CurrencyWorks Inc. - FORM 10-Q

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EX-32.1 - CurrencyWorks Inc.	ex32-1.htm
EX-31.1 - CurrencyWorks Inc.	ex31-1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2016

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to ____________

Commission file number 000-55049

REDSTONE LITERARY AGENTS, INC.

(Exact name of registrant as specified in its charter)

Nevada		N/A
(State or other jurisdiction		(I.R.S. Employer
of incorporation or organization)		Identification No.

3250 Oakland Hills Court, Fairfield, CA		94534
(Address of principal executive offices)		(Zip Code)

707.208.6368

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

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. 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 (§ 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 [X] 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]
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [X] No [ ]

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

6,000,000 common shares issued and outstanding as at November 11, 2016.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
Item 1. Financial Statements	1
Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations	8
Item 3. Quantitative and Qualitative Disclosures About Market Risk	13
Item 4. Controls and Procedures	13

PART II - OTHER INFORMATION
Item 1. Legal Proceedings	14
Item 1A. Risk Factors	15
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	17
Item 3. Defaults Upon Senior Securities	17
Item 4. Mine Safety Disclosures	18
Item 5. Other Information	18
Item 6. Exhibits	18

SIGNATURES	19

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Our unaudited financial statements are stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles.

It is the opinion of management that the unaudited interim financial statements for the quarter ended September 30, 2016 include all adjustments necessary in order to ensure that the unaudited interim financial statements are not misleading.

RedStone Literary Agents, Inc.

Condensed Balance Sheets

(Unaudited)

	September 30,			December 31,
	2016			2015
Assets

Current Assets
Cash and cash equivalents	$	8,770		$	13,870
Total Current Assets		8,770			13,870

Total Assets	$	8,770		$	13,870

Liabilities and Stockholders’ Deficit

Current Liabilities
Accounts payable and accrued expenses	$	2,770		$	4,150
Demand note payable		20,000			-
Total Current Liabilities		22,770			4,150

Non-Current Liabilities
Convertible note Payable		87,793			77,757

Total Liabilities		110,563			81,907

Stockholders’ Deficit
Common stock, $0.001 par value, 75,000,000 shares authorized;
6,000,000 shares issued and outstanding:		6,000			6,000
Additional paid-in-capital		63,717			63,717
Retained deficit		(171,510	)		(137,754	)
Total Stockholders’ Deficit		(101,793	)		(68,037	)

Total Liabilities and Stockholders’ Deficit	$	8,770		$	13,870

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

RedStone Literary Agents, Inc.

Condensed Statements of Operations

(Unaudited)

	Three Months Ended September 30, 2016			Three Months Ended September 30, 2015			Nine Months Ended September 30, 2016,			Nine Months Ended September 30, 2015

Revenue	$	-		$	-		$	-		$	-

General and administrative expenses
Bank charges and interest		3,447			2,077			10,036			4,318
Consulting fees		2,750			284			8,200			1,862
Professional fees		5,409			9,404			11,282			23,062
Filing and transfer fees		770			4,984			4,238			7,856
Total general and administrative expenses		12,376			16,749			33,756			37,098

Net loss from operations		(12,376	)		(16,749	)		(33,756			(37,099	)

Provision for taxes		-			-			-			-

Net loss	$	(12,376	)	$	(16,749	)	$	(33,756	)	$	(37,098	)

Loss per common share – Basic and diluted	$	(0.01	)*	$	(0.01	)*	$	(0.00	)*	$	(0.00	)*

Weighted average number of common shares
outstanding, basic and diluted		6,000,000			6,000,000			6,000,000			6,000,000

* Denotes a loss of less than $(0.01) per share.

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

RedStone Literary Agents, Inc.

Condensed Statements of Cash Flows

(Unaudited)

	Nine Months Ended September 30, 2016				Nine Months Ended September 30, 2015
Cash derived from (used for) Operating activities
Net loss for the period		$	(33,756	)	$	(37,098	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Changes in operating assets and liabilities
Accrued interest included in convertible notes payable			10,036			1,107
Accounts payable and accrued expenses			(1,380	)		1,706
Net cash (used in) operating activities			(25,100	)		(34,285	)

Investing activities			-			-
Net cash provided by (used in) investing activities			-			-

Financing activities
Proceeds from demand loan payable			20,000			-
Proceeds from convertible note payable			-			73,825
Proceeds from loan payable			-			(10,614	)
Net cash provided by financing activities			20,000			63,211

Net changes in cash and equivalents			(5,100	)		28,926

Cash and equivalents at beginning of the year			13,870			4,663

Cash and equivalents at end of the year		$	8,770		$	33,589

SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid in interest		$	-		$	-

Cash paid for income taxes		$	-		$	-

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

RedStone Literary Agents, Inc.

Notes to Condensed Unaudited Financial Statements

As of September 30, 2016 and for the three and nine months ended September 30, 2016 and 2015

1. NATURE AND CONTINUANCE OF OPERATIONS

Redstone Literary Agents, Inc. (the “Company”) was incorporated under the laws of State of Nevada, U.S. on July 20, 2010, with an authorized capital of 75,000,000 common shares, having a par value of $0.001 per share. The Company’s year-end is December 31. During the period ended December 31, 2010, the Company commenced operations by issuing shares and developing its publishing service business, focused on representing authors to publishers.

Effective August 28, 2014, Mary Wolf, the Company’s sole director and officer, resigned as President, Secretary and Treasurer of the Company, and James P. Geiskopf was appointed as the President, Secretary, Treasurer, and a director of the Company.

Also on August 28, 2014, pursuant to a transfer agreement dated for reference August 28, 2014, Ms. Wolf sold to Mr. Geiskopf 3,000,000 shares of the Company’s common stock for total consideration of $20,000. Mr. Geiskopf paid the $20,000 purchase price for these shares using personal funds. Mr. Geiskopf holds 50% of the Company’s issued and outstanding common stock.

In November 2014, Ms. Wolf resigned as a director of the Company and the Company ceased pursuing the publishing service business and is now seeking new business opportunities with established business entities to effect a merger or other form of business combination with the Company. There can be no assurance, however, that the Company will be able to acquire the financing necessary to enable it to pursue its plan of operation and enter into such an agreement.

Going Concern

These financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred losses since inception resulting in an accumulated deficit of $171,510 as at September 30, 2016 and further losses are anticipated in the pursuit of a new business opportunity, raising substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand, loans from directors and/or the private placement of common stock.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars.

Unaudited Interim Financial Information

The accompanying unaudited interim financial statements and related notes have been prepared in accordance with U.S. GAAP for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (the "SEC") to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Unaudited interim results are not necessarily indicative of the results for the full fiscal year. These unaudited interim financial statements should be read in conjunction with the financial statements of the Company for the year ended December 31, 2015 and notes thereto contained in the information as part of the Company's Annual Report on Form 10-K, which was filed with the SEC on March 30, 2016.

Income Taxes

The Company follows the liability method of accounting for income taxes. Under this method, deferred income tax assets and liabilities are recognized for the estimated tax consequences attributable to differences between the financial statement carrying values and their respective income tax basis (temporary differences). The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

At September 30, 2016, a full deferred tax asset valuation allowance has been provided and no deferred tax asset has been recorded.

Earnings per Share

The Company computes loss per share in accordance with ASC 105, “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common stockholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive.

With the exception of the convertible note payable discussed in Note 3, the Company had no potentially dilutive debt or equity instruments issued or outstanding during the interim nine month periods ended September 30, 2016 and 2015.

Reclassifications

Certain amounts previously presented for prior periods have been reclassified. The reclassifications had no effect on net loss, total assets, or total shareholders' deficit.

3. NOTES PAYABLE

On September 14 2015, the Company entered into a private placement subscription agreement and issued an unsecured convertible note (the “Note”) in the principal amount of $73,825 (the “Principal Amount”) to one subscriber. The Note, and accrued interest, will mature five (5) years from the date of issuance and will bear interest at the rate of 18% interest per annum, compounded annually. The Principal Amount, plus any interest accrued thereon, may be converted into shares of common stock of the Company at a conversion price of $0.03 per share. As at September 30, 2016, the Note had a balance outstanding of $87,793, comprised of principle amounts of $73,825 and accrued interest of $13,968.

On June 6, 2016, The Company issued an unsecured note (the “Second Note”) in the principal amount of $20,000. The Second Note is unsecured, interest free, payable on demand and has no maturity date.

4. RELATED PARTY TRANSACTIONS

In support of the Company’s efforts and cash requirements, it may rely on advances from stockholders until such time as the Company can support its operations through revenue generation, or attain adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by stockholders. Amounts represent advances or amounts paid in satisfaction of liabilities.

The Company’s office premises are provided to it at no cost by its sole director and officer. The Company’s sole director and officer did not take any fees for serving as director or officer during the interim nine month periods ended September 30, 2016 and 2015.

5. INCOME TAXES

As of September 30, 2016, the Company had net operating loss carry forwards of approximately $171,510. The carry forwards expire through the year 2035. Because of the historical earnings history of the Company, the net deferred tax assets for 2015 were fully offset by a 100% valuation allowance. The valuation allowance for the remaining net deferred tax assets was $25,727 as of September 30, 2016 and $20,663 as of December 31, 2015 respectively. The Company's net operating loss carry forwards may be subject to annual limitations, which could reduce or defer the utilization of the losses as a result of an ownership change as defined in Section 382 of the Internal Revenue Code.

6. SUBSEQUENT EVENTS

The Company has evaluated subsequent events from September 30, 2016 to the date the financial statements were issued and has determined that it does not have any material subsequent events to disclose in these financial statements.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

This quarterly report contains “forward-looking statements”. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, statements regarding: the plans, strategies and objections of management for future operations; the future plans or business of our company; future economic conditions or performance; and any statements of assumptions underlying any of the foregoing.

Forward-looking statements may include the words “may,” “could,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate” or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the dates on which they are made. Except as required by applicable law, we do not intend, and undertake no obligation, to update any forward-looking statement.

Although we believe the expectations reflected in the forward-looking statements in this report are reasonable, actual results could differ materially from those projected or assumed in any forward-looking statements. All forward-looking statements are subject to change and inherent risks and uncertainties. The factors impacting these risks and uncertainties include, but are not limited to:

·	our current lack of working capital;

·	a possible inability to raise additional financing;

·	the fact that our accounting policies and methods are fundamental to how we report our financial condition and results of operations, and they may require our management to make estimates about matters that are inherently uncertain;

·	deterioration in general or regional economic conditions;

·	adverse state or federal legislation or regulations that increase the costs of compliance;

·	inability to efficiently manage our operations; and

·	the unavailability of funds for capital expenditures.

All financial information contained herein is shown in United States dollars unless otherwise stated. Our financial statements are prepared in accordance with United States generally accepted accounting principles.

In this quarterly report, unless otherwise specified, all references to “shares” refer to shares of common stock in the capital of our company.

As used in this quarterly report on Form 10-Q, the terms “we”, “us” “our” and “RedStone” refer to RedStone Literary Agents Inc., a Nevada corporation, unless otherwise specified.

Corporate Overview

We were incorporated under the laws of the State of Nevada on July 20, 2010 and are considered a development stage company. Following incorporation, we commenced the business of representing authors to publishers.

On August 28, 2014, pursuant to a transfer agreement dated for reference August 28, 2014, Mary Wolf, our former sole director and officer, sold to James P. Geiskopf 3,000,000 shares of our common stock for total consideration of $20,000. Mr. Geiskopf paid the $20,000 purchase price for these shares using personal funds. Mr. Geiskopf holds approximately 50% of our issued and outstanding common stock.

Effective August 28, 2014, Mr. Geiskopf was appointed as president, secretary, treasurer and a director of our company, and as a result, Mary Wolf resigned as president, secretary and treasurer. Mary Wolf resigned as a director of our company on November 17, 2014.

The principal offices of our company are located at 3250 Oakland Hills Court, Fairfield, CA 94534. Our telephone number is 707.208.6368.

Our Current Business

Upon the resignation of Mary Wolf as an officer of our company, we ceased pursuing the business of representing authors to publishers and are now seeking new business opportunities with established business entities to effect a merger or other form of business combination with our company. We anticipate that any new acquisition or business opportunity that we may be party to will require additional financing. There can be no assurance, however, that we will be able to acquire the financing necessary to enable us to pursue our plan of operation and enter into such an agreement. If our company requires additional financing and we are unable to obtain such funds, our business will fail.

Even if we are able to commence a new business opportunity and obtain the necessary funding, there is no assurance that we will be able to generate any revenue, or that any revenue that may be generated will be sufficient to provide a return to our investors.

In implementing a structure for a particular business acquisition or opportunity, we may become a party to a merger, consolidation, reorganization, joint venture or other business combination with another corporation or entity. We may also acquire stock or assets of an existing business. Upon the consummation of a transaction, it is likely that our present management will no longer be in control of our company. In addition, it is likely that some or all of our current management will resign and be replaced by one or more new officers or directors.

We anticipate that the selection of a business opportunity in which to participate will be complex and without certainty of success. We believe that there are numerous firms in various industries seeking the perceived benefits of being a publicly reporting corporation. Business opportunities may be available in many different industries and with businesses at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex. Business opportunities that we believe are in the best interests of our company to pursue may be scarce or we may be unable to obtain opportunities that we want. We can provide no assurance that we will be able to locate compatible business opportunities.

As of the date hereof, we have not entered into any formal written agreements for a business combination or opportunity. When any such agreement is reached, we intend to disclose such an agreement by filing a current report on Form 8-K with the Securities and Exchange Commission.

Currently, we do not have a source of revenue. We are not able to fund our cash requirements through our current operations. Historically, we have been able to raise a limited amount of capital through private placements of our equity stock, but we are uncertain about our continued ability to raise funds privately. Further, we believe that our company may have difficulties raising capital until we locate a prospective business through which we can pursue our plan of operation. If we are unable to secure adequate capital to continue our acquisition efforts, our shareholders may lose some or all of their investment and our business may fail.

Results of Operations

Three Months Ended September 30, 2016 Compared to the Three Months Ended September 30, 2015

Revenue

We had no revenue for the three months ended September 30, 2016 and 2015.

Operating Expenses

We incurred general and administrative expenses of $12,376 and $16,749 for the three months ended September 30, 2016 and 2015, respectively, representing a decrease of $4,373 between the two periods. These expenses consisted primarily of professional fees, consulting fees, bank charges and interest, and filing and transfer fees. The decrease in operating expenses between the two periods related primarily to the decrease in professional fees from $9,404 in 2015 to $5,409 in 2016, a decrease in filing and transfer fees from $4,984 in 2015 to $770 in 2016, offset by an increase in bank charges from $2,077 in 2015 to $3,447 in 2016 and an increase in consulting fees from $284 in 2015 to $2,750 in 2016. The decrease in professional fees from $9,404 in 2015 to $5,409 in 2016 was primarily due to the fact that we did not have any financing or restructuring costs other than interest. The decrease in filing and transfer fees from $4,984 in 2015 to $770 in 2016 was due to a one time set up charge from the transfer agent in August, 2015. The increase in bank charges and interest from $2,077 in 2015 to $3,447 in 2016 was due to interest fees accrued on the additional outstanding advance in August, 2015. The increase in consulting fees from $284 in 2015 to $2,750 in 2016 was due to the hiring of a new consultant.

Net Loss

We incurred net losses of $12,376 and $16,749 for the three months ended September 30, 2016 and 2015, respectively, representing a decrease of $4,373, primarily attributable to the decrease in consulting fees and professional fees, as discussed above under the heading “Operating Expenses”.

Nine Months Ended September 30, 2016 Compared to the Nine Months Ended September 30, 2015

Revenue

We had no revenue for the nine months ended September 30, 2016 and 2015.

Operating Expenses

We incurred general and administrative expenses of $33,756 and $37,098 for the nine months ended September 30, 2016 and 2015, respectively, representing a decrease of $3,342 between the two periods. These expenses consisted primarily of professional fees, consulting fees, bank charges and interest, and filing and transfer fees. The decrease in operating expenses between the two periods related primarily to the decrease in professional fees from $23,062 in 2015 to $11,282 in 2016, a decrease in filing and transfer fees from $7,856 in 2015 to $4,238 in 2016, offset by an increase in bank charges from $4,318 in 2015 to $10,036 in 2016 and an increase in consulting fees from $1,862 in 2015 to $8,200 in

2016. The decrease in professional fees from $23,063 in 2015 to $11,282 in 2016 was primarily due to the fact that we did not have any financing or restructuring costs other than interest. The decrease in filing and transfer fees from $7,856 in 2015 to $4,238 in 2016 was due to a one time set up charge from the transfer agent in August, 2015. The increase in bank charges and interest from $4,318 in 2015 to $10,036 in 2016 was due to interest fees accrued on the additional outstanding advance in August, 2015. The increase in consulting fees from $1,862 in 2015 to $8,200 in 2016 was due to the hiring of a new consultant.

Net Loss

We incurred net losses of $33,756 and $37,099 for the nine months ended September 30, 2016 and 2015, respectively, due to the factors discussed above under the heading, “Operating Expenses”.

Liquidity and Capital Resources

Working Capital

	As at September 30, 2016			As at December 31, 2015
	(unaudited)

Current assets	$	8,770		$	13,870
Current liabilities	$	22,770		$	4,150
Working capital (deficit)	$	(14,000	)	$	9,720

Current Assets

Current assets of $8,770 as at September 30, 2016 and $13,870 as at December 31, 2015 were comprised only of cash and cash equivalents.

Current Liabilities

Current liabilities as at September 30, 2016 were attributable to $2,770 in accounts payable and accrued expense and $20,000 to demand loan payable, compared to $4,150 in accounts payable and accrued expenses as at December 31, 2015.

Cash Flow

	Nine Months			Nine Months
	ended			ended
	September 30,			September 30,
	2016			2015

Net cash used in operating activities	$	(25,100	)	$	(34,285	)
Net cash used in investing activities		-			-
Net cash provided by financing activities		20,000			63,211
Net increase (decrease) in cash and cash equivalents	$	(5,100	)	$	28,926

Operating Activities

During the nine months ended September 30, 2016, we used $25,100 in operating activities compared to $34,285 in the nine months ended September 30, 2015. The decrease in cash used in operating activities between 2015 and 2016 primarily related to a decrease in professional fees and filing and transfer fees and an increase in consulting fees and bank charges and interest.

Investing Activities

Investing activities used cash of $nil for the nine month periods ended September 30, 2016 and September 30, 2015.

Financing Activities

Financing activities provided cash of $20,000 for the nine month period ended September 30, 2016 compared to $63,211 for the nine month period ended September 30, 2015.

During the nine months ended September 30, 2016 we received $20,000 as proceeds from a loan payable and during the nine months ended September 30, 2015 we received $73,825 by way of a convertible note payable. The convertible note issued in September 2015 will mature five years from the date of issuance and will bear interest at the rate of 18% interest per annum, compounded annually. The principal amount, plus any interest accrued thereon, may be converted into shares of our common stock at a conversion price of $0.03 per share.

Plan of Operations

We expect that we will require $30,000 to $50,000, in addition to our current cash to fund our operating expenditures for the next twelve months. Projected working capital requirements for the next twelve months are as follows:

Estimated Working Capital Expenditures During the Next Twelve Months

Operating expenditures
Evaluation of new business opportunities	$	10,000 to $20,000
General and administrative (including professional fees)	$	20,000 to $30,000
Total	$	30,000 to $50,000

General and administrative expenses are expected to include the fees and travel costs we expect to pay in connection with seeking out business opportunities, and negotiating and executing definitive agreements with respect to potential business acquisitions.

Professional fees are expected to include fees related to complying with public reporting requirements, maintaining our quotation on the OTCQB, and work related to evaluating potential business opportunities, including due diligence work.

Cash Requirements

As we have no cash flow from operations, we will require additional cash resources, including from the sale of equity or debt securities, to meet our planned capital expenditures and working capital requirements for the next 12 months. We estimate that our capital needs over the next 12 months will be $30,000 to $50,000. We expect to require additional cash for general and administrative expenses and to evaluate new business opportunities. We expect to derive such cash through the sale of additional equity or debt securities or by obtaining a credit facility. The sale of additional equity securities will result in dilution to our stockholders. The incurrence of indebtedness will result in debt service obligations, could cause additional dilution to our stockholders, and could require us to agree to financial covenants that could restrict our operations or modify our plans to source a new business opportunity. Financing may not be available in amounts or on terms acceptable to us, if at all. Failure to raise additional funds could cause our company to fail.

Going Concern

Our financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. We have not yet established a source of revenues sufficient to cover our operating costs and to allow us to continue as a going concern. We have incurred losses since inception resulting in an accumulated deficit of $171,510 as at September 30, 2016 (December 31, 2015: $137,754). Our ability to operate as a going concern is dependent on obtaining adequate capital to fund operating losses until we become profitable.

In its report on our financial statements for the year ended December 31, 2015, our independent registered public accounting firm included an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, and are not required to provide the information under this item.

ITEM 4. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

“Disclosure controls and procedures”, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), include controls and procedures designed to ensure that information required to be disclosed in our company’s reports filed under the Exchange Act recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management to allow timely decisions regarding required disclosure.

Our principal executive officer and principal financial officer, who is the sole officer and director of our company, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2016. Based on this evaluation, he concluded that, as of September 30, 2016, our disclosure controls and procedures were not effective such that the information relating to us that is required to be disclosed in our SEC reports: (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms; and (ii) is accumulated and communicated to our management, including our principal executive and financial officer, to allow timely decisions regarding required disclosure.

Internal Control over Financial Reporting

Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives. Our sole director and officer conducted an evaluation of the effectiveness of our internal control over financial reporting as of September 30, 2016 based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control – Integrated Framework. Based upon such evaluation, our sole director and officer concluded that we did not maintain effective internal control over financial reporting as of September 30, 2016 based on the COSO framework criteria, as more fully described below. This was due to deficiencies that existed in the design or operation of our internal control over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.

The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee; (2) the fact that we only had a single director and officer, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (3) inadequate segregation of duties consistent with control objectives; and (4) management dominated by a single individual without adequate compensating controls. The aforementioned material weaknesses were identified by our principal executive officer in connection with the review of our financial statements as of September 30, 2016.

Management believes that the material weaknesses set forth above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the fact that James Geiskopf is our sole director and officer results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the fiscal quarter ended September 30, 2016, that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We know of no material pending legal proceedings to which our company is a party or of which any of our properties is the subject. In addition, we do not know of any such proceedings contemplated by any governmental authorities.

We know of no material proceedings in which any of our directors, officers or affiliates, or any registered or beneficial stockholder, is a party adverse to our company or has a material interest adverse to our company.

ITEM 1A. RISK FACTORS

An investment in our common stock involves a number of very significant risks. You should carefully consider the following risks and uncertainties in addition to other information in this report in evaluating our company before purchasing our securities. Our operating results and financial condition could be seriously harmed as a result of the occurrence of any of the following risks. You could lose all or part of your investment due to any of these risks.

Risks Related to Our Business

Business opportunities that we believe are in the best interests of our company may be scarce or we may be unable to obtain the ones that we want. If we are unable to obtain a business opportunity that we believe is in the best interests of our company, we may never recommence operations and will go out of business. If we go out of business, investors will lose their entire investment in our company.

We are, and will continue to be, an insignificant participant in the number of companies seeking a suitable business opportunity or business combination. A large number of established and well-financed entities, including venture capital firms, are actively seeking suitable business opportunities or business combinations which may also be desirable target candidates for us. Virtually all such entities have significantly greater financial resources, technical expertise and managerial capabilities than we do. We are, consequently, at a competitive disadvantage in identifying possible business opportunities and successfully completing a business combination. We will also compete with numerous other small public companies seeking suitable business opportunities or business combinations. If we are unable to obtain a business opportunity that we believe is in the best interests of our company, we may never recommence operations and will go out of business. If we go out of business, investors will lose their entire investment in our company.

The current state of capital markets, particularly for small companies, is expected to reduce our ability to obtain the financing necessary to continue our business. If we cannot raise the funds that we need to continue acquisitions and fund future business opportunities, we will go out of business and investors will lose their entire investment in our company.

Since 2008, there has been a downturn in general worldwide economic conditions. This downturn has resulted in increased difficulties for our company, and other smaller companies, to raise capital for our continued operations and to consummate a business opportunity with a viable business. We may not be able to raise money through the sale of our equity securities or through borrowing funds on terms we find acceptable.

We have had negative cash flows from operations and if we are not able to obtain further financing, our business operations may fail.

We had cash and cash equivalents in the amount of $8,770 and working capital deficit of $14,000 as of September 30, 2016. We anticipate that we will require additional financing while we are seeking a suitable business opportunity or business combination. Further, we anticipate that we will not have sufficient capital to fund our ongoing operations for the next twelve months. We would likely secure any additional financing necessary through a private placement of our common shares. There can be no assurance that any financing will be available to us, or, even if it is, if it will be offered on terms and conditions acceptable to us. Our inability to obtain additional financing in a sufficient amount when needed and upon terms and conditions acceptable to us, could have a material adverse effect upon our company. If additional funds are raised by issuing equity securities, dilution to existing or future shareholders will result. If adequate funds are not available on acceptable terms when needed, we may be required to delay, scale back or eliminate the development of any business opportunity that we may acquire.

A decline in the price of our common stock could affect our ability to raise further working capital and adversely impact our operations. If we cannot raise the funds that we require, we will go out of business and investors will lose their entire investment in our company.

A prolonged decline in the price of our common stock could result in a reduction in the liquidity of our common stock and a reduction in our ability to raise capital. Because our operations have been primarily financed through the sale of equity securities, a decline in the price of our common stock could be especially detrimental to our liquidity and our continued operations. Any reduction in our ability to raise equity capital in the future would force us to reallocate funds from other planned uses and would have a significant negative effect on our business plans and operations. If our stock price declines, we may not be able to raise additional capital or generate funds from operations sufficient to meet our obligations.

We do not have any targets for a business combination or other transaction and we have no minimum standards for a business combination.

We have no arrangement, agreement, or understanding with respect to acquiring a business opportunity or engaging in a business combination with any private entity. There can be no assurance that we will successfully identify and evaluate suitable business opportunities or conclude a business combination. We have not established a specific length of operating history or a specified level of earnings, assets, net worth or other criteria which we will require a target business opportunity to have achieved. Accordingly, we may enter into a business combination with a business opportunity having no significant operating history, losses, limited or no potential for earnings, limited assets, negative net worth or other negative characteristics.

Risks Associated with our Common Stock

Because James Geiskopf controls a large percentage of our voting stock, he has the ability to influence matters affecting our stockholders.

James Geiskopf, our president, secretary, treasurer and sole director, owns 3,000,000 shares of our common stock and controls a majority of the votes attached to our outstanding voting securities. As a result, he has the ability to influence matters affecting our stockholders, including the election of our directors, the acquisition of assets, and the issuance of securities. Because he controls a majority of votes, it would be very difficult for investors to replace our management if they disagree with the way our business is being operated. Because the influence by Mr. Geiskopf could result in management making decisions that are in the best interest of Mr. Geiskopf and not in the best interest of the investors, you may lose some or all of the value of your investment in our common stock.

Because we can issue additional shares of common stock, our stockholders may experience dilution in the future.

We are authorized to issue up to 75,000,000 shares of common stock, of which 6,000,000 shares of common stock were issued and outstanding as of September 30, 2016. Our board of directors has the authority to cause us to issue additional shares of common stock without consent of our stockholders. Consequently, stockholders may experience dilution in their ownership of our stock in the future.

There is currently no established public trading market for our common stock, which makes it difficult for our stockholders to resell their shares.

There is currently no established public trading market for our common stock. There is a limited public market for our common stock through its quotation on the OTCQB operated by the OTC Markets Group. Trading in stocks quoted on the OTCQB is often thin and is characterized by wide fluctuations in trading prices due to many factors that may be unrelated or have little to do with a company's operations or business prospects. Moreover, the OTCQB is not a stock exchange, and trading of securities on the OTCQB is often more sporadic than the trading of securities listed on a national securities exchange like the NASDAQ or the NYSE. Accordingly, stockholders may have difficulty reselling any of our shares. We cannot assure you that there will be a market for our common stock in the future.

Because we do not intend to pay any cash dividends on our common stock in the near future, our stockholders will not be able to receive a return on their shares unless they sell them.

We do not anticipate paying any cash dividends on our common stock in the near future. The declaration, payment and amount of any future dividends will be made at the discretion of the board of directors, and will depend upon, among other things, our results of operations, cash flows and financial condition, operating and capital requirements, and other factors the board considers relevant. We may never pay any dividends. Unless we pay dividends, our stockholders will not be able to receive a return on their shares unless they sell them.

Our stock is a penny stock. Trading of our stock is restricted by the SEC’s penny stock regulations, which may limit a stockholder’s ability to buy and sell our stock.

Our stock is a penny stock. The Securities and Exchange Commission (the “SEC”) has adopted Rule 15g-9 which generally defines “penny stock” to be any equity security that has a market price (as defined in Rule 15g-9) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors”. The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC, which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.

FINRA sales practice requirements may also limit a stockholder’s ability to buy and sell our stock.

In addition to the “penny stock” rules promulgated by the SEC, the Financial Industry Regulatory Authority (“FINRA”) has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Since the beginning of the fiscal quarter ended September 30, 2016, we have not sold any equity securities that were not registered under the Securities Act of 1933, as amended, that were not previously reported in a quarterly report on Form 10-Q or a current report on Form 8-K.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Since the beginning of the fiscal quarter ended September 30, 2016, we have had no senior securities issued and outstanding.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibit Number		Description

(3)		Articles of Incorporation and Bylaws
3.1(1)		Articles of Incorporation
3.2(2)		Bylaws
(10)		Material Contracts
10.1(1)		Form of Subscription Agreement
10.2(2)		Transfer Agreement
(31)		Rule 13a-14 Certifications
31.1*		Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
(32)		Section 1350 Certifications
32.1*		Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(101)		Interactive Data File
101.INS*		XBRL Instance Document
101.SCH*		XBRL Taxonomy Extension Schema
101.CAL*		XBRL Taxonomy Extension Calculation Linkbase
101.DEF*		XBRL Taxonomy Extension Definition Linkbase
101.LAB*		XBRL Taxonomy Extension Label Linkbase
101.PRE*		XBRL Taxonomy Extension Presentation Linkbase

* Filed herewith.

(1)	Filed as an exhibit to our registration statement on Form S-1 on March 30, 2011 and incorporated herein by reference.

(2)	Filed as an exhibit to our current report on Form 8-K on September 2, 2014 and incorporated herein by reference.

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.

REDSTONE LITERARY AGENTS, INC.

/s/ James P. Geiskopf

James P. Geiskopf

President, Treasurer, Secretary and Director

(Principal Executive Officer, Principal Financial

Officer and Principal Accounting Officer)

Dated: November 14, 2016

Attached files

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