Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended September 30, 2009
[ ] Transition Report pursuant to 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period __________ to __________
Commission File Number: 333-152535
Buyonate, Inc.
(Exact name of small business issuer as specified in its charter)
Nevada 98-0550385
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
# 803-5348 Vegas Drive
Las Vegas, NV 89108
(Address of principal executive offices)
1-702-939-6505
(Issuer's telephone number)
2620 Regatta Dr., Suite 102, Las Vegas, NV 89128
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) 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 issuer was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days [ ] Yes [X] No
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of
this Chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). Yes ? 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.
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). [X] Yes [ ] No
State the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date: 4,810,000 common shares as of November
13, 2009.
TABLE OF CONTENTS
Page
----
PART I - FINANCIAL INFORMATION
Item 1: Financial Statements 3
Item 2: Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
Item 3: Quantitative and Qualitative Disclosures About Market Risk 11
Item 4T: Controls and Procedures 11
PART II - OTHER INFORMATION
Item 1: Legal Proceedings 12
Item 1A: Risk Factors 12
Item 2: Unregistered Sales of Equity Securities and Use of Proceeds 12
Item 3: Defaults Upon Senior Securities 12
Item 4: Submission of Matters to a Vote of Security Holders 12
Item 5: Other Information 12
Item 6: Exhibits 12
2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL
BUYONATE, INC.
(A Development Stage Company)
Balance Sheets
September 30, December 31,
2009 2008
-------- --------
(unaudited) (unaudited)
ASSETS
CURRENT ASSETS
Cash $ 307 $ 13
-------- --------
Total Current Assets 307 13
-------- --------
TOTAL ASSETS $ 307 $ 13
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 2,250 $ --
Accounts payable - related party 3,250 --
-------- --------
Total Current Liabilities 5,500 --
-------- --------
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, 50,000,000 shares authorized at par value
of $0.0001, no shares issued and outstanding -- --
Common stock, 100,000,000 shares authorized at par value
of $0.0001, 4,810,000 shares issued and outstanding 481 481
Additional paid-in capital 40,419 40,419
Deficit accumulated during the development stage (46,093) (40,887)
-------- --------
Total Stockholders' Equity (Deficit) (5,193) 13
-------- --------
TOTAL LIABILITIES AND AND STOCKHOLDERS' EQUITY (DEFICIT) $ 307 $ 13
======== ========
The accompanying notes are an integral part of these financial statements.
3
BUYONATE, INC.
(A Development Stage Company)
Statements of Operations
(Unaudited)
From Inception
on July 9, 2007
For the Three Months Ended For the Nine Months Ended through
September 30, September 30, September 30,
2009 2008 2009 2008 2009
----------- ----------- ----------- ----------- -----------
REVENUES $ 499 $ -- $ 1,958 $ -- $ 1,958
OPERATING EXPENSES
General and administrative 1,250 3,889 1,664 8,257 26,272
Professional fees 1,000 7,120 5,500 9,620 21,779
----------- ----------- ----------- ----------- -----------
Total Operating Expenses 2,250 11,009 7,164 17,877 48,051
----------- ----------- ----------- ----------- -----------
LOSS FROM OPERATIONS (1,751) (11,009) (5,206) (17,877) (46,093)
OTHER EXPENSES
Interest expense -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Total Other Expenses -- -- -- -- --
----------- ----------- ----------- ----------- -----------
LOSS BEFORE INCOME TAXES (1,751) (11,009) (5,206) (17,877) (46,093)
INCOME TAX EXPENSE -- -- -- -- --
----------- ----------- ----------- ----------- -----------
NET LOSS $ (1,751) $ (11,009) $ (5,206) $ (17,877) $ (46,093)
=========== =========== =========== =========== ===========
BASIC and DILUTED LOSS PER SHARE $ (0.00) $ (0.00) $ (0.00) $ (0.00)
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING -
BASIC and DILUTED 4,810,000 4,810,000 4,810,000 4,810,000
The accompanying notes are an integral part of these financial statements
4
BUYONATE, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
(Unaudited)
Deficit
Accumulated Total
Common Stock Additional Stock During the Stockholders'
------------------- Paid-In Subscription Development Equity
Shares Amount Capital Receivable Stage (Deficit)
------ ------ ------- ---------- ----- ---------
Balance, July 9, 2007 -- $ -- $ -- $ -- $ -- $ --
Common stock issued for cash
at $0.0001 per share 4,000,000 400 -- -- -- 400
Common stock issued for cash
at $0.05 per share 810,000 81 40,419 (23,900) -- 16,600
Net loss from inception
through December 31, 2007 -- -- -- -- -- --
--------- ----- -------- -------- --------- --------
Balance, December 31, 2007 4,810,000 481 40,419 (23,900) -- 17,000
Stock subscriptions received -- -- -- 23,900 -- 23,900
Net loss for the year
ended December 31, 2008 -- -- -- -- (40,887) (40,887)
--------- ----- -------- -------- --------- --------
Balance, December 31, 2008 4,810,000 481 40,419 -- (40,887) 13
Net loss for the nine months
ended September 30, 2009 -- -- -- -- (5,206) (5,206)
--------- ----- -------- -------- --------- --------
Balance, September 30, 2009 4,810,000 $ 481 $ 40,419 $ -- $ (46,093) $ (5,193)
========= ===== ======== ======== ========= ========
The accompanying notes are an integral part of these financial statements.
5
BUYONATE, INC.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
From Inception
on July 9, 2007
For the Nine Months Ended through
September 30, September 30,
2009 2008 2009
-------- -------- --------
OPERATING ACTIVITIES
Net loss $ (5,206) $(17,877) $(46,093)
Adjustments to Reconcile Net Loss to Net
Cash Used by Operating Activities:
Increase in accounts payable 2,250 -- 2,250
-------- -------- --------
Net Cash (Used in) Operating Activities (2,956) (17,877) (43,843)
INVESTING ACTIVITIES -- -- --
-------- -------- --------
FINANCING ACTIVITIES
Increase in related party payable 3,250 -- 3,250
Common stock issued for cash/subscription
receivable -- 23,900 40,900
-------- -------- --------
Net Cash Provided by Financing Activities 3,250 23,900 44,150
NET INCREASE IN CASH 294 6,023 307
CASH AT BEGINNING OF PERIOD 13 17,000 --
-------- -------- --------
CASH AT END OF PERIOD $ 307 $ 23,023 $ 307
======== ======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
CASH PAID FOR:
Interest $ -- $ -- $ --
Income Taxes $ -- $ -- $ --
The accompanying notes are an integral part of these financial statements.
6
BUYONATE, INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
September 30, 2009 and December 31, 2008
NOTE 1 - BASIS OF PRESENTATION
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 September 30, 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 December 31,
2008 audited financial statements. The results of operations for the periods
ended September 30, 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. These factors raise
substantial doubt about the Company's ability 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.
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation of 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.
7
BUYONATE, INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
September 30, 2009 and December 31, 2008
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Recent Accounting Pronouncements
In May 2009, the FASB issued SFAS 165 (ASC 855-10) entitled "Subsequent Events".
Companies are now required to disclose the date through which subsequent events
have been evaluated by management. Public entities (as defined) must conduct the
evaluation as of the date the financial statements are issued, and provide
disclosure that such date was used for this evaluation. SFAS 165 (ASC 855-10)
provides that financial statements are considered "issued" when they are widely
distributed for general use and reliance in a form and format that complies with
GAAP. SFAS 165 (ASC 855-10) is effective for interim and annual periods ending
after June 15, 2009 and must be applied prospectively. The adoption of SFAS 165
(ASC 855-10) during the quarter ended September 30, 2009 did not have a
significant effect on the Company's financial statements as of that date or for
the quarter or year-to-date period then ended. In connection with preparing the
accompanying unaudited financial statements as of September 30, 2009 and for the
quarter and nine month period ended September 30, 2009, management evaluated
subsequent events through the date that such financial statements were issued
(filed with the SEC).
In June 2009, the FASB issued SFAS 168, The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles.
("SFAS 168" pr ASC 105-10) SFAS 168 (ASC 105-10) establishes the Codification as
the sole source of authoritative accounting principles recognized by the FASB to
be applied by all nongovernmental entities in the preparation of financial
statements in conformity with GAAP. SFAS 168 (ASC 105-10) was prospectively
effective for financial statements issued for fiscal years ending on or after
September 15, 2009 nd interim periods within those fiscal years. The adoption of
SFAS 168 (ASC 105-10) on July 1, 2009 did not impact the Company's results of
operations or financial condition. The Codification did not change GAAP,
however, it did change the way GAAP is organized and presented. As a result,
these changes impact how companies reference GAAP in their financial statements
and in their significant accounting policies. The Company implemented the
Codification in this Report by providing references to the Codification topics
alongside references to the corresponding standards.
With the exception of the pronouncements noted above, no other accounting
standards or interpretations issued or recently adopted are expected to have a
material impact on the Company's financial position, operations or cash flows.
NOTE 4 - RELATED PARTY TRANSACTIONS
During the nine months ended September 30, 2009, shareholders of the Company
paid $3,250 of its operating expenses. The amounts paid are carried as a related
party payable in the Company's financial statements.
8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
FORWARD-LOOKING STATEMENTS
Certain statements, other than purely historical information, including
estimates, projections, statements relating to our business plans, objectives,
and expected operating results, and the assumptions upon which those statements
are based, are "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934. These
forward-looking statements generally are identified by the words "believes,"
"project," "expects," "anticipates," "estimates," "intends," "strategy," "plan,"
"may," "will," "would," "will be," "will continue," "will likely result," and
similar expressions. We intend such forward-looking statements to be covered by
the safe-harbor provisions for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995, and are including this
statement for purposes of complying with those safe-harbor provisions.
Forward-looking statements are based on current expectations and assumptions
that are subject to risks and uncertainties which may cause actual results to
differ materially from the forward-looking statements. Our ability to predict
results or the actual effect of future plans or strategies is inherently
uncertain. Factors which could have a material adverse affect on our operations
and future prospects on a consolidated basis include, but are not limited to:
changes in economic conditions, legislative/regulatory changes, availability of
capital, interest rates, competition, and generally accepted accounting
principles. These risks and uncertainties should also be considered in
evaluating forward-looking statements and undue reliance should not be placed on
such statements. We undertake no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise. Further information concerning our business, including
additional factors that could materially affect our financial results, is
included herein and in our other filings with the SEC.
OVERVIEW
We are in the business of selling user-friendly software that creates
interactive digital yearbooks for schools. The software allows schools and clubs
to create and burn their own interactive digital yearbooks on CD/DVD. Our
software makes it simple to upload digital photos, videos, and music to the
schools digital yearbook. The software is easy to use and enables both teachers
and students to quickly turn their memories into easy to share CD and DVD's.
These digital yearbooks are based on their school's events, classes, friends and
activities. Our target market is primarily elementary schools, high schools and
clubs.
Our offices are currently located at: # 803-5348 Vegas Drive, Las Vegas, NV
89108. Our telephone number is 1-702-939-6505.
RESULTS OF OPERATIONS - THREE MONTHS ENDED SEPTEMBER 30, 2009 COMPARED TO THE
THREE MONTHS ENDED SEPTEMBER 30, 2008 AND PERIOD FROM JULY 9, 2007 (INCEPTION)
THROUGH SEPTEMBER 30, 2009
We generated $499 in revenue for the three months ended September 30, 2009
compare to $0 for the three months ended September 30, 2008. We generated $1,958
in revenue for the period from July 9, 2007 (Date of Inception) until September
30, 2009.
Our operating expenses were $2,250 for the three months ended September 30, 2009
compared to $11,009 for the three months ended September 30, 2008. Our operating
expenses for the three months ended September 30, 2009 consisted of $1,250 in
general and administrative expenses and $1,000 in professional fees. Our
operating expenses for the three months ended September 30, 2008 consisted of
$3,889 in general and administrative expenses and $7,120 in professional fees.
Our operating expenses for the period from July 9, 2007 until September 30, 2009
consisted of $26,272 in general and administrative expenses and $21,779 in
professional fees.
We anticipate our operating expenses will increase as we implement our business
plan. The increase will be attributable to expenses to implement our business
plan, the professional fees to be incurred in connection with our becoming a
reporting company under the Securities Exchange Act of 1934.
9
LIQUIDITY AND CAPITAL RESOURCES
We have raised $400 from the sale of stock to our officer and directors and
$40,500 through a private placement to 36 non-affiliated investors. As of
September 30, 2009, we had a working deficit of approximately $5,193.
In the opinion of our management, funds currently available will not satisfy our
working capital requirements for the next twelve months. Estimated funding
required during the twelve month period is $48,000. Given our current cash
position of $307 we will experience a shortfall in the next twelve months.
How long Buyonate, Inc will be able to satisfy its cash requirements depends on
how quickly our company can generate revenue and how much revenue can be
generated. We estimate that our current cash balances will be extinguished by
December 2009 provided we do not have any unanticipated expenses.
We will require additional funds to implement our plans. These funds may be
raised through equity financing, debt financing, or other sources, which may
result in the dilution in the equity ownership of our shares. We will also need
more funds if the costs of the development of our website costs greater than we
have budgeted. We will also require additional financing to sustain our business
operations if we are not successful in earning revenues. We currently do not
have any arrangements for further financing and we may not be able to obtain
financing when required. Our future is dependent upon our ability to obtain
financing.
Our continuation is dependent upon us raising additional capital. In this regard
we have raised additional capital through the private placements noted above but
we will still require additional funds to continue our operations and plans.
The continuation of our business is dependent upon us obtaining further
financing, the successful development of our website, a successful marketing and
promotion program, attracting and, further in the future, achieving a profitable
level of operations. The issuance of additional equity securities by us could
result in a significant dilution in the equity interests of our current
stockholders. Obtaining commercial loans, assuming those loans would be
available, will increase our liabilities and future cash commitments.
There are no assurances that we will be able to obtain further funds required
for our continued operations. We will pursue various financing alternatives to
meet our immediate and long-term financial requirements. There can be no
assurance that additional financing will be available to us when needed or, if
available, that it can be obtained on commercially reasonable terms. If we are
not able to obtain the additional financing on a timely basis, we will be unable
to conduct our operations as planned, and we will not be able to meet our other
obligations as they become due. In such event, we will be forced to scale down
or perhaps even cease our operations.
GOING CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business.
In order to continue as a going concern and achieve a profitable level of
operations, the Company will need, among other things, additional capital
resources and to develop a consistent source of revenues. Management's plans
include of investing in and developing all types of businesses related to the
entertainment industry.
The ability of the Company to continue as a going concern is dependent upon its
ability to successfully accomplish the plan described in the preceding paragraph
and eventually 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.
PURCHASE OF SIGNIFICANT EQUIPMENT
We do not expect to purchase any significant equipment over the twelve months.
10
EMPLOYEES
Currently our only employees are our directors and officers. We do not expect
any other material changes in the number of employees over the next 12 months.
OFF BALANCE SHEET ARRANGEMENTS
As of November 12, 2009, there were no off balance sheet arrangements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
A smaller reporting company is not required to provide the information required
by this Item.
ITEM 4T. CONTROLS AND PROCEDURES
We carried out an evaluation of the effectiveness of the design and operation of
our disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) as of September 30, 2009. This evaluation was carried
out under the supervision and with the participation of our Chief Executive
Officer, Husni Hassadiyeh, and our Chief Financial Officer, Inbar Kuta. Based
upon that evaluation, our Chief Executive Officer and Chief Financial Officer
concluded that, as of September 30, 2009, our disclosure controls and procedures
are effective. There have been no changes in our internal controls over
financial reporting during the quarter ended September 30, 2009.
Disclosure controls and procedures are controls and other procedures that are
designed to ensure that information required to be disclosed in our reports
filed or submitted under the Exchange Act are recorded, processed, summarized
and reported, within the time periods specified in the SEC's rules and forms.
Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed in our
reports filed under the Exchange Act is accumulated and communicated to
management, including our Chief Executive Officer and Chief Financial Officer,
to allow timely decisions regarding required disclosure.
LIMITATIONS ON THE EFFECTIVENESS OF INTERNAL CONTROLS
Our management does not expect that our disclosure controls and procedures or
our internal control over financial reporting will necessarily prevent all fraud
and material error. Our disclosure controls and procedures are designed to
provide reasonable assurance of achieving our objectives and our Chief Executive
Officer and Chief Financial Officer concluded that our disclosure controls and
procedures are effective at that reasonable assurance level. 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 controls
can provide absolute assurance that all control issues and instances of fraud,
if any, within the Company have been detected. These inherent limitations
include the realities that judgments in decision-making can be faulty, and that
breakdowns can occur because of simple error or mistake. Additionally, controls
can be circumvented by the individual acts of some persons, by collusion of two
or more people, or by management override of the internal control. The design of
any system of controls also is based in part upon certain assumptions about the
likelihood of future events, and there can be no assurance that any design will
succeed in achieving its stated goals under all potential future conditions.
Over time, control may become inadequate because of changes in conditions, or
the degree of compliance with the policies or procedures may deteriorate.
11
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are not a party to any pending legal proceeding. We are not aware of any
pending legal proceeding to which any of our officers, directors, or any
beneficial holders of 5% or more of our voting securities are adverse to us or
have a material interest adverse to us.
ITEM 1A: RISK FACTORS
A smaller reporting company is not required to provide the information required
by this Item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters have been submitted to our security holders for a vote, through the
solicitation of proxies or otherwise, during the quarterly period ended
September 30, 2009.
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS
Exhibit
Number Description of Exhibit
------ ----------------------
31.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
31.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
32.1 Certification of Chief Executive Officer and Chief Financial Officer
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
12
SIGNATURES
In accordance with the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Buyonate, Inc.
Date: November 12, 2009
By: /s/ Husni Hassadiyeh
-------------------------------------------
Husni Hassadiyeh
Title: Chief Executive Officer and Director
1
