Attached files
| file | filename |
|---|---|
| EXCEL - IDEA: XBRL DOCUMENT - REAL HIP-HOP NETWORK, INC | Financial_Report.xls |
| EX-32.1 - CERTIFICATION - REAL HIP-HOP NETWORK, INC | ex32.htm |
| EX-31.1 - CERTIFICATION - REAL HIP-HOP NETWORK, INC | ex311.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
Amendment No. 1
(Mark One)
|
þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the quarterly period ended December 31, 2012
OR
|
o
|
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 000-54062
Accelerated Acquisitions XII, Inc.
(Exact name of registrant as specified in its charter)
|
Delaware
(State or other jurisdiction of incorporation)
|
27-2787118
(IRS Employer Identification No.)
|
1840 Gateway Drive, Suite 200, Foster City, CA 94404
(Address of principal executive offices)
(650) 283-2653
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes þ No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, non-accelerated filer or a smaller reporting company. See definition of “accelerated filer”, “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act):
|
Large Accelerated Filer o
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Accelerated Filer o
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Non-Accelerated Filer o
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Smaller Reporting Company þ
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes o No þ
Indicate the number of shares outstanding of each of the issuer’s classes of the common stock, as of the latest practicable date: Common Stock, $0.0001 par value: 29,150,000 shares outstanding as of February 13, 2012.
- 1 -
|
Item 1.
|
Financial Statements (unaudited):
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3
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|||
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Balance Sheets as of December 31, 2012 (unaudited) and March 31, 2012 (audited)
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3
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||||
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Statements of Operations for the three and nine months ended December 31, 2012 and December 31, 2011 and for the cumulative period from inception (May 4, 2010) through December 31, 2012 (unaudited)
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4
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||||
| Statement of Change in Stockholders’ Deficit | 5 | ||||
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Statements of Cash Flows for the nine months ended December 31, 2012 and 2011 and for the cumulative period from inception (May 4, 2010) to December 31, 2012 (unaudited)
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6
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||||
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Notes to Financial Statements (unaudited)
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7
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||||
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Item 2.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
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16
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|||
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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20
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|||
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Item 4T.
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Controls and Procedures
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20 | |||
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PART II – OTHER INFORMATION:
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|||||
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Item 1.
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Legal Proceedings
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21
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|||
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Item 1A
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Risk Factors
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21
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|||
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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21
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|||
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Item 3.
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Defaults Upon Senior Securities
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21
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|||
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Item 4.
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(Reserved and Removed)
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21
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|||
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Item 5.
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Other Information
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21
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|||
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Item 6.
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Exhibits
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22
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|||
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Signatures
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22
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||||
- 2 -
PART I — FINANCIAL INFORMATION
ACCELERATED ACQUISITIONS XII, INC.
(A Development Stage Company)
BALANCE SHEETS
|
December 31,
|
March 31,
|
|||||||
|
2012
|
2012
|
|||||||
|
(Unaudited)
|
(Audited)
|
|||||||
| (Restated) | ||||||||
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ASSETS
|
||||||||
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Current assets:
|
||||||||
|
Cash
|
$
|
-
|
$
|
24
|
||||
|
$
|
-
|
$
|
24
|
|||||
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
||||||||
|
Current liabilities:
|
||||||||
|
Due to shareholder
|
$
|
109,626
|
$
|
72,150
|
||||
|
Total liabilities
|
109,626
|
72,150
|
||||||
|
|
|
|||||||
|
|
||||||||
|
Stockholders’ deficit:
|
||||||||
|
Preferred stock, $0.0001 par value, 10,000,000 shares authorized; none issued or outstanding
|
—
|
---
|
|
|||||
|
Common stock, $0.0001 par value, 100,000,000 shares authorized, 29,150,000 and 25,350,000
shares issued and outstanding as of December 31, 2012 and March 31, 2012, respectively
|
2,915
|
2,535
|
||||||
|
Additional paid-in capital
|
1,850
|
1,850
|
||||||
|
Accumulated deficit
|
(114,391
|
)
|
(76,511
|
)
|
||||
|
|
||||||||
|
Total stockholders’ deficit
|
(109,626
|
)
|
(72,126
|
)
|
||||
| Total liabilities and stockholders’ deficit |
$
|
-
|
$
|
24
|
||||
The accompanying notes are an integral part of these financial statements.
- 3 -
ACCELERATED ACQUISITIONS XII, INC.
(A Development Stage Company)
|
Three months ended
|
Nine months ended |
Inception
(May 4, 2010)
through
December 31,
|
||||||||||||||||||
| December 31, | December 31, | December 31, | December 31, | 2012 | ||||||||||||||||
|
2012
|
2011
|
2012
|
2011
|
(Cumulative)
|
||||||||||||||||
|
Revenues
|
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
|
Operating expenses
|
||||||||||||||||||||
|
General and administrative
|
17,500 | 985 |
37,880
|
3,585 |
114,391
|
|||||||||||||||
|
Total operating expenses
|
17,500 | 985 |
37,880
|
3,585 |
114,391
|
|||||||||||||||
|
Net loss
|
$ | (17,500 | ) | $ | (985 | ) | $ | (37,880 | ) | $ | (3,585 | ) | $ | ( 114,391 | ) | |||||
|
Basic and diluted net loss per share
|
$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | ||||||||
|
Weighted Average Common Shares Outstanding – Basic and Diluted
|
29,150,000 | 5,000,000 | 28,040,511 | 17,477,372 | ||||||||||||||||
The accompanying notes are an integral part of these financial statements.
- 4 -
ACCELERATED ACQUISITIONS XII, INC.
(A Development Stage Company)
(Unaudited)
|
Common Stock
|
|||||||||||||||||
|
Shares
|
Amount
|
Additional
Paid-In
Capital
|
Accumulated
Deficit
|
Total
Stockholders’
Deficit
|
|||||||||||||
|
Balance prior to inception
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||||
|
Issuance of common stock to founder for
cash, May 4, 2010 at $.0004 per share
|
5,000,000
|
500
|
1,500
|
—
|
2,000
|
||||||||||||
|
Net loss
|
(1,800)
|
(1,800)
|
|||||||||||||||
|
Balances at March 31, 2011
|
5,000,000
|
500
|
1,500
|
(1,800)
|
200
|
||||||||||||
|
Tender of shares by founder, July 16, 2011 at $.0001 per share
|
(3,500,000)
|
(350)
|
350
|
—
|
—
|
||||||||||||
|
Issuance of common stock under stock option
granted to founder for consulting services
|
1,500,000
|
150
|
—
|
—
|
150
|
||||||||||||
|
Issuance of common stock under stock
option granted to founder for consulting
services, July 16, 2011 at $.0001 per share
|
22,350,000
|
2,235
|
—
|
—
|
2,235
|
||||||||||||
|
Net loss
|
—
|
—
|
—
|
(74,711
|
)
|
(74,711)
|
|||||||||||
|
Balances at March 31, 2012
|
25,350,000
|
2,535
|
1,850
|
(76,511
|
)
|
(72,126)
|
|||||||||||
|
Issuance of common stock under stock option
granted to founder for consulting services, June 20,
2012 at $.0001 per share
|
3,800,000
|
380
|
—
|
—
|
380
|
||||||||||||
|
Net loss (unaudited)
|
(37,880
|
)
|
(37,880
|
)
|
|||||||||||||
|
Balances at December 31, 2012(Unaudited)
|
29,150,000
|
2,915
|
1,850
|
(114,391
|
)
|
$
|
(109,626)
|
||||||||||
The accompanying notes are an integral part of these financial statements.
- 5 -
ACCELERATED ACQUISITIONS XII, INC.
(A Development Stage Company)
(Unaudited)
|
Nine months ended
December 31, 2012
|
Nine months ended
December 31, 2011
|
Inception (May 4,
2010) through
December 31,
2012
(Cumulative)
|
||||||||||
|
OPERATING ACTIVITIES:
|
|
|||||||||||
|
Net loss
|
$
|
(37,880
|
)
|
$
|
(3,585
|
)
|
(114,391 )
|
|||||
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||||||
|
Due to shareholder
|
37,500
|
3,585
|
109,626
|
|||||||||
|
Stock-based compensation
|
380
|
-
|
380
|
|||||||||
|
Net cash used in operating activities
|
-
|
-
|
(4,385
|
)
|
||||||||
|
FINANCING ACTIVITIES:
|
||||||||||||
|
Proceeds from the issuance of common stock
|
-
|
2,235
|
4,385
|
|||||||||
|
Shareholder advances
|
- |
-
|
- | |||||||||
|
Net Cash provided by financing activities
|
- |
4,835
|
||||||||||
|
Net increase in cash
|
-
|
2,235
|
-
|
|||||||||
|
Cash at beginning of period
|
24
|
200
|
-
|
|||||||||
|
Cash at end of period
|
$
|
-
|
$
|
2,435
|
-
|
|||||||
The accompanying notes are an integral part of these financial statements.
- 6 -
ACCELERATED ACQUISITIONS XII, INC.
December 31, 2012
(Unaudited)
1. Basis of Presentation and Summary of Significant Accounting Policies
Company Description
Accelerated Acquisitions XII, Inc. (“the Company”) was incorporated in the state of Delaware on May 4, 2010. The Company was initially formed as a shell company with no operations while it sought new business opportunities. On August 15, 2011 the Company licensed all right to RHN media content and distribution platforms that include a cable channel that provides intelligent, family-appropriate Hip-Hop content to a multi-racial/multi-generational 18-34 year-old audience demographic. RHN’s website RHN.TV is designed to be the Internet destination for the Company’s target audiences. RHN Mobile delivers music, gaming, and video content to the target audiences on wireless devices across wireless service providers.
The Company also intends use its broadband and digital platforms to deliver video streaming content to gaming systems that include: X-BOX 360, NINTENDO Wii, and PLAYSTATION 3. RHN has beta tested the delivery of live streaming version of its video content online and on RHN.TV. RHN has also beta tested its content to over 164,000,000 households in Africa, Europe, and the Middle East through an informal available time brokerage agreement with Ethiopian Broadcast System (EBS). RHN will continue to beta test in the United States (“US”) with an estimated audience of 3 million households until the Company can launch commercially through national subscription TV that is estimated to be the fall of 2013. RHN assigned the Company a distribution term sheet with DirecTV, which could allow the Company to launch to a viewership of an estimated 18 million subscribers. RHN has also assigned a term sheets to the Company to launch on the DISH Network which could give access to another estimated 14 million subscribers. The Company is evaluating all of the licensors distribution agreements and will not take assignment of any agreements until the Company is ready to commercially launch and has accomplished is financing objectives outlined below.
Our primary sources of revenue are affiliate fees and advertising. Affiliate fees are derived from long-term distribution agreements with cable, satellite and telecommunications operators who pay us a monthly fee for each subscriber household that receives RHN content.
These financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnote disclosures required by GAAP for reporting on complete financial statements. These condensed financial statements should be read in conjunction with the financial statements and notes in the Company’s Annual Report on Form 10-K for the year ended March 31, 2012. The condensed financial statements reflect all adjustments, which, in the opinion of management, are necessary for a fair presentation of results for the interim periods presented. Such adjustments consist only of normally recurring items. The operating results for the three-month reporting .
- 7 -
ACCELERATED ACQUISITIONS XII, INC.
December 31, 2012
(Unaudited)
1. Basis of Presentation and Summary of Significant Accounting Policies (continued)
period ended December 31, 2012 are not necessarily indicative of operating results that may be expected for any other interim periods or for the fiscal year ending March 31, 2013.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the balances and disclosures. Actual results could differ from these estimates.
The balance sheet as of December 31, 2012 has been derived from the audited financial statements as of March 31, 2012, but the financial statements included herein do not include all disclosures required for complete financial statements.
Going Concern
The accompanying financial statements have been prepared on a going concern basis, which assumes the Company will realize its assets and discharge its liabilities in the normal course of business. As reflected in the accompanying financial statements, the Company has a deficit accumulated during the development stage of $ 114,391 , due to shareholder of $109,626 and had $0 cash as of December 31, 2012. The Company’s ability to continue as a going concern is dependent upon its ability to obtain financing necessary for it to meet its obligations, develop the products that it has licensed, and ultimately generate revenues from the sale of these products. The Company’s founder has agreed to fund certain administrative operating expenses of the Company until the Company succeeds in raising additional funds. Management’s plans include raising additional funds through an equity financing or licensing transaction in order to meet the Company’s obligations and develop its product candidates, but funding may not be available and the Company may be unsuccessful in raising additional capital of any type. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might arise as a result of this uncertainty.
Recent Accounting Pronouncements
Except for rules and interpretive releases of the SEC under authority of federal securities laws and a limited number of grandfathered standards, the FASB Accounting Standards Codification™ (“ASC”) is the sole source of authoritative GAAP literature recognized by the FASB and applicable to the Company. Management has reviewed the aforementioned rules and releases and believes any effect will not have a material impact on the Company's present or future financial statements.
Net Loss Per Share
The Company calculates basic net loss per share using the weighted average common shares outstanding for the periods presented. While diluted net income per share would generally include the impact of dilutive equity instruments, such as outstanding stock options, due to the Company’s net loss position there is no dilutive effect as a result of any outstanding stock options or other equity instruments.
- 8 -
ACCELERATED ACQUISITIONS XII, INC.
December 31, 2012
(Unaudited)
2. Stock-based Compensation
The Company recognizes stock-based compensation expense in its statement of operations based on estimates of the fair value of employee stock option and stock grant awards as measured on the grant date.
During the nine months ended December 31, 2012, the Company entered into an agreement under which it agreed to grant stock-based compensation Accelerated Venture Partners (AVP) for extending consulting services to the Company. Pursuant to the terms of the agreement the Company agreed to grant AVP 3,800,000 shares of common stock at a purchase price of .0001 per share.
The Company has estimated the value of common stock into which the stock was granted to AVP at par value .0001 per share for financial reporting purposes. This amount was determined based on the common shares sold in private placements by the Company. The stock based compensation expense is an estimate and significant judgment was involved in attempting to determine the value of common stock. The Company’s common stock has never traded publicly, and no stock has traded in private markets either, except for privately negotiated sales to investors, the founder of the Company and the founder of the technology from which the Company subsequently licensed rights. No common stock has been sold in any transactions since the Company emerged from its shell-company status. The Company does not have any offers for purchase of its common stock in any stage, and no stock is registered for resale with the Securities and Exchange Commission.
Based on the assumed value of common stock, the grant-date fair value of stock granted during the nine months ended December 31, 2012 was $ 380 . The Company recognized stock-based compensation expense of $ 380 during the three months ended June 30, 2012, respectively, which was all included in general and administrative expenses.
3. Related Party Transactions
During the nine months ended December 31, 2012, the Company accrued $37,500 for expenses due to Accelerated Venture Partners, LLC (“AVP”), which is controlled by a shareholder of the Company. As of December 31, 2012, all liabilities owed by the Company are payable to AVP. The Managing Partner of AVP is Timothy Neher, a former director of the Company and the only officer of the Company prior to July 16, 2011. From inception through December 31, 2012, the Company paid $0 cash to AVP and accrued $109,626 for expenses due to AVP. See Note 2 for a description of the stock transactions involving AVP.
- 9 -
ACCELERATED ACQUISITIONS XII, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
(Unaudited)
4. Restatement
During our year ended March 31, 2013 audit, we discovered some errors in our financial statements that included a) the stock-based compensation expense of $3,800,000 for stock that was issued to Accelerated Venture Partners in June of 2012. The effects of these restatements on reported amounts for the three months ended June 30, 2012 are presented below in the following tables:
|
Balance sheets
|
||||
|
As of December 31, 2012
|
|
As Reported
|
Adjustments
|
Restated
|
||||||||||
|
ASSETS
|
||||||||||||
|
Current assets:
|
||||||||||||
|
Cash
|
$ | - | - | $ | - | |||||||
| $ | - | - | $ | - | ||||||||
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
||||||||||||
|
Current liabilities:
|
||||||||||||
|
Accrued expenses due shareholder
|
$ | 109,626 | - | $ | 109,626 | |||||||
|
Total liabilities
|
109,626 | - | 109,626 | |||||||||
|
Commitments and contingencies
|
||||||||||||
|
Stockholders’ deficit:
|
||||||||||||
|
Preferred stock, $0.0001 par value, 10,000,000 shares authorized; none issued or outstanding
|
— | --- | ||||||||||
|
Common stock, $0.0001 par value, 100,000,000 shares authorized, 25,350,000 and 29,150,000 shares issued and outstanding, respectfully
|
2,915 | - | 2,915 | |||||||||
|
Additional paid-in capital
|
3,801,470 | (3,799,620 | ) | 1,850 | ||||||||
|
Accumulated deficit
|
(3,914,011 | ) | (3,799,620 | ) | (114,.391 | ) | ||||||
|
Total stockholders’ deficit
|
(109,626 | ) | - | (109,626 | ) | |||||||
| $ | - | - | $ | - | ||||||||
- 10 -
ACCELERATED ACQUISITIONS XII, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
(Unaudited)
|
Statement of Operations
|
|
For Three months ended December 31, 2012
|
|
As Reported
|
Adjustments
|
Restated
|
||||||||||
|
Revenues
|
$ | — | - | $ | — | |||||||
|
Operating expenses
|
||||||||||||
|
General and administrative
|
17,500 |
_
|
17,500 | |||||||||
|
Total operating expenses
|
17,500 |
_
|
17,500 | |||||||||
|
Net loss
|
$ | (17,500 | ) |
_
|
$ | (17,500 | ) | |||||
|
Basic and diluted net loss per share
|
$ | (0.00 | ) |
_
|
$ | (0.00 | ) | |||||
|
Shares used in basic and diluted net loss per share
|
29,150,000 | - | 29,150,000 | |||||||||
- 11 -
ACCELERATED ACQUISITIONS XII, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
(Unaudited)
|
Statement of Operations
|
|
For Nine months ended December 31, 2012
|
|
As Reported
|
Adjustments
|
Restated
|
||||||||||
|
Revenues
|
$ | — | - | $ | — | |||||||
|
Operating expenses
|
||||||||||||
|
General and administrative
|
3,837,500 | (3,799,620 | ) | 37,880 | ||||||||
|
Total operating expenses
|
3,837,500 | (3,799,620 | ) | 37,880 | ||||||||
|
Net loss
|
$ | (3,837,500 | ) | (3,799,620 | ) | $ | (37,880 | ) | ||||
|
Basic and diluted net loss per share
|
$ | (0.00 | ) |
_
|
$ | (0.00 | ) | |||||
|
Shares used in basic and diluted net loss per share
|
29,150,000 | - | 29,150,000 | |||||||||
- 12 -
ACCELERATED ACQUISITIONS XII, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
(Unaudited)
|
Statement of Operations
|
|
Inception (May 4, 2010) through December 31, 2012 (Cumulative)
|
|
As Reported
|
Adjustments
|
Restated
|
||||||||||
|
Revenues
|
$ | — |
_
|
_
|
||||||||
|
Operating expenses
|
||||||||||||
|
General and administrative
|
(3,914,011 | (3,799,620 | ) | 114,391 | ||||||||
|
Total operating expenses
|
3,914,011 | (3,799,620 | ) | 114,391 | ||||||||
|
Net loss
|
$ | (3,914,011 | ) | (3,799,620 | ) | (114,391 | ) | |||||
|
Basic and diluted net loss per share
|
_
|
_
|
- | |||||||||
|
Shares used in basic and diluted net loss per share calculation
|
_
|
_
|
- | |||||||||
- 13 -
ACCELERATED ACQUISITIONS XII, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
(Unaudited)
|
Statement of Cash Flows for Nine months ended December 31, 2012
|
|
As Reported
|
Adjustments
|
Restated
|
||||||||||
|
OPERATING ACTIVITIES:
|
||||||||||||
|
Net loss
|
$ | (3,837,500 | ) | (3,799,620 | ) | $ | (37,880 | ) | ||||
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||||||
|
Increase in accrued expenses due to founder
|
37,500 | - | 37,500 | |||||||||
|
Stock-based compensation
|
3,800,000 | (3,799,620 | ) | 380 | ||||||||
|
Net cash used in operating activities
|
- | - | - | |||||||||
|
FINANCING ACTIVITIES:
|
||||||||||||
|
Proceeds from the issuance of common stock
|
- | - | - | |||||||||
|
Net increase in cash
|
- | - | - | |||||||||
|
Cash at beginning of period
|
- | - | - | |||||||||
|
Cash and equivalents at end of period
|
$ | - | - | $ | - | |||||||
- 14 -
ACCELERATED ACQUISITIONS XII, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
(Unaudited)
|
Statement of Cash Flow
|
|
Inception (May 4, 2010) through December 30, 2012 (Cumulative)
|
|
As Reported
|
Adjustments
|
Restated
|
||||||||||
|
OPERATING ACTIVITIES:
|
||||||||||||
|
Net loss
|
$ | (3,914,011 | ) | $ | (3,799,620 | ) | $ | (114,391 | ) | |||
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||||||
|
Increase in accrued expenses due to founder
|
109,626 | - | 109,626 | |||||||||
|
Stock-based compensation
|
3,800,000 | (3,799,620 | ) | 380 | ||||||||
|
Net cash used in operating activities
|
(4,385 | ) | - | (4,385 | ) | |||||||
|
FINANCING ACTIVITIES:
|
||||||||||||
|
Proceeds from the issuance of common stock
|
4,385 | - | 4,385 | |||||||||
|
Net increase in cash and cash equivalents
|
- | - | - | |||||||||
|
Cash and equivalents at beginning of period
|
- | |||||||||||
|
Cash and equivalents at end of period
|
$ | - | $ | - | $ | - | ||||||
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Except for the historical information contained herein, the matters discussed in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in this Current Report on Form 10-Q are forward-looking statements that involve risks and uncertainties. The Company’s Annual Report on Form 10-K, filed with the SEC on June 29, 2012, provides examples of risks, uncertainties and events that may cause our actual results to differ materially from those implied or projected in this Current Report on Form 10-Q. Except as may be required by law, we undertake no obligation to update any forward-looking statement to reflect events after the date of this report.
Overview
Accelerated Acquisitions XII, Inc. (“the Company”) was incorporated in the state of Delaware on May 4, 2010. The Company was initially formed as a shell company with no operations while it sought new business opportunities. On August 15, 2011 the Company licensed all right to RHN media content and distribution platforms that include a cable channel that provides intelligent, family-appropriate Hip-Hop content to a multi-racial/multi-generational 18-34 year-old audience demographic. RHN’s website RHN.TV is designed to be the Internet destination for the Company’s target audiences. RHN Mobile delivers music, gaming, and video content to the target audiences on wireless devices across wireless service providers.
Plan of Operation
The Company also intends use its broadband and digital platforms to deliver video streaming content to gaming systems that include: X-BOX 360, NINTENDO Wii, and PLAYSTATION 3. RHN has beta tested the delivery of live streaming version of its video content online and on RHN.TV. RHN has also beta tested its content to over 164,000,000 households in Africa, Europe, and the Middle East through an informal available time brokerage agreement with Ethiopian Broadcast System (EBS). RHN will continue to beta test in the United States (“US”) with an estimated audience of 3 million households until the Company can launch commercially through national subscription TV that is estimated to be the fall of 2012. RHN assigned the Company a distribution term sheet with DirecTV, which could allow the Company to launch to a viewership of an estimated 18 million subscribers. RHN has also assigned a term sheets to the Company to launch on the DISH Network which could give access to another estimated 14 million subscribers. The Company is evaluating all of the licensors distribution agreements and will not take assignment of any agreements until the Company is ready to commercially launch and has accomplished is financing objectives outlined below.
Our primary sources of revenue are affiliate fees and advertising. Affiliate fees are derived from long-term distribution agreements with cable, satellite and telecommunications operators who pay us a monthly fee for each subscriber household that receives RHN content.
- 16 -
Going Concern
Because we only had $24 in cash at March 31, 2012, our most recent fiscal year-end, the report of our independent registered public accounting firm on our financial statements for the period ended March 31, 2012 contained an explanatory paragraph regarding their substantial doubt about our ability to continue as a going concern. Our auditors’ opinion is based upon our operating losses and our need to obtain additional financing to sustain operations. Our ability to continue as a going concern will be dependent upon our ability to obtain the necessary financing to meet our obligations and repay our liabilities when they become due, and to generate sufficient revenues from our operations to pay our operating expenses. We will need to raise substantial funds in order to develop the products which we have recently license and if we cannot raise additional funds we may need to abandon development of these products and cease operations.
Results of Operations
We were incorporated on May 4, 2010, During the three months ended December 31, 2012, which was the third quarter of our fiscal year ending March 31, 2013, we had no revenue and incurred general and administrative expenses of $17,500. Our net loss was $17,500, due to the general and administrative expenses. General and administrative expenses for the third quarter of fiscal 2012 consisted of $17,500 for administrative support, which mostly consisted of document preparation and EDGAR filing with the SEC. The Company incurred expenses of $17,500, $985 and $ 11 ,391 for the three month period ending December 31, 2012, 2011, and for the period May 4, 2010 (date of inception) through December 31, 2012, respectively. These expenses largely consist of stock based compensation, formation expenses and administrative expenses related to the start-up and organization of our business that have been incurred by and funded by AVP. Expenses include legal fees, accounting fees, costs associated with SEC filings and preparation of documents.
During the nine months ended December 31, 2012, we had no revenue and incurred general and administrative expenses of $ 37,880. Our net loss was $ 37 ,880, due to the general and administrative expenses. General and administrative expenses consisted of $ 380 for the estimated value of stock-based compensation granted to Accelerated Venture Partners, and $37,500 for administrative support, which mostly consisted of document preparation and EDGAR filing with the SEC. The Company incurred expenses of $ 37,880, $3,585 and $ 114,391 for the nine month period ending December 31, 2012, 2011, and for the period May 4, 2010 (date of inception) through December 31, 2012, respectively. These expenses largely consist of stock based compensation, formation expenses and administrative expenses related to the start-up and organization of our business that have been incurred by and funded by AVP. Expenses include legal fees, accounting fees, costs associated with SEC filings and preparation of documents.
During the nine months ended December 31, 2012, the Company entered into an agreement under which it agreed to grant stock-based compensation Accelerated Venture Partners (AVP) for extending consulting services to the Company. Pursuant to the terms of the agreement the Company agreed to grant AVP 3,800,000 shares of common stock at a purchase price of .0001 per share.
The Company has estimated the value of common stock into which the stock was granted to AVP at par value .0001 per share for financial reporting purposes. This amount was determined based on the common shares sold in private placements by the Company. The stock based compensation expense is an estimate and significant judgment was involved in attempting to determine the value of common stock.
- 17 -
The Company’s common stock has never traded publicly, and no stock has traded in private markets either, except for privately negotiated sales to investors, the founder of the Company and the founder of the technology from which the Company subsequently licensed rights. No common stock has been sold in any transactions since the Company emerged from its shell-company status. The Company does not have any offers for purchase of its common stock in any stage, and no stock is registered for resale with the Securities and Exchange Commission.
The Company believes the only material estimate used in estimating the value stock options was the estimated fair value of the common stock, and that assumed volatility, term, interest rate and dividend yield changes would be not result in material differences in stock option valuations. Based on the assumed value of common stock, the grant-date fair value of stock granted during the nine months ended December, 2012 was $ 380 . The Company recognized stock-based compensation expense of $ 380 during the three months ended June 30, 2012, respectively, which was all included in general and administrative expenses. General and administrative expenses were higher in the nine month period ended in December 31, 2012 compared to the period ended December 31, 2011 due to the stock-based compensation granted. We expect that, if we are successful in securing additional capital, future general and administrative expenses will increase significantly as compared to the period ended December 31, 2012. In addition, we expect to incur development expenses as we seek to advance our products.
Liquidity and Capital Resources
As of December 31, 2012, we had a cash balance of only $0. There were no other assets, and accrued expenses were $109,626, all due to AVP, a related party. We had a stockholders’ deficit of approximately $109,626 and no means to pay the liabilities in excess of our assets. AVP has agreed to fund certain administrative operating expenses of Accelerated Acquisitions XII until the Company succeeds in raising additional funds, at which point the administrative operating expenses will be due. However, AVP may seek to force earlier payment of the amounts which we owe, or AVP may decide in the future not to continue funding costs on behalf of Accelerated Acquisitions XII, although we are not aware of any plans for them to do so. If we are not successful in raising additional capital, we may not be able to pay our liabilities and may have to cease operations.
Funding would be required for staffing, marketing, public relations and the necessary distribution to expanding the scope of its offering to include the global market. The Company intends to seek an aggregate of $50,000,000 in 2013 and 2014 through the sale of equity or convertible debt securities, the issuance of these securities could dilute existing shareholders. The Company’s funding plans include selling additional capital stock and/or borrowing to fund the aforementioned expenses. The Company intends to approach Hedge Funds, Venture Capital Groups, Private Investment Groups and other Institutional Investment Groups in its efforts to achieve future funding. It estimated the minimum amount of capital the company needs to raise over the next twelve months is $2 million to continue operations. There is no guarantee that the Company will be able to raise this or any amount of additional capital and a failure to do so would have a significant adverse effect on the Company’s ability, or would cause significant delays in its ability to address the market and achieve its Business Plan. Neither the Company nor any of its advisors or consultants has significant experience in raising funds similar to the $50,000,000 estimated to be required.
- 18 -
We have a consulting agreement with AVP under which AVP has agreed to provide us with certain advisory services that include reviewing our business plan, identifying and introducing prospective financial and business partners, and providing general business advice regarding our operations and business strategy. Under the consulting agreement, cash compensation of $800,000 is due to AVP upon our securing $10 million in available cash from funding, and an additional $800,000 is due upon our securing $20 million in available cash from funding (inclusive of the first $10 million). The cash compensation is to be paid to AVP at the rate of $66,667 per month. The total cash compensation to be received by AVP under the consulting agreement is not to exceed $2,400,000 unless we receive an amount of funding in excess of $30 million. If we receive equity or debt financing that is an amount less than $10 million, in between $10 million and $30 million, or greater than $30 million, the cash compensation earned by the AVP under its consulting services agreement will be prorated. We have the option to make a lump sum payment to AVP in lieu of the monthly cash payments.
We plan to measure our future liquidity primarily by the cash and working capital available to fund our operations, if do not have enough capital available to fund our operations, as stated above. We will not be able to commercialize our products without additional capital. We are evaluating various means of raising our initial capital, including through the sale of equity securities, licensing agreements or other means. We expect to incur losses for at least several years into the future as we develop our products and we are unable to estimate when, if ever, we will receive revenue or have a positive cash flow.
Critical Accounting Policies and Use of Estimates
Our significant accounting policies are more fully disclosed in Note 1 to the financial statements we included in our Annual Report on Form 10-K for the period ended March 31, 2012, filed with the SEC on June 29, 2012. However, some of our accounting policies may be more particularly important to the portrayal of our financial position and results of operations and require the application of significant judgment by our management. To date, due to our limited operations, we believe the only accounting policy which has required significant judgment or use of estimates, other than our assumption that we will continue as a going concern, is our estimated charge for stock-based compensation. Our accounting for stock-based compensation does not impact our current financial position, but does have a major impact on our statement of operations.
Stock-Based Compensation
We account for stock awards granted to recipients using an estimate of the fair value of the stock award on the date that the award is granted. This estimated fair value of the stock award is recognized as an expense in the statement of operations on a straight-line basis over the vesting period of the underlying stock award, which is generally four years for stock options granted to employees. There is a high degree of subjectivity involved in estimating the input values needed to estimate the fair value of stock options and other awards. For Accelerated Acquisitions XII in particular, our stock has never traded and therefore it is difficult to determine the underlying fair value of our common stock on each date a stock award is made. Changes in the estimated value of the underlying stock will materially affect the resulting estimates of the fair values of the awards that are granted. Also, the expenses recorded for stock-based compensation in our financial statements may differ significantly from the actual value realized by the recipients, and these expenses are not adjusted to the actual amounts, if any, realized. Users of the financial statements should also understand that the expenses we recognize for stock-based compensation do not result in payments of cash by us.
- 19 -
Recent Accounting Pronouncements
We do not believe that there are any recently issued accounting pronouncements that we have not adopted which are likely to have a material impact on our financial position, results of operations or other disclosures.
We do not currently believe we are currently subject to any material interest rate risk, foreign currency exchange rate risk, or commodity price risk. Our ability to fund operations in the future will be subject to our ability to raise capital, which may be through the sale of equity securities. While we believe the sale of equity securities is unlikely to expose us to any material loss, we may not be able to continue operations if we are unable to agree with a buyer on a future price for our equity securities.
Evaluation of Disclosure Controls and Procedures
Our Chief Executive Officer and Chief Financial Officer are responsible for establishing and maintaining “disclosure controls and procedures” (as defined in the rules promulgated under the Securities Exchange Act of 1934, as amended) for our company. Based on his evaluation of our disclosure controls and procedures (as defined in the rules promulgated under the Securities Exchange Act of 1934), our Chief Executive and Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2012, the end of the period covered by this report.
Changes in Internal Control over Financial Reporting
There were no changes in the Company’s internal control over financial reporting during the Company’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
- 20 -
Item 1. Legal Proceedings.
We are not currently party to any material legal proceedings, although from time to time we may be named as a party to lawsuits in the normal course of business.
There are no material changes to our risk factors from those disclosed in our Annual Report on Form 10-K for the fiscal year ended March 31, 2012, as filed with the U.S. Securities and Exchange Commission on June 29, 2012.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
None.
Not applicable.
Item 5. Other Information.
None
- 21 -
|
Exhibit
No. |
Description
|
|||
|
31.1
|
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|||
|
31.2
|
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|||
|
32.1
|
Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|||
| 101 | XBRL Reports | |||
Pursuant to the requirements 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.
|
ACCELERATED ACQUISITIONS XII, INC.
|
||||
|
Dated: August 14, 2013
|
/s/ Atonn F. Muhammad.
Atonn F. Muhammad
|
|||
|
Chief Executive Officer
|
||||
|
(Principal Executive Officer)
|
||||
- 22 -
|
Exhibit
No. |
Description
|
|||
|
31.1
|
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|||
|
31.2
|
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|||
|
32.1
|
Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|||
| 101 | XBRL Reports | |||
- 23 -