where is the form 15-12G, link please. I only saw their Dec-30 filing of 10Q/A..here it is--
Form 10-Q/A for IDLE MEDIA, INC.
30-Dec-2013
Quarterly Report
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Except for the historical information, the following discussion contains forward-looking statements that are subject to risks and uncertainties. We caution you not to put undue reliance on any forward-looking statements, which speak only as of the date of this Report. Our actual results or actions may differ materially from these forward-looking statements for many reasons, including the risks described in "Forward-Looking Statements" above and elsewhere in this Report. Our discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and related notes included herein and the financial statements for the fiscal year ended September 30, 2011 and related notes included in Amendment No. 5 to our Registration Statement on Form 10, and with the understanding that our actual future results may be materially different from what we currently expect.
References in the following discussion and throughout this quarterly report to "we", "our", "us", "Idle", "the Company", and similar terms refer to Idle Media, Inc. and its subsidiaries unless otherwise expressly stated or the context otherwise requires.
Our Company
We are a digital media company which develops and maintains a family of websites focused on the urban market. Foremost of these sites is DatPiff.com, a mixtape website launched in 2005 that features Rap and Hip-hop music. Our other sites include HipHopEarly.com, which streams Hip-hop tracks of the day, and Clipcartel.com, a video site featuring music videos, artist interviews and viral clips. Additionally, we have a games division and have developed and maintained both web-based games and mobile apps.
Revenue Sources
We currently maintain and derive revenue from a network of websites and mobile applications. While our mobile applications do derive revenue, their primary goal is to keep the presence of our websites with our audience while on the go and to keep us on the cutting edge with our product offerings. We also maintain a network of web-based games and applications that derive revenue by means of micro transactions (virtual currency) for in-game items and advancement.
We currently have two revenue streams, advertising and subscriptions.
Advertising Revenues: We generate advertising revenues primarily from display, audio and video advertising. The Company generates the majority of its advertising revenue through the delivery of advertising impressions sold. In determining whether an arrangement exists, the Company ensures that a binding arrangement, such as an insertion order, is in place. The Company generally recognizes revenue based on delivery information from its campaign trafficking systems.
Subscriptions Revenues: Some of our websites generate revenues by offering premium subscriptions or virtual currency in exchange for a subscription cost.
For premium subscriptions, the Company gives users the option to pay a fee to bypass downloading restrictions on the site due to bandwidth restrictions. The Company generates subscription revenue from weekly, monthly, and annual premium subscriptions.
For virtual currency options, the Company utilizes virtual currency within its online games by allowing players to earn "virtual currency" through game play. Virtual currency can be purchased as well as earned while playing the game. The players then use their earned "virtual currency" to advance to higher levels. Virtual currency has no expiration date and has no cash value once purchased and we cannot track its usage.
Websites and Mobile Applications
We maintain several websites focusing on music, music videos and games. Our most notable sites are below with a brief description:
DatPiff.com
DatPiff.com is a Hip-hop mixtape website. Artists, DJs and music labels can upload their mixtapes onto the website. The Company provides free hosting on its platform and derives revenue from third-party advertising and upsells. The Company has mobile applications on the major mobile platforms and derives some revenue from them, but their primary purpose is to keep its brand with users on the go.
HipHopEarly.com
HipHopEarly.com is a website similar to DatPiff.com catering solely to Hip Hop singles as compared to mixtapes and revenue is derived solely from advertising.
Clipcartel.com
Clipcartel.com is an urban video site featuring music videos, artist interviews, funny urban videos and more, updated daily. The Company has mobile applications available on Nook, BlackBerry, Android and Google Play.
Prisonblock.com
PrisonBlock.com is an online game where players work and earn their way to control the prison. Through the use of virtual currency, players earn respect and gain strength. We derive revenue from in-game payments (no advertising). Users can buy or earn virtual currency and upgrade their accounts to gain advantages in the game.
Mafiablock.com
Similar to PrisonBlock.com, Mafiablock.com players work and earn their way to being the top mafioso in New York. We derive revenue from in-game payments (no advertising). Users can buy or earn virtual currency and upgrade their accounts to gain advantages in the game.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2012 AS COMPARED TO
JUNE 30, 2011
REVENUES AND GROSS MARGINS
Revenues increased to $1,007,779 in the three months ended June 30, 2012 from $678,962 in the three months ended June 30, 2011, representing a 48% increase. The increase in revenues is mainly a result of an increase in advertising sales of $308,592 or 46% coupled with an increase in subscription and gaming revenue of $20,225 or 138%.
Cost of sales increased $106,081 or 32%, to $435,452 in the three months ended June 30, 2012 from $329,371 for the three months ended June 30, 2011. The increase in the cost of sales is a result of an increase in developer expenses of $130,042 or 374% and an increase in merchant fees of $9,624, offset by a decrease in server costs of $33,586 or 11%.
For the three months ended June 30, 2012 and 2011, gross profit margins were 56% and 51%, respectively.
OPERATING LOSS
Selling, general and administrative expenses increased $227,010 or 55% to $636,450 for the three months ended June 30, 2012 from $409,440 for the three months ended June 30, 2011. The increase was mainly the result of an increase in administrative salary expenses of $390,060 and an increase in advertising expenses of $201,231, offset by a decrease in consulting fees of $151,305.
Depreciation and amortization expense increased $2,129 or 70% to $5,180 in the three months ended June 30, 2012 from $3,051 for the three months ended June 30, 2011. The increase was the result of additional assets purchased and placed into service during the period.
Research and development expenses decreased $12,399 or 100% in the three months ended June 30, 2012 from $12,399 for the three months ended June 30, 2011 to $0 for the three months ended June 30, 2012. The decrease in research and development expenses was the result of the Company focusing on existing websites.
The Company had $69,303 in loss from operations in the three months ended June 30, 2012, a decrease of $5,996 or 8% from the loss from operations of $75,299 during the three months ended June 30, 2011. The decrease was the result of increased revenues offset by the increase in selling, general and administrative expenses.
In the three months ended June 30, 2012, the Company generated a net loss of $45,238 a decrease of $3,706 from a net loss of $48,944 for the three months ended June 30, 2011.
RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED JUNE 30, 2012 AS COMPARED TO
JUNE 30, 2011
REVENUES AND GROSS MARGINS
Revenues increased to $2,757,276 in the nine months ended June 30, 2012 from $1,996,570 in the nine months ended June 30, 2011, representing a 48% increase. The increase in revenues is a result of an increase in advertising revenues of $635,687 or 32%, an increase in subscription and gaming revenues of $120,639 or 820% and an increase in other revenues of $4,380.
Cost of sales increased $79,917 or 9% to $999,437 in the nine months ended June 30, 2012 from $919,520 for the nine months ended June 30, 2011. The increase in the cost of sales is a result of increases in developer expenses of $286,652 or 479%, an increase in merchant fees of $23,207, offset by a decrease in server costs of $229,942 or 27%.
For the nine months ended June 30, 2012 and 2011, gross profit margins were 64% and 54%, respectively.
OPERATING INCOME
Selling, general and administrative expenses increased $809,241 or 106% to $1,570,682 for the nine months ended June 30, 2012 from $761,441 for the nine months ended June 30, 2011. The increase was mainly the result of increases in administrative salary and advertising expenses, offset by a decrease in consulting fees.
Depreciation and amortization expense increased $5,279 or 59% to $14,172 in the nine months ended June 30, 2012 from $8,893 for the nine months ended June 30, 2011. The increase was the result of additional assets purchased and placed into service during the period.
Research and development expenses decreased $16,207 or 83% to $3,316 in the nine months ended June 30, 2012 from $19,523 for the nine months ended June 30, 2011. The decrease in research and development expenses was the result of the Company focusing on existing websites.
The Company had $169,669 in income from operations in the nine months ended June 30, 2012, a decrease of $117,524 or 41% from income from operations of $287,193 during the nine months ended June 30, 2011. The decrease was the result of an increase in revenues and a decrease in research and development expenses, offset by an increase in selling, general and administrative expenses and depreciation and amortization expenses.
In the nine months ended June 30, 2012, the Company generated net income of $110,271, a decrease of $76,405 or 41%, from $186,676 for the nine months ended June 30, 2011. This decrease was attributable to an increase in revenues, a decrease in research and development expenses and a decrease in income tax expense, offset by an increase in selling, general and administrative expenses and an increase in depreciation and amortization expense.
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 2012, we had $798,999 in cash and cash equivalents, $163,695 in accounts receivable, and $40,000 in prepaid expenses. The following table provides summary information about our net cash flows for the nine months ended June 30, 2012 and 2011:
Nine months Ended
June 30,
2012 2011
Net cash (used in) provided by operating activities $ (243,681 ) $ 477,380
Net cash used in investing activities (27,997 ) (3,138 )
Net cash used in financing activities (50,000 ) -
Net increase/(decrease) in Cash (321,668 ) 474,242
Cash and cash equivalents, beginning of period 1,120,677 428,142
Cash and cash equivalents, end of period $ 798,999 $ 902,384
FUTURE SOURCES OF LIQUIDITY
We expect our primary source of cash during fiscal year 2012 to be net cash provided by operating activities. We expect that continued focus on acquiring new customers will enable us to increase profitable revenues and continue to generate cash flows from operating activities.
If we do not generate sufficient cash from operations, face unanticipated cash needs or do not otherwise have sufficient cash, we have the ability to reduce certain expenses depending on the level of business operation.
Based on current expectations, we believe that our existing cash of $798,999 as of June 30, 2012 and our net cash provided by operating activities and other potential sources of cash will be sufficient to meet our cash requirements. Our ability to meet these requirements will depend on our ability to generate cash in the future, which is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control.
OPERATING ACTIVITIES
Net cash used in operating activities was $243,681 for the nine months ended June 30, 2012, as compared to net cash provided by operating activities of $477,380 for the same period in 2011. The decrease in net cash during the nine months ended June 30, 2012 was primarily due to net income of $110,271 coupled with a decrease in accounts receivable of $96,057 and depreciation adjustments of $14,171, offset by an increase in accounts receivable, related party of $238,249, an increase in prepaid expenses of $7,000, a decrease in accrued expenses of $174,733 and a decrease in accounts payable of $45,121 for the nine months ended June 30, 2012, as compared to reported balances as of September 30, 2011.
Net cash provided by operating activities was $477,380 for the nine months ended June 30, 2011. The increase in net cash during the nine months ended June 30, 2011 was due to net income of $186,676 coupled with an increase in accrued liabilities of $227,583, a decrease in accounts receivable of $32,023, and depreciation adjustments of $8,893 offset by an increase in accounts receivable, related party of $5,753 and a decrease in accounts payable of $27,958 compared to fiscal year balances as of September 30, 2010.
INVESTING ACTIVITIES
For the nine months ended June 30, 2012, net cash used by investing activities was $27,997 due to the purchase of fixed assets.
For the nine months ended June 30, 2011, net cash used by investing activities was $3,138 due to the purchase of fixed assets.
FINANCING ACTIVITIES
Net cash used in financing activities for the nine months ended June 30, 2012 was $50,000, as compared to $-0- for the same period of 2011. The increase of net cash used in financing activities was mainly attributable to a deemed distribution to a related party of $50,000 for the purchase of software. Since this transaction was with a related party and had a historical cash basis of $-0-, under United States generally accepted accounting principles ("GAAP") rules, the transaction is recorded as a distribution.
INFLATION
We believe our operations have not been and, in the foreseeable future, will not be materially and adversely affected by inflation or changing prices.
OFF BALANCE SHEET ARRANGEMENTS
None.
