UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] | Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
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| For the quarterly period ended December 31, 2013 |
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[ ] | Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934 |
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| For the transition period from __________ to__________ |
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| Commission File Number: 000-27645 |
Myriad Interactive Media, Inc.
(Exact name of registrant as specified in its charter)
Delaware | 88-0258277 |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
7 Ingram Drive, Suite 128, Toronto, Ontario, Canada M6M 2L7 |
(Address of principal executive offices) |
(888) 648-9366 Ext. 2 |
(Registrants telephone number) |
___________________________ |
(Former name, former address and former fiscal year, if changed since last report) |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days [X] Yes [ ] No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). [ ] Yes [X] No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
[ ] Large accelerated filer Accelerated filer | [ ] Non-accelerated filer |
[X] Smaller reporting company |
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). [ ] Yes [X] No
State the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date: 129,227,032 as of February 18, 2014.
| TABLE OF CONTENTS |
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PART I FINANCIAL INFORMATION | ||
Item 1: | Financial Statements | 3 |
Item 2: | Managements Discussion and Analysis of Financial Condition and Results of Operations | 5 |
Item 3: | Quantitative and Qualitative Disclosures About Market Risk | 8 |
Item 4: | Controls and Procedures | 8 |
PART II OTHER INFORMATION | ||
Item 1: | Legal Proceedings | 9 |
Item 1A: | Risk Factors | 9 |
Item 2: | Unregistered Sales of Equity Securities and Use of Proceeds | 9 |
Item 3: | Defaults Upon Senior Securities | 9 |
Item 4: | Mine Safety Disclosures | 9 |
Item 5: | Other Information | 9 |
Item 6: | Exhibits | 9 |
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Our financial statements included in this Form 10-Q are as follows: | |
F-1 | Balance Sheet as of December 31, 2013 and June 30, 2013 (unaudited); |
F-2 | Statements of Operations for the three and six months ended December 31, 2013 and 2012 (unaudited); |
F-3 | Statements of Cash Flows for the six months ended December 31, 2013 and 2012 (unaudited); |
F-4 | Notes to Financial Statements |
These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended December 31, 2013 are not necessarily indicative of the results that can be expected for the full year.
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FINANCIAL STATEMENTS/FOOTNOTES]-Please leave this page here
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MYRIAD INTERACTIVE MEDIA, INC. | |||||||||
Balance Sheets | |||||||||
(Unaudited) | |||||||||
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ASSETS | |||||||||
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| December 31, |
| June 30, | ||
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| 2013 |
| 2013 | ||
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CURRENT ASSETS |
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| Cash |
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| $ | 3,211 |
| $ | 3,340 | |
| Accounts receivable |
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| 1,179 |
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| 5,218 | ||
| Deposits |
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| 950 |
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| 950 | ||
| Prepaid expenses |
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| 5,700 |
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| 17,100 | ||
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| Total Current Assets |
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| 11,040 |
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| 26,608 | |
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PROPERTY AND EQUIPMENT, net |
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| 2,657 |
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| 3,475 | |||
INTANGIBLE ASSETS, net |
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| 258,569 |
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| 221,507 | |||
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| TOTAL ASSETS |
| $ | 272,266 |
| $ | 251,590 | |
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LIABILITIES AND STOCKHOLDERS' DEFICIT | |||||||||
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LIABILITIES |
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CURRENT LIABILITIES |
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| Accounts payable and accrued expenses |
| $ | 92,392 |
| $ | 68,392 | ||
| Accrued expenses, related party |
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| 106,405 |
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| 53,987 | ||
| Convertible debt, net |
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| 30,136 |
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| 122,500 | ||
| Derivative liability |
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| 59,557 |
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| - | ||
| Due to shareholder |
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| 18,711 |
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| 18,711 | ||
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| Total Current Liabilities |
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| 307,201 |
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| 263,590 | |
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LONG-TERM LIABILITIES |
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| Notes payable |
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| 166,250 | ||
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| TOTAL LIABILITIES |
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| 307,201 |
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| 429,840 | |
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STOCKHOLDERS' DEFICIT |
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| Preferred stock; 10,000,000 shares authorized, |
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| at $0.001 par value, none issued or outstanding |
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| and outstanding |
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| Common stock; 500,000,000 shares authorized, |
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| at $0.001 par value, 116,107,358 and 75,401,892 |
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| shares issued and outstanding, respectively |
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| 116,506 |
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| 75,401 | ||
| Additional paid-in capital |
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| 12,417,020 |
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| 12,154,717 | ||
| Deferred compensation |
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| (24,449) |
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| (72,299) | ||
| Accumulated other comprehensive loss |
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| 7,803 |
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| 11,754 | ||
| Accumulated deficit |
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| (12,551,815) |
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| (12,347,823) | ||
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| TOTAL STOCKHOLDERS' DEFICIT |
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| (34,935) |
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| (178,250) | |
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| TOTAL LIABILITIES AND |
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| STOCKHOLDERS' DEFICIT |
| $ | 272,266 |
| $ | 251,590 | |
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The accompanying notes are an integral part of these financial statements. |
F-1
MYRIAD INTERACTIVE MEDIA, INC. | ||||||||||||||
Statements of Operations and Other Comprehensive Income | ||||||||||||||
(Unaudited) | ||||||||||||||
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| For the Three Months Ended |
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| For the Six Months Ended | ||||||||
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| December 31, |
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| December 31, | ||||||||
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| 2013 |
| 2012 |
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| 2013 |
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| 2012 | |||
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REVENUES | $ | 19,185 |
| $ | 27,770 |
| $ | 38,049 |
| $ | 33,803 | |||
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OPERATING EXPENSES |
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| Professional fees |
| 62,160 |
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| 32,653 |
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| 123,353 |
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| 258,162 | ||
| General and administrative |
| 35,624 |
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| 21,829 |
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| 59,585 |
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| 51,033 | ||
| Stock-based compensation |
| - |
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| 20,994 |
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| Depreciation and amortization |
| 24,260 |
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| 254 |
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| 47,133 |
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| 516 | ||
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| Total Operating Expenses |
| 122,044 |
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| 54,736 |
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| 251,065 |
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| 309,711 | |
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LOSS FROM OPERATIONS |
| (102,859) |
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| (26,966) |
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| (213,016) |
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| (275,908) | |||
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OTHER INCOME (EXPENSE) |
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| Gain on debt settlement |
| 169,715 |
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| 169,715 |
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| Amortization of debt discount |
| (43,482) |
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| - |
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| (95,636) |
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| Change in value of derivative liability |
| 1,597 |
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| (2,138) |
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| Derivative expense |
| (19,919) |
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| (56,120) |
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| Interest expense |
| (2,772) |
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| (847) |
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| (6,797) |
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| (1,425) | ||
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| Total Other Income (Expense) |
| 105,139 |
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| (847) |
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| 9,024 |
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| (1,425) | |
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INCOME TAX EXPENSE |
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NET INCOME (LOSS) | $ | 2,280 |
| $ | (27,813) |
| $ | (203,992) |
| $ | (277,333) | |||
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OTHER COMPREHENSIVE INCOME (LOSS) |
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| Foreign currency translation adjustment |
| 330 |
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| 3,951 |
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| Total Other Comprehensive Income (Loss) |
| 330 |
| # | - |
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| 3,951 |
| # | - | |
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COMPREHENSIVE INCOME (LOSS) | $ | 2,610 |
| $ | (27,813) |
| $ | (200,041) |
| $ | (277,333) | |||
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| INCOME (LOSS) PER SHARE, BASIC |
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| AND FULLY DILUTED | $ | 0.00 |
| $ | (0.00) |
| $ | (0.00) |
| $ | (0.01) | ||
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WEIGHTED AVERAGE |
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NUMBER OF SHARES OUTSTANDING |
| 186,937,885 |
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| 50,518,470 |
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| 99,801,396 |
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| 50,518,470 | |||
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The accompanying notes are an integral part of these financial statements |
F-2
MYRIAD INTERACTIVE MEDIA, INC. | |||||||||
Statements of Cash Flows | |||||||||
(Unaudited) | |||||||||
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| For the Six Months Ended | ||||
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| December 31, | ||||
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| 2013 |
| 2012 | ||
OPERATING ACTIVITIES |
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| Net loss |
| $ | (203,992) |
| $ | (277,333) | ||
| Adjustments to reconcile net loss to net cash |
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| used by operating activities: |
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| Stock-based compensation |
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| 20,994 |
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| 44,436 | |
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| Common stock and warrants issued for services |
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| 139,891 | |
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| Depreciation and amortization |
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| 47,133 |
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| 529 | |
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| Amortization of deferred compensation |
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| 47,850 |
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| - | |
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| Amortization of debt discount |
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| 95,636 |
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| Derivative expense |
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| 56,120 |
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| Change in value of derivative liability |
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| 2,138 |
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| Gain on debt settlement |
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| (169,715) |
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| Changes in operating assets and liabilities: |
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| (Increase) decrease in accounts receivable |
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| 4,039 |
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| (3,650) | |
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| Decrease in prepaid expenses |
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| 11,400 |
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| Increase (Decrease) in accounts payable and accrued expenses |
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| 27,400 |
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| (1,305) | |
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| Increase in accrued expenses, related party |
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| 52,418 |
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| 20,990 | |
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| Net Cash Used in Operating Activities |
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| (8,579) |
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| (76,442) |
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INVESTING ACTIVITIES |
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| Purchase of intangible assets |
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| (34,627) |
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| Purchase of property and equipment |
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| (95) | |
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| Net Cash Used in Investing Activities |
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| (34,627) |
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| (95) |
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FINANCING ACTIVITIES |
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| Proceeds from common stock |
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| 11,063 |
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| Proceeds from convertible debt |
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| 32,500 |
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| 65,000 | |
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| Proceeds from shareholder loans |
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| 12,418 | |
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| Payments on shareholder loans |
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| Net Cash Provided by Financing Activities |
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| 43,563 |
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| 77,418 |
Exchange rate effect on cash |
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| (486) |
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NET INCREASE (DECREASE) IN CASH |
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| (129) |
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| 881 | |||
CASH AT BEGINNING OF YEAR |
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| 3,340 |
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| 5,579 | |||
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CASH AT END OF PERIOD |
| $ | 3,211 |
| $ | 6,460 | |||
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SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: |
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| CASH PAID FOR: |
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| Interest |
| $ | 12 |
| $ | - | |
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| Income Taxes |
| $ | - |
| $ | - | |
| NON CASH FINANCING ACTIVITIES: |
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| Common stock issued for conversion of debt and interest |
| $ | 101,400 |
| $ | - | |
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| Common stock issued for purchase of intangible asset |
| $ | 48,750 |
| $ | - | |
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| Beneficial conversion feature recorded in connection |
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| with convertible debt |
| $ | 121,201 |
| $ | - | |
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The accompanying notes are an integral part of these financial statements. |
F-3
MYRIAD INTERACTIVE MEDIA, INC.
Notes to the Financial Statements
December 31, 2013
NOTE 1 DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES
Description of Business
Myriad Interactive Media, Inc. (referred to as the Company) is involved in the e-business industry. It provides end-to-end, e-business solutions to businesses interested in doing e-tailing (selling of retail goods on the Internet).
History
The Company was incorporated in Nevada on April 23, 1990, as Investor Club of the United States. The name was changed to Noble Financing Group Inc. (in 1992), then to Newman Energy Technologies Incorporated (1998), then World Star Asia, Inc. (1998), Comgen Corp. (1998) and then to Planet411.com Corporation on February 11, 1999 to reflect its then current business objectives. Planet411.com Inc. was incorporated on July 13, 1999. Planet411.com Corporation was merged with and into Planet411.com Inc. (referred to as the Company) on October 6, 1999 for the sole purpose of changing the Company's jurisdiction of incorporation to Delaware. On July 18, 2007, the Company filed a Certificate of Merger with the Secretary of State of Delaware in order to effectuate a merger whereby the Company (as Planet411.com Inc.) would merge with its wholly-owned subsidiary, Ivany Mining Inc., as a parent/ subsidiary merger with the Company as the surviving corporation. This merger, which became effective as of July 18, 2007, was completed pursuant to Section Title 8, Section 251(c) of the Delaware General Corporation Law. Upon completion of this merger, the Company's name was changed to "Ivany Mining Inc." and the Company's Articles of Incorporation have been amended to reflect this name change. On February 16, 2010 the Companys name was changed to Ivany Nguyen, Inc. On July 6, 2011 the Companys name was changed to Myriad Interactive Media, Inc.
Basis of Presentation
The accompanying interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (SEC), and should be read in conjunction with the audited financial statements and notes thereto contained in the Companys Form 10-K filed with the SEC as of and for the year ended June 30, 2013. In the opinion of management, all adjustments necessary in order for the financial statements to be not misleading have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results expected for the full year. The Company has adopted a June 30 year end.
Foreign Currency Translation
The functional currency of the Company is the U.S. Dollar. Accordingly, assets and liabilities of the subsidiary are translated into U.S. dollars at period-end exchange rates. Revenues and expenses are translated at the average exchange rates in effect for the period. The resulting translation gains or losses are recorded as a component of accumulated other comprehensive income in the consolidated statement of stockholders equity. For the periods ended December 31, 2013 and June 30, 2013, the Company recognized a gain on translation adjustment in the amount of $3,951 and $11,754, respectively.
Comprehensive Loss
Total comprehensive loss represents the net change in stockholders' equity during a period from sources other than transactions with stockholders and as such, includes net loss. For the Company, the components of other comprehensive loss are the changes in the cumulative foreign currency translation adjustments.
Use of Estimates
The preparation of audited financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
For purposes of financial statement presentation, the Company considers all highly liquid investments with a maturity of three months or less, from the date of purchase, to be cash equivalents.
F-4
MYRIAD INTERACTIVE MEDIA, INC.
Notes to the Financial Statements
December 31, 2013
NOTE 1 DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES (CONTINUED)
Property and Equipment
Property and equipment is recorded at cost less accumulated depreciation. Depreciation and amortization is calculated using the straight-line method over the expected useful life of the asset, after the asset is placed in service.
Concentration of Risk
Financial instruments, which potentially subject us to concentrations of credit risk, consist principally of cash. The Companys cash balances are maintained in accounts held by major banks and financial institutions located in the United States. The Company occasionally maintains amounts on deposit with a financial institution that are in excess of the federally insured limits. The risk is managed by maintaining all deposits in high quality financial institutions.
Fair Value of Financial Instruments
The Company has adopted ASC 805, Disclosure About Fair Value of Financial Instruments, which requires the Company to disclose, when reasonably attainable, the fair market values of its assets and liabilities which are deemed to be financial instruments. The carrying amounts and estimated fair values of the Companys financial instruments approximate their fair value due to the short-term nature.
Revenue Recognition
Revenues from fixed price contracts and cost-plus-fee contracts are recognized as services are performed. Revenue is recognized at the time of sale if collection is reasonably assured. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company defers any revenue for which the product has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required.
Advertising Costs
The Company expenses all costs of advertising as incurred. There were $3,888 and $1,950 of advertising costs incurred during the six months ended December 31, 2013 and year ended June 30, 2013, respectively.
Share-Based Compensation
The Company follows the provisions of ASC 718, Share-Based Payment which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. The Company uses the Black-Scholes pricing model for determining the fair value of stock based compensation. Equity instruments issued to non-employees for goods or services are accounted for at fair value and are marked to market until service is complete or a performance commitment date is reached, whichever is earlier.
Earnings (loss) per Share
Basic earnings (loss) per share exclude any dilutive effects of options, warrants and convertible securities. Basic earnings (loss) per share is computed using the weighted-average number of outstanding common stocks during the applicable period. Diluted earnings per share is computed using the weighted-average number of common and common stock equivalent shares outstanding during the period. Common stock equivalent shares are excluded from the computation if their effect is antidilutive.
Income Taxes
The Company provides for income taxes under ASC 740 which requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. The Companys predecessor operated as entity exempt from Federal and State income taxes.
ASC 740 also requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
F-5
MYRIAD INTERACTIVE MEDIA, INC.
Notes to the Financial Statements
December 31, 2013
NOTE 1 DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES (CONTINUED)
Prepaid Expenses
On April 1, 2013 the Company entered into a lease agreement for a term of twelve months. The Company paid $22,800 initially toward the agreement and that amount is being amortized over the term of the lease leaving a balance of $5,700 and $17,100 as prepaid expense as of December 31, 2013 and June 30, 2013, respectively.
Intangible Assets
The Company classifies intangible assets into three categories: (1) intangible assets with definite lives subject to amortization, (2) intangible assets with indefinite lives not subject to amortization and (3) goodwill. The Company determines the useful lives of identifiable intangible assets after considering the specific facts and circumstances related to each intangible asset. Factors the Company considers when determining useful lives include the contractual term of any agreement related to the asset, the historical performance of the asset, the Companys strategy for using the asset, any laws or other local regulations which could impact the useful life of the asset, and other economic factors, including competition and specific market conditions. Intangible assets that are deemed to have definite lives are amortized, on a straight-line basis, over their useful lives, which in the case of computer software is generally 4 years.
Accounts Receivable
The Company establishes provisions for losses on accounts receivable if it determines that it will not collect all or part of the outstanding balance. The Company regularly reviews collectability and establishes or adjusts the allowance as necessary using the specific identification method. At December 31, 2013 and June 30, 2013, no reserve for allowance for doubtful accounts was needed.
Reclassification
Certain balances in previously issued financial statements have been reclassified to be consistent with the current period presentation.
Recent Accounting Pronouncements
The Company has evaluated recent accounting pronouncements and their adoption has not had or is not expected to have a material impact on the Companys financial position or statements of operations or cash flows.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and has negative working capital. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.
In order to continue as a going concern, the Company will need, among other things, additional capital resources. Managements plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
F-6
MYRIAD INTERACTIVE MEDIA, INC.
Notes to the Financial Statements
December 31, 2013
NOTE 3 RELATED PARTY TRANSACTIONS
On April 23, 2012, an officer loaned the Company $1,236. The note bears no interest and is due July 18, 2013. During the year ended June 30, 2013, the Company repaid the entire balance.
On April 25, 2012, an officer loaned the Company $15,812. The note bears no interest and is due April 25, 2013. During the year ended June 30, 2013, the Company repaid the entire balance.
On June 26, 2012, an officer loaned the Company $8,708. The note bears no interest and is due June 26, 2013. During the year ended June 30, 2013, the Company repaid the entire balance.
On July 18, 2012, the Company borrowed $12,418 from a related party in the form of promissory note. The note bears no interest and is due on July 18, 2013. During the year ended June 30, 2013, the Company issued 1,653,120 for the conversion of $12,418 which extinguished the debt in full. As a result, the Company recorded a loss on the settlement of the debt of $20,644.
On January 22, 2013, the Company borrowed $9,928 from a related party in the form of promissory note. The note bears interest at 9% per annum and is due on January 22, 2014. The note is collateralized by 1,241,810 shares of the Companys common stock and has accrued interest in the amount of $842 and $392 as of December 31, 2013 and June 30, 2013, respectively.
On February 26, 2013 the Company borrowed $8,783 from a related party in the form of promissory note. The note is unsecured, accrues interest at 9% per annum and is due on February 26, 2014. The note has accrued interest in the amount of $669 and $270 as of December 31, 2013 and June 30, 2013, respectively.
On July 23, 2013 the Company borrowed $3,168 from a related party in the form of promissory note. The note is unsecured, accrues interest at 9% per annum and is due on July 23, 2014. The note has accrued interest in the amount of $127 and $0 as of December 31, 2013 and June 30, 2013, respectively.
On October 29, 2013 the Company borrowed $3,345 from a related party in the form of promissory note. The note is unsecured, accrues interest at 8% per annum and is due on October 30, 2014. The note has accrued interest in the amount of $47 and $0 as of December 31, 2013 and June 30, 2013, respectively.
On December 2, 2013 the Company borrowed $471 from a related party in the form of promissory note. The note is unsecured, accrues interest at 8% per annum and is due on December 4, 2014. The note has accrued interest in the amount of $3 and $0 as of December 31, 2013 and June 30, 2013, respectively.
On December 2, 2013 the Company borrowed $942 from a related party in the form of promissory note. The note is unsecured, accrues interest at 8% per annum and is due on December 2, 2014. The note has accrued interest in the amount of $6 and $0 as of December 31, 2013 and June 30, 2013, respectively.
An officer of the Company receives $8,000 a month for consulting fees until otherwise modified or cancelled by further action of the board. The Company has a balance due to the officer for consulting services of $96,560 and $53,987 as of December 31, 2013 and June 30, 2013, respectively.
NOTE 4 PROPERTY AND EQUIPMENT
The Companys property and equipment are comprised of the following on December 31, 2013 and June 30, 2013:
| December 31, 2013 | June 30, 2013 |
Computer equipment | $ 4,910 | $ 4,910 |
Accumulated depreciation | (2,253) | (1,435) |
Property and equipment, net | $ 2,657 | $ 3,475 |
Depreciation expense for the six months ended December 31, 2013 and 2012 was $818 and $516, respectively.
F-7
MYRIAD INTERACTIVE MEDIA, INC.
Notes to the Financial Statements
December 31, 2013
NOTE 5 INTANGIBLE ASSETS
The Company has capitalized internally developed computer software costs and costs to acquire computer software from a third party as intangible assets related to the Mingle software. The agreement, mentioned in Note 8, calls for a promissory note in the amount of CAD $175,000 and stock in the amount of $75,000. The total value of the purchased asset was valued as of the date of purchase at $252,951. The Company also incurred additional internally developed computer software costs of $38,796. The Company has determined a 4 year useful life for its computer software.
In the six months ending December 31, 2013, the Company has capitalized internally developed computer software costs and costs to acquire computer software from a third party as intangible assets related to the Mymobipoints software. The total value of the purchased asset was valued as of the date of purchase at $48,750. The Company also incurred additional internally developed computer software costs of $17,371. The Company has determined a 5 year useful life for this computer software.
The Companys intangible assets are comprised of the following on December 31, 2013 and June 30, 2013:
| December 31, 2013 | June 30, 2013 |
Computer software - Mingle | $ 291,747 | $ 274,491 |
Computer software - Mymobipoints | 66,121 | - |
Accumulated depreciation | (99,299) | (52,984) |
Property and equipment, net | $ 258,569 | $ 221,507 |
Total amortization expense for the six months ended December 31, 2013 and 2012 were $46,315 and $0, respectively.
NOTE 6 CONVERTIBLE NOTES PAYABLE
As of December 31, 2013 and June 30, 2013, respectively, the Company had an outstanding balance, net of the debt discount of $30,136 and $122,500. As of December 31, 2013 and June 30, 2013, the total outstanding accrued interest on the convertible notes payable was $3,576 and $1,223, respectively.
On July 31, 2012, the Company issued a convertible promissory note in the amount of $42,500. The note was due on May 2, 2013 and bore interest at 8% per annum. The loan was secured by shares of the Companys common stock. The loan became convertible 180 days after the date of the note. The loan and any accrued interest could then be converted into shares of the Companys common stock at a rate of 55% multiplied by the market price, which is the average of the lowest three (3) trading prices for the common stock during the ten (10) trading day period ending on the latest complete trading day prior to the conversion date. During the year ended June 30, 2013, the Company converted $42,500 of debt and $1,700 of accrued interest into 5,658,636 shares of common stock fully extinguishing the debt.
On October 23, 2012, the Company issued a convertible promissory note in the amount of $22,500. The note was due on July 25, 2013 and bore interest at 8% per annum. The loan was secured by shares of the Companys common stock. The loan became convertible 180 days after the date of the note. The loan and any accrued interest could then be converted into shares of the Companys common stock at a rate of 55% multiplied by the market price, which is the average of the lowest three (3) trading prices for the common stock during the ten (10) trading day period ending on the latest complete trading day prior to the conversion date. During the year ended June 30, 2013, the Company converted $22,500 of debt and $900 of accrued interest into 3,946,666 shares of common stock fully extinguishing the debt.
F-8
MYRIAD INTERACTIVE MEDIA, INC.
Notes to the Financial Statements
December 31, 2013
NOTE 6 CONVERTIBLE NOTES PAYABLE (CONTINUED)
On February 4, 2013, the Company issued a convertible promissory note in the amount of $37,500. The note was due on November 6, 2013 and bore interest at 8% per annum. The loan was secured by shares of the Companys common stock. The loan became convertible 180 days after the date of the note. The loan and any accrued interest could then be converted into shares of the Companys common stock at a rate of 55% multiplied by the market price, which is the average of the lowest three (3) trading prices for the common stock during the ten (10) trading day period ending on the latest complete trading day prior to the conversion date. During the three months ended September 30, 2013, the Company converted $37,500 of debt and $1,500 of accrued interest into 6,823,460 shares of common stock fully extinguishing the debt.
On March 19, 2013, the Company issued a convertible promissory note in the amount of $47,500. The note was due on December 26, 2013 and bore interest at 8% per annum. The loan was secured by shares of the Companys common stock. The loan became convertible 180 days after the date of the note. The loan and any accrued interest could then be converted into shares of the Companys common stock at a rate of 55% multiplied by the market price, which is the average of the lowest three (3) trading prices for the common stock during the ten (10) trading day period ending on the latest complete trading day prior to the conversion date. During the period ended December 31, 2013, the Company converted $47,500 in debt and $1,900 in accrued interest into 17,950,000 shares of common stock fully extinguishing the debt.
On June 17, 2013, the Company issued a convertible promissory note in the amount of $37,500. The note is due on March 19, 2014 and bears interest at 8% per annum. The loan is secured by shares of the Companys common stock. The loan became convertible 180 days after the date of the note. The loan and any accrued interest can then be converted into shares of the Companys common stock at a rate of 55% multiplied by the market price, which is the average of the lowest three (3) trading prices for the common stock during the ten (10) trading day period ending on the latest complete trading day prior to the conversion date. During the period ended December 31, 2013, the Company converted $13,000 of the balance into 4,482,759 shares of common stock.
On August 12, 2013, the Company issued a convertible promissory note in the amount of $32,500. The note is due on May 12, 2014 and bears interest at 8% per annum. The loan is secured by shares of the Companys common stock. The loan becomes convertible 180 days after date of the note. The loan and any accrued interest can then be converted into shares of the Companys common stock at a rate of 55% multiplied by the market price, which is the average of the lowest three (3) trading prices for the common stock during the ten (10) trading day period ending on the latest complete trading day prior to the conversion date.
During the period ended December 31, 2013, the Company converted $98,000 of debt and $3,400 of accrued interest into 29,256,219 shares of common stock.
NOTE 7 DERIVATIVE LIABILITY
In accordance with AC 815, the Company has bifurcated the conversion feature of their convertible notes and recorded a derivative liability on the date each note became convertible. The derivative liability was then revalued on each reporting date.
On February 4, 2013, March 19, 2013, June 17, 2013 and August 12, 2013, the Company issued convertible promissory notes in the amounts of $37,500, $47,500, $37,500 and $32,500 respectively. The loans becomes convertible 180 days after the date of the note into shares of the Companys common stock at a rate of 55% multiplied by the market price, which is the average of the lowest three (3) trading prices for the common stock during the ten (10) trading day period ending on the latest complete trading day prior to the conversion date.
F-9
MYRIAD INTERACTIVE MEDIA, INC.
Notes to the Financial Statements
December 31, 2013
NOTE 7 DERIVATIVE LIABILITY (CONTINUED)
The Company uses the Black-Scholes option pricing model to value the derivative liability. Included in the model to value the derivative liabilities of the above loans are the following assumptions: stock price at valuation date of $0.017 - $0.0075, exercise price of $0.0041 - $0.00935, dividend yield of zero, years to maturity of 0.5, a risk free rate of 0.12% - 0.13%, and annualized volatility of 282% - 385%. The above loans were all discounted in full based on the valuations and the Company recognized an additional derivative expense of $56,120 upon recording of the derivative liabilities. The February 4, 2013 and March 19, 2013 notes were fully converted and the entire debt discount was amortized as of December 31, 2013. Once the loans are fully converted, the remaining derivative liability is reclassified to equity as additional paid-in capital.
ASC 815 requires Company management to assess the fair market value of certain derivatives at each reporting period and recognize any change in the fair market value as another income or expense item. The Companys only asset or liability measured at fair value on a recurring basis is its derivative liability associated with the above convertible debt. During the year ended June 30, 213, the Company recorded a derivative liability of $81,022 in relation to the two aforementioned promissory notes. As of June 30, 2013, both promissory notes were completely converted into shares of common stock and the Company wrote off $76,646 of the derivative liability to additional paid in capital.
At December 31, 2013, the Company revalued the remaining convertible notes balances and has recorded a derivative liability of $59,557.
NOTE 8 NOTE PAYABLE
On September 19, 2012, the Company entered into a note payable agreement with one of its vendors as part of a purchase agreement to acquire all rights to a social media software application from the vendor with an effective date of October 1, 2012. The promissory note in the amount of CAD $175,000 bears no interest and is due on October 1, 2014. The Companys obligation to repay the note in full is conditional upon the Company generating a minimum of $500,000 in sales of the social media software application on or before the due date of October 1, 2014. If the Company does not generate the minimum required sales, the note shall be re-paid on a pro rata basis provided a minimum of $250,000 in sales is generated on or before the due date. The denomination specified in the agreement is CAD, therefore, the Company will translate the CAD into its base currency of USD each period and will record any changes to other comprehensive income.
During the period ended December 31, 2013 the Company received forgiveness of the entire note payable of $169,715. As of December 31, 2013 and June 30, 2013, the outstanding note payable balance was $0 and $166,250, respectively.
NOTE 9 CAPITAL STOCK TRANSACTIONS
Preferred stock
The authorized preferred stock is 10,000,000 shares with a par value of $0.001. As of December 31, 2013 and June 30, 2013, the Company has no shares of preferred stock issued or outstanding.
Common stock
The authorized common stock is 200,000,000 shares with a par value of $0.001. As of December 31, 2013 and June 30, 2013, 107,607,358 and 75,401,892 shares were issued and outstanding, respectively.
During the year ended June 30, 2012, the Company issued 456,131 shares of common stock with 456,131 attached warrants for $45,613. The warrants were exercisable for a one year period at an exercise price of $0.15 and expired unexercised. The Company valued these warrants using the Black-Scholes valuation model using the assumptions detailed in Note 10 and attributed a total of $26,007 of the total $45,613 proceeds to the warrants based on their relative fair value.
F-10
MYRIAD INTERACTIVE MEDIA, INC.
Notes to the Financial Statements
December 31, 2013
NOTE 9 CAPITAL STOCK TRANSACTIONS (CONTINUED)
During the year ended June 30, 2013, the Company issued 1,625,000 shares of common stock for cash proceeds of $32,500.
During the year ended June 30, 2013, the Company issued 7,000,000 shares of common stock for services valued at $110,750. The Company recorded $72,299 to deferred compensation and is amortizing that amount over the term of the service contracts.
During the year ended June 30, 2013 the company issued 9,605,302 shares of common stock for conversion of $65,000, of debt and $2,600 of accrued interest.
Additionally, the Company converted a shareholder loan to common stock during the year ended June 30, 2013. The loan of $12,418 was converted into 1,653,120 common shares. The stock was issued at a price below market value so a loss on the conversion of $20,644 was recorded.
During the year ended June 30, 2013, the Company issued 5,000,000 shares of common stock valued at $75,000 for the purchase of intangible assets.
On July 22, 2013, the Company issued 7,500,000 shares of common stock valued at $48,750 for the purchase of intangible assets. The Company also issued 1,000,000 shares of common stock valued at $6,500 for advisory services that were fully performed at that date.
During the period ended December 31, 2013 the company issued 29,256,219 shares of common stock for conversion of $98,000, of debt and $3,400 of accrued interest.
During the period ended December 31, 2013 the company issued 777,778 shares of common stock in a cashless exchange of 1,000,000 options.
During the period ended December 31, 2013 the company cancelled and retired 41,131 shares of common stock when it found that those shares had been issued in duplicate and therefore in error.
NOTE 10 STOCK OPTIONS AND WARRANTS
The estimated value of the compensatory common stock purchase warrants granted to non-employees in exchange for services and financing expenses is determined using the Black-Scholes evaluation model.
During the year ended June 30, 2013, the Company issued 3,000,000 options for services performed by consultants. These options have a one year life and an exercise price of $0.10 and were valued at a total of $32,545. The Company calculated a relative fair value for these options based on a volatility of 238%, a risk-free interest rate of .17% and a stock price on the date of issuance of $0.02.
On August 14, 2013 the Company granted stock options for 1,000,000 shares of common stock to a consultant for professional fees. The Company calculated a relative fair value for these options of $14,494, based on a volatility of 279%, a risk-free interest rate of .36% and a stock price on the date of issuance of $0.0149. These options had an expiration date of August 14, 2015, however, they were fully exercised on August 22, 2013.
On October 7, 2013, the Companys Board of Directors received the written consent of stockholders in lieu of a special meeting, dated August 23, 2013 to amend the Companys Articles of Incorporation to increase the number of
authorized shares of the common stock from two hundred million (200,000,000) shares to five hundred million (500,000,000) shares.
F-11
MYRIAD INTERACTIVE MEDIA, INC.
Notes to the Financial Statements
December 31, 2013
NOTE 10 STOCK OPTIONS AND WARRANTS (CONTINUED)
Changes in stock options as of December 31, 2013 are as follows:
| Number of Options | Weighted Average Exercise Price | Value if Exercised |
Outstanding, June 30, 2012 | 1,000,000 | $ 0.20 | $ 200,000 |
Granted | 3,000,000 | 0.10 | 300,000 |
Exercised | - | - | - |
Cancelled | - | - | - |
Expired | (4,000,000) | - | - |
Outstanding, June 30, 2013 | - | - | - |
Granted | 1,000,000 | 0.05 | 50.000 |
Exercised | (1,000,000) | 0.05 | (50,000) |
Cancelled | - | - | - |
Expired | - | - | - |
Outstanding, December 31, 2013 | - | $ - | $ - |
Changes in stock purchase warrants as of December 31, 2013 are as follows:
| Number of Warrants | Weighted Average Exercise Price | Value if Exercised |
Outstanding, June 30, 2012 | 24,475,744 | $ 0.11 | $ 2,620,381 |
Granted | - | - | - |
Exercised | - | - | - |
Cancelled | - | - | - |
Expired | (24,475,744) | - | - |
Outstanding, June 30, 2013 | - | - | - |
Granted | - | - | - |
Exercised | - | - | - |
Cancelled | - | - | - |
Expired | - | - | - |
Outstanding, December 31, 2013 | - | $ - | $ - |
There were not any stock purchase warrants outstanding at December 31, 2013.
NOTE 11 COMMITMENTS
On June 7, 2013, the Company entered into a consulting agreement for twelve months of services for a total of $52,000. The agreement calls for the following: months one and two: $10,000 per month; months three and four: $4,000 per month; and months five through twelve: $3,000 per month. The consultant terminated this agreement on July 7, 2013 and no remaining payments will be made.
NOTE 12 FOREIGN CURRENCY TRANSLATION
Due to the fact that the Companys functional currency is the U.S. Dollar and its reporting currency is the U.S. dollar, the Company must recognize the effects of variations in foreign currency exchange rates as gains and losses as a component of other comprehensive income (loss), pursuant to ASC 830 Foreign Currency Translation. To calculate this other comprehensive income and loss, the Company utilizes the current method, whereby assets and liabilities carried in Canadian dollars are translated into U.S. dollars at the exchange rate at the balance sheet date.
During the six months ended December 31, 2013, the Company recognized other comprehensive losses of $3,951.
F-12
MYRIAD INTERACTIVE MEDIA, INC.
Notes to the Financial Statements
December 31, 2013
NOTE 13 INCOME TAXES
For the period ended December 31, 2013, Myriad has incurred a net loss of approximately $194,996 and, therefore, has no tax liability. The net deferred tax asset generated by the loss carry-forward has been fully reserved. The cumulative net operating loss carry-forward is approximately $12,546,770 at December 31, 2013, and will expire beginning in the year 2028.
The provision for Federal income tax consists of the following for the six months ended December 31, 2013 and 2012:
| 2013 | 2012 |
Federal income tax benefit attributable to: |
|
|
Current operations | $ 66,299 | $ 94,293 |
Less: valuation allowance | (66,299) | (94,293) |
Net provision for Federal income taxes | $ 0 | $ 0 |
The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows as of December 31, 2013 and June 30, 2013:
| December 31, 2013 | June 30, 2013 |
Deferred tax asset attributable to: |
|
|
Net operating loss carryover | $ 4,265,902 | $ 4,198,260 |
Valuation allowance | (4,265,902) | (4,198,260) |
Net deferred tax asset | $ 0 | $ 0 |
Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards of approximately $12,546,770 for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carry forwards may be limited as to use in future years.
NOTE 14 SUBSEQUENT EVENTS
During January 2014, the Company has extinguished the remainder of the convertible debt and interest with the issuance of 6,931,818 common shares of stock.
In accordance with ASC 855-10, the Company has analyzed its operations subsequent to December 31, 2013 through the date these financial statements were issued and has determined that it does not have any material subsequent events to disclose in these financial statements other than the events described above.
F-13
Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are forward-looking statements. These forward-looking statements generally are identified by the words believes, project, expects, anticipates, estimates, intends, strategy, plan, may, will, would, will be, will continue, will likely result, and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.
Managements Discussion and Analysis of Financial Condition and Results of Operations
Description of Business
We are a Delaware corporation formed on July 13, 1999. Our principal executive offices are located at 7 Ingram Drive, Suite 128 Toronto, Ontario, Canada M6M 2L7. Our telephone number is 1-800-427-1103. On July 6, 2011, we changed our name to Myriad Interactive Media, Inc. Concurrently with the name change, we shifted our focus to the web development and internet marketing sector. We have formed an interactive marketing team consisting of industry experts in search engine marketing and social media marketing. We plan to manage complex search programs and offer strategic insight into the design, development, launch and maintenance of such programs. In addition, we are focusing on the development of interactive media websites and mobile applications. Myriad Interactive Media, Inc. currently owns two flagship technologies that the company has developed and continues to develop called MingleSuite and MyMobiPoints.com. Our MingleSuite technology is a social media aggregation platform which embeds all of a clients social media networks into one centralized location where they can install our platform onto their website. Our MyMobiPoints.com mobile application and back-end dashboard is a sophisticated enterprise solution which allows businesses a customized application which serves as a social media loyalty program, where users earn points that are redeemable for products and services that a business offers in exchange for sharing social content and becoming a brand ambassador of that business. We have recently begun development of a new application called CryptoCafe.com which will be released in our third quarter ending March 31, 2014.
Website Development
We have a separate team of 4 consultants working on website development and web architecture. Our team is proficient in all programming languages, including the Microsoft .NET framework. Our team can build complete web solutions from scratch, including graphic design and CSS coding. Our web development division is currently producing several projects for the company and generating revenue. The company will continue to develop this business in conjunction with its major in-house projects.
Application Development
We are currently developing an interactive mobile application for the Apple iPhone and Apple iPad devices. We are registered as an Apple developer and we plan on launching this application under our Apple SDK. We will also be introducing mobile development for the Google Android platform. We do not intend on developing
5
applications for any RIM Blackberry mobile devices at this time. We may develop applications for RIMs Blackberry devices in the near future. At this time, we are waiting for the latest OS version by RIM to further understand the revised architecture. We are currently in talks with several customers for the development of additional mobile applications.
Mingle Suite Application
On September 16, 2012, we entered into an Agreement with Kalim Kahn to acquire all rights to a social media software application known as The Mingle Suite Application. The Mingle Suite Application is a unique social media application that combines popular social media networks like Facebook, Twitter, Google+ and YouTube into one place. This will allow for seamless integration and ease of use for corporate clients looking for both an all-in-one solution for social media management, and a unique search engine optimization tool equipped with sophisticated analytics. The application was is comparable to other popular social media platforms like HootSuite, Vitrue, Buddy Media & Radian6.
Our Agreement calls for a total purchase price of $250,000 to be paid for the Mingle Suite Application. The purchase price shall be paid as follows:
· Issuance of 5,000,000 shares of our common stock, to be valued at $75,000; and
· Issuance of a Promissory Note in the amount of $175,000, payable on or before October 1, 2014.
Our obligation to repay the Note in full will be conditional upon the seller generating a minimum of $500,000 in sales of the Mingle Suite Application on or before the due date of October 1, 2014. If the seller does not generate the minimum required sales, the Note shall be re-paid on a pro rata basis provided a minimum of $250,000 in sales is generated on or before the due date. As of this quarter this note has been forgiven and we no longer have this obligation.
On July 24, 2013, we entered into an asset purchase agreement with Brazo River Technologies, LLC. Under the Agreement, we acquired all rights to the MyMobiPoints dashboard which communicates with our mobile application, as well as the MyMobiPoints web domain. MyMobiPoints is a social media points application which we plan to use to enhance our MingleSuite social media technology with a slate of features for mobile device users. The technology is a social media technology that tracks the sharing of content by users where they are awarded pre-set points that are custom to the mobile app technology and integrated within a loyalty points system. These points are redeemable towards products and services that the app client directors towards the app user. It is a sophisticated and modern loyalty points system, and a tremendous asset to the Myriad technology portfolio. As the purchase price for these assets, we agreed to issue a total of 8,500,000 shares
Results of operations for the three and six months ended December 31, 2013 and 2012.
During the three months ended December 31, 2013, we earned revenue of $19,185. We incurred operating expenses in the amount of $122,044 for the three months ended December 31, 2013, consisting of professional fees in the amount of $62,160, general and administrative expenses of $35,624, and depreciation and amortization of $24,260. In addition, we recognized gain on settlement of debt in the amount of $169,715, amortization of debt discount in the amount of $43,482, a change in the value of a derivative liability of $1,597, derivative expense of $19,919, and interest expense of $2,772. As a result, we had net income of $2,280 for the three months ended December 31, 2013.
By comparison, for the three months ended December 31, 2012, we earned revenue of $27,770. We incurred operating expenses of $54,736 during the three months ended December 31, 2012, consisting of professional fees in the amount of $32,653, general and administrative expenses of $21,829, and depreciation and amortization of $254. We also incurred interest expense of $847 during the three months ended December 31, 2012. We incurred a net loss of $27,813 during the three months ended December 31, 2012.
6
During the six months ended December 31, 2013, we earned revenue of $38,049. We incurred operating expenses in the amount of $251,065 for the six months ended December 31, 2013, consisting of professional fees in the amount of $123,353, general and administrative expenses of $59,585, depreciation and amortization of $47,133, and stock based compensation expense of $20,994. In addition, we recognized gain on settlement of debt in the amount of $169,715, amortization of debt discount in the amount of $95,636, a change in the value of a derivative liability of $2,138, derivative expense of $56,120, and interest expense of $6,797. As a result, we had a net loss of $203,992 for the six months ended December 31, 2013.
By comparison, for the six months ended December 31, 2012, we earned revenue of $33.803. We incurred operating expenses of $309,711 during the six months ended December 31, 2012, consisting of professional fees in the amount of $258,162, general and administrative expenses of $51,033, and depreciation and amortization of $516. We also incurred interest expense of $1,425 during the six months ended December 31, 2012. We incurred a net loss of $277,333 during the six months ended December 31, 2012.
Our losses are attributable to operating expenses together with insufficient revenues. We anticipate that both our operating expenses and our revenues will increase as we continue with our plan of operations.
Liquidity and Capital Resources
As of December 31, 2013, we had total current assets of $11,040, consisting of cash in the amount of $3,211, accounts receivable of $1,179, deposits of $950, and prepaid expenses in the amount of $5,700. As of December 31, 2013, we had current liabilities of $307,201, consisting of accounts payable and accrued expenses in the amount of $92,392, accrued expenses related party in the amount of $106,405, convertible debt net of debt discount in the amount of $30,136, a payable due to a shareholder in the amount of $18,711, and a derivative liability of $59,557. Accordingly, we had negative working capital of $296,161 as of December 31, 2013. We have not attained profitable operations and are dependent upon obtaining financing to pursue significant development and expansion of our planned search engine and social media marketing business. We will need to raise approximately $250,000 in new capital in the short-term to put together a working environment for our team to assemble together for efficient production and growth. Although we are engaged in efforts to raise additional equity capital, we currently do not have any firm arrangements for the required equity financing and we may not be able to obtain such financing when required, in the amount necessary, or on terms that are financially feasible.
Subsequent to the reporting period, on January 13, 2014, we obtained funding in the amount of $55,000 under a Convertible Promissory Note issued to Eckart Keil (the Note). The Note bears interest at an annual rate of one percent (1%), with all principal and interest due on or before July 13, 2014. The Note is convertible at the option of the holder to shares of our common stock. The Note is convertible at between 65% and 80% of the market price for our common stock, with the discount to market lessening gradually over the course of the first 180 days. Market price is defined as the average closing price for our common stock over the twenty trading days preceding the conversion.
Off Balance Sheet Arrangements
As of December 31, 2013, there were no off balance sheet arrangements.
Going Concern
We have not attained profitable operations and are dependent upon obtaining financing to pursue significant business development activities. We have a cumulative deficit of $12,551,815 since our inception and require capital for our contemplated operational and marketing activities to take place. Our ability to raise additional capital through the future issuances of the common stock is unknown. The obtainment of additional financing, the successful development of our contemplated plan of operations, and our transition, ultimately, to the
7
attainment of profitable operations are necessary for us to continue operations. For these reasons, our auditors stated in their report that they have substantial doubt we will be able to continue as a going concern.
Critical Accounting Policies
In December 2001, the SEC requested that all registrants list their most critical accounting polices in the Management Discussion and Analysis. The SEC indicated that a critical accounting policy is one which is both important to the portrayal of a companys financial condition and results, and requires managements most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Currently, we do not believe that any accounting policies fit this definition.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
A smaller reporting company is not required to provide the information required by this Item.
Item 4. Controls and Procedures
We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of December 31, 2013. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, Derek Ivany. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2013, our disclosure controls and procedures are not effective. There have been no changes in our internal controls over financial reporting during the quarter ended December 31, 2013.
Management determined that the material weaknesses that resulted in controls being ineffective are primarily due to lack of resources and number of employees. Material weaknesses exist in the segregation of duties required for effective controls and various reconciliation and control procedures not regularly performed due to the lack of staff and resources.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Limitations on the Effectiveness of Internal Controls
Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error. 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 the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. 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 internal 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, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.
8
PART II OTHER INFORMATION
Item 1. Legal Proceedings
We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.
Item 1A: Risk Factors
A smaller reporting company is not required to provide the information required by this Item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None
Item 3. Defaults upon Senior Securities
None
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
None.
Item 6. Exhibits
Exhibit Number | Description of Exhibit |
31.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
31.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
32.1 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
SIGNATURES
In accordance with the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Myriad Interactive Media, Inc. |
|
|
Date: | February 19, 2014 |
|
|
| By: /s/ Derek Ivany Title: Chief Executive Officer, Principal Executive Officer, Chief Financial Officer, Principal Accounting Officer, and Director |
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CERTIFICATIONS
I, Derek Ivany, certify that;
1. |
| I have reviewed this quarterly report on Form 10-Q for the quarter ended December 31, 2013 of Myriad Interactive Media, Inc.; |
2. |
| Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
| Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
| The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. |
| Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. |
| Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. |
| Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. |
| Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. |
| The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a. |
| All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
b. |
| Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: February 19, 2014 |
|
/s/ Derek Ivany |
By: Derek Ivany |
Title: Chief Executive Officer |
CERTIFICATIONS
I, Derek Ivany, certify that;
1. |
| I have reviewed this quarterly report on Form 10-Q for the quarter ended December 31, 2013 of Myriad Interactive Media, Inc.; |
2. |
| Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
| Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. |
| The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. |
| Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. |
| Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. |
| Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. |
| Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. |
| The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a. |
| All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
b. |
| Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: February 19, 2014 |
|
/s/ Derek Ivany |
By: Derek Ivany |
Title: Chief Financial Officer |
CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND
CHIEF FINANCIAL OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the quarterly Report of Myriad Interactive Media, Inc. (the Company) on Form 10-Q for the quarter ended December 31, 2013 filed with the Securities and Exchange Commission (the Report), I, Derek Ivany, Chief Executive Officer and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1.
The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
2.
The information contained in the Report fairly presents, in all material respects, the consolidated financial condition of the Company as of the dates presented and the consolidated result of operations of the Company for the periods presented.
By: | /s/ Derek Ivany |
Name: | Derek Ivany |
Title: | Principal Executive Officer, Principal Financial Officer and Director |
Date: | February 19, 2014 |
This certification has been furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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