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EX-31.1 - CERTIFICATION - Alpha Lujo, Inc. | ex31-1.htm |
EX-32.1 - CERTIFICATION - Alpha Lujo, Inc. | ex32-1.htm |
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
quarter ended December 31, 2009
¨ TRANSITION REPORT UNDER SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the
transition period from _____ to _____
Commission
File Number: 333-156531
E GLOBAL MARKETING,
INC.
(Exact
name of small business issuer as specified in its charter)
New
York
|
20-5518632
|
|
(State
of incorporation)
|
(IRS
Employer ID Number)
|
c/o
Patrick Giordano
E
Global Marketing, Inc.
1730
62nd
Street
Brooklyn, New York
11204
(Address
of principal executive offices)
718-
755-0943
(Issuer's
telephone number)
(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 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 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 ¨
The
number of shares of the issuer’s common stock issued and outstanding as of
February 12, 2010 was 20,644,000 shares.
TABLE
OF CONTENTS
Page
|
|
PART
I
|
3
|
Item
1. Financial Statements
|
10
|
Item
2. Management’s Discussion and Analysis or Plan of
Operation
|
10
|
Item
3 Quantitative and Qualitative Disclosures About Market
Risk
|
15
|
Item
4(T) Controls and Procedures
|
15
|
PART
II
|
16
|
Item
1. Legal Proceedings
|
16
|
Item
IA. Risk Factors
|
16
|
Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds
|
16
|
Item
3. Defaults Upon Senior Securities
|
16
|
Item
4. Submission of Matters to a Vote of Security Holders
|
17
|
Item
5. Other Information
|
17
|
Item
6. Exhibits
|
17
|
Signature
|
17
|
2
PART
I
FINANCIAL
INFORMATION
Item
1. Financial Statements.
E Global
Marketing Inc.
Index to
Financial Statements
Financial
Statements:
|
|
Balance
Sheets as of December 31, 2009 (Unaudited) and June 30,
2009
|
4
|
Statements
of Operations for the three and six months ended
|
|
December
31, 2009 and 2008 (Unaudited)
|
5
|
Statements
of Changes in Stockholders’ Equity (Deficiency)
|
|
for
the six months ended December 31, 2009 (Unaudited)
|
6
|
Statements
of Cash Flows for the six months ended
|
|
December
31, 2009 and 2008 (Unaudited)
|
7
|
Notes
to Financial Statements
|
8
|
3
E
Global Marketing Inc.
|
||||||||
Balance
Sheets
|
||||||||
December
31,
|
June
30,
|
|||||||
2009
|
2009
|
|||||||
(Unaudited)
|
||||||||
Assets
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 5,059 | $ | 1,246 | ||||
Prepaid
expenses
|
- | - | ||||||
Total
current assets
|
5,059 | 1,246 | ||||||
Other
assets
|
- | - | ||||||
Total
assets
|
$ | 5,059 | $ | 1,246 | ||||
Liabilities
and Stockholders' Equity (Deficiency)
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable and accrued expenses
|
$ | 4,630 | $ | 2,421 | ||||
Credit
card liabilities
|
10,669 | 10,646 | ||||||
Due
to related parties
|
28,295 | 12,984 | ||||||
Convertible
promissory note
|
10,000 | - | ||||||
Total
current liabilities
|
53,594 | 26,051 | ||||||
Convertible
promissory note
|
- | 10,000 | ||||||
Total
liabilities
|
53,594 | 36,051 | ||||||
Stockholders'
equity (deficiency):
|
||||||||
Preferred
stock, $.001 par value; authorized
|
||||||||
5,000,000
shares, none issued and outstanding
|
- | |||||||
Common
stock, $.001 par value; authorized
|
||||||||
50,000,000
shares, issued and outstanding
|
||||||||
20,644,000
and 20,644,000 shares, respectively
|
20,644 | 20,644 | ||||||
Additional
paid-in capital
|
15,456 | 15,456 | ||||||
Deficit
|
(84,635 | ) | (70,905 | ) | ||||
Total
stockholders' equity (deficiency)
|
(48,535 | ) | (34,805 | ) | ||||
Total
liabilities and stockholders' equity (deficiency)
|
$ | 5,059 | $ | 1,246 | ||||
See
notes to financial statements.
|
4
E
Global Marketing Inc.
|
||||||||||||||||
Statements
of Operations
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
December
31,
|
Decmber
31,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Operating
revenues:
|
||||||||||||||||
Net
sales of tangible products
|
$ | - | $ | - | $ | - | $ | 355 | ||||||||
Commissions
income
|
- | - | - | - | ||||||||||||
Total
operating revenues
|
- | - | - | 355 | ||||||||||||
Cost
of operating revenues:
|
||||||||||||||||
Cost
of tangible products sold
|
- | - | - | 322 | ||||||||||||
Total
cost of operating revenues
|
- | - | - | 322 | ||||||||||||
Gross
profit (loss)
|
- | - | - | 33 | ||||||||||||
Selling,
general and administrative expenses
|
11,343 | 1,040 | 12,175 | 6,582 | ||||||||||||
Income
(loss) from operations
|
(11,343 | ) | (1,040 | ) | (12,175 | ) | (6,549 | ) | ||||||||
Interest
income
|
- | - | - | - | ||||||||||||
Interest
expense
|
(787 | ) | (476 | ) | (1,555 | ) | (923 | ) | ||||||||
Income
(loss) before income taxes
|
(12,130 | ) | (1,516 | ) | (13,730 | ) | (7,472 | ) | ||||||||
Income
taxes (benefit)
|
- | - | - | - | ||||||||||||
Net
income (loss)
|
$ | (12,130 | ) | $ | (1,516 | ) | $ | (13,730 | ) | $ | (7,472 | ) | ||||
Net
income (loss) per share -
|
||||||||||||||||
basic
and diluted
|
$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | ||||
Weighted
average number of shares
|
||||||||||||||||
outstanding
- basic and diluted
|
20,644,000 | 20,634,000 | 20,644,000 | 20,629,000 | ||||||||||||
See
notes to financial statements.
|
5
E
Global Marketing Inc.
|
||||||||||||||||||||
Statements
of Changes in Stockholders' Equity (Deficiency)
|
||||||||||||||||||||
Total
|
||||||||||||||||||||
Common
Stock,
|
Additional
|
Stockholders'
|
||||||||||||||||||
$.001
par value
|
Paid-In
|
Equity
|
||||||||||||||||||
Shares
|
Amount
|
Capital
|
Deficit
|
(Deficiency)
|
||||||||||||||||
Balances,
June 30, 2007
|
20,000,000 | $ | 20,000 | $ | - | $ | (29,170 | ) | $ | (9,170 | ) | |||||||||
Sale
of shares in May 2008
|
624,000 | 624 | 14,976 | - | 15,600 | |||||||||||||||
Net
income (loss)
|
- | - | - | (15,471 | ) | (15,471 | ) | |||||||||||||
Balances,
June 30, 2008
|
20,624,000 | 20,624 | 14,976 | (44,641 | ) | (9,041 | ) | |||||||||||||
Sale
of shares in November 2008
|
20,000 | 20 | 480 | - | 500 | |||||||||||||||
Net
income (loss)
|
- | - | - | (26,264 | ) | (26,264 | ) | |||||||||||||
Balances,
June 30, 2009
|
20,644,000 | 20,644 | 15,456 | (70,905 | ) | $ | (34,805 | ) | ||||||||||||
Unaudited:
|
||||||||||||||||||||
Net
income (loss)
|
- | - | - | (13,730 | ) | (13,730 | ) | |||||||||||||
Balance,
December 31, 2009
|
20,644,000 | $ | 20,644 | $ | 15,456 | $ | (84,635 | ) | $ | (48,535 | ) | |||||||||
See
notes to financial statements.
|
6
E
Global Marketing Inc.
|
||||||||
Statements
of Cash Flows
|
||||||||
Six
Months Ended
|
||||||||
December
31,
|
||||||||
2009
|
2008
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
Cash
flows from operating activities:
|
||||||||
Net
income (loss)
|
$ | (13,730 | ) | $ | (7,472 | ) | ||
Adjustments
to reconcile net income
|
||||||||
(loss)
to net cash provided by (used in)
|
||||||||
operating
activities:
|
||||||||
Stock-based
compensation
|
- | - | ||||||
Changes
in operating assets and liabilities:
|
||||||||
Prepaid
expenses
|
- | - | ||||||
Accounts
payable and accrued expenses
|
2,209 | (590 | ) | |||||
Net
cash provided by (used in)
|
||||||||
operating
activities
|
(11,521 | ) | (8,062 | ) | ||||
Cash
flows from investing activities
|
- | - | ||||||
Cash
flows from financing activities:
|
||||||||
Increase
(decrease) in credit card liabilities
|
23 | 281 | ||||||
Increase
(decrease) in due to related parties
|
15,311 | 677 | ||||||
Proceeds
from convertible promissory note
|
- | - | ||||||
Proceeds
from sales of common stock
|
- | 500 | ||||||
Net
cash provided by (used in)
|
||||||||
financing
activities
|
15,334 | 1,458 | ||||||
Increase
(decrease) in cash and
|
||||||||
cash
equivalents
|
3,813 | (6,604 | ) | |||||
Cash
and cash equivalents, beginning of period
|
1,246 | 6,816 | ||||||
Cash
and cash equivalents, end of period
|
$ | 5,059 | $ | 212 | ||||
Supplemental
disclosures of cash flow information:
|
||||||||
Interest
paid
|
$ | 999 | $ | 546 | ||||
Income
taxes paid
|
$ | - | $ | - | ||||
See
notes to financial statements.
|
7
E Global
Marketing Inc.
Notes to
Financial Statements
(Unaudited)
NOTE 1 –
ORGANIZATION AND NATURE OF BUSINESS
E Global
Marketing Inc. (the “Company”) was incorporated in New York on September 7,
2006. The Company markets various retail merchandise online at
www.vitaminsnmore.net, www.rsvpfragrances.com, and
www.rsvpgiftbaskets.com.
NOTE 2 –
INTERIM FINANCIAL STATEMENTS
The
unaudited financial statements as of December 31, 2009 and for the three and six
months ended December 31, 2009 and 2008 have been prepared in accordance with
accounting principles generally accepted in the United States for interim
financial information and with instructions to Form 10-Q. In the
opinion of management, the unaudited financial statements have been prepared on
the same basis as the annual financial statements and reflect all adjustments,
which include only normal recurring adjustments, necessary to present fairly the
financial position as of December 31, 2009 and the results of operations and
cash flows for the three and six months ended December 31, 2009 and
2008. The financial data and other information disclosed in these
notes to the interim financial statements related to these periods are
unaudited. The results for the six months ended December 31, 2009 are
not necessarily indicative of the results to be expected for any subsequent
quarter of the entire year ending June 30, 2010. The balance sheet at
June 30, 2009 has been derived from the audited financial statements at that
date.
Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the
United States have been condensed or omitted pursuant to the Securities and
Exchange Commission’s rules and regulations. These unaudited
financial statements should be read in conjunction with our audited financial
statements and notes thereto for the year ended June 30, 2009 as included in our
report on Form 10-K.
NOTE 3 –
CREDIT CARD LIABILITIES
The
Company uses credit cards to pay for various Company expenses. The
credit card liabilities bear interest at rates ranging up to 24% and are due in
monthly installments of principal and interest.
NOTE 4
–DUE TO RELATED PARTIES
Due
to related parties consist of:
|
||||||||
December
31,
|
June
30,
|
|||||||
2009
|
2009
|
|||||||
Due
to chief executive officer, interest at 8.5%, due on
demand
|
||||||||
$ | 18,580 | $ | 10,422 | |||||
Due
to secretary, interest at 8.5%, due on demand
|
||||||||
9,715 | 2,562 | |||||||
Total
|
$ | 28,295 | $ | 12,984 |
8
NOTE 5-
CONVERTIBLE PROMISSORY NOTE
On March
30, 2009, the Company delivered a $10,000 promissory note to an investor in
exchange for $10,000 cash. The note is non-interest bearing, is due on September
30, 2010, and is convertible (in part or in whole) into shares of Company common
stock at a conversion price of $0.10 per share.
NOTE 6 –
STOCKHOLDERS’ EQUITY
In
September 2006, the Company issued 10,000,000 shares of its common stock
to its chief executive officer Patrick Giordano for $1,020 cash and
services valued at $8,980 and 10,000,000 shares of its common stock to William
Hayde for services valued at $10,000.
In May
2008, the Company sold a total of 624,000 shares of its common stock to 34
investors at a price of $0.025 per share or $15,600 total. On March
19, 2009, the Securities and Exchange Commission (the “SEC”) declared
effective the Company’s registration statement on Form S-1 to
register for resale the 624,000 shares at a price of $0.05 per share until the
shares are quoted on the OTC Bulletin Board and thereafter at prevailing market
prices; the Company will not receive any proceeds from any sales of such shares
by the selling stockholders.
In
November 2008, the company sold a total of 20,000 shares of its common stock to
an investor at a price of $0.025 per share or $500 total.
NOTE 7 –
INCOME TAXES
No
provisions for income taxes were recorded for the periods presented since the
Company incurred losses in those periods.
Based on
management‘s present assessment, the Company has not yet determined it to be
more likely than not that a deferred tax asset attributable to the future
utilization of the $65,655 net operating loss carryforwards as of December 31,
2009 will be realized. Accordingly, the Company has provided a 100%
allowance against the deferred tax asset in the financial statements at December
31, 2009. The Company will continue to review this valuation allowance and make
adjustments as appropriate. The $65,655 net operating loss carryforwards expire
$10,190 in 2027, $15,471 in 2028, $26,264 in 2029, and $13,730 in
2030.
Current
tax laws limit the amount of loss available to be offset against future taxable
income when a substantial change in ownership occurs. Therefore, the
amount available to offset future taxable income may be limited.
NOTE 8 –
COMMITMENTS AND CONTINGENCIES
Rental
Agreement
The
Company occupies office space in Brooklyn, New York provided by the Company’s
chief executive officer at no cost to the Company.
Letter of
Intent
On
November 18, 2009, the Company and its two officers Patrick Giordano
(“Giordano”) and William Hayde (“Hayde”) executed a non-binding letter of intent
(the “ LOI”) with Murdoch Security & Investigations, Inc. (“Murdoch”)
confirming the general terms upon which an Exchange and/or Merger Agreement (the
“Definitive Agreement”) is to be executed. Among other things, the LOI provides
at closing for the surrender of a total of 18,000,000 shares of Company common
stock by Giordano and Hayde for a total of $40,000 to be paid by Murdoch and for
the issuance of approximately 27,300,000 newly issued restricted shares of
Company common stock in exchange for all of the issued and outstanding common
stock, options and warrants of Murdoch. At closing, the financial statements of
the Company are to reflect no liabilities and no assets. The Definitive
Agreement is subject to Murdoch completing the acquisition of a certain Mexican
company, completion of “due diligence” investigations by the parties, and
certain other terms and conditions. The LOI remains in effect until March 31,
2010 and may be extended for an additional 30 days upon terms as the parties so
agree.
9
NOTE 9-
SUBSEQUENT EVENTS
The
Company has evaluated subsequent events through the filing date of this Form
10-Q and has determined that there were no subsequent events to recognize or
disclose in these financial statements.
Item
2. Management’s Discussion and Analysis or
Plan
of Operations.
As used
in this Form 10-Q, references to the “E Global,” Company,” “we,” “our” or “us”
refer to E Global Marketing, Inc. Unless the context otherwise
indicates.
Forward-Looking
Statements
The
following discussion should be read in conjunction with our financial
statements, which are included elsewhere in this Form 10-Q (the “Report”). This
Report contains forward-looking statements which relate to future events or our
future financial performance. In some cases, you can identify forward-looking
statements by terminology such as “may,” “should,” “expects,” “plans,”
“anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” 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.
For a
description of such risks and uncertainties refer to our Registration Statement
on Form S-1, filed with the Securities and Exchange Commission on December 31,
2008. 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 herein. Except as required by applicable
law, including the securities laws of the United States, we do not intend to
update any of the forward-looking statements to conform these statements to
actual results.
Business
Overview
We were
incorporated under the laws of the State of New York on September 7,
2006. We are an early stage company, engaged in the marketing and
selling of diversified consumer products and services. E Global Marketing
intends to build a “family” of online retail stores utilizing fulfillment
companies and drop shipping manufacturers. The Company believes this
business model allows it to be more flexible in the competitive online
marketplace. The business model enables E Global to concentrate its
efforts on the marketing and promotion of its online stores. The
Company will optimize its marketing efforts utilizing cross-marketing between
all company owned online retail stores. E Global intends to operate a
total of six (6) online stores within the next twelve (12) months.
The
Market
ComScore
Inc., a global leader in measuring the digital world, estimates that there are
over 183 million internet users in North America as of January
2008. This represents an increase of 5.7% over the previous
year. We believe the number of internet users is significant, and we
intend to concentrate our efforts on marketing our retail sites in a effective
manner. According to comScore Inc., e-commerce spending for the 2007
holiday season (November 1 - December 31). ,$29.2 billion
was spent online during the holiday season, marking a 19-percent gain versus the
same period last year. These statistics are significant to the
Company as it relates to our marketing plan and overall business
model. As the e-commerce market grows, our success will be partially
determined by our ability to reach as many of these internet users as
possible.
10
Online
Marketing
E Global
Marketing Inc. is an online marketer of diversified consumer products and
services. The Company enters the $100 Billion online retail market
with a business model which allows the Company to compete in numerous markets
simultaneously. E Global intends to utilize fulfillment centers and
drop shipping companies to enter these markets. Our business model
allows us to do so without the need for significant capital expenditures. The
fulfillment centers and drop shippers would be responsible for all back-end
operations of the business. The Company would therefore concentrate
on its marketing efforts, and the development of additional online
stores. Currently, the Company has three (3) retail sites which are
as follows: www.Vitamins-N-More.net; www.RSVPgiftbaskets.com; and
www.RSVPfragrances.com. The Company initially entered the online retail market
in September 2006 with its acquisition of Vitamins-N-More.net. The
acquisition gave the Company an immediate presence in the online marketing
business. In October 2006, the Company launched its second online
store RSVP GiftBaskets.com. RSVP Fragrances.com, the third Company
site, went active in March 2007. The Company intends to expand its presence
through the acquisition of additional online “e-tailers”. As of this
date, no such targets have been identified. The goal of the Company
is to grow organically and through acquisitions, to increase market share,
revenue, and ultimately profits.
Online
Stores Currently Operating
Vitamins-N-More.net
In
September 2006, E Global Marketing Inc acquired the assets of
Vitamins-N-More.net, an online retailer of vitamins and nutritional
supplements. The transaction consisted of a full e-commerce enabled
business which includes an established web site and customer base utilizing the
Apollo Software E-Commerce technology, branded with the Vitamins-N-More web site
URL and logo, POP email accounts, and custom
graphics. Vitamins-N-More has access to, and can offer for sale, over
140 brands of vitamins and nutritional supplements. All orders
received on our site go directly to our Apollo Fulfillment for
processing. The Company does not stock any inventory, nor ship any
products. Apollo Fulfillment provides us with all of the products available on
our site, drop shipping services, along with web hosting and platform for www.vitamins-n-more.net. Our
agreement with Apollo is informal, non-binding and non-exclusive and may be
canceled at anytime by either party.
RSVP
Gift Baskets.com
In
October 2006, the Company entered into an informal, non-binding, non-exclusive
arrangement with Gift Marketing Alliance (GMA). GMA is a wholesale
supplier/distributor of fresh flowers and gift baskets. GMA provides
the Company with a co-branded web site and web hosting. GMA provides
us access to the wholesale suppliers necessary to operate this segment of our
business. This arrangement eliminates the need to carry any
inventory. The orders received on our site go directly to GMA for
processing. RSVP Gift Baskets offers consumers a selection of over
300 gift items available for standard and over night delivery. Fruit
baskets, wine baskets, gourmet chocolates and foods, roses, fresh flowers, and
many other gift items can now be purchased at RSVP Gift
Baskets. The web address for this online store is
www.rsvpgiftbaskets.com. Our non-binding agreement with GMA is on a month to
month basis and may be canceled at anytime by either party. GMA
provides us with web hosting and maintenance of our site, credit card billing,
shipping and fulfillment, of all orders received by www.rsvpgiftbaskets.com.
RSVP
Fragrances.com
In March
2007, E Global Marketing launched its online fragrance store, RSVP
Fragrances.com. The Company has established an account with Fragrancenet.com, a
wholesale drop shipping distribution company located in Hauppague, New
York. Fragrancenet is our supplier of wholesale fragrances, skin
care, and scented candles. Fragrancenet also provides us with drop
shipping services which eliminates the need for us to carry any
inventory. We have access to most major designer labels
such as Calvin Klein, Fendi, Davidoff, Hermes, Dolce & Gabbana, Carolina
Herrera, as well as many others. This arrangement allows us to keep
overhead costs low, and gives us the ability to offer products at below
suggested retail prices. The web address for our online store
is www.rsvpfragrances.com.
Our account with Fragrancenet.com may be canceled at anytime by either
party. Web hosting for this site is provided by Yahoo! and the site
is maintained by the Company.
11
Growth
Strategy
Our
objective is to become a leading online “e-tailer” of diversified consumer
products and services. We believe there are significant opportunities to
generate revenues through the implementation of our operating strategy and by
growing our customer base, both organically and through strategic
acquisitions.
The
Company is planning an aggressive online marketing campaign for Vitamins-N-More,
RSVP Gift Baskets, and RSVP Fragrances. The marketing plan includes
major search engine pay-per-click sponsored ads, targeted banner ads, and an
email campaign. The Company believes that such an aggressive
marketing campaign should significantly increase the amount of traffic directed
to the site. The Company anticipates as a result of increased
traffic, revenues should grow proportionately.
E Global
Marketing is also looking outside the “web” for ways to generate additional
revenue. The Company believes it can “partner” with synergistic
companies and engage in cross-promotion. The Company has not
identified any such partner, and has not entered into any definitive agreements,
or discussions.
Product
Development
While E
Global Marketing does not currently manufacture any of the products it sells on
its web sites, we intend to examine the feasibility of developing our own
product line of supplement products. The product line would be
developed by the Company, and produced and packaged by a private label
manufacturer. Initially, we intend to explore the development of a
natural weight loss product. The Company believes that the
weight loss market is significant because of its size. Entering this
market will give the Company an opportunity to increase gross margins, and
subsequently overall net income.
Additional
Online Markets
E Global
Marketing intends to enter additional online markets to capture a small
percentage of the $100 Billion online retail market. The Company intends to add
six (6) additional online retail stores in the future. We are currently
exploring the following markets:
·
|
Books,
Audio, Video
|
·
|
Health
and Beauty
|
|
·
|
House
Wares
|
·
|
Pet
Supplies
|
·
|
Software
|
·
|
Sporting
Goods
|
Such
expansion would be based upon the Company’s ability to raise additional capital
necessary for the start up, development, and marketing of each new
store. In order to enter these additional markets quickly without the
need for significant capital expenditures, we will continue to utilize
fulfillment centers and drop shipping.
E Global
will have the distinct advantage of cross-marketing between all company owned
online stores. This should allow the Company to grow more quickly as
a result of our stored data base of existing customers. With the
opening of each new online store, the Company will accumulate additional new
customers which will subsequently increase its data base. When a new
online store is launched, we will be in a position it immediately generate
initial traffic. This marketing approach is part of the overall
business model of the Company.
12
Fulfillment
Companies
Fulfillment
companies provide most of the “back-end” services for manufacturers and
retailers. Order fulfillment can be defined as the process of
receiving an order for a product or service, either by phone, fax or internet,
entering the order into a database and handling of the financial transaction for
the product or service. The fulfillment company then ships the
product or service to complete the transaction.
In
addition to the above activities, the fulfillment center will also capture
demographic and consumer opinion information from the customer via survey
information sent in on the order form. They may also provide assembly
services, or collate literature, or package the order to prepare it for
shipment. By establishing discounts with package carriers based on volume,
fulfillment companies can pass along to the ultimate consumer significant
savings in shipping costs not available to individuals or non-central shipping
points.
The
resources of a fulfillment center are storage space, trained personnel, and an
inventory/order processing system. Most direct response programs involve at
least one of these elements and usually all three to some degree. Managing
these resources is a separate and distinct business from the marketing function.
E Global will be able to concentrate on its marketing campaign as a direct
result of utilization of fulfillment companies.
Drop
Shipping
A drop
shipper is a manufacturer or authorized wholesale distributor who will ship our
single item orders directly to our customers. As in utilizing fulfillment
companies, drop shippers will allow E Global to concentrate on its marketing
campaign. The drop shipping company we engage will handle all
back-end aspects of our business. It will not be necessary to set-up
warehousing or carry inventory using this method. Drop shipping will
enable the Company to enter online markets quickly and cost
effectively. E Global should be able to purchase products from drop
shipping companies at up to sixty (60) percent off retail
pricing. This will still allow for us to offer our merchandise to our
retail customers at a significant discount, while maintaining our anticipated
gross margin of approximately twenty (20) percent.
Competition
E Global
faces intense competition from large national manufacturers such as GNC,
Twinlab, Met-Rx, and others. We also compete with a significant number of online
retailers, all of whom have resources far greater than ours. Some of
these companies have been in business for several years and have established
brand recognition and consumer loyalty. We compete within these markets based
primarily on products sold, price, quality, service and distribution. From time
to time, the intensity of competition may result in price
discounting. Such price discounting puts pressure on margins and can
negatively impact operating profit. Our prospects depend on our sole ability to
increase our market share. An unexpected inability to gain market share or meet
our business plan could result from pricing or product strategies pursued by
competitors. If this occurs, our revenues may be materially adversely
affected.
In
addition to competing with large corporations, the Company will also be in
direct competition with smaller “independent” businesses. We
believe we will be able to compete effectively in this market as a direct result
of our business model.
Governmental
Regulations
We are
subject to a variety of state laws and regulations relating to, among other
things, advertising, pricing, charging and collecting state sales or use tax and
product safety/restrictions. We are subject to certain federal, state
and local laws and regulations relating to the protection of the environment and
human health and safety. We believe that we are in substantial compliance with
the terms of environmental laws and that we have no liabilities under such laws
that we expect to have a material adverse effect on our business, results of
operations or financial condition.
13
Employees
We have
no employees other than our executive officers, Patrick Giordano and William
Hayde, who are also members of our board of directors. All functions
including development, strategy, negotiations and administration are currently
being provided by our executive officers.
Plan
of Operation
Over the
next twelve months, we intend to conduct an aggressive online marketing campaign
for Vitamins-N-More, RSVP Gift Baskets, and RSVP Fragrances. The
marketing plan includes major search engine pay-per-click sponsored ads,
targeted banner ads, and an email campaign. The Company believes that
such an aggressive marketing campaign should significantly increase the amount
of traffic directed to the site. The Company anticipates that as a
result of increased traffic, revenues should grow proportionately. We currently
do not have sufficient funds to implement our planned activities and will
require additional financing. With adequate funding we feel that we will be well
positioned to execute our business plan.
The
Company estimates that it will require an approximate minimum of $50,000 in the
next 12 months to implement its activities. Such funds will be needed
for the following purposes:
Purpose
|
Amount
|
|||
Web
Hosting
|
$
|
6,000
|
||
Web
Development
|
$
|
25,000
|
||
Marketing
|
$
|
6,000
|
||
Travel
& Entertainment
|
$
|
1,000
|
||
Cost
of operating as a public company
|
$
|
12,000
|
||
Total
|
$
|
50,000
|
Results
of Operations
During
the three months ended December 31, 2009, the Company had no operating income
and incurred a net loss of $12,130 as compared to no operating income and net
loss of $1,516 for the same three months ended December 31, 2008. The Company had no
operating income and net loss of $13.730 for the six months ended December 31,
2009, as compared to net sales of $355 and net loss of $7,472 for the six months
ended December 31, 2008.
14
Revenues
Revenues
decreases $355 from $355 in the six months ended December 31, 2008 to $0 in six
months ended December 31, 2009 as a result a decrease in orders due to lower
marketing activity by us.
Liquidity
and Capital Resources
As of
December 31, 2009, the Company had a cash balance of $5,059. The Company does
not believe that such funds will be sufficient to fund its expenses over the
next twelve months. The Company raised $15,600 in a private placement
held in May 2008 and on March 24, 2009, the Company executed and delivered a
promissory note in the principal amount of $10,000 to Mr. David Long in exchange
for $10,000 cash. The note is non-interest bearing and is due on September 30,
2010. The promissory note is convertible (in part or in whole) into shares of
Company common stock at a conversion price of $0.10 per share.
There can
be no assurance that additional capital will be available to the Company. The
Company currently has no agreements, arrangements or understandings with any
person to obtain funds through bank loans, lines of credit or any other
sources. Since the Company has no such arrangements or plans
currently in effect, its inability to raise funds for the above purposes will
have a severe negative impact on its ability to remain a viable
company.
Off-Balance
Sheet Arrangements
We have
no off-balance sheet arrangements.
Item
3.Quantitative and Qualitative Disclosures About Market Risk.
A smaller
reporting company, as defined by Item 10 of Regulation S-K, is not required to
provide the information required by this item.
Item
4(T). Controls and Procedures.
Disclosure
Controls and Procedures
Our
disclosure controls and procedures are designed to ensure that information
required to be disclosed in reports that we file or submit under the Securities
Exchange Act of 1934 is recorded, processed, summarized and reported within the
time periods specified in the rules and forms of the United States Securities
and Exchange Commission. Our principal executive officer and principal financial
and accounting officers have reviewed the effectiveness of our “disclosure
controls and procedures” (as defined in the Securities Exchange Act of 1934
Rules 13(a)-15(e) and 15(d)-15(e)) within the end of the period covered by this
Quarterly Report on Form 10-Q and have concluded that the disclosure controls
and procedures are effective to ensure that material information relating to the
Company is recorded, processed, summarized, and reported in a timely
manner.
Changes
in Internal Controls over Financial Reporting
There
have been no changes in the Company's internal control over financial reporting
during the last quarterly period covered by this report that have materially
affected, or are reasonably likely to materially affect, the Company's internal
control over financial reporting.
15
PART
II
OTHER
INFORMATION
Item
1. Legal Proceedings.
There are
no pending legal proceedings to which the Company is a party or in which any
director, officer or affiliate of the Company, any owner of record or
beneficially of more than 5% of any class of voting securities of the Company,
or security holder is a party adverse to the Company or has a material interest
adverse to the Company. The Company’s property is not the subject of any pending
legal proceedings.
Item
1A. Risk Factors
A smaller
reporting company, as defined by Item 10 of Regulation S-K, is not required to
provide the information required by this item.
Item
2. Unregistered Sales of Equity Securities and Use of Proceeds.
Unregistered
Sales of Equity Securities
In
November 2008, the company sold a total of 20,000 shares of its common stock to
Bernard Herman, an existing shareholder, at a purchase price of $0.025 per share
for an aggregate of $500.
On March
24, 2009, the Company executed and delivered a promissory note in the principal
amount of $10,000 to Mr. David Long in exchange for $10,000 cash. The note is
non-interest bearing and is due on September 30, 2010. The promissory note is
convertible (in part or in whole) into shares of Company common stock at a
conversion price of $0.10 per share.
Purchases
of equity securities by the issuer and affiliated purchasers
None.
Use
of Proceeds
None.
Item
3. Defaults Upon Senior Securities.
None.
16
Item
4. Submission of Matters to a Vote of Security Holders.
There was
no matter submitted to a vote of security holders during the fiscal quarter
ended December 31, 2009.
Item
5. Other Information.
None
Item
6. Exhibits
Exhibit
No.
|
Description
|
|
31.1
|
Certification
pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
|
|
32.1
|
Certification
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
|
SIGNATURES
In
accordance with to requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
E
GLOBAL MARKETING, INC.
|
|||
Dated:
February 12, 2010
|
By:
|
/s/Patrick
Giordano
|
|
Name:
|
Patrick
Giordano
|
||
Title:
|
President,
Chief Executive Officer,
Treasurer,
Chief Financial Officer and
Director
(Principal Executive, Financial
and
Accounting Officer)
|
In
accordance with 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.
Dated:
February 12, 2010
|
By:
|
/s/Patrick
Giordano
|
Name:
|
Patrick
Giordano
|
|
Title:
|
President,
Chief Executive Officer,
Treasurer,
Chief Financial Officer and
Director
(Principal Executive, Financial
and
Accounting Officer)
|
Dated:
February 12, 2010
|
By:
|
/s/
William Hayde
|
Name:
|
William
Hayde
|
|
Title:
|
Secretary
and Director
|
17