UNITED
STATES


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
quarter ended:  May 31, 2009





o
              TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For the
transition period from ___________ to ___________





Commission
file number: 333-108690





RED ROCK PICTURES HOLDINGS INC.


(Exact
name of registrant as specified in its charter)





Nevada
                  98-0441032(State
      or other jurisdiction of
                  (I.R.S.
      Employer Identification No.)incorporation
      or organization)
  8228
      Sunset Boulevard, 3 rdFloor, Los Angeles, California
                90046(Address
      of principal executive offices)
                (Zip
      Code)




(323)
790-1813


(Registrant’s
telephone number, including area code)




Check
whether the issuer (1) has filed all reports required to be filed by Section 13
or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter
period that the issuer was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes  xNo o





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 o No o





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





Large
      Accelerated Filer o
            Accelerated
      Filer o
            Non-Accelerated
      Filer o
            Smaller
      Reporting Company x





Indicate
by check mark whether the registrant is a shell company as defined in Rule 12b-2
of the Exchange Act.    Yes  oNo x




State the
number of shares outstanding of each of the issuer’s classes of common equity,
as of July 20, 2009: 106,816,335 shares of common stock.











RED
ROCK PICTURES HOLDINGS, INC. AND SUBSIDIARIES





FORM
10-Q





THREE
AND NINE MONTHS ENDED MAY 31, 2009 AND 2008




___________________





TABLE
OF CONTENTS


___________________




PagePART
      I - FINANCIAL INFORMATIONItem
      1.
                      Consolidated
      Financial StatementsConsolidated
      Balance Sheets
                      4Consolidated
      Statements of Loss and Comprehensive Loss
                      5Consolidated
      Statements of Cash Flows
                      6Notes
      to Consolidated Financial Statements
                      7Item
      2.
                      Management’s
      Discussion & Analysis or Plan of Operation
                      14Item
      4T.
                      Controls
      and Procedures
                      17PART
      II - OTHER INFORMATIONItem
      1.
                      Legal
      Proceedings
                      18Item
      2.
                      Unregistered
      Sales of Equity securities and Use of Proceeds
                      18Item
      3.
                      Defaults
      Upon Senior Securities
                      18Item
      4.
                      Submission
      of Matters to a Vote of Security Holders
                      18Item
      5
                      Other
      Information
                      18Item
      6.
                      Exhibits
                      18Signatures
                      19






-2-
















CAUTIONARY
STATEMENT RELATED TO FORWARD LOOKING STATEMENTS






This
Quarterly Report on Form 10-Q includes certain forward-looking statements
as defined within Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended,
relating to revenue, revenue composition, earnings, projected plans,
performance, demand trends, future expense levels, trends in average headcount
and gross margins, and the level of expected capital expenditures. Such
forward-looking statements are based on the beliefs of, estimates made by, and
information currently available to Red Rock Pictures Holdings Inc. management
and are subject to certain risks, uncertainties and assumptions. Any statements
contained herein (including without limitation statements to the effect that the
Company or management "estimates," "expects," "anticipates," "plans,"
"believes," "projects," "continues," "may," "will," "could," or "would" or
statements concerning "potential" or "opportunity" or variations thereof or
comparable terminology or the negative thereof) that are not statements of
historical fact should be construed as forward-looking statements. The actual
results of Red Rock Pictures Holdings Inc. may vary materially from those
expected or anticipated in these forward-looking statements. The realization of
such forward-looking statements may be impacted by certain important
unanticipated factors including those discussed in "Risk Factors" under
Item 1A, and "Management's Discussion and Analysis of Financial Condition
and Results of Operations," at pages 13-15. Because of these and other
factors that may affect Red Rock Pictures Holdings Inc.’s operating
results, past performance should not be considered as an indicator of future
performance, and investors should not use historical results to anticipate
results or trends in future periods. The Company undertakes no obligation to
publicly release the results of any revisions to these forward-looking
statements that may be made to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events. Readers should
carefully review the risk factors described in this and other documents that Red
Rock Pictures Holdings, Inc. files from time to time with the Securities and
Exchange Commission ("SEC"), including subsequent Current Reports on
Form 8-K, Quarterly Reports on Form 10-Q and Annual Reports on
Form 10-K.





HOW
TO OBTAIN SEC FILINGS





All
reports filed by Red Rock Pictures Holdings, Inc. filed with the SEC are
available free of charge via EDGAR through the SEC website at www.sec.gov. In
addition, the public may read and copy materials filed by the Company with the
SEC at the SEC's public reference room located at 450 Fifth St., N.W.,
Washington, D.C. 20549.  Red Rock Pictures Holdings also provides
copies of its Forms 8-K, 10-K, 10-Q, Proxy and Annual Report at no charge
to investors upon request and makes electronic copies of its most recently filed
reports available through its website at www.redrockpics.com as soon as
reasonably practicable after filing such material with the SEC.








-3-









RED
ROCK PICTURES HOLDINGS, INC. AND SUBSIDIARIES


CONSOLIDATED
BALANCE SHEETS




May
      31, 2009
                                            
                                            
                                            August
      31, 2008(Unaudited)ASSETSCurrent
      AssetsCash
                                            
                                            $
                                            -
                                            
                                            
                                            $
                                            5,932Accounts
      receivable, net of no allowance for doubtful accounts
                                            
                                            
                                            -
                                            
                                            
                                            
                                            216,644Advances
      to related party
                                            
                                            
                                            -
                                            
                                            
                                            
                                            76,798Capitalized
      production costs
                                            
                                            
                                            112,924
                                            
                                            
                                            
                                            134,723Prepaid
      expenses and deposits
                                            
                                            
                                            -
                                            
                                            
                                            
                                            10,745Production
      loans and accrued interest - current portion
                                            
                                            
                                            -
                                            
                                            
                                            
                                            1,396,470Total
      Current Assets
                                            
                                            
                                            112,924
                                            
                                            
                                            
                                            1,841,312Long
      Term AssetsProduction
      loans and accrued interest
                                            
                                            
                                            30,000
                                            
                                            
                                            
                                            1,845,157Print
      and advertising funding
                                            
                                            
                                            1,313,378
                                            
                                            
                                            
                                            1,078,180Property
      and equipment, net
                                            
                                            
                                            18,686
                                            
                                            
                                            
                                            25,707Intangibles,
      net
                                            
                                            
                                            -
                                            
                                            
                                            
                                            424,280Goodwill
                                            
                                            
                                            -
                                            
                                            
                                            
                                            450,338Total
      Long Term Assets
                                            
                                            
                                            1,362,064
                                            
                                            
                                            
                                            3,823,662Total
      Assets
                                            
                                            $
                                            1,474,988
                                            
                                            
                                            $
                                            5,664,974LIABILITIES
      AND STOCKHOLDERS' EQUITYCurrent
      LiabilitiesAccounts
      payable
                                            
                                            $
                                            227,042
                                            
                                            
                                            $
                                            127,720Accrued
      liabilities
                                            
                                            
                                            -
                                            
                                            
                                            
                                            32,290Advances
      from stockholders
                                            
                                            
                                            63,636
                                            
                                            
                                            
                                            63,636Deferred
      production revenue
                                            
                                            
                                            200,000
                                            
                                            
                                            
                                            326,000Senior
      secured convertible note, including accrued interest of $4,200 and $Nil at
      May 31, 2009 and August 31, 2008, respectively
                                            
                                            
                                            104,200
                                            
                                            
                                            
                                            --Advances
      from related parties
                                            
                                            
                                            1,805,928
                                            
                                            
                                            
                                            1,997,410Total
      Current Liabilities
                                            
                                            
                                            2,400,806
                                            
                                            
                                            
                                            2,547,056Going
      Concern, Commitments and ContingencyStockholders'
      Equity (Deficit)Preferred
      stock, $0.001 par value; 5,000,000 shares authorized, none issued or
      outstanding
                                            
                                            
                                            --
                                            
                                            
                                            
                                            -Common
      stock, $0.001 par value; 120,000,000 shares authorized,
      106,816,335 and 95,350,735 shares issued and outstanding at
      May  31, 2009 and August 31, 2008, respectively
                                            
                                            
                                            106,816
                                            
                                            
                                            
                                            95,351Additional
      paid-in-capital
                                            
                                            
                                            9,388,624
                                            
                                            
                                            
                                            8,200,769Deficit
                                            
                                            
                                            (10,421,258
                                            )
                                            
                                            
                                            (5,178,202
                                            )Total
      Stockholders' Equity (Deficit)
                                            
                                            
                                            (925,818
                                            )
                                            
                                            
                                            3,117,918Total
      Liabilities and Stockholders' Equity (Deficit)
                                            
                                            $
                                            1,474,988
                                            
                                            
                                            $
                                            5,664,974




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




-4-








RED
ROCK PICTURES HOLDINGS, INC. AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF LOSS AND COMPREHENSIVE LOSS




For
      the Three Months Ended May 31, 2009
                      (Unaudited)
                    
                    
                    For
      the Three Months Ended May 31, 2008
                      (Unaudited)
                    
                    
                    For
      the Nine
                      Months
      Ended
                      May
      31, 2009
                      (Unaudited)
                    
                    
                    For
      the Nine Months Ended May 31, 2008
                      (Unaudited)REVENUEProduction
      revenue
                    
                    $
                    --
                    
                    
                    $
                    --
                    
                    
                    $
                    183,650
                    
                    
                    $
                    --Distribution
      financing fee
                    
                    
                    --
                    
                    
                    
                    105,826
                    
                    
                    
                    --
                    
                    
                    
                    105,826Print
      and advertising premium fees
                    
                    
                    --
                    
                    
                    
                    --
                    
                    
                    
                    69,844
                    
                    
                    
                    --Interest
      on production advances
                    
                    
                    --
                    
                    
                    
                    90,476
                    
                    
                    
                    182,000
                    
                    
                    
                    269,141TOTAL
      REVENUE
                    
                    
                    --
                    
                    
                    
                    196,302
                    
                    
                    
                    435,494
                    
                    
                    
                    374,967COSTS
      AND EXPENSESAmortization
      of capitalized production costs
                    
                    
                    9,550
                    
                    
                    
                    --
                    
                    
                    
                    43,631
                    
                    
                    
                    --Stock
      based compensation
                    
                    
                    244,000
                    
                    
                    
                    24,417
                    
                    
                    
                    952,534
                    
                    
                    
                    1,342,567Professional
      fees
                    
                    
                    250,265
                    
                    
                    
                    10,304
                    
                    
                    
                    336,749
                    
                    
                    
                    38,495Salaries
      and wages
                    
                    
                    25,940
                    
                    
                    
                    12,601
                    
                    
                    
                    104,736
                    
                    
                    
                    38,031Office
      and general
                    
                    
                    47,217
                    
                    
                    
                    13,464
                    
                    
                    
                    88,712
                    
                    
                    
                    55,204Bad
      debt expense
                    
                    
                    49,948
                    
                    
                    
                    --
                    
                    
                    
                    79,948
                    
                    
                    
                    --Rent
                    
                    
                    8,379
                    
                    
                    
                    6,000
                    
                    
                    
                    20,400
                    
                    
                    
                    18,000Production
      advances write down
                    
                    
                    2,771,022
                    
                    
                    
                    --
                    
                    
                    
                    3,071,022
                    
                    
                    
                    --Goodwill
      and intangible assets write down
                    
                    
                    829,958
                    
                    
                    
                    --
                    
                    
                    
                    829,958
                    
                    
                    
                    --Amortization
      of intangible assets
                    
                    
                    --
                    
                    
                    
                    --
                    
                    
                    
                    44,660
                    
                    
                    
                    --TOTAL
      COSTS AND EXPENSES
                    
                    
                    4,326,279
                    
                    
                    
                    66,786
                    
                    
                    
                    5,572,350
                    
                    
                    
                    1,492,297(LOSS)
      INCOME FROM OPERATIONS
                    
                    
                    (4,326,279
                    )
                    
                    
                    129,516
                    
                    
                    
                    (5,136,856
                    )
                    
                    
                    (1,117,330
                    )Interest
      expense
                    
                    
                    38,200
                    
                    
                    
                    44,121
                    
                    
                    
                    106,200
                    
                    
                    
                    153,479NET
      (LOSS) INCOME AND COMPREHENSIVE LOSS
                    
                    $
                    (4,274,479
                    )
                    
                    $
                    85,395
                    
                    
                    $
                    (5,243,056
                    )
                    
                    $
                    (1,270,809
                    )LOSS
      (INCOME) PER WEIGHTED NUMBER OF SHARES OUTSTANDING - BASIC AND
      DILUTED
                    
                    $
                    (0.04
                    )
                    
                    $
                    0.00
                    
                    
                    $
                    (0.05
                    )
                    
                    $
                    (0.02
                    )WEIGHTED
      AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND
    DILUTED
                    
                    
                    105,271,800
                    
                    
                    
                    79,021,539
                    
                    
                    
                    102,308,618
                    
                    
                    
                    72,891,899




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




-5-




RED ROCK PICTURES HOLDINGS, INC. AND
SUBSIDIARIES


CONSOLIDATED
STATEMENT OF CASH FLOWS




Nine
      Months
                      Ended
                      May
      31, 2009
                      (Unaudited)
                    
                    
                    Nine
      Months Ended
                      May
      31, 2008
                      (Unaudited)CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      loss
                    
                    $
                    (5,243,056
                    )
                    
                    $
                    (1,270,809
                    )Adjustments
      to reconcile net loss to net cash (used in) provided by operating
      activities:Stock-based
      compensation expense
                    
                    
                    1,004,320
                    
                    
                    
                    1,342,567Stock
      issued for services provided
                    
                    
                    225,000
                    
                    
                    
                    -Common
      stock issued for accounts payable
                    
                    
                    22,018
                    
                    
                    
                    -Increase
      in allowance for doubtful accounts
                    
                    
                    79,948
                    
                    
                    
                    -Write
      off of production advances
                    
                    
                    3,071,022
                    
                    
                    
                    -Write
      off of goodwill and intangible assets
                    
                    
                    829,958
                    
                    
                    
                    -Interest accrued on convertible notes
                    
                    
                    4,200
                    
                    
                    
                    50,225Amortization of capitalized production costs
                    
                    
                    43,631
                    
                    
                    
                    -Depreciation
      and amortization
                    
                    
                    51,681
                    
                    
                    
                    -Changes
      in operating assets and liabilities:Accounts
      receivable
                    
                    
                    173,994
                    
                    
                    
                    (105,826
                    )Capitalized
      production costs
                    
                    
                    (21,832)
                    
                    
                    
                    -Prepaid
      expenses and deposits
                    
                    
                    10,745
                    
                    
                    
                    -Accounts
      payable and accrued liabilities
                    
                    
                    45,014
                    
                    
                    
                    (12,918)Deferred
      production revenue
                    
                    
                    (126,000)
                    
                    
                    
                    -NET
      CASH PROVIDED BY OPERATING ACTIVITIES
                    
                    
                    170,643
                    
                    
                    
                    3,239CASH
      FLOWS FROM INVESTING ACTIVITIESProduction
      loans and accrued interest
                    
                    
                    (30,000)
                    
                    
                    
                    (53,259
                    )NET
      CASH USED IN INVESTING ACTIVITIES
                    
                    
                    (30,000)
                    
                    
                    
                    (53,259
                    )CASH
      FLOWS FROM FINANCING ACTIVITIESAdvances
      from stockholders
                    
                    
                    -
                    
                    
                    
                    (68,172)Advances
      from related parties
                    
                    
                    (246,575)
                    
                    
                    
                    (106,744
                    )Proceeds
      from senior secured convertible note
                    
                    
                    100,000
                    
                    
                    
                    215,000NET
      CASH PROVIDED BY FINANCING ACTIVITIES
                    
                    
                    (146,575)
                    
                    
                    
                    40,084NET
      DECREASE IN CASH
                    
                    
                    (5,932)
                    
                    
                    
                    (9,936)CASH,
      BEGINNING OF PERIOD
                    
                    
                    5,932
                    
                    
                    
                    9,936CASH,
      END OF PERIOD
                    
                    $
                    -
                    
                    
                    $
                    -




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





-6-





RED
ROCK PICTURES HOLDINGS INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE THREE AND NINE MONTHS ENDED MAY 31, 2009 AND 2008(UNAUDITED)




1.
            NATURE
      OF BUSINESS AND BASIS OF
PRESENTATION





Nature
of Business




As
used in this report, "Red Rock Pictures Holdings, Inc.", "the Company", "us”,
“we," "our" and similar terms include Red Rock Pictures Holdings, Inc. and its
subsidiaries, unless the context indicates otherwise.





Red Rock
Pictures, Inc. was incorporated on August 18, 2006 under the laws of the State
of Nevada and was acquired by Red Rock Pictures Holdings Inc. on August 31,
2006.  The Company engages in the business of developing, financing,
producing and licensing feature-length motion pictures and direct response
infomercials.




On June
6, 2008, the Company entered into a Stock for Stock Exchange Agreement (the
“Exchange Agreement”) with Studio Store Direct, Inc. (“SSD”) and all of the
current SSD Shareholders.  Pursuant to the Exchange Agreement,
the Company acquired 100% of the assets of SSD by issuing 11,000,000 restricted
common shares in exchange for all the issued and outstanding shares of
SSD.  Further, SSD became a wholly owned subsidiary of the
Company.  With the addition of SSD, the Company also operates as a
traditional infomercial production and distribution company.  SSD has
developed a patent pending process for embedding direct response programs
directly onto motion picture DVD’s.  Viewers can access virtual
stores, offering related merchandise for purchase with the simple click of a
mouse or by dialing a toll free number.  SSD’s model provides a
turnkey new revenue solution for major Hollywood studios and independent
distributors.





On
January 8, 2009, the Company announced that it has entered into a definitive
agreement to acquire New York based ComedyNet.TV, Inc. (“ComedyNet”), a leader
in multimedia comedic content distribution.  The transaction was
terminated on May 28, 2009 due to the ComedyNet’s failure to complete its
obligations under the asset purchase agreement.





Basis
of Presentation





Effective
September 1, 2008, the Company determined that it has emerged from its
development stage as is therefore no longer presenting development stage
financial information as such.





The
interim unaudited condensed consolidated financial statements have been prepared
in accordance with accounting principles generally accepted in the United States
of America for interim financial information and with the instructions to
Securities and Exchange Commission, or SEC, Form 10Q and Article 10 of
SEC Regulation S-X. They do not include all of the information and
footnotes required by generally accepted accounting principles, or GAAP, for
complete financial statements. In the opinion of management, all
adjustments and reclassifications considered necessary for a fair and comparable
presentation have been included and are of a normal recurring nature.  The
unaudited condensed consolidated financial statements should be read in
conjunction with the audited consolidated financial statements and notes thereto
included in our Annual Report on Form 10-K for the year ended August 31,
2008.  Operating results for the three and nine months ended May 31,
2009 are not necessarily indicative of the results that may be expected for
future quarters or the year ending August 31, 2009.





Use
of Estimates





The
preparation of our financial statements in accordance with GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the dates of the financial statements and the reported
amounts of net revenue and expenses in the reporting periods.  We regularly
evaluate estimates and assumptions related to allowances for doubtful accounts,
share-based compensation expense, deferred income tax asset valuation
allowances, uncertain tax positions, litigation and other contingencies. 
We base our estimates and assumptions on current facts, historical experience
and various other factors that we believe to be reasonable under the
circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities and the accrual of costs and
expenses that are not readily apparent from other sources. The actual results
experienced by us may differ materially and adversely from our estimates. To the
extent there are material differences between the estimates and the actual
results, future results of operations will be affected.




Revenue
Recognition




The
Company recognizes revenue from television and film productions pursuant to
American Institute of Certified Public Accountants Statement of Position 00-2,
Accounting by Producers or
Distributors of Films(“SOP 00-2”).  The following conditions
must be met in order to recognize revenue under SOP 00-2: (i) persuasive
evidence of a sale or licensing arrangement exists; (ii) the program is complete
and has been delivered or is available for immediate and unconditional delivery;
(iii) the license period of the arrangement has begun and the customer can begin
its exploitation, exhibition or sale; (iv) the arrangement fee is fixed or
determinable; and (v) collection of the arrangement fee is reasonably assured.
Income from film productions is derived from foreign, home video and television
sales of third-party films for which production and/or prints and advertising
have been financed by the Company. A significant portion of participation income
is paid to the Company based on the timetable associated with participation
statements generated by third party processors, and is not typically known by
the Company on a timely basis.  This revenue is consequently not
recognized until the amount is either known or reasonably estimable or until
receipt of the statements from the third parties.   When the
Company is entitled to royalties based on gross receipts, revenue is recognized
before deduction of fees, which are included as a component of cost of revenue.
Cash received in advance of meeting the revenue recognition criteria described
above is recorded as deferred production revenue.






-7-






Production
Costs for Feature Films




Production
costs are accounted for pursuant to SOP No. 00-2.  The cost of
production for movies, including direct costs, production overhead and interest
are capitalized and amortized using the individual-film-forecast method under
which such costs are amortized for each program in the ratio that revenue earned
in the current period for such program bears to management’s estimate of the
ultimate revenues to be realized from all media and markets for such
program.  Management regularly reviews, and revises when necessary,
its ultimate revenue estimates on a title-by-title basis, which may result in a
change in the rate of amortization applicable to such title and/or a write-down
of the value of such title to estimated fair value.  These revisions
can result in significant quarter-to-quarter and year-to-year fluctuations in
film write-downs and rates of amortization.  If a total net loss is
projected for a particular title, the associated film and television costs are
written down to estimated fair value.  All exploitation costs,
including advertising and marketing costs are expensed as incurred.





Production
Costs for Infomercials





The cost
of production for infomercials for our customers, including direct costs,
production overhead and interest are capitalized and expensed upon delivery to
our customers.




Valuation
of Goodwill and other Intangible Assets




We review
goodwill for impairment annually and whenever events or changes in circumstances
indicate the carrying value of an asset may not be recoverable in accordance
with FASB Statement No. 142, Goodwill and Other Intangible
Assets. The provisions of FASB Statement No. 142 require that a
two-step impairment test be performed on goodwill.  In the first step,
we compare the fair value of our reporting unit to its carrying value. Our
reporting unit is consistent with the operating and reportable segment
identified in the notes to our consolidated financial statements. We determine
the fair value of our reporting unit using a combination of the income approach
and market capitalization approach. If the fair value of the reporting unit
exceeds the carrying value of the net assets, goodwill is not impaired and we
are not required to perform further testing. If the carrying value of the net
assets exceeds the fair value of the reporting unit, then we must perform the
second step in order to determine the implied fair value of the reporting unit’s
goodwill and compare it to the carrying value of the reporting unit’s goodwill.
If the carrying value of the reporting unit’s goodwill exceeds its implied fair
value, then we must record an impairment charge equal to the
difference.




Under the
income approach, we calculate the fair value of a reporting unit based on the
present value of estimated future discounted cash flows. Under the market
capitalization approach, valuation multiples are calculated based on operating
data from publicly traded companies within our industry. Multiples derived from
companies within our industry provide an indication of how much a knowledgeable
investor in the marketplace would be willing to pay for a company. These
multiples are applied to the operating data for the reporting unit to arrive at
an indicated fair value. Significant management judgment is required in the
forecasts of future operating results that are used in the estimated future
discounted cash flow method of valuation. The estimates we have used are
consistent with the plans and estimates that we use to manage our business. We
base our fair value estimates on forecasted revenue and operating costs along
with business plans. Our forecasts consider the effect of a number of factors
including, but not limited to, the effect of the roll out of new products,
securing new customers, the effect of the transition to a new contract
manufacturer, the ability to reduce product costs and the impact of continued
cost savings measures within operating expenses. As a result of these
calculations, management determined that goodwill was impaired and the second
step of the goodwill impairment test was performed to measure the amount of the
impairment, resulting in the recognition of impairment to goodwill and
intangible assets of $829,928. No impairment losses were recognized during 2008,
and we had no goodwill or other intangible assets remaining on our balance sheet
at May 31, 2009.




Stock-Based
Compensation




The
Company accounts for stock-based compensation in accordance with SFAS
No. 123 (Revised 2004), Share-Based Payment, (SFAS
No. 123R). Under the fair value recognition provision of SFAS
No. 123R, stock-based compensation cost is estimated at the grant date
based on the fair value of the award. The Company estimates the fair value of
stock options granted using the Black-Scholes-Merton option pricing model. The
fair value of restricted stock awards is based on the closing market price of
the Company’s common stock on the date of grant. The fair value of options and
awards, adjusted for estimated forfeitures, is amortized on a straight-line
basis over the requisite service period of the award, which is generally the
vesting period.







-8-




Recent
Accounting Pronouncements





In
December 2008, the FASB issued FSP No. FAS 140-4 and FIN 46(R)-8,
Disclosures by Public Entities
(Enterprises) about Transfers of Financial Assets and Interests in Variable
Interest Entities. FSP No. FAS 140-4 and FIN 46(R)-8 requires
enhanced disclosures about transfers of financial assets and interests in
variable interest entities. The FSP was effective for interim and annual periods
ending after December 15, 2008. Since the FSP requires only additional
disclosures concerning transfers of financial assets and interests in variable
interest entities, the adoption of the FSP did not affect the Company’s
financial condition, results of operations or cash flows.





In
January 2009, the FASB issued FSP EITF 99-20-1, Amendments to the Impairment
Guidance of EITF No. 99-20.The FSP amends EITF No. 99-20, by
eliminating the requirement that a holder’s best estimate of cash flows be based
upon those that “a market participant” would use. Instead, the FSP requires that
an other-than-temporary impairment be recognized as a realized loss through
earnings when it is “probable” there has been an adverse change in the holder’s
estimated cash flows from the cash flows previously projected, which is
consistent with the impairment models in FASB Statement No. 115, Accounting for Certain Investments
in Debt and Equity Securities.The FSP was effective for interim and
annual reporting periods ending after December 15, 2008, and has been
applied prospectively. The adoption of the FSP did not affect the Company’s
financial condition, results of operations or cash flows.





In
April 2009, the FASB issued FSP No. FAS 115-2 and FAS 124-2, Recognition and Presentation of
Other-Than Temporary Impairments.This FSP amends the
other-than-temporary impairment guidance for debt securities and improves the
presentation and disclosure of other-than-temporary impairments on debt and
equity securities in the financial statements. The FSP is effective for interim
and annual periods ending after June 15, 2009, with early adoption
permitted for periods ending after March 15, 2009. The Company is currently
evaluating the disclosure requirements that adoption of the FSP will have on its
condensed consolidated financial statements, however; the adoption will not
affect the Company’s financial condition, results of operations or cash
flows.
 
 In
April 2009, the FASB issued FSP No. FAS 157-4, Determining Fair Value When the
Volume and Level of Activity for the Asset or Liability Have Significantly Decreased
and Identifying Transactions That are Not Orderly.This FSP provides
additional guidance for estimating fair value in accordance with SFAS
No. 157 and includes guidance on identifying circumstances that indicate a
transaction is not orderly. The FSP is effective for interim and annual periods
ending after June 15, 2009, and shall be applied prospectively. The Company
is currently evaluating the impact of this FSP; however, it believes the
adoption will not have a material effect on its condensed consolidated financial
statements.
 
 In May
2009, the FASB issued Statement No. 165, Subsequent Events (“SFAS
165”).  SFAS 165 requires entities to disclose the date through which
they have evaluated subsequent events and whether the date corresponds with the
release of their financial statements.  Effective for interim and
annual periods ending after June 15, 2009, SFAS 165 will become effective in the
next reporting quarter.  SFAS 165 should not have an impact on our
financial condition, results of operations or cash flows.
 
 In June
2009, the FASB issued Statement No. 168, The FASB Accounting Standards
Codification and the
Hierarchy of Generally Accepted Accounting Principles (“SFAS
168”).  SFAS 168 will become the single source of authoritative
nongovernmental U.S. generally accepted accounting principles (“GAAP”),
superseding existing FASB, American Institute of Certified Public Accountants
(“AICPA”), Emerging Issues Task Force (“EITF”), and related accounting
literature.  SFAS 168 reorganizes the thousands of GAAP pronouncements
into roughly 90 accounting topics and displays them using a consistent
structure.  Also included is relevant Securities and Exchange
Commission guidance organized using the same topical structure in separate
sections.  SFAS 168 will be effective for financial statements issued
for reporting periods that end after September 15, 2009.  This will
have an impact on the Company’s financial statements since all future references
to authoritative accounting literature will be references in accordance with
SFAS 168.




2.
            GOING
      CONCERN




The
Company's financial statements are presented on a going concern basis, which
contemplates the realization of assets and satisfaction of liabilities in the
normal course of business.  The Company has experienced losses from
operations since inception that raise substantial doubt as to its ability to
continue as a going concern.




The
Company's existence is dependent upon management's ability to develop profitable
operations and resolve its liquidity problems.  Management anticipates the
Company will attain profitable status and improve its liquidity through
continued business development and additional equity investment in the
Company.




The
financial statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amounts
and classification of liabilities that may result from the possible inability of
the Company to continue as a going concern.





3.
            NET
      LOSS PER SHARE





Basic net
loss per share is computed by dividing loss available to common stockholders by
the weighted-average number of common shares outstanding for the period. In
computing diluted net loss per share, the weighted average number of shares
outstanding is adjusted to reflect the effect of potentially dilutive
securities.  There were no dilutive securities for the nine months
ended May 31, 2009.






-9-







4.
            CUSTOMER
      CONCENTRATION





A
majority of our revenue was recorded from one customer and a related party,
National Lampoon, Inc., and its subsidiaries.  We generated $Nil and
$196,312 in revenue, or 0% and 100% of total revenue, for the three months ended
May 31, 2009 and 2008, respectively.  For the nine month period ending
May 31, 2009 and 2008, we generated $435,494 and $374,966 in revenue, or 58% and
100% of total revenue, from National Lampoon, Inc. respectively.





5.
            ADVANCES
      TO RELATED PARTY




These
advances are unsecured, non interest bearing and due on demand.  As of May
31, 2009 and August 31, 2008, advances to related parties were $Nil and $76,798,
respectively. These advances were made to a company controlled by the
spouse of a director and shareholder of the Company.  In May 2009, due
to the poor performance of the company, the Company wrote off the balance and
recorded a bad debt expense of $37,298.




6.
            CAPITALIZED
      PRODUCTION COSTS





All
capitalized production costs relate to projects in development.  The
Company expects 100% of the balance of capitalized production costs will be
amortized or expensed within the next year.





The table
below displays the activity during the nine months ended May 31,
2009:





For
      the Nine
                                      Months
      Ended
                                      May
      31, 2009Opening
      balance, August 31, 2008
                                  
                                  $
                                  134,723Production
      costs incurred and capitalized
                                  
                                  
                                  21,832Expense
      related to delivered projects and reclassified to cost of
      sales
                                  
                                  
                                  (43,631)Closing
      unamortized balance, May 31, 2009
                                  
                                  $
                                  112,924




7.
            PRODUCTION
      LOANS AND ACCRUED INTEREST




The
Company provides production financing to National Lampoon, Inc., a corporate
shareholder ("NL") that shares certain directors and officers of Red Rock
Pictures Holdings, Inc.  The production advances bear interest at a
rate of 10% per annum, has a security interest in the film to the extent of the
actual amount of the funding as long as there is an unpaid balance on the loan
and are repayable from 100% of any and all net revenues from each
picture.  The financing agreements allows for the Company to advance
up to $2,000,000 per picture production.




Outstanding
production loans to and accrued interest with NL consists of the following as of
May 31, 2009 and August 31, 2008 was:




Production
                                
                                As
      of May 31, 2009
                                
                                
                                As
      of August 31, 2008Bag
      Boy Productions, Inc.
                                
                                $
                                -
                                
                                
                                $
                                1,077,635Ratko
      Productions, Inc.
                                
                                
                                -
                                
                                
                                
                                2,163,992Endless
      Bummer, LLC
                                
                                
                                30,000
                                
                                
                                
                                -Total
                                
                                
                                30,000
                                
                                
                                
                                3,241,627Less
      current portion
                                
                                
                                -
                                
                                
                                
                                (1,396,470
                                )Long
      term portion of production loans and interest
                                
                                $
                                30,000
                                
                                
                                $
                                1,845,157




In 2006
through 2008, the Company invested in two films titled Bag Boy and
Ratko.   Per the financing agreement with National Lampoon, Inc.,
the payments were to be made from the proceeds received from the film over an
estimated revenue cycle of three years.  The payments were to be
distributed as follows:





·
            National
      Lampoon was to receive a 20% distribution
fee.


·
            National
      Lampoon was to receive recoupment of all prints and advertising expenses
      incurred in connection with the distribution of the
    picture.


·
            The
      remaining gross receipts were to be split equally between the Company and
      National Lampoon until such time as the Company has recouped its
      investment entirely.






-10-






During
the three months ended May 31, 2009, the Company requested National Lampoon,
Inc. provide and discuss updated performance information on both the Bag Boy and
Ratko films and their ability to repay the production loans and accrued
interest.  Based on our review of the information, it was determined
that the films will be unable to repay the production loans and accrued
interest.  We therefore recorded a charge of $2.4 million and $2.7
million during the three and nine months ended May 31, 2009,
respectively.





Endless
Bummer Productions LLC - Per a deal memorandum effective March 18, 2009 between
Red Rock Pictures Holding, Inc., National Lampoon, Inc., 4Fini, Inc. Chris Kaman
and Endless Bummer Productions, LLC, the Company has an obligation to invest in
an upcoming feature length motion picture title Endless Bummer.  In
April 2009, the Company invested $30,000 in the film.





8.
            PRINT
      AND ADVERTISING FUNDING




During
the third quarter of fiscal year 2008, the Company entered into an agreement
with NL whereby the Company agreed to advance funding to NL for print and
advertising services (P&A) for certain titles released by NL for total
advances of up to $2,000,000.  The Company will be entitled to recoup
its investment plus a premium of twenty percent (20%) of the amount
funded.  In addition, the Company will be entitled to a five percent
(5%) of all net contingent proceeds from the picture.





9.
            INTANGIBLE
      ASSETS AND GOODWILL




The
Company acquired the direct response marketing business of Studio Store Direct,
Inc. in Fiscal 2008.  The intangible asset values related to this
acquisition are being amortized straight-line over a five year
period:




The
changes in the carrying amount of intangible assets were as
follows:




As
      of
                              May
      31,
                              2009
                            
                            
                            As
      of
                              August
      31,
                              2008Intangible
      assets at beginning of period
                            
                            $
                            424,280
                            
                            
                            $
                            -Additions
                            
                            
                            -
                            
                            
                            
                            446,611Amortization
                            
                            
                            (67,041
                            )
                            
                            
                            (22,331
                            )Impairments
                            
                            
                            (379,620
                            )
                            
                            
                            -Total
                            
                            $
                            --
                            
                            
                            $
                            424,290





In
accordance with Company policy, the intangible assets assigned to the Studio
Store Direct reporting unit was reviewed for impairment in the third quarter of
Fiscal 2009.  The Company was declined a patent on the completed
technology acquired during the acquisition.  As a result of the
decline, an intangible asset charge of $379,620 was recorded during the three
and nine months ended May 31, 2009.  This reduced the carrying amount
of intangible assets related to the Studio Store Direct reporting unit to $Nil
at May 31, 2009.





The
changes in the carrying amount of goodwill were as follows:




As
      of
                                May
      31,
                                2009
                              
                              
                              As
      of
                                August
      31,
                                2008Goodwill
      at beginning of period
                              
                              $
                              450,338
                              
                              
                              $
                              -Additions
                              
                              
                              -
                              
                              
                              
                              450,338Impairments
                              
                              
                              (450,338
                              )
                              
                              
                              -Total
                              
                              $
                              --
                              
                              
                              $
                              450,338





Goodwill
was assigned to the Studio Store Direct reporting unit.  The Company’s
reporting unit, which are one level below the single reportable segment, are
identified based upon the availability of discrete financial information and
senior management’s regular review of these units.  Goodwill is
assessed annually at the reporting unit level or more frequently if
circumstances indicate that goodwill might be impaired.  The goodwill
impairment test is a two-step process.  In the first step, the Company
compares the fair value of a reporting unit with its carrying amount, including
goodwill.  If the carrying amount of a reporting unit exceeds its fair
value, the second step of the goodwill impairment test shall be performed to
measure the amount of impairment loss.  In the second step, the
Company compares the implied fair value of the reporting unit’s goodwill with
the carrying amount of that goodwill.






-11-






In
accordance with Company policy, the goodwill assigned to the Studio Store Direct
reporting unit was tested for impairment in the third quarter of Fiscal
2009.  The Company used a discounted cash flow model to determine the
fair value of its reporting units.  Due to the economic downturn and
its impact on consumer and enterprise spending trends, forecasted cash flows
were reduced.





As a
result of the declines in forecasted cash flows, a goodwill impairment charge of
$450,338 was recorded during the three and nine months ended May 31,
2009.  This reduced the carrying amount of goodwill related to the
Studio Store Direct reporting unit to $Nil at May 31, 2009.




10.
            ADVANCES
      FROM RELATED PARTIES




On June
9, 2007, the Company entered into loan agreements with the N. Williams Family
Investments, L.P. and Daniel Laikin (collectively, “Williams-Laikin”) for
$1,000,000 each for a total of $2,000.000.  The loan agreement with
Daniel Laikin was subsequently amended from $1,000,000 to $900,000.





The
proceeds of these loans are to fund the Company’s obligation to advance
production costs to National Lampoon for a motion picture
production.  The loans are secured by the profit participation rights
of the films.  The loans bear seven percent (7%) interest and are to
be repaid out of the proceeds of equity raised of the Company or sales efforts
of the motion picture. In addition to the interest on these advances,
Williams-Laikin are entitled to receive five percent (5%) of the twenty five
percent (25%) of all net profits from the distribution of the respective
pictures specified in their agreement received by Red Rock Pictures Holdings
Inc.





The total
balance outstanding, including accrued interest, was $1.8 million and $2.0
million at May 31, 2009 and August 31, 2008,
respectively.





11.
            SENIOR
      SECURED CONVERTIBLE DEBENTURE




On
December 28, 2008, the Company entered into a twelve month $100,000 senior
secured convertible debenture agreement with Emerald Asset Advisors, LLC (“Note
Holder”).  The one year term loan bears interest at 10% per annum and
interest accrues and is payable in cash upon maturity provided that the elected
conversion to common shares does not occur.  At any time or times on
or after December 28, 2008, the Note Holder shall be entitled to convert any
portion of the outstanding and unpaid amount into fully paid and nonassessable
shares of Common Stock at a conversion price of $0.06 per common
share.  From and after the occurrence of an event of default, the
interest rate shall be increased to twenty percent (20.0%) until the date of
such cure.




12.
            COMMITMENTS
      AND CONTINGENCY





On
October 27, 2008, we and our wholly owned subsidiary Studio Store Direct, Inc.
(“SSD”), were served with a summons and complaint related to a contract action
brought against the Company by Livon Laboratory, Inc. (“LivOn”).





The
breach of claim by LivOn is related to contract entered into between SSD, and
LivOn for the production of an infomercial to be used as a direct
response-marketing tool in conjunction with the sale of LivOn’s LypoSpheric
Vitamin C.  LivOn requested relief in excess of $60,000 for the
alleged material breach of the contract between SSD and LivOn.  In
April 2009, LivOn paid the Company $15,000, and the Company wrote off the
remaining balance owed by LivOn of $33,450, to settle the lawsuit.





13.
            EQUITY




On
November 17, 2008, the Board of Directors authorized the Company to issue 5
million shares to Reno Rollé, the Company’s President and Chief Executive
Officer, at the closing market price on November 17, 2008.  The shares
were issued per Mr. Rollé’s employment agreement with the
Company.   The issuance of shares was recorded as an expense of
$200,000 and is included in stock-based compensation expense in the accompanying
consolidated statements of loss and comprehensive loss.




On
November 17, 2008, the Board of Directors authorized the Company to issue
1,000,000 shares to a Director for services rendered.  The shares were
issued at the closing market price on November 17, 2008.  The issuance
of shares was recorded as an expense of $40,000 and is included in stock-based
compensation expense in the accompanying consolidated statements of loss and
comprehensive loss.





On
November 25, 2008, the Company entered into an agreement with one of its vendors
to issue shares in lieu of a cash payment for expenses incurred and
outstanding.   The Company issued 166,000 shares of common stock
to satisfy an outstanding balance owed of approximately $22,000.





On
December 10, 2008, the Board of Directors authorized the Company to issue
1,000,000 shares to an employee for services rendered.  The shares
were issued at the closing market price on December 10, 2008.  The
issuance of shares was recorded as an expense of $30,000 and is included in
stock-based compensation expense in the accompanying consolidated statements of
loss and comprehensive loss.






-12-





On
December 10, 2008, the Board of Directors authorized the Company to issue
1,000,000 shares to Reno Rollé, the Company’s President and Chief Executive
Officer, at the closing market price on December 10, 2008.  The shares
were issued per Mr. Rollé’s employment agreement with the
Company.   The issuance of shares was recorded as an expense of
$30,000 and is included in stock-based compensation expense in the accompanying
consolidated statements of loss and comprehensive loss.





On April
10, 2009, the Board of Directors authorized the Company to issue 2,000,000
shares to Reno Rollé, the Company’s President and Chief Executive Officer, at
the closing market price on April 10, 2009.  The shares were issued
per Mr. Rollé’s employment agreement with the Company.   The
issuance of shares was recorded as an expense of $9,000 and is included in
stock-based compensation expense in the accompanying consolidated statements of
loss and comprehensive loss.





On April
10, 2009, the Board of Directors authorized the Company to issue 1,000,000 and
166,000 shares to two separate consultants for professional services
rendered.  The shares were issues for services rendered at a market
value based on an arms length agreement.  The issuance of shares was
recorded as an expense of $225,000 and is included in professional fees in the
accompanying consolidated statements of loss and comprehensive
loss.





14.
            SUPPLEMENTAL
      CASH FLOW INFORMATION




During
the nine months ended May 31, 2009 and 2008, there was no interest or taxes paid
by the Company.




15.
            SHARE
      BASED COMPENSATION





A summary
of stock option activity is as follows:




Number of
                                  shares
                                
                                
                                Weighted
                                  average
                                  exercise
                                  price
                                
                                Weighted average
                                  remaining
                                  contractual term
                                  (in
      years)Outstanding
      at August 31, 2008
                                3,350,000
                                
                                
                                $
                                0.07Granted
                                200,000
                                
                                
                                
                                0.01Expired
                                (300,000
                                )
                                
                                
                                --Outstanding
      at May 31, 2009
                                3,250,000
                                
                                
                                $
                                0.07
                                
                                4.0Vested
      and expected to vest at May 31, 2009
                                3,133,333
                                
                                
                                $
                                0.07
                                
                                4.0Exercisable
      at May 31, 2009
                                3,133,333
                                
                                
                                $
                                0.07
                                
                                4.0




During
the three and nine months ended May 31, 2009, the Company recognized total
compensation expense of $244,000 and $952,534 respectively and is disclosed
separately in the accompanying consolidated statements of loss and comprehensive
loss.





16.
            INCOME
      TAXES





As of May
31, 2009, there were no differences between financial reporting and tax bases of
assets and liabilities.  The Company will have tax losses available to
be applied against future years' income as result of the losses
incurred.  However, due to the losses incurred in the period and
expected future operating results, management determined that it is more likely
than not that the deferred tax asset resulting from the tax losses available for
carry forward will not be realized through the reduction of future income
tax payments.  Accordingly a 100% valuation allowance has been
recorded for deferred income tax assets.





17.
            SUBSEQUENT
      EVENTS




On July
3, 2009, Steve Handy resigned as a Chief Financial Officer and Secretary of Red
Rock Picture Holdings, Inc. (the "Company"). Mr. Handy's resignation was not a
result of any disagreements relating to the Company's operations, policies or
practices.






-13-






ITEM 2.  MANAGEMENT’S DISCUSSION OR PLAN
OF OPERATION





Certain
statements contained in this quarterly filing, including, without limitation,
statements containing the words “believes”, “anticipates”, “expects” and words
of similar import, constitute forward-looking statements. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors that
may cause the actual results, performance or achievements of the Company, or
industry results, to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements.





Such
factors include, among others, the following: international, national and local
general economic and market conditions: demographic changes; the ability of the
Company to sustain, manage or forecast its growth; the ability of the Company to
successfully make and integrate acquisitions; raw material costs and
availability; new product development and introduction; existing government
regulations and changes in, or the failure to comply with, government
regulations; adverse publicity; competition; the loss of significant customers
or suppliers; fluctuations and difficulty in forecasting operating results;
changes in business strategy or development plans; business disruptions; the
ability to attract and retain qualified personnel; the ability to protect
technology; and other factors referenced in this and previous
filings.





Given
these uncertainties, readers are cautioned not to place undue reliance on such
forward-looking statements. The following discussion and analysis should be read
in conjunction with our Financial Statements and notes appearing elsewhere in
this report.





Plan of
Operation




Overview





We are
engaged in the finance, production, distribution and marketing of filmed
entertainment products, including theatrical motion pictures, television
programs, home video products, and digitally delivered entertainment and
media.  We were founded in 2006 to leverage the experience and
expertise of its management team and exploit emerging opportunities in
traditional and digital media and entertainment. Our primary business model
centers around the control of entertainment properties that we may develop,
acquire, produce and/or finance.  We will also be involved in the
funding of motion pictures and other entertainment and media properties, both
for our own library and development activities as well as in partnership with
outside producers.





Proposed
Milestones to Implement Business Operations





During
the next twelve months, we expect to take the following steps in connection with
the development of our business and the implementation of our plan of
operations:





The
Company will continue to enter into agreements with strategic partners in the
film development and production industry.  These partners will include film
production entities such as National Lampoon, Inc., a current shareholder of the
Company.  The Company has entered into agreements to fund and co-fund
production of a slate of National Lampoon branded moderately budgeted
films.  These films will be distributed by and through National Lampoon,
focused primarily on the college audience, but marketed and distributed to the
general population.  The Company intends to fund P&A (Prints and
Advertising) on these pictures to promote a limited release, less than 50
screens on the initial release.  In the event it is decided to release the
picture on additional screens, the Company may either increase funding or work
with a P&A lender to provide the additional funding required.  The
terms of these agreements call for a ten percent (10%) annual interest rate and
twenty-five (25%) percent net profit participation in the motion pictures after
recoupment of all costs and distribution fees for funds advanced for film
financings.   For funds advanced for P&A, the terms include a
twenty percent (20%) return premium and a profit participation of up to ten
percent (10%) of net profits in the motion pictures.




The
Company will begin building and formalizing relationship with the talent
community.  The Company intends to use our common shares as incentives to
build these relationships.  The Company intends to work with top talent to
fund and produce projects that they bring to the Company.  These are
typically moderately budgeted projects which fall below the typical studio
interest.




Another
area that the Company will pursue as part of our plan is the acquisition of
existing film properties and film and media related businesses.  The
Company will work to build a library of films to leverage across all
distribution platforms.  The Company feels that as distribution platforms
continue to expand, there are opportunities to exploit content and generate
revenue in a number of ways.




Their
compensation is determined as a percentage of the purchase price of the
acquisition.  The company has evaluated a number of strategic
acquisitions and continues to do so.




The
Company will also hire and train a limited amount of additional staff, including
management, marketing, and administrative personnel. The number of employees
hired will be dependent upon a variety of factors including our progress in
implementing our business plan and available capital. The Company believes that
the hiring of employees will be an ongoing process during the Company’s
existence.






-14-




Results
of Operations





Comparison
of the Three Months Ended May 31, 2009 and 2008





Revenue




Revenue
was $Nil and $196,302 for the three months ended May 31, 2009 and 2008,
respectively.  We wrote down the balance of our capitalized production
loans (See Note 7) and therefore stopped recording the related interest
revenue.  Total interest revenue on production advances was $Nil and
$90,476 for the three months ended May 31, 2009 and 2008,
respectively.  Additionally, the Company recorded Distribution
financing fee revenues of $Nil and $105,826 for the three months ended May 31,
2009 and 2008, respectively.  The revenue in 2008 was related to one
contract which has expired.  No similar activity occurred in
2009.





Costs
and Expenses




Cost and
expenses was $4.3 million and $110,907 for the three months ended May 31, 2009
and 2008, respectively.  This increase of $4.2 million was due to the
increase in non-cash expenses including the impairment of goodwill and
intangible assets of $829,928,  impairment of production loan advances
of $2.8 million, stock based employee compensation of $244,000, stock issued for
payment of professional services rendered of $225,000 and an increase in bad
debt expense of $49,972.  The remaining difference is due to normal
fluctuations in operating expenses based on business operations.





Income
Taxes





During
the three months ended May 31, 2009 and 2008, respectively, we had no provision
for income taxes due to the net operating losses incurred.




Comparison
of the Nine Months Ended May 31, 2009 and 2008





Revenue




Revenue
was $435,494 and $374,967 for the nine months ended May 31, 2009 and 2008,
respectively. The increase of revenue of $60,527 was due to the completion of
one infomercial project that generated revenue of $183,650.  In
addition, during the third quarter of fiscal year 2008, the Company entered into
an agreement to provide print and advertising services.  This
agreement generated $Nil and $69,844 in revenue during the comparative
period.





Costs
and Expenses




Cost and
expenses was $5.6 million and $1.6 million for the nine months ended May 31,
2009 and 2008, respectively.  This increase of $4.0 million was due to
the increase in non-cash expenses including the impairment of goodwill and
intangible assets of $829,928, impairment of production loan advances of $3.1
million, stock based employee compensation of $952,000, stock issued for payment
of professional services rendered of $225,000 and an increase in bad debt
expense of $79,948. The remaining difference is due to normal fluctuations in
operating expenses based on business operations.





Income
Taxes





During
the nine months ended May 31, 2009 and 2008, respectively, we had no provision
for income taxes due to the net operating losses incurred.





Liquidity
and Capital Resources




As of May
31, 2009 we had no cash and a working capital deficiency of $2.3
million.  A substantial amount of cash will be required in order to
continue operations over the next twelve months.  Based upon our
current cash and working capital deficiency, we will not be able to meet our
current operating expenses and will require additional capital.  We
have been in discussion with, and we continue to seek, private investors in
hopes of raising enough capital to efficiently operate our
business.





Our cash
flows provided by operating activities was $170,643 reflecting the increase in
our accounts receivable and the recording of revenue and expenses associated
with the delivery of an infomercial project during the
year.





Our cash
flows used in investing activities was $30,000.   The balance
reflects an increase in both production loans and print and advertising funding
and related interest.  The Company expects to see some payments on the
loans and print and advertising funding during the second half of fiscal year
2009.






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Our cash
flows from financing activities represent activity with a related party to fund
print and advertising and production loans.





On June
9, 2007, the Company entered into loan agreements with the N. Williams Family
Investments, L.P. and Daniel Laikin (”) for $1,000,000 each for a total of
$2,000.000.  The loan agreement with Daniel Laikin was subsequently
amended from $1,000,000 to $900,000.  The Company is currently in
default under the terms of these loan agreements.




On April
7, 2009, the Company entered into an asset purchase agreement to purchase and
assume certain assets of ComedyNet.TV, Inc. (“ComedyNet”), a Delaware
corporation. Under the terms of the Agreement, the Company agreed to issue
50,000,000 shares of common stock, par value $0.001per share (the “Common
Stock”) in consideration for the assets of ComedyNet. It was agreed that an
additional 9,000,000 shares of Common Stock would be issued to ComedyNet in
exchange for an additional investment of $150,000 and an additional 9,000,000
shares of Common Stock would be issued upon an investment of
$350,000.




ComedyNet
arranged an initial investment of $1,000,000 into the Company by a third-party
investor to be funded in separate tranches.  An initial investment of
$100,000 was delivered to the Company in the form of a Secured Convertible Note
which is convertible at $0.06 per share with a ten (10%) percent interest
rate.  The Note Holder is entitled to convert any portion of the
outstanding and unpaid amount into fully paid and nonassessable shares of Common
Stock at a conversion price of $0.06 per common share.




An
additional $150,000 was to be delivered to the Company upon  the
filing of a Form S-1 Registration Statement for the underlying Common Stock
issued to ComedyNet pursuant to the Agreement with an additional $50,000 funded
upon the Securities and Exchange Commission (“SEC”) declaring effectiveness of
the Registration Statement. In addition, within thirty days of the closing of
the Agreement, the third party investor agreed to fund an additional $200,000 to
be used for production of an infomercial campaign.  The funds
generated from the infomercial campaign would be paid first to the Company until
100% of all verifiable direct out of pocket expenses incurred by the Company in
connection with the infomercial has been recouped, then to the investor until
the investor has recouped 100% of the infomercial investment in full, a
management fee shall be paid to the Company equal to 3% of the adjusted gross
revenue, and a commission equal 15% of all revenue generated in perpetuity for
every customer acquired as a result of the Company’s marketing shall be paid to
the Company, 1/3rd of
which (5% of Gross) shall be immediately paid to Investor upon the Company’s
receipt thereof in return for its investment. In addition the investor was
granted a right of first refusal to fund all future infomercial projects of the
Company.




In
addition, the Company also executed a consulting agreement with Mark Graff (the
“Consultant”), the terms of which were to become effective upon the funding of
$150,000 and filing of the S-1 Registration Statement with the
SEC.  The Consultant was to be paid $5,000 per month for a period of
six months and was to have the exclusive right to sell and distribute the
ComedyNet programming catalog to Broadcast, cable and other ancillary markets in
North America for a 2 year term and shall be entitled to a 30% distribution fee
from all sales.




ComedyNet
is an on-demand digital programming network bringing together the creative
community of comedians, comedy writers, animators, videographers, cartoonists
and raconteurs. The company attracts the community of “funny” by providing the
tool sets, production, post production, stages, live studio and Club settings
for the advancement of the comedic arts, while also providing the audience reach
though distribution on all digital media platforms.




Comedians
work as producer/writers/performers utilizing ComedyNet’s in-house production
and post-production facilities.  ComedyNet also relies on vetted
submissions from the online community, college campuses, film festivals and
various competitions.  Beyond production and submissions ComedyNet
also actively acquire additional materials such as TV/Film libraries, special
events, etc.  ComedyNet also produces stand-up comedy at various clubs
nationwide.




The
transaction was terminated on May 28, 2009 due to the ComedyNet’s failure to
complete its obligations under the asset purchase agreement specifically with
regard to the funding set forth above.





Based
upon the above we have not been able to raise the capital expected to pursue our
business plan. We are seeking advice from investment professionals on how to
obtain additional capital. We will need to raise additional capital to continue
our operations and there is no assurance that we will be successful in raising
the needed capital. Currently we have no material commitments for capital
expenditures.





Critical
Accounting Policies




Red
Rock’s financial statements and related public financial information are based
on the application of accounting principles generally accepted in the United
States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and
subjective interpretations of accounting principles that have an impact on the
assets, liabilities, revenues and expense amounts reported. These estimates can
also affect supplemental information contained in our external disclosures
including information regarding contingencies, risk and financial condition. We
believe our use if estimates and underlying accounting assumptions adhere to
GAAP and are consistently and conservatively applied. We base our estimates on
historical experience and on various other assumptions that we believe to be
reasonable under the circumstances. Actual results may differ materially from
these estimates under different assumptions or conditions. We continue to
monitor significant estimates made during the preparation of our financial
statements.






-16-






Our
significant accounting policies are summarized in Note 3 of our annual financial
statements filed on Form 10-K and dated December 15, 2008.  While all these
significant accounting policies impact its financial condition and results of
operations, Red Rock views certain of these policies as critical. Policies
determined to be critical are those policies that have the most significant
impact on the Company’s consolidated financial statements and require management
to use a greater degree of judgment and estimates. Actual results may differ
from those estimates. Our management believes that given current facts and
circumstances, it is unlikely that applying any other reasonable judgments or
estimate methodologies would cause effect on our consolidated results of
operations, financial position or liquidity for the periods presented in this
report.





ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS





The
Company is not subject to certain market risks, including changes in interest
rates and currency exchange rates.




ITEM 4. CONTROLS AND
PROCEDURES




a) Evaluation of Disclosure Controls
and Procedures. Our Chief Executive Officer/Chief Financial Officer
evaluated the effectiveness of our disclosure controls and procedures as of the
end of the period covered by this report. Based on that evaluation, our Chief
Executive Officer/Chief Financial Officer concluded that our disclosure controls
and procedures as of the end of the period covered by this report were effective
such that the information required to be disclosed by us in reports filed under
the Exchange Act is (i) recorded, processed, summarized and reported within the
time periods specified in the SEC's rules and forms and (ii) accumulated and
communicated to our Chief Executive Officer/Chief Financial Officer, as
appropriate to allow timely decisions regarding disclosure. A controls system
cannot provide absolute assurance, however, that the objectives of the controls
system are met, and no evaluation of controls can provide absolute assurance
that all control issues and instances of fraud, if any, within a company have
been detected.




Our Chief
Executive Officer/Chief Financial Officer is responsible for establishing
and maintaining adequate internal control over financial reporting (as defined
in Rule 13a-15(f) under the Exchange Act). 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. Furthermore, smaller reporting companies face additional
limitations.  Smaller reporting companies employ fewer individuals and
find it difficult to properly segregate duties.  Often, one or two
individuals control every aspect of the Company's operation and are in a
position to override any system of internal control.  Additionally,
smaller reporting companies tend to utilize general accounting software packages
that lack a rigorous set of software controls.




Our Chief
Executive Officer/Chief Financial Officer evaluated the effectiveness of the
Company's internal control over financial reporting as of May 31, 2009. In
making this assessment, our Chief Executive Officer/Chief Financial
Officer used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO) in Internal Control - Integrated
Framework.  Based on this evaluation, Our Chief Executive
Officer/Chief Financial Officer concluded that, as of May 31, 2009, our
internal control over financial reporting was effective.




(b)  Changes in Internal
Control over Financial Reporting. There were no changes in
our internal control over financial reporting, as defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act, during our most recently completed fiscal
quarter that have materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting.








-17-





PART II - OTHER INFORMATION






ITEM 1.  LEGAL PROCEEDINGS




On
October 27, 2008, we and our wholly owned subsidiary Studio Store Direct, Inc.
(“SSD”), were served with a summons and complaint related to a contract action
brought against the Company by Livon Laboratory, Inc. (“LivOn”).





The
breach of claim by LivOn is related to contract entered into between SSD, and
LivOn for the production of an infomercial to be used as a direct
response-marketing tool in conjunction with the sale of LivOn’s LypoSpheric
Vitamin C.  LivOn requested relief in excess of $60,000 for the
alleged material breach of the contract between SSD and LivOn.  In
April 2009, LivOn paid the Company $15,000, and the Company wrote off the
remaining balance owed by LivOn of $33,450 to settle the lawsuit.





ITEM
1A. RISK FACTORS.





Risk
Factors





There
have been no material changes to the Company’s risk factors as previously
disclosed in the Item 1A “Risk Factors” Form 10-K for the fiscal year ended
August 31, 2008.




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




None





ITEM 3.  DEFAULTS UPON SENIOR
SECURITIES




None




ITEM 4.  SUBMISSION OF MATTERS TO A VOTE
OF SECURITY HOLDERS




None





ITEM 5.  OTHER INFORMATION




None




ITEM 6.  EXHIBITS AND
REPORTS ON FORM 8-K




(a)Exhibit
      No.
            
            Description31.1
            
            Certification
      of Reno Rollé pursuant to Rule 13a-14(a) and Rule 15d-14(a),
      promulgated under the Securities Exchange Act of 1934, as
      amended.32.1
            
            Certification
      of Reno Rollé pursuant to 18 U.S.C. Section 1350 as adopted pursuant to
      Section 906 of the Sarbanes-Oxley Act of
  2002.




(b)   Reports
of Form 8-K




None




-18-






SIGNATURES






In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, there unto duly
authorized.






RED
      ROCK PICTURES HOLDINGS, INC.RegistrantDate:  July
      20, 2009
              By:
      /s/ Reno
      RolléReno
      RolléPresident,
      Chief Executive Officer,
                and
      Director












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