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- Amended Quarterly Report (10-Q/A)

Date : 04/17/2012 @ 2:00PM
Source : Edgar (US Regulatory)
Stock : Ic Places (QB) (ICPA)
Quote : 0.0034  0.0 (0.00%) @ 2:05AM
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- Amended Quarterly Report (10-Q/A)

 

United States

Securities and Exchange Commission

Washington, D.C. 20549

 

Form 10-Q

Amendment 1

 

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)

OF THE

SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2011.

 

or

 

[  ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

 

For the transition period from __________ to __________.

 

Commission file number 000-53278 

 

IC PLACES, INC.

(Name of small business issuer in its charter)

 

Delaware

(State or other jurisdiction of incorporation or organization)

 

42-1662836

(I.R.S. Employer Identification No.)

 

1211 Orange Ave. Suite 300, Winter Park, FL 32789

(Address of principal executive offices and Zip Code)

 

Registrant’s telephone number, including area code   407-442-0309

 

Indicate by check mark whether the registrant: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  (X) Yes (__) No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer (__)   Accelerated filer (__)   Non-accelerated filer (__)   Smaller reporting company (X)

 (Do not check if a smaller reporting company)

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes (__) No (X )  

 


 

 

The number of shares of the issuer’s common stock, par value $.00001 per share, outstanding as of November 14, 2011 was approximately 71,547,619.

 

EXPLANATORY NOTE

We are amending our filing of September 30, 2011 to disclose the name, Greystone Funding, LLC., as the note holder of the convertible note dated September 23, 2011, which was previously omitted.  No other changes have been made to the financial statements or disclosures.

 

 


 

 

 

TABLE OF CONTENTS

 

 

Page

Part I. Financial Information

4

 

 

Item 1. Financial Statements.

4

 

 

Balance Sheets for the periods ending

September 30, 2011 (unaudited) and December 31, 2010 (audited).

 

4

 

 

Statements of Operation for the three and nine month

periods ending September 30, 2011 and 2010 (unaudited) and for the period

March 18, 2005 (date of inception) through September 30, 2011 (unaudited).

 

5

 

 

Statement of Stockholders’ Deficit for the period March 18, 2005 (date of inception) through September 30, 2011 (unaudited)

6

 

 

Statements of Cash Flows for the nine month periods

ending September 30, 2011 and 2010 (unaudited) and for the period March 18, 2005

(date of inception) through September 30, 2011 (unaudited).

 

7

 

 

Notes to Financial Statements (unaudited)

8

 

 

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

9

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

12

Item 4. Controls and Procedures.

12

Item 4T. Controls and Procedures.

12

 

 

Part II. Other Information

13

 

 

Item 1. Legal Proceedings.

13

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

13

Item 3. Defaults Upon Senior Securities.

13

Item 4. Removed and Reserved.

14

Item 5. Other Information.

14

Item 6. Exhibits

14

Signatures

15

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

Part I.  Financial Information

Item 1.  Financial Statements.

 

IC Places, Inc.

(A Development Stage Company)

Balance Sheet

             
     

September 30, 2011

 

December 31, 2010

 
     

(unaudited)

 

(audited)

 
             

Current Assets

           

Cash

   

$ 33

 

$ -

 

Accounts Receivable

   

2,100

 

2,100

 

Prepaid Expenses

   

271,396

 

50,583

 

Total Current Assets

   

273,529

 

52,683

 
             
             

Property and Equipment

   

43,966

 

30,240

 

Accumulated Depreciation

   

(28,849)

 

(23,007)

 
     

15,117

 

7,233

 
             
             

Total Assets

   

$ 288,646

 

$ 59,916

 
             
             

Liabilities and Stockholders' Deficit

           

Current Liabilities

           

Accrued Liabilities

   

$ 24,205

 

$ 18,753

 

Convertible Note Payable

   

349,208

 

-

 

Derivative Liability

   

73,750

 

77,373

 

Advances from Stockholder

   

37,238

 

102,312

 

Total Current Liabilities

   

484,401

 

198,438

 
             

Stockholders' Deficit

           

Common Stock, $.00001 par value;

           

500,000,000 shares authorized;

           

31,547,619 and 16,959,147 shares outstanding

   

316

 

170

 

Additional Paid In Capital

   

1,552,085

 

1,115,331

 

Unearned Stock Based Compensation

   

(43,333)

 

(136,307)

 

Accumulated Deficit during the Development Stage

   

(1,704,823)

 

(1,117,716)

 

Total Stockholders' Deficit

   

(195,755)

 

(138,522)

 
             

Total Liabilities and Stockholders' Deficit

   

$ 288,646

 

$ 59,916

 
             
             

The accompanying notes are an integral part of these financial statements

 

 

 

 

 

 


 

 

 

IC Places, Inc.

 

(A Development Stage Company)

 

Statement of Operations

 

(unaudited)

 

                       

 

                   

Mar 18, 2005

 

 

                   

(inception date)

 

 

   

For the Three Months Ended

 

For the Nine Months Ended

 

through

 

 

   

Sep 30, 2011

 

Sep 30, 2010

 

Sep 30, 2011

 

Sep 30, 2010

 

Sep 30, 2011

 
                       

Revenues

 

$ 7,529

 

$ 7,418

 

$ 21,215

 

$ 17,918

 

$ 54,619

 
                       

Operating Expenses

                     

Programmer and production expense

 

8,684

 

1,550

 

22,359

 

27,435

 

82,212

 

Advertising and promotion

 

4,047

 

-

 

5,871

 

32

 

34,585

 

Selling expense

 

12,737

 

12,078

 

50,939

 

27,648

 

114,539

 

Professional fees

 

28,690

 

-

 

34,691

 

4,000

 

86,804

 

Communications

 

368

 

524

 

5,758

 

3,747

 

21,078

 

Administrative

 

8,823

 

20,033

 

33,344

 

35,797

 

93,864

 

Stock-based compensation

 

110,124

 

263,306

 

349,473

 

542,319

 

1,175,668

 

Depreciation

 

1,498

 

2,019

 

5,842

 

5,789

 

28,849

 

total operating expenses

 

174,971

 

299,510

 

508,277

 

646,767

 

1,637,599

 
                       

Operating Loss

 

(167,442)

 

(292,092)

 

(487,062)

 

(628,849)

 

(1,582,980)

 
                       

Other Income (Expense):

                     

Interest

 

(10,100)

 

(5,204)

 

(22,906)

 

(11,133)

 

(37,831)

 

Change in derivative and beneficial conversion

 

(29,596)

 

1,403

 

(77,139)

 

1,436

 

(84,012)

 
                       

Net Loss before Income Taxes

 

(207,138)

 

(295,893)

 

(587,107)

 

(638,546)

 

(1,704,823)

 
                       

Income Tax Provision (Benefit)

 

-

 

-

 

-

 

-

 

-

 
                       

Net Loss

 

$ (207,138)

 

$ (295,893)

 

$ (587,107)

 

$ (638,546)

 

$ (1,704,823)

 
                       
                       

Earnings per share, basic and diluted

 

$ (0.01)

 

$ (0.03)

 

$ (0.03)

 

$ (0.05)

     

Weighted average shares outstanding

 

25,911,584

 

9,701,412

 

22,795,656

 

6,390,373

     
     

 

 

             
                       

The accompanying notes are an integral part of these financial statements

 

 

                                 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

IC Places, Inc.

(A Development Stage Company)

Statement of Stockholders' Deficit

     
           

Additional

 

Unearned

     

Total

   

Capital Stock

 

Paid In

 

Stock

 

Accumulated

 

Stockholders'

   

Shares *

 

Par Value

 

Capital

 

Compensation

 

Deficit

 

Deficit

                         
                         

Balance, March 18, 2005 (Date of Inception)

 

-

 

-

 

-

 

-

 

-

 

-

                         

Stock-Based Compensation, March 18, 2005, par value

 

1,666,668

 

17

 

49,983

         

50,000

                         

Net Loss, date of inception through December 31,

                       

2006 (audited)

             

(65,600)

 

(65,600)

 

(65,600)

                         

Balance, December 31, 2006

 

1,666,668

 

17

 

49,983

 

-

 

(65,600)

 

(15,600)

                         

Net Loss, December 31, 2007

                 

(18,160)

 

(18,160)

                         

Balance, December 31, 2007

 

1,666,668

 

17

 

49,983

 

-

 

(83,760)

 

(33,760)

                         

Acquisition for stock, January 15, 2008

 

717,335

 

7

 

207

         

214

                         

Net Loss, December 31, 2008

                 

(94,339)

 

(94,339)

                         

Balance, December 31, 2008

 

2,384,003

 

24

 

50,190

 

-

 

(178,099)

 

(127,885)

                         

Shares issued for services, December 2009

 

626,000

 

6

 

19,044

         

19,050

                         

Net Loss, December 31, 2009

                 

(58,664)

 

(58,664)

                         

Balance, December 31, 2009

 

3,010,003

 

30

 

69,234

 

-

 

(236,763)

 

(167,499)

                         

Shares issued for services:

                       

January, 2010 at $.3974 per share

 

6,668

 

-

 

2,650

         

2,650

February, 2010 at $.2558 per share

 

93,334

 

1

 

23,873

         

23,874

March, 2010 at $.2703

 

3,025,334

 

30

 

817,837

         

817,867

July, 2010 at $.033 per share

 

3,556,073

 

36

 

58,810

         

58,846

November 2010, $.025

 

300,000

 

3

 

7,497

         

7,500

December 2010, $.018

 

2,000,000

 

20

 

35,980

         

36,000

                         

Shares issued, in advance of service period :

                     

-

Unearned stock compensation

             

(817,840)

     

(817,840)

Stock compensation earned in period

             

681,533

     

681,533

                         

Debt converted to shares:

                       

Shareholder, December 2010, $.0175

 

4,000,000

 

40

 

69,960

         

70,000

Note holder, November 2010, $.0305

 

967,735

 

10

 

29,490

         

29,500

                         

Net Loss, December 31, 2010

                 

(880,953)

 

(880,953)

                         

Balance, December 31, 2010

 

16,959,147

 

170

 

1,115,331

 

(136,307)

 

(1,117,716)

 

(138,522)

                         

 

 


 

 

 

Continued on next page

 

Continued from prior page

 

 

Shares issued, in advance of service period :

                       

Issued January 24, 2011, valued at $.065, 2 years

 

1,000,000

 

10

 

64,990

 

(65,000)

     

-

Deferred stock compensation earned in period

             

157,974

     

157,974

                         

Shares issued for services:

                       

January 24, 2011 at $.065 per share

 

1,100,000

 

11

 

71,489

         

71,500

August 16, 2011 at $.031 per share

 

3,000,000

 

30

 

92,970

         

93,000

                         

Debt and accrued interest converted to shares:

                       

Noteholder, January 2011, $.0271

 

2,604,866

 

26

 

70,474

         

70,500

Noteholder, May 2011, $.0255

 

917,647

 

9

 

23,391

         

23,400

Noteholder, August 2011, $.0302

 

2,650,385

 

27

 

79,973

         

80,000

Noteholder, September 23 2011, $.003

 

2,250,000

 

23

 

6,477

         

6,500

Noteholder, September 30 2011, $.0127

 

1,065,574

 

10

 

13,490

         

13,500

                         

Beneficial conversion on note conversion

         

13,500

         

13,500

                         

Net Loss, September 30, 2011 (unaudited)

                 

(587,107)

 

(587,107)

                         

Balance, September 30, 2011

 

31,547,619

 

$ 316

 

$ 1,552,085

 

$ (43,333)

 

$ (1,704,823)

 

$ (195,755)

                         
                         
                         

* Shares issued prior to June 10, 2010 have been retroactively restated to reflect a 30:1 reverse stock split.

                         

The accompanying notes are an integral part of these financial statements

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

IC Places, Inc.

 

(A Development Stage Company)

 

Statement of Cash Flows

 

                   

Mar 18, 2005

               

(inception date)

           

Sep 30, 2011

 

Sep 30, 2010

 

through

           

(unaudited)

 

(unaudited)

 

Sep 30, 2011

                     

Cash Flows from Operating Activities:

                   

Net Loss from Operations

         

$ (587,107)

 

$ (638,546)

 

$ (1,704,823)

                     

Adjustments to reconcile net loss to meet cash provided by operating activities:

                   

Depreciation

         

5,842

 

5,789

 

28,849

Stock Based Compensation

         

349,473

 

542,319

 

1,175,668

Stock Based Payments for Rents

         

2,187

 

2,187

 

5,104

Change in Derivative and Beneficial Conversion

         

66,085

 

(1,436)

 

93,857

Amortization of finance costs

                   

Decreases (increases) in assets and liabilities:

                   

Accounts Receivable

         

-

 

(2,718)

 

(2,100)

Accrued Liabilities

         

6,352

 

(4,367)

 

24,205

Net cash (used in) provided by operations

         

(157,168)

 

(96,772)

 

(379,240)

                     
                     

Cash Flows from Investing Activities:

                   

Capital Expenditures

         

(13,726)

 

(2,406)

 

(43,966)

Net cash provided by (used in) investing activities

         

(13,726)

 

(2,406)

 

(43,966)

                     
                     

Cash Flows from Financing Activities:

                   

Proceeds from notes and loans

         

122,500

 

80,000

 

222,500

Stockholder advances

         

(65,074)

 

19,097

 

37,238

Issuance of common stock

         

113,501

 

-

 

163,501

Net cash provided by (used in) financing activities

         

170,927

 

99,097

 

423,239

                     

Net Increase (Decrease) in Cash

         

33

 

(81)

 

33

                     

Cash, beginning of year

         

-

 

235

 

-

                     

Cash, ending

         

$ 33

 

$ 154

 

$ 33

                     
                     

Supplemental Cash Flows:

                   

Cash paid for interest

         

$ -

 

$ -

 

$ -

Cash paid for taxes

         

$ -

 

$ -

 

$ -

                     

Non Cash Disclosures

                   

Long-term lease paid with stock

         

$ -

 

$ 17,500

 

$ 17,500

Conversion of debt to equity

         

$ 173,900

 

$ -

 

$ 203,400

Conversion of shareholder debt to equity

         

$ -

 

$ -

 

$ 70,000

                     
                     

The accompanying notes are an integral part of these financial statements

 

                       

 

 


 

 

 

 

IC Places, Inc.

(A Development Stage Company)

Notes to the Financial Statements

(unaudited)

 

 

  1.                         Background Information

 

IC Places, Inc. ("The Company") was formed on March 18, 2005 as a Delaware Corporation and is based in Celebration, Florida.  The Company engages in the ownership and operation of a network of city-based websites for use by business and vacation travelers as well as local individuals.  The Company’s websites provide local information about hotels, restaurant dining, golf courses, discount event tickets, discount car rentals, discount airfare, and attraction tickets.

 

IC Place's offers marketing tools and expertise to advertisers that combine the quality and power of Flash video, interactive features, the ability to update their information and add special events immediately and as frequently as desired. The IC Places websites also incorporate the most comprehensive online tracking and reporting capabilities. This dramatically enhances the impact and effectiveness of any ad campaign.

 

2.            Summary of Significant Accounting Policies

 

The significant accounting policies followed are:

 

Basis of Presentation

 

All adjustments consisting of normal recurring adjustments necessary for a fair statement of (a) the result of operations for the three and nine month periods ended September 30, 2011, 2010 and the period March 18, 2005 (date of inception) through September 30, 2011; (b) the financial position at September 30, 2011, and (c) cash flows for the nine month periods ended September 30, 2011 and 2010, have been made.

  

The Company prepares its financial statements in conformity with generally accepted accounting principles in the United States of America. These principals require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management believes that these estimates are reasonable and have been discussed with the Board of Directors; however, actual results could differ from those estimates.

 

The unaudited financial statement and notes are presented as permitted by Form 10-Q. Accordingly, certain information and note disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted. The accompanying unaudited financial statements should be read in conjunction with the financial statements for the years ended December 31, 2010 and notes thereto in the Company’s annual report, filed as an exhibit with the Securities and Exchange Commission. Operating results for the three and nine months ended September 30, 2011, 2010 and for the period March 18, 2005 (date of inception) to September 30, 2011 is not necessarily indicative of the results that may be expected for the entire year.

 

 


 

 

 

Effective January 1, 2008, the Company adopted FASB ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company’s financial position or operating results, but did expand certain disclosures.

 

Fair Value Measurement

 

ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:

 

 

 

Level 1:

Observable inputs such as quoted market prices in active markets for identical assets or liabilities

 

Level 2:

Observable market-based inputs or unobservable inputs that are corroborated by market data

 

Level 3:

Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.

 

The Company’s balance sheets include the following financial instruments: cash, accounts receivable, accrued liabilities and amounts due to stockholder. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization.

 

Cash and Cash Equivalents

 

The majority of cash is maintained with a major financial institution in the United States.  Deposits with this bank may exceed the amount of insurance provided on such deposits.  Generally, these deposits may be redeemed on demand and, therefore, bear minimal risk.  The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

 

Accounts Receivable and Credit

 

Accounts receivable consist of amounts due for advertising, based on referral agreements.   Advertising revenue is recognized when businesses place advertisements on the IC Places website or through banner ads or upon a customer's purchase of partner offerings originated from links through the company website.   An allowance for doubtful accounts is considered to be established for any amounts that may not be recoverable, which is based on an analysis of the Company’s customer credit worthiness, and current economic trends.  Based on management’s review of accounts receivable, no allowance for doubtful accounts was considered necessary.   Receivables are determined to be past due, based on payment terms of original invoices.  The Company does not typically charge interest on past due receivables.

 

Property and Equipment

 

Property and equipment is stated at cost.  Depreciation is computed by the straight-line method over estimated useful lives (3-7 years).  The carrying amount of all long-lived assets is evaluated periodically to determine if adjustment to the depreciation and amortization period or the unamortized balance is warranted. Based upon its most recent analysis, the Company believes that no impairment of property and equipment existed at December 31, 2010.

 

Long-lived assets such as property, equipment and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable.  When required impairment losses on assets to be held and used are recognized based on the fair value of the asset.  The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required.  If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset.  When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets.  We did not recognize any impairment losses for any periods presented.

 

 


 

 

 

Share-based Compensation

 

All share-based payments to employees, including grants of employee stock options to be recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). The Company had no common stock options or common stock equivalents granted or outstanding for all periods presented.

 

 

Advertising Costs

 

The costs of advertising are expensed as incurred.  Advertising expense was $4,047, $0, $5,871, $32 and $34,585 for the three and nine months ended September 30, 2011, 2010, and for the period March 18, 2005 (date of inception) through September 30, 2011, respectively.

 

Income Taxes

 

The Company accounts for income taxes under the liability method. This method provides that deferred tax assets and liabilities are recorded based on the differences between the tax basis of assets and liabilities and their carrying amounts for financial reporting purpose, referred to as temporary differences. Deferred tax assets and liabilities at the end of each period are determined using the currently enacted tax rates applied to taxable income in the periods in which the deferred tax assets and liabilities are expected to be settled or realized.

 

Earnings (Loss) Per Share

 

Basic earnings (loss) per share calculations are determined by dividing net income (loss) by the weighted average number of shares outstanding during the year. Diluted earnings (loss) per share calculations are determined by dividing net income (loss) by the weighted average number of shares. There are no share equivalents and, thus, anti-dilution issues are not applicable.

 

3.            Development Stage Enterprise

 

The Company has been in the development stage since its formation on March 18, 2005.  It has primarily engaged in developing an internet portal website and raising capital to carry out its business plan. The Company expects to continue to incur significant operating losses and to generate negative cash flow from operating activities while it develops its customer base and establishes itself in the marketplace.  The Company's ability to eliminate operating losses and to generate positive cash flow from operations in the future will depend upon a variety of factors, many of which it is unable to control.  If the Company is unable to implement its business plan successfully, it may not be able to eliminate operating losses, generate positive cash flow, or achieve or sustain profitability, which would materially adversely affect its business, operations, and financial results, as well as its ability to make payments on any obligations it may incur.

 

4.            Going Concern

 

The accompanying unaudited financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern.

 

The Company incurred a net loss for the nine months ended September 30, 2011 and accumulated significant losses for the period March 18, 2005 (date of inception) through the period ended September 30, 2011.  As of September 30, 2011 the Company had minimal cash with which to satisfy any future cash requirements. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.  The Company depends upon capital to be derived from future financing activities such as subsequent offerings of its common stock or debt financing in order to operate and grow the business.  There can be no assurance that the Company will be successful in raising such capital.  The key factors that are not within the Company's control and that may have a direct bearing on operating results include, but are not limited to, acceptance of the Company's business plan, the ability to raise capital in the future, the ability to expand its customer base, and the ability to hire key employees to build and maintain websites and to provide services and support to its customers and users.  There may be other risks and circumstances that management may be unable to predict.

 

 


 

 

 

The unaudited financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.

 

5.            Recently Issued Accounting Pronouncements

  

Except for rules and interpretive releases of the SEC under authority of federal securities laws and a limited number of grandfathered standards, the FASB Accounting Standards Codification™ (“ASC”) is the sole source of authoritative GAAP literature recognized by the FASB and applicable to the Company.  Management has reviewed the aforementioned rules and releases and believes any effect will not have a material impact on the Company's present or future consolidated financial statements.

 

 

6.            Property and Equipment

 

Property and equipment consists of: 

   

September 30, 2011

   

December 31, 2010

     

(unaudited)

   

(audited)

    Office Furniture

 

$

229

 

$

229

Computer Equipment

   

3,928

   

3,928

Software

 

 

39,809

 

 

26,083

     

43,966

   

30,240

Less accumulated depreciation

 

 

28,849

 

 

23,007

Property and equipment, net

 

$

15,117

 

$

7,233

 

Depreciation of equipment was $1,498, 2,019, $5,842, $5,789 and $28,849 for the three and nine months ended September 30, 2011, 2010, and for the period March 18, 2005 (date of inception) through September 30, 2011, respectively.

 

 

7.            Convertible Notes Payable

 

The Company received a total of $222,500 ($122,500 during 2011) of proceeds, received on various dates, from an unrelated third party in exchange for a series of convertible promissory notes at an annual interest rate of 8% on any unpaid principal and a maturity date of nine months from the date of advances.  A penalty interest rate will be in effect for any amount of principal or interest which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date.  The note is convertible at the option of the holder at any time during the lending period.  The note is convertible into common stock at a conversion price of the calculated average of the lowest three trading prices for the common stock during the ten trading day period prior to the date of the conversion notification.  The holder has converted a portion of these notes in satisfaction of the amounts due.  During the nine month period ended September 30, 2011, notes with a face value of $187,400 and accrued interest of $900 was converted into 7,238,472 shares of common stock, at an average price of $.0259.  The Company currently reports the amount due, under these convertible notes, of $112,708, which is net of $5,792 of unamortized financing costs (amortized to interest expense over the term of each note) associated with origination fees from the installments.

 

The Company has recognized the derivative liability associated with this agreement and has revalued the beneficial conversion feature, classifying as a derivative liability.  As of September 30, 2011 and December 31, 2010, the derivative liability was calculated to be $73,750 and $77,373, respectively.

 

The derivative valuation resulted from calculation using an option pricing method for the conversion feature of the note payable. The following assumptions were used in our calculation:

 

 


 

 

 

Weighted Average:

   

Stock Price

 

$.0248

Strike Price

 

$.0124

Dividend rate

 

0.0%

Risk-free interest rate

 

1.02%

Expected lives (years)

 

.493

Expected price volatility

 

310%

Forfeiture Rate

 

0.0%

 

On September 23, 2011, the Company entered into an arrangement with Greystone Funding, LLC, ("Greystone") whereby the Company assigned certain debt due the majority shareholder, in the amount of $250,000, secured by a five (5) year employment agreement (see related party footnote).  The note is convertible into shares of the Company stock, at the demand of Greystone.  The convertible note is interest bearing at 2% per annum, there are no repayment terms.  Terms of conversion define the stock price as at a 50% discount to the stock price defined as the average three deep bid on the day of funding. As of September 30, 2011 we issued 2,250,000 shares valued at $13,500 in satisfaction of payments, resulting in a beneficial conversion at the time of the issuance of $13,500.  Since there is an option for repayment in cash, the beneficial conversion will be determined at the time of demand, if shares are used in satisfaction of the payment request.  The remaining balance on this convertible note payable is resulting in remaining balance on this convertible note is $236,500.

 

8.           Income Tax

 

The Company has not recognized an income tax benefit for the current quarter and year based on uncertainties concerning its ability to generate taxable income in future periods.  The tax benefit for the current period presented is offset by a valuation allowance (100%) established against deferred tax assets arising from operating losses and other temporary differences, the realization of which could not be considered more likely than not.  In future periods, tax benefits and related deferred tax assets will be recognized when management considers realization of such amounts to be more likely than not.  

 

9            Equity

 

On June 11, 2010 the Board of Directors of the Company approved a reverse stock split, whereby one common share was issued for each thirty shares of common stock held (“30:1”) (184,060,170 shares exchanged for 6,135,339 shares).  The financial statements presented reflect the previously reported common shares and weighted average common shares, retroactively for comparative purposes.

 

The company has one class of stock, common.  Five Hundred Million (500,000,000) shares of stock are authorized by the company’s Amended Articles of Incorporation filed within the State of Delaware, at par value $.00001

 

Shares issued to consultants during period in advance of services (unearned) to be provided have been charged to a contra-equity account and will be ratably expensed, over the requisite service period, as the services are rendered.

 

The Company, pursuant to its 2010 Equity Compensation Plan, which has been approved by the Company’s Board of Directors, as filed with the Securities and Exchange Commission on February 26, 2010, will issue up to 25,000,000 shares of common stock.   The 2010 Equity Compensation Plan is hoped to further provide a method whereby the Company’s current employees and officers and non employee directors and consultants may be stimulated and allow the Company to secure and retain highly qualified employees, officers, directors and non employee directors and consultants

  

10.            Related Party Transactions

 

The majority shareholder has advanced funds, since inception, for the purpose of financing working capital and product development.  As of September 30, 2011 and December 31, 2010, these advances amounted to $37,238 and $102,312, respectively. There are no formalized agreement or repayment terms to this advance and the amount is payable upon demand.  In the absence of a formal agreement or stated interest rate, the Company is accruing interest at a minimal variable rate, currently 3%.  Management will periodically adjust the rate recognized, following guidelines of applicable federal rates of interest.  In December 2010 the majority shareholder, with the approval of the Board of Directors, converted $70,000 of the advances into common shares.

 

 


 

 

 

On September 23, 2011, the Company entered into an employment agreement with the President and Chief Executive Officer, who is the majority shareholder, whereby the Company’s Board of Directors declared a $250,000 amount payable for a five (5) year employment commitment.  The amount has been deferred and will be ratably expenses, as compensation, over the length of the agreement.

 

We depend on our sole officer and director, to provide the Company with the necessary funds to implement our business plan, as necessary.  The Company does not have a funding commitment from him or any written agreement for our future required cash needs.

 

The amounts and terms of the above transactions may not necessarily be indicative of the amounts and terms that would have been incurred had comparable transactions been entered into with independent third parties.

 

 

11.          Commitments, Contingencies and Subsequent Events

 

The Company has entered into agreement for office and studio space for a six year period, beginning in January 2010 and expiring in December 2015.  

 

Future minimum lease payments for the years ended December 31:

 

2011

 

$

729

2012

   

2,917

2013

   

2,917

2014

   

2,917

2015

   

2,917

thereafter

   

--

   

$

12,396

 

 

From time to time the Company may be a party to litigation matters involving claims against the Company.  Management believes that there are no current matters that would have a material effect on the Company’s financial position or results of operations.

 

Management has considered all events subsequent to the balance sheet through the date that these financial statements were available, which is the date of our filing with the SEC. 

 

 

 


 

 

Item 2.  Management’s Discussion and Analysis or Plan of Operation.

 

Note Regarding Forward Looking Statements.

 

This quarterly report on Form 10-Q of IC Places, Inc. for the period ended September 30, 2011 contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby.  To the extent that such statements are not recitations of historical fact, such statements constitute forward-looking statements which, by definition, involve risks and uncertainties. In particular, statements under the Sections; Description of Business, Management's Discussion and Analysis of Financial Condition and Results of Operations contain forward-looking statements. Where, in any forward-looking statement, the Company expresses an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement of expectation or belief will result or be achieved or accomplished.

 

The following are factors that could cause actual results or events to differ materially from those anticipated, and include but are not limited to: general economic, financial and business conditions; changes in and compliance with governmental regulations; changes in tax laws; and the costs and effects of legal proceedings.

 

You should not rely on forward-looking statements in this quarterly report. This quarterly report contains forward-looking statements that involve risks and uncertainties.  We use words such as "anticipates," "believes," "plans," "expects," "future," "intends," and similar expressions to identify these forward-looking statements.  Prospective investors should not place undue reliance on these forward-looking statements, which apply only as of the date of this annual report. Our actual results could differ materially from those anticipated in these forward-looking statements for many reasons, including the risks faced by IC Places, Inc. For example, a few of the uncertainties that could affect the accuracy of forward-looking statements include:

 

(a)           An abrupt economic change resulting in an unexpected downturn in demand;

(b)           Governmental restrictions or excessive taxes on our products;

(c)           Over-abundance of companies supplying computer products and services;

(d)           Economic resources to support the retail promotion of new products and services;

(e)           Expansion plans, access to potential clients, and advances in technology; and

(f)            Lack of working capital that could hinder the promotion and distribution of products and services to a broader based business and retail population.

 

Financial information provided in this Form 10-Q for periods subsequent to September 30, 2011 is preliminary and remains subject to audit.. As such, this information is not final or complete, and remains subject to change, possibly materially  

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

The Company had $7,529, $7418, $21,215, $17,918 and $54,619 from advertising revenue for the three and nine month periods ended September 30, 2011,  2010 and for the period March 18, 2005 (date of inception) through September 30, 2011, respectively.  The Company has secured a contract for the commitment, at minimum, to distribute six program licenses:  "Instant Movie Reviews"," Instant DVD Reviews", "First Look"," Trailers"," IC Sports".  The Company has also received revenues from other advertising and talent fees.

 

Operating expenses were $174,971, $299,510, $508,277, $646,767 and $1,637,599 for the three and nine month periods ended September 30, 2011, 2010 and for the period March 18, 2005 (date of inception) through September 30, 2011, respectively.  Significant operating expenses were related to stock-based share payments which were $110,124, $263,306, $349,473, and $542,319 for the three and nine month periods ended September 30, 2011 and 2010, respectively.  Shares were issued as compensation for services rendered.  The Company is recording stock-based compensation, valued at the date of the issuance, and ratably expensing over the service period. Other significant operating expenses were also related to the maintenance of the corporate entity, primarily accounting and legal fees.  Expenses incurred in the development of the web-based search site are expensed as incurred.

 

 

 


 

 

The Company does not expect to generate any meaningful revenue or incur operating expenses for purposes other than fulfilling the obligations of a reporting company under the Securities Exchange Act of 1934 unless and until such time that the Company begins meaningful operations.

 

 

CONTRACTUAL OBLIGATIONS

 

None.

 

LIQUIDITY AND CAPITAL RESOURCES

 

The Company is currently financing its operations primarily through loans and advances from the majority shareholder.  These advances are being made to supplement any cash generated by the operating revenue.  We believe we can currently satisfy our cash requirements for the next twelve months with our current expected increase in revenue, and the expected capital to be raised in private placement and sales of our common stock.  Additionally, we will begin to use our common stock as payment for certain obligations and secure work to be performed. Management plans to increase revenue in order to sustain operations for at least the next twelve months. 

 

At September 30, 2011 the Company did not have adequate cash resources to meet current obligations.  Management believes that financial support from the majority shareholder to pay minimal and necessary incurred expense will allow the Company to benefit from advertising revenue streams, currently in-place, to produce the anticipated cash flow necessary to support operations.

 

At September 30, 2011 , the Company had negative working capital of approximately $210,000 as compared to negative $146,000 at December 31, 2010. Working capital as of both dates consisted entirely of cash, accounts receivable, and prepaid expenses, net of current liabilities; accordingly the Company does not anticipate being required to register pursuant to the Investment Company Act of 1940 and expects to be limited in its ability to invest in securities, other than cash equivalents and government securities, accordingly. There can be no assurances that any investment made by the Company will not result in losses.

 

At September 30, 2011, the Company has minimal cash and tangible assets, increasing accrued liabilities, negligible revenues, and a history of operating losses. The company plans to raise $1.2 Million dollars to launch its next phase of business and expenses associated with the next Phase are listed below. Absent an outside capital infusion, the Company will seek funding from traditional banking and other private sources. There are no assurances that any manner of securities offering (debt or equity) will be successful, and the Company’s revenues are inadequate to provide for the growth projected in this filing. We may be reliant on additional shareholder contributions, including from management, to continue operations. We are hopeful that the market awareness and financial transparency afforded through becoming a reporting company will assist us in procuring additional investment capital or loans.

 

As reflected in the audited financial statements, as of December 31, 2010, our auditor’s report included an explanatory paragraph concerns that raise substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company's ability to become profitable and or attain funding through additional sale of common stock or debt financing.  The Company has attained bank funding which is anticipated to satisfy expenses for the current year.  The unaudited financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

Off Balance Sheet Arrangements  

 

We have no off balance sheet arrangements.

 

Plan of Operation.  

 

During the current phase of this project, the following major events will occur, some of them simultaneously:

 

 

 

Obtain $1,200,000 investment

 

Rent and equip IC Places central office location (and required permits)

 

Launch the Wireless Application, Video Classified Advertisements, and Restaurant Menu Ordering system

 

Launch recruitment and training plan for sales and ITC

 

Begin a marketing campaign

 

 


 

 

 

Start-up Requirements

 

 

 

 

 

 

Phase 2 launch Expenses:

 

 

 

 

Legal and Form 10 Filing

 

$

60,000

 

Business Cards and Marketing Materials

 

 

25,000

 

Insurance

 

 

1,750

 

Rent -(First, Last and Security Deposit)

 

 

15,000

 

Computers and Software

 

 

25,000

 

Fixtures (Desks, Displays, Chairs etc.)

 

 

9,400

 

Phones

 

 

4,000

 

Wireless Application

 

 

100,000

 

Licensing Program Setup

 

 

30,000

 

Billboards

 

 

120,000

 

Promotion and trade shows

 

 

55,000

 

Total Expenses

 

$

445,150

 

 

Start-up Assets:

 

 

 

 

Cash Required

 

 

360,000

 

Other Current Assets

 

 

46,000

 

Long-term Assets

 

 

25,000

 

Total Assets

 

$

431,000

 

Total Requirements

 

$

876,150

 

 

Strategy

 

The key elements in our Sales Strategy are centered on market penetration and sales consistency.

 

Market Penetration:

 

Our initial plan is to have an active sales agent in each of our listed markets. The best way to have knowledge of the individual markets is to hire agents that have a strong familiarity of their selling area. In our hiring practices we will be looking for agents that not only have B2B sales experience but also know their market. As we build out our advertising client base in each market, we will consolidate geographic areas as the markets demand. We are looking at having sales agents in a minimum of 85% our selling cities within the next three to six months.

 

Sales Process:

 

Our agents will use a combination of phone and face-to-face selling. Depending on the market that the agent is working, the normal process will be to call for an appointment and then present our company in that scheduled appointment. In some markets, the agents will be better suited to prospect door to door if those markets are more tailored to that type of selling. The bottom line is that making the calls and getting in front of the decision makers will produce sales.

  

To aid in client retention we intend to roll out our customer service group within three months of establishing 80% of our target cities sales agents. The requirement of this group will be to contact each client on a quarterly basis and give them new information on upcoming changes with IC Places and to help bring value to their individual adverting. The customer service group will pull up each site as they speak with the clients and be available to make changes or recommendations on how to add value to the information that is posted. They will also be attentive to the clients’ concerns and use this information to be sure that we are properly serving our clients’ needs to help with client retention. This group will also aid in pulling some of the responsibilities from the sales agents so that they will be able to remain focused on client accusation and not having to spend all of their time on customer service issues. The head count for this group will be adjusted to meet the needs of our company.

 

 


 

 

 

Sales Tracking:

 

We will require each of our agents to submit a sales funnel on a bi-monthly basis. This funnel will include percentage of close ratios, contact date and time and current and projected sales. The goal of this report is to help in estimating future revenues and this report will also be used as a tool for checks and balances for discrepancies with commissions or evaluating work standards. Our agents will be using our internet phone service for telephone prospecting and phone call reports will be used to aid in tracking hours worked by individual agents. It will be the combination of these two tools that will be used in evaluating agent’s performance and standards.

 

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

 

We are a Smaller Reporting Company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

 

Item 4.  Controls and Procedures

 

Item 4(T).  Controls and Procedures.

 

(a)           Management’s Conclusions Regarding Effectiveness of Disclosure Controls and Procedures.

 

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with U.S. generally accepted accounting principles.

 

With respect to the period ending September 30, 2010, under the supervision and with the participation of our management, we conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures,  as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934 and based on the criteria for effective internal control described in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. 

 

Based upon our evaluation regarding the period ending September 30, 2011, the Company’s management, including its Chief Executive Officer and Chief Financial Officer, has concluded that its disclosure controls and procedures were not effective due to the Company’s limited internal resources and lack of ability to have multiple levels of transaction review.  Through the use of external consultants and the review process, management believes that the financial statements and other information presented herewith are materially correct. 

 

The Company’s disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives.  However, the Company’s management, including its Chief Executive Officer and Chief Financial Officer, does not expect that its disclosure controls and procedures will prevent all error and all fraud.  A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.  Further, the design of a control system must reflect the fact that there are resource constraints, and the benefit of controls must be considered relative to their costs.  Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

 

(b) Changes in Internal Controls.

 

There have been no changes in the Company’s internal control over financial reporting during the period ended September 30, 2011 that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

 

 

 

 


 

Part II.  Other Information

 

Item 1.  Legal Proceedings.

 

None.

 

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

 

None..

 

Item 3.  Defaults Upon Senior Securities

 

None

 

Item 4.  Removed and Reserved

 

Not applicable.

 

Item 5.  Other Information.

 

None.

 

Item 6.  Exhibits

 

 

   

Exhibit

Number

Description

 

 

31.1

Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

31.2

Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

32.1

Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

32.2

Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

101

Interactive Data Files of Financial Statements and Notes contained in this Quarterly Report on Form 10-Q.**

 

*     Filed herein

**  In accordance with Regulation S-T, the Interactive Data Files in Exhibit 101 to the Quarterly Report on Form 10-Q shall be deemed "furnished" and not "filed."

 

 

SIGNATURES

 

In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

 

 

 

 

IC PLACES, INC.

 

 

 

 

 

 

Date: April 17, 2012

By: /s/ Steven Samblis

 

STEVEN SAMBLIS,

Chief Executive Officer

Chief Financial Officer

 

 

 

 

 


 


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