Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "could", "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable laws, including the securities laws of the United States, we do not intend to update any of the forward-looking statements so as to conform these statements to actual results.
Our unaudited financial statements are stated in U.S. dollars and are prepared in accordance with generally accepted accounting principles in the United States. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report.
As used in this current report and unless otherwise indicated, the terms “we”, “us”, “our” and “our company” mean Media Analytics Corporation, a Florida corporation, unless otherwise indicated.
Corporate Overview
We were incorporated in the State of Florida on March 16, 2011 under the name FanSport, Inc. Our company's goal was to develop social media tools and solutions to enable advertisers, publishers and agencies in the North American and United Kingdom (including the Republic of Ireland) markets to gather deep social intelligence, generate true engagement and simplify promotional management. Our company was the official reseller of Klarity for the U.S. and U.K. markets. Klarity provides detailed comparative metrics from the widest range of social platforms, and provides the added uniqueness for western marketers to gain insights into the social behavior of Asian consumers.
On January 31, 2013, our board of directors approved a 20 for 1 forward stock split of our issued and outstanding common stock. As disclosed in the Information Statement on Schedule 14C as filed with the SEC on February 12, 2013, on February 11, 2013, our majority shareholder consented to this action. In conjunction therewith, we filed Articles of Amendment to our Articles of Incorporation with the Secretary of State of Florida, which became effective on February 27, 2013. The forward split became effective with the Over-the-Counter Bulletin Board at the opening of trading on February 25, 2013.
On June 17, 2013, our board of directors and a majority of our stockholders approved a change of name of our company from FanSport, Inc. to Media Analytics Corporation. Articles of Amendment to Articles of Incorporation were filed with the Florida Secretary of State on August 28, 2013, with an effective date of September 3, 2013.
The name change was approved by the Financial Industry Regulatory Authority (FINRA) and became effective with the Over-the-Counter Bulletin Board at the opening of trading on September 3, 2013 under the symbol “MEDA”. Our CUSIP number is 584393102.
On October 3, 2014, our board of directors approved a forward stock split by way of a stock dividend. In connection with the stock split, shareholders on record as of November 10, 2014, received two (2) shares of common stock for each one (1) share of common stock held on November 10, 2014. The pay-out date as approved by our board of directors and Financial Industry Regulatory Authority was November 10, 2014. Upon completion of the stock split, our issued and outstanding shares increased from 100,000,000 shares of common stock to 300,000,000 shares of common stock with a par value of $0.0001.
On February 26, 2016, our company’s board of directors, and a majority of our stockholders approved by resolution, a reverse stock split of our authorized and issued and outstanding shares of common stock on a thirty (30) old for one (1) new basis. Articles of Amendment to the Articles of Incorporation for the reverse stock split were filed and became effective with the Florida Secretary of State on March 22, 2016. Consequently, our authorized share capital decreased from 500,000,000 shares of common stock to 16,666,667 shares of common stock and correspondingly, our issued and outstanding shares of common stock decreased from 300,000,000 to 10,000,629 shares of common stock, all with a par value of $0.0001. The reverse split became effective with the OTC Markets at the opening of trading on March 30, 2016. Our CUSIP number is 584393 201.
Our business and registered office is located at 800 W. El Camino Real, Suite 180, Mountain View, California, 94040, our telephone number is 650 903-2224.
Our Current Business
It was the intention of our former management to introduce the Klarity Analytical Dashboard to the North American and United Kingdom marketplaces, where we had the exclusive license and reselling agreement. This would have allowed users to have access to in depth insights into western and Asian social behaviour. We are also looking to develop relationships with other analytical technology providers to provide an entire suite of marketing solutions to our clients.
We have no revenues, have achieved losses since inception, have no operations, have been issued a going concern opinion and rely upon the sale of our securities to fund operations.
On September 11, 2013, our company entered into a licensing agreement with Social Media Broadcasts (SMB) Limited wherein our company had the right to the sales and marketing of the Klarity Analytic Dashboard in Canada, the United States and the United Kingdom (including the Republic of Ireland) for a period of two years. Pursuant to the terms of the licensing agreement our company was required to pay to Social Media the following license fees:
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(a)
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an initial non-refundable fixed fee of US$300,000;
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(b)
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an annual technical support fee of US$120,000; and
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(c)
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a 30% royalty payment on all sales of Klarity.
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On September 17, 2013, our company and Social Media amended the terms of the licensing agreement with the following changes:
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(a)
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an initial non-refundable fixed fee of US$300,000, which has been negotiated to be payable in installments over a 3-year period against technical deliverables by Social Media to our company;
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(b)
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an annual technical support fee of US$60,000, which includes product customization, enhancements and upgrades, as well as client technical support and servicing; and
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(c)
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a 20% royalty payment on all sales of Klarity Analytic Dashboard.
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Our company has been unable to make any of the foregoing payments as required under the agreement. As a result, the parties have consented to a cancellation and termination of the licensing agreement. We are currently negotiating a distribution agreement with Social Media, as well as investigating additional opportunities in our efforts to maintain and enhance shareholder value.
Results of Operations
The following summary of our results of operations should be read in conjunction with our unaudited interim financial statements for the three and six months ended September 30, 2016 and 2015.
Expenses
Our operating results for the three and six months ended September 30, 2016 and 2015 are summarized as follows:
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Three Months Ended
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Six Months Ended
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September 30,
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September 30,
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2016
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2015
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2016
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2015
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Filing Fees
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$
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2,370
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$
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458
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2,370
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458
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License fees
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$
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-
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$
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15,000
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-
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30,000
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Transfer agent fees
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$
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-
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$
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2,150
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-
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2,150
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Professional fees
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$
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3,944
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$
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4,553
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8,871
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8,280
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Net Loss
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$
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(6,314
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)
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$
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(22,161
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)
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(11,241
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)
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(40,888
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)
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Total expenses for the three months ended September 30, 2016 were $6,314 resulting in a net loss for the period of $6,314 compared to a net loss of $22,161 for the three months ended September 30, 2015. The decrease in expenses was due to inactivity. Total expenses for the six months ended September 30, 2016 were $11,241 resulting in a net loss for the period of $11,241 compared to a net loss of $40,888 for the six months ended September 30, 2015. The decrease in expenses was due to inactivity.
Liquidity and Capital Resources
Working Capital
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At
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At
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September 30,
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March 31,
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2016
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2016
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Current Assets
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$
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-
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$
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3,211
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Current Liabilities
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$
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137,049
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$
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129,019
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Working Capital
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$
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(137,049
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)
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$
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(125,808
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)
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Cash Flows
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Six Months
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Six Months
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Ended
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Ended
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September 30,
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September 30,
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2016
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2015
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Net Cash Provided by (Used in) Operating Activities
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$
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(3,211
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)
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$
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3,577
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Net Cash Provided by Investing Activities
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$
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Nil
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$
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Nil
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Net Cash Provided by Financing Activities
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$
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Nil
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$
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Nil
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Net Increase (Decrease) in Cash During the Period
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$
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(3,211
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)
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$
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3,577
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At September 30, 2016 we had working capital deficit of $137,049 as compared to working capital deficit of $125,808 at March 31, 2016.
Net cash used in operating activities for the six months ended September 30, 2016 was $3,211 as compared to net cash provided by operating activities of $3,577 for the six months ended September 30, 2015.
Going Concern
Our financial statements for the six month period ended September 30, 2016 have been prepared on a going concern basis and contain an additional explanatory paragraph which identifies issues that raise substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.
We have not generated revenues, have achieved losses since our inception, and rely upon the sale of our common stock and proceeds from shareholder loans to fund our operations. If we are unable to raise equity or secure alternative financing, we may not be able to continue our operations and our business plan may fail.
If our operations and cash flow improve, management believes that we can continue to operate. However, no assurance can be given that management's actions will result in profitable operations or an improvement in our liquidity situation. The threat of our ability to continue as a going concern will cease to exist only when our revenues have reached a level able to sustain our business operations.
Off-Balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.
Critical Accounting Policies
Accounting Basis
Our financial statements are prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America. Our company’s fiscal year end is March 31.
Cash and Cash Equivalents
Cash and cash equivalents are reported in the balance sheet at cost, which approximates fair value. For the purpose of the financial statements cash equivalents include all highly liquid investments with an original maturity of three months or less when purchased.
Earnings (Loss) per Share
Our company adopted FASB ASC 260,
Earnings per Share
. Basic earnings (loss) per share is calculated by dividing our company’s net income available to common shareholders by the weighted average number of common shares outstanding during the year. Diluted earnings (loss) per share is calculated by dividing our company’s net loss available to common shareholders by the diluted weighted average number of shares outstanding during the period. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted as of the first of the year for any potentially dilutive debt or equity. There were no diluted or potentially diluted shares outstanding for all periods presented.
Dividends
Our company has not adopted any policy regarding payment of dividends. On October 3, 2014, our board of directors approved a forward stock split by way of a stock dividend of two (2) authorized but unissued shares of our common stock on each one (1) issued and outstanding share of its common stock held by shareholders of record as of November 10, 2014. The payment date for the stock dividend was November 10, 2014, as determined by the Financial Industry Regulatory Authority (FINRA). Upon the payment of the stock dividend, our company had 300,000,000 issued and outstanding shares of common stock, which represents an increase of 200,000,000 shares over its prior total of 100,000,000 issued and outstanding shares of common stock. The split is reflected retrospectively in the accompanying financial statements.
Income Taxes
Our company adopted FASB ASC 740,
Income Taxes
, at its inception. Under FASB ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit carryforwards, and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. The components of the deferred tax assets and liabilities are individually classified as current and non-current based on their characteristics. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. No deferred tax assets or liabilities were recognized as of September 30, 2016 or March 31, 2016, respectively.
Fair Value of Financial Investments
The fair value of cash and cash equivalents, accounts payable, accrued liabilities, and notes payable approximates the carrying amount of these financial instruments due to their short-term maturity.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires 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 revenue and expenses during the reporting period. Actual results could differ from those estimates.
Related Parties
Related parties, which can be a corporation, individual, investor or another entity are considered to be related if the party has the ability, directly or indirectly, to control the other party or exercise significant influence over our company in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence. Our company has these relationships.
Recent Accounting Pronouncements
Our company has reviewed the Accounting Standards Updates through ASU No. 2016-17 and these updates have no current applicability to our company or their effect on the financial statements would not have been significant.