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

 

FORM 10-Q

 

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

 

For the quarterly period ended May 31, 2017

 

or

 

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

 

For the transition period from _____________ to _____________

 

Commission file number 000-55035

 

EYE ON MEDIA NETWORK, INC.

(Name of small business issuer in its charter)

 

Florida

(State or other jurisdiction of incorporation or organization)

 

46-3390293

(I.R.S. Employer Identification No.)

 

1500 NW 65^th Avenue, Plantation, Florida 33313

(Address of principal executive offices and Zip Code)

 

Registrant’s telephone number, including area code: (954) 370-9900

 

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes    ¨ 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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes    ¨ No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	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 ¨ No x

 

The number of shares of the issuer’s common stock, par value $.001 per share, outstanding as of June 15, 2017 was 28,789,451. There are fifty million (50,000,000) shares of the issuer’s Series A Convertible Preferred Stock issued and outstanding as of such date.

 

TABLE OF CONTENTS

 

				Page
Part I. Financial Information.
Item 1.	Condensed Unaudited Financial Statements.			3
	Condensed Balance Sheets for the periods ending May 31, 2017 and August 31, 2016.			3
	Condensed Statements of Operations for the three and nine months ended May 31, 2017 and 2016.			4
	Condensed Statements of Cash Flows for the nine months ended May 31, 2017 and 2016.			5
	Notes to Condensed Financial Statements.			6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.			14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.			20
Item 4.	Controls and Procedures.			20
Part II. Other Information.
Item 1.	Legal Proceedings.			21
Item 1A.	Risk Factors.			21
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.			21
Item 3.	Defaults Upon Senior Securities.			21
Item 4.	Mine Safety Disclosure.			21
Item 5.	Other Information.			21
Item 6.	Exhibits.			22
Signatures.				24

 

2

Table of Contents

 

Part I. Financial Information

 

Item 1. Condensed Financial Statements

 

EYE ON MEDIA NETWORK INC.

CONDENSED BALANCE SHEETS

Unaudited

		May 31,				August 31,
		2017				2016
ASSETS
Current Assets
Cash and cash equivalents		$	99,708			$	2,071
Total Current Assets			99,708				2,071
Property and equipment, net of accumulated depreciation of $1,593,802 and $1,090,118, respectively			412,893				991,686
Intangible assets, net of accumulated amortization of $0 and $0, respectively			30,300				---
TOTAL ASSETS		$	542,901			$	993,757
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable		$	4,312			$	6,625
Accrued interest			3,876				---
Convertible note payable, net of discount of $124,172 and $0, respectively			70,828				---
Derivative liability			605,841				---
Total Current Liabilities			684,857				6,625
TOTAL LIABILITIES			684,857				6,625
Stockholders’ Equity
Preferred stock: 500,000,000 authorized; $0.001 par value 50,000,000 and 50,000,000 shares issued and outstanding, respectively			50,000				50,000
Common stock: 750,000,000 authorized; $0.001 par value 28,789,451 and 28,576,951 shares issued and outstanding, respectively			28,789				28,577
Additional paid in capital			2,635,598				2,884,386
Accumulated deficit			(2,856,343	)			(1,975,831	)
Total Stockholders’ Equity			(141,956	)			987,132
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	542,901			$	993,757

 

See notes to the unaudited condensed financial statements

 

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EYE ON MEDIA NETWORK, INC.

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

 

		For the Three Months Ended								For the Nine Months Ended
		May 31,								May 31,
		2017				2016				2017				2016
Revenues		$	11,300			$	3,700			$	32,375			$	15,000
Operating Expenses
Contractor costs			325				2,681				1,775				18,841
Stock issued for services			---				---				---				311,000
Professional fees			49,965				4,733				62,113				59,390
General and administrative			22,436				10,060				45,737				46,247
Impairment of long-lived assets			---				---				335,668				---
Depreciation and amortization			81,042				84,798				243,125				261,601
Total operating expenses			153,768				102,272				688,418				697,079
Net loss from operations			(142,468	)			(98,572	)			(656,043	)			(682,079	)
Other income (expenses)
Interest expense			(3,876	)			---				(3,876	)			---
Interest expense related to derivative liability			(70,828	)			---				(70,828	)			---
Change in derivative			(149,765	)			---				(149,765	)			---
Net loss		$	(366,937	)		$	(98,572	)		$	(880,512	)		$	(682,079	)
Basic and diluted loss per share		$	(0.01	)		$	(0.00	)		$	(0.03	)		$	(0.02	)
Weighted average number of shares outstanding			28,789,451				28,462,470				28,667,977				28,315,655

 

See notes to the unaudited condensed financial statements

 

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EYE ON MEDIA NETWORK INC. CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
		For the Nine Months Ended
		May 31,
		2017				2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)		$	(880,512	)		$	(682,079	)
Adjustment to reconcile Net Income to net cash provided by operations:
Depreciation and amortization			243,125				261,600
Beneficial conversion of derivative convertible notes			220,593				---
Impairment of long-lived assets			335,668				---
Stock issued for services provided			---				311,000
Changes in assets and liabilities:
Accounts payable			(2,313	)			3,925
Accrued interest			3,876				---
Net Cash provided by (used in) Operating Activities			(79,563	)			(105,554	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Intangible assets			(30,300	)			---
Net Cash provided by (used in) Investing Activities			(30,300	)			---
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of common stock			12,500				105,000
Proceeds from convertible notes			195,000				---
Net Cash provided by Financing Activities			207,500				105,000
Net increase (decrease) in cash and cash equivalents			97,637				(554	)
Cash and cash equivalents
Beginning of period			2,071				7,367
End of period		$	99,708			$	6,813
Supplemental cash flow information
Cash paid for interest		$	---			$	---
Cash paid for taxes		$	---			$	---
Non-cash transactions:
Derivative convertible liability recorded		$	605,841			$	---

 

See notes to the unaudited condensed financial statements

 

5

Table of Contents

 

EYE ON MEDIA NETWORK INC.

Notes to Condensed Financial Statements

For the period ended May 31, 2017

(Unaudited)

 

NOTE 1: NATURE OF OPERATIONS

 

EYE ON MEDIA NETWORK INC. (“EYE”; “EOMN” or the “Company”) was incorporated in Florida on August 2, 2013, with an objective to acquire, or merge with, an operating business. On January 22, 2014 the Company acquired an operating company, Eye on South Florida in a reverse merger.

 

Eye on South Florida, Inc. (EOSF), a corporation, was chartered in the State of Florida on January 18, 2013 as a media organization for the purpose of providing television services as an independent producer and distributor of television programming locally and nationally. The programming is based on content that is produced and filmed in South Florida, on subjects that are relevant to the South Florida area. The operations of Eye on South Florida were discontinued in January 2015.

 

As of January 22, 2014, the Company is in the business of providing television services to areas around the state and the country.

 

These condensed financial statements include the activity of Eye on Media Network, Inc.

 

NOTE 2: GOING CONCERN

 

The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating cost 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.

 

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan to obtain such resources for the Company include, obtaining capital from management and significant stockholders sufficient to meet its minimal operating expenses. However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans.

 

There is no assurance that the Company will be able to obtain sufficient additional funds when needed or that such funds, if available will be obtainable on terms satisfactory to the Company. In addition, profitability will ultimately depend upon the level of revenues received from business operations. However, there is no assurance that the Company will attain profitability. The accompanying 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

 

Unaudited Interim Financial Statements

 

The accompanying unaudited condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission for interim financial statements. Therefore, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. The interim financial statements should be read in conjunction with the annual financial statements included in the Form 10K as of August 31, 2016 and filed with the Securities and Exchange Commission on November 14, 2016.

 

In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) the financial position; (b) the result of operations; and (c) cash flows, have been made in order to make the financial statements presented not misleading. The results of operations for such interim periods are not necessarily indicative of operations for a full year.

 

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EYE ON MEDIA NETWORK INC.

Notes to Condensed Financial Statements

For the period ended May 31, 2017

(Unaudited)

 

Basis of Presentation and Use of Estimates

 

The Company prepares its financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP"), which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Fiscal Year End

 

The Company elected August 31 as its fiscal year ending date.

 

Cash and Cash Equivalents

 

The Company considers all highly liquid investments with an original maturity of three months or less at the date of acquisition to be cash equivalents. Cash and cash equivalents totaled $99,708 at May 31, 2017 and $2,071 at August 31, 2016.

 

Credit risk associated with cash deposits are insured under FDIC up to $250,000 per depositor, per FDIC insured bank, per ownership category. At such time, as the Company’s cash deposits exceed FDIC limits, the Company will reassess their credit risk.

 

Cash Flows Reporting

 

The Company follows ASC 230, Statement of Cash Flows, for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by ASC 230, Statement of Cash Flows, to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments

 

Financial Instruments

 

The Company’s balance sheet includes certain financial instruments, including cash and accounts 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 entity’s 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:

 

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EYE ON MEDIA NETWORK INC.

Notes to Condensed Financial Statements

For the period ended May 31, 2017

(Unaudited)

 

	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.

 

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of May 31, 2017. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments.

 

Revenue Recognition

 

The Company recognizes revenue when it is realized or realizable and earned.

 

	The Company considers revenue realized or realizable and earned when all of the following criteria are met:
	o	persuasive evidence of an arrangement exists
	o	the product has been shipped or the services have been rendered to the customer
	o	the sales price is fixed or determinable
	o	collectability is reasonably assured.

 

The Company generates revenue through four processes: (1) Media Production, (2) Commercial Production, Distribution and (3) Advertising Sales and Distribution (4) Live Broadcasting of Events.

 

	·	Revenue for media production of original content. The company recognizes a sale when the production is completed and ready for distribution. The burden of distribution and risk of loss has passed to the customer.
	·	Revenue for production of television grade HD Commercials. Revenue is recognized when the services have been performed and passed on to the customer.
	·	Revenue for distribution of commercials and content service fees is recognized ratably over the term of the advertising agreement.
	·	Revenue for live broadcasting of original content. The company recognizes a sale when the live broadcast / production is contracted and completed. The burden of distribution and risk of loss has passed to the customer.

 

Property and Equipment

 

Property and equipment is stated at cost. Depreciation is computed by the straight-line method over estimated useful lives.

 

Long-lived assets such as property, equipment and identifiable intangibles are reviewed for impairment at least annually or whenever facts and circumstances indicate that the carrying value may not be recoverable. When required, impairment losses on assets to be held and used are recognized based on the fair value of the asset. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required. If the carrying amount of the long-lived asset is not recoverable, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset. The Company recognized impairment losses of $335,668 and $0 for the periods ending May 31, 2017 and August 31, 2016, respectively.

 

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EYE ON MEDIA NETWORK INC.

Notes to Condensed Financial Statements

For the period ended May 31, 2017

(Unaudited)

 

Impairment of Long- Lived Assets

 

The Company reviews and evaluates long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. The assets are subject to impairment consideration under FASB ASC 360-10-35-17 if events or circumstances indicate that their carrying amount might not be recoverable. When the Company determines that an impairment analysis should be done, the analysis will be performed using the rules of FASB ASC 930-360-35, Asset Impairment, and 360-0 through 15-5, Impairment or Disposal of Long- Lived Assets.

 

Deferred Income Taxes and Valuation Allowance

 

The Company accounts for income taxes under ASC 740, Income Taxes. Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. No deferred tax assets or liabilities were recognized as of May 31, 2017.

 

Net Income (Loss) Per Common Share

 

Net income (loss) per share is calculated in accordance with ASC 260, “Earnings Per Share.” The weighted-average number of common shares outstanding during each period is used to compute basic earning or loss per share. Diluted earnings or loss per share is computed using the weighted average number of shares and diluted potential common shares outstanding. Dilutive potential common shares are additional common shares assumed to be exercised.

 

Basic net income (loss) per common share is based on the weighted average number of shares of common stock outstanding at May 31, 2017. At May 31, 2017, there were 50,000,000 of preferred convertible shares that were not included because they would be anti-dilutive.

 

Share-Based Expense

 

ASC 718, Compensation – Stock Compensation, prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).

 

The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, Equity – Based Payments to Non-Employees. Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable:(a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.

 

Share-based expense for the nine months ended May 31, 2017 and 2016 was $0 and $311,000 respectively.

 

Recent Accounting Pronouncements

 

From time to time, new accounting pronouncements are issued that we adopt as of the specified effective date. We believe that the impact of recently issued standards that are not yet effective may have an impact on our results of operations and financial statements.

 

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EYE ON MEDIA NETWORK INC.

Notes to Condensed Financial Statements

For the period ended May 31, 2017

(Unaudited)

 

ASU Update 2014-09 Revenue from Contracts with Customers (Topic 606) issued May 28, 2014 by FASB and IASB converged guidance on recognizing revenue in contracts with customers on an effective date after December 31, 2017 will be evaluated as to impact and implemented accordingly.

 

ASU Update 2014-15 Presentation of Financial Statements – Going Concern (Sub Topic 205-40) issued August 27, 2014 by FASB defines management’s responsibility to evaluate whether there is a substantial doubt about an organization’s ability to continue as a going concern. The additional disclosure required is effective after December 31, 2016 and will be evaluated as to impact and implemented accordingly.

 

NOTE 4: PROPERTY, PLANT AND EQUIPMENT

 

The Company has capitalized costs for property, plant and equipment as follows:

 

		May 31, 2017				August 31, 2016
Production equipment		$	1,715,480			$	1,715,480
Office furniture and equipment			7,899				7,899
Leasehold improvements			34,321				34,321
Vehicles			248,995				324,104
			2,006,695				2,081,804
Accumulated depreciation			1,593,802				1,090,118
		$	412,893			$	991,686

 

Depreciation for the nine months ended May 31, 2017 and 2016 was $243,125, and $261,600, respectively. Depreciation for the three months ended May 31, 2017 and 2016 was $81,042 and $84,797 respectively.

 

Impairment of long-lived assets

 

The Company had tested the four asset groups and determined that impairment indicators were present for the production equipment group, specifically for software, server and vehicle components. As a result, software, server and vehicle were written down to their estimated fair value of $241,656, $97,758 and $55,301, respectively; resulting in an impairment charge of $335,668 for the period ending May 31, 2017.

 

NOTE 5: INTANGIBLE ASSETS

 

The Company has applied the provisions of ASC topic 350 – Intangible – goodwill and other, in accounting for its intangible assets. Intangible assets are being amortized on a straight-line method on the basis of a useful life of 5 to 17 years. The balance at May 31, 2017 and August 31, 2016 was $30,300 and $0, respectively.

  

		May 31, 2017				August 31, 2017
Software development
Gross Carrying Value		$	30,300			$	---
Accumulated Amortization			---				---
		$	30,000			$	---

 

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EYE ON MEDIA NETWORK INC.

Notes to Condensed Financial Statements

For the period ended May 31, 2017

(Unaudited)

 

NOTE 6: ACCOUNTS PAYABLE

 

At May 31, 2017 and August 31, 2016, accounts payable was $4,312 and $6,625, respectively.

 

NOTE 7:  CONVERTIBLE NOTE PAYABLE

 

AUCTUS FUND, LLC

 

On March 22, 2017, the Company executed a convertible promissory note with Auctus Fund, LLC. The note carries a principal balance of $80,000 together with an interest rate of twelve percent (12%) per annum and a maturity date of December 22, 2017. All payments due hereunder (to the extent not converted into common stock, $0.001 par value per share in accordance with the terms of the note agreement shall be made in lawful money of the United States of America. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty-four percent (24%) per annum from the due date thereof until the same is paid.

 

The holder shall have the right from time to time, and at any time during the period beginning on the date which is one hundred eighty-one (181) days following the date of this note, to convert all or any part of the outstanding and unpaid principal amount into Common Stock. The conversion shall equal sixty-one percent (61%) of the average of the lowest two (2) trading prices for the Common Stock during the previous twenty-five (25) trading period ending on the latest complete trading day prior to the conversion date, representing a discount rate of forty-five percent (45%).

 

EMA FINANCIAL, LLC

 

On March 22, 2017, the Company executed a convertible promissory note with EMA Financial, LLC. The note carries a principal balance of $85,000 together with an interest rate of ten percent (10%) per annum and a maturity date of March 22, 2018. All payments due hereunder (to the extent not converted into common stock, $0.001 par value per share in accordance with the terms of the note agreement shall be made in lawful money of the United States of America. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty-four percent (24%) per annum from the due date thereof until the same is paid.

 

The holder shall have the right, in its sole and absolute discretion, at any time from time to time, to convert all or any part of the outstanding amount due under this note. The conversion shall equal sixty percent (60%) of the average of the lowest two (2) trading prices for the Common Stock during the previous twenty (20) trading period ending on the latest complete trading day prior to the conversion date, representing a discount rate of forty percent (40%).

 

POWER UP LENDING GROUP

 

On April 20, 2017, The Company executed a convertible promissory note with Power Up Lending Group, Ltd. The note carries a principal balance of $30,000 together with an interest rate of twelve percent (12%) per annum and a maturity date of January 30, 2018. All payments due hereunder (to the extent not converted into common stock, $0.001 par value per share in accordance with the terms of the note agreement shall be made in lawful money of the United States of America. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date thereof until the same is paid.

 

The holder shall have the right from time to time, and at any time during the period beginning on the date which is one hundred eighty (180) days following the date of this note, to convert all or any part of the outstanding and unpaid principal amount into Common Stock. The conversion shall equal fify-five percent (55%) of the average of the lowest two (2) trading prices for the Common Stock during the twenty (20) day trading period ending on the latest complete trading day prior to the conversion date, representing a discount rate of forty-five percent (45%).

 

The Company accounts for this beneficial conversion feature as a derivative under ASC 815-10-15-83 and valued separately from the note at fair value. The beneficial conversion feature of the note is revalued at each subsequent reporting date at fair value and any changes in fair value will result in a gain or loss in those periods. At May 31, 2017, the fair value of beneficial conversion feature was $605,841.

 

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EYE ON MEDIA NETWORK INC.

Notes to Condensed Financial Statements

For the period ended May 31, 2017

(Unaudited)

 

Convertible Notes payable consisted of the following:

 

		May 31, 2017				August 31, 2016
Convertible notes payable:		$	195,000			$	-0-
Debt discount			(124,172	)
Convertible notes payable net of debt discount		$	70,828			$	-0-
Accrued interest			3,876				-0-
Current portion of convertible note payable and interest		$	74,704			$	-0-

 

NOTE 8: EQUITY

 

Preferred Stock

 

The Company has been authorized to issue 500,000,000 shares of $.001 par value Preferred Stock. The Board of Directors is expressly vested with the authority to divide any or all of the Preferred Stock into series and to fix and determine the relative rights and preferences of the shares of each series so established, within certain guidelines established in the Articles of Incorporation. As of May 31, 2017 and August 31, 2016 there are 50,000,000 and 50,000,000 shares of Series “A” Convertible Preferred Stock issued and outstanding, respectively.

 

Common Stock

 

The Company has been authorized to issue 750,000,000 shares of common stock, $.001 par value. Each share of issued and outstanding common stock shall entitle the holder thereof to fully participate in all shareholder meetings, to cast one vote on each matter with respect to which shareholders have the right to vote, and to share ratably in all dividends and other distributions declared and paid with respect to common stock, as well as in the net assets of the corporation upon liquidation or dissolution.

 

On September 3, 2015, the Company sold 10,000 shares of common stock to a non-related party in exchange for cash proceeds of $5,000. The shares were issued at $0.50 per share.

 

On September 18, 2015, the Company sold 50,000 shares of common stock to a non-related party in exchange for cash proceeds of $50,000. The shares were issued at $1.00 per share.

 

On October 2, 2015, the Company sold 125,000 shares of common stock to a non-related party in exchange for cash proceeds of $50,000. The shares were issued at $0.40 per share.

 

On January 1, 2016, the Company issued 286,970 shares of common stock to non- related parties in exchange for services. The shares were issued at $1.08 per share and valued at approximately $311,000.

 

On July 13, 2016, the Company sold 20,000 shares of common stock to a non-related party in exchange for cash proceeds of $5,000. The shares were issued at $0.25 per share.

 

On August 5, 2016, the Company issued 94,481 shares of common stock to non- related parties in exchange for services. The shares were issued at approximately $0.59 per share and valued at approximately $55,578.

 

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EYE ON MEDIA NETWORK INC.

Notes to Condensed Financial Statements

For the period ended May 31, 2017

(Unaudited)

 

On January 27, 2017, the Company sold 62,500 shares of common stock to a non-related party in exchange for cash proceeds of $2,500. The shares were issued at $0.04 per share.

 

On February 6, 2017, the Company sold 150,000 shares of common stock to a non-related party in exchange for cash proceeds of $10,000. The shares were issued at $0.066 per share.

 

As of May 31, 2017, there are 28,789,451 shares of common stock issued and outstanding.

 

Options and Warrants

 

There are no warrants or options outstanding to acquire any additional shares of common stock of the Company as of May 31, 2017.

 

NOTE 9: RELATED PARTY TRANSACTION

 

The Company has been provided office space by a member of the Board of Directors at no cost. The management determined that such cost is nominal and did not recognize the rent expense in its financial statements.

 

The above amount is not necessarily indicative of the amount that would have been incurred had a comparable transaction been entered into with independent parties.

 

NOTE 10: COMMITMENTS AND CONTINGENCIES

 

From time to time the Company may be a party to litigation matters involving claims against the Company. Management believes that there are no current matters that would have a material effect on the Company’s financial position or results of operations.

 

NOTE 11: SUBSEQUENT EVENTS

 

Management has evaluated subsequent events through the date the financial statements were available to be issued, considered to be the date of filing with the Securities and Exchange Commission. Based on our evaluation no events have occurred requiring adjustment to or disclosure in the financial statements.

 

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

 

Note Regarding Forward Looking Statements.

 

This quarterly report on Form 10-Q of Eye On Media Network, Inc. for the period ended May 31, 2017 contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”), which are intended to be covered by the safe harbors created thereby. To the extent that such statements are not recitations of historical fact, such statements constitute forward-looking statements which, by definition, involve risks and uncertainties. In particular, statements under the Sections: Description of Business, Management’s Discussion and Analysis of Financial Condition and Results of Operations contain forward-looking statements. Where, in any forward-looking statement, the Company expresses an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement of expectation or belief will result or be achieved or accomplished.

 

The following are factors that could cause actual results or events to differ materially from those anticipated, and include but are not limited to: general economic, financial and business conditions; changes in and compliance with governmental regulations; changes in tax laws; and the costs and effects of legal proceedings.

 

You should not rely on forward-looking statements in this quarterly report. This quarterly report contains forward-looking statements that involve risks and uncertainties. We use words such as “anticipates,” “believes,” “plans,” “expects,” “future,” “intends,” and similar expressions to identify these forward-looking statements. Prospective investors should not place undue reliance on these forward-looking statements, which apply only as of the date of this report. Our actual results could differ materially from those anticipated in these forward-looking statements for many reasons, including the risks faced by Eye On Media Network, Inc. Financial information provided in this Form 10-Q, for periods subsequent to August 31, 2016, is preliminary and remains subject to audit. As such, this information is not final or complete, and remains subject to change, possibly materially.

 

Our Business Overview.

 

Eye On Media Network, Inc. is a company that was incorporated in the State of Florida on August 2, 2013. Since inception on August 2, 2013, the Company has been engaged in organizational efforts and obtaining initial financing. The Company was formed as a vehicle to pursue a business combination with an existing company. The Company selected August 31 as its fiscal year end. On September 3, 2013 we filed a Registration Statement on Form 10-12G with the United States Securities and Exchange Commission. We are a reporting company and file all reports required under sections 13 and 15d of the Securities Exchange Act of 1934. On January 22, 2014 we entered into share exchange agreements with the shareholders of Eye On South Florida, Inc. (“EOSF”), pursuant to which we acquired all of the issued and outstanding capital stock of EOSF. EOSF discontinued operation in January 2015.

 

Implications of Being an Emerging Growth Company

 

We qualify as an emerging growth company as that term is used in the Jumpstart Our Business Startups Act. An emerging growth company may take advantage of specified reduced reporting and other burdens that are otherwise applicable generally to public companies. These provisions included:

 

	(i)	A requirement to have only two years of audited financial statements and only two years of related Management Discussion & Analysis disclosures;
	(ii)	Exemption from the auditor attestation requirement in the assessment of the emerging growth company’s internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002;
	(iii)	Reduced disclosure about the emerging growth company’s executive compensation arrangements; and
	(iv)	No non-binding advisory votes on executive compensation or golden parachute arrangements.

 

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We have already taken advantage of these reduced reporting burdens, which are also available to us as a smaller reporting company as defined under Rule 12b-2of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the “Securities Act”) for complying with new or revised accounting standards. We are choosing to utilize the extended transition period for complying with new or revised accounting standards under Section 102(b)(2) of the JOBS Act. This election allows our Company to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates.

 

We could remain an emerging growth company for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our annual gross revenues exceed $1 billion, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (iii) which issued more than $1 billion in non-convertible debt during the preceding three-year period.

 

Business of Issuer

 

The Company was organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation. On January 22, 2014, the Company entered into Share Exchange Agreements (collectively referred to as the “Exchange Agreement”) with the shareholders (“Shareholders”) of Eye On South Florida, Inc. Pursuant to the Exchange Agreement, the Shareholders agreed to exchange each of their shares of EOSF common stock (the “Target Shares”) for one (1) share of restricted common stock of the Company. The Shareholders collectively held a total of 24,725,000 Target Shares. The Shareholders are all friends, business associates or family members of our sole officer and director, Jack Namer. Each Shareholder is a sophisticated investor and except as otherwise designated, was a founding member or vendor of EOSF. Our principal business activities are now conducted through our operation of Eye on Media Network, Inc.

 

Consideration for the Exchange Agreement consisted of one share of restricted common stock of the Company for each Target Share tendered by the Shareholders in the exchange. A total of 24,725,000 shares of restricted Company common stock were issued to forty-three (43) Shareholders for the Target Shares. The receipt of the Target Shares by the Company was determined by the Company Board of Directors to constitute adequate consideration for issuance of the Company common stock as a result of the value of the assets of EOSF. Prior to the execution of the Exchange Agreement there were three million (3,000,000) shares or our common stock issued and outstanding. Upon completion of the transaction involving the Exchange Agreement, there were 27,725,000 shares of our common stock issued and outstanding. The acquisition was accounted for by the Company as a reverse merger wherein an operating, private company (Eye on South Florida, Inc.) was acquired by the Registrant.

 

Eye on Media Network, Inc. (“EOMN” or the Company) was incorporated in Florida on August 2, 2013. EOMN is actively engaged in the acquisition, development, production and distribution of television and multi-media programming content.

 

EOMN is generating revenue from banner advertisements on our website (www.eyeonmeidanetwork.com), commercial productions, event planners, corporate videos, infomercials, public announcements, pay-per-view live broadcasted transmissions and advertisers, desiring to promote their productions, events and brands alongside the various distribution mediums. In addition, the Company is generating revenue from other production companies and/or television networks that request on-site filming and/or our original feeds with the use of our communication technology and equipment. EOMN has been assisting and providing valuable airtime pro-bono to non-profit organizations with sponsored ads, in order to promote their fund-raising events for important causes in the community. Some of our clients currently include Hard Rock Hotel & Casino, AutoNation, Florida Metro Rail, Fort Lauderdale Chamber of Commerce, Shino Bay Dermatology, DelVecchio Pizza and Universal Insurance.

 

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EOMN is distributing its content thru the available delivery companies listed below: These statistics are available on Wikipedia and Nielsen ratings.

 

	a.	COMCAST: the largest cable television company in the United States with over 22 million subscribers.
	b.	DIRECT TV, LLC: As of December 2012, DirecTV had 35.56 million subscribers.
	c.	DISH TV: As of October 2012, Dish TV had 13 million subscribers.
	d.	Roku network on March 5 2013, announced 5 million subscribers.

 

These distribution delivery companies do not include the international markets of China, South America and Africa, which we intend to target for additional distribution of our content.

 

Eye on Media Network, Inc. is a fully operational television network appearing over the air on Channel 16 Florida and widely viewed on the internet and all mobile devices. The viewing area of Channel 16 extends from Vero Beach, Florida through West Palm Beach, Fort Lauderdale, Miami to Key West and west Martin County Florida which comprises approximately 2,800,000 households. We also distribute streaming content separately on the internet through our website www.channel16live.com. For example, over the weekend of April 26-27, 2014, we covered the La Martina Miami Beach Polo World Cup. There were seven different advertisers for this event that are paying us for publication of their advertisements. We currently distribute our news and event coverage content to DIRECTV, DISH TV and the Roku network. There is no written agreement with Comcast. As is customary in the industry, our content is sold through a media broker to the above networks. Our independent media buyer/broker is IHN Media Services, LLC of San Antonio, Texas. We have no ownership interest in such company. The agreement for services with IHN Media Services, LLC is verbal. The material terms are that certain services in connection with Company’s planning, preparing and placing of advertising for the Company as follows:

 

	a.	Analyze present and potential television marketing and advertising opportunities; and
	b.	Provide television advertising on all cable carries including, but not limited to, Time Warner, Comcast, Cox, Verizon FIOS, Bright House Cable, Sudden Link, Grande, WOW Cable) with such services to include all broadcast stations as well as all ad-supported cable networks and syndicated programming; and
	c.	Provide all of its services at fair and competitive rates in markets both locally and nationally; and
	d.	Negotiate for appropriate weekly/monthly media schedules at the lowest possible media costs for the Company’s advertising purposes; and.
	e.	Provide Company with written schedules of all media time placements made for the Client indicating the national and local media that is selected, and the dates, days, times, and costs of that media. Company will be given the opportunity to approve all advertising schedules for placement by Agency; and
	f.	Agency will provide the Company with weekly, monthly, or flight invoices for the gross amount of media time that is purchased for the Client’s advertising purposes; and
	g.	Identify and procure clients for Company that seek advertising on its or other media networks and seek commercials that Company can produce for them for a fee.

 

The Company will pay the Agency for its services on a monthly basis. Amounts paid for the Agency’s services will vary from region to region where the Company’s content is distributed.

 

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For a thorough listing of the types of television content we produce visit our website at www.eyeonmedianetwork.com. Selected examples of the types of products and services we provide include:

 

	·	Creation of television news and event coverage content for several charities including non-profit Children’s Diagnostic & Treatment Center in Ft. Lauderdale, Florida, non-profit Go Riverwalk Fort Lauderdale, non-profit Guardian Behavioral Health Foundation in Ft. Lauderdale, Florida, non-profit Seafarer’s House in Ft. Lauderdale, Florida and, non-profit Unicorn Children’s Foundation in Boca Raton, Florida; and
	·	Event coverage of various artistic and entertainment events including the Palm Beach International Film Festival 2014, the Miami International Film Festival 2014, The Sundance Film Festival 2014 in Park City, Utah and Ban Cancer Concert 2014 hosted by the Richard J. Fox Foundation, the Delray Beach Garlic Festival, the 3rd Annual Stone Crab & Seafood Festival-Ft. Lauderdale and, the 26th Annual Las Olas Art Fair – Ft. Lauderdale, and the John Offerdahl Gridiron Grill-Off 2013; and
	·	Creation of documentary series including “Cooking With Fire” (about firefighter cooking contest), series on human trafficking with involvement of the Wasie Foundation of Ft. Lauderdale, and a documentary series regarding Wayne and Marti Huizenga; and
	·	Creation of commercials for various types of businesses including, for example, attorneys, doctors, dermatologists and motor vehicle dealerships.

 

The Bunji™ Product

 

The Company recently announced the availability of Bunji™, a new media platform that changes the way rich media content is delivered. Bunji™ is a 24/7 personalized media engine that allows companies, organizations, film festivals, entertainers, individuals — anyone — the opportunity to have a self-branded online digital media and broadcasting presence with their own customized marketing and promotion channel.

 

Bunji™ is a turnkey, customizable and branded media platform that allows anyone to have their own marketing and promotion channel. It eliminates media industry gatekeepers. A prospective user’s own original content, supplemented with Eye On Media’s substantial library of material, creates a robust presence for any company, organization or individual. And because it’s ad-based, using the Bunji™ platform has the potential to enhance an organization’s revenue.

 

For a small monthly fee, Bunji™ allows users to establish their own channel — available publicly or as an in-house product, that has the ability to livestream content, upload video and music, sync all social media content and/or download content from multiple media libraries to curate their channel to their specific audience. Users can also schedule delivery of content quickly and easily.

 

Our research underscores the steady trend that internet TV viewing is dramatically rising; particularly among young people. The Bunji™ platform aggregates all types of media in one expandable platform, so users won’t need to look elsewhere for content. Bunji™ also provides the added benefit of earning revenue for original content creation and audience growth. In addition, these multi-level marketing opportunities will be targeted to both local and national audiences. With more than 180 million households and the backing of Eye On Media Network, Bunji™ gives potential advertisers the trust and confidence of an established company and proof of distribution.

 

Plan of Operation

 

Our plan of operation for the next twelve months will be to expand our client base. As we continue to grow we will need to raise additional funds. We do anticipate obtaining additional financing to fund operations through common stock offerings, to the extent available, or to obtain additional financing to the extent necessary to augment our working capital. We intend to continue to use the income from our current clients to continue to meet our operating expenses. We do not have need for the purchase of any property or equipment at this time. We will not have any significant changes in the current number of employees.

 

Our director has verbally agreed to continue to fund our operations as needed over the next 12 months until cash flows are sufficient to sustain operations. Our Plan of Operation for the next twelve months is to raise capital to continue to expand our operations. Although we are not presently engaged in any capital raising activities, we anticipate that we may engage in one or more private offering of our company’s securities after the completion of this offering. We would most likely rely upon the transaction exemptions from registration provided by Regulation D, Rule 506 or conduct another private offering under Section 4(2) of the Securities Act of 1933. See “Note 2 – Going Concern” in our financial statements for additional information as to the possibility that we may not be able to continue as a “going concern.”

 

While a strategic and wisely executed marketing campaign is key to expanding our customer base; providing new, cutting-edge, innovative strategies developed and implemented for our clients, will provide a solid platform upon which our operations will continue to grow and deliver long-term success. There is no guarantee that we will be able to fund the Company’s expenses out of operations. In that case our CEO has agreed to fund the projects. We also will most likely rely upon the transaction exemptions from registration provided by Regulation D, Rule 506 or conduct another private offering under Section 4(2) of the Securities Act of 1933.

 

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Results of Operations for the three months ended May 31, 2017 and 2016

 

Revenues.

 

Total Revenue. Total revenues for the three months ended May 31, 2017 and 2016 were $11,300 and $3,700, respectively. Revenues were the results of operations.

 

Expenses.

 

Total Operating Expenses. Total operating expenses for the three months ended May 31, 2017 and 2016 were $153,768 and $102,272, respectively. Total operating expenses included contractor costs of $325 and $2,681, respectively; professional fees of $49,965 and $4,733, respectively; general and administrative of $22,436 and $10,060, respectively and depreciation of $81,042 and $84,798, respectively. Contractor cost decreased by approximately 87%. The primary reason for the decrease was due to a decline in the number of media events the Company participated in and the Company being more proficient in their editing and production process. Professional fees increased by approximately 955%. This increase is directly related to operations. General and administrative fees increased by approximately 123%. This increase is the result of production cost directly related to operations.

 

Other Income (Expenses). Other income (expenses) for the three months ended May 31, 2017 and 2016 included interest expense of ($3,876) and $0, respectively; interest expense related to derivative liability of ($70,828) and $0, respectively and change in derivative of ($149,765) and $0, respectively. Other income (expense) increased by 100% due to the convertible debt financing executed during the period ending May 31, 2017.

 

Results of Operations for the nine months ended May 31, 2017 and 2016

 

Revenues.

 

Total Revenue. Total revenues for the nine months ended May 31, 2017 and 2016 were $32,375 and $15,000, respectively. Revenues were the results of operations.

 

Expenses.

 

Total Operating Expenses. Total operating expenses for the nine months ended May 31, 2017 and 2016 were $688,418 and $697,079, respectively. Total operating expenses included contractor costs of $1,775 and $18,841, respectively; stock based compensation of $0 and $311,000, respectively; professional fees of $62,113 and $59,390, respectively; general and administrative of $45,737 and $46,247, respectively; depreciation of $243,125 and $261,601, respectively and impairment of long-lived assets of $335,668 and $0, respectively. Contractor cost decreased by approximately 91%. The primary reason for the decrease was due to a decline in the number of media events the Company participated in and the Company being more proficient in their editing and production process. Stock based compensation decreased by 100%. The reason for the decrease is there was no stock issued for services provided during the period. Impairment of long-lived assets increased by 100%. This increase is due to the annual testing of long-lived assets and recording impairment for two groups of assets, software and server.

 

Other Income (Expenses). Other income (expenses) for the nine months ended May 31, 2017 and 2016 included interest expense of ($3,876) and $0, respectively; interest expense related to derivative liability of ($70,828) and $0, respectively and change in derivative of ($149,765) and $0, respectively. Other income (expense) increased by 100% due to the convertible debt financing executed during the period ending May 31, 2017.

 

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Financial Condition.

 

Total Assets. Total assets at May 31, 2017 and August 31, 2016 were $542,901 and $993,757, respectively. Total assets consist of cash of $99,708 and $2,071, respectively; property and equipment, net of depreciation and impairment in the amount of $412,893 and $991,686, respectively and intangible assets, net of accumulated amortization of $30,300 and $0, respectively. The property and equipment was acquired through the issuance of stock.

 

Total Liabilities. Total liabilities at May 31, 2017 and August 31, 2016 were $684,857 and $6,625, respectively. Total liabilities consist of accounts payable of $4,312 and $6,625, respectively; accrued interest of $3,876 and $0, respectively; convertible note payable of $70,828 and $0, respectively and derivative liability of $605,841 and $0, respectively. .

 

Liquidity and Capital Resources.

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern which contemplates, among other things, the realization of assets and satisfaction of liabilities in the ordinary course of business.

 

The Company sustained a loss for the nine months ended May 31, 2017 of $880,512 as compared to the loss for the nine months ended May 31, 2016 of $682,079. In addition, the Company has an accumulated deficit of $2,856,343 at May 31, 2017. Because of the absence of positive cash flows from operations, the Company will require additional funding for continuing the development and marketing of products. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

We are presently unable to meet our obligations as they come due. At May 31, 2017, we had a working capital deficit of $585,149. Our working capital deficit is due to operations.

 

Net cash used in operating activities for the nine months ended May 31, 2017 and 2016 was ($79,563) and ($105,554), respectively. Net cash used in operating activities is our net loss, less depreciation and amortization, impairment of long-lived assets, beneficial conversion of derivative convertible note and further adjusted by increases and decreases in certain assets and liabilities. Cash for operating activities was provided by operating activities.

 

Net cash used in investing activities for the nine months ended May 31, 2017 and 2016 was ($30,300) and $0, respectively. Net cash used in financing for the nine months ended May 31, 2017 included investment in intangible assets.

 

Net cash provided by financing activities for the nine months ended May 31, 2017 and 2016 was $207,500 and $105,000, respectively. Net cash provided by financing for the nine months ended May 31, 2017 and 2016 included proceeds from the issuance of common stock of $12,500 and $105,000, respectively and proceeds from convertible notes of $195,000 and $0, respectively.

 

We anticipate that our future liquidity requirements will arise from the need to fund our growth from operations, pay current obligations and future capital expenditures. The primary sources of funding for such requirements are expected to be cash generated from operations and raising additional funds from the private sources and/or debt financing. However, we can provide no assurances that we will be able to generate sufficient cash flow from operations and/or obtain additional financing on terms satisfactory to us, if at all, to remain a going concern. Our continuation as a going concern is dependent upon our ability to generate sufficient cash flow to meet our obligations on a timely basis and ultimately to attain profitability. Our Plan of Operation for the next twelve months is to raise capital to continue to expand our operations and to seek merger candidates and/or acquisitions. Although we are not presently engaged in any capital raising activities, we anticipate that we may engage in one or more private offering of our company’s securities. We would most likely rely upon the transaction exemptions from registration provided by Regulation D, Rule 506 or conduct another private offering under Section 4(a)(2) of the Securities Act of 1933. See “Note 2 – Going Concern” in our financial statements for additional information as to the possibility that we may not be able to continue as a “going concern.”

 

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We have no known demands or commitments and are not aware of any events or uncertainties that will result in or that are reasonably likely to materially increase or decrease our current liquidity.

 

We are not aware of any trends or known demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in material increases or decreases in liquidity.

 

We had no material commitments for capital expenditures as of May 31, 2017.

 

Off-Balance Sheet Arrangements.

 

We have made no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

 

We are a Smaller Reporting Company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

 

Item 4. Controls and Procedures.

 

Evaluation of disclosure controls and procedures.

 

The management of the Company is responsible for establishing and maintaining adequate disclosure controls and procedures. The Company’s disclosure controls and procedures is a process designed under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with U.S. generally accepted accounting principles.

 

With respect to the period ending May 31, 2017, under the supervision and with the participation of our management, we conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934.

 

Based upon our evaluation regarding the period ending May 31, 2017, the Company’s management, including its Principal Executive Officer and Principal Financial Officer, has concluded that its disclosure controls and procedures were not effective due to the Company’s limited internal resources and lack of ability to have multiple levels of transaction review. Material weaknesses noted are lack of an audit committee, lack of a majority of outside directors on the board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; and management is dominated by two individuals, without adequate compensating controls. Through the use of external consultants and the review process, management believes that the financial statements and other information presented herewith are materially correct.

 

Changes in internal control over financial reporting

 

We have not made any significant changes to our internal controls subsequent to the Evaluation Date. We have not identified any new significant deficiencies or material weaknesses or other factors that could significantly affect these controls, and therefore, no corrective action was taken. However, see the preceding paragraph which discloses the Company’s inadequate disclosure controls and procedures and material weaknesses.

 

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Part II. Other Information

 

Item 1. Legal Proceedings

 

None.

 

Item 1A. Risk Factors

 

We are a Smaller Reporting Company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

Set forth below is information regarding the issuance and sales of Eye On Media Network, Inc. capital stock without registration during the period covered by this report. No sales involved the use of an underwriter and no commissions were paid in connection with the sale of any securities. The shares of our capital stock were issued pursuant to Section 4(2) of the Securities Act of 1933 and the exempt transaction provisions of applicable state law.

 

On March 8, 2015, the Company issued 40,000 restricted shares of its common stock to Uptick Capital LLC in exchange for strategic planning services, recorded at the fair market value of the share price, in the amount of $60,000.

 

On July 2, 2015, the Company issued 80,000 shares of common stock to a non-related party in exchange for cash proceeds of $20,000. The shares were issued at $0.25 per share.

 

On September 3, 2015, the Company sold 10,000 shares of common stock to a non-related party in exchange for cash proceeds of $5,000. The shares were issued at $0.50 per share.

 

On September 18, 2015, the Company sold 50,000 shares of common stock to a non-related party in exchange for cash proceeds of $50,000. The shares were issued at $1.00 per share.

 

On October 2, 2015, the Company sold 125,000 shares of common stock to a non-related party in exchange for cash proceeds of $50,000. The shares were issued at $0.40 per share.

 

On January 1, 2016, the Company issued 286,970 shares of common stock to non- related parties in exchange for services. The shares were issued at $1.08 per share and valued at approximately $311,000.

 

On January 27, 2017, the Company sold 62,500 shares of common stock to a non-related party in exchange for cash proceeds of $2,500. The shares were issued at $0.04 per share.

 

On February 6, 2017, the Company sold 150,000 shares of common stock to a non-related party in exchange for cash proceeds of $10,000. The shares were issued at $0.066 per share.

 

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosure

 

Not applicable.

 

Item 5. Other Information.

 

None

 

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Item 6. Exhibits

 

Exhibit Number and Description					Location Reference
(a)	Financial Statements				Filed Herewith
(b)	Exhibits required by Item 601, Regulation SB;
	(3.0)	Articles of Incorporation
		(3.1)	Initial Articles of Incorporation filed with Form 10 Registration Statement on September 3, 2013		See Exhibit Key
		(3.2)	Amendment to Articles of Incorporation filed with Form 8-K/A No. 2 on April 11, 2014		See Exhibit Key
		(3.3)	Bylaws filed with Form 10 Registration Statement on September 3, 2013		See Exhibit Key
	(10.0)		Share Exchange Agreement filed With Form 8-K on January 27, 2014		See Exhibit Key
	(11.0)	Statement re: computation of per share Earnings			Note 2 to Financial Stmts.
	(14.0)	Code of Ethics filed with Form 10-Q on January 14, 2014			See Exhibit Key
	(21.0)	List of Subsidiaries Filed with Form 10-K on January 27, 2014			See Exhibit Key
	(31.1)	Certificate of Principal Executive Officer and Principal Financial and Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002			Filed herewith
	(32.1)	Certification of Principal Executive Officer and Principal Financial and Accounting Officer pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002			Filed herewith

 

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(101.INS)		XBRL Instance Document		Filed herewith
(101.SCH)		XBRL Taxonomy Ext. Schema Document		Filed herewith
(101.CAL)		XBRL Taxonomy Ext. Calculation Linkbase Document		Filed herewith
(101.DEF)		XBRL Taxonomy Ext. Definition Linkbase Document		Filed herewith
(101.LAB)		XBRL Taxonomy Ext. Label Linkbase Document		Filed herewith
(101.PRE)		XBRL Taxonomy Ext. Presentation Linkbase Document		Filed herewith

 

Exhibit Key

 

3.1		Incorporated by reference herein to the Company’s Form 10 Registration Statement filed with the Securities and Exchange Commission on September 3, 2013.
3.2		Incorporated by reference herein to the Company’s Form 8-K filed with the Securities and Exchange Commission on April 11, 2014.
3.3		Incorporated by reference herein to the Company’s Form 10 Registration Statement filed with the Securities and Exchange Commission on September 3, 2013.
10.0		Incorporated by reference herein to the Company’s Form 8-K filed with the Securities and Exchange Commission on January 27, 2014.
14.0		Incorporated by reference herein to the Company’s Form 10-Q filed with the Securities and Exchange Commission on January 14, 2014.
21.0		Incorporated by reference herein to the Company’s Form 8-K filed with the Securities and Exchange Commission on January 27, 2014.

 

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SIGNATURES

 

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.

 

	EYE ON MEDIA NETWORK, INC.
Date: July 6, 2017	By:	/s/ Jack Namer
		Jack Namer
		Principal Executive Officer Principal Financial and Accounting Officer

 

 

 

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