UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED OCTOBER 31, 2012
Commission file number 333-179505
PINGIFY INTERNATIONAL INC.
(Exact name of registrant as specified in its charter)
Nevada
(State or other jurisdiction of incorporation or organization)
Suite 2020 (Scotia Place, Tower 1), 10060 Jasper Ave. Edmonton, AB, T5J 1V9
(Address of principal executive offices, including zip code)
(780) 628-6867
(Telephone number, including area code)
Check whether the issuer (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 last 90 days. YES [X] NO [ ]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). YES [X] NO [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer, "accelerated filer,"
"non-accelerated filer," and "smaller reporting company" in Rule 12b-2 of the
Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). YES [ ] NO [X]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 25,100,000 shares as of December 17,
2012
ITEM 1. FINANCIAL STATEMENTS
Pingify International, Inc.
(A Development Stage Company)
BALANCE SHEET
(UNAUDITED)
October 31, 2012 January 31, 2012
---------------- ----------------
ASSETS:
Current assets:
Cash and cash equivalents $ 10,821 $ 25,076
Restricted cash in escrow 46,000 --
-------- --------
Total current assets 56,821 25,076
-------- --------
Total assets $ 56,821 $ 25,076
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable and accrued liabilities $ -- $ 715
Shareholder loans 64,242 --
-------- --------
Total current liabilities 64,242 715
-------- --------
Total liabilities 64,242 715
-------- --------
Stockholders' equity (deficit):
Common stock, $0.001 par value
75,000,000 shares authorized
25,100,000 shares outstanding 25,100 25,100
Common stock payable 46,000 --
Accumulated deficit during the development stage (78,521) (739)
-------- --------
Total stockholders' equity (deficit) (7,421) 24,361
-------- --------
Total liabilities and stockholders' equity (deficit) $ 56,821 $ 25,076
======== ========
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Pingify International, Inc.
(A Development Stage Company)
STATEMENT OF OPERATIONS
(UNAUDITED)
Inception
(January 24, 2012)
Three months ending Nine months ending through
October 31, 2012 October 31, 2012 October 31, 2012
---------------- ---------------- ----------------
EXPENSES:
Research and development $ 10,704 $ 30,638 $ 30,638
Selling, general and administrative expenses 12,741 37,144 37,883
Management fees - related party 3,000 10,000 10,000
------------ ------------ ------------
Total expenses 26,445 77,782 78,521
------------ ------------ ------------
Net loss $ (26,445) $ (77,782) $ (78,521)
============ ============ ============
Basic net loss per common share $ -- $ --
============ ============
Shares used in computing basic net loss
per common share 25,100,000 25,100,000
============ ============
3
Pingify International, Inc.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
(UNAUDITED)
Inception
(January 24, 2012)
Nine months ending through
October 31, 2012 October 31, 2012
---------------- ----------------
Cash flows from operating activities:
Net loss $ (77,782) $ (78,521)
Changes in operating assets and liabilities:
Prepaid expenses and deposits
Accounts payable (715) (0)
---------- ----------
Net cash used by operating activities (78,497) (78,521)
---------- ----------
Cash flows from financing activities:
Proceeds from issuance of common stock -- 25,100
Proceeds from common stock payable 46,000 46,000
Proceeds from shareholder loan 64,242 64,242
---------- ----------
Net cash provided by financing activities 110,242 135,342
---------- ----------
Net change in cash 31,745 56,821
Cash, beginning of period 25,076 --
---------- ----------
Cash, end of period $ 56,821 $ 56,821
========== ==========
Supplemental disclosure of cash flow information:
Interest paid $ -- $ --
========== ==========
Taxes paid $ -- $ --
========== ==========
4
Pingify International, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION AND BASIS OF PRESENTATION
Pingify International, Inc. (the "Company") was incorporated under the laws of
the state of Nevada on January 24, 2012. The Company is a software technology
start-up focused on the development of computer software solutions.
These financial statements do not include all of the information and footnotes
required by accounting principles generally accepted in the United States of
America for complete financial statements, they do however reflect all
adjustments which, in the opinion of management, are necessary for a fair
presentation. These financial statements should be read in conjunction with the
Company's January 31, 2012 audited financial statements and notes thereto
included in its registration statement Form S-1/A-3 filed on April 5, 2012. The
results of operations for the three and nine months period ended October 31,
2012 are not necessarily indicative of the results of operations to be expected
for the full year.
2. GOING CONCERN
During the period from inception (January 24, 2012) to October 31, 2012, the
Company incurred a net loss of $78,521 and used net cash in the amount of
$78,521 for operating activities. For the three months ended October 31, 2012
the Company incurred a net loss of $26,445. The Company is in the development
stage of operations, has not generated any revenues since inception and
anticipates that it will continue to generate losses in the near future. These
conditions raise substantial doubt about the Company's ability to continue as a
going concern.
The Company's continuation as a going concern is dependent upon its ability to
obtain additional financing or sale of its common stock and ultimately to attain
profitability. Management's plan, in this regard, is to raise capital through a
combination of equity and debt financing. Management believes this amount will
be sufficient to finance the continuing development for the next twelve months.
However, there is no assurance that the Company will be successful in raising
such financing. There can be no assurance that sufficient funds required during
the next year or thereafter will be generated from operations or that funds will
be available from external sources such as debt or equity financings or other
potential sources. The lack of additional capital resulting from the inability
to generate cash flow from operations or to raise capital from external sources
would force the Company to substantially curtail or cease operations and would,
therefore, have a material adverse effect on its business. Furthermore, there
can be no assurance that any such required funds, if available, will be
available on attractive terms or that they will not have a significant dilutive
effect on the Company's existing stockholders. The interim financial statements
do not include any adjustments relating to the recoverability and classification
of recorded assets and classification of liabilities that might be necessary
should we be unable to continue in existence.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The financial statements of the Company have been prepared in accordance with
generally accepted accounting principles in the United States of America and are
presented in US dollars.
DEVELOPMENT STAGE COMPANY
The Company's financial statements are presented as those of a development stage
enterprise. Activities during the development stage primarily include
implementation of the business plan and obtaining additional debt and/or equity
related financing.
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USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles in the United States of America requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities as of the date
of the financial statements and the reported amounts of revenue and expenses
during the reporting period. Actual results could differ from those estimates.
FISCAL PERIODS
The Company's fiscal year end is January 31.
FOREIGN CURRENCY TRANSLATION
The Company's functional currency and its reporting currency is the United
States Dollar.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist primarily of cash on deposit, certificates of
deposit, money market accounts, and investment grade commercial paper that are
readily convertible into cash and purchased with original maturities of three
months or less.
RESTRICTED CASH
The Company has received $46,000 as restricted cash in escrow for subscriptions
of shares from the Company's initial public offering, subject to restrictions
pending placement of the entire offering. When the shares are fully subscribed,
the cash in the escrow account will be released from restriction for funding of
operations.
REVENUE RECOGNITION POLICY
The Company will recognize revenue once all of the following criteria for
revenue recognition have been met: persuasive evidence that an agreement exists;
the product or services have been rendered; the fee is fixed and determinable
and not subject to refund or adjustment; and collection of the amount due is
reasonably assured. The Company did not realize any revenues from Inception
(January 24, 2012) through October 31, 2012.
SOFTWARE DEVELOPMENT COSTS
The Company applies the principles of ASC 985, Accounting for the Costs of
Computer Software to be Sold, Leased, or Otherwise Marketed ("ASC 895"). ASC 985
requires that software development costs incurred in conjunction with product
development be charged to research and development expense until technological
feasibility is established. Thereafter, until the product is released for sale,
software development costs must be capitalized and reported at the lower of
unamortized cost or net realizable value of the related product. The Company has
adopted the "tested working model" approach to establishing technological
feasibility for its products. Under this approach, a product in development is
not considered to have passed the technological feasibility milestone until the
Company has produced a model of the product that contains essentially all the
functionality and features of the final product and have tested the model to
ensure that it works as expected. To date, the Company has not incurred
significant costs between the establishment of technological feasibility and the
release of a product; thus all software development costs have been expensed as
incurred.
INCOME TAXES
The Company accounts for its income taxes in accordance with FASB ASC 740, which
requires recognition of deferred tax assets and liabilities for future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and tax credit carry-forwards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
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settled. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in operations in the period that includes the enactment
date.
DIVIDENDS
The payment of dividends by the Company in the future will be at the discretion
of the Board of Directors and will depend on our earnings, capital requirements
and financial condition, as well as other relevant factors. We do not intend to
pay any cash dividends in the foreseeable future but intend to retain all
earnings, if any, for use in our business.
EARNINGS (LOSS) PER SHARE
Basic earnings (loss) per share are computed by dividing net income (loss) by
the weighted average number of shares of common stock outstanding during each
period. Diluted earnings (loss) per share is computed by dividing net income
(loss), adjusted for changes in income or loss that resulted from the assumed
conversion of convertible shares, by the weighted average number of shares of
common stock, common stock equivalents and potentially dilutive securities
outstanding during the period. The computation of basic and diluted loss per
share for the periods presented is equivalent since the Company had continuing
losses. The Company had no common stock equivalents as of October 31, 2012.
RISKS AND UNCERTAINTIES
The Company's operations and future are dependent in a large part on its ability
to develop its business model in a competitive market. The Company intends to
operate in an industry that is subject to intense competition and change in
consumer demand. The Company's operations are subject to significant risk and
uncertainties including financial and operational risks and the potential risk
of business failure. The Company's inability to meet its business plan and
target customer demand may have a material adverse effect on its financial
condition, results of operations and cash flows.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying value of the Company's financial instruments, including cash, due
to shareholders and accounts and other payables approximate their fair values
due to the immediate or short-term maturity of these instruments. It is
management's opinion that the Company is not exposed to significant interest,
price or credit risks arising from these financial instruments.
NEW ACCOUNTING PRONOUNCEMENTS
There are no recent accounting pronouncements that are expected to have an
effect on the Company's unaudited financial statements.
4. STOCKHOLDERS' EQUITY (DEFICIT)
The authorized capital of the Company is 75,000,000 common shares with a par
value of $ 0.001 per share. There were 25,100,000 shares of common stock issued
and outstanding as of October 31, 2012. In January 2012, the Company issued
25,100,000 shares of its $0.001 par value common stock to its founder at $0.001
per share for total cash proceeds of $25,100. The Company is using the proceeds
from the sale of its common stock to cover the expenses of the initial public
offering and for general working capital purposes.
The Company sold 4,800,000 and 4,400,000 shares of its $0.001 par value common
stock for $.005 per share during the quarter ended July 31, 2012 and October 31,
2012, respectively. The proceeds are held in an escrow account and the shares,
recorded as a stock payable, will not be issued until the Company sells
25,000,000 shares.
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5. RELATED PARTY TRANSACTIONS
On April 12, 2012, the officers and directors of the Company orally agreed to
lend funds to the Company in the event funds are required for the operations of
the Company over the next 12 months. From time to time, the majority
shareholder, who is also President of the Company, advances funds to the
Company. As of October 31, 2012, the Company owed this individual $64,242. The
shareholder loan is unsecured, non-interest bearing, and has no specific terms
for repayment.
For the period from inception (January 24, 2012) to October 31, 2012, the
Company paid $10,000 to the President for management fees.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
FORWARD LOOKING STATEMENTS
Some of the statements contained in this Form 10-Q that are not historical facts
are "forward-looking statements" which can be identified by the use of
terminology such as "estimates," "projects," "plans," "believes," "expects,"
"anticipates," "intends," or the negative or other variations, or by discussions
of strategy that involve risks and uncertainties. We urge you to be cautious of
the forward-looking statements, that such statements, which are contained in
this Form 10-Q, reflect our current beliefs with respect to future events and
involve known and unknown risks, uncertainties and other factors affecting our
operations, market growth, services, products and licenses. No assurances can be
given regarding the achievement of future results, as actual results may differ
materially as a result of the risks we face, and actual events may differ from
the assumptions underlying the statements that have been made regarding
anticipated events.
All written forward-looking statements made in connection with this Form 10-Q
that are attributable to us, or persons acting on our behalf, are expressly
qualified in their entirety by these cautionary statements. Given the
uncertainties that surround such statements, you are cautioned not to place
undue reliance on such forward-looking statements.
RESULTS OF OPERATIONS
We are still in our development stage and have generated no revenues to date.
We incurred operating expenses of $78,521 for the period from inception (January
24, 2012) through October 31, 2012. These expenses consisted of general
operating expenses incurred in connection with the day to day operation of our
business and the preparation and filing of a Registration Statement on Form S-1
with the U.S. Securities and Exchange Commission.
Our net loss for the three months ended October 31, 2012 was $26,445 with no
revenues. Our net loss for the nine months ended October 31, 2012 was $77,782
with no revenues. Our net loss from inception (January 24, 2012) through October
31, 2012 was $78,521.
As of October 31, 2012, there is a total of $64,242 in a note payable that is
owed by the Company to an officer and director. The note is interest free and
payable on demand.
Cash provided by financing activities from inception through the period ended
October 31, 2012 was $135,342. This amount is comprised of $25,100 resulting
from the sale of 25,100,000 shares of common stock to Mr. Gray, an officer and
director, for cash at $0.001 per share, the $64,242 note payable that is owed by
the Company to an officer and director, and $46,000 in common stock payable for
9,200,000 shares of common stock at $0.005 per share.
9
LIQUIDITY AND CAPITAL RESOURCES
We had $10,821 in cash at October 31, 2012, $46,000 in restricted cash in escrow
and there were outstanding liabilities of $64,242. Our director has verbally
agreed to continue to loan the company funds for operating expenses in a limited
scenario until we receive funding or have adequate revenue, but he has no legal
obligation to do so. We are a development stage company and have generated no
revenue since inception to October 31, 2012.
PLAN OF OPERATION
At present management will concentrate on the completion of our Offering
pursuant to the Registration Statement on Form S-1 that was declared effective
on April 13, 2012.
Once we have completed our offering, our specific business plan for the twelve
months thereafter is as follows:
Software application updates and changes to accommodate Beyond.com
PINGIFY - BETA 1 (1ST QUARTER AFTER FUNDING)
* This version will include application tie-in to the main server
database
* Implement multi-city search, allowing requests to search in multiple
cities simultaneously
* Improving the look and feel of the application
PINGIFY - BEYOND.COM INTEGRATION (1ST AND 2ND QUARTER AFTER FUNDING)
* Full integration of Beyond.com job searches from the Ping Me! mobile
app to servers that do the data processing
PINGIFY - BETA 2 (1ST AND 2ND QUARTER AFTER FUNDING)
* Improve user experience based upon feedback
PINGIFY ITUNES CONNECT SUPPORT SITE (3RD QUARTER AFTER FUNDING)
* Redesign of app support page
* Improve customer support and communications/updates to the customer
PINGIFY VERSION 2 APP SUBMISSION (3RD AND 4TH QUARTER AFTER FUNDING)
* Submit improved and finalized version to iTunes
* Ideal release will have Multi-city search, Beyond.com integration,
Facebook and Twitter integration
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BEGIN MARKETING AND SALES EFFORTS
TWO STAGE STRATEGY
With the release of the PING ME! application, Pingify will build a database of
consumer product demands. Once the database is built, we expect to be able to
integrate with web sites and marketing companies to provide them the network to
access these consumers directly with focused marketing campaigns.
STAGE 1 - DEVELOPING AN ONLINE USER BASE
As of March 8, 2012 the PING ME! application became available in the iTunes
store in both Canada and the US. This version focuses solely on Craigslist, the
world's largest free bulletin board website. Our plan is to:
* Support the application with an online marketing campaign through
articles, blogs and social marketing as well as a launch of a Facebook
embedded application and "free" version of the iPhone application
* Add additional Agents, (e.g. Beyond.com, Auto Trader, Kijiji) to PING
ME!
* Improve the functionality of the application based on user replies and
responses
* Optimize the back-end servers.
STAGE 2 - DIRECT INTEGRATION WITH VENDORS
ONGOING SERVICE FEES
Once implemented, there will be 3 specific ongoing revenue streams associated
with the BRANDED PINGS PRODUCT:
1) Pings (or Impressions)
2) Clicks (actual reads of the data)
3) Purchases
PINGS
A Ping is considered a delivered advertisement to the end user and will be
treated similar to an impression as charged by various online marketing services
(ie AdSense, AdMob, etc). A Ping will be a highly targeted impression that has
been specifically requested by the user. For the initial stages of this project,
we intend to keep impression costs close to industry standards which are $.008
per impression cost.
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CLICKS
Clicks are considered valid when the user is sent back to the client's network
and where the Ping is read, but not acted on. The marketplace values the cost
per click at $0.08.
PURCHASES
The ultimate goal is to get the user to purchase an item. If the user purchases
an item due the click-through on the Ping Me! system, then Pingify would charge
the Vendor a fee of approximately 1% of the purchase value.
Based on raising $125,000 from our offering, we have budgeted the following
amounts over the 12 months following the successful completion of this offering:
Proceeds to Us: $125,000
Accounting $ 8,000
Legal $ 4,800
Advertising/Marketing $ 12,000
SEC Fliling related Costs $ 3,500
Insurance $ 2,000
Server Cloud / Collocation $ 16,000
Office Supplies $ 500
Travel $ 2,000
Rent $ 950
Telephone/Fax $ 200
Development / Wages $ 48,000
Consultants $ 12,000
Management Fees $ 12,000
Dues/Subs/Licences $ 2,000
Working Capital $ 1,050
These amounts may be adjusted based upon sales and revenue.
SUMMARY
In summary, we will begin putting together a database of potential customers as
well as the continuation of the development of the software and services for the
purpose of the integration of customers into the Pingify service. We anticipate
lead-generation revenues within three months of the completion of the financing
supplied by this offering and as of March 8, 2012, the application became
available in the iTunes store. Until we have reached a critical level of Pings
we do not believe our operations will be profitable. If we are unable to attract
enough users to download our app, we may have to suspend or cease operations. If
we are unable to attract enough lead-generation vendors, we may have to cease
operations. If we cannot generate sufficient revenues to continue operations, we
12
will suspend or cease operations. If we cease operations, we do not know what we
will do and we do not have any plans to do anything else.
If the shares are not fully sold, the financing is not closed and raised funds
are returned to investors, the company's implementation of the business plan
would be materially affected. We would be forced to drastically reduce expenses
by cutting programmers, sales & marketing experts and website developers who are
currently working on an outside contractor basis using currently available
funds, until other funding could be secured. Assuming no other funding is
secured, it is highly unlikely that the Pingify application will be able to be
completed for Beyond.com, thus limiting a large portion of our expected revenue.
OFF-BALANCE SHEET ARRANGEMENTS
We do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that is material to investors.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
This item is not applicable as we are currently considered a smaller reporting
company.
ITEM 4. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Management maintains "disclosure controls and procedures," as such term is
defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the
"Exchange Act"), that are designed to ensure that information required to be
disclosed in our Exchange Act reports is recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commission rules and forms, and that such information is accumulated and
communicated to management, including our Chief Executive Officer and Chief
Financial Officer, as appropriate, to allow timely decisions regarding required
disclosure.
In connection with the preparation of this quarterly report on Form 10-Q, an
evaluation was carried out by management, with the participation of the Chief
Executive Officer and the Chief Financial Officer, of the effectiveness of our
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
under the Exchange Act) as of October 31, 2012.
Based on that evaluation, management concluded, as of the end of the period
covered by this report, that our disclosure controls and procedures were
effective in recording, processing, summarizing, and reporting information
required to be disclosed, within the time periods specified in the Securities
and Exchange Commission's rules and forms.
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CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING
As of the end of the period covered by this report, there have been no changes
in the internal controls over financial reporting during the quarter ended
October 31, 2012, that materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting subsequent to
the date of management's last evaluation.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS ON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
The following exhibits are included with this quarterly filing. Those marked
with an asterisk and required to be filed hereunder, are incorporated by
reference and can be found in their entirety in our original Registration
Statement on Form S-1, filed under SEC File Number 333-179505, at the SEC
website at www.sec.gov:
Exhibit No. Description
----------- -----------
3.1 Articles of Incorporation*
3.2 Bylaws*
31.1 Sec. 302 Certification of Principal Executive Officer
31.2 Sec. 302 Certification of Principal Financial Officer
32.1 Sec. 906 Certification of Principal Executive Officer
32.2 Sec. 906 Certification of Principal Financial Officer
101 Interactive data files pursuant to Rule 405 of Regulation S-T
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Pingify International Inc.
Registrant
Date: December 17, 2012 By: /s/ Jason Gray
------------------------------------
Jason Gray, President, Secretary,
Chief Executive Officer and Director
By: /s/ Vlad Milutin
------------------------------------
Vlad Milutin, Treasurer,
Chief Financial Officer and
Principal Accounting Officer and
Director
15