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MEME > SEC Filings for MEME > Form 10-Q on 13-Mar-2014All Recent SEC Filings

Show all filings for MEEMEE MEDIA INC.

Form 10-Q for MEEMEE MEDIA INC.


13-Mar-2014

Quarterly Report


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

Forward-Looking Information

The Company may from time to time make written or oral "forward-looking statements" including statements contained in this report and in other communications by the Company, which are made in good faith by the Company pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995.

These forward-looking statements include statements of the Company's plans, objectives, expectations, estimates and intentions, which are subject to change based on various important factors (some of which are beyond the Company's control). The following factors, in addition to others not listed, could cause the Company's actual results to differ materially from those expressed in forward looking statements: the strength of the domestic and local economies in which the Company conducts operations, the impact of current uncertainties in global economic conditions and the ongoing financial crisis affecting the domestic and foreign banking system and financial markets, including the impact on the Company's suppliers and customers, changes in client needs and consumer spending habits, the impact of competition and technological change on the Company, the Company's ability to manage its growth effectively, including its ability to successfully integrate any business which it might acquire, and currency fluctuations. All forward-looking statements in this report are based upon information available to the Company on the date of this report. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law.

In this Form 10-Q references to "MeeMee", "the Company", "we", "us" and "our" refer to MeeMee Media Inc.

Limited Operating History

There is limited historical financial information about our company upon which to base an evaluation of our future performance. We are a development stage corporation and have not generated any revenues from operations. We cannot guarantee that we will be successful in our business operations. We are subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible delays in the exploitation of business opportunities. We may fail to adopt a business model and strategize effectively or fail to revise our business model and strategy should industry conditions and competition change.

We have limited resources and there is no assurance that future financing will be available to us on acceptable terms. Additional equity financing could result in dilution to existing shareholders.

Overview of Operations

We were incorporated in the State of Nevada on August 23, 2005. We maintain our statutory registered agent's office at 311 W. Third Street, Carson City, NV 89703 and our business office is located at 6630 West Sunset Boulevard, Los Angeles, CA 90027. Our telephone number is (310) 460-9215.

Our original business was to involve the design and marketing of women's intimate apparel. In December 2009, we ventured into the development of skin care products built around "catechin", the naturally occurring bioflavinoid that detoxifies cell-damaging free radicals in the body and is considered to have a range of potential health benefits to help combat arthritis, vascular disease and certain cancers. As of yet, we have been unable to secure and develop working relationships with third party subcontractors needed to execute our business plan. We are a "shell company" whose sole purpose at this time is to locate and consummate a merger and/or acquisition with an operating entity.

We have no employees and own no property. We currently maintain office space located at 6630 West Sunset Boulevard, Los Angeles, CA 90027. There is no lease arrangement for the office space. We are on a month-by-month, as needed basis, with a monthly rent of $2,500. We do not intend to perform any further operations until a

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merger or acquisition candidate is located and a merger or acquisition consummated. In May, 2013, we changed our name to MeeMee Media Inc. In connection with the name change, FINRA assigned the Company a new stock symbol "MEME".

Liquidity and Capital Resources

At January 31, 2014, we had total assets of $10,717 ($7,411 in cash and $3,306 in prepaid expenses) and total liabilities of $827,300 compared to total assets of $5,234 and total liabilities of $ 291,877 at July 31, 2013. Net working capital was ($816,583) compared to ($286,643) at July 31, 2013. We incurred a loss of $1,263,290 for the six months ending January 31, 2014 and an aggregate deficit since inception of $1,891,233.

Since inception, we have used our common stock to raise money to fund our business operations, for corporate expenses and to repay outstanding indebtedness. Net cash provided by the sale of shares from inception on August 23, 2005 to January 31, 2014 was $1,079,350. During the six months ended January 31, 2014 we issued 1,685,000 shares of our common stock valued at $733,350.

During the next twelve months we expect to incur indebtedness for administrative and professional charges associated with preparing, reviewing, auditing and filing our financial statements and our periodic and other disclosure documents to maintain the Company in good standing. Our management is exploring a variety of options to meet our cash requirements and future capital requirements, including the possibility of equity offerings, debt financing and business combinations. As at January 31, 2014, an aggregate of $526,501 is owed to our current officers of the Company pursuant to an Employment Agreement and a Management Services Agreement with the Company.

Our ability to meet our financial liabilities and commitments is primarily dependent upon the continued financial support of our management and stockholders, the continued issuance of equity to new stockholders, and our ability to achieve and maintain profitable operations. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. There can be no assurance that we will be able to raise additional capital, and if we are unable to raise additional capital, we will unlikely be able to continue operations.

Subsequent to the reporting period covered by this report on Form 10-Q, on February 3, 2014, the Company entered into a Secured Promissory Note in the principal amount of $1,000,000 (the "Note"), a Security Agreement (the "Security Agreement") and Common Stock Purchase Warrant (the "Warrant") with an accredited investor (the "Investor").

The Note provides that all unpaid principal, together with the then accrued interest and any other amounts payable thereunder, shall be due and payable on the date which is the first to occur between (i) the closing of the Company's previously announced acquisition of a Latin American mobile services target; or
(ii) six (6) months after the date of the Note. The Company will repay the note through proceeds generated from private placements upon future rounds of financings.

The amount of outstanding principal under the Note bears interest at a rate of one percent (1%) per month; provided, however, upon the occurrence of an uncured event of default under the Note, the outstanding principal at the time of such uncured event of default shall accrue at the rate of seventeen percent (17%) per annum during the period of time which the event of default is continuing and not cured, and the amount of any and all such default interest shall be payable on demand by the Investor. The obligations of the Company under this Note are secured pursuant to the terms of the Security Agreement which grants the Investor a first-priority security interest and lien against the Company's assets. In connection with the Note, the Company granted the Investor 100,000 shares of Company common stock. The Company also granted the Investor piggyback registration rights and the same registration rights (if any) granted to the investors in any Company financing completed in connection with the Acquisition.

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The Warrant provides for the grant of warrants to purchase up to 3,000,000 shares of the Company's common stock to the Investor with a 5 year term at an exercise price of $0.50 per share. The Company granted the Investor piggyback registration rights, and the same registration rights (if any) granted to the investors in any Company financing completed in connection with the Acquisition, for the shares underlying the warrants. The Warrant also provides that, other than in connection with certain excepted issuances described in the Warrant, the $0.50 per share exercise price shall be reduced to any lower price issuance by the Company of any common stock or securities convertible into or exercisable directly or indirectly for shares of common stock. Additionally, if the Company sells shares of its common stock, or securities convertible into or exercisable directly or indirectly for shares of common stock, in a financing which is completed in connection with the Acquisition at a price per share, or at an exercise or conversion price per share, which is less than $0.75, then the exercise price shall be automatically reduced to an exercise price which is equal to (i) the lesser price multiplied by (ii) six hundred sixty six thousands (0.666).

Plan of Operation

Currently, we are a development stage corporation. A development stage corporation is one engaged in the search of business opportunities, successful negotiation and closing of a business acquisition and furthering its business plan.

On April 24, 2013, we issued a press release announcing that we had entered into an Exclusivity Agreement (the "Exclusivity Agreement") and Non-Binding Letter of Intent ("LOI") with one of Latin America's largest and most profitable mobile content and services companies (the "Target"), to purchase 100% of the interests of the Target (the "Acquisition").

Under the terms of the LOI, the Acquisition would primarily be paid for with cash consideration, a component of which is structured as a three-year earn-out, and conditioned on the achievement of certain EBITDA hurdles. The Target would receive common stock, valued on the same basis as the equity component of the Company's intended financing. Completion of the Acquisition under the LOI is dependent on, among other things, the completion of due diligence satisfactory to the Company, and the completion of an audit under US GAAP. Under the terms of the Exclusivity Agreement, the parties agreed that the Target would not engage in any negotiations or discussions with other potential acquirers during the period of exclusivity. The parties also agreed to maintain the confidentiality of the identity of the Target in order to protect the Target's competitive interests, and the interests of its many customers and employees.

The Exclusivity Agreement and LOI expired on July 31, 2013 and on October 3, 2013, both parties agreed to revise and extend the LOI and Exclusivity Agreement.

Our plan of operation for the next twelve months will be to continue working towards the completion of the Acquisition and the proposed transaction under the LOI In the event the Acquisition does not close, we will then (i) consider guidelines of industries in which we may have an interest; (ii) adopt a business plan regarding engaging in business in any selected industry; and (iii) commence such operations through funding and/or the acquisition of an operating entity engaged in any industry selected.

Results of Operations

We did not generate any revenues during the periods ended January 31, 2014 and 2013.

During the six month periods ended January 31, 2014 and 2013, much of the Company's resources were directed at maintaining the Company in good standing, identifying new business opportunities and conducting due diligence on the transaction as proposed under the LOI executed October 3, 2013.

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For the three months ended January 31, 2014 and 2013

We had a net loss of $535,411 for the three months ended January 31, 2014 compared to a net loss of $7,560 for the three month period ended January 31, 2013. The change is explained below.

Operating Expenses: Operating expenses were $535,411 and $7,560 respectively. During the three months ended January 31, 2014 operating expenses increased by $527,851 as the Company focused its resources on pursuing a potential merger/acquisition with one of Latin America's largest and most successful mobile content and services companies.

During the three months ended January 31, 2014, we incurred expenses of $322,433 ($Nil - January 31, 2013) for consulting and related fees owed to our two officers and various consultants for professional services rendered to the Company. Due diligence fees of $164,837 ($Nil - January 31, 2013) were incurred during the period in connection with the investigation of a prospective merger with a Latin American mobile content and services company. We incurred $40,041 in general and administrative expenses ($7,560 - January 31, 2013) which included administrative and professional charges associated with preparing, reviewing, auditing and filing our financial statements and our periodic and other disclosure documents to maintain the Company in good standing, transfer agent fees, travel and entertainment, bank and foreign exchange fees and general office expenses. Shareholder relations fees totaled $8,100 ($Nil - January 31, 2013) for press releases disseminated by the Company.

For the six months ended January 31, 2014 and 2013

We had a net loss of $1,263,290 for the six months ended January 31, 2014 compared to a net loss of $18,091 for the six month period ended January 31, 2013. The change is explained below.

Operating Expenses: Operating expenses were $1,263,290 and $18,091 respectively. During the six months ended January 31, 2014 operating expenses increased by $1,245,199 as the Company focused its resources on pursuing a potential merger/acquisition with one of Latin America's largest and most successful mobile content and services companies. The Company also entered into employment and consulting agreements with two of its officers to assist with the due diligence process as well as a consulting agreement with Vida Media, LLC, whereby Vida Media's business plan is expected to form the basis of the Company's new video content division. Vida Media, LLC develops entertaining education video content for the Latin American market.

For the six months ended January 31, 2014, consulting and related fees owed to our two officers and various consultants for professional services rendered totaled $808,232 ($Nil - 2013). Due diligence fees of $355,110 ($Nil - January 31, 2013) were incurred during the period in connection with prospective merger with a Latin American mobile content and services company. General and administrative expenses were $91,848 ($18,091 - 2013) and shareholder relations fees totaled $8,100 ($Nil - January 31, 2013) for press releases disseminated by the Company.

As of the date of this report, we have not generated any revenues. As a result, we have generated significant operating losses since our formation and expect to incur substantial losses and negative operating cash flows for the foreseeable future as we attempt to expand our infrastructure and development activities and carry on with the due diligence process of the proposed acquisition. Our ability to continue may prove more expensive than we currently anticipate and we may incur significant additional costs and expenses.

We are subject to risks inherent in the establishment of a new business enterprise. We may fail to adopt a business model and strategize effectively or fail to revise our business model and strategy should industry conditions and competition change. We have limited resources and there is no assurance that future financing will be available to our Company on acceptable terms. These conditions could further impact our business and have an adverse effect on our financial position, results of operations and/or cash flows.

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Going Concern Uncertainties

As of the date of this quarterly report, there is substantial doubt regarding our ability to continue as a going concern as we have not generated sufficient cash flow to fund our business operations. The financial statements included in this quarterly report have been prepared on the going concern basis, which assumes that we will be able to realize our assets and discharge our obligations in the normal course of business. If we are not to continue as a going concern, we would likely not be able to realize our assets at values comparable to the carrying value or the fair value estimates reflected in the balances set out in the preparation of the financial statements.

Our future success and viability, therefore, are dependent upon our ability to generate capital financing. The failure to generate sufficient revenues or raise additional capital may have a material and adverse effect upon us and our shareholders.

Off-Balance Sheet Arrangements

At January 31, 2014, 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 or operations, liquidity, capital expenditures or capital resources that is material to investors.

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