Attached files
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EX-31.1 - BOLDFACE GROUP, INC. | v174647_ex31-1.htm |
EX-32.1 - BOLDFACE GROUP, INC. | v174647_ex32-1.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
(Mark
One)
x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For the
quarterly period ended December
31, 2009
¨
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For the
transition period from _______ to _______
Commission
File Number: 333-148722
MAX
CASH MEDIA, INC.
(Exact
name of registrant as specified in its charter)
Nevada
|
02-0811868
|
|
(State
or other jurisdiction of incorporation)
|
(I.R.S.
Employer Identification No.)
|
50
Brompton Road, Apt. 1X
Great
Neck, NY 11021
(Address
of principal executive offices)
(646)
303-6840
(Registrant’s
telephone number, including area code)
Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes x No ¨
Indicate
by check mark whether the registrant 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 (§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. See
the definitions of “large accelerated filer,” “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
|
|||
(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 ¨
There
were 6,370,000 shares of the
registrant’s common stock, $0.001 par value per share, outstanding as of
February 18, 2010.
MAX
CASH MEDIA, INC.
FORM
10-Q
FOR THE
QUARTERLY PERIOD ENDED DECEMBER 31, 2009
TABLE OF
CONTENTS
Page
|
||
PART
I - FINANCIAL INFORMATION
|
3
|
|
Item
1.
|
Financial
Statements
|
3
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
13
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
17
|
Item
4T.
|
Controls
and Procedures
|
17
|
PART
II - OTHER INFORMATION
|
18
|
|
Item
1.
|
Legal
Proceedings
|
18
|
Item
1A.
|
Risk
Factors
|
19
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
19
|
Item
3.
|
Defaults
Upon Senior Securities
|
19
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
19
|
Item
5.
|
Other
Information
|
19
|
Item
6.
|
Exhibits
|
19
|
SIGNATURES
|
|
2
PART
I – FINANCIAL INFORMATION
Item
1. Financial
Statements
Page
|
|
Condensed
Balance Sheets as of December 31, 2009 (unaudited) and
|
|
as
of September 30, 2009
|
4
|
Condensed
Statements of Operations for the three months
|
|
ended
December 31, 2009 and, 2008 and
|
|
for
the period from July 9, 2007 (Inception) to December 31, 2009
(unaudited)
|
5
|
Condensed
Statement of Changes in Stockholders’ Equity/(Deficiency)
|
|
for
the period from July 9, 2007 (Inception) to December 31, 2009
(unaudited)
|
6
|
Condensed
Statements of Cash Flows for the three months
|
|
ended
December 31, 2009 and 2008 (unaudited) and
|
|
for
the period from July 9, 2007 (Inception) to December 31, 2009
(unaudited)
|
7
|
Notes
to Condensed Financial Statements (unaudited)
|
8
|
3
Max
Cash Media, Inc.
(A
Development Stage Company)
Condensed Balance Sheets
ASSETS
|
||||||||
December 31,
|
September 30,
|
|||||||
2009
|
2009
|
|||||||
(Unaudited)
|
||||||||
Current
Assets
|
||||||||
Cash
|
$ | 17,113 | $ | 22,545 | ||||
Total
Assets
|
$ | 17,113 | $ | 22,545 | ||||
LIABILITIES AND STOCKHOLDERS'
EQUITY/(DEFICIENCY)
|
||||||||
Current
Liabilities
|
||||||||
Accounts
Payable
|
$ | 34,777 | $ | 4,186 | ||||
Accrued
Interest Payable
|
1,911 | 777 | ||||||
Current Liabilities
|
36,688 | 4,963 | ||||||
Long
Term Liabilities
|
||||||||
Convertible
Notes Payable
|
50,000 | 50,000 | ||||||
Total
Liabilities
|
86,688 | 54,963 | ||||||
Commitments
and Contingencies
|
||||||||
Stockholders'
Equity /(Deficiency)
|
||||||||
Preferred
stock, $0.001 par value; 10,000,000 shares authorized,
|
||||||||
none
issued and outstanding
|
- | - | ||||||
Common
stock, $0.001 par value; 100,000,000 shares authorized, 6,370,000
shares
|
||||||||
issued
and outstanding, respectively
|
6,370 | 6,370 | ||||||
Additional
paid-in capital
|
147,073 | 146,423 | ||||||
Deficit
accumulated during the development stage
|
(223,018 | ) | (185,211 | ) | ||||
Total
Stockholders' Equity/(Deficiency)
|
(69,575 | ) | (32,418 | ) | ||||
Total
Liabilities and Stockholders' Equity/(Deficiency)
|
$ | 17,113 | $ | 22,545 |
See accompanying notes to
condensed consolidated financial statements.
4
Max
Cash Media, Inc.
(A
Development Stage Company)
Condensed
Statements of Operations
(Unaudited)
For the Three Months Ended
|
For the
period from
July 9, 2007
(inception) to
|
|||||||||||
December 31, 2009
|
December 31, 2008
|
December 31, 2009
|
||||||||||
Operating
Expenses
|
||||||||||||
Professional
fees
|
$ | 35,013 | $ | 7,320 | $ | 190,847 | ||||||
General
and administrative
|
1,662 | 4,059 | 31,127 | |||||||||
Total
Operating Expenses
|
36,675 | 11,379 | 221,974 | |||||||||
Loss
from Operations
|
(36,675 | ) | (11,379 | ) | (221,974 | ) | ||||||
Other
Income / (Expense)
|
||||||||||||
Interest
Income
|
2 | - | 867 | |||||||||
Interest
Expense
|
(1,134 | ) | - | (1,911 | ) | |||||||
Total
Other Income / (Expense) - net
|
(1,132 | ) | - | (1,044 | ) | |||||||
LOSS
FROM OPERATIONS BEFORE INCOME TAXES
|
(37,807 | ) | (11,379 | ) | (223,018 | ) | ||||||
Provision
for Income Taxes
|
- | - | - | |||||||||
NET
LOSS
|
$ | (37,807 | ) | $ | (11,379 | ) | $ | (223,018 | ) | |||
Net
Loss Per Share - Basic and Diluted
|
$ | (0.01 | ) | $ | (0.00 | ) | ||||||
Weighted
average number of shares outstanding
|
||||||||||||
during
the year/period - Basic and Diluted
|
6,370,000 | 6,370,000 |
See accompanying notes to condensed consolidated
financial statements.
5
Max
Cash Media, Inc.
(A
Development Stage Company)
Condensed
Statement of Changes in Stockholders’ Equity/(Deficiency)
For
the period from July 9, 2007 (Inception) to December 31, 2009
(Unaudited)
Deficit
|
|
|||||||||||||||||||||||||||||||
Additional
|
accumulated
during
the
|
Total
Stockholder's
|
||||||||||||||||||||||||||||||
Preferred
Stock
|
Common
stock
|
paid-in
|
development
|
Subscription
|
Equity/
|
|||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
capital
|
stage
|
Receivable
|
(Deficiency)
|
|||||||||||||||||||||||||
Balance
July 9, 2007
|
- | $ | - | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||
Common
stock issued for services to founder ($0.001)
|
- | - | 5,000,000 | 5,000 | - | - | - | 5,000 | ||||||||||||||||||||||||
Common
stock issued for cash ($0.10/ per share)
|
- | - | 255,000 | 255 | 25,245 | - | (25,500 | ) | - | |||||||||||||||||||||||
In
kind contribution of services
|
- | - | - | - | 593 | - | - | 593 | ||||||||||||||||||||||||
Net
loss for the period July 9, 2007 (inception) to September 30,
2007
|
- | - | - | - | - | (16,593 | ) | - | (16,593 | ) | ||||||||||||||||||||||
Balance,
September 30, 2007
|
- | - | 5,255,000 | 5,255 | 25,838 | (16,593 | ) | (25,500 | ) | (11,000 | ) | |||||||||||||||||||||
Common
stock issued for cash ($0.10/ per share)
|
- | - | 1,115,000 | 1,115 | 110,385 | - | - | 111,500 | ||||||||||||||||||||||||
Cash
received for subscription receivable
|
- | - | - | - | - | - | 25,500 | 25,500 | ||||||||||||||||||||||||
In
kind contribution of services
|
- | - | - | - | 2,600 | - | - | 2,600 | ||||||||||||||||||||||||
Net
loss for the year ended September 30, 2008
|
- | - | - | - | - | (127,900 | ) | - | (127,900 | ) | ||||||||||||||||||||||
Balance,
September 30, 2008
|
- | - | 6,370,000 | 6,370 | 138,823 | (144,493 | ) | - | 700 | |||||||||||||||||||||||
In
kind contribution of services
|
- | - | - | - | 2,600 | - | - | 2,600 | ||||||||||||||||||||||||
Forgiveness
of a related party account payable
|
- | - | - | - | 5,000 | - | - | 5,000 | ||||||||||||||||||||||||
Net
loss for the year ended September 30, 2009
|
- | - | - | - | - | (40,718 | ) | - | (40,718 | ) | ||||||||||||||||||||||
Balance,
September 30, 2009
|
- | - | 6,370,000 | 6,370 | 146,423 | (185,211 | ) | - | (32,418 | ) | ||||||||||||||||||||||
In
kind contribution of services
|
- | - | - | - | 650 | - | - | 650 | ||||||||||||||||||||||||
Net
loss for the period ended December 31, 2009
|
- | - | - | - | - | (37,807 | ) | - | (37,807 | ) | ||||||||||||||||||||||
Balance,
December 31, 2009
|
- | $ | - | 6,370,000 | $ | 6,370 | $ | 147,073 | $ | (223,018 | ) | $ | - | $ | (69,575 | ) |
See accompanying notes to
condensed consolidated financial statements.
6
Max
Cash Media, Inc.
(A
Development Stage Company)
Condensed
Statements of Cash Flows
(Unaudited)
For the Three Months Ended
|
For the
Period from
July 9, 2007
(Inception) to
|
|||||||||||
December 31, 2009
|
December 31, 2008
|
December 31, 2009
|
||||||||||
Cash
Flows Used in Operating Activities:
|
||||||||||||
Net
Loss
|
$ | (37,807 | ) | $ | (11,379 | ) | $ | (223,018 | ) | |||
Adjustments
to reconcile net loss to net cash used in operations
|
||||||||||||
In-kind
contribution of services
|
650 | 650 | 6,443 | |||||||||
Shares
issued to founder for services
|
- | - | 5,000 | |||||||||
Changes
in operating assets and liabilities:
|
||||||||||||
Increase
(Decrease) in prepaid expenses
|
- | 2,500 | - | |||||||||
(Decrease)
Increase in accounts payable and accrued expenses
|
30,591 | 5,714 | 39,777 | |||||||||
Increase
in accrued interest payable
|
1,134 | - | 1,911 | |||||||||
Net
Cash Used In Operating Activities
|
(5,432 | ) | (2,515 | ) | (169,887 | ) | ||||||
Cash
Flows From Financing Activities:
|
||||||||||||
Proceeds
from a loan
|
- | - | 4,585 | |||||||||
Repayment
of a loan
|
- | - | (4,585 | ) | ||||||||
Proceeds
from loan payable- Related party
|
- | - | 1,100 | |||||||||
Repayment
of loan payable - Related party
|
- | - | (1,100 | ) | ||||||||
Proceeds
from convertible note payable
|
- | - | 50,000 | |||||||||
Proceeds
from issuance of common stock
|
- | - | 137,000 | |||||||||
Net
Cash Provided by Financing Activities
|
- | - | 187,000 | |||||||||
Net
Increase/(Decrease) in Cash
|
(5,432 | ) | (2,515 | ) | 17,113 | |||||||
Cash
at Beginning of Year/Period
|
22,545 | 3,033 | - | |||||||||
Cash
at End of Year/Period
|
$ | 17,113 | $ | 518 | $ | 17,113 | ||||||
Supplemental disclosure of cash flow
information:
|
||||||||||||
Cash
paid for interest
|
$ | - | $ | - | $ | - | ||||||
Cash
paid for taxes
|
$ | - | $ | 120 | $ | - | ||||||
Supplemental disclosure of non-cash investing and
financing activities:
|
||||||||||||
Forgiveness
of Related Accounts Payable
|
$ | - | $ | - | $ | 5,000 |
See
accompanying notes to condensed consolidated financial
statements.
7
Max
Cash Media, Inc.
(A
Development Stage Company)
Notes
to Condensed Financial Statements
as
of December 31, 2009
(Unaudited)
NOTE
1 SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES AND ORGANIZATION
(A) Basis of
Presentation
The
accompanying unaudited condensed financial statements have been prepared in
accordance with accounting principles generally accepted in The United States of
America and the rules and regulations of the Securities and Exchange Commission
for interim financial information. Accordingly, they do not include
all the information necessary for a comprehensive presentation of financial
position and results of operations.
It is
management’s opinion, however that all material adjustments (consisting of
normal recurring adjustments) have been made which are necessary for a fair
financial statements presentation. The results for the interim period
are not necessarily indicative of the results to be expected for the
year.
Activities
during the development stage include developing the business plan and raising
capital.
(B) Use of
Estimates
In
preparing financial statements in conformity with accounting principles
generally accepted in the United States of America, management is required to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements and revenues and expenses during the reported
period. Actual results could differ from those
estimates.
(C) Cash and Cash
Equivalents
The
Company considers all highly liquid temporary cash investments with an original
maturity of three months or less to be cash equivalents. At December
31, 2009, and September 30, 2009, the Company had no cash
equivalents.
(D) Loss Per
Share
Basic and
diluted net loss per common share is computed based upon the weighted average
common shares outstanding as defined by FASB Accounting Standards Codification
Topic 260, “Earnings Per Share.” As of December 31, 2009, and
December 31, 2008, there were no common share equivalents
outstanding.
(E) Income
Taxes
The
Company accounts for income taxes under FASB Codification Topic 740-10-25 (“ASC
740-10-25”). Under ASC 740-10-25, deferred tax assets and liabilities
are recognized for the future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. Under ASC 740-10-25, the effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.
8
Max
Cash Media, Inc.
(A
Development Stage Company)
Notes
to Condensed Financial Statements
as
of December 31, 2009
(Unaudited)
(F) Business
Segments
The
Company operates in one segment and therefore segment information is not
presented.
(G) Revenue
Recognition
The
Company will recognize revenue on arrangements in accordance with FASB ASC No.
605, “Revenue Recognition”. In all cases, revenue is recognized only
when the price is fixed and determinable, persuasive evidence of an arrangement
exists, the service is performed and collectability of the resulting receivable
is reasonably assured.
(H)
Reclassification
Certain
amounts from prior period have been reclassified to conform to the current
period presentation.
(I) Recent Accounting
Pronouncements
In
June 2009, the FASB issued ASC 105 Accounting Standards
Codification TM and the Hierarchy of Generally
Accepted Accounting Principles. The FASB Accounting Standards
Codification TM (the
“Codification”) has become the source of authoritative accounting principles
recognized by the FASB to be applied by nongovernmental entities in the
preparation of financial statements in accordance with Generally Accepted
Accounting Principles (“GAAP”). All existing accounting standard documents are
superseded by the Codification and any accounting literature not included in the
Codification will not be authoritative. Rules and interpretive releases of the
SEC issued under the authority of federal securities laws, however, will
continue to be the source of authoritative generally accepted accounting
principles for SEC registrants. Effective September 30, 2009, all
references made to GAAP in our consolidated financial statements will include
references to the new Codification. The Codification does not change or alter
existing GAAP and, therefore, will not have an impact on our financial position,
results of operations or cash flows.
In June
2009, the FASB issued changes to the consolidation guidance applicable to a
variable interest entity (VIE). FASB ASC Topic 810, “Consolidation,” amends the
guidance governing the determination of whether an enterprise is the primary
beneficiary of a VIE, and is, therefore, required to consolidate an entity, by
requiring a qualitative analysis rather than a quantitative analysis. The
qualitative analysis will include, among other things, consideration of who has
the power to direct the activities of the entity that most significantly impact
the entity’s economic performance and who has the obligation to absorb losses or
the right to receive benefits of the VIE that could potentially be significant
to the VIE. This standard also requires continuous reassessments of whether an
enterprise is the primary beneficiary of a VIE. FASB ASC 810 also requires
enhanced disclosures about an enterprise’s involvement with a VIE. Topic 810 is
effective as of the beginning of interim and annual reporting periods that begin
after November 15, 2009. This will not have an impact on the Company’s financial
position, results of operations or cash flows.
In June
2009, the FASB issued Financial Accounting Standards Codification No. 860 -
Transfers and Servicing. FASB ASC No. 860 improves the relevance,
representational faithfulness, and comparability of the information that a
reporting entity provides in its financial statements about a transfer of
financial assets; the effects of a transfer on its financial position, financial
performance, and cash flows; and a transferor's continuing involvement, if any,
in transferred financial assets. FASB ASC No. 860 is effective as of the
beginning of each reporting entity's first annual reporting period that begins
after November 15, 2009, for interim periods within that first annual reporting
period and for interim and annual reporting periods thereafter. This will not
have an impact on the Company’s financial position, results of operations or
cash flows.
9
Max
Cash Media, Inc.
(A
Development Stage Company)
Notes
to Condensed Financial Statements
as
of December 31, 2009
(Unaudited)
NOTE
2 STOCKHOLDERS’
EQUITY
(A) Common Stock Issued for
Cash
During
October 2007, the Company issued 1,115,000 shares of its common stock, $0.001
par value per share (the “Common Stock”), for $111,500
($0.10/share).
During
October 2007, the Company collected $25,500 ($0.10/share) for the sale of
255,000 shares of Common Stock made during the period from July 9, 2007
(inception) through September 30, 2007.
(B) In-Kind
Contribution
Effective
December 31, 2008, a related party forgave accounts payable in the amount of
$5,000 for services provided. The payable was reclassified to
additional paid in capital as an in kind contribution of services (See Notes 3,
6 and 7).
For the
three months ended December 31, 2009, a shareholder of the Company contributed
services having a fair value of $650 (See Note 7).
For the
year ended September 30, 2009, a shareholder of the Company contributed services
having a fair value of $2,600 (See Note 7).
For the
year ended September 30, 2008, a shareholder of the Company contributed services
having a fair value of $2,600 (See Note 7).
For the
year ended September 30, 2007, a shareholder of the Company contributed services
having a fair value of $593 (See Note 7).
(C) Stock Issued for
Services
On July
9, 2007, the Company issued 5,000,000 shares of Common Stock to its founder
having a fair value of $5,000 ($0.001/share) in exchange for services provided
(See Note 7).
NOTE
3 FORGIVENESS OF A
PAYABLE
Effective
December 31, 2008, a related party forgave accounts payable in the amount of
$5,000 for services provided. The payable was reclassified to
additional paid in capital as an in kind contribution of services (See Notes
2(B), 6 and 7).
10
Max
Cash Media, Inc.
(A
Development Stage Company)
Notes
to Condensed Financial Statements
as
of December 31, 2009
(Unaudited)
NOTE
4 LOAN
PAYABLE
During
2009, the Company owed $4,585 to an unrelated third party for expenses paid on
behalf of the Company. The loan was repaid in full during August
2009.
NOTE
5 CONVERTIBLE NOTE
PAYABLE
On July
29, 2009, the Company issued a convertible promissory note in the amount of
$50,000 due January 28, 2011 and bearing interest at a rate of 9% per
annum. All debt can be converted into shares at a conversion price to
be mutually determined by the Company and the holder of the note.
NOTE 6
COMMITMENTS
On
October 15, 2007, the Company entered into a consulting agreement with a related
party to receive administrative and other miscellaneous services. The
Company is required to pay $7,500 a month. The agreement was to
remain in effect unless either party desired to cancel the
agreement. This agreement has been terminated as of July 31,
2008. In addition, the payment due for the month of July has been
reduced to $5,000 by mutual agreement of both parties. Effective
December 31, 2008, the amount of $5,000 was forgiven (See Notes 2(B) and 3 and
7).
NOTE
7 RELATED PARTY
TRANSACTIONS
For the
three months ended December 31, 2009, a shareholder of the Company contributed
services having a fair value of $650 (See Note 2(B)).
For the
year ended September 30, 2009, a shareholder of the Company contributed services
having a fair value of $2,600 (See Note 2(B)).
For the
year ended September 30, 2008, a shareholder of the Company contributed services
having a fair value of $2,600 (See Note 2(B)).
Effective
December 31, 2008, a related party forgave accounts payable in the amount of
$5,000 for services provided. The payable was reclassified to
additional paid in capital as an in kind contribution of services (See Notes
2(B), 3 and 6).
For the
year ended September 30, 2007, the Company received $1,100 from a principal
stockholder. Pursuant to the terms of the loan, the loan is non interest
bearing, unsecured and due on demand. The loan was repaid on October
23, 2007.
For the
year ended September 30, 2007, a shareholder of the Company contributed services
having a fair value of $593 (See Note 2(B)).
On July
9, 2007, the Company issued 5,000,000 shares of Common Stock to its founder
having a fair value of $5,000 ($0.001/share) in exchange for services provided
(See Note 2 (B)).
11
Max
Cash Media, Inc.
(A
Development Stage Company)
Notes
to Condensed Financial Statements
as
of December 31, 2009
(Unaudited)
NOTE
8 GOING
CONCERN
As
reflected in the accompanying financial statements, the Company is in the
development stage and has accumulated losses of $223,018 since
inception. The Company also has a negative cash flow from operations
during this same period of $169,887. This raises substantial doubt
about its ability to continue as a going concern. The ability of the
Company to continue as a going concern is dependent on the Company’s ability to
raise additional capital and implement its business plan. The
financial statements do not include any adjustments that might be necessary if
the Company is unable to continue as a going concern.
Management
believes that actions presently being taken to obtain additional funding and
implement its strategic plans provide the opportunity for the Company to
continue as a going concern.
NOTE
9 SUBSEQUENT
EVENT
In
preparing these financial statements, the Company has evaluated events and
transactions for potential recognition or disclosure through February 19, 2010,
the date the financial statements were issued.
12
ITEM
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
Statement
Regarding Forward-Looking Information
This
report contains forward-looking statements. All statements other than statements
of historical facts included in this Quarterly Report on Form 10-Q, including
without limitation, statements in this Management’s Discussion and Analysis of
Financial Condition and Results of Operations regarding our financial position,
estimated working capital, business strategy, the plans and objectives of our
management for future operations and those statements preceded by, followed by
or that otherwise include the words “believe,” “expects,” “anticipates,”
“intends,” “estimates,” “projects,” “target,” “goal,” “plans,” “objective,”
“should,” or similar expressions or variations on such expressions are
forward-looking statements. We can give no assurances that the assumptions upon
which the forward-looking statements are based will prove to be correct. Because
forward-looking statements are subject to risks and uncertainties, actual
results may differ materially from those expressed or implied by the
forward-looking statements.
Actual
operations and results may materially differ from present plans and projections
due to changes in economic conditions, new business opportunities, changed
business conditions, and other developments. Other factors that could cause
results to differ materially are described in our filings with the
Securities and Exchange Commission.
The
following are factors that could cause actual results or events to differ
materially from those anticipated, and include, but are not limited to general
economic, financial and business conditions, changes in and compliance with
governmental laws and regulations, including various state and federal
environmental regulations, our ability to obtain additional financing from
outside investors and/or bank and mezzanine lenders; and our ability to generate
sufficient revenues to cover operating losses and position us to achieve
positive cash flow.
Readers
are cautioned not to place undue reliance on the forward-looking statements
contained herein, which speak only as of the date hereof. We believe the
information contained in this Form 10-Q to be accurate as of the date hereof.
Changes may occur after that date. We will not update that information except as
required by law in the normal course of its public disclosure
practices.
Additionally,
the following discussion regarding our financial condition and results of
operations should be read in conjunction with the financial statements and
accompanying notes included in Item 1 of Part I of this Quarterly Report on Form
10-Q and with the Management’s Discussion and Analysis of Financial Condition
and Results of Operations and the financial statements and accompanying notes
included our Annual Report on Form 10-K for the fiscal year ended September 30,
2009, filed with the Securities and Exchange Commission.
Limited
Operating History
We have
not begun operations, and we require outside capital to implement our business
model.
We have
have not previously demonstrated that we will be able to expand our business
through increased investment marketing. We cannot guarantee that the expansion
efforts described in this report will be successful. Our business is
subject to risks inherent in growing an enterprise, including limited capital
resources and possible rejection of our acquired properties.
13
Future
financing may not be available to us on acceptable terms. If
financing is not available on satisfactory terms, we may be unable to continue
expanding our operations. Equity financing will result in a dilution
to existing shareholders.
Results
of Operations
We
incurred an operating loss of $36,675 for the three month period ended December
31, 2009, compared to an operating loss of $11,379 for the three month period
ended December 31, 2008. The increase in operating loss for the three
month period ended December 31, 2009, was mainly due to increased
professional fees related to our financial reporting
obligations. We incurred an operating loss of
$221,974 for the period from July 9, 2007 (date of inception) through December
31, 2009, and have not generated any operating revenues since
inception. We anticipate that we will not generate any operating
revenues until we are able to raise additional capital for funding our
operations.
Net loss
for the three months ended December 31, 2009, was $37,807. Expenses
in that period were comprised of $35,013 in professional fees, $1,662 in general
and administrative expenses and $1,132 in net interest expense. Interest
expense related to the convertible promissory note we issued on July 29, 2009,
in the amount of $50,000, which is due January 28, 2011, and bears interest at a
rate of 9% per annum. The note can be converted into shares of our
Common Stock at a conversion price to be mutually determined by the Company and
the holder of the note.
Net loss
since inception through December 31, 2009, was $223,018. Expenses in
that period were comprised of $190,847 in professional fees, $31,127 in general
and administrative expenses and $1,911 in interest
expense, partially offset by $867 in interest income. Interest
expense related to the convertible promissory note described above.
As of
December 31, 2009, we had total assets of $17,113, consisting of
cash. As of September 30, 2009, we had total assets of $22,545,
consisting of cash.
We
believe that we will need additional funding to satisfy our cash requirements
for the next twelve months. Completion of our plan of operation is subject to
attaining adequate revenue. We cannot assure investors that additional financing
will be available. In the absence of additional financing, we may be unable to
proceed with our plan of operations.
Revenues
We have
not generated any revenues from operations for the period from July 9, 2007
(date of inception) through December 31, 2009.
Operating
Loss
The main
components of our operating losses during the three month periods ended December
31, 2009 and 2008, and for the period from July 9, 2007 (date of inception)
through December 31, 2009, were as follows:
14
Three Months Ended
December 31,
|
For the Period
from
July 9, 2007
(inception)
through
December 31,
|
|||||||||||
2009
|
2008
|
2009
|
||||||||||
Professional
fees
|
$ | 35,013 | $ | 7,320 | $ | 190,847 | ||||||
General
and administrative expenses
|
1,662 | 4,059 | 31,127 | |||||||||
Interest
expense
|
1,134 | - | 1,911 |
Interest
income was $2 for the three months ended December 31, 2009, as compared to
interest income of $0 for the three months ended December 31,
2008. The increase in interest income for the three months ended
December 31, 2009, was mainly due to higher
average cash balances held in bank deposits during the current year
period. Interest income for the period from July 9, 2007 (date of
inception) through December 31, 2009, amounted to $867.
Liquidity
and Capital Resources
We will
need substantial amounts of capital to implement our planned business
strategies. Given the currently unsettled state of the capital
markets and credit markets, there is no assurance that we will be able to raise
the amount of capital that we seek for potential acquisitions or for operating
expenses. If we are unable to raise the necessary capital at the
times we require such funding, we may have to materially change our business
plan, delaying implementation of aspects of our business plan or curtailing or
abandoning our business plan. Investing in us is a speculative
investment and investors may lose all of their investment.
Since our
inception, we have been financed primarily by loans and private placements of
our Common Stock. We raised $25,500 from July 9, 2007 (inception)
through September 30, 2007, and $111,500 in October 2007 from sales of shares of
Common Stock. In July 2009, we issued a convertible promissory note
in the principal amount of $50,000. The total net funds raised of
$187,000 since inception through December 31, 2009, have been used principally
as follows: (a) $13,206 in general and
administrative expenses and (b) $156,681 in professional fees
in connection with the filing of a registration statement and our financial
reporting requirements. At December 31, 2009, we had available cash
balances of $17,113, which are held in interest bearing bank
accounts.
We
anticipate that our operational and general and administrative expenses for the
next 12 months will total approximately $40,000. We do not anticipate
the purchase or sale of any significant equipment. We also do not expect any
significant additions to the number of employees. The foregoing represents our
best estimate of our cash needs based on current planning and business
conditions. The exact allocation, purposes and timing of any monies raised in
subsequent private financings may vary significantly depending upon the exact
amount of funds raised and our progress with the execution of our business plan.
We anticipate that depending on market conditions and our plan of operations, we
may incur operating losses in the foreseeable future. Therefore, our auditors
have raised substantial doubt about our ability to continue as a going
concern.
As
reflected in the accompanying financial statements, we are in the development
stage with no operations, used cash in operations of $169,887 from inception,
and have a net loss since inception of $223,018. This raises substantial doubt
about our ability to continue as a going concern. Our ability to continue as a
going concern is dependent on our ability to raise additional capital and
implement its business plan. The financial statements do not include any
adjustments that might be necessary if we are unable to continue as a going
concern.
15
Management
believes that actions presently being taken to obtain additional funding and
implement our strategic plans provide the opportunity for us to continue as a
going concern. However at this time, we do not believe that our
current cash is insufficient for our operations for the next
12 months.
Net Cash Used in Operating
Activities
Cash
utilized in operating activities was $5,432 for the three months ended December
31, 2009, as compared to $2,515 for the three months ended December 31,
2008. The increase was primarily due to increase
in professional fees. During the period from July 9,
2007 (date of inception) through December 31, 2009, we used net cash in
operating activities of $169,887, mainly for professional fees and general and
administrative expenses as discussed and quantified above.
Net Cash Provided by
Financing Activities
We
generated no cash from financing activities in either the three months ended
December 31, 2009, or the three months ended December 31,
2008. During the period from July 9, 2007 (date of inception) through
December 31, 2009, we received net cash provided by financing activities of
$187,000 from private placements and issuance of a promissory note.
Critical Accounting
Policies
Our
financial statements and related public financial information are based on the
application of accounting principles generally accepted in the United States
(“GAAP”). GAAP requires the use of estimates; assumptions, judgments and
subjective interpretations of accounting principles that have an impact on the
assets, liabilities, revenues and expense amounts reported. These estimates can
also affect supplemental information contained in our external disclosures
including information regarding contingencies, risk and financial condition. We
believe our use of estimates and underlying accounting assumptions adhere to
GAAP and are consistently and conservatively applied. We base our estimates on
historical experience and on various other assumptions that we believe to be
reasonable under the circumstances. Actual results may differ materially from
these estimates under different assumptions or conditions. We continue to
monitor significant estimates made during the preparation of our financial
statements.
Our
significant accounting policies are summarized in Note 1 of our financial
statements. While all these significant accounting policies impact its financial
condition and results of operations, we view certain of these policies as
critical. Policies determined to be critical are those policies that have the
most significant impact on our financial statements and require management to
use a greater degree of judgment and estimates. Actual results may differ from
those estimates. Our management believes that given current facts and
circumstances, it is unlikely that applying any other reasonable judgments or
estimate methodologies would cause effect on our results of operations,
financial position or liquidity for the periods presented in this
report.
16
Recent Accounting
Announcements
In June
2009, the FASB issued ASC 105 Accounting Standards
Codification TM and the Hierarchy of Generally
Accepted Accounting Principles. The FASB Accounting Standards
Codification TM (the
“Codification”) has become the source of authoritative accounting principles
recognized by the FASB to be applied by nongovernmental entities in the
preparation of financial statements in accordance with Generally Accepted
Accounting Principles (“GAAP”). All existing accounting standard documents are
superseded by the Codification and any accounting literature not included in the
Codification will not be authoritative. Rules and interpretive releases of the
SEC issued under the authority of federal securities laws, however, will
continue to be the source of authoritative generally accepted accounting
principles for SEC registrants. Effective September 30, 2009, all references
made to GAAP in our consolidated financial statements will include references to
the new Codification. The Codification does not change or alter existing GAAP
and, therefore, will not have an impact on our financial position, results of
operations or cash flows.
In June
2009, the FASB issued changes to the consolidation guidance applicable to a
variable interest entity (VIE). FASB ASC Topic 810, "Consolidation," amends the
guidance governing the determination of whether an enterprise is the primary
beneficiary of a VIE, and is, therefore, required to consolidate an entity, by
requiring a qualitative analysis rather than a quantitative analysis. The
qualitative analysis will include, among other things, consideration of who has
the power to direct the activities of the entity that most significantly impact
the entity's economic performance and who has the obligation to absorb losses or
the right to receive benefits of the VIE that could potentially be significant
to the VIE. This standard also requires continuous reassessments of whether an
enterprise is the primary beneficiary of a VIE. FASB ASC 810 also requires
enhanced disclosures about an enterprise's involvement with a VIE. Topic 810 is
effective as of the beginning of interim and annual reporting periods that begin
after November 15, 2009. This will not have an impact on the Company’s financial
position, results of operations or cash flows.
In June
2009, the FASB issued Financial Accounting Standards Codification No. 860 -
Transfers and Servicing. FASB ASC No. 860 improves the relevance,
representational faithfulness, and comparability of the information that a
reporting entity provides in its financial statements about a transfer of
financial assets; the effects of a transfer on its financial position, financial
performance, and cash flows; and a transferor's continuing involvement, if any,
in transferred financial assets. FASB ASC No. 860 is effective as of the
beginning of each reporting entity's first annual reporting period that begins
after November 15, 2009, for interim periods within that first annual reporting
period and for interim and annual reporting periods thereafter. This will not
have an impact on the Company’s financial position, results of operations or
cash flows.
Off Balance Sheet
Transactions
None.
Item
3.
|
Quantitative
and Qualitative Disclosures about Market
Risk
|
Not
applicable.
Item
4T.
|
Controls
and Procedures
|
Pursuant
to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”),
the Company carried out an evaluation, with the participation of the Company’s
management, including the Company’s Chief Executive Officer (“CEO”) and
Chief Financial Officer (“CFO”) (the Company’s principal financial and
accounting officer), of the effectiveness of the Company’s disclosure controls
and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of
the end of the period covered by this report. Based upon that evaluation, the
Company’s CEO and CFO concluded that the Company’s disclosure controls and
procedures are effective to ensure that information required to be disclosed by
the Company in the reports that the Company files or submits under the Exchange
Act, is recorded, processed, summarized and reported, within the time
periods specified in the SEC’s rules and forms, and that such information is
accumulated and communicated to the Company’s management, including the
Company’s CEO and CFO, as appropriate, to allow timely decisions regarding
required disclosure.
17
(a)
Evaluation of
Disclosure Controls. Noah Levinson, our Chief Executive Officer and
Chief Financial Officer, evaluated the effectiveness of our disclosure controls
and procedures as of the end of our quarter ended December 31, 2009, pursuant to
Rule 13a-15(b) of the Exchange Act. Disclosure controls and procedures are
controls and other procedures that are designed to ensure that information
required to be disclosed by us in the reports that we file or submit under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the SEC’s rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed by us in the reports that we
file under the Exchange Act is accumulated and communicated to our management,
as appropriate to allow timely decisions regarding required disclosure. Based on
his evaluation, Ms. Levinson concluded that our disclosure controls and
procedures were effective as of December 31, 2009.
Our
management, including our Chief Executive Officer and Chief Financial Officer
(Principal Financial Officer), does not expect that our disclosure controls and
procedures or our internal controls will prevent all errors and all fraud. A
control system, no matter how well conceived and operated, can provide only
reasonable, not absolute, assurance that the objectives of the control system
are met. Further, the design of a control system must reflect the fact that
there are resource constraints and the benefits of controls must be considered
relative to their costs. 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, but are not limited to, 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 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,
controls may become inadequate because of changes in conditions, or the degree
of compliance with the policies or procedures may deteriorate. Because of the
inherent limitations in a cost-effective control system, misstatements due to
error or fraud may occur and not be detected.
(b)
Changes in internal
control over financial reporting. There have been no changes in our
internal control over financial reporting that occurred during the last fiscal
quarter that has materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting. Our management team will
continue to evaluate our internal control over financial reporting in
2010.
PART
II – OTHER INFORMATION
Item
1.
|
Legal
Proceedings
|
Currently
we are not aware of any litigation pending or threatened by or against the
Company.
18
Item
1A.
|
Risk
Factors
|
Not
applicable.
Item
2.
|
Unregistered
Sales of Equity Securities and Use of
Proceeds
|
We issued
no equity securities during the quarter ended December 31, 2009.
Item
3.
|
Defaults
upon Senior Securities
|
None
Item
4.
|
Submission
of Matters to a Vote of Security
Holders
|
None.
Item
5.
|
Other
Information
|
None
Item
6.
|
Exhibits
|
31.1
|
Certification
of Principal Executive Officer and Financial Officer pursuant to Section
302 of the Sarbanes Oxley Act of
2002
|
32.1
|
Certification
of Chief Executive Officer and Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002
|
19
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.
Date:
February 19, 2010
|
MAX
CASH MEDIA, INC.
|
||
By:
|
/s/ Noah Levinson
|
||
Noah
Levinson, Chief Executive Officer and
Chief
Financial Officer
|