10-Q 1 rtro_10q-033109.txt FORM 10-Q 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: March 31, 2009 [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from ____ to ________ RETROSPETTIVA, INC. ------------------- (Exact Name of Registrant as Specified in its Charter) CALIFORNIA 333-29295 95-4298051 --------------------------------- ---------- --------------- (State or other jurisdiction (Commission I.R.S. Employer of incorporation or organization) File No.) Identification Number 112 West 9th Street, Suite 518, Los Angeles, CA 90015 ----------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number including area code: (213) 623-9216 ------------------------------------------------- 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 checkmark whether the registrant is a large accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. Large accelerated filer [_] Accelerated filer [_] Non-accelerated filer [_] (Do not check if a smaller reporting company) Smaller reporting company [X] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). 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: 14,425,903 shares of common stock outstanding as of May 11, 2009. RETROSPETTIVA, INC. Index Page Part I - FINANCIAL INFORMATION Item 1. Financial Statements Balance Sheets as of March 31, 2009 (unaudited) and December 31, 2008 3 Statements of Operations (unaudited) for the three months ended March 31, 2009 and 2008, and for the Development Period from October 11, 2006 to March 31, 2009 4 Statements of Cash Flows (unaudited) for the three months ended March 31, 2009 and 2008, and for the Development Period from October 11, 2006 to March 31, 2009 5 Notes to Financial Statements (unaudited) 6 Item 2. Management's Discussion and Analysis or Plan of Operation 9 Item 3. Quantitative and Qualitative Disclosures About Market Risk 11 Item 4. Controls and Procedures 11 Part II - OTHER INFORMATION Item 1. Legal Proceedings 12 Item 1A. Risk Factors 12 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 12 Item 3. Defaults Upon Senior Securities 12 Item 4. Submission of Matters to a Vote of Security Holders 12 Item 5. Other Information 12 Item 6. Exhibits 12 SIGNATURES 13
RETROSPETTIVA, INC. (A Development Stage Company) BALANCE SHEETS March 31, December 31, 2009 2008 ----------- ----------- (Unaudited) (See Note 1) ASSETS Current assets: Cash and cash equivalents $ -- $ -- ----------- ----------- Total current assets $ -- $ -- =========== =========== LIABILITIES AND STOCKHOLDERS' (DEFICIT) Current liabilities: Accounts payable $ 5,238 $ 6,395 Accrued expenses 1,000 800 Advances payable - officer 5,334 5,334 Notes payable - stockholders 126,218 117,159 Accrued interest - stockholders 11,928 9,609 ----------- ----------- Total current liabilities 149,718 139,297 ----------- ----------- Commitments and contingencies (Notes 1, 2, and 3) Stockholders' (deficit): Preferred stock - no par value, authorized 1,000,000 shares: No shares issued or outstanding -- -- Common stock - no par value, 100,000,000 shares authorized: 14,425,903 shares issued and outstanding 6,903,766 6,903,766 Additional paid-in capital 230,000 230,000 Accumulated deficit through October 11, 2006 (7,302,235) (7,302,235) Retained earnings during development period 18,751 29,172 ----------- ----------- Total stockholders' (deficit) (149,718) (139,297) ----------- ----------- Total liabilities and stockholders' (deficit) $ -- $ -- =========== ===========
The accompanying notes are an integral part of these financial statements. 3
RETROSPETTIVA, INC. (A Development Stage Company) STATEMENTS OF OPERATIONS for the three months ended March 31, 2009 and 2008, and for the Development Period from October 11, 2006 to March 31, 2009 (Unaudited) Development Period October 11, 2006 2009 2008 to March 31, 2009 ---------- ---------- ----------------- Revenues $ -- $ -- $ -- ---------- ---------- ---------------- Expenses: General and administrative: Financing costs -- -- 2,917 Consulting fees -- -- 8,029 Accounting and legal 7,738 19,510 77,609 Investor relations 164 439 15,686 ---------- ---------- ---------------- Total expenses 7,902 19,949 104,241 ---------- ---------- ---------------- Operating (loss) (7,902) (19,949) (104,241) ---------- ---------- ---------------- Other income (expense): Gain from litigation settlement -- -- 137,310 Interest (expense) (2,319) (1,907) (11,928) ---------- ---------- ---------------- (2,319) (1,907) 125,382 ---------- ---------- ---------------- Income (loss) before income taxes (10,221) (21,856) 21,141 Provision for income taxes 200 -- 2,390 ---------- ---------- ---------------- Net income (loss) $ (10,421) $ (21,856) $ 18,751 ========== ========== ================ Net (loss) per common share: Basic and Diluted $ Nil $ Nil $ Nil ========== ========== ========== Weighted average shares outstanding: Basic and Diluted 14,425,903 14,425,903 9,725,525 ========== ========== ==========
The accompanying notes are an integral part of these financial statements. 4
RETROSPETTIVA, INC. (A Development Stage Company) STATEMENTS OF CASH FLOWS for the three months ended March 31, 2009 and 2008, and for the Development Period from October 11, 2006 to March 31, 2009 (Unaudited) Development Period October 11, 2006 2009 2008 to March 31, 2009 --------- --------- ----------------- Cash flows from operating activities: Net cash (used in) operating activities (9,059) (12,197) (131,552) --------- --------- ----------------- Cash flows from investing activities: Net cash (used in) investing activities -- -- -- --------- --------- ----------------- Cash flows from financing activities: Proceeds from notes payable - stockholders 9,059 12,146 126,218 Advances from related party -- (360) 5,334 --------- --------- ----------------- Net cash provided by financing activities 9,059 11,786 131,552 --------- --------- ----------------- Net increase in cash and equivalents -- (411) -- Cash and equivalents at beginning of year -- 500 -- --------- --------- ----------------- Cash and equivalents at end of year $ -- $ 89 $ -- ========= ========= ================= Supplemental Cash Flow Information Interest paid $ -- $ -- $ -- ========= ========= ================= Income taxes paid $ -- $ 1,310 $ 7,342 ========= ========= =================
The accompanying notes are an integral part of these financial statements. 5 RETROSPETTIVA, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO FINANCIAL STATEMENTS March 31, 2009 (Unaudited) 1. Summary of Significant Accounting Policies Interim Financial Information: The interim financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") as promulgated in Item 210 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP") have been condensed or omitted pursuant to such SEC rules and regulations. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of financial position as of March 31, 2009, results of operations for the three months ended March 31, 2009 and 2008, and cash flows for the three months ended March 31, 2009 and 2008, as applicable, have been made. The results for these interim periods are not necessarily indicative of the results for the entire year. The accompanying financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company's Form 10-K. Basis of Presentation: Retrospettiva, Inc. (the "Company") was organized under the laws of the State of California in November, 1990 to manufacture and import textile products, including both finished garments and fabrics. The Company's manufacturing facilities and warehouses were located primarily in Europe. The Company ceased operations in 2001 and has been inactive since 2002. On August 2, 2004, the Company was terminated, by administrative action of the State of California as a result of non-filing of required documents with the State of California. Effective February 15, 2007, the Company reinstated its charter. Effective October 11, 2006 (commencement of the development stage) efforts commenced to revive the Company. Legal counsel was hired to address litigation involving the Company and activities were undertaken to prepare and file delinquent tax and financial reports. Furthermore, a financial judgment against the Company dating back to 2002 was addressed and a final settlement was reached in October 2007. The Company filed various delinquent reports to become current in its reporting obligations to the Securities and Exchange Commission ("SEC") and various taxing authorities. The Company intends to evaluate, structure and complete a merger with, or acquisition of, prospects consisting of private companies, partnerships or sole proprietorships. The Company may seek to acquire a controlling interest in such entities in contemplation of later completing an acquisition. Development Stage Company: Based on the Company's business plan, it is a development stage company since planned principle operations have not yet commenced. Accordingly, the Company presents its financial statements in conformity with the accounting principles generally accepted in the United States of America that apply to developing enterprises. As a development stage enterprise, the Company discloses its retained earnings (or deficit accumulated) during the development stage and the cumulative statements of operations and cash flows from commencement of development stage to the current balance sheet date. The development stage began on October 11, 2006, when management commenced its efforts to revive the Company. 6 Per Share Amounts: SFAS 128, "Earnings Per Share," provides for the calculation of "Basic" and "Diluted" earnings per share. Basic earnings per share includes no dilution and is computed by dividing net income (or loss) by the weighted-average number of shares outstanding during the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of the Company, similar to fully diluted earnings per share. During 2009 and 2008, the Company has not issued any potentially dilutive securities. Use of Estimates: The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amount 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 reporting period. Management routinely makes judgments and estimates about the effects of matters that are inherently uncertain. Estimates that are critical to the accompanying financial statements include the identification and valuation of assets and liabilities, valuation of deferred tax assets, and the likelihood of loss contingencies. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Estimates and assumptions are revised periodically and the effects of revisions are reflected in the financial statements in the period it is determined to be necessary. Actual results could differ from these estimates. Recent Accounting Pronouncements: There were various accounting standards and interpretations recently issued, none of which are expected to a have a material impact on the Company's financial position, operations or cash flows. 2. Going Concern The Company's financial statements are prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of obligations in the normal course of business. However, the Company has no business operations and has negative working capital and has a total stockholders' deficit. These conditions raise substantial doubt about the ability of the Company to continue as a going concern. In view of these matters, continuation as a going concern is dependent upon continued operations of the Company, which in turn is dependent upon the Company's ability to meet its financial requirements, raise additional capital, and the success of its future operations. The financial statements do not include any adjustments to the amount and classification of assets and liabilities that may be necessary should the Company not continue as a going concern. Management has opted to file the Company's periodic financial reports with the SEC and then to raise funds through a private placement. Management believes that this plan provides an opportunity for the Company to continue as a going concern. 3. Related Party Transactions Effective July 2, 2007, the Company entered into a note payable agreement with a stockholder that provides for borrowings up to the principal amount of $64,871. The note is uncollateralized and bears interest at an annual rate of 8%. The Company issued 945,987 shares of its common stock as additional consideration for the note payable. As of March 31, 2009, the outstanding balance of the note payable was $64,871, and the stockholder has agreed to extend the due date of the note from June 30, 2008 to June 30, 2009. 7 Effective November 14, 2007, the Company entered into a revolving convertible loan agreement with the President and a stockholder. The agreement provides for borrowings up to the principal amount of $133,333. The note is due on demand, is uncollateralized, bears interest at an annual rate of 8%, and is convertible into restricted common stock at $0.10 per share. The Company issued 10,000,000 shares of its common stock as additional consideration for the note payable. As of March 31, 2009, outstanding borrowings under the agreement totaled $61,347, including $9,059 borrowed during 2009. The Company accrued interest expense of $2,319 on the two notes payable during the three months ended March 31, 2009. The Company's President periodically advances funds to the Company so that it can meet its financial obligations. During 2009, the President advanced no additional funds to the Company. As of March 31, 2009, the aggregate amounts advanced, including amounts advanced and repayments during previous periods, were $5,334. These advances are due on demand, uncollateralized and bear no interest. The Company uses the offices of its President for its minimal office facility needs for no consideration. No provision for these costs has been provided since it has been determined that they are immaterial. 4. Income Taxes Deferred income taxes arise from temporary timing differences in the recognition of income and expenses for financial reporting and tax purposes. The Company's deferred tax assets consist entirely of the benefit from net operating loss (NOL) carryforwards. The net operating loss carryforwards, if not used, will expire in various years through 2029, and are severely restricted as per the Internal Revenue code if there is a change in ownership. The Company's deferred tax assets are offset by a valuation allowance due to the uncertainty of the realization of the net operating loss carryforwards. Net operating loss carryforwards may be further limited by other provisions of the tax laws. The Company's deferred tax assets, valuation allowance, and change in valuation allowance are as follows:
Estimated Estimated Tax Change in NOL NOL Benefit from Valuation Valuation Net Tax Period Ending Carry-forward Expires NOL Allowance Allowance Benefit -------------- ------------- ------- ------------- ---------- --------- ------- March 31, 2009 $538,000 Various $122,000 $(122,000) (2,000) --
Income taxes at the statutory rate are reconciled to the Company's reported income tax expense (benefit) as follows: Federal tax expense (benefit) at statutory rate (15.00%) State tax expense (benefit), net of federal tax (7.65%) Deferred income tax valuation allowance 22.65% --------- Reported tax rate 0% ========= The Company also paid franchise taxes and related fees totaling $nil in 2009 and $1,310 in 2008 to the State of California. At March 31, 2009 and December 31, 2008, the Company had accrued franchise taxes and related fees payable to the State of California totaling $1,000 and $800, respectively. 8 Item 2. Management's Discussion and Analysis or Plan of Operation Overview The following discussion updates our plan of operation for the next twelve months. It also analyzes our financial condition at March 31, 2009 and compares it to our financial condition at December 31, 2008. Finally, the discussion summarizes the results of our operations for the three months ended March 31, 2009 and compares those results to the corresponding periods ended March 31, 2008. This discussion and analysis should be read in conjunction with our audited financial statements for the two years ended December 31, 2008, including footnotes, and the discussion and analysis included in our Form 10-K. Plan of Operation Retrospettiva, Inc. (the "Company") was organized under the laws of the State of California in November, 1990. Prior to 2002, our business was to manufacture and import textile products, including both finished garments and fabrics. Our manufacturing facilities and inventories were primarily located in Europe. On July 2, 2001, we announced that the civil war in Macedonia rendered it impossible to continue operations. We ceased operating and liquidated all of our assets. On August 2, 2004, the Company was terminated, by administrative action of the State of California as a result of non-filing of required documents with the State of California. Effective February 15, 2007, the Company reinstated its charter. We have updated our affairs and become current in our various reporting obligations. We intend to combine the Company with another entity in a merger, acquisition, or similar transaction and are seeking potential candidates. Our plan is to evaluate prospects, structure a transaction, and ultimately combine with another entity. We are unable, at this time, to predict when, if ever, our objectives will be achieved. Liquidity and Capital Resources As of March 31, 2009, we had a working capital deficit of $(149,718). We had no current assets and current liabilities of $149,718. This represents a $10,421 increase in the deficit from the working capital deficit of $(139,297) at December 31, 2008. During the three months ended March 31, 2009, our working capital deficit increased because of costs incurred to revive our business and to meet the ongoing reporting requirements for a public company. These costs were funded by an increase in current liabilities. We will need additional funding to achieve our ultimate goals. We do not believe we are a candidate for conventional debt financing and in the past we have relied on loans and advances from stockholders to fund our operations; however we have no guarantee that our stockholders will be willing and able to fund all of our future financing needs. We entered into a note payable agreement with one of our stockholders effective July 2, 2007. The note provides for borrowings up to the principal amount of $64,871, is uncollateralized, and bears interest at an annual rate of 8%. We issued 945,987 shares of our common stock as additional consideration for the loan agreement. The stockholder has agreed to extend the due date of the note from June 30, 2008 to June 30, 2009. On November 14, 2007, we entered into a loan agreement with our President and a stockholder. The principal maximum amount that can be borrowed is $133,333. The note is due on demand, is uncollateralized, bears interest at 8% per annum, and is convertible into restricted common stock at $0.10 per share. We issued 10,000,000 shares of common stock as additional consideration for the note payable. As of March 31, 2009, we had borrowed $61,347 under this arrangement and the amount available for future borrowings was $71,986. 9 Our President has periodically advanced funds to us to meet our working capital needs. As of March 31, 2009, we owe our President $5,334 for advances which are uncollateralized, non-interest bearing and due on demand. During the three months ended March 31, 2009, we incurred other obligations and liabilities which are reflected in the accompanying balance sheet as accounts payable and accrued expenses. Net cash used in operating activities was $9,059 during the first three months of 2009 compared to cash used of $12,197 during the first three months of 2008. For both periods, all of our cash needs were funded by related parties. Results of Operations - Three Months Ended March 31, 2009 Compared to the Three Months Ended March 31, 2008 We are considered a development stage company for accounting purposes, since we are working to revive the Company and to implement our plan of operations. We are unable to predict with any degree of accuracy when this classification will change. We expect to incur losses until such time, if ever, we begin generating revenue from operations. For the three months ended March 31, 2009, we recorded a net loss of $(10,421), or $ (0.00) per share, compared to a loss for the corresponding period of 2008 of $(21,856) or $(0.00) per share. In neither period did we report any revenue. Operating expenses decreased to $7,902 for the three months ended March 31, 2009 compared to $19,949 during the comparable period of 2008. Accounting and auditing fees decreased by $11,772 because the process of updating our affairs and becoming current in our reporting obligations was completed during 2008, and the costs incurred during 2009 are for meeting current reporting requirements for a public company. During the three months ended March 31, 2009, we incurred interest expense of $2,319 related to the notes payable to stockholders, compared to $1,907 for the three months ended March 31, 2008. Interest expense increased as the note balances increased from $114,285 reported at March 31, 2008 to $126,218 at March 31, 2009. Off-Balance Sheet Arrangements As of and subsequent to March 31, 2009, we have no off-balance sheet arrangements. Forward-Looking Statements This Form 10-Q contains or incorporates by reference "forward-looking statements," as that term is used in federal securities laws, about our financial condition, results of operations and business. These statements include, among others: - statements concerning the benefits that we expect will result from our business activities and results of business development that we contemplate or have completed, such as increased revenues; and - statements of our expectations, beliefs, future plans and strategies, anticipated developments and other matters that are not historical facts. 10 These statements may be made expressly in this document or may be incorporated by reference to other documents that we will file with the SEC. You can find many of these statements by looking for words such as "believes," "expects," "anticipates," "estimates" or similar expressions used in this report or incorporated by reference in this report. These forward-looking statements are subject to numerous assumptions, risks and uncertainties that may cause our actual results to be materially different from any future results expressed or implied in those statements. Because the statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied. We caution you not to put undue reliance on these statements, which speak only as of the date of this report. Further, the information contained in this document or incorporated herein by reference is a statement of our present intention and is based on present facts and assumptions, and may change at any time and without notice, based on changes in such facts or assumptions. Item 3. Quantitative and Qualitative Disclosures about Market Risk The important factors that could prevent us from achieving our stated goals and objectives include, but are not limited to, those set forth in our annual report on Form 10-K, other reports filed with the SEC and the following: o The worldwide economic situation; o Any change in interest rates or inflation; o The willingness and ability of third parties to honor their contractual commitments; o Our ability to raise additional capital, as it may be affected by current conditions in the stock market and competition for risk capital; o Environmental and other regulations, as the same presently exist and may hereafter be amended. We undertake no responsibility or obligation to update publicly these forward-looking statements, but may do so in the future in written or oral statements. Investors should take note of any future statements made by or on our behalf. Item 4. Controls and Procedures (a) We maintain a system of controls and procedures designed to ensure that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported, within time periods specified in the SEC's rules and forms and to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure. As of March 31, 2009, under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, management has evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, the Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective. (b) Changes in Internal Controls. There were no changes in our internal control over financial reporting during the quarter ended March 31, 2009 that materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting. 11 PART II - OTHER INFORMATION Item 1. Legal Proceedings. None Item 1A. Risk Factors. Not required for smaller reporting companies. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. None Item 3. Defaults Upon Senior Securities. None Item 4. Submission of Matters to a Vote of Security Holders. None Item 5. Other Information. None Item 6. Exhibits. a. Exhibits 31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Borivoje Vukadinovic. 32.1 Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Borivoje Vukadinovic. 12 SIGNATURES In accordance with Section 13 or 15(d) of the Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. RETROSPETTIVA, INC. /s/ Borivoje Vukadinovic ----------------------------------- Dated: May 11, 2009 By: Borivoje Vukadinovic, Director, Chief Executive Officer, and Chief Financial Officer In accordance with the Exchange Act, this Report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated. RETROSPETTIVA, INC. /s/ Borivoje Vukadinovic ----------------------------------- Dated: May 11, 2009 By: Borivoje Vukadinovic, Director, Chief Executive Officer, and Chief Financial Officer 13