Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[ X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For Quarterly Period Ended September 30, 2011
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the Transition period from _______________ to ______________
COMMISSION FILE NUMBER: 000-30999
30DC, INC.
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(Exact name of registrant as specified in its charter)
MARYLAND 16-1675285
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
80 BROAD STREET, 5TH FLOOR, NEW YORK, NY 10004
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(Address of principal executive offices) (Zip Code)
(212) 962-4400
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Registrant's telephone number, including area code
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(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes[_x_] No[__]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files).
Yes[__] No[__]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check One).
Large accelerated filer [___] Accelerated filer [___]
Non-accelerated filer [___] Smaller reporting company [_X_]
(Do not check if a smaller reporting company)
Indicate by check mark whether the Registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
Yes[__] No[_X_]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
As of January 31, 2012 the number of shares outstanding of the registrant's
class of common stock was 74,520,248.
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
PAGE
----
Item 1. Financial Statements 2
Condensed Consolidated Balance Sheets as of
September 30, 2011 (Unaudited) and June 30, 2011 3
Condensed Consolidated Statements of Operations (Unaudited)
for the Three Months Ended September 30, 2011 and 2010 4
Condensed Consolidated Statements of Cash Flows (Unaudited)
for the Three Months Ended September 30, 2011 and 2010 5
Notes to Condensed Consolidated Financial Statements (Unaudited) 6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 14
Item 3. Quantitative and Qualitative Disclosures About Market Risk 18
Item 4. Controls and Procedures 18
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 19
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 19
Item 3. Defaults upon Senior Securities 19
Item 4. Removed and Reserved 19
Item 5. Other Information 19
Item 6. Exhibits 20
Signatures 21
-1-
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
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-2-
30DC, INC. AND SUBSIDIARY
Condensed Consolidated Balance Sheets
September 30, June 30,
2011 2011
---------------- -------------------
Unaudited
Assets
Current Assets
Cash and Cash Equivalents $ 30,359 $ 33,790
Accrued Commissions Receivable 30,616 41,199
Prepaid Expenses 118,841
Assets of Discontinued Operations 101,875 99,375
---------------- -------------------
Total Current Assets 281,691 174,364
Property and Equipment, Net 64,879 84,041
Goodwill 1,503,860 1,503,860
---------------- -------------------
Total Assets $ 1,850,430 $ 1,762,265
================ ===================
Liabilities and Stockholders' Deficiency
Current Liabilities
Accounts Payable $ 584,242 $ 565,534
Accrued Expenses and Refunds 316,948 335,288
Deferred Revenue 437,123 273,641
Due to Related Parties 361,550 262,761
Liabilities of Discontinued Operations 383,866 381,399
---------------- -------------------
Total Current Liabilities 2,083,729 1,818,623
---------------- -------------------
Total Liabilities 2,083,729 1,818,623
---------------- -------------------
Stockholders' Deficiency
Preferred Stock, Par Value $0.001, 10,000,000 Authorized, -0- Issued - -
Common Stock, Par Value $0.001, 100,000,000 authorized,
74,520,248 issued and outstanding 74,520 74,520
Paid in Capital 2,758,001 2,758,001
Accumulated Deficit (3,003,014) (2,767,957)
Accumulated Other Comprehensive Loss (62,806) (120,922)
---------------- -------------------
Total Stockholders' Deficiency (233,299) (56,358)
---------------- -------------------
Total Liabilities and Stockholders' Deficiency $ 1,850,430 $ 1,762,265
================ ===================
The accompanying notes are an integral part of the condensed
consolidated financial statements.
-3-
30DC, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Operations and Comprehensive Loss
Three Months Ended September 30
Unaudited
2011 2010
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Revenue
Commissions $ 102,500 $ 97,235
Subscription Revenue 194,889 160,661
Products and Services 14,073 3,632
Seminars and Mentoring 103,796 140,674
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Total Revenue 415,258 402,202
Operating Expenses 641,357 1,338,271
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Operating Loss (226,099) (936,069)
Other Income (Expense)
Foreign Currency Loss (6,402) (7,052)
-------------- -----------------
Total Other Income (Expense) (6,402) (7,052)
-------------- -----------------
Loss From Continuing Operations (232,501) (943,121)
(Loss) Income From Discontinued Operations (2,556) 1,800
-------------- -----------------
Net Loss (235,057) (941,321)
Foreign Currency Translation Gain (Loss) 58,116 (74,352)
-------------- -----------------
Comprehensive Loss $ (176,941) $ (1,015,673)
============== =================
Weighted Average Common Shares Outstanding
Basic 74,520,248 62,753,972
Diluted 74,520,248 62,753,972
Loss Per Common Share (Basic and Diluted)
Continuing Operations $ (0.00) $ (0.02)
Discontinued Operations (0.00) 0.00
Net Loss Per Common Share $ (0.00) $ (0.02)
The accompanying notes are an integral part of the condensed
consolidated financial statements.
-4-
30DC, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Cash Flows
Three Months Ended September 30
Unaudited
2011 2010
--------------- ----------------
Cash Flows from Operating Activities:
Net Loss $ (235,057) $ (941,321)
Loss (Gain) From Discontinued Operations 2,556 (1,800)
Adjustments to Reconcile Loss from Continuing Operations
to Net Cash Used In Operations
Depreciation and Amortization 17,378 16,506
Equity Based Payments To Non-Employees - 266,900
Write-off of Deferred Financing Costs - 7,500
Changes in Operating Assets and Liabilities
Accrued Commissions Receivable 6,519 9,955
Prepaid Expenses (118,841) -
Accounts Payable 39,955 (33,500)
Accrued Expenses and Refunds (3,840) 288,615
Deferred Revenue 187,603 24,698
Due to Related Parties 98,789 260,542
--------------- ----------------
Net Cash Used in Operating Activities (4,938) (101,905)
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Cash Flows from Investing Activities
Purchases of Property and Equipment (5,379) (1,806)
Cash - Acquired In Acquisition of Infinity - 3,350
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Net Cash (Used in) Provided By Investing Activitities (5,379) 1,544
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Cash Flows from Financing Activities
Sale of common stock, net - 129,400
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Net Cash Provided by Financing Activities - 129,400
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Cash Flows from Discontinued Operations
Cash Flows From Operating Activities (2,589) (350)
--------------- ----------------
Net Cash Used in Discontinued Operations (2,589) (350)
--------------- ----------------
Effect of Foreign Exchange Rate Changes on Cash 9,475 (3,976)
--------------- ----------------
(Decrease) Increase in Cash and Cash Equivalents (3,431) 24,713
Cash and Cash Equivalents - Beginning of Period 33,790 28,405
--------------- ----------------
Cash and Cash Equivalents - End of Period $ 30,359 $ 53,118
=============== ================
Supplemental Disclosures of Non Cash Financing Activity
Private Placement Subscriptions Received Reclassified to Equity $ - $ 501,590
Common Stock Issued to Settle Liabilities $ - $ 279,125
The accompanying notes are an integral part of the condensed
consolidated financial statements.
-5-
30DC, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
(UNAUDITED)
NOTE 1. DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND LIQUIDITY
--------------------------------------------------------------------
30DC, Inc., Delaware, ("30DC DE") was incorporated on October 17, 2008 in the
state of Delaware, as a holding company, for the purpose of building, acquiring
and managing international web-based sales and marketing companies. On July 15,
2009, 30DC DE completed the acquisitions of the business and assets of 30 Day
Challenge ("30 Day") and Immediate Edge ("Immediate"). 30 Day was acquired from
the Marillion Partnership and Edward Wells Dale, both of Victoria, Australia, in
consideration for the issuance of 2,820,000 shares of Common Stock of 30DC DE.
Immediate was acquired from Dan Raine of Cheshire, United Kingdom, in
consideration for the issuance of 600,000 shares of Common Stock of 30DC DE. The
acquired businesses were sold subject to specific liabilities which included
accounts payable, accrued expenses and deferred revenue. The acquisitions were
pursuant to an agreement dated November 14, 2008. Mr. Dale and Mr. Raine were
part of the founding group of shareholders of 30DC DE and in conjunction with
the acquisitions, Mr. Dale was named the Chief Executive Officer of 30DC DE. In
accordance with the provisions of Accounting Standards Codification ("ASC") 805,
"Business Combinations", the acquisitions of 30 Day and Immediate were accounted
for as transactions between entities under common control, whereby the acquired
assets and liabilities of 30 Day and Immediate were recognized in the financial
statements at their carrying amounts.
On September 10, 2010, shareholders of 30DC DE exchanged 100% of their 30DC DE
shares for 60,984,000 shares of Infinity Capital Group, Inc. ("Infinity"), a
publicly traded company which trades over the counter ("OTC") on the OTC Pink
market operated by OTC Market Group, Inc. 30DC DE became a wholly owned
subsidiary of Infinity Capital Group, Inc. which has subsequently changed its
name to 30DC, Inc. ("30DC" and together with its subsidiary "the Company").
After the share exchange, the former shareholders in 30DC DE held approximately
90% of the outstanding shares in Infinity and the officers of 30DC DE became the
officers of Infinity. 30DC DE was the accounting acquirer in the transaction and
its historical financial statements will be the historical financial statements
of 30DC. Infinity's operations were discontinued and subsequent to the share
exchange are accounted for as discontinued operations.
30DC offers internet marketing services and related training that help Internet
companies in operating their businesses. 30DC's core business units are 30 Day
and Immediate. 30 Day, with approximately 100,000 active online participants,
offers a free e-commerce training program year round along with an online
education subscription service and periodic premium live seminars that are
targeted to experienced internet business operators. Immediate is an online
educational program subscription service offering high-end Internet marketing
instruction and strategies for experienced online commerce practitioners. Other
revenue streams include sales of instructional courses and software tools
related to internet marketing and from commissions on third party products sold
via introduction to the 30DC customer base of active online participants and
subscribers which are referred to as affiliate marketing commissions. The
Company's recorded and unrecorded assets consist primarily of property and
equipment, goodwill and internally developed intangible property such as domain
names, websites, customer lists and copyrights.
On August 24, 2011, the Company entered into a Share Sale and Purchase Agreement
(the "Purchase") with RivusTV Ltd, ("Rivus") which was organized and exists in
Victoria, Australia. Rivus offers a solution to broadcast digital content across
the Internet on a revenue share basis. The purchase price for 100% of Rivus'
issued and outstanding shares is 45% of 30DC's adjusted issued and outstanding
shares immediately prior to closing which equates to 31% of the total
outstanding after closing without regards to the adjustment factor. The
adjustment factor to 30DC's outstanding shares accounts for 30DC's non-operating
liabilities and is expected to increase the deemed outstanding by approximately
four million shares which would increase Rivus post closing ownership by an
additional 1%. The Purchase is subject to both 30DC and Rivus completing
satisfactory due diligence on each other and a minimum capital raise of $5
million AUD (currently $5.21 million USD) by March 31, 2012 or such other that
date that the parties shall agree. There can be no assurance the Purchase will
be completed.
-6-
30DC, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
(UNAUDITED)
GOING CONCERN
The condensed consolidated financial statements have been prepared using
accounting principles generally accepted in the United States of America
applicable for a going concern which assumes that the Company will realize its
assets and discharge its liabilities in the ordinary course of business. As of
September 30, 2011, the Company has a working capital deficit of approximately
$1,802,038 and has accumulated losses of approximately $3,003,014 since its
inception. Its ability to continue as a going concern is dependent upon the
ability of the Company to obtain the necessary financing to meet its obligations
and pay its liabilities arising from normal business operations when they come
due and upon attaining profitable operations. The Company does not have
sufficient capital to meet its needs and continues to seek loans or equity
placements to cover such cash needs. No commitments to provide additional funds
have been made and there can be no assurance that any additional funds will be
available to cover expenses as they may be incurred. 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, issuance of additional shares of the
Company's stock to settle operating liabilities which would dilute existing
shareholders, curtailing its operations, suspending the pursuit of its business
plan and controlling overhead expenses. The Company cannot provide any assurance
that new financing will be available to it on commercially acceptable terms, if
at all. These conditions raise substantial doubt about the Company's ability to
continue as a going concern. These consolidated financial statements do not
include any adjustments to the amounts and classification of assets and
liabilities that may be necessary should the Company be unable to continue as a
going concern.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
--------------------------------------------------
BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with United States generally accepted accounting
principles ("GAAP") and with instructions to Form-10Q and Article 10 of
Regulation S-X. Accordingly, they do not include all the information required by
GAAP for a complete set of financial statements. In the opinion of management,
all adjustments, (including normal recurring accruals) considered necessary for
a fair presentation have been included in the financial statements. Operating
results for the interim period are not necessarily indicative of the results
that may be expected for the fiscal year ended June 30, 2012 or any other
period. In addition, the balance sheet data at June 30, 2011 was derived from
the audited financial statements but does not include all disclosures required
by GAAP. This Form 10-Q should be read in conjunction with the Audited Financial
Statements for the year ended June 30, 2011 included in the Company's annual
report on Form 10-K which was filed on December 13, 2011.
The unaudited condensed consolidated financial statements include the accounts
of 30DC, Inc., (f/k/a Infinity Capital Group, Inc.) and its subsidiary 30DC DE
for the period beginning September 10, 2010, the date of the share exchange with
Infinity, and ending September 30, 2011. For the period beginning July 1, 2010
and ending September 10, 2010 only the accounts of 30DC DE are included in the
financial statements.
NET LOSS PER SHARE
The Company computes net loss per share in accordance with ASC 260 "Earnings per
Share." Under ASC 260, basic net loss per share is computed by dividing net loss
per share available to common stockholders by the weighted average number of
shares outstanding for the period and excludes the effects of any potentially
dilutive securities. Diluted earnings per share, if presented, would include the
dilution that would occur upon the exercise or conversion of all potentially
dilutive securities into common stock using the "treasury stock" and/or "if
converted" methods as applicable. The computation of basic loss per share
excludes potentially dilutive securities consisting of 3,401,522 warrants and
-7-
30DC, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
(UNAUDITED)
600,000 options for the three months ended September 30, 2011 and 5,108,410
warrants and 600,000 options for the three months ended September 30, 2010
because their inclusion would be anti-dilutive. In computing net loss per share,
warrants with an insignificant exercise price are deemed to be outstanding
common stock.
RECENT ACCOUNTING PRONOUNCEMENTS
Management does not believe that any recently issued, but not effective,
accounting standards, if currently adopted, would have a material effect on the
Company's financial statements.
NOTE 3. DISCONTINUED OPERATIONS
-------------------------------
On September 10, 2010, immediately prior to the share exchange with 30DC DE,
Infinity withdrew its election to operate as a Business Development Company
("BDC") under the Investment Company Act of 1940 ("1940 Act"). Infinity
historically operated as a non-diversified, closed-end management investment
company and prepared its financial statements as required by the 1940 Act. 30DC
is no longer actively operating the BDC and the assets, liabilities and results
of operations of Infinity's former business are shown as discontinued operations
in the Company's financial statements subsequent to the share exchange with
30DC.
Results of Discontinued Operations for the
Three Months Ended Three Months Ended
September 30, 2011 September 30, 2010
------------------- -------------------
Revenues $ - $ -
Operating expenses 5,056 1,700
Loss from operations (5,056) (1,700)
Unrealized gain on marketable securities 2,500 3,500
------------------- -------------------
Net (loss) income $ (2,556) $ 1,800
=================== ===================
Assets and Liabilities of Discontinued Operations as of
September 30, 2011 June 30, 2011
------------------ --------------
ASSETS
Marketable securities $ 101,875 $ 99,375
------------------ --------------
Total assets of discontinued operations $ 101,875 $ 99,375
================== ==============
LIABILITIES
Accounts payable $ 93,667 $ 94,139
Accrued expenses 50,672 46,233
Notes payable 132,020 135,020
Due to related parties 107,507 106,007
------------------ --------------
Total liabilities of discontinued operations $ 383,866 $ 381,399
================== ==============
-8-
30DC, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
(UNAUDITED)
Notes Payable
Included in liabilities of discontinued operations at September 30, 2011 and
June 30, 2011 are $190,367 and $193,367 respectively (including $58,347 at each
date of notes payable included in due to related parties) in notes payable plus
related accrued interest of which are all in default for lack of repayment by
their due date. For the three months ended September 30, 2011 and for the period
subsequent to the share exchange with 30DC DE through September 30, 2010 the
Company incurred interest expense on notes payable of $4,439 and $1,490
respectively which is included in the Statement of Operations under income
(loss) from discontinued operations.
NOTE 4. PRO FORMA FINANCIAL INFORMATION
---------------------------------------
The following unaudited consolidated pro forma information gives effect to the
share exchange with Infinity (discussed in Note 1) as if this transaction had
occurred at the beginning of each period presented. The following unaudited pro
forma information is presented for illustration purposes only and is not
necessarily indicative of the results that would have been attained had the
acquisition of this business been completed at the beginning of each period
presented, nor are they indicative of results that may occur in any future
periods.
Three Months Ended September
30, 2010
(Unaudited)
-------------------------------
Revenues $ 402,202
Operating Expenses 1,383,649
-------------------------------
Loss from Continuing Operations (981,447)
Loss from Discontinued Operations (25,698)
-------------------------------
Net Loss (1,007,145)
Foreign Currency Translation Loss (74,352)
-------------------------------
Comprehensive Loss $ (1,081,497)
===============================
Basic and Diluted Loss Per Share $(.01)
Weighted Average Shares Outstanding -
Basic & Diluted 67,806,849
NOTE 5. RELATED PARTY TRANSACTIONS
-----------------------------------
The Company entered into three-year Contract For Services Agreements commencing
July 2009 with the Marillion Partnership ("Marillion") for services which
includes Mr. Edward Dale acting as the Company's Chief Executive Officer, with
23V Industries, Ltd. ("23V") for services which include Mr. Dan Raine acting as
the Company's Vice President of Business Development and with Jesselton, Ltd.
("Jesselton") for services which include Mr. Clinton Carey acting as the
Company's Chief Operating Officer. Effective April 1, 2010, Raine Ventures, LLC
replaced 23V Industries, Ltd in providing consulting services to the Company
which include Mr. Raine acting as the Company's Vice President of Business
Development. These agreements are non-cancelable by either party for the initial
two years and then with six months notice by either party for the duration of
the contract. Mr. Dale and Mr. Carey are directors of the Company, Mr. Dale and
Mr. Raine are both beneficial owners of greater than 10% of the Company's
outstanding common stock. Marillion Partnership is owned by affiliates of Mr.
Dale. 23V and Raine Ventures are owned 100% by Mr. Raine.
Cash remuneration under the Marillion, 23V and Raine Ventures agreements is
$250,000 per year and $200,000 under the Jesselton agreement. As further
-9-
30DC, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
(UNAUDITED)
described in footnote 11, cash remuneration for the Marillion and Jesselton
agreements has been amended for the year ended June 30, 2012 to $317,825 and
$254,260 Australian Dollars respectively. If in any year starting from the
commencement date, revenues of 30DC, Inc. doubles then a bonus equal to 50% of
cash remuneration will be due in shares of 30DC, Inc. as additional
compensation. The bonus was not earned in the fiscal year ending June 30, 2011
and nothing has been accrued in the September 30, 2011 financial statements,
since the proportionate amount to reach the bonus for the fiscal year ending
June 30, 2012 has not been earned.
30DC's Board of Directors approved a bonus to Marillion based upon the net cash
flow of the Company's 30 Day Challenge division and a bonus to 23V (succeeded by
Raine Ventures) based upon the net cash flow of the Company's Immediate Edge
division until such time as 30DC had completed a merger or public stock listing,
which occurred on September 10, 2010. For the three month period ended September
30, 2010 the bonus for Marillion was $79,643, all earned prior to September 10,
2010 and total compensation was $142,143 and the bonus for Raine Ventures was
$-0- and total compensation was $62,500. For the three month period ended
September 30, 2011 total compensation earned by Marillion was $79,456 AUD
($83,640 USD) and total compensation earned by Raine Ventures was $62,500.
Subsequent to the September 10, 2010 merger, Marillion and Raine Ventures are
being paid in accordance with their annual contracted amounts and bonuses based
upon net cash flow are no longer applicable. The annual contracted amounts are
not required to be paid proportionately throughout the year and amounts may vary
from period to period. During the three months ended September 30, 2011
Marillion was paid $202,429 AUD ($213,089 USD) of which $118,841 is included in
prepaid expenses in the current assets section of the balance sheet.
Due to related parties includes $166,632 due to Jesselton, which primarily
consists of $56,253 for contractor fees and $108,000 for fees related to the
share exchange between 30DC DE and Infinity, and $171,000 due to Theodore A.
Greenberg, 30DC's CFO for compensation.
NOTE 6. PROPERTY AND EQUIPMENT
-------------------------------
Property and equipment consists of the following:
September 30, 2011 June 30, 2011
------------------ -------------
Computer and Audio Visual Equipment $ 411,258 $ 450,630
Office equipment and Improvements 65,191 71,870
------------------ -------------
476,449 522,500
Less accumulated depreciation and amortization (411,570) (438,459)
------------------ -------------
$ 64,879 $ 84,041
================== =============
Depreciation and amortization expense was $17,378 for the three months ended
September 30, 2011 and $16,506 for the three months ended September 30, 2010
Property and equipment, net are stated in the functional currency where located
and where applicable are translated to the reporting currency of the US Dollar
at each period end. Accordingly, property and equipment, net are subject to
change as a result of changes in foreign currency exchange rates.
NOTE 7. INCOME TAXES
---------------------
As of June 30, 2011, the Company had net operating loss carryovers for United
States income tax purposes of approximately $1,524,300, which begin to expire in
2031. The U.S. net operating loss carryovers may be subject to limitation under
Internal Revenue Code Section 382 should there be a greater than 50% change in
ownership as determined under the regulations. The Company has filed all federal
tax returns and is in the process of filing its state and local returns for
Infinity since 2005. The Company has not provided a tax benefit for the three
months ended September 30, 2011 and September 30, 2010 as it is not more likely
than not that such benefit will be realized. All unfiled income tax returns are
-10-
30DC, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
(UNAUDITED)
subject to income tax examination by tax authorities and the statute of
limitations for tax examinations does not begin to run until returns are filed.
Filed tax returns are subject to examination beginning with the period ended
December 31, 2008.
As a corporation formed in the United States, the Company is subject to the
United States corporation income tax on worldwide income. Since majority
ownership of the Company's shares are held by Australian residents, the Company
is deemed to be an Australian resident corporation and is subject to Australian
corporate income tax on worldwide net income which for Infinity was from the
time of the share exchange discussed in Note 1. Corporate income taxes paid to
Australia will generally be available as a credit against United States
corporation income tax. Prior to the share exchange with Infinity, the Company
did not have nexus to any individual state in the United States and accordingly
no deferred tax provision has been recognized for state taxes. Australia does
not have any state corporation income tax. Future changes in Company operations
might impact the geographic mix which could affect the Company's overall
effective tax rate.
The Company applies the provisions of ASC 740 "Income Taxes", which provides
clarification related to the process associated with accounting for uncertain
tax positions recognized in the interim financial statements. ASC 740 prescribes
a more likely than not threshold for financial statement recognition and
measurement of a tax position taken, or expected to be taken, in a tax return.
ASC 740 also provides guidance related to, amongst other things, classification,
accounting for interest and penalties associated with tax positions, and
disclosure requirements.
The Company classifies interest and penalties, if any, related to tax
uncertainties as income tax expense. There have not been any material changes in
our liability for unrecognized tax benefits, including interest and penalties,
during the three months ended September 30, 2011. The Company does not currently
anticipate that the total amount of unrecognized tax benefits will significantly
increase or decrease within the next twelve months.
NOTE 8. REVENUE CONCENTRATION
------------------------------
For the three months ended September 30, 2010 the Company earned revenue from
one customer representing approximately 13% of sales. For the three months ended
September 30, 2011 no customers exceeded 10% of revenue.
NOTE 9. STOCKHOLDERS' EQUITY
----------------------------
WARRANTS AND OPTIONS
The Company has 600,000 fully vested options outstanding as follows:
404,000 options exercisable at 80 cents per share expiring August 7, 2018
196,000 options exercisable at 50 cents per share expiring January 5, 2019
192,500 of these options are held by Pierce McNally a director of the Company
and the balance are held by a former employee and former directors of Infinity.
161,163 warrants (net of forfeitures) are due to Imperial Consulting Network
under an agreement signed in June 2010 at an exercise price of $0.0001 per
share. Such warrants are yet to be issued.
Pursuant to a private placement memorandum ("PPM") issued in August 2010 the
Company offered units consisting of one share of common stock, one warrant at 37
cents per share exercisable until March 15, 2011 ("37-Cent Warrant") and one
warrant at 50 cents per share exercisable five years from the date of issuance
("50-Cent Warrant") for a price of 26 cents per unit. A first closing was held
-11-
30DC, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
(UNAUDITED)
on September 22, 2010 under which 2,554,205 37 Cent-Warrants were issued along
with 2,554,205 50-Cent Warrants expiring September 22, 2015. From November 2010
through March 2011, an additional 847,317 37-Cent Warrants were issued and
847,317 50-Cent Warrants were issued. All of the 37-Cent Warrants expired March
15, 2011 unexercised.
During the three months ended September 30, 2011, the Company did not issue any
common stock, options or warrants.
NOTE 10. SUPPLEMENTAL SCHEDULE OF OPERATING EXPENSES
----------------------------------------------------
Three Months Ended Three Months Ended
September 30, 2011 September 30, 2010
------------------ ------------------
Related Party Contractor Fees Base Compensation (1) $ 213,052 $ 175,000
Related party Contractor Fees Bonus Compensation (1)(2) - 79,643
Officer's Salary 50,000 50,000
Independent Contractors 114,359 168,769
Transaction Fees (3) - 670,138
Professional Fees 136,776 57,362
Travel Expenses 9,436 54,519
Other Operating Costs 117,734 82,840
------------------ ------------------
Total Operating Expenses $ 641,357 $ 1,338,271
================== ==================
---------------------------------------------------------------------
(1) Related party contractors include Marillion which provides services to
the Company including for Edward Dale to act as Chief Executive Officer
of the Company, Raine Ventures which provides services to the Company
including for Dan Raine to act as Vice President for Business
Development and Jesselton, Ltd. which provides services to the Company
including Clinton Carey serving as Chief Operating Officer of the
Company. The annual contracted amounts are not required to be paid
proportionately throughout the year, however expense is recognized
proportionately throughout the year, and amounts may vary from period
to period due to fluctuations in foreign currency exchange rates.
(2) 30DC's Board of Directors approved a bonus to Marillion based upon the
net cash flow of the Company's 30 Day Challenge division (formerly 30
Day) and a bonus to Raine Ventures based upon the net cash flow of the
Company's Immediate Edge division (formerly Immediate) until such time
as 30DC had completed a merger or public stock listing which occurred
on September 10, 2010.
(3) Transaction fees were incurred upon completion of the 30DC/Infinity
share exchange for consulting services which resulted in completion of
the share exchange. $250,000 was due to Jesselton, Ltd., $250,000 AUD
($231,050) was due to Corholdings Pty, Ltd. and Prestige was due
675,314 common shares which were valued at $189,088.
-12-
30DC, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2011
(UNAUDITED)
NOTE 11. SUBSEQUENT EVENTS
---------------------------
On December 12, 2011 cash remuneration for the contract for services agreements
with Marillion and Jesselton was amended for the year ended June 30, 2012 to the
Australian Dollar equivalent of the originally contracted amounts at the
exchange rate on the contract start date of July 15, 2009. The Marillion
original contract amount of $250,000 has been amended to $317,825 AUD Dollars
and the Jesselton original contract amount of $200,000 has been amended to
$254,260 AUD.
Management has evaluated subsequent events to determine if events or
transactions occurring through the date on which the financial statements were
available to be issued, require potential adjustment to or disclosure in the
Company's financial statements.
-13-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
--------------------------------------------------------------------------------
THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH OUR UNAUDITED
FINANCIAL STATEMENTS AND NOTES THERETO INCLUDED HEREIN. IN CONNECTION WITH, AND
BECAUSE WE DESIRE TO TAKE ADVANTAGE OF, THE "SAFE HARBOR" PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, WE CAUTION READERS REGARDING
CERTAIN FORWARD LOOKING STATEMENTS IN THE FOLLOWING DISCUSSION AND ELSEWHERE IN
THIS REPORT AND IN ANY OTHER STATEMENT MADE BY, OR ON OUR BEHALF, WHETHER OR NOT
IN FUTURE FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. FORWARD-LOOKING
STATEMENTS ARE STATEMENTS NOT BASED ON HISTORICAL INFORMATION AND WHICH RELATE
TO FUTURE OPERATIONS, STRATEGIES, FINANCIAL RESULTS OR OTHER DEVELOPMENTS.
FORWARD LOOKING STATEMENTS ARE NECESSARILY BASED UPON ESTIMATES AND ASSUMPTIONS
THAT ARE INHERENTLY SUBJECT TO SIGNIFICANT BUSINESS, ECONOMIC AND COMPETITIVE
UNCERTAINTIES AND CONTINGENCIES, MANY OF WHICH ARE BEYOND OUR CONTROL AND MANY
OF WHICH, WITH RESPECT TO FUTURE BUSINESS DECISIONS, ARE SUBJECT TO CHANGE.
THESE UNCERTAINTIES AND CONTINGENCIES CAN AFFECT ACTUAL RESULTS AND COULD CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN ANY FORWARD LOOKING
STATEMENTS MADE BY, OR ON OUR BEHALF. WE DISCLAIM ANY OBLIGATION TO UPDATE
FORWARD-LOOKING STATEMENTS.
OVERVIEW
30DC Inc. (Delaware) ("30DC DE") was incorporated on October 17, 2008 in the
state of Delaware and prior to July 15, 2009, 30DC DE had no active business
operations. On July 15, 2009, 30DC acquired the business of the "30 Day
Challenge" and "Immediate Edge" from two of 30DC's founding shareholders as part
of a plan to consolidate their business operations. 30DC DE was created to build
and manage international web-based sales and marketing companies. 30 Day
Challenge and Immediate Edge are 30DC DE's two business divisions. 30 Day
Challenge offers a free online ecommerce training program and an online
education subscription service. In addition, periodic premium live seminars are
produced which are intended to target experienced Internet business operators.
Immediate Edge is an online education program subscription service offering
high-end internet marketing instruction and strategies for experienced online
commerce practitioners.
On September 10, 2010, Infinity Capital Group, Inc., a Maryland Corporation,
("Infinity") entered into a Plan and Agreement of Reorganization (the
"Agreement") with 30DC DE, and the Shareholders of 30DC DE. ("30DC DE
Shareholders"). In exchange for 100% of the issued and outstanding shares of
30DC DE, Infinity issued 60,984,000 shares of its restricted common stock. The
shareholders of 30DC DE received 13.2 shares of common stock of Infinity for
every one share of 30DC DE. Upon closing Messrs. Edward Dale and Clinton Carey
were appointed to the Infinity Board of Directors and subsequently Infinity was
renamed 30DC, Inc. (Maryland) ("30DC"). Mr. Dale is the President, Chief
Executive Officer and a director of 30DC. In addition, he is the manager of the
former majority shareholder of 30DC DE, Marillion Partnership. Mr. Carey is the
Chief Operating Officer and a director of 30DC DE. Further, Mr. Dale was
appointed the Chief Executive Officer of Infinity and Mr. Carey was appointed
the Chief Operating Officer of Infinity.
Infinity, as a result of the transaction, became the sole outstanding
shareholder of 100% of the outstanding common stock of 30DC DE. For purposes of
accounting, 30DC DE was considered the accounting acquirer. As of the date of
the transaction, Infinity discontinued its historical operations and the
business of 30DC DE is now the business of 30DC.
On August 24, 2011 the Company entered into a Share Sale and Purchase Agreement
(the "Purchase") with RivusTV Ltd, ("Rivus") which was organized and exists in
Victoria, Australia. Rivus offers a solution to broadcast digital content across
the Internet on a revenue share basis. The purchase price for 100% of Rivus'
issued and outstanding shares is 45% of 30DC's adjusted issued and outstanding
-14-
shares immediately prior to closing which equates to 31% of the total
outstanding shares after closing without regards to the adjustment factor. The
adjustment factor to 30DC's outstanding shares accounts for 30DC's non-operating
liabilities, as defined and is expected to increase the deemed outstanding by
approximately four million shares which would increase Rivus post closing
ownership by an additional 1%. The Purchase is subject to both 30DC and Rivus
completing satisfactory due diligence on each other and a minimum capital raise
of $5 million AUD (currently $5.21 million USD) by March 31, 2012 or such other
that date that the parties shall agree. There can be no assurance the Purchase
will be completed.
The Company has no plans at this time for purchases or sales of fixed assets
which would occur in the next twelve months.
Other than the Purchase (as defined in Note 1 to the financial statements), the
Company has no expectation or anticipation of significant changes in number of
employees in the next twelve months.
RESULTS OF OPERATIONS
FOR THE THREE MONTH PERIOD ENDED SEPTEMBER 30, 2011 COMPARED TO THE THREE MONTH
PERIOD ENDED SEPTEMBER 30, 2010.
During the three months ended September 30, 2011, 30DC, Inc. recognized revenues
of $415,258 from its operations compared to $402,202 during the three months
ended September 30, 2010. Revenues of the Company were from the following
sources during the three months ended September 30, 2011 compared to September
30, 2010.
Three Months Ended Three Months Ended Increase or
September 30, 2011 September 30, 2010 (Decrease)
-------------------- -------------------- ------------
Revenue
Commissions $ 102,500 $ 97,235 $ 5,265
Subscription Revenue 194,889 160,661 34,228
Products and Services 14,073 3,632 10,441
Seminars and Mentoring 103,796 140,674 (36,878)
-------------------- -------------------- ------------
Total Revenues $ 415,258 $ 402,202 $ 13,056
-------------------- -------------------- ------------
The $34,228 increase in subscription revenue was due to a net increase in active
subscribers for the Immediate Edge offset by a net decrease in active
subscribers for the lower priced Challenge Plus. For the three months ended
September 30, 2011 the Immediate Edge active subscriber base averaged 547 per
month and for the three months ended September 30, 2010 the Immediate Edge
active subscriber base averaged 435 per month. For the three months ended
September 30, 2011 the Challenge Plus active subscriber base averaged 364 per
month and for the three months ended September 30, 2010 the Challenge Plus
active subscriber base averaged 441 per month. The increase in Immediate Edge
subscribers resulted from a promotion in May 2011 which resulted in
approximately 300 new subscribers although approximately 200 of those only
subscribed for one or two months and were not active subscribers at September
30, 2011. The Company's Challenge Plus subscription product was started in 2009
and marketed to the entire active participant database resulting in a large
initial subscriber base which has leveled off over time resulting in fewer
current active subscribers.
The $10,441 increase in products and services revenue was primarily due to sale
of one of the Company's products during the quarter ended September 30, 2011
which was not offered for sale in the quarter ended September 30, 2010.
The $36,878 decrease in seminars and mentoring income resulted from a decrease
in the number of customers participating in the Company's mentoring program
which is priced from $5,000 to $10,000 per year and the revenue from which is
-15-
recognized ratably over the one year term. For the three months ended September
30, 2011 there was an average of 77 mentoring students per month and for the
three months ended September 30, 2010 there was an average of 98 mentoring
students.
During the three months ended September 30, 2011, the Company incurred $641,357
in operational expenses compared to $1,338,271 during the three months ended
September 30, 2010. Operational expenses during the three months ended September
30, 2011 and 2010, include the following categories:
Three Months Ended Three Months Ended Increase or
September 30, 2011 September 30, 2010 Decrease
------------------------------------------------------
Accounting Fees $ 115,388 $ 31,306 $ 84,082
Paypal Fees 12,896 10,178 2,718
Commissions 13,922 5,467 8,455
Independent Contractors 114,359 168,769 (54,410)
Depreciation 17,378 16,506 872
Internet Expenses 16,458 14,914 1,544
Legal Fees 21,388 26,056 (4,668)
Officer's Salaries 50,000 50,000 -
Payroll Taxes 10,212 11,245 (1,033)
Related Party Contractors 213,052 254,643 (41,591)
Telephone 34,544 5,568 28,976
Transaction Fees - 670,138 (670,138)
Travel & Entertainment 9,705 54,519 (44,814)
Other Operating Expenses 12,055 18,962 (6,907)
------------------------------------------------------
Total Operating Expenses $ 641,357 $ 1,338,271 $ (696,914)
======================================================
The increase of $84,082 in accounting fees was primarily related to an increase
in auditing fees due to multiple filings during the September 2011 quarter
covering a number of prior periods.
The increase of $8,455 in commissions resulted from additional affiliate
commissions due to the increase in products sold in the September 2011 quarter
compared to the September 2010 quarter.
The decrease of $54,410 in independent contractors is primarily due to the
approximately $41,000 cost of investor relations consultants in the September
2010 quarter and the reduction of one contractor in the IE division who was paid
approximately $12,000 per quarter.
Related Party Contractor Fees consist of payments to Marillion Partnership,
Raine Ventures, LLC and Jesselton, Ltd. under contracts for services which
include Ed Dale acting as 30DC's Chief Executive Officer, Dan Raine acting as
30DC's Vice President of Business Development and Clinton Carey acting as 30DC's
Chief Operating Officer respectively. The $41,591 net decrease results from a
decrease of $79,643 for payments made to Marillion in the September 2010 quarter
as a bonus based upon the net cash flow of the 30 Day Challenge division which
was no longer applicable after the share transaction with Infinity in September
2010 offset by an approximately $31,000 increase due to a change in cash
remuneration under the Marillion and Jesselton contracts to the Australian
Dollar equivalent of the original contracted amounts based upon the exchange
rate at July 15, 2009 which was the effective date of the contracts.
The increase in telephone expense of $28,976 is partly due to a premium
high-volume internet package which costs approximately $4,000 per month which
was not in place during the three months ended September 30, 2010.
-16-
The decrease of $670,138 in transaction fees was due to consultants advising on
the process which resulted in completion of the share exchange with Infinity
during the September 2010 quarter including $250,000 to Jesselton, Ltd.,
$231,050 ($250,000 AUD) to Corholdings Pty Ltd and $189,088 to Prestige
Financial Center, Inc.
The decrease of $44,814 in travel and entertainment reflects fewer overseas
trips during the quarter ended September 30, 2011 than during the quarter ended
September 30, 2010.
During the three months ended September 30, 2011, the Company recognized a net
loss from continuing operations of ($232,501) compared to a net loss of
($943,121) during the three months ended September 30, 2010. The decreased loss
of $710,620 was due to the decrease in operating expenses of $696,914 and the
increase in revenues of $13,056.
LIQUIDITY AND CAPITAL RESOURCES
The Company had a cash balance of $30,359 at September 30, 2011 and the Company
had a working capital deficit of $1,802,038. To fund working capital for the
next twelve months, the Company expects to raise additional capital, to settle
liabilities using the Company's stock and to improve the results of operations
from increasing revenue and a reduction in operating costs. As further discussed
in Note 1 to the financial statements, the Company has signed an agreement with
RivusTV Ltd. pursuant to which the companies have initiated a joint capital
raising effort.
Included in liabilities of discontinued operations at September 30, 2011 is
$190,367 (including $58,347 included in due to related parties) in notes payable
plus related accrued interest that are in default for lack of repayment by their
due date.
During the three month period ended September 30, 2011, the Company used $4,938
in operating activities. During the three month period ended September 30, 2010,
the Company used $109,405 in operating activities. The decreased use of funds of
$104,467 was due to the decreased operating loss offset by expenses paid or
settled with shares of the Company's common stock and accrued but unpaid
expenses during the three months ended September 2010.
During the three month period ended September 30, 2011, financing activities
provided the Company with $-0-. During the three month period ended September
30, 2010, financing activities provided the Company with $136,900. Receipts from
the Company's private placement memorandum provided the bulk of these funds.
GOING CONCERN
The condensed consolidated financial statements have been prepared using
accounting principles generally accepted in the United States of America
applicable for a going concern which assumes that the Company will realize its
assets and discharge its liabilities in the ordinary course of business. As of
September 30, 2011, the Company has a working capital deficit of approximately
$1,802,000 and has accumulated losses of approximately $3,003,000 since its
inception. Its ability to continue as a going concern is dependent upon the
ability of the Company to obtain the necessary financing to meet its obligations
and pay its liabilities arising from normal business operations when they come
due and upon attaining profitable operations. The Company does not have
sufficient capital to meet its needs and continues to seek loans or equity
placements to cover such cash needs. No commitments to provide additional funds
have been made and there can be no assurance that any additional funds will be
available to cover expenses as they may be incurred. 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, issuance of additional shares of the
Company's stock to settle operating liabilities which would dilute existing
shareholders, curtailing its operations, suspending the pursuit of its business
plan and controlling overhead expenses. The Company cannot provide any assurance
that new financing will be available to it on commercially acceptable terms, if
at all. These conditions raise substantial doubt about the Company's ability to
-17-
continue as a going concern. These condensed consolidated financial statements
do not include any adjustments to the amounts and classification of assets and
liabilities that may be necessary should the Company be unable to continue as a
going concern.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
-------------------------------------------------------------------
The Company earns the majority of its revenue in United States dollars ("USD")
and pays a significant amount of its expense in Australian dollars ("AUD").
Material fluctuations in the exchange rate between USD and AUD may have material
impact on the Company's results of operations.
ITEM 4. CONTROLS AND PROCEDURES
--------------------------------
DISCLOSURES CONTROLS AND PROCEDURES
We have adopted and maintain disclosure controls and procedures (as such term is
defined in Rules 13a 15(e) and 15d-15(e) under the Securities Exchange Act of
1934, as amended (the "Exchange Act")) that are designed to ensure that
information required to be disclosed in our reports under the Exchange Act, is
recorded, processed, summarized and reported within the time periods required
under the SEC's rules and forms and that the information is gathered and
communicated to our management, including our Chief Executive Officer (Principal
Executive Officer) and Principal Financial Officer, as appropriate, to allow for
timely decisions regarding required disclosure.
As required by SEC Rule 15d-15(b) for the quarter ended September 30, 2011, our
Chief Executive Officer and Chief Financial Officer, carried out an evaluation
under the supervision and with the participation of our management, of the
effectiveness of the design and operation of our disclosure controls and
procedures pursuant to Exchange Act Rule 15d-14 as of the end of the period
covered by this report. Based on the foregoing evaluation, they have concluded
that our disclosure controls and procedures are not effective in timely alerting
them to material information required to be included in our periodic SEC filings
and to ensure that information required to be disclosed in our periodic SEC
filings is accumulated and communicated to our management, including our Chief
Executive Officer, to allow timely decisions regarding required disclosure as a
result of the deficiency in our internal control over financial reporting
discussed below.
MANAGEMENT'S QUARTERLY REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING.
With the participation of our Chief Executive Officer and Chief Accounting
Officer, we have evaluated the effectiveness of our disclosure controls and
procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as amended (the " Exchange Act ")), as of the
end of the period covered by this report. Based upon such evaluation, our Chief
Executive Officer and Chief Financial Officer have concluded that, as of the end
of such periods, our disclosure controls and procedures were not effective due
to the material weaknesses noted below, in ensuring that (i) information
required to be disclosed by us in the reports that we file or submit under the
Exchange Act is recorded, processed, summarized and reported, within the time
periods specified in the Securities and Exchange Commission's rules and forms
and (ii) information required to be disclosed by us in the reports that we file
or submit under the Exchange Act is accumulated and communicated to our
management, including our principal executive and principal financial officers,
or persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure.
(1) Due to the small size of its staff, the Company did not have
sufficient segregation of duties to support its internal control
over financial reporting.
(2) The Company has installed accounting software which is not
comprehensive and which does not prevent erroneous or unauthorized
changes to previous reporting periods and does not provide an
adequate audit trail or entries made in the accounting software.
-18-
REMEDIATION OF MATERIAL WEAKNESS
As our current financial condition allows, we are in the process of analyzing
and developing our processes for the establishment of formal policies and
procedures with necessary segregation of duties, which will establish mitigating
controls to compensate for the risk due to lack of segregation of duties.
Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Also, 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.
There was no change in our internal control over financial reporting that
occurred during the fiscal quarter ended September 30, 2011, that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
-------------------------
None.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
-------------------------------------------------------------------
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
---------------------------------------
Included in liabilities of discontinued operations at September 30, 2011 is
$190,367 (including $58,347 included in due to related parties) in notes payable
plus related accrued interest that are in default for lack of repayment by their
due date.
ITEM 4. REMOVED AND RESERVED
----------------------------
ITEM 5. OTHER INFORMATION
-------------------------
None.
(REMAINDER OF PAGE LEFT BLANK INTENTIONALLY)
-19-
ITEM 6. EXHIBITS
----------------
The following is a complete list of exhibits filed as part of this Form 10-Q.
Exhibit numbers correspond to the numbers in the Exhibit Table of Item 601 of
Regulation S-K.
----------------- -- -----------------------------------------------------------
EXHIBIT NO. DESCRIPTION
----------------- -- -----------------------------------------------------------
31.1 Section 302 Certification - CEO
----------------- -- -----------------------------------------------------------
31.2 Section 302 Certification - CFO
----------------- -- -----------------------------------------------------------
32.1 Section 906 Certification - CEO
----------------- -- -----------------------------------------------------------
32.2 Section 906 Certification - CFO
----------------- -- -----------------------------------------------------------
101.INS XBRL Instance Document (1)
----------------- -- -----------------------------------------------------------
101.SCH XBRL Taxonomy Extension Schema Document (1)
----------------- -- -----------------------------------------------------------
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document (1)
----------------- -- -----------------------------------------------------------
101.DEF XBRL Taxonomy Extension Definition Linkbase Document (1)
----------------- -- -----------------------------------------------------------
101.LAB XBRL Taxonomy Extension Label Linkbase Document (1)
----------------- -- -----------------------------------------------------------
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document (1)
--------------------------------------------------------------------------------
(1) Pursuant to Rule 406T of Regulation S-T, this interactive data file is
deemed not filed or part of a registration statement or prospectus for purposes
of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for
purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is
not subject to liability under these sections.
--------------------------------------------------------------------------------
-20-
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
30DC, INC.
---------------
Registrant
Dated: January 31, 2012 By:/s/ Edward Dale
--------------------------------
Edward Dale
Principal Executive Officer
Chief Executive Officer
President
Dated: January 31, 2012 By:/s/ Theodore A. Greenberg
--------------------------------
Theodore A. Greenberg,
Principal Accounting Officer
Chief Financial Officer
-21
