MULTIMEDIA PLATFORMS INC. - FORM 10-Q

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EXCEL - IDEA: XBRL DOCUMENT - MULTIMEDIA PLATFORMS INC.	Financial_Report.xls
EX-32.1 - CERTIFICATION - MULTIMEDIA PLATFORMS INC.	eahc_ex321.htm
EX-31.2 - CERTIFICATION - MULTIMEDIA PLATFORMS INC.	eahc_ex312.htm
EX-32.2 - CERTIFICATION - MULTIMEDIA PLATFORMS INC.	eahc_ex322.htm
EX-31.1 - CERTIFICATION - MULTIMEDIA PLATFORMS INC.	eahc_ex311.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For quarterly period ended March 31, 2014

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 000-33933

SPORTS MEDIA ENTERTAINMENT CORP.

(Exact name of registrant as specified in its charter)

Nevada		88-0319470
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1 Tara Boulevard, Suite 200, Nashua, NH		03062
(Address of principal executive offices)		(Zip Code)

(877) 539-5644

(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 x 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 x No o

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.

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	x
(Do not check if a smaller reporting company)

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 21,073,750 shares of common stock, par value $0.001, were outstanding on April 21, 2014.

SPORTS MEDIA ENTERTAINMENT CORP.

FORM 10-Q

TABLE OF CONTENTS

		PAGE
PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements		3

	Consolidated Balance Sheets as of March 31, 2014 (Unaudited) and December 31, 2013 (audited)		3

	Consolidated Statements of Operations (Unaudited)		4

	Consolidated Statement of Stockholders' Equity (Deficit) (Unaudited)		5

	Consolidated Statements of Cash Flows (Unaudited)		6

	Notes to Consolidated Financial Statements		7

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations		12

Item 4.	Controls and Procedures		15

PART II - OTHER INFORMATION

Item 3.	Defaults Upon Senior Securities		16

Item 6.	Exhibits		16

Signatures			17

Item 1. Financial Statements.

Sports Media Entertainment Corp.

Consolidated Balance Sheets

	March 31,			December 31,
	2014			2013
	(Unaudited)
Assets
Current Assets
Cash	$	3,533		$	6,475
Other current assets (Note B)		3,942			3,293

Total current assets		7,475			9,768

Fixed assets, net (Note C)		4,152			5,535
Total assets	$	11,627		$	15,303

Liabilities and Stockholders' Deficit
Current Liabilities
Accounts payable & accrued expenses (Note D)	$	105,552		$	95,999
Deferred revenue		4,414			6,128
Accrued interest payable (Note E)		108,827			99,053
Promissory notes (Note E)		345,144			345,144
Convertible promissory notes (Note E)		160,200			145,200
Total Current Liabilities		724,137			691,524

Commitments and contingencies

Stockholders' Deficit
Common stock, $0.001 par value 100,000,000 shares authorized; issued and outstanding 21,073,750 at March 31, 2014 and December 31, 2013		21,074			21,074
Additional-paid-in-capital		2,301,124			2,286,722
Accumulated deficit		(3,034,708	)		(2,984,017	)
Total stockholders' deficit		(712,510	)		(676,221	)
Total liabilities and stockholders' deficit	$	11,627		$	15,303

(The accompanying notes are an integral part of these financial statements)

Sports Media Entertainment Corp.

Consolidated Statements of Operations (Unaudited)

For the Three Months Ended March 31, 2014 and 2013

	Three Months Ended March 31,
	2014			2013

Revenue	$	3,633		$	6,348

Operating expenses
General and administrative		28,163			15,382
Sales and marketing		332			4,382
Research and development		1,653			14,502
Total operating expenses		30,148			34,266

Loss from operations		(26,515	)		(27,918	)

Other Income and (Expense)
Interest expense		(24,176	)		(8,087	)
Total other income and expense		(24,176	)		(8,087	)
Earnings before taxes		(50,691	)		(36,005	)
Provision for income taxes		-			-
Net loss	$	(50,691	)	$	(36,005	)

Net (loss) per common share basic	$	(0.00	)	$	(0.00	)
Weighted average common shares outstanding basic		21,073,750			20,923,750

(The accompanying notes are an integral part of these financial statements)

Sports Media Entertainment Corp.

Statement of Stockholders' Deficit

For the Three Months Ended March 31, 2014 (Unaudited) and Year Ended December 31, 2013

					Additional					Total
	Common Stock				paid-in		Accumulated			Stockholders'
	Shares		Amount		Capital		Deficit			Deficit

Balance, December 31, 2012		20,923,750		20,924		2,240,119		(2,808,451	)		(547,408	)

Issuance of common stock to CFO		150,000		150		20,805		-			20,955
Debt discount related to the beneficial conversion feature of convertible notes		-		-		25,798		-			25,798
Net Income (Loss)		-		-		-		(175,566	)		(175,566	)
Balance, December 31, 2013		21,073,750		21,074		2,286,722		(2,984,017	)		(676,221	)

Debt discount related to the beneficial conversion feature of convertible notes		-		-		14,402		-			14,402
Net Income (Loss)		-		-		-		(50,691	)		(50,691	)
Balance, March 31, 2014		21,073,750	$	21,074	$	2,301,124	$	(3,034,708	)	$	(712,510	)

(The accompanying notes are an integral part of these financial statements)

Sports Media Entertainment Corp.

Statements of Cash Flows (Unaudited)

For the Three Months Ended March 31, 2014 and 2013

	Three Months Ended
	March 31,
	2014			2013
Cash flows from operating activities
Net loss	$	(50,691	)	$	(36,005	)
Adjustments to reconcile net loss to net cash provided (used) by operating activities:
Depreciation		1,383			1,656
Interest expense - amortization of debt discount		14,402			-
Changes in operating accounts:
Other current assets		(649	)		(7,474	)
Accounts payable and accrued expenses		9,553			9,465
Deferred revenue		(1,714	)		8,086
Accrued interest		9,774			683
Net cash used in operating activities		(17,942	)		(23,589	)

Cash flows from investing activities
Acquisition of furniture and equipment		-			-
Net cash provided (used) by investing activities		-			-

Cash flows from financing activities
Proceeds from promissory notes		-			10,000
Proceeds from convertible promissory notes		15,000			14,402
Net cash provided by financing activities		15,000			24,402

Increase (decrease) in cash		(2,942	)		813
Cash and cash equivalents at beginning of period		6,475			106
Cash and cash equivalents at end of period	$	3,533		$	919

Supplemental disclosures of cash flow information

Cash paid during the year for:
Taxes paid	$	-		$	-
Interest paid	$	-		$	-

(The accompanying notes are an integral part of these financial statements)

SPORTS MEDIA ENTERTAINMENT CORP.

(fka Explore Anywhere Holding Corp.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2014 AND 2013

NOTE A - ORGANIZATION AND GOING CONCERN

Basis of Presentation

The unaudited financial statements of Sports Media Entertainment Corp. as of March 31, 2014 and for the three months ended March 31, 2014 and 2013 have been prepared in accordance with accounting principles generally accepted in the United States for interim financial reporting. Accordingly, they do not include all of the disclosures required by accounting principles generally accepted in the United States for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2013 as filed with the Securities and Exchange Commission as part of our Form 10-K. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of the interim financial information have been included. The Company did not record an income tax provision during the periods presented due to net taxable losses. The results of operations for any interim period are not necessarily indicative of the results of operations for the entire year.

Organization

Our company’s name is Sports Media Entertainment Corp. (formerly known as Explore Anywhere Holding Corp.) (the "Company"). The Company was incorporated on April 3, 1996 in the State of Nevada as Jubilee Trading Corp. On March 3, 2002, the Company changed its name to PorFavor Corp. From inception until March 2010, we operated as a broker of structural wood materials. Then, our former CEO/President fell ill and the wood business deteriorated. As a result, the Company decided to change its business focus and look for other opportunities. In March 2010, the Company identified a target company in the area of computer monitoring software, known as ExploreAnywhere Inc. On February 4, 2011, ExploreAnywhere Inc. and its shareholders closed a Share Exchange Agreement with the Company, whereby the Company acquired all of the issued and outstanding shares of ExploreAnywhere Inc. from its shareholders in exchange for 2,613,750 shares of the Company's common stock with a fair market value of $1,163,120. The merger was accounted for as a purchase. Explore Anywhere, Inc. became a wholly-owned subsidiary of Explore Anywhere Holding Corporation engaged in the business of selling computer monitoring software, specializing in offering computer monitoring solutions for parents, corporations and educational facilities under the ExploreAnywhere name.

On December 24, 2013, the Company changed its name to Sports Media Entertainment Corp. in anticipation of a future merger and in order for the Company name to more closely reflect the nature of the anticipated business activities.

Going Concern

The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America and applicable to a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

During the three months ended March 31, 2014 the Company recognized $3,633 of revenue. However, the Company incurred a net operating loss of $26,515. The Company has negative working capital of $716,662 as of March 31, 2014.

During the next 12 months, the Company’s foreseeable cash requirements will relate to the operations of its business, maintaining its good standing, making the requisite filings with the Securities and Exchange Commission, and the payment of expenses associated with reviewing or investigating any potential business ventures. The Company may experience a cash shortfall and be required to raise additional capital. Historically, the Company has relied upon internally generated funds and funds from the sale of shares of stock and loans from its shareholders and private investors to finance its operations and growth. Management may raise additional capital through future public or private offerings of the Company’s stock or through loans from private investors, although there can be no assurance that it will be able to obtain such financing. The Company’s failure to do so could have a material and adverse effect upon it and its shareholders. Management’s ongoing priority focus is the enhancement of existing software products and the development of new ones to continuously enhance the company’s position in the marketplace.

The Company has a series of plans to mitigate the going concern:

Management expected to seek potential investors and other business opportunities from all known sources. Management’s efforts are ongoing to complete the development of new software products in order to bring these products currently in development to the marketplace.

Furthermore, management’s efforts are ongoing to enhance the Company’s Internet visibility towards potential customers through search engine optimization (SEO).

NOTE B - Other Current Assets

Other current assets as of March 31, 2014 and December 31, 2013 consists of sales being held by the Company's credit card processor and is a customary business practice.

Concentrations of credit risk

The Company performs ongoing credit evaluations of its customers. During the three months ended March 31, 2014, no customer accounted for more than 10% of revenue.

NOTE C - Fixed Assets

Fixed assets consisted of the following:

	March 31,			December 31,
	2014			2013
Computers and office equipment	$	29,818		$	29,818
Software		14,365			14,365
Total fixed assets		44,183			44,183
Accumulated depreciation		(40,031	)		(38,648	)
Fixed assets, net	$	4,152		$	5,535

During the three months ended March 31, 2014 and 2013, the Company recognized $1,383 and $1,656, respectively, in depreciation expense.

NOTE D - Accounts Payable & Accrued Expenses

At March 31, 2014, accounts payable and accrued expenses totaling $105,552 consisted of $43,964 of professional services, $37,064 of R&D services and $24,524 of trade payables.

At December 31, 2013, accounts payable and accrued expenses totaling $95,999 consisted of $36,479 of professional services, $36,664 of R&D services and $22,856 of trade payables.

NOTE E - Promissory Notes

As of March 31, 2014, the Company had the following notes payable:

	Principle		Accrued Interest		Total
Convertible promissory notes	$	160,200	$	53,574	$	213,774
Non convertible promissory notes		345,144		55,253		400,397
Total	$	505,344	$	108,827	$	614,171

As of December 31, 2013, the Company had the following notes payable:

	Principle		Accrued Interest		Total
Convertible promissory notes	$	145,200	$	50,608	$	195,808
Non convertible promissory notes		345,144		48,445		393,589
Total	$	490,344	$	99,053	$	589,397

Convertible Promissory Notes

As of March 31, 2014, the Company had outstanding the following convertible promissory notes ("CPNs"):

Date of:					Accrued		Total
Issuance	Maturity	Status	Principle		Interest		Outstanding
07/06/07	2/6/2009	Converted to stock	$	-	$	19,452	$	19,452
03/23/10	3/24/2011	Converted to stock		-		4,460		4,460
01/24/11	1/25/2012	In default		10,000		2,547		12,547
01/28/11	1/29/2012	Converted to stock		-		2,756		2,756
02/09/11	2/10/2012	In default		25,000		6,279		31,279
03/17/11	3/17/2012	In default		15,000		3,649		18,649
04/18/11	4/18/2012	In default		15,000		3,544		18,544
05/17/11	5/17/2012	In default		10,000		2,299		12,299
06/13/11	6/13/2012	In default		7,500		1,680		9,180
06/24/11	6/24/2012	In default		2,500		554		3,054
11/15/11	11/15/2012	In default		5,000		950		5,950
10/29/12	10/29/2013	In default		17,400		1,975		19,375
12/12/12	12/12/2013	In default		2,000		208		2,208
12/18/12	12/18/2013	In default		1,848		190		2,038
12/18/12	12/18/2013	In default		4,550		467		5,017
01/24/13	1/24/2014	In default		7,000		661		7,661
03/18/13	3/18/2014	In default		7,402		613		8,015
04/04/13	4/4/2014	Current		15,000		1,187		16,187
02/28/14	2/28/2015	Current		15,000		103		15,103
Total			$	160,200	$	53,574	$	213,774

Number of shares issuable upon exercise of the above debt at $0.05								4,275,480

From time to time the Company has issued CPNs all with identical terms, including a maturity date one year from the date of issuance, eight percent (8%) per annum interest rate, no requirement for any payments prior to maturity, and the right to convert the outstanding principle and interest in to into fully paid and non-assessable shares of the Company's common stock at a fixed conversion price of $0.05 per share upon default. The conversion privilege provides for net share settlement only. Pursuant to ASC 470-20-25-5, the Company determined that due to the market price of the Company's common stock being greater than the conversion price contained in each CPN on the commitment date, each CPN contained a beneficial conversion feature (“BCF”) with an intrinsic value in excess of the face amount of each CPN. The resulting discount to the Loan is recorded to interest expense upon default. The Company has not received notice from the holder of the defaulted notes to enforce collection. The Company communicates regularly with the holder who has not expressed a desire to force collection at this time.

Related to the CPN's above, during the three months ended March 31, 2014, the Company issued $15,000 of CPNs, recognized $14,402 of interest expense related to the BCF contained in CPN's falling into default during 2013 and recognized $2,966 and $2,407 during the three months ended March 31, 2014 and 2013, respectively, of interest expense related to the stated interest rate contained in the CPNs.

Non Convertible, Unsecured Promissory Notes

As of March 31, 2014, the Company had outstanding the following non convertible, unsecured promissory notes ("UPNs"):

Date of:					Accrued		Total
Issuance	Maturity	Status	Principle		Interest		Outstanding
03/09/10	3/31/2011	In default	$	7,500	$	2,438	$	9,938
12/03/10	12/4/2011	In default		10,000		2,661		12,661
12/29/10	12/30/2011	In default		7,500		1,953		9,453
04/08/11	4/8/2012	In default		7,500		1,788		9,288
06/02/11	6/2/2012	In default		10,000		2,264		12,264
06/28/11	6/28/2012	In default		6,500		1,435		7,935
07/01/11	7/1/2012	In default		6,500		1,430		7,930
07/21/11	7/21/2012	In default		2,000		431		2,431
07/26/11	7/26/2012	In default		7,500		1,609		9,109
08/05/11	8/5/2012	In default		8,500		1,805		10,305
08/08/11	8/8/2012	In default		8,500		1,800		10,300
08/24/11	8/24/2012	In default		5,000		1,041		6,041
09/13/11	9/13/2012	In default		7,500		1,529		9,029
10/04/11	10/4/2012	In default		7,500		1,494		8,994
10/06/11	10/6/2012	In default		2,250		447		2,697
10/17/11	10/17/2012	In default		10,000		1,964		11,964
11/02/11	11/2/2012	In default		5,000		964		5,964
11/07/11	11/7/2012	In default		5,000		959		5,959
11/15/11	11/15/2012	In default		3,000		570		3,570
11/28/11	11/28/2012	In default		4,500		842		5,342
12/07/11	12/7/2012	In default		3,500		648		4,148
12/27/11	12/27/2012	In default		5,500		995		6,495
01/19/12	1/19/2013	In default		12,500		2,197		14,697
02/23/12	2/23/2013	In default		5,000		841		5,841
03/02/12	3/3/2013	In default		10,000		1,664		11,664
03/09/12	3/10/2013	In default		12,500		2,060		14,560
04/17/12	4/18/2013	In default		10,000		1,563		11,563
05/03/12	5/4/2013	In default		12,500		1,910		14,410
05/22/12	5/23/2013	In default		7,500		1,115		8,615
06/04/12	6/5/2013	In default		9,500		1,385		10,885
06/11/12	6/12/2013	In default		8,500		1,226		9,726
04/03/12	4/4/2013	In default		3,800		606		4,406
07/02/12	7/3/2013	In default		3,500		489		3,989
07/11/12	7/12/2013	In default		9,500		1,308		10,808
07/23/12	7/24/2013	In default		6,500		878		7,378
08/14/12	8/15/2013	In default		5,000		651		5,651
09/04/12	9/5/2013	In default		6,000		754		6,754
09/13/12	9/14/2013	In default		500		62		562
10/05/12	10/6/2013	In default		3,500		416		3,916
10/15/12	10/16/2013	In default		5,250		612		5,862
12/07/12	12/8/2013	In default		4,000		420		4,420
12/20/12	12/21/2013	In default		5,000		511		5,511
12/30/12	12/30/13	In default		2,879		287		3,166
02/25/13	02/25/14	In default		10,000		875		10,875
04/01/13	04/01/14	Current		13,500		1,077		14,577
05/01/13	05/01/14	Current		1,000		73		1,073
06/27/13	06/27/14	Current		5,000		304		5,304
08/15/13	08/15/14	Current		5,000		250		5,250
09/11/13	09/11/14	Current		3,500		154		3,654
11/12/13	11/12/14	Current		4,500		137		4,637
12/30/13	12/30/14	Current		4,500		90		4,590
12/31/13	12/31/14	Current		13,965		271		14,236
Total			$	345,144	$	55,253	$	400,397

From time to time the Company has issued UPNs all with identical terms, including a maturity date one year from the date of issuance, eight percent (8%) per annum interest rate and no requirement for any payments prior to maturity. The Company has made no repayments of the above UPNs.

During the three months ended March 31, 2014 and 2013, the Company recognized $6,808 and $5,680, respectively of interest expense related to the UPNs above.

The total amount of convertible and non convertible promissory note principle and accrued interest in default was $529,558 as of March 31, 2014.

NOTE F - Net Loss Per Share

During the three months ended March 31, 2014 and 2013, the Company recorded a net loss. Basic net loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. The Company has not included the effects of convertible debt on net loss per share for the past two fiscal years because to do so would be antidilutive.

Following is the computation of basic and diluted net loss per share for the three months ended March 31, 2014 and 2013:

	Three Months Ended
	March 31,
	2014			2013
Basic and Diluted EPS Computation
Numerator:
Loss available to common stockholders'	$	(50,691	)	$	(36,005	)

Denominator:
Weighted average number of common shares outstanding		21,073,750			20,923,750

Basic and diluted EPS	$	(0.00	)	$	(0.00	)

The weighted average shares listed below were not included in the computation of diluted losses
per share because to do so would have been antidilutive for the periods presented:

Convertible promissory notes		4,095,825			3,273,306

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

This quarterly report contains forward-looking statements including statements regarding our expectations, beliefs, intentions or future strategies that are signified by the words “expects,” “anticipates,” “intends,” “believes” or similar language. These forward-looking statements involve risks, uncertainties and other factors. All forward-looking statements included in this quarterly report are based on information available to us on the date hereof and speak only as of the date hereof. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. The factors discussed elsewhere in this quarterly report are among those factors that in some cases have affected our results and could cause the actual results to differ materially from those projected in the forward-looking statements.

The following discussion should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this quarterly report.

Overview

The Company is engaged in the business of selling computer monitoring software solutions for parents, corporations and educational facilities under the ExploreAnywhere name.

Principal Products

We are currently in the business of selling computer monitoring software, and currently sell two cloud based computer software monitoring products, Spybuddy 2013 and Keylogger PRO 2013 (collectively, the "Software").

SpyBuddy 2013 is an internet spy software and computer monitoring product that allows users to secretly monitor all areas of a PC, tracking every action down to the last keystroke and the last file deleted. Unlike other computer monitoring and Internet spy software products, SpyBuddy 2013 monitoring software is virtually undetectable and exceptionally easy-to-use.

Keylogger Pro 2013 is the latest release of our award winning Keylogger. Keylogger Pro will silently record keystrokes typed on any keyboard layout (English, Russian, Chinese, Arabic, etc), as well as all passwords, emails, chats and social network activity typed by users of a computer. Keylogger Pro will also take high resolution screen shots of user activity allowing someone to see exactly what the user is seeing. Further, Keylogger Pro records all applications/programs used and how long the programs were used for.

Both Spybuddy 2013 and Keylogger PRO 2013 share the same software code, this means that the two are technically the same product, but where Keylogger PRO 2013 is an “economy” version that does not have all of the Spybuddy 2013 features. Both Spybuddy 2013 and Keylogger PRO 2013 are only compatible with the Windows operating systems XP, Vista, and 7.

Both products are sold on a subscription basis with an upfront, one-year license fee. Spybuddy 2013 is offered at $69.99 and Keylogger PRO 2013 is offered at $39.99. The Company offers a 7 day satisfaction guarantee or a full refund.

Results of Operations

Three Months Ended March 31, 2014 Compared With the Three Months Ended March 31, 2013.

Revenue

Revenue decreased $2,715 to $3,633 during the three months ended March 31, 2014 compared to $6,348 during the three months ended March 31, 2013. The decrease in revenue is the result of fewer subscriptions due to the Software not being compatible with Windows 8.

Operating Expenses

A summary of our operating expense for the three months ended March 31, 2014 and 2013 follows:

	Three months Ended
	March 31,				Increase /			Percentage
	2014		2013		(Decrease)			Change
Operating expense
General and administrative		28,163		15,382	$	12,781			83	%
Sales and marketing		332		4,382		(4,050	)		-92	%
Research and development		1,653		14,502		(12,849	)		-89	%
Total operating expense	$	30,148	$	34,266	$	(4,118	)		-12	%

General and Administrative

General and administrative costs include costs related to personnel, professional fees, travel and entertainment, public company costs, insurance and other office related costs. The three month increase is primarily due to higher audit related costs.

Sales and Marketing

Sales and marketing costs include costs to promote our products primarily via online methods. These costs decreased approximately $4,050 primarily due to efforts to contain costs.

Research and Development

Research and development (“R&D”) costs represent direct costs incurred in our efforts to maintain continuous development of the Spybuddy and Keylogger PRO products. These costs decreased $12,849 primarily due to efforts to contain costs.

Other Income (Expense)

Interest expense increased $16,089 to $24,176 during the three months ended March 31, 2014 compared to $8,087 during the three months ended March 31, 2013. Interest expense includes expense associated with the stated interest rate of our outstanding notes payable and accretion of the debt discount related to the BCF of our convertible promissory notes. $14,402 of the year-over-year increase is due to the amortization of the debt discount and $1,687 due to higher stated coupon interest as a result of maintaining higher loan balances in 2014 compared to 2013.

Liquidity and Capital Resources

Our available working capital and capital requirements will depend upon numerous factors, including the sale of Spybuddy and Keylogger PRO software, the timing and cost of commercialization efforts, the cost of further developing Spybuddy and Keylogger PRO, the status of our competitors, our ability to establish collaborative arrangements with other organizations, and our ability to attract and retain key employees.

From inception to March 31, 2014, we have incurred an accumulated deficit of $3,034,708. This loss has been incurred through a combination intangible asset impairment of $1,341,884, professional fees and expenses supporting our plans to develop our business and brand our services as well as continued operating losses.

At March 31, 2014, the Company had current assets of $7,475 compared to accounts payable and accrued expenses of $105,552. During the three months ended March 31, 2014, the Company had revenue of $3,633 and loss from operations of $26,515. The Company has incurred losses since inception and may not be able to generate sufficient net revenue from its business in the future to achieve or sustain profitability. To finance our operations, we are currently pursuing additional funds through equity or debt financing or a combination thereof. The Company currently has no commitments to obtain any such financing, and there can be no assurance that financing will be available in amounts or on terms acceptable to the Company, if at all.

Net cash used by operating activities was $17,942 during the three months ended March 31, 2014 as compared to $23,589 during the three months ended March 31, 2013.

Net cash provided by financing activities was $15,000 during the three months ended March 31, 2014 as compared to $24,402 during the three months ended March 31, 2013.

Plan of Operation for the Next Twelve (12) Months

Our ability to continue operations will be dependent upon the successful completion of additional long-term or permanent equity financing, the support of creditors and shareholders, and, ultimately, the achievement of profitable operations. There can be no assurances that we will be successful, which would in turn significantly affect our ability to be successful in our business plan. If not, we will likely be required to reduce operations or liquidate assets. We will continue to evaluate our projected expenditures relative to our available cash and to seek additional means of financing in order to satisfy our working capital and other cash requirements.

As of March 31, 2014, the company owed $614,171 in principal and accrued interest under a series of unsecured promissory notes issued to two (2) lenders. Interest accrues on these notes at the rate of 8% per annum. The notes do not require us to make any interim interest payments. As of the date of the filing of this quarterly report, sixty-one (61) of the notes, totaling $529,558 in principal and accrued interest, have already matured but have not been repaid. We therefore are technically in default on these notes, although neither of the lenders have sent us a notice of default. The remaining notes mature at various dates through March 31, 2015. We currently do not have the resources to repay any of these notes. Failure to acquire the resources to repay these notes could result in either or both of the lenders taking legal action against us for repayment of the notes. This debt could therefore result in the company going out of business.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Critical Accounting Estimates

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires us to make judgments, assumptions and estimates that have a significant impact on the results that we report in our consolidated financial statements. Some of our accounting policies require us to make difficult and subjective judgments, often as a result of the need to make estimates regarding matters that are inherently uncertain Note B of the Notes to Consolidated Financial Statements describes the significant accounting policies used in the preparation of the financial statements. Certain of these significant accounting policies require us to make critical accounting estimates, as defined below.

A critical accounting estimate is defined as one that is both material to the presentation of our financial statements and requires management to make difficult, subjective or complex judgments that could have a material effect on our financial condition and results of operations. Specifically, critical accounting estimates have the following attributes:

·	we are required to make assumptions about matters that are highly uncertain at the time of the estimate; and

·	different estimates we could reasonably have used, or changes in the estimate that are reasonably likely to occur, would have a material effect on our financial condition or results of operations.

Estimates and assumptions about future events and their effects cannot be determined with certainty. We base our estimates on historical experience and on various other assumptions believed to be applicable and reasonable under the circumstances. These estimates may change as new events occur, as additional information is obtained and as our operating environment changes. These changes have historically been minor and have been included in the consolidated financial statements as soon as they became known. Based on a critical assessment of our accounting policies and the underlying judgments and uncertainties affecting the application of those policies, management believes that our financial statements are fairly stated in accordance with accounting principles generally accepted in the United States, and present a meaningful presentation of our financial condition and results of operations.

Our most critical accounting estimates include:

·	the assessment of recoverability of long-lived assets, which impacts operating expenses when we record impairments or accelerate depreciation; and

·	the recognition and measurement of current and deferred income taxes, which impact our provision for taxes.

Below, we discuss these policies further, as well as the estimates and judgments involved.

Income Taxes

Provisions for income taxes are based on taxes payable or refundable for the current period and deferred taxes on temporary differences between the amount of taxable income and pretax financial income and between the tax bases of assets and liabilities and their reported amounts in the financial statements. Deferred tax assets and liabilities are included in the financial statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled.

When accounting for Uncertainty in Income Taxes, first, the tax position is evaluated to determine the likelihood that it will be sustained upon external examination. If the tax position is deemed “more-likely-than-not” to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50 percent likelihood of being realized upon ultimate settlement. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company underwent a change of control for income tax purposes on October 8, 2003 according to Section 381 of the Internal Revenue Code. The Company’s utilization of U.S. Federal net operating losses will be limited in accordance to Section 381 rules. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

Recently Issued Accounting Pronouncements

We review new accounting standards as issued. Although some of these accounting standards issued or effective after the end of our previous fiscal year may be applicable to us, we have not identified any standards that we believe merit further discussion. We believe that none of the new standards will have a significant impact on our consolidated financial statements.

Off-Balance Sheet Arrangements

We have no material off-balance sheet transactions.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation 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 Securities Exchange Act of 1934 (the “Exchange Act”), as of the end of the period covered by this quarterly report. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of March 31, 2014 that our disclosure controls and procedures were effective such that the information required to be disclosed in our United States Securities and Exchange Commission (the “SEC”) reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 3. Defaults Upon Senior Securities.

Please refer to the financial statement footnotes, "Note E - Promissory Notes". The Company is currently in default on $529,558 of principal and accrued interest. During the three months ended March 31, 2014, $26,551 of principle and accrued interest of notes payable matured and fell into default.

Item 6. Exhibits.

Exhibit No.		Identification of Exhibit

31.1*		Certification of Brenden Garrison, Interim Chairman, President, Chief Executive Officer of Sports Media Entertainment Corp., pursuant to 18 U.S.C. §1350, as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of Justin Frere, Chief Financial Officer of Sports Media Entertainment Corp., pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.
32.1*		Certification of Brenden Garrison, Interim Chairman, President, Chief Executive Officer of Sports Media Entertainment Corp., pursuant to 18 U.S.C. §1350, as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002.
32.2*		Certification of Justin Frere, Chief Financial Officer of Sports Media Entertainment Corp., pursuant to 18 U.S.C. §1350, as adopted pursuant to §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.

SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	SPORTS MEDIA ENTERTAINMENT CORP.

Date: April 22, 2014	By:	/s/ Brenden Garrison
		Brenden Garrison
		Interim Chairman, President and Chief Executive Officer (Principal Executive Officer) and Secretary

	By:	/s/ Justin Frere
		Justin Frere
		Chief Financial Officer (Principal Financial Officer, and Principal Accounting Officer)

MULTIMEDIA PLATFORMS INC. - FORM 10-Q - April 22, 2014

Attached files

MULTIMEDIA PLATFORMS INC. Reports