The Company provides for income taxes under ASC Topic 740 which requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect currently.
ASC Topic 740 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. In the Companys opinion, it is uncertain whether they will generate sufficient taxable income in the future to fully utilize the net deferred tax asset.
The Company utilizes the asset and liability method for financial reporting of income taxes. Deferred tax assets and liabilities are determined based on temporary differences between financial reporting and the tax basis of assets and liabilities, and are measured by applying enacted rates and laws to taxable years in which such differences are expected to be recovered or settled. Any changes in tax rates or laws are recognized in the period when such changes are enacted.
As of December 31, 2012, the Company has $12,145 in gross deferred tax assets resulting from net operating loss carry-forwards. A valuation allowance has been recorded to fully offset these deferred tax assets because the Companys management believes future realization of the related income tax benefits is uncertain. Accordingly, the net provision for income taxes is zero for the period June 18, 2010 (inception) to December 31, 2012. The difference between the tax provision at the statutory federal income tax rate on December 31, 2012 and the tax provision attributable to loss before income taxes is as follows:
As of December 31, 2012, the Company had estimated net loss carry forwards of approximately $31,142 which expires through its tax year ending 2031. Utilization of these net operating loss carry forwards may be limited in accordance with IRC Section 382 in the event of certain shifts in ownership.
In April and May 2012, the Company issued notes payable for $1,000 and $1,500 respectively. In August 2012, the Company issued a notes payable for $4,000. In August 2012, the Company issued a note payable for $1,500. In October 2012, the Company issued notes payable of $2,000. All the notes were issued to a non-affiliated party, bear 5% interest and are payable on demand.
Big Clix Corp.
(A Development Stage Company)
Notes to Interim Financial Statements
December 31, 2012
NOTE 5. STOCKHOLDERS DEFICIENCY
As of December 31, 2012, the Company did not have any preferred stock authorized, issued nor outstanding.
On June 18, 2010, the Company issued 12,000,000 of its $0.0001 par value common stock for $8,000 cash and $1,000 in a stock subscription receivable to the founder of the Company. The issuance of the shares was made to the sole officer and director of the Company and an individual who is a sophisticated and accredited investor, therefore, the issuance was exempt from registration of the Securities Act of 1933 by reason of Section 4 (2) of that Act.
On January 26, 2012, the Board of Directors and majority shareholder of Big Clix Corp. affected a 13 for 1 forward stock split of the issued and outstanding shares of common stock. The forward stock split was distributed to all shareholders of record on January 24, 2012.
NOTE 6. RELATED PARTY TRANSACTIONS
As of December 31, 2012, the sole officer and sole director of the Company is involved in other business activities and may, in the future, become involved in other business opportunities that become available. He may face a conflict in selecting between the Company and other business interests. The Company has not formulated a policy for the resolution of such conflicts.
NOTE 7. GOING CONCERN
As of December 31, 2012, the accompanying financial statements have been presented on the basis that it is a going concern in the development stage, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.
For the period June 18, 2010 (date of inception) through December 31, 2012 the Company has had a net loss of $31,142 consisting of SEC audit and review fees, California state taxes, and incorporation fees for the Company to initiate its SEC reporting requirements.
As of December 31, 2012, the Company has not yet emerged from the development stage. In view of these matters, recoverability of any asset amounts presented in the accompanying audited financial statements is dependent upon the Companys ability to begin operations and to achieve a level of profitability. Since inception, the Company has financed its activities principally from the sale of equity securities. The Company intends on financing its future development activities and its working capital needs largely from loans and the sale of public equity securities with some additional funding from other traditional financing sources, including term notes, until such time that funds provided by operations are sufficient to fund working capital requirements.
NOTE 8. CONCENTRATION OF RISKS
The Company maintains its cash in institutions insured by the Federal Deposit Insurance Corporation (FDIC). All other deposit accounts at FDIC-insured institutions were insured up to at least $250,000 per depositor. The Company had no deposits in excess of insured amounts as of December 31, 2012.
NOTE 9. SUBSEQUENT EVENTS
The Company has evaluated events and transactions that occurred subsequent to December 31, 2012 through January 30, 2013, the date the interim financial statements were available to be issued, for potential recognition or disclosure in the accompanying financial statements. Other than the disclosures above, the Company did not identify any events or transactions that should be recognized or disclosed in the accompanying financial statements.
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ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
Big Clix Corp. is a development stage company and was incorporated in Florida on June 18, 2010. Big Clix develops software and systems to create, target, deliver and measure effectiveness of dynamic mobile advertising across the entire campaign lifecycle. Big Clix will also provide start to finish mobile advertising campaign development services.
Results of Operations
The following discussion should be read in conjunction with the condensed financial statements and segment data and in conjunction with the Companys S-1 and amended S-1/As. Results or interim periods may not be indicative of results for the full year.
During the second quarter of the fiscal year 2013, the Company continues to develop a demo system for the dynamic mobile advertising.
The Company did not generate any revenue during the three months ended December 31, 2012.
Total expenses the three (3) months ending December 31, 2012 were $3,123 resulting in an operating loss for the period of $3,123. Basic net loss per share amounting to $.0000 for the three (3) months ending December 31, 2012.
General and Administrative expenses fees for the three (3) months ending December 31, 2012 were $2,373. Professional fees were $750. The increase in expenses was due to the audit and XBRL costs with the SEC filings.
General and Administrative expenses fees for the six (6) months ending December 31, 2012 were $4,166. Professional fees were $4,250. The increase in expenses was due to the audit, Edgar, and XBRL costs with the SEC filings.
Liquidity and Capital Resources
At December 31, 2012 we had working capital deficit of $10,142 consisting of cash on hand of $72, $214 in current liabilities, and $10,000 in a note payable, compared to a working capital deficit of $1,726 at June 30, 2012 and cash of $774.
Net cash used in operating activities for the three months ended December 31, 2012 was $8,202 as compared to $4,523 for the six months ended December 31, 2011.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable to a smaller reporting company.
ITEM 4. CONTROLS AND PROCEDURES
Managements 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 companys principal executive and principal financial officers and effected by the companys 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.
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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. 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, 2012 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 Chief Executive Officer in connection with the review of our financial statements as of December 31, 2012.
Management believes that the material weaknesses set forth in items (2) and (3) above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.
Managements 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 September 30, 2013. Additionally, we plan to test our updated controls and remediate our deficiencies by March 31, 2013.
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.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
ITEM 1A. RISK FACTORS.
Not applicable to a smaller reporting company.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
ITEM 4. MINE SAFETY DISCLOSURES
ITEM 5. OTHER INFORMATION.
ITEM 6. EXHIBITS.
Rule 13(a)-14(a)/15(d)-14(a) Certification of principal executive officer
Rule 13(a)-14(a)/15(d)-14(a) Certification of principal financial and accounting officer
Section 1350 Certification of principal executive officer and principal financial and accounting officer
Interactive Data Files of Financial Statements and Notes.
* In accordance with Regulation S-T, the Interactive Data Files in Exhibit 101 to the Quarterly Report on Form 10-Q shall be deemed furnished and not filed.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Big Clix, Corp.
BY: /s/ Patrick Yore
President, Secretary, Treasurer,
Principal Executive Officer,
Principal Financial and Accounting Officer and Sole Director
Dated: February 6, 2013
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