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 quarterly period ended June 30, 2009
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period __________ to __________
COMMISSION FILE NUMBER: 333-134287
FIND THE WORLD INTERACTIVE, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
59-253 9657
(I.R.S. Employer Identification Number)
5449 Carnaby Place
Sechelt, B.C.
V0N 3A7
(Address of principal executive offices)
(604) 740-6302
(Registrant’s telephone number, including area code)
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 þ 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. (Check one):
| | | |
Large accelerated filer o | Accelerated filero | Non-accelerated filer o | Smaller reporting company þ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yesþ No o
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
| | |
| | |
Title of Each Class | | Outstanding at August 10, 2009 |
Common Shares, no par value per share | | 4,600,000 shares |
INDEX TO FORM 10-Q QUARTERLY REPORT
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
This Transition Report on Form 10-Q contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” the negative of such terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. We undertake no duty to update any of the forward-looking statements after the date of this report to conform such statements to actual results or to changes in our expectations.
Readers are also urged to carefully review and consider the various disclosures made by us which attempt to advise interested parties of the factors which affect our business, including without limitation the disclosures made under the caption “Management’s Discussion and Analysis or Plan of Operation” and under the caption “Risk Factors” included herein.
1
PART I FINANCIAL INFORMATION
Item 1.
Financial Statements
FIND THE WORLD INTERACTIVE INC.
(A Development Stage Company)
INTERIM FINANCIAL STATEMENTS
June 30, 2009
(Stated in US Dollars)
(Unaudited)
2
FIND THE WORLD INTERACTIVE INC.
(A Development Stage Company)
INTERIM BALANCE SHEETS
(Unaudited)
June 30, 2009 and December 31,2008
(Stated in US Dollars)
| | | |
ASSETS | | June 30, | December 31 |
| | 2009 | 2008 |
| | | |
Current | | | |
Cash | | $ 82 | $ 100 |
| | | |
| | | |
Current | | | |
Advance payable – Note 4 | | 21,496 | 15,764 |
Accounts payable | | 2,723 | 7,514 |
Due to related parties – Note 3 | | 36,241 | 30,364 |
| | | |
| | 60,460 | 53,642 |
| | | |
| | | |
Common stock | | | |
10,000,000 common shares authorized at $0.001 par value | | | |
4,600,000 common shares issued and outstanding | | 4,600 | 4,600 |
Additional paid-in capital | | 33,064 | 33,064 |
Deficit accumulated during the development stage | | (94,601) | (90,435) |
Cumulative effect of foreign exchange | | (3,441) | (771) |
| | | |
| | (60,378) | (53,542) |
| | | |
Total liabilities and stockholders’ deficiency | | $ 82 | $ 100 |
| | | |
3
FIND THE WORLD INTERACTIVE INC.
(A Development Stage Company)
INTERIM STATEMENTS OF OPERATIONS
(Unaudited)
for the quarter ended June 30, 2009 and 2008, and for the six months ended June 30, 2009 and 2008,
and the period August 28, 2000 (Date of Inception) to June 30, 2009
(Stated in US Dollars)
| | | | | | |
| | | | | August 28, 2000 |
| | | | | (Date of |
| Quarter ended | Six Months ended | Inception) to |
| June 30, | June 30, | June 30, |
| 2009 | 2008 | 2009 | 2008 | 2009 |
| | | | | |
Revenues | $ - | $ - | $ - - | $ - | $ 5,253 |
| | | | | |
Expenses | | | | | |
Accounting and legal fees | (1,270) | (1,246) | (1,270) | (1,246) | 51,380 |
Advertising and promotions | - | - | - | - | 1,790 |
Bank charges and interest | 67 | 76 | 144 | 145 | 1,267 |
Consulting fees | - | - | - | - | 21,039 |
Foreign exchange | 0 | 4 | 0 | (15) | (306) |
Office and miscellaneous | 4,437 | 1,855 | 5,292 | 2,064 | 24,683 |
| | | | | |
Net loss for the period | (3,233) | (689) | (4,166) | (947) | (94,601) |
| | | | | |
Foreign currency translation adjustment |
(0) |
(341) |
(2,669) | 1,518 | (3,441) |
| | | | | |
Comprehensive loss for the period | $ (3,233) | $ (1,030) | $ (6,835) | $ 571 | $ (98,042) |
| | | | | |
Basic and diluted loss per share | $ (0.00) | $ (0.00) | $ (0.00) | $ (0.00) | |
| | | | | |
Weighted average number of shares outstanding | 4,600,000 | 4,600,000 | 4,600,000 | 4,600,000 | |
| | | | | |
4
FIND THE WORLD INTERACTIVE INC.
(A Development Stage Company)
INTERIM STATEMENTS OF CASH FLOWS
for the six months ended June 30, 2009 and 2008,
and the period August 28, 2000 (Date of Inception) to June 30, 2009
(Stated in US Dollars)
| | | |
| | | August 28, 2000 |
| | | (Date of |
| Six Months ended | Inception) to |
| June 30, | June 30, |
| 2009 | 2008 | 2009 |
| | | |
Cash flows used in operating activities | | | |
Net loss for the period | $ (4,166) | $ (947) | $ (94,601) |
Add (deduct) items not affecting cash: | | | |
Common shares for payables for expenses | | | 33,413 |
Decrease (-) / Increase (+) in accounts payable | (4,792) | (12,208) | 2,723 |
| | | |
Cash used in operations | (8,958) | (13,155) | (58,465) |
| | | |
Cash flows from financing activities | | | |
Advance payable | 5,733 | 4,547 | 21,496 |
Common shares issued for cash | - | - | 4,250 |
Advances from related parties | 5,877 | 6,581 | 36,241 |
| | | |
Cash from financing activities | 11,610 | 11,128 | 61,987 |
| | | |
Cumulative effect of foreign exchange | (2,669) | 1,518 | (3,441) |
| | | |
Increase in cash during the period | (17) | (509) | 82 |
| | | |
Cash, beginning of the period | 100 | 567 | - |
| | | |
Cash, end of the period | $ 82 | $ 58 | $ 82 |
| | | |
| | | |
| | | |
Interest and taxes paid | $0.00 | $0.00 | $0.00 |
| | | |
| | | |
| | | |
| | | |
5
FIND THE WORLD INTERACTIVE INC.
(A Development Stage Company)
INTERIM STATEMENT OF STOCKHOLDERS’ DEFICIENCY
(Unaudited)
for the period August 28, 2000 (Date of Inception) to June 30, 2009
(Stated in US Dollars)
| | | | | | | | | | | | | | | | |
| | | | | | | Deficit | | | | |
| | | | | | | Accumulated | | Cumulative | | |
| | | | | Additional | | During the | | Effect of | | |
| Common Shares | | | | Paid-in | | Development Stage | | Foreign Exchange | | |
| Number | | Par Value | | Capital | Total |
| | | | | | | | | | | |
Capital stock issued for services | 20 | | $ | 1 | | $ | - | | $ | - | | $ | - | | $ | 1 |
Net loss for the period | - | | - | | - | | (72) | | - | | (72) |
Cumulative effect of foreign exchange | - | | - | | - | | | | 1 | | 1 |
| | | | | | | | | | | |
Balance as at December 31, 2000 | 20 | | 1 | | - | | (72) | | 1 | | (70) |
Net loss for the year | - | | - | | - | | (280) | | - | | (280) |
Cumulative effect of foreign exchange | - | | - | | - | | - | | 12 | | 12 |
| | | | | | | | | | | |
Balance as at December 31, 2001 | 20 | | 1 | | - | | (352) | | 13 | | (338) |
Net loss for the year | - | | - | | - | | (18,314) | | - | | (18,314) |
Cumulative effect of foreign exchange | - | | - | | - | | - | | 82 | | 82 |
| | | | | | | | | | | |
Balance as at December 31, 2002 | 20 | | 1 | | - | | (18,666) | | 95 | | (18,570) |
Net loss for the year | - | | - | | - | | (5,584) | | - | | (5,584) |
Cumulative effect of foreign exchange | - | | - | | - | | - | | (4,476) | | (4,476) |
| | | | | | | | | | | |
Balance as at December 31, 2003 | 20 | | 1 | | - | | (24,250) | | (4,381) | | (28,630) |
Net loss for the year | - | | - | | - | | (38) | | - | | (38) |
Cumulative effect of foreign exchange | - | | - | | - | | - | | (2,254) | | (2,254) |
| | | | | | | | | | | |
Balance as at December 31, 2004 | 20 | | 1 | | - | | (24,288) | | (6,635) | | (30,922) |
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| | | | | | | | | | | | | | | | |
Balance as at December 31, 2004 Shares issued for cash at $0.001 per share |
20 1,800,000 | |
1 1,800 | |
- | |
(24,288) - | |
(6,635) - | |
(30,922) 1,800 |
Shares issued for cash at $.10 per share | 24,500 | | 24 | | 2,426 | | | | | | 2,450 |
Shares issued for debt at $.012 per share | 2,775,480 | | 2,775 | | 30,638 | | | | | | 33,413 |
Net loss for the year | - | | - | | - | | (6,667) | | - | | (6,667) |
Cumulative effect of foreign exchange | - | | - | | - | | - | | (726) | | (726) |
Balance as at December 31, 2005 |
4,600,000 | |
4,600 | |
33,064 | |
(30,955) | |
(7,361) | |
(652) |
Net Loss for the year Cumulative effect of foreign exchange | - - | | - - | | - - | | (15,223) - | | - 459 | | (15,223) 459 |
Balance as at December 31, 2006 | 4,600,000 | | 4,600
- -
4,600 | | 33,064
- -
33,064 | | (46,178)
(33,376) -
(79,554) | | 4,600,000
- (5,246)
(12,148) | | 4,600
(33,376) (5,246)
(54,038) |
Net Loss for the year Cumulative effect of foreign exchange
Balance as at December 31, 2007 |
- -
4,600,000 | | | | | |
Net Loss for the year Cumulative effect of foreign exchange |
- - | |
- - | |
- - | |
(10,881) - | |
- 11,377 | |
(10,881) 11,377 |
Balance as at December 31, 2008 | 4,600,000 | | $ 4,600 | | | $ 33,064 | | | $ (90,435) | | | $ (771) | | | $ (53,542) |
Net Loss for the period Cumulative effect of foreign exchange |
- - | |
- - | |
- - | |
(4,166) - | |
- (2,669) | |
(4,166) (2,669) |
Balance as at June 30, 2009 | 4,600,000 | | $ 4,600 | | | $ 33,064 | | | $ (94,601) | | | $ (3,441) | | | $ (60,378) |
7
FIND THE WORLD INTERACTIVE INC.
(A Development Stage Company)
NOTES TO THE INTERIM FINANCIAL STATEMENTS
(Unaudited)
June 30, 2009
(Stated in US Dollars)
Note 1
Organization, Business and Basis of Presentation
Find the World Interactive Inc. (the “Company”) was incorporated in the State of Delaware, United States of America, on August 28, 2000 for the purpose of developing online internet community portals. During fiscal 2008, the Company had only nominal business activity. In addition to the internet community portal, management is considering other business ventures including those in the nature of a public shell corporation. The Company is in the development stage and has December 31 year end.
The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Article 10 of Regulation S-X under the Exchange Act. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.
However, except as disclosed herein, there has been no material changes in the information disclosed in the notes to the financial statements for the year ended December 31, 2008 included in the Company's Form 10-KSB filed with the Securities and Exchange Commission. The interim unaudited financial statements should be read in conjunction with those financial statements included in the Form 10-KSB. In the opinion of Management, all adjustments considered necessary for a fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the period ended June 30, 2009 are not necessarily indicative of the results that may be expected for the year ending December 31, 2008.
Note 2
Summary of Significant Accounting Policies
The following summary of significant accounting policies of the Company is presented to assist in understanding the financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the Unites States of America and have been consistently applied in the preparation of the financial statements.
Use of Estimates
Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates, which may have been made using careful judgment. Actual results may vary from these estimates. Significant estimate include the valuation of common shares issued to officers and directors during 2005.
Basis of Presentation – Going Concern
These financial statements have been prepared in accordance with generally accepted accounting principles in the United States applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next fiscal year. At June 30, 2009, the Company had not yet achieved profitable operations, has significant accumulated losses and working capital deficiencies, and expects to incur further losses in the development of its business, all of which casts substantial doubt about the Company’s ability to continue as a going concern.
8
Note 2
Summary of Significant Accounting Policies – (cont’d)
The Company’s ability to continue as a going concern is dependent upon raising sufficient funds in the short term to meet its existing obligations and pay its business liabilities as they arise, and to generate profitable operations in the future.
Management’s plans to address these concerns include continuing to obtain additional funds from related parties borrowings and through issuing its common shares equity, and pursuing its plan to become profitable through following its business plan in establishing online community internet portals.
There is no assurance of additional funding being available through these means or the establishment of profitable operations.
Realization values may be substantially different from carrying values as shown. Adjustments have not been made that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern, which, if made, would have an adverse impact on the Company’s financial condition.
Development Stage Company
The Company has not generated significant revenues from operations and is therefore considered to be a development stage company as defined in Statement of Financial Accounting Standards (“FAS”) No. 7. As a result, cumulative amounts for the statements of operations and cash flows are included from the date of inception, August 28, 2000.
Revenue Recognition
The Company recognizes revenue when it is earned, a contract exists, services have been provided and collection is reasonably assured. On service contracts having a term greater than one year, revenue is considered to be earned evenly over the life of the contract.
Provision for Taxes
Income taxes are provided for based on the liability method of accounting pursuant to Statement of Financial Accounting Standards No. 109 "Accounting for Income Taxes". Under this approach, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end. A valuation allowance is recorded against deferred tax assets since management cannot determine that the Company has met the "more likely than not" standard imposed by SFAS No. 109 to allow recognition of such as asset.
Basic Loss Per Share
Basic loss per share is computed using the weighted average number of shares outstanding during the periods.
Fair Value of Financial Instruments
The carrying values of the Company’s financial instruments, consisting of cash, accounts payable, and due to related parties approximate their fair values due to the short-term maturity of such instruments. It is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments.
9
Note 2
Summary of Significant Accounting Policies – (cont’d)
Foreign Currency Translation
The Company’s functional currency is in Canadian dollars as substantially all of the Company’s operations are in Canada. The Company uses the United States dollar as its reporting currency in accordance with the FAS No. 52 “Foreign Currency Translation”.
Assets and liabilities denominated in a foreign currency are translated at the exchange rate in effect at the period-end and capital accounts are translated at historical rates.
Income statement accounts are translated at the average rates of exchange prevailing during the period. Translation adjustments from the use of different exchange rates from period to period are included in the cumulative effect of foreign exchange account in Stockholder’s Deficiency.
Transactions undertaken in currencies other than the functional currency of the Company are translated using the exchange rate in effect as of the transaction date. Any exchange gains and losses are included in the Statement of Operations.
Recent Accounting Pronouncements
Management does not believe that there are any recently issued accounting pronouncements but not yet effective accounting standards that could have a material effect on the accompanying financial statements.
Reclassifications
Certain amounts from prior periods have been reclassified to conform to the current period presentation. This reclassification has not affected the Company's accumulated deficit or net losses presented.
Cash and Cash Equivalents
Cash and liquid debt instruments purchased with a remaining maturity of six months or less are considered cash for financial reporting purposes.
Note 3
Related Party Transactions
Amounts due to related parties consist of advances from a director and a significant stockholder, are unsecured, non-interest bearing and have no specific terms for repayment. During 2007, the Company sold the internet portal the Company had developed called www.findwhistler.com in Whistler, British Columbia, Canada, to a related party. There were no revenues or expenses associated with the sale. This internet portal was not carried as an asset for financial reporting purposes..
Note 4
Advance Payable
The Advanced payable is unsecured, non-interest bearing demand loan.
Note 5
Net Operating Loss Carryforward
At June 30, 2009, the Company had an estimated net operating loss (NOL) carryforward of approximately $80,000, an increase in Management’s December 31, 2008 estimate, adjusted for certain related party payables and certain other non deductible items available to reduce future taxable income, if any. The NOL carryforward begins to expire in 2020, and fully expires in 2024. Because management is unable to determine that it is more likely than not that the Company will realize the tax benefit related to the NOL carryforward (by having taxable income) a valuation allowance has been established at the balance sheet date to reduce the tax benefit asset value to zero.
10
RISK FACTORS
An investment in our common stock involves a number of very significant risks. You should carefully consider the following risks and uncertainties in addition to other information in this prospectus in evaluating our company and our business before purchasing shares of our company's common stock. Our business, operating results and financial condition could be seriously harmed due to any of the following risks. You could lose all or part of your investment due to any of these risks.
RISKS RELATED TO OUR BUSINESS
Our ability to implement our business strategy and achieve the intended operating results is subject to a number of risk and uncertainties, including the ones identified below, and additional risks not currently known to us or that we currently believe are immaterial.
WE LACK AN OPERATING HISTORY AND HAVE LOSSES WHICH WE EXPECT TO CONTINUE INTO THE FUTURE WHICH CAN LEAD TO THE FAILURE OF OUR BUSINESS
Our date of incorporation is August 28, 2000 and we have had minimal revenues of $5,253 and nominal operations to date. Our Cumulative net loss has increased from $90,435 (since inception to December 31, 2008) to $94,601 (since inception to June 30, 2009). The Company does not have adequate funding to allow us to continue our operations in full and expand our markets. We will continue to incur losses in the future and there is no assurance that we will generate significant revenues or become profitable.
OUR AUDITOR HAS EXPRESSED SUBSTANTIAL DOUBT AS TO OUR ABILITY TO CONTINUE AS A GOING CONCERN.
The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due.
Based on our financial history since inception, our auditor has expressed substantial doubt as to our ability to continue as a going concern. We are a development stage company that has generated limited revenues. We have only generated $5,253 in revenues and we have incurred a net loss since inception of $90,435 as at December 31, 2008. If we cannot generate sufficient sales from the sale of our products, we may not be able to implement our business plan and may be forced to cease our business activities.
WE HAVE A LIMITED OPERATING HISTORY THAT YOU CAN USE TO EVALUATE US, AND THE LIKELIHOOD OF OUR SUCCESS MUST BE CONSIDERED IN LIGHT OF THE PROBLEMS, EXPENSES, DIFFICULTIES, COMPLICATIONS AND DELAYS FREQUENTLY ENCOUNTERED BY A SMALL DEVELOPING COMPANY.
We have no significant assets or financial resources. The likelihood of our success must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered by a small developing company starting a new business enterprise and the highly competitive environment in which we will operate. Since we have a limited operating history of marketing our services to the public over the Internet, we cannot assure you that our business will be profitable or that we will ever generate sufficient revenues to meet our expenses and support our anticipated activities.
THE FACT THAT WE HAVE ONLY GENERATED LIMITED REVENUES SINCE OUR INCORPORATION RAISES SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN, AS INDICATED IN OUR INDEPENDENT AUDITORS’ REPORT IN CONNECTION WITH CONSOLIDATED FINANCIAL STATEMENTS.
We have generated limited revenues of $5,253 since our inception on August 28, 2000 and we have had minimal revenues over the past six years. Since we are still in the early stages of developing our company and because of the lack of operating history at December 31, 2008, our independent auditors’ report includes an explanatory paragraph about our ability to continue as a going concern.
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We will, in all likelihood, continue to incur operating expenses without significant revenues until our products and service gain significant popularity. We will not be able to expand our operations beyond current levels without generating significant revenues from our current operations or obtaining further financing. Our primary source of funds has been the sale of our common stock. We cannot assure that we will be able to generate enough interest in the sale and development of our community portals. If we cannot attract a significant customer base, we will not be able to generate any significant revenues or income. In addition, if we are unable to establish and generate material revenues, or obtain adequate future financing, our business will fail and you may lose some or all of your investment in our common stock. These circumstances raise substantial doubt about our ability to continue as a going concern as described in an explanatory parag raph to our independent auditors’ report on the financial statements for the year end December 31, 2008.
WE WILL REQUIRE FINANCING TO ACHIEVE OUR CURRENT BUSINESS STRATEGY AND OUR INABILITY TO OBTAIN SUCH FINANCING COULD PROHIBIT US FROM EXECUTING OUR BUSINESS PLAN AND CAUSE US TO SLOW DOWN OUR EXPANSION OF 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.
We estimate that we will need from $22,500 (see Management’s Discussion and Analysis or Results of Operations) to continue operations over the next twelve months in order to implement our strategy. No assurance can be given that the additional funds required to significantly expand our operations will be available or, if available, will be on commercially reasonable terms satisfactory to us. There can be no assurance that we will be able to obtain financing if and when it is needed on terms we deem acceptable.
If we are unable to obtain financing on reasonable terms, we could be forced to delay or scale back our plans for expansion. In addition, such inability to obtain financing on reasonable terms could have a material adverse effect on our business, operating results, or financial condition.
WE WILL REQUIRE ADDITIONAL FINANCING WHICH MAY REQUIRE THE ISSUANCE OF ADDITIONAL SHARES WHICH WOULD DILUTE THE OWNERSHIP HELD BY OUR SHAREHOLDERS
We will need to raise funds through either debt or sale of our shares in order to achieve our business goals. Although there are no present plans, agreements, commitments or undertakings with respect to the sale of additional shares or securities convertible into any such shares by us, any shares issued would further dilute the percentage ownership held by the stockholders.
OUR FUTURE SUCCESS IS DEPENDENT, IN PART, ON THE PERFORMANCE AND CONTINUED SERVICE OF GORDON CLAYTON, OUR SOLE OFFICER AND DIRECTOR. WITHOUT HIS CONTINUED SERVICE, WE MAY BE FORCED TO INTERRUPT OR EVENTUALLY CEASE OUR OPERATIONS.
We are presently dependent to a great extent upon the experience, abilities and continued services of Gordon Clayton, our sole officer and director. The loss of his services could have a material adverse effect on our business, financial condition or results of operation.
OUR SUCCESS DEPENDS UPON OUR ABILITY TO ATTRACT AND HIRE KEY PERSONNEL. OUR INABILITY TO HIRE QUALIFIED INDIVIDUALS WILL NEGATIVELY AFFECT OUR BUSINESS, AND WE WILL NOT BE ABLE TO IMPLEMENT OR EXPAND OUR BUSINESS PLAN.
Our business is greatly dependent on our ability to attract key personnel. We will need to attract, develop, motivate and retain highly skilled technical employees with internet experience. Competition for qualified personnel is intense and we may not be able to hire or retain qualified personnel. Our management has limited experience in recruiting key personnel, which may hurt our ability to recruit qualified individuals. If we are unable to retain such employees, we will not be able to implement or expand our business plan.
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AS AN INTERNET COMPANY, WE ARE IN AN INTENSELY COMPETITIVE INDUSTRY AND ANY FAILURE TO TIMELY IMPLEMENT OUR BUSINESS PLAN COULD DIMINISH OR SUSPEND OUR DEVELOPMENT AND POSSIBLY CEASE OUR OPERATIONS.
The online community industry is highly competitive and has few barriers to entry. Our main competitors include community online newspapers, existing community portal sites and online directory companies, such as the Yellow Pages. We can provide no assurance that additional competitors will not enter and setup online community portals. There are numerous other companies that currently offer similar services that have established user bases that are significantly larger than ours, and that have access to greater capital. If we are unable to efficiently and effectively institute our business plan as a result of intense competition or a saturated market, we may not be able to continue the development and enhancement of our web site and become profitable.
IF WE ARE UNABLE TO ESTABLISH A LARGE USER BASE WE MAY HAVE DIFFICULTY ATTRACTING ADVERTISERS TO OUR WEB SITE, WHICH WILL HINDER OUR ABILITY TO GENERATE ADVERTISING REVENUES, WHICH MAY AFFECT OUR ABILITY TO EXPAND OUR BUSINESS OPERATIONS AND OUR USER BASE.
An integral part of our business plan and marketing strategy requires us to establish a large internet user base by selling several community franchises. We will only be able to attract advertisers to our network of web sites and begin to generate significant advertising revenues if we can obtain a large enough audience to compete with other media services. If for any reason our portals are ineffective at attracting site visitors or if we are unable to continue to develop and update our web site to keep community interests satisfied with our service, our user base may decrease and our ability to generate advertising revenues may decline.
In order to implement our business plan, we will require success in attracting entrepreneurs to invest in our software and support services. We will also require that those community portals are successful in terms of attracting an advertising and listing base. If we are not able to attract potential franchisees or if our pilot communities are not able to secure a significant advertising base, we will be forced to suspend and eventually cease our business activities.
OUR MARKET IS CHARACTERIZED BY RAPID TECHNOLOGICAL CHANGE, AND IF WE FAIL TO DEVELOP AND MARKET NEW TECHNOLOGIES RAPIDLY, WE MAY NOT BECOME PROFITABLE IN THE FUTURE.
The internet industry is characterized by rapid technological change that could render our existing web site and technology obsolete. The development of our web sites entails significant technical and business risks. We can give no assurance that we will successfully use new technologies effectively or adapt our web site to customer requirements or needs. If our management is unable, for technical, legal, financial, or other reasons, to adapt in a timely manner in response to changing market conditions or customer requirements, we may never become profitable which may result in the loss of all or part of your investment.
IF WE ARE UNABLE TO PROTECT AND PURCHASE INTERNET DOMAIN NAMES UNDER OUR BRAND NAME, OUR EFFORTS TO INCREASE PUBLIC RECOGNITION OF OUR BRAND MAY BE IMPAIRED.
Our market strategy and branding is based on developing a recognized brand for the company using internet domain names under “www.find“_____”.com.” The acquisition and maintenance of domain names generally is regulated by governmental agencies and their designees. The regulation of domain names in Canada and in foreign countries is subject to change. As a result, we may be unable to acquire or maintain relevant domain names in all communities in which we intend to conduct business. This could impair our efforts to build brand recognition and to increase traffic to our website and sales. Furthermore, the relationship between regulations governing domain names and laws protecting trademarks and similar proprietary rights is unclear. Therefore, we may be unable to prevent third parties from acquiring domain names that are similar to our domain names, and infringing upon or ot herwise decreasing the value of any future trademarks or other proprietary rights that we may develop. We may need to bring legal claims to
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enforce or protect such intellectual property rights. Any litigation, whether successful or unsuccessful, could result in substantial costs and diversions of resources.
Any claims, by or against us, could be time consuming and costly to defend or litigate, divert our attention and resources and result in the loss of goodwill associated with our trade names.
BECAUSE WE DO MOT HAVE SUFFICIENT INSURANCE TO COVER OUR BUSINESS LOSSES, WE MIGHT HAVE UNINSURED LOSSSES, INCREASING THE POSSIBILITY THAT YOU WOULD LOOSE YOUR INVESTMENT
We may incur uninsured liabilities and losses as a result of the conduct of our business. We do not currently maintain any comprehensive insurance. Even if we obtain such insurance in the future, we may not carry sufficient insurance coverage to satisfy potential claims. We do not carry any business interruption insurance. Should uninsured losses occur, any purchasers of our common stock could loose their entire investment.
BECAUSE WE CAN ISSUE ADDITIONAL COMMON SHARES, PURCHASERS OF OUR COMMON STOCK MAY INCUR IMMEDIATE DILUTION AND MAY EXPERIENCE FURTHER DILUTION.
We are authorized to issue up to 10,000,000 common shares, of which 4,600,000 are issued and outstanding. Our board of directors has the authority to cause our company to issue additional shares of common stock without the consent of any of our shareholders. Consequently, our shareholders may experience more dilution in their ownership of our company in the future.
SINCE OUR OFFICERS AND DIRECTORS RESIDE OUTSIDE OF THE UNITED STATES, IT MAY BE DIFFICULT, IF NOT IMPOSSIBLE, FOR AN INVESTOR TO ENFORCE A JUDGMENT FROM A UNITED STATES COURT BASED ON UNITED STATES LAW IN A CANADIAN COURT AGAINST US OR OUR OFFICERS OR DIRECTORS.
Our directors and officers reside in Canada. Because all or a substantial portion of our assets and the assets of these persons are located outside the United States, it may be difficult for an investor to sue, for any reason, us or any of our directors or officers outside the United States. If an investor was able to obtain a judgment against us or any of our directors or officers in a United States court based on United States securities laws or other reasons, it may be difficult, if not impossible, to enforce such judgment in Canada.
We have been advised by our Canadian counsel that there is doubt as to the enforceability, in original actions in Canadian courts, of liability based upon the United States Federal securities laws and as to the enforceability in Canadian courts of judgments of United States courts obtained in actions based upon the civil liability provisions of the United States Federal securities laws. Therefore, it may not be possible to enforce those actions against us or any of our directors or officers.
WE DO NOT EXPECT TO PAY DIVIDENDS AND INVESTORS SHOULD NOT BUY OUR COMMON STOCK EXPECTING TO RECEIVE DIVIDENDS
We have not paid any dividends on our common stock in the past, and do not anticipate that we will declare or pay any dividends in the foreseeable future. Consequently, you will only realize an economic gain on your investment in our common stock if the price appreciates. You should not purchase our common stock expecting to receive cash dividends. Since we do not pay dividends, and if we are not successful in having our shares listed or quoted on any exchange or quotation system, then you may not have any manner to liquidate or receive any payment on your investment. Therefore our failure to pay dividends may cause you to not see any return on your investment even if we are successful in our business operations. In addition, because we do not pay dividends we may have trouble raising additional funds which could affect our ability to expand out business operations.
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Item 2.
Management's Discussion and Analysis or Plan of Operation.
The following discussion relates to the consolidated operations of our company for the six months ended June 30, 2009.
Results of Operations for the Six Months Ended June 30, 2009
Revenues: Total revenues for the six month period June 30, 2009 were none. Revenues of $5,523 since inception of were mainly generated through advertising and promotions initiatives.
Operating Expenses: Since inception to June 30, 2009, significant expenses incurred were for consulting fees of $21,039, accounting & legal fees of $51,380, and office & administrative expenses for $24,683. Contractors were hired for sales and marketing efforts to jump-start the business strategies and objectives of the company. Legal fees incurred were for incorporation of the company and legal consulting fees. No other unusual or material expenses were incurred. It has been noted that the company directors were incurring expenses in cash and checks form, which is detailed separately in the consolidated financials. For the year end December 31, 2008 the operating expense of $10,882 were largely due to office & administrative expenses for $3,260 and accounting & legal fees of $7,369.
Results of Operations: Cumulative net loss since inception to June 30, 2009 is $94,601. The cumulative loss has being funded by the existing shareholders and principals. We incurred a net loss of $4,166 for the six months ended June 30, 2009.
Plan of Operations
The following discussion should be read in conjunction with our unaudited financial statements and the related notes that appear elsewhere in this form. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this form, particularly in the section entitled "Risk Factors" beginning on page 11 of this registration statement.
Our unaudited financial statements are stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles.
Future Operations
Management projects that we will require a minimum of $22,500 to fund our operating expenditures for the next twelve month period. Projected working capital requirements for the next twelve month period, are broken down as follows:
Estimated Working Capital Expenditures During the Next Twelve Month Period:
| |
Marketing | $6,000 |
General and Administrative | $1,200 |
Legal and Accounting | $10,000 |
Assets | $2,000 |
Working Capital | $1,300 |
Total | $22,500 |
Our focus will to be to continue the development of our community products and services by focusing on FTW over the next 12 months, so that FTW can be used as a reference model to be sold into other targeted communities.
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Franchising
Franchising is considered a future primary revenue stream, although the value of these franchises will be determined by various market factors like size of market and competition in marketplace which the franchise operates in. Franchises offer short term revenue and long term service contracts.
Liquidity and Capital Resources
Presently, our revenue is not sufficient to meet our operating and capital expenses. Management projects that we will require additional funding to expand our current operations.
There is some doubt about our ability to continue as a going concern as the continuation of our business is dependent upon successful and sufficient market acceptance of our products and maintaining a break even or profitable level of operations.
As at the six months periodend June 30, 2009, the Company has not yet achieved profitable operations, has had accumulated net losses of $94,601since its inception, has a working capital deficiency of $60,378 and expects to incur further losses in the development of its business. Our cash on hand as at June 30, 2009 was $82.
We require funds to enable us to address our minimum current and ongoing expenses, continue with marketing and promotion activity connected with the development and marketing of our products and enable limited expansion of our community products and services. We anticipate that our cash on hand and the revenue that we anticipate generating going forward from our operations may not be sufficient to satisfy all of our cash requirements for the next twelve month period. If we require any additional monies during this time, we plan to raise any such additional capital primarily through the private placement of our securities.
Due to the uncertainty of our ability to meet our current operating and capital expenses, in their report on our audited financial statements for the year end December 31, 2008, our independent auditors included an explanatory paragraph regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that led to this disclosure by our independent auditors. There is substantial doubt about our ability to continue as a going concern as the continuation and expansion of our business is dependent upon obtaining further financing, successful and sufficient market acceptance of our products, and, finally, achieving a profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, wi ll increase our liabilities and future cash commitments.
The financial requirements of our company for the next twelve months are primarily dependent upon the financial support through credit facilities of our director and additional private placements of our equity securities to our director and shareholders or new shareholders. The issuance of additional equity securities by us may result in a significant dilution in the equity interests of our current shareholders.
Our company has determined that we may not have sufficient working capital for the next twelve month period and has the intention to pursue such financing options. There is no assurance that we will be able to obtain further funds required for our continued operations or that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms.
If we are not able to obtain the additional financing on a timely basis, we will not be able to meet our other obligations as they become due and we will be forced to scale down or perhaps even cease our operations. We do not currently have any plans to merge with another company, and we have not entered into any agreements or understandings for any such merger.
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Item 3. Controls and Procedures
As required by Rule 13a-15 under the Exchange Act, as of the end of the period covered by this quarterly report, being June 30, 2009, we have carried out an evaluation of the effectiveness of the design and operation of our company's disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of our management, including our president and chief executive officer. Based upon that evaluation, our president and chief executive officer concluded that our disclosure controls and procedures are effective as of the end of the period covered by this report. There have been no significant changes in our internal controls over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect our internal controls over financial reporting.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our company's reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our president and chief executive officer as appropriate, to allow timely decisions regarding required disclosure.
PART II OTHER INFORMATION
Item 1.
Legal Proceedings
Our directors, principal executive officers and control persons have not been involved in any of the following events during the past five years:
1.
any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
2.
any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
3.
being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or
4.
being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.
Item 2.
Recent Sales of Unregistered Securities
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
(a)
Exhibits
(b)
Reports on Form 8-K
None.
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.
Find The World Interactive, Inc.
Dated: August 10, 2009
/s/ Gordon Clayton
---------------------------
Gordon Clayton
President, Secretary, Treasurer
Chief Executive Officer and Director
(Principal Executive Officer,
Principal Financial Officer and
Principal Accounting Officer)
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