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 December 31, 2003
[ ] 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:
520,000 as of December 31, 2003.
DOLPHIN PRODUCTIONS, INC.
INDEX TO FORM 10-QSB
PAGE
PART I FINANCIAL INFORMATION NUMBER
Item 1. Financial Statements for DOLPHIN PRODUCTIONS, INC. 3-11
Unaudited Condensed Balance Sheets,
December 31, 2003 and September 30, 2003
Unaudited Condensed Statements of Operations,
for the three months ended December 31, 2003 and
2002 and from inception on June 26, 1998 through
December 31, 2003
Unaudited Condensed Statements of Cash Flows
For the three months ended December 31, 2003
and 2002 and from inception on June 26, 1998
through December 31, 2003
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of 12
Financial Condition and Results of Operation
Item 3. Controls and Procedures 13
PART II OTHER INFORMATION 13
SIGNATURE 13
Item 1. Financial Statements for DOLPHIN PRODUCTIONS, INC.
DOLPHIN PRODUCTIONS, INC.
[A Development Stage Company]
UNAUDITED CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 2003
DOLPHIN PRODUCTIONS, INC.
[A Development Stage Company]
CONTENTS
PAGE
- Unaudited Condensed Balance Sheets,
December 31, 2003 and September 30, 2003 5
- Unaudited Condensed Statements of Operations,
for the three months ended December 31, 2003
and 2002 and from inception on June 26, 1998
through December 31, 2003 6
- Unaudited Condensed Statements of Cash Flows,
for the three months ended December 31, 2003
and 2002 and from inception on June 26, 1998
through December 31, 2003 7
- Notes to Unaudited Condensed Financial Statements 8 - 11
DOLPHIN PRODUCTIONS, INC.
[A Development Stage Company]
UNAUDITED CONDENSED BALANCE SHEETS
ASSETS
December 31,September 30,
2003 2003
___________ ___________
CURRENT ASSETS:
Cash $ 1,935 $ 2,995
Income taxes receivable 730 730
___________ ___________
Total Current Assets 2,665 3,725
___________ ___________
$ 2,665 $ 3,725
___________ ___________
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 1,300 $ 1,060
Accrued expenses - related party 21,500 21,500
___________ ___________
Total Current Liabilities 22,800 22,560
___________ ___________
STOCKHOLDERS' EQUITY (DEFICIT):
Common stock, $.001 par value,
50,000,000 shares authorized,
520,000 shares issued and
outstanding 520 520
Capital in excess of par value 5,480 5,480
Deficit accumulated during the
development stage (26,135) (24,835)
___________ ___________
Total Stockholders'
Equity (Deficit) (20,135) (18,835)
___________ ___________
$ 2,665 $ 3,725
___________ ___________
Note: The balance sheet at September 30, 2003 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.
-5-
DOLPHIN PRODUCTIONS, INC.
[A Development Stage Company]
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
For the Three From Inception
Months Ended on June 26,
December 31, 1998 Through
___________________ December 31,
2003 2002 2003
________ _________ _________
REVENUE $ - $ - $ 37,890
EXPENSES:
Selling - - 4,561
General and administrative 1,300 1,230 57,870
________ _________ _________
Total Expenses 1,300 1,230 62,431
________ _________ _________
LOSS BEFORE INCOME
TAXES (1,300) (1,230) (24,541)
CURRENT TAX EXPENSE (BENEFIT) - (184) 294
DEFERRED TAX EXPENSE (BENEFIT) - - -
________ _________ _________
NET LOSS $ (1,300) $(1,046) $ (24,835)
________ _________ _________
LOSS PER COMMON SHARE $ (.00) $ (.00) $ (.05)
________ _________ _________
The accompanying notes are an integral part of these unaudited condensed
financial statements.
-6-
DOLPHIN PRODUCTIONS, INC.
[A Development Stage Company]
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
For the Three From Inception
Months Ended on June 26,
December 31, 1998 Through
____________________ December 31,
2003 2002 2003
___________ _________ __________
Cash Flows from Operating Activities:
Net loss $ (1,300) $ (1,046) $ (24,835)
Adjustments to reconcile net
loss to net cash provided (used)
by operating activities:
Changes in assets and liabilities:
(Increase) in income
taxes receivable - (191) (730)
Increase in accounts payable 240 - -
Increase in accrued
expenses - related party - - 21,500
(Decrease) in income taxes payable - (1,024) -
Increase (decrease) in
accrued expenses - (464) -
___________ _________ __________
Net Cash (Used) by
Operating Activities (1,060) (2,725) (4,065)
___________ _________ __________
Cash Flows from Investing Activities - - -
___________ _________ __________
Net Cash Provided by
Investing Activities - - -
___________ _________ __________
Cash Flows from Financing Activities:
Proceeds from issuance
of common stock - - 6,000
___________ _________ __________
Net Cash Provided by
Financing Activities - - 6,000
___________ _________ __________
Net Increase (Decrease) in
Cash and Cash Equivalents (1,060) (2,725) 1,935
Cash and Cash Equivalents
at Beginning of Period 2,995 10,920 -
___________ _________ __________
Cash and Cash Equivalents
at End of Period $ 1,935 $ 8,195 $ 1,935
___________ _________ __________
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ - $ - $ -
Income taxes $ - $ 1,024 $ 1,024
Supplemental Schedule of Non-cash Investing and Financing Activities:
For the three months ended December 31, 2003:
None
For the three months ended December 31, 2002:
None
The accompanying notes are an integral part of these unaudited condensed
financial statements.
-7-
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, at the present time, has 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 December 31, 2003 and 2002 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, 2002 audited financial statements.
The results of operations for the periods ended December 31, 2003 and 2002
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 and loans
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 and loan losses based on the aged receivable balances and
historical losses. The Company records interest income on delinquent
accounts and loans receivable only when payment is received. The Company
first applies payments received on delinquent accounts and loans
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 and loans receivable to be past due or delinquent based
on contractual terms.
-8-
DOLPHIN PRODUCTIONS, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Continued]
Revenue Recognition - The Company recognizes revenue from providing
musical and other performances for concerts and other events for a
negotiated fee in the period when the services are provided. The Company
records only its fee from a concert performance and reflects the Company's
expenses related to the performance as general and administrative expense.
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 three months ended December 31, 2003 and 2002, 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. 146, "Accounting for Costs Associated with Exit or
Disposal Activities", SFAS No. 147, "Acquisitions of Certain Financial
Institutions - an Amendment of FASB Statements No. 72 and 144 and FASB
Interpretation No. 9", SFAS No. 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure - an Amendment of FASB Statement
No. 123", SFAS No. 149, "Amendment of Statement 133 on Derivative
Instruments and Hedging Activities", and SFAS No. 150, "Accounting for
Certain Financial Instruments with Characteristics of both Liabilities and
Equity", were recently issued. SFAS No. 146, 147, 148, 149 and 150 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 December
31, 2003 have been reclassified to conform to the headings and
classifications used in the December 31, 2003 financial statements.
-9-
DOLPHIN PRODUCTIONS, INC.
[A Development Stage Company]
NOTES TO 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).
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
Management Compensation and Accrued Expenses - Salary expense to the
President for the three months ended December 31, 2003 and 2002 amounted
to $0 and $0, respectively. At December 31, 2003, the Company owes a
total of $6,500 in accrued salary to the President.
Legal Services and Accrued Expenses - During the three months ended
December 31, 2003 and 2002, respectively, the President provided legal
services of $0 and $0 to the Company. At December 31, 2003, the Company
owes a total of $15,000 in accrued legal fees to the President.
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 December
31, 2003, the Company has available unused operating loss carryforwards of
approximately $4,300, which may be applied against future taxable income
and which expire in 2024.
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 $3,900
and $3,700 as of December 31, 2003 and September 30, 2003, respectively,
with an offsetting valuation allowance of the same amount, resulting in a
change in the valuation allowance of approximately $200 during the three
months ended December 31, 2003.
-10-
DOLPHIN PRODUCTIONS, INC.
[A Development Stage Company]
NOTES TO FINANCIAL STATEMENTS
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 and has current liabilities in excess of current
assets. These factors raise 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 From Inception
Months Ended on June 26,
December 31, 1998 Through
___________________ December 31,
2003 2002 2003
________ ________ __________
Net loss available to common
shareholders (numerator) $(1,300) $(1,046) $ (26,135)
________ ________ __________
Weighted average number of
common shares outstanding
used in loss per share for the
period (denominator) 520,000 520,000 517,984
________ ________ __________
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.
-11-
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 December 31, 2003, 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 December 31, 2003 Compared to
Three Months Ended December 31, 2002
DOLPHIN PRODUCTIONS, INC., had no
revenue for the quarter ended December 31, 2002, and no revenue for the
comparable quarter ended December 31, 2002. No concert services were
provided by the Company during either quarter and the Company generated no
revenues from the sale in recorded music. The Company is in the process of
shifting its business emphasis from the production of concerts to the
Internet marketing of recorded music.
DOLPHIN PRODUCTIONS, INC. incurred accounting expenses of $1300 during the
quarter ended December 31, 2003, and that amount is reflected as an account
payable as of that date. That amount ($1300). Accounting expenses of
$1230 during the comparable quarter ended December 31, 2002. Accounting
costs were the only expenses incurred by the Company during the quarter
ended December 31, 2003, and that amount ($1300) is also the Companys Net
Operating Loss for that period. In the comparable period ended December
31, 2002, the Company recognized a tax benefit of $184 that partially
offset its General and Administrative expenses of $1230 and resulted in a
Net Operating Loss of $1046 for that period.
DOLPHIN PRODUCTIONS, INC. has no immediate plans to produce concerts or to
provide concert-related services in the near 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. The Company is not
able to predict when, or whether, its Internet marketing business will
begin to generate revenues.
DOLPHIN PRODUCTIONS, INC., has no immediate prospects for generating
revenues from its operations during the foreseeable future. The magnitude
of the revenues, if any, will depend upon the Companys ability to implement
an unproved process for generating revenues from making recorded music
available to the public on the Internet.
Liquidity and Capital Resources
As of December 31, 2003, the Company had on hand cash of $1935. It owed
$21,500 in accrued liabilities payable to the Companys President and
Chairman, Richard H. Casper. It has also accrued a liability of $1300 that
is payable to the Companys independent auditors, Pritchett, Siler & Hardy.
The Companys current liabilities of $22,800 exceed the cash ($1935) that it
had on hand as of December 31, 2003, by $20,865.
-12-
The liability to the Companys President is not evidenced by a writing and
does not currently bear interest. It is due upon demand.
The Company currently has no prospects or commitments from any parties to
provide additional capital, cash or resources to the Company.
Item 3. Controls and Procedures
As of December 31, 2003, 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
December 31, 2003. There have been no significant changes in the Company's
internal controls or in other factors that could significantly affect
internal controls subsequent to December 31, 2003.
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: February 11, 2003 /s/ Richard H. Casper
------------------------
Richard H. Casper,President
and Principal Financial Officer
-13-