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WILD > SEC Filings for WILD > Form 10-Q on 15-Nov-2012All Recent SEC Filings

Show all filings for WILD CRAZE, INC.

Form 10-Q for WILD CRAZE, INC.


15-Nov-2012

Quarterly Report


Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

This quarterly report on Form 10-Q and other reports filed by Wild Craze, Inc. (the "Company") from time to time with the SEC contain or may contain forward-looking statements and information that are (collectively, the "Filings") based upon beliefs of, and information currently available to, the Company's management as well as estimates and assumptions made by Company's management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the Filings, the words "anticipate," "believe," "estimate," "expect," "future," "intend," "plan," or the negative of these terms and similar expressions as they relate to the Company or the Company's management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including the risks contained in the "Risk Factors" section of the Company's Transitional Report on Form 10-KT for the fiscal year ended December 31, 2011, filed with the SEC, relating to the Company's industry, the Company's operations and results of operations, and any businesses that the Company may acquire. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

Our 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 the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our 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. The following discussion should be read in conjunction with our consolidated financial statements and notes thereto appearing elsewhere in this report.

Our Business and Plan of Operation

We design, develop and manufacture fashion accessory and fashion accessory platforms that attach to clothing and fit flush to a wide range of fabric. The Snaptagz platform can be decorated or it can serve as a mount for other decorated parts like toys and jewelry. This platform enables the Company to work with all sorts of designs in entertainment, sports, and music by marketing to various demographics. We plan to bring our products to the market directly as well as by continuing to secure additional strategic licenses with suppliers in the toy and fashion accessory market.

Results of Operations



                                                                                                February 14,
                                                                                              2003 (inception)
                                 For the Three Months            For the Nine Months              through
                                  Ended September 30,            Ended September 30,           September 30,
                                  2012            2011           2012            2011               2012
Net sales                     $          -     $        -     $         2     $        -     $           11,414
Gross profit                  $          -     $        -     $         1     $        -     $           11,413
General and administrative
expenses                      $    110,592     $    2,260     $   275,871     $    9,530     $          490,167
Loss from operations          $   (110,592 )   $   (2,260 )   $  (275,870 )   $   (9,530 )   $         (478,754 )
Other income (expense)        $     (4,593 )   $        -     $   (12,056 )   $        -     $          (12,056 )
Net loss                      $   (115,185 )   $   (2,260 )   $  (287,926 )   $   (9,530 )   $         (490,810 )
Loss per common share -
basic and diluted             $      (0.00 )   $    (0.00 )   $     (0.01 )   $    (0.00 )   $                -

For the Three Months Ended September 30, 2012 and 2011

The Company was originally formed as a multimedia/marketing company that specializes in the design and creation of effective marketing products and services, primarily internet based. The Company generated $11,412 in revenue since inception under this business model.

During the three months ended September 30, 2011, the Company generated $0 in revenue under this business model and incurred professional fees of $2,260.

Change in Business Model

During December 2011 we ceased to engage in the multimedia and marketing industry and acquired the business of SnapTagz, LLC to engage in the production, distribution and marketing of fabric accessories. We generated $0 in revenue under this new business model and incurred $110,592 in general and administrative expenses for the three months ended September 30, 2012.

Revenue

At this time, we are domestically and internationally marketing our new product line and have only generated $2 in revenue to date under our new business model.

Gross Profit

We are currently in a development stage and have not begun our revenue generation strategy. As such, we have only recognized $1 of profit to date under our new business model.

General and Administrative Expenses

General and administrative expenses for the three months ended September 30, 2012, consisted primarily of legal and professional fees in the amount of $103,000, travel related expenses of $2,000 and minimum royalty payments of $4,000.

Loss from Operations

Loss from operations for the three months ended September 30, 2012, was $(110,592). The loss was primarily attributable to the general and administrative expenses detailed above.

Other Income (Expense)

Other expense for the three months ended September 30, 2012, was $(4,593). Other expense was attributable to interest expense on convertible notes issued during the prior period.

Net Loss

Net Loss from operations for the three months ended September 30, 2012, was $(115,185). The net loss was primarily attributable to the general and administrative expenses and other expenses as detailed above.

Inflation did not have a material impact on the Company's operations for the period. Other than the foregoing, management knows of no trends, demands, or uncertainties that are reasonably likely to have a material impact on the Company's results of operations.

For the Nine Months Ended September 30, 2012 and 2011

The Company was originally formed as a multimedia/marketing company that specializes in the design and creation of effective marketing products and services, primarily internet based. The Company generated $11,412 in revenue since inception under this business model.

During the nine months ended September 30, 2011, the Company generated $0 in revenue under this business model and incurred professional fees of $9,530.

Change in Business Model

During December 2011 we ceased to engage in the multimedia and marketing industry and acquired the business of SnapTagz, LLC to engage in the production, distribution and marketing of fabric accessories. We generated $2 in revenue under this new business model and incurred $275,871 in general and administrative expenses for the nine months ended September 30, 2012.

Revenue

At this time, we are domestically and internationally marketing our new product line and have only generated $2 in revenue to date under our new business model.

Gross Profit

We are currently in a development stage and have not begun our revenue generation strategy. As such, we have only recognized $1 of profit to date under our new business model.

General and Administrative Expenses

General and administrative expenses for the nine months ended September 30, 2012, consisted primarily of legal and professional fees in the amount of $227,000, travel related expenses of $30,000 and minimum royalty payments of $12,000.

Loss from Operations

Loss from operations for the nine months ended September 30, 2012, was $(275,870). The loss was primarily attributable to the general and administrative expenses as detailed above.

Other Income (Expense)

Other expense for the nine months ended September 30, 2012, was $(12,056). Other expense was attributable to interest expense on convertible notes issued during the period.

Net Loss

Net Loss from operations for the nine months ended September 30, 2012, was $(287,926). The net loss was primarily attributable to the general and administrative expenses and other expenses as detailed above.

Inflation did not have a material impact on the Company's operations for the period. Other than the foregoing, management knows of no trends, demands, or uncertainties that are reasonably likely to have a material impact on the Company's results of operations.

Liquidity and Capital Resources



The following table summarizes total current assets, liabilities and working
capital at September 30, 2012 and December 31, 2011.



                                        September 30,       December 31,
                                            2012                2011
             Current Assets            $        24,777     $       11,066
             Current Liabilities       $       422,782     $      121,145
             Working Capital Deficit   $      (398,005 )   $     (110,079 )

At September 30, 2012, we had a working capital deficit of $(398,005), as compared to a working capital deficit of $(110,079), at December 31, 2011, an increase of $287,926. The increase is primarily related to an increase in related party loans in order to fund operating activities and an increase in accrued legal and professional fees.

The Company expects its current resources to be insufficient for a period of approximately 12 months unless additional financing is received. Management has determined that additional capital will be required in the form of equity or debt securities. In addition, if we cannot raise additional short term capital we will be forced to continue to further accrue liabilities due to our limited cash reserves. There are no assurances that management will be able to raise capital on terms acceptable to the Company. If we are unable to obtain sufficient amounts of additional capital, we may be required to reduce the scope of our planned development, which could harm our business, financial condition and operating results. If we obtain additional funds by selling any of our equity securities or by issuing common stock to pay current or future obligations, the percentage ownership of our stockholders will be reduced, stockholders may experience additional dilution, or the equity securities may have rights preferences or privileges senior to the common stock. If adequate funds are not available to us when needed on satisfactory terms, we may be required to cease operating or otherwise modify our business strategy.

For the Nine Months Ended September 30, 2012 and 2011

Net cash used in operating activities for the nine months ended September 30, 2012 and 2011, was $(239,292) and $(8,970), respectively. The net loss for the nine months ended September 30, 2012 and 2011, was $(287,926) and $(9,530), respectively. Cash used in operating activities for the nine months ended September 30, 2012 and 2011, was primarily for legal and professional fees and travel related expenses.

Net cash obtained through all investing activities for the nine months ended September 30, 2012 and 2011, was $30,525 and $0, respectively. Cash obtained through investing activities for the nine months ended September 30, 2012 consisted of repayments of related party loans from the Company.

Net cash obtained through all financing activities for the nine months ended September 30, 2012 and 2011, was $211,182 and $8,970, respectively. Cash obtained through financing activities for the nine months ended September 30, 2012 and 2011, consisted of net proceeds from related party loans to the company.

On the Company's Transitional Report on Form 10-KT, filed on March 30, 2012, our auditors have expressed their substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to generate future profitable operations and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. Our management has no formal plan in place to address this concern but considers that we will be able to obtain additional funds by equity financing and/or related party advances; however there is no assurance of additional funding being available.

Critical Accounting Policies

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements require the use of estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Our management periodically evaluates the estimates and judgments made. Management bases its estimates and judgments on historical experience and on various factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates as a result of different assumptions or conditions.

The methods, estimates, and judgment we use in applying our most critical accounting policies have a significant impact on the results we report in our financial statements. The SEC has defined "critical accounting policies" as those accounting policies that are most important to the portrayal of our financial condition and results, and require us to make our most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based upon this definition, our most critical estimates relate to the fair value of warrant liabilities. We also have other key accounting estimates and policies, but we believe that these other policies either do not generally require us to make estimates and judgments that are as difficult or as subjective, or it is less likely that they would have a material impact on our reported results of operations for a given period. For additional information see Note 2, "Summary of Significant Accounting Policies" in the notes to our reviewed financial statements appearing elsewhere in this report. Although we believe that our estimates and assumptions are reasonable, they are based upon information presently available, and actual results may differ significantly from these estimates.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

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