AMMO, INC. - Quarter Report: 2014 September (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 transition period from ____            to   ________

(Exact Name of Registrant as Specified in its Charter)

 

CALIFORNIA	333-29295	95-4298051
(State of incorporation or organization)	(Commission File No.)	(I.R.S. Employer Identification Number)

                                                                         

(Address of Principal Executive Offices)  (Zip Code)

Registrant's telephone number including area code:  (213) 623-9216

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RETROSPETTIVA, INC.

Index

		Page
Part I - FINANCIAL INFORMATION
Item 1.	Financial Statements
	Balance Sheets as of September 30, 2014 (unaudited) and December 31, 2013 (unaudited)	2
	Statements of Operations (unaudited) for the three months ended September 30, 2014 and 2013	3
	Statements of Operations (unaudited) for the nine months ended September 30, 2014 and 2013, and for the Development Period from October 11, 2006 to September 30, 2014	4
	Statements of Cash Flows (unaudited) for the nine months ended September 30, 2014 and 2013, and for the Development Period from October 11, 2006 to September 30, 2014	5
	Notes to Financial Statements (unaudited)	6
Item 2.	Management's Discussion and Analysis or Plan of Operation	11
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	14
Item 4.	Controls and Procedures	14
Part II - OTHER INFORMATION
Item 1.	Legal Proceedings	15
Item 1A.	Risk Factors	15
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	15
Item 3.	Defaults Upon Senior Securities	15
Item 4.	Mine Safety Disclosures	15
Item 5.	Other Information	15
Item 6.	Exhibits	15
SIGNATURES		16

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RETROSPETTIVA, INC.

(A Development Stage Company)

BALANCE SHEETS

 

		September 30 2014				December 31, 2013
		(Unaudited)				(Unaudited)
ASSETS
Current assets:
Cash			-				-
Total current assets		$	-				-
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Current liabilities:
Accounts payable		$	691			$	1,444
Accrued expenses			2,375				1,775
Advances payable - officer			6,934				6,934
Notes payable - stockholders			198,266				198,266
Accrued interest - stockholders			86,477				74,316
Total current liabilities			294,743				282,735
Commitments and contingencies (Notes 1, 2, 3, and 5)
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			234,353				230,000
Accumulated deficit through October 11, 2006			(7,302,235	)			(7,302,235	)
(Accumulated deficit) during development stage			(130,627	)			(114,266	)
Total stockholders' (deficit)			(294,743	)			(282,735	)
Total liabilities and stockholders' (deficit)		$	0.00			$	0.00

 

 

The accompanying notes are an integral part of these financial statements.

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RETROSPETTIVA, INC.

(A Development Stage Company)

STATEMENTS OF OPERATIONS

for the three months ended September 30, 2014 and 2013

(Unaudited)

 

		2014				2013
Revenues		$	-			$	-
Expenses:
General and administrative:
Financing costs			-				-
Consulting fees			-				-
Accounting and legal			525				300
Investor relations			570				624
Total expenses			1,095				924
Operating (loss)			(1,095	)			(924	)
Other income (expense):
Gain from litigation settlement			-				-
Interest (expense)			(3,998	)			(3,802	)
			(3,998	)			(3,802	)
Income (loss) before income taxes			(5,093	)			(4,726	)
Provision for income taxes			200				200
Net income (loss)		$	(5,293	)		$	(4,926	)
Net (loss) per common share:
Basic and Diluted		$	Nil			$	Nil
Weighted average shares outstanding:
Basic and Diluted			14,425,903				14,425,903

 

 

 

The accompanying notes are an integral part of these financial statements.

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										Development Period
										October 11, 2006
		2014				2013				to September 30, 2014
Revenues		$	-			$	-			$	-
Expenses:
General and administrative:
Financing costs			-				-				2,917
Consulting fees			-				-				8,029
Accounting and legal			1,538				2,758				125,719
Investor relations			2,062				3,009				38,006
Total expenses			3,600				5,767				174,670
Operating (loss)			(3,600	)			(5,767	)			(174,670	)
Other income (expense):
Gain from litigation settlement			-				-				137,310
Interest (expense)			(12,160	)			(11,172	)			(86,476	)
			(12,160	)			(11,172	)			50,834
Income (loss) before income taxes			(15,760	)			(16,939	)			(123,837	)
Provision for income taxes			600				600				6,790
Net income (loss)		$	(16,360	)		$	(17,539	)		$	(130,627	)
Net (loss) per common share:
Basic and Diluted		$	Nil			$	Nil
Weighted average shares outstanding:
Basic and Diluted			14,425,903				14,425,903

 

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RETROSPETTIVA, INC.

(A Development Stage Company)

STATEMENTS OF CASH FLOWS

for the nine months ended September 30, 2014, and 2013

and for the Development Period from October 11, 2006 to September 30, 2014

 (Unaudited)

 

 

										Development Period
										October 11, 2006
		2014				2013				to September 30, 2014
Cash flows from operating activities:
Net income (loss)		$	(16,360	)		$	(17,205	)		$	(101,438	)
Adjustments to reconcile net income (loss) to net cash
used by operating activities:
Gain from litigation settlement											(137,310	)
Shares issued for loan fees and consulting fees											10,946
Changes in operating assets and liabilities:
Accounts payable			(754	)			(5,312	)			(8,310	)
Accrued expenses			600				75				1,900
Judgement payable											(27,750	)
Accrued interest			12,161				11,172				67,777
Total adjustments			12,007				5,935				(92,747	)
Net cash (used in) operating activities			(4,353	)			(11,270	)			(194,185	)
Cash flows from investing activities:
Net cash (used in) investing activities			-				-				-
Cash flows from financing activities:
Proceeds from notes payable - stockholders							11,270				182,898
Cash Proceeds from add'l Paid in Capital			4,353								4,353
Advances from officer											6,934
Net cash provided by financing activities			4,353				11,270				194,185
Net increase in cash and equivalents			-				-				-
Cash and equivalents at beginning of year			-				-				-
Cash and equivalents at end of year		$	-			$	-			$	-
Supplemental Cash Flow Information
Interest paid		$	-			$	-			$	-
Income taxes paid		$	-			$	-			$	7,670

 

 

The accompanying notes are an integral part of these financial statements.

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RETROSPETTIVA, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

 September 30, 2014

(Unaudited)

 

1.     Summary of Significant Accounting Policies

 

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 was inactive from 2002 until commencement of the development stage.  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.

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Per Share Amounts:     Basic earnings (loss) per share is computed by dividing net loss by the weighted average number of common shares outstanding during each period.  Diluted earnings (loss) per share reflects the potential dilution that could occur if potentially dilutive securities are converted into common shares.  Potentially dilutive securities, such as stock options and warrants, are excluded from the calculation when their inclusion would be anti-dilutive, such as periods when a net loss is reported or when the exercise price of the instrument exceeds the fair market value.  During 2014 and 2013, 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.

 

Recently Adopted Accounting Standards.  The Company evaluates the pronouncements of various authoritative accounting organizations, primarily the Financial Accounting Standards Board ("FASB"), the SEC, and the Emerging Issues Task Force ("EITF"), to determine the impact of new pronouncements on US GAAP and the impact on the Company.

Accounting Standards Codification - In June 2009, FASB established the Accounting Standards Codification ("ASC") as the single source of authoritative US GAAP to be applied by nongovernmental entities.  Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative US GAAP for SEC registrants.  The ASC is a new structure which took existing accounting pronouncements and organized them by accounting topic.  The ASC did not change current US GAAP, but was intended to simplify user access to all authoritative US GAAP by providing all the relevant literature related to a particular topic in one place.  All previously existing accounting standards were superseded and all other accounting literature not included in the ASC is considered non-authoritative.  New accounting standards issued subsequent to June 30, 2009, will be communicated by the FASB through Accounting Standards Updates (ASU's).  The ASC was effective during the period ended September 30, 2009.  Adoption of the ASC did not have an impact on the Company's financial position, results of operations or cash flows.

The Company has recently adopted the following new accounting standards:

Subsequent Events - In May 2009, the ASC guidance for subsequent events was updated to establish accounting and reporting standards for events that occur after the balance sheet date but before financial statements are issued.  The guidance was amended in February 2010.  The update sets forth: (i) the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, (ii) the circumstances under which an entity should recognize events or transactions occurring after the balance sheet in its financial statements, and (iii) the disclosures that an entity should make about events or transactions occurring after the balance sheet date in its financial statements.  The amended ASU was effective immediately and its adoption had no impact on the Company's financial position, results of operations or cash flows.

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Fair Value Measurements – In January 2010, ASU 2010-6 amended existing disclosure requirements about fair value measurements by adding required disclosures about items transferring into and out of levels 1 and 2 in the fair value hierarchy; adding separate disclosures about purchase, sales, issuances, and settlements relative to level 3 measurements; and clarifying, among other things, the existing fair value disclosures about the level of disaggregation. The ASU was adopted during the period ended June 30, 2010, and its adoption had no impact on the Company's financial position, results of operations or cash flows.

Consolidations – ASU 2009-17 revises the consolidation guidance for variable-interest entities. The modifications include the elimination of the exemption for qualifying special purpose entities, a new approach for determining who should consolidate a variable-interest entity, and changes to when it is necessary to reassess who should consolidate a variable-interest entity. The ASU was adopted during the period ended June 30, 2010, and its adoption had no impact on the Company's financial position, results of operations or cash flows.

Recently Issued Accounting Standards Updates.     The following accounting standards updates were recently issued and have not yet been adopted by the Company.  These standards are currently under review to determine their impact on the Company's financial position, results of operations, or cash flows.

ASU No. 2010-11 was issued in March 2010, and clarifies that the transfer of credit risk that is only in the form of subordination of one financial instrument to another is an embedded derivative feature that should not be subject to potential bifurcation and separate accounting.  This ASU will be effective for the first fiscal quarter beginning after June 15, 2010, with early adoption permitted.

There were various other accounting standards updates recently issued, most of which represented technical corrections to the accounting literature or were applicable only to specific industries.  None of these additional recent updates are expected to 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.

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3.     Related Party Transactions

 

 

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 2034, 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.

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The Company's deferred tax assets, valuation allowance, and change in valuation allowance are as follows:

 

Period Ending		Estimated NOL Carry-forward		NOL Expires		Estimated Tax Benefit from NOL		Valuation Allowance		Change in Valuation Allowance	Net Tax Benefit
December 31, 2013		$ 500,000		Various		113,250		(113,250)		$(-0-)	$—
September 30, 2014		4,201		2034		$0		$(0)		0	$—

Income taxes at the statutory rate are reconciled to the Company's reported income tax expense (benefit) as follows:

 

5.     Other Matters

On July 22, 2010, the Company entered into an Agreement and Plan of Merger with NewGen BioPharma Corporation ("NewGen").  NewGen is a start-up, early stage biopharmaceutical company that plans to develop and market therapeutic products that will generally be reformulations of existing active pharmaceutical ingredients.  Completion of the transaction contemplated by the Agreement was subject to a number of contractual closing conditions.  Those conditions were not satisfied and the Agreement was terminated.

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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 September 30, 2014 and compares it to our financial condition at September 30, 2013. Finally, the discussion summarizes the results of our operations for the three and nine months ended September 30, 2014 and compares those results to the corresponding periods ended September 30, 2013.  This discussion and analysis should be read in conjunction with our unaudited financial statements for the year ended December 31, 2013, 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.

On July 22, 2010, we entered into an Agreement and Plan of Merger with NewGen BioPharma Corporation ("NewGen").  NewGen is a start-up, early stage biopharmaceutical company that plans to develop and market therapeutic products that will generally be reformulations of existing active pharmaceutical ingredients.  Completion of the transaction contemplated by the Agreement was subject to a number of contractual closing conditions.  Those conditions were not satisfied and the Agreement was terminated.

We are unable, at this time, to predict when, if ever, our objectives will be achieved.

Liquidity and Capital Resources

As of September 30, 2014, we had a working capital deficit of $(294,743).  We had minimal current assets of $ -0- and current liabilities of $ 294,743.  This represents an $ 12,008 increase in the deficit from the working capital deficit of $(282,735) at December 31, 2013.  During the nine months ended September 30, 2014, 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 additional paid-in capital this quarter and current liabilities the 2 previous quarters.

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.

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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%.  The original due date of June 30, 2008 has been modified, and the current terms of the note require it to be repaid upon demand.  We issued 945,987 shares of our common stock as additional consideration for the loan agreement.

 

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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.

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.

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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:

·	The worldwide economic situation;

·	Any change in interest rates or inflation;

·	The willingness and ability of third parties to honor their contractual commitments;

·	Our ability to raise additional capital, as it may be affected by current conditions in the stock market and competition for risk capital;

·	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 September 30, 2014, 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 not effective.

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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.  Mine Safety Disclosures

 

None

Item 5.  Other Information.

None

Item 6.  Exhibits.

a.   Exhibits