ITEM 1. DESCRIPTION OF BUSINESS
GENERAL INFORMATION
We were incorporated on January 16, 2008 under the laws of the state of Nevada as Plethora Resources Inc. to commence operations in the business of consulting to oil & gas exploration companies interested in obtaining exploration and production licenses at auction for oil and gas properties in Russia. We were unable to fund our intended business and, on May 28, 2009 but effective February 1, 2009, we acquired a wholly owned subsidiary, Sync2 International Ltd, for the assumption of the debts of Sync2 Agency Ltd, a wholly owned subsidiary of Sync2 International Ltd. Sync2 Agency Ltd is an internet marketing and website development company. On May 14, 2009 we changed our name to Sync2 Networks Corp. (the `Company'). On December 15, 2009, the Company shut down the operations of Sync2 Agency Ltd. after incurring substantial operating losses, and subsequently wrote-off the investment in Sync2 Agency Ltd.
We have a total of 150,000,000 authorized common shares with a par value of $0.001 per share. Of these, 103,046,175 common shares were issued and outstanding as of June 30, 2012.
We completed a form S-1 Registration Statement under the Securities Act of 1933 with the U.S. Securities and Exchange Commission registering 34,850,000 shares of our common stock on behalf of our selling shareholders.
BUSINESS DEVELOPMENT
We have sustained losses for the year ended June 30, 2010 of $333,640
Effective February 1, 2009 the Company acquired Sync2 International Ltd, a Malta Corporation ("INTL"). The Company owns all of the shares of INTL. INTL owns all of the shares of Sync2 Agency Ltd ("Agency"), a Canadian company located in Vancouver and specializing in the area of internet marketing and website development, among other things. Under the terms of the acquisition of INTL the Company acquired 100% of the issued and outstanding shares of INTL for the assumption of Cdn$767,333 in debts of Agency.
The Company has never declared bankruptcy, been in receivership, or been involved in any kind of legal proceeding.
At this time the Company, its directors, officers and affiliates have not entered negotiations or discussions with representatives or owners of any other businesses or companies regarding the possibility of an acquisition or merger.
BUSINESS OF ISSUER
The Company engages in the business of acquiring and developing internet marketing and web site development entities and/or their individual software programs to assist third-party clients in marketing their products and in maximizing the use of the internet to achieve those third-party clients' ultimate business objectives.
Prior to the Company's purchase of assets for the assumption of debts of Cdn$767,333 it had limited operations in this area and has since abandoned its original business endeavors.
More recently the Sync2 Group has expanded its on-line business consulting activities, by entering into a strategic alliance with prominent systems and infrastructure providers such as "IBM" (attaining IBM Business Partner Status), "Apple" (a part of the I-phone Developer Program), and more complex tri-partite business arrangements with Telus Communications Company and Cisco Systems developing specialized industry-specific software applications.
This new orientation compliments its existing on-line asset management, on-going maintenance and support endeavors, and on-line systems analysis business, permitting Sync2 to broaden its business activities throughout Canada and the rest of the world, in turn creating the potential for the development of a more unique array of products and services in an industry with growth potential.
PATENTS AND TRADE MARKS
To date there are no aspects of our business plan that require a patent or trademark or product licence. We have not entered into any vendor agreements or contracts that give or could give rise to any obligations or concessions for patents or trademarks.
RESEARCH AND DEVELOPMENT
During the last three fiscal years no time was spent on specialized research and development activities and has no plans are contemplated in the future .
EMPLOYEES AND EMPLOYMENT AGREEMENTS
As of June 30, 2012, we have no employees but have a liability for unpaid wages and severance pay allowance of approximately $50,000 which is reflected in the June 30, 2012 Financial Statements. Our officers and directors will handle our administrative duties.
REPORTS TO SECURITY HOLDERS
Sync2 will voluntarily make available an annual report including annual financial statements on Form 10K to security holders.We will file the necessary reports with the SEC pursuant to the Exchange Act, including but not limited to, reguired reports of material changes in the Company's business of Form 8-K.annual reports of Form 10-K and quarterly reports on FORM 10-Q.
The SEC maintains an Internet site that contains reports, proxy and information statements and other electronic information regarding SYNC2 and filed at hhtp://www.sec.gov.
ITEM 2.
ITEM 2. DESCRIPTION OF PROPERTY
Sync2 Network's principal place of business and corporate offices is located at 5836 South Pecos Road, Suite 112, Las Vegas, NV 89120 and our phone number is 778-707-3625.
We do not have any investments or interests in any real estate. We do not invest in real estate mortgages, nor do we invest in securities of, or interests in, persons primarily engaged in real estate activities or any other securities.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
We are not currently involved in any legal proceedings nor do we have any knowledge of any threatened litigation.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
No change since previous filing.
The Company has filed with the SEC an S-1 registration statement July 25, 2008 and quarterly reports (form 10Q) for September and December 2008 and for March, 2009. This is the Company's first annual report (form 10K).
ITEM 5.
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES
SECURITIES
Our common stock is currently quoted on the OTC Bulletin Board under the symbol "SYNW".
As of October 28, 2012 we have 103,465.275 shares of $0.001 par value common stock issued and outstanding held by approximately 29 shareholders of record.
The stock transfer agent for our securities is: Island Stock Transfer Company 100 Second Avenue South, Suite 705S, St. Petersburg, Florida 33701 Tel: (727) 289-0010
DIVIDENDS
On May 14, 2009 the Company forward split its issued shares of common stock on the basis of 17 new shares for 1 old share by the issuance of 80,800,000 shares pro rata to its existing shareholders as a stock dividend. At the same time the Company changed its name from Plethora Resources Inc. to Sync2 Networks Corp and increased its authorized share capital to 150,000,000 common shares.
There are no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends. The Nevada Statutes, however, do prohibit us from declaring cash dividends where, after giving effect to the distribution of the dividend:
1. we would not be able to pay our debts as they become due in the usual course of business; or
2. our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution.
RECENT SALES OF UNREGISTERED SECURITIES
There were 17,196,175 share issuances during the year ended June 30, 2010 as shares for debt for cash consideration of $17,196 and settlement of a debt of $670,651.
On April 15, 2008 the Company issued 51,000,000 shares of common stock for cash of $3,000 and on April 24, 2008 the Company issued 22,100,000 shares of common stock for cash of $6,800 and additionally, on May 28, 2008 the Company issued 12,750,000 shares of common stock for cash of $15,000. No discounts or commissions were paid in connection with these offerings. These offerings were undertaken pursuant to the limited offering exemption from registration under the Securities Act of 1933 as provided under Regulation D and Regulation S as promulgated by the U.S. Securities and Exchange Commission. The offering was made to "accredited investors." As a result, offers were made only to persons that the Company believed, and had reasonable grounds to believe, either (a) have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of the proposed investment, or (b) can bear the economic risks of the proposed investment (that is, at the time of investment, could afford a complete loss) and (c) were non US residents.
ITEM 7.
ITEM 7. PLAN OF OPERATION
RESULTS OF OPERATIONS
We have generated $520,572 in revenues since inception ($nil for the period from inception January 16, 2008 to June 30, 2008) and have incurred $2,136,106 in expenses since inception through June 30, 2012.
The following table provides selected financial data about our company for the year ended June 30, 2012.
Balance Sheet Data: June 30, 2012 June 30, 2010 ------------------- ------------- ------------- Cash $ 0 $ 0 Total assets $ 0 $ 0 Total liabilities $ 1,120,982 $ 1,073,877 Shareholders' equity (deficit) $(2,119,662) $(1,750,022)
PLAN OF OPERATION
Statements contained herein which are not historical facts are forward-looking statements as that term is defined by the Private Securities Litigation Reform Act of 1995. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, forward-looking statements are subject to risks and uncertainties that could cause actual results to differ from those projected. The Company cautions investors that any forward-looking statements made by the Company are not guarantees of future performance and actual results may differ materially from those in the forward-looking statements. Such risks and uncertainties include, without limitation: established competitors who have substantially greater financial resources and operating histories, regulatory delays or denials, ability to compete as a start-up company in a highly competitive market, and access to sources of capital.
The following discussion and analysis should be read in conjunction with our financial statements and notes thereto included elsewhere in this Form 10-K. With the exception of the historical information contained herein, the discussion in this Form 10-K contains certain forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. The cautionary statements made in this Form 10-K should be read as being applicable to all related forward-looking statements wherever they appear in this Form 10-K.
The Company's actual results could differ materially from those discussed here.
Over the course of the next twelve months Sync2 intends to continue with its plan of business development and operations to assist companies, organizations and individuals (collectively the "clients") in establishing, building, maintaining and marketing the clients' online businesses.
If the Company is unable to meet its needs for cash it will be unable to continue, develop, or expand its operations.
While the officers and directors have generally indicated a willingness to provide services and financial contributions if necessary, there are presently no agreements, arrangements, commitments, or specific understandings, either verbally or in writing, between the officers and directors and Sync2.
If we are unable to pay for our expenses because we do not have enough money, we may be forced to cease active operations until we are able to secure additional financing. If we cannot or do not secure additional financing we may be forced to cease active business operations.
LIMITED OPERATING HISTORY; NEED FOR ADDITIONAL CAPITAL
There is no historical financial information about us upon which to base an evaluation of our performance. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to price and cost increases in services, supplies, and equipment.
We have no assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional dilution to existing shareholders.
LIQUIDITY AND CAPITAL RESOURCES
We cannot guarantee that we will have enough funds to forward our business plan. If that is the case, we will attempt to raise additional money by way of loans from officers of the Company, loans from third-parties, and/or sale(s) of additional securities. Additional equity financing would result in additional dilution to our existing shareholders.
At the present time, we have not made any arrangements to raise additional cash. If we need additional cash and cannot raise it, we will either have to suspend operations until we do raise the cash, or cease operations entirely. Other than as described in this paragraph, we have no other financing plans.
Since inception of the Company on January 16, 2008 to June 30, 2010 the Company has issued shares for cash as follows:
* On April 15, 2010 the Company issued 17,196,175 shares of common stock for cash of $17,916 and the forgiveness of debt of $670,651
* On April 15, 2008 the Company issued 51,000,000 shares of common stock for cash of $3,000 and
* On April 24, 2008 the Company issued 22,100,000 shares of common stock for cash of $6,800 and
* On May 28, 2008 the Company issued 12,750,000 shares of common stock for cash of $15,000.
APPLICATION OF CRITICAL ACCOUNTING POLICIES
Our financial statements have been prepared on a going concern basis. We have accumulated a deficit from operations of $ 2,119,662 as of June 30, 2012. Our ability to continue as a going concern is dependent upon our ability to generate profitable operations in the future and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. The outcome of these matters cannot be predicted with any certainty at this time. We have historically satisfied our working capital needs primarily by sales of securities and by loans from investors.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The company had no independent accountant review the financials for this period, in accordance with Rule 3-11 of Regulation S-X
Sync2 Networks Corp June 30, 2012
BALANCE SHEET
STATEMENTS OF OPERATIONS
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
STATEMENTS OF CASH FLOWS
NOTES TO THE FINANCIAL STATEMENTS
Sync2 Networks Corp (formerly Plethora Resources, Inc.) Balance Sheet June 30, 2012 (Unaudited)
The accompanying notes are an integral part of these financial statements
Sync2 Networks Corp (formerly Plethora Resources, Inc.) (A Development Stage Company) Statements of Operations for the Year Ended June 30, 2010 and Period Ended June 30, 2009 and for the period from January 16, 2008 (date of inception) to June 30, 2012 (Unaudited)
The accompanying notes are an integral part of these financial statements
Sync2 Networks Corp (formerly Plethora Resources, Inc.) (A Development Stage Company) Statements of Stockholders' Equity (Deficit) From Inception January 16, 2008 to June 30, 2012 (Unaudited)
The accompanying notes are an integral part of these financial statements
Sync2 Networks Corp (formerly Plethora Resources, Inc.) (A Development Stage Company) Statements of Cash Flows For the Year Ended June 30, 2010 and for the Year Ended June 30, 2009 and for the period from January 16, 2008 (date of inception) to June 30, 2012 (Unaudited)
The accompanying notes are an integral part of these financial statements
Sync2 Networks Corp (formerly Plethora Resources, Inc.) (A Development Stage Company) Notes to the Financial Statements June 30, 2010 (Unaudited)
NOTE 1 - BASIS OF PRESENTATION AND NATURE OF BUSINESS AND ORGANIZATION
Sync2 Networks Corp (the "Company") was formed on January 16, 2008 in the State of Nevada under the name Plethora Resources, Inc. as a development stage company. The Company was originally organized to engage in the business of consulting to oil & gas exploration companies interested in obtaining exploration and production licenses at auction for oil and gas properties in Russia.
On June 25, 2009 the Company purchased the assets and business of Sync2 International Ltd. in exchange for the assumption of all outstanding debts of Sync2 Agency Ltd. ("Agency". Agency is a wholly owned subsidiary of Sync2 International Ltd., a web development and web property management company. Effective May 14, 2009 the Company changed its name to Sync2 Networks Corp. On December 15, 2009, the Company shut down the operations of Sync2 Agency Ltd after incurring substantial losses.
The Company's business plan is to be an interactive marketing firm that designs, builds, implements and optimizes strategic interactive web networks and internet marketing programs that acquire, convert and retain customers for clients.
The Company is considered to be in the development stage as defined in Statement of Financial Accounting Standards (SFAS) No. 7, "ACCOUNTING AND REPORTING BY DEVELOPMENT STAGE ENTERPRISES". The Company has devoted substantially all of its efforts to business planning and development, as well as allocating a substantial portion of its time and investment in bringing product(s)/services to the market, and the raising of capital.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
START-UP COSTS
In accordance with the American Institute of Certified Public Accountants Statement of Position 98-5, "REPORTING ON THE COSTS OF START-UP ACTIVITIES", the Company expenses all costs incurred in connection with the start-up and organization of the Company.
INCOME TAXES
The Company follows the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for deductible temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
EARNINGS (LOSS) PER SHARE OF COMMON STOCK
Historical net loss per common share is computed using the weighted average number of common shares outstanding. Diluted earnings (loss) per share reflect the potential dilution of securities that could share in the earnings of the Company. Because the Company does not have any potential dilutive securities, the accompanying presentation reflects the basic loss per share calculated as follows:
2012 2010 ------------- -------------
Numerator: Net loss $ (333,640) $ (1,503,519) ------------- ------------- Denominator: Weighted average number of shares issued 103,046,175 103,046,175
Earnings (loss) per share $ (0.00) $ (0.00) ------------- -------------
RECENT ACCOUNTING PRONOUNCEMENTS
In March, 2008, the FASB issued SFAS No. 161, "DISCLOSURES ABOUT DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES", as an amendment of FASB Statement No. 133. SFAS 161 requires entities utilizing derivative instruments to provide qualitative disclosures about their objectives and strategies for using such instruments, as well as details of credit-risk-related contingent features contained within derivatives. SFAS 161 also requires entities to disclose additional information about the amounts and location of derivatives located within the financial statements, how the provisions of SFAS No. 133 have been applied and the impact that hedges have on an entity's financial position, financial performance and cash flows. SFAS No. 161 is effective for fiscal years and interim periods beginning after November 15, 2008. Early application is encouraged. The Company does not have or utilize any derivative instruments and/or hedging activities and therefore SFAS 161 is not expected to have an impact on the Company's financial statements.
RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)
In May 2008, the FASB issued Statement of Financial Accounting Standard ("SFAS") No. 162, "THE HIERARCHY OF GENERALLY ACCEPTED ACCOUNTING PRINCIPLES". SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (GAAP) in the United States. SFAS 162 is effective 60 days following the SEC's approval of the Public Company Accounting Oversight Board amendments to AU Section 411, `The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles'. The Company is currently evaluating the impact of SFAS 162 on its financial statements but does not expect it to have a material effect.
In May 2008, the FASB issued Statement of Financial Accounting Standard ("SFAS") No. 163, "ACCOUNTING FOR FINANCIAL GUARANTEE INSURANCE CONTRACTS - AN INTERPRETATION OF FASB STATEMENT NO. 60" ("SFAS 163"). SFAS 163 interprets Statement 60 and amends existing accounting pronouncements to clarify their application to the financial guarantee insurance contracts included within the scope of that Statement. SFAS 163 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and all interim periods within those fiscal years. As such, the Company is required to adopt these provisions at the beginning of the fiscal year ended June 30, 2010. The Company is currently evaluating the impact of SFAS 162 on its financial statements but does not expect it to have a material effect.
In June 2008, the FASB issued FASB Staff Position EITF 03-6-1, DETERMINING WHETHER INSTRUMENTS GRANTED IN SHARE-BASED PAYMENT TRANSACTIONS ARE PARTICIPATING SECURITIES, ("FSP EITF 03-6-1"). FSP EITF 03-6-1 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting, and therefore need to be included in the computation of earnings per share under the two-class method as described in FASB Statement of Financial Accounting Standards No. 128, "Earnings per Share." FSP EITF 03-6-1 is effective for financial statements issued for fiscal years beginning on or after December 15, 2008 and earlier adoption is prohibited. We are not required to adopt FSP EITF 03-6-1; neither do we believe that FSP EITF 03-6-1 would have a material effect on our consolidated financial position and results of operations if adopted.
In September 2008, the FASB issued exposure drafts that eliminate qualifying special purpose entities from the guidance of SFAS No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities," and FASB Interpretation 46 (revised December 2003), "Consolidation of Variable Interest Entities - an interpretation of ARB No. 51," as well as other modifications. While the proposed revised pronouncements have not been finalized and the proposals are subject to further public comment, the Company anticipates the changes will not have a significant impact on the Company's financial statements. The changes would be effective March 1, 2010, on a prospective basis.
In October 2008, the FASB issued FSP No. FAS 157-3, "Determining the Fair Value of a Financial Asset When the Market for That Asset is Not Active," ("FSP FAS 157-3"), which clarifies application of SFAS 157 in a market that is not active. FSP FAS 157-3 was effective upon issuance, including prior periods for which financial statements have not been issued. The adoption of FSP FAS 157-3 had no impact on the Company's results of operations, financial condition or cash flows.
In December 2008 the FASB issued FSP FAS 140-4 and FIN 46(R)-8, "Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities." This disclosure-only FSP improves the transparency of transfers of financial assets and an enterprise's involvement
RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)
with variable interest entities, including qualifying special-purpose entities. This FSP is effective for the first reporting period (interim or annual) ending after December 15, 2008, with earlier application encouraged. The Company adopted this FSP effective January 1, 2009. The adoption of the FSP had no impact on the Company's results of operations, financial condition or cash flows.
In December 2008 the FASB issued FSP No. FAS 132(R)-1, "Employers' Disclosures about Postretirement Benefit Plan Assets" ("FSP FAS 132(R)-1"). FSP FAS 132(R)-1 requires additional fair value disclosures about employers' pension and postretirement benefit plan assets consistent with guidance contained in SFAS 157. Specifically, employers will be required to disclose information about how investment allocation decisions are made, the fair value of each major category of plan assets, and information about the inputs and valuation techniques used to develop the fair value measurements of plan assets. This FSP is effective for fiscal years ending after December 15, 2009. The Company does not expect the adoption of FSP FAS 132(R)-1 will have a material impact on its financial condition or results of operation.
In April 2009, the FASB issued FSP No. FAS 157-4, "Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly" ("FSP FAS 157-4"). FSP FAS 157-4 provides guidance on estimating fair value when market activity has decreased and on identifying transactions that are not orderly. Additionally, entities are required to disclose in interim and annual periods the inputs and valuation techniques used to measure fair value. This FSP is effective for interim and annual periods ending after June 15, 2009. The Company does not expect the adoption of FSP FAS 157-4 will have a material impact on its financial condition or results of operation.
The implementation of these new standards is not expected to have a material effect on the Company's financial statements.
NOTE 3 - PROVISION FOR INCOME TAXES
Deferred income taxes will be determined using the liability method for the temporary differences between the financial reporting basis and income tax basis of the Company's assets and liabilities. Deferred income taxes will be measured based on the tax rates expected to be in effect when the temporary differences are included in the Company's tax return. Deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases. For the year ended June 30, 2012 the provision for income taxes was $0.00.
NOTE 4 - GOING CONCERN
As shown in the accompanying financial statements, the Company incurred substantial net losses for the year ended June 30, 2012 and has no revenue stream to support itself. This raises doubt about the Company's ability to continue as a going concern.
The Company's future success is dependent upon its ability to raise additional capital to fund its business plan and ultimately to attain profitable operations. There is no guarantee that the Company will be able to raise enough
capital or generate sufficient revenues to sustain its operations. Management believes they can raise the appropriate funds needed to support their business plan.
The financial statements do not include any adjustments relating to the recoverability or classification of recorded assets and liabilities that might result should the Company be unable to continue as a going concern.
NOTE 5 - FIXED ASSETS
2010/2012 Accumulated Cost Amortization Net ---- ------------ --- Computer equipment $ -- $ -- $ -- Leasehold improvements -- -- -- ----- ----- ----- $ -- $ -- $ --
INTANGIBLE ASSET - GOODWILL
Effective February 1, 2009 the Company acquired the equipment and business of eDevlin Architects at a cost of $643,585. Identifiable assets were valued at their book value of $142,088 resulting in an excess cost over book value of $501,497 recorded as goodwill with amortization of $41,791 claimed to June 30, 2009. The goodwill is being amortized over five years and is tested for impairment annually. The Company recorded amortization of $41,791 during the year ended June 30, 2009 (for the five months commencing February 1, 2009). Effective June 30, 2010, the Company had written off this investment.
NOTE 6 - STOCKHOLDERS' EQUITY
COMMON STOCK
On April 15, 2010 the Company issued 17,969,175 shares of common stock for cash of $17,916 and the forgiveness of debt of $670,651 On April 15, 2008 the Company issued 51,000,000 shares of common stock for cash of $3,000; and On April 24, 2008 the Company issued 22,100,000 shares of common stock for cash of $6,800; and On May 28, 2008 the Company issued 12,750,000 shares of common stock for cash of $15,000.
Effective May 14, 2009 the Company forward split its issued shares of common stock on the basis of seventeen new shares for one old share (17:1). All share issuances referred to in these financial statements are post forward split.
NOTE 7 - DUE TO RELATED PARTIES
The Company owes $604,737 to a company with a shareholder who is also a shareholder of the Company. The loan is unsecured, does not bear interest and has no fixed terms of repayment.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
The company had no independent accountant review the financials for this period, in accordance with Rule 3-11 of Regulation S-X
ITEM 9A.
ITEM 9A. CONTROLS AND PROCEDURES
Our management, on behalf of the Company, has considered certain internal control procedures as required by the Sarbanes-Oxley ("SOX") Section 404 A which accomplishes the following:
Internal controls are mechanisms to ensure objectives are achieved and are under the supervision of the Company's Chief Executive Officer, and Chief Financial Officer, being John Moore. Good controls encourage efficiency, compliance with laws and regulations, sound information, and seek to eliminate fraud and abuse.
These control procedures 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.
Internal control is "everything that helps one achieve one's goals - or better still, to deal with the risks that stop one from achieving one's goals."
Internal controls are mechanisms that are there to help the Company manage risks to success. Internal controls is about getting things done (performance) but also about ensuring that they are done properly (integrity) and that this can be demonstrated and reviewed (transparency and accountability).
In other words, control activities are the policies and procedures that help ensure the Company's management directives are carried out. They help ensure that necessary actions are taken to address risks to achievement of the Company's objectives. Control activities occur throughout the Company, at all levels and in all functions. They include a range of activities as diverse as approvals, authorizations, verifications, reconciliations, reviews of operating performance, security of assets and segregation of duties.
As of June 30, 2012, the management of the Company assessed the effectiveness of the Company's internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control--Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") and SEC guidance on conducting such assessments. Management concluded, during the year ended June 30, 2012, internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules. Management realized there are deficiencies in the design or operation of the Company's internal control that adversely affected the Company's internal controls which management considers to be material weaknesses.
In the light of management's review of internal control procedures as they relate to COSO and the SEC the following were identified:
* The Company's Audit Committee does not function as an Audit Committee should since there is a lack of independent directors on the Committee,
* The Company has limited segregation of duties which is not consistent with good internal control procedures.
* The Company does not have a written internal control procedurals manual which outlines the duties and reporting requirements of the Directors and any staff to be hired in the future. This lack of a written internal control procedurals manual does not meet the requirements of the SEC or good internal control.
* There are no effective controls instituted over financial disclosure and the reporting processes.
Management feels the weaknesses identified above, being the latter three, have not had any effect on the financial results of the Company. Management will have to address the lack of independent members on the Audit Committee and identify an "expert" for the Committee to advise other members as to correct accounting and reporting procedures.
The Company and its management will endeavor to correct the above noted weaknesses in internal control once it has adequate funds to do so. By appointing independent members to the Audit Committee and using the services of an expert on the Committee will greatly improve the overall performance of the Audit Committee. With the addition of other Board Members and staff the segregation of duties issue will be address and will no longer be a concern to management. By having a written policy manual outlining the duties of each of the officers and staff of the Company will facilitate better internal control procedures.
Management will continue to monitor and evaluate the effectiveness of the Company's internal controls and procedures and its internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.
ITEM 9A(T). CONTROLS AND PROCEDURES
There were no changes in the Company's internal controls or in other factors that could affect its disclosure controls and procedures subsequent to the Evaluation Date, nor any deficiencies or material weaknesses in such disclosure controls and procedures requiring corrective actions.
ITEM 9B.
ITEM 9B. OTHER INFORMATION
There are no matters required to be reported upon under this Item.
PART III
ITEM 10.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS AND CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Directors are elected by the stockholders to a term of one year and serve until their successor is elected and qualified. Officers are elected by the Board of Directors to a term of one year and serve until their successor is duly elected and qualified, or until they are removed from office. The Board of Directors has no nominating, auditing or compensation committees.
The name, address, age and position of our officers and director is set forth below:
Name and Address Age Position(s) ---------------- --- ----------- John Moore* 55 CEO,CFO, Director
Helen Siwak** 43 (former) CFO, CEO, Director
---------- * John Moore has held the offices/positions since September 23,2009 and is expected to hold said offices/positions until the next annual meeting of our stockholders. ** Helen Siwak held her offices/positions since May 18 2009 and resigned September 23, 2009.
BACKGROUND INFORMATION ABOUT OUR OFFICERS AND DIRECTORS
John Moore has over 30 of experience in finance, business management financial analysis, strategic planning and a strong understanding of computer applications and managing public companies. He has had extensive experience as a CEO, CFO, Controller of both private and public companies both in USA and Canada. He was instrumental in raising $18 million of equity and debt financing. John Moore was the founder and president of Flameret Inc which now is an OTC listed company. He was the CFO/Director of Image Power another OTC listed company. He has been the CFO/Director of Real American Show Down/USA Karaoke Championship. John has also been in numerous start-up companies that required financing one of interest was Rim-Bra Brake System that needed funding to build a manufacturing plant in Port Alberni He has owned his own consulting company since 1983 to provide a broad range of services.
Helen Siwak has over twenty years management experience, with a principal emphasis on the entertainment industry. Ms. Siwak was the founder and President of Realia Music Ltd., an early innovator in the area of the digital production and delivery of music for use in film and television synchronization licensing, and was principally responsible for the development of Realia's delivery software. Prior to her work with Realia, Ms. Siwak worked for a number of years in film, television and music where she was involved in virtually all areas of production and management. Ms. Siwak's corporate work includes having worked with a leading Canadian law firm in the areas of corporate finance and licensing law. Ms. Siwak presently resides in Athens, Greece.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
To our knowledge, during the past five years, no present or former director or executive officer of our company: (1) filed a petition under the federal bankruptcy laws or any state insolvency law, nor had a receiver, fiscal agent or similar officer appointed by a court for the business or present of such a person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer within two years before the time of such filing; (2) was convicted in a criminal proceeding or named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses); (3) was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from or otherwise limiting the following activities:
(i) acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, associated person of any of the foregoing, or as an investment advisor, underwriter, broker or dealer in securities, or as an affiliated person, director of any investment company, or engaging in or continuing any conduct or practice in connection with such activity; (ii) engaging in any type of business practice; (iii) engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of federal or state securities laws or federal commodity laws; (4) was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any federal or state authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described above under this Item, or to be associated with persons engaged in any such activity; (5) was found by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission to have violated any federal or state securities law and the judgment in subsequently reversed, suspended or vacate; (6) was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Because we do not have a class of equity securities registered pursuant to Section 12 of the Exchange Act, our executive officers, directors and persons who beneficially own more than 10% of our common stock are not required to file initial reports of ownership and reports of changes in ownership with the SEC under Section 16(a) of the Exchange Act.
CODE OF ETHICS
We have not adopted a corporate code of ethics.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
---------- ** Helen Siwak held her offices/positions since May 18 2009 and resigned September 23, 2009.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth, as of the date of this report, the total number of shares owned beneficially by each of our directors, officers and key employees, individually and as a group, and the present owners of 5% or more of our total outstanding shares. The stockholders listed below have direct ownership of their shares and possess sole voting and dispositive power with respect to the shares.
Title of Name and address of Amount of Percent of Class beneficial owner beneficial ownership class ----- ---------------- -------------------- -----
Common Artur Etezov* 51,000,000 49.97%
Common All directors and executive officers as a group 51,000,000 49.97%
---------- * Mr. Artur Etezov resigned his positions as officer and director of the Company on May 18, 2009.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None of the following parties has, since our date of incorporation, had any material interest, direct or indirect, in any transaction with us or in any presently proposed transaction that has or will materially affect us:
1. Any of our directors or officers; 2. Any person proposed as a nominee for election as a director; Any person who beneficially owns, directly or indirectly, shares carrying more than 10% of the voting 3. rights attached to our outstanding shares of common stock; 4. Any member of the immediate family of any of the foregoing persons.
ITEM 14.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The company had no independent accountant review the financials for this period, in accordance with Rule 3-11 of Regulation S-X, therefore no fees or services were provided.
PART IV
ITEM 15.
ITEM 15. EXHIBITS
The following exhibits are included with this filing:
3(i) Articles of Incorporation*
3(ii) Bylaws*
31.1 Rule 13a-14(a)/15d-14(a) Certification
31.2 Rule 13a-14(a)/15d-14(a) Certification
32.1 Section 1350 Certification
32.2 Section 1350 Certification
---------- * Included in our SB-2 filing under Commission File Number 333-136134
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
December 6, 2012
By: /s/ John Moore -------------------------------------- John Moore, Chief Executive Officer and acting Chief Financial Officer