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EX-32 - EXHIBIT 32 - PMX Communities, Inc. | pmx10kexhibit32.htm |
EX-31 - EXHIBIT 31 - PMX Communities, Inc. | pmx10kexhibit31.htm |
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2016
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from ________ to ________.
Commission File Number: 000-53974
PMX COMMUNITIES, INC.
(Exact name of Registrant as specified in its charter)
Nevada |
| 80-0433114 |
(State or other jurisdiction of incorporation or organization) |
| (I.R.S. Employer Identification Number) |
2700 North Military Trail #130 |
|
|
Boca Raton, FL 33431 |
| (561) 210-5349 |
(Address of Principal Executive Offices) |
| (Company's telephone number) |
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to 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 [ ] 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 Exchange Act. Yes [ ] No [X]
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
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 (§ 229.405 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 [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K 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. [ ]
1
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a smaller reporting registrant.
(Check one):
Large accelerated filer [ ] |
| Accelerated filer [ ] |
Non-accelerated filer [ ] |
| Smaller reporting company [x] |
Indicate by check mark whether the registrant is a shell registrant (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] 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 last sold, or the average bid and asked price of such common equity, as of the last business day of the registrants most recently completed fiscal quarter. The market value of the registrants voting $.0001 par value common stock held by non-affiliates of the registrant was approximately $229,955.
Indicate the number of shares outstanding of each of the registrants classes of common stock, as of the latest practicable date. The number of shares outstanding of the registrants only class of common stock, as of May 2, 2017 was 118,015,124 shares of its $0.0001 par value common stock.
DOCUMENTS INCORPORATED BY REFERENCE
None.
2
PMX Communities, Inc.
Form 10-K
For the Fiscal Year Ended December 31, 2016
Table of Contents
|
| Page |
PART I |
|
|
Item 1. Business |
| 5 |
Item 1A. Risk Factors |
| 6 |
Item 2. Properties |
| 6 |
Item 3. Legal Proceedings |
| 6 |
Item 4. Mine Safety Disclosures |
| 6 |
|
|
|
PART II |
|
|
Item 5. Market for Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities |
| 7 |
Item 6. Selected Financial Data |
| 8 |
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations |
| 8 |
Item 7A. Quantitative and Qualitative Disclosures about Market Risk |
| 10 |
Item 8. Financial Statements and Supplementary Data |
| 11 |
Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosures |
| 24 |
Item 9A. Controls and Procedures |
| 24 |
Item 9B. Other Information |
| 25 |
|
|
|
PART III |
|
|
Item 10. Directors, Executive Officers and Corporate Governance |
| 26 |
Item 11. Executive Compensation |
| 27 |
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 Accountant Fees and Services |
| 28 |
|
|
|
PART IV |
|
|
Item 15. Exhibits, Financial Statement Schedules |
| 31 |
Signatures |
| 33 |
3
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
Certain statements in this report contain or may contain forward-looking statements that are subject to known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements were based on various factors and were derived utilizing numerous assumptions and other factors that could cause our actual results to differ materially from those in the forward-looking statements. These factors include, but are not limited to, our ability to implement our business plan and generate revenues, economic, political and market conditions and fluctuations, government and industry regulation, U.S. and global competition, and other factors. Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described in connection with any forward-looking statements that may be made herein. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. Readers should carefully review this in its entirety, including but not limited to our financial statements and the notes thereto. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events.
4
PART I
Item 1: Business
General
PMX Communities, Inc. "PMX" was organized under the laws of the State of Nevada on December 29, 2004 under the name Merge II, Inc. and changed its name to PMX Communities, Inc. effective February 10, 2009. PMX's year end is December 31.
On September 28, 2010, PMX formed PMX Gold, LLC, (PMX Gold) a Florida limited liability company as a wholly owned subsidiary of the Company to assist with evaluating and pursuing opportunities within the Gold Mining and Retail Gold Sales Industries.
On September 28, 2011, PMX formed PMX Gold Bullion Sales Inc. (PMX Bullion), a Florida corporation as a wholly owned subsidiary of the Company.
PMX, (through its wholly owned subsidiaries PMX Gold, LLC and PMX Gold Bullion Sales Inc.) focuses on the development of leveraged opportunities within the Retail Gold Sales and Gold Mining Industries.
PMX Communities, Inc. and its wholly-owned subsidiaries are hereafter referred to as the Company.
On July 18, 2016, the Board of Directors approved an increase in the number of shares available for issuance through the 2011 stock awards plan from 10,000,000 common shares to 17,700,000 common shares.
The Company is focused on working to build a new avenue to market their terminals globally. As well, the Company is looking for new opportunities for their shareholders.
Operations
The Company has developed its PMX Gold Bullion Dispensing Terminal prototype called the MGIV and deployed the first prototype in Boca Raton, Florida, U.S.A. The terminal is an unmanned dispenser, which allows for gold dispensing and deposit and account management functions. The terminal also incorporated conventional ATM and touch-screen technology.
The Company has been assigned the ownership rights to two U.S. Provisional Patent Applications and a final International Patent Application Number PCT/US2012/020486 (Unattended Precious Metal Distribution System, Methods and Apparatus), and has filed next stage patent applications for its proprietary precious metals machine, in Australia, South Africa and the United States of America.
The first original focus was the consumer demand for essentially one commodity gold through a dispensing terminal. Specifically, we were addressing the markets of physical gold ownership by retail investors, as well as developing and offering an ancillary set of financial services that would complement the purchase and sale of gold and other precious metals by retail investors.
During 2016, we re-evaluated the direction for our terminals. With precious metals making a turn around, we are looking to distribution networks for the machines, and we are pursuing avenues to license our terminal technologies and sell terminals.
Employees
We employ part-time employees on an as needed basis. We also have various consultants, lawyers and others that work for us on different aspects of our operations. As operations increase and revenues allow, we will have to employ an additional undetermined number of employees, consultants and contracted professionals to assist with the development of the Companys business plan.
5
Item 1A. Risk Factors
Not applicable to a smaller reporting company.
Item 2. Properties
The Company is currently using space at 2700 North Military Trail #130, Boca Raton, FL 33431, which has been provided by a shareholder free of charge.
Item 3. Legal Proceedings
On June 19, 2015, the Company received a civil court summons regarding an unpaid note payable with a principal sum of $125,000. On February 26, 2016, a final judgment for $105,756 due to the note holder was recorded in Broward County, Florida. The Company has not repaid the judgement and as such the note continues to accrue interest, the total due including interest as of December 31, 2016 is $131,938.
Item 4. Mine Safety Disclosures
Not applicable
6
PART II
Item 5. Market For Companys Common Equity, Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities
Item 5(a)
a) Market Information. The Company began trading publicly on the OTCQB on December 15, 2010 under the symbol "PMXO.OB".
The following table sets forth the range of high and low bid quotations for our common stock. The quotations represent inter-dealer prices without retail markup, markdown or commission, and may not necessarily represent actual transactions.
2015 |
| High |
| Low |
January 1, 2015 - March 31, 2015 |
| $0.01 |
| $0.00 |
April 1, 2015 - June 30, 2015 |
| $0.01 |
| $0.00 |
July 1, 2015 - September 30, 2015 |
| $0.01 |
| $0.00 |
October 1, 2015 - December 31, 2016 |
| $0.01 |
| $0.00 |
|
|
|
|
|
2016 |
|
|
|
|
January 1, 2016 - March 31, 2016 |
| $0.0079 |
| $0.0015 |
April 1, 2016 - June 30, 2016 |
| $0.0068 |
| $0.0019 |
July 1, 2016 - September 30, 2016 |
| $0.0055 |
| $0.0026 |
October 1, 2016 - December 31, 2016 |
| $0.0058 |
| $0.0010 |
b) Holders. At May 2, 2017, there were approximately 74 shareholders of the Company.
c) Dividends. Holders of our common stock are entitled to receive such dividends as may be declared by our board of directors. No dividends on our common stock have ever been paid, and we do not anticipate that dividends will be paid on our common stock in the foreseeable future.
d) Securities authorized for issuance under equity compensation plans.
On August 29, 2011, the Company approved the 2011 Stock Awards Plan that authorizes the issuance of 6,000,000 common shares. This plan was amended on November 7, 2013 to increase the amount authorized for issuance under the plan to 10,000,000 common shares. The 2011 Stock Awards Plan Awards may be granted only to persons who, at the time of grant, are employees, consultants, members of the board or persons affiliated with the Company or any of its affiliates. An award may be granted on more than one occasion to the same person, and, subject to the limitations set forth in the Plan, such award may include an incentive stock option or a nonqualified stock option, a stock appreciation right, a restricted stock award, a phantom stock award or any combination thereof. To date, 9,500,000 common shares have been issued under the Plan.
On July 18, 2016, the Board of Directors approved an increase in the number of shares available for issuance through the 2011 stock awards plan from 10,000,000 common shares to 17,700,000 common shares.
The Plan shall remain in effect until all awards granted under the Plan have been satisfied or expired.
7
e) Performance graph. Not applicable.
f) Sale of unregistered securities.
Not applicable
Item 5(b) Use of Proceeds. Not applicable.
Item 5(c) Purchases of Equity Securities by the issuer and affiliated purchasers.
During 2015 and 2016, we did not repurchase any shares of our common stock.
Item 6. Selected Financial Data.
Not applicable to smaller reporting companies.
Item 7. Managements Discussions and Analysis of Financial Condition and Results of Operations.
Trends and Uncertainties
The registrant has developed its PMX Gold Bullion Dispensing Terminal prototype called the MGIV and deployed the first prototype in Boca Raton, Florida, U.S.A. The terminal is an unmanned dispenser, which allows for gold dispensing and deposit and account management functions. The terminal also incorporated conventional ATM and touch-screen technology. After a successful six months test, the MGIV was removed in July 2013 from the first location.
The registrant has been assigned the ownership rights to two U.S. Provisional Patent Applications and a final International Patent Application Number PCT/US2012/020486 (Unattended Precious Metal Distribution System, Methods and Apparatus), and has filed next stage patent applications for its proprietary precious metals machine, in Australia, South Africa and the United States of America.
During 2016, we continued to look for opportunities for the company dispensing terminals. As precious metals become more valuable in the marketplace we hope a return to placing the terminals in venues such as malls is a strong possibility.
Results of Operations for the twelve months ended December 31, 2016 and 2015
For the year ended December 31, 2016, we did not record any revenues. We incurred depreciation costs of $21,934, impairment loss on assets of $39,314 and selling, general and administrative expenses of $73,170. We incurred interest expenses of $23,627. As a result, we recorded a net loss of $159,827 for the year ended December 31, 2016.
For the year ended December 31, 2015, we did not record any revenues. We incurred depreciation costs of $33,408 and selling, general and administrative expenses of $86,175. We incurred interest expenses of $25,307 and interest expenses for related party loans of $9,810. We recorded a gain on forgiveness of accounts payable of $35,495. As a result, we had a net loss of $119,205 for the year ended December 31, 2015.
The $40,622 difference in net loss between the years ended December 31, 2016 and 2015 is primarily the result of decreased gains on the forgiveness of accounts payable. We recorded a decrease in depreciation expenses of $9,692 and a decrease in selling, general and administrative expenses of $13,005. Our interest expenses decreased by $11,490, and our gain on the forgiveness of accounts payable was reduced by $35,495 for the year ended December 31, 2016.
8
Liquidity and Capital Resources
For the year ended December 31, 2016, we recorded a net loss of $159,827. We recorded a positive adjustment of $42,000 for common stock issued for services, a positive adjustment of $23,716 for depreciation, $39,314 for impairment of assets, and $24,550 for expenses paid by related party on behalf of the Company. We recorded a positive change of $2,260 due to accounts payable and $24,627 due to accrued interest. As a result, we had net cash used in operating activities of $4,000 for the year ended December 31, 2016.
For the year ended December 31, 2015, we recorded a net loss of $119,205. We recorded a negative adjustment of $35,495 due to settlement income and a positive adjustment of $16,000 for common stock issued or to be issued for services and $33,408 for depreciation. We had positive changes of $4,500 for a security deposit, $1,804 for accounts payable, and $41,773 for accrued interest. As a result, we had net cash used in operating activities of $57,215 for the year ended December 31, 2015.
For the years ended December 31, 2016 and 2015, we did not pursue any investing activities.
For the year ended December 31, 2016, we received $4,000 as proceeds from related party notes payable, resulting in net cash provided by financing activities of $4,000 for the period.
For the year ended December 31, 2015, we received $57,202 as proceeds from related party notes payable, resulting in net cash provided by financing activities of $57,202 for the period.
Our internal and external sources of liquidity have included proceeds raised from subscription agreements and private placements and advances from related parties. We are currently not aware of any trends that are reasonably likely to have a material impact on our liquidity. We are attempting to increase the sales to raise much needed cash for the fulfillment of the Companys business plan.
Off-Balance Sheet Arrangements
The Company had no material off-balance sheet arrangements as of December 31, 2016.
Critical Accounting Policies and Estimates Management's discussion and analysis of its financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles.
The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to the reported amounts of revenues and expenses and the valuation of our assets and contingencies. We believe our estimates and assumptions to be reasonable under the circumstances. However, actual results could differ from those estimates under different assumptions or conditions. Our financial statements are based on the assumption that we will continue as a going concern. If we are unable to continue as a going concern we would experience additional losses from the write-down of assets.
The Company uses the fair value recognition provision of ASC 718, Compensation-Stock Compensation, which requires the Company to expense the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of such instruments. The Company uses the Black-Scholes option pricing model to calculate the fair value of any equity instruments on the grant date.
The Company also uses the provisions of ASC 505-50, Equity Based Payments to Non-Employees, to account for stock-based compensation awards issued to non-employees for services. Such awards for services are recorded at either the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the measurement date guidelines enumerated in ASC 505-50.
9
New Accounting Pronouncements
The Company has adopted all recently issued accounting pronouncements. The adoption of the accounting pronouncements, including those not yet effective, is not anticipated to have a material effect on the financial position or results of operations of the Company.
Item 7a. Quantitative And Qualitative Disclosures About Market Risk
Not applicable.
10
Item 8. Financial Statements And Supplementary Data
PMX Communities, Inc.
Index to
Financial Statements
|
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|
| Page |
Reports of Independent Registered Public Accounting Firms |
| 12-13 |
|
|
|
Consolidated Balance Sheets as of December 31, 2016 and 2015 |
| 14 |
|
|
|
Consolidated Statements of Operations for the Years ended December 31, 2016 and 2015 |
| 15 |
|
|
|
Consolidated Statements of Changes in Stockholders' Deficit for the Years ended December 31, 2016 and 2015 |
| 16 |
|
|
|
Consolidated Statements of Cash Flows for the Years ended December 31, 2016 and 2015 |
| 17 |
|
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|
Notes to Consolidated Financial Statements |
| 18 |
11
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Sole Director and Stockholders
PMX Communities, Inc.
We have audited the accompanying consolidated balance sheet of PMX Communities, Inc. and its subsidiaries (collectively, the Company) as of December 31, 2016, and the related consolidated statements of operations, changes in stockholders deficit, and cash flows for the year then ended. These consolidated financial statements are the responsibility of the entitys management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an 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 audit 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 Companys internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of PMX Communities, Inc. and its subsidiaries as of December 31, 2016, and the consolidated results of their operations and their cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has suffered recurring losses from operations and has a working capital deficit that raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ MaloneBailey, LLP
www.malonebailey.com
Houston, Texas
May 1, 2017
12
STEVENSON & COMPANY CPAS LLC A PCAOB Registered Accounting Firm | 12421 N Florida Ave. Suite.113 Tampa, FL 33612 {813)443-0619 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Stockholders
PMX Communities, Inc.
We have audited the accompanying balance sheets of PMX Communities, Inc. as of December 31, 2015, and the related statements of operations, stockholders deficit, and cash flows for the period ended December 31, 2015. These financial statements are the responsibility of the Companys 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 audits 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 Companys 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, 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 PMX Communities, Inc. as of December 31, 2015 and the results of its operations and its cash flows for the period 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 shown in the accompanying financial statements, the Company has significant net losses and cash flow deficiencies. Those conditions raise substantial doubt about the Companys ability to continue as a going concern. Managements plans regarding those matters are described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Stevenson & Company CPAS LLC
Stevenson & Company CPAS LLC
Tampa, Florida
April 18, 2016
|
| PCAOB Registered |
|
| AICPA Member |
13
PMX Communities, Inc. and Subsidiaries
Consolidated Balance Sheets
| December 31, | December 31, |
| 2016 | 2015 |
Assets |
|
|
Current assets |
|
|
Total current assets | $ - | $ - |
|
|
|
Fixed assets |
|
|
Equipment, net | - | 63,030 |
Total assets | $ - | $ 63,030 |
|
|
|
Liabilities and Stockholders' Deficit |
|
|
|
|
|
Current liabilities |
|
|
Accounts payable | $ 62,549 | $ 35,379 |
Accrued interest | 115,644 | 92,017 |
Notes payable | 157,367 | 153,367 |
Total current liabilities | 335,560 | 280,763 |
|
|
|
Total Liabilities | 335,560 | 280,763 |
|
|
|
Stockholders' deficit |
|
|
Preferred stock, $0.0001 par value; authorized 10,000,000 shares, no shares issued or outstanding | - | - |
Common stock, $0.0001 par value; authorized 500,000,000 |
|
|
shares, issued and outstanding 118,015,124 and 97,115,125 |
|
|
shares as of December 31, 2016 and December 31, 2015 |
|
|
respectively | 11,801 | 9,711 |
Common stock payable | - | 38,150 |
Additional paid-in capital | 3,102,321 | 3,024,261 |
Accumulated deficit | (3,449,682) | (3,289,855) |
Total stockholders' deficit | (335,560) | (217,733) |
Total liabilities and stockholders' deficit | $ - | $ 63,030 |
See accompanying notes to consolidated financial statements
14
PMX Communities, Inc. and Subsidiaries
Consolidated Statements of Operations
| For the year ended | For the year ended |
| December 31, | December 31, |
| 2016 | 2015 |
|
|
|
Operating expenses: |
|
|
Depreciation | $ 23,716 | $ 33,408 |
Selling, general and administrative expenses | 73,170 | 86,175 |
Impairment loss on equipment | 39,314 | - |
Total operating expenses | 136,200 | 119,583 |
Loss from operations | (136,200) | (119,583) |
|
|
|
Other income (expense): |
|
|
Interest expense | (23,627) | (35,117) |
Gain on forgiveness of accounts payable | - | 35,495 |
Total other income (expense) | (23,627) | 378 |
|
|
|
Loss before income taxes | (159,827) | (119,205) |
Income taxes | - | - |
Net loss | $ (159,827) | $ (119,205) |
|
|
|
|
|
|
Basic and Diluted Net loss per common share | $ (0.00) | $ (0.00) |
|
|
|
Weighted average common shares outstanding |
|
|
Basic and Diluted | 107,684,250 | 95,950,289 |
See accompanying notes to consolidated financial statements.
15
PMX Communities, Inc. and Subsidiaries
Consolidated Statements of Changes in Stockholders' Deficit
For the Years Ended December 31, 2016 and 2015
| Common Stock | Common Stock | Additional Paid in | Accumulated | Total Stockholders' | |
| Shares | Par Value | Payable | Capital | Deficit | Deficit |
|
|
|
|
|
|
|
Balance December 31, 2014 | 93,115,124 | $ 9,311 | $ - | $2,719,776 | $(3,170,650) | $(441,563) |
|
|
|
|
|
|
|
Common stock issued for services | 4,000,000 | 400 | - | 15,600 | - | 16,000 |
|
|
|
|
|
|
|
Common stock issued for conversion of notes payable-related parties | - | - | 38,150 | 288,885 | - | 327,035 |
|
|
|
|
|
|
|
Net loss | - | - | - | - | (119,205) | (119,205) |
|
|
|
|
|
|
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Balance December 31, 2015 | 97,115,124 | 9,711 | 38,150 | 3,024,261 | (3,289,855) | (217,733) |
|
|
|
|
|
|
|
Common stock issued for prior year conversion of note payable-related party | 10,900,000 | 1,090 | (38,150) | 37,060 | - | - |
|
|
|
|
|
|
|
Common stock issued for services | 10,000,000 | 1,000 | - | 41,000 | - | 42,000 |
|
|
|
|
|
|
|
Net loss | - | - | - | - | (159,827) | (159,827) |
|
|
|
|
|
|
|
Balance, December 31, 2016 | 118,015,124 | $ 11,801 | $ - | $3,102,321 | $(3,449,682) | $(335,560) |
See accompanying notes to consolidated financial statements.
16
PMX Communities, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
| For the year ended | For the year ended |
| December 31, | December 31, |
| 2016 | 2015 |
|
|
|
Cash flows from operating activities |
|
|
Net loss | $(159,827) | $(119,205) |
Adjustments to reconcile net loss to net |
|
|
cash used in operating activities: |
|
|
Gain on settlement of accounts payable | - | (35,495) |
Common stock issued for services | 42,000 | 16,000 |
Depreciation | 23,716 | 33,408 |
Impairment loss on equipment | 39,314 | - |
Expenses paid by related party on behalf of the Company | 24,550 | - |
Change in assets and liabilities |
|
|
Security deposit | - | 4,500 |
Accounts payable | 2,620 | 1,804 |
Accrued interest | 23,627 | 41,773 |
Net cash used in operating activities | (4,000) | (57,215) |
|
|
|
Cash flows from financing activities |
|
|
Proceeds from related party notes payable | 4,000 | 57,202 |
Net cash provided by financing activities | 4,000 | 57,202 |
|
|
|
Net decrease in cash and cash equivalents | - | (13) |
Cash and cash equivalents, beginning of period | - | 13 |
Cash and cash equivalents, end of period | $ - | $ - |
|
|
|
Supplementary information: |
|
|
Cash paid for: |
|
|
Interest | $ - | $ - |
Income taxes | $ - | $ - |
|
|
|
Non-cash transactions: |
|
|
Conversion of notes payable and accrued interest into common stock | $ - | $327,000 |
Common shares issued for related party note payable converted in prior year | $ 38,150 | $ - |
See accompanying notes consolidated financial statements.
17
PMX Communities, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
For the Years Ended December 31, 2016 and December 31, 2015
NOTE 1 DESCRIPTION OF BUSINESS
PMX Communities, Inc. "PMX" was organized under the laws of the State of Nevada on December 29, 2004 under the name Merge II, Inc. and changed its name to PMX Communities, Inc. effective February 10, 2009. PMX's year end is December 31.
On September 28, 2010, PMX formed PMX Gold, LLC, (PMX Gold) a Florida limited liability company as a wholly owned subsidiary of the Company to assist with evaluating and pursuing opportunities within the Gold Mining and Retail Gold Sales Industries.
On September 28, 2011, PMX formed PMX Gold Bullion Sales Inc. (PMX Bullion), a Florida corporation as a wholly owned subsidiary of the Company.
PMX, (through its wholly owned subsidiaries PMX Gold, LLC and PMX Gold Bullion Sales Inc.) focuses on the development of leveraged opportunities within the Retail Gold Sales and Gold Mining Industries.
PMX Communities, Inc. and its wholly-owned subsidiaries are hereafter referred to as the Company.
On July 18, 2016, the Board of Directors approved an increase in the number of shares available for issuance through the 2011 stock awards plan from 10,000,000 common shares to 17,700,000 common shares.
NOTE 2 - GOING CONCERN
The accompanying consolidated financial statements have been prepared on a going concern basis. The Company has a working capital deficit, has incurred reoccurring net losses and has not yet established revenue producing activities which raises substantial doubt about its ability to continue as a going concern.
Based on the above considerations, there is a substantial doubt about the ability of the Company to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company's ability to further implement its business plan and generate future profits or attain working capital through debt or equity financing. Management hopes that with precious metals making a turn around, they will obtain distribution networks for the machines. Management hopes to find avenues to license their terminal technologies and sell terminals which will bring sufficient revenues and investment into the Company to sustain its growth and operations. Furthermore, management believes organic growth through a new strategy in the Companys subsidiaries will assist the Company in achievement of its goals. There is no assurance that this series of events will be satisfactorily completed. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
NOTE 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
Our financial statements are stated in United States dollars and have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP").
Cash and Cash Equivalents
The Company considers all highly liquid debt instruments with original maturities of three months or less to be cash equivalents.
18
Use of Estimates
The preparation of the consolidated financial statements in conformity with U.S. GAAP requires us to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of expenses during the period presented.
We make our estimate of the ultimate outcome for these items based on historical trends and other information available when the financial statements are prepared. Changes in estimates are recognized in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available. We believe that our significant estimates, assumptions and judgments are reasonable, based upon information available at the time they were made. Actual results could differ from these estimates, making it possible that a change in these estimates could occur in the near term.
Principles of Consolidation
The consolidated financial statements include the accounts of PMX Communities, Inc. and its wholly-owned subsidiaries, PMX Gold, LLC and PMX Gold Bullion Sales, Inc. All inter-company transactions have been eliminated.
Financial Instruments and Fair Value
The Companys balance sheet includes certain financial instruments, including accounts payable, accrued expenses and notes payable. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization.
ASC 820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entitys own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:
Level 1
Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities
Level 2
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.
Level 3
Inputs that are both significant to the fair value measurement and unobservable.
19
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2016. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments.
Equipment
Equipment is stated at cost, less accumulated depreciation. Depreciation is provided using the straight line method over the estimated useful life of five years for equipment, five years for molds and seven years for furniture and fixtures.
Impairment of Long-Lived Assets
The Company evaluates the recoverability of long-lived assets and the related estimated remaining useful lives when events or circumstances lead management to believe that the carrying value of an asset may not be recoverable and the undiscounted cash flows estimated to be generated by those assets are less than the assets carrying amounts. In such circumstances, those assets are written down to estimated fair value. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset's estimated fair value and its book value.
Common Stock, Common Stock Options and Warrants
The Company uses the fair value recognition provision of ASC 718, "Compensation-Stock Compensation," which requires the Company to expense the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of such instruments. The Company uses the Black-Scholes option pricing model to calculate the fair value of any equity instruments on the grant date.
The Company also uses the provisions of ASC 505-50, "Equity Based Payments to Non-Employees," to account for stock-based compensation awards issued to non-employees for services. Such awards for services are recorded at either the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the measurement date guidelines enumerated in ASC 505-50.
Income Taxes
Under the asset and liability method prescribed under ASC 740, Income Taxes, the Company uses the liability method of accounting for income taxes. The liability method measures deferred income taxes by applying enacted statutory rates in effect at the balance sheet date to the differences between the tax basis of assets and liabilities and their reported amounts on the financial statements. The resulting deferred tax assets or liabilities are adjusted to reflect changes in tax laws as they occur. A valuation allowance is provided when it is more likely than not that a deferred tax asset will not be realized.
The Company recognizes the financial statement benefit of an uncertain tax position only after considering the probability that a tax authority would sustain the position in an examination. For tax positions meeting a "more-likely-than-not" threshold, the amount recognized in the financial statements is the benefit expected to be realized upon settlement with the tax authority. For tax positions not meeting the threshold, no financial statement benefit is recognized. As of December 31, 2016 and 2015, the Company had no uncertain tax positions. As of December 31, 2016, the Company has approximately $3,725,000 in net loss carry forwards. The Company recognizes interest and penalties, if any, related to uncertain tax positions as general and administrative expenses. The Company currently has no federal or state tax examinations nor has it had any federal or state examinations since its inception. The tax years for December 31, 2011-2016 remain subject to review by federal and state tax authorities.
20
Income tax expense (benefit) consists of the following for the years ended December 31:
| 2016 | 2015 | ||
Current: |
|
| ||
Deferred | - | (6,100) | ||
Federal | (37,980) | (35,100) | ||
State | (4,220) | (3,700) | ||
Total | (42,200) | (44,900) | ||
|
|
| ||
Less reserve for allowance | 42,200 | 44,900 | ||
Total income tax expense (benefit) | - | - |
The net deferred income tax assets and (liability) consist of the following as of December 31:
| 2016 | 2015 |
Deferred: |
|
|
Net deferred tax asset and liabilities | 1,303,700 | 1,261,600 |
Less reserve for allowance | (1,303,700) | (1,261,600) |
Total deferred tax assets and liabilities | - | - |
Revenue Recognition
The Company recognizes revenue when it is realized and realizable.
- Persuasive evidence of an arrangement exists; and
- Delivery has occurred; and
- Price is fixed or determinable; and
- Collectability is reasonably assured
Subject to these criterions, the Company recognizes revenue at the time the merchandise is purchased and the machine dispenses the relevant merchandise. The Company offers its individual customers a 14-day warranty if the item is returned and if the TEP packaging is not broken. The customer will receive their money back. The Company estimates an allowance for sales returns based on historical experience with product returns. The Company closely follows the provisions of ASC 605, Revenue Recognition, which includes the guidelines of Staff Accounting Bulletin No. 104 as described above.
Income (loss) Per Common Share
Basic income (loss) per share is calculated using the weighted-average number of common shares outstanding during each reporting period. Diluted loss per share includes potentially dilutive securities such as outstanding options and warrants, using various methods such as the treasury stock or modified treasury stock method in the determination of dilutive shares outstanding during each reporting period. As of December 31, 2016 and 2015, the Company had no warrants issued and outstanding.
Recent Authoritative Accounting Pronouncement
In August 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern (ASU 2014-15). ASU 2014-15 is intended to define managements responsibility to evaluate whether there is substantial doubt about an organizations ability to continue as a going concern and to provide related footnote disclosures. The amendments in this ASU are effective for reporting periods beginning after December 15, 2016, with early adoption permitted. The Company is currently assessing the impact the adoption of ASU 2014-15 will have on its financial statements.
21
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 4 PROPERTY AND EQUIPMENT
Components of property and equipment are as follows:
| December 31, 2016 | December 31, 2015 | ||
|
|
| ||
Gold Machines | $ 146,224 | $ 146,224 | ||
Molds | 8,909 | 8,909 | ||
Officer Equipment | 1,600 | 1,600 | ||
Office Furniture and Fixtures | 3,366 | 3,366 | ||
Less: Accumulated Depreciation | (120,785) | (97,069) | ||
Less: Impairment | (39,314) | - | ||
|
|
| ||
Property and Equipment, net | $ - | $ 63,030 |
Depreciation for the years ended December 31, 2016 and 2015 was $23,716 and $33,408, respectively. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. Through its analysis, the Company determined that the expected future cash flows is less than the carrying amount of the assets, therefore, an impairment loss of $39,314 was recorded during the year ended December 31, 2016.
NOTE 5 NOTES PAYABLE
Promissory Notes carry outstanding principal balances of $157,367 and $153,367 as of December 31, 2016 and 2015, respectively. Related accrued interest was $115,644 and $92,017 as of December 31, 2016 and 2015, respectively. As of December 31, 2016, these notes are due on demand as their maturity dates have passed and are considered to be in default. These notes bear interest at a rate of 5% to 12% per annum.
NOTE 6 EQUITY FINANCING
On December 11, 2014, the Company amended its Articles of Incorporation. The following are the authorized shares for each class:
Class |
| Par |
| Authorized |
Preferred |
| 0.0001 |
| 10,000,000 |
Common |
| 0.0001 |
| 500,000,000 |
Shares Issued for Services
On April 17, 2015, the Company issued 4,000,000 shares of stock to a company for services. These shares were valued at fair market value, which on the date of issuance was $16,000 and expensed as consulting expense.
On July 1, 2016, the Board of Directors approved the issuance of the following shares: 4,000,000 shares to an officer of the Company for services and 6,000,000 shares to a related party shareholder for consulting services. The total value for the 10,000,000 shares was $42,000.
22
Shares Issued to convert related party notes payable
During the year ended December 31, 2015, one shareholder and his beneficial interests made aggregate loans of $57,202 to the Company. The loans bear interest at 5% and each have a six-month maturity. In December 2015, these new loans, prior year, related party loans and related accrued interest totaling approximately $327,000 were settled by the holders agreeing to receive 10,900,000 shares which were valued at $38,150 and recorded as common stock payable. The remaining balances of the loans were recorded as a capital contribution. The Company issued the 10,900,000 shares during the year December 31, 2016.
Warrants
No warrants were issued and outstanding during the years ended December 31, 2016 and 2015.
NOTE 7 RELATED PARTY TRANSACTIONS
The Company is currently using space at 2700 North Military Trail #130, Boca Raton, FL 33431, which has been provided by a majority shareholder free of charge.
During the year ended December 31, 2015, one shareholder and his beneficial interests made aggregate loans of $57,202 to the Company. The loans bear interest at 5% and each have a six-month maturity. In December 2015, these new loans, prior year, related party loans and related accrued interest totaling approximately $327,000 were settled by the holders agreeing to receive 10,900,000 shares which were valued at $38,150 and recorded as common stock payable. The remaining balances of the loans were recorded as a capital contribution. The Company issued the 10,900,000 shares during the year December 31, 2016.
During the years ended December 31, 2016 and 2015, one shareholder and his beneficial interests made aggregate loans of $4,000 and $57,202, respectively, to the Company. The balance as of December 31, 2016 and 2015 is $4,000 and $0, respectively. The loans bear interest at 5% and each has a six-month maturity.
During the year ended December 30, 2016, a related party shareholder paid $24,550 in expenses on the Companys behalf. The amount is included in accounts payable.
On July 1, 2016, the Board of Directors approved to issue a total of 10,000,000 shares of common stock to officers of the Company for services at $0.0042 per share or $42,000.
The above related party transactions are not necessarily indicative of the terms and amounts that would have been incurred had comparable agreements been made with independent parties.
NOTE 8 COMMITMENTS AND CONTINGENCIES
On June 19, 2015, the Company received a civil court summons regarding an unpaid note payable with a principal sum of $125,000. On February 26, 2016, a final judgment for $105,756 due to the note holder was recorded in Broward County, Florida. The Company has not repaid the judgement and as such the note continues to accrue interest, the total due including interest as of December 31, 2016 is $131,938.
23
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
Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended, as of December 31, 2016. We do not have sufficient segregation of duties within accounting functions, which is a basic internal control. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. Based on this evaluation, our chief executive officer and chief financial officer have concluded such controls and procedures to be not effective as of December 31, 2016 to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms and to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Managements Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is the process designed by and under the supervision of our chief executive officer and chief financial officer, or the persons performing similar functions, to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external reporting in accordance with accounting principles generally accepted in the United States of America. These officers have evaluated the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control over Financial Reporting Guidance for Smaller Public Companies.
Our chief executive officer and chief financial officer have assessed the effectiveness of our internal control over financial reporting as of December 31, 2016 and concluded that it was not effective because of the material weakness described below:
In connection with the preparation of our consolidated financial statements for the year ended December 31, 2016, material weaknesses became evident to management regarding our inability to generate all the necessary disclosure for inclusion in our filings with the Securities and Exchange Commission due to the lack of resources which resulted in lack of multiple levels of supervision and review and a lack of segregation of duties. A material weakness is a significant deficiency in one or more of the internal control components that alone or in the aggregate precludes our internal controls from reducing to an appropriately low level the risk that material misstatements in our consolidated financial statements will not be prevented or detected on a timely basis.
The Company hired an outsource certified public accountant to work with our CFO and management on an as needed basis to eliminate the material weaknesses. We will continue to aggressively recruit experienced professionals to ensure that we include all necessary disclosures in our filings with the Securities and Exchange Commission. Although we believe that this corrective step will enable management to conclude that the internal controls over our financial reporting are effective when the staff is trained, we cannot assure you these steps will be sufficient. We may be required to expend additional resources to identify, assess and correct any additional weaknesses in internal control.
24
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Managements report was not subject to attestation by the Companys registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only managements report in this annual report.
Evaluation of Changes in Internal Control over Financial Reporting
Our chief executive officer and chief financial officer have evaluated changes in our internal controls over financial reporting that occurred during the year ended December 31, 2016. Based on that evaluation, our chief executive officer and chief financial officer, or those persons performing similar functions, did not identify any change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Important Considerations
The effectiveness of our disclosure controls and procedures and our internal control over financial reporting is subject to various inherent limitations, including cost limitations, judgments used in decision making, assumptions about the likelihood of future events, the soundness of our systems, the possibility of human error, and the risk of fraud. Moreover, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions and the risk that the degree of compliance with policies or procedures may deteriorate over time. Because of these limitations, there can be no assurance that any system of disclosure controls and procedures or internal control over financial reporting will be successful in preventing all errors or fraud or in making all material information known in a timely manner to the appropriate levels of management.
Item 9b. Other Information
None
25
PART III
Item 10. Directors, Executive Officers and Corporate Governance.
Our bylaws provide that the number of directors who shall constitute the whole board shall be such number as the board of directors shall at the time have designated. We confirm that the number of authorized directors has been set at one or more in number pursuant to our bylaws.
Each director shall be selected for a term of one year and until his successor is elected and qualified. Vacancies are filled by a majority vote of the remaining directors then in office with the successor elected for the unexpired term and until the successor is elected and qualified. The directors, officers and significant employees are as follows:
NAME |
| AGE |
| POSITIONS HELD |
| SINCE |
Lindsey Perry |
| 63 |
| CEO/ Director/ CFO/ Controller |
| April 19, 2012 to present |
Business Experience of Officers, Directors and Significant Employees
Lindsey R. Perry, Jr. has been the chairman, chief executive officer, and chief financial officer of PMX Communities since April 19, 2012. Mr. Perry graduated from Bucknell University in 1977 with a Bachelor of Science Degree in accounting.
The above named director will serve in his capacity as director until our next annual shareholder meeting to be held within six months of our fiscal year's close. Directors are elected for one-year terms.
Section 16(a) Beneficial Ownership Reporting Compliance
To our knowledge, other than Lindsey Perry, no director, officer or beneficial owner of more than ten percent of any class of our equity securities, failed to file on a timely basis reports required by Section 16(a) of the Exchange Act during 2015.
Code of Ethics Policy
We have not yet adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions.
Corporate Governance
There have been no changes in any state law or other procedures by which security holders may recommend nominees to our board of directors. In addition to having no nominating committee for this purpose, we currently have no specific audit committee and no audit committee financial expert. Based on the fact that our current business affairs are simple, any such committees are excessive and beyond the scope of our business and needs.
Family Relationships
There are no family relationships between our officers and directors.
Involvement in Certain Legal Proceedings
None of our directors, executive officers and control persons has been involved in any of the following events during the past ten years:
·
Any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time,
26
·
Any conviction in a criminal proceeding or being subject to any pending criminal proceeding (excluding traffic violations and other minor offenses);
·
Being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his or her involvement in any type of business, securities or banking activities; or
·
Being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.
Item 11. Executive Compensation
We may elect to award a cash bonus to key employees, directors, officers and consultants based on meeting individual and corporate planned objectives.
Name and Principal Position | Year |
| Salary | Bonus | Stock Awards | Option Awards | Non-Equity Incentive Plan Comp | Nonqualified deferred Comp Earnings | All Other Comp | Total |
Lindsey Perry | 2016 |
| - | - | $16,800(1) | - | - | - | - | $16,800 |
CEO/ CFO | 2015 |
| - | - | - | - | - | - | - | - |
(1)Represents 4,000,000 restricted common shares issued for services.
Item 12. Securities Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table sets forth, as of April 19, 2017, the number and percentage of our outstanding shares of common stock owned by (i) each person known to us to beneficially own more than 5% of its outstanding common stock, (ii) each director, (iii) each named executive officer and significant employee, and (iv) all officers and directors as a group.
The number of shares listed below includes shares that each shareholder listed in the table has the right to acquire beneficial ownership of within 60 days.
Name and Address |
| Number & Class of Shares |
| Percentage of Outstanding Common Shares |
Lindsey R. Perry, Jr. (1) |
| 11,790,684 direct |
| 9.99% |
6505 NW 39th Terrace |
|
|
|
|
Boca Raton, FL 33496 |
|
|
|
|
|
|
|
|
|
Directors/ Officers |
| 11,790,684 direct |
| 9.99% |
As a group one (1) person |
|
|
|
|
27
5% or more Shareholder
Mark Goldstein |
| 1,620,975 direct |
| 1.37% |
2700 N. Military Trail |
| 49,852,360 indirect (2) |
| 42.24% |
Suite 130 |
|
|
|
|
Boca Raton, FL 33431 |
|
|
|
|
(1)Mr. Perry is an officer and director of PMX Communities.
(2)Represents common shares held by Dickinson Capital, LLC (a Florida limited liability company) that is controlled by Mark B. Goldstein.
Based upon 118,015,124 outstanding common shares as of May 2, 2017.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The Company is currently using space at 2700 North Military Trail #130, Boca Raton, FL 33431, which has been provided by Mark Goldstein, a majority shareholder free of charge.
During the year ended December 31, 2015, Mark Goldstein, a majority shareholder and his beneficial interests made aggregate loans of $57,202 to the Company. The loans bear interest at 5% and each have a six-month maturity. In December 2015, these new loans, prior year, related party loans and related accrued interest totaling approximately $327,000 were settled by the holders agreeing to receive 10,900,000 shares which were valued at $38,150 and recorded as common stock payable. The remaining balances of the loans were recorded as a capital contribution. The Company issued the 10,900,000 shares during the year December 31, 2016.
During the years ended December 31, 2016 and 2015, Mark Goldstein, a majority shareholder, and his beneficial interests made aggregate loans of $4,000 and $57,202, respectively, to the Company. The balance as of December 31, 2016 and 2015 is $4,000 and $0, respectively. The loans bear interest at 5% and each has a six-month maturity.
During the year ended December 30, 2016, a related party shareholder paid $24,550 in expenses on the Companys behalf. The amount is included in accounts payable.
On July 1, 2016, the Board of Directors approved to issue a total of 10,000,000 shares of common stock to officers of the Company for services at $0.0042 per share or $42,000.
The above related party transactions are not necessarily indicative of the terms and amounts that would have been incurred had comparable agreements been made with independent parties.
Director Independence
All of our directors are independent as such term is defined by a national securities exchange or an inter-dealer quotation system. During the years ended December 31, 2016 and 2015, there were no transactions with related persons other than as described in the section above.
Item 14. Principal Accounting Fees and Services
On August 3, 2015, the Company dismissed Messineo & Co., CPAs, LLC as their registered independent public accountant. On August 3, 2015, the Company engaged Cutler & Co., LLC as their new independent public accountant. On November 16, 2015, Cutler & Co., LLC resigned as the Companys registered independent public accountant. On November 16, 2015, the Company engaged Stevenson & Company
28
CPAs LLC as their new independent public accountant. On March 7, 2017, Stevenson & Company CPAs LLC resigned as the Companys independent public accountant. On March 22, 2017, the Company engaged Malone Bailey LLP as its new independent public accountant. The following shows the fees that were billed for the audit and other services provided by such firms for 2015 and 2016.
Audit fees paid to Messineo & Co.: 2015 - $12,500
Audit fees paid to Cutler & Co., LLC: 2015 - $3,000
Audit fees paid to Stevenson & Company CPAs LLC: 2015 - $15,500, 2016 - $20,000
Audit fees paid to Malone Bailey, LLP: 2016 - $6,000
Audit related fees paid to Messineo & Co.: 2015 - $0
Audit related fees paid to Cutler & Co., LLC: 2015 - $0
Audit related fees paid to Stevenson & Company CPAs LLC: 2015 - $0, 2016 - $0
Audit related fees paid to Malone Bailey, LLP: 2016 - $0
Tax fees paid to Messineo & Co.: 2015 - $0
Tax fees paid to Cutler & Co., LLC: 2015 - $0
Tax fees paid to Stevenson & Company CPAs LLC: 2015 - $0, 2016 - $0
Tax fees paid to Malone Bailey, LLP: 2016 - $0
All other fees paid to Messineo & Co.: 2015 - $0
All other fees paid to Cutler & Co., LLC: 2015 - $0
All other fees paid to Stevenson & Company CPAs LLC: 2015 - $0, 2016 - $0
All other fees paid to Malone Bailey, LLP: 2016 - $0
Audit Fees - This category includes the audit of our annual financial statements, review of financial statements included in our Form 10-Q Quarterly Reports and services that are normally provided by the independent auditors 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 auditors 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 SEC and other accounting consulting.
Tax Fees - This category consists of professional services rendered by our independent auditors for tax compliance and tax advice. The services for the fees disclosed under this category include tax return preparation and technical tax advice.
Pre-approval Policy
Our Board of Directors has adopted a procedure for pre-approval of all fees charged by our independent auditors. 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 2014 were pre-approved by the entire Board of Directors.
Board of Directors Report
The Board of Directors has reviewed and discussed with the Company's management and independent auditor the audited consolidated financial statements of the Companys contained in the Company's Annual Report on Form 10-K for the Company's fiscal year ended December 31, 2016. The Board has also discussed with the independent auditor the matters required to be discussed pursuant to SAS No. 61 (Codification of Statements on Auditing Standards, AU Section 380), which includes, among other items, matters related to the conduct of the audit of the Company's consolidated financial statements.
29
The Board has received and reviewed the written disclosures and the letter from the independent auditor required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditor's communications with the Board concerning independence, and has discussed with its independent auditor its independence from the Company.
The Board has considered whether the provision of services other than audit services is compatible with maintaining auditor independence.
Based on the review and discussions referred to above, the Board approved the inclusion of the audited consolidated financial statements in the Company's Annual Report on Form 10-K for its fiscal year ending December 31, 2016 for filing with the SEC.
30
PART IV
Item 15. Exhibits, Financial Statement Schedules
(a)(1) List of Financial statements included in Part II hereof
Balance Sheets, December 31, 2016 and 2015
Statements of Operations for the years ended December 31, 2016 and 2015
Statements of Stockholders' Equity (Deficit) for the years ended December 31, 2016 and 2015
Statements of Cash Flows for the years ended December 31, 2016 and 2015
Notes to the Financial Statements
(a)(2) List of Financial Statement schedules included in Part IV hereof: None.
(a)(3) Exhibits
The following exhibits are included herewith:
Exhibit No. | Description |
31 | Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
32 | Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
101.INS* | XBRL Instance Document |
101.SCH* | XBRL Taxonomy Extension Schema Document |
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB* | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document |
*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.
Following are a list of exhibits which we previously filed in other reports which we filed with the SEC, including the Exhibit No., description of the exhibit and the identity of the Report where the exhibit was filed.
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NO. | DESCRIPTION | FILED WITH | DATE FILED |
3.1 | Articles of Incorporation | Form S-1 | September 3, 2009 |
3.2 | Certificate of Amendment | Form S-1 | September 3, 2009 |
3.3 | Certificate of Change | Form S-1 | September 3, 2009 |
3.4 | Certificate of Amendment | Form 8-K | December 12, 2014 |
3.5 | Bylaws | Form S-1 | September 3, 2009 |
4.1 | PMX Stock Awards Plan | Form S-8 | November 11, 2013 |
10.1 | Lease-Purchase Option | Form S-1 | September 3, 2009 |
10.2 | Revised Assignment and Assumption | Form S-1/A | October 16, 2009 |
10.3 | Agreement with Invisosoft | Form S-1 | September 3, 2009 |
10.4 | Business Consultant Agreement | Form S-1 | September 3, 2009 |
10.5 | Gervis Agreement | Form S-1/A | October 16, 2009 |
10.6 | Partial Satisfaction of Promissory Notes | Form S-1/A | October 16, 2009 |
10.7 | Mark Goldstein Note Dated 2/13/09 | Form S-1/A | October 16, 2009 |
10.8 | Barry Roderman Note Dated 2/13/09 | Form S-1/A | October 16, 2009 |
10.9 | Mark Connell Note Dated 2/27/09 | Form S-1/A | October 16, 2009 |
10.10 | Andrew Goldstein Note Dated 3/8/09 | Form S-1/A | October 16, 2009 |
10.11 | Philip and Cynthia Liberty Note Dated 6/19/09 | Form S-1/A | October 16, 2009 |
10.12 | Glenn Murphy Note Dated 6/25/09 | Form S-1/A | October 16, 2009 |
10.13 | Financing Agreement Dated 8/18/10 | Form 8-K | October 20, 2010 |
10.14 | Agreement Dated 9/2/10 | Form 8-K | October 20, 2010 |
10.15 | Agreement Dated 10/5/10 | Form 8-K | October 20, 2010 |
10.16 | Transmedia Consulting Agreement | Form 8-K | December 20, 2010 |
10.17 | Tritos Consulting Agreement | Form 8-K | December 20, 2010 |
10.18 | Development Agreement | Form 8-K | August 29, 2011 |
10.19 | Financing Agreement | Form 8-K | August 29, 2011 |
10.20 | Employment Agreement | Form 8-K | August 29, 2011 |
10.21 | 2011 Stock Awards Plan | Form 8-K | August 29, 2011 |
10.22 | First Amendment to Executive Employment Agreement | Form 8-K/A | February 15, 2012 |
10.23 | Promissory Note | Form 8-K/A | February 15, 2012 |
16.1 | Auditor's Letter | Form 8-K/A | February 22, 2013 |
99.1 | Confidentiality Agreement | Form 8-K | May 21, 2012 |
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
PMX COMMUNITIES, INC.
BY: /s/ Lindsey Perry
Lindsey Perry
Chief Executive Officer, Chief Financial Officer
Dated: May 2, 2017
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 Company and in the capacities and on the dates indicated.
By: /s/ Lindsey Perry
Lindsey Perry
Chief Executive Officer, Chief Financial Officer, Director, Controller
Dated: May 2, 2017
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