UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[X] | Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period ended September 30, 2011 | |
[ ] | Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934 |
For the transition period to __________ | |
Commission File Number: 333-156254 |
Global
Karaoke Network, Inc.
(Exact name of small business issuer as specified in its charter)
Delaware | 26-0884454 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) | |
1114 17th Ave., Suite 105, Nashville, TN 37212 |
(Address of principal executive offices) |
615-495-8494 |
(Issuer’s telephone number) |
_______________________________________________________________ |
(Former name, former address and former fiscal year, if changed since last report) |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). [ ] Yes [X] 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.
[ ] Large accelerated filer Accelerated filer | [ ] Non-accelerated filer |
[X] Smaller reporting company |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). [X] Yes [ ] No
State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 469,440,000 as of November 9, 2011.
TABLE OF CONTENTS |
Page | |
PART I – FINANCIAL INFORMATION | ||
Item 1: | Financial Statements | 3 |
Item 2: | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
4 |
Item 3: | Quantitative and Qualitative Disclosures About Market Risk | 5 |
Item 4: | Controls and Procedures | 6 |
PART II – OTHER INFORMATION | ||
Item 1: | Legal Proceedings | 6 |
Item 1A: | Risk Factors | 6 |
Item 2: | Unregistered Sales of Equity Securities and Use of Proceeds | 7 |
Item 3: | Defaults Upon Senior Securities | 7 |
Item 4: | (Removed and Reserved) | 7 |
Item 5: | Other Information | 7 |
Item 6: | Exhibits | 7 |
2 |
PART I - FINANCIAL INFORMATION
Our financial statements included in this Form 10-Q are as follows:
These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended September 30, 2011 are not necessarily indicative of the results that can be expected for the full year.
3 |
GLOBAL KARAOKE NETWORK, INC.
(A Development Stage Company)
ASSETS | ||||||||
September 30, | June 30, | |||||||
2011 | 2011 | |||||||
(Unaudited) | ||||||||
CURRENT ASSETS | ||||||||
Cash | $ | 5,126 | $ | — | ||||
Assets of discontinued operations - current | — | 1,864 | ||||||
Total Current Assets | 5,126 | 1,864 | ||||||
TOTAL ASSETS | $ | 5,126 | $ | 1,864 | ||||
LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts payable | $ | 22,825 | $ | — | ||||
Loan payable - related party | 14,000 | — | ||||||
Liabilities of discontinued operations - current | — | 366,197 | ||||||
Total Current Liabilities | 36,825 | 366,197 | ||||||
TOTAL LIABILITIES | 36,825 | 366,197 | ||||||
STOCKHOLDERS' DEFICIT | ||||||||
Preferred stock, $0.00001 par value, 10,000,000 shares authorized, -0- shares issued and outstanding | — | — | ||||||
Common stock, $0.00001 par value, 500,000,000 shares authorized, 469,440,000 shares issued and outstanding | 4,694 | 4,694 | ||||||
Additional paid-in capital | 379,411 | 15,054 | ||||||
Deficit accumulated during the development stage | (415,804 | ) | (384,081 | ) | ||||
Total Stockholders' Deficit | (31,699 | ) | (364,333 | ) | ||||
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ | 5,126 | $ | 1,864 |
The accompanying notes are an integral part of these financial statements.
F-1 |
GLOBAL KARAOKE NETWORK, INC.
(A Development Stage Company)
(Unaudited)
From Inception on September 10, | ||||||||||||
For the Three Months Ended | 2007 Through | |||||||||||
September 30, | September 30, | |||||||||||
2011 | 2010 | 2011 | ||||||||||
REVENUES | $ | — | $ | — | $ | — | ||||||
OPERATING EXPENSES | ||||||||||||
Professional fees | 27,160 | 22,177 | 240,837 | |||||||||
General and administrative | 1,309 | — | 1,309 | |||||||||
Total Operating Expenses | 28,469 | 22,177 | 242,146 | |||||||||
LOSS FROM CONTINUING OPERATIONS | (28,469 | ) | (22,177 | ) | (242,146 | ) | ||||||
DISCONTINUED OPERATIONS | ||||||||||||
Loss from discontinued operations | (3,254 | ) | (7,521 | ) | (173,658 | ) | ||||||
Loss from discontinued operations | (3,254 | ) | (7,521 | ) | (173,658 | ) | ||||||
NET LOSS | $ | (31,723 | ) | $ | (29,698 | ) | $ | (415,804 | ) | |||
BASIC AND DILUTED LOSS | ||||||||||||
PER COMMON SHARE | $ | 0.00 | $ | 0.00 | ||||||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED | 469,440,000 | 469,440,000 |
The accompanying notes are an integral part of these financial statements.
F-2 |
GLOBAL KARAOKE NETWORK, INC.
(A Development Stage Company)
(Unaudited)
From Inception on September 10, | ||||||||||||
For the Three Months Ended | 2007 Through | |||||||||||
September 30, | September 30, | |||||||||||
2011 | 2010 | 2011 | ||||||||||
OPERATING ACTIVITIES | ||||||||||||
Net loss | $ | (31,723 | ) | $ | (29,698 | ) | $ | (415,804 | ) | |||
Changes in operating assets and liabilities: | ||||||||||||
Accounts payable | 19,595 | 22,177 | 19,595 | |||||||||
Net Cash Used in Continuing Operating Activities | (12,128 | ) | (7,521 | ) | (396,209 | ) | ||||||
Net Cash Provided by Discontinued Operating Activities | 1,094 | 6,481 | 282,691 | |||||||||
INVESTING ACTIVITIES | ||||||||||||
Cash included in the sale of discontinued operations | (364 | ) | (364 | ) | ||||||||
Net Cash Used in Continuing Investing Activities | (364 | ) | — | (364 | ) | |||||||
Net Cash Used in Discontinued Investing Activities | — | — | (1,223 | ) | ||||||||
FINANCING ACTIVITIES | ||||||||||||
Proceeds from loan payable - related party | 14,000 | — | 14,000 | |||||||||
Net Cash Provided by Continuing Financing Activities | 14,000 | — | 14,000 | |||||||||
Net Cash Provided by Discontinued Financing Activities | 660 | 1,500 | 106,231 | |||||||||
NET INCREASE IN CASH | 3,262 | 460 | 5,126 | |||||||||
CASH AT BEGINNING OF PERIOD | 1,864 | 497 | — | |||||||||
CASH AT END OF PERIOD | $ | 5,126 | $ | 957 | $ | 5,126 | ||||||
SUPPLEMENTAL DISCLOSURES OF | ||||||||||||
CASH FLOW INFORMATION | ||||||||||||
CASH PAID FOR: | ||||||||||||
Interest | $ | — | $ | — | $ | — | ||||||
Income Taxes | $ | — | $ | — | $ | — | ||||||
SUPPLEMENTAL DISCLOSURES OF | ||||||||||||
NON CASH INVESTING ACTIVITY: | ||||||||||||
Gain on sale of subsidiaries | $ | 364,357 | $ | — | $ | 364,357 |
The accompanying notes are an integral part of these financial statements.
F-3 |
GLOBAL KARAOKE NETWORK, INC.
(A Development Stage Company)
Notes to the Condensed Financial Statements
September 30, 2011
(Unaudited)
NOTE 1 – THE COMPANY
Global Karaoke Network, Inc. (the “Company”) was incorporated as MojoRepublik, Inc. in the state of Delaware on September 10, 2007. On October 1, 2008, the Company changed its name to Republik Media and Entertainment, Ltd. The Company conducts business through its two wholly-owned subsidiaries, MojoRepublik LLC and LiveBrew.com, LLC. MojoRepublik, LLC, a wholly-owned subsidiary of the Company, was organized on June 14, 2007 in the State of Nevada. MojoRepublik, LLC was in the business of developing and promoting a website, www.mojorepublik.com. LiveBrew.com, LLC, a wholly-owned subsidiary of the Company, was organized on May 23, 2008 in the State of Nevada. LiveBrew.com, LLC was in the business of organizing and promoting live events.
On July 12, 2011, the Company’s majority shareholder sold all of his shares in the Company to an individual who now holds 82.82% of the Company’s total issued and outstanding stock.
As reported in the Form 8-K filed on August 4, 2011, effective August 3, 2011, and upon the prior approval of the Company’s board of directors and a majority of our shareholders, the Company’s corporate name was changed to “Global Karaoke Network, Inc.” Contemporaneously with the name change, the Company decided to stop pursuing its former business plans. The Company is currently undecided upon a new business plan but is considering a number of alternatives.
On September 26, 2011, the Company agreed to transfer all membership units owned in its two wholly-owned subsidiaries to a former officer of the Company who is also the Company’s former majority stockholder in exchange for the assumption of all liabilities relating to the subsidiaries and for the cancellation of outstanding promissory notes.
NOTE 2 – BASIS OF PRESENTATION
In the opinion of management, the accompanying unaudited interim financial statements contain all adjustments (which include only normal recurring adjustments) and disclosures necessary to present fairly the Company’s financial position, results of operations, and cash flows at September 30, 2011 and for all periods presented herein.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These unaudited financial statements should be read in conjunction with the financial statements and related notes thereto included in the Company's Annual Report on Form 10-K/A for the fiscal year ended June 30, 2011, filed on October 4, 2011. The results of operations for the period ended September 30, 2011 is not necessarily indicative of the operating results for the full year.
The Company is currently in the development stage and has not realized significant sales through September 30, 2011. A development stage company is defined as one in which all efforts are devoted substantially to establishing a new business and even if planned principal operations have commenced, revenues are insignificant.
F-4 |
GLOBAL KARAOKE NETWORK, INC.
(A Development Stage Company)
Notes to the Condensed Financial Statements
September 30, 2011
(Unaudited)
NOTE 3 - GOING CONCERN
The Company's 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 has not yet established an ongoing source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern. The Company has incurred operating losses since inception. The Company has realized net losses from inception totaling $415,804. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.
In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
NOTE 4 – DISCONTINUED OPERATIONS
On September 26, 2011, the Company agreed to transfer all membership units owned in its two wholly-owned subsidiaries, MojoRepublik, LLC and LiveBrew.com, LLC, to a former officer of the Company who is also the Company’s former majority stockholder in consideration for the cancellation of all outstanding promissory notes held by the former officer and the assumption of other liabilities related to the subsidiaries. The former officer agreed to cancel and/or assume a total of $364,721 which included accounts payable, accrued interest and notes payable. The former officer also received fixed assets which had no carrying value on the date of sale as well as the bank account of one subsidiary with cash of $364. The Company did not recognize a gain on the transaction and recognized the net book deficiency of the subsidiaries sold as an increase in the Company’s additional paid-in-capital of $364,357.
In accordance with ASC 205, Presentation of Financial Statements, the Company has recorded the sale of the subsidiaries as a discontinuance of operations. As such, all results of operations related to the subsidiaries has been reclassified to loss from discontinued operations. Historical operations of the two subsidiaries have also been retroactively reclassified to loss from discontinued operations to be presented separately from results of operations from continuing operations. Comparative amounts of assets and liabilities of the subsidiary have also been reclassified within the Company’s balance sheets as assets and liabilities of discontinued operations to be presented separately from assets and liabilities of continuing operations. Likewise, the statements of cash flows have been retroactively reclassified to separate cash flow activity related to the subsidiaries into cash flows from continuing operations and cash flows from discontinued operations.
F-5 |
GLOBAL KARAOKE NETWORK, INC.
(A Development Stage Company)
Notes to the Condensed Financial Statements
September 30, 2011
(Unaudited)
NOTE 4 – DISCONTINUED OPERATIONS (continued)
Assets and liabilities of discontinued operations consisted of the following as of September 30, 2011 and June 30, 2011:
September 30, | June 30, | |||||||
2011 | 2011 | |||||||
(unaudited) | ||||||||
Assets | ||||||||
Cash | $ | — | $ | 1,864 | ||||
Assets of discontinued operations - current | $ | — | $ | 1,864 | ||||
Liabilities | ||||||||
Accounts payable | $ | — | $ | 273,899 | ||||
Loan payable - related parties | — | 68,691 | ||||||
Accrued interest payable - related parties | — | 11,255 | ||||||
Note payable | — | 10,000 | ||||||
Accrued interest payable | — | 2,352 | ||||||
Liabilities of discontinued operations - current | $ | — | $ | 366,197 |
Loss from discontinued operations consisted of the following:
From Inception | ||||||||||||
on September 10, | ||||||||||||
2007 Through | ||||||||||||
September 30, | September 30, | September 30, | ||||||||||
2011 | 2010 | 2011 | ||||||||||
Revenues from discontinued operations | $ | — | $ | — | 8,523 | |||||||
Operating Expenses | ||||||||||||
Professional fees | 1,738 | 5,358 | 57,733 | |||||||||
General and administrative | 422 | 1,040 | 109,852 | |||||||||
Total operating expenses of discontinued operations | 2,160 | 6,398 | 167,585 | |||||||||
Other income and expenses | ||||||||||||
Other income | — | — | 104 | |||||||||
Interest expense | (1,094 | ) | (1,123 | ) | (14,700 | ) | ||||||
(1,094 | ) | (1,123 | ) | (14,596 | ) | |||||||
Loss from discontinued operations | $ | (3,254 | ) | $ | (7,521 | ) | (173,658 | ) |
F-6 |
GLOBAL KARAOKE NETWORK, INC.
(A Development Stage Company)
Notes to the Condensed Financial Statements
September 30, 2011
(Unaudited)
NOTE 5 – RELATED PARTY TRANSACTIONS
Various expenses of the Company as well as loans for operating purposes have been paid for or made by officers of the Company. Loans payable – related parties total $14,000 and $68,691 as of September 30, 2011 and June 30, 2011, respectively. On September 26, 2011, principle of $69,351 and accrued interest of $12,211 was cancelled by the buyer of the Company’s two subsidiaries (see Note 4). These amounts included all notes payable and accrued interest outstanding as of June 30, 2010. During the three months ended September 30, 2011, the Company borrowed $14,000 from the Company’s newly appointed CEO. The amounts do not bear interest, are due on demand and unsecured.
Effective July 12, 2011, office space is provided by the Company’s sole officer and director. No rent is charged for the use of the space.
NOTE 6 – NOTE PAYABLE
On August 1, 2007, the Company issued a $10,000 note payable. The full face value of this note and all related accrued interest through September 26, 2011 was assumed by the buyer of the Company’s two subsidiaries (see Note 4).
F-7 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements.” These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on our operations and future prospects include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.
Overview
We were incorporated as MojoRepublik, Inc. in the state of Delaware on September 10, 2007. On October 1, 2008, we changed our name to Republik Media and Entertainment, Ltd. (the “Company” or “Republik Media” or “Republik”). As Republik, we created two wholly-owned subsidiaries, MojoRepublik, LLC and LiveBrew.com, LLC. MojoRepublik, LLC, a wholly-owned subsidiary of the Company, was organized on June 14, 2007 in the State of Nevada. MojoRepublik, LLC was in the business of developing and promoting a website, www.mojorepublik.com. LiveBrew.com, LLC, a wholly-owned subsidiary of the Company, was organized on May 23, 2008 in the State of Nevada. LiveBrew.com, LLC was in the business of organizing and promoting live events.
As reported in the Form 8-K filed on August 4, 2011, effective August 3, 2011, and upon the prior approval of our board of directors and a majority of our shareholders, our corporate name was changed to “Global Karaoke Network, Inc.” Contemporaneously with the name change, we decided to stop pursuing our former business plans.
In furtherance of our decision to stop pursuing our prior business plan, on September 26, 2011, we entered into an Agreement of Conveyance, Transfer and Assignment of Membership Interests, Assumption of Obligations and Cancellation of Promissory Notes with Mr. David Woo. The foregoing agreement transferred all membership units owned in our two wholly-owned subsidiaries, MojoRepublik, LLC and LiveBrew.com, LLC to Mr. Woo in exchange for Mr. Woo assuming all liabilities relating to the subsidiaries and for the cancellation of all outstanding promissory notes.
We are currently undecided upon a new business plan but are considering a number of alternatives.
Results of Operations for the three months ended September 30, 2011
As a result of the sale of MojoRepublik, LLC and LiveBrew.com, LLC, the entities under which we pursued our former business plan, our operations in the financial statements are now characterized between continuing operations and discontinued operations. The continuing operations reflect our current operations. The discontinued operations reflect the historical operations that we pursued under MojoRepublik, LLC and LiveBrew.com, LLC and our prior business plan.
We generated no gross revenue for the three months ended September 30, 2011, which was the first quarter of our continuing operations. Our operating expenses for our continuing operations during the three month period ended September 30, 2011 were $28,469, consisting primarily of $27,160 in professional fees. We therefore recorded a net loss from continuing operations of $28,469 for the three months ended September 30, 2011.
4 |
Comparatively, we generated no gross revenue from continuing operations for the three months ended September 30, 2010. Our operating expenses for our continuing operations during the three month period ended September 30, 2010 were $22,177, consisting entirely of professional fees. We therefore recorded a net loss from continuing operations of $22,177 for the three months ended September 30, 2010.
The results of our discontinued operations are contained in the financial statements. Additionally, the footnotes to the financial statements include a description of the facts and circumstances leading to the disposal, the manner and timing of that disposal and the carrying amounts of the major classes of assets and liabilities included as part of a disposal group.
Liquidity and Capital Resources
As of September 30, 2011, we had total current assets of $5,126, consisting entirely of cash. Our total current liabilities as of September 30, 2011 were $36,825, consisting of $22,825 in accounts payable and accrued expenses, and $14,000 in related party payables. Thus, we had a working capital deficit of $31,699 as of September 30, 2011.
Investing Activities consisted of $364 of cash held in the bank account of a subsidiary that was transferred to Mr. Woo as part of the transfer of the Company’s wholly-owned subsidiaries.
Financing Activities generated $14,000 in proceeds from a related party payable.
As of September 30, 2011, we have insufficient cash to operate our business at the current level for the next twelve months and insufficient cash to achieve our business goals. The success of our business plan during the next 12 months and beyond is contingent upon us obtaining additional financing. We hope to obtain business capital through the use of private equity fundraising or shareholders loans. We do not have any formal commitments or arrangements for the sales of stock or the advancement or loan of funds at this time. There can be no assurance that such additional financing will be available to us on acceptable terms, or at all.
Going Concern
Our financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. We have not yet established an ongoing source of revenues sufficient to cover our operating costs and allow us to continue as a going concern. Our ability to continue as a going concern is dependent on our obtaining adequate capital to fund operating losses until we become profitable. If we are unable to obtain adequate capital, we could be forced to cease operations.
In order to continue as a going concern, we will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet our minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that will be successful in accomplishing any of our plans.
Our ability to continue as a going concern is dependent upon our ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.
Off Balance Sheet Arrangements
As of September 30, 2011, there were no off balance sheet arrangements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
A smaller reporting company is not required to provide the information required by this Item.
5 |
Item 4. Controls and Procedures
As required by Rule 13a-15 under the Securities Exchange Act of 1934, we have carried out an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this quarterly report, being September 30, 2011. This evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer (who also serves as our Principal Financial and Accounting Officer).
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company’s reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to management, including our Chief Executive Officer/Principal Financial and Accounting Officer, to allow timely decisions regarding required disclosure.
Based upon that evaluation, including our Chief Executive Officer/Principal Financial and Accounting Officer, we have concluded that our disclosure controls and procedures were ineffective as of the end of the period covered by this annual report.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934). Management has assessed the effectiveness of our internal control over financial reporting as of September 30, 2011 based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. As a result of this assessment, management concluded that, as of September 30, 2011, our internal control over financial reporting was not effective. Our management identified the following material weaknesses in our internal control over financial reporting, which are indicative of many small companies with small staff: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.
We plan to take steps to enhance and improve the design of our internal control over financial reporting. During the period covered by this quarterly report on Form 10-Q, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we hope to implement the following changes during our fiscal year ending June 30, 2012: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The remediation efforts set out in (i) and (ii) are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.
PART II – OTHER INFORMATION
We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.
A smaller reporting company is not required to provide the information required by this Item.
6 |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None
Item 3. Defaults upon Senior Securities
None
Item 4. (Removed and Reserved)
None
7 |
SIGNATURES
In accordance with the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
GLOBAL KARAOKE NETWORK, INC. | |
Date: | November 14, 2011 |
By: /s/ Jason Sakowski | |
Jason Sakowski | |
President, Chief Executive Officer, and Director |
8 |
CERTIFICATIONS
I, Jason Sakowski, certify that;
1. | I have reviewed this quarterly report on Form 10-Q for the quarter ended September 30, 2011 of Global Karaoke Network, Inc. (the “registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: November 14, 2011 |
/s/Jason Sakowski |
By: Jason Sakowski |
Title: Chief Executive Officer |
CERTIFICATIONS
I, Jason Sakowski, certify that;
1. | I have reviewed this quarterly report on Form 10-Q for the quarter ended September 30, 2011 of Global Karaoke Network, Inc. (the “registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: November 14, 2011 |
/s/Jason Sakowski |
By: Jason Sakowski |
Title: Chief Financial Officer |
CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND
CHIEF FINANCIAL OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the quarterly Report of Global Karaoke Network, Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2011 filed with the Securities and Exchange Commission (the “Report”), I, Jason Sakowski, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1. The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the consolidated financial condition of the Company as of the dates presented and the consolidated result of operations of the Company for the periods presented.
By: | /s/Jason Sakowski |
Name: | Jason Sakowski |
Title: | Principal Executive Officer, Principal Financial Officer and Director |
Date: | November 14, 2011 |
This certification has been furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2011 | Jun. 30, 2011 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Perferred stock, issued | 0 | 0 |
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, issued | 469,440,000 | 469,440,000 |
Statements of Operations (Unaudited) (USD $) | 3 Months Ended | 49 Months Ended | |
---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | |
Income Statement [Abstract] | |||
REVENUES | |||
Professional fees | 27,160 | 22,177 | 240,837 |
General and administrative | 1,309 | 1,309 | |
Total Operating Expenses | 28,469 | 22,177 | 242,146 |
LOSS FROM CONTINUING OPERATIONS | (28,469) | (22,177) | (242,146) |
Loss from discontinued operations | (3,254) | (7,521) | (173,658) |
Loss from discontinued operations | (3,254) | (7,521) | (173,658) |
NET LOSS | $ (31,723) | $ (29,698) | $ (415,804) |
BASIC AND DILUTED LOSS PER COMMON SHARE | $ 0 | $ 0 | |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED | 469,440,000 | 469,440,000 |
Document and Entity Information | 3 Months Ended | |
---|---|---|
Sep. 30, 2011 | Nov. 09, 2011 | |
Document And Entity Information | ||
Entity Registrant Name | Global Karaoke Network, Inc. | |
Entity Central Index Key | 0001451797 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2011 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 469,440,000 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2011 |
Q,PYR-KM41RA=.%-'MJ5*3A$Q_./,,N%5WK
MTU6Q`VUT,\
"+ text.join( "
\n" ) +"
" + text[p] + "
\n"; } } }else{ formatted = '' + raw + '
'; } html = ''+ "\n"+''+ "\n"+''+ "\n"+' formatted: '+ ( this.Default == 'raw' ? 'as Filed' : 'with Text Wrapped' ) +''+ "\n"+' | '+ "\n"+'
'+ "\n"+' | '+ "\n"+' '+ "\n"+'
'+ "\n"+' | '+ "\n"+' '+ "\n"+'
GOING CONCERN | 3 Months Ended |
---|---|
Sep. 30, 2011 | |
Notes to Financial Statements | |
GOING CONCERN |
The Company's 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 has not yet established an ongoing source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern. The Company has incurred operating losses since inception. The Company has realized net losses from inception totaling $415,804. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.
In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
|
THE COMPANY | 3 Months Ended |
---|---|
Sep. 30, 2011 | |
Notes to Financial Statements | |
THE COMPANY |
Global Karaoke Network, Inc. (the Company) was incorporated as MojoRepublik, Inc. in the state of Delaware on September 10, 2007. On October 1, 2008, the Company changed its name to Republik Media and Entertainment, Ltd. The Company conducts business through its two wholly-owned subsidiaries, MojoRepublik LLC and LiveBrew.com, LLC. MojoRepublik, LLC, a wholly-owned subsidiary of the Company, was organized on June 14, 2007 in the State of Nevada. MojoRepublik, LLC was in the business of developing and promoting a website, www.mojorepublik.com. LiveBrew.com, LLC, a wholly-owned subsidiary of the Company, was organized on May 23, 2008 in the State of Nevada. LiveBrew.com, LLC was in the business of organizing and promoting live events.
On July 12, 2011, the Companys majority shareholder sold all of his shares in the Company to an individual who now holds 82.82% of the Companys total issued and outstanding stock.
As reported in the Form 8-K filed on August 4, 2011, effective August 3, 2011, and upon the prior approval of the Companys board of directors and a majority of our shareholders, the Companys corporate name was changed to Global Karaoke Network, Inc. Contemporaneously with the name change, the Company decided to stop pursuing its former business plans. The Company is currently undecided upon a new business plan but is considering a number of alternatives.
On September 26, 2011, the Company agreed to transfer all membership units owned in its two wholly-owned subsidiaries to a former officer of the Company who is also the Companys former majority stockholder in exchange for the assumption of all liabilities relating to the subsidiaries and for the cancellation of outstanding promissory notes.
|
DISCONTINUED OPERATIONS | 3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DISCONTINUED OPERATIONS | On September 26, 2011, the Company agreed to transfer all membership units owned in its two wholly-owned subsidiaries, MojoRepublik, LLC and LiveBrew.com, LLC, to a former officer of the Company who is also the Companys former majority stockholder in consideration for the cancellation of all outstanding promissory notes held by the former officer and the assumption of other liabilities related to the subsidiaries. The former officer agreed to cancel and/or assume a total of $364,721 which included accounts payable, accrued interest and notes payable. The former officer also received fixed assets which had no carrying value on the date of sale as well as the bank account of one subsidiary with cash of $364. The Company did not recognize a gain on the transaction and recognized the net book deficiency of the subsidiaries sold as an increase in the Companys additional paid-in-capital of $364,357.
In accordance with ASC 205, Presentation of Financial Statements, the Company has recorded the sale of the subsidiaries as a discontinuance of operations. As such, all results of operations related to the subsidiaries has been reclassified to loss from discontinued operations. Historical operations of the two subsidiaries have also been retroactively reclassified to loss from discontinued operations to be presented separately from results of operations from continuing operations. Comparative amounts of assets and liabilities of the subsidiary have also been reclassified within the Companys balance sheets as assets and liabilities of discontinued operations to be presented separately from assets and liabilities of continuing operations. Likewise, the statements of cash flows have been retroactively reclassified to separate cash flow activity related to the subsidiaries into cash flows from continuing operations and cash flows from discontinued operations.
Assets and liabilities of discontinued operations consisted of the following as of September 30, 2011 and June 30, 2011:
Loss from discontinued operations consisted of the following:
|
RELATED PARTY TRANSACTIONS | 3 Months Ended |
---|---|
Sep. 30, 2011 | |
Notes to Financial Statements | |
RELATED PARTY TRANSACTIONS |
Various expenses of the Company as well as loans for operating purposes have been paid for or made by officers of the Company. Loans payable related parties total $14,000 and $68,691 as of September 30, 2011 and June 30, 2011, respectively. On September 26, 2011, principle of $69,351 and accrued interest of $12,211 was cancelled by the buyer of the Companys two subsidiaries (see Note 4). These amounts included all notes payable and accrued interest outstanding as of June 30, 2010. During the three months ended September 30, 2011, the Company borrowed $14,000 from the Companys newly appointed CEO. The amounts do not bear interest, are due on demand and unsecured.
Effective July 12, 2011, office space is provided by the Companys sole officer and director. No rent is charged for the use of the space. |
NOTE PAYABLE | 3 Months Ended |
---|---|
Sep. 30, 2011 | |
Notes to Financial Statements | |
NOTE PAYABLE |
On August 1, 2007, the Company issued a $10,000 note payable. The full face value of this note and all related accrued interest through September 26, 2011 was assumed by the buyer of the Companys two subsidiaries (see Note 4). |
Statements of Cash Flows (Unaudited) (USD $) | 3 Months Ended | 49 Months Ended | |
---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | |
Statement of Cash Flows [Abstract] | |||
Net loss | $ (31,723) | $ (29,698) | $ (415,804) |
Accounts payable | 19,595 | 22,177 | 19,595 |
Net Cash Used in Continuing Operating Activities | (12,128) | (7,521) | (396,209) |
Net Cash Provided by Discontinued Operating Activities | 1,094 | 6,481 | 282,691 |
Cash included in the sale of discontinued operations | (364) | (364) | |
Net Cash Used in Continuing Investing Activities | (364) | (364) | |
Net Cash Used in Discontinued Investing Activities | (1,223) | ||
Proceeds from loan payable - related party | 14,000 | 14,000 | |
Net Cash Provided by Continuing Financing Activities | 14,000 | 14,000 | |
Net Cash Provided by Discontinued Financing Activities | 660 | 1,500 | 106,231 |
NET INCREASE IN CASH | 3,262 | 460 | 5,126 |
CASH AT BEGINNING OF PERIOD | 1,864 | 497 | |
CASH AT END OF PERIOD | 5,126 | 957 | 5,126 |
Interest | |||
Income Taxes | |||
Gain on the Sale of Subsidiaries | $ 364,357 | $ 364,357 |
BASIS OF PRESENTATION | 3 Months Ended |
---|---|
Sep. 30, 2011 | |
Notes to Financial Statements | |
BASIS OF PRESENTATION |
In the opinion of management, the accompanying unaudited interim financial statements contain all adjustments (which include only normal recurring adjustments) and disclosures necessary to present fairly the Companys financial position, results of operations, and cash flows at September 30, 2011 and for all periods presented herein.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These unaudited financial statements should be read in conjunction with the financial statements and related notes thereto included in the Company's Annual Report on Form 10-K/A for the fiscal year ended June 30, 2011, filed on October 4, 2011. The results of operations for the period ended September 30, 2011 is not necessarily indicative of the operating results for the full year.
The Company is currently in the development stage and has not realized significant sales through September 30, 2011. A development stage company is defined as one in which all efforts are devoted substantially to establishing a new business and even if planned principal operations have commenced, revenues are insignificant. |
Balance Sheets (USD $) | Sep. 30, 2011 | Jun. 30, 2011 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Cash | $ 5,126 | |
Assets of discontinued operations - current | 1,864 | |
Total Current Assets | 5,126 | 1,864 |
TOTAL ASSETS | 5,126 | 1,864 |
Accounts payable | 22,825 | |
Loan payable - related party | 14,000 | |
Liabilities of discontinued operations - current | 366,197 | |
Total Current Liabilities | 36,825 | 366,197 |
TOTAL LIABILITIES | 36,825 | 366,197 |
Preferred stock, $0.00001 par value, 10,000,000 shares authorized, -0- shares issued and outstanding | ||
Common stock, $0.00001 par value, 500,000,000 shares authorized, 469,440,000 shares issued and outstanding | 4,694 | 4,694 |
Additional paid-in capital | 379,411 | 15,054 |
Deficit accumulated during the development stage | (415,804) | (384,081) |
Total Stockholders' Deficit | (31,699) | (364,333) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 5,126 | $ 1,864 |