Attached files
| file | filename |
|---|---|
| EX-32.1 - EXHIBIT321 - SATYA WORLDWIDE, INC. | exhibit321.htm |
| EX-31.1 - EXHIBIT311 - SATYA WORLDWIDE, INC. | exhibit311.htm |
| XML - IDEA: XBRL DOCUMENT - SATYA WORLDWIDE, INC. | R9999.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
|
þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the quarterly period September 30, 2015
OR
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from ___________ to ___________
Commission file number 0-55255
____________________________
SATYA WORLDWIDE, INC.
(Exact name of registrant as specified in its charter)
|
Florida
(State or other jurisdiction of
incorporation or organization)
|
46-0636099
(I.R.S. Employer
Identification Number)
|
|
429 N. Dixie Highway, Suite 201
Pompano Beach, Florida
(Address of principal executive offices)
|
33060
(Zip Code)
|
(302) 404-0390
(Issuer’s telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year, if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No þ
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 Rule 12b-2 of the Exchange Act. (Check one):
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 þ No o
State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date.
|
Class
|
Outstanding at November 10, 2015
|
|
|
Common Stock, par value $.0001 per share
|
12,272,350 shares
|
SATYA WORLDWIDE, INC.
|
PAGE
|
|
|
3
|
|
|
Item 1. Financial Statements (unaudited)
|
3
|
|
3
|
|
|
4
|
|
|
5
|
|
|
6
|
|
|
7
|
|
|
10
|
|
|
Item 4. Controls and Procedures
|
10
|
|
12
|
|
|
Item 1. Legal Proceedings
|
12
|
|
12
|
|
|
Item 3. Defaults Upon Senior Securities
|
12
|
|
Item 4. Mine Safety Disclosures
|
12
|
|
Item 5. Other Information
|
12
|
|
Item 6. Exhibits
|
13
|
|
14
|
|
| EX-32.1 | |
|
EX-101 INSTANCE DOCUMENT
|
|
|
EX-101 SCHEMA DOCUMENT
|
|
|
EX-101 CALCULATION LINKBASE DOCUMENT
|
|
|
EX-101 LABELS LINKBASE DOCUMENT
|
|
|
EX-101 PRESENTATION LINKBASE DOCUMENT
|
|
|
EX-101 DEFINITION LINKBASE DOCUMENT
|
|
|
SATYA WORLDWIDE, INC. AND SUBSIDIARY
|
||||||||
|
(Unaudited)
|
||||||||
|
September 30, 2015
|
December 31, 2014
|
|||||||
|
ASSETS
|
||||||||
|
Current assets:
|
||||||||
|
Cash and cash equivalents
|
$ | 6,849 | $ | 27,888 | ||||
|
Accounts receivable
|
- | 3,637 | ||||||
|
Total current assets
|
6,849 | 31,525 | ||||||
|
Equipment, net of depreciation of $1,017 and $600, respectively
|
1,507 | 1,924 | ||||||
|
Intangible assets, net of amortization of $438 and $250, respectively
|
2,437 | 2,625 | ||||||
|
Total assets
|
$ | 10,793 | $ | 36,074 | ||||
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
|
Current liabilities:
|
||||||||
|
Accounts payable and accrued expenses
|
$ | 7,840 | $ | 16,105 | ||||
|
Refundable subscriptions payable
|
- | 4,194 | ||||||
|
Total current liabilities
|
7,840 | 20,299 | ||||||
|
Shareholders' equity:
|
||||||||
|
Preferred stock (20,000,000 authorized;
|
||||||||
|
par value $.001; none issued and outstanding)
|
$ | - | $ | - | ||||
|
Common stock (280,000,000 shares authorized; par value $.0001;
|
||||||||
|
13,972,350 shares issued and 12,272,350 outstanding at September 30, 2015
|
1,397 | 1,283 | ||||||
|
and 12,834,300 shares issued and outstanding at December 31, 2014)
|
||||||||
|
Additional paid in capital
|
59,234 | 36,587 | ||||||
|
Accumulated deficit
|
(56,668 | ) | (22,095 | ) | ||||
|
Less: treasury stock, at cost (1,700,000 shares repurchased, $0.00059 per share)
|
(1,010 | ) | - | |||||
|
Total shareholders' equity
|
2,953 | 15,775 | ||||||
|
Total liabilities and shareholders' equity
|
$ | 10,793 | $ | 36,074 | ||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
|
SATYA WORLDWIDE, INC. AND SUBSIDIARY
|
||||||||||||||||
|
(Unaudited)
|
||||||||||||||||
|
Three Months
|
Three Months
|
Nine Months
|
Nine Months
|
|||||||||||||
|
Ended
|
Ended
|
Ended
|
Ended
|
|||||||||||||
|
September 30, 2015
|
September 30, 2014
|
September 30, 2015
|
September 30, 2014
|
|||||||||||||
|
Revenues
|
$ | 23 | $ | 16 | $ | 90 | $ | 64 | ||||||||
|
Cost of revenues
|
- | - | - | - | ||||||||||||
|
Gross Profit
|
23 | 16 | 90 | 64 | ||||||||||||
|
Operating expenses
|
||||||||||||||||
|
Selling, general and administrative expenses
|
6,323 | 11,178 | 34,059 | 15,796 | ||||||||||||
|
Depreciation and amortization expense
|
201 | 63 | 604 | 188 | ||||||||||||
|
Total operating expenses
|
6,524 | 11,241 | 34,663 | 15,984 | ||||||||||||
|
Operating loss
|
(6,501 | ) | (11,225 | ) | (34,573 | ) | (15,920 | ) | ||||||||
|
Interest expense, net
|
- | - | - | - | ||||||||||||
|
Net loss before income taxes
|
(6,501 | ) | (11,225 | ) | (34,573 | ) | (15,920 | ) | ||||||||
|
Provision for income taxes
|
- | - | - | - | ||||||||||||
|
Net loss
|
$ | (6,501 | ) | $ | (11,225 | ) | $ | (34,573 | ) | $ | (15,920 | ) | ||||
|
Basic and diluted net loss per common share
|
$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | ||||
|
Basic and diluted weighted average number of common shares outstanding
|
12,387,017 | 11,730,000 | 12,387,017 | 11,730,000 | ||||||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
|
SATYA WORLDWIDE, INC. AND SUBSIDIARY
|
||||||||
|
(Unaudited)
|
||||||||
|
Nine Months
|
Nine Months
|
|||||||
|
Ended
|
Ended
|
|||||||
|
September 30, 2015
|
September 30, 2014
|
|||||||
|
OPERATING ACTIVITIES:
|
||||||||
|
Net loss
|
$ | (34,573 | ) | $ | (15,920 | ) | ||
|
Adjustments to reconcile net loss to net cash
|
||||||||
|
used in operating activities:
|
||||||||
|
Amortization
|
188 | 187 | ||||||
|
Depreciation
|
417 | 417 | ||||||
|
Changes in operating assets and liabilities:
|
||||||||
|
Decrease in accounts receivable
|
3,637 | 660 | ||||||
|
Increase (decrease) in accounts payable and accrued expenses
|
(8,265 | ) | 8,004 | |||||
|
Net cash used in operating activities
|
(38,596 | ) | (6,652 | ) | ||||
|
FINANCING ACTIVITIES:
|
||||||||
|
Decrease in refundable subscription payable
|
(4,194 | ) | - | |||||
|
Repurchases of common stock
|
(1,010 | ) | - | |||||
|
Proceeds from sale of common stock
|
22,761 | - | ||||||
|
Net cash provided by financing activities
|
17,557 | - | ||||||
|
NET DECREASE IN CASH
|
(21,039 | ) | (6,652 | ) | ||||
|
CASH BEGINNING BALANCE
|
27,888 | 14,029 | ||||||
|
CASH ENDING BALANCE
|
$ | 6,849 | $ | 7,377 | ||||
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
|
||||||||
|
Taxes paid
|
$ | - | $ | - | ||||
|
Interest paid
|
$ | - | $ | - | ||||
|
|
||||||||
|
Noncash investing and financing activities:
|
||||||||
|
Preferred stock converted to common stock
|
$ | 114 | $ | - | ||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
SATYA WORLDWIDE, INC. AND SUBSIDIARY
SEPTEMBER 30, 2015
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited interim financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission for the presentation of interim financial information, but do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. The audited financial statements for the years ended December 31, 2014 and 2013 are included in the Annual Report on Form 10-K of Satya Worldwide, Inc. which was filed on March 30, 2015, with the Securities and Exchange Commission and are hereby referenced. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month and nine month periods ended September 30, 2015 are not necessarily indicative of the results that may be expected for the year ended December 31, 2015.
In the nine months ending September 30, 2015, the Company has elected to early adopt Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. The adoption of this Accounting Standards Update allows the Company to remove the inception to date information and all references to development stage.
NOTE 2 - DESCRIPTION OF BUSINESS
Satya Worldwide, Inc. (the “Company”, “we”, “us”, “our”) provides digital book (“eBook”) distribution services (“ePublishing”) services to authors, poets, memoirists and publishers for distributing their eBooks to online bookstores, book conversion, editing, book cover design and ISBN number administration. We are the ePublisher of The Third Man: Was there another bomber in Oklahoma City?, an original non-fiction book written by Gerald Posner, the American investigative journalist and author of 11 books. We have made this book available on Amazon, an online retailer. We have no other ePublishing arrangements or agreements for any other literary works as of the date of this report. We also have no other arrangements or agreements with any other digital retailers. We also own and acquire rights to literary works and receive payments for book sales domestically and internationally. We own the co-author rights to Mengele: The Complete Story, a non-fiction investigative book written by Gerald Posner and John Ware, which entitles us to half of the book royalties paid to the authors. The approval of Mr. Ware and Cooper Square, the book’s publisher, is required for any additional royalty or fee arrangements with prospective licensees. Because we currently have no other eBooks or literary works in our catalog and do not provide digital book distribution services to any other authors, poets, memoirists or publishers, our proposed business activities are anticipatory and may not come to fruition. We cannot provide any assurance that we will be able to obtain any such approvals. Both Satya Worldwide, Inc. and its wholly owned subsidiary Satya ePublishing, Inc. were incorporated under the laws of the State of Florida on March 26, 2012. Our fiscal year end is December 31.
NOTE 3 - GOING CONCERN
The Company’s financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations. These conditions raise substantial doubt as to the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Management’s Plan to Continue as a Going Concern
Our ability to continue as a going concern is dependent upon our ability to generate profitable business operations in the future and/or obtaining the necessary financing to meet our obligations and repay our liabilities. To date, we have operated at a loss and remained in business through the issuance of shares of our common stock and generating revenues from our business activities. Management's plan to continue as a going concern is based on us obtaining additional capital resources through the sale of our securities and/or loans on an as needed basis. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described above and eventually attaining profitable operations.
Since its inception, the Company has been dependent upon the receipt of capital investment to fund its continuing activities. In addition to the normal risks associated with a new business venture, there can be no assurance that the Company's business plan will be successfully executed. Our ability to execute our business plan will depend on our ability to obtain additional financing and achieve a profitable level of operations. There can be no assurance that sufficient financing will be obtained. Further, we cannot give any assurance that we will generate substantial revenues or that our business operations will prove to be profitable.
NOTE 4 - COMMON STOCK
During January, 2015, 2,529 shares of Series A Convertible Preferred Stock were issued to 15 shareholders for the amount of $22,761. Each convertible preferred share can be converted into 450 shares of common stock of the Company. During January, 2015, all such shares of Series A Convertible Preferred Stock were converted into 1,138,050 shares of common stock of the Company.
On February 2, 2015, the Company repurchased 1,700,000 shares of common stock issued to Patricia Posner for a purchase price in the amount of One Thousand Ten Dollars ($1,010). As a result thereof, Ms. Posner no longer owns any shares of capital stock of the Company. On the same date, Ms. Posner resigned as Chairwoman, President, Chief Executive Officer and Treasurer of the Company.
The following discussion and analysis should be read in conjunction with our consolidated financial statements, including the notes thereto, appearing in this report and are hereby referenced. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this report. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this report. We believe it is important to communicate our expectations. However, our management disclaims any obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.
These forward-looking statements are based on our management’s current expectations and beliefs and involve numerous risks and uncertainties that could cause actual results to differ materially from expectations. You should not rely upon these forward-looking statements as predictions of future events because we cannot assure you that the events or circumstances reflected in these statements will be achieved or will occur. You can identify a forward-looking statement by the use of the forward-terminology, including words such as “may”, “will”, “believes”, “anticipates”, “estimates”, “expects”, “continues”, “should”, “seeks”, “intends”, “plans”, and/or words of similar import, or the negative of these words and phrases or other variations of these words and phrases or comparable terminology. These forward-looking statements relate to, among other things: our sales, results of operations and anticipated cash flows; capital expenditures; depreciation and amortization expenses; sales, general and administrative expenses; our ability to maintain and develop relationship with our existing and potential future customers; and, our ability to maintain a level of investment that is required to remain competitive. Many factors could cause our actual results to differ materially from those projected in these forward-looking statements, including, but not limited to: variability of our revenues and financial performance; risks associated with technological changes; the acceptance of our products in the marketplace by existing and potential customers; disruption of operations or increases in expenses due to our involvement with litigation or caused by civil or political unrest or other catastrophic events; general economic conditions, government mandates; and, the continued employment of our key personnel and other risks associated with competition.
Overview
We are a company in the growth stage. Our primary activities through the date of this report have been related to the acquisition of the co-author rights to Mengele: The Complete Story, efforts associated with ePublishing The Third Man: Was there another bomber in Oklahoma City?, preparing for our public offering, as well as maintaining our public company reporting status. Based upon our working capital deficit as of September 30, 2015, in the amount of $(991), we require additional financing to continue our operations. Our only source of financing at this time is the equity capital raise from our public offering completed on February 2, 2015, in which we raised a total of $44,847. See “-Liquidity and Capital Resources” for additional information.
Plan of Operation
We are prioritizing the proceeds of our public offering and revenue generated from operations on implementing limited marketing activities with a simple website, Facebook page and marketing brochure, as well as maintaining our public company reporting status for a period of at least 20 months following the effective date of the offering. The following table summarizes our anticipated milestones, projected dates of completion and estimated budget allocation for implementing our business development plan.
Our plan of operation and anticipated use of our funds is as follows:
|
Anticipated Milestones
|
Projected Date
of Commencement
|
Projected Date
of Completion
|
Estimated Budget
Allocation($)
|
|||
|
Build Satya ePublishing Facebook Page
|
August 15, 2015
|
December 31, 2015
|
800
|
|||
|
Build Satya ePublishing Website
|
August 15, 2015
|
December 31, 2015
|
2,500
|
|||
|
Create Satya ePublishing Trademark, Logo and Trade Dress
|
August 15, 2015
|
December 31, 2015
|
1,500
|
|||
|
Design Satya ePublishing Marketing Brochure
|
August 15, 2015
|
December 31, 2015
|
1,200
|
|||
|
Engage in Exchange Act Public Company Reporting Compliance
|
August 4, 2014
|
April 15, 2016
|
30,000
|
|||
|
Use Funds for General and Administrative Expenditures
|
August 4, 2014
|
August 15, 2016
|
12,000
|
|||
|
Total
|
48,000
|
The foregoing represents our best estimate of the allocation of the proceeds of this offering and revenues based on the planned use of funds for our operations and current objectives. Our management will have broad discretion in determining the uses of our funds. We may reallocate funds from time to time if our management believes such reallocation to be in our best interest for uses that may or may not have been herein anticipated.
Build Satya ePublishing Facebook Page
A portion of the proceeds as set forth above will be used to build a Facebook page for Satya ePublishing. We will hire a social media consultant to assist us in its development and reaching our target audience. We will add our trademark and logo to publicize our identity and brand to visitors to our Facebook page. We will be required to keep the Facebook page current by posting notifications and adding ePublishing articles and other content of interest to independent authors. Since we have not yet established our brand or opened a Facebook account, we have no way of knowing whether visitors will become prospective business customers.
Publish Satya ePublishing Website
A portion of the proceeds as set forth above will be used to create a basic website for Satya ePublishing. We will hire a website consultant to assist us in developing the website, which will be based on a template to reduce development costs. We will add our trademark, logo and trade dress to the website. We will list the two (2) books that are currently in our catalog on our website and include the hyperlink to the eBook, The Third Man: Was There Another Bomber in Oklahoma City? on Amazon’s website. If other authors engage us to ePublishing their books, we will include links to their eBooks on our website. We will have challenges attracting visitors to our website until we can advertise our services on Google or Facebook and create our brand. We currently have not established a YouTube account. We currently have no operating history to justify our belief that our business model will be successful.
Finalize Satya ePublishing Trademark, Logo and Trade Dress
A portion of the proceeds as set forth above will be used to pay for the development of our trademark, logo design and trade dress. These final designs will be used in our social media and marketing initiatives, including the Satya ePublishing Facebook page, marketing brochures and website. However, none of these social media, marketing and advertising activities currently exists. The amount expended will be minimal because of the limited amount of capital raised in the offering. The Satya ePublishing brand and trade dress design must be completed before any advertising and marketing activities starts or the website is uploaded. Our trademark design and logo do not currently exist. Accordingly, we have no means for authors to know who we are and to attract potential customers to our business.
Complete Satya ePublishing Marketing Brochure
A portion of the proceeds as set forth above will be used to design a marketing brochure to promote the Satya ePublishing brand to potential users of our ePublishing services. We currently have no brochure or other marketing materials. Accordingly, we have no brand name and no awareness among authors in the ePublishing marketplace. We intend to get a written testimonial from Gerald Posner as an endorsement of our business as a means of attracting these potential customers. However, we have no agreement or requirement that Gerald Posner gives us any such endorsement and he is free to use other ePublishing service providers as he see fit. Because our Satya brand name and services concept are untested, we may not be successful in establishing ourselves in the ePublishing business and we currently do not have any publishers or other authors using our services.
Three Month Period Ended September 30, 2015 Compared to September 30, 2014
Revenues. Revenues consisted of book royalties from our literary catalog, which included two books at September 30, 2015, and September 30, 2014. For the period ended September 30, 2015, revenues were $23 and increased by $7, as compared to the period ended September 30, 2014, for which revenues were $16, for book royalty payments. This increase was due to an increase in book royalty payments received from Amazon for online book sales of The Third Man: Was there another bomber in Oklahoma City?
Selling, General and Administrative Expenses. Selling, general and administrative expenses consisted primarily of corporate support expenses, such as legal and accounting and organizational expenses. For the period ended September 30, 2015, selling, general and administrative expenses were $6,323 and decreased by $4,855, as compared to the period ended September 30, 2014, for which selling, general and administrative expenses were $11,178. The decrease in general and administrative expenses was due primarily to professional fees and expenses being lower.
Nine Month Period Ended September 30, 2015 Compared to September 30, 2014
Revenues. Revenues consisted of book royalties from our literary catalog, which included two books at September 30, 2015, and September 30, 2014. For the period ended September 30, 2015, revenues were $90 and increased by $26, as compared to the period ended September 30, 2014, for which revenues were $64, for book royalty payments. This increase was due to an increase in book royalty payments received from Amazon for online book sales of The Third Man: Was there another bomber in Oklahoma City?
Selling, General and Administrative Expenses. Selling, general and administrative expenses consisted primarily of corporate support expenses, such as legal and accounting and organizational expenses. For the period ended September 30, 2015, selling, general and administrative expenses were $34,059 and increased by $18,263, as compared to the period ended September 30, 2014, for which selling, general and administrative expenses were $15,796. The increase in general and administrative expenses was due primarily to professional fees and expenses associated with being a public company. We expect that our selling, general and administrative expenses will increase as we incur additional costs to support the growth in our business.
Liquidity and Capital Resources
Since our inception, we have incurred significant operating and net losses. We have relied primarily on the sale of our equity securities to fund our operations. At September 30, 2015, we had negative working capital of $991 and shareholders’ equity of $2,953. At December 31, 2014, we had working capital of $11,226 and shareholders’ equity of $15,775. Our consolidated cash balance at September 30, 2015 was $6,849, as compared to $27,888 at December 31, 2014.
On August 5, 2014, the Company commenced its public offering pursuant to the Form S-1 Registration Statement (Registration No. 333-195630). The public offering was terminated on February 2, 2015. The Company sold in the public offering 10,610 shares of its Series A Convertible Preferred Stock, and all of such shares of Series A Convertible Preferred Stock have been converted into 2,242,350 shares of Common Stock of the Company. The public offering provided proceeds to the Company in the amount of $44,847.
Our monthly burn rate is approximately $1,500, and our remaining capital will last through December 2015. While we believe that we have sufficient cash to fund our operations and meet our obligations until December 31, 2015, we may be required to raise additional capital to support our business plan. There are no current commitments for such funds and there can be no assurances that such funds will be available to the Company as needed. If we do not have sufficient working capital to fund our operations, the lack of funds could have a material adverse effect on our business and cause the value of our shares to decline. See “Use of Proceeds”, “-Plan of Operation” above and “Description of Business” for additional information.
Going Concern
These matters raise substantial doubt about our ability to continue as a going concern. Our consolidated financial statements included elsewhere in this report have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate our continuation as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the consolidated financial statements do not necessarily purport to represent realizable or settlement values. The consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty.
Critical Accounting Policies and Estimates
Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates. Our significant estimates and assumptions include amortization, the fair value of our stock, and the valuation allowance relating to the Company’s deferred tax assets.
We qualify as an “emerging growth company”, as defined in the Jumpstart Our Business Startups Act, which became law in April 2012. See “Summary of Financial Data” for additional information.
Recently Issued Accounting Pronouncements
Reference is made to the “Recent Accounting Pronouncements” in Note 1 to our unaudited condensed consolidated financial statements included elsewhere in this report for information related to new accounting pronouncements, none of which had a material impact on our consolidated financial statements.
Off Balance Sheet Arrangements
As of September 30, 2015 and December 31, 2014, we had no off balance sheet arrangements.
Disclosure under this section is not required for a smaller reporting company.
We maintain disclosure controls and procedures that are designed to ensure that the information required to be disclosed in the reports that we file under the Securities Exchange Act of 1934 (the "Exchange Act") is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our President and Treasurer, as appropriate, to allow timely decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives, and in reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
As required by SEC Rule 13a-15(b), we carried out an evaluation, under the supervision and with the participation of our management, including our President and Treasurer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of our fiscal quarter covered by this report. Based on the foregoing, our President and Treasurer concluded that our disclosure controls and procedures were not effective at the reasonable assurance level. It should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the Company’s principal executive and financial officer and effected by the Company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
|
●
|
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;
|
|
●
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
|
|
●
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
|
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. 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.
The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of September 30, 2015. In making this assessment, the Company’s management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework. The COSO framework is based upon five integrated components of control: control environment, risk assessment, control activities, information and communications and ongoing monitoring.
Based on an evaluation under the supervision and with the participation of the Company’s management, the Company’s principal executive officer and principal financial officer has concluded that the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act were not effective as of September 30, 2015 (the “Evaluation Date”), to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms and (ii) accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Each of the following is deemed a material weakness in our internal control over financial reporting:
|
●
|
We do not have an audit committee. While we are not currently obligated to have an audit committee, including a member who is an “audit committee financial expert,” as defined in Item 407 of Regulation S-K, under applicable regulations or listing standards; however, it is management’s view that such a committee is an important internal control over financial reporting, the lack of which may result in ineffective oversight in the establishment and monitoring of internal controls and procedures.
|
|
●
|
We did not maintain proper segregation of duties for the preparation of our financial statements. We currently have only one officer overseeing all transactions. This has resulted in several deficiencies, including the lack of control over preparation of financial statements and proper application of accounting principles.
|
Management believes that the material weaknesses set forth in the two items above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.
Management's Remediation Initiatives
In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we plan to initiate the following series of measures once we have the financial resources to do so:
|
●
|
We will create a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us. And, we plan to appoint one or more outside directors to an audit committee resulting in a fully functioning audit committee, which will undertake the oversight in the establishment and monitoring of required internal controls and procedures, such as reviewing and approving estimates and assumptions made by management when funds are available to us.
|
|
●
|
Management believes that the appointment of outside directors to a fully functioning audit committee, would remedy the lack of a functioning audit committee.
|
Changes in Internal Control Over Financial Reporting
There were no changes in our internal controls over financial reporting that occurred during the period covered by this report, which were identified in connection with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
This report does not include an attestation report of the Company’s registered independent public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s independent registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this report.
/s/ Andrea Kowalski
Andrea Kowalski
CEO and President
None.
On August 5, 2014, the Company commenced its public offering pursuant to the Form S-1 Registration Statement (Registration No. 333-195630). The public offering was terminated on February 2, 2015. The Company sold in the public offering 10,610 shares of its Series A Convertible Preferred Stock, and all of such shares of Series A Convertible Preferred Stock have been converted into 2,242,350 shares of Common Stock of the Company. The public offering provided proceeds to the Company in the amount of $44,847and were deposited in the Company’s non-interest bearing bank account, and have been used by us in the business, as of September 30, 2015, as follows:
|
Marketing, Promotion and Advertising
|
$
|
1,000
|
||
|
Printing expenses
|
2,490
|
|||
|
Executive Compensation
|
|
3,000
|
||
|
Legal fees and expenses
|
13,025
|
|||
|
Accounting fees and expenses
|
8,750
|
|||
|
Blue sky fees and expenses
|
2,500
|
|||
|
Transfer Agent fees
|
12,000
|
|||
|
Miscellaneous
|
881
|
|||
|
Total
|
$
|
43,646
|
None.
Not applicable.
None.
(a) Exhibits
| Exhibit No. | Description | |
|
31.1
|
||
|
32.1
|
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
DATE: November 13, 2015
SATYA WORLDWIDE, INC.
By: /s/ Andrea Kowalski
Andrea Kowalski
President and Chief Executive Officer
(Principal Authorized Officer)
Satya Worldwide, Inc.
Index to Exhibits
| Exhibit No. | Description | |
- 15 -