Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended May 31, 2011
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission file number 333-173814
ACCEND MEDIA
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Nevada 27-4479356
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8275 S. Eastern Avenue, Suite 200-306
Las Vegas, NV 89123
---------------------------------------------------------------
(Address of principal executive offices)(Zip Code)
Issuer's telephone number, including area code: (702) 332-9888
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 is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of
the Exchange Act (Check one).
Large accelerated filer |_| Accelerated filer |_|
Non-accelerated filer |_| Smaller Reporting Company |X|
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act). Yes |X| No |_|
As of August 11, 2011, the registrant's outstanding common stock consisted
of 30,000,000 shares, $0.001 par value. Authorized - 75,000,000 shares.
1
Table of Contents
Accend Media
Index to Form 10-Q
For the Quarterly Period Ended May 31, 2011
Part I. Financial Information
Page
Item 1. Financial Statements
Balance Sheets 3
Statements of Operations 4
Statements of Cash Flows 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 10
Item 3. Quantitative and Qualitative Disclosures About Market Risk 16
Item 4T. Controls and Procedures 16
Part II Other Information
Item 1. Legal Proceedings 20
Item 1A. Risk Factors 20
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 20
Item 3 -- Defaults Upon Senior Securities 20
Item 4 -- Submission of Matters to a Vote of Security Holders 20
Item 5 -- Other Information 20
Item 6. Exhibits 21
Signatures 22
2
Part I. Financial Information
Item 1. Financial Statements
Accend Media
(A Development Stage Company)
Balance Sheets
May 31, February 28,
2011 2011
------------- -------------
(Unaudited) (Audited)
Assets
Current assets:
Cash $ 18,126 $ 45,851
Accounts receivable 2,548 -
Other Receivable 300 -
------------- -------------
Total current assets 20,974 45,851
------------- -------------
Total assets 20,974 $ 45,851
============= =============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ - $ 122
Payroll taxes 6,153 -
------------- -------------
Total current liabilities 6,153 122
------------- -------------
Total liabilities 6,153 122
------------- -------------
Stockholders' equity:
Common stock, $0.001 par value,
75,000,000 shares authorized,
30,000,000, 30,000,000 issued and
outstanding as of 5/31/11 and
2/28/11, respectively 30,000 30,000
Additional paid-in capital 20,075 20,075
Deficit accumulated during
development stage (35,254) (4,346)
------------- -------------
Total stockholders' equity 14,821 45,729
------------- -------------
Total liabilities and
stockholders' equity $ 20,974 $ 45,851
============= =============
The accompanying notes are an integral part of these financial statements.
3
Accend Media
(A Development Stage Company)
Statements of Operations
(Unaudited)
For the three From Inception
months ending (December 20, 2010)
May 31, to May 31,
2011 2011
---------------- ----------------
Revenue $ 2,816 $ 2,816
---------------- ----------------
Expenses:
General & administrative 33,723 38,069
---------------- ----------------
Total expenses 33,723 38,069
---------------- ----------------
Net loss $ (30,907) $ (35,253)
================ ================
Weighted average number of
common shares outstanding
Basic 30,000,000
================
Net loss per share $ (0.00)
================
The accompanying notes are an integral part of these financial statements.
4
Accend Media
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
For the three From Inception
months ending (December 20, 2010)
May 31, to May 31,
2011 2011
---------------- ----------------
Operating activities:
Net loss $ (30,907) $ (35,253)
Changes in current assets and liabilities
Increase in accounts payable (122) -
(Increase) in accounts receivable (2,548) (2,548)
Increase in payroll taxes 6,153 6,153
Increase in other receivable (300) (300)
---------------- ----------------
Net cash used by operating activities (27,725) (31,949)
---------------- ----------------
Financing activities:
Proceeds from issuance of common stock - 50,000
Contribution to capital - 75
---------------- ----------------
Net cash provided by financing activities - 50,075
---------------- ----------------
Net increase (decrease) in cash (27,725) 18,126
Cash - beginning of the year 45,851 -
---------------- ----------------
Cash - end of the year $ 18,126 $ 18,126
================ ================
Supplemental disclosures:
Income taxes paid $ - $ -
The accompanying notes are an integral part of these financial statements.
5
Accend Media
(A Development Stage Company)
Notes to Financial Statements
May 31, 2011
(Unaudited)
NOTE 1. General Organization and Business
The Company was organized on December 20, 2010 (Date of Inception) under
the laws of the State of Nevada, as Accend Media. The Company is a
Development Stage Company as defined by Guide 7 of the Securities Exchange
Commission's Industry Guide and FASB ASC 915 "Development Stage Entities".
NOTE 2. Summary of Significant Accounting Policies
Basis of Accounting
-------------------
The financial statements and accompanying notes are prepared under full
accrual of accounting in accordance with generally accepted accounting
principles of the United States of America ("US GAAP"). In the opinion
of management, all adjustments, consisting of normal recurring accruals
considered necessary for a fair presentation, have been included.
Cash and Cash Equivalents
-------------------------
For purposes of the statement of cash flows, the Company considers highly
liquid financial instruments purchased with a maturity of three months or
less to be cash equivalents.
Earnings per Share
------------------
The basic earnings (loss) per share is calculated by dividing the Company's
net income (loss) available to common shareholders by the weighted average
number of common shares issued and outstanding during the year. The
diluted earnings (loss) per share is calculated by dividing the Company's
net income (loss) available to common shareholders by the diluted weighted
average number of shares outstanding during the year. The diluted weighted
average number of shares outstanding is the basic weighted number of shares
adjusted as of the first year for any potentially dilutive debt or equity.
The Company has not issued any options or warrants or similar securities
since inception.
Revenue recognition
-------------------
The Company will recognize revenue when all of the following conditions are
satisfied: (1) there is persuasive evidence of an arrangement; (2) the
service has been provided to the customer; (3) the amount of fees to be paid
by the customer is fixed or determinable; and (4) the collection of our fees
is probable.
Dividends
---------
The Company has not yet adopted any policy regarding payment of dividends.
No dividends have been paid during the period shown.
6
Accend Media
(A Development Stage Company)
Notes to Financial Statements
May 31, 2011
(Unaudited)
Income Taxes
------------
The provision for income taxes is the total of the current taxes payable and
the net of the change in the deferred income taxes. Provision is made for
the deferred income taxes where differences exist between the period in which
transactions affect current taxable income and the period in which they enter
into the determination of net income in the financial statements.
Year-end
--------
The Company has selected February 28 as its year-end.
Advertising
-----------
Advertising is expensed when incurred. A total of $2,000 in advertising
costs were incurred during the current period May 31, 2011.
Use of Estimates
----------------
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts
of revenue and expenses during the reporting period. Actual results could
differ from those estimates.
NOTE 3 - Going concern
The Company's financial statements are prepared using the generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. The Company has not commenced its planned principal
operations and it has not generated any revenues. In order to obtain the
necessary capital, the Company is seeking equity and/or debt financing.
There are no assurances that the Company will be successful, without
sufficient financing it would be unlikely for the Company to continue as
a going concern. The accompanying financial statements do not include any
adjustments relating to the recoverability and classification of recorded
asset amounts or amounts and classification of liabilities that might
result from the outcome of this uncertainty.
7
Accend Media
(A Development Stage Company)
Notes to Financial Statements
May 31, 2011
(Unaudited)
NOTE 4 - Stockholders' Equity and Contributed Capital
The Company is authorized to issue 75,000,000 shares of its $0.001 par value
common stock.
On December 20, 2010, the Company issued 20,000,000 shares of its Common
Stock to a founder for cash of $20,000.
On December 20, 2010, a director of the Company contributed capital of $75
for incorporating fees.
On February 28, 2011, the Company issued 4,000,000 shares of its Common
Stock to a founder for cash of $12,000.
On February 28, 2011, the Company issued 6,000,000 shares of its Common
Stock to shareholders for cash of $18,000 pursuant to a Regulation S
offering.
As of May 31, 2011, there have been no other issuances of common stock or
there have been no stock options or warrants granted.
NOTE 5. Related Party Transactions
The Company does not lease or rent any property. Office services are
provided without charge by a director. Such costs are immaterial to the
financial statements and, accordingly, have not been reflected therein.
The officers and directors of the Company are involved in other business
activities and may, in the future, become involved in other business
opportunities. If a specific business opportunity becomes available, such
persons may face a conflict in selecting between the Company and their
other business interests. The Company has not formulated a policy for the
resolution of such conflicts.
On December 20, 2010, the Company issued 20,000,000 shares of its Common
Stock to a founder for cash of $20,000.
On December 20, 2010, a director of the Company contributed capital of $75
for incorporating fees.
On February 28, 2011, the Company issued 4,000,000 shares of its Common
Stock to a founder for cash of $12,000.
8
Accend Media
(A Development Stage Company)
Notes to Financial Statements
May 31, 2011
(Unaudited)
NOTE 6. Operating Leases and Other Commitments
The Company has no lease or other obligations.
NOTE 7. Recent Accounting Pronouncements
The Company's management has evaluated all the recently issued accounting
pronouncements through the filing date of these financial statements and does
not believe that any of these pronouncements will have a material impact on
the Company's financial position and results of operations.
NOTE 8. Legal Proceedings
The Company is not currently involved in any legal proceedings at this
time.
9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Item 2. - Management's Discussion and Analysis of Financial Condition and
Results of Operations
Forward-Looking Information
This Quarterly Report on Form 10-Q contains forward-looking statements.
When used in this Quarterly Report on Form 10-Q, the words "anticipate,"
"believe," "estimate," "will," "plan," "seeks," "intend," and "expect" and
similar expressions identify forward-looking statements. Although we believe
that our plans, intentions, and expectations reflected in any forward-looking
statements are reasonable, these plans, intentions, or expectations may not
be achieved. Our actual results, performance, or achievements could differ
materially from those contemplated, expressed, or implied, by the forward-
looking statements contained in this Quarterly Report on Form 10-Q.
Important factors that could cause actual results to differ materially from
our forward-looking statements are set forth in this Quarterly Report on
Form 10-Q. All forward-looking statements attributable to us or persons
acting on our behalf are expressly qualified in their entirety by the
cautionary statements set forth in this Quarterly Report on Form 10-Q.
Except as required by federal securities laws, we are under no obligation
to update any forward-looking statement, whether as a result of new
information, future events, or otherwise.
Critical Accounting Policies
----------------------------
There have been no material changes to our critical accounting policies and
estimates from the information provided in Item 7, "Management's Discussion
and Analysis of Financial Condition and Results of Operations", included in
our Annual report for the fiscal year ended February 28, 2011.
10
Results of Operations
---------------------
Overview of Current Operations
------------------------------
Accend Media ("the Company") was incorporated in the State of Nevada on
December 20, 2010, under the name Accend Media.
Description of Business
-----------------------
Accend Media provides internet marketing services for its clients, who seek
increased sales and customer contact through online marketing channels. The
Company's clients will include branded advertisers, direct marketers, lead
aggregators, and agencies.
Our services include:
-Creating of advertising campaigns used to market products and/or services
online.
-Designing and hosting of customized web pages for our customers.
-Development of software applications that provide increased efficiency,
compliance and/or better monetization of online marketing campaigns. An
example of our compliance application is the UnsubToday.com service for
email suppression list management.
Accend Media is powered by its own proprietary Lead Generation Software
Platform. This technology platform allows the Company to process and sell
real-time leads to clients across multiple verticals. The platform employs a
rules-based decision engine designed to maximize the value of every lead that
it processes. The platform conducts comprehensive detailed analysis of every
lead entering the system as well as the pool of clients eligible to purchase
the lead. The system also monitors consumer and publisher activity which
allows us to analyze the effectiveness of different marketing campaigns,
advertisements and specific promotions. This software tool helps us separate
performing campaigns from non-performing campaigns, which allows us to
maximize our internal profit margin while best serving our clients needs.
Marketing Strategy
------------------
Accend Media plans to own and operate a variety of Internet websites. The
Company plans to generate traffic to its websites both internally and from
third party internet advertising. The Company's Web properties and marketing
activities are designed to generate real-time response based marketing
results for our clients.
11
While visiting one of our Accend Media's websites, consumers will be given
the opportunity to sign up, purchase and/or ask to be contacted about various
product and service offerings. These web websites generate a variety of
transactional results ranging from: (a) Web traffic; (b) inbound
telemarketing calls; (c) outbound telemarketing leads; (d) marketable
profiled data lists of consumers; (e) targeted response leads; and (f)
completed applications for products and services.
Accend Media plans to utilize a number of online marketing channels to build
our databases. These include but are not limited to:
Email Marketing
---------------
The Company's websites will be promoted through CANSPAM compliant opt-in
email marketing newsletters. Advertising dollars for email marketing are
typically spent on a Cost-Per-Acquisition basis, but Accend Media also
employs on a Cost-Per-Click or Cost-Per-Million basis.
Search Engine Marketing
-----------------------
Accend Media plans to utilize search engine marketing to direct consumers to
its websites. Funds generated from the program will be placed in an open
account with each provider and are spent on a Cost-Per-Click auction basis.
Google, Yahoo, and Bing are the primary 3 search engines providers used.
Display Advertising
-------------------
Accend Media plans to purchase an advertising inventory by placing a banner,
button, or text link on websites owned by third party companies. When
consumers click on our banner, button, or text link, they are referred to our
website. Using an ad server and our internal platform, we gauge
effectiveness and return on investment of each advertising campaign.
Affiliate Marketing
-------------------
Accend Media plans to engage publishers to run its offers and promotions on a
Cost Per Action basis. Publishers are provided with real-time commission
tracking.
Sales Strategy
--------------
Accend Media plans to sell its products and services to a network of
participating lead buyers and advertisers in various categories. Some of
these categories include - but are not limited to - the financial, insurance,
travel, automotive, and deal of the day coupon industries.
Accend Media delivers internet marketing leads to business buyers in a lead
auction format. This format allows clients to bid on qualified leads as they
are created. Management believes this is the best way to derive the highest
revenue per lead in the marketplace.
12
Software Development
--------------------
Our sole officer is responsible for all Accend Media's software development,
management, and upgrades. He creates all new client accounts and implements
lead delivery options based on customer needs. He is responsible for
continually upgrading the Lead Generation Software Platform to accommodate
new feature sets and increased scalability.
Competition
-----------
The internet lead generation and product sales marketplace is highly
competitive. Management believes that Accend Media's proprietary Lead
Generation Software Platform provides the company with a competitive
advantage within the marketplace because of its concurrent ability to exploit
the most effective marketing campaigns while selling leads at their highest
value. A number of competitors are active in specific aspects of our
business. In the area of business sales lead products, Accend Media faces
competition primarily from companies such as Experian, Equifax, Acxiom,
Quinstreet, Atrinsic, and ValueClick. These major competitors offer online
leads directly to the end customer and sell their online leads through
reseller networks. In the area of email compliance software, Accend Media
faces competition from Digital River, Unsub Central, and Optizmo.
Government Regulation
---------------------
We are subject to federal, state and local laws and regulations affecting our
business. Although the Company plans on obtaining all required federal and
state permits, licenses, and bonds to operate its facilities, there can be no
assurance that the Company's operation and profitability will not be subject
to more restrictive regulation or increased taxation by federal, state, or
local agencies. New laws and regulations may restrict specific Internet
activities, and existing laws and regulations may be applied to Internet
activities, either of which could increase our costs of doing business over
the Internet and adversely affect the demand for our advertising services.
In the United States, federal and state laws already apply or may be applied
in the future to areas, including children's privacy, copyrights, taxation,
user privacy, search engines, Internet tracking technologies, direct
marketing, data security, pricing, sweepstakes, promotions, intellectual
property ownership and infringement, trade secrets, export of encryption
technology, acceptable content and quality of goods and services.
13
Results of Operations for the quarter ended May 31, 2011
--------------------------------------------------------
Revenues
--------
During the three month period ended May 31, 2011, the Company generated
$2,816 in revenues. For the three months ending May 31, 2011, the Company
experienced general and administrative expenses of $33,723. These expenses
represented start-up costs as the Company begins its business operations.
For the three months ended May 31, 2011, the Company had $(30,907) in loss
from operations. Since the Company's inception, on December 20, 2010, the
Company had a net loss of $(35,253).
Going Concern
-------------
The financial statements included with this quarterly report have
been prepared in accordance with generally accepted accounting principles
applicable to a going concern which contemplates the realization of assets
business. As of May 31, 2011, the Company has recognized $2,816 in
revenues and has accumulated operating losses of approximately $35,253 since
inception. The Company's ability to continue as a going concern is
contingent upon the successful completion of additional financing
arrangements and its ability to achieve and maintain profitable operations.
Management plans to raise equity capital to finance the operating and
capital requirements of the Company. Amounts raised will be used to further
development of the Company's products, to provide financing for marketing
and promotion, to secure additional property and equipment, and for other
working capital purposes. While the Company is putting forth its best
efforts to achieve the above plans, there is no assurance that any such
activity will generate funds that will be available for operations.
These conditions raise substantial doubt about the Company's ability to
continue as a going concern. Our financial statements do not include any
adjustments that might arise from this uncertainty.
Plan of Operation
-----------------
Management does not believe that the Company will be able to generate
any significant profit during the coming year. Management believes
that general and administrative costs as well as building its infrastructure
will most likely exceed any anticipated revenues for the coming year.
The Company's need for capital may change dramatically if it can
generate additional revenues from its operations. In the event the Company
requires additional funds, the Company will have to seek loans or equity
placements to cover such cash needs. There are no assurances additional
capital will be available to the Company on acceptable terms.
14
Summary of any product research and development that we will perform for the
term of our plan of operation.
----------------------------------------------------------------------------
We do not anticipate performing any additional significant product research
and development under our current plan of operation.
Expected purchase or sale of plant and significant equipment
------------------------------------------------------------
We do not anticipate the purchase or sale of any plant or significant
equipment; as such items are not required by us at this time.
Significant changes in the number of employees
----------------------------------------------
As of May 31, 2011, we did not have any employees. We are dependent upon
our sole officer and director for our future business development. As our
operations expand we anticipate the need to hire additional employees,
consultants and professionals; however, the exact number is not quantifiable
at this time.
Liquidity and Capital Resources
-------------------------------
As of May 31, 2011, our current assets were $20,974 and our current
liabilities were $6,153. Without realization of additional capital, it
would be unlikely for the Company to continue as a going concern. In order
for the Company to remain a Going Concern it will need to find additional
capital or generate sufficient revenues to cover its costs. Additional
working capital may be sought through additional debt or equity private
placements, additional notes payable to banks or related parties (officers,
directors or stockholders), or from other available funding sources at market
rates of interest, or a combination of these. The ability to raise necessary
financing will depend on many factors, including the nature and prospects of
any business to be acquired and the economic and market conditions
prevailing at the time financing is sought. No assurances can be given
that any necessary financing can be obtained on terms favorable to the
Company, or at all.
We have not generated positive cash flows from operating activities. For
the three months ended May 31, 2011, net cash flow used in operating
activities was $(27,725).
Our Chief Executive Officer has agreed to donate funds to the operations of
the Company, in order to keep it fully reporting for the next twelve (12)
months, without seeking reimbursement for funds donated.
The Company has no employment agreements in place with its officers, nor does
the Company owe its officers any accrued compensation.
15
Off-Balance Sheet Arrangements
------------------------------
We do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes
in financial condition, revenues or expenses, results or operations,
liquidity, capital expenditures or capital resources that is material to
investors.
Critical Accounting Policies and Estimates
------------------------------------------
Revenue Recognition: We recognize revenue from product sales once all of the
following criteria for revenue recognition have been met: pervasive evidence
that an agreement exists; the services have been rendered; the fee is fixed
and determinable and not subject to refund or adjustment; and collection of
the amount due is reasonably assured.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
Not applicable.
Item 4T. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
------------------------------------------------
Our disclosure controls and procedures, as defined in Rule 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), are designed to ensure that information required to be
disclosed in reports filed or submitted under the Exchange Act is recorded,
processed, summarized, and reported within the time periods specified in
rules and forms adopted by the SEC, and that such information is accumulated
and communicated to management, including the Chief Executive Officer and
the Chief Financial Officer, to allow timely decisions regarding required
disclosures.
Management, with the participation of the Chief Executive Officer and the
Chief Financial Officer, who is also the sole member of our Board of
Directors, has evaluated the effectiveness of our disclosure controls and
procedures as of the end of the period covered by this report. Based
on such evaluation, the Chief Executive Officer and the Chief Financial
Officer concluded that, our disclosure controls and procedures were not
effective. Our disclosure controls and procedures were not effective because
of the "material weaknesses" described below under "Management's report on
internal control over financial reporting," which are in the process of being
remediated as described below under "Management Plan to Remediate Material
Weaknesses."
16
Management's Report on Internal Control over Financial Reporting
----------------------------------------------------------------
Our management is responsible for establishing and maintaining adequate
internal control over financial reporting. Internal control over financial
reporting, as defined in rules promulgated under the Exchange Act, is a
process designed by, or under the supervision of, our Chief Executive Officer
and Chief Financial Officer and affected by our Board of Directors,
management and other personnel to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with GAAP. Internal control
over financial reporting includes those policies and procedures that:
o pertain to the maintenance of records that in reasonable detail accurately
and fairly reflect the transactions and dispositions of our assets;
o provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with GAAP, and that
our receipts and expenditures are being made only in accordance with
authorizations of our management and our Board of Directors; and
o provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of our assets that could have
a material effect on our financial statements
Because of its inherent limitations, a system of internal control over
financial reporting can provide only reasonable, not absolute, assurance
that the objectives of the control system are met and may not prevent or
detect misstatements. Internal control over financial reporting is a process
that involves human diligence and compliance and is subject to lapses in
judgment and breakdowns resulting from human failures. Internal control
over financial reporting also can be circumvented by collusion or improper
override. Because of such limitations, there is a risk that material
misstatements may not be prevented or detected on a timely basis by internal
control over financial reporting. However, these inherent limitations are
known features of the financial reporting process, and it is possible to
design into the process safeguards to reduce, though not eliminate, this
risk. Further, over time control may become inadequate because of changes in
conditions or the degree of compliance with the policies or procedures may
deteriorate.
Our management assessed the effectiveness of our internal control over
financial reporting as of February 28, 2011. In making its assessment,
management used the criteria established in Internal Control-Integrated
Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission ("COSO"). Based on its assessment, management has
concluded that we had certain control deficiencies described below that
constituted material weaknesses in our internal controls over financial
reporting. As a result, our internal control over financial reporting was
not effective as of February 28, 2011.
17
A "material weakness" is defined under SEC rules as a deficiency, or a
combination of deficiencies, in internal control over financial reporting
such that there is a reasonable possibility that a material misstatement of
a company's annual or interim financial statements will not be prevented or
detected on a timely basis by the company's internal controls. As a result
of management's review of the investigation issues and results, and other
internal reviews and evaluations that were completed after the end of
quarter related to the preparation of management's report on internal
controls over financial reporting required for this quarterly report on
Form 10-Q, management concluded that we had material weaknesses in our
control environment and financial reporting process consisting of the
following:
1) lack of a functioning audit committee due to a lack of a majority of
independent members and a lack of a majority of outside directors on our
board of directors, resulting in ineffective oversight in the establishment
and monitoring of required internal controls and procedures;
We do not believe the material weaknesses described above caused any
meaningful or significant misreporting of our financial condition and results
of operations for the fiscal year ended February 28, 2011. However, management
believes that the lack of a functioning audit committee and the lack of a
majority of outside directors on our board of directors results in
ineffective oversight in the establishment and monitoring of required
internal controls and procedures, which could result in a material
misstatement in our financial statements in future periods.
Management Plan to Remediate Material Weaknesses
------------------------------------------------
Management is pursuing the implementation of corrective measures to address
the material weaknesses described below. In an effort to remediate the
identified material weaknesses and other deficiencies and enhance our
internal controls, we have initiated, or plan to initiate, the following
series of measures:
We will create a position to segregate duties consistent with control
objectives and will increase our personnel resources and technical accounting
expertise within the accounting function when funds are available to us.
We plan to appoint one or more outside directors to our board of directors who
shall be appointed to an audit committee resulting in a fully functioning audit
committee who will undertake the oversight in the establishment and monitoring
of required internal controls and procedures such as reviewing and approving
estimates and assumptions made by management when funds are available to us.
18
We believe the remediation measures described above will remediate the
material weaknesses we have identified and strengthen our internal control
over financial reporting. We are committed to continuing to improve our
internal control processes and will continue to diligently and vigorously
review our financial reporting controls and procedures. As we continue to
evaluate and work to improve our internal control over financial reporting,
we may determine to take additional measures to address control deficiencies
or determine to modify, or in appropriate circumstances not to complete,
certain of the remediation measures described above.
Changes in Internal Control over Financial Reporting
----------------------------------------------------
There were no changes in our internal control over financial reporting (as
such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act)
during the most recent fiscal quarter that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.
This quarterly report does not include an attestation report of the
Corporation's registered public accounting firm regarding internal control
over financial reporting. Management's report was not subject to attestation
by the Corporation's registered public accounting firm pursuant to temporary
rules of the SEC that permit the Corporation to provide only the management's
report in this quarterly report.
(c) Changes in internal controls over financial reporting
----------------------------------------------------------
There was no change in our internal controls over financial reporting that
occurred during the period covered by this report, that has materially
affected, or is reasonably likely to materially affect, our internal controls
over financial reporting.
19
PART II. OTHER INFORMATION
Item 1 -- Legal Proceedings
From time to time, we may become involved in various lawsuits and legal
proceedings, which arise in the ordinary course of business. However,
litigation is subject to inherent uncertainties, and an adverse result in
these or other matters may arise from time to time that may harm our
business.
We are not presently a party to any material litigation, nor to the knowledge
of management is any litigation threatened against us, which may materially
affect us.
Item 1A - Risk Factors
See Risk Factors set forth in Part I, Item 1A of the Company's Registration
Statement on S-1 for the fiscal year ended February 28, 2011 and the
discussion in Item 1, above, under "Liquidity and Capital Resources."
Item 2 -- Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3 -- Defaults Upon Senior Securities
None.
Item 4 -- Submission of Matters to a Vote of Security Holders
None.
Item 5 -- Other Information
The Company filed its initial Registration Statement on Form S-1 with the
U.S. Securities and Exchange Commission on April 29, 2011. The Registration
Statement was declared effective on June 14, 2011.
20
Item 6 -- Exhibits
Exhibits.
Incorporated by reference
-------------------------
Filed Period Filing
Exhibit Exhibit Description herewith Form ending Exhibit date
------------------------------------------------------------------------------
31.1 Certification of President X
and Principal Financial
Officer, pursuant to Section
302 of the Sarbanes-Oxley
Act
------------------------------------------------------------------------------
31.2 Certification of President X
and Principal Financial
Officer, pursuant to Section
906 of the Sarbanes-Oxley
Act
------------------------------------------------------------------------------
21
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Accend Media
------------------------
Registrant
By: /s/ Scott Gerardi
--------------------------------
Name: Scott Gerardi
Title: Director and CEO
Principal Executive, and
Accounting Officer
Dated: August 11, 2011
---------------
22
