some Edgar filing today? Management's Discussion and Analysis or Plan of Operation
Friday, November 12 2010 6:53 AM, EST Item 2. Management's Discussion and Analysis or Plan of Operation Edgar Online "Glimpses "
Overview
The following discussion updates our plan of operation for the next twelve months. It also analyzes our financial condition at September 30, 2010 and compares it to our financial condition at December 31, 2009 . Finally, the discussion summarizes the results of our operations for the three and nine months ended September 30, 2010 and compares those results to the corresponding periods ended September 30, 2009 . This discussion and analysis should be read in conjunction with our audited financial statements for the year ended December 31, 2009 , 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, 2010 , we had a working capital deficit of $(195,409) . We had no current assets and current liabilities of $195,409 . This represents a $26,646 increase in the deficit from the working capital deficit of $(168,763) at December 31, 2009 . During the nine months ended September 30, 2010 , 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.
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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.
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 September 30, 2010 , we had borrowed $86,809 under this arrangement and the amount available for future borrowings was $46,524 .
Our President previously advanced funds to us to meet our working capital needs. As of September 30, 2010 , we owe our President $6,934 for advances which are uncollateralized, non-interest bearing and due on demand. During the nine months ended September 30, 2010 , 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 $16,668 during the first nine months of 2010 compared to cash used of $9,115 during the nine months ended September 30, 2009 . For both periods, all of our cash needs were funded by related parties.
Results of Operations - Three Months Ended September 30, 2010 Compared to the Three Months Ended September 30, 2009
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 September 30, 2010 , we recorded a net loss of $(6,350) , or $nil per share, compared to a loss for the corresponding period of 2009 of $(6,237) or $nil per share. In neither period did we report any revenue.
Operating expenses decreased to $3,245 for the three months ended September 30, 2010 compared to $3,490 during the comparable period of 2009. All of our operating expenses are incurred in connection with activities to meet current reporting requirements for a public company and there was no material change in the nature or extent of those activities.
During the three months ended September 30, 2010 , we incurred interest expense of $2,905 related to the notes payable to stockholders, compared to $2,547 for the three months ended September 30, 2009 . Interest expense increased as the note balances increased from $126,274 reported at September 30, 2009 to $151,680 at September 30, 2010 .
Results of Operations - Nine Months Ended September 30, 2010 Compared to the Nine Months Ended September 30, 2009
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.
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For the nine months ended September 30, 2010 , we recorded a net loss of $(26,646) , or $nil per share, compared to a loss for the corresponding period of 2009 of $(21,063) or $nil per share. In neither period did we report any revenue.
Operating expenses increased to $17,617 for the nine months ended September 30, 2010 compared to $13,080 during the comparable period of 2009. All of our operating expenses are incurred in connection with activities to meet current reporting requirements for a public company and there was no material change in the nature or extent of those activities.
During the nine months ended September 30, 2010 , we incurred interest expense of $8,429 related to the notes payable to stockholders, compared to $7,383 for the nine months ended September 30, 2009 . Interest expense increased as the note balances increased from $126,274 reported at September 30, 2009 to $151,680 at September 30, 2010 .
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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