EMPIRICAL VENTURES, 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 Management's Discussion and Analysis of Financial Condition and Results of
Operations (MD&A) contains forward-looking statements that involve known and
unknown risks, significant 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 those forward-looking statements. You
can identify forward-looking statements by the use of the words may, will,
should, could, expects, plans, anticipates, believes, estimates, predicts,
intends, potential, proposed, or continue or the negative of those terms. These
statements are only predictions. In evaluating these statements, you should
consider various factors which may cause our actual results to differ materially
from any forward-looking statements. Although we believe that the exceptions
reflected in the forward-looking statements are reasonable, we cannot guarantee
future results, levels of activity, performance or achievements. Therefore,
actual results may differ materially and adversely from those expressed in any
forward-looking statements. We undertake no obligation to revise or update
publicly any forward-looking statements for any reason.
We are a development stage company. Originally our plan was to commercialize a
travel and tourism management program and related software applications. We
have since ceased development stages for our software application and
infrastructure build out due to the obsolescence and being cost prohibitive of
the initial software application and have not as yet engaged in revenue
producing activities. We are currently seeking new business opportunities and
have earned no revenues to date.
Empirical Ventures, Inc. is a corporation formed under the laws of the
State of Nevada on April 14, 2004, whose principal executive offices are located
in Bellevue Washington. Originally, our principal business was the further
development, and future production, marketing and sales via the Internet of a
software product called Darrwin. We are currently seeking new business
opportunities and have earned no revenues to date.
Recent Corporate Developments Subsequent to March 31, 2011
On November 28, 2013 we entered into a Memorandum of Understanding with
Pstech Corporation to obtain an exclusive license for the use of Psitech's
proprietary Mobile Marketing Platform called Go-Page, in North America.
On February 11, 2014, we entered into a exclusive license agreement with
PsiTech Corporation for the use of Psitech's proprietary Mobile Marketing
Platform called Go-Page, in North America (the "License Agreement"). In
consideration of the licenses granted and other undertakings by Licensor
hereunder, Licensee shall pay Licensor a License Fee in the amount of two
hundred thousand dollars (US$200,000) ("License Fee"). The License Fee shall be
due and payable as follows:
$50,000 upon signing the Memorandum of Understanding ("MOU") between the Parties
(provided, however, that Licensor hereby acknowledges receipt of this portion of
the License Fee);$50,000 upon signing of the License Agreement; and $100,000
upon on or before March 28, 2014. To date, we have paid $100,000 of these
The License Fees are non-cancellable and non-refundable. In addition to the
License Fee payable in accordance with, Licensee shall pay a royalty ("Royalty")
to Licensor according to the following schedule ("Royalty Schedule"):
Subscribers: Royalty Payable as Percentage of Gross Revenue
0 - 5000 6.25%
5001 - 7500 6.75%
7501 - 10,000 7.00%
10,001 - 15,000 8.00%
15,001 - 20,000 8.50%
20,001 - 25,000 9.25%
Reports and Payment
Not later than the fifteenth (15th) calendar day of each calendar quarter
(or the first business day thereafter), Licensee shall deliver to Licensor (i) a
report accurately showing Gross Revenues of the Licensee for the previous
quarter, the number of Subscribers on the last day of such previous quarter and
the amount of Royalties due thereon, and (ii) payment of the Royalties payable
for such previous quarterly based on the Subscriber information as reflected in
the report. All payments under this Agreement shall be made in US dollars.
The License Agreement contains customary representations and warranties and pre
and post-closing covenants of each party and customary closing conditions.
Breaches of the representations and warranties will be subject to customary
indemnification provisions, subject to specified aggregate limits of liability.
The foregoing summary description of the terms of the License Agreement may not
contain all information that is of interest to the reader. For further
information regarding the terms and conditions of the License Agreement, this
reference is made to such agreement, which is filed as Exhibit 10.1 hereto and
is incorporated herein by this reference.
The following information has been provided by PsiTech Corporation ("PsiTech").
PsiTech management has extensive experience in developing in cloud computing
technologies, and has gained a deep understanding working with a wide range of
enterprises and small businesses to understand the technological marketing needs
and challenges they face. PsiTech found that that the average small business
owner values and budgets for advertising and promotions through direct mail,
media, yellow page listings and that most had a personal social listing but not
any kind of online business presence because they do not have either the time or
the technical skills to build and manage a website.
Go-Page is a mobile device friendly page that displays specifically for
small screens. Owners of the website administer their go-page on
gopage.com (which website is expressly not incorporated by reference to this
filing) to their liking, where they can offer daily deals coupons and
Go-Page provides business analytics to track and offer statistical and
retail data so that the website owner doesn't have to. It is an enhancement
offering to their customers, analogous to a Facebook or Twitter link. Facebook
feeds them social status, Go-Page will feed them relevant locale-data.
It appears that today's consumers are becoming more present-centered,
they are very interested in immediate gratification, and are focused on what is
going to benefit them right now.
Mobile applications require a completely different approach, as it is a
completely new format of spatially and contextually driven communications - a
new marketing language, serving relevant, congruent information to consumers
based on where they are and what they're doing.
Consumers are looking for specific information or are making
quick-decision purchases. Mobile sites and landing pages must provide simple and
direct-response functionality - such as click-to-call features and only the most
Effective mobile optimization of websites and "responsive" design, is
more than shrinking a webpage down to the size of a smartphone screen. Consumers
have an intimate and personal relationship with their devices. People are on the
go, the structure of information needs to be entirely different with new
properties for maximum user experience. Contextual relevance: The communication
should be relevant to the place and the intended user response has to be
appropriate given what the individual is likely doing in that place.
Communications should be simple, elegant and navigable at a glance. The
communication should promote immediate consumer action. The goal is to reduce
consumer friction to have the consumer do something of value to them right now,
up to and including making a purchase…now.
Many of PsiTech's clients have inquired about PsiTech building a website
for them so they could take advantage of online marketing programs like the
daily deal offered by companies like Groupon. They were in need of a website but
the process discouraged them; they informed PsiTech that they found that
building a website through an online companies was often too complicated,
expensive and confusing.
PsiTech has also discovered that the clients that did have websites were
frustrated with their sites being outdated, no contact info, no social links, no
special deal promotion capability, and no understanding of mobile optimization.
We recognized the need in the market and set out to create a "hub" webpage that
had all their essential information in one page for SMB's to connect with
customers and promote their business online. As online purchases and mobile
purchases via tablets and smart-phones increase, SMB survival depends on being
visible and found.
Empirical management believes that Go-Page is a new way to create a
dynamic online web-presence to promote and increase sales for your business.
Go-Page is all about making webpage building a simple and enjoyable experience,
accessible for everyone. Users don't need to deal with HTML coding or any of the
technical aspects of hooking up the site to a domain and hosting. Go-Page is an
affordable, easy-to-use, accessible and secure cloud-based web portal that
provides SMBs (Server Message Block) with the power to develop and maintain
professionally designed webpages or "Go-Pages". Go-Pages are search engine
optimized (SEO) - visibility; and formatted for computers, smartphones and
tablets - mobility. Server Message Block operates as an application-layer
network protocol mainly used for providing shared
access to files, printers, serial ports, and miscellaneous communications
between nodes on a network. It also provides an authenticated inter-process
The Business Opportunity
How people find, gather and sort information has radically evolved in
the last few years and is constantly changing. Almost all consumers now use
online media when researching products or services in their local area.
The numbers of media sources consumers are using when shopping for
products and services in their local area continue to grow. Yet, despite changes
in consumer behavior only half of all small businesses have their own website
and less than a quarter of those who do have social media links. Why?
Management believes that there are two primary reasons for the current
state. First is cost, measured in time and money; many small businesses simply
cannot afford the high costs associated with the development and maintenance of
their website. Secondly, many small and medium businesses do not have the
internal skill set or aptitude to build and update a basic webpage. In order to
grow, small and medium enterprise has a critical need to market their offerings
to existing to current and prospective customers in a cost effective, efficient
Traditional print advertising is costly and not as effective as it once
was. A strong online presence is a must in today's highly competitive online
marketplace. Without a visible, accessible webpage, small business risks losing
customers to big business and more business savvy competitors.
To date, we have not been granted any patents, trademarks, franchises,
concessions or labor contracts at this time, however, we are preparing
applications for trademarks in Canada and the United States and in the future
other jurisdictions, and have no assurance of our ability to continue to use
such names in association with the sale of our products and services.
In the future we will enter into confidentiality and proprietary
rights agreements with our employees, consultants and other third parties and
control access to software, documentation and other proprietary information and
intend to apply for other protections in the form of patents and copyrights if
applicable. Failure to provide adequate protection our proprietary rights could
expose us to infringement of our rights by other parties and could offer similar
services, significantly harming our competitive position and decreasing our
We currently do not require approval of any government to offer our
products and services. We do not expect that there will be any governmental
regulations on our business. We will voluntarily refuse to accept orders from
the following countries: Afghanistan, Angola, Cuba, Democratic People's Republic
of Korea [North Korea], Eritrea, Federal Republic of Yugoslavia [Serbia and
Montenegro], Iran, Iraq, Liberia, Libya, Myanmar [Burma], Rwanda, Sierra Leone,
Syria, and Sudan. We expect no costs or effects of compliance of federal, state
and local environmental laws on our business.
We anticipate that we will incur over the next twelve months the following
Type Amount Percent
Salaries 119,030 4%
Professional services (Agent Commissions) 434,410 16%
(IT development) 85,572 3%
Hardware and equipment 29,200 1%
Professional services (Public company expenses) 80,000 3%
(lawyers and accountants) 35,850 1%
Programming IT development 47,632 2%
Office, rent and expenses 7,168 0%
Travel expenses 40,250 1%
Government Fees (Corporate Tax provision) 734,503 27%
Business Development fees 168,092 6%
Servers and bandwidth 137,387 5%
Bank fees and interest 163,720 6%
Administration 476,167 17%
Marketing and Advertisement 179,716 7%
Total 2,738,696 100%
Our total expenditures over the next twelve months are anticipated to be
approximately $2,738,696. Our cash on hand as of March 31, 2011 is $1,200. We do
not have sufficient cash on hand to fund our operations for the next twelve
months. We also require additional financing.
RESULTS OF OPERATIONS
March 31, June 30,
Current Assets $ 1,200 $ 4,961
Current Liabilities $ 99,616 $ 98,116
Working Capital Deficit $ (98,416) $ (93,155 )
NNE MONTH NINE MONTH
Period Ended Period Ended
March 31, March 31,
Cash Flows used in Operating Activities $ (13,761 ) $ (72 )
Cash Flows used in Investing Activities $ - $ -
Cash Flows provided by Financing Activities $ 10,000 $ 5,000
(3,761 ) 4,928
As of March 31, 2011, we had cash on hand of $1,200. Since our inception, we
have used our common stock and promissory notes to raise money for our
operations. We have not attained profitable operations and are dependent upon
obtaining financing to pursue our plan of operation.
We have not generated any revenues since inception.
Operating Expenses and Net Loss
Operating expenses for the three month ended March 31, 2011 was $18 compared
with $4,123 for the three month ended March 31, 2010. The decrease in operating
expenditures was a result of the Company's ongoing reporting requirements,
accounting, consulting, and general and administrative expenses.
Net loss for the three month period ended March 31, 2011 was $18 compared with
$4123 for the period ended March 31, 2010. The overall decrease in net loss of
$4,105 was attributed to the Company's ongoing reporting requirements,
accounting, consulting, and general and administrative expenses.
Liquidity and Capital Resources
As at March 31, 2011, the Company's cash balance was $1,200.
As at March 31, 2011, the Company had total liabilities of $99,616.
As at March 31, 2011, the Company had a working capital deficit of $(98,416)
Cashflow from Operating Activities
During the nine month period ended March 31, 2011, the Company used $13,761 of
cash for operating activities compared with $72 for the three month ended March
Cashflow from Investing Activities
During the nine month period ended March 31, 2011 and 2009, the Company paid $0
in investing activities.
Cashflow from Financing Activities
During the nine month period ended March 31, 2011, the Company has net cash
received of $10,000 from financing activities compared, with $0 in financing
activities for the same period in 2009.
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.
We have not attained profitable operations and are dependent upon obtaining
financing to pursue any extensive activities. For these reasons, our auditors
stated in their report for the year ended March 31, 2011 that they have
substantial doubt that we will be able to continue as a going concern without
We will continue to rely on equity sales of our common shares in order to
continue to fund our business operations. Issuances of additional shares will
result in dilution to existing stockholders. There is no assurance that we will
achieve any additional sales of the equity securities or arrange for debt or
other financing to fund any future business opportunities.
Critical Accounting Policies
We have identified certain accounting policies, described below, that are most
important to the portrayal of our current financial condition and results of
operations. Our significant accounting policies are disclosed in the notes to
the audited financial statements included in this Annual Report.
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 amounts reported in the financial
statements and accompanying notes for the reporting period. Significant areas
requiring the use of management estimates relate to the valuation of its
Development Stage Enterprise
Our financial statements are prepared using the accrual method of accounting. We
are a development stage company as we devote substantially all of our efforts to
acquiring and developing businesses. Until such business are acquired and
developed, we will continue to prepare our financial statements and related
disclosures in accordance with entities in the development stage.
Recently Issued Accounting Pronouncements
We do not expect the adoption of any recent accounting pronouncements to have a
material impact on its financial statements.
We are a smaller reporting company as defined by Rule 12b-2 of the Securities
Exchange Act of 1934 and are not required to provide the information under this
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