UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
___________
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the quarterly period ended | |
OR | |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from ________________ to ______________ |
Encom Group, INC.
(Exact Name of RegistrantCompany as Specified in Charter)
Nevada | 000-54277 | 27-1519178 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
77429 | ||
(Address of principal executive offices) | (Zip Code) |
NA
(Former Name or former address, if changed since last report.)
Indicate by check mark whether the registrantCompany (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrantCompany was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YesxS
Indicate by check mark whether the registrantCompany has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrantCompany was required to submit and post such files). Yesx£
Indicate by check mark whether the registrantCompany is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer | Accelerated filer | Non-accelerated filer | Smaller reporting company |
Indicate by check mark whether the registrantCompany is a shell company (as defined in Rule 12b-2 of the Exchange Act).
YesYes xS Noo£
1 |
Encom Group, INC.
FORM 10-Q FOR THE QUARTER ENDED MARCH 31,JUNE 30, 2012
INDEX
PART I – FINANCIAL INFORMATION
Item 1 | Financial Statements | |
4 | ||
5 | ||
Statements of Cash Flows (Unaudited) for the | ||
Notes to the | ||
Item 2 | 8 | |
Item 3 | Quantitative and Qualitative Disclosures about Market Risk | |
Item 4 | Controls and Procedures | |
PART II – OTHER INFORMATION | ||
Item 1 | Legal Proceedings | |
Item 2 | Unregistered Sales of Equity Securities and Use of Proceeds | |
Item 3 | Defaults Upon Senior Securities | |
Item 4 | Mine Safety Disclosures | |
Item 5 | Other Information | |
Item 6 | Exhibits | |
Signature | ||
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FORWARD LOOKING STATEMENTS
Statements made in this Form 10-Q that are not historical or current facts are “forward-looking statements” made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 (the “Act”) and Section 21E of the Securities Exchange Act of 1934. These statements often can be identified by the use of terms such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate,” “approximate” or “continue,” or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management’s best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. Among the factors that could cause actual results to differ materially from the forward-looking statements are the following: the Company’s ability to obtain necessary capital, the Company’s ability to meet anticipated development timelines, the Company’s ability to protect its proprietary technology and knowhow; the Company’s ability to identify and develop a network of licensed physicians, the Company’s ability to establish a global market, clinical trial results, the Company’s ability to successfully consummate future acquisitions and such other risk factors identified from time to time in the Company’s reports filed with the Securities and Exchange Commission, including those filed with this Form 10-Q quarterly report. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.
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Encom Group, INC.
BALANCE SHEETS
(ADEVELOPMENT STAGE COMPANY)
(Unaudited)
June 30, 2012 | December 31, 2011 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash | $ | — | 12,039 | |||||
Total current assets | — | 12,039 | ||||||
Total assets | $ | — | $ | 12.039 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities | ||||||||
Accounts payable and accrued expense | $ | — | $ | 1,569 | ||||
Accrued liabilities- related party | — | 1,319 | ||||||
Total current liabilities | — | 2,888 | ||||||
Stockholders’ equity | ||||||||
Preferred stock $0.00001 par value: 100,000,000 shares Authorized, none issued and outstanding | — | — | ||||||
Common stock, $0.00001 par value 100,000,000 shares authorized, 11,500,000 issued and outstanding | 115 | 115 | ||||||
Additional paid-in capital | 76,304 | 74,985 | ||||||
Accumulated deficit | (76,419 | ) | (65,949 | ) | ||||
Total stockholders’ equity | — | 9,151 | ||||||
Total liabilities and stockholders’ equity | $ | — | $ | 12,039 |
The accompanying notes are an integral part of the unaudited financial statements
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Encom Group, INC.
STATEMENTS OF EXPENSES
(A DEVELOPMENT STAGE COMPANY)
(UNAUDITED)
Three Months Ended | Six Months Ended | From December 18, 2009 (Inception) | ||||||||||||||||||
June 30, | June 30, | Thru June 30, | ||||||||||||||||||
2012 | 2011 | 2012 | 2011 | 2012 | ||||||||||||||||
General & administrative expenses | 368 | 4,699 | 10,470 | 18,129 | 75,100 | |||||||||||||||
Loss from operations | (368 | ) | (4,699 | ) | (10,470 | ) | (18,129 | ) | (75,100 | ) | ||||||||||
Other income (expense) | ||||||||||||||||||||
Interest expense | — | — | — | — | (1,319 | ) | ||||||||||||||
Total other income(expense) | — | — | — | — | — | |||||||||||||||
Net loss | $ | (368 | ) | $ | (4,699 | ) | $ | (10,470 | ) | (18,129 | ) | (76,419 | ) | |||||||
Income(Loss) per common share | ||||||||||||||||||||
Basic and diluted | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | ||||||||
Weighted average number of common shares outstanding basic and diluted | 11,500,000 | 11,500,000 | 11,500,000 | 11,500,000 |
The accompanying notes are an integral part of the unaudited financial statements
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ENCOM GROUP, INC.
March 31, 2012 | December 31, 2011 | |||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash | $ | 368 | $ | 12,039 | ||||
Accounts Receivable | - | - | ||||||
TOTAL CURRENT ASSETS | 368 | 12,039 | ||||||
Property and Equipment | 150,000 | - | ||||||
TOTAL ASSETS | $ | 150,368 | $ | 12,039 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts payable and accrued expenses | $ | - | $ | 2,888 | ||||
TOTAL CURRENT LIABILITIES | - | 2,888 | ||||||
Long-Term Debt | 150,000 | - | ||||||
TOTAL LIABILITIES | 150,000 | 2,888 | ||||||
COMMITMENTS AND CONTINGENCIES | - | - | ||||||
STOCKHOLDERS' EQUITY | ||||||||
Preferred stock, $0.00001 par value; 100,000,000 shares authorized, no shares issued and outstanding | - | - | ||||||
Common stock, $0.00001 par value; 100,000,000 shares authorized, 11,500,000 shares issued and outstanding | 115 | 115 | ||||||
Additional paid-in capital | 74,985 | 74,985 | ||||||
Accumulated Deficit | - | - | ||||||
Deficit Accumulated During Development Stage | (74,732 | ) | (65,949 | ) | ||||
TOTAL STOCKHOLDERS' EQUITY | 368 | 9,151 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 150,368 | $ | 12,039 |
For the Three Months ended March 31, 2012 | For the Three Months ended March 31, 2011 | From December 18, 2009 (Inception) thru March 31, 2012 | ||||||||||
REVENUES | ||||||||||||
Sales | $ | - | $ | - | $ | - | ||||||
Total Revenues | - | - | - | |||||||||
OPERATING EXPENSES | ||||||||||||
Cost of Sales | ||||||||||||
General and Administrative | 8,783 | 13,431 | 74,732 | |||||||||
Total Expenses | 8,783 | 13,431 | 74,732 | |||||||||
LOSS FROM OPERATIONS | (8,783 | ) | (13,431 | ) | (74,732 | ) | ||||||
OTHER INCOME (EXPENSE) | - | - | - | |||||||||
LOSS BEFORE TAXES | (8,783 | ) | (13,431 | ) | (74,732 | ) | ||||||
INCOME TAX EXPENSE | - | - | - | |||||||||
NET LOSS AND COMPREHENSIVE LOSS | $ | (8,783 | ) | $ | (13,431 | ) | $ | (74,732 | ) | |||
BASIC AND DILUTED NET LOSS PER SHARE | nil | nil | nil | �� | ||||||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC AND DILUTED | 11,500,000 | 11,500,000 | 11,500,000 |
STATEMENTS OF CASH FLOWS
(A DEVELOPMENT STAGE COMPANY)
(UNAUDITED)
For the Three Months ended March 31, 2012 | For the Three Months ended March 31, 2011 | From December 18, 2009 (Inception) thru March 31, 2012 | ||||||||||
Cash Flow | ||||||||||||
Net Loss | $ | (8,783 | ) | $ | (13,431 | ) | $ | (74,732 | ) | |||
Other Assets | - | 1,550 | - | |||||||||
Current Liabilities | (2,888 | ) | 1,160 | - | ||||||||
Other Liabilities | - | - | - | |||||||||
Operating | (11,671 | ) | (10,721 | ) | (74,732 | ) | ||||||
Acquisitions, Net | - | - | - | |||||||||
CapEx | - | - | - | |||||||||
- | - | - | ||||||||||
Investing | - | - | - | |||||||||
Financing Activities - Bridge | - | - | - | |||||||||
Proceeds from Sales of Stock | - | - | 75,100 | |||||||||
Partner Contributions | - | - | - | |||||||||
Distributions to minority interest partner | - | |||||||||||
Financing | - | - | 75,100 | |||||||||
Beginning Cash | 12,039 | 38,004 | - | |||||||||
Change In Cash | (11,671 | ) | (10,721 | ) | 368 | |||||||
Ending Cash | $ | 368 | $ | 27,283 | $ | 368 | ||||||
Supplemental Disclosure of Non-Cash Activities: | ||||||||||||
Software license obtained through assumption of note | $ | 150,000 | $ | - | $ | 150,000 |
Six Months Ended June 30 | From December 31, 2009 (Inception) thru June 30, | |||||||||||
2012 | 2011 | 2012 | ||||||||||
Cash Flows From Operating Activities: | ||||||||||||
Net loss | $ | (10,470 | ) | $ | (18,129 | ) | (76,419 | ) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||
Changes in operating assets and liabilities: | ||||||||||||
Accounts payable | (1,569 | ) | 1,550 | — | ||||||||
Accrued expense | — | (686 | ) | 1,319 | ||||||||
Net cash used in operating activities | (12,039 | ) | (17,265 | ) | (75,100 | ) | ||||||
Cash Flows From Financing Activities: | ||||||||||||
Proceeds from notes payable – related parties | — | — | 35,000 | |||||||||
Payments on notes payable – related parties | — | — | (35,000 | ) | ||||||||
Sale of common stock | — | — | 75,100 | |||||||||
Net cash provided by financing activities | — | — | — | |||||||||
Net increase (decrease) in cash | (12,039 | ) | 38,004 | — | ||||||||
Cash at beginning of period | 12,039 | — | ||||||||||
Cash at end of period | $ | — | $ | 20,739 | — | |||||||
Supplemental schedule of cash flow information: | ||||||||||||
Interest paid | $ | — | $ | — | ||||||||
Income taxes paid | $ | — | $ | — |
The accompanying notes toare an integral part of the condensed consolidatedunaudited financial statements
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ENCOM GROUP, INC.
NOTES TO THE FINANCIAL STATEMENTS
(A DEVELOPMENT STAGE COMPANY)
JUNE 30, 2011
UNAUDITED
NOTE 1 – BASIS OF PRESENTATION AND DESCRIPTION OF BUSINESS
The accompanying unaudited consolidated financial statements include the accounts ofEncom Group, Inc. (“Encom”) and its wholly owned subsidiaries.These financial statements have been prepared in accordance with United States ("U.S.") generally accepted accounting principles ("GAAP") for interim financial information using the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these financial statements do not include all of the information and footnote disclosures required by U.S. GAAP and should be read in conjunction with the financial statements and the summary of significant accounting policies and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2011.References to "Encom""Encom” the "Company," "we," "us," "our" and "ours" refer to Encom Group, Inc.
The operating results presented for the three and six months ended March 31,June 30, 2012 may not necessarily be indicative of the results that may be expected for the year ended December 31, 2012.
Encom’s balance sheet information for the year endedas of December 31, 2011 was derived from the 2011 audited consolidated financial statements but does not include all disclosures in accordance with U.S. GAAP.
Encom Group, Inc. is an early stage company and was organized to engage in creating, marketing and selling of proprietary engagement marketing technologies and or acquiring complementary technologies and or other companies focused on the development and marketing of such technologies.
The Company was incorporated in the State of Nevada on December 18, 2009 under the name Eastern World Solutions, Inc. The founding management group and Board of Directors planned to develop a website (www.skiwear4you.com) that would offer skiwear at retail prices to customers ordering online.
By February of 2012, other than reserving the domain name, founding management had not commenced development of a website nor advanced the business plan past the conceptual stage. After further consideration, the founding Board of Directors, management group, and shareholders determined that its business plan was not feasible and decided to suspend operations. Consequently, the Board of Directors decided to seek out a purchaser for the business.
On March of27, 2012, by unanimous consent, the Company’s former shareholders entered into a Stock Purchase Agreement and a contribution agreement with Select Media Assets, LLC and certain other entities whereby all but 25,000 sharesmajority ownership of the issuedCompany was sold to another group and outstanding common stockon April 16, 2012 a merger with a private company was transferred toannounced. Actual control of the private company was never consummated and on June 19, 2012, another change of control occurred and the new shareholders for a total purchase priceofficers and directors of $290,000the Company resigned and were replaced by different officers and directors. The new officers are in the contributionprocess of developing a business plan developed by Encom Group, Inc. The contributed business plan included all contracts, preliminary relationships and potential relationships and this portionto further the value of the consideration was exchange for approximately 61% ofCompany. Such a plan includes the total issuedseeking out and outstanding shares transferred pursuant to these agreements. The former shareholders further agreed, asacquiring a condition to the Stock Purchase Agreement, to accept $150,000 in cash and defer final payment of $140,000 for up to a maximum of six months from the execution date of the Stock Purchase Agreement. Since there was no trading market for the Company’s stock at the time, we assigned no value to the transaction.
NOTE 2 – GOING CONCERN
As shown in the accompanying financial statements, the Company had a negative operating cash flow andhas an accumulated deficit incurred through March 31,of $76,419 as of June 30, 2012. Management has established plans to begin generating revenuesUnless profitability and decrease debt. Management intends to seek additional capital from newincrease in shareholders’ equity securities offerings that will provide funds needed to increase liquidity, fund internal growth and fully implement its business plan. These plans, if successful, will mitigate the factors whichcontinues, these conditions raise substantial doubt aboutas to the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the eventif the Company cannotis unable to continue in existence.as a going concern.
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ITEM 2. MANAGEMENT'S2: MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTSPLAN OF OPERATIONS
The following discussion summarizes the financial position of Encom Group, Inc. as of March 31,June 30, 2012 and should be read in conjunction with (i) the unaudited consolidated interim financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q and (ii) the consolidated financial statements and accompanying notes to our Annual Report on Form 10-K for the fiscal year ended December 31, 2011.
The Company
Encom Group, Inc. (“Encom”) is a development stage company and was organized to engage in creating, marketing and selling of proprietary engagement marketing technologies and or acquiring complementary technologies and or other companies focused on the development and marketing of such technologies. References to "Encom""Encom” the "Company," "we," "us," "our" and "ours" refer to Encom Group, Inc.
The Company is a development stage company that was incorporated in the State of Nevada on December 18, 2009 under the name Eastern World Solutions, Inc. The founding management group and Board of Directors planned to develop a website (www.skiwear4you.com) that would offer skiwear at retail prices to customers ordering online.
By February of 2012, other than reserving the domain name, founding management had not commenced development of a website nor advanced the business plan past the conceptual stage. After further consideration, the founding Board of Directors, management group, and shareholders determined that its business plan was not feasible and decided to suspend operations. Consequently, the Board of Directors decided to seek out a purchaser for the business. Accordingly, in March of
On June 19, 2012 by unanimous consent, the Company’s former shareholders entered into a Stock Purchase Agreementofficers and a contribution agreement with Select Media Assets, LLC and certain other entities whereby all but 25,000 sharesdirectors of the issuedCompany resign and outstanding common stockwere replaced by new officers and directors. As part of the change in officers and directors there was transferred toa change in control of the Company. The new shareholders for a total purchase priceofficers are in the process of $290,000 and the contribution ofdeveloping a business plan developed by Encom Group, Inc. The contributed business plan included all contracts, preliminary relationships and potential relationships and this portionto further the value of the consideration was exchanged for approximately 61% ofCompany. Such a plan includes the total issuedseeking out and outstanding shares transferred pursuant to these agreements. The former shareholders further agreed, asacquiring a condition to the Stock Purchase Agreement, to accept $150,000 in cash and defer final payment of $140,000 for up to a maximum of six months from the execution date of the Stock Purchase Agreement. Since there was no trading market for the Company’s stock at the time, we assigned no value to the transaction.
No Operating History, Revenues or Earnings
As of the date hereof, we have not yet earned any operating revenues or earnings. Since our inception, most of the time and resources of new management has been spent in organizing us, obtaining interim financing and developing a business plan. Our success is dependent upon our obtaining additional financing from our operations, from placement of our equity or debt or from third party funding sources. There is no assurance that we will be able to obtain additional debt or equity financing from any source. We, during the development stage of our operations, can be expected to sustain substantial operating expenses while generating only limited operating revenues or the operating revenues generated can be expected to be insufficient to cover expenses. Thus, for the near to mid-term, unless we attain profitable operations, our financial statements will show a net operating loss.
As of March 31,June 30, 2012 we had zero cash of $368 and a working capital deficit of $74,732. $0. Unless we secure additional debt or equity financing it is unlikely that we will be able to continue operations in which case you may lose your entire investment. We have no commitment for either debt or equity financing. Equity financing may result in significant dilution. Debt financing may be available but on terms unacceptable to the Company.
On June 22, 2012, we entered into an Assignment, Delegation and Assumption Agreement with Encom Corporation, Randy Bayne, Mark Van Eman, Dale Roberts, Todd Bayne, Courtney Bayne, AQMEN Family Holdings, LLC, Market Street Corporate Services, LLC, Rezaurance Investments, Ltd and Spider Investments, LLC.
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Pursuant to the Agreement, which was effective as of June 19, 2012, the Company, AQMEN Family Holdings, LLC and each of Randy Bayne, Mark Van Eman, Dale Roberts, Todd Bayne and Courtney Bayne (collectively, the “Executives”) terminated the relationships between the Company, on one hand, and AQMEN Family Holdings and the Executives, on the other hand. The relationships among the parties was previously reported by the Company in its Current Reports, dated March 27, 2012 and April 16, 2012, which were filed on April 2, 2012 and April 20, 2012, respectively.
The Agreement rescinded such parties’ relationships, and all agreements, understandings, contracts and memoranda from the start as if the parties never entered into any agreements, understandings, contracts or memoranda.
Under the Agreement, and in order to effect the purpose of the Agreement, the Company assigned to Encom Corporation (i) the business concept and business plan developed by AQMEN Family Holdings, LLC originally acquired under an agreement dated March 27, 2012, (ii) the license agreement entered into by the Company with Motion Notes, LLC on March 27, 2012 and (iii) the Purchase Option Agreement entered into by the Company with Whiteboard Labs, LLC on March 27, 2012. Encom Corporation will indemnify the Company for any liabilities or expenses in regard to the assets assigned or any obligations under such assets.
The Company also agreed to change its name as promptly as possible and to forbear from the use of,inter alia, “Encom” or “Avenge Media Partners”.
In consideration for the assignments by the Company, AQMEN Family Holdings and the Executives transferred the 8,606,250 shares they acquired on March 27, 2012 for the transfer of the business concept and business plan to the Company to the following persons: 4,303,125 shares to Jared G. Robinson and 4,303,125 shares to Neil Kleinman. Additionally, the Executives rescinded their respective employment agreements from the start as if each Executive had never entered into such employment agreement. In connection with the rescission, all of the officers and directors of the Company resigned and new officers and directors were appointed.
Plan of Operation
The Company has no operations or revenue. The Company is developing a plan to review various businesses that would complement the Company and bring an active operation and business into the Company.
Our objective is to look for and identify a potential acquisition candidate. The most likely target companies are those seeking the perceived benefits of a reporting company. Such perceived benefits may include facilitating or improving the terms on which additional equity financing may be sought, providing liquidity for incentive stock options or similar benefits to key employees, increasing the opportunity to use securities for acquisitions, providing liquidity for stockholder and other factors. Business opportunities may be available in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities difficult and complex.
In analyzing prospective business opportunities, management may consider such matters as the available technical, financial and managerial resources; working capital and other financial requirements; history of operations, if any; prospects for the future; nature of present and expected competition; the quality and experience of management services which may be available and the depth of that management; the potential for further research, development, or exploration; specific risk factors not now foreseeable but which may be anticipated; the potential for growth or expansion; the potential for profit; the perceived public recognition or acceptance of products, services, or trades; name identification; and other relevant factors. This discussion of the proposed criteria is presently minimalnot meant to be restrictive of the virtually unlimited discretion of the Company to search for and thereenter into potential business opportunities.
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The search for a target company will not be restricted to any specific kind of business entities, but may acquire a venture which is in its preliminary or development stage, which is already in operation, or in essentially any stage of its business life. It is impossible to predict at this time the status of any business in which the Company may become engaged, whether such business may need to seek additional capital, may desire to have its shares publicly traded, or may seek other perceived advantages which the Company may offer.
In implementing a structure for a particular business acquisition, the Company may become a party to a merger, consolidation, reorganization, joint venture, licensing agreement or other arrangement with another corporation or entity. On the consummation of a transaction, it is likely that the present management and stockholder of the Company will no longer be in control of the Company. In addition, it is likely that the officer and director of the Company will, as part of the terms of the business combination, resign and be replaced by one or more new officers and directors.
There can be no assurance that our financial conditionwe will improve. We are expected to continue to have minimal working capital or a working capital deficit as a result of current liabilities and because our current financial plan calls for us to raise funds through the sale of debt. Without an infusion of additional capital or profits from operations, we are not expected to be able to complete the acquisition of the MotionNotes membership interests and be able to execute on our business plan.
Company Facilities
The Company expects to employ a maximummaintains an office at 3330 South Federal Highway, Suite 220, Boynton Beach, Florida
Results of 10 persons to includeOperations
During the executive management team in 2012. Management expects to add a bilingual sales support person in the 3nd quarter of 2012 to support Latin America client services. Management projects the majority of sales growth in 2012 will come from strategic partnershipsthree and authorized resellers, thus requiring fewer in-house sales or support personnel.
Since inception the Company incorporated, hired the attorney, and hired the auditor for the preparation of 2012.
Liquidity and capital resources
The Company has yet to generate any revenues from our business operations. WeThe Company issued 10,000,000 shares of common stock pursuant to thethrough an exemption from registration contained in Section 4(2) of the Securities Act of 1933. This was accounted for as a sale of common stock. On December 20, 2010, wethe Company sold 1,500,000 common shares pursuant to ourthrough a public offering and raised 75,000.
As of March 31,June 30, 2012, our totalthere were no assets were $150,368 and our totalor liabilities were $150,000. As of March 31,in the Company. Net cash used in operating activities was $12,039 for the six months ended June 30, 2012 we hadcompared to $17,265 for the same period in 2011. Net cash of $368.
Net cash provided from financing activities was $0 for the six months ended June 30, 2012 compared to $0 in the same period in 2011. From inception through June 30, 2012 net cash provided by financing activities was $75,100.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
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ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
At the present time our staff is so small that we only have one professional person on our accounting staff. While we believe that at present this is adequate support to professionally and accurately respond to our accounting needs, due to the requirements of COSO which sets standards for accounting and reporting by all companies, we must deem our controls less than adequate. COSO requires, among other things that there is redundancy and review on an internal basis to satisfy minimal standards. While we will soon be able to hire additional staff to satisfy these issues, at this time we are not in the position to do so. Based on an evaluation as of the end of the quarter ended March 31,June 30, 2012, our Chief Financial Officer has concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are ineffective to ensure that information required to be disclosed in reports that we file or submit under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and in providing reasonable assurance that information required to be disclosed by the Company in such reports is accumulated and communicated to the Company’s management, specifically the Chief Executive Officer and Chief Financial Officer and board, as appropriate to allow timely decisions regarding required disclosures.
As required by SEC Rule 15d-15(b), our Chief Executive Officer and Chief Financial Officer carried out an evaluation, under the supervision and with the participation of our management, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 15d-14 as of September 30, 2011. Based on the foregoing evaluation, our Chief Executive Officer and Chief Financial Officer have concluded and determined that our internal controls over financial reporting, and therefore our disclosure controls and procedures, are ineffective in timely alerting them to material information required to be included in our periodic SEC filings and does not ensure that information required to be disclosed in our periodic SEC filings is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.
In order to remediate these material weaknesses management plans to retain accounting and financial consultants and hire additional accounting staff later in 2012 to assist in the design and implementation of processes and controls to ensure that (a) all material transactions are properly recorded, reviewed and approved; (b) all significant accounts are reconciled on a timely basis; (c) duties are properly segregated; and, (d) complex accounting issues are properly evaluated and accounted for in accordance with GAAP.
PART II –II. - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 1A. RISK FACTORS
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
NONE
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ITEM 4. MINE SAFETY DISCLOSURES
NOT APPLICABLE
ITEM 5. OTHER INFORMATION
On June 19, 2012 the Company filed an 8-K relating to the change in officers and directors as well as the change in control of the Company.
On July 10, 2012 the Company filed an 8-K dismissing the accountants and appointing new accountants
ITEM 6. EXHIBITS
The following is a complete list of exhibits filed as part of this Form 10Q. Exhibit number corresponds to the numbers in the Exhibit table of Item 601 of Regulation S-K.
Number | Description | |
Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act | Filed Herewith | |
Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act | Filed Herewith | |
101.INS | XBRL Instance Document | |
101.SCH (#) | XBRL Taxonomy Extension Schema Document | |
101.CAL (#) | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF (#) | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB (#) | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE (#) | XBRL Taxonomy Extension Presentation Linkbase Document |
(#) | Pursuant to Rule 405(a)(2) of Regulation S-T, the Company will furnish the XBRL Interactive Data Files with detailed footnote tagging as Exhibit 101 in an amendment to this Form 10-Q within the permitted 30-day grace period for the first quarterly period in which detailed footnote tagging is required after the filing date of this Form 10-Q. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrantCompany has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: | By: | /s/ Jared Robinson |
Title: |
12 of 12 |