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LEAGUE NOW HOLDINGS CORP - 10-Q/A - Management's Discussion and Analysis and Results of Operations(Edgar Glimpses Via Acquire Media NewsEdge) General The following discussion and analysis provides information which management of the Company believes to be relevant to an assessment and understanding of the Company's results of operations and financial condition. This discussion should be read together with the Company's financial statements and the notes to the financial statements, which are included in this report. This information should also be read in conjunction with the information contained in our Form 8-K/A filed with the Securities and Exchange Commission (the "Commission") on May 3, 2013, including the audited financial statements and notes included therein as of and for the year ended December 31, 2012, which reports are incorporated herein by reference. The reported results will not necessarily reflect future results of operations or financial condition. Caution Regarding Forward-Looking Statements This Report contains forward-looking statements that relate to future events or our future financial performance. Some discussions in this report may contain forward-looking statements that involve risk and uncertainty. A number of important factors could cause our actual results to differ materially from those expressed in any forward-looking statements made by us in this Report. Forward-looking statements are often identified by words like "believe," "expect," "estimate," "anticipate," "intend," "project" and similar words or expressions that, by their nature, refer to future events. In some cases, you can also identify forward-looking statements by terminology such as "may," "will," "should," "plans," "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 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, or achievements. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this Report. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions. 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 in an effort to conform these statements to actual results. 2 Business Overview League Now Holdings Corporation ("League Now") was incorporated in September 2005 in Florida. The Company originally intended to operate as an application service provider offering web-based services for the online video gaming industry. In late 2009, the Company determined that the Company would be considered a "shell" company as that term is defined in Rule 12b-2 of the Securities Exchange Act of 1934. Infiniti Systems Group ("Infiniti"), a wholly owned subsidiary of League Now, was incorporated in the State of Ohio in January 1995 as J.L. Consulting, Inc., to develop and consult on application development, project management, managed information technology (IT) services, IT helpdesk services, professional staffing and placement, network security products and services, and server virtualization, backup and disaster recovery. On July 15, 1999, J.L. Consulting, Inc. changed its name to Infiniti Systems Group, Inc. Infiniti is a reseller for Microsoft, McAfee and many other security products, and markets managed IT services to small to medium sized businesses and security and staffing services to Fortune 1000 companies. Infiniti's client base is across many industries including healthcare, financial, manufacturing, construction, transportation, non-profits and government. Infiniti is now specializing in IT security and information technology consulting for companies in the Midwestern United States. Infiniti's security division provides product and service support in the Windows, Unix and Linux, Internet, mobile device, the latest on intrusion detection and prevention, disaster recovery and business continuity planning. The consulting division provides network support, application development, staffing and recruiting for many companies in the Midwestern United States. On February 27, 2013, the Company consummated a share exchange with NYBD Holdings, Inc. (NYBD) pursuant to which 100% of the equity in NYBD was exchange for 28,500,000 shares of the Company's common stock, which was previously held by the Company's former CEO, John Bianco. As a result of the transaction, the shareholders of NYBD became the majority owners of the Company and NYBD became a wholly-owned subsidiary. The Company concurrently agreed to sell the operations of League Now to Mr. Bianco in exchange for the assumption by Mr. Bianco of all associated liabilities. For accounting and reporting purposes, this transaction will be treated as a reverse merger with NYBD being the surviving entity. All balances as of and for the period ended December 31, 2012 are those of League Now exclusive of NYBD. The financial statements for March 31, 2013 and thereafter will reflect the historical balances and results of operations for NYBD, exclusive of League Now. The details of this transaction were previously reported on Form 8-K, filed March 6, 2013, and an 8K/A filed on May 2, 2013 which should be read in conjunction with these audited financial statements. NYBD Holdings, Inc. was incorporated on March 16, 2012 with a Fiscal Year ending of December 31. NYBD Holdings, Inc.has two deli restaurants that specialize in providing a wide variety of Bagels and cream cheese spread toppings along with a full service juice bar and large salad bar. The restaurants are located in downtown Miami located at 350 NE 24th St. and at 155 E. Flagler St. Market Opportunity The Deli business is a fast growing business with an ever increasing customer base. The Company has determined that it can capture a significant share of this market through a combination of a better product and winning marketing formula along with a lower pricing strategy. There are also a lot of small individually owned stores in the industry that have trouble competing with the larger chains which presents an opportunity for acquisition. Industry Overview The bagel and deli industry has become a fast growing industry in the United States. Major chain restaurants have taken the lead in this expansion. More people than ever are eating out and bagel and deli stores have added a great alternative to breakfast and lunch. Larger stores with expanded menus and expanded services has become the trend and have captured a larger market share. 3 Growth Strategy Over the coming fiscal year, the company will employ an aggressive strategy in the acquisition of additional bagel and deli restaurants throughout Florida and the rest of the United States. NYBD has developed great customer loyalty based on a superior product, great customer service and store ambiance. By acquiring additional stores and replicating this formula the company plans on gaining significant market share. The Company's competition has better name recognition at this point, but our pricing strategy will give us a competitive advantage to get customers in the door. NYBD's better product and winning marketing formula will keep them coming back. RESULTS OF OPERATIONS Results of Operations Comparisons of the Three Months Ended March 31, 2013 with the Three Months Ended March 31, 2012. This is not a true comparative period in 2012 because NYBD was organized in January of 2012 but operations did not begin until late March in 2012. Revenues Revenues for the three months ended March 31, 2013 were $70,497 compared to $5,210 for the same period ending March 31, 2012. As noted above this is not a true comparative reporting period. Cost of Revenues Cost of revenues for the three months ended March 31, 2013 was $26,869 compared to $1,625 for the same period ending March 31, 2012. Again this is not a true comparative reporting period. Gross Profit Gross profit was $43,629 for the three months ended March 31, 2013, In comparison to 2012 where the gross profit was $3,585. General and Administrative Expenses General and administrative expenses consist primarily of the cost of salaries and rent, as well as professional fees. General and administrative expenses were $79,155 for three months ending March 31, 2013 and $15,424 for the three months ending March 31, 2012. Capital Resources and Liquidity As of March 31, 2013, the Company had $0 in cash. As reflected in the accompanying financial statements, we had a decrease of cash in the operations of $31,563 resulting from a net loss of $52,544 for the three months ended March 31, 2013 offset in part by depreciation of $17,017 and increase in accounts payable of $3,964. Comparatively, there was $3,269 in cash for the period ending March 31, 2012. This was made up of a decrease of cash in the operations of $41,135 resulting from a net loss of $28,856 and an increase in Security deposit of $29,597 for the three months ending March 31, 2012 offset in part by depreciation of $17,017. The Company may not have sufficient resources to fully develop any new products or technologies unless we are able to raise additional financing. The Company can make no assurances these required funds will be available on favorable terms, if at all. If additional capital is raised through the sale of equity or convertible debt securities, the issuance of such securities would result in dilution to our existing stockholders. Additionally, these conditions may increase costs to raise capital and/or result in further dilution. The Company's failure to raise capital when needed would adversely affect the business, financial condition and results of operations, and could force the Company to reduce or cease operations. 4 The Company believes that it will be able to meet the costs of growth and public reporting with funds generated from operations and additional amounts generated through debt and equity financing, Although management believes that the required financing will be obtained there is no guarantee these funds will be made available, and if funds are available, that the terms will be satisfactory to the Company. Impact of Inflation The Company does not expect inflation to be a significant factor in operation of the business. Off-Balance Sheet Arrangements There are no off-balance sheet arrangements between the Company and any other entity that have, or are reasonably likely to have, a current or future effect on financial conditions, changes in financial conditions, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders. Going Concern The Company has a working capital deficiency of $17,608 and a stockholders' deficiency of $204,717, as of March 31, 2013. These factors raise substantial doubt about its ability to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern. Critical Accounting Policies The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Management believes that the application of these policies on a consistent basis enables us to provide useful and reliable financial information about our operating results and financial condition. Some of the critical accounting estimates are detailed below. Critical Accounting Estimates and New Accounting Pronouncements Critical Accounting Estimates The preparation of financial statements in accordance with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect reported amounts and related disclosures in the financial statements. Management considers an accounting estimate to be critical if: it requires assumptions to be made that were uncertain at the time the estimate was made, and changes in the estimate or different estimates that could have been selected could have a material impact on our results of operations or financial condition. The Company base estimates and judgments on experience, current knowledge, and beliefs of what could occur in the future, observation of trends in the industry, information provided by customers and information available from other sources. Actual results may differ from these estimates under different assumptions or conditions. The Company has identified the following accounting policies and estimates as those that are believed to be the most critical to the financial condition and results of operations and that require management's most subjective and complex judgments in estimating the effect of inherent uncertainties: share-based compensation expense, income taxes, and derivative financial instruments. 5 Share-Based Compensation Expense. We calculate share-based compensation expense for option awards and warrant issuances ("Share-based Awards") based on the estimated grant/issue-date fair value using the Black-Scholes-Merton option pricing model ("Black-Sholes Model"), and recognize the expense on a straight-line basis over the vesting period, net of estimated forfeitures. The Black-Scholes Model requires the use of a number of assumptions including volatility of the stock price, the weighted average risk-free interest rate, and the vesting period of the Share-based Award in determining the fair value of Share-based Awards. Although we believe our assumptions used to calculate share-based compensation expense are reasonable, these assumptions can involve complex judgments about future events, which are open to interpretation and inherent uncertainty. In addition, significant changes to our assumptions could significantly impact the amount of expense recorded in a given period. Income Taxes. As part of the process of preparing our consolidated financial statements, we are required to estimate income taxes in each of the jurisdictions in which we operate. Our provision for income taxes is determined using the asset and liability approach to account for income taxes. A current liability is recorded for the estimated taxes payable for the current year. Deferred tax assets and liabilities are recorded for the estimated 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 and liabilities are measured using the enacted tax rates in effect for the year in which the timing differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of changes in tax rates or tax laws are recognized in the provision for income taxes in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount more-likely-than-not to be realized. Changes in valuation allowances will flow through the statement of operations unless related to deferred tax assets that expire unutilized or are modified through translation, in which case both the deferred tax asset and related valuation allowance are similarly adjusted. Where a valuation allowance was established through purchase accounting for acquired deferred tax assets, any future change will be credited or charged to income tax expense. The determination of our provision for income taxes requires significant judgment, the use of estimates, and the interpretation and application of complex tax laws. In the ordinary course of our business, there are transactions and calculations for which the ultimate tax determination is uncertain. In spite of our belief that we have appropriate support for all the positions taken on our tax returns, we acknowledge that certain positions may be successfully challenged by the taxing authorities. We determine the tax benefits more likely than not to be recognized with respect to uncertain tax positions. Although we believe our recorded tax assets and liabilities are reasonable, tax laws and regulations are subject to interpretation and inherent uncertainty; therefore, our assessments can involve both a series of complex judgments about future events and rely on estimates and assumptions. Although we believe these estimates and assumptions are reasonable, the final determination could be materially different than that which is reflected in our provision for income taxes and recorded tax assets and liabilities. New Accounting Pronouncements In December 2011, FASB issued Accounting Standards Update ("ASU") 2011-11, Balance Sheet - Offsetting. This guidance requires disclosures about offsetting and related arrangements for recognized financial instruments and derivative instruments. The standard is effective for us as of January 1, 2013 and will not materially impact our financial statement disclosures. In September 2011, the FASB issued ASU 2011-08, "Testing Goodwill for Impairment." This guidance provides the option to evaluate prescribed qualitative factors to determine whether a calculated goodwill impairment test is necessary. The standard is effective for us as of January 1, 2012 and will not materially impact on our financial condition, results of operations, or financial statement disclosures. In May 2011, FASB issued Accounting Standards Update ("ASU") 2011-05, Comprehensive Income: Presentation of Comprehensive Income , to allow an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. ASU 2011-05 eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders' equity. The amendments do not change the guidance regarding the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. The amendments should be applied retrospectively, and is effective for fiscal years and interim periods within those years, beginning after December 15, 2011. Early adoption is permitted. The adoption is not expected to have a material impact on the Company's results of operations, financial position or cash flows. 6 In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement: Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs . This ASU represents the converged guidance of the FASB and the IASB (the "Boards") on fair value measurement, and results in common requirements for measuring fair value and for disclosing information about fair value measurements, including a consistent meaning of the term "fair value." These amendments change some of the terminology used to describe many of the existing requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. The amendments should be applied prospectively, and they are effective during interim and annual periods beginning after December 15, 2011. Early application by public entities is not permitted. The adoption is not expected to have a material impact on the Company's results of operations, financial position or cash flows. Management does not believe there would be a material effect on the accompanying financial statements had any other recently issued but not yet effective accounting standards been adopted in the current period. |