Business Context and Reporting Period
The filing is a Form 10-Q for Brick Top Productions, Inc., not Fubotv Inc., covering the quarter and six months ended June 30, 2012. Brick Top was a Florida development-stage company focused on producing motion pictures through its 60%-owned subsidiary, York Productions, LLC. The company had not commenced its planned principal operations and had generated no revenue since inception.
The company held rights and production costs related to the “Doorman” pilot, completed in September 2011, but had not released the film or begun recognizing related revenue. The financial statements are unaudited.
Financial Results and Position
| Metric | Three Months Ended June 30, 2012 | Six Months Ended June 30, 2012 | Comparable Period |
|---|---|---|---|
| Revenue | $0 | $0 | $0 in 2011 periods |
| Operating expenses | $38,816 | $49,350 | $122,907 and $195,961, respectively, in 2011 |
| Net loss attributable to common stockholders | $38,816 | $49,350 | $122,907 and $195,961, respectively, in 2011 |
| Basic and diluted loss per share | $0.00 | $0.00 | $0.00 and $(0.01), respectively, in 2011 |
| Cash used in operating activities | Not separately provided | $39,744 | $91,943 in 2011 |
At June 30, 2012, cash was $14,454, compared with $54,400 at December 31, 2011. Total assets were $322,620, including $292,931 of capitalized pilot costs and $5,417 of net computer equipment. Total liabilities were $222,862, consisting primarily of $167,065 of accrued expenses and $55,797 of unsecured, non-interest-bearing advances from a stockholder due on demand.
Stockholders’ equity was $99,767, and total equity was $99,758 after a $9 non-controlling interest. Management reported negative working capital of $200,804. The filing does not report conventional interest-bearing debt; the principal funding obligations were accrued expenses and related-party stockholder advances.
There were no investing cash outflows during the six months ended June 30, 2012. Financing activities used $202, primarily from a repayment or reduction of stockholder advances. Cash declined by $39,946 during the period.
Material Changes Versus the Prior Comparable Period
- Revenue remained zero.
- Six-month operating expenses declined to $49,350 from $195,961, while quarterly expenses declined to $38,816 from $122,907.
- Six-month net loss improved to $49,350 from $195,961; quarterly net loss improved to $38,816 from $122,907.
- Cash used in operations improved to $39,744 from $91,943, but available cash fell substantially from year-end 2011.
- Accrued expenses increased to $167,065 from $151,022.
- Capitalized pilot costs remained unchanged at $292,931, with no amortization because the pilot had not generated revenue.
- Common shares outstanding remained 29,643,500, with no equity issuance during the six-month period.
Guidance, Outlook, Risks, Contingencies, and Unusual Items
Management stated that future revenue depends on effectively marketing the “Doorman” pilot and completing new acquisitions of film rights. The company expected to seek additional capital through equity offerings or loan transactions, but reported that it had no third-party financing available and no agreement from officers or stockholders to provide additional funding.
The financial statements expressly state that recurring losses, negative operating cash flow, limited cash, and the accumulated development-stage deficit raise substantial doubt about the company’s ability to continue as a going concern. Management’s plans depended on commencing operations, generating revenue, implementing its business plan, and raising additional funds. The statements contain no adjustments that might be required if the company could not continue as a going concern.
The CEO had agreed to waive future base salary beginning October 1, 2011. The company had previously accrued unpaid salary because it lacked sufficient cash; the filing does not clearly quantify the remaining salary accrual separately from total accrued expenses.
The company reported no legal proceedings, off-balance-sheet arrangements, market-risk disclosures, or unregistered equity sales for the period. Management determined that no reportable subsequent events occurred. Disclosure controls and procedures were reported as not effective as of June 30, 2012, with no significant changes in internal control during the quarter.
The company elected the JOBS Act extended transition period for adopting certain accounting standards, which may reduce comparability with companies applying public-company effective dates.
Important Facts for Investors to Verify
- Confirm the issuer identity: the supplied filing names Brick Top Productions, Inc., whereas the request metadata names Fubotv Inc.
- Assess whether the “Doorman” pilot and the $292,931 capitalized balance have recoverable value, given the absence of revenue and the company’s development-stage status.
- Evaluate the going-concern risk, including only $14,454 of cash, negative working capital, recurring losses, and dependence on additional financing.
- Review the nature, maturity, and expected settlement of $167,065 in accrued expenses and $55,797 in stockholder advances.
- Investigate the causes and remediation status of the ineffective disclosure controls and procedures.
- Confirm whether management obtained financing or generated revenue after the filing date, as the filing provides no clear forward financing commitment or operating forecast.