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 August 31, 2009
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 000-53448
EASY CD YEARBOOK, INC.
(Exact name of registrant as specified in its charter)
Nevada 98-0507524
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Suite 112 - 5348 Vegas Dr., Las Vegas, NV USA 89108
(Address of principal executive offices) (Zip Code)
Telephone: +1 (702) 441-0703
(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 (l) 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 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 [ ] No [X]
There were 7,635,700 shares of common stock, $0.0001 par value per share,
outstanding on October 14, 2009.
EASY CD YEARBOOK, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE PERIOD ENDING AUGUST 31, 2009
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Item 1: Financial Statements (unaudited)................................... 3
Balance Sheets......................................................... 3
Statements of Operations.............................................. 4
Statements of Stockholders' Equity.................................... 5
Statements of Cash Flows.............................................. 6
Notes to Financial Statements......................................... 7
Item 2: Management's Discussion and Analysis Or Plan of Operation.......... 8
Item 3: Quantitative and Qualitative Disclosures about Market Risk......... 9
Item 4: Controls and Procedures............................................ 9
PART II - OTHER INFORMATION
Item 1: Legal Proceedings.................................................. 11
Item 1A: Risk Factors...................................................... 11
Item 2: Unregistered Sales of Equity Securities and Use of Proceeds........ 11
Item 3: Defaults Upon Senior Securities.................................... 11
Item 4: Submission of Matters to a Vote of Security Holders................ 11
Item 5: Other Information.................................................. 11
Item 6: Exhibits........................................................... 11
Signatures................................................................. 12
References in this Form 10-Q to "we", "us", "our", the "Company" and "Easy CD"
refers to Easy CD Yearbook, Inc. unless otherwise noted.
2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
EASY CD YEARBOOK, INC.
(A Development Stage Company)
BALANCE SHEETS
August 31, May 31,
2009 2009
-------- --------
(unauditied) (audited)
ASSETS
Current Assets
Cash $ 904 $ 7,925
-------- --------
Total Current Assets $ 904 $ 7,925
======== ========
Fixed Assets
Website, net of accumulated amortization (Note 9.) $ 6,548 $ 7,300
-------- --------
Total Assets $ 7,452 $ 15,225
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses $ 152 $ 2,750
-------- --------
Total Current Liabilities 152 2,750
-------- --------
Total Liabilities 152 2,750
-------- --------
Stockholders' Equity
Preferred Stock, authorized 50,000,000 shares, par value $0.0001
Preferred Stock, issued and outstanding is 0
Common Stock, authorized 100,000,000 shares, par value $0.0001
Issued and outstanding on August 31, 2009 is 7,635,700 764 764
Additional Paid in Capital 61,849 61,849
Deficit Accumulated During the Development Stage (55,314) (50,138)
-------- --------
Total Stockholders' Equity 7,299 12,475
-------- --------
Total Liabilities and Stockholders' Equity $ 7,452 $ 15,225
======== ========
The accompanying notes are an integral part of these financial statements
3
EASY CD YEARBOOK, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED AGUST 31, 2009 AND 2008,
AND CUMULATIVE FROM INCEPTION (JUNE 27, 2006)
THROUGH AUGUST 31, 2009
(unaudited)
June 27, 2006
Three Months Ended (Inception) To
August 31, August 31,
2009 2008 2009
---------- ---------- ----------
Revenue $ -- $ -- $ --
Expenses
Website Development -- -- 2,750
Depreciation and amortization 753 120 2,478
Organzation Cost -- -- 187
General and Administrative 406 700 3,636
Filing Fees 517 1,002 3,863
Professional Fees 3,500 25,937 42,400
---------- ---------- ----------
Loss before income taxes 5,176 27,759 55,314
Provision for Income Taxes -- -- --
---------- ---------- ----------
Net (Loss) $ (5,176) $ (27,759 $ (55,314)
========== ========== ==========
Basic and Diluted (Loss) per
Common Shares a a
---------- ----------
Weighted Average Number of Common Shares 7,635,700 6,131,552
---------- ----------
- ----------
a = Less than ($0.01) per share
The accompanying notes are an integral part of these financial statements.
4
EASY CD YEARBOOK, INC.
(A Development Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM INCEPTION (JUNE 27, 2006)
THROUGH AUGUST 31, 2009
(unaudited)
Deficit
Accumulated
Common Stock During the
------------------ Paid in Development Total
Shares Amount Capital Stage Equity
------ ------ ------- ------- ------
# $ $ $ $
INCEPTION JUNE 27, 2006
Common stock issued to Directors 5,500,000 550 4,931 5,481
for cash June 27, 2006 @$0.001 --
per share
Net loss for the period from Inception
(June 27, 2006) to May 31, 2007 (1,664) (1,664)
---------- ------ ------- -------- --------
BALANCE MAY 31, 2007 5,500,000 550 4,931 (1,664) 3,817
Common stock issued for cash on
March 31, 2008 @ $0.025 per share
(par value $0.0001) 1,886,400 189 46,971 47,160
Net loss for the year ended May 31, 2008 (3,031) (3,031)
---------- ------ ------- -------- --------
BALANCE MAY 31, 2008 7,386,400 739 51,902 (4,695) 47,946
Common stock issued for cash on
May 22, 2009 @ $0.04 per share
(par value $0.0001) 249,300 25 9,947 9,972
Net loss for the year ended May 31, 2009 (45,443) (45,443)
---------- ------ ------- -------- --------
BALANCE MAY 31, 2009 7,635,700 764 61,849 (50,138) 12,475
Net loss for the period (5,176) (5,176)
---------- ------ ------- -------- --------
BALANCE AUGUST 31, 2009 7,635,700 764 61,849 (55,314) 7,299
========== ====== ======= ======== ========
The accompanying notes are an integral part of these financial statements.
5
EASY CD YEARBOOK, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED AUGUST 31, 2009 AND 2008
AND CUMULATIVE FROM INCEPTION (JUNE 27, 2006)
THROUGH AUGUST 31, 2009
(unaudited)
June 27, 2006
(Inception) To
August 31, August 31,
2009 2008 2009
-------- -------- --------
OPERATING ACTIVITIES
Net (Loss) $ (5,176) $(27,759) $(55,314)
Adjustments to Reconcile Net Loss to
Net Cash Used by Operating Activities
Depreciation and amortization expense 753 120 2,478
Accrued Liability (2,750) -- --
Accounts Payable 152 -- 152
-------- -------- --------
Net Cash (Used) by Operating Activities (7,021 (27,639 (52,683)
-------- -------- --------
INVESTING ACTIVITIES
Video Production -- -- (4,500)
Web site Construction -- (500 (4,526)
-------- -------- --------
Net cash used by investing activities -- (500 (9,026)
-------- -------- --------
FINANCING ACTIVITIES
Proceeds from issuance of common stock -- -- 57,132
-------- -------- --------
Cash Provided by Financing Activities -- -- 57,132
-------- -------- --------
Net Increase in Cash (7,021) (28,139) (4,577)
Cash, Beginning of Period 7,925 46,705 5,481
-------- -------- --------
Cash, End of Period $ 904 $ 18,566 $ 904
======== ======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ -- $ -- $ --
======== ======== ========
Income Taxes $ -- $ -- $ --
======== ======== ========
The accompanying notes are an integral part of these financial statements.
6
EASY CD YEARBOOK, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2009
NOTE 1 - CONDENSED FINANCIAL STATEMENTS
The accompanying financial statements have been prepared by the Company without
audit. In the opinion of management, all adjustments (which include only normal
recurring adjustments) necessary to present fairly the financial position,
results of operations, and cash flows at August 31, 2009 and for all periods
presented herein, have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States of America have been condensed or omitted. It is suggested
that these condensed financial statements be read in conjunction with the
financial statements and notes thereto included in the Company's May 31, 2009
audited financial statements. The results of operations for the periods ended
August 31, 2009 and 2008 are not necessarily indicative of the operating results
for the full years.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles in the United States of America applicable to a going
concern which contemplates the realization of assets and liquidation of
liabilities in the normal course of business. The Company has not yet
established an ongoing source of revenues sufficient to cover its operating
costs and allow it to continue as a going concern. The ability of the Company to
continue as a going concern is dependent on the Company obtaining adequate
capital to fund operating losses until it becomes profitable. If the Company is
unable to obtain adequate capital, it could be forced to cease operations.
In order to continue as a going concern, the Company will need, among other
things, additional capital resources. Management's plan is to obtain such
resources for the Company by obtaining capital from management and significant
shareholders sufficient to meet its minimal operating expenses and seeking
equity and/or debt financing. However management cannot provide any assurances
that the Company will be successful in accomplishing any of its plans.
The ability of the Company to continue as a going concern is dependent upon its
ability to successfully accomplish the plans described in the preceding
paragraph and eventually secure other sources of financing and attain profitable
operations. The accompanying financial statements do not include any adjustments
that might be necessary if the Company is unable to continue as a going concern.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
We were incorporated in the state of Nevada on June 27, 2006. Our offices are
currently located at 5348 Vegas Dr., Suite 112, Las Vegas, NV 89108 USA. Our
telephone number is (702) 441-0703. We have a website at
http://www.easycdyearbook.com. The information contained in our website does not
form part of this Quarterly Report in any way. Our common stock is quoted on the
OTC Bulletin Board under the symbol "EZCD".
Since incorporation, we have not made any significant purchases or sale of
assets, nor have we been involved in any mergers, acquisitions or
consolidations. Easy CD has never declared bankruptcy, has never been in
receivership, and has never been involved in any legal action or proceedings.
We have completed the development of our product and it is ready for sale. We
purchased a hosting account and SSL certificate from Host Gator to host our
website. We have entered into an agreement with third party firm to develop the
site framework that will be implemented in our website. Total cost for the web
development is $5,500 of which we paid in full. On July 7, 2009 the third party
contractor finished developing our website and it is ready for commercial use
and now available at www.easycdyearbook.com.
Our vision is to offer schools and clubs an electronic yearbook as an
alternative to their traditional printed yearbook. Our target market is K-12
schools in North America.
PLAN OF OPERATION
The following discussion of the plan of operation, financial condition, results
of operations, cash flows and changes in financial position of our Company
should be read in conjunction with our most recent financial statements and
notes appearing elsewhere in this Form 10-Q; and our registration statement on
Form S-1/A (File no. 333-151931), which was declared effective on September 30,
2008.
We are a development stage company with very limited operations to date, no
revenue, very limited financial backing and few assets. We have established the
following goals over the next 12 months:
* drive traffic to our website through marketing efforts, where
customers will be able to purchase our product;
* collect information and create customer lists from our website and
email campaigns;
* generate revenue by October of 2009 through the sale of our product;
and
* achieve break-even results of operations.
During the first stages of our company's growth, our officers and directors will
be responsible for executing the business plan at no charge. Since we intend to
operate with very limited administrative support, the officers and directors
will continue to be responsible for administering the company for at least the
first year of operations. Management has no intention at this time to hire
additional employees during the first year of operations. Due to limited
financial resources, each of the management team will dedicate approximately 20
hours per week, to ensure all operations are executed.
RESULTS OF OPERATIONS
Our company posted losses of $5,176 for the three months ended August 31, 2009,
compared to $27,759 for the three months ended August 31, 2008. The principal
components of the losses for the three months ended August 31, 2009 and 2008
were general and administrative expenses of $406 and $700, depreciation and
amortization of $753 and $120, filing fees of $517 and $1,002, professional fees
of $3,500 and $25,937, respectively.
From inception to August 31, 2009 we have incurred losses of $55,314.
Since inception, we have sold 7,635,700 shares of common stock to our
stockholders.
8
LIQUIDITY AND CAPITAL RESOURCES
To date, we have had negative cash flows from operations and we have been
dependent on sales of our equity securities to meet our cash requirements. We
expect this continue for the foreseeable future. At August 31, 2009, we had
working capital of $904 compared to $7,925 at August 31, 2008. We opened the
first quarter of 2009 with approximately $7,925 in cash. As of the date hereof,
we have approximately $904.
Because we have not generated any revenue from our business, and currently have
a budgeted shortfall of approximately $50,000, we will need to raise
significant, additional funds for the future development of our business and to
respond to unanticipated requirements or expenses. Our current cash balances
will be extinguished within the next quarter provided we do not have any
unanticipated expenses. Our ability to successfully develop our product and to
eventually produce and sell it to generate operating revenues also depends on
our ability to obtain the necessary financing to implement our business plan.
Given that we have no operating history, no revenues and only losses to date, we
may not be able to achieve this goal, and if this occurs we will not be able to
pay our development and marketing costs and we may go out of business. We may
need to issue additional equity securities in the future to raise the necessary
funds. We do not currently have any arrangements for additional financing and we
can provide no assurance to investors we will be able to find such financing if
further funding is required. Obtaining additional financing would be subject to
a number of factors, including investor acceptance of our planned video program
and our business model. The issuance of additional equity securities by us would
result in a significant dilution in the equity interests of our current
stockholders. The resale of shares by our existing shareholders pursuant to this
prospectus may result in significant downward pressure on the price of our
common stock and cause negative impact on our ability to sell additional equity
securities. Obtaining loans will increase our liabilities and future cash
commitments, and there can be no assurance that we will even have sufficient
funds to repay our future indebtedness or that we will not default on our future
debts if we were able to even obtain loans.
There can be no assurance that capital will continue to be available if
necessary to meet future funding needs or, if the capital is available, that it
will be on terms acceptable to us. If we are unable to obtain financing in the
amounts and on terms deemed acceptable to us, we may be forced to scale back or
cease operations, which might result in the loss of some or all of your
investment in our common stock.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
This Item is not applicable to the Company.
ITEM 4. CONTROLS AND PROCEDURES
As required by Rule 13a-15/15d-15 under the Securities and Exchange Act of 1934,
as amended (the "Exchange Act"), as of August 31, 2009, we have carried out an
evaluation of the effectiveness of the design and operation of our Company's
disclosure controls and procedures. This evaluation was carried out under the
supervision and with the participation of our Company's management, our
President (Principal Executive Officer) and Treasurer (Principal Accounting
Officer). Based upon the results of that evaluation, our management has
concluded that, as of August 31, 2009, our Company's disclosure controls and
procedures were effective and provide reasonable assurance that material
information related to our Company required to be disclosed in the reports that
we file or submit under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the SEC's rules and forms, and
that such information is accumulated and communicated to management to allow
timely decisions on required disclosure.
There were no changes in our internal control over financial reporting
identified in connection with the evaluation described above during the period
covered by this report that has materially affected or is reasonably likely to
materially affect our internal controls over financial reporting.
MANAGEMENT'S REPORT ON INTERNAL CONTROLS OVER FINANCIAL REPORTING
Management is responsible for establishing and maintaining adequate internal
control over our financial reporting. Our system of internal control over
financial reporting is designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with the U.S. GAAP.
9
Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Also, 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.
INHERENT LIMITATIONS OF INTERNAL CONTROLS
Our internal control over financial reporting is designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with the U.S. GAAP.
Our internal control over financial reporting 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 our
assets;
* provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance
with the U.S. GAAP, and that our receipts and expenditures are being
made only in accordance with authorizations of our management and
directors; and
* provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use, or disposition of our assets that
could have a material effect on the financial statements.
Management does not expect that our internal controls will prevent or detect all
errors and all fraud. A control system, no matter how well designed and
operated, can provide only reasonable, not absolute, assurance that the
objectives of the control system are met. Further, the design of a control
system must reflect the fact that there are resource constraints, and the
benefits of controls must be considered relative to their costs. Because of the
inherent limitations in all control systems, no evaluation of internal controls
can provide absolute assurance that all control issues and instances of fraud,
if any, have been detected. Also, any evaluation of the effectiveness of
controls in future periods are subject to the risk that those internal controls
may become inadequate because of changes in business conditions, or that the
degree of compliance with the policies or procedures may deteriorate.
10
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 1A. RISK FACTORS
Not applicable.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
On September 30, 2008 the SEC declared our registration statement on Form S-1
effective, which registered 1,886,400 common shares for resale held by 37
non-affiliated investors.
ITEM 6. EXHIBITS
(a) Pursuant to Rule 601 of Regulation SK, the following exhibits are included
herein or incorporated by reference.
Exhibit
Number Description
- ------ -----------
3.1 Certificate of Incorporation of the Company incorporated herein from
Exhibit 3.1 of our Registration Statement on Form S-1, filed on June
25th 2008, file number 333-151931
3.2 Bylaws of Company incorporated herein from Exhibit 3.2 of our
Registration Statement on Form S-1, filed on June 25th 2008, file
number 333-151931
31.1 Certification of CEO Pursuant to 18 U.S.C. ss. 1350, Section 302
31.2 Certification of CFO Pursuant to 18 U.S.C. ss. 1350, Section 302
32.1 Certification Pursuant to 18 U.S.C. ss.1350, Section 906
32.2 Certification Pursuant to 18 U.S.C. ss. 1350, Section 906
11
SIGNATURES
In accordance with the Exchange Act, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
EASY CD YEARBOOK, INC.
Date: October 14, 2009 By /s/ Almaymoon Mawji
--------------------------------------
Almaymoon Mawji,
President, Treasurer and Director
(Principal Executive and Principal
Financial and Accounting Officer)
12