The accompanying notes are an integral part of these financial statements
F-3
Xumanii, Inc.
(formerly Medora Corp.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
Xumanii, Inc. (the “Company” or “Xumanii”) was incorporated in Nevada on May 6, 2010 for the purpose of engaging in ecommerce through the Company’s planned website, which will be a group coupon buying website.
On October 4, 2012, the sole Director and the majority shareholder of the Company have approved and consented in writing in lieu of a special meeting of the Board of Directors and a special meeting of the Stockholders to the following actions:
-
An amendment to their Articles of Incorporation to increase the number of shares of the authorized common stock from 100,000,000 to 450,000,000;
-
An amendment to the Company’s Articles of Incorporation to create 100,000,000 shares of “blank check” preferred stock; and
-
An amendment to the Company’s Articles of Incorporation to effect a change of the Company’s name from “Medora Corp.” to “Xumanii, Inc.”.
The Company has adopted and implemented a new business plan, effective September 7, 2012. Our business plan is to broadcast live events in HD from multiple cameras, wirelessly, with an extremely low production cost. Xumanii will allow content to be broadcasted as a Pay-Per-View model, generating revenues from consumers directly or as a “FREE” content model, generating revenues from advertisement, product placements and sponsorship.
Basis of Presentation
The accompanying unaudited interim financial statements of the Companyhave been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission(“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in Xumanii’s Annual Report filed with the SEC on Form 10-K for the year ended July 31, 2012. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which substantially duplicate the disclosure contained in the audited financial statements for fiscal 2012 as reported in the Form 10-K have been omitted
F-4
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Basic and Diluted Earnings (Loss) Per Common Share
The basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss, adjusted on an "as if converted" basis, by the weighted average number of common shares outstanding plus potential dilutive securities. For all periods presented, there were no potentially dilutive securities outstanding.
Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.
Property, Plant and Equipment
Property, plant and equipment are stated at cost. Depreciation is computed over the estimated useful lives of the related assets using the straight-line method for financial reporting purposes.
Expenditures for normal repairs and maintenance are charged to expense as incurred. Significant renewals and improvements are capitalized. The cost and related accumulated depreciation of assets retired or otherwise disposed of are eliminated from the accounts, and any resulting gain or loss is recognized in the year of disposal.
During the nine months ended April 30, 2013, the Company acquired certain office equipment and computers totaled $51,435 and recorded depreciation expense of $12,486 using a useful life of three years.
Income Taxes
Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company computes a deferred tax asset for net operating losses carried forward. The potential benefit of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.
F-5
Recently Issued Accounting Pronouncements
The Company does not expect the adoption of any recently issued accounting pronouncements to have a significant impact on its results of operations, financial position or cash flow.
NOTE 2 – GOING CONCERN
These financial statements have been prepared on a going concern basis, which implies Xumaniiwill continue to meet its obligations and continue its operations for the next twelve months. As of April 30, 2013, the Company has an accumulated deficit of $1,263,545, limited liquidity and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs for the next twelve month period. The Company’s sole officer and director is unwilling to loan or advance any additional capital to the Company, except for the costs associated with the preparation and filing of reports with the Securities and Exchange Commission (“SEC”). These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The continuation of Xumanii as a going concern is dependent upon financial support from its stockholders, the ability of Xumanii to obtain necessary equity financing to continue operations, and the attainment of profitable operations. Realization value may be substantially different from carrying values as shown and these financial statements do not
include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should Xumanii be unable to continue as a going concern.
NOTE 3 – LOANS PAYABLE
As of April 30, 2013, the Company had the following loans outstanding:
$400,820 loan from an unrelated party, non-interest bearing, unsecured and due on demand.
$642,242 loan from an unrelated party, bears interest of 5% per annum, unsecured, and due on December 31, 2013.
The Company recorded imputed interest of $26,791during the nine months ended April 30, 2013.
NOTE 4 – EQUITY TRANSACTIONS
On October 4, 2012, the sole Board of Director and the majority shareholder of the Company approved and consented in writing in lieu of a special meeting of the Board of Directors and a special meeting of the Stockholders to the following action:
The approval of a 5.5-for-1 forward stock split of the issued and outstanding shares of the Company’s Common Stock, bringing the total issued and outstanding Common shares from 62,054,600 to 341,300,300.The Company’s financial statements have been retroactively restated to incorporate the effect of the forward split.
During December, 2012 Company amended the employment agreement with the Company’s President to include 2,000,000 shares of Series A Preferred Stock as his compensation. These shares have not been issued by the Company yet. These Preferred shares will be valued at their fair value when the Company is ready to issue the shares.
F-6
NOTE 5 – SUBSEQUENT EVENTS
On May 2, 2013, the Company entered into an exclusive license agreement with Alex Frigon for certain intellectual property. The license agreement is for 25 years and the consideration is for Company to pay $10,000 annually over the life of the agreement.
On May 10, 2013, the Company entered into an employment agreement with Kimberly Allen as the Company's Chief Marketing Officer for a term of 2 years. The Company agreed to pay a salary of $70,000 per year. The employee will also receive 500,000 shares of the Company’s Class B preferred stock, 100,000 shares is to be issued upon signing of agreement and 100,000 shares on each subsequent 6 month period until 500,000 shares are issued.
On May 13, 2013, the Company entered into a 2 year consulting agreement with John E. Johnson. The Company agreed to pay $5,000 per month and 1,500,000 shares of the Company’s Class B preferred stock, 500,000 shares is to be issued on execution of the agreement and 250,000 shares on every 6 months until the 1,500,000 shares are issued.
On May 20, 2013, the Company entered into a consulting agreement with Roe Williams to negotiate live broadcasts with the Company's corporate clients for a term of 2 years. The Company agreed to pay $5,000 per month until the Consultant brings the Company $100K net in sponsorship and advertisement revenues. After which the consultant will receive $10,000 per month for the remaining term of the agreement. The Consultant will also receive 750,000 shares of the Company’s Class B preferred Stock, 281,252 shares to be issued upon signing and 117,187 shares on each subsequent 6 month period. The Consultant will also receive a performance bonus of an additional 750,000 shares of the Company’s Class B Preferred Stock for each $500,000 net the consultant brings the Company in sponsorship every 6 months.
On May 21, 2013, the Company entered into consulting agreements with Sabrian Sledge. The agreement provides the consultant to negotiate live events with the artist Lil Wayne for 2 years exclusive endorsement of the Company in regards to live streaming broadcasting by Lil Wayne for 2 concerts. The Company agreed to pay $250,000, $50,000 upon signature of the Definitive Agreement between the Company and Lil Wayne and $50,000 on each subsequent 6 month period after the date that the Definitive agreement with Lil Wayne is signed until $250,000 is paid. The consultant will also receive 5,000,000 shares of common stock, 2,500,000 shares upon signing the Definitive Agreement between the Company and Lil Wayne and 625,000 shares on each subsequent 6 month period until 5,000,000 shares are issued.
On June 1, 2013, the Company entered into a consulting agreement with Omar Thiam for a term of two years to negotiate live broadcast events. The Company agreed to pay 750,000 shares of class B preferred stock, 187,500 shares upon signing of agreement and 187,500 on each subsequent 6 month period until all shares have been issued.
F-7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto. The following discussion and analysis contains forward-looking statements, which involve risks and uncertainties. Our actual results may differ significantly from the results, expectations and plans discussed in these forward-looking statements. See “Cautionary Statement on Forward-Looking Information.”
We are a development stage corporation and have not yet generated or realized any revenues from our business operations.
Our auditors have raised substantial doubt as to our ability to continue as an on-going business for the next 12 months. We have not generated any revenue, have not completed the development of our websites, and have only recently located businesses willing to offer significant discounts of their products or services to our registered members.
The Company has adopted and implemented a new Business Plan. ”. The Company's name and trading symbol were subsequently changed from Medora Corp. and MORA effective September 7, 2012 to Xumanii and XUII respectively.
XUMANII is a platform to broadcast live events in HD with a new technology that combines hardware and a software platform to broadcast from multiple cameras, wirelessly an event with an extremely low production cost. Our hardware enables any cameras to broadcast their image in HD to a laptop nearby where the Xumanii Broadcast Manager software, receives all images and enables an operator to create a “live editing” and broadcast an event on the Xumanii.com platform. Xumanii allows content to be broadcasted as a Pay-Per-View model, generating revenues from consumers directly or as a “FREE” content model, generating revenues from advertisement, product placements and sponsorship.
To meet our need for cash, we have raised $1,043,062 in loans from third parties and $44,748 from a related party. We cannot guarantee that since we have adopted and implemented a new business plan and have begun operations that we will stay in business after twelve months. If we are unable to secure enough broadcasts of performance artists and or business products or services to advertize at suitably low pricing or enough registered members willing to buy the products at the price we have negotiated with our businesses, we may quickly use up our current cash and will need to find alternative sources, such as a second public offering, or a private placement of securities in order for us to maintain our operations. At the present time, we have not made any arrangements to raise additional cash, other than from the loans that have been received. If we need additional cash and cannot raise it, we may either have to suspend operations until we do raise the cash, or cease operations entirely. If we need more money, we will have to revert to obtaining additional funds as described above. Other than as described above, currently we have no other financing plans.
5
Plan of Operation
Our business plan for Xumanii is to broadcast live events in HD from multiple cameras, wirelessly, with an extremely low production cost. Xumanii will allow content to be broadcasted as a Pay-Per-View model, generating revenues from consumers directly or as a “FREE” content model, generating revenues from advertisement, product placements and sponsorship.
A material challenge to our business operations has been getting enough registered members. In order to achieve this goal we have to create incentives for our registered members to inform others of the broadcasts on our website. We will encourage our registered members to share news about the broadcasts through email, Facebook, and Twitter, and other social media websites. If we are unable to get new subscribers or fail to generate enough traffic to our website it may have a material impact on our revenues or income or may result in our liquidity decreasing.
We plan to implement our business operations by finding performance artists, or other businesses that are willing to broadcast and or advertize in order to spread to existing members and new registered members. To date we have had good success in finding artists that are willing to broadcast live performances, and we have had some success in obtaining registered members. To date we have in excess 11,000 registered members.
To better manage our payment processing we have selected Paypal to facilitate our online transactions.
In both a growing and shrinking economy we anticipate that performance artists will use our website as a marketing tool and to generate income from repeat customers on a Pay Per view Format. Additionally, registered members will likely prefer to receive notification as to upcoming performances.
To help prevent liquidity concerns, we will also target businesses in the immediate area of the performance that will have offerings of goods and services that will be attractive to that local community. Having businesses that have offerings that are attractive enough to generate local people to be registered members to our website will increase our exposure and will assist in addressing our long-term liquidity concerns.
To date we have received a total of $ 1,043,062 in loans from third parties and $44,748 from a related party.
Currently, do not have any future arrangements or commitments in place to complete any private placement financings and there is no assurance that we will be successful in completing any such financings on terms that will be acceptable to us.
Limited Operating History; Need for Additional Capital
There is limited historical financial information about us upon which to base an evaluation of our performance. We are a start-up (development stage) company and have not generated any revenues. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to price and cost increases in services and products.
6
To become profitable and competitive, we have to locate and negotiate agreements with established performance artists and or businesses to enable us to offer these venues to our clientele
We have no assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional dilution to our existing stockholders.
We anticipate that we will need to meet our ongoing cash requirements through the generation of revenue or equity and/or debt financing. We estimate that our expenditures over the next 12 months as of
April 30, 2013, will be approximately $1,385,997 as described in the table and chart below. These estimates may change significantly depending on the nature of our future business activities and our ability to raise capital from shareholders or other sources.
| | |
Type | Amount | Percent |
Salaries | 535,023 | 38.60% |
Professional services (IT development) | 291,744 | 21.05% |
Equipment(purchase) | 45,976 | 3.32% |
Professional services (lawyers & accountant) | 81,500 | 5.88% |
Professional services (Biz Dev) | 120,000 | 8.66% |
Office, rent and expenses(phone, etc) | 126,646 | 9.14% |
Travel expense for employees | 73,111 | 5.27% |
Government Fees | 15,078 | 1.09% |
Event production fees | 28,251 | 2.04% |
Business Development fees | 21,228 | 1.53% |
Servers & Bandwidth | 36,000 | 2.60% |
Bank fees & interest | 7,041 | 0.51% |
Administration | 2,296 | 0.17% |
Event Publicity and promotion | 2,103 | 0.15% |
Total | 1,385,997 | 100.00% |
7
We intend to meet our cash requirements for the short term by generating revenue and, if possible, through a combination of debt financing and equity financing by way of private placements. We currently do not have any arrangements or commitments in place to complete any private placement financings and there is no assurance that we will be successful in completing any such financings on terms that will be acceptable to us.
If we are not able to raise the full $1,385,997 to fully implement our business plan for the next year as anticipated, we will scale our business development in line with available capital. Our primary priority will be to retain our reporting status with the SEC which means that we will first ensure that we have sufficient capital to cover our legal and accounting expenses. Once these costs are accounted for, in accordance with how much financing we are able to secure, we will focus on market awareness, and servicing costs as well as marketing and advertising to social media marketing websites. We will likely not expend funds on the remainder of our planned activities unless we have the required capital.
If we are able to raise the required funds we will fully implement our business plan. If we are not able to raise all required funds, we will prioritize our corporate activities.
Results of Operations
From Inception on May 6, 2010 to April 30, 2013
During the period from May 6, 2010 (inception) to April 30, 2013, we incorporated the company, hired the auditor, and hired the attorney for the preparation of our registration statement. We have prepared an internal business plan. We have reserved the domain name www.medoracorp.com and www.grabbittoday.com and they have been designed and uploaded.
Our net loss since inception is $1,263,545 as a result of incurring expenses of $301,371 for consulting fees, $79,409 for legal and accounting fees, $3,510, for transfer agent fees and $842,258 for other general and administrative expenses. At inception, we sold 192,500,000 shares of common stock to our former sole officer and director, Dr. Jehovan Owayne Fairclough for approximately $7,025. On June 10, 2010, Dr. Fairclough appointed Craig McKenzie as his replacement by way of board resolution as the president, chief executive officer, chief financial officer, treasurer, secretary and sole member of the board of directors. On June 10, 2010, Dr. Jehovan Fairclough resigned as the president, chief executive officer, chief financial officer, treasurer, secretary and sole member of the board of directors and sold to Craig McKenzie his 192,500,000 shares of common stock for $7,025 in a private transaction.
These shares were issued in reliance on the exemption under Section 4(2) of the Securities Act of 1933, as amended (the “Act”). These shares of our common stock qualified for exemption under Section 4(2) of the Securities Act of 1933 since the issuance shares by us did not involve a public offering. The offering was not a “public offering” as defined in Section 4(2) due to the insubstantial number of persons involved in the deal, size of the offering, manner of the offering and number of shares offered. We did not undertake an offering in which we sold a high number of shares to a high number of investors.
In addition, the foregoing investors had the necessary investment intent asrequired by Section 4(2) since they agreed to and received share certificates bearing a legend stating that such shares are restricted pursuant to Rule 144 of the 1933 Securities Act. This restriction ensures that these shares would not be immediately redistributed into the market and therefore not be part of a “public offering.” Based on an analysis of the above factors, we have met the requirements to qualify for exemption under Section 4(2) of the Securities Act of 1933 for this transaction.
During the period from May 6, 2010 (inception) to April 30, 2013, we sold 148,800,300 shares of our common stock for $33,951 to forty-two (42) investors.
We issued these shares in reliance on the safe harbor provided by Regulation S promulgated under the Securities Act of 1933, as amended. These investors who received the securities represented and warranted that they are not “U.S. Persons” as defined in Regulation S. In the alternative, the issuance of these shares was exempt from registration pursuant to Section 4(2) of the Securities Act. We made this determination based on the representations of the Shareholders which included, in pertinent part, that such shareholders were either (a) “accredited investors” within the meaning of Rule 501 of Regulation D promulgated under the Securities Act, or (b) not a “U.S. person” as that term is defined in Rule 902(k) of Regulation S under the Act, and that such shareholders were acquiring our common stock, for investment purposes for their own respective accounts and not as nominees or agents, and not with a view to the resale or distribution thereof, and that the Shareholders understood that the shares of our common stock may not be sold or otherwise disposed of without registration under the Securities Act or an applicable exemption therefrom.
To date we have received a total of $1,043,062 in loans from third parties and $44,748 in advances from a related party in order to implement our new business plan.
Lack of Revenues
We have limited operational history. From our inception on May 6, 2010 to April 30, 2013, we did not generate any revenues. We anticipate that we will incur substantial losses for the foreseeable future and our ability to generate any revenues in the next 12 months continues to be uncertain.
9
Expenses
For the period from May 6, 2010 (inception) to April 30, 2013, our expenses were as follows:
| |
Type of Expense | ($) |
General and administrative | 845,768 |
Consulting | 301,371 |
Professional fees | 79,409 |
Interest expense | 36,997 |
Total | 1,263,545 |
Net Loss
For the period from May 6, 2010 (inception) to April 30, 2013, we incurred a net loss of $1,263,545.
Liquidity and Capital Resources
As of the date of this report, we have yet to generate any revenues from our business operations.
As of April 30, 2013, our total assets were $72,145 comprised of cash in the amount of $5,965, prepaid expenses of $12,276, and equipment of $53,904. Our total liabilities were $1,267,923 comprised of a related party payable of $44,748, accounts payable of $180,113 and third party loans of $1,043,062.
To date, we have borrowed $1,043,062 from an unrelated third party and $44,748 from a related party, to pay for our ongoing operations and our regulatory reporting obligations, $642,242 of the loans bear an interest rate of 5% per annum and $400,820 of the loans are non-interest bearing. These loans are unsecured and due upon demand.
We anticipate that we will meet our ongoing cash requirements through the generation of revenue and equity or debt financing. We estimate that our expenditures over the next 12 months as of April 30, 2013 will be approximately $1,386,000. This estimate may change significantly depending on the nature of our future business activities and our ability to raise capital from shareholders or other sources.
We intend to meet our cash requirements for the short term by generating revenue and through a combination of debt financing and equity financing by way of private placements. We currently do not have any arrangements or commitments in place to complete any private placement financings and there is no assurance that we will be successful in completing any such financings on terms that will be acceptable to us.
10
If we are not able to raise the amount needed to fully implement our business plan as anticipated, we will scale our business development in line with available capital.
Our primary priority will be to retain our reporting status with the SEC which means that we will first ensure that we have sufficient capital to cover our legal and accounting expenses.
Once these costs are accounted for, in accordance with how much financing we are able to secure, we will focus on market awareness, testing and servicing costs as well as marketing and advertising to social media marketing websites. We will likely not expend funds on the remainder of our planned activities unless we have the required capital
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and as defined by Rule 229.10(f)(1) of Regulation S-K, and are not required to provide the information under this item.
ITEM 4. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
We maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. We conducted an evaluation under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Rule 13a-15 of the Exchange Act. Based on this Evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our Disclosure Controls were not effective as of the end of the period covered by this report due to the lack of adequate segregation of duties and the absence of an audit committee.
Changes in Internal Controls
There were no changes in our internal control over financial reporting during our most recent fiscal quarter that affected, or were reasonably likely to affect, our internal control over financial reporting.
11
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.
ITEM 1A. RISK FACTORS
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS.
The following documents are included herein:
| | | | | |
| | Incorporated by reference | |
Exhibit | Document Description | Form | Date | Number | Filed herewith |
| | | | | |
| | | | | |
| | | | | |
31.1 | Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
| | | | X |
| | | | | |
32.1 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | | | | X |
| | | | | |
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 on this 14th day of June, 2013.
XUMANII, Inc.
BY: /s/ Alexandre Frigon
Alexandre Frigon, President, Principal Executive Officer, Treasurer, Principal Financial Officer, Principal Accounting Officer and sole Director
