UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

[X]

Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended June 30, 2013

-OR-

[   ]

Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from ________ to ________.

Commission File Number: 333-161699

PMX COMMUNITIES, INC.

(Exact name of Registrant as specified in its charter)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to section 12(g) of the Act: Common Stock

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 Exchange 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 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 (§ 229.405 of this chapter) during the proceeding 12 months (or for such shorter period that the registrant was required to submit and post such files).                         Yes [x]             No  [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes [ ]    No [x]

The number of outstanding shares of the registrant’s common stock, August 14, 2013:

Common Stock – 77,802,080

DOCUMENTS INCORPORATED BY REFERENCE

  None.

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PMX COMMUNITIES INC AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 2013 (UNAUDITED) AND DECEMBER 31, 2012

See accompanying notes to unaudited consolidated financial statements.

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PMX COMMUNITIES INC AND SUBSIDIARY

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2013 AND 2012

See accompanying notes to unaudited consolidated financial statements.

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PMX COMMUNITIES INC AND SUBSIDIARY

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2013 AND 2012

 See accompanying notes to unaudited consolidated financial statements.

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PMX COMMUNITIES INC AND SUBSIDIARY

NOTES TO CONDENSED FINANCIAL STATEMENTS

JUNE 30, 2013

NOTE 1 – CONDENSED FINANCIAL STATEMENTS

The accompanying interim financial statements have been prepared by the Company without audit.  In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows as of and for the period ended June 30, 2013, and for all periods presented herein, have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted.  It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2012 audited financial statements.  The results of operations for the periods ended June 30, 2013 and June 30, 2012 are not necessarily indicative of the operating results for the full years.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

The accounting policies applied by the Company in these condensed interim financial statements are the same as those applied by the Company in its audited consolidated financial statements as at and for the year ended December 31, 2012

NOTE 3 - GOING CONCERN

The Company had incurred a net loss from operations and has a history of losses, resulting in an accumulated deficit and a working capital deficit.

Based on the above considerations, there is a substantial doubt about the ability of the Company to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company's ability to further implement its business plan and/or attain working capital through financing or equity.  Management hopes that the continued placement of precious metals machines in the U.S.A. and the potential of a global rollout of additional dispensing terminals will bring sufficient revenues and investment into the Company to sustain its growth and operations.  Furthermore, the registrant feels organic growth through a new acquisition strategy in their other subsidiaries will assist the registrant in achievement of their goals. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

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NOTE 4 – EQUITY FINANCING

In January of 2013, the Company sold 450,000 shares of common stock, for proceeds of $36,000,  to 2 investors at $0.08/share.

In March of 2013, the Company sold 625,000 shares of common stock, for proceeds of $50,000,  to 1 investor at $0.08/share.

On March 1, 2013, the Company issued 1,000,000 shares of stock to 3 professionals for services rendered.  The stock had a market price of $0.062 at the time of issuance and $62,000 was charged to operations for the period ended March 31, 2013.

On June 30, 2013, the Company issued 17,972 shares of common stock to one shareholder to compensate him for interest on his previously converted convertible bond.  The interest of $1,583 was charged to operations for the quarter ended June 30, 2013.

NOTE 5 – DEBT FINANCING, RELATED PARTY

On February 20, 2013, one shareholder made a short-term loan of $10,000 to the Company.  The loan was non-interest bearing and was repaid on March 3, 2013.

In the quarter ended June 30, 2013, one shareholder made a short-term loans of $5,000 and $10,000 to the Company.  The loans bear interest at 5% and each has a 6-month maturity.

NOTE 6 – SUBSEQUENT EVENTS

The Company has evaluated events and transactions subsequent to June 30, 2013and through the date of filing with the Securities and Exchange Commission (date available for issuance) that would require reporting.  None were noted.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Trends and Uncertainties

The registrant has developed its PMX Gold Bullion Dispensing Terminal prototype called the MGIV and deployed the first prototype in Boca Raton, Florida..  The terminal is an unmanned dispenser which allows for gold dispensing and deposit and account management functions.  These terminals also incorporate conventional ATM technology.

The registrant has been assigned the ownership rights to two U.S. Provisional Patent Applications and the third and final International Patent Application Number PCT/US2012/020486 (“Unattended Precious Metal Distribution System, Methods and Apparatus”), and is in the final stages to file full patent applications for its proprietary gold machine, which will dispense automated gold bullion bars and coins.

The registrant’s business is subject to numerous risk factors, including the following:

1. Our business operations are currently focused on the demand for essentially one commodity, gold. Specifically, we are addressing the markets of physical gold ownership by retail investors, as well as developing and offering an ancillary set of financial services that would complement the purchase and sale of gold and other precious metals by retail investors. Any decrease in demand for gold or gold investments could materially adversely affect our revenues, profitability and general business prospects.

2. Proposed expansion plans’ economic success depends upon extensive capital infusion, technology and infrastructure development and market acceptance. Management believes that the current business model of conducting stand alone retail sales of physical gold (whether online or via telephone, face-to-face at a manned retail location or through a financial institution, or via an unmanned portal such as the gold bullion vending machine that we test marketed) is extremely limited and one dimensional. For the most part prices are non-standardized, quality is often not certified and there is no sense of client account affiliation between the customer and the entity that either buys gold from or sells gold to the client or customer. The resale ability is rarely offered and there is no integration of the holdings/transactions into a system that would allow for the equity to be utilized for the benefit of the customer or other account management features.

While we still intend to engage in simple retail sales and purchases to and from individuals in single, one-time transactions, our expansion plans are based on developing and offering a managed gold account and related products to retail customers and

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investors. We intend to capitalize on the potential emergence of gold as a parallel currency and offer our clients the ability to conduct Gold Bullion based transactions through this account via the envisioned PMX Gold ATM terminals.

The success of our business model lies in accessing the required capital to develop this gold based ATM network, developing the technology and infrastructure controls and framework necessary to operate the network and cultivating a client base that is receptive to the managed gold account scenario. There is no guarantee that the capital will be available to the registrant on acceptable terms which would allow for the economic success of the model, that the technology and infrastructure can be successfully developed or that the marketplace will accept our products and services.

3. The supply and price of gold bullion is subject to volatility and is influenced by numerous factors that are beyond our control; there is no guarantee as to effectiveness of our hedging practices to preserve profits or prevent losses.  We intend to use gold futures and options contracts for the purpose of hedging the effects of changing gold prices on our inventory. Although the use of hedging may enable us to mitigate the effect of changing prices, no strategy is entirely effective to eliminate the pricing risks and we may remain exposed to losses when prices move significantly in a short period of time, and we generally remain exposed to supply risk in the event of non-performance by the counter-parties to any futures contracts. Our hedging strategy and the hedges that we enter into may not adequately offset the risks of gold volatility and our hedges may result in losses. Failure to properly design and implement an effective hedging strategy may materially adversely affect our business and operating results. In this case, our cost of sales may increase, resulting in a decrease in profitability.

4. Reliance on third party shippers, gold bullion suppliers.  Since we rely heavily on common carriers to ship our gold, any disruption in their services or increase in shipping costs could adversely affect our relationship with our customers, which could result in reduced revenues, increased operating expenses, a loss of customers or reduced profitability. Any significant increase in shipping costs could lower our profit margins or force us to raise prices, which could cause our revenue and profits to suffer. We depend on our relationships with precious metals mints and gold wholesalers for the supply of our primary product, which is fine .9999 24K gold.  If any of our relationships with these sources deteriorate, we may be unable to procure a sufficient quantity of high-quality gold at prices acceptable to us or at all.  In such a case, we may not be able to fulfill the demand of our existing customers using United States made gold and will look for alternative mints in other countries to supply the demand for new machines to be placed in the United States and in other countries.

5. Changes in the foreign exchange rate could negatively affect our profitability. We face foreign exchange rate exposure as we intend to allow for our products to be bought and sold in multiple currencies. To the extent that we are unable to unsuccessfully hedge any exposure that we face in these transactions we could suffer financial losses.

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Results of Operations

For the three months ended June 30, 2013, we earned $4,321 in revenues.  Our cost of sales was $3,324, resulting in a gross profit of $997.  We had depreciation expenses of $7,934, selling, general and administrative expenses of $20,394, and interest expenses of $8,280.  As a result, we had a net loss of $35,611 for the three months ended June 30, 2013.

Comparatively, for the three months ended June 30, 2012, we did not earn any revenues.  We had depreciation expenses of $4,270, selling, general and administrative expenses of $101,108, and interest expenses of $6,214.  As a result, we had a net loss of $111,592 for the three months ended June 30, 2012.  We had a beneficial conversion of $34,264, resulting in net loss attributable to conversions of $145,856 for the period.

The $75,981 difference between the three months ended June 30, 2013 and 2012 is primarily the result of greatly decreased selling, general and administrative expenses, as well as earning revenues during the three months ended June 30, 2013.  The decreased expenses are a result of having an established market and beginning sales, rather than having to direct funds toward establishing that market.

For the six months ended June 30, 2013, we earned $23,464 in revenues.  Our cost of sales was $17,290, resulting in a gross profit of $6,174.  We had depreciation expenses of $14,891, selling, general and administrative expenses of $159,490, and interest expenses of $14,730.  As a result, we had a net loss of $182,937 for the six months ended June 30, 2013.

Comparatively, for the six months ended June 30, 2012, we did not earn any revenues.  We had depreciation expenses of $8,540, selling, general and administrative expenses of $175,352, and interest expenses of $11,492.  As a result, we had a net loss of $195,384 for the six months ended June 30, 2012.  We had a beneficial conversion of $14,325, resulting in net loss attributable to conversion of $209,709 for the period.

The $12,447 difference in the net loss between the six months ended June 30, 2013 and 2012 is primarily due to the revenues earned during the six months ended June 30, 2013.  We decreased our selling, general and administrative expenses by $15,862, but our depreciation expenses increased by $6,351 and our interest expenses increased by $3,238 during the six months ended June 30, 2013.  We were able to use our established market to decrease our selling, general and administrative expenses as well as to start earning revenues.

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Liquidity and Capital Resources

For the six months ended June 30, 2013, we purchased fixed assets for $43,725.  As a result, we had net cash used in investing activities of $43,725 for the period.  We did not pursue any investing activities for the six months ended June 30, 2012.

For the six months ended June 30, 2013, we received $25,000 as proceeds from notes payable and $86,000 as proceeds from stock issuances.  We spent $10,000 on payments on related party – short-term loans.  As a result, we had net cash provided by financing activities of $101,000 for the six months ended June 30, 2013.

For the six months ended June 30, 2012, we received $79,968 as proceeds from notes payable and $26,000 as proceeds from stock issuances.  We spent $2,500 on payments on related party – short-term loans and $2,500 on payment made to stockholder.  As a result, we had net cash provided by financing activities of $100,968 for the six months ended June 30, 2012.

Our internal and external sources of liquidity have included proceeds raised from subscription agreements and private placements and advances from related parties.  We are currently not aware of any trends that are reasonably likely to have a material impact on our liquidity.  We are attempting to increase the sales to raise much needed cash for the fulfillment of the registrant’s business plan.  It is our intent to secure a market share in the retail gold and related financial services market, which we feel will require additional capital over the long term to undertake sales and marketing initiatives, further our research and development, and to manage timing differences in cash flows from the time our PMX Gold Dispensing Terminals are developed and put into use and positive cash flow product is generated.

Our capital strategy is to increase our near and mid term cash balance through financing transactions, including the issuance of debt and/or equity securities. Once our PMX Gold ATM terminal prototypes have been developed and put into the field we intend to work with our accountants and SEC counsel and develop a Pro-Forma financial model based on their results and pursue traditional Wall Street financing.

Going Concern

To date, the registrant has incurred significant losses.  The registrant’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 registrant’s ability to continue as a going concern.  

Off-Balance Sheet Arrangements

The registrant had no material off-balance sheet arrangements as of June 30, 2013.

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Critical Accounting Policies and Estimates

Management’s discussion and analysis of its financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles.

The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to the reported amounts of revenues and expenses and the valuation of our assets and contingencies. We believe our estimates and assumptions to be reasonable under the circumstances. However, actual results could differ from those estimates under different assumptions or conditions. Our financial statements are based on the assumption that we will continue as a going concern. If we are unable to continue as a going concern we would experience additional losses from the write-down of assets.

The registrant uses the fair value recognition provision of ASC 718, “Compensation-Stock Compensation,” which requires the registrant to expense the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of such instruments. The registrant uses the Black-Scholes option pricing model to calculate the fair value of any equity instruments on the grant date.

The registrant also uses the provisions of ASC 505-50, “Equity Based Payments to Non-Employees,” to account for stock-based compensation awards issued to non-employees for services. Such awards for services are recorded at either the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the measurement date guidelines enumerated in ASC 505-50.

New Accounting Pronouncements

The registrant has adopted all recently issued accounting pronouncements.  The adoption of the accounting pronouncements, including those not yet effective, is not anticipated to have a material effect on the financial position or results of operations of the registrant.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Not applicable

Item 4. Controls and Procedures

During the period ended June 30, 2013, there were no changes in our internal controls over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our chief executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended, as of June 30, 2013.  Based on this evaluation, our chief executive officer and principal financial officers have concluded such controls and procedures to be effective as of June 30, 2013 to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms and to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

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Part II.  Other Information

Item 1. Legal Proceeding

The registrant is not a party to, and its property is not the subject of, any material pending legal proceedings.

Item 1A.  Risk Factors

Not applicable to smaller reporting companies.

Item 2. Unregistered Sales Of Equity Securities and Use of Proceeds

None

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

Not Applicable

Item 5. Other Information

None

Item 6. Exhibits

The following documents are filed as a part of this report:

Exhibit 31* - Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 32* - Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS**   XBRL Instance Document

101.SCH**   XBRL Taxonomy Extension Schema Document

101.CAL**   XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF**   XBRL Taxonomy Extension Definition Linkbase Document

101.LAB**   XBRL Taxonomy Extension Label Linkbase Document

101.PRE**   XBRL Taxonomy Extension Presentation Linkbase Document

*  Filed herewith

**XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

PMX COMMUNITIES, INC.

/s/ Lindsey Perry

Lindsey Perry

Chief Executive Officer

Chief Financial Officer

Dated: August 14, 2013

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