Attached files
| file | filename |
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| EXCEL - IDEA: XBRL DOCUMENT - Gawk Inc. | Financial_Report.xls |
| EX-31.1 - CERTIFICATION - Gawk Inc. | f10q0713ex31i_gawkincorp.htm |
| EX-32.1 - CERTIFICATION - Gawk Inc. | f10q0713ex32i_gawkincorp.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 2013
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: 333-180611
Gawk Incorporated
(Exact name of registrant as specified in its charter)
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Nevada
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33-1220317
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(State or other jurisdiction of incorporation
or organization)
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(I.R.S. Employer
Identification No.)
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201 St. Charles Ave., Suite 4700
New Orleans, LA
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70170
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(Address of principal executive offices)
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(Zip Code)
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Registrant’s telephone number, including area code: (888) 754-6190
N/A
(Former Name or Former Address 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 o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, 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 o No x
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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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x |
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(Do not check if a smaller reporting company)
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x
As of September 19, 2013 there were 300,000,000 shares, par value $0.001 per share, outstanding.
GAWK INCORPORATED
QUARTERLY REPORT ON FORM 10-Q
July 31, 2013
TABLE OF CONTENTS
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PAGE
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Item 1.
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4
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Item 2.
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5
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Item 3.
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7
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Item 4.
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7
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Item 1.
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7
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Item 1A.
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7
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Item 2.
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7
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Item 3.
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7
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Item 4.
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7
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Item 5.
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7
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Item 6.
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8
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9
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2
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
This Quarterly Report on Form 10-Q (this “Report”) contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Act in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this Report and include information concerning possible or assumed future results of our operations, including statements about potential acquisition or merger targets; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, and any other statements that are not historical facts.
These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Report. All subsequent written and oral forward-looking statements concerning other matters addressed in this Report and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Report.
Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.
CERTAIN TERMS USED IN THIS REPORT
When this report uses the words “we,” “us,” “our,” and the “Company,” they refer to Gawk Incorporated “SEC” refers to the Securities and Exchange Commission.
3
Item 1. Financial Statements.
Gawk Incorporated
( formerly known as Media Mechanics, Inc.)
(A Development Stage Company)
July 31, 2013
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F–1
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F–2
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F–3
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F–4
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4
(formerly known as Media Mechanics, Inc.)
(A Development Stage Company)
Balance Sheets
(Unaudited)
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July 31,
2013
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January 31,
2013
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ASSETS
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Current Assets
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Cash
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$ | 65,617 | $ | 106,410 | ||||
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Accounts Receivable
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1,217 | 2,858 | ||||||
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Total Current Assets
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$ | 66,834 | $ | 109,268 | ||||
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current Liabilities
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Accrued Liabilities
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$ | 6,522 | $ | 9,318 | ||||
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Due to related parties
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12 | 12 | ||||||
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Total Current Liabilities
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6,534 | 9,330 | ||||||
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Stockholders’ Equity
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Preferred stock
Authorized: 100,000,000 shares, par value $0.001
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No shares issued and outstanding
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- | - | ||||||
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Common stock
Authorized: 750,000,000 shares, par value $0.001
300,000,000 shares issued and outstanding , respectively
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300,000 | 300,000 | ||||||
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Additional paid-in capital
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(175,000 | ) | (175,000 | ) | ||||
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Accumulated other comprehensive loss
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(273 | ) | (91 | ) | ||||
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Accumulated deficit during the Development stage
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(64,427 | ) | (24,971 | ) | ||||
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Total Stockholders’ Equity
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60,300 | 99,938 | ||||||
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Total Liabilities and Stockholders’ Equity
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$ | 66,834 | $ | 109,268 | ||||
(The accompanying notes are an integral part of these unaudited financial statements)
F-1
(formerly known as Media Mechanics, Inc.)
(A Development Stage Company)
Statement of Operations
(Unaudited)
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Three Months Ended
July 31,
2013
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Three Months Ended
July 31,
2012
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Six Months Ended
July 31,
2013
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Six Months Ended
July 31,
2012
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January 6,
2011
(Inception)
to July 31,
2013
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Revenue
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$ | - | $ | 4,738 | $ | 1,572 | $ | 10,269 | $ | 38,188 | ||||||||||
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Expenses
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General and administrative
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5,204 | 4,776 | 41,028 | 7,755 | 102,615 | |||||||||||||||
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Net Income (loss) Before Provision for Income Taxes
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(5,204 | ) | (38 | ) | (39,456 | ) | 2,514 | (64,427 | ) | |||||||||||
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Provision for Income Taxes
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- | (881 | ) | - | (1,793 | ) | - | |||||||||||||
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Net Income (loss)
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$ | (5,204 | ) | $ | (919 | ) | $ | (39,456 | ) | $ | 721 | $ | (64,427 | ) | ||||||
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Comprehensive Income:
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Net income (loss)
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$ | (5,204 | ) | $ | (919 | ) | $ | (39,456 | ) | $ | 721 | $ | (64,427 | ) | ||||||
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Other comprehensive income (loss)
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Foreign currency translation adjustments
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77 | (165 | ) | (182 | ) | 67 | (273 | ) | ||||||||||||
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Comprehensive income (loss)
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$ | (5,127 | ) | $ | (1,084 | ) | $ | (39,638 | ) | $ | 788 | $ | (64,700 | ) | ||||||
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Net Income (Loss) Per Share – Basic and Diluted
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$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | 0.00 | n/a | ||||||||
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Weighted Average Shares Outstanding
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750,000,000 | 225,000,000 | 225,000,000 | 225,000,000 | n/a | |||||||||||||||
(The accompanying notes are an integral part of these unaudited financial statements)
F-2
(formerly known as Media Mechanics, Inc.)
(A Development Stage Company)
Statement of Cash Flows
(Unaudited)
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Six Months Ended
July 31,
2013
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Six Months
Ended
July 31,
2012
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Period from
January 6, 2011
(Date of Inception)
to July 31,
2013
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Operating Activities
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Net income (loss) for the period
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$ | (39,456 | ) | $ | 721 | $ | (64,427 | ) | ||||
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Adjustments to reconcile ne income (loss) to net cash used in operating activities:
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Changes in operating assets and liabilities:
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Accounts receivable
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1,641 | (2,799 | ) | (1,217 | ) | |||||||
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Accrued liabilities
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(2,796 | ) | 5,890 | 6,522 | ||||||||
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Income tax payable
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- | 1,793 | - | |||||||||
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Amount due to related parties
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- | - | 12 | |||||||||
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Deferred revenue
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- | (1,246 | ) | - | ||||||||
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Net Cash Provided By (Used in) Operating Activities
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(40,611 | ) | 4,359 | (59,110 | ) | |||||||
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Financing Activities
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Proceeds from issuance of common stock
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- | - | 125,000 | |||||||||
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Net Cash Provided by Financing Activities
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- | - | 125,000 | |||||||||
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Effect of Exchange Rate Changes
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(182 | ) | 67 | (273 | ) | |||||||
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Net Increase in Cash
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(40,793 | ) | 4,426 | 65,617 | ||||||||
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Cash, Beginning of Period
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106,410 | 82,133 | - | |||||||||
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Cash, End of Period
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$ | 65,617 | $ | 86,559 | $ | 65,617 | ||||||
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Supplemental Disclosures
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Interest paid
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$ | - | $ | - | $ | – | ||||||
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Income taxes paid
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- | - | – | |||||||||
(The accompanying notes are an integral part of these unaudited financial statements)
F-3
(formerly known as Media Mechanics, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
1. Nature of Operations and Continuance of Business
Media Mechanics, Inc. (the “Company”) was incorporated in the state of Nevada on January 6, 2011. The Company has been in the Development stage since inception.
2. Related Party Transactions
From time to time the Company borrows money from its directors. For the period ended July 31, 2013 and January 31, 2013, the total amounts due to related parties are $12 and $12, respectively. These advances from the directors bear no interest and they are due on demand.
3. Common Stock
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a)
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On June 13, 2011, the Company issued 6,000,000 common shares at $0.01 per share for proceeds of $60,000.
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b)
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On December 15, 2011, the Company issued 1,500,000 shares of common stock at $0.01 per share for proceeds of $15,000.
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c)
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On January 19, 2013, the Company issued 2,500,000 shares of common stock at $0.02 per share for proceeds of $50,000.
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4. Subsequent Event
On August 22, 2013, the Company affected a forward split of 30 shares for each one share outstanding as of August 22, 2013, where each stockholder will receive 30 additional shares for each share owned as of the record date. All share amounts in this report have been adjusted to reflect this forward split.
On August 13, 2013, Media Mechanics, Inc. (the “Company”), Scott Kettle (the “Purchaser”), Matthew Zipchen and Violetta Pioro (together with Matthew Zipchen, the “Sellers”) closed on a stock purchase agreement, dated July 31, 2013 (the “Stock Purchase Agreement”), whereby the Purchaser purchased from the Sellers, 7,500,000 shares of common stock, par value $0.001 per share, of the Company (the “Shares”), representing approximately 75% of the issued and outstanding shares of the Company, for an aggregate purchase price of $250,000 (the “Purchase Price”) (the “Stock Purchase”). Prior to the closing of the Stock Purchase Agreement, the Sellers were our majority shareholders, Matthew Zipchen was our President, Chief Executive Officer, Secretary, Treasurer, Chief Financial Officer, and member of the board of directors of the Company (the “Board”), and Violetta Pioro was our Vice President and member of the Board.
In connection with the Stock Purchase, the company has changed its focus to engage in the business of online distribution of all digital content including but not limited to full length feature films, television series, sports, documentaries, live events via our proprietary content distribution network (CDN).
In connection with the Stock Purchase Agreement, on July 31, 2012, Matthew Zipchen submitted to the Company a resignation letter pursuant to which he resigned from her positions as President, Chief Executive Officer, Secretary, Treasurer, Chief Financial Officer, and member of the Board upon closing of the Stock Purchase. Mr. Zipchen’s resignation was not a result of any disagreements relating to the Company’s operations, policies or practices.
On the same day, Violetta Pioro submitted to the Company a resignation letter pursuant to which she resigned from her position as Vice President and member of the Board upon closing of the Stock Purchase. Ms. Pioro’s resignation was not a result of any disagreements relating to the Company’s operations, policies or practices.
F-4
The following discussion provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto contained elsewhere in this Report. The following discussion and analysis contains forward-looking statements, which involve risks and uncertainties. Our actual results may differ significantly from the results, expectations and plans discussed in these forward-looking statements.
Overview
We were incorporated in the State of Nevada as a for-profit Company on January 6, 2011 and established a fiscal year end of January 31. On August 13, 2013, Gawk Incorporated (f/k/a Media Mechanics, Inc.), Scott Kettle (the “Purchaser”), Matthew Zipchen and Violetta Pioro (together with Matthew Zipchen, the “Sellers”) closed on a stock purchase agreement, dated July 31, 2013 (the “Stock Purchase Agreement”), whereby the Purchaser purchased from the Sellers 7,500,000 shares of common stock, par value $0.001 per share, of the Company (the “Shares”), representing approximately 75% of the issued and outstanding shares of the Company, for an aggregate purchase price of $250,000 (the “Purchase Price”) (the “Stock Purchase”). Prior to the closing of the Stock Purchase Agreement, the Sellers were our majority shareholders, Matthew Zipchen was our President, Chief Executive Officer, Secretary, Treasurer, Chief Financial Officer, and member of the board of directors of the Company (the “Board”), and Violetta Pioro was our Vice President and member of the Board.
Pursuant to the Stock Purchase Agreement, on July 31, 2012, the Sellers resigned from their positions as officers and directors of the Company, and the Board of Directors and the stockholders of the Company appointed Scott Kettle to serve as the President, Chief Executive Officer, Secretary, Treasurer, Chief Financial Officer and director of the Company upon closing of the Stock Purchase. Biographical information for Mr. Kettle has been disclosed on the Company’s Current Report on Form 8-K filed with the SEC on August 18, 2013.
In connection with the Stock Purchase, the Company has changed its focus to engage in the business of online distribution of all digital content including but not limited to full length feature films, television series, sports, documentaries, live events via our proprietary content distribution network (CDN).
To reflect the change in business strategy of the company, on August 22, 2013, the Board of Directors unanimously approved a change in the Company’s name from Media Mechanics, Inc. to Gawk Incorporated.
Also on August 22, 2013, the Company affected a 30-for-1 forward split of our Common Stock, where each stockholder will receive 30 additional shares for each share owned as of the record date. All share amounts in this report have been adjusted to reflect this forward split.
Plan of Operations
We are a development stage corporation and have not started operations and have not yet generated or realized any revenues.
Gawk Incorporated anticipates launching gawk.com in Q1 2014, as an online streaming provider of digital content, including but not limited to full- length feature films, television series, sporting events, documentaries, original programming, and live events via our proprietary content distribution network (CDN). Our content will be exclusively available via the website gawk.com and Gawk-incorporated enabled devices. We are in the development phase of our technology. Gawk will be capable of delivering High Definition quality content on a global basis.
We have only one officer and director. He is responsible for our managerial and organizational structure which will include preparation of disclosure and accounting controls under the Sarbanes Oxley Act of 2002. When these controls are implemented, he will be responsible for the administration of the controls. Should he not have sufficient experience, he may be incapable of creating and implementing the controls which may cause us to be subject to sanctions and fines by the SEC which ultimately could cause you to lose your investment.
The Company anticipates bringing on experienced members to our management team in the coming months. In addition to building out our management team we will also be adding in house developers in order to complete the development of gawk.com and our applications (app) for the many different devices and internet enabled televisions currently on the market.
In order to complete our plan Gawk Incorporated is currently pursuing various forms of financing within the available equity markets.
If we are unable to complete any phase of our software development or marketing efforts because we do not have enough resources, we believe that we will have to cease our development and or marketing operations until we raise money. Attempting to raise capital after failing in any phase of our software development plan would be difficult. As such, if we cannot secure additional proceeds we may have to cease marketing our software which may negatively affect investors’ investment.
Results of Operation for the Three and Six Months Ended July 31, 2013 and 2012
Revenues. Revenue for the three and six month periods ended July 31, 2013 were $0 and $1,572, respectively, as compared with $4,738 and $10,269 for the three and six month periods, respectively, ended July 31, 2012. The decrease in revenue was a result the Stock Purchase and the change in the Company’s business focus.
5
Operating Expenses. Operating expenses for the three and six month periods ended July 31, 2013 were $5,204 and $41,028, as compared with $4,776 and $7,755 for the three and six month periods, respectively, ended July 31, 2012. The change was a result the Stock Purchase and the change in the Company’s business focus.
Net Profit (Loss). Our net profit (loss) for the three and six month periods ended July 31, 2013 were $(5,204) and $(39,456), as compared with $(919) and $721 for the three and six month periods, respectively, ended July 31, 2012.
Liquidity and Capital Resources
Our cash and cash equivalents totaled approximately $65,617 at July 31, 2013.
In order to meet our operational goals, including developing the software for our website, we will need funds for website development costs. If we do not develop the software, we believe that we can currently satisfy our public company reporting costs for the next twelve months with our current cash and expected revenues.
Net Cash Provided by (Used in) Operating Activities. Net cash of $(40,611) was used in operating activities in the six month period ended July 31, 2013, as opposed to $4,359 provided by operating activities in the six month period ended July 31, 2012. From January 6, 2011 (inception) to July 31, 2013, net cash of $(59,110) was used in operating activities.
Net Cash Provided By Financing Activities. Net cash of $0 was provided from financing activities in the six month period ended July 31, 2013, as opposed to $0 in the six month period ended July 31, 2012. From January 6, 2011 (inception) to July 31, 2012, net cash of $125,000 was generated from financing activities.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.
Critical Accounting Policies
Development Stage
The Company's financial statements are presented as those of a development stage enterprise. Activities during the development stage primarily include equity based financing and further implementation of the business plan.
Risks and Uncertainties
The Company intends to operate in an industry that is subject to rapid change. The Company's operations will be subject to significant risk and uncertainties including financial, operational, technological, regulatory and other risks associated with a development stage company, including the potential risk of business failure.
Use of Estimates
The preparation of unaudited interim financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the unaudited interim financial statements and accompanying notes. Such estimates and assumptions impact, among others, the fair value of share based payments.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from estimates.
6
Recent Accounting Pronouncements
There are no recent accounting pronouncements that are expected to have an effect on the Company’s financial statements.
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.
Disclosure Controls and Procedures.
We carried out an evaluation, under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange 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. Based upon our evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are effective, as of July 31, 2013, in ensuring that material information that we are required to disclose in 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 rules and forms.
Changes in Internal Control over Financial Reporting.
There were no changes in our system of internal controls over financial reporting during the period covered by this Report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
From time to time, we may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.
None.
None.
Not applicable.
None.
7
(a) Exhibits
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Exhibit
Number
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Description
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31.1
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Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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32.1*
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Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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101.INS **
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XBRL Instance Document
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101.SCH **
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XBRL Taxonomy Schema
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101.CAL **
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XBRL Taxonomy Calculation Linkbase
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101.DEF **
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XBRL Taxonomy Definition Linkbase
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101.LAB **
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XBRL Taxonomy Label Linkbase
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101.PRE **
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XBRL Taxonomy Presentation Linkbase
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* In accordance with SEC Release 33-8238, Exhibit 32.1 is furnished and not filed.
** Furnished 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.
8
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.
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GAWK INCORPORATED
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Date: September 20, 2013
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By:
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/s/ Scott Kettle |
| Scott Kettle | ||
| President, Chief Executive Officer, | ||
| Secretary, Treasurer, and Chief Financial Officer. | ||
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(Duly Authorized, Principal Executive Officer and Principal Financial Officer)
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9