Item 1
Business
Overview
India Ecommerce Corporation (“we,” “our,” “us,” or “the Company”) was incorporated on January 19, 2011 under the laws of the State of Nevada.
We are a development stage company in the business of developing, promoting and managing a multitude of cloud-based services and ecommerce websites/mobile applications for both the Indian consumer and business marketplace. We will create rapid development teams that can push website services into the marketplace in a quick and efficient manner to capture first mover advantages in the burgeoning online Indian marketplace. One of our stated goals is to create internet properties that require minimal manpower to manage and maintain and are operationally profitable from day one.
India is the world’s second most populous country and is renowned for its high tech community, but still has yet to produce a dominant ecommerce company the likes of Amazon.com, Buy.com, or eBay. We feel that IEC will operate and thrive in an Indian online market that is still in its infancy.
Cloud Based Services
We will continue to negotiate with leading cloud-based service providers for gaining marketing rights in India. We are actively pursuing such arrangements. On December 10, 2013, we entered into a Memorandum of Understanding with Cima Software Corporation to launch cloud based services in the areas of document management and online backup, initially targeting the education, banking, and insurance sectors of the Indian economy.
We will launch our cloud-based services as early as the second quarter of 2014, and hope to launch a personal cloud based solution for the Indian marketplace by the end of 2014.
Traditional Ecommerce Websites
We are also building "copycat" websites in popular areas to round out our portfolio of ecommerce websites. While none of these are very innovative as compared to other websites under consideration, IEC wants to establish our portal to attract many customers that will stay on IEC portfolio websites while they surf the internet.
http://property.indiaecommercecorporation.com/ (Real Estate Site)
http://jobportal.indiaecommercecorporation.com (Job Portal)
http://matrimonial.indiaecommercecorporation.com (Matrimonial Site)
http://ecommerce.indiaecommercecorporation.com/ (Ecommerce Portal)
http://auctionproduct.indiaecommercecorporation.com/ (Auction Site)
In addition, we are actively searching for acquisitions to jump start our presence in the market.
Our own websites will be developed in our India development office by seasoned website developers and engineers. Our India development office has the personnel, equipment and connectivity to create the websites and mobile phone applications we need to reach our intended audience.
For each of these websites, we will earn revenues from commissions on the sale of electronic merchandise and also earn advertising revenues from consumer page views.
To date, we have begun strategically planning our network of web properties. We will follow this up with completing and testing the development of the websites and their applications for devices running various platforms including iOS (Apple), Android (Google) and Windows Phone (Microsoft). We are identifying unique intellectual properties we have developed which will need trademark and copyright protection. To date, we have not created any patentable material.
These websites are only the beginning of building a comprehensive portfolio of ecommerce websites for the Indian market. We have many more ideas planned and we are researching the feasibility of all of the ideas. Our goal is to periodically launch websites.
We will not necessarily develop the websites in house. We are actively searching for acquisitions to jump start our presence in the market.
Websites for IEC will be developed in our India development office by seasoned website developers and engineers. Our India development office has the personnel, equipment and connectivity to create the websites and mobile phone applications we need to reach our intended audience.
For each of these websites, IEC will earn revenues from commissions on the sale of electronic merchandise and also earn advertising revenues from consumer page views.
To date, we have begun strategically planning our network of web properties and have begun designing and wire framing our web properties. We will follow this up with completing and testing the development of the websites and their mobile applications for the iPhone, Blackberry and Android phones. We are identifying unique intellectual properties we have developed which will need trademark and copyright protection. To date, we have not created any patentable material.
DTC Eligibility
DTC Eligibility was filed with Glendale Securities, Inc. On November 25, 2013, we became DTC eligible (CUSIP 45409D103).
Research and Development
The core of IEC's business model is to develop and modify websites for the Indian population. Websites need continuous attention and refinement. IEC plans to diversify its service offerings and develop mobile applications for each of our website properties. Ongoing research and development will continue at IEC's offices in India and in the United States. IEC’s website architecture and offerings will need to create extreme competitive advantages that emphasize ease of use.
Intellectual Property
IEC has no patents or other protection for its intellectual property, and will rely on corporate secrecy for protection for the foreseeable future. However, we are identifying unique intellectual properties we have developed which will need trademark and copyright protection.
Competition
The ecommerce market is highly competitive. It includes increasing competition from established companies who are expanding their production and marketing of performance products, as well as from frequent new entrants to the market. We will initially rely on the unique features and applications of our product to gain entrance to the marketplace.
Employees
We do not currently have any employees. We want to maintain a small staff on our payroll so that we can be nimble. To accomplish this goal, we will employ contract employees for our initial projects and hire the best performing of these employees going forward. This allows us to avoid mistakes in filling up our human resource roster with underperforming employees.
We have identified a top-level advertising salesperson for our team, with employment contingent upon receiving funding. We view this as very important to our overall strategy.
Recruiting top level personnel will be aided by share based compensation tied to overall performance.
Executive cash compensation will be minimal due to their equity stakes with our Company. Key executive operations, such as Finance and Human Resources will be outsourced until a full time presence is necessary.
India Office
On November 3, 2013 the Company decided to exercise an option to lease office space in India beginning in the second quarter of 2014. We are evaluating the equipment we will need at that office to conduct our India operations and support.
Subsidiaries
We do not currently have any subsidiaries.
Item 1A
Item 1A
Risk Factors
Not required for a smaller reporting company.
Item 1B
Item 1B
Unresolved Staff Comments
Not required for a smaller reporting company.
Item 2
Item 2
Properties
We maintain our principal office at 5540 Fifth Avenue, #18, Pittsburgh, PA 15232. Our telephone number is (412) 450-0028. We also have the option to lease more than 900 square feet of office space in Indore, Madhya Pradesh (India) for the research and development of our websites pursuant to a lease that our President entered into on our behalf. We believe that our existing facilities are suitable and adequate to meet our current business requirements.
Item 3
Item 3
Legal Proceedings
From time to time, we may become involved in various lawsuits and legal proceedings that arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have, individually or in the aggregate, a material adverse affect on our business, financial condition or operating results.
Item 4
Item 4 Mine Safety Disclosures
Not applicable.
PART II
Item 5
Item 5
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Our Common Stock is listed to trade in the over-the-counter securities market through the Financial Industry Regulatory Authority ("FINRA") Automated Quotation Bulletin Board System, under the symbol “IEEC”.
The following table sets forth the quarterly high and low bid prices for our Common Stock during the last fiscal year, as reported by a Quarterly Trade and Quote Summary Report of the OTC Bulletin Board. The quotations reflect inter-dealer prices, without retail mark-up, markdown or commission, and may not necessarily represent actual transactions.
On March 24, 2014, the closing price for the common stock on the OTCQB was $0.1399 per share.
Holders
As of December 31, 2013, we had 71 holders of our common stock.
Dividend Policy
We have not declared or paid any cash dividends on our common stock or other securities and do not anticipate paying any cash dividends in the foreseeable future. Any future determination to pay cash dividends will be at the discretion of the board of directors and will be dependent upon our financial condition, results of operations, capital requirements, and such other factors as the board of directors deem relevant.
Equity Compensation Plan Information
None
Recent Sales of Unregistered Securities
Between March and December of 2011, the Company issued 4,850,000 shares of its common stock to various accredited investors pursuant to a private placement at $0.02 per share. The gross proceeds from the issuance were $97,000. As of December 31, 2011 100,000 of those shares had not been issued and were reflected as common stock payable. The shares were issued in February 2012.
From January to September of 2012, the Company issued 527,500 shares of its common stock to various accredited investors pursuant to a private placement at a range of $0.02 to $0.10 per share. The gross proceeds from the issuance were $20,750.
In August 2012, the Company issued 100,000 shares of its common stock to a consultant for services rendered at $0.10 per share. The value of those shares totaled $10,000.
The securities were issued in reliance on an exemption from registration under the Securities Act of 1933, pursuant to Regulation S promulgated thereunder.
Use of Proceeds from Registered Securities
The Company is using the proceeds from the sale of its common stock to cover the expenses of the initial public offering and for general working capital purposes.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
None
Item 6
Item 6
Selected Financial Data
Not required for smaller reporting companies.
Item 7
Item 7
Management’s Discussion and Analysis of Financial Condition and Results of Operations
We are a development stage company in the business of developing, promoting and managing a multitude of ecommerce websites for the Indian market.
Results of Operations
The following discussion of the financial condition and results of operations should be read in conjunction with the financial statements included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future.
For the years ended December 31, 2013 and 2012 and for the period from January 19, 2011 (inception) to December 31, 2013:
We did not generate any revenue during the period from January 19, 2011 (inception) to December 31, 2013. During this development stage, we were primarily focused on corporate organization, the initial public offering and the development of our business plan.
Total expenses for the year ended December 31, 2013 were $75,924 of which $56,815 was general and administrative expenses, $1,723 was depreciation and $17,386 was interest. Our total expenses for the year ended December 31, 2012 were $48,728 including general and administrative expense of $43,678, depreciation of $1,710, loss on the impairment of our website of $3,104 and interest expense of $236. By comparison, our total expenses for the period from January 19, 2011 (inception) through December 31, 2013 were $234,625 consisting of general and administrative expense of $209,090, depreciation of $4,809, impairment of our website of $3,104 and interest of $17,622. The largest component of general and administrative expense during this period was for professional fees relating to our public offering in 2011.
Our accumulated deficit for the period from January 19, 2011 (inception) to December 31, 2013 was $234,625.
Liquidity and Capital Resources
As of December 31, 2013 we had current assets of $19,625, current liabilities of $83,959 and a working capital deficit of $63,444 as compared to current assets of $3,777, current liabilities of $14,210 and a working capital deficit of $10,433 at December 31, 2012. The increase in the working capital deficit is the conversion of long term notes payable to current liabilities as those notes have matured and are now due and payable plus the receipt of a new short term working capital loan of $50,000.
Operating Activities
During the year ended December 31, 2013, the Company used cash in the amount of $49,602 for operating activities. Cash used in operating activities included net loss of $75,924, depreciation expense of $1,723 and accrued interest of $17,385 and an increase in accounts payable and accrued liabilities of $7,214.
During the period from January 19, 2011 (inception) to December 31, 2013, the Company used cash in the amount of $171,240 for operating activities. Cash used in operating activities included net loss of $234,625, depreciation expense of $4,809, stock-based compensation of $26,753, impairment of website of $3,104, interest of $17,621, an increase in deposits of $1,090, and an increase in accounts payable and accrued liabilities of $12,188.
Investing Activities
During the year ended December 31, 2013, there was no investing activity.
Investing activities for the period from January 19, 2011 (inception) to December 31, 2013 we acquired property and equipment for $1,435 resulting in total cash used in investing activities of $1,435. The Company issued shares of its common stock to acquire property and equipment and for website development having a fair market value of $7,179 and $3,104, respectively. The website development was fully impaired in 2012.
Financing Activities
During the year ended December 31, 2013 and the period from January 19, 2011 (inception) through December 31, 2013, we received proceeds from notes payable in the amount of $65,500 and $79,000, and repaid $0 and $4,500 to the note holders, respectively. Additionally, we received proceeds from the issuance of common stock in the amount of $0 and $117,850.
Going Concern
The Company incurred a net loss of $75,924 during the year ended December 31, 2013 and has an accumulated net loss of $234,625 since inception. The Company is in the development stage of operations, has not generated any revenues since inception and anticipates that it will continue to generate losses in the near future. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.
These financial statements do not include adjustments relating to the recoverability and classification of reported asset amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to obtain additional financing or sale of its common stock and ultimately to attain profitability.
Plan of Operations
Management’s plan is to raise additional financing through a combination of equity and debt financing. Management believes this will be sufficient to finance the continuing development for the next twelve months. However, there is no assurance that the Company will be successful in raising such financing.
Summary of Significant Accounting Policies
Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenues and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.
Our significant accounting policies are summarized in Note 2 of our financial statements. While all these significant accounting policies impact our financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our results of operations, financial position or liquidity for the periods presented in this report.
We believe the following critical accounting policies and procedures, among others, affect our more significant judgments and estimates used in the preparation of our financial statements:
Development Stage
The Company's financial statements are presented as those of a development stage enterprise. Activities during the development stage primarily include implementation of the business plan, and obtaining additional debt and/or equity related financing. As development stage enterprise, the Company discloses the deficit accumulated during the exploration stage and the cumulative statements of operations, stockholders’ deficit and cash flows from inception to the current balance sheet date.
Cash
Cash and cash equivalents consist primarily of cash on deposit, certificates of deposit, money market accounts, and investment grade commercial paper that are readily convertible into cash and purchased with original maturities of three months or less.
Website Development
The Company capitalizes the costs associated with the development of its website. Other costs related to the maintenance of the website are expensed as incurred. Amortization will be provided over the estimated useful life of 3 years using the straight-line method for financial statement purposes.
Share Based Payments
The Company recognizes share-based compensation, including stock option grants, warrants and restricted stock grants at their fair value on the grant date. Share based payment awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable. Compensation expense is generally recognized on a straight-line basis over the vesting period.
Recent Accounting Pronouncements
There are no recent accounting pronouncements that are expected to have a material effect on the Company’s financial statements.
Off Balance Sheet Arrangements
We do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as “special purpose entities” (SPEs).
Item 7A
Item 7A
Quantitative and Qualitative Disclosures About Market Risk
Not required for smaller reporting companies.
Item 8
Item 8
Financial Statements and Supplementary Data
See.
Item 9
Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A
Item 9A
Controls and Procedures
Management’s Report on Disclosure Controls and Procedures
Disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), are our controls and other procedures that are designed to ensure that information required to be disclosed by us in the 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. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Act is accumulated and communicated to our management to allow timely decisions regarding required disclosure. Rules 13a-15(b) and 15d-15(b) under the Exchange Act, requires us to carry out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2013. This evaluation was implemented under the supervision and with the participation of our officers and directors.
Based on this evaluation, management concluded that, as of December 31, 2013, our disclosure controls and procedures are ineffective in ensuring that information required to be disclosed in our Exchange Act reports is (1) recorded, processed, summarized and reported in a timely manner and (2) accumulated and communicated to our management to allow timely decisions regarding required disclosure.
Our officers and directors have concluded that our disclosure controls and procedures had the following material weaknesses:
·
We were unable to maintain any segregation of duties within our financial operations due to our reliance on limited personnel in the finance function. While this control deficiency did not result in any audit adjustments to our financial statements, it could have resulted in a material misstatement that might have been prevented or detected by a segregation of duties;
·
We lack sufficient resources to perform the internal audit function and do not have an Audit Committee;
·
We do not have an independent Board of Directors, nor do we have a board member designated as an independent financial expert. The Board of Directors is comprised of two members who also serve as executive officers. As a result, there is a lack of independent oversight of the management team, lack of independent review of our operating and financial results, and lack of independent review of disclosures made by us; and
·
Documentation of all proper accounting procedures is not yet complete.
To the extent reasonably possible given our limited resources, we intend to take measures to cure the aforementioned weaknesses, including, but not limited to, the following:
·
Engaging consultants to assist in ensuring that accounting policies and procedures are consistent across the organization and that we have adequate control over financial statement disclosures;
·
Hiring additional qualified financial personnel;
·
Expanding our current board of directors to include additional independent individuals willing to perform directorial functions; and
·
Increasing our workforce in preparation for exiting the development stage and commencing revenue producing operations.
Since the recited remedial actions will require that we hire or engage additional personnel, these material weaknesses may not be overcome in the near-term due to our limited financial resources. Until such remedial actions can be realized, we will continue to rely on the limited advice of outside professionals and consultants. These initiatives will be subject to our ability to obtain sufficient future financing and subject to our ability to start generating revenue.
Management’s Annual Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control system was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation and fair presentation of our financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Our officers have assessed the effectiveness of our internal controls over financial reporting as of December 31, 2013. In making this assessment, management used the criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based upon its assessment, management concluded that, as of December 31, 2013, our internal control over financial reporting was ineffective.
Management has identified a lack of sufficient personnel in the accounting function due to our limited resources with appropriate skills, training and experience to perform the review processes to ensure the complete and proper application of generally accepted accounting principles. We are in the process of developing and implementing remediation plans to address our material weaknesses in our internal controls.
Management has identified specific remedial actions to address the material weaknesses described above:
·
Improve the effectiveness of the accounting group by augmenting our existing resources with additional consultants or employees to improve segregation procedures and to assist in the analysis and recording of complex accounting transactions and preparation of tax disclosures. We plan to mitigate the segregation of duties issue by hiring additional personnel in the accounting department once we have achieved positive cash flow from operations and/or have raised significant additional working capital; and
·
Improve segregation procedures by strengthening cross approval of various functions including cash disbursements and quarterly internal audit procedures where appropriate.
Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.
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 an exemption for smaller reporting companies under Section 989G of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Changes in Internal Control over Financial Reporting
During the fourth quarter ended December 31, 2013, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B
Item 9B
Other Information
None
PART III
Item 10
Item 10
Directors, Executive Officers and Corporate Governance
Below are the names and certain information regarding our executive officers and directors during the year ended December 31, 2012:
The biographies of each of the officer and directors are listed below and contain information regarding the person’s service as a director, business experience, public company director positions currently held or held at any time during the last five years, information regarding involvement in certain legal or administrative proceedings, if applicable, and the experiences, qualifications, attributes or skills that caused the Board to determine that the person should serve as a director in light of our business and structure.
Ashish Badjatia is the Company’s President, Chief Executive and Financial Officer, Secretary and Director and is responsible for the day to day management of our Company, administrative functions, corporate filings and strategic evolution of its business. Mr. Badjatia devotes part time, 20 hours per week, to the business of IEC, with minimal external commitments. His other business commitments are related to a social media company, which we do not believe to be competitive with the business of IEC. Mr. Badjatia brings over 18 years of a wide array of experiences ranging from social networking, international trade, global investment banking, outsourcing, proposal management, and entrepreneurship. Mr. Badjatia holds a Bachelor of Business Administration from the Williamson School of Management at Youngstown State University, and a Master of International Affairs (International Business & Finance and South Asian Affairs) from the School of International and Public Affairs at Columbia University. Additionally, he has taken executive coursework for Venture Capital and Private Equity at the Indian School of Business. In the past, Mr. Badjatia has served on the Board of the India Ohio Chamber of Commerce. Mr. Badjatia’s work experience includes the following:
Rohit Gangwal is the Company’s Treasurer and Director. Mr. Gangwal devotes part time, 20 hours per week, to the business of IEC, with minimal external commitments. His other business commitments include creating software for American and Indian clients, as well as basic websites that do not have ecommerce transactional functions. We do not believe that these other business activities are competitive with the business of IEC. Mr. Gangwal spends a majority of his time in the United States, but also occasionally works out of our office in India. Mr. Gangwal has over 10 years of experience in the IT industry in Software Development, Web Application Development, Content Management, and Project Management. He is the founder of software development and IT consulting companies Covetus LLC, USA and Covetus Technologies Pvt. Ltd. India. (www.covetus.com), a leading technical innovator in software and web application development based in Dallas, Texas and Indore (MP), India with additional offices in Charlotte, North Carolina and Ujjain (MP), India. Before starting Covetus in 2005 Mr. Gangwal worked with various Companies in USA (John Deere, Verizon, Wolter Kluwer, Northwest Airlines, etc) and provided IT consulting services to various other US based Clients. Mr. Gangwal holds Master in Computer Science and Management from Devi Ahilya University, Indore, India and Masters in Computer Science from LAMARUniversity Beaumont, Texas. Mr. Gangwal’s work experience includes the following:
Directors
Our bylaws authorize no less than one (1) director. We currently have two directors.
Term of Office
Our directors are appointed for a one-year term to hold office until the next annual meeting of our shareholders or until removed from office in accordance with our bylaws. Our executive officers are appointed by our board of directors and hold office until removed by the board.
Family Relationships
There are no family relationships among our officer and directors.
Board of Director Committees
We do not have any board committees due to the limited size of the Board and the Company, and as such the board as a whole carries out the functions of audit, nominating and compensation committees.
Compliance with Section 16(a) of the Exchange Act
Not applicable.
Advisory Board
In addition to its board of directors, the Company also has an informal “Advisory Board”. The members of the Advisory Board are uncompensated and have no official power or standing with the Company; they are available to provide advice to the Company upon request. Advice is requested either by email or by telephone. Only our officers and directors are permitted to request advice from the Advisory Board.
Andrew Bachman is co-Founder and President of Tatto Media. Mr. Bachman is also the Co-founder of Adapp Solutions, which creates applications for online advertising companies. Mr. Bachman Bachman is on the Advisory Board because of his demonstrated ability to market websites successfully, and his overall knowledge of online advertising. These will be key factors in promoting the websites that India Ecommerce Corporation will develop.
Sridhar Ganesan has 25 years of experience in Media, Telecom & Technology industries - developing/building businesses and organizations, raising capital from private and public markets, and managing operations during challenging times. As CFO of satellite radio provider WorldSpace, Sridhar participated in the Company’s initial public offering and other financings. Mr. Ganesan has published over 300 news and analytical business/economic articles in India and has managed a sales/distribution network team for newspapers. Mr. Ganesan has been selected to be on the Advisory Board due to his as a former Chief Financial Officer for a NASDAQ listed company. Additionally, Mr. Ganesan has strong personal connections in the business community in India.
Christos Manuel is the founder of goCruso.com, a social networking website for the US restaurant and hospitality industries. Mr. Manuel formulated the strategy of goCruso for raising capital, recruitment of team members, and strategic partnerships, and also managed the development of the goCruso.com website. Mr. Manuel has been selected to be on the Advisory Board due to his experiences in development of social media technologies.
Minesh Shah has over 4 years of experience in information technology industry from engineering large scale web-based portals to complex information technology applications at SP Technolab. Mr. Shah has experience with Internet Marketing, Social Media and Search Engine Optimization. Mr. Shah is listed on our Advisory Board because of his expertise with website development in India.
Item 11
Item 11
Executive Compensation
The following table sets forth the compensation paid to our officers and directors for the years ended December 31, 2013 and 2012:
(1)
President, Chief Executive and Financial Officer, Secretary and Director
(2)
Treasurer and Director
Employment Agreements
None
Director Compensation
None
Equity Compensation Plans
The following table set forth information regarding the outstanding equity awards as of December 31, 2013 for our officers and directors:
Item 12
Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table sets forth certain information regarding beneficial ownership of our common stock as of December 31, 2013.
·
By each person who is known by us to beneficially own more than 5% of our common stock;
·
By each of our officers and directors; and
·
By all of our officers and directors as a group.
(1) Andrew Bachman is the natural person who exercises voting and/or dispositive powers over the common stock owned by Shaboom Media.
As used in this table, "beneficial ownership" means the sole or shared power to vote, or to direct the voting of, a security, or the sole or shared investment power with respect to a security (i.e., the power to dispose of, or to direct the disposition of, a security). In addition, for purposes of this table, a person is deemed, as of any date, to have "beneficial ownership" of any security that such person has the right to acquire within 60 days after such date.
Other than the shareholders listed above, we know of no other person who is the beneficial owner of more than five percent (5%) of our common stock.
The persons named above have full voting and investment power with respect to the shares indicated. Under the rules of the Securities and Exchange Commission, a person (or group of persons) is deemed to be a "beneficial owner" of a security if he or she, directly or indirectly, has or shares the power to vote or to direct the voting of such security, or the power to dispose of or to direct the disposition of such security. Accordingly, more than one person may be deemed to be a beneficial owner of the same security. A person is also deemed to be a beneficial owner of any security, which that person has the right to acquire within 60 days, such as options or warrants to purchase our common stock.
Item 13
Item 13
Certain Relationships and Related Transactions, and Director Independence
We currently act with two directors, consisting of Ashish Badjatia and Rohit Gangwal. We have determined that neither of our directors is an “independent director” as defined in NASDAQ Marketplace Rule 4200(a)(15).
Item 14
Item 14 Principal Accounting Fees and Services
The fees billed for professional services rendered by our principal accountant are as follows:
Pre-Approval Policies and Procedures
The board of directors must pre-approve any use of our independent accountants for any non-audit services. All services of our auditors are approved by our whole board and are subject to review by our whole board.
PART IV
Item 15
Item 15
Exhibits, Financial Statement Schedules
Number
Exhibit
31.1
Rule 13a-14(a) Certification of Principal Executive Officer
32.1
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Principal Executive Officer
101.INS*
XBRL Instance Document
101.SCH*
XBRL Taxonomy Extension Schema Document
101.CAL*
XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB*
XBRL Taxonomy Extension Label Linkbase Document
101.PRE*
XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF*
XBRL Taxonomy Extension Definition Linkbase Document
.
*
Pursuant to applicable securities laws and regulations, we are deemed to have complied with the reporting obligation relating to the submission of interactive data files in such exhibits and are not subject to liability under any anti-fraud provisions of the federal securities laws as long as we have made a good faith attempt to comply with the submission requirements and promptly amend the interactive data files after becoming aware that the interactive data files fail to comply with the submission requirements. Users of this data are advised that, pursuant to Rule 406T, these interactive data files are deemed not filed and otherwise are not subject to liability.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
India Ecommerce Corporation
Date: March 31, 2014
/s/ Ashish Badjatia
Ashish Badjatia
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Date: March 31, 2014
/s/ Ashish Badjatia
Ashish Badjatia Director, President, Chief Executive Officer
(Principal Executive Officer) and Interim Chief Financial Officer
(Interim Principal Financial and Accounting Officer)
/s/ Rohit Gangwal
Date: March 31, 2014
Rohit Gangwal
Treasurer and Director
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of
India Ecommerce Corp.
We have audited the accompanying balance sheets of India Ecommerce as of December 31, 2013 and 2012 and the related statements of operations, stockholders’ deficit, and cash flows for the years ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit 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 financial position of India Ecommerce Corp. as of December 31, 2013 and 2012 and the results of its operations, stockholders’ deficit, and cash flows for the years then ended in conformity accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has suffered losses from operations, which raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ L.L. Bradford &Company, LLC
Las Vegas, Nevada
March 31, 2014
INDIA ECOMMERCE CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
The accompanying notes are an integral part of these financial statements.
INDIA ECOMMERCE CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
The accompanying notes are an integral part of these financial statements.
INDIA ECOMMERCE CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
The accompanying notes are an integral part of these financial statements.
INDIA ECOMMERCE CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
The accompanying notes are an integral part of these financial statements.
INDIA ECOMMERCE CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
1.
DESCRIPTION OF BUSINESS
India Ecommerce Corporation (the “Company”) was incorporated under the laws of the state of Nevada on January 19, 2011.
The Company plans to build, promote and manage a multitude of ecommerce properties, in both website and mobile application formats, for the India market.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation - The accompanying financial statements are prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America.
Development Stage Company - The Company's financial statements are presented as those of a development stage enterprise. Activities during the development stage primarily include implementation of the business plan, and obtaining additional debt and/or equity related financing. As development stage enterprise, the Company discloses the deficit accumulated during the exploration stage and the cumulative statements of operations, stockholders’ deficit and cash flows from inception to the current balance sheet date.
Year-End - The Company has selected December 31 as its year end.
Use of Estimates - The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Transfers of Nonmonetary Assets by Stockholders - The Company records transfers of nonmonetary assets to the Company by stockholders in exchange for common stock at the stockholders’ historical cost basis determined in conformity with generally accepted accounting principles in the United States of America.
Cash - Cash and cash equivalents consist primarily of cash on deposit, certificates of deposit, money market accounts, and investment grade commercial paper that are readily convertible into cash and purchased with original maturities of three months or less.
The Company maintains cash balances at an institution that is insured by the Federal Deposit Insurance Corporation. As of December 31, 2013 and 2012 no amounts were in excess of the federally insured program.
INDIA ECOMMERCE CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
Deposits - Deposits include a security deposit for office space located in Indore, Madhya Pradesh, India.
Property and Equipment - Property and equipment are stated at cost less accumulated depreciation. Expenditures for property acquisitions, development, construction, improvements and major renewals are capitalized. The cost of repairs and maintenance is expensed as incurred. Depreciation is provided on the straight-line method over the estimated useful lives of the assets. Upon sale or other disposition of a depreciable asset, the cost and accumulated depreciation are removed from property and equipment and any gain or loss is reflected as a gain or loss from operations.
The estimated useful lives are:
Website Development - The Company capitalizes the costs associated with the development of its website. Other costs related to the maintenance of the website are expensed as incurred. Amortization will be provided over the estimated useful life of 3 years using the straight-line method for financial statement purposes.
Impairment of Long-lived Assets - The Company periodically evaluates whether events and circumstances have occurred that may warrant revision of the estimated useful lives of property and equipment or whether the remaining balance of property and equipment should be evaluated for possible impairment.
Revenue Recognition - The Company will recognize revenue once pervasive evidence that an agreement exists; the product or service has been rendered; the fee is fixed and determinable based on the completion of stated terms and conditions; and collection of the amount due is reasonably assured. The Company did not recognize any revenues from January 19, 2011 (inception) through December 31, 2013.
Fair Value of Financial Instruments - The Company adopted the FASB standard related to fair value measurement at inception. The standard defines fair value, establishes a framework for measuring fair value and expands disclosure of fair value measurements. The standard applies under other accounting pronouncements that require or permit fair value measurements and, accordingly, does not require any new fair value measurements. The standard clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The recorded values of long-term debt approximate their fair values, as interest approximates market rates. As a basis for considering such assumptions, the standard established a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:
INDIA ECOMMERCE CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
·
Level 1: Observable inputs such as quoted prices in active markets;
·
Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and
·
Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
The Company’s financial instruments are accounts payable and notes payable. The recorded values of accounts payable and notes payable approximate their fair values based on their short-term nature.
Share-based Compensation - The Company recognizes share-based compensation, including stock option grants, warrants and restricted stock grants at their fair value on the grant date. Share based payment awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable. Compensation expense is generally recognized on a straight-line basis over the vesting period.
Dividends - The payment of dividends by the Company in the future will be at the discretion of the Board of Directors and will depend on earnings, capital requirements and financial condition, as well as other relevant factors. The Company does not intend to pay any cash dividends in the foreseeable future but intend to retain all earnings, if any, for use in the business.
Earnings (Loss) per Share - Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss), adjusted for changes in income or loss that resulted from the assumed conversion of convertible shares, by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period.
The computation of basic and diluted loss per share for the periods presented is equivalent since the Company had continuing losses. The Company had no common stock equivalents as of December 31, 2013.
Risks and Uncertainties - The Company’s operations and future are dependent in a large part on its ability to develop its business model in a competitive market. The Company intends to operate in an industry that is subject to intense competition and change in consumer demand. The Company's operations are subject to significant risk and uncertainties including financial and operational risks and the potential risk of business failure. The Company’s inability to meet its business plan and target customer demand may have a material adverse effect on its financial condition, results of operations and cash flows.
INDIA ECOMMERCE CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
Income Taxes - Income taxes are accounted for under the asset and liability method. Deferred income tax assets and liabilities are established for temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities at tax rates expected to be in effect when such assets or liabilities are realized or settled. Deferred income tax assets are reduced by valuation allowances when necessary.
Assessing whether deferred tax assets are realizable requires significant judgment. The Company considers all available positive and negative evidence, including historical operating performance and expectations of future operating performance. The ultimate realization of deferred tax assets is often dependent upon future taxable income and therefore can be uncertain. To the extent the Company believes it is more likely than not that all or some portion of the asset will not be realized, valuation allowances are established against the Company’s deferred tax assets, which increase income tax expense in the period when such a determination is made.
Income taxes include the largest amount of tax benefit for an uncertain tax position that is more likely than not to be sustained upon audit based on the technical merits of the tax position. Settlements with tax authorities, the expiration of statutes of limitations for particular tax positions, or obtaining new information on particular tax positions may cause a change to the effective tax rate. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes on the statements of operations.
Recent Accounting Pronouncements - There are no recent accounting pronouncements that are expected to have a material effect on the Company’s financial statements.
3.
GOING CONCERN
The Company incurred a net loss of $75,924 during the year ended December 31, 2013 and has an accumulated net loss of $234,625 since inception. The Company is in the development stage of operations, has not generated any revenues since inception and anticipates that it will continue to generate losses in the near future. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.
These financial statements do not include adjustments relating to the recoverability and classification of reported asset amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to obtain additional financing or sale of its common stock and ultimately to attain profitability.
Management’s plan, in this regard, is to raise additional financing through a combination of equity and debt financing. Management believes this will be sufficient to finance the continuing development for the next twelve months. However, there is no assurance that the Company will be successful in raising such financing.
INDIA ECOMMERCE CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
4.
PROPERTY AND EQUIPMENT
Property and equipment consist of the following as of December 31, 2013 and 2012:
Depreciation expense for the years ended December 31, 2013 and 2012 was $1,723 and $1,710, respectively.
5.
WEBSITE DEVELOPMENT COSTS
In December 2012, the Company determined that there was a significant decrease in the market value of the website and a significant adverse change in the extent or manner in which the original website would be used in subsequent periods. Therefore, an impairment loss of $3,104 was recognized during the year ended December 31, 2012.
6.
NOTES PAYABLE
As of December 31, 2013 and 2012, the Company had the following notes payable:
(1) Upon maturity, at the lenders option, this amount may be converted into common shares of the Company calculated at $.10 per common shares, in lieu of accepting a cash payment. In addition, in the event of nonpayment lender is entitled to receive 225,000 common shares of capital stock. Although the Company is in default, no demand has been made by the lender.
(2) The Company may draw and repay the line of credit up to a maximum outstanding of $25,000.
INDIA ECOMMERCE CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
(3) Payment is guaranteed by the promise to issue 500,000 common shares of the Company’s common stock. Although the Company is in default, no demand has been made by the lender.
7.
INCOME TAX
At December 31, 2013, the Company had a federal operating loss carry forward of $234,625 which begins to expire in 2031. Significant components of the Company’s deferred tax liabilities and assets as of December 31, 2013 and 2012 are as follows:
Through December 31, 2013, a valuation allowance has been recorded to offset the deferred tax assets, including those related to the net operating losses.
8.
STOCKHOLDERS’ EQUITY
In March 2011, the Company issued 6,750,000 shares of its common stock to various consultants for services rendered at $0.001 per share. The value of those shares totaled $6,750.
In March 2011, the Company issued 13,250,000 shares of its common stock to stockholders for reimbursement of expenditures paid prior to incorporation at $0.001539 per share. The value of those shares totaled $20,386.
Between March and December of 2011, the Company issued 4,850,000 shares of its common stock to various accredited investors pursuant to a private placement at $0.02 per share. The gross proceeds from the issuance were $97,000. As of December 31, 2011 100,000 of those shares had not been issued and were reflected as common stock payable. The shares were issued in February 2012.
From January to September of 2012, the Company issued 527,500 shares of its common stock to various accredited investors pursuant to a private placement at a range of $0.02 to $0.10 per share. The gross proceeds from the issuance were $20,750.
INDIA ECOMMERCE CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2013
In August 2012, the Company issued 100,000 shares of its common stock to a consultant for services rendered at $0.10 per share. The value of those shares totaled $10,000.
No common shares were issued during 2013.
9.
SUBSEQUENT EVENTS
On March 3, 2014 the Company entered into a Securities Purchase Agreement to sell to a lender an 8% convertible note in the amount of $32,500. The note bears a maturity date of December 5, 2014 and a default interest rate of 22%. After 180 days from the initial cash advance the lender has the right to convert the outstanding principal and interest into common stock of the Company at a discount to market of 45%, provided, however, that lender does not hold a beneficial interest in excess of 4.99% of the total outstanding capital stock.