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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

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

For the quarter ended December 31, 2013
 
o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission file number: 333-176581

YOUR INTERNET DEFENDER INC.
(Exact name of registrant as specified in its charter)

Nevada
 
30-0687898
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)

c/o Lisa Grossman
20 East Sunrise Highway
Suite 202
Valley Stream, New York 11581
(Address of principal executive offices)

(516) 303- 8199
(Registrant’s telephone number, including area code)

Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the issuer (1) 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 such filing requirements for the past 90 days. Yes x No o

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 o

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.

Large accelerated filer 
o
Accelerated filer
o
Non-accelerated filer
o
Smaller reporting company 
x
(Do not check if a smaller reporting company)
   
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
 
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of February 13, 2014, 52,000,000 shares of common stock, par value $0.0001 per share, were issued and outstanding.



 
 

 
 
TABLE OF CONTENTS

     
Page
 
PART I FINANCIAL INFORMATION
     
         
Item 1.
Financial Statements
    F-1  
           
 
Condensed Balance Sheet As Of December 31, 2013 (Unaudited) And March 31, 2013 (Audited)
    F-1  
           
 
Condensed Statements Of Operations (Unaudited) For The Three Months Ended December 31, 2013, Three Months Ended December 31, 2012 And For The Period From May 4, 2011 (Inception) Through December 31, 2013
    F-2  
           
 
Condensed Statements Of Changes In Stockholders’ Equity (Unaudited) For The Period From May 4, 2011 (Inception) Through December 31, 2013
    F-3  
           
 
Condensed Statement Of Cash Flow (Unaudited) For The Three Months Ended December 31, 2013, Three Months Ended December 31, 2012 And For The Period From May 4, 2011 (Inception) Through December 31, 2013.
    F-4  
           
 
Notes to Condensed Financial Statements (Unaudited)
    F-5 - F-9  
           
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
    3  
           
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
    7  
           
Item 4.
Controls and Procedures
    8  
           
PART II OTHER INFORMATION
       
           
Item 1.
Legal Proceedings
    9  
           
Item 1A.
Risk Factors
    9  
           
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
    9  
           
Item 3.
Defaults Upon Senior Securities
    9  
           
Item 4.
Mine Safety Disclosures
    9  
           
Item 5.
Other Information
    9  
           
Item 6.
Exhibits
    10  

 
2

 
 
PART I
FINANCIAL INFORMATION

Item 1. Financial Statements.
 
Your Internet Defender, Inc.
(A Development Stage Company)
Balance Sheets
 
   
December 31,
2013
   
March 31,
2013
 
   
(Unaudited)
       
ASSETS
           
CURRENT ASSETS:
           
Cash
  $ -     $ -  
Accounts receivable
    350       40,656  
Prepaid expenses
    -       312  
                 
Total Current Assets
    350       40,968  
                 
OTHER ASSETS:
               
Website development costs, net
    5,293       12,031  
Security deposit
    325       325  
                 
Total Other Assets
    5,618       12,356  
                 
Total Assets   $ 5,968     $ 53,324  
                 
LIABILITIES AND STOCKHOLDERS' DEFICIT
               
CURRENT LIABILITIES:
               
Bank overdraft
  $ 534     $ 3,636  
Notes payable - related party
    118,982       43,500  
Accounts payable
    -       3,555  
Accrued expenses and other current liabilities
    206,761       117,095  
                 
Total Current Liabilities
    326,277       167,786  
                 
Total Liabilities     326,277       167,786  
                 
STOCKHOLDERS' DEFICIT:
               
Preferred stock par value $0.0001: 1,000,000 shares authorized;
               
none issued or outstanding
    -       -  
Common stock par value $0.0001: 150,000,000 shares authorized;
               
52,000,000 shares issued and outstanding
    5,200       5,200  
Additional paid-in capital
    129,840       122,040  
Deficit accumulated during the development stage
    (455,349 )     (241,702 )
                 
Total Stockholders' Deficit
    (320,309 )     (114,462 )
                 
Total Liabilities and Stockholders' Deficit   $ 5,968     $ 53,324  
 
See accompanying notes to the financial statements
 
 
F-1

 
 
Your Internet Defender, Inc.
(A Development Stage Company)
Statements of Operations
 
   
For the Three Months
   
For the Three Months
   
For the Nine
Months
   
For the Nine
Months
   
For the Period from
May 4, 2011(inception)
 
   
Ended
   
Ended
   
Ended
   
Ended
   
through
 
   
December 31,
2013
   
December 31,
2012
   
December 31,
2013
   
December 31,
2012
   
December 31,
2013
 
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
 
                               
Net revenues earned during the development stage
  $ 3,900     $ 54,664     $ 32,384     $ 110,046     $ 359,301  
                                         
Cost of revenues
    5,839       62,690       53,605       145,017       389,070  
                                         
Gross Margin
    (1,939 )     (8,026 )     (21,221 )     (34,971 )     (29,769 )
                                         
Operating expenses
                                       
Compensation expense
    2,600       2,600       7,800       7,800       27,600  
Consulting fees - related party
    36,000       -       108,000       12,000       156,000  
General and administrative
    7,407       14,586       63,244       56,405       225,389  
                                         
Total operating expenses
    46,007       17,186       179,044       76,205       408,989  
                                         
Loss from operations
    (47,946 )     (25,212 )     (200,265 )     (111,176 )     (438,758 )
                                         
OTHER (INCOME) EXPENSE:
                                       
Interest expense
    3,973       184       13,382       634       16,591  
                                         
Other (income) expense, net
    3,973       184       13,382       634       16,591  
                                         
Loss before income tax provision
    (51,919 )     (25,396 )     (213,647 )     (111,810 )     (455,349 )
                                         
Income tax provision
    -       -       -       -       -  
                                         
Net loss
  $ (51,919 )   $ (25,396 )   $ (213,647 )   $ (111,810 )   $ (455,349 )
                                         
Net loss per common share
                                       
- Basic and diluted:
  $ (0.00 )   $ (0.00 )   $ (0.00 )   $ (0.00 )        
                                         
Weighted average common shares outstanding
                                       
- basic and diluted
    52,000,000       52,000,000       52,000,000       52,000,000          
 
See accompanying notes to the financial statements
 
 
F-2

 
 
Your Internet Defender, Inc.
(A Development Stage Company)
Statement of Stockholders' Equity (Deficit)
For the Period from May 4, 2011 (Inception) through December 31, 2013
(Unaudited)

   
Common Stock Par
Value $0.0001
   
Additional
   
Deficit
Accumulated
during the
   
Total
Stockholders'
 
   
Number of
Shares
   
Amount
   
Paid-in
Capital
   
Development
Stage
   
Equity
(Deficit)
 
                               
Balance, May 4, 2011 (inception)
    -       -       -       -       -  
                                         
Sale of common stock to Founders at $0.0001 per share
    9,400,000       940       -               940  
                                         
Sale of common stock in private placement at $0.0025 per share
    42,600,000       4,260       102,240               106,500  
                                         
Non cash compensation
                    9,400               9,400  
                                         
Net loss
                            (51,864 )     (51,864 )
                                         
Balance, March 31, 2012
    52,000,000       5,200       111,640       (51,864 )     64,976  
                                         
Non cash compensation
                    10,400               10,400  
                                         
Net loss
                            (189,838 )     (189,838 )
                                         
Balance, March 31, 2013
    52,000,000       5,200       122,040       (241,702 )     (114,462 )
                                         
Non cash compensation
                    7,800               7,800  
                                         
Net loss
                            (213,647 )     (213,647 )
                                         
Balance, December 31, 2013
    52,000,000     $ 5,200     $ 129,840     $ (455,349 )   $ (320,309 )
 
See accompanying notes to the financial statements
 
 
F-3

 
 
Your Internet Defender, Inc.
 (A Development Stage Company)
 Statements of Cash Flows
 
   
For the Nine
Months
   
For the Nine
Months
   
For the Period from
May 4, 2011(inception)
 
   
Ended
   
Ended
   
 through
 
   
December 31,
2013
   
December 31,
2012
   
December 31,
2013
 
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
 
                         
CASH FLOWS FROM OPERATING ACTIVITIES:
                       
Net loss
 
 $
                 (213,647)
   
 $
                 (111,810)
   
 $
                 (455,349)
 
                         
Adjustments to reconcile net loss to net cash used in operating activities
   
Amortization
   
                       6,738
     
                       6,738
     
                     21,657
 
In-kind compensation
   
                       7,800
     
                       7,800
     
                     27,600
 
Changes in operating assets and liabilities:
                       
Accounts receivable
   
                     40,306
     
                     (6,572)
     
                        (350)
 
Prepaid expenses
   
                          312
     
                        (950)
     
                               -
 
Security deposit
   
                               -
     
                               -
     
                        (325)
 
Bank overdraft
   
                     (3,102)
     
                       4,022
     
                          534
 
Accounts payable
   
                     (3,555)
     
                       1,406
     
                               -
 
Accrued expenses and other current liabilities
   
                     89,666
     
                     23,766
     
                   206,761
 
                         
NET CASH USED IN OPERATING ACTIVITIES
   
                   (75,482)
     
                   (75,600)
     
                 (199,472)
 
                         
CASH FLOWS FROM INVESTING ACTIVITIES:
                       
Website development costs
   
                               -
     
                               -
     
                   (26,950)
 
                         
NET CASH USED IN INVESTING ACTIVITIES
   
                               -
     
                               -
     
                   (26,950)
 
                         
CASH FLOWS FROM FINANCING ACTIVITIES:
                       
Proceeds from sale of common stock
   
                               -
     
                               -
     
                   107,440
 
Proceeds from notes payable-related party
   
                     75,482
     
                     27,000
     
                   141,482
 
Repayments to notes payable-related party
   
                               -
     
                               -
     
                   (22,500)
 
                         
NET CASH PROVIDED BY FINANCING ACTIVITIES
   
                     75,482
     
                     27,000
     
                   226,422
 
                         
NET CHANGE IN CASH
   
                               -
     
                   (48,600)
     
                               -
 
                         
Cash at beginning of period
   
                               -
     
                     48,600
     
                               -
 
                         
Cash at end of period
 
 $
                               -
   
 $
                               -
   
 $
                               -
 
                         
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
 
Interest paid
 
 $
                               -
   
 $
                               -
   
 $
                       2,009
 
Income tax paid
 
 $
                               -
   
 $
                               -
   
 $
                               -
 
 
See accompanying notes to the financial statements

 
F-4

 
 
YOUR INTERNET DEFENDER, INC
(A DEVELOPMENT STAGE COMPANY)
DECEMBER 31, 2013
NOTES TO THE FINANCIAL STATEMENTS
(UNAUDITED)
 
NOTE 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
Organization
 
Your Internet Defender, Inc. (the “Company”) was incorporated under the laws of the State of Nevada on May 4, 2011. The Company provides online brand management, focusing on offsite search engine optimization (“SEO”), social media reputation monitoring, and specialized brand reputation marketing and is in the final stages of developing a software application that allows small to medium sized businesses to automate the process of search engine optimization to optimize their websites, product and service offerings and brand image. The Company expects to launch this application in June 2014.
 
Development Stage Company
 
The Company is a development stage company as defined by section 915-10-20 of the FASB Accounting Standards Codification. Although the Company has recognized some nominal amount of revenues since inception, the Company is still devoting substantially all of its efforts on establishing the business and, therefore, still qualifies as a development stage company. All losses accumulated since inception have been considered as part of the Company’s development stage activities.
 
Use of Estimates and Assumptions
 
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that could affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Actual results could differ from those estimates.
 
Cash and Cash Equivalents
 
For purposes of the cash flow statements, the Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents.
 
Revenue Recognition
 
The Company recognizes revenue in accordance with FASB ASC No. 985-605, “Revenue Recognition”. In all cases, revenue is recognized as the services are performed and when the price is fixed and determinable, persuasive evidence of an arrangement exists, and collectability of the resulting receivable is reasonably assured. For services where the Company does not have a contract, revenue is generally recognized when the services are performed and accepted by the customer and the amounts are earned and collection is reasonably assured. Revenue under contract agreements where there is a fixed term of service is recognized over the straight line method over the term of the agreement.
 
Accounts Receivable and Allowance for Doubtful Accounts
 
Accounts receivable consist of trade receivables recorded at original invoice amount, less an estimated allowance for uncollectible accounts. Trade credit is generally extended on a short-term basis; thus, trade receivables do not bear interest, although finance charges may be applied to receivables that are past due. Trade receivables are periodically evaluated for collectability based on past credit history with customers and their current financial condition. Changes in the estimated collectability of trade receivables are recorded in the results of operations for the period in which the estimate is revised.
 
The Company does not have any off-balance-sheet credit exposure to its customers.
 
Website Development Costs
 
The Company capitalizes its costs to develop its website and internal-use software when preliminary development efforts are successfully completed, management has authorized and committed project funding, and it is probable that the project will be completed and the software will be used as intended. Such costs are amortized on a straight-line basis over the estimated useful life of three years. Costs incurred prior to meeting these criteria, together with costs incurred for training and maintenance, are expensed as incurred.
 
 
F-5

 
 
YOUR INTERNET DEFENDER, INC
(A DEVELOPMENT STAGE COMPANY)
DECEMBER 31, 2013
NOTES TO THE FINANCIAL STATEMENTS
(UNAUDITED)
 
As of December 31, 2013, the Company capitalized $26,950 of website development costs. Amortization expense for the three months ended December 31, 2013 and 2012 amounted to $2,246 and $2,246, respectively.
 
Income Tax Provision
 
The Company accounts for income taxes under FASB Codification Topic 740-10-25 (“ASC 740-10-25”). Under ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
 
Fair Value of Financial Instruments
 
The carrying amount of the Company's accounts receivable, accounts payable and accrued expenses approximate fair value due to the relatively short period to maturity for these instruments.
 
Concentration of Credit Risk
 
The Company’s financial instruments that are exposed to the concentrations of credit risk consist primarily of cash and cash equivalents and trade accounts receivables. The Company’s places its cash with high quality institutions. At times, such investments may be in excess of the FDIC insurance limit. Cash and cash equivalents held in a bank may exceed federally insured limits at year end and at various points during the year.
 
The Company routinely assesses the financial strength of its customers and, as a consequence, believes that its trade accounts receivable credit risk exposure is limited.
 
During the nine months ended December 31, 2013 two customers made up sales of 100% and one customer comprised sales of 39% for the nine months ended December 31, 2012. The remaining customers were each under 10%.
 
Loss per Share
 
Basic and diluted net loss per common share is computed based upon the weighted average common shares outstanding as defined by FASB Accounting Standards Codification Topic 260, “Earnings per Share.” As of December 31, 2013 and 2012, there were no common share equivalents outstanding.
 
Recent Accounting Pronouncements
 
In February 2013, the FASB issued ASU No. 2013-02, "Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income." The ASU adds new disclosure requirements for items reclassified out of accumulated other comprehensive income by component and their corresponding effect on net income. The ASU is effective for public entities for fiscal years beginning after December 15, 2013.
 
In February 2013, the Financial Accounting Standards Board, or FASB, issued ASU No. 2013-04, "Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for which the Total Amount of the Obligation Is Fixed at the Reporting Date." This ASU addresses the recognition, measurement, and disclosure of certain obligations resulting from joint and several arrangements including debt arrangements, other contractual obligations, and settled litigation and judicial rulings. The ASU is effective for public entities for fiscal years, and interim periods within those years, beginning after December 15, 2013.
 
In March 2013, the FASB issued ASU No. 2013-05, "Foreign Currency Matters (Topic 830): Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity." This ASU addresses the accounting for the cumulative translation adjustment when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity. The guidance outlines the events when cumulative translation adjustments should be released into net income and is intended by FASB to eliminate some disparity in current accounting practice. This ASU is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013.
 
 
F-6

 
 
YOUR INTERNET DEFENDER, INC
(A DEVELOPMENT STAGE COMPANY)
DECEMBER 31, 2013
NOTES TO THE FINANCIAL STATEMENTS
(UNAUDITED)
 
In March 2013, the FASB issued ASU 2013-07, “Presentation of Financial Statements (Topic 205): Liquidation Basis of Accounting.” The amendments require an entity to prepare its financial statements using the liquidation basis of accounting when liquidation is imminent. Liquidation is imminent when the likelihood is remote that the entity will return from liquidation and either (a) a plan for liquidation is approved by the person or persons with the authority to make such a plan effective and the likelihood is remote that the execution of the plan will be blocked by other parties or (b) a plan for liquidation is being imposed by other forces (for example, involuntary bankruptcy). If a plan for liquidation was specified in the entity’s governing documents from the entity’s inception (for example, limited-life entities), the entity should apply the liquidation basis of accounting only if the approved plan for liquidation differs from the plan for liquidation that was specified at the entity’s inception. The amendments require financial statements prepared using the liquidation basis of accounting to present relevant information about an entity’s expected resources in liquidation by measuring and presenting assets at the amount of the expected cash proceeds from liquidation. The entity should include in its presentation of assets any items it had not previously recognized under U.S. GAAP but that it expects to either sell in liquidation or use in settling liabilities (for example, trademarks). The amendments are effective for entities that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013, and interim reporting periods therein. Entities should apply the requirements prospectively from the day that liquidation becomes imminent. Early adoption is permitted.
 
Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements.
 
NOTE 2 STOCKHOLDERS' EQUITY 

(A) Preferred Stock

In June 2011, the Company amended its Articles of Incorporation to authorize 1,000,000 shares of preferred stock with a par value of $0.0001 with rights and preferences to be determined by the Board of Directors of the Company.
 
(B) Common Stock

In June 2011, the Company amended its Articles of Incorporation to authorize 150,000,000 shares of common stock with a par value of $0.0001.

On July 25, 2011, the Company issued 9,400,000 of its common stock to three (3) founders at $0.0001 price per share for cash of $940.
 
During the period from July 28, 2011 through August 18, 2011, the Company issued 42,600,000 shares of its common stock to individuals for cash of $106,500 ($0.0025 per share).

(C) In-Kind Contribution
 
For the interim periods ended December 31, 2013 and 2012, two shareholders of the Company contributed services having a fair value of $2,600.
 
NOTE 3 RELATED PARTY TRANSACTIONS
 
On July 30, 2012, the Company executed a four-year consulting agreement for $12,000 per month with a related party commencing upon the earlier of (i) the consummation by the Company of equity financings (including financings with an equity component) resulting in gross proceeds to the Company of no less than $500,000 or (ii) September 1, 2012. The agreement calls for an automatic renewal for an additional three years if the Company has raised in total a minimum of two million dollars in gross capital from any and all sources. On October 1, 2012 the agreement was modified whereby the compensation under the consulting agreement was waived for the period from October through December 2012.
 
The Company recorded consulting expenses of $36,000 for the three months ended December 31, 2013.
 
On October 5, 2012 the Company borrowed $2,500 from a related party, payable on demand and bearing interest at 3% per annum. On October 15, 2012 the Company repaid $2,502 representing principal of $2,500 and interest of $2.

 
F-7

 
 
YOUR INTERNET DEFENDER, INC
(A DEVELOPMENT STAGE COMPANY)
DECEMBER 31, 2013
NOTES TO THE FINANCIAL STATEMENTS
(UNAUDITED)
 
On November 9, 2012 the Company borrowed $27,000 from a related party, payable on demand and bearing an annual interest rate of 3%.

On January 13, 2013 the Company borrowed $4,500 from a related party, payable on demand and bearing an annual interest rate of 3%.

On March 13, 2013 the Company borrowed $10,000 from a related party, payable on demand and bearing an annual interest rate of 3%.

 On March 27, 2013 the Company borrowed $2,000 from a related party, payable on demand and bearing an annual interest rate of 3%.

On March 27, 2013 the Company borrowed $2,000 from a related party, payable on demand and bearing an annual interest rate of 3%.

On April 17, 2013 the Company borrowed $13,000 from a related party, payable on demand but not before July 3, 2013 and bearing an annual interest rate of 3%.

On May 6, 2013 the Company borrowed $3,000 from a related party, payable on demand but not before October 31, 2013 and bearing an annual interest rate of 10%.

On June 5, 2013 the Company borrowed $3,300 from a related party, payable on demand but not before October 31, 2013 and bearing an annual interest rate of 10%.

On June 17, 2013 the Company borrowed $10,000 from a related party, payable on demand but not before October 31, 2013 and bearing an annual interest rate of 10%.

On July 15, 2013 the company borrowed $2,438 from a related party, payable on demand but not before December 31, 2013 and bearing an annual interest rate of 10%.
 
On July 17, 2013 the company borrowed $13,383 from a related party, payable on demand but not before December 31, 2013 and bearing an annual interest rate of 10%.

On September 4, 2013 the company borrowed $26,645 from a related party, payable on demand but not before December 31, 2013 and bearing an annual interest rate of 10%.
 
On September 18, 2013 the company borrowed $6,000 from a related party, payable on demand but not before December 31, 2013 and bearing an annual interest rate of 10%.

On October 16, 2013 the company borrowed $2,500 from a related party, payable on demand but not before February 28, 2014 and bearing an annual interest rate of 10%.

On November 19, 2013 the company borrowed $5,100 from a related party, payable on demand but not before February 28, 2014 and bearing an annual interest rate of 10%.

On December 11, 2013 the company borrowed $3,500 from a related party, payable on demand but not before February 28, 2014 and bearing an annual interest rate of 10%.
 
NOTE 4 GOING CONCERN
 
The financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.

As reflected in the financial statements, the Company had deficit accumulated during the development stage at December 31, 2013, a net loss and net cash used in operating activities for the interim period then ended. These factors raise substantial doubt about its ability to continue as a going concern.

 
F-8

 
 
YOUR INTERNET DEFENDER, INC
(A DEVELOPMENT STAGE COMPANY)
DECEMBER 31, 2013
NOTES TO THE FINANCIAL STATEMENTS
(UNAUDITED)
 
While the Company is attempting to commence operations and produce sufficient sales, the Company’s cash position may not be sufficient to support the Company’s daily operations. While the Company believes in the viability of its strategy to commence operations and produce sales volume and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent on the Company's ability to raise additional capital and implement its business plan.

The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
 
NOTE 5 SUBSEQUENT EVENTS

The Company has evaluated subsequent events and transactions for potential recognition or disclosure in the financial statements through the date which the financial statements were issued to determine if they must be reported. The Management of the Company determined that there were certain reportable subsequent event(s) to be disclosed as follows:

On October 16, 2013 the company borrowed $2,500 from a related party, payable on demand but not before December 31, 2013 and bearing an annual interest rate of 10%.

On February 10, 2014 the Company borrowed $5,000 from a related party, payable on demand but not before May 31, 2014 and bearing an annual interest rate of 10% per annum.

 
F-9

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

Cautionary Note Regarding Forward-Looking Information and Factors That May Affect Future Results
 
This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Securities and Exchange Commission encourages companies to disclose forward-looking information so that investors can better understand a company’s future prospects and make informed investment decisions. This Quarterly Report on Form 10-Q and other written and oral statements that we make from time to time contain such forward-looking statements that set out anticipated results based on management’s plans and assumptions regarding future events or performance. We have tried, wherever possible, to identify such statements by using words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “will” and similar expressions in connection with any discussion of future operating or financial performance. In particular, these include statements relating to future actions, future performance or results of current and anticipated sales efforts, expenses, the outcome of contingencies, such as legal proceedings, and financial results. A list of factors that could cause our actual results of operations and financial condition to differ materially is set forth below:
 
Our limited operating history and experience, ability to achieve profitability and our ability to continue to operate.
Our ability to obtain customers for our services.
Our dependence on services provided by our executive officers and directors who do not work full time. 
Our dependence on future financing from our current stockholders and Directors.
Our reliance on strategic relationships to promote our services.
The effects of competition from other companies, customer acceptance of our products and services and our ability to offer competitive products and services.
Our lack of intellectual property rights and ease of entry into our business. 
Increased costs as a result of becoming a reporting company.
The ability of our stockholders to sell their common stock may be limited because we are listed on the OTCQB Tier of the OTC Markets and do not meet the criteria to list our securities on an exchange such as The NASDAQ Stock Market.
The affects on our stock price as a result of sales of our common stock by existing shareholders pursuant to Rule 144.
 
We caution that the factors described herein and other factors could cause our actual results of operations and financial condition to differ materially from those expressed in any forward-looking statements we make and that investors should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New factors emerge from time to time, and it is not possible for us to predict all of such factors. Further, we cannot assess the impact of each such factor on our results of operations or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
 
As used in this Quarterly Report on Form 10-Q, references to the “Company,” “YID”, “we,” “our” or “us” refer to Your Internet Defender Inc. unless the context otherwise indicates. The following presentation of management’s discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the Company’s unaudited consolidated financial statements, the accompanying notes thereto and other financial information appearing elsewhere in this report and in conjunction with the Management's Discussion and Analysis set forth in our Annual Report on Form 10-K for the fiscal year ended March 31, 2012.
 
We are currently on a fiscal year ending March 31. We have defined various periods that are covered in this report as follows:

“fiscal 2012” – April 1, 2011 through March 31, 2012.
“fiscal 2013” – April 1, 2012 through March 31, 2013.
“fiscal 2014” – April 1, 2013 through March 31, 2014.
 
Overview
 
Your Internet Defender Inc. was incorporated under the laws of the State of Nevada on May 4, 2011. We are in the business of providing online brand management, focusing on offsite search engine optimization (“SEO”), social media marketing and monitoring, and specialized brand reputation marketing. We have developed a range of services, proprietary methodology and systems that enable companies, professionals and individuals to protect and promote their brands in the most favorable manner, while attracting traffic to their desired web locations. Our search engine optimization, on-line reputation management and social monitoring services are fully operational. In addition, we have developed automated reputation monitoring products, as well as downloadable software to be used directly by our customers without any assistance.

 
3

 
 
Our services can be classified in the following categories:
 
1. 
Search Engine Optimization (SEO)
 
2. 
Social Media Marketing and Monitoring
 
3. 
Specialized Online Brand Reputation Management

We have two primary pricing structures, (i) an hourly or per-deliverable fixed fee or (ii) monthly recurring fees.

Consistent with our previously disclosed plans to establish new business opportunities, we are in the final stages of developing a software application that allows small to medium sized businesses to automate the process of search engine optimization. This software application will enable users to optimize their websites, product and service offerings and brand image. We expect to launch this application in June 2014.
 
Results of Operations
 
The following comparative analysis on results of operations was based primarily on the comparative financial statements, footnotes and related information for the periods identified below and should be read in conjunction with the financial statements and the notes to those statements that are included elsewhere in this report. The results discussed below are for the nine months ended December 31, 2013 and 2012. For comparative purposes, we are comparing the nine months ended December 31, 2013 to the nine months ended December 31, 2012.
 
Revenue
 
Revenue during the three and nine month periods ended December 31, 2013 decreased by $50,764 and $77,662, respectively, compared to the same periods in fiscal 2012 primarily as a result of the company curtailing the servicing of its accounts to focus on the development of its search engine optimization software.
 
Cost of Revenues
 
Cost of revenues during the three and nine month periods ended December 31, 2013 decreased by $56,851 and $91,412, respectively, compared to the same periods in fiscal 2012 primarily as a result of a decrease in our revenues as discussed above.
 
Total operating expenses
 
Total operating expenses in the three months ended December 31, 2013 increased by $28,821 and total operating expenses in the nine months ended December 31, 2013 increased by $102,839 compared to the same periods in 2012 primarily due to an increase in management consulting fees and general and administrative expenses associated with management compensations costs and SEC reporting requirements.

Interest Expense

Interest Expense during the three and nine month periods ended December 31, 2013 increased by $3,789 and $12,748, respectively, compared to the same periods in fiscal 2012 as a result of increased borrowings for working capital needs.

Net loss
 
Net loss in the three and nine month periods ended December 31, 2013 increased by $26,523 and $101,837 compared to the same periods in fiscal 2012. This increase was primarily a result of the increase in operating expenses and reduction in net revenues discussed above.
 
Liquidity and Capital Resources
 
Liquidity is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements. As of December 31, 2013 our working capital deficit amounted to $320,309, an increase of $205,847 as compared to $114,462 as of March 31, 2013. We rely upon cash generated from our operations and loans from related parties to fund our operations. We expect to continue to borrow funds for working capital purposes from related parties over the next twelve months.
 
 
4

 
 
Net cash used in operating activities was $75,482 during the nine months ended December 31, 2013 compared to $75,600 in the same period in 2012. Cash used in operating activities has been relatively the same period over period although our net loss during the nine months ended December 31, 2013 has increased, partially offset by an increase in our accounts receivables and accrued expenses and other current liabilities.
 
Net cash flows provided by financing activities during the nine months ended December 31, 2013 was $75,482 compared to $27,000 in the same period in 2012. The increase was a result of loans we received from a related party to fund our working capital needs.
 
There are no limitations in the certificate of incorporation on the Company’s ability to borrow funds or raise funds through the issuance of capital stock.
 
Two of our stockholders provided, without cost to the Company, services, valued at $2,600 for the three-month period ended December 31, 2013. The total of these expenses was reflected in the statement of operations as general and administrative expenses with a corresponding contribution to paid-in capital.
 
We do not currently have sufficient resources to effectuate our business plan. We expect to incur a minimum of $105,000 in additional expenses during fiscal 2014. We estimate that this will be comprised of approximately $60,000 towards salaries, programming and subcontractors, $15,000 towards marketing materials and sales. Additionally, approximately $30,000 will be needed for general overhead expenses such as for corporate legal and accounting fees, office overhead and general working capital. Accordingly, we may have to raise the funds to pay for these expenses. We potentially will have to issue debt or equity or enter into a strategic arrangement with a third party.
 
There can be no assurance that additional capital will be available to us. We currently have no agreements, arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources. Since we have no other such arrangements or plans currently in effect, our inability to raise funds for the above purposes will have a severe negative impact on our ability to remain a viable Company.
 
The Company currently has no plans to conduct any research and development or to purchase or sell any significant equipment. If the Company is unable to obtain the working capital it requires to operate its business, it does not expect to hire any employees during the next 12 months.
 
Going Concern Consideration
 
The Company has been in the development stage since its inception and continues to incur significant losses. We had a deficit accumulated during the development stage at December 31, 2013 of $455,349 and used cash in operating activities since inception through December 31, 2013 of $199,472. This raises substantial doubt about our ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company's ability to raise additional capital and generate additional revenues and profits from our business plan.

In the opinion of our independent registered public accounting firm for our fiscal year end March 31, 2013, our auditor included a statement that as a result of our significant losses since inception there is a substantial doubt as to the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
Off-Balance Sheet Arrangements
 
There are 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 is material to investors.
 
Related Party Transactions
 
We have historically borrowed funds from both related and unrelated parties. At December 31, 2013 and March 31, 2013 we had outstanding net advances and loans from related parties of $118,982 and $43,500, respectively. The loans and advances bear interest at rates ranging from 3% to 10% per annum and are payable on demand.
 
Critical Accounting Policies and Estimates
 
Estimates
 
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that could affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Actual results could differ from those estimates.
 
 
5

 
 
Cash and Cash Equivalents
 
For purposes of the cash flow statements, the Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents.
 
Revenue Recognition
 
The Company recognizes revenue in accordance with FASB ASC No. 985-605, “Revenue Recognition”. In all cases, revenue is recognized as the services are performed and when the price is fixed and determinable, persuasive evidence of an arrangement exists, and collectability of the resulting receivable is reasonably assured. For services where we do not have a contract, revenue is generally recognized when the services are performed and accepted by the customer and the amounts are earned and collection is reasonably assured. We recognize revenue under contracts agreements where we have a fixed term of service using the straight line method over the term of the agreement.
 
Allowance for Doubtful Accounts
 
Accounts receivable consist of trade receivables recorded at original invoice amount, less an estimated allowance for uncollectible accounts. Trade credit is generally extended on a short-term basis; thus, trade receivables do not bear interest, although finance charges may be applied to receivables that are past due. Trade receivables are periodically evaluated for collectability based on past credit history with customers and their current financial condition. Changes in the estimated collectability of trade receivables are recorded in the results of operations for the period in which the estimate is revised. The Company does not generally require collateral for trade receivables.
 
At December 31, 2013 management considers all accounts receivable collectable and has not made a provision for doubtful accounts.

Website Development Costs

The Company capitalizes its costs to develop its website and internal-use software when preliminary development efforts are successfully completed, management has authorized and committed project funding, and it is probable that the project will be completed and the software will be used as intended. Such costs are amortized on a straight-line basis over the estimated useful life of three years. Costs incurred prior to meeting these criteria, together with costs incurred for training and maintenance, are expensed as incurred. Since inception, the Company capitalized $26,950 of website development costs. Amortization expense for the three months ended December 31, 2013 and 2012 amounted to $2,246 in each of the periods.
 
Income Taxes
 
The Company accounts for income taxes under FASB Codification Topic 740-10-25 (“ASC 740-10-25”). Under ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
 
Business Segments
 
The Company operates in one segment and therefore segment information is not presented.
 
Fair Value of Financial Instruments
 
The carrying amounts of the Company's accounts receivable, accounts payable and accrued expenses approximate their fair value due to the relatively short period to maturity for these instruments.
 
Concentration of Credit Risk
 
The Company’s financial instruments that are exposed to the concentrations of credit risk consist primarily of cash and cash equivalents and trade accounts receivables. The Company’s places its cash with high quality institutions. At December 31, 2013 the Company did not have any balances that exceeded FDIC insurance limits.
 
 
6

 
 
The Company routinely assesses the financial strength of its customers and, as a consequence, believes that its trade accounts receivable credit risk exposure is limited.
 
During the nine months ended December 31, 2013 two customers made up sales of 100% and one customer comprised sales of 39% for the nine months ended December 31, 2012. The remaining customers were each under 10%. As a result of this customer concentration, our business would be greatly damaged if we were to lose any of our primary customers.
 
Loss Per Share
 
Basic and diluted net loss per common share is computed based upon the weighted average common shares outstanding as defined by FASB Accounting Standards Codification Topic 260, “Earnings Per Share.” As of December 31, 2013 there were no common share equivalents outstanding.
 
Recent Accounting Pronouncements
 
In February 2013, the FASB issued ASU No. 2013-02, "Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. " The ASU adds new disclosure requirements for items reclassified out of accumulated other comprehensive income by component and their corresponding effect on net income. The ASU is effective for public entities for fiscal years beginning after December 15, 2013.
 
In February 2013, the Financial Accounting Standards Board, or FASB, issued ASU No. 2013-04, "Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for which the Total Amount of the Obligation Is Fixed at the Reporting Date." This ASU addresses the recognition, measurement, and disclosure of certain obligations resulting from joint and several arrangements including debt arrangements, other contractual obligations, and settled litigation and judicial rulings. The ASU is effective for public entities for fiscal years, and interim periods within those years, beginning after December 15, 2013.
 
In March 2013, the FASB issued ASU No. 2013-05, "Foreign Currency Matters (Topic 830): Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity." This ASU addresses the accounting for the cumulative translation adjustment when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity. The guidance outlines the events when cumulative translation adjustments should be released into net income and is intended by FASB to eliminate some disparity in current accounting practice. This ASU is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013.
 
In March 2013, the FASB issued ASU 2013-07, “Presentation of Financial Statements (Topic 205): Liquidation Basis of Accounting.” The amendments require an entity to prepare its financial statements using the liquidation basis of accounting when liquidation is imminent. Liquidation is imminent when the likelihood is remote that the entity will return from liquidation and either (a) a plan for liquidation is approved by the person or persons with the authority to make such a plan effective and the likelihood is remote that the execution of the plan will be blocked by other parties or (b) a plan for liquidation is being imposed by other forces (for example, involuntary bankruptcy). If a plan for liquidation was specified in the entity’s governing documents from the entity’s inception (for example, limited-life entities), the entity should apply the liquidation basis of accounting only if the approved plan for liquidation differs from the plan for liquidation that was specified at the entity’s inception. The amendments require financial statements prepared using the liquidation basis of accounting to present relevant information about an entity’s expected resources in liquidation by measuring and presenting assets at the amount of the expected cash proceeds from liquidation. The entity should include in its presentation of assets any items it had not previously recognized under U.S. GAAP but that it expects to either sell in liquidation or use in settling liabilities (for example, trademarks). The amendments are effective for entities that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013, and interim reporting periods therein. Entities should apply the requirements prospectively from the day that liquidation becomes imminent. Early adoption is permitted.
 
Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable to a smaller reporting company.

 
7

 
 
Item 4. Controls and Procedures.

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”) that are designed to ensure that information required to be disclosed by us in reports that we file under the Exchange Act is recorded, processed, summarized and reported as specified in the SEC’s rules and forms and that such information required to be disclosed by us in reports that we file under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer, or CEO, and our Chief Financial Officer, CFO, to allow timely decisions regarding required disclosure. Management, with the participation of our CEO and CFO, performed an evaluation of the effectiveness of our disclosure controls and procedures as of December 31, 2013. Based on that evaluation, our management, including our CEO and CFO, concluded that our disclosure controls and procedures were effective as of December 31, 2013.
 
Our management, including our Chief Executive Officer and our Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our Company have been detected.
 
Changes in Internal Control
 
There were no changes identified in connection with our internal control over financial reporting during the three months ended December 31, 2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 
8

 
 
PART II
OTHER INFORMATION

Item 1. Legal Proceedings.

We are not presently a party to any material litigation, nor to the knowledge of management is any litigation threatened against us that may materially affect us.

Item 1A. Risk Factors.

Not applicable to a smaller reporting company.
 
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
 
None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not Applicable
 
Item 5. Other Information.
 
None.

 
9

 
 
Item 6. Exhibits.

The following exhibits are being filed as part of this Quarterly Report on Form 10-Q.
 
Exhibit No.
 
Description
     
31.1*
 
Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act
     
31.2*
 
Certification of Principal Financial and Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act
     
32.1*
 
Certification of Principal Executive Officer and Principal Financial and Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act
 
101.INS **
 
XBRL Instance Document
     
101.SCH **
 
XBRL Taxonomy Extension Schema Document
     
101.CAL **
 
XBRL Taxonomy Extension Calculation Linkbase Document
     
101.DEF **
 
XBRL Taxonomy Extension Definition Linkbase Document
     
101.LAB **
 
XBRL Taxonomy Extension Label Linkbase Document
     
101.PRE **
 
XBRL Taxonomy Extension Presentation Linkbase Document
____________

*
Filed herewith.
**
XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

 
10

 
 
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.

 
 
YOUR INTERNET DEFENDER INC.
 
       
Dated: February 14, 2014 
By
/s/ Lisa Grossman
 
  Name:
Lisa Grossman
 
  Title:
President (Principal Executive Officer) 
 
 
Dated: February 14, 2014
By
/s/ Gabriel Solomon
 
  Name:
Gabriel Solomon
  Title:
Treasurer (Principal Financial and Accounting Officer) 
 
 
 11