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:  February 28, 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 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 April 7, 2009: 103,650,335 shares of common stock.
   
 
  RED
ROCK PICTURES HOLDINGS, INC. AND SUBSIDIARIES
 
 FORM
10-Q
 
 THREE
AND SIX MONTHS ENDED FEBRUARY 28, 2009 AND FEBRUARY 29, 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
                  13Item
      4T.
                  Controls
      and Procedures
                  15PART
      II - OTHER INFORMATIONItem
      1.
                  Legal
      Proceedings
                  17Item
      2.
                  Unregistered
      Sales of Equity securities and Use of Proceeds
                  20Item
      3.
                  Defaults
      Upon Senior Securities
                  20Item
      4.
                  Submission
      of Matters to a Vote of Security Holders
                  20Item
      5
                  Other
      Information
                  20Item
      6.
                  Exhibits
                  20
   -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
  February
      28, 2009
                                          
                                          
                                          August
      31, 2008(Unaudited)ASSETSCurrent
      AssetsCash
                                          
                                          $
                                          2,436
                                          
                                          
                                          $
                                          5,932Accounts
      receivable, net of allowance for doubtful accounts of $30,000 and
      $Nil at February 28, 2009
                                            and
      August 31, 2008, respectively
                                          
                                          
                                          32,150
                                          
                                          
                                          
                                          216,644Advances
      to related party
                                          
                                          
                                          37,298
                                          
                                          
                                          
                                          76,798Capitalized
      production costs
                                          
                                          
                                          112,648
                                          
                                          
                                          
                                          134,723Prepaid
      expenses and deposits
                                          
                                          
                                          13,218
                                          
                                          
                                          
                                          10,745Production
      loans and accrued interest - current portion
                                          
                                          
                                          700,000
                                          
                                          
                                          
                                          1,396,470Total
      Current Assets
                                          
                                          
                                          897,750
                                          
                                          
                                          
                                          1,841,312Long
      Term AssetsProduction
      loans and accrued interest, net of allowance for doubtful accounts of
      $300,000 and
                                            $Nil
      at February 28, 2009 and August 31, 2008, respectively
                                          
                                          
                                          2,101,022
                                          
                                          
                                          
                                          1,845,157Print
      and advertising funding
                                          
                                          
                                          1,779,235
                                          
                                          
                                          
                                          1,078,180Property
      and equipment, net
                                          
                                          
                                          20,896
                                          
                                          
                                          
                                          25,707Intangibles,
      net
                                          
                                          
                                          379,620
                                          
                                          
                                          
                                          424,280Goodwill
                                          
                                          
                                          450,338
                                          
                                          
                                          
                                          450,338Total
      Long Term Assets
                                          
                                          
                                          4,731,111
                                          
                                          
                                          
                                          3,823,662Total
      Assets
                                          
                                          $
                                          5,628,861
                                          
                                          
                                          $
                                          5,664,974LIABILITIES
      AND STOCKHOLDERS' EQUITYCurrent
      LiabilitiesAccounts
      payable
                                          
                                          $
                                          186,003
                                          
                                          
                                          $
                                          127,720Accrued
      liabilities
                                          
                                          
                                          6,062
                                          
                                          
                                          
                                          32,290Advances
      from stockholders
                                          
                                          
                                          63,636
                                          
                                          
                                          
                                          63,636Deferred
      production revenue
                                          
                                          
                                          200,000
                                          
                                          
                                          
                                          326,000Senior
      secured convertible note
                                          
                                          
                                          100,000
                                          
                                          
                                          
                                          --Advances
      from related parties
                                          
                                          
                                          2,193,499
                                          
                                          
                                          
                                          1,997,410Total
      Current Liabilities
                                          
                                          
                                          2,749,200
                                          
                                          
                                          
                                          2,547,056Going
      Concern, Commitments and ContingencyStockholders'
      EquityPreferred
      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,
      103,650,335 and 95,350,735 shares
                                            issued
      and outstanding at February 28, 2009 and August 31, 2008,
      respectively
                                          
                                          
                                          103,650
                                          
                                          
                                          
                                          95,351Additional
      paid-in-capital
                                          
                                          
                                          8,922,790
                                          
                                          
                                          
                                          8,200,769Deficit
                                          
                                          
                                          (6,146,779
                                          )
                                          
                                          
                                          (5,178,202
                                          )Total
      Stockholders' Equity
                                          
                                          
                                          2,879,661
                                          
                                          
                                          
                                          3,117,918Total
      Liabilities and Stockholders' Equity
                                          
                                          $
                                          5,628,861
                                          
                                          
                                          $
                                          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 February 28, 2009
                                            (Unaudited)
                                          
                                          
                                          For
      the Three Months Ended February 29, 2008
                                            (Unaudited)
                                          
                                          
                                          For
      the Six
                                            Months
      Ended February 28, 2009
                                            (Unaudited)
                                          
                                          
                                          For
      the Six Months Ended February 29, 2008
                                            (Unaudited)REVENUEProduction
      revenue
                                          
                                          $
                                          --
                                          
                                          
                                          $
                                          --
                                          
                                          
                                          $
                                          183,650
                                          
                                          
                                          $
                                          --Print
      and advertising premium fees
                                          
                                          
                                          --
                                          
                                          
                                          
                                          --
                                          
                                          
                                          
                                          69,844
                                          
                                          
                                          
                                          --Interest
      on production advances
                                          
                                          
                                          91,000
                                          
                                          
                                          
                                          89,332
                                          
                                          
                                          
                                          182,000
                                          
                                          
                                          
                                          178,665TOTAL
      REVENUE
                                          
                                          
                                          91,000
                                          
                                          
                                          
                                          89,332
                                          
                                          
                                          
                                          435,494
                                          
                                          
                                          
                                          178,665COSTS
      AND EXPENSESAmortization
      of capitalized production costs
                                          
                                          
                                          --
                                          
                                          
                                          
                                          --
                                          
                                          
                                          
                                          34,081
                                          
                                          
                                          
                                          --Stock
      based compensation
                                          
                                          
                                          294,267
                                          
                                          
                                          
                                          1,147,984
                                          
                                          
                                          
                                          708,534
                                          
                                          
                                          
                                          1,318,150Professional
      fees
                                          
                                          
                                          (1,597
                                          )
                                          
                                          
                                          18,219
                                          
                                          
                                          
                                          86,484
                                          
                                          
                                          
                                          28,191Salaries
      and wages
                                          
                                          
                                          60,221
                                          
                                          
                                          
                                          11,058
                                          
                                          
                                          
                                          78,796
                                          
                                          
                                          
                                          25,430Office
      and general
                                          
                                          
                                          26,593
                                          
                                          
                                          
                                          23,067
                                          
                                          
                                          
                                          41,495
                                          
                                          
                                          
                                          41,740Bad
      debt expense
                                          
                                          
                                          300,000
                                          
                                          
                                          
                                          --
                                          
                                          
                                          
                                          330,000
                                          
                                          
                                          
                                          --Rent
                                          
                                          
                                          5,181
                                          
                                          
                                          
                                          6,000
                                          
                                          
                                          
                                          12,021
                                          
                                          
                                          
                                          12,000Amortization
      of intangible assets
                                          
                                          
                                          22,330
                                          
                                          
                                          
                                          --
                                          
                                          
                                          
                                          44,660
                                          
                                          
                                          
                                          --TOTAL
      COSTS AND EXPENSES
                                          
                                          
                                          706,995
                                          
                                          
                                          
                                          1,206,328
                                          
                                          
                                          
                                          1,336,071
                                          
                                          
                                          
                                          1,425,511LOSS
      FROM OPERATIONS
                                          
                                          
                                          (615,995
                                          )
                                          
                                          
                                          (1,116,996
                                          )
                                          
                                          
                                          (
      900,577
                                          )
                                          
                                          
                                          (1,246,846
                                          )Interest
      expense
                                          
                                          
                                          34,000
                                          
                                          
                                          
                                          56,886
                                          
                                          
                                          
                                          68,000
                                          
                                          
                                          
                                          109,358NET
      LOSS AND COMPREHENSIVE LOSS
                                          
                                          $
                                          (649,995
                                          )
                                          
                                          $
                                          (1,173,882
                                          )
                                          
                                          $
                                          (968,577
                                          )
                                          
                                          $
                                          (1,356,204
                                          )LOSS
      PER WEIGHTED NUMBER OF SHARES OUTSTANDING - BASIC AND
    DILUTED
                                          
                                          $
                                          (0.01
                                          )
                                          
                                          $
                                          (0.01
                                          )
                                          
                                          $
                                          (0.01
                                          )
                                          
                                          $
                                          (0.02
                                          )WEIGHTED
      AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED
                                          
                                          
                                          103,276,068
                                          
                                          
                                          
                                          78,477,512
                                          
                                          
                                          
                                          99,746,735
                                          
                                          
                                          
                                          72,709,233
  The
accompanying notes are an integral part of these financial
statements.
  -5-
  RED ROCK PICTURES HOLDINGS, INC. AND
SUBSIDIARIES
 
 CONSOLIDATED
STATEMENT OF CASH FLOWS
  Year
      Ended
                                      February 28,
      2009
                                      (Unaudited)
                                    
                                    
                                    Year
      Ended February 29, 2008
                                      (Unaudited)CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      loss
                                    
                                    $
                                    (968,577
                                    )
                                    
                                    $
                                    (1,356,204
                                    )Adjustments
      to reconcile net loss to net cash (used in) provided by operating
      activities:Stock-based
      compensation expense
                                    
                                    
                                    708,534
                                    
                                    
                                    
                                    1,318,150Increase
      in allowance for doubtful accounts
                                    
                                    
                                    330,000
                                    
                                    
                                    
                                    -Depreciation
      and amortization
                                    
                                    
                                    49,471
                                    
                                    
                                    
                                    -Accrued
      interest on convertible note
                                    
                                    
                                    --
                                    
                                    
                                    
                                    39,550Changes
      in operating assets and liabilities:Accounts
      receivable
                                    
                                    
                                    (57,650)
                                    
                                    
                                    
                                    -Capitalized
      production costs
                                    
                                    
                                    22,075
                                    
                                    
                                    
                                    -Prepaid
      expenses and deposits
                                    
                                    
                                    (2,473)
                                    
                                    
                                    
                                    -Accounts
      payable and accrued liabilities
                                    
                                    
                                    54,075
                                    
                                    
                                    
                                    46,792Deferred
      production revenue
                                    
                                    
                                    (126,000)
                                    
                                    
                                    
                                    -NET
      CASH PROVIDED BY OPERATING ACTIVITIES
                                    
                                    
                                    9,455
                                    
                                    
                                    
                                    48,288CASH
      FLOWS FROM INVESTING ACTIVITIESProduction
      loans and accrued interest
                                    
                                    
                                    140,605
                                    
                                    
                                    
                                    (182,765
                                    )Print
      and advertising funding and accrued interest
                                    
                                    
                                    (488,911)
                                    
                                    
                                    
                                    -NET
      CASH USED IN INVESTING ACTIVITIES
                                    
                                    
                                    (348,306)
                                    
                                    
                                    
                                    (182,765
                                    )CASH
      FLOWS FROM FINANCING ACTIVITIESAdvances
      from stockholders
                                    
                                    
                                    (73)
                                    
                                    
                                    
                                    (132,770
                                    )Advances
      from related parties
                                    
                                    
                                    235,428
                                    
                                    
                                    
                                    69,808Proceeds
      from convertible debenture
                                    
                                    
                                    100,000
                                    
                                    
                                    
                                    215,000NET
      CASH PROVIDED BY FINANCING ACTIVITIES
                                    
                                    
                                    335,355
                                    
                                    
                                    
                                    152,038NET
      (DECREASE) INCREASE IN CASH
                                    
                                    
                                    (3,496)
                                    
                                    
                                    
                                    17,561CASH,
      BEGINNING OF PERIOD
                                    
                                    
                                    5,932
                                    
                                    
                                    
                                    9,936CASH,
      END OF PERIOD
                                    
                                    $
                                    2,436
                                    
                                    
                                    $
                                    27,497
  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 SIX MONTHS ENDED FEBRUARY 28, 2009 AND FEBRUARY 29,
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.  Under the terms of the
final asset purchase agreement, the Company will issue 50,000,000 common shares
in consideration for the assets of ComedyNet.  The transaction closed
on April 8, 2009.
 
 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 six months ended February
28, 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.
   -7-
  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.
  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.
 
  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.
  During
the three and six months ended February 28, 2009, the Company recognized total
compensation expense of $294,267 and $708,534 respectively and is disclosed
separately in the accompanying consolidated statements of loss.
 
 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 six months
ended February 28, 2009.
   -8-
 
 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 $91,000
and $89,322 in revenue, or 100% of total revenue, for the three months ended
February 28, 2009 and February 29, 2008, respectively.  For the six
month period ending February 28, 2009 and February 29, 2008, we generated
$435,494 and $178, 665 in revenue, or 42% and 100% of total revenue,
respectively.
 
 5.
              ADVANCES
      TO RELATED PARTY
  These
advances are unsecured, non interest bearing and due on demand.  As of
February 28, 2009 and August 31, 2008, advances to related parties were $37,298
and $76,798, respectively. These advances were made to a company controlled
by the spouse of a director and shareholder of the Company.
  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 six months ended February 28, 2009:
 
 Fiscal
      Year 2009Opening
      balance, August 31, 2008
                              
                              $
                              134,723Production
      costs incurred and capitalized
                              
                              
                              12,006Expense
      related to delivered projects and reclassified to cost of
      sales
                              
                              
                              (34,081)Closing
      unamortized balance, February 28, 2009
                              
                              $
                              112,648
  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
February 28, 2009 and August 31, 2008 was:
  As
      of February 28, 2008
                          
                          
                          As
      of August 31, 2008Bag
      Boy Productions, Inc., a wholly-owned subsidiary of NL, less allowance for
      doubtful accounts of $300,000 and $Nil, respectively
                          
                          $
                          509,030
                          
                          
                          $
                          1,077,635Ratko
      Productions, Inc., a wholly-owned subsidiary of NL
                          
                          
                          2,261,992
                          
                          
                          
                          2,163,992Endless
      Bummer LLC
                          
                          
                          30,000
                          
                          
                          
                          -Less
      current portion
                          
                          
                          2,801,022
      (700,000
                          )
                          
                          
                          (1,396,470
                          )Long
      term portion of production loans and interest
                          
                          $
                          2,101,022
                          
                          
                          $
                          1,845,157
  Bag Boy
Productions, Inc. - As a result of a modification on October 31, 2006 to this
financing agreement with NL, repayment of this loan will now be received no
later than March 14, 2011.  The payments are to be made from the
proceeds from the release of the film over an estimated revenue cycle of three
years, as follows: first NL is to receive a 20% distribution fee; thereafter, NL
is to receive recoupment of all prints and advertising expenses incurred in
connection with the distribution of the picture.  The remaining gross
receipts are to be split equally between the Company and NL until such time as
the Company has recouped its investment entirely.  As of February 28,
2009, the Company had a loan balance of $197,307 in principal and $311,723 in
interest under this financing agreement for a total of
$539,030.    During the second quarter of fiscal year 2009,
we recorded a reserve of $300,000 related to this film due to its revised
downward revenue projections.
   -9-
 
 Ratko
Productions, Inc. - As a result of a modification on October 31, 2006 to this
financing agreement with NL, repayment of this loan will now be received no
later than January 31, 2012.  The payments are to be made from the
proceeds from the release of the film over an estimated revenue cycle of three
years, as follows: first NL is to receive a 20% distribution fee; thereafter, NL
is to receive recoupment of all prints and advertising expenses incurred in
connection with the distribution of the picture.  The remaining gross
receipts are to be split equally between the Company and NL until such time as
the Company has recouped its investment entirely.  As of February 28,
2008, the Company had a loan balance of $1,922,028 in principal and $339,964 in
interest under this financing agreement for a total of
$2,261,992.
 
 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.  The
Company is obligated to invest $50,000 by April 30, 2009 of which $30,000 has
been paid as of February 28, 2009.
 
 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.
 
 The
agreement expressly states that NL is not a borrower or guarantor under any of
the P&A funding  and the only recourse available to the Company is
against the specific film funded, with no cross collateralization.  NL
responsibility is to direct payments to the Company directly from any proceeds
due from each picture prior to any payment to the picture or any
affiliates.   At February 28, 2009 and August 31, 2008, the
Company had advanced $1,779,235 and $1,078,180,
respectively.
 
 9.
              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. as described in Note 5.
  In
addition, on July 7, 2007 the Company issued to Williams-Laikin 521,866 shares
of the company’s common stock which represents the number of shares computed by
dividing each $1,000,000 loan by $1.92 (the computed lowest volume weighted
average price (“VWAP”) for the five days prior to the execution of the
Williams-Laikin loans).
  In the
event that Company’s common stock falls below $1.92 on the six-month anniversary
of the Williams-Laikin loans, than the Company shall issue to Williams-Laikin an
additional number of shares of the Company’s common stock equal to the
difference between the number of Williams-Laikin shares and one million dollars
($1,000,000) divided by the VWAP of the Company’s common stock, as quoted by
Bloomberg, LP, on the calculation date. During the year ended August 31, 2008
the Company issued 11,440,662 share s pursuant to this requirement and has
been valued at the market value of the common stock on the date of
issue.
  In
addition the Company has received advances from a company controlled
by the spouse of a director and shareholder of the Company.  These
advances are unsecured, non interest bearing and due on
demand.
  10.
              INTANGIBLE
      ASSETS
  The
completed technology relates to the intangible assets that were identified by
management in the acquisition of Studio Store Direct, Inc.  Management
identified completed technology and processes for embedding direct response
programs directly onto motion picture digital video discs ("DVD's"). It was
determined that the estimated useful life of this technology was five years and
accordingly the cost of this technology is being amortized over five years using
the straight line method.  The Company recorded $22,331 and $44,660
for the three and six months ended February 28, 2009, respectively.
   -10-
 
 The
following table sets forth the intangible assets, excluding goodwill, by major
category:
 
 Category
                    
                    Cost
                    
                    
                    Accumulated
      Amortization
                    
                    
                    Net
      Book Value at February 28, 2009Completed
      technology
                    
                    $
                    446,611
                    
                    
                    $
                    (66,991)
                    
                    
                    $
                    379,620
  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
 
 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 titled Endless Bummer.  The Company is obligated
to invest $50,000 by April 30, 2009 of which $30,000 has been paid and
classified as capitalized production costs in the accompanying Consolidated
Balance Sheet at February 28, 2009.
 
 On
October 27, 2008, we and our wholly owned subsidiary Studio Store Direct, Inc.
(“SSD”), was served 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
has requested relief in excess of $60,000 for the alleged material breach of the
contract between SSD and LivOn.  We have retained counsel and are in
the process of filing a counterclaim for damages against
LivOn.   As of April 10, 2009, the Company maintains that the
claim is frivolous and unfounded.
 
 13.
              EQUITY
  On
November 17, 2008, the Board of Directors authorized the Company to issue
5,000,000 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.
 
 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.
   -11-
 
 14.
              SUPPLEMENTAL
      CASH FLOW INFORMATION
  During
the six months ended February 28, 2009 and February 29, 2008, there was no
interest or taxes paid by the Company.
  15.
              INCOME
      TAXES
 
 As of
February 28, 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.
 
 16.
              SUBSEQUENT
      EVENT
 
 The
Company entered into a definitive agreement to acquire New York based
ComedyNet.TV, Inc. (“ComedyNet”), a leader in multimedia comedic content
distribution.  Pursuant to the terms of the final asset purchase
agreement, the Company will issue 50,000,000 common shares in consideration for
the assets of ComedyNet.  The transaction closed on April 8,
2009.  ComedyNet’s assets include a substantial library of filmed
comedic content and general fixed assets which will be recorded based on a third
party valuation of its fair market value.
 
  -12-
   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 intends to enter into agreements to fund and co-produce a slate of
National Lampoon mid-budget films. It is our intent to enter into an agreement
to release one National Lampoon film per year in this manner.  The
distribution on these films will be controlled by National Lampoon, but will be
for a wide theatrical release (1200+ screens).  The Company will share in
all revenue generated from these pictures, including theatrical, home video
(DVD), foreign sales, PPV/VOD, and television.
  The
Company will begin building and formalizing relationship with the talent
community.  The Company intends to use our equity 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.
   -13-
  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.
  Results
of Operations
 
 Comparison
of the Three Months Ended February 28, 2009 and February 29, 2008
 
 Revenue
  Revenue
was $91,000 and $89,332 for the three months ended February 28, 2009 and
February 29, 2008, respectively.  This revenue is related to the
interest of production loans which has increased in balance over the same period
of the prior year.
 
 Costs
and Expenses
  Cost and
expenses was $706,995 and $1,206,328 for the three months ended February
28, 2009 and February 29, 2008, respectively.  This decrease of
$499,333 was due to a decrease in stock-based compensation expense of $853,717
offset by an increase in bad debt expense of $300,000.  The remaining
difference is due to normal fluctuations in operating expenses based on business
operations.
 
 Income
Taxes
 
 During
the three months ended February 28, 2009 and February 29, 2008, respectively, we
had no provision for income taxes due to the net operating losses
incurred.
  Comparison
of the Six Months Ended February 28, 2009 and February 29, 2008
 
 Revenue
  Revenue
was $435,494 and $178,665 for the six months ended February 28, 2009 and
February 29, 2008, respectively. The increase of revenue of $256,829 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 $69,844 and no revenue during
the comparative period.
 
 Costs
and Expenses
  Cost and
expenses was $1,336,071 and $1,425,511 for the six months ended February
28, 2009 and February 29, 2008, respectively.  This decrease of
$89,440 was due to a decrease in stock-based compensation expense of $609,616,
offset by an increase in bad debt expense of $330,000, amortization expense
related to intangible assets of $44,660, and $34,081 in expenses associated with
an infomercial project that was delivered during the fiscal
year.  Professional fees, which include accounting and legal fees,
increased $58,293 due to our recent acquisition.  The remaining
difference is due to normal fluctuations in operating expenses based on business
operations.
 
 Income
Taxes
 
 During
the three months ended February 28, 2009 and February 28, 2008, respectively, we
had no provision for income taxes due to the net operating losses
incurred.
 
 Liquidity
and Capital Resources
  As of
February 28, 2009 we had $2,436 in cash and a working capital deficiency of
$1,851,450.  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.
 
 Our cash
flows provided by operating activities was $9,455 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.
 
  -14-
  Our cash
flows used in investing activities was $348,306.   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.
 
 Our cash
flows from financing activities represent activity with a related party to fund
print and advertising and production loans.
 
 On
December 28, 2008, we 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 shall accrue and be payable in cash upon maturity or provided a
conversion to common shares occurs.  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.
  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.  The Company has an option to receive up to an additional
$200,000 in funds in exchange for up to an additional 12 million common
shares.
 
 The
Company entered into a definitive agreement to acquire New York based
ComedyNet.TV, Inc. (“ComedyNet”), a leader in multimedia comedic content
distribution.  Pursuant to the terms of the final asset purchase
agreement, the Company will issue 50,000,000 common shares in consideration for
the assets of ComedyNet.  The transaction was closed on April 8,
2009.
 
 Additionally,
we intend to seek advice from investment professionals on how to obtain
additional capital and believe that by being a public entity we will be more
attractive to the sources of capital.  In addition, we will need to
raise additional capital to continue our operations past twelve months 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.
  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
  Pursuant
to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”),
the Company carried out an evaluation, with the participation of the Company’s
management, including the Company’s Chief Executive Officer (“CEO”) and Chief
Accounting Officer (“CAO”) (the Company’s principal financial and accounting
officer), of the effectiveness of the Company’s disclosure controls and
procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the
end of the period covered by this report. Based upon that evaluation, the
Company’s CEO and CAO concluded that the Company’s disclosure controls and
procedures are effective to ensure that information required to be disclosed by
the Company in the reports that the Company files or submits under the
Exchange Act, is recorded, processed, summarized and reported, within the time
periods specified in the SEC’s rules and forms, and that such information is
accumulated and communicated to the Company’s management, including the
Company’s CEO and CAO, as appropriate, to allow timely decisions regarding
required disclosure.
   -15-
 
 Management’s Report on
Internal Controls over Financial Reporting
 
 Internal
control over financial reporting is a process to provide reasonable assurance
regarding the reliability of consolidated financial reporting and the
preparation of financial statements for external purposes in accordance with
U.S. generally accepted accounting principles.  There has been no change in
the Company’s internal control over financial reporting during the quarter ended
February 28, 2009 that has materially affected, or is reasonably likely to
materially affect, the Company’s internal control over financial
reporting.
  The
Company’s management, including the Company’s CEO and CAO, does not expect that
the Company’s disclosure controls and procedures or the Company’s internal
controls will prevent all errors and all fraud. A control system, no matter how
well conceived and operated, can provide only reasonable, not absolute,
assurance that the objectives of the control system are met. Further, the design
of a control system must reflect the fact that there are resource constraints,
and the benefits of controls must be considered relative to their costs. Because
of the inherent limitations in all control systems, no evaluation of the
controls can provide absolute assurance that all control issues and instances of
fraud, if any, within the Company have been detected.
 
 Management
conducted an evaluation of the effectiveness of our internal control over
financial reporting based on the framework in Internal Control – Integrated
Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission. Based on this evaluation, management concluded that the
company’s internal control over financial reporting was effective as of
February 28, 2009.
   -16-
  
 PART II - OTHER INFORMATION
   ITEM 1.  LEGAL PROCEEDINGS
  On
October 27, 2008, we and our wholly owned subsidiary Studio Store Direct, Inc.
(“SSD”), was served 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 has requested relief in excess of $60,000 for the
alleged material breach of the contract between SSD and LivOn.  We
have retained counsel and are in the process of filing a counterclaim for
damages against LivOn.   As of April 14, 2009, the Company
maintains that the claim is frivolous and unfounded.
 
 ITEM
1A. RISK FACTORS.
 
 Risk
Factors
 
 We
have a limited operating history in which to evaluate our business.
  We were
incorporated in Nevada in August 2006 and we have limited revenues to date and
we have a limited operating history upon which an evaluation of our future
success or failure can be made.  No assurances of any nature can be
made to investors that the company will be profitable.
 
 We
will require additional funds to achieve our current business strategy and our
inability to obtain additional financing could cause us to cease our business
operations.
 
 We will
need to raise additional funds through public or private debt or sale of equity
to achieve our current business strategy. Such financing may not be available
when needed. Even if such financing is available, it may be on terms that are
materially adverse to your interests with respect to dilution of book value,
dividend preferences, liquidation preferences, or other terms. Our capital
requirements to implement our business strategy will be significant. However, at
this time, we can not determine the amount of additional funding necessary to
implement such plan. We intend to assess such amount at the time we will
implement our business plan. Furthermore, we intend to effect future
acquisitions with cash and the issuance of debt and equity securities. The cost
of anticipated acquisitions may require us to seek additional financing. We
anticipate requiring additional funds in order to fully implement our business
plan to significantly expand our operations. We may not be able to obtain
financing if and when it is needed on terms we deem acceptable. Our inability to
obtain financing would have a material negative effect on our ability to
implement our acquisition strategy, and as a result, could require us to
diminish or suspend our acquisition strategy.
 
 If we are
unable to obtain financing on reasonable terms, we could be forced to delay,
scale back or eliminate certain product and service development
programs.  In addition, such inability to obtain financing on
reasonable terms could have a material negative effect on our business,
operating results, or financial condition to such extent that we are forced to
restructure, file for bankruptcy, sell assets or cease operations, any of which
could put your investment dollars at significant risk.
 
 If
we are unable to retain the services of our chief executive officer, Reno Rolle,
or if we are unable to successfully recruit qualified managerial personnel and
employees with experience in business and the entertainment industry, we may not
be able to continue our operations.
 
 Our
success depends solely upon the continued service of Reno Rolle, our chief
executive officer.  Loss of Mr. Rolle’s services will have a material
adverse effect on our growth, revenues, and prospective business.  We
do not maintain key-man insurance on the life of our chief executive officer. In
addition, in order to successfully implement and manage our business plan, we
will be dependent upon, among other things, successfully recruiting qualified
managerial personnel and employees with experience in business and the
entertainment industry. Competition for qualified individuals is intense. There
can be no assurance that we will be able to find, attract and retain existing
employees or that we will be able to find, attract and retain qualified
personnel on acceptable terms.
 
 There
may be potential liabilities associated with the Company that we were not aware
of at the time of the Merger.
 
 We may
have liabilities that we did not discover or may have been unable to discover
during our pre-acquisition investigation. Any indemnities or warranties may not
fully cover such liabilities due to their limited scope, amount or duration, the
financial limitations of the indemnitor or warrantor, or for other reasons.
Therefore, in the event we are held responsible for the foregoing liabilities,
our operations may be materially and adversely affected.
   -17-
 
 The
Red Rock shareholders currently own a controlling interest in our voting stock
and investors may not have any voice in our management.
 
 In
connection with the acquisition of Red Rock, the Red Rock Shareholders, will
hold an aggregate of 51% of our outstanding shares of common stock, and in the
aggregate, has the right to cast 51% of the votes in any vote by our
stockholders. Thus, these stockholders, acting together, will have the ability
to control substantially all matters submitted to our stockholders for approval,
including:
  ·
              election
      of our board of directors;·
              removal
      of any of our directors;·
              amendment
      of our certificate of incorporation or bylaws; and·
              adoption
      of measures that could delay or prevent a change in control or impede a
      merger, takeover or other business combination involving the
      Company.
 
 As a
result of their ownership and positions, our directors and executive officers
collectively are able to influence all matters requiring stockholder approval,
including the election of directors and approval of significant corporate
transactions. In addition, sales of significant amounts of shares held by our
directors and executive officers, or the prospect of these sales, could
adversely affect the market price of our common stock. Management's stock
ownership may discourage a potential acquirer from making a tender offer or
otherwise attempting to obtain control of us, which in turn could reduce our
stock price or prevent our stockholders from realizing a premium over our stock
price.
 
 It
is likely that additional shares of our stock will be issued in the normal
course of our business development, which will result in a dilutive affect on
our existing shareholders.
 
 We will
issue additional stock as required to raise additional working capital in order
to secure intellectual properties, undertake company acquisitions, recruit and
retain an effective management team, compensate our officers and directors,
engage industry consultants and for other business development
activities.
 
 If
we fail to adequately manage our growth, we may not be successful in growing our
business and becoming profitable.
 
 We expect
our business and number of employees to grow over the next year. We expect that
our growth will place significant stress on our operation, management, employee
base and ability to meet capital requirements sufficient to support our growth
over the next 12 months. Any failure to address the needs of our growing
business successfully could have a negative impact on our chance of
success.
 
 If
we acquire or invest in other businesses, we will face certain risks inherent in
such transactions.
  We may
acquire, make investments in, or enter into strategic alliances or joint
ventures with, companies engaged in businesses that are similar or complementary
to ours. If we make such acquisitions or investments or enter into strategic
alliances, we will face certain risks inherent in such transactions. For
example, we could face difficulties in managing and integrating newly acquired
operations. Additionally, such transactions would divert management resources
and may result in the loss of artists or songwriters from our rosters. We cannot
assure you that if we make any future acquisitions, investments, strategic
alliances or joint ventures that they will be completed in a timely manner, that
they will be structured or financed in a way that will enhance our
creditworthiness or that they will meet our strategic objectives or otherwise be
successful. Failure to effectively manage any of these transactions could result
in material increases in costs or reductions in expected revenues, or
both.
 
 “Penny
Stock” rules may make buying or selling our common stock difficult.
 
 Trading
in our securities is subject to the “penny stock” rules. The SEC has adopted
regulations that generally define a penny stock to be any equity security that
has a market price of less than $5.00 per share, subject to certain exceptions.
These rules require that any broker-dealer who recommends our securities to
persons other than prior customers and accredited investors, must, prior to the
sale, make a special written suitability determination for the purchaser and
receive the purchaser’s written agreement to execute the transaction. Unless an
exception is available, the regulations require the delivery, prior to any
transaction involving a penny stock, of a disclosure schedule explaining the
penny stock market and the risks associated with trading in the penny stock
market. In addition, broker-dealers must disclose commissions payable to both
the broker-dealer and the registered representative and current quotations for
the securities they offer. The additional burdens imposed upon broker- dealers
by such requirements may discourage broker-dealers from effecting transactions
in our securities, which could severely limit the market price and liquidity of
our securities. Broker- dealers who sell penny stocks to certain types of
investors are required to comply with the Commission’s regulations concerning
the transfer of penny stocks. These regulations require broker-dealers
to:
  ·
              Make
      a suitability determination prior to selling a penny stock to the
      purchaser;·
              Receive
      the purchaser’s written consent to the transactions;
and·
              Provide
      certain written disclosures to the
purchaser.
   -18-
  Risks Associated with the
Entertainment, Media and Communications Industries
 
 Competition
from providers of similar products and services could materially adversely
affect our revenues and financial condition.
 
 The
industry in which we compete is a rapidly evolving, highly competitive and
fragmented market, which is based on consumer preferences and requires
substantial human and capital resources. We expect competition to intensify in
the future.   There can be no assurance that we will be able to compete
effectively.   We believe that the main competitive factors in
the entertainment, media and communications industries include
effective marketing and sales, brand recognition, product quality, product
placement and availability, niche marketing and segmentation and value
propositions. They also include benefits of one's company, product and
services, features and functionality, and cost. Many of our competitors are
established, profitable and have strong attributes in many, most or all of
these areas.   They may be able to leverage their existing relationships
to offer alternative products or services at more attractive pricing or
with better customer support. Other companies may also enter our markets
with better products or services, greater financial and human resources and/or
greater brand recognition. Competitors may continue to improve or expand current
products and introduce new products. We may be perceived as relatively too small
or untested to be awarded business relative to the competition. To be
competitive, we will have to invest significant resources in business
development, advertising and marketing.   We may also have to rely on
strategic partnerships for critical branding and relationship leverage, which
partnerships may or may not be available or sufficient. We cannot assure that it
will have sufficient resources to make these investments or that we will be able
to make the advances necessary to be competitive. Increased competition
may result in price reductions, reduced gross margin and loss of market
share. Failure to compete successfully against current or future competitors
could have a material adverse effect on the Company’s business, operating
results and financial condition.
 
 The
speculative nature of the entertainment, media and communications industry may
result in our inability to produce products or services that receive sufficient
market acceptance for us to be successful.
 
 Certain
segments of the entertainment, media and communications industry are highly
speculative and historically have involved a substantial degree of risk. For
example, the success of a particular film, video game, program or recreational
attraction depends upon unpredictable and changing factors, including the
success of promotional efforts, the availability of alternative forms of
entertainment and leisure time activities, general economic conditions, public
acceptance and other tangible and intangible factors, many of which are beyond
our control. If we complete a business combination with a target business in
such a segment, we may be unable to produce products or services that receive
sufficient market acceptance for us to be successful.
 
 Changes
in technology may reduce the demand for the products or services we may offer
following a business combination.
 
 The
entertainment, media and communications industries are substantially affected by
rapid and significant changes in technology. These changes may reduce the demand
for certain existing services and technologies used in these industries or
render them obsolete. We cannot assure you that the technologies used by or
relied upon or produced by a target business with which we effect a business
combination will not be subject to such occurrence. While we may attempt to
adapt and apply the services provided by the target business to newer
technologies, we cannot assure you that we will have sufficient resources to
fund these changes or that these changes will ultimately prove
successful.
 
 If
our products or services that we market and sell are not accepted by the public,
our profits may decline.
 
 Certain
segments of the entertainment, media and communications industries are dependent
on developing and marketing new products and services that respond to
technological and competitive developments and changing customer needs and
tastes. We cannot assure you that the products and services of a target business
with which we effect a business combination will gain market acceptance. Any
significant delay or failure in developing new or enhanced technology, including
new product and service offerings, could result in a loss of actual or potential
market share and a decrease in revenues.
   -19-
 
 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
 
 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.31.2
                  
                  Certification
      of Steve Handy 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 2002.32.2
                  
                  Certification
      of Steve Handy pursuant to 18 U.S.C. Section 1350 as adopted pursuant to
      Section 906 of the Sarbanes-Oxley Act of
  2002.
     -20-
   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:  April
      17, 2009
                  By:
      /s/ Reno
      RolléReno
      RolléPresident,
      Chief Executive Officer, and Director
 
  RED
      ROCK PICTURES HOLDINGS, INC.RegistrantDate:  April
      17, 2009
                  By:
      /s/ Steve
      HandySteve
      HandyChief Financial
      Officer
 
 
   -21-