Attached files
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended: December 31, 2010
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
Commission File Number: 333-151485
THEWEBDIGEST CORP.
------------------
(Exact Name of Registrant as Specified in Its Charter)
FLORIDA 26-2569043
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(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
7076 SPYGLASS AVENUE
PARKLAND, FL 33076
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(Address of principal executive office and zip code)
(954) 599-3672
--------------
(Registrant's telephone number, including area code)
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Securities Registered Pursuant to Section 12 (B) of the Act:
Title of Each Class Name of Each Exchange on Which Registered
------------------- -----------------------------------------
PREFERRED STOCK PAR VALUE $0.001 NONE
COMMON STOCK PAR VALUE $0.001 NONE
Securities Registered Pursuant to Section 12(G) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes |_| No |X|
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. Yes |_| No |X|
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 if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. |X|
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check
one):
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 Act). Yes | | No |X|
As of December 31, 2010, the aggregate market value of such shares held by
non-affiliates of the Registrant's common stock was approximately $10,000.
Shares of the Registrant's common stock held by each executive officer and
director have been excluded in that such persons may be deemed to be affiliates
of the Registrant. This determination of affiliate status is not necessarily a
conclusive determination for other purposes.
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
CLASS OF STOCK SHARES AS OF MARCH 1, 2011
------------------------------- --------------------------
Preferred Stock, $0.001 par value 0
Common Stock, $0.001 par value 10,000,000
THEWEBDIGEST CORP.
FORM 10-K
For the Fiscal Period Ended December 31, 2010
TABLE OF CONTENTS
Page
----
Cautionary Note Regarding Forward-Looking Statements ....................... 3
Availability Of Information ................................................ 4
PART I
Item 1. Business .................................................... 5
Item 1A. Risk Factors ................................................ 9
Item 1B. Unresolved Staff Comments ................................... 13
Item 2. Properties .................................................. 14
Item 3. Legal Proceedings ........................................... 14
Item 4. Submission Of Matters To A Vote Of Security Holders ......... 14
PART II
Item 5. Market For Registrant's Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities ......... 14
Item 6. Selected Financial Data ..................................... 15
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations Results of Operations Year Ended
December 31, 2010 vs. Year Ended December 31, 2009 ........ 16
Item 7A. Quantitative and Qualitative Disclosures About Market Risk .. 19
Item 8. Financial Statements and Supplementary Data ................. 19
Item 9. Changes In and Disagreements With Accountants on Accounting
and Financial Disclosure .................................. 20
Item 9A. Controls and Procedures ..................................... 20
Item 9B. Other Information ........................................... 21
PART III
Item 10. Directors, Executive Officers and Corporate Governance ...... 21
Item 11. Executive Compensation ...................................... 23
Item 12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters ................. 24
Item 13. Certain Relationships and Related Transactions, and Director
Independence ............................................... 25
Item 14. Principal Accounting Fees and Services ...................... 25
PART IV
Item 15. Exhibits - Financial Statement Schedules .................... 26
OTHER
Signatures ............................................................ 27
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this Annual Report on Form 10-K may constitute
"forward-looking" statements as defined in Section 27A of the Securities Act of
1933 (the "Securities Act"), Section 21E of the Securities Exchange Act of 1934
(the "Exchange Act"), the Private Securities Litigation Reform Act of 1995 (the
"PSLRA") or in releases made by the Securities and Exchange Commission ("SEC"),
all as may be amended from time to time. Forward-looking statements include, but
are not limited to, statements that express our intentions, beliefs,
expectations, strategies, predictions or any other statements relating to our
future activities or other future events or conditions. These statements are
based on current expectations, estimates and projections about our business
based, in part, on assumptions made by management. Forward-looking statements
can be identified by, among other things, the use of forward-looking language,
such as the words "plan," "believe," "expect," "anticipate," "intend,"
"estimate," "project," "may," "will," "would," "could," "should," "seeks," or
"scheduled to," or other similar words, or the negative of these terms or other
variations of these terms or comparable language, or by discussion of strategy
or intentions. These statements are not guarantees of future performance and
involve risks, uncertainties and assumptions that are difficult to predict.
Therefore, actual outcomes and results may, and are likely to, differ materially
from what is expressed or forecasted in the forward-looking statements due to
numerous factors, including those described above and those risks discussed from
time to time in this Annual Report on Form 10-K, including the risks described
under "Risk Factors," and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in this report and in other documents which
we file with the Securities and Exchange Commission. In addition, such
statements could be affected by risks and uncertainties related to our ability
to raise any financing which we may require for our operations, competition,
government regulations and requirements, pricing and development difficulties,
our ability to make acquisitions and successfully integrate those acquisitions
with our business, as well as general industry and market conditions and growth
rates, and general economic conditions. Any forward-looking statements speak
only as of the date on which they are made, and we do not undertake any
obligation to update any forward-looking statement to reflect events or
circumstances after the date of this report.
This Form 10-K contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. These statements are therefore entitled to the protection of the safe
harbor provisions of these laws. These forward-looking statements involve risks
and uncertainties, and relate to future events or our future financial or
operating performance. These statements include, but are not limited to,
statements concerning:
o the anticipated benefits and risks of our business relationships;
o our ability to attract retail and business customers;
o the anticipated benefits and risks associated with our business strategy;
o our future operating results;
o the anticipated size or trends of the market segments in which we compete
and the anticipated competition in those markets;
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o potential government regulation;
o our future capital requirements and our ability to satisfy our capital
needs;
o the potential for additional issuances of our securities;
o our plans to devote substantial resources to our sales and marketing
teams;
o the possibility of future acquisitions of businesses, products or
technologies;
o our belief that we can attract customers in a cost-efficient manner;
o our belief that current or future litigation will likely not have a
material adverse effect on our business;
o the ability of our online marketing campaigns to be a cost-effective
method of attracting customers;
o our belief that we can internally develop cost-effective branding
campaigns;
o the results of upgrades to our infrastructure and the likelihood that
additional future upgrades can be implemented without disruption of our
business;
o our belief that we can maintain or improve upon customer service levels
that we and our customers consider acceptable;
o our belief that our information technology infrastructure can and will
support our operations and will not suffer significant downtime;
o statements about our community site business and its anticipated
functionality;
o our belief that we can maintain inventory levels at appropriate levels
despite the seasonal nature of our business; and,
o our belief that we can successfully offer and sell a constantly changing
mix of products and services.
AVAILABILITY OF INFORMATION
You may read and copy any materials the Company files with the SEC at the SEC's
Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549.
Copies of such materials also can be obtained free of charge at the SEC's
website, www.sec.gov, or by mail from the Public Reference Room of the SEC, at
prescribed rates. Please call the SEC at 1-800-SEC-0330 for further information
on the operation of the Public Reference Room. The SEC maintains an Internet
site that contains reports, proxy and information statements, and other
information regarding issuers that file electronically with the SEC. This
information can be accessed at the web site http://www.sec.gov.
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PART I
ITEM 1. BUSINESS
BACKGROUND AND CORPORATE INFORMATION
------------------------------------
INTRODUCTION
TheWebDigest Corp. is a development stage company, incorporated in the state of
Florida on September 17, 2007 to establish internet informational portals. We
intend to develop and market our web portals and sell sponsorship rights through
various marketing and advertising procurement channels throughout the United
States and foreign territories. The Company business plan provides for each web
portal to have sponsors that pay an annual fee (to be established as our
marketing program develops) for a rotating sponsorship banner displayed on our
web portal including a hyperlink to the sponsor's web site. Our individual web
portals, as developed, will contain information specific to the subject matter
as described in each web domain. The sponsorships obtained by us will have a
direct relationship to the specific subject matter that they sponsor.
We commenced our initial public offering on August 12, 2009, pursuant to that
certain Registration Statement on Form S-1 (Commission File No. 333-151485),
which was declared effective by the Securities and Exchange Commission on that
date. We registered 3,000,000 shares of Common Stock for sale by the Company for
an aggregate offering price of $30,000. We sold 1,000,000 shares of Common Stock
in the offering. The offering provided proceeds to us in the amount of $10,000.
As of December 31, 2010, we had an accumulated deficit of ($51,911). Our
auditors have raised substantial doubt as to our ability to continue as a going
concern, as expressed in its opinion on our financial statements included in
this report. Our ability to continue as a going concern is dependent upon our
ability to generate profitable operations in the future and/or to obtain the
necessary financing to meet our obligations and repay our liabilities arising
from normal business operations when they come due. There can be no assurance
that we will operate at a profit or such additional financing will be available,
or if available, can be obtained on satisfactory terms.
Our principal executive office is located at 7076 Spyglass Avenue, Parkland, FL
33076. Our telephone number is (954) 599-3672.
We have not generated any revenues to date and our activities have been limited
to developing the Business Plan. We will not have the necessary capital to
develop our Business Plan until we are able to secure financing. There can be no
assurance that such financing will be available on suitable terms. See
"Management's Discussion and Analysis Plan of Operations" and "Liquidity and
Capital Resources." We have no revenues, have achieved losses since inception,
have no operations, have been issued a going concern opinion and rely upon the
sale of our securities to funds operations.
The following description of our business is intended to provide an
understanding of our Company and the direction of our strategy.
STRATEGY AND SERVICE
We have established that there is a market for specific web sites that focus on
a defined subject matter. We intend to develop and market our web portals and
sell sponsorship rights through various marketing and advertising procurement
channels throughout the
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United States and foreign territories. The Company business plan provides for
each web portal to have sponsors that pay an annual fee (to be established as
our marketing program develops) for a rotating sponsorship banner displayed on
our web portal including a hyperlink to the sponsor's web site. Our individual
web portals, as developed, contain information specific to the subject matter as
described in each web domain. The sponsorships obtained by us will have a direct
relationship to the specific subject matter that they sponsor. For example, if
our web portal is the www.thediabeticdigest.com, the sponsor will have a direct
correlation to diabetes and accordingly, the web portal will have informational
data specifically for the same subject matter - mainly diabetes. Emphasis will
be placed on the following types of subjects to develop each web portal on a
specific content matter that directly refers to the web domain name (for
example. Diabetes - www.TheDiabeticDigest.com; arthritis -
www.thearthritisdigest.com; vitamins--www.thevitamindigest.com; podiatry -
www.thepodiatrydigest.com. etc.) These are just a few of the intended domain
names in our line of offerings to be developed.
THE MARKET
There is no way to accurately estimate the overall market for our domain
websites as they are developed.
MANAGEMENT
It is intended that our President will provide all the labor for the company
initially and then hiring either employees or using independent contractors as
sales growth demands.
The Company has entered into an Agreement with an independent contractor to
develop, construct our web portals and provide copyright approved content for
our initial data websites. Since we are not creating original content, we are
gathering content from independent sources including the Library of Congress,
magazines and various online publications for our web portals. When we obtain
content from all sources, it is our responsibility to have the proper
permissions for our web portals. When we display this informational content on
our specific web sites, we will obtain permission and in some cases, copyright
approval. We will be using content that is both copyright-free and copyright
approved.
SALES AND MARKETING
We intend to hire independent contractors to do the website marketing. There are
several companies readily available to assist in our development of our web
portals and we believe we can do this in an economical and effective manner.
ADVERTISING
Advertising will be done primarily through internet search engines and through
independent contractors. There are independent entities that have effective
experience in the utilization of pay per click advertising through the internet
process. Additionally there are methods of improving "web presence" on search
engines by means without the need for pay per click. Both methods will be used
to attempt to establish our web site (www.giftcarddigest.com)as a credible web
site to attract members for our program.
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COMPETITION
There are many competitors for our websites and products. We believe the most
effective way to be successful against this competition is a combination of
quality website content and exceptional customer service. Our experience tells
us that there are many companies selling inferior programs and very few
companies willing to truly put their stamp on customer service. We intend to
make ourselves available by phone and email to customers on a personal level
Inquiries will typically be responded to within minutes.
STAFFING
As of March 1, 2011, TheWebDigest Corp. has no permanent staff other than its
sole officer and director, Steven Adelstein. Steven Adelstein has the
flexibility to work on TheWebDigest Corp. up to 15 hours per week and is
prepared to devote more time to our operations as may be required.
EMPLOYEES AND EMPLOYMENT AGREEMENTS
At present, TheWebDigest Corp. has no employees other than its current sole
officer and director. There are no employment agreements in existence. The
company presently does not have, pension, health, annuity, insurance, stock
options, profit sharing, or similar benefit plans; however, the company may
adopt plans in the future.
During the initial implementation of our marketing strategy, the company intends
to hire independent consultants to develop and market its products, rather than
hire full time development, consulting, marketing and administrative employees.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
This section of the filing of the Form 10-K for the period ended December 31,
2010 includes a number of forward-looking statements that reflect our current
views with respect to future events and financial performance. Forward-looking
statements are often identified by words like: "believe", "expect", "estimate",
"anticipate", "intend", "project" and similar expressions, or words which, by
their nature, refer to future events. You should not place undue certainty on
these forward-looking statements, which apply only as of the date of this
prospectus. These forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from
historical results or our predictions.
We are a development stage company and have not yet generated or realized any
revenues from business operations. Our auditors have issued a going concern
opinion. This means there is substantial doubt that we can continue as an
on-going business for the next twelve (12) months unless we obtain additional
capital to pay our bills. This is because we have not generated any revenues and
no revenues are anticipated until we begin marketing our products to customers.
Accordingly, we must raise cash from sources other than revenues generated such
as from the proceeds of loans, sale of common shares and advances from related
parties.
From inception (September 17, 2007) to December 31, 2010, the company's business
operations have primarily been focused on developing our business plan and
obtaining market research.
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LIMITED OPERATING HISTORY; NEED FOR ADDITIONAL CAPITAL
There is no historical financial information about us upon which to base an
evaluation of our performance. TheWebDigest Corp. was incorporated in the State
of Florida on September 17, 2007; we are a development stage company attempting
to enter into the internet sales market and prescription drug database industry.
We have not generated any revenues from our operations. We cannot guarantee we
will be successful in our business operations. Our business is subject to risks
inherent in the establishment of a new business enterprise, including the
financial risks associated with the limited capital resources currently
available to us for the implementation of our business strategies. (See "Risk
Factors"). To become profitable and competitive, we must develop the business,
marketing plan, and execute the plans.
Our officers and directors undertake to provide us with initial operating and
loan capital to sustain our business plan over the next twelve (12) month period
partially through advances from related parties, sale of securities and we will
seek alternative financing through means such as borrowings from institutions or
private individuals.
PLAN OF OPERATION
Since inception (September 17, 2007) to December 31, 2010, TheWebDigest Corp.
has spent a total of $51,911 on the start-up development costs and we have not
generated any revenue from business operations.
The company incurred expenditures of $23,269 for legal and accounting and
services including the preparation of audited financial statements and tax
returns. The company also had expenditures of $28,642 for general administrative
costs, independent consultants.
Since inception, the majority of the company's time has been spent refining its
business plan, marketing, conducting industry research, and preparing for
additional financing and funding of operations.
OUR CHALLENGES
Our ability to successfully operate our business and achieve our goals and
strategies is subject to numerous challenges and risks as discussed more fully
in the section titled "Risk Factors," including for example:
o any failure to expand our operations and web presence to sufficiently meet
our customers' demands and our ability to attract new clients;
o any inability to effectively manage rapid growth and accurately project
market demand for our product offerings;
o risks associated with future investments or acquisitions;
o economic, political, regulatory, legal and foreign exchange risks
associated with web-based enterprises;
o any loss of key members of our senior management; and,
o unexpected changes in economic situations or legal environment.
You should read and consider the information set forth in "Risk Factors" and all
other information set forth in this filing.
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SUMMARY FINANCIAL INFORMATION
The following table sets forth a summary of the financial data for TheWebDigest
Corp. for the period ended December 31, 2010 and 2009. This information should
be read in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and our financial statements and related
notes appearing elsewhere in this filing.
12 Months Ended 12 Months Ended
December 31, December 31,
2010 2009
--------------- ---------------
Revenues ................................... $ -- $ --
Operating expenses ......................... 13,100 25,900
Other income/(expense) ..................... (0) (0)
Net loss before taxes ...................... (13,100) (25,900)
Income taxes ............................... -- --
Net (loss) ................................. (13,100) (25,900)
Loss per share - basic and diluted ......... ($.001) ($.003)
As to Balance Sheet as of
---------------------------------
December 31, December 31,
2010 2009
--------------- ---------------
Working capital (deficit) .................. $ (32,911) $ (19,811)
Current assets ............................. 0 0
Total assets ............................... 0 0
Current liabilities ........................ 32,911 19,811
Total liabilities .......................... 32,911 19,811
TOTAL STOCKHOLDERS' EQUITY (Deficit)........ (32,911) (19,811)
OUR ADDRESSES
The address of the Company's principal executive office is 7076 Spyglass Avenue,
Parkland, FL 33076, and our telephone number is (954) 599-3672. We maintain a
website at www.thewebdigest.com that is currently under construction and will
contain information about us, but that information is not a part of this Annual
Report.
ITEM 1A. RISK FACTORS
The Company considers the following to be the material risks for an investor.
TheWebDigest Corp. should be viewed as a high-risk investment and speculative in
nature. An investment in our common stock may result in a complete loss of the
invested amount. Please consider the following risk factors before deciding to
invest in our common stock.
THERE IS SUBSTANTIAL UNCERTAINTY ABOUT THE ABILITY OF THEWEBDIGEST CORP. TO
CONTINUE ITS OPERATIONS AS A GOING CONCERN - AUDITOR'S GOING CONCERN
In their audit report dated December 31, 2010; our auditors have expressed an
opinion that substantial doubt exists as to whether we can continue as an
ongoing business. Because our officers may be unwilling or unable to loan or
advance any additional capital to TheWebDigest Corp. we believe that if we do
not raise additional capital, we may be required to suspend or cease the
implementation of our business plans. As such we may have to cease operations.
Because the Company has been issued an opinion by its auditors that substantial
doubt exists as to whether it can continue as a going concern it may be more
difficult to attract investors, borrow funds or raise additional capital.
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SINCE THEWEBDIGEST CORP. ANTICIPATES OPERATING EXPENSES WILL INCREASE PRIOR
GENERATING SIGNIFICANT REVENUES, IT MAY NEVER ACHIEVE PROFITABILITY - RISKS
RELATED TO OUR FINANCIAL CONDITION
The Company anticipates an increase in its operating expenses, without realizing
any revenues from the sale of its products.
There is no history upon which to base any assumption as to the likelihood that
the Company will prove successful. We cannot provide investors with any
assurance that our products will attract customers; generate any operating
revenue or ever achieve profitable operations. If we are unable to address these
risks, there is a high probability that our business can fail, which will result
in the loss of your entire investment.
OUR BUSINESS WILL FAIL IF WE DO NOT OBTAIN ADEQUATE FINANCING, RESULTING IN THE
COMPLETE LOSS OF YOUR INVESTMENT
If we are not successful in earning revenue once we have started our sale
activities, we may require additional financing to sustain our business
operations. Currently, we do not have any arrangements for financing and can
provide no assurances to investors that we will be able to obtain any when
required. Obtaining additional financing would be subject to a number of
factors, including the Company's sales results. These factors may have an effect
on the timing, amount, terms or conditions of additional financing and make such
additional financing unavailable to us. See "Description of Business."
No assurance can be given that the Company will obtain access to capital markets
in the future or that adequate financing to satisfy the cash requirements of
implementing our business strategies will be available on acceptable terms. The
inability of the Company to gain access to capital markets or obtain acceptable
financing could have a material adverse effect upon the results of its
operations and its financial conditions.
AS OUR OFFICERS AND DIRECTORS HAVE OTHER OUTSIDE BUSINESS ACTIVITIES, THEY MAY
BE UNABLE TO DEVOTE A MAJORITY OF THEIR TIME TO THE COMPANY. AS A RESULT, THERE
MAY BE PERIODIC INTERRUPTIONS IN OUR OPERATIONS AND OUR BUSINESS COULD FAIL.
Our officers and directors have other outside business activities and are
devoting only approximately 10-15 hours per week to our operations. Our
operations may be sporadic and occur at times which are not convenient, which
may result in periodic interruptions or suspensions of our business plan. If the
demands of the company's business require the full time of our executive
officer, they are prepared to adjust their timetable in order to devote more
time to conducting our business operations. However, they may be unable to
devote sufficient time to the management of the company's business, which may
result in periodic interruptions in the implementation of the company's business
plans and operations. Such delays could have a significant negative effect on
the success of our business.
The company is entirely dependent on the efforts and abilities of its officers
and directors. The loss of our officers and directors could have a material
adverse effect on the business and its prospects. The company believes that all
commercially reasonable efforts have been made to minimize the risks attendant
the departure from service of our current officers and directors. However,
replacement personnel may be unavailable to us. Moreover, even if available,
replacement personnel may not enable the company to operate profitably.
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All decisions regarding the management of the company's affairs will be made
exclusively by its officers and directors. Purchasers of the offered shares may
not participate in the management of the company and, therefore, are dependent
upon the management abilities of the company's officers and directors. The only
assurance that the shareholders of the company (including purchasers of the
offered shares) have that the company's officers and directors will not abuse
their discretion in making decisions, with respect to its affairs and other
business decisions, is their fiduciary obligations and business integrity.
Accordingly, no person should purchase offered shares unless that person is
willing to entrust all aspects of management to the company's officers and
directors, or their successors.
The company's management may retain independent contractors to provide services
to the company. Those contractors have no fiduciary duty to the shareholders of
the company and may not perform as expected. The company does not maintain key
person life insurance on its officers and directors.
IF WE EXPAND OUR OPERATIONS AND FAIL TO MANAGE THE RESULTING GROWTH EFFECTIVELY,
OUR BUSINESS WILL BE HARMED.
Although we plan on researching our market carefully, we may be slow to achieve
profitability, or may not become profitable at all, which will result in losses.
There can be no assurance that we will succeed.
AS WE CURRENTLY HAVE NO MARKET FOR OUR SHARES, SHAREHOLDERS MAY BE UNABLE TO
SELL THEIR SHARES. EVEN IF A MARKET SHOULD DEVELOP, THE PRICE MAY BE VOLATILE
AND SHAREHOLDERS MAY LOSE THEIR ENTIRE INVESTMENT.
Further, even if a market develops, our common stock will be subject to price
fluctuations and volatility.
The company cannot apply directly to be quoted on the OTC Bulletin Board.
Additionally, the stock can be listed or traded only to the extent that there is
interest by broker/dealers in acting as a market maker in the company's stock.
Despite the company's best efforts, the company may not be able to convince any
broker/dealers to act as market-makers and make quotations on the OTC Bulletin
Board. It is the company's intent to contact potential market makers for the OTC
Bulletin Board after it has completed its primary offering.
IN THE EVENT THAT THE COMPANY'S SHARES ARE TRADED, THEY MAY TRADE UNDER $5.00
PER SHARE AND THUS WILL BE A PENNY STOCK. TRADING IN PENNY STOCKS HAS MANY
RESTRICTIONS AND THESE RESTRICTIONS COULD SEVERELY AFFECT THE PRICE AND
LIQUIDITY OF THE COMPANY'S SHARES.
In the event our shares are traded, and our stock trades below $5.00 per share
our stock would be known as a "penny stock" which is subject to various
regulations involving disclosures to be given to you prior to purchase of any
penny stock. The U.S. Securities and Exchange Commission (the "SEC") has adopted
regulations which generally define a "penny stock" to be any equity security
that has a market price of less than $5.00 per share, subject to certain
exceptions. Depending on market fluctuations, our common stock could be
considered to be a "penny stock". A penny stock is subject to rules that impose
additional sales practice requirements on broker/dealers who sell these
securities to persons other than established customers and accredited investors.
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For transactions covered by these rules, the broker-dealer must make a special
suitability determination for the purchase of these securities. In addition he
must receive the purchaser's written consent to the transaction prior to the
purchase. He must also provide certain written disclosures to the purchaser.
Consequently, the "penny stock" rules may restrict the ability of broker/dealers
to sell our securities, and may negatively affect the ability of holders of
shares of our common stock to resell them. These disclosures require you to
acknowledge you understand the risk associated with buying penny stocks and that
you can absorb the entire loss of your investment. Penny stocks are low priced
securities that do not have a very high trading volume. Consequently, the price
of the stock is oftentimes volatile and you may not be able to buy or sell the
stock when you want.
AS THE COMPANY HAS 100,000,000 AUTHORIZED COMMON SHARES AND 10,000,000 PREFERRED
SHARES AUTHORIZED, THE COMPANY'S MANAGEMENT COULD ISSUE ADDITIONAL SHARES
DILUTING THE COMPANY'S CURRENT SHAREHOLDERS' EQUITY.
The company has 100,000,000 authorized common shares of which only 10,000,000
are currently outstanding and will be issued and outstanding if all the shares
in this offering are sold. The company's management could, without the consent
of the company's existing shareholders issue substantially more shares causing a
large dilution in our current shareholders' equity position. Additionally, large
share issuances by the company would generally have a negative impact on our
share price. It is possible that due to additional share issuance you could lose
a substantial amount or all of your investment.
AS OUR COMPANY'S OFFICERS AND DIRECTORS CURRENTLY OWN MAJORITY OF THE
OUTSTANDING COMMON STOCK, INVESTORS MAY FIND DECISIONS MADE BY THE COMPANY'S
OFFICERS AND DIRECTORS CONTRARY TO THEIR INTERESTS.
The company's officers and directors own majority of our current outstanding
common stock. As a result, they will be able to decide who will be directors and
control the direction of the company. Our officers and directors interests may
differ from the interests of our other stockholders. Factors that could cause
his interests to differ from the interests of other stockholders include the
impact of corporate transactions on the timing of our business operations and
her ability to continue to manage the business, in terms of the amount of time
they are able to devote to the company.
IF WE FILE FOR BANKRUPTCY PROTECTION OR ARE FORCED INTO BANKRUPTCY PROTECTION,
INVESTORS WILL LOSE THEIR ENTIRE INVESTMENT.
If we file for bankruptcy protection, or a petition for involuntary bankruptcy
is filed by creditors against us, all funds will become part of the bankruptcy
estate and administered according to the bankruptcy laws. In this case, you will
lose your investment and your funds will be used to pay creditors. You may never
realize a return on your investment.
THERE IS NO ASSURANCE THAT A PURCHASER OF SHARES WILL REALIZE A RETURN ON HIS
INVESTMENT OR THAT HE WILL NOT LOSE HIS ENTIRE INVESTMENT IN THE COMPANY.
To date, the company has limited operations and no revenues. We have never
earned a profit and there can be no assurance that we will ever achieve
profitable operations. Our ability to implement our business plan is dependent,
among other things, on the completion and development of our business plan. If
we fail to raise any or a sufficient amount of money to continue operations, we
may fail as a business. Even if we raise sufficient amount of funding, there can
be no assurance that our business model will succeed.
12
We are a development stage company formed September 17, 2007 with the purpose to
establish itself as a corporation engaged in the sale of gift cards on the
internet and the development of a prescription drug database. TheWebDigest Corp.
may be unable to develop and execute its business plan and would then be unable
to generate revenues. There would be a substantial doubt, then, about our
ability to continue as a going concern.
We anticipate incurring losses during the period of time necessary to develop
our business plan and create the marketing plan. Additionally, there can be no
assurance that we will ever operate profitably, even if we raise additional
funding for operations.
Investors should not purchase shares unless they can afford to lose their entire
investment.
Because we are a newly formed company, there is no corporate operating history
on which to evaluate our potential for success. Additionally, we face many risks
inherent in a start-up business, including difficulties and delays frequently
encountered in connection with the commencement of operations, operational
difficulties and our potential underestimation of initial and ongoing costs.
Executing the business plan requires that we spend significant funds based
entirely on our preliminary evaluation of the potential of the market. It is
impossible to predict the success of our business before marketing starts. The
ability of the company to generate revenues will depend upon a variety of
unpredictable factors, including:
If we do not execute our business plan on schedule or within budget, our ability
to generate revenue may be diminished or delayed. Our ability to adhere to our
schedule and budget face many uncertainties
WE WILL INCUR INCREASED COSTS AS A RESULT OF BEING A PUBLIC COMPANY
As a public company, we incur significant legal, accounting and other expenses
that a private company does not incur. In addition, the Sarbanes-Oxley Act of
2002, as well as new rules subsequently implemented by the Securities and
Exchange Commission and stock exchanges have required changes in corporate
governance practices of public companies. We expect that these new rules and
regulations will increase our legal and financial compliance costs and will make
some activities more time-consuming and costly. For example, as a result of
becoming a public company, we need to create additional board committees and
adopt additional policies regarding internal controls and disclosure controls
and procedures. We will incur additional costs associated with public company
reporting requirements and compliance with the internal controls of Section 404
of the Sarbanes-Oxley Act of 2002. We also expect these new rules and
regulations will make it more difficult and more expensive for us to obtain
directors' and officers' liability insurance. As a result, our general and
administrative expenses will likely increase and it may be more difficult for us
to attract and retain qualified persons to serve on our board of directors or as
executive officers.
We are currently evaluating and monitoring developments with respect to these
new rules, and we cannot predict or estimate the amount of additional costs we
may incur or the timing of such costs.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not Applicable.
13
ITEM 2. PROPERTIES
As of December 31, 2010, the Company did not lease or own any properties.
Currently, the Company utilizes the offices of Steven Adelstein, its sole
officer and director, at no cost to the Company.
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any pending legal proceedings, and no such
proceedings are known to be contemplated.
No known director, officer or affiliate of the Company and no owner of record or
beneficial owner of more than 5.0% of the securities of the Company, or any
associate of any such director, officer or security holder is a party adverse to
the Company or has a material interest adverse to the Company in reference to
pending litigation.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of our security holders during the period
ended December 31, 2010.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES.
MARKET FOR OUR COMMON STOCK
---------------------------
Our common stock is not quoted on any Exchange.
REPORTS TO STOCKHOLDERS
-----------------------
Our shareholders, through our filings on the web, including http://www.sec.gov,
can review all of our period reporting requirements of the Exchange Act
including our annual report for December 31, 2010 and 2009.
APPROXIMATE NUMBER OF HOLDERS OF OUR COMMON STOCK
-------------------------------------------------
At December 31, 2010, there were approximately 40 stockholders of record of our
common stock.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
------------------------------------------------------------------
The Company has not adopted any equity compensation plan as of December 31,
2010.
DIVIDEND POLICY
---------------
We currently intend to retain and use any future earnings for the development
and expansion of our business and do not anticipate paying any cash dividends in
the near future.
14
ITEM 6. SELECTED FINANCIAL DATA
The selected statement of income data for the twelve (12) month period ended
December 31, 2010 and from inception (September 17, 2007) thru December 31, 2010
and balance sheet data as of December 31, 2010 and 2009 are derived from our
audited financial statements included elsewhere in this Report.
The following selected historical financial information should be read in
conjunction with our financial statements and related notes and the information
contained in Item 7. "Management's Discussion and Analysis of Financial
Condition and Results of Operations."
TWELVE (12) FROM INCEPTION
MONTHS ENDED (SEPTEMBER 17, 2007)
DECEMBER 31, THRU DECEMBER 31,
STATEMENT OF OPERATIONS DATA: 2010 2010
------------- --------------------
Sales revenue: .......................... $ - $ -
Cost of sales ........................... - -
Gross profit ............................ - -
Expenses:
General and Administrative expenses .. 3,500 10,142
Legal and Accounting.................. 8,000 23,269
Web Design & Development.............. 1,600 18,500
Total operating expenses .......... 13,100 51,911
Loss from Operations .................... (13,100) (51,911)
Interest Expense ........................ (0) (0)
Net Loss ................................ $ (13,100) $ (51,911)
Loss per Share - basic and diluted ...... $ (.001)
Weighted average number of shares
outstanding - basic and diluted ........ 10,000,000
DECEMBER 31,
------------------------------------
BALANCE SHEET DATA: 2010 2010
------------- --------------------
Cash and cash equivalents ............ $ - $ -
Working capital (deficit) ............ (32,911) (19,811)
Total assets ......................... 0 0
Total current liabilities ............ 32,911 19,811
Long term liability .................. - -
Total liabilities .................... 32,911 19,811
Total stockholders' equity (Deficit).. $ (32,911) $ (19,811)
15
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
OVERVIEW
OUR CORPORATE HISTORY
THEWEBDIGEST CORP. ("COMPANY","TheWebDigest, Corp.") is a development stage
company, incorporated in the State of Florida on September 17, 2007, to create,
develop and market internet informational portals. We intend to develop and
market our web portals and sell sponsorship rights through various marketing and
advertising procurement channels throughout the United States and foreign
territories. The Company business plan provides for each web portal to have
sponsors that pay an annual fee (to be established as our marketing program
develops) for a rotating sponsorship banner displayed on our web portal
including a hyperlink to the sponsor's web site. Our individual web portals, as
developed, will contain information specific to the subject matter as described
in each web domain.
RESULTS OF OPERATIONS
--------------------------------------------------------------------------------
SALES REVENUES
STATEMENT OF OPERATION ITEMS
----------------------------
Results of Operations for the year ended December 31, 2010 compared to the year
ended December 31, 2009.
For the twelve (12) months ended December 31, 2010 and cumulative from September
17, 2007, (inception) through December 31, 2010, we had zero (0) revenues from
operations and a loss from operations of $(13,100) and $(51,911) respectively.
o General and Administrative Expenses
For the twelve (12) months ended December 31, 2010, General and
Administrative expenses increased $1,000 from $2,500 for the year ending
December 31, 2009 to $3,500 for year ending December 31, 2010. These
expenses for the year ending December 31, 2010 are considered normalized
annual expenses.
o Legal and Accounting Expenses
For the twelve (12) months ended December 31, 2010, Legal and Accounting
expenses increased $1,500 from $6,500 for the year ending December 31,
2009 to $8,000 for year ending December 31, 2010. These expenses for the
year ending December 31, 2010 are considered normalized annual expenses.
o Web Design & Development
For the twelve (12) months ended December 31, 2010, web design and
development fees decreased $15,300 from $16,900 for the year ending
December 31, 2009 to $1,600 for the year ending December 31, 2010. As we
continuously beta test our web portals, we have not developed new web
portals for the year ending December 31, 2010. We anticipate new
development for the year ending 2011 and therefore increasing these fees
accordingly.
16
BALANCE SHEET ITEMS
-------------------
o ACCRUED EXPENSES
Accrued expenses at December 31, 2010 were $5,000 as compared to $4,000 at
December 31, 2009, an increase of $1,000. The increase was a result of
accruals for Legal and Accounting and other normalized expenses for the
period ending December 31, 2010.
o ADVANCES FROM RELATED PARTIES
Advances from related parties were $12,911 at December 31, 2010 as
compared to $811 at December 31, 2009. The increase was the result of our
sole officer and director advancing the necessary funds for operations.
o ACCOUNTS PAYABLE
Accounts payable remained $15,000 at December 31, 2010 and 2009. Our
independent contractor is working on the beta testing of our web portals
and has not insisted on payment of said liability. We anticipate this
liability and an additional $15,000 to be remitted to the independent
contractor for the year ending 2011.
LIQUIDITY AND CAPITAL RESOURCES
As of December 31, 2010, we had cash and cash equivalent of $0. The following
table provides detailed information about our net cash flow for December 31,
2010 and from inception (September 17, 2007) thru December 31, 2010.
STATEMENT OF CASH FLOW
TWELVE (12) FROM INCEPTION
MONTHS ENDED (SEPTEMBER 17, 2007)
DECEMBER 31, THROUGH
2010 DECEMBER 31, 2010
------------ --------------------
Net cash (required) in operating activities $ (12,100) $ (31,911)
Net cash provided by financing activities .. 12,100 31,911
Net cash flow (deficit) .................... 0 0
To date, we have funded our cash and liquidity requirements to continue
operations primarily through advances and debt with related parties and equity
transactions with related parties and from our Form S-1 as filed with the
Securities and Exchange Commission. However, until operating revenues increase
significantly, we will continue to seek outside funding for the purpose of
normalized operations and the acceleration of expansion of our business plan.
Without receiving any additional capital investments or third party financings,
management believes we will be unable to continue our current business
operations, and continue the current gradual expansion of our business plan.
RECENT ACCOUNTING PRONOUNCEMENTS
Recent accounting pronouncements are described in Note 3 to the Financial
Statements.
17
OFF-BALANCE SHEET ARRANGEMENTS
We do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on the Company's financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that would be material to
investors.
PLAN OF OPERATIONS
We have established through internal marketing research that there is a market
for our products on the internet and our prescription database.
We are aware that the economic condition has slowed operations substantially in
2010 and 2009 and we anticipate this continuing through 2011 that the U.S.
economy is currently in a state of uncertainty. In addition, we are aware that
business trends relative to the Internet are constantly changing. The
combination of changing trends relative to the Internet and uncertainty
regarding economic growth could have a material impact on our short-term or
long-term liquidity or revenues or income from operations.
OUR BUSINESS
The following description of our business contains forward-looking statements
relating to future events or our future financial or operating performance that
involves risks and uncertainties, as set forth above under "Special Note
Regarding Forward-Looking Statements." Our actual results could differ
materially from those anticipated in these forward-looking statements as a
result of certain factors, including those set forth in Section 1A under the
heading "Risk Factors" and elsewhere in this Form 10-K.
OUR MARKET PRESENCE
We intend to develop and market our web portals and sell sponsorship rights
through various marketing and advertising procurement channels throughout the
UNITED STATES AND foreign territories. The Company business plan provides for
each web portal to have individual sponsors that pay an annual fee (to be
established as our marketing program develops) for a rotating sponsorship banner
displayed on our web portal including a hyperlink to the sponsor's web site. Our
individual web portals, as developed, contain information specific to the
subject matter as described in each web domain. The sponsorships obtained by us
will have a direct relationship to the specific subject matter that they
sponsor. For example, if our web portal is the www.thediabeticdigest.com, the
sponsor will have a direct correlation to diabetes and accordingly, the web
portal will have informational data specifically for the same subject matter -
mainly diabetes. Emphasis will be placed on the following types of subjects to
develop each web portal on a specific content matter that directly refers to the
web domain name (for example. Diabetes - www.TheDiabeticDigest.com; arthritis -
www.thearthritisdigest.com; vitamins--www.thevitamindigest.com; podiatry -
www.thepodiatrydigest.com. etc.) These are just a few of the intended domain
names in our line of offerings to be developed.
Our web portals will be presented to prospective sponsors at completion of our
portal development and have a sponsored link from our web portals to the
sponsors web sites upon execution of the agreement. Each individual web portal
is being produced and designed as an informational portal of the subject
specific matter. We will not sell products or goods directly to the consumer and
we will derive our revenues from sponsors.
18
OUR EMPLOYEES
As of December 31, 2010, the Company has no permanent staff. Our officers and
directors are prepared to devote time to our operations as may be required.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We do not use derivative financial instruments and have no foreign exchange
contracts. Our financial instruments consist of cash and cash equivalents, trade
accounts and contracts receivable, accounts payable and long-term obligations.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY FINANCIAL DATA
The full text of our audited financial statements as of December 31, 2010 and
2009 begins on page F-1 of this Annual Report on Form 10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
During the fiscal years ended December 31, 2010 and 2009, there were no
disagreements with Lake & Associates CPA LLC on any matter of accounting
principles or practices, financial disclosure, or auditing scope or procedure.
There were no reportable events, as described in Item 304(a)(1)(v) of Regulation
S-K.
ITEM 9A. CONTROLS AND PROCEDURES
MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining adequate internal
control over financial reporting. Internal control over financial reporting is
defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange
Act of 1934 as a process designed by, or under the supervision of, the company's
principal executive and principal financial officers and effected by the
company's board of directors, management and other personnel, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
accounting principles generally accepted in the United States of America and
includes those policies and procedures that:
- Pertain to the maintenance of records that in reasonable detail accurately
and fairly reflect the transactions and dispositions of the assets of the
company;
- Provide reasonable assurance that transactions are recorded as necessary
to permit preparation of financial statements in accordance with
accounting principles generally accepted in the United States of America
and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company;
and
- Provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the company's assets that
could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate. All internal control systems,
no matter how well designed, have inherent limitations.
19
Therefore, even those systems determined to be effective can provide only
reasonable assurance with respect to financial statement preparation and
presentation. Because of the inherent limitations of internal control, there is
a risk that material misstatements may not be prevented or detected on a timely
basis by internal control over financial reporting. However, these inherent
limitations are known features of the financial reporting process. Therefore, it
is possible to design into the process safeguards to reduce, though not
eliminate, this risk.
As of December 31, 2010 management assessed the effectiveness of our internal
control over financial reporting based on the criteria for effective internal
control over financial reporting established in Internal Control--Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission ("COSO") and SEC guidance on conducting such assessments. Based on
that evaluation, they concluded that, during the period covered by this report,
such internal controls and procedures were not effective to detect the
inappropriate application of US GAAP rules as more fully described below. This
was due to deficiencies that existed in the design or operation of our internal
controls over financial reporting that adversely affected our internal controls
and that may be considered to be material weaknesses.
The matters involving internal controls and procedures that our management
considered to be material weaknesses under the standards of the Public Company
Accounting Oversight Board were: (1) lack of a functioning audit committee due
to a lack of a majority of independent members and a lack of a majority of
outside directors on our board of directors, resulting in ineffective oversight
in the establishment and monitoring of required internal controls and
procedures; (2) inadequate segregation of duties consistent with control
objectives; and (3) ineffective controls over period end financial disclosure
and reporting processes. The aforementioned material weaknesses were identified
by our Officers in connection with the review of our financial statements as of
December 31, 2010.
Management believes any of the matters noted above could result in a material
misstatement in our financial statements in future periods.
MANAGEMENT'S REMEDIATION INITIATIVES
In an effort to remediate the identified material weaknesses and other
deficiencies and enhance our internal controls, we have initiated, or plan to
initiate, the following series of measures:
We will create a position to segregate duties consistent with control objectives
and will increase our personnel resources and technical accounting expertise
within the accounting function when funds are available to us. And, we plan to
appoint one or more outside directors to our board of directors who shall be
appointed to an audit committee resulting in a fully functioning audit committee
who will undertake the oversight in the establishment and monitoring of required
internal controls and procedures such as reviewing and approving estimates and
assumptions made by management when funds are available to us.
Management believes that the appointment of one or more outside directors, who
shall be appointed to a fully functioning audit committee, will remedy the lack
of a functioning audit committee and a lack of a majority of outside directors
on our Board.
We anticipate that these initiatives will be at least partially, if not fully,
implemented by June 30, 2011. Additionally, we plan to test our updated controls
and remediate our deficiencies by September 30, 2011.
20
CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING
There was no change in our internal controls over financial reporting that
occurred during the period covered by this report, which has materially
affected, or is reasonably likely to materially affect, our internal controls
over financial reporting.
ITEM 9B. OTHER INFORMATION.
None.
DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT
OF CERTAIN OFFICERS
None.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS OF AND CORPORATE GOVERNANCE
Set forth below are the names of our directors, officers and significant
employees, their ages, all positions and offices that they hold with us, the
period during which they have served as such, and their business experience
during at least the last five years. The Directors will serve until the next
annual meeting of the stockholders or until their successors are elected or
appointed and qualified. Executive officers will serve at the Board's
discretion.
Our officers and directors will serve until his successor is elected and
qualified. Our officers are elected by the Board of Directors to a term of one
(1) year and serve until their successor is duly elected and qualified, or until
they are removed from office. The Board of Directors has no nominating, auditing
or compensation committees.
The name, address, age and position of our President, Chief Financial Officer
and Director is set forth below:
Name and Address Age Position(s)
----------------- --- -----------
Steven Adelstein 63 President / Chief Financial Officer / Director
7076 Spyglass Avenue
Parkland, FL 33076
The person named above has held her offices/positions since the inception of our
company and is expected to hold her offices/positions until the next annual
meeting of our stockholders.
BOARD COMPOSITION AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors is currently composed of one (1) member. All actions of
the Board of Directors require the approval of a majority of the Directors in
attendance at a meeting at which a quorum is present.
21
COMMITTEES
Our Board of Directors currently has no committee.
Our Board of Directors has not established any committees, including an Audit
Committee, a Compensation Committee or a Nominating Committee, any committee
performing a similar function. The functions of those committees are being
undertaken by the entire board as a whole. Because we do not have any
independent directors, our Board of Directors believes that the establishment of
committees of the Board would not provide any benefits to our company and could
be considered more form than substance.
INDEPENDENT DIRECTORS
WE DO NOT HAVE ANY INDEPENDENT DIRECTORS AND WE HAVE NOT VOLUNTARILY IMPLEMENTED
VARIOUS CORPORATE GOVERNANCE MEASURES, IN THE ABSENCE OF WHICH, STOCKHOLDERS MAY
HAVE MORE LIMITED PROTECTIONS AGAINST INTERESTED DIRECTOR TRANSACTIONS,
CONFLICTS OF INTEREST AND SIMILAR MATTERS.
Recent Federal legislation, including the Sarbanes-Oxley Act of 2002, has
resulted in the adoption of various corporate governance measures designed to
promote the integrity of the corporate management and the securities markets.
Some of these measures have been adopted in response to legal requirements.
Others have been adopted by companies in response to the requirements of
national securities exchanges, such as the NYSE or The NASDAQ Stock Market, on
which their securities are listed. Among the corporate governance measures that
are required under the rules of national securities exchanges are those that
address Board of Directors' independence, audit committee oversight, and the
adoption of a code of ethics. Our Board of Directors is comprised of one
individual who is also our executive officer.
Our executive officer makes decisions on all significant corporate matters such
as the approval of terms of the compensation of our executive officer and the
oversight of the accounting functions.
POLICY REGARDING BOARD ATTENDANCE
Directors are expected to attend Board meetings as frequently as necessary to
properly discharge their responsibilities and to spend the time needed to
prepare for each such meeting. Our Director is expected to attend annual
meetings of stockholders, but we do not have a formal policy requiring him to do
so.
DIRECTOR COMPENSATION
We do not pay fees to directors for attendance at meetings of the Board of
Directors or of committees; however, we may adopt a policy of making such
payments in the future. We will reimburse out-of-pocket expenses incurred by
directors in attending board and committee meetings. From time to time, the
Board of Directors approves compensation to officers and directors and, from
inception (September 17, 2007) to December 31, 2010, the total compensation to
our one (1) director was $0.
Under the terms of the Indemnification Agreements, we agreed to indemnify the
directors against expenses, judgments, fines, penalties or other amounts
actually and reasonably incurred by the directors in connection with any
proceeding if the director acted in good faith and in our best interests. It is
our practice to reimburse our director for reasonable travel and related
expenses for attendance at board of directors and committee meetings.
22
FAMILY RELATIONSHIPS
None.
CODE OF ETHICS
In September 2007, we adopted a Code of Ethics and Business Conduct which is
applicable to our employees and which also includes a Code of Ethics for our
President and principal financial officers and persons performing similar
functions. A code of ethics is a written standard designed to deter wrongdoing
and to promote:
o honest and ethical conduct,
o full, fair, accurate, timely and understandable disclosure in regulatory
filings and public statements,
o compliance with applicable laws, rules and regulations,
o the prompt reporting violation of the code, and
o accountability for adherence to the code.
ITEM 11. EXECUTIVE COMPENSATION
We did not pay any fixed salaries in 2010. We do not anticipate beginning to pay
salaries until we have adequate funds to do so. There are no stock option plans,
retirement, pension, or profit sharing plans for the benefit of our officers and
director other than as described herein.
REMUNERATION OF DIRECTORS AND OFFICERS
The following table sets forth the remuneration of our directors and officers
for the period from inception (September 17, 2007) through December 31,2010.
CAPACITIES IN WHICH AGGREGATE
NAME OF INDIVIDUAL REMUNERATION WAS RECEIVED Amount
------------------ ----------------------------- ------
Steven Adelstein Sole Officer and Director $ 0
We have no employment agreements with our Executive Officers and Directors. We
have not compensated Directors for attendance at meetings. We will reimburse the
Directors for reasonable expenses incurred during the course of their
performance.
BONUSES AND DEFERRED COMPENSATION
We do not have any agreements to issue bonuses, deferred compensation or
retirement plans. From time to time, the Board of Directors grants bonuses,
stock issuances and other benefits.
STOCK OPTIONS
The Company does not have any stock option plan.
PAYMENT OF POST-TERMINATION COMPENSATION
The Company does not have change-in-control agreements with any of its executive
officers, and the Company is not obligated to pay severance or other enhanced
benefits to executive officers upon termination of their employment.
23
LIMITATION OF LIABILITY AND INDEMNIFICATION OF OFFICERS AND DIRECTORS
Our bylaws provide for the indemnification of our present and prior directors
and officers or any person who may have served at our request as a director or
officer of another corporation in which we own shares of capital stock or of
which we are a creditor, against expenses actually and necessarily incurred by
them in connection with the defense of any actions, suits or proceedings in
which they, or any of them, are made parties, or a party, by reason of being or
having been director(s) or officer(s) of us or of such other corporation, in the
absence of negligence or misconduct in the performance of their duties. This
indemnification policy could result in substantial expenditure by us, which we
may be unable to recoup.
Insofar as indemnification by us for liabilities arising under the Securities
Exchange Act of 1934 may be permitted to our directors, officers and controlling
persons pursuant to provisions of the Articles of Incorporation and Bylaws, or
otherwise, we have been advised that in the opinion of the SEC, such
indemnification is against public policy and is, therefore, unenforceable. In
the event that a claim for indemnification by such director, officer or
controlling person of us in the successful defense of any action, suit or
proceeding is asserted by such director, officer or controlling person in
connection with the securities being offered, we will, unless in the opinion of
our counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
us is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
At the present time, there is no pending litigation or proceeding involving a
director, officer, employee or other agent of ours in which indemnification
would be required or permitted. We are not aware of any threatened litigation or
proceeding which may result in a claim for such indemnification.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS.
The following table sets forth certain information with respect to the
beneficial ownership of our common stock as of December 31, 2010 for (a) each of
our directors, (b) each of our executive officers, (c) each stockholder known to
be the beneficial owner of more than 5% of any class of the our voting
securities, and (d) all directors and executive officers as a group. Beneficial
ownership is determined in accordance with Rule 13d-3 under the Securities
Exchange Act of 1934 and does not necessarily bear on the economic incidents of
ownership or the rights to transfer the shares described below. Unless otherwise
indicated, (a) each stockholder has sole voting power and dispositive power with
respect to the indicated shares and (b) the address of each stockholder who is a
director or executive officer is c/o TheWebDigest, Corp. 7076 Spyglass Avenue,
Parkland, FL 33076.
Name and address Percentage of
Beneficial Ownership Number of Shares ownership (1)
-------------------- ---------------- -------------
DIRECTORS AND OFFICERS:
Steven Adelstein 9,000,00 90%
7076 Spyglass Avenue
Parkland, FL 33076
BENEFICIAL OWNER OF MORE THAN 5%: None
_________________
(1) Applicable percentage ownership is based on 10,000,000 shares of common
stock outstanding as of March 1, 2011.
24
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
From time to time, the Company borrows from officers, directors and related
parties. At December 31, 2010 and 2009, these loans were $12,911 and $811
respectively. The highest amount borrowed for the year ending December 31, 2010
was $12,911.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
Lake & Associates CPA LLC is the Company's independent registered public
accounting firm engaged to examine the Company's financial statements for the
fiscal period ended December 31, 2010 and 2009.
FEES FOR THE FISCAL PERIOD ENDED DECEMBER 31, 2010 AND 2009
AUDIT FEES - Lake & Associates CPA LLC was paid or accrued an aggregate fee of
approximately $5,000 per period for the auditing services for the fiscal period
ended December 31, 2010 and 2009. These fees for auditing services included the
audit of our annual financial statements and for the reviews of the financial
statements included in our quarterly reports on Form 10-Q for the periods ended
March 31, June 30 and September 30.
AUDIT RELATED FEES - Lake & Associates CPA LLC was not paid or no fees were
accrued for assurance and related services that were related to the audit or
review of the Company's financial statements during the fiscal years ended
December 31, 2010 and 2009.
TAX FEES - Lake & Associates CPA LLC was paid or accrued a fee of approximately
$500 for tax compliance, advice, and planning during the fiscal years ended
December 31, 2010 and 2009.
ALL OTHER FEES. Lake & Associates CPA LLC did not bill the Company for any
products or services other than the foregoing during the fiscal years ended
December 31, 2010 and 2009.
BOARD OF DIRECTORS PRE-APPROVAL POLICIES AND PROCEDURES
Although our Board of Directors does not have an Audit Committee, our Board of
Directors has adopted the policy to pre-approve audit and permissible non-audit
services provided by our independent auditors.
25
PART IV
ITEM 15. EXHIBITS
EXHIBIT NO. DOCUMENT DESCRIPTION
----------- --------------------
3.1 Articles of Incorporation (incorporated by reference from
Registration Statement on Form S-1 filed with the Securities and
Exchange Commission on June 6, 2008). (1)
3.2 By-laws (incorporated by reference from Registration Statement on
Form S-1 filed with the Securities and Exchange Commission on
June 6, 2008). (1)
31.1 Certification of the Chief Executive Officer (Principal Executive
Officer) pursuant to Section 302 of the Sarbanes-Oxley Act of
2002. (2)
31.2 Certification of the Chief Financial Officer (Principal Financial
and Accounting Officer) pursuant to Section 302 of the
Sarbanes-Oxley Act Of 2002. (2)
32.1 Certification of the Chief Executive Officer (Principal Executive
Officer) pursuant to 18 U.S.C. Section 1350 as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act Of 2002. (2)
32.2 Certification of the Chief Financial Officer (Principal Financial
and Accounting Officer) pursuant to 18 U.S.C. Section 1350 as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act Of 2002.
(2)
__________________
(1) Exhibit filed as part of the S-1 and Amendments as filed with the Securities
and Exchange Commission.
(2) Exhibit filed as part of this Form 10-K for the period ended December 31,
2010.
26
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
THEWEBDIGEST, CORP.
By: /s/ Steven Adelstein
--------------------
President, Director, Principal Executive Officer, Principal Financial and
Accounting Officer
Date: March 15, 2011
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
By: /s/ Steven Adelstein
--------------------
President, Director, Principal Executive Officer, Principal Financial and
Accounting Officer
Date: March 15, 2011
27
THEWEBDIGEST, CORP
(A DEVELOPMENT STAGE COMPANY)
INDEX TO FINANCIAL STATEMENTS
PAGE
-----------
Report of Independent Registered Public Accounting Firm .......... F-2
Balance Sheet .................................................... F-3
Statements of Operations ......................................... F-4
Statements of Stockholders' Equity/(Deficit) ..................... F-5
Statements of Cash Flows ......................................... F-6
Notes to Financial Statements .................................... F-7 to F-15
F-1
Lake & Associates CPA's
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of TheWebDigest Corp.
We have audited the accompanying balance sheet of TheWebDigest Corp. (a
development stage enterprise)(the "Company") as of December 31, 2010 and 2009
and the related statements of operations, stockholders' equity/(deficit), and
cash flows for the years then ended, and for the period from September 17, 2007
(inception) through December 31, 2010. These financial statements are the
responsibility of the company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of TheWebDigest Corp. (a Florida
corporation) as of December 31, 2010 and 2009 and the results of its operations
and its cash flows for the years then ended and the period September 17, 2007
(inception) through December 31, 2010, in conformity with accounting principles
generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed further in Notes 2 and 4,
the Company has been in the development stage since its inception (September 17,
2007) and continues to incur significant losses. The Company's viability is
dependent upon its ability to obtain future financing and the success of its
future operations. These factors raise substantial doubt as to the Company's
ability to continue as a going concern. Management's plan in regard to these
matters is also described in Notes 2 and 4. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
/s/ Lake & Associates CPA's LLC
Lake & Associates CPA's LLC
Schaumburg, Illinois
March 7, 2011
1905 Wright Boulevard
Schaumburg, IL 60193
Phone: 847-524-0800
Fax: 847-524-1655
F-2
THEWEBDIGEST CORP.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
(AUDITED)
ASSETS
------
DECEMBER 31, DECEMBER 31,
2010 2009
------------ ------------
CURRENT ASSETS:
Cash and equivalents ........................... $ -- $ --
------------ ------------
Total Current Assets ....................... -- --
------------ ------------
Total Assets ................................. $ -- $ --
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
-------------------------------------------------
CURRENT LIABILITIES:
Accounts Payable ............................... $ 15,000 $ 15,000
Accrued Liabilties ............................. 5,000 4,000
Advances from Related Parties .................. 12,911 811
------------ ------------
Total Current Liabilities .................. 32,911 19,811
------------ ------------
Total Liabilities ............................ 32,911 19,811
------------ ------------
STOCKHOLDERS' EQUITY/(DEFICIT):
Preferred Stock, par value $0.001; 10,000,000
shares authorized;
0 shares issued and outstanding as of
December 31, 2010 and December 31, 2009 ..... -- --
Common stock, par value $.001; 100,000,000
shares authorized;
10,000,000 shares issued and outstanding as of
December 31, 2010 and December 31, 2009 ..... 10,000 10,000
Additional Paid in Capital ..................... 9,000 9,000
Deficit accumulated during the development stage (51,911) (38,811)
------------ ------------
Total Stockholders' Equity (Deficit) ....... (32,911) (19,811)
------------ ------------
Total Liabilities and Stockholders' Equity/
(Deficit) ................................... $ -- $ --
============ ============
The accompanying notes are an integral part of these statements.
F-3
THEWEBDIGEST CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
FOR THE PERIOD SEPTEMBER 17, 2007 (INCEPTION) THROUGH DECEMBER 31, 2010
(AUDITED)
FOR THE YEAR FOR THE YEAR CUMULATIVE FROM
ENDED ENDED SEPTEMBER 17, 2007
DECEMBER 31, DECEMBER 31, (INCEPTION) THROUGH
2010 2009 DECEMBER 31, 2010
------------ ------------ ------------------
Net Sales .................... $ -- $ -- $ --
Cost of Sales ................ -- -- --
------------ ------------ -----------------
Gross Profit ................. -- -- --
Expenses:
General & Administrative ... 3,500 2,500 10,142
Legal and Accounting ....... 8,000 6,500 23,269
Web Design & Development ... 1,600 16,900 18,500
------------ ------------ -----------------
Total Expenses ............... 13,100 25,900 51,911
------------ ------------ -----------------
Net (loss) before Income Taxes (13,100) (25,900) (51,911)
------------ ------------ -----------------
Other - Interest Expense ..... -- -- --
------------ ------------ -----------------
Provision for Income Taxes ... -- -- --
------------ ------------ -----------------
Net (loss) ................... $ (13,100) $ (25,900) $ (51,911)
------------ ============ =================
Basic and diluted net loss per
common share ................ ** **
============ ============
Weighted average number of
common shares outstanding ... 10,000,000 9,202,740
============ ============
** Less than $.01
The accompanying notes are an integral part of these statements.
F-4
THEWEBDIGEST CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY / (DEFICIT)
FROM SEPTEMBER 17, 2007 (INCEPTION) THROUGH DECEMBER 31, 2010
(AUDITED)
ACCUMULATED
(DEFICIT) TOTAL
COMMON STOCK ADDITIONAL DURING STOCKHOLDERS'
-------------------- SUBSCRIPTION PAID-IN DEVELOPMENT EQUITY /
Par Value of $0.001 SHARES AMOUNT RECEIVABLE CAPITAL STAGE (DEFICIT)
----------------------------- ---------- -------- ------------ ---------- ----------- -------------
Balance at September 17, 2007 -- $ -- $ -- $ -- $ -- $ --
Common stock issued for
subscription agreement at
September 30, 2007 ......... 9,000,000 9,000 (9,000) -- -- --
Payments on Subscription .... -- -- 9,000 -- -- 9,000
Net (loss) for the year ended
December 31, 2007 .......... -- -- -- -- (1,500) (1,500)
Net (loss) for the year ended
December 31, 2008 .......... -- -- -- -- (11,411) (11,411)
---------- -------- ------------ ---------- ----------- ------------
Balance at December 31, 2008 9,000,000 9,000 -- -- (12,911) (3,911)
---------- -------- ------------ ---------- ----------- ------------
Common stock issued on
October 18, 2009 (persuant
to Form S-1 which became
effective August 12, 2009 -
$0.01/share) ............... 1,000,000 1,000 -- 9,000 -- 10,000
Net (loss) for year ending
December 31, 2009 .......... -- -- -- -- (25,900) (25,900)
---------- -------- ------------ ---------- ----------- ------------
Balance at December 31, 2009 10,000,000 10,000 -- 9,000 (38,811) (19,811)
---------- -------- ------------ ---------- ----------- ------------
Net (loss) for year ending
December 31, 2010 .......... -- -- -- -- (13,100) (13,100)
---------- -------- ------------ ---------- ----------- ------------
Balance at December 31, 2010 10,000,000 $ 10,000 $ -- $ 9,000 $ (51,911) $ (32,911)
========== ======== ============ ========== =========== ============
The accompanying notes are an integral part of these statements.
F-5
THEWEBDIGEST CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
FOR THE PERIOD SEPTEMBER 17, 2007 (INCEPTION) THROUGH DECEMBER 31, 2010
(AUDITED)
FOR THE YEAR FOR THE YEAR CUMULATIVE FROM
ENDED ENDED SEPTEMBER 17, 2007
DECEMBER 31, DECEMBER 31, (INCEPTION) THROUGH
2010 2009 DECEMBER 31, 2010
------------ ------------ ------------------
OPERATING ACTIVITIES:
Net loss ...................................... $ (13,100) $ (25,900) $ (51,911)
Adjustments to reconcile net loss to net cash
used in operating activities:
Changes in operating assets and liabilities:
Increase/(Decrease) in accounts payable ... -- 14,531 15,000
Increase/(Decrease) in accrued expenses ... 1,000 2,500 5,000
------------ ------------ ------------
Net cash used in operating activities ... (12,100) (8,869) (31,911)
------------ ------------ ------------
INVESTING ACTIVITIES:
Increase in equipment ......................... -- -- --
------------ ------------ ------------
FINANCING ACTIVITIES:
Stock issued for cash ......................... -- 10,000 10,000
Payments on subscription agreement ............ -- -- 9,000
Repayment of related party loan payable ....... -- (6,031) (6,031)
Proceeds from related party loan payable ...... 12,100 4,900 18,942
------------ ------------ ------------
Net cash provided by (used in) financing
activities ............................. 12,100 8,869 31,911
------------ ------------ ------------
NET INCREASE (DECREASE) IN CASH ................. -- -- --
------------ ------------ ------------
CASH BEGINNING BALANCE .......................... -- -- --
CASH ENDING BALANCE ............................. $ -- $ -- $ --
============ ============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Taxes paid .................................... $ -- $ -- $ --
============ ============ ============
Interest paid ................................. $ -- $ -- $ --
============ ============ ============
The accompanying notes are an integral part of these statements.
F-6
THEWEBDIGEST, CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD SEPTEMBER 17, 2007 THROUGH DECEMBER 31, 2010
NOTE 1 ORGANIZATION
THEWEBDIGEST, CORP. (a development stage enterprise) (the Company) was
formed on September 17, 2007 in the State of Florida. The Company's activities
to date have been primarily directed towards the raising of capital, acquiring
and developing intellectual properties. The Company intends to develop and
market our web portals and sell sponsorship rights through various marketing and
advertising procurement channels throughout the United States and foreign
territories. The Company's individual web portals, as developed, contain
information specific to the subject matter as described in each web domain.
The accompanying financial statements have been prepared by the
Company. The Company's financial statements are prepared in accordance with
generally accepted accounting principles in the United States of America ("US
GAAP").
NOTE 2 LIQUIDITY, FINANCIAL CONDITION AND MANAGEMENT'S PLANS
The Company's financial statements for the year ended December 31, 2010
have been prepared assuming that it will continue as a going concern. To date,
the Company has generated no revenues, has substantial operating losses and an
accumulated deficit since its inception in September 2007. The Company incurred
a net loss from continuing operations of $13,100 and used $12,100 of cash in
continuing operations for the year ended December 31, 2010. At December 31,
2010, the Company had a working capital deficit of $32,911, limited financial
resources available to pay ongoing financial obligations as they become due and
a ($51,911) of accumulated deficit. These conditions raise substantial doubt
about the Company's ability to continue as a going concern.
The Company has principally financed its operations for the year ended
December 31, 2010, using proceeds from short term borrowings primarily from the
sale of common shares and advances from related parties. In addition to the
normal risks associated with a new business venture, there can be no assurance
that the Company's business plan will be successfully executed. Our ability to
execute our business plan will depend on our ability to obtain additional
financing and achieve a profitable level of operations.
Management believes the Company's ability to continue operations are
dependent on its ability to continue to raise capital. At the present time, we
have no commitments for any additional financing. If the Company is unable to
raise additional capital or encounters unforeseen circumstances, it may be
required to take additional measures to conserve liquidity, which could include,
but not necessarily be limited to, curtailing its operations, suspending the
pursuit of its business plan, and controlling overhead expenses. The Company
cannot provide any assurance that it will raise additional capital as necessary
nor can it provide any assurance that new financing will be available to it on
commercially acceptable terms, if at all. Management believes that the ability
to raise additional capital could be negatively impacted as a result of its
securities not being traded on an active trading market.
F-7
THEWEBDIGEST, CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD SEPTEMBER 17, 2007 THROUGH DECEMBER 31, 2010
NOTE 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation - Development Stage Company
-------------------------------------------------
The Company has not earned any revenue from operations. Accordingly,
the Company's activities have been accounted for as those of a "Development
Stage Enterprise" as set forth in Accounting Standards Codification ("ASC") 915
"Development Stage Entities", which was previously Financial Accounting
Standards Board Statement No. 7 ("SFAS 7"). Among the disclosures required by
ASC 915 are that the Company's financial statements be identified as those of a
development stage company, and that the statements of operations, stockholders'
equity/(deficit) and cash flows disclose activity since the date of the
Company's inception.
Since its inception, the Company has been dependent upon the receipt of
capital investment and loans to fund its continuing activities. In addition to
the normal risks associated with a new business venture, there can be no
assurance that the Company's business plan will be successfully executed. Our
ability to execute our business plan will depend on our ability to obtain
additional financing and achieve a profitable level of operations. There can be
no assurance that sufficient financing will be obtained. Further, we cannot give
any assurance that we will generate substantial revenues or that our business
operations will prove to be profitable.
Accounting Method
-----------------
The Company's financial statements are prepared using the accrual
method of accounting. The Company has elected a fiscal year ending on December
31.
Intangible Assets
-----------------
The Company evaluates the recoverability of identifiable intangible
assets whenever events or changes in circumstances indicate that an intangible
asset's carrying amount may not be recoverable. There was no impairment loss for
the period from September 17, 2007(inception) to December 31, 2010.
Income Taxes
------------
The Company accounts for income taxes as outlined in ASC 740 "Income
Taxes", which was previously Financial Accounting Standards Board (FASB)
Statement No. 109, ("Accounting for Income Taxes"). Under ASC 740, 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, 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. There was no current or deferred income tax expense
or benefits due to the Company not having any material operations for the period
ended December 31, 2010.
F-8
THEWEBDIGEST, CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD SEPTEMBER 17, 2007 THROUGH DECEMBER 31, 2010
Cash Equivalents
----------------
The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.
Estimates
---------
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities 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.
Determination of fair values involves subjective judgment and estimates
not susceptible to substantiation by auditing procedures. Accordingly, under
current auditing standards, the notes to our financial statements will refer to
the uncertainty with respect to the possible effect of such valuations, and any
change in such valuations, on our financial statements.
Inventories
-----------
Inventories are valued at the lower of cost or market on a first-in,
first-out (FIFO) basis, and include finished goods.
Impairment of Long-Lived Assets
-------------------------------
In accordance with ASC 360-10-05-4 "Property, Plant, and
Equipment-Impairment or Disposal of Long-Lived Assets", which was previously
Financial Accounting SFAS No.144, "Accounting for the Impairment or Disposal of
Long-lived Assets", the Company assesses long-lived assets, such as property and
equipment and intangible assets subject to amortization, are reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset group may not be fully recoverable. Recoverability
of asset groups to be held and used in measured by a comparison of the carrying
amount of an asset group to estimated undiscounted future cash flows expected to
be generated by the asset group. If the carrying amount exceeds its estimated
future cash flows, an impairment charge is recognized by the amount by which the
carrying amount of an asset group exceeds the fair value of the asset group. The
Company evaluated its long-lived assets and no impairment charges were recorded
for any of the periods presented.
Revenue Recognition
-------------------
The Company recognizes revenue when:
o Persuasive evidence of an arrangement exists;
o Shipment has occurred;
o Price is fixed or determinable; and
o Collectability is reasonably assured.
F-9
THEWEBDIGEST, CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD SEPTEMBER 17, 2007 THROUGH DECEMBER 31, 2010
The Company closely follows the provisions of ASC 605, "Revenue
Recognition", which includes the guidelines of Staff Accounting Bulletin No. 104
as described above. For the periods from September 17, 2007 (inception) to
December 31, 2010, the Company recognized no revenues.
Basic Loss Per Common Share
---------------------------
Basic loss per common share has been calculated based on the weighted
average number of shares outstanding during the period after giving retroactive
effect to stock splits. There are no dilutive securities at December 31, 2010
for purposes of computing fully diluted earnings per share.
Dividends
---------
The Company has not yet adopted any policy regarding payment of
dividends. No dividends have been paid or declared since inception.
Share-Based Payments
--------------------
The Company adopted ASC 718 "Compensation - Stock Compensation", which
was previously Statement of Financial Accounting standards ("SFAS") No. 123
(Revised December 2004), "Share-Based Payment" (SFAS No. 123R), which requires
the measurement and recognition of compensation expense for all share-based
payment awards made to employees and directors, including stock options,
employee stock purchases related to an employee stock purchase plan and
restricted stock units based on estimated fair values of the awards over the
requisite employee service period. SFAS No. 123R supersedes Accounting
Principles Board Opinion No. 25 ("APB No. 25"), "Accounting for Stock Issued to
Employees", which the company previously followed in accounting for stock-based
awards. In March 2005, the SEC issued Staff Bulletin No. 107("SAB No. 107"), to
provide guidance on SFAS 123R. The Company has applied SAB No. 107 in its
adoption of SFAS No. 123R.
Under SFAS No. 123R, stock-based compensation cost is measured at the
grant date, based on the estimated fair value of the award, and is recognized on
a straight-line basis as expense over the employee's requisite service period.
The Company adopted the provisions of the SFAS 123R in its fiscal year ended
December 31, 2008 using the modified prospective application method.
The valuation provisions of SFAS 123R apply to new awards and to awards
that are outstanding on the effective date (or date of adoption) and
subsequently modified or cancelled; prior periods are not revised for
comparative purposes. Estimated compensation expense for awards outstanding on
the effective date will be recognized over the remaining service period using
the compensation cost calculated for pro forma disclosure under FASB Statement
No. 123, "Accounting for Stock-Based Compensation".
F-10
THEWEBDIGEST, CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD SEPTEMBER 17, 2007 THROUGH DECEMBER 31, 2010
Fair value of Financial Instruments
-----------------------------------
Financial instruments consist principally of cash, trade and related
party payables, accrued liabilities, short-term obligations and notes payable.
The carrying amounts of such financial instruments in the accompanying balance
sheets approximate their fair values due to their relatively short-term nature.
It is management's opinion that the Company is not exposed to any significant
currency or credit risks arising from these financial instruments.
Financial instruments that potentially subject the Company to
concentrations of credit risk consist principally of cash deposits. Accounts at
each institution are insured by the Federal Deposit Insurance Corporation (FDIC)
up to $250,000.
At December 31, 2010 and December 31, 2009, respectively, the Company
had no amounts in excess of FDIC insured limit.
Related Parties
---------------
Related parties, which can be a corporation, individual, investor or
another entity are considered to be related if the party has the ability,
directly or indirectly, to control the other party or exercise significant
influence over the Company in making financial and operating decisions.
Companies are also considered to be related if they are subject to common
control or common significant influence. The Company has these relationships.
Recent Accounting Pronouncements
--------------------------------
In February 2010, the FASB issued ASU 2010-09, "Subsequent Events
(Topic 855) - Amendments to Certain Recognition and Disclosure Requirements."
ASU 2010-09 requires an entity that is an SEC filer to evaluate subsequent
events through the date that the financial statements are issued and removes the
requirement that an SEC filer disclose the date through which subsequent events
have been evaluated. ASC 2010-09 was effective upon issuance.
In June 2009 the FASB issued ASC 860, formerly SFAS 166, "Accounting
for Transfers of financial Assets -- an amendment of FASB Statement No. 140"
(ASC 860). ASC 860 eliminates the concept of a qualifying special-purpose
entity, creates more stringent conditions for reporting a transfer of a portion
of a financial asset as a sale, clarifies other sale-accounting criteria, and
changes the initial measurement of a transferor's interest in transferred
financial assets. ASC 860 will be effective April 1, 2010. The Company is in the
process of evaluating the impact of this pronouncement on its consolidated
financial position and results of operations. The adoption of this pronouncement
is not expected to have a material impact on the Company's financial position
and results of operations.
F-11
THEWEBDIGEST, CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD SEPTEMBER 17, 2007 THROUGH DECEMBER 31, 2010
In June 2009 the FASB issued ASC 810, formerly SFAS 167, "Amendments to
FASB Interpretation No. 46(R)" (ASC 810). ASC 810 eliminates Interpretation
46(R)'s exceptions to consolidating qualifying special-purpose entities,
contains new criteria for determining the primary beneficiary, and increases the
frequency of required reassessments to determine whether a company is the
primary beneficiary of a variable interest entity. ASC 810 also contains a new
requirement that any term, transaction, or arrangement that does not have a
substantive effect on an entity's status as a variable interest entity, a
company's power over a variable interest entity, or a company's obligation to
absorb losses or its right to receive benefits of an entity must be disregarded
in applying Interpretation 46(R)'s provisions. The elimination of the qualifying
special-purpose entity concept and its consolidation exceptions means more
entities will be subject to consolidation assessments and reassessments. ASC 810
will be effective April 1, 2010. The adoption of this pronouncement is not
expected to have a material impact on the Company's financial position and
results of operations.
In August 2009, FASB issued Accounting Standards Update 2009-05 which
includes amendments to Subtopic 820-10, Fair Value Measurements and
Disclosures--Overall. The update provides clarification that in circumstances,
in which a quoted price in an active market for the identical liability is not
available, a reporting entity is required to measure fair value using one or
more of the techniques provided for in this update. The amendments in this
update clarify that a reporting entity is not required to include a separate
input or adjustment to other inputs relating to the existence of a restriction
that prevents the transfer of the liability and also clarifies that both a
quoted price in an active market for the identical liability at the measurement
date and the quoted price for the identical liability when traded as an asset in
an active market when no adjustments to the quoted price of the asset are
required are Level 1 fair value measurements. The adoption of this standard did
not have a material impact on the Company's financial position and results of
operations.
The FASB has published FASB Accounting Standards Update 2009-13,
Revenue Recognition (Topic 605)-Multiple Deliverable Revenue Arrangements which
addresses the accounting for multiple-deliverable arrangements to enable vendors
to account for products or services (deliverables) separately rather than as a
combined unit. Specifically, this guidance amends the criteria in Subtopic
605-25, Revenue Recognition-Multiple-Element Arrangements, for separating
consideration in multiple-deliverable arrangements. This guidance establishes a
selling price hierarchy for determining the selling price of a deliverable,
which is based on: (a) vendor-specific objective evidence; (b) third-party
evidence; or (c) estimates. This guidance also eliminates the residual method of
allocation and requires that arrangement consideration be allocated at the
inception of the arrangement to all deliverables using the relative selling
price method and also requires expanded disclosures. FASB Accounting Standards
Update 2009-13 is effective prospectively for revenue arrangements entered into
or materially modified in fiscal years beginning on or after June 15, 2010.
Early adoption is permitted. The adoption of this standard is not expected to
have a material impact on the Company's financial position and results of
operations.
F-12
THEWEBDIGEST, CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD SEPTEMBER 17, 2007 THROUGH DECEMBER 31, 2010
In September 2009, the FASB issued ASU No. 2009-14, "Software (Topic
985) -- Certain Revenue Arrangements That Include Software Elements" ("ASU No.
2009-14"). ASU No. 2009-14 changes the accounting model for revenue arrangements
that include both tangible products and software elements to allow for
alternatives when vendor-specific objective evidence does not exist. Under this
guidance, tangible products containing software components and non-software
components that function together to deliver the tangible product's essential
functionality and hardware components of a tangible product containing software
components are excluded from the software revenue guidance in Subtopic 985-605,
"Software-Revenue Recognition;" thus, these arrangements are excluded from this
update. ASU No. 2009-14 is effective prospectively for revenue arrangements
entered into or materially modified in fiscal years beginning on or after June
15, 2010 with early adoption permitted. The adoption of this pronouncement is
not expected to have a material impact on our financial position or results of
operations.
The FASB has issued Accounting Standards Update (ASU) No. 2010-06, Fair
Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair
Value Measurements. This ASU requires some new disclosures and clarifies some
existing disclosure requirements about fair value measurement as set forth in
Codification Subtopic 820-10. ASU 2010-06 amends Codification Subtopic 820-10
and now requires a reporting entity to use judgment in determining the
appropriate classes of assets and liabilities and to provide disclosures about
the valuation techniques and inputs used to measure fair value for both
recurring and nonrecurring fair value measurements. ASU 2010-06 is effective for
interim and annual reporting periods beginning after December 15, 2009, as this
standard relates specifically to disclosures, the adoption will not have an
impact on the Company's financial position and results of operations.
In March 2010, the FASB issued ASU No. 2010-17, Revenue Recognition--
Milestone Method (Topic 605): Milestone Method of Revenue Recognition. This
standard provides that the milestone method is a valid application of the
proportional performance model for revenue recognition if the milestones are
substantive and there is substantive uncertainty about whether the milestones
will be achieved. Determining whether a milestone is substantive requires
judgment that should be made at the inception of the arrangement. To meet the
definition of a substantive milestone, the consideration earned by achieving the
milestone (1) would have to be commensurate with either the level of effort
required to achieve the milestone or the enhancement in the value of the item
delivered, (2) would have to relate solely to past performance, and (3) should
be reasonable relative to all deliverables and payment terms in the arrangement.
No bifurcation of an individual milestone is allowed and there can be more than
one milestone in an arrangement. The new standard is effective for interim and
annual periods beginning on or after June 15, 2010. The adoption of this
standard is not expected to have a material impact on the Company's financial
position and results of operations.
Subsequent Events
-----------------
We evaluated subsequent events through the date and time our financial
statements were issued.
F-13
THEWEBDIGEST, CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD SEPTEMBER 17, 2007 THROUGH DECEMBER 31, 2010
NOTE 4 GOING CONCERN
The Company's financial statements are prepared using accounting
principles generally accepted in the United States of America applicable to a
going concern that contemplates the realization of assets and liquidation of
liabilities in the normal course of business. The Company has not established
any source of revenue to cover its operating costs. The Company will engage in
very limited activities without incurring any liabilities that must be satisfied
in cash until a source of funding is secured. The Company will offer noncash
consideration and seek equity lines as a means of financing its operations.
If the Company is unable to obtain revenue producing contracts or
financing or if the revenue or financing it does obtain is insufficient to cover
any operating losses it may incur, it may substantially curtail or terminate its
operations or seek other business opportunities through strategic alliances,
acquisitions or other arrangements that may dilute the interests of existing
stockholders.
NOTE 5 INCOME TAXES
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 reverse. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in the statement of
operations in the period that includes the enactment date.
There is no provision for income taxes due to continuing losses. At
December 31, 2010, the Company has net operating loss carryforwards for tax
purposes of approximately $52,000 which expire through 2030. The Company has
recorded a valuation allowance that fully offsets deferred tax assets arising
from net operating loss carryforwards because the likelihood of the realization
of the benefit cannot be established.
The Internal Revenue Code contains provisions that may limit the net
operating loss carryforwards available if significant changes in stockholder
ownership of the Company occur.
NOTE 6 RELATED PARTY TRANSACTIONS
On September 30, 2007, the company issued 9,000,000 shares to Steven
Adelstein, its sole officer and director for the amount of $9,000.
From time to time, the company borrows from its officers, directors and
stockholders. At December 30, 2010, the company owed $12,911 to Steven Adelstein
and at December 31, 2009, the company owed $811. There are no signed or executed
agreements between the parties and the company and therefore there are no
assurances that said related parties will advance funds in the future.
F-14
THEWEBDIGEST, CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD SEPTEMBER 17, 2007 THROUGH DECEMBER 31, 2010
The Company does not lease or rent any property. Office space and
services are provided without charge by a director and shareholder. Such costs
are immaterial to the financial statements and, accordingly, have not been
reflected therein. The officers and directors of the Company are involved in
other business activities and may, in the future, become involved in other
business opportunities. If a specific business opportunity becomes available,
such persons may face a conflict in selecting between the Company and their
other business interests. The Company has not formulated a policy for the
resolution of such conflicts.
NOTE 7 INDEPENDENT CONTRACTOR
The company has entered into an agreement with an independent
contractor to produce and develop the initial five (5) domain names as
informational web sites for a total amount of $30,000. The initial payment of
$15,000 was due March 31, 2009 or within thirty (30) days of when the company's
Form S-1 as filed with the Securities and Exchange Commission becomes effective,
whichever is later. This became effective November 2009,and the $15,000 was
included in accounts payable at December 31, 2009. This agreement has been
orally extended, and the work is about 45% complete. The $15,000 remains in
accounts payable at December 31, 2010 and it is expected that the remaining
$15,000 will become due in 2011.
NOTE 8 INTELLECTUAL PROPERTY
The company owns in excess of 175 domain names having different subject
matters within each specific domain name. It is the company's policy to expense
all costs related of the renewal paid to the domain registrar, research and
development as these web portals are produced and developed.
NOTE 9 EQUITY TRANSACTIONS
On September 30, 2007, the Company issued 9,000,000 shares of common
stock to Steven Adelstein, our sole officer and director for $9,000 at $0.001.
On October 18, 2009, the company issued 1,000,000 shares of common
stock to 42 investors in accordance with Form S-1 (commission file #333-151485)
for cash and consideration of $10,000.
The company has no outstanding options and warrants at December 31,
2010 and 2009.
F-1
