IMK GROUP, INC. - FORM 10-Q

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EX-32.1 - EXHIBIT 32.1 - IMK GROUP, INC.	ex32-1.htm
EX-31.1 - EXHIBIT 31.1 - IMK GROUP, INC.	ex31-1.htm

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

[X]	Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended May 31, 2011

[ ]	Transition Report under Section 13 or 15(d) of the Exchange Act for the Transition Period from ________ to ___________

Commission File Number: 333-123611

FUTURA PICTURES, INC.

(Exact name of small business issuer as specified in its charter)

Delaware

(State or other jurisdiction of incorporation or organization)

56-2495218

(I.R.S. Employer Identification No.)

17337 Ventura Boulevard, Suite 305

Encino, California 91316

Issuer's Telephone Number: (818) 784-0040

(Address and phone number of principal executive offices)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or 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. Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [_] No [_]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	[_]	Accelerated filer	[_]

Non-accelerated filer	[_]	Smaller reporting company	[X]

Check whether the issuer is a “shell company” as defined in Rule 12b-2 of the Securities Exchange Act of 1934. Yes [_] No [X]

The Registrant has 1,599,750 shares of Common stock, par value $.0001 per share issued and outstanding as of June 21, 2011.

INDEX TO QUARTERLY REPORT

ON FORM 10-Q

PART I	FINANCIAL INFORMATION		Page
Item 1.	Financial Statements (Unaudited)
	Condensed Balance Sheets
		May 31, 2011 and February 28, 2011	3
	Condensed Statements of Operations
		For the Three Months Ended May 31, 2011 and 2010	4
	Condensed Statements of Shareholders’ Equity (Deficit)
		For the Three Months Ended May 31, 2011	5
	Condensed Statements of Cash Flows
		For the Three Months Ended May 31, 2011 and 2010	6-7
	Notes to Condensed Financial Statements		8-10

Item 2.	Management's Discussion and Analysis or Plan of Operation		11

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		15

Item 4T.	Controls and Procedures		15


PART II	OTHER INFORMATION

Item 1.	Legal Proceedings		16

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		16

Item 3.	Defaults upon Senior Securities		16

Item 4.	Submission of Matters to a Vote of Security Holders		16

Item 5.	Other Information		16

Item 6.	Exhibits		16

Signatures			17

FUTURA PICTURES, INC.

CONDENSED BALANCE SHEETS

	May 31, 2011 (Unaudited)			February 28, 2011
ASSETS

Cash	$	8,448		$	9,683
Accounts receivable		3,286			3,204
Prepaid expenses		736			828

TOTAL CURRENT ASSETS		12,470			13,715

Deposits		900			900

TOTAL ASSETS	$	13,370		$	14,615


LIABILITIES

Line of credit	$	39,421		$	39,421
Accrued expenses		34,402			35,903
Unearned revenue		14,590			14,590
Accrued interest – related party		12,870			11,382
Loan payable – related party		74,695			72,754

TOTAL LIABILITIES		175,978			174,050

STOCKHOLDERS’ EQUITY (DEFICIT)

Common stock, par value $0.0001 per share Authorized – 100,000,000 shares Issued and outstanding – 1,599,750 shares		160			160
Additional paid-in capital		285,804			275,404
Retained deficit		(448,572	)		(434,999	)

TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)		(162,608	)		(159,435	)

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	13,370		$	14,615

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

FUTURA PICTURES, INC.

CONDENSED STATEMENTS OF OPERATIONS

FOR THE THREE ENDED MAY 31, 2011 AND 2010

(UNAUDITED)

	2011			2010

REVENUE	$	20,245		$	9,414

COST OF REVENUE		4,302			1,048

GROSS PROFIT		15,943			8,366

OPERATING EXPENSES

Selling, general and administrative		26,126			14,934

TOTAL OPERATING EXPENSES		26,126			14,934

(LOSS) FROM OPERATIONS		(10,183	)		(6,568	)

OTHER INCOME (EXPENSE)
Other income		1,204			-
Interest expense		(3,794	)		(1,446	)

(LOSS) BEFORE INCOME TAXES		(12,773	)		(8,014	)

Income tax expense		800			800

NET (LOSS)	$	(13,573	)	$	(8,814	)

NET (LOSS) PER COMMON SHARE

Basic and diluted	$	(0.01	)	$	(0.01	)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING

Basic and diluted		1,599,750			1,599,750

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

FUTURA PICTURES, INC.

CONDENSED STATEMENT OF STOCKHOLDERS’ DEFICIT

FOR THE THREE MONTHS ENDED MAY 31, 2011

(UNAUDITED)

	Common Stock
	Shares		Amount		Additional Paid-in Capital		Retained Deficit			Total Stockholders’ Equity (Deficit)
Balance, March 1, 2011		1,599,750	$	160	$	275,404	$	(434,999	)	$	(159,435	)

Contributed services		-		-		10,400		-			10,400


Net (loss) for the three months ended May 31, 2011		-		-		-		(13,573	)		(13,573	)

Balance, May 31, 2011		1,599,750	$	160	$	285,804	$	(448,572	)	$	(162,608	)

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

FUTURA PICTURES, INC.

CONDENSED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MAY 31, 2011 AND 2010

(UNAUDITED)

	2011			2010

CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss)	$	(13,573	)	$	(8,814	)
Adjustments to reconcile net (loss) to net cash (used) by operating activities:
Amortization expense		90			120
Contributed services		10,400			10,400
Changes in operating assets and liabilities:
Accounts receivable		(82	)		2,054
Prepaid expenses		2			4
Accrued expenses		(13	)		2,542

NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES		(3,176	)		6,306


CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from loan payable – related party		2,500			500
Repayment of loan payable – related party		(559	)		(6,000	)

NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES		1,941			(5,500	)

NET INCREASE (DECREASE) IN CASH		(1,235	)		806

CASH AT THE BEGINNING OF THE PERIOD		9,683			1,344

CASH AT THE END OF THE PERIOD	$	8,448		$	2,150

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

FUTURA PICTURES, INC.

CONDENSED STATEMENTS OF CASH FLOWS (CONTINUED)

FOR THE THREE MONTHS ENDED MAY 31, 2011 AND 2010

(UNAUDITED)

	2011		2010

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Interest paid	$	526	$	-
Taxes paid	$	-	$	-

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

FUTURA PICTURES, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

MAY 31, 2011 (UNAUDITED)

NOTE 1

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Nature of Business

Futura Pictures, Inc. (the “Company”) was incorporated under the laws of the state of Delaware on December 10, 2003. The Company was formed to engage in the production and the co-financing of films, documentaries and similar products produced solely for the distribution directly to the domestic and international home video markets.

Presentation

The interim financial statements of the Company are condensed and do not include some of the information necessary to obtain a complete understanding of the financial data. Management believes that all adjustments (consisting of only normal recurring adjustments, unless otherwise noted) necessary for a fair presentation of results have been included in the unaudited financial statements for the interim period presented. Operating results for the three months ended May 31, 2011 are not necessarily indicative of the results that may be expected for the year ended February 28, 2012. Accordingly, your attention is directed to footnote disclosures found in the February 28, 2011 Annual Report and particularly to Note 1, which includes a summary of significant accounting policies.

The Company has evaluated subsequent events through the date these financial statements were issued.

Unclassified Balance Sheet

As required by ASC Topic 926, the Company has elected to present an unclassified balance sheet.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts and timing of revenues and expenses, the reported amounts and classification of assets and liabilities, and the disclosure of contingent assets and liabilities. These estimates and assumptions are based on the Company’s historical results as well as management’s future expectations. The Company’s actual results could vary materially from management’s estimates and assumptions.

Disclosure About Fair Value of Financial Instruments

The Company estimates that the fair value of all financial instruments at May 31, 2011 does not differ materially from the aggregate carrying values of its financial instruments recorded in the accompanying balance sheet. The estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies. Considerable judgment is required in interpreting market data to develop the estimates of fair value, and accordingly, the estimates are not necessarily indicative of the amounts that the Company could realize in a current market exchange.

Recent Pronouncements

There are no recently issued accounting standards with pending adoptions that the Company’s management currently anticipates will have any material impact upon its financial statements.

NOTE 2

SIGNIFICANT UNCERTAINTY REGARDING THE COMPANY’S ABILITY TO CONTINUE AS A GOING CONCERN AND MANAGEMENT PLANS

The Company has incurred significant losses over recent years and currently has a working capital deficit of approximately $163,500. The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company's current financial resources are not considered adequate to fund its planned operations. This condition raises substantial doubt about its ability to continue as a going concern. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

The Company's continuation as a going concern currently is dependent upon timely procuring significant external debt and/or equity financing to fund its immediate and near-term operations, and subsequently realizing operating cash flows from sales of its film products sufficient to sustain its longer-term operations and growth initiatives During the next 12 months the Company will be seeking to produce, or acquire another one or two “self-improvement/educational” DVDs, and to expand their library of workforce training programs.

NOTE 3

UNEARNED REVENUE

On August 12, 2009, the Company signed an agreement with Gaiam America, licensing them the distribution rights to "The Five Secrets of Communication That Swept Obama to the Presidency." Under the terms of the agreement, Gaiam America will distribute the DVD throughout the world to the non-educational market. Further, pursuant to the agreement the Company received the $15,000 advance on September 14, 2009. Sales of the DVD under the Gaiam America distribution agreement commenced during the last quarter of fiscal 2010 and the Company recorded $410 of income as of March 31, 2011.

NOTE 4

RELATED PARTY TRANSACTION

Prepaid Loan Commitment

On February 16, 2005, the Company’s President, Buddy Young, accepted an unsecured promissory note from the Company and agreed to lend up to $100,000 to the Company to fund any cash shortfalls through December 31, 2011. The note bears interest at 8% and is due upon demand, no later than June 30, 2012. The outstanding balance was $74,695 as of May 31, 2011.

NOTE 7

STOCKHOLDERS’ DEFICIT

For the three months ended May 31, 2011 and 2010, the Company’s President devoted time to the development process of the Company. Compensation expense totaling $10,400 has been recorded in each period. The President has waived reimbursement of $10,400 during each of the three months ended May 31, 2011 and 2010, respectively, and accordingly the amounts have been recorded as a contribution to capital.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

You should read this section together with our financial statements and related notes thereto included elsewhere in this report. In addition to the historical information contained herein, this report contains forward-looking statements that are subject to risks and uncertainties. Forward-looking statements are not based on historical information but relate to future operations, strategies, financial results or other developments. Forward-looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and many of which, with respect to future business decisions, are subject to change. Certain statements contained in this Form 10, including, without limitation, statements containing the words "believe," "anticipate," "estimate," "expect," "are of the opinion that" and words of similar import, constitute "forward-looking statements." You should not place any undue reliance on these forward-looking statements.

You should be aware that our results from operations could materially be effected by a number of factors, which include, but are not limited to the following: economic and business conditions specific to the motion picture, television, and home video industries; competition from other producers of home video content; and television documentaries, our ability to control costs and expenses, access to capital, and our ability to meet contractual obligations. There may be other factors not mentioned above or included elsewhere in this report that may cause actual results to differ materially from any forward-looking information.

CRITICAL ACCOUNTING POLICIES

Our discussion and analysis of our financial condition and results of operations are based upon our statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. In consultation with our Board of Directors, we have identified two accounting policies that we believe are key to an understanding of our financial statements. These are important accounting policies that require management's most difficult, subjective judgment.

Going Concern. The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company's current financial resources are not considered adequate to fund its planned operations. This condition raises substantial doubt about its ability to continue as a going concern. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Non-Cash Equity Issuances. We periodically issue shares of our common stock in exchange for, or in settlement of, services. Our management values the shares issued in such transactions at either the then market value of our common stock, as determined by the Board of Directors and after taking into consideration factors such as the volume of shares issued or trading restrictions, or the value of the services received, whichever is more readily determinable.

General

In November 2008, the Company commenced production on a 47 minute “self-improvement” DVD entitled, “The 5 Secrets of Communication That Swept Obama to the Presidency.”

The DVD uses video examples of President Barack Obama’s most memorable speeches to illustrate five essential secrets of effective public and personal communication. International communication analyst and coach Richard Greene hosts the DVD and instructs in the system of communication techniques he created. The DVD was completed in February 2009, and is being sold via the internet and through distributors specializing in the sale of product to the educational market, i.e. libraries, universities etc., and to organizations for employee training.

Effective January 1, 2011, pursuant to an Asset Transfer, Assignment and Assumption Agreement, we acquired from Progressive Training, Inc. all its assets and liabilities related to Progressive’s workforce training business.

Revenues

Our revenues for the three months ended May 31, 2011 were $20,245. These revenues included sales of “The 5 Communication Secrets That Swept Obama to the Presidency” DVD in the amount of $90, royalty income related to the DVD in the amount of $3,065, and revenues in the amount of $17,090 derived from the sale of videos recently acquired from Progressive Training. Our revenues for the three months ended May 31, 2010 were $9,414. These revenues included sales of “The 5 Communication Secrets That Swept Obama to the Presidency” DVD in the amount of $80, royalty income related to the DVD in the amount of $9,322, and shipping revenues of $12.

The cost of revenues during the three months ended May 31, 2011 was $4,302 which included the cost of videos purchased for resale under Progressive Training. The cost of revenues during the three months ended May 31, 2010 was $1,048 which included commissions of $1,045 and online transaction fees of $3.

Expenses

General and Administrative

To date, our expenses have consisted mainly of selling, general and administrative expenses. The main components being compensation to the Company’s President, Buddy Young, in the amount of $10,400, of which $10,400 Mr. Young has waived reimbursement and the amount has been applied to additional paid-in capital, professional services and the amortization of our loan commitment fee. During the three months ended May 31, 2011, we incurred a total of $26,126 selling, general and administrative expenses, compared to a total of $14,934 during the three months ended May 31, 2010. This represents an increase of $11,192. This increase is mainly the result of increased costs related to the acquisition of Progressive Training associated with the sales and marketing of additional videos and the staff of Progressive Training.

Interest Expense

We incurred $3,794 and $1,446 in interest expense during the three months ended May 31, 20110 and 2019, respectively. This is related to the interest charges we incur on our loan from Buddy Young in the amount of $1,488 and $1,466, respectively, along with interest charges of $2,306 and $0, respectively, on the line of credit and credit card debts associated with the asset and liability acquisition from Progressive Training.

Plan of Operation

During the past twelve months we concentrated our efforts on expanding our domestic and international distribution network to handle the sales and marketing of “The Five Secrets of Communication That Swept Obama to the Presidency,” as well as any future self-improvement/educational programs that we produce or acquire. Additionally, in accordance with management’s decision to alter the Company’s business plan, we acquired a library of general workforce/management training programs from Progressive Training.

We anticipate that during the next 12 months our efforts will consist of: (a) raising funds through a private placement sale of equity, to be used for the purpose of adding to our library of programs, (b) improve the functionality and visibility of our website advancedknowledge.com, (c) increase revenue by hiring additional commissioned sales personnel and expand our sub-distributor network, and (d) maximize the product potential of the training programs we recently acquired from Progressive Training by creating new marketing materials.

We anticipate that cash resulting from the further sales and licensing of “The Five Communication Secrets That Swept Obama to the Presidency,” along with the revenue generated from the sale of our recently acquired programs and the funds provided to us by our president and principal shareholder, under a promissory note dated February 16, 2005, as amended, will be sufficient to fund our cash requirements to continue our efforts through February 2012.

If during the next twelve months our revenue is insufficient to continue operations, and we are unable to raise funds through the sale of additional equity, or from traditional borrowing sources, we may be required to scale back our planned operations, or be forced to totally abandon our business plan and seek other business opportunities in a related or unrelated industry. Such opportunities may include a reverse merger with a privately held company. The result of which could cause the existing shareholders to be severely diluted.

Employees

Due to our very limited financial resources, the Company’s President, Buddy Young, along with Joseph Adelman, and Mel Powell, our Director of acquisitions, work on a part-time basis. We have one part-time employee and one commissioned sales person. Additionally, we regularly utilize the services of independent firms to handle our accounting and certain administrative matters. If and when our capital resource permits, we will hire full-time professional and administrative employees.

Liquidity and Capital Resources

We had a cash balance of $8,448 on May 31, 2011. Other than funds received from the sale of “The Five Communication Secrets That Swept Obama to the Presidency,”, and the recently acquired library of videos, at this time, our only other known cash resource comes from an agreement with our President and majority shareholder to fund any shortfall in cash flow up to $100,000 at 8% interest through December 31, 2011. As of May 31, 2011 the balance owing on this agreement is $74,695. Payment of principal and interest is due on this loan on June 30, 2012.

We believe that revenue derived from the sale of the above mentioned programs, and further borrowings from our President will be sufficient to satisfy our budgeted cash requirement through February 28, 2012.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Based on the nature of our current operations, we have not identified any issues of market risk at this time.

ITEM 4T. CONTROLS AND PROCEDURES

The principal executive officer and principal financial officer of the Company, who are the same person (“the Certifying Officer”) with the assistance of advisors, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in section 240.13a-14(c) and 240.15d-14(c) under the Exchange Act) within 90 days prior to the filing of this report. Based upon the evaluation, the Certifying Officer concludes that the Company’s disclosure controls and procedures are effective in timely alerting management to material information relative to the Company which is required to be disclosed in its periodic filings with the SEC.

There were no significant changes in the Company’s internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

PART II

OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS None.

ITEM 2.

CHANGES IN SECURITIES AND USE OF PROCEEDS None.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES None.

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

During the quarter ended May 31, 2011, no matters were submitted to the Company's security holders.

ITEM 5.

OTHER INFORMATION None.

ITEM 6.

EXHIBITS

31.1 Certification of CEO Pursuant to Securities Exchange Act Rules 13a-14 and 15d-14, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	FUTURA PICTURES, INC.
	(Registrant)

Dated: July 5, 2011	By:	/s/ Buddy Young
		Buddy Young
		President and Chief Executive Officer

IMK GROUP, INC. - FORM 10-Q - July 7, 2011

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IMK GROUP, INC. Reports