Organization, Going Concern and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2014 |
Notes to Financial Statements | |
NOTE A - Organization, Going Concern and Summary of Significant Accounting Policies | Organization |
|
Our company’s name is Multimedia Platforms, Inc. (formerly known as Sports Media Entertainment Corp. and also formerly known as Explore Anywhere Holding Corp.) (the "Company"). The Company was incorporated on April 3, 1996 in the State of Nevada as Jubilee Trading Corp. On March 3, 2002, the Company changed its name to PorFavor Corp. From inception until March 2010, we operated as a broker of structural wood materials. Then, our former CEO/President fell ill and the wood business deteriorated. As a result, the Company decided to change its business focus and look for other opportunities. In March 2010, the Company identified a target company in the area of computer monitoring software, known as ExploreAnywhere Inc. On February 4, 2011, ExploreAnywhere Inc. and its shareholders closed a Share Exchange Agreement with the Company, whereby the Company acquired all of the issued and outstanding shares of ExploreAnywhere Inc. from its shareholders in exchange for 87,125 shares of the Company's common stock with a fair market value of $1,163,120. The merger was accounted for as a purchase. Explore Anywhere, Inc. became a wholly-owned subsidiary of Explore Anywhere Holding Corporation engaged in the business of selling computer monitoring software, specializing in offering computer monitoring solutions for parents, corporations and educational facilities under the ExploreAnywhere name. |
|
On December 24, 2013, the Company changed its name to Sports Media Entertainment Corp. in anticipation of a future merger and in order for the Company name to more closely reflect the nature of the anticipated business activities. |
|
Going Concern |
|
The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America and applicable to a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. |
|
During the year ended December 31, 2014 the Company recognized $9,543 of revenue. However, the Company incurred a net loss of $702,134. The Company has negative working capital of $790,437 as of December 31, 2014. |
|
Historically, the Company has relied upon internally generated funds and funds from the sale of shares of stock and loans from its shareholders and private investors to finance its operations. The Company plans to mitigate the going concern by effecting a business combination with an existing, privately held company. In the event the business combination does not close, management may seek other business opportunities and/or raise additional capital through future public or private offerings of the stock or through loans from private investors, although there can be no assurance that it will be able to obtain such financing. The Company’s failure to do so could have a material and adverse effect upon it and its shareholders. |
|
Summary of Significant Accounting Policies |
|
Accounting Estimates |
|
The preparation of the Company’s financial statements requires management to make estimates and use assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. On an on-going basis, the Company evaluates its estimates. Actual results and outcomes may differ materially from these estimates and assumptions. |
|
Revenue Recognition |
|
Revenue is recognized only when persuasive evidence of an arrangement exists, the fee is fixed or determinable, the product or service has been delivered, and collectability of the resulting receivable is probable. All our revenue during 2014 and 2013 was delivered via internet download. There is no technical support or warranty associated with the sale of our software. If customers have any problems with its software that cannot be easily resolved, the Company will fully refund the price. Revenue is recognized ratably over the one year subscription term of each sale adjusted accordingly for refunds. Unrecognized income is recorded as a liability under deferred revenue on our balance sheet. |
|
Cost of Goods Sold |
|
Cost of Goods Sold includes all software consulting costs, packaging & cases, licensing, and customer charge back, and those indirect costs related to software production. Selling, general and administrative costs are charged to expense as incurred. |
|
Sales and marketing costs |
|
Sales and marketing expenses include advertising expenses, commissions and SEO expenses. Marketing and advertising costs to promote the Company's products and services are expensed in the period incurred. For the year ended December 31, 2014 and 2013, the Company incurred $19,830 and $21,978, respectively, in marketing and advertising expense. |
|
Research and Development |
|
Expenses related to present and future products are expensed as incurred. |
|
Cash and Cash Equivalents |
|
Cash and cash equivalents includes highly liquid investments with original maturities of three months or less. The Company has amounts deposited with financial institutions in excess of federally insured limits. |
|
Fixed assets |
|
Fixed assets are carried at cost, less accumulated depreciation and amortization. Major improvements are capitalized, while repair and maintenance are expensed when incurred. Renewals and betterments that materially extend the life of the assets are capitalized. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in income for the period. |
|
Depreciation is computed for financial statement purposes on a straight-line basis over estimated useful lives of the related assets. The estimated useful lives of depreciable assets are: |
|
| | Estimated |
| | Useful Lives |
| | |
Office Equipment | | 5-10 years |
Furniture | | 5-7 years |
Shop tools | | 5-7 years |
Vehicles | | 5-10 years |
|
For federal income tax purposes, depreciation is computed under the modified accelerated cost recovery system. For book purposes, depreciation is computed under the straight-line method. |
|
Fair Value of Financial Instruments |
|
The Company’s financial instruments include cash and equivalents, accounts payable, accrued liabilities and debt. The carrying amount of these financial instruments has been estimated by management to approximate fair value. |
|
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, Financial Accounting Standards Board (“FASB”) ASC Topic 820-10-35 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurements). |
|
Level 1— Valuations based on quoted prices for identical assets and liabilities in active markets. |
|
Level 2—inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. the Black-Scholes model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, foreign exchange rates, and forward and spot prices for currencies and commodities. |
|
Level 3—inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. |
|
Income Taxes |
|
The Company accounts for income taxes using the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributed to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credits and loss carry-forwards. 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 and carry-forwards are expected to be recovered or settled. 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. A valuation allowance is established when necessary to reduce deferred tax assets to amounts expected to be realized. The Company reports a liability for unrecognized tax benefits resulting from uncertain income tax positions, if any, taken or expected to be taken in an income tax return. Estimated interest and penalties are recorded as a component of interest expense or other expense, respectively. |
|
Net Income (Loss) Per Share |
|
The computation of basic earnings per share (“EPS”) is based on the weighted average number of shares that were outstanding during the period, including shares of common stock that are issuable at the end of the reporting period. The computation of diluted EPS is based on the number of basic weighted-average shares outstanding plus the number of common shares that would be issued assuming the exercise of all potentially dilutive common shares outstanding using the treasury stock method. The computation of diluted net income per share does not assume conversion, exercise or contingent issuance of securities that would have an antidilutive effect on earnings per share. Therefore, when calculating EPS if the Company experienced a loss, there is no inclusion of dilutive securities as their inclusion in the EPS calculation is antidilutive. Furthermore, options and warrants will have a dilutive effect under the treasury stock method only when the average market price of the common stock during the period exceeds the exercise price of the options or warrants (they are in the money). See “NOTE F - Net Loss Per Share” for further discussion. |
|
Recently Adopted Accounting Pronouncements |
|
The Company reviews new accounting standards as issued. Although some of these accounting standards issued or effective after the end of the Company’s previous fiscal year may be applicable to the Company, it has not identified any standards that it believes merit further discussion. The Company believes that none of the new standards will have a significant impact on its financial statements. |