Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended September 30, 2010
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to ____________
Commission file number: 0-53574
MMAX Media, Inc.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Nevada 20-4959207
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4600 Greenville Ave., Suite 240, Dallas, TX 75206
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(Address of principal executive offices)(Zip Code)
Issuer's telephone number, including area code: (972) 719-0170
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock
Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. [ ] Yes [X] No
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. [ ] Yes [X] No
Indicate by checkmark whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 checkmark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [X]
Indicate by checkmark 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 [X] Smaller reporting company
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act).
Yes[ ] No [X]
Aggregate market value of the voting common equity held by non-affiliates
computed by reference to the price at which the common equity was sold as of
January 28, 2011: $1,276,371
Indicate the number of shares outstanding of each of the registrant's classes
of common stock, as of the latest practicable date:
As of January 28, 2011, the registrant's outstanding common stock consisted
of 12,403,374 shares, $0.001 par value, authorized - 195,000,000 common
voting shares. The registrant's outstanding convertible preferred stock
consisted of 638,602 shares, $0.001 par value, authorized - 5,000,000
preferred shares.
DOCUMENTS INCORPORATED BY REFERENCE:
None.
Transitional Small Business Disclosure Format: Yes [ ] No [X]
INDEX
Title Page
ITEM 1. BUSINESS 5
ITEM 1A RISK FACTORS 10
ITEM 2. PROPERTIES 18
ITEM 3. LEGAL PROCEEDINGS 18
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 18
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 19
ITEM 6. SELECTED FINANCIAL DATA 19
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF 20
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 27
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON 28
ACCOUNTING AND FINANCIAL DISCLOSURE
ITEM 9A. CONTROLS AND PROCEDURES 28
ITEM 10. DIRECTOR, EXECUTIVE OFFICER AND CORPORATE GOVERNANCE 32
ITEM 11. EXECUTIVE COMPENSATION 37
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, 38
MANAGEMENT AND RELATED STOCKHOLDER MATTERS
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 40
AND DIRECTOR INDEPENDENCE
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES 41
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES 42
2
FORWARD-LOOKING STATEMENTS
This document contains "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. All statements other
than statements of historical fact are "forward-looking statements" for
purposes of federal and state securities laws, including, but not limited to,
any projections of earnings, revenue or other financial items; any statements
of the plans, strategies and objections of management for future operations;
any statements concerning proposed new services or developments; any
statements regarding future economic conditions or performance; any statements
or belief; and any statements of assumptions underlying any of the foregoing.
Forward-looking statements may include the words "may", "could", "estimate",
"intend", "continue", "believe", "expect" or "anticipate" or other similar
words. These forward-looking statements present our estimates and assumptions
only as of the date of this report. Accordingly, readers are cautioned not to
place undue reliance on forward-looking statements, which speak only as of the
dates on which they are made. We do not undertake to update forward-looking
statements to reflect the impact of circumstances or events that arise after
the dates they are made. You should, however, consult further disclosures we
make in future filings of our Annual Report on Form 10-K, Quarterly Reports on
Form 10-Q and Current Reports on Form 8-K.
Although we believe that the expectations reflected in any of our forward-
looking statements are reasonable, actual results could differ materially from
those projected or assumed in any of our forward-looking statements. Our future
financial condition and results of operations, as well as any forward-looking
statements, are subject to change and inherent risks and uncertainties. The
factors impacting these risks and uncertainties include, but are not limited
to:
o inability to raise additional financing for working capital and product
development;
o inability to process loans for mortgage companies;
o deterioration in general or regional economic, market and political
conditions;
o the fact that our accounting policies and methods are fundamental to how we
report our financial condition and results of operations, and they may
require management to make estimates about matters that are inherently
uncertain;
o adverse state or federal legislation or regulation that increases the costs
of compliance, or adverse findings by a regulator with respect to existing
operations;
o changes in U.S. GAAP or in the legal, regulatory and legislative
environments in the markets in which we operate;
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o inability to efficiently manage our operations;
o inability to achieve future operating results;
o our ability to recruit and hire key employees;
o the inability of management to effectively implement our strategies and
business plans; and
o the other risks and uncertainties detailed in this report.
In this form 10-K references to "MMAX Media, Inc.", "the
Company", "we", "us", and "our" refer to MMAX Media, Inc.
AVAILABLE INFORMATION
We file annual, quarterly and special reports and other information with the
SEC. You can read these SEC filings and reports over the Internet at the SEC's
website at www.sec.gov. You can also obtain copies of the documents at
prescribed rates by writing to the Public Reference Section of the SEC at 100 F
Street, NE, Washington, DC 20549 on official business days between the hours of
10:00 am and 3:00 pm. Please call the SEC at (800) SEC-0330 for further
information on the operations of the public reference facilities. We will
provide a copy of our annual report to security holders, including audited
financial statements, at no charge upon receipt to of a written request to us
at MMAX Media, Inc., 4600 Greenville Ave., Suite 240, Dallas, TX 75206.
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PART I
ITEM 1. BUSINESS
History and Organization
------------------------
MMAX Media, Inc. ("the Company") was formed on May 30, 2006 as Nevada
Processing Solutions. On February 1, 2010, the Company entered into an
assignment agreement that assigned to the Company all contractual rights
previously held by three entities, one of which is a shareholder, relating
to a television "Distribution Agreement" with HollywoodLaundromat.Com, Inc.,
a California corporation. At the time of the assignment to the Company, the
contract had not been completed and no payments or other monetary benefit
had been received by any party, thus the contract is deemed a contingent or
prospective right to benefit from the future commercialization of the MMAX
Assets and not based on any ongoing or current business operations. The
Distribution Agreement grants distribution rights to all of the Company's
television series and video assets to HollywoodLaundromat.Com, Inc. The
terms of the Distribution Agreement require the distributor,
HollywoodLaundromat.Com, Inc., to pay a variable percentage of all
proceeds derived from television syndication of the Company's video
assets, based on the market and language of the programming. Currently,
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. To date, the show has not generated revenues for the Company. On
April 15, 2010, the Company changed its name to MMax Media, Inc., to better
reflect is business focus.
Our Business
------------
On February 1, 2010, MMAX Media, Inc. changed its business plan based on the
acquisition of a video library of raw and edited television programs and
related intellectual property such as brands and trademarks for the video
content. The intellectual property assets were acquired with the intent to
change our business plan and operate as a media production and distribution
company with our main production emphasis being Spanish language mixed
martial arts event promotion and television programming. The new business
model adopted by the Company, with the intended commercialization of the
acquired television programming and related intellectual property rights, is
to promote live mixed martial arts combat events throughout Latin America and
primarily in Mexico, with fighters being drawn from Spanish speaking
countries, including the United States. Similar to the business model of the
UFC (Ultimate Fighting Championship) and its related television reality
program, TUF (The Ultimate Fighter), we intend to promote live events and
develop a comprehensive video catalog of filmed events which are then edited
and produced into television programming for consumption by Spanish speaking
television networks throughout the Spanish speaking world. At the current
time, we have been unable to capitalize on the assets due, in part, to the
political and social unrest in the country of Mexico. We have been unable to
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proceed with new opportunities in Mexico based on the concern of risk to
personnel and violence in the country in what were once considered relatively
safe tourist areas. Included in the assets being acquired is a reality
program filmed in Cuernavaca, Mexico in March, 2009. The reality program,
entitled "Campeon Mmaximo" or "Mmaximum Champion" in English, requires
post-production completion and awaits the final event, which we had intended
to film as a live championship event in Mexico, sometime in 2010. We have
been unable to proceed with new opportunities in Mexico based on the concern
of risk to personnel and violence in the country in what were once
considered relatively safe tourist areas. Also included in the video assets
is video footage and content for 39 one hour television episodes (three
seasons of programming) under the title "MMAX Fights" which is an edited
program based on over a dozen live MMA events filmed in various cities in
Mexico, in Spanish and featuring Latin American fighters and former UFC
competitors.
Our offices are currently located at 4600 Greenville Ave., Suite 240, Dallas,
TX 75206. Our telephone number is (972) 719-0170.
Business Strategy
-----------------
The new business model adopted by the Company, with the intended
commercialization of the acquired television programming and related
intellectual property rights, is to promote live mixed martial arts combat
events throughout Latin America and primarily in Mexico, with fighters being
drawn from Spanish speaking countries, including the United States. Similar
to the business model of the UFC (Ultimate Fighting Championship) and its
related television reality program, TUF (The Ultimate Fighter), we intend to
promote live events and develop a comprehensive video catalog of filmed
events which are then edited and produced into television programming for
consumption by Spanish speaking television networks throughout the Spanish
speaking world. Included in the assets being acquired is a reality program
filmed in Cuernavaca, Mexico in March, 2009. The reality program, entitled
"Campeon Mmaximo" or "Mmaximum Champion" in English, requires
post-production completion and awaits the final event, which we intended to
film as a live championship event in Mexico, some time in 2010. This final
event has been delayed indefinitely. Also included in the video assets is
video footage and content for 39 one hour television episodes (three seasons
of programming) under the title "MMAX Fights" which is an edited program
based on over a dozen live MMA events filmed in various cities in Mexico,
in Spanish and featuring Latin American fighters and former UFC
competitors.
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Future Financing
----------------
Management anticipates continuing to rely on equity sales of its common
shares in order to continue to fund its business operations. Issuances of
additional shares will result in dilution to our existing shareholders.
There are no assurances that the Company will achieve any sales of its
equity securities or arrange for debt or other financing to fund its
business plan.
The Company has an ongoing offering and recently raised $100,000 in an
offering of its common stock. In the event the Company is unable to raise
additional funds, the Company 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 management cannot make any assurances that any
financing can be obtained. If management is unable to raise these funds,
the Company will not be able to implement any of its proposed business
activities and may be forced to cease operations.
Competition
-----------
The entertainment industry is intensely competitive, rapidly evolving and
subject to constant technological change. We expect competition to increase
in the future. As a media communications provider in the entertainment
industry, we compete with several dominant providers. We expect that new
competitors are likely to enter the entertainment market and attempt to
market services similar to MMax Media's products, which would result in
greater competition for us. The ability of MMax Media to compete
effectively in the entertainment industry will depend upon its ability to
provide high quality packages at prices generally competitive with, or
lower than, those charged by its competitors. Certain competitors
dominate the entertainment industry and have the financial resources to
enable them to withstand substantial price competition, which is expected
to increase significantly, and there can be no assurance that we will be
able to compete successfully in the future. Moreover, there can be no
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assurance that MMax Media's competitors will not be better
situated to negotiate contracts which are more favorable than contracts
negotiated by MMax Media. In addition, there can be no assurance that
competition from existing or new competitors or a decrease in the price
charged the major providers or other competitors would not materially
adversely affect us.
MMAX Media, Inc.'s Funding Requirements
---------------------------------------
We do not have sufficient capital to fully execute our business plan.
Management anticipates MMAX Media, Inc. will require significant additional
funds to move its business plan forward. There is no assurance that we
will have revenue in the future or that we will be able to secure the
necessary funding to develop our business. Without additional funding, it
is most likely that our business model will fail, and we shall be forced to
cease operations.
Future funding could result in potentially dilutive issuances of equity
securities, the incurrence of debt, contingent liabilities and/or
amortization expenses related to goodwill and other intangible assets, which
could materially adversely affect the Company's business, results of
operations and financial condition. Any future acquisitions of other
businesses, technologies, services or product(s) might require the Company to
obtain additional equity or debt financing, which might not be available on
terms favorable to the Company, or at all, and such financing, if available,
might be dilutive.
Patent, Trademark, License and Franchise Restrictions and Contractual
Obligations and Concessions
---------------------------------------------------------------------
The degree of future protection for our media products is uncertain. There
are numerous costs, risks and uncertainties that the Company faces with
respect to obtaining and maintaining proprietary rights. The Company may
not be able to obtain meaningful protection for its future developments.
To date, the Company does not have any pending patent or trademark
applications with the U.S. Patent and Trademark Office or any agency with
regard to the above-referenced intellectual property assets.
In connection with the issued or trademarks, there can be no assurance that
such trademarks will provide the Company with significant competitive
advantages, or that challenges will not be instituted against the validity
or enforceability of any trademarks sublicensed to the Company or, if
instituted, that such challenges will not be successful. To date, there
have been no interruptions in our business as the result of any claim of
infringement. However, no assurance can be given that the Company will not
be adversely affected by the assertion of intellectual property rights
belonging to others. The cost of litigation to uphold the validity of a
trademark and prevent infringement can be very substantial and may prove to
be beyond our financial means even if the Company could otherwise prevail in
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such litigation. Furthermore, there can be no assurance that others will not
independently develop similar designs or technologies, duplicate our designs
and technologies or design around aspects of our technology, or that the
designs and technologies will not be found to infringe on the patents,
trademarks or other rights owned by third parties. The effects of any such
assertions could include requiring the Company to alter existing trademarks
or products, withdraw existing products, including the products delaying or
preventing the introduction of products or forcing the Company to pay
damages if the products have been introduced.
Research and Development Activities and Costs
---------------------------------------------
MMAX Media, Inc. did not incur any research and development costs
for the years ended September 30, 2010 and 2009, and has no plans to
undertake any research and development activities during the next year of
operations.
Compliance with Environmental Laws
----------------------------------
We are not aware of any environmental laws that have been enacted, nor are we
aware of any such laws being contemplated for the future, that impact issues
specific to our business. In our industry, environmental laws are anticipated
to apply directly to the owners and operators of companies. They do not apply
to companies or individuals providing consulting services, unless they have
been engaged to consult on environmental matters. We are not planning to
provide environmental consulting services.
Employees
---------
We have no full time employees at this time. Our CEO, Tommy Habeeb, works
on an as needed basis for the Company. All functions including development,
strategy, negotiations and clerical work is being provided by our sole
officer on a voluntary basis, without compensation.
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Item 1A. Risk Factors.
Risk Factors Relating to Our Company
------------------------------------
1. SINCE WE ARE A DEVELOPMENT COMPANY, AND WE HAVE NOT GENERATED ANY
REVENUES, THERE ARE NO ASSURANCE THAT OUR BUSINESS PLAN WILL EVER BE
SUCCESSFUL.
Our company was incorporated on May 30, 2006. We have realized no revenues
since our inception. We have no solid 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 distribution.
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
annual report, at September 30, 2010 we had working capital of $2,231,
$254,534 in prepaid assets, $69,735 in current liabilities, and stockholders'
equity of approximately $189,211. In addition, we had a net loss of
approximately $(2,551,657) for the period May 30, 2006 (inception) to
September 30, 2010.
These factors raise substantial doubt that we will be able to continue
operations as a going concern, and 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,
2010. 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.
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3. WE EXPECT LOSSES IN THE FUTURE BECAUSE WE HAVE GENERATED NO REVENUE.
We have generated no revenues, we expect losses over the next eighteen
(18) 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.
Tommy Habeeb, 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.
Tommy Habeeb, the CEO 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
and fulfilling the reporting requirements of a public
company all fall upon Mr. Habeeb. We have not formulated a plan to resolve
any possible conflict of interest with his other business activities.
Mr. Habeeb intends to limit his role in his other business activities and
devote more of his time to MMAX Media, 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 significant
additional funding to finance 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.
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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, 2010, the Company had working cash and equivalents of
$2,231. Subsequently the Company has raised one hundred thousand dollars
($100,000) in order advance its business plan and continue its operations.
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.
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 raise substantial doubt about our ability to
continue as a going concern. Our independent auditors currently included an
explanatory paragraph in their report on our financial statements regarding
concerns about our ability to continue as a going concern.
7. WE MAY NOT BE ABLE TO COMPETE WITH OTHER COMPANIES WHO HAVE GREATER
RESOURCES AND EXPERIENCE THAN WE DO.
The television industry is highly competitive, and subject to rapid
change. We do not have the resources to compete with the large production
companies. Competition by existing and 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 expand our business as we may never be able to
successfully execute our business plan. Further, MMAX Media, Inc.
cannot be assured that it will be able to compete successfully
against present or future competitors or that the competitive pressure it may
face will not force it to cease operations.
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8. CONFLICTS OF INTEREST FACED BY THE TOP MANAGEMENT OF MMAX MEDIA, INC.
MAY JEOPARDIZE THE BUSINESS CONTINUITY OF MMAX MEDIA, INC.
The operations of MMAX Media, Inc. depend substantially on the skills and
experience of Tommy Habeeb. Mr. Habeeb 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 MMAX
Media, Inc. and his other business interests. MMAX Media, Inc. has not
formulated a policy for the resolution of such conflicts.
9. IF OUR MARKETING EFFORTS ARE NOT EFFECTIVE, OUR SERVICES MAY NOT ACHIEVE
THE BROAD RECOGNITION NECESSARY TO OUR SUCCESS IN THE TARGET TERRITORIES.
We may not be able to build successfully recognition and favorable perception
of our services in a manner that will enable us to expand our business in a
cost-effective or timely manner. If our services will not be received
favorably by our customers, our reputation could be damaged. The lack of
market acceptance of our services will not allow us to generate satisfactory
net sales and could harm our business.
10. 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, and costly for us to develop 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. If we are unable to comply with these requirements
of the Sarbanes-Oxley Act, we may not be able to obtain the independent
accountant certifications that the Sarbanes-Oxley Act requires of publicly
traded companies.
If we fail to comply in a timely manner with the requirements of Section 404
of the Sarbanes-Oxley Act regarding internal control over financial reporting
or to remedy any material weaknesses in our internal controls that we may
identify, such failure could result in material misstatements in our
financial statements, cause investors to lose confidence in our reported
financial information and have a negative effect on the trading price of our
common stock.
In addition, in connection with our on-going assessment of the effectiveness
of our internal control over financial reporting, we 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.
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
14
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 reporting in the future. Any failure to complete 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 encountered 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 cause
investors to lose confidence in our reported financial information, which
could have a negative effect on the trading price of our common stock.
11. RISKS ASSOCIATED WITH OPERATING IN MEXICO.
Recent political and social instability in the Country of Mexico, especially
in those areas previously considered "safe tourist areas" has impeded our
ability to conduct business in Mexico and throughout Latin America and has
caused us to alter plans and events in Mexico, including canceling planned
work and appearances.
Risks Relating To Our Common Shares
-----------------------------------
12. WE MAY, IN THE FUTURE, ISSUE ADDITIONAL COMMON SHARES, WHICH WOULD REDUCE
INVESTORS' PERCENT OF OWNERSHIP AND MAY DILUTE OUR SHARE VALUE.
Our Articles of Incorporation authorize the issuance of 195,000,000 shares of
common stock and 5,000,000 preferred shares. The future issuance of common
stock may result in substantial dilution in the percentage of our common
stock held by our then existing shareholders. We may value any common stock
issued in the future on an arbitrary basis. The issuance of common stock for
future services or acquisitions or other corporate actions may have the
effect of diluting the value of the shares held by our investors, and might
have an adverse effect on any trading market for our common stock.
13. 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.
The Securities and Exchange Commission has adopted Rule 15g-9 which
establishes the definition of a "penny stock," for the purposes relevant to
us, as any equity security that has a market price of less than $5.00 per
share or with an exercise price of less than $5.00 per share, subject to
certain exceptions.
15
For any transaction involving a penny stock, unless exempt, the rules
require: (a) 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 agreement 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 to the
penny stock market, which, in highlight form: (a) sets forth the basis on
which the broker or dealer made the suitability determination; and (b) that
the broker or dealer received a signed, written agreement from the investor
prior to the transaction. Generally, brokers may be less willing to execute
transactions in securities subject to the "penny stock" rules. This may make
it more difficult for investors to dispose of our Common shares and cause a
decline in 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.
14. BECAUSE WE DO NOT INTEND TO PAY ANY CASH DIVIDENDS ON OUR COMMON STOCK,
OUR STOCKHOLDERS WILL NOT BE ABLE TO RECEIVE A RETURN ON THEIR SHARES UNLESS
THEY SELL THEM.
We intend to retain any future earnings to finance the development and
expansion of our business. We do not anticipate paying any cash dividends on
our common stock in the foreseeable future. Unless we pay dividends, our
stockholders will not be able to receive a return on their shares unless they
sell them. There is no assurance that stockholders will be able to sell
shares when desired.
16
15. WE MAY ISSUE SHARES OF PREFERRED STOCK IN THE FUTURE THAT MAY ADVERSELY
IMPACT YOUR RIGHTS AS HOLDERS OF OUR COMMON STOCK.
Our articles of incorporation authorize us to issue up to 5,000,000 shares of
"blank check" preferred stock. Accordingly, our board of directors will have
the authority to fix and determine the relative rights and preferences of
preferred shares, as well as the authority to issue such shares, 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 preferred rights to our assets upon liquidation, the right to receive
dividends before dividends are declared to holders of our common stock, and
the right to the redemption of such preferred shares, together with a
premium, prior to the redemption of the common stock. To the extent that we
do issue such additional 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.
16. WE WILL INCUR ONGOING COSTS AND EXPENSES FOR SEC REPORTING AND
COMPLIANCE, WITHOUT REVENUE WE MAY NOT BE ABLE TO REMAIN IN COMPLIANCE,
MAKING IT DIFFICULT FOR INVESTORS TO SELL THEIR SHARES, IF AT ALL.
We are currently listed on the OTC-Bulletin Board. Securities quoted on the
OTCBB that become delinquent in their required filings will be removed
following a 30 or 60 day grace period if they do not make their required filing
during that time. In order for us to remain in compliance we will require
future revenues to cover the cost of these filings, which could comprise a
substantial portion of our available cash resources. If we are unable to
generate sufficient revenues to remain in compliance, it may be
difficult for any our shareholders to find a buyer for their stock in our
company.
17. ALTHOUGH OUR STOCK IS LISTED ON THE OTC-BB, A TRADING MARKET HAS NOT
DEVELOP, PURCHASERS OF OUR SECURITIES MAY HAVE DIFFICULTY SELLING THEIR SHARES.
There is currently no active trading market in our securities and there are no
assurances that a market may develop or, if developed, may not be sustained.
If no market is ever developed for our common stock, it will be difficult for
you to sell any shares in our Company. In such a case, you may find that you
are unable to achieve any benefit from your investment or liquidate your shares
without considerable delay, if at all.
17
Item 1B. Unresolved Staff Comments.
Not applicable.
Item 2. Properties.
Our offices are currently located at 4600 Greenville Ave., Suite 240,
Dallas, TX 75206. Our telephone number is (972) 719-0170. Management
believes that its current facilities are adequate for its needs through the
next twelve months, and that, should it be needed, suitable additional space
will be available to accommodate expansion of the Company's operations on
commercially reasonable terms, although there can be no assurance in this
regard.
Item 3. Legal Proceedings.
From time to time, we may become involved in various lawsuits and legal
proceedings, which arise in the ordinary course of business. However,
litigation is subject to inherent uncertainties, and an adverse result in
these or other matters may arise from time to time that may harm our
business.
We are not presently a party to any material litigation, nor to the knowledge
of management is any litigation threatened against us, which may materially
affect us.
Item 4. Submission of Matters to a Vote of Security Holders.
We did not submit any matters to a vote of our security holders during the
past fiscal year.
18
PART II
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities.
(a) Market Information
MMAX Media, Inc.' Common Stock, $0.001 par value, is traded on
the OTC-Bulletin Board under the symbol: MMAX. The stock was cleared for
trading on the OTC-Bulletin Board on April 20, 2009.
Since the Company has been cleared for trading, through November 12, 2009,
there have been limited trades of the Company's stock. There are no
assurances that a market will ever develop for the Company's stock.
(b) Holders of Common Stock
As of January 28, 2011, there were approximately eighty-seven (87) holders of
record of our Common Stock and 12,403,374 shares issued and outstanding.
(c) Dividends
In the future we intend to follow a policy of retaining earnings, if any, to
finance the growth of the business and do not anticipate paying any cash
dividends in the foreseeable future. The declaration and payment of future
dividends on the Common Stock will be the sole discretion of board of
directors and will depend on our profitability and financial condition,
capital requirements, statutory and contractual restrictions, future prospects
and other factors deemed relevant.
(d) Securities Authorized for Issuance under Equity Compensation Plans
There are no outstanding grants or rights or any equity compensation plan in
place.
(e) Recent Sales of Unregistered Securities
During the fiscal year ending September 30, 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 Company has raised
$100,000.00 in a private placement issued 800,000 shares of common stock
subsequent to the end of the fiscal year. The offering price of the
securities was $0.125 per share for restricted securities.
(f) Issuer Purchases of Equity Securities
We did not repurchase any of our equity securities during the years ended
September 30, 2010 or 2009.
Item 6. Selected Financial Data.
Not applicable.
19
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Overview of Current Operations
------------------------------
MMAX Media, Inc. ("the Company") was formed on May 30, 2006 as Nevada
Processing Solutions. On February 1, 2010, the Company entered into an
assignment agreement that assigned to the Company all contractual rights
previously held by three entities, one of which is a shareholder, relating
to a television "Distribution Agreement" with HollywoodLaundromat.Com, Inc.,
a California corporation. At the time of the assignment to the Company, the
contract had not been completed and no payments or other monetary benefit
had been received by any party, thus the contract is deemed a contingent or
prospective right to benefit from the future commercialization of the MMAX
Assets and not based on any ongoing or current business operations. The
Distribution Agreement grants distribution rights to all of the Company's
television series and video assets to HollywoodLaundromat.Com, Inc. The
terms of the Distribution Agreement require the distributor,
HollywoodLaundromat.Com, Inc., to pay a variable percentage of all
proceeds derived from television syndication of the Company's video
assets, based on the market and language of the programming. Currently,
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.
There is no guaranty that all of the episodes will air because the
television network has reserved the right to terminate the syndication
agreement subject to its own discretion. The Company's distributor has
entered into a revenue sharing arrangement with a network station, which
means that our revenue derived from syndication of the MMAX Fights
television series, if any, will be based on a percentage of the revenue
generated by the television network which will air our content. Thus,
because the contract has not commenced and has not produced any revenues,
we do not have any basis upon which to make a revenue projection and the
Company does not have a contractually committed sum or payment due from
its distributor. We anticipate that the Company's distributor will seek
additional markets for our MMAX Fights series and the Campeon Mmaximo
reality program.
20
Business Strategy
-----------------
The new business model adopted by the Company, with the intended
commercialization of the acquired television programming and related
intellectual property rights, is to promote live mixed martial arts combat
events throughout Latin America and primarily in Mexico, with fighters being
drawn from Spanish speaking countries, including the United States. Similar
to the business model of the UFC (Ultimate Fighting Championship) and its
related television reality program, TUF (The Ultimate Fighter), we intend to
promote live events and develop a comprehensive video catalog of filmed
events which are then edited and produced into television programming for
consumption by Spanish speaking television networks throughout the Spanish
speaking world. Included in the assets being acquired is a reality program
filmed in Cuernavaca, Mexico in March, 2009. The reality program, entitled
"Campeon Mmaximo" or "Mmaximum Champion" in English, requires post-production
completion and awaits the final event, which we intended to film as a live
championship event in Mexico, but has since been put on hold due to financing
concerns and social unrest in Mexico. Also included in the video assets is
video footage and content for 39 one hour television episodes (three seasons
of programming) under the title "MMAX Fights" which is an edited program
based on over a dozen live MMA events filmed in various cities in Mexico,
all in Spanish and featuring Latin American fighters and former UFC
competitors. The company has not realized any revenues to date from its
current business plan.
Plan of Operations
------------------
Management does not believe that the Company will be able to generate any
significant profit during the coming year. The Company's need for capital
may change dramatically if it can generate revenues from its operations.
In the event the Company requires additional funds, the Company will have
to seek loans or equity placements to cover such cash needs. There are
no assurances additional capital will be available to the Company on
acceptable terms.
Management believes the Company can sustain itself for the next twelve
months. However, there can be no assurances to that effect. The Company
will require additional funds; the Company will have to seek loans or
equity placements to cover such cash needs. There is no assurance
additional capital will be available to the Company on acceptable terms.
21
Results of Operations for the year ended September 30, 2010
-----------------------------------------------------------
We earned no revenues since our inception on May 30, 2006 through
September 30, 2010. We do not anticipate earning any significant revenues
until such time as we fully initiate our business operations. We are
presently in the development stage of our business and we can provide no
assurance that we will be successful in becoming a provider to the mortgage
industry to process their loan applications.
For the period of May 30, 2006 (inception) through September 30, 2010 we
generated no income. Since our inception we experienced a net loss of
$(2,551,657). The bulk of our net loss represents the accounting
of the beneficial conversion feature of our preferred stock to common
stock, impairment loss and consulting fees. Most of the actual general and
administrative expenses $(171,258), since our inception, represented legal
and audit fees. For the year ending September 30, 2010 we lost $(1,813,866)
as compared to a loss of $(19,400) for the same period last year. This was
largely attributed to an impairment loss of $1,145,411 and consulting
expenses valued at $509,070 paid in stock compensation. We anticipate our
operating expenses will increase as we build our operations.
Revenues
--------
We generated no revenues for the period from May 30, 2006 (inception)
through September 30, 2010. We do not anticipate generating any revenues for
at least 24 months.
Liquidity and Capital Resources
-------------------------------
Our balance sheet as of September 30, 2010 reflects current assets of
$193,131, non-current of $65,815 and $69,735 in current liabilities.
Notwithstanding, we anticipate generating losses and therefore we may be
unable to continue operations in the future. We anticipate we will require
additional capital for operations and we will have to issue debt or equity
or enter into a strategic arrangement with a third party. 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.
Future Financings
-----------------
We anticipate continuing 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 our existing shareholders. There is no
assurance that we will achieve any of additional sales of our equity
securities or arrange for debt or other financing to fund our exploration and
development activities.
22
We are seeking to raise additional funds in a future offering of our common
stock. In the event we are unable to raise funds, 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. Management has been seeking funding
from a number of sources, but has yet to secure any consistent or recurring
funding, especially during this current economic downturn. Management
continues to seek different funding sources in order to initiate its
business plan. The downturn in the economy has limited various sources of
financing. Management continues to seek financing with no success. 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.
Going Concern
-------------
The financial conditions evidenced by the accompanying financial statements
raise substantial doubt as to our ability to continue as a going concern. Our
plans include obtaining additional capital through debt or equity financing.
The financial statements do not include any adjustments that might be
necessary if we are unable to continue as a going concern.
Summary of any product research and development that we will perform for the
term of our plan of operation.
----------------------------------------------------------------------------
We do not anticipate performing any product research and development under our
current plan of operation.
Expected purchase or sale of property and significant equipment
---------------------------------------------------------------
We do not anticipate the purchase or sale of any property or significant
equipment; as such items are not required by us at this time.
Significant changes in the number of employees
----------------------------------------------
As of September 30, 2010, we did not have any employees. We are dependent upon
our sole officer and director for our future business development. As our
operations expand we anticipate the need to hire additional employees,
consultants and professionals; however, the exact number is not quantifiable
at this time.
23
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 or operations,
liquidity, capital expenditures or capital resources that is material
to investors.
Critical Accounting Policies and Estimates
------------------------------------------
Revenue Recognition: 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) collectability is reasonably assured.
New Accounting Standards
------------------------
In January 2810, the FASB (Financial Accounting Standards Board) issued
Accounting Standards Update 2010-06 (ASU 2010-06), Fair Value Measurements
and Disclosures (Topic 820): Improving Disclosures about Fair Value
Measurements. This amendment to Topic 820 has improved disclosures about
fair value measurements on the basis of input received from the users of
financial statements. This is effective for interim and annual reporting
periods beginning after December 15, 2009, except for the disclosures about
purchases, sales, issuances, and settlements in the roll forward of activity
in Level 3 fair value measurements. Those disclosures are effective for
fiscal years beginning after December 15, 2010, and for interim periods
within those fiscal years. Early adoption is permitted. The Company does
not expect the provisions of ASU 2010-06 to have a material effect on the
financial position, results of operations or cash flows of the Company.
24
In February 2010, the FASB issued Accounting Standards Update 2010-09 (ASU
2010-09), Subsequent Events (Topic 855), amending guidance on subsequent
events to alleviate potential conflicts between FASB guidance and SEC
requirements. Under this amended guidance, SEC filers are no longer required
to disclose the date through which subsequent events have been evaluated in
originally issued and revised financial statements. This guidance was
effective immediately and we adopted these new requirements for the period
ended June 30, 2010. The adoption of this guidance did not have a material
impact on our financial statements.
In May 2010, the FASB (Financial Accounting Standards Board) issued
Accounting Standards Update 2010-19 (ASU 2010-19), Foreign Currency (Topic
830): Foreign Currency Issues: Multiple Foreign Currency Exchange Rates. The
amendments in this Update are effective as of the announcement date of March
18, 2010. The Company does not expect the provisions of ASU 2010-19 to have a
material effect on the financial position, results of operations or cash
flows of the Company.
The company evaluated all of the other recent accounting pronouncements
through ASU 2010-19 and deemed that they were immaterial.
25
Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
Not applicable.
Item 8. Financial Statements and Supplementary Data.
Index to Financial Statements
MMAX Media, Inc.
Financial Statements
September 30, 2010
September 30, 2009
Financial Statement
-------------------
PAGE
----
Independent Auditors' Report for the year ended
September 30, 2010 F-1
Independent Auditors' Report for the year ended
September 30, 2009 F-2
Balance Sheets F-3
Statements of Operations F-4
Statements of Changes in Stockholders' Equity F-5-9
Statements of Cash Flows F-10
Notes to Financials F-11-20
26
De Joya Griffith & Company, LLC
CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS
Report of Independent Registered Public Accounting Firm
To The Board of Directors and Stockholders
MMAX Media
Dallas, TX 75206
We have audited the accompanying balance sheet of MMAX Media, Inc. ("the
Company") as of September 30, 2010, and the related statements of operations,
stockholders' equity, and cash flows for the year then ended and from
inception (May 30, 2006) through September 30, 2010. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on the consolidated financial
statements based on our audit. We did not audit the financial statements of
MMAX Media, Inc for the year ended September 30, 2009. Those statements were
audited by other auditors.
We conducted our audit in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit 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 audit 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 the Company as of
September 30, 2010, and the results of their operations and cash flows for
the year then ended and from inception (May 30, 20060 through September 30,
2010, in conformity with accounting principles generally accepted in the
United States.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has suffered recurring losses from
operations, which raised substantial doubt about its ability to continue as
a going concern. Management's plans in regard to these matters are also
described in Note 2. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
De Joya Griffith & Company, LLC
/s/ De Joya Griffith & Company, LLC
Henderson, Nevada
January 24, 2011
2580 Anthem Village Dr., Henderson, NV 89052
Telephone (702) 563-1600 o Facsimile (702) 920-8049
Member Firm with Russell Bedford International
F-1
SEALE AND BEERS, CPAs
PCAOB & CPAB REGISTERED AUDITORS
--------------------------------
www.sealebeers.com
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
-------------------------------------------------------
To the Board of Directors
Nevada Processing Solutions
(A Development Stage Company)
We have audited the accompanying balance sheets of Nevada Processing
Solutions (A Development Stage Company) as of September 30, 2009 and 2008,
and the related statements of operations, stockholders' equity (deficit) and
cash flows for the years ended September 30, 2009 and 2008 and since
inception on May 30, 2006 through September 30, 2009. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conduct our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audits 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 provide 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
(A Development Stage Company) as of September 30, 2009 and 2008, and the
related statements of operations, stockholders' equity (deficit) and cash
flows for the years ended September 30, 2009 and 2008 and since inception on
May 30, 2006 through September 30, 2009, 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 3 to the
financial statements, the Company has an accumulated deficit of $30,913,
which raises substantial doubt about its ability to continue as a going
concern. Management's plans concerning these matters are also described in
Note 3. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
/s/ Seale and Beers, CPAs
-------------------------
Seale and Beers, CPAs
Las Vegas, Nevada
November 6, 2009
50 South Jones Blvd., Suite 202 Las Vegas, NV 89107
888-727-8251 Fax: 888-782-2351
F-2
MMAX MEDIA, INC.
(formerly Nevada Processing Solutions)
(a development stage company)
Balance Sheets
(Audited)
September 30, September 30,
2010 2009
------------ ------------
ASSETS
Current Assets:
Cash $ 2,231 $ -
Prepaid expense - 1,000
Prepaid stock compensation 190,900 -
------------ ------------
Total current assets 193,131 1,000
Other Assets:
Distribution license, net amortization
of $2,181 2,181 -
Prepaid stock compensation, non current 63,634 -
------------ ------------
Total other assets 65,815 -
------------ ------------
TOTAL ASSETS $ 258,946 $ 1,000
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 16,323 $ 775
Accounts payable - related party 37,412 -
Note payable 16,000 -
------------ ------------
Total current liabilities 69,735 775
------------ ------------
Stockholders' equity:
Preferred stock, $0.001 par value, 5,000,000
shares authorized, 638,602, 872,690 shares
issued and outstanding as of 9/30/10 and
9/30/09, respectively 638 873
Common stock, $0.001 par value, 195,000,000
shares authorized, 11,603,374, 3,375,000
issued and outstanding as of
9/30/10 and 9/30/09, respectively 11,599 3,375
Additional paid-in capital 2,728,631 733,768
(Deficit) accumulated during development stage (2,551,657) (737,791)
------------ ------------
Total stockholders' equity 189,211 225
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 258,946 $ 1,000
============ ============
The accompanying notes are an integral part of these financial statements.
F-3
MMAX MEDIA, INC.
(formerly Nevada Processing Solutions)
(a development stage company)
Statements of Operations
(Audited)
For the Period
from
For the years ending May 30, 2006
September 30, (Inception) to
-------------------- September 30,
2010 2009 2010
--------- --------- --------------
REVENUE $ - $ - $ -
EXPENSES
Amortization 2,181 - 2,181
Consulting 509,070 - 509,070
General and administrative expenses 140,344 19,400 171,257
Professional fees 16,860 - 16,860
--------- --------- --------------
Total expenses 668,455 19,400 699,368
--------- --------- --------------
Net operating loss (668,455) (19,400) (699,368)
--------- --------- --------------
OTHER EXPENSES
Beneficial Conversion Feature of
Preferred stock - - (706,878)
Impairment loss (1,145,411) - (1,145,411)
---------- ---------- -------------
Total other expenses (1,145,411) - (1,145,411)
---------- ---------- -------------
NET (LOSS) $(1,813,866) $ (19,400) $ (2,551,657)
=========== ========== =============
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING -
BASIC 8,173,854 3,375,000
=========== ==========
(LOSS) PER SHARE - BASIC
$ (0.22) $ (0.01)
=========== ==========
The accompanying notes are an integral part of these statements
F-4
MMAX MEDIA, INC.
(formerly Nevada Processing Solutions)
(a development stage company)
Statements of Stockholders' Equity
(Audited)
(Deficit)
Preferred Common Accumulated
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
June 2006
Contributed
Capital 4,790 4,790
Net
(loss)
for the
year
ending
9/30/06 (706,878) (706,878)
---------- ------- --------- ------- --------- ------------ ------------
Balance,
9/30/06
872,690 873 3,100,000 $ 3,100 $711,668 $ (706,878) $ 8,763
F-5
MMAX MEDIA, INC.
(formerly Nevada Processing Solutions)
(a development stage company)
Statements of Stockholders' Equity
(Audited)
(Continued)
(Deficit)
Preferred Common Accumulated
Stock Stock Additional During Total
------------------ ----------------- Paid-in Development Stockholders
Shares Amount Shares Amount Capital Stage Equity
---------- ------- --------- ------- --------- ------------ ------------
Balance,
9/30/06
872,690 873 3,100,000 $ 3,100 $711,668 $ (706,878) $ 8,763
Net
(loss)
for the
year
ending
9/30/07 (8,763) (8,763)
---------- ------- --------- ------- --------- ------------ ------------
Balance,
9/30/07
872,690 873 3,100,000 $ 3,100 $711,668 $ (715,641) $ -
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
9/30/08 (2,750) (2,750)
---------- ------- --------- ------- --------- ------------ ------------
Balance,
9/30/08
872,690 873 3,375,000 3,375 714,143 (718,391) -
F-6
MMAX MEDIA, INC.
(formerly Nevada Processing Solutions)
(a development stage company)
Statements of Stockholders' Equity
(Audited)
(Continued)
(Deficit)
Preferred Common Accumulated
Stock Stock Additional During Total
------------------ ----------------- Paid-in Development Stockholders
Shares Amount Shares Amount Capital Stage Equity
---------- ------- --------- ------- --------- ------------ ------------
Balance,
9/30/08
872,690 873 3,375,000 3,375 714,143 (718,391) -
December
2008
Contributed
Capital 3,250 3,250
January
2009
Contributed
Capital 875 875
February
2009
Contributed
Capital 5,500 5,500
September
2009
Contributed
Services 10,000 10,000
Net
(loss)
for the
year
ending
9/30/09 (19,400) (19,400)
---------- ------- --------- ------- --------- ------------ ------------
Balance,
9/30/09
872,690 873 3,375,000 3,375 733,768 (737,791) 225
F-7
MMAX MEDIA, INC.
(formerly Nevada Processing Solutions)
(a development stage company)
Statements of Stockholders' Equity
(Audited)
(Continued)
(Deficit)
Preferred Common Accumulated
Stock Stock Additional During Total
------------------ ----------------- Paid-in Development Stockholders
Shares Amount Shares Amount Capital Stage Equity
---------- ------- --------- ------- --------- ------------ ------------
11/09
Contributed
capital 975 975
01/10
Contributed
capital 3,000 3,000
02/10
Shares
issued for
acquisition
of video
library and
related
intellect-
ual assets 3,272,598 3,273 1,142,137 1,145,410
02/10
Shares
issued for
ser-
vices 2,181,724 2,182 761,421 763,603
02/10
Shares
issued for
license
agree-
ment 218,172 218 4,145 4,363
03/10
Preferred
shares
conve-
rted (33,418) (34) 334,180 334 (300) -
03/10
Contributed
capital 22,500 22,500
F-8
MMAX MEDIA, INC.
(formerly Nevada Processing Solutions)
(a development stage company)
Statements of Stockholders' Equity
(Audited)
(Continued)
(Deficit)
Preferred Common Accumulated
Stock Stock Additional During Total
------------------ ----------------- Paid-in Development Stockholders
Shares Amount Shares Amount Capital Stage Equity
---------- ------- --------- ------- --------- ------------ ------------
04/10
Preferred
shares
conve-
rted (36,125) (36) 361,250 361 (325) -
05/10
Preferred
shares
conve-
rted (120,057) (120) 1,200,570 1,201 (1,080) -
06/10
Preferred
shares
conve-
rted (44,488) (45) 444,880 445 (400) -
06/10
Sale of
common
stock 210,000 210 62,790 63,000
Net
(loss)
for the
year
ending
9/30/10 (1,813,866) (1,813,116)
---------- ------- --------- ------- --------- ------------ ------------
Balance,
9/30/10
638,602 $ 638 11,598,374 $11,599 $2,728,631 $(2,551,657) $ 189,211
========== ======= ========= ====== ========== ============ ============
The accompanying notes are an integral part of these financial statements.
F-9
MMAX MEDIA, INC.
(formerly Nevada Processing Solutions)
(a development stage company)
Statements of Cash Flows
(Audited)
For the Period
from
For the years ending May 30, 2006
September 30, (Inception) to
----------------------- September 30,
2010 2009 2010
------------ --------- --------------
OPERATING ACTIVITIES
Net (Loss) $(1,813,866) $(19,400) $ (2,551,657)
Adjustments to reconcile
net loss to net cash
used by operating activities:
Stock based expense 509,071 - 509,071
Impairment loss related
to assets acquired with
common stock 1,145,410 - 1,145,410
Beneficial Interest on
Conversion - - 706,878
Amortization 2,182 - 2,182
Contributed services - 10,000 10,000
(Increase) decrease in
prepaid expense 1,000 (1,000) -
Increase (decrease) in
accounts payable 15,548 775 16,323
Increase (decrease) in
accounts payable - related party 37,412 - 37,412
------------ --------- --------------
Cash (Used) by operating activities (103,243) (9,625) (124,381)
FINANCING ACTIVITIES
Proceeds from notes payable 16,000 - 16,000
Sale of common stock 63,000 - 68,850
Sale of preferred stock - - 873
Contributed capital 26,474 9,625 40,889
------------ --------- --------------
Cash Provided by financing activities 105,474 9,625 126,612
------------ --------- --------------
NET CHANGE IN CASH 2,231 - 2,231
CASH - BEGINNING OF PERIOD - - -
------------ --------- --------------
CASH - END OF PERIOD $ 2,231 $ - $ 2,231
============ ========= ==============
SUPPLEMENTAL DISCLOSURES:
Interest paid $ - $ - $ -
Income taxes paid $ - $ - $ -
Non-cash transactions
Prepaid stock Compensation $ 254,534 $ - $ 763,603
Distribution license
paid with common stock $ (4,363) $ - $ 4,363
Non-operating assets $ 1 $ - $ 1
The accompanying notes are an integral part of these financial statements.
F-10
MMAX MEDIA, INC.
(formerly Nevada Processing Solutions)
(A development stage company)
Notes to the Financial Statements
September 30, 2010
(Audited)
NOTE 1. GENERAL ORGANIZATION AND BUSINESS
MMAX Media, Inc. ("the Company") was formed on May 30, 2006 as Nevada
Processing Solutions. On February 1, 2010, the Company entered into an
assignment agreement that assigned to the Company all contractual rights
previously held by three entities, one of which is a shareholder, relating
to a television "Distribution Agreement" with HollywoodLaundromat.Com, Inc.,
a California corporation. 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 Michael Wortsman, executive officer of
HollywoodLaundromat.Com,Inc., the Company's distributor. The
Distribution Agreement grants distribution rights to all of the Company's
television series and video assets to HollywoodLaundromat.Com, Inc. The
terms of the Distribution Agreement require the distributor,
HollywoodLaundromat.Com, Inc., to pay a variable percentage of all
proceeds derived from television syndication of the Company's video
assets, based on the market and language of the programming.
NOTE 2 - GOING CONCERN
These condensed 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 of
September 30, 2010, the Company has not recognized any revenues and has
accumulated operating losses of approximately $(2,551,657) since inception.
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 for further development of the
Company's services, to provide financing for marketing and promotion, to
secure additional property and equipment, and for other working capital
purposes. While the Company is putting forth 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 do not include
any adjustments relating to the recoverability and classification of
recorded asset amounts, or amounts and classification of liabilities that
might result from this uncertainty.
F-11
MMAX MEDIA, INC.
(formerly Nevada Processing Solutions)
(A development stage company)
Notes to the Financial Statements
September 30, 2010
(Audited)
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES
The relevant accounting policies are listed below.
Basis of Accounting
-------------------
The basis is United States generally accepted accounting principles.
Cash and Cash Equivalents
-------------------------
The Company considers all short-term investments with a maturity of three
months or less at the date of purchase to be cash equivalents.
Fair Value of Financial Instruments
-----------------------------------
The Company's cash and cash equivalents, short-term investments, accounts
receivable, accounts payable and accrued liabilities are considered financial
instruments whose carrying value approximates fair value based on their short
term nature.
Use of Estimates
----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Revenue recognition
-------------------
Revenues are recognized in accordance with ASC 926 and AICPA Statement of
Position (SOP) 00-2, "Accounting by Producers or Distributors of Films".
Under SOP 00-2, revenue from the sale or licensing of a film should be
recognized only when all five of the following conditions are met:
1. Persuasive evidence of a sale or licensing arrangement with a customer
exists. 2. The film is complete and has been delivered or is available for
immediate and unconditional delivery (in accordance with the terms of
the arrangement). 3. The license period has begun and the customer can begin
its exploitation, exhibition, or sale. 4. The fee is fixed or determinable.
5. Collection of the fee is reasonably assured.
F-12
MMAX MEDIA, INC.
(formerly Nevada Processing Solutions)
(A development stage company)
Notes to the Financial Statements
September 30, 2010
(Audited)
Earnings per Share
------------------
The basic earnings (loss) per share is calculated by dividing the Company's
net income (loss) available 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.
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.
F-13
MMAX MEDIA, INC.
(formerly Nevada Processing Solutions)
(A development stage company)
Notes to the Financial Statements
September 30, 2010
(Audited)
Intangible Assets
-----------------
We amortize intangible assets with finite lives over their estimated useful
lives and review them for impairment whenever an impairment indicator exists.
We continually monitor events and changes in circumstances that could
indicate carrying amounts of our long-lived assets, including our intangible
assets, may not be recoverable. When such events or changes in circumstances
occur, we assess recoverability by determining whether the carrying value of
such assets will be recovered through the undiscounted expected future cash
flows. If the future undiscounted cash flows are less than the carrying
amount of these assets, we recognize an impairment loss based on the excess
of the carrying amount over the fair value of the assets.
Our intangible assets are amortized over their estimated useful lives of
as shown in the table below. Amortization is based on the
pattern in which the economic benefits of the intangible asset will be
consumed. (Refer to Note 7)
Weighted Average
Useful Life (years)
-------------------
Distribution license 2
Film Cost Capitalization
------------------------
The Company capitalizes actual costs it incurs, to the extent it does not
exceed estimated future revenues, for production and post-production of film
that will later used in accordance with ASC 926, Entertainment - Films. The
Company will begin amortization of capitalized film cost when a film is
released and it begins to recognize revenue from the film.
Year-end
--------
The Company's fiscal year-end is September 30.
F-14
MMAX MEDIA, INC.
(formerly Nevada Processing Solutions)
(A development stage company)
Notes to the Financial Statements
September 30, 2010
(Audited)
Recent Accounting Pronouncements
--------------------------------
In January 2810, the FASB (Financial Accounting Standards Board) issued
Accounting Standards Update 2010-06 (ASU 2010-06), Fair Value Measurements
and Disclosures (Topic 820): Improving Disclosures about Fair Value
Measurements. This amendment to Topic 820 has improved disclosures about
fair value measurements on the basis of input received from the users of
financial statements. This is effective for interim and annual reporting
periods beginning after December 15, 2009, except for the disclosures about
purchases, sales, issuances, and settlements in the roll forward of activity
in Level 3 fair value measurements. Those disclosures are effective for
fiscal years beginning after December 15, 2010, and for interim periods
within those fiscal years. Early adoption is permitted. The Company does
not expect the provisions of ASU 2010-06 to have a material effect on the
financial position, results of operations or cash flows of the Company.
In February 2010, the FASB issued Accounting Standards Update 2010-09 (ASU
2010-09), Subsequent Events (Topic 855), amending guidance on subsequent
events to alleviate potential conflicts between FASB guidance and SEC
requirements. Under this amended guidance, SEC filers are no longer required
to disclose the date through which subsequent events have been evaluated in
originally issued and revised financial statements. This guidance was
effective immediately and we adopted these new requirements for the period
ended June 30, 2010. The adoption of this guidance did not have a material
impact on our financial statements.
The company evaluated all of the other recent accounting pronouncements
through ASU 2010-19 and deemed that they were immaterial.
F-15
MMAX MEDIA, INC.
(formerly Nevada Processing Solutions)
(A development stage company)
Notes to the Financial Statements
September 30, 2010
(Audited)
NOTE 4 - 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 preferred shares, par value $0.001.
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, 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
(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.
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.
In November 2009, an officer contributed cash of $975 to the Company
to pay for transfer agent fees.
In January 2810, an officer contributed cash of $3,000 to the Company
to pay for audit fees.
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 the MMAX Assets which were concurrently assigned
to us by the legal owners of the assets. These shares were issued pursuant
to an exemption from registration under Section 4(2) and/or Rule 506 of
Regulation D. (see Note 7)
On February 1, 2010, the Company entered into two Employment Agreements
with its 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) and/or Rule 506 of Regulation D. (see Note 8)
F-16
MMAX MEDIA, INC.
(formerly Nevada Processing Solutions)
(A development stage company)
Notes to the Financial Statements
September 30, 2010
(Audited)
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 Michael Wortsman, executive officer of HollywoodLaundromat.Com,
Inc., the Company's 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)
and/or Rule 506 of Regulation D. (Refer to Note 7)
On March 10, 2010, 33,418 preferred shares of stock were converted into
334,180 shares of common stock at a conversion rate of 10 to 1.
On March 10, 2010, a shareholder contributed $22,500 to the Company in
order to provide working capital.
On April 20, 2010, 36,125 preferred shares of stock were converted into
361,250 shares of common stock at a conversion rate of 10 to 1.
On May 5, 2010, 37,895 preferred shares of stock were converted into
378,950 shares of common stock at a conversion rate of 10 to 1.
On May 13, 2010, 39,752 preferred shares of stock were converted into
397,520 shares of common stock at a conversion rate of 10 to 1.
On May 25, 2010, 42,410 preferred shares of stock were converted into
424,100 shares of common stock at a conversion rate of 10 to 1.
On June 16, 2010, 44,488 preferred shares of stock were converted into
444,880 shares of common stock at a conversion rate of 10 to 1.
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.
There were no other issuances of common or preferred stock or equivalents
since May 30, 2006 (inception) through September 30, 2010.
NOTE 5 - RELATED PARTY TRANSACTIONS
During the fiscal year ended September 30, 2010, a director of the Company
was reimbursed travel expenses of $360, and an affiliated Company of a
director was paid $61,407 for graphics, redigitizing and production
expenses. The Company does not lease or rent any property. Office services
are provided without charge by a director. Such costs are immaterial to 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-17
MMAX MEDIA, INC.
(formerly Nevada Processing Solutions)
(A development stage company)
Notes to the Financial Statements
September 30, 2010
(Audited)
NOTE 6 PROVISION FOR INCOME TAXES
The Company accounts for income taxes under ASC 740, "Accounting for Income
Taxes", which requires use of the liability method. ASC 740 provides that
deferred tax assets and liabilities are recorded based on the differences
between the tax bases of assets and liabilities and their carrying amounts
for financial reporting purposes, referred to as temporary differences.
Deferred tax assets and liabilities at the end of each period are determined
using the currently enacted tax rates applied to taxable income in the
periods in which the deferred tax assets and liabilities are expected to be
settled or realized.
The provision for income taxes differs from the amount computed by applying
the statutory federal income tax rate to income before provision for income
taxes. The sources and tax effects of the differences are as follows:
U.S federal statutory rate (35.0%)
Valuation reserve 35.0%
------
Total -%
Income tax benefits as of September 30, 2010 and September 30, 2009, are
calculated as follows:
Year Ended
September 30,
2010 2009
------------ --------
Book loss $ 1,813,866 $19,400
Less: Book - -
depreciation
Add: Tax - -
depreciation
------------ --------
Net loss $ 1,813,866 $19,400
Effective 35% 35%
tax rate
------------ --------
Tax benefit $ 634,853 $ 6,790
Valuation $ (634,853) $ (6,790)
allowance
------------ --------
$ - $ -
------------ --------
F-18
MMAX MEDIA, INC.
(formerly Nevada Processing Solutions)
(A development stage company)
Notes to the Financial Statements
September 30, 2010
(Audited)
During the year ended September 30, 2010, the Company recorded a valuation
allowance of $(634,853), as compared to $(6,790) for the previous year, on
the deferred tax assets to reduce the total to an amount that management
believes will ultimately be realized. Realization of deferred tax assets is
dependent upon sufficient future taxable income during the period that
deductible temporary differences and carryforwards are expected to be
available to reduce taxable income. There was no other activity in the
valuation allowance account during the year ended September 30, 2010.
NOTE 7 INTANGIBLE ASSETS
On February 1, 2010, the Company entered into an assignment agreement with a
third party company ("Assignor") to acquire a video library of raw and edited
television programs and related intellectual property such as brands and
trademarks for the video content, collectively ("Acquired Assets"). The
Acquired Assets were acquired by the Assignor in a non-judicial foreclosure
process and then were improved by the Assignor through additional investment
and development, however, the acquired video library and television programs
still required additional post production work for commercial viability and
distribution. Concurrently the Company entered into a separate agreement
with Assignor for a release of claims and liability relating to the Acquired
Assets ("Release of Claims") in exchange for 3,272,598 shares of the
Company's common stock with a fair value of $1,145,410. The value of shares
totaling $1,145,410 issued for the Release of Claims is considered as part of
the overall acquisition cost of the Acquired Assets. Since the video library
and television programs of the Acquired Assets require additional capital to
complete the needed post production in order for such assets to be commercially
viable and distributable, the Company deemed them as non-operational
assets. Consequently, the Company impaired the value of
the video library totaling $1,145,410.
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 Michael Wortsman, executive officer of HollywoodLaundromat.Com,
Inc., the Company's distributor. These shares were capitalized at their fair
market value and will be amortized over an eighteen month period.
Amortization expense for the distribution license was $2,181 and $0 for the
years ended September 30, 2010 and 2009, respectively.
F-19
MMAX MEDIA, INC.
(formerly Nevada Processing Solutions)
(A development stage company)
Notes to the Financial Statements
September 30, 2010
(Audited)
NOTE 8 PREPAID EXPENSE
On February 1, 2010, the Company entered into two Employment Agreements with
its 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. As
a result of the resignation of Larry Biggs, CEO, on April 30, 2010, the
Company expensed $349,985 to write off the remaining prepaid balance
attributed to the former CEO.
As of September 30, 2010, the prepaid balance totaling $254,534 for the
remaining officer is being amortized over a period of 17 months.
NOTE 9 SUBSEQUENT EVENTS
In December 2010, the Company issued 800,000 shares of common stock in a
private placement subsequent to the end of the fiscal year for $100,000.00.
The offering price of the securities was $0.125 per share.
F-20
Item 9. Changes in and Disagreements With Accountants On Accounting and
Financial Disclosure.
None.
Item 9A(T). Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
------------------------------------------------
Our disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-
15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), are designed to ensure that information required to be disclosed in
reports filed or submitted under the Exchange Act is recorded, processed,
summarized, and reported within the time periods specified in rules and forms
adopted by the SEC, and that such information is accumulated and communicated
to management, including the Chief Executive Officer and the Chief Financial
Officer, to allow timely decisions regarding required disclosures.
Management, with the participation of the Chief Executive Officer and the
Chief Financial Officer, who is also the sole member of our Board of
Directors, has evaluated the effectiveness of our disclosure controls and
procedures as of the end of the period covered by this Form 10-K. Based on
such evaluation, the Chief Executive Officer and the Chief Financial Officer
concluded that, as of September 30, 2010, our disclosure controls and
procedures were not effective. Our disclosure controls and procedures were
not effective because of the "material weaknesses" described below under
"Management's annual report on internal control over financial reporting,"
which are in the process of being remediated as described below under
"Management Plan to Remediate Material Weaknesses."
Management's Report on Internal Control over Financial Reporting
----------------------------------------------------------------
Our management is responsible for establishing and maintaining adequate
internal control over financial reporting. Internal control over financial
reporting, as defined in rules promulgated under the Exchange Act, is a
process designed by, or under the supervision of, our Chief Executive Officer
and Chief Financial Officer and affected by our Board of Directors,
management and other personnel to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with GAAP. Internal control
over financial reporting includes those policies and procedures that:
o pertain to the maintenance of records that in reasonable detail accurately
and fairly reflect the transactions and dispositions of our assets;
o provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with GAAP, and that
our receipts and expenditures are being made only in accordance with
authorizations of our management and our Board of Directors; and
28
o provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of our assets that could have
a material effect on our financial statements
Because of its inherent limitations, a system of internal control over
financial reporting can provide only reasonable, not absolute, assurance
that the objectives of the control system are met and may not prevent or
detect misstatements. Internal control over financial reporting is a process
that involves human diligence and compliance and is subject to lapses in
judgment and breakdowns resulting from human failures. Internal control over
financial reporting also can be circumvented by collusion or improper
override. Because of such limitations, there is a risk that material
misstatements may not be prevented or detected on a timely basis by internal
control over financial reporting. However, these inherent limitations are
known features of the financial reporting process, and it is possible to
design into the process safeguards to reduce, though not eliminate, this
risk. Further, over time control may become inadequate because of changes in
conditions or the degree of compliance with the policies or procedures may
deteriorate.
Our management assessed the effectiveness of our internal control over
financial reporting as of September 30, 2010. In making its assessment,
management used the criteria established in Internal Control-Integrated
Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission ("COSO"). Based on its assessment, management has
concluded that we had certain control deficiencies described below that
constituted material weaknesses in our internal controls over financial
reporting. As a result, our internal control over financial reporting was
not effective as of September 30, 2010.
A "material weakness" is defined under SEC rules as a deficiency, or a
combination of deficiencies, in internal control over financial reporting
such that there is a reasonable possibility that a material misstatement of
a company's annual or interim financial statements will not be prevented or
detected on a timely basis by the company's internal controls. As a result
of management's review of the investigation issues and results, and other
internal reviews and evaluations that were completed after the end of fiscal
year 2010 related to the preparation of management's report on internal
controls over financial reporting required for this annual report on
Form 10-K, management concluded that we had material weaknesses in our
control environment and financial reporting process consisting of the
following:
1) lack of a functioning audit committee due to a lack of a majority of
independent members and a lack of a majority of outside directors on our
board of directors, resulting in ineffective oversight in the establishment
and monitoring of required internal controls and procedures;
2) inadequate segregation of duties consistent with control objectives;
29
3) insufficient written policies and procedures for accounting and financial
reporting with respect to the requirements and application of US GAAP and
SEC disclosure requirements; and
4) ineffective controls over period end financial disclosure and reporting
processes.
We do not believe the material weaknesses described above caused any
meaningful or significant misreporting of our financial condition and
results of operations for the fiscal year ended September 30, 2010.
However, management believes that the lack of a functioning audit committee
and the lack of a majority of outside directors on our board of directors
results in ineffective oversight in the establishment and monitoring of
required internal controls and procedures, which could result in a material
misstatement in our financial statements in future periods.
Management Plan to Remediate Material Weaknesses
------------------------------------------------
Management is pursuing the implementation of corrective measures to address
the material weaknesses described below. In an effort to remediate the
identified material weaknesses and other deficiencies and enhance our
internal controls, we have initiated, or plan to initiate, the following
series of measures:
We will create a position to segregate duties consistent with control
objectives and will increase our personnel resources and technical accounting
expertise within the accounting function when funds are available to us.
We plan to appoint one or more outside directors to our board of directors
who shall be appointed to an audit committee resulting in a fully functioning
audit committee who will undertake the oversight in the establishment and
monitoring of required internal controls and procedures such as reviewing and
approving estimates and assumptions made by management when funds are
available to us.
We believe the remediation measures described above will remediate the
material weaknesses we have identified and strengthen our internal control
over financial reporting. We are committed to continuing to improve our
internal control processes and will continue to diligently and vigorously
review our financial reporting controls and procedures. As we continue to
evaluate and work to improve our internal control over financial reporting,
we may determine to take additional measures to address control deficiencies
or determine to modify, or in appropriate circumstances not to complete,
certain of the remediation measures described above.
30
Changes in Internal Control over Financial Reporting
----------------------------------------------------
There were no changes in our internal control over financial reporting (as
such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act)
during the most recent fiscal quarter that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.
This annual report does not include an attestation report of the
Corporation's registered public accounting firm regarding internal control
over financial reporting. Management's report was not subject to attestation
by the Corporation's registered public accounting firm pursuant to temporary
rules of the SEC that permit the Corporation to provide only the management's
report in this quarterly report.
(c) Changes in internal controls over financial reporting
----------------------------------------------------------
There was no change in our internal controls over financial reporting that
occurred during the period covered by this report, that has materially
affected, or is reasonably likely to materially affect, our internal controls
over financial reporting.
Item 9B. Other Information.
None.
31
PART III
Item 10. Director, Executive Officer and Corporate Governance.
The following table sets forth certain information regarding our current
director and executive officer. Our executive officers serve one-year terms.
Set forth below are the names, ages and present principal occupations or
employment, and material occupations, positions, offices or employments for
the past five years of our current director and executive officer.
Name Age Positions and Offices Held
---------------- ------ ----------------------------------------
Tommy Habeeb 52 CEO, Secretary, and Director
B. Work Experience
Tommy Habeeb, CEO, Director, CFO, Secretary
-----------------------------------------------------
Mr. Habeeb has served as the Company's director, CEO, and secretary
since February 1, 2010, and will serve on the board until the next annual
shareholders' meeting of the Company or until a successor is elected. There
are no agreements or understandings for the officer and director to resign at
the request of another person, and the above-named officer and director is
not acting on behalf of, nor will act at the direction of, any other person.
Set forth below is the name of the sole director and officer of the Company,
all positions and offices with the Company held, the period during which he
has served as such, and his business experience:
Tommy Habeeb - Work Background
MMAX Media, Inc.
Dallas, Texas
CEO, Director
2010-Present
Mr. Habeeb, a Texas native, was born and raised in Corpus Christi, Texas.
From day one he had his eye on the stars. Determined to perform from a very
early age, he moved to Los Angeles to pursue his dream of acting soon after
completing high school.
32
Briefly attending UCLA, Tommy made his way through the studios and worked on
several feature films and television shows. At that time, he could scarcely
realize that his most popular work would hit some twenty years later.
Habeeb relocated to New York City in 1990 to develop television and music
projects. During his tenure he produced several pop, rock and country albums.
Later returning to Texas, he produced "Entertainment Texas", a talk show
format focusing on his home state's entertainment business.
While in Texas, Habeeb took a sudden career turn and designed a "buttoned"
necktie, never seen before. This new accessory gained instant attention
from many celebrities such as Michael Jordan, creating a new fashion trend.
Habeeb's top-selling ties retail in formalwear stores across the nation.
With the enormous success of his neckties, Habeeb subsequently ventured into
designing shirts and other items which were sold through many popular retail
stores such as JC Penney and Wal-Mart.
Habeeb sold his business to afford him the time to return to what he loved
most of all: acting. Now one of the busiest creative forces in Texas, Habeeb
starred in and co-produced the weekly reality television series, "CHEATERS".
The show enjoys distribution with 80% clearance in over 230 markets in
syndication around the world. Goldstein/Habeeb Entertainment produces
"CHEATERS" with investigations filmed across the country, documenting
relationships involving suspected infidelity in varied stages of development.
Doubling as the show's star, private investigator "Tommy Grand", and as the
co-producer of "CHEATERS", there was little time remaining for this "low
handicap" golfer to engage in his favorite recreation.
"STAG", a new reality show that documents the happenings of a couple's
bachelor or bachelorette party, is Habeeb's latest venture for 2004. He also
currently hosts the syndicated television show "EYE FOR AN EYE", now in its
second season.
The 6'3" producer is also featured in automobile commercials in several
markets across the country and is the celebrity spokesman of a national ad
campaign for the telephone company, "PHONES FOR ALL." This year Tommy will
also star in a new sitcom, "OUT ON BAIL", as well as in the feature film,
"DANGEROUS COUNTRY" while continuing to host the television show and video
series, "SUPERSTAR IN SPORTS: Inside Training Camp", a training video for
kids. Utilizing the world's top athletes, with hip-hop music and graphics,
this fast-moving show provides both fun and information for the youngsters.
Add still another project to Tommy's hosting schedule, the high-energy
"SPEEDZONE TV", providing viewers an insider's look at the exciting
technology and the daring drivers in the popular sport of auto racing, soon
to premiere in national syndication.
33
Tommy has been featured on: TONIGHT SHOW with JAY LENO, ENTERTAINMENT
TONIGHT, NBC TODAY SHOW, NBC LATER TODAY SHOW, GOOD MORNING AMERICA, EXTRA,
CNN, NBC, FOX, FOX NEWS, MSMBC, MAURY POVICH, SALLY JESSY RAPHAEL, LEEZA, as
well as many other local, national & international television and radio
programs. His newspaper and magazine appearances include TV GUIDE, STAR
MAGAZINE, HOLLYWOOD REPORTER, VARIETY, ELECTRONIC MEDIA, LA TIMES, NY TIMES,
DER SPIEGEL, and many others.
Education:
High School - Richard King High School, Corpus Christi, Texas.
UCLA - various classes studying film, left to pursue professional acting
career in 1979.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires our executive officer and director, and persons who
beneficially own more than ten percent of our common stock, to file initial
reports of ownership and reports of changes in ownership with the SEC.
Executive officers, directors and greater than ten percent beneficial owners
are required by SEC regulations to furnish us with copies of all Section 16(a)
forms they file. Based upon a review of the copies of such forms furnished to
us and written representations from our executive officer and director, we
believe that as of the date of this report they were not current in his 16(a)
reports.
Board of Directors
------------------
Our board of directors currently consists of one member, Mr. Tommy Habeeb.
Our director serves a one-year terms.
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.
34
Committees and Procedures
-------------------------
(1) The registrant has no standing audit, nominating and compensation
committees of the Board of Directors, or committees performing
similar functions. The Board acts itself in lieu of committees due
to its small size.
(2) The view of the board of directors is that it is appropriate for the
registrant not to have such a committee because its directors
participate in the consideration of director nominees and the
board and the company are so small.
(3) The members of the Board who acts as nominating committee is
not independent, pursuant to the definition of independence of a
national securities exchange registered pursuant to section 6(a)
of the Act (15 U.S.C. 78f(a).
(4) The nominating committee has no policy with regard to the
consideration of any director candidates recommended by security
holders, but the committee will consider director candidates
recommended by security holders.
(5) The basis for the view of the board of directors that it is
appropriate for the registrant not to have such a policy is that
there is no need to adopt a policy for a small company.
(6) The nominating committee will consider candidates recommended by
security holders, and by security holders in submitting such
recommendations.
(7) There are no specific, minimum qualifications that the nominating
committee believes must be met by a nominee recommended by security
holders except to find anyone willing to serve with a clean
background.
(8) The nominating committee's process for identifying and evaluation
of nominees for director, including nominees recommended by security
holders, is to find qualified persons willing to serve with a clean
backgrounds. There are no differences in the manner in which the
nominating committee evaluates nominees for director based on
whether the nominee is recommended by a security holder, or found
by the board.
Code of Ethics
--------------
We have not adopted a Code of Ethics for the Board and any salaried employees.
35
Limitation of Liability of Directors
------------------------------------
Pursuant to the Nevada General Corporation Law, our Articles of Incorporation
exclude personal liability for our Directors for monetary damages based upon
any violation of their fiduciary duties as Directors, except as to liability
for any breach of the duty of loyalty, acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, or any
transaction from which a Director receives an improper personal benefit. This
exclusion of liability does not limit any right which a Director may have to
be indemnified and does not affect any Director's liability under federal or
applicable state securities laws. We have agreed to indemnify our directors
against expenses, judgments, and amounts paid in settlement in connection with
any claim against a Director if he acted in good faith and in a manner he
believed to be in our best interests.
Nevada Anti-Takeover Law and Charter and By-law Provisions
----------------------------------------------------------
The anti-takeover provisions of Sections 78.411 through 78.445 of the Nevada
Corporation Law apply to MMAX Media, Inc. Section 78.438 of the
Nevada law prohibits the Company from merging with or selling more than 5%
of our assets or stock to any shareholder who owns or owned more than 10% of
any stock or any entity related to a 10% shareholder for three years after
the date on which the shareholder acquired the MMAX Media, Inc. shares,
unless the transaction is approved by MMAX Media, Inc.'s Board of
Directors. The provisions also prohibit the Company from completing any of
the transactions described in the preceding sentence with a 10% shareholder
who has held the shares more than three years and its related entities
unless the transaction is approved by our Board of Directors or a majority
of our shares, other than shares owned by that 10% shareholder or any
related entity. These provisions could delay, defer or prevent a change
in control of MMAX Media, Inc.
36
Item 11. Executive Compensation
The following table sets forth summary compensation information for the
fiscal year ended September 30, 2010 for our CEO and sole director. We
did not have any executive officer as of the fiscal year end of September 30,
2009 receive any compensation.
Compensation
------------
Summary Compensation Table
--------------------------
All
Fiscal Other
Year Compen-
ending Salary Bonus Awards sation Total
Name and Principal Position Sept 30 ($) ($) ($) ($) ($)
-------------------------------------------------------------------------------
Tommy Habeeb CEO/Dir. 2010 62,500 -0- -0- 381,802 444,302
J. Chad Guidry Former 2008 -0- -0- -0- -0- -0-
CEO/Dir. 2007 -0- -0- -0- -0- -0-
We do not maintain key-man life insurance for our executive officer/
director. We do not have any long-term compensation plans or stock option
plans.
Stock Compensation
------------------
On February 1, 2010 the Company entered into an employment agreement with
Tommy Habeeb in which stock shall be vested at the time of execution of the
Agreement in the amount of 1,090,862 (one million ninety thousand eight
hundred sixty-two) shares of unregistered common stock, which shares shall
be fully paid and non-assessable obligations of the Company. In the event
that Mr. Habeeb leaves the Company or substantially abandons his duties as
set forth the Agreement, Mr. Habeeb shall be obliged to forgo his right and
ownership of any stock not yet vested (ESOP plan). In June of 2010,
Mr. Habeeb agreed to accept payment of $12,500 per month as compensation
for his work and services for the Company. He has received two payments of
$12,500 each so far pursuant to this agreement.
Outstanding Equity Awards at 2010 Fiscal Year-End
-------------------------------------------------
We did not have any outstanding equity awards as of September 30, 2010.
37
Potential Payments Upon Termination or Change in Control
--------------------------------------------------------
We have not entered into any compensatory plans or arrangements with respect
to our named executive officer, which would in any way result in payments to
such officer because of her resignation, retirement, or other termination of
employment with us or our subsidiaries, or any change in control of, or a
change in his responsibilities following a change in control.
Item 12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters.
The following table presents information, to the best of our knowledge, about
the ownership of our common stock on January 28, 2011 relating to those
persons known to beneficially own more than 5% of our capital stock and by
our named executive officer and sole director.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and does not necessarily indicate
beneficial ownership for any other purpose. Under these rules, beneficial
ownership includes those shares of common stock over which the stockholder has
sole or shared voting or investment power. It also includes shares of common
stock that the stockholder has a right to acquire within 60 days after January
12, 2009 pursuant to options, warrants, conversion privileges or other right.
The percentage ownership of the outstanding common stock, however, is based on
the assumption, expressly required by the rules of the Securities and Exchange
Commission, that only the person or entity whose ownership is being reported
has converted options or warrants into shares of MMAX Media, Inc.'
common stock.
38
We do not have any outstanding options, warrants or other securities
exercisable for or convertible into shares 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 Tommy Habeeb 1,090,862 8.8% Nil
Director & CEO
Common Bill Kotler 884,486 7.1% Nil
Common J. Chad Guidry 3,100,000 24.9% 2.0%
Common Montage Ventures 960,862 7.7% Nil
Group, LLC (3)
Common Cede & Co. 2,176,499 17.5% 1.4%
Ownership upon conversion of
Shareholders' preferred stock
Common Processing Pros, Inc.(4) 6,386,020 0.0% 4.1%
-----------------------------------------
DIRECTORS AND OFFICERS AS A GROUP
(1 person) 1,090,862 8.8% Nil
(1) Percent of Class based on 12,403,374 shares before conversion of Series
A Callable and Convertible Preferred shares.
(2) Percent of Class based on 154,231,000 after conversion of the 750,000
Series A Callable and Convertible Preferred shares.
(3) Montage Ventures Group, LLC, beneficially controlled and owned by
Larry Biggs, 3523 McKinney Ave., Number 224, Dallas, TX 75204.
(4) Processing Pros, Inc., a Nevada corporation, beneficially controlled
and owned by Marcus Luna, President, Secretary, Treasurer and Director,
1000 N. Green Valley Pkwy., #300-137, Henderson, NV 89074.
We are not aware of any arrangements that may result in "changes in control"
as that term is defined by the provisions of Item 403(c) of Regulation S-B.
We believe that all persons named have full voting and investment power with
respect to the shares indicated, unless otherwise noted in the table. Under the
rules of the Securities and Exchange Commission, a person (or group of persons)
is deemed to be a "beneficial owner" of a security if he or she, directly or
indirectly, has or shares the power to vote or to direct the voting of such
security, or the power to dispose of or to direct the disposition of such
security. Accordingly, more than one person may be deemed to be a beneficial
owner of the same security. A person is also deemed to be a beneficial owner of
any security, which that person has the right to acquire within 60 days,
such as options or warrants to purchase our common stock.
39
Item 13. Certain Relationships and Related Transactions, and Director
Independence.
We have not entered into any transactions with our officers, Directors,
persons nominated for these positions, beneficial owners of 5% or more of
our common stock, or family members of these persons wherein the amount
involved in the transaction or a series of similar transactions exceeded
$60,000.
There is a potential conflict of interest between the Company and
Mr. Tommy Habeeb, the Company's sole officer and director. Mr. Habeeb
has other business interests to which he currently devotes attention, and is
expected to continue to do so. As a result, conflicts of interest may arise
that can be resolved only through his exercise of judgment in a manner which
is consistent with his fiduciary duties to the Company. Insofar as the
officer and director is engaged in other business activities, management
anticipates that he will devote only a minor amount of time to our affairs.
However, should such a conflict arise, there is no assurance that Mr. Habeeb
would not attend to other matters prior to those of the Company. Mr. Habeeb
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 stated with precision.
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
De Joya Griffith & Company, Certified Public Accountants, to perform
audited financials for the Company. De Joya Griffith & Company own no
stock in the Company. The company has no formal contracts with its
accountants, they are paid on a fee for service basis.
40
Item 14. Principal Accountant Fees and Services.
De Joya Griffith & Company served as our principal independent public
accountants for the fiscal year ending September 30, 2010, while Seale and
Beers, CPAs served as our principal independent public accountants for
fiscal year ending September 30, 2009. Aggregate fees billed to us for the
years ended September 30, 2010 and 2009 by our current and former auditor
are as follows:
For the Years Ended
September 30,
-------------------
2010 2009
-------------------
(1) Audit Fees(1) $10,000 $7,750
(2) Audit-Related Fees -0- -0-
(3) Tax Fees -0- -0-
(4) All Other Fees -0- -0-
Total fees paid or accrued to our principal auditor
(1) Audit Fees include fees billed and expected to be billed for services
performed to comply with Generally Accepted Auditing Standards (GAAS),
including the recurring audit of the Company's financial statements for such
period included in this Annual Report on Form 10-K and for the reviews of the
quarterly financial statements included in the Quarterly Reports on Form 10-Q
filed with the Securities and Exchange Commission.
Audit Committee Policies and Procedures
---------------------------------------
We do not have an audit committee; therefore our sole director pre-approves
all services to be provided to us by our independent auditor. This process
involves obtaining (i) a written description of the proposed services, (ii)
the confirmation of our Principal Accounting Officer that the services are
compatible with maintaining specific principles relating to independence, and
(iii) confirmation from our securities counsel that the services are not among
those that our independent auditors have been prohibited from performing under
SEC rules. Our sole director then makes a determination to approve or
disapprove the engagement of De Joya Griffith & Company for the proposed
services. In the fiscal year ending September 30, 2010, all fees paid to
De Joya Griffith & Company were unanimously pre-approved in accordance with
this policy.
Less than 50 percent of hours expended on the principal accountant's
engagement to audit the registrant's financial statements for the most recent
fiscal year were attributed to work performed by persons other than the
principal accountant's full-time, permanent employees.
41
PART IV
Item 15. Exhibits, Financial Statement Schedules.
The following information required under this item is filed as part of this
report:
(a) 1. Financial Statements
Page
----
Management's Report on Internal Control Over Financial Reporting 28
Independent Auditors' Report for the year ended
September 30, 2010 F-1
Independent Auditors' Report for the year ended
September 30, 2009 F-2
Balance Sheets F-3
Statements of Operations F-4
Statements of Changes in Stockholders' Equity F-5-9
Statements of Cash Flows F-10
(b) 2. Financial Statement Schedules
None.
42
(c) 3. Exhibit Index
Incorporated by reference
-------------------------
Filed Period Filing
Exhibit Exhibit Description herewith Form ending Exhibit date
------------------------------------------------------------------------------
3.1 Articles of Incorporation, S-1 9/30/08 3.1 11/04/08
dated May 30, 2006
------------------------------------------------------------------------------
3.2 Bylaws dated May 31, 2006 S-1 9/30/08 3.2 11/04/08
as currently in effect
------------------------------------------------------------------------------
3.3 Amended Articles of Incorporation S-1 9/30/08 3.3 11/04/08
dated February 23, 2007
as currently in effect
------------------------------------------------------------------------------
3.4 Articles/Designation dated S-1 9/30/08 3.4 11/04/08
April 29, 2008 as currently
in effect
------------------------------------------------------------------------------
10.1 Preferred share lock-up
agreement dated Apr. 1, 2009 10-Q 3/31/09 10.1 4/21/09
------------------------------------------------------------------------------
23.1 Consent Letter from De Joya X
Griffith & Company
------------------------------------------------------------------------------
23.2 Consent Letter from Seale X
and Beers, CPAs
------------------------------------------------------------------------------
31.1 Certification of CEO X
and Principal Financial
Officer, pursuant to Section
302 of the Sarbanes-Oxley
Act
------------------------------------------------------------------------------
31.2 Certification of CEO X
and Principal Financial
Officer, pursuant to Section
906 of the Sarbanes-Oxley
Act
------------------------------------------------------------------------------
43
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
MMAX Media, Inc.
---------------------------------
Registrant
By: /s/ Tommy Habeeb
---------------------------
Tommy Habeeb
Chief Executive Officer
and Director
Principal Executive Officer
Principal Financial and
Principal Accounting Officer
Date: January 28, 2011
----------------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated have signed this report below.
Name
By: /s/ Tommy Habeeb
--------------------------------
Tommy Habeeb
Chief Executive Officer, Secretary,
Treasurer and Director
(Principal Executive,
Principal Financial and
Principal Accounting Officer)
Date: January 28, 2011
----------------
44
