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, 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 December
31, 2005.
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes X No . [i.e.,
the Company has: (1) nominal operations; and (2) assets consisting of cash
and nominal other assets].
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, 2005 and September 30, 2005
Unaudited Condensed Statements of Operations -
Three Months Ended December 31, 2005 and December 31, 2004
From Inception on June 26, 1998 through December 31, 2005
Unaudited Condensed Statements of Cash Flows -
Three Months Ended December 31, 2005 and December 31, 2004
From Inception on June 26, 1998, through December 31, 2005
Notes to Unaudited Condensed 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, 2005
DOLPHIN PRODUCTIONS, INC.
[A Development Stage Company]
CONTENTS
PAGE
- Unaudited Condensed Balance Sheets,
December 31, 2005 and September 30, 2005 5
- Unaudited Condensed Statements of Operations,
for the three months ended December 31, 2005
and 2004 and from inception on June 26, 1998
through December 31, 2005 6
- Unaudited Condensed Statements of Cash Flows,
for the three months ended December 31, 2005
and 2004 and from inception on June 26, 1998
through December 31, 2005 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,
2005 2005
___________ ___________
CURRENT ASSETS:
Cash $ 10,427 $ 10,683
___________ ___________
Total Current Assets
10,427 10,683
___________ ___________
Total Assets $ 10,427 $ 10,683
___________ ___________
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 3,114 $ -
Utah Sales Tax Payable 59 59
Utah Franchise Tax Payable - 100
___________ ___________
Total Current Liabilities 3,173 159
___________ ___________
STOCKHOLDERS' EQUITY:
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 (48,746) (45,476)
___________ ___________
Total Stockholders' Equity 7,254 10,524
___________ ___________
Total Liabilities and
Stockholders' Equity $ 10,427 $ 10,683
___________ ___________
Note: The balance sheet at September 30, 2005 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,
2005 2004 2005
__________ __________ ______________
REVENUE $ - $ - $ 39,091
COST OF GOODS SOLD - - 300
GROSS PROFIT - - 38,791
EXPENSES:
Selling - - 4,561
General and administrative 3,270 2,439 82,668
__________ __________ ______________
Total Expenses 3,270 2,439 87,229
__________ __________ ______________
LOSS FROM OPERATIONS (3,270) (2,439) (48,438)
OTHER INCOME (EXPENSE)
Interest revenue - - 11
Interest expense - - (25)
__________ __________ ______________
Total Other Income (Expense) - - (14)
LOSS BEFORE INCOME
TAXES (3,270) (2,439) (48,452)
CURRENT TAX EXPENSE
(BENEFIT) - - 294
DEFERRED TAX EXPENSE
(BENEFIT) - - -
__________ __________ ______________
NET LOSS $ (3,270) $ (2,439) $ (48,746)
__________ __________ ______________
LOSS PER COMMON SHARE $ (.00) $ (.00)
__________ __________
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,
2005 2004 2005
__________ __________ ______________
Cash Flows from Operating Activities:
Net loss $ (3,270) $ (2,439) $ (48,746)
Adjustments to reconcile net loss
to net cash provided (used) by
operating activities:
Non-cash expense for services
rendered - - 5,000
Changes in assets and liabilities:
Increase in accounts payable 3,114 566 3,114
Increase (decrease) in accrued
payroll taxes - (2,994) -
Increase (decrease) in Utah
Franchise Tax Payable (100) - -
Increase (decrease) in Utah Sales
Tax Payable - - 59
__________ __________ ______________
Net Cash (Used) by
Operating Activities (256) (4,867) (40,573)
__________ __________ ______________
Cash Flows from Investing Activities - - -
__________ __________ ______________
Net Cash Provided by
Investing Activities - - -
__________ __________ ______________
Cash Flows from Financing Activities:
Proceeds from issuance of common stock - - 51,000
__________ __________ ______________
Net Cash Provided by
Financing Activities - - 51,000
__________ __________ ______________
Net Increase (Decrease) in Cash and
Cash Equivalents (256) (4,867) 10,427
Cash and Cash Equivalents at
Beginning of Period 10,683 21,002 -
__________ __________ ______________
Cash and Cash Equivalents at End of
Period $ 10,427 $ 16,135 $ 10,427
__________ __________ ______________
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ - $ - $ 25
Income taxes $ - $ - $ 1,024
Supplemental Schedule of Non-cash Investing and Financing Activities:
For the three months ended December 31, 2005:
None
For the three months ended December 31, 2004:
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
formerly presented concerts before live audiences, but now markets
recorded music over the Internet as its sole business. The Company has
not yet generated any 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 may lack the financial
resources to emerge from the development stage to full operations. See
also Note 4. 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, 2005 and 2004 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, 2005 audited financial statements.
The results of operations for the periods ended December 31, 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 Receivable - The Company records accounts receivable at the lower
of cost or fair value. 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 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 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.
- 8 -
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 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. All of the Company's sales of compact discs are
final and do not allow for product return. Consequently, the Company has
made no provision for the return of merchandise sold.
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, 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".
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 5]
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 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", and SFAS No.
154, "Accounting Changes and Error Corrections - a replacement of APB
Opinion No. 20 and FASB Statement No. 3", were recently issued. SFAS No.
151, 152, 153, 123 (revised 2004) and 154 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, 2005 have been reclassified to conform to the headings and
classifications used in the December 31, 2005 financial statements.
- 9 -
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).
During September of 2004, the Company sold 225,000 shares of its
previously authorized but unissued stock for $45,000 ($.20 per share).
During September of 2004, the Company issued 25,000 shares of its
previously authorized but unissued stock to certain officers and
directors. The Company assigned a value of $5000 ($.20 per share) to the
shares issued.
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
officers of the Company for the three months ended December 31, 2005 and
2004 amounted to $0 and $0, respectively.
Legal Services and Accrued Expenses - During the three months ended
December 31, 2005 and 2004, respectively, the Company's President provided
legal services of $0 and $0, respectively, to the Company.
NOTE 4- 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 incurred significant losses in recent years.
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 one or more of the following
means: (1) operations; (2) loans; (3) additional sales of its common
stock; (4) the possible acquisition of operating assets or technology by
the issuance of additional shares of its common stock; (5) the acquisition
of inventory through the issuance of additional shares of its common
stock; or (6) through the possible acquisition of other companies by the
issuance of additional shares of its common stock.
There is no assurance that the Company will be successful in
raising additional capital or in achieving profitable operations. If no
additional capital is raised, the management estimates that the Company
has sufficient cash to sustain its operations through June 30, 2006. In
the event that the Company is not able to raise additional capital or to
achieve profitable operations, the Company may elect to discontinue
operations and to dissolve the corporation. In that event, shareholders
and creditors may be unable to recover any sum from the corporation.
- 10 -
DOLPHIN PRODUCTIONS, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 5- LOSS PER SHARE
The following data show the amounts used in computing loss per share:
For the Three
Months Ended
December 31,
______________________
2005 2004
__________ __________
Net loss available to common
shareholders (numerator) $ (3,270) $ (2,439)
__________ __________
Weighted average number of
common shares outstanding
used in loss per share for the
period (denominator) 770,000 770,000
__________ __________
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, 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 December 31, 2005 Compared to Three Months Ended
December 31, 2004
DOLPHIN PRODUCTIONS, INC. (the Company), generated no revenues during the
quarters ending December 31, 2005, December 31, 2004, respectively. The
Company has been unable to acquire the technology and the inventory of
recorded music that are necessary to compete profitably against larger,
better-capitalized providers of recorded music. The Company has two
contracts with recording artists, each of which may be canceled by the
artists without penalty. The Company has no assurance that its contracts
with artists will not be canceled. If the contracts are canceled, the
Company has no inventory of saleable recorded music and will be unable to
generate revenues.
DOLPHIN PRODUCTIONS, INC. recorded a net loss of $3,270 for the quarter
ending December 31, 2005, compared to a net loss of $2,439 for the
comparable quarter ending December 31, 2004.
DOLPHIN PRODUCTIONS, INC., has no prospects for generating revenues from
its operations during the foreseeable future.
Liquidity and Capital Resources
As of December 31, 2005, the Company had on hand cash of $10,427. It owed
payables of $3,173. The Company has no assurance that it will generate
revenues, or otherwise acquire capital, to sustain its operations beyond
June 30, 2006.
Management may seek to raise additional funds through one or more of the
following means: (1) operations; (2) loans; (3) additional sales of its
common stock; (4) the possible acquisition of operating assets or
technology by the issuance of additional shares of its common stock; (5)
the acquisition of inventory through the issuance of additional shares of
its common stock; or (6) through the possible acquisition of other
companies by the issuance of additional shares of its common stock.
There is no assurance that the Company will be successful in raising
additional capital or in achieving profitable operations. If no
additional capital is raised, management estimates that the Company has
sufficient cash on hand to sustain its operations through June 30, 2006.
In the event that the Company is not able to raise additional capital or
to achieve profitable operations by June 30, 2006, the Company may elect
to discontinue operations and to dissolve the corporation. In that event,
shareholders and creditors may be unable to recover any sum from the
corporation.
Item 3. Controls and Procedures
As of January 16, 2006, an informal evaluation was performed under the
supervision and with the participation of the Company's management,
including the CEO, the CFO, and the Chair of the Companys Audit Committee,
as to the effectiveness of the design and operation of the Company's
disclosure controls and procedures. Based on that evaluation, the
Company's management concluded that the Company's disclosure controls and
procedures were effective as of January 16, 2006. There have been no
significant changes in the Company's internal controls or in other factors
that could significantly affect internal controls subsequent to January
15, 2006.
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 1, 2006 /s/ Richard H. Casper
--------------------------------
Richard H. Casper, President