WEB NEWS Comments & Business Outlook
In Media Corporation
Condensed Statements of Operations
(Unaudited)
Three months ended
Three months ended
March 31, 2015
March 31, 2014
EXPENSES
General & administrative
$
27,949
$
54,387
Interest and debt interest expense
-
42,163
NET LOSS
$
27,949
$
96,550
Basic (loss) per share *
$
(0.00)
$
(0.00)
Weighted average number of basic common shares outstanding
68,889,932
65,015,902
Management Discussion and Analysis
Through September 2014, we have been focused on developing and refining our IPTV product hardware and operating platform however we have not yet generated any revenues while we have incurred $3,901,870 in expenses through March 31, 2015. In October 2014, the Board suspended further activities in connection with the IPTV business and commenced a search for a business partner who could merge with the Company and contribute a new business plan. On October 28, 2014, the Company filed a Form 8-K announcing that it had signed a non-binding Letter of Intent with Hip Appeal Inc., an apparel company that caters to the fashion conscience, active, on-the-go female. This Letter of Intent provides that the Company will issue forty million (40,000,000) shares of common stock to Mr. Howard Hayes, our director and CEO, for 100 percent of the outstanding shares of Hip Appeal. This transaction will not close until the Company and Hip Appeal reach a definitive agreement on the terms of the merger, which terms have not been reached as at March 31, 2015.
We incurred $27,949 and $54,387 in general administrative expenses for the three months ended March 31, 2015 and 2014, respectively. These costs consisted principally of consulting and professional fees associated with our financial reports and SEC filings. The decrease reflects negotiated changes in the way service providers bill us for services provided in 2015.
Interest and debt discount expense amounted to $0 and $42,163 for the three months ended March 31, 2015 and 2014, respectively. The decrease reflects the pay-off of all convertible debt outstanding prior to the quarter ended March 31, 2015.
Comments & Business Outlook
Year Ended
Year Ended
December 31, 2014
December 31, 2013
EXPENSES
General & administrative
$
99,836
$
450,421
Development expenses
39,900
-
Interest and debt interest expense
39,408
95,864
Revaluation of derivative liability
40,730
(46,943)
NET LOSS
$
219,874
$
499,342
Basic (loss) per share *
$
(0.00)
$
(0.00)
Weighted average number of basic common shares outstanding
67,410,816
58,238,613
Management Discussion and Analysis
Results of Operations
We are a development stage company and we were focused on developing and refining our product hardware and operating platform to reflect market feedback, and building our distribution channels and relationships, however we did not generated any revenues while we have incurred $3,873,921 in expenses since inception through December 31, 2014. During the third quarter, 2013, Numerity, through Nitin Karnik, conducted a six week tour covering target markets in India, China, Indonesia and Malaysia, building relationships with prospective distribution channels, and evaluating the current state of demand for our products. We recognize that in spite of our best efforts, we have not been successful in generating sales revenue to date, and as a result of feedback gained on that trip, and from trade channels we concluded that the business plan was not viable and, in the fourth quarter of 2014, abandoned the business plan.
We have built our business by focusing on outsourcing to an experienced and well established third party provider to reduce the risk of product development problems and delays, market and employee acquisition, and up-front cash flow. This provider has been responsible for designing our products and operating software, QA testing, customer demonstration and evaluation support, as well as market analysis, channel development and sales promotion. They also provide general and operational support, such that we have no full time employees, or full time employee equivalents on our own books.. This provider, Numerity Corporation, is owned and controlled by Mr. Karnick, one of our shareholders, former directors and former CEO, and provided contract executive, administration and business development services (the “Service Agreement”) to us on terms approved by the Board of Directors. Numerity billed us for the actual cost of any goods or services requested by us and provided wholly, exclusively and necessarily for our benefit.
Additionally, in November 2008, we licensed our engineering technology, IP, and set top box designs from Numerity and committed to pay maintenance and royalties of $415,000 per annum. On July 1, 2010, we agreed to amend that licensing agreement to provide a deferral of any further maintenance dues, and an extension of credit until three months after first commercial shipment. One of our shareholders, Guifeng Qui, who owns approximately 13 million shares of restricted common stock, has a controlling interest in the Chinese distributor who we appointed to represent us in developing our business in China.
We have accumulated a deficit of $3.9 million during our development through December 31, 2014. Our ability to emerge from the development stage is dependent upon, among other things, obtaining additional financing to acquire or merge with another business, while continuing to service our current debt obligations and cover our overhead expenses. These factors, among others, raise substantial doubt about our 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 incurred $99,836 and $450,421 in general administrative expenses for the years ended December 31, 2014 and 2013, respectively. These costs consisted of Numerity service fees, sub-contracted general and administrative, and business development expenses, and professional and administrative expenses associated with our financial reports and SEC filings. Effective September 30, 2014, three major service providers and creditors; Numerity Corporation, Mr. Westbrook, former CFO, and Dan Mabey, former director, all agreed to waive all balances due to them for services previously billed. The resulting benefit of $1,086,822 was credited to additional share capital.
As a result of our efforts to limit expenses, we did not incur any direct development expense in the years ended December 31, 2014 and 2013, however , as a result of an impairment review of the movie distribution systems we were developing, we charged $39,900 of impairment write down as development expense in the year ended December 31, 2014.
During the years ended December 31, 2014 and December 31, 2013, we incurred interest and debt discount amortization expenses of $39,408 and $95,864, respectively. This decrease followed the issuance of additional convertible notes during 2013 to fund business development efforts, and their conversion during the first half of 2014.
As a result of a significant reduction in share price in 2013, we re-valued our derivative liability by $46,943. In 2014, following repayment or conversion of all convertible debt, we wrote off the balance of $40,730.
Comments & Business Outlook
In Media Corporation
(A Development Stage Company)
Condensed Statements of Operations
(Unaudited)
Three months ended
Three months ended
Nine months ended
Nine months ended
Inception October 27, 2008 Through
September 30, 2014
September 30, 2013
September 30, 2014
September 30, 2013
September 30, 2014
EXPENSES
General & administrative
$
1,062,111
$
(175,298)
$
984,124
$
(518,639)
(3,033,107)
Development expenses
–
–
–
–
642,250
Interest and debt interest expense
(11,945)
(53,535)
(56,813)
(105,889)
(382,822)
Revaluation of derivative liability
–
37,197
–
46,943
46,943
NET INCOME (LOSS)
$
1,050,166
$
(191,636)
$
927,311
$
(577,585)
(2,726,736)
Basic income (loss) per share *
$
0.02
$
(0.00)
$
0.01
$
(0.01)
Weighted average number of basic common shares outstanding
68,889,932
58,981,868
67,006,843
57,918,463
Management Discussion and Analysis
Operations for the three months ended September 30, 2014
We incurred $($1,062,111) and $175,298 in general administrative expenses for the three months ended September 30, 2014 and 2013, respectively. These costs consisted of general, administration, and business development expenses by Numerity, and professional fees associated with our financial reports and SEC filings amounting to $24,711 for the three months ended September 30, 2014, and $175,298 for the three months ended September 30, 2013. For the three months ended September 30, 2014, the expense was offset by a credit of $1,086,822 representing a negotiated release of certain of the Company’s debts to directors, officers, consultants and vendors.
We did not incur any development expenses in the three months ended September 30, 2014, since our products are now developed and we are directing our limited cash resources to business development and reporting compliance. We entered into a Licensing and Maintenance Agreement with Numerity Corporation in which we committed to pay $415,000 per year in maintenance fees, and intended to amortize the cost over a twelve month period. At various times, as expectations of first commercial shipments were delayed, the maintenance period was extended and terms amended. The amended License and Maintenance Agreement now provides that maintenance charges will be waived until three months after first commercial shipment of licensed IPTV product.
Interest and debt discount expense amounted to $11,945 and $53,535 for the three months ended September 30, 2014 and 2013, respectively.
Acquisition Activity
Item 8.01 Other Events.
On October 28, 2014, the Company and Hip Appeal entered into a non binding Letter of Intent wherein 40,000,000 shall be issued to Howard Hayes for 100 percent of the outstanding shares of Hip Appeal. These shares shall not be issued until and unless the shareholders of the corporation approve increasing the authorized shares of the corporation sufficiently to allow for such issuance.
Hip Appeal, Inc is a new and exciting apparel company that caters to the fashion conscience, active, on the go female.
Located in Carlsbad, one of the many beautiful coastal communities of Southern California and home to many diverse individuals, living healthy active lifestyles; most experiencing the frustration and annoyance of having to hold their valuables while on the go.
Built on a concept that was as simple as our name suggests; create a practical, but modernly fashionable, more Hip more Appealing version of the fanny pack that is comfortable, stylish and yet not embarrassing to those who wear it for support, storage and security.
Comments & Business Outlook
In Media Corporation
(A Development Stage Company)
Condensed Statements of Operations
(Unaudited)
Inception
Three months
Three months
Six months
Six months
October 27, 2008
ended
ended
ended
ended
Through
March 31, 2014
March 31, 2013
June 30, 2014
June 30, 2013
June 30, 2014
EXPENSES
General & administrative
$
6,846
$
170,085
$
61,233
$
343,341
$
2,813,098
Development expenses
-
-
-
-
642,250
Interest and debt interest expense
28,010
28,348
68,193
52,354
370,877
Revaluation of derivative liability
-
-
-
(9,746)
(46,943)
NET LOSS
$
34,856
$
198,433
$
129,426
$
385,949
$
3,779,282
Basic (loss) per share *
$
(0.00)
$
(0.00)
$
(0.00)
$
(0.00)
Weighted average number of basic
common shares outstanding
68,582,789
57,793,004
66,313,410
57,736,456
Management Discussion and Analysis
Operations for the three months ended June 30, 2014
We incurred $6,846 and $170,085 in general administrative expenses for the three months ended June 30, 2014 and 2013, respectively. These costs consisted of general, administration, and business development expenses by Numerity, and professional fees associated with our financial reports and SEC filings. The decrease reflects negotiated changes in the way Numerity bills us for services provided since June 30, 2013 and reduced services from consultants.
We did not incur any development expenses in the three months ended June 30, 2014, since our products are now developed and we are directing our limited cash resources to business development and reporting compliance. We entered into a Licensing and Maintenance Agreement with Numerity Corporation in which we committed to pay $415,000 per year in maintenance fees, and intended to amortize the cost over a twelve month period. At various times, as expectations of first commercial shipments were delayed, the maintenance period was extended and terms amended. The amended License and Maintenance Agreement now provides that maintenance charges will be waived until three months after first commercial shipment of licensed IPTV product.
Interest and debt discount expense amounted to $28,010 and $28,348 for the three months ended June 30, 2014 and 2013, respectively.
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