News Column

MISTER GOODY, INC. - 10-K -

July 15, 2014

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Except for the historical information contained in this report on Form 10-K, the matters discussed herein are forward-looking statements. Words such as "anticipates," "believes," "expects," "future," and "intends," and similar expressions are used to identify forward-looking statements. These and other statements regarding matters that are not historical are forward-looking statements. These matters involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include without limitation those discussed below as well as those discussed elsewhere in this report. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date hereof. We assume no obligation to update these forward-looking statements to reflect actual results or changes in factors or assumptions affecting such forward-looking statements.

Background Overview

Mister Goody, Inc. (the "Company") is a Florida corporation that was incorporated on March 1, 2011 to develop an online marketplace and cause-marketing services designed to help businesses increase their brand awareness and sales. Due to a lack of sufficient revenue that resulted from this business plan, on August 24, 2012, the Company's Board of Directors determined that it was in the Company's stockholders best interest to refocus the business activities in a manner which could more fully enhance stockholder value. The Company decided to no longer pursue their online marketplace and cause-marketing services and it ceased all of its operations with respect thereto. On August 24, 2012, the Company acquired 50% of the common units of The Naked Edge, LLC ("Naked Edge"), a Colorado limited liability company, along with an option to acquire 33.33% of Naked Edge preferred units for $85,000 on or before August 24, 2013 ("Option"). The common units provided the Company with 50% of the voting rights and 20% of the economic rights of Naked Edge. On April 9, 2013, the Company exercised its Option and acquired 33.33% of the preferred units. As a result of this acquisition, the Company now owns 50% of the Common Ownership Interests and 33.33% of the Preferred Ownership Interests of The Naked Edge, which equates to 50% of the voting rights and 40% of the economic rights of Naked Edge. The Company's primary business plan is to provide management consulting services to Naked Edge, which is the Company's sole client.

We may pursue additional acquisition opportunities in the future. We have made only one material acquisition to date and, therefore, our ability as an organization to make and integrate significant acquisitions remains unproven. Any future acquisition, investment or business relationship may result in unforeseen operating difficulties and expenditures. In particular, we may encounter difficulties assimilating or integrating the acquired businesses, technologies, products, personnel or operations of the acquired companies, particularly if the key personnel of the acquired company choose not to work for us and we may have difficulty retaining the customers of any acquired business due to changes in management and ownership. Acquisitions may also disrupt our ongoing business, divert our resources and require significant management attention that would otherwise be available for ongoing development of our business. In connection with one or more of those transactions, we may issue additional equity securities that would dilute our stockholders or incur debt on terms unfavorable to us or that we are unable to repay.

Results of Operations

For the year ended March 31, 2014 as compared to the year ended March 31, 2013:

Revenues. We generated $0 in revenues.

Operating Expenses. For the years ended March 31, 2014 and 2013, our operating expenses were $224,614 and $267,429, respectively and consisted of general and administrative expenses of $224,614 and $252,032 and $0 and $15,397 of management services expenses, respectively. For the years ended March 31, 2014 and 2013, $131,569 and $140,191 of our expenses was non-cash stock-based compensation, respectively.

Equity in Losses of Unconsolidated Affiliate: We incurred losses on our equity investment in Naked Edge of $28,609 and $19,537 for the respective years ended March 31, 2014 and 2013.

19



--------------------------------------------------------------------------------

Net Loss. We had a net loss of $358,759 and $286,966 for the years ended March 31, 2014 and 2013, respectively. The increase of $71,793 is primarily due to the interest expense of $85,536 during the year ended March 31, 2014, associated with the amortization of the discount associated the Beneficial Conversion Feature contained in the $250,000 Notes Payable to Snack Um.

We expect to considerably increase our operating expenses in the future.

Liquidity and Capital Resources

Our balance sheet as of March 31, 2014 and 2013 reflects cash assets of $75,042 and $0, respectively. At March 31, 2014 and 2013 there were $101,853 and $65,863 in the equity investment of Naked Edge and $87,536 and $81,314 in liabilities, respectively.

Cash used in operating activities during the years ended March 31, 2014 and 2013 were primarily related to the net losses of $358,759 and $286,966, respectively, offset by non-cash compensation expense of $131,569 and $140,191; amortization of debt discount of $85,536 and $0, respectively. During the year ended March 31, 2014, net cash provided by financing activities consisted primarily from the issuance of 833,334 shares in September 2013 for $100,000; proceeds from the Convertible notes payable of $250,000 offset by payments made to various related parties for a notes payable of $40,400 and payments made to a shareholder for $18,000 in order to retire the common stock.

Over the next 12 months, we anticipate needing approximately $65,000 for accounting, legal, interest payments and working capital. We will utilize the cash currently held by the company to pay such expenses.

Since January 1, 2013, we have been spending approximately $7,500 per month to support our current level of operations. The expenses include costs of, legal, accounting and other expenses associated with the daily operations of our business.

In the future, we plan to try and raise additional capital through the issuance of additional shares of common stock or preferred stock. If we issue additional shares of common stock in the future, our then-existing shareholders may face substantial dilution. If we issue preferred stock, we would be obligated to pay a substantial amount of interest which would reduce our cash available for working capital. In addition, holders of preferred stock would be entitled to be paid out of any assets we have in the event of any liquidation, dissolution or winding up of the corporation, before the holders of common stock would be paid anything.

Currently, we do not have any arrangements for any financing, whether it be through the sale of common stock or preferred stock or any other method of financing, and we can provide no assurances to investors that we will be able to obtain any financing when required. The only cash currently available to us is the cash in our bank account. We have no other sources of capital.

No assurance can be given that we will obtain access to capital markets in the future or that adequate financing to satisfy the cash requirements of implementing our business strategies will be available on acceptable terms. Our inability to gain access to capital markets or obtain acceptable financing could have a material adverse effect upon the results of our operations and financial condition. Our failure to raise additional funds if needed in the future will adversely affect our business operations, which may require us to suspend our operations and lead you to lose your entire investment.

It is likely that our operating losses will increase in the future and it is very possible we will never achieve or sustain profitability. We may be unable to adjust spending in a timely manner to compensate for any unexpected revenue shortfall or other unanticipated changes in our industry. Any failure by us to accurately make predictions would have a material adverse effect on our business, results of operations and financial condition.

20



--------------------------------------------------------------------------------

Critical Accounting Policies

Our critical accounting policies, including the assumptions and judgments underlying them, are disclosed in the Notes to the Financial Statements. We have consistently applied these policies in all material respects. We do not believe that our operations to date have involved uncertainty of accounting treatment, subjective judgment, or estimates, to any significant degree.

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.

New Accounting Pronouncements

We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow.

ITEM 7A.


For more stories on investments and markets, please see HispanicBusiness' Finance Channel



Source: Edgar Glimpses


Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters