DiMi Telematics International, Inc.(Formerly First Quantum Ventures, Inc.)(A Development Stage Company)Condensed Consolidated Balance SheetsDiMi Telematics International, Inc. |
(Formerly First Quantum Ventures, Inc.) |
(A Development Stage Company) |
Condensed Consolidated Balance Sheets |
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| | May 31, | | | August 31, | |
| | 2012 | | | 2011 | |
| | (Unaudited) | | | | |
ASSETS | | | | | | |
CURRENT ASSETS | | | | | | |
Cash | | $ | 888,139 | | | $ | 117,382 | |
Total current assets | | | 888,139 | | | | 117,382 | |
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Deposit on iPhone applications | | | 6,000 | | | | - | |
Intellectual property, net | | | 1,872 | | | | 1,971 | |
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Total Assets | | $ | 896,011 | | | $ | 119,353 | |
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LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | |
CURRENT LIABILITIES | | | | | | | | |
Accounts payable and accrued liabilities | | $ | 14,773 | | | $ | 29,249 | |
Total current liabilities | | | 14,773 | | | | 29,249 | |
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Total Liabilities | | | 14,773 | | | | 29,249 | |
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STOCKHOLDERS' EQUITY | | | | | | | | |
Series A Convertible Preferred Stock, $0.001 par value, 50,000,000 | | | | | | | | |
authorized shares. None issued and outstanding May 31, 2012 and | | | | | | | | |
August 31, 2011, respectively | | | - | | | | - | |
Common stock, $0.001 par value, 500,000,000 authorized shares | | | | | | | | |
427,716,928 and 344,400,000 issued and outstanding May 31, 2012 | | | | | | | | |
and August 31, 2011, respectively | | | 427,717 | | | | 344,400 | |
Additional paid in capital | | | 926,482 | | | | (30,210 | ) |
Deficit accumulated during development stage | | | (472,961 | ) | | | (224,086 | ) |
Total stockholders' equity | | | 881,238 | | | | 90,104 | |
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Total Liabilities and Stockholders' Equity | | $ | 896,011 | | | $ | 119,353 | |
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| | Unaudited | | | | |
| | February 29, | | | August 31, | |
| | 2012 | | | 2011 | |
ASSETS | | | | | | |
CURRENT ASSETS | | | | | | |
Cash | | $ | 950,695 | | | $ | 117,382 | |
Total current assets | | | 950,695 | | | | 117,382 | |
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Intellectual property, net | | | 1,905 | | | | 1,971 | |
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Total Assets | | $ | 952,600 | | | $ | 119,353 | |
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LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | |
CURRENT LIABILITIES | | | | | | | | |
Accounts payable and accrued liabilities | | $ | 12,648 | | | $ | 29,249 | |
Total current liabilities | | | 12,648 | | | | 29,249 | |
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Total Liabilities | | | 12,648 | | | | 29,249 | |
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STOCKHOLDERS' EQUITY | | | | | | | | |
Common stock, $0.001 par value, 500,000,000 authorized shares | | | | | | | | |
101,879,232 and 86,100,000 issued and outstanding February 29, 2012 | | | | | | | | |
and August 31, 2011 respectively | | | 101,879 | | | | 86,100 | |
Stock payable | | | 815,000 | | | | - | |
Additional paid in capital | | | 437,320 | | | | 228,090 | |
Deficit accumulated during development stage | | | (414,247 | ) | | | (224,086 | ) |
Total stockholders' equity | | | 939,952 | | | | 90,104 | |
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Total Liabilities and Stockholders' Equity | | $ | 952,600 | | | $ | 119,353 | |
The accompanying notes are an intergral part of the condensed consolidated financial statements
DiMi Telematics International, Inc.
(Formerly First Quantum Ventures, Inc.)(A Development Stage Company)Condensed Consolidated Statements of Operations(Unaudited)
| | For the Three | | | For the Six | | | From Inception | | | From Inception | |
| | Months Ended | | | Months Ended | | | January 28, 2011 | | | January 28, 2011 | |
| | February 29 | | | February 29 | | | through | | | through | |
| | 2012 | | | 2012 | | | February 28, 2011 | | February 29, 2012 | |
REVENUES | | $ | - | | | $ | - | | | | - | | | | - | |
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OPERATING EXPENSES | | | | | | | | | | | | | | | | |
General and administrative expenses | | | 132,118 | | | | 190,095 | | | | 3,000 | | | | 414,181 | |
Amortization expense | | | 33 | | | | 66 | | | | - | | | | 66 | |
Total expenses | | | 132,151 | | | | 190,161 | | | | 3,000 | | | | 414,247 | |
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Loss before income tax | | $ | (132,151 | ) | | $ | (190,161 | ) | | $ | (3,000 | ) | | $ | (414,247 | ) |
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Provision for income tax | | | - | | | | - | | | | - | | | | - | |
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NET LOSS | | $ | (132,151 | ) | | $ | (190,161 | ) | | $ | (3,000 | ) | | $ | (414,247 | ) |
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Loss per weighted average common share | | $ | (0.00 | ) | | $ | (0.00 | ) | | $ | (0.00 | ) | | | | |
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Number of weighted average | | | | | | | | | | | | | | | | |
common shares outstanding | | | 96,177,043 | | | | 96,177,043 | | | | 5,625,000 | | | | | |
The accompanying notes are an intergral part of the condensed consolidated financial statements
DiMi Telematics International, Inc.
(Formerly First Quantum Ventures, Inc.)
(A Development Stage Company)Condensed Consolidated Statements of Cash Flows(Unaudited)
| | For the Six | | | From Inception | | | From Inception | |
| | Months Ended | | | January 28, 2011 | | | January 28, 2011 | |
| | February 29 | | | through | | | through | |
| | 2012 | | | February 28, 2011 | | | February 29, 2012 | |
CASH FLOW FROM OPERATING ACTIVITIES | | | | | | | | | |
Net loss | | $ | (190,161 | ) | | $ | (3,000 | ) | | $ | (414,247 | ) |
Adjustment to reconcile net loss to net cash | | | | | | | | | | | | |
used by operating activities: | | | | | | | | | | | | |
Amortization expense | | | 66 | | | | - | | | | 285 | |
Warrant expense | | | 9 | | | | - | | | | 9 | |
Changes in operating assets and liabilites | | | | | | | | | | | | |
Increase in accounts payable and accrued liabilities | | | (16,601 | ) | | | - | | | | 9,148 | |
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Net cash used by operating activities | | | (206,687 | ) | | | (3,000 | ) | | | (404,805 | ) |
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CASH FLOWS FROM INVESTING ACTIVITIES | | | | | | | | | | | | |
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Net cash provided by investing activities | | | - | | | | - | | | | - | |
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CASH FLOW FROM FINANCING ACTIVITIES | | | | | | | | | | | | |
Proceeds from common stock sale | | | 1,040,000 | | | | 4,200 | | | | 1,352,000 | |
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Net cash provided by financing activities | | | 1,040,000 | | | | 4,200 | | | | 1,352,000 | |
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Net increase in cash | | | 833,313 | | | | 1,200 | | | | 947,195 | |
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CASH, beginning of period | | | 117,382 | | | | - | | | | - | |
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CASH, end of period | | $ | 950,695 | | | $ | 1,200 | | | $ | 947,195 | |
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SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | | | | | | | | | |
Cash paid during period for | | | | | | | | | | | | |
Cash paid for interest | | $ | - | | | $ | - | | | $ | - | |
Cash paid for income tax | | $ | - | | | $ | - | | | $ | - | |
Stock and warrants issued for intellectual property | | $ | - | | | $ | - | | | $ | 2,190 | |
The accompanying notes are an integral part of the condensed consolidated financial statements
DiMi Telematics International, Inc. | |
(Formerly First Quantum Ventures, Inc.) | |
(A Development Stage Company) | |
Condensed Consolidated Statements of Operations | |
(Unaudited) | |
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| | For the Three | | | For the Three | | | For the Nine | | | From Inception | | | From Inception | |
| | Months Ended | | | Months Ended | | | Months Ended | | | January 28, 2011 | | | January 28, 2011 | |
| | May 31, | | | May 31, | | | May 31, | | | through | | | through | |
| | 2012 | | | 2011 | | | 2012 | | | May 31, 2011 | | | May 31, 2012 | |
REVENUES | | $ | - | | | | | | $ | - | | | | - | | | | - | |
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OPERATING EXPENSES | | | | | | | | | | | | | | | | | | | |
General and administrative expenses | | | 58,681 | | | | 180,246 | | | | 248,776 | | | | 183,246 | | | | 472,862 | |
Amortization expense | | | 33 | | | | - | | | | 99 | | | | - | | | | 99 | |
Total expenses | | | 58,714 | | | | 180,246 | | | | 248,875 | | | | 183,246 | | | | 472,961 | |
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Loss before income tax | | $ | (58,714 | ) | | $ | (180,246 | ) | | $ | (248,875 | ) | | $ | (183,246 | ) | | $ | (472,961 | ) |
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Provision for income tax | | | - | | | | - | | | | - | | | | - | | | | - | |
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NET LOSS | | $ | (58,714 | ) | | $ | (180,246 | ) | | $ | (248,875 | ) | | $ | (183,246 | ) | | $ | (472,961 | ) |
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Basic and diluted loss per | | | | | | | | | | | | | | | | | | | | |
weighted average common share | | $ | (0.00 | ) | | $ | (0.00 | ) | | $ | (0.00 | ) | | $ | (0.00 | ) | | | | |
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Basic and diluted weighted average | | | | | | | | | | | | | | | | | | | | |
common shares outstanding | | | 395,576,324 | | | | 231,402,198 | | | | 416,958,232 | | | | 177,873,171 | | | | | |
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The accompanying notes are an integral part of the condensed consolidated financial statements
DiMi Telematics International, Inc. | |
(Formerly First Quantum Ventures, Inc.) | |
(A Development Stage Company) | |
Condensed Consolidated Statements of Cash Flows | |
(Unaudited) | |
| |
| | For the Nine | | | From Inception | | | From Inception | |
| | Months Ended | | | January 28, 2011 | | | January 28, 2011 | |
| | May 31, | | | through | | | through | |
| | 2012 | | | May 31, 2011 | | | May 31, 2012 | |
CASH FLOW FROM OPERATING ACTIVITIES | | | | | | | | | |
Net loss | | $ | (248,875 | ) | | $ | (183,246 | ) | | $ | (472,961 | ) |
Adjustment to reconcile net loss to net cash | | | | | | | | | | | | |
used by operating activities: | | | | | | | | | | | | |
Amortization expense | | | 99 | | | | - | | | | 319 | |
Warrant expense | | | 9 | | | | - | | | | 9 | |
Changes in operating assets and liabilities | | | | | | | | | | | | |
Increase (decrease) in accounts payable and accrued liabilities | | | (14,476 | ) | | | - | | | | 12,272 | |
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Net cash used by operating activities | | | (263,243 | ) | | | (183,246 | ) | | | (460,361 | ) |
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CASH FLOWS FROM INVESTING ACTIVITIES | | | | | | | | | | | | |
Deposit on iPhone applications | | | (6,000 | ) | | | - | | | | (6,000 | ) |
Net cash used by investing activities | | | (6,000 | ) | | | - | | | | (6,000 | ) |
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CASH FLOW FROM FINANCING ACTIVITIES | | | | | | | | | | | | |
Proceeds from common stock sale | | | 1,040,000 | | | | 212,000 | | | | 1,352,000 | |
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Net cash provided by financing activities | | | 1,040,000 | | | | 212,000 | | | | 1,352,000 | |
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Net increase in cash | | | 770,757 | | | | 28,754 | | | | 885,639 | |
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CASH, beginning of period | | | 117,382 | | | | - | | | | - | |
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CASH, end of period | | $ | 888,139 | | | $ | 28,754 | | | $ | 885,639 | |
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SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | | | | | | | | | | | | |
Cash paid for interest | | $ | - | | | $ | - | | | $ | - | |
Cash paid for income tax | | $ | - | | | $ | - | | | $ | - | |
Stock and warrants issued for intellectual property | | $ | - | | | $ | - | | | $ | 2,190 | |
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The accompanying notes are an integral part of the condensed consolidated financial statements
DiMi Telematics International, Inc.
(Formerly First Quantum Ventures, Inc.)
(A Development Stage Company)
Notes to Consolidated Financial Statements
(Unaudited)
1. BASIS OF PRESENTATION AND NATURE OF BUSINESS OPERATIONS
Basis of Presentation
The accompanying financial statements of DiMi Telematics International, Inc. (formerly First Quantum Ventures, Inc)Inc.), a Nevada corporation (the "Company"), have been prepared in accordance with generally accepted accounting principles. In the opinion of management, financial statements reflect all adjustments that are of a normal recurring nature and which are necessary to present fairly the financial position of the Company as of February 29, 2012May 31, 2012.
On October 28, 2011 First Quantum Ventures entered into a Share Exchange Agreement (“Share Exchange”) with DiMi Telematics, Inc. shareholders. Pursuant to the agreement, First Quantum Ventures issued 87,450,000 shares of common stock (pre split) in exchange for all outstanding shares and warrants to purchase common shares of DiMi Telematics, Inc (DTI), First Quantum Ventures, Inc received 145,750,000 shares of common stock and warrants to purchase 21,625,000 shares of common stock. As a result of the Share Exchange Agreement, DTI will become a subsidiary of First Quantum Ventures, Inc. The Company will assume operation of DiMi Telematics Inc. and enter the Telematics/M2M industry. On November 10, 2011, the closing of the Share Exchange occurred. In connection with the Share Exchange, (a) 15,000,000 shares of the Company’s issued and outstanding common stock were surrendered for cancellation and (b) the Company’s officers and directors resigned and the following individuals assumed their duties as officers and directors:
| | |
Name | | Title(s) |
Barry Tenzer | | President, Chief Executive Officer, Chief Financial Officer, Secretary and Director |
Roberto Fata | | Executive Vice President – Business Development and Director |
The Company has accounted for the acquisition under the purchase method of accounting for business combinations. Under the purchase method of accounting in a business combination effected through an exchange of equity interest, the entity that issues the equity interest is generally the acquiring entity. In some business combinations (commonly referred to as reverse acquisitions), however, the acquired entity issues the equity interest. Accounting for business combinations requires consideration of the facts and circumstances surrounding a business combination that generally involves the relative ownership and control of the entity by each of the parties subsequent to the acquisition. Based on a review of these factors, the acquisition will be accounted for as a reverse acquisition, i.e. the Company will be considered the acquired company and DTI will be considered the acquiring company. As a result, the Company’s assets and liabilities will be incorporated into DTI’s balance sheet based on the fair value of the net assets acquired. Further, the Company’s operating results will not include the Company’s results prior to the date of closing. Accordingly the accompanying financial statements are the financial statements of the DTI. In addition, the Company’s fiscal year end changed to DTI’s fiscal year end of August 31 following the closing.
The Company has retroactively reflected the acquisition in DTI’s common stock in a ratio consistent with the Share Exchange.
On March 15, 2012, First Quantum Ventures, Inc., changed its name to DiMi Telematics International, Inc.
Nature of Business Operations
DTI is a development stage company formed on January 28, 2011 as Medepet Inc. as a Nevada corporation. During the first year of operations the Company has redefined its business purpose and operation. On June 20, 2011 the Company changed its name from Medepet Inc. to Precision Loc8. On July 28, 2011 the Company changed its name from Precision Loc8 to Precision Telematics Inc. On August 9, 2011 the Company changed its name to DiMi Telematics Inc.
On July 28, 2011 the company entered into an asset purchase agreement for the purchase of intellectual property.
DTI designs, develops and distributes Machine-to-Machine (M2M) communications solutions used to remotely track, monitor, manage and protect multiple mobile and fixed assets in real-time from virtually any web-enabled desktop computer or mobile device. Through our proprietary software and hosted service offerings, DTI is endeavoring to capitalize on the pervasiveness and data transport capabilities of wireless networks in order to facilitate communications and process efficiencies between commercial and industrial business owners/managers and their respective networked control systems, sensors and devices.
DTI is focused on the M2M market segments in which we can provide highly differentiated and value-driven solutions capable of unleashing tangible productivity gains, material cost reductions and quantifiable risk mitigation across an enterprise. Aside from the oversight and administration of our corporate, financial and legal affairs by the executive management team, our Company’s operating activities are centralized in three core areas:
• | Sales and Marketing, which will employ both direct and indirect sales models utilizing an in-house business development team, partners and resellers and self-service through a service on-demand web interface. |
• | Operations, which will be responsible for managing daily activities related to monitoring and administering our cloud-based server operations; 24/7 client service/help desk; professional services and installation support; and quality assurance and testing of our DiMi software and hosting platform, as well as the implementation and ongoing administration of our hosted clients’ M2M communications platforms. |
• | Product Development, which will be charged with enhancing our existing M2M software applications and services and introducing new and complementary hosted products and applications on a timely basis. |
Going Concern
The accompanying financial statements have been prepared contemplating a continuation of the Company as a going concern. However, the Company has reported a net loss of $190,161$248,875 for the sixnine months ended February 39,May 31, 2012 and had an accumulated deficit of $414,247$472,961 as of February 29,May 31, 2012. The Company has net working capital of $938,047$873,366 as of February 29,May 31, 2012.
DTI’s flagship M2M solution is “DiMi,” a proprietary, patent-pending, business intelligence and two-way communications platform that captures and seamlessly integrates real-time data from networked tracking, monitoring, alarm and alert systems, sensors and devices; and, in turn, centralizes this data onto an online command and control dashboard that is accessible 24/7 by a designated user or community of designated users through the secure DiMi Internet portal, found at www.dimispeaks.com.
With adoption of the DiMi M2M communications platform, users can remotely control, monitor, manage and acquire data from their operational assets, providing the interface for lighting, temperature, humidity, keycard access, fleet management and many other vital systems that impact the enterprise. DiMi uses established secure technology standards (i.e. LONet, MODbus, BACnet and ELK) combined with a unique, proprietary software interface that keeps users connected to their asset management and control systems through any web-enabled computer or mobile device,
By providing dynamic, real-time access to critical information from a wide array of new or legacy sensors, GPS tracking tools and/or diagnostic devices – irrespective of their make, model or manufacturer, DiMi alerts or reports back to its users via familiar communication tools, like IM, email, HTML and text messaging. Users can even issue global commands to its asset management and control systems through the DiMi software interface. Moreover, DiMi leverages the collected knowledge of a particular asset or assets and compares it to historical performance metrics and other critical benchmarks through an integrated data management module, giving users insight that allow them to rapidly identify and implement proper preventive maintenance measures, efficiency improvements and other key operational activities.
DTI’s DiMi solution is currently being used to actively monitor property management systems in several high-rise commercial and residential buildings in New York City – all beta sites which have served to successfully prove out the DiMi technology and M2M communications platform. Moving forward, DTI intends to concentrate its DiMi commercialization efforts on marketing the solution to property management companies, commercial property developers, government/military installations, industrial facilities, retail and restaurant chains, colleges and universities, fleet managers, and any business or institutional concern with valuable fixed and mobile assets requiring remote surveillance, regular maintenance or general oversight.
Once a new client’s core M2M business needs have been confirmed, DTI will closely collaborate with the client to design the organizational and process modifications required to ensure a successful DiMi launch, offering full service project definition, management, user interface customization, implementation services and ongoing quality assurance and testing.
Cash and Cash Equivalents
For purposes of these financial statements, cash and cash equivalents includes highly liquid debt instruments with maturity of less than three months.
Concentrations of Credit Risk
Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents. The Company places its cash and temporary cash investments with high credit quality institutions. At times, such investments may be in excess of the FDIC insurance limit. Currently our operating account is not above the FDIC limit.
Income Taxes
The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.
The Company records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. A valuation allowance is established against deferred tax assets that do not meet the criteria for recognition. In the event the Company were to determine that it would be able to realize deferred income tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the valuation allowance which would reduce the provision for income taxes.
The Company follows the accounting guidance which provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized initially and in subsequent periods. Also included is guidance on measurement, recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.
Intellectual Properly
Intellectual property is stated at cost. When retired or otherwise disposed, the related carrying value and accumulated amortization are removed from the respective accounts and the net difference less any amount realized from disposition, is reflected in earnings. Minor additions and renewals are expensed in the year incurred. Major additions and renewals are capitalized and depreciated over their estimated useful lives being 3 years up to 15 years.
Revenue Recognition
The Company recognizes revenue on four basic criteria which must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded.
Stock Based Compensation
The Company accounts for all compensation related to stock, options or warrants using a fair value based method whereby compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. The Company uses the Black-Scholes pricing model to calculate the fair value of options and warrants issued to both employees and non-employees. Stock issued for compensation is valued using the market price of the stock on the date of the related agreement.
Recent Accounting Pronouncements
In September 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2011 - 08, “Testing Goodwill for Impairment” (“ASU 2011 - 08”), which permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform a two-step goodwill impairment test. The updated guidance is effective for annual impairment tests performed for SMSC beginning in Fiscal 2013 with early adoption permitted. Management believes that the adoption of this guidance will not have a material impact on our consolidated financial statements.
In June 2011, the FASB issued Accounting Standards Update 2011 - 05, “Presentation of Comprehensive Income” (“ASU 2011 - 05”), which provides guidance regarding the presentation of comprehensive income. The new standard requires the presentation of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The updated guidance is effective on a retrospective basis for SMSC beginning in the first quarter of fiscal year 2013. Management believes that the adoption of this guidance will not have a material impact on our consolidated financial statements.
In January 2010,December 2011, the FASBFinancial Accounting and Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2010-06: Fair Value Measurements and Disclosures (topic 820) ImprovingASU 2011-11, Balance Sheet (Topic 210): Disclosures about Fair Value Measurements.. This Offsetting Assets and Liabilities (“ASU 2011-11”). ASU 2011-11 requires additional disclosures regarding significant transfers inan entity to disclose both gross and out of Levels 1 and 2 of fair value measurements, including a description of the reasons for the transfers. Further, this ASU requires additional disclosures for the activity in Level 3 fair value measurements, requiring presentation ofnet information about purchases, sales, issuances,both instruments and settlementstransactions eligible for offset in the reconciliation for fair value measurements. Thisstatement of financial position and instruments and transactions subject to an agreement with a similar master netting arrangement. ASU 2011-11 is effective for fiscal years beginning after December 15, 2010,annual and for interim periods within those fiscal years. We are currently evaluating the impact of this ASU, however, we do not expect the adoption of this ASU to have a material impact on our consolidated financial statements.
In July 2010, the FASB issued ASU No. 2010-20: Receivables (Topic 310) Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses. The ASU amends FASB Accounting Standards Codification Topic 310, Receivables, to improve the disclosures that an entity provides about the credit quality of its financing receivables and the related allowance for credit losses. As a result of these amendments, an entity is required to disaggregate, by portfolio segment or class of financing receivables, certain existing disclosures and provide certain new disclosures about its financing receivables and related allowance for credit losses. This ASU is effective for interim and annual reporting periods ending on or after December 15, 2010. The adoption of this standard may require additional disclosures, but we do not expect the adoption to have a material effect on our consolidated financial statements.
On December 21, 2010, the FASB issued ASU 2010-29: Business Combinations (Topic 805) which impacts any public entity that enters into business combinations that are material on an individual or aggregate basis. The guidance specifies that if a public entity presents comparative financial statements, the entity should disclose revenues and earnings of the combined entity as though the business combination(s) that occurred during the year had occurred at the beginning of the prior annual period when preparing the pro forma financial information for both the current and prior reporting periods. The guidance also requires that pro forma disclosures be accompanied by a narrative description regarding the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in reported pro forma revenues and earnings. This guidance is effective for business combinations consummated in periods beginning after December 15, 2010. We do not believe the adoption of this guidance will have a material impact on our Consolidated Financial Statements
In April 2011, FASB issued ASU 2011-02, “Receivables (Topic 310): A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring”. This amendment explains which modifications constitute troubled debt restructurings (“TDR”). Under the new guidance, the definition of a troubled debt restructuring remains essentially unchanged, and for a loan modification to be considered a TDR, certain basic criteria must still be met. For public companies, the new guidance is effective for interim and annual periods beginning on or after June 15, 2011, and applies retrospectivelyJanuary 1, 2013. Retrospective disclosure is required for all comparative periods presented. Since this accounting standard requires only enhanced disclosure, the adoption of this standard is not expected to restructuring occurring onhave an impact the Company’s financial position or after the beginningresults of the fiscal year of adoption. The Company does not expect that the guidance effective in future periods will have a material impact on its consolidated financial statements.operations.
In May 2011, FASB issued ASU 2011-04 “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” The amendments in this update result in common fair value measurement and disclosure requirements in U.S. GAAP and IFRSs. Consequently, the amendments change the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. For many of the requirements, the Board does not intend for the amendments in this update to result in a change in the application of the requirements in Topic 820. Some of the amendments clarify the Board’s intent about the application of existing fair value measurement requirements. Other amendments change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. For public entities, the new guideline is effective for interim and annual periods beginning after December 15, 2011 and should be applied prospectively. The Company does not expect that the guidance effective in future periods will have a material impact on its consolidated financial statements.
Net Loss per Share
Basic and diluted loss per share amounts are computed based on net loss divided by the weighted average number of common shares outstanding. Outstanding warrants to purchase of 12,675,00012,075,000 common shares were not included in the computation of diluted loss per share because the assumed conversion and exercise would be anti-dilutive for the sixnine months ended February 29,May 31, 2012.
Management Estimates
The presentation of financial statements in conformity with generally accepted accounting principles 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 reported period. Actual results could differ from those estimates.
2. DEPOSIT ON iPHONE APPLICATIONS
F-8During the month of May 2012, the Company entered into an agreement for the purchase of an iPhone applications. The total cost of the applications is $11,000, of which the Company has paid $6,000 as a deposit toward the iPhone applications. Upon final approval the remaining balance of $5,000 shall be due.
2.3. INTELLECTUAL PROPERTY
Intellectual property of the following:
| | February 29, 2012 | | | August 31, 2011 | | | May 31, 2012 | | | August 31, 2011 | |
Intellectual property | | $ | 2,190 | | | $ | 2,190 | | | $ | 2,190 | | | $ | 2,190 | |
Less: amortization | | | 285 | | | | 219 | | | | 318 | | | | 219 | |
Net intellectual property | | $ | 1,905 | | | $ | 1,971 | | | $ | 1,872 | | | $ | 1,971 | |
The company executed an Asset Purchase Agreement on August 28, 2011 which included various types of intellectual property. Amortization expense for the six months ended February 29, 2012 amounted to $66.$99.
On September 28, 2011 the Company entered into a Securities Purchase Agreement for the sale of 1,200,0004,800,000 shares of common stock at $0.17$0.042 per share in the amount of $200,000. The Security Purchase Agreement includes 300,0001,200,000 Class A warrants and 300,0001,200,000 Class B warrants.
On October 28, 2011 First Quantum Ventures entered into a Share Exchange Agreement (“Share Exchange”) with DiMi Telematics, Inc. shareholders. Pursuant to the agreement, First Quantum Ventures issued 87,450,000 shares of common stock (pre split) in exchange for all outstanding shares and warrants to purchase common shares of DiMi Telematics, Inc (DTI), First Quantum Ventures, Inc received 145,750,000 shares of common stock and warrants to purchase 21,625,000 shares of common stock. In connection with the Share Exchange, (a) 15,000,000 shares of the Company’s issued and outstanding common stock owned by Kesgood Company, Inc. were surrendered for cancellation