UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
| [X] | Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 |
| For the quarterly period ended December 31, 2013 | |
| [ ] | Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 |
| For the transition period from _________ to _________ | |
WALL STREET MEDIA CO, INC.
(Exact name of registrant as specified in its charter)
| Nevada | 5961 | 26-4170100 | ||
| (State or other jurisdiction of incorporation or organization) |
(Primary standard industrial classification code number) |
(IRS employer identification number) |
40 Wall Street
28th Floor
New York, N. Y. 10005
(877) 222 0205
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Allen & Vellone
1600 Stout Street, Suite 1100
Denver, CO 80202
(303) 534-4499
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ ] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
| Large accelerated filer | [ ] | Accelerated filer | [ ] |
| Non-accelerated filer | [ ] | Smaller reporting company | [X] |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
| Class | Outstanding at February 5, 2014 | |
| Common stock, $0.001 par value | 26,822,007 |
TABLE OF CONTENTS
| 2 |
Item 1. Unaudited Condensed Consolidated Financial Statements
WALL STREET MEDIA CO, INC. AND SUBSIDIARY
Condensed Consolidated Balance Sheets
| December 31, 2013 | September 30, 2013 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash | $ | 3,963 | $ | 1,833 | ||||
| Total current assets | 3,963 | 1,833 | ||||||
| Total Assets | $ | 3,963 | $ | 1,833 | ||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current Liabilities | ||||||||
| Accrued expenses | $ | 45,667 | $ | 48,367 | ||||
| Deferred compensation | 48,000 | 24,000 | ||||||
| Total current liabilities | 93,667 | 72,367 | ||||||
| Commitments and Contingencies | ||||||||
| Stockholders’ Deficit | ||||||||
| Common stock, $0.001 par value; 195,000,000 shares authorized; 26,822,007 issued and outstanding at December 31, 2013 and September 30, 2013 | 26,822 | 26,822 | ||||||
| Additional paid-in capital | 1,146,856 | 1,146,856 | ||||||
| Accumulated deficit | (1,263,382 | ) | (1,244,212 | ) | ||||
| Total stockholders’ deficit | (89,704 | ) | (70,534 | ) | ||||
| Total Liabilities and Stockholders’ Deficit | $ | 3,963 | $ | 1,833 | ||||
The accompanying unaudited notes are an integral part of these condensed consolidated financial statements
| F-1 |
WALL STREET MEDIA CO, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Operations
(Unaudited)
| For the three | For the three | |||||||
| months ended | months ended | |||||||
| December 31, 2013 | December 31, 2012 | |||||||
| Revenues: | ||||||||
| Website development services (Includes related party revenue of $3,350 and $14,450, respectively) | $ | 25,350 | $ | 14,450 | ||||
| Total Revenues | 25,350 | 14,450 | ||||||
| Operating Expenses: | ||||||||
| Internet & hosting services | 570 | - | ||||||
| Programming & development | 8,737 | 9,640 | ||||||
| Domain names | 206 | 346 | ||||||
| Office and administrative | 3,300 | 2,722 | ||||||
| Professional fees | 7,708 | 9,766 | ||||||
| Salaries | 24,000 | - | ||||||
| Rent - related party | - | 2,250 | ||||||
| Total Operating Expenses | 44,521 | 24,724 | ||||||
| Loss From Operations | (19,171 | ) | (10,274 | ) | ||||
| Other Expense | ||||||||
| Interest expense | - | 6,153 | ||||||
| Total Other Expense | - | 6,153 | ||||||
| Net loss | $ | (19,171 | ) | $ | (16,427 | ) | ||
| Net loss per share - basic and diluted | $ | (0.00 | ) | $ | (0.01 | ) | ||
| Weighted average number of common shares - Basic and Diluted | 26,822,007 | 1,386,280 | ||||||
The accompanying unaudited notes are an integral part of these condensed consolidated financial statements
| F-2 |
WALL STREET MEDIC CO, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| For the three | For the three | |||||||
| months ended | months ended | |||||||
| December 31, 2013 | December 31, 2012 | |||||||
| Cash flows from Operating Activities: | ||||||||
| Net loss | $ | (19,171 | ) | $ | (16,427 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Increase in accrued expenses | 21,301 | 12,530 | ||||||
| Net cash provided by (used in) operating activities | 2,130 | (3,897 | ) | |||||
| Increase (decrease) in cash during the period | 2,130 | (3,897 | ) | |||||
| Cash, beginning of the period | 1,833 | 4,125 | ||||||
| Cash, end of the period | $ | 3,963 | $ | 228 | ||||
| SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||||
| Cash paid for interest | $ | - | $ | - | ||||
| Cash paid for income taxes | $ | - | $ | - | ||||
The accompanying unaudited notes are an integral part of these condensed consolidated financial statements
| F-3 |
Wall Street Media Co, Inc. and Subsidiary
(F/K/A Bright Mountain Holdings, Inc.)
Notes to condensed consolidated financial statements
December 31, 2013
(Unaudited)
Note 1 – Nature of Operations, Significant Accounting Policies and Basis of Presentation
Nature of Operations and Business Organization
Wall Street Media Co, Inc. and Subsidiary (F/K/A Bright Mountain Holdings, Inc.) (the “Company”) was organized as Mycatalogsonline.com, Inc. in the state of Nevada on January 6, 2009. The Company holds the domain names to various catalog shopping web sites and provides a master web link to these sites. In April 2009, the Company changed its name to My Catalogs Online, Inc. In November 2012 the Company changed its name to Bright Mountain Holdings, Inc. and effected a 1 for 10 reverse stock split. In August, 2013 the Company changed its name to Wall Street Media Co, Inc.
The Company owns 100% of the outstanding common stock of Catalog Enterprises, Inc., which was formed in March 2009, for the purpose of acquiring and maintaining domain names for future use within the Company’s business model and for providing website development services for other companies.
Basis of Presentation
The interim unaudited condensed consolidated financial statements included herein have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). In the opinion of the Company’s management, all adjustments (consisting of normal recurring adjustments and reclassifications and non-recurring adjustments) necessary to present fairly the consolidated results of operations and cash flows for the three months ended December 31, 2013, and the financial position as of December 31, 2013, have been made. The results of operations for such interim periods are not necessarily indicative of the operating results to be expected for the full year.
Certain information and disclosures normally included in the notes to the annual consolidated financial statements have been condensed or omitted from these interim condensed consolidated financial statements. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Report on Form 10-K as filed with the Securities and Exchange Commission on January 13, 2014. The September 30, 2013 balance sheet is derived from those consolidated financial statements.
Principles of Consolidation
The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary Catalog Enterprises, Inc. All inter-company transactions and accounts have been eliminated in consolidation.
Use of Estimates
Our unaudited condensed consolidated financial statements are prepared in accordance with Accounting Principles Generally Accepted in the United States (“GAAP”). These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of our unaudited condensed consolidated financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our unaudited condensed consolidated financial statements would be affected to the extent there are material differences between these estimates and actual results. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result. Significant estimates include the estimate for the valuation of equity based transactions and the valuation allowance on deferred tax assets.
| F-4 |
Wall Street Media Co, Inc. and Subsidiary
(F/K/A Bright Mountain Holdings, Inc.)
Notes to condensed consolidated financial statements
December 31, 2013
(Unaudited)
Cash and Cash Equivalents
The Company Considers all highly liquid investments with maturity of three months or less when purchased to be cash equivalents.
Revenue Recognition
In accordance with ASC 605-10, revenue is recognized when persuasive evidence of an arrangement exists, products are delivered to and accepted by the customer, economic risk of loss has passed to the customer, the price is fixed or determinable, collection is reasonably assured, and any future obligations of the Company are insignificant.
Basic and Diluted Net Loss per Common Share
Basic net loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding for the period and, if dilutive, potential common shares outstanding during the period. Potentially dilutive securities consist of the incremental common shares issuable upon exercise of common stock equivalents such as stock options and convertible debt instruments. Potentially dilutive securities are excluded from the computation if their effect is anti-dilutive. There were no potentially dilutive securities outstanding as of December 31, 2013.
Recent Accounting Pronouncements
The Company does not believe these are any new accounting pronouncements that have been issued that might have a material impact on its financial statements.
Note 2 – Going Concern
As reflected in the accompanying unaudited condensed consolidated financial statements for the three months ended December 31, 2013, the Company had a net loss of $19,171 and cash provided by operations of $2,130. At December 31, 2013, the Company had a working capital deficit of $89,704, a stockholders’ deficit of $89,704, and an accumulated deficit of $1,263,382. These matters raise substantial doubt about the Company’s ability to continue as a going concern. The unaudited condensed consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to implement its business plan and continue as a going concern. Management plans are to identify and merge or be acquired by another operating entity.
Note 3 – Related Party Transactions
$3,350, or 13%, of the Company’s revenue during the three months ended December 31, 2013 was derived from a related party where the Chairman and CEO of the Company is the president. $14,450, or 100%, of the Company’s revenue during the three months ended December 31, 2012 was derived from the same related party (See Note 5).
Note 4 – Commitments and Contingencies
From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. As of December 31, 2013 there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on our results of operations.
Note 5 – Concentration
The Company is currently producing revenue primarily from one revenue stream, website development services. One customer, a related party affiliate, accounted for 13% and 100% of the total revenue for the three months ended December 31, 2013 and 2012, respectively. (See Note 3). Approximately 81% of total revenue for the three months ended December 31, 2013 was derived from one customer.
| F-5 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
FORWARD LOOKING STATEMENTS
There are statements in this Form 10-Q statement that are not historical facts. These “forward-looking statements” can be identified by use of terminology such as “believe”, “hope”, “may”, “anticipate”, “should”, “intend”, “plan”, “will”, “expect”, “estimate”, “project”, “positioned”, “strategy”, and similar expressions. Although management believes that the assumptions underlying the forward-looking statements included in this Report are reasonable, they do not guarantee our future performance, and are subject to certain risks, uncertainties and assumptions that are difficult to predict; therefore, actual results and outcomes may differ materially from what is expressed or forecasted in any such forward-looking statements.
OVERVIEW
Wall Street Media Co, Inc. (F/K/A Bright Mountain Holdings, Inc.) (the “Company” “we” “us” “our”) was organized as Mycatalogsonline.com, Inc. in the state of Nevada on January 6, 2009. The Company holds the domain names to various catalog shopping web sites and provides a master web link to these sites. In April 2009, the Company changed its name to My Catalogs Online, Inc., and in November 2012 changed its name to Bright Mountain Holdings, Inc., however, the Company maintains the web domain of Mycatalogsonline.com and does business under that name.
The Company owns 100% of the outstanding common stock of Catalog Enterprises, Inc. which was formed in March 2009, for the purpose of acquiring and maintaining domain names for future use within the Company’s business model and for providing website development services for other companies.
CRITICAL ACCOUNTING ESTIMATES
In response to the SEC’s financial reporting release, FR-60, Cautionary Advice Regarding Disclosure About Critical Accounting Policies, the Company has selected its more subjective accounting estimation processes for purposes of explaining the methodology used in calculating the estimate, in addition to the inherent uncertainties pertaining to the estimate and the possible effects on the Company’s financial condition. These accounting estimates are discussed below. These estimates involve certain assumptions that if incorrect could create a material adverse impact on the Company’s results of operations and financial condition.
Revenue Recognition
Revenue is recognized when persuasive evidence of an arrangement exists, products are delivered to and accepted by the customer, economic risk of loss has passed to the customer, the price is fixed or determinable, collection is reasonably assured, and any future obligations of the Company are insignificant.
Revenue can be derived from five primary streams as follows: affiliate marketing commissions, website development services, advertising, infomediary data, and catalog conversion further defined below:
| ● | Affiliate Marketing Commissions: By bringing buyers and sellers together to facilitate transactions, affiliate partner commissions are paid by online merchants. When a customer clicks on an image of a product they wish to purchase, the order will be processed by the “affiliate” partner that then handles fulfillment of the customer’s order. In other words, MyCatalogsOnline.com does not stock or ship any product that is purchased. The customers orders are filled by the actual vendor and the Company receives a commission for driving the customer to the vendor. This Model is currently in use by the Company. Revenue is recognized when the order is filled by the vendor. |
| ● | Website Development Services: As the Company continues to develop its core business, the company leverages its expertise and team of design and development resources, to build and optimize websites for other Companies, generating additional revenues. This model is currently in use by the Company. Revenue is recognized when services are rendered. |
| ● | Advertising: Charging companies to advertise their products to our site visitors, by means such as banner advertising, email campaigns and text message marketing. This Model is not currently being used by the Company at this time, but is under consideration and being marketed at this time. Revenue related to advertising sales will be recognized at the time the advertisement is displayed. |
| 3 |
| ● | Infomediary Data: Selling data collected from site users, including product preferences, to companies that wish to understand a market better. Data will be derived from TheBigBuzz.com social shopping site, and MyCatalog user shopping and browsing behavior. This Model is not currently being used by the Company at this time, but is under consideration. Revenue will be recognized upon the sale and delivery of the data. |
| ● | Catalog Conversion: Through the Company’s Green initiative, the Company intends to utilize its custom conversion tool to assist its customers in the conversion from print to digital media for a fee. This Model is not currently being used by the Company at this time, but is under consideration. Revenue will be recognized when the services have been rendered. |
RESULTS OF OPERATIONS
FOR THE THREE MONTHS ENDED DECEMBER 31, 2013 COMPARED TO THE THREE MONTHS ENDED DECEMBER 31, 2012
Revenue: The Company’s revenues increased approximately 75% from $14,450 during the three months ended December 31, 2012 as compared to $25,350 for the three months ended December 31, 2013 due to an increase in services provided for website development.
Operating Expenses: The Company’s operating expenses increased approximately 80% from $24,724 during the three months ended December 31, 2012 as compared to $44,521 for the three months ended December 31, 2013 primarily due to an increase in salaries.
Interest Expense: The Company’s interest expense decreased from $6,153 during the three months ended December 31, 2012 as compared to $0 for the three months ended December 31, 2013 due to the fact that the notes payable balances were converted to equity in 2013.
Net loss from operations: The Company’s net loss from operations increased approximately 87% from $10,274 during the three months ended December 31, 2012 as compared to $19,171 for the three months ended December 31, 2013. The primary reason for this was due to an increase in salaries, offset by increased revenues.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities was $2,130 for the three months ended December 31, 2013 as compared to $3,897 of net cash used in operating activities for the three months ended December 31, 2012, primarily due to an increase in accrued expenses for the period.
As of February 5, 2014, the Company had approximately $3,000 in cash. The Company has incurred losses from operations, and such losses are expected to continue. The Company’s auditors have included a “Going Concern Qualification” in their report for the year ended September 30, 2013. In addition, the Company has a working capital deficit with minimal revenues as of December 31, 2013. The foregoing raises substantial doubt about the Company’s ability to continue as a going concern. The Company is actively seeking to combine or merge with another operating company. There can be no assurance that the level of funding needed will be acquired or that the Company will generate sufficient revenues to sustain operations for the next twelve months. The unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. The “Going Concern Qualification” might make it substantially more difficult to raise capital.
RELATED PERSON TRANSACTIONS
For information on related party transactions and their financial impact, see Note 3 to the unaudited condensed consolidated financial statements.
| 4 |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
For information on recently issued accounting pronouncements, see Note 1 to the unaudited condensed consolidated financial statements if applicable.
OFF-BALANCE SHEET ARRANGEMENTS
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources, that is material to investors.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Not applicable to smaller reporting companies.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures: An evaluation was conducted by the registrant’s president of the effectiveness of the design and operation of the registrant’s disclosure controls and procedures as of December 31, 2013. Based on that evaluation, the president concluded that the registrant’s controls and procedures were effective as of such date to ensure that information required to be disclosed in the reports that the registrant files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. If the registrant develops new business or engages or hires a chief financial officer or similar financial expert, the registrant intends to review its disclosure controls and procedures.
Management is aware that there is a lack of segregation of duties due to the small number of employees dealing with general administrative and financial matters. However, at this time management has decided that considering the abilities of the employees now involved and the control procedures in place, the risk associated with such lack of segregation is low and the potential benefits of adding employees to clearly segregate duties do not justify the substantial expenses associated with such increases. Management may reevaluate this situation as circumstances dictate.
Changes in Internal Control Over Financial Reporting: There was no change in the registrant’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a–15 or Rule 15d–15 under the Securities Exchange Act of 1934 that occurred during the registrant’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
| 5 |
None
Not applicable to smaller reporting companies.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None
Item 3. Defaults upon Senior Securities.
None
Item 4. Mine Safety Disclosure
Not Applicable
None.
| (a) | Exhibits |
| EXHIBIT NO. |
DESCRIPTION | |
| 31.1 | Section 302 Certification of Chief Executive Officer* | |
| 31.2 | Section 302 Certification of Chief Financial Officer* | |
| 32.1 | Section 906 Certification* | |
| 32.2 | Section 906 Certification* | |
| 101.INS | XBRL Instance Document** | |
| 101.SCH | XBRL Taxonomy Extension Schema Document** | |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document** | |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document** | |
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document** | |
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document** |
* Filed herewith.
** In accordance with Regulation S-T, the XBRL-formatted interactive data files that comprise Exhibit 101 in this Quarterly Report on Form 10-Q shall be deemed “furnished” and not “filed”.
| 6 |
Pursuant to the requirements 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.
| Wall Street Media Co, Inc. | ||
| Date: February 10, 2014 | By: | /s/ Jerrold D. Burden |
| Jerrold D. Burden | ||
| CEO (Principal Executive Officer), President | ||
| 7 |