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EXCEL - IDEA: XBRL DOCUMENT - ONLINE DISRUPTIVE TECHNOLOGIES, INC.Financial_Report.xls
EX-32.1 - SECTION 906 CERTIFICATION - ONLINE DISRUPTIVE TECHNOLOGIES, INC.exhibit32-1.htm
EX-31.1 - SECTION 302 CERTIFICATION - ONLINE DISRUPTIVE TECHNOLOGIES, INC.exhibit31-1.htm

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 September 30, 2011

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE EXCHANGE ACT

For the transition period from _________to ________

Commission File No. 000-54394

Online Disruptive Technologies, Inc.
(Exact name of registrant as specified in its charter)

Nevada 27-1404923
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)

3120 S. Durango Drive, Suite 305, Las Vegas, Nevada 89117
(Address of principal executive offices) (zip code)

702-579-7900
(Registrant’s telephone number, including area code)

N/A
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes[ x ] No[ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes[ 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 definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” 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)  


2

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes[ x ] No[ ]

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities and Exchange Act of 1933 subsequent to the distribution of securities under a plan confirmed by a court. Yes[ ] No[ ] N/A

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer’s classes of common equity as of the latest practicable date: As of November 10, 2011, there were 24,000,100 shares of common stock, par value $0.001, outstanding.


3

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


4

ONLINE DISTRUPTIVE TECHNOLOGIES, INC.

(A Development Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2011



Online Disruptive Technologies, Inc.
(A Development Stage Company)
Consolidated Balance Sheets

    September 30,     December 31,  
    2011     2010  
  $    $   
ASSETS            
             
Current Assets            
Cash and Cash Equivalents   14,902     13,658  
Prepaid Expenses   15,000     -  
Total Current Assets   29,902     13,658  
             
Website Development Costs, net of accumulated amortization (Note 4)   7,729     8,325  
Total Assets   37,631     21,983  
             
LIABILITIES            
             
Current Liabilities            
Accounts Payable and Accrued Liabilities   3,184     19,948  
Loans Payable - Related Parties (Note 5)   74,462     56,862  
Total Current Liabilities   77,646     76,810  
             
SHAREHOLDERS' DEFICIENCY            
     Authorized:
            20,000,000 Preferred Shares, par value $0.001
            500,000,000 Common Shares, par value $0.001
 

   

 
     Issued and outstanding:
            Nil Preferred Shares 
            24,000,100 Common Shares (December 31, 2010 –
            18,000,100)
 


8,400
   


2,400
 
Additional Paid-in Capital   69,076     10,008  
(Deficit) Accumulated During the Development Stage   (117,491 )   (67,235 )
Total Shareholders’ Deficiency   (40,015 )   (54,827 )
Total Liabilities and Shareholders' Deficiency   37,631     21,983  

The accompanying notes are an integral part of these consolidated financial statements.

F-1



Online Disruptive Technologies, Inc.
(A Development Stage Company)
Consolidated Statements of Operations and Comprehensive Loss

                            For the  
                            period from  
                            November  
    Three     Three     Nine     Nine     16, 2009  
    months     months     months     months     (inception)  
    ended     ended     ended     ended     to  
    September     September     September     September     September  
    30, 2011     30, 2010     30, 2011     30, 2010     30, 2011  
$    $    $     $    $   
General and Administrative Expenses                              
Accounting Fees   1,500     -     4,500     -     5,000  
Audit & Tax Fees   2,531     25,322     12,681     25,322     42,003  
Bank Fees   69     84     (52 )   142     542  
Consulting Fees   -     1,500     5,000     3,000     6,500  
Filing and Transfer Agent Fees   -     4,222     7,528     4,222     13,619  
License and Permit Fees   119     613     119     732     1,176  
Legal Fees   5,413     11,772     14,156     15,423     39,298  
Web Domain Expense   -     -     10     -     30  
    9,632     43,513     43,941     48,841     108,168  
                               
(Loss) Before Other Expense Other Expense   (9,632 )   (43,513 )   (43,941 )   (48,841 )   (108,168 )
Amortization Expense   747     -     1,246     -     1,246  
Interest Expense   1798     391     5,068     391     8,077  
Total Other Expense   2,545     391     6,314     391     9,323  
                               
Net Loss and Comprehensive Loss for the Period   (12,177 )   (43,904 )   (50,256 )   (49,232 )   (117,491 )
                               
Basic and Diluted Net Loss per Common Share   (0.00 )   (0.00 )   (0.00 )   (0.00 )    
                               
Weighted Average Number of
Common Shares Outstanding –
Basic and Diluted
  24,000,100     18,000,100     22,791,309     17,399,337      

The accompanying notes are an integral part of these consolidated financial statements.

F-2



Online Disruptive Technologies, Inc.
(A Development Stage Company)
Consolidated Statements of Stockholders’ Deficiency
For the period from November 16, 2009 to September 30, 2011

                                  (Deficit)        
                                  Accumulated        
                            Additional     During the        
            Preferred Stock         Common Stock     Paid In     Development        
                                Shares     Amount     Shares     Amount     Capital     Stage     Total  
      $          $     $   $    $   
Shares issued for cash at $0.0001 per share
on November 16, 2009
  -     -     1,000     -     -     -     -  
Shares issued for cash at $0.000025 per
share on December 5, 2009
  -     -     15,999,000     400     -     -     400  
Net loss for the period   -     -     -     -     -     (1,179 )   (1,179 )
Balance as of December 31, 2009   -     -     16,000,000       400     -     (1,179 )   (779 )
Recapitalization - ODT   -         2,000,100      2,000     6,999     -     8,999  
Imputed interest from shareholders   -     -     -     -     3,009     -     3,009  
Net loss for the year   -     -     -     -     -     (66,056 )   (66,056 )
Balance as of December 31, 2010   -         18,000,100      2,400     10,008     (67,235 )   (54,827 )
Shares issued for cash at $0.01 per share
on February 24, 2011
  -     -     6,000,000     6,000     54,000     -     60,000  
Imputed interest from shareholders   -     -     -     -     5,068     -     5,068  
Net loss for the period   -     -     -     -     -     (50,256 )   (50,256 )
Balance as of September 30, 2011   -     -     24,000,100       8,400     69,076     (117,491 )   (40,015 )

The accompanying notes are an integral part of these consolidated financial statements.

F-3



Online Disruptive Technologies, Inc.
(A Development Stage Company)
Consolidated Statements of Cash Flows

                For the period  
                from  
                November 16,  
    Nine months     Nine months     2009  
    ended     ended     (inception) to  
    September 30,     September 30,     September 30,  
    2011     2010     2011  
Cash flow from Operating Activities $    $    $   
Net income (loss) for the period   (50,256 )   (66,056 )   (117,491 )
Adjustment for items not involving cash:                  
Imputed interest   5,068     3,009     8,077  
Amortization   1,246     -     1,246  
Changes in non-cash working capital items:                  
Increase in prepaid expenses   (15,000 )   -     (15,000 )
Increase in accounts payable and accrued liabilities   (16,764 )   8,700     (7,277 )
Net Cash (Used in) Operating Activities   (75,706 )   (54,347 )   (130,445 )
Cash flow from Financing Activities                  
Common shares issued, net of issuance costs   60,000     -     60,400  
Increase in loan payable – related parties   17,600     56,862     74,462  
Net Cash Provided by Financing Activities   77,600     56,862     134,862  
Cash flow from Investing Activities                  
Cash acquired on acquisition of subsidiary   -     14,910     14,910  
Website development costs   (650 )   (3,775 )   (4,425 )
Net Cash Provided by Investing Activities   (650 )   11,135     10,485  
Net Increase in Cash and Cash equivalents   1,244     13,650     14,902  
Cash and Cash equivalents, Beginning of Period   13,658     8     -  
Cash and Cash equivalents, End of Period   14,902     13,658     14,902  
Supplementary Information                  
Interest Paid   -     -     -  
Income Taxes Paid   -     -     -  

The accompanying notes are an integral part of these consolidated financial statements.

F-4



Online Disruptive Technologies, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2011

Note 1 - Nature of Operations

Online Disruptive Technologies, Inc. (“ODT” or the “Company”) was incorporated on November 16, 2009 in the State of Nevada, U.S.A. The Company is in the business of operating websites with advertising revenue platforms. The Company has limited operations and in accordance with ASC 915, is considered a development stage company that has had no revenues from inception to date. The Company has a December 31 year-end.

Effective March 24, 2010, the Company acquired 100% of the issued and outstanding shares of RelationshipScoreboard.com Entertainment Inc. (“RS” or “RelationshipScoreboard.com”), a company incorporated on November 16, 2009 in the state of Nevada, U.S.A. in exchange for 16,000,000 shares of the Company’s common stock. Upon the completion of the acquisition, the former sole shareholder of RS held 89% of the Company’s issued and outstanding common stock. As a result, the transaction was accounted for as a reverse takeover transaction (“RTO”) for accounting purpose, as RS was deemed to be the acquirer, and these consolidated financial statements are a continuation of the financial statements of RS.

These financial statements have been prepared with the ongoing assumption that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. The Company suffered a recurring loss and had a working capital deficit of $47,744 as at September 30, 2011 (December 31, 2010 – a working capital deficit of $63,152) which raises substantial doubt about the Company’s ability to continue as a going concern. These financial statements do no include any adjustments to the amounts and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.

The operations of the Company have primarily been funded by the sale of common shares and loans received. Continued operations of the Company are dependent on the Company’s ability to complete equity financings or generate profitable operations in the future. Management’s plan in this regard is to secure additional funds through future equity financings. Such financings may not be available or may not be available on reasonable terms to the Company.

Note 2 – Acquisition - ODT

In connection with the RTO described above and prior to the acquisition, ODT had no business and did not meet the definition of a business under ASC 805, “Accounting for Business Combinations”. Accordingly, the reverse takeover of ODT by RS has been accounted for as a capital transaction, in respect of which the net assets of ODT on March 24, 2010 were accounted for as a recapitalization of RS. A breakdown of ODT’s net assets as at March 24, 2010 is as follows:

    March 24, 2010  
Total assets – cash only $  14,910  
Total liabilities   (5,911 )
       
Net assets acquired $  8,999  

F-5



Online Disruptive Technologies, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2011

Note 3 - Significant Accounting Policies

a)      Basis of Presentation
These financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“US GAAP”). All adjustments considered necessary for a fair presentation of financial position, results of operations and cash flows as at September 30, 2011 have been included.

b)      Accounting Method
The Company’s financial statements are prepared using the accrual method of accounting.

c)       Use of Estimates
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant areas require use of estimates include valuation allowance for deferred income tax assets. Actual results could differ from those estimates.

d)       Foreign Currency Translation
The Company’s functional currency is U.S. dollars. Transactions in other currencies are recorded in U.S. dollars at the rates of exchange prevailing when the transactions occur. Monetary assets and liabilities denominated in other currencies are translated into U.S. dollars at rates of exchange in effect at the balance sheet dates. Exchange gains and losses are recorded in the statements of operations.

e)       Cash and Cash Equivalents
Cash and cash equivalents consist entirely of readily available cash balances. There were no cash equivalents as of September 30, 2011 and December 31, 2010.

f)      he Company accounts its stock options and similar equity instruments issued in accordance with ASC 718, “Share-Based Payment”. Accordingly, compensation costs attributable to stock options or similar equity instruments granted are measured at the fair value at the grant date, and expensed over the expected vesting period. ASC 718 requires excess tax benefits be reported as a financing cash inflow rather than as a reduction of taxes paid.

As at September 30, 2011 the Company had no stock options issued and outstanding.

g) Revenue Recognition
Operating revenue consist of advertising revenue. The point in time at which revenues are recognized is determined in accordance with ASC 605-10 (formerly Staff Accounting Bulletin No. 104, “Revenue Recognition”). Revenues are recorded when the Company delivers services to its customers and collection is reasonably estimated.

F-6



Online Disruptive Technologies, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2011

Note 3 - Significant Accounting Policies (cont’d)

h)      Income Taxes
Income taxes are accounted for under the liability method of accounting for income taxes. Under the liability method, deferred tax liabilities and assets are recognized for the estimated future tax consequences attributable to differences between the amounts reported in the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted or substantially enacted income tax rates expected to apply when the asset is realized or the liability is settled. The effect of a change in income tax rates on deferred income tax liabilities and assets is recognized in income in the period that the change occurs. Deferred income tax assets are recognized to the extent that they are considered more likely than not to be realized.

The Financial Accounting Standards Board (FASB) has issued FASB ASC 740-10, “Accounting for Uncertainty in Income Taxes”. ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with prior literature FASB Statement No. 109, Accounting for Income Taxes. This standard requires a company to determine whether it is more likely than not that a tax position will be sustained will be sustained upon examination based upon the technical merits of the position. If the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements. The implementation of this standard had no impact on the Company’s financial statements.

i)       Comprehensive Income (Loss)
The Company accounts for comprehensive income under the provisions of ASC Topic 220-10, Comprehensive Income - Overall, which establishes standards for reporting and display of comprehensive income, its components and accumulated balances. The Company is disclosing this information on its Statements of Operations and Comprehensive Loss.

j)       Earnings (Loss) Per Share
Basic loss per share is computed on the basis of the weighted average number of common shares outstanding during each period.

Diluted loss per share is computed on the basis of the weighted average number of common shares and dilutive securities outstanding. For the nine month period ended September 30, 2011, the basic loss per share is equal to the diluted loss per share as there are no potential dilutive securities.

k)      Financial Instruments and Fair Value of Financial Instruments
Fair Value of Financial Instruments – the Company adopted SFAS ASC 820-10-50, “Fair Value Measurements”. This guidance defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows:

  • Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

  • Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

F-7



Online Disruptive Technologies, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2011

Note 3 - Significant Accounting Policies (cont’d)

k)       Financial Instruments and Fair Value of Financial Instruments (cont’d)

  • Level 3 inputs to valuation methodology are unobservable and significant to the fair measurement.

As at September 30, 2011, the fair value of cash and cash equivalents was measured using Level 1 inputs.

The carrying amounts reported in the balance sheets for the cash and cash equivalents, accounts payable and accrued liabilities and loan payable each qualify as financial instruments and are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization.

l)      Website Development Costs
Website development costs relate to the development of the Company's proprietary website. These costs have been capitalized as incurred and installed and are being amortized over the estimated useful life of three years on a straight line basis. The Company accounts for these costs in accordance with ASC 350, Intangibles, which specifies the appropriate accounting for costs incurred in connection with the development and maintenance of websites.

m)       Recently Adopted Accounting Pronouncements
In October 2009, the FASB issued Accounting Standards Update 2009-13, Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements. This update addressed the accounting for multiple-deliverable arrangements to enable vendors to account for products or services (deliverables) separately rather than a combined unit and will be separated in more circumstances that under existing US GAAP. This amendment has eliminated that residual method of allocation. Effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. Early adoption is permitted. The Company adopted this standard on January 1, 2011 and the adoption of ASU 2009-13 did not have a material effect on the financial position, results of operations or cash flows of the Company.

In October 2009, the FASB issued Accounting Standards Update 2009-14, Software (Topic 985): Certain Revenue Arrangements That Include Software Elements. This update changed the accounting model for revenue arrangements that include both tangible products and software elements. Effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. Early adoption is permitted.

The Company adopted this standard on January 1, 2011 and the adoption of ASU 2009-14 did not have an effect on the financial position, results of operations or cash flows of the Company.

F-8



Online Disruptive Technologies, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2011

Note 3 - Significant Accounting Policies (cont’d)

m)       Recently Adopted Accounting Pronouncements (cont’d)
In January 2010, the FASB issued ASU No. 2010-06 regarding fair value measurements and disclosures and improvement in the disclosure about fair value measurements. This ASU requires additional disclosures regarding significant transfers in and out of Levels 1 and 2 of fair value measurements, including a description of the reasons for the transfers. Further, this ASU requires additional disclosures for the activity in Level 3 fair value measurements, requiring presentation of information about purchases, sales, issuances, and settlements in the reconciliation for fair value measurements. This ASU is effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The Company adopted this standard on January 1, 2011 and the adoption of ASU 2010-06 did not have a material impact on our financial statements.

In February 2010, the FASB issued ASC No. 2010-09, “Amendments to Certain Recognition and Disclosure Requirements”, which eliminates the requirement for SEC filers to disclose the date through which an entity has evaluated subsequent events. ASC No. 2010-09 is effective for its fiscal quarter beginning after December 15, 2010. The adoption of ASC No. 2010-09 is not expected to have a material impact on the Company’s financial statements ASU No. 2010-13 was issued in April 2010, and clarified the classification of an employee share based payment award with an exercise price denominated in the currency of a market in which the underlying security trades. This ASU will be effective for the first fiscal quarter beginning after December 15, 2010, with early adoption permitted. The Company adopted this standard on January 1, 2011 and the adoption of ASU No. 2010-13 did not have a material impact on the Company’s financial statements.

In April 2010, the FASB codified the consensus reached in Emerging Issues Task Force Issue No. 08-09, “Milestone Method of Revenue Recognition.” FASB ASU No. 2010-17 “Revenue Recognition –Milestone Method (Topic 605)” provides guidance on defining a milestone and determining when it may be appropriate to apply the milestone method of revenue recognition for research and development transactions. FASB ASU No. 2010 – 17 is effective for fiscal years beginning on or after June 15, 2010, and is effective on a prospective basis for milestones achieved after the adoption date. The Company adopted this standard on January 1, 2011 and the adoption of ASU 2010-17 did not have a material impact on its financial position or results of operations.

On March 5, 2010, the FASB issued ASU No. 2010-11 Derivatives and Hedging Topic 815 “Scope Exception Related to Embedded Credit Derivatives.” This ASU clarifies the guidance within the derivative literature that exempts certain credit related features from analysis as potential embedded derivatives requiring separate accounting. The ASU specifies that an embedded credit derivative feature related to the transfer of credit risk that is only in the form of subordination of one financial instrument to another is not subject to bifurcation from a host contract under ASC 815-15-25, “Derivatives and Hedging — Embedded Derivatives — Recognition.” All other embedded credit derivative features should be analyzed to determine whether their economic characteristics and risks are “clearly and closely related” to the economic characteristics and risks of the host contract and whether bifurcation is required.

The Company adopted this standard on January 1, 2011 and the adoption of ASU 2010-11 did not have a material impact on the Company’s financial statements.

F-9



Online Disruptive Technologies, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2011

Note 3 - Significant Accounting Policies (cont’d)

m)       Recently Adopted Accounting Pronouncements (cont’d)
In April 2010, the FASB issued ASU 2010-13, “Compensation—Stock Compensation (Topic 718): Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades,” or ASU 2010-13. This ASU provides amendments to Topic 718 to clarify that an employee share-based payment award with an exercise price denominated in currency of a market in which a substantial portion of the entity’s equity securities trades should not be considered to contain a condition that is not a market, performance, or service condition. Therefore, an entity would not classify such an award as a liability if it otherwise qualifies as equity. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010. The Company adopted this standard on January 1, 2011 and the adoption of ASU 2010-13 did not have a significant impact on its financial statements.

n)       Recently Issued Accounting Pronouncements
In April 2011, the FASB issued authoritative guidance to clarify when a restructuring constitutes a troubled debt restructuring. In evaluating whether a restructuring constitutes a troubled debt restructuring, a creditor must separately conclude that two conditions exist: (1) the restructuring constitutes a concession and (2) the debtor is experiencing financial difficulties. The guidance will be effective for interim and annual reporting periods beginning after June 15, 2011 and will be applied retrospectively to the beginning of the annual period of adoption. The Company does not anticipate that the guidance will have an impact on the Company’s financial statements.

In May 2011, the FASB issued an accounting pronouncement related to fair value measurement (FASB ASC Topic 820), which amends current guidance to achieve common fair value measurement and disclosure requirements in U.S. GAAP and International Financial Reporting Standards. The amendments generally represent clarification of FASB ASC Topic 820, but also include instances where a particular principle or requirement for measuring fair value or disclosing information about fair value measurements has changed. This pronouncement is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The Company does not anticipate that the guidance will have an impact on the Company’s financial statements.

In June 2011, the FASB issued an accounting pronouncement that provides new guidance on the presentation of comprehensive income (FASB ASC Topic 220) in financial statements. Entities are required to present total comprehensive income either in a single, continuous statement of comprehensive income or in two separate, but consecutive, statements. Under the single-statement approach, entities must include the components of net income, a total for net income, the components of other comprehensive income and a total for comprehensive income. Under the two-statement approach, entities must report an income statement and, immediately following, a statement of other comprehensive income. Under either method, entities must display adjustments for items reclassified from other comprehensive income to net income in both net income and other comprehensive income.

The provisions for this pronouncement are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, with early adoption permitted. The Company does not anticipate that the guidance will have an impact on the Company’s financial statements.

F-10



Online Disruptive Technologies, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2011

Note 3 - Significant Accounting Policies (cont’d)

n)       Recently Issued Accounting Pronouncements (cont’d)
Other accounting pronouncements that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s financial statements upon adoption.

Note 4 – Website Development Costs

The Company incurred and capitalized $8,975 related to its ongoing website development. As at May 1 2011, the development of the initial phase of the website was substantially completed. As such, the Company began amortizing the website cost over the estimated useful life of 3 years. As at September 30, 2011, the company incurred amortization cost amounting to $1,246 and the net cost of web development asset of $7,729 is reflected on the balance sheet.

    As of September 30, 2011  
    Opening balance     Addition     Amortization     Ending balance  
Website development costs $  8,325   $  650   $  1,246   $  7,729  

    As of December 31, 2010  
    Opening balance     Addition     Amortization     Ending balance  
Website development costs $  -   $  8,325   $  -   $  8,325  

Note 5 – Loans Payable – Related Parties

As at September 30, 2011, the loans payable included followings:

  • $74,062 payable to a shareholder of the Company. The amount is unsecured and non-interest bearing. Until November 4, 2011, the loan was due on demand. Pursuant to a loan terms agreement executed by the Company and the shareholder on November 4, 2011, the terms of repayment were amended to specify that ten per cent (10%) of the gross proceeds of any prospective debt or equity financing undertaken by the Company would be applied to the repayment of the principal of this loan until fully repaid. Any balance remaining outstanding on November 4, 2016 would then be fully due and payable.
  • $400 payable to a director and principal shareholder of the Company. The amount is unsecured, non-interest bearing and due on demand.

During the nine month period ended September 30, 2011, the Company recorded imputed interest on the loans payable from related parties at a market rate of 11.68% thereby leading to the recognition of interest expense of $5,068. A corresponding amount was classified as additional paid-in capital.

Note 6 – Related Party Transactions

See Note 5.

F-11



Online Disruptive Technologies, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2011

Note 7 – Stockholders’ Equity

On March 24, 2010, the Company issued 16,000,000 common shares to the sole shareholder of RS to effect the acquisition and RTO. Prior to the acquisition and RTO (Note 1 and 2), RS engaged in the following equity transactions which have been restated using the exchange ratio established in the acquisition agreement to reflect 16,000,000 common shares issued in the reverse acquisition:

  • On November 16, 2009, RS issued 1,000 common shares at $0.0001 per share for total proceeds of $0.10.
  • On December 5, 2009, RS issued 15,999,000 common shares at $0.000025 per share for total proceeds of $400.

Prior to the acquisition and RTO (Note 1 and 2), the Company engaged in the followings equity transactions:

  • On November 16, 2009, the Company issued 100 common shares at $0.001 per share for total proceeds of $0.10.
  • On December 2, 2009, the Company issued 200,000 common shares at $0.01 per share for total proceeds of $2,000.
  • On January 7, 2010, the Company issued 1,800,000 common shares at $0.01 per share for total proceeds of $18,000.

Upon the acquisition and RTO, 2,000,100 common shares issued by the Company prior to the acquisition were considered as a recapitalization to RS.

On February 24, 2011, the Company issued 6,000,000 common shares at $0.01 per share for total proceeds of $60,000.

Note 8 – Commitments and Guarantees

The Company did not become a guarantor to any parties as at September 30, 2011.

See Note 9 (1).

Note 9 – Subsequent Events

  1.

On November 1, 2011, the Company executed two consulting agreements. Pursuant to the first such agreement, a corporation controlled by Robbie Manis was engaged by the Company to provide business advisory, financing and general compliance related services. The agreement provides for a monthly fee of $4,167 and is terminable by the Company with two months’ advance notice. Pursuant to the second such agreement, Kerry Chow was engaged by the Company to provide bookkeeping and accounting services. The agreement provides for a monthly fee of $833 and is terminable by the Company with two months’ advance notice.

     
  2.

On November 4, 2011, the Company executed a loan terms agreement with a lender to whom the Company owes $74,062. The terms of such agreement are detailed in Note 5 (Loans Payable – Related Parties) above.

F-12



Online Disruptive Technologies, Inc.
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2011

Note 10 – Comparative Figures

Certain comparative figures have been reclassified in order to conform to the current period’s financial statement presentation.

F-13


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ITEM 2.      MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

This quarterly report contains forward-looking statements. Forward-looking statements are projections of events, revenues, income, future economic performance or management’s plans and objectives for future operations. In some cases, you can identify forward-looking statements by the use of terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. Examples of forward-looking statements made in this quarterly report on Form 10-Q include statements about:

  • Our business plans,

  • Our ability to raise additional finances,

  • Our anticipated users for the website,

  • Our design of our website, and

  • Our future investments and allocation of capital resources.

These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including:

  • General economic and business conditions,

  • Our ability to complete our website,

  • Our ability to attract users to our website,

  • Our lack of operating history,

  • Our reliance on our sole director and officer, and

  • The risks in the section of this quarterly report entitled “Risk Factors”,

any of which may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

While these forward-looking statements and any assumptions upon which they are based are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results

As used in this report, the terms “we”, “us” and “our” mean Online Disruptive Technologies, Inc. and our wholly-owned subsidiary Relaitonshipscoreboard.com Entertainment, Inc. In this report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares in our capital stock.


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Our Current Business

We are a start-up development stage company. We own the domain name “RelationshipScoreboard.com” and have recently launched the first version of our flagship social networking website: RelationshipScoreboard.com (“RS.com”). The premise behind RS.com is that we as human beings are curious about relationships and their inner workings. Everyone wants to know what defines a good relationship, what elements make a relationship work, and how much each partner should invest and contribute into the relationship in order to make it function on a balanced basis. We believe this website will provide an objective perspective on what people value most in a relationship and it will help people ease their concerns about their own interactions.

To learn about celebrity relationships, we read gossip magazines such as US Weekly, Star, and The Enquirer. We peruse gossip websites such as TMZ.com and perezhilton.com and we watch shows like Entertainment Tonight to delve into the lives of others. We want to know who is dating who, who is getting married, who is cheating, who is breaking up and who is getting divorced. We debate amongst ourselves whether we think a specific couple is a good fit for one another, and how long we think the relationship will last. This curiosity applies not only to celebrity relationships but within our own social networks as well.

Social networking websites are designed to keep people connected and essentially to build an online community. We believe that RS.com will serve as an interactive website where people can socialize, share relationship advice and score others’ relationships based on a series of questionnaires. While the evaluation of others and their interpersonal relationships tends to be a serious topic of discussion, the purpose of this website is to add a comedic or anecdotal edge to the relationship subject matter. We believe that the entertainment value of rating relationships of others will keep people coming back for more and therefore continually enhance the traffic of the website.

While people are prone to subjectively judging the relationships of others, the unique feature of RS.com is that it will provide a series of mathematical algorithms to provide for much more scientific means of achieving a relationship score. Using its array of formulas and algorithms, RS.com allows its users to evaluate whether a given relationship is functional or not and determine which partner is “winning” the relationship battle (the definition of “winning’ being getting more out of the relationship than the other party). Users have the ability to answer a series of questions regarding any specific relationship, which will in turn help “score” the relationship. The scoring options will include friends’ relationships, relationships of strangers, and celebrity relationships as well, depending on which sections of the website they choose to enter. With such a broad base of social media users, the opportunity to attract people to the website will be within arm’s reach. We believe that RS.com’s unique attributes will allow it to succeed in attracting attention and traffic amongst the vast array of social networking websites. In the future, we anticipate that RS.com will allow its users to guesstimate how long the relationship will last and consider with whom the relationship partners would be better off aligning themselves.

Plan of Operation

We are a start-up development stage company. There exists substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our expenses. This is because we have not generated any revenues and no material revenues are anticipated until we further develop our business. There is no assurance we will reach this point.

If we are unable to attract enough users to our website and obtain revenue from advertising, will need to find alternative sources of capital, such as a public offering, a private placement of securities, or loans from our officer or others in order for us to maintain our operations past that 12 month period. At the present time, we have not made any arrangements to raise additional cash. If we need additional cash and cannot raise it, we will either have to suspend operations until we do raise the cash, or cease operations entirely.

Milestones for Development

The following is a detailed description of the actions and timing of our planned operations over the next 12 months:


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Milestone

Actions Required
Completion
Date
Approximate
Costs
Focus on
Advertisement of Website
• Perform search engine optimization.
• Use “guerrilla marketing” techniques to promote site.
• Begin working on social marketing integration with sites such as facebook and twitter.
Q4, 2011

$5,000

Launch Improved
Website
• Complete code for online store, forum, and advice section of website.
• Continue working on advertisement of website, including, if feasible, mainstream advertising.
Q1 of 2012
$15,000
Expansion of Advertisement
of Website
• If revenues support expansion, hire employees to provide advice and feedback to users.
• Implementation of bulletin-board chatroom.
• Add integration with social media sites such as Facebook and Twitter.
Q2 of 2012

$10,000

We anticipate the costs for the development of our improved website will be substantially reduced due to the uncompensated time and effort of our sole director and officer.

Results of Operations

Revenues

We have not earned any revenue from operations since our inception and further losses are anticipated in the development of our business. We are currently in the development stage of our business and we can provide no assurances that we will generate revenue in the foreseeable future.

Expenses

For the nine month period ended September 30, 2011, we incurred expenses of $50,256 including $17,181 in audit and accounting fees, $14,156 in legal fees, $7,528 in filing and transfer agent fees, $5,000 in consulting fees, $5,068 in interest expense, $1,246 in amortization, $119 in license and permit fees, $10 in web domain expense and a recovery of bank charges of $52. These expenses relate primarily to the ongoing maintenance of our company and the filing of necessary registration statements and annual report. For the nine month period ended September 30, 2010, we incurred expenses of $49,232. including $25,322 in audit and tax fees, $15,423 in legal fees, $4,222 in filing and transfer agent fees, $3,000 in consulting fees, $391 in interest expense, $732 in license and permit fees and $142 in bank fees. The increase in expenses in the nine month period ended September 30, 2011 as compared to the nine month period ended September 30, 2010 was primary due to interest payable on our debt.


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Liquidity And Capital Resources

Working Capital                  
    As at     As at     Percentage  
    September 30,     December 31,     Increase /  
    2011     2010     (Decrease)  
Current Assets $  29,902   $  13,658     119%  
Current Liabilities $  77,646   $  76,810     1%  
Working Capital (Deficiency) $  (47,744 ) $  (63,152 )   (24% )

Cash Flows            
    Nine Month Period     Nine Month Period  
    Ended     Ended  
    September 30,     September 30,  
    2011     2010  
Cash provided by (used in) Operating Activities $  (75,706 ) $  (54,347 )
Cash provided by (used in) Investing Activities $  (650 ) $  11,135  
Cash provided by (used in) Financing Activities $  77,600   $  56,862  
Net Increase (Decrease) in Cash $  14,902   $  13,650  

We anticipate that we will incur approximately $100,000 for operating expenses, including professional, legal and accounting expenses associated with our reporting requirements under the Exchange Act during the next twelve months. These outflows are in addition to the minimum $30,000 of additional development costs to be incurred relative to our website as detailed above.

As of November 4, 2011, we have received $74,062 as a loan from one of our shareholders. Until November 4, 2011, the loan was due on demand. Pursuant to a loan terms agreement executed by us and the shareholder on November 4, 2011, the terms of repayment were amended to specify that ten per cent (10%) of the gross proceeds of any prospective debt or equity financing undertaken by the Company would be applied to the repayment of the principal of this loan until fully repaid. Any balance remaining outstanding on November 4, 2016 would then be fully due and payable.

On November 1, 2011, we executed two consulting agreements. A company controlled by Robbie Manis was engaged by us to provide business advisory, financing and general compliance related services. The agreement provides for a monthly fee of $4,167 and is terminable by us with two months’ advance notice. Also, Kerry Chow was engaged by us to provide bookkeeping and accounting services. The agreement provides for a monthly fee of $833 and is terminable by us with two months’ advance notice.

As of the date of this report we had uncommitted cash of approximately $10,000, accordingly, we will need to obtain additional financing in order to complete our business plan.

Cash Used In Operating Activities

We used cash in operating activities in the amount of $75,706 during the nine month period ended September 30, 2011 and $54,347 during the nine month period ended September 30, 2010. Cash used in operating activities was funded primarily by cash from financing activities.

Cash From Investing Activities

$650 cash was used in investing activities during the nine month period ended September 30, 2011 to complete the development of the website. Cash provided by investing activities during the nine month period ended September 30, 2010 of $11,135 was a result of the cash that we acquired when we completed the reverse takeover transaction on March 24, 2010.


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Cash from Financing Activities

We generated cash of $77,600 from financing activities during the nine month period ended September 30, 2011 from our initial public offering and loans to related parties compared to cash of $56,862 generated from financing activities during the nine month period ended September 30, 2010.

Going Concern

The financial statements accompanying this report have been prepared on a going concern basis, which implies that our company will continue to realize its assets and discharge its liabilities and commitments in the normal course of business. Our company has not generated revenues since inception and has never paid any dividends and is unlikely to pay dividends or generate earnings in the immediate or foreseeable future. The continuation of our company as a going concern is dependent upon the continued financial support from our shareholders, the ability of our company to obtain necessary equity financing to achieve our operating objectives, and the attainment of profitable operations. As at September 30, 2011, our company has accumulated comprehensive losses of $117,491 since inception. We do not have sufficient working capital to enable us to carry out our stated plan of operation for the next twelve months.

Due to the uncertainty of our ability to meet our current operating expenses and the capital expenses noted above in their report on the financial statements for the year ended December 31, 2010, our independent auditors included an explanatory paragraph regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.

The continuation of our business is dependent upon us raising additional financial support. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

Future Financings

We anticipate continuing to rely on equity sales of our shares of common stock in order to continue to fund our business operations. Issuances of additional shares will result in dilution to our existing stockholders. There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or other financing to fund our planned activities.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

Item 3.      Quantitative and Qualitative Disclosures About Market Risk.

Not Applicable.

Item 4.       Controls and Procedures.

Disclosure Controls and Procedures

As required by paragraph (b) of Rules 13a-15 or 15d-15 under the Securities Exchange Act of 1934, our management, with the participation of our principal executive officer and principal financial officer evaluated our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this quarterly report on Form 10-Q. Based on this evaluation, management concluded that as of the end of the period covered by this quarterly report on Form 10-Q, these disclosure controls and procedures were ineffective.


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Because of the inherent limitations in all control systems, our management believes that no evaluation of controls can provide absolute assurance that all control issues, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.

Management’s Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over our financial reporting. In order to evaluate the effectiveness of internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act, our management, with the participation of our principal executive officer and principal financial officer has conducted an assessment, including testing, using the criteria in Internal Control — Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Our system of internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Our Management, including our principal executive officer and our principal financial officer, conducted an evaluation of the design and operation of our internal control over financial reporting as of September 30, 2011 based on the criteria set forth in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. This evaluation included review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on this evaluation. Based on this evaluation, our management concluded our internal control over financial reporting was not effective as at September 30, 2011 due to the following material weaknesses which are indicative of many small companies with small staff: (i) inadequate segregation of duties and ineffective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.

Our company plans to take steps to enhance and improve the design of our internal controls over financial reporting. During the period covered by this quarterly report on Form 10-Q, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we plan to implement the following changes during our fiscal year ending December 31, 2011: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The remediation efforts set out in (i) is largely dependent upon our company securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely effected in a material manner.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the fiscal quarter ended September 30, 2011 that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting.


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PART II - OTHER INFORMATION

ITEM 1.       LEGAL PROCEEDINGS

We know of no material, active or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

ITEM 1A.     RISK FACTORS.

Risks And Uncertainties

Risks Associated With Our Financial Condition

The fact that we have not generated any significant revenues since our inception raises substantial doubt about our ability to continue as a going concern.

We have not generated any revenues since our inception on November 16, 2009. Since we are still in the early stages of operating company and because of the lack of operating history, we will, in all likelihood, continue to incur operating expenses without significant revenues for the foreseeable future. Our primary source of funds has been the sale of our common stock. We cannot assure that we will be able to generate enough interest in our website. If we cannot attract a significant customer base, we will not be able to generate any significant revenues or income. In addition, if we are unable to establish and generate significant revenues, or obtain adequate future financing, our business will fail and you may lose some or all of your investment in our common stock.

Our independent auditors have expressed substantial doubt about our ability to continue as a going concern.

We incurred a net loss of $117,491 for the period from November 16, 2009 (date of inception) to September 30, 2011 and have not generated any revenues since our inception. Because we have incurred losses from operations since inception, have not attained profitable operations and are dependent upon obtaining adequate financing to fulfill our business operations, in their report on our financial statements for the period from November 16, 2009 (date of inception) to December 31, 2010, our independent auditors included an explanatory paragraph regarding the substantial doubt about our ability to continue as a going concern.

Our ability to continue as a going concern is depending upon our ability to generate future profitable operations and to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. We have not generated any revenues since our inception on November 16, 2009. We will continue to incur operating expenses without significant revenues for the foreseeable future. We cannot assure that we will be able to generate enough interest in our website to obtain significant revenues. If we cannot attract a significant user base, we will not be able to generate any significant revenues or income. In addition, if we are unable to establish and generate significant revenues, or obtain adequate future financing, our business will fail and you may lose some or all of your investment in our commons stock.

If we are unable to obtain financing in the amounts and on terms and dates acceptable to us, we may not be able to expand or continue our operations and developments and so may be forced to scale back or cease operations or discontinue our business and you could lose your entire investment.

During the fiscal year ended December 31, 2010, we procured additional loan financing of approximately $57,000 in order to provide for certain working capital requirements. On February 24, 2011, we closed a primary offering for gross proceeds of $60,000. However, we do not currently have any arrangement for additional financing. For the foreseeable future, we intend to fund our operations and capital expenditures from our cash on hand and additional financings. We estimate that we will not be able to initiate our planned operations using currently available capital resources. Our capital resources are insufficient to fund our planned operations for the next 12 month period, as we estimate that we require a total of $130,000 in addition to our existing working capital deficiency of $47,744. We will have to raise additional funds for the continued development of our business and the marketing of our products. Such additional funds may be raised through the sale of additional stock, stockholder and director advances and/or commercial borrowing. There can be no assurance that a financing will continue to be available if necessary to meet these continuing development costs or, if the financing is available, that it will be on terms acceptable to us. The issuance of additional equity securities by us will result in a significant dilution in the equity interests of our stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments. If we are unable to obtain financing in the amounts and on terms deemed acceptable to us, we may not be able to expand or continue our operations and developments and so may be forced to scale back or cease operations or discontinue our business and you could lose your entire investment.


12

Risk Associated with our Business

To date we have completed the development of our website however we still do not have any customers.

We do not have any paying customers and there is no guarantee that we will ever have any paying customers. Even if we obtain customers, there is no guarantee that we will generate a profit. If we cannot generate a profit, we will have to suspend or cease operations.

We will be dependent on third parties to continually develop and maintain our website, network infrastructure, and transaction processing systems as well as to design and fulfill a number of customer service and other retail functions. If such parties are unwilling or unable to continue providing these services, our business could be severely harmed. To date, other than with respect to the commissioning of the design of the website and the development of the core functionality, we have not entered into any formal relationship with any third parties to provide these services. Our success will depend on our ability to build and maintain relationships with such third party service providers on commercially reasonable terms. If we are unable to build and maintain such relationships on commercially reasonable terms, we will have to suspend or cease operations. If our customers become dissatisfied with the services provided by these third parties, our reputation could suffer.

We may face risks related to activities of registered users.

Our registered users upload their own content onto our website. We will create a terms of use for such content in the terms and conditions of our website and our users must agree to our submission agreement when they upload their content. Disputes or negative publicity about the use of such content could make members more reluctant to upload personal content or harm our reputation. Our steps to monitor and review the content provided by our users and to reduce our liability for such content may be inadequate and we could face claims arising from or liability for making any such content available on our website. Litigation to defend these claims or efforts to counter any negative publicity could be costly and any other liabilities we incur in connection with any such claims may harm our business, financial condition and results of operations.

Government regulations and legal uncertainties concerning the Internet could hinder our business operations.

Laws applicable to the Internet and online privacy generally are becoming more prevalent. New laws and regulations may be adopted regarding the Internet or other online services in the United States and foreign countries that could limit our business flexibility or cause us to incur higher compliance costs. The adoption of additional laws or regulations, either domestically or abroad, may decrease the popularity or impede the expansion of Internet marketing, restrict our present business practices, require us to implement costly compliance procedures or expose us and/or our customers to potential liability, which, in turn, could adversely affect our business. Furthermore, the applicability of existing laws to the Internet is unsettled with regard to many important issues, including intellectual property rights, export of encryption technology, personal privacy, libel and taxation. It may take years to determine whether and how such existing and future laws and regulations apply to us. If we are required to comply with new regulations or new interpretations of existing regulations, or if we are unable to comply with these regulations, our business could be harmed.


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The business of providing services over the internet is difficult to evaluate and our business model is unproven.

Because we only recently began operations, it is difficult to evaluate our business and prospects. Our revenue and income potential is unproven and our business model is emerging. Further, our business plan is derived from our sole director and officer’s experience. We may never achieve favorable operating results or profitability.

We may be unable to generate significant advertising or sponsorship revenues.

We plan to derive a significant portion of our revenues from advertising and sponsorship on our website. We may not, however, be able to generate adequate advertising or sponsorship revenues. There are no widely accepted standards that measure the effectiveness of web advertising. Advertisers and sponsors that have traditionally relied on other advertising media may be reluctant to advertise on the web. Advertisers that already have invested substantial resources in other advertising or sponsor methods may be reluctant to adopt a new strategy and our business would be adversely affected.

Different pricing models are used to sell advertising on the internet. It is difficult to predict which, if any, will emerge as the industry standard. The proliferation of websites across the internet may cause advertising and sponsor pricing levels to exist or evolve to levels that are below those originally anticipated in our business plan. This makes it difficult to project future advertising and sponsor revenues. Moreover, certain security, filtering and proprietary software programs that limit or prevent certain types of advertising from being delivered to a web user’s computer are available and prevalent. Widespread adoption of these types of software could adversely affect the commercial viability of web advertising.

Changing consumer preferences will require periodic product introduction.

As a result of changing consumer preferences, many websites are successfully marketed for only a limited period of time. There can be no assurance that any of our sites will continue to be popular for a prolonged period of time. Our success will be dependent upon our ability to develop new and improved content for our websites and product lines. Our failure to introduce new content and product lines and to achieve and sustain market acceptance and to produce acceptable margins could have a material adverse effect on our financial condition and results of operations.

Our market is characterized by rapid technological change, and if we fail to develop and market new technologies rapidly, we may not become profitable in the future.

The Internet is characterized by rapid technological change that could render our website prematurely obsolete. The development of our website entails significant technical and business risks. We can give no assurance that we will successfully use new technologies effectively or adapt our website to customer requirements or needs. If our management is unable, for technical, legal, financial, or other reasons, to adapt in a timely manner in response to changing market conditions or customer requirements, we may never become profitable which may result in the loss of all or part of your investment.

If we do not attract customers to our website on cost-effective terms, we will not generate a profit, which ultimately will result in a cessation of operations.

Our success depends on our ability to attract retail customers to our website on cost-effective terms. Our strategy to attract customers to our website, which has not been formalized or implemented, includes viral marketing, the practice of generating a “buzz” among Internet users in our products through the developing and maintaining of weblogs or “blogs”, online journals that are updated frequently and available to the public, postings on online communities such as Yahoo!(R) Groups and amateur websites such as YouTube.com, and other methods of getting Internet users to refer others to our website by e-mail or word of mouth; search engine optimization, marketing our website via search engines by purchasing sponsored placement in search results; and entering into affiliate marketing relationships with website providers to increase our visibility to Internet consumers. We plan to rely on viral marketing as the primary source of traffic to our website, with search engine optimization and affiliate marketing as secondary sources. Our marketing strategy may not be enough to attract sufficient traffic to our website. If we are unsuccessful at attracting a sufficient amount of traffic to our website, our ability to obtain customers and our resulting financial performance will be harmed.


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If we are unable to successfully manage growth, our operations could be adversely affected, and our business may fail.

Our ability to manage growth effectively will depend on our ability to improve and expand operations and to recruit operational, financial and administrative personnel. There can be no assurance that management will be able to manage growth effectively.

Risks Associated with Our Management

Our executive officer devotes only part time efforts to our business which may not be sufficient to successfully develop our business.

The amount of time which our sole executive officer will devote to our business is limited. Benjamin Cherniak, our president, secretary and treasurer, currently devotes approximately 30% of his working time to our company. Further, he has other business interests. While we expect him to increase the percentage of his working time he devotes to our company if our operations increase, the amount of time which he devotes to our business may not be sufficient to fully develop our business. In addition, there exist potential conflicts of interest including, among other things, time, effort, and corporate opportunity involved with participating in other business entities. We have no agreements with him as to how he allocates either his time to our company or how he handles corporate opportunities. As a result, we may be unable to implement our plan and our business might ultimately fail.

The loss of the services of our executive officer would disrupt our operations and interfere with our ability to compete.

We depend upon the continued contributions of our sole executive officer Benjamin Cherniak. He handles all of the responsibilities in the area of corporate administration and business development. We do not carry key person life insurance for him and the loss of his services would likely lead to us being unable to implement our business plan and our business might ultimately fail.

Because our sole officer and director is a national of Canada, you may have no effective recourse against him for misconduct and you may not be able to enforce judgment and civil liabilities against him or our company.

Our sole officer and director is a national of Canada. As a result, it may be difficult for investors to enforce within the United States any judgments obtained against him or our company, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state thereof.

Risks Associated with Our Common Stock

Because we do not intend to pay any dividends on our common stock, investors seeking dividend income or liquidity should not purchase shares of our common stock in this offering.

We do not currently anticipate declaring and paying dividends to our stockholders in the foreseeable future. It is our current intention to apply net earnings, if any, in the foreseeable future to increasing our working capital. Prospective investors seeking or needing dividend income or liquidity should, therefore, not purchase our common stock. We currently have no revenues and a history of losses, so there can be no assurance that we will ever have sufficient earnings to declare and pay dividends to the holders of shares of our common stock, and in any event, a decision to declare and pay dividends is at the sole discretion of our board of directors, which currently do not intend to pay any dividends on shares of our common stock for the foreseeable future.

Our common stock has never been traded and, if a market ever develops for our common stock, the price of our common stock is likely to be highly volatile and may decline after the offering. If this happens, investors may have difficulty selling their shares and may not be able to sell their shares at all.

There is no public market for our common stock and we cannot assure you that a market will develop or that any stockholder will be able to liquidate his or her investment without considerable delay, if at all. A trading market may not develop in the future, and if one does develop, it may not be sustained. If an active trading market does develop, the market price of our common stock is likely to be highly volatile. The market price of our common stock may also fluctuate significantly in response to the following factors, most of which are beyond our control:


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  • variations in our quarterly operating results;

  • changes in market valuations of similar companies;

  • announcements by us or our competitors of significant new products; and

  • the loss of key management or personnel.

The equity markets have, on occasion, experienced significant price and volume fluctuations that have affected the market prices for many companies’ securities that have been unrelated to the operating performance of these companies. Any such fluctuations may adversely affect the market price of our common stock, regardless of our actual operating performance. As a result, stockholders may be unable to sell their shares, or may be forced to sell them at a loss.

Because we can issue additional shares of our common stock or preferred stock, purchasers of our common stock may experience dilution in their ownership of our company in the future.

We are authorized to issue up to 500,000,000 shares of common stock and 20,000,000 shares of preferred stock. As of November <>, 2011, there were 24,000,100 shares of our common stock issued and outstanding and no shares of our preferred stock issued and outstanding. Our board of directors has the authority to cause our company to issue additional shares of common stock or preferred stock without the consent of any of our stockholders. Consequently, our stockholders may experience dilution in their ownership of our company in the future.

Our stock is a penny stock. Trading of our stock may be restricted by the Securities and Exchange Commission’s penny stock regulations which may limit a stockholder’s ability to buy and sell our stock.

Our stock is a penny stock. The Securities and Exchange Commission has adopted Rule 15g-9 which generally defines a “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors”. The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the Securities and Exchange Commission which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.


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The Financial Industry Regulatory Authority sales practice requirements may also limit a stockholder’s ability to buy and sell our stock.

In addition to the “penny stock” rules described above, the Financial Industry Regulatory Authority, which we refer to as FINRA, has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, the FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our common stock and have an adverse effect on the market for shares of our common stock.

ITEM 2.       UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.       DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.       (REMOVED AND RESERVED)

ITEM 5.      OTHER INFORMATION

None.

ITEM 6.       EXHIBITS

Exhibit
Number

Description
3.1(1) Articles of Incorporation
3.2(1) Bylaws
10.1(1) Share Purchase Agreement dated March 24, 2010 between Benjamin Cherniak and Online Disruptive Technologies, Inc.
10.2(1) Subscription Agreement between our company and Robbie Manis
10.3(1) Subscription Agreement between our company and Brian Hough
10.4(1) Subscription Agreement between our company and Peter Hough
10.5(2) Consulting Agreement dated November 1, 2011 with 1367826 Ontario Limited and Robbie Manis
10.6(2) Consulting Agreement dated November 1, 2011 with Kerry Chow
10.7(3) Loan Terms Agreement dated November 4, 2011 with Peter Hough
21.1 Subsidiary of Online Disruptive Technologies, Inc.: Relationshipscoreboard.com Entertainment, Inc., a Nevada corporation
31.1* Section 302 of the Sarbanes-Oxley Act of 2002 of Benjamin Cherniak
32.1* Section 906 Certifications under Sarbanes-Oxley Act of 2002 of Benjamin Cherniak

*Filed herewith.

(1) Incorporated by reference from our Registration Statement on Form S-1 filed on August 10, 2010.

(2) Incorporated by reference from our Current Report on Form 8-K filed on November 3, 2011.

(3) Incorporated by reference from our Current Report on Form 8-K filed on November 8, 2011.


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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

ONLINE DISRUPTIVE TECHNOLOGIES, INC.

By  
  /s/ Benjamin Chernaik  
  Benjamin Chernaik  
  President and Director  
  (Principal Executive Officer, Principal Financial  
  Officer and Principal Accounting Officer)  
     
  Date: November 14, 2011