0001161697-14-000038.txt : 20140121 0001161697-14-000038.hdr.sgml : 20140120 20140121171123 ACCESSION NUMBER: 0001161697-14-000038 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20131130 FILED AS OF DATE: 20140121 DATE AS OF CHANGE: 20140121 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OBJ Enterprises, Inc. CENTRAL INDEX KEY: 0001489256 STANDARD INDUSTRIAL CLASSIFICATION: APPAREL & OTHER FINISHED PRODS OF FABRICS & SIMILAR MATERIAL [2300] IRS NUMBER: 271070374 STATE OF INCORPORATION: FL FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-55080 FILM NUMBER: 14538559 BUSINESS ADDRESS: STREET 1: 677 N. WASHINGTON BLVD. CITY: SARASOTA STATE: FL ZIP: 34236 BUSINESS PHONE: 941-952-5825 MAIL ADDRESS: STREET 1: 677 N. WASHINGTON BLVD. CITY: SARASOTA STATE: FL ZIP: 34236 FORMER COMPANY: FORMER CONFORMED NAME: Obscene Jeans Corp. DATE OF NAME CHANGE: 20100413 10-Q 1 form_10-q.htm FORM 10-Q FOR 11-30-2013

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

 

FORM 10-Q

 

x

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

 

For the quarterly period ended November 30, 2013

 

¨

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

 

For the transition period from ____________ to ____________.

 

Commission File Number  333-166064

 

OBJ Enterprises, Inc.

(Exact Name of Registrant as Specified in Charter)

 

Florida

27-1070374

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification Number)

 

677 N. Washington Blvd., Sarasota, FL 34236

(Address of Principal Executive Offices)

 

(941) 952-5825

(Registrant’s Telephone Number)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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.    Yes  x    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  ¨    No  x

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “accelerated filer, large accelerated filer and smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer

¨

Accelerated filer

¨

Non-accelerated filer

¨

Smaller reporting company

x

 

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

 

There were 18,934,339 shares of the Registrant’s common stock, $0.0001 par value outstanding as of January 20, 2014.




OBJ Enterprises, Inc.

(A Development Stage Enterprise)

 

Contents

 

Part I – Financial Information

 

 

 

 

Item 1.

Condensed Consolidated Financial Statements

1

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operation

12

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

16

 

 

 

Item 4.

Controls and Procedures

16

 

 

Part II – Other Information

 

 

 

 

Item 1.

Legal Proceedings

16

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

16

 

 

 

Item 3.

Defaults Upon Senior Securities

16

 

 

 

Item 4.

Mine Safety Disclosures

17

 

 

 

Item 5.

Other Information

17

 

 

 

Item 6.

Exhibits

17

 

 

Signatures

17




PART I — FINANCIAL INFORMATION

 

Statements in this Quarterly Report on Form 10-Q may be “forward-looking statements.” Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions or any other statements relating to our future activities or other future events or conditions. These statements are based on our current expectations, estimates and projections about our business based, in part, on assumptions made by our management. These assumptions are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in the forward-looking statements due to numerous factors, including those risks discussed in this Quarterly Report on Form 10-Q, under “Management’s Discussion and Analysis of Financial Condition or Plan of Operation” and in other documents which we file with the Securities and Exchange Commission (“SEC”).

 

In addition, such statements could be affected by risks and uncertainties related to our financial condition, factors that affect our industry, market and customer acceptance, changes in technology, fluctuations in our quarterly results, our ability to continue and manage our growth, liquidity and other capital resource issues, competition, fulfillment of contractual obligations by other parties and general economic conditions. Any forward-looking statements speak only as of the date on which they are made, and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this Form 10-Q Quarterly Report, except as required by law.



Item 1.

Financial Statements

 

OBJ Enterprises, Inc.

(A Development Stage Enterprise)

Contents

 

Consolidated Financial Statements:

 

 

 

Consolidated Balance Sheets, as of November 30, 2013 and August 31, 2013 (Unaudited)

2

 

 

Consolidated Statements of Operations, for three months ended November 30, 2013 and 2012 and for the period from September 21, 2009 (date of inception) through November 30, 2013 (Unaudited)

3

 

 

Consolidated Statements of Changes in Stockholders’ Equity (Deficit), for the period from September 21, 2009 (date of inception) through November 30, 2013 (Unaudited)

4

 

 

Consolidated Statements of Cash Flows, for the three months ended November 30, 2013 and 2012 and for the period from September 21, 2009 (date of inception) through November 30, 2013 (Unaudited)

5

 

 

Notes to Unaudited Consolidated Financial Statements

6


- 1 -



OBJ Enterprises, Inc.

(A Development Stage Enterprise)

Consolidated Balance Sheets

(Unaudited)


 

 

November 30, 2013

 

August 31, 2013

 

Assets

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash

 

$

29,302

 

$

75,190

 

Accounts receivable

 

 

525

 

 

 

Total current assets

 

 

29,827

 

 

75,190

 

 

 

 

 

 

 

 

 

Total assets

 

$

29,827

 

$

75,190

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Deficit

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

 

$

138,501

 

$

92,381

 

Advances payable

 

 

68,660

 

 

 

Current portion of convertible notes payable, net of discount of $0 and $306, respectively

 

 

 

 

76,311

 

Total current liabilities

 

 

207,161

 

 

168,692

 

 

 

 

 

 

 

 

 

Convertible notes payable, net of discount of $476,529 and $521,936, respectively

 

 

41,428

 

 

41,642

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

248,589

 

 

210,334

 

 

 

 

 

 

 

 

 

Stockholders’ deficit:

 

 

 

 

 

 

 

Preferred stock; $0.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding at November 30, 2013 and August 31, 2013

 

 

 

 

 

Common stock; $0.0001 par value; 100,000,000 shares authorized; 17,334,339 and 15,234,339 issued and outstanding, respectively

 

 

1,733

 

 

1,523

 

Additional paid-in capital

 

 

3,033,010

 

 

2,898,220

 

Deficit accumulated during development stage

 

 

(3,253,505

)

 

(3,034,887

)

Total stockholders’ deficit

 

 

(218,762

)

 

(135,144

)

 

 

 

 

 

 

 

 

Total liabilities and stockholders’ deficit

 

$

29,827

 

$

75,190

 


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


On November 13, 2012, the Company effected a 1:40 reverse stock split. All share and per share amounts have been retroactively restated to reflect the reverse split.


- 2 -



OBJ Enterprises, Inc.

(A Development Stage Enterprise)

Consolidated Statements of Operations

(Unaudited)


 

Three months ended
November 30,

 

 

Period from
September 21, 2009
(date of inception)
through
November 30,

 

 

2013

 

2012

 

 

2013

 

Revenue:

 

 

 

 

 

 

 

 

 

 

Software sales

$

525

 

$

 

 

$

525

 

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

 

General and administrative

 

135,668

 

 

58,009

 

 

 

2,292,829

 

Loss on acquisition of 20% of Novalon

 

25,000

 

 

 

 

 

25,000

 

Game design expenses

 

 

 

 

 

 

191,500

 

Loss from operations

 

(160,143

)

 

(58,009

)

 

 

(2,508,804

)

 

 

 

 

 

 

 

 

 

 

 

Other expense:

 

 

 

 

 

 

 

 

 

 

Interest expense

 

(58,475

)

 

(114,583

)

 

 

(744,701

)

 

 

 

 

 

 

 

 

 

 

 

Net loss

$

(218,618

)

$

(172,592

)

 

$

(3,253,505

)

 

 

 

 

 

 

 

 

 

 

 

Net loss per share – basic and diluted

$

(0.01

)

$

(0.12

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding –
basic and diluted

 

16,506,866

 

 

1,467,720

 

 

 

 

 


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


On November 13, 2012, the Company effected a 1:40 reverse stock split. All share and per share amounts have been retroactively restated to reflect the reverse split.


- 3 -



OBJ Enterprises, Inc.

(A Development Stage Enterprise)

Consolidated Statement of Changes in Stockholders’ Equity (Deficit)

For the Period from September 21, 2009 (Date of Inception) through November 30, 2013

(Unaudited)


 

 

Common Stock

 

 

 

 

 

 

 

 

 

Shares

 

Amount

 

Additional
Paid-in
Capital

 

Accumulated
Deficit

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, September 21, 2009, Date of Inception

 

 

$

 

$

 

$

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock for cash

 

225,000

 

 

23

 

 

8,977

 

 

 

 

9,000

 

Issuance of common stock for cash

 

75,000

 

 

8

 

 

52,492

 

 

 

 

52,500

 

Net loss for the period

 

 

 

 

 

 

 

(20,572

)

 

(20,572

)

Balance, August 31, 2010

 

300,000

 

$

31

 

$

61,469

 

$

(20,572

)

$

40,928

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock for services

 

37,500

 

 

3

 

 

619,997

 

 

 

 

620,000

 

Net loss for the period

 

 

 

 

 

 

 

(1,267,017

)

 

(1,267,017

)

Balance, August 31, 2011

 

337,500

 

$

34

 

$

681,466

 

$

(1,287,589

)

$

(606,089

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock for conversion of debt

 

247,500

 

 

25

 

 

241,828

 

 

 

 

241,853

 

Issuance of common stock for services

 

22,500

 

 

2

 

 

314,998

 

 

 

 

315,000

 

Discount on convertible notes payable

 

 

 

 

 

436,913

 

 

 

 

436,913

 

Net loss

 

 

 

 

 

 

 

(886,997

)

 

(886,997

)

Balance, August 31, 2012

 

607,500

 

$

61

 

$

1,675,205

 

$

(2,174,586

)

$

(499,320

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued for rounding due to stock split

 

539

 

 

 

 

 

 

 

 

 

Issuance of common stock for conversion of debt

 

14,626,300

 

 

1,462

 

 

478,398

 

 

 

 

479,860

 

Discount on convertible notes payable

 

 

 

 

 

744,617

 

 

 

 

744,617

 

Net loss

 

 

 

 

 

 

 

(860,301

)

 

(860,301

)

Balance, August 31, 2013

 

15,234,339

 

$

1,523

 

$

2,898,220

 

$

(3,034,887

)

$

(135,144

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock for conversion of debt

 

2,100,000

 

 

210

 

 

134,790

 

 

 

 

135,000

 

Net loss

 

 

 

 

 

 

 

(218,618

)

 

(218,618

)

Balance, November 30, 2013

 

17,334,339

 

$

1,733

 

$

3,033,010

 

$

(3,253,505

)

$

(218,762

)


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


On November 13, 2012, the Company effected a 1:40 reverse stock split. All share and per share amounts have been retroactively restated to reflect the reverse split.


- 4 -



OBJ Enterprises, Inc.

(A Development Stage Enterprise)

Consolidated Statements of Cash Flows

(Unaudited)


 

 

Three months ended 
November 30,

 

Period from
September 21, 2009
(date of inception)
through
November 30,

 

 

 

2013

 

2012

 

2013

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(218,618

)

$

(172,592

)

$

(3,253,505

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

 

 

Common stock issued for services

 

 

 

 

 

 

935,000

 

Loss on acquisition of 20% of Novalon

 

 

25,000

 

 

 

 

25,000

 

Amortization of discount on convertible note payable

 

 

45,407

 

 

107,183

 

 

655,854

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(525

)

 

 

 

(525

)

Accounts payable and accrued liabilities

 

 

46,120

 

 

4,248

 

 

138,501

 

Accrued interest payable

 

 

13,068

 

 

7,400

 

 

88,847

 

Net cash used by operating activities

 

 

(89,548

)

 

(53,761

)

 

(1,410,828

)

 

 

 

 

 

 

 

 

 

 

 

INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

Cash paid to acquire 20% of Novalon

 

 

(25,000

)

 

 

 

(25,000

)

Net cash used by investing activities

 

 

(25,000

)

 

 

 

(25,000

)

 

 

 

 

 

 

 

 

 

 

 

FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

Proceeds from advances

 

 

68,660

 

 

54,840

 

 

1,403,630

 

Proceeds from issuance of common stock

 

 

 

 

 

 

61,500

 

Net cash provided by financing activities

 

 

68,660

 

 

54,840

 

 

1,465,130

 

 

 

 

 

 

 

 

 

 

 

 

NET CHANGE IN CASH

 

 

(45,888

)

 

1,079

 

 

29,302

 

CASH, BEGINNING OF PERIOD

 

 

75,190

 

 

2,652

 

 

 

CASH, END OF PERIOD

 

$

29,302

 

$

3,731

 

$

29,302

 

 

 

 

 

 

 

 

 

 

 

 

Cash paid during the period for:

 

 

 

 

 

 

 

 

 

 

Interest

 

$

 

$

 

$

 

Taxes

 

$

 

$

 

$

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued for services

 

$

 

$

315,000

 

$

935,000

 

Common Stock issued for conversion of debt

 

$

135,000

 

$

241,853

 

$

311,490

 


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


On November 13, 2012, the Company effected a 1:40 reverse stock split. All share and per share amounts have been retroactively restated to reflect the reverse split.


- 5 -



OBJ Enterprises, Inc.

(A Development Stage Enterprise)


Notes to Unaudited Condensed Consolidated Financial Statements


1. Background Information


OBJ Enterprises, Inc. (the “Company”), a Florida corporation, was originally formed as Obscene Jeans Corp. to design, develop, wholesale, market, distribute and sell a woman’s line of apparel using the name “Obscene Brand Jeans.” On July 27, 2012, the Company changed its name to OBJ Enterprises, Inc.


On November 10, 2011, the Company formed Obscene Interactive, LLC (“Obscene Interactive”), a wholly-owned subsidiary to pursue emerging opportunities in the digital gaming industry. Obscene Interactive actively pursues potential acquisition targets in the online and social media industry while exploring consumer gaming trends to develop games internally through joint venture agreements and partnerships.


On May 9, 2012 (revised on June 9, 2012), the Company engaged Street Source, LLC to act as an independent gaming developer for the Company through a joint venture agreement. The primary focus of this partnership is to develop online and social games that leverage emerging consumer gaming portals; such as smart phones and mobile devices.  On May 21, 2013, the joint venture formed Novalon Technologies, LLC (“Novalon”) to act as the operating entity for the joint venture. OBJE owned 80% of Novalon.


The Company was incorporated on September 21, 2009 (Date of Inception) with its corporate headquarters located in Sarasota, Florida. Its fiscal year-end is August 31.


2. Going Concern


For the three months ended November 30, 2013, the Company had a net loss of $218,618, and negative cash flow from operating activities of $89,548. As of November 30, 2013, the Company has negative working capital of $177,334. The Company has not emerged from the development stage.


These factors raise a substantial doubt about the Company’s ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the possible inability of the Company to continue as a going concern.


The Company does not have the resources at this time to repay its credit and debt obligations, make any payments in the form of dividends to its shareholders or fully implement its business plan. Without additional capital, the Company will not be able to remain in business.


Management has plans to address the Company’s financial situation as follows:


In the near term, management plans to continue to focus on raising the funds necessary to fully implement the Company’s business plan. Management will continue to seek out debt financing to obtain the capital required to meet the Company’s financial obligations. There is no assurance, however, that lenders will continue to advance capital to the Company or that the new business operations will be profitable. The possibility of failure in obtaining additional funding and the potential inability to achieve profitability raise doubts about the Company’s ability to continue as a going concern.


- 6 -



In the long term, management believes that the Company’s projects and initiatives will be successful and will provide cash flow to the Company which will be used to finance the Company’s future growth. However, there can be no assurances that the Company’s planned activities will be successful, or that the Company will ultimately attain profitability. The Company’s long term viability depends on its ability to obtain adequate sources of debt or equity funding to meet current commitments and fund the continuation of its business operations, and the ability of the Company to ultimately achieve adequate profitability and cash flows from operations to sustain its operations.


3. Significant Accounting Policies


Interim Financial Statements – The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, these condensed financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and such adjustments are of a normal recurring nature. These financial statements should be read in conjunction with the financial statements for the year ended August 31, 2012 and notes thereto and other pertinent information contained in our Form 10-K the Company has filed with the Securities and Exchange Commission (the “SEC”).


The results of operations for the three month period ended November 30, 2013 are not necessarily indicative of the results for the full fiscal year ending August 31, 2014.


Basis of Presentation – The condensed consolidated Financial Statements and related disclosures have been prepared pursuant to the rules and regulations of the SEC.  The Financial Statements have been prepared using the accrual basis of accounting in accordance with Generally Accepted Accounting Principles (“GAAP”) of the United States (See Note 2 regarding the assumption that the Company is a “going concern”).


Principles of Consolidation – These condensed consolidated financial statements contain the accounts of the Company and its wholly owned subsidiary Obscene Interactive. All material intercompany accounts and transactions have been eliminated in consolidation. The year-end for the company and its subsidiary is August 31.


Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that 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 revenue and expenses during the reporting period. Actual results could differ.


Cash and cash equivalents – For the purpose of the financial statements cash equivalents include all highly liquid investments with maturity of three months or less. Cash and cash equivalents were $29,302 and $75,190 at November 30, 2013 and August 31, 2013, respectively.


Cash Flows Reporting – The Company follows ASC 230, Statement of Cash Flows, for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by ASC 230, Statement of Cash Flows, to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period.


Development Stage Entity – The Company is a development stage company as defined by section ASC 915, Development Stage Entities.  The Company is still devoting substantially all of its efforts on establishing the business and its planned principal operations have not commenced.  All losses accumulated since inception have been considered as part of the Company’s development stage activities. The Company began generating revenue during the three months ended November 30, 2013. Once revenue exceeds a nominal amount, the Company expects to exit the development stage.


Financial instruments – The Company’s balance sheet includes certain financial instruments. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization.


- 7 -



ASC 820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:


·

Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

 

 

·

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

 

 

·

Level 3 - Inputs that are both significant to the fair value measurement and unobservable.


Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of November 30, 2013. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments


Share-based Expense – ASC 718, Compensation – Stock Compensation, prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired.  Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights.  Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).


The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, Equity – Based Payments to Non-Employees.  Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable:  (a) the goods or services received; or (b) the equity instruments issued.  The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.


Revenue Recognition – We evaluate revenue recognition based on the criteria set forth in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 605, Revenue Recognition and ASC 985-605, Software: Revenue Recognition. Our revenue is derived from the sale of mobile game downloads which are delivered electronically through the Google Play or iTunes platforms. Our revenue is classified as product revenue.


We evaluate and recognize revenue when all four of the following criteria are met:


·

Evidence of an arrangement. Evidence of an agreement with the customer that reflects the terms and conditions to deliver the related products or services must be present.

 

 

·

Fixed or determinable fee. Our games are sold at a fixed price which is published on the Google Play and iTunes platforms.

 

 

·

Collection is deemed probable. Collection is deemed probable if we expect the customer to be able to pay amounts under the arrangement as those amounts become due. Customers pay for our games prior to downloading them; however, we must still collect those funds from Google or Apple.

 

 

·

Delivery. For digital downloads, delivery is considered to occur when the software is made available to the customer for download.


- 8 -



Recent accounting pronouncements – Except for rules and interpretive releases of the SEC under authority of federal securities laws and a limited number of grandfathered standards, the FASB Accounting Standards Codification™ (“ASC”) is the sole source of authoritative GAAP literature recognized by the FASB and applicable to the Company. We have reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration.


4. Advances from Third Parties


During the three months ended November 30, 2013, the Company received net, non-interest bearing advances from certain third parties totaling $68,660. The total amount due under these advances as of November 30, 2013 and August 31, 2013 was $68,660 and $0, respectively.  These advances are not collateralized and are due on demand.


5. Convertible notes payable


Convertible notes payable consist of the following as of November 30, 2013 and August 31, 2013:


 

 

November 30, 2013

 

August 31,
2013

 

Convertible note payable, dated August 31, 2011, bearing interest at 10% per annum, matures on August 31, 2013 and convertible into shares of common stock at $0.05 per share

 

 

 

 

19,468

 

Convertible note payable, dated January 31, 2013, bearing interest at 10% per annum, matures on January 31, 2015 and convertible into shares of common stock at $0.10

 

 

243

 

 

50,412

 

Convertible note payable, dated May 31, 2013, bearing interest at 10% per annum, matures on May 31, 2015 and convertible into shares of common stock at $0.05

 

 

172,450

 

 

172,450

 

Convertible note payable, dated August 31, 2013, bearing interest at 10% per annum, matures on August 31, 2015 and convertible into shares of common stock at $0.05

 

 

323,895

 

 

323,895

 

Accrued interest payable

 

 

21,369

 

 

73,664

 

Total convertible notes payable and accrued interest

 

 

517,957

 

 

639,889

 

Less: current portion of convertible notes payable and accrued interest

 

 

 

 

(76,617

)

Less: discount on noncurrent convertible notes payable

 

 

(476,529

)

 

(521,630

)

Noncurrent convertible notes payable, net of discount

 

$

41,428

 

$

41,642

 


The Company accrued interest in the amount of $13,068 during the three months ended November 30, 2013. This amount was unpaid as of November 30, 2013 and is included in convertible notes payable as of that date. During the three months ended November 30, 2013, discount on convertible notes payable in the amount of $45,407 was amortized to interest expense.


During the three months ended November 30, 2013, the holders of the Convertible Note Payable dated August 31, 2011, elected to convert principal and accrued interest in the amounts shown below into shares of common stock at a rate of $0.05 per share. On the conversion date, the unamortized discount related to the principal amount converted was immediately amortized to interest expense. No gain or loss was recognized on the conversions as they occurred within the terms of the agreement.


Date

 

Amount Converted

 

Number of
Shares Issued

 

Unamortized Discount

October 1, 2013

 

30,000

 

600,000

 

 

October 4, 2013

 

30,000

 

600,000

 

 

October 15, 2014

 

15,000

 

300,000

 

 

Total

 

$  75,000

 

1,500,000

 

$  — 


During the three months ended November 30, 2013, the holders of the Convertible Note Payable dated January 31, 2013, elected to convert principal and accrued interest in the amounts shown below into shares of common stock at a rate of $0.10 per share. On the conversion date, the unamortized discount related to the principal amount converted was immediately amortized to interest expense. No gain or loss was recognized on the conversions as they occurred within the terms of the agreement.


- 9 -



Date

 

Amount Converted

 

Number of
Shares Issued

 

Unamortized Discount

October 8, 2013

 

$  60,000

 

600,000

 

$  21,805

Total

 

$  60,000

 

600,000

 

$  21,805


5. Stockholders’ Equity


Preferred


The Company’s Board of Directors has authorized 10,000,000 million shares of preferred stock with a par value of $0.0001 to be issued in series with terms and conditions to be determined by the Board of Directors. As of November 30, 2013 and August 31, 2013, no preferred stock was issued or outstanding.


Common


The Company has authorized 100,000,000 shares of $0.0001 par value common stock. There were 17,334,339 and 15,234,339 shares of common stock outstanding as of November 30, 2013 and August 31, 2013, respectively.


On November 13, 2012, the Company effected a one-for-forty reverse stock split. All share and per share amounts have been retroactively restated to reflect the reverse split.


On September 4, 2012, the Company issued 126,300 shares of common stock as a result of the conversion of the Convertible Note Payable in the amount of $25,260.


On November 16, 2012, the Company issued 5,260,000 shares of common stock as a result of the conversion of the Convertible Note Payable in the amount of $52,600.


On November 26, 2012, the Company issued 1,160,000 shares of common stock as a result of the conversion of the Convertible Note Payable in the amount of $58,000.


On February 5, 2013, the Company issued 700,000 shares of common stock as a result of the conversion of the Convertible Note Payable in the amount of $35,000.


On April 2, 2013, the Company issued 780,000 shares of common stock as a result of the conversion of the Convertible Note Payable in the amount of $7,800.


On April 8, 2013, the Company issued 780,000 shares of common stock as a result of the conversion of the Convertible Note Payable in the amount of $7,800.


On April 26, 2013, the Company issued 460,000 shares of common stock as a result of the conversion of the Convertible Note Payable in the amount of $4,600.


On May 17, 2013, the Company issued 980,000 shares of common stock as a result of the conversion of the Convertible Note Payable in the amount of $9,800.


On May 23, 2013, the Company issued 490,000 shares of common stock as a result of the conversion of the Convertible Note Payable in the amount of $24,500.


On June 4, 2013, the holders of the Convertible Note Payable dated August 31, 2011 elected to convert principal in the amount of $24,500 into 490,000 shares of common stock in accordance with the terms of the note.


On June 6, 2013, the holders of the Convertible Note Payable dated August 31, 2011 elected to convert principal in the amount of $25,000 into 500,000 shares of common stock in accordance with the terms of the note.


On June 19, 2013, the holders of the Convertible Note Payable dated August 31, 2011 elected to convert principal in the amount of $25,000 into 500,000 shares of common stock in accordance with the terms of the note.


- 10 -



On June 20, 2013, the Company signed a joint venture agreement with Bluff Wars, Inc. to develop the Bluff Wars mobile game application for the Android operating system and market (“Bluff Wars Game”). Under the terms of the joint venture agreement, the Company will provide funding of up to $30,000 for the development costs and consulting services for marketing the Bluff Wars Game. The Company will receive between 10 and 20 percent of the profits from the Bluff Wars Game depending on the amount of the Company’s contribution to the project.


6. Acquisition of Novalon


On October 4, 2013, OBJE purchased Source Street’s interest in Novalon and Source Street’s rights to 20% of the game and profits that resulted from the Revised Joint Venture Agreement. As of October 4, 2013, Novalon’s brand name and intellectual property under Novalon Games are collectively a wholly owned subsidiary of the Company. OBJE paid a total of $25,000 to acquire this interest from Source Street, with $20,000 paid immediately and the remaining $5,000 was paid upon the successful completion of the Creature Taverns game. This acquisition represented the acquisition on the remaining 20% of Novalon as OBJE owned 80% under the Revised Joint Venture Agreement. This was an acquisition of a company already controlled by OBJE. No amounts were recognized on the balance sheet as a result of this acquisition as Novalon had no assets prior to the acquisition. In accordance with ASC 985-20-25-1, all costs incurred to establish technological feasibility of a computer software product to be sold are research and development costs. The costs to acquire Novalon were expensed as a loss on the acquisition of 20% of Novalon.


7. Subsequent Events


Management has evaluated subsequent events through the date the financial statements were issued:


During the three months ended November 30, 2013, the holders of the Convertible Note Payable dated May 31, 2013, elected to convert principal and accrued interest in the amounts shown below into shares of common stock at a rate of $0.05 per share. On the conversion date, the unamortized discount related to the principal amount converted was immediately amortized to interest expense. No gain or loss was recognized on the conversions as they occurred within the terms of the agreement.


Date

 

Amount Converted

 

Number of Shares Issued

 

Unamortized Discount

December 2, 2013

 

$  80,000

 

1,600,000

 

$  53,591

 

 

 

 

 

 

 

Total

 

$  80,000

 

1,600,000

 

$  53,591


Based on our evaluation no other events have occurred requiring adjustment or disclosure.


- 11 -



PART I — FINANCIAL INFORMATION


Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operation


THIS FILING CONTAINS FORWARD-LOOKING STATEMENTS. THE WORDS “ANTICIPATED,” “BELIEVE,” “EXPECT,” “PLAN,” “INTEND,” “SEEK,” “ESTIMATE,” “PROJECT,” “WILL,” “COULD,” “MAY,” AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. THESE STATEMENTS INCLUDE, AMONG OTHERS, INFORMATION REGARDING FUTURE OPERATIONS, FUTURE CAPITAL EXPENDITURES, AND FUTURE NET CASH FLOW. SUCH STATEMENTS REFLECT THE COMPANY’S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND FINANCIAL PERFORMANCE AND INVOLVE RISKS AND UNCERTAINTIES, INCLUDING, WITHOUT LIMITATION, GENERAL ECONOMIC AND BUSINESS CONDITIONS, CHANGES IN FOREIGN, POLITICAL, SOCIAL, AND ECONOMIC CONDITIONS, REGULATORY INITIATIVES AND COMPLIANCE WITH GOVERNMENTAL REGULATIONS, THE ABILITY TO ACHIEVE FURTHER MARKET PENETRATION AND ADDITIONAL CUSTOMERS, AND VARIOUS OTHER MATTERS, MANY OF WHICH ARE BEYOND THE COMPANY’S CONTROL. SHOULD ONE OR MORE OF THESE RISKS OR UNCERTAINTIES OCCUR, OR SHOULD UNDERLYING ASSUMPTIONS PROVE TO BE INCORRECT, ACTUAL RESULTS MAY VARY MATERIALLY AND ADVERSELY FROM THOSE ANTICIPATED, BELIEVED, ESTIMATED, OR OTHERWISE INDICATED. CONSEQUENTLY, ALL OF THE FORWARD-LOOKING STATEMENTS MADE IN THIS FILING ARE QUALIFIED BY THESE CAUTIONARY STATEMENTS AND THERE CAN BE NO ASSURANCE OF THE ACTUAL RESULTS OR DEVELOPMENTS.


The following discussion and analysis of our financial condition and plan of operations should be read in conjunction with our financial statements and related notes appearing elsewhere herein. This discussion and analysis contains forward-looking statements including information about possible or assumed results of our financial conditions, operations, plans, objectives and performance that involve risk, uncertainties and assumptions. The actual results may differ materially from those anticipated in such forward-looking statements. For example, when we indicate that we expect to increase our product sales and potentially establish additional license relationships, these are forward-looking statements. The words expect, anticipate, estimate or similar expressions are also used to indicate forward-looking statements.


OVERVIEW OF THE COMPANY


OVERVIEW


We are a development stage company and were incorporated in the State of Florida on September 21, 2009, as a for-profit company, with an established fiscal year end of August 31. The original intent of the Company is to design a woman’s line of jeans branded as “Obscene Brand Jeans” internally and enter into outsourcing agreements for the manufacturing, marketing, selling and distributing agreements with independent agents, each of whom is to be granted exclusive rights to market and sell “Obscene Brand Jeans” in its respective territory. The intent was to include a line of complimentary t-shirts, jackets and sweatshirts to accent the base of our intended collection.


On November 10, 2011, the Company formed Obscene Interactive, LLC, a wholly-owned subsidiary. Obscene Interactive was established to identify emerging trends and companies within the social, online and mobile media space for the purpose of acquisitions, joint ventures and global licensing of technology platforms and algorithms. As of the date of this filing, Obscene Interactive has no assets or liabilities; however, it is in the final stages of negotiating a funding arrangement for an early stage gaming company based in Texas, and is scheduled to submit its first internally developed mobile gaming application to the Apple App Store in April 2013, with Android versions submitted shortly thereafter.


On November 2, 2011, our former Chief Executive Officer, Rachel Stark-Cappelli, resigned all positions with the Company. As a result of Ms. Stark-Cappelli’s resignation, the Company is reviewing its jeans and apparel business. The Company established a subsidiary to pursue opportunities in the social networking sector. As a result of the Company’s review of its jeans and apparel business, the Company may decide to cease the jeans and apparel business and concentrate on its social networking business. Alternatively, the Company could pursue both opportunities simultaneously and use the Company’s social networking business as a marketing platform for its jeans and apparel. During the period of review, the Company continues to pursue both opportunities.


- 12 -



On May 9, 2012, we entered into a joint venture agreement (the “Joint Venture Agreement”) with Source Street, LLC, a Texas limited liability company (“Source Street”). The purpose of the joint venture is to fund the planning, development and launch of online and mobile games across social platforms for fun, educational and corporate training purposes. We will contribute the working capital for the joint venture and Source Street will contribute its knowledge and development skills to complete the design and launch of online and mobile games. We paid $5,000 to the joint venture upon signing the agreement and will make weekly payments of $1,500 for the term of the joint venture. We will share profits and losses of the joint venture equally with Source Street. On May 21, 2013, the joint venture formed Novalon Technologies, LLC as the operating entity for the joint venture.


On July 9, 2012, we revised the Joint Venture Agreement (the “Revised Joint Venture Agreement”) with Source Street. Under the terms of the Revised Joint Venture Agreement, we are required to provide oversight and management toward the development of online and social games. Source Street will identify and coordinate the development team. We will provide funding for the joint venture in the amount of $2,500 per week during the period of development of the first game. Ownership of the game and profits and losses will be split 80% to OBJE and 20% to Source Street. The Revised Joint Venture Agreement can be terminated by a 30-day notice from either party.


On July 20, 2013, we entered into a joint venture agreement (the “Agreement”) with Bluff Wars, Inc (BWI) to develop the Android version of their existing game Bluff Wars.  The purpose of the Agreement is to fund the development and launch of Bluff Wars within the Android marketplace.  OBJE will fund the development of Bluff Wars (Android version) for $30,000 based on monthly development milestones with a scheduled launch date in August and the option to work further with developer Fangtooth Studios and BWI to market, design and distribute existing and planned games for online, social and mobile applications.


On October 4, 2013, OBJE purchased Source Street’s interest in Novalon and Source Street’s rights to 20% of the game and profits that resulted from the Revised Joint Venture Agreement. The total consideration for the purchase was $25,000.


We have generated minimal revenues to date and our activities have been limited to developing our business plan. We will not have the necessary capital to develop our business plan until we are able to secure additional financing. There can be no assurance that such financing will be available on suitable terms.


We have minimal revenues; have incurred losses since inception, have been issued a going concern opinion from our auditors and rely upon the sale of our securities to fund operations.


As of November 30, 2013, we had $29,302 cash on hand. We believe that this cash will satisfy our operating requirements for less than one month.


Critical Accounting Policies


We prepare our condensed consolidated financial statements in conformity with GAAP, which requires management to make certain estimates and apply judgments. We base our estimates and judgments on historical experience, current trends and other factors that management believes to be important at the time the condensed consolidated financial statements are prepared. Due to the need to make estimates about the effect of matters that are inherently uncertain, materially different amounts could be reported under different conditions or using different assumptions.  On a regular basis, we review our critical accounting policies and how they are applied in the preparation of our condensed consolidated financial statements.


While we believe that the historical experience, current trends and other factors considered support the preparation of our condensed consolidated financial statements in conformity with GAAP, actual results could differ from our estimates and such differences could be material.


For a full description of our critical accounting policies, please refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report for the period ended August 31, 2012 on Form 10-K.


Plan of Operations


We believe we do not have adequate funds to satisfy our working capital requirements for the next twelve months. We will need to raise additional capital to continue our operations. During the next 18 months, we intend to continue implementing our business and marketing plan. We believe we must raise an additional $250,000 to pay for expenses associated with our development over the next 18 months.


- 13 -



We intend to pursue capital through public or private financing as well as borrowings and other sources, such as our officer and director, in order to finance our businesses activities. We cannot guarantee that additional funding will be available on favorable terms, if at all. If adequate funds are not available, then our ability to continue our operations may be significantly hindered.


OBJE has developed its first three mobile gaming applications Phantasmic, Stupid Pixels and Creature Tavern through its partnership with Source Street, LLC under the brand name Novalon Games and plans to submit Creature Tavern to the app stores in the Apple and Android marketplaces, in the third calendar quarter of 2013.


OBJE signed a joint venture agreement in July 2013 to develop the Android version of Bluff Wars with the option to develop, market and distribute additional games with Bluff Wars, Inc. for the Android and Apple marketplace.


In conjunction with the aforementioned developments, the Company has completed due diligence and is in the final stages of deal structuring and negotiations for the partnering and funding of several independent (“indie”) developers; primarily focused on startup gaming companies and studios.  We plan to build an online application and development platform, provide social media marketing tools, and formulate efficient practices for the submission and distribution of social and mobile applications for gaming and educational purposes.


The development strategy to create a utility platform for online, social and mobile games began in January 2013. OBJE has already begun budgeting and accepting bids for the development of an indie application platform, social marketing campaign, and plans to generate revenue streams through game sales, advertising partnerships and monetizing mobile applications.


Our management does not plan to hire any employees at this time. Our sole officer and director will be responsible for implementing our business plan. We intend to hire independent consultants and sales representatives to carry out sales, marketing and distribution activities.


RESULTS OF OPERATIONS


We incurred a net loss of $218,618 for the three months ended November 30, 2013, and had a working capital deficit of $177,334. We do not anticipate having positive net income in the immediate future. Net cash used by operations for the three months ended November 30, 2013 was $89,548. These conditions create an uncertainty as to our ability to continue as a going concern.


We continue to rely on advances to fund operating shortfalls and do not foresee a change in this situation in the immediate future. There can be no assurance that we will continue to have such advances available. We will not be able to continue operations without them. We are pursuing alternate sources of financing, but there is no assurance that additional capital will be available to the Company when needed or on acceptable terms.


We have not generated any revenues from our operations. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including the financial risks associated with the limited capital resources currently available to us for the implementation of our business strategies. To become profitable and competitive, we must develop the business and marketing plan and execute the plan. Our management will attempt to secure financing through various means including borrowing and investment from institutions and private individuals.


Since inception, the majority of our time has been spent refining our business plan and collection design sketches.


Results of Operations for the Three Months ended November 30, 2013 compared to the Three Months ended November 30, 2012


Revenue


The Company began generating revenue during the three months ended November 30, 2013.  Revenue for the period was $525. No revenue was generated during the three months ended November 30, 2012.


General and Administrative Expenses


General and administrative expenses increased in the three months ended November 30, 2013 as compared to the three months ended November 30, 2012 from $58,009 to $160,668.


- 14 -



Loss from Operations


The increase in our operating loss for the three months ended November 30, 2013 as compared to the comparable period of 2012 from $58,009 to $160,143 as a result of the increase in general and administrative expenses as discussed above.


Interest Expense


We incurred interest expense of $58,475 during the three months ended November 30, 2013 as a result of accrued interest on convertible notes payable and amortization of discounts on notes payable into interest expense. There was $114,583 of interest expense during the three months ended November 30, 2012.


Net Loss


We recognized a net loss of $218,618 for the three months ended November 30, 2013 as compared to a net loss of $172,592 for the same period of 2012. The change in net loss is primarily attributable to the changes in operating loss and interest expense described above.


LIQUIDITY AND CAPITAL RESOURCES


As of the date of this filing, we have yet to generate any revenues from our business operations.


We anticipate needing a minimum of $250,000 for our business plan which includes the development of games under our joint venture agreement with Source Street, internal development of an indie publishing, marketing and distribution platform, and the implementation of this go to market strategy for a range of social and mobile applications. Currently available cash is not sufficient to allow us to commence full execution of our business plan.


Our business expansion will require significant capital resources that may be funded through the issuance of common stock or of notes payable or other debt arrangements that may affect our debt structure. Despite our current financial status, we believe that we may be able to issue notes payable or debt instruments in order to start executing our business plan. However, there can be no assurance that we will be able to raise money in this fashion and have not entered into any agreements that would obligate a third party to provide us with capital.


For the three months ended November 30, 2013, we used cash in the amount of $89,548 on operating activities. We raised the cash amounts to be used in these activities from the sale of common stock and through non-interest bearing advances.


As of November 30, 2013, we had $29,302 of cash on hand.


As of the date of this filing, the current funds available to the Company may not be sufficient to continue maintaining its reporting status with the SEC. Management believes that if the Company cannot maintain its reporting status with the SEC, it will have to cease all business activity. As such, any investment previously made would be lost in its entirety.


The Company currently has no external sources of liquidity such as arrangements with credit institutions or off-balance sheet arrangements that will have or are reasonably likely to have a current or future effect on our financial condition or immediate access to capital.


The Company intends to seek additional financing through means such as borrowings from institutions or private individuals. There can be no assurance that the Company will be able to keep costs from being more than these estimated amounts or that the Company will be able to raise such funds. The Company may not be able to obtain additional capital or generate sufficient revenues to fund our operations. If we are unsuccessful at raising sufficient funds, for whatever reason, to fund our operations, the Company may be forced to seek a buyer for our business or another entity with which we could create a joint venture. If all of these alternatives fail, we expect that the Company will be required to seek protection from creditors under applicable bankruptcy laws.


Our independent auditor has expressed substantial doubt about our ability to continue as a going concern and believes that our ability is dependent on our ability to implement our business plan, raise capital and generate revenues. See Note 2 of our financial statements.


We have no known demands or commitments and are not aware of any events or uncertainties as of November 30, 2013 that will result in or that are reasonably likely to materially increase or decrease our current liquidity.


- 15 -



OFF-BALANCE SHEET ARRANGEMENTS


We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.


Item 3.

Quantitative and Qualitative Disclosures About Market Risk


Not applicable.


Item 4.

Controls and Procedures


The Company’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of and for the period covered by this Quarterly Report on Form 10-Q. Based upon such evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were not effective. The controls were determined to be ineffective due to the lack of segregation of duties; lack of a functioning audit committee; and, lack of a majority of outside directors on our board of directors. Currently, management contracts with an outside CPA to perform certain crucial accounting and financial reporting activities. However, the Company will be unable to remediate this weakness until it has received additional funding to hire additional administrative personnel.


For a full discussion of our internal control over financial reporting, please refer to Item 9, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report for the period ended August 31, 2012 on Form 10-K.


Changes in Internal Control Over Financial Reporting


No change in the Company’s internal control over financial reporting occurred during the three months ended November 30, 2013, that materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.


PART II — OTHER INFORMATION


Item 1.

Legal Proceedings


As of the date of this Quarterly Report, neither we nor any of our officers or directors is involved in any litigation either as plaintiffs or defendants. As of this date, there is not any threatened or pending litigation against us or any of our officers or directors.


Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds


On October 1, 2013, the Company issued 600,000 shares of common stock as a result of the conversion of the Convertible Note Payable in the amount of $30,000.


On October 4, 2013, the Company issued 600,000 shares of common stock as a result of the conversion of the Convertible Note Payable in the amount of $30,000


On October 8, 2013, the Company issued 600,000 shares of common stock as a result of the conversion of the Convertible Note Payable in the amount of $60,000


On October 15, 2013, the Company issued 300,000 shares of common stock as a result of the conversion of the Convertible Note Payable in the amount of $15,000


On December 2, 2013, the Company issued 1,600,000 shares of common stock as a result of the conversion of the Convertible Note Payable in the amount of $80,000


Item 3.

Defaults upon Senior Securities


There have been no defaults in any material payments during the covered period.


- 16 -



Item 4.

Mine Safety Disclosures


Not applicable.


Item 5.

Other Information


On November 13, 2012, the Company effected a one-for-40 reverse stock split. All share and per share amounts have been retroactively restated to reflect the reverse split.


Item 6.

Exhibits


3.1

Articles of Incorporation (incorporated by reference to our Form S-1 filed on April 14, 2010)

3.2

Bylaws (incorporated by reference to our Form S-1 filed on April 14, 2010)

3.3

Amended Articles of Incorporation dated June 27, 2012. (incorporated by reference to our Form 10-Q filed on July 16, 2012)

31.1

Certification of the Chief Executive Officer and Chief Financial Officer *

32.1

Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 *

101

XBRL Interactive Data **


* Filed or furnished herewith


** To be submitted by amendment.



SIGNATURES


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


 

OBJ ENTERPRISES, INC.

 

 

 

Dated: January 21, 2014

By:

/s/ Paul Watson

 

 

Paul Watson

President, Chief Executive Officer, Chief Financial Officer,

Principal Accounting Officer, Secretary, Treasurer and Director


- 17 -


EX-31 2 ex_31-1.htm CERTIFICATION

 

Exhibit 31.1

 

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

Certification of Chief Executive Officer

and

Chief Financial Officer

 

I, Paul Watson, certify that:

 

1.   I have reviewed this quarterly report on Form 10-Q of OBJ Enterprises, 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 registrant’s other certifying officer(s) 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 registrant’s 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 registrant’s internal control over financial reporting that occurred during the registrant’s 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 registrant’s internal control over financial reporting; and

 

5.   The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s 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 registrant’s 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 registrant’s internal control over financial reporting.

 

OBJ ENTERPRISES, INC.

 

/s/ Paul Watson

Paul Watson

President, Chief Executive Officer, Chief Financial Officer,

Principal Accounting Officer, Secretary, Treasurer, Director

 

Date:   January 21, 2014

 


EX-32 3 ex_32-1.htm CERTIFICATION

 

Exhibit 32.1

 

Certification of Chief Executive Officer and Chief Financial Officer  

Pursuant to 18 U.S.C. SECTION 1350

 

In connection with the Quarterly Report of OBJ Enterprises, Inc. (the “Company”) on Form 10-Q for the period ended November 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Paul Watson, Chief Executive Officer and Chief Financial Officer of the Company, certify, to my knowledge that:

 

(i)   the accompanying Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended (the “Act”); and

 

(ii)   the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

OBJ ENTERPRISES, INC.

 

/s/ Paul Watson

Paul Watson

President, Chief Executive Officer, Chief Financial Officer,

Principal Accounting Officer, Secretary, Treasurer, Director

 

Date:   January 21, 2014