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EX-32.01 - Elevated Concepts, Inc. | v208822_ex32-01.htm |
EX-31.01 - Elevated Concepts, Inc. | v208822_ex31-01.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C.
20549
FORM
10-Q/A
Amendment
No. 1
x
|
QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For
the quarterly period ended September 30, 2010
¨
|
TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
ACT
|
For the
transition period from ______ to _______
Commission
File Number 0-53631
BLOGGERWAVE
INC.
(Name of
small business issuer in its charter)
Nevada
|
26-3126279
|
|
(State
of incorporation)
|
|
(I.R.S.
Employer Identification
No.)
|
800 West El Camino Real,
Suite 180
Mountain View, CA
94040
(Address
of principal executive offices)
Telephone: (650)
943-2490
Facsimile: (650)
962-1188
(Registrant’s
telephone number)
Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 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 (§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 o No ¨ (Not
required)
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Large
accelerated filer
|
¨
|
Accelerated
filer
|
¨
|
Non-accelerated
filer
|
¨
(Do not check if a smaller
reporting company)
|
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 ¨ No
x
As of
January 21, 2011, there were 135,625,00 shares
of the registrant’s $.001 par value common stock issued and
outstanding.
BLOGGERWAVE
INC. *
TABLE OF CONTENTS
|
Page
|
|
PART I. FINANCIAL
INFORMATION
|
||
ITEM
1.
|
FINANCIAL
STATEMENTS
|
3
|
ITEM
2.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
13
|
ITEM
3.
|
QUALITATIVE
AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK
|
17
|
ITEM
4.
|
CONTROLS
AND PROCEDURES
|
18
|
|
||
PART II. OTHER INFORMATION
|
||
|
||
ITEM
1.
|
LEGAL
PROCEEDINGS
|
19
|
ITEM
1A.
|
RISK
FACTORS
|
19
|
ITEM
2.
|
UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
19
|
ITEM
3.
|
DEFAULTS
UPON SENIOR SECURITIES
|
19
|
ITEM
4.
|
[REMOVED
AND RESERVED]
|
19
|
ITEM
5.
|
OTHER
INFORMATION
|
19
|
ITEM
6.
|
EXHIBITS
|
20
|
Special
Note Regarding Forward-Looking Statements
Information
included in this Form 10-Q contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended (“Securities
Act”), and Section 21E of the Securities Exchange Act of 1934, as amended
(“Exchange Act”). This information may involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance
or achievements of Bloggerwave, Inc. (the “Company”), to be materially different
from future results, performance or achievements expressed or implied by any
forward-looking statements. Forward-looking statements, which involve
assumptions and describe future plans, strategies and expectations of the
Company, are generally identifiable by use of the words “may,” “will,” “should,”
“expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project” or the
negative of these words or other variations on these words or comparable
terminology. These forward-looking statements are based on assumptions that may
be incorrect, and there can be no assurance that these projections included in
these forward-looking statements will come to pass. Actual results of the
Company could differ materially from those expressed or implied by the
forward-looking statements as a result of various factors. Except as required by
applicable laws, the Company has no obligation to update publicly any
forward-looking statements for any reason, even if new information becomes
available or other events occur in the future.
*Please
note that throughout this Quarterly Report, except as otherwise indicated by the
context, references in this report to “Company”, “BLGW”, “we”, “us” and “our”
are references to Bloggerwave, Inc.
PART I: FINANCIAL
INFORMATION
Bloggerwave
Inc.
(formerly
Elevated Concepts, Inc.)
September
30, 2010
Index
|
|
Balance
Sheets
|
4
|
Statements
of Operations
|
5
|
Statements
of Cash Flows
|
6
|
Notes
to the Financial Statements
|
7
|
3
Bloggerwave
Inc.
(formerly
Elevated Concepts, Inc.)
Balance
Sheets
(unaudited)
September 30,
2010
$
|
December 31,
2009
$
|
|||||||
ASSETS
|
||||||||
Current
Assets
|
||||||||
Cash
|
19,226 | 115 | ||||||
Accounts
receivable
|
– | 9,282 | ||||||
Prepaid
expenses
|
64,169 | 2,511 | ||||||
Total
Current Assets
|
83,395 | 11,908 | ||||||
Property
and Equipment, net
|
12,363 | 2,255 | ||||||
Total
Assets
|
95,758 | 14,163 | ||||||
LIABILITIES
AND STOCKHOLDERS’ DEFICIT
|
||||||||
Current
Liabilities
|
||||||||
Accounts
payable
|
26,558 | 6,150 | ||||||
Accrued
liabilities
|
45,340 | 79,612 | ||||||
Deferred
revenues
|
– | 1,330 | ||||||
Due
to related parties
|
129,117 | 81,299 | ||||||
Notes
payable
|
144,890 | 12,000 | ||||||
Convertible
note payable
|
14,151 | – | ||||||
Derivative
liability
|
40,476 | – | ||||||
Total
Liabilities
|
400,532 | 180,391 | ||||||
Stockholders’
Deficit
|
||||||||
Common
Stock
|
||||||||
Authorized:
200,000,000 common shares, with par value $0.001 per share
|
||||||||
Issued
and outstanding: 85,000,000 and 84,700,000 shares,
respectively
|
85,000 | 84,700 | ||||||
Additional
paid in capital
|
(29,233 | ) | (111,733 | ) | ||||
Common
stock issuable
|
35,000 | 35,000 | ||||||
Accumulated
comprehensive income
|
25,328 | 230 | ||||||
Deficit
|
(420,869 | ) | (174,425 | ) | ||||
Total
Stockholders’ Deficit
|
(304,774 | ) | (166,228 | ) | ||||
Total
Liabilities and Stockholders’ Deficit
|
95,758 | 14,163 |
(The
accompanying notes are an integral part of these financial
statements)
4
Bloggerwave
Inc.
(formerly
Elevated Concepts, Inc.)
Statements
of Operations
(unaudited)
For the Three
Months Ended
September 30,
2010
|
For the Three
Months Ended
September 30,
2009
|
For the Nine
Months Ended
September 30,
2010
|
For the Nine
Months Ended
September 30,
2009
|
|||||||||||||
$
|
$
|
$
|
$
|
|||||||||||||
Revenue
|
7,603 | 17,974 | 125,767 | 56,500 | ||||||||||||
Cost
of goods sold
|
2,641 | 2,943 | 37,130 | 11,697 | ||||||||||||
Gross
profit
|
4,962 | 15,031 | 88,637 | 44,803 | ||||||||||||
Operating
Expenses
|
||||||||||||||||
Bad
Debt
|
– | – | 4,758 | – | ||||||||||||
Depreciation
|
1,396 | 344 | 3,169 | 581 | ||||||||||||
General
and Administrative
|
89,839 | 151,861 | 316,556 | 182,805 | ||||||||||||
91,235 | 152,205 | 299,155 | 183,386 | |||||||||||||
Loss
from Operations
|
(86,273 | ) | (137,174 | ) | (235,846 | ) | (138,583 | ) | ||||||||
Other
Expenses
|
||||||||||||||||
Interest
and accretion expense
|
(8,629 | ) | (1,093 | ) | (10,598 | ) | (1,497 | ) | ||||||||
Net
Loss
|
(94,902 | ) | (138,267 | ) | (246,444 | ) | (140,080 | ) | ||||||||
Other
Comprehensive Income (Loss)
|
||||||||||||||||
Foreign
currency translation
|
(16,690 | ) | (5,134 | ) | 25,328 | 670 | ||||||||||
Comprehensive
Income (Loss)
|
(111,592 | ) | (143,401 | ) | (221,116 | ) | (139,410 | ) | ||||||||
Net
Loss Per Share – Basic and Diluted
|
– | – | – | – | ||||||||||||
Weighted
Average Shares Outstanding
|
85,000,000 | 84,700,000 | 84,873,400 | 84,700,000 |
(The
accompanying notes are an integral part of these financial
statements)
5
Bloggerwave
Inc.
(formerly
Elevated Concepts, Inc.)
Statements
of Cash Flows
(unaudited)
For the Nine Months Ended
September 30,
2010
|
For the Nine Months Ended
September 30,
2009
|
|||||||
$
|
$
|
|||||||
Operating
Activities
|
||||||||
Net
loss for the period
|
(246,444 | ) | (140,080 | ) | ||||
Adjustments
to reconcile net loss to net cash provided by operating
activities:
|
||||||||
Depreciation
|
3,169 | 581 | ||||||
Accretion
expense
|
5,209 | – | ||||||
Change
in fair value of derivative liability
|
(582 | ) | – | |||||
Shares
issued for services
|
82,800 | – | ||||||
Net
assets assumed on recapitalization
|
61,145 | |||||||
Changes
in operating assets and liabilities:
|
||||||||
Amounts
receivable
|
9,282 | 6,364 | ||||||
Prepaid
expense
|
(61,658 | ) | 400 | |||||
Accounts
payable
|
20,408 | (9,017 | ) | |||||
Accrued
liabilities
|
(34,272 | ) | 17,704 | |||||
Deferred
revenues
|
(1,330 | ) | (4,925 | ) | ||||
Net
Cash Used In Operating Activities
|
(223,418 | ) | (67,828 | ) | ||||
Investing
Activities
|
||||||||
Purchase
of property and equipment
|
(12,886 | ) | – | |||||
Net
Cash Used In Investing Activities
|
(12,886 | ) | – | |||||
Financing
Activities
|
||||||||
Bank
indebtedness
|
– | 1,290 | ||||||
Proceeds
from note payable
|
182,890 | 12,000 | ||||||
Proceeds
from related parties, net
|
47,818 | 27,525 | ||||||
Proceeds
from issuance of common shares
|
– | 32,800 | ||||||
Net
Cash Provided By Financing Activities
|
230,708 | 73,615 | ||||||
Effect
of exchange rates on cash
|
24,707 | (5,898 | ) | |||||
Increase
(Decrease) in Cash
|
19,111 | (111 | ) | |||||
Cash
– Beginning of Period
|
115 | 111 | ||||||
Cash
– End of Period
|
19,226 | – | ||||||
Supplemental
Disclosures
|
||||||||
Interest
paid
|
– | – | ||||||
Income
tax paid
|
– | – | ||||||
Non-cash
investing and financing activities
|
||||||||
Discount
on convertible note
|
50,000 | – |
(The
accompanying notes are an integral part of these financial
statements)
6
Bloggerwave
Inc.
(formerly
Elevated Concepts, Inc.)
Notes to
the Financial Statements
September
30, 2010
(unaudited)
1. Nature
of Operations and Continuance of Business
Bloggerwave
Inc. (the “Company”) was incorporated in the State of Nevada on December 21,
2006, under the name Elevated Concepts, Inc. The Company originally
was in the business of export and sale of green, eco-friendly, biodegradable,
non-toxic household products and building materials used in housing construction
and home renovation in the emerging markets of Russia, Ukraine and other Eastern
European countries from North American manufacturers.
On
September 9, 2009, the Company entered into an Agreement and Plan of Merger (the
"Merger Agreement") with Bloggerwave ApS., a company incorporated under the laws
of Denmark on August 23, 2007 (“Bloggerwave ApS”). In accordance with
the terms and provisions of the Merger Agreement, the Company: (i) issued an
aggregate of 35,000,000 shares of its common stock to the shareholders of
Bloggerwave on the basis of 350,000 restricted shares of the Company for each
one share held of record by the Bloggerwave Shareholder; and (ii) issued
21,000,000 shares of its common stock to the management of
Bloggerwave. As a result of the Merger Agreement, the Company changed
its name to Bloggerwave Inc. by way of Certificate of Amendment to its Articles
of Incorporation filed with the Nevada Secretary of State on November 19,
2009.
The
business plan of the company is to help its corporate clients harness the power
of the Internet by leveraging the power and credibility of blogs to promote
products and services.
Going
Concern
As at
September 30, 2010, the Company has a working capital deficiency of $317,137 and
has an accumulated deficit of $420,869. The Company's ability to continue as a
going concern is dependent upon the Company's ability to obtain additional
financing and/or achieving a profitable level of operations. These factors raise
substantial doubt regarding the Company’s ability to continue as a going
concern. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
2. Summary
of Significant Accounting Policies
a) Basis
of Presentation
These
financial statements and related notes are presented in accordance with
accounting principles generally accepted in the United States. These financial
statements include the accounts of the Company and its subsidiaries. All
significant intercompany balances and transactions have been eliminated. The
Company’s fiscal year-end is December 31.
b) Use
of Estimates
The
preparation of these financial statements in accordance with United States
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenue and
expenses in the reporting period. The Company regularly evaluates estimates and
assumptions related to the useful life of long-lived assets, stock-based
compensation, and deferred income tax asset valuation allowances.. The Company
bases its estimates and assumptions on current facts, historical experience and
various other factors that it believes to be reasonable under the circumstances,
the results of which form the basis for making judgments about the carrying
values of assets and liabilities. The actual results experienced by the Company
may differ materially and adversely from the Company’s estimates. To the extent
there are material differences between the estimates and the actual results,
future results of operations will be affected.
c) Interim
Financial Statements
These
interim unaudited financial statements have been prepared on the same basis as
the annual financial statements and in the opinion of management, reflect all
adjustments, which include only normal recurring adjustments, necessary to
present fairly the Company’s financial position, results of operations and cash
flows for the periods shown. The results of operations for such periods are not
necessarily indicative of the results expected for a full year or for any future
period.
7
Bloggerwave
Inc.
(formerly
Elevated Concepts, Inc.)
Notes to
the Financial Statements
September
30, 2010
(unaudited)
2. Summary
of Significant Accounting Policies (continued)
d) Cash
and Cash Equivalents
Cash
consists of bank accounts held at financial institutions in the United States
and Denmark. The Company considers all highly liquid instruments with a maturity
of three months or less, at the time of issuance, to be cash equivalents.
e) Accounts
Receivable
Accounts
receivable comprise of receivables from customers recorded on services provided
by the Company. All accounts receivable are net 30 days. Management
reviews the collectability of all accounts receivable on a periodic basis, and
records a provision for doubtful accounts if there is uncertainty as to the
collection of outstanding amounts. As at September 30, 2010, the allowance
for doubtful accounts was $nil (September 30, 2009 - $ nil).
f) Property
and Equipment
Property
and equipment consists of computer equipment and are recorded at cost and is
depreciated using the straight-line method over the estimated useful life of 3
years. Maintenance and repairs are charged to expense as incurred.
g) Long-Lived
Assets
In
accordance with ASC 360, Property Plant and Equipment,
the Company tests long-lived assets or asset groups for recoverability when
events or changes in circumstances indicate that their carrying amount may not
be recoverable. Circumstances which could trigger a review include, but are not
limited to: significant decreases in the market price of the asset; significant
adverse changes in the business climate or legal factors; accumulation of costs
significantly in excess of the amount originally expected for the acquisition or
construction of the asset; current period cash flow or operating losses combined
with a history of losses or a forecast of continuing losses associated with the
use of the asset; and current expectation that the asset will more likely than
not be sold or disposed significantly before the end of its estimated useful
life. Recoverability is assessed based on the carrying amount of the asset and
its fair value which is generally determined based on the sum of the
undiscounted cash flows expected to result from the use and the eventual
disposal of the asset, as well as specific appraisal in certain instances. An
impairment loss is recognized when the carrying amount is not recoverable and
exceeds fair value.
h) Comprehensive
Loss
ASC 220,
Comprehensive Income,
establishes standards for the reporting and display of comprehensive loss and
its components in the financial statements. As at September 30, 2010 and
December 31, 2009, the Company had other comprehensive income (loss) relating to
foreign currency translation.
i) Stock-based
Compensation
The
Company records stock-based compensation in accordance with ASC 718, Compensation – Stock Based
Compensation, using the fair value method. All transactions in which
goods or services are the consideration received for the issuance of equity
instruments are accounted for based on the fair value of the consideration
received or the fair value of the equity instrument issued, whichever is more
reliably measurable.
j) Revenue
Recognition
The
Company recognizes revenue from marketing and promotion services. Revenue
will be recognized only when the price is fixed and determinable, persuasive
evidence of an arrangement exists, the service has been provided, and
collectability is assured. The Company is not exposed to any credit risks
as amounts are prepaid prior to performance of services.
8
Bloggerwave
Inc.
(formerly
Elevated Concepts, Inc.)
Notes to
the Financial Statements
September
30, 2010
(unaudited)
2. Summary
of Significant Accounting Policies (continued)
k) Financial
Instruments
Pursuant
to ASC 820, Fair Value
Measurements and Disclosures and ASC 825, Financial Instruments, an
entity is required to maximize the use of observable inputs and minimize the use
of unobservable inputs when measuring fair value. ASC 820 and 825 establishes a
fair value hierarchy based on the level of independent, objective evidence
surrounding the inputs used to measure fair value. A financial instrument’s
categorization within the fair value hierarchy is based upon the lowest level of
input that is significant to the fair value measurement. ASC 820 and 825
prioritizes the inputs into three levels that may be used to measure fair
value:
Level
1
Level 1
applies to assets or liabilities for which there are quoted prices in active
markets for identical assets or liabilities.
Level
2
Level 2
applies to assets or liabilities for which there are inputs other than quoted
prices that are observable for the asset or liability such as quoted prices for
similar assets or liabilities in active markets; quoted prices for identical
assets or liabilities in markets with insufficient volume or infrequent
transactions (less active markets); or model-derived valuations in which
significant inputs are observable or can be derived principally from, or
corroborated by, observable market data.
Level
3
Level 3
applies to assets or liabilities for which there are unobservable inputs to the
valuation methodology that are significant to the measurement of the fair value
of the assets or liabilities.
The
Company’s financial instruments consist principally of cash, accounts
receivable, accounts payable, accrued liabilities amounts due to related
parties, and loans payable to related parties. Pursuant to ASC 820 and 825, the
fair value of our cash is determined based on “Level 1” inputs, which consist of
quoted prices in active markets for identical assets. We believe that the
recorded values of all of our other financial instruments approximate their
current fair values because of their nature and respective maturity dates or
durations.
l) Foreign
Currency Translation
The
Company’s functional currency is the Danish krone, and its reporting currency is
the United States dollar. Monetary balance sheet items expressed in foreign
currencies are translated into US dollars at the exchange rates in effect at the
balance sheet date. Non-monetary assets and liabilities are translated at
historical rates. Revenues and expenses are translated at average rates for the
period, except for amortization, which is translated on the same basis as the
related asset. Gains and losses arising on translation or settlement of foreign
currency denominated transactions or balances are included in the determination
of income.
m) Derivative
Liability
The
Company records derivatives at their fair values on the date that they meet the
requirements of a derivative instrument and at each subsequent balance sheet
date. Any change in fair value is recorded as non-operating, non-cash
income or expense at each reporting period.
9
Bloggerwave
Inc.
(formerly
Elevated Concepts, Inc.)
Notes to
the Financial Statements
September
30, 2010
(unaudited)
2. Summary
of Significant Accounting Policies (continued)
n) Recently
Issued Accounting Pronouncements
In
October 2009, FASB issued an amendment to the accounting standards related to
the accounting for revenue in arrangements with multiple deliverables including
how the arrangement consideration is allocated among delivered and undelivered
items of the arrangement. Among the amendments, this standard eliminated the use
of the residual method for allocating arrangement considerations and requires an
entity to allocate the overall consideration to each deliverable based on an
estimated selling price of each individual deliverable in the arrangement in the
absence of having vendor-specific objective evidence or other third party
evidence of fair value of the undelivered items. This standard also provides
further guidance on how to determine a separate unit of accounting in a
multiple-deliverable revenue arrangement and expands the disclosure requirements
about the judgments made in applying the estimated selling price method and how
those judgments affect the timing or amount of revenue recognition. This
standard, for which the Company is currently assessing the impact, will become
effective on January 1, 2011.
In
October 2009, the FASB issued an amendment to the accounting standards related
to certain revenue arrangements that include software elements. This standard
clarifies the existing accounting guidance such that tangible products that
contain both software and non-software components that function together to
deliver the product’s essential functionality, shall be excluded from the scope
of the software revenue recognition accounting standards. Accordingly, sales of
these products may fall within the scope of other revenue recognition standards
or may now be within the scope of this standard and may require an allocation of
the arrangement consideration for each element of the arrangement. This
standard, for which the Company is currently assessing the impact, will become
effective on January 1, 2011.
In
January 2010, the FASB issued an amendment to ASC 505, Equity, where entities
that declare dividends to shareholders that may be paid in cash or shares at the
election of the shareholders are considered to be a share issuance that is
reflected prospectively in EPS, and is not accounted for as a stock dividend.
This standard is effective for interim and annual periods ending on or
after December 15, 2009 and is to be applied on a retrospective basis. The
adoption of this standard is not expected to have a significant impact on the
Company’s financial statements.
In
January 2010, the FASB issued an amendment to ASC 820, Fair Value Measurements
and Disclosure, to require reporting entities to separately disclose the amounts
and business rationale for significant transfers in and out of Level 1 and Level
2 fair value measurements and separately present information regarding purchase,
sale, issuance, and settlement of Level 3 fair value measures on a gross basis.
This standard, for which the Company is currently assessing the impact, is
effective for interim and annual reporting periods beginning after December 15,
2009 with the exception of disclosures regarding the purchase, sale, issuance,
and settlement of Level 3 fair value measures which are effective for fiscal
years beginning after December 15, 2010.
In
February 2010, the FASB issued ASU No. 2010-09 “Subsequent Events (ASC Topic
855) “Amendments to Certain Recognition and Disclosure Requirements” (“ASU No.
2010-09”). ASU No. 2010-09 requires an entity that is an SEC filer to evaluate
subsequent events through the date that the financial statements are issued and
removes the requirement for an SEC filer to disclose a date, in both issued and
revised financial statements, through which the filer had evaluated subsequent
events. The adoption did not have an impact on the Company’s financial position
and results of operations.
In
February 2010, the FASB Accounting Standards Update 2010-10 (ASU 2010-10),
“Consolidation (Topic 810): Amendments for Certain Investment Funds.” The
amendments in this Update are effective as of the beginning of a reporting
entity’s first annual period that begins after November 15, 2009 and for interim
periods within that first reporting period. Early application is not
permitted. The Company’s adoption of provisions of ASU 2010-10 did not
have a material effect on the financial position, results of operations or cash
flows.
10
Bloggerwave
Inc.
(formerly
Elevated Concepts, Inc.)
Notes to
the Financial Statements
September
30, 2010
(unaudited)
2. Summary
of Significant Accounting Policies (continued)
n) Recently
Issued Accounting Pronouncements
In March
2010, the FASB (Financial Accounting Standards Board) issued Accounting
Standards Update 2010-11 (ASU 2010-11), “Derivatives and Hedging (Topic 815):
Scope Exception Related to Embedded Credit Derivatives.” The amendments in
this Update are effective for each reporting entity at the beginning of its
first fiscal quarter beginning after June 15, 2010. Early adoption is
permitted at the beginning of each entity’s first fiscal quarter beginning after
issuance of this Update. The Company does not expect the provisions of ASU
2010-11 to have a material effect on the financial position, results of
operations or cash flows of the Company.
The
Company has implemented all new accounting pronouncements that are in effect and
that may impact its financial statements and does not believe that there are any
other new accounting pronouncements that have been issued that might have a
material impact on its financial statements.
o) Reclassifications
Certain
reclassifications have been made to the prior period’s financial statements to
conform to the current period’s presentation.
3. Property
and Equipment
Net Book Value
|
||||||||||||||||
Cost
$
|
Accumulated
Amortization
$
|
September 30,
2010
$
|
December 31, 2009
$
|
|||||||||||||
Computers
and equipment
|
16,752 | 4,389 | 12,363 | 2,255 |
4. Notes
Payable
(a) As
at September 30, 2010, the Company owes $12,000 to a former director and officer
of the Company for working capital purposes. The amounts owing are
unsecured, due interest at 6% per annum, and due on demand. As at
September 30, 2010, the Company recorded accrued interest of $662.
(b) As
at September 30, 2010, the Company owes $120,910 to a non-related party.
The amounts owing are unsecured, due interest at 10% per annum, and due in
one year. As at June 30, 2010, the Company recorded accrued interest of
$3,827.
(c) As
at September 30, 2010, the Company owes $11,980 to a non-related party.
The amounts owing are unsecured, due interest at 10% per annum, and due
within ten days of written notice by the note holder. As at June 30, 2010,
the Company recorded accrued interest of $465.
11
Bloggerwave
Inc.
(formerly
Elevated Concepts, Inc.)
Notes to
the Financial Statements
September
30, 2010
(unaudited)
5. Convertible
Note Payable and Derivative Liability
On July
22, 2010, the Company entered into a note payable with an non-related party for
$50,000. Under the terms of the note, the amount is unsecured, due interest at
8% per annum, and is due on April 26, 2011. If the note is not repaid as at
April 26, 2011, the interest rate would increase to 22% per annum. The note is
convertible into common shares of the Company at a conversion price equal to 60%
of the market price, where market price is defined as the lowest three share
prices in the last ten days of active trading.
In
accordance with ASC 470-20, Debt with Conversions and Other
Options, the Company determined that the existence of a convertibility
feature resulted in a derivative liability. The fair value of the
derivative liability was determined using pricing models which incorporate the
Company’s stock price, credit risk, volatility, and transaction details such as
contractual terms, maturity dates, and future cash flows, as well as assumptions
regarding probabilities of certain outcomes relating to the derivative
liabilities. As at September 30, 2010, the Company recorded the fair value
of the derivative liability of $40,476, accretion expense of $5,209, and
recorded an adjustment for the fair value of the derivative liability of
$582.
6. Related
Party Transactions
As at
September 30, 2010, the Company owes $129,117 (2009 - $81,299) to directors and
officers of the Company for working capital purposes. The amounts owing
are unsecured, non-interest bearing, and due on demand.
7. Common
Stock
(a) On
June 8, 2010, the Company issued 300,000 common shares with a value of $82,800
as part of the terms of the consulting agreement, as noted in Note 8. The
common shares have been valued based on the end-of-day market price on the date
of issuance.
(b) On
January 20, 2010, the Company and its Board of Directors approved a 7-for-1
forward stock split of its issued and outstanding common stock. The effect
of the forward stock split increased the number of issued and outstanding common
stock from 12,100,000 common shares to 84,700,000 common shares and has been
applied on a retroactive basis to the Company’s inception.
8. Commitment
On June
8, 2010, the Company entered into a consulting agreement (the “Agreement”) with
Envisionte, LLC, a limited liability company incorporated in Arizona, to assist
with the Company’s business development for a period of six months from the date
of the Agreement. Under the terms of the Agreement, the Company shall pay
$120,000 and issue 300,000 common shares of the Company (issued as per Note
7(a)).
9. Subsequent
Events
Subsequent
to September 30, 2010, the Company issued 3,500,000 common shares that were
authorized and recorded as common stock issuable as part of the shares to be
issued as part of the acquisition transaction in September
2009.
12
FORWARD-LOOKING
STATEMENTS
This
Management's Discussion and Analysis or Plan of Operation (MD&A) contains
forward-looking statements that involve known and unknown risks, significant
uncertainties and other factors that may cause our actual results, levels of
activity, performance or achievements to be materially different from any future
results, levels of activity, performance or achievements expressed, or implied,
by those forward-looking statements. You can identify forward-looking
statements by the use of the words may, will, should, could, expects, plans,
anticipates, believes, estimates, predicts, intends, potential, proposed, or
continue or the negative of those terms. These statements are only
predictions. In evaluating these statements, you should specifically consider
various factors, including the risk factors outlined below. These factors
may cause our actual results to differ materially from any forward-looking
statements. Although we believe that the exceptions reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. Therefore, actual results
may differ materially and adversely from those expressed in any forward-looking
statements. We undertake no obligation to revise or update publicly any
forward-looking statements for any reason.
RESULTS
OF OPERATIONS
For the three months Ended
September 30, 2010 compared to the three months Ended September 30,
2009
We
incurred operating expenses of $91,235 and $152,205 for the three month periods
ended September 30, 2010 and 2009, respectively. The decrease of $60,970 is a
result of the increase in professional fees and consulting fees incurred with
respect to the acquisition transaction on September 9, 2009.
During
the three months ended September 30, 2010, we recognized a net loss of $94,902
compared to a net loss of $138,267 for the three months ended September 30,
2009. The increase was a result of the additional costs incurred for the
acquisition transaction, as noted above.
For the nine months Ended
September 30, 2010 compared to the nine months Ended September 30,
2009
We
incurred operating expenses of $299,155 and $183,386 for the nine month periods
ended September 30, 2010 and 2009, respectively. The increase of $115,769 is a
result of the increase in overall operations (sales increased by $69,267 or
122.6% from the prior period), as well as the fact that the Company incurred
professional fees with respect to its SEC filings and consulting fees with
respect to further maintenance and revisions to the Company’s website.
During
the nine months ended September 30, 2010, we recognized a net loss of $246,444
compared to a net loss of $140,080 for the nine months ended September 30, 2009.
The increase was a result of the items noted above.
13
Working
Capital
September 30, 2010
$
|
December 31,
2009
$
|
|||||||
Current
Assets
|
83,395 | 11,908 | ||||||
Current
Liabilities
|
400,532 | 180,391 | ||||||
Working
Capital (Deficit)
|
(317,137 | ) | (168,483 | ) |
As at
September 30, 2010, the Company had current assets of $83,395, comprised of cash
of $19,226 and prepayment of future services totaling $64,169. The Company
had current liabilities of $400,532 comprised of accounts payable and accrued
liabilities of $71,898, amounts due to related parties of $129,117, notes
payable of $144,890, and convertible note payable and resulting derivative
liability totaling $54,627.
The
increase in working capital deficit from $168,483 at December 31, 2009 to
$317,137 at September 30, 2010 is attributed to additional debt financing
received from the Company to settle outstanding day-to-day operating costs of
the Company.
The
amount of working capital that we will need to operate for the next twelve
months is approximately $500,000. Of that amount, we estimate that
approximately $75,000 will be needed to pay
for the costs of being a public reporting company. The balance of our
working capital will be used to pay programming costs for a new version of
software and our legal fees and expenses, accounting fees and server costs,
which are basically the Company’s only other expenses. We intend to
obtain working capital from AGS Capital Group, LLC pursuant to an
equity financing agreement that we hope to enter into with AGS Capital
Group.
Cash
Flows
Nine months Ended
September 30,
2010
$
|
Nine months
Ended September
30,
2009
$
|
|||||||
Cash
Flows from (used in) Operating Activities
|
(223,418 | ) |
(67,828_
|
|||||
Cash
Flows from (used in) Investing Activities
|
(12,886 | ) | - | |||||
Cash
Flows from (used in) Financing Activities
|
230,708 | 73,615 | ||||||
Effect
of Exchange Rate Changes on Cash
|
24,707 | (5,898 | ) | |||||
Net
Increase (decrease) in Cash During Period
|
19,111 | (111 | ) |
During
the nine months ended September 30, 2010, the Company used cash of $223,418 for
operating activities compared to $67,828 for the nine months ended September 30,
2009. The increase in the cash used for operating activities was
attributed to the fact that the Company increased its level of operating
activity during the current year as a significant amount of time was spent in
the prior year relating to the acquisition transaction that finalized on
September 9, 2009.
14
During
the nine months ended September 30, 2010, the Company used cash of $12,886 for
the purchase of additional property and equipment compared to no investing
activities during the nine months ended September 30, 2009.
During
the nine months ended September 30, 2010, the Company received cash of $230,708
from financing activities compared to $73,615 during the nine months ended
September 30, 2009. The increase in cash from financing activities is
attributed to proceeds of $50,000 received from the convertible note payable,
bearing interest at 8% per annum and due in April 2011, proceeds of $132,890
from various notes payable to non-related party of which interest ranges from
8-10% per annum and are due on demand, as well as proceeds of $47,818 from
related parties for financing of the Company’s day-to-day operations. In
the prior year, the Company received $32,800 from the issuance of 28,700,000
common shares, $12,000 from a note payable from a former director of the
Company, and $27,595 from related parties.
Our
auditors have expressed their doubt about our ability to continue as a going
concern unless we are able to generate profitable operations.
OFF-BALANCE
SHEET ARRANGEMENTS
We do not
have any off-balance sheet arrangements that have or are reasonably likely to
have a current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that are material to our
investors.
Critical Accounting
Policies
Use
of Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes for the reporting period. Significant areas
requiring the use of management estimates relate to the valuation of its mineral
leases and claims and our ability to obtain final government permission to
complete the project.
Stock-Based
Compensation
The
Company records stock-based compensation in accordance with ASC 718, Compensation – Stock
Compensation, using the fair value method. All transactions in which
goods or services are the consideration received for the issuance of equity
instruments are accounted for based on the fair value of the consideration
received or the fair value of the equity instrument issued, whichever is more
reliably measurable. Equity instruments issued to employees and the cost of the
services received as consideration are measured and recognized based on the fair
value of the equity instruments issued.
Recent Accounting
Pronouncements
In March
2010, the FASB (Financial Accounting Standards Board) issued Accounting
Standards Update 2010-11 (ASU 2010-11), “Derivatives and Hedging (Topic 815):
Scope Exception Related to Embedded Credit Derivatives.” The amendments in
this Update are effective for each reporting entity at the beginning of its
first fiscal quarter beginning after June 15, 2010. Early adoption is
permitted at the beginning of each entity’s first fiscal quarter beginning after
issuance of this Update. The Company does not expect the provisions of ASU
2010-11 to have a material effect on the financial position, results of
operations or cash flows of the Company.
15
In
February 2010, the FASB Accounting Standards Update 2010-10 (ASU 2010-10),
“Consolidation (Topic 810): Amendments for Certain Investment Funds.” The
amendments in this Update are effective as of the beginning of a reporting
entity’s first annual period that begins after November 15, 2009 and for interim
periods within that first reporting period. Early application is not
permitted. The Company’s adoption of provisions of ASU 2010-10 did not
have a material effect on the financial position, results of operations or cash
flows.
In
February 2010, the FASB issued ASU No. 2010-09 “Subsequent Events (ASC Topic
855) “Amendments to Certain Recognition and Disclosure Requirements” (“ASU No.
2010-09”). ASU No. 2010-09 requires an entity that is an SEC filer to evaluate
subsequent events through the date that the financial statements are issued and
removes the requirement for an SEC filer to disclose a date, in both issued and
revised financial statements, through which the filer had evaluated subsequent
events. The adoption did not have an impact on the Company’s financial position
and results of operations.
In
January 2010, the FASB issued an amendment to ASC 820, Fair Value Measurements
and Disclosure, to require reporting entities to separately disclose the amounts
and business rationale for significant transfers in and out of Level 1 and Level
2 fair value measurements and separately present information regarding purchase,
sale, issuance, and settlement of Level 3 fair value measures on a gross basis.
This standard, for which the Company is currently assessing the impact, is
effective for interim and annual reporting periods beginning after December 15,
2009 with the exception of disclosures regarding the purchase, sale, issuance,
and settlement of Level 3 fair value measures which are effective for fiscal
years beginning after December 15, 2010.
In
January 2010, the FASB issued an amendment to ASC 505, Equity, where entities
that declare dividends to shareholders that may be paid in cash or shares at the
election of the shareholders are considered to be a share issuance that is
reflected prospectively in EPS, and is not accounted for as a stock dividend.
This standard is effective for interim and annual periods ending on or
after December 15, 2009 and is to be applied on a retrospective basis. The
adoption of this standard is not expected to have a significant impact on the
Company’s financial statements.
In
October 2009, the FASB issued an amendment to the accounting standards related
to certain revenue arrangements that include software elements. This standard
clarifies the existing accounting guidance such that tangible products that
contain both software and non-software components that function together to
deliver the product’s essential functionality, shall be excluded from the scope
of the software revenue recognition accounting standards. Accordingly, sales of
these products may fall within the scope of other revenue recognition standards
or may now be within the scope of this standard and may require an allocation of
the arrangement consideration for each element of the arrangement. This standard
is effective commencing January 1, 2011 and is not expected to have a material
effect on the Company’s financial statements.
16
In
October 2009, the FASB issued an amendment to the accounting standards related
to the accounting for revenue in arrangements with multiple deliverables
including how the arrangement consideration is allocated among delivered and
undelivered items of the arrangement. Among the amendments, this standard
eliminated the use of the residual method for allocating arrangement
considerations and requires an entity to allocate the overall consideration to
each deliverable based on an estimated selling price of each individual
deliverable in the arrangement in the absence of having vendor-specific
objective evidence or other third party evidence of fair value of the
undelivered items. This standard also provides further guidance on how to
determine a separate unit of accounting in a multiple-deliverable revenue
arrangement and expands the disclosure requirements about the judgments made in
applying the estimated selling price method and how those judgments affect the
timing or amount of revenue recognition. This standard is effective commencing
January 1, 2011 and is not expected to have a material effect on the Company’s
financial statements.
In August
2009, the FASB issued an amendment to the accounting standards related to the
measurement of liabilities that are recognized or disclosed at fair value on a
recurring basis. This standard clarifies how a company should measure the fair
value of liabilities and that restrictions preventing the transfer of a
liability should not be considered as a factor in the measurement of liabilities
within the scope of this standard. This standard is effective for the Company on
October 1, 2009 and is not expected to have a material effect on the Company’s
financial statements.
Going
Concern
We have
not attained profitable operations and are dependent upon obtaining financing to
pursue any extensive acquisitions and activities. For these reasons, our
auditors stated in their report on our audited financial statements that they
have substantial doubt that we will be able to continue as a going concern
without further financing.
Future
Financings
We will
continue to rely on equity sales of our common shares in order to continue to
fund our business operations. Issuances of additional shares will result in
dilution to existing stockholders. There is no assurance that we will achieve
any additional sales of the equity securities or arrange for debt or other
financing to fund planned acquisitions and exploration activities.
Off-Balance
Sheet Arrangements
We have
no significant off-balance sheet arrangements that have or are reasonably likely
to have a current or future effect on our financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that are material to
stockholders.
ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a
smaller reporting company as defined by Rule 12b-2 of the Securities Exchange
Act of 1934 and are not required to provide the information under this
item.
17
ITEM
4. CONTROLS AND PROCEDURES
Disclosure
Controls and Procedures
Under the
supervision and with the participation of our principal executive officer and
principal financial officer, we conducted an evaluation of the effectiveness of
the design and operation of our disclosure controls and procedures, as defined
in Rule 13a-15(e) promulgated under the Exchange Act, as of September 30, 2010
(the "Evaluation Date"). Based on this evaluation, our principal executive
officer and principal financial officer concluded as of the Evaluation Date that
our disclosure controls and procedures were not effective as of September 30,
2010 in light of the material weaknesses found in our internal controls over
financial reporting, described below. Please refer to our Annual Report on Form
10-K as filed with the SEC on April 1, 2010, for a complete discussion relating
to the foregoing evaluation of Disclosures and Procedures.
Our
management, including our chief executive officer and chief financial officer,
does not expect that our disclosure controls and procedures or our internal
controls will prevent all error and all fraud. A control system, no matter how
well conceived and operated, can provide only reasonable, not absolute,
assurance that the objectives of the control system are met. Further, the design
of a control system must reflect the fact that there are resource constraints
and the benefits of controls must be considered relative to their costs. Due to
the inherent limitations in all control systems, no evaluation of controls can
provide absolute assurance that all control issues and instances of fraud, if
any, within the Company have been detected.
Management's
Report on Internal Control over Financial Reporting
Our
management is responsible for establishing and maintaining adequate control over
financial reporting (as defined in Rule 13a-15(f) promulgated under the Exchange
Act. Our management assessed the effectiveness of our internal control over
financial reporting as of September 30, 2010. In making this assessment, our
management used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission ("COSO") in Internal Control-Integrated
Framework.
In their
assessment of the effectiveness of internal control over financial reporting as
of September 30, 2010, the Company determined that there were control
deficiencies that constituted material weaknesses, as described below: i) the
Board of Directors did not currently have any independent members and no
director qualifies as an audit committee financial expert as defined in Item
407(d)(5)(ii) of Regulation S-K, and ii) a failure to maintain appropriate cash
controls. As a result of the material weaknesses described above, management has
concluded that the Company did not maintain effective internal control over
financial reporting as of September 30, 2010. Please refer to our Annual Report
on Form 10-K as filed with the SEC on April 1, 2010, for a complete discussion
relating to the foregoing evaluation of Internal Control over Financial
Reporting.
Changes
in Internal Control over Financial Reporting
Our
management has also evaluated our internal control over financial reporting, and
there have been no significant changes in our internal controls or in other
factors that could significantly affect those controls subsequent to the date of
our last evaluation.
The
Company is not required by current SEC rules to include, and does not include,
an auditor's attestation report. The Company's registered public accounting firm
has not attested to Management's reports on the Company's internal control over
financial reporting.
18
PART II - OTHER
INFORMATION
ITEM
1. LEGAL PROCEEDINGS.
We know
of no material, existing or pending legal proceedings against our company, nor
are we involved as a plaintiff in any material proceeding or pending litigation.
There are no proceedings in which our director, officer or any affiliates, or
any registered or beneficial shareholder, is an adverse party or has a material
interest adverse to our interest.
ITEM
1A. RISK FACTORS.
We are a
smaller reporting company as defined by Rule 12b-2 of the Securities Exchange
Act of 1934 and are not required to provide the information under this
item.
ITEM
2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
1. Quarterly
Issuances:
During
the quarter, we did not issue any unregistered securities other than as
previously disclosed.
2. Subsequent
Issuances:
Subsequent
to the quarter, we did not issue any unregistered securities other than as
previously disclosed.
ITEM
3. DEFAULTS UPON SENIOR SECURITIES.
None
ITEM
4. [REMOVED AND RESERVED]
ITEM
5. OTHER INFORMATION.
None
19
ITEM
6. EXHIBITS
The
following exhibits are filed with this Quarterly Report on Form
10-Q/A:
Exhibit
|
||||
Number
|
Description of Exhibit
|
Filing
|
||
3.01
|
Articles
of Incorporation
|
Incorporated
by reference to our Registration Statement Form S-1 filed with the SEC on
October 14, 2008.
|
||
3.01a
|
Restated
Articles of Incorporation
|
Filed
with the SEC on November 19, 2010 as part of our Annual Report on Form
10-K/A.
|
||
3.02
|
Bylaws
|
Incorporated
by reference to our Registration Statement Form S-1 filed with the SEC on
October 14, 2008.
|
||
10.01
|
Authorized
Reseller Agreement between Elevated Concepts Inc. and Salomatkin &
Partners dated April 16, 2009.
|
Filed
with the SEC on April 20, 2009 as part of our Current Report on Form
8-K
|
||
10.02
|
Merger
Agreement between Elevated Concepts, Inc. and Bloggerwave, Inc. dated
September 9, 2009.
|
Filed
with the SEC on September 14, 2009 as part of our Current Report on Form
8-K.
|
||
10.03
|
Advisory
Board Member Agreement between Bloggerwave, Inc. and Peter Hewitt dated
January 22, 2010.
|
Filed
with the SEC on February 11, 2010 as part of our Current Report on Form
8-K.
|
||
10.04
|
Advisory
Board Member Agreement between Bloggerwave, Inc. and Midstone Consulting,
Ltd. dated January 22, 2010.
|
Filed
with the SEC on February 11, 2010 as part of our Current Report on Form
8-K.
|
||
10.05
|
Consulting
Agreement between Bloggerwave, Inc and Envisionte, LLC dated June 8,
2010.
|
Filed
with the SEC on June 14, 2010 as part of our Current Report on Form
8-K.
|
||
10.06
|
Promissory
Note between Bloggerwave, Inc. and Tarantino Holdings Inc. dated August 5,
2010.
|
Incorporated
by reference to our Form 10-Q for the fiscal quarter ended September 30,
2010 filed November 22,2010.
|
||
10.07
|
Promissory
Note between Bloggerwave, Inc. and Christian Macholdt dated August 10,
2010.
|
Incorporated
by reference to our Form 10-Q for the fiscal quarter ended September 30,
2010 filed November 22,2010.
|
||
10.08
|
Amended
Advisory Board Agreement between Bloggerwave, Inc. and Peter Hewitt dated
November ___, 2010.
|
Incorporated
by reference to our Form 10-Q for the fiscal quarter ended September 30,
2010 filed November 22,2010.
|
||
10.09
|
Amended
Advisory Board Agreement between Bloggerwave, Inc. and Midstone Consulting
Ltd. dated November ___, 2010.
|
Incorporated
by reference to our Form 10-Q for the fiscal quarter ended September 30,
2010 filed November 22,2010.
|
||
14.01
|
Code
of Ethics
|
Filed
with the SEC on December 7, 2009 as part of our Current Report on Form
8-K.
|
||
16.01
|
Letter
from Davis Accounting Group, P.C., dated April 29, 2010, to the Securities
and Exchange Commission.
|
Filed
with the SEC on April 9, 2010 as part of our Current Report on Form
8-K.
|
||
31.01
|
Certification
of Principal Executive Officer and Principal Financial Officer Pursuant to
Rule 13a-14 of the Exchange Act of 1934
|
Filed
herewith.
|
||
32.01
|
Certification
of Principal Executive Officer and Principal Financial Officer Pursuant to
Section 906 of the Sarbanes-Oxley Act
|
Filed
herewith.
|
20
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.
BLOGGERWAVE
INC.
Dated:
January 24, 2011
By:
|
/s/ Ulrik Svane Thomsen
|
ULRIK
SVANE THOMSEN
|
|
President,
Chief Executive Officer and Chief Financial
Officer
|
21