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GAWK > SEC Filings for GAWK > Form 10-Q on 16-Dec-2013All Recent SEC Filings

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Form 10-Q for GAWK INC.


16-Dec-2013

Quarterly Report


ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

Management's Discussion and Analysis contains various "forward looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, regarding future events or the future financial performance of the Company that involve risks and uncertainties. Certain statements included in this Form 10-Q, including, without limitation, statements related to anticipated cash flow sources and uses, and words including but not limited to "anticipates", "believes", "plans", "expects", "future" and similar statements or expressions, identify forward looking statements. Any forward-looking statements herein are subject to certain risks and uncertainties in the Company's business, including but not limited to, reliance on key customers and competition in its markets, market demand, delayed payments of accounts receivables, technological developments, maintenance of relationships with key suppliers, difficulties of hiring or retaining key personnel and any changes in current accounting rules, all of which may be beyond the control of the Company. Management will elect additional changes to revenue recognition to comply with the most conservative SEC recognition on a forward going accrual basis as the model is replicated with other similar markets (i.e. SBDC). The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth therein.

Forward-looking statements involve risks, uncertainties and other factors, which may cause our actual results, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. Factors and risks that could affect our results and achievements and cause them to materially differ from those contained in the forward-looking statements include those identified in the section titled "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended September 30, 2008, as well as other factors that we are currently unable to identify or quantify, but that may exist in the future.

In addition, the foregoing factors may affect generally our business, results of operations and financial position. Forward-looking statements speak only as of the date the statement was made. We do not undertake and specifically decline any obligation to update any forward-looking statements.

Our Company

We were incorporated in the state of Nevada on January 6, 2011 and our principal business address is 1610 - 100 Western Battery Rd. Toronto, ON, Canada M6K 3S2. Our telephone number is (647) 476-4439. Our United States and registered statutory office is located at 2360 Corporate Circle, Suite 400, Henderson, NV 89074-7722, telephone number (702) 866-2500. We have a January 31 fiscal year end. Our objective is to enhance current search engine optimization services by developing software that will offer clients a web-based interface to access software tools to automate and manage a client's backlinks and potentially other aspects of the website search engine optimization (SEO) process. The sale of varying levels of the shares offered will affect the operations and activities contemplated below. After the completion of the offering, management will determine how to best allocate the proceeds received.

On August 13, 2013, Media Mechanics, Inc. (the "Company"), Scott Kettle (the "Purchaser"), Matthew Zipchen and Violetta Pioro (together with Matthew Zipchen, the "Sellers") closed on a stock purchase agreement, dated July 31, 2013 (the "Stock Purchase Agreement"), whereby the Purchaser purchased from the Sellers, 7,500,000 shares of common stock, par value $0.001 per share, of the Company (the "Shares"), representing approximately 75% of the issued and outstanding shares of the Company, for an aggregate purchase price of $250,000 (the "Purchase Price") (the "Stock Purchase"). Prior to the closing of the Stock Purchase Agreement, the Sellers were our majority shareholders, Matthew Zipchen was our President, Chief Executive Officer, Secretary, Treasurer, Chief Financial Officer, and member of the board of directors of the Company (the "Board"), and Violetta Pioro was our Vice President and member of the Board.

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In connection with the Stock Purchase, the company has changed its focus to engage in the business of online distribution of all digital content including but not limited to full length feature films, television series, sports, documentaries, live events via our proprietary content distribution network (CDN).

In connection with the Stock Purchase Agreement, on July 31, 2012, Matthew Zipchen submitted to the Company a resignation letter pursuant to which he resigned from her positions as President, Chief Executive Officer, Secretary, Treasurer, Chief Financial Officer, and member of the Board upon closing of the Stock Purchase. Mr. Zipchen's resignation was not a result of any disagreements relating to the Company's operations, policies or practices.

On the same day, Violetta Pioro submitted to the Company a resignation letter pursuant to which she resigned from her position as Vice President and member of the Board upon closing of the Stock Purchase. Ms. Pioro's resignation was not a result of any disagreements relating to the Company's operations, policies or practices.

Results of Operations for the Three and Nine months ended October 31, 2013 and October 31, 2012

We generated $0 and $4,425 in revenues for the three months ended October 31, 2013 and 2012, respectively as compared to $1,572 and $14,694 in revenues for the nine months ended October 31, 2013 and 2012. Our revenues are minimal and we are still a development stage company.

General and administrative expenses increased to $124,828 from $25,012 for the three months ended October 31, 2013 and 2012, respectively as compared to $165,585 and $32,767 for the nine months ended October 31, 2013 and 2012. Our General and administrative expenses increase is related to the cash withdrawn by prior management of $71,385, accounting fees of $12,538, legal fees of $13,000, filing fees of $18,273 is related to the acquisition of common stock issued through a third party transaction, and common stock issued for services of $40,000.

We recorded a loss of $124,828 and $16,947 for the three months ended October 31, 2013 and 2012 as compared to $164,013 and $16,226 for the nine months ended October 31, 2013 and 2012.

Liquidity and Capital Resources

The Company has material an advance, one from our prior Chief Executive Officer for approximately $26,537 and we repaid the advances for prior management of $12.

Our cash used in operating activities were $130,473 and $14,328 for the nine months ended October 31, 2013 and 2012, respectively. The increase in cash flows used in operations was primarily attributable to the changes in operating assets and liabilities, primarily related to decreases in amounts payable, in 2013 as compared to the 2012 period.

Cash provided by financing activities was $26,525 and $0 for the nine months ended October 31, 2013 and 2012, respectively. We received cash from advances from our CEO of $26,537 and repaid prior management of $12.

There is a strong possibility that we may not be able to satisfy our cash requirements over the next twelve months and may be required to raise additional cash from outside sources.

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In the event that we are required to raise additional cash from outside source, we may issue equity securities or incur additional debt. There is no assurance that such funding, if required will be available to us or, if available, will be available upon terms favorable to us.

Off-Balance sheet arrangements

We have no off-balance sheet arrangements including arrangements that would affect the liquidity, capital resources, market risk support and credit risk support or other benefits.

WHERE YOU CAN FIND MORE INFORMATION

You are advised to read this Quarterly Report on Form 10-Q in conjunction with other reports and documents that we file from time to time with the SEC. In particular, please read our Quarterly Reports on Form 10-Q, Annual Report on Form 10-K, and Current Reports on Form 8-K that we file from time to time. You may obtain copies of these reports directly from us or from the SEC at the SEC's Public Reference Room at 100 F. Street, N.E. Washington, D.C. 20549, and you may obtain information about obtaining access to the Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains information for electronic filers at its website http://www.sec.gov.

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