See notes to consolidated
financial statements.
Notes to Unaudited Consolidated Financial
Statements
For the period ended June 30, 2013
NOTE 1:
HISTORY OF OPERATIONS
Wikifamilies, Inc.
(“Wikifamilies, Inc.” or the “Company”) was incorporated on June 27, 2008 in the State of Nevada as Kensington
Leasing, Ltd.
The Company’s
initial business plan was to specialize in leasing equipment to a select clientele. Because it took longer than anticipated to
launch the Company’s leasing business, the Company elected to investigate additional lines of business. The leasing
business generated minimal revenues since inception and has been discontinued.
On June 4, 2010, the
Company, through its newly formed wholly-owned subsidiary Allianex Corp., purchased substantially all of the assets of Allianex,
LLC (the “Allianex acquisition”). The Company’s primary business after the Allianex acquisition until the acquisition
of Wikifamilies SA, as discussed below, was the production, marketing and distribution of a retail line of prepaid stored value
cards for the purchase of technology support and security services for electronic devices. Allianex Corp. generated nominal revenues
since the acquisition and the assets were disposed of on December 22, 2011.
On May 20, 2011, the
Company acquired all of the outstanding equity securities of Wikifamilies SA (the “Wikifamilies acquisition”), making
Wikifamilies SA a wholly owned subsidiary of Kensington Leasing, Ltd. For accounting purposes, the Wikifamilies acquisition is
treated as a reverse acquisition with Wikifamilies SA treated as the acquirer and Kensington Leasing, Ltd. as the acquired party.
As a result, the business and financial information included in the report is the business and financial information of Wikifamilies
SA prior to May 20, 2011 and the combined entity after May 20, 2011.
On October 27, 2011,
the Company changed its name to Wikifamilies, Inc. through a short-form merger with its newly formed wholly owned subsidiary of
the same name.
On September 7, 2012,
Wikifamilies Inc., entered into a Share Exchange Agreement with ClairNET Ltd., a Hong Kong entity and their shareholders by which
all of the issued and outstanding shares of ClairNET was to be exchanged for 36,504,056 shares in Wikifamilies Inc, representing
75% of the company’s common stock. Additionally, ClairNET Ltd was to receive 2,500,000 shares of Voting Only Preferred Stock
in Wikifamilies, with 100:1 voting rights. On the same date, the parties also signed a License Agreement by which Wikifamilies
was to acquire exclusive global licensing rights to ClairNET’s products, with an end goal of ClairNET becoming a subsidiary
of Wikifamilies Inc.
On September 8, 2012
the Company and the founders of Wikifamilies SA entered into a Rescission Agreement, whereby the share consideration originally
tendered by the corporation for the acquisition of the Wikifamilies SA assets, was rescinded by mutual agreement. This rescission
unwinds the March 23, 2011, Exchange Agreement between the two parties, and Wikifamilies SA agreed to return the remaining 26,925,000
shares to Wikifamilies treasury, being the full balance of the original 31,500,000 shares tendered as part of the original Exchange
Agreement and the Company returned its interest in Wikifamilies SA to the Wikifamilies SA founders. The Wikifamilies SA founders
retained all assets and liabilities of Wikifamilies SA. Additionally, Wikifamilies Inc forgave the intercompany loans from Wikifamilies
Inc. to Wikifamilies SA in full compensation for non-payment of salaries, fees and expenses to the founders.
On September 10, 2012
the full Board of Directors of the Company elected John Karlsson, Dan Clayton and Vincent Qi as members of the Board of Directors.
On September 10, 2012,
following the Appointment of the new directors, Robert Coleridge, Chris Dengler, Steve Brown, William Hogan and Thomas Hudson resigned
from their positions on the Board. Trisha Malone resigned her position as director and Chief Financial Officer effective September
13, 2012 and Malcolm Hutchinson resigned his position as director and Chief Executive Officer effective September 13, 2012.
The three members
of the Board of Directors elected on September 10, 2012 changed the Company’s name in the state of Nevada to ClairNET, Ltd.
but failed to complete the ClairNET, Ltd. merger, which left the Company with no operating entity, and failed to file any and all
required filings with the Securities and Exchange Commission (the “SEC”), in effect abandoning the Company. After repeated
attempts at contact with the Board of Directors with no response, creditors of the Company petitioned the Eighth Judicial District
Court in Clark County Nevada to receive custodianship of the Company.
On April 2, 2013 the
State of Nevada granted custodianship of the Company to Trisha Malone, the former Chief Financial Officer and a former Director
of the Company, giving her the authority to appoint new officers and directors, to send notice to all stockholders of record noticing
a meeting on at least ten (10) days notice, to pay all fees owed to the SEC and make all necessary filings with the SEC to bring
the Company's filings current. The court also ordered that all common stocks issued as a result of the Exchange Agreement entered
into between the Company and Clairnet, Ltd., a Hong Kong corporation, dated September 7, 2012, were declared null and void and
should be immediately returned to the Company or its transfer agent for cancellation and that the Technology Licensing Agreement
between the Company and Clairnet, Limited, a Hong Kong corporation, dated September 7, 2012, was declared null and void. With no
current operating entity and nominal assets, the Company is currently a “shell” corporation as defined under Rule 12b-2
of the Securities Exchange Act of 1934, as amended.
On April 9, 2013
the duly appointed Custodian of the Company appointed Trisha Malone and Larry A. Zielke as Members of the Board of Directors.
Ms. Malone was also appointed as Chief Executive Officer, Chief Financial Officer and Secretary of the Company and Mr. Zielke
was appointed Vice President and Corporate Counsel.
On May 8, 2013, the
Company entered into a Share Purchase Agreement with John Pena and JP09 & Associates, Inc. (collectively, “Seller”)
pursuant to which the Company shall purchase 60% of the issued and outstanding capital stock (“Shares”) of RC One,
Inc., a Nevada corporation (“RC”). The purchase price for the Shares shall be $807,651 to be paid as follows: (i)
at closing by satisfaction by the Company of a promissory note of Seller owed to the Company in the amount of $207,651 including
interest; and (ii) in installment payments by the Company of $50,000 per month over the next 12 months commencing on the first
month anniversary of the Closing Date and continuing on each subsequent month anniversary for 11 consecutive months. The transaction
was scheduled to close no later than August 31, 2013 per the Share Purchase Agreement. This transaction has not been closed as
of the date of this filing and the Company is unsure if or when the transaction will close.
Although the three
members of the Board of Directors elected on September 10, 2012 changed the Company’s name in the State of Nevada to ClairNET,
Ltd., they did so without proper shareholder approval and they did not change the name of the Company with FINRA, the OTC Markets
or with the SEC. Therefore, we will continue to refer to the Company solely as Wikifamilies, Inc.
Unless the context
otherwise requires, references to the “Company” mean the Company and its former subsidiaries, Allianex Corp. and Wikifamilies
SA. In the context of Common Stock, notes and other securities, references to the “Company” mean Wikifamilies, Inc.
unless otherwise stated.
NOTE 2
:
GOING CONCERN
The Company has not generated any significant
revenue since inception and has funded its operations primarily through the issuance of equity. We are presently a shell corporation
with no operations and no revenues. We are in the process of identifying an operating entity to acquire. Accordingly, the Company’s
ability to identify and accomplish a business strategy and to ultimately achieve profitable operations is dependent upon its ability
to obtain additional debt or equity financing.
These conditions raise substantial doubt about
the Company’s ability to continue as a going concern. 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 outcome of this uncertainty.
NOTE 3:
SIGNIFICANT ACCOUNTING
POLICIES
Basis of Presentation
The accompanying consolidated financial statements
include the accounts of Wikifamilies, Inc. and until its disposition, its formerly 100% wholly-owned subsidiary, Wikifamilies SA. All
intercompany balances and transactions have been eliminated in consolidation. The accompanying financial statements
have been prepared in conformity with accounting principles generally accepted in the United States of America.
Foreign Currency Translation
The financial statements of the Company’s
formerly 100% wholly-owned subsidiary, Wikifamilies SA, were measured using the local currency (the Swiss Franc (CHF) is the functional
currency). Assets and liabilities of Wikifamilies SA were translated at exchange rates as of the balance sheet date. Revenues and
expenses were translated at average rates of exchange in effect during the period. The resulting cumulative translation adjustments
were recorded as a component of comprehensive income (loss), included as a separate item in the statement of operations.
Discontinued Operations
In accordance with Accounting Standards Codification
Topic No. 205-20 “Presentation of Financial Statements – Discontinued Operations” (ASC 205-20), the results of
operations of a component of the entity that either has been disposed of or is classified as held for sale is reported as discontinued
operations if both of the following conditions are met:
|
a.
|
The operations and cash flows of the component have been (or will be) eliminated from the ongoing
operations of the entity as a result of the disposal transaction.
|
|
b.
|
The entity will not have any significant continuing involvement in the operations of the component
after the disposal transaction.
|
In a period in which a component of an entity
either has been disposed of or is classified as held for sale, the income statement of the Company for current and prior periods
will report the results of operations of the component, including any gain or loss recognized, in discontinued operations. The
results of operations of a component classified as held for sale shall be reported in discontinued operations in the period(s)
in which they occur.
Revenue Recognition
Revenue is recognized net of indirect taxes,
rebates and trade discounts and consists primarily of the sale of products, and services rendered.
Revenue is recognized in accordance with Accounting
Standards Codification Topic No. 605-10-S99 “Revenue Recognition” (ASC 605-10-S99) when the following criteria are
met:
|
·
|
evidence of an arrangement exists;
|
|
·
|
delivery has occurred or services have
been rendered and the significant risks and rewards of ownership have been transferred to the purchaser;
|
|
·
|
transaction costs can be reliably measured;
|
|
·
|
the selling price is fixed or determinable;
and
|
|
·
|
collectability is reasonably assured.
|
Property and Equipment
Property and equipment is stated at cost less
accumulated depreciation and impairment. Land is not depreciated. Repairs and maintenance are charged to operations as incurred.
Property and equipment is depreciated on a
straight-line basis over its expected useful life. The depreciation methods, and estimated remaining useful lives are reviewed
at least annually.
Upon classification of property and equipment
as held for sale it is reviewed for impairment. The impairment charged to the income statement is the excess of the carrying value
of the property and equipment over its expected fair value less costs to sell.
Estimates
The presentation of financial statements in
conformity with generally accepted accounting principles 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. Actual results could differ from these estimates.
Fair Value of Financial Instruments
The carrying amounts for the Company’s
cash, investments, accounts payable, accrued liabilities and current portion of long term debt approximate fair value due to the
short-term maturity of these instruments.
Investments
Investments presently consist of funds invested
in debt securities available for sale. Investments are recorded at their amortized cost basis in accordance with Accounting Standards
Codification 320 “Investments – Debt and Equity Securities” (ASC 320). Investments in debt securities that are
classified as available for sale and equity securities that have readily determined fair values that are classified as available
for sale are measured subsequently at fair value.
Intangible Assets
In accordance with Accounting Standards Codification
Topic 985-20 “Costs of Software to be Sold, Leased or Marketed” (ASC 985-20), the Company has capitalized development
costs incurred after the technological feasibility of our Wikifamilies.com product had been established until the product was available
for general release to customers. In accordance with Accounting Standards Codification Topic 350-20 "Intangibles - Goodwill
and Other" (ASC 350-20) intangible assets that have finite lives are amortized over the period during which the asset is expected
to contribute directly or indirectly to future cash flows of the entity (useful lives).
Beneficial Conversion Feature of Convertible
Notes Payable
The convertible feature of certain of our convertible
notes payable provides for a rate of conversion that was at market value at the time of issuance but below market value at market
close on the same day. Such feature is normally characterized as a “Beneficial Conversion Feature” (“BCF”).
Pursuant to Accounting Standards Codification Topic 470-20-25 “Debt” (ASC 470-20-25), the estimated fair value of the
BCF is recorded in the consolidated financial statements as a discount from the face amount of the notes. Such discounts are amortized
to accretion of convertible debt discount over the term of the notes (or conversion of the notes, if sooner).
At June 30, 2013 the Company recorded a debt
discount of $221,125. During the three months ended June 30, 2013, the Company recorded amortization of the BCF in connection with
convertible notes with a principal value of $225,638 in the amount of $90,958. This amount has been reported as a component of
interest expense in the consolidated statement of operations. The debt discount balance at June 30, 2013 was $130,167 net of amortization.
Other Comprehensive Income
We follow Accounting Standards Codification
Topic No. 220, "Comprehensive Income" (ASC 220). This statement establishes standards for reporting comprehensive income
and its components in financial statements. Comprehensive income, as defined, includes all changes in equity (net assets) during
a period from transactions and other events and circumstances from non-owner sources. Examples of items to be included in comprehensive
income, which are excluded from net income, include unrealized gains and losses on available-for-sale securities.
Income Taxes
Accounting Standards Codification Topic No.
740 “Income Taxes” (ASC 740) requires the asset and liability method of accounting be used for income taxes. Under
the asset and liability method, 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. 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.
Earnings (Loss) Per Share
Per Accounting Standards Codification Topic
260 “Earnings Per Share” (ASC 260), basic EPS is determined using net income divided by the weighted average shares
outstanding during the period. Diluted EPS is computed by dividing net income by the weighted average shares outstanding, assuming
all dilutive potential shares of Common Stock were issued.
Basic EPS is determined using net income divided
by the weighted average shares outstanding during the period. Diluted EPS is computed by dividing net income by the weighted average
shares outstanding, assuming all dilutive potential common shares were issued.
NOTE 4: WIKIFAMILIES SA ACQUISITION AND
DISPOSAL
On March 23, 2011, the Company entered into
an Exchange Agreement (the “Exchange Agreement”) with Wikifamilies SA, a corporation organized under the laws of Switzerland,
and the shareholders of Wikifamilies SA, Malcolm Hutchinson, Robert Coleridge, Rigosa Finance Limited, and TC Holdings LLC (collectively,
the “Wikifamilies SA Shareholders”). Pursuant to the Exchange Agreement, on May 20, 2011, the Company purchased all
of the outstanding securities of Wikifamilies SA from the Wikifamilies SA Shareholders in exchange for an aggregate amount of 31,500,000
shares of Common Stock of the Company, valued at approximately $.24 per share, (“Wikifamilies, Inc. Shares”), which
at closing represented approximately 67.99% of the Company’s outstanding Common Stock.
As a result of the Wikifamilies acquisition,
Wikifamilies SA became a wholly owned subsidiary of Kensington Leasing, Ltd. For accounting purposes, the merger was treated as
a reverse acquisition with Wikifamilies SA treated as the acquirer and Kensington Leasing, Ltd. as the acquired party. As a result,
the business and financial information included in the report is the business and financial information of Wikifamilies SA prior
to May 20, 2011 and the combined entity after May 20, 2011.
On September 8, 2012 the Company and the
founders of Wikifamilies SA entered into a Rescission Agreement (the “Wikifamilies SA Rescission Agreement”), whereby
the share consideration originally tendered by the corporation for the acquisition of the Wikifamilies SA assets, was rescinded
by mutual agreement. This Wikifamilies SA Rescission Agreement unwinds the March 23, 2011, Exchange Agreement between the two parties.
Wikifamilies SA agreed to return the remaining 26,925,000 shares of common stock in their possession to the Company’s treasury,
being the full remaining balance of the original 31,500,000 shares of common stock tendered as part of the original Exchange Agreement
and the Company returned its interest in Wikifamilies SA to the Wikifamilies SA founders. The Wikifamilies SA founders retained
all assets and liabilities of Wikifamilies SA and the Company forgave all intercompany loans from the Company to Wikifamilies SA
in full compensation for non-payment of salaries, fees and other expenses owed to the founders. The income statement of the Company
for current and prior periods now report the results of operations of Wikifamilies SA, including any gain or loss recognized, in
discontinued operations.
Assets and Liabilities Disposed Of
|
|
Amount
|
|
Cash
|
|
$
|
22,811
|
|
Prepaid expenses
|
|
|
3,539
|
|
Accounts payable
|
|
|
(38,300
|
)
|
Accrued expenses
|
|
|
(12,136
|
)
|
Accrued salaries
|
|
|
(219,175
|
)
|
Net assets disposed of
|
|
$
|
(243,261
|
)
|
The
26,925,000
shares of common stock returned to the Company’s treasury by Wikifamilies SA were cancelled by the Company.
NOTE 5: FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company follows paragraph 825-10-50-10
of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37
of the FASB Accounting Standards Codification (Paragraph 820-10-35-37”) to measure the fair value of its financial instruments.
Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United
States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability
in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes
the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest
priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable
inputs. The three levels of fair value hierarchy defined by Paragraph 820-10 35-37 are described below:
Level 1 Quoted market prices available in active
markets for identical assets or liabilities as of the reporting date.
Level 2 Pricing inputs other than quoted prices
in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
Level 3 Pricing inputs that are generally observable
inputs and not corroborated by market data.
The carrying amounts of the Company’s
financial assets and liabilities, such as cash and accrued expenses, approximate their fair values because of the short maturity
of these instruments. The Company’s note payable approximates the fair value of such instrument based upon management’s
best estimate of interest rates that would be available to the Company for similar financial arrangement at June 30, 2013.
In accordance with ASC 820, the following
table presents the Company’s fair value hierarchy for its financial assets (investments) as of June 30, 2013 and December
31, 2012:
|
|
|
|
|
Level
|
|
June 30, 2013
|
|
December 31, 2012
|
Level 1
|
|
-
|
|
-
|
Level 2
|
|
-
|
|
-
|
Level 3
|
|
-
|
|
-
|
NOTE 6: FIXED ASSETS
In 2012 the Company purchased computer equipment
in the amount of $873. The Company determined it was necessary to record an impairment of this asset as of December 31, 2012. The
$873 is part of the total asset impairment recorded by the Company for the year ended December 31, 2012.
Asset Classification
|
|
June 30,
2013
|
|
|
December 31,
2012
|
|
|
|
|
|
|
|
|
Computer Equipment
|
|
$
|
–
|
|
|
$
|
873
|
|
|
|
|
–
|
|
|
|
873
|
|
Less Accumulated Depreciation
|
|
|
–
|
|
|
|
–
|
|
Less Impairment
|
|
|
–
|
|
|
|
(873
|
)
|
Net Book Value
|
|
$
|
–
|
|
|
$
|
–
|
|
NOTE 7: NOTES PAYABLE
Through
June 30, 2013 Suprafin, Ltd. loaned
the Company a total of $103,944
for working capital needs and assumed
$38,565 in loans due for a total
loan balance of $142,509 as of
June 30, 2013. These loans were
provided at no interest, payable
on demand. On April 16, 2013 the
Board of Directors elected to issue
a Convertible Note to Suprafin,
Ltd. for loans for past expenses paid totaling
$141,461, the total amount due
to Suprafin, Ltd. as of April 16,
2013. This note is convertible
into shares of the Company’s
Common Stock at $.005 per share.
Through June 30, 2013
Sunatco, Ltd. loaned the Company a total of $24,925 for working capital needs. These loans were provided at no interest, payable
on demand.
On February 14, 2012, Director Thomas Hudson
loaned the Company a total of $50,000 for working capital needs. The loan was originally due on June 30, 2012. On August 17, 2012
Mr. Hudson agreed to extend the due date to June 30, 2013. The loan is currently in default. Should the Company, at its sole discretion,
decide that it is not in a financial position to repay said funds in currency, both parties mutually agree that said amount repayable
may be converted into common shares of the Company calculated at a rate per share of twenty five cents per share or at eighty
percent (80%) of the previous week’s averaged closing price, whichever is the lesser. If the Company does not repay the
loan in cash, as a penalty it shall provide Lender with one hundred thousand (100,000) options enabling him to purchase one hundred
thousand (100,000) shares of Common Stock at a redemption price of twenty five cents ($.25) per share. Redemption of such options
in entirety or in part is at the sole discretion of Lender. By way of interest on such loan, Lender shall be provided with two
hundred thousand (200,000) options enabling him to purchase two hundred thousand (200,000) shares
of
Common Stock at a redemption price of twenty cents ($.20) per share being a total of forty thousand dollars ($40,000). Redemption
of such options in entirety or in part is at the sole discretion of Lender. The options shall remain valid for a period of three
years from the date of this Agreement, after which they shall become null and void. As the options were in lieu of interest, we
recorded an interest expense as of December 31, 2012 of $37,487. The fair value of the options in lieu of interest expenses is
valued using Black-Sholes option-pricing model. The loan was not repaid as of June 30, 2013.
NOTE 8: CONVERTIBLE NOTES
On April 16, 2013
the Board of Directors elected to issue Convertible Notes to Trisha Malone in the amount of $40,000 for past services rendered
which had been previously been recorded as accrued salaries, see Note 9: RELATED PARTY TRANSACTIONS, to Walker River Investments
Corp. for costs paid for the custodianship proceeding in the amount of $44,177, and to Suprafin, Ltd. in the amount of $141,461
for past expenses paid on behalf of the Company which had previously been recorded as note payable, see Note 7: NOTES PAYABLE.
These Convertible Notes are convertible into shares of the Company’s Common Stock at $.005 per share. The Company evaluated
beneficial conversion feature as of issuance date of the Convertible Notes and recorded debt discount in the amount of $221,125.
Debt discount is amortized over term of the Convertible Notes or at conversion of the note if earlier.
On April 16, 2013
Trisha Malone requested that her $40,000 Convertible Note be converted to 8,000,000 shares of Common Stock, and Walker River Investments
Corp. requested that their $44,177 Convertible Note be converted to 8,835,480 shares of Common Stock. As these Convertible Notes
were converted within the conversion term, there was no gain or loss on the conversion. The Company imputed interest at 10% per
annum on the Convertible Note for Suprafin, Ltd. Imputed interest in the amount of $2,907 was recorded as additional paid in capital
as of June 30, 2013. For the six months ended June 30, 2013, the Company recorded debt discount amortization expenses of $90,958.
NOTE 9:
RELATED PARTY TRANSACTIONS
Common Stock Issuances
On June 27, 2008, the Company
issued 800,000 shares of Common Stock to Angelique de Maison, Chief Executive Officer and Chair of the Board at the time, for setup
costs and the Company’s business plan in an amount of $5,000.
On March 31, 2010, the Company
issued 6,000,000 shares of its Common Stock to Ms. de Maison at the price of $0.08 per share, for a total of $480,000 in cash.
On March 23, 2011,
the Company entered into a Stock Purchase Agreement with Ms. de Maison pursuant to which the Company agreed to issue, and
Ms. de Maison agreed to purchase, shares of Common Stock of the Company, in certain installments. Pursuant to the Stock
Purchase Agreement, Ms. de Maison purchased 300,000 shares of Common Stock at a purchase price of $.25 per share upon execution
of the Stock Purchase Agreement and 600,000 shares of Common Stock at a purchase price of $.25 per share upon closing of the Wikifamilies
acquisition on May 20, 2011. In addition, the Company agreed to issue, and Ms. de Maison agreed to purchase, subject to certain
conditions, up to $100,000 of shares of Common Stock per month, at a purchase price of $.25, for a period of 18 months, as requested
by the Company. If certain budgetary projections are not met, the purchase price for future monthly installments will be reduced
to $.20 per share of Common Stock and additional shares of Common Stock will be issued in order to retroactively adjust the purchase
price for any previously purchased shares. As a condition to each installment, the Company must be solvent and in the same line
of business as of the date of the Closing, there must not have been any material breach of the Exchange Agreement by the former
Wikifamilies shareholders, and the Company must not have become subject to any material contingent liability. Furthermore, Ms. de
Maison may terminate her obligations upon the occurrence of certain events, including her removal from the Board of Directors,
the Company undergoing a change in control (as defined in the Stock Purchase Agreement), the Company failing to meet the agreed
upon projected budget by a specified amount, or the Company becoming subject to bankruptcy proceedings or a material contingent
liability.
Ms. de Maison has invested
a total of $185,737 in monthly installments under this agreement for the purchase of 742,947 shares purchased as of December 31,
2011. Ms. de Maison resigned her position as Director of the Company in August 2011 and presently has no obligation to purchase
any additional shares under this agreement.
On February 7, 2012 the
Board of Directors of the Company elected to issue equity awards to directors Thomas Hudson and Stephen Brown. 150,000 restricted
shares of Common Stock were issued to Mr. Hudson and 100,000 shares of Common Stock were issued to Mr. Brown. Market value on
the day of the grants was $0.35 per share. The value of these shares at the market price was recorded as compensation expense.
On July 10, 2012 the Board
of Directors of the Company elected to issue equity awards in lieu of partial payment to director and Chief Financial Officer
Trisha Malone, and Corporate Counsel, David Price. 250,000 restricted shares of Common Stock were issued to both Ms. Malone and
Mr. Price. The fair market value closing price on the day of the grants was $0.098 per share. The value of these shares at the
market closing price was recorded as legal and professional fee expense.
On September 8, 2012 the
Company and the founders of Wikifamilies SA entered into a Rescission Agreement, whereby the share consideration originally tendered
by the corporation for the acquisition of the Wikifamilies SA assets, was Rescinded by Mutual agreement. This Rescission unwound
the March 23, 2011, Exchange Agreement between the two parties, and Wikifamilies SA agreed to return the remaining 26,925,000 shares
to Wikifamilies treasury, being the full balance of the original 31,500,000 shares tendered as part of the original Exchange Agreement
and the Company returned its interest in Wikifamilies SA to the Wikifamilies SA founders.
On April 16, 2013 the Board
of Directors elected to issue Convertible Notes to Trisha Malone in the amount of $40,000 for past services rendered, Suprafin,
Ltd. for past expenses paid totaling $141,461, and to Walker River Investments Corp. for costs paid for the custodianship proceeding
in the amount of $44,177. These notes are convertible into shares of the Company’s Common Stock $.005 per share. Trisha Malone
requested that her $40,000 note be converted to 8,000,000 shares of Common Stock, and Walker River Investments Corp. requested
that their $44,177 note be converted to 8,835,480 shares of Common Stock.
Also on April 16, 2013 the
Board of Directors granted Trisha Malone 2,000,000 shares of Common Stock valued at $19,800 as advance payment for services to
be performed as Chief Executive Officer, Chief Financial Officer and Secretary of the corporation and granted Larry A. Zielke 1,000,000
shares of Common Stock valued at $9,900 as advance payment for services to be performed as Vice President of the Corporation.
Capital Contribution
On November 29, 2009, Ms.
de Maison gifted the URL “sendaprayer.com” to the Company. This asset was originally recorded at the cost incurred
by Ms. de Maison to purchase the URL.
Loans from Thomas Hudson
On February 14, 2012, Director Thomas Hudson
loaned the Company a total of $50,000 for working capital needs. The loan was due on June 30, 2013 and is currently in default.
See Note 7: Notes Payable.
Loans from Angelique de Maison
During the year ended December
31, 2009, Ms. de Maison loaned the Company a total of $14,250 for operating expenses at an interest rate of 10% per year, and an
additional $5,000 for additional start-up costs at no interest. These loans were applied to the purchase of Common Stock (including
$327 in accrued interest) on December 1, 2010 as discussed below.
On March 31, 2010, Ms. de
Maison agreed to purchase from the Company, subject to certain conditions, upon the Company’s demand at any time on or prior
to June 30, 2011, a note in the amount $520,000. During the year ended December 31, 2010, a total of $300,273.24 was borrowed
pursuant to this note. The note was unsecured, not convertible and bore interest at the rate of 10% per annum, payable quarterly,
and was due and payable on December 31, 2012. As discussed below, the outstanding balance on the note was cancelled on December
1, 2010.
From November 2011 through
June 2012, Ms. de Maison loaned the Company a total of $38,565 for working capital needs. These loans were provided at no interest,
payable on demand.
Ms. de Maison subsequently assigned her interest in these loans to Suprafin, Ltd. and the balance due to
Ms. de Maison is $0 as of December 31, 2012.
Accrued Salaries
All unpaid accrued salaries
due to Wikifamilies SA employees were cancelled with the Wikifamilies SA Rescission Agreement in which the Wikifamilies SA founders
retained all assets and liabilities of Wikifamilies SA and the Company forgave all intercompany loans from the Company to Wikifamilies
SA in full compensation for non-payment of salaries, fees and other expenses owed to the founders.
On April 16, 2013 the Board of Directors elected
to issue a Convertible Note to Trisha Malone in the amount of $40,000 for accrued salaries for past services rendered and on the
same day Trisha Malone requested that her Convertible Note be converted to shares of Common Stock. As of June 30, 2013 there were
no accrued salaries due.
NOTE 10:
STOCK-BASED
COMPENSATION
On February 14, 2012, Director Thomas Hudson
loaned the Company a total of $50,000 for working capital needs. The loan was originally due on June 30, 2012. On August 17, 2012
Mr. Hudson agreed to extend the due date to June 30, 2013. Should the Company, at its sole discretion, decide that it is not in
a financial position to repay said funds in currency, both parties mutually agree that said amount repayable may be converted
into common shares of the Company calculated at a rate per share of twenty five cents per share or at eighty percent (80%) of
the previous week’s averaged closing price, whichever is the lesser. If the Company does not repay the loan in cash, as
a penalty it shall provide Lender with one hundred thousand (100,000) options enabling him to purchase one hundred thousand (100,000)
shares of Common Stock at a redemption price of twenty five cents ($.25) per share. Redemption of such options in entirety or
in part is at the sole discretion of Lender. By way of interest on such loan, Lender shall be provided with two hundred thousand
(200,000) options enabling him to purchase two hundred thousand (200,000) shares
of Common Stock
at a redemption price of twenty cents ($.20) per share being a total of forty thousand dollars ($40,000). Redemption of such options
in entirety or in part is at the sole discretion of Lender. The options shall remain valid for a period of three years from the
date of this Agreement, after which they shall become null and void. The loan was not repaid as of June 30, 2013. As the options
were in lieu of interest, we recorded an interest expense at June 30, 2012 of $37,487, the fair value of the options. The fair
value for options granted was estimated at the date of grant using the Black-Scholes option-pricing model was $0.1874.
The fair value for stock options granted
was estimated at the date of grant using the Black-Scholes option-pricing model. The assumptions used are as follows:
|
February 14, 2012
|
|
|
Expected dividend yield
|
0%
|
Risk-free interest rate
|
0.40%
|
Expected volatility
|
198.60%
|
Expected option life (in years)
|
1.5
|
NOTE 11: INCOME TAXES
The Company incurred net losses for the six
months ended June 30, 2013 and therefore had no tax liability. The net deferred tax asset generated by the loss carry forward
has been fully reserved. The cumulative net loss carry forward is approximately $1,056,896 and $1,128,734 as of December 31, 2012
and June 30, 2013 respectively. The Company’s loss carry forward will expire beginning in the year 2028.
NOTE 12:
COMMON STOCK
On June 27, 2008,
the Company issued 800,000 shares of Common Stock to Angelique de Maison, Chief Executive Officer and Chair of the Board at the
time, for setup costs and the Company’s business plan in an amount of $5,000. See Note 9: RELATED PARTY TRANSACTIONS.
In January and February 2009, 513,000 shares
of Common Stock were sold to investors at a purchase price of $0.025 per share, for a total of $12,825 in cash. See Note 13: FORWARD
SPLIT.
On March 31, 2010, the Company issued 6,000,000
shares of its Common Stock to Ms. de Maison at the price of $0.08 per share, for a total of $480,000 in cash.
See
Note 9: RELATED PARTY TRANSACTIONS.
On April 9, 2010, the Company entered
into an Option Purchase Agreement with Merrimen pursuant to which the Company sold to Merrimen for $200,000 an option to purchase
up to 24,000,000 shares of its Common Stock. The Company issued 6,498,128 shares of Common Stock upon exercise of this option in
November and December 2010. See Note 9: RELATED PARTY TRANSACTIONS.
On June 4, 2010, in connection with the Allianex
acquisition, the Company issued 575,000 shares of our Common Stock.
On December 28, 2010, the Company issued
143,000 shares of our Common Stock to Lenco Mobile Inc. to settle Lenco’s assertion that it had earned and was due shares
from the Company and Kenneth Rotman in connection with the acquisition of the assets of Allianex, LLC. These shares of Common Stock
were issued at a value of approximately $.08 per share.
In February 2011, 100,000 of Wikifamilies SA
shares were issued to the Wikifamilies, S.A founders and were valued at $1 per share. $50,000 CHF was received in cash, and $50,000
CHF was used to settle advances due to related party. The 100,000 shares were recast based on the ratio in the Exchange Agreement.
See NOTE 4: WIKIFAMLIES ACQUISITION.
Pursuant to the Stock Purchase Agreement, dated
March 23, 2011, Ms. de Maison purchased 300,000 shares of Common Stock at a purchase price of $.25 per share upon execution of
the Stock Purchase Agreement and an additional 600,000 shares of Common Stock at a purchase price of $.25 per share on May 20,
2011 upon closing of the transactions contemplated in the Stock Purchase Agreement. On September 1, 2011, the Company issued an
additional 742,947 shares of Common Stock to Angelique de Maison at a purchase price of $.25 per share for monthly installment
payments in accordance with this Stock Purchase Agreement. 300,000 shares were issued for cash at $0.25, and 442,947shares valued
at $0.25 per share were issued to settle $110,737 in advances due to Ms. de Maison. See NOTE 9: RELATED PARTY TRANSACTIONS.
On May 20, 2011 the Company issued 31,500,000
shares of Common Stock to the shareholders of Wikifamilies SA upon closing of the Exchange Agreement with Wikifamilies SA as described
in NOTE 4: WIKIFAMLIES ACQUISITION.
On January 10, 2012 Kirkland Trading SA purchased
100,000 shares of Common Stock for $.25 per share for a total of $25,000.
On February 7, 2012 the Company issued 150,000
restricted shares of Common Stock to Mr. Hudson and 100,000 shares of
Common Stock to Mr. Brown.
Market value on the day of the grants was $0.35 per share. The value of these shares at the market price was recorded as compensation
expense. See NOTE 9: RELATED PARTY TRANSACTIONS.
On April 4, 2012 the Board of Directors of
the Company elected to issue equity awards to a consultant in lieu of payment. 100,000 restricted shares of Common Stock were issued.
The fair market value on the day of the grant was $0.14 per share. The fair market value of the closing price per shares was recorded
as legal and professional expense.
On July 10, 2012 the Board
of Directors of the Company elected to issue equity awards in lieu of partial payment to director and Chief Financial Officer
Trisha Malone, and consultants David Price and Rick Wesley. 250,000 restricted shares of Common Stock were issued to both Ms.
Malone and Mr. Price and 50,000 shares were issued to Mr. Wesley. The fair market value on the day of the grants was $0.098 per
share. The fair market value of these shares at the market closing price was recorded as legal and professional fee expense.
On April 16, 2013 the Board
of Directors elected to issue Convertible Notes to Trisha Malone in the amount of $40,000 for past services rendered, Suprafin,
Ltd. for past expenses paid totaling $141,461, and to Walker River Investments Corp. for costs paid for the custodianship proceeding
in the amount of $44,177. These notes are convertible into shares of the Company’s Common Stock $.005 per share. Trisha Malone
requested that her $40,000 note be converted to 8,000,000 shares of Common Stock, and Walker River Investments Corp. requested
that their $44,177 note be converted to 8,835,480 shares of Common Stock.
Also on April 16, 2013 the
Board of Directors granted Trisha Malone 2,000,000 shares of Common Stock valued at $19,800 as advance payment for services to
be performed as Chief Executive Officer, Chief Financial Officer and Secretary of the corporation and granted Larry A. Zielke 1,000,000
shares of Common Stock valued at $9,900 as advance payment for services to be performed as Vice President of the Corporation.
NOTE 13:
FORWARD SPLIT
Effective May 1, 2009, the Company effected
a 40-1 forward split of its common share capital.
NOTE 14: NEW ACCOUNTING PRONOUNCEMENTS
In February 2013, the Financial Accounting
Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2013-02,
Comprehensive Income (Topic 220): Reporting of
Amounts Reclassified Out of Accumulated Other Comprehensive Income
, to improve the transparency of reporting these reclassifications.
Other comprehensive income includes gains and losses that are initially excluded from net income for an accounting period. Those
gains and losses are later reclassified out of accumulated other comprehensive income into net income. The amendments in the ASU
do not change the current requirements for reporting net income or other comprehensive income in financial statements. All of the
information that this ASU requires already is required to be disclosed elsewhere in the financial statements under U.S. GAAP. The
new amendments will require an organization to:
|
-
|
Present (either on the face of the statement where net income is presented or in the notes) the
effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income - but
only if the item reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting
period; and
|
|
-
|
Cross-reference to other disclosures currently required under U.S. GAAP for other reclassification
items (that are not required under U.S. GAAP) to be reclassified directly to net income in their entirety in the same reporting
period. This would be the case when a portion of the amount reclassified out of accumulated other comprehensive income is initially
transferred to a balance sheet account (e.g., inventory for pension-related amounts) instead of directly to income or expense.
|
The amendments apply to all public and private
companies that report items of other comprehensive income. Public companies are required to comply with these amendments for all
reporting periods (interim and annual). The amendments are effective for reporting periods beginning after December 15, 2012, for
public companies. Early adoption is permitted. The adoption of ASU No. 2013-02 is not expected to have a material impact on our
financial position or results of operations.
In January 2013, the FASB issued ASU No. 2013-01,
Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities
, which clarifies
which instruments and transactions are subject to the offsetting disclosure requirements originally established by ASU 2011-11.
The new ASU addresses preparer concerns that the scope of the disclosure requirements under ASU 2011-11 was overly broad and imposed
unintended costs that were not commensurate with estimated benefits to financial statement users. In choosing to narrow the scope
of the offsetting disclosures, the Board determined that it could make them more operable and cost effective for preparers while
still giving financial statement users sufficient information to analyze the most significant presentation differences between
financial statements prepared in accordance with U.S. GAAP and those prepared under IFRSs. Like ASU 2011-11, the amendments in
this update will be effective for fiscal periods beginning on, or after January 1, 2013. The adoption of ASU 2013-01 is not expected
to have a material impact on our financial position or results of operations.
In October 2012, the FASB issued Accounting
Standards Update ASU 2012-04, “Technical Corrections and Improvements” in Accounting Standards Update No. 2012-04.
The amendments in this update cover a wide range of Topics in the Accounting Standards Codification. These amendments include technical
corrections and improvements to the Accounting Standards Codification and conforming amendments related to fair value measurements.
The amendments in this update will be effective for fiscal periods beginning after December 15, 2012. The adoption of ASU 2012-04
is not expected to have a material impact on our financial position or results of operations.
In August 2012, the FASB issued ASU 2012-03,
“Technical Amendments and Corrections to SEC Sections: Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin
(SAB) No. 114, Technical Amendments Pursuant to SEC Release No. 33-9250, and Corrections Related to FASB Accounting Standards Update
2010-22 (SEC Update)” in Accounting Standards Update No. 2012-03. This update amends various SEC paragraphs pursuant to the
issuance of SAB No. 114. The adoption of ASU 2012-03 is not expected to have a material impact on our financial position or results
of operations.
In July 2012, the FASB issued ASU 2012-02,
“Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment” in
Accounting Standards Update No. 2012-02. This update amends ASU 2011-08,
Intangibles – Goodwill and Other (Topic 350):
Testing Indefinite-Lived Intangible Assets for Impairment
and permits an entity first to assess qualitative factors to determine
whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it
is necessary to perform the quantitative impairment test in accordance with Subtopic 350-30,
Intangibles - Goodwill and Other
- General Intangibles Other than Goodwill
. The amendments are effective for annual and interim impairment tests performed for
fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual and interim impairment tests
performed as of a date before July 27, 2012, if a public entity’s financial statements for the most recent annual or interim
period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance. The adoption of ASU
2012-02 has not had a material impact on our financial position or results of operations.
In December 2011, the FASB issued ASU 2011-12,
“Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items out of Accumulated Other
Comprehensive Income in Accounting Standards Update No. 2011-05. This update defers the requirement to present items that are reclassified
from accumulated other comprehensive income to net income in both the statement of income where net income is presented and the
statement where other comprehensive income is presented. The adoption of ASU 2011-12 has not had a material impact on our financial
position or results of operations.
In December 2011, the FASB issued ASU No. 2011-11
“Balance Sheet: Disclosures about Offsetting Assets and Liabilities” (“ASU 2011-11”). This Update requires
an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand
the effect of those arrangements on its financial position. The objective of this disclosure is to facilitate comparison between
those entities that prepare their financial statements on the basis of U.S. GAAP and those entities that prepare their financial
statements on the basis of IFRS. The amended guidance is effective for annual reporting periods beginning on or after January 1,
2013, and interim periods within those annual periods. The Company is currently evaluating the impact, if any, that the adoption
of this pronouncement may have on its results of operations or financial position.
NOTE 15: RESTATEMENT
The Company has identified impairment charges
and other adjustments which required the restatement of amounts previously reported on our Consolidated Balance Sheets, Consolidated
Statements of Operations and Consolidated Statements of Cash Flows as of June 30, 2012.
The following is a summary of the impact of
these restatements on the Company’s Consolidated Statements of Operations as of June 30, 2012:
|
|
Three Months Ended
June 30,
2012
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
2012
|
|
|
Six Months
Ended
June 30,
2012
|
|
|
|
|
|
|
|
Six Months
Ended
June 30, 2012
|
|
|
|
As previously reported
|
|
|
Error
correction
|
|
|
|
|
|
As
restated
|
|
|
As previously reported
|
|
|
Error
correction
|
|
|
|
|
As
restated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
–
|
|
|
$
|
–
|
|
|
|
|
|
$
|
–
|
|
|
$
|
–
|
|
|
$
|
–
|
|
|
|
|
|
$
|
–
|
|
Gross profit
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
|
118,275
|
|
|
|
(95,341
|
)
|
|
(c)
|
|
|
|
22,934
|
|
|
|
231,453
|
|
|
|
(131,356
|
)
|
|
(c)
|
|
|
|
100,097
|
|
Legal and accounting
|
|
|
45,187
|
|
|
|
(36,354
|
)
|
|
(c)
|
|
|
|
8,833
|
|
|
|
114,361
|
|
|
|
(39,258
|
)
|
|
(c)
|
|
|
|
75,103
|
|
Marketing
|
|
|
23,105
|
|
|
|
(23,105
|
)
|
|
(c)
|
|
|
|
–
|
|
|
|
37,836
|
|
|
|
(37,836
|
)
|
|
(c)
|
|
|
|
–
|
|
Research and development
|
|
|
60,000
|
|
|
|
(60,000
|
)
|
|
(a)(c)
|
|
|
|
–
|
|
|
|
60,000
|
|
|
|
(60,000
|
)
|
|
(a)(c)
|
|
|
|
–
|
|
Depreciation and amortization
|
|
|
20,467
|
|
|
|
(20,467
|
)
|
|
(b)
|
|
|
|
–
|
|
|
|
21,307
|
|
|
|
(21,307
|
)
|
|
(b)
|
|
|
|
–
|
|
Total expenses
|
|
|
267,034
|
|
|
|
(235,267
|
)
|
|
|
|
|
|
31,767
|
|
|
|
464,957
|
|
|
|
(289,757
|
)
|
|
|
|
|
|
175,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expense
|
|
|
197,684
|
|
|
|
(161,431
|
)
|
|
(d)
|
|
|
|
36,253
|
|
|
|
197,292
|
|
|
|
(160,000
|
)
|
|
(d)
|
|
|
|
37,292
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary loss from continued operations
|
|
|
(464,718
|
)
|
|
|
393,836
|
|
|
|
|
|
|
(70,882
|
)
|
|
|
(662,249
|
)
|
|
|
449,757
|
|
|
|
|
|
|
(212,492
|
)
|
Loss from discontinued operations
|
|
|
–
|
|
|
|
(214,242
|
)
|
|
(c)
|
|
|
|
(214,242
|
)
|
|
|
–
|
|
|
|
(338,037
|
)
|
|
(c)
|
|
|
|
(338,037
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(464,718
|
)
|
|
$
|
179,594
|
|
|
|
|
|
$
|
(285,124
|
)
|
|
$
|
(662,249
|
)
|
|
$
|
111,720
|
|
|
|
|
|
$
|
(550,529
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain/(loss) on foreign currency conversion
|
|
|
9,270
|
|
|
|
–
|
|
|
|
|
|
|
9,270
|
|
|
|
13,440
|
|
|
|
–
|
|
|
|
|
|
|
13,440
|
|
Unrealized gain/(loss) on available for sale investment
|
|
|
(102,382
|
)
|
|
|
102,382
|
|
|
(d)
|
|
|
|
–
|
|
|
|
(102,382
|
)
|
|
|
102,382
|
|
|
(d)
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive loss
|
|
$
|
(557,830
|
)
|
|
$
|
281,976
|
|
|
|
|
|
$
|
(275,854
|
)
|
|
$
|
(751,191
|
)
|
|
$
|
214,102
|
|
|
|
|
|
$
|
(537,089
|
)
|
(a ) Expense research and development costs previously capitalized.
(b) Reverse depreciation on discontinued operation assets as they were deemed impaired prior to reverse merger and reclass.
(c) Reclass Wikifamilies SA expenses to loss from discontinued operations.
(d) Reverse impairments made in 2012 deemed to be impaired prior to the reverse merger in 2011.
The following is a summary of the impact of
these restatements on the Company’s Statement of Cash Flows as of June 30, 2012:
|
|
Six Months
Ended June
30, 2012
|
|
|
|
|
|
|
|
Six Months
Ended June
30, 2012
|
|
|
|
As previously reported
|
|
|
Error correction
|
|
|
|
|
As restated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(662,249
|
)
|
|
$
|
111,720
|
|
|
(a)
|
|
$
|
(550,529
|
)
|
Non-cash transactions to reconcile cash used in operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
21,307
|
|
|
|
(21,307
|
)
|
|
(b)
|
|
|
–
|
|
Bad debt
|
|
|
155,000
|
|
|
|
(155,000
|
)
|
|
(d)
|
|
|
–
|
|
Asset impairment
|
|
|
5,000
|
|
|
|
(5,000
|
)
|
|
|
|
|
–
|
|
Stocks issued for services
|
|
|
101,490
|
|
|
|
–
|
|
|
|
|
|
101,490
|
|
Stocks due for interest
|
|
|
37,487
|
|
|
|
–
|
|
|
|
|
|
37,487
|
|
Disposal of assets, Allianex business
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
–
|
|
Cash used in operations
|
|
|
|
|
|
|
|
|
|
|
|
|
–
|
|
Increase/(decrease) in accounts payable
|
|
|
54,540
|
|
|
|
–
|
|
|
|
|
|
54,540
|
|
Increase/(decrease) in accrued expenses related party
|
|
|
161,675
|
|
|
|
–
|
|
|
|
|
|
161,675
|
|
Decrease/(increase) in prepaid expenses
|
|
|
32,169
|
|
|
|
–
|
|
|
|
|
|
32,169
|
|
Total cash used in operations
|
|
|
(93,581
|
)
|
|
|
(69,587
|
)
|
|
|
|
|
(163,168
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of fixed assets
|
|
|
(873
|
)
|
|
|
873
|
|
|
(b)
|
|
|
–
|
|
Purchase of intangible assets
|
|
|
(68,714
|
)
|
|
|
68,714
|
|
|
(c)
|
|
|
–
|
|
Total cash used in investing activities
|
|
|
(69,587
|
)
|
|
|
69,587
|
|
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from the sale of stock
|
|
|
25,000
|
|
|
|
–
|
|
|
|
|
|
25,000
|
|
Advances due to related parties
|
|
|
73,284
|
|
|
|
–
|
|
|
|
|
|
73,284
|
|
Proceeds from notes payable, related parties
|
|
|
50,000
|
|
|
|
–
|
|
|
|
|
|
50,000
|
|
Total cash provided by financing activities
|
|
|
148,284
|
|
|
|
–
|
|
|
|
|
|
148,284
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of foreign currency exchange rate on cash
|
|
|
13,440
|
|
|
|
–
|
|
|
|
|
|
13,440
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCREASE/(DECREASE) IN CASH
|
|
|
(1,445
|
)
|
|
|
–
|
|
|
|
|
|
(1,445
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BEGINNING CASH
|
|
|
24,256
|
|
|
|
–
|
|
|
|
|
|
24,256
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ENDING CASH
|
|
$
|
22,811
|
|
|
$
|
–
|
|
|
|
|
$
|
22,811
|
|
(a) Record adjustments made to the Statements of Operations.
(b) Reverse depreciation on discontinued operation assets as they were deemed impaired prior to reverse merger and reclass amortization to discontinued operations.
(c) Research and development costs previously capitalized now reflected in net loss.
(d) Reverse impairments made in 2012 deemed to be impaired prior to the reverse merger in 2011.
The following is a summary of the impact of
these restatements on the Company’s Consolidated Balance Sheet as of June 30, 2012:
|
|
As of
June 30,
2012
|
|
|
|
|
|
|
|
As of
June 30,
2012
|
|
|
|
As previously reported
|
|
|
Error correction
|
|
|
|
|
As restated
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
22,811
|
|
|
$
|
–
|
|
|
|
|
$
|
22,811
|
|
Prepaid expenses
|
|
|
–
|
|
|
|
3,539
|
|
|
(h)
|
|
|
3,539
|
|
Total current assets
|
|
|
22,811
|
|
|
|
3,539
|
|
|
|
|
|
26,350
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Current Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note receivable
|
|
|
–
|
|
|
|
–
|
|
|
(a)
|
|
|
–
|
|
Investments
|
|
|
21,250
|
|
|
|
(21,250
|
)
|
|
(a)
|
|
|
–
|
|
Prepaid expenses
|
|
|
88,539
|
|
|
|
(88,539
|
)
|
|
(a)
|
|
|
–
|
|
Fixed asset, net
|
|
|
14,651
|
|
|
|
(14,651
|
)
|
|
(b)
|
|
|
–
|
|
Intangible assets, net of impairment
|
|
|
336,454
|
|
|
|
(336,454
|
)
|
|
(a)(c)
|
|
|
–
|
|
Total non-current assets
|
|
|
460,894
|
|
|
|
(460,894
|
)
|
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
$
|
483,705
|
|
|
$
|
(457,355
|
)
|
|
|
|
$
|
26,350
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
128,841
|
|
|
$
|
9,354
|
|
|
(d)
|
|
|
138,195
|
|
Accrued officers salaries
|
|
|
259,175
|
|
|
|
–
|
|
|
|
|
|
259,175
|
|
Advances due to related parties
|
|
|
90,965
|
|
|
|
6,960
|
|
|
(e)
|
|
|
97,925
|
|
Notes payable - related party
|
|
|
50,000
|
|
|
|
–
|
|
|
|
|
|
50,000
|
|
Total liabilities
|
|
|
528,981
|
|
|
|
16,314
|
|
|
|
|
|
545,295
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, $.001 par value, 100,000,000 shares authorized,48,122,075 issued and outstanding
|
|
|
48,122
|
|
|
|
–
|
|
|
|
Paid in capital
|
|
|
1,117,678
|
|
|
|
(487,955
|
)
|
|
(a)(f)
|
|
|
629,723
|
|
Other comprehensive income
|
|
|
(67,990
|
)
|
|
|
95,035
|
|
|
(f)(i)
|
|
|
27,045
|
|
Deficit accumulated during development stage
|
|
|
(1,143,086
|
)
|
|
|
(80,749
|
)
|
|
(g)
|
|
|
(1,223,835
|
)
|
Total stockholders' equity
|
|
|
(45,276
|
)
|
|
|
(473,669
|
)
|
|
|
|
|
(518,945
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
$
|
483,705
|
|
|
$
|
(457,355
|
)
|
|
|
|
$
|
26,350
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Impair Kensington Leasing assets that were deemed to be impaired prior to reverse merger.
(b) Impair
Wikifamilies SA fixed assets due to lack of future benefit.
(c) Expense research and development costs previously capitalized.
(d) Accrue previously unaccrued legal expenses.
(e) Write off advances due from CEO as compensation expense.
(f) Adjust gain on currency translation due to difference in translation rates.
(g) Record adjustments made to the Statements of Operations.
(h) Reclass current portion of prepaid expenses.
(i) Reverse impairments made in 2012 deemed to be impaired prior to the reverse merger in 2011.
NOTE 16: SUBSEQUENT EVENTS
On August 27, 2013, the Company held a
Special Meeting of Shareholders. At the Special Meeting, the matters set forth below were put forth to a vote of its
shareholders, and passed with the following final tally of votes of shares voted for, against or withheld as set forth.
After review and tabulation, the ballots
and proxies cast for and against, and those abstaining for approval of the change in the Corporation’s name from Wikifamilies,
Inc. to GEPCO, Ltd. are:
For:
|
|
|
32,531,053
|
Against:
|
|
|
361,844
|
Abstain:
|
|
|
229,677
|
After review and tabulation, the ballots
and proxies cast for and against, and those abstaining for approval of an amendment to the Corporation’s Articles of Incorporation,
to increase the number of authorized shares of Common Stock, from 100 million to 250 million, are:
For:
|
|
|
30,208,506
|
Against:
|
|
|
2,693,952
|
Abstain:
|
|
|
148,116
|
After review and tabulation, the ballots
and proxies cast for and against, and those abstaining for approval of an amendment to the Company’s Articles of Incorporation,
to create 15 million shares of blank check preferred stock are:
For:
|
|
|
23,041,186
|
Against:
|
|
|
1,356,817
|
Abstain:
|
|
|
105,500
|
After review and tabulation, the ballots
and proxies cast for and against, and those abstaining, the ratification of appointment of two current directors of the Corporation
are:
Trisha Malone:
For:
|
|
|
24,148,902
|
Against:
|
|
|
229,984
|
Abstain:
|
|
|
124,617
|
Larry Zielke:
For:
|
|
|
24,107,923
|
Against:
|
|
|
196,373
|
Abstain:
|
|
|
199,207
|