AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON
NOVEMBER 4, 2008 REGISTRATION NO. 333-________ ===============================================================================JANUARY 9, 2012Registration No. 333-177318
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,Washington, D.C. 20549
----------------------———————————
AMENDMENT NO.
2 TOFORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------- NEVADA PROCESSING SOLUTIONS,———————————
MMAX MEDIA, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) NEVADA 20-4959207 ------------------------------- ----------------- (State(Exact name of issuer as specified in its charter)
Nevada | 7380 | 20-4959207 |
(State or other jurisdiction of | (Primary Standard Industrial | (I.R.S. Employer |
incorporation or organization) | Classification Code Number) | Identification No.) |
511 N.E. 3rd Avenue, 1st Floor
Fort Lauderdale, Florida 33301
954 (800) 991-4534
(Address and telephone number of principal executive offices)
511 N.E. 3rd Avenue, 1st Floor
Fort Lauderdale, Florida 33301
954-(800) 991-4534
(Address of principal place of business or Other Jurisdictionintended principal place of (I.R.S. Employer
Incorporation or Organization) Identification No.)
7389
----------------------------
(Primary Standard Industrial
Classification Number)
----------------------------
9646 Giddings
Las Vegas, NV 89148
(702) 334-4008
----------------------------------------------------------------
(Address, Including Zip Codebusiness)
Edward Cespedes, Chief Executive Officer
511 N.E. 3rd Avenue, 1st Floor
Fort Lauderdale, Florida 33301
800-991-4534
954-302-8415 (fax)
(Name, address and Telephone Number,
Including Area Code,telephone number of Registrant's Principal Executive Offices)
Chad Guidry
9646 Giddings
Las Vegas, NV 89148
(702) 334-4008
--------------------------------------------------------
(Name, Address, Including Zip Code and Telephone Number,
Including Area Code, of Agentagent for Service)
WITH COPIES OF ALL CORRESPONDENCE TO:
THOMAS C. COOK, ESQ.
LAW OFFICES OF THOMAS C. COOK
500 N. RAINBOW BLVD.service)
———————————
Copies to:
Brian Pearlman, Esq.
Quintairos, Prieto, Wood & Boyer, P.A.
One East Broward Blvd., SUITE 300
LAS VEGAS, NV 89107
PHONE: (702) 221-1925
FAX: (702) 221-1926
----------------------
Fort Lauderdale, Florida 33301
954-523-7008
954-523-7009 (fax)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to time after the effective date of this registration statement.
Registration Statement becomes effective.
If any of the securities being registered on this formForm are to be offered Onon a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. |X|
þ
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, please check the following box and list the Securities Act of 1933 registration statement number of the earlier effective registration statement for the same offering. |_|
¨
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act of 1933, check the following box and list the Securities Act of 1933 registration statement number of the earlier effective registration statement for the same offering. |_|
¨
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act of 1933, check the following box and list the Securities Act of 1933 registration statement number of the earlier effective registration statement for the same offering. |_|
¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a Non-acceleratednon-accelerated filer, or a smaller reporting company. See the
definitions of "large“large accelerated filer," "accelerated filer"filer”, “accelerated filer”, and "smaller“smaller reporting company" Incompany” in Rule 12b-2 of the Exchange Act. Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if a smaller
reporting company)
Calculation of Registration Fee
(Check one):
Large accelerated filer | ¨ | Accelerated Filer | ¨ |
Non-accelerated filer | ¨ | Smaller reporting company | þ |
CALCULATION OF REGISTRATION FEE
Title of Each Class of Securities To Be Registered | Amount To Be | Proposed Maximum Price Per Unit1 | Proposed Maximum | Amount of |
Common Stock | 20,261,621 | $0.25 | $5,065,405.25 | $ 740.12 |
Common Stock2 | 2,000,0003 | $0.25 | $500,000 | $ 57.30 |
Common Stock2 | 300,0004 | $0.25 | $75,000 | $ 8.60 |
Common Stock2 | 8,000,0005 | $0.25 | $2,000,000 | $ 229.20 |
Common Stock2 | 500,0006 | $0.25 | $125,000 | $ 14.33 |
Common Stock2 | 400,0007 | $0.25 | $100,000 | $ 11.46 |
Total Registration Fee |
|
|
| $1,061.018 |
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1.
Estimated solely for the securitiespurpose of calculating the registration fee pursuant to Rule 457. The proposed maximum offering price per share and the proposed maximum aggregate offering price at whichhave been estimated solely for the shares held bypurpose of calculating the selling security holders will be sold is unknown.
Although the registrant's common stock has a par value of $0.001, the
registrant believes that the calculations of $0.01 per share is a bona fide
estimateamount of the offering priceregistration fee in accordance with Rule 457(a). In the event
of a stock split, stock dividend or similar transaction involving our common
stock, the number of shares registered shall automatically be increased to
cover the additional shares of common stock issuable pursuant to Rule 416Rules 457(c) under the Securities Act of 1933 as amended.
(3) Representson the basis of the average of the bid and asked price of our common stock on the OTC Markets on October 13, 2011, a date within five trading days prior to the date of the filing of this registration statement.
2.
Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(g). Shares issuable upon the exercise of warrants and options.
3.
Includes 2,000,000 shares of common stock issuable in connection with the
conversion of our Series A Callable and Convertible Preferred stock. The
registrant sold 872,690 non-voting Callable and Convertible Preferred stockunderlying warrants exercisable at its inception to finance its operations. These Series A Preferred shares
are convertible into shares of our common stock at a ratio of two hundred$0.16 per share.
4.
Includes 300,000 shares of common stock for each shareunderlying warrants exercisable at $0.18 per share.
5.
Includes 8,000,000 shares of Series A Preferred stock.
common stock underlying warrants exercisable at $0.23 per share.
6.
Includes 500,000 shares of common stock underlying warrants exercisable at $0.25 per share.
7.
Includes 400,000 shares of common stock underlying warrants exercisable at $0.26 per share.
8.
Fee previously paid.
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
ii
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
THE SELLING STOCKHOLDERS MAY NOT SELL THESE SECURITIES UNTIL THE
REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES
AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY
JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED NOVEMBER 4, 2008
PROSPECTUS
Nevada Processing Solutions, Inc.
9,001,900 SHARES
COMMON STOCK
The selling shareholders named in this Prospectus are offering all of the
shares of common stock offered through this Prospectus.
Our common stock is presently not traded on any market or securities exchange.
THE PURCHASE OF THE SECURITIES OFFERED THROUGH THIS PROSPECTUS INVOLVES A
HIGH DEGREE OF RISK. SEE SECTION ENTITLED "RISK FACTORS" ON BEGINNING ON
PAGE 3.
The information in this Prospectusprospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This Prospectusprospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
PRELIMINARY PROSPECTUS, SUBJECT TO COMPLETION, JANUARY 9, 2012
MMAX MEDIA, INC.
31,461,621 Shares of Common Stock
This prospectus relates to periodic offers and sales of 31,461,621 shares of common stock by the selling security holders which includes:
–
up to 20,261,621 shares of common stock presently issued and outstanding; and
–
up to 11,200,000 shares of common stock issuable upon the possible exercise of our options and warrants
We will not receive any of the proceeds from the sale of common stock covered under this prospectus. To the extent the options and warrants are exercised, we will receive proceeds of the exercise price. We intend to use such proceeds for working capital and other general corporate purposes. The shares of common stock are being offered for sale by the selling security holders at prices established on the OTC Markets during the term of this offering. These prices will fluctuate based on the demand for the shares of common stock.
The selling shareholders willsecurity holders may sell ourtheir shares of common stock in the public market based on the market price at $0.01 per share until ourthe time of sale or at negotiated prices or in transactions that are not in the public market. The selling security holders may also sell their shares of common stock in transactions that are not in the public market in the manner set forth under “Plan of Distribution” on page 39 of this prospectus.
Our common stock is quoted on the OTC Bulletin Board, and thereafter at prevailing
market prices or privately negotiated prices. We determined this offering
price based uponMarkets under the price ofsymbol “MMAX”. On ________ __, 2012 the last reported sale ofprice for our common stock was $0._____ per share.
——————————————
Investing in our common stock involves a high degree of risk. See “Risk Factors” beginning on page 7 of this prospectus to investors.
read about the risks of investing in our common stock.
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Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacyaccuracy or accuracyadequacy of this Prospectus.prospectus. Any representation to the contrary is a criminal offence.
offense.
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The date of this Prospectusprospectus is November 4, 2008.
1
Table of Contents
Part I
PROSPECTUS SUMMARY...................................................... 3
OUR COMPANY............................................................. 3
________ ____, 2012
MMAX MEDIA, INC.
TABLE OF CONTENTS
i
ABOUT THIS OFFERING..................................................... 4
SELECTED FINANCIAL INFORMATION.......................................... 5
RISK FACTORS............................................................ 6
RISK FACTORS RELATING TO OUR COMPANY.................................... 6
PROSPECTUS
You should only rely on the information contained in this document or to which we have referred you. We have not authorized anyone to provide you with information that is different. If anyone provides you with different or inconsistent information, you should not rely on it. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted.
OTHER RISK FACTORS......................................................14
FORWARD-LOOKING STATEMENTS..............................................17
USE OF PROCEEDS.........................................................18
DETERMINATION OF THE OFFERING PRICE.....................................18
SELLING SECURITY HOLDERS................................................18
PLAN OF DISTRIBUTION....................................................20
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION...............22
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS............31
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..........................34
SECURITY OWNERSHIP OF CERTAIN BENEFICAL OWNERS AND MANAGEMENT...........35
DESCRIPTION OF SECURITIES ..............................................37
DIVIDEND POLICY.........................................................38
MARKET INFORMATION......................................................40
WHERE YOU CAN FIND MORE INFORMATION.....................................40
FINANCIAL STATEMENTS....................................................41
Part II
INDEMNIFICATION OF DIRECTORS AND OFFICERS.............................II-1
RECENT SALES OF UNREGISTERED SECURITIES...............................II-2
EXHIBITS..............................................................II-4
UNDERTAKINGS..........................................................II-4
POWER OF ATTORNEY.....................................................II-7
SIGNATURES............................................................II-7
2
We own and operate several websites, includingwww.paymeon.com andwww.hyperloc.com. The information which appears on these websites is not part of this prospectus.
ii
PROSPECTUS SUMMARY
The following summary highlights selected information contained in this Prospectus.prospectus. This summary does not contain all the information that may be
important to you. Youyou should consider before investing in the securities. Before making an investment decision, you should read the more detailed information contained inentire prospectus carefully, including the “RISK FACTORS” section, the financial statements and the notes to the financial statements. As used throughout this prospectus, the terms “MMAX Media”, “MMAX”, “Company”, “we”, “us”, or “our” refer to MMAX Media, Inc. and its subsidiaries.
Business Overview
MMAX Media, Inc., a Nevada corporation, is a development stage company organized on May 30, 2006, that owns and operates products aimed at the location-based marketing industry. We develop and market products that provide merchants and consumers with mobile marketing services and offers, including but not limited to, the risk factors beginning on
page 3. References to "we," "us," "our," "Nevada Processing Solutions," or
the "Company" mean Nevada Processing Solutions, Inc.
Forward-Looking Statements
This Prospectus contains forward-looking statements that involve risksmobile coupons, mobile business cards, mobile websites, use of SMS short codes and uncertainties. We use words such as anticipate, believe, plan, expect,
future, intend, and similar expressions to identify such forward-looking
statements. You should not place too much reliance on these forward-looking
statements. Our actual results may differ materially from those anticipated
in these forward-looking statements for many reasons, including the risks
faced by us described in the "Risk Factors" section and elsewhere in this
Prospectus.
Our Company
We were formed on May 30, 2006. Nevada Processing Solutions, Inc. is a
startup company that processes loan for mortgage companies. Activities to
date have been limited primarily to organization, initial capitalization,
establishing an appropriate operating facility in Las Vegas, Nevada, and
commencing its initial operational plans. As of the date of this offering
circular, the Company has developed a business plan, established
administrative offices and started its loan processing business.contest management. We have generated no revenues, have incurred losses since our inception on
May 30, 2006,developed “PayMeOn”, a product designed to offer its customers income potential through the purchase and have relied upon the salereferral of our securities in unregistered
private placement transactions“coupon-style” deals through mobile and cash advances from our President, Mr.
Guidry,web interfaces.
On March 16, 2011 we completed an agreement and plan of merger to fund our operations. We areacquire Hyperlocal Marketing, LLC, a Florida limited liability company (“Hyperlocal”), pursuant to which Hyperlocal merged with and into HLM Paymeon, Inc., a Florida corporation and wholly owned subsidiary of MMAX. Hyperlocal was a development stage Florida company, organized on January 22, 2010. Pursuant to the terms of the merger agreement, Tommy Habeeb resigned as our chief executive officer and director and Edward Cespedes was appointed to serve as our chief executive officer and director. Under the terms of the merger agreement, the Hyperlocal members received 20,789,395 shares of MMAX common stock, which equal approximately 50.1% of the total shares of MMAX issued and outstanding following the merger on a fully diluted basis. In accordance with ASC Topic 360-10-45-15, the transaction was treated as a recapitalization and Hyperlocal is considered the accounting acquirer and MMAX is considered the accounting acquiree (and for financial accounting purposes we were deemed to have issued 638,602 shares of preferred stock and 12,403,374 shares of common stock). At certain periods prior to the closing of the merger agreement (and directly prior to the closing of the merger agreement), MMAX was a shell company. See “Risk Factors” for a summary of restrictions imposed on our company, including Rule 144 resales of our restricted shares of common stock.
While we intend to mainly focus on our PayMeOn products, we also offer mobile marketing services to merchants. Under our Hyperlocal Platform, we support multiple text messaging services such as WAP, MMS and XHTML, which run on a commercial grade mobile marketing platform and operates with all major mobile carriers, including AT&T, Sprint, T-Mobile and Verizon. The fully-integrated interface allows for web-based monitoring of customers. It provides access to real-time statistics for each customer’s account, including but not limited to incoming and outgoing messages, number of keywords, credits and account status.
We had total assets of $41,354 and $165,096 at December 31, 2010 and September 30, 2011, respectively. From inception through September 30, 2011, we had revenues of $54,901 and a net loss of $1,343,848. At December 31, 2010, we had a cash balance of approximately $14,000, a working capital deficit of approximately $7,000 and an accumulated deficit of approximately $254,000 Additional losses have occurred as a result of the substantial resources required for research and development and marketing of our products which included the general and administrative expenses associated with organization and product development. We expect operating losses to continue, mainly due to the anticipated expenses associated with the marketing of our products.
At the closing of the merger and during the six months ended June 30, 2011, we issued an aggregate of 2,210,000 shares of common stock at a purchase price of $0.125 per share to certain accredited investors pursuant to a private placement and we doreceived gross proceeds of $276,250. Of these private placement shares, 2,000,000 shares were issued effective March 16, 2011. The private placement investors were not expectHyperlocal members. During July and August 2011, the Company received subscriptions for the next 12 months to generate revenuepurchase of an aggregate of 2,080,000 shares of its common stock from 11 subscribers at a purchase price of $0.125 per share for gross proceeds of $260,000. No fees or commissions were paid in connection with the subscriptions.
Organization
MMAX holds a wholly owned interest in the HLM Paymeon, Inc., a Florida corporation.
There is currently a limited public market for our common stock which would be enough
to sustain our operations. Accordingly, foris quoted on the foreseeable future, we will
continue to be dependent on additional financing in order to maintain our
operations and continue with our corporate activities. Due toOTC Markets under the uncertainty
of oursymbol “MMAX”.
Risk Factors
Our ability to meetsuccessfully operate our financial obligationsbusiness and achieve our goals and strategies is subject to paynumerous risks as discussed more fully in the section titled “Risk Factors”, including for example:
–
Lack of working capital required to develop our liabilities
as they become due, in their report on our financial statements for the
period from inception (May 30, 2006) to June 30, 2008, our registered
independent auditors included additional comments indicating concerns about
ourbusiness;
–
Our ability to continue as a going concern. concern;
–
Our financial statements contain
additional note disclosures describing the circumstances that ledlimited operating history;
–
Inability to this
disclosure byattract consumers;
–
Inability to create successful marketing campaigns;
–
Inability to effectively compete in a diverse and competitive industry;
–
Inability to effectively manage growth; and
–
The possibility of losing key members of our registered independent auditors. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.
Our principal executive offices are located at 9646 Giddings, Las Vegas, NV
89148 and our telephone number at that address is (702) 334-4008.
3
The Offering
Securities Being Offered: Up to 9,001,900 shares of common stock
Offering Price: The selling shareholders will sell our
shares at $0.01 per share until our shares
are quoted on the OTC Bulletin Board, and
thereafter at prevailing market prices or
privately negotiated prices. There is no
guarantee that our shares will be quoted
for trading on the OTC Bulletin Board. We
determined this offering price based upon
the pricesenior management.
Any of the last sale of our common
stock to investors.
Terms of the Offering : The selling shareholders will determine
whenabove risks could materially and how they will sell the common
stock offered in this prospectus.
Termination of the Offering: The offering will conclude when all of the
9,001,900 shares of common stock have been
sold or we, in our sole discretion, decide
to terminate the registration of the
shares. We may decide to terminate the
registration if it is no longer necessary
due to the operation of the resale
provisions of Rule 144.
Securities Issued 12,101,900 shares of our common stock are
And to be Issued: issued and outstanding as of the date of
this Prospectus. All of the common stock
to be sold under this Prospectus will be
sold by existing shareholders.
Use of Proceeds: We will not receive any proceeds from the
sale of the common stock by the selling
shareholders.
4
Selected Financial Data
The following financial information summarizes the more complete historical
financial information at the end of this Prospectus.
The summary information below should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the audited financial statements and notes thereto included
elsewhere in this Prospectus.
Balance Sheet Data
For the three
month period As of
ending June 30,
Sept. 30, 2008 2008
(unaudited) (Audited)
-------------- ---------
Working Capital $ 0 $ 2,750
Total Assets $ 0 $ 2,750
Total Liabilities $ 0 $ 1,000
Income Statement Data
From
For the three May 30, 2006
month period (Inception)
ending to June 30,
Sept. 30, 2008 2008
(unaudited) (Audited)
-------------- ---------
Revenues $ 0 $ 0
Expenses $ 1,750 $ 9,763
Net (Loss) before
beneficial interest $ $ (9,763)
Beneficial Conversion Feature
of Preferred stock $ $ (706,878)
Net income (loss) $ (1,750) $ (716,641)
As of September 30, 2008, we had no working capital and an accumulated loss
before beneficial interest of $11,513 since inception.
5
RISK FACTORS
Please consider the following risk factors before deciding to invest in our
common stock.
This offering and any investment in our common stock involves a high degree
of risk. You should carefully consider the risks described below and all of
the information contained in this Prospectus before deciding whether to
purchase our common stock.
If any of the following risks actually occur,adversely affect our business, financial condition,position and results of operations could be harmed. The trading price of
our common stock could decline, and you may lose all or part of your
investment in our common stock.operations. An investment in our common stock involves a high degree of risk. You should read and consider the information set forth in “Risk Factors” and all other information set forth in this prospectus before investing in our common stock.
Corporate Information
Our executive offices are located at 511 N.E. 3rd Avenue, 1st Floor, Fort Lauderdale, Florida 33301; our telephone number is (800) 991-4534.
SUMMARY OF THE OFFERING
Common stock outstanding before the offering: | 44,646,539 | |
Common stock offered by selling security holders | Up to 31,461,621 shares of common stock, including 11,200,000 shares underlying options and warrants. The maximum number of shares of common stock to be sold by the selling security holders, 31,461,621 shares, represents approximately The selling security holders will offer their shares at prevailing market prices or privately negotiated prices. Our common stock is currently quoted on the OTC Markets under the symbol “MMAX”. On _______ __, | |
Common stock to be outstanding after the offering | Up to 47,245,539 shares based on 44,646,539 shares of common stock outstanding as of December | |
Use of proceeds | We could receive up to $2,443,000 related to warrant exercise proceeds, in the event the options and warrants are exercised. We will use the proceeds from the exercise of the warrants for general corporate purposes, which may include, among other things, product development, advertising (including media expense), working capital needs and other general corporate purposes, including sales and marketing expenditures. See “Use of Proceeds” on page 17. | |
Risk Factors | The purchase of our common stock involves a high degree of risk. You should carefully review and consider “Risk Factors” beginning on page 7. As with any investment, there are certain risks involved in this offering. All potential investors should consult their own tax, legal and investment advisors prior to making any decision regarding this offering. The purchase of the Shares is highly speculative and involves a high degree of risk, including, but not necessarily limited to, the “Risk Factors” described herein. Any person who cannot afford the loss of their entire investment should not purchase our shares of common stock. |
TERMS OF THE OFFERING WITH THE SELLING SECURITY HOLDERS
Pursuant to the Merger Agreement effective March 16, 2011, we issued to 26 holders of Hyperlocal membership interests 20,789,395 shares of the Company representing approximately 50.1% of the outstanding shares of the Company on a fully diluted basis in consideration of a 100% wholly owned interest in Hyperlocal. There were 26 members of Hyperlocal prior to the merger. Of these shares, we have included 15,213,871 shares in this registration statement.
During the six months ended June 30, 2011, we sold an aggregate of 2,210,000 shares of restricted shares of Common Stock to 13 accredited investors for gross proceeds of $276,250 ($0.125 per share). We did not pay any commissions in connection with the private placement. Subscribers to the private placement received registration rights which provide that purchasers under the private placement are entitled to liquidated damages if a registration statement covering the resale of the 2,210,000 shares of common stock sold under the private placement (the “Registrable Securities”) is not filed within 60 days of the termination date of the private placement and declared effective within 180 days of the termination date. The Company shall make pro rata payments to each private placement shareholder, in an amount equal to 1.0% of the aggregate amount invested by such Holder (based upon the number of Registrable Securities then owned by such holder) for each 30-day period or pro rata for any portion thereof following the date by which such Registration Statement should have been filed or effective (the “Blackout Period”). Such payments shall constitute the private placement shareholder’s exclusive monetary remedy for such events, but shall not affect the right of the holder to seek injunctive relief. The amounts payable as liquidated damages shall be paid monthly within 10 business days of the last day of each month following the commencement of the Blackout Period until the termination of the Blackout Period. Such payments shall be made to each holder at the sole option of the Company in either cash or shares of Common Stock. Furthermore, the damages payable to each holder shall not exceed 6% of the aggregate amount invested by such holder. At September 30, 2011, the Company had not filed the required registration statement and accrued $16,575 of liquidated damages. Therefore, we issued 63,750 shares of common stock valued at $0.26 per share, which was the closing price of our common stock on September 30, 2011 (an aggregate of $16,750.26) to the private placement shareholders as payment of liquidated damages.
Effective March 16, 2011, the Company issued 144,000 shares of its common stock to a note holder pursuant to the conversion of a $15,000 promissory note dated January 21, 2011, issued by Hyperlocal. Such promissory note automatically converted into shares of the Company’s common stock upon closing of the Merger Agreement.
Effective March 16, 2011, the Company issued 250,000 shares of common stock to the holder of Hyperlocal promissory notes dated December 10, 2010 and February 3, 2011 in the aggregate amount of $31,250 for financing costs.
Effective March 16, 2011, the Company issued 100,000 shares of common stock to a service provider in consideration of legal and business advisory services.
Effective March 24, 2011, the Company issued a warrant exercisable to purchase 500,000 shares of the Company’s common stock at a price per share of $0.25 for a period of 3 years. The warrant was issued pursuant to the terms of an advisory services agreement.
On July 7, 2011, the Company granted options to purchase 200,000 shares of its common stock having an exercise price of $0.26 per share to a consultant. Options to purchase 100,000 shares are exercisable upon the date of grant and the remaining options to purchase 100,000 shares are exercisable six months from the date of grant. The options expire on July 7, 2012. The options were issued pursuant to the terms of an advisory services agreement.
On July 7, 2011, the Company issued options to purchase 100,000 shares of its common stock to a consultant at an exercise price of $0.26 per share. The options vest immediately. The options expire on July 7, 2013. The options were issued pursuant to the terms of an advisory services agreement.
On July 7, 2011, the Company issued options to purchase 100,000 shares of its common stock to an employee at an exercise price of $0.26 per share. The options vest immediately. The options expire on July 7, 2013. The options were issued pursuant to the terms of an option agreement.
During July and August 2011, the Company received subscriptions for the purchase of an aggregate of 2,080,000 shares of its common stock from 11 subscribers at a purchase price of $0.125 per share for gross proceeds of $260,000. No fees or commissions were paid in connection with the subscriptions.
During September 2011, we issued 200,000 shares of common stock and options to purchase 300,000 shares of common stock exercisable at $0.18 per share to a consultant. The shares and options were issued in partial consideration of marketing services. The options are exercisable for a period of 3 years.
During September 2011, the Company has issued warrants to purchase an aggregate of 10,000,000 shares of common stock to 8 consultants. The warrants are exercisable for a period of 3 years at prices ranging from $0.16 per share to $0.23 per share. The warrants were issued in consideration of business consulting services. There are 2,000,000 warrants exercisable at $0.16 per share that are currently vested. None of the warrants exercisable at $0.23 are currently vested. Warrants exercisable at $0.23 vest as follows: warrants to purchase 2,665,999 shares vest on September 8, 2012; warrants to purchase 2,666,001 shares vest on September 8, 2013; and warrants to purchase 2,668,000 shares vest on September 8, 2014.
The Company will receive up to $2,443,000, in the event the warrants and options are exercised. The proceeds, if any, will be used for general working capital purposes.
Forward-Looking Statements
This prospectus contains forward-looking statements that address, among other things, our strategy to develop our business, projected capital expenditures, liquidity, and our development of additional revenue sources. The forward-looking statements are based on our current expectations and are subject to risks, uncertainties and assumptions. We base these forward-looking statements on information currently available to us, and we assume no obligation to update them. Our actual results may differ materially from the results anticipated in these forward-looking statements, due to various factors.
SUMMARY FINANCIAL DATA
In the table below, we provide you with historical summary financial information for the period from inception (January 22, 2010) through December 31, 2010, derived from the audited financial statements included elsewhere in this prospectus. We also provide below consolidated financial information for the nine months ended September 30, 2011 derived from our unaudited consolidated financial statements included elsewhere in this prospectus. Historical results are not necessarily indicative of the results that may be expected for any future period. When you read this historical summary consolidated financial information, you should also consider the historical financial statements and related notes, and the section entitled Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Statements of Operations Data:
|
| Period From Inception (January 22, 2010) 2010 |
| Nine Months Ended September 30, 2011 |
| Period From Inception | |||
|
|
|
|
| (unaudited) |
| (unaudited) | ||
Revenues |
| $ | 28,973 |
| $ | 25,928 |
| $ | 54,901 |
Total operating expenses |
| $ | 283,309 |
| $ | 1,064,139 |
| $ | 1,347,448 |
Net Loss |
| $ | (254,336 | ) | $ | (1,089,512 | ) | $ | (1,343,848) |
Net Loss per share – basic and fully diluted |
| $ | (0.01 | ) | $ | (0.03 | ) | $ | (0.05) |
Weighted average shares outstanding |
|
| 19,431,624 |
|
| 34,487,551 |
|
| 26,104,137 |
Balance Sheet Data:
|
| As of December 31, 2010 |
| As of 2011 |
| ||
|
|
|
|
| (unaudited) |
| |
Current assets |
| $ | 16,071 |
| $ | 137,154 |
|
Total assets |
| $ | 41,354 |
| $ | 165,096 |
|
Total liabilities |
| $ | 22,960 |
| $ | 40,546 |
|
Working capital (deficit) |
| $ | (6,889 | ) | $ | 96,608 |
|
|
| $ | 18,394 |
| $ | 124,550 |
|
CAPITALIZATION
The following tables set forth our capitalization as of September 30, 2011. The tables should be read in conjunction with our consolidated unaudited financial statements and related notes included elsewhere in this prospectus.
Current Liabilities |
|
|
|
| $ | 40,546 |
|
Shareholders’ equity: |
|
|
|
|
|
|
|
Preferred Stock, $0.001 par value, 5,000,000 shares authorized, |
|
|
|
|
| --- |
|
Common stock, $0.001 par value, 195,000,000 shares authorized, |
|
|
|
|
| 44,645 |
|
Additional paid-in capital |
|
|
|
|
| 1,423,753 |
|
Deficit accumulated during development stage |
|
|
|
|
| (1,343,848 | ) |
Total |
|
|
|
|
| 124,550 |
|
|
|
|
|
|
|
|
|
Total liabilities and |
|
|
|
| $ | 165,096 |
|
RISK FACTORS
You should carefully consider the risks described below and theas well as other information provided to you in this Prospectus before investingdocument, including information in our common stock.the section of this document entitled “Forward Looking Statements.” If any of the following risks actually occur, ourthe Company’s business, operating results, and financial condition or results of operations could be seriously harmed. The trading pricematerially adversely affected, the value of ourthe Company common stock could decline, due to any of these risks, and you may lose all or part of your investment.
COMPANY RISK FACTORS
- --------------------
1. SINCE WE ARE A DEVELOPMENT STAGE COMPANY, WE HAVE GENERATED NO REVENUES
AND LACK AN OPERATING HISTORY, AN INVESTMENT IN THE SHARES OFFERED HEREIN IS
HIGHLY RISKY AND COULD RESULT IN A COMPLETE LOSS OF YOUR INVESTMENT IF WE ARE
UNSUCCESSFUL IN OUR BUSINESS PLAN.
Risks Related to Our company was incorporated on May 30, 2006; we have not yet commenced
our business operations;Business and we have not yet realized any revenues. We have
no operating history upon which an evaluation of our future prospects can be
made. Based upon current plans, we expect to incur operating losses in
future periods as we incur significant expenses associated with the initial
startup of our business. Further, there are no assurances that we will be
successful in realizing revenues or in achieving or sustaining positive cash
flow at any time in the future. Any such failure could result in the
possible closure of our business or force us to seek additional capital
through loans or additional sales of our equity securities to continue
business operations, which would dilute the value of any shares you purchase
in this offering.
6
2. IF OUR BUSINESS PLAN IS NOT SUCCESSFUL, WE MAY NOT BE ABLE TO CONTINUE
OPERATIONS AS A GOING CONCERN AND OUR STOCKHOLDERS MAY LOSE THEIR ENTIRE
INVESTMENT IN US.
As discussed in the Notes to Financial Statements included in this
registration statement, at September 30, 2008 we had no working capital and
no stockholders' equity. In addition, we had a net loss of approximately
$11,513 for the period May 30, 2006 (inception) to September 30, 2008.
These factors raise substantial doubt that we will be able to continue
operations as a going concern, and ourIndustry
Our independent auditors included an
explanatory paragraph regarding this uncertainty in their report on our
financial statements for the period May 30, 2006 (inception) to September
30, 2008. Our ability to continue as a going concern is dependent upon our
generating cash flow sufficient to fund operations and reducing operating
expenses. Our business plans may not be successful in addressing these
issues. If we cannot continue as a going concern, our stockholders may lose
their entire investment in us.
3. WE EXPECT LOSSES IN THE FUTURE BECAUSE WE HAVE NO REVENUES.
We have not generated any revenues, we are expect losses over the next
twelve (12) to twenty-four (24) months since we have no revenues to offset
the expenses associated in executing our business plan. We cannot guarantee
that we will ever be successful in generating revenues in the future. We
recognize that if we are unable to generate revenues, we will not be able to
earn profits or continue operations as a going concern. There is no history
upon which to base any assumption as to the likelihood that we will prove
successful, and we can provide investors with no assurance that we will
generate any operating revenues or ever achieve profitable operations.
4. SINCE OUR OFFICER WORKS OR CONSULTS FOR OTHER COMPANIES, HIS OTHER
ACTIVITIES COULD SLOW DOWN OUR OPERATIONS.
Chad Guidry, our sole officer, does not work for us exclusively and
does not devote all of his time to our operations. Therefore, it is possible
that a conflict of interest with regard to his time may arise based on his
employment in other activities. His other activities will prevent him from
devoting full-time to our operations which could slow our operations and may
reduce our financial results because of the slow down in operations.
7
Chad Guidry, the President and Director of the company, currently
devotes approximately 15-20 hours per week to company matters. The
responsibility of developing the company's business, the offering and selling
of the shares through this prospectus and fulfilling the reporting
requirements of a public company all fall upon Mr. Guidry. He has no
prior experience serving as a principal accounting officer or principal
financial officer in a public company. We have not formulated a plan to
resolve any possible conflict of interest with his other business activities.
Mr. Guidry intends to limit his role in his other business activities and
devote more of his time to Nevada Processing Services, Inc. after we attain a
sufficient level of revenue and are able to provide sufficient officers'
salaries per our business plan. In the event he is unable to fulfill any
aspect of his duties to the company we may experience a shortfall or complete
lack of sales resulting in little or no profits and eventual closure of the
business.
5. IF WE ARE UNABLE TO OBTAIN ADDITIONAL FUNDING, OUR BUSINESS OPERATIONS
WILL BE HARMED. EVEN IF WE DO OBTAIN ADDITIONAL FINANCING OUR THEN EXISTING
SHAREHOLDERS MAY SUFFER SUBSTANTIAL DILUTION.
We will require additional funds to obtain the resources to develop and
implement a marketing and sales program and address all necessary
infrastructure concerns. We anticipate that we will require up to
approximately $100,000 to fund our continued operations. Such funds may come
from the sale of equity and/or debt securities and/or loans. It is possible
that additional capital will be required to effectively support the
operations and to otherwise implement our overall business strategy. The
inability to raise the required capital will restrict our ability to grow and
may reduce our ability to continue to conduct business operations. If we are
unable to obtain necessary financing, we will likely be required to curtail
our development plans which could cause the company to become dormant. Any
additional equity financing may involve substantial dilution to our then
existing shareholders.
6. WE MAY NOT BE ABLE TO RAISE SUFFICIENT CAPITAL OR GENERATE ADEQUATE
REVENUE TO MEET OUR OBLIGATIONS AND FUND OUR OPERATING EXPENSES.
As of September 30, 2008, the Company had no working cash and equivalents.
The Company needs at least one hundred thousand dollars ($100,000) in order
advance its business plan.
There are no guarantees given that the Company will be able to find the
necessary financing or the necessary financing will be available, if required
or if available, will be on terms and conditions satisfactory to management.
The above outlined capital problems which could significantly affect the
value of any Common Shares and could result in the loss of an investor's
entire investment.
8
Failure to raise adequate capital and generate adequate sales revenues to
meet our obligations and develop and sustain our operations could result in
reducing or ceasing our operations. Additionally, even if we do raise
sufficient capital and generate revenues to support our operating expenses,
there can be no assurances that the revenue will be sufficient to enable us
to develop business to a level where it will generate profits and cash flows
from operations. These matters raiseraised substantial doubt about our ability to continue as a going concern.
As an early stage company, we have not yet generated significant revenues. We have incurred operating losses since its inception and will continue to incur net losses until we can produce sufficient revenues to cover its costs. Our independent auditors currentlyhave included in their audit report an explanatory paragraph in their report onthat states that our financial statements regarding
concernsnet loss and working capital deficiency raises substantial doubt about our ability to continue as a going concern.
7. WE MAY NOT BE ABLE TO COMPETE WITH OTHER LOAN PROCESSING COMPANIES, WHO
HAVE GREATER RESOURCES AND EXPERIENCE THAN WE DO.
The loan processing industry
We have a limited operating history, have incurred net losses in the past and expect to incur net losses in the future.
We have a limited operating history and has not recorded a profit since inception. As a result of this, and the uncertainty of the market in which we operate, we cannot reliably forecast our future results of operations. We expect to increase its operating expenses in the future as a result of developing, refining and implementing a sales strategy.
As of September 30, 2011 we have incurred net losses from inception of $1,343,848. There is highly competitive, and subjectno guarantee we will be profitable in the future. In addition, we expect our operating expenses to rapid
change. We doincrease in the future as we expand our operations. If our operating expenses exceed our expectations, our financial performance could be adversely affected. If our revenue does not grow to offset these increased expenses, we may not be profitable in any future period. Our recent revenue growth may not be indicative of our future performance. In future periods, we may not have any revenue growth, or our revenue could decline.
We have a short operating history and a new business model in an emerging and rapidly evolving market. This makes it difficult to evaluate our future prospects and increases the resourcesrisk of your investment.
We have very little operating history for you to compete with the large mortgage loan
processors. Competition by existing andevaluate in assessing our future competitors could
result in our inability to secure profitable events. This competition from
other entities with greater resources and reputations may result in our
failure to maintain or expandprospects. You must consider our business and prospects in light of the risks and difficulties we will encounter as wean early-stage company in a new and rapidly evolving market. We may nevernot be able to successfully executeaddress these risks and difficulties, which could materially harm our business plan. Further, Nevada Processing
Services, Inc.and operating results. In addition, we do not know if our current business model will operate effectively during the current economic downturn. Furthermore, we are unable to predict the likely duration and severity of the adverse economic conditions in the U.S. and other countries, but the longer the duration the greater risks we face in operating our business. There can be no assurance, therefore, that current economic conditions or worsening economic conditions, or a prolonged or recurring recession, will not have a significant adverse impact on our operating and financial results.
We cannot be assuredassure you that itwe will be able to compete successfully
against presentdevelop the infrastructure necessary to achieve the potential sales growth.
Achieving revenue growth will require that we develop additional infrastructure in sales, technical and client support functions. We cannot assure you that we can develop this infrastructure or future competitors or that the competitive pressure it may
face will not force it to cease operations.
8. OUR PRINCIPAL STOCKHOLDERS, OFFICERS AND DIRECTORS OWN A CONTROLLING
INTEREST IN OUR VOTING STOCK AND INVESTORS WILL NOT HAVE ANY VOICE IN OUR
MANAGEMENT, WHICH COULD RESULT IN DECISIONS ADVERSE TO OUR GENERAL
SHAREHOLDERS.
Our sole officer beneficially owns approximately or have the rightcapital to vote
approximately 92%do so. We will continue to design plans to establish growth, adding sales and sales support resources as capital permits, but at this time these plans are untested. If we are unable to use any of our outstanding common stock. Ascurrent marketing initiatives or the cost of such initiatives were to significantly increase or such initiatives or its efforts to satisfy existing clients are not successful, we may not be able to attract new clients or retain existing clients on a cost-effective basis and, as a result, our sole
officer will have the ability to control substantially all matters submitted
to our stockholders for approval including:
a) election of our board of directors;
b) removal of any of our directors;
9
c) amendment of our Articles of Incorporation or bylaws; and
d) adoption of measures that could delay or prevent a change in control or
impede a merger, takeover or other business combination involving us.
As a result of his ownership and positions, this individual has the ability
to influence all matters requiring shareholder approval, including the
election of directors and approval of significant corporate transactions. In
addition, the future prospect of sales of significant amounts of shares held
by our director and executive officer could affect the market price of our
common stock if the marketplace does not orderly adjust to the increase in
shares in the market and the value of your investment in the company may
decrease. Management's stock ownership may discourage a potential acquirer
from making a tender offer or otherwise attempting to obtain control of us,
which in turn could reduce our stock price or prevent our stockholders from
realizing a premium over our stock price.
9. CHANGES IN CONSUMER PREFERENCES COULD REDUCE DEMAND FOR OUR SERVICES.
Any change in the preferences of our potential corporate customers that we
fail to anticipate could reduce the demand for the loan processing services we
intend to provide. Decisions about our focus and the specific services we
plan to offer are often made in advance of customers contracting us. Failure
to anticipate and respond to changes in consumer preferences and demands
could lead to, among other things, customer dissatisfaction, failure to
attract demand for our services and lower profit margins.
10. OUR BUSINESS MAY SUFFER IF WE FAIL TO MEET THE EXPECTATIONS OF OUR
CUSTOMERS.
Our business model will rely in part on referrals to, and operating in
concert with, various third parties, such as mortgage brokers, banks,
and other financial institutions. If we fail to meet the expectations of our
future customers, who include these third parties, who at the present time
are unidentified, our reputationrevenue and results of operation willoperations would be negatively
impacted.
11. CONFLICTS OF INTEREST FACED BY THE TOP MANAGEMENT OF NEVADA PROCESSING
SOLUTIONS MAY JEOPARDIZE THE BUSINESS CONTINUITY OF NEVADA PROCESSING
SOLUTIONS.
affected adversely.
The operations of Nevada Processing Solutions depend substantially on the
skillsmarkets that we are targeting for revenue opportunities are new and experience of Chad Guidry. Without employment contracts,rapidly developing and may change before we may lose Mr. Guidry to other pursuits without a sufficient warningcan access them.
The markets for traditional Internet and consequently, go out of business. Mr. Guidry may, in the future, become
involved in other business opportunities. If a specific business opportunity
becomes available, this individual may face a conflict in selecting between
Nevada Processing Solutions and his other business interests. Nevada
Processing Solution has not formulated a policy for the resolution of such
conflicts.
10
12. WE DEPEND ON OUR RELATIONSHIPS WITH TRAVEL SUPPLIERS AND VENDORS AND ANY
ADVERSE CHANGES IN THESE RELATIONSHIPS COULD ADVERSELY AFFECT OUR BUSINESS,
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
An important component of our business success depends on the ability to
maintain its existing, as well as build new, relationships with travel
suppliers and vendors. Adverse changes in existing relationships, or our
inability to enter into new arrangements with these parties on favorable
terms, if at all, could reduce the amount, quality and breadth of
attractively priced travelmobile Web products and services that we are targeting for revenue opportunities are changing rapidly and are being pursued by many other companies, and the barriers to entry are relatively low. We cannot provide assurance that we will be able to offer,realize these revenue opportunities before they change or before other companies dominate the market. Furthermore, we have based certain of our revenue opportunities on statistics provided by third party industry sources. Such statistics are based on ever changing customer preferences due to our rapidly changing industry. These statistics, including some of the statistics referenced in this memorandum, have not been independently verified by our company. With the introduction of new technologies and the influx of new entrants to the market, we expect competition to persist and intensify in the future, which could adversely affect the business, financial conditionharm our ability to increase sales, limit client attrition and results of
operations.
13. IF OUR MARKETING EFFORTS ARE NOT EFFECTIVE, OUR SERVICES MAY NOT ACHIEVE
THE BROAD RECOGNITION NECESSARY TO OUR SUCCESS IN THE TARGET TERRITORIES.maintain our prices.
We may need additional capital to fund our operations, which, if obtained, could result in dilution or significant debt service obligations. We may not be able to build successfully recognitionobtain additional capital on commercially reasonable terms, which could adversely affect our liquidity and favorable perceptionfinancial position.
We believe that we will require additional capital to fund the anticipated expansion of our services in a mannerbusiness and to pursue targeted revenue opportunities. We cannot assure you that we will enablebe able to raise additional capital. If we are able to raise additional capital, we do not know what the terms of any such capital raising would be. In addition, any future sale of our equity securities would dilute the ownership and control of your shares and could be at prices substantially below prices at which our shares currently trade. Our inability to raise capital could require us to expandsignificantly curtail or terminate our business in a
cost-effectiveoperations. We may seek to increase our cash reserves through the sale of additional equity or timely manner. If our services will not be received
favorably by our customers, our reputation could be damaged.debt securities. The lacksale of market acceptance of our services will not allow us to generate satisfactory
net sales and could harm our business.
14. AN INCREASE IN INTEREST RATES COULD HARM OUR BUSINESS.
An increase in interest ratesconvertible debt securities or additional equity securities could result in a reductionadditional dilution to our shareholders. The incurrence of loan volumeindebtedness would result in increased debt service obligations and subsequently a decreasecould result in demand foroperating and financing covenants that would restrict our loan processing services. Our
business is sensitive to market conditions. As the market for mortgage loans
decrease, the demand for our services would decrease accordingly.
15. TECHNOLOGY FAILURES COULD DAMAGE OUR BUSINESS OPERATIONS AND INCREASE
OUR COSTS.
The financial services industry as a whole is characterized by rapidly
changing technologies,operations and system disruptions and failures may interrupt or
delayliquidity. In addition, our ability to provideobtain additional capital on acceptable terms is subject to a variety of uncertainties. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all. Any failure to raise additional funds on favorable terms could have a material adverse effect on our liquidity and financial condition.
We face significant competition from large and small companies offering products and services related to our customers. The secure
transmissionmobile marketing technologies and services, targeted advertising delivery and the delivery of confidential information over the Internet is essential to
our maintaining consumer confidence in certain of our services. Security
breaches, acts of vandalismWeb-based video.
Our current and developments in computer capabilities could
result in a compromise or breach of the technology thatpotential competitors may have significantly more financial, technical, marketing and other resources than we use to protect our
customers' personal informationdo and transaction data. Consumers generally
are concerned with security breaches and privacy on the Internet, and
Congress or individual states could enact new laws regulating the electronic
commerce market that could adversely affect us.
11
16. FAILURE TO ACHIEVE AND MAINTAIN EFFECTIVE INTERNAL CONTROLS IN
ACCORDANCE WITH SECTION 404 OF THE SARBANES-OXLEY ACT COULD HAVE A MATERIAL
ADVERSE EFFECT ON OUR BUSINESS AND OPERATING RESULTS.
It may be time consuming, difficult,able to devote greater resources to the development, promotion, sale and costly for ussupport of their products. Our current and potential competitors may have more extensive client bases and broader client relationships than our company. In addition, these companies may have longer operating histories and greater name recognition. These competitors may be better able to developrespond quickly to new technologies and implement the additional internal controls, processes and reporting
procedures required by the Sarbanes-Oxley Act. We may need to hire additional
financial reporting, internal auditing, and other finance staff in order to
develop and implement appropriate additional internal controls, processes,
and reporting procedures.undertake more extensive marketing campaigns. If we are unable to complycompete with these requirementssuch companies, we may never generate demand for our products.
If we fail to promote and maintain our brand in a cost-effective manner, we may lose (or fail to gain) market share and our revenue may decrease.
We believe that developing and maintaining awareness of the Sarbanes-Oxley Act,PayMeOn brands in a cost-effective manner is critical to its goal of achieving widespread acceptance of our existing and future technologies and services and attracting new clients. Furthermore, we believe that the importance of brand recognition will increase as competition in our industry increases. Successful promotion of the brand will depend largely on the effectiveness of our marketing efforts and the effectiveness and affordability of our products and services for our target client demographic. Historically, efforts to build brand recognition have involved significant expense, and it is likely that our future marketing efforts will require us to incur significant expenses. Such brand promotion activities may not yield increased revenue and, even if they do, any revenue increases may not offset the expenses we incur to promote our brand. If we fail to successfully promote and maintain the brand, or if we incur substantial expenses in an unsuccessful attempt to promote and maintain the brand, we may lose existing clients to our competitors or be unable to attract new clients, which would cause revenue to decrease.
If we do not innovate and provide products and services that are useful to users, revenues and operating results could suffer.
Our success depends on providing products and services that client’s use to promote their brandsand products via mobile Web or other Web-based advertising. Competitors are constantly developing innovations in customized communications, including technologies and services related to mobile marketing and targeted ad delivery. As a result, we must continue to invest significant resources in research and development in order to enhance existing products and services and introduce new high-quality products and services that people will use. If we are unable to predict user preferences or industry changes, if we are unable to manage our projects or product enhancements, or if we are unable to modify our products and services on a timely basis, we may lose users, clients and advertisers. Our operating results would also suffer if innovations are not responsive to the needs of users, clients and advertisers, are not appropriately timed with market opportunity or are not effectively brought to market.
The success of our business depends on the continued growth and acceptance of mobile marketing/advertising as a communications tool, and the related expansion and reliability of the Internet infrastructure. If consumers do not continue to use the mobile Web or alternative communications tools gain popularity, demand for our marketing and advertising technologies and services may decline.
The future success of our business depends on the continued and widespread adoption of mobile marketing as a significant means of advertising and marketing communication. Security problems such as “viruses,” “worms” and other malicious programs or reliability issues arising from outages and damage to the Internet infrastructure could create the perception that mobile or Web-based marketing/advertising is not a safe and reliable means of communication, which would discourage businesses and consumers from using such methods. Any decrease in the use of mobile devices or Web-based video resources would reduce demand for our marketing technologies and services and harm our business.
If we fail to manage our anticipated growth, our business and operating results could be harmed.
If we do not effectively manage our anticipated growth, the quality of our products and services could suffer, which could negatively affect our brand and operating results. To effectively manage our potential growth, we will need to improve our operational, financial and management controls and our reporting systems and procedures. These systems enhancements and improvements may require significant capital expenditures and allocation of valuable management resources. If the improvements are not implemented successfully, our ability to manage our growth will be impaired and we may have to make significant additional expenditures to address these issues, which could harm our financial position.
Our relationships with our channel partners may be terminated or may not continue to be beneficial in generating new clients, which could adversely affect our ability to increase our client base.
We maintain a network of active channel partners which refer clients to us within different business verticals. If we are unable to maintain contractual relationships with existing channel partners or establish new contractual relationships with potential channel partners, we may experience delays and increased costs in adding clients, which could have a material adverse effect on us. The number of clients we are able to add through these marketing relationships is dependent on the marketing efforts of our partners over which we exercise very little control.
Competition for employees in our industry is intense, and we may not be able to obtainattract and retain the independent
accountant certifications thathighly skilled employees whom we need to support our business.
Competition for highly skilled technical and marketing personnel is intense and we continue to face difficulty identifying and hiring qualified personnel in certain areas of our business. We may not be able to hire and retain such personnel at compensation levels consistent with existing compensation structure. Many of the Sarbanes-Oxley Act requirescompanies with which we compete for experienced employees have greater resources than we have and may be able to offer more attractive terms of publicly
traded companies.employment. In particular, candidates making employment decisions, particularly in high-technology industries, often consider the value of any equity they may receive in connection with their employment. As a result, any significant volatility in the price of our stock may adversely affect our ability to attract or retain highly skilled technical and marketing personnel.
In addition, we invest significant time and expense in training employees, which increases their value to competitors who may seek to recruit them. If we fail to complyretain our employees, we could incur significant expenses in hiring and training their replacements and the quality of our services and our ability to serve our clients could diminish, resulting in a material adverse effect on our business.
We may be unable to protect our intellectual property rights and any inability to protect them could reduce the value of our products, services and brand.
Excluding the filing of trademark protection for “social income”, we have not filed with any regulatory authority for patent or trademark protection. We intend to protect our unpatented trade secrets and know-how through confidentiality or license agreements with third parties, employees and consultants, and by controlling access to and distribution of our proprietary information. However, this method may not afford complete protection particularly in foreign countries where the laws may not protect our proprietary rights as fully as in the United States and unauthorized parties may copy or otherwise obtain and use our products, processes or technology and there can be no assurance that others will not independently develop similar know-how and trade secrets. If third parties take actions that affect our rights or the value of our intellectual property, similar proprietary rights or reputation or we are unable to protect our intellectual property from infringement or misappropriation, other companies may be able to use our proprietary know-how to offer competitive products at lower prices and we may not be able to effectively compete against these companies.
We may in the future be subject to intellectual property rights claims, which are costly to defend, could require us to pay damages and could limit our ability to use certain technologies in the future.
Companies in the internet, technology and media industries own large numbers of patents, copyrights, trademarks and trade secrets and frequently enter into litigation based on allegations of infringement or other violations of intellectual property rights. As we face increasing competition, the possibility of intellectual property rights claims against us grows. Our technologies may not be able to withstand any third-party claims or rights against their use. Any intellectual property claims, with or without merit, could be time-consuming, expensive to litigate or settle and could divert management resources and attention.
With respect to any intellectual property rights claim, we may have to pay damages or stop using technology found to be in violation of a third party’s rights. We may have to seek a license for the technology, which may not be available on reasonable terms and may significantly increase our operating expenses. We have not fully reviewed and assessed the potential intellectual claims centered on our latest asset purchases, mergers, or acquisitions to evaluate any technology licenses required. The technology also may not be available for license to us at all. As a result, we may also be required to develop alternative non-infringing technology, which could require significant effort and expense. If we cannot license or develop technology for the infringing aspects of our business, we may be forced to limit our product and service offerings and may be unable to compete effectively. Any of these results could harm our brand and operating results.
Our ability to offer our products and services may be affected by a variety of U.S. and foreign laws.
The laws relating to the liability of providers of online and mobile marketing services for activities of their users are in their infancy and currently unsettled both within the U.S. and abroad. Future regulations could affect our ability to provide current or future programming.
We will depend on the services of Edward Cespedes and the loss of Mr. Cespedes or failure of Mr. Cespedes to dedicate all of his time to our business could materially harm our company.
We rely on Edward Cespedes, as our sole officer and director. While Mr. Cespedes currently dedicates substantially all of his time to our company, he is not required to dedicate all of his time and resources to our company. The loss of the services of Mr. Cespedes or Mr. Cespedes’ inability to dedicate 100% of his time and resources to our company could materially harm our business. In addition, we do not presently maintain a key-man life insurance policy on Mr. Cespedes.
Our future depends, in part, on our ability to attract and retain key personnel. Our future also depends on the continued contributions of other key technical and marketing personnel. The loss of key personnel and the process to replace any of our key personnel would involve significant time and expense, may take longer than anticipated and may significantly delay or prevent the achievement of our business objectives.
We currently have no independent directors, which poses a risk for us from a corporate governance perspective.
Edward Cespedes, our only executive officer, also serves as our only director. Our director and executive officer is required to make interested party decisions, such as the approval of related party transactions, his level of his compensation, and oversight of our accounting function. Our director and executive officer also exercises substantial control over all matters requiring stockholder approval, including the nomination of directors and the approval of significant corporate transactions. Due to our lack of independent directors, we have not implemented various corporate governance measures, the absence of which may cause stockholders to have more limited protections against transactions implemented by our board of directors, conflicts of interest and similar matters. Stockholders should bear in mind our current lack of corporate governance measures in formulating their investment decisions.
Our current management must manage transition to a reporting company which may put us at a competitive disadvantage.
Our management team may not successfully or efficiently manage our transition into a public company that will be subject to significant regulatory oversight and reporting obligations under federal securities laws. In particular, these new obligations will require substantial attention from our executive officers and may divert their attention away from the day-to-day management of our business, which would materially and adversely impact our business operations. Hyperlocal intends to hire additional executive level employees, but there can be no assurance that our current or future management team will be able to implement and affect programs and policies in an effective and timely manner that adequately respond to such increased legal, regulatory compliance, and reporting requirements. Our failure to do so could lead to penalties, loss of trading liquidity, and regulatory actions and further result in the deterioration of our business through the redirection of resources.
Problems with third party hosting companies or our inability to receive third party approvals for our products could harm us.
We rely on third-party hosting companies. Any disruption in the network access or co-location services provided by these third-party providers or any failure of these third-party providers to handle current or higher volumes of use could significantly harm our business. In addition, we depend on third parties to approve our products. If such approvals are unable to be obtained or are not obtained in a timely mannerfashion, our ability to access additional users and customers from those products would be significantly diminished.
Our business depends on the growth and maintenance of the Internet infrastructure.
Our success will depend on the continued growth and maintenance of the internet infrastructure. This includes maintenance of a reliable network backbone with the requirementsnecessary speed, data capacity and security for providing reliable internet services. Internet infrastructure may be unable to support the demands placed on it if the number of Section 404internet users continues to increase or if existing or future internet users access the internet more often or increase their bandwidth requirements. In addition, viruses, worms and similar programs may harm the performance of the Sarbanes-Oxley Act regarding internal control over financial reporting
orinternet. The internet has experienced a variety of outages and other delays as a result of damage to remedy any material weaknessesportions of its infrastructure, and it could face outages and delays in the future. These outages and delays could reduce the level of Internet usage as well as our internal controls thatability to provide our solutions.
Our operating results may fluctuate.
Our operating results may fluctuate as a result of a number of factors, many of which are outside of our control. The following factors may affect our operating results:
·
Our ability to compete effectively.
·
Our ability to continue to attract clients.
·
Our ability to attract revenue from advertisers and sponsors.
·
The amount and timing of operating costs and capital expenditures related to the maintenance and expansion of our business, operations and infrastructure.
·
General economic conditions and those economic conditions specific to the internet and internet advertising.
·
Our ability to keep our websites operational at a reasonable cost and without service interruptions.
·
The success of our product expansion.
·
Our ability to attract, motivate and retain top-quality employees.
Failure to retain and attract qualified personnel could harm our business.
Aside from Mr. Cespedes, our success depends on our ability to attract, train and retain qualified personnel. Competition for qualified personnel is intense and we may identify,not be able to hire sufficient personnel to support the anticipated growth of our business. If we fail to attract and retain qualified personnel, our business will suffer. Additionally, companies whose Employees accept positions with competitors often claim that such failurecompetitors have engaged in unfair hiring practices. We may receive such claims in the future as we seek to hire qualified Employees. We could resultincur substantial costs in material misstatements indefending against any such claims.
We may have difficulty managing any future growth.
The implementation of our business objectives, we may need to grow rapidly; brisk growth would lead to increased responsibility for both existing and new management personnel. In an effort to manage such growth, we must maintain and enhance our financial statements, cause investorsand accounting systems and controls, hire and integrate new personnel and manage expanded operations. Despite systems and controls, growth is expected to lose confidence inplace a significant strain on our reportedmanagement systems and resources. We will need to continue to improve our operational, managerial and financial informationcontrols, reporting systems and procedures, and will need to continue to expand, train and manage our work force. Failure to manage our future growth would have a negativematerial adverse effect on the trading pricequality of our common stock.
Pursuantoperations, ability to Section 404retain customers and key personnel and operating results and financial condition.
We may not be successful in finding or marketing new products.
Our business operations and financial performance depends on the ability to attract and market new products on a consistent basis. In the direct marketing industry, the average product life cycle varies from six months to four years, based on numerous factors, including competition, product features, distribution channels utilized, cost of the Sarbanes-Oxley Actgoods sold and current SEC
regulations, beginning with our annual report on Form 10-K for our fiscal
period ending July 31, 2008, we will be required to prepare assessments
regarding internal controls over financial reporting and beginning with our
Annual Report on Form 10-K for our fiscal period ending July 31, 2008,
furnish a reporteffectiveness of advertising. Less successful products have shorter life cycles. The majority of products are submitted by our management on our internal control over financial
reporting. We have begun the process of documenting and testing our internal
control procedures in order to satisfy these requirements, which is likely to
result in increased general and administrative expenses and may shift
management time and attention from revenue-generating activities to
compliance activities. While our management is expending significant
resources in an effort to complete this important project, thereinventors. There can be no assurance that we will be ablesuccessful in acquiring rights to achievequality products. We select new products based upon management’s expertise and limited market studies. As a result, we need to acquire the rights to quality products with sufficient margins and consumer appeal to justify the acquisition costs. There can be no assurance that chosen products will generate sufficient revenues to justify the acquisition and marketing costs.
Our industry is new and we are subject to uncertain regulation.
We are subject to a number of foreign and domestic laws and regulations that affect companies conducting business on the internet, many of which are still evolving and could be interpreted in ways that could harm our objectivebusiness. In the United States and abroad, laws relating to the liability of providers of online services for activities of their users and other third parties are currently being tested by a number of claims. These regulations and laws may involve taxation, tariffs, subscriber privacy, data protection, content, copyrights, distribution, electronic contracts and other communications, consumer protection, the provision of online payment services and the characteristics and quality of services. It is not clear how existing laws governing issues such as property ownership, sales and other taxes, libel and personal privacy apply to the internet as the vast majority of these laws were adopted prior to the advent of the internet and do not contemplate or address the unique issues raised by the internet or e-commerce. In addition, it is possible that governments of one or more countries may seek to censor content available on our websites or may even attempt to completely block access to our websites. Accordingly, adverse legal or regulatory developments could substantially harm our business.
The CARD Act, as well as the laws of most states, contain provisions governing product terms and conditions of gift cards, gift certificates, stored value or pre-paid cards or coupons (“gift cards”), such as provisions prohibiting or limiting the use of expiration dates on gift cards or the amount of fees charged in connection with gift cards or requiring specific disclosures on or in connection with gift cards. PayMeOn coupon, gift card, stored value or prepaid card offers generally are included within the definition of “gift cards” in many of these laws. In addition, certain foreign jurisdictions have laws that govern disclosure and certain product terms and conditions, including restrictions on expiration dates and fees that may apply to PayMeOn offers. However, the CARD Act as well as a timely basis.number of states and certain foreign jurisdictions also have exemptions from the operation of these provisions or otherwise modify the application of these provisions applicable to gift cards that are issued as part of a promotion or promotional program. If PayMeOn offers are subject to the CARD Act, and are not included in the exemption for promotional programs, it is possible that the purchase value, which is the amount equal to the price paid for the offer, or the promotional value, which is the add-on value of the offer in excess of the price paid, or both, may not expire before the later of (i) five years after the date on which the offer was issued or the date on which the customer
last loaded funds on the offer if the offer has a reloadable feature; (ii) the offers stated expiration date (if any), unless offers come within an exemption in the CARD Act for promotional programs; or (iii) a later date provided by applicable state law. In addition, regardless of whether an exemption for PayMeOn offers applies under the CARD Act, in those states that prohibit or otherwise restrict expiration dates on gift cards that are defined to include offers and that do not have exemptions that apply to the purchase value or the promotional value, or both, of offers, PayMeOn offers may be required to be honored for the full offer value (the total of purchase value and promotional value) until redeemed. There can be no assurance that as PayMeOn incorporates new requirements as detailed under the CARD Act that merchants will continue to offer PayMeOn offers.
In addition, some states and foreign jurisdictions also include gift cards under their unclaimed and abandoned property laws which require companies to remit to the government the value of the unredeemed balance on the gift cards after a specified period of time (generally between one and five years) and impose certain reporting and recordkeeping obligations. We do not remit any amounts relating to unredeemed PayMeOn offers based upon our assessment of applicable laws. The analysis of the potential application of the unclaimed and abandoned property laws to PayMeOn offers is complex, involving an analysis of constitutional and statutory provisions and factual issues, including our relationship with customers and merchants and our role as it relates to the issuance and delivery of our offers.
Regulation concerning data protection are evolving and the manner in which we handle personal data may be inconsistent with the interpretation of current laws.
Many states have passed laws requiring notification to subscribers when there is a security breach of personal data. There are also a number of legislative proposals pending before the U.S. Congress, various state legislative bodies and foreign governments concerning data protection. In addition, data protection laws in Europe and other jurisdictions outside the United States may be more restrictive, and the interpretation and application of these laws are still uncertain and in flux. It is possible that these laws may be interpreted and applied in a manner that is inconsistent with our data practices. If so, in addition to the possibility of fines, this could result in an order requiring that we change our data practices, which could have an adverse effect on our business. Furthermore, the Digital Millennium Copyright Act has provisions that limit, but do not necessarily eliminate, our liability for linking to third-party websites that include materials that infringe copyrights or other rights, so long as we comply with the statutory requirements of this act. Complying with these various laws could cause us to incur substantial costs or require us to change our business practices in a manner adverse to our business.
Our management has limited experience as a reporting company.
Our management team may not successfully or efficiently manage our transition to a reporting company subject to significant regulatory oversight and reporting obligations under federal securities laws. In particular, these new obligations will require substantial attention from our executive officers and may divert their attention from the day-to-day management of our business, which would materially and adversely impact our business operations. We will seek to hire additional executive level Employees with experience as a reporting company; however there can be no assurance that our auditorscurrent or future management team will be able to issue an
unqualified opinion on management's assessmentadequately respond to such increased legal, regulatory compliance, and reporting requirements. Our failure to do so could lead to penalties, loss of trading liquidity, and regulatory actions and further result in the effectivenessdeterioration of our internal control over financial reporting. Failurebusiness through the redirection of resources.
Risks Related to achieve and maintain an
effective internal control environment or complete our Section 404
certifications could have a material adverse effect on our stock price.
In addition, in connection with our on-going assessment of the effectiveness
of our internal control over financial reporting, wethis Offering
There may discover "material
weaknesses" in our internal controls as defined in standards established by the
Public Company Accounting Oversight Board, or the PCAOB. A material weakness is
a significant deficiency, or combination of significant deficiencies, that
results in more than a remote likelihood that a material misstatement of the
annual or interim financial statements will not be prevented or detected.
12
The PCAOB defines "significant deficiency" as a deficiency that results in
more than a remote likelihood that a misstatement of the financial statements
that is more than inconsequential will not be prevented or detected.
In the event that a material weakness is identified, we will employ qualified
personnel and adopt and implement policies and procedures to address any
material weaknesses that we identify. However, the process of designing and
implementing effective internal controls is a continuous effort that requires
us to anticipate and react to changes in our business and the economic and
regulatory environments and to expend significant resources to maintain a
system of internal controls that is adequate to satisfy our reporting
obligations as a public company. We cannot assure you that the measures we
will take will remediate any material weaknesses that we may identify or that
we will implement and maintain adequate controls over our financial process
and reportingsufficient liquidity in the future. Any failure to completemarket for our assessment of our
internal control over financial reporting, to remediate any material
weaknesses that we may identify or to implement new or improved controls, or
difficulties encounteredsecurities in their implementation, could harm our operating
results, cause us to fail to meet our reporting obligations, or result in
material misstatements in our financial statements. Any such failure could
also adversely affect the results of the periodic management evaluations of
our internal controls and, in the case of a failure to remediate any material
weaknesses that we may identify, would adversely affect the annual auditor
attestation reports regarding the effectiveness of our internal control over
financial reporting that are required under Section 404 of the Sarbanes-Oxley
Act. Inadequate internal controls could also causeorder for investors to lose
confidence in our reported financial information, which could have a negative
effect on the trading price of our common stock.
17. WE WILL INCUR INCREASED COSTS AS A RESULT OF BEING A PUBLIC COMPANY,
WHICH COULD AFFECT OUR PROFITABILITY AND OPERATING RESULTS.
The Sarbanes-Oxley Act of 2002 and the new rules subsequently implemented by
the Securities and Exchange Commissions, the NASDAQ National Market and the
Public Company Accounting Oversight Board have imposed various new
requirements on public companies, including requiring changes in corporate
governance practices. We expect these rules and regulations to increase our
legal and financial compliance costs and to make some activities more time-
consuming and costly. These costs could affect profitability and our results
of operations.
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RISK FACTORS RELATING TO OUR COMMON STOCK AND THIS OFFERING
- -----------------------------------------------------------
18. THERE IS NO PUBLIC (TRADING) MARKET FOR OUR COMMON STOCK AND THERE IS NO
ASSURANCE THAT THE COMMON STOCK WILL EVER TRADE ON A RECOGNIZED EXCHANGE OR
DEALERS' NETWORK; THEREFORE, OUR INVESTORS MAY NOT BE ABLE TO SELL THEIR
SHARES.
Our common stock is not listed on any exchange or quoted on any similar
quotation service, and theresell their securities.
There is currently noonly a limited public market for our common stock. We have not taken any steps to enable our common stock, to bewhich is quoted on the OTC Bulletin Board,Markets and there can providebe no assurance that our common stocka trading market will everdevelop further or be quoted on any quotation service or that anymaintained in the future.
The Shares are an illiquid investment and transferability of the Shares is subject to significant restriction.
There is presently a limited market for our common stock will ever develop. As a result, stockholders may be unable to
liquidate their investments, or may encounter considerable delay in selling
shares of our common stock. Neither we nor our selling stockholders have
engaged an underwriter for this offering, and we cannot assure yoube certain that any
brokerage firmthere will act asbe sufficient liquidity to allow for sale or transferability of the Shares within the near future. Therefore, the purchase of the Shares must be considered a market makerlong-term investment acceptable only for prospective investors who are willing and can afford to accept and bear the substantial risk of our securities.the investment for an indefinite period of time. A trading market
may not develop in the future, and if one does develop, itprospective investor, therefore, may not be sustained. Ifable to liquidate its investment, even in the event of an active trading market does develop,emergency, and Shares may not be acceptable as collateral for a loan.
As a former shell company, our shareholders may not be able to rely upon Rule 144 for the market priceresale of our
common stock is likelytheir shares.
In general, Rule 144 requires restricted securities to be highly volatile due to, among other things,held for a particular length of time and prescribes the nature of our business and because we are a new public company with a limited
operating history. Further, even if a public market develops, the volume of
trading in our common stock will presumablyconditions which must be limited and likely be
dominated by a few individual stockholders. The limited volume, if any, will
make the price of our common stock subject to manipulation by one or more
stockholders and will significantly limit the number of shares that one can
purchase or sell in a short period of time. The market price of our common
stock may also fluctuate significantly in responsesatisfied prior to the following factors,
mostsale of which are beyond our control:
o variations in our quarterly operating results;
o changes in general economic conditions and in the mortgage industry;
o announcements by us or our competitors of significant new contracts,
acquisitions, strategic partnerships or joint ventures, or capital
commitments;
o loss of a major customer, partner or joint venture participant; and
o the addition or loss of key managerial and collaborative personnel.
The equity markets have, on occasion, experienced significant price and
volume fluctuations that have affected the market prices for many companies'
securities and that have often been unrelated to the operating performance of
these companies. Any such fluctuations may adversely affect the market price
of our common stock, regardless of our actual operating performance. As a
result, stockholders may be unable to sell their shares, or may be forced to
sell them at a loss.
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19. OUR COMMON SHARES ARE SUBJECT TO THE "PENNY STOCK" RULES OF THE SEC AND
THE TRADING MARKET IN OUR SECURITIES IS LIMITED, WHICH MAKES TRANSACTIONS IN
OUR STOCK CUMBERSOME AND MAY REDUCE THE VALUE OF AN INVESTMENT IN OUR STOCK.securities. The Securities and Exchange Commission has adoptedcodified a staff interpretation relating to the treatment of the securities of former shell companies, of which we are one. Under the amendments, Rule 15g-9 which
establishes the definition of a "penny stock,"144 is not available for the purposes relevantresale of securities initially issued by a shell company (reporting or non-reporting) or a former shell company. Therefore, the securities held by our shareholders can be resold only through a resale registration statement unless certain conditions are met. These conditions include that the Company has filed all reports and other materials required to us,be filed by Section 13 or 15(d) of the Securities Exchange Act, as anyapplicable, during the preceding twelve months; and one year has elapsed since the Company has filed current “Form 10 information” with the Securities and Exchange Commission reflecting that is no longer a shell company. If these conditions are satisfied, then our shareholders can resell their securities subject to all other applicable Rule 144 conditions. See “Market for Common Equity and Related Stockholder Matters - Rule 144 Shares”.
Our shares are subject to the U.S. “Penny Stock” Rules and investors who purchase our shares may have difficulty re-selling their shares as the liquidity of the market for our shares may be adversely affected by the impact of the “Penny Stock” Rules.
Our stock is subject to U.S. “Penny Stock” rules, which may make the stock more difficult to trade on the open market. Our common shares are currently traded on the Pink Sheets or the OTCBB. A “penny stock” is generally defined by regulations of the SEC as an equity security that haswith a market price of less than $5.00 per share, or with an exercise price of less than $5.00 per share,unless the security is listed for trading on certain exchanges and subject to certain exceptions.
For any transaction involvingexemptions.
If an investor buys or sells a penny stock, unless exempt, the rules
require: (a)SEC regulations require that a broker or dealer approve a person's account for
transactions in penny stocks; and (b) the broker or dealer receive from the investor a written agreementreceive, prior to the transaction, setting forth the identity
and quantity of the penny stock to be purchased.
In order to approve a person's account for transactions in penny stocks, the
broker or dealer must: (a) obtain financial information and investment
experience objectives of the person; and (b) make a reasonable determination
that the transactions in penny stocks are suitable for that person and the
person has sufficient knowledge and experience in financial matters to be
capable of evaluating the risks of transactions in penny stocks.
The broker or dealer must also deliver, prior to any transaction in a penny
stock, a disclosure schedule prescribed by the Commission relating toexplaining the penny stock market and associated risks. Furthermore, trading in our common stock will be subject to Rule 15g-9 of the Exchange Act, which in highlight form: (a) sets forthrelates to non-NASDAQ and non-exchange listed securities. Under this rule, broker/dealers who recommend our securities to persons other than established customers and accredited investors must make a special written suitability determination for the basis on
whichpurchaser and receive the broker or dealer made the suitability determination; and (b) that
the broker or dealer received a signed,purchaser’s written agreement from the investorto a transaction prior to sale. Securities are exempt from this rule if their market price is at least $5.00 per share.
Since our common stock is currently deemed a penny stock, this may tend to reduce market liquidity of our common stock, because they limit the transaction. Generally,broker/dealers’ ability to trade, and a purchaser’s ability to sell, the stock in the secondary market.
The low price of our common stock has a negative effect on the amount and percentage of transaction costs paid by individual shareholders. The low price of our common stock also limits our ability to raise additional capital by issuing additional shares. There are several reasons for these effects. First, the internal policies of certain institutional investors prohibit the purchase of low-priced stocks. Second, many brokerage houses do not permit low-priced stocks to be used as collateral for margin accounts or to be purchased on margin. Third, some brokerage house policies and practices tend to discourage individual brokers from dealing in low-priced stocks. Finally, broker’s commissions on low-priced stocks usually represent a higher percentage of the stock price than commissions on higher priced stocks. As a result, the Company’s shareholders may be less willing to execute
transactionspay transaction costs that are a higher percentage of their total share value than if our share price were substantially higher.
Shares eligible for sale or convertible into shares in securities subject to the "penny stock" rules.future could negatively affect our stock price and dilute shareholders.
The market price of our common stock could decline as a result of sales of a large number of shares of our common stock or the perception that these sales could occur. This maymight also make it more difficult for investorsus to disposeraise funds through the issuance of securities. As of December 31, 2011, we had 44,646,539 issued and outstanding shares of common stock of which our officers and directors hold or control 10,503,117 shares of common stock, pursuant to Rule 13d-3 under the Exchange Act. We may also issue and/or register additional shares, options, or warrants in the future in connection with acquisitions, compensation or otherwise. We cannot predict what effect, if any, market sales of shares held by any stockholder or the availability of these shares for future sale will have on the market price of our Common shares and cause a
decline incommon stock.
The issuance of preferred stock could change control of the market value of our stock.
Disclosure also has to be made about the risks of investing in penny stocks
in both public offerings and in secondary trading and about the commissions
payable to both the broker-dealer and the registered representative, current
quotations for the securities and the rights and remedies available to an
investor in cases of fraud in penny stock transactions. Finally, monthly
statements have to be sent disclosing recent price information for the penny
stock held in the account and information on the limited market in penny
stocks.
15
20. WE MAY ISSUE SHARES OF PREFERRED STOCK IN THE FUTURE THAT MAY ADVERSELY
IMPACT YOUR RIGHTS AS HOLDERS OF OUR COMMON STOCK.
company.
Our articles of incorporation authorize usthe Board of Directors, without approval of the shareholders, to issue up to 5,000,000cause shares of "blank check" preferred stock. Accordingly, our boardstock to be issued in one or more series, with the numbers of directors will haveshares of each series to be determined by the authorityBoard of Directors. Our articles of incorporation further authorize the Board of Directors to fix and determine the powers, designations, preferences and relative, participating, optional or other rights and preferences of
preferred shares, as well as the authority to issue such shares,(including, without further stockholder approval. As a result, our board of directors could
authorize the issuance of a series of preferred stock that would grant to
holders preferredlimitation, voting powers, preferential rights to ourreceive dividends or assets upon liquidation, rights of conversion or exchange into common stock or preferred stock of any series, redemption provisions and sinking fund provisions) between series and between the right to receive
dividends before dividends are declared to holders of ourpreferred stock or any series thereof and the common stock, and the right to the redemptionqualifications, limitations or restrictions of such rights. In the event of issuance, preferred shares, together withstock could be used, under certain circumstances, as a premium, priormethod of discouraging, delaying or preventing a change of control of our company. Although we have no present plans to the redemption of the common stock. To the extent that we
do issue such additional series or shares of preferred stock, your rights as holders of
common stock could be impaired thereby, including, without limitation,
dilution of your ownership interests in us. In addition, shares of preferred
stock could be issued with terms calculated to delay or prevent a change in
control or make removal of management more difficult, which may not be in
your interest as holders of common stock.
21. WE DO NOT INTEND TO PAY DIVIDENDS AND THERE WILL BE LESS WAYS IN WHICH
YOU CAN MAKE A GAIN ON ANY INVESTMENT IN NEVADA PROCESSING SOLUTIONS, INC.
We have never paid any cash dividends and currently do not intend to pay any
dividends for the foreseeable future. To the extentwe can give no assurance that we require
additional funding currentlywill not provided fordo so in our financing plan, our
funding sources may likely prohibit the payment of a dividend. Because we do
not intend to declare dividends, any gain on an investment in Nevada
Processing Solutions will need to come through appreciationfuture.
FORWARD-LOOKING STATEMENTS
Some of the stock's
price.
22. THE SELLING STOCKHOLDERS MAY SELL THEIR SHARES OF COMMON STOCK IN THE
MARKET, WHICH SALES MAY CAUSE OUR STOCK PRICE TO DECLINE.
The selling stockholders may sellstatements contained in the public market up to 9,001,900 shares
of common stock being registered in this offering. That means that up to
9,001,900 shares may be sold pursuant to this registration statement. Such
sales may cause our stock price to decline. The officers and directors of the
Company and the non-registered shareholders will continue to be subject to
the provisions of various insider trading and rule 144 regulations.
Consequently, if shareholders are selling shares pursuant to the prospectus
underlying this registration statement it may be more difficult for us to
sell equity securities or equity-related securities in the future at a time
and price that our management deems acceptable or at all as public market
sales by our shareholder may deflate the market price of our stock.
16
23. THE SALE OF MATERIAL AMOUNTS OF COMMON STOCK UNDER THE ACCOMPANYING
REGISTRATION STATEMENT COULD ENCOURAGE SHORT SALES BY THIRD PARTIES.
In many circumstances the issuance of securities for companies that are traded onnot historical facts are “forward-looking statements” which can be identified by the OTCBB has the potential to cause a significant downward
pressure on the price of common stock. This is especially the case if the
shares being placed into the market exceed the market's ability to take up
the increased stock or if we have not performed in such a manner to show that
the debt raised will be used to grow the Company. Such an event could place
further downward pressure on the price of common stock.
If there are significant short sales of our stock, the price decline that
would result from this activity will cause our share price to decline more so
which in turn may cause long holders of our stock to sell their shares
thereby contributing to sales of stock in the market. If there is an
imbalance on the sell side of the market for our stock the price will
decline. It is not possible to predict if the circumstances where by a short
sales could materialize or to what our share price could drop. In some
companies that have been subjected to short sales their stock price has
dropped to near zero. We cannot provide any assurances that this situation
will not happen to us.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus contains forward-looking statements which involve assumptions
and describe our future plans, strategies, and expectations, are generally
identifiable by use of the words "may," "will," "should," "expect,"
"anticipate," "estimate," "believe," "intend," or "project"terminology such as “estimates”, “projects”, “plans”, “believes”, “expects”, “anticipates”, “intends”, or the negative of these words or other variations, on these words or comparable terminology.
These statements are expressed in good faithby discussions of strategy that involve risks and based upon a reasonable
basis when made, but there canuncertainties. We urge you to be no assurance that these expectations will
be achieved or accomplished.
Suchcautious of the forward-looking statements, includethat such statements, regarding, among other
things, (a) the potential markets forwhich are contained in this prospectus, reflect our products, our potential
profitability,current beliefs with respect to future events and cash flows (b) our growth strategies, (c) anticipated
trends in the eyewear retailing industry, (d) our future financing plans and
(e) our anticipated needs for working capital. This information may involve known and unknown risks, uncertainties and other factors that may causeaffecting our actual results, performance, or achievements tooperations, market growth, services, products and licenses. No assurances can be materially different fromgiven regarding the achievement of future results, performance, or achievements expressed or implied by any
forward-looking statements. These statements may be found under "Management's
Plan of Operation" and "Description of Our Business and Properties," as well
as in this prospectus generally. Actual events oractual results may differ materially from those discussed in forward-looking statements as a result of various factors, including, without limitation, the risks outlined under
"Risk Factors"we face, and matters described in this prospectus generally. In light
of these risks and uncertainties, there can be no assuranceactual events may differ from the assumptions underlying the statements that the forward-
looking statements contained in this filing will in fact occur. In addition
to the information expressly required to be included in this filing, we will
provide such further material information, if any, as may be necessary to
make the required statements, in light of the circumstances under which they
arehave been made not misleading.
17
Although forward-looking statements in this Report reflect the good faith
judgment of our management, forward-looking statements are inherently subject
to known and unknown risks, business, economic, and other risks and
uncertaintiesregarding anticipated events. Factors that may cause actual results, our performance or achievements, or industry results, to bediffer materially different from those discussedcontemplated by such forward-looking statements include without limitation:
·
our ability to attract and retain management;
·
our growth strategies;
·
anticipated trends in our business;
·
our future results of operations;
·
our ability to make or develop and maintain distribution arrangements;
·
our liquidity and ability to finance our product development, marketing and advertising activities;
·
the timing, cost and research for proposed products;
·
estimates regarding future net revenues;
·
planned capital expenditures (including the amount and nature thereof);
·
our financial position, business strategy and other plans and objectives for future operations;
·
the possibility that research and development or marketing of our products may involve unexpected costs; competition;
·
the ability of our management team to execute its plans to meet its goals;
·
general economic conditions, whether internationally, nationally or in the regional and local market areas in which we are doing business, that may be less favorable than expected; and
·
other economic, competitive, governmental, legislative, regulatory, geopolitical and technological factors that may negatively impact our businesses, operations and pricing.
All written and oral forward-looking statements made in connection with this prospectus attributable to us or persons acting on our behalf are expressly qualified in their entirety by these forward-lookingcautionary statements. ReadersGiven the uncertainties that surround such statements, you are urgedcautioned not to place undue reliance on thesesuch forward-looking statements, which speak only asstatements.
USE OF PROCEEDS
This prospectus relates to shares of the date of this Report. We assume no obligation to update any forward-
looking statements in order to reflect any event or circumstanceour common stock that may arise afterbe offered and sold from time to time by the date of this Report, other than as may be required by
applicable law or regulation. Readers are urged to carefully review and
consider the various disclosures made by us in our reports filed with the
Securities and Exchange Commission which attempt to advise interested parties
of the risks and factors that may affect our business, financial condition,
results of operation, and cash flows. If one or more of these risks or
uncertainties materialize, or if the underlying assumptions prove incorrect,
our actual results may vary materially from those expected or projected. We
will have little likelihood of long-term success unless we are able to
continue to raise capital from the sale of our securities until, if ever, we
generate positive cash flow from operations.
USE OF PROCEEDSselling security holders. We will not receive any proceeds from the sale of shares of common stock in this offering. We could receive up to $2,443,000 in the event any options or warrants are exercised. There are no assurances that any options or warrants will be exercised. We will use the proceeds from the exercise of the warrants for general corporate purposes, which may include, among other things, product development, advertising (including media expense), working capital needs and other general corporate purposes, including sales and marketing expenditures. Specific allocation of the potential use of proceeds is contingent upon the actual amount realized. The Company reserves the right to change the projected allocations depending upon the amounts ultimately realized and level of success (positive cash flows) on future product launches.
MARKET FOR COMMON STOCK AND RELATED MATTERS
Market Information
There is a limited public market for the shares of our common stock. Since our merger with Hyperlocal, our stock has been thinly traded. There can be no assurance that a liquid market for our common stock will ever develop.
Transfer of our common stock may also be restricted under the securities or blue sky laws of various states and foreign jurisdictions. Consequently, investors may not be able to liquidate their investments and should be prepared to hold the common stock offered
through this Prospectus by the selling shareholders.
DETERMINATION OF OFFERING PRICE
The selling shareholders will sell our shares at $0.01 per share until our
shares arefor an indefinite period of time.
Our common stock is quoted on the OTC Bulletin Board,Markets under the symbol MMAX. Quotation commenced during the quarter ended June 2009. The range of closing prices for our common stock, as reported on the OTC Markets during each quarter since June 2009 was as follows. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and thereafter at prevailing
market prices or privately negotiated prices. We determined this offering
price, based upon themay not represent actual transactions.
Quarter Ended |
| High |
| Low |
June 30, 2009 |
| $ 0.02 |
| $ 0.02 |
September 30, 2009 |
| $ 0.02 |
| $ 0.02 |
December 31, 2009 |
| $ 0.02 |
| $ 0.02 |
March 31, 2010 |
| $ 0.05 |
| $ 0.02 |
June 30, 2010 |
| $ 0.85 |
| $ 0.40 |
September 30, 2010 |
| $ 0.50 |
| $ 0.16 |
December 31, 2010 |
| $ 0.16 |
| $ 0.08 |
March 31, 2011 |
| $ 0.43 |
| $ 0.11 |
June 30, 2011 |
| $ 0.35 |
| $ 0.15 |
September 30, 2011 |
| $ 0.37 |
| $ 0.20 |
December 31, 2011 |
| $ 0.26 |
| $ 0.07 |
On __________, 2012, our common stock had a closing price of the last sale$ 0.____.
Holders
As of December 31, 2011, there were approximately 115 security holders of record of our common stock to
investors.
Dilution
- --------
The common stock to be sold by the selling shareholdersstock.
Transfer Agent and Registrant
Our transfer agent is common stock thatEmpire Stock Transfer, Inc., located at 1859 Whitney Mesa Drive, Henderson, Nevada. Our transfer agent’s telephone number is currently issued and outstanding. Accordingly, there will be no dilution
to our existing shareholders.
SELLING SECURITY HOLDERS
The selling shareholders named in this Prospectus are offering all of the
9,001,900 shares of common stock offered through this Prospectus.
18
The following table provides as of the date of this Prospectus, information
regarding the beneficial ownership of our common stock held by each of the
selling shareholders, including:
1. the number of shares owned by each prior to this Offering;
2. the total number of shares that are to be offered for each;
3. the total number of shares that will be owned by each upon completion
of the Offering; and
4. the percentage owned by each upon completion of the Offering.
Total
shares Total Total
held Number of Shares
including Shares to to be Percent
issuable be Owned Owned
upon full Offered for Upon Upon
Conversion Selling Completion Completion
and/or Shareholder of this of this
Name of Selling Stockholder(1) exercise Account(2) Offering Offering(3)
- ----------------------------- -------- ----------- ---------- -----------
Aldrich, Jessica 15,000 15,000 15,000 Nil
Beel, Valarie 10,000 10,000 10,000 Nil
Bishop, Jacquelyn 9,000 9,000 9,000 Nil
Bishop, Jamie 10,500 10,500 10,500 Nil
Colello, Anthony 12,500 12,500 12,500 Nil
Colton, Craig 15,000 15,000 15,000 Nil
Jacobson, Janice 10,000 10,000 10,000 Nil
Jacobson, Ray 12,000 12,000 12,000 Nil
Jesky, Rick 5,000 5,000 5,000 Nil
Larson, Jared 9,500 9,500 9,500 Nil
Manteris, Nicholas 15,000 15,000 15,000 Nil
Martin, Patricia 15,000 15,000 15,000 Nil
Meadows, Evelyn 15,000 15,000 15,000 Nil
Means, Craig 15,000 15,000 15,000 Nil
Murtha, Kevin 15,000 15,000 15,000 Nil
Patterson, Don 5,000 5,000 5,000 Nil
Patterson, James 5,000 5,000 5,000 Nil
Patterson, Lilia 5,000 5,000 5,000 Nil
Patterson, Michael 5,000 5,000 5,000 Nil
Sandoval, Robert 15,000 15,000 15,000 Nil
Seymour, Candace 15,000 15,000 15,000 Nil
Stewart, Patricia 15,000 15,000 15,000 Nil
Sullivan, Brian 15,000 15,000 15,000 Nil
Wright, Douglas 11,500 15,000 15,000 Nil
Processing Pros, Inc. 8,726,900 8,726,900 -
TOTAL 9,001,900 9,001,900 275,000
19
The named party beneficially owns and has sole voting and investment power
over all shares or rights to these shares. The numbers in this table assume
that none of the selling shareholders sells shares of common stock not being
offered in this Prospectus or purchases additional shares of common stock,
and assumes that all shares offered are sold. The percentages are based on
12,101,900 shares of common stock outstanding on the date of this Prospectus.
None of the selling shareholders:
1. has had a material relationship with us other than as a shareholder at
any time within the past three years; or,
2. has ever been one of our officers or Directors.
PLAN OF DISTRIBUTION
The selling shareholders may sell some or all of their common stock in one or
more transactions, including block transactions:
The selling shareholders will sell their shares at $0.01 per share until the
shares are quoted on the OTC Bulletin Board, and thereafter at prevailing
market prices or privately negotiated prices. There is no guarantee that our
shares will be quoted on the OTC Bulletin Board. We determined this offering
price arbitrarily based upon the price of the last sale of our common stock
to investors.
The shares may also be sold in compliance with the Securities and Exchange
Commission's Rule 144.
The selling shareholders may also sell their shares directly to market makers
acting as principals or brokers or dealers, who may act as agent or acquire
the common stock as a principal. Any broker or dealer participating in such
transactions as agent may receive a commission from the selling shareholders,
or, if they act as agent for the purchaser of such common stock, from such
purchaser. The selling shareholders will likely pay the usual and customary
brokerage fees for such services. Brokers or dealers may agree with the
selling shareholders to sell a specified number of shares at a stipulated
price per share and, to the extent such broker or dealer is unable to do so
acting as agent for the selling shareholders, to purchase, as principal, any
unsold shares at the price required to fulfill the respective broker's or
dealer's commitment to the selling shareholders. Brokers or dealers who
acquire shares as principals may thereafter resell such shares from time to
time in transactions in a market or on an exchange, in negotiated
transactions or otherwise, at market prices prevailing at the time of sale or
at negotiated prices, and in connection with such re-sales may pay or receive
commissions to or from the purchasers of such shares. These transactions may
involve cross and block transactions that may involve sales to and through
other brokers or dealers. If applicable, the selling shareholders may
distribute shares to one or more of their partners who are unaffiliated with
us. Such partners may, in turn, distribute such shares as described above. We
can provide no assurance that all or any of the common stock offered will be
sold by the selling shareholders.
20
We are bearing all costs relating to the registration of the common stock.
The selling shareholders, however, will pay any commissions or other fees
payable to brokers or dealers in connection with any sale of the common
stock.
The selling shareholders must comply with the requirements of the Securities
Act and the Securities Exchange Act in the offer and sale of the common
stock. In particular, during such times as the selling shareholders may be
deemed to be engaged in a distribution of the common stock, and therefore be
considered to be an underwriter, they must comply with applicable law and
may, among other things:
a) Not engage in any stabilization activities in connection with our common
stock;
b) Furnish each broker or dealer through which common stock may be offered,
such copies of this Prospectus, as amended from time to time, as may be
required by such broker or dealer; and
c) Not bid for or purchase any of our securities or attempt to induce any
person to purchase any of our securities other than as permitted under
the Securities Exchange Act.
The Securities Exchange Commission has also adopted rules that regulate
broker-dealer702-818-5898.
Penny Stock Considerations
Broker-dealer practices in connection with transactions in “penny stocks” are regulated by certain penny stocks.stock rules adopted by the Securities and Exchange Commission. Penny stocks generally are generally equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume
information with respect to transactions in such securities is provided by
the exchange or system). The pennyPenny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from thosethe rules, to deliver a standardized risk disclosure document prepared by the Commission, which:
o contains a description of the nature and level of risk in the market for
penny stocks in both public offerings and secondary trading;
o contains a description of the broker's or dealer's duties to the customer
and the rights and remedies available to the customer with respect to a
violation of such duties;
o contains a brief, clear, narrative description of a dealer market, including
"bid" and "ask" prices forthat provides information about penny stocks and the significance of the spread
between the bid and ask price;
o contains a toll-free telephone number for inquiries on disciplinary actions;
o defines significant termsrisks in the disclosure document or in the conduct of
trading penny stocks; and
o contains such other information and is in such form (including language,
type, size, and format) as the Commission shall require by rule or
regulation;
21
prior to effecting any transaction in a
penny stock, the customer:
ocustomer with current bid and offer quotations for the penny stock,
o the compensation of the broker-dealer and its salesperson in the transaction;
o the number of shares to which such bidtransaction, and ask prices apply, or other
comparable information relating to the depth and liquidity of the market
for such stock; and
o monthly account statements showing the market value of each penny stock held in the customer'scustomer’s account. In addition, the penny stock rules require that prior to a transaction in a
penny stock not otherwise exempt from those rules, theThe broker-dealer must also make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written
acknowledgment of the receipt of a risk disclosure statement, apurchaser’s written agreement to transactions involving penny stocks, and a signed and dated copy
of a written suitability statement.the transaction. These disclosure requirements willmay have the effect of reducing the level of trading activity, if any, in the secondary market for our
stock because it will bea security that becomes subject to thesethe penny stock rules.
Former Shell Company
At certain periods prior to our merger with Hyperlocal, our company was deemed to be a “shell company”. In general, Rule 144 requires restricted securities to be held for a particular length of time and prescribes the conditions which must be satisfied prior to the sale of the securities. The Securities and Exchange Commission codified a staff interpretation relating to the treatment of the securities of former shell companies, of which we are one. Under the amendments, Rule 144 is not available for the resale of securities initially issued by a shell company (reporting or
non-reporting) or a former shell company. Therefore, stockholdersthe securities held by our shareholders can be resold only through a resale registration statement unless certain conditions are met. The majority of our current shareholders cannot rely on Rule 144 for the resale of our common stock until the following have occurred: (1) we have ceased to be a shell company; (2) we are subject to the reporting requirements of the Exchange Act; (3) we have filed all Exchange Act reports required for the past 12 months; and (4) a minimum of one year has elapsed since we filed current Form 10 information on Form 8-K changing our status from a shell company to a non- shell company.
Dividend Policy
We have not declared any cash dividends on our common stock. Our Board of Directors will make any future decisions regarding dividends. We currently intend to retain and use any future earnings, if any, for the development and expansion of our business and do not anticipate paying any cash dividends in the near future. Our Board of Directors has complete discretion on whether to pay dividends, subject to the approval of our shareholders. Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the Board of Directors may have difficulty selling those securities.
MANAGEMENT'Sdeem relevant.
MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Management's DiscussionOPERATION
You should read the following discussion and Analysis containsanalysis of our financial condition and results of operations together with our consolidated financial statements and the related notes appearing in this registration statement. Some of the information contained in this discussion and analysis or set forth elsewhere in this registration statement, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. You should review the “Risk Factors” in this registration statement for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Overview
MMAX is presently in the development stage of its business and management can provide no assurances that the Company will be successful in developing its business. On March 16, 2011, MMAX completed its agreement and plan of merger to acquire Hyperlocal Marketing, LLC, a Florida limited liability company (“Hyperlocal”), pursuant to which Hyperlocal merged with and into HLM Paymeon, Inc., a Florida corporation and wholly owned subsidiary of MMAX. Pursuant to the terms of the merger agreement, Tommy Habeeb resigned as our chief executive officer and director and Edward Cespedes was appointed to serve as our chief executive officer and director. Under the terms of the merger agreement, the Hyperlocal members received 20,789,395 shares of MMAX common stock, which equal approximately 50.1% of the total shares of MMAX issued and outstanding following the merger on a fully diluted basis. In accordance with ASC Topic 360-10-45-15, Hyperlocal is considered the accounting acquirer and MMAX is considered the accounting acquiree. Hyperlocal was organized in January 2010 and has nominal revenues since its inception.
Business Overview
We own and operate products aimed at the location-based marketing industry. We develop and market products that provide merchants and consumers with mobile marketing services and offers, including but not limited to, mobile coupons, mobile business cards, mobile websites, use of SMS short codes and contest management.
Since inception, we have incurred net operating losses. Losses have principally occurred as a result of the substantial resources required for research and development and marketing of our products which included the general and administrative expenses associated with its organization and product development. We expect operating losses to continue, mainly due to the anticipated expenses associated with the marketing of the Hyperlocal products.
We have developed “PayMeOn”, a product designed to offer its customers “social income” potential through the purchase and referral of “coupon-style” deals through its mobile and web interfaces. The PayMeOn product will pay customers that refer “coupon-style” deals a “payout” amount for successful referrals (referrals that result in a purchase). “Payout” amounts come from our monetary share of the deals we offer. Offering “payout” amounts on our deals cause PayMeOn to have an additional expense that our competitors do not have. We manage this competitive disadvantage by striving to keep our overhead costs low. While our competitors invest in large numbers of employees dedicated to securing “deals” to offer their customers, PayMeOn has chosen to partner for most of its deal offerings, including, but not limited to an agreement with Adility, Inc. By partnering for our deals, we are able to offer deals in a substantial number of cities (more than 40 currently), while maintaining a very small internal deal acquisition team (currently 1 person). We believe that we will be able to offer competitive “payout” amounts because of our low internal overhead and because we believe that the cash incentive will result in higher “sharing” rates among our customers. By “sharing” rates, we mean the number of deals that PayMeOn members share with their contacts. We believe that PayMeOn deals will be shared often because of the potential for cash earnings for members that share them. PayMeOn intends to derive its “net revenue” from the difference of what it charges consumers for a particular “deal” and what it owes merchants and third parties as their share of a particular deal. The difference is PayMeOn’s net revenue. PayMeOn establishes a “payout” amount for each of the deals it offers from its share of the net revenue. PayMeOn users earn their “social income” from the payout amount established by PayMeOn. Because PayMeOn sources most of its deal offerings from a third party, such as, Adility, Inc., PayMeOn does not control the “share” of the revenue it retains versus the amount due the merchant and due to the third party provider. PayMeOn does control which deals it chooses to offer its customers and can choose not to offer certain deals. While our third party relationships will reduce our margins, we believe that because of our low cost structure, specifically the need for fewer personnel dedicated to deal acquisition relative to our competitors, our ultimate “net revenue” should be competitive and allow for PayMeOn to set payout amounts attractive enough to encourage members to share deals.
Our Hyperlocal Platform also supports multiple text messaging services such as WAP, MMS and XHTML, runs on a commercial grade mobile marketing platform used by the National Football League, Major League Baseball and others and operates with all major mobile carriers, including AT&T, Sprint, T-Mobile and Verizon. The fully-integrated interface allows for web-based monitoring of customers. It provides access to real-time statistics for each customer’s account, including incoming and outgoing messages, number of keywords, credits, account status and more.
Our operations are currently conducted principally through our wholly-owned subsidiary, HLM PayMeOn, Inc.
Critical Accounting Policies and Estimates
Revenue Recognition
The Company will recognize revenue on arrangements in accordance with FASB ASC No. 605, “Revenue Recognition”. In all cases, revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured.
The Company recognizes revenue from the sale of keywords over the period the keywords are purchased for exclusive use, usually one year.
The Company recognizes revenue from setup fees in accordance with Topic 13, which requires the fees to be deferred and amortized over the term of the agreements. Revenue from the sale of bulk text messages sales are recognized at the time messages are delivered. Revenue from monthly membership fees are recorded during the month the membership is earned.
Impairment of Long-Lived Assets
The Company evaluates its long-lived assets for impairment whenever events or a change in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the asset to the future net undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is the excess of the carrying amount over the fair value of the asset
Results of Operations
Hyperlocal was formed and commenced operations on January 22, 2010, as a development stage company. Accordingly, year over year comparisons and analysis are not meaningful for the nine month period ending September 30, 2010, as compared to the nine month period ending September 30, 2011. Revenues for the three months ended September 30, 2011, totaled $7,285 and were principally derived from sales of the Company’s Hyperlocal mobile text marketing packages to small businesses and from incremental text purchases from subscribers to the mobile text marketing packages. A small amount of sales were derived from our PayMeOn business, which is still in its development stage. Revenues for the three months ended September 30, 2010, were $13,176 and substantially all revenues were derived from Hyperlocal mobile text marketing packages.
Operating expenses for the three months ended September 30, 2011, totaled $738,499. Operating expenses were largely made up of a $529,462 non cash expense primarily related to the issuance of warrants issued to certain consultants and service providers in consideration of marketing, business and general consulting services. Operating expenses for the three months ended September 30, 2010, totaled $53,826, the majority of which was related to payroll and payroll taxes $28,628 travel and entertainment $9.786 and general and administrative expenses $10,606. The Company expects to incur continued marketing expenses in the near and medium term in pursuit of market share. Necessary marketing spending could curtail the Company’s ability to generate profits in the near and medium term. A summary of the operating expenses for the three months ended September 30, 2011, is included below:
·
professional fees of $7,106 primarily related to legal and accounting expenses associated with the operations of our business and SEC reporting;
·
web development and hosting in the amount of $17,435 primarily related to the development and hosting of the Company’s PayMeOn infrastructure;
·
payroll and payroll taxes of $119,409;
·
consulting fees of $529,462 primarily relating to the issuance of warrants to consultants as discussed above;
·
travel and entertainment in the amount of $9,135;
·
general and administrative expenses of $50,817; and
·
Marketing expenses of $5,135.
Revenues for the nine months ended September 30, 2011, totaled $25,928, of which approximately $21,878 were derived from Hyperlocal mobile text marketing packages and approximately $4,050 were derived from PayMeOn related sales. Operating expenses for the nine months ended September 30, 2011, totaled $1,064,139. A summary of other operating expenses is included below:
·
professional fees of $94,646 primarily related to legal and accounting expenses associated with the Merger Agreement, the operations of our business and SEC reporting;
·
web development and hosting in the amount of $55,546 primarily related to the development and hosting of the Company’s PayMeOn infrastructure;
·
payroll and payroll taxes of $213,171;
·
consulting fees of $584,673 primarily relating to non cash expense relating to the issuance of warrants in consideration of consulting services to be provided by third parties, as discussed above;
·
travel and entertainment in the amount of $22,156;
·
general and administrative expenses of $84,336; and
·
Marketing expenses of $8,157.
For the period from inception (January 22, 2010) through September 30, 2011, we had revenues of $54,901 which $50,851 were primarily derived from the sale of the Company’s Hyperlocal mobile text marketing packages and approximately $4,050 from PayMeOn related sales. Operating expenses for the period from inception through September 30, 2011 were $1,347,448 primarily consisting of the following:
·
professional fees of $96,426 for the reasons set forth above;
·
web development and hosting in the amount of $76,168 primarily related to the Company’s Hyperlocal mobile text marketing business, and the development and hosting of the Company’s PayMeOn websites and mobile application;
·
payroll and payroll taxes of $312,044;
·
consulting fees of $696,346, for the reasons set forth above;
·
travel and entertainment in the amount of $48,343;
·
general and administrative expenses of $107,500 primarily consisting of licenses, accounting and other general and administrative expenses for the Hyperlocal mobile text marketing business; and
·
Marketing expenses of $9,167.
Liquidity and Capital Resources
At September 30, 2011, we had a cash balance of approximately $130,554. At September 30, 2011 we had working capital of $96,608 and an accumulated deficit of $1,343,848. We require additional working capital. See “Plan of Operations” below.
From March 2011 through June 2011, the Company privately sold an aggregate of 2,210,000 shares of restricted shares of common stock to 13 accredited investors for gross proceeds of $276,250. During July and August the Company received subscriptions for the purchase of an aggregate of 2,080,000 shares of its common stock from 11 subscribers at a purchase price of $0.125 per share for gross proceeds of $260,000. The proceeds from the private placements shall be used for the continued development of Hyperlocal and PayMeOn products and general working capital purposes. The private placements were conducted by the Company’s president and CEO and no fees or commissions were paid in connection with the private placement (excluding $8,788 in offering costs). See Note 6 and Note 9 to the unaudited financial statements.
Since inception, the Company has incurred net operating losses and used cash in operations. As of September 30, 2011, the Company had a net loss from inception of $1,343,848. The Company has dedicated substantial resources required to research and development and marketing of the Company’s products which included the general and administrative expenses associated with its organization and product development. The Company expects to incur continued marketing expenses in the near and medium term in pursuit of market share. Necessary marketing spending could curtail the Company’s ability to generate profits in the near and medium term. Furthermore, we require working capital to fund the anticipated costs of this registration statement. We expect operating losses to continue, mainly due to the continued costs and expenses associated with development of our business and marketing of the Hyperlocal and PayMeOn products. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.
On January 3, 2012, the Company entered into an agreement to issue secured convertible promissory notes in the aggregate principal amount of up to $125,000 (the “Notes”) to certain accredited investors. The Notes bear interest at an annual rate of 7% and are payable on or before 12 months from the date of issuance. The Notes are secured by all of the assets of the Company and includes customary provisions concerning events of default. In addition, the Notes may be converted at any time, at the option of the holder, into shares of the Company’s common stock at a conversion price of $0.125 per share, subject to adjustment. On January 3, 2012 the Company received $25,000 in gross proceeds. The Company intends to use the proceeds from the Notes for working capital purposes.
Plan of Operations
We intend on continuing our efforts primarily towards completing development of the Company’s PayMeOn products. We expect to continue marketing our Hyperlocal Marketing platform and products, but primarily as bundled or complimentary additions to our PayMeOn product. As our development efforts come to fruition, we will focus our efforts on developing sales and distribution channels for PayMeOn. We will primarily focus our sales and distribution efforts on developing partnerships with third-party sales companies and on developing partnerships with businesses that have large databases they wish to monetize in the local, group buying or “deals” space. We completed a substantial portion of the primary development of the PayMeOn product during the third quarter 2011. Though the product has been “deployed” in beta since the second quarter and we have already generated some small revenue from PayMeOn, we have now completed updates to PayMeOn’s iphone and android mobile applications, additions to our payment tracking databases and implemented additional reporting capabilities, as well as other technical improvements to the product. We believe that there will be minimal new product development going forward and expect only to dedicate resources to maintenance, update and repair of existing products for the near future. Though we will always monitor the competitive landscape for indications that we may need to develop new and additional products and will develop new products as necessary to remain competitive, we expect to primarily focus on accelerating our sales efforts during the first quarter of 2012. Current working capital is not sufficient to maintain our current operations and there is no assurance that future sales and marketing efforts will be successful enough to achieve the level of revenue sufficient to provide cash to sustain operations. To the extent such revenues and corresponding cash flows do not materialize, we will attempt to fund working capital requirements through third party financing, including a private placement of our securities. In the absence of revenues, we currently believe we require a minimum of $500,000 to maintain our current operations through 2012. We cannot provide any assurances that required capital will be obtained or that the terms of such required capital may be acceptable to us. If we are unable to obtain adequate financing, we may reduce our operating activities until sufficient funding is secured or revenues are generated to support operating activities.
Recent Accounting Pronouncements
ASU No. 2011-03; Reconsideration of Effective Control for Repurchase Agreements. In April 2011, the FASB issued ASU No. 2011-03. The amendments in this ASU remove from the assessment of effective control the criterion relating to the transferor’s ability to repurchase or redeem financial assets on substantially the agreed terms, even in the event of default by the transferee. The amendments in this ASU also eliminate the requirement to demonstrate that the transferor possesses adequate collateral to fund substantially all the cost of purchasing replacement financial assets.
The guidance in this ASU is effective for the first interim or annual period beginning on or after December 15, 2011. The guidance should be applied prospectively to transactions or modifications of existing transactions that occur on or after the effective date. Early adoption is not permitted. The Company will adopt the methodologies prescribed by this ASU by the date required, and does not anticipate that the ASU will have a material effect on its financial position or results of operations.
ASU No. 2011-04; Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. In May 2011, the FASB issued ASU No. 2011-04. The amendments in this ASU generally represent clarifications of Topic 820, but also include some instances where a particular principle or requirement for measuring fair value or disclosing information about fair value measurements has changed. This ASU results in common principles and requirements for measuring fair value and for disclosing information about fair value measurements in accordance with U.S. GAAP and IFRSs. The amendments in this ASU are to be applied prospectively. For public entities, the amendments are effective during interim and annual periods beginning after December 15, 2011. Early application by public entities is not permitted.
The Company will adopt the methodologies prescribed by this ASU by the date required, and does not anticipate that the ASU will have a material effect on its financial position or results of operations.
ASU No. 2011-05; Amendments to Topic 220, Comprehensive Income. In June 2011, the FASB issued ASU No. 2011-05. Under the amendments in this ASU, an entity has the option to present the total 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. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. This ASU eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders' equity. The amendments in this ASU do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income.
The amendments in this ASU should be applied retrospectively. For public entities, the amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. Early adoption is permitted, because compliance with the amendments is already permitted. The amendments do not require any transition disclosures. Due to the recency of this pronouncement, the Company is evaluating its timing of adoption of ASU 2011-05, but will adopt the ASU retrospectively by the due date.
BUSINESS
Business Overview
Prior to the Merger Agreement, we operated with the intention of commercializing acquired mixed martial arts television programming (“MMAX Fights”) and related intellectual property rights and promoting live mixed martial arts combat events throughout Latin America and primarily in Mexico. While our distributor has secured distribution of 39 episodes (three seasons) of the MMAX Fights one hour television series on a limited basis in Puerto Rico, we do not anticipate generating any material revenues, if any, from the MMAX Fights. MMAX is presently in the development stage of its business and management can provide no assurances that the Company will be successful in developing its business. As a result of the merger, we principally engage in the operations of Hyperlocal, a development stage company that owns and operates products aimed at the location-based marketing industry. Hyperlocal develops and markets products that provide merchants and consumers with mobile marketing services and offers, including but not limited to, mobile coupons, mobile business cards, mobile websites, use of SMS short codes and contest management. Hyperlocal was organized in January 2010. Hyperlocal has nominal revenues since its inception.
Since inception, Hyperlocal has incurred net operating losses. As of December 31, 2010, Hyperlocal had a net loss of approximately $254,336 and negative working capital of approximately $6,889. Losses have principally occurred as a result of the substantial resources required for research and development and marketing of the Hyperlocal products which included the general and administrative expenses associated with its organization and product development. We expect operating losses to continue, mainly due to the anticipated expenses associated with the marketing of the Hyperlocal products.
Hyperlocal supports multiple text messaging services such as WAP, MMS and XHTML, runs on a commercial grade mobile marketing platform used by the National Football League, Major League Baseball and others and operates with all major mobile carriers, including AT&T, Sprint, T-Mobile and Verizon. The fully-integrated interface allows for web-based monitoring of customers. It provides access to real-time statistics for each customer’s account, including incoming and outgoing messages, number of keywords, credits, account status and more.
Hyperlocal has also developed “PayMeOn”, a product designed to offer its customers income potential through the purchase and referral of “coupon-style” deals through its mobile and web interfaces.
Marketing Opportunity
Hyperlocal was created to address the opportunities developing in the “Hyperlocal” market. The “Hyperlocal” market is also known as, “the location-based market”, “the proximity market”, and the “mobile advertising market”. The opportunity revolves around new methods of reaching customers “in context” wherever they might be, whenever they might be there, based on the ubiquitous penetration of mobile devices.
As reported by the CTIA Wireless Association in 2010, mobile device penetration (mobile phones, feature phones and smart phones) is over 90% in the United States, with “smart phones” (iphones, droid phones, etc) currently representing just over 20% of all devices (as reported by Comscore Datagem) – but growing the fastest.
This penetration indicates that most young people and adults have a mobile device with them at all times and would be potential customers for products and services being developed in this market. We believe that we can capitalize by being an early provider of these products and services to merchants and provide customers with opportunities to receive income for referring coupons. Four out of five teens carry a wireless device, and the majority (57%) view their cell phone as the key to their social life (Source: CTIA Wireless Association). We believe that merchants can build brand awareness, increase sales, or reward loyalty by adopting mobile marketing strategies that tap the mobile phones power of immediacy.
As is typical in fast-growing new marketing segments, lots of different companies that provide lots of different products and services have been incorporated. This has resulted in a highly “fragmented” situation with few large players and lots of unbranded small players with a vast array of products and services. Some of the offerings in the Hyperlocal market today include:
text platforms | short code sales | short code development | ||
premium keyword sales | mobile websites | mobile coupons | ||
mobile banner advertising | mobile lead generation | application development | ||
applicationmarketing |
We believe the Hyperlocal market is highly important to the future of large media businesses as more and more of consumer Internet “time spent” moves to mobile devices and to “location based applications”.
Description of Products and Services
We are developing and offering a full suite of mobile marketing “platform” services to businesses. All our products and services fall broadly into the mobile marketing category; however, we plan to separate our business into two parts: (1) “PayMeOn” products and services and (2) Hyperlocal Mobile Marketing Platform products and services. We currently focus the majority of our time and attention to the development and marketing of our PayMeOn products and services.
PayMeOn
PayMeOn consumers will be able to browse “deal” coupons, purchase them, and most importantly, share them in exchange for cash payments from the web and from our PayMeOn mobile application. PayMeOn operates in the “social income” space. We define social income as income or benefits derived from referring or recommending products to people in your network(s). The fundamental driver of the PayMeOn product is the opportunity for users to earn money through referrals. Many products and services are sold over the Internet today through recommendations or referrals. Social networks have allowed users to connect seamlessly and have become powerful platforms for “friends” to connect, share, and recommend products that are “imbedded” in the networking experience. We believe that users should be paid for their successful referrals. We call these payments “social income”. We believe that the ubiquitous adoption of mobile phones has created portable and “real time” social networks that can be monetized.
Successful sharing can result in income for users, highlighted on a “per deal” basis with the offers. We intend to make referral payments to users through PayPal and by check. We believe that earnings above $10.00 per month will be very meaningful income to PayMeOn users. PayMeOn derives its “net revenue” from the difference of what it charges consumers for a particular “deal” and what it owes merchants as their share of a particular deal. The difference is PayMeOn’s net revenue. PayMeOn establishes a “payout” amount for each of the deals it offers from its share of the next revenue. PayMeOn users earn their “social income” from the payout amount established by PayMeOn.
We believe the success of PayMeOn will depend on (1) the quality of deals in many markets, and (2) the quantity of users. Under an agreement dated November 2010, we have partnered with Adility, Inc., a third party provider of deals throughout the United States. Adility negotiates “deals” with all types of merchants and “feeds” them to PayMeOn via an application program interface (API). This relationship provides PayMeOn with deals across the country that it can market to its users. PayMeOn is also in discussions with other third-party providers of deals and is reviewing the creation of its own internal “deal getter” team. By advertising deals in the local markets they are offered, PayMeOn can also leverage Adility to attract new users. The agreement was for an initial term of one year and automatically renews for subsequent one year terms unless either party informs the other party of its intent not to renew at least 30 days prior to the then current expiration date. Under the agreement we will generally pay a fee to the deal vendor equal to 50% of the gross transaction revenue. We pay also Adility a transaction fee equal to the
greater of 20% of the net transaction revenue generated from the purchase of any deal by a customer and $2.00. “Net Transaction Revenue” is the price paid for a deal, minus the fees paid to the deal vendor.
The second part of the marketing plan for PayMeOn is called, “leading with the application”. That is, marketing primarily aimed at attracting mobile application users. We believe this will be a powerful approach, as these users will be driven more by their desire to earn money than anything else. This will lead them to share as many deals as possible (as opposed to “leading with deals” where the primary goal of the user is to purchase a great deal) in pursuit of potential payouts.
Finally, PayMeOn is integrating its offering with the Hyperlocal Marketing Platform to provide merchants with mobile marketing and advertising services. PayMeOn is creating “packages” that offer merchants full access and use of the mobile marketing platform, as well as the ability to offer daily deals. PayMeOn expects to begin offering merchants integrated packages in the first quarter of 2012.
The Hyperlocal Mobile Marketing Platform
The Hyperlocal Mobile Marketing Platform is designed to provide local merchants with a mobile marketing platform. The platform acquires and retains the customer’s mobile phone number and the merchant is able to market via text to the customer from the platform in the future. “Keyword” driven accounts are created for merchants on the Hyperlocal Mobile Marketing Platform. Keywords are descriptive words created for the merchant in the system that are “marketed” at the point of sale or in print or online advertising to customers. For example, a customer might enter a restaurant called “Stephs”. When the customer enters the restaurant, they see a sign that reads, “to join our VIP club, text “stephs” to 41513”. When the customer texts the keyword (“stephs”) into the system, he/she is “opting in” to that merchant’s account on the mobile marketing platform.
The platform also provides the merchant with various "forward-looking
statements" withinother capabilities, including the meaningability to run contests for members, create mobile websites and other useful applications.
The Hyperlocal Mobile Marketing Platform is marketed primarily to small businesses in various categories, including but not limited to restaurants, automotive supply and repair shops, spas, specialty retail and medical offices. Pricing for the “retail” platform is typically comprised of Section 21Ea one-time setup fee, a monthly fee for use of the platform with amounts of “texts” included, and text packages for merchants that desire to use more texts in their marketing than their packages provide. Hyperlocal also intends to use the platform in a “proprietary” fashion and will market “premium keywords” for sale and “operate” certain premium keywords to enter the lead generation market. “Premium keywords” are very specific words that are often considered more valuable to marketers. Sometimes “premium keywords” are industry specific, such as “travel”, “rent”, “legal” and “loan”. Sometimes marketers are willing to pay a premium for use of “premium keywords” they consider to be more effective in their marketing. For prices starting as low as $29.95 per month, merchants are offered access to Hyperlocal’s platform that includes. Merchants use the platform in a variety of ways by marketing “keywords” that drive consumer interest:
·
Mobile coupons
·
Calls to action (text “MMAX” to 41513 to view a working demonstration)
·
Brand engagement (voting, contests, polling)
·
Geotargeted ads (travel, rental cars)
·
Send alerts, sales related notifications
·
Appointment reminders
·
Audience interactions (concerts, conferences, airports)
The “retail” platform business is marketed primarily to small businesses in various categories, including but not limited to restaurants, automotive supply and repair shops, spas, specialty retail and medical offices. Pricing for the “retail” platform is typically comprised of a one-time setup fee, a monthly fee for use of the platform with amounts of “texts” included, and text packages for merchants that desire to use more texts in their marketing than their packages provide.
Hyperlocal also intends to use the platform in a “proprietary” fashion and will market “premium keywords” for sale and “operate” certain premium keywords to enter the lead generation market. “Premium keywords” are very specific words that are often considered more valuable to marketers. Sometimes “premium keywords” are industry specific, such as “travel”, “rent”, “legal” and “loan”. Sometimes marketers are willing to pay a premium for use of “premium keywords” they consider to be more effective in their marketing.
We believe an opportunity for the platform business is to reach small businesses at the right “price point”. Hyperlocal is currently working two direct sales channels for this product: door to door and telemarketing. Hyperlocal is also developing other sales channels, including its own, independent sales personnel and web based sales.
Management believes that much like premium domain names are an asset that can be developed for the web, premium keywords can be developed as valuable mobile marketing assets. Hyperlocal has secured a portfolio of keywords across several verticals including, but not limited to travel, finance, legal, health, autos, games and maps.
Competition
The location based marketing industry is a new, fragmented and competitive industry. Furthermore, the marketing industry in general is a large and competitive industry. In the United States and throughout the world, the marketing industry has a diverse set of channels, including direct mail, tele-marketing, television, radio, newspaper, magazines and the recently developed mobile and web-based markets. The list of market leaders fluctuates constantly. Many competitors are large and have significantly greater financial, marketing and other resources than our company.
Intellectual Property
We have recently applied for U.S. trademark protection on the term “social income”. We have not applied for any other U.S. trademarks and, except for common law rights, currently do not hold any other intellectual property rights on the products we have developed. We have secured the following domain names: paymeon.com; paymeon.net; paymeon.tv; paymeon.org; paymeon.biz; paymeon.mobi; paymeon.co; paymeon.tel; paymeon.us; hyperloc.com; Hyperlocalmarketing.net; Hlmllc.com; and Hlmllc.net.
Employees
We currently employ four full time employees. We maintain a satisfactory working relationship with our employees and have not experienced any labor disputes or any difficulty in recruiting staff for operations.
Legal Proceedings
We are currently not subject to any legal proceedings.
Facilities
Our principal offices are located at 511 N.E. 3rd Avenue, 1st Floor, Fort Lauderdale, Florida 33301. We occupy this space for a term of one year, which commenced on April 1, 2011, at a cost of approximately $2,915 per month. The offices are approximately 2,500 square feet and are sufficient to support our current and anticipated operations.
DIVIDEND POLICY
We have not declared any cash dividends on our common stock since our inception and do not anticipate paying such dividends in the foreseeable future. We plan to retain any future earnings, if any, for use in our business. Any decisions as to future payments of dividends will depend on our earnings and financial position and such other facts, as the Board of Directors deems relevant.
REPORT TO SHAREHOLDERS
We are subject to the information and reporting requirements of the Securities Exchange Act of 1934 and file current reports, periodic reports, annual reports, and other information with the Securities and Exchange Commission, as amended,required.
LEGAL PROCEEDINGS
We are not currently subject to any material legal proceedings.
MANAGEMENT
Executive Officers
The following table sets forth certain information regarding future events or the future financial
performanceour executive officers and directors as of the Companydate of this prospectus. Directors are elected annually and serve until the next annual meeting of shareholders or until their successors are elected and qualify. Executive officers are appointed by our Board of Directors and their term of office is at the discretion of our board.
Name | Age | Position | ||
Edward Cespedes | 45 | Director, Chief Executive Officer and Principal Financial Officer |
Edward Cespedes
Edward Cespedes has served as sole officer and director since March 2011. Edward A. Cespedes, age 45, is the founder and chief executive officer of Hyperlocal. Mr. Cespedes has served as the Vice Chairman of Tralliance Registry Management Corporation, the company that involve risksmanages the .travel domain for the global Internet since 2009 and uncertainties. Certain
statements included in this S-1, including, without limitation, statements
relatedwas Tralliance’s Chief Executive Officer from 2006 through 2009. Mr. Cespedes has served as President of theglobe.com (OTCBB: TGLO) since June 2002 and as a director of theglobe.com, Inc. since 1997. Mr. Cespedes also serves as theglobe.com’s Chief Financial Officer. Mr. Cespedes is also the President of E&C Capital Ventures, Inc., the general partner of E&C Capital Partners LLP. Mr. Cespedes served as the Vice Chairman of Prime Ventures, LLC, from May 2000 to anticipated cash flow sources and uses, and words including, but
not limitedFebruary 2002. From August 2000 to "anticipates," "believes," "plans," "expects," "future," and
similar statements or expressions, identify forward-looking statements. Any
forward-looking statements herein are subject to risks and uncertainties inAugust 2001, Mr. Cespedes served as the Company's business, including but not limited to, reliance on key
customers and competition in its markets, market demand, product performance,
technological developments, maintenance of relationships with key suppliers,
difficulties of hiring or retaining key personnel, and any changes in current
accounting rules, all of which may be beyond the controlPresident of the Company. The
Company's actual results could differ materiallyDr. Koop Lifecare Corporation (formerly Nasdaq: KOOP) and was a member of the Company’s Board of Directors from those anticipatedJanuary 2001 to December 2001. From 1996 to 2000, Mr. Cespedes was a Managing Director of Dancing Bear Investments, Inc., a private investment company. Concurrent with his position at Dancing Bear Investments, Inc., from 1998 to 2000, Mr. Cespedes also served as Vice President for corporate development for theglobe.com where he had primary responsibility for all mergers, acquisitions, and capital markets activities. In 1996, Mr. Cespedes was the Director of Corporate Finance for Alamo Rent-A-Car. From 1988 to 1996, Mr. Cespedes worked for J.P. Morgan and Company, where he focused on mergers and acquisitions. He is the founder of the Columbia University Hamilton Associates, a foundation for university academic endowments. Mr. Cespedes is also a member of the Board of Governors for the H. Wayne Huizenga School of Business and Entrepreneurship at Nova Southeastern University and an honorary board member of the Special Olympics of Broward County. Mr. Cespedes received a Bachelor’s degree in these forward-looking statements asInternational Relations from Columbia University in 1988.
Directors
Our Board of Directors consists of 1 member: Edward Cespedes.
Committees of the Board of Directors
We have not established any committees including an Audit Committee, a result of certain factors, including
those set forth therein.
Management's Discussion and Analysis of Results of Financial Condition and
Results of Operations ("MD&A") should be read in conjunction with the
financial statements included herein.
22
Business Model
- --------------
We were formed on May 30, 2006.Compensation Committee or a Nominating Committee, or any committee performing a similar function. We are a development stage company and have been unable to attract qualified independent directors to serve on our board. Our board of directors consists of only one member, and has not delegated any of its functions to committees. The entire board of directors acts as our audit committee as permitted under Section 3(a)(58)(B) of the Exchange Act. Our board of directors reviews the professional services provided by our independent auditors, the independence of our auditors from our management, our annual financial statements and our system of internal accounting controls. Further, as we are currently quoted on the OTC Markets, we are not subject to any exchange rule which includes qualitative requirements mandating the establishment of any particular committees. We do not have a policy regarding the consideration of any director candidates which may be recommended by our shareholders, including the minimum qualifications for director candidates, nor has our Board of Directors established a process for identifying and evaluating director nominees. We have not adopted a policy regarding the handling of any potential recommendation of director candidates by our shareholders, including the procedures to be followed. Our board has not considered or adopted any of these policies as we have never received a recommendation from any shareholder for any candidate to serve on our Board of Directors. Given the nature of our operations, we do not anticipate that any of our shareholders will make such a recommendation in the near future. While there have been no nominations of additional directors proposed, in the event such a proposal is made, all members of our Board will participate in the consideration of director nominees.
None of our directors are an “audit committee financial expert” within the meaning of Item 407(d) of Regulation S-K. In general, an “audit committee financial expert” is an individual member of the audit committee or Board of Directors who:
–
understands generally accepted accounting principles and financial statements;
–
is able to assess the general application of such principles in connection with a
business focusaccounting for estimates, accruals and reserves;
–
has experience preparing, auditing, analyzing or evaluating financial statements comparable to help mortgage companies process their loans.
Our plan of operation is based on two main milestones:
1. Establish a customer base by focusing on mortgage brokers who wish to
outsource the loan process activities.
2. Evaluate market responsebreadth and complexity to our financial statements;
–
understands internal controls over financial reporting; and
–
understands audit committee functions.
While the OTC Markets does not impose any qualitative standards requiring companies to have independent directors or requiring that one or more of its directors be audit committee financial experts, it is our intent to expand our Board of Directors to include independent directors as well as one or more directors who satisfy the conditions to be considered audit committee financial experts. At that time we intend to establish an Audit Committee of our Board of Directors.
Director Compensation
None of our directors receive any compensation for their services as a member of the Board of Directors.
Code of Ethics
We have not adopted a Code of Business Conduct and develop further growth
strategy based on customer feedback..
ResultsEthics.
Family Relationships
There are no family relationships among any of Operations
- ---------------------
From Inception on May 30, 2006, through September 30, 2008
- ----------------------------------------------------------
Duringour executive officers or directors.
Involvement in Certain Legal Proceedings
None of our directors or executive officers have been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors, or has been a party to any judicial or administrative proceeding during the periodpast ten years that resulted in a judgment, decree or final order enjoining the person from inception on May 30, 2006future violations of, or prohibiting activities subject to, September 30, 2008, wefederal or state securities laws, or a finding of any violation of federal or state securities laws, except for matters that were dismissed without sanction or settlement. Except as set forth in our discussion below in “Certain Relationships and Related Transactions”, none of our directors, director nominees or executive officers has been involved in any transactions with us or any of our directors, executive officers, affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the SEC.
EXECUTIVE COMPENSATION
The following table summarizes all compensation recorded by us in the last two completed fiscal years for:
·
our principal executive officer or other individual serving in a similar capacity;
·
our two most highly compensated executive officers other than our principal executive officer who were serving as executive officers at December 31, 2010 as that term is defined under Rule 3b-7 of the Securities Exchange Act of 1934; and
·
up to two additional individuals for whom disclosure would have generated no revenues. Our net loss before beneficial interest since
inception is $11,513, of which $4,500been required but for the fact that the individual was for accounting and audit fees and
7,013 for general and administrative expenses.
Since inception, we have sold 3,100,000not serving as an executive officer at December 31, 2010.
For definitional purposes, these individuals are sometimes referred to as the “named executive officers”. No officer received compensation during 2009.
Name |
| Years |
| Salary ($) |
| Bonus($) |
| Stock Awards($) |
| All Other Compensation($) |
| Total ($) |
| |||||
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|
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|
|
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|
|
|
|
|
|
Edward Cespedes1 |
| 2010 |
| $ | 11,000 |
| $ | — |
| $ | 0 | 2 | $ | — |
| $ | 11,000 |
|
|
| 20116 |
| $ | 82,400 |
| $ | 18,750 |
| $ | — |
| $ | — |
| $ | 101,150 | 7 |
|
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|
Tommy Habeeb3 |
| 2010 |
| $ | 62,500 |
| $ | — |
| $ | 381,802 | 4 | $ | — |
| $ | 444,302 |
|
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|
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|
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|
J. Chad Guidry5 |
| 2010 |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
|
|
| 2009 |
| $ | — |
| $ | — |
|
| — |
| $ | — |
| $ | — |
|
———————
1
Mr. Cespedes currently serves as Chief Executive Officer. Compensation paid by Hyperlocal.
2
Excludes shares of common stock at $0.001 per
shareissued pursuant to the merger agreement with Hyperlocal.
3
Mr. Habeeb served as President and Chief Executive Officer of our Director for proceeds of $3,100; 275,000legal acquirer (accounting acquiree) from February 2010 through March 2011.
4
Includes 1,090,862 shares of common stock at $0.01 per share for total proceeds of $2,750 and 872,690 preferred shares.
As of the date of this Prospectus we have hired an attorney in relationissued to this Registration Statement, and an auditor to audit our financial
statements.
Liquidity and Capital Resources
- -------------------------------
As of September 30, 2008, our total current assets were $0. As of September
30, 2008, our total liabilities were $0. We expect to incur substantial
losses over the next two years.
We have funded our operations through financing activities consisting
primarily of private placements of equity securities with existing
shareholders and outside investors and monies contributed to the Company by
our Director.
During the period from inception to September 30, 2008, proceeds were
received from the sale of common stock and preferred stockMr. Habeeb on February 1, 2010 in connection with various private placements. In addition, our Director contributed to us a
$4,790 for general working capital purposes. Our Director will not seek
reimbursement for this contributed capital.
23
Notwithstanding, we anticipate generating losses and therefore we may be
unable to continue operations in the future. We anticipate we will require
additional capital up to approximately $100,000 and we would have to issue
debt or equity or enter into a strategic arrangement with a third party. We
intend to try and raise capital through a private offering after this
registration statement is declared effective and our shares are quoted on the
Over the Counter Bulletin Board. There can be no assurance that additional
capital will be available to us. We currently have no agreements,
arrangements or understandings with any person to obtain funds through bank
loans, lines of credit or any other sources.
Our sole officer/director has agreed to donate funds to the operations of the
Company, in order to keep it fully reporting for the next twelve (12) months,
without seeking reimbursement for funds donated.
Future Financings
- -----------------
We anticipate continuing to rely on equity salesan employment agreement.
5
Mr. Guidry served as an executive officer of our common shares in order
to continue to fund our business operations. Issuances of additional shares
will result in dilution to our existing shareholders. There is no assurance
that we will achieve any of additional sales of our equity securities or
arrangelegal acquirer (accounting acquiree) from 2006 through the three months ended March 31, 2010.
6
The Compensation disclosure for debt or other financing to fund our exploration and development
activities.
We are seeking to raise a $100,000 in an offering of our common stock. In
the event we are unable to raise $100,000, we may be unable to conduct any
operations and may consequently go out of business. There are no formal or
informal agreements to attain such financing and we can not assure you that
any financing can be obtained. If we are unable to raise these funds, we
will not be able to implement any of our proposed business activities and may
be forced to cease operations.
24
The table below illustrates our business plan that constitute top priorities.
Each material event or milestone listed in the table below will be required
until revenues are generated. Each step needs to be completed before we can
movefiscal year ended December 31, 2011 depends on to the next step with these milestones. Therefore, we are unable to
provide a timeline, in that, if one step is not achieved, the remaining steps
cannot be completed.
Expected manner of
occurrence or method
Event or Milestone of achievement
- ----------------------------------------- -------------------------
1. Business plan developed Our sole Officer prepares plan
2. Company completes audit financials Auditor identified/audit
prepared for June 30, 2008
3. Company files Registration Statement Registration Statement filed
with SEC in October, 2008
We need to complete the
comment phase
4. Company files required SEC reports We will need to file required
reports with the SEC to
be a fully reporting company
5. Company identifies a market maker Market Maker applies for
listing with the OTC-BB.
6. Company becomes listed on OTC-BB Market Maker makes market in
our common stock
7. Company raises funding Our sole officer seeks funding
of $100,000 to advance the
company's business plan
8. Company markets its services Our sole officer solicits
business from mortgage
brokers who desire to
outsource their loan
processing activities
9. Identify a Customer Base Through the marketing efforts
by our sole officer
10. The Company operates at a profit Customer base and sales force
in place
Off-Balance Sheet Items
- -----------------------
We currently do not have any off-balance sheet items.
25
Critical Accounting Policies
- ----------------------------
Our discussion and analysis or plan of operations is based upon our financial
statements, which have been prepared in accordance with accounting principles
generally accepted in the United States of America. The preparation of these
financial statements requires us to make estimates and judgments that affect
the reported amounts of assets, liabilities, revenues and expenses, and
related disclosure of contingent assets and liabilities. On an on-going
basis, we evaluate our estimates, including those related to income taxes and
contingencies. We base our estimates on historical experience and on various
other assumptions that are believed to be reasonable under the circumstances,
the results of which form the basis for making judgments about the carrying
values of assets and liabilities that are not readily apparent from other
sources. Actual results may differ from these estimates under different
assumptions or conditions.
Management believes the following critical accounting policies reflect its
more significant estimates and assumptions used in the preparation of its
financial statements.
Revenue Recognition
- -------------------
Nevada Processing Solutions is in its development stage and has yet to
realize significant revenues from operations. The Company recognizes revenue
on an accrual basis as it invoices for services. Revenue is generally
realized or realizable and earned when all of the following criteria are met:
1) persuasive evidence of an arrangement exists between the Company and our
customer(s); 2) services have been rendered; 3) our price to our customer is
fixed or determinable; and 4) collectibility is reasonably assured.
Loss per Common Share
- ---------------------
Historical net (loss) per common share is computed using the weighted average
number of common shares outstanding. Diluted earnings per share include
additional dilution from common stock equivalents, such as stock issuable
pursuant to the exercise of securities or other contracts to issue common
stock were exercised or converted into common stock or resulted in the
issuance of common stock that shared in the earnings of the entity, but these
potential common stock equivalents were determined to be antidilutive.
26
Income Taxes
- ------------
The Company accounts for income taxes pursuant to SFAS No. 109, "Accounting
for Income Taxes" ("SFAS No. 109"). Under SFAS No. 109, deferred tax assets
and liabilities are determined based on temporary differences between the
bases of certain assets and liabilities for income tax and financial
reporting purposes. The deferred tax assets and liabilities are classified
according to the financial statement classification of the assets and
liabilities generating the differences.
The Company maintains a valuation allowance with respect to deferred tax
assets. Nevada Processing Solutions establishes a valuation allowance based
upon the potential likelihood of realizing the deferred tax asset and taking
into consideration the Company's financial position and results of operationsstatements for the current period. Future realization of the deferred tax benefit
depends on the existence of sufficient taxable income within the carryforward
period under the Federal tax laws.
Changes in circumstances, such as the Company generating taxable income,
could cause a change in judgment about the realizability of the related
deferred tax asset. Any change in the valuation allowance will be included in
income in the year of the change in estimate.
Common Stock Registration Expenses
- ----------------------------------
The Company considers incremental costsended December 31, 2011, and expenses related to the
registration of equity securities with the SEC, whether by contractual
arrangement as of a certain date or by demand, to be unrelated to original
issuance transactions. As such, subsequent registration costs and expenses
are reflected in the accompanyingthose financial statements as general and
administrative expenses, and are expensed as incurred.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
Moore & Associates, Chartered, audited our financial statements. Since
inception, we have had no changes in or disagreements with our accountants.
DESCRIPTION OF OUR BUSINESS
You should rely only on the information contained in this prospectus or any
supplement hereto. We have not authorized anyone to provide you with
different information. If anyone provides you with different information you
should not rely on it. We are not making an offer to sell the shares in any
jurisdiction where the offer is not permitted. You should not assume that the
information contained in this Prospectus is accurate as of any date other
than the date on the front cover of this prospectus regardless of the date of
delivery of this Prospectus or any supplement hereto, or the sale of the
shares. Our business, financial condition, results of operations, and
prospects may have changed since that date.
27
Background
- ----------
We are a startup company that processes loans for mortgage companies.
We serve as an extension of a mortgage broker's loan processing team. It is
our goal to process mortgage loans through to closing. This begins when the
order is received and continues until the broker/originator has a complete
hard copy or electronic file in their hands after closing. We serve as an
extension of a mortgage broker's staff, so therefore, it is important that we
have an open channel of communications with the mortgage broker to understand
the expected roles of each party in the transaction, as well as the process
flow and expected time frames to complete the application process. We are
not a mortgage broker nor lender and are not involved in originations of
mortgages or loans.
Business Strategy
- -----------------
Our goal is to develop long-term business partnerships by providing mortgage
processing services to mortgage brokers. It is our goal to handle loan
processing from submission to funding. We plan to handle all types of loan
programs. We plan to develop the procedures necessary to process loans
accurately and professionally. We plan to strive for a 10-day close. The
loan processor fee is billed at closing on the as a third party loan
processing fee. We plan to charge approximately $500 for each loan we
process. Our services include:
o Expedite Closing Cycles. Nevada Processing Solutions will handle all
"back-end" loan processing activities associated with closing a loan:
appraisal and title/escrow ordering and follow-up, submission to
underwriting, obtaining stips, clearing of conditions, coordination
of closing and confirmation of funding.
o Upon receiving a loan package and Nevada Processing Solutions will
upload it into our system, verify that ratios, income, accuracy of
data and notify the broker of any deficiencies.
o We will review a broker's file for compliance issues and/or missing
documentation.
o We will order (depending on the Brokers needs) title work, payoffs,
appraisals, and surveys that will be required.
o We will keep the mortgage broker up to date as the loan progresses
through underwriting.
28
o Immediately upon receiving an approval, we will fax a copy and contact
the broker to discuss any conditions of the loan approval.
o After meeting the conditions, the we will monitor the status of the
file in the lender's closing department to insure the closing documents
are sent to the title company.
Further, we utilize a software program designed to track all of the steps
required to approve a mortgage loan application. As each step is completed,
the software updates the information in the applicants' file. The loan
applicant is able to determine the progress of their loan by checking the
status of the loan approval process through a secure internet site.
We plan to provide information to loan applicants as to the approval status
of their individual mortgage loan. Via a user name and password, the loan
applicants can check daily through a secure website on the progress of their
mortgage loan(s). A mortgage loan, on average, goes through twenty steps
before it is approved. The loan applicant can check the status of the
mortgage approval process as it passes through these twenty steps. It allows
the loan applicant to understand what has taken place and what needs to take
place before their mortgage funds are released.
Market
- ------
We offer loan mortgage processing and our tracking services to mortgage
companies. According to the U.S. Census Bureau 2005 Report, there are
approximately 8,967 mortgage and non-mortgage loan brokers in the U.S. In
the State of Nevada alone there are 96 mortgage and non-mortgage loan
brokers. These loan brokers who represent the future customer base of Nevada
Processing Solutions, Inc.
Plan of Operations
- ------------------
Short term goal (twelve-month period)
- -------------------------------------
The two key elements of our short term plan are to create our initial
customer base, and to utilize our software program which tracks the approval
status of loans. Our plan of operation for the next 12 months will be
focused on three major areas: (i) Operations; (ii) Marketing; and (iii)
Financing.
Operations
- ----------
We have designed a software program to track all of the steps required to
approve a mortgage loan application: We now have the infurstucture and
software program in place and ready to use.
29
Marketing
- ---------
We plan to develop a strategic marketing plan by working together with
mortgage brokers to generate awareness about our services. The marketing
plan will cover the following:
o Active promotional program including printing promotional materials,
educating mortgage brokers about our services
o Media relations program by developing a website that markets our
services;
o Developing an advertising campaign to market our services.
Financing
- ---------
As of the date of this registration statement we have raised $11,513 from
contributed capital by management and two private placements, management
believes that we will need to raise an additional $100,000 to meet our
capital requirements for at least the next 12 months and plans to keep
operating costs to a minimum until cash is available through financing or
operating activities. We plan to continue to seek other sources of financing
on favorable terms; however, there are no assurances that any such financing
can be obtained on favorable terms, if at all. If we are unable to generate
profits or unable to obtain additional funds for our working capital needs,
we may need to cease or curtail operations.
Competition
- -----------
We have developed a software program to track the process of mortgage
approvals. Our software program is not trademarked or protect by any
patents. Any who can develop a similar software program can infringe on the
Company's business, by offering the same service to the Company's customers
at a lower price. Many other companies are better funded and more
established than Nevada Processing Solutions, Inc.
Description of Property
- -----------------------
We do not hold ownership or leasehold interest in any property.
30
Directors, Executive Officers, and Control Persons
Our executive officers and Directors and their respective agesbeen audited as of the date of this Prospectus areprospectus.
7
Approximately $29,200 of the total has been accrued.
Employment Agreements
Effective August 15, 2011, the Company entered into an executive employment agreement with Edward Cespedes. Under the terms of the executive employment agreement, Mr. Cespedes has agreed to serve as follows:
Name Age Positions and Offices Held
- ---------------- ------ ----------------------------------------
J. Chad Guidry 33 President, Secretary, and Director
B. Work Experience
J. Chad Guidry, Director, President, CEO/CFO, Secretary
- -------------------------------------------------------
Mr. Guidry has served asour chief executive officer. The term of the Company's director, president, and secretary
since inception, and will serveagreement is one year; however, the agreement shall continue on a day to day basis following the board until the next annual
shareholders' meeting ofone year term unless the Company or untilMr. Cespedes provides written notice to the other party not to further extend the agreement. The agreement provides for an initial base salary of $250,000 per year with an increase at the discretion of the board of directors, paid vacation of at least four weeks per year and a successorreimbursement of all reasonable expenses. Mr. Cespedes is elected. There
areeligible to receive increases and annual cash incentive bonuses and shall be paid a guaranteed annual bonus of a minimum of $50,000 and is eligible for greater bonus payments depending on the Company’s performance. Mr. Cespedes is also eligible to participate in benefit and incentive programs we may offer. Under the agreement, Mr. Cespedes is required to devote sufficient time to the Company as required to satisfactorily perform his duties. As previously disclosed, we have also entered into an indemnification agreement with Mr. Cespedes.
We may terminate the agreement at any time, with or without due cause. “Due cause” is defined as Mr. Cespedes’ final conviction or plea of guilty or no agreementscontest to a felony involving moral turpitude or understandingswillful misconduct that is materially and demonstratably injurious economically to the Company. We may also terminate the agreement upon Mr. Cespedes’ death and, if as a result of Mr. Cespedes’ incapacity due to physical or mental illness, Mr. Cespedes, having been substantially unable to perform his duties for three consecutive months, we may terminate Mr. Cespedes for disability upon 30-days written notice.
Mr. Cespedes may terminate the agreement at any time, with or without good reason. However, termination for good reason must occur within 90 days of the occurrence of an event constituting good reason. “Good reason” includes: a material diminution in his authority, duties, responsibilities, titles or offices; a purported reduction in Mr. Cespedes’ base salary, guaranteed bonus or bonus opportunity; relocation of the Company’s principal executive offices to a location more than 25 miles outside of Fort Lauderdale, Florida; change of control of the Company; or any other breach of a material provision of the agreement by the Company.
In the event Mr. Cespedes is terminated without cause or by Mr. Cespedes for good reason, the Company shall pay Mr. Cespedes within five days of such termination, all accrued benefits and a lump sum cash payment equal to ten times the sum of Mr. Cespedes’ base salary and highest annual bonus. Furthermore, the Company shall maintain in full force and effect, for the officercontinued benefit of Mr. Cespedes, his spouse and directordependents, for a period of ten years following the date of termination, all health, dental and life insurance programs in which Mr. Cespedes, his spouse and his dependents were participating immediately prior to resign
at the requestdate of another person,termination. In addition, Mr. Cespedes shall be entitled to reimbursement for all reasonable expenses incurred, but not paid prior to termination and shall be entitled to any other rights, compensation and/or benefits as may be due to Mr. Cespedes. Furthermore, with respect to all equity awards granted to Mr. Cespedes, all such rewards shall immediately vest and Mr. Cespedes shall be permitted to exercise any and all such rights until the earlier of the third anniversary of the date of termination and the above-namedexpiration term of such awards. Any restricted stock held by Mr. Cespedes shall become immediately vested as of the date of termination.
In the event of termination of Mr. Cespedes for cause or by Mr. Cespedes without good reason, the Company shall pay Mr. Cespedes his accrued benefits, reimburse Mr. Cespedes for reasonable expenses incurred, but not paid prior to such termination date and Mr. Cespedes shall be entitled to any other rights, compensation and/or benefits as may be due to Mr. Cespedes.
In the event of termination for disability, Mr. Cespedes shall receive his accrued benefits for a period of one year. In addition, he shall be reimbursed for all reasonable expenses incurred, but not paid prior to the termination date and Mr. Cespedes shall be entitled to any other rights, compensation and/or benefits as may be due to Mr. Cespedes. In the event employment is terminated due to Mr. Cespedes’ death, the Company shall pay a lump sum to Mr. Cespedes’ beneficiary of his accrued benefits and shall provide Mr. Cespedes’ spouse and dependents with continued benefits for ten years. Mr. Cespedes’ beneficiary shall also be reimbursed for all reasonable expenses incurred, but not paid prior to Mr. Cespedes’ death and shall be entitled to any other rights, compensation and benefits as may be due to any such beneficiaries.
Except as otherwise disclosed above, we have not entered into employment agreements with, nor have we authorized any payments upon termination or change-in-control to any of our executive officers or key employees.
How Compensation for our Directors and Executive Officers was Determined
None of our directors receive any compensation for their services as a member of the Board of Directors. Our chief executive officer, Edward Cespedes, is compensated as per his employment agreement entered into on August 15, 2011. Mr. Cespedes is an experienced executive and we believe his compensation is commensurate with executives of publicly traded entities with similar background and experience.
Outstanding Equity Awards At December 31, 2010 Fiscal Year-End
None.
Grants of Plan Based Awards
None.
Equity Compensation Plan Information
None.
Limitation on Liability
Under our articles of incorporation, our directors are not liable for monetary damages for breach of fiduciary duty, except in connection with:
·
breach of the director’s duty of loyalty to us or our shareholders;
·
acts or omissions not in good faith or which involve intentional misconduct, fraud or a knowing violation of law;
·
a transaction from which our director received an improper benefit; or
·
an act or omission for which the liability of a director is not acting on behalf of, nor will act atexpressly provided under Florida law.
In addition, our bylaws provides that we must indemnify our officers and directors to the directionfullest extent permitted by Florida law for all expenses incurred in the settlement of any other person.
Set forth below isactions against such persons in connection with their having served as officers or directors.
Insofar as the namelimitation of, or indemnification for, liabilities arising under the Securities Act of 1933 may be permitted to directors, officers, or persons controlling us pursuant to the foregoing, or otherwise, we have been advised that, in the opinion of the sole directorSecurities and officer of the
Company, all positions and offices with the Company held, the period during
which he has servedExchange Commission, such limitation or indemnification is against public policy as such, and his business experience during at least
the last five years:
J. Chad Guidry - Work Background
Thomas Jefferson High School
Port Arthur, Texas
Diploma, 1991
Antony, Ltd., Audio Equipment Retailer
Crystal Beach, Texas
National Sales Representative, 1991-1999
Pennington Mortgage
Las Vegas, Nevada
Mortgage Loan Officer, 1999-Present
EZ Credit Repair, Inc.
Las Vegas, Nevada
President. Company helps mortgage applicants repair their
credit ratings, 2002-Present
31
JCG, Inc.
Las Vegas, NV
President. A "blank check" company. February, 2003 to March, 2004
GCJ, Inc.
Las Vegas, NV
President. A "blank check" company. March, 2004 to December, 2004
Pavo Royal, Inc.
Las Vegas, NV
President. A "blank check" company. December, 2004 to December, 2005.
Nevada Processing Solutions, Inc.
Las Vegas, Nevada
President. Company helps mortgage process loan applications,
2006-Present
C. Prior Blank Check Involvement
The SEC reporting blank check companies that Chad Guidry has served as
President and Director are listedexpressed in the following table:
Incorporation Form Date
Name Type File # of Filing Status(1)
- ------------- --------- ------- --------- ----------
JCG, Inc. 10SB12G 0-50344 July 16, 2003 Merger (2)
GCJ, Inc. 10SB12G 0-50738 May 5, 2004 Merger (3)
Pavo Royal, Inc. 10SB12G 0-51224 March 29, 2005 Merger (4)
(1) Under Merger Status "Merger" represents a merger has occurredSecurities Act of 1933 and the
company ceased to be a blank check company by operating specific business.
More detailed information for the merger is, disclosed in following paragraph:
(2) On March 19, 2004, JCG, Inc. merged with Neighborhood Connections, Inc.
("Neighborhood") whereby Neighborhood was the surviving corporation and JCG,
Inc. ceased to exist. Neighborhood was formed to provide management for the
collection of pay telephone coin revenues including the repair and
maintenance of existing pay telephone equipment, and the installation of new
telephone equipment. Pursuant to the Acquisition Agreement and Plan of
Merger, Neighborhood purchased all issued and outstanding 360,000 shares of
restricted common stock of JCG, Inc. from G. Chad Guidry, its sole
shareholder for $3,600 cash.
32
(3) On December 27, 2004, GCJ, Inc. merged with APD Antiquities, Inc. ("APD")
whereby APD was the surviving corporation and GCJ, Inc. ceased to exist. APD
is an e-Commerce company engaged in the business of acquiring, importing and
marketing valuable antique products such as furniture, works of art, antiques,
glass works, porcelain, statues, pottery, sculptures and other collectibles and
collector items. Pursuant to the Acquisition Agreement and Plan of Merger,
APD purchased all issued and outstanding 430,000 shares of restricted common
stock of GCJ, Inc. from G. Chad Guidry, its sole shareholder for $3,600
cash.
(4) On December 28, 2005, Pavo Royal, Inc. merged with MyQuoteZone ("Zone")
whereby Zone was the surviving corporation and Pavo Royal, Inc. ceased to
exist. Zone is a technology based marketing firm that specializes in online
lead generation. Pursuant to the Acquisition Agreement and Plan of Merger,
Zone purchased all issued and outstanding 510,000 shares of restricted common
stock of Pavo Royal, Inc. from G. Chad Guidry, its sole shareholder for
$3,600 cash.
EXECUTIVE COMPENSATION
There are no formal written employment arrangements in place. We do not have
any agreements or understandings that would change the terms of compensation
during the course of the year.
The table below shows what we have paid to our Directors since our inception
on May 30, 2006, through July 30, 2008.
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
------------------- -----------------------
Awards Payouts
- -----------------------------------------------------------------------------
Other Restric-
Annual ted Securities Other
Name and Compen- Stock Underlying LTIP Compen-
Principal Year Salary Bonus sation Awards Options/ Payouts sation
Position Ended ($) ($) ($) ($) SARs (#) ($) ($)
- -----------------------------------------------------------------------------
Chad Guidry 5/30/06 -0- -0- -0- -0- -0- -0- -0-
Pres, CEO & inception
Director to
6/30/2008
33
Stock Option Grants
- -------------------
We do not have any stock options outstanding. No stock options or stock
appreciation rights under any stock incentive plans were granted to our sole
Director and officer since our inception.
therefore, unenforceable.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We have
Except as disclosed below, we are currently not entered intoa part to any transactions withrelated party transaction, including transaction in which:
·
the amounts involved exceeded or will exceed the lesser or $120,000 or 1% of the average of our officers, Directors,
persons nominatedCompany’s total assets at year end for these positions, beneficial ownersthe last two fiscal years; and
·
a director, executive officer or holder of more than 5% or more of our common stock or any member of his or her immediate family members of these persons wherein the amount involved
in the transactionhad or will have a series of similar transactions exceeded $60,000.
There is a potential conflict of interest between the Company and Mr. J. Chad
Guidry, the Company'sdirect or indirect material interest.
During 2010, our sole officer and director. Mr. Guidry has other
business interests to which he currently devotes attention, and is expected
to continue to do so. As a result, conflictsdirector contributed $9,057 of interest may arise that can
be resolved only through his exercise of judgment in a manner which is
consistent with his fiduciary dutiessalary to the Company. InsofarThe amount was recorded as an in-kind contribution. During the six months ended June 30, 2011, the Company borrowed $1,389 from our sole officer and director is engagedto pay operating expenses. The loan was subsequently repaid without interest. We believe that these transactions were made on terms no less favorable to us than could have been obtained from unaffiliated third parties.
Currently, we have no independent directors on our Board of Directors, and therefore have no formal procedures in effect for reviewing and pre-approving any transactions between us, our directors, officers and other business activities, management anticipatesaffiliates. We will use our best efforts to insure that he will devote only a minor amount of timeall transactions are on terms at least as favorable to our affairs. However,
should such a conflict arise, there is no assurance that Mr. Guidry would not
attend to other matters prior to those of the Company. Mr. Guidry estimates
that the business plan of the Company can be implemented in theory by
devoting approximately 10 to 15 hours per month over the course of several
months but such figure cannot be statedas we would negotiate with precision.
Processing Pros, Inc., the Preferred shareholder, handles mortgage
applications. Once the Company becomes fully operational, Processing Pros,
Inc. plans to send business to Nevada Processing Solutions, Inc. There are
no agreements between the two entities. And, there are no assurances that
Processing Pros, Inc. will have or direct any business to Nevada Processing
Solutions, Inc.
The company's sole officer/director has contributed office space for our use.
There is no charge to us for the space. Our officer will not seek
reimbursement for past office expenses.
Through a Board Resolution, the Company hired the professional services of
Moore & Associates, Chartered, Certified Public Accountants, to perform
audited financials for the Company. Moore & Associates, Chartered own no
stock in the Company. The company has no formal contracts with its
accountants, they are paid on a fee for service basis.
34
LEGAL PROCEEDINGS
No officer, Director, or persons nominated for these positions, and no
promoter or significant employee of our corporation has been involved in
legal proceedings that would be material to an evaluation of our management.
We are not aware of any pending or threatened legal proceedings which involve
Nevada Processing Solutions, Inc.
Audit Committee
- ---------------
The company does not presently have an Audit Committee. The sole member of
the Board sits as the Audit Committee. No qualified financial expert has
been hired because the company is too small to afford such expense.
unrelated third parties.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table lists, as of October 24, 2008,shows the number of shares and percentage of Common Stock beneficially ownedall shares of common stock issued and outstanding as of December 31, 2011, held by (i) eachany person or entity known to ourthe Company to be the beneficial owner of 5% or more than 5% of the Company’s outstanding common stock; (ii)stock, by each executive officer and director, of our Company; and (iii)by all officersdirectors and directorsexecutive officers as a group. Information relatingThe persons named in the table have sole voting and investment power with respect to all shares beneficially owned. Unless otherwise noted below, each beneficial owner has sole power to vote and dispose of the shares and the address of such person is c/o our corporate offices at 511 N.E. 3rd Avenue, 1st Floor, Fort Lauderdale, Florida 33301. Pursuant to Rule 13d-3 under the Exchange Act, a person has beneficial ownership of any securities as to which such person, directly or indirectly, through any contract, arrangement, undertaking, relationship or otherwise has or shares voting power and/or investment power or as to which such person has the right to acquire such voting and/or investment power within 60 days. Applicable percentage of ownership is based on 44,646,539 shares of common stock outstanding as of December 31, 2011 together with securities exercisable or convertible into shares of common stock within sixty (60) days of December 31, 2011 for each stockholder.
Name and Address of Beneficial Owner |
| Number of Shares Beneficially Owned |
| Percentage of Ownership | |
Edward Cespedes |
| 10,503,117 | (1) |
| 23.6% |
Ronald Suster(2) |
| 2,494,404 |
|
| 5.6% |
All officers and directors |
| 10,503,117 | (1) |
| 23.6% |
as a group (1 person) |
|
|
|
|
|
———————
(1)
Shares held by Edward A. Cespedes Revocable Trust dated August 22, 2007, beneficially owned and controlled by Edward Cespedes as trustee. Ownership excludes 436,036 shares held in trust for the benefit of his children. Mr. Cespedes disclaims beneficial ownership of his children’s shares. Address is 417 N.E. 12th Avenue, Fort Lauderdale, Florida 33301.
(2)
Address is 2111 Aberdeen Drive, Euclid, Ohio 44143.
DESCRIPTION OF SECURITIES
Common Stock
Our articles of incorporation, as amended, authorize us to issue up to 195,000,000 shares of common stock, par value $0.001. At December 31, 2011, we had issued and outstanding 44,646,539 shares of common stock issued and outstanding of which, 10,503,117 shares or approximately 24% is owned or controlled by our officers and directors.
Holders of shares of common stock are entitled to one vote for each share on all matters to be voted on by the shareholders. Holders of common stock have no cumulative voting rights. In the event of liquidation, dissolution or winding up of the Company, the holders of shares of common stock are entitled to share, pro rata, all assets remaining after payment in full of all liabilities. Holders of common stock have no preemptive rights to purchase our common stock. There are no conversion rights or redemption or sinking fund provisions with respect to the common stock.
Preferred Stock
Our articles of incorporation authorize our board of directors, without shareholder approval, to issue up to 5,000,000 shares of preferred stock and to establish one or more series of preferred stock and to determine, with respect to each of these series, their preferences, voting rights and other terms. There are no shares of preferred stock issued or outstanding as of the date of this prospectus.
Common Stock Purchase Warrants and Options
On March 24, 2011, the Company granted a warrant exercisable to purchase 500,000 shares of the Company’s common stock at a price per share of $0.25 for a period of three years. The warrant was issued pursuant to the terms of an advisory services agreement.
On July 7, 2011, the Company granted options to purchase 200,000 shares of its common stock having an exercise price of $0.26 per share to a consultant. Options to purchase 100,000 shares are exercisable upon the date of grant and the remaining options to purchase 100,000 shares are exercisable six months from the date of grant. The options expire on July 7, 2012. The options were issued pursuant to the terms of an advisory services agreement.
On July 7, 2011, the Company issued options to purchase 100,000 shares of its common stock to a consultant at an exercise price of $0.26 per share. The options vest immediately. The options expire on July 7, 2013. The options were issued pursuant to the terms of an advisory services agreement.
On July 7, 2011, the Company issued options to purchase 100,000 shares of its common stock to an employee at an exercise price of $0.26 per share. The options vest immediately. The options expire on July 7, 2013. The options were issued pursuant to the terms of an option agreement.
During September we granted options to purchase 300,000 shares of common stock to a consultant exercisable at $0.18 per share. The options were issued in partial consideration of marketing services. The options are exercisable for a period of 3 years.
During September 2011 the Company has granted warrants to purchase an aggregate of 10,000,000 shares of common stock to 8 consultants. The warrants are exercisable for a period of 3 years at prices ranging from $0.16 per share to $0.23 per share. The warrants were issued in consideration of business consulting services. There are 2,000,000 warrants exercisable at $0.16 per share that are currently vested. None of the warrants exercisable at $0.23 are currently vested. Warrants exercisable at $0.23 vest as follows: warrants to purchase 2,665,999 shares vest on September 8, 2012; warrants to purchase 2,666,001 shares vest on September 8, 2013; and warrants to purchase 2,668,000 shares vest on September 8, 2014.
SELLING SECURITY HOLDERS
At December 31, 2011, we had 44,646,539 shares of common stock issued and outstanding. This prospectus relates to periodic offers and sales of up to 31,461,621 shares of common stock by our principal shareholdersthe selling security holders listed below and managementtheir pledges, donees and other successors in interest, which includes up to 20,261,621 shares of common stock presently issued and outstanding; and up to 11,200,000 shares of common stock issuable upon the possible exercise of options and warrants.The following table set forth:
·
The name of each selling security holder;
·
The number of common shares owned; and
·
The number of common shares being registered for resale by the selling security holder.
We will not receive any of the proceeds from the sale of common stock covered under this prospectus. To the extent the warrants or options are exercised on a cash basis, we will receive proceeds of the exercise price. The shares of common stock are being offered for sale by the selling security holders at prices established on the OTC Exchange during the term of this offering. These prices will fluctuate based on the demand for the shares of common stock.
Information on beneficial ownership of securities is based upon a record list of our shareholders. We may amend or supplement this prospectus from time to time to update the disclosure set forth in this prospectus. All of the securities owned by the selling security holders may be offered hereby. Because the selling security holders may sell some or all of the securities owned by them, and because there are currently no agreements, arrangements or understandings with respect to the sale of any of the securities, no estimate can be given as to the number of securities that will be held by the selling security holders upon termination of any offering made hereby. If all the securities offered hereby are sold, the selling security holders will not own any securities after the offering.
The table below lists the selling security holders and other information furnishedregarding the beneficial ownership of the shares of common stock by each person using "beneficial ownership" concepts
under the rules of the Securitiesselling security holders. The second column lists the number of shares of common stock beneficially owned by each Selling Security Holder as of December 31, 2011, assuming the exercise of all of the options and Exchange Commission. warrants held by the selling security holders on that date. The third column lists the shares of common stock beneficially owned, inclusive of securities underlying options and warrants, being offered pursuant to this prospectus by each of the selling security holders. The fourth column lists the number of shares that will be beneficially owned by the selling security holders assuming all of the shares offered pursuant to this prospectus are sold and that shares beneficially owned by them, as of December 31, 2011 but not offered hereby are not sold. All selling security holders listed below are eligible to sell their shares.
Under theseapplicable SEC rules, a person is deemed to beneficially own securities which the person has the right to acquire within 60 days through the exercise of any option or warrant or through the conversion of a convertible security. Also under applicable SEC rules, a person is deemed to be a beneficial ownerthe “beneficial owner” of a security if thatwith regard to which the person directly or indirectly, has or shares (a) voting power, which includes the power to vote or direct the voting of the security, or (b) investment power, which includes the power to votedispose, or direct the votingdisposition, of the security, in each case, irrespective of the person’s economic interest in the security. Each listed selling security holder has the sole investment and voting power with respect to all shares of common stock shown as beneficially owned by such selling security holder, except as otherwise indicated in the footnotes to the table.
Except as indicated in the footnotes to the table, no Selling Security Holder has had any material relationship with us or our predecessors or affiliates during the last three years.
Name of Selling Security Holder |
| Number of Shares beneficially owned |
| Shares to be offered |
| Shares to be |
| % to be owned after offering |
|
Merger |
|
|
|
|
|
|
|
|
|
Edward A. Cespedes Revocable Trust |
| 10,503,117 |
| 5,034,909 |
| 5,468,208 |
| 12.2% |
|
Trust for Benefit of Caroline Grace Cespedes |
| 218,018 |
| 218,018 |
| --- |
| --- |
|
Trust for Benefit of Edward Michael Cespedes |
| 218,018 |
| 218,018 |
| --- |
| --- |
|
Michael S. Egan Living Trust(4) |
| 386,037 |
| 386,037 |
| --- |
| --- |
|
Kent Clothier |
| 386,037 |
| 386,037 |
| --- |
| --- |
|
Frederick Middleton |
| 48,612 |
| 48,612 |
| --- |
| --- |
|
Blake Ruderman |
| 965,091 |
| 965,091 |
| --- |
| --- |
|
Patricia L. Chase |
| 386,037 |
| 386,037 |
| --- |
| --- |
|
Mike Kennelty |
| 350,292 |
| 350,292 |
| --- |
| --- |
|
Charles Fox Miller |
| 89,360 |
| 89,360 |
| --- |
| --- |
|
Glenwood Capital Corporation(5) |
| 790,913 |
| 790,913 |
| --- |
| --- |
|
Rustin Kluge |
| 965,091 |
| 965,091 |
| --- |
| --- |
|
Frank R. Parker, IV |
| 115,811 |
| 115,811 |
| --- |
| --- |
|
Noah Liiv |
| 38,604 |
| 38,604 |
| --- |
| --- |
|
Monte S. Cahn 2009 Revocable Trust(29) |
| 772,073 |
| 772,073 |
| --- |
| --- |
|
Christopher D. Montmeny |
| 656,262 |
| 656,262 |
| --- |
| --- |
|
Paul Levine |
| 1,881,929 |
| 1,881,929 |
| --- |
| --- |
|
Robert W. Gritter |
| 529,014 |
| 529,014 |
| --- |
| --- |
|
Schachter Family Limited Partnership(6) |
| 772,073 |
| 772,073 |
| --- |
| --- |
|
James Radice |
| 364,506 | (15) | 364,506 |
| --- |
| --- |
|
Philip M. Verde |
| 77,207 |
| 77,207 |
| --- |
| --- |
|
Joel & Jennifer Perlmutter |
| 142,977 |
| 142,977 |
| --- |
| --- |
|
George H. Aslanian |
| 25,000 |
| 25,000 |
| --- |
| --- |
|
Other Issuances |
|
|
|
|
|
|
|
|
|
Pearlman & Pearlman LLC(7) |
| 100,000 |
| 100,000 |
| --- |
| --- |
|
Greg Bloom |
| 250,000 |
| 250,000 |
| --- |
| --- |
|
Joseph Metcalfe |
| 120,000 |
| 120,000 |
| --- |
| --- |
|
Kavita Channe |
| 20,000 |
| 20,000 |
| --- |
| --- |
|
Horizon Interactive, LLC(8) |
| 500,000 | (8) | 500,000 |
| --- |
| --- |
|
Private Placement Subscribers |
|
|
|
|
|
|
|
|
|
Philip Gutman |
| 82,308 |
| 82,308 |
| --- |
| --- |
|
Ronald Suster |
| 740,769 |
| 740,769 |
| --- |
| --- |
|
Clyde Berg |
| 411,538 |
| 411,538 |
| --- |
| --- |
|
Arthur J. Tacopino |
| 102,885 |
| 102,885 |
| --- |
| --- |
|
John F. Riccardi, Jr. |
| 102,885 |
| 102,885 |
| --- |
| --- |
|
Barbara Mishan |
| 102,885 |
| 102,885 |
| --- |
| --- |
|
Sehba Kudiya |
| 123,462 |
| 123,462 |
| --- |
| --- |
|
Meyers Associates LP Pension 1(9) |
| 123,462 |
| 123,462 |
| --- |
| --- |
|
Meridian Venture Group(10) |
| 61,731 |
| 61,731 |
| --- |
| --- |
|
Siegrist Family Revocable Living Trust(11) |
| 205,769 |
| 205,769 |
| --- |
| --- |
|
Andy T. Moy |
| 102,885 |
| 102,885 |
| --- |
| --- |
|
Makana Merchandising, Inc. (12) |
| 102,885 |
| 102,885 |
| --- |
| --- |
|
Jack Kennelty |
| 10,286 |
| 10,286 |
| --- |
| --- |
|
Paul Sallarulo |
| 180,000 | (16) | 1,180,000 | (17) |
|
|
|
|
Alvin J. Nassar |
| 1,200,000 | (18) | 2,500,000 | (19) | --- |
| --- |
|
James Hamway and Carole Hamway |
| 200,000 |
| 200,000 |
| --- |
| --- |
|
James Morrell |
| 200,000 |
| 200,000 |
| --- |
| --- |
|
Bradley R. Twait |
| 200,000 |
| 200,000 |
| --- |
| --- |
|
Sound Harbor Associates LLC(13) |
| 400,000 |
| 400,000 |
| --- |
| --- |
|
Kyle Stanley |
| 200,000 |
| 200,000 |
| --- |
| --- |
|
57 Hendricks Isle LLC(14) |
| 200,000 |
| 200,000 |
| --- |
| --- |
|
Matt Sailor |
| 200,000 |
| 200,000 |
| --- |
| --- |
|
Andrew Giannopulous |
| 200,000 |
| 200,000 |
| --- |
| --- |
|
Option and Warrant Holders |
|
|
|
|
|
|
|
|
|
Andrew Nassar |
| 0 |
| 650,000 | (20) | --- |
| --- |
|
Kevin Nassar |
| 0 |
| 650,000 | (21) | --- |
| --- |
|
Olivia Knudsen |
| 0 |
| 650,000 | (22) | --- |
| --- |
|
Photios Cougentakis |
| 1,000,000 | (23) | 2,300,000 | (24) | --- |
| --- |
|
Elizabeth Cougentakis |
| 0 |
| 1,950,000 | (25) | --- |
| --- |
|
Pointe Capital Advisors, Inc. |
| 0 |
| 500,000 | (26) | --- |
| --- |
|
Gennadiy Borisov |
| 100,000 | (27) | 200,000 | (28) | --- |
| --- |
|
———————
*
Represents less than 1.0%
Voting and dispositive control held by Edward A. Cespedes. Mr. Cespedes serves as officer and director of our company.
2.
Voting and dispositive control held by Stephanie Litofsky, Robert A. Giannini and Daniel G. Walsh.
3.
Voting and dispositive control held by Stephanie Litofsky, Robert A. Giannini and Daniel G. Walsh.
4.
Voting and dispositive control held by Michael S. Egan.
5.
Voting and dispositive control held by Peter S. Chung.
6.
Voting and dispositive control held by Ben L. Schachter.
7.
Voting and dispositive control held by Brian Pearlman.
8.
Voting and dispositive control held by Howard Dvorkin. Also includes options to purchase up to 300,000 shares of common stock exercisable at $0.18 per share.
9.
Voting and dispositive control held by Bruce Meyers.
10.
Voting and dispositive control held by Shahid Khan.
11.
Voting and dispositive control held by James Siegrist.
12.
Voting and dispositive control held by Heidi A. Mizera.
13.
Voting and dispositive control held by Photios Cougentakis.
14.
Voting and dispositive control held by James J. Atria.
15.
Includes options to purchase 100,000 shares of common stock exercisable at $0.26 per share.
16.
Includes 100,000 shares of common stock underlying options exercisable at $0.26 per share.
17.
Includes 100,000 shares of common stock underlying options exercisable at $0.26 per share. Also includes an aggregate of 1,000,000 shares of common stock underlying warrants exercisable at $0.23 per share, warrants to purchase 333,333 shares vesting on September 8, 2012, warrants to purchase 333,333 shares vesting on September 8, 2013 and warrants to purchase 333,334 shares vesting on September 8, 2014.
18.
Includes 1,000,000 shares of common stock underlying a warrant exercisable at $0.16 per share.
19.
Includes 1,000,000 shares of common stock underlying a warrant exercisable at $0.16 per share. Also includes 1,083,000 shares of common stock underlying a warrant exercisable at $0.23 per share vesting on September 8, 2012 and 217,000 shares of common stock underlying a warrant exercisable at $0.23 per share vesting on September 8, 2013.
20.
Includes 288,667 shares of common stock underlying a warrant exercisable at $0.23 per share vesting on September 8, 2013 and 361,333 shares of common stock underlying a warrant exercisable at $0.23 per share vesting on September 8, 2014.
21.
Includes 288,667 shares of common stock underlying a warrant exercisable at $0.23 per share vesting on September 8, 2013 and 361,333 shares of common stock underlying a warrant exercisable at $0.23 per share vesting on September 8, 2014.
22.
Includes 288,667 shares of common stock underlying a warrant exercisable at $0.23 per share vesting on September 8, 2013 and 361,333 shares of common stock underlying a warrant exercisable at $0.23 per share vesting on September 8, 2014.
23.
Includes 1,000,000 shares of common stock underlying a warrant exercisable at $0.16 per share.
24.
Includes 1,000,000 shares of common stock underlying a warrant exercisable at $0.16 per share. Also, includes 1,083,000 shares of common stock underlying a warrant exercisable at $0.23 per share vesting on September 8, 2012 and 217,000 shares of common stock underlying a warrant exercisable at $0.23 per share vesting on September 8, 2013.
25.
Includes 866,000 shares of common stock underlying a warrant exercisable at $0.23 per share vesting onSeptember 8, 2013 and 1,084,000 shares of common stock underlying a warrant exercisable at $0.23 per share vesting on September 8, 2014.
26.
Voting and dispositive control held by James Morrell. Includes 166,666 shares of common stock underlying a warrant exercisable at $0.23 per share vesting on September 8, 2012, 166,667 shares of common stock underlying a warrant exercisable at $0.23 per share vesting on September 8, 2013 and 166,667 shares of common stock underlying a warrant exercisable at $0.23 per share vesting on September 8, 2014.
27.
Includes 100,000 shares of common stock underlying a warrant exercisable at $0.26 per share.
28.
Includes 100,000 shares of common stock underlying a warrant exercisable at $0.26 per share. Also includes 100,000 shares of common stock underlying a warrant exercisable at $0.26 per share vesting January 7, 2012.
29.
Voting and dispositive control held by Monte S. Cahn.
PLAN OF DISTRIBUTION
The person isselling security holders and any of their respective pledgees, donees, assignees and other successors-in-interest may, from time to time, sell any or all of their shares of common stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions. The selling security holders will offer their shares at prevailing market prices on the OTC Markets or privately negotiated prices. The selling security holders may use any one or more of the following methods when selling shares:
·
ordinary brokerage transactions and transactions in which the broker-dealer solicits the purchaser;
·
block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal;
·
facilitate the transaction;
·
purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
·
an exchange distribution in accordance with the rules of the applicable exchange;
·
privately negotiated transactions;
·
broker-dealers may agree with the selling security holders to sell a specified number of such shares at a stipulated price per share;
·
through the writing of options on the shares;
·
a combination of any such methods of sale; and
·
any other method permitted pursuant to applicable law.
The selling security holders may also deemedsell shares under Rule 144 of the Securities Act, if available, rather than under this prospectus. The selling security holders shall have the sole and absolute discretion not to accept any purchase offer or make any sale of shares if it deems the purchase price to be unsatisfactory at any particular time.
The selling security holders or their respective pledgees, donees, transferees or other successors in interest, may also sell the shares directly to market makers acting as principals and/or broker-dealers acting as agents for themselves or their customers. Such broker-dealers may receive compensation in the form of discounts, concessions or commissions from the selling security holders and/or the purchasers of shares for whom such broker-dealers may act as agents or to whom they sell as principal or both, which compensation as to a beneficial ownerparticular broker-dealer might be in excess of customary commissions. Market makers and block purchasers purchasing the shares will do so for their own account and at their own risk. It is possible that a selling stockholder will attempt to sell shares of common stock in block transactions to market makers or other purchasers at a price per share which may be below the then existing market price. We cannot assure that all or any of the shares offered in this prospectus will be issued to, or sold by, the selling security holders. The selling security holders and any brokers, dealers or agents, upon effecting the sale of any security of which that person has a right to acquire
beneficial ownership within 60 days. Under the Securities and Exchange
Commission rules, more than one personshares offered in this prospectus, may be deemed to be a beneficial owner“underwriters” as that term is defined under the Securities Exchange Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the rules and regulations of such acts. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the same securities, and a personshares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act.
We are required to pay all fees and expenses incident to the registration of the shares, including fees and disbursements of counsel to the selling security holders, but excluding brokerage commissions or underwriter discounts.
The selling security holders, alternatively, may sell all or any part of the shares offered in this prospectus through an underwriter. The selling security holders have not entered into any agreement with a beneficial ownerprospective underwriter and there is no assurance that any such agreement will be entered into.
The selling security holders may pledge their shares to their brokers under the margin provisions of customer agreements. If a selling security holder defaults on a margin loan, the broker may, from time to time, offer and sell the pledged shares. The selling security holders and any other persons participating in the sale or distribution of the shares will be subject to applicable provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations under such Act, including, without limitation, Regulation M. These provisions may restrict certain activities of, and limit the timing of purchases and sales of any of the shares by, the selling security holders or any other such person. In the event that any of the selling security holders are deemed an affiliated purchaser or distribution participant within the meaning of Regulation M, then the selling security holders will not be permitted to engage in short sales of common stock. Furthermore, under Regulation M, persons engaged in a distribution of securities asare prohibited from simultaneously engaging in market making and certain other activities with respect to which he
such securities for a specified period of time prior to the commencement of such distributions, subject to specified exceptions or she mayexemptions. In addition, if a short sale is deemed to be a stabilizing activity, then the selling security holders will not have any pecuniary beneficial
interest. Except as noted below, each person has sole voting and investment
power.
35
The percentages below are calculated based on 3,375,000 and 12,101,900
shares respectfully of our common stock issued and outstanding. We do not
have any outstanding options or warrants convertible into sharesbe permitted to engage in a short sale of our common stock.
AMOUNT AND PERCENT OF PERCENT OF
NATURE OF CLASS CLASS
TITLE OF NAME OF BENEFICIAL BENEFICIAL BEFORE AFTER
CLASS OWNER AND POSITION OWNERSHIP CONVERSION(1) CONVERSION(2)
- -----------------------------------------------------------------------------
Common J. Chad Guidry (3) 3,100,000 91.8% 25.6%
President,
Secretary, Director
Ownership upon conversion of
Shareholders' preferred stock
Common Processing Pros, Inc.(4) 8,726,900 0.0% 72.1%
-----------------------------------------
DIRECTORS AND OFFICERS AS A GROUP
(1 person) 3,100,000 91.8% 25.6%
(1) PercentAll of Class based on 4,231,000 shares before conversion of Series
A Callable and Convertible Preferred shares.
(2) Percent of Class based on 154,231,000 after conversionthese limitations may affect the marketability of the 750,000
Series A Callable and Convertible Preferred shares.
(3) J. Chad Guidry, 9646 Giddings, Las Vegas, NV 89148
(4) Processing Pros, Inc.,
If a Nevada corporation, beneficially controlled
and owned by Leslie Biaggi, President, Secretary, Treasurer and Director,
8113 Meantmore Ave., Las Vegas, NV 89117. Leslie Biaggiselling stockholder notifies us that it has a material arrangement with a broker-dealer for the ultimate
voting control over the shares held this entity.
The Company currently has no non-voting securities or other securities
outstanding, and there are no contracts or other arrangements that could
result in a change of control of the Company.
CHANGES IN CONTROL
There are currently no arrangements which would result in a change in control
of Nevada Processing Solutions, Inc.
36
DESCRIPTION OF SECURITIES
The authorized capital stock of Nevada Processing Solutions, Inc. consists of
200,000,000 common shares. This consists of 195,000,000 common stock, par
value $0.001; and 5,000,000 preferred stock, par value $0.001
Common Stock
Holdersresale of the common stock, have no preemptive rightsthen we would be required to purchase additional
shares of common stock or other subscription rights. The common stock carries
no conversion rights and is not subject to redemption or to any sinking fund
provisions. All shares of common stock are entitled to share equally in
dividends from sources legally available, therefore, when, as and if declared
by the Board of Directors, and upon liquidation or dissolution of Nevada
Processing Solutions, Inc., whether voluntary or involuntary, to share
equally in the assets of Nevada Processing Solutions available for
distribution to stockholders.
The Board of Directors is authorized to issue additional shares of common
stock not to exceed the amount authorized by Nevada Processing Solutions's
Articles of Incorporation, on such terms and conditions and for such
consideration as the Board may deem appropriate without further stockholder
action.
Voting Rights
Each holder of common stock is entitled to one vote per share on all matters
on which such stockholders are entitled to vote. Since the shares of common
stock do not have cumulative voting rights, the holders of more than 50
percent of the shares voting for the election of Directors can elect all the
Directors if they choose to do so and, in such event, the holders of the
remaining shares will not be able to elect any person to the Board of
Directors.
Preferred Convertible Securities
At the time of incorporation, we issued 872,690 non-voting Callable and
Convertible Preferred shares. We filed with the Nevada Secretary of State
the designation that "These Series A Preferred shares shall be designated as
"Callable and Convertible Preferred Stock." The corporation has the right to
call for and purchase these shares at any time, within twelve months of
issue, either at par value or at a slight premium above par value, or if
corporation should designate that these shares are deemed not callable, the
holders of these non-voting Series A Preferred Shares shall have the right to
cause the corporation to redeem shares for Common Stock at any time. Each
holder of the non voting Series A Callable and Convertible Preferred Stock
shall have the right to convert all or any portion of such shares as such
holder desires to convert, into shares of the Common Stock of the
corporation, as follows: each share of Series A Convertible Preferred Stock
can be exchanged for ten (10) shares of Common Stock of the corporation."
37
Through a Board Resolution, it was resolved that we shall not call nor redeem
our Series A non-voting Callable and Convertible Preferred shares. The
shareholders of the Series A Preferred shares will be permitted to convert
each Series A Preferred share owned for ten common shares, at their
sole discretion. The conversion of 872,690 Series A Preferred Shares
converts into 8,726,900 common shares which we registering in this
Prospectus.
Dividend Policy
Holders of Nevada Processing Solutions's common stock are entitled to
dividends if declared by the Board of Directors out of funds legally
available; therefore, Nevada Processing Solutions does not anticipate the
declaration or payment of any dividends in the foreseeable future. We intend
to retain earnings, if any, to finance the development and expansion of our
business. Future dividend policy will be subject to the discretion of the
Board of Directors and will be contingent upon future earnings, if any,
Nevada Processing Solutions's financial condition, capital requirements,
general business conditions, and other factors. Therefore, there can be no
assurance that any dividends of any kind will ever be paid.
Share Purchase Warrants
We have not issued and do not have outstanding any warrants to purchase
shares of our common stock.
Options
We have not issued and do not have outstanding any options to purchase shares
of our common stock.
INTERESTS OF NAMED EXPERTS AND COUNSEL
No expert or counsel named in this prospectus as having prepared or certified
any part of this Prospectus or having given an opinion upon the validity of
the securities being registered or upon other legal matters in connection
with the registration or offering of the common stock was employed on a
contingency basis, or had, or is to receive, in connection with the offering,
a substantial interest, direct or indirect, in the Registrant. Nor was any
such person connected with the registrant as a promoter, managing or
principal underwriter, voting trustee, Director, officer, or employee.
Thomas C. Cook, Esq. our legal counsel has provided an opinion on the
validity of our common stock. The financial statements included in this
prospectus andamend the registration statement have been audited by Moore &
Associates, Chartered., Certified Public Accountants, to the extent and for
the periods set forth in their report appearing elsewhere inof which this document
and in the registration statement filed with the SEC, and are included in
reliance upon such report given upon the authority of said firm as experts in
auditing and accounting.
38
ADDITIONAL INFORMATION
We have filed with the Commission a registration statement on Form S-1 under
the 1933 Act with respect tothe securities offered by this Prospectus. This
Prospectus, which formsprospectus is a part, ofand file a prospectus supplement to describe the Registration Statement, does not
contain allagreements between the information set forth in the Registration Statement, as
permitted by the rules and regulations of the Commission. For further
information with respect to usselling stockholder and the securities offered by this Prospectus,
reference is made to the Registration Statement. Statements contained in this
Prospectusbroker-dealer.
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Our Bylaws, as to the contents of any contract or other document that we have
filed as an exhibit to the Registration Statement are qualified in their
entirety by reference to the to the exhibits for a complete statement of
their terms and conditions.
The Registration Statement and other information may be read and copied at
the Commission's Public Reference Room at 100 F Street, N.E., Washington,
D.C. 20549. The public may obtain information on the operation of the Public
Reference Room by calling the Commission at 1-800-SEC-0330. The Commission
maintains an Internet site that contains reports, proxy, and information
statements, and other information regarding issuers that file electronically
with the Commission. The address of that site is http://www.sec.gov.
Indemnification for Securities Act Liabilities
----------------------------------------------
Our Articles and By-lawsamended, provide to the fullest extent permitted by Nevada law that our directors or officers former directorsshall not be personally liable to us or our shareholders for damages for breach of such director’s or officer’s fiduciary duty. The effect of this provision of our Articles of Incorporation, as amended, is to eliminate our rights and officers, and persons who act at
our requestshareholders (through shareholders’ derivative suits on behalf of our company) to recover damages against a director or officer for breach of the fiduciary duty of care as a director or officer of a body corporate of which we are a
shareholder(including breaches resulting from negligent or creditor shall be indemnifiedgrossly negligent behavior), except under certain situations defined by us.statute. We believe that the indemnification provisions in our By-lawsArticles of Incorporation, as amended, are necessary to attract and retain qualified persons as directors and officers.
The Nevada Revised Statutes provides that a corporation may indemnify a director, officer, employee or agent made a party to an action by reason of that fact that he or she was a director, officer, employee or agent of the corporation or was serving at the request of the corporation against expenses actually and reasonably incurred by him or her in connection with such action if he or she acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the corporation and with respect to any criminal action, had no reasonable cause to believe his or her conduct was unlawful.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the "Act" or
"Securities Act") may be permitted to directors, officers orand controlling persons controlling usof the registrant pursuant to the foregoing provisions, or otherwise, we havethe registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. REPORTS TO SECURITY HOLDERS
Upon effectivenessIn the event that a claim for indemnification against such liabilities (other than the payment by the registrant of this Prospectus, weexpenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be subject to the reporting
and other requirements of the Exchange Act and we intend to furnish our
shareholders annual reports containing financial statements audited by our
registered independent auditors and to make available quarterly reports
containing unaudited financial statements for each of the first three
quarters of each year.
39
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market Information
Our common stock is not quoted on any exchange. We plan to eventually seek
listing on the OTC Bulletin Board, once our Prospectus has been declared
effectivegoverned by the Commission. We cannot guarantee that we will obtain a
listing. There is no trading activity in our securities, and there can be no
assurance that a regular trading market forfinal adjudication of such issue.
LEGAL MATTERS
The validity of our common stock will ever be
developed.
A market maker sponsoring a company's securities is required to obtain a
listing of the securities on any of the public trading markets, including the
OTC Bulletin Board. If we are unable to obtain a market maker for our
securities, weoffered hereby will be unablepassed upon by Quintairos, Prieto, Wood & Boyer, P.A. (QPWB), Fort Lauderdale, Florida. Affiliates of QPWB have been issued an aggregate of 150,000 shares of common stock in consideration of legal services rendered.
EXPERTS
The balance sheet of MMAX Media, Inc. (f/k/a Hyperlocal Marketing, LLC) from inception through December 31, 2010 and the related statement of operations, and members equity, and cash flows from inception, January 22, 2010 to develop a trading market for our common
stock. We may be unable to locate a market maker that will agree to sponsor
our securities. Even if we do locate a market maker, there is no assurance
that our securities will be able to meet the requirements for a quotation or
that the securities will be accepted for listingDecember 31, 2010 appearing in this prospectus and registration statement have been so included in reliance on the OTC Bulletin Board.
We intend to apply for listingReport of the securitiesWebb & Company, P.A., an independent registered public accounting firm, appearing elsewhere in this prospectus, given on the OTC Bulletin Board,
but there can be no assurance that we will be able to obtain this listing.
The OTC Bulletin Board securities are not quotedauthority of such firm as experts in accounting and traded on the floor of
an organized national or regional stock exchange. Instead, OTC Bulletin Board
securities transactions are conducted through a telephone and computer
network connecting dealers in stocks. OTC Bulletin Board stocks are
traditionally smaller companies that do not meet the financial and other
listing requirements of a regional or national stock exchange.
Where You Can Find More Information
-----------------------------------
We have filed a registration statement on Form S-1 under the Securities Act
with the SEC for the securities offered hereby. auditing.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus which
constitutes a part of the registration statement, does not contain all of the information set forth in the registration statement orand the exhibits and schedules which are part ofthat were filed with the registration statement. For additionalfurther information aboutwith respect to the common stock and us, and our securities, we refer you to the registration statement and the accompanying exhibits and schedules.schedules that were filed with the registration statement. Statements containedmade in this prospectus regarding the contents of any contract, agreement or any other documentsdocument that is filed as an exhibit to which we referthe registration statement are not necessarily complete. In each instance,
reference is madecomplete, and we refer you to the copyfull text of the contract or other document filed as an exhibit to the registration statement, and each statement is qualified in all
respects by that reference. Copiesstatement. A copy of the registration statement and the accompanying exhibits and schedules that were filed with the registration statement may be inspected without charge (and
copies may be obtained at prescribed rates) at the public reference facility
of the SEC at Room 1024, 100 F Street, N.E. Washington, D.C. 20549.
You can request copies of these documents upon payment of a duplicating fee
by writing to the SEC. You may call the SEC at 1-800-SEC-0330 for further
information on the operation of its public reference rooms. Our filings,
including the registration statement, will also be available to you on the
Internet web sitefacilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549 or via the Internet at http://www.sec.gov.
40
NEVADA PROCESSING SOLUTIONS, INC.
(Awww.sec.gov.
INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MMAX MEDIA, INC. AND SUBSIDIARIES | |
CONDENSED CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2011 | |
(RESTATED) (UNAUDITED) AND AS OF DECEMBER 31, 2010 | F-2 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS (RESTATED) ENDED SEPTEMBER 30, 2011, THE THREE MONTHS ENDED SEPTEMBER 30, 2010, THE PERIOD FROM JANUARY 22, 2010 (INCEPTION) TO SEPTEMBER 30, 2010, AND FOR THE PERIOD FROM JANUARY 22, 2010 (INCEPTION) TO SEPTEMBER 30, 2011 (UNAUDITED) (RESTATED) | F-3 |
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE PERIOD FROM JANUARY 22, 2010 (INCEPTION) TO SEPTEMBER 30, 2011 (UNAUDITED) (RESTATED) | F-4 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011 RESTATED), THE PERIOD JANUARY 22, 2010 (INCEPTION) TO SEPTEMBER 30, 2010, AND FOR THE PERIOD FROM JANUARY 22, 2010 (INCEPTION) TO SEPTEMBER 30, 2011(UNAUDITED) (RESTATED) | F-5 |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | F-6 |
HYPERLOCAL MARKETING, LLC | |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | F-16 |
BALANCE SHEET DECEMBER 31, 2010 | F-17 |
STATEMENT OF OPERATIONS AND MEMBERS EQUITY FOR THE PERIOD FROM | |
JANUARY 22, 2010 (INCEPTION) TO DECEMBER 31, 2010 | F-18 |
STATEMENT OF CASH FLOWS FOR THE PERIOD FROM JANUARY 22, 2010 (INCEPTION) | |
TO DECEMBER 31, 2010 | F-19 |
NOTES TO FINANCIAL STATEMENTS | F-20 |
MMAX MEDIA, INC AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
INDEXENTERPRISE)
CONDENSED CONSOLIDATED BALANCE SHEETS
| September 30, |
| December 31, |
| ||
|
| (Unaudited) (As Restated Note 5) |
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
|
|
Cash | $ | 130,554 |
| $ | 13,989 |
|
Prepaid expenses |
| 6,600 |
|
| 2,082 |
|
|
|
|
|
|
|
|
TOTAL CURRENT ASSETS |
| 137,154 |
|
| 16,071 |
|
|
|
|
|
|
|
|
COMPUTER EQUIPMENT AND WEBSITE COSTS, NET |
| 23,652 |
|
| 25,283 |
|
|
|
|
|
|
|
|
OTHER ASSETS |
|
|
|
|
|
|
Deposits |
| 4,290 |
|
| - |
|
|
|
|
|
|
|
|
TOTAL OTHER ASSETS |
| 4,290 |
|
| - |
|
|
|
|
|
|
|
|
TOTAL ASSETS | $ | 165,096 |
| $ | 41,354 |
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
Accounts Payable | $ | 9,356 |
| $ | 3,000 |
|
Accrued expenses |
| 29,066 |
|
| - |
|
Deferred revenue |
| 124 |
|
| 4,960 |
|
Note Payable |
| 2,000 |
|
| 15,000 |
|
|
|
|
|
|
|
|
TOTAL CURRENT LIABILITIES |
| 40,546 |
|
| 22,960 |
|
|
|
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES |
| - |
|
| - |
|
|
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock, $0.001 par value, 5,000,000 shares authorized, 0 shares issued and outstanding, respectively |
| - |
|
| - |
|
Common stock, $0.001 par value, 195,000,000 shares authorized, 44,646,539 and 20,582,076 shares issued and outstanding, respectively |
| 44,645 |
|
| 20,580 |
|
Additional paid in capital |
| 1,423,753 |
|
| 252,150 |
|
Accumulated deficit during development stage |
| (1,343,848 | ) |
| (254,336 | ) |
TOTAL STOCKHOLDERS’ EQUITY |
| 124,550 |
|
| 18,394 |
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 165,096 |
| $ | 41,354 |
|
See accompanying notes to condensed consolidated unaudited financial statements
MMAX MEDIA INC AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
|
| For the |
| For the |
| For the |
| For the Period |
| For the Period |
| |||||
|
|
|
|
|
|
|
| (As Restated Note 5) |
|
|
| (As Restated Note 5) |
| |||
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service Revenue, net |
| $ | 7,285 |
| $ | 13,176 |
| $ | 25,928 |
| $ | 17,731 |
| $ | 54,901 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Professional fees |
|
| 7,106 |
|
| 775 |
|
| 94,646 |
|
| 1,780 |
|
| 96,426 |
|
Web development and hosting |
|
| 17,435 |
|
| 1,473 |
|
| 55,546 |
|
| 9,487 |
|
| 76,168 |
|
Marketing |
|
| 5,135 |
|
| 1,028 |
|
| 8,157 |
|
| 3,022 |
|
| 9,167 |
|
Payroll and payroll taxes |
|
| 119,409 |
|
| 28,628 |
|
| 213,171 |
|
| 80,767 |
|
| 312,044 |
|
Consulting |
|
| 529,462 |
|
| 1,530 |
|
| 584,673 |
|
| 2,568 |
|
| 696,346 |
|
Travel and entertainment |
|
| 9,135 |
|
| 9,786 |
|
| 22,156 |
|
| 18,581 |
|
| 48,343 |
|
Impairment of |
|
| - |
|
| - |
|
| 1,454 |
|
| - |
|
| 1,454 |
|
General and administrative |
|
| 50,817 |
|
| 10,606 |
|
| 84,336 |
|
| 17,593 |
|
| 107,500 |
|
Total Operating Expenses |
|
| 738,499 |
|
| 53,826 |
|
| 1,064,139 |
|
| 133,798 |
|
| 1,347,448 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS FROM OPERATIONS |
|
| (731,214 | ) |
| (40,650 | ) |
| (1,038,211 | ) |
| (116,067 | ) |
| (1,292,547 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidated damages |
|
| - |
|
| - |
|
| 16,575 |
|
| - |
|
| 16,575 |
|
Interest expense |
|
| - |
|
| - |
|
| 34,726 |
|
| - |
|
| 34,726 |
|
Total other expenses |
|
| - |
|
| - |
|
| 51,301 |
|
| - |
|
| 51,301 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss before provision for income taxes |
|
| (731,214 | ) |
| (40,650 | ) |
| (1,089,512 | ) |
| (116,067 | ) |
| (1,343,848 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for Income Taxes |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS |
| $ | (731,214 | ) | $ | (40,650 | ) | $ | (1,089,512 | ) | $ | (116,067 | ) | $ | (1,343,848 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share - basic and diluted |
| $ | (0.02 | ) | $ | (0.00 | ) | $ | (0.03 | ) | $ | (0.01 | ) | $ | (0.05) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding during the period - basic and diluted |
|
| 43,245,232 |
|
| 19,436,879 |
|
| 34,487,551 |
|
| 18,071,203 |
|
| 26,104,137 |
|
See accompanying notes to condensed consolidated unaudited financial statements
MMAX MEDIA, INC AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE PERIOD FROM JANUARY 22, 2010 (INCEPTION) TO SEPTEMBER 30, 2011
(UNAUDITED)
|
| Preferred Stock |
| Common Stock |
| Additional Capital |
| Accumulated Development Stage |
| Total Equity |
| ||||||||||
|
| Shares |
| Par Value |
| Shares |
| Par Value |
|
|
|
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance January 22, 2010 (Inception) |
| - |
| $ | - |
|
| - |
| $ | - |
| $ | - |
| $ | - |
| $ | - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of stock for cash (founders) |
| - |
|
| - |
|
| 14,370,816 |
|
| 14,370 |
|
| (14,332 | ) |
| - |
|
| 38 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of stock for cash |
| - |
|
| - |
|
| 5,420,333 |
|
| 5,420 |
|
| 147,580 |
|
| - |
|
| 153,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of stock for services |
| - |
|
| - |
|
| 790,927 |
|
| 790 |
|
| 109,845 |
|
| - |
|
| 110,635 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In contribution of services |
| - |
|
| - |
|
| - |
|
| - |
|
| 9,057 |
|
| - |
|
| 9,057 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| (254,336 | ) |
| (254,336 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2010 |
| - |
|
| - |
|
| 20,582,076 |
|
| 20,580 |
|
| 252,150 |
|
| (254,336 | ) |
| 18,394 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock issued for services |
| - |
|
| - |
|
| 427,319 |
|
| 427 |
|
| 86,573 |
|
| - |
|
| 87,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of stock for Purchase of MMAX Media, Inc. |
| 638,602 |
|
| 638 |
|
| 12,403,374 |
|
| 12,403 |
|
| (22,073 | ) |
| - |
|
| (9,032 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of stock for cash, net of expenses $8,788 |
| - |
|
| - |
|
| 4,290,000 |
|
| 4,290 |
|
| 523,172 |
|
| - |
|
| 527,462 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance for loan conversion |
| - |
|
| - |
|
| 394,000 |
|
| 394 |
|
| 48,856 |
|
| - |
|
| 49,250 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of stock for legal services |
| - |
|
| - |
|
| 100,000 |
|
| 100 |
|
| 12,400 |
|
| - |
|
| 12,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of stock for liquidated damages |
|
|
|
|
|
|
| 63,750 |
|
| 64 |
|
| 16,511 |
|
| - |
|
| 16,575 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrants |
| - |
|
| - |
|
| - |
|
| - |
|
| 511,913 |
|
| - |
|
| 511,913 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conversion of preferred stock to common stock |
| (638,602) |
|
| (638) |
|
| 6,386,020 |
|
| 6,387 |
|
| (5,749 | ) |
| - |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss for the nine months ended September 30, 2011 |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| (1,089,512 | ) |
| (1,089,512 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, September 30, 2011 (Restated) |
| - |
| $ | - |
|
| 44,646,539 |
| $ | 44,645 |
| $ | 1,423,753 |
| $ | (1,343,848 | ) | $ | 124,550 |
|
See accompanying notes to condensed consolidated unaudited financial statements
MMAX MEDIA, INC AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
| For the |
| For the |
| For the |
| |||
|
| (As Restated Note 5) |
|
|
|
| (As Restated Note 5) |
| ||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
Net loss |
| $ | (1,089,512 | ) | $ | (116,067 | ) | $ | (1,343,848 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
|
|
In-kind contribution |
|
| - |
|
| 8,244 |
|
| 119,730 |
|
Depreciation |
|
| 6,786 |
|
| 329 |
|
| 8,947 |
|
Impairment of license |
|
| 1,454 |
|
| - |
|
| 1,454 |
|
Warrants issued for services |
|
| 511,913 |
|
| - |
|
| 511,913 |
|
Common stock issued for services |
|
| 95,000 |
|
| - |
|
| 95,000 |
|
Stock based compensation to note holders for interest |
|
| 34,250 |
|
| - |
|
| 34,250 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
Decrease / (increase) in prepaid expenses |
|
| (18 | ) |
| - |
|
| (2,100 | ) |
Increase in accounts payable |
|
| 22,848 |
|
| - |
|
| 25,848 |
|
Increase in liquidated damages |
|
| 16,575 |
|
| - |
|
| 16,575 |
|
(Decrease) / increase in deferred revenue |
|
| (4,836 | ) |
| - |
|
| 124 |
|
Net Cash Used In Operating Activities |
|
| (405,540 | ) |
| (107,494 | ) |
| (532,107 | ) |
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS USED IN INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
Deposits |
|
| (4,290 | ) |
| - |
|
| (4,290 | ) |
Purchase of computer equipment and website |
|
| (5,155 | ) |
| (4,958 | ) |
| (32,599 | ) |
Cash acquired in acquisition |
|
| 4,088 |
|
| - |
|
| 4,088 |
|
Net Cash Used In Investing Activities |
|
| (5,357 | ) |
| (4,958 | ) |
| (32,801 | ) |
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
Notes payable |
|
| 30,000 |
|
| - |
|
| 45,000 |
|
Repayment of notes payable |
|
| (30,000 | ) |
| - |
|
| (30,000 | ) |
Sale of common stock |
|
| 527,462 |
|
| 142,962 |
|
| 680,462 |
|
Net Cash Provided By Financing Activities |
|
| 527,462 |
|
| 142,962 |
|
| 695,462 |
|
|
|
|
|
|
|
|
|
|
|
|
NET INCREASE IN CASH |
|
| 116,565 |
|
| 30,510 |
|
| 130,554 |
|
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD |
|
| 13,989 |
|
| - |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
| $ | 130,554 |
| $ | 30,510 |
| $ | 130,554 |
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of non cash investing & financing activities |
|
|
|
|
|
|
|
|
|
|
Cash paid for income taxes |
| $ | - |
| $ | - |
| $ | - |
|
Cash paid for interest expense |
| $ | - |
| $ | - |
| $ | - |
|
License |
| $ | 1,454 |
| $ | - |
| $ | 1,454 |
|
Accounts payable and accrued liabilities |
| $ | 14,573 |
| $ | - |
| $ | 14,573 |
|
On March 16, 2011, the Company issued 144,000 shares of common stock in exchange for a note payable of $15,000 with a beneficial conversion feature valued at $3,000.
On March 16, 2011, the Company issued 12,403,374 common shares and 638,602 preferred shares for the acquisition of MMAX Media, Inc.
See accompanying notes to condensed consolidated unaudited financial statements
F-5
MMAX MEDIA, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
Nevada Processing Solutions,
AS OF SEPTEMBER 30, 2011 (UNAUDITED)
NOTE 1 – ORGANIZATION, NATURE OF BUSINESS AND GOING CONCERN
(A)
Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the Securities and Exchange Commission for interim financial information. Accordingly, they do not include all the information necessary for a comprehensive presentation of financial position and results of operations.
It is management’s opinion however, that all material adjustments (consisting of normal recurring adjustments) have been made, which are necessary for a fair consolidated financial statements presentation. The results for the interim period are not necessarily indicative of the results to be expected for the year.
(B)
Organization
On March 16, 2011 (the “Closing Date”) MMAX Media, Inc. (“MMAX”) completed its agreement and plan of merger (the “Merger Agreement”) to acquire Hyperlocal Marketing, LLC, a Florida limited liability company (“Hyperlocal”), pursuant to which Hyperlocal merged with and into HLM Paymeon, Inc., a Florida corporation and wholly owned subsidiary of MMAX. Under the terms of the Merger Agreement, the Hyperlocal members received 20,789,395 shares of MMAX common stock, which equal approximately 50.1% of the total shares of MMAX issued and outstanding following the merger on a fully diluted basis. In accordance with ASC Topic 360-10-45-15, the transaction is accounted for as a reverse acquisition and Hyperlocal is considered the accounting acquirer and the acquiree is MMAX since the members of Hyperlocal obtained voting and management control of MMAX and the transaction has been accounted as a reverse merger.
Hyperlocal Marketing, LLC was originally organized in the State of Florida on January 22, 2010. The Company has focused its efforts on organizational activities, raising capital, software development and evaluating operational opportunities.
Hyperlocal is a development stage company that owns and operates products aimed at the location-based marketing industry. Hyperlocal develops and markets products that provide merchants and consumers with mobile marketing services and offers, including but not limited to, mobile coupons, mobile business cards, mobile websites, use of SMS short codes and contest management. Hyperlocal has nominal revenues since its inception. Hyperlocal has also developed “PayMeOn”, a product designed to offer its customers income potential through the purchase and referral of “coupon-style” deals through its mobile and web interfaces
MMAX Media, Inc. and its wholly owned subsidiaries are herein referred to as the “Company”.
(C)
Principles of Consolidation
The accompanying unaudited condensed consolidated financial statements include the accounts of MMAX Media, Inc. from the acquisition date of March 16, 2011 to June 30, 20082011 and its wholly owned subsidiaries, Hyperlocal Marketing, LLC. and HLM Paymeon, Inc. from January 22, 2010 (inception) through September 30, 2008
(D)
Going Concern
Since inception, the Company has incurred net operating losses and used cash in operations. As of September 30, 2011, the Company had an accumulated deficit of $1,343,848 and used cash in operations of $532,107 from inception. Losses have principally occurred as a result of the substantial resources required for research and development and marketing of the Company’s products which included the general and administrative expenses associated with its organization and product development and the impairment of licenses in the amount $1,454.
These conditions raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of these uncertainties. Management believes that the actions presently being taken to obtain additional funding and implement its strategic plan provides the opportunity for the Company to continue as a going concern.
F-6
MMAX MEDIA, INC. AND ADVISORS
------------------------
PCAOB REGISTERED
REPORTSUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF INDEPENDENT REGISTERED PUBLICSEPTEMBER 30, 2011 (UNAUDITED)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING FIRM
-------------------------------------------------------
POLICIES
(A)
Cash and Cash Equivalents
The Company considers investments that have original maturities of three months or less when purchased to be cash equivalents.
(B)
Use of Estimates in Financial Statements
The presentation 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. Significant estimates during the period covered by these financial statements include the valuation of website costs, stock based compensation and any beneficial conversion features on convertible debt.
(C)
Fair value measurements and Fair value of Financial Instruments
The Company adopted ASC Topic 820, Fair Value Measurements. ASC Topic 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:
Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.
Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.
Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.
The Company did not identify any assets or liabilities that are required to be presented on the balance sheets at fair value in accordance with ASC Topic 820.
Due to the short-term nature of all financial assets and liabilities, their carrying value approximates their fair value as of the balance sheet date.
(D)
Computer Equipment and Website Costs
Computer Equipment and Website Costs are capitalized at cost, net of accumulated depreciation. Depreciation is calculated by using the straight-line method over the estimated useful lives of the assets, which is three years for all categories. Repairs and maintenance are charged to expense as incurred. Expenditures for betterments and renewals are capitalized. The cost of computer equipment and the related accumulated depreciation are removed from the accounts upon retirement or disposal with any resulting gain or loss being recorded in operations.
Software maintenance costs are charged to expense as incurred. Expenditures for enhanced functionality are capitalized.
F-7
MMAX MEDIA, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2011 (UNAUDITED)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The Company has adopted the provisions of ASC 350-50-15, “Accounting for Web Site Development Costs.” Costs incurred in the planning stage of a website are expensed as research and development while costs incurred in the development stage are capitalized and amortized over the life of the asset, estimated to be three years.
(E)
Impairment of Long-Lived Assets
The Company evaluates its long-lived assets for impairment whenever events or a change in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the asset to the future net undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is the excess of the carrying amount over the fair value of the asset.
(F)
Income Taxes
The Company accounts for income taxes under FASB Codification Topic 740-10-25 (“ASC 740-10-25”). Under ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
(G)
Revenue Recognition
The Company recognizes revenue on arrangements in accordance with FASB ASC No. 605, “Revenue Recognition”. In all cases, revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured.
The Company recognizes revenue from the sale of keywords over the period the keywords are purchased for exclusive use, usually one year.
The Company recognizes revenue from setup fees in accordance with Topic 13, which requires the fees to be deferred and amortized over the term of the agreements. Revenue from the sale of bulk text messages sales are recognized at the time messages are delivered. Revenue from monthly membership fees are recorded during the month the membership is earned.
(H)
Segments
The Company operates in one segment and therefore segment information is not presented.
(I)
Loss Per Share
The basic loss per share is calculated by dividing the Company's net loss available to common shareholders by the weighted average number of common shares during the year. The diluted loss per share is calculated by dividing the Company's net loss available to common shareholders by the diluted weighted average number of shares outstanding during the period. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. As of September 30, 2011 there are no preferred shares outstanding. The Company has 11,200,000 shares issuable upon the exercise of warrants that were not included in the computation of dilutive loss per share because their inclusion is anti-dilutive. There are no dilutive securities outstanding as of September 30, 2011.
F-8
MMAX MEDIA, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2011 (UNAUDITED)
NOTE 3 – RECENT ACCOUNTING PRONOUNCEMENTS
ASU No. 2011-03; Reconsideration of Effective Control for Repurchase Agreements. In April 2011, the FASB issued ASU No. 2011-03. The amendments in this ASU remove from the assessment of effective control the criterion relating to the transferor’s ability to repurchase or redeem financial assets on substantially the agreed terms, even in the event of default by the transferee. The amendments in this ASU also eliminate the requirement to demonstrate that the transferor possesses adequate collateral to fund substantially all the cost of purchasing replacement financial assets.
The guidance in this ASU is effective for the first interim or annual period beginning on or after December 15, 2011. The guidance should be applied prospectively to transactions or modifications of existing transactions that occur on or after the effective date. Early adoption is not permitted. The Company will adopt the methodologies prescribed by this ASU by the date required, and does not anticipate that the ASU will have a material effect on its financial position or results of operations.
ASU No. 2011-04; Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. In May 2011, the FASB issued ASU No. 2011-04. The amendments in this ASU generally represent clarifications of Topic 820, but also include some instances where a particular principle or requirement for measuring fair value or disclosing information about fair value measurements has changed. This ASU results in common principles and requirements for measuring fair value and for disclosing information about fair value measurements in accordance with U.S. GAAP and IFRSs. The amendments in this ASU are to be applied prospectively. For public entities, the amendments are effective during interim and annual periods beginning after December 15, 2011. Early application by public entities is not permitted.
The Company will adopt the methodologies prescribed by this ASU by the date required, and does not anticipate that the ASU will have a material effect on its financial position or results of operations.
ASU No. 2011-05; Amendments to Topic 220, Comprehensive Income. In June 2011, the FASB issued ASU No. 2011-05. Under the amendments in this ASU, an entity has the option to present the total 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. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. This ASU eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders' equity. The amendments in this ASU do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income.
The amendments in this ASU should be applied retrospectively. For public entities, the amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. Early adoption is permitted, because compliance with the amendments is already permitted. The amendments do not require any transition disclosures. Due to the recent of this pronouncement, the Company is evaluating its timing of adoption of ASU 2011-05, but will adopt the ASU retrospectively by the due date.
NOTE 4 – LICENSES
On February 1, 2010, the Company entered into a distribution license agreement valued at $4,363. Accumulated amortization for the distribution license was $2,909 as of June 30, 2011. The unamortized amount of $1,454 was impaired and expensed during the quarter ended June 30, 2011.
F-9
MMAX MEDIA, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2011 (UNAUDITED)
NOTE 5 – RESTATEMENT
On January 6, 2012, as a result of comments received by the Securities and Exchange Commission, the Company determined that the merger with Hyperlocal Marketing, LLC should be treated as a reverse merger and not as an acquisition. The Company has restated its financial statements to reflect this basis of accounting.
| September 30, 2011 | |||||||||||||
Changes to Condensed Consolidated Balance Sheet | As Previously Reported |
| Adjustment | As Restated | ||||||||||
|
|
|
|
| ||||||||||
Additional Paid In Capital | $ | 6,128,857 | $ | (4,705,104) | $ | 1,423,753 | ||||||||
|
|
|
|
|
|
| ||||||||
Deficit Accumulated during the development stage | $ | (6,048,952) | $ | 4,705,104 | $ | (1,343,848) | ||||||||
| Nine Months Ended September 30, 2011 | |||||||||||||
Changes to Condensed Consolidated Statement of Operations | As Previously Reported |
| Adjustment | As Restated | ||||||||||
|
|
|
|
| ||||||||||
Impairment of Intangible Assets | $ | 4,706,558 | $ | (4,705,104) | $ | 1,454 | ||||||||
|
|
|
|
|
|
| ||||||||
Net Loss | $ | (5,794,616) | $ | 4,705,104 | $ | (1,089,512) | ||||||||
|
|
|
|
|
|
| ||||||||
Net loss per share – basic and diluted | $ | (0.17) | $ | 0.14 | $ | (0.03) | ||||||||
| For the Period From January 22, 2010 (Inception) to September 30, 2011 | |||||||||||||
Changes to Condensed Consolidated Statement of Operations | As Previously Reported |
| Adjustment | As Restated | ||||||||||
|
|
|
|
| ||||||||||
Impairment of Intangible Assets | $ | 4,706,558 | $ | 4,705,104 | $ | $1,454 | ||||||||
|
|
|
|
|
|
| ||||||||
Net Loss | $ | (6,048,952) | $ | 4,705,104 | $ | (1,343,848) | ||||||||
|
|
|
|
|
|
| ||||||||
Net Loss per Share – basic and diluted | $ | (.023) | $ | 0.18 | $ | (0.05) | ||||||||
| Nine Months Ended September 30, 2011 | |||||||||||||
Changes to Condensed Consolidated Statement of Cash Flows | As Previously Reported |
| Adjustment | As Restated | ||||||||||
|
|
|
|
| ||||||||||
Net Loss | $ | (5,794,616) | $ | 4,705,104 | $ | (1,089,512) | ||||||||
|
|
|
|
|
|
| ||||||||
Impairment of Goodwill | $ | 4,705,104 | $ | (4,705,104) | $ | - | ||||||||
| For the Period From January 22, 2010 (Inception) to September 30, 2011 | |||||||||||||
Changes to Condensed Consolidated Statement of Cash Flows | As Previously Reported |
| Adjustment | As Restated | ||||||||||
|
|
|
|
| ||||||||||
Net Loss | $ | (6,048,952) | $ | 4,705,104 | $ | (1,343,848) | ||||||||
|
|
|
|
|
|
| ||||||||
Impairment of Goodwill | $ | 4,705,104 | $ | (4,705,104) | $ | - | ||||||||
F-10
MMAX MEDIA, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2011 (UNAUDITED)
NOTE 6 – LIQUIDATED DAMAGES
Pursuant to the Company’s private placement completed during the six months ended June 30, 2011 in the gross amount of $276,250, as of June 30, 2011 purchasers under the private placement (the “Holders”) are entitled to liquidated damages if a registration statement covering the resale of the 2,210,000 shares of common stock sold under the private placement (the “Registrable Securities”) is not filed within 60 days of the termination date of the private placement and declared effective within 180 days of the termination date. The Company shall make pro rata payments to each Holder, in an amount equal to 1.0% of the aggregate amount invested by such Holder (based upon the number of Registrable Securities then owned by such Holder) for each 30-day period or pro rata for any portion thereof following the date by which such Registration Statement should have been filed or effective (the “Blackout Period”). Such payments shall constitute the Holder’s exclusive monetary remedy for such events, but shall not affect the right of the Holder to seek injunctive relief. The amounts payable as liquidated damages shall be paid monthly within ten (10) business days of the last day of each month following the commencement of the Blackout Period until the termination of the Blackout Period. Such payments shall be made to each holder at the sole option of the Company in either cash or shares of Common Stock. Furthermore, the damages payable to each holder shall not exceed 6% of the aggregate amount invested by such Holder. At September 30, 2011, the Company has not filed the required registration statement and issued a total of 63,750 shares of common stock value at $16,575 ($.26 per share) as payment for liquidated damages.
NOTE 7 – NOTES PAYABLE
In December and September 2010, the Company issued unsecured, non-interest bearing, due on demand notes for $8,000 and $16,000, respectively. During the quarter ended December 31, 2010 the Company repaid $22,000. As of September 30, 2011, the outstanding principal balance of the notes was $2,000.
On December 5, 2010, the Company borrowed $15,000 pursuant to a note payable. The note bears interest at a rate of 10% per annum and is payable upon demand by the holder after March 10, 2011. As additional consideration the holder is entitled to receive 100,000 shares of common stock in a newly formed entity if the Company completed the merger by March 10, 2011. If the Company completed the merger after March 10, 2011 the holder is entitled to 150,000 shares of common stock in the newly formed entity. If the Company did not complete the merger, the holder is not entitled to any shares of common stock. The Company completed the Merger on March 16, 2011 and issued 150,000 shares of common stock valued at a recent cash offering price of $18,750 ($.125 per share) as additional consideration. The Company repaid the note on March 23, 2011. On January 21, 2011, the Company borrowed $15,000 pursuant to a convertible note payable. The note bears interest at a rate of 10% per annum and is payable July 20, 2011. If the Company completes the merger prior to July 20, 2011 the note and accrued interest automatically converts into 144,000 shares of common stock in the newly formed entity. If the Company has not completed the merger by July 20, 2011, the note and accrued interest is due the holder. On March 16, 2011, the Company completed the merger and issued 144,000 shares of common stock value at a recent cash offering price of $18,000 ($.125 per share) for principal of $15,000. On March 16, 2011, when the loan became convertible and was repaid, the Company recorded a beneficial conversion expense of $3,000 in interest expense and paid accrued interest of $99.
On February 3, 2011, the Company borrowed $15,000 pursuant to a note payable. The note bears interest at a rate of 10% per annum and is payable upon demand by the holder after March 10, 2011. As additional consideration the holder is entitled to receive 100,000 shares of common stock in the newly formed entity if the Company completed the merger by March 10, 2011. If the Company completed the merger after March 10, 2011, the holder is entitled to 150,000 shares of common stock in the newly formed entity.
The Company completed the Merger on March 16, 2011, and issued 100,000 shares of common stock valued at a recent cash offering price of $12,500 ($.125 per share) as additional consideration. The Company repaid the note on March 23, 2011.
F-11
MMAX MEDIA, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2011 (UNAUDITED)
NOTE 8 – COMMITMENTS AND CONTINGENCIES
During January 2011, the Company entered into a two year software development and marketing agreement with a software developer. The agreement requires the developer to develop an application to use the Company’s product in an iPhone application. The agreement requires the application to reach one of the following milestones; 200,000 downloads or 10,000 gift certificate purchases within 60 days of the application becoming available. The developer is entitled to 3% of the gross sales of the gift certificates and the issuance of 207,319 shares of common stock of the Company upon meeting the milestone. In January 2011, the Company amended the agreement to remove the milestones and issued the developer 207,319 shares of common stock valued at a recent cash offering cost of $29,000 ($0.14 per share). As of September 30, 2011, there were no amounts owed.
On August 15, 2011, the Company entered into an employment agreement with its Chief Executive Officer. The agreement is for a period of one year and automatically extends for one day each day until either party notifies the other not to further extend the employment period, provides for an annual base salary totaling $250,000 and annual bonuses based on pre-tax operating income, as defined, for an annual minimum of $50,000 in total. During the three months ended September 30, 2011, the Company recorded a salary expense of $ 33,963 including the prorated portions of the minimum annual bonus of $2,524. Accrued compensation at September 30, 2011, was $6,868.
NOTE 9 – STOCKHOLDERS EQUITY
The Company is authorized to issue up to 195,000,000 shares of common stock, par value $0.001, and up to 5,000,000 shares of convertible preferred stock, par value $0.001.
Each share of the convertible preferred stock can be exchanged for ten (10) shares of common stock of the Company.
During January 2010, the Company issued 14,370,816 shares to founders for services. The shares were valued at the fair value on the date of grant of $38 ($.000003 per share).
During March 2010, the Company issued 5,134,375 shares for cash of $133,000 ($.026 per share).
During June 2010, the Company issued 285,958 shares for cash of $20,000 ($.07 per share).
During 2010, the Company issued 790,927 shares for services with a fair value on the date of grant of $110,635 ($.14 per share).
During 2010, a related party shareholder contributed $9,057 of salary back to the Company. The amount was recorded as an in-kind contribution by the shareholder.
During January 2011, the Company issued 207,319 shares of common stock for software development with a fair value of $29,000, based on a recent cash offering price ($.139 per share).
On March 16, 2011 (the “Closing Date”) the Company was deemed to have issued 638,602 convertible preferred shares and 12,403,374 common shares for the acquisition of 100% of MMAX Media, Inc. (“MMAX”) pursuant to a reverse acquisition and recapitalization.
On the Closing Date March 16, 2011, the Company completed a private placement (the “Private Placement”) and sold an aggregate of 2,000,000 shares of restricted shares of Common Stock to 10 accredited investors for gross proceeds of $26,250 ($.125 per share) and paid direct offering costs of $8,788.
From the period March 17, 2011 to June 30, 2011 the Company sold an additional 210,000 shares of common stock for gross proceeds of $286,250 ($.125 per share).
During the six months ended June 30, 2011, the Company issued 100,000 shares of common stock for legal services with a fair value of $12,500 based on a recent cash offering price ($.125 per share).
F-12
MMAX MEDIA, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2011 (UNAUDITED)
NOTE 9 – STOCKHOLDERS EQUITY (CONTINUED)
During the six months ended June 30, 2011, the Company issued 144,000 shares of common stock for the conversion of a note payable of $15,000. In addition the Company recorded a beneficial conversion expense of $3,000 based on a recent cash offering price ($.125 per share).
During the six months ended June 30, 2011, the Company issued 250,000 shares of common stock for financing costs on notes payable of $31,250 based on a recent cash offering price ($.125 per share) (see note 7).
On May 11, 2011, 176,335 shares of convertible preferred stock were converted into 1,763,350 shares of common stock.
On June 30, 2011, 184,534 shares of convertible preferred stock were converted into 1,845,340 shares of common stock.
On July 1, 2011, the Company issued 20,000 shares of common stock for services with a fair value of $6,000 ($.30 per share).
On July 12, 2011, 193,576 shares of convertible preferred stock were converted into 1,935,760 shares of common stock.
On August 11, 2011, 84,157 shares of convertible preferred stock were converted into 841,570 shares of common stock.
On July 7, 2011, the Company granted options to purchase 200,000 shares of its common stock having an exercise price of $0.26 per share to a consultant. Options to purchase 100,000 shares are exercisable upon the date of grant and the remaining options to purchase 100,000 shares are exercisable six months from the date of grant. The options expire on July 7, 2012. The Options were valued using the Black-Scholes Option Pricing Model with the following assumptions: dividend yield of 0%, annual volatility of 173%, risk free interest rate of .0%, and expected life of 1 year. For the three and nine months ended September 30, 2011 the Company expensed $23,895.
On September July 7, 2011, the Company issued options to purchase 100,000 shares of its common stock to a consultant at an exercise price of $0.26 per share. The options vest immediately. The options expire on July 7, 2013. The Options were valued using the Black-Scholes Option Pricing Model with the following assumptions: dividend yield of 0%, annual volatility of 173%, risk free interest rate of .0%, and expected life of 1 year. For the three and nine months ended September 30, 2011, the Company expensed $15,930.
During July and August the Company received subscriptions for the purchase of an aggregate of 2,080,000 shares of its common stock from 11 subscribers at a purchase price of $0.125 per share for gross proceeds of $260,000. No fees or commissions were paid in connection with the subscriptions.
On September 30, 2011, the Company has issued a total of 63,750 shares of common stock value at $16,575 ($.26 per share) as payment for liquidated damages.
F-13
MMAX MEDIA, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2011 (UNAUDITED)
NOTE 9 – STOCKHOLDERS EQUITY (CONTINUED)
Warrants
The following tables summarize all warrant grants to consultants for the six months ended June 30, 2011, and the related changes during these periods are presented below. No stock options were granted during the six months ended June 30, 2011.
|
| Number of |
| Weighted Average Exercise Price |
| ||
Stock |
|
|
|
|
|
|
|
Balance at December 31, 2010 |
|
| — |
|
| — |
|
Granted |
|
| 11,200,000 |
|
| $0.22 |
|
Exercised |
|
| — |
|
|
|
|
Expired |
|
| — |
|
|
|
|
Balance at September 30, 2011 |
|
| 11,200,000 |
|
| $0.22 |
|
Warrants Exercisable at September 30, 2011 |
|
| 11,200,000 |
|
| $0.22 |
|
Weighted Average Fair Value of Warrants Granted During 2011 |
|
|
|
|
| $0.22 |
|
The following table summarizes information about options and warrants for the Company as of September 30, 2011:
|
| 2011 |
|
| ||||||
Range of Exercise Price |
| Number Outstanding at September 30, 2011 |
| Weighted Average Remaining Contractual |
| Weighted Average Exercise Price |
| Number Exercisable at September 30 2011 |
| Weighted Average Exercise Price |
$.16 to $.26 |
| 11,200,000 |
|
|
| $0.22 |
|
|
|
|
On March 24, 2011, the Company granted 500,000 three year warrants having an exercise price of $0.25 per share to a consultant for services. The warrants vest immediately. The Options were valued using the Black-Scholes Option Pricing Model with the following assumptions: dividend yield of 0%, annual volatility of 72%, risk free interest rate of .72%, and expected life of 2 years. For the three and nine months ended September 30, 2011 the Company expensed $0 and $15,930, respectively their fair value.
On July 7, 2011, the Company granted options to purchase 200,000 shares of its common stock having an exercise price of $0.26 per share to a consultant. Options to purchase 100,000 shares are exercisable upon the date of grant and the remaining options to purchase 100,000 shares are exercisable six months from the date of grant. The options expire on July 7, 2012. The Options were valued using the Black-Scholes Option Pricing Model with the following assumptions: dividend yield of 0%, annual volatility of 173%, risk free interest rate of ..0% and expected life of 1 year. For the three and nine months ended September 30, 2011 the Company expensed $23,895, respectively their fair value.
On July 7, 2011, the Company issued options to purchase 100,000 shares of its common stock to a consultant at an exercise price of $0.26 per share. The options vest immediately. The options expire on July 7, 2013. The Options were valued using the Black-Scholes Option Pricing Model with the following assumptions: dividend yield of 0%, annual volatility of 173%, risk free interest rate of ..0% and expected life of 1 year. For the three and nine months ended September 30, 2011 the Company expensed $15,930, respectively their fair value.
On July 7, 2011, the Company issued options to purchase 100,000 shares of its common stock to an employee at an exercise price of $0.26 per share. The options vest immediately. The options expire on July 7, 2013. The Options were valued using the Black-Scholes Option Pricing Model with the following assumptions: dividend yield of 0%, annual volatility of 173%, risk free interest rate of ..0%, and expected life of 1 year. For the three and nine months ended September 30, 2011 the Company expensed $15,930, respectively their fair value.
F-14
MMAX MEDIA, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2011 (UNAUDITED)
NOTE 9 – STOCKHOLDERS EQUITY (CONTINUED)
On September 9, 2011, the Company issued options to purchase 300,000 shares of its common stock to a consultant at an exercise price of $0.18 per share. The options vest immediately. The options expire on September 9, 2012. The Options were valued using the Black-Scholes Option Pricing Model with the following assumptions: dividend yield of 0%, annual volatility of 182%, risk free interest rate of .12%, and expected life of 1 year. For the three and nine months ended September 30, 2011 the Company expensed $54,653 and $54,653, respectively their fair value.
NOTE 10 – RELATED PARTIES
During 2010, a related party shareholder and officer contributed $9,057 of salary to the Company. The amount was recorded as an in-kind contribution.
During the nine months ended September 30, 2011, the Company borrowed $1,389 from a related party shareholder and officer to pay operating expenses. The loan bears no interest and is due on demand.
On August 15, 2011, the Company entered into an employment agreement with its Chief Executive Officer. The agreement is for a period of one year and automatically extends for one day each day until either party notifies the other not to further extend the employment period, provides for an annual base salary totaling $250,000 and annual bonuses based on pre-tax operating income, as defined, for an annual minimum of $50,000 in total. During the three months ended September 30, 2011 the Company recorded a salary expense of $33,963 including the prorate portions of the minimum annual bonus of $2,524. Accrued compensation at September 30, 2011 was $6,868.
NOTE 11 – CONCENTRATIONS
For the nine months ended September 30, 2011 and the period from January 22, 2010 inception to September 30, 2011, one customer accounted for 42% and 20% of total sales, respectively.
Report of Independent Registered Public Accounting Firm
To the Board of Directors
Nevada Processing Solutions, Inc.
(A Development Stage Company)
Members of:
Hyperlocal Marketing, LLC
We have audited the accompanying balance sheetssheet of Nevada Processing
Solutions, Inc. (A Development Stage Company) as of June 30, 2008 and
June 30, 2007,Hyperlocal Marketing, LLC at December 31, 2010, and the related statements of operations stockholders'and members' equity, and cash flows for the years ended June 30, 2008 and June 30, 2007 and since
inception on May 30, 2006 through June 30, 2008.period January 22, 2010 (Inception) to December 31, 2010. These financial statements are the responsibility of the Company'sCompany’s management. Our responsibilityresponsibility is to express an opinion on these financial statements based on our audits.
audit.
We conductconducted our auditsaudit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the auditsaudit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provideaudit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Nevada Processing Solutions,
Inc. (A Development Stage Company) as of June 30, 2008 and June 30, 2007,Hyperlocal Marketing, LLC at December 31, 2010 and the related statementsresults of its operations stockholders' equity and its cash flows for the years ended June 30, 2008 and June 30, 2007 and since inception on
May 30, 2006 through June 30, 2008,period from January 22, 2010 (Inception) to December 31, 2010 in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 31 to the financial statements, the Company has an accumulated deficitreported a net loss of $(9,763)
since inception, which raises$254,336 and cash used in operations in 2010 of $128,303 and a working capital deficiency of $6,889. These matters raise substantial doubt about itsthe Company’s ability to continue as a going concern. Management'sManagement’s plans concerningas to these matters are also described in Note 3.1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Moore
WEBB & Associates, Chartered
- ---------------------------------
Moore & Associates Chartered
Las Vegas, Nevada
July 28, 2008
2675 S. Jones Blvd. Suite 109, Las Vegas, NV 89146
(702) 253-7499 Fax (702) 253-7501
F-1a
NEVADA PROCESSING SOLUTIONS, INC.
(a development stage company)
Balance Sheets
ASSETS
Balance Sheets
June 30, June 30,
2008 2007
------------ ------------
ASSETS
Current Assets:
Cash $ - $ -
Funds in escrow 2,750 -
------------ ------------
Total current assets 2,750 -
------------ ------------
TOTAL ASSETS $ 2,750 $ -
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 1,000 $ -
------------ ------------
Total current liabilities 1,000 -
------------ ------------
Stockholders' equity:
Preferred stock, $0.001 par value, 5,000,000
shares authorized, 872,690 shares issued and
outstanding as of 6/30/08 and 6/30/07,
respectively 873 873
Common stock, $0.001 par value, 195,000,000
shares authorized, 3,375,000, 3,100,000
issued and outstanding as of
6/30/08 and 6/30/07, respectively 3,375 3,100
Additional paid-in capital 714,143 711,668
(Deficit) accumulated during development stage (716,641) (698,115)
------------ ------------
Total stockholders' equity 1,750 -
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,750 $ -
============ ============
TheCOMPANY, P.A.
Certified Public Accountants
Boynton Beach, FL
February 4, 2011
HYPERLOCAL MARKETING, LLC
BALANCE SHEET
DECEMBER 31, 2010
ASSETS |
| |||
|
|
|
| |
CURRENT ASSETS |
|
|
| |
|
|
|
| |
Cash |
| $ | 13,989 |
|
Prepaid expenses |
|
| 2,082 |
|
|
|
|
|
|
TOTAL CURRENT ASSETS |
|
| 16,071 |
|
|
|
|
|
|
Computer Equipment, Net |
|
| 762 |
|
Website Costs, Net |
|
| 24,521 |
|
|
|
|
|
|
TOTAL ASSETS |
| $ | 41,354 |
|
|
|
|
|
|
LIABILITIES AND MEMBERS' EQUITY |
| |||
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
Accounts Payable |
| $ | 3,000 |
|
Deferred Revenue |
|
| 4,960 |
|
Note Payable |
|
| 15,000 |
|
|
|
|
|
|
TOTAL CURRENT LIABILITIES |
|
| 22,960 |
|
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES |
|
| - |
|
|
|
|
|
|
MEMBERS' EQUITY |
|
| 18,394 |
|
|
|
|
|
|
TOTAL LIABILITIES AND MEMBER'S EQUITY |
| $ | 41,354 |
|
See accompanying notes are an integral part of these statements
F-2a
NEVADA PROCESSING SOLUTIONS, INC.
(a development stage company)
Statements of Operations
Statements of Operations
For the Period
from
For the years ending May 30, 2006
June 30, (Inception) to
-------------------- June 30,
2008 2007 2008
--------- --------- --------------
Revenue $ - $ - $ -
--------- --------- --------------
General and administrative expenses 1,000 8,763 9,763
--------- --------- --------------
Total Expenses 1,000 8,763 9,763
--------- --------- --------------
Net Income (Loss) before
beneficial interest $ (1,000) $ (8,763) $ (9,763)
========= ========= ==============
Beneficial Conversion Feature of
Preferred stock (706,878)
--------- ---------- -------------
Provision for Income Taxes - - -
Net income (loss) $ (1,000) $ (8,763) $ (716,641)
========= ========== =============
Weighted average number of common
shares outstanding -
basic and fully diluted 3,375,000 3,100,000
========= =========
Basic Earnings (Loss) per share $ (0.00) $ (0.23)
========= ==========
Theto financial statements.
F-17
HYPERLOCAL MARKETING, LLC
STATEMENT OF OPERATIONS AND MEMBERS EQUITY
FOR THE PERIOD FROM JANUARY 22, 2010 (Inception ) TO DECEMBER 31, 2010
Revenue |
|
|
| |
Service Revenue, net |
| $ | 28,973 |
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
Professional fees |
|
| 1,780 |
|
Web development and hosting |
|
| 20,622 |
|
Marketing |
|
| 1,010 |
|
Payroll and payroll taxes |
|
| 98,873 |
|
Consulting |
|
| 111,673 |
|
Travel and entertainment |
|
| 26,187 |
|
General and administrative |
|
| 23,164 |
|
Total Operating Expenses |
|
| 283,309 |
|
|
|
|
|
|
NET LOSS |
|
| (254,336 | ) |
|
|
|
|
|
MEMBERS EQUITY BEGINNING JANUARY 22, 2010 |
|
| - |
|
CAPITAL CONTRIBUTIONS |
|
| 272,730 |
|
MEMBERS EQUITY DECEMBER 31, 2010 |
| $ | 18,394 |
|
See accompanying notes are an integral part of these statements
F-3a
NEVADA PROCESSING SOLUTIONS, INC.
(a development stage company)
Statement of Stockholders' Equity
For the period from May 30, 2006to financial statements.
F-18
HYPERLOCAL MARKETING, LLC
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM JANUARY 22, 2010 (Inception) to June 30, 2008
Statement of Stockholders' Equity
(Deficit)
Preferred Accumulated
Common Stock Stock Additional During Total
------------------ ----------------- Paid-in Development Stockholders
Shares Amount Shares Amount Capital Stage Equity
---------- ------- --------- ------- --------- ------------ ------------
Founders
initial
investment,
5/30/06
$0.001 per
share 3,100,000 $ 3,100 $ $ $ $ 3,100
June 2006
Preferred
shares
issued
for
cash at
$0.01 per
share plus
embedded
interest of
$706,878 872,690 873 706,878 707,751
Contributed
Capital 4,790 4,790
Net
(loss)
for the
year
ending
6/30/06 (706,878) (706,878)
---------- ------- --------- ------- --------- ------------ ------------
Balance,
12/31/06
3,100,000 $ 3,100 872,690 $ 873 $711,668 $ (706,878) $ 8,763
Net
(loss)
for the
year
ending
6/30/07 (8,763) (8,763)
---------- ------- --------- ------- --------- ------------ ------------
Balance,
6/30/07
3,100,000 $ 3,100 872,690 $ 873 $711,668 $ (715,641) $ -
The accompanying notes are an integral part of these statements
F-4a
NEVADA PROCESSING SOLUTIONS, INC.
(a development stage company)
Statement of Stockholders' Equity
For the period from May 30, 2006 (Inception) to June 30, 2008
(Continued)
(Deficit)
Preferred Accumulated
Common Stock Stock Additional During Total
------------------ ----------------- Paid-in Development Stockholders
Shares Amount Shares Amount Capital Stage Equity
---------- ------- --------- ------- --------- ------------ ------------
Balance,
6/30/07
3,100,000 $ 3,100 872,690 $ 873 $ 4,790 $ (8,763) $ -
June 2008
Common
shares
issued
for
cash at
$0.01 per
share 275,000 275 2,475 2,750
Net
(loss)
for the
year
ending
6/30/08 (1,000) (1,000)
---------- ------- --------- ------- --------- ------------ ------------
Balance,
6/30/08
3,375,000 $ 3,375 872,690 $ 873 $714,143 $ (716,641) $ 1,750
========== ======= ========= ======= ========= ============ ============
TheTO DECEMBER 31, 2010
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
| |
Net loss |
| $ | (254,336 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
In-kind contribution |
|
| 9,057 |
|
Depreciation |
|
| 425 |
|
Units issued for services |
|
| 110,673 |
|
Changes in operating assets and liabilities: |
|
|
|
|
Increase in prepaid expenses |
|
| (2,082 | ) |
Increase in accounts payable |
|
| 3,000 |
|
Increase in deferred revenue |
|
| 4,960 |
|
Net Cash Used In Operating Activities |
|
| (128,303 | ) |
|
|
|
|
|
CASH FLOWS USED IN INVESTING ACTIVITIES: |
|
|
|
|
Purchase of computers |
|
| (933 | ) |
Website costs |
|
| (24,775 | ) |
Net Cash Used In Investing Activities |
|
| (25,708 | ) |
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
Proceeds from note payable |
|
| 15,000 |
|
Proceeds from sale of membership interests |
|
| 153,000 |
|
Net Cash Provided By Financing Activities |
|
| 168,000 |
|
|
|
|
|
|
NET INCREASE IN CASH |
|
| 13,989 |
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD |
|
| - |
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
| $ | 13,989 |
|
|
|
|
|
|
Supplemental disclosure of non cash investing & financing activities: |
|
|
|
|
Cash paid for income taxes |
| $ | - |
|
Cash paid for interest expense |
| $ | - |
|
See accompanying notes are an integral part of these statements
F-5a
NEVADA PROCESSING SOLUTIONS, INC.
(a development stage company)
Statements of Cash Flows
Statements of Cash Flows
For the Period
from
For the years ending May 30, 2006
June 30, (Inception) to
-------------------- June 30,
2008 2007 2008
--------- --------- --------------
Operating Activities:
Net Income (Loss) $ (1,000) $ (8,763) $ (716,641)
--------- --------- --------------
Adjustments to reconcile
net loss to net cash
used by operating activities
Beneficial Interest on
Conversion - - 706,878
Increase in accounts payable 1,000 1,000
--------- --------- --------------
Cash Provided (Used) by Operations - (8,763) (8,763)
Financing Activities:
Sale of Common Stock 2,750 - 5,850
Sale of Preferred Stock - - 873
Contributed Capital - - 4,790
--------- --------- --------------
Cash Provided (Used) by
Financing Activities 2,750 - 11,513
Net Change in Cash 2,750 (8,763) 2,750
Beginning Cash - 8,763 -
--------- --------- --------------
Ending Cash $ 2,750 $ - $ 2,750
========= ========= ==============
The accompanying notes are an integral part of these statements
F-6a
NEVADA PROCESSING SOLUTIONS, INC.
(a development stage company)
to financial statements.
F-19
HYPERLOCAL MARKETING, LLC
NOTES TO FINANCIAL STATEMENTS
June 30, 2008
FOR THE PERIOD FROM JANUARY 22, 2010 (INCEPTION)
TO DECEMBER 31, 2010
NOTE 1. GENERAL
ORGANIZATION, NATURE OF BUSINESS AND BUSINESS
Nevada Processing Solutions, Inc. (theGOING CONCERN
Hyperlocal Marketing, LLC (The Company) was incorporated underoriginally organized in the lawsState of Florida on January 22, 2010.The Company has focused it efforts on organizational activities, raising capital, software development and evaluating operational opportunities.
(B) Nature of Business
The Company intends to be a subscription and advertising based seller and reseller of mobile marketing and group buying software and services to consumers and companies in the automotive, healthcare, financial services, food services, specialty retail and other industries. Hyperlocal Marketing currently markets and sells easy to use mobile marketing services, including mobile coupons, mobile business cards, mobile websites, use of SMS short codes, contest management, and more. The Company also has premium keyword related products and is developing additional location based applications
(C) Going Concern
The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the state of Nevada on May 30, 2006.Company and its ability to meet its ongoing obligations. The Company was organizedhas a net loss of $254,336 and net cash used in operations of $128,303 from the period January 22, 2010 (Inception) to conductDecember 31, 2010, and a working deficiency of $6,889 at December 31, 2010.
These conditions, as well as the conditions noted below, were considered when evaluating the Company’s liquidity and its ability to meet its ongoing obligations. These financial statements do not include any lawful businessadjustments to reflect the possible future effect on the recoverability and plansclassification of assets or the amounts and classifications of liabilities that may result from the outcome of these uncertainties. Management believes that the actions presently being taken to provideobtain additional funding and implement its strategic plan provides the opportunity for the Company to continue as a unique database solution for loan
processors in the mortgage industry.
going concern.
NOTE 2.
SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES
POLICIES
(A) Cash and Cash Equivalents
The Company has assetsconsiders investments that have original maturities of $2,750 and liabilities of $1,000 as of June 30, 2008.
The relevant accounting policies are listed below.
Basis of Accounting
- -------------------
The basis is United States generally accepted accounting principles.
Earnings per Share
- ------------------
The basic earnings (loss) per share is calculated by dividing the Company's
net income (loss) availablethree months or less when purchased to common shareholders by the weighted average
number of common shares during the year. The diluted earnings (loss) per share
is calculated by dividing the Company's net income (loss) available to common
shareholders by the diluted weighted average number of shares outstanding
during the year. The diluted weighted average number of shares outstanding is
the basic weighted number of shares adjusted as of the first of the year for
any potentially dilutive debt or equity.
The Company has not issued any options or warrants or similar securities since
inception.
Dividends
- ---------
The Company has not yet adopted any policy regarding payment of dividends. No
Dividends have been paid during the period shown.
Income Taxes
- ------------
The provision for income taxes is the total of the current taxes payable and
the net of the change in the deferred income taxes. Provision is made for the
deferred income taxes where differences exist between the period in which
transactions affect current taxable income and the period in which they enter
into the determination of net income in the financial statements.
Year end
- --------
The Company's year-end is June 30.
F-7a
NEVADA PROCESSING SOLUTIONS, INC.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
June 30, 2008
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES-CONTINUED
Advertising
- -----------
Advertising is expensed when incurred. There has been no advertising
during the period.be cash equivalents.
(B) Use of Estimates - ----------------
in Financial Statements
The preparationpresentation 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 revenuerevenues and expenses during the reporting period. Actual results could differ from those estimates. NOTE 3. GOING CONCERN
TheseSignificant estimates during the period covered by these financial statements have been preparedinclude the valuation of software for impairment analysis purposes and valuation of any beneficial conversion features on convertible debt.
(C) Fair value measurements and Fair value of Financial Instruments
The Company adopted ASC Topic 820, Fair Value Measurements. ASC Topic 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:
Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.
F-20
HYPERLOCAL MARKETING, LLC
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD FROM JANUARY 22, 2010 (INCEPTION)
TO DECEMBER 31, 2010
NOTE 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.
Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.
The Company did not identify any assets or liabilities that are required to be presented on the balance sheets at fair value in accordance with generally
accepted accounting principles applicableASC Topic 820.
Due to the short-term nature of all financial assets and liabilities, their carrying value approximates their fair value as of the balance sheet date.
Software maintenance costs are charged to expense as incurred. Expenditures for enhanced functionality are capitalized. The cost of the software and the related accumulated amortization are removed from the accounts upon retirement of the software with any resulting loss being recorded in operations.
(D) Computer Equipment, net
Are capitalized at cost, net of accumulated depreciation. Depreciation is calculated by using the straight-line method over the estimated useful lives of the assets, which is three years for all categories. Repairs and maintenance are charged to expense as incurred. Expenditures for betterments and renewals are capitalized. The cost of computer equipment and the related accumulated depreciation are removed from the accounts upon retirement or disposal with any resulting gain or loss being recorded in operations.
(E) Impairment of Long-Lived Assets
The Company evaluates its long-lived assets for impairment whenever events or a going concern, which
contemplateschange in circumstances indicate that the realizationcarrying amount of such assets may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the satisfactioncarrying amount of liabilities and
commitmentsthe asset to the future net undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is the excess of the carrying amount over the fair value of the asset.
(F) Income Taxes
As a limited liability company, the Company does not incur income taxes. Instead, its earnings are included in the normal course of business. As at June 30, 2008, the
Company has not recognized revenue to datemembers’ personal income tax returns and has accumulated operating losses
of approximately $(9,763) since inception.taxed depending on their personal tax situations. The Company's ability to continue
as a going concern is contingent upon the successful completion of additional
financing arrangements and its ability to achieve and maintain profitable
operations. Management plans to raise equity capital to finance the operating
and capital requirements of the Company. Amounts raised will be used to
further development of the Company's products, to provide financing for
marketing and promotion, to secure additional property and equipment, and for
other working capital purposes. While the Company is expending its best
efforts to achieve the above plans, there is no assurance that any such
activity will generate funds that will be available for operations.
These conditions raise substantial doubt about the Company's ability to
continue as a going concern. These financial statements, therefore, do not include any
adjustments that might arise from this uncertainty.
F-8a
NEVADA PROCESSING SOLUTIONS, INC.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
June 30, 2008
NOTE 4. STOCKHOLDERS' EQUITY
Preferred Stock
- ---------------
On June 1, 2006, the Company issued 872,690 shares of its $0.001 par value
preferred stock for $8,727 at $0.01 per share.
Each share of the Convertible Preferred Stock can be exchanged for ten hundred
(10) shares of Common Stock of the corporation. This Series A preferred stock
was issued with a beneficial conversion feature totaling $706,878 measured as
the difference between the $0.01 offering price of the underlying common stock
and the conversion benefit price of $0.10 per share. This non-cash expense
related to the beneficial conversion features of those securities and is
recorded with a corresponding credit to paid-in-capital. If the preferred stock
were to be converted into common stock, the common stock would be increased by
7,854,210 to a total of 8,726,900 shares. These 8,726,900 shares would
represent 72.1% of all common stock outstanding.
Common Stock
- ------------
On May 30, 2006 (inception), the Company issued 3,100,000 shares of its
$0.001 par value common stock for $3,100 at $0.001 per share.
On June 30, 2008, the Company issued 275,000 shares of its $0.001
par value common stock for $2,750 at $0.01 per share.
There were no other issuances of common or preferred stock or equivalents
since May 30, 2006 (inception) through June 30, 2008.
NOTE 5. RELATED PARTY TRANSACTIONS
The officer and director of the Company is involved in other business
activities. This person may face a conflict in selecting between the Company
and their other business interests. The Company has not formulated a policy
for the resolution of such conflicts.
NOTE 6. PROVISION FOR INCOME TAXES
The Company provides for income taxes under Statement of Financial
Accounting Standards NO. 109, Accounting for Income Taxes. SFAS No. 109
requires the use of an asset and liability approach in accountingprovision for income taxes. Deferred tax assets and liabilities are recorded based on the
differences between the financial statement and tax bases of assets and
liabilities and the tax rates in effect when these differences are expected
to reverse.
F-9a
NEVADA PROCESSING SOLUTIONS, INC.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
June 30, 2008
NOTE 6. PROVISION FOR INCOME TAXES (Continued)
SFAS No. 109 requires the reduction of deferred tax assets by a valuation
allowance if, based on the weight of available evidence, it is more likely
than not that some or all of the deferred tax assets will not be realized.
All of the expenditures thus far have been to organize the Company and will
not be expensed for tax purposes until the Company has operations.
The provision for income taxes is comprised of the net changes in deferred
taxes less the valuation account plus the current taxes payable as shown in
the chart below.
Net changes in Deferred Tax Benefit less than
valuation account 0
Current Taxes Payable 0
-----
Net Provision for Income Taxes 0
-----
NOTE 7. REVENUE AND EXPENSES
(G) Revenue recognition
- -------------------
Recognition
The Company recognizeswill recognize revenue on an accrual basis as it invoices for
services." Revenuearrangements in accordance with FASB ASC No. 605, “Revenue Recognition”. In all cases, revenue is generally realized or realizablerecognized only when the price is fixed and earned when all
of the following criteria are met: 1)determinable, persuasive evidence of an arrangement exists, between the Companyservice is performed and our customer(s); 2) services have been rendered;
3) our price to our customer is fixed or determinable; and 4) collectability of the resulting receivable is reasonably assured.
The Company recognizes revenue from the sale of keywords over the period the keywords are purchased for exclusive use, usually one year.
The Company recognizes revenue from setup fees at the time the initial set up is complete and no further work is required. Revenue from the sale of bulk text messages sales are recognized at the time messages are delivered. Revenue from monthly membership fees are recorded upon the monthly anniversary date of each member.
F-21
HYPERLOCAL MARKETING, LLC
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD FROM JANUARY 22, 2010 (INCEPTION)
TO DECEMBER 31, 2010
NOTE 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(H) Recent Accounting Pronouncements
The following is a summary of recent authoritative pronouncements that affect accounting, reporting, and disclosure of financial information by the Company.
In January 2010, the FASB issued Accounting Standard Update (ASU) No. 2010-06, Improving Disclosures about Fair Value Measurements, which requires additional disclosures about (1) the different classes of assets and liabilities measured at fair value, (2) the valuation techniques and inputs used, (3) the activity in Level 3 fair value measurements, and (4) the transfers between Levels 1, 2 and 3. The new disclosures are effective for the Company’s financial statements issued for interim and annual periods beginning January 1, 2010. The Company applied these disclosures in the accompanying footnotes except for non-financial assets as provided in ASC 820-10-65.
Recently Adopted Accounting Standards - The following is a summary of recent authoritative pronouncements that were adopted in the attached financial statements by the Company.
(I) Website Costs
The Company has adopted the provisions of Emerging Issues Task Force 00-2, “Accounting for Web Site Development Costs.” Costs incurred in the planning stage of a website are expensed as research and development while costs incurred in the development stage are capitalized and amortized over the life of the asset, estimated to be three years.
NOTE 3.
SOFTWARE COSTS
Software costs consisted of the following at December 31, 2010
Software costs |
| $ | 24,775 |
|
Accumulated amortization |
|
| (254 | ) |
Impairment |
|
| - |
|
Software costs, net |
| $ | 24,521 |
|
Amortization expense for the period January 22, 2010 (Inception) to December 31, 2010, was $254.
NOTE 4.
COMPUTER EQUIPMENT, NET
Computer equipment consisted of the following at December 31, 2010
Computer equipment |
| $ | 933 |
|
Accumulated depreciation |
|
| (171 | ) |
Furniture and equipment, net |
| $ | 762 |
|
Depreciation expense for period January 22, 2010 (Inception) to December 31, 2010, was $171.
NOTE 5.
NOTES PAYABLE
On December 5, 2010, the Company borrowed $15,000 pursuant to a note payable. The note bears interest at a rate of 10% per annum and is payable upon demand by the holder after March 10, 2011. As additional consideration the holder is entitled to receive 100,000 shares of common stock in a newly formed entity if the Company completes a merger by March 10, 2011. If the Company completes a merger after March 10, 2011, the holder is entitled to 150,000 shares of common stock in the newly formed entity. If the Company does not complete a merger the holder is not entitled to any shares of common stock. As of December 31, 2010, the Company has not recorded any value for this contingency.
F-22
HYPERLOCAL MARKETING, LLC
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD FROM JANUARY 22, 2010 (INCEPTION)
TO DECEMBER 31, 2010
NOTE 6.
COMMITMENTS AND CONTINGENCIES
On December 5, 2010, the Company borrowed $15,000 pursuant to a note payable. The note bears interest at a rate of 10% per annum and is payable upon demand by the holder after March 10, 2011. As additional consideration the holder is entitled to 100,000 shares of common stock in a newly formed entity if the Company completes a merger by March 10, 2011. If the Company completes a merger after March 10, 2011, the holder is entitled to 150,000 shares of common stock in the newly formed entity. If the Company does not complete a merger the holder is not entitled to any shares of common stock. As of December 31, 2010, the Company has not recorded any value for this contingency.
During January 22, 2010, the Company entered into a one year consulting services agreement with a consultant to provide services related to financial services and public relations matters. The agreement requires the Company to issue 11.06 units and make cash payments of up to $100,000 based on certain milestone events and further negotiation between the parties.
During January 2011, the Company entered into a two year software development and marketing agreement with a software developer. The agreement requires the developer to develop an application to use the Company’s product in an iphone application. The agreement requires the application to reach one of the following milestones; 200,000 downloads or 10,000 gift certificate purchases within 60 days of the application becoming available. The developer is entitled to 3% of the gross sales of the gift certificates and the issuance of 2.90 units of the Company upon meeting the milestone.
NOTE 7.
MEMBER EQUITY
During January 2010, the Company issued 201.02 units to founders for services. The units were valued at the fair value on the date of grant of $38.
During March 2010, the Company issued 71.82 units for cash of $133,000.
During June 2010, the Company issued 4 units for cash of $20,000.
During January 2010, the Company issued 11.06 units for services with a fair value on the date of grant of $110,635.
During 2010, the managing member contributed $9,057 of salary back to the Company. The amount was recorded as an in-kind contribution by the managing member.
On May 31, 2010, the Company effected a 5.4 to 1 forward split of its units. The financial statements have been retroactively adjusted to reflect the unit split.
NOTE 8.
RELATED PARTIES
The Company leases employees from a Company owned by our managing member and principal unit holder. During the period ended December 31, 2010, the related party was paid $98,873.
During 2010, the Company paid $1,997 for sales commissions to a unit holder.
NOTE 9.
CONCENTRATIONS
For the period from May 30, 2006 (inception)January 22, 2010 inception to June 30, 2008, the Company recognized noDecember 31, 2010, two customers accounted for 20% and 11%, respectively of net revenues.
The Company currently has no revenues.
F-10a
NEVADA PROCESSING SOLUTIONS, INC.
(a development stage company)
F-23
HYPERLOCAL MARKETING, LLC
NOTES TO FINANCIAL STATEMENTS
June 30, 2008
FOR THE PERIOD FROM JANUARY 22, 2010 (INCEPTION)
TO DECEMBER 31, 2010
NOTE 8. OPERATING LEASES AND OTHER COMMITMENTS:
The10.
SUBSEQUENT EVENTS
On January 21, 2011, the Company also has no lease obligations or employment agreements.
NOTE 9. EARNINGS PER SHARE
Historical net (loss) per common share is computed using the weighted average
number of common shares outstanding. Diluted earnings per share include
additional dilution from common stock equivalents, such as stock issuableborrowed $15,000 pursuant to a note payable. The note bears interest at a rate of 10% per annum and is payable July 20, 2011. If the exercise of securities or other contractsCompany completes a merger with a public company prior to issue common
stock were exercised or convertedJuly 20, 2011 the note and accrued interest automatically convert into common stock or resulted in the
issuance144,000 shares of common stock that shared in the earnings of the entity, but these
potential common stock equivalents were determined to be antidilutive.
Calculation of net income(loss) per share is as follows:
For the period
from
May 30, 2006
(Inception) to
June 30,
2008
-------------
Net loss (numerator) $ (716,641)
=============
Weighted Average Common Shares Outstanding 3,375,000
=============
Basic Loss per Share $ (0.21)
=============
NOTE 10. THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS
Statement No. 150
Accounting for Certain Financial Instruments with Characteristics of both
Liabilities and Equity
This Statement establishes standards for how a issuer classifies and measures
certain financial instrument with characteristics of both liabilities and
equity.
F-11a
NEVADA PROCESSING SOLUTIONS, INC.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
June 30, 2008
Note 10. Recent Pronouncements (Continued)
Statement No. 151
Inventory Costs-an amendment of ARB No. 43, Chapter 4 (Issued 11/04)
This statement amends the guidance in ARB No. 43, Chapter 4. "Inventory
Pricing," to clarify the accounting for abnormal amounts of idle facility
expense, freight, handling costs, and wasted material (spoilage). Paragraph 5
of ARB 43, Chapter 4. previously stated that "...under some circumstances,
items such as idle facility expense, excessive spoilage, double freight and
re-handling costs may be so abnormal ass to require treatment as current
period charges...." This Statement requites that those items be recognized as
current-period charges regardless of whether they meet the criterion of "so
abnormal." In addition, this Statement requires that allocation of fixed
production overheads to the costs of conversion be based on the normal
capacity of the production facilities.
Statement No. 152
Accounting for Real Estate Time-Sharing Transactions - an amendment of FASB
States No. 66 and 67.
This Statement amends FASB Statement No. 66, Accounting for Sales of Real
Estate, to reference the financial accounting and reporting guidance for real
estate time-sharing transactions that is provided in AICPA Statement of
Position (SOP) 04-2, Accounting for Real Estate Time-Sharing Transactions.
This Statement also amends FASB Statement No. 67, Accounting for Costs and
Initial Rental Operations of Real Estate Projects, to state that the guidance
for (a) incidental operations and (b) costs incurred to sell real estate
projects does not apply to real estate time-sharing transactions. The
accounting for those operations and costs is subject to the guidance in SOP
04-2.
Statement No. 153
Exchanges of Non-monetary Assets - an amendment of APB Opinion No. 29
The guidance in APB Opinion No. 29, Accounting for Non-monetary Transactions,
is based on the principle that exchanges of non-monetary assets should be
measured based on the fair value of the assets exchanged. The guidance in
that Opinion, however, included certain exceptions to the principle. This
Statement amends Opinion 29 to eliminate the exception for non-monetary
exchanges of similar productive assets and replaces it with a general
exception for exchanges of non-monetary assets that do not have commercial
substance. A non-monetary exchange has commercial substance if the
F-12a
NEVADA PROCESSING SOLUTIONS, INC.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
June 30, 2008
Note 10. Recent Pronouncements (Continued)
SFAS NO. 154 Accounting Changes and Correction of Errors,
Supercedes APB No. 20. This statement requires that changes in accounting
principles be applied retrospectively for all prior periods shown, including
interim periods. The effective date is for fiscal years beginning after
December 15, 2005.
SFAS NO. 155 Accounting for Certain Hybrid Financial Instruments-an amendment
of FASB Statements No. 133 and 140
This statement amends FASB Statements No. 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities. This
statement resolves issues addressed in Statement 133 Implementation Issue No.
D1, Application of Statement 133 to Beneficial Interests in Securitized
Financial Assets. This statement is effective for all financial instruments
acquired or issued after the beginning of an entity's first fiscal year that
begins after September 15, 2006.
SFAS NO. 156 Accounting for Servicing of Financial Assets-an amendment of
FASB Statement No. 140
This statement amends FASB Statement No. 140 with respect to the accounting
for separately recognized servicing liabilities. An entity should adopt this
statement as of the beginning, of its first fiscal year that begins after
September 15, 2006.
SFAS NO. 157 Fair Value Measurements
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements,
which defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles, and expands disclosures about fair
value measurements. SFAS No. 157 does not require any new fair value
measurements, but provides guidance on how to measure fair value by
providing, a fair value hierarchy used to classify the source of the
information. This statement is effective for us beginning May 1, 2008.
SFAS NO. 158 Employers' Accounting for Defined Benefit Pension and Other
Postretirement Plans-an amendment of FASB Statements No. 87, 88, 106, and
132(R))
F-13a
NEVADA PROCESSING SOLUTIONS, INC.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
June 30, 2008
Note 10. Recent Pronouncements (Continued)
This statement improves the financial reporting by requiring an employer to
recognize the overfunded or underfunded status of a defined benefit
postretirement plan (other than a multiemployer plan) as an asset or
liabilities in its statement of financial positions and to recognize changes
in that funded status in the year in which the changes occur through
comprehensive income of a businessnewly formed entity. This statement also improves
financial reporting by requiring an employer to measure the funded status of
a plan as of the date of its year-end statement of financial position, with
limited exceptions.
SFAS NO. 159 The Fair Value Option for Financial Assets and Financial
Liabilities-Including an amendment of FAS B Statement No. 115
This statement permits entities to choose to measure many financial
instruments and certain items at fair value. The objective is to improve the
financial reporting by providing entities with
the opportunity to mitigate volatility in reported earnings caused by
measuring related assets and liabilities differently without having to apply
complex hedge accounting provisions. This statement is expected to expand the
use of fair value measurement objectives for accounting for financial
instruments. This statement is effective as of the beginning of an entity's
first fiscal year that begins after November 15, 2007.
SFAS No. 160 Non-controlling Interest in Consolidated Financial Statements-an
amendment of ARB No.51
This statement amends ARB 51 to establish accounting and reporting standards
for the non-controlling interest in a subsidiary and for the deconsolidation
of a subsidiary. It also changes the way the consolidated income statement is
presented for non-controlling interest. This statement improves comparability
by eliminating diversity of methods. This statement also requires expanded
disclosure.
SFAS No. 161 This statement is intended to enhance the disclosure
requirements for derivative instruments and hedging activities as required by
SFAS 133.
SFAS 162 This statement indentifies the sources of accounting principles and
the framework for-selecting the principles to by used in the preparation of
financial statements for entities that are presented in conformity with
generally accepted accounting principles in the United States, (the GAAP
hierarchy).
F-14a
NEVADA PROCESSING SOLUTIONS, INC.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
June 30, 2008
Note 10. Recent Pronouncements (Continued)
FIN No. 48
In June 2006, the FASB issued Interpretation No. 48 ("FIN No. 48"),
Accounting for Uncertainty in Income Taxes-an interpretation of FASB
Statement No. 109. which clarifies the accounting for uncertainty in income
taxes recognized in an enterprise's financial statements in accordance with
SFAS No. 109, Accounting for Income Taxes. The Interpretation provides a
recognition threshold and measurement attribute for the financial statement
recognition and measurement of a tax position taken or expected to be taken
in a tax return. Under FIN No. 48, the Company may recognize the tax benefit
from an uncertain tax position only if it is more likely than not that the
tax position will be sustained on examination by the taxing authorities,
based on the technical merits of the position. The tax benefits recognized in
the financial statements from such a position should be measured based on the
largest benefit that has a greater than 50% likelihood of being realized upon
ultimate settlement. FIN No. 48 also provides guidance on de-recognition,
classification, interest and penalties, accounting in interim periods,
disclosure, and transition. FIN No. 48 is effective for us beginning July 1,
2007.
In June 2006. the FASB ratified the Emerging Issues Task Force ("EITF")
consensus on EITF Issue No. 06-2, "Accounting for Sabbatical Leave and Other
Similar Benefits Pursuant to FASB Statement No. 43." EITF Issue No. 06-2
requires companies to accrue the costs of compensated absences under a
sabbatical or similar benefit arrangement over the requisite service period.
EITF Issue No. 06-2 is effective for us beginning July 1, 2007. The
cumulative effect of the application of this consensus on prior period
results should be recognized through a cumulative-effect adjustment to
retained earnings as of the beginning of the year of adoption. Elective
retrospective application is also permitted.
Staff Accounting Bulletin ("SAB") No. 108, Considering the Effects of Prior
Year Misstatements when Quantifying Current Year Misstatements. SAB No. 108
requires companies to quantify misstatements using both a balance sheet (iron
curtain) and an income statement (rollover) approach to evaluate whether
either approach results in an error that is material in light of relevant
quantitative and qualitative factors, and provides for a one-time cumulative
effect transition adjustment. SAB No. 108.
The FAS B has replaced SFAS No. 141 with a new statement on Business
Combinations that changes the way that minority interest is recorded and
modified as a parent's interest in a subsidiary changes.
F-15a
MOORE & ASSOCIATES, CHARTERED
ACCOUNTANTS AND ADVISORS
------------------------
PCAOB REGISTERED
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
NEVADA PROCESSING SOLUTIONS, INC.
(A Development Stage Company)
We have reviewed the accompanying condensed balance sheets of NEVADA
PROCESSING SOLUTIONS, INC. as of September 30, 2008, and the related condensed
statements of operations, stockholders' equity (deficit), and cash flows for
the three-month period ended September 30, 2008 and from inception through
September 30, 2008. These interim financial statements are the responsibility
of the Corporation's management.
We conduct our reviews in accordance with the standards of the Public Company
Accounting Oversight Board (United States). A review of interim financial
information consists of principally applying analytical procedures and making
inquiries of persons responsible for the financials and accounting matters. It
is substantially less in scope than an audit conducted in accordance with the
standards of the Public Company Accounting Oversight Board (United States),
the objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our reviews, we are not aware of any material modifications that
should be made to such condensed financial statements for them to be in
conformity with accounting principles generally accepted in the United States
of America.
We have previously audited, in accordance with standards of the Public Company
Accounting Oversight Board (United States), the balance sheets of NEVADA
PROCESSING SOLUTIONS, INC. as of June 30, 2008 and June 30, 2007, and the
related statements of income, stockholders' equity and cash flows for the
2008 then ended (not presented herein); and in our report dated July 28,
2008, we expressed an opinion with a going concern paragraph on those
financial statements. In our opinion, the information set forth in the
accompanying balance sheets as of June 30, 2008 and June 30, 2007 is fairly
stated, in all material respects, in relations to the balance sheets from
which it has been derived.
/s/ Moore & Associates, Chartered
- ---------------------------------
Moore & Associates, Chartered
Las Vegas, Nevada
October 17, 2008
2675 S. JONES BLVD. SUITE 109, LAS VEGAS, NEVADA 89146
(702) 253-7499 Fax: (702)253-7501
F-1b
NEVADA PROCESSING SOLUTIONS, INC.
(a development stage company)
Balance Sheets
Balance Sheets
September 30, June 30,
2008 2008
------------ ------------
ASSETS
Current Assets:
Cash $ - $ -
Funds in escrow - 2,750
------------ ------------
Total current assets - 2,750
------------ ------------
TOTAL ASSETS $ - $ 2,750
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ - $ 1,000
------------ ------------
Total current liabilities - 1,000
------------ ------------
Stockholders' equity:
Preferred stock, $0.001 par value, 5,000,000
shares authorized, 872,690 shares issued and
outstanding as of 9/30/08 and 6/30/08,
respectively 873 873
Common stock, $0.001 par value, 195,000,000
shares authorized, 3,375,000, 3,375,000
issued and outstanding as of
9/30/08 and 6/30/08, respectively 3,375 3,375
Additional paid-in capital 714,143 714,143
(Deficit) accumulated during development stage (718,391) (716,641)
------------ ------------
Total stockholders' equity - 1,750
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ - $ 2,750
============ ============
The accompanying notes are an integral part of these statements
F-2b
NEVADA PROCESSING SOLUTIONS, INC.
(a development stage company)
Statements of Operations
Statements of Operations
For the Period
For the from
Three months ending May 30, 2006
September 30, (Inception) to
-------------------- September 30,
2008 2007 2008
--------- --------- --------------
Revenue $ - $ - $ -
--------- --------- --------------
General and administrative expenses 1,750 - 11,513
--------- --------- --------------
Total Expenses 1,750 - 11,513
--------- --------- --------------
Net Income (Loss) before
beneficial interest $ (1,750) $ - $ (11,513)
========= ========= ==============
Beneficial Conversion Feature of
Preferred stock (706,878)
-------------
Provision for Income Taxes - - -
Net income (loss) $ (1,750) $ - $ (718,391)
========= ========== =============
Weighted average number of common
shares outstanding -
basic and fully diluted 3,375,000 3,375,000
========= ==========
Basic Earnings (Loss) per share $ (0.00) $ (0.00)
========= ==========
The accompanying notes are an integral part of these statements
F-3b
NEVADA PROCESSING SOLUTIONS, INC.
(a development stage company)
Statements of Cash Flows
Statements of Cash Flows
For the Period
For the from
Three months ending May 30, 2006
September 30, (Inception) to
-------------------- September 30,
2008 2007 2008
--------- --------- --------------
Operating Activities:
Net Income (Loss) $ (1,750) $ - $ (718,391)
--------- --------- --------------
Adjustments to reconcile
net loss to net cash
used by operating activities
Beneficial Interest on
Conversion - - 706,878
(Decrease) in accounts payable (1,000) - -
--------- --------- --------------
Cash Provided (Used) by Operations (1,000) - (11,513)
Financing Activities:
Sale of Common Stock 2,750 - 5,850
Sale of Preferred Stock - - 873
Contributed Capital - - 4,790
--------- --------- --------------
Cash Provided (Used) by
Financing Activities 2,750 - 11,513
Net Change in Cash (2,750) - -
Beginning Cash 2,750 - -
--------- --------- --------------
Ending Cash $ - $ - $ -
========= ========= ==============
The accompanying notes are an integral part of these statements
F-4b
NEVADA PROCESSING SOLUTIONS, INC.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
September 30, 2008
Note 1 - Basis of Presentation
The interim financial statements included herein, presented in
accordance with United States generally accepted accounting principles and
stated in US dollars, have been prepared by the Company, without audit,
pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules
and regulations, although the Company believes that the disclosures are
adequate to make the information presented not misleading.
These statements reflect all adjustments, consisting of normal recurring
adjustments, which, in the opinion of management, are necessary for fair
presentation of the information contained therein. It is suggested that
these interim financial statements be read in conjunction with the
financial statements of the Company for the period ended June 30, 2008
and notes thereto included in the Company's S-1 registration statement. The
Company follows the same accounting policies in the preparation of interim
reports.
Results of operations for the interim periods are not indicative of annual
results.
Note 2 - Going concern
These consolidated financial statements have been prepared in accordance with
generally accepted accounting principles applicable to a going concern which
contemplates the realization of assets and the satisfaction of liabilities
and commitments in the normal course of business. As at September 30, 2008,If the Company has not recognized any revenues to datecompleted a merger by July 20, 2011 the note and has accumulated
operating losses of approximately $11,513 since inception. The Company's
ability to continue as a going concernaccrued interest is contingent upondue the successful
completion of additional financing arrangements and its ability to achieve
and maintain profitable operations. Whileholder.
On February 3, 2011, the Company borrowed $15,000 pursuant to a note payable. The note bears interest at a rate of 10% per annum and is expending its best
effortspayable upon demand by the holder after March 10, 2011. As additional consideration the holder is entitled to achievereceive 100,000 shares of common stock in a newly formed entity if the above plans, thereCompany completes a merger by March 10, 2011. If the Company completes a merger after March 10, 2011 the holder is no assurance that any such
activity will generate funds that will be available for operations.
These conditions raise substantial doubt aboutentitled to 150,000 shares of common stock in the Company's ability to
continue as a going concern. These financial statements do not include any
adjustments that might arise from this uncertainty.
F-5b
NEVADA PROCESSING SOLUTIONS, INC.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
September 30, 2008
Note 3 - Related party transactions
Thenewly formed entity. If the Company does not leasecomplete a merger the holder is not entitled to any shares of common stock. As of December 31, 2010 the Company has not recorded any value for this contingency.
During January 2011, the Company entered into a two year software development and marketing agreement with a software developer. The agreement requires the developer to develop an application to use the Company’s product in an iphone application. The agreement requires the application to reach one of the following milestones; 200,000 downloads or rent any property. Office services are
provided without charge by a director. Such costs are immaterial10,000 gift certificate purchases within 60 days of the application becoming available. The developer is entitled to 3% of the gross sales of the gift certificates and the issuance of 2.90 units of the Company upon meeting the milestone.
The Company evaluated subsequent events through February 4, 2011, the date the financial statements and, accordingly, have not been reflected therein. The
officers and directors of the Company are involved in other business
activities and may, in the future, become involved in other business
opportunities. If a specific business opportunity becomes available, such
persons may face a conflict in selecting between the Company and their other
business interests. The Company has not formulated a policy for the
resolution of such conflicts.
F-6b
F-24
PART II -
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Other Expenses of Issuance and Distribution
The following table sets forth the expenses in connection with the issuance
and distribution of the securities being registered hereby. All such
expenses will be borne by the registrant; none shall be borne by any selling
stockholders.
Item 24.
Indemnification of OfficerDirectors and Directors
Our officers and Directors are indemnified as provided by the Nevada Revised
Statutes (the "NRS") and our bylaws.
Under the NRS, director immunity from liability to a company or its
shareholders for monetary liabilities applies automatically unless it is
specifically limited by a company's articles of incorporation that is not the
case with our Articles of Incorporation. Excepted from that immunity are:
1) a willful failure to deal fairly with the company or its shareholders in
connection with a matter in which the director has a material conflict of
interest;
2) a violation of criminal law (unless the director had reasonable cause to
believe that his or her conduct was lawful or no reasonable cause to believe
that his or her conduct was unlawful);
3) a transaction from which the director derived an improper personal
profit; and
II-1
4) willful misconduct.
Officers
Our Bylaws provide that we will indemnify our Directors and officers to the fullest extent not prohibitedpermitted by Nevada law; provided, however,law that we may
modify the extent of such indemnification by individual contracts with our Directors and officers; and, provided, further, that wedirectors or officers shall not be requiredpersonally liable to indemnify any Directorus or our shareholders for damages for breach of such director’s or officer’s fiduciary duty. The effect of this provision of our Articles of Incorporation, as amended, is to eliminate our rights and our shareholders (through shareholders’ derivative suits on behalf of our company) to recover damages against a director or officer in connection with any proceeding (or
part thereof) initiatedfor breach of the fiduciary duty of care as a director or officer (including breaches resulting from negligent or grossly negligent behavior), except under certain situations defined by such person unless:
1) suchstatute. We believe that the indemnification is expressly required to be made by law;
2) the proceeding was authorized by our Board of Directors;
3) such indemnification is provided by us,provisions in our sole discretion, pursuantArticles of Incorporation, as amended, are necessary to the powers vested us underattract and retain qualified persons as directors and officers.
The Nevada law;Revised Statutes provides that a corporation may indemnify a director, officer, employee or 4) such indemnification is required to be made pursuant to the Bylaws.
Our Bylaws provide that we will advance all expenses incurred to any person
who was or is a party or is threatened to beagent made a party to any threatened,
pending, or completedan action suit, or proceeding, whether civil, criminal,
administrative, or investigative, by reason of thethat fact that he is or she was our
Directora director, officer, employee or officer, or isagent of the corporation or was serving at ourthe request as a Director or
executive officer of another company, partnership, joint venture, trust, or
other enterprise, prior to the final disposition of the proceeding, promptly
following request. This advanced ofcorporation against expenses is to be made upon receipt of an
undertakingactually and reasonably incurred by him or on behalf ofher in connection with such person to repay said amounts should it be
ultimately determined that the person was not entitled to be indemnified
under our Bylawsaction if he or otherwise.
Our Bylaws also provide that no advance shall be made by us to any officer in
any action, suit, or proceeding, whether civil, criminal, administrative or
investigative, if a determination is reasonably and promptly made: (a) by the
board of directors by a majority vote of a quorum consisting of directors who
were not parties to the proceeding; or (b) if such quorum is not obtainable,
or, even if obtainable, a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion, that the facts known to the
decision- making party at the time such determination is made demonstrate
clearly and convincingly that such personshe acted in badgood faith orand in a manner that such person did not believehe or she reasonably believed to be in, or not opposed to, ourthe best interests.
Recent Sales of Unregistered Securities
On May 30, 2006 (inception), the Company issued 3,100,000 shares of its
$0.001 par value common stock for $3,100 at $0.001 per share.
On June 1, 2006, we issued 872,690 shares of our $0.001 par value preferred
stock for $8,727 at $0.01 per share to Processing Pros, Inc., beneficially
controlled and owned by Leslie Biaggi, who has the ultimate voting control
over the shares held this entity.
II-2
Each shareinterests of the Convertible Preferred Stock can be exchanged for ten
hundred (10) shares of Common Stock of the corporation. We relied upon
Section 4(2) of the Securities Act for the offercorporation and sale. We believed that
Section 4(2)with respect to any criminal action, had no reasonable cause to believe his or her conduct was available because the offer and sale did not involve a
public offering and there was not general solicitation or general advertising
involved in the offer or sale.
On June 30, 2008, we completed an offering of 275,000 shares at a price of
$0.01 per share to a total of 24 purchasers. The total amount received from
this offering was $2,750. We relied on the exemption from registration
provided by Section 4(2) and Rule 505 of Regulation D under the Securities
Act of 1933, as amended. The offer and sale did not involve a public
offering and there was not any general solicitation or general advertising
involved in the offer or sale.
The purchasers in this offering were as follows:
Shares
Purchaser Purchased
Aldrich, Jessica 15,000
Beel, Valarie 10,000
Bishop, Jacquelyn 9,000
Bishop, Jamie 10,500
Colello, Anthony 12,500
Colton, Craig 15,000
Jacobson, Janice 10,000
Jacobson, Ray 12,000
Jesky, Rick 5,000
Larson, Jared 9,500
Manteris, Nicholas 15,000
Martin, Patricia 15,000
Meadows, Evelyn 15,000
Means, Craig 15,000
Murtha, Kevin 15,000
Patterson, Don 5,000
Patterson, James 5,000
Patterson, Lilia 5,000
Patterson, Michael 5,000
Sandoval, Robert 15,000
Seymour, Candace 15,000
Stewart, Patricia 15,000
Sullivan, Brian 15,000
Wright, Douglas 11,500
II-3
Exhibits
(a) Exhibits:
The following exhibits are filed as part of this registration statement:
- -------------------------------------------------------------------------
EXHIBITS
SEC REFERENCE TITLE OF DOCUMENT LOCATION
NUMBER
- -------------------------------------------------------------------------
3.1 Articles of Incorporation This filing
May 30, 2006
- -------------------------------------------------------------------------
3.2 Bylaws of the Registrant This filing
dated May 31, 2006 as
currently in effect
- -------------------------------------------------------------------------
3.3 Amended Articles of Incorporation This filing
dated February 23, 2007
as currently in effect
- -------------------------------------------------------------------------
3.4 Articles/Designation dated This filing
April 29, 2008 as currently
in effect
- -------------------------------------------------------------------------
5.1 Opinion of Thomas C. Cook, Esq. This filing
regarding the legality of the
securities being registered
- -------------------------------------------------------------------------
23.1 Consent of Moore & Associates, This filing
Chartered for June 30, 2008
audit
- -------------------------------------------------------------------------
UNDERTAKINGS
------------
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers of sales are being made, a
post-effective amendment to this registration statement to:
(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
II-4
(ii) Reflect in the prospectus any facts or events which, individually or
together, represent a fundamental change in the information in this
registration statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value
of securities offered would not exceed that which was registered) and
any deviation from the low and high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with
the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change
in the maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective registration statement;
and
(iii) Include any additional or changed material information on the plan of
distribution.
2. That, for the purpose of determining any liability under the Securities
Act, treat each post-effective amendment as a new registration statement of
the securities offered herein, and that the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment any of
the securities being registered hereby which remain unsold at the
4. unlawful.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to directors, officers and controlling persons of the small business issuerregistrant pursuant to the By-Laws of the
company,foregoing provisions, or otherwise, we havethe registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or other controlcontrolling person in connection with the securities being registered, wethe registrant will, unless in the opinion of our legalits counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
5. For
Item 25.
Other Expenses of Issuance and Distribution
The following table sets forth an itemization of all estimated expenses, all of which we will pay, in connection with the issuance and distribution of the securities being registered:
Nature of Expense |
|
| Amount |
|
|
|
|
|
|
Transfer Agent Fees |
| $ | 2,500.00 |
|
SEC registration fee |
|
| 1,061.01 |
|
Accounting fees and expenses |
|
| 5,000.00 |
|
Legal fees and expenses |
|
| 15,000.00 |
|
TOTAL * |
| $ | 23,561.01 |
|
———————
*
Estimated
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Item 26.
Recent Sales of Unregistered Securities
On February 1, 2010, the Company entered into agreements with 55 individuals for the issuance of a total of 3,272,598 shares of its common stock, valued at $1,145,410, in exchange for a release of claims and liability relating to certain Company assets which were concurrently assigned to the Company by the legal owners of the assets. These shares were issued pursuant to an exemption from registration under Section 4(2) of the Securities Act. The shares contained a legend restricting their transferability absent registration or applicable exemption.
On February 1, 2010, the Company entered into two employment agreements with its former president and chief executive officer which required the Company to issue a total of 2,181,724 shares, valued at $763,603, to its new executives. These shares were issued pursuant to an exemption from registration under Section 4(2) of the Securities Act. The shares contained a legend restricting their transferability absent registration or applicable exemption.
On February 1, 2010, the Company entered into a distribution license agreement and agreed to issue 218,172 shares of its common Stock, valued at $4,363, to an executive officer of HollywoodLaundromat.Com, Inc., the Company's former distributor. These shares were capitalized at their fair market value and will be amortized over an eighteen month period. These shares were issued pursuant to an exemption from registration under Section 4(2) of the Securities Act. The shares contained a legend restricting their transferability absent registration or applicable exemption.
On March 10, 2010, the Company issued 334,180 shares of common stock pursuant to the conversion of 33,418 preferred shares of stock. These shares were issued pursuant to an exemption from registration under Section 4(2) of the Securities Act. The shares contained a legend restricting their transferability absent registration or applicable exemption.
On April 20, 2010, the Company issued 361,250 shares of common stock pursuant to the conversion of 36,125 preferred shares of stock. These shares were issued pursuant to an exemption from registration under Section 4(2) of the Securities Act. The shares contained a legend restricting their transferability absent registration or applicable exemption.
On May 5, 2010, the Company issued 378,950 shares of common stock pursuant to the conversion of 37,895 shares of preferred stock. These shares were issued pursuant to an exemption from registration under Section 4(2) of the Securities Act. The shares contained a legend restricting their transferability absent registration or applicable exemption.
On May 13, 2010, the Company issued 397,520 shares of common stock pursuant to the conversion of 39,752 shares of preferred stock. These shares were issued pursuant to an exemption from registration under Section 4(2) of the Securities Act. The shares contained a legend restricting their transferability absent registration or applicable exemption.
On May 25, 2010, the Company issued 424,100 shares of common stock pursuant to the conversion of 42,410 shares of preferred stock. These shares were issued pursuant to an exemption from registration under Section 4(2) of the Securities Act. The shares contained a legend restricting their transferability absent registration or applicable exemption.
On June 16, 2010, the Company issued 444,880 shares of common stock pursuant to the conversion of 44,488 shares of preferred stock. These shares were issued pursuant to an exemption from registration under Section 4(2) of the Securities Act. The shares contained a legend restricting their transferability absent registration or applicable exemption.
On June 16, 2010, the Company sold 70,000 shares of its restricted common stock and 140,000 shares of its registered free trading common stock for cash of $63,000. The restricted shares were issued pursuant to an exemption from registration under Section 4(2) of the Securities Act. The shares contained a legend restricting their transferability absent registration or applicable exemption.
In December 2010, the Company issued 800,000 shares of common stock in a private placement for $100,000. The offering price of the securities was $0.125 per share. These shares were issued pursuant to an exemption from registration under Section 4(2) of the Securities Act. The shares contained a legend restricting their transferability absent registration or applicable exemption.
Pursuant to the Merger Agreement effective March 16, 2011, we issued to 26 holders of Hyperlocal membership interests 20,789,395 shares of the Company representing approximately 50.1% of the outstanding shares of the Company on a fully diluted basis in consideration of a 100% wholly owned interest in Hyperlocal. There were 26
II-2
members of Hyperlocal prior to the merger. The shares of common stock issued pursuant to the merger contain the same rights, terms and preferences as the Company’s currently issued and outstanding shares of common stock. The shares issued to the Hyperlocal members were issued under the exemption from registration provided by Section 4(2) of the Securities Act and Regulation D, Rule 506, promulgated thereunder. The shares contain a legend restricting transferability absent registration or applicable exemption. The Hyperlocal members received current information about the Company and had the opportunity to ask questions about the Company. All of the Hyperlocal members were deemed accredited.
During the six months ended June 30, 2011, the Company completed a private placement and sold an aggregate of 2,210,000 shares of restricted shares of Common Stock to 13 accredited investors for gross proceeds of $276,250. The proceeds from the private placement were used for the development of Hyperlocal products and general working capital purposes. The private placement was conducted by the Company’s president and no fees or commissions were paid in connection with the private placement. The shares issued to the investors were issued under the exemption from registration provided by Section 4(2) of the Securities Act and Regulation D, Rule 506, promulgated thereunder. The shares contain a legend restricting transferability absent registration or applicable exemption. The investors received current information about the Company and had the opportunity to ask questions about the Company. All of the investors were deemed accredited.
Effective March 16, 2011, the Company issued 144,000 shares of its common stock to a note holder pursuant to the conversion of a $15,000 promissory note issued by Hyperlocal. Such promissory note automatically converted into shares of the Company’s common stock upon closing of the Merger Agreement. The shares issued to the note holder were issued under the exemption from registration provided by Section 4(2) of the Securities Act and contain a legend restricting transferability absent registration or applicable exemption. The note holder received current information about the Company and had the opportunity to ask questions about the Company.
Effective March 16, 2011, the Company issued 250,000 shares of common stock to the holder of Hyperlocal promissory notes in the principal amount of $30,000. The shares were issued pursuant to the terms of the notes and were issued under theexemption from registration provided by Section 4(2) of the Securities Act. The shares contain a legend restricting transferability absent registration or applicable exemption. The note holder received current information about the Company and had the opportunity to ask questions about the Company.
Effective March 16, 2011, the Company issued 100,000 shares of common stock to a service provider for legal, consulting and advisory services. The shares were issued to the consultant under theexemption from registration provided by Section 4(2) of the Securities Act and such shares contain a legend restricting transferability absent registration or applicable exemption. The service provider received current information about the Company and had the opportunity to ask questions about the Company.
Effective March 24, 2011, the Company issued a warrant exercisable to purchase 500,000 shares of the Company’s common stock at a price per share of $0.25 for a period of three years. The warrant was issued pursuant to the terms of an advisory services agreement. The warrant was issued to the service provider under the exemption from registration provided by Section 4(2) of the Securities Act and such shares contain a legend restricting transferability absent registration or applicable exemption. The service provider received current information about the Company and had the opportunity to ask questions about the Company.
On May 11, 2011, 176,335 shares of convertible preferred stock were converted into 1,763,350 shares of common stock. The shares were issued under the exemption from registration provided by Section 4(2) of the Securities Act and such shares contained a legend restricting transferability absent registration or applicable exemption.
On June 30, 2011, 184,534 shares of convertible preferred stock were converted into 1,845,340 shares of common stock.The shares were issued under the exemption from registration provided by Section 4(2) of the Securities Act and such shares contained a legend restricting transferability absent registration or applicable exemption.
On July 1, 2011, the Company issued 20,000 shares of common stock value at $6,000 ($.30 per share) in consideration of services provided. The shares were issued under the exemption from registration provided by Section 4(2) of the Securities Act and such shares contained a legend restricting transferability absent registration or applicable exemption.
On July 12, 2011, 193,576 shares of convertible preferred stock were converted into 1,935,760 shares of common stock. The shares were issued under the exemption from registration provided by Section 4(2) of the Securities Act and such shares contained a legend restricting transferability absent registration or applicable exemption.
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On August 11, 2011, 84,157 shares of convertible preferred stock were converted into 841,570 shares of common stock. The shares were issued under the exemption from registration provided by Section 4(2) of the Securities Act and such shares contained a legend restricting transferability absent registration or applicable exemption.
On July 7, 2011, the Company granted options to purchase 200,000 shares of its common stock having an exercise price of $0.26 per share to a consultant. Options to purchase 100,000 shares are exercisable upon the date of grant and the remaining options to purchase 100,000 shares are exercisable six months from the date of grant. The options expire on July 7, 2012. The options were issued pursuant to the terms of an advisory services agreement. The options were issued to the service provider under the exemption from registration provided by Section 4(2) of the Securities Act and such options contain a legend restricting transferability absent registration or applicable exemption. The service provider received current information about the Company and had the opportunity to ask questions about the Company.
On July 7, 2011, the Company issued options to purchase 100,000 shares of its common stock to a consultant at an exercise price of $0.26 per share. The options vest immediately. The options expire on July 7, 2013. The options were issued pursuant to the terms of an advisory services agreement. The options were issued to the service provider under the exemption from registration provided by Section 4(2) of the Securities Act and such options contain a legend restricting transferability absent registration or applicable exemption. The service provider received current information about the Company and had the opportunity to ask questions about the Company.
On July 7, 2011, the Company issued options to purchase 100,000 shares of its common stock to an employee at an exercise price of $0.26 per share. The options vest immediately. The options expire on July 7, 2013. The options were issued pursuant to the terms of an option agreement. The options were issued to the employee under the exemption from registration provided by Section 4(2) of the Securities Act and such options contain a legend restricting transferability absent registration or applicable exemption. The employee received current information about the Company and had the opportunity to ask questions about the Company.
During July and August 2011, the Company received subscriptions for the purchase of an aggregate of 2,080,000 shares of its common stock from 11 subscribers at a purchase price of $0.125 per share for gross proceeds of $260,000. No fees or commissions were paid in connection with the subscriptions. The shares issued to the investors were issued under the exemption from registration provided by Section 4(2) of the Securities Act. The shares contain a legend restricting transferability absent registration or applicable exemption. The investors received current information about the Company and had the opportunity to ask questions about the Company. All of the investors were deemed accredited.
During September we issued options to purchase 300,000 shares of common stock to a consultant exercisable at $0.18 per share. The options were issued in partial consideration of marketing services. The options are exercisable for a period of 3 years.
During September 2011, the Company has issued warrants to purchase an aggregate of 10,000,000 shares of common stock to 8 consultants. The warrants are exercisable for a period of 3 years at prices ranging from $0.16 per share to $0.25 per share. The warrants were issued in consideration of business consulting services. The options were issued to the consultants under the exemption from registration provided by Section 4(2) of the Securities Act and such options contain a legend restricting transferability absent registration or applicable exemption. The consultants received current information about the Company and had the opportunity to ask questions about the Company.
During September 2011, the Company issued 200,000 shares of common stock and options to purchase 300,000 shares of its common stock to a service provider at an exercise price of $0.18 per share. The options vest immediately and expire 3 years from the date of issuance. The options were issued pursuant to the terms of a marketing agreement. The options were issued to the service provider under the exemption from registration provided by Section 4(2) of the Securities Act and such options contain a legend restricting transferability absent registration or applicable exemption. The service provider received current information about the Company and had the opportunity to ask questions about the Company.
Effective September 30, 2011, the Company issued an aggregate of 63,750 shares of its common stock to 13 shareholders in satisfaction of $16,750.26 of liquidated damages payable to the shareholders under subscription agreements entered into during the six months ended June 30, 2011 for failure of the Company to timely register shares held by such shareholders. The shares were issued under the exemption from registration provided by Section
II-4
4(2) of the Securities Act and such shares contain a legend restricting their transferability absent registration or applicable exemption. The shareholders were deemed accredited and had access to current information about the Company.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
None.
II-5
Item 27.
Exhibit | Description | |
2.1 | Merger Agreement dated February 17, 2011 (1) | |
3.1 | Articles of Incorporation (2) | |
3.2 | Amendment to Articles of Incorporation (2) | |
3.3 | Amendment to Articles of Incorporation Designation of Series A Preferred Stock (2) | |
3.4 | Amendment to Articles of Incorporation Name change (7) | |
3.5 | Restated Bylaws of MMAX Media, Inc. * | |
4.1 | Form of Warrant * | |
4.2 | Form of Option * | |
5.1 | Opinion of Quintairos, Prieto, Wood & Boyer, P.A. as to the legality of the Shares (to be filed by amendment) | |
10.1 | Preferred Stock Lock up Agreement dated April 1, 2009(3) | |
10.2 | Amendment to Preferred Stock Lock Up Agreement dated April 19, 2010(4) | |
10.3 | Indemnification Agreement (5) | |
10.4 | Lease Agreement * | |
10.5 | Employment Agreement with Edward Cespedes(6) | |
10.6 | Form of March 2011 Private Placement Subscription Agreement * | |
10.7 | Agreement with Adility, Inc. | |
10.8 | Form of Secured Convertible Promissory Note (8) | |
10.9 | Form of General Security Agreement (8) | |
10.10 | Form of Intellectual Property Security Agreement (8) | |
10.11 | Form of Patent Security Agreement (8) | |
16.1 | Letter of Former Accountant (1) | |
21.1 | List of subsidiaries of the Company * | |
Consent of Webb & Company, P.A. | ||
23.2 | Consent of Quintairos, Prieto, Wood & Boyer, P.A. (included in Exhibit 5.1) |
———————
*
Previously filed
(1)
Incorporated by reference to the Company’s current report on Form 8-K filed March 21, 2011.
(2)
Incorporated by reference to the Company’s registration statement on Form S-1 filed November 4, 2008 (333-155028).
(3)
Incorporated by reference to the Company’s quarterly report on Form 10-Q for the period ended March 31, 2009 filed on April 21, 2009.
(4)
Incorporated by reference to the Company’s current report on Form 8-K filed April 26, 2010.
(5)
Incorporated by reference to the Company’s current report on Form 8-K filed February 18, 2011.
(6)
Incorporated by reference to the Company’s current report on Form 8-K filed August 15, 2011.
(7)
Incorporated by reference to the Company’s Preliminary Information Statement on Schedule 14C as filed on February 19, 2010.
(8)
Incorporated by reference to current report on Form 8-K filed January 6, 2012.
II-6
Item 28.
Undertakings
(a)
The undersigned Registrant hereby undertakes:
(1)
To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i)
To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(ii)
To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of the securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;
(iii)
To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;
(2)
That for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of 1933:
(i) wesuch securities at that time shall treatbe deemed to be the information omittedinitial bona fide offering thereof.
(3)
To remove from the formregistration by means of Prospectus
filed as part of this Registration Statement in reliance upon Rule
430A and contained in a form of Prospectus filed by us under Rule
424(b)(1), or (4) or 497(h) under the Securities Act as part of this
Registration Statement aspost-effective amendment any of the timesecurities being registered which remain unsold at the Commission declared it
effective. Fortermination of the offering.
(4)
That, for the purpose of determining any liability under the Securities Act of 1933 we shall treat each post-effective amendment that contains a
form of prospectus as a new registration statement forto any purchaser:
(i)
If the securities
offered in the registration statement, and that offering of the
securities at that time as the initial bona fide offering of those
securities.
II-5
(ii) we shall treat eachregistrant is relying on Rule 430B:
(A)
Each prospectus filed by usthe registrant pursuant to Rule 424(b)(3) asshall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement. statement; and
(B)
Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such (iii) securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference
(iv) into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date; or
(v) we shall treat
II-7
(ii)
If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
II-6
Signatures
(b)
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
(c)
The undersigned registrant hereby undertakes:
(1)
For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
(2)
For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
II-8
SIGNATURES
In accordance with the requirements of the Securities Act Nevada Processing
Solutions, Inc.of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements forof filing on Form S-1 and authorized this Prospectus on Form S-1registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Las Vegas, Nevada,Fort Lauderdale, Florida on the 4th day
of November, 2008.
NEVADA PROCESSING SOLUTIONS, INC.
/s/ J. Chad Guidry
-------------------------------
J. Chad Guidry
President, Chief Executive
Officer (Principal Executive
Officer), and Director
POWER OF ATTORNEY
We, the undersigned officers and Directors of Nevada Processing Solutions,
Inc., hereby severally constitute and appoint J. Chad Guidry, our true and
lawful attorneys-in-fact and agents, with full power of substitution, for us
and in our stead, in any and all capacities, January 9, 2012.
MMAX MEDIA, INC. | |||
By: | /s/ Edward Cespedes | ||
Edward Cespedes | |||
Principal Executive Officer, | |||
Principal Financial Officer and | |||
Principal Accounting Officer | |||
Pursuant to sign any and all amendments
(including pre-effective and post-effective amendments) to this Registration
Statement and all documents relating thereto, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the U.S.
Securities and Exchange Commission, granting to said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing necessary or advisable to be done in and about the
premises, as full to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all the said attorneys-in-fact and
agents, or any of them, or their substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933, this Registration
Statementregistration statement has been signed by the following persons in the capacities and on the dates stated.
/s/ J. Chad Guidry
- -----------------------
J. Chad Guidry
President, CEO and
Director
November 4, 2008
II-7
Signature | Title | Date | ||
/s/ Edward Cespedes | Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer and Director |
| ||
Edward Cespedes | ||||
II-9
EXHIBIT LIST
Exhibit | Description | |
Consent of Webb & Company, P.A. |