Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2010
OR
[ ] 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 000-27795
DATAMILL MEDIA CORP.
(Exact name of registrant as specified in its charter)
Nevada 98-0427526
(State of Incorporation) (I.R.S. Employer Identification No.)
1205 Hillsboro Mile, Suite 203
Hillsboro Beach, Florida 33062
(Address of principal executive offices)
Registrant's telephone number, including area code: (954) 876-1181
7731 So. Woodridge Drive, Parkland, FL 33067 Telephone: (954)592-5322
(Former address and telephone number, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.001 par value
Title of Each Class
Indicate by check mark if the registrant is a well-known seasoned issuer as
defined in Rule 405 of the Securities Act. Yes [ ] No [X]
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 [ ] No [X]
Indicate by check mark whether the registrant: (1) has filed all reports
required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that he registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Website, if any, every Interactive Data File required to
be submitted and posted pursuant to Rule 405 of Regulation S-T (Sec. 232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit or post such files). Yes [ ] No [ ]
Indicate by check mark 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 the 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 check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
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 [ ] Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act). Yes [X] No [ ]
The aggregate marker value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
last sold, or the average bid and asked price of such common equity, as of the
last business day of the Registrant's most recently completed second fiscal
quarter (June 30, 2010) was approximately $ -0- because the Registrant's common
equity was not quoted or traded on such date.
As of March 15, 2011, there were 10,325,000 shares of our common stock
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE: NONE
ITEMS PAGE
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PART I
Item 1. Business 4
Item 1A Risk Factors 8
Item 1B Unresolved Staff Comments 8
Item 2. Properties 8
Item 3. Legal Proceedings 8
Item 4. (Removed and Reserved) 8
PART II
Item 5. Market For Common Equity and Related Stockholder Matters and
Issuer Purchases of Equity Securities 9
Item 6. Selected Financial Data 11
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations 11
Item 7A. Quantitative and Qualitative Disclosure About Market Risks 14
Item 8. Financial Statements and Supplementary Data 14
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure 14
Item 9A. Controls and Procedures 14
Item 9B. Other Information 16
PART III
Item 10. Directors, Executive Officers and Corporate Governance 16
Item 11. Executive Compensation 18
Item 12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters 19
Item 13 Certain Relationships and Related Transactions, and Director
Independence 20
Item 14. Principal Accounting Fees and Services 21
PART IV
Item 15. Exhibits, Financial Statement Schedules 22
2
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This 2010 Annual Report on Form 10-K ("2010 Annual Report"), including the
accompanying financial statements of the Company and the notes thereto appearing
in Item 8 herein ("Financial Statements"), the Management's Discussion and
Analysis of Financial Condition and Results of Operations appearing in Item 7
herein ("MD&A") and the other Exhibits and Financial Statement Schedules filed
as a part hereof or incorporated by reference herein may contain or incorporate
by reference information that includes or is based on "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Forward-looking statements
give expectations or forecasts of future events. The reader can indentify these
forward-looking statements by the fact that they do not relate strictly to
historical or current facts. They use words such as "believe(s)," "goal(s),"
"target(s)," "estimate(s)," "anticipate(s)," "forecast(s)," "project(s),"
(plan(s)," "intend(s)," "expect(s)," "might," may" and other words and terms of
similar meaning in connection with a discussion of future operating, financial
performance or financial condition. Forward-looking statements, in particular,
include statements relating to future actions, prospective services or products,
future performance or results of current and anticipated services or products,
sales efforts, expenses, the outcome of contingencies such as legal proceedings,
trends of operations and financial results.
Any or all forward-looking statements may turn out to be wrong, and,
accordingly, readers are cautioned not to place undue reliance on such
statements, which speak only as of the date of this 2010 Annual Report. These
statements are based on current expectations and current the current economic
environment. They involve a number of risks and uncertainties that are difficult
to predict. These statements are not guarantees of future performance; actual
results could differ materially from those expressed or implied in the
forward-looking statements. Forward-looking statements can be affected by
inaccurate assumptions or by known or unknown risks and uncertainties. Many such
factors will be important in determining the Company's actual results and
financial condition. The reader should consider the following list of general
factors that could affect the Company's future results and financial condition.
Among the general factors that could cause actual results and financial
condition to differ materially from estimated results and financial condition
are:
* the success or failure of management's efforts to implement their
business strategy;
* the ability of the Company to raise sufficient capital to meet
operating requirements;
* the uncertainty of consumer demand for our products, services and
technologies;
* the ability of the Company to protect our intellectual property
rights;
* the ability of the Company to compete with major established
companies;
* the level of success and costs expended in realizing economies of
scale and implementing significant business consolidations and
technology initiatives;
* heightened competition, including, with respect to pricing, entry of
new competitors and the development of new products by new and
existing competitors;
* absolute and relative performance of our products and services;
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* the effect of changing economic conditions;
* the ability of the Company to attract and retain quality employees and
management;
* the current global recession and financial uncertainty; and
* other risks which may be described in future filings with the U.S.
Securities and Exchange Commission ("SEC").
No assurances can be given that the results contemplated in any
forward-looking statements will be achieved or will be achieved in any
particular timetable. We assume no obligation to publicly correct or update any
forward-looking statements as a result of events or developments subsequent to
the date of this 2010 Annual Report. The reader is advised, however, to consult
any further disclosures we make on related subjects in our filings with the SEC.
PART I
ITEM 1. BUSINESS.
CORPORATE BACKGROUND
We were originally incorporated under the laws of Canada in 1990, under the
name "Creemore Star Printing, Inc." On June 15, 1990, we changed our name to
"Smitten Press: Local Lore and Legends, Inc." We domesticated in the State of
Nevada by filing Articles of Domestication in Nevada on May 8, 2007, and we were
incorporated in the State of Nevada on May 8, 2007, under the name "Smitten
Press: Local Lore and Legends, Inc. On June 30, 2010, we changed our name to
Datamill Media Corp. The Company has been in the developmental stage since
inception and has conducted virtually no business operations. We may be referred
to in this Annual Report as "Datamill Media Corp.," "Company," "we," "us" and
"our.
On August 30, 2007, the Company's controlling shareholder, the Estate of
Richard Smitten, through its executor, Kelley Smitten, sold 152,700 restricted
shares of the Company's common stock held by the estate, which represented 68%
of the then outstanding common stock, in a private transaction, to Robert L. Cox
in exchange for cash consideration of $600,000 (the "Transaction"). As a result,
Robert L. Cox became the Company's controlling shareholder and new CEO. Robert
L. Cox did not engage in any loan transaction in connection with the
Transaction, and utilized his personal funds.
On September 14, 2009, the Company's then controlling shareholder, Carl
Feldman (who obtained his controlling interest from Robert Cox in June of 2008
in a private transaction), sold 202,700 restricted shares of the Company's
common stock held in the name of Mr. Feldman, which represented 62% of the then
outstanding common stock, in a private transaction, to Vincent Beatty in
exchange for cash consideration of $10,000 (the "Transaction"). As a result,
Vincent Beatty became the Company's controlling shareholder. Mr. Beatty engaged
in a loan transaction in connection with the above mentioned stock purchase.
On April 30, 2010, the holders of a majority of the shares of Common Stock
of the Registrant acting on written consent elected Vincent Beatty as Director
and President of the Company.
On April 30, 2010, our Board of Directors approved a reverse split of our
Common Stock on the basis of one new share of Common Stock for each one hundred
shares of Common Stock held of record at the close of business on June 30, 2010,
and an increase in the number of authorized common stock from 50,000,000 shares
to 150,000,000 shares. These corporate actions were ratified on April 30, 2010
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by holders of a majority of the shares of Common Stock of the Registrant acting
on written consent and the Amendment was filed with the State of Nevada on May
7, 2010.
BUSINESS OVERVIEW
Although we have not decided on the subject matter or extent of the
materials, we plan to prepare and publish educational white papers to help
businesspeople make the decisions for their companies when accessing the capital
markets. Conducting a securities offering or being a publicly traded company
involves a complex myriad of federal and state laws, rules and regulations, as
well as customary best practices and procedures, any of which easily can be
misunderstood, misinterpreted or misapplied. We believe that the more management
teams know and understand about these endeavors and the issues that they will
face, the better able they are to make informed decisions.
We are a management consulting firm that plans to educate and assist small
businesses to improve their management, corporate governance, regulatory
compliance and other business processes, with a focus on capital market
participation. We will provide solutions to clients at various stages of the
business lifecycle:
* Educational products to improve business processes or explore entering
the capital markets;
* Startup consulting to early-stage companies planning for growth;
* Management consulting to companies seeking to enter the capital
markets via self-underwriting or direct public offering or to move
from one capital market to another; and
* Compliance services to fully reporting, publicly traded companies.
We have never engaged in the type of consulting services we will be
offering and cannot assure any one we will ever achieve profitability.
We plan to help companies to understand and prepare to meet the obligations
incumbent upon public reporting companies to access the public capital markets
primarily through the companies' self underwriting or direct public offerings of
their securities. We also plan to guide and assist them in maintaining their
periodic reporting compliance process. We plan to focus on the small business
market, which we believe is underserved by larger management consulting services
firms. We are a fully reporting, small business issuer.
We will initially target clients throughout the United States. Once our
website is fully developed (which we anticipate being done by July 1, 2011), we
will begin marketing our services via emails, direct mailing and telephone
calls.
We plan to generate revenue primarily from consulting services that we
provide to private company clients seeking to become fully reporting, publicly
traded companies. We also plan to generate revenue from regulatory compliance
services that we plan to provide to public company clients that are required to
file periodic and other reports with the United States Securities and Exchange
Commission ("SEC"). The regulatory compliance services consist of assistance
with the preparation of financial statements, work papers, schedules and SEC
filings for review by a client's audit firm and securities attorney, assistance
with the EDGARization of SEC filings referring clients to auditors, attorneys
and transfer agents that have a proven track record with their clients. We plan
to offer these services for a flat-fee consisting of cash and restricted shares
of our clients' common stock. Our revenue recognition policy for management
consulting services is based on the value received by our customers at
measurable milestones during the process that our clients undergo in becoming
public companies. We also plan to generate revenue from sales of our database of
educational white papers, instruction manuals, instruction booklets and example
templates to the public and open line consultations with potential clients
regarding their prospects of becoming public companies. As of the date of this
Annual Report, we have not determined the amount of fees that we will charge for
our services.
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Our business office is located at 1205 Hillsboro Mile, Suite 203,
Hillsboro Beach, FL 33062, and our telephone number is (954) 876-1181. Our
website is www.datamillmedia.com. Our fiscal year end is December 31.
REGULATORY REQUIREMENTS
We are not required to obtain any special licenses, nor meet any special
regulatory requirements before establishing our business, other than a simple
business license. If new government regulations, laws, or licensing requirements
are passed that would restrict or eliminate delivery of any of our intended
products, then our business may suffer. Presently, to the best of our knowledge,
no such regulations, laws, or licensing requirements exist or are likely to be
implemented in the near future that would reasonably be expected to have a
material impact on or sales, revenues, or income from our business operations.
We are not a broker-dealer or Investment Advisor.
MARKETING AND REVENUES
Initially, our business will be promoted by our two officers and directors.
We also anticipate utilizing other marketing avenues in the future in our
attempt to make our products known to the general public and attract potential
customers. These marketing activities will be designed to inform potential
customers about the benefits of using our services and may include the
following: development and distribution of marketing literature; direct mail and
email advertising; television infomercials; and promotion of our web site.
COMPETITION
We face intense competition in every aspect of our business, and
particularly from other firms which offer management, compliance and other
consulting services to private and public companies. We would prefer to accept a
relatively low cash component as our fee for management consulting and
regulatory compliance services and take a greater portion of our fee in the form
of restricted shares of our private clients' common stock. We also face
competition from a large number of consulting firms, investment banks, venture
capitalists, merchant banks, financial advisors and other management consulting
and regulatory compliance services firms similar to ours. Many of our
competitors have greater financial and management resources and some have
greater market recognition than we do.
REPORTS TO SECURITY HOLDERS
1. We are subject to the informational requirements of the Exchange Act.
Accordingly, we will file annual, quarterly and periodic reports,
proxy statements, information statements and other information with
the SEC.
2. The public may read and copy any materials the Company files with the
SEC at the SEC's Public Reference Room at 100 F Street, NE, Room 1580,
Washington, D.C. 20549. The public may call the SEC at 1-800-SEC-0330
for further information on the Public Reference Room. Our SEC filings
will also be available to the public at the SEC's web site at
http://www.sec.gov.
BUSINESS AND LEGAL DEVELOPMENTS REGARDING CLIMATE CHANGE
We do not believe our business will be affected by business and legal
developments regarding climate change. However, in the event we acquire or merge
with a business that could be affected by business and legal developments
regarding climate change, we will certainly analyze such factors and their
potential or actual impact on our future business.
EFFECT OF EXISTING OR PROBABLE GOVERNMENTAL REGULATIONS
The Company's common stock is registered pursuant to Section 12(g) of the
Securities Exchange Act of 1934 ("1934 Act"). As a result of such registration,
the Company is subject to Regulation 14A of the "1934 Act," which regulates
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proxy solicitations. Section 14(a) requires all companies with securities
registered pursuant to Section 12(g) thereof to comply with the rules and
regulations of the Commission regarding proxy solicitations, as outlined in
Regulation 14A. Matters submitted to stockholders of the Company at a special or
annual meeting thereof or pursuant to a written consent will require the Company
to provide its stockholders with the information outlined in Schedules 14A or
14C of Regulation 14; preliminary copies of this information must be submitted
to the Commission at least 10 days prior to the date that definitive copies of
this information are forwarded to stockholders.
The Company is also required to file annual reports on Form 10-K and
quarterly reports on Form 10-Q with the Commission on a regular basis, and will
be required to disclose certain events in a timely manner, (e.g. changes in
corporate control; acquisitions or dispositions of a significant amount of
assets other than in the ordinary course of business; and bankruptcy) in a
Current Report on Form 8-K.
WE ARE SUBJECT TO THE REQUIREMENTS OF SECTION 404 OF THE SARBANES-OXLEY ACT
OF 2002. IF WE ARE UNABLE TO TIMELY COMPLY WITH SECTION 404 OR IF THE COSTS
RELATED TO COMPLIANCE ARE SIGNIFICANT, OUR PROFITABILITY, STOCK PRICE AND
RESULTS OF OPERATIONS AND FINANCIAL CONDITION COULD BE MATERIALLY ADVERSELY
AFFECTED.
The Company is required to comply with the provisions of Section 404 of the
Sarbanes-Oxley Act of 2002, which requires that we document and test our
internal controls and certify that we are responsible for maintaining an
adequate system of internal control procedures for the 2010 fiscal year. We are
currently evaluating our existing controls against the standards adopted by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). During
the course of our ongoing evaluation and integration of the internal controls of
our business, we may identify areas requiring improvement, and we may have to
design enhanced processes and controls to address issues identified through this
review (see Item 9A, below for a discussion of our internal controls and
procedures).
We believe that the out-of-pocket costs, the diversion of management's
attention from running the day-to-day operations and operational changes caused
by the need to comply with the requirement of Section 404 of the Sarbanes-Oxley
Act could be significant. If the time and costs associated with such compliance
exceed our current expectations, our results of operations and the future
fillings of our Company could be materially adversely affected.
DEPENDENCE ON KEY EMPLOYEES AND NEED FOR ADDITIONAL MANAGEMENT AND PERSONNEL
The Company is heavily dependent on the ability of our President, Vincent
Beatty, who has contributed essential technical and management experience to our
business. The Company will be dependent upon Mr. Beatty to recruit good
management for the Company.
In the event of future growth in administration, marketing, manufacturing
and customer support functions, the Company may have to increase the depth and
experience of its management team by adding new members. The Company's success
will depend to a large degree upon the active participation of its key officers
and employees, as well as the continued service of its key management personnel
and its ability to identify, hire, and retain additional qualified personnel.
There can be no assurance that the Company will be able to recruit such
qualified personnel to enable it to conduct its proposed business successfully.
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RESEARCH AND DEVELOPMENT
We have never engaged in any research and development activities nor do we
anticipate engaging in any research and development activities in our near
future.
ITEM 1A. RISK FACTORS.
We are a smaller reporting company and are not required to provide the
information required by this item.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
Not applicable.
ITEM 2. PROPERTIES.
We neither rent nor own any properties at this time. We presently have no
agreements to acquire any properties and have no policy with respect to
investments or interests in real estate, real estate mortgages or securities of,
or interests in, persons primarily engaged in real estate activities.
We currently maintain our executive offices at 1205 Hillsboro Mile, Suite
203, Hillsboro Beach, Florida 33062, which is the home of our President, Vincent
Beatty. We pay no rent or other fees for the use of our office space. We do not
presently believe that we will need to maintain any additional office space in
order to carry out our plan of operations as described herein.
ITEM 3. LEGAL PROCEEDINGS.
We are not a party to any legal proceedings. There have been no events
under any bankruptcy act, no criminal proceedings and no judgments, injunctions,
orders or decrees material to the evaluation of the ability and integrity of any
director, executive officer, promoter or control person of ours during the past
10 years.
On December 22, 2010, we received a demand letter from Cort Poyner, an
individual, for payment in the amount of $78,676, which is a liability disclosed
in our financial statements. However, we believe that this liability is
meritless and is to Simply Fit Holdings Group, Inc., a defunct company. In
February 2011, the Company and Mr. Poyner decided not to litigate the claim, but
to work out a resolution of the claim over the next six months. However, we can
offer no assurance that an amicable resolution will occur.
ITEM 4. (REMOVED AND RESERVED).
Not applicable
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES.
As of the date of this Annual Report, our Common Stock is not quoted on the
Over-the-Counter Bulletin Board and is not traded in any market.
Our common stock is considered a "penny stock." The application of the
"penny stock" rules to our common stock could limit the trading and liquidity of
the common stock, adversely affect the market price of our common stock and
increase your transaction costs to sell those shares. The Commission has adopted
regulations which generally define a "penny stock" to be any equity security
that has a market price (as defined) of less than $5.00 per share or an exercise
price of less than $5.00 per share, subject to certain exceptions.
Shareholders should be aware that, according to SEC Release No. 34-29093
dated April 17, 1991, the market for penny stocks has suffered in recent years
from patterns of fraud and abuse. Such patterns include (1) control of the
market for the security by one or a few broker-dealers that are often related to
the promoter or issuer; (2) manipulation of prices through prearranged matching
of purchases and sales and false and misleading press releases; (3) boiler room
practices involving high-pressure sales tactics and unrealistic price
projections by inexperienced sales persons; (4) excessive and undisclosed
bid-ask differential and markups by selling broker dealers; and (5) the
wholesale dumping of the same securities by promoters and broker-dealers after
prices have been manipulated to a desired level, along with the resulting
inevitable collapse of those prices and with consequent investor losses. The
occurrence of these patterns or practices could increase the volatility of our
share price.
Our management is aware of the abuses that have occurred historically in
the penny stock market.
HOLDERS
As of March 15, 2011, there were 41 shareholders of record of the Company's
Common Stock.
DIVIDENDS
The Company has not declared any cash dividends with respect to its common
stock or preferred stock during the last two fiscal years and does not intend to
declare dividends in the foreseeable future. There are no material restrictions
limiting or that are likely to limit the Company's ability to pay dividends on
its outstanding securities.
RECENT ISSUANCE OF UNREGISTERED SECURITIES
In August, 2010, we issued a total of 10,000,000 shares of restricted
common stock to Vincent Beatty, our President and Chairman in lieu of cash
compensation for services rendered valued at $10,000.
The above shares issued to Mr. Beatty were issued in reliance of the
exemption from registration requirements of the 33 Act provided by Section 4(2)
promulgated thereunder, as the issuance of the stock did not involve a public
offering of securities based on the following:
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* the investor represented to us that he was acquiring the securities
for his own account for investment and not for the account of any
other person and not with a view to or for distribution, assignment or
resale in connection with any distribution within the meaning of the
33 Act;
* we provided such investor with written disclosure prior to sale that
the securities have not been registered under the 33 Act and,
therefore, cannot be resold unless they are registered under the 33
Act or unless an exemption from registration is available;
* the investor agreed not to sell or otherwise transfer the purchased
securities unless they are registered under the 33 Act and any
applicable state laws, or an exemption or exemptions from such
registration are available;
* such investor had knowledge and experience in financial and other
business matters such that he was capable of evaluating the merits and
risks of an investment in us;
* such investor was given information and access to all of our
documents, records, books, officers and directors, our executive
offices pertaining to the investment and was provided the opportunity
to ask questions and receive answers regarding the terms and
conditions of the offering and to obtain any additional information
that we possesses or were able to acquire without unreasonable effort
and expense;
* such investor had no need for liquidity in their investment in us and
could afford the complete loss of their investment in us;
* we did not employ any advertisement, article, notice or other
communication published in any newspaper, magazine or similar media or
broadcast over television or radio;
* we did not conduct, hold or participate in any seminar or meeting
whose attendees had been invited by any general solicitation or
general advertising;
* we placed a legend on each certificate or other document that
evidences the securities stating that the securities have not been
registered under the 33 Act and setting forth or referring to the
restrictions on transferability and sale of the securities;
* we placed stop transfer instructions in our stock transfer records;
* no underwriter was involved in the offering; and
* we made independent determinations that such person was a
sophisticated or accredited investor and that he was capable of
analyzing the merits and risks of their investment in us, that he
understood the speculative nature of their investment in us and that
he could lose their entire investment in us.
ISSUER PURCHASES OF EQUITY SECURITIES
None.
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ITEM 6. SELECTED FINANCIAL DATA.
Not applicable.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION.
CAUTIONARY FORWARD - LOOKING STATEMENT
The following discussion should be read in conjunction with our financial
statements and related notes.
Certain matters discussed herein may contain forward-looking statements
that are subject to risks and uncertainties. Such risks and uncertainties
include, but are not limited to, the following:
* the volatile and competitive nature of our industry,
* the uncertainties surrounding the rapidly evolving markets in which we
compete,
* the uncertainties surrounding technological change of the industry,
* our dependence on its intellectual property rights,
* the success of marketing efforts by third parties,
* the changing demands of customers and
* the arrangements with present and future customers and third parties.
Should one or more of these risks or uncertainties materialize or should
any of the underlying assumptions prove incorrect, actual results of current and
future operations may vary materially from those anticipated. See also the
disclosures under "Cautionary Statement" following the Table of Contents in this
Annual Report.
The following discussion and analysis of the results of operations and
financial condition of Datamill Media Corp. for the fiscal years ended December
31, 2010 and 2009, should be read in conjunction with the audited financial
statements, and the notes to those financial statements that are included
elsewhere in this annual report. References to "we," "our," or "us" in this
section refers to the company and its subsidiaries. Our discussion includes
forward-looking statements based upon current expectations that involve risks
and uncertainties, such as our plans, objectives, expectations and intentions.
Actual results and the timing of events could differ materially from those
anticipated in these forward-looking statements as a result of a number of
factors, including those set forth under the risk factors, forward-looking
statements and business sections in this prospectus. We use words such as
"anticipate," "estimate," "plan," "project," "continuing," "ongoing," "expect,"
"believe," "intend," "may," "will," "should," "could," and similar expressions
to identify forward-looking statements.
We are a development stage corporation and have recently started our
business operations, and have not yet generated or realized any revenues.
Our auditors have issued a going concern opinion. This means that our
auditors believe there is substantial doubt that we can continue as an on-going
business for the next twelve months unless we obtain additional capital to pay
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our bills. It is our belief that the amount raised in our planned public
offering will last twelve months. The difference between the minimum and maximum
amount relates to the website development; marketing and advertising; product
inventory; computer equipment; and hiring one employee. In each case, if we
raise the maximum amount, we will devote more funds to the same in order to
enhance the quality of the website and promote our business plan to potential
customers.
PLAN OF DEVELOPMENT STAGE ACTIVITIES
Assuming we raise at least $20,000 in our planned public offering of
securities, we believe we can satisfy our cash requirements during the next 12
months. Assuming we raise the maximum amount of $100,000 in such offering, we
believe we can implement our business plan, finalize our product research and
development, purchase the required computer equipment and stock our inventory
with the electronic and hard copies of the instruction manuals, instruction
booklets and example templates relating to the consulting and educational
services we intend to provide, including, but not limited to corporate
management, corporate governance, regulatory compliance and various business
processes. Further, we do not expect significant changes in the number of
employees. If we cannot generate sufficient revenues to continue operations, we
will suspend or cease operations. Upon completion of our public offering, our
goal is to expand and market our operations.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Our financial statements and accompanying notes are prepared in accordance
with generally accepted accounting principles in the United States. Preparing
financial statements requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, revenue and expenses. These
estimates and assumptions are affected by management's applications of
accounting policies. Significant estimates in 2010 and 2009 include an estimate
of the deferred tax asset valuation allowance, valuation of stock based
payments, and valuation of contributed services.
In May 2009, the Financial Accounting Standards Board ("FASB") issued an
accounting standard that became part of ASC Topic 855, "Subsequent Events". ASC
Topic 855 establishes general standards of accounting for and disclosure of
events that occur after the balance sheet date but before financial statements
are issued or are available to be issued. ASC Topic 855 sets forth (1) the
period after the balance sheet date during which management of a reporting
entity should evaluate events or transactions that may occur for potential
recognition or disclosure in the financial statements, (2) the circumstances
under which an entity should recognize events or transactions occurring after
the balance sheet date in its financial statements and (3) the disclosures that
an entity should make about events or transactions that occurred after the
balance sheet date. ASC Topic 855 is effective for interim or annual financial
periods ending after June 15, 2009. The adoption of ASC Topic 855 did not have a
material effect on the Company's financial statements.
In June 2009, the FASB issued an accounting standard whereby the FASB
Accounting Standards Codification ("Codification") will be the single source of
authoritative non-governmental United States of America generally accepted
accounting principles ("GAAP"). Rules and interpretive releases of the United
States of America Securities and Exchange Commission ("SEC") under authority of
federal securities laws are also sources of authoritative GAAP for SEC
registrants. ASC Topic 105 is effective for interim and annual periods ending
after September 15, 2009. All existing accounting standards are superseded as
described in ASC Topic 105. All other accounting literature not included in the
Codification is non-authoritative. The Codification has not had a significant
impact on the Company's financial statements.
Other accounting standards that have been issued or proposed by the FASB or
other standards-setting bodies that do not require adoption until a future date
are not expected to have a material impact on the financial statements upon
adoption.
12
LIMITED OPERATING HISTORY; NEED FOR ADDITIONAL CAPITAL
There is no historical financial information about us upon which to base an
evaluation of our performance. We are in development stage operations and have
not yet generated any revenues from our operations. We cannot guarantee we will
be successful in our business operations. Our business is subject to risks
inherent in the establishment of a new business enterprise, including limited
capital resources and possible cost overruns.
In addition to this offering and although we have no current plans to do
so, we may seek additional equity financing at some future time in order to
obtain the capital required to implement a substantially expanded business plan
which would include an increase in the current services we intend to offer and
expand our customer base to include clients on a global scale.
We have no assurance that future financing will be available to us on
acceptable terms. If financing is not available to us on satisfactory terms, we
may be unable to continue, develop or expand our operations. Equity financing
could result in additional dilution to our existing shareholders.
RESULTS OF OPERATIONS FOR ANNUAL PERIODS
YEAR ENDED DECEMBER 31, 2010 COMPARED TO YEAR ENDED DECEMBER 31, 2009
The Company has not had any revenue since its inception on June 1, 2003.
As reflected in the accompanying financial statements, the Company had a
net loss from operations of $67,747 ($0.02 per share) and $538 ($0.00 per
share), respectively, for the years ended December 31, 2010 and 2009.
Operating expenses consist of professional fees, general and administrative
expenses and officer compensation. For the year ended December 31, 2010,
operating expenses of $67,747 consisted of 1) professional fees of $41,372 made
up of audit fees of $23,916 and legal fees of $17,456, 2) general and
administrative expenses of $16,375 made up of consulting fees of $12,500, filing
fees of $3,450 and transfer ageny fees of $425. For the year ended December 31,
2009, operating expenses of $538 consisted of transfer agency fees. The dramatic
increase in operating expenses for the year ended December 31, 2010, as compared
with the year ended December 31, 2009, is a result of the Company's effort to
become current in its reporting requirements. An outside accountant was hired as
a consultant to bring the Company's financial statements current from 2008 and
to prepare the necessary schedules and filings for the audit firm and attorney.
The attorney prepared the necessary filings and reviewed the Company's filings
that required his consent.
LIQUIDITY AND CAPITAL RESOURCES
As reflected in the accompanying financial statements, the Company had a
net loss and net cash used in operations of $67,747 and $51,316, respectively,
for the year ended December 31, 2010, compared to a net loss of $538 and $0 for
the year ended December 31, 2009. The $51,316 of net cash used in operations was
offset by stock based compensation of $10,000 issued to the CEO and an increase
of $6,431 in accounts payable for the year ended December 31, 2010.
The Company had net cash provided by financing activities of $51,686 for
the year ended December 31, 2010, compared to no activity for the year ended
December 31, 2009. The $51,686 of net cash provided by financing activities for
the year ended December 31, 2010 consists of a net amount of $31,686 of loans to
the Company by the CEO, a total of $10,000 loaned to the Company by two note
holders and the sum of $10,000 advanced to the Company by an individual that had
advanced funds previously.
13
There was no cash used in investing activities for the years ended December
31, 2010 and 2009.
In addition, the Company had an accumulated deficit during development
stage of $1,137,293 and stockholders' deficit of $151,147 at December 31, 2010
and an accumulated deficit during development stage of $1,069,546 and
stockholders' deficit of $93,400 at December 31, 2009.
To meet our need for cash we are attempting to raise money from an offering
of our common stock. We believe that we will be able to raise enough money
through this offering to begin operations, but we cannot guarantee that once we
begin operations we will stay in business after operations have commenced. If we
are unable to successfully attract customers to utilize our services, we may use
up the proceeds from this offering and will need to find alternative sources,
like a second public offering, a private placement of securities, or loans from
our officers or others in order for us to continue our operations. At present,
we have not made any arrangements to raise additional capital, other than
through a public offering offering.
Although we do not have any written agreements with our officers and
directors to loan us money, Vincent Beatty has verbally expressed his
willingness to loan us money for our operations until this offering has been
completed or until the offering period has expired. If we need additional
capital and cannot raise it we will either have to suspend operations until we
do raise the capital or cease operations entirely. It is our belief that the
amount raised in this offering will last twelve months. Other than as described
in this paragraph, we have no other financing plans.
As of the date of this Annual Report, we have yet to generate any revenues
from our business operations.
As of December 31, 2010, our total assets were $370, comprised of cash, and
our total liabilities were $151,517.
OFF-BALANCE SHEET ARRANGEMENTS
The Company had no off-balance sheet arrangements during 2010 and 2009.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.
Not applicable.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Our financial statements and supplementary data may be found beginning at
page F-1.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
ITEM 9A. CONTROLS AND PROCEDURES.
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
We carried out an evaluation required by Rule 13a-15(b) of the Securities
Exchange Act of 1934, or the Exchange Act, under the supervision and with the
participation of our management, including our Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the design and operation of our
disclosure controls and procedures, as such term is defined in Exchange Act Rule
13a-15(e). Disclosure controls and procedures are designed with the objective of
14
ensuring that (i) information required to be disclosed in an issuer's reports
filed under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the SEC rules and forms and (ii)
information is accumulated and communicated to management, including our Chief
Executive Officer and Chief Financial Officer, as appropriate to allow timely
decisions regarding required disclosures.
The evaluation of our disclosure controls and procedures included a review
of our objectives and processes and effect on the information generated for use
in this report. This type of evaluation is done quarterly so that the
conclusions concerning the effectiveness of these controls can be reported in
our periodic reports filed with the SEC. We intend to maintain these controls as
processes that may be appropriately modified as circumstances warrant.
Based upon such evaluation, such person concluded that as of such date, our
disclosure controls and procedures were not effective at the reasonable
assurance level because, due to financial constraints, the Company does not
maintain a sufficient complement of personnel with an appropriate level of
technical accounting knowledge, experience and training in the application of
generally accepted accounting principles commensurate with our financial
accounting and reporting requirements. There have been no changes in our
internal control over financial reporting identified in connection with the
evaluation that occurred during our last fiscal quarter that has materially
affected, or that is reasonably likely to materially affect, our internal
control over financial reporting. In the event that we may receive sufficient
funds for internal operational purposes, we plan to retain the services of
additional internal management staff to provide assistance to our current
management with the monitoring and maintenance of our internal controls and
procedures.
MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining adequate
internal control over financial reporting, as such term is defined in Exchange
Act Rule 13a-15(f). Under the supervision and with the participation of our
management, including our Chief Executive Officer and Chief Financial Officer,
we conducted an evaluation of the effectiveness of our internal control over
financial reporting as of December 31, 2010 based on the criteria set forth in
Internal Control -- Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on our evaluation under the
criteria set forth in Internal Control -- Integrated Framework, our management
concluded that our internal control over financial reporting was not effective
as of December 31, 2010.
A control system, no matter how well conceived and operated, can provide
only reasonable, not absolute, assurance that the objectives of the control
system are met. Management necessarily applied its judgment in assessing the
benefits of controls relative to their costs. Because of the inherent
limitations in all control systems, no evaluation of controls can provide
absolute assurance that all control issues and instances of fraud, if any,
within the company have been detected. The design of any system of controls is
based in part upon certain assumptions about the likelihood of future events,
and there can be no assurance that any design will succeed in achieving its
stated goals under all potential future conditions, regardless of how remote.
Because of the inherent limitations in a control system, misstatements due to
error or fraud may occur and may not be detected.
This report does not include an attestation report of our independent
registered public accounting firm regarding internal control over financial
reporting. We were not required to have, nor have we engaged our independent
registered public accounting firm to perform, an audit on our internal control
over financial reporting pursuant to the rules of the SEC that permit us to
provide only management's report in this report.
15
Management assessed the effectiveness of our internal control over
financial reporting as of December 31, 2010. In making this assessment,
management used the framework set forth in the report entitled Internal
Control--Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission, or COSO. The COSO framework summarizes
each of the components of a company's internal control system, including (i) the
control environment, (ii) risk assessment, (iii) control activities, (iv)
information and communication, and (v) monitoring.
CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING
During our most recent fiscal quarter, there has not been any change in our
internal control over financial reporting as such term is defined in Exchange
Act Rule 13a-15(f) that has materially affected, or is reasonably likely to
affect, our internal control over financial reporting.
This Annual Report does not include an attestation report of the Company's
registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by the Company's
registered public accounting firm pursuant to temporary rules of the Securities
and Exchange Commission that permit the Company to provide only management's
report in this Annual Report.
ITEM 9B. OTHER INFORMATION.
Not applicable.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Our executive officers are elected by the board of directors and serve at
the discretion of the board. All of the current directors serve until the next
annual shareholders' meeting or until their successors have been duly elected
and qualified. The following table sets forth certain information regarding our
current directors and executive officers:
Name Age Position Director Since
---- --- -------- --------------
Vincent Beatty 48 President, Chief Executive Officer, January 2010
Chief Financial Officer, Chairman of
the Board and Director
Thomas Hagan 68 Secretary and Director January 2011
Certain biographical information of our current directors and officers is
set forth below.
VINCENT BEATTY
Mr. Beatty has been the President, Chief Executive Officer and Chairman of
the Board of Directors of the Company since January 2010. In 1986, Mr. Beatty
became a retail stockbroker where he worked for First New England Securities and
Greenway Capital Corp. During his tenure with these firms, Mr. Beatty helped to
syndicate new public offerings and raised capital for these new issuers.
In 1995, Mr. Beatty opened his own consulting firm, Devken Inc., and has
owned and operated it to the present day. At Devken, Mr. Beatty has transacted
16
several reverse mergers, as well as guided several start-ups in completing their
own Direct Public Offerings. Devken does not offer services similar or
competitive to ours.
From 1980-1983, Mr. Beatty attended Western Illinois University where he
studied Business and Finance.
THOMAS J. HAGAN
Mr. Hagan has been appointed as Secretary and a Director of the Company
effective January 15, 2011, and brings to the Company a strong background in
marketing and general management. He will be responsible for working with
management to develop a comprehensive plan for the Company's business
operations.
Mr. Hagan served as President of The Dorette Company, a manufacturer of
point of purchase advertising products, from January 1987 until October 2002,
and was responsible for a ten-fold increase in sales at that company during his
tenure. From October 2002 to the present time Mr. Hagan has been an independent
management consultant. His prior business experience includes management
positions at General Electric Company in Cleveland, Philadelphia and Schenectady
from 1960 to 1970. As a management consultant at McKinsey & Company from 1970 to
1973, he developed and managed marketing programs for numerous sales
representative organizations, trade shows, key accounts and national accounts.
Mr. Hagan is a graduate of Boston College School of Management, and
received his Masters in Business Administration Degree from Case Western
University. He has also served as a Captain in the U.S. Army Corps of Engineers.
COMMITTEES OF THE BOARD OF DIRECTORS
We do not currently have an audit committee or a compensation committee.
DIRECTORSHIPS
During the past five years, none of our directors or persons nominated or
chosen to become directors held any other directorship in any company with a
class of securities registered pursuant to Section 12 of the 1934 Act or subject
to the requirements of Section 15(d) of such Act or any other company registered
as an investment company under the Investment Company Act of 1940.
ABSENCE OF INDEPENDENT DIRECTORS
We do not have any independent directors and are unlikely to be able to
recruit and retain any independent directors due to our small size and limited
financial resources.
OTHER SIGNIFICANT EMPLOYEES
No other significant employees exist.
FAMILY RELATIONSHIPS
No family relationship exists between or among any of our officers and
directors.
17
CODE OF BUSINESS CONDUCT AND ETHICS
We do not currently have a Code of Business Conduct and Ethics. However, we
intend to adopt such a Code during the next few weeks.
ITEM 11. EXECUTIVE COMPENSATION.
The following table sets forth the aggregate compensation paid by the
Company to our executive officers and directors of the Company for services
rendered during the periods indicated. The Company did not compensate any of its
officers or directors during the fiscal year ended December 31, 2009.
SUMMARY COMPENSATION TABLE
Name and Stock All Other
Principal Position Year(1) Salary($) Bonus($) Awards($) Compensation($) Total($)
------------------ ------- --------- -------- --------- --------------- --------
Vincent Beatty: 2010 $ 0 $ 0 $10,000(1) $ 0 $10,000
Chief Executive Officer 2009 $ 0 $ 0 $ 0 $ 0 $ 0
President and Director
----------
(1) The Company issued 10,000,000 restricted shares of its common stock for
services rendered. The shares were valued at $0.001 per share or $10,000.
DIRECTOR COMPENSATION
We do not have a formal compensation plan for our directors.
EMPLOYMENT CONTRACTS
We do not have any employment agreements with our employees or officers.
STOCK OPTIONS AND WARRANTS
We have no outstanding stock options or warrants.
OPTION/SAR GRANTS TABLE
There were been no stock options/SARS granted to executive officers and
directors, since we have no such plans in effect.
AGGREGATE OPTION/SAR EXERCISES AND FISCAL YEAR-END OPTION/SAR VALUE TABLE
There have been no exercises of stock options/SAR by executive officers
during fiscal 2010 or 2009.
LONG-TERM INCENTIVE PLAN AWARDS
There were been no long-term incentive plan awards made by the company
during fiscal 2010 or 2009.
18
REPRICING OPTIONS
We have not repriced any stock options.
COMPENSATION DISCUSSION AND ANALYSIS
We have prepared the following Compensation Discussion and Analysis to
provide you with information that we believe is necessary to understand our
executive compensation policies and decisions as they relate to the compensation
of our named executive officers.
We have two members on our board of directors and do not currently have a
compensation committee.
The primary objectives of the compensation committee with respect to
executive compensation will be to (i) attract and retain the best possible
executive talent available to us; (ii) motivate our executive officers to
enhance our growth and profitability and increase shareholder value; and (iii)
reward superior performance and contributions to the achievement of corporate
objectives.
The focus of our executive pay strategy will be to tie short-term and
long-term cash and equity incentives to the achievement of measurable corporate
and individual performance objectives or benchmarks and to align executive
compensation with the creation and enhancement of shareholder value. In order to
achieve these objectives, our compensation committee will be tasked with
developing and maintaining a transparent compensation plan that will tie a
substantial portion of our executives' overall compensation to our sales,
operational efficiencies and profitability.
Our board of directors has not set any performance objectives or benchmarks
for 2011, as it intends for those objectives and benchmarks to be determined by
the compensation committee once it is constituted and then approved by the
board. However, we anticipate that compensation benefits will include
competitive salaries, bonuses (cash and equity based), health insurance and
stock option plans.
Our compensation committee will meet at least quarterly to assess the cost
and effectiveness of each executive benefit and the performance of our executive
officers in light of our revenues, expenses and profits.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS.
To our knowledge, the following table sets forth, as of March 15, 2011,
information regarding the ownership of our common stock by:
* Persons who own more than 5% of our common stock
* each of our directors and each of our executive officers; and
* all directors and executive officers as a group.
Each person has sole voting and investment power with respect to the shares
shown, except as otherwise noted.
19
Amount and Nature
of Beneficial Ownership
--------------------------------
Name and Address
of Beneficial Owner Number Shares Percent(1)
------------------- ------------- ----------
Vincent Beatty 10,201,350 98.8%
1205 Hillsboro Mile, Suite 203
Hillsboro, Florida 33062
All officers and directors as a
group (1 person) 10,201,350 98.8%
----------
(1) The numbers and percentages set forth in these columns are based on
10,325,000 shares of common stock outstanding as of March 15, 2011. The
number and percentage of shares beneficially owned is determined in
accordance with Rule 13d-3 of the Securities Exchange Act of 1934, and the
information is not necessarily indicative of beneficial ownership for any
other purpose. Under such rule, beneficial ownership includes any shares as
to which the selling security holder has sole or shared voting power or
investment power and also any shares, which the selling security holder has
the right to acquire within 60 days.
There are no arrangements or understandings among the entities and
individuals referenced above or their respective associates concerning election
of directors or other any other matters which may require shareholder approval.
CHANGES IN CONTROL
We are not aware of any arrangements that may result in a change in control
of the Company.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
INDEPENDENCE.
Although we have not adopted formal procedures for the review, approval or
ratification of transactions with related persons, we adhere to a general policy
that such transactions should only be entered into if they are on terms that, on
the whole, are no more favorable, or no less favorable, than those available
from unaffiliated third parties and their approval is in accordance with
applicable law. Such transactions require the approval of our board of
directors.
On September 14, 2009, the Company's then controlling shareholder, Carl
Feldman, (who obtained his controlling interest from Robert Cox in June 2008 in
a private transaction) sold 201,350 restricted shares of the Company's common
stock held in the name of Mr. Feldman, which represented 62% of the then
outstanding common stock, in a private transaction, to Vincent Beatty in
exchange for cash consideration of $10,000 ("Transaction"). As a result, Vincent
Beatty became the Company's controlling shareholder.
The Company's business offices are located in the home of our President,
Vincent Beatty, and we pay no rent to Mr. Beatty for the use of such offices.
20
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
The Company has renewed the engagement of Salberg & Company, P.A. to serve
as the independent accounting firm responsible for auditing our financial
statements for the fiscal year ended December 31, 2010.
(1) Audit Fees. During the fiscal year ended December 31, 2010, the
aggregate fees billed by the Company's auditors, for services rendered for the
audit of our annual financial statements and the review of the financial
statements included in our quarterly reports on Form 10-Q and for services
provided in connection with the statutory and regulatory filings or engagements
for 2010, was $14,000. During the fiscal year ended December 31, 2009, the
aggregate fees billed by the Company's auditors, for services rendered for the
audit of our annual financial statements and the review of the financial
statements included in our quarterly reports on Form 10-Q and for services
provided in connection with the statutory and regulatory filings or engagements
for 2009, was $9,300.
(2) Audit-Related Fees. During fiscal years ended December 31, 2010 our
auditors billed $1,600 and in 2009, our auditors did not receive any fees for
any audit-related services.
(3) Tax Fees. Our auditors did not provide tax compliance, tax advice, or
tax planning advice during the fiscal years ended December 31, 2010 and 2009.
(4) All Other Fees. None.
(5) Audit Committee's Pre-Approval Policies and Procedures. Effective May
6, 2003, the Securities and Exchange Commission adopted rules that require that
before Principal Accountants are engaged by us to render any auditing or
permitted non-audit related service, the engagement be:
* approved by our audit committee (which consists of our entire board of
directors); or
* entered into pursuant to pre-approval policies and procedures
established by the board of directors, provided the policies and
procedures are detailed as to the particular service, the board of
directors is informed of each service, and such policies and
procedures do not include delegation of the board of directors'
responsibilities to management.
The board of directors pre-approves all services provided by our
independent auditors. All of the above services and fees were reviewed and
approved by the board of directors either before or after the respective
services were rendered.
The board of directors has considered the nature and amount of fees billed
by our principal accountants and believes that the provision of services for
activities unrelated to the audit is compatible with maintaining our principal
accountants' independence.
During the 2010 and 2009 fiscal years, the Company used the following
pre-approval procedures related to the selection of our independent auditors and
the services they provide: unanimous consent of all directors via a board
resolution.
21
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
(a) Financial Statements
Financial statements for Datamill Media Corp. listed in the Index to
Financial Statements and Supplementary Data on page F-1 are filed as part
of this Annual Report.
(b) See Exhibit Index below for exhibits required by Item 601 of Regulation
S-K
EXHIBIT INDEX
List of Exhibits attached or incorporated by reference pursuant to Item 601
of Regulation S-K.
3.1* Articles of Incorporation
3.2* Bylaws
21** Subsidiaries.
31.1** Certification of Principal Executive Officer Pursuant to 18 U.S.C.
Section 1350
31.2** Certification of Principal Financial Officer Pursuant to 18 U.S.C.
Section 1350
32.1** 906 Certification of Principal Executive Officer
32.2** 906 Certification of Principal Financial Officer
----------
* Incorporated by reference from the Company's Form S-1 registration
statement filed with the Securities and Exchange Commission (File No.
333-172010) filed with the Commission February 2, 2011.
** Filed herewith.
22
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
Datamill Media Corp.
Dated: March 16, 2011 /s/ Vincent Beatty
-----------------------------------------------
By: Vincent Beatty
Its: President and Chief Executive Officer
In accordance with the Securities Exchange Act of 1934, this report has
been signed below by the following persons on behalf of the Registrant and in
the capacities and on the dates indicated.
Dated: March 16, 2011 /s/ Vincent Beatty
-----------------------------------------------
By: Vincent Beatty
Its: President, Chief Executive Officer, Chief
Financial Officer and Director
(Principal Executive Officer)
(Principal Accounting and Financial Officer)
Dated: March 16, 2011 /s/ Thomas Hagan
-----------------------------------------------
By: Thomas Hagan
Its: Secretary and Director
23
INDEX TO FINANCIAL STATEMENTS
DATAMILL MEDIA CORP.
(f/k/a SMITTEN PRESS: LOCAL LORE AND LEGENDS, INC.)
(A DEVELOPMENT STAGE COMPANY)
CONTENTS
Page
----
Report of Independent Registered Public Accounting Firm F-2
Balance Sheets at December 31, 2010 and 2009 F-3
Statements of Operations for the Years Ended December 31, 2010 and 2009,
and for the Period from June 1, 2003 (Inception) to December 31, 2010 F-4
Statement of Changes in Stockholders' Deficit for the Years ended
December 31, 2010 and 2009 and for the Period from June 1, 2003
(Inception) to December 31, 2010 F-5
Statements of Cash Flows for the Years Ended December 31, 2010 and 2009,
and for the Period from June 1, 2003 (Inception) to December 31, 2010 F-6
Notes to Financial Statements F-7
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors of:
DataMill Media Corp. (f/k/a Smitten Press: Local Lore and Legends, Inc.)
We have audited the accompanying balance sheets of DataMill Media Corp.
(f/k/a Smitten Press: Local Lore and Legends, Inc.) (a development stage
company) as of December 31, 2010 and 2009 and the related statements of
operations, changes in stockholders' deficit and cash flows for each of the two
years in the period ended December 31, 2010 and for the period from June 1, 2003
(Inception) to December 31, 2010. 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 conducted 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 DataMill Media Corp. (f/k/a
Smitten Press: Local Lore and Legends, Inc.) (a development stage company) as of
December 31, 2010 and 2009, and the results of its operations, and its cash
flows for each of the two years in the period ended December 31, 2010 and for
the period from June 1, 2003 (Inception) to December 31, 2010, in conformity
with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 6 in the
accompanying financial statements, the Company had a net loss and net cash used
in operating activities of $67,747 and $51,316, respectively and had minimal
activity or operations in 2010 and had a deficit accumulated during development
stage of $1,137,293, a working capital deficit of $151,147 and stockholders'
deficit of $151,147 at December 31, 2010 and is a development stage company with
no revenues. These matters raise substantial doubt about the Company's ability
to continue as a going concern. Management's plan in regards to these matters is
also described in Note 6. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Salberg & Company, P.A.
------------------------------------
SALBERG & COMPANY, P.A.
Boca Raton, Florida
March 15, 2011
F-2
DATAMILL MEDIA CORP.
(f/k/a SMITTEN PRESS: LOCAL LORE AND LEGENDS, INC.)
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
December 31,
-----------------------------------
2010 2009
------------ ------------
ASSETS
CURRENT ASSETS
Cash $ 370 $ --
------------ ------------
TOTAL CURRENT ASSETS 370 --
------------ ------------
TOTAL ASSETS $ 370 $ --
============ ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 21,155 $ 14,724
Due to related party-officer 31,686 --
Due to related party -- 78,676
Due to former related party 78,676 --
Advances payable 10,000 --
Notes payable 10,000 --
------------ ------------
TOTAL CURRENT LIABILITIES 151,517 93,400
------------ ------------
TOTAL LIABILITIES 151,517 93,400
------------ ------------
STOCKHOLDERS' DEFICIT
Common stock, $0.001 par value, 150,000,000 shares authorized,
10,325,000 and 325,000 issued and outstanding at December 31,
2010 and 2009, respectively 10,325 325
Additional paid-in capital 1,078,341 1,078,341
Accumulated deficit (102,520) (102,520)
Deficit accumulated during development stage (1,137,293) (1,069,546)
------------ ------------
TOTAL STOCKHOLDERS' DEFICIT (151,147) (93,400)
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 370 $ --
============ ============
See notes to financial statements
F-3
DATAMILL MEDIA CORP.
(f/k/a SMITTEN PRESS: LOCAL LORE AND LEGENDS, INC.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
For the Period
from June 1, 2003
For the Years Ended December 31, (Inception) to
----------------------------------- December 31,
2010 2009 2010
------------ ------------ ------------
Revenues $ -- $ -- $ --
------------ ------------ ------------
OPERATING EXPENSES
Professional fees 41,372 -- 200,609
General and administrative 16,375 538 92,510
Compensation - officer 10,000 -- 840,427
------------ ------------ ------------
Total Operating Expenses 67,747 538 1,133,616
------------ ------------ ------------
Loss from Operations (67,747) (538) (1,133,616)
OTHER EXPENSE
Loss on foreign currency exchange -- -- (3,677)
------------ ------------ ------------
Net Loss $ (67,747) $ (538) $ (1,137,293)
============ ============ ============
Net Loss per share - Basic and diluted $ (0.02) $ (0.00) $ (1.54)
============ ============ ============
Weighted Average Shares Outstanding -
Basic and diluted 3,914,041 325,000 738,564
============ ============ ============
See notes to financial statements
F-4
DATAMILL MEDIA CORP.
(f/k/a SMITTEN PRESS: LOCAL LORE AND LEGENDS, INC.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
For the years ended December 31, 2010 and 2009
and for the period from June 1, 2003 (Inception) to December 31, 2010
Deficit
Accumulated
Common Stock Additional During Total
-------------------- Paid-in Accumulated Development Stockholders'
Shares Par Value Capital Deficit Stage Deficit
------ --------- ------- ------- ----- -------
Balance, June 1, 2003 (Inception) 120,000 $ 120 $ 120,400 $(102,520) $ -- $ --
Common stock issued for book rights 102,500 103 (103) -- -- --
---------- ------- ---------- --------- ----------- ---------
Balance, December 31, 2003 222,500 223 102,297 (102,520) -- --
Contributed officer services -- -- 100,000 -- -- 100,000
Contributed legal services -- -- 2,500 -- -- 2,500
Net loss for the year -- -- -- -- (106,211) (106,211)
---------- ------- ---------- --------- ----------- ---------
Balance, December 31, 2004 222,500 223 204,797 (102,520) (106,211) (3,711)
Contributed legal services -- -- 7,500 -- -- 7,500
Net loss for the year -- -- -- -- (245,365) (245,365)
---------- ------- ---------- --------- ----------- ---------
Balance, December 31, 2005 222,500 223 212,297 (102,520) (351,576) (241,576)
Contributed legal services -- -- 7,500 -- -- 7,500
Net loss for the year -- -- -- -- (162,106) (162,106)
---------- ------- ---------- --------- ----------- ---------
Balance, December 31, 2006 222,500 223 219,797 (102,520) (513,682) (396,182)
Common stock issued for services 100,000 100 392,827 -- -- 392,927
Contributed legal services -- -- 5,000 -- -- 5,000
Contributed capital -- -- 445,719 -- -- 445,719
Net loss for the year -- -- -- -- (470,860) (470,860)
---------- ------- ---------- --------- ----------- ---------
Balance, December 31, 2007 322,500 323 1,063,343 (102,520) (984,542) (23,396)
Contributed officer services -- -- 15,000 -- -- 15,000
Common stock issued for services 2,500 2 (2) -- -- --
Net loss for the year -- -- -- -- (84,466) (84,466)
---------- ------- ---------- --------- ----------- ---------
Balance, December 31, 2008 325,000 325 1,078,341 (102,520) (1,069,008) (92,862)
Net loss for the year -- -- -- -- (538) (538)
---------- ------- ---------- --------- ----------- ---------
Balance, December 31, 2009 325,000 325 1,078,341 (102,520) (1,069,546) (93,400)
Common stock issued for
officer compensation 10,000,000 10,000 -- -- -- 10,000
Net loss for the year -- -- -- -- (67,747) (67,747)
---------- ------- ---------- --------- ----------- ---------
Balance, December 31, 2010 10,325,000 $10,325 $1,078,341 $(102,520) $(1,137,293) $(151,147)
========== ======= ========== ========= =========== =========
See notes to financial statements
F-5
DATAMILL MEDIA CORP.
(f/k/a SMITTEN PRESS: LOCAL LORE AND LEGENDS, INC.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
For the Period
from June 1, 2003
For the Years Ended December 31, (Inception) to
-------------------------------- December 31,
2010 2009 2010
----------- ---------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (67,747) $ (538) $(1,137,293)
Adjustments to reconcile net loss from operations to
net cash used in operating activities:
Contributed services -- -- 115,000
Contributed legal services -- -- 22,500
Stock-based compensation 10,000 -- 402,927
Changes in assets and liabilities:
Accounts payable and accrued expenses 6,431 538 94,536
Accrued compensation - officer -- -- 322,500
----------- ---------- -----------
NET CASH USED IN OPERATING ACTIVITIES (51,316) -- (179,830)
----------- ---------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from related party - officer 36,686 -- 165,200
Repayment to related party - officer (5,000) -- (5,000)
Proceeds from notes payable 10,000 -- 10,000
Proceeds from advances payable 10,000 -- 10,000
----------- ---------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 51,686 -- 180,200
----------- ---------- -----------
NET CHANGE IN CASH 370 -- 370
CASH - beginning of period -- -- --
----------- ---------- -----------
CASH - end of period $ 370 $ -- $ 370
=========== ========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for:
Interest $ -- $ -- $ --
=========== ========== ===========
Income taxes $ -- $ -- $ --
=========== ========== ===========
NON-CASH INVESTING AND FINANCING ACTIVITIES
Reduction of liabilities reflected as
contributed capital $ -- $ -- $ 445,719
=========== ========== ===========
See notes to financial statements
F-6
DATAMILL MEDIA CORP.
(f/k/a SMITTEN PRESS: LOCAL LORE AND LEGENDS, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010 and 2009
NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(A) DESCRIPTION OF BUSINESS
Smitten Press: Local Lore and Legends, Inc. (the "Company") was
incorporated under the laws of Canada on January 15, 1990 under the name
Creemore Star Printing, Inc. The name was changed to Smitten Press: Local Lore
and Legends, Inc. on July 15, 2003. The Company was inactive until June 1, 2003
when it entered the development stage. The Company had planned to offer
magazines and books for sale. Given the continued delay in recovery in New
Orleans due to Hurricane Katrina and the death of the Company's founder and
president Mr. Richard Smitten in September 2006, the Company had determined that
proceeding with its initial business plan will not be viable. It began seeking
other alternatives to preserve stockholder value, including selling a
controlling interest to a third party who would subsequently merge an operating
business into the company. On August 30, 2007 a change in control occurred (see
below). Activities during the development stage include development of a
business plan, obtaining and developing necessary rights to sell our products,
developing a website, and seeking a merger candidate.
On August 30, 2007, the Company's controlling shareholder, the Estate of
Richard Smitten, through its executor, Kelley Smitten, sold 152,700 restricted
shares of the Company's common stock held by the estate, which represented 68%
of the then outstanding common stock, in a private transaction, to Robert L. Cox
in exchange for cash consideration of $600,000 (the "Transaction"). As a result,
Robert L. Cox became the Company's controlling shareholder and new CEO. Robert
L. Cox did not engage in any loan transactions in connection with the
Transaction, and utilized his personal funds.
On September 14, 2009, the Company's then controlling shareholder, Carl
Feldman (who obtained his controlling interest from Robert Cox in June of 2008
in a private transaction), sold 202,700 restricted shares of the Company's
common stock held in the name of Mr. Feldman, which represented 62% of the then
outstanding common stock, in a private transaction, to Vincent Beatty in
exchange for cash consideration of $10,000 (the "Transaction"). As a result,
Vincent Beatty became the Company's controlling shareholder. Mr. Beatty engaged
in a loan transaction in connection with the above mentioned stock purchase.
On April 30, 2010, the holders of a majority of the shares of Common Stock
of the Registrant acting on written consent elected Vincent Beatty as Director
and President of the Company, and Robert Kwiecinski as Director and Secretary of
the Company, to serve in said positions until the next Meeting of Shareholders.
On April 30, 2010, our Board of Directors approved a change in name of the
Registrant to DataMill Media Corp., a reverse-split of our Common Stock on the
basis of one new share of Common Stock for each one hundred shares of Common
Stock held of record at the close of business on June 30, 2010 and an increase
in the number of authorized common stock from 50,000,000 shares to 150,000,000
shares. These corporate actions were ratified on April 30, 2010 by holders of a
majority of the shares of Common Stock of the Registrant acting on written
consent and the Amendment was filed with the State of Nevada on May 7, 2010. The
Registrant was notified by Financial Industry Regulatory Authority ("FINRA")
that the name and new symbol change of DATAMILL MEDIA CORP. "SPLID" became
effective on August 23, 2010. All share and per share data has been adjusted to
reflect the effect of the reverse-split.
(B) BASIS OF PRESENTATION AND FOREIGN CURRENCY
Gains and losses resulting from foreign currency transactions are
recognized in operations in the accompanying financial statements and footnotes
in the period incurred.
F-7
DATAMILL MEDIA CORP.
(f/k/a SMITTEN PRESS: LOCAL LORE AND LEGENDS, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010 and 2009
NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
(C) USE OF ESTIMATES
In preparing financial statements, management is required to make estimates
and assumptions that effect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and revenues and expenses during the periods presented. Actual
results may differ from these estimates.
Significant estimates in 2010 and 2009 include an estimate of the deferred
tax asset valuation allowance, valuation of shares issued for services, and
valuation of contributed services.
(D) CASH EQUIVALENTS
For the purpose of the cash flow statement, the Company considers all
highly liquid investments with original maturities of three months or less at
the time of purchase to be cash equivalents.
(E) WEBSITE DEVELOPMENT COSTS
In accordance with ASC 350-50, formerly EITF Issue No. 00-2, the Company
accounts for its website in accordance with ASC 350-40, formerly Statement of
Position No. 98-1 "Accounting for the Costs of Computer Software Developed or
Obtained for Internal Use" "SOP 98-1".
ASC 350-40 requires the expensing of all costs of the preliminary project
stage and the training and application maintenance stage and the capitalization
of all internal or external direct costs incurred during the application
development stage. The Company amortizes the capitalized cost of software
developed or obtained for internal use over an estimated life of three years.
(F) STOCK-BASED COMPENSATION
The Company follows the provisions of ASC 718-20-10 Compensation - Stock
Compensation which establishes standards surrounding the accounting for
transactions in which an entity exchanges its equity instruments for goods or
services. ASC 718-20-10 focuses primarily on accounting for transactions in
which an entity obtains employee services in share-based payment transactions.
ASC 718-20-10 provides for, and the Company has elected to adopt the modified
prospective application under which compensation cost is recognized on or after
the required effective date for the fair value of all future share based award
grants and the portion of outstanding awards at the date of adoption of this
statement for which the requisite service has not been rendered, based on the
grant-date fair value of those awards calculated under ASC 718-20-10 pro forma
disclosures.
(G) PROMOTER CONTRIBUTION AND CONTRIBUTED SERVICES
The Company accounts for assets provided to the Company by promoters in
exchange for capital stock at the promoter's original cost basis. The value of
services provided to the Company by its officer was $115,000 for the period from
June 1, 2003 (Inception)to December 31, 2010 which was recorded as contributed
services.
(H) REVENUE RECOGNITION
The Company intends on recognizing revenues in accordance with ASC 605-10.
Revenue will be recognized when persuasive evidence of an arrangement exists, as
services are provided or when product is delivered, and when collection of the
fixed or determinable selling price is reasonably assured.
F-8
DATAMILL MEDIA CORP.
(f/k/a SMITTEN PRESS: LOCAL LORE AND LEGENDS, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010 and 2009
NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
(I) INCOME TAXES
The Company accounts for income taxes under ASC 740, formerly Financial
Accounting Standards No. 109 "Accounting for Income Taxes". Under ASC 740,
deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the
period, which includes the enactment date.
In June 2006, the Financial Accounting Standards Board issued FASB
Interpretation No. 48 (FIN-48), Accounting for Uncertainty in Income Taxes--An
interpretation of FASB Statement No. 109 and codified into ASC 740. FIN-48
clarifies the accounting for uncertainty in income taxes recognized in an
entity's financial statements in accordance with Statement of Financial
Accounting Standards No.109, Accounting for Income Taxes. This Interpretation
prescribed a recognition threshold and measurement attribute for the financial
statement recognition and measurement of a tax position taken or expected to be
taken in a tax return. In addition, FIN-48 provides guidance on de-recognition,
classification, interest and penalties, accounting in interim periods,
disclosure, and transition. The Company adopted the provisions of FIN-48 and
they had no impact on its financial position, results of operations, and cash
flows.
Based on its evaluation, the Company has concluded that there are no
significant uncertain tax positions requiring recognition in its financial
statements. The Company's evaluation was performed for the tax years ended
December 31, 2004 through December 31, 2010 for U.S. Federal Income Tax, for the
tax years ended December 31, 2004 through December 31, 2010 for the State of
Florida Corporate Income Tax, the years which remain subject to examination by
major tax jurisdictions as of December 31, 2010.
(J) COMPREHENSIVE INCOME (LOSS)
Comprehensive income (loss) includes net loss as currently reported by the
Company adjusted for other comprehensive income, net of comprehensive losses.
Other comprehensive income for the Company consists of unrealized gains and
losses related to the Company's foreign currency cumulative translation
adjustment. The comprehensive loss for the periods presented in the accompanying
financial statements was not material.
F-9
DATAMILL MEDIA CORP.
(f/k/a SMITTEN PRESS: LOCAL LORE AND LEGENDS, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010 and 2009
NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
(K) FAIR VALUE OF FINANCIAL INSTRUMENTS
ASC 825-10, formerly Statement of Financial Accounting Standards No. 107,
"Disclosures about Fair Value of Financial Instruments," requires disclosures of
information about the fair value of certain financial instruments for which it
is practicable to estimate the value. For purpose of this disclosure, the fair
value of a financial instrument is the amount at which the instrument could be
exchanged in a current transaction between willing parties, other than in a
forced sale or liquidation.
At December 31, 2010 the fair value of current liabilities approximated
book value.
(L) NEW ACCOUNTING PRONOUNCEMENTS
RECENTLY ISSUED ACCOUNTING STANDARDS
In May 2009, the Financial Accounting Standards Board ("FASB") issued an
accounting standard that became part of ASC Topic 855, "Subsequent Events". ASC
Topic 855 establishes general standards of accounting for and disclosure of
events that occur after the balance sheet date but before financial statements
are issued or are available to be issued. ASC Topic 855 sets forth (1) the
period after the balance sheet date during which management of a reporting
entity should evaluate events or transactions that may occur for potential
recognition or disclosure in the financial statements, (2) the circumstances
under which an entity should recognize events or transactions occurring after
the balance sheet date in its financial statements and (3) the disclosures that
an entity should make about events or transactions that occurred after the
balance sheet date. ASC Topic 855 is effective for interim or annual financial
periods ending after June 15, 2009. The adoption of ASC Topic 855 did not have a
material effect on the Company's financial statements.
In June 2009, the FASB issued an accounting standard whereby the FASB
Accounting Standards Codification ("Codification") will be the single source of
authoritative non-governmental United States of America generally accepted
accounting principles ("GAAP"). Rules and interpretive releases of the United
States of America Securities and Exchange Commission ("SEC") under authority of
federal securities laws are also sources of authoritative GAAP for SEC
registrants. ASC Topic 105 is effective for interim and annual periods ending
after September 15, 2009. All existing accounting standards are superseded as
described in ASC Topic 105. All other accounting literature not included in the
Codification is non-authoritative. The Codification has not had a significant
impact on the Company's financial statements.
Other accounting standards that have been issued or proposed by the FASB or
other standards-setting bodies that do not require adoption until a future date
are not expected to have a material impact on the consolidated financial
statements upon adoption.
NOTE 2 - RELATED PARTIES AND ADVANCES PAYABLE
Office space was and is provided on a month-to-month basis by the Company's
CEO for no charge, however, for all periods presented, the value was not
material.
A promoter contributed certain rights and inventory to the Company for
102,500 common shares in 2003. (See Note 4)
F-10
DATAMILL MEDIA CORP.
(f/k/a SMITTEN PRESS: LOCAL LORE AND LEGENDS, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010 and 2009
NOTE 2 - RELATED PARTIES AND ADVANCES PAYABLE (CONTINUED)
During each of the years ended December 31, 2004, 2005, 2006 and December
31, 2007, the Company received proceeds totaling $67,037 from the Company's
former officers ($100, $630, $20, $22,573, and $23,734 respectively) for general
and administrative expenses. Additionally, during 2007, a former officer
advanced cash to the company of $8,846. On August 30, 2007, in connection with
the sale of the Company's common stock in a private transaction (See Note 1),
this debt was settled. Accordingly, the Company reduced this debt by $52,149 and
reflected contributed capital of $52,149 by increasing paid-in capital on the
accompanying balance sheet.
Prior to August 30, 2007, the Company reflected accrued compensation -
officers of $322,500 due to the Company's former officers of $310,000 and
$12,500, respectively. In August 2007, in connection with the sale of certain
common shares of Company's common stock held by a majority stockholder, in a
private transaction (See Note 1), this accrued compensation was settled.
Accordingly, the Company reduced accrued compensation - officers by $322,500 and
reflected contributed capital of $322,500 by increasing paid-in capital on the
accompanying balance sheet.
During the years ended December 31, 2004 through 2007, in connection with
legal services provided by a former officer of the Company, the Company valued
these services at their fair market value and recorded compensation expense and
contributed capital totaling $22,500 for the period from June 1, 2003
(Inception) to December 31, 2010.
During the years ended December 31, 2007 and 2008, an affiliated company
related to the Company's former chief executive officer through common
ownership, advanced funds of $17,199 and $61,477, respectively, to the Company
for working capital purposes. These advances, totaling $78,676, are reflected as
due to related party on the accompanying December 31, 2010 and 2009 balance
sheets, are non-interest bearing and are payable on demand.
On August 23, 2010, the Company issued 10,000,000 restricted shares of its
common stock to its chief executive officer, Vincent Beatty, for services
rendered. The shares were valued at $0.001 per share, a nominal value as there
was no evidence of fair value, or $10,000 and expensed immediately as
compensation.
During the year ended December 31, 2010, the Company received proceeds
totaling $36,686 from the Company's current chief executive officer for general
and administrative expenses and repaid $5,000 of the amount during the same
period. The net amount of $31,686 is reflected as due to related party-officer
on the accompanying December 31, 2010 balance sheet.
NOTE 3 - NOTES AND ADVANCES PAYABLE
As of December 31, 2010, the Company had two Notes Payable with unrelated
parties. On October 20, 2010, two individuals each loaned the Company $5,000 in
exchange for Promissory Notes for the amounts loaned. The notes, with a term of
one year, are due on October 19, 2011 and in lieu of interest, restricted shares
of the Company's common stock will be issued to the note holders. Upon maturity,
the principal amount loaned of $5,000 is due to each note holder and an
aggregate amount of 30,000 restricted common stock shares will be issued to the
note holders, pursuant to the terms of the notes. The value of the shares to be
issued was not material.
In September 2010, an individual advanced $10,000 to the Company. The
advance is non-interest bearing and due on demand. This amount is reflected as
advances payable on the accompanying December 31, 2010 balance sheet.
F-11
DATAMILL MEDIA CORP.
(f/k/a SMITTEN PRESS: LOCAL LORE AND LEGENDS, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010 and 2009
NOTE 4 - STOCKHOLDERS' DEFICIT
In June 2003, the Company issued 102,500 shares to R. L. Smitten who was
considered a promoter for perpetual exclusive rights to market local lore and
legend magazines. There was no net accounting effect of this transaction as the
original cost basis to the promoter was zero.
During 2004, compensation in the amount of $100,000 was recorded to
additional paid-in capital for services provided by the officer.
During 2004, legal expenses in the amount of $2,500 were recorded to
additional paid-in capital for legal services provided.
During 2005, legal expenses in the amount of $7,500 were recorded to
additional paid-in capital for legal services provided.
During 2006, legal expenses in the amount of $7,500 were recorded to
additional paid-in capital for legal services provided.
During 2007, legal expenses in the amount of $5,000 were recorded to
additional paid-in capital for legal services provided.
On May 8, 2007, the Company filed Articles of Domestication and Articles of
Incorporation with the State of Nevada. The Company became a Nevada corporation
and had 50,000,000 shares of $0.001 par value common stock authorized prior to
the 2010 increase to 150,000,000 authorized common shares discussed in Note 1(A)
and elimination of the authorized preferred shares. The effect of the
re-domestication was to reclassify $80,270 to additional paid-in capital from
common stock for the change in par value. All share and per share amounts have
been retroactively reflected for the change.
On August 30, 2007, in connection with the sale of the Company's common
stock in a private transaction (See Note 1), accounts payable amounting to
$73,381 was repaid and the former officer's estate retained the remaining cash
balance of $2,311. Accordingly, the Company reduced accounts payable by $73,381
and reduced cash by $2,311 and reflected a contributed capital of $71,070 by
increasing paid-in capital on the accompanying balance sheet.
On August 30, 2007, in connection with the sale of the Company's common
stock in a private transaction (See Note 1), amounts due to former officers of
the company of $52,149 and accrued compensation - officers of $322,500 was
settled. Accordingly, the Company reflected a contributed capital of $374,649 by
increasing paid-in capital on the accompanying balance sheet.
On September 30, 2007, the Company issued 100,000 shares of its common
stock to its chief executive officer for services rendered. The shares were
valued and expensed at $392,927 or $0.039 per share which was a contemporaneous
sale price in a private transaction where a former officer's estate sold a
portion of his common shares of the Company to the new officer (see Note 1).
During 2008, compensation in the amount of $15,000 was recorded as
additional paid-in capital for services provided by an officer of the Company.
In April 2008, the Company issued 2,500 shares of common stock for
services. The value of the shares issued was not material.
On August 23, 2010, the Company issued 10,000,000 restricted shares of its
common stock to its chief executive officer, Vincent Beatty, for services
rendered. The shares were valued at $0.001 per share, a nominal amount since
there was no other evidence of fair value of the shares, or $10,000 and expensed
immediately as compensation.
F-12
DATAMILL MEDIA CORP.
(f/k/a SMITTEN PRESS: LOCAL LORE AND LEGENDS, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010 and 2009
NOTE 5 - INCOME TAXES
There was no income tax expense for the years ended December 31, 2010 and
2009 due to the Company's net losses. The Company has established a 100%
valuation allowance against any deferred tax assets which primarily relate to
the Company's net operating loss carry-forwards.
The Company's tax expense differs from the "expected" tax expense for
Federal income tax purposes for the years ended December 31, 2010 and 2009,
(computed by applying an estimated Corporate tax rate of 40% to loss before
taxes), as follows:
Years Ended December 31,
--------------------------
2010 2009
-------- --------
Computed "expected" tax benefit $(27,099) $ (215)
Contributed services -- --
Change in deferred tax asset valuation allowance 27,099 215
-------- --------
$ -- $ --
======== ========
The effects of temporary differences that gave rise to significant portions of
deferred tax assets and liabilities at December 31, 2010 and 2009 are as
follows:
Years Ended December 31,
-----------------------------
2010 2009
--------- ---------
Deferred tax assets:
Operating loss carry-forward $ 440,925 $ 413,826
Total gross deferred tax assets 440,925 413,826
Less valuation allowance (440,925) (413,826)
--------- ---------
Net deferred tax assets $ -- $ --
========= =========
The valuation allowance at December 31, 2010 and 2009 was $440,925 and
$413,826, respectively. The valuation allowance increased by $27,099 during the
year ended December 31, 2010. The Company has net operating losses of
approximately $1,240,000 at December 31, 2010 available to offset future net
income through 2030.
The utilization of the net operating loss carry-forwards is dependent upon
the ability of the Company to generate sufficient taxable income during the
carry-forward period. The Company has had a change of ownership and change in
business as defined by the Internal Revenue Code Section 382. As a result, a
substantial annual limitation may be imposed upon the future utilization of its
net operating loss carry-forwards.
Based on its evaluation, as described in Note 1, the Company has concluded
that there are no significant uncertain tax positions requiring recognition in
its financial statements. The Company's evaluation was performed for the tax
years ended December 31, 2004 through December 31, 2010 for both U.S. Federal
Income Tax and for the State of Florida Corporate Income Tax, the years which
remain subject to examination by the respective tax jurisdictions as of December
31, 2010.
F-13
DATAMILL MEDIA CORP.
(f/k/a SMITTEN PRESS: LOCAL LORE AND LEGENDS, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010 and 2009
NOTE 6 - GOING CONCERN
As reflected in the accompanying financial statements, the Company had a
net loss and net cash used in operations of $67,747 and $51,316, respectively,
for the year ended December 31, 2010 and a deficit accumulated during
development stage of $1,137,293, a working capital deficit of $151,147 and
stockholders' deficit of $151,147 at December 31, 2010 and is a development
stage company with no revenues. The ability of the Company to continue as a
going concern is dependent on the Company's ability to further implement its
business plan, raise capital, and generate revenues. We are a management
consulting firm that plans to educate and assist small businesses to improve
their management, corporate governance, regulatory compliance and other business
processes, with a focus on capital market participation. We intend to generate
revenues, with our two or possibly three employees, by providing consulting and
educational services to primarily private companies seeking to become publicly
traded companies. Management believes that the actions presently being taken
provide the opportunity for the Company to continue as a going concern. The
financial statements do not include any adjustments that might be necessary if
the Company is unable to continue as a going concern.
NOTE 7 - CONCENTRATIONS
As discussed in Note 1, through the change in ownership of the Company,
from August 2007 through 2008, the Company was funded solely by funds totaling
$78,676, advanced through a commonly controlled affiliate, Simply Fit Holdings
Group, Inc. The amount owed as of December 31, 2010 and 2009 was $78,676.
NOTE 8 - COMMITMENTS AND CONTINGENCIES
The Company was named as a defendant with others in a lawsuit filed June
24, 2008 in the Florida Southern District Court, Case No. 0:2008cv60953. The
plaintiff, a New York individual, alleges a RICO count against all of the
defendants. On September 14, 2009 a settlement agreement was reached with the
plaintiff on behalf of the Company where all claims were settled. There was no
accounting effect on the Company as a result of the settlement.
NOTE 9 - LEGAL MATTERS
On December 22, 2010, the Company received a Demand Letter from an
individual for payment in the amount of $78,676, which is a liability disclosed
in the financial statements, but payable to another entity. The Company believed
the claim by the individual was without merit and the Company was informed by
counsel for the individual that he intends to commence litigation against the
Company with respect to his claim.
During February 2011, the Company and the individual have discussed the
claim and the parties have decided not to litigate the claim, but to agree on
terms to satisfy the claim within the next six months.
F-14
DATAMILL MEDIA CORP.
(f/k/a SMITTEN PRESS: LOCAL LORE AND LEGENDS, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2010 and 2009
NOTE 10 - SUBSEQUENT EVENTS
The Company has performed an evaluation of subsequent events in accordance
with ASC Topic 855. Other than the events noted below, the Company is not aware
of any subsequent events which would require recognition or disclosure in the
financial statements.
On January 5, 2011, an individual loaned the Company $25,000 in exchange
for a Promissory Note bearing interest at 5%. The note, with a term of six
months, is due on July 4, 2011 and in lieu of the interest payment, restricted
shares of the Company's common stock will be issued to the note holder. Upon
maturity, the principal amount loaned of $25,000 is due to the note holder and
an aggregate amount of 75,000 restricted common stock shares will be issued to
the note holder, pursuant to the terms of the note. In addition, Vincent Beatty,
the CEO of the Company, has personally guaranteed the obligations and payment of
the note.
During February 2011, both the Company and an individual claiming that the
Company owed him $78,676, have decided not to litigate the claim, but to agree
on terms to satisfy the claim within the next six months.
During March 2011, the Company paid in full notes payable to two
individuals totaling $10,000. An aggregate of 30,000 shares of common stock, per
the agreements, will be issued to these individuals on the anniversary date of
these notes, October 2011.
During March 2011, an officer loaned $40,000 to the Company for operating
funds to pay on-going expenses, including the re-payment of certain notes
payable and advances.
F-1
