UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.

 

FORM 10-K

 

 

Commission file number 333-164633

 

PHOTOAMIGO, INC.

(Exact name of registrant as specified in its charter)

 

  

(805) 965-0699

(Registrant's telephone number, including area code)

 

 

Securities registered pursuant to Section 12(b) of the Act:

 

 

Securities registered pursuant to Section 12(g) of the Act:

 

No Par Value Common Stock

(Title of class)

 

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes ☐  No ☒

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes  ☒  No ☐

 

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Sections 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  ☒  No ☐

 

Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ☒

 

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 the definitions of "large accelerated filer,"  "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer  ☐                                                      Accelerated filer  ☐

Non-accelerated filer  ☐                                                        Smaller reporting company ý

 

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

 

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:  3,018,000 shares of common stock outstanding as of November 1, 2015. 

 

 

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TABLE OF CONTENTS

 

 

 

ADDITIONAL INFORMATION

 

Descriptions of agreements or other documents contained in this report are intended as summaries and are not necessarily complete. Please refer to the agreements or other documents filed or incorporated herein by reference as exhibits. Please see the exhibit index at the end of this report for a complete list of those exhibits.

 

 

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This report contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties and are based on the beliefs and assumptions of management and information currently available to management. The use of words such as "believes", "expects", "anticipates", "intends", "plans", "estimates", "should", "likely" or similar expressions, indicates a forward-looking statement.

   

The identification in this report of factors that may affect future performance and the accuracy of forward-looking statements is meant to be illustrative and by no means exhaustive. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty.

 

Factors that could cause actual results to differ materially from those expressed or implied by forward-looking statements include, but are not limited to:

 

 

 

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PART I

 

ITEM 1.   BUSINESS.

 

General

 

Photoamigo, Inc. ("the Company"' "we", "us" or our") was incorporated in the State of Nevada on April 2, 2008 ("Inception) and since then we have been engaged in activities to formulate and implement our business plan as explained below.

Overview

We provide social networking and photo sharing from the website PhotoAmigo.com.  As of July 31, 2015, our website had 4,710 users using our free photo sharing products. We also maintain the domain names PhotoAmigo.net, fotoamigo.com and fotoamigo.net.  These domain names all redirect incoming traffic to our main website, PhotoAmigo.com.

Our website currently allows users to upload photos, share comments via photo blogs, and print photos through third-party vendors.  Our free services allow users to upload up to ten photos per day.  We offer a premium service which is priced at $19.99 per year and allows for unlimited uploading of photos.  As of the date of this prospectus, all of our users are using our free service.

 

In addition to our photo sharing services, we offer display advertising on our site through Google Adsense.  We do not currently generate any revenue through advertising, and we estimate that we will require a minimum of six months to begin generating revenue from display advertising.  In order to generate revenue from advertising, we will need to increase traffic to our website.

 

Business Strategy

   

Our business strategy is to engage users by offering free photo sharing and social networking services.  We believe that by offering a full suite of services for free, we can eventually get users to upgrade their membership for more photo sharing storage space.  Currently, we offer the following services to our members:

 

 

 

 

 

 

 

 

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Marketing

 

We will use a variety of marketing strategies to build overall traffic to the site and intend to emphasize our marketing efforts.  We plan to gain new members by offering the free subscription level but will use marketing efforts within the site to upgrade our members to a paid program.  To cultivate new members, we plan to use the following marketing strategies:

 

 

We also believe that our success is dependent on viral marketing, which is implicit in photo sharing since our domain name is presented each time a member shares a photo.

 

In addition to viral marketing strategies, we intend to rely on search engine optimization techniques to increase traffic to our website over the next twelve months.  Search engine optimization, or SEO, is the process of improving the volume of traffic generated from search engines such as Google or Yahoo.  We intend to optimize our website for key terms such as "photo sharing", "photo blogs", and "free photo hosting."  There is significant competition for these keywords and other keywords that direct traffic to photo sharing websites.  Given our limited capital resources, we may be unable to optimize our site in order to generate significant traffic from search engines.

 

Competition

 

Several online sites allow for storage and printing of digital photos.  Many of these sites have grown to recognized brand names and receive millions of uploaded photos each day.  We believe that some users are interested in using a smaller site in which their photos can be featured.

   

Flickr was acquired by Yahoo! When it had approximately 300,000 members.  According to a 2007 article in the weblog TechCrunch.com, "Flickr now has over 1 billion photos and 37.7 million unique monthly visitors.  2.5 million new photos are uploaded daily by 15 million registered users.

 

Fotolog:  A February 2007 press release from the company cited 6.5 million member accounts from more than 200 countries that have shared more than 200 million photos since the site's inception in October 2002.  The press release went on to call Fotolog "the world's largest photo-blogging community and the third most trafficked social media network on the Internet."  It added, "Fotolog has grown 100 percent virally since its founding in 2002, with no marketing or member incentives."

 

Photobucket was founded in 2003.  $15 million was invested before Photobucket was acquired by Fox Interactive Media's MySpace for $250 million in May of 2007, according to crunchbase.com.  "Their main revenue streams are through premium accounts and advertising."

 

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Reports to Security Holders.

 

Photoamigo is subject to reporting obligations under the Exchange Act. These obligations include an annual report under cover of Form 10-K, with audited financial statements, unaudited quarterly reports and the requisite proxy statements with regard to annual shareholder meetings. The public may read and copy any materials Photoamigo files with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington, DC 20549. The public may obtain information of the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0030.The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.

 

Office

We are provided rent-free office space by our Chief Executive Officer at 2532 Foothill Rd. Santa Barbara, CA93105.

Employees

At September 15, 2015, we had -0- employees, as our Chief Executive Officer  no longer receives compensation for his services.

 

ITEM 1A.    RISK FACTORS

 

As a "smaller reporting company" as defined by Item 8 of Regulation S-K, the Company is not required to provide information required by this Item. 

 

ITEM 1B.    UNRESOLVED STAFF COMMENTS

 

None.

 

ITEM 2.    PROPERTIES

 

Photoamigo owns no property.

 

Photoamigo uses the offices of its Chief Executive Officer for its minimal office facility needs for no consideration.

 

ITEM 3.    LEGAL PROCEEDINGS

 

We were not subject to any legal proceedings during the twelve months ended July 31, 2015 and 2014 and are not currently subject to any legal proceedings, and to the best of our knowledge, no such proceeding is threatened, the results of which would have a material impact on our results of operation or financial condition. Nor, to the best of our knowledge, are any of our officers or directors involved in any legal proceedings in which we are an adverse party.

 

ITEM 4.    MINE SAFETY DISCLOSURES

 

Not applicable to our Company.

 

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PART II

 

ITEM 5.    MARKET FOR COMMON EQUITY. RELATED STOCKHOLDER MATTERS AND PURCHASES OF EQUITY SECURITIES

  

Market Information

 

There is currently no market for Photoamigo's common stock and there can be no assurance that a market will develop in the future. The Company has submitted a 15c211 application to the OTC Bulletin Board to have the Company's common stock quoted on the OTC Bulletin Board. Such application is currently pending.

 

 Holders

 

As of November 1, 2015, a total of 3,018,000 shares of our common stock were outstanding and there were approximately 33 holders of record.

 

Penny Stock Rules

Due to the price of our common stock, as well as the fact that we are not listed on Nasdaq or a national securities exchange, our stock is characterized as "penny stocks" under applicable securities regulations. Our stock will therefore be subject to rules adopted by the Securities and Exchange Commission ("SEC") regulating broker-dealer practices in connection with transactions in penny stocks. The broker or dealer proposing to effect a transaction in a penny stock must furnish his customer a document containing information prescribed by the SEC and obtain from the customer an executed acknowledgment of receipt of that document. The broker or dealer must also provide the customer with pricing information regarding the security prior to the transaction and with the written confirmation of the transaction. The broker or dealer must also disclose the aggregate amount of any compensation received or receivable by him in connection with such transaction prior to consummating the transaction and with the written confirmation of the trade. The broker or dealer must also send an account statement to each customer for which he has executed a transaction in a penny stock each month in which such security is held for the customer's account. The existence of these rules may have an effect on the price of our stock, and the willingness of certain brokers to effect transactions in our stock.

 

Transfer Agent

 

We have appointed Corporate Stock Transfer, Inc. ("CST") as the transfer agent for our common stock. The principal office of CST is located at 3200 Cherry Creek Drive South, Suite 430, Denver, CO  80209 and its telephone number is (303) 282-4800.

 

Dividend Policy

 

We have never declared or paid dividends on our common stock. Payment of future dividends, if any, will be at the discretion of our Board of Directors after taking into account various factors, including the terms of any credit arrangements, our financial condition, operating results, current and anticipated cash needs and plans for expansion. At the present time, we intend to retain any earning in our business, and therefore do not anticipate paying dividends in the foreseeable future.

Recent Sales of Unregistered Securities; Use of Proceeds From Unregistered Securities

No unregistered securities were sold during the twelve months ended July 31, 2015 and 2014.

ITEM 6.    SELECTED FINANCIAL DATA

As a "smaller reporting company" as defined by Item 8 of Regulation S-K, the Company is not required to provide information required by this Item..

 

 

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ITEM 7.    MANAGEMENTS'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

 

The following discussion and analysis was prepared to supplement information contained in the accompanying financial statements and is intended to explain certain items regarding the financial condition as of July 31, 2015, and the results of operations for the years ended July 31, 2015, and 2014.  It should be read in conjunction with the audited financial statements and notes thereto contained in this report.

 

Overview of the Business

 

We were incorporated in the State of Nevada on April 2, 2008.  Since inception, we have engaged in activities to formulate and implement our business plan.

 

Ability to continue as a "going concern".  

The independent registered public accounting firms' reports on our financial statements as of July 31, 2015 and 2013, includes a "going concern" explanatory paragraph that describes substantial doubt about the Company's ability to continue as a going concern.  Management's plans in regard to the factors prompting the explanatory paragraph are discussed in the financial statements, including footnotes thereto.

 

 

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 nominal amounts of revenue, it is still devoting substantially all of its efforts on establishing the business. Among the additional disclosures required as a development stage company are that our financial statements were identified as those of a development stage company, and that the statements of operations, stockholders' deficit and cash flows disclosed activity since the date of our inception (April 2, 2008) as a development stage company All losses accumulated since Inception (April 2, 2008) have been considered as part of the Company's development stage activities. Effective June 10, 2014 FASB changed its regulations with respect to Development Stage Entities and these additional disclosures are no longer required for annual reporting periods beginning after December 15, 2014 with the option for entities to early adopt these new provisions. The Company has not elected to early adopt these provisions and consequently these additional disclosures are included in these financial statements.

Plan of Operation

 

We plan to provide social networking and photo sharing from our website PhotoAmigo.com.  We also maintain the domain names PhotoAmigo.net, fotoamigo.com and fotoamigo.net.  These domain names all redirect incoming traffic to our main website, PhotoAmigo.com.

 

We believe that we can generate significant revenue from the services provided by our website.  We need to continue development of the features on the website and attract additional subscribers.  PhotoAmigo believes that its brand, product offering and future enhancements will continue to attract users and will make it a premier destination for photo sharing.  While there are established photo sharing sites on the Internet, we believe that the continued growth of sharing photos and photo blogging will create an opportunity for additional sites.  Our strategy is to engage users by offering free photo sharing and social networking services.  We believe that by offering a full suite of services for free, we can eventually get users to upgrade their membership for more photo sharing storage space.

 

As shown in the following table, we have slowly increased the total number of members using our free services.

 

 

To become a viable enterprise, we must further increase the number of members visiting our site and convert members from free membership to paid membership.  We did not generate revenue from any members using our paid services in any of these periods.

 

 

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Liquidity and Capital Resources

As of July 31, 2015, we had working capital  of $2,217 comprised of current assets (cash)  of $3,399 and current liabilities (accounts payable)  of $1,182  This represents an increase in working capital of $1,530 from the July 31, 2014 balance of $687.  During the year-ended July 31, 2015 our working capital increased because we received more in financing activities than we used in operating activities.

  

We believe that our funding requirements for the next twelve months will be approximately $20,000, and we do not currently have these financial  resources.  We estimate that our cash resources will allow us to operate for approximately one and a half month.  

 

We have not yet reported any revenue from operations.  To fund our operations, we issued 750,000 shares of common stock on April 2, 2008 for cash proceeds of $70,500.  On April 28, 2008, we issued an additional 138,000 shares of common stock for cash proceeds of $11,500.  On January 25, 2010, an additional 24,000 shares of common stock were issued for cash proceeds of $400.

 

In addition, our Chief Executive Officer has periodically advanced funds to us to meet our working capital needs.  As of July 31, 2015, we no longer owe our Chief Executive Officer $226 for advances which are non-interest bearing and due on demand. This obligation is now -0- 

From inception to July 31, 2015, cash used in operating activities was $177,840.  We have reduced our operating activities so that we can conserve cash.

Our lack of capital resources will require us to obtain additional funding to achieve our photo sharing website development goals.  In the past we have relied on issuances of common stock to fund our operations.

We will seek additional financing in the form of debt or equity.  There is no assurance that we will be able to obtain any needed financing on favorable terms, or at all, or that we will find qualified purchasers for the sale of our stock.  Any sales of our securities would dilute the ownership of our existing investors.

We currently have no written or firm agreement regarding future funding requirements, and we may curtail our efforts or cease activities entirely.

 

Future Capital Expenditures

 

As of and subsequent to July 31, 2015, we have no plans or commitments to acquire capital assets.

 

Off-Balance Sheet Arrangements

 

As of and subsequent to July 31, 2015, we have no off-balance sheet arrangements.

Contractual Commitments

As of July 31, 2015, we have no material contractual commitments.

 

Results of Operations- Year Ended July 31, 2015 Compared to Year Ended July 31, 2014

  

Revenue

We did not report any revenues from sales or services either during the year ended July 31, 2015 or 2014 as we are a development stage company that has not commenced revenue generating activities as yet.

 

Operating expenses

Operating expenses totaled $21,074 for the year ended July 31, 2015, compared to $20,782 for the comparable period in 2014, an increase of $292 or 1 %.   We incur website development expenses in connection with activities to develop our business.  We incur professional fees in connection with the activities required to prepare disclosure documents.  Consistent with our current need to conserve capital resources, we have reduced our website development, marketing, and certain general and administrative expenses.  Investor relations expenses decreased slightly during 2015 in connection with preparation of information to be included in our registration statement.

 

 

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Net loss

 

We reported a net loss of $(21,074) or $ (0.01) per share for the year ended July 31, 2015, compared to a net loss of $(20,782) or $ (0.01) per share for the year ended July 31, 2014, an increase of $292 due to the factors discussed above.

 

CRITICAL ACCOUNTING POLICIES

 

Use of Estimates

 

Preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Significant estimates have been used by management in conjunction with the measurement of the valuation allowance relating to deferred tax assets and future cash flows associated with long-lived assets. Actual results could differ from those estimates.

 

Revenue Recognition

 

We recently commenced operations, and have not yet generated any revenues from operations as yet.  Revenues are expected to be derived principally from subscriptions to our website.  Revenue will be recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the amount is reasonably assured.  Certain insignificant amounts collected during the development, testing, and implementation phases are recorded as a recovery of development expense.

 

Deferred revenue will be recorded when amounts are received from customers for future subscriptions.  Amounts received are recorded as income each month based on the pro-rata portion of the prepaid subscription that has been fulfilled.

Cash and Cash Equivalents

 

For financial statement presentation purposes, we consider short-term, highly liquid investments with original maturities of three months or less to be cash and cash equivalents.

Contingencies

 

We are not currently a party to any pending or threatened legal proceedings.  Based on information currently available, management is not aware of any matters that would have a material adverse effect on our financial condition, results of operations or cash flows.

Fair Value of Financial Instruments

 

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management.  These financial instruments include cash, accounts payable and advances from officer, and.    Fair values are assumed to approximate carrying values for these financial instruments because they are short term in nature, or are receivable or payable on demand.

 

Income Taxes

 

Deferred income taxes are reported for timing differences between items of income or expense reported in the financial statements and those reported for income tax purposes using the asset/liability method of accounting for income taxes.  Deferred income taxes and tax benefits 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, and for tax loss and credit carry-forwards.  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. PhotoAmigo provides for deferred taxes for the estimated future tax effects attributable to temporary differences and carry-forwards when realization is more likely than not.

 

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Income (Loss) Per Share

 

We provide for the calculation of "Basic" and "Diluted" earnings per share.  Basic earnings per share includes no dilution and is computed by dividing net income (or loss) by the weighted-average number of shares outstanding during the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of the Company, assuming the issuance of an equivalent number of common shares pursuant to options, warrants, or convertible debt arrangements.  Diluted earnings per share is not shown for periods in which the Company incurs a loss because it would be anti-dilutive.  Similarly, potential common stock equivalents are not included in the calculation if the effect would be anti-dilutive. During the twelve months ended July 31, 2015 and 2014, no potentially dilutive debt or equity instruments were issued or outstanding.

 

Impairment of Long Lived Assets

 

PhotoAmigo periodically reviews the carrying amount of long lived assets to determine whether current events or changes in circumstances warrant adjustments to such carrying amounts.  If an impairment adjustment is deemed necessary, such loss is measured by the amount that the carrying value of such assets exceeds their fair value.  Considerable management judgment is necessary to estimate the fair value of assets; accordingly, actual results could vary significantly from such estimates.  Assets to be disposed of are carried at the lower of their financial statement carrying amount or fair value less costs to sell.

 

Recent Accounting Pronouncements.  

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on our financial condition or the results of its operations other than in respect of our status as a Development Stage Entity as discussed above.

 

Item 7A.  Quantative and Qualatative Disclosures About Market Risk

As a "smaller repoRing Company" as defined by Item 8 of Regulation S-K, the Company is not required to provide information required by this Item.

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ITEM 8.    FINANCIAL STATEMENTS

 

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

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POTOAMIGO, INC.

(A Development Stage Company)

BALANCE SHEETS

 

		July 31,2015				July 31, 2014
ASSETS
Current assets:
Cash and cash equivalents		$	3,399			$	2,327
Total current assets			3,399				2,327
Fixed Assets
Computer equipment			2,792				-
Accumulated depreciation			(396	)			-
Net book value			2,396				-
Total assets		$	5,795			$	2,327
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	1,182			$	1,413
Advances from officer			-				227
Total current liabilities			1,182				1,640
Total liabilities			1,182				1,640
Commitments and contingencies (Notes 2 and 4)
Stockholders' equity:
Preferred stock - $0.001 par value,  5,000,000 shares authorized:
No shares issued or outstanding			-				-
Common stock - $0.001 par value, 100,000,000 shares authorized:
3,018,000 shares issued and outstanding			3,018				3,018
Additional paid-in capital			260,613				235,613
(Deficit) accumulated  during the development stage			(259,018	)			(237,944	)
Total stockholders' equity			4,613				687
Total liabilities and stockholders' equity		$	5,795			$	2,327

 

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

 

 

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PHOTOAMIGO, INC.

(A Development Stage Company)

STATEMENTS OF OPERATIONS

for the years ended ended July 31, 2015 and 2014,

and for the period from Inception (April 2, 2008) to July 31, 2015

 

 

										Period
		Year				Year				From Inception
		ended				ended				(April 2, 2008) to
		July 31, 2015				July 31, 2014				July 31, 2015
Revenues		$	-			$	-			$	-
Operating expenses:
Website development			4,571				1,416				27,819
Employee compensation			-				-				25,800
Sales and marketing			-				-				3,162
Legal and accounting fees			10,500				11,530				86,848
Investor relations			5,135				5,822				46,330
Other general and administrative			472				2,011				8,860
Impairment			-				-				59,400
Depreciation Expense			396				-				396
Total operating expenses			21,074				20,779				258,615
Operating (loss)			(21,074	)			(20,779	)			(258,615	)
Other income(expense):
Interest expense			-				-				(631	)
Interest income			-				(3	)			228
Other income (expense) net			-				-				(403	)
Net (loss)		$	(21,074	)		$	(20,782	)		$	(259,018	)
Net (loss) per common share:
Basic and Diluted		$	(0.01	)		$	(0.01	)
Weighted average shares outstanding:
Basic and Diluted			3,018,000				3,018,000

 

he accompanying notes are an integral part of these financial statements.

 

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PHOTOAMIGO, INC.

(A Development Stage Company)

STATEMENTS OF CASH FLOWS

for the years ended ended July 31, 2015 and 2014,

and for the period from Inception (April 2, 2008) to July 31, 2015

 

										Period
		Year				Year				From Inception
		ended				ended				(April 2, 2008) to
		July 31, 2015				July 31, 2014				July 31, 2015
Cash flows from operating activities:
Net (loss)		$	(21,074	)		$	(20,782	)		$	(259,018	)
Adjustments to reconcile net (loss) to net cash
used by operating activities:
Impairment			-				-				59,400
Depreciation			396				-				396
Stock issued for services			-				-				20,500
Changes in operating assets and liabilities:
Increase/(decrease) in accounts payable			(231	)			(406	)			1,182
Increase/(decrease) in advances from officer			(227	)			-				-
Net cash (used in) operating activities			(21,136	)			(21,188	)			(177,540	)
Cash flows from investing activities:
Purchase of fixed assets			(2,792	)			-				(3,092	)
Net cash (used in) investing activities			(2,792	)			-				(3,092	)
Cash flows from financing activities:
Capital contribution from shareholders			25,000				20,000				122,131
Cash Proceeds from sale of stock			-				-				61,900
Net cash provided by financing activities			25,000				20,000				184,031
Net increase (decrease) in cash and equivalents			1,072				(1,188	)			3,399
Cash and equivalents at beginning of period			2,327				3,515				-
Cash and equivalents at end of period		$	3,399			$	2,327			$	3,399
Supplemental Cash Flow Information
Interest paid		$	-			$	-			$	-
Income taxes paid		$	-			$	-			$	-
Non-cash investing and financing activities:
Shares issued in exchange for website domain names,
membership base and software		$	-			$	-			$	59,100

 

 

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

 

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PHOTOAMIGO, INC.

(A Development Stage Company)

STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

for the period from Inception (April 2, 2008) to July 31, 2015

 

										Additional								Total
		Common Stock								Paid - in				Accumulated				Stockholders'
		Shares				Amount				Capital				(Deficit)				Equity (Deficit)
Balance at Inception, April 2, 2008			-			$	-			$	-			$	-			$	-
Shares issued in exchange for assets, April 2, 2008			2,100,000				2,100				57,000				-				59,100
Shares issued for cash at
$0.094 per share, April 2, 2008			500,000				500				46,500				-				47,000
Shares issued for cash and services at
$0.094 per share, April 2, 2008			250,000				250				23,250				-				23,500
Shares issued for cash at
$0.0833 per share, April 28, 2008			138,000				138				11,362				-				11,500
Net (loss) for the period			-				-				-				(86,542	)			(86,542	)
Balance, July 31, 2008			2,988,000				2,988				138,112				(86,542	)			54,558
Net (loss) for the year			-				-				-				(36,247	)			(36,247	)
Balance, July 31, 2009			2,988,000				2,988				138,112				(122,789	)			18,311
Shares issued for cash at			24,000				24				376				-				400
$0.0166 per share, January 25, 2010											.
Net (loss) for the year			-				-				-				(24,935	)			(24,935	)
Balance, July 31, 2010 - audited			3,012,000				3,012				138,488				(147,724	)			(6,224	)
Net (loss) for the year			-				-				-				(30,380	)			(30,380	)
Balance, July 31, 2011 - audited			3,012,000				3,012				138,488				(178,104	)			(36,604	)
Additional paid in capital - related parties			-				-				57,131				-				57,131
Net (loss) for the year			-				-				-				(21,826	)			(21,826	)
Balance, July 31 , 2012			3,012,000				3,012				195,619				(199,930	)			(1,299	)
Additional paid in capital - related parties			-				-				20,000				-				20,000
Net (loss) for the year			-				-				-				(17,232	)			(17,232	)
Balance, July 31 , 2013			3,012,000				3,012				215,619				(217,162	)			1,469
Adjustment to number of shares issued and outstanding			6,000				6				(6	)			-				-
Additional paid in capital - related parties			-				-				20,000				-				20,000
Net (loss) for the year			-				-				-				(20,782	)			(20,782	)
Balance, July 31 , 2014			3,018,000				3,018				235,613				(237,944	)			687
Additional paid in capital - related parties			-				-				25,000				-				25,000
Net (loss) for the year			-				-				-				(21,074	)			(21,074	)
Balance, July 31 , 2015			3,018,000			$	3,018			$	260,613			$	(259,018	)		$	4,613

 

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

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PHOTOAMIGO, INC.

(A Development Stage Company)

Notes to Financial Statements

For the Years Ended July 31, 2015 and 2014

And the Period from April 2, 2008 (Inception) to July 31, 2015

 

NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

This summary of significant accounting policies is presented to assist in understanding the Company's financial statements.  The financial statements and notes are the responsibility of the Company's management.  These accounting policies conform to accounting principles generally accepted in the United States of America ("US GAAP") and have been consistently applied in the preparation of the financial statements.

 

Organization

 

PhotoAmigo, Inc. (the "Company" or "PhotoAmigo") was organized under the laws of the State of Nevada on April 2, 2008.  The Company has been in the development stage since its formation and has not yet realized revenues from its planned operations.  It plans to develop photographic sharing and networking through its website PhotoAmigo.com.  The Company has chosen July 31 as its fiscal year-end.

 

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 nominal amounts of revenue, it is still devoting substantially all of its efforts on establishing the business. Among the additional disclosures required as a development stage company are that our financial statements were identified as those of a development stage company, and that the statements of operations, stockholders' deficit and cash flows disclosed activity since the date of our inception (April 2, 2008) as a development stage company All losses accumulated since Inception (April 2, 2008) have been considered as part of the Company's development stage activities. Effective June 10, 2014 FASB changed its regulations with respect to Development Stage Entities and these additional disclosures are no longer required for annual reporting periods beginning after December 15, 2014 with the option for entities to early adopt these new provisions. The Company has not elected to early adopt these provisions and consequently these additional disclosures are included in these financial statements 

 

Use of Estimates

 

The preparation of financial statements in conformity with US GAAP requires the Company's management to make estimates and assumptions that affect the amounts of assets and liabilities, the identification and disclosure of impaired assets and contingent liabilities at the date of the financial statements, and the reported amounts expenses during the reporting period. Actual results could differ from those estimates.

 

Cash and Cash Equivalents

 

For purposes of balance sheet classification and the statements of cash flows, the Company considers cash in banks, deposits in transit, and all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

 

Concentration of Credit Risk

 

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of temporary cash investments. On July 31, 2015, the Company did not have a concentration of credit risk since it had no temporary cash investments in bank accounts in excess of the FDIC insured amounts.

 

 

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Fair Value of Financial Instruments

 

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of July 31, 2015  These financial instruments include cash, accounts payable, and advances from officers.  Fair values are assumed to approximate carrying values for these financial instruments because they are short term in nature, or are receivable or payable on demand.

Capital Expenditure

 

Expenditures for capital assets are recorded at historical cost.  Additions, improvements and major renewals are capitalized, while maintenance, repairs and minor renewals are expensed as incurred. When assets are retired or disposed of, the assets and related accumulated depreciation and amortization are removed from our general ledger, and the resulting gain or loss is reflected in the statement of operations. Depreciation of capital assets is provided over their estimated useful lives on a straight line basis

 

Impairment of Long Lived Assets

 

PhotoAmigo periodically reviews the carrying amount of long lived assets to determine whether current events or changes in circumstances warrant adjustments to such carrying amounts.  If an impairment adjustment is deemed necessary, such loss is measured by the amount that the carrying value of such assets exceeds their fair value.  Considerable management judgment is necessary to estimate the fair value of assets; accordingly, actual results could vary significantly from such estimates.  Assets to be disposed of are carried at the lower of their financial statement carrying amount or fair value less costs to sell.

 

Income Taxes

 

Deferred income taxes are recorded for timing differences between items of income or expense reported in the financial statements and those reported for income tax purposes using the asset/liability method of accounting for income taxes.  Deferred income taxes and tax benefits 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, and for tax loss and credit carry-forwards.  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.  The Company provides for deferred taxes for the estimated future tax effects attributable to temporary differences and carry-forwards when realization is more likely than not.  If the Company concludes that it is more likely than not that some portion or all of the deferred tax asset will not be realized, the balance of deferred tax assets is reduced by a valuation allowance.

Revenue Recognition

 

PhotoAmigo recently commenced operations, is in its development stage, and has not yet generated revenues from operations.  Revenues are expected to be derived principally from subscriptions to our website.

 

In accordance with established guidance, PhotoAmigo plans to recognize revenue when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the amount is reasonably assured.  Certain insignificant amounts collected during the development, testing, and implementation phases are recorded as a recovery of development expense.

Advertising costs

Advertising costs are expensed as incurred. No advertising costs were incurred during the twelve month periods ended July 31, 2015 or 2014.

Stock-based Compensation

 

PhotoAmigo has no stock compensation plan and has not made any grants since inception, and, accordingly, has not recognized any stock-based compensation expense.  PhotoAmigo plans to account for stock-based compensation in accordance with the fair value recognition provisions of US GAAP.  Stock based compensation will be measured at the grant date based upon the estimated fair value of the award and the expense will be recognized over the required employee service period.  The fair value of restricted stock grants will be estimated on the grant date based upon the fair value of the common stock.

 

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Income (Loss) Per Share

 

Basic earnings per share includes no dilution and is computed by dividing net income (or loss) by the weighted-average number of shares outstanding during the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of the Company, assuming the issuance of an equivalent number of common shares pursuant to options, warrants, or convertible debt arrangements.  Diluted earnings per share is not shown for periods in which the Company incurs a loss because it would be anti-dilutive.  Similarly, potential common stock equivalents are not included in the calculation if the effect would be anti-dilutive.  Since inception, PhotoAmigo has not issued any potentially dilutive securities. During the twelve months ended July 31, 2015 and 2014, no potentially dilutive debt or equity instruments were issued or outstanding.

Recent Accounting pronouncements

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations other than in respect of its status as a Development Stage Entity as discussed above. 

NOTE 2.  GOING CONCERN

 

The accompanying financial statements were prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of obligations in the normal course of business.  However, PhotoAmigo's operations are in the development stage and it has incurred losses since inception, resulting in an accumulated deficit of $259,018 as of July 31, 2015.  These conditions raise substantial doubt about the ability of PhotoAmigo to continue as a going concern.

 

In view of these matters, continuation as a going concern is dependent upon several factors, including the availability of debt or equity funding upon terms and conditions acceptable to PhotoAmigo, and ultimately achieving profitable operations.  Management believes that PhotoAmigo's business plan provides it with an opportunity to continue as a going concern.  However, management cannot provide assurance that PhotoAmigo will meet its objectives and be able to continue in operation.

 

The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of PhotoAmigo to continue as a going concern.

 

NOTE 3.  STOCKHOLDERS' EQUITY

 

Preferred Stock    The Company has authorized 5,000,000 shares of preferred stock with a par value of $0.001.  These shares may be issued in series with such rights and preferences as may be determined by the Board of Directors.  Since inception, the Company has not issued any preferred shares.

 

Common Stock     The Company has authorized 100,000,000 shares of $0.001 par value common stock.

 

Issued and Outstanding    The total issued and outstanding common stock at July 31, 2015 is 3,018,000 common shares, as follows:

 

i.  On April 2, 2008, PhotoAmigo issued 2,100,000 common shares to a founder in exchange for assets, including the website and four domain names. The transaction was recorded at $59,100 representing the founder's basis in the exchanged assets.

 

ii.  On April 2, 2008, PhotoAmigo issued 500,000 common shares to founders for cash proceeds of $47,000, or $0.094 per share.

 

iii.  On April 2, 2008, PhotoAmigo issued 250,000 common shares to a founder for $3,000 cash and for services valued at $20,500, or $0.094 per share.

 

iv.  On April 28, 2008, PhotoAmigo completed a private placement of 138,000 common shares for cash proceeds of $11,500, or $0.0833 per share. An additional 6,000 of "restricted" common shares were also issued as part of the transaction.

 

v.  On January 10, 2010, PhotoAmigo completed a private placement of 24,000 common shares for cash  proceeds of $400 or $0.0167 per share.

 

 During the year ended July 31, 2014 we adjusted the number of shares issued and outstanding by 6,000 in respect of issuances in earlier periods.

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NOTE 4.  INCOME TAXES

 

PhotoAmigo's deferred tax assets, valuation allowance, and change in valuation allowance are as follows:

 

 

Income taxes at the statutory rate are reconciled to reported income tax expense (benefit) as follows:

 

 

At this time, the Company is unable to determine if it will be able to benefit from its deferred tax asset.  There are limitations on the utilization of net operating loss carry-forwards, including a requirement that losses be offset against future taxable income, if any.  In addition, there are limitations imposed by certain transactions which are deemed to be ownership changes.  Accordingly, a valuation allowance has been established for the entire deferred tax asset.

 

NOTE 5.  RELATED PARTY TRANSACTIONS

 

From time to time, PhotoAmigo receives funds from its sole executive officer to cover temporary working capital requirements.  During the year ended July 31, 2015,  PhotoAmigo received no cash advances.  As of July 31, 2015 the outstanding balance of advances from officer was -0-.

 

Office space is provided to PhotoAmigo at no additional cost by the sole executive officer.  No provision for these costs has been included in these financial statements as the amounts are not material.  

 

In fiscal years ended July 31, 2015 and 2014, related party shareholders and officers contributed $25,000 and $20,000 respectively to the capital of the Company.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTATNS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 

On July 11, 2013, we were informed by Ronald Chadwick, P.C. ("Ronald Chadwick") that it was terminating its services as our independent registered public accounting firm effective November 30, 2013. Ronald Chadwick's request to terminate was approved by our full board of directors. On February 5, 2014, we retained Cutler and Co., LLC ("Cutler") as our principal independent accountants.

Evaluation of Disclosure Controls and Procedures

An evaluation was performed under the supervision of our management, including our Chief Executive Officer and Chief Financial Officer (principal financial officer), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this Annual Report. Based on that evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that, as of July 31, 2015, our disclosure controls and procedures were not effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms due to material weaknesses in our internal controls described below.

Management's Annual Report on Internal Control Over Financial Reporting.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Exchange Act Rule 13a-15(f). Our internal control system is intended to provide reasonable assurance to our management and board of directors regarding the preparation and fair presentation of published financial statements and that we have controls and procedures designed to ensure that the information required to be disclosed by us in our reports that we will be required to file under the Exchange Act is accumulated and communicated to our management as appropriate to allow timely and informed decisions regarding financial disclosure.

Our management assessed the effectiveness of our internal control over financial reporting as of July 31, 2015. Based on this assessment, management believes that as of July 31, 2015, our internal control over financial reporting was not effective based on those criteria.

Management's assessment identified several material weaknesses in our internal control over financial reporting. These material weaknesses include the following:

· Limited capability to interpret and apply accounting principles generally accepted in the United States;

· Lack of formal accounting policies and procedures that include multiple levels of review.

Inherent Limitations Over Internal Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all errors 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. Our control systems are designed to provide such reasonable assurance of achieving their objectives. 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. Because of 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. These inherent limitations include, but are not limited to, the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

 

 

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Changes in Internal Control Over Financial Reporting.

We have made no change in our internal control over financial reporting during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Attestation Report of the Registered Public Accounting Firm.

This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our independent registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management's report in this annual report on Form 10-K.

 

ITEM 9B.    OTHER INFORMATION

 

None.

 

PART III

 

ITEM 10.    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 

Directors and Executive Officers

 

The following individual presently serves as our sole officer and director:

 

 

Our director is serving a term which expires at the next annual meeting of shareholders and until his or her successor is elected and qualified or until he or she resigns or is removed. Our sole Executive Officer serves at the will of our Board of Directors.

 

The following information summarizes the business experience of each of our officer and directors for at least the last five years:

Robert Heckes was appointed Chief Executive Officer, Chief Financial Officer and sole director in April 2008.  He may be deemed to be a promoter of the Company under the Securities Act of 1933 as amended.  Since 2006, he has been a licensed real estate agent with Sotheby's International Realty and devotes 20% of his time to our affairs.

 

During the past ten years, Mr. Heckes has not been involved in any bankruptcy or insolvency proceedings, has not been involved in any criminal proceedings (excluding traffic violations and other minor offenses), has not been subject to the order of a court of competent jurisdiction or any Federal or State authority regarding business activities, and has not been found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law

 

Board Committees

 

Our Board of Directors has not established a standing Audit, Compensation and Nominating Committee since April 2, 2008 (Inception).

 

 

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Section 16(a) Beneficial Ownership Reporting Compliance

 

We are not registered under the Securities Exchange Act of 1934, as amended, and are not subject to the reporting requirements of Section 16(a).

 

Code of Ethics

 

We have not yet adopted a written Code of Ethics, however, we believe our Chief Executive Officer and Chief Financial Officer conducts himself honestly and ethically with respect to our business affairs.  As the Company is still in the process of putting its formal corporate governance structure into place, we plan to adopt a formal Code of Ethics in the future.

 

ITEM 11.    EXECUTIVE COMPENSATION

 

Outstanding Equity Awards at Fiscal Year-End

 

As of July 31, 2015, there were no outstanding equity awards.  During the five years ended July 31, 2015, we did not grant any equity awards.

ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

As of November 1, 2015, there are a total of 3,018,000 shares of our common stock outstanding, our only class of voting securities currently outstanding. The following table describes the ownership of our voting securities by: (i) each of our officers and directors; (ii) all of our officers and directors as a group; and (iii) each shareholder known to us to own beneficially more than 5% of our common stock. All ownership is direct, unless otherwise stated.

 

____________________

(1) Officer and director.

Changes in Control

On October 2, 2010, Gary Agron, Iliff Street Capital, LLC, and Underwood Family Partners, LTD purchased a total of 1,900,000 shares of the Company's Common stock from Robert Heckes for $.0001 per share in accordance with the terms of the Pre-incorporation agreement dated March 24, 2008. In April 2012  Gary Agron,  Iliff Street Capital,  LLC,  the Underwood Family Partners, LTD and Robert Heckes re-distributed the 2,731,000 amongst themselves.

 

 

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Equity Incentive Plan

We have not adopted an equity incentive plan since April 2, 2008 (Inception).

 

ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 

From time to time, PhotoAmigo receives funds from its sole executive officer to cover temporary working capital requirements.  During the year ended July 31, 2015,  PhotoAmigo received no cash advances.  As of July 31, 2015 the outstanding balance of advances from officer was $-0-.

 

Office space is provided to PhotoAmigo at no additional cost by the sole executive officer.  No provision for these costs has been included in these financial statements as the amounts are not material.  

 

In fiscal years ended July 31, 2015 and 2014, related party shareholders and officers contributed $25,000 and $20,000 respectively to the capital of the Company.

 

ITEM 14.    PRINCIPAL ACCOUNTING FEES AND SERVICES

 

The following table sets forth fees billed by our principal accounting firms of Cutler & Co., LLC and Ronald R Chadwick, PC. in the last two years ended July 31, 2015:

 

 

It is the policy of our Board of Directors to engage the principal accounting firm selected to conduct the financial audit for our company and to confirm, prior to such engagement, that such principal accounting firm is independent of our company. All services of the principal accounting firm reflected above were approved by the Board of Directors.

 

PART IV

 

ITEM 15.    EXHIBITS

 

The following exhibits are filed with or incorporated by referenced in this report:

31.1  Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Robert Heckes.

32.1  Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Robert Heckes.

 

101  Interactive Data Files

 

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SIGNATURES

 

In accordance with Section 13 or 15(d) of the Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

 

 

 

In accordance with the Exchange Act, this Report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.