EXPLANATORY NOTE
We are amending our filing of September 30, 2011 to disclose the name, Greystone Funding, LLC., as the note holder of the convertible note dated September 23, 2011, which was previously omitted. No other changes have been made to the financial statements or disclosures.
10-Q/A: IC PLACES, INC.
Management's Discussion and Analysis or Plan of Operation.
Note Regarding Forward Looking Statements.
This quarterly report on Form 10-Q of IC Places, Inc. for the period ended September 30, 2011 contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. To the extent that such statements are not recitations of historical fact, such statements constitute forward-looking statements which, by definition, involve risks and uncertainties. In particular, statements under the Sections; Description of Business, Management's Discussion and Analysis of Financial Condition and Results of Operations contain forward-looking statements. Where, in any forward-looking statement, the Company expresses an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement of expectation or belief will result or be achieved or accomplished.
The following are factors that could cause actual results or events to differ materially from those anticipated, and include but are not limited to: general economic, financial and business conditions; changes in and compliance with governmental regulations; changes in tax laws; and the costs and effects of legal proceedings.
You should not rely on forward-looking statements in this quarterly report. This quarterly report contains forward-looking statements that involve risks and uncertainties. We use words such as "anticipates," "believes," "plans," "expects," "future," "intends," and similar expressions to identify these forward-looking statements. Prospective investors should not place undue reliance on these forward-looking statements, which apply only as of the date of this annual report. Our actual results could differ materially from those anticipated in these forward-looking statements for many reasons, including the risks faced by IC Places, Inc. For example, a few of the uncertainties that could affect the accuracy of forward-looking statements include:
(a) An abrupt economic change resulting in an unexpected downturn in demand;
(b) Governmental restrictions or excessive taxes on our products;
(c) Over-abundance of companies supplying computer products and services;
(d) Economic resources to support the retail promotion of new products and services;
(e) Expansion plans, access to potential clients, and advances in technology; and
(f) Lack of working capital that could hinder the promotion and distribution of products and services to a broader based business and retail population.
Financial information provided in this Form 10-Q for periods subsequent to September 30, 2011 is preliminary and remains subject to audit.. As such, this information is not final or complete, and remains subject to change, possibly materially.
Management's Discussion and Analysis of Financial Condition and Results of Operations
The Company had $7,529, $7418, $21,215, $17,918 and $54,619 from advertising revenue for the three and nine month periods ended September 30, 2011, 2010 and for the period March 18, 2005 (date of inception) through September 30, 2011, respectively. The Company has secured a contract for the commitment, at minimum, to distribute six program licenses: "Instant Movie Reviews"," Instant DVD Reviews", "First Look"," Trailers"," IC Sports". The Company has also received revenues from other advertising and talent fees.
Operating expenses were $174,971, $299,510, $508,277, $646,767 and $1,637,599 for the three and nine month periods ended September 30, 2011, 2010 and for the period March 18, 2005 (date of inception) through September 30, 2011, respectively. Significant operating expenses were related to stock-based share payments which were $110,124, $263,306, $349,473, and $542,319 for the three and nine month periods ended September 30, 2011 and 2010, respectively. Shares were issued as compensation for services rendered. The Company is recording stock-based compensation, valued at the date of the issuance, and ratably expensing over the service period. Other significant operating expenses were also related to the maintenance of the corporate entity, primarily accounting and legal fees. Expenses incurred in the development of the web-based search site are expensed as incurred.
The Company does not expect to generate any meaningful revenue or incur operating expenses for purposes other than fulfilling the obligations of a reporting company under the Securities Exchange Act of 1934 unless and until such time that the Company begins meaningful operations.
CONTRACTUAL OBLIGATIONS
None.
LIQUIDITY AND CAPITAL RESOURCES
The Company is currently financing its operations primarily through loans and advances from the majority shareholder. These advances are being made to supplement any cash generated by the operating revenue. We believe we can currently satisfy our cash requirements for the next twelve months with our current expected increase in revenue, and the expected capital to be raised in private placement and sales of our common stock. Additionally, we will begin to use our common stock as payment for certain obligations and secure work to be performed. Management plans to increase revenue in order to sustain operations for at least the next twelve months.
At September 30, 2011 the Company did not have adequate cash resources to meet current obligations. Management believes that financial support from the majority shareholder to pay minimal and necessary incurred expense will allow the Company to benefit from advertising revenue streams, currently in-place, to produce the anticipated cash flow necessary to support operations.
At September 30, 2011, the Company had negative working capital of approximately $210,000 as compared to negative $146,000 at December 31, 2010. Working capital as of both dates consisted entirely of cash, accounts receivable, and prepaid expenses, net of current liabilities; accordingly the Company does not anticipate being required to register pursuant to the Investment Company Act of 1940 and expects to be limited in its ability to invest in securities, other than cash equivalents and government securities, accordingly. There can be no assurances that any investment made by the Company will not result in losses.
At September 30, 2011, the Company has minimal cash and tangible assets, increasing accrued liabilities, negligible revenues, and a history of operating losses. The company plans to raise $1.2 Million dollars to launch its next phase of business and expenses associated with the next Phase are listed below. Absent an outside capital infusion, the Company will seek funding from traditional banking and other private sources. There are no assurances that any manner of securities offering (debt or equity) will be successful, and the Company's revenues are inadequate to provide for the growth projected in this filing. We may be reliant on additional shareholder contributions, including from management, to continue operations. We are hopeful that the market awareness and financial transparency afforded through becoming a reporting company will assist us in procuring additional investment capital or loans.
As reflected in the audited financial statements, as of December 31, 2010, our auditor's report included an explanatory paragraph concerns that raise substantial doubt about the Company's ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company's ability to become profitable and or attain funding through additional sale of common stock or debt financing. The Company has attained bank funding which is anticipated to satisfy expenses for the current year. The unaudited financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Off Balance Sheet Arrangements
We have no off balance sheet arrangements.
Plan of Operation.
During the current phase of this project, the following major events will occur, some of them simultaneously:
Obtain $1,200,000 investment
Start-up Requirements
Phase 2 launch Expenses:
Legal and Form 10 Filing $ 60,000
Business Cards and Marketing Materials 25,000
Insurance 1,750
Rent -(First, Last and Security Deposit) 15,000
Computers and Software 25,000
Fixtures (Desks, Displays, Chairs etc.) 9,400
Phones 4,000
Wireless Application 100,000
Licensing Program Setup 30,000
Billboards 120,000
Promotion and trade shows 55,000
Total Expenses $ 445,150
Start-up Assets:
Cash Required 360,000
Other Current Assets 46,000
Long-term Assets 25,000
Total Assets $ 431,000
Total Requirements $ 876,150
Strategy
The key elements in our Sales Strategy are centered on market penetration and sales consistency.
Market Penetration:
Our initial plan is to have an active sales agent in each of our listed markets. The best way to have knowledge of the individual markets is to hire agents that have a strong familiarity of their selling area. In our hiring practices we will be looking for agents that not only have B2B sales experience but also know their market. As we build out our advertising client base in each market, we will consolidate geographic areas as the markets demand. We are looking at having sales agents in a minimum of 85% our selling cities within the next three to six months.
Sales Process:
Our agents will use a combination of phone and face-to-face selling. Depending on the market that the agent is working, the normal process will be to call for an appointment and then present our company in that scheduled appointment. In some markets, the agents will be better suited to prospect door to door if those markets are more tailored to that type of selling. The bottom line is that making the calls and getting in front of the decision makers will produce sales.
To aid in client retention we intend to roll out our customer service group within three months of establishing 80% of our target cities sales agents. The requirement of this group will be to contact each client on a quarterly basis and give them new information on upcoming changes with IC Places and to help bring value to their individual adverting. The customer service group will pull up each site as they speak with the clients and be available to make changes or recommendations on how to add value to the information that is posted. They will also be attentive to the clients' concerns and use this information to be sure that we are properly serving our clients' needs to help with client retention. This group will also aid in pulling some of the responsibilities from the sales agents so that they will be able to remain focused on client accusation and not having to spend all of their time on customer service issues. The head count for this group will be adjusted to meet the needs of our company.
Sales Tracking:
We will require each of our agents to submit a sales funnel on a bi-monthly basis. This funnel will include percentage of close ratios, contact date and time and current and projected sales. The goal of this report is to help in estimating future revenues and this report will also be used as a tool for checks and balances for discrepancies with commissions or evaluating work standards. Our agents will be using our internet phone service for telephone prospecting and phone call reports will be used to aid in tracking hours worked by individual agents. It will be the combination of these two tools that will be used in evaluating agent's performance and standards.
Apr 17, 2012
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