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ITALK INC. - 10-Q - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS(Edgar Glimpses Via Acquire Media NewsEdge) 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 "may", "should", expects", "plans", "anticipates", "believes", "estimates", "predicts", potential" or "continue" 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 law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results. Our unaudited financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report. In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars. All references to "US$" refer to United States dollars and all references to "common stock" refer to the common shares in our capital stock. As used in this quarterly report, the terms "we", "us", "our" and "our company" mean iTalk Inc., unless otherwise indicated. CORPORATE OVERVIEW Our company was incorporated on July 10, 2006 in the State of Nevada under the name Sopac Cellular Solutions Inc., and was formed to sell wireless technology and cell phone service to medium and large corporations, involving a large array of cellular service plans, cell phones, software and accessories. On December 18, 2012, we filed Articles of Merger with the Nevada Secretary of State to change our name from "Sopac Cellular Solutions Inc." to "iTalk Inc.", to be effected by way of a merger with our wholly-owned subsidiary iTalk Inc., which was created solely for the name change. Also on December 18, 2012, we filed a Certificate of Change with the Nevada Secretary of State to give effect to a forward split of our authorized, issued and outstanding shares of common stock on a 25 new for 1 old basis and, consequently, our authorized capital increased from 75,000,000 to 1,875,000,000 shares of common stock and our issued and outstanding shares of common stock increased from 1,700,000 to 42,500,000, all with a par value of $0.001. These amendments became effective on December 21, 2012 upon approval from the Financial Industry Regulatory Authority. 9 The forward split and name change became effective with the Over-the-Counter Bulletin Board at the opening of trading on December 21, 2012 under the symbol "SOPCD". The "D" will be placed on our ticker symbol for 20 business days. After 20 business days our ticker symbol will revert back to its original symbol "SOPC". Subsequently, after 10 business days our ticker symbol will change to our new symbol "TALK" to better reflect our company's new name. Our CUSIP number is 465353 100. RESULTS OF OPERATIONS Our company is still in development stage and has generated no revenues to date. THREE-MONTH PERIOD ENDED NOVEMBER 30, 2012 COMPARED WITH THE THREE MONTH PERIOD ENDED NOVEMBER 30, 2011. The following discussion of our results of operations should be read in conjunction with our unaudited financial statements for the three month period ended November 30, 2012 which are included herein. Our operating results for the three month periods ended November 30, 2012 and 2011 and the period from July 10, 2006 (inception) to November 30, 2012 are summarized as follows: From July 10, 2006 Three Months Ended (Inception) To November 30, November 30, 2012 2011 2012 -------- -------- -------- Professional fees $ 6,142 $ 3,500 $ 51,392 General and administrative expenses 1,584 865 40,491 General and administrative expenses - related party 300 300 7,100 -------- -------- -------- Net Loss $ (8,026) $ (4,665) $(98,983) ======== ======== ======== We incurred operating expenses of $8,026 for the three month period ended November 30, 2012 compared to operating expenses of $4,665 for the same period in 2011. These expenses for the three month period ended November 30, 2012 consisted of general operating expenses incurred in connection with the day to day operation of our business and the preparation and filing of our periodic reports. Our operating expenses from July 10, 2006 (inception) through November 30, 2012 were $98,913. Our net loss for the three months ended November 30, 2012 and 2011 was $8,026 and $4,665, respectively, with no revenues for either period. Our net loss from July 10, 2006 (inception) through November 30, 2012 was $98,983. LIQUIDITY AND CAPITAL RESOURCES As of November 30, 2012, we had total current assets of $11,564 and current liabilities of $70,547. We have a working capital deficit of $58,983 as of November 30, 2012. As of November 30, 2012, there is a total of $46,965 in a loan payable that is owed by the company to Eric Ezra, an officer and director, for expenses that he has paid on behalf of the company. The loan is interest free and payable on demand. As of November 30, 2012, there is a total of $15,000 in a loan payable that is owed by the company to David F. Levy, an officer and director, for funds he loaned the company to pay expenses. The loan is interest free and payable on demand. 10 WORKING CAPITAL As of As of November 30, August 31, 2012 2012 -------- -------- Current Assets $ 11,564 $ 1,578 Current Liabilities $ 70,547 $ 52,535 Working Capital (Deficit) $(58,983) $(50,957) CASH FLOWS Three Month Three Month Period Ended Period Ended November 30, November 30, 2012 2011 -------- --------Cash provided by (used in) Operating Activities $ (5,014) $ (3,360) Cash provided by (used in) Investing Activities Nil Nil Cash provided by (used in) Financing Activities 15,000 4,000 -------- -------- Net Increase (Decrease) in Cash $ 9,986 $ 640 ======== ======== Cash used in operating activities for the three month period ended November 30, 2012 was $5,014 compared to $3,360 provided by operating activities for the three month period ended November 30, 2011. Cash provided by financing activities for the three month period ended November 30, 2012 was $15,000 compared to $4,000 provided by financing activities for the three month period ended November 30, 2011. PLAN OF OPERATION Our company had not been successful in establishing partnerships with suppliers such as Sprint/Nextel, AT&T and Verizon Wireless. Due to the economic conditions over the past year, our company had been unable to attain any level of success despite the continued efforts of our director. Our management began analyzing various alternatives available to our company to ensure our survival and to preserve our shareholder's investment in our common shares. Our company's new focus on being a Wireless Technology Value Added Reseller (VAR) to develop and launch new technology and products in the global communications market. Our company provides wholesale and retail telecommunications services, and products worldwide. In December 2012, with the appointment of David F. Levy as president, chief executive officer, secretary and director, and under his leadership, our company changed its business focus and will now move forward with marketing and distributing its iTalk Phone devices. The iTalk phone looks just like an iPhone, but the monthly cost is nothing like the ones most smartphone customers get in the mail each month as it will only cost $20 per month. The iTalk Phone isn't a phone, exactly. The iTalk Phone uses the iPod Touch as a makeshift Smartphone, an endeavor usually reserved for a small niche of enterprising techies. Many of them share phone-related strategies, usually involving use of Skype or Google Voice, on Internet message boards, but not anymore. The utilization of the iTalk Phone as a makeshift Smartphone is accomplished by coupling its iTalk Sleeve device with the iTouch, a touch-screen gadget that contains most of the features of an iPhone, except for the earpiece and cellular chip integrated with iTalk Service and Data Plan. The iTalk sleeve is as easy as putting on an iPhone cover as it just snaps in place. 11 GOING CONCERN Our auditors have expressed their doubt about our ability to continue as a going concern unless we are able to generate profitable operations. CRITICAL ACCOUNTING POLICIES BASIC EARNINGS PER SHARE ASC No. 260, "Earnings Per Share", specifies the computation, presentation and disclosure requirements for earnings (loss) per share for entities with publicly held common stock. Our company has adopted the provisions of ASC No. 260. Basic net loss per share amounts is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted earnings per share are the same as basic earnings per share due to the lack of dilutive items in our company. RECENT ACCOUNTING PRONOUNCEMENTS Our company has evaluated the recent accounting pronouncements issued through the issuance of these financial statements, and our company does not expect that the effectiveness of any of these changes will have a material impact on our company's financial position, or statements. OFF-BALANCE SHEET ARRANGEMENTS We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors. |