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 December 31, 2012
[ ]	Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from __________ to__________
Commission File Number: 000-54434

 

WMX Group Holdings, Inc.

(Exact name of registrant as specified in its charter)

 

Florida	05-0554762
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

 

10 Fairway Drive, Suite 302, Deerfield Beach, FL 33441

(Address of principal executive offices)

 

617.501.6766

(Registrant’s telephone number)

(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 [X] Yes [ ] 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). [X] Yes [ ] 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.

 

[ ] Large accelerated filer	[ ] Accelerated filer
[ ] Non-accelerated filer	[X] Smaller reporting company

 

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

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 792,318,500 as of February 14, 2013 .

 

	TABLE OF CONTENTS
		Page
PART I – FINANCIAL INFORMATION
Item 1:	Financial Statements	3
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	7
Item 4:	Controls and Procedures	7
PART II – OTHER INFORMATION
Item 1:	Legal Proceedings	8
Item 1A:	Risk Factors	8
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	8
Item 3:	Defaults Upon Senior Securities	9
Item 4:	Mine Safety Disclosures	9
Item 5:	Other Information	9
Item 6:	Exhibits	9

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

Our financial statements included in this Form 10-Q are as follows:

 

F-1	Consolidated Balance Sheets as of December 31, 2012 and June 30, 2012 (unaudited);
F-2	Consolidated Statements of Operations for the three and six months ended December 31, 2012 and 2011 and period from Inception (January 18, 2011) to December 31, 2012 (unaudited);
F-3	Consolidated Statements of Cash Flows for the six months ended December 31, 2012 and 2011 and period from Inception (January 18, 2011) to December 31, 2012 (unaudited);
F-4	Notes to Consolidated Financial Statements (unaudited).

 

These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended December 31, 2012 are not necessarily indicative of the results that can be expected for the full year.

WMX GROUP HOLDINGS, INC.

(A Development Stage Company)

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

		December 31,				June 30,
		2012				2012
ASSETS
Current assets:
Cash		$	65,962			$	63,321
Prepaid expenses			21,951				5,000
Total current assets			87,913				68,321
Property and equipment, net			18,329				2,200
Total assets		$	106,242			$	70,521
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities
Accounts payable and accrued liabilities		$	29,516			$	278,406
Officer compensation payable			1,194				31,352
Due to related parties			—				587,742
Total current liabilities			30,710				897,500
Stockholders' equity (deficit):
Preferred stock: $0.0001 par value; authorized 30,000,000 shares; issued and outstanding: 0 and 0, respectively			—				—
Series A convertible preferred stock: $0.0001 par value; authorized 10,000,000 shares; issued and outstanding: 10,000,000 and 0, respectively			1,000				—
Common stock: $0.0001 par value; authorized 1,800,000,000 shares; issued and outstanding: 792,318,500, and 1,544,367,100, respectively			79,232				154,437
Additional paid-in capital			3,176,751				156,602
Stock payable			184,000				218,824
Deficit accumulated during the development stage			(3,365,451	)			(1,356,842	)
Total stockholders' equity (deficit)			75,532				(826,979	)
Total liabilities and stockholders' equity (deficit)		$	106,242			$	70,521

 

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

WMX GROUP HOLDINGS, INC.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

		For the three months ended December 31, 2012				For the three months ended December 31, 2011				For the six months ended December 31, 2012				For the six months ended December 31, 2011				Period from Inception (January 18, 2011) to December 31, 2012
Revenue		$	49,950			$	—			$	51,450			$	—			$	51,548
Operating expenses:
General and administrative			63,118				20,272				73,367				36,826				217,552
Amortization			—				—				—				—				496
Depreciation			1,168				299				1,547				599				2,987
Impairment of fixed assets and intangible assets			—				—				—				—				1,488
Software development			905				15,570				1,000				50,924				102,464
Officer compensation			87,447				62,500				212,447				125,000				594,434
Professional fees			36,928				37,901				65,062				38,401				234,378
Sub-licensing expense			—				—				—				—				10,000
Professional stock-based fees			600,000				200,000				600,000				200,000				1,101,564
Finance expense			—				—				—				—				25,000
Allowance on subscription receivable			—				—				—				—				20,000
(Gain) loss on extinguishment of accounts payable and due to related parties			(22,992	)			—				1,106,636				—				1,106,636
Total operating expenses			766,574				336,542				2,060,059				451,750				3,416,999
Loss before income taxes			(716,624	)			(336,542	)			(2,008,609	)			(451,750	)			(3,365,451	)
Provision for income taxes			—				—				—				—				—
Net loss		$	(716,624	)		$	(336,542	)		$	(2,008,609	)		$	(451,750	)		$	(3,365,451	)
Basic loss per common share		$	(0.00	)		$	(0.00	)		$	(0.00	)		$	(0.00	)
Basic weighted average common shares outstanding			1,486,753,282				545,600,642				1,537,624,087				542,159,961

 

 

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

WMX GROUP HOLDINGS, INC.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

		For the six months ended December 31, 2012				For the six months ended December 31, 2011				Period from Inception (January 18, 2011) to December 31, 2012
Cash flows from operating activities:
Net loss		$	(2,008,609	)		$	(451,750	)		$	(3,365,451	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation			1,547				599				2,987
Amortization			—				—				496
Impairment of fixed assets and intangible assets			—				—				1,488
Shares issued to officer and majority shareholder			—				—				1,100
Professional stock-based fees			600,000				200,000				1,101,564
Expenses paid by related party			—				28,083				—
Finance expense			—				—				25,000
Loss on extinguishment accounts payable and due to related party			1,106,636				—				1,106,636
Changes in operating assets and liabilities:
Increase in prepaid expense			(16,951	)			—				(21,951	)
(Decrease) Increase in officer compensation payable			(30,158	)			125,000				294,842
(Decrease) Increase in accounts payable and accrued liabilities			(43,148	)			2,000				15,245
Increase in due to related parties			—				—				318,024
Net cash used in operating activities			(390,683	)			(96,068	)			(520,020	)
Cash flows from investing activities:
Purchase of fixed assets			(17,676	)			(569	)			(21,316	)
Cash received from reverse acquisition of Smart Kids Group, Inc.			—				—				11,701
Net cash provided by (used in) investing activities			(17,676	)			(569	)			(9,615	)
Cash flows from financing activities:
Proceeds from issuance of stock			411,000				234,768				1,200,851
Advances by related party			—				60,314				58,750
Payments to related party			—				(190,250	)			(664,004	)
Net cash provided by financing activities			411,000				104,832				595,597
Net change in cash			2,641				8,195				65,962
Cash, beginning of period			63,321				77				—
Cash, end of period		$	65,962			$	8,272			$	65,962
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest		$	—			$	—			$	—
Cash paid for taxes		$	—			$	—			$	—
Non-cash investing and financing activities:
Proceeds from issuance of stock received by related party		$	—			$	—			$	369,703
Prepaid stock-based expenses acquired with the merger		$	—			$	—			$	297,064
Deferred finance expenses acquired with the merger		$	—			$	—			$	25,000
Fixed assets acquired with the merger		$	—			$	—			$	1,984
Accounts payable assumed with the merger		$	—			$	—			$	(220,013	)
Due to related party assumed with the merger		$	—			$	—			$	(581,524	)
Stock payable assumed with the merger		$	—			$	—			$	(87,453	)
Stock issued for accounts payable		$	1,042,620			$	—			$	1,042,620
Stock issued for due to related parties		$	857,500			$	—			$	857,500

 

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

WMX GROUP HOLDINGS, INC.

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

1. DESCRIPTION OF BUSINESS AND HISTORY

 

Description of business – WMX Group Holdings, Inc., (the "Company" or "WMX") was incorporated on February 11, 2003 in the State of Florida as Smart Kids Group, Inc. On June 11, 2012, the Company changed its name from Smart Kids Group, Inc. to WMX Holdings Group, Inc. The Company has a fiscal year end of June 30.

 

The Company is currently in the development stage as defined in Financial Accounting Standards Board ("FASB") Accounting Standard Codification ("ASC") 915. All activities of the Company to September 30, 2012 relate to its organization, share issuances for services and cash and the development of software platforms for e-commerce trade. Commencing on October 1, 2012, the Company started to implement its WMX Executive Training Program Strategic Action Plan. Currently, the Company is offering an Executive Education Certificate Program in Financial Planning. In order to facilitate the Strategic Action Plan, WMX has incorporated three wholly owned subsidiaries; CIT Cambridge Institute of Technology Christian University, Inc., WMX Wealth Advisors, LLC and WMX Insurance Group, Inc.

 

2. BASIS OF PREPARATION 

 

Pursuant to the rules and regulations of the Securities and Exchange Commission for Form 10-Q, the consolidated financial statements, footnote disclosures and other information normally included in consolidated financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. The consolidated financial statements contained in this report are unaudited but, in the opinion of management, reflect all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of the consolidated financial statements. All significant inter-company accounts and transactions have been eliminated in consolidation. The results of operations for any interim period are not necessarily indicative of results for the full year. The consolidated balance sheet at March 31, 2012 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Management reviews these estimates and assumptions on an ongoing basis using currently available information. Actual results could differ from those estimates.

 

Consolidation – The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All inter-company balances and transactions have been eliminated. The Company and its subsidiaries will be collectively referred to herein as the “Company”.

 

Use of estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. These estimates and judgments are based on historical information, information that is currently available to the Company and on various other assumptions that the Company believes to be reasonable under the circumstances. Actual results could differ from those estimates.

 

Cash and cash equivalents – Cash and cash equivalents consist of cash and short-term investments with original maturities of less than 90 days. Cash equivalents are placed with high credit quality financial institutions and are primarily in money market funds. The carrying value of those investments approximates fair value.

 WMX GROUP HOLDINGS, INC.

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

2. BASIS OF PREPARATION (CONTINUED)

 

Revenue Recognition – Revenue is only recognized when all of the following criteria are met: (1) persuasive evidence of an arrangement exists, (2) delivery has occurred or services have been rendered, (3) the price to the buyer is fixed or determinable, and (4) collectability is reasonably assured. Executive Training Program revenue is recognized as the services are performed.

 

Earnings (loss) per share – Basic earnings (loss) per common share is computed by dividing net income (loss) available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per common share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if potentially dilutive securities had been issued. There were no potentially dilutive securities outstanding during the periods presented.

 

Stock-based compensation – The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 718-10 and the conclusions reached by the FASB ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by FASB ASC 505-50.

 

Fair value of financial instruments - The Company's financial instruments consist of cash, accounts payable, accrued liabilities, advances, notes payable, and a loan payable. The carrying amount of these financial instruments approximates fair value due to either length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.

 

Concentration of credit risk – Financial instruments that potentially expose the Company to significant concentrations of credit risk consist principally of cash. The Company places its cash with financial institutions with high-credit ratings.

 

Recent Accounting Pronouncements – The Company has evaluated recent pronouncements through Accounting Standards Updates “ASU” 2012-07 and believes that none of them will have a material impact on the Company’s financial position, results of operations or cash flows.

 

3. GOING CONCERN

 

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred losses since inception and has a cumulative retained deficit of $3,365,451 as of December 31, 2012. The Company requires capital for its contemplated operational and marketing activities. The Company’s ability to raise additional capital through the future issuances of common stock is unknown. The obtainment of additional financing, the successful development of the Company’s contemplated plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. The ability to successfully resolve these factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements of the Company do not include any adjustments that may result from the outcome of these aforementioned uncertainties.

 

In order to mitigate the risk related with this uncertainty, the Company plans to issue additional shares of common stock for cash and services during the next 12 months.

WMX GROUP HOLDINGS, INC.

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

4. STOCKHOLDERS’ EQUITY

 

Preferred Stock – The Company is authorized to issue 30,000,000 shares of $.0001 par value preferred stock. As of December 31, 2012 and June 30, 2012, no shares of preferred stock have been issued.

 

On December 3, 2012, the Company filed an Articles of Amendment to the Articles of Incorporation with the Secretary of State of the State of Florida (the “Certificate of Designation”) setting forth the rights and preferences of the Corporation’s newly created Series A Convertible Preferred Stock. Among other things, the Certificate of Designation (i) authorizes ten million (10,000,000) shares of the Corporation’s preferred stock to be designated as “Series A Convertible Preferred Stock”; (ii) provides that the holders of Series A Convertible Preferred Stock shall have the right to cast one hundred (100) votes for each share held of record on all matters submitted to a vote of holders of the Corporation’s common stock;  (iii) and provides that any one (1) share of Series A Convertible Preferred Stock shall be convertible into one hundred (100) shares of the Corporation’s common stock, par value $.0001 per share.

 

Common Stock - The Company is authorized to issue 1,800,000,000 shares of $.0001 par value common stock. As of December 31, 2012 and June 30, 2012, 792,318,500 and 1,544,367,100 shares were issued and outstanding.

 

On October 1, 2012, the Company agreed to issue pursuant to its 2012 Equity Incentive Plan 20,000,000 shares of common stock valued at $300,000 ($0.015 per share) for consulting services.

 

On October 3, 2012, the Company received $4,000 in cash in exchange for a common stock payable of 5,000,000 shares of common stock ($0.0008 per share).

 

On October 5, 2012, the Company received $10,000 in cash in exchange for a common stock payable of 5,000,000 shares of common stock ($0.0020 per share).

 

On October 23, 2012, the Company issued 24,000,000 of common stock to satisfy obligations under share subscription agreements for $64,006 and $2,130 in cash and services received, respectively. The obligation included $52,136 in the stock payable as of September 30, 2012 and $14,000 from the transactions noted above.

 

On October 23, 2012, the Company issued 20,000,000 shares of common stock to Richard Shergold, the former CEO of the Company, for consideration to waive his 1% non-dilutive provision to maintain 1% equity at all times of WMX Group Holdings, Inc.

 

On December 3, 2012, the Company issued 336,982,034 shares of common stock to the CEO and the majority shareholder for anti-dilution protection. This transaction has been recorded retroactively similar to a stock split since the shares were issued with no corresponding consideration.

 

On December 3, 2012, the Corporation issued 10,000,000 shares of Series A Convertible Preferred Stock to Thomas Guerriero, the Corporation’s CEO and Director, in exchange for 1,000,000,000 shares of his common stock in the Corporation and the waiver of his 95% non-dilutive provision to maintain 95% equity at all times of the Corporation’s common stock.

 

On December 11, 2012, the Company agreed to issue pursuant to its 2012 Equity Incentive Plan 20,000,000 shares of common stock valued at $300,000 ($0.015 per share) for consulting services.

 

Stock Payable

 

On October 2, 2012, the Company received $15,000 in cash in exchange for a common stock payable of 60,000 shares of common stock ($0.25 per share).

WMX GROUP HOLDINGS, INC.

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

4. STOCKHOLDERS’ EQUITY (CONTINUED)

 

On October 2, 2012, the Company received $6,000 in cash in exchange for a common stock payable of 600,000 shares of common stock ($0.01 per share).

 

On November 2, 2012, the Company received $6,000 in cash in exchange for a common stock payable of 600,000 shares of common stock ($0.01 per share).

 

On November 16, 2012, the Company received $50,000 in cash in exchange for a common stock payable of 50,000 shares of common stock ($1.00 per share).

 

On November 20, 2012, the Company received $9,000 in cash in exchange for a common stock payable of 900,000 shares of common stock ($0.01 per share).

 

On December 12, 2012, the Company received $10,000 in cash in exchange for a common stock payable of 2,000,000 shares of common stock ($0.005 per share).

 

On December 19, 2012, the Company received $15,000 in cash in exchange for a common stock payable of 3,000,000 shares of common stock ($0.005 per share).

 

On December 26, 2012, the Company received $50,000 in cash in exchange for a common stock payable of 10,000,000 shares of common stock ($0.005 per share).

 

On December 31, 2012, the Company received $15,000 in cash in exchange for a common stock payable of 3,000,000 shares of common stock ($0.005 per share).

 

On December 31, 2012, the Company received $3,000 in cash in exchange for a common stock payable of 300,000 shares of common stock ($0.01 per share).

 

5. Related Party transactions

 

Employment –On July 1, 2012, the board approved that the Company will compensate the Chief Executive Officer a base salary of $500,000 per annum. The total expense related to this agreement was $208,334 and $125,000 for the six months ended December 31, 2012 and 2011, respectively; and $83,334 and $62,500 for the three months ended December 31, 2012 and 2011, respectively. This agreement was terminated on November 30, 2012.

 

On December 1, 2012, the Company executed a consulting agreement (the “Agreement”) with GCE Wealth, Inc. (“GCE”), a company controlled by our CEO, Mr. Thomas Guerriero. Pursuant to the terms and conditions of the Agreement, among other things GCE will act as our consultant through December 2015 and GCE will receive $950 per hour for services rendered. The total expense related to this agreement was $4,114 and $0 for six months and three months ended December 31, 2012 and 2011, respectively.

 

As of December 31, 2012 and June 30, 2012, $1,194 and $31,352 of total officer compensation was unpaid and recorded as payable, respectively.

 

6. SUBSEQUENT EVENTS 

 

During the month of January 2013, the Company received $126,591 in cash in exchange for a common stock payable of 25,318,190 shares of common stock ($0.005 per share).

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Forward-Looking Statements

 

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.

 

Company Overview

 

We were formed on February 11, 2003, as a Florida corporation, to market and distribute children’s television shows, videos and books. On April 30, 2012, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with WMX Group, Inc., a Nevada corporation (“WMX”) and SKGI Acquisition Corp., a Nevada corporation and wholly-owned subsidiary of our company (“Acquisition Sub”), pursuant to which Acquisition Sub merged with and into WMX (the “Merger”) with the filing of the Articles of Merger with the Nevada Secretary of State on May 1, 2012 and became a wholly-owned subsidiary of our company.

 

We intend to carry on the business of WMX, as our only line of business. We provide online platforms and services across a plethora of industries, consistently adding WMX divisions to our portfolio to expand our opportunities to generate revenue.

 

Commencing on October 1, 2012, the Company started to implement its WMX Executive Training Program Strategic Action Plan. Currently, the Company is offering an Executive Education Certificate Program in Financial Planning. In order to facilitate the Strategic Action Plan, WMX has incorporated three wholly owned subsidiaries; CIT Cambridge Institute of Technology Christian University, Inc., WMX Wealth Advisors, LLC and WMX Insurance Group, Inc.

 

Our principal executive offices are at 10 Fairway Drive, Suite 302, Deerfield Beach, FL 33441 and our telephone number is now 617.501.6766.

Results of operations for the three and six months ended December 31, 2012 and December 31, 2011, and for the period from Inception (January 18, 2011) to December 31, 2012

 

Our operating results for the three and six months ended December 31, 2012 and December 31, 2011 are summarized as follows:

 

		Three Months Ended				Three Months Ended				Six Months Ended				Six Months Ended
		December 31, 2012				December 31, 2011				December 31, 2012				December 31, 2011
Revenue		$	49,950			$	0			$	51,450			$	0
Operating Expenses			766,574				336,542				2,060,059				451,750
Net Loss		$	716,624			$	336,542			$	2,008,609			$	451,750

 

Revenues

 

We are a development stage company and have generated nominal revenues of $51,548 from inception (January 18, 2011) to December 31, 2012. We do not anticipate significant revenues until we have completed and successfully sold our products and services in the market.

 

Expenses

 

Our expenses for the three and six months ended December 31, 2012 and December 31, 2011 are outlined in the table below:

 

		Three Months Ended				Three Months Ended				Six Months Ended				Six Months Ended
		December 31, 2012				December 31, 2011				December 31, 2012				December 31, 2011
General and administrative		$	63,118			$	20,272			$	73,367			$	36,826
Depreciation			1,168				299				1,547				599
Software development			905				15,570				1,000				50,924
Officer compensation			87,447				62,500				212,447				125,000
Professional fees			36,928				37,901				65,062				38,401
Professional stock-based fee			600,000				200,000				600,000				200,000
(Gain) loss on extinguishment of accounts payable and due to related parties			(22,992	)			—				1,106,636				—
Total		$	766,574			$	336,542			$	2,060,059			$	451,750

 

Our operating expenses increased by $430,032 and $1,608,309 for the three and six months ended December 31, 2012 as compared with the three and six months ended December 31, 2011. Our large increase in operating expenses is largely attributable to general and administrative, officer compensation, professional stock-based fees and loss on extinguishment of accounts payable and due to related parties.

 

We anticipate that we will incur approximately $52,000 for operating expenses, including, legal, accounting and audit expenses associated with our reporting requirements as a public company under the Exchange Act during the next twelve months.

Net Loss

 

We recorded a net loss of $716,624 and $2,008,609 for the three and six months ended December 31, 2012, as compared with $336,542 and $451,750 for the three and six months ended December 31, 2011. We have incurred losses since inception and have a cumulative retained deficit of $3,365,451 as of December 31, 2012.

 

Liquidity And Capital Resources

 

Working Capital

 

		December 31, 2012				June 30, 2012
Current Assets		$	87,913			$	68,321
Current Liabilities		$	30,710			$	897,500
Working Capital (Deficit)		$	57,203			$	(829,179	)

 

Cash Flows

 

		Six Months Ended December 31, 2012				Six Months Ended December 31, 2011
Cash used in Operating Activities		$	(390,683	)		$	(96,068	)
Cash used in Investing Activities		$	(17,676	)		$	(569	)
Cash provided by Financing Activities		$	411,000			$	104,832
Increase (Decrease) in Cash		$	2,641			$	8,195

 

Cash Used In Operating Activities

 

Our net loss for the six months ended December 31, 2012 was the main contributing factor for our negative operating cash flow, offset mainly by the loss on the extinguishment of accounts payable and due to related parties of $1,106,636.

 

Cash from Financing Activities

 

We generated $411,000 in cash from the issuance of common stock during the six months ended December 31, 2012.

 

As of December 31, 2012, we have insufficient cash to operate our business at the current level for the next twelve months and insufficient cash to achieve our business goals. The success of our business plan beyond the next 12 months is contingent upon us obtaining additional financing. We intend to fund operations through debt and/or equity financing arrangements, which may be insufficient to fund our capital expenditures, working capital, or other cash requirements. We do not have any formal commitments or arrangements for the sales of stock or the advancement or loan of funds at this time. There can be no assurance that such additional financing will be available to us on acceptable terms, or at all.

 

Off Balance Sheet Arrangements

 

As of December 31, 2012, there were no off balance sheet arrangements.

Going Concern

 

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We have incurred losses since inception and have a cumulative retained deficit of $3,365,451 as of December 31, 2012. We require capital for our contemplated operational and marketing activities. Our ability to raise additional capital through the future issuances of common stock is unknown. The obtainment of additional financing, the successful development of our contemplated plan of operations, and our transition, ultimately, to the attainment of profitable operations are necessary for us to continue operations. The ability to successfully resolve these factors raise substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustments that may result from the outcome of these aforementioned uncertainties.

 

In order to mitigate the risk related with this uncertainty, we plan to issue additional shares of common stock for cash and services during the next 12 months.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

A smaller reporting company is not required to provide the information required by this Item.

 

Item 4. Controls and Procedures

 

Disclosure Controls and Procedures

 

As required by Rule 13a-15 of the Securities Exchange Act of 1934, our principal executive officer and principal financial officer evaluated our company's disclosure controls and procedures (as defined in Rules 13a-15(e) of the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer concluded that as of the end of the period covered by this report, these disclosure controls and procedures were not effective to ensure that the information required to be disclosed by our company in reports it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities Exchange Commission and to ensure that such information is accumulated and communicated to our company's management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. The conclusion that our disclosure controls and procedures were not effective was due to the presence of the following material weaknesses in internal control over financial reporting which are indicative of many small companies with small staff: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both United States generally accepted accounting principles and Securities and Exchange Commission guidelines. Management anticipates that such disclosure controls and procedures will not be effective until the material weaknesses are remediated.

 

We plan 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 June 30, 2013, subject to obtaining additional financing: (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 above are largely dependent upon our 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 affected 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 quarter ended December 31, 2012 that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting.

 

PART II – OTHER INFORMATION

 

Item 1. Legal Proceedings

 

We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.

 

Item 1A: Risk Factors

 

A smaller reporting company is not required to provide the information required by this Item.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

We incurred the following stock transactions during this quarter and thereafter:

 

On October 3, 2012, the Company received $4,000 in cash in exchange for a common stock payable of 5,000,000 shares of common stock ($0.0008 per share).

 

On October 5, 2012, the Company received $10,000 in cash in exchange for a common stock payable of 5,000,000 shares of common stock ($0.0020 per share).

 

On October 23, 2012, the Company issued 24,000,000 of common stock to satisfy obligations under share subscription agreements for $64,006 and $2,130 in cash and services received, respectively. The obligation included $52,136 in the stock payable as of September 30, 2012 and $14,000 from the transactions noted above.

 

On October 23, 2012, the Company issued 20,000,000 shares of common stock to Richard Shergold, the former CEO of the Company, for consideration to waive his 1% non-dilutive provision to maintain 1% equity at all times of WMX Group Holdings, Inc.

 

On December 3, 2012, the Company issued 336,982,034 shares of common stock to the CEO and the majority shareholder for anti-dilution protection. This transaction has been recorded retroactively similar to a stock split since the shares were issued with no corresponding consideration.

 

On December 3, 2012, the Corporation issued 10,000,000 shares of Series A Convertible Preferred Stock to Thomas Guerriero, the Corporation’s CEO and Director, in exchange for 1,000,000,000 shares of his common stock in the Corporation and the waiver of his 95% non-dilutive provision to maintain 95% equity at all times of the Corporation’s common stock.

On December 3, 2012, we filed Articles of Amendment to the Articles of Incorporation with the Secretary of State of the State of Florida (the “Certificate of Designation”) setting forth the rights and preferences of our newly created Series A Convertible Preferred Stock. Among other things, the Certificate of Designation (i) authorizes ten million four hundred and fifty thousand (10,000,000) shares of our preferred stock to be designated as “Series A Convertible Preferred Stock”; (ii) provides that the holders of Series A Convertible Preferred Stock shall have the right to cast one hundred (100) votes for each share held of record on all matters submitted to a vote of holders of our common stock; (iii) and provides that any one (1) share of Series A Convertible Preferred Stock shall be convertible into one hundred (100) shares of our common stock, par value $.0001 per share.

 

Unless otherwise indicated, these securities were issued pursuant to Section 4(2) of the Securities Act and/or Rule 506 promulgated thereunder. The holders represented their intention to acquire the securities for investment only and not with a view towards distribution. The investors were given adequate information about us to make an informed investment decision. We did not engage in any general solicitation or advertising. We directed our transfer agent to issue the stock certificates with the appropriate restrictive legend affixed to the restricted stock.

 

Item 3. Defaults upon Senior Securities

 

None

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information

 

None

 

Item 6. Exhibits

 

Exhibit Number	Description of Exhibit
31.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101**	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2012 formatted in Extensible Business Reporting Language (XBRL).

 

**Provided herewith

SIGNATURES

 

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

 

	WMX GROUP HOLDINGS, INC.
Date:	February 14, 2013   By: /s/ Thomas Guerriero Thomas Guerriero Title: Chief Executive Officer and Director
Date:	February 14, 2013   By: /s/ Philip Clark Philip Clark Title: Chief Financial Officer