U.S. Securities and Exchange Commission
Washington D.C. 20549
Form 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2005
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ______________ to _______________
Commission file number 0-50164
DOLPHIN PRODUCTIONS, INC.
(Exact name of small business issuer as specified in its charter)
Nevada 87-0618756
------------------------------------ -------------------------------------
(State or other jurisdiction of (Employer Identification No.)
incorporation or organization)
2068 Haun Avenue, Salt Lake City, Utah 84121
(Address of principal executive offices)
(801) 450-0716
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the
past 90 days.
Yes (X) No ( )
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 770,000 as of June 30,
2005.
DOLPHIN PRODUCTIONS, INC.
INDEX TO FORM 10-QSB
PAGE
PART I FINANCIAL INFORMATION NUMBER
Item 1. Financial Statements for DOLPHIN PRODUCTIONS, INC. 3-9
Unaudited Condensed Balance Sheets
June 30, 2005 and September 30, 2004
Unaudited Condensed Statements of Operations -
Three Months Ended June 30, 2005 and June 30, 2004
Nine Months Ended June 30, 2005 and June 30, 2004
and from inception on June 28, 1998 through June 30,
2005
Unaudited Condensed Statements of Cash Flows - Nine
Months Ended June 30, 2005 and June 30, 2004 and
from inception on June 28, 1998 through June 30,
2005
Notes to Unaudited Condensed Financial Statements
Item 2. Management's Discussion and Analysis of 10
Financial Condition and Results of Operation
Item 3. Controls and Procedures 11
PART II OTHER INFORMATION 11
SIGNATURE 11
Item 1. Financial Statements for DOLPHIN PRODUCTIONS, INC.
DOLPHIN PRODUCTIONS, INC.
[A Development Stage Company]
UNAUDITED CONDENSED BALANCE SHEETS
ASSETS
June 30, September 30,
2005 2004
___________ ___________
CURRENT ASSETS:
Cash $ 13,519 $ 21,002
Income taxes receivable - 730
___________ ___________
Total Current Assets 13,519 21,732
___________ ___________
$ 13,519 $ 21,732
___________ ___________
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 875 $ 1,709
Accrued payroll taxes - 2,994
State Sales Tax Payable 52 -
___________ ___________
Total Current Liabilities 927 4,703
___________ ___________
STOCKHOLDERS' EQUITY (DEFICIT):
Common stock, $.001 par value,
50,000,000 shares authorized,
770,000 shares issued and
outstanding 770 770
Capital in excess of par value 55,230 55,230
Deficit accumulated during the
development stage (43,408) (38,971)
___________ ___________
Total Stockholders' Equity 12,592 17,029
___________ ___________
$ 13,519 $ 21,732
___________ ___________
Note: The balance sheet at September 30, 2004 was taken from the audited
financial statements at that date and condensed.
The accompanying notes are an integral part of these unaudited condensed
financial statements.
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DOLPHIN PRODUCTIONS, INC.
[A Development Stage Company]
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
For the Three For the Nine From Inception
Months Ended Months Ended on June 26,
June 30, June 30, 1998 Through
_________________ _________________ June 30,
2005 2004 2005 2004 2005
________ ________ ________ ________ _____________
REVENUE $ 113 $ - $ 788 $ - $ 38,678
EXPENSES:
Selling - - - - 4,561
General and
administrative 934 1,369 5,236 3,467 77,217
________ ________ ________ ________ _____________
Total Expenses 934 1,369 5,236 3,467 81,778
________ ________ ________ ________ _____________
LOSS BEFORE OTHER
INCOME (EXPENSE) (821) (1,369) (4,448) (3,467) (43,100)
________ ________ ________ ________ _____________
OTHER INCOME (EXPENSE):
Interest income 11 - 11 - 11
Interest expense - - - - (25)
________ ________ ________ ________ _____________
Total Other Income
(Expense) 11 - 11 - (14)
________ ________ ________ ________ _____________
LOSS BEFORE INCOME
TAXES (810) (1,369) (4,437) (3,467) (43,114)
CURRENT TAX EXPENSE
(BENEFIT) - - - - 294
DEFERRED TAX EXPENSE
(BENEFIT) - - - - -
________ ________ ________ ________ _____________
NET LOSS $ (810) $(1,369) $(4,437) $(3,467) $ (43,408)
________ ________ ________ ________ _____________
LOSS PER COMMON SHARE $ (.00) $ (.00) $ (.01) $ (.01) $ (.08)
________ ________ ________ ________ _____________
The accompanying notes are an integral part of these unaudited condensed
financial statements.
- 4 -
DOLPHIN PRODUCTIONS, INC.
[A Development Stage Company]
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
For the Nine From Inception
Months Ended on June 26,
June 30, 1998 Through
______________________ June 30,
2005 2004 2005
__________ __________ ______________
Cash Flows from Operating Activities:
Net loss $ (4,437) $ (3,467) $ (43,408)
Adjustments to reconcile net loss
to net cash used by operating
activities:
Non-cash expense for services
rendered - - 5,000
Changes in assets and liabilities:
Decrease in income taxes
receivable 730 - -
Increase (decrease) in accounts
payable (834) 465 875
Increase in sales tax payable 52 - 52
Increase (decrease) in accrued
expenses - - -
Decrease in accrued payroll taxes (2,994) - -
__________ __________ ______________
Net Cash (Used) by
Operating Activities (7,483) (3,002) (37,481)
__________ __________ ______________
Cash Flows from Investing Activities - - -
__________ __________ ______________
Net Cash Provided by
Investing Activities - - -
__________ __________ ______________
Cash Flows from Financing Activities:
Proceeds from note payable - related
party - 1,000 -
Proceeds from issuance of common
stock - - 51,000
__________ __________ ______________
Net Cash Provided by
Financing Activities - 1,000 51,000
__________ __________ ______________
Net Increase (Decrease) in Cash and
Cash Equivalents (7,483) (2,002) 13,519
Cash and Cash Equivalents at
Beginning of Period 21,002 2,995 -
__________ __________ ______________
Cash and Cash Equivalents at End of
Period $ 13,519 $ 993 $ 13,519
__________ __________ ______________
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ - $ - $ -
Income taxes $ - $ - $ 1,024
Supplemental Schedule of Non-cash Investing and Financing Activities:
For the nine months ended June 30, 2005:
None
For the nine months ended June 30, 2004:
None
The accompanying notes are an integral part of these unaudited condensed
financial statements.
- 5 -
DOLPHIN PRODUCTIONS, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - Dolphin Productions, Inc. ("the Company") was organized
under the laws of the State of Nevada on June 26, 1998. The Company
provides musical and other performance services for concerts and other
events. The Company has not yet generated significant revenues from its
planned principal operations and is considered a development stage company
as defined in Statement of Financial Accounting Standards No. 7. The
Company has, at the present time, not paid any dividends and any dividends
that may be paid in the future will depend upon the financial requirements
of the Company and other relevant factors.
Condensed Financial Statements - The accompanying financial statements
have been prepared by the Company without audit. In the opinion of
management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position, results
of operations and cash flows at June 30, 2004 and 2003 and for the periods
then ended have been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles in the United States of America have been condensed
or omitted. It is suggested that these condensed financial statements be
read in conjunction with the financial statements and notes thereto
included in the Company's September 30, 2004 audited financial statements.
The results of operations for the periods ended June 30, 2005 and 2004 are
not necessarily indicative of the operating results for the full year.
Fiscal Year - The Company's fiscal year-end is September 30th.
Cash and Cash Equivalents - The Company considers all highly liquid debt
investments purchased with a maturity of three months or less to be cash
equivalents.
Accounts and Loans Receivable - The Company records accounts receivable at
the lower of cost or fair value. The Company determines the lower of cost
or fair value of non-mortgage loans on an individual asset basis. The
Company recognizes interest income on an account receivable based on the
stated interest rate for past-due accounts over the period that the
account is past due. The Company recognizes interest income on a loan
receivable based on the stated interest rate over the term of the loan.
The Company accumulates and defers fees and costs associated with
establishing a receivable to be amortized over the estimated life of the
related receivable. The Company estimates allowances for doubtful
accounts based on the aged receivable balances and historical losses. The
Company records interest income on delinquent accounts receivable only
when payment is received. The Company first applies payments received on
delinquent accounts receivable to eliminate the outstanding principal.
The Company charges off uncollectible accounts and loans receivable when
management estimates no possibility of collecting the related receivable.
The Company considers accounts receivable to be past due or delinquent
based on contractual terms.
- 6 -
DOLPHIN PRODUCTIONS, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Continued]
Revenue Recognition - The Company recognizes revenue from the sale of
compact discs when the product is delivered.
Advertising Costs - Advertising costs, except for costs associated with
direct-response advertising, are charged to operations when incurred. The
costs of direct-response advertising are capitalized and amortized over
the period during which future benefits are expected to be received.
During the nine months ended June 30, 2005 and 2004, advertising costs
amounted to $0 and $0, respectively.
Income Taxes - The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes" [See Note 4].
Loss Per Share - The computation of loss per share is based on the
weighted average number of shares outstanding during the period presented
in accordance with Statement of Financial Accounting Standards No. 128,
"Earnings Per Share" [See Note 6].
Accounting Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles in the United
States of America requires management to make estimates and assumptions
that effect the reported amounts of assets and liabilities, the
disclosures of contingent assets and liabilities at the date of the
financial statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimated by management.
Recently Enacted Accounting Standards - Statement of Financial Accounting
Standards ("SFAS") No. 151, "Inventory Costs - an amendment of ARB No. 43,
Chapter 4" SFAS No. 152, "Accounting for Real Estate Time-Sharing
Transactions - an amendment of FASB Statements No. 66 and 67", SFAS No.
153, "Exchanges of Nonmonetary Assets - an amendment of APB Opinion No.
29", and SFAS No. 123 (revised 2004), "Share-Based Payment", were recently
issued. SFAS No. 151, 152, 153 and 123 (revised 2004) have no current
applicability to the Company or their effect on the financial statements
would not have been significant.
Restatement - On January 15, 1999, the Company effected a 5-for-2 forward
stock split. The financial statements have been restated, for all periods
presented, to reflect the stock split [See Note 2].
Reclassification - The financial statements for periods prior to June 30,
2005 have been reclassified to conform to the headings and classifications
used in the June 30, 2005 financial statements.
- 7 -
DOLPHIN PRODUCTIONS, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 2 - CAPITAL STOCK
Common Stock - During June 1998, the Company issued 500,000 shares of its
previously authorized but unissued common stock for cash of $2,000 (or
$.004 per share).
During January 1999, the Company issued 20,000 shares of its previously
authorized but unissued common stock for cash of $4,000 (or $.20 per
share).
In September of 2004, the Company issued 225,000 shares of its previously
authorized but unissued common stock for cash of $45,000 (or $.20 per
share).
During September of 2004, the Company issued 25,000 shares of its
previously authorized but unissued common stock for services rendered
valued at $5,000 (or $.20 per share).
Stock Split - On January 15, 1999, the Company effected a five for two
common stock split. The financial statements, for all periods presented,
have been restated to reflect the stock split.
NOTE 3 - RELATED PARTY TRANSACTIONS
Note Payable - On June 29, 2004, the Company signed a $1,000 note payable
to an entity owned by a shareholder of the Company. The note accrued
interest at 8% per annum and was repaid in full in September of 2004. For
the nine months ended June 30, 2005 and 2004, interest expense amounted to
$0 and $0.
Management Compensation and Accrued Expenses - Salary expense to the
President for the nine months ended June 30, 2005 and 2004 amounted to $0
and $0, respectively. The Company currently owes no management
compensation.
Legal Services and Accrued Expenses - During the nine months ended June
30, 2005 and 2004, respectively, the President provided no legal services
to the Company. At June 30, 2005, the Company owes no accrued legal fees.
NOTE 4 - INCOME TAXES
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes".
SFAS No. 109 requires the Company to provide a net deferred tax
asset/liability equal to the expected future tax benefit/expense of
temporary reporting differences between book and tax accounting methods
and any available operating loss or tax credit carryforwards. At June 30,
2005, the Company has available unused operating loss carryforwards of
approximately $43,115, which may be applied against future taxable income
and which expire in 2025.
- 8 -
DOLPHIN PRODUCTIONS, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 4 - INCOME TAXES [Continued]
The amount of and ultimate realization of the benefits from the deferred
tax assets for income tax purposes is dependent, in part, upon the tax
laws in effect, the future earnings of the Company, and other future
events, the effects of which cannot be determined. Because of the
uncertainty surrounding the realization of the deferred tax assets, the
Company has established a valuation allowance equal to their tax effect
and, therefore, no deferred tax asset has been recognized for the deferred
tax assets. The net deferred tax assets, which consist mainly of accrued
compensation and net operating loss carryforward, are approximately $6,500
and $5,800 as of June 30, 2005 and September 30, 2004, respectively, with
an offsetting valuation allowance of the same amount, resulting in a
change in the valuation allowance of approximately $700 during the nine
months ended June 30, 2005.
NOTE 5 - GOING CONCERN
The accompanying financial statements have been prepared in conformity
with generally accepted accounting principles in the United States of
America which contemplate continuation of the Company as a going concern.
However, the Company has not yet been successful in establishing
profitable operations. This factor raises substantial doubt about the
ability of the Company to continue as a going concern. In this regard,
management is proposing to raise any necessary additional funds through
loans or through additional sales of its common stock or through the
possible acquisition of other companies. There is no assurance that the
Company will be successful in raising this additional capital or in
achieving profitable operations.
NOTE 6 - LOSS PER SHARE
The following data show the amounts used in computing loss per share:
For the Three For the Nine From Inception
Months Ended Months Ended on June 26,
June 30, June 30, 1998 Through
_________________ _________________ June 30,
2005 2004 2005 2004 2005
________ ________ ________ ________ _____________
Net loss available to
common shareholders
(numerator) $ (810) $(1,369) $(4,437) $(3,467) $ (43,408)
________ ________ ________ ________ _____________
Weighted average number
of common shares
outstanding used in
loss per share for the
period (denominator) 770,000 520,000 770,000 520,000 545,357
________ ________ ________ ________ _____________
Dilutive loss per share was not presented, as the Company had no common
stock equivalent shares for all periods presented that would affect the
computation of diluted loss per share.
- 9 -
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain
significant factors that have affected the Company's financial condition
and operating results for the period included in the accompanying
financial statements. The accompanying Unaudited Condensed Financial
Statements as of June 30, 2005, including the Notes to Unaudited Condensed
Financial Statements, are, by this reference, included in this Managements
Discussion and Analysis of Financial Condition and Results of Operations.
Results of Operations
Three Months Ended June 30, 2005 Compared to Three Months Ended June 30, 2004
DOLPHIN PRODUCTIONS, INC., generated revenues from product sales of $113
and $0 during the quarters ended June 30, 2005, and June 30, 2004,
respectively. No concerts were presented by the Company during either
period. The Company continues to experience difficulties with its entry
into the business of marketing original music through e-commerce.
DOLPHIN PRODUCTIONS, INC. recorded a net loss of $810 for the third
quarter of fiscal year 2005 compared to a net loss of $1,369 for the third
quarter of fiscal year 2004. In prior periods, the Company has reflected
in its financial statements certain potential tax benefits which may be
available to the Company in the form of tax-loss carryforwards. However,
because of the uncertainty that the Company will be able to take advantage
of those carryforwards, the Company has partially offset the carryforward
amount with a valuation allowance that reflects that uncertainty. During
the quarter ended June 30, 2005, the Company received refunds of $730 from
income tax loss carrybacks.
DOLPHIN PRODUCTIONS, INC. has no plans to produce concerts or to provide
concert-related services in the future, except as such services may be
ancillary to the Companys development and promotion of its web site and
the Internet marketing of recorded music.
Nine Months Ended June 30, 2005 Compared to Nine Months Ended June 30, 2004
For the nine month period ended June 30, 2005, DOLPHIN PRODUCTIONS, INC.,
experienced a net loss of $4,437 as compared with a loss for the nine
months ended June 30, 2004, of $3,467.
Liquidity and Capital Resources
As of June 30, 2005, the Company had on hand cash of $13,519. It owed
$927 in current liabilities.
Item 3. Controls and Procedures
As of April 14, 2005, an informal evaluation was performed under the
supervision and with the participation of the Company's management,
including the CEO and CFO, of the effectiveness of the design and
operation of the Company's disclosure controls and procedures. Based on
that evaluation, the Company's management, including the CEO and CFO,
concluded that the Company's disclosure controls and procedures were
effective as of April 14, 2005. There have been no significant changes in
the Company's internal controls or in other factors that could
significantly affect internal controls subsequent to April 14, 2005.
PART II-OTHER INFORMATION
None
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DOLPHIN PRODUCTIONS, INC.
Date: August 12, 2005 /s/ Richard H. Casper
--------------------------------
Richard H. Casper, President