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, 2012
OR
[ ] 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: 333-171891
Blue Sun Media, Inc.
--------------------
(Exact name of registrant as specified in its charter)
Nevada 27-3436055
------ ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Elise Travertini
349 W. Pine Street, Suite 4D, Central Point, OR 97502
541-499-1637
-----------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
--------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
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 (ss.232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). Yes [X] No [ ]
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 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 [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. 10,200,000 shares of common
stock are issued and outstanding as of June 30, 2012.
TABLE OF CONTENTS
Page
No.
----
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets at June 30, 2012 (unaudited) and December 31, 2011 . 4
Statements of Operations .......................................... 5
Statements of Cash Flows .......................................... 6
Notes to Financial Statements (unaudited) ......................... 7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations ............................................. 13
Item 3. Quantitative and Qualitative Disclosures About Market Risk ........ 13
Item 4. Controls and Procedures ........................................... 14
PART II - OTHER INFORMATION
Item 1. Legal Proceedings ................................................. 16
Item 1A. Risk Factors ...................................................... 16
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds ....... 16
Item 3. Defaults Upon Senior Securities ................................... 16
Item 4. Mine Safety Disclosures ........................................... 16
Item 5. Other Information ................................................. 16
Item 6. Exhibits .......................................................... 16
2
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
Certain statements in this report contain or may contain forward-looking
statements. These statements, identified by words such as "plan", "anticipate",
"believe", "estimate", "should", "expect" and similar expressions include our
expectations and objectives regarding our future financial position, operating
results and business strategy. These statements are subject to known and unknown
risks, uncertainties and other factors which may cause actual results,
performance or achievements to be materially different from any future results,
performance or achievements expressed or implied by such forward - looking
statements. These forward-looking statements were based on various factors and
were derived utilizing numerous assumptions and other factors that could cause
our actual results to differ materially from those in the forward-looking
statements. These factors include, but are not limited to, our ability to secure
suitable financing to continue with our existing business or change our business
and conclude a merger, acquisition or combination with a business prospect,
economic, political and market conditions and fluctuations, government and
industry regulation, interest rate risk, U.S. and global competition, and other
factors. Most of these factors are difficult to predict accurately and are
generally beyond our control. You should consider the areas of risk described in
connection with any forward-looking statements that may be made herein. Readers
are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date of this report. Readers should carefully review
this report in its entirety, including but not limited to our financial
statements and the notes thereto and the risks described in our Annual Report on
Form 10-K for the fiscal year ended December 31, 2011. We advise you to
carefully review the reports and documents we file from time to time with the
Securities and Exchange Commission (the "SEC"), particularly our quarterly
reports on Form 10-Q and our current reports on Form 8-K. Except for our ongoing
obligations to disclose material information under the Federal securities laws,
we undertake no obligation to release publicly any revisions to any
forward-looking statements, to report events or to report the occurrence of
unanticipated events.
OTHER PERTINENT INFORMATION
When used in this report, the terms, "we," the "Company," "our," and "us" refers
to Blue Sun Media, Inc., a Nevada corporation.
3
BLUE SUN MEDIA, INC.
(A Development Stage Enterprise)
BALANCE SHEETS
--------------------------------------------------------------------------------
ASSETS
------
JUNE 30,
2012 DECEMBER 31,
Unaudited 2011
----------- -----------
CURRENT ASSETS
Cash and cash equivalents ........................ $ 3,576 $ 9,812
----------- -----------
Total current assets ........................... 3,576 9,812
----------- -----------
----------- -----------
TOTAL ASSETS ..................................... $ 3,576 $ 9,812
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
-------------------------------------------------
CURRENT LIABILITIES
Accounts payable & Accrued liabilities ........... $ -- $ 3,852
----------- -----------
Total liabilities .............................. -- 3,852
=========== ===========
STOCKHOLDERS' EQUITY (DEFICIENCY)
Capital Stock (Note 4)
Authorized:
20,000,000 preferred shares, $0.0001 par value,
500,000,000 common shares, $0.0001 par value.
Issued and outstanding shares:
0 preferred shares, 10,200,000 common shares .. $ 1,020 $ 1,020
Additional paid-in capital ....................... 19,980 19,980
Deficit accumulated during the development stage . (17,424) (15,040)
----------- -----------
Total Stockholders' Equity (Deficiency) ........ 3,576 5,960
----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIENCY) ............... $ 3,576 $ 9,812
=========== ===========
The accompanying notes are an integral part of these financial statements.
4
BLUE SUN MEDIA, INC.
(A Development Stage Enterprise)
STATEMENTS OF OPERATIONS
----------------------------------------------------------------------------------------------------------------
FOR THE PERIOD
FROM INCEPTION
THREE MONTHS THREE MONTHS SIX MONTHS SIX MONTHS NOVEMBER 15,
ENDED ENDED ENDED ENDED 2010 TO
JUNE 30, JUNE 30, JUNE 30, JUNE 30, JUNE 30,
2012 2011 2012 2011 2012
------------- ------------- ------------- ------------- --------------
REVENUES ....................... $ -- $ -- $ -- $ -- $ --
------------- ------------- ------------- ------------- -------------
EXPENSES
General & Administrative ..... 1,378 153 1,494 179 6,025
Professional Fees ............ $ 600 $ 600 $ 890 $ 2,065 $ 11,399
------------- ------------- ------------- ------------- -------------
1,978 753 2,384 2,244 17,424
Loss Before Income Taxes ....... $ (1,978) $ (753) $ (2,384) $ (2,244) $ (17,424)
------------- ------------- ------------- ------------- -------------
Provision for Income Taxes ..... -- -- -- -- --
------------- ------------- ------------- ------------- -------------
Net Loss ....................... $ (1,978) $ (753) $ (2,384) $ (2,244) $ (17,424)
============= ============= ============= ============= =============
PER SHARE DATA:
Basic and diluted loss
per common share ............ $ -- $ -- $ -- $ -- $ --
============= ============= ============= ============= =============
Basic and diluted
weighted average common
shares outstanding .......... 10,200,000 10,200,000 10,200,000 10,200,000 9,859,545
============= ============= ============= ============= =============
The accompanying notes are an integral part of these financial statements.
5
BLUE SUN MEDIA, INC.
(A Development Stage Enterprise)
STATEMENTS OF CASH FLOWS
------------------------------------------------------------------------------------------------
FOR THE PERIOD
FROM INCEPTION
SIX MONTHS SIX MONTHS NOVEMBER 15,
ENDED ENDED 2010 TO
JUNE 30, JUNE 30, JUNE 30,
2012 2011 2012
------------- ------------- --------------
OPERATING ACTIVITIES
Net Loss ..................................... $ (2,384) $ (2,244) $ (17,424)
------------- ------------- -------------
Changes in Operating Assets and Liabilities:
Increase (decrease) in accounts payable and
accrued liabilities ....................... (3,852) (4,243) --
------------- ------------- -------------
Net cash used in operating activities ........ (6,236) (6,487) (17,424)
------------- ------------- -------------
FINANCING ACTIVITIES
Common stock issued for cash ................. -- 12,000 21,000
------------- ------------- -------------
Net cash provided by financing activities .... -- 12,000 21,000
------------- ------------- -------------
INCREASE IN CASH AND CASH EQUIVALENTS .......... (6,236) 5,513 3,576
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 9,812 9,000 --
------------- ------------- -------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ..... $ 3,576 $ 14,513 $ 3,576
============= ============= =============
Supplemental Cash Flow Disclosures:
Cash paid for:
Interest expense ........................... $ -- $ -- $ --
============= ============= =============
Income taxes ............................... $ -- $ -- $ --
============= ============= =============
The accompanying notes are an integral part of these financial statements.
6
BLUE SUN MEDIA, INC.
(A Development Stage Enterprise)
NOTES TO INTERIM FINANCIAL STATEMENTS
JUNE 30, 2012
NOTE 1. GENERAL ORGANIZATION AND BUSINESS
Blue Sun Media, Inc.,(the "Company") is a development stage company,
incorporated in the State of Nevada on November 15, 2010. The Company offers
software solutions to help simplify the management and control of the under age
17 group that is using the online market and social network available to them
over the Internet.
The Company's management has chosen December 31st for its fiscal year end.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES
Basis of Presentation
---------------------
The accompanying financial statements have been prepared in accordance with
United States generally accepted accounting principles (US GAAP) for interim
financial information and in accordance with professional standards promulgated
by the Public Company Accounting Oversight Board (PCAOB). They reflect all
adjustments which are, in the opinion of management, necessary for a fair
presentation of the financial position and operating results for the six months
ended June 30, 2012, respectively along with the period November 15, 2010 (date
of inception) to June 30, 2012.
Accounting Basis
----------------
The Company is currently a development stage enterprise reporting under the
provisions of Accounting Standards Codification ("ASC") 915, Development Stage
Entity. These financial statements are prepared on the accrual basis of
accounting in conformity with accounting principles generally accepted in the
United States of America.
Cash and Cash Equivalents
-------------------------
Cash and cash equivalents are reported in the balance sheet at cost, which
approximates fair value. For the purpose of the financial statements cash
equivalents include all highly liquid investments with maturity of three months
or less.
Fair Value of Financial Instruments
-----------------------------------
The fair value of cash and cash equivalents and accounts payable approximates
the carrying amount of these financial instruments due to their short maturity.
7
BLUE SUN MEDIA, INC.
(A Development Stage Enterprise)
NOTES TO INTERIM FINANCIAL STATEMENTS
JUNE 30, 2012
Earnings (Loss) per Share
-------------------------
The Company adopted ASC 260, Earnings per Share. Basic earnings (loss) per share
are calculated by dividing the Company's net income available to common
shareholders by the weighted average number of common shares outstanding during
the year. The diluted earnings (loss) per share are calculated by dividing the
Company's net income (loss) available to common shareholders by the diluted
weighted average number of shares outstanding for the period. The diluted
weighted average number of shares outstanding is the basic weighted number of
shares adjusted as of the first of the year for any potentially dilutive debt or
equity. There are no diluted shares outstanding.
Dividends
---------
The Company has not adopted any policy regarding payment of dividends. No
dividends have been paid during the period shown
Income Taxes
------------
The Company adopted ASC 740, Income Taxes, at its inception. Under ASC 740,
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, including tax loss and credit carryforwards, 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. 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. Deferred income tax expense represents the change during the
period in the deferred tax assets and deferred tax liabilities. The components
of the deferred tax assets and liabilities are individually classified as
current and non-current based on their characteristics. Deferred tax assets are
reduced by a valuation allowance when, in the opinion of management, it is more
likely than not that some portion or all of the deferred tax assets will not be
realized. No deferred tax assets or liabilities were recognized as of June 30,
2012.
Advertising
-----------
The Company will expense advertising as incurred. The advertising since
inception has been zero.
Use of Estimates
----------------
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America 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 revenue and expenses during
the reporting period. Actual results could differ from those estimates.
8
BLUE SUN MEDIA, INC.
(A Development Stage Enterprise)
NOTES TO INTERIM FINANCIAL STATEMENTS
JUNE 30, 2012
Revenue and Cost Recognition
----------------------------
The Company has no current source of revenue; therefore the Company has not yet
adopted any policy regarding the recognition of revenue or cost.
Related Parties
---------------
Related parties, which can be a corporation, individual, investor or another
entity are considered to be related if the party has the ability, directly or
indirectly, to control the other party or exercise significant influence over
the Company in making financial and operating decisions. Companies are also
considered to be related if they are subject to common control or common
significant influence. The Company has these relationships.
Property
--------
The Company does not own any real estate or other properties. The Company's
office is located at 349 W. Pine Street, Suite 4D, Central Point OR 97502.
Recently Issued Accounting Pronouncements
-----------------------------------------
In June 2009, the Financial Accounting Standards Board ("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,"
("SFAS 168"). SFAS 168 establishes the FASB Accounting Standards Codification
("Codification") as the source of authoritative generally accepted accounting
principles ("GAAP") for nongovernmental entities. The Codification does not
change GAAP. Instead, it takes the thousands of individual pronouncements that
currently comprise GAAP and reorganizes them into approximately ninety
accounting topics, and displays all topics using a consistent structure.
Contents in each topic are further organized first by subtopic, then section and
finally paragraph. The paragraph level is the only level that contains
substantive content. Citing particular content in the Codification involves
specifying the unique numeric path to the content through the topic, subtopic,
section and paragraph structure. FASB suggests that all citations begin with
"FASB ASC," where ASC stands for Accounting Standards Codification. Changes to
the ASC subsequent to June 30, 2009 are referred to as Accounting Standards
Updates ("ASU").
In conjunction with the issuance of SFAS 168, the FASB also issued its first
Accounting Standards Update No. 2009-1, "Topic 105 -Generally Accepted
Accounting Principles" ("ASU 2009-1") which includes SFAS 168 in its entirety as
a transition to the ASC.
ASU 2009-1 is effective for interim and annual periods ending after September
15, 2009 and will not have an impact on the Company's financial position or
results of operations but will change the referencing system for accounting
standards.
9
BLUE SUN MEDIA, INC.
(A Development Stage Enterprise)
NOTES TO INTERIM FINANCIAL STATEMENTS
JUNE 30, 2012
In February 2010, the FASB issued ASU 2010-09 "Subsequent Events - Amendments to
Certain Recognition and Disclosure Requirements" ("ASU 2010-09"), which amends
FASB ASC Topic 855, Subsequent Events, so that SEC filers no longer are required
to disclose the date through which subsequent events have been evaluated in
originally issued and revised financial statements. ASU No. 2010-09 was
effective immediately and the Company adopted these new requirements in the
first quarter of 2010. The adoption did not have a material impact on the
disclosures of the Company's financial statements.
As of June 30, 2012, all citations to the various SFAS' have been eliminated
and will be replaced with FASB ASC as suggested by the FASB in future interim
and annual financial statements.
As of June 30, 2012, the Company does not expect any of the recently issued
accounting pronouncements to have a material impact on its financial condition
or results of operations.
The Company has adopted all recently issued accounting pronouncements. The
adoption of the accounting pronouncements, including those not yet effective, is
not anticipated to have a material effect on the financial position or results
of operations of the Company.
NOTE 3. INCOME TAXES
The Company provides for income taxes under ASC Topic 740, which requires the
use of an asset and liability approach in accounting for income taxes. Deferred
tax assets and liabilities are recorded based on the differences between the
financial statement and tax bases of assets and liabilities and the tax rates in
effect currently.
ASC Topic 740 requires the reduction of deferred tax assets by a valuation
allowance if, based on the weight of available evidence, it is more likely than
not that some or all of the deferred tax assets will not be realized. In the
Company's opinion, it is uncertain whether they will generate sufficient taxable
income in the future to fully utilize the net deferred tax asset.
The Company utilizes the asset and liability method for financial reporting of
income taxes. Deferred tax assets and liabilities are determined based on
temporary differences between financial reporting and the tax basis of assets
and liabilities, and are measured by applying enacted rates and laws to taxable
years in which such differences are expected to be recovered or settled. Any
changes in tax rates or laws are recognized in the period when such changes are
enacted.
As of June 30, 2012, the Company has $6,795 in gross deferred tax assets
resulting from net operating loss carry-forwards. A valuation allowance has been
recorded to fully offset these deferred tax assets because the Company's
management believes future realization of the related income tax benefits is
uncertain. Accordingly, the net provision for income taxes is zero for the
period November 15, 2010 (inception) to June 30, 2012. As of June 30, 2012, the
Company has federal net operating loss carry forwards of approximately $17,424
available to offset future taxable income through 2030. The difference between
the tax provision at the statutory federal income tax rate on June 30, 2012 and
the tax provision attributable to loss before income taxes is as follows:
10
BLUE SUN MEDIA, INC.
(A Development Stage Enterprise)
NOTES TO INTERIM FINANCIAL STATEMENTS
JUNE 30, 2012
For the period
November 15, 2010
(inception) through
June 30, 2012
-------------------
Statutory federal income taxes ........ 34.0%
State taxes, net of federal benefits .. 5.0%
Valuation allowance ................... -39.0%
-------------------
Income tax rate ....................... -
===================
As of June 30, 2012, the Company had estimated net loss carry forwards of
approximately $17,424 which expires through its tax year ending 2030.
Utilization of these net operating loss carry forwards may be limited in
accordance with IRCD Section 382 in the event of certain shifts in ownership.
NOTE 4. STOCKHOLDERS' EQUITY
Preferred Stock
---------------
As of June 30, 2012, the Company has 20,000,000 preferred shares authorized,
however none are issued nor outstanding.
Common Stock
------------
On December 7, 2010, the Company issued 9,000,000 of its $0.0001 par value
common stock for $9,000 cash. The issuance of the shares was made to the sole
officer and director of the Company and an individual who is a sophisticated and
accredited investor, therefore, the issuance was exempt from registration of the
Securities Act of 1933 by reason of Section 4 (2) of that Act.
On May 18, 2011, the Company sold 1,200,000 of its $0.0001 par value common
stock for $12,000 to 24 investors. The shares were sold pursuant to the
Company's S-1 Registration Statement.
As of June 30, 2012, there are 500,000,000 Common Shares at $0.0001 par value
authorized with 10,200,000 issued and outstanding.
NOTE 5. RELATED PARTY TRANSACTIONS
As of June 30, 2012, the sole officer and sole director of the Company is
involved in other business activities and may, in the future, become involved in
other business opportunities that become available. She may face a conflict in
selecting between the Company and other business interests. The Company has not
formulated a policy for the resolution of such conflicts.
NOTE 6. GOING CONCERN
As of June 30, 2012, the accompanying financial statements have been presented
on the basis that it is a going concern in the development stage, which
contemplates the realization of assets and the satisfaction of liabilities in
the normal course of business.
11
BLUE SUN MEDIA, INC.
(A Development Stage Enterprise)
NOTES TO INTERIM FINANCIAL STATEMENTS
JUNE 30, 2012
For the period November 15, 2010 (date of inception) through June 30, 2012 the
Company has had a net loss of $17,424 consisting of SEC audit and review fees,
California state taxes, and incorporation fees for the Company to initiate its
SEC reporting requirements.
As of June 30, 2012, the Company has not yet emerged from the development stage.
In view of these matters, recoverability of any asset amounts shown in the
accompanying audited financial statements is dependent upon the Company's
ability to begin operations and to achieve a level of profitability. Since
inception, the Company has financed its activities principally from the sale of
equity securities. The Company intends on financing its future development
activities and its working capital needs largely from loans and the sale of
public equity securities with some additional funding from other traditional
financing sources, including term notes, until such time that funds provided by
operations are sufficient to fund working capital requirements.
NOTE 7. CONCENTRATION OF RISKS
Cash Balances
-------------
The Company maintains its cash in institutions insured by the Federal Deposit
Insurance Corporation (FDIC). All other deposit accounts at FDIC-insured
institutions were insured up to at least $250,000 per depositor. The Company
had no deposits in excess of insured amounts as of June 30, 2012.
NOTE 8. SUBSEQUENT EVENTS
The Company has evaluated events and transactions that occurred subsequent to
June 30, 2012 through July 25, 2012, the date the interim financial statements
were available to be issued, for potential recognition or disclosure in the
accompanying financial statements. Other than the disclosures above, the Company
did not identify any events or transactions that should be recognized or
disclosed in the accompanying financial statements.
12
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION
Overview
Blue Sun Media, Inc. is a development stage company and was incorporated in
Nevada on November 15, 2010, Blue Sun intends to develop software and systems to
create, solutions to help simplify the management and control of the under age
17 group that is using the online market and social network available to them
over the Internet.
Results of Operations
---------------------
The following discussion should be read in conjunction with the condensed
financial statements and segment data and in conjunction with the Company's S-1
and amended S-1/A's. Results or interim periods may not be indicative of results
for the full year.
During the first and second quarter of the fiscal year 2011, the Company was
focused on preparing the documentation required to be filed with the Securities
and Exchange Commission (SEC) and with the Financial Industry Regulatory
Authority (FINRA). On January 27, 2011 the Company filed a Registration Form S-1
and also filed S-1/A Amendments on March 3, 2011, March 29, 2011. The
registration statement was declared effective on May 2, 2011.
During the first and second quarter of the fiscal year 2012, the Company was
focused on product spec and development. In addition, the Company finished it's
financial plan for the Company.
The Company did not generate any revenue during the six months ended June 30,
2012.
Total expenses the six(6) months ending June 30, 2012 were $2,384 resulting in
an operating loss for the period of $2,384. Basic net loss per share amounting
to $.0001 for the six (6) months ending June 30, 2012.
General and Administrative expenses fees for the six (6) months ending June 30,
2012 were $1,493. Professional fees were $890 for accounting and legal services.
Total expenses for the six (6) months ended June 30, 2011 were $2,244 resulting
in an operating loss for the period of $2,244 as compared to total expenses of
$2,384 for the period ended June 30, 2012. The increase in expenses was due
primarily to an increase general and administrative expenses in the quarter
ended June 30, 2012
Liquidity and Capital Resources
-------------------------------
At June 30, 2012 we had working capital of $3,576 consisting of cash on hand of
$3,576 and no current liabilities as compared to working capital of $14,513 at
June 30, 2011 and cash on hand of $14,513.
Net cash used in operating activities for the six months ended June 30, 2012 was
$6,236 as compared to $6,487 for the six month period ending June 30, 2011.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable to a smaller reporting company.
13
ITEM 4. CONTROLS AND PROCEDURES
Management's Report On Internal Control Over Financial Reporting
----------------------------------------------------------------
Our management is responsible for establishing and maintaining adequate internal
control over financial reporting. Internal control over financial reporting is
defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange
Act of 1934 as a process designed by, or under the supervision of, the company's
principal executive and principal financial officers and effected by the
company's board of directors, management and other personnel, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
accounting principles generally accepted in the United States of America and
includes those policies and procedures that:
- Pertain to the maintenance of records that in reasonable detail accurately
and fairly reflect the transactions and dispositions of the assets of the
company;
- Provide reasonable assurance that transactions are recorded as necessary
to permit preparation of financial statements in accordance with
accounting principles generally accepted in the United States of America
and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company;
and
- Provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the company's assets that
could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate. All internal control systems,
no matter how well designed, have inherent limitations. Therefore, even those
systems determined to be effective can provide only reasonable assurance with
respect to financial statement preparation and presentation. Because of the
inherent limitations of internal control, there is a risk that material
misstatements may not be prevented or detected on a timely basis by internal
control over financial reporting. However, these inherent limitations are known
features of the financial reporting process. Therefore, it is possible to design
into the process safeguards to reduce, though not eliminate, this risk.
As of June 30, 2012 management assessed the effectiveness of our internal
control over financial reporting based on the criteria for effective internal
control over financial reporting established in Internal Control--Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission ("COSO") and SEC guidance on conducting such assessments. Based on
that evaluation, they concluded that, during the period covered by this report,
such internal controls and procedures were not effective to detect the
inappropriate application of US GAAP rules as more fully described below. This
was due to deficiencies that existed in the design or operation of our internal
controls over financial reporting that adversely affected our internal controls
and that may be considered to be material weaknesses.
14
The matters involving internal controls and procedures that our management
considered to be material weaknesses under the standards of the Public Company
Accounting Oversight Board were: (1) lack of a functioning audit committee due
to a lack of a majority of independent members and a lack of a majority of
outside directors on our board of directors, resulting in ineffective oversight
in the establishment and monitoring of required internal controls and
procedures; (2) inadequate segregation of duties consistent with control
objectives; and (3) ineffective controls over period end financial disclosure
and reporting processes. The aforementioned material weaknesses were identified
by our Chief Executive Officer in connection with the review of our financial
statements as of September 30, 2012.
Management believes that the material weaknesses set forth in items (2) and (3)
above did not have an effect on our financial results. However, management
believes that the lack of a functioning audit committee and the lack of a
majority of outside directors on our board of directors results in ineffective
oversight in the establishment and monitoring of required internal controls and
procedures, which could result in a material misstatement in our financial
statements in future periods.
Management's Remediation Initiatives
------------------------------------
In an effort to remediate the identified material weaknesses and other
deficiencies and enhance our internal controls, we have initiated, or plan to
initiate, the following series of measures:
We will create a position to segregate duties consistent with control objectives
and will increase our personnel resources and technical accounting expertise
within the accounting function when funds are available to us. And, we plan to
appoint one or more outside directors to our board of directors who shall be
appointed to an audit committee resulting in a fully functioning audit committee
who will undertake the oversight in the establishment and monitoring of required
internal controls and procedures such as reviewing and approving estimates and
assumptions made by management when funds are available to us.
Management believes that the appointment of one or more outside directors, who
shall be appointed to a fully functioning audit committee, will remedy the lack
of a functioning audit committee and a lack of a majority of outside directors
on our Board.
We anticipate that these initiatives will be at least partially, if not fully,
implemented by December 31, 2012. Additionally, we plan to test our updated
controls and remediate our deficiencies by December 31, 2012.
Changes in internal controls over financial reporting
-----------------------------------------------------
There was no change in our internal controls over financial reporting that
occurred during the period covered by this report, which has materially
affected, or is reasonably likely to materially affect, our internal controls
over financial reporting.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None.
ITEM 1A. RISK FACTORS.
Not applicable to a smaller reporting company.
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.
31.1 Rule 13(a)-14(a)/15(d)-14(a) Certification of principal executive
officer
31.2 Rule 13(a)-14(a)/15(d)-14(a) Certification of principal financial and
accounting officer
32.1 Section 1350 Certification of principal executive officer and principal
financial and accounting officer
101* XBRL data files of Financial Statements and Notes contained in this
Quarterly Report on Form 10-Q.
* In accordance with Regulation S-T, the Interactive Data Files in Exhibit 101
to the Quarterly Report on Form 10-Q shall be deemed "furnished" and not
"filed."
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.
Blue Sun Media, Inc.
BY: /s/ Elise Travertini
--------------------
Elise Travertini
President, Secretary, Treasurer,
Principal Executive Officer,
Principal Financial and Accounting
Officer and Sole Director
Dated: August 9, 2012
16