Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 2014
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from __________ to ____________
Commission file number 000-55049
REDSTONE LITERARY AGENTS INC.
(Exact name of registrant as specified in its charter)
Nevada N/A
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.
1842 E Campo Bello Drive, Phoenix, AZ 85022
(Address of principal executive offices) (Zip Code)
602.867.0160
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year,
if changed since last report)
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 preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss. 232.405
of this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). Yes [X] No [ ]
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
definitions of "large accelerated filer," "accelerated filer," and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 6,000,000 common shares issued
and outstanding as at August 14, 2014.
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements........................................... 3
Item 2.Management's Discussion and Analysis of Financial Condition
and Results of Operations....................................... 12
Item 3. Quantitative and Qualitative Disclosures About Market Risk..... 15
Item 4. Controls and Procedures........................................ 16
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.............................................. 16
Item 1A. Risk Factors.................................................. 16
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.... 16
Item 3. Defaults Upon Senior Securities................................ 16
Item 4. Mine Safety Disclosures........................................ 17
Item 5. Other Information.............................................. 17
Item 6. Exhibits....................................................... 17
SIGNATURES.................................................................. 18
2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
Our unaudited financial statements are stated in United States dollars and are
prepared in accordance with United States generally accepted accounting
principles.
It is the opinion of management that the unaudited interim financial statements
for the quarter ended June 30, 2014 include all adjustments necessary in order
to ensure that the unaudited interim financial statements are not misleading.
3
Redstone Literary Agents, Inc.
(A Development Stage Company)
Condensed Balance Sheets
--------------------------------------------------------------------------------
June 30, December 31,
2014 2013
-------- --------
(Unaudited) (Audited)
ASSETS
CURRENT ASSETS
Cash & Cash Equivalents $ 115 $ 23,665
-------- --------
Total Current Assets 115 23,665
-------- --------
TOTAL ASSETS $ 115 $ 23,665
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Loans from related party $ 9,717 $ 9,527
-------- --------
Total Current Liabilities 9,717 9,527
-------- --------
TOTAL LIABILITIES 9,717 9,527
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $0.001 par value, 75,000,000 shares authorized;
6,000,000 shares issued and outstanding: 6,000 6,000
Additional paid-in-capital 54,000 54,000
Deficit accumulated during the development stage (69,602) (45,862)
-------- --------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (9,602) 14,138
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 115 $ 23,665
======== ========
The accompanying notes are an integral part of these
condensed unaudited financial statements.
4
Redstone Literary Agents, Inc.
(A Development Stage Company)
Condensed Statement of Operations
(Unaudited)
--------------------------------------------------------------------------------
Accumulated
From Inception
Six Months Six Months Three Months Three Months Date of
Ended Ended Ended Ended (July 20, 2010) to
June 30, June 30, June 30, June 30, June 30,
2014 2013 2014 2013 2014
---------- ---------- ---------- ---------- ----------
REVENUE $ -- $ -- $ -- $ -- $ 11,150
OPERATING EXPENSES
Bank charges 300 102 144 51 1,599
Consulting fees 3,600 700 3,150 250 15,980
Professional fees 4,750 4,750 2,750 1,500 29,950
Filing and transfer fees 15,090 1,953 3,090 1,145 23,646
Office expenses -- 325 -- 325 9,577
---------- ---------- ---------- ---------- ----------
Total operating expenses 23,740 7,830 9,134 3,271 80,752
---------- ---------- ---------- ---------- ----------
Net loss from operations (23,740) (7,830) (9,134) (3,271) (69,602)
Provision for taxes -- -- -- -- --
---------- ---------- ---------- ---------- ----------
Net loss $ (23,740) $ (7,830) $ (9,134) $ (3,271) $ (69,602)
========== ========== ========== ========== ==========
LOSS PER COMMON SHARE -
BASIC AND DILUTED $ (0.00)* $ (0.00)* $ (0.00)* $ (0.00)*
========== ========== ========== ==========
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING BASIC AND DILUTED 6,000,000 6,000,000 6,000,000 6,000,000
========== ========== ========== ==========
----------
* denotes a loss of less than $(0.01) per share.
The accompanying notes are an integral part of these
condensed unaudited financial statements.
5
Redstone Literary Agents, Inc.
Condensed Statement of Changes Stockholders' Equity (Deficit)
(A Development Stage Company)
(Unaudited)
--------------------------------------------------------------------------------
Deficit Total
Accumulated Stock-
Number of Additional Total During the holders'
Common Par Paid-in Capital Development Equity
Shares Value Capital Stock Stage (Deficit)
------ ----- ------- ----- ----- ---------
Balance, July 20, 2010
(Inception) - audited -- $ -- $ -- $ -- $ -- $ --
Common Shares issued for cash
at $0.005 on July 20, 2010 3,000,000 $ 3,000 $12,000 $ 15,000 $ -- $ 15,000
Share subscription receivable -- -- -- (5,000) -- (5,000)
Net loss for the period -- -- -- -- (770) (770)
--------- ------- ------- -------- -------- ---------
Balance, December 31, 2010 -
audited 3,000,000 3,000 12,000 10,000 (770) 9,230
Net loss for the year -- -- -- -- (13,310) (13,310)
--------- ------- ------- -------- -------- ---------
Balance, December 31, 2011 -
audited 3,000,000 3,000 12,000 10,000 (14,080) (4,080)
Common Shares issued for cash at
$0.015 on January 27, 2012 3,000,000 3,000 42,000 45,000 -- 45,000
Share subscription received -- -- -- 5,000 -- 5,000
Net loss for the year -- -- -- -- (13,292) (13,292)
--------- ------- ------- -------- -------- ---------
Balance, December 31, 2012 -
audited 6,000,000 6,000 54,000 60,000 (27,372) 32,628
Net loss for the year -- -- -- -- (18,490) (18,490)
--------- ------- ------- -------- -------- ---------
Balance, December 31, 2013 -
audited 6,000,000 6,000 54,000 60,000 (45,862) 14,138
Net loss for the period -- -- -- -- (23,740) (23,740)
--------- ------- ------- -------- -------- ---------
Balance, June 30, 2014 -
unaudited 6,000,000 $ 6,000 $54,000 $ 60,000 $(69,602) $ (9,602)
========= ======= ======= ======== ======== =========
The accompanying notes are an integral part of these
condensed unaudited financial statements.
6
Redstone Literary Agents, Inc.
Condensed Statements of Cash Flows
(A Development Stage Company)
(Unaudited)
--------------------------------------------------------------------------------
Accumulated
From Inception
Six Months Six Months Date of
Ended Ended (July 20, 2010) to
June 30, June 30, June 30,
2014 2013 2014
-------- -------- --------
OPERATING ACTIVITIES
Net loss for the period $(23,740) $ (7,830) $(69,602)
Adjustments to reconcile net loss to net cash
Provided by (used in) operating activities
Changes in operating assets and liabilities
Loan for related party 190 -- 717
-------- -------- --------
Net cash (used in) operating activities (23,550) (7,830) (68,885)
INVESTING ACTIVITIES -- -- --
-------- -------- --------
Net cash provided by (used in) investing activities -- -- --
FINANCING ACTIVITIES
Proceeds from sale of common stock -- -- 60,000
Proceeds from loans from related party -- -- 9,000
-------- -------- --------
Net cash provided by financing activities -- -- 69,000
Net changes in cash and equivalents (23,550) (7,830) 115
Cash and equivalents at beginning of the period 23,665 41,789 --
-------- -------- --------
Cash and equivalents at end of the period $ 115 $ 33,959 $ 115
======== ======== ========
The accompanying notes are an integral part of these
condensed unaudited financial statements.
7
Redstone Literary Agents, Inc.
(A Development Stage Company)
Notes to Condensed Unaudited Financial Statements
For the Three and Six Month Periods Ended June 30, 2014 and 2013 and
the Period from July 20, 2010 (Inception) to June 30, 2014
(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 ("Inception"), 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.
GOING CONCERN
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 $69,602 as at June 30, 2014 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.
UNAUDITED INTERIM FINANCIAL INFORMATION
The accompanying unaudited interim financial statements and related notes have
been prepared in accordance with accounting principles generally accepted in the
United States of America ("U.S. GAAP") for interim financial information, and
with the rules and regulations of the United States Securities and Exchange
Commission ("SEC") to Form 10-Q and Article 8 of Regulation S-X. Accordingly,
they do not include all of the information and footnotes required by U.S. GAAP
for complete financial statements. The unaudited interim financial statements
furnished reflect all adjustments (consisting of normal recurring accruals)
which are, in the opinion of management, necessary to a fair statement of the
results for the interim periods presented. Unaudited interim results are not
necessarily indicative of the results for the full fiscal year. These unaudited
interim consolidated financial statements should be read in conjunction with the
financial statements of the Company for the year ended December 31, 2013 and
notes thereto contained in the information as part of the Company's Annual
Report on Form 10-K, which was filed with the Securities and Exchange Commission
on April 10, 2014.
DEVELOPMENT STAGE COMPANY
The Company is a development stage company as defined by section 915-10-20 of
the FASB Accounting Standards Codification and among the additional disclosures
required as a development stage company are that its financial statements were
identified as those of a development stage company, and that the statements of
operations, stockholders' deficit and cash flows disclosed activity since the
date of its inception (July 20,2010) as a development stage company Effective
June 10, 2014 FASB changed its regulations with respect to Development Stage
Entities and these additional disclosures are no longer required for annual
reporting periods beginning after December 15, 2014 with the option for entities
to early adopt these new provisions. The Company has not elected to early adopt
these provisions and consequently these additional disclosures are included in
these financial statements.
8
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.
CASH AND CASH EQUIVALENTS
For purposes of the statement of cash flows, the Company considers all highly
liquid instruments purchased with an original maturity of three months or less
to be cash equivalents.
IMPAIRMENT OF LONG-LIVED ASSETS
The Company, when applicable, continually monitors events and changes in
circumstances that could indicate carrying amounts of long-lived assets may not
be recoverable. When such events or changes in circumstances are present, the
Company assesses the recoverability of long-lived assets by determining whether
the carrying value of such assets will be recovered through undiscounted
expected future cash flows. If the total of the future cash flows is less than
the carrying amount of those assets, the Company recognizes an impairment loss
based on the excess of the carrying amount over the fair value of the assets.
Assets to be disposed of are reported at the lower of the carrying amount or the
fair value less costs to sell. The Company had no long-lived assets during the
three and six month periods ended June 30, 2014 and 2013.
FINANCIAL INSTRUMENTS
Fair value measurements are determined based on the assumptions that market
participants would use in pricing an asset or liability. Accounting Standards
Codification ("ASC") 820-10 establishes a hierarchy for inputs used in measuring
fair value that maximizes the use of observable inputs and minimizes the use of
unobservable inputs by requiring that the most observable inputs be used when
available. ASC 820 establishes a fair value hierarchy that prioritizes the use
of inputs used in valuation methodologies into the following three levels:
Level 1: Quoted prices (unadjusted) for identical assets or liabilities in
active markets. A quoted price in an active market provides the most reliable
evidence of fair value and must be used to measure fair value whenever
available.
Level 2: Significant other observable inputs other than Level 1 prices such as
quoted prices for similar assets or liabilities; quoted prices in markets that
are not active; or other inputs that are observable or can be corroborated by
observable market data.
Level 3: Significant unobservable inputs which reflect a reporting entity's own
assumptions about the assumptions that market participants would use for pricing
an asset or liability. For example, level 3 inputs would relate to forecasts of
future earnings and cash flows used in a discounted future cash flows method.
The Company's financial instruments consist of cash and loans from related
parties. The recorded values of all these financial instruments approximate
their current fair values because of the short term nature of 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
9
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, 2014, a full deferred tax asset valuation allowance has been
provided and no deferred tax asset has been recorded.
DIVIDENDS
The Company has not adopted any policy regarding payment of dividends. No
dividends have been paid during any of the periods shown.
REVENUE RECOGNITION
The Company recognizes revenue in accordance with Accounting Standards
Codification No. 605, "Revenue Recognition" ("ASC-605"), ASC-605 requires that
four basic criteria must be met before revenue can be recognized: (1) persuasive
evidence of an arrangement exists; (2) delivery has occurred; (3) the selling
price is fixed and determinable; and (4) collectability is reasonably assured.
Determination of criteria (3) and (4) are based on management's judgments
regarding the fixed nature of the selling prices of the products delivered and
the collectability of those amounts.
ADVERTISING COSTS
The Company's policy regarding advertising is to expense advertising when
incurred. The Company incurred advertising expense of $0 during the three and
six months ended June 30, 2014 and 2013.
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.
(EARNINGS (LOSS) 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 debt or equity instruments issued or
outstanding during the three and six months ended June 30, 2014 or 2013.
RECENT ACCOUNTING PRONOUNCEMENTS
The Company has reviewed all recently issued, but not yet effective, accounting
pronouncements and does not believe the future adoption of any such
pronouncements may be expected to cause a material impact on our financial
condition or the results of its operations other than in respect of the new
regulations relating to Development Stage Entities as discussed above
RECLASSIFICATIONS
Certain amounts previously presented for prior periods have been reclassified.
The reclassifications had no effect on net loss, total assets, or total
shareholders' equity.
10
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.
As of June 30, 2014, the Company has issued 6,000,000 shares of common stock for
total cash proceeds of $60,000.
No stock options were issued or outstanding during the three or six months ended
June 30, 2014 or 2013.
4. INCOME TAXES
As of June 30, 2014, the Company had net operating loss carry forwards of
approximately $69,602 that may be available to reduce future years' taxable
income through 2030. This carry forward may be limited upon the consummation of
a business combination under IRC Section 382. 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. RELATED PARTY TRANSACTIONS
In support of the Company's efforts and cash requirements, it may rely on
advances from related parties until such time that the Company can support its
operations or attains adequate financing through sales of its equity or
traditional debt financing. There is no formal written commitment for continued
support by shareholders. Amounts represent advances or amounts paid in
satisfaction of liabilities. The advances are considered temporary in nature and
have not been formalized by a promissory note.
As of June 30, 2014, the Company had a loan outstanding with the Company's
shareholder in the amount of $9,717 with a 4% annual interest rate.
6. SUBSEQUENT EVENTS
In preparing these financial statements, the Company has analyzed its operations
subsequent to June 30, 2014 to the date these financial statements were
available to be issued on August 14, 2014, and has determined that it does not
have any material subsequent events to disclose in these financial statements.
11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
FORWARD-LOOKING STATEMENTS
Some of the statements contained in this Form 10-Q that are not historical facts
are "forward-looking statements" which can be identified by the use of
terminology such as "estimates," "projects," "plans," "believes," "expects,"
"anticipates," "intends," or the negative or other variations, or by discussions
of strategy that involve risks and uncertainties. We urge you to be cautious of
the forward-looking statements, that such statements, which are contained in
this Form 10-Q, reflect our current beliefs with respect to future events and
involve known and unknown risks, uncertainties and other factors affecting our
operations, market growth, services, products and licenses. No assurances can be
given regarding the achievement of future results, as actual results may differ
materially as a result of the risks we face, and actual events may differ from
the assumptions underlying the statements that have been made regarding
anticipated events.
All written forward-looking statements made in connection with this Form 10-Q
that are attributable to us or persons acting on our behalf are expressly
qualified in their entirety by these cautionary statements. Given the
uncertainties that surround such statements, you are cautioned not to place
undue reliance on such forward-looking statements.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 2014 COMPARED TO THE THREE MONTHS ENDED JUNE 30,
2013
REVENUE
We had no revenue for the three months ended June 30, 2014 and 2013 reflecting
our status as a development stage company.
OPERATING EXPENSES
We incurred operating expenses of $9,134 and $3,271 for the three months ended
June 30, 2014 and 2013, respectively. The increase in operating expenses between
the two periods related primarily to the increase in filing and transfer agent
fees.
NET LOSS
We incurred a net loss of $9,134 and $3,271 for the three months ended June 30,
2014 and 2013, respectively, due to the factors discussed above.
SIX MONTHS ENDED JUNE 30, 2014 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 2013
REVENUE
We had no revenue for the six months ended June 30, 2014 and 2013 reflecting our
status as a development stage company.
12
OPERATING EXPENSES
We incurred operating expenses of $23,740 and $7,830 for the six months ended
June 30, 2014 and 2013, respectively. The increase in operating expenses between
the two periods related primarily to the increase in filing and transfer agent
fees.
NET LOSS
We incurred a net loss of $23,740 and $7,830 for the six months ended June 30,
2014 and 2013, respectively, due to the factors discussed above.
LIQUIDITY AND CAPITAL RESOURCES
These financial statements have been prepared on a going concern basis which
assumes that our company will be able to realize its assets and discharge its
liabilities in the normal course of business for the foreseeable future. We have
incurred losses since inception resulting in an accumulated deficit of
$(69,602) as at June 30, 2014 and further losses are anticipated in the
development of its business raising substantial doubt about our company's
ability to continue as a going concern. The ability to continue as a going
concern is dependent upon our company generating profitable operations in the
future and, or, obtaining 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, loans from directors and/or other related parties or
raising additional capital through equity or debt financings.
The following table provides selected financial data about our company for the
period ended June 30, 2014:
Balance Sheet Data June 30, 2014
------------------ -------------
Cash $ 115
Total assets $ 115
Total liabilities $ 9,717
Shareholders' Deficit $(9,602)
As of June 30, 2014, our company had a loan outstanding with our of company's
shareholders in the amount of $9,717. The loan bears an interest rate of 4%, due
upon demand and unsecured.
We currently have no plans to hire additional employees in the next twelve
months unless sales are sufficient to cover the cost.
CASH FLOW INFORMATION FOR THE SIX MONTHS ENDED JUNE 30, 2014 COMPARED TO THE SIX
MONTHS ENDED JUNE 30, 2013
OPERATING ACTIVITIES
During the six months ended June 30, 2014 we used $23,550 in operating
activities compared to $7,830 in the six months ended June 30, 2013. The
increase between 2013 and 2014 primarily relates to the increase in net loss
between the two periods.
13
INVESTING ACTIVITIES
During the six months ended June 30, 2014 and 2013, we neither generated, nor
used, any funds from investing activities.
FINANCING ACTIVITIES
During the six months ended June 30, 2014, we neither generated, nor used, any
funds from financing activities.
CURRENT BUSINESS AND PLAN OF OPERATION
While we continue attempting to advance our current business of representing
authors to publishers, we will be concurrently seeking other business
opportunities with established business entities for the merger or other form of
business combination with our company.
LITERARY BUSINESS
As stated in our last quarterly report, we will be doing research about upcoming
book fairs. We need to also secure a few vendor events that are low cost for us
to be able to exhibit our services. If we are able to identify any authors, we
will be working on draft transcripts for these authors and we will also be
working with established authors to assist them in promoting their publications
via marketing communications practices.
However, competition in the literary industry is fierce. If we cannot
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.
OTHER BUSINESS OPPORTUNITIES
We will also be seeking new business opportunities with established business
entities for the merger or other form of business combination with our company.
We anticipate that any new acquisition or business opportunities that we may
acquire will require additional financing. There can be no assurance, however,
that we will be able to acquire the financing necessary to enable us to pursue
our plan of operation and enter into such an agreement. If our company requires
additional financing and we are unable to acquire such funds, our business may
fail.
Even if we are able to enter into a business opportunity and obtain the
necessary funding, there is no assurance that we will be able to generate any
revenues and that any such revenues generated would be sufficient to provide a
return to investors.
We may seek a business opportunity with entities that have recently commenced
operations, or entities that wish to utilize the public marketplace in order to
raise additional capital in order to expand business development activities, to
develop a new product or service, or for other corporate purposes. We may
acquire assets and establish wholly-owned subsidiaries in various businesses or
acquire existing businesses as subsidiaries.
14
In implementing a structure for a particular business acquisition or
opportunity, we may become a party to a merger, consolidation, reorganization,
joint venture, or licensing agreement with another corporation or entity. We may
also acquire stock or assets of an existing business. Upon the consummation of a
transaction, it is likely that our present management will no longer be in
control of our company. In addition, it is likely that our sole officer and
director will, as part of the terms of the acquisition transaction, resign and
be replaced by one or more new officers and directors.
We anticipate that the selection of a business opportunity in which to
participate will be complex and without certainty of success. We believe that
there are numerous firms in various industries seeking the perceived benefits of
being a publicly reporting corporation. Business opportunities may be available
in many different industries and at various stages of development, all of which
will make the task of comparative investigation and analysis of such business
opportunities extremely difficult and complex. Business opportunities that we
believe are in the best interests of our company may be scarce or we may be
unable to obtain the ones that we want. We can provide no assurance that we will
be able to locate compatible business opportunities.
CASH REQUIREMENTS
We anticipate that our cash on hand will not be sufficient to satisfy all of our
cash requirements for the next twelve month period. We currently do not have
committed sources of additional financing and may not be able to obtain
additional financing, particularly, if the volatile conditions in the stock and
financial markets persist. If we require any additional financing, we plan to
raise any such additional capital primarily through equity or debt financing,
provided that such funding continues to be available to our company. There is no
assurance that we will be able to obtain further funds required for our
continued operations or that additional financing will be available to us when
needed or, if available, that it can be obtained on commercially reasonable
terms. If we are not able to obtain additional financing as required on a timely
basis, we will not be able to meet certain obligations as they become due and we
will be forced to scale down or perhaps even cease our operations.
In their report on our financial statements for the year ended December 31,
2013, our independent auditors included an explanatory paragraph regarding the
substantial doubt about our ability to continue as a going concern. We have not
yet achieved profitable operations, have accumulated losses since our inception
and expect to incur further losses in the development of our business, all of
which raise substantial doubt about our ability to continue as a going concern.
Our ability to continue as a going concern is dependent upon our ability to
generate future profitable operations and/or to obtain the necessary financing
to meet our obligations and repay our liabilities arising from normal business
operations when they come due. The issuance of additional equity securities by
us could result in a significant dilution in the equity interests of our current
stockholders. Obtaining commercial loans, assuming those loans would be
available, will increase our liabilities and future cash commitments.
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 are material to investors.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable.
15
ITEM 4. CONTROLS AND PROCEDURES.
DISCLOSURE CONTROLS AND PROCEDURES
We maintain "disclosure controls and procedures", as that term is defined in
Rule 13a-15(e) and Rule 15d-15(e), promulgated by the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934. Disclosure controls
and procedures include controls and procedures designed to ensure that
information required to be disclosed in our company's reports filed under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported
within the time periods specified in the Securities and Exchange Commission's
rules and forms, and that such information is accumulated and communicated to
our management, including our principal executive officer and principal
financial officer to allow timely decisions regarding required disclosure.
As of the end of the period covered by this quarterly report, our management,
with the participation of our principal executive officer and principal
financial officer, evaluated our company's disclosure controls and procedures.
Based on this evaluation, our principal executive officer and principal
financial officer concluded that as of the end of the period covered by this
quarterly report, our disclosure controls and procedures were effective.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no changes in our internal control over financial reporting during
the fiscal quarter ended June 30, 2014, that have materially affected, or are
reasonably likely to materially affect our internal control over financial
reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
We know of no material pending legal proceedings to which our company is a party
or of which any of our properties is the subject. In addition, we do not know of
any such proceedings contemplated by any governmental authorities.
We know of no material proceedings in which any of our directors, officers or
affiliates, or any registered or beneficial stockholder is a party adverse to
our company or has a material interest adverse to our company.
ITEM 1A. RISK FACTORS.
Not applicable.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
Since the beginning of the fiscal quarter ended June 30, 2014, we have not sold
any equity securities that were not registered under the Securities Act of 1933
that were not previously reported in an annual report on Form 10-K, a quarterly
report on Form 10-Q or a current report on Form 8-K.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
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ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS.
Exhibit
Number Description of Exhibit
------ ----------------------
3.1 Articles of Incorporation (incorporated by reference from our
Registration Statement on Form S-1 filed on March 30, 2011)
3.2 Bylaws (incorporated by reference from our Registration Statement on
Form S-1 filed on March 30, 2011)
31.1* Section 302 Certification under Sarbanes-Oxley Act of 2002 of Mary S.
Wolf
32.1* Section 906 Certification under Sarbanes-Oxley Act of 2002 of Mary S.
Wolf
101.INS* XBRL Instance Document
101.SCH* XBRL Taxonomy Extension Schema
101.CAL* XBRL Taxonomy Extension Calculation Linkbase
101.DEF* XBRL Taxonomy Extension Definition Linkbase
101.LAB* XBRL Taxonomy Extension Label Linkbase
101.PRE* XBRL Taxonomy Extension Presentation Linkbase
----------
* Filed herewith
17
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
REDSTONE LITERARY AGENTS INC.
/s/ Mary S. Wolf
-------------------------------------------------
Mary S. Wolf
President, Treasurer, Secretary and Director
(Principal Executive Officer, Principal Financial
Officer and Principal Accounting Officer)
Dated: August 14, 2014
1
