UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q

[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2012

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
ACT

For the transition period from __________ to ___________

Commission file number: 000-53835

MEDIENT STUDIOS, INC.

(FORMERLY FAIRWAY PROPERTIES, INC.)
(Exact name of registrant as specified in its charter)

 

Nevada	41-2251802
(State of Incorporation)	(IRS Employer ID Number)

 

4750 Vanalden Avenue, Tarzana CA 91356
(Address of principal executive offices)

(818) 634-4801
(Registrant's Telephone number)

 

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 past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the 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 for Regulation S-T (ss.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 [ ] No [ ]

Indicate by check mark whether the registrant is a large accelerated file, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

 

	Large Accelerated Filer [  ]	Accelerated Filer [  ]
	Non-Accelerated Filer [  ]	Smaller Reporting Company [X]

  

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

Indicate the number of share outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

As of November 16, 2012, there were 1,943,000 shares of the registrant's common stock issued and outstanding.

  

				Page
PART I - FINANCIAL INFORMATION
Item  1.	Financial Statements – (Unaudited)
	Balance Sheets - September 30, 2012 and December 31, 2011 (Audited)			3
	Statements of Operations -			4
	Three and Nine Months ended September 30, 2012 and 2011 and
	From September 10, 2007 (Inception) to September 30, 2012
	Statement of Changes in Shareholders’ Deficit -			5
	From September 10, 2007 (Inception) to September 30, 2012
	Statements of Cash Flows -			6
	Nine months ended June 30, 2012 and
	From September 10, 2007 (Inception) to September 30, 2012
	Notes to the Financial Statements			7
Item  2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations			12
Item  3.	Quantitative and Qualitative Disclosures about Market Risk			14
	- Not Applicable
Item 4	Controls and Procedures			14
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings - Not Applicable			15
Item 1A.	Risk Factors - Not Applicable			15
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds - Not Applicable			15
Item 3.	Defaults upon Senior Securities - Not Applicable			15
Item 4.	Mine Safety Disclosure - Not Applicable			15
Item 5.	Other Information - Not Applicable			15
Item  6.	Exhibits			15
Signatures				16

 

 

 

 

 

PART I

ITEM 1. FINANCIAL STATEMENTS

 

MEDIENT STUDIOS, INC. (FORMERLY FAIRWAY PROPERTIES, INC.) (A Development Stage Company) Balance Sheets  As of September 30, 2012 and December 31, 2011

 

		As of September 30, 2012				As of December 31, 2011
		(Unaudited)				(Audited)
Assets
Current Assets
Cash		$	0			$	814
Total Current Assets			0				814
Total Assets		$	0			$	814
Liabilities and Shareholders’ Equity (Deficit)
Current Liabilities
Accounts Payable		$	0			$	48,312
Credit Line			0				1,000
Stock to be Issued			107,400				0
Total Liabilities (All Current)			107,400				49,312
Shareholders’ Equity (Deficit):
Preferred stock, 50,000,000 shares   authorized, 0 and 0 issued and outstanding respectively			0				0
Common stock, $0.001 par value, 500,000,000 shares   authorized, 1,404,000 and 1,404,000 shares issued   and outstanding,  respectively			1,404				1,404
Additional Paid-In Capital			150,514				75,181
Deficit accumulated during the development stage			(259,318	)			(125,083	)
Total Shareholders’ Equity (Deficit)			(107,400	)			(48,498	)
Total Liabilities and Shareholders’ Equity		$	0			$	814

 

 

The Accompanying Notes are an Integral Part of these Financial Statements.

 

 

MEDIENT STUDIOS, INC. (FORMERLY FAIRWAY PROPERTIES, INC.) (A Development Stage Company)  STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2012 and 2011 (Unaudited)

 

 

		Three Months Ended				Three Months Ended				Nine Months Ended				Nine Months Ended				Sept 10, 2007 (Inception) Through
		September 30, 2012				September 30, 2011				September 30, 2012				September 30, 2011				September 30, 2012
Revenue		$	0			$	60			$	150			$	380			$	1,785
Operational expenses:
General and Administrative expense			95				526				272				601				12,974
Licensing fees			1,000				1,500				4,000				4,650				15,200
Stock for services			107,400				0				107,400				0				114,235
Professional fees			11,275				6,260				22,688				23,164				116,985
Total operational expenses			119,770				8,286				134,360				28,415				259,394
Gross margin			(119,770	)			(8,226	)			(134,210	)			(28,035	)			(257,609	)
Other income (expense):
Interest income (expense)			(8	)			0				(25	)			0				(1,726	)
Net loss		$	(119,778	)		$	(8,226	)		$	(134,235	)		$	(28,035	)		$	(259,335	)
Per share information
Net loss per common share
Basic and fully diluted		$	(0.09	)		$	(0.01	)		$	(0.10	)		$	(0.02	)
Weighted average number of common
stock outstanding			1,404,000				1,404,000				1,404,000				1,404,000

 

The Accompanying Notes are an Integral Part of these Financial Statements.

 

 

 

 

 

 

MEDIENT STUDIOS, INC. (FORMERLY FAIRWAY PROPERTIES, INC.)  (A Development Stage Company)  Statement of Stockholders’ Equity (Deficit) For the PERIOD OF September 10, 2007 (INCEPTION) THROUGH SEPTEMBER 30, 2012 (Unaudited)

  

			Common Stock								Additional				Deficit Accum
			Number of Shares				$.001 Par				Paid-in Capital				During Deve Stage				Totals
Beginning Balance - September 10, 2007			-			$	-			$	-			$	-			$	-
Common Stock issued to directors for services			485,802				486				-				-				486
Common stock issued for Services			608,000				608				792				-				1,400
Net loss			-				-				-				(19,250	)			(19,250	)
Balance - December 31, 2007			1,093,802				1,094				792				(19,250	)			(17,364	)
Common stock issued to directors			11,448				11								-				11
Common stock issued for services			19,750				20				4,918				-				4,938
Common stock issued for cash			279,000				279				69,471				-				69,750
Net loss			-				-				-				(16,640	)			(16,640	)
Balance - December 31, 2008			1,404,000				1,404				75,181				(35,890	)			40,695
Net loss			-				-				-				(2,633	)			(2,633	)
Balance - December 31, 2009			1,404,000				1,404				75,181				(38,523	)			38,062
Net loss			-				-				-				(52,054	)			(52,054	)
Balance - December 31, 2010			1,404,000				1,404				75,101				(90,577	)			(13,992	)
Net loss			-				-				-				(34,506	)			(34,506	)
Balance - December 31, 2011			1,404,000				1,404				75,181				(125,083	)			(48,498	)
Assumption of liabilities by previous
shareholders			-				-				75,333				-				75,333
Net Loss			-				-				-				(134,235	)			(134,235	)
Balance - September 30, 2012			1,404,000			$	1,404			$	150,514			$	(259,318	)		$	(107,400	)

   

The Accompanying Notes are an Integral Part of these Financial Statements.

 

 

 

 

 

  

MEDIENT STUDIOS, INC. (FORMERLY FAIRWAY PROPERTIES, INC.) (A Development Stage Company) Statements of Cash Flows For the Nine Months Ended September 30, 2012 and 2011

(Unaudited)

 

		Nine Months Ended Sept 30,				Nine Months Ended Sept 30,				September 30, 2007 (Inception) Through September 30,
		2012				2011				2012
CASH FLOWS USED BY OPERATING ACTIVITIES
Net Loss		$	(134,235	)		$	(28,035	)		$	(259,318	)
Adjustments to reconcile net loss to net cash used
by operating activities:
Common stock to be issued for services			107,400				0				114,235
Increase (decrease) in accounts payable			(48,312	)			17,934				0
(Decrease) in line of credit			(1,000	)			0				0
Net Cash Used by Operating Activities			(76,147	)			(10,101	)			(145,083	)
Cash Flows from Financing Activities:
Assumption of liabilities by former shareholders			75,333				0				75,333
Proceeds from sale of common stock			0				0				69,750
Proceeds from note payable, related party			0				0				25,000
Payment of note payable, related party			0				0				(25,000	)
Net Cash Provided by Financing Activities			75,333				0				145,083
Net Increase (Decrease) in Cash			(814	)			(10,101	)			0
Cash and Cash Equivalents - Beginning of Period			814				11,322				0
Cash and Cash Equivalents - End of period		$	0			$	1,221			$	0
Supplemental Disclosure
Cash paid for interest		$	0			$	0			$	0
Cash paid for income taxes		$	0			$	0				0

 

The Accompanying Notes are an Integral Part of these Financial Statements.

 

 

 

  

MEDIENT STUDIOS, INC.
(A Development Stage Company)

Notes to the Financial Statements
September 30, 2012
(Unaudited)

NOTE 1 - BUSINESS AND BASIS OF PRESENTATION

Business

Medient Studios, Inc. ("the Company") (formerly) “Fairway Properties, Inc.”), was incorporated on September 10, 2007 in the state of Nevada. The Company is on a calendar year-end. 

Medient is a global film production and distribution company with a strong presence in the key markets of North America and India. Medient's management team has approximately 150 years of experience in the motion picture industry and is responsible for producing or financing in excess of 250 movies. To date, some 14 movies, two music acts and several hundred live performance shows have been produced under the Medient banner. The Company is in the process of significantly scaling up its operations, including its planned entry into the electronic games sector.

 

On August 28, 2012, certain majority shareholders who owned 1,083,000 restricted common shares of the registrant (representing approximately 77% of the issued and outstanding shares) sold those common shares to Manu Kumaran.

 

Under the share purchase agreement, those certain shareholders received a total of $175,000, of which $50,000 was paid in cash and the remaining $125,000 is to be paid pursuant to a promissory note due December 31, 2012. The former shareholders assumed all outstanding payables in conjunction with the share purchase agreement.

 

On August 28, 2012, a change of control of the registrant was made when Manu Kumaran acquired 1,083,000 common shares from selling shareholders which represented 77.1% of the issued and outstanding common shares.  As a result of this acquisition, Manu Kumaran became the majority shareholder of the registrant.

 

In connection with the change in control, Michael Murphy, the chief executive officer, treasurer, and director of the registrant, Sean Murphy, the president and director of the registrant, Darren Murphy, the secretary of the registrant, and Edward Sigmond, a director of the registrant, submitted their resignation from all positions.  The resignations became effective on September 30, 2012.

 

In connection with the change in control, Michael Murphy either paid or assumed responsibility for all outstanding liabilities as of August 28, 2012, so that Fairway Properties was absolved of all prior outstanding liabilities.

 

On August 28, 2012, the board of directors appointed Manu Kumaran as a director.  Upon the effective date of the resignations, Manu Kumaran was appointed chief executive officer, chief financial officer, and secretary.

 

Manu Kumaran is a second generation international film producer, who has produced 19 feature films in four languages.  The oldest son of renowned Malayalamfilm director-producer K.P. Kumaran, Manu has been a part of the film business from an early age, working on all aspects of production and distribution. An expert in film tax credits and incentives, Kumaran has built a reputation for producing theatrical quality releases at minimal costs with strong net margins.

 

The Company has entered into merger negotiations with Kumaran Holding,LLC (herein referred to as “KH”) an Oklahoma limited liability corporation that was founded for the acquisition and exploitation of theatrical quality motion pictures on a global basis. The founder of KH, Manu Kumaran, (who is also the majority shareholder of the Company), has personally produced over nineteen films in five continents.  KH’s first production, “Storage 24”, was filmed and produced in the United Kingdom.  “Storage 24” will be distributed globally, and was world premiered recently in London by Universal Studios.  The Company's second major film production, "Yellow," was written and directed by Nick Cassavettes, the director of “The Notebook” and “My Sister’s Keeper”.  "Yellow" was filmed in the United States, and the film world premiered in September 2012 at the Toronto Film Festival. It is scheduled for release in the United States in the spring of 2013. The transaction is expected to close in the fourth quarter of 2012, subject to standard due diligence, and approval by Medient Studios Board of Directors. 

 

 

Basis of Presentation

The Company prepares its financial statements on the accrual basis of accounting.  All intercompany balances and transactions are eliminated.   Management believes that all adjustments necessary for a fair presentation of the results of the three and nine months ended September 30, 2012 and 2011 respectively have been made.

  

The Company currently does not have any subsidiaries, but anticipates when they do, will consolidate its subsidiaries in accordance with ASC 810, “Business Combinations”, and specifically ASC 810-10-15-8 which states, "The usual condition for a controlling financial interest is ownership of a majority voting interest, and, therefore, as a general rule ownership by one reporting entity, directly or indirectly, or over 50% of the outstanding voting shares of another entity is a condition pointing toward consolidation."

 

Investments in subsidiaries, that the Company may acquire, where they have has a controlling interest, will be reported using the equity method.  For those businesses that the Company acquires and does not have a controlling interest, they will be accounted through the Noncontrolling Interest method.

Development Stage Company

The Company has not earned significant revenues from planned operations. Accordingly, the Company's activities have been accounted for as those of a "Development Stage Company." Among the disclosures required, are that the Company's financial statements of operations, stockholders' equity and cash flows disclose activity since the date of the Company's inception.

Unaudited Interim Financial Statements

 

The accompanying unaudited interim consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission. These financial statements are unaudited and, in the opinion of management, include all adjustments (consisting of normal recurring accruals) necessary to present fairly the balance sheet, statement of operations, statement of stockholders’ equity and statement of cash flows for the periods presented in accordance with accounting principles generally accepted in the United States. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to SEC rules and regulations. It is presumed that users of this interim financial information have read or have access to the audited financial statements and footnote disclosure for the preceding fiscal year contained in the Company’s Annual Report on Form 10-K. The results of operations for the nine months ended September 30, 2012 are not necessarily indicative of the results of operations for the full year or any other interim period.  The information included in this Form 10-Q should be read in conjunction with Management's Discussion and Analysis and Financial Statements and notes thereto included in the Company’s December 31, 2011 Form 10-K.

 

 

 

Going Concern

The Company's financial statements for the year ended December 31, 2011 and the nine months ended September 30, 2012 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company has an accumulated deficit of $259,318 as of September 30, 2012. During the nine months ended September 30, 2012, the Company recognized $150 in revenues from its operational activities and has a loss of $134,235, and had no assets or operations. The Company is currently evaluating acquisition opportunities. These factors raise substantial doubt about the Company's ability to continue as a going concern.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

Significant Accounting Policies

 

The Company’s management selects accounting principles generally accepted in the United States of America and adopts methods for their application.  The application of accounting principles requires the estimating, matching and timing of revenue and expense.  It is also necessary for management to determine, measure and allocate resources and obligations within the financial process according to those principles.  The accounting policies used conform to generally accepted accounting principles which have been consistently applied in the preparation of these financial statements.

The financial statements and notes are representations of the Company’s management which is responsible for their integrity and objectivity.  Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud.  The Company's system of internal  accounting control is designed to assure, among other items, that  1) recorded  transactions  are valid;  2) valid  transactions  are recorded;  and  3) transactions  are  recorded in the proper  period in a timely  manner to produce financial  statements which present fairly the financial  condition,  results of operations  and cash  flows of the  Company  for the  respective  periods  being presented. 

 

Use of Estimates

The preparation of the 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 revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less and money market instruments to be cash equivalents.

Revenue Recognition

The Company recognizes revenue from the sale of products in accordance with ASC 605-15 “Revenue Recognition”, (formerly Staff Accounting Bulletin No. 104, "Revenue Recognition in Financial Statements" ("SAB 104").  Revenue will be recognized only when all of the following criteria have been met.

 

1. Persuasive evidence of an arrangement exists;

2. Ownership and all risks of loss have been transferred to buyer, which is generally upon delivery

3. The price is fixed and determinable; and

4. Collectability is reasonably assured.

 

Revenue is recorded net any of sales taxes charged to customers.

 

Earnings per Share

 

Earnings per share (basic) is calculated by dividing the net income (loss) by the weighted average number of common shares outstanding for the period covered.  As the Company has no potentially dilutive securities, diluted earnings per share is identical to earnings per share (basic).

 

Comprehensive Income

 

ASC 220 establishes standards for reporting and display of comprehensive income and its components in a full set of general purpose financial statements.  For the quarters ended September 30, 2012 and 2011, the Company had no items of other comprehensive income.  Therefore, the net loss equals the comprehensive loss for the periods then ended.

 

Income Taxes

Provision for income taxes represents actual or estimated amounts payable on tax return filings each year. Deferred tax assets and liabilities are recorded for the estimated future tax effects of temporary differences between the tax basis of assets and liabilities and amounts reported in the accompanying balance sheets, and for operating loss and tax credit carry forwards. The change in deferred tax assets and liabilities for the period measures the deferred tax provision or benefit for the period. Effects of changes in enacted tax laws on deferred tax assets and liabilities are reflected as adjustment to the tax provision or benefit in the period of enactment.

Fair Value of Financial Instruments

  

In accordance with the reporting requirements of ASC 820, the Company  calculates the fair value of its assets and  liabilities which qualify as financial  instruments  under this statement and includes this additional information in the notes to the financial statements  when the fair value is different  than the  carrying  value of those financial instruments.   At September 30, 2012, the Company did not have any financial instruments.

Recent Accounting Pronouncements

There were various accounting standards and interpretations issued during the nine months ended September 30, 2012, none of which are expected to have a material impact on the Company's financial position, operations or cash flows.

NOTE 3 - CREDIT LINE

The Company’s line of credit was repaid by the former majority shareholders of the Company during the quarter. As of September 30, 2012, the Company has no current credit lines or outstanding liabilities on any credit facilities.

 

NOTE 4 - STOCKHOLDERS' EQUITY

 

The authorized capital stock of the Company is 500,000,000 shares with a $0.001 par value. At September 30, 2012, the Company had 1,404,000 shares of its common stock issued and outstanding. The Company has 50,000,000 preferred shares authorized but not issued.

During the nine months ended September 30, 2012 and 2011, the Company did not issue any shares of its common stock. The Company had 179,000 shares that were earned for services performed by the former majority shareholders of the Company, which were included in shares to be issued at September 30, 2012. Pursuant to the share purchase agreement discussed in Note 1, the Company’s former controlling shareholders assumed all accounts payable and many of which were repaid at closing from the proceeds. The Company recorded $75,333 in additional paid in capital for the amounts assumed by the previous controlling shareholders.

Pursuant to the share purchase agreement discussed in Note 1, the Company’s former controling shareholders assumed all accounts payable and many of which were repaid at closing from the proceeds. The Company recorded $75,333 in additional paid in capital for the amounts assumed by the previous controling shareholders.

 

 

NOTE 5 - INCOME TAXES

The Company has adopted ASC 740-10 which requires the use of the liability method in the computation of income tax expense and the current and deferred income taxes payable (deferred tax liability) or benefit (deferred tax asset).   Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

 

The cumulative tax effect at the expected tax rate of 20% of significant items comprising the Company’s net deferred tax amounts as of September 30, 2012 and December 31, 2011 are as follows:

 

		September 30, 2012				December 31, 2011
Prior Year		$	25,017			$	18,115
Tax Benefit for Current Period			26,847				6,902
Net Operating Loss Carryforward			51,864				25,017
Less: Valuation Allowance			(51,864	)			(25,017	)
Net Deferred Tax Asset		$	0			$	0

 

At September 30, 2012 and at December 31, 2011, the Company had net operating loss carryforwards of approximately $259,318 and $125,083, respectively, for federal income tax purposes. These carryforwards, if not utilized to offset taxable income, will begin to expire in 2028.

NOTE 6 - SUBSEQUENT EVENTS

 

The Company has evaluated it activities subsequent to the nine months ended September 30, 2012 and noted the following reportable events:

 

The Company has entered into merger negotiations with Kumaran Holdings, LLC (herein referred to as “KH”) an Oklahoma limited liability corporation that was founded for the acquisition and exploitation of theatrical quality motion pictures on a global basis. The founder of KH, Manu Kumaran, (who is also the majority shareholder of the Company), has personally produced over nineteen films in five continents.  KH’s first production, “Storage 24”, was filmed and produced in the United Kingdom.  “Storage 24” will be distributed globally, and was world premiered recently in London by Universal Studios.  The Company's second major film production, "Yellow," was written and directed by Nick Cassavettes, the director of “The Notebook” and “My Sister’s Keeper”.  "Yellow" was filmed in the United States, and the film world premiered in September 2012 at the Toronto Film Festival. It is scheduled for release in the United States in the spring of 2013.

 

The transaction is expected to close in the fourth quarter of 2012, subject to standard due diligence, and approval by Medient Studios Board of Directors.

 

On October 24, 2012, the Company issued 429,000 shares of common stock, including 250,000 to new board members for services to be rendered and the 179,000 shares which were in stock to be issued at September 30, 2012.

 

No other significant subsequent events were noted.

 

 

 

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

 

The following discussion should be read in conjunction with our unaudited financial statements and notes thereto included herein. In connection with, and because we desire to take advantage of, the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, we caution readers regarding certain forward looking statements in the following discussion and elsewhere in this report and in any other statement made by, or on our behalf, whether or not in future filings with the Securities and Exchange Commission. Forward-looking statements are statements not based on historical information and which relate to future operations, strategies, financial results or other developments. Forward looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward looking statements made by, or on our behalf. We disclaim any obligation to update forward-looking statements.

The independent registered public accounting firm's report on the Company's financial statements as of December 31, 2011, and for each of the years in the two-year period then ended, includes a "going concern" explanatory paragraph, that describes substantial doubt about the Company's ability to continue as a going concern.

Plan of Operations

Medient Studios, Inc. ("the Company") was formerly named “Fairway Properties”, and was incorporated on September 10, 2007 in the state of Nevada. The Company's fiscal year end is December 31st.

Medient is a global film production and distribution company with a strong presence in the key markets of North America and India. Medient's management team has approximately 150 years of experience in the motion picture industry and is responsible for producing or financing in excess of 250 movies. To date, some 14 movies, two music acts and several hundred live performance shows have been produced under the Medient banner. The Company is in the process of significantly scaling up its operations, including its planned entry into the electronic games sector.

We intend to obtain debt and/or equity financing to meet our ongoing operating expenses and to acquire completed theatrical release quality films as well as produce out own films. There is and can be no assurance that these events can be successfully completed. In particular there is no assurance that any such film assets will be acquired or that any stockholder will realize any return on their shares after such a transaction. Any acquisitions completed by us can be expected to have a significant dilutive effect on the percentage of shares held by our current stockholders.

 

Based on our current cash reserves of $0 at September 30, 2012, we have an operational budget of less than three months. We are reliant upon our management team to cover our monthly operational costs. If we incur unforeseen expenses or do not generate sufficient revenue over the next 3 months to cover our operating costs, it is possible we will deplete our cash reserves and need to raise additional money.

Currently, we have no committed source for any funds as of the date hereof. No representation is made that any funds will be available when needed. In the event funds cannot be raised if and when needed, we may not be able to carry out our business plan and could fail in business as a result of these uncertainties.

The independent registered public accounting firm's report on the Company's financial statements as of December 31, 2011, and for each of the years in the two-year period then ended, includes a "going concern" explanatory paragraph, that describes substantial doubt about the Company's ability to continue as a going concern.

 

 RESULTS OF OPERATIONS

 

For the Three Months Ended September 30, 2012 Compared to the Three Months Ended September 30, 2011

During the three months ended September 30, 2012, we recognized no revenue from our operations. During the three months ended September 30, 2011, we recognized revenues of $60 from our operations. The decrease of $60 was a result of our decreased activities.

During the three months ended September 30, 2012, we incurred general and administrative expenses of $95 and licensing fees of $1,000. We paid stock for services with a value of $107,400 and paid professional fees of $11,275. As a result, we had net loss of $119,770 for the three months ended September 30, 2012.

Comparatively, for the three months ended September 30, 2011, we incurred general and administrative expense of $526, licensing fees of $1,500, and professional fees of $6,260. As a result, we had net loss of $8,226 for the three months ended September 30, 2011. The increase of $111,484 was a result of an increase of $5,015 in professional fees and stock for services of $107,400.

 

For the Nine Months Ended September 30, 2012 Compared to the Nine Months Ended September 30, 2011

During the nine months ended September 30, 2012, we recognized revenues from our operations of $150. During the nine months ended September 30, 2011, we recognized revenues of $380 from our operations. The decrease of $230 was a result of our decreased activities.

During the nine months ended September 30, 2012, we had general and administrative expenses of $272 and paid licensing fees of $4,000. We paid stock for services with a value of $107,400 and paid professional fees of $22,688. We had interest expenses of $25. As a result, we had net loss of $134,235 for the nine months ended September 30, 2012.

Comparatively, for the nine months ended September 30, 2011, we had general and administrative expenses of $601, paid licensing fees of $4,650, and paid professional fees of $23,164. As a result, we had net loss of $28,035 for the nine months ended September 30, 2011.

LIQUIDITY

At September 30, 2012, we had total current assets of $0. At September 30, 2012, we had current liabilities of $107,400, for stock to be issued.

During the nine months ended September 30, 2012, we used $76,147 in our operating activities. The Company’s net loss of $134,235 was offset by non-cash item, stock to be issued, of $107,400 and a decrease of $75,333 in accounts payable and the line of credit, both of which were assumed by the Company’s former majority shareholders.

During the nine months ended September 30, 2011, we used $10,101 in our operating activities. During the nine months ended September 30, 2011, net losses of $28,035 were offset by an increase in accounts payable of $17,924.

During the nine months ended September 30, 2012 and 2011, we did not use or receive funds from any investing activities.

During the nine months ended September 30, 2012, the Company’s former majority shareholders assumed liabilities of $75,333. During the year ended September 30, 2011, we did not use or receive funds from financing activities.

Short Term

We currently have cash reserves of $0. If we are unable to generate enough revenue to cover our operational costs, we will need to seek additional sources of funds. Currently, we have no committed source for any funds as of the date hereof. No representation is made that any funds will be available when needed. In the event funds cannot be raised if and when needed, we may not be able to carry out our business plan and could fail in business as a result of these uncertainties.

 

 

Going Concern

The independent registered public accounting firm's report on the Company's financial statements as of December 31, 2011, and for each of the years in the two-year period then ended, includes a "going concern" explanatory paragraph, that describes substantial doubt about the Company's ability to continue as a going concern.

Capital Resources

We have only common stock as our capital resource.

We have no material commitments for capital expenditures within the next year.

 

 

Need for Additional Financing

 

We do not have capital sufficient to meet our cash needs on a long-term basis. Based on our current cash reserves of $0, we have an operational budget of less than three months. If sales do not prove to be sufficient to cover our operational needs, we may have to seek loans or equity placements to cover such cash needs. We are dependent on our majority-shareholder Manu Kumaran to provide operational expenses.

No commitments to provide additional funds have been made by our management or other stockholders. Accordingly, there can be no assurance that any additional funds will be available to us to allow it to cover our expenses as they may be incurred or if needed.

ITEM 3. QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not Applicable

ITEM 4. CONTROLS AND PROCEDURES

Disclosures Controls and Procedures

We have adopted and maintain disclosure controls and procedures (as such term is defined in Rules 13a 15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act, is recorded, processed, summarized and reported within the time periods required under the SEC's rules and forms and that the information is gathered and communicated to our management, including our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), as appropriate, to allow for timely decisions regarding required disclosure.

As required by SEC Rule 15d-15(b), our Chief Executive Officer and Chief Financial Officer, Manu Kumaran, carried out an evaluation under the supervision and with the participation of our management, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 15d-14 as of the quarter ended September 30, 2012. Based on the foregoing evaluation, Manu Kumaran has concluded that our disclosure controls and procedures are effective in timely alerting them to material information required to be included in our periodic SEC filings and to ensure that information required to be disclosed in our periodic SEC filings is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

There was no change in the Company's internal control over financial reporting that occurred during the fiscal quarter ended September 30, 2012, that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.

 

 

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

NONE.

 

ITEM 1A. RISK FACTORS

                  NOT APPLICABLE TO SMALLER REPORTING COMPANIES.

ITEM 2. CHANGES IN SECURITIES

NONE.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES
NONE.

ITEM 4. MINE SAFETY DISCLOSURES

NOT APPLICABLE.

ITEM 5. OTHER INFORMATION

NONE.

ITEM 6. EXHIBITS

 

Exhibits. The following is a complete list of exhibits filed as part of this Form 10-Q. Exhibit numbers correspond to the numbers in the Exhibit Table of Item 601 of Regulation S-K.

 

Exhibit
31.1	Certification of Principal Executive/Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act
32.1	Certification of Principal Executive and Principal Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act

 

 

 

 

 

 

 

 

SIGNATURES

Pursuant to the requirements of Section 12 of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

FAIRWAY PROPERTIES, INC.
(Registrant)

 

Dated: November 19, 2012

By: /s/ Manu Kumaran

Manu Kumaran (Principal
Executive Officer and Principal
Accounting Officer)