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EX-31.1 - CERTIFICATIONS - Writ Media Group, Inc.writers_ex311.htm
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2010

 
WRITERS’ GROUP FILM CORP.
 
a Delaware corporation

1752 East Avenue J  #266
Lancaster, CA  93535
213-694-1888
 
Commission file number: 333-156832
I.R.S. Employer I.D. #: 56-2646829

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  x Yes  o No

We are not required to submit electronically nor post on our website any Interactive Date Files pursuant to Rule 405 of Regulation S-T.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
 
Large accelerated filer o Accelerated filer  o
       
Non-accelerated filer  o  (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 Act).  o Yes   x No
 
The number of shares outstanding of our Common Stock is 153,090,750 as of February 15, 2011. Of these, 43,016,400 shares are unrestricted shares held by non-affiliates.

The number of shares outstanding of our Preferred Stock Series A is 10,000, Preferred Stock Series B is 8,500  and Preferred Stock Series C is 0 as of February 15, 2011.

There are no other classes of stock.
 


 
 

 
 
TABLE OF CONTENTS
 
 
Unaudited Condensed Financial Statements 3
   
Management’s Discussion and Analysis of Financial Condition and Results of Operations 10
   
Controls and Procedures 13
   
Legal Proceedings 14
   
Exhibits 14
   
Signatures 15
 

 
2

 

WRITERS' GROUP FILM CORP.
[A Development Stage Company]
CONDENSED BALANCE SHEETS
(Unaudited)
 
   
December 31, 2010
   
March 31, 2010
 
             
ASSETS
           
             
Current Assets
           
                 Cash   $ 59     $ 427  
                 
                 
Total Current Assets
    59       427  
                 
Total Assets
  $ 59     $ 427  
                 
LIABILITIES AND STOCKHOLDERS' DEFICIT
               
                 
Current Liabilities
               
Accounts Payable
    3,024       5,075  
Accrued Liabilities
    3,102       1,169  
Convertible Notes Payable, net of  $11,955 and $15,467 unamortized discount, respectively
    29,685       6,173  
Total Liabilities
    35,811       12,417  
                 
Stockholders' Deficit
               
                 
Preferred stock:
               
Series A convertible preferred stock, $.00001 par, 130,000,000 shares authorized, 10,000 and 0 shares issued and outstanding, respectively
    -       -  
Series B convertible preferred stock, $.00001 par 70,000,000 shares authorized, 8,500 and 0 shares issued and outstanding, respectively
    -       -  
Series C convertible preferred stock, $.00001 par, 20,000,000 shares authorized, 0, and 0 shares issued and outstanding, respectively
    -       -  
                 
Common stock, $0.00001 par, 20,000,000,000 shares authorized, 130,750 shares
               
 issued and outstanding, respectively
    1       1  
Additional paid-in capital
    5,150,706       5,101,556  
Deficit accumulated during the development stage
    (5,186,459 )     (5,113,547 )
                 
Total Stockholders' Deficit
    (35,752 )     (11,990 )
                 
  Total Liabilities and Stockholders' Deficit   $ 59     $ 427  
 
See Notes to Unaudited Condensed Financial Statements.

 
3

 

WRITERS' GROUP FILM CORP.
[A Development Stage Company]
CONDENSED STATEMENTS OF EXPENSES
(Unaudited)
 
   
Three Months Ended
   
Three Months Ended
   
Nine Months Ended
   
Nine Months Ended
   
March 9, 2007 (inception) through
 
   
December 31, 2010
   
December 31, 2009
   
December 31, 2010
   
December 31, 2009
   
December 31, 2010
 
                               
Revenues
  $ -     $ -     $ -     $ -     $ 9,425  
                                         
General and administrative expenses
    31,632       8,583       47,467       243,645       5,152,677  
Amortization of debt discount
    8,045       -       23,512       -       -  
Fair value of derivative
    -       (86,080 )     -       -       -  
                                         
Interest expense
    1,933       -       1,933       -       43,207  
                                         
Net loss
  $ $ (41,610 )   $ (77,497 )   $ (72,912 )   $ (243,645 )   $ (5,186,459 )
                                         
Deemed dividends on
                                       
preferred stock
    -       -       (15,000 )     -       (15,000 )
                                         
 
                                       
Net loss available to common shareholders
  $ (41,610 )   $ (77,497 )   $ (87,912 )   $ (243,645 )   $ (5,201,459 )
                                         
Basic and diluted Net Loss per share
  $ (0.32 )   $ (0.91 )   $ (0.67 )   $ (2.87 )        
                                         
Weighted average common shares oustanding
    130,750       84,750       130,750       84,750          

See Notes to Unaudited Condensed Financial Statements

 
4

 

WRITERS' GROUP FILM CORP.
[A Development Stage Company]
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
 
   
Nine Months
Ended
   
Nine Months
 Ended
   
March 9, 2007 (inception) through
 
   
December 31, 2010
   
December 31, 2009
   
December 31, 2010
 
CASH FLOWS FROM OPERATING
                 
ACTIVITIES
                 
Net loss
  $ (72,912 )   $ (243,645 )   $ (5,186,459 )
Adjustments to reconcile
                       
net loss to cash used
                       
in operating activities:
                       
Services paid in convertible notes
    20,000       -       20,000  
Stock issued for services
    -       200,000       4,983,248  
Amortization of debt discount
    23,512       -       40,044  
Changes in:
                       
Accounts payable
    (2,051 )     913       3,024  
Accrued liabilities
    1,933       -       3,102  
NET CASH USED IN OPERATING ACTIVITIES
    (29,518 )     (42,732 )     (137,041 )
                         
                         
CASH FLOWS FROM FINANCING
                       
ACTIVITIES
                       
Proceeds from convertible notes payable
    -       22,000       22,000  
Proceeds from convertible notes payable–related party
    14,000       10,000       24,000  
Proceeds from subscriptions receivable
    -       -       13,500  
Capital contributions
    150       12,900       22,350  
Preferred stock issued for cash
    15,000       -       17,000  
Stock issued for cash
    -       -       38,250  
NET CASH PROVIDED BY FINANCING ACTIVITIES
    29,150       44,900       137,100  
                         
                         
NET CHANGE IN CASH
    (368 )     2,168       59  
                         
Cash balance, beginning
    427       1,136       -  
Cash balance, ending
  $ 59     $ 3,304     $ 59  
                         
CASH PAID FOR:
                       
Interest
    -       -       -  
Income taxes
    -       -       -  
NON-CASH TRANSACTIONS
                       
Shares issued for conversion of notes payable
    -       -       10,360  
Beneficial conversion feature on convertible notes payable
    20,000       22,000       42,000  
Beneficial conversion feature on convertible notes payable- Related Party
    14,000       10,000       24,000  
Change in par value of common stock
    -       -       63,875  
 
See Notes to Unaudited Condensed Financial Statements

 
5

 

WRITERS’ GROUP FILM CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS


NOTE 1.  BASIS OF PRESENTATION

The accompanying unaudited interim condensed financial statements of Writers’ Group Film Corp., have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in Writers’ Group's annual report filed with the SEC on Form 10-K on July 14, 2010. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited consolidated financial statements for fiscal 2010 as reported in the Form 10-K have been omitted.

Accounting Policies

Convertible Notes Payable

Writers Group Film Corp has issued convertible instruments which contained embedded conversion features. The Company has evaluated the application of ASC 815-15, “Accounting for Derivative Instruments and Hedging Activities,” and ASC 815-40, “Accounting for Derivative Financial Instruments Indexed to and Potentially Settled in a Company’s Own Stock,” to its embedded conversion feature within its convertible debt instruments. Writers Group has determined that, for all of the instruments, the conversion feature did not meet the definition of a liability and therefore did not bifurcate the conversion feature and account for it as a separate derivative liability.

The Company evaluated the conversion feature under ASC 815-40 for a beneficial conversion feature at inception. The effective conversion price was then computed based on the allocation of the proceeds to the convertible debt to determine if a beneficial conversion feature exists. The effective conversion price was compared to the market price on the date of the original note and was deemed to be less than the market value of Writers Group Film Corp’s stock at the inception of the note. A beneficial conversion feature was recognized and gave rise to a debt discount that is amortized over the stated maturity of the convertible debt instrument or the earliest potential conversion date.

NOTE 2.  GOING CONCERN

Writers’ Group has generated nominal revenues since inception and is unlikely to generate earnings in the immediate or foreseeable future. The continuation of Writers’ Group as a going concern is dependent upon the continued financial support from its shareholders, the ability of Writers’ Group to obtain necessary equity financing to continue operations, and the attainment of profitable operations. As of December 31, 2010, Writers’ Group has accumulated losses. These factors raise substantial doubt regarding Writers’ Group's ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should Writers’ Group be unable to continue as a going concern.

NOTE 3.  CONVERTIBLE NOTES PAYABLE
 
Proceeds from convertible notes issued since inception    $ 42,000  
Notes converted into common stock since inception      (360 )
Subtotal       41,640  
Less unamortized debt discount      (11,955 )
Convertible notes  payable outstanding on December 31, 2010       $ 29,685  
 
 
6

 
                                                                                                                  
In March 2010,  a $20,000 convertible note was  issued for services.  The note carries an 8% interest rate, matures on March 15, 2011 and has a conversion feature which allows the holder to convert all or any portion of the note into shares of Common Stock at a rate of $0.00001 per share of Common Stock.

As of December 31, 2010, certain notes totaling $12,000, are convertible notes payable, interest rate at 8%, due August, 2010, convertible at $.0001 per share into an aggregate of 12,000,000 common shares.  The rest of the notes totaling $9,640 and $20,000, are convertible notes payable, interest rate at 8%, due September, 2010 and March 15, 2011,respectively, convertible at $.00001 per share into an aggregate of 2,964,000,000 common shares.  The notes are in default as of December 31, 2010.

The table below provides a detailed summary of the convertible notes as of December 31, 2010.

Amount of Note
 
# of Shares of Common Stock Convertible Into
 
Original Date of Note Issuance
Notes I
       
$2,000
 
2,000,000
 
8/10/2009
$2,000
 
2,000,000
 
8/10/2009
$2,000
 
2,000,000
 
8/10/2009
$2,000
 
2,000,000
 
8/19/2009
$2,000
 
2,000,000
 
8/19/2009
$2,000
 
2,000,000
 
8/19/2009
Notes II
       
$1,205
 
120,500,000
 
9/11/2009
$2,410
 
241,000,000
 
9/11/2009
$1,205
 
120,500,000
 
9/11/2009
$2,410
 
241,000,000
 
9/11/2009
$2,410
 
241,000,000
 
9/11/2009
$20,000
 
2,000,000,000
 
3/15/2010
$41,640
 
$2,976,000,000
   

Notes I are convertible notes payable, interest rate at 8%, due August, 2010, convertible at $$0.0001 per shares into an aggregate of 12 million common shares.

Notes II are convertible notes payable, interest rate at 8%, due September 2010 and March 2011, convertible at $0.00001 per shares into an aggregate of  2.96 million shares.

Writers Group evaluated the application of ASC 815-15 and ASC 815-40 for Notes I and I listed above and concluded these instruments were not required to be accounted for as derivatives. Writers Group also evaluated the application of ASC 470-30 & ASC 470-05, "Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios," and ASC 470-30 & ASC 470-05, " ASC 470-30 & ASC 470-05 to Certain Convertible Instruments" and concluded that the conversion option was a beneficial conversion feature with intrinsic value. Writers Group determined the intrinsic value of the conversion options on these notes to be a total of $42,000 and recorded a discount on the notes of $22,000 and $20,000  during the year ended March 31, 2010 and nine months ended December 31, 2010, respectively. The discount will be amortized over the life of the loans using the effective interest rate method.  As of December 31, 2010, $11,955 remained unamortized.

During the quarter ended December 31, 2010, no portion of any convertible note was converted into any class or series of Writers’ Group equity.
 
 
7

 

NOTE 5.  RELATED PARTY CONVERTIBLE NOTES PAYABLE

In December 2010, Writer’s Group borrowed $14,000 and issued two convertible notes to its President and Chairman, Tal L. Kapelner, with a face value of $11,000 and $3,000 with maturity dates of December 1, 2011 and December 22, 2011, respectively. The notes carry an 8% annual interest rate, and have a conversion feature which allows the holder to convert all or any portion of the note into common shares at $0.00001 per share.
 
Proceeds from convertible notes issued since inception    $ 14,000  
Less unamortized debt discount        (14,000 )
Convertible notes payable outstanding on December 31, 2010     $ -  
 
The carrying value of the convertible notes payable- related party as of December 31, 2010 is $nil.

The table below provides a detail summary of the convertible notes issued to related parties as of December 31, 2010.

Amount of Note
 
# of Shares of Common Stock Convertible Into
 
Original Date of Note Issuance
         
         
$11,000
 
1,100,000,000
 
12/1/2010
$3,000
 
300,000,000
 
12/22/2010
$14,000
 
$1,400,000,000
   

Writers Group evaluated the application of ASC 815-15 and ASC 815-40 for convertible notes listed above and concluded these instruments were not required to be accounted for as derivatives. Writers Group also evaluated the application of ASC 470-30 & ASC 470-05, "Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios," and ASC 470-30 & ASC 470-05, " ASC 470-30 & ASC 470-05 to Certain Convertible Instruments" and concluded that the conversion option was a beneficial conversion feature with intrinsic value. Writers Group determined the intrinsic value of the conversion options on these notes to be a total of $14,000 and recorded a discount on the notes in this amount during the nine months ended December 31, 2010. The discount will be amortized over the life of the loans using the effective interest rate method.  As of December 31, 2010, the entire $14,000 discount remained unamortized.  During the nine months ended December 31, 2009  a discount of $10,000 was recorded on a $10,000 convertible note issued to a certain related party which carried an interest rate of 8% maturing on August 3, 2010.  The note was converted as of March 31, 2010 into 10 million shares of common stock at $.001 per share.

NOTE 6.  EQUITY – PREFERRED STOCK

On June 28, 2010, Writer’s group sold 2,500 shares of its Preferred Stock Class, Series B to an investor at $2 per share or $5,000 cash.

On August 9, 2010, Writer’s Group sold 5,000 shares of its Preferred Stock Class, Series B to an investor at $2 per share or $10,000 cash.
 
 
8

 

Each share of Series B preferred stock is convertible into the number of common shares equal to the designated $2 initial price of the Series B preferred stock divided by one hundred times the par value of the common stock subject to adjustments as may be determined by the Board of Directors from time to time. The holders of Series B preferred stock are entitled to receive dividends when, and if declared by the Board of Directors, in its sole discretion. Upon liquidation, dissolution or winding up of the corporation, whether voluntarily or involuntarily, before any distribution or payment shall be made to the holders of any stock ranking junior to the Series B preferred stock, the holders of the Series B preferred stock are entitled to be paid out of the assets of the corporation an amount equal to $1.00 per share or in the event of an aggregate subscription by a single subscriber for Series B preferred stock in excess of $100,000, $0.997 per share (as adjusted for any stock dividends, combinations, splits and recapitalization), plus all declared but unpaid dividends, for each share of Series B preferred stock held. After the payment of the full applicable preference value of each share of the Series B preferred stock, the remaining assets of the corporation legally available for distribution, if any, will be distributed ratably to the holders of the corporation’s common stock.

Writer Group evaluated the application of ASC 815-15 and ASC 815-40 for the preferred stock listed above and concluded these instruments were not required to be accounted for as derivatives. Writers Group also evaluated the application of ASC 470-30 and ASC 470-505, “Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios,” and ASC 470-30 and ASC 470-05, “ASC 470-30 & ASC 470-05 to Certain Convertible Instruments, and concluded that the conversion option was a beneficial conversion feature with intrinsic value. Writers Group determined the intrinsic value of the conversion options on the preferred stock to be $15,000 and recorded a deemed dividend on the preferred stock in this amount.

NOTE 7.  SUBSEQUENT EVENTS.

In February 2011,  certain convertible noteholders converted a total of $1,400 into 140,000,000 common shares at $0.00001 and another $12,960 into 12,960,000 common shares at $0.001 per share.

Effective January 25, 2011 Writer’s Group authorized a reverse stock split of 1 for 1,000 shares of common stock.  The financial statements herein have been adjusted to reflect retroactively the reverse stock split for current and prior year.

 
9

 

Management's Discussion and Analysis of Financial Condition and Results of Operations.

Overview.  The recent market downturn has negatively impacted the entertainment industry, and this company in particular. Right now, we are pinning our hopes for revenue on the production and success of “Writers’ Assistants”, but the third-party financier who verbally agreed to put up the $150,000 incentive money we needed to attract a well-known actor has pulled his commitment in the last year, citing the poor economic climate, leaving us to raise that money through other third-party financiers – who have not materialized yet – and/or future private placements or registered offerings. Further, even if we raised $150,000 and attracted a star actor, film financing companies are tightening their belts and are financing fewer films, even those that may be quite viable with a well-known actor attached, leaving us few options in financing the film.

We have decided to explore the possibilities provided by web-based entertainment as a source of future growth, perhaps even as a revenue source. Historically, we have not been of the opinion that web-based entertainment provides much opportunity for anything but use as a marketing vehicle for our talents as filmmakers and as a way to positively brand the company as a whole. However, two web-based serials – “Quarterlife” and, very recently,  “In the Motherhood” – have been picked up as programs for broadcast television, and several more – out of admittedly thousands – have managed to earn small profits, including “Paradise Cove”, “Easy to Assemble”, “Web Therapy” and “Tiki Bar”, mostly through sponsorships and merchandise sales. In addition, a musical comedy web serial, “Dr. Horrible’s Sing-Along Blog,” more than re-couped its $200,000 production costs outlay through sale and rental of DVDs, which contained the serial as well as DVD-exclusive content, although it should be noted that Dr. Horrible’s Sing-Along Blog had built-in advantages, not least of which was its relatively well-known cast and the already-established, extremely loyal fanbase of its creator Joss Whedon, who was the showrunner for Buffy, The Vampire Slayer and Firefly television shows.

Adding to the evidence of increased success in web-based programming include: Actress Felicia Day’s web series about online role-playing game, “The Guild,” is now in its 3rd season and is distributed by Xbox Live and Microsoft and sponsored by Sprint. “Dorm Life,” a mockumentary web series about dorm life, went on to be sponsored by Carl’s Jr. in its second season. The creators of the web video diary “Lonelygirl13” were signed by a major talent agency, and the actress who played Lonely Girl herself went on to have a role on ABC Family’s “Greek”. After the first episode of “Red vs. Blue,” a series using animation directly from the popular video game Halo, the producers were contacted by the video game’s production company to arrange a deal so the series could continue to use game properties without license fees.

The benefits to producing a web-based serial is that it is significantly cheaper, requiring far less start-up capital, and would get the company at least in production on something, rather than just working on administration and raising capital.

The concept of a business model based at least in part on web-based programming presents many challenges for us, however. The first challenge would be raising money: web-based programming may be cheaper than producing feature films, but it still requires some capital – see the estimates under our “Web Strategy” subsection below – and so far, we have not been successful in raising sufficient capital for production of any kind. Another challenge would be securing sponsorships. Because of our relatively unknown status, it would take significant recognition by the public of any web-based program we produced first, before we could hope to successfully sign sponsorship deals with advertisers. Further, sponsors we approach may already be sponsoring a competing web content provider, or not approve of the content we produce. The inexperience of our management working with this medium is another factor in our consideration of this venture, particularly as it relates to strategies to generate web traffic to the content. Just posting such content on our website and a few video-sharing sites like YouTube is not likely to generate the millions of “views” we would likely need to have a successful business model. Therefore, more advanced strategies are necessary, including the use of more sophisticated web promotional tools such as Tube Mogul and Virtual Property – see our “Web Strategy” subsection below. Additional challenges, currently unknown to us, may also present themselves once we have conducted a more thorough study of web programming and its related business models over the next several months.
 
 
10

 
 
Financial Condition.  The amount of cash we currently have on hand, as of December 31, 2010, is $59, and the amount of negative working capital we have as of December 31, 2010 is ($35,752). The amount of cash we will need to operate our business over the next 12 months is estimated at $19,200. Therefore, the amount of cash we have on hand is insufficient to satisfy our cash requirements. We received $14,000 in cash from the private sale of convertible debt to our President and Chairman, Tal L. Kapelner during the quarter ended December 31, 2010. However, without an infusion of cash from additional revenues or future registered offerings or private placements, management will likely have to continue to contribute money to pay our expenses.

Changes in Financial Condition – Fiscal Years 2011 and 2010.  Generally-speaking, our financial condition has remained approximately the same this current fiscal year, relative to our 2010 fiscal year, which ended March 31, 2010. While we failed this current fiscal year to generate revenues, we received $15,000 in cash from the private sale of shares of our preferred stock, and sold $14,000 of convertible debt to our President, Tal L. Kapelner to allow us to maintain our basic administrative responsibilities. Our cumulative loss continues to grow, however, standing now at $5,186,459. And our cash position has not significantly improved.

For our most recent completed fiscal year, which ended March 31, 2010, we spent less than $1,600 on maintaining our offices and we spent no money on marketing. Most of our expenses were related to filing our quarterly and annual reports on Forms 10-Q and 10-K, respectively, and having our local accountants and our audit firm prepare our unaudited quarterly  and audited annual consolidated financial statements.

For the first nine months of our current fiscal year, our net loss was $87,912, as compared with $243,645 net loss for the comparable period last year. The net loss was larger last year because we issued $200,000 worth of stock in exchange for services in the second quarter of fiscal year 2010.

Liquidity and Capital Resources.  We announced earlier our intention to issue shares under an equity line of credit in the next 12 months. However, we no longer have such an intention and have cancelled any further negotiations with the would-be provider of such equity line.

We have a working capital deficit of $35,752 and a total deficit accumulated during development stage of $5,186,459 as of December 31, 2010, compared with a total deficit of $5,113,547 as of March 31, 2010, and a working capital deficit of $11,990 as of March 31, 2009. The huge jump in our deficit was as a result of a one-time charge in the fourth quarter of our fiscal year ended March 31, 2010, associated with the issuance of shares of our Preferred Stock Class, Series A to our President Tal L. Kapelner. These Series A shares can be converted into 80% of the total outstanding shares of common stock at any time, regardless of the amount of common shares that are outstanding.

We had $34,608 of net cash used in operating activities for the quarter ended December 31, 2010, compared with $6,813 used during the quarter ended December 31, 2009.

We had $29,518 of net cash used in operating activities for the nine months ended December 31, 2010, as compared with $42,732 for the nine months ended December 31, 2009. The $29,150 in cash from financing activities for the nine months ended December 31, 2010 came from two convertible notes issued with a face value of $11,000 and $3,000  and the sale of preferred stock for $15,000 and $150 of capital contributions, while the $44,900 provided by financing activities for the same period last year came from $12,900 in contributed capital from our management, as well as $32,000 in convertible notes sold.

Plan for the next 12 months.  In Fiscal Year 2011, which began April 1, 2010, we plan to continue pitching our pilot script for “Flagged”, as well as produce our film “Writers’ Assistants” and finish developing a web strategy which may include producing a web-based serial (“webisodic programming”) and/or producing short vignettes and skits for use solely as a marketing and branding tool.

Spinoffs.  In January of 2011 – after the period covered by this quarterly report – we spun off all three of our subsidiaries, Writers’ Assistants Movie, Inc., His Name Is Noah Movie, Inc. and Forever Man Movie, Inc. Each of these three subsidiaries were charged with producing a single film, and it was determined that the best way to achieve that was to have them spun off into separate independent entities, so as to more easily access financing among investors looking to more carefully tailor their financing to a single movie rather than an entire multi-layered entertainment conglomerate.
 
 
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Flagged

“Flagged” is our concept for a new half-hour television sit-com, exploring the world of sports and scandal through a mixed male/female perspective. Pitched as “30 Rock with a sports theme,” the show tells the story of a long-time assistant to a famous retired basketball player and how she becomes the president of a brand-new crisis management agency for pro athletes.

We have completed the pilot script, and feedback so far has been uniformly positive. The Director of Development at cable channel Bravo TV remarked that the script was “funny and original,” though Bravo is not currently buying scripted television, while an Academy Award nominated actress to whom we sent the script enjoyed it also, saying that “the dialogue was very funny and real.”

The writers of the pilot script, our President Tal L. Kapelner and his writing partner Duffy Dibley, pitched the show to several producers at the InkTip Pitch Summit held in Universal City, California on September 24-26, 2010, with several producers responding positively to the pitch and requesting the script. However, none of these producers have followed up with us, and at this juncture, we do not expect any to do so.

More recently, during the last week of December, 2010, Messrs. Kapelner and Dibley met with a well-established comedic actor, writer and comedian with close ties to the named sports personalities in our “Flagged” pilot script. The actor/writer/comedian with whom Messrs. Kapelner and Dibley met enjoyed the script, while asking for specific changes to be presented to him in a rewrite. The actor/writer/comedian indicated that he would have a decision as to whether he would act in the project, help produce the project, or pass on the project, by June of 2011.

We continue to submit the script to personal contacts in the entertainment industry as well as through more formal pitch facilitators, such as VirtualPitchFest.com. We further anticipate attendance at other pitch symposiums throughout the year.

Web Strategy

Our web strategy will focus on answering the following questions: Is it possible to make a profit from content produced specifically for, and distributed on, the web? If so, how significant a profit is possible, or has been historically achieved? Besides sponsorships from advertisers and merchandise sales, what are the other keys to profiting from web-based content? What type and genre of programming has had the most success, and how has the content been organized and distributed?

We hope to answer those questions through a) our own market research consisting of attendance at seminars and related symposia on the topic, study of web news journals such as “TubeFilter”, study of revenue-sharing and licensing deals currently being made, and interviews with consultants who have an expertise in web-based programming; as well as b) market research data we compile provided by web programming monetization sites such as TubeMogul, Visible Measures and Brightcove. “Rich analytics”, which refers to the breakdown and analysis of any given website’s popularity, is provided by these web programming monetization sites for no fee or a small fee.

Once we have answered those questions, we will develop a comprehensive web strategy that, depending on the answers we get from our questions, will either focus on developing the type of content that will seek to make a profit, but is generally more expensive and time-consuming to produce and distribute, or the type of content that is geared only towards our marketing and branding efforts, which would likely be cheaper and easier to produce and simpler to distribute.

In other words, if our web strategy calls for us to produce content for profit on the web, the type of content will necessarily be of a higher quality, both in terms of appeal and in the quality of the various production elements, such as camera, lighting, etc.
 
 
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For example, we are currently focusing on one candidate for development into webisodic programming, that being a musical comedy web serial adaptation of our “Writers’ Assistants” project. Our belief is that we may both be able to profit from this venutre, as well as perhaps use the publicity and public momentum from this project to produce the feature-length “Writers’ Assistants” film.

While we have done no market research yet, anecdotally we understand that professionally-produced webisodes can cost about $1,000 per minute, which would make Buckeye Marhaba a $30,000 project and the Writers’ Assistants musical web serial a $56,000 - $91,000 project. This cost estimate was provided verbally by a consensus of web programming producers at a Screen Actors Guild symposium on producing content for the web held in Los Angeles in February of 2009. This is significantly cheaper than financing a feature film, but would still present challenges in financing. Distribution would be through more complex and professional sites that are geared towards monetization of web content, such as TubeMogul, Virtual Property and Dogma Studios.

On the other hand, if our web-based strategy calls for us to produce simple video vignettes and sketches, solely for marketing and branding purposes and without attention on profiting from the content itself, we would look to produce those products more cheaply and distribute them more simply, such as through our own website, and video-sharing websites such as YouTube, Veoh and FunnyorDie.com.

Two examples of these sketches are “A&F”, in which an overweight man takes off his shirt and pretends to be one of the live male models at an Abercrombie and Fitch store, and “Stalk Another Day”, about a lazy celebrity stalker.

Our timetable for our web strategy is:

·  
April – September, 2011: Conduct market research on cost, and on answering the questions identified above. Develop comprehensive web strategy.
·  
September – October, 2011: Develop ideas and scripts for either a) for-profit web content; or b) sketches and vignettes for marketing purposes only.
·  
October – December, 2011: Raise financing through registered offerings or private placements. If we are financing for-profit web content, financing needs may be anywhere from $30,000 to almost $100,000, as noted above. Since inception, we have not successfully raised $100,000 in cash, and at this time have no special ideas to raise the necessary funds, other than approaching venture capitalists and other private equity firms who invest in entertainment projects. While subject to the results of our web strategies research, we do not intend at this time to offer any profit participation or other significant financial incentives to entice well-known actors or directors to participate in these productions, although we may nevertheless approach well-known actors and directors, to participate in our web-based projects without significant financial incentives.
·  
December, 2011 – March, 2012: Produce either for-profit web content or the video sketches and vignettes for marketing purposes only.
·  
March – April, 2012: Distribute the material that we produced.
 
We have no purchases or sales of plant or significant equipment planned in the next 12 months.

We do not anticipate any significant changes in the number of employees. We currently have zero and anticipate having zero employees in the next 12 months.
 
Controls and Procedures.

Our principal executive and financial officers have evaluated the effectiveness of our disclosure controls and procedures as of the end of our third quarter (December 31, 2010) for fiscal year 2011, and have concluded that they are not effective to ensure that information required to be disclosed in the reports that we file pursuant to Section 15(d) of the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules under the Exchange Act. We based the material weakness noted below in our assessment of our internal control over financial reporting.
 
 
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A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim consolidated financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over financial reporting as of December 31, 2010, the Company determined that we had a material weakness, as described below and therefore our internal controls over financial reporting were not effective.

We noted we have a material weakness regarding proper segregation of duties for the preparation of our consolidated financial statements. As of December 31, 2010, the majority of the preparation of consolidated financial statements was carried out by one person, who is an independent CPA to the Company. Additionally, the Company currently only has one officer/director having oversight on all transactions.  We plan to remedy the material weakness once operations expand to include employees, and/or the production of self-generated and owned entertainment products.

There have been no changes in our internal control over financial reporting during the third quarter of our current fiscal year 2011 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
 
Legal Proceedings.

We are not a party to any pending legal proceeding, nor are we aware of any proceeding contemplated by any governmental authority.
 
Exhibits.

Consolidated Financial statements are included in the body of this report.
 
Exhibit Index:
   
     
* Rule 15d-14(a) Certifications   Exhibit (31)(i)and(ii)
     
* Section 1350 Certification   Exhibit (32)
                                                                                                                                                                           
 
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Signatures.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
WRITERS’ GROUP FILM CORP.
 
       
February 21, 2011      
By:
/s/ Tal L. Kapelner  
    Tal L. Kapelner  
    President and Chairman  
 
February 21, 2011     
By:
/s/ Ariella Kapelner  
    Ariella Kapelner  
    Principal Financial Officer and Director  
 
 
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