UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10–Q/A

  Amendment No. 1

 

(Mark One)

 

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended January 31, 2016

 

Or

 

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ________________ to ________________

 

Commission file number: 000-54718

 

New Media Insight Group, Inc.

(Exact name of registrant as specified in its charter)

 

Nevada   27-2235001
(State or other jurisdiction of
incorporation or organization)
  (I.R.S. Employer
Identification No.)
     
28202 N. 58 th Street
Cave Creek, AZ
  85331
(Address of principal executive offices)   (Zip Code)

 

  (480) 275-2294  
  (Registrant’s telephone number, including area code)  

 

N/A
(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 registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [  ] No [X]

 

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 [  ] No [X]

 

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

 

Large accelerated filer [  ] Accelerated filer [  ]    
           
Non-Accelerated filer [  ] Smaller reporting company [X] Emerging growth company [  ]
(Do not check if a smaller reporting company)      

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]

 

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

 

As of September 19, 2017, there were 38,899,269  shares of registrant’s common stock outstanding.

 

 

 

 
   

 

EXPLANATORY NOTE

 

This Amendment No. 1 on Form 10-Q/A (this “Amendment”) amends the Quarterly Report of New Media Insight Group, Inc. (the “Company”) on Form 10-Q for the three and nine months ended January 31, 2016, as filed with the Securities and Exchange Commission on June 13, 2017 (the “Original Filing”). This Amendment is being filed for the purpose of restating the Company’s balance sheet, statement of operations and cash flow statement to correct an accounting error in determining the fair value of embedded derivatives and associated debt discount on a convertible note, as described in Note 10 to the financial statements. The net effect of which was a decrease of $26,679 in reported net income for the nine months ended January 31, 2016. In addition, the Overview section of Management’s Discussion and Analysis of Financial Condition and Results of Operations has been revised. We have not updated the information contained herein for events occurring subsequent to June 13, 2017, the filing date of the Original Filing.

 

The following Items have been amended as a result of this restatement:

 

· Part I, Item 1, Financial Statements
· Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

The Company’s independent registered public accounting firm has reviewed the unaudited financial statements included in this Amendment.

 

 
     

 

TABLE OF CONTENTS

 

PART I. FINANCIAL INFORMATION      
         
  ITEM 1. Financial Statements   3
         
    Condensed balance sheets as of January 31, 2016 (unaudited) and April 30, 2015   4
         
    Condensed statements of operations for the three and nine months ended January 31, 2016 and 2015 (unaudited)   5
         
    Condensed statement of stockholders’ deficit for the nine months ended January 31, 2016 (unaudited)   6
         
    Condensed statements of cash flows for the nine months ended January 31, 2016 and 2015 (unaudited)   7
         
    Notes to condensed financial statements (unaudited)  

8-16

         
  ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 17-21
  ITEM 3. Quantitative and Qualitative Disclosures about Market Risk   22
  ITEM 4. Controls and Procedures  

22

     
PART II. OTHER INFORMATION      
         
  ITEM 1. Legal Proceedings  

23

  ITEM 1A. Risk Factors   23
  ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds   23
  ITEM 3. Defaults Upon Senior Securities   23
  ITEM 4. Mine Safety Disclosures   23
  ITEM 5. Other Information   23
  ITEM 6. Exhibits   23
         
  SIGNATURES    24

 

  2  

 

 

PART I – FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“ SEC ”), and should be read in conjunction with the audited financial statements and notes thereto contained in our company’s annual report on Form 10-K filed with the SEC on August 13, 2015. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the periods presented have been reflected herein. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year ending April 30, 2016.

 

  3  

 

 

NEW MEDIA INSIGHT GROUP, INC.

CONDENSED BALANCE SHEETS

 

    January 31, 2016     April 30, 2015  
   

(unaudited)

(Restated)


       
ASSETS                
Current assets:                
Cash   $ 832     $ 15,056  
Total current assets     832       15,056  
                 
Property and equipment, net     959       1,237  
                 
Total Assets   $ 1,791     $ 16,293  
                 
LIABILITIES AND STOCKHOLDERS’ DEFICIT                
Current liabilities:                
Accounts payable and accrued expenses   $

42,759

    $ 18,171  
Due to related party     24,313       8,632  
Convertible promissory note    

41,092

      60,500  
Derivative liabilities    

127,129

      1,768,464  
Total current liabilities    

235,293

      1,855,767  
                 
Stockholders’ deficit:                
Preferred stock, $0.001 par value; 25,000,000 shares authorized, none issued and outstanding     -       -  
Common stock, $0.001 par value, 850,000,000 shares authorized, 31,099,267 and 29,768,750 shares issued and outstanding as of January 31, 2016 and April 30, 2015, respectively     31,099       29,769  
Additional paid in capital     220,635       (721,984 )
Accumulated deficit   $

( 485,236

)     (1,147,259 )
Total stockholders’ deficit   $

( 233,502

)     (1,839,474 )
                 
Total liabilities and stockholders’ deficit   $ 1,791     $ 16,293  

 

The accompanying notes are an integral part of these unaudited condensed financial statements

 

  4  

 

 

NEW MEDIA INSIGHT GROUP, INC.

CONDENSED STATEMENTS OF OPERATIONS

(unaudited)

 

    Three months ended January 31,     Nine months ended January 31,  
    2016     2015     2016     2015  
    (Restated)           (Restated)        
REVENUES   $ -     $ -     $ -     $ -  
                                 
OPERATING EXPENSES:                                
Selling, general and administrative     622       56,546       54,971       205,562  
Depreciation and amortization     93       25,133       278       75,398  
Total operating expenses     715       81,679       55,249       280,960  
                                 
Net loss from operations     (715 )     (81,679 )     (55,249 )     (280,960 )
                                 
OTHER INCOME (EXPENSES):                                
Interest expense     (14,253 )     -       (130,166 )     -  
Change in fair value of derivative liabilities     356,054       -       847,438       -  
Total other income (expense)     341,801       -       717,272       -  
                                 
NET INCOME (LOSS)   $ 341,085     $ (81,679 )   $ 662,023     $ (280,960 )
                                 
Basic income (loss) per common share   $ 0.01     $ (0.00 )   $ 0.02     $ (0.01 )
                                 
Diluted income (loss) per common share   $ 0.01     $ (0.00 )   $ 0.01     $ (0.01 )
                                 
Weighted average number of common shares outstanding-basic     31,099,267       29,768,750       30,690,418       29,768,750  
                                 
Weighted average number of common shares outstanding-diluted     46,499,115       29,768,750       46,090,266       29,768,750  

 

 

The accompanying notes are an integral part of these unaudited condensed financial statements

 

  5  

 

 

NEW MEDIA INSIGHT GROUP, INC.

CONDENSED STATEMENT OF STOCKHOLDERS’ DEFICIT

FOR THE NINE MONTHS ENDED JANUARY 31, 2016

(unaudited)

(Restated)

 

                            Additional              
    Preferred stock     Common stock     Paid in     Accumulated        
    Shares     Amount     Shares     Amount     Capital     Deficit     Total  
Balance, April 30, 2014     -     $ -       29,768,750     $ 29,769     $ 1,159,609     $ (911,471 )   $ 277,907  
Derivative liability     -       -       -       -       (1,881,593 )     -       (1,881,593 )
Net loss     -       -       -       -       -       (235,788 )     (235,788 )
Balance, April 30, 2015     -     $ -       29,768,750     $ 29,769     $ (721,984 )   $ (1,147,259 )   $ (1,839,474 )
Common stock issued in as commitment fees     -       -       531,368       531       63,180       -       63,711  
Common stock issued in settlement of convertible debt     -       -       666,667       667       19,333       -       20,000  
Sale of common stock     -       -       132,482       132       5,285       -       5,417  
Reclassify fair value of derivative liability to equity upon expiry of line of credit     -       -       -       -       854,821       -       854,821  
Net income     -       -       -       -       -      

662,023

     

662,023

 
Balance, January 31, 2016     -     $ -       31,099,267     $ 31,099     $ 220,635     $

(485,236

)   $

(233,502

)

 

The accompanying notes are an integral part of these unaudited condensed financial statements

 

  6  

 

 

NEW MEDIA INSIGHT GROUP, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(unaudited)

 

    Nine months ended January 31,  
    2016     2015  
    (Restated)        
CASH FLOWS FROM OPERATING ACTIVITIES:                
Net income (loss) for the period   $ 662,023     $ (280,960 )
Adjustments to reconcile net income (loss) to net cash used in operating activities:                
Depreciation and amortization     278       75,398  
Amortization of debt discounts     47,611       -  
Common stock issued as commitment fee     63,711       -  
Change in fair value of derivative liabilities     (847,438 )     -  
Changes in operating assets and liabilities:                
Accounts payable and accrued expenses     24,589       4,073  
Net cash used in operating activities     (35,322 )     (201,489 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES:                
Advances from (payments to) related party     15,681       (4,317 )
Sale of common stock     5,417       -  
Net cash provided by (used in) financing activities     21,098       (4,317 )
                 
Net decrease in cash     (14,224 )     (205,806 )
                 
Cash-beginning of period     15,056       210,099  
Cash-end of period   $ 832     $ 4,293  
                 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION                
Interest paid   $ -     $ -  
Income taxes paid   $ -     $ -  
                 
Non-cash investing and financing activities:                
Common stock issued in settlement of convertible note payable   $ 10,000     $ -  
Reclassify derivative liability to equity upon expiry of line of credit   $ 854,821     $ -  

 

The accompanying notes are an integral part of these unaudited condensed financial statements

 

  7  

 

 

NEW MEDIA INSIGHT GROUP, INC.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

JANUARY 31, 2016

(unaudited)

 

NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS

 

New Media Insight Group, Inc. (the “Company”) was incorporated on March 29, 2010 in the State of Nevada, U.S.A. Our fiscal year end is April 30. Our administrative offices are located in Cave Creek, AZ.

 

The Company is a pre revenue stage company and operates as an internet marketing business providing clients with the latest in new media and mobile / smart phone payment and advertising solutions. The Company is continuing to pursue and expand upon the same business; however, it is in the process of significantly enhancing its product and service offering and is developing new and proprietary technology in the area of mobile payments and online monetization. The Company intends to specialize in developing Internet and mobile marketing, loyalty, and communication solutions. The Company’s mission is to help local merchants connect, communicate and transact with their customers in a more effective way.

 

The Company has devoted substantially all of its efforts to raising capital, planning and implementing the principal operations. The Company may continue to incur significant operating losses and to generate negative cash flow from operating activities. 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.

 

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Interim Financial Statements

 

The interim financial information referred to above has been prepared and presented in conformity with accounting principles generally accepted in the United States of America (GAAP) applicable to interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. For further information regarding the Company’s significant accounting policies, refer to the audited financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended April 30, 2015 filed with the Securities and Exchange Commission on August 13, 2015.

 

Use of Estimates

 

The preparation of financial statements in conformity with GAAP 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 amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s periodic filings with the Securities and Exchange Commission include, where applicable, disclosures of estimates, assumptions, uncertainties and markets that could affect the financial statements and future operations of the Company.

 

  8  

 

 

Recent Accounting Pronouncements

 

There are various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company’s financial position, results of operations or cash flows.

 

NEW MEDIA INSIGHT GROUP, INC.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

JANUARY 31, 2016

(unaudited)

 

NOTE 3. GOING CONCERN AND MANAGEMENT’S LIQUIDITY PLANS

 

As of January 31, 2016, the Company had cash of $832 and working capital deficit (current liabilities in excess of current assets) of $234,461 During the nine months ended January 31, 2016, the Company used net cash in operating activities of $35,322. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management believes that the Company does not have sufficient funds to meet its funding requirements.

 

The Company’s primary source of operating funds since inception has been cash proceeds from private placements of common stock, notes payable and from advances from related parties. The Company has experienced net losses and negative cash flows from operations since inception and expects these conditions to continue for the foreseeable future. The Company has stockholders’ deficiencies at January 31, 2016 and requires additional financing to fund future operations. Further, the Company does not have any commercial products available for sale and there is no assurance that if approval of their products is received that the Company will be able to generate cash flow to fund operations.

 

Accordingly, the accompanying condensed financial statements have been prepared in conformity with GAAP, which contemplates continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable or settlement values. The condensed financial statements do not include any adjustment that might result from the outcome of this uncertainty.

 

NOTE 4. CAPITAL STOCK

 

Authorized Stock

 

The Company has authorized 850,000,000 common shares and 25,000,000 preferred shares, both with a par value of $0.001 per share. Each common share entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought.

 

Share Issuance

 

On December 10, 2014, the Company entered into an equity purchase agreement with Premier Venture Partners. Pursuant to the terms of the Equity Purchase Agreement, Premier Venture committed to purchase up to $2,000,000 of our common stock during the Open Period. From time to time during the Open Period, the Company may deliver a drawdown notice to Premier Venture which states the dollar amount that the Company intends to sell to Premier Venture on a date specified in the put notice (the “ Put Notice ”). The maximum investment amount per notice shall not exceed the lesser of (i) 200% of the average daily trading volume of our common stock on the five trading days prior to the day the Put Notice is received by Premier Venture and (ii) 110% of any previous put amount during the maximum thirty-six (36) month period (however the amount for the preceding (ii) shall never be less than 70,000 shares). The total purchase price to be paid, in connection to the Put Notice, by Premier Venture shall be calculated at a thirty percent (30%) discount to the lowest individual daily volume weighted average price of the common stock of our company during such trading day (“ VWAP ”) of during the five (5) consecutive trading days immediately after the applicable date of the Put Notice, notwithstanding certain provisions pursuant to the Equity Purchase Agreement, less six hundred dollars ($600).

 

  9  

 

 

NEW MEDIA INSIGHT GROUP, INC.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

JANUARY 31, 2016

(unaudited)

 

The Company registered 16,397,960 shares in accordance with a certain Registration Rights Agreement and Equity Purchase Agreement, each dated December 10, 2014. The percentage of the total outstanding common stock registered for resale by the selling security holders was 35.5%, based on the 46,116,621 common shares outstanding as of October 31, 2015.

 

In consideration for the execution and delivery of the Equity Purchase Agreement by Premier Venture, during the nine months ended January 31, 2016, the Company issued Premier Venture 71,429 shares of common stock as initial commitment and 459,939 shares of common stock as additional commitment and charged the fair value of $63,711 to operations as interest expense.

 

On May 1, 2015, the Board of Directors authorized the issuance of 37,056 shares of common stock for cash of $1,816. The shares are fully paid for and non-assessable and are being issued pursuant to the equity purchase agreement with the Premier Venture Partners, LLC dated December 10, 2014 and the 1st Put Notice dated May 1, 2015.

 

On May 8, 2015, the Board of Directors authorized the issuance of 37,336 shares of common stock for cash of $1,568. The shares are fully paid for and non-assessable and are being issued pursuant to the equity purchase agreement with the Premier Venture Partners, LLC dated December 10, 2014 and the 2nd Put Notice dated May 8, 2015.

 

On June 3, 2015, the Board of Directors authorized the issuance of 58,090 shares of common stock for cash of $2,033. The shares are fully paid for and non-assessable and are being issued pursuant to the equity purchase agreement with the Premier Venture Partners, LLC dated December 10, 2014 and the 3rd Put Notice dated June 3, 2015.

 

On October 12, 2015, the Company issued 666,667 shares of its common stock in settlement of $10,000 of convertible notes payable.

 

There were 31,099,267 and 29,768,750 common shares issued and outstanding at January 31, 2016 and April 30, 2015 respectively. There are no preferred shares outstanding.

 

NOTE 5. PROPERTY AND EQUIPMENT

 

The following table summarizes the property and equipment.

 

    January 31, 2016     April 30, 2015  
Property and equipment   $ 2,079     $ 2,079  
Accumulated depreciation     (1,120 )     (842 )
    $ 959     $ 1,237  

 

During the three and nine months ended January 31, 2016, the depreciation was $93 and $278, respectively.

 

During the three and nine months ended January 31, 2015, the depreciation was $133 and $398, respectively.

 

  10  

 

 

NEW MEDIA INSIGHT GROUP, INC.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

JANUARY 31, 2016

(unaudited)

 

NOTE 6. OPTIONS

 

The options have been granted in conjunction with an employment agreement. The following table summarizes the options at January 31, 2016:

 

Exercise

Prices

   

Number

of Stock

Options

Outstanding

   

Weighted

Average

Remaining

Contractual

Life (Years)

   

Weighted

Average

Exercise
Price

   

Actual

Number

Exercisable

   

Weighted

Average

Exercise Price

 
$ 0.75       2,013,500       1.38     $ 0.75       504,500     $ 0.75  
          2,013,500       1.38     $ 0.75       504,500     $ 0.75  

 

Transactions involving the Company’s option issuance are summarized as follows:

 

   

Number of

Stock Options

   

Weighted

Average Price

Per Share

 
Outstanding at April 30, 2015     2,013,500     $ 0.75  
Granted     -       -  
Exercised     -       -  
Cancel or expired     -       -  
Outstanding at January 31, 2016     2,013,500     $ 0.75  
Options yet to be vested     1,509,000          
Options vested at January 31, 2016     504,500          

 

NOTE 7. WARRANTS

 

The warrants were issued in conjunction with certain common stock offerings. Transactions involving the Company’s warrants issuance are summarized as follows:

 

   

Number of

Warrants

   

Weighted

Average Price

Per Share

 
Outstanding at April 30, 2015     1,100,000     $ 1.00  
Granted     -       -  
Exercised     -       -  
Cancel or expired     (1,100,000 )   $ 1.00  
Outstanding at January 31, 2016     -       -  

 

  11  

 

 

NEW MEDIA INSIGHT GROUP, INC.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

JANUARY 31, 2016

(unaudited)

 

NOTE 8. DERIVATIVE LIABILITY

 

The Company reviews the terms of equity purchase agreements and the terms of convertible debt issues to determine whether there are embedded derivative instruments, including embedded conversion options, which are required to be bifurcated and accounted for separately as derivative financial instruments. In circumstances where the host instrument contains more than one embedded derivative instrument, including the conversion option, that is required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument Bifurcated embedded derivatives are initially recorded at fair value and are then revalued at each reporting date with changes in the fair value reported as non-operating income or expense. When the equity or convertible debt instruments contain embedded derivative instruments that are to be bifurcated and accounted for as liabilities, the total proceeds received are first allocated to the fair value of all the bifurcated derivative instruments. The remaining proceeds, if any, are then allocated to the host instruments themselves, usually resulting in those instruments being recorded at a discount from their face value. The discount from the face value of the convertible debt, together with the stated interest on the instrument, is amortized over the life of the instrument through periodic charges to interest expense, using the effective interest method.

 

Equity Purchase Agreement with Premier Venture Partners

 

On December 10, 2014, the Company entered into an equity purchase agreement with Premier Venture Partners. Pursuant to the terms of the Equity Purchase Agreement, Premier Venture committed to purchase up to $2,000,000 of our common stock during the Open Period. From time to time during the Open Period, the Company may deliver a drawdown notice to Premier Venture which states the dollar amount that the Company intends to sell to Premier Venture on a date specified in the put notice (the “Put Notice”). The maximum investment amount per notice shall not exceed the lesser of (i) 200% of the average daily trading volume of our common stock on the five trading days prior to the day the Put Notice is received by Premier Venture and (ii) 110% of any previous put amount during the maximum thirty-six (36) month period (however the amount for the preceding (ii) shall never be less than 70,000 shares). The total purchase price to be paid, in connection to the Put Notice, by Premier Venture shall be calculated at a thirty percent (30%) discount to the lowest individual daily volume weighted average price of the common stock of our company during such trading day (“VWAP”) of during the five (5) consecutive trading days immediately after the applicable date of the Put Notice, notwithstanding certain provisions pursuant to the Equity Purchase Agreement, less six hundred dollars ($600).

 

There was a derivative in the Equity Purchase Agreement. The Company evaluated the terms of the conversion features of the equity purchase agreement in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging - Contracts in Entity’s Own Stock and determined it is indexed to the Company’s common stock and that the conversion features meet the definition of a liability and therefore bifurcated the conversion feature and accounted for it as a separate derivative liability.

 

At expiry, the Company transferred the fair value of the derivative of $854,821 from liability to equity determined by using the following Black-Scholes assumptions:

 

Stock price   $0.007  
Expected term     0.01 year  
Expected volatility     237.7%  
Risk free interest rate     0.019%  
Dividend yield     0  

 

  12  

 

 

NEW MEDIA INSIGHT GROUP, INC.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

JANUARY 31, 2016

(unaudited)

 

The continuity schedule of this derivative is as follows:

 

Balance -April 30, 2015   $ 1,768,464  
Fair Value Adjustment     (913.643 )
Transferred to equity upon expiry of equity purchase agreement     (854,821 )
Balance – January 31, 2016   $ -  

 

Convertible Promissory Note with Iconic Holdings

 

On April 9, 2015, we entered in a note purchase agreement with Iconic Holdings, LLC (“Iconic”). Pursuant to this agreement, we sold a convertible promissory note representing the sum of $60,500 to Iconic for $50,000 in cash, $5,000 for due diligence services, and $5,500 as an original issue discount. The note is due April 9, 2016, carries 10% interest per annum and may be converting into common shares of our company at a conversion price of 60% of the lowest trading price of our common stock during the 15 consecutive trading days prior to the date on which holder elects to convert all or part of the note. The carrying value of the note of $41,092 on the accompanying balance sheet at January 31, 2016 is net of unamortized debt discount of $9.408. During the nine months ended January 31, 2016, the Company amortized $51,092 to current period interest expense. As of the date of this filing, the note is in default.

 

There is a derivative in the loan agreement. Because the warrant values exceeded the note values after the beneficial conversion feature discount, the warrants have been bifurcated out and recorded separately. The initial value was the fair value less the fair value of the debt discount. The difference between the amortized fair value and the revalued fair value at each reporting period is recorded as a derivative liability. This derivative liability will change every reporting period based on the current market conditions.

 

The Company used the following Black-Scholes assumptions in arriving at the fair value of the derivative.

 

Stock price   $ 0.009  
Expected term    

1.67 year

 
Expected volatility     231.1.7 %  
Risk free interest rate    

0.76 %

 
Dividend yield     0  

 

The continuity schedule of this derivative is as follows:

 

Balance -April 30, 2015   $ -  
Derivative Liability     70,924  
Transfer to (from) due to conversion of note payable     (10,000 )
Fair Value Adjustment    

66,205

Balance – January 31, 2016   $

127,129

 

 

NOTE 9. DUE TO RELATED PARTY

 

As at January 31, 2016 and April 30, 2015, the Company was obligated to a director, who is also an officer, for a non-interest bearing demand loan with a balance of $24,313 and $8,632, respectively. Interest is immaterial.

 

  13  

 

 

NEW MEDIA INSIGHT GROUP, INC.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

JANUARY 31, 2016

(unaudited)

 

NOTE 10. RESTATEMENT

 

The accompanying condensed balance sheet as of January 31, 2016, statement of operations for the three and nine months ended January 31, 2016 and the condensed statement of cash flows for the nine months ended January 31, 2016 has been restated for the purpose of correcting an error in determining the fair value of embedded derivatives and associated debt discount on a convertible note.

 

Accordingly, the Company restated the condensed balance sheet as of January 31, 2016, statement of operations for the three and nine months ended January 31, 2016 and the condensed statement of cash flows for the nine months ended January 31, 2016 by disclosing this error in this Form 10-Q/A.

 

The changes in the reported amounts are summarized in the following reconciliation of the Company’s restated condensed balance sheet as of October 31, 2015:

 

NEW MEDIA INSIGHT GROUP, INC.

CONDENSED BALANCE SHEET

JANUARY 31, 2016

(unaudited)

 

      (As restated)       (As reported)  
                 
ASSETS                
Total assets (unchanged)   $ 1,791     $ 1,791  
                 
LIABILITIES AND STOCKHOLDERS' DEFICIT                
Current liabilities:                
Accounts payable and accrued expenses (minor rounding)     42,759       42,760  
Due to related party     24,313       24,313  
Convertible promissory note     41,092       50,500  
Derivative liability     127,129       91,041  
Total current liabilities     235,293       208,614  
                 
Stockholders’ deficit     (233,502 )     (458,557 )
                 
Total liabilities and stockholders’ deficit   $ 1,791     $ 1,791  

 

NEW MEDIA INSIGHT GROUP, INC.

 CONDENSED STATEMENT OF OPERATIONS

THREE MONTHS ENDED JANUARY 31, 2016

(unaudited)

 

      (As restated)       (As reported)  
                 
Operating expenses (minor rounding)   $ 716     $ 715  
                 
Other income (expense)                
Interest expense     (14,253 )     (1,524 )
Change in fair value of derivative liability     356,054       369,868  
Net income   $ 341,085     $ 367,629  
                 
Basic income per common share   $ 0.01     $ 0.01  
Diluted income per common share   $ 0.01     $ 0.1  

 

  14  

 

 

NEW MEDIA INSIGHT GROUP, INC.

CONDENSED STATEMENT OF OPERATIONS

NINE MONTHS ENDED JANUARY 31, 2016

(unaudited)

 

    (As restated)     (As reported)  
                 
Operating expenses   $ 55,249     $ 55,249  
                 
Other income (expense)                
Interest expense     (130,166 )     (139,574 )
Change in fair value of derivative liability     847,438       883,525  
Net income   $ 662,023     $ 688,702  
                 
Basic income per common share   $ 0.02     $ 0.02  
Diluted income per common share   $ 0.01     $ 0.02  

 

 

NEW MEDIA INSIGHT GROUP, INC.

CONDENSED STATEMENT OF CASH FLOWS

NINE MONTHS ENDED JANUARY 31, 2016

(unaudited)

 

      (As restated)       (As reported)  
Cash flows from operating activities:                
Net income   $ 662,023     $ 688,702  
Amortization of debt discounts     47,611       70,924  
Change in fair value of derivative liabilities     (847,438 )     (883,526  
Other operating activities     102,482       88,578  
  Net cash used in operating activities     (35,322 )     (35,322 )
                 
  Net cash provided by financing activities (unchanged)     21,098       21,098  
  Net decrease in cash     (14,224 )     (14,224 )
  Cash-beginning of period     15,056       15,056  
  Cash-end of period   $ 832     $ 832  

 

NOTE 11. SUBSEQUENT EVENTS

 

On August 12, 2016, the Company sold 2,800,002 shares of its common stock for net proceeds of $2,800, issued 1,500,000 of its common stock for services valued at $7,500 and 3,500,000 shares of its common stock in settlement of its related party loans due of $16,713.

 

On June 2, 2016, the Company entered into an investment agreement (the “Investment Agreement”) with Atlanta Capital Partners, LLC (“ACP”), Summit Trading Ltd. (“Summit”) and Leone Group, LLC (“Leone” and collectively with ACP and Summit, the “Investors”). Pursuant to the terms of the Investment Agreement, the Investors agreed to provide funds to the Company on an as needed basis and as requested by the Company, of no more than $50,000. Such funds may be used by the Company for transfer agent, accounting and auditing costs and fees associated with application and approval of quotation on the OTC Pink market. No funds may be used for payments to related parties or for payments to Iconic Holdings, LLC (“Iconic”). Pursuant to the terms of the Investment Agreement, of these funds, $5,000 will be provided upon completion of the audit of the Company’s financial statements for the most recently completed fiscal year, together with receipt by the Company of a final audit report by the auditor.

 

  15  

 

 

Each investment will be apportioned pro rata among the Investors and the obligations of each of the Investors under the Investment Agreement are several and not joint. Each investment will be evidenced by a convertible promissory note issued by the Company to the Investor making the investment. Each note will bear interest at a rate of 10% and will convert, at any time, at the Investor’s option, at a conversion rate equal to 50% of the lowest trading price of the Company’s common stock during the five days prior to such notice of conversion.

 

Effectiveness of the Investment Agreement and the parties’ obligations thereunder are conditioned upon, among other things, entry into subscription agreements relating to the Company Sales (as defined below), execution of the Debt Settlement Agreement (as defined below), and execution of stock purchase agreements relating to the Palethorpe Sales (as defined below). Such additional agreements closed on August 9, 2016.

 

On June 2, 2016, the Company entered into a debt settlement agreement (the “Debt Settlement Agreement”) with Mr. Palethorpe, pursuant to which the Company and Mr. Palethorpe agreed to settle certain outstanding debt owed to Mr. Palethorpe by the Company for services previously provided by Mr. Palethorpe to the Company. The Company agreed to (i) pay Mr. Palethorpe $2,800 in cash on the closing date (the “Closing Date”), (ii) pay Mr.Palethorpe $5,000 upon the completion of the audit of the Company’s financial statements for the most recently completed fiscal year, together with the receipt by the Company of a final audit report by the auditor, and (iii) issue to Mr. Palethorpe 3,500,000 shares of Company common stock on the Closing Date. The Debt Settlement Agreement was effective as of the closing of the various other agreements herein described on August 8, 2016.

 

Effective August 9, 2016, Michael Palethorpe, the Company’s President, Chief Executive Officer, Secretary, Treasurer, sole director and majority stockholder, sold to each of ACP, an entity wholly owned by David Kugelman, the Company’s temporary Chief Financial Officer, Leone and Summit 5,666,666 shares of Company common stock in exchange for payment of $567 ($1,700 in the aggregate) to Mr. Palethorpe (collectively, the “Palethorpe Sales”). Each of ACP, Leone and Summit used his or its personal funds for such stock purchases. The Palethorpe Sales resulted in a change of control of the Company. As a result of the Palethorpe Sales, each of ACP, Leone and Summit owned approximately 18.2% of the Company’s outstanding common stock, based on 31,099,267 shares outstanding.

 

In addition, effective August 8, 2016:

 

(i) Each of ACP, Leone and Summit purchased from the Company 933,334 shares in exchange for payment of $934.00 ($2,802 in the aggregate) to the Company (the “KLS Sales”),

 

(ii) Iconic Holdings, LLC (“Iconic”) purchased from the Company 1,500,000 shares in exchange for payment of $1,500 to the Company (the “Iconic Sale”), and

 

(iii) Mr. Palethorpe purchased from the Company 3,500,000 shares valued at $3,500.00 (collectively with the KLS Sales and the Iconic Sale, the “Company Sales”).

 

After giving effect to the Palethorpe Sales and the Company Sales, there were 38,899,269 shares of Company common stock outstanding and (i) each of ACP, Leone and Summit owned 6,600,000 shares of Company common stock, representing approximately 17.0% of the Company’s outstanding common stock, (ii) Iconic owned 1,500,000 shares of Company common stock, representing approximately 3.9% of the Company’s outstanding common stock, and (iii) Mr. Palethorpe owned 3,500,002 shares of Company common stock representing approximately 9.0% of the Company’s outstanding common stock.

 

On August 8, 2016, Mr. Palethorpe resigned as Chief Financial Officer of the Company. Mr. Palethorpe retained the titles of President, Chief Executive Officer, Secretary and Treasurer and remained a member of the Company’s board of directors. Mr. Palethorpe agreed to retain his officer positions with the Company for a period not to exceed six months from the closing date of the Palethorpe Sales.  Also on August 8, 2016, the Company appointed Kugelman as the Company’s temporary Chief Financial Officer.

 

On August 12, 2016, the Company sold 2,800,002 shares of its common stock for net proceeds of $2,800, issued 1,500,000 of its common stock for services valued at $7,500 and 3,500,000 shares of its common stock in settlement of its related party loans due of $16,713.

 

  16  

 

 

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

 

Forward-Looking Statements

 

Except for historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve risks and uncertainties, including, among other things, statements regarding our business strategy, future revenues and anticipated costs and expenses. Such forward-looking statements include, among others, those statements including the words “expects,” “anticipates,” “intends,” “believes” and similar language. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed herein as well as in the “Risk Factors” section in our annual report on Form 10-K, as filed on August 13, 2015. You should carefully review the risks described in our annual report on Form 10-K and in other documents we file from time to time with the Securities and Exchange Commission. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report. We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances after the date of this document.

 

Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements.

 

All references in this quarterly report on Form 10-Q to “company”, “we”, “us”, or “our” are to New Media Insight Group, Inc.

 

Overview

 

The Company is a development stage company and operates as an internet marketing business providing clients with the latest in new media and mobile / smart phone payment and advertising solutions. The Company’s mission is to help local merchants connect, communicate and transact with their customers in a more effective way. The Company has devoted substantially all of its efforts to raising capital, planning and implementing the principal operations. The Company may continue to incur significant operating losses and to generate negative cash flow from operating activities.

Effective April 7, 2014, we effected a 1-for-2 reverse split of our company’s shares of common stock (the “Reverse Split”) and decreased our authorized shares to 850,000,000 shares of common stock.

 

  17  

 

 

The reverse split became effective with the Over-the-Counter Bulletin Board at the opening of trading on April 7, 2014. Throughout this quarterly report on Form 10-Q, each instance that refers to a number of shares of our common stock, refers to the number of shares of common stock after giving effect to the Reverse Split, unless otherwise indicated.

 

Effective September 1, 2013, our company entered into an exclusive agency agreement with Paywith Worldwide Inc., pursuant to which our company acquired the right to market mobile cards called mCards throughout the United States, with exclusivity and ownership in the following territories: Arizona, Colorado, Nevada, Oregon, Utah and Washington. Pursuant to the agreement, our company will generate revenue associated with every mCard transaction that takes place using the mCardNetwork. Although we have paid Paywith $150,000 for the exclusive rights discussed above, we have not met our other obligations to Paywith to date.

On December 10, 2014, we entered into an equity purchase agreement with Premier Venture Partners (“Premiere”), pursuant to which we agreed to sell to Premier an indeterminate number of shares of our common stock, up to an aggregate purchase price of $2,000,000. On February 25, 2015, we amended the equity purchase agreement such that it terminates upon the occurrence of a material adverse effect, as defined in the equity purchase agreement.

 

On April 9, 2015, we entered in a note purchase agreement with Iconic Holdings, LLC (“ Iconic ”). Pursuant to this agreement, we sold a convertible promissory note representing the sum of $60,500 to Iconic for $50,000 in cash, $5,000 for due diligence services, and $5,500 as an original issue discount. The note was due on April 9, 2016, carries 10% interest per annum and may be converted into common shares of our company at a conversion price of 60% of the lowest trading price of our common stock during the 15 consecutive trading days prior to the date on which holder elects to convert all or part of the note. This note currently is in default.

 

On June 2, 2016, the Company entered into an investment agreement (the “Investment Agreement”) with Atlanta Capital Partners, LLC (“ACP”), Summit Trading Ltd. (“Summit”) and Leone Group, LLC (“Leone” and collectively with ACP and Summit, the “Investors”). Pursuant to the terms of the Investment Agreement, the Investors agreed to provide funds to the Company on an as needed basis and as requested by the Company, of no more than $50,000. Such funds may be used by the Company for transfer agent, accounting and auditing costs and fees associated with application and approval of quotation on the OTC Pink market. No funds may be used for payments to related parties or for payments to Iconic Holdings, LLC (“Iconic”). Pursuant to the terms of the Investment Agreement, of these funds, $5,000 will be provided upon completion of the audit of the Company’s financial statements for the most recently completed fiscal year, together with receipt by the Company of a final audit report by the auditor.

 

Each investment will be apportioned pro rata among the Investors and the obligations of each of the Investors under the Investment Agreement are several and not joint. Each investment will be evidenced by a convertible promissory note issued by the Company to the Investor making the investment. Each note will bear interest at a rate of 10% and will convert, at any time, at the Investor’s option, at a conversion rate equal to 50% of the lowest trading price of the Company’s common stock during the five days prior to such notice of conversion.

 

 

Effectiveness of the Investment Agreement and the parties’ obligations thereunder are conditioned upon, among other things, entry into subscription agreements relating to the Company Sales (as defined below), execution of the Debt Settlement Agreement (as defined below), and execution of stock purchase agreements relating to the Palethorpe Sales (as defined below). Such additional agreements closed on August 9, 2016.

 

On June 2, 2016, the Company entered into a debt settlement agreement (the “Debt Settlement Agreement”) with Mr. Palethorpe, pursuant to which the Company and Mr. Palethorpe agreed to settle certain outstanding debt owed to Mr. Palethorpe by the Company for services previously provided by Mr. Palethorpe to the Company. The Company agreed to (i) pay Mr. Palethorpe $2,800 in cash on the closing date (the “Closing Date”), (ii) pay Mr. Palethorpe $5,000 upon the completion of the audit of the Company’s financial statements for the most recently completed fiscal year, together with the receipt by the Company of a final audit report by the auditor, and (iii) issue to Mr. Palethorpe 3,500,000 shares of Company common stock on the Closing Date. The Debt Settlement Agreement was effective as of the closing of the various other agreements herein described on August 8, 2016.

 

Effective August 9, 2016, Michael Palethorpe, the Company’s President, Chief Executive Officer, Secretary, Treasurer, sole director and majority stockholder, sold to each of ACP, an entity wholly owned by David Kugelman, the Company’s temporary Chief Financial Officer, Leone and Summit 5,666,666 shares of Company common stock in exchange for payment of $566.67 ($1,700 in the aggregate) to Mr. Palethorpe (collectively, the “Palethorpe Sales”). Each of ACP, Leone and Summit used his or its personal funds for such stock purchases. The Palethorpe Sales resulted in a change of control of the Company. As a result of the Palethorpe Sales, each of ACP, Leone and Summit owned approximately 18.2% of the Company’s outstanding common stock, based on 31,099,267 shares outstanding.

 

  18  

 

 

In addition, effective August 8, 2016:

 

(i) Each of ACP, Leone and Summit purchased from the Company 933,334 shares in exchange for payment of $934.00 ($2,802 in the aggregate) to the Company (the “KLS Sales”),

 

(ii) Iconic Holdings, LLC (“Iconic”) purchased from the Company 1,500,000 shares in exchange for payment of $1,500.00 to the Company (the “Iconic Sale”), and

 

(iii) Mr. Palethorpe purchased from the Company 3,500,000 shares valued at $3,500.00 (collectively with the KLS Sales and the Iconic Sale, the “Company Sales”).

 

After giving effect to the Palethorpe Sales and the Company Sales, there were 38,899,269 shares of Company common stock outstanding and (i) each of ACP, Leone and Summit owned 6,600,000 shares of Company common stock, representing approximately 17.0% of the Company’s outstanding common stock, (ii) Iconic owned 1,500,000 shares of Company common stock, representing approximately 3.9% of the Company’s outstanding common stock, and (iii) Mr. Palethorpe owned 3,500,002 shares of Company common stock representing approximately 9.0% of the Company’s outstanding common stock.

 

On August 8, 2016, Mr. Palethorpe resigned as Chief Financial Officer of the Company. Mr. Palethorpe retained the titles of President, Chief Executive Officer, Secretary and Treasurer and remained a member of the Company’s board of directors. Mr. Palethorpe initially agreed to retain his officer positions with the Company for a period not to exceed six months from the closing date of the Palethorpe Sales, and subsequently agreed to remain as an officer of the Company in order to assist the Company with its delinquent SEC reports. It is anticipated that Mr. Palethorpe will resign his positions with the Company once the Company is current in its SEC reporting obligations. Also on August 8, 2016, the Company appointed Kugelman as the Company’s temporary Chief Financial Officer.

 

On August 12, 2016, the Company sold 2,800,002 shares of its common stock for net proceeds of $2,800, issued 1,500,000 of its common stock for services valued at $7,500 and 3,500,000 shares of its common stock in settlement of its related party loans due of $16,713 .

 

Our company’s goal was to work with local merchants and small and medium sized businesses to help them improve their customer loyalty and attract new customers. Our unique mobile and social marketing solutions were designed to engage consumers in transacting using their mobile devices, including with mobile payments, mobile/smart phone marketing, mobile search engine optimization, and social media advertising. In order to successfully implement our business model, we need to raise additional funds. There is no assurance that we will be able to raise additional funds and, if funds are raised, whether we will be able to implement our business model.

 

  19  

 

 

Results of Operations

 

The following summary of our results of operations should be read in conjunction with our audited financial statements for the year ended April 30, 2015.

 

Results of Operations for the Three Months Ended January 31, 2016 and 2015

 

We had no revenues from operations for the three months ended January 31, 2016 and 2015.

 

We incurred operating expenses of $716 for the three months ended January 31, 2016 compared to $81,679 for the three months ended January 31, 2015. The decrease is due to fewer consulting fees, travel and other cost in the current period as compared to prior year, in addition to depreciation and amortization expense of $93 incurred in the current period as compared to $25,133 for the same period last year.

 

Our interest expense was $14,253 for the three months ended January 31, 2016 as compared to $-0- for the same period in 2015. The current period interest was comprised primarily interest on our issued convertible debt and debt discount amortization.

 

As of January 31, 2016, we had outstanding convertible debt with variable conversion provisions that had the possibility of exceeding our common shares authorized when considering the number of possible shares that may be issuable to satisfy these settlement provisions. As such, we are required to determine the fair value of this derivative and mark to market each reporting period. For the three months ended January 31, 2016, we incurred a $356,054 gain on change in fair value of our derivative liabilities compared to $-0- in the same period last year.

 

Results of Operations for the Nine Months Ended January 31, 2016 and 2015

 

We had no revenues from operations for the nine months ended January 31, 2016 and 2015.

 

We incurred operating expenses of $55,249 for the nine months ended January 31, 2016 compared to $280,960 for the nine months ended January 31, 2015. The decrease is due to fewer fees, travel and other cost in the current period as compared to prior year, in addition to depreciation and amortization expense of $278 incurred in the current period as compared to $75,398 for the same period last year.

 

Our interest expense was $130,166 for the nine months ended January 31, 2016 as compared to $-0- for the same period in 2015. The current period interest was comprised primarily of debt discounts associated with issued convertible note and common stock issued as commitment fees for our line of credit.

 

As of January 31, 2016, we had outstanding convertible debt with variable conversion provisions that had the possibility of exceeding our common shares authorized when considering the number of possible shares that may be issuable to satisfy these settlement provisions. As such, we are required to determine the fair value of this derivative and mark to market each reporting period. For the nine months ended January 31, 2016, we incurred an $847,438 gain on change in fair value of our derivative liabilities compared to $-0- in the same period, last year.

 

Liquidity and Capital Resources

 

Nine Months Ended January 31, 2016 Compared to Nine Months Ended January 31, 2015

 

  20  

 

 

As of January 31, 2016, we had a working capital deficit (current liabilities in excess of current assets) of $234,461, comprised of cash of $832, which was offset by $42,759 of accounts payable and accrued expenses, $24,313 due to related party, $41,092 note payable and $127,129 of derivative liabilities. For the nine months ended January 31, 2016, we used $35,322 of cash in operating activities and $-0- of cash in investing activities. Cash provided by financing activities totaled $21,098, comprised of proceeds from the sale of our common stock of $5,417 and related party advances of $15,681. In the comparable period in 2015, our aggregate cash used in financing activities totaled $4,317 comprised of related party repayments. At January 31, 2016, we had cash of $832 compared to $15,056 at April 30, 2015. Our cash is held in bank deposit accounts. At January 31, 2016, we had $50,500 convertible debentures outstanding.

 

Cash used in operations for the nine months ended January 31, 2016 and 2015 was $35,322 and $201,489, respectively, which represent cash outlays for research and development and general and administrative expenses in such periods. The decrease in cash outlays principally resulted from fewer operating costs and general and administrative expenses net, with an increase of our outstanding accounts payable by $3,724.

 

We did not have investing activities for the nine months ended January 31, 2016 and 2015.

 

In their report dated July 18, 2015, our independent registered public accounting firm stated at April 30, 2015, there is substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is an issue raised due to our net losses and negative cash flows from operations since inception and our expectation that these conditions will continue for the foreseeable future. In addition, we will require additional financing to fund future operations.

 

Further, we do not have any commercial products available for sale and have not generated revenues to date, and there is no assurance that, if approval of our products is received, we will be able to generate cash flow to fund operations. In addition, there can be no assurance that our research and development will be successfully completed or that any product will be approved or commercially viable. Our ability to continue as a going concern is subject to our ability to obtain necessary funding from outside sources, including obtaining additional funding from the sale of our securities, obtaining loans from various financial institutions or being awarded grants from government agencies, where possible. Our continued net operating losses increase the difficulty in meeting such goals and there can be no assurances that such methods will prove successful.

 

Off-Balance Sheet Arrangements

 

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

 

Critical Accounting Policies

 

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 amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s periodic filings with the Securities and Exchange Commission include, where applicable, disclosures of estimates, assumptions, uncertainties and markets that could affect the financial statements and future operations of the Company.

 

  21  

 

 

Recent Accounting Pronouncements

 

Management has considered all recent accounting pronouncements issued since the last audit of our consolidated financial statements. Our company’s management believes that these recent pronouncements will not have a material effect on our company’s consolidated financial statements.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

As a “smaller reporting company”, we are not required to provide the information required by this Item.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

As of October 31, 2015, an evaluation was carried out under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Securities and Exchange Act of 1934 (the “Exchange Act”). In carrying out that evaluation, management identified a material weakness (as defined in Public Company Accounting Oversight Board Standard No. 2) in our disclosure controls and procedures regarding a lack of adequate personnel and adequate segregation of duties. Based on management’s evaluation of our disclosure controls and procedures as of January 31, 2016, our principal executive officer and principal financial officer have concluded that, as of that date, our disclosure controls and procedures were not effective.

 

Our size has prevented us from being able to employ sufficient resources to enable us to have an adequate level of supervision and segregation of duties within our internal control system. Therefore, while there are some compensating controls in place, it is difficult to ensure effective segregation of accounting and financial reporting duties. Management reported a material weakness resulting from the combination of the following significant deficiencies:

 

  Lack of segregation of duties in certain accounting and financial reporting processes, including the approval and execution of disbursements;
     
  The Company’s corporate governance responsibilities are performed by the Board of Directors; we do not have any independent directors, we do not have an audit committee or compensation committee. Because our Board of Directors only meets periodically throughout the year, several of our corporate governance functions are not performed concurrent (or timely) with the underlying transaction, evaluation, or recordation of the transaction.

 

While we strive to segregate duties as much as practicable, there is an insufficient volume of transactions at this point in time to justify additional full time staff. We may not be able to fully remediate the material weakness until we increase operations at which time we would expect to hire more staff.

 

Plan for Remediation of Material Weaknesses

 

To mitigate the current limited resources and limited employees, we rely heavily on direct management oversight of transactions, along with the use of legal and accounting professionals. As we grow, we expect to increase our number of employees and engage outsourced accounting professionals, which will enable us to implement adequate segregation of duties within the internal control framework. We will continue to monitor and assess the costs and benefits of additional staffing.

 

  22  

 

 

Changes in Internal Control over Financial Reporting

 

No changes were made to our internal control over financial reporting since the filing of our quarterly report on Form 10-Q/A for the quarter ended October 31, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

PART II – OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

We know of no material, existing or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any 5% registered or beneficial shareholder, is an adverse party or has a material interest adverse to our company. 

 

ITEM 1A. RISK FACTORS

 

As a “smaller reporting company”, we are not required to provide the information required by this Item.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

None. 

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

On April 9, 2015, the Company issued an aggregate of $60,500 in unsecured promissory notes due on year from issuance at 10% per annum payable at maturity. The note, as of the date of this filing, is in default.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5. OTHER INFORMATION

 

None.

 

ITEM 6. EXHIBITS

 

Exhibit    
Number   Description
     
31.1*   Section 302 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer
     
31.2*   Section 302 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Financial Officer
     
32.1*   Section 906 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer and Principal Financial Officer

 

101.INS* XBRL Instance Document
101.SCH* XBRL Taxonomy Extension Schema Document
101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF* XBRL Taxonomy Extension Definition Linkbase Document
101.LAB* XBRL Taxonomy Extension Label Linkbase Document
101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document

 

* Filed herewith

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

  NEW MEDIA INSIGHT GROUP, INC.
     
Dated: September 20, 2017 By: /s/ Michael Palethorpe
    Michael Palethorpe
    President, Chief Executive Officer, Secretary and Treasurer 
    (principal executive officer)
     
  By: /s/ David Kugelman
    David Kugelman
    Interim Chief Financial Officer (principal financial officer and principal accounting officer) 

 

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