Attached files
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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
[ ] 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: 333-161699
PMX COMMUNITIES, INC. AND SUBSIDIARY
(Exact name of Registrant as specified in its charter)
Nevada 80-0433114
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification Number)
7777 West Glades Road, Suite 100
Boca Raton, FL 33434 (561) 210-5349
(Address of Principal (Registrant's telephone number)
Executive Offices)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to section 12(g) of the Act: Common
Stock
Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act. Yes [ ] 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 Exchange Act.
Yes [ ] No [X]
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to
Rule 405 of Regulation S-T (section 229.405 of this chapter) during the
proceeding 12 months (or for such shorter period that the registrant
was required to submit and post such files). Yes [ ] No [ ]
2
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 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. [ ]
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, or a non-accelerated filer, or a smaller
reporting company.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller Reporting Company [X]
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
As of April 15, 2011, there were 59,200,000 shares of registrant's
common stock issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
None
3
TABLE OF CONTENTS
Page
------
Part I
Item 1. Business 5
Item 1A. Risk Factors 12
Item 1B. Unresolved Staff Comments 12
Item 2. Properties 12
Item 3. Legal Proceedings 12
Item 4. (Removed and Reserved) 12
Part II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters and Issuer Purchases of Equity
Securities 13
Item 6. Selected Financial Data 14
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operation 15
Item 7a. Quantitative and Qualitative Disclosure about
Market Risk 21
Item 8. Financial Statements and Supplementary Data 21
Item 9. Changes In and Disagreements With Accountants
on Accounting and Financial Disclosure 47
Item 9A. Controls and Procedures 47
Item 9B. Other Information 48
Part III
Item 10. Directors, Executive Officers, Control
Persons and Corporate Governance 49
Item 11. Executive Compensation 52
Item 12 Security Ownership of Certain Beneficial
Owners and Management and Related Stockholder Matters 53
Item 13. Certain Relationships and Related
Transactions, and Director Independence 53
Item 14. Principal Accountant Fees and Services 54
Part IV
Item 15. Exhibits, Financial Statement Schedules 56
4
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
Certain statements in this report contain or may contain forward-
looking statements that are subject to known and unknown risks,
uncertainties and other factors which may cause actual results,
performance or achievements to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. These forward-looking statements were based
on various factors and were derived utilizing numerous assumptions and
other factors that could cause our actual results to differ materially
from those in the forward-looking statements. These factors include,
but are not limited to, our ability to implement our business plan and
generate revenues, economic, political and market conditions and
fluctuations, government and industry regulation, U.S. and global
competition, and other factors. Most of these factors are difficult to
predict accurately and are generally beyond our control. You should
consider the areas of risk described in connection with any forward-
looking statements that may be made herein. Readers are cautioned not
to place undue reliance on these forward-looking statements, which
speak only as of the date of this report. Readers should carefully
review this in its entirety, including but not limited to our financial
statements and the notes thereto. Except for our ongoing obligations to
disclose material information under the Federal securities laws, we
undertake no obligation to release publicly any revisions to any
forward-looking statements, to report events or to report the
occurrence of unanticipated events.
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PART I
Item 1. Business
General
-------
The registrant was organized under the laws of the State of Nevada on
December 29, 2004 under the name Merge II, Inc. The registrant's year
end is December 31.
On February 10, 2009, by unanimous written consent, the board of
directors authorized an amendment to its certificate of incorporation
to change the name of the corporation to PMX Communities, Inc. and
increased the authorized common shares from 25,000,000 to 100,000,000.
The amendment was filed on June 30, 2009.
On September 28, 2010, the registrant formed PMX Gold, LLC, a Florida
limited liability company as a wholly owned subsidiary of the
registrant to assist with evaluating and pursuing opportunities within
the gold mining and retail gold sales industries.
Operations
----------
Through PMX Gold, LLC, its wholly owned subsidiary, the registrant
focuses on the development of leveraged opportunities within the retail
gold sales and gold mining industries.
GOLD Vending Machine
In May of 2010, the registrant identified a gold bullion vending
machine deployed at the Emirates Palace Hotel in Dubai. The GOLD
Vending Machine is an unmanned point of sale unit that dispenses
various gold bullion products based on constantly updated real time
market pricing information. The machine was being marketed and
deployed by a German Company, Ex Oriente Lux, AG.
The registrant decided to pursue a relationship with EOL to potentially
acquire one of the machines to study the feasibility and market
acceptance in the United States by the public of unmanned distribution
units for the acquisition or delivery of gold bullion products. During
the following months the registrant made extensive contact with EOL for
purposes of gathering information and working to develop a preliminary
agreement to bring one of the gold bullion vending machines to the
United States.
On September 2, 2010, the registrant entered into a preliminary
agreement with EOL to conduct exclusive test marketing of the GOLD
Vending Machine in the state of Florida. Subsequent to the signing of
the agreement, the registrant paid a non-refundable deposit of 10,000
Euros ($13,208.93US) to EOL to be applied to the first vending
machine(s) to be ordered by the registrant.
During November of 2010, the registrant sent a consultant to Germany to
conduct follow up due diligence and gather data concerning the
operations of EOL and the GOLD Vending Machine(s). The consultant was
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able to visit the offices of EOL and meet with various representatives
and was able to visit some of the sites where some of the gold bullion
vending machines were deployed and in operation.
During the weeks that followed, the registrant evaluated proceeding
with the test marketing of one of these machines despite several
limitations and roadblocks. We elected to proceed with the project
with the goal of determining the public's acceptance of accessing
unmanned gold bullion terminals rather than simply to sell gold bullion
from a vending machine.
Accordingly, the registrant proceeded with the goal of setting up a
test marketing of one of the units at the Town Center Mall in Boca
Raton, FL for launch prior to year's end. Additional capital was
brought into the registrant to finance both the acquisition of the
machine and to acquire the supporting inventory and infrastructure
necessary to support automated retail gold operations. Retail space
for the machine was acquired, an initial product line featuring Credit
Suisse/ Pamp Suisse .999 Fine Gold Bullion Bars and American Eagle Gold
Coins was identified, a relationship with a supplier that also allowed
for hedging activities against inventory price fluctuations was
established, insurance and security needs were addressed along with
various other issues as best as possible. On Friday, December 17,
2010, the registrant commenced retail sales of gold bullion via the
vending machine at the Town Center Mall in Boca Raton, FL.
Test Marketing Sales Results
As of December 31, 2010, the registrant consummated 372 gold
transactions with gross sales of $109,056 as detailed in the attached
financials. Active test marketing ceased on or about February 28, 2011.
During the month of March, the machine was unattended but remained
intermittently operational until it was taken off-line permanently
March 23, 2011.
As of March 23, 2011 the registrant consummated a total of 699 gold
transactions yielding gross sales of $266,256 through the Gold Vending
Machine. Approximately 32% of the total sales were in the larger
investment class denominations (10 grams to 1 ounce).
Although our tests were limited to one physical location, management is
satisfied with the results of the test marketing program given the fact
that the machine was operational in a cash only mode, together with a
number of other significant technology and operational challenges that
were faced.
Management is of the opinion that offering instant access to .999 Pure
Credit Suisse Gold Bullion Bars and U.S. minted American Eagle Gold
Coins through gold vending machines is an important first step towards
fulfilling our business plan. However, our perspective and goal
concerning these tests is more of a macro view as to positive
acceptance of access to unmanned gold bullion terminals by the public
rather than simply to determine the feasibility of selling gold bullion
from a vending machine.
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Supply of Gold Bullion
The supply and price of gold bullion is subject to volatility and is
influenced by numerous factors that are beyond our control. We intend
to use gold futures and options contracts for the purpose of hedging
the effects of changing gold prices on our inventory.
Although the use of hedging may enable us to mitigate the effect of
changing prices, no strategy is entirely effective to eliminate the
pricing risks and we may remain exposed to loss on futures contracts
when prices move significantly in a short period of time, and we
generally remain exposed to supply risk in the event of non-performance
by the counter-parties to any futures contracts. Our hedging strategy
and the hedges that we enter into may not adequately offset the risks
of gold volatility and our hedges may result in losses
We rely heavily on common carriers to ship our gold. Any disruption
in their services or increase in shipping costs could adversely affect
our relationship with our customers, which could result in reduced
revenues, increased operating expenses, a loss of customers or reduced
profitability.
We rely on a number of common carriers to deliver gold to our customers
and to deliver gold to us. We have no control over these common
carriers and the services provided by them may be interrupted as a
result of labor shortages, contract disputes and other factors. If we
experience an interruption in these services, we may be unable to ship
or receive our gold in a timely manner, which could reduce our revenues
and adversely affect our relationship with our customers. In addition,
a delay in shipping could require us to contract with alternative, and
possibly more expensive, common carriers and could cause orders to be
cancelled or receipt of goods to be refused. Any significant increase
in shipping costs could lower our profit margins or force us to raise
prices, which could cause our revenue and profits to suffer.
Disruptions in the supply of gold could result in a deterioration of
our relationship with our customers, decreased revenues or could impair
our ability to grow our business.
Gold is a commodity and its supply is subject to volatility beyond our
control. Supply is affected by many factors in the gold mining
countries including weather, political and economic conditions, acts of
terrorism, as well as efforts by gold miners to expand or form cartels
or associations. If we are unable to procure a sufficient supply of
gold, our sales would suffer. We believe that we have adequate supply
sources for the acquisition of our gold bullion products. However, the
potential termination of a supply contract with our suppliers could
result in increases in the cost of high quality gold products and could
reduce our gross margin and profit.
8
Pricing of Gold Bullion
Gold is a traded commodity and, in general, its price can fluctuate
depending on numerous economic and geopolitical factors.
If the cost of gold fluctuates widely due to any of these factors, our
margins could decrease and our profitability could suffer accordingly.
Although our hedging program anticipates and plans for these
fluctuations, when wholesale gold prices fluctuate rapidly or at
significantly faster than normal levels, we may not always able to
mitigate the effects of these price swings and our operating margins
and cash flow could suffer accordingly.
Third Party Brokers and Wholesalers
We contract with third parties to supply, grade, ship and broker our
products. The gold of the quality that we purchase does not trade
directly on the commodity markets. Rather, we purchase the gold that we
use on a negotiated basis from a limited group of suppliers. We depend
on our relationships with gold brokers and wholesalers for the supply
of our primary product, high quality, certified Credit Suisse and Pamp
Suisse gold products. If any of our relationships with these sources
deteriorate, we may be unable to procure a sufficient quantity of these
high quality gold at prices acceptable to us or at all. In such case,
we may not be able to fulfill the demand of our existing customers,
supply new customers or expand other channels of distribution. A
shortage could result in a deterioration of our relationship with our
customers, decreased revenues or could impair our ability to expand our
business.
PMX Gold ATM Terminal and the PMX Gold Bullion Account
The registrant intends to offer customers the ability to conduct gold
bullion based transactions via a network of PMX Gold ATM terminals and
the Internet. Customers would have the option of engaging in three
distinct types of transactions through the PMX Gold ATM terminals.
1. Using the PMX Gold ATM terminal for regular ATM transactions
with their current financial institution. The unit is being designed
with full banking software so that it will offer traditional ATM
banking transactions for banking customers, allowing for quick
introduction to United States consumers and ancillary revenues from
contemporary ATM banking transactions.
2. Purchasing gold bullion in a stand-alone vending transaction
using their own banking debit card so as to eliminate the cash
requirement of the previously tested German manufactured vending
machine.
3. Accessing the terminal to perform a PMX Gold Bullion Account
transaction. The registrant's plan calls for an initial account to be
set up online or through a financial institution that is an agent of
our managed gold account. The PMX Gold Bullion Account will offer the
following features.
- the ability to conduct purchases and sales of gold bullion and
other precious metals based products and take physical delivery as
desired from the PMX Gold ATM terminals.
- the ability to receive and deposit gold bullion and other
precious metals based products through the PMX Gold ATM terminals
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- a fully functioning PMX Gold Debit card which affords users
access to the equity in their account and the ability to access cash
from their accounts for every day transactions, with the operation to
pay the card balance off at the end of the billing cycle or have some
of the user's funds liquidated to cover the user's purchases.
- the ability to conduct hedging transactions using exchange
contracts and other financial instruments as well as have the ability
to conduct leveraged trades on margin, subject to state and federal
laws and regulations.
- the ability to issue secure transfer cards whereby people they
wish to pay could obtain gold bullion and other precious metals based
products from the PMX Gold ATM terminals which would be debited from
their account, subject to state and federal laws and regulations.
Metals that are deposited at the PMX Gold ATM terminals would be
credited subject to initial and final verification; the client would
have the option of trading against any deposit subject to having equity
in his account to cover market risk or losses in the case of a bad
deposit, like a bad check.
Assignment and Lease Assumption
------------------------------
Mineral Lease-Purchase Option Transactions, Gold Mining Exploration and
Development
Treasure Gulch and AU Speculator Lease Transaction
On February 14, 2009, the registrant entered into a Lease Purchase
Option Agreement with Western Sierra Mining Corporation, for which the
registrant paid to Western Sierra Mining Corporation a deposit of
twenty-five thousand ($25,000) dollars. The acquisition of this lease
purchase option agreement had evolved from activities which the
registrant sought to develop as part of its gold mining portal.
As the registrant was in its formative stages at that time and in the
process of filing a registration statement, former management elected
to divest itself of the Lease Purchase Option and reduce the debt of
the registrant. On June 28, 2009, the registrant entered into an
assignment and lease assumption with AU Spectators, LLC, a Florida LLC
formed to undertake investment opportunities within the gold and
precious metals markets including the purchase, sale and trading of
mineral concessions, leases and land purchase options. The assignment
and assumption was effective and operative as of June 30, 2009. The
registrant reduced its indebtedness by $25,000 and recognized five
thousand dollars ($5,000) in income on the gain on this transaction.
In November 2009, AU entered into an agreement to sell the rights
associated with the lease purchase option of the Treasure Gulch Gold
Mine to VHGI Holdings, Inc. in exchange for $50,000, a 1% perpetual
gold production royalty and 2,000,000 restricted shares of VHGI stock.
While the vast majority of the profits from the transaction were
realized by AU, a non-associated entity, the results of the sale have
helped generate both direct investments in the registrant by
individuals and potential project development funding interest for
future ventures.
10
The registrant is actively seeking additional Mineral Lease-Purchase
Option Transactions for Speculation and reviewing several precious
metals mining properties for development through a wide range of
possible scenarios.
Goldex Capital Resources $1,000,000 Financing Agreement
-------------------------------------------------------
On August 18, 2010, the registrant entered into a financing agreement
whereby Goldex Capital Resources was issued a right of first refusal to
invest in $1,000,000 in project(s) which may be undertaken and funded
in special purpose entities to be organized by the registrant. Goldex
will not receive any debt or equity in the registrant in exchange for
the financing, but has agreed to provide financing to registrant and/or
the SPE(s) to fund the project(s) on a case by case basis in exchange
for a participation interest in each project. The acceptance of each
project shall be made by Goldex Capital on a case-by-case basis.
On October 5, 2010, Goldex Capital exercised its first option for
project participation pursuant to the financing agreement, by agreeing
to contribute an initial $60,000.00 to PMX Gold ATM, a to-be-formed
Florida LLC, for project development. On October 11, 2010, the
registrant formed the first SPE subsidiary, PMX Gold ATM and assigned
its rights in the EOL/Gold-to go contract to PMX Gold ATM. However,
subsequent to this agreement, on November 15, 2010, both parties
mutually agreed to rescind the agreement, and the rights in the
EOL/Gold-to go contract reverted back to the registrant.
Goldex remains interested in potentially pursuing projects per terms of
the original agreement with the registrant, and the registrant is
currently evaluating several mining proposals for possible joint
venture participation with Goldex.
Government Regulation
---------------------
We are subject to general business regulations and laws, as well as
regulations and laws directly applicable to our operations. As we
continue to expand the scope of our operations, the application of
existing laws and regulations to the registrant relating to issues such
as defamation, pricing, advertising, consumer protection, content
regulation, quality of products and services and intellectual property
ownership and infringement can be unclear. In addition, we will also
be subject to new laws and regulations directly applicable to our
activities.
Any existing or new legislation applicable to us could expose us to
substantial liability, including significant expenses necessary to
comply with such laws and regulations, and dampen the growth of our
business.
Insurance
---------
The registrant presently maintains an insurance policy that provides
for insurance on the gold inventory, premises, certain aspects of their
business operations as well as general liability of the registrant,
subject to certain limitations and exclusions.
11
Employees
---------
We currently have two full-time employees and employ part-time
employees on an as needed basis. We also have various consultants,
lawyers and others that work for us on different aspects of our
operations. As operations increase and revenues allow, we will have to
employ an additional undetermined number of employees, consultants and
contracted professionals to assist with the development of the
registrant's business plan.
Consulting Agreements
---------------------
OTC Business Solutions
On February 1, 2009, the registrant entered into a consulting agreement
with OTC Business Solutions, then an unaffiliated company. As of
February 23, 2010, Michael C. Hiler, its owner, became an officer and
director of the registrant. The consultant provides consulting services
related to the management and organization of the registrant, our
financial policies, the terms and conditions of employment and
generally any matter arising out of the business affairs of the
registrant.
The consulting agreement will terminate on December 31, 2011.
The consultant was issued 5,000,000 common shares for services rendered
and to be rendered to the registrant. Additionally, the consultant
received $60,000.
TransMedia Group
On December 6, 2010, the ergistrant entered into a consulting agreement
with Madden Company, Inc. dba TransMedia Group to provide public
relations, promotional and/or marketing services. Transmedia shall
receive a pre-paid non-refundable monthly retainer fee of $3,000.00
plus client-approved expenses. In addition, TransMedia shall be paid by
the registrant during the term of this contract shares of the
registrant's restricted shares as follows:
Month 1: 50,000 shares.
Months 2-5: The greater of 5,000 shares or $3,000.00 of stock using
fifty (50%) percent of the average closing price of the stock on the
preceding 30 days of trading. For example:
i) If the average closing price of the stock on the preceding 30
days of trading is $.10, then the client would pay TransMedia 60,000
shares.
ii) If the average closing price of the stock on the preceding 30
days of trading is $.20, then the client would pay TransMedia 30,000
shares.
iii) If the average closing price of the stock on the preceding
30 days of trading is $2.00, then the client would pay TransMedia 5,000
shares.
Month 6: The greater of 5,000 shares or $3,000.00 of stock as
outlined above for months 2-5, plus an additional 150,000 shares.
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The share compensation schedule may be modified at any time during the
contract period by mutual agreement of both TransMedia and the
registrant. The consulting agreement shall be binding, upon signing,
for a period of six consecutive months beginning December 6, 2010.
Trintos, Inc.
On December 8, 2010, the registrant entered into a consulting agreement
with Tritos, Inc. to provide management consulting services, business
advisory services, shareholder information services and public
relations services.
The registrant shall pay Tritos, Inc. $15,000 for the services of
Tritos, Inc. for a term commencing December 15, 2010 through January
14, 2011.
Item 1A. Risk Factors
Not applicable to smaller reporting companies.
Item 1B. Unresolved Staff Comments
None
Item 2. Properties
The registrant signed a lease agreement with West Boca Executive Suites
on September 20, 2010. The office space located at 7777 West Glades
Road, Suite 100, Boca Raton, FL 33434, at a cost of $1,000 per month.
The lease agreement is for a term of twelve months.
The registrant also signed a lease agreement with Town Center at Boca
Raton on November 11, 2010. The space is located at 6000 Glades Road,
Boca Raton, FL 33431 at a cost of 2,120 per month. The lease agreement
is for a term of three and a half months.
Item 3. Legal Proceedings
The registrant is not a party to, and its property is not the subject
of, any material pending legal proceedings.
Item 4. (Removed and Reserved)
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PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters and Issuer Purchases of Equity Securities
Market Information
------------------
Our common stock is quoted on the OTC Bulletin Board under the symbol
PMXO.OB. The following table sets forth the reported high and low
closing bid prices for our common stock as reported on the OTC Bulletin
Board for the following periods. These prices do not include retail
mark-ups, markdowns or commissions, and may not necessarily represent
actual transactions.
High Low
----- -----
2010
January 1, 2010 - March 31, 2010 $ - $ -
April 1, 2010 - June 30, 2010 $ - $ -
July 1, 2010 - September 30, 2010 $ - $ -
October 1, 2010 - December 31, 2010 $0.62 $0.20
2009
January 1, 2009 - March 31, 2009 $ - $ -
April 1, 2009 - June 30, 2009 $ - $ -
July 1, 2009 - September 30, 2009 $ - $ -
October 1, 2009 - December 31, 2009 $ - $ -
As of December 31, 2010, there were approximately 47 shareholders of
record of the registrant's common stock.
Dividends and Dividend Policy
-----------------------------
Holders of the registrant's common stock are entitled to receive such
dividends as may be declared by its board of directors. No dividends
on the registrant's common stock have ever been paid, and the
registrant does not anticipate that dividends will be paid on its
common stock in the foreseeable future.
Instead, we will retain any earnings for use in our business. This
policy will be reviewed by our board of directors from time to time in
light of, among other things, our earnings and financial position.
No distribution may be made if, after giving it effect, we would not be
able to pay its debts as they become due in the usual course of
business; or the corporation's total assets would be less than the sum
of its total liabilities plus (unless the articles of incorporation
permit otherwise) the amount that would be needed, if we were to be
dissolved at the time of the distribution, to satisfy the preferential
rights upon dissolution of shareholders whose preferential rights are
superior to those receiving the distribution. The board of directors
may base a determination that a distribution is not prohibitive either
on financial statements prepared on the basis of accounting practices
and principles that are reasonable in the circumstances or on a fair
valuation of other method that is reasonable in the circumstances.
14
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
----------------------------------------------------------------------
None
Securities Authorized for Issuance under Equity Compensation Plans
------------------------------------------------------------------
No securities are authorized for issuance by the registrant under
equity compensation plans.
Recent sales of unregistered securities
---------------------------------------
On February 23, 2010, Dennis Carrasquillo, a former officer and
director sold 33,000,000 common shares to Michael C. Hiler, an officer
and director of PMX Communities for $.001 per common share.
On February 23, 2010, we issued stock options to purchase 1,000,000
common shares to Mr. McCauley at $.25 per common share.
On August 18, 2010, the registrant sold 2,750,000 restricted common
shares to ALEH Investments, LLC, a sophisticated investor at $.0375 per
common share for a total of $103,125. The registrant granted the
investor piggyback registration rights whereby the registrant will
include the investor's common shares in any public offering the
registrant conducts. The registrant will bear all costs of the
registration of investor's common shares.
On November 12, 2010 the registrant sold 2,750,000 restricted common
shares to Alfredo Cortellini, an unaffiliated sophisticated investor,
at $.0375 per common share for a total of $103,125.00. The registrant
granted the investor piggyback registration rights whereby the
registrant will include the investor's common shares in any public
offering the registrant conducts. The registrant will bear all costs
of the registration of investor's common shares.
All of the above securities were issued pursuant to an exemption from
registration under Section 4(2) of the Securities Act of 1933 to
sophisticated investors.
Use of proceeds from initial public offering
--------------------------------------------
Not applicable
Item 6. Selected Financial Data
Not applicable to smaller reporting companies.
15
Item 7. Management's Discussions and Analysis of Financial Condition
and Results of Operations
Trends and Uncertainties
-------------------------
Our business is centered on essentially one commodity, gold. Our
operations are currently focused on the demand for physical gold
ownership by retail investors. Our expansion plans are based on
developing and offering a managed gold account and related products to
retail customers and investors. Any decrease in demand for gold or gold
investments could materially adversely affect our revenues,
profitability and general business prospects.
Demand for our products is affected by several factors including:
- Large sales by the official sector. A significant portion of the
aggregate world gold holdings is owned by governments, central banks
and related institutions.
- A significant increase in gold hedging activity by gold
producers. Should there be an increase in the level of hedge activity
of gold producing companies, it could cause a decline in world gold
prices.
- A significant change in the attitude of speculators and investors
towards gold. Should the speculative community take a negative view
towards gold, it could cause a decline in world gold prices
Because we rely on a single commodity, any decrease in demand for gold
would harm our business more than if we had more diversified product
offerings and could materially adversely affect our revenues and
operating results.
We face foreign exchange rate exposure as we intend to allow for our
products to be bought and sold in multiple currencies. To the extent
that we are unable to unsuccessfully hedge any exposure that we face in
these transactions we could suffer financial losses.
Results of Operations
---------------------
For the year ended December 31, 2010, the registrant received any
$109,056 in revenue. Cost of goods sold was $106,916. Gross profit was
$2,140. Selling, general and administrative expenses were $272,354 and
consisted of primarily of accounting fees of $18,265, legal fees of
$20,794, rent expenses of $10,979, wage expenses of $69,040, consulting
fees of $55,500 for the hiring of an outside consultant to facilitate
new business ventures, stock transfer fee of $14,465, beneficial
conversion expense of $37,263 and other miscellaneous expenses of
$46,048.
For the year ended December 31, 2009, we did not receive any revenue.
Selling, general and administrative expenses were $110,464 and
consisted of primarily of accounting fees of $16,600, consulting
expenses of $60,500, for the hiring of an outside consultant to
facilitate new business ventures, stock transfer fee of $2,010 wage
expenses of $22,250 and other miscellaneous expenses of $9,104.
16
Interest expense for the year ended December 31, 2010 was $16,741 an
increase of $9,094 from interest expense of $7,647 for the year ended
December 31, 2009. The increase was due to the interest on the notes
payable.
For the year ended December 31, 2010, we had a net loss of ($289,916)
an increase of $176,231 from net loss for the year ended December 31,
2009 of ($113,685) due to the factors above.
Liquidity and Capital Resources
-------------------------------
As at December 31, 2010, we had cash and cash equivalents of $47,181.
For the year ended December 31, 2010, the registrant received purchased
a license for $2,000. The registrant had net cash provided by
investing activities of $2,000 for the year ended December 31, 2010.
For the year ended December 31, 2009, the registrant paid a deposit of
lease agreement of $25,000. Additionally, the registrant purchased
property and equipment of $2,005. As a result, the registrant had net
cash used in investing activities of $32,005 for the year ended
December 31, 2009.
For the year ended December 31, 2010, the registrant received proceeds
from notes payable of $217,500 and had an increase in accrued interest
of $16,740. Additionally, for the year ended December 31, 2010, the
registrant received a credit for costs incurred to file registration
statement of $1,000 and received proceeds of $206,250 from the sale of
common stock. The registrant had an accretion of derivative conversion
of $37,263. As a result, the registrant had net cash provided by
financing activities of $478,753 for the year ended December 30, 2010.
Comparatively, the registrant for the year ended December 31, 2009,
received proceeds from notes payable of $150,000 and had an increase in
accrued interest of $7,647. Additionally, for the year ended December
31, 2009, the registrant incurred costs to file registration statement
of $18,250. As a result, the registrant had net cash provided by
financing activities of 139,397 for the year ended December 31, 2009.
Plan of Operation
-----------------
Our internal and external sources of liquidity have included proceeds
raised from subscription agreements and private placements and advances
from related parties. Our capital strategy is to increase our cash
balance through financing transactions, including the issuance of debt
and/or equity securities.
The registrant intends to raise additional working capital through
private placements, public offerings and/or bank financing. There are
no assurances that the registrant will be able to either
- achieve a level of revenues adequate to generate sufficient cash
flow from operations; or
17
- obtain additional financing through either private placements,
public offerings and/or bank financing necessary to support the
registrant's working capital requirements.
To the extent that funds generated from operations and any private
placements, public offerings and/or bank financing are insufficient,
the registrant will have to raise additional working capital. No
assurance can be given that additional financing will be available, or
if available, will be on terms acceptable to the registrant
The registrant believes the following milestones need to be met to
successfully complete its business plan.
Milestones
1. Item: Import simple gold bullion vending machine to perform test
marketing and gauge US public acceptance of accessing gold
bullion products from an unmanned terminal. Establish
agreement with suppliers, hedging transaction facilitators
and other required sources. Obtain gold bullion inventory
and open hedging account; initiate retail gold sales.
Cost: Approximately $280,000-$300,000 (including inventory and
hedging deposits)
Status: Completed
2. Item: Develop preliminary business plan and design infrastructure
to operate PMX Gold Bullion Account. Secure agreement with
technology partner to provide and license the technology
necessary for operation of gold bullion dispensing/deposit
mechanisms to be used for the PMX Gold ATM terminals.
Secure management services from technology partner to
develop and run PMX Gold Bullion Account network.
Status: The registrant has entered into a preliminary agreement
with Gold Deposit Technologies to license their proprietary
intellectual property supported by previously filed
business method patent and to license gold dispensing and
collection technology for the manufacture of the PMX Gold
ATM terminals.
Down payment has been paid to technology partner. Formal
licensing and management services agreement between
the registrant and technology partner in progress and
expected to be completed within 2 months.
3. Item: Establish relationship with ATM manufacturer and develop
contract for acquisition of international banking system
compliant hardware and software to interface with gold
bullion delivery mechanism to by developed by technology
partner. Develop specifications and requirements for
prototypes to be built and software to run network. Secure
defined costs for project development, software design and
18
supply, initial prototype manufacture, 2 or 3 second stage
prototype models for field testing and eventual rollout of
25-30 PMX Gold ATM terminals for initial market deployment.
Cost: Costs for initial design of stage 1 and 2 prototypes,
system software and consulting services presently unknown
but estimated to be substantial. Costs are to be finalized
within next 30 days.
Status: Currently have signed NDA with one substantial International
ATM manufacturer and proceeding with detailed specs and
requirements for each item. If proposed schedule is
fulfilled and financing obtained then initial prototype
should be manufactured within 3 months, second stage models
of prototype models approximately 2 months later. At that
time final unit costs will be known; estimated at $25,000 -
$30,000, not including initial design, testing, software and
consulting costs.
4. Item: Construct website to offer initial PMX Gold Bullion Account
product sales and services. Obtain merchant services
approval for acceptance of debit/credit cards. Offer gold
bullion products for sale via internet. Negotiate agreement
with supplier for product supply, back office support and
infrastructure.
Cost: Approximately $25,000 plus agreement to use product
supplier for PMX Gold's inventory requirements.
Status: Currently in development, approximately 60-90 days from
completion.
5. Item: Expand PMX Gold Bullion Account services to include PMX Gold
debit card. Negotiate agreement with debit card provider for
branded debit card. Offer gold bullion products for sale via
internet. Negotiate agreement with debit card provider
supplier for back office support, service platform and
infrastructure.
Cost: Initial cost of approximately $30,000.00 includes first
10,000 branded card order plus starting deposit with issuing
bank.
Status: Have received detailed proposal from substantial debit card
provider(s); awaiting final proposal. Approximately 90 days
required from signing of agreement until network can be
active and debit cards in use.
6. Item: Manufacture first 25-30 machines and complete development of
network to service PMX Gold Bullion Account. Potentially
obtain agreement with financial institution to cobrand ATM.
Cost: Currently estimated at approximately $25,000-$30,000 per
unit, subject to final options.
19
Status: All steps above must be completed. Approximate timeline to
rollout of machines to populate and support full scale
launch of PMX Gold Bullion Network is estimated to be prior
to end of calendar year 2011.
7. Item: Bring on additional board of directors members, advisors
and consultants to assist with development of Retail Gold
Sales/PMX Gold ATM Terminal network and Mining Lease-
Purchase Option trading.
Cost: Directors, advisors and consultants have been identified
that will provide services in exchange for equity in the
registrant.
Status: One new accounting professional identified to serve on board
of directors, more under consideration. Additional advisors
and consultants with substantial experience in metals and
forex trading identified as well. The registrant expects to
add a minimum of three individuals within 30-60 days.
8. Item: Review properties for precious netals and mining exploration
and development through joint venture with Goldex Capital
or others.
Cost: Projects for participation/acquisition present range from
approximately $25,000 to in excess of $5,000,000.
Status: The registrant is currently reviewing multiple projects with
the assistance of Mervyn Gervis, vice president and director
of the registrant and various consultants and potential
project partners. The first project expected to be presented
to Goldex Capital within 30-60 days; other partners under
consideration as well.
Milestone 1 has been accomplished.
Milestones 2 and 3 are currently in progress.
Milestone 4 can be completed independent of all other milestones.
Milestone 5 is dependent on milestone 4 but can be worked on at same
time.
Milestone 6 is dependent on milestones 2-3 being completed first, and
would work best with items 4-5 being completed by time item 6 ready to
launch. However, items 4-5 not totally necessary for milestone 6 to be
accomplished.
Milestones 7 and 8 are independent of all others.
Going Concern
-------------
The registrant has incurred net losses for the year ended December 31,
2010 of $289,916 and for the year ended December 31, 2009 of $113,685.
Because of these losses, the registrant will require additional working
capital to develop its business operations.
The registrant intends to raise additional working capital through
private placements, public offerings and/or bank financing. There are
no assurances that the registrant will be able to either:
20
- achieve a level of revenues adequate to generate sufficient cash
flow from operations; or
- obtain additional financing through either private placements,
public offerings and/or bank financing necessary to support the
registrant working capital requirements.
To the extent that funds generated from operations and any private
placements, public offerings and/or bank financing are insufficient,
the registrant will have to raise additional working capital. No
assurance can be given that additional financing will be available, or
if available, will be on terms acceptable to the registrant. These
conditions raise substantial doubt about our ability to continue as a
going concern.
Our independent auditors have raised substantial doubts about our
ability to continue as a going concern in their reports on our
financial statements included in this annual report.
Off-Balance Sheet Arrangements
------------------------------
The registrant had no material off-balance sheet arrangements as of
December 31, 2010.
Critical Accounting Policies and Estimates
------------------------------------------
Management's discussion and analysis of its financial condition and
results of operations is based upon our consolidated financial
statements, which have been prepared in accordance with U.S. generally
accepted accounting principles. The preparation of these financial
statements requires us to make estimates and judgments that affect the
reported amounts of assets, liabilities, revenue and expenses, and
related disclosure of contingent assets and liabilities. On an on-going
basis, we evaluate our estimates, including those related to the
reported amounts of revenues and expenses and the valuation of our
assets and contingencies. We believe our estimates and assumptions to
be reasonable under the circumstances. However, actual results could
differ from those estimates under different assumptions or conditions.
Our financial statements are based on the assumption that we will
continue as a going concern. If we are unable to continue as a going
concern we would experience additional losses from the write-down of
assets.
The registrant uses the fair value recognition provision of ASC 718,
"Compensation-Stock Compensation," which requires the registrant to
expense the cost of employee services received in exchange for an award
of equity instruments based on the grant date fair value of such
instruments. The registrant uses the Black-Scholes option pricing model
to calculate the fair value of any equity instruments on the grant
date.
The registrant also uses the provisions of ASC 505-50, "Equity Based
Payments to Non-Employees," to account for stock-based compensation
awards issued to non-employees for services. Such awards for services
are recorded at either the fair value of the services rendered or the
21
instruments issued in exchange for such services, whichever is more
readily determinable, using the measurement date guidelines enumerated
in ASC 505-50.
New Accounting Pronouncements
-----------------------------
The registrant has adopted all recently issued accounting
pronouncements. The adoption of the accounting pronouncements,
including those not yet effective, is not anticipated to have a
material effect on the financial position or results of operations of
the registrant.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Not applicable
Item 8. Financial Statements and Supplementary Data
Table of Contents
Page
----
Part I. Financial information
Report of Independent Registered Public
Accounting Firm 22
Audited Consolidated Balance Sheets as of
December 31, 2010 and 2009 23
Audited Consolidated Statements of Operations -
For the Years ended December 31, 2010 and 2009 24
Audited Consolidated Statements of Stockholders' (Deficit) 25
Audited Consolidated Statements of Cash Flows -
For the Years ended December 31, 2010 and 2009 26
Notes to Consolidated Financial Statements 28
22
[LETTERHEAD OF LAKE & ASSOCIATES, CPA'S LLC]
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of PMX Communities, Inc.
We have audited the accompanying balance sheets of PMX Communities,
Inc. as of December 31, 2010 and 2009, and the related statements of
operations, stockholders' equity and cash flows for each of the years
in the two-year period ended December 31, 2010. PMX Communities Inc.'s
management is responsible for these financial statements. Our
responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. The company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting.
Our audit included consideration of internal control over financial
reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the company's internal control over
financial reporting. Accordingly, we express no such opinion. An
audit also includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, 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 PMX
Communities, Inc. as of December 31, 2010 and 2009, and the results of
its operations and its cash flows for each of the years in the two-year
period ended 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 15,
the Company has incurred significant losses. The Company's viability
is dependent upon its ability to obtain future financing and the
success of its future operations. These factors raise substantial
doubt as to the Company's ability to continue as a going concern. The
financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
/s/Lake & Associates CPA's LLC
Lake & Associates CPA's LLC
Boca Raton, Florida
April 15, 2011
23
PMX Communities, Inc. and Subsidiary
Consolidated Balance Sheets
December 31, December 31,
2010 2009
----------- -----------
Assets
Current Assets
Cash and cash equivalents $ 47,181 $ 212
Inventory 92,922 -
Prepaid expenses 23,083 -
Prepaid deposit 83,603 -
Security deposits 2,939 600
--------- ---------
Total current assets 249,728 812
Fixed assets
Property and equipment, net 1,469 1,847
--------- ---------
Other assets
Restricted cash 40,372 -
License with related party, net - 4,583
--------- ---------
40,372 4,583
--------- ---------
Total assets $ 291,569 $ 7,242
========= =========
Liabilities and Stockholders' Deficit
Current liabilities
Accounts Payable $ 81,189 $ 5,960
Accrued expenses 22,221 4,960
Note Payable - Short term 44,465 -
Derivative Conversion Liability 149,599 -
--------- ---------
Total current liabilities 297,474 10,920
Notes Payable - Long term 205,086 127,647
--------- ---------
Total Liabilities 502,560 138,567
Stockholders' deficit
Common stock, $.0001 par value; authorized
100,000,000 shares; issued and outstanding
59,150,000 shares issued and outstanding 5,915 5,360
Additional paid-in capital 188,970 (20,725)
Accumulated deficit (405,876) (115,960)
--------- ---------
Total stockholders' deficit (210,991) (131,325)
--------- ---------
Total liabilities and stockholders' deficit $ 291,569 $ 7,242
========= =========
See accompanying notes to audited consolidated financial statements.
24
PMX Communities, Inc. and Subsidiary
Consolidated Statement of Operations
For the Years Ended December 31, 2010 and 2009
Years ended December 31,
2010 2009
----------- -----------
Net sales $ 109,056 $ -
Cost of sales 106,916 -
---------- ----------
Gross profit 2,140 -
Costs and expenses:
Amortization 1,000 417
Depreciation 378 157
Loss on impairment 1,583 -
Selling, general and administrative
expenses 272,354 110,464
---------- ----------
275,315 111,038
---------- ----------
Loss from operations (273,175) (111,038)
Other income - 5,000
Interest expense (16,741) (7,647)
---------- ----------
Loss before income taxes (289,916) (113,685)
Income taxes - -
---------- ----------
Net loss $ (289,916) $ (113,685)
========== ==========
Basic net loss per share $ (0.00) $(0.00)
========== ==========
Weighted average shares outstanding
Basic 54,989,726 49,140,000
========== ==========
See accompanying notes to audited consolidated financial statements.
25
PMX Communities, Inc.
Statement of Stockholders' (Deficit)
For the Period ended December 31, 2010
Additional Total
Common Stock Paid in Accumulated Stockholders'
Shares Par Value Capital Deficit Deficit
---------- ------ -------- ------- -------
Balance December 31, 2008 40,000,000 $4,000 $ (1,725) $ (2,275) $ -
Common stock issued for
services -
(February 2009 @ $.0001/sh) 5,000,000 500 - - 500
Common stock issued for
services -
(May 2009 @ $.0001/sh) 100,000 10 - - 10
Common stock issued to
directors for services -
(May 2009 @ $.0001/sh) 1,000,000 100 - - 100
Common stock issued for cash
(June 2009 @ $.0001/sh) 7,500,000 750 - - 750
Costs incurred to file
registration statement - - (19,000) - (19,000)
Net loss - December 31, 2009 - - - (113,685) (113,685)
---------- ------ -------- --------- ---------
Balance December 31, 2009 53,600,000 5,360 (20,725) (115,960) (131,325)
Refund costs incurred to file
registration statement - - 1,000 - 1,000
Common stock issued for cash
(August 2010 @ $.0375/sh) 2,750,000 275 102,850 - 103,125
Common stock issued for cash
(November 2010 @ $.0375/sh) 2,750,000 275 102,850 - 103,125
Common stock issued for services
- (December 2010 @ $.06/sh) 50,000 5 2,995 3,000
Net loss - December 31, 2010 - - - (289,916) (289,916)
---------- ------ -------- --------- ---------
Balance December 31, 2010 59,150,000 $5,915 $188,970 $(405,876) $(210,991)
========== ====== ======== ========= =========
See accompanying notes to audited consolidated financial statements.
26
PMX Communities, Inc. and Subsidiary
Consolidated Statement of Cash Flows
Years Ended December 31, 2010 and 2009
Years ended
December 31,
2010 2009
------ ------
Cash flows from operating activities
Net loss $(289,916) $(113,685)
Adjustments to reconcile net (loss) to net
cash provided by (used in) operating
activities:
Issuance of common stock for services 3,000 610
Conversion of notes payable - (5,000)
Depreciation 378 158
Amortization 1,000 417
Impairment of investment 1,583 -
Change in assets and liabilities
Restricted cash (40,372) -
Inventory (92,922) -
Deposit (2,339) (600)
Prepaid expenses (23,083) -
Prepaid deposit (83,603) -
Accounts Payable 75,229 5,960
Accrued expenses 17,261 4,960
--------- ---------
Net cash used in operating activities (433,784) (107,180)
--------- ---------
Cash flows from investing activities
Purchase of property and equipment - (2,005)
Purchase of license 2,000 (5,000)
Deposit of investing agreement - -
Deposit of lease agreement - (25,000)
--------- ---------
Net cash provided by (used in)
investing activities 2,000 (32,005)
Cash flows from financing activities
Proceeds from notes payable 217,500 150,000
Increase in accrued interest 16,740 7,647
Accretion of derivative conversion liability 37,263 -
Common stock issued for cash, net of costs 207,250 (18,250)
--------- ---------
Net cash provided by financing activities 478,753 139,397
--------- ---------
Net increase in cash and cash equivalents 46,969 212
Cash and cash equivalents, beginning of
fiscal year 212 -
--------- ---------
Cash and cash equivalents, end of period $ 47,181 $ 212
========= =========
27
Supplementary information:
--------------------------
Cash paid for:
Interest $ - $ -
====== =======
Income taxes - -
====== =======
Assignment of lease agreement as payment
for notes payable - 30,000
====== =======
Common stock issued for services -
@ $.06 per share $3,000 $ -
====== =======
See accompanying notes to audited consolidated financial statements.
28
PMX COMMUNITIES, INC.
(FORMERLY MERGE II, INC.)
(A DEVELOPMENT STAGE COMPANY)
December 31, 2010 and 2009
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - DISCRIPTION OF BUSINESS
PMX Communities, Inc. (The Company) "PMX" was organized under the laws
of the State of Nevada on December 29, 2004 under the name Merge II,
Inc. PMX's year end is December 31.
On February 10, 2009, by Unanimous Written Consent, the board of
directors authorized an amendment to its Certificate of Incorporation
to change the name of the corporation to PMX Communities, Inc. PMX
Communities also authorized an amendment to amend the articles of
Incorporation from 25,000,000 to 100,000,000 common shares authorized.
The amendments were filed on June 30, 2009.
On September 28, 2010, the Company formed PMX Gold, LLC, (PMX Gold) a
Florida limited liability company as a wholly owned subsidiary of the
Company to assist with evaluating and pursuing opportunities within the
Gold Mining and Retail Gold Sales Industries.
PMX, (through its wholly owned subsidiary PMX Gold, LLC) focuses on the
development of leveraged opportunities within the Retail Gold Sales and
Gold Mining Industries. We operate from our office at West Boca
Executive Suites, 7777 West Glades Road., Suite 100, Boca Raton, FL
33434.
PMX Communities, Inc. (The Company) was incorporated on December 29,
2004, in Nevada and was in the development stage through September 30,
2010. The quarter ended December 31, 2010 is the quarter during which
the Company is considered an operating company and is no longer in the
development stage.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements and notes are prepared in
accordance with accounting principles generally accepted in the United
States of America.
A summary of the significant accounting policies consistently applied
in the preparation of the accompanying financial statements is as
follows:
The accompanying financial statements were prepared assuming that the
Company will continue as a going concern. This basis of accounting
contemplates the recovery of the Company's assets and the satisfaction
of its liabilities in the normal course of operations.
29
PMX COMMUNITIES, INC.
(FORMERLY MERGE II, INC.)
(A DEVELOPMENT STAGE COMPANY)
December 31, 2009 and 2008
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
The Company's independent accountants issued a "going concern" opinion
on the Company's December 31, 2010 financial statements, since the
Company has experienced losses from operations in 2010 and 2009. (Note
15)
Cash and Cash equivalents
The Company considers all highly liquid debt instruments with original
maturities of three months or less to be cash equivalents.
Restricted cash
The Company has presented cash on hand associated with funding received
from an investor as restricted cash since the cash must be maintained
in a separate bank account and used only for specified projects (Note
8). This restricted balance is presented as a non-current asset on our
balance sheet.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
Principles of Consolidation
The consolidated financial statements include the accounts of PMX
Communities, Inc. and its wholly-owned subsidiary PMX Gold, LLC as of
September 28, 2010. All significant inter-company transactions have
been eliminated.
30
PMX COMMUNITIES, INC.
(FORMERLY MERGE II, INC.)
(A DEVELOPMENT STAGE COMPANY)
December 31, 2010 and 2009
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Inventories
Inventories are valued at the lower of cost (first-in, first-out) or
market, and include finished goods.
Equipment
Equipment is stated at cost, less accumulated depreciation.
Depreciation is provided using the straight-line method over the
estimated useful life of five years for equipment and seven years for
furniture and fixtures
Impairment of Long-Lived Assets
The Company evaluates the recoverability of long-lived assets and the
related estimated remaining useful lives when events or circumstances
lead management to believe that the carrying value of an asset may not
be recoverable and the undiscounted cash flows estimated to be
generated by those assets are less than the assets' carrying amount. In
such circumstances, those assets are written down to estimated fair
value. The Company recognizes an impairment loss when the sum of
expected undiscounted future cash flows is less than the carrying
amount of the asset. The amount of impairment is measured as the
difference between the asset's estimated fair value and its book value.
Common Stock, Common Stock Options
The Company uses the fair value recognition provision of ASC 718,
"Compensation-Stock Compensation," which requires the Company to
expense the cost of employee services received in exchange for an award
of equity instruments based on the grant date fair value of such
instruments. The Company uses the Black-Scholes option pricing model to
calculate the fair value of any equity instruments on the grant date.
The Company also uses the provisions of ASC 505-50, "Equity Based
Payments to Non-Employees," to account for stock-based compensation
awards issued to non-employees for services. Such awards for services
are recorded at either the fair value of the services rendered or the
instruments issued in exchange for such services, whichever is more
readily determinable, using the measurement date guidelines enumerated
in ASC 505-50.
31
PMX COMMUNITIES, INC.
(FORMERLY MERGE II, INC.)
(A DEVELOPMENT STAGE COMPANY)
December 31, 2010 and 2009
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Income Taxes
Under the asset and liability method prescribed under ASC 740, Income
Taxes, The Company uses the liability method of accounting for income
taxes. The liability method measures deferred income taxes by
applying enacted statutory rates in effect at the balance sheet
date to the differences between the tax basis of assets and
liabilities and their reported amounts on the financial statements.
The resulting deferred tax assets or liabilities are adjusted to
reflect changes in tax laws as they occur. A valuation allowance is
provided when it is more likely than not that a deferred tax asset will
not be realized.
The Company recognizes the financial statement benefit of an uncertain
tax position only after considering the probability that a tax
authority would sustain the position in an examination. For
tax positions meeting a "more-likely-than-not" threshold, the
amount recognized in the financial statements is the benefit
expected to be realized upon settlement with the tax authority. For
tax positions not meeting the threshold, no financial statement benefit
is recognized. As of December 31, 2010, the Company has had no
uncertain tax positions. The Company recognizes interest and
penalties, if any, related to uncertain tax positions as general and
administrative expenses. The Company currently has no federal or state
tax examinations nor has it had any federal or state examinations since
its inception. All of the Company's tax years are subject to federal
and state tax examination.
Revenue Recognition
The Company recognizes revenue when it is realized and realizable.
- Price is fixed or determinable; and
- Collectability is reasonably assured
Subject to these criterion, the Company recognizes revenue at the time
of shipment of the relevant merchandise. The Company offers its
individual customers a ten-day warranty if the item is returned with
their receipt and if the seal on the bullion is not broken. The
customer will receive their money back plus or minus the movement in
the price of gold. The Company estimates an allowance for sales returns
based on historical experience with product returns. The Company
closely follows the provisions of ASC 605, Revenue Recognition, which
includes the guidelines of Staff Accounting Bulletin No. 104 as
described above.
32
PMX COMMUNITIES, INC.
(FORMERLY MERGE II, INC.)
(A DEVELOPMENT STAGE COMPANY)
December 31, 2010 and 2009
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Income (loss) Per Common Share
Basic income (loss) per share is calculated using the weighted-average
number of common shares outstanding during each reporting period.
Diluted loss per share includes potentially dilutive securities such as
outstanding options and warrants, using various methods such as the
treasury stock or modified treasury stock method in the determination
of dilutive shares outstanding during each reporting period. Common
equivalent shares are excluded from the computation of net loss per
share since their effect is anti-dilutive.
For the net-loss periods ended December 31, 2010 and 2009, we excluded
any effect of the 1,000,000 and 0, outstanding options, respectively,
as their effect would be anti-dilutive.
Reclassifications
Certain prior period balances have been reclassified to conform to the
current year's presentation. These reclassifications had no impact on
previously reported results of operations or stockholders' equity.
Recent Authoritative Accounting Pronouncements
Fair value of Financial Instruments
ASU 2010-06. In January 2010, the FASB issued Accounting Standards
Update ("ASU") No. 2010-06, "Fair Value Measurements and Disclosures
(Topic 820) - Improving Disclosures about Fair Value Measurements"
("ASU 2010-06"). ASU 2010-06 amends ASC Topic 820, "Fair Value
Measurements and Disclosures" ("ASC 820") to require additional
disclosures regarding fair value measurements. Specifically, ASU 2010-
06 requires entities to disclose additional information regarding (i)
the reconciliation of recurring Level 3 measurements about purchases,
sales, issuances and settlements on a gross basis, (ii) the amounts of
significant transfers between Level 1 and Level 2 of the fair value
hierarchy and the reasons for these transfers and (iii) the reasons for
any transfers in or out of Level 3. In addition to these new disclosure
requirements, ASU 2010-06 also amends ASC 820 to further clarify
existing guidance pertaining to the level of disaggregation at which
fair value disclosures should be made and the requirements to disclose
information about the valuation techniques and inputs used in
estimating Level 2 and Level 3 fair value measurements. The update is
effective for interim and annual periods beginning after December 15,
2009, except for the requirement to separately disclose information
about purchases, sales, issuances, and settlements in the
reconciliation of recurring Level 3 measurements on a gross basis which
becomes effective for fiscal years (and interim periods within those
33
PMX COMMUNITIES, INC.
(FORMERLY MERGE II, INC.)
(A DEVELOPMENT STAGE COMPANY)
December 31, 2010 and 2009
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
fiscal years) beginning after December 15, 2010, and is not expected to
have a material impact on the Company's results of operations or
financial condition. The Company adopted the first portion of the
updates effective January 1, 2010, with no material impact on the
Company's financial condition, results of operations or cash flows. The
Company does not expect the adoption of the remainder of the update to
have a material impact on the Company's financial condition, results of
operations or cash flows.
The Company has adopted all recently issued accounting pronouncements.
The adoption of the accounting pronouncements, including those not yet
effective, is not anticipated to have a material effect on the
financial position or results of operations of the Company.
NOTE 3 - INVENTORY
The Company maintains a deposit account which is used to purchase
precious metal inventory.
Inventory consists of the following:
December 31, 2010 December 31, 2009
----------------- -----------------
Finished Goods $92,922 $-
------- --
$92,922 $-
======= ==
NOTE 4 - PROPERTY AND EQUIPMENT
Components of property and equipment are as:
December 31, 2010 December 31, 2009
----------------- -----------------
Office Equipment $1,600 $1,600
Office Furniture and Fixtures 405 405
Less: Accumulated Depreciation (536) (158)
------ ------
Property and Equipment, net $1,469 $1,847
====== ======
Depreciation for the years ended December 31, 2010 and 2009 was $378
and $158, respectively.
34
PMX COMMUNITIES, INC.
(FORMERLY MERGE II, INC.)
(A DEVELOPMENT STAGE COMPANY)
December 31, 2010 and 2009
NOTES TO FINANCIAL STATEMENTS
NOTE 5 - PREPAID DEPOSIT
In May of 2010 a Consultant to PMX identified a Gold Bullion Vending
Machine (GOLD to go(tm) ATM) deployed at the Emirates Palace Hotel in
Dubai. The GOLD to go(tm) ATM vending machine is an unmanned point of sale
unit that dispenses various gold bullion products based on constantly
updated real time market pricing information. The machine was being
marketed and deployed by a German Company, Ex Oriente Lux, AG (EOL).
On September 2, 2010, the Company entered into a preliminary agreement
with Ex Oriente Lux to conduct exclusive test marketing of the GOLD to
go(tm) ATM vending machine in the state of Florida. Subsequent to the
signing of the agreement, the Company paid a non-refundable deposit of
10,000 Euros ($13,209 US) to EOL to be applied to the first vending
machine(s) to be ordered by the Company. In December 2010 the Company
paid an additional $70,394 to EOL as a deposit for the first machine.
Accordingly, the Company proceeded with the goal of setting up a test
marketing of one of the units at the Town Center Mall in Boca Raton, FL
for launch on Friday December 17, 2010 the Company commenced retail
sales of gold bullion via the vending machine at the Town Center Mall
in Boca Raton, FL
December 31, December 31,
2010 2009
---- ----
Prepaid deposit $83,603 $ -
------- ------
$83,603 $ -
======= ======
NOTE 6 - RESTRICTED CASH
The Company had restricted cash of $40,372 and $0 at December 31, 2010
and 2009 respectively, which represents funds that are restricted for
use that are not available for use in the Company's normal operations."
On November 12, 2010, The Company entered into a promissory note with
one investor for the principal sum of one hundred twenty five thousand
dollars ($125,000). The funds represented by this note are to be
maintained in a segregated account by the Company and can only be used
for the purchase of Gold Bullion Products for the Company's Gold-to-go
vending machine. When any Gold products are sold the funds will be re-
deposited into said account for further inventory purchases (less any
gross profits which will be credited to the Company's general operating
account). The Company intends to use offsetting margins to protect
against market losses, but
35
PMX COMMUNITIES, INC.
(FORMERLY MERGE II, INC.)
(A DEVELOPMENT STAGE COMPANY)
December 31, 2010 and 2009
NOTES TO FINANCIAL STATEMENTS
NOTE 6 - RESTRICTED CASH (Continued)
in the event of any market losses or shortfall the Company would be
responsible to reimburse the note holder for any losses. In the event
the Gold Vending Sales Program is terminated then the funds would be
repaid to the note holder when any remaining gold bullion products
would be sold to wholesalers. (Note 8)
NOTE 7 - ACCRUED EXPENSES
Accrued liabilities represent expenses that apply to the reported
period and have not been billed by the provider or paid by the Company.
Accrued liabilities consisted of the following:
December 31, December 31,
2010 2009
---- ----
Accrued professional fees $17,645 $4,960
Sales Tax Payable 4,576 -
------- ------
$22,221 $4,960
NOTE 8 - NOTES PAYABLE
During the year December 31, 2009, the Company entered into promissory
notes with six investors who are also shareholders of the company for
the sum of one hundred and twenty five thousand dollars ($125,000). The
entire amount with eight percent (8%) interest per annum is due two
years (720 days) from date of issue. In the event that the Company
elects to prepay the Company will be obligated to pay a minimum of one
(1) years interest. At the option of the holder , any prepayment of
principal plus interest may be in the form of cash or common stock of
the Company at a discounted price of fifty (50%) percent of the average
closing bid of the stock on the preceding 30 days of trading.
If the Company does not prepay the notes in its entirety, the holder
will have the option to convert the debt due from these notes into
common stock of the Company according to the following:
i) after 180 days the holder may elect to convert 25% of the principal
plus accrued interest into common stock of the Company at a discounted
price of fifty (50%) percent of the average closing bid of the stock on
the preceding 30 days of trading.
36
PMX COMMUNITIES, INC.
(FORMERLY MERGE II, INC.)
(A DEVELOPMENT STAGE COMPANY)
December 31, 2010 and 2009
NOTES TO FINANCIAL STATEMENTS
NOTE 8 - NOTES PAYABLE (Continued)
ii) after 360 days the holder may elect to convert 50% of the principal
plus accrued interest into common stock of the Company at a discounted
price of fifty (50%) percent of the average closing bid of the stock on
the preceding 30 days of trading.
iii) after 540 days the holder may elect to convert 75% of the
principal plus accrued interest into common stock of the Company at a
discounted price of fifty (50%) percent of the average closing bid of
the stock on the preceding 30 days of trading.
iv) after 720 days the holder may elect to convert any remaining
principal plus accrued interest into common stock of the Company at a
discounted price of fifty (50%) percent of the average closing bid of
the stock on the preceding 30 days of trading.
On June 28, 2009 the Company entered into an assignment and lease
assumption with AU Spectators, LLC. (AU). On February 14, 2009 the
Company had entered into a Lease Purchase Option Agreement with Western
Sierra Mining Corporation, for which the Company paid to Western Sierra
Mining Corporation a deposit of twenty-five thousand ($25,000) dollars.
Under the agreement with AU the Company agrees to assign all rights and
obligations of the Company under the lease; and each of the members of
AU have extended loans to the Company represented by promissory notes.
In consideration for the agreement, each of the members of AU have
agreed to collectively forgive the repayment of the sum of thirty-
thousand ($30,000) dollars of the notes. The assignment and assumption
is effective as of June 30, 2009. The Company has recognized five
thousand ($5,000) in income on the gain on this transaction.
During the year December 31, 2009, The Company entered into a
promissory note with one investor for the sum of twenty five thousand
dollars ($25,000). The entire amount with ten percent (10%) interest
per annum is due two years (720 days) from date of issue. In the event
that the Company elects to prepay, Company must pay a minimum of six
months interest.
The Company has subsequently modified the terms of this note to allow
the holder the option to convert the debt due from this note into
common stock of the Company, according to the following in exchange for
lowering the stated rate from ten percent (10%) interest per annum to
eight percent (8%) interest per annum. All terms and conditions will
apply retroactive to the date of the original note. In the event that
the Company elects to prepay the Company will be obligated to pay a
minimum of one year interest. At the option of the note holder , any
prepayment of principal plus interest may be in the form of cash or
37
PMX COMMUNITIES, INC.
(FORMERLY MERGE II, INC.)
(A DEVELOPMENT STAGE COMPANY)
December 31, 2010 and 2009
NOTES TO FINANCIAL STATEMENTS
NOTE 8 - NOTES PAYABLE (Continued)
common stock of the Company at a discounted price of fifty (50%)
percent of the average closing bid price of the stock on the preceding
30 days trading.
If the Company does not prepay the note in its entirety, the holder
will have the option to convert the debt due from these notes into
common stock of the Company according to the following:
i) after 180 days the holder may elect to convert 25% of the principal
plus accrued interest into common stock of the Company at a discounted
price of fifty (50%) percent of the average closing bid of the stock on
the preceding 30 days of trading.
ii) after 360 days the holder may elect to convert 50% of the principal
plus accrued interest into common stock of the Company at a discounted
price of fifty (50%) percent of the average closing bid of the stock on
the preceding 30 days of trading.
iii) after 540 days the holder may elect to convert 75% of the
principal plus accrued interest into common stock of the Company at a
discounted price of fifty (50%) percent of the average closing bid of
the stock on the preceding 30 days of trading.
iv) after 720 days the holder may elect to convert any remaining
principal plus accrued interest into common stock of the Company at a
discounted price of fifty (50%) percent of the average closing bid of
the stock on the preceding 30 days of trading.
During the year December 31, 2010, The Company entered into promissory
notes with two investors who are also shareholders of the company for
the sum of three thousand dollars ($3,000). The entire amount with ten
percent (10%) interest per annum is due one year (360 days) from date
of issue. In the event that the Company elects to prepay the Company
will be obligated to pay a minimum of six months interest.
During the year December 31, 2010, The Company entered into two
promissory notes with one investor who is also a shareholder of the
company for the sum of ten thousand dollars ($10,000). The entire
amount with ten percent (10%) interest per annum is due two years (720
days) from date of issue. In the event that the Company elects to
prepay the Company will be obligated to pay a minimum of six months
interest.
The Company has subsequently modified the terms of this note to allow
the holder the option to convert the debt due from this note into
common stock of the Company, according to the following schedule and
38
PMX COMMUNITIES, INC.
(FORMERLY MERGE II, INC.)
(A DEVELOPMENT STAGE COMPANY)
December 31, 2010 and 2009
NOTES TO FINANCIAL STATEMENTS
NOTE 8 - NOTES PAYABLE (Continued)
terms in exchange for lowering the stated rate from ten percent (10%)
interest per annum to eight percent (8%) interest per annum. All terms
and conditions will apply retroactive to the date of the original note.
In the event that the Company elects to prepay the Company will be
obligated to pay a minimum of one year interest.. At the option of the
note holder , any prepayment of said principal plus interest may be in
the form of cash or common stock of the Company at a discounted price
of fifty (50%) percent of the average closing bid price of the stock on
the preceding 30 days trading.
If the Company does not prepay the note in its entirety, the holder
will have the option to convert the debt due from these notes into
common stock of the Company according to the following:
i) after 180 days the holder may elect to convert 25% of the principal
plus accrued interest into common stock of the Company at a discounted
price of fifty (50%) percent of the average closing bid of the stock on
the preceding 30 days of trading.
ii) after 360 days the holder may elect to convert 50% of the principal
plus accrued interest into common stock of the Company at a discounted
price of fifty (50%) percent of the average closing bid of the stock on
the preceding 30 days of trading.
iii) after 540 days the holder may elect to convert 75% of the
principal plus accrued interest into common stock of the Company at a
discounted price of fifty (50%) percent of the average closing bid of
the stock on the preceding 30 days of trading.
iv) after 720 days the holder may elect to convert any remaining
principal plus accrued interest into common stock of the Company at a
discounted price of fifty (50%) percent of the average closing bid of
the stock on the preceding 30 days of trading.
During the year December 31, 2010, The Company entered into a
promissory note with one investor for the sum of ten thousand dollars
($10,000). The entire amount with ten percent (10%) interest per annum
is due two years (720 days) from date of issue. In the event that the
Company elects to prepay the Company will be obligated to pay a minimum
of six months interest.
The Company has subsequently modified the terms of this note to allow
the holder the option to convert the debt due from this note into
common stock of the Company, according to the following schedule and
terms in exchange for lowering the stated rate from ten percent (10%)
interest per annum to eight percent (8%) interest per annum. All terms
39
PMX COMMUNITIES, INC.
(FORMERLY MERGE II, INC.)
(A DEVELOPMENT STAGE COMPANY)
December 31, 2010 and 2009
NOTES TO FINANCIAL STATEMENTS
NOTE 8 - NOTES PAYABLE (Continued)
and conditions will apply retroactive to the date of the original note.
In the event that the Company elects to prepay this note the Company
will be obligated to pay a minimum of one year interest. At the option
of the note holder , any prepayment of said principal plus interest may
be in the form of cash or common stock of the Company at a discounted
price of fifty (50%) percent of the average closing bid price of the
stock on the preceding 30 days trading.
If the Company does not prepay the note in its entirety, the holder
will have the option to convert the debt due from these notes into
common stock of the Company according to the following:
i) after 180 days the holder may elect to convert 25% of the principal
plus accrued interest into common stock of the Company at a discounted
price of fifty (50%) percent of the average closing bid of the stock on
the preceding 30 days of trading.
ii) after 360 days the holder may elect to convert 50% of the principal
plus accrued interest into common stock of the Company at a discounted
price of fifty (50%) percent of the average closing bid of the stock on
the preceding 30 days of trading.
iii) after 540 days the holder may elect to convert 75% of the
principal plus accrued interest into common stock of the Company at a
discounted price of fifty (50%) percent of the average closing bid of
the stock on the preceding 30 days of trading.
iv) after 720 days the holder may elect to convert any remaining
principal plus accrued interest into common stock of the Company at a
discounted price of fifty (50%) percent of the average closing bid of
the stock on the preceding 30 days of trading.
During the year December 31, 2010, the Company entered into a
promissory note with one investor for the sum of five thousand dollars
($25,000). The entire amount with ten percent (10%) interest per annum
is due two years (720 days) from date of issue. In the event that the
Company elects to prepay the Company will be obligated to pay a minimum
of one (1) years interest. At the option of the holder , any prepayment
of principal plus interest may be in the form of cash or common stock
of the Company at a discounted price of fifty (50%) percent of the
average closing bid of the stock on the preceding 30 days of trading.
If the Company does not prepay the notes in its entirety, the holder
will have the option to convert the debt due from these notes into
common stock of the Company according to the following:
40
PMX COMMUNITIES, INC.
(FORMERLY MERGE II, INC.)
(A DEVELOPMENT STAGE COMPANY)
December 31, 2010 and 2009
NOTES TO FINANCIAL STATEMENTS
NOTE 8 - NOTES PAYABLE (Continued)
i) after 180 days the holder may elect to convert 25% of the principal
plus accrued interest into common stock of the Company at a discounted
price of fifty (50%) percent of the average closing bid of the stock on
the preceding 30 days of trading.
ii) after 360 days the holder may elect to convert 50% of the principal
plus accrued interest into common stock of the Company at a discounted
price of fifty (50%) percent of the average closing bid of the stock on
the preceding 30 days of trading.
iii) after 540 days the holder may elect to convert 75% of the
principal plus accrued interest into common stock of the Company at a
discounted price of fifty (50%) percent of the average closing bid of
the stock on the preceding 30 days of trading.
iv) after 720 days the holder may elect to convert any remaining
principal plus accrued interest into common stock of the Company at a
discounted price of fifty (50%) percent of the average closing bid of
the stock on the preceding 30 days of trading.
During the year ended December 31, 2010, The Company entered into a
three promissory notes with two investors who also shareholders of the
company for the sum of twenty seven thousand dollars ($27,000). The
entire amount with ten percent (10%) interest is due two years (720
days) from date of issue. In the event that the Company elects to
prepay this note the Company will be obligated to pay a minimum of six
months interest.
During the year ended December 31, 2010, The Company entered into three
promissory notes with one investor for the sum of seventeen thousand
five hundred dollars ($17,500). The entire amount with ten percent
(10%) interest is due two years (720 days) from date of issue. In the
event that the Company elects to prepay this note the Company will be
obligated to pay a minimum of six months interest.
During the year ended December 31, 2010, The Company entered into a
promissory note with one investor for the sum of one hundred twenty
five thousand dollars ($125,000). The entire amount with ten percent
(10%) interest per annum is due two years (720 days) from date of
issue. In the event that the Company elects to prepay the Company will
be obligated to pay a minimum of six months interest. The funds
represented by this note are to be maintained in a segregated account
by the Company and can only be used for the purchase of Gold Bullion
Products for the Company's Gold-to-go vending machine test marketing
program. When any Gold products are sold the funds will be re-deposited
into said account for further inventory purchases (less any gross
profits which will be credited to the Company's general operating
41
PMX COMMUNITIES, INC.
(FORMERLY MERGE II, INC.)
(A DEVELOPMENT STAGE COMPANY)
December 31, 2010 and 2009
NOTES TO FINANCIAL STATEMENTS
NOTE 8 - NOTES PAYABLE (Continued)
account). The Company intends to use offsetting margins to protect
against market losses, but in the event of any market losses or
shortfall the Company would be responsible to reimburse the note holder
for any losses. In the event the Gold Vending Sales Program is
terminated then the funds would be repaid to the note holder when any
remaining gold bullion products would be sold to wholesalers. (Note 5)
At December 31, 2010 the Company has accrued interest on the notes of
$24,387.
Promissory notes payable consists of the following:
Opening balance at January 1, 2009 $ -
Principal contributed 150,000
Add: Accrued interest 7,647
Less: Repayment under lease assumption (30,000)
--------
Balance at December 31, 2009 127,647
--------
Principal contributed 217,500
Add: Accrued interest 16,740
Less effect of conversion (112,336)
--------
Balance at December 31, 2010 $249,551
========
Future maturities of notes payable are as follows:
Year ending
December 31, 2010
-----------------
2011 $ 44,465
2012 205,086
2013 -
2014 -
2015 -
--------
Total $249,551
At December 31, 2010, the Company had 14 notes outstanding that were
indexed to the Company's common stock. The beneficial conversion of
that stock has resulted in a liability to our holders for $149,599.
42
PMX COMMUNITIES, INC.
(FORMERLY MERGE II, INC.)
(A DEVELOPMENT STAGE COMPANY)
December 31, 2010 and 2009
NOTES TO FINANCIAL STATEMENTS
NOTE 9 - EQUITY TRANSACTIONS
On February 1, 2009 the Company approved a 40 to 1 forward split on the
common shares.
On February 10, 2009 the Company amended the articles of incorporation
to increase the number of authorized shares from 25,000,000 shares at
$.0001 to 100,000,000 shares ay $.0001.
During the year ended December 31, 2009 the Company incurred costs to
file its registration statement of $19,000. During the year ended
December 31, 2010 the Company received a credit of ($1,000). These
costs are offset against additional paid in capital.
On February 23, 2010, the Company entered into an agreement to issue
stock options to purchase 1,000,000 common shares to Mr. McCauley, a
director at $.25 per common share
On August 18, 2010, the registrant sold 2,750,000 restricted common
shares to ALEH Investments, LLC, a sophisticated investor at $.0375 per
common share for a total of $103,125. The registrant granted the
investor piggyback registration rights whereby the registrant will
include the investor's common shares in any public offering the
registrant conducts. The registrant will bear all costs of the
registration of investor's common shares.
On November 12, 2010, the registrant sold 2,750,000 restricted common
shares in a private placement at $.0375 per common share for a total of
$103,125. The registrant granted the investor piggyback registration
rights whereby the registrant will include the investor's common shares
in any public offering the registrant conducts. The registrant will
bear all costs of the registration of investor's common shares.
On December 6, 2010 the Company issued 50,000 shares of common stock in
exchange for services to a consultant for a value of $3,000.
43
PMX COMMUNITIES, INC.
(FORMERLY MERGE II, INC.)
(A DEVELOPMENT STAGE COMPANY)
December 31, 2010 and 2009
NOTES TO FINANCIAL STATEMENTS
NOTE 9 - EQUITY TRANSACTIONS (Continued)
For the years ended December 31, 2010 and 2009, the Company recorded
stock-based compensation expense of $0 and $0 respectively.
NOTE 10 - RELATED PARTY
On February 23, 2010, Dennis Carrasquillo, an officer and director
resigned for personal reasons and sold 33,000,000 common shares to
Michael C. Hiler, an officer and director of PMX Communities for $.001
per common share.
Agreement with OTC Business Solutions. On February 1, 2009, The
Company entered into a consulting agreement with OTC Business
Solutions, then an unaffiliated company. As of February 23, 2010,
Michael C. Hiler, its owner, became an officer and director of PMX
Communities. The consultant provided management consulting services.
The consultant was issued 5,000,000 common shares for services
previously rendered to the Company. Additionally, the consultant
received $60,000.
On February 23, 2010, OTC Business Solutions sold 4,000,000 common
shares to two non-affiliates for consideration of $.25 per common
share.
Agreement with Invisosoft. Invisosoft is a software developer of a
proprietary and copyrighted audio video software product known as
Invisosoft Live Communicator Suite that enables VOIP/Audiovisual
conferencing. On June 23, 2009, PMX Communities acquired an initial
100 Activation Seats of the Invisosoft Live Communicator Suite
Software. The seats were acquired for $50 per seat. The term of the
agreement is for five years. In 2010 the Company changed business
direction and determined that the licenses were impaired and amortized
the remaining balance at December 31, 2010. Dennis Carrasquillo, a
former officer and director of PMX Communities, Inc. has been vice
president of Invisosoft, Inc. since 2005 (Note 12).
From inception through August 10, 2009, our administrative functions
were operated from the home of our former president. We did not pay
our president for use of such space.
During the year ended December 31, 2009, The Company entered into
promissory notes with six investors who are also shareholders of the
company for the principal sum of one hundred and twenty five thousand
dollars ($125,000) (Note 8).
44
PMX COMMUNITIES, INC.
(FORMERLY MERGE II, INC.)
(A DEVELOPMENT STAGE COMPANY)
December 31, 2010 and 2009
NOTES TO FINANCIAL STATEMENTS
NOTE 10 - RELATED PARTY (Continued)
During the year ended December 31, 2010, The Company entered into
promissory notes with five investors who are also shareholders of the
company for the principal sum of thirteen thousand dollars ($165,000)
(Note 8).
On February 23, 2010, we entered into an agreement pursuant to which we
issued stock options to purchase 1,000,000 common shares to Mr.
McCauley, a director at $.25 per common share.
NOTE 11 - LEASE AGREEMENT
On August 10, 2009, PMX Communities entered into a lease agreement with
Enterprise Development Corporation, a non profit organization
associated with Florida Atlantic University Incubator Technology
Program. The office space consists of 120 sq ft of space at a cost of
$600.00 per month. The lease agreement is on a month to month basis,
with no contractual obligation. This lease terminated in September
2010.
The Company has signed a lease agreement with West Boca Executive
Suites on September 20, 2010. The office space located at 7777 West
Glades Road, Suite 100, Boca Raton, FL 33434, at a cost of $1,000.00
per month. The lease agreement is for a term of twelve months.
The Company has signed a lease agreement with Town Center at Boca Raton
on November 11, 2010. The space is located at 6000 Glades Road, Boca
Raton, FL 33431 at a cost of 2,120 per month. The lease agreement is
for a term of three and a half months.
Security Deposits consist of the following:
December 31, 2010 December 31, 2009
----------------- -----------------
West Boca Executive Suites $ 939 $ -
Town Center at Boca Raton 2,000 -
------ ---
$2,939 $ -
====== ===
NOTE 12 - LICENSE AGREEMENT
We had entered into a license agreement with Invisosoft which is a
software developer of a proprietary and copyrighted audio video
software product known as Invisosoft Live Communicator Suite that
enables VOIP/Audiovisual conferencing. On June 23, 2009, PMX
Communities agreed to acquire an initial 100 Activation Seats of the
45
PMX COMMUNITIES, INC.
(FORMERLY MERGE II, INC.)
(A DEVELOPMENT STAGE COMPANY)
December 31, 2010 and 2009
NOTES TO FINANCIAL STATEMENTS
NOTE 12 - LICENSE AGREEMENT (Continued)
Invisosoft Live Communicator Suite Software, with an effective date of
August 1, 2009, for $5,000. In 2010 the Company changed business
direction and determined that the licenses were impaired and amortized
the remaining balance at December 31, 2010 and recognized a loss on
impairment of $1,583.
NOTE 13 - INCOME TAXES
For income tax purposes, the Company has elected to capitalize start-up
costs incurred during the period from December 29, 2004 (inception)
through December 31, 2010 totaling $405,876. The start-up costs are
being amortized over sixty months beginning in the year of initial
operations.
NOTE 14 - NET LOSS PER SHARE
Basic loss per common share has been calculated based on the weighted
average number of shares outstanding during the period after giving
retroactive effect to stock splits. There are no dilutive securities at
December 31, 2010 and 2009 for purposes of computing fully diluted
earnings per share.
The following reconciles amounts reported in the financial statements:
Year ended Year ended
December 31, December 31,
2010 2009
---- ----
Net loss $(289,916) $(113,685)
Denominator for basic loss per share -
Basic Weighted average stares 54,989,726 49,140,000
Basic loss per common share $(.00) $(.00)
NOTE 15 - GOING CONCERN
As reflected in the accompanying financial statements, the Company had
a net loss for the year ended December 31, 2010 of $289,916. At
December 31, 2010, the Company has $109,056 in operating 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 and raise
capital. The financial statements do not include any adjustments that
might be necessary if the Company is unable to continue as a going
concern.
46
PMX COMMUNITIES, INC.
(FORMERLY MERGE II, INC.)
(A DEVELOPMENT STAGE COMPANY)
December 31, 2010 and 2009
NOTES TO FINANCIAL STATEMENTS
NOTE 16 - SUBSEQUENT EVENTS
Subsequent to year end, The Company entered into promissory notes with
five investors for the sum of ten thousand dollars ($95,000). The
entire amount with ten percent (10%) interest per annum is due two
years (720 days) from date of issue. In the event that the Company
elects to prepay this note the Company will be obligated to pay a
minimum of six months interest to the holder of this note.
Subsequent to year end the Company's active test marketing of the Gold
to Go machine ceased on or about February 28, 2011. During the month
of March the machine was unattended but remained intermittently
operational until it was taken off-line permanently March 23, 2011.
Subsequent to year end, the Company issued 50,000 shares of common
stock for to a consultant for services rendered.
The Company has evaluated subsequent events pursuant to ASC Topic 855
and no other events require disclosure.
47
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
None
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
------------------------------------------------
We maintain disclosure controls and procedures, as defined in Rules
13a-15(e) and 15d-15(e) under the Exchange Act that are designed to
insure that information required to be disclosed in the reports we file
or submit under the Exchange Act is recorded, processed, summarized and
reported within the periods specified in the Securities and Exchange
Commission's rules and forms and that such information is accumulated
and communicated to our management, including our chief executive
officer and chief financial officer, or the persons performing similar
functions, to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of our CEO and CFO, or
the persons performing similar functions, our management has evaluated
the effectiveness of our disclosure controls and procedures as of the
end of the period covered by this annual report. Based on that
evaluation, our CEO and CFO, or the persons performing similar
functions, concluded that our disclosure controls and procedures were
effective as of December 31, 2010.
Management's Annual Report on Internal Control over Financial Reporting
-----------------------------------------------------------------------
Our management is responsible for establishing and maintaining adequate
internal control over financial reporting. Our internal control over
financial reporting is the process designed by and under the
supervision of our CEO and CFO, or the persons performing similar
functions, to provide reasonable assurance regarding the reliability of
our financial reporting and the preparation of our financial statements
for external reporting in accordance with accounting principles
generally accepted in the United States of America. Management has
evaluated the effectiveness of our internal control over financial
reporting using the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission in Internal Control over
Financial Reporting - Guidance for Smaller Public Companies.
Under the supervision and with the participation of our CEO and CFO, or
the persons performing similar functions, our management has assessed
the effectiveness of our internal control over financial reporting as
of December 31, 2010, and concluded that it is effective.
This annual report does not include an attestation report of our
registered public accounting firm regarding internal control over
financial reporting. Management's report was not subject to
attestation by the registrant's registered public accounting firm
pursuant to temporary rules of the Securities and Exchange Commission
that permit the registrant to provide only management's report in this
annual report.
48
Evaluation of Changes in Internal Control over Financial Reporting
------------------------------------------------------------------
Under the supervision and with the participation of our CEO and CFO, or
those persons performing similar functions, our management has
evaluated changes in our internal controls over financial reporting
that occurred during the fourth quarter of 2010. Based on that
evaluation, our CEO and CFO, or those persons performing similar
functions, did not identify any change in our internal control over
financial reporting that has materially affected, or is reasonably
likely to materially affect, our internal control over financial
reporting.
Important Considerations
------------------------
The effectiveness of our disclosure controls and procedures and our
internal control over financial reporting is subject to various
inherent limitations, including cost limitations, judgments used in
decision making, assumptions about the likelihood of future events, the
soundness of our systems, the possibility of human error, and the risk
of fraud. Moreover, projections of any evaluation of effectiveness to
future periods are subject to the risk that controls may become
inadequate because of changes in conditions and the risk that the
degree of compliance with policies or procedures may deteriorate over
time. Because of these limitations, there can be no assurance that any
system of disclosure controls and procedures or internal control over
financial reporting will be successful in preventing all errors or
fraud or in making all material information known in a timely manner to
the appropriate levels of management.
Item 9B. Other Information
None
49
PART III
Item 10. Directors and Executive Officers and Corporate Governance
Our bylaws provide that the number of directors who shall constitute
the whole board shall be such number as the board of directors shall at
the time have designated. We confirm that the number of authorized
directors has been set at one or more in number pursuant to our bylaws.
Each director shall be selected for a term of one year and until his
successor is elected and qualified. Vacancies are filled by a majority
vote of the remaining directors then in office with the successor
elected for the unexpired term and until the successor is elected and
qualified. The directors, officers and significant employees are as
follows:
Name Age Position Held Since
------------------- ---- ------------------------- ----------------
Michael C. Hiler 52 President/CEO/Director February 23, 2010
CFO/Controller to present
Mervyn M. Gervis 62 VP/Director May 15, 2009 to
present
Michael W. McCauley 44 VP/Director February 23, 2010
to present
Business Experience of Officers, Directors and Significant Employees
--------------------------------------------------------------------
Michael C. Hiler has been president, chief executive officer, chief
financial officer, controller and a director of the registrant since
February 23, 2010. Prior to this time Mr. Hiler had served as a
business consultant to the registrant since February, 2009. From May
2006 to present, Mr. Hiler has been the president of OTC Business
Solutions, Inc., a business consultant to public and private companies.
From June 2004 to present, Mr. Hiler was a private investor and
business consultant. Mr. Hiler attended various classes at Amherst
University from 1979-1980. Additionally, Mr. Hiler attended various
classes at Broward Community College from 1981-1982.
Mervyn M. Gervis has been vice president of the registrant since May
2009. From 1995 to present, Mr. Gervis has been president of Universal
Telecommunications, Inc., a telecommunications company. Since 2004,
Mr. Gervis has been president of Network Telecom Consultants, Inc., a
telecommunications consultancy. Since 2006, Mr. Gervis has been a
managing member of 811 Hillsboro, LLC, a telecommunications company.
Mr. Gervis earned a Bachelor of Commerce from the University of
Witwatersrand in Johannesburg, South Africa in 1972.
Michael W. McCauley has been vice president and director of the
registrant since February 23, 2010. From 1995 to present, Mr. McCauley
has been president of Universal Jet Aviation, a private aviation
company. From December 2005 to present, Mr. McCauley has been
president and chief executive officer of Champion Flight Services,
Inc., a private aircraft services company. From February 2008 to
50
present, Mr. McCauley has been president and chief executive officer of
Executive Jet Services, Inc., a private jet services company. Mr.
McCauley attended both Palm Beach Community College and the Florida
Institute of Technology where he took various courses from
approximately 1987 to 1991. Mr. McCauley also attended various classes
at Northwood University from 2003 to 2004.
The above named directors will serve in their capacity as director
until our next annual shareholder meeting to be held within six months
of our fiscal year's close. Directors are elected for one-year terms.
Director and Officer Resignations
---------------------------------
On February 23, 2010, Dennis Carrasquillo, an officer and director
resigned for personal reasons and sold 33,000,000 common shares to
Michael C. Hiler, an officer and director of PMX Communities for $.001
per common share.
Committees of the Board of Directors
------------------------------------
We do not have standing audit, nominating or compensation committees,
or committees performing similar functions. Our board of directors
believes that it is not necessary to have standing audit, nominating or
compensation committees at this time because the functions of such
committees are adequately performed by our board of directors.
Compliance with Section 16(A) of the Securities Exchange Act of 1934
--------------------------------------------------------------------
To our knowledge, no director, officer or beneficial owner of more than
ten percent of any class of our equity securities, failed to file on a
timely basis reports required by Section 16(a) of the Exchange Act
during 2010.
Code of Ethics Policy
---------------------
We have not yet adopted a code of ethics that applies to our principal
executive officer, principal financial officer, principal accounting
officer or controller or persons performing similar functions.
Corporate Governance
--------------------
There have been no changes in any state law or other procedures by
which security holders may recommend nominees to our board of
directors. In addition to having no nominating committee for this
purpose, we currently have no specific audit committee and no audit
committee financial expert. Based on the fact that our current
business affairs are simple, any such committees are excessive and
beyond the scope of our business and needs.
Family Relationships
--------------------
There are no family relationships between our officers and directors.
51
Involvement in Certain Legal Proceedings
----------------------------------------
None of our directors, executive officers and control persons has been
involved in any of the following events during the past ten years:
- Any bankruptcy petition filed by or against any business of which
such person was a general partner or executive officer either at the
time of the bankruptcy or within two years prior to that time,
- Any conviction in a criminal proceeding or being subject to any
pending criminal proceeding (excluding traffic violations and other
minor offenses);
- Being subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise
limiting his or her involvement in any type of business, securities or
banking activities,; or
- Being found by a court of competent jurisdiction (in a civil
action), the Commission or the Commodity Futures Trading Commission to
have violated a federal or state securities or commodities law, and the
judgment has not been reversed, suspended, or vacated.
Indemnification
---------------
The registrant shall indemnify to the fullest extent permitted by, and
in the manner permissible under the laws of the state of Nevada, any
person made, or threatened to be made, a party to an action or
proceeding, whether criminal, civil, administrative or investigative,
by reason of the fact that he is or was a director or officer of the
registrant, or served any other enterprise as director, officer or
employee at the request of the registrant. The board of directors, in
its discretion, shall have the power on behalf of the registrant to
indemnify any person, other than a director or officer, made a party to
any action, suit or proceeding by reason of the fact that he/she is or
was an employee of the registrant.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the
registrant, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceedings) is asserted by
such director, officer, or controlling person in connection with any
securities being registered, the registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issues.
INDEMNIFICATION OF OFFICERS OR PERSONS CONTROLLING THE REGISTRANT FOR
LIABILITIES ARISING UNDER THE SECURITIES ACT OF 1933, IS HELD TO BE
AGAINST PUBLIC POLICY BY THE SECURITIES AND EXCHANGE COMMISSION AND IS
THEREFORE UNENFORCEABLE.
52
Item 11. Executive Compensation
We may elect to award a cash bonus to key employees, directors,
officers and consultants based on meeting individual and corporate
planned objectives.
Summary Compensation Table
--------------------------
Nonqualified
Non-equity Deferred
Name and Stock Option Incentive Comp All other
Principal Position Year Salary Bonus Awards Awards Plan Comp Earnings Comp Total
------------------- ---- ------- --- --- --- --- --- ------- -------
Michael C. Hiler 2010 $65,800 - - - - - - $65,800
CEO/CFO 2009 - - - - - - $60,000 $60,000
2008 - - - - - - - -
Marvyn M Gervis 2010 - - - - - - - -
VP 2009 - - - - - - - -
2008 - - - - - - - -
Michael W. McCauley 2010 - - - - - - - -
VP 2009 - - - - - - - -
2008 - - - - - - - -
Dennis Carrasquillo 2010 - - - - - - - -
2009 $22,500 - - - - - - $22,500
Former CEO/CFO 2008 - - - - - - - -
On May 15, 2009, we entered into an agreement pursuant to which we
issued 1,000,000 common shares to Mr. Gervis for services valued at
$100. No cash has been paid to the directors in their capacity as
such.
On February 23, 2010, we entered into an agreement pursuant to which we
issued stock options to purchase 1,000,000 common shares to Mr.
McCauley at $.25 per common share.
No cash has been paid to the directors in their capacity as such.
Item 12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters
The following table sets forth, as of April 15, 2011, the number and
percentage of our outstanding shares of common stock owned by (i) each
person known to us to beneficially own more than 5% of its outstanding
common stock, (ii) each director, (iii) each named executive officer
and significant employee, and (iv) all officers and directors as a
group.
53
The number of shares listed below includes shares that each shareholder
listed in the table has the right to acquire beneficial ownership of
within 60 days.
Percentage of
Number & Class Outstanding
Name and Address of Shares Common Shares
---------------- --------------------- ---------
Michael C. Hiler(1)(2) 33,000,000 direct 55.74%
10504 NW 56th Drive 1,000,000 indirect(3) 1.69%
Coral Springs, FL 33076
Mervyn M. Gervis(3) 1,000,000 1.69%
5938 Catesby Street
Boca Raton, FL 33433
Michael W. McCauley 650,000 direct 1.10%
4149 Alpina Court North 1,000,000 indirect(4) 1.69%
Boynton Deach, FL 33436
Directors/Officers 34,650,000 direct 58.53%
As a group (3 persons) 2,000,000 indirect 3.37%
(1)Mr. Hiler is an officer and director of the registrant.
(3)Represents common shares held by OTC Business Solutions (a sole
proprietorship) that is controlled by Michael C. Hiler, an officer and
director of the registrant.
(3)Mr. Gervis is an officer and director of the registrant.
(4)Represents common shares which may be issued pursuant to stock
options.
Based upon 59,200,000 outstanding common shares as of April 15, 2011.
Item 13. Certain Relationships and Related Transactions, and Director
Independence
Director Independence
---------------------
Michael C. Hiler and Mervyn M. Gervis are not independent as such term
is defined by a national securities exchange or an inter-dealer
quotation system. During the years ended December 31, 2010 and 2009
there were no transactions with related persons other than as described
in the section below.
On February 23, 2010, Dennis Carrasquillo, an officer and director
resigned for personal reasons and sold 33,000,000 common shares to
Michael C. Hiler, an officer and director of PMX Communities for $.001
per common share.
Agreement with OTC Business Solutions
-------------------------------------
On February 1, 2009, the registrant entered into a consulting agreement
with OTC Business Solutions, then an unaffiliated company. As of
February 23, 2010, Michael C. Hiler, its owner, became an officer and
director of PMX Communities. The consultant provided management
54
consulting services. The consultant was issued 5,000,000 common shares
for services previously rendered to the registrant. Additionally, the
consultant received $60,000.
On February 23, 2010, OTC Business Solutions sold 4,000,000 common
shares to two non-affiliates for consideration of $.25 per common
share.
Agreement with Invisosoft
-------------------------
Invisosoft is a software developer of a proprietary and copyrighted
audio video software product known as Invisosoft Live Communicator
Suite that enables VOIP/Audiovisual conferencing. On June 23, 2009,
the registrant acquired an initial 100 Activation Seats of the
Invisosoft Live Communicator Suite Software. The seats were acquired
for $50 per seat. The term of the agreement is for five years. In 2010
the registrant changed business direction and determined that the
licenses were impaired and amortized the remaining balance at December
31, 2010. Dennis Carrasquillo, a former officer and director of the
registrant has been vice president of Invisosoft, Inc. since 2005 (Note
12).
Management is of the opinion that the material terms of the agreement
with Invisosoft are favorable compared to the material terms of a
similar agreement had registrant entered into it with an unrelated
third-party.
From inception through August 10, 2009, our administrative functions
were operated from the home of our former president. We did not pay
our president for use of such space.
During the year ended December 31, 2009, the registrant entered into
promissory notes with six investors who are also shareholders of the
registrant for the principal sum of one hundred and twenty five
thousand dollars ($125,000) (Note 8).
During the year ended December 31, 2010, the registrant entered into
promissory notes with five investors who are also shareholders of the
registrant for the principal sum of thirteen thousand dollars
($165,000).
On February 23, 2010, we entered into an agreement pursuant to which we
issued stock options to purchase 1,000,000 common shares to Mr.
McCauley, a director at $.25 per common share.
Item 14. Principal Accountant Fees and Services.
Lake and Associates CPA's, LLC served as our independent registered
public accounting firm for 2010 and 2009. The following table shows
the fees that were billed for the audit and other services provided by
such firm for 2010 and 2009.
55
2010 2009
---- ----
Audit Fees $15,025 $12,600
Audit-Related Fees 0 0
Tax Fees 0 0
All Other Fees 0 0
------- -------
Total $15,025 $12,600
Tax Fees. We did not incur any aggregate tax fees and expenses from
Lake and Associates CPA's, LLC for the years ended December 31, 2010
and 2009, respectively, for professional services rendered for tax
compliance, tax advice, and tax planning.
All Other Fees. We did not incur any other fees from Lake and
Associates CPA's LLC during 2010 and 2009.
The board of directors, acting as the audit committee considered
whether, and determined that, the auditor's provision of non-audit
services was compatible with maintaining the auditor's independence.
All of the services described above for the years ended December 31,
2010 and 2009 were approved by the board of directors pursuant to its
policies and procedures.
56
PART IV
Item 15. Exhibits, Financial Statement Schedules
(a)(1) List of Financial statements included in Part II hereof
Balance Sheets, December 31, 2010 and 2009
Statements of Operations for the years ended December 31, 2010 and 2009
Statements of Stockholders' Equity (Deficit) for the years ended
December 31, 2010 and 2009
Statements of Cash Flows for the years ended December 31, 2010 and 2009
Notes to the Financial Statements
(a)(2) List of Financial Statement schedules included in Part IV
hereof: None.
(a)(3) Exhibits
The following of exhibits are filed with this report:
(31) 302 certification
(32) 906 certification
57
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the registrant has duly caused this
Report to be signed on its behalf by the undersigned duly authorized
person.
Date: April 15, 2011
PMX Communities, Inc.
/s/ Michael C. Hiler
----------------------
Michael C. Hiler, President
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated.
/s/Michael C. Hiler CEO/CFO April 15, 2011
------------------- Controller/Director
Michael C. Hiler
/s/Mervyn Gervis Director April 15, 2011
--------------------
Mervyn Gervis
/s/Michael W. McCauley Director April 15, 2011
--------------------
Michael W. McCauley
