UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended: DecemberMarch 31, 20122013

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

For the transition period from _____________ to _____________

Commission File Number: 333-176962
 
ChatChing, Inc.
(Exact name of registrant as specified in its charter)
 
Florida 8900 45-2655248
(State or other jurisdiction
of incorporation or organization)
 
(Primary standard industrial
classification code number)
 
(I.R.S. employer
identification number)

1061 E. INDIANTOWN RD. #400
JUPITER FL 33477
(Address of Principal Executive Offices including Zip Code)

561-316-3867
561-316-3867
(Registrant's Telephone Number, including area code)

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
 
Yes x No o
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x No o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated fileroAccelerated filero
Non-accelerated fileroSmaller reporting companyx
(Do not check if a smaller reporting company)  

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

Yes o No x
 
The number of shares outstanding of each of the issuer’s classes of common stock, as of February 15,May 1, 2013 is as follows:

Class of Securities Shares Outstanding
Common Stock, no par value 379,047,619
 
 
 
 
TABLE OF CONTENTS
   PAGE 
PART I
     
ITEM 1.FINANCIAL STATEMENTS  3 
      
ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS  4 
      
ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  8 
      
ITEM 4.CONTROLS AND PROCEDURES  8 
      
PART II
      
ITEM 1.LEGAL PROCEEDINGS  9 
      
ITEM 1A.RISK FACTORS  9 
      
ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.  9 
      
ITEM 3.DEFAULTS UPON SENIOR SECURITIES.  10 
      
ITEM 4.MINE SAFETY DISCLOSURES.  
10
 
      
ITEM 5.OTHER INFORMATION  
10
 
      
ITEM 6.EXHIBITS  11 
      
SIGNATURES  12 
 
 
2
 
PART I

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS
 
Table of Contents
 
Financial Statements:  
Financial Statements: 
    
Condensed Balance Sheets at DecemberMarch 31, 20122013 (Unaudited) and September 31, 2012  F-1 
     
Condensed Statements of Operations for the period from October 1, 2012 through DecemberMarch 31, 2012,2013, the period October 1, 2011 through DecemberMarch 31, 2011, and the period January 1, 2013 through March 31, 2013, and the period January 1, 2012 through the period March 31, 2012 and, the period from January 19, 2011 (inception) to DecemberMarch 31, 20122013 (Unaudited)
  F-2 
     
Condensed Statements of Changes in Stockholder’s Deficit for the period from January 19, 2011 (inception) to DecemberMarch 31, 2012 2013.(Unaudited)
  F-3 
     
Condensed Statements of Cash Flows from the period from October 1, 2012 through DecemberMarch 31, 2012,2013, the period October 1, 2011 through DecemberMarch 31, 2011,2012, and the period from January 19, 2011 (inception) to DecemberMarch 31, 20122013 (Unaudited)
  F-4 
     
Notes to Condensed Financial Statements  F-5 
 
 
3
 
 
CHATCHING, INC. (F/K/A SOCIAL NETWORK MARKETING, INC.) (A DEVELOPMENT STAGE COMPANY)
CONDENSED BALANCE SHEETS
DECEMBER 30, 2012MARCH 31, 2013 (UNAUDITED) AND SEPTEMBER 30, 2012
ASSETS
  December 31, 2012  
September 30,
2012
 
  (Unaudited)    
Current assets:      
Cash $26  $74,841 
Total current assets  26   74,841 
         
Other assets:        
Website development costs, net of amortization of $47,513 and $4,632
 $459,853  $502,584 
         
Trademarks  10,410   2,430 
Total other assets  470,263   505,014 
         
Total assets $470,289  $579,855 
         
         
LIABILITIES AND STOCKHOLDERS' DEFICIT
         
Current liabilities:        
Related party advances $494  $27,000 
Lines of credit - related parties  498,719   481,660 
Total current liabilities  499,213   508,660 
         
Other liabilities:        
Long term notes $396,199  $388,371 
Total other liabilities  396,199   388,371 
         
Commitments and contingencies        
         
Stockholders' deficit:        
Common stock, 800,000,000 shares authorized; 404,047,619 shares issued and outstanding at December 31, 2012 and September 30, 2012 respectively
  61,969   61,969 
Additional paid in capital  4,648   - 
Deficit accumulated during development stage  (491,740)  (379,145)
Total stockholders' deficit  (425,123)  (317,176)
         
Total liabilities and stockholders' deifict $470,289  $579,855 
 
ASSETS
  
March 31,
2013
  
September 30,
2012
 
  (Unaudited)    
Current assets:      
Cash $15,991  $74,841 
Total current assets  15,991   74,841 
         
Other assets:        
Website development costs, net of $417,160  $502,584 
amortization of $90,406 and $47,513        
Trademarks  10,410   2,430 
Total other assets  427,570   505,014 
         
Total assets $443,561  $579,855 
         
LIABILITIES AND STOCKHOLDERS' DEFICIT
         
Current liabilities:        
Related party advances $-  $27,000 
Lines of credit - related parties  479,748   481,660 
Total current liabilities  479,748   508,660 
         
Other liabilities:        
Long term notes $515,252  $388,371 
Total other liabilities  515,252   388,371 
         
Commitments and contingencies        
         
Stockholders' deficit:        
Common stock, 800,000,000 shares authorized;        
379,047,619 and 404,047,619 shares issued and outstanding        
at March 31, 2013 and September 30, 2012 respectively  104,152   61,969 
Additional paid in capital  4,648   - 
Deficit accumulated during development stage  (660,239)  (379,145)
Total stockholders' deficit  (551,439)  (317,176)
         
Total liabilities and stockholders' deifict $443,561  $579,855 
See notes to condensed financial statements.
 
 
F-1
 
 
CHATCHING, INC. (F/K/A SOCIAL NETWORK MARKETING, INC.) (A DEVELOPMENT STAGE COMPANY)
Condensed STATEMENTS OF OPERATIONS
FFROMROM O OCTOBERCTOBER 1, 2012 TO MARCH 31, 2013, FROM OCTOBER 1, 2011 TO DECEMBER MARCH 31, 2012, AND
FROMROM OCTOBER JANUARY 1, 2011 2013 TO MARCH 31, 2013, FROM JANUARY 1, 2012 TO DECEMBER MARCH 31, 2012, ANDAND
FROM JANUARY 19, 2011 (INCEPTION) TO DECEMBERMARCH 31, 20122013 (UNAUDITED)
 
 
Period from
October 1, 2012
  
Period from
October 1, 2011
  
Period from
January 19, 2011
(Inception)
 
  to   to  to 
 
December 31,
2012
  
December 31,
2011
  
December 31,
2012
  
Period from
January 1, 2013 to
March 31,
2013
  
Period from
January 1, 2012 to
March 31,
2012
  
Period from
October 1, 2012 to
March 31,
2013
  
Period from
October 1, 2011 to
March 31,
2012
  
Period from
January 19, 2011 (Inception) to
March 31,
2013
 
                        
Revenue $-  $-  $-  $-  $-  $-  $-  $- 
                                
Operating expenses:                                
General and administrative  4,833   14,023   83,852   4,150   14,788   8,983   28,811   88,002 
Professional fees  500   8,560   248,640   52,216   53,074   52,716   61,634   300,856 
Interest expense  7,828   -   17,662   11,199   -   19,027   -   28,861 
Amortization  42,881   -   47,513   42,893   -   85,774   -   90,406 
Hosting expense  9,812   6,902   47,332   16,520   6,135   26,333   13,037   63,853 
Website maintenance  46,741   -   46,741   41,520   -   88,261   -   88,261 
Total operating expenses  112,595   29,485   491,740   168,498   73,997   281,094   103,482   660,239 
                                
Net loss from operations before income taxes  (112,595)  (29,485)  (491,740)  (168,498)  (73,997)  (281,094)  (103,482)  (660,239)
                                
Income taxes  -   -   -   -   -   -   -   - 
                                
Net Loss $(112,595) $(29,485) $(491,740) $(168,498) $(73,997) $(281,094) $(103,482) $(660,239)
                                
Loss per common share $(0.00) $(0.00)     $(0.00) $(0.00) $(0.00) $(0.00)    
                              - 
Weighted average number of shares outstanding  404,047,619   325,000,000       394,129,630   325,000,000   399,116,022   325,000,000     
 
See notes to condensed financial statements.
 
 
F-2
 
 
CHATCHING, INC. (F/K/A SOCIAL NETWORK MARKETING, INC.) (A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDER'S DEFICIT
FROM JANUARY 19, 2011 (INCEPTION) TO DECEMBERMARCH 31, 20122013 (UNAUDITED)
 
          Deficit Accumulated    
 Common Stock     
During the 
Development
  
 Total
Stockholders'
 
 Shares  Amount  APIC   Stage  
Equity
  Common Stock     
Deficit
Accumulated
During the Development
  
Total
Stockholders'		 
                Shares  Amount  APIC  Stage  Equity 
Balance, January 19, 2011 (Inception)                              
                              
Issuance of common stock for cash  325,000,000   406   -   -   406   325,000,000   406   -   -   406 
                                        
Issuance of warrants  -   -   61,463   -   61,463   -   -   61,463   -   61,463 
                                        
Issiance of common stock upon exercise of warrants
  79,047,619   61,563   (61,463)  -   100 
Issiance of common stock upon  79,047,619   61,563   (61,463)  -   100 
exercise of warrants                    
                                        
Net loss  -   -   -   (379,145)  (379,145)  -   -   -   (379,145)  (379,145)
                                        
Balance, September 30, 2012  404,047,619   61,969   -   (379,145)  (317,176)  404,047,619   61,969   -   (379,145)  (317,176)
                                        
Contribution from shareholder  -   -   4,648   -   4,648   -   -   4,648   -   4,648 
                                        
Issuance of warrants          42,146   -   42,146 
                    
Issiance of common stock upon  29,047,619   42,183   (42,146)  -   37 
exercise of warrants                    
                    
Return of common stock  (54,047,619)  -   -   -   - 
                    
Net loss  -   -   -   (112,595)  (112,595)  -   -   -   (281,094)  (281,094)
                                        
Balance, December 31, 2012  404,047,619  $61,969  $4,648  $(491,740) $(425,123)
Balance, March 31, 2013  379,047,619  $104,152  $4,648  $(660,239) $(551,439)
 
See notes to condensed financial statements.
 
 
F-3
 
 
CHATCHING, INC. (F/K/A SOCIAL NETWORK MARKETING, INC.) (A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF CASH FLOWS
FROM OCTOBER 1, 2012 TO DECEMBERMARCH 31, 2012,2013, FROM OCTOBER 1, 2011 TO DECEMBER MARCH 31, 2012, AND
FROM JANUARY 19, 2011 (INCEPTION) TO DECEMBERMARCH 31, 20122013 (UNAUDITED)
 
 Period from October 1, 2012 through December 31, 2012  Period from October 1, 2011 through December 31, 2011  January 19, 2011 (Inception) -December 31, 2012  
Period from October 1, 2012 through March 31,
2013
  
Period from October 1, 2011 through March 31,
2012
  
January 19, 2011 (Inception) -December 31,
2012
 
                  
Cash flows from operating activities:                  
Net loss from operations $(112,595) $(29,485) $(491,740) $(281,094) $(103,482) $(660,239)
Reconciliation of net loss to net cash used in operating activities:                        
Amortization of debt discount  7,828   -   17,662   19,027   -   28,861 
Expenses paid via issuance of common stock  -   -   6   -   -   6 
Amortization of website costs  42,881   -   47,513   85,774   -   90,406 
Expenses paid directly via lines of credit - related parties  17,059   78,689   162,640   -   59,527   232,627 
Contributions from owners  4,648   -   4,648   4,648   -   4,648 
Changes in operating assets and liabilities:                        
Increase (Decrease) in accrued expenses payable  (26,506)  (85,707)  494   (27,000)  (20,718)  - 
Increase (Decrease) in website development costs  (150)  -   (264,087)  (350)  -   (350)
Increase (Decrease) in trademarks  (7,980)  -   (10,410)  (7,980)  -   (10,410)
Net cash used in operating activities  (74,815)  (36,503)  (533,274)  (206,975)  (64,673)  (314,451)
                        
Cash flows from investing activities:  -   -   -   -   -   - 
                        
Cash flows from financing activities:                        
Proceeds from line of credit  -   23,300   92,800 
Proceeds from notes payable - related parties  -   -   440,000 
(Payments) proceeds from line of credit - related parties  (1,912)  52,500   (260,099)
Proceeds from notes payable  150,000   -   590,000 
Proceeds from issuance of common stock  -   -   500   37   -   541 
Net cash provided by financing activities  -   23,300   533,300   148,125   52,500   330,442 
                        
Net increase (decrease) in cash and cash equivalents  (74,815)  (13,203)  26 
Net (decrease) increase in cash and cash equivalents  (58,850)  (12,173)  15,991 
                        
Cash and cash equivalents, beginning of period  74,841   13,222   -   74,841   13,222   - 
                        
Cash and cash equivalents, end of period $26  $19  $26  $15,991  $1,049  $15,991 
                        
Supplemental disclosure of cash flow information:                        
Cash paid for interest $-  $-  $-  $-  $-  $- 
Cash paid for taxes $-  $-  $-  $-  $-  $- 
Capital expenditures funded by lines of credit $-  $69,717  $507,216  $-  $125,742  $507,216 
 
See notes to condensed financial statements.
 
 
F-4
 
 
ChatChing, Inc. (f/k/a Social Network Marketing, Inc.) (A Development Stage Company)
Notes to Financial Statements

Note 1 – Organization and Basis of Presentation

ChatChing, Inc. (f/k/a Social Network Marketing, Inc.) (the "Company") was incorporated under the laws of the State of Florida on January 19, 2011. On June 30, 2011, the stockholders approved the articles of amendment to change the Company name to ChatChing, Inc., which became effective on July 5, 2011. The Company is developing a social networking site designed for use by individuals for all socio-economic and demographic backgrounds. The Company is a development-stage company and its planned principal activities are to provide an interactive global community website which enables individuals, groups and businesses to easily connect with their family, social, and business circles.

As a company in the development-stage, the Company has no operating revenues to date. The Company currently is devoting substantially all of its present efforts to securing and establishing a new business.

The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management of the Company, the accompanying unaudited financial statements contain all the adjustments (which are of a normal recurring nature) necessary for a fair presentation. Operating results for the threesix months ended DecemberMarch 31, 20122013 are not necessarily indicative of the results that may be expected for the year ending September 30, 2013. For further information, refer to the financial statements and the footnotes thereto contained in the Company’s Annual Report on Form 10-K for the year ended September 30, 2012, as filed with the Securities and Exchange Commission.

Going Concern
As shown in the accompanying balance sheet, the Company has a working capital deficit of approximately $499,000$550,000 at DecemberMarch 31, 2012.2013. The Company is currently in the development stage and has been spending a majority of its time in the development of its website and related trademarks.

There is no guarantee that the Company will be able to raise enough capital or generate revenues to sustain its operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

The financial statements do not include any adjustments relating to the carrying amounts of recorded assets or the carrying amounts and classification of recorded liabilities that might be necessary if the Company is unable to continue as a going concern.

Note 2 – Summary of Significant Accounting Policies

Use of estimates
The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of these financial statements and the reported amounts of revenues and expenses during the reporting period. Accordingly, actual results could differ from these estimates.

Cash equivalents
The Company considers all highly liquid instruments purchased with maturity of three months or less from the time of purchase to be cash equivalents. The Company has no cash equivalents at DecemberMarch 31, 20122013 and September 30, 2012 respectively.
 
 
F-5
 
 
ChatChing, Inc. (f/k/a Social Network Marketing, Inc.) (A Development Stage Company)
Notes to Financial Statements
 
Note 2 – Summary of Significant Accounting Policies, continued

Income Taxes
Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes related primarily to differences between the recorded book basis and tax basis of assets and liabilities for financial and income tax reporting. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settle. Deferred taxes also are recognized for operating losses that are available to offset future taxable income and tax credits that are available to offset future federal income taxes. The Company establishes a valuation allowance for deferred tax positions which, in the opinion of management, are not “more likely than not” to be used.

Trademark Costs
As of DecemberMarch 31, 2012,2013, the company was the holder of certain trademarks. Trademarks are not amortized, but reviewed for impairment annually or more frequently if certain indicators arise.

Website Development Costs
The Company capitalizes development costs incurred subsequent to the establishment of technological feasibility. The Company determined technological feasibility to be established upon the internal release of a working model of its website. Upon the release, development costs are amortized over periods not exceeding three years, based on the estimated economic life.

Earnings Per Share
Net profit (loss) per common share (“EPS”) is computed using the average number of common shares outstanding over the respective periods.

Note 3 – Fair Value of Financial Instruments

The carrying amounts of cash and cash equivalents approximate their fair values due to their short-term nature.

Note 4 – Concentration of Credit Risk

The Company maintains cash balances at a financial institution in the state of Florida. The balance, at any given time, may exceed Federal Deposit Insurance Corporation (“FDIC”) insurance limits of $250,000 per institution. The Company’s cash balances at December 30, 2012March 31, 2013 were within FDIC insured limits.

Note 5 – Income Taxes

At DecemberMarch 31, 2012,2013, the Company had gross deferred tax assets of approximately $184,204.$247,610. The Company determined that it is not more-likely-than-not that such asset will be realized, and as such has established a full valuation allowance at DecemberMarch 31, 2012.2013. The Company evaluates its ability to realize its deferred tax assets each period and adjusts the amount of its valuation allowance, if necessary. If there is an ownership change, as defined under Internal Revenue Code Section 382, the use of operating loss and credit carry-forwards may be subject to limitation on use.

The Company’s loss before income taxes of $112,595$281,094 is comprised entirely of operations in the United States. The effective tax rate of 0% differs from the statutory United States federal income tax rate of 34% due primarily to the valuation allowance. The valuation allowance has increased by $42,370$105,776 for the period ending DecemberMarch 31, 20122013 from the year ended September 30, 2012.

 
F-6
 
 
ChatChing, Inc. (f/k/a Social Network Marketing, Inc.) (A Development Stage Company)
Notes to Financial Statements
 
Note 5 – Income Taxes, continued

The reconciliation of the provision for income taxes for the quartersix month period ended December 30, 2012,March 31, 2013, and the year ended September 30, 2012, and the amount computed by applying the federal income tax rate to net loss is as follows:

 
December 31,
2012
  
September 30,
2012
  
March 31,
2013
  
September 30,
2012
 
            
Tax provision (benefit) at statutory rate $(38,283) $(67,800) $(95,572) $(67,800)
State taxes, net of federal expense  (4,087)  (7,239)  (10,204)  (7,239)
Change of valuation allowance  42,370   75,039   105,776   75,039 
 $-  $-  $-  $- 
 
Note 6 – Commitments and Contingencies
 
From time to time, the Company may become subject to legal proceedings, claims and litigation arising in the ordinary course of its business. The Company is not currently a party to any material legal proceedings, nor is the Company aware of any other pending or threatened litigation that would have a material adverse effect on the Company’s business, operating results, cash flows or financial condition should such litigation be resolved unfavorably.

Note 7 – Lines of Credit – Related Parties

In March 2011, the Company entered into two revolving line of credit agreements with its two (2) founding stockholders in the amount of $125,000, aggregating $250,000 to fund development stage operations. In January 2012, the agreements were amended to increase each of the lines from $125,000 to $250,000, for an aggregate borrowing amount of $500,000.

Note 8 – Notes Payable – Related Parties

In April 2012, the Company issued $175,000 Notes to two (2) accredited investors, aggregating to $350,000. The Notes accrue PIK interest at 0.25% per annum, with the principal and PIK interest due at maturity (December 31, 2014). In connection with each of the Notes, the Company issued warrants to purchase 29,047,619 shares of no-par common stock for $36, which were exercised. The warrants were recorded at fair value, resulting in the recognition of $49,170 as debt discount.

In September 2012, the Company issued a $90,000 note to an accredited investor. The Note also accrues PIK interest at 0.25% per annum, with the principal and PIK interest due at maturity (February 28, 2015). In connection with this note, the Company issued warrants to purchase 20,952,381 shares of No-Par Common Stock for $26, which was exercised. The warrants were recorded at fair value resulting in the recognition of $12,293 as a debt discount.

In February 2013, the Company issued a $150,000 note to an accredited investor. The Note also accrues PIK interest at 0.25% per annum, with the principal and PIK interest due at maturity (December 31, 2015). In connection with this note, the Company issued warrants to purchase 29,047,619 shares of No-Par Common Stock for $36, which was exercised. The warrants were recorded at fair value resulting in the recognition of $42,146 as a debt discount.
 
 
F-7
 
 
ChatChing, Inc. (f/k/a Social Network Marketing, Inc.) (A Development Stage Company)
Notes to Financial Statements
 
Note 9 – Stockholders’ Equity

From January 19, 2011 (Inception) through June 30, 2011, the Company issued 320,000,000 shares (400,000,000 shares pre-split) of no-par common stock for a total capital contribution of $400.

On June 30, 2011 the Company facilitated a 10:8 reverse stock split which has been given retroactive effect in the financial statements.

On July 1, 2011 the Company issued 5,000,000 additional shares of no-par common stock to an individual for services at a fair value ($6).

During the year ended September 30, 2012, the Company issued 79,047,619 shares of no par common stock upon the exercise of warrants issued in connection with the issuance of notes payable (Note 8).

During the six month period ended March 31, 2013, the Company issued 29,047,619 shares of no par common stock upon the exercise of warrants issued in connection with the issuance of notes payable (Note 8).

On February 14, 2013 two of the officers of the company returned a total of 54,047,619 shares at zero cost.
Note 10 – Subsequent Events

Notes Payable

In February 2013, the Company issued a $150,000 Note to an accredited investor. The Note accrues PIK interest at 0.25% per annum, with the principal and PIK interest due at maturity (December 31, 2014). In connection with the Note, the Company issued warrants to purchase 29,047,619 shares of no-par common stock for $36, which were exercised.None
 
Share Redemption
In February 2013, the Company's two founding stockholders collectively transferred 54,047,619 shares of the Company's common stock to the Company.
The number of shares outstanding decreased by 25 million as a result of the above transactions.
 
F-8
 
 
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
 
CAUTIONARY STATEMENT
 
The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes, and other financial information included in this Form 10-Q.

Our Management’s Discussion and Analysis contains not only statements that are historical facts, but also statements that are forward-looking. Forward-looking statements are, by their very nature, uncertain and risky. These risks and uncertainties include international, national, and local general economic and market conditions; our ability to sustain, manage, or forecast growth; our ability to successfully make and integrate acquisitions; 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; change in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; the risk of foreign currency exchange rate; and other risks that might be detailed from time to time in our filings with the Securities and Exchange Commission.
 
Although the forward-looking statements in this Report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by them. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results of operations and prospects.

SPECIAL INFORMATION REGARDING FORWARD LOOKING STATEMENTS
 
The Management’s Discussion and Analysis of Financial Condition and Results of Operations and Plan of Operation (“MD&A”) should be read in conjunction with our unaudited consolidated financial statements for the quarter ended DecemberMarch 31, 20122013 and 2011.2012. The discussion also includes subsequent activities up to FebruaryMay 15, 2012.2013. These financial statements have been prepared in accordance with generally accepted accounting policies in the United States (“GAAP”).

The following discussion and analysis should be read in conjunction with our financial statements and related notes appearing elsewhere in this Report. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factor set forth in this Report.

Management’s Discussion and Analysis of Financial Condition and Results of Operations is based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates and assumptions. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates and assumptions.
 
 
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Critical Accounting Policies and Estimates
 
Critical accounting policies are those we believe are most important to portraying our financial conditions and results of operations and also require the greatest amount of subjective or complex judgments by management. Judgments and uncertainties regarding the application of these policies may result in materially different amounts being reported under various conditions or using different assumptions. There have been no material changes to the critical accounting policies previously disclosed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2012.

Overview

ChatChing operates a recently launched social networking website. We have designed our website to enable users to connect and communicate with each other, consolidate information from other social networking sites, as well as directly share information and user-generated content. We plan to generate revenues from online advertising at our website. We plan to offer a wide range of online advertising formats and solutions, including display advertising, social advertisements, promoted news feed items, and fan/brand pages.

We continue development of web site functionalities and to pursue state registrations to conduct our offering in all US states and territories. Current we are able to provide our service to the residents of 33 states and territories. We have not yet generated or realized any revenues from our business operations.

In addition to our website, we are developing a mobile application for members to access our service. We now anticipate releasing this application in MarchJune 2013.

Emerging Growth Company

We are an emerging growth company under the JOBS Act. We shall continue to be deemed an emerging growth company until the earliest of:

(a) the last day of the fiscal year of the issuer during which it had total annual gross revenues of $1,000,000,000 (as such amount is indexed for inflation every 5 years by the Commission to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics, setting the threshold to the nearest 1,000,000) or more;

(b) the last day of the fiscal year of the issuer following the fifth anniversary of the date of the first sale of common equity securities of the issuer pursuant to an effective IPO registration statement;

(c) the date on which such issuer has, during the previous 3-year period, issued more than $1,000,000,000 in non-convertible debt; or

(d) the date on which such issuer is deemed to be a ‘large accelerated filer’, as defined in section 240.12b-2 of title 17, Code of Federal Regulations, or any successor thereto.’

As an emerging growth company we are exempt from Section 404(b) of Sarbanes Oxley. Section 404(a) requires Issuers to publish information in their annual reports concerning the scope and adequacy of the internal control structure and procedures for financial reporting. This statement shall also assess the effectiveness of such internal controls and procedures. Section 404(b) requires that the registered accounting firm shall, in the same report, attest to and report on the assessment on the effectiveness of the internal control structure and procedures for financial reporting. As an emerging growth company we are also exempt from Section 14A (a) and (b) of the Securities Exchange Act of 1934 which require the shareholder approval of executive compensation and golden parachutes. These exemptions are also available to us as a Smaller Reporting Company.
 
 
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We have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(2) of the Jobs Act, that allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates.

Plan of Operations

We incurred $178,861 in expenses from inception to fiscal year end September 30, 2011. These expenses in the aggregate consist primarily of general and administrative costs of $28,360, professional fees primarily in connection with our registration statement of $144,187 and website hosting expenses of $6,314.

For the fiscal year ended September 30, 2012, we incurred an additional $200,284 in expenses. These expenses in the aggregate consist primarily of general and administrative costs of $50,659, professional fees primarily in connection with our registration statement of $103,953 and website hosting expenses of $31,206.

For the quarter ended DecemberMarch 31, 2012,2013, we incurred an additional $112,595$168,498 in expenses. These expenses in the aggregate consist primarily of general and administrative costs of $4,833,$4,150, professional fees primarily in connection with our registration statement of $500,$52,216 website maintenance costs of $46,741,$41,520, and website hosting expenses of $9,812.$16,520, interest expense of $11,199 and authorization of capitalized website costs of $42,893.
For the six months ended March 31, 2013, we incurred an additional $281,094 in expenses. These expenses in the aggregate consist primarily of general and administrative costs of $8,983, professional fees primarily in connection with our registration statement of $52,716, website maintenance costs of $88,261, website hosting expenses of $26,333, interest expense of $19,027 and authorization of capitalized website costs of $85,774.
We anticipate taking the following steps to implement our business plan in the next 12 months. Our capital requirements for implementation of these steps are estimated at $85,000,$150,000, as set forth in the table below.

Milestone or StepExpected Manner of Occurrence or Method of AchievementDate When Step Should be AccomplishedCost of Completion
Post Launch DevelopmentSite ExpansionContinue development of services. (Website and mobile apps)Current – June 2013$35,00050,000
Marketing Of Serviceand GrowthBegin public relations activities promoting growth and usage of ChatChing.Q3(July 2013 (April-June)- December 2013)$25,000
Growth to Critical MassMaintain service until achieving cash flow neutrality.Q4 2013$25,000100,000
Continued ServiceWe anticipate maintaining operations within available cash flow.2014 onward$0

Liquidity and Capital Resources

In addition to our estimated capital requirements of $85,000$150,000 in the next 12 months as described above, we will incur other costs payable to non-affiliated third parties irrespective of our business development activities, including bank service fees and those costs associated with SEC requirements associated with going and staying public, estimated to be less than $50,000 for the next 12 months. Accordingly, we estimate our capital requirements for the next 12 months to be approximately $135,000.$200,000.
 
 
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As of February 8,April 30, 2013, Steven Pfirman, our President, Secretary and Director and Nicholas Palin, a Director, loaned approximately $500,000,$505,261, consisting of $250,000$255,261 by Mr. Pfirman and $250,000 by Mr. Palin, to fund development stage operations. The loans are binding legal obligations as they were made under identical Credit Line Agreements and related Credit Line Promissory Notes with Mr. Pfirman and Mr. Palin amended and restated in their entirety on January 23, 2012April 8, 2013 to be in the amount of $275,000 and $250,000 each,respectively, aggregating $500,000,$525,000, bearing interest at zero percent due on December 31, 2013. The Credit Line Agreements contain provisions concerning default and remedies in the event of default as well as other provisions related to these loans. The loans are secured by Security Agreements pledging all assets of the Company as security for the loans. Thus, at February 15,May 5, 2013, there were no additional funds available underwas $19,739 remaining on these lines of credit.

In April 2012, we secured additional loans of an aggregate of $175,000 from two non-affiliated third parties, $350,000 from one and $175,000 from another, both due December 31, 2014. Interest on these loans accrues at one quarter percent (.25%) per annum, the applicable federal rate for transactions of this type as of the date of the note. The principal and accrued interest on these loans are not due and payable until December 31, 2014. The principal balance on these loans may be prepaid at any time and from time to time.
 
In connection with the additional loans from the two non-affiliated third parties, we sold the two lenders who were Accredited Investors an aggregate of 58,095,238 additional shares of common stock at a price of $.00000125 per share for an aggregate of $72.62.
 
In April, the Company issued warrants to the aforementioned accredited investors to acquire 20,952,381 shares of common stock each from the Company at a price of $.00000125 for aggregate consideration of $26.19. The Options can only be exercised upon the funding of additional loans in the amount of $90,000 with simple interest of .25% per annum, all principal and interest due February 28, 2015 and in connection therewith receive the promissory notes of Company similar in form and substance to that issued in connection with the loans described above. The options expired 10 days after the first date the Company's website become operational.

Pursuant to the options described above, one non affiliated shareholder in September 2012 acquired 20,952,381 shares at a price of $.00000125 for aggregate consideration of $26.19. In connection as required in the option, the non-affiliated shareholder loaned us the additional sum of $90,000 with simple interest of .25% per annum, all principal and interest due February 28, 2015 pursuant to the terms of the OptionWarrant Agreement previously filed as an exhibit to our report on Form 10-Q for the period ending March 31, 2012.

In February 2013, we secured an additional loan of $150,000 from one of non-affiliated third parties above, due December 31, 2015. Interest on this accrues at one quarter percent (.25%) per annum, the applicable federal rate for transactions of this type as of the date of the note. The principal and accrued interest this loan are not due and payable until December 31, 2015. The principal balance on these loans may be prepaid at any time and from time to time. In addition, there is $0 remaining upon the Credit Lines from our officers and directors.

In connection with the February 2013 additional loan from the non-affiliated third party, we sold the lender who is an Accredited Investor 29,047,619 additional shares of common stock at a price of $.00000125 per share for an aggregate of $36.31.

On February 6, 2013, the Company issued an optiona Warrant to the aforementioned accredited investor to acquire 20,952,381 shares of common stock from the Company at a price of $.00000125 for aggregate consideration of $26.19. The OptionWarrant can only be exercised upon the funding of an additional loan in the amount of $75,000 with simple interest of .25% per annum, all principal and interest due December 31, 2015 and in connection therewith receive a promissory note of Company similar in form and substance to that issued in connection with the previous loan from this investor described above. The options expired 10 days after the first date the Company enlists 10,000 persons registered as consulting members for ChatChing (on the site or via the mobile app).
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At December 31, 2012, we had $26 in our bank account.  However, due to the financing activities described above, at February 8,May 5, 2013, we had $149,469$15,952 in our bank account. We anticipate our monthly burn rate for the next 12 months to be approximately $14,166$16,667 per month. Accordingly, we will need an estimated $20,523 in$164,371in addition to the cash on hand and available funds remaining on the lines of credit at February 8,May 5, 2013 to fund our business for the next 12 months.
 
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We estimate our capital requirements for the next 12 months to be approximately $200,000.
 

We anticipate becoming cash flow positive during the next 12 months with the currently available funds and that this cash flow will cover the $20,523$164,371 shortfall described above. Should we not reach positive cash flow as planned, we would need to secure additional funds from a future offering of our stock or other financing sources. However, this offering may not occur, or if it occurs, may not raise the required funding. We have no contracts, agreements or commitments for any other financing. Further, it is likely that any future financing efforts may be hindered as a result of our plans to issue a large number of shares to consultants in exchange for non-cash consideration as described in “Business,” in our Form 10-K for the fiscal year ended September 30, 2012.

If we fail to meet on-going SEC reporting requirements, we will be unable to use or continue to use our registration statement to continue to issue points and stock under our Qualified Member Stock Agreement.

Our independent auditor’s report expresses substantial doubt about our ability to continue as a going concern. We do not have any plans or specific agreements for new sources of fundingorfunding or any planned material acquisitions.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not required

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

The Company has established disclosure controls and procedures to ensure that information required to be disclosed in this quarterly report on Form 10-Q was properly recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms. The Company’s controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers to allow timely decisions regarding required disclosure.

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) at DecemberMarch 31, 20122013 based on the evaluation of these controls and procedures required by paragraph (b) of Rule 13a-15 or Rule 15d-15 under the Exchange Act. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, at DecemberMarch 31, 2012,2013, our disclosure controls and procedures are effective.

Changes in Internal Control over Financial Reporting

There have been no changes in the Company's internal control over financial reporting that occurred during the Company's last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.
 
 
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PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.
 
We are not aware of any pending or threatened legal proceedings in which we are involved. 

ITEM 1A. RISK FACTORS.
 
Not required
 
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Pursuant to the warrants issued in connection with loans in April 2012 described above, one non affiliated shareholder in September 2012 acquired 20,952,381 shares at a price of $.00000125 for aggregate consideration of $26.19. In connection as required in the option,Warrant the non-affiliated shareholder loaned us the additional sum of $90,000 with simple interest of .25% per annum, all principal and interest due February 28, 2015 pursuant to the terms of the OptionWarrant Agreement previously filed as an exhibit to our report on Form 10-Q for the period ending March 31, 2012.

In connection with the February 2013 additional loan from the non-affiliated third party described above, we sold the lender who is an Accredited Investor 29,047,619 additional shares of common stock at a price of $.00000125 per share for an aggregate of $36.31.

On February 6, 2013, the Company issued an optiona Warrant to the aforementioned accredited investor to acquire 20,952,381 shares of common stock from the Company at a price of $.00000125 for aggregate consideration of $26.19. The OptionWarrant can only be exercised upon the funding of an additional loan in the amount of $75,000 with simple interest of .25% per annum, all principal and interest due December 31, 2015 and in connection therewith receive a promissory note of Company similar in form and substance to that issued in connection with the previous loan from this investor described above. The warrants expired 10 days after the first date the Company enlists 10,000 persons registered as consulting members for ChatChing (on the site or via the mobile app).
 
The offer and sale of these securities were made in reliance on the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended.
 
We believed that Section 4(2) of the Securities Act of 1933 was available because:

oNone of these issuances involved underwriters, underwriting discounts or commissions.
oRestrictive legends were and will be placed on all certificates issued as described above.
oThe distribution did not involve general solicitation or advertising.
oThe distributions were made only to investors who were sophisticated enough to evaluate the risks of the investment.
 
 
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In connection with the above transactions, we provided the following to all investors:
 
oAccess to all our books and records.
oAccess to all material contracts and documents relating to our operations.
oThe opportunity to obtain any additional information, to the extent we possessed such information, necessary to verify the accuracy of the information to which the investors were given access.

Prospective investors were invited to review at our offices at any reasonable hour, after reasonable advance notice, any materials available to us concerning our business. Prospective Investors were also invited to visit our offices.
 
Share Return

In February 2013 the Board of Directors accepted offers from the following officers and directors to return for no additional consideration the following number of shares:

Steve Pfirman –
Steve Pfirman –29,047,619
Nick Palin –25,000,000
Total Returned –54,047,619
Nick Palin – 25,000,000
Total Returned – 54,047,619

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not Applicable.

ITEM 5. OTHER INFORMATION.

We have no information to disclose that was required to be in a report on Form 8-K during the period covered by this report, but was not reported. There have been no material changes to the procedures by which security holders may recommend nominees to our board of directors.
 
 
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ITEM 6. EXHIBITS.
 
Exhibit No. Document Description
   
10.1 Investment/Loan Documents February
Amended and Restated Lines of Credit of Palin and Pfirman
31.1CERTIFICATION of CEO/CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.
32.1 *CERTIFICATION of CEO/CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEYACT OF 2002
Exhibit 101Interactive data files formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Cash Flows, and (iv) the Notes to the Consolidated Financial Statements.**
101.INSXBRL Instance Document**
101.SCHXBRL Taxonomy Extension Schema Document**
101.CALXBRL Taxonomy Extension Calculation Linkbase Document**
101.DEFXBRL Taxonomy Extension Definition Linkbase Document**
101.LABXBRL Taxonomy Extension Label Linkbase Document**
101.PREXBRL Taxonomy Extension Presentation Linkbase Document**
______________
* This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 of the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

ChatChing, Inc., a Florida corporation

CHATCHING INC.
May 15, 2013By:/s/ Steve Pfirman
Steve Pfirman,
President
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the date indicated.
SIGNATURENAMETITLEDATE
/s/ Steve PfirmanSteve PfirmanChief Executive Officer, Principal Financial Officer,May 15, 2013
Principal Accounting Officer, Director
/s/ Nick PalinNick PalinDirectorMay 15, 2013
12
EXHIBIT INDEX
Exhibit No.Document Description
10.1
Amended and Restated Lines of Credit of Palin and Pfirman
   
31.1 CERTIFICATION of CEO/CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.
   
32.1 * CERTIFICATION of CEO/CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEYACT OF 2002
   
Exhibit 101  Interactive data files formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Cash Flows, and (iv) the Notes to the Consolidated Financial Statements.**
 
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**
____________________
* This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 of the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

 
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11
SIGNATURES

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

ChatChing, Inc., a Florida corporation

CHATCHING INC.
February 15, 2013By:/s/ Steve Pfirman
Steve Pfirman,
President
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the date indicated.
SIGNATURENAMETITLEDATE
/s/ Steve PfirmanSteve PfirmanChief Executive Officer, Principal Financial Officer,February 15, 2013
Principal Accounting Officer, Director
/s/ Nick PalinNick PalinDirectorFebruary 15, 2013

12
EXHIBIT INDEX
Exhibit No.Document Description
10.1Investment/Loan Documents February 2013
31.1CERTIFICATION of CEO/CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.
32.1 *CERTIFICATION of CEO/CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEYACT OF 2002
Exhibit 101 Interactive data files formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Cash Flows, and (iv) the Notes to the Consolidated Financial Statements.**
101.INSXBRL Instance Document**
101.SCHXBRL Taxonomy Extension Schema Document**
101.CALXBRL Taxonomy Extension Calculation Linkbase Document**
101.DEFXBRL Taxonomy Extension Definition Linkbase Document**
101.LABXBRL Taxonomy Extension Label Linkbase Document**
101.PREXBRL Taxonomy Extension Presentation Linkbase Document**
______
*  This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 of the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

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