UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended January 31, 2009
AFFINITY MEDIAWORKS CORP.
(Exact name of registrant as specified in its charter)
Nevada 75-3265854
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
455 Route 306 Suite M#2922 10952
Monsey, New York (Zip Code)
(Address of principal executive offices)
(206) 426-5044
(Registrant's telephone number, including area code)
Securities to be registered under Section 12(b) of the Act:
Title of each class
None
Name of each exchange on which registered
None
Securities to be registered under Section 12(g) of the Act:
None
(Title of class)
Check whether the registrant (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
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
definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
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 [ ]
State issuer's revenues for its most recent fiscal year. $ 0
As of June 31, 2008, the aggregate market value of the Registrant's voting stock
held by non-affiliates was approximately $0 (there were no trades in the
issuer's common stock as of the last business day of the second fiscal quarter).
Number of shares of the issuer's common stock, $0.00001 par value, outstanding
as of April 29, 2009: 50,166,000 shares
AFFINITY MEDIAWORKS CORP.
FORM 10-K
TABLE OF CONTENTS
Page
----
PART I
Item 1. Description of Business 3
Item 1A. Risk Factors 8
Item 1B Unresolved Staff Comments 8
Item 2. Properties 8
Item 3. Legal Proceedings 9
Item 4. Submission of Matters to a Vote of Security Holders 9
PART II
Item 5. Market for Common Equity and Related Stockholder Matters
and Small Business Issuer Purchases of Equity Securities 9
Item 6. Selected Financial Data 10
Item 7. Management's Discussion and Analysis or Plan of Operation 10
Item 7A Quantitative and Qualitative Disclosures About Market Risk 14
Item 8. Financial Statements 15
Item 9. Changes In and Disagreements With Accountants on Accounting
and Financial Disclosure 24
Item 9A(T). Controls and Procedures 24
Item 9B. Other Information 25
PART III
Item 10. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section16(a) of the Exchange Act 26
Item 11. Executive Compensation 28
Item 12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters 29
Item 13. Certain Relationships and Related Transactions and
Director Independence 30
Item 14. Principal Accountant Fees and Services 30
Item 15. Exhibits and Financial Statement Schedules 31
Signatures 31
2
PART I
ITEM 1. DESCRIPTION OF BUSINESS
FORWARD-LOOKING STATEMENTS
This annual report contains forward-looking statements. These statements relate
to future events or our future financial performance. In some cases, you can
identify forward-looking statements by terminology such as "could", "may",
"will", "should", "expect", "plan", "anticipate", "believe", "estimate",
"predict", "potential" or the negative of these terms or other comparable
terminology. These statements are only predictions and involve known and unknown
risks, uncertainties and other factors that may cause our or our industry's
actual results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. Except as required by applicable laws,
including the securities laws of the United States, we do not intend to update
any of the forward-looking statements so as to conform these statements to
actual results.
As used in this annual report, the terms "we", "us", "our", "the Company", mean
Affinity Mediaworks Corp., unless otherwise indicated.
All dollar amounts in this annual report refer to US dollars unless otherwise
indicated.
OVERVIEW
We were incorporated in the State of Nevada on December 17, 2007, under the name
"Green Bikes Rental Corporation". On January 22, 2009 we changed our name to
Affinity Mediaworks Corp. and on January 30, 2009 we received a new symbol for
the quotation of our common stock on the OTC Bulletin Board, "AFFW.OB".
We do not have any subsidiaries. Our principal offices are located 455 Route
306, Suite M#2922, Monsey, New York, 10952, and our telephone number is (206)
426-5044. Our fiscal year end is January 31.
We started as a company that intended to open bicycle rental stations in Kiev,
the capital of Ukraine. We have had no revenues as of the end of our most recent
fiscal year and we have only recently begun limited operations.
In November 2008 we completed our marketing research in Kiev, Ukraine. The
market research showed up that Kiev roads are not suitable for bicycle traffic
as the roads do not have designated bicycle lanes and vehicle traffic is very
high. This makes it very difficult and dangerous for bicycles to be on the road.
In addition our research showed that winters in Ukraine are very long, with snow
is on the ground from November to March and an average temperature below 32
degrees Fahrenheit. That makes the use of bicycles very difficult in these
months.
Accordingly, our management has decided to focus our business on acquiring or
merging with one or more operating businesses. Our efforts to identify a target
business are not limited to any particular industry. As of April 30, 2009, we
have identified a potential merger or acquisition target and our management is
negotiating the potential terms of acquisition or merger. However, there can be
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no assurance that our management will be successful in negotiating the merger or
acquisition of this target business and as such we continue to search for
opportunities for other mergers or acquisitions.
We intend to focus our search on businesses in North America, but we will also
explore opportunities in international markets that are attractive to us. We
will focus our efforts on seeking a business combination with a privately held
business. We believe that owners of privately held small or middle-market
companies may seek to realize the value of their investments through a sale or
recapitalization or through a merger with a public company to access capital to
fund their growth.
There is no assurance that we will successfully identify a potential target
business, enter into any definitive agreements with any target business, or
finally consummate a business combination with any potential target business.
ACQUISITION STRATEGY
We have identified the following guidelines that we believe are important in
evaluating a prospective target business. We will use these guidelines in
evaluating business combination opportunities; however, we may decide to enter
into a business combination with a target business that does not meet all of
these guidelines. We may not be able to complete a business combination with any
target business that meets all or part of these guidelines due to our limited
human, capital and other resources. In the alternative, we may seek to
consummate a business combination with a company that may be financially
unstable or in its early stages of development or growth.
ESTABLISHED COMPANY WITH POSITIVE CASH FLOW. We intend to acquire an established
company with a history of positive cash earnings before interest, taxes,
depreciation and amortization. We do not intend to acquire a start-up company, a
company with speculative business plans or a company that we believe has
significant risk attached to it.
STRONG COMPETITIVE POSITION IN INDUSTRY. We intend to analyze the strengths and
weaknesses of a target business relative to its competitors. The factors we will
consider include product quality, customer loyalty, cost impediments associated
with customers switching to competitors, patent protection, brand positioning
and capitalization. We will seek to acquire a business that has developed a
strong position within its market, is well positioned to capitalize on growth
opportunities and operates in an industry with significant barriers to entry. We
will seek to acquire a business that demonstrates advantages when compared to
its competitors, which may help to protect its market position and
profitability.
EXPERIENCED MANAGEMENT TEAM. We will seek to acquire a business that has an
experienced management team with a proven track record for delivering growth and
profits. We believe that the operating expertise of our management team will
complement, not replace, the target business' management team.
DIVERSIFIED CUSTOMER AND SUPPLIER BASE. We will seek to acquire a business that
has a diversified customer and supplier base. We believe that a company with a
diversified customer and supplier base is generally better able to endure
economic downturns, industry consolidation, changing business preferences and
other factors that may negatively impact its customers, suppliers and
competitors.
COMPETITION
In identifying, evaluating and selecting a target business, we may encounter
intense competition from other entities with business objectives similar to
ours. There are many blank check companies seeking to carry out a business plan
similar to ours that have completed initial public offerings in the United
States. Furthermore, there are a number of additional blank check companies in
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the registration process that have not yet completed initial public offerings,
and there are likely to be more blank check companies that have completed
initial public offerings before we are able to successfully consummate a
business combination.
We may also be subject to competition from entities other than blank check
companies, which may be special acquisition companies or capital pool companies,
that have a business objective similar to ours, including venture capital firms,
leverage buyout firms and operating businesses looking to expand their
operations through the acquisition of a target business. Many of these entities
are well-established and have extensive experience identifying and effecting
business combinations either directly or through affiliates. Many of these
competitors possess greater technical, human and other resources than us and our
financial resources may be relatively limited in comparison to many of these
competitors.
While we believe that numerous potential target businesses may be available for
acquisition, our ability to acquire a certain attractive target business will be
limited by our available financial resources. This inherent competitive
limitation may give others an advantage in pursuing the acquisition of a target
business. The fact that stockholder approval may delay the completion of a
business combination is an additional limitation that may be viewed unfavorably
by certain target businesses.
Any of these factors may place us at a competitive disadvantage in successfully
negotiating a business combination. Our management believes, however, that our
status as a public entity and our access to the United States public equity
markets may give us a competitive advantage in acquiring a target business with
significant growth potential on favorable terms over privately-held entities
with business objectives similar to ours.
If we succeed in effecting a business combination, there will likely be further
intense competition from competitors of the target business. We cannot assure
you that, subsequent to a business combination, we will have the resources or
ability to compete effectively.
EFFECTING A BUSINESS COMBINATION
WE HAVE NOT IDENTIFIED A TARGET BUSINESS
As of January 31, 2009, we have not selected a specific target on which to
concentrate our efforts for a business combination. Our management has not had
any preliminary contact or discussions on our behalf with representatives of any
prospective target business regarding the possibility of a potential merger,
capital stock exchange, asset acquisition or other strategic transaction with
us. In addition, our management has not yet taken any measure, directly or
indirectly, to locate a target business. There has been no due diligence,
investigation, discussions, negotiations and/or other similar activities
undertaken, directly or indirectly, by us, our management or by any third party,
with respect to an ongoing proposed business combination.
SOURCES OF TARGET BUSINESSES
We anticipate target business candidates will be brought to our attention by
various unaffiliated sources, including executives, private equity funds,
venture capital funds, investment bankers, attorneys, accountants and other
members of the financial community, who may present solicited or unsolicited
proposals. We expect such sources to become aware that we are seeking a business
combination candidate by a variety of means, such as publicly available
information relating to this offering, public relations and marketing efforts,
articles that may be published in industry trade papers discussing our intention
to effect a business combination, or direct contact by management of potential
target businesses.
5
Our management, as well as our existing stockholders and their affiliates, may
also bring to our attention target business candidates. While we do not
anticipate engaging the services of professional firms that specialize in
business acquisitions on any formal basis, we may engage these firms in the
future, in which case we may be required to pay a finder's fee or other
compensation. The terms of any such arrangements will be negotiated with such
persons on arm's length basis and disclosed to our stockholders in connection
with any proposed business combination. In no event, however, will we pay our
existing management, our existing stockholders, or any entity with which they
are affiliated any finder's fee or other compensation for services rendered to
us prior to or in connection with the consummation of a business combination. In
addition, neither our existing management nor our existing stockholders will
receive any finder's fee, consulting fees or any similar fees or other
compensation from any other person or entity, including any target company, in
connection with any business combination other than any compensation or fees to
be received for any services provided following such a business combination.
SELECTION OF A TARGET BUSINESS AND STRUCTURING OF A BUSINESS COMBINATION
Our management will have virtually unrestricted flexibility in identifying and
selecting a prospective target business. In evaluating a prospective target
business, our management will consider, among other factors, the following:
* growth potential;
* financial condition and results of operations;
* capital requirements;
* the value and extent of intellectual property;
* competitive position;
* stage of development of products, processes or services;
* degree of current or potential market acceptance of products,
processes or services;
* proprietary features and degree of protection of products, processes
or services; and
* costs associated with effecting the business combination.
Any evaluation relating to the merits of a particular business combination will
be based on the above factors as well as other considerations deemed relevant by
our management in effecting a business combination consistent with our business
objectives. In evaluating a prospective target business, we will conduct an
extensive due diligence review which will encompass, among other things, meeting
with incumbent management, inspecting facilities, and reviewing financial and
other information that is made available to us.
We will attempt to structure any business combination so as to achieve the most
favorable tax treatment for us, the target business and both companies'
stockholders. We cannot assure you, however, that the Internal Revenue Service
or appropriate state tax authorities will agree with our tax treatment of the
business combination.
6
The time and costs required to select and evaluate a target business and to
structure and complete a business combination cannot presently be ascertained
with any degree of certainty. Any costs incurred with respect to the
identification and evaluation of a prospective target business with which a
business combination is not ultimately completed will result in a loss to us and
reduce the amount of capital available to otherwise complete a business
combination.
FAIR MARKET VALUE OF TARGET BUSINESS
The fair market value of a target business will be determined by our Board of
Directors based upon standards generally accepted by the financial community,
such as actual and potential sales, earnings, cash flow, book value, and the
price for which comparable businesses have recently been sold. Other factors
contributing to a determination of the fair market value may include timing, the
reputation of the target business and the anticipated costs of completing the
transaction.
We are not required to obtain an opinion from an unaffiliated third party
regarding the fair market value of a target business we select at the time of
any transaction. We are also not required to obtain an opinion from an
unaffiliated third party indicating that the price we plan to pay is fair to our
stockholders from a financial perspective unless the target is affiliated with
our officers, directors, special advisors, existing stockholders or their
affiliates. However, because Yulia Nesterchuk, our sole officer and director,
has no experience in evaluating business combinations for blank check companies
like ours, her judgment may not meet the criteria that independent investment
banking firms or other similar blank check companies usually use.
PROBABLE LACK OF BUSINESS DIVERSIFICATION
It is probable that we will have the ability to effect only a single business
combination, although this may entail the simultaneous acquisition of several
compatible operating businesses or assets. Unlike other entities which may have
the resources to complete several business combinations with entities operating
in multiple industries or multiple areas of a single industry, we will likely
not have sufficient resources to diversify our operations or benefit from the
possible spreading of risks or offsetting of losses. By consummating a business
combination with a single entity or a limited number of entities, our lack of
diversification may leave us dependent upon the performance of a single business
or a limited number of businesses, and result in us being dependent upon the
development or market acceptance of a single or limited number of products or
services.
LIMITED ABILITY TO EVALUATE THE MANAGEMENT OF A TARGET BUSINESS
Although we intend to closely scrutinize the management of prospective target
businesses when evaluating the potential to effect a business combination, we
cannot assure you that our assessment will prove to be correct. In addition, we
cannot assure you that new members who join our management team following a
business combination will have the necessary skills, qualifications or abilities
to manage a public company. Furthermore, the future role of our sole officer and
director, if any, in a target business cannot presently be stated with any
certainty. While it is possible that our current officer and director will
remain associated with us in some capacity following a business combination, it
is unlikely that she will devote her full efforts to our affairs after the
consummation of a business combination. Moreover, we cannot assure you that our
sole officer and director will have substantial experience or knowledge
concerning the operations of any particular target business.
7
OPPORTUNITY FOR STOCKHOLDER APPROVAL OF BUSINESS COMBINATION
We may not submit a business combination to our stockholders for approval if the
nature of the transaction would not ordinarily require stockholder approval
under applicable governing laws. If we are required to submit the transaction to
our stockholders for approval, we will furnish our stockholders with proxy
solicitation materials, which will include a description of the operations of
the target business and certain required financial information regarding the
business. Also, we will proceed with the business combination only if a majority
of the votes cast by the holders of our common stock at the meeting are in favor
of the business combination. To compensate for a potential shortfall in cash, we
may be required to structure the business combination, in whole or in part,
using the issuance of our common stock as consideration. Accordingly, any
increase in the number of shares of our issued and outstanding common stock
could hinder our ability to consummate a business combination in an efficient
manner or to optimize our capital structure.
When we seek stockholder approval for a business combination, we will not offer
each stockholder a right to have their shares of common stock redeemed for cash
if the stockholder votes against the business combination and the business
combination is approved and completed.
RESEARCH AND DEVELOPMENT
We have not spent any amounts on research and development activities during the
year ended January 31, 2008. We anticipate that we will not incur any expenses
on research and development over the next 12 months. Our planned expenditures on
our operations or a business combination are summarized under the section of
this annual report entitled "Management's Discussion and Analysis of Financial
Position and Results of Operations".
INTELLECTUAL PROPERTY
As of April 30, 2009 we did not own any intellectual property.
ITEM 1A. RISK FACTORS.
Not applicable.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
None.
ITEM 2. PROPERTIES.
Our administrative office is located at 455 Route 306, Suite M#2922, Monsey, New
York, 10952, and our telephone number is (206) 426-5044. Our registered
statutory office is located at 6100 Neil Road, Suite 500, Reno, Nevada 89511.
8
ITEM 3. LEGAL PROCEEDINGS.
We know of no legal proceedings to which we are a party or to which any of our
property is the subject which are pending, threatened or contemplated or any
unsatisfied judgments against us.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Incorporated by reference from our report on Form 8-K filed on January 30, 2009.
PART II
ITEM 5. MARKET FOR EQUITY SECURITIES AND OTHER SHAREHOLDER MATTERS.
MARKET INFORMATION
On October 17, 2008, our shares began trading on FINRA's Over-The-Counter
Bulletin Board (the "OTC Bulletin Board") under the symbol "GBKR." There has
been minimal trading activity to date with no trading during our last fiscal
year. On January 30, 2009 our symbol was changed to "AFFW" to reflect our name
change. There is a limited public market for our common stock. The market for
our stock is highly volatile. We cannot assure you that there will be a market
in the future for our common stock.
OTC Bulletin Board securities are not listed and traded on the floor of an
organized national or regional stock exchange. Instead, OTC Bulletin Board
securities transactions are conducted through a telephone and computer network
connecting dealers in stocks. OTC Bulletin Board issuers are traditionally
smaller companies that do not meet the financial and other listing requirements
of a regional or national stock exchange.
Our common stock became eligible for quotation on the OTC Bulletin Board on
October 17, 2008, but as of January 31, 2009 we have not had any trades in our
common stock.
Our common stock is classified as a penny stock and as such, broker dealers
dealing in our common stock will be subject to the disclosure rules for
transactions involving penny stocks, which require the broker dealer to
determine if purchasing our common stock is suitable for a particular investor.
The broker dealer must also obtain the written consent of purchasers to purchase
our common stock. The broker dealer must also disclose the best bid and offer
prices available for our stock and the price at which the broker dealer last
purchased or sold our common stock. These additional burdens imposed on broker
dealers may discourage them from effecting transactions in our common stock,
which could make it difficult for an investor to sell their shares.
HOLDERS
As of April 30, 2009, we had approximately 51 shareholders of record and
50,166,000 outstanding shares of common stock.
DIVIDENDS
We have never paid or declared any dividends on our common stock and do not
anticipate paying cash dividends in the foreseeable future.
9
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
We currently do not have any equity compensation plans.
RECENT SALES OF UNREGISTERED SECURITIES
None.
RECENT PURCHASES OF EQUITY SECURITIES BY US AND OUR AFFILIATED PURCHASES
As of January 31, 2009 we had not repurchased any of our common stock, and we
have not publicly announced any repurchase plans or programs
ITEM 6. SELECTED FINANCIAL DATA.
Not Applicable.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT
OF OPERATIONS.
The following discussion should be read in conjunction with our financial
statements, including the notes thereto, appearing elsewhere in this annual
report. The discussions of results, causes and trends should not be construed to
imply any conclusion that these results or trends will necessarily continue into
the future.
FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements that involve risks and
uncertainties. These statements relate to future events or our future financial
performance. In some cases, you can identify forward-looking statements by
terminology including, "could", "may", "will", "should", "expect", "plan",
"anticipate", "believe", "estimate", "predict", "potential" or the negative of
these terms or other comparable terminology. These statements are only
predictions. Actual events or results may differ materially.
While these forward-looking statements, and any assumptions upon which they are
based, are made in good faith and reflect our current judgment regarding the
direction of our business, actual results will almost always vary, sometimes
materially, from any estimates, predictions, projections, assumptions or other
future performance suggested in this annual report.
LIQUIDITY AND CAPITAL RESOURCES
As of January 31, 2009, we had cash of $16,135 in our bank accounts and a
working capital surplus of $8,604 compared to $3,000 cash and working capital
deficit of $405 as of January 31, 2008. As of January 31, 2009, we had total
assets of $16,135 and total liabilities of $7,531. As of January 31, 2009 we
have accumulated a deficit of $48,998.
From December 17, 2007 (date of inception) to January 31, 2009, we raised net
proceeds of $50,830 in cash from the issuance of common stock. $50,830 was
raised during the year ended January 31, 2009 and $50,830 was raised during the
period from December 17, 2007 (inception) to January 31, 2009.
10
We used net cash of $37,695 in operating activities for the year ended January
31, 2009 compared to $38,100 for the period from December 17, 2007 (inception)
to January 31, 2009.
If we are successful in consummating a business combination, we will incur
additional costs for personnel and business expansion. In order for us to
attract and retain quality personnel, we anticipate that we will need to offer
competitive salaries, issue common stock to consultants and employees and grant
stock options to future employees. We estimate that our expenses over the next
12 months (beginning May 2009) will be approximately $300,000 as described in
the table below. These estimates may change significantly depending on the
nature of our future business activities, our ability to raise capital from
shareholders or other sources and whether we continue our operations.
Target completion Estimated
Description date or period expenses($)
----------- -------------- -----------
Due diligence of the potential target business 12 months 20,000
Legal and accounting fees related to the
acquisition of the potential target business 12 months 40,000
Acquisition and development costs of the
potential target business 12 months 50,000
Investor relations costs 12 months 30,000
Raise additional private or public equity
(legal, accounting and marketing fees) May 2009 100,000
Legal and professional fees 12 months 25,000
Travel and promotional expenses 12 months 25,000
Other general and administrative expenses 12 months 10,000
-------
TOTAL 300,000
=======
We anticipate that we will not generate any revenues in the near future and we
do not anticipate achieving sufficient positive operating cash flow until we are
able complete a business combination and thus generate substantial revenues. It
may take several years for us to fully realize our business plan. There is no
assurance we will achieve profitability after completing a business combination.
As of January 31, 2009 we had cash of $16,135 in our bank accounts. We intend to
meet the balance of our cash requirements for the next 12 months through a
combination of debt financing and equity financing by way of private placements.
We currently do not have any arrangements in place for the completion of any
further private placement financings and there is no assurance that we will be
successful in completing any further private placement financings. There is no
assurance that any financing will be available or if available, on terms that
will be acceptable to us. We may not raise sufficient funds to fully carry out
any business plan.
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RESULTS OF OPERATIONS
LACK OF REVENUES
We have earned no revenues and have sustained operational losses since our
inception on December 17, 2007 to January 31, 2009. As of January 31, 2009, we
had an accumulated deficit of $48,998. We anticipate that we will not earn any
revenues during the current fiscal year or in the foreseeable future, as we do
not have any operations and are presently engaged in seeking a business
combination with a target business. We anticipate that our business will incur
substantial losses in the next two years. We believe that our success depends on
our ability to complete a business combination and our ability to develop a
target business.
At this time, our ability to generate any revenues continues to be uncertain.
The auditor's report on our audited financial statements on January 31, 2009 and
2008 contains an additional explanatory paragraph which identifies issues that
raise substantial doubt about our ability to continue as a going concern. Our
financial statements do not include any adjustment that might result from the
outcome of this uncertainty.
EXPENSES
From December 17, 2007 (date of inception) to January 31, 2009, our total
expenses were $48,998. The major components of our total expenses since
inception to January 31, 2009 consist of: $33,086 for legal and accounting fees,
$9,140 for general and administrative, $3,250 for consulting services, $3,250
for rent and $272 for interest expense.
Our total expenses increased by $47,188 to $48,093 for the year ended January
31, 2009 from $905 for the period from December 17, 2007 (inception) to January
31, 2008. The increase in total expenses was mainly due to increased accounting,
audit and legal fees and an increase in the time during which we were operating
as we were only incorporated on December 17, 2007.
For the same reasons our accounting and legal fees increased by $32,526 to
$32,806 for the year ended January 31, 2009 from $280 for the period from
December 17, 2007 (inception) to January 31, 2008, our general and
administrative expenses increased by $8,890 to $9,015 for the year ended January
31, 2009 from $125 for the period from December 17, 2007 (inception) to January
31, 2008, our consulting fees increased by $2,750 to $3,000 for the year ended
January 31, 2009 from $250 for the period from December 17, 2007 (inception) to
January 31, 2008, our rent costs increased by $2,750 to $3,000 for the year
ended January 31, 2009 from $250 for the period from December 17, 2007
(inception) to January 31, 2008 and our interest costs increased by $272 to $272
for the year ended January 31, 2009 from $nil for the period from December 17,
2007 (inception) to January 31, 2008.
NET LOSS
For the year ended January 31, 2009 we incurred net loss of $43,900 compared to
$905 for the year ended January 31, 2008. From December 17, 2007 (date of
inception) to January 31, 2009, we incurred an aggregate net loss of $44,805.
The net loss was primarily due to operating expenses related to accounting,
audit, and legal fees as well as general and administrative expenses. We
incurred net loss of $0.00 per share for the year ended January 31, 2009 and a
net loss of $0.00 per share for the year ended January 31, 2008.
12
OFF-BALANCE SHEET ARRANGEMENTS
We have no significant off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in our financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that are material to our
stockholders.
INFLATION
The effect of inflation on our revenues and operating results has not been
significant.
KNOWN MATERIAL TRENDS AND UNCERTAINTIES
Our continuation as a going concern is dependent upon our ability to generate
sufficient cash flow from outside sources to sustain operations and meet our
obligations on a timely basis, and ultimately upon our ability to attain
profitability. We have limited capital with which to pursue our business plan.
There can be no assurance that we will have sufficient resources to complete any
business combination or that our future operations will be profitable after
completing the business combination.
These factors raise substantial doubt about our ability to continue as a going
concern. Our auditors have issued a going concern opinion. This means that our
auditors believe there is substantial doubt that we can continue as an on-going
business for the next 12 months. The financial statements do not include any
adjustments that might result from the uncertainty about our ability to continue
our business. The threat that we will be unable to continue as a going concern
will be eliminated only when our revenues have reached a level that is able to
sustain our business operations.
We plan to review and identify potential businesses for acquisitions or other
business combinations. Our management is unable to predict whether or when any
business combination will occur or the likelihood of any particular transaction
being completed on favorable terms and conditions. We may be unable to obtain
the necessary financing to complete any transactions and could financially
overextend ourselves. Acquisitions or other business combinations may present
financial, managerial and operational challenges, including difficulties in
integrating operations and personnel. Any failure to integrate new businesses or
manage any new transactions successfully could adversely affect our business and
future financial performance.
CRITICAL ACCOUNTING POLICIES
Our financial statements are impacted by the accounting policies used and the
estimates and assumptions made by management during their preparation. A
complete summary of these policies is included in note 1 of the notes to our
financial statements. We have identified below the accounting policies that are
of particular importance in the presentation of our financial position, results
of operations and cash flows, and which require the application of significant
judgment by management.
REVENUE RECOGNITION
Revenue is recognized when it is realized or realizable and earned. We consider
revenue realized or realizable and earned when persuasive evidence of an
arrangement exists, services have been provided, and collectability is
reasonably assured. Revenue that is billed in advance such as recurring weekly
or monthly services are initially deferred and recognized as revenue over the
period the services are provided.
13
USE OF ESTIMATES
The preparation of the financial statements in conformity with 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.
IMPAIRMENT OF LONG LIVED ASSETS
Long-lived assets are reviewed for impairment in accordance with SFAS No. 144,
"Accounting for the Impairment or Disposal of Long- lived Assets". Under SFAS
No. 144, long-lived assets are tested for recoverability whenever events or
changes in circumstances indicate that their carrying amounts may not be
recoverable. An impairment charge is recognized or the amount, if any, which the
carrying value of the asset exceeds the fair value.
BASIC AND DILUTED LOSS PER SHARE
Basic and diluted net loss per share calculations are calculated on the basis of
the weighted average number of common shares outstanding during the year. The
per share amounts include the dilutive effect of common stock equivalents in
years with net income. Basic and diluted loss per share is the same due to the
anti dilutive nature of potential common stock equivalents.
STOCK BASED COMPENSATION
The Company accounts for stock-based employee compensation arrangements using
the fair value method in accordance with the provisions of Statement of
Financial Accounting Standards No.123(R) or SFAS No. 123(R), Share-Based
Payments, and Staff Accounting Bulletin No. 107, or SAB 107, Share-Based
Payments. The company accounts for the stock options issued to non-employees in
accordance with the provisions of Statement of Financial Accounting Standards
No. 123, or SFAS No. 123, Accounting for Stock-Based Compensation, and Emerging
Issues Task Force No. 96-18, Accounting for Equity Instruments with Variable
Terms That Are Issued for Consideration other Than Employee Services under FASB
Statement No. 123.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable.
14
ITEM 8. FINANCIAL STATEMENTS.
FINANCIAL STATEMENTS
Affinity Mediaworks Corp.
(formerly Green Bikes Rental Corporation)
January 31, 2009
Index
-----
Report of Independent Registered Public Accounting Firm................... 16
Balance Sheets............................................................ 17
Statements of Operations.................................................. 18
Statements of Cash Flows.................................................. 19
Statement of Changes in Stockholders' Deficit............................. 20
Notes to the Financial Statements......................................... 21
15
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
Affinity Mediaworks Corp.
(formerly Green Bikes Rental Corporation)
We have audited the accompanying balance sheets of Affinity Mediaworks Corp.
(formerly Green Bikes Rental Corporation) (a development stage company) as of
January 31, 2009 and 2008, and the related statements of operations, changes in
stockholders' deficit, and cash flows for the years then ended and for the
period from December 17, 2007 (inception) through January 31, 2009. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Affinity Mediaworks Corp. as of
January 31, 2009 and 2008, and the results of its operations, changes in
stockholders' deficit and cash flows for the periods described above in
conformity with accounting principles generally accepted in the United States of
America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has suffered recurring losses from operations,
which raises substantial doubt about its ability to continue as a going concern.
Management's plans regarding those matters also are described in Note 2. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/ M&K CPAS, PLLC
- -------------------------------
www.mkacpas.com
Houston, Texas
April 30, 2009
16
Affinity Mediaworks Corp.
(formerly Green Bikes Rental Corporation)
(A Development Stage Company)
Balance Sheets
As of January 31, 2009 and January 31, 2008
January 31, January 31,
2009 2008
-------- --------
ASSETS
Current Assets
Cash $ 16,135 $ 3,000
-------- --------
Total Assets $ 16,135 $ 3,000
======== ========
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current Liabilities
Accounts payable $ 4,126 $ --
Due to related parties 3,405 3,405
-------- --------
7,531 3,405
Stockholders' Deficit
Preferred stock, 75,000,000 shares authorized, $.00001 par value,
none issued and outstanding -- --
Common stock, 200,000,000 shares authorized, $.00001 par value,
50,166,000 and 100,000,000 shares issued and outstanding at
January 31, 2009 and 2008, respectively 502 1,000
Additional paid-in capital 57,100 (500)
Deficit accumulated during the development stage (48,998) (905)
-------- --------
Total Stockholders' Deficit 8,604 (405)
-------- --------
Total Liabilities and Stockholders' Deficit $ 16,135 $ 3,000
======== ========
See the accompanying summary of accounting policies and
notes to the financial statements
17
Affinity Mediaworks Corp.
(formerly Green Bikes Rental Corporation)
(A Development Stage Company)
Statements of Operations
For the Year Ended January 31, 2009 and January 31, 2008 and from
December 17, 2007 (Inception) Through January 31, 2009
December 17, 2007
For the For the (inception)
Year Ended Year Ended through
January 31, January 31, January 31,
2009 2008 2009
----------- ----------- -----------
Operating Expenses
Consulting services $ 3,000 $ 250 $ 3,250
General and administrative 9,015 125 9,140
Rent 3,000 250 3,250
Legal and accounting 32,806 280 33,086
Interest Expense 272 -- 272
----------- ----------- -----------
Total Expenses 48,093 905 48,998
----------- ----------- -----------
Net Loss $ (48,093) $ (905) $ (48,998)
=========== =========== ===========
Net Loss Per Common Share - Basic and Diluted $ (0.00) $ (0.00) $ (0.00)
Weighted Average Number of Common Shares Outstanding 47,269,386 40,000,000
See the accompanying summary of accounting policies and
notes to the financial statements
18
Affinity Mediaworks Corp.
(formerly Green Bikes Rental Corporation)
(A Development Stage Company)
Statements of Cash Flows
For the Year Ended January 31, 2009 and from
December 17, 2007 (Inception) Through January 31, 2008 and 2009
December 17, 2007 December 17, 2007
For the (inception) (inception)
Year Ended through through
January 31, January 31, January 31,
2009 2008 2009
-------- -------- --------
Operating Activities
Net loss $(48,093) $ (905) $(48,998)
Adjustments to reconcile net loss to net
cash used in operating activities:
Donated Capital consulting services and rent expense 6,000 500 6,500
Imputed interest on shareholder advance 272 -- 272
Changes in operating assets and liabilities
Increase in accounts payable 4,126 -- 4,126
-------- -------- --------
Net Cash Used in Operating Activities (37,695) (405) (38,100)
-------- -------- --------
Financing Activities
Proceeds from the sale of common stock 50,830 -- 50,830
Advance from related party -- 3,405 3,405
-------- -------- --------
Net Cash Provided by Financing Activities 50,830 3,405 54,235
-------- -------- --------
Increase in Cash 13,135 3,000 16,135
Cash - Beginning of Period 3,000 -- --
-------- -------- --------
Cash - End of Period $ 16,135 $ 3,000 $ 16,135
======== ======== ========
Supplemental Disclosures:
Interest paid -- -- --
Income taxes paid -- -- --
======== ======== ========
See the accompanying summary of accounting policies and
notes to the financial statements
19
Affinity Mediaworks Corp.
(formerly Green Bikes Rental Corporation)
(A Development Stage Company)
Statement of Changes in Stockholders' Deficit
For the Period From December 17, 2007 (Inception) Through
January 31, 2008 and January 31, 2009
Additional
Common Stock Paid-in Accumulated
Shares Amount Capital Deficit Total
------ ------ ------- ------- -----
Balances at December 17, 2007 -- $ -- $ -- $ -- $ --
Issuance of founder's shares 100,000,000 1,000 (1,000) -- --
Donated services -- -- 500 -- 500
Net loss -- -- -- (905) (905)
------------ ------ ------- -------- --------
Balances at January 31, 2008 100,000,000 50 (500) (905) (405)
============ ====== ======= ======== ========
Issuance of stock for cash 10,155,000 102 50,728 -- 50,830
Donated services -- -- 6,000 -- 6,000
Imputed interest on shareholder
advances -- -- 272 -- 272
Shares returned (60,000,000) (60) 60 -- --
Net loss -- -- -- (48,093) (48,093)
------------ ------ ------- -------- --------
Balances at January 31, 2009 50,166,000 $ 502 $57,100 $(48,998) $ 8,604
============ ====== ======= ======== ========
See the accompanying summary of accounting policies and
notes to the financial statements
20
Affinity Mediaworks Corp.
(formerly Green Bikes Rental Corporation)
(A Development Stage Company)
Notes to the Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Green Bikes Rental Corporation was incorporated on December 17, 2007, under the
laws of the State of Nevada, as a development stage company.
On January 7, 2009, the Company amended its Articles of Incorporation to change
the name of Affinity Rental Corporation to Affinity Mediaworks Corp., to
increase the authorized share capital of the Company to 200,000,000 and to
affect a 20 for 1 forward-split of the Company's issued and outstanding common
shares.
BASIS OF PRESENATATION
The Company follows accounting principles generally accepted in the United
States of America. In the opinion of management, all adjustments, consisting of
normal recurring adjustments, necessary for a fair presentation of financial
position and the results of operations for the periods presented have been
reflected herein.
REVENUE RECOGNITION
Revenue is recognized when it is realized or realizable and earned. Affinity
considers revenue realized or realizable and earned when persuasive evidence of
an arrangement exists, services have been provided, and collectability is
reasonably assured. Revenue that is billed in advance such as recurring weekly
or monthly services are initially deferred and recognized as revenue over the
period the services are provided.
USE OF ESTIMATES
The preparation of the financial statements in conformity with 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.
CASH AND CASH EQUIVALENTS
For purposes of the statement of cash flows, the Company considers all highly
liquid investments purchased with an original maturity of three months or less
to be cash equivalents. As of January 31, 2009 and 2008, there were no cash
equivalents.
DEVELOPMENT STAGE COMPANY
The Company complies with Statement of Financial Accounting Standard ("SFAS")
No. 7 and the Securities and Exchange Commission Exchange Act 7 for its
characterization of the Company as development stage.
IMPAIRMENT OF LONG LIVED ASSETS
Long-lived assets are reviewed for impairment in accordance with SFAS No. 144,
"Accounting for the Impairment or Disposal of Long- lived Assets". Under SFAS
No. 144, long-lived assets are tested for recoverability whenever events or
changes in circumstances indicate that their carrying amounts may not be
recoverable. An impairment charge is recognized or the amount, if any, which the
carrying value of the asset exceeds the fair value.
21
FAIR VALUE OF FINANCIAL INSTRUMENTS
Financial instruments, including cash, receivables, accounts payable, and notes
payable are carried at amounts which reasonably approximate their fair value due
to the short-term nature of these amounts or due to variable rates of interest
which are consistent with market rates. No adjustments have been made in the
current period.
The Company accounts for income taxes under the Financial Accounting Standards
Board of Financial Accounting Standard No. 109, "Accounting for Income Taxes"
("Statement 109"). Under Statement 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 basis. 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
Statement 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. There was no current or deferred income tax expense or benefits for the
periods ending January 31, 2009.
BASIC AND DILUTED NET LOSS PER COMMON SHARE
Basic and diluted net loss per share calculations are calculated on the basis of
the weighted average number of common shares outstanding during the year. The
per share amounts include the dilutive effect of common stock equivalents in
years with net income. Basic and diluted loss per share is the same due to the
anti dilutive nature of potential common stock equivalents.
STOCK BASED COMPENSATION
The Company accounts for stock-based employee compensation arrangements using
the fair value method in accordance with the provisions of Statement of
Financial Accounting Standards No.123(R) or SFAS No. 123(R), Share-Based
Payments, and Staff Accounting Bulletin No. 107, or SAB 107, Share-Based
Payments. The company accounts for the stock options issued to non-employees in
accordance with the provisions of Statement of Financial Accounting Standards
No. 123, or SFAS No. 123, Accounting for Stock-Based Compensation, and Emerging
Issues Task Force No. 96-18, Accounting for Equity Instruments with Variable
Terms That Are Issued for Consideration other Than Employee Services under FASB
Statement No. 123.
The Company did not grant any stock options or warrants during the period ended
January 31, 2009.
RECENT ACCOUNTING PRONOUNCEMENTS
Affinity does not expect the adoption of recently issued accounting
pronouncements to have a significant impact on its results of operations,
financial position or cash flow.
NOTE 2 - GOING CONCERN
Affinity' financial statements have been prepared on a going concern basis,
which contemplates the realization of assets and settlement of liabilities and
commitments in the normal course of business for the foreseeable future. Since
inception, the Company has accumulated losses aggregating to $48,998 and has
insufficient working capital to meet operating needs for the next twelve months
as of January 31, 2009, all of which raise substantial doubt about Affinity'
ability to continue as a going concern.
NOTE 3 - RELATED PARTY TRANSACTIONS
A director loaned $3,405 to the Company during the period ended January 31,
2009, which is unsecured, non interest bearing, with no specific terms of
repayment. Imputed interest in the amount of $272 is included as an increase to
additional paid in capital.
22
During the year ended January 31, 2009 the Company recognized a total of $3,000
for donated services and $3,000 for consulting services provided by the
President and Director of the Company.
NOTE 4 - COMMON STOCK
Affinity issued 5,000,000 shares of common stock (founder's shares) on December
17, 2007 to the President and Director of the Company. In addition, 508,300
shares of common stock issued to the public on May 15, 2008 for $50,830.
On January 31, 2009, 60,000,000 shares of the Company's common stock were
returned and subsequently cancelled by the Company. The shares were returned for
no consideration to the shareholder.
On January 30, 2009, the Company declared a 20-for-1 forward stock split on its
issued and outstanding common stock to the holders of record on that date. The
accompanying financial statements and related notes have been adjusted
accordingly to reflect this forward stock split.
NOTE 5 - INCOME TAXES
The Company has tax losses which may be applied against future taxable income.
The potential tax benefits arising from these loss carry forwards expire
beginning in 2028 and are offset by a valuation allowance due to the uncertainty
of profitable operations in the future. The net operating loss carry forward was
$48,998 at January 31, 2009. The significant components of the deferred tax
asset as of January 31, 2009 are as follows:
Net operating loss carryforwards $ 16,659
Valuation allowance (16,659)
--------
Net deferred tax asset $ --
========
23
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
ITEM 9A(T). CONTROLS AND PROCEDURES.
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
We carried out an evaluation, under the supervision and with the participation
of our management, including our principal executive officer and principal
financial officer, of the effectiveness of our disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based
upon that evaluation, our principal executive officer and principal financial
officer concluded that, as of the end of the period covered in this report, our
disclosure controls and procedures were not effective to ensure that information
required to be disclosed in reports filed under the Securities Exchange Act of
1934 is recorded, processed, summarized and reported within the required time
periods and 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.
Our management, including our principal executive officer and principal
financial officer, does not expect that our disclosure controls and procedures
or our internal controls will prevent all error or 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. Due to 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, have been detected. To address the material weaknesses, we
performed additional analysis and other post-closing procedures in an effort to
ensure our consolidated financial statements included in this annual report have
been prepared in accordance with generally accepted accounting principles.
Accordingly, management believes that the financial statements included in this
report fairly present in all material respects our financial condition, results
of operations and cash flows for the periods presented.
MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining adequate internal
control over financial reporting as defined in Rule 13a-15(f) under the
Securities Exchange Act, as amended. Our management assessed the effectiveness
of our internal control over financial reporting as of January 31, 2009. In
making this assessment, our management used the criteria set forth by the
Committee of Sponsoring Organizations of the Treadway Commission ("COSO") in
Internal Control-Integrated Framework. A material weakness is a deficiency, or a
combination of deficiencies, in internal control over financial reporting, such
that there is a reasonable possibility that a material misstatement of the
company's annual or interim financial statements will not be prevented or
detected on a timely basis. We have identified the following material
weaknesses.
1. As of January 31, 2009, we did not maintain effective controls over
the control environment. Specifically we have not developed and
effectively communicated to our employees its accounting policies and
procedures. This has resulted in inconsistent practices. Further, the
24
Board of Directors does not currently have any independent members and
no director qualifies as an audit committee financial expert as
defined in Item 407(d)(5)(ii) of Regulation S-K. Since these entity
level programs have a pervasive effect across the organization,
management has determined that these circumstances constitute e a
material weakness.
2. As of January 31, 2009, we did not maintain effective controls over
financial statement disclosure. Specifically, controls were not
designed and in place to ensure that all disclosures required were
originally addressed in our financial statements. Accordingly,
management has determined that this control deficiency constitutes a
material weakness.
Because of these material weaknesses, management has concluded that the Company
did not maintain effective internal control over financial reporting as of
January 31, 2009, based on the criteria established in "Internal
Control-Integrated Framework" issued by the COSO.
CHANGE IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no changes in our internal control over financial reporting that
occurred during our last fiscal year that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.
ATTESTATION REPORT OF THE REGISTERED PUBLIC ACCOUNTING FIRM
This annual report does not include an attestation report of our registered
public accounting firm regarding internal control over financial reporting.
Management's report was not subject to attestation by our registered public
accounting firm pursuant to temporary rules of the SEC that permit us to provide
only management's report in this annual report.
ITEM 9B. OTHER INFORMATION.
None.
25
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS OF THE
COMPANY
DIRECTORS AND EXECUTIVE OFFICERS
Set forth below are the names, ages, terms of office and positions of our
executive officers and directors.
Name Age Position
---- --- --------
Yulia Nesterchuk 57 President, Secretary, Treasurer and
Director, CEO, CFO
All directors hold office until the next annual meeting of our shareholders and
until their successors have been elected and qualify. Officers serve at the
pleasure of the Board of Director. The directors will devote such time and
effort to our business and affairs as may be necessary to perform their
responsibilities. No annual meetings.
Aside from Ms. Nesterchuk, there are no other persons whose activities will be
material to our operations at this time. Ms. Nesterchuk is our sole "promoter"
as such term is defined under the Act. However as finances allow, we will engage
management and other personnel as required in such areas as finance,
administration, sales and marketing, research and development, and overall
management.
YULIA NESTERCHUK. Since December 17, 2007, Ms. Nesterchuk has been our
President, Chief Executive Officer, Secretary, Treasurer, Chief Financial
Officer, Principal Accounting Officer and sole member of our Board of Directors.
Since March 3, 1993 Ms. Nesterchuk has been a co-owner of a family business,
Nesterchuk's Clinic, a chiropractor's office operated by Mr. Yuriy Nesterchuk,
her husband. Ms. Nesterchuk devotes approximately 15 hours per week to our
operations, and will devote additional time as required. Ms. Nesterchuk is not
an officer or director of any other reporting company.
BOARD OF DIRECTORS AND DIRECTOR NOMINEES
Our sole officer and director, Yulia Nesterchuk, is currently the only member of
our Board of Directors. We do not have a nominating committee of the Board,
since the Board as a whole selects individuals to stand for election as members.
Since the Board does not include a majority of independent directors, the
decisions of the Board regarding director nominees are made by persons who have
an interest in the outcome of the determination. The Board will consider
candidates for directors proposed by security holders, although no formal
procedures for submitting candidates have been adopted. Unless otherwise
determined, at any time not less than 90 days prior to the next annual Board
meeting at which the slate of director nominees is adopted, the Board will
accept written submissions from proposed nominees that include the name, address
and telephone number of the proposed nominee; a brief statement of the nominee's
qualifications to serve as a director; and a statement as to why the security
holder submitting the proposed nominee believes that the nomination would be in
the best interests of the security holders. If the proposed nominee is not the
same person as the security holder submitting the name of the nominee, a letter
from the nominee agreeing to the submission of his or her name for consideration
should be provided at the time of submission. The letter should be accompanied
by a resume supporting the nominee's qualifications to serve on the Board, as
well as a list of references.
The Board identifies director nominees through a combination of referrals from
different people, including management, existing Board members and security
holders. Once a candidate has been identified, the Board reviews the
individual's experience and background and may discuss the proposed nominee with
the source of the recommendation. If the Board believes it to be appropriate,
26
Board members may meet with the proposed nominee before making a final
determination whether to include the proposed nominee as a member of the slate
of director nominees submitted to security holders for election to the Board.
Among the factors that the Board considers when evaluating proposed nominees are
their knowledge of and experience in business matters, finance, capital markets
and mergers and acquisitions. The Board may request additional information from
each candidate prior to reaching any determination. The Board is under no
obligation to formally respond to all recommendations, although as a matter of
practice, it will endeavor to do so.
DIRECTOR INDEPENDENCE
Our securities are quoted on the OTC Bulletin Board which does not have any
director independence requirements. Once we engage further directors and
officers, we plan to develop a definition of independence and scrutinize our
Board of Directors with regard to this definition.
AUDIT COMMITTEE
The functions of the audit committee are currently carried out by our Board of
Directors. Our Board has determined that we do not have an audit committee
financial expert on our Board carrying out the duties of the audit committee.
The Board has determined that the cost of hiring a financial expert to act as a
director and to be a member of the audit committee or otherwise perform audit
committee functions outweighs the benefits of having a financial expert on the
audit committee.
SIGNIFICANT EMPLOYEES
Other than our sole officer and director, we do not expect any other individuals
to make a significant contribution to our business.
FAMILY RELATIONSHIPS
There are no family relationships among our officers or directors.
NO LEGAL PROCEEDINGS
None of our directors, executive officers, promoters or control persons has been
involved in any of the following events during the past five years:
* any bankruptcy petition filed by or against any business of which such
person was a general partner or executive officer either at the time
of the bankruptcy or within two years prior to that time;
* any conviction in a criminal proceeding or being subject to a pending
criminal proceeding (excluding traffic violations and other minor
offenses);
* being subject to any order, judgment, or decree, not subsequently
reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining, barring,
suspending or otherwise limiting her involvement in any type of
business, securities or banking activities; or
27
* being found by a court of competent jurisdiction (in a civil action),
the SEC or the Commodity Futures Trading Commission to have violated a
federal or state securities or commodities law, and the judgment has
not been reversed, suspended, or vacated.
SECTION 16(a) BENEFICIAL OWNERSHIP COMPLIANCE REPORTING
Section 16(a) of the Exchange Act requires our executive officers and directors,
and persons who beneficially own more than 10% of our equity securities
(collectively, the "Reporting Persons"), to file reports of ownership and
changes in ownership with the SEC. Reporting Persons are required by SEC
regulation to furnish us with copies of all forms they file pursuant to Section
16(a). As we do not have any securities registered under Section 12 of the
Securities Exchange Act of 1934, none of our Reporting Persons are required to
file reports of ownership and changes in ownership with the SEC.
CODE OF ETHICS
We have not yet adopted a code of ethics that applies to our principal executive
officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions because we have not yet
finalized the content of such a code.
ITEM 11. EXECUTIVE COMPENSATION.
The following table sets forth, as of January 31, 2009, the compensation paid to
our President and Chief Executive Officer and our Chief Financial Officer during
the last two completed fiscal years. No other officers or directors received
annual compensation in excess of $100,000 during the last two completed fiscal
years.
Summary Compensation Table (1)
Name and Principal Position Year Salary ($) Total ($)
- --------------------------- ---- ---------- ---------
Yulia Nesterchuk (2) 2007 0 0
2008 0 0
- ----------
(1) Pursuant to Item 402(a)(5) of Regulation S-K tables and columns have been
omitted where no compensation has been awarded.
(2) Yulia Nesterchuk is our President, Chief Executive Officer, Chief Financial
Officer, Principal Accounting Officer, Secretary, Treasurer.
We have made no grants of stock options or stock appreciation rights from
October 19, 2007 (inception) to January 31, 2009.
28
PENSION, RETIREMENT OR SIMILAR BENEFIT PLANS
There are no arrangements or plans in which we provide pension, retirement or
similar benefits to our directors or executive officers. We have no material
bonus or profit sharing plans pursuant to which cash or non-cash compensation is
or may be paid to our directors or executive officers, except that stock options
may be granted at the discretion of the Board of Directors or a committee
thereof.
COMPENSATION COMMITTEE
We currently do not have a compensation committee of the Board of Directors. The
Board as a whole determines executive compensation.
COMPENSATION OF DIRECTORS
We reimburse our directors for expenses incurred in connection with attending
board meetings but did not pay director's fees or other cash compensation for
services rendered as a director in the year ended January 31, 2009.
We have no standard arrangement pursuant to which our directors are compensated
for their services in their capacity as directors. The Board of Directors may
award special remuneration to any director undertaking any special services on
behalf of our company other than services ordinarily required of a director. No
director received and/or accrued any compensation for services as a director,
including committee participation and/or special assignments.
CHANGE OF CONTROL
As of April 30, 2009 we had no pension plans or compensatory plans or other
arrangements which provide compensation in the event of a termination of
employment or a change in our control.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
We do not currently have a compensation committee of the Board of Directors or a
committee performing similar functions. The Board of Directors as a whole
participates in the consideration of executive officer and director
compensation.
COMPENSATION COMMITTEE REPORT
Our Chief Financial Officer and Chief Executive Officer has reviewed the
Compensation Discussion and Analysis and the requirements pertaining to this
item. She has determined that no disclosure is necessary as we have not adopted
any compensation programs and we have approved that a statement to that effect
be disclosed in this Form 10-K
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The following table sets forth information as of January 31, 2009 regarding the
ownership of our common stock by each shareholder known by us to be the
beneficial owner of more than five per cent of our outstanding shares of common
stock, each director and all executive officers and directors as a group. Except
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as otherwise indicated, each of the shareholders has sole voting and investment
power with respect to the shares of common stock beneficially owned.
Amount and
Title of Name and Address of Nature of Percent
Class Beneficial Owner Beneficial Owner of Class
----- ---------------- ---------------- --------
Common Yulia Nesterchuk 5,000,000 90.77
Zivova Street #26 Suite #8
Ternopil, Ukraine
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
During the year ended January 31, 2009, we had not entered into any transactions
with our sole officer and director, or persons nominated for these positions,
beneficial owners of 5% or more of our common stock, or family members of these
persons wherein the amount involved in the transaction or a series of similar
transactions exceeded the lesser of $120,000 or 1% of the average of our total
assets for the last three fiscal years.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
AUDIT AND NON-AUDIT FEES
The following table sets forth the fees for professional audit services and the
fees billed for other services rendered by our auditors in connection with the
audit of our financial statements for the years ended January 31, 2009 and 2008,
and any other fees billed for services rendered by our auditors during these
periods.
M&K CPAS, PLLC
Period from December 17, 2007 to January 31, 2008
Audit fees $ 3,000
Audit-related fees --
Tax fees --
All other fees --
-------
Total $ 3,000
=======
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M&K CPAS, PLLC
Period from February 1, 2008 to January 31, 2009
Audit fees $ 5,700
Audit-related fees --
Tax fees --
All other fees --
-------
Total $ 5,700
=======
Since our inception, our Board of Directors, performing the duties of the audit
committee, has reviewed all audit and non-audit related fees at least annually.
The Board, acting as the audit committee, pre-approved all audit related
services for the year ended January 31, 2009.
ITEM 15. EXHIBITS.
Exhibit No. Description
- ----------- -----------
31.1 Certification of Chief Executive Officer and Chief Financial
Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act
32.1 Certification of Chief Executive Officer and Chief Financial
Officer pursuant to Section 906 of the Sarbanes-Oxley Act
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
AFFINITY MEDIAWORKS CORP.
Date: May 1, 2009 By: /s/ Yulia Nesterchuk
---------------------------------------------
Yulia Nesterchuk
President, Chief Executive Officer,
Chief Financial Officer, Principal Accounting
Officer, Secretary, Treasurer, Director
Pursuant to the requirements of the Exchange Act, this report has been signed
below by the following persons on behalf of the registrant and in the capacities
and on the dates indicated.
Signatures Title Date
---------- ----- ----
/s/ Yulia Nesterchuk President, Chief Executive Officer, Chief Financial May 1, 2009
- ---------------------------- Officer, Principal Accounting Officer, Secretary,
Yulia Nesterchuk Treasurer, Director
32