current asset on the balance sheet.
During the year ended June 30, 2012 the Company incurred $2,000 (2011 - $4,057) in transcription and administrative services to an officer of the Company.
During the year ended June 30, 2012, the Company incurred $54,975 (2011 - $30,300) in management fees to a director and officer of the Company.
Note 6 – Income Taxes
The Company recognizes the tax effects of transactions in the year in which such transactions enter into the determination of net income, regardless of when reported for tax purposes. Deferred taxes are normally provided in the financial statements under ASC Topic No. 740 to give effect to the resulting temporary differences which may arise from differences in the bases of fixed assets, depreciation methods, allowances, and start-up costs based on the income taxes expected to be payable in future years. Operating loss carry forwards generated during the period from February 28, 2008 (date of inception) through June 30, 2012 of $146,535 will begin to expire in 2028, and may be limited by the provisions of Internal Revenue Code Section 382 and other provisions as to their utilization. Deferred tax assets of approximately $53,026 have been completely offset by a valuation allowance that increased by $18,750 and decreased by $5,531 during the years ended June 30, 2012 and 2011, respectively.
The Company follows the provisions of uncertain tax positions as addressed in FASC 740-10-65-1. The Company recognized no increase in the liability for unrecognized tax benefits. The Company has no tax positions at June 30, 2012 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. No such interest or penalties were recognized during the periods presented. The Company had no accruals for interest and penalties at June 30, 2012 or 2011.
Note 7 – Stockholders’ Deficit
Common Stock
On February 28, 2008, the Company was formed with one class of common stock, par value $0.001. The Company authorized 75,000,000 shares of common stock. At June 30, 2012 and 2011, the Company had 12,063,381 common shares issued and outstanding. There are no preferred shares authorized, issued or outstanding. The Company has no stock option plan, warrants or other dilutive securities.
Net loss per common share
Net loss per share is calculated in accordance with FASB ASC 260, “Earnings Per Share.” The weighted-average number of common shares outstanding during each period is used to compute basic loss per share. Diluted loss per share is computed using the weighted average number of shares and dilutive potential common shares outstanding. Dilutive potential common shares are additional common shares assumed to be exercised.
Note 8 – Subsequent Events
The Company has evaluated subsequent events through the date of this filing and determined there are none to disclose.
F-10