Item 1A. Risk Factors.
Not applicable to smaller reporting companies.
Item 1B.
Item 1B. Unresolved Staff Comments.
None.
Item 2.
Item 2. Properties.
We are presently using office space located at 409 - 903 19th Avenue SW, Calgary, Alberta, T2T OH8. This office is provided to us at no cost by our President.
Item 3.
Item 3. Legal Proceedings.
As of August 31, 2010, there are no material pending legal proceedings (other than ordinary routine litigation incidental to our business) to which we are a party or of which any of our properties is the subject. Also, our management is not aware of any legal proceedings contemplated by any governmental authority against us.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
PART II
Item 5.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market Information
Our common stock is not traded on any exchange. Our common stock is quoted on the OTC Bulletin Board, under the trading symbol “GIDD.OB”. As of November 10, 2010 no shares of our common stock have traded and therefore there is no public market price for our shares.
Holders
As of November 10, 2010 there were 57 owners of record of our common stock.
Dividend Policy
Our Board of Directors may declare and pay dividends on outstanding shares of common stock out of funds legally available there for in our sole discretion; however, to date no dividends have been paid on common stock and we do not anticipate the payment of dividends in the foreseeable future.
Equity Compensation Plans
As of August 31, 2010, we did not have any equity compensation plans.
Recent Sales of Unregistered Securities
Not Applicable.
Item 6.
Item 6. Selected Financial Data.
Not applicable to smaller reporting companies.
Item 7.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Qualitative Disclosures About Market Risk.
The following discussion should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this annual report. The discussions of results, causes and trends should not be construed to imply any conclusion that these results or trends will necessarily continue into the future.
Forward-Looking Statements
This Annual Report contains certain forward-looking statements. All statements other than statements of historical fact are “forward-looking statements” for the purposes of these provisions, including any projections of earnings, revenues or other financial items; any statements of the plans, strategies, and objectives of management for future operation; any statements concerning proposed new products, services or developments; any statements regarding future economic conditions or performance; statements of belief; and any statement of assumptions underlying any of the foregoing. Such forward-looking statements are subject to inherent risks and uncertainties and actual results could differ materially from those anticipated by the forward-looking statements.
Results of Operations
Our results of operations are summarized below:
Lack of Revenues
We have had limited operational history since our inception on August 30, 2007. Since our inception to August 31, 2010 we have not generated any revenues. As of August 31, 2010 we had total assets of $17,677 and total liabilities of $166,735. Since our inception to August 31, 2010 we accumulated a deficit of $262,069. As of August 31, 2009 we had total assets of $38,113 and total liabilities of $54,405. We anticipate that we will incur substantial losses over the next year and our ability to generate any revenues in the next 12 months continues to be uncertain.
Expenses
For the year ended August 31, 2010, we have total expenses of $132,766, including $23,436 in accounting and auditing costs, $8,544 in amortization, $377 in interest expense, $Nil in marketing expense, $6,822 in legal fees, $12,851 in regulatory and filing fees, $78,000 in salaries and benefits and $2,736 in office expenses.
By comparison, for the year ended August 31, 2009, we had total expenses of $103,063, including $14,123 in accounting and auditing costs, $5,991 in amortization, $126 in interest expense, $4,003 in marketing expense, $8,642 in legal fees, $888 in regulatory and filing fees, $59,000 in salaries and benefits and $10,290 in office expenses. The main reason for the increase in expenses is due to the increase in salaries and benefits and regulatory and filing fees in 2010.
Since our inception on August 30, 2007 to August 31, 2010, we accumulated total expenses of $291,256, including $52,672 in accounting and auditing costs, $19,804 in amortization, $905 in interest expense, $10,713 in marketing expense, $41,587 in legal fees, $13,964 in regulatory and filing fees, $137,000 in salaries and benefits and $14,611 in office expenses.
Our office expenses consist of communication expenses (cellular, internet, fax and telephone), foreign exchange, courier, postage costs, rent, hosting fees and office supplies.
Net Loss
Since our inception on August 30, 2007 to August 31, 2010, we incurred net loss of $262,069. For the year ended August 31, 2010, we incurred net loss of $132,766. For the year ended August 31, 2009, we incurred a net loss of $73,876. Our net loss per share was $0.01 for the year ended August 31, 2010 and $0.01 for the year ended August 31, 2009.
Liquidity and Capital Resources
As of August 31, 2010 we had cash of $17,324 and a working capital deficit of $149,411. Since our inception on August 30, 2007 to August 31, 2010, our accumulated net loss was $262,069. We are solely dependent on the funds raised through our equity or debt financing and our net loss was funded through equity financing and from loans from our directors.
Since our inception on August 30, 2007 to August 31, 2010, we have received gross proceeds of $101,698 cash from share subscriptions.
Since our inception on August 30, 2007 to August 31, 2010 we used net cash of $20,158 in investing activities and $154,607 in operating activities. We also received net cash of $192,089 from financing activities.
Off-Balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders.
Inflation
The effect of inflation on our revenue and operating results has not been significant.
Item 7A.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
Not Applicable to smaller reporting companies.
Item 8.
Item 8. Financial Statements and Supplementary Data.
GIDDY-UP PRODUCTIONS, INC.
Financial Statements
(Expressed in United States dollars)
August 31, 2010
Index
Chang Lee LLP
Chartered Accountants
606 - 815 Hornby Street
Vancouver, B.C, V6Z 2E6
Tel: 604-687-3776
Fax: 604-688-3373
E-mail: info@changleellp.com
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Giddy-up Productions, Inc.
(A development stage company)
We have audited the accompanying balance sheets of Giddy-up Productions, Inc. (a development stage company) as at August 31, 2010 and 2009 and the related statements of stockholders’ equity, operations and comprehensive loss and cash flows for the years ended, and the period cumulative from August 30, 2007 (date of inception) to August 31, 2010. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as at August 31, 2010 and 2009 and the results of its operations and its cash flows for the years ended and the period cumulative from August 30, 2007 (date of inception) to August 31, 2010, in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company incurred losses from operations since inception, has not attained profitable operations and is dependent upon obtaining adequate financing to fulfill its operation activities. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also discussed in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Vancouver, Canada
November 3, 2010 Chartered Accountants
The accompanying notes are an integral part of these financial statements.
GIDDY-UP PRODUCTIONS, INC.
(A development stage company)
Statements of Stockholders' Equity
For the period from August 30, 2007 (inception) to August 31, 2010
(Expressed in U.S. Dollars)
The accompanying notes are an integral part of these financial statements.
The accompanying notes are an integral part of these financial statements.
The accompanying notes are an integral part of these financial statements.
1. INCORPORATION AND CONTINUANCE OF OPERATIONS
Giddy-up Productions, Inc. was formed on August 30, 2007 under the laws of the State of Nevada. We have not commenced our planned principal operations, producing motion pictures. We are considered as a development stage company as defined in ASC 915 “Accounting and Reporting for Development Stage Enterprises”. We have an office in Calgary, Alberta. The Company’s fiscal year end is August 31.
These financial statements have been prepared in accordance with U.S. generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. We have incurred operating losses and require additional funds to maintain our operations. Management’s plans in this regard are to raise equity financing as required.
These conditions raise substantial doubt about our ability to continue as a going concern. These financial statements do not include any adjustments that might result from this uncertainty.
We have not generated any operating revenues to date.
2. SIGNIFICANT ACCOUNTING POLICIES
Cash and Cash Equivalents
Cash equivalents comprise certain highly liquid instruments with a maturity of three months or less when purchased. As at August 31, 2010 and 2009, cash and cash equivalents consist of only cash.
Accounting Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts 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. Actual results could differ from those estimates and assumptions.
Advertising Expenses
We expense advertising costs as incurred. Total advertising expenses for the year ended August 31, 2010 were $ Nil (2009 - $ 4,003).
Loss Per Share
Loss per share is computed using the weighted average number of shares outstanding during the period. We have adopted ASC 260, "Earnings Per Share". Diluted loss per share for fiscal years 2010 and 2009 is equivalent to basic loss per share as there was no potential dilutive equity instruments.
The Company adopted ASC 260-10-45-61A which addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and affects entities that accrue cash dividends on share-based payment awards during the awards’ service period when the dividends do not need to be returned if the employees forfeit the awards. ASC 260-10-45-61A states that all outstanding unvested share-based payment awards that contain rights to nonforfeitable dividends participate in undistributed earnings with common shareholders and, therefore, need to be included in the earnings allocation in computing earnings per share under the two-class method. The adoption of ASC 260-10-45-61A did not have a material impact on the Company’s financial statements.
Concentration of Credit Risk
We place our cash and cash equivalents with high credit quality financial institutions. As of August 31, 2010, we had $ 17,324 (2009 - $ 316) in a bank and $nil beyond insured limits.
Foreign Currency Transactions
We are located and operating outside of the United States of America. We maintain our accounting records in U.S. Dollars, as follows:
At the transaction date, each asset, liability, revenue and expense is translated into U.S. dollars by the use of the exchange rate in effect at that date. At the period end, monetary assets and liabilities are re-measured by using the exchange rate in effect at that date. The resulting foreign exchange gains and losses are included in operations.
Fair Value of Financial Instruments
The estimated fair values for financial instruments under ASC 825, Financial Instruments, are determined at discrete points in time based on relevant market information. These estimates involve uncertainties and cannot be determined with precision. The estimated fair value of the Company’s financial instruments includes cash and cash equivalents, other receivable, accounts payable and accrued liabilities and due to related parties. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. The fair value of these financial instruments approximates their carrying values, unless otherwise noted.
The Company adopted ASC 820, Fair Value Measurements and Disclosures, which defines fair value, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. ASC 820 does not require any new fair value measurements, but provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information. The fair value hierarchy distinguishes between assumptions based on market data (observable inputs) and an entity’s own assumptions (unobservable inputs). The hierarchy consists of three levels:
·
Level one - Quoted market prices in active markets for identical assets or liabilities;
·
Level two - Inputs other than level one inputs that are either directly or indirectly observable; and
·
Level three - Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use.
The following table presents financial assets and liabilities measured at fair value on a recurring basis as of August 31, 2010:
The adoption of ASC 820 has no material effect on the Company’s financial position or results of operations. The book values of cash and cash equivalents, other receivable, accounts payable and accrued liabilities and due to related parties approximate their respective fair values due to the short-term nature of these instruments. The Company has no assets or liabilities that are measured at fair value on a recurring basis. There were no assets or liabilities measured at fair value on a non-recurring basis during the year ended August 31, 2010 and 2009.
Income Taxes
We adopted ASC 740, Income Taxes, which requires us to recognize deferred tax liabilities and assets for the expected future tax consequences of events that have been recognized in our financial statements or tax returns using the liability method. Under this method, deferred tax liabilities and assets are determined based on the temporary differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse.
Stock-Based Compensation
The Company adopted ASC 718, Compensation - Stock-Based Compensation, to account for its stock options and similar equity instruments issued. Accordingly, compensation costs attributable to stock options or similar equity instruments granted are measured at the fair value at the grant date, and expensed over the expected vesting period. ASC 718 requires excess tax benefits be reported as a financing cash inflow rather than as a reduction of taxes paid.
We did not grant any stock options during the year ended August 31, 2010 and 2009.
Comprehensive Income
We adopted ASC 220, Comprehensive Income, which establishes standards for reporting and display of comprehensive income, its components and accumulated balances. We are disclosing this information on our Statement of Stockholders' Equity. Comprehensive income comprises equity except those resulting from investments by owners and distributions to owners. We have no elements of "other comprehensive income” for the year ended August 31, 2010 and 2009.
Film Property and Screenplay Rights
The Company capitalized costs it incurs to buy film or transcripts that will later be marketed or be used in the production of films according to ASC 926, Entertainment - Films. The Company will begin amortization of capitalized film cost when a film is released and it begins to recognize revenue from the film.
Accounting for Derivative Instruments and Hedging Activities
We adopted ASC 815, Derivatives and Hedging, which requires companies to recognize all derivative contracts as either assets or liabilities in the balance sheet and to measure them at fair value. If certain conditions are met, a derivative may be specifically designated as a hedge, the objective of which is to match the timing of gain and loss recognition on the hedging derivative with the recognition of (i) the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk or (ii) the earnings effect of the hedged forecasted transaction. For a derivative not designated as a hedging instrument, the gain or loss is recognized in income in the period of change.
We have not entered into derivative contracts either to hedge existing risks or for speculative purposes since inception.
Long-Lived Assets Impairment
Our long-term assets are reviewed when changes in circumstances require as to whether their carrying value has become impaired, pursuant to guidance established in ASC 360, Property, Plant and Equipment. Management considers assets to be impaired if the carrying value exceeds the future projected cash flows from the related operations (undiscounted and without interest charges). If impairment is deemed to exist, the assets will be written down to fair value.
Website Development Costs
Website development costs are for the development of the Company's Internet website. These costs have been capitalized when acquired and installed, and are being amortized over its estimated useful life of three years on a straight line basis. The Company accounts for these costs in accordance with ASC 350, Intangibles, which specifies the appropriate accounting for costs incurred in connection with the development and maintenance of websites. Amortization expense amounts to $8,544 for the year ended August 31, 2010 (2009 - $5,991).
Newly Adopted Accounting Pronouncements
In June 2009, the FASB issued guidance now codified as ASC 105, Generally Accepted Accounting Principles, as the single source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with U.S. GAAP, aside from those issued by the SEC. ASC 105 does not change current U.S. GAAP, but is intended to simplify user access to all authoritative U.S. GAAP by providing all authoritative literature related to a particular topic in one place. The adoption of ASC 105 did not have a material impact on the Company’s financial statements, but did eliminate references to pre-codification standards.
In December 2007, the FASB issued new requirements which established accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary, which are included in ASC 810 and are effective for fiscal years beginning on or after December 15, 2008, and for interim periods within such fiscal years. The Company adopted these provisions effective September 1, 2009, which did not have a material impact on its financial statements.
In December 2007, the FASB issued Business Combinations under ASC 805. This statement requires an acquirer to recognize the assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree at the acquisition date to be measured at their fair value as of that date. An acquirer is required to recognize assets or liabilities arising from all other contingencies (contractual contingencies) as of the acquisition date, measured at their acquisition-date fair values, only if it is more likely than not that they meet the definition of an asset or a liability in FASB Concepts Statement No. 6, Elements of Financial Statements. Any acquisition-related costs are to be expensed instead of capitalized. The Company adopted ASC 805 on September 1, 2009 and the impact will depend on future acquisitions at the time.
In February 2008, the FASB issued Fair Value Measurements and Disclosures under ASC 820-10, which deferred the effective date of fair value measurement for nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed at fair value in an entity’s financial statements on a recurring basis, at least annually. There was no impact when the Company adopted for these nonfinancial assets and nonfinancial liabilities on September 1, 2009. These assets and liabilities are measured at fair value on an ongoing basis but are reported at fair value only in certain circumstances.
In March 2008, FASB issued ASC 815-10 (prior authoritative literature: SFAS 161, Disclosures about Derivative Instruments and Hedging Activities-an amendment of FASB Statement No. 133). ASC 815-10 requires enhanced disclosures about an entity’s derivative and hedging activities. ASC 815-10 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008 with early application encouraged. The Company adopted ASC 815-10 on September 1, 2009. The adoption of this ASC did not have a material impact on the Company’s financial position or results of operations.
In April 2008, the FASB issued FSP FAS No. 142-3, Determination of the Useful Life of Intangible Assets , as codified in ASC subtopic 350-30, Intangibles - Goodwill and Other: General Intangibles Other than Goodwill (ASC 350-30) and ASC topic 275, Risks and Uncertainties (ASC 275), which amends the factors that must be considered in developing renewal or extension assumptions used to determine the useful life over which to amortize the cost of a recognized intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets , as codified in ASC topic 350, Intangibles Goodwill and Other (ASC 350). ASC 350-30 requires an entity to consider its own assumptions about renewal or extension of the term of the arrangement, consistent with its expected use of the asset, and is an attempt to improve consistency between the useful life of a recognized intangible asset under ASC 350 and the period of expected cash flows used to measure the fair value of the asset under ASC 805, Business Combinations. The Company adopted ASC 350-30 on September 1, 2009. The adoption of ASC 350-30 did not have a material impact on the Company’s financial position or results of operations.
In May 2008, FASB issued ASC 470-20 (formerly FASB Staff Position (“FSP”) APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement. ASC 470-20 clarifies that convertible debt instruments that may be settled in cash upon either mandatory or optional conversion (including partial cash settlement) are not addressed by paragraph 12 of APB Opinion No. 14, Accounting for Convertible Debt and Debt issued with Stock Purchase Warrants. Additionally, ASC 470-20 specifies that issuers of such instruments should separately account for the liability and equity components in a manner that will reflect the entity’s nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. The Company adopted ASC 470-20 on September 1, 2009. The adoption of this statement did not have a material effect on the Company’s financial statements.
On April 1, 2009, the FASB issued ASC 320-10-65 (formerly Staff Position No. FSP FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments). ASC 320-10-65 amends the other-than-temporary impairment guidance in U.S. GAAP for debt securities to make the guidance more operational and to improve the presentation and disclosure of other-than-temporary impairments on debt and equity securities in the financial statements. ASC 320-10-65 does not amend existing recognition and measurement guidance related to other-than-temporary impairments of equity securities. The Company adopted ASC 320-10-65 on September 1, 2009. The adoption of this FSP did not have a material impact on the Company’s financial statements.
Recent Accounting Pronouncements
In April, 2009, the FASB issued ASC subtopic 820-10 (formerly Staff Position No. FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly). ASC 820-10 provides additional guidance for estimating fair value when the volume and level of activity for the asset or liability have significantly decreased. This ASC subtopic also includes guidance on identifying circumstances that indicate a transaction is not orderly. The adoption of ASC 820-10 will not have a material impact on the Company’s financial statements.
In April, 2009, the FASB issued ASC 820-10-50 (formerly Staff Position No. FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments) that expands to interim periods the existing annual requirement to disclose the fair value of financial instruments that are not reflected on the balance sheet at fair value. The new guidance could potentially require additional disclosures in interim periods after the Company’s fiscal year ending 2010. Adoption of this FSP will not have a material impact on the Company’s financial statements.
In June 2009, the FASB issued ASC 860, Transfers and Servicing. ASC 860 requires more information about transfers of financial assets, including securitization transactions, and where entities have continuing exposure to the risks related to transferred financial assets. It eliminates the concept of a “qualifying special-purpose entity,” changes the requirements for derecognizing financial assets, and requires additional disclosures. It also enhances information reported to users of financial statements by providing greater transparency about transfers of financial assets and an entity’s continuing involvement in transferred financial assets. ASC 860 is effective for fiscal years beginning after November 15, 2009.
In January 2010, the FASB issued a new guidance, Improving Disclosures about Fair Value Measurements (ASU 2010-06). This provision amends previous provisions that require reporting entities to make new disclosures about recurring and nonrecurring fair value measurements including the amounts of and reasons for significant transfers into and out of Level 1 and Level 2 fair value measurements and separate disclosure of purchases, sales, issuances, and settlements in the reconciliation of Level 3 fair value measurements. This guidance is effective for fiscal years, and interim periods within those fiscal years beginning after December 15, 2009, except for Level 3 reconciliation disclosures which are effective for fiscal years, and interim periods within those fiscal years beginning after December 15, 2010. The adoption of this guidance did not have a material impact on the Company’s results of operations or financial condition.
In July 2010, the FASB issued Accounting Standards Update ASU 2010-20, Receivables (Topic 310) Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses, which improves the disclosures that an entity provides about the credit quality of its financing receivables and the related allowance for credit losses. As a result of these amendments, an entity is required to disaggregate by portfolio segment or class certain existing disclosures and provide certain new disclosures about its financing receivables and related allowance for credit losses. ASU 2010-20 is effective for financial statements issued for interim and annual periods ending on or after December 15, 2010 except for disclosures about activity that occurs during a reporting period, which are effective for interim and annual reporting periods beginning on or after December 15, 2010. The Company does not expect the adoption of ASU 2010-20 to have a material impact on its consolidated financial statements.
Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s financial statements upon adoption.
3. FILM PROPERTY
On August 30, 2007, we entered into a purchase agreement with our President to acquire all right, title and interest in and to a motion picture titled "Not That Kind of Girl" for total cash consideration of $40,000. On August 31, 2007, our President agreed to accept 8,000,000 shares of our common stock in full and final satisfaction of the $40,000 debt. In accordance with SEC Staff Accounting Bulletin 5G "Transfers of Non-monetary Assets by Promoters or shareholders", provided that transfer of non-monetary assets to a company by its promoters or shareholders in exchange for stock prior to or at the time of the Company's initial public offering normally should be recorded at the transferor's historical cost basis determined under GAAP. Pursuant to SEC Staff Accounting Bulletin 5G, the Company has recorded the film property at its estimated original cost of $10,813 by crediting the film property with $29,187 and debiting the additional paid-in capital with $29,187.
On March 30, 2009, the Company’s leased office was damaged by a fire and damaged the Company’s property - the movie masters for “Not That Kind of Girl”. The Company pursued an insurance claim for the master movie and the claim was settled at $40,000, the amount for the original consideration as guaranteed by a former director of the Company, who leased the office to the Company. As at August 31, 2010, the Company has received the settlement of $40,000 and the amounts $16,687 advanced by the former director in connection with the guarantee has been set up as payable and included in due to related parties.
4. PREFERRED AND COMMON STOCK
We have 100,000,000 shares of preferred stock authorized at par value of $0.0001 per share and none issued.
We have 100,000,000 shares of common stock authorized at par value of $0.0001 per share. All shares of stock are non-assessable and non-cumulative, with no pre-emptive rights.
On August 31, 2007, the Company issued 8,000,000 restricted shares of common stock for the settlement of $40,000 in debt owed to the president of the Company. (See note 3)
On September 8, 2007, we issued 100,000 restricted shares of common stock at $0.005 per share to a director of the Company for the settlement of $500 in debt.
On October 28, 2009, the Company issued 1,016,978 common shares at $0.10 per share in connection to its IPO.
5. RELATED PARTY TRANSACTIONS
Please see note 3 and note 4.
During the year ended August 31, 2010, the Company incurred $78,000 (2009 - $59,000) of salaries expense to a director of the Company. As at August 31, 2010, the above noted $78,000 has been deferred and included in due to related parties.
As at August 31, 2010, $165,584 was due to related parties, which $148,897 (2009 - $44,902) was due to the sole director of the Company and $16,687 (2009 - $nil) was due to a former director and a shareholder. The amount due to related parties was unsecured, non-interest bearing and due on demand.
6. COMMITMENTS
On January 1, 2009, the Company signed employment agreement with the director of the Company for a total of US $6,500 per month. The agreement shall continue until terminated by the director upon giving 3 months’ notice to the Company, or by the Company without notice.
7. COMPARATIVE FIGURES
Certain comparative figures have been reclassified in order to conform to the current period’s financial statement presentation.
Item 9.
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
None.
Item 9A.
Item 9A. Controls and Procedures.
Not applicable to smaller reporting companies.
Item 9A(T). Controls and Procedures.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)). Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
Because of our inherent limitations, our internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Our Chief Executive Officer and Chief Financial Officer assessed the effectiveness of our internal control over financial reporting as of August 31, 2010. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control - Integrated Framework.
Management conducted a walkthrough of the procedures and controls documented in this memo or relied on personal knowledge where no walk through was possible in order to test the effectiveness of the Company’s ICFR.
Management believes that the Company’s ICFR are currently ineffective at preventing or detecting a material misstatement in the financial statements because the following material weaknesses exist:
1.
The accounts payable and expenses may be overstated because there is lack of segregation of duties and therefore the Company is susceptible to fraud.
2.
Cash management may be a problem because the person in charge of writing checks also reconciles the bank account. The cash in our bank account is a relatively small but material amount and is susceptible to misappropriation.
3.
There are no preventative and detective IT systems in place to prevent and/or detect fraud other than password protection. There no software based accounting controls in place to prevent double entries, monitor performance, etc.
4.
There is a lack of entity wide controls establishing a “tone at the top”, including no audit committee, no policy on fraud and no code of ethics. A whistleblower policy is not necessary given the small size of the organization.
The recommendations to remediate these deficiencies are as follows:
1.
Hire an external accountant to record transactions and prepare the financial statements. The information should be sent to the accountant by someone who is not in control of the bank account.
2.
Obtain quotes for prevention and detection software in order to protect against fraud.
3.
Consider purchasing basic accounting software to record accounting transactions and print checks. However, a basic accounting program may not be GAAP compliant and may not provide an adequate audit trail. The Company needs to evaluate all options.
4.
Adopt a corporate records and document retention policy to ensure that all significant records are kept for the appropriate amount of time as required by law.
5.
Appoint a minimum of two independent directors to the board of directors and then implement an audit committee to review all financial statements and SEC filings and oversee the development of corporate policies.
This annual report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management's report in this annual report.
We did not change our internal control over financial reporting during our last fiscal quarter of 2010 in connection with the results of Management’s report, nor have we made any changes to our internal control over financial reporting as of November 10, 2010.
Item 9B.
Item 9B. Other Information.
None.
PART III Item 10.
Item 11. Executive Compensation.
Compensation of Directors
During the year ended August 31, 2010, we paid / accrued $78,000 in salaries to our current director Zoltan Nagy and a former director. The compensation paid / accrued to Mr. Nagy is also for his services as our President, Chief Executive Officer, Chief Financial Officer, Principal and Chief Accounting Officer, Secretary and Treasurer.
Pension, Retirement or Similar Benefit Plans
There are no arrangements or plans in which we provide pension, retirement or similar benefits to our directors or executive officers. We have no material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of the Board of Directors or a committee thereof.
Compensation Committee
We do not currently have a compensation committee of the Board of Directors. The Board of Directors as a whole determines executive compensation.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The following table sets forth the ownership, as of November 10, 2010, of our common stock by each of our directors, and by all executive officers and directors as a group, and by each person known to us who is the beneficial owner of more than 5% of any class of our securities. As of November 10, 2010, there were 9,116,978 common shares issued and outstanding. All persons named have sole voting and investment power with respect to the shares, except as otherwise noted. The number of shares described below includes shares which the beneficial owner described has the right to acquire within 60 days of the date of this Annual Report.
(1)
Zoltan Nagy is our director, President and Chief Executive Officer, Secretary and Treasurer.
We have an employment agreement with Zoltan Nagy whereby he acts as our President, Chief Executive Officer, Chief Financial Officer, Principal and Chief Accounting Officer, Secretary and Treasurer for a salary of $6,500 per month. We made no grants of stock options or stock appreciation rights since our inception to August 31, 2010.
We do not have any compensation plans, plans (including individual compensation arrangements) under which equity securities of the registrant are authorized for issuance.
Changes in Control
There are currently no arrangements which would result in a change in control of us.
Item 13.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Except as indicated herein, there have been no related party transactions, or any other transactions or relationships required to be disclosed pursuant to Item 404 of Regulation S-K.
Director Independence
Our director, Zoltan Nagy does not meet any of the definitions for independent directors. Once we engage further directors and officers, we intend to develop a definition of independence and scrutinize our Board of Directors with regard to this definition.
Item 14.
Item 14. Principal Accounting Fees and Services.
Audit, Audit-Related and Non-Audit Fees
The following table represents fees for the professional audit services and fees billed for other services rendered by our current auditors, Chang Lee LLP, for the audit of our annual financial statements for the years ended August 31, 2010 and August 31, 2009 and any other fees billed for other services rendered Chang Lee LLP during that period.
PART IV
Item 15.
Item 15. Exhibits and Financial Statement Schedules.
(a) (1) Financial Statements
See “Index to Financial Statements” set forth on page.
(a) (2) Financial Statement Schedules
None. The financial statement schedules are omitted because they are inapplicable or the requested information is shown in our financial statements or related notes thereto.
EXHIBIT DESCRIPTION
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
Giddy-up Productions, Inc.
By: /s/ Zoltan Nagy
Date: November 16, 2010
Zoltan Nagy
President, Chief Executive Officer
Chief Financial Officer, Director, Secretary, Treasurer
Pursuant to the requirements of the Exchange Act this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ Zoltan Nagy
President, Chief Executive
November 16, 2010
Zoltan Nagy
Officer, Chief Financial Officer, Director, Secretary, Treasurer