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EX-31 - EXHIBIT 31 - SOBR Safe, Inc.sept10qexh3111-10.txt
EX-32 - EXHIBIT 32 - SOBR Safe, Inc.sept10qexh3211-10.txt

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

                                    FORM 10-Q

[X] Quarterly Report Pursuant To Section 13 or 15(D) Of The Securities Exchange
    Act Of 1934

                For the quarterly period ended September 30, 2010

[X] Transition Report Under Section 13 or 15(D) Of The Securities Exchange
    Act Of 1934

             For the transition period from __________ to __________

                        Commission File Number: 000-84223

                               IMAGINE MEDIA, LTD.
             (Exact name of registrant as specified in its charter)

              Delaware                                   26-0731818
 -------------------------------           -------------------------------------
 (State or other jurisdiction              (I.R.S. Employer Identification No.)
     of incorporation or
        organization)

                           7750 N. Union Blvd., # 201
                           Colorado Springs, CO 80920
          (Address of principal executive offices, including Zip Code)
         - ------------------------------------------------------------


                                  719-266-4554
                                  ------------
                (Issuer's telephone number, including area code)

          (Former name or former address if changed since last report)

Check whether the issuer (1) filed all reports required to be filed by section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [x] No [ ]

Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). Yes [ ] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a small reporting company. See
the definitions of "large accelerated filer," "accelerated filer,"
"non-accelerated filer," and "smaller reporting company" in Rule 12b-2 of the
Exchange Act.

Large accelerated filer     [ ]               Accelerated filer    [ ]
Non-accelerated filer       [ ]               Smaller reporting company    [x]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes? [X] No [ ]

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 1,410,650 shares of common stock as
of November 15, 2010.

Imagine Media, Ltd. And Subsidiary CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Quarter Ended September 30, 2010
Imagine Media, Ltd. And Subsidiary Consolidated Financial Statements (Unaudited) TABLE OF CONTENTS Page CONSOLIDATED FINANCIAL STATEMENTS Condensed consolidated balance sheets 1 Condensed consolidated statements of operation 2-3 Condensed consolidated statement of Shareholders' equity 3 Condensed consolidated statements of cash flows 4 Notes to consolidated financial statements 6-8
Imagine Media, Ltd. and Subsidiary Condensed Consolidated Balance Sheets December 31, September 30, 2009 2010 --------------------- ------------- (Derived from audited (unaudited) financial statements) Assets Current assets: Cash and cash equivalents $ 75 $ 94 ----------- ---------- Total current assets 75 94 ----------- ---------- Total assets $ 75 $ 94 =========== ========== Liabilities and Shareholders' (Deficit) Current liabilities: Accounts payable: Trade creditors $ 76,815 $ 53,479 Related party 3,000 3,000 Short term advance 17,300 6,000 Indebtedness to related parties 39,140 32,100 Convertible debenture 30,000 30,000 Accrued interest payable 6,600 3,900 Other accrued expenses 3,081 33,081 ---------- --------- Total current liabilities 175,936 161,560 ---------- --------- Commitments - - Shareholders' deficit Common stock , $.00001 par value. Authorized 100,000,000 shares, 1,410,650 and 1,380,650 shares issued and outstanding 14 14 Additional paid-in capital 487,276 457,276 Retained deficit (663,151) (618,756) --------- --------- Total shareholders' deficit (175,861) (161,466) --------- --------- Total liabilities and shareholders' deficit $ 75 $ 94 ========= ========= See accompanying notes to the consolidated financial statements 1
Imagine Media, Ltd. and Subsidiary Condensed Consolidated Statements of Operations (unaudited) For the Three Months Ended September 30, ----------------------------- 2010 2009 ----------- ----------- Net sales and gross revenues: Advertising sales, net of discount of $0, and $0, respectively $ - $ - ----------- ----------- Total sales and revenues - - ----------- ----------- Operating expenses: Editorial, production and circulation - - Selling, general and administrative 21,421 1,064 ----------- ----------- Total operating expenses 21,421 1,064 ----------- ----------- Loss from operations (21,421) (1,064) Other income (expense): Interest expense (900) (900) ----------- ----------- Loss before income taxes (22,321) (1,964) Income tax provision - - ----------- ----------- Net loss $ (22,321) $ (1,964) =========== =========== Basic and diluted loss per share $ (0.02) $ (0.00) =========== =========== Weighted average common shares outstanding 1,410,650 1,380,650 =========== =========== See accompanying notes to the consolidated financial statements 2
Imagine Media, Ltd. and Subsidiary Condensed Consolidated Statements of Operations (unaudited) For the Nine Months Ended September 30, ----------------------------- 2010 2009 ----------- ----------- Net sales and gross revenues: Advertising sales, net of discount of $0, and $66,930, respectively $ - $ 400 ----------- ----------- Total sales and revenues - 400 ----------- ----------- Operating expenses: Editorial, production and circulation - 748 Selling, general and administrative 41,695 39,855 ----------- ----------- Total operating expenses 41,695 40,603 ----------- ----------- Loss from operations (41,695) (40,203) Other income (expense): Interest expense (2,700) (2,600) ----------- ----------- Loss before income taxes (44,395) (42,803) Income tax provision - - ----------- ----------- Net loss (44,395) (42,803) =========== =========== Basic and diluted loss per share $ (0.03) $ (0.03) =========== =========== Weighted average common shares outstanding 1,407,317 1,329,991 =========== =========== See accompanying notes to the consolidated financial statements 3
Imagine Media, Ltd. and Subsidiary Condensed Consolidated Statement of Changes in Shareholders' Equity (Deficit) Common Stock Additional Paid- Retained Shares Par Value in Capital Deficit Total --------- --------- ---------------- ----------- ---------- Balance at December 31, 2008 1,122,650 $ 11 $ 392,779 $ (541,051) $ (148,261) Conversions of accounts payable to common stock 104,000 1 25,999 - 26,000 Conversions of short term advances and accrued interest to common stock 111,400 1 27,849 - 27,850 Conversions of indebtedness to related parties to common stock 42,600 1 10,649 - 10,650 Net loss - - - (77,705) (77,705) --------- --------- ---------------- ----------- ---------- Balance at December 31, 2009 1,380,650 14 457,276 (618,756) (161,466) Stock issued for services valued at $1.00 per share (Unaudited) 30,000 - 30,000 - 30,000 Net loss (Unaudited) - - - (44,395) (44,395) --------- --------- ---------------- ----------- ---------- Balance at September 30, 2010 (unaudited) 1,410,650 $ 14 $ 487,276 $ (663,151) $ (175,861) ========= ========= ================ =========== ========== See accompanying notes to the consolidated financial statements 4
Imagine Media, Ltd. and Subsidiary Condensed Consolidated Statements of Cash Flows (unaudited) For the Nine Months Ended September 30, ------------------------- 2010 2009 --------- --------- Cash flows from operating activities: Net Loss $ (44,395) $ (42,803) Adjustments to reconcile net loss to net cash used by operating activities: Changes in assets and liabilities: Receivables - 11,469 Other assets - 400 Accounts payable 23,336 (9,274) Accrued expenses 2,700 3,074 --------- --------- Net cash used in operating activities (18,359) (37,134) --------- --------- Cash flows from financing activities: Proceeds from related party short term advances 7,040 24,400 Repayments on related party short term advances - (5,500) Proceeds from other short term advances 11,300 20,850 Repayments on other short term advances - (2,200) --------- --------- Net cash provided by financing activities 18,340 37,550 --------- --------- Net change in cash and cash equivalents (19) 416 Cash and equivalents: Beginning of period 94 68 --------- --------- End of period $ 75 $ 484 ========= ========= Supplemental disclosure of cash flow information: Cash paid during the year for: Income taxes $ - $ - ========= ========= Interest $ - $ - ========= ========= Supplemental disclosure of non-cash financing activities: Stock issued for accrued services $ 30,000 $ - ========= ========= Conversions of indebtedness to related parties to common stock $ - $ 10,650 ========= ========= Conversions of short term advance and accrued interest to common stock $ - $ 27,850 ========= ========= Conversion of accounts payable to common stock $ - $ 26,000 ========= ========= See accompanying notes to the consolidated financial statements 5
IMAGINE MEDIA, LTD. NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (1) Unaudited Financial Information The accompanying condensed financial statements of Imagine Media, Ltd. (the "Company") have been prepared in accordance with the instructions to quarterly reports on Form 10-Q. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and changes in financial position at September 30, 2010, and for all periods presented, have been made. Certain information and footnote data necessary for a fair presentation of financial position and results of operations in conformity with accounting principles generally accepted in the United States of America have been condensed or omitted. It is therefore suggested that these financial statements be read in conjunction with the summary of significant accounting policies and notes to financial statements included in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "SEC") for the year ended December 31, 2009. The results of operations for the period ended September 30, 2010 are not necessarily an indication of operating results for the full year. (2) Going Concern As shown in the accompanying financial statements, the Company has incurred operating losses and, at September 30, 2010, had both a working capital deficit and a net capital deficiency of $(175,861). These factors may indicate that the Company will be unable to continue as a going concern. The Company's ability to continue as a going concern is dependent upon its ability to generate sufficient cash flow to meet obligations on a timely basis and ultimately to attain profitability. To do this, the Company is seeking to acquire another business which, as of September 30, 2010, had not occurred. However, management plans, in the near-term, to (1) restructure debt and (2) increase ownership equity in order to increase working capital. There is, of course, no assurance that management will be successful in those efforts. The Company's financial statements do not include any adjustments that might result from the outcome of this uncertainty. In their report on the Company's financial statements for the year ended December 31, 2009, the Company's independent auditors expressed substantial doubt as to the Company's ability to continue as a going concern. (3) Related Party Transactions On February 10, 2010 the Company's board of directors authorized the issuance of 10,000 shares to each of the Company's three directors. The shares were valued at $1.00 per share resulting in total compensation expense of $30,000 which was accrued at December 31, 2009. In October 2008, a company controlled by Greg Bloom, the Company's Chief Executive Officer, advanced $5,500 to the Company for working capital purposes. During the nine months ended September 30, 2009 the amount due to Mr. Bloom was paid in full. During the year ended December 31, 2008, The Rockies Fund advanced a total of $16,000 to the Company for working capital purposes. As of December 31, 2008 the 6
Company had repaid a total of $4,000 of these cash advances. In addition, the Rockies Fund made a direct advance to the Company of $650, which remained unpaid at December 31, 2008. On March 1, 2009, $10,650 of the advances were converted to 42,600 shares of common stock at a conversion price of $.25 per share, the fair value of the stock on the conversion date. As of September 30, 2010 $2,000 of the working capital advances remain unpaid. In May 2009, Mr. Steven Calandrella, the principal of the Rockies Fund advanced $4,400 to the Company. In June 2009, Triumph Capital, a company controlled by a shareholder, advanced the Company a total of $12,000. Also in June 2009, $6,000 was advanced to the Company by Ms. Dorothy Calandrella, a shareholder of the Company, with an additional advance of $2,000 made in August 2009 and $7,040 during the nine month period ended September 30, 2010. All the advances were provided for working capital purposes. None of these advances have been paid as of September 30, 2010. None of the advances earn interest and are payable to the creditor on demand. (4) Convertible Debenture and Short Term Advances On October 1, 2008 the Company issued an 8% Convertible Debenture to an attorney in exchange for $30,000 owed to the attorney for prior services. The Debenture is convertible by the holder into shares of the Company's common stock at a conversion price of $0.25. The debenture was due and payable on April 1, 2009. As a result of the failure to pay the debenture when due, the interest rate on the debenture increased to 12% per year. As of November 15, 2010, the debenture, together with $5,700 of accrued interest, has neither been converted nor paid. During the year ended December 31, 2008 the Company received $15,000 from a non-affiliate as a short term advance. During the first quarter of 2009 an additional $150 was advanced to the Company by the same non-affiliate. On March 1, 2009 the total of $15,150 together with accrued interest of $200 was converted to 61,400 shares of common stock at a conversion price of $.25 per share, the fair value of the stock on the conversion date. During the nine months ended September 2009 this non-affiliate advanced the Company an additional $6,000 to be used for working capital purposes. During the nine months ended September 30,2010, the non-affiliate advanced another $11,300 to the Company. As of September 30, 2010 the $17,300 payable to the non-affiliate was due on demand. (5) Equity Common stock On February 10, 2010 the Company's Directors' were issued 30,000 shares of the Company's common stock valued at $1.00 per share or $30,000. (6) Other - Trademark The Company has learned that a third party in PlaceNameplaceOrange County, PlaceTypeCA publishes a regional magazine under the name "Image Magazine." The publisher of the California-based Image Magazine has registered the trademark "Image Magazine" with the United States Patent and Trademark Office, which trademark registration was issued in 2006. The publisher of the magazine also owns and uses the domain name "imagemagazine.com" Preliminary contact with the 7
principals of the California-based magazine has been made in an effort to resolve the conflicting uses of the trademark. An agreement in principle has been reached to resolve the matter through the execution of a trademark license; however, no assurance can be given that such a license can be finalized. (7) Letter of Intent In June 2010 the Company reached a tentative agreement to acquire JAKK'D Holdings, LLC, and a related entity, for 17,245,000 shares of the Company's common stock. JAKK'D is a producer of alcoholic beverages. The beverage, which is called JAKK'D, is a distilled natural grain spirit that contains natural flavors, certified colors, pure cane sugar and caffeine. Unlike its competitors, JAKK'D does not contain high fructose corn syrup or stimulants such as Taurine, Ginseng and Guarana. The beverages are bottled in 375ml black aluminum "beer bottles" that are distinguishable from other alcoholic beverage products. Each bottle contains 6.6% alcohol by volume and 75mg of caffeine. Initially JAKK'D plans to launch four flavors which will include "Lunatic Lemon", "Black Tea Lemon Honey", "Punched Out Pomegranate Berry", and "Raging Orange". JAKK'D holds the registered trademarks for the these flavors as well as the word "JAKK'D". Completion of the acquisition is subject to the satisfaction of several conditions including, without limitation, the execution of a definitive agreement, the satisfactory completion of due diligence by both parties, and the completion of audited financial statements by JAKK'D. 8
Item 2. Management's Discussion and Analysis of Financial Condition and Plan of Operation The Company was formed in August 2007 to publish and distribute Image Magazine, a monthly guide and entertainment source for the Denver, Colorado area. The Company generated only limited revenue and essentially abandoned its business plan in January 2009. In June 2010 the Company reached a tentative agreement to acquire JAKK'D Holdings, LLC, and a related entity, for 17,245,000 shares of the Company's common stock. JAKK'D is a producer of alcoholic beverages. The beverage, which is called JAKK'D, is a distilled natural grain spirit that contains natural flavors, certified colors, pure cane sugar and caffeine. Unlike its competitors, JAKK'D does not contain high fructose corn syrup or stimulants such as Taurine, Ginseng and Guarana. The beverages are bottled in 375ml black aluminum "beer bottles" that are distinguishable from other alcoholic beverage products. Each bottle contains 6.6% alcohol by volume and 75mg of caffeine. Initially JAKK'D plans to launch four flavors which will include "Lunatic Lemon", "Black Tea Lemon Honey", "Punched Out Pomegranate Berry", and "Raging Orange". JAKK'D holds the registered trademarks for the these flavors as well as the word "JAKK'D". Completion of the acquisition is subject to the satisfaction of several conditions including, without limitation, the execution of a definitive agreement, the satisfactory completion of due diligence by both parties, and the completion of audited financial statements by JAKK'D. There can be no assurance that the transaction will be consummated. As of September 30, 2010 the Company had liabilities of approximately $176,000. The Company plans to pay its liabilities with cash, shares of its common stock, or a combination of both. The Company does not have any agreements or commitments from any third party to provide the Company with any capital. Item 4. Controls and Procedures. (a) The Company maintains a system of controls and procedures designed to ensure that information required to be disclosed in reports filed or submitted under the Securities Exchange Act of 1934, as amended ("1934 Act"), is recorded, processed, summarized and reported, within time periods specified in the SEC's rules and forms and to ensure that information required to be disclosed by the Company in the reports that it files or submits under the 1934 Act, is accumulated and communicated to the Company's management, including its Principal Executive and Financial Officer, as appropriate to allow timely decisions regarding required disclosure. As of September 30, 2010, the Company's Principal Executive and Financial Officer evaluated the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based on that evaluation, the Principal Executive and Financial Officer concluded that the Company's disclosure controls and procedures were effective. 9
(b) Changes in Internal Controls. There were no changes in the Company's internal control over financial reporting during the quarter ended September 30, 2010, that materially affected, or are reasonably likely to materially affect, its internal control over financial reporting. PART II Item 6. Exhibits Exhibits 31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32 Certification pursuant to Section 906 of the Sarbanes-Oxley Act. 10
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. IMAGINE MEDIA, LTD. November 18, 2010 By: /s/ Gregory A. Bloom ------------------------------------ Gregory A. Bloom, Principal Executive and Financial Officer