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 June 30, 2009
¨ | 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: 333-148722
MAX CASH MEDIA, INC.
(Exact name of registrant as specified in its charter)
Nevada | 02-0811868 | |
(State or other jurisdiction of incorporation) | (I.R.S. Employer Identification No.) |
50 Brompton Road, Apt. 1X
Great Neck, NY 11021
(Address of principal executive offices)
(646) 303-6840
(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 x No ¨
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 ¨ No ¨
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 filer ¨ | Accelerated filer ¨ | Non-accelerated filer ¨ | Smaller reporting company x | |||
(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 x No ¨
There were 6,370,000 shares of the issuer’s common stock outstanding as of August 12, 2009.
MAX CASH MEDIA, INC.
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2009
INDEX
PAGE | ||
PART I - FINANCIAL INFORMATION | ||
Item 1. | Financial Statements | 3 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 13 |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 18 |
Item 4T. | Controls and Procedures | 18 |
PART II - OTHER INFORMATION | ||
Item 1. | Legal Proceedings | 19 |
Item 1A. | Risk Factors | 19 |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 19 |
Item 3. | Defaults Upon Senior Securities | 19 |
Item 4. | Submission of Matters to a Vote of Security Holders | 19 |
Item 5. | Other Information | 19 |
Item 6. | Exhibits | 19 |
SIGNATURES |
2
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
PAGE | ||||
Condensed Balance Sheets as of June 30, 2009 (unaudited) and | ||||
as of September 30, 2008 | 4 | |||
Condensed Statements of Operations for the three and nine month periods | ||||
ended June 30, 2009 and June 30, 2008 (unaudited) and | ||||
for the period from July 9, 2007 (Inception) to June 30, 2009 (unaudited) | 5 | |||
Condensed Statement of Changes in Stockholders’ Equity/(Deficiency) | ||||
for the period from July 9, 2007 (Inception) to June 30, 2009 (unaudited) | 6 | |||
Condensed Statements of Cash Flows for the nine month periods | ||||
ended June 30, 2009 and June 30, 2008 (unaudited) and | ||||
for the period from July 9, 2007 (Inception) to June 30, 2009 (unaudited) | 7 | |||
Notes to Condensed Financial Statements (unaudited) | 8 |
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Max Cash Media, Inc.
(A Development Stage Company)
Condensed Balance Sheets
June 30, | ||||||||
2009 | September 30, | |||||||
(Unaudited) | 2008 | |||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash | $ | 463 | $ | 3,033 | ||||
Prepaid Expense | - | 4,167 | ||||||
Total Assets | $ | 463 | $ | 7,200 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIENCY) | ||||||||
Current Liabilities | ||||||||
Accounts Payable | $ | 12,358 | $ | 6,500 | ||||
Loan payable | 4,585 | - | ||||||
Total Liabilities | 16,943 | 6,500 | ||||||
Commitments and Contingencies | ||||||||
Stockholders' Equity /(Deficiency) | ||||||||
Preferred stock, $0.001 par value; 10,000,000 shares authorized, | ||||||||
none issued and outstanding | - | - | ||||||
Common stock, $0.001 par value; 100,000,000 shares authorized, 6,370,000 and 6,370,000 | ||||||||
issued and outstanding, respectively | 6,370 | 6,370 | ||||||
Additional paid-in capital | 145,773 | 138,823 | ||||||
Deficit accumulated during the development stage | (168,623 | ) | (144,493 | ) | ||||
Total Stockholders' Equity/(Deficiency) | (16,480 | ) | 700 | |||||
Total Liabilities and Stockholders' Equity/(Deficiency) | $ | 463 | $ | 7,200 |
See accompanying notes to condensed unaudited financial statements
4
Max Cash Media, Inc.
(A Development Stage Company)
Condensed Statements of Operations
(Unaudited)
For the Three Months Ended | For the Nine Months Ended | For the period from July 9, 2007 | ||||||||||||||||||
June 30, 2009 | June 30, 2008 | June 30, 2009 | June 30, 2008 | (inception) to June 30, 2009 | ||||||||||||||||
Operating Expenses | ||||||||||||||||||||
Professional fees | $ | 3,909 | $ | 29,871 | $ | 15,186 | $ | 105,541 | $ | 141,693 | ||||||||||
General and administrative | 1,230 | 5,777 | 8,944 | 8,948 | 27,795 | |||||||||||||||
Total Operating Expenses | 5,139 | 35,648 | 24,130 | 114,489 | 169,488 | |||||||||||||||
Loss from Operations | (5,139 | ) | (35,648 | ) | (24,130 | ) | (114,489 | ) | (169,488 | ) | ||||||||||
Other Income | ||||||||||||||||||||
Interest Income | - | 26 | - | 865 | 865 | |||||||||||||||
LOSS FROM OPERATIONS BEFORE INCOME TAXES | (5,139 | ) | (35,622 | ) | (24,130 | ) | (113,624 | ) | (168,623 | ) | ||||||||||
Provision for Income Taxes | - | - | - | - | - | |||||||||||||||
NET LOSS | $ | (5,139 | ) | $ | (35,622 | ) | $ | (24,130 | ) | $ | (113,624 | ) | $ | (168,623 | ) | |||||
Net Loss Per Share - Basic and Diluted | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.00 | ) | $ | (0.02 | ) | ||||||||
Weighted average number of shares outstanding | ||||||||||||||||||||
during the year/period - Basic and Diluted | 6,370,000 | 6,370,000 | 6,370,000 | 6,341,898 |
See accompanying notes to condensed unaudited financial statements
5
Max Cash Media, Inc.
(A Development Stage Company)
Condensed Statement of Changes in Stockholders’ Equity/(Deficiency)
For the period from July 9, 2007 (Inception) to June 30, 2009
(Unaudited)
Deficit | ||||||||||||||||||||||||||||||||
Preferred Stock | Common stock | Additional | accumulated during the | Total | ||||||||||||||||||||||||||||
paid-in | development | Subscription | Stockholder's | |||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | capital | stage | Receivable | Equity/(Deficiency) | |||||||||||||||||||||||||
Balance July 9, 2007 | - | $ | - | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||
Common stock issued for services to founder ($0.001) | - | - | 5,000,000 | 5,000 | - | - | - | 5,000 | ||||||||||||||||||||||||
Common stock issued for cash ($0.10/ per share) | - | - | 255,000 | 255 | 25,245 | - | (25,500 | ) | - | |||||||||||||||||||||||
In kind contribution of services | - | - | - | - | 593 | - | - | 593 | ||||||||||||||||||||||||
Net loss for the period July 9, 2007 (inception) to September 30, 2007 | - | - | - | - | - | (16,593 | ) | - | (16,593 | ) | ||||||||||||||||||||||
Balance, September 30, 2007 | - | - | 5,255,000 | 5,255 | 25,838 | (16,593 | ) | (25,500 | ) | (11,000 | ) | |||||||||||||||||||||
Common stock issued for cash ($0.10/ per share) | - | - | 1,115,000 | 1,115 | 110,385 | - | - | 111,500 | ||||||||||||||||||||||||
Cash received for subscription receivable | - | - | - | - | - | - | 25,500 | 25,500 | ||||||||||||||||||||||||
In kind contribution of services | - | - | - | - | 2,600 | - | - | 2,600 | ||||||||||||||||||||||||
Net loss for the year ended September 30, 2008 | - | - | - | - | - | (127,900 | ) | - | (127,900 | ) | ||||||||||||||||||||||
Balance, September 30, 2008 | - | - | 6,370,000 | 6,370 | 138,823 | (144,493 | ) | - | 700 | |||||||||||||||||||||||
In kind contribution of services | - | - | - | - | 1,950 | - | - | 1,950 | ||||||||||||||||||||||||
Forgiveness of a third party account payable | 5,000 | 5,000 | ||||||||||||||||||||||||||||||
Net loss for the nine month's ended June 30, 2009 | - | - | - | - | - | (24,130 | ) | - | (24,130 | ) | ||||||||||||||||||||||
Balance, June 30, 2009 | - | $ | - | 6,370,000 | $ | 6,370 | $ | 145,773 | $ | (168,623 | ) | $ | - | $ | (16,480 | ) |
See accompanying notes to condensed unaudited financial statements
6
Max Cash Media, Inc.
(A Development Stage Company)
Condensed Statements of Cash Flows
(Unaudited)
For the Nine Months Ended | For the Period from July 9, 2007 | |||||||||||
June 30, 2009 | June 30, 2008 | (Inception) to June 30, 2009 | ||||||||||
Cash Flows Used in Operating Activities: | ||||||||||||
Net Loss | $ | (24,130 | ) | $ | (113,624 | ) | $ | (168,623 | ) | |||
Adjustments to reconcile net loss to net cash used in operations | ||||||||||||
In-kind contribution of services | 1,950 | 1,950 | 5,143 | |||||||||
Shares issued to founder for services | - | - | 5,000 | |||||||||
Changes in operating assets and liabilities: | ||||||||||||
Increase (Decrease) in prepaid expenses | 4,167 | (11,667 | ) | - | ||||||||
(Decrease) Increase in accounts payable and accrued expenses | 10,858 | (8,292 | ) | 17,358 | ||||||||
Net Cash Used In Operating Activities | (7,155 | ) | (131,633 | ) | (141,122 | ) | ||||||
Cash Flows From Financing Activities: | ||||||||||||
Proceeds from a loan | 4,585 | - | 4,585 | |||||||||
Proceeds from loan payable- Related party | - | - | 1,100 | |||||||||
Repayment of loan payable - Related party | - | (1,100 | ) | (1,100 | ) | |||||||
Proceeds from issuance of common stock | - | 137,000 | 137,000 | |||||||||
Net Cash Provided by Financing Activities | 4,585 | 135,900 | 141,585 | |||||||||
Net Increase/(Decrease) in Cash | (2,570 | ) | 4,267 | 463 | ||||||||
Cash at Beginning of Year/Period | 3,033 | 100 | - | |||||||||
Cash at End of Year/Period | $ | 463 | $ | 4,367 | $ | 463 | ||||||
Supplemental disclosure of cash flow information: | ||||||||||||
Cash paid for interest | $ | - | $ | - | $ | - | ||||||
Cash paid for taxes | $ | 120 | $ | - | $ | 120 | ||||||
Supplemental disclosure of non-cash investing and financing activities: | ||||||||||||
Forgiveness of Accounts Payable | $ | 5,000 | $ | - | $ | 5,000 |
See accompanying notes to condensed unaudited financial statements
7
MAX CASH MEDIA, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
AS OF JUNE 30, 2009
(UNAUDITED)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
(A) Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the Securities and Exchange Commission for interim financial information. Accordingly, they do not include all the information necessary for a comprehensive presentation of financial position and results of operations.
It is management’s opinion, however that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statements presentation. The results for the interim period are not necessarily indicative of the results to be expected for the year.
Activities during the development stage include developing the business plan and raising capital.
(B) Use of Estimates
In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates.
(C) Cash and Cash Equivalents
The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. At June 30, 2009 and September 30, 2008, the Company had no cash equivalents.
(D) Loss Per Share
Basic and diluted net loss per common share is computed based upon the weighted average common shares outstanding as defined by Financial Accounting Standards No. 128, “Earnings Per Share.” As of June 30, 2009 and 2008, there were no common share equivalents outstanding.
8
MAX CASH MEDIA, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
AS OF JUNE 30, 2009
(UNAUDITED)
(E) Income Taxes
The Company accounts for income taxes under the Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes” (“SFAS 109”). Under SFAS 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under SFAS 109, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
(F) Business Segments
The Company operates in one segment and therefore segment information is not presented.
(G) Revenue Recognition
The Company will recognize revenue on arrangements in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements” and No. 104, “Revenue Recognition”. In all cases, revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured.
(H) Recent Accounting Pronouncements
In May 2009, the FASB issued SFAS No. 165 “Subsequent Events” (“SFAS 165”). SFAS 165 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. SFAS 165 sets forth (1) The period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, (2) The circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements and (3) The disclosures that an entity should make about events or transactions that occurred after the balance sheet date. SFAS 165 is effective for interim or annual financial periods ending after June 15, 2009. The adoption of this statement did not have a material effect on the financial statements.
In June 2009, the FASB issued SFAS No. 166 “Accounting for Transfers of Financial Assets—an amendment of FASB Statement No. 140” (“SFAS 166”). SFAS 166 improves the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial statements about a transfer of financial assets; the effects of a transfer on its financial position, financial performance, and cash flows; and a transferor’s continuing involvement, if any, in transferred financial assets. SFAS 166 is effective as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period and for interim and annual reporting periods thereafter. The Company is evaluating the impact the adoption of SFAS 166 will have on its financial statements.
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MAX CASH MEDIA, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
AS OF JUNE 30, 2009
(UNAUDITED)
In June 2009, the FASB issued SFAS No. 167 “Amendments to FASB Interpretation No. 46(R)” (“SFAS 167”). SFAS 167 improves financial reporting by enterprises involved with variable interest entities and to address (1) the effects on certain provisions of FASB Interpretation No. 46 (revised December 2003), “Consolidation of Variable Interest Entities”, as a result of the elimination of the qualifying special-purpose entity concept in SFAS 166 and (2) constituent concerns about the application of certain key provisions of Interpretation 46(R), including those in which the accounting and disclosures under the Interpretation do not always provide timely and useful information about an enterprise’s involvement in a variable interest entity. SFAS 167 is effective as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period, and for interim and annual reporting periods thereafter. The Company is evaluating the impact the adoption of SFAS 167 will have on its financial statements.
In June 2009, the FASB issued SFAS No. 168 “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles—a replacement of FASB Statement No. 162”. The FASB Accounting Standards Codification (“Codification”) will be the single source of authoritative nongovernmental U.S. generally accepted accounting principles. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. SFAS 168 is effective for interim and annual periods ending after September 15, 2009. All existing accounting standards are superseded as described in SFAS 168. All other accounting literature not included in the Codification is nonauthoritative. The Codification is not expected to have a significant impact on the Company’s financial statements.
NOTE 2 STOCKHOLDERS’ EQUITY
(A) Common Stock Issued for Cash
During October 2007, the Company issued 1,115,000 shares of common stock for $111,500 ($0.10/share).
During October 2007, the Company collected $25,500 ($0.10/share) for the sale of 255,000 shares of common stock made during the period from July 9, 2007 (inception) through September 30, 2007.
10
MAX CASH MEDIA, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
AS OF JUNE 30, 2009
(UNAUDITED)
(B) In-Kind Contribution
Effective December 31, 2008, the Company forgave the third party account payable in the amount of $5,000. The amount has been reclassified as an additional paid in capital and an in kind contribution of services. (See Notes 3 and 4)
For the nine months ended June 30, 2009, a shareholder of the Company contributed services having a fair value of $1,950 (See Note 4).
For the year ended September 30, 2008, a shareholder of the Company contributed services having a fair value of $2,600 (See Note 4).
For the year ended September 30, 2007 the shareholder of the Company contributed services having a fair value of $593 (See Note 4).
(C) Stock Issued for Services
On July 9, 2007, the Company issued 5,000,000 shares of common stock to its founder having a fair value of $5,000 ($0.001/share) in exchange for services provided (See Note 4).
NOTE 3 FORGIVENESS OF A PAYABLE
Effective December 31, 2008, the Company forgave the third party account payable in the amount of $5,000. The amount has been reclassified as an additional paid in capital and an in kind contribution of services (See Notes 2(B) and 4).
NOTE 4 LOAN PAYABLE
As of June 30, 2009, the Company owes $4,585 to an unrelated third party for expenses paid on behalf of the Company. The loan was repaid in full during August 2009.
NOTE 5 COMMITMENTS
On October 15, 2007, the Company entered into a consulting agreement to receive administrative and other miscellaneous services. The Company is required to pay $7,500 a month. The agreement was to remain in effect unless either party desired to cancel the agreement. This agreement has been terminated as of July 31, 2008. In addition, the payment due for the month of July has been reduced to $5,000 by mutual agreement of both parties. Effective December 31, 2008, the amount of $5,000 has been forgiven (See Notes 2(B) and 3).
11
MAX CASH MEDIA, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
AS OF JUNE 30, 2009
(UNAUDITED)
NOTE 6 RELATED PARTY TRANSACTIONS
For the nine months ended June 30, 2009, a shareholder of the Company contributed services having a fair value of $1,950 (See Note 2(B)).
For the year ended September 30, 2008 the shareholder of the Company contributed services having a fair value of $2,600 (See Note 2(B)).
For the year ended September 30, 2007, the Company received $1,100 from a principal stockholder. Pursuant to the terms of the loan, the loan is non interest bearing, unsecured and due on demand. The loan was repaid on October 23, 2007.
For the year ended September 30, 2007, the shareholder of the Company contributed services having a fair value of $593 (See Note 2(B)).
On July 9, 2007, the Company issued 5,000,000 shares of common stock to its founder having a fair value of $5,000 ($0.001/share) in exchange for services provided (See Note 2B)).
NOTE 7 GOING CONCERN
As reflected in the accompanying financial statements, the Company is in the development stage with no operations, used cash in operations of $141,122 from inception and has a net loss since inception of $168,623. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern.
NOTE 8 SUBSEQUENT EVENTS
In preparing these financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through August 5, 2009, the date the financial statements were issued.
On July 28, 2009, the Company issued a convertible promissory note in the amount of $50,000 due January 28, 2011 and bearing interest at a rate of 9% per annum. All debt can be converted into shares at a conversion price to be mutually determined by the Company and the holder of the note.
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ITEM 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operation |
Statement Regarding Forward-Looking Information
This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts included in this Quarterly Report on Form 10-Q, including without limitation, statements in this Management’s Discussion and Analysis of Financial Condition and Results of Operations regarding our financial position, estimated working capital, business strategy, the plans and objectives of our management for future operations and those statements preceded by, followed by or that otherwise include the words “believe”, “expects”, “anticipates”, “intends”, “estimates”, “projects”, “target”, “goal”, “plans”, “objective”, “should”, or similar expressions or variations on such expressions are forward-looking statements. We can give no assurances that the assumptions upon which the forward-looking statements are based will prove to be correct. Because forward-looking statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by the forward-looking statements.
Actual operations and results may materially differ from present plans and projections due to changes in economic conditions, new business opportunities, changed business conditions, and other developments. Other factors that could cause results to differ materially are described in our filings with the Securities and Exchange Commission.
The following are factors that could cause actual results or events to differ materially from those anticipated, and include, but are not limited to general economic, financial and business conditions, changes in and compliance with governmental laws and regulations, including various state and federal environmental regulations, our ability to obtain additional financing from outside investors and/or bank and mezzanine lenders; and our ability to generate sufficient revenues to cover operating losses and position us to achieve positive cash flow.
Readers are cautioned not to place undue reliance on the forward-looking statements contained herein, which speak only as of the date hereof. We believe the information contained in this Form 10-Q to be accurate as of the date hereof. Changes may occur after that date. We will not update that information except as required by law in the normal course of its public disclosure practices.
Additionally, the following discussion regarding our financial condition and results of operations should be read in conjunction with the financial statements and accompanying notes included in Item 1 of Part I of this Quarterly Report on Form 10-Q.
Limited Operating History
We have not begun operations, and we require outside capital to implement our business model.
13
We have generated less than two full years of financial information and have not previously demonstrated that we will be able to expand our business through increased investment marketing. We cannot guarantee that the expansion efforts described in this report will be successful. Our business is subject to risks inherent in growing an enterprise, including limited capital resources and possible rejection of our acquired properties.
Future financing may not be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue expanding our operations. Equity financing will result in a dilution to existing shareholders.
Results of Operations
We incurred operating losses of $5,139 and $24,130 for the three and nine month periods ended June 30, 2009, respectively, compared to operating losses of $35,622 and $113,624 for the three and nine month periods ended June 30, 2008. The decrease in operating losses for the three and nine month periods ended June 30, 2009 was mainly due to cutting back our operating expenses and reduced professional fees, which in 2008 included costs involved with our registration statement. We incurred an operating loss of $168,623 for the period from July 9, 2007 (date of inception) through June 30, 2009 and have not generated any operating revenues since inception. We anticipate that we will not generate any operating revenues until we are able to raise additional capital for funding our operations.
As of June 30, 2009, we had total assets of $463, consisting of cash. Net loss for the three months ended June 30, 2009 was $5,139. Expenses were comprised of $3,909 in professional fees and $1,230 in general and administrative expenses.
For the year ended September 30, 2008, we had total assets of $7,200. Net loss since inception through June 30, 2009 was $168,623. Expenses were comprised of $141,693 in professional fees and $27,795 in general and administrative expenses, offset by interest income of $865.
We believe that we will need additional funding to satisfy our cash requirements for the next twelve months. Completion of our plan of operation is subject to attaining adequate revenue. We cannot assure investors that additional financing will be available. In the absence of additional financing, we may be unable to proceed with our plan of operations.
Revenues
We have not generated any revenues from operations for the period from July 9, 2007 (date of inception) through June 30, 2009.
Operating Loss
The main components of our operating losses during the three and nine month periods ended June 30, 2009 and 2008, and for the period from July 9, 2007 (date of inception) through June 30, 2009 were as follows:
14
Three Months Ended June 30, | Nine Months Ended June 30, | For the Period from July 9, 2007 (inception) through June 30, | ||||||||||||||||||
2009 | 2008 | 2009 | 2008 | 2009 | ||||||||||||||||
Professional fees | $ | 3,909 | $ | 29,871 | $ | 15,186 | $ | 105,541 | $ | 141,693 | ||||||||||
General and administrative expenses | $ | 1,230 | $ | 5,777 | $ | 8,944 | $ | 8,948 | $ | 27,795 |
The operating loss for the period from July 9, 2007 (date of inception) through June 30, 2009 amounted to $169,488 primarily due to the factors discussed above.
Interest income was $0 for the three and nine months ended June 30, 2009, as compared to interest income of $26 and $865 for the three and nine months ended June 30, 2008, respectively. The decrease in interest income for the three and nine month periods ended June 30, 2009 was mainly due to lower average cash balances held in bank deposits during the three and nine month periods ended June 30, 2009. Interest income for the period from July 9, 2007 (date of inception) through June 30, 2009 amounted to $865.
Net Loss
We incurred net losses in the amounts of $5,139 and $24,130 for the three and nine periods ended June 30, 2009, respectively, as compared to net losses of $35,622 and $113,624 for the three and nine month periods ended June 30, 2008 as discussed above. We incurred a net loss in the amount of $168,623 for the period from July 9, 2007 (date of inception) through June 30, 2009.
Liquidity and Capital Resources
We will need substantial amounts of capital to implement our planned business strategies. Given the currently unsettled state of the capital markets and credit markets, there is no assurance that we will be able to raise the amount of capital that we seek for potential acquisitions or for operating expenses. If we are unable to raise the necessary capital at the times we require such funding, we may have to materially change our business plan, delaying implementation of aspects of our business plan or curtailing or abandoning our business plan. Investing in us is a speculative investment and investors may lose all of their investment.
Since our inception, we have been financed primarily by private placements. We raised $25,500 from July 9, 2007 (inception) through September 30, 2007 and $111,500 in October 2007 from sales of shares of common stock. The total net funds raised of $137,000 since inception through June 30, 2009 have been used principally as follows: (a) $27,795 in general and administrative expenses and (b) $141,693 in professional fees in connection with our financial reporting requirements. At June 30, 2009, we had available cash balances of $463 which are held in the interest bearing bank accounts.
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We anticipate that our operational and general and administrative expenses for the next 12 months will total approximately $28,000. We do not anticipate the purchase or sale of any significant equipment. We also do not expect any significant additions to the number of employees. The foregoing represents our best estimate of our cash needs based on current planning and business conditions. The exact allocation, purposes and timing of any monies raised in subsequent private financings may vary significantly depending upon the exact amount of funds raised and our progress with the execution of our business plan. We anticipate that depending on market conditions and our plan of operations, we may incur operating losses in the foreseeable future. Therefore, our auditors have raised substantial doubt about our ability to continue as a going concern.
As reflected in the accompanying financial statements, we are in the development stage with no operations, used cash in operations of $141,122 from inception, and have a net loss since inception of $168,623. This raises substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.
Management believes that actions presently being taken to obtain additional funding and implement our strategic plans provide the opportunity for us to continue as a going concern. However at this time, we do not believe that our current cash is insufficient for our operations for the next 12 months.
Net Cash Used in Operating Activities
Cash utilized in operating activities was $7,155 for the nine months ended June 30, 2009, as compared to $131,633 for the nine months ended June 30, 2008. The decrease was primarily due to significantly cutting back our operating expenses. During the period from July 9, 2007 (date of inception) through June 30, 2009, we used net cash in operating activities of $141,122 mainly for professional fees and general and administrative expenses as discussed and quantified above.
Net Cash Provided by Financing Activities
We raised $4,585 through financing activities during the nine months ended June 30, 2009, consisting of a loan. During the nine months ended June 30, 2008, we generated $135,900 through financing activities, principally from issuance of common stock. During the period from July 9, 2007 (date of inception) through June 30, 2009, we received net cash provided by financing activities of $141,585 from private placements and issuance of a promissory note.
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Critical Accounting Policies
In May 2009, the FASB issued SFAS No. 165 “Subsequent Events” (“SFAS 165”). SFAS 165 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. SFAS 165 sets forth (1) the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, (2) the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements and (3) the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. SFAS 165 is effective for interim or annual financial periods ending after June 15, 2009. The adoption of this statement did not have a material effect on the Company’s financial statements.
In June 2009, the FASB issued SFAS No. 166 “Accounting for Transfers of Financial Assets – an amendment of FASB Statement No. 140” (“SFAS 166”). SFAS 166 improves the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial statements about a transfer of financial assets; the effects of a transfer on its financial position, financial performance, and cash flows; and a transferor’s continuing involvement, if any, in transferred financial assets. SFAS 166 is effective as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period and for interim and annual reporting periods thereafter. The Company is evaluating the impact the adoption of SFAS 166 will have on its financial statements.
In June 2009, the FASB issued SFAS No. 167 “Amendments to FASB Interpretation No. 46(R)” (“SFAS 167”). SFAS 167 improves financial reporting by enterprises involved with variable interest entities and to address (1) the effects on certain provisions of FASB Interpretation No. 46 (revised December 2003), “Consolidation of Variable Interest Entities”, as a result of the elimination of the qualifying special-purpose entity concept in SFAS 166 and (2) constituent concerns about the application of certain key provisions of Interpretation 46(R), including those in which the accounting and disclosures under the Interpretation do not always provide timely and useful information about an enterprise’s involvement in a variable interest entity. SFAS 167 is effective as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period, and for interim and annual reporting periods thereafter. The Company is evaluating the impact the adoption of SFAS 167 will have on its financial statements.
In June 2009, the FASB issued SFAS No. 168 “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles – a replacement of FASB Statement No. 162”. The FASB Accounting Standards Codification (“Codification”) will be the single source of authoritative nongovernmental U.S. generally accepted accounting principles. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. SFAS 168 is effective for interim and annual periods ending after September 15, 2009. All existing accounting standards are superseded as described in SFAS 168. All other accounting literature not included in the Codification is nonauthoritative. The Company is evaluating the impact the adoption of SFAS 168 will have on its financial statements.
Off Balance Sheet Transactions
None.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
Item 4T. Controls and Procedures
Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer (“CEO”) and Chief Accounting Officer (“CAO”) (the Company’s principal financial and accounting officer), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s CEO and CAO concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CAO, as appropriate, to allow timely decisions regarding required disclosure.
a) Evaluation of Disclosure Controls. Noah Levinson, our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of our quarter ended June 30, 2009 pursuant to Rule 13a-15(b) of the Securities and Exchange Act. Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file under the Exchange Act is accumulated and communicated to our management, as appropriate to allow timely decisions regarding required disclosure. Based on his evaluation, Ms. Levinson concluded that our disclosure controls and procedures were effective as of June 30, 2009.
Our management, including our Chief Executive Officer and Chief Financial Officer (Principal Financial Officer), does not expect that our disclosure controls and procedures or our internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include, but are not limited to, the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
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(b) Changes in internal control over financial reporting. There have been no changes in our internal control over financial reporting that occurred during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Our management team will continue to evaluate our internal control over financial reporting in 2009 as we implement our Sarbanes Oxley Act testing.
PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
Currently we are not aware of any litigation pending or threatened by or against the Company.
Item 1A. Risk Factors
Not applicable.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
We issued no equity securities during the quarter ended June 30, 2009.
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.
31.1 | Certification of Principal Executive Officer and Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002 |
32.1 | Certification of Chief Executive Officer and Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
August 14, 2009 | MAX CASH MEDIA, INC. | |
By: | /s/ Noah Levinson | |
Noah Levinson, Chief Executive Officer and Chief Financial Officer |