UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[ ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2001
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[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the transition period from to
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Commission File Number: 000-33305
Reel Staff, Inc.
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(Exact name of small business issuer as specified in its charter)
Nevada 95-4863690
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1402 Veteran Avenue, Suite B, California, 90024
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(Address of principal executive offices)
(323) 359.1531
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(Issuer's Telephone Number)
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practical date. As of November 13, 2001, there were
6,113,750 shares of the issuer's $.001 par value common stock issued and
outstanding.
1
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
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REEL STAFF, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
SEPTEMBER 30, 2001
2
REEL STAFF, INC.
(a development stage company)
CONTENTS
PAGE
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Financial Statements (Unaudited)
Balance Sheet 1
Statements of Operations 2
Statements of Changes in Stockholders' Equity 3
Statements of Cash Flows 4
Notes to Financial Statements 5
3
REEL STAFF, INC.
(a development stage company)
BALANCE SHEET
SEPTEMBER 30, 2001
(UNAUDITED)
ASSETS
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Current assets
Cash $ 3,303
Accounts receivable, net of allowance of $-0- ---
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Total current assets 3,303
Other assets ---
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Total assets $ 3,303
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities
Accounts payable and accrued expenses $ 1,000
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Total current liabilities 1,000
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Stockholders' Equity
Preferred stock, $.001 par value;
Authorized shares -- 5,000,000
Issued and outstanding share -- 0 ---
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Common stock, $.001 par value;
Authorized shares-- 50,000,000
Issued and outstanding shares-- 6,113,750 6,114
Additional paid-in capital 11,661
Deficit accumulated during the development stage (15,472)
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Total stockholders' equity 2,303
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Total liabilities and stockholders' equity $ 3,303
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See accompanying notes to financial statements.
4
REEL STAFF, INC.
(a development stage company)
STATEMENTS OF OPERATIONS
(UNAUDITED)
MAY 21, 2001
THREE MONTHS ENDED (INCEPTION) -
SEPTEMBER 30, 2001 SEPTEMBER 30, 2001
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Revenues
Production staffing $ 3,976 $ 4,504
Post-production staffing --- ---
Less: returns and allowances --- ---
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Net revenues 3,976 4,504
Operating expenses
Consulting services --- 4,100
Legal and professional fees 7,743 13,973
Marketing 1,475 1,475
Office supplies and expense 393 428
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Total operating expenses 9,611 19,976
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Loss from operations (5,635) (15,472)
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Provision for income tax expense (benefit) --- ---
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Net loss/Comprehensive loss $ (5,635) $ (15,472)
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Net loss/comprehensive loss per common share ---
basic and diluted $ (---) $ (---)
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Weighted average of common shares --- basic and diluted 6,113,750 5,989,851
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See accompanying notes to financial statements.
5
REEL STAFF, INC.
(a development stage company)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
MAY 21, 2001 (INCEPTION) THROUGH SEPTEMBER 30, 2001
(UNAUDITED)
Common Stock Additional
----------------------------- Paid-In Accumulated
Shares Amount Capital Deficit Total
-------------- ------------- -------------- -------------- -------------
Balance, May 21, 2001 --- $ --- $ --- $ --- $ ---
Issuance of common stock,
May 22, 2001 5,500,000 5,500 --- --- 5,500
Issuance of common stock,
May 28, 2001 10,000 10 190 --- 200
Issuance of common stock,
June 13, 2001 345,000 345 6,555 --- 6,900
Issuance of common stock,
June 17, 2001 30,000 30 570 --- 600
Issuance of common stock,
June 28, 2001 228,750 229 4,346 --- 4,575
Net loss/comprehensive loss --- --- --- (9,837) (9,837)
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Balance, June 30, 2001 6,113,750 6,114 11,661 (9,837) 7,938
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Net loss/comprehensive loss --- --- --- (5,635) (5,635)
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Balance, September 30, 2001 6,113,750 $ 6,114 $ 11,661 $ (15,472) $ 2,303
============== ============= ============== ============= =============
See accompanying notes to financial statements.
6
REEL STAFF, INC.
(a development stage company)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
MAY 21, 2001
THREE MONTHS ENDED (INCEPTION) -
SEPTEMBER 30, 2001 SEPTEMBER 30, 2001
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CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (5,635) $ (15,472)
Adjustments to reconcile net loss to net cash used in operating
activities
Cost of consulting services paid with common stock --- 4,100
Cost of legal services paid with common stock --- 1,600
Changes in operating assets and liabilities ---------------- ----------------
Increase (decrease) in accounts payable
and accrued expenses (3,665) 1,000
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Net cash used by operating activities (9,300) (8,772)
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CASH FLOWS FROM INVESTING ACTIVITIES --- ---
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CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock --- 12,075
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Net cash provided by financing activities --- 12,075
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NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (9,300) 3,303
CASH AND CASH EQUIVALENTS, beginning of period 12,603 ---
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CASH AND CASH EQUIVALENTS, end of period $ 3,303 $ 3,303
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SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Income taxes paid $ --- $ ---
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Interest paid $ --- $ ---
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See accompanying notes to financial statements.
7
REEL STAFF, INC.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2001
(UNAUDITED)
NOTE 1 - NATURE OF OPERATIONS
Reel Staff, Inc. (the "Company") provides production and
post-production staffing services to film, video, and television production
companies. The Company is headquartered in Los Angeles, California.
NOTE 2 - BASIS OF PRESENTATION
The unaudited financial statements included herein have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Item 310(b)
of Regulation S-B. In the opinion of management, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three months ended September 30, 2001
and from May 21, 2001 (inception) through September 30, 2001 are not necessarily
indicative of the results that may be expected for the year ended December 31,
2001. For further information, these financial statements and the related notes
should be read in conjunction with the Company's audited financial statements
for the period ended June 30, 2001 included in the Company's registration
statement filing on Form SB-2.
NOTE 3 - COMMON STOCK
On May 22, 2001, the Company issued 3,900,000 shares of its common
stock to its officers and founders for consulting services and 1,600,000 shares
of its common stock to various individuals for legal services rendered in
connection with the initial organization costs incurred. Since there was no
readily available market value at the time the services were rendered, par value
of $0.001 per share was considered as a reasonable estimate of fair value by all
parties.
On May 28, 2001, the Company issued 10,000 shares of its common stock
to an individual for consulting and design services. Since the Company had
prepared a Private Placement Memorandum Offering (as described in the following
paragraph), the Company utilized the value of its common stock associated with
that offering of $0.02 per share. This amount was considered a reasonable
estimate of fair value between the Company and the individual.
On June 30, 2001, the Company completed a "best efforts" offering of
its common stock pursuant to the provisions of Section 4(2) of the Securities
Act of 1933 and Rule 506 of Regulation D promulgated by the Securities and
Exchange Commission. In accordance with the Private Placement Memorandum
Offering, which was initiated on May 25, 2001, the Company issued 603,750 shares
of its common stock at $0.02 per share for a total of $12,075 from June 13th -
June 30th 2001.
NOTE 4 - RELATED PARTY TRANSACTIONS
On May 22, 2001, the Company issued 3,900,000 shares of its common
stock to it current officers for services as described in Note 3.
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Item 2. Plan of Operation
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This following information specifies certain forward-looking statements of
management of the company. Forward-looking statements are statements that
estimate the happening of future events and are not based on historical fact.
Forward-looking statements may be identified by the use of forward-looking
terminology, such as "may", "shall", "will", "could", "expect", "estimate",
"anticipate", "predict", "probable", "possible", "should", "continue", or
similar terms, variations of those terms or the negative of those terms. The
forward-looking statements specified in the following information have been
compiled by our management on the basis of assumptions made by management and
considered by management to be reasonable. Our future operating results,
however, are impossible to predict and no representation, guaranty, or warranty
is to be inferred from those forward-looking statements.
The assumptions used for purposes of the forward-looking statements specified in
the following information represent estimates of future events and are subject
to uncertainty as to possible changes in economic, legislative, industry, and
other circumstances. As a result, the identification and interpretation of data
and other information and their use in developing and selecting assumptions from
and among reasonable alternatives require the exercise of judgment. To the
extent that the assumed events do not occur, the outcome may vary substantially
from anticipated or projected results, and, accordingly, no opinion is expressed
on the achievability of those forward-looking statements. We cannot guaranty
that any of the assumptions relating to the forward-looking statements specified
in the following information are accurate, and we assume no obligation to update
any such forward-looking statements.
We provide staffing services to film, video and television production companies.
Our staffing services consist of production services but we intend to expand
those services to include postproduction work as well as talent and casting
services. The services, skills and labor offered by us will generally include
production assistants, as well as film and video crews, such as back line
technicians, carpenters, lighting designers, lighting technicians, riggers,
sound designers, stage and scenery designers and other skilled laborers.
Liquidity and Capital Resources. We had cash of $3,303 as at September 30, 2001.
We believe that our available cash is sufficient to pay our day-to-day
expenditures. Our total assets were approximately $3,303 and our total
liabilities were approximately $1,000 as at September 30, 2001. Our sole
liability at September 30, 2001, was represented by accounts payable and accrued
expenses. Our President, Secretary, Director and principal shareholder, Renee
McCracken, has also agreed to pay our expenses, for the time being, in the event
that we do not generate revenues or obtain additional working capital.
Results of Operations.
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Revenue. From May 21, 2001 (date of inception) to September 30, 2001, we
realized revenues of approximately $3,976 from providing production staffing
services. For the period from our inception on May 21, 2001 to September 30,
2001, we realized revenues of $4,504. We hope to generate more revenues as we
expand our customer base.
Operating Expenses. For the quarter ended September 30, 2001, our total
operating expenses were approximately $9,611. The majority of those expenses
were represented by legal and professional fees of $7,743. Our total operating
expenses from our inception on May 21, 2001 to September 30, 2001 were $19,976.
For the quarter ended September 30, 2001, we experienced a net loss of
approximately $5,635. From our inception on May 21, 2001 to September 30, 2001
we experienced a net loss of $15,472. We anticipate that we will continue to
incur significant general and administrative expenses.
9
Our Plan of Operation for the Next Twelve Months. We generated revenues of
$4,504 from our inception on May 21, 2001 through September 30, 2001. In our
management's opinion, to effectuate our business plan in the next twelve months,
the following events must occur:
1. We must continue to provide production-staffing services including
production assistants, coordinators and managers in order to generate
revenues. We have provided services to Alta Vista Pictures, Palomar
Pictures, NBC and various small production companies. During the first
quarter of 2002, we expect that we will generate revenues of
approximately $5,000 to $7,000 per month. Any revenues generated will
be used to increase our marketing activities as well as expand our
operations.
2. We must also increase the number of projects performed for existing
customers. If we perform high quality services and provide competent
staff to our current clients, we believe the number of projects will
increase.
3. We must continue to develop relationships and market our staffing
services. We currently market our services through the relationships
and contacts of our President, Renee McCracken. Ms. McCracken has
contacts in the entertainment industry and we have focused our
marketing activities around those contacts and relationships. We need
to develop additional relationships with various entertainment-related
companies so that we can increase our customer base.
4. We must expand our marketing activities to further develop
relationships with our clients and production companies. We hope to
cultivate our existing and prospective relationships with our clients
so that we can become their primary source for production staff. We
believe that we can develop additional relationships with clients by
diversifying our service offering to include casting services for film,
television, and video productions.
We expect that, in the near term, our operating expenses will increase by
approximately $1,000 per month. We will use the increased expenses for marketing
and promotional activities.
We had cash of $3,303 as at September 30, 2001. In the opinion of management,
available funds will satisfy our working capital requirements through January
2002. Our forecast for the period for which our financial resources will be
adequate to support our operations involves risks and uncertainties and actual
results could fail as a result of a number of factors. We anticipate that we may
need to raise additional capital to expand our operations. Such additional
capital may be raised through public or private financing as well as borrowings
and other sources. We cannot guaranty that additional funding will be available
on favorable terms, if at all. If adequate funds are not available, then our
ability to expand our operations may be adversely affected. If adequate funds
are not available, we believe that our officers and directors will contribute
funds to pay for our expenses. Therefore, we have not contemplated any plan of
liquidation in the event that we do not generate revenues.
We are not currently conducting any research and development activities, other
than the development of our website. We do not anticipate conducting such
activities in the near future. We do not anticipate that we will purchase or
sale of any significant equipment. In the event that we generate significant
revenues and expand our operations, then we may need to hire additional
employees or independent contractors.
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings.
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None.
Item 2. Changes in Securities.
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None.
Item 3. Defaults Upon Senior Securities.
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None.
Item 4. Submission of Matters to Vote of Security Holders.
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None.
Item 5. Other Information.
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None.
Item 6. Exhibits and Reports on Form 8-K.
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None.
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Reel Staff, Inc.,
a Nevada corporation
November 14, 2001 By: /s/ Renee McCracken
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Renee McCracken
Its: President, Secretary, Director