The following plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto. This section includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.
Wally World Media, Inc.was incorporated in the State of Nevadaon May 17, 2012. We are a start-up business and are still working on our software and platform. We have developed a social media website that we refer to as "YouPop." Our "YouPop" platform launched for public use in April 2013. We expect that "YouPop" will facilitate transactions between buyers and sellers of micro-services by pooling together the needs and products of these users and providing a platform for negotiation and completion of these transactions. We expect that YouPop will allow registered users to place job offers or solicit services, such as a video production or other virtual needs such as designing personalized birthday wishes. At the same time, other users will either bid for the services or pool together resources with other users to provide that service.
The YouPop Platform
The following is how we expect YouPop to operate and what our users can expect from the YouPop experience. Users are permitted to register on our website and place job offerings for a service. For example, a user will be able to post a job offer to provide a video of a specific content (i.e. personalized birthday wish, practical joke, dares, etc.). Other users will be able to view that offer and fulfill that offer by contacting the person and agreeing to provide that service. If the offer is accepted, the person who posted the job will provide us with their credit card information and we will hold the information until the service provider successfully completes the work. It is intended that upon acceptance of the completed task, we will charge the credit card the amount that was to be paid plus a service fee and credit the service provider's account with the agreed upon amount. We will generate revenue by charging both the person looking for services to be provided and the service provider with a transaction fee or service charge of up to 15% from each party. Our payment processing is being set up and structured as a conditional payment system. We expect to get a customer's authorization to charge his or her credit card at some future time when the services are complete. This method of payment pre-authorizes the charge but we do not actually charge the credit card until the services are completed. In the event that services are completed and we attempt to charge the credit card but it is rejected or the financial institution does not accept the charge, if possible, the services will be blocked and will not be delivered. We will not guarantee payment and this is a risk that the service provider takes. If the payment is not made at the end of the services, then the service provider does not get paid and the person requesting the service will not get access to the material he or she requested. In order to resolve any disputes that may arise between two contracting parties as to whether service was successfully completed, we will be implementing dispute resolution policies and procedures. These policies will include a process for the service provider to submit a request for review by an independent panel consisting of officers of the Company that will review, arbitrate and mediate any dispute. We recognize and understand that there may be disputes and disagreements between parties and we will do our best to resolve them. But, in the event there is no resolution, each party bears the risk of non-performance or non-payment. 11 -------------------------------------------------------------------------------- We expect that YouPop will be attractive for both businesses and individuals. We expect that people will use our service to complete specific micro-services, such as:
• Providing Testimonials for businesses or services
• Advertising to increase user generated ads
• Converting an excel document into other formats
• Producing viral videos
• Searching for talented people to provide radio and TV show content
We do recognize that it is possible that some users may try to use our platform for unlawful transactions. We plan to implement the following steps to try to prevent, or limit, unlawful transactions or acts, from occurring on or through the platform. We will have a procedure for manual review of each posting and a reporting mechanism for users of the site to notify us of any inappropriate content that may appear. While we will do our best to prevent these unlawful postings, we do recognize that they may occur and it is possible that we could potentially incur substantial liability if these unlawful postings do occur.
The Company has developed an app for the iPhone and iPad based on its reShoot technology. reShoot, a video camera app for Apple iPhones and iPads running iOS 7. Featuring its patent- pending "on the Fly" video editing technology, reShoot makes it easy to correct videos while recording. It provides the capability to rewind and reshoot over unwanted footage.. Utilizing the iPhone's camera, reShoot provides the capability to record, rewind, pause, annotate and reshoot videos of any length, and post them to social networks and video sharing platforms such as Facebook, Twitter,
YouTube, Vimeo, YouPop and Dropbox. reShoot's VvideoArc feature, users can add new footage to existing video recordings stored in their VideoArc or camera roll. Instead of capturing dozens of clips, VideoArc provides a single video stream or montage that can be edited and extended.
The Insert reShoot feature, users can record new video into video they have already taken. It allows them to insert new footage into a previously recorded VideoArc clip or clip from their camera roll.
Plan of Operations
We have commenced limited operations and our proposed platform is not yet fully operational. We will require additional outside capital to implement our business model.
Our principal business intends to focus on creating an internet crowdsourcing, virtual marketplace that will allow buyers and sellers of micro-services to network with one another. Through "YouPop", our social media website, the Company will attempt to facilitate transactions between buyers and sellers of micro-services by pooling together the needs and products of these users and providing a platform for negotiation and completion of these transactions. It is expected that this site will allow registered users on the Company's website to place job offers to solicit for a specific service on YouPop, such as a video or other virtual needs such as personalized birthday wishes. Once operational, YouPop will then pool together the needs and products of its users and help facilitate a transaction in which both buyers and sellers of services have the ability to evaluate the offers and services available in order to meet their needs. This site is not yet operational and it is still a proposed platform. Therefore, the site may not have all of these characteristics once it is completed and there is no assurance that YouPop will have registered users. We are a development stage company, and to date, our development efforts have been focused primarily on the development and marketing of our business model. In addition, to date we have limited operating history for investors to evaluate the potential of our business development. As such, we have not built our customer base or our brand name. In addition, our sources of cash are not adequate for the next 12 months of operations. If we are unable to raise additional cash, we will either have to suspend or cease our expansion plans entirely. Limited Operating History We have generated limited financial history and have not previously demonstrated that we will be able to expand our business. Our business is subject to risks inherent in growing an enterprise, including limited capital resources and possible rejection of our business model and/or sales methods. 12 --------------------------------------------------------------------------------
Critical Accounting Policies and Estimates
While our significant accounting policies are more fully described in Note 1 to our financial statements for the year ended
September 30, 2013, we believe that the following accounting policies are the most critical tool to aid you in fully understanding and evaluating this management discussion and analysis. Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We continually evaluate our estimates, including those related to recovery of long-lived assets, income taxes, and the valuation of equity transactions. We base our estimates on historical experience and on various other assumptions that we believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Any future changes to these estimates and assumptions could cause a material change to our reported amounts of revenues, expenses, assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of the financial statements.
Software development costs
Costs incurred to develop internal-use software, including website development costs, during the preliminary project stage are expensed as incurred. Internal-use software development costs are capitalized during the application development stage, which is after: (i) the preliminary project stage is completed; and (ii) management authorizes and commits to funding the project and it is probable the project will be completed and used to perform the function intended. Capitalization ceases at the point the software project is substantially complete and ready for its intended use, and after all substantial testing is completed. Upgrades and enhancements are capitalized if it is probable that those expenditures will result in additional functionality. Amortization is provided for on a straight-line basis over the expected useful life of three years of the internal-use software development costs and related upgrades and enhancements. When existing software is replaced with new software, the unamortized costs of the old software are expensed when the new software is ready for its intended use.
Impairment of long-lived assets
In accordance with ASC Topic 360, we review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. We recognize an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset's estimated fair value and its book value. For the year ended
September 30, 2013and for the period ended September 30, 2012, we incurred impairment expense of $35,000and $0respectively.
The Company will recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the purchase price is fixed or determinable and collectability is reasonably assured. For all revenue sources discussed below, in accordance ASC 605-45 "Principal Agent Considerations", the Company recognizes revenue net of amounts retained by third party entities pursuant to revenue sharing agreements. The Company's specific revenue recognition policies are as follows: Users that register on the Company's website may place job offerings for a service on the Company's "Youpop" platform, a social media website (the "Job Offeror"). The Job Offeror will offer cash payments for a specific service to be completed. For example, the Job Offeror may require another user to provide a video of a specific content (i.e. personalized birthday wish, practical joke, dares, etc.). Other users that are looking to fulfill job postings (the "Job Offeree") apply for the job. Once the Job Offeree applies, the Job Offeror can view the applicants profile, past jobs, user rating and ask direct questions. Once the Job Offeror engages a Job Offeree, the Company will charge the Job Offeror's credit card for the service fee including its transaction fee of up to 30% of the transaction amount and the Company will hold the money until the work is completed by the job offeree and uploaded to Youpop for review and acceptance. At such time, the Company will record deferred revenue for the amount of the transaction fee and a customer deposit for the amount received from the Job Offeror. Upon acceptance of the completed task by the Job Offeror, the money is moved to the Job Offeree's account and the Company will recognize transaction fee revenue. Job Offerees may request the funds be sent to them or they may leave it on account. Upon completion of the job, the Company recognizes revenue which consists of a transaction fee of up to 30% of the transaction amount with 50% paid by the Job Offeror and 50% by the Job Offeree.
We account for stock-based instruments issued to employees in accordance with ASC Topic 718. ASC Topic 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity based compensation issued to employees. There were no options outstanding as of
September 30, 2013. We account for non-employee share-based awards in accordance with ASC Topic 505-50. 13
Recent Accounting Pronouncements
We have reviewed accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation's reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration. Those standards have been addressed in the notes to the financial statement and in this, our Annual Report, filed on Form 10-K for the year ended
September 30, 2013.
Results of Operations
The following table presents a summary of operating information for the year ended
September 30, 2013, for the period from May 17, 2012(inception) to September 30, 2012and for the period from May 17, 2012(inception) to September 30, 2013: For the Period For the Period from from For the May 17, 2012 May 17, 2012 Year Ended
(Inception) to (Inception) to
Sept. 30, 2013Sept.
Net Revenues $ - $ - $ - Total Operating Expenses 750,590 101,199 851,789 Interest Income 452 - 452 Net Loss
$ (750,138 ) $ (101,199 ) $ (851,337 )Our business began on May 17, 2012and accordingly, we had minimal operations for the prior period. We are a development stage company with minimal operations and have generated no revenues to date.
For the year ended
Operating expenses for the year ended
September 30, 2013were $750,590, an increase from the period from May 17, 2012(inception) to September 30, 2012of $101,199.The difference in the change of $649,391was primarily due to increase in compensation and professional expenses, described in the table below: For the For the For the Period from Year Period from May 17, 2012 Ended May 17, 2012 (Inception) to September 30, (Inception) to September 30, 2013 September 30, 2012 2013 Compensation $ 500,111$ 86,736 $ 586,847Professional fees 137,806 10,307 148,113 Rent expense 14,462 1,208 15,670 Impairment expense 35,000 - 35,000 General and administrative 63,211 2,948 66,159 14
? During the year ended
September 30, 2013, compensation increased as compared to the prior period as our Chief Executive Officer and Vice President of Marketing started taking salary in the amount of $10,000each per month for services rendered effective October 1, 2012. Additionally, during the year ended September 30, 2013, we hired three programmers. We expect compensation to increase as we implement our business plan. ? We expect professional fees to increase substantially as we incur significant costs associated with our public company reporting requirements, costs associated with newly applicable corporate governance requirements, including requirements under the Sarbanes-Oxley Act of 2002 and other rules implemented by the Securities and Exchange Commission. ? For the year ended September 30, 2013, for the period from May 17, 2012to September 30, 2012, for the period from May 17, 2012to September 30, 2013, we incurred rent expense of $14,462, $1,208, and $15,670respectively. In April 2013, we executed a lease agreement for our New Jerseyoffice. We did not have a comparable expense from the period from May 17, 2012(inception) to September 30, 2012. ? For the year ended September 30, 2013, for the period from May 17, 2012to September 30, 2012, and for the period from May 17, 2012to September 30, 2013, we incurred impairment expense of $35,000, $0, and $35,000respectively. We did not have a comparable expense from the period from May 17, 2012(inception) to September 30, 2012. ? For the year ended September 30, 2013, for the period from May 17, 2012to September 30, 2012and for the period from May 17, 2012to September 30, 2013, we incurred general and administrative expenses of $63,211, $2,948, and $66,159respectively. Such increase is primarily attributable to an increase in operations. We expect general and administrative expenses to increase as we implement our business plan.
As a result of the factors described above, we incurred a net loss for the year ended
September 30, 2013of $750,138. This is an increase from $101,199in net loss for the period from May 17, 2012to September 30, 2012.
Liquidity and Capital Resources
Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. We have been funding our operations though the sale of our common stock. Our primary uses of cash has been for salaries and fees paid to third parties for the development of our products. All funds received have been expended in the furtherance of growing the business and establishing brand portfolios. The following trends are reasonably likely to result in a material decrease in our liquidity over the near to long term:
· An increase in working capital requirements to finance additional
product development, · Addition of administrative and sales personnel as the business
· Increases in advertising, public relations and sales promotions for
existing and new brands as the company expands within existing
markets or enters new markets, · The cost of being a public company, and · Capital expenditures to add additional technology. We are not aware of any known trends or any known demands, commitments or events that will result in our liquidity increasing or decreasing in any material way. We are not aware of any matters that would have an impact on future operations. Our net revenues are not sufficient to fund our operating expenses. At
September 30, 2013we had a cash balance of $87,663. Since inception, we raised $760,000from the sale of common stock to fund our operating expenses, pay our obligations, and grow our company. We currently have no material commitments for capital expenditures. We may be required to raise additional funds, particularly if we are unable to generate positive cash flow as a result of our operations. We estimate that based on current plans and assumptions, that our available cash will not be sufficient to satisfy our cash requirements under our present operating expectations, without further financing, for up to 12 months. Other than working capital, we presently have no other alternative source of working capital. We may not have sufficient working capital to fund the expansion of our operations and to provide working capital necessary for our ongoing operations and obligations. We will need to raise significant additional capital to fund our operating expenses, pay our obligations, and grow our company. We do not anticipate we will be profitable in 2014. Therefore our future operations will be dependent on our ability to secure additional financing. Financing transactions may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms. However, the trading price of our common stock and a downturn in the U.S. equity and debt markets could make it more difficult to obtain financing through the issuance of equity or debt securities. Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses, fail to collect amounts owed to us, or experience unexpected cash requirements that would force us to seek alternative financing. Furthermore, if we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our common stock. The inability to obtain additional capital will restrict our ability to grow and may reduce our ability to continue to conduct business operations. If we are unable to obtain additional financing, we will likely be required to curtail our marketing and development plans and possibly cease our operations. 15 -------------------------------------------------------------------------------- We anticipate that depending on market conditions and our plan of operations, we may incur operating losses in the foreseeable future. Therefore, our auditors have raised substantial doubt about our ability to continue as a going concern. Our liquidity may be negatively impacted by the significant costs associated with our public company reporting requirements, costs associated with newly applicable corporate governance requirements, including requirements under the Sarbanes-Oxley Act of 2002 and other rules implemented by the Securities and Exchange Commission. We expect all of these applicable rules and regulations to significantly increase our legal and financial compliance costs and to make some activities more time consuming and costly.
Our business plan within 12 months is outlined below:
If we continue to develop the YouPop website and we receive a positive reaction from our launch, we will attempt to raise additional money through a private placement, public offering or long-term loans to continue development and marketing our web sites to attract larger numbers of users. We will also continually refine our web sites and optimize our marketing efforts from the market feedback we receive during the initial marketing phase and from our user's feedback. We do not at this time have an estimate of time or cost for this stage. If we are unable to maintain our web site or successfully launch our marketing efforts because we don't have enough money, we will cease our development and/or marketing operations until we raise money. Attempting to raise capital after failing in any phase of our development plan could be difficult. As such, if we cannot secure additional proceeds we will have to cease operations and investors would lose their entire investment. At the present time, we have not made any arrangements to raise additional cash. However, we intend to raise additional capital through private placements. If we need additional cash but are unable to raise it, we will either suspend marketing operations until we do raise the cash, or cease operations entirely. Other than as described in this paragraph, we have no other financing plans.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
We have certain potential commitments that include future estimated payments. Changes in our business needs, cancellation provisions, changing interest rates, and other factors may result in actual payments differing from the estimates. We cannot provide certainty regarding the timing and amounts of payments. We have presented below a summary of the most significant assumptions used in our determination of amounts presented in the tables, in order to assist in the review of this information within the context of our financial position, results of operations, and cash flows. The following tables summarize our contractual obligations as of
September 30, 2013, and the effect these obligations are expected to have on our liquidity and cash flows in future periods: Contractual obligations: Total 1 year 1-3 years 3-5 years 5+ years Operating leases $ 63,000 $ 25,200 $ 25,20012,600 - Total $ 63,000 $ 25,200 $ 25,20012,600 $ -