ITEM 1.
BUSINESS.
MOBILE DYNAMIC MARKETING, INC.
We are engaged in the business of designing and selling mobile applications for the Apple® and Android® platforms directed at the business community. We intend to develop mobile applications and websites for other business entities. We do not intend to not intend to and distribute mobile applications for distribution directly to the general public.
We have created a business plan built upon designing and selling mobile apps for smart phones and other mobile platforms such as tablets. We will be striving to design and develop applications which will not only improve workforce productivity, but as is the case with our initial app, bring additional interactive marketing exposure to small businesses through our products and services. We have designed a website which will be a primary source of information for the general public of the nature of our business. Currently we utilize a software solution that allows Mr. McFadden and Ms. Pannoni the ability to create and modify applications. In addition, we have used third parties providers such as Steve Schutt and Seabago Media to assist us in this regard. Additionally, we have begun our initial writing, design and programming of our first mobile app. For the initial wiring we utilize a software solution that allows us to create and modify mobile applications. In addition, we use the services of third party providers. During our initial month of formation we concentrated our energies on analyzing the viability of our business plan, and establishing our business model, including researching the items needed to secure a trademark and develop relationships with mobile app retailers. Our president, Mr. Brian McFadden, has assisted and completed the design of our initial logo. We do not presently have a market-ready product, and we currently do not have any customers. As such, we have generated no revenues.
We are attempting to build a successful designer of mobile app for smart phones and other mobile devices. In order to generate revenues during the next twelve months, we must:
1. Maintain our website - We believe that the internet is a great marketing tool not only for providing information on our company, but also for providing current information on our upcoming apps as well as industry related information regarding new technology and device updates. We have developed our preliminary website, and are in the process of developing a more advanced site where we can provide a more detailed section regarding proprietary app designs and features. We have begun designing a more advanced website, and intend to launch it during the second quarter of 2013.
2. Develop and implement a product development timeline - We will require the implementation of a detailed timeline to ensure our production a marketable mobile application. These keys areas will need to be addressed to assist in the assurance of the Company’s success:
· efficient design and programming writing;
· extensive Beta testing through friends and family network, or eventually through current users;
· timely and useful downloadable updates;
· marketable launch through third party retailer or through the Company’s website.
3. Develop and implement a marketing plan - Our planned revenue streams will require an extensive list of contacts to allow for the marketing of our mobile apps. Awareness of the revenue potential we will be able to deliver through our app sales, will be delivered through the implementation of a number of marketing initiatives including search engine optimization, website completion, hosted video demonstrations, third party service contacts, tradeshow attendance, as well as blogging and other forms of social media which are driven by technology and mobile flexibility. These efforts and the resulting awareness will be key drivers behind the success of our revenue producing operations.
Competition
The mobile apps industry is fragmented and there are many competitors with larger financial resources than us. As such, if we intended to make our presence known in the industry, we will have to establish a significant marketing campaign to attract customers. Currently, we do not plan to proceed with such a campaign, but intend to concentrate on expanding the operations of Career Start, Inc. Currently, we are developing human resource software, that we believe, will differentiate us in the industry.
Patents and Trademarks
We own no patents and trademarks. As such our proprietary information could be acquired by and used by third parties and we would not have any legal recourse against them. We have no patents. We protect our property through trade secrets.
Governmental Regulation
Currently there are no governmental regulations which affect our operations.
Market and Revenue Generation
In order to generate revenues during the next twelve months, we must:
1. Develop and implement a marketing plan - Our planned revenue streams will require establishing a web presence and improved visibility within the public and private sectors. A major key factor in our success will be the building of third party relationships within the mobile technology industry.
2. Develop and implement a comprehensive consumer information website - For the foreseeable future, our website (www.mobiledynamicmarketing.com) will be a primary asset and a potential key source of revenue generation, as well as company information. Currently, management is formulating its plan on how best to employ its resources to expand and improve the site. We are working to add to the functionality of the site including: announcements of new apps, updates on our future app development, updates on mobile technology, and blogs focused on the mobile app market and desires of end-users. Additionally we need to optimize the site for search engine rank, as well as renew the look and feel of the site to coincide with our objectives for our brand. We have not yet recognized revenues from the website nor is there any indication that we ever will recognize direct revenues from our website. We do not presently have a market-ready product, nor do we have any customers; thus have generated no revenues. In connection with the website, we intend to offer space for third parties to advertise on the website.
Our operations, to date, have been devoted primarily to startup and development activities, which include the following:
· Formation of the company;
· Development of Company logo;
· Development of our business plan;
· Preparation for Application for a Trademark;
· Launching of our preliminary website; and
· Begin the design and development of our initial mobile application.
We do not intend to devote significant resources to the development of mobile applications in the next twelve months or until we acquire further financing. We intend to concentrate our efforts in developing Career Start, Inc. since it has a record of generating.
CAREER START, INC.
Temporary Staffing Industry
The temporary staffing industry supplies temporary staffing services to minimize the cost and effort of hiring and administering permanent employees in order to rapidly respond to changes in business conditions, to temporarily replace absent employees, to temporarily fill new positions, and to convert fixed or permanent labor costs to variable or flexible costs. Temporary staffing companies act as intermediaries in matching available temporary workers to employer assignments. The demand for a flexible workforce continues to grow with competitive and economic pressures to reduce costs and respond to changing market conditions.
The temporary staffing industry is large and highly fragmented with many competing companies. No single company has a dominant share of the temporary staffing industry. Staffing companies compete both to recruit and retain a supply of temporary workers and to attract and retain customers to employ these workers. Customer demand for temporary staffing services is dependent on the overall strength of the labor market and trends toward greater workforce flexibility. The temporary staffing industry includes a number of markets focusing on business needs that vary widely in duration of assignment and level of technical specialization. We operate within the blue-collar staffing market of the temporary staffing industry.
The blue-collar staffing market is subject to volatility based on overall economic conditions. Historically, in periods of economic growth, the number of companies providing temporary staffing services has increased due to low barriers to entry and during recessionary periods the number of companies has decreased through consolidation, bankruptcies, or other events. The temporary staffing industry is experiencing increased demand in relation to total job growth as customers have placed a greater priority on maintaining a more flexible workforce.
Long-term Strategies
Our long term strategies are clearly focused on creating shareholder value. Creating differentiated services, developing transformational competitive advantages, and increasing the efficiency of our service delivery model are underlying strategic principles that guide our strategies.
Our primary strategic focus is creating specialization in the services we offer. Our customers have a variety of challenges in running their business, many of which are unique to the industry in which they operate. Our objective is to be the leading provider of upper and lower management staffing by providing specialized service offerings, which will improve the productivity and performance of our customers. We believe that specialization differentiates us from our competition and ensures we deliver industry specific solutions tailored to the specific needs of our customers. We have and continue to invest in building industry expertise in various upper management markets. Those investments have strengthened our ability to provide compelling workforce solutions for our customers. We have also built our sales and service capabilities for national customers while maintaining our core strength of selling and servicing small and mid-sized businesses at the local level. Our specialization substantially improves our ability to provide quality solutions that customers’ value.
We believe technology can transform traditional methods of doing business in our industry. We are investing in mobile application solutions which will drive substantial productivity gains in a variety of ways. We believe mobile solutions will increase the number and quality of potential workers as candidates are increasingly looking for efficient and convenient ways to connect with work opportunities. We expect it will reduce the amount of time it takes our branches to match and assign temporary workers to jobs; particularly for hard-fill-jobs and large short-notice orders. We believe revenues will increase from new business and from fewer unfilled orders in our current business. Also, we believe the geographic reach of our branches will increase and provide the opportunity to reduce occupancy costs by consolidating local branches.
As we consolidate our branch network, we plan to centralize certain recruiting, placement, and customer service duties in major metropolitan areas. Historically, our branches are staffed by generalist positions performing a variety of sales and service activities. We plan to centralize and specialize in selected sales and service activities to further improve the productivity and quality of our service.
Acquisitions continue to be a key growth strategy. We have completed a variety of acquisitions in the past and believe we have developed a strong set of competencies in assessing, valuing, and integrating acquisitions. We are excited about the future of the temporary staffing industry and believe we can continue to create shareholder value through acquisitions.
Operations
We provide a wide range of specialized management services. If required by our customers, we will provide a complete staff to run and entire business, from upper management, down through low end blue-collar staffing services. We operate as an on demand company.
Our business is generally conducted through our headquarters in New York where we provide support and centralized services to our customers.
Customers
Our customer mix consists primarily of small and medium-sized businesses serviced by one or more branch offices. We also serve larger national customers. Our full range of temporary staffing services enables us to meet all managerial and subordinate labor needs.
Methods used to sell temporary staffing services to customers vary depending on the customer’s need for temporary staffing services, the local managerial supply, the local labor supply, the length of assignment, the number of managers and workers and skills required. We are a business-to-business sales provider. Our sales process takes place at the customer’s location. Success is often based on the experience and skill of the sales person and the strength of relationship with the customer. Retention of customers, exclusive of economic conditions, is dependent on the strength of our relationship with the customer, the skill, quality and tenure of temporary workers, the success of our operations, and customer service skills.
During 2013, we served approximately 20 customers in the services, retail, wholesale, manufacturing, and food processing industries. Our ten largest customers accounted for 90% of total revenue for 2013. Our largest client is approximately 30% of our total revenue for 2013.
Employees and Temporary Associates
As of August 31, 2013, we employed approximately 425 full-time and part-time employees. We recruit temporary management and workers daily so that we can be responsive to the planned as well as unplanned needs of the customers we serve. We attract our pool of temporary management and workers through personal referrals, online resources, extensive internal databases, advertising, job fairs, and various other methods. We identify the skills, knowledge, abilities, and personal characteristics of a manager or temporary worker and match their competencies or capabilities to a customer’s requirements. This enables our customers to obtain immediate value by placing a highly productive and skilled employee on the job site. We use a variety of proprietary programs for identifying and assessing the skill level of our temporary managers and workers when selecting a particular individual for a specific assignment and retaining those workers for future assignments. We believe that our assessment systems enable us to offer a higher quality of service by increasing productivity, decreasing turnover, and reducing absenteeism.
We provide a bridge to permanent, full-time employment for temporary managers and workers each year. Temporary managers and workers come to us to fill a short-term financial need, or as a flexible source of income while also working elsewhere or pursuing education. Many stay because of the flexibility that we offer. In many cases, we enable individuals to pay their rent, buy groceries, and remain self-sufficient. Temporary workers may be assigned to different jobs and job sites, and their assignments could last for as little as a single day or extend for several weeks or months. We provide our temporary managers and workers meaningful work and the opportunity to improve their skills.
We are considered the legal employer of our temporary staff and laws regulating the employment relationship are applicable to our operations. We consider our relations with our employees to be good.
Competition
We compete in the temporary staffing industry by offering a full range of managerial and subordinate staffing services. The temporary staffing industry is large and fragmented, comprised of thousands of companies employing millions of people and generating billions of dollars in annual revenues.
We experience competition in attracting customers as well as qualified employment candidates. The staffing business is highly competitive with limited barriers to entry, with a number of firms offering services similar to those provided by us on a national, regional, or local basis. We compete with several multi-national full-service and specialized temporary staffing companies, as well as a multitude of local companies. In most geographic areas, no single company has a dominant share of the market. The majority of temporary staffing companies serving the managerial market are locally-owned businesses. In many areas the local companies are the strongest competitors, largely due to their longevity in the market and the strength of their customer relationships.
Competitive forces have historically limited our ability to raise our prices to immediately and fully offset increased costs of doing business; some of which include increased temporary worker wages, costs for workers’ compensation, and unemployment insurance.
The most significant competitive factors in the staffing business are price, ability to promptly fill customer orders, success in meeting customers’ quality expectations of temporary staffing, and appropriately addressing customer service issues. We believe we derive a competitive advantage from our service history and commitment to the employment market and our specialized approach in serving the industries of our customers. Also, our national presence and proprietary systems and programs including risk management, and legal and regulatory compliance are key differentiators from many of our competitors.
Seasonality and Cyclical Nature of our Business
Our business experience is not subject to seasonal fluctuations.
It has however been historically been cyclical, often acting as an indicator of both economic downturns and upswings. Staffing customers tend to use temporary staffing to supplement their existing workforces and generally hire permanent workers when long-term demand is expected to increase. As a consequence, our revenues tend to increase quickly when the economy begins to grow and, conversely, our revenues also decrease quickly when the economy begins to weaken. While we have longer-term customer relationships, which are not directly dependent upon the economic cycle, these revenues are not significant enough to offset the impact of cyclical economic activity for our temporary staffing services.
Convertible Promissory Note
On December 6, 2012, we entered into a convertible promissory note agreement for $150,000. Pursuant to the agreement, the loan is unsecured, bears interest at 10% per annum, and is due on December 5, 2014. The note is also convertible into common shares at a conversion price equal to 25% of the average of the three lowest closing prices for our common shares in the ten trading days prior to conversion, at the option of the note holder, commencing on December 6, 2012.
Employees
We currently have 447 full time and part-time employees.
Our Office
We lease space for our offices that are located 801 West Bay Drive, Suite 470, Largo, Florida 33770 and our telephone number is (727) 330-2731. We lease our offices from West Bay Largo LLC pursuant to a written lease dated December 1, 2012. The term of our lease is month-to-month. Our monthly rent is $25. . We also lease space at 727 St Paul Street, Rochester NY 14605. The term of our lease is annual. Our monthly rent is $1500.
ITEM 1A.
ITEM 1A.
RISK FACTORS.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.
ITEM 1B.
ITEM 1B.
UNRESOLVED STAFF COMMENTS.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.
ITEM 2.
ITEM 2.
PROPERTIES.
We own no properties.
ITEM 3.
ITEM 3.
LEGAL PROCEEDINGS.
We are not a party to any litigation.
ITEM 4.
ITEM 4.
MINE SAFETY DISCLOSURES.
None.
PART II
ITEM 5.
ITEM 5.
MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Our stock is listed for trading on the Bulletin Board operated the Financial Industry Regulatory Authority (FINRA) on OTCBB under the symbol “PBCW”. The shares of common stock began trading in the first quarter of 2011. There are no outstanding options or warrants to purchase, or securities convertible into, our common stock.
Holders
On April 1, 2014, we had 101 shareholders of record of our common stock.
Dividend Policy
We have never paid cash dividends on our capital stock. We currently intend to retain any profits we earn to finance the growth and development of our business. We do not anticipate paying any cash dividends in the foreseeable future.
Section 15(g) of the Securities Exchange Act of 1934
Our shares are covered by Section 15(g) of the Securities Exchange Act of 1934, as amended that imposes additional sales practice requirements on broker/dealers who sell such securities to persons other than established customers and accredited investors (generally institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouses). For transactions covered by the Rule, the broker/dealer must make a special suitability determination for the purchase and have received the purchaser’s written agreement to the transaction prior to the sale. Consequently, the Rule may affect the ability of broker/dealers to sell our securities and also may affect your ability to sell your shares in the secondary market.
Section 15(g) also imposes additional sales practice requirements on broker/dealers who sell penny securities. These rules require a one page summary of certain essential items. The items include the risk of investing in penny stocks in both public offerings and secondary marketing; terms important to in understanding of the function of the penny stock market, such as bid and offer quotes, a dealers spread and broker/dealer compensation; the broker/dealer compensation, the broker/dealers duties to its customers, including the disclosures required by any other penny stock disclosure rules; the customers rights and remedies in causes of fraud in penny stock transactions; and, the FINRA’s toll free telephone number and the central number of the North American Administrators Association, for information on the disciplinary history of broker/dealers and their associated persons.
Securities authorized for issuance under equity compensation plans
We have no equity compensation plans and accordingly we have no shares authorized for issuance under an equity compensation plan.
ITEM 6.
ITEM 6.
SELECTED FINANCIAL DATA.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.
ITEM 7.
ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
This Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contains forward-looking statements that involve known and unknown risks, significant uncertainties and other factors that may cause our 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 those forward-looking statements. You can identify forward-looking statements by the use of the words may, will, should, could, expects, plans, anticipates, believes, estimates, predicts, intends, potential, proposed, or continue or the negative of those terms. These statements are only predictions. In evaluating these statements, you should consider various factors which may cause our actual results to differ materially from any forward-looking statements. Although we believe that the exceptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.
RESULTS OF OPERATIONS
Working Capital
Cash Flows
Operating Revenues
During the year ended December 31, 2013, the Company revenues of $4,765,650 compared to $nil for the period ended December 31, 2012. The increase is due to the fact that the Company earned revenues from services relating to human resources during the fiscal year. For the year ended December 31, 2013, the Company earned gross margin of $727,601 or 15.3%.
Operating Expenses and Net Loss
During the year ended December 31, 2013, the Company incurred operating expenses of $1,192,845 compared to $66,048 for the period ended December 31, 2012. The increase in operating expenses is attributed to the fact that the Company commenced operations during the year and required more overhead costs to support operations including an increase in general and administrative costs of $395,682. Furthermore, the Company had an increase in labor costs such as payroll costs of $448,756, and consulting fees of $187,814. The Company had an increase of $93,977 in professional fees related to accounting, audit, and legal fees with respect to the Company’s SEC reporting requirements and filings, and for work performed on the Company’s acquisition of Career Start Inc.
For the year ended December 31, 2013, the Company recorded a net loss of $759,575 or $0.06 loss per share, compared with a net loss of $317,504 or $nil loss per share. In addition to revenues and operating expenses, the Company recorded a loss of $257,968 (2012 - $245,285) relating to the fair value of the derivative liabilities with respect to the conversion feature of the convertible debenture. The Company also incurred interest expense of $36,363 (2012 - $6,171) relating to interest costs on the Company’s short-term and long-term debt financings.
Liquidity and Capital Resources
As at December 31, 2013, the Company had cash of $227,502 and total current assets of $319,377 compared with cash of $103,241 and total current assets of $103,266 at December 31, 2012. The increase in cash is attributed to the fact that the Company commenced operations during the year and realized cash proceeds from operating activity which helped to offset overhead and operating costs, as the Company had relatively consistent levels of cash proceeds from financing activities. The increase in total current assets is due to an increase in accounts receivable of $87,765 relating to amounts owing from the Company’s operating activities.
As at December 31, 2013, the Company had total current liabilities of $1,075,507 compared to $535,626 at December 31, 2012. The increase in total current liabilities was attributed to an increase in accounts payable and accrued liabilities of $255,306, and an increase of $257,968 in derivative liabilities relating to the fair value of the conversion feature on the convertible debenture.
The overall working capital deficit increased from $432,360 at December 31, 2012 to $756,130 at December 31, 2013. The increase in working capital deficit is due to the non-cash effects of the increase in the derivative liability and the reclassification of the convertible debenture from non-current to current during fiscal 2013. However, a portion of the increase in working capital deficit is due to the fact that the Company has not realized positive cash flows from their operations and continues to be dependent on cash flows from investing and financing activities to support their ongoing operations.
During the year ended December 31, 2013, the Company issued 23,555,555 common shares for proceeds of $150,200 and also issued 1,000,000 preferred shares to management for services with a fair value of $192,583 which was determined by an independent valuator.
Cashflow from Operating Activities
During the year ended December 31, 2013, the Company used cash of $68,939 for operating activities compared to $46,759 for the year ended December 31, 2012. The increase in the use of cash for operating activities was due to the fact that the Company commenced operating activity during fiscal 2013 and has incurred a higher cash cost for general administrative and overhead costs as sales levels are not matured given it is the first year of the Company’s operations.
Cashflow from Investing Activities
During the year ended December 31, 2013, the Company received cash of $43,000 relating to the acquisition of Career Start Inc. The Company did not have any investing activities during the year ended December 31, 2012.
Cashflow from Financing Activities
During the year ended December 31, 2013, the Company received $150,200 from the issuance of common stock compared with $150,000 from the issuance of a convertible debenture during the year ended December 31, 2012.
Convertible Promissory Note
On December 6, 2012, the Company entered into a convertible promissory note agreement for $150,000. Pursuant to the agreement, the loan is unsecured, bears interest at 10% per annum, and is due on December 5, 2014. The note is also convertible into common shares at a conversion price equal to 25% of the average of the three lowest closing prices for the Company’s common shares in the ten trading days prior to conversion, at the option of the note holder, commencing on December 6, 2012.
In accordance with ASC 815, “Accounting for Derivative Instruments and Hedging Activities”, the Company recognized the fair value of the embedded derivative conversion option of $150,000. During the year ended December 31, 2013, the Company recorded accretion expense of $21,363.
Acquisition of Career Start Inc. (“Career”)
On July 13, 2013, the Company entered into a share purchase agreement with Career Start and the shareholders of all of the issued and outstanding common shares of Career. The Company acquired 100% of the issued and outstanding shares of Career in exchange for 47,142,858 common shares of the Company. Following the close of the share exchange agreement, there are 196,198,413 common shares outstanding, of which the former shareholders of Career will control approximately 47,142,858 common shares, or 24% of the total issued and outstanding common shares of the Company. As a result, Career becomes a wholly-owned subsidiary of the Company.
The common shares issued to the Career shareholders were determined to have a fair value of $297,000. The purchase price allocation allocated to the following assets and liabilities:
The fair value of the common shares over the fair value of Career’s assets and liabilities as at July 13, 2013, has been allocated to goodwill. Management performed a qualitative assessment of the goodwill balance at December 31, 2013 and did not note any factors that would indicate impairment of the goodwill amount.
Critical Accounting Policies and Estimates
We prepared our financial statements and the accompanying notes in conformity with accounting principles generally accepted in the United States of America, which require management to make estimates and assumptions about future events that affect the reported amounts in the financial statements and the accompanying notes. We identified certain accounting policies as critical based on, among other things, their impact on the portrayal of our financial condition, results of operations, or liquidity and the degree of difficulty, subjectivity, and complexity in their deployment. Critical accounting policies cover accounting matters that are inherently uncertain because the future resolution of such matters is unknown. Management routinely discusses the development, selection, and disclosure of each of the critical accounting policies. The following is a discussion of our most critical accounting policies:
Use of Estimates
The preparation of financial statements in conformity with US GAAP 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. The Company regularly evaluates estimates and assumptions related to the deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.
Financial Instruments
Pursuant to ASC 820, Fair Value Measurements and Disclosures, an entity is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:
Level 1
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
Level 2
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
Level 3
Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
The Company’s financial instruments consist principally of cash, accounts receivable, accounts payable and accrued liabilities, and convertible debentures. Pursuant to ASC 820, the fair value of our cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. We believe that the recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.
ITEM 7A.
ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.
ITEM 8
ITEM 8
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
EXCELSIS INVESTMENTS, INC.
(formerly Pub Crawl Holdings Inc.)
Consolidated Financial Statements
For the years ended December 31, 2013 and 2012
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Balance Sheets
Statements of Operations
Statements of Stockholders’ Deficit
Statements of Cash Flows
Notes to Financial Statements
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors
Excelsis Investments, Inc.
Largo, Florida
We have audited the accompanying consolidated balance sheets of Excelsis Investments, Inc. and its subsidiary (collectively, the “Company”) as of December 31, 2013 and 2012 and the related consolidated statements of operations, stockholders’ deficit, and cash flows for the year then ended December 31, 2013 and the period from November 7, 2012 through December 31, 2012. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an 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 audits 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 also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 consolidated financial position of Excelsis Investments, Inc. and its subsidiary as of December 31, 2013 and 2012 and the consolidated results of their operations and their cash flows for the year then ended December 31, 2013 and the period from November 7, 2012 through December 31, 2012, 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 1 to the financial statements, the Company has suffered net losses and has a working capital deficiency. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
In 2014, it was determined the 2012 financial statements were misstated resulting in an understatement of liabilities and an overstatement of equity as disclosed in Note 12 to the financial statements.
MALONEBAILEY, LLP
www.malonebailey.com
Houston, Texas
April 14, 2014
EXCELSIS INVESTMENTS, INC.
(formerly Pub Crawl Holdings Inc.)
Consolidated Balance Sheets
(The accompanying notes are an integral part of these consolidated financial statements)
EXCELSIS INVESTMENTS, INC.
(formerly Pub Crawl Holdings Inc.)
Consolidated Statements of Operations
(The accompanying notes are an integral part of these consolidated financial statements)
EXCELSIS INVESTMENTS, INC.
(formerly Pub Crawl Holdings Inc.)
Consolidated Statements of Cashflows
(The accompanying notes are an integral part of these consolidated financial statements)
EXCELSIS INVESTMENTS, INC.
(formerly Pub Crawl Holdings Inc.)
Consolidated Statements of Stockholders’ Deficit
November 7, 2012 through December 31, 2013
(The accompanying notes are an integral part of these consolidated financial statements)
EXCELSIS INVESTMENTS, INC.
(formerly Pub Crawl Holdings Inc.)
Notes to the Consolidated Financial Statements
1. Nature of Operations and Continuance of Business
Pub Crawl Holdings, Inc. (the “Company”) was incorporated in the state of Nevada on May 27, 2010. On June 14, 2010, the Company entered into an Assignment Agreement (the "Acquisistion") with PB PubCrawl.com LLC (“PubCrawl”), a California limited liability company, whereby the Company acquired a 100% interest in the member shares of PubCrawl in exchange for 5,000,000 common shares of the Company. The Acquisition was accounted for in accordance with ASC 805-50, Related Issues, as the companies were under common control prior to acquisition. On September 3, 2012, the Company sold their rights to PubCrawl to the former President and Director of the Company.
On November 28, 2012, the Company acquired 100% of the members shares of Mobile Dynamic Marketing, Inc. (“Mobile Dynamic”), a company incorporated in the state of Florida on November 7, 2012, in exchange for the issuance of 10,000,000 common shares. As part of the acquisition, the Company cancelled 150,000,000 issued and outstanding common shares held by the former President and Director of the Company and the management and directors of Mobile Dynamic acquired 75,000,000 common shares of the Company in a private transaction with the former President and Director of the Company. Effectively, Mobile Dynamic shareholders held 85,000,000 shares or 68% of the issued and outstanding common shares of the Company and the transaction has been accounted for as a reverse merger, where Mobile Dynamic is deemed to be the acquirer for accounting purposes. 40,500,000 shares were retained by the Company shareholders and Mobile Dynamic assumed $120,000 of the Company’s liabilities.
On July 13, 2013, the Company entered into a share exchange agreement with Career Start, Inc. (“Career”), a private corporation formed under the state of Florida on February 4, 2013. Under the terms of the agreement, the Company acquired the net assets of Career in exchange for 47,142,858 common shares of the Company. The acquisition was accounted for as a business combination, as disclosed in Note 4 of the financial statements.
Going Concern
These financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. During the year ended December 31, 2013, the Company has a working capital deficit and an accumulated deficit. The continuation of the Company as a going concern is dependent upon the continued financial support from its management, and its ability to identify future investment opportunities and obtain the necessary debt or equity financing, and generating profitable operations from the Company’s future operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
2. Summary of Significant Accounting Policies
a) Basis of Presentation and Principles of Consolidation
The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) and are expressed in U.S. dollars. These consolidated financial statements comprise the accounts of the Company and its wholly-owned subsidiary, Career Start, Inc., a Florida Company. All intercompany transactions have been eliminated on consolidation. The Company’s fiscal year end is December 31.
EXCELSIS INVESTMENTS, INC.
(formerly Pub Crawl Holdings Inc.)
Notes to the Consolidated Financial Statements
2. Summary of Significant Accounting Policies (continued)
b) Use of Estimates
The preparation of financial statements in conformity with US GAAP 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. The Company regularly evaluates estimates and assumptions related to the deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.
c) Cash and Cash Equivalents
The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents. As at December 31, 2013 and 2012, the Company had no cash equivalents.
d) Accounts Receivable
Accounts receivable represents amounts owed from customers for contracting employees and from consulting services. Amounts are presented net of the allowance for doubtful accounts, which represents the Company’s best estimate of the amount of probable credit losses in the existing accounts receivable balance. The Company determines allowance for doubtful accounts based upon historical experience and current economic conditions. The Company reviews the adequacy of its allowance for doubtful accounts on a regular basis. As of December 31, 2013, the Company had no allowances for doubtful accounts.
e) Goodwill
Good will is carried at cost less impairment. On acquisition of business, fair values are attributed to the assets and liabilities of the acquired business at the date of acquisition. Goodwill arises when the fair value of the consideration given for a business exceeds the fair value of the net assets.
f) Impairment of Goodwill
Goodwill is reviewed for impairment annually and whenever events or changes in circumstance indicate that the carrying amount of such an asset may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset. Measurement of an impairment loss for goodwill is based on the fair value of the asset.
EXCELSIS INVESTMENTS, INC.
(formerly Pub Crawl Holdings Inc.)
Notes to the Consolidated Financial Statements
2. Summary of Significant Accounting Policies (continued)
g) Basic and Diluted Net Loss per Share
The Company computes net loss per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive. As at December 31, 2013 and 2012, the Company had 211,764,705 and nil potentially dilutive common shares, respectively.
h) Development Stage Company
The Company was considered a development stage company as defined by ASC 915-10-05 during the year ended December 31, 2012. As a development stage enterprise, the Company discloses the deficit accumulated during the development stage and the cumulative statements of operations and cash flows from inception to the current balance sheet date. An entity remains in the development stage until such time as, among other factors, revenues have been realized. During the year ended December 31, 2013, the Company realized significant revenues from operations, and has the expectation to continue recognizing revenues from operations. As at and for the year ended December 31, 2013, the Company ceased to be a development stage company.
i) Revenue Recognition
The Company derives revenue from contracting employees to its customers and providing consulting services. In accordance with ASC 605, Revenue Recognition, revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the amount is fixed and determinable, risk of ownership has passed to the customer and collection is reasonably assured. During the year ended December 31, 2013, 60% of the revenue is derived from two customers.
j) Financial Instruments
Pursuant to ASC 820, Fair Value Measurements and Disclosures, an entity is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:
Level 1
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
EXCELSIS INVESTMENTS, INC.
(formerly Pub Crawl Holdings Inc.)
Notes to the Consolidated Financial Statements
2. Summary of Significant Accounting Policies (continued)
Level 2
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
Level 3
Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
The Company’s financial instruments consist principally of cash, accounts receivable, accounts payable and accrued liabilities, and convertible debentures. Pursuant to ASC 820, the fair value of our cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. We believe that the recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.
The following table represents assets and liabilities that are measured and recognized in fair value as of December 31, 2013, on a recurring basis:
During the year ended December 31, 2012, the Company had a derivative liability amount of $395,285, which was classified as a Level 3 financial instrument, and a loss on change in fair value of derivative liabilities of $245,285.
k) Income Taxes
Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted ASC 740 “Accounting for Income Taxes” as of its inception. Pursuant to ASC 740, the Company is required to compute tax asset benefits for net operating losses carried forward. The potential benefits of net operating losses have not been recognized in this financial statement because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.
l) Stock based compensation
We account for stock based compensation in accordance with FASB ASC 718 which requires companies to measure the cost of employee services received in exchange for an award of an equity instrument based on the grant-date fair value of the award. For stock-based awards, stock-based compensation expense is recognized on the straight-line basis over the requisite service period. In prior years, we accounted for stock-based awards under APB No. 25, "Accounting for Stock Issued to Employees." We account for non-employee share-based awards in accordance with FASB ASC 505-50.
m) Recent Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
EXCELSIS INVESTMENTS, INC.
(formerly Pub Crawl Holdings Inc.)
Notes to the Consolidated Financial Statements
3. Reverse Merger
On November 28, 2012, the Company acquired 100% of the members shares of Mobile Dynamic Marketing, Inc. (“Mobile Dynamic”), a company incorporated in the state of Florida on November 7, 2012, in exchange for the issuance of 10,000,000 common shares. As part of the acquisition, the Company cancelled 150,000,000 issued and outstanding common shares held by the former President and Director of the Company and the management and directors of Mobile Dynamic acquired 75,000,000 common shares of the Company in a private transaction with the former President and Director of the Company. Effectively, Mobile Dynamic shareholders held 85,000,000 shares or 68% of the issued and outstanding common shares of the Company and the transaction has been accounted for as a reverse merger, where Mobile Dynamic is deemed to be the acquirer for accounting purposes. 40,500,000 shares were retained by the Company shareholders and Mobile Dynamic assumed $120,000 of the Company’s liabilities.
4. Acquisition of Career Start, Inc.
On July 13, 2013, the Company entered into a share purchase agreement with Career and the shareholders of all of the issued and outstanding common shares of Career. The Company acquired 100% of the issued and outstanding shares of Career in exchange for 47,142,858 common shares of the Company. Following the close of the share exchange agreement, there are 196,198,413 common shares outstanding, of which the former shareholders of Career will control approximately 47,142,858 common shares, or 24% of the total issued and outstanding common shares of the Company. As a result, Career becomes a wholly-owned subsidiary of the Company.
The common shares issued to the Career shareholders were determined to have a fair value of $297,000. The purchase price allocation allocated to the following assets and liabilities:
The fair value of the common shares over the fair value of Career’s assets and liabilities as at July 13, 2013, has been allocated to goodwill.
Proforma financial information required by ASC 805 is not applicable given Career was formed in 2013 just prior to our acquisition of Career.
5. Convertible Debentures
On December 6, 2012, the Company entered into a convertible promissory note agreement for $150,000. Pursuant to the agreement, the loan is unsecured, bears interest at 10% per annum, and is due on December 5, 2014. The note is also convertible into common shares at a conversion price equal to 25% of the average of the three lowest closing prices for the Company’s common shares in the ten trading days prior to conversion, at the option of the note holder, commencing on December 6, 2012.
EXCELSIS INVESTMENTS, INC.
(formerly Pub Crawl Holdings Inc.)
Notes to the Consolidated Financial Statements
5. Convertible Debentures (continued)
In accordance with ASC 815, “Accounting for Derivative Instruments and Hedging Activities”, the Company recognized the fair value of the embedded derivative conversion option of $150,000 as a debt discount and is amortizing it over the life of the note using the effective interest method. During the years ended December 31, 2013 and 2012, the Company recorded accretion expense of $21,363 and $5,144, respectively.
6. Derivative Liabilities
The Company records the fair value of the of the conversion price of the convertible debentures disclosed in Note 5 in accordance with ASC 815, Derivatives and Hedging. The fair value of the derivative was calculated using a multi-nominal lattice model performed by an independent qualified business valuator. The fair value of the derivative liability is revalued on each balance sheet date with corresponding gains and losses recorded in the consolidated statement of operations. During the year ended December 31, 2013, the Company recorded a loss on the change in fair value of derivative liability of $257,968 (2012 - $245,285). As at December 31, 2013, the Company recorded a derivative liability of $653,253 (2012 - $395,285).
The following inputs and assumptions were used to value the convertible debenture outstanding during the year ended December 31, 2013:
•
The underlying stock price of $0.0035 was used as the fair value of the common stock
•
The principal of the debenture on the December 6, 2012 date of issuance was $150,000
•
The balance of the principal of the debenture on the December 6, 2012, the date the debenture became convertible, was $150,000
•
The balance of the principal and interest of the debenture on the December 31, 2013 was $166,027.
•
Capital raising events are not a factor for the debenture
•
The Holder would redeem based on availability of alternative financing,0% of the time increasing 1.0% monthly to a maximum of 10%
•
The projected annual volatility for each valuation period was based on the historic volatility of the Company of 318 as at December 6, 2012 and 243% as at December 31, 2013
•
An event of default would occur 0% of the time, increasing to 1.0% per month to a maximum of 20%. To date, the debenture is not in default nor converted by the Holder.
A summary of the activity of the derivative liability is shown below:
7. Related Party Transactions
a)
During the year ended December 31, 2013, the Company incurred payroll expense of $113,000 (2012 - $18,484) to management and officers of the Company.
b)
As of December 31, 2013, the Company had $100 owed to a director of Career, which is non-interest bearing, unsecured, and due on demand.
EXCELSIS INVESTMENTS, INC.
(formerly Pub Crawl Holdings Inc.)
Notes to the Consolidated Financial Statements
8. Note Payable
At December 31, 2013, the Company owes $120,000 (2012 - $120,000) in a note payable to a non-related party. Under the terms of the note, the amount is unsecured, due interest at 10% and due on demand. This note was assumed as part of the reverse merger. See note 3 for details.
9. Common Shares
a)
On November 6, 2012, the Company issued 85,000,000 founders share with a nominal fair value to management and directors of the Company.
b)
On November 28, 2012, the Company completed a reverse merger whereby the Company’s shareholders retained 40,500,000 shares of the Company and the net liabilities of $120,000 were merged into Mobile Dynamic. See note 3 for details.
c)
On May 7, 2013, the Company issued 10,000,000 common shares at $0.0075 per share for proceeds of $75,000.
d)
On June 10, 2013, the Company issued 5,555,555 common shares at $0.009 per share for proceeds of $50,000.
e)
On July 13, 2013, the Company issued 47,142,858 common shares with a fair value of $297,000 for the acquisition of Career, as noted in Note 4.
f)
On July 17, 2013, the Company issued 8,000,000 common shares at $0.0032 per share for proceeds of $25,200.
g)
During the year ended December 31, 2013, the Company issued 1,000,000 shares of preferred stock to management of the Company for compensation. The shares of preferred stock are not convertible, carry voting rights of 1,000 votes per preferred share and the fair value of the preferred shares were deemed to be $192,583 based on the voting rights of the preferred shares relative to the fair value of the Company at the date of issuance.
10. Commitment
On May 1, 2013, Career entered into a factoring and security agreement for credit and collection services and is committed to pay an initial factoring fee of 1.50% and a factoring fee of 0.50% on the face value of amounts purchased from Career, and a minimum monthly fee of $500 as compensation for credit and collection services. All amounts factored are non recourse.
11. Income Taxes
The Company has $355,000 of net operating losses carried forward to offset taxable income in future years which expire commencing in fiscal 2032. The income tax benefit differs from the amount computed by applying the US federal income tax rate of 34% to net loss before income taxes. As at December 31, 2013, the Company had no uncertain tax positions.
The significant components of deferred income tax assets and liabilities at December 31, 2013 and 2012 are as follows:
EXCELSIS INVESTMENTS, INC.
(formerly Pub Crawl Holdings Inc.)
Notes to the Consolidated Financial Statements
12. Restatement
In 2014, it was determined the November 28, 2012 reverse merger transaction (refer to note 3) incorrectly understated liabilities and overstated paid in capital by $120,000 each. The financial statements reflect this change by increasing liabilities and decreasing equity as of December 31, 2012 each by $120,000.
13. Subsequent Events
In accordance with ASC 855, we have evaluated subsequent events through the date of issuance of the financial statements, and did not have any material recognizable subsequent events, excepting the following:
a) On January 15, 2014, the Company issued 100,000 common shares of the Company for employee bonuses.
ITEM 9.
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
There have been no disagreements on accounting and financial disclosures from the inception of our company through the date of this Form 10-K. MaloneBailey, LLP has audited our financial statements for the years ended December 31, 2013 and 2012.
Previous independent registered public accounting firm
On February 21, 2014, we terminated M&K CPAS, PLLC, as our independent registered public accounting firm. The decision to dismiss M&K CPAS, PLLC as our independent registered public accounting firm was approved by our Board of Directors on February 21, 2014. Except as noted in the paragraph immediately below, the reports of M&K CPAS, PLLC’s financial statements for the year ended December 31, 2012 did not contain an adverse opinion or disclaimer of opinion, and such reports were not qualified or modified as to uncertainty, audit scope, or accounting principle.
The reports of M&K CPAS, PLLC on our financial statements as of and for the year end December 31, 2012 contained an explanatory paragraph which noted that there was substantial doubt as to our ability to continue as a going concern. The continuation of our ability to continue as a going concern is dependent upon the continued financial support from our shareholders, the ability to raise equity or debt financing, and the attainment of profitable operations from our future business. These factors raise substantial doubt regarding our ability to continue as a going concern.
From our inception on November 6, 2012 through December 31, 2012 and through November 19, 2013 we have not had any disagreements with M&K CPAS, PLLC on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to M&K CPAS, PLLC ‘s satisfaction, would have caused it to make reference to the subject matter of the disagreements in its reports on our consolidated financial statements for such years or in connection with its reports in any subsequent interim period through the date of dismissal.
From our inception on November 6, 2012 through year ended December 31, 2012 and through November 19, 2014, there were no reportable events, as defined in Item 304(a)(1)(v) of Regulation S-K.
On February 21, 2014, we delivered a copy of this report to M&K CPAS, PLLC. M&K CPAS, PLLC has not issued its response. M&K CPAS, PLLC advised our attorney that it had a firm policy which required that we pay for the assistance with the successor auditor and re-issuance of our opinion prior to providing Exhibit 16.1. We believed that the fee request was unwarranted since MaloneBailey reaudited the year ended December 31, 2012; there was no reason or need for a reaudit opinion from M&K CPAS, PLLC; and, MaloneBailey had no need to to consult with M&K CPAS, PLLC.
New independent registered public accounting firm
On February 21, 2014, we engaged MaloneBailey, LLP, 9801 Westheimer Road, Houston, Texas 77042 an independent registered public accounting firm, as our principal independent accountant with the approval of our board of directors. We have not consulted with MaloneBailey, LLP on any accounting issues prior to engaging them as our new auditors. We requested that MaloneBailey, LLP reaudit our financial statements for the year ended December 31, 2012, previously audited by M&K CPAS, PLLC.
During the two most recent fiscal years and through the date of engagement, we have not consulted MaloneBailey, LLP with regarding either:
1.
The application of accounting principles to any specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on our financial statements, and neither a written report was provided to us nor oral advice was provided that Malone & Bailey, P.C. concluded was an important factor considered by us in reaching a decision as to the accounting, auditing or financial reporting issue; or
2.
Any matter that was either subject of disagreement or event, as defined in Item 304(a)(1)(iv)(A) of Regulation S-K and the related instruction to Item 304 of Regulation S-K, or a reportable event, as that term is explained in Item 304(a)(1)(iv)(A) of Regulation S-K.
ITEM 9A.
ITEM 9A.
CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
We maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. We conducted an evaluation (the “Evaluation”), under the supervision and with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures (“Disclosure Controls”) as of the end of the period covered by this report pursuant to Rule 13a-15 of the Exchange Act. Based on this Evaluation, our CEO and CFO concluded that our disclosure controls and procedures were not effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms due to material weaknesses in our internal controls described below.
Limitations on the Effectiveness of Controls
Our management, including our CEO and CFO, does not expect that our disclosure controls and internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within us have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management or board override of the control.
The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
CEO and CFO Certifications
Appearing immediately following the Signatures section of this report there are Certifications of the CEO and the CFO. The Certifications are required in accordance with Section 302 of the Sarbanes-Oxley Act of 2002 (the Section 302 Certifications). This Item of this report, which you are currently reading is the information concerning the Evaluation referred to in the Section 302 Certifications and this information should be read in conjunction with the Section 302 Certifications for a more complete understanding of the topics 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 such term is defined in Exchange Act Rule 13a-15(f). Our internal control over financial reporting is a process designed to provide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.
Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2013. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. Based on our assessment, we believe that, as of December 31, 2013, our internal control over financial reporting was not effective based on those criteria.
Management’s assessment identified several material weaknesses in our internal control over financial reporting. These material weaknesses include the following:
-
Insufficient number of qualified accounting personnel governing the financial close and reporting process
-
Lack of proper segregation of duties
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 temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.
Changes in Internal Controls
There were no changes in our internal control over financial reporting during the quarter ended December 31, 2013 that have affected, or are reasonably likely to affect, our internal control over financial reporting.
ITEM 9B.
ITEM 9B.
OTHER INFORMATION.
None.
PART III
ITEM 10.
ITEM 10.
DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CORPORATE GOVERNANCE.
Officers and Directors
Our sole director will serve until his successor is elected and qualified. Our officers are elected by the board of directors to a term of one (1) year and serves until their successor is duly elected and qualified, or until they are removed from office. The board of directors has no nominating, auditing or compensation committees.
The names, ages and positions of our present officers and director are set forth below:
Background of officers and directors
Brian McFadden
Since November 29, 2012 Brian McFadden has been our president, principal executive officer and a member of our board of directors. Brian McFadden graduated from Hamilton College in 2007 where he studied both Economics and Sociology. Following graduation and through December 2008, Mr. McFadden worked for Rogers Associates Machine Tool Corp as the Director of Business Development where he designed and implemented sales plans for major companies and Government entities including NASA, Ball Aerospace, The Harris Corporation and others. In December 2008, Mr. McFadden founded Rail Nine Media, a full service web design and marketing house that has worked with clients ranging from MTV’s Bam Margera to major financial service companies on all aspects of marketing. Mr. McFadden is responsible for the daily operation and maintenance of us and its clientele. In this role, Mr. McFadden has created and maintained Social Media Marketing Campaigns, SMS Messaging campaigns, Print Media, Web Media and comprehensive multi-media campaigns. In April 2010, Mr. McFadden co-founded IRocNights, a single source hospitality resource for the Western New York Region. IRocNights expanded from Syracuse to Buffalo and gained major traction with over 100 clients in less than a year. While running IRocNights, Mr. McFadden assisted in the creation of a 25-member team that cultivated and maintained relationships with numerous local businesses, politicians and social groups. Mr. McFadden expanded his IRocNights customer base through the launch of Let’s Stay Local in March 2011, a daily deal site specializing in Entertainment and targeting nightlife venue demographics. Capitalizing on the Groupon momentum, Let’s Stay Local focused on daily deals for the targeted younger generations. While at Let’s Stay Local, Mr. McFadden was responsible for building the consumer distribution list while ensuring that the proper Daily Deals had been acquired and scheduled. Mr. McFadden sold IRocNights and its partnering businesses in October of 2011. Mr. McFadden currently remains at Rail Nine Media, where he started working in 2008.
Michelle Pannoni
Since November 29, 2012, Michelle Pannoni has been our secretary, treasurer, principal financial officer, principal accounting officer, and a member of the board of directors. Ms. Pannoni attended Monroe Community College and Rochester Institute of Technology in Rochester, New York. She subsequently began her professional career in Rochester New York, employing her accounting educational background, in various businesses. She expanded her career experience capitalizing on her marketing background and secured a marketing position in a hospitality enterprise with full accountability for all phases of marketing management, promotions and sales. Ms. Pannoni relocated to Florida for an opportunity as VP Marketing for a Marketing Group of various condominium tracts where she was responsible for the development, execution, and tracking of multiple web based marketing lead generation and sales programs. She continued to expand her business expertise, serving in the management, marketing, and accounting functions for various private and public venues, all with corporate objectives related to utilizing her skill set in the development and ongoing management of web based marketing services. In April of 2007, Ms. Pannoni launched her own unique retail business “Talk of the Town Accessories” which she developed, marketed, and brought to a profitable sale in September 2009. In October 2009 she became active as Florida Realtor specializing in the analysis, packaging, and web based marketing and sales of Commercial Real Estate venues including mixed use land sites, apartment and condominium conversion projects, marinas, and hospitality/hotel acquisition projects. In March of 2011, Ms. Pannoni launched her own web based marketing and design company -Trudico LLC, and simultaneously partnered with Brian McFadden, for the launch of Let’s Stay Local, an Entertainment venue designed to leverage the Groupon Daily Deal phenomenon into a younger, recurring, local nightlife demographic. Ms. Pannoni and Mr. McFadden, subsequently launched the publicaly traded entity today known as Excelsis Investments.
Conflicts of Interest
We believe that our current officers and directors will not be subject to conflicts of interest. No policy has been implemented or will be implemented to address conflicts of interest.
Audit Committee Financial Expert
We do not have an audit committee financial expert. We do not have an audit committee financial expert because we believe the cost related to retaining a financial expert at this time is prohibitive. Further, because we are only beginning our commercial operations, at the present time, we believe the services of a financial expert are not warranted.
Involvement in Certain Legal Proceedings
During the past ten years, Mr. McFadden and Ms. Pannoni have not been the subject of the following events:
1.
A petition under the Federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;
2.
Convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);
3.
The subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities;
i)
Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;
ii)
Engaging in any type of business practice; or
iii)
Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;
4.
The subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph 3.i in the preceding paragraph or to be associated with persons engaged in any such activity;
5.
Was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;
6.
Was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;
7.
Was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:
i)
Any Federal or State securities or commodities law or regulation; or
ii)
Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or
iii)
Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
8.
Was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
Audit Committee and Audit Committee Financial Expert
We do not have an audit committee or an audit committee financial expert (as defined in Item 407 of Regulation S-K) serving on its board of directors. All current members of the board of directors lack sufficient financial expertise for overseeing financial reporting responsibilities. We have not yet employed an audit committee financial expert due to the inability to attract such a person.
We intend to establish an audit committee of the Board of Directors, which will consist of independent directors. The audit committee’s duties will be to recommend to our board of directors the engagement of an independent registered public accounting firm to audit our financial statements and to review our accounting and auditing principles. The audit committee will review the scope, timing and fees for the annual audit and the results of audit examinations performed by the internal auditors and independent registered public accounting firm, including their recommendations to improve the system of accounting and internal controls. The audit committee will at all times be composed exclusively of directors who are, in our opinion, free from any relationship which would interfere with the exercise of independent judgment as a committee member and who possess an understanding of financial statements and generally accepted accounting principles.
Code of Ethics
We have adopted a corporate code of ethics. We believe our code of ethics is reasonably designed to deter wrongdoing and promote honest and ethical conduct; provide full, fair, accurate, timely and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting of code violations; and provide accountability for adherence to the code. A copy of the code of ethics was filed as Exhibit 14.1 our 2009 Annual Report on Form 10-K as filed with the Securities and Exchange Commission on April 1, 2010.
Disclosure Committee and Charter
We do not have a disclosure committee and disclosure committee charter. We plan to establish a Disclosure Committee and will operate under a charter. The purpose of a disclosure committee would be to provide assistance to the Principal Executive Officer and the Principal Financial Officer in fulfilling their responsibilities regarding the identification and disclosure of material information about us and the accuracy, completeness and timeliness of our financial reports.
Section 16(a) Beneficial Ownership Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers and directors, and persons who beneficially own more than 10% of a registered class of our equity securities to file with the Securities and Exchange Commission initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of our common shares and other equity securities, on Forms 3, 4 and 5 respectively. Executive officers, directors and greater than
10% stockholders are required by the Securities and Exchange Commission regulations to furnish us with copies of all Section 16(a) reports they file. Based on our review of the copies of such forms received by us, or written representations that no other reports were required, and to the best of our knowledge, we believe that all of our officers, directors, and owners of 10% or more of our common stock filed all required Forms 3, 4, and 5 with the exception of Hubert Elrington and Peter Kramer who never filed any Forms 3, 4 or 5 and have no intention to do so.
ITEM 11.
ITEM 11.
EXECUTIVE COMPENSATION.
The following table sets forth the compensation paid by us for the last two years ended December 31, 2013 and 2012, to our officers. This information includes the dollar value of base salaries, bonus awards and number of stock options granted, and certain other compensation, if any. The compensation discussed addresses all compensation awarded to, earned by, or paid to our named executive officers.
Summary Compensation Table
We anticipate paying an additional $100,000 to each in 2013.
The following table sets forth the compensation paid by us to our directors for the year ending December 31, 2013. This information includes the dollar value of base salaries, bonus awards and number of stock options granted, and certain other compensation, if any. The compensation discussed addresses all compensation awarded to, earned by, or paid to our named director.
Director Compensation Table
All compensation received by our officers and directors has been disclosed.
We have not paid any compensation to our directors in 2014.
There are no stock option, retirement, pension, or profit sharing plans for the benefit of our officers and directors.
Director Independence
None of directors are deemed independent as a matter of law.
Long-Term Incentive Plan Awards
We do not have any long-term incentive plans that provide compensation intended to serve as incentive for performance at this time.
Indemnification
Under our Articles of Incorporation and Bylaws of the corporation, we may indemnify an officer or director who is made a party to any proceeding, including a law suit, because of his position, if he acted in good faith and in a manner he reasonably believed to be in our best interest. We may advance expenses incurred in defending a proceeding. To the extent that the officer or director is successful on the merits in a proceeding as to which he is to be indemnified, we must indemnify him against all expenses incurred, including attorney’s fees. With respect to a derivative action, indemnity may be made only for expenses actually and reasonably incurred in defending the proceeding, and if the officer or director is judged liable, only by a court order. The indemnification is intended to be to the fullest extent permitted by the laws of the State of Nevada.
Regarding indemnification for liabilities arising under the Securities Act of 1933, which may be permitted to directors or officers under Nevada law, we are informed that, in the opinion of the Securities and Exchange Commission, indemnification is against policy, as expressed in the Act and is, therefore, unenforceable.
ITEM 12.
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
The following table sets forth, as of April 1, 2014, the beneficial ownership of the outstanding common stock and preferred stock: (i) any holder of more than five (5%) percent; (ii) each of our executive officers and directors; and (iii) our directors and executive officers as a group. Unless otherwise indicated, each of the stockholders named in the table below has sole voting and dispositive power with respect to such shares of common stock. As of April 1, 2014, there were 196,198,413 shares of common stock issued and outstanding.
(1)
Brian McFadden acquired 5,000,000 shares of common stock directly from us and 37,500,000 shares of common stock on November 27, 2012 in a private transaction from Hubert Elrington, a former officer and director.
(2)
Michelle Pannoni acquired 5,000,000 shares of common stock directly from us and 37,500,000 shares of common stock on November 27, 2012 in a private transaction from Hubert Elrington, a former officer and director.
(3)
Hubert Elrington irrevocably canceled and returned to authorized but unissued status a total of 150,000,000 shares of common stock on November 28, 2012.
(4)
1,000,000 shares of our capital stock is designated as Series A Preferred Stock. 500,000 shares are owned by Brian McFadden our president, principal executive officer and a director and 500,000 shares are owned by Michelle Pannoni, our secretary, treasurer, principal financial officer and a director. Each share of Series A Preferred Stock has 1,000 votes. According the combined voting power of the Series A Preferred Stock is 1,000,000,000 votes. Our Series A Preferred Stock is not registered under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended. Accordingly, Mr. McFadden and Ms. Pannoni have sufficient votes to out vote all of the common stock shareholders on any matter coming before our shareholders for a vote.
Future sales by existing stockholders
Rule 144 of the Securities Act of 1933, as amended, (the “Act”) is available for the resale of our shares of common stock because we are no longer categorized as a “shell company” as that term is defined in Reg. 405 of the Act. A “shell company” is a corporation with no or nominal assets or its assets consist solely of cash, and no or nominal operations.
ITEM 13.
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
As of December 31, 2013, we owed $100 (2012 - $nil) to a director of Career Start Inc. The amount owing is unsecured, non-interest bearing, and due on demand.
During the period ended December 31, 2013, we incurred payroll expense of $113,000 (2012 - $18,484) to management and directors of the Company.
In July, 2013, we issued 1,000,000 shares of our capital stock is designated as Series A Preferred Stock. 500,000 shares were issued to Brian McFadden our president, principal executive officer and a director and 500,000 shares were issued to Michelle Pannoni, our secretary, treasurer, principal financial officer and a director. Each share of Series A Preferred Stock has 1,000 votes. According the combined voting power of the Series A Preferred Stock is 1,000,000,000 votes. Our Series A Preferred Stock is not registered under the Securities Exchange Act of 1934, as amended. Accordingly, Mr. McFadden and Ms. Pannoni have sufficient votes to out vote all of the common stock shareholders on any matter coming before our shareholders for a vote. The preferred shares were issued in consideration of services valued at $192,583.
Other than the foregoing, none of our directors or executive officers, nor any person who owned of record or was known to own beneficially more than 5% of our outstanding shares of common stock, nor any associate or affiliate of such persons or companies, has any material interest, direct or indirect, in any transaction that has occurred during the past fiscal year, or in any proposed transaction, which has materially affected or will affect us.
ITEM 14.
ITEM 14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(1) Audit Fees
The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for our audit of annual financial statements and review of financial statements included in our Form 10-Qs or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years was:
(2) Audit-Related Fees
The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountants that are reasonably related to the performance of the audit or review of our financial statements and are not reported in the preceding paragraph:
(3) Tax Fees
The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning was:
(4) All Other Fees
The aggregate fees billed in each of the last two fiscal years for the products and services provided by the principal accountant, other than the services reported in paragraphs (1), (2), and (3) was:
(5) Our audit committee’s pre-approval policies and procedures described in paragraph (c)(7)(i) of Rule 2-01 of Regulation S-X were that the audit committee pre-approve all accounting related activities prior to the performance of any services by any accountant or auditor.
(6) The percentage of hours expended on the principal accountant’s engagement to audit our financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full time, permanent employees was 0%.
PART IV
ITEM 15.
ITEM 15.
EXHIBITS AND FINANCIAL STATEMENTS SCHEDULES.
3.7
Amended Articles of Incorporation - March 26, 2013.
X
3.8
Amended Articles of Incorporation - October 24, 2013.
X
10.1
Assignment Agreement between the Company, Peter
Kremer, and PBPubCrawl.com, LLC dated June 14, 2010
S-1
10/07/10
10.1
10.2
Form of Management Agreement between the Company
and Peter Kremer dated June 22, 2010
S-1
10/07/10
10.2
10.3
Promissory Note between the Company and Sun Valley
Investments dated August 5, 2010
S-1
10/07/10
10.3
10.4
Consulting Agreement between the Company and
Voltaire Gomez dated September 23, 2010
S-1
10/07/10
10.4
10.5
Settlement Agreement between the Company and Sun
Valley Investments dated May 25, 2012
8-K
08/11/12
10.1
10.6
Promissory Note between the Company and Deville
Enterprises, Inc. dated June 1, 2012
8-K
08/11/12
10.2
14.1
Code of Ethics
S-1
10/07/10
14.1
21.1
List of Subsidiaries
S-1
10/07/10
21.1
31.1
Certification of Principal Executive Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
X
31.2
Certification of Principal Financial Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
X
32.1
Certification of Chief Executive Officer pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
X
32.2
Certification of Chief Financial Officer pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
X
101.INS
XBRL Instance Document.
X
101.SCH
XBRL Taxonomy Extension - Schema.
X
101.CAL
XBRL Taxonomy Extension - Calculations.
X
101.DEF
XBRL Taxonomy Extension - Definitions.
X
101.LAB
XBRL Taxonomy Extension - Labels.
X
101.PRE
XBRL Taxonomy Extension - Presentation.
X
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities and Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 14th day of April, 2014.
Pursuant to the requirements of the Securities Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated:
EXHIBIT INDEX
31.1
Certification of Principal Executive Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
X
31.2
Certification of Principal Financial Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
X
32.1
Certification of Chief Executive Officer pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
X
32.2
Certification of Chief Financial Officer pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
X
101.INS
XBRL Instance Document.
X
101.SCH
XBRL Taxonomy Extension - Schema.
X
101.CAL
XBRL Taxonomy Extension - Calculations.
X
101.DEF
XBRL Taxonomy Extension - Definitions.
X
101.LAB
XBRL Taxonomy Extension - Labels.
X
101.PRE
XBRL Taxonomy Extension - Presentation.
X