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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-K

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended March 31, 2014

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 333-176581
 
YOUR INTERNET DEFENDER, INC.
(Exact name of registrant as specified in its charter)
 
Nevada
 
30-0687898
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)
 
20 East Sunrise Highway, Suite 202,
Valley Stream, New York
 
11581
(Address of principal executive offices)
 
(Zip Code)

(516) 303-8199
(Registrant’s telephone number, including area code)

Copies of Communications to:
Laura Anthony, Esq.
Legal & Compliance, LLC
330 Clematis Street, Suite 217
West Palm Beach, FL 33401
(561) 514-0936
Fax (561) 514-0832

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

Securities registered under Section 12(g) of the Act: Common Stock, $0.0001 par value
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  o No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes  o No  x

Indicate by check mark whether the issuer (1) 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  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 definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Ruble 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 Rule 12b-2 of the Exchange Act). Yes  o No  x
 
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold as of the last business day of the registrant's most recently completed second fiscal quarter. $0 on September 30, 2013.
 
Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date, there are 52,000,000 shares of common stock are issued and outstanding as of June 23, 2014.
 
DOCUMENTS INCORPORATED BY REFERENCE
 
None.



 
 

 
Table of Contents
 
     
Page
 
Part I
     
       
Item 1
Business
   
4
 
Item 1A
Risk Factors
   
12
 
Item 1B
Unresolved Staff Comments
   
12
 
Item 2
Properties
   
12
 
Item 3
Legal Proceedings
   
12
 
Item 4
Mine Safety Disclosures
   
12
 
         
Part II
       
         
Item 5
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
   
13
 
Item 6
Selected Financial Data
   
13
 
Item 7
Management’s Discussion and Analysis of Financial Condition and Results of Operations
   
13
 
Item 7A
Quantitative and Qualitative Disclosures About Market Risk
   
22
 
Item 8
Consolidated Financial Statements and Supplementary Data
   
22
 
Item 9
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
   
22
 
Item 9A
Controls and Procedures
   
22
 
Item 9B
Other Information
   
23
 
         
Part III
       
         
Item 10
Directors, Executive Officers and Corporate Governance
   
24
 
Item 11
Executive Compensation
   
26
 
Item 12
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
   
27
 
Item 13
Certain Relationships and Related Transactions, and Director Independence
   
28
 
Item 14
Principal Accounting Fees and Services
   
29
 
         
Part IV
       
         
Item 15
Exhibits, Financial Statements Schedules
   
30
 
Signatures
   
31
 

 
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FORWARD-LOOKING STATEMENTS

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 Exchange Act of 1934, as amended (the "Exchange Act”). The Securities and Exchange Commission encourages companies to disclose forward-looking information so that investors can better understand a company’s future prospects and make informed investment decisions. This report and other written and oral statements that we make from time to time contain such forward-looking statements that set out anticipated results based on management’s plans and assumptions regarding future events or performance. We have tried, wherever possible, to identify such statements by using words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “will” and similar expressions in connection with any discussion of future operating or financial performance. In particular, these include statements relating to future actions, future performance or results of current and anticipated sales efforts, expenses, the outcome of contingencies, such as legal proceedings, and financial results. A list of factors that could cause our actual results of operations and financial condition to differ materially are discussed in greater detail under Item 1A – “Risk Factors” of this report:
 
We caution that the factors described herein and other factors could cause our actual results of operations and financial condition to differ materially from those expressed in any forward-looking statements we make and that investors should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New factors emerge from time to time, and it is not possible for us to predict all of such factors. Further, we cannot assess the impact of each such factor on our results of operations or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

OTHER PERTINENT INFORMATION

Throughout this Annual Report references to “we”, “our”, “us”, “YID”, “the Company”, and similar terms refer to Your Internet Defender, Inc.
 
 
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ITEM 1. BUSINESS

Corporate Background
 
Your Internet Defender Inc. was incorporated under the laws of the State of Nevada on May 4, 2011 and engages in online brand management, focusing on offsite search engine optimization (SEO), social media reputation monitoring, and specialized brand reputation marketing. We have developed a range of services, proprietary methodology and systems that enable companies, professionals and individuals to protect and promote their brands in the most favorable manner, while attracting traffic to their desired web locations. Our search engine optimization, on-line reputation management and social monitoring services are fully operational. In addition, we have developed automated reputation monitoring products, as well as downloadable software to be used directly by our customers without any assistance.
 
Our goal is to help consumers and companies accurately represent themselves online as search and user-generated content continue to dominate the Web. We aim to provide all consumer segments — including professionals, business owners, social Web enthusiasts, parents and more – with solutions to control their online reputations and protect against Internet stalking, identity theft/impersonation and other online threats.
 
Principal Service and Markets
 
YID offers a full spectrum of reputation and privacy solutions service to safeguard and remove private, personal information from the Internet. While many companies engaging in the business of reputation management focus on moving relevant content to the top of Google results (“quick-fix” solution), YID’s business focus is to find a more permanent and far reaching result, which will help professionals grow their businesses online.
 
Having only positive relevant information displayed is crucial for any online business. The Company believes that decision makers depend on on-line searches before entering into new business relationships. By the same token, it is equally important for individuals to have their best “image” displayed during an online search, improving their professional presentation and, thus, giving them a higher probability of securing a job and / or potential business opportunity.
 
Our service solutions helps parents stay informed of their children’s whereabouts online and assist customers in identity management by removing personal identifiable information from Internet databases.
 
YID continually monitors the web and the social networks for desired keywords. Upon request of such service, we are able to block the release of our client’s private data. Often sensitive private information and customer data is easily available online from numerous sources, and may even be sold without a customer’s consent. YID helps clients protect and prevent this data from being abused by (a) searching and identifying such publicly available private information via search engines and social channels such as Facebook, Twitter and others, (b) following up by assisting clients in formally requesting that such data be removed from the identified public locations, and (c) in the event that the data is not removed, by suppressing and making such information less visible online by optimizing and promoting other, less personal information that is displayed for the customer.YID currently obtains information from numerous people-search websites, such as Intelius, Spokeo, About.me, PeopleSmart and MyLife. As new similar websites become publicly available, YID will work to include that new data into its monitoring activities.
 
Our ability to identify, access and, in a way, affect online information helps interested parties to preserve safety of their valuable data being displayed. It has been our experience that most people / organizations may not even be aware that certain information is in fact available online, despite their best efforts to keep that information private. Our ability to provide such data location is critical in their attempts to control that process.

 
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Summary of Services
 
Our services can be classified in the following categories:
 
1. Search Engine Optimization (SEO)
 
2. Social Media Marketing and Monitoring
 
3. Specialized Online Brand Reputation Management
 
Search Engine Optimization (SEO) is the process of improving the visibility of a website in search engines via the "natural" ("organic" or "algorithmic") search results. Typically, this is accomplished by two distinct methods: (a) on-site programming and content changes, and (b) off-site efforts, such as linking and blog posts, among others. On-site optimization and programming refers to our efforts that need to be instituted on the actual client website, including coding, programming, insertion of meta tags, categories and modifying the content of each page of the website to be positioned properly for recognition and indexation by the search engines. Off-site efforts entail all our activities that are performed away from the actual client website, including posting entries on blogs and forums, requesting links from relevant websites and utilizing social channels such as Facebook and Twitter to post relevant content with a link back to the client website.
 
Included in our SEO and marketing services are two propriety tools, SEO Toaster 2.0 and SEO Nexus. SEO Toaster 2.0 is an advanced SEO website builder software, which is available for download from our website www.yourinternetdefender.com. Any website developed or hosted on SEO Toaster 2.0 will have distinct SEO advantages in the organic search engine rankings and thus automatically improve online visibility for YID customers utilizing this platform. The platform has been developed with SEO Samba Corp. and became available in December 2011.
 
SEO Nexus is an online marketing tool that automatically executes SEO techniques and markets your e-commerce, B2B or service website through an increasing number of search engines. Once connected, this unique software optimizes and automates all on-site SEO factors and includes time-saving automation routines. SEO Nexus also augments your search engine rankings potential by enabling your website(s) to become a Google News & Yahoo News source. The system also creates and distributes RSS feeds to directories; as well as seamlessly meshes with your email marketing provider to send instant email news and newsletter updates. In addition, our software directly communicates with Google on your behalf using the Google Webmaster Tools API, performing a number of automated back-end tasks.

Social Media Marketing is the process of utilizing online social media, as well as social communities and forums to promote products, services and individuals. The most popular and well-known social media are websites such as Facebook and Twitter, where companies and individuals have an opportunity to share information they wish to promote with hundreds of thousands of users. By the same token, companies and individuals have an opportunity to monitor these social spaces and learn what is being said about them, about their products or anything else they may be interested in.
 
We provide social media marketing and monitoring services to a firm to develop a social presence on the major social networks, including Facebook and Twitter, and to enable the firm to communicate socially with thousands of potentially interested individuals. YID provides services to monitor the social sentiment on selected topics by monitoring selected keywords and to monitor the use of their name and if it is being mentioned in social discussions.
 
Online Reputation Management is the process of identifying all the information that is being displayed about a brand or a person when their name is being searched online and making sure only the most accurate and relevant data is visible. Many individuals and corporations will find a great deal of incorrect, false and otherwise damaging information provided about them in online searches. Google has become one of the predominant sources for such searches and people and companies utilize Google to find out everything possible about an individual or a company. Negative information found on Google could prove extremely costly to a potential business relationship.
 
YID is able to identify the positive search results and optimize them using a combination of on-site and off-site methods of search engine optimization in order to make sure they come up first and foremost as defined by the search engines. By optimizing positive information flow to the top of Google using both on-site and off-site methods of search engine optimization, negative postings and other misleading information are squeezed out and get pushed down in ranking, replaced by the positive. This is known as negative suppression.
 
 
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Additional Service-Related Terms
 
Reputation Management:

Reputation management is the process of identifying what other people are saying and feeling about you or your business; and taking action to ensure that the end result satisfies your goals. Social media monitoring is also important for reputation management.
 
Reputation Management involves improving search results using optimization and viral marketing. Reputation Management is more important than ever as buying decisions are decided by what is found on the internet. Where two products resemble each other, often selected is the expensive brand based on the brands reputation.
 
Visibility and high rank indexing with positive publicity which displaces negative publicity is usually the goal or reputation management services. This will results in an increase in positive web presence, helping the customer to own top spots in search results. Reputation management enables customers to protect and manage their reputation and brand, becoming actively involved in the outcome of search engine results.
 
Reputation Management is critical when considering fiscal implications. Reputation management through analyzing and improving search results can prevent the loss of business or career and ensure ongoing success for you and/or your business.
 
Social Media Monitoring Service: 

We offer a comprehensive, automated reputation monitoring products for our customers which will allow them to learn who is talking about them, their brands, company or products on websites, videos, news, blogs and social networks.
 
Today’s times dictate that nearly every business and individual have and maintain a positive Web presence both personally and professionally. Our Reputation Management and Monitoring tool continuously monitors search engine results and mentions on websites, blogs, social networking and online directories using our proprietary methodology. This tool is capable of combing the Web for negative mentions of our customers’ name or their companies and interact on forums, blogs and social networking site with positive content.
 
Our Reputation Management and Monitoring services consist of a onetime fee and an on-going monthly maintenance and monitoring fee. Competitors or ex-employees could file hundreds of new defaming reports and it would not matter. Our Internet search engine works around the clock to find these reports and remove them from the search engine results. YID checks customers' search results daily to ensure that not only are their old references not appearing in search engine results, but to ensure that no new reports will threaten their positive search results. The on-going monitoring and maintenance program not only keeps any new negative posts from appearing, but it also drives more traffic to customers website and keeps the search engine results filled with positive information about our customers and their companies. Any defaming and false reports available online may be removed by first requesting that such data be removed from the identified sources. We assist in properly addressing such requests. However, much of the time, without a court order, it is difficult to have information voluntarily removed. In such cases, we are able to suppress and make the negative information virtually invisible online by: (a) identifying any existing positive information available online for the client and, using a combination of on-site and off-site optimization methods, pushing positive content up in rankings to eventually replace the negative false information, and (b) creating additional web locations (blogs, websites, social profiles) that depict all the positive information and content the client wants to display, and using both on-site and off-site optimization methods pushing positive content up in rankings to eventually replace the negative content.
 
 
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We are able to identify and access sources of negative information on any given topic / keyword, we are equally able to provide alternative content to replace or add to existing information.

Search Engine Reputation Management (SERM):

Search Engine Reputation Management (SERM) involves both search engine marketing and search engine optimization. Unhappy consumers, political groups, competitors and disgruntled employees may have an interest in posting negative information about you and your company. SERM takes control of search engine results employing optimization as well as marketing to manage and control damaged corporate identities and reputations on the internet. Our basic strategy in this regard is to optimize the positive information in such a way as to make it substantially more relevant and presentable on behalf of the customer, while making any negative data less visible, and thus less relevant in terms of search engine results.
 
Online Reputation Management (ORM): Online Reputation Management involves both marketing and public relations along with search engine marketing. Visibility and high search engine indexing with good publicity which displaces negative publicity is the goal. This results in an increase in positive web presence, helping you own top spots in search engine rankings. Online Reputation Management enables you to protect and manage your reputation and brand becoming actively involved in the outcome of search engine results. Reputation Monitoring research and analysis may also be considered Online Reputation Management.

Online Identity Management (OIM): Online identity management (OIM) is a set of methods for generating a distinguished presence of a person or brand on the Internet. That presence could be reflected in any kind of content that refers to the person or brand.
 
Search Engine Image Protection (SEIP): Also known as search engine reputation management, combines the expertise of Search Engine Marketing (SEM) and Public Relations, and is designed to protect a company or brand against incorrect negative publicity via the Internet. By using SEIP strategies to push potentially damaging information out of the top search engine rankings, marketers hope to protect their brand image and make a good impression on Internet users. (http://en.wikipedia.org/wiki/Search engine image protection)
 
Professional BrandingProfessional branding is the process by which people and their careers are marked as brands. Also known as online image management is a set of methods for generating a respectable presence of a person on the Internet. That presence could be reflected in any kind of content that refers to the person, including participation in blogs, personal web sites, social media, pictures or video.
 
Brand ManagementBrand Management is the application of marketing techniques to a specific product, product line, or brand. It seeks to increase the product’s perceived value to the customer and thereby increase brand franchise and brand equity. Traditional media, social media, blogs, forums and other groups can leave you vulnerable if you are not involved.
 
 
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Social Media Marketing Campaigns: Social Media Marketing (SMM) is a strategy that encourages individuals to pass on a quality marketing message to others, creating a self-replicating process in the message’s exposure and influence. It involves a process of creating a community online or gaining increased awareness of your brand or product in existing online communities. It combines the objectives of Internet Marketing with social networking sites such as Facebook, Flickr, Twitter, LinkedIn, and Digg. These social media communities connect people who share common interests and can be used as places to put out their online marketing message. In today’s web-based world consumers are looking to find a community around their services so that they can make a purchase decision based on what others are saying and how the company has interacted with them. The benefits of SMM include surges of traffic and hundreds of new backlinks that can help in SEO/SMO efforts, along with exposure to a new audience. Or SMM programs include the following elements:
 
·  
Call To Action (creating brand awareness, community chatter, surveys, customer opinions, giveaways and other campaigns to generate positive buzz)
 
·  
Quick Response Services –We are not simply monitoring existing online information, but also creating ways to attract new online and social attention, ways to engage new customers.
 
·  
Ability to quickly respond to keyword strings found; Ability to instantly engage targeted discussion space through the use of pre-established networks / proprietary web locations
 
·  
Ability to disperse / disseminate desired information quickly and efficiently
 
·  
Negative Suppression - It goes beyond simple monitoring; we would become an active participant in the discussion space, engaging the group as one of the “insiders”, simply sharing our opinion on the topic in question, instead of “selling” it to the group.
 
·  
Increasing the level of relevance of positive / desired Google search engine items
 
·  
Decreasing the visibility of negative search engine items
 
Measurements –Need to enable customers to measure the effectiveness of their social undertakings, which can be measured in terms of new followers, subscribers and responses. YID tools help its customers and clients measure the effectiveness of their custom designed campaigns The success and effectiveness of most social campaigns is normally measured by the number of online followers the company acquires as a result (in case of social engagement campaigns), or the number of responses / comments to the company's outgoing message / solicitation (in case of Call to Action campaign).
 
Marketing and Implementation Strategy
 
The following is an outline of a three-stage strategy for expanding our services and operations.
 
1.   
Direct Marketing Efforts.
 
Our sales and marketing team solicits our product lines to the appropriate client base. We have adopted a strategy of working with numerous sales people and simply adding YID products and services to their existing mix of offerings. Examples of this ongoing strategy are: (a) lawyer placement professional who is promoting YID services to his existing and future clients; and (b) an independent programming professional advising his current clients to consider YID services and will advise all his potential clients of the same.
 
2.   
Alliances with Existing PR & Reputation Firms. Demonstrated performance and proven ability will position YID to receive sub-contracted business from other established PR & Reputation Management Firms. YID is in the process of securing ongoing relationships with a number of marketing and PR firms, offering our services as an additional revenue line for their existing and potential clients. Currently, we believe, most marketing and PR firms do not offer online reputation services in their mix of products / services.
 
 
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3.   
Customer Referrals & Incentives. As a rule, given solid level of past performance, a steady amount of referrals and suggested business may be expected. YID encourages existing customers to refer potential clients. At this time, there is no specified incentive program that is uniform in nature when it comes to financially rewarding such referrals. YID offers a discount for the monthly charges of an existing customer providing a referral, thus lowering their monthly payments to us as a reward for the referral. YID plans to establish a uniform policy regarding such financial incentives, however, at the present time, this policy has not yet been formalized.
 
SWOT Analysis
 
The following diagram summarizes how our SWOT analysis defines the Key Success Factors of the Market and Distinctive Competencies of Your Internet Defender Inc. and is meant to identify strengths and weakness of the Company as they relate to a typical start-up in this marketplace. These factors are general in nature, and only represent an opinion expressed by our management. We believe that most weakness factors listed are being addressed and resolved, or will become less of a factor as our business matures.
 
Strengths
Weaknesses
Distinctive Competencies
Skills in online marketing, communications, customer engagement, search engine ranking / optimization.
Local presence in major markets. Vast international network of connections and entrepreneurial relationships.
Limited initial resources. Substantial competition.
Limited track record.
Vast connections, substantial knowledge base, existing online assets and resources.
Opportunities
Threats
Key Success Factors
Large # of businesses / individuals in the U.S. and abroad in need of the product. Bad performance by competitors creates marketplace opportunity.
Small budgets 
Low barriers to entry 
Well funded competitors 
Core strengths in marketing / strategy
Corporate Image focus.
Business relationships
 
Differential Advantage
 
We seek to create a value proposition based on the following differential advantage ideas:
 
·
Focus on helping corporate brands and high net worth individuals to establish and maintain proper online image;
·
Practical, actionable, short- and long-term strategy assistance;
·
Local presence for availability and overseas presence for minimization of costs;
·
Broad skill base combining A+ training with small business experience.
 
 
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Pricing Strategy
 
YID determines the pricing structure for each deliverable based on hourly estimates and fees. This will be expressed to the client as a per-deliverable fixed price in a quote. Clients can determine which deliverables they would like to purchase. YID will charge the quoted price even if we have underestimated hours, to maintain credibility with budget-conscious corporate clients.
 
In time, YID may consider alternative pricing arrangements, or potentially all equity-payments for specific projects. Additionally, YID will offer cost-effective maintenance services that will provide recurring revenue streams and ensure customer loyalty. It is anticipated that most clients will sign-up for our six-month contracts, followed by a period of maintenance.
 
Marketing & Strategic Alliances
 
YID’s marketing efforts will focus on developing our credibility. Our services will be targeted to corporations of various sizes, well-established and new brands, as well as individuals. We will use search engine marketing, top industry trade shows, trade publications, referrals, publicity and media to reach our target audiences. We have created industry specific promotional materials to develop our image and establish ourselves as a global leader in the Social Marketing/Reputation Management industry.
 
YID promotes its website www.yourinternetdefender.com in order to be found in relevant searches (potential customers searching for “online reputation management”, “social marketing specialists” and similar services). In addition, we have implemented large-scale social media marketing program, publicizing our website and blog in which numerous industry trends and updates are disseminated to large groups of relevant social users.

YID is seeking new clients, both individual and corporate, by disseminating the description of its services to people with whom the management and our officers have previous established relationships. Using this “word of mouth” technique has efficiently allowed us to establish a YID relationship and initial track record and to demonstrate our capabilities. In addition, YID markets its services and products to public relations and marketing firms, offering our brand of services to their respective clients, as a value-added service.
 
Using this strategy, we established a relationship with Marketsmith, Inc, a marketing company based in New Jersey that includes our company on their list of potential resources. In addition, we market our products and services to law firms whom we consider us as a valuable resource for their clients the law firms who employ our services to improve their SEO/online optimization efforts and to build up their social media marketing presence.

To further exploit our direct marketing approach, we have an agreement with Banner Marketing which allows us to provide marketing, sale, and support of website services on an as-needed basis to its clients. Banner Marketing provides advertising solutions using print and digital platforms, and is a well-established staple in the home furnishings advertising and other industries. Banner Marketing has corporate relationships with such companies as Ashley Furniture Home Stores and many other well-known retail chains. Banner Marketing has sales presence and relationships in all 50 states and provides top-notch branding, concept, design, copy and media buying services to its clientele. Banner Marketing does not provide online marketing / optimization / reputation services, and they have chosen to partner with our company to leverage our expertise in the online sphere as well as our technology solutions.
 
Representatives of YID and firms with which YID subcontract are a staple at Google-sponsored industry events, in which the newest trends and changes are shared and discussed, such as the annual Search Engine Strategies Chicago trade show, where our representatives network with other industry participants and potential clients. YID subcontracts part of its required work to outside specialty firms, which provide specified narrow-scope services, such as meta-tag searches and programming and Google modification. Utilizing such subcontractors allows us to handle additional and larger projects without having to hire full-time employees, and typically such subcontractors offer a higher skill level.
 
 
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YID has business relationships with numerous subcontractors, the use of which is dictated by the particular area of expertise that each subcontractor possesses. We do not have agreements with any of these subcontractors in place at this time, as their involvement is strictly on a need-basis, restricting their work to the specific area of a project with which we need assistance.
 
Our Strategy
 
Management believes that going forward, the Company will be able to generate revenues from services rendered relating to website creation; content management systems; setup and training; strategic audit consultation and implementation; technical audit consultation an implementation; content audit consultation and implementation; keyword selection; content writing guidelines; design for blog Twitter and Facebook; web analytics; search engine ranking analytics setup along with other related services.
 
Additionally management believes that going forward, a substantial portion of revenue will be generated from monthly service fees that include ongoing on-site optimization; server management; offsite optimization strategy in addition to other monthly related services.
 
Competition
 
While there are many companies and sites that are in the business of social marketing and reputation management, presently, we do not believe that any of these companies provide the identical mix of the services that YID offers. Some of our key competitors in this social marketing and reputation management industry are: Reputation.com; Reputationmanagementconsultants.com; and Reputationprofessor.com. All these companies focus on helping consumers accurately represent themselves online as search and user-generated content continue to dominate the Web. Our competitors businesses are geared towards removing the negative search engine content from the first page on a short-term basis. We believe that our products make a significantly more permanent and far reaching service offering, as opposed to a short-term “quick-fix” solution.
 
Our industry is highly competitive and fragmented, is subject to rapid change and has low barriers to entry. We may in the future compete for potential customers from other providers of our services. Some of these competitors may have significantly greater financial, technical and marketing resources and greater name recognition than we have. Competition among companies that offer similar services may result in increased costs for the acquisition marketing, shortages of skilled contractors, decrease in prices, and increases in administrative costs for hiring or retaining qualified personnel, any of which may adversely affect our business and financial position.
 
Governmental Regulations
 
Currently there are no governmental regulations affecting this industry.
 
 Employees
 
We have no employees other than our executive officers, who are also our directors. We use the services of several consultants and consulting firms to handle sales and other matters. All the technical functions needed to maintain the client relationships are being handled by outside contractors; all the elements of their assignments and coordination of their activities as it relates to execution and delivery to the client is being handled by MBTA Management, LLC owned by Tanya Kogan, a shareholder of the Company, which includes all customer contact, maintenance, resolution of issues, etc. MBTA also shares in handling some of the programming tasks and social marketing tasks, due to the creative nature of such assignments which may not always be sub-contracted out. We have no agreements with any of our consultants or consulting firms.

 
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All functions including development, strategy, negotiations and administration are currently being provided by our executive officers.
 
Research and Development
 
We do not currently have a budget specifically allocated for research and development purposes.
 
ITEM 1A. RISK FACTORS

Smaller reporting companies are not required to provide the information required by this Item 1A.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable to a smaller reporting company.

ITEM 2. PROPERTIES

The Company’s executive offices consist of approximately 100 square feet of office space provided to us by our President, Ms. Grossman and are located at 20 East Sunrise Highway, Suite 202, Valley Stream, New York 11581. We believe our current space is adequate for our operations at this time.

ITEM 3. LEGAL PROCEEDINGS

We are not presently a party to any material litigation, nor to the knowledge of management is any litigation threatened against us that may materially affect us.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable to our operations.
 
 
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PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASE OF EQUITY SECURITIES

Market Information

As of June 5, 2012, our common stock became available for quotation on the OTCQB tier of the OTC Markets, Inc. (the “OTCQB”) under the trading symbol “YIDI.” None of our common has traded since it became available for quotation on the OTCQB.
 
We have never declared or paid cash dividends on our capital stock. We currently intend to retain all available funds and any future earnings for use in the operation and expansion of our business and do not anticipate paying any cash dividends in the foreseeable future.
 
As of June 23, 2014, we had 65 stockholders of record, and an unknown number of additional holders whose stock is held in “street name.”

Recent Sales of Unregistered Securities
 
None.

ITEM 6. SELECTED FINANCIAL DATA

Not applicable to a smaller reporting company.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

The following management’s discussion and analysis should be read in conjunction with our historical combined financial statements and the related notes. The management’s discussion and analysis contains forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “project,” “expect” and the like, and/or future tense or conditional constructions (“will,” “may,” “could,” “should,” etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements in this Current Report. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors. We disclaim any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Current Report. Please see “Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions associated with these forward-looking statements.

We are currently on a fiscal year ending March 31. We have defined various periods that are covered in this report as follows:

 
“fiscal 2014” – April 1, 2013 through March 31, 2014
 
“fiscal 2013”-- April 1, 2012 through March 31, 2013

 
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Overview
 
Your Internet Defender Inc. was incorporated under the laws of the State of Nevada on May 4, 2011. We are in the business of providing online brand management, focusing on offsite search engine optimization (“SEO”), social media marketing and monitoring, and specialized brand reputation marketing. We have developed a range of services, proprietary methodology and systems that enable companies, professionals and individuals to protect and promote their brands in the most favorable manner, while attracting traffic to their desired web locations. Our search engine optimization, on-line reputation management and social monitoring services are fully operational. In addition, we have developed automated reputation monitoring products, as well as downloadable software to be used directly by our customers without any assistance.

Our services can be classified in the following categories:
 
1. Search Engine Optimization (SEO)
 
2. Social Media Marketing and Monitoring
 
3. Specialized Online Brand Reputation Management
 
We have two primary pricing structures, (i) an hourly or per-deliverable fixed fee or (ii) monthly recurring fees

Results of Operations
 
The following comparative analysis on results of operations was based primarily on the comparative audited financial statements, footnotes and related information for the periods identified below and should be read in conjunction with the financial statements and the notes to those statements that are included elsewhere in this report.

Revenues
 
Revenues in fiscal 2014 were $35,973, a decrease of $139,814 compared to the fiscal 2013.

Total operating expenses
 
Total operating expenses in fiscal 2014 were $228,200, an increase of $78,107 compared to fiscal 2013. The 52% increase was primarily due to related party consulting fees that increased by $96,000 and a $17,893 decrease in general administrative expenses.
 
Net loss
 
Net loss in fiscal 2014 was $267,479, an increase of $77,641 compared to fiscal 2013. This 40% increase was primarily a result of the increase in operating expenses discussed above.
 
 
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Liquidity and Capital Resources
 
Liquidity is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements. As of March 31, 2014 our working capital amounted to $(374,913), for a decrease of $248,095 as compared to $(126,818) as of March 31, 2013. We rely upon cash generated from our operations, loans from related parties and vendor financing to fund our operations. We expect to continue to borrow working capital from related parties and defer payments to vendors over the next twelve months. There are no limitations in our certificate of incorporation to borrow funds or raise funds through the issuance of capital stock.

We have historically borrowed funds from both related and unrelated parties. For the period ended March 31, 2014, we borrowed a total of $96,482 from related parties. The loans bear interest at the rate of 10% per annum and are payable on demand.

Two of our stockholders provided, without cost to us, services, valued at $10,400 for fiscal 2014. The total of these expenses was reflected in the statement of operations as general and administrative expenses with a corresponding contribution of paid-in capital.
 
Net cash used in operating activities during fiscal 2014 was $96,395 as compared to net cash used in operating activities of $92,100 for fiscal 2013. Net cash used in investing activities during fiscal 2014 was unchanged as compared to fiscal 2013. Net cash provided by financing activities in fiscal 2014 increased by $52,982 compared to fiscal 2013.

We may not have sufficient resources to effectuate our business plan. We expect to incur expenses during the next twelve months of operations, including but not limited to salaries, programming, subcontractors, marketing materials and sales, general overhead expenses such as for corporate legal and accounting fees, office overhead and general working capital. Accordingly, we may have to raise the funds to pay for these expenses. We potentially will have to issue debt or equity or enter into a strategic arrangement with a third party.
 
 There can be no assurance that additional capital will be available to us. We currently have no agreements, arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources. Since we have no other such arrangements or plans currently in effect, our inability to raise funds for the above purposes will have a severe negative impact on our ability to remain a viable company.

We do not currently have any plans to conduct any research and development or to purchase or sell any significant equipment. If we are unable to obtain the working capital we require to operate our business, we will not hire any employees during the next 12 months.

The Company has been seeking funding or financing opportunities to continue its operations; however, there is no guarantee that the Company will be able to secure funds in the near future, or at all. The Company is also considering the possibility of acquiring another company with profitable operations.

Going Concern Consideration
 
We have been in the development stage since our inception on May 4, 2011 and continue to incur significant losses. We had a net loss since inception of $(509,181) and for the period from inception through March 31, 2014, $(220,385) in cash was used in operating activities and $(26,950) in cash was used in investing activities. This raises substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent our ability to raise additional capital and generate additional revenues and profits from our business plan.

 
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In the opinion of our independent registered public accounting firm for our fiscal year end March 31, 2014, our auditor included a statement that as a result of our significant losses since inception there is a substantial doubt as our ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
Off-Balance Sheet Arrangements
 
None
 
Critical Accounting Policies and Estimates
 
Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reporting amounts of revenues and expenses during the reporting period.

Critical accounting estimates are estimates for which (a) the nature of the estimate is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change and (b) the impact of the estimate on financial condition or operating performance is material. The Company’s critical accounting estimate(s) and assumption(s) affecting the financial statements were:

(i)  
Assumption as a going concern: Management assumes that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.
(ii)  
Valuation allowance for deferred tax assets: Management assumes that the realization of the Company’s net deferred tax assets resulting from its net operating loss (“NOL”) carry–forwards for Federal income tax purposes that may be offset against future taxable income was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are offset by a full valuation allowance. Management made this assumption based on (a) the Company has incurred recurring losses, (b) general economic conditions, and (c) its ability to raise additional funds to support its daily operations by way of a public or private offering, among other factors.
(iii)  
Fair value of long-lived assets: Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives. The Company considers the following to be some examples of important indicators that may trigger an impairment review: (i) significant under-performance or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of assets or in the Company’s overall strategy with respect to the manner or use of the acquired assets or changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; (v) a significant decline in the Company’s stock price for a sustained period of time; and (vi) regulatory changes. The Company evaluates acquired assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events.

These significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to these estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.

Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly.

Actual results could differ from those estimates.
 
 
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Fair Value of Financial Instruments

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and has adopted paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by paragraph 820-10-35-37 of the FASB Accounting Standards Codification are described below:

Level 1
 
Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
     
Level 2
 
Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
     
Level 3
 
Pricing inputs that are generally observable inputs and not corroborated by market data.

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.

The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts receivable, prepaid expenses, accounts payable and accrued liabilities, approximate their fair values because of the short maturity of these instruments.

Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated.

Carrying Value, Recoverability and Impairment of Long-Lived Assets

The Company has adopted paragraph 360-10-35-17 of the FASB Accounting Standards Codification for its long-lived assets. The Company’s long-lived assets, which include property and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. When long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.

The Company considers the following to be some examples of important indicators that may trigger an impairment review: (i) significant under-performance or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of assets or in the Company’s overall strategy with respect to the manner or use of the acquired assets or changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; (v) a significant decline in the Company’s stock price for a sustained period of time; and (vi) regulatory changes. The Company evaluates acquired assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events.

The key assumptions used in management’s estimates of projected cash flow deal largely with forecasts of sales levels, gross margins, and operating costs of the manufacturing facilities. These forecasts are typically based on historical trends and take into account recent developments as well as management’s plans and intentions. Any difficulty in manufacturing or sourcing raw materials on a cost effective basis would significantly impact the projected future cash flows of the Company’s manufacturing facilities and potentially lead to an impairment charge for long-lived assets. Other factors, such as increased competition or a decrease in the desirability of the Company’s products, could lead to lower projected sales levels, which would adversely impact cash flows. A significant change in cash flows in the future could result in an impairment of long lived assets.

The impairment charges, if any, is included in operating expenses in the accompanying statements of operations.
 
 
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Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are recorded at the invoiced amount, net of an allowance for doubtful accounts. The Company follows paragraph 310-10-50-9 of the FASB Accounting Standards Codification to estimate the allowance for doubtful accounts. The Company performs on-going credit evaluations of its customers and adjusts credit limits based upon payment history and the customer’s current credit worthiness, as determined by the review of their current credit information; and determines the allowance for doubtful accounts based on historical write-off experience, customer specific facts and economic conditions.

Pursuant to paragraph 310-10-50-2 of the FASB Accounting Standards Codification account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company has adopted paragraph 310-10-50-6 of the FASB Accounting Standards Codification and determine when receivables are past due or delinquent based on how recently payments have been received.

Outstanding account balances are reviewed individually for collectability. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. Bad debt expense is included in general and administrative expenses, if any.

The Company does not have any off-balance-sheet credit exposure to its customers.

Website Development Costs

The Company has adopted Subtopic 350-50 of the FASB Accounting Standards Codification for website development costs. Under the requirements of Sections 350-50-15 and 350-50-25, the Company capitalizes costs incurred to develop a website as website development costs, which are amortized on a straight-line basis over the estimated useful lives of three (3) years. Upon becoming fully amortized, the related cost and accumulated amortization are removed from the accounts.

Related Parties

The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.

Pursuant to section 850-10-20 the related parties include a) affiliates of the Company; b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of section 825–10–15, to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g.  other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a) the nature of the relationship(s) involved; b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.
 
 
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Commitments and Contingencies

The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.

Revenue Recognition

The Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.

Income Taxes Provision

The Company adopted the provisions of paragraph 740-10-25-13 of the FASB Accounting Standards Codification. Paragraph 740-10-25-13.addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under paragraph 740-10-25-13, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Paragraph 740-10-25-13 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of paragraph 740-10-25-13.

The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying consolidated balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its consolidated balance sheets and provides valuation allowances as management deems necessary.

Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary.

Uncertain Tax Positions

The Company did not take any uncertain tax positions and had no adjustments to unrecognized income tax liabilities or benefits pursuant to the provisions of Section 740-10-25 for the fiscal years ended March 31, 2014 or 2013.
 
 
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Net Income (Loss) per Common Share

Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants.

There were no potentially outstanding dilutive shares for the fiscal years ended March 31, 2014 or 2013.

Cash Flows Reporting

The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards Codification.

Subsequent Events

The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR.

Recently Issued Accounting Pronouncements

In April 2014, the FASB issued ASU No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. The amendments in this Update change the requirements for reporting discontinued operations in Subtopic 205-20.

Under the new guidance, a discontinued operation is defined as a disposal of a component or group of components that is disposed of or is classified as held for sale and “represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results.” The ASU states that a strategic shift could include a disposal of (i) a major geographical area of operations, (ii) a major line of business, (iii) a major equity method investment, or (iv) other major parts of an entity. Although “major” is not defined, the standard provides examples of when a disposal qualifies as a discontinued operation.

The ASU also requires additional disclosures about discontinued operations that will provide more information about the assets, liabilities, income and expenses of discontinued operations. In addition, the ASU requires disclosure of the pre-tax profit or loss attributable to a disposal of an individually significant component of an entity that does not qualify for discontinued operations presentation in the financial statements.

The ASU is effective for public business entities for annual periods beginning on or after December 15, 2014, and interim periods within those years.
 
 
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In June 2014, the FASB issued ASU No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation.

The amendments in this Update remove the definition of a development stage entity from the Master Glossary of the Accounting Standards Codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage.
 
The amendments also clarify that the guidance in Topic 275, Risks and Uncertainties, is applicable to entities that have not commenced planned principal operations.

Finally, the amendments remove paragraph 810-10-15-16. Paragraph 810-10-15-16 states that a development stage entity does not meet the condition in paragraph 810-10-15-14(a) to be a variable interest entity if (1) the entity can demonstrate that the equity invested in the legal entity is sufficient to permit it to finance the activities that it is currently engaged in and (2) the entity’s governing documents and contractual arrangements allow additional equity investments.

The amendments in this Update also eliminate an exception provided to development stage entities in Topic 810, Consolidation, for determining whether an entity is a variable interest entity on the basis of the amount of investment equity that is at risk. The amendments to eliminate that exception simplify U.S. GAAP by reducing avoidable complexity in existing accounting literature and improve the relevance of information provided to financial statement users by requiring the application of the same consolidation guidance by all reporting entities. The elimination of the exception may change the consolidation analysis, consolidation decision, and disclosure requirements for a reporting entity that has an interest in an entity in the development stage.

The amendments related to the elimination of inception-to-date information and the other remaining disclosure requirements of Topic 915 should be applied retrospectively except for the clarification to Topic 275, which shall be applied prospectively. For public business entities, those amendments are effective for annual reporting periods beginning after December 15, 2014, and interim periods therein.

Early application of each of the amendments is permitted for any annual reporting period or interim period for which the entity’s financial statements have not yet been issued (public business entities) or made available for issuance (other entities). Upon adoption, entities will no longer present or disclose any information required by Topic 915.

Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements.
 
 
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ITEM 7A. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable for a smaller reporting company.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See Index to Financial Statements and Financial Statement Schedules appearing on pages F - 1 through F - 11 of this Form 10-K.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures
 
Our management conducted an evaluation, with the participation of our President who is our principal executive officer our and Treasurer who is our principal financial and accounting officer, of the effectiveness 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 Annual Report on Form 10-K. Based upon that evaluation, our President and Treasurer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.
 
Management’s Annual Report on Internal Control over Financial Reporting

Management is responsible for the preparation of our financial statements and related information. Management uses its best judgment to ensure that the financial statements present fairly, in material respects, our financial position and results of operations in conformity with generally accepted accounting principles.
 
Management is responsible for establishing and maintaining adequate internal control over financial reporting. Under the supervision of management, including our President and our Treasurer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission published in 1992 and subsequent guidance prepared by the Commission specifically for smaller public companies. Based on that evaluation, our management concluded that our internal control over financial reporting was effective as of March 31, 2014.
 
 
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Our internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that accurately and fairly reflect, in reasonable detail, transactions and dispositions of assets; and provide reasonable assurances that: (1) transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States; (2) receipts and expenditures are being made only in accordance with authorizations of management and the directors of our Company; and (3) unauthorized acquisition, use, or disposition of our assets that could have a material effect on our financial statements are prevented or timely detected.
 
All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
 
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's Report was not subject to attestation by the company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only Management's Report in this annual report.
 
Changes in Internal Controls Over Financial Reporting
 
There have been no changes in our internal controls over financial reporting that occurred during our last fiscal quarter to which this Annual Report on Form 10-K relates that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
 
ITEM 9B. OTHER INFORMATION

None.
 
 
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PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The following table sets forth the names and ages of the members of our Board of Directors and Executive Officers as of the date of this filing.
 
Name
 
Age
 
Positions and Offices to be Held
         
Lisa Grossman
 
51
 
President and Director
         
Gabriel Solomon  
39
 
Treasurer, Secretary and Director
 
The directors named above will serve until their respective successors have been appointed and duly qualified. Thereafter, directors will be elected for one-year terms at the annual stockholders’ meeting. Officers will hold their positions at the pleasure of the board of directors, absent any employment agreement. There is no arrangement or understanding between any of the directors or officers and any other person pursuant to which any director or officer was or is to be selected as a director or officer, and there is no arrangement, plan or understanding as to whether non-management shareholders will exercise their voting rights to continue to elect the current directors to our board. There are also no arrangements, agreements or understandings between non-management shareholders and management under which non-management shareholders may directly or indirectly participate in or influence the management of our affairs.
 
Lisa Grossman has been the Secretary of Enterologics, Inc. since its inception on September 2, 2009. Enterologics is an early stage pre-revenue generating company registered with the SEC currently involved with the development of live biotherapeutic products for gastrointestinal disorders. Ms. Grossman has been the Vice President of The Meister Group, a private financial consulting firm since July 2004.

Mr. Solomon is the President and owner of Life Capture Images, since July 2006. Mr. Solomon graduated Queens College with a Bachelors in Communications in 1996.
 
Through their own business activities and experiences both directors have come to understand that in today’s business environment, online brand and reputation management, coupled with search engine optimization – both on and off site, along with other related efforts, are the keys to building and maintaining corporate brands and personal reputations. The directors will seek out individuals with relevant experience to operate and build the Company.

Discussion of Director Compensation
 
The two directors contributed services to the Company as of March 31, 2014 and 2013, respectively, having a fair value of $10,400 and $10,400.
 
 
24

 
 
Director Qualifications, Committees of our Board of Directors and the Role of our Board in Risk Oversight

Director qualifications

Ms. Grossman has been involved with our operations since July 2011. We believe that the experience of Ms. Grossman in launching new business, financial consulting and the founding of our company qualifies her to continue to serve as a director of our Company.
 
Mr. Solomon has been involved with our operations since July 2011. We believe that the business experience of Mr. Solomon as a senior management qualify him to serve as a director of our Company.

Committees of our Board of Directors

We have not established any committees, including an Audit Committee, a Compensation Committee or a Nominating Committee, any committee performing a similar function. The functions of those committees are being undertaken by Board of Directors as a whole. Because we do not have any independent directors, we believe that the establishment of these committees would be more form over substance.

We do not have a policy regarding the consideration of any director candidates which may be recommended by our shareholders, including the minimum qualifications for director candidates, nor has our Board of Directors established a process for identifying and evaluating director nominees, nor do we have a policy regarding director diversity. We have not adopted a policy regarding the handling of any potential recommendation of director candidates by our shareholders, including the procedures to be followed. Our Board has not considered or adopted any of these policies as we have never received a recommendation from any shareholder for any candidate to serve on our Board of Directors. Given our relative size and lack of directors and officers insurance coverage, we do not anticipate that any of our shareholders will make such a recommendation in the near future. While there have been no nominations of additional directors proposed, in the event such a proposal is made, all members of our Board will participate in the consideration of director nominees. In considering a director nominee, it is likely that our Board will consider the professional and/or educational background of any nominee with a view towards how this person might bring a different viewpoint or experience to our Board.
 
Our securities are not quoted on an exchange that has requirements that a majority of our Board members be independent and we are not currently otherwise subject to any law, rule or regulation requiring that all or any portion of our Board of Directors include “independent” directors, nor are we required to establish or maintain an Audit Committee or other committee of our Board of Directors.

Board oversight in risk management

Our President also serves as a member of our Board of Directors and we do not have a lead director. In the context of risk oversight, we believe that our selection of one person to serve in both positions provides the Board with additional perspective which combines the operational experience of a member of management with the oversight focus of a member of the Board. The business and operations of our company are managed by our Board as a whole, including oversight of various risks, such as operational and liquidity risks that our company faces. Because our Board is comprised solely of members of our management, these individuals are responsible for both the day-to-day management of the risks we face as well as the responsibility for the oversight of risk management.
 
 
25

 
 
Compliance with Section 16(a) of the Exchange Act

Since none of our securities have been registered pursuant to Section 12(b) or 12(g) of the Exchange Act of 1934, our officers and directors and persons who own more than 10% of our common stock are not required to file Section 16(a) beneficial ownership reports.

ITEM 11. EXECUTIVE COMPENSATION

The following table sets forth the compensation paid by us for the last two years ended March 31, 2014 and 2013, to our principal executive officer, each other executive officer serving as such whose annual compensation exceeded $100,000, and up to two additional individuals for whom disclosure would have been made in this table but for the fact that the individual was not serving as an executive officer of our company at March 31, 2014. The value attributable to any option awards is computed in accordance with FASB ASC Topic 718.

SUMMARY COMPENSATION TABLE
 
Name and Principal Position
 
Fiscal Year
 
Salary
   
Option Awards
   
All Other Compensation
   
Total
 
Lisa Grossman, President and Director
 
2014
  $ - (1)   $ - (2)   $ -     $ -  
Lisa Grossman, President and Director
 
2013
  $ - (1)   $ - (2)   $ -     $ -  
 
Employment Agreements with Executive Officers
 
We have no employment agreements with our President.
 
Outstanding Equity Awards at Fiscal Year-End
 
The following tables set forth, for each person listed in the Summary Compensation Table set forth in the “General” subsection above, as of March 31, 2014:
 
With respect to each option award -
 
 
the number of shares of our common stock issuable upon exercise of outstanding options that have been earned, separately identified by those exercisable and unexercisable;
 
the number of shares of our common stock issuable upon exercise of outstanding options that have not been earned;
 
the exercise price of such option; and
 
the expiration date of such option; and
 
with respect to each stock award -
 
the number of shares of our common stock that have been earned but have not vested;
 
the market value of the shares of our common stock that have been earned but have not vested;
 
the total number of shares of our common stock awarded under any equity incentive plan that have not vested and have not been earned; and
 
the aggregate market or pay-out value of our common stock awarded under any equity incentive plan that have not vested and have not been earned.
 
 
26

 
 
Option Awards and Warrant Awards
 
Name
 
Number of
Securities
Underlying
Unexercised
Options
Exercisable
   
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
   
Equity Incentive
Plan Awards:
Number of
Securities Underlying
Unexercised
Unearned Options
 
Weighted
Average
Exercise
Price
   
Expiration
Date
 
Lisa Grossman
            0       0     $ -          
 
Stock Awards
 
Name
 
Number of
Shares That
Have Not Vested
   
Market Value
of Shares That
Have Not Vested
   
Number
of Unearned
Shares That
Have Not Vested
   
Equity Incentive
Plan Awards:
Market or
Pay-Out Value of
Unearned Shares
Have Not Vested
 
Lisa Grossman
   
0
   
$
 -
     
0
   
$
 -
 
 
Discussion of Director Compensation

The two directors contributed services to the Company as of March 31, 2014 having a fair value of $10,400.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following tables set forth certain information, as of June 23, 2014, with respect to the beneficial ownership of our outstanding common stock and preferred stock by (i) any holder of more than five percent, (ii) each of our executive officers and directors, and (iii) our directors and executive officers as a group.

Unless otherwise indicated, the business address of each person listed is in care of Your Internet Defender, Inc., 20 East Sunrise Highway, Suite 202, Valley Stream, New York 11581. The information provided herein is based upon a list of our shareholders and our records with respect to the ownership of warrants and options to purchase securities in our company. The percentages in the table have been calculated on the basis of treating as outstanding for a particular person, all shares of our common stock outstanding on that date and all shares of our common stock issuable to that holder in the event of exercise of outstanding options, warrants, rights or conversion privileges owned by that person at that date which are exercisable within 60 days of that date. Except as otherwise indicated, the persons listed below have sole voting and investment power with respect to all shares of our common stock owned by them, except to the extent that power may be shared with a spouse.
 
 
27

 
 
Common Stock
 
Name and Address of Stockholder
 
Amount and Nature
of Beneficial
Ownership
After Acquisition
   
Percentage of
Class (1)
 
             
Lisa Grossman
   
4,200,000
(2)
   
8.1
%
Gabriel Solomon
   
200,000
     
0.4
%
All executive officers and directors as a group (two people)
   
4,400,000
     
8.5
%
                 
5% or More Owners:
               
Punim Chadoshos, LLC (3)
   
5,000,000
     
9.6
%
Amed International(4)
   
5,025,000
     
9.7
%
Chabad of Parkland(5)
   
2,800,000
     
5.4
%
DCO Capital Group, LLC (Murry Englard) (6)
   
5,025,000
     
9.7
%
Zachary Grossman
   
5,000,000
     
9.6
%
Roza Kogan
   
4,600,000
     
8.8
%
Tanya Kogan
   
4,950,000
     
9.5
%
Special Times for Special Needs(7)
   
5,000,000
     
9.6
%
Anatoly Yurovsky
   
5,025,000
     
9.7
%
 
(1)
 
Based on an aggregate of 52,000,000 common shares outstanding on a fully diluted basis (which includes the common stock issuable upon conversion of the preferred stock).
(2)
 
Ms. Grossman is a Director and our President. 200,000 shares are owned directly by Ms. Grossman and 4,000,000 shares are owned by Yitz Grossman, her husband.
(3)
 
Irving Bader is the trustee of the trust which owns all of the issued and outstanding membership interests of Punim Chadoshos, LLC, a New York limited liability company. Mr. Bader is the father of Lisa Grossman.
(4)
 
William Welwart has voting and dispositive control over securities held by Amed International whose address is 57 Joseph Avenue, Staten Island, NY.
(5)
 
Joseph Biston has voting and dispositive control over securities held by Chabad of Parkland whose address is 7170 Loxahatchee Road, Parkland FL 33061.
(6)
 
Murry Englard has voting and dispositive control over securities held by DCO Capital Group, LLC whose address is 218 Woodside Drive, Hewlett New York 11557
(7)
 
Steven Klaver has voting and dispositive control over securities held by Special Times for Special Needs whose address is 20 East Sunrise Hwy, Suite 202, Valley Stream, NY 11581.
 
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

During the period ended March 31, 2014, our two directors who are also shareholders contributed services to the Company valued at $10,400.
 
On July 30, 2012, the Company executed a four-year consulting agreement for $12,000 per month with a related party commencing upon the earlier of (i) the consummation by the Company of equity financings (including financings with an equity component) resulting in gross proceeds to the Company of no less than $500,000 or (ii) September 1, 2012. The agreement calls for an automatic renewal for an additional three years if the Company has raised a minimum of $2,000,000 in gross capital from any and all sources. On October 1, 2012 the agreement was modified whereby the compensation under the consulting agreement was waived for the period from October through December 2012.
 
Consulting expenses recognized for the year ended March 31, 2014 totaled $144,000.

As of March 31, 2014, the Company owed a related party $93,182 from borrowings as follows: 
 
On April 17, 2013, the Company borrowed $13,000 from a related party, payable on demand and bearing an annual interest rate of 3%.

On May 6, 2013, the Company borrowed $3,000 from a related party, payable on demand and bearing an annual interest rate of 10%.
 
 
28

 

On June 17, 2013, the Company borrowed $10,000 from a related party, payable on demand and bearing an annual interest rate of 10%.

On July 15, 2013, the Company borrowed $2,437 from a related party, payable on demand and bearing an annual interest rate of 10%.

On September 4, 2013, the Company borrowed $26,645 from a related party, payable on demand and bearing an annual interest rate of 10%.

On September 18, 2013, the Company borrowed $6,000 from a related party, payable on demand and bearing an annual interest rate of 10%.

On October 16, 2013, the Company borrowed $2,500 from a related party, payable on demand and bearing an annual interest rate of 10%.

On November 19, 2013, the Company borrowed $100 from a related party, payable on demand and bearing an annual interest rate of 10%.

On November 19, 2013, the Company borrowed $2,000 from a related party, payable on demand and bearing an annual interest rate of 10%.

On November 19, 2013, the Company borrowed $3,000 from a related party, payable on demand and bearing an annual interest rate of 10%.

On December 11, 2013, the Company borrowed $3,500 from a related party, payable on demand and bearing an annual interest rate of 10%.

On January 14, 2014, the Company borrowed $4,000 from a related party, payable on demand and bearing an annual interest rate of 10%.

On February 14, 2014, the Company borrowed $2,000 from a related party, payable on demand and bearing an annual interest rate of 10%.

On March 10, 2014, the Company borrowed $15,000 from a related party, payable on demand and bearing an annual interest rate of 10%.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The following table shows the fees that were billed for the audit and other services provided by Li & Company, PC for the fiscal years ended March 31, 2014 and 2013.

   
2014
   
2013
 
             
Audit Fees
 
$
7,500
   
$
7,500
 
Audit-Related Fees
   
0
     
0
 
Tax Fees
   
0
     
0
 
All Other Fees
   
4,200
     
4,200
 
Total
 
$
11,700
   
$
11,700
 

Audit Fees — This category includes the audit of our annual financial statements, review of financial statements included in our Quarterly Reports on Form 10-Q and services that are normally provided by the independent registered public accounting firm in connection with engagements for those fiscal years. This category also includes advice on audit and accounting matters that arose during, or as a result of, the audit or the review of interim financial statements.

Audit-Related Fees — This category consists of assurance and related services by the independent registered public accounting firm that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under “Audit Fees.” The services for the fees disclosed under this category include consultation regarding our correspondence with the Securities and Exchange Commission and other accounting consulting.

Tax Fees — This category consists of professional services rendered by our independent registered public accounting firm for tax compliance and tax advice. The services for the fees disclosed under this category include tax return preparation and technical tax advice.

All Other Fees — This category consists of fees for other miscellaneous items.

Our Board of Directors has adopted a procedure for pre-approval of all fees charged by our independent registered public accounting firm. Under the procedure, the Board approves the engagement letter with respect to audit, tax and review services. Other fees are subject to pre-approval by the Board, or, in the period between meetings, by a designated member of Board. Any such approval by the designated member is disclosed to the entire Board at the next meeting. The audit and tax fees paid to the auditors with respect to 2012 were pre-approved by the Board of Directors.
 
 
29

 
 
PART IV

ITEM 15. EXHIBITS, FINANCIALSTATEMENT SCHEDULES

(a) 
1.
Financial Statements
     
   
The consolidated financial statements and Report of Independent Registered Public Accounting Firm are listed in the “Index to Financial Statements and Schedules” on page F - 1 and included on pages F - 3 through F – 11.
     
 
2.
Financial Statement Schedules
     
    All schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission (the “Commission”) are either not required under the related instructions, are not applicable (and therefore have been omitted), or the required disclosures are contained in the financial statements included herein.
     
 
3.
Exhibits (including those incorporated by reference).
 
Exhibit Number
 
Description of Exhibit
     
3.1
 
Articles of Incorporation of Registrant filed on May 4, 2011 (1)
     
3.2
 
Certificate of Correction to the Articles of Incorporation, filed June 3, 2011 (1)
     
3.3
 
By-Laws of Registrant (1)
     
10.1
 
Agreement between Your Internet Defender Inc. and Fox & Melochik LLC dated September 23, 2011 (2)
     
10.2
 
Agreement between Your Internet Defender Inc. and Game Face Gaming Inc. dated July 12, 2011 (2)
     
10.3
 
Agreement between Your Internet Defender Inc. and Vals International, Inc. effective August 8, 2011 (2)
     
10.4
 
Form of Subscription Agreement (2)
     
10.5
 
Agreement between Your Internet Defender Inc. and Game Face Gaming dated October 3, 2011. (3)
     
31.1*
 
Rule 13a-14(a) / 15d-14(a) Certification of President
     
31.2*
 
Rule 13a-14(a) / 15d-14(a) Certification of Treasurer
     
32.1*
 
Section 1350 Certifications of President and Treasurer

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
 
(1)
Incorporated by reference to the corresponding exhibit filed with our Registration Statement on Form S-1 on August 31, 2011.
(2) 
Incorporated by reference to the corresponding exhibit filed with Amendment No. 1 to our Registration Statement on Form S-1/A on October 11, 2011.
(3)
Incorporated by reference to the corresponding exhibit filed with Amendment No. 2 to our Registration Statement on Form S-1/A on November 29, 2011.
 
* 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.

 
30

 
 
SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.
 
 
Your Internet Defender, Inc.
(Registrant)
 
       
Date: June 30, 2014
By:
/s/ Lisa Grossman
 
   
Lisa Grossman, Chief Executive Officer
 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature
 
Title
 
Date
         
/s/ Lisa Grossman
 
President and Director (principal executive officer)
 
June 30, 2014
Lisa Grossman
       
         
/s/ Gabriel Solomon
 
Treasurer, Secretary and Director (principal financial and accounting officer)
 
June 30, 2014
Gabriel Solomon
       
 
 
31

 
 
Your Internet Defender, Inc.

March 31, 2014 and 2013

Index to the Financial Statements

Contents
 
Page(s)
 
       
Report of Independent Registered Public Accounting Firm
    F-2  
         
Balance Sheets at March 31, 2014 and 2013
    F-3  
         
Statements of Operations for the Fiscal Year ended March 31, 2014 and 2013
    F-4  
         
Statement of Stockholders’ Deficit for the Fiscal Year ended March 31, 2014 and 2013
    F-5  
         
Statements of Cash Flows for the Fiscal Year ended March 31, 2014 and 2013
    F-6  
         
Notes to the Financial Statements
    F-7  
 
 
F-1

 
 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
Your Internet Defender, Inc.

We have audited the accompanying balance sheets of Your Internet Defender, Inc. (“the Company”) as of March 31, 2014 and 2013, and the related statements of operations, stockholders’ deficit, and cash flows for the fiscal years then ended. These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of March 31, 2014 and 2013, and the related statements of its operations and its cash flows for the fiscal years then ended, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 3 to the financial statements, the Company had an accumulated deficit at March 31, 2014, a net loss and net cash used in operating activities for the fiscal year then ended.  These factors raise substantial doubt about the Company’s ability to continue as a going concern.  Management’s plans in regards to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 
/s/ Li and Company, PC
Li and Company, PC

Skillman, New Jersey
June 30, 2014
 
 
F-2

 
 
Your Internet Defender, Inc.
 
 Balance Sheets
 
   
March 31,
2014
   
March 31,
2013
 
             
ASSETS
           
CURRENT ASSETS:
           
Cash
  $ 87     $ -  
Accounts receivable
    700       40,656  
Prepaid expenses
    -       312  
                 
Total Current Assets
    787       40,968  
                 
OTHER ASSETS:
               
Website development costs, net
    3,047       12,031  
Security deposit
    325       325  
                 
Total Other Assets
    3,372       12,356  
                 
Total Assets
  $ 4,159     $ 53,324  
                 
LIABILITIES AND STOCKHOLDERS' DEFICIT
               
CURRENT LIABILITIES:
               
Bank overdraft
  $ -     $ 3,636  
Notes payable
    46,800       43,500  
Notes payable - related party
    93,182       -  
Accounts payable
    -       3,555  
Accrued expenses and other current liabilities
    235,718       117,095  
                 
Total Current Liabilities
    375,700       167,786  
                 
Total Liabilities
    375,700       167,786  
                 
STOCKHOLDERS' DEFICIT:
               
Preferred stock par value $0.0001: 1,000,000 shares authorized;
               
none issued or outstanding
    -       -  
Common stock par value $0.0001: 150,000,000 shares authorized;
               
52,000,000 shares issued and outstanding
    5,200       5,200  
Additional paid-in capital
    132,440       122,040  
Accumulated deficit
    (509,181 )     (241,702 )
                 
Total Stockholders' Deficit
    (371,541 )     (114,462 )
                 
Total Liabilities and Stockholders' Deficit
  $ 4,159     $ 53,324  
 
See accompanying notes to the financial statements
 
 
F-3

 
 
Your Internet Defender, Inc.
 
 Statements of Operations
 
   
For the
Fiscal Year
   
For the
Fiscal Year
 
   
Ended
   
Ended
 
   
March 31,
2014
   
March 31,
2013
 
             
Net revenues earned during the development stage
  $ 35,973     $ 175,787  
                 
Cost of revenues
    57,682       212,365  
                 
Gross Margin
    (21,709 )     (36,578 )
                 
Operating expenses
               
Compensation expense
    10,400       10,400  
Consulting fees - related party
    144,000       48,000  
General and administrative
    73,800       91,693  
                 
Total operating expenses
    228,200       150,093  
                 
Loss from operations
    (249,909 )     (186,671 )
                 
OTHER (INCOME) EXPENSE:
               
Interest expense
    17,570       3,167  
                 
Other (income) expense, net
    17,570       3,167  
                 
Loss before income tax provision
    (267,479 )     (189,838 )
                 
Income tax provision
    -       -  
                 
Net loss
  $ (267,479 )   $ (189,838 )
                 
Net loss per common share
               
- Basic and diluted:
  $ (0.01 )   $ (0.00 )
                 
Weighted average common shares outstanding                
- basic and diluted     52,000,000       52,000,000  
 
 See accompanying notes to the financial statements
 
 
F-4

 
 
Your Internet Defender, Inc.
 
Statement of Stockholders' Deficit
For the Fiscal Years ended March 31, 2014 and 2013
 
   
Common Stock Par Value $0.0001
   
Additional
         
Total
 
   
Number of
Shares
   
Amount
   
Paid-in
Capital
   
Accumulated
Deficit
   
Stockholders'
Deficit
 
                               
Balance, March 31, 2012
    52,000,000       5,200       111,640       (51,864 )     64,976  
                                         
Non cash compensation
                    10,400               10,400  
                                         
Net loss
                            (189,838 )     (189,838 )
                                         
Balance, March 31, 2013
    52,000,000       5,200       122,040       (241,702 )     (114,462 )
                                         
Non cash compensation
                    10,400               10,400  
                                         
Net loss
                            (267,479 )     (267,479 )
                                         
Balance, March 31, 2014
    52,000,000     $ 5,200     $ 132,440     $ (509,181 )   $ (371,541 )
 
See accompanying notes to the financial statements
 
 
F-5

 
 
Your Internet Defender, Inc.
 
 Statements of Cash Flows
 
   
For the
Fiscal Year
   
For the
Fiscal Year
 
   
Ended
   
Ended
 
   
March 31,
2014
   
March 31,
2013
 
             
CASH FLOWS FROM OPERATING ACTIVITIES:
           
Net loss
  $ (267,479 )   $ (189,838 )
                 
Adjustments to reconcile net loss to net cash used in operating activities
               
Amortization
    8,984       8,984  
In-kind compensation
    10,400       10,400  
Changes in operating assets and liabilities:
               
Accounts receivable
    39,956       (24,787 )
Prepaid expenses
    312       (312 )
Security deposit
    -       -  
Bank overdraft
    (3,636 )     3,636  
Accounts payable
    (3,555 )     1,655  
Accrued expenses and other current liabilities
    118,623       98,162  
                 
NET CASH USED IN OPERATING ACTIVITIES
    (96,395 )     (92,100 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES:
               
Website development costs
    -       -  
                 
NET CASH USED IN INVESTING ACTIVITIES
    -       -  
                 
CASH FLOWS FROM FINANCING ACTIVITIES:
               
Proceeds from sale of common stock
    -       -  
Proceeds from notes payable
    3,300       46,000  
Proceeds from notes payable-related party
    106,564       -  
Repayments to notes payable
    -       (2,500 )
Repayments to notes payable-related party
    (13,382 )     -  
                 
NET CASH PROVIDED BY FINANCING ACTIVITIES
    96,482       43,500  
                 
NET CHANGE IN CASH
    87       (48,600 )
                 
Cash at beginning of period
    -       48,600  
                 
Cash at end of period
  $ 87     $ -  
                 
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
               
Interest paid
  $ -     $ 1,967  
Income tax paid
  $ -     $ -  
 
See accompanying notes to the financial statements
 
 
F-6

 
 
Your Internet Defender, Inc.
 March 31, 2014 and 2013
Notes to the Financial Statements
 
Note 1 – Organization and Operations

Your Internet Defender, Inc.

Your Internet Defender, Inc. (the “Company”) was incorporated on May 4, 2011 under the laws of the State of Nevada. The Company originally intended to engage in online brand management, focusing on offsite search engine optimization (SEO), social media reputation monitoring, and specialized brand reputation marketing. The Company intend to develop a full range of services, proprietary methodology and systems that will assist companies, professionals and individuals to protect and promote their brands in the most favorable manner, while attracting traffic to their desired web locations.

Note 2 – Summary of Significant Accounting Policies

The Management of the Company is responsible for the selection and use of appropriate accounting policies and the appropriateness of accounting policies and their application. Critical accounting policies and practices are those that are both most important to the portrayal of the Company’s financial condition and results and require management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. The Company’s significant and critical accounting policies and practices are disclosed below as required by generally accepted accounting principles.

Basis of Presentation

The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Fiscal Year-End

The Company elected March 31st as its fiscal year ending date.

Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reporting amounts of revenues and expenses during the reporting period.

Critical accounting estimates are estimates for which (a) the nature of the estimate is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change and (b) the impact of the estimate on financial condition or operating performance is material. The Company’s critical accounting estimate(s) and assumption(s) affecting the financial statements were:

(i)  
Assumption as a going concern: Management assumes that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.
 
(ii)  
Fair value of long-lived assets: Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable.  If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives. The Company considers the following to be some examples of important indicators that may trigger an impairment review: (i) significant under-performance or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of assets or in the Company’s overall strategy with respect to the manner or use of the acquired assets or changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; (v) a significant decline in the Company’s stock price for a sustained period of time; and (vi) regulatory changes.  The Company evaluates acquired assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events.
 
(iii)  
Valuation allowance for deferred tax assets: Management assumes that the realization of the Company’s net deferred tax assets resulting from its net operating loss (“NOL”) carry–forwards for Federal income tax purposes that may be offset against future taxable income was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are offset by a full valuation allowance. Management made this assumption based on (a) the Company has incurred recurring losses, (b) general economic conditions, and (c) its ability to raise additional funds to support its daily operations by way of a public or private offering, among other factors.
 
 
F-7

 
 
These significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to these estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.

Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly.

Actual results could differ from those estimates.

Fair Value of Financial Instruments

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and has adopted paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by paragraph 820-10-35-37 of the FASB Accounting Standards Codification are described below:

Level 1
 
Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
     
Level 2
 
Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
     
Level 3
 
Pricing inputs that are generally observable inputs and not corroborated by market data.

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.

The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts receivable, prepaid expenses, accounts payable and accrued liabilities, approximate their fair values because of the short maturity of these instruments.

Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated.

Carrying Value, Recoverability and Impairment of Long-Lived Assets

The Company has adopted paragraph 360-10-35-17 of the FASB Accounting Standards Codification for its long-lived assets. The Company’s long-lived assets, which include website development costs, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
 
The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. When long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.
 
 
F-8

 

The Company considers the following to be some examples of important indicators that may trigger an impairment review: (i) significant under-performance or losses of assets relative to expected historical or projected future operating results; (ii) significant changes in the manner or use of assets or in the Company’s overall strategy with respect to the manner or use of the acquired assets or changes in the Company’s overall business strategy; (iii) significant negative industry or economic trends; (iv) increased competitive pressures; (v) a significant decline in the Company’s stock price for a sustained period of time; and (vi) regulatory changes. The Company evaluates acquired assets for potential impairment indicators at least annually and more frequently upon the occurrence of such events.

The key assumptions used in management’s estimates of projected cash flow deal largely with forecasts of sales levels, gross margins, and operating costs of the manufacturing facilities. These forecasts are typically based on historical trends and take into account recent developments as well as management’s plans and intentions. Any difficulty in manufacturing or sourcing raw materials on a cost effective basis would significantly impact the projected future cash flows of the Company’s manufacturing facilities and potentially lead to an impairment charge for long-lived assets. Other factors, such as increased competition or a decrease in the desirability of the Company’s products, could lead to lower projected sales levels, which would adversely impact cash flows. A significant change in cash flows in the future could result in an impairment of long lived assets.

The impairment charges, if any, is included in operating expenses in the accompanying statements of operations.

Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are recorded at the invoiced amount, net of an allowance for doubtful accounts. The Company follows paragraph 310-10-50-9 of the FASB Accounting Standards Codification to estimate the allowance for doubtful accounts. The Company performs on-going credit evaluations of its customers and adjusts credit limits based upon payment history and the customer’s current credit worthiness, as determined by the review of their current credit information; and determines the allowance for doubtful accounts based on historical write-off experience, customer specific facts and economic conditions.

Pursuant to paragraph 310-10-50-2 of the FASB Accounting Standards Codification account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company has adopted paragraph 310-10-50-6 of the FASB Accounting Standards Codification and determine when receivables are past due or delinquent based on how recently payments have been received.

Outstanding account balances are reviewed individually for collectability. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. Bad debt expense is included in general and administrative expenses, if any.

The Company does not have any off-balance-sheet credit exposure to its customers.

Website Development Costs

The Company has adopted Subtopic 350-50 of the FASB Accounting Standards Codification for website development costs. Under the requirements of Sections 350-50-15 and 350-50-25, the Company capitalizes costs incurred to develop a website as website development costs, which are amortized on a straight-line basis over the estimated useful lives of three (3) years. Upon becoming fully amortized, the related cost and accumulated amortization are removed from the accounts.

Related Parties

The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.

Pursuant to section 850-10-20 the related parties include a) affiliates of the Company; b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of section 825–10–15, to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g.  other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.
 
 
F-9

 

The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a) the nature of the relationship(s) involved; b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

Commitments and Contingencies

The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.

Revenue Recognition

The Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.

Income Taxes Provision

The Company adopted the provisions of paragraph 740-10-25-13 of the FASB Accounting Standards Codification. Paragraph 740-10-25-13.addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under paragraph 740-10-25-13, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Paragraph 740-10-25-13 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of paragraph 740-10-25-13.

The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying consolidated balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its consolidated balance sheets and provides valuation allowances as management deems necessary.
 
 
F-10

 

Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary.

Uncertain Tax Positions

The Company did not take any uncertain tax positions and had no adjustments to unrecognized income tax liabilities or benefits pursuant to the provisions of Section 740-10-25 for the reporting period ended March 31, 2014 or 2013.

Net Income (Loss) per Common Share

Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants.

There were no potentially outstanding dilutive shares for the reporting period ended March 31, 2014 or 2013.

Cash Flows Reporting

The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards Codification.

Subsequent Events

The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR.

Recently Issued Accounting Pronouncements

In April 2014, the FASB issued ASU No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. The amendments in this Update change the requirements for reporting discontinued operations in Subtopic 205-20.

Under the new guidance, a discontinued operation is defined as a disposal of a component or group of components that is disposed of or is classified as held for sale and “represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results.” The ASU states that a strategic shift could include a disposal of (i) a major geographical area of operations, (ii) a major line of business, (iii) a major equity method investment, or (iv) other major parts of an entity. Although “major” is not defined, the standard provides examples of when a disposal qualifies as a discontinued operation.

The ASU also requires additional disclosures about discontinued operations that will provide more information about the assets, liabilities, income and expenses of discontinued operations. In addition, the ASU requires disclosure of the pre-tax profit or loss attributable to a disposal of an individually significant component of an entity that does not qualify for discontinued operations presentation in the financial statements.

The ASU is effective for public business entities for annual periods beginning on or after December 15, 2014, and interim periods within those years.
 
 
F-11

 

In June 2014, the FASB issued ASU No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation.

The amendments in this Update remove the definition of a development stage entity from the Master Glossary of the Accounting Standards Codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage.

The amendments also clarify that the guidance in Topic 275, Risks and Uncertainties, is applicable to entities that have not commenced planned principal operations.

Finally, the amendments remove paragraph 810-10-15-16. Paragraph 810-10-15-16 states that a development stage entity does not meet the condition in paragraph 810-10-15-14(a) to be a variable interest entity if (1) the entity can demonstrate that the equity invested in the legal entity is sufficient to permit it to finance the activities that it is currently engaged in and (2) the entity’s governing documents and contractual arrangements allow additional equity investments.

The amendments in this Update also eliminate an exception provided to development stage entities in Topic 810, Consolidation, for determining whether an entity is a variable interest entity on the basis of the amount of investment equity that is at risk. The amendments to eliminate that exception simplify U.S. GAAP by reducing avoidable complexity in existing accounting literature and improve the relevance of information provided to financial statement users by requiring the application of the same consolidation guidance by all reporting entities. The elimination of the exception may change the consolidation analysis, consolidation decision, and disclosure requirements for a reporting entity that has an interest in an entity in the development stage.

The amendments related to the elimination of inception-to-date information and the other remaining disclosure requirements of Topic 915 should be applied retrospectively except for the clarification to Topic 275, which shall be applied prospectively. For public business entities, those amendments are effective for annual reporting periods beginning after December 15, 2014, and interim periods therein.

Early application of each of the amendments is permitted for any annual reporting period or interim period for which the entity’s financial statements have not yet been issued (public business entities) or made available for issuance (other entities). Upon adoption, entities will no longer present or disclose any information required by Topic 915.

Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements.

Note 3 – Going Concern

The financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.

As reflected in the financial statements, the Company had an accumulated deficit at March 31, 2014, a net loss and net cash used in operating activities for the reporting period then ended. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

The Company is attempting to further implement its business plan and generate sufficient revenue; however, the Company’s cash position may not be sufficient to support its daily operations. While the Company believes in the viability of its strategy to further implement its business plan and generate sufficient revenue and in its ability to raise additional funds by way of a public or private offering, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon its ability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds by way of a public or private offering.

The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
 
 
F-12

 

Note 4 – Notes Payable

Notes payable consisted of the following:

   
March 31,
2014
   
March 31,
2013
 
             
Note payable, issued November 9, 2012, with interest at 3% per annum, with principal and interest due on demand
    27,000       27,000  
                 
Note payable, issued January 13, 2013, with interest at 3% per annum, with principal and interest due on demand
    4,500       4,500  
                 
Note payable, issued March 13, 2013, with interest at 3% per annum, with principal and interest due on demand
    10,000       10,000  
                 
Note payable, issued March 27, 2013, with interest at 3% per annum, with principal and interest due on demand
    2,000       2,000  
                 
Note payable, issued June 5, 2013, with interest at 10% per annum, with principal and interest due on demand
    3,300       -  
                 
      46,800       43,500  
                 
Current maturities of notes payable
    (46,800 )     (43,500 )
                 
Notes payable, net of current maturities
  $ -     $ -  

Note 5 – Related Party Transactions

Related Parties

Related parties with whom the Company had transactions are:

Related Parties
 
Relationship
     
Lisa Grossman
 
President and stockholder of the Company

 
F-13

 
 
Notes Payable - Related Parties

Notes payable – related parties consisted of the following:

   
March 31,
2014
   
March 31,
2013
 
             
Note payable to President, issued on April 17, 2013, with interest at 3% per annum, with principal and interest due on demand
  $ 13,000     $ -  
                 
Note payable to President, issued on May 6, 2013, with interest at 10% per annum, with principal and interest due on demand
    3,000       -  
                 
Note payable to President, issued on June 17, 2013, with interest at 10% per annum, with principal and interest due on demand
    10,000       -  
                 
Note payable to President, issued on July 15, 2013, with interest at 10% per annum, with principal and interest due on demand
    2,437       -  
                 
Note payable to President, issued on September 4, 2013, with interest at 10% per annum, with principal and interest due on demand
    26,645       -  
                 
Note payable to President, issued on September 18, 2013, with interest at 10% per annum, with principal and interest due on demand
    6,000       -  
                 
Note payable to President, issued on October 16, 2013, with interest at 10% per annum, with principal and interest due on demand
    2,500       -  
                 
Note payable to President, issued on November 19, 2013, with interest at 10% per annum, with principal and interest due on demand
    100       -  
                 
Note payable to President, issued on November 19, 2013, with interest at 10% per annum, with principal and interest due on demand
    2,000       -  
                 
Note payable to President, issued on November 19, 2013, with interest at 10% per annum, with principal and interest due on demand
    3,000       -  
                 
Note payable to President, issued on December 11, 2013, with interest at 10% per annum, with principal and interest due on demand
    3,500       -  
                 
Note payable to President, issued on January 14, 2014, with interest at 10% per annum, with principal and interest due on demand
    4,000       -  
                 
Note payable to President, issued on February 14, 2014, with interest at 10% per annum, with principal and interest due on demand
    2,000       -  
                 
Note payable to President, issued on March 10, 2014, with interest at 10% per annum, with principal and interest due on demand
    15,000       -  
                 
      93,182       -  
                 
Current maturities of notes payable – related parties
    (93,182 )     (- )
                 
Notes payable – related parties, net of current maturities
  $ -     $ -  

 
F-14

 
 
Note 6 – Commitments and Contingencies

Consulting Agreement
 
On July 30, 2012, the Company executed a four-year consulting agreement for $12,000 per month with a related party commencing upon the earlier of (i) the consummation by the Company of equity financings (including financings with an equity component) resulting in gross proceeds to the Company of no less than $500,000 or (ii) September 1, 2012. The agreement calls for an automatic renewal for an additional three years if the Company has raised in total a minimum of two million in gross capital from any and all sources. On October 1, 2012 the agreement was modified whereby the compensation under the consulting agreement was waived for the period from October through December 2012.

Consulting expenses recognized for the reporting period ended March 31, 2014 and 2013 totaled $144,000 and $48,000, respectively.

Note 7 – Stockholders’ Deficit

Shares Authorized

Upon formation the total number of shares of all classes of stock which the Company is authorized to issue is One Hundred and Fifty One Million (151,000,000) shares of which One Million (1,000,000) shares shall be Preferred Stock, par value $0.0001 per share, and One Hundred and Fifty Million (150,000,000) shares shall be Common Stock, par value $0.0001 per share.

In-Kind Contribution

For the reporting period ended March 31, 2014 and 2013, two shareholders of the Company contributed services valued at $10,400 for each reporting period.
 
Note 8 – Income Tax Provision

Deferred Tax Assets

At March 31, 2014, the Company had net operating loss (“NOL”) carry–forwards for Federal income tax purposes of $509,181 that may be offset against future taxable income through 2034. No tax benefit has been reported with respect to these net operating loss carry-forwards because the Company believes that the realization of the Company’s net deferred tax assets of approximately $173,122 was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are offset by a full valuation allowance.

Deferred tax assets consist primarily of the tax effect of NOL carry-forwards. The Company has provided a full valuation allowance on the deferred tax assets because of the uncertainty regarding its realization. The valuation allowance increased approximately $90,943 and $64,545 for the reporting period ended March 31, 2014 and 2013, respectively.
 
 
F-15

 

Components of deferred tax assets are as follows:

   
March 31,
2014
   
March 31,
2013
 
Net deferred tax assets – non-current:
               
                 
Expected income tax benefit from NOL carry-forwards
 
$
173,122
   
$
82,179
 
                 
Less valuation allowance
   
(173,122
)
   
(82,179
)
                 
Deferred tax assets, net of valuation allowance
 
$
-
   
$
-
 

Income Tax Provision in the Statement of Operations

A reconciliation of the federal statutory income tax rate and the effective income tax rate as a percentage of income before income tax provision is as follows:

   
For the Fiscal Year Ended
March 31,
2014
   
For the Fiscal Year Ended
March 31,
2013
 
             
Federal statutory income tax rate
    34.0       34.0 %
                 
Change in valuation allowance on net operating loss carry-forwards
    (34.0 )     (34.0 )
                 
Effective income tax rate
    0.0 %     0.0 %

Note 9 – Subsequent Events

The Company has evaluated all events that occurred after the balance sheet date through the date when the financial statements were issued to determine if they must be reported. The Management of the Company determined that there were no certain reportable subsequent events to be disclosed.
 
 
F-16