Item 1. Description of Business
Forward-Looking Statements
This annual report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “could”, "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable laws, including the securities laws of the United States, we do not intend to update any of the forward-looking statements so as to conform these statements to actual results.
As used in this annual report, the terms "we", "us", "our", “the Company”, mean Affinity Mediaworks Corp., unless otherwise indicated.
All dollar amounts in this annual report refer to US dollars unless otherwise indicated.
Overview
We were incorporated in the State of Nevada on December 17, 2007, under the name “Green Bikes Rental Corporation”. On January 22, 2009 we changed our name to Affinity Mediaworks Corp. and on January 30, 2009 we received a new symbol for the quotation of our common stock on the OTC Bulletin Board, “AFFW.OB”.
We do not have any subsidiaries. Our principal offices are located 455 Route 306, Suite M#2922, Monsey, New York, 10952, and our telephone number is (206) 426-5044. Our fiscal year end is January 31.
We intend to become involved in the development, finance, sales, acquisition, distribution and marketing of high quality intellectual property devoted for the entertainment and leisure markets, through films under budgets from $4 to $8 million. We believe that our product line will represent a timely opportunity with the potential for fast acceptance in the international marketplace.
We are also finalizing its plan to vertically integrate in all aspects of the industry, including pre and post production services. These ancillary services are priced at a level where we can become a key provider of solutions to the independent and small film sector. The services that we will offer will help provide a monthly revenue stream that will create an independent profit center within our organization and provide supplemental cash flow to us while our major film projects are being shot and carried to market.
Research and Development
We have not spent any amounts on research and development activities during the year ended January 31, 2012. We anticipate that we will not incur any expenses on research and development over the next 12 months. Our planned expenditures on our operations or a business combination are summarized under the section of this annual report entitled “Management’s Discussion and Analysis of Financial Position and Results of Operations”.
Intellectual Property
As of January 31, 2012 we did not own any intellectual property.
Item 1A.
Item 1A. Risk Factors.
Not applicable.
Item 1B.
Item 1B. Unresolved Staff Comments.
None.
Item 2.
Item 2. Properties.
Our administrative office is located at 455 Route 306, Suite M#2922, Monsey, New York, 10952, and our telephone number is (206) 426-5044. Our registered statutory office is located at 6100 Neil Road, Suite 500, Reno, Nevada 89511.
Item 3.
Item 3. Legal Proceedings.
We know of no legal proceedings to which we are a party or to which any of our property is the subject which are pending, threatened or contemplated or any unsatisfied judgments against us.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
PART II
Item 5.
Item 5. Market for Equity Securities and Other Shareholder Matters.
Market Information
On October 17, 2008, our shares began trading on FINRA’s Over-The-Counter Bulletin Board (the “OTC Bulletin Board”) under the symbol “GBKR.” There has been minimal trading activity to date with no trading during our last fiscal year. On January 30, 2009 our symbol was changed to “AFFW” to reflect our name change. There is a limited public market for our common stock. The market for our stock is highly volatile. We cannot assure you that there will be a market in the future for our common stock.
OTC Bulletin Board securities are not listed and traded on the floor of an organized national or regional stock exchange. Instead, OTC Bulletin Board securities transactions are conducted through a telephone and computer network connecting dealers in stocks. OTC Bulletin Board issuers are traditionally smaller companies that do not meet the financial and other listing requirements of a regional or national stock exchange.
Our common stock is classified as a penny stock and as such, broker dealers dealing in our common stock will be subject to the disclosure rules for transactions involving penny stocks, which require the broker dealer to determine if purchasing our common stock is suitable for a particular investor. The broker dealer must also obtain the written consent of purchasers to purchase our common stock. The broker dealer must also disclose the best bid and offer prices available for our stock and the price at which the broker dealer last purchased or sold our common stock. These additional burdens imposed on broker dealers may discourage them from effecting transactions in our common stock, which could make it difficult for an investor to sell their shares.
The following table shows the high and low prices of our common shares on the OTC Bulletin Board for each quarter within the two most recent fiscal years. The following quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions:
Holders
As of May 12, 2012, we had approximately 47 shareholders of record and 50,355,969 outstanding shares of common stock.
Dividends
We have never paid or declared any dividends on our common stock and do not anticipate paying cash dividends in the foreseeable future.
Securities authorized for issuance under equity compensation plans.
We currently do not have any equity compensation plans.
Recent Sales of Unregistered Securities
None.
Recent Purchases of Equity Securities by Us and our Affiliated Purchases
As of January 31, 2012 we had not repurchased any of our common stock, and we have not publicly announced any repurchase plans or programs
Item 6.
Item 6. Selected Financial Data.
Not Applicable.
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Result of Operations.
The following discussion should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this annual report. The discussions of results, causes and trends should not be construed to imply any conclusion that these results or trends will necessarily continue into the future.
Forward-Looking Statements
This report contains forward-looking statements that involve risks and uncertainties. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology including, "could", "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential" or the negative of these terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially.
While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested in this annual report.
Liquidity and Capital Resources
As of January 31, 2012, we had cash of $6 in our bank accounts and a working capital deficit of $13,033 compared to $9 in cash and working capital deficit of $195,374 as of January 31, 2011. As of January 31, 2012, we had total assets of $6 and total liabilities of $13,039. As of January 31, 2012 we have accumulated a deficit of $981,175.
From December 17, 2007 (date of inception) to January 31, 2012, we raised net proceeds of $50,830 in cash from the issuance of common stock. $nil was raised during the year ended January 31, 2012 and $nil was raised during the year ended January 31, 2011. $8,350 was donated for audit and review fees for the year ended January 31, 2012, no similar fees were donated for January 31, 201. From inception to date $8,350 has been donated for audit and review fees.
We used net cash of $8,353 in operating activities for the year ended January 31, 2012 compared to $1,040 for the year ended January 31, 2011.
During the year ended January 31, 2012 our monthly cash requirement was approximately $97, compared to approximately $157 for the year ended January 31, 2011. We expect to require a total of approximately $7,500,000 to fully carry out our business plan over the next twelve months beginning June 2012 as set out in this table:
We intend to meet our cash requirements for the next 12 months through external sources: a combination of debt financing and equity financing through private placements. We are currently not in good short-term financial standing. We anticipate that we may not generate any revenues in the near future and we will not have enough positive internal operating cash flow until we can generate substantial revenues, which may take the next few years to fully realize. There is no assurance we will achieve profitable operations. We have historically financed our operations primarily by cash flows generated from the sale of our equity securities and through cash infusions from officers and outside investors in exchange for debt and/or common stock.
We intend to raise the funds to meet our cash requirements (approximately $7,500,000) from private placements, loans, or possibly a registered public offering (either self-underwritten or through a broker-dealer) within the next few months. At this time we do not have any commitments from any broker-dealer to provide us with financing. There is no guarantee that we will be successful in raising any capital. There is no assurance that we will be able to obtain such additional funds on favorable terms, if at all. If we fail in raising capital, our business may fail and we may curtail or cease our operations.
Results of Operations
Lack of Revenues
We have earned no revenues and have sustained operational losses since our inception on December 17, 2007 to January 31, 2012. As of January 31, 2012, we had an accumulated deficit of $981,175. We anticipate that we will not earn any revenues during the current fiscal year or in the foreseeable future, as we do not have any operations and are presently engaged in seeking a business combination with a target business. We anticipate that our business will incur substantial losses in the next two years.
At this time, our ability to generate any revenues continues to be uncertain. The auditor's report on our audited financial statements on January 31, 2012 and 2011 contains an additional explanatory paragraph which identifies issues that raise substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustment that might result from the outcome of this uncertainty.
Expenses
From December 17, 2007 (date of inception) to January 31, 2012, our total expenses were $981,175. The major components of our total expenses since inception to January 31, 2012 consist of: $67,979 for legal and accounting fees, $240,000 from management fees, $608,400 on loss on acquisition of note receivable, $13,156 for general and administrative, $38,846 for consulting services, $12,250 for rent and $544 for interest expense.
Our total expenses decreased by $696,448 to $76,780 for the year ended January 31, 2012 from $772,728 for the year ended January 31, 2011. This is due to the loss on the note receivable of $608,400 in 2011.
Our accounting and legal fees decreased by $1,385 to $10,256 for the year ended January 31, 2012 from $11,641 for the year ended January 31, 2011, our general and administrative expenses decreased by $67 to $24 for the year ended January 31, 2012 from $91 for the year ended January 31, 2011, our consulting fees changed to $3,000 for the year ended January 31, 2012 and $29,596 from the year ended January 31, 2011, our rent costs remained constant at $3,000 for the year ended January 31, 2012 and January 31, 2011, our interest costs is $nil for the year ended January 31, 2012 and for the year ended January 31, 2011 and our management fees dcreased to $60,000 for the year ended January 31, 2012 from $120,000 for the year ended January 31, 2011. We have $nil loss on acquisition of note receivable for the year ended January 31, 2012 compared to $608,400 for the year ended January 31, 2011.
Net Loss
For the year ended January 31, 2012 we incurred net loss of $76,280 compared to $772,728 for the year ended January 31, 2011. From December 17, 2007 (date of inception) to January 31, 2012, we incurred an aggregate net loss of $981,175. The net loss was primarily due to operating expenses related to accounting, audit, and legal fees as well as general and administrative expenses. We incurred net loss of $0.00 per share for the year ended January 31, 2012 and a net loss of $0.02 per share for the year ended January 31, 2011.
Off-Balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders.
Inflation
The effect of inflation on our revenues and operating results has not been significant.
Known Material Trends and Uncertainties
Our continuation as a going concern is dependent upon our ability to generate sufficient cash flow from outside sources to sustain operations and meet our obligations on a timely basis, and ultimately upon our ability to attain profitability. We have limited capital with which to pursue our business plan. There can be no assurance that we will have sufficient resources to complete any business combination or that our future operations will be profitable after completing the business combination.
These factors raise substantial doubt about our ability to continue as a going concern. Our auditors have issued a going concern opinion. This means that our auditors believe there is substantial doubt that we can continue as an on-going business for the next 12 months. The financial statements do not include any adjustments that might result from the uncertainty about our ability to continue our business. The threat that we will be unable to continue as a going concern will be eliminated only when our revenues have reached a level that is able to sustain our business operations.
We plan to review and identify potential businesses for acquisitions or other business combinations. Our management is unable to predict whether or when any business combination will occur or the likelihood of any particular transaction being completed on favorable terms and conditions. We may be unable to obtain the necessary financing to complete any transactions and could financially overextend ourselves. Acquisitions or other business combinations may present financial, managerial and operational challenges, including difficulties in integrating operations and personnel. Any failure to integrate new businesses or manage any new transactions successfully could adversely affect our business and future financial performance.
Critical Accounting Policies
Our financial statements are impacted by the accounting policies used and the estimates and assumptions made by management during their preparation. A complete summary of these policies is included in note 1 of the notes to our financial statements. We have identified below the accounting policies that are of particular importance in the presentation of our financial position, results of operations and cash flows, and which require the application of significant judgment by management.
Revenue Recognition
Revenue is recognized when it is realized or realizable and earned. We consider revenue realized or realizable and earned when persuasive evidence of an arrangement exists, services have been provided, and collectability is reasonably assured. Revenue that is billed in advance such as recurring weekly or monthly services are initially deferred and recognized as revenue over the period the services are provided.
Use of Estimates
The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Basic and diluted net loss per share calculations are calculated on the basis of the weighted average number of common shares outstanding during the year. The per share amounts include the dilutive effect of common stock equivalents in years with net income. Basic and diluted loss per share is the same due to the anti-dilutive nature of potential common stock equivalents.
Item 7A.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
Item 8.
Item 8. Financial Statements.
FINANCIAL STATEMENTS
Affinity Mediaworks Corp.
(Formerly Green Bikes Rental Corporation)
January 31, 2012
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
Affinity Mediaworks Corp.
(formerly Green Bikes Rental Corporation)
We have audited the accompanying balance sheets of Affinity Mediaworks Corp. (formerly Green Bikes Rental Corporation) (a development stage company) as of January 31, 2012 and 2011, and the related statements of operations, changes in stockholders’ deficit, and cash flows for the years then ended and for the period from December 17, 2007 (inception) through January 31, 2012. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Affinity Mediaworks Corp. as of January 31, 2012 and 2011, and the results of its operations and cash flows for the periods described above in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company suffered a net loss from operations and has a net capital deficiency, which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ M&K CPAS, PLLC
www.mkacpas.com
Houston, Texas
May 15, 2012
Affinity Mediaworks Corp.
(formerly Green Bikes Rental Corporation)
(A Development Stage Company)
Balance Sheets
As of January 31, 2012 and January 31, 2011
See the accompanying summary of accounting policies and notes to the financial statements
Affinity Mediaworks Corp.
(formerly Green Bikes Rental Corporation)
(A Development Stage Company)
Statements of Operations
For the Years ended January 31, 2012 and 2011 and from
December 17, 2007 (Inception) Through January 31, 2012
See the accompanying summary of accounting policies and notes to the financial statements
Affinity Mediaworks Corp.
(formerly Green Bikes Rental Corporation)
(A Development Stage Company)
Statements of Cash Flows
For the Years ended January 31, 2012 and 2011 and from
December 17, 2007 (Inception) Through January 31, 2012
See the accompanying summary of accounting policies and notes to the financial statements
Affinity Mediaworks Corp.
(formerly Green Bikes Rental Corporation)
(A Development Stage Company)
Statement of Changes in Stockholders’ Deficit
For the Period from December 17, 2007 (Inception)
Through January 31, 2012
See the accompanying summary of accounting policies and notes to the financial statements
Affinity Mediaworks Corp.
(formerly Green Bikes Rental Corporation)
(A Development Stage Company)
Notes to the Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Green Bikes Rental Corporation was incorporated on December 17, 2007, under the laws of the State of Nevada, as a development stage company.
On January 7, 2010, the Company amended its Articles of Incorporation to change the name of Green Bikes Rental Corporation to Affinity Mediaworks Corp., to increase the authorized share capital of the Company to 200,000,000 and to affect a 20 for 1 forward-split of the Company’s issued and outstanding common shares.
BASIS OF PRESENTATION
The Company follows accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the periods presented have been reflected herein.
STOCK BASED COMPENSATION
ASC 718, STOCK-BASED COMPENSATION, establishes standards for the reporting and display of stock based compensation in the financial statements. During the year ended January 31, 2011, the Company issued, 189,969 shares that were issued for services for services valued at $26,596 using the closing price of the stock on the date of grant.
REVENUE RECOGNITION
Revenue is recognized when it is realized or realizable and earned. Affinity considers revenue realized or realizable and earned when persuasive evidence of an arrangement exists, services have been provided, and collectability is reasonably assured. Revenue that is billed in advance such as recurring weekly or monthly services are initially deferred and recognized as revenue over the period the services are provided.
USE OF ESTIMATES
The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
CASH AND CASH EQUIVALENTS
For purposes of the statement of cash flows, the Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. As of January 31, 2012 and January 31, 2011, there were no cash equivalents.
DEVELOPMENT STAGE COMPANY
The Company complies with FASB pronouncements for its characterization of the Company as development stage.
FAIR VALUE MEASURMENTS
The Company adopted FASB ASC Topic 820, “Fair Value Measurement and Disclosure,” at inception. ASC Topic 820 defines fair value, establishes a framework for measuring fair value, and expands disclosure of fair value measurements. FASB ASC Topic 820 applies under other accounting pronouncements that require or permit fair value measurements and accordingly, does not require any new fair value measurements. FASB ASC Topic 820 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, FASB ASC Topic 820 established a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows.
·
Level 1. Observable inputs such as quoted market prices in active markets.
·
Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly, and
·
Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
The FASB’s ASC Topic 825, “Financial Instruments”, became effective for the Company on January 1, 2008. FASB ASC Topic 825 establishes a fair value option that permits entities to choose to measure eligible financial instruments and certain other items at fair value at specified election dates. A business entity shall report unrealized gains and losses on items for which the fair value options have been elected in earnings at each subsequent reporting date. For the year ended January 31, 2012, there were no applicable items on which the fair value option was elected.
The following schedule summarizes the valuation of financial instruments at fair value on a recurring basis in the balance sheets as of January 31, 2012 and 2011:
There were no transfers of financial assets or liabilities between Level 1, Level 2 and Level 3 inputs for the years ended January 31, 2012 and 2011.
BASIC AND DILUTED NET LOSS PER COMMON SHARE
Basic and diluted net loss per share calculations are calculated on the basis of the weighted average number of common shares outstanding during the year. The per share amounts include the dilutive effect of common stock equivalents in years with net income. Basic and diluted loss per share is the same due to the anti dilutive nature of potential common stock equivalents.
RECENT ACCOUNTING PRONOUNCEMENTS
In September 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2011-08, Intangibles - Goodwill and Other (Topic 350): Testing Goodwill for Impairment. The guidance in ASU 2011-08 is intended to reduce complexity and costs by allowing an entity the option to make a qualitative evaluation about the likelihood of goodwill impairment to determine whether it should calculate the fair value of a reporting unit. The amendments also improve previous guidance by expanding upon the examples of events and circumstances that an entity should consider between annual impairment tests in determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Also, the amendments improve the examples of events and circumstances that an entity having a reporting unit with a zero or negative carrying amount should consider in determining whether to measure an impairment loss, if any, under the second step of the goodwill impairment test. The amendments in this ASU are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted, including for annual and interim goodwill impairment tests performed as of a date before September 15, 2011, if an entity’s financial statements for the most recent annual or interim period have not yet been issued. The adoption of this guidance is not expected to have a material impact on the Company’s financial position or results of operations.
In June 2011, the FASB issued ASU 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income”, which is effective for annual reporting periods beginning after December 15, 2011. ASU 2011-05 will become effective for the Company on December 1, 2012. This guidance eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. In addition, items of other comprehensive income that are reclassified to profit or loss are required to be presented separately on the face of the financial statements. This guidance is intended to increase the prominence of other comprehensive income in financial statements by requiring that such amounts be presented either in a single continuous statement of income and comprehensive income or separately in consecutive statements of income and comprehensive income. The adoption of ASU 2011-05 is not expected to have a material impact on our financial position or results of operations.
In May 2011, the FASB issued ASU 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs”, which is effective for annual reporting periods beginning after December 15, 2011. This guidance amends certain accounting and disclosure requirements related to fair value measurements. Additional disclosure requirements in the update include: (1) for Level 3 fair value measurements, quantitative information about unobservable inputs used, a description of the valuation processes used by the entity, and a qualitative discussion about the sensitivity of the measurements to changes in the unobservable inputs; (2) for an entity’s use of a nonfinancial asset that is different from the asset’s highest and best use, the reason for the difference; (3) for financial instruments not measured at fair value but for which disclosure of fair value is required, the fair value hierarchy level in which the fair value measurements were determined; and (4) the disclosure of all transfers between Level 1 and Level 2 of the fair value hierarchy. ASU 2011-04 will become effective for the Company on December 1, 2012. We are currently evaluating ASU 2011-04 and have not yet determined the impact that adoption will have on our financial statements.
In April 2011, the FASB issued ASU 2011-02, “Receivables (Topic 310): A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring”. This amendment explains which modifications constitute troubled debt restructurings (“TDR”). Under the new guidance, the definition of a troubled debt restructuring remains essentially unchanged, and for a loan modification to be considered a TDR, certain basic criteria must still be met. For public companies, the new guidance is effective for interim and annual periods beginning on or after June 15, 2011, and applies retrospectively to restructuring occurring on or after the beginning of the fiscal year of adoption. ASU 2011-02 has become effective for the Company on September 1, 2012. The Company does not believe that the guidance will have a material impact on its financial statements.
In December 2010, the FASB issued ASU 2010-29, “Business Combinations (Topic 805): Disclosure of supplementary pro forma information for business combinations.” This update changes the disclosure of pro forma information for business combinations. These changes clarify that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. Also, the existing supplemental pro forma disclosures were expanded to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. This ASU is effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. We are currently evaluating the impact of this ASU; however, we do not expect the adoption of this ASU to have a material impact on our financial statements.
In December 2010, the FASB issued ASU 2010-28, “Intangible -Goodwill and Other (Topic 350): When to perform Step 2 of the goodwill impairment test for reporting units with zero or negative carrying amounts.” This update requires an entity to perform all steps in the test for a reporting unit whose carrying value is zero or negative if it is more likely than not (more than 50%) that a goodwill impairment exists based on qualitative factors, resulting in the elimination of an entity’s ability to assert that such a reporting unit’s goodwill is not impaired and additional testing is not necessary despite the existence of qualitative factors that indicate otherwise. This ASU is effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. We are currently evaluating the impact of this ASU; however, we do not expect the adoption of this ASU to have a material impact on our financial statements.
NOTE 2 - GOING CONCERN
Affinity's financial statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business for the foreseeable future. Since inception, the Company has accumulated losses aggregating to $981,175 and has insufficient working capital to meet operating needs for the next twelve months as of January 31, 2012 all of which raise substantial doubt about Affinity’s ability to continue as a going concern.
NOTE 3 - RELATED PARTY TRANSACTIONS
During the year ended January 31, 2012 the Company recognized a total of $6,000 for donated rent and services provided by the President and Director of the Company. This amount was recorded as an addition to additional paid-in capital.
During the year ended January 31, 2012 the Company recognized a forgiveness of management fees $240,000 and accounts payable of $4,271, these amounts were recorded as additions to additional paid-in capital.
During the year ended January 31, 2012 the audit/review fees were paid by a related party in the amount of $8,350, this amount was recorded as an addition to additional paid-in capital.
NOTE 4 - COMMON STOCK
Affinity Mediaworks Corp. issued 100,000,000 shares of common stock (founder's shares) on December 17, 2007 to the President and Director of the Company. In addition, 10,155,000 shares of common stock were issued to the public on May 15, 2008 for $50,830.
As of January 31, 2011, the Company wrote off a note receivable for $608,400 as the party was not able to pay for the balance of the note receivable of $338,000. Company is in the negations with another party to cancel this note as the other party did not follow through with their obligations.
As of January 31, 2011, 189,969 shares were issued for services for services valued at $26,596 using the closing price of the stock on the date of grant.
NOTE 5- INCOME TAXES
The Company has tax losses which may be applied against future taxable income. The potential tax benefits arising from these loss carry forwards expire beginning in 2028 and are offset by a valuation allowance due to the uncertainty of profitable operations in the future. The net operating loss carry forward was $336,289 at January 31, 2012. The significant components of the deferred tax asset as of January 31, 2012 and January 31, 2011 are as follows:
NOTE 6- SUBSEQUENT EVENTS
We evaluated subsequent events through the date and time the financial statements were issued on May 15, 2012. There were no reportable subsequent events.
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A(T).
Item 9A(T). Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were not effective to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the required time periods and is
accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. To address the material weaknesses, we performed additional analysis and other post-closing procedures in an effort to ensure our consolidated financial statements included in this annual report have been prepared in accordance with generally accepted accounting principles. Accordingly, management believes that the financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Securities Exchange Act, as amended. Our management assessed the effectiveness of our internal control over financial reporting as of January 31, 2012. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected on a timely basis. We have identified the following material weaknesses.
1.
As of January 31, 2012, we did not maintain effective controls over the control environment. Specifically we have not developed and effectively communicated to our employees its accounting policies and procedures. This has resulted in inconsistent practices. Further, the Board of Directors does not currently have any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K. Since these entity level programs have a pervasive effect across the organization, management has determined that these circumstances constitute e a material weakness.
2.
As of January 31, 2012, we did not maintain effective controls over financial statement disclosure. Specifically, controls were not designed and in place to ensure that all disclosures required were originally addressed in our financial statements. Accordingly, management has determined that this control deficiency constitutes a material weakness.
Because of these material weaknesses, management has concluded that the Company did not maintain effective internal control over financial reporting as of January 31, 2012, based on the criteria established in "Internal Control-Integrated Framework" issued by the COSO.
Change In Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during our last fiscal year that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Attestation Report of the Registered Public Accounting Firm
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the SEC that permit us to provide only management’s report in this annual report.
Item 9B.
Item 9B. Other Information.
None.
PART III
Item 10.
Item 10. Directors, Executive Officers, Promoters and Control Persons of the Company
Directors and Executive Officers
Set forth below are the names, ages, terms of office and positions of our executive officers and directors.
All directors hold office until the next annual meeting of our shareholders and until their successors have been elected and qualify. Officers serve at the pleasure of the Board of Director. The directors will devote such time and effort to our business and affairs as may be necessary to perform their responsibilities. No annual meetings.
Scott Cramer. Mr. Cramer worked as a financial planner from 1987 until 1997. His functions included asset management, retirement planning and tax planning for his clients. From 1997 until 2000, he trained financial planners on how to grow their practices and build relationships with their clients. From 2000 until present, Mr. Cramer has developed investment products for projects that needed funding from the private and public equity sector. He has helped fund projects from the forestry to the film industry, with projects related to Alliance Atlantis and Prospero Entertainment. In addition, he is currently an executive producer on the film "Damage" featuring Stone Cold Steve Austin. He is also executive producer on the films "Traces of Danger" and "Holiday Destination" which are currently in preproduction. Mr. Cramer is not an officer or director of any other reporting company .
Kirk Shaw. Mr. Shaw has over twenty-five years experience in the film and television industries. He is currently the C.E.O. and President of the private company Insight Film Studios. He has held these positions since Insight's inception in 1990. Throughout his career he has worked directly on over 80 Movies of the Week, eight theatrical features, four dramatic series and five documentary series. Among Mr. Shaw's most recent film credits are, "Battle in Seattle", with Charlize Theron, "While She Was Out", with Kim Basinger and "Blonde and Blonder", with Pamela Anderson. Mr. Shaw also has three television series premiering on US networks in primetime this year, "Painkiller Jane," "Blood Ties" and "The Two Coreys". Mr. Shaw is not an officer or director of any other reporting company.
Board of Directors and Director Nominees
We do not have a nominating committee of the Board, since the Board as a whole selects individuals to stand for election as members. Since the Board does not include a majority of independent directors, the decisions of the Board regarding director nominees are made by persons who have an interest in the outcome of the determination. The Board will consider candidates for directors proposed by security holders, although no formal procedures for submitting candidates have been adopted. Unless otherwise determined, at any time not less than 90 days prior to the next annual Board meeting at which the slate of director nominees is adopted, the Board will accept written submissions from proposed nominees that include the name, address and telephone number of the proposed nominee; a brief statement of the nominee’s qualifications to serve as a director; and a statement as to why the security holder submitting the proposed nominee believes that the nomination would be in the best interests of the security holders. If the proposed nominee is not the same person as the security holder submitting the name of the nominee, a letter from the nominee agreeing to the submission of his or her name for consideration should be provided at the time of submission. The letter should be accompanied by a résumé supporting the nominee's qualifications to serve on the Board, as well as a list of references.
The Board identifies director nominees through a combination of referrals from different people, including management, existing Board members and security holders. Once a candidate has been identified, the Board reviews the individual's experience and background and may discuss the proposed nominee with the source of the recommendation. If the Board believes it to be appropriate, Board members may meet with the proposed nominee before making a final determination whether to include the proposed nominee as a member of the slate of director nominees submitted to security holders for election to the Board.
Among the factors that the Board considers when evaluating proposed nominees are their knowledge of and experience in business matters, finance, capital markets and mergers and acquisitions. The Board may request additional information from each candidate prior to reaching any determination. The Board is under no obligation to formally respond to all recommendations, although as a matter of practice, it will endeavor to do so.
Director Independence
Our securities are quoted on the OTC Bulletin Board which does not have any director independence requirements. Once we engage further directors and officers, we plan to develop a definition of independence and scrutinize our Board of Directors with regard to this definition.
Audit Committee
The functions of the audit committee are currently carried out by our Board of Directors. Our Board has determined that we do not have an audit committee financial expert on our Board carrying out the duties of the audit committee. The Board has determined that the cost of hiring a financial expert to act as a director and to be a member of the audit committee or otherwise perform audit committee functions outweighs the benefits of having a financial expert on the audit committee.
Significant Employees
Other than our sole officer and directors, we do not expect any other individuals to make a significant contribution to our business.
Family Relationships
There are no family relationships among our officers or directors.
No Legal Proceedings
None of our directors, executive officers, promoters or control persons has been involved in any of the following events during the past five years:
·
any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
·
any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
·
being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting her involvement in any type of business, securities or banking activities; or
·
being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.
Section 16(a) Beneficial Ownership Compliance Reporting
Section 16(a) of the Exchange Act requires our executive officers and directors, and persons who beneficially own more than 10% of our equity securities (collectively, the “Reporting Persons”), to file reports of ownership and changes in ownership with the SEC. Reporting Persons are required by SEC regulation to furnish us with copies of all forms they file pursuant to Section 16(a). As we do not have any securities registered under Section 12 of the Securities Exchange Act of 1934, none of our Reporting Persons are required to file reports of ownership and changes in ownership with the SEC.
Code of Ethics
We have not yet adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions because we have not yet finalized the content of such a code.
Item 11.
Item 11. Executive Compensation.
The following table sets forth, as of January 31, 2011, the compensation paid to our President and Chief Executive Officer and our Chief Financial Officer during the last two completed fiscal years. No other officers or directors received annual compensation in excess of $100,000 during the last two completed fiscal years.
(1)
Pursuant to Item 402(a)(5) of Regulation S-K tables and columns have been omitted where no compensation has been awarded.
(2)
Scott Cramer is our President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Secretary, Treasurer and a Director
(3)
Kirk Shaw is our Director
We have made no grants of stock options or stock appreciation rights from December 17, 2007 (inception) to January 31, 2012.
Pension, Retirement or Similar Benefit Plans
There are no arrangements or plans in which we provide pension, retirement or similar benefits to our directors or executive officers. We have no material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of the Board of Directors or a committee thereof.
Compensation Committee
We currently do not have a compensation committee of the Board of Directors. The Board as a whole determines executive compensation.
Compensation of Directors
We reimburse our directors for expenses incurred in connection with attending board meetings but did not pay director's fees or other cash compensation for services rendered as a director in the year ended January 31, 2011.
We have no standard arrangement pursuant to which our directors are compensated for their services in their capacity as directors. The Board of Directors may award special remuneration to any director undertaking any special services on behalf of our company other than services ordinarily required of a director. No director received and/or accrued any compensation for services as a director, including committee participation and/or special assignments.
Change of Control
As of May 12, 2012 we had no pension plans or compensatory plans or other arrangements which provide compensation in the event of a termination of employment or a change in our control.
Compensation Committee Interlocks and Insider Participation
We do not currently have a compensation committee of the Board of Directors or a committee performing similar functions. The Board of Directors as a whole participates in the consideration of executive officer and director compensation.
Compensation Committee Report
Our Chief Financial Officer and Chief Executive Officer has reviewed the Compensation Discussion and Analysis and the requirements pertaining to this item. She has determined that no disclosure is necessary as we have not adopted any compensation programs and we have approved that a statement to that effect be disclosed in this Form 10-K.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table sets forth information as of January 31, 2012 regarding the ownership of our common stock by each shareholder known by us to be the beneficial owner of more than five per cent of our outstanding shares of common stock, each director and all executive officers and directors as a group.
Except as otherwise indicated, each of the shareholders has sole voting and investment power with respect to the shares of common stock beneficially owned.
(1)
The number and percentage of shares beneficially owned is determined under rules of the SEC and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares as to which the individual has sole or shared voting power or investment power and also any shares which the individual has the right to acquire within 60 days through the exercise of any stock option or other right. The persons named in the table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to community property laws where applicable and the information contained in the footnotes to this table.
(2)
Based on 50,355,969 issued and outstanding shares of common stock as of May 12, 2012.
(3)
Scott Cramer is our President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Secretary, Treasurer and a Director
(4)
Kirk Shaw is our director.
Item 13.
Item 13. Certain Relationships and Related Transactions.
During the year ended January 31, 2012, we had not entered into any transactions with our sole officer and director, or persons nominated for these positions, beneficial owners of 5% or more of our common stock, or family members of these persons wherein the amount involved in the transaction or a series of similar transactions exceeded the lesser of $120,000 or 1% of the average of our total assets for the last three fiscal years.
Item 14.
Item 14. Principal Accountant Fees and Services.
Audit and Non-Audit Fees
The following table sets forth the fees for professional audit services and the fees billed for other services rendered by our auditors in connection with the audit of our financial statements for the years ended January 31, 2011 and 2012, and any other fees billed for services rendered by our auditors during these periods.
Since our inception, our Board of Directors, performing the duties of the audit committee, has reviewed all audit and non-audit related fees at least annually. The Board, acting as the audit committee, pre-approved all audit related services for the year ended January 31, 2012.
PART IV
Item 15.
Item 15. Exhibits.
Exhibit No.
Description
31.1
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act
32.1
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act
101.INS XBRL Instance Document
101.SCH XBRL Taxonomy Extension Schema Document
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF XBRL Taxonomy Extension Definition Linkbase Document
101.LAB XBRL Taxonomy Extension Label Linkbase Document
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
AFFINITY MEDIAWORKS CORP.
By:/s/ Scott Cramer
Date: May 15, 2012
Scott Cramer
President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Secretary, Treasurer, Director
Pursuant to the requirements of the Exchange Act this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ Scott Cramer
President, Chief Executive Officer, Chief Financial Officer,
May 15, 2012
Scott Cramer
Principal Accounting Officer, Secretary, Treasurer, Director