INTELLIGENT BUYING, INC. - 10-K - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
(Edgar Glimpses Via Acquire Media NewsEdge) Overview
The Company has been engaged since 2004 in the business of asset management and
sales of high-end computerized networking equipment to emerging high technology
companies. Commencing in 2011, the Company began providing advertising services
to promote products and services of third parties (primarily a related company,
Anchorfree Wireless, Inc.) to the Company's customer base. Under this business
model, third parties pay the Company a fee to disseminate their advertising to
the Company's customer base. This has now become the principal service product
provided by the Company. While the Company has not abandoned its previous
business plan, it is not being actively pursued at this time.
Plan of Operations
The extent of our operations over the next twelve (12) months will be determined
by our ability to generate advertising business and, to the extent possible,
access and purchase new inventory which can be resold to third parties
consistent with our historic business plan. Our business may require a
continuing access to additional capital, and there is no guarantee that we will
be able to access such capital on terms acceptable to the Company, if at all.
While we cannot predict exactly what our level of activity will be over the
next 12 months, past experience leads us to believe that available capital
resources will not be adequate to fund working capital requirements for the
12-month period which commenced January 1, 2014.
We will attempt to not incur any cash obligations that we cannot satisfy with
known resources, which are currently very limited.
The Company does not believe that period-to-period comparisons of its operating
results are necessarily meaningful nor should they be relied upon as reliable
indicators of future performance, thus making it difficult to accurately
forecast quarterly and annual revenues and results of operations. In addition,
our operating results are likely to fluctuate significantly from quarter to
quarter, and year-to-year, as a result of several factors, many of which are
outside our control, and any of which could materially harm our business.
Our revenues for the foreseeable future will remain primarily dependent on our
ability to generate additional advertising revenues and/or acquire inventory on
a continuing basis. As aforesaid, future revenues are difficult to forecast. The
Company may be unable to adjust spending quickly enough to offset any unexpected
increase in demand or a reduction in revenues in a particular quarter or year,
which may materially adversely affect our business, financial condition and
results of operations.
b. Current and Anticipated Expenses
The Company is a publicly-reporting and, as a consequence thereof, has incurred
and will continue to incur additional significant expenses for legal, accounting
and related services. In order to fulfill its reporting requirements under the
Securities Exchange Act of 1934, there will be ongoing expenses associated with
the ongoing professional fees for accounting, legal and a host of other expenses
for annual reports and proxy statements as well as ongoing costs of operations.
Current monthly expenses to run the Company average approximately $5,000.
Payment of future monthly expenses will be largely dependent on available cash.
d. Officers' Compensation and Loans
Neither Mr. Malobrodsky nor Mr. Gorodyansky has received or accrued any
compensation to date and has no written contract or any commitment to receive
annual compensation. Messrs. Malobrodsky and Gorodyansky have agreed to forego
any salary until such time as the Company has sufficient revenues therefore
and/or receives sufficient outside financing.
In the past, our founders have advanced funds to the Company as required. If,
and when necessary, our founders may, at their sole option, advance funds to
cover additional working capital as deemed necessary. If further funds are
advanced, they will be evidenced by notes and will be treated as loans to be
repaid, if and when we have the financial resources to do so.
While we cannot predict exactly what our level of activity will be over the next
12 months, past experience leads us to believe that available capital resources
will not be adequate to fund working capital requirements for the 12-month
period which commenced January 1, 2013. We will therefore need to access
additional capital through the issuance of additional equity and debt securities
and other forms of outside funding, including additional loans from officers,
directors and shareholders of the Company. There is no assurance can be
accomplished to the necessary extent, if at all. (See "Liquidity").
As of December 31, 2013, we had $1,669 in cash and negative working capital of
From its inception, the Company has been engaged since 2004 in the business of
asset management and sales of high-end computerized networking equipment to
emerging high technology companies. Commencing in 2011, the Company began
providing advertising services to promote products and services of third parties
(primarily a related company, Anchorfree Wireless, Inc.) to the Company's
customer base. Under this business model, third parties pay the Company a fee to
disseminate their advertising to the Company's customer base. This has now
become the principal service product provided by the Company. While the Company
has not abandoned its previous business plan, it is not being actively pursued
at this time.
The potential exists that our available capital resources may not be adequate to
fund our working capital requirements based upon our present level of operations
for the 12-month period subsequent to January 1, 2014. A shortage of capital
would affect our ability to fund our working capital requirements. If we require
additional capital, funds may not be available on acceptable terms, if at all.
In addition, if we raise additional capital through the sale of equity or
convertible debt securities, the issuance of these securities could dilute
existing shareholders. If funds are not available, this could materially
adversely affect our financial condition and results of operations.
Historically, we have depended on loans from our principal shareholders and
their families and acquaintances to provide us with working capital as required.
We do not have any credit facilities or other commitments for debt or equity
financing. No assurance can be given that financing, when needed, will be
available. To date, we have had discussions with potential sources of additional
funding, however, the Company does not currently have any firm commitment with
respect thereto. None of our shareholders is obligated to make any loans or
advances to us and there can be no assurance that any of our shareholders will
continue making loans or advances to us in the future.
To meet commitments that are greater than 12 months in the future, we will have
to operate our business in such a manner as produce positive cash flow and
enhance our exposure in the market. There does not currently appear to be any
other viable source of long-term financing except that management may consider
various sources of debt and/or equity financing if same can be obtained on terms
deemed reasonable to management.
Going Concern. Our independent auditors have added an explanatory paragraph to
their audit issued in connection with the financial statements for the period
ended December 31, 2013, relative to our ability to continue as a going concern.
The Company's total liabilities exceeded its total assets by $27,020. We had an
accumulated deficit of $703,566 at December 31, 2013 and recorded a loss of
$17,791 for the year ended December 31, 2013. Because our auditors have issued
a going concern opinion, there is substantial uncertainty we will continue
operations in which case you could lose your investment. Our auditors have
issued a going concern opinion. This means that there is substantial doubt that
we can continue as an ongoing business for the next 12 months. The financial
statements do not include any adjustments that might result from the uncertainty
about our ability to continue our business.
Results of Operations for Comparative Years Ended December 31, 2013 and December
The following table summarizes the results of operations during the years ended
December 31, 2013 and December 31, 2012:
12/31/13 12/31/12 Increase Increase
Line Item (audited) (audited) (Decrease) (Decrease)
Revenues $ 24,213 $ 27,870 $ (3,657 ) (13.12 )%
Net loss (17,791 ) (2,059 ) (17,343 ) 842.30 %
Expenses 42,004 29,929 12,075 40.35 %Earnings loss per share of common stock (0.00 ) (0.00 ) 0.00 (n/a)
Comparisons between Cost of Sales Selling, Administrative and General Expenses
for the years ended December 31, 2013 and December 31, 2012 are as follows:
12 Months. 12 Months.
Cost of Sales $ 15,340 $ 0
Ratio of Cost of Sales to Sales 63.4 % 0 %
Selling, General and Administrative Expenses $ 26,664 $ 29,929
We had a net loss of $17,791 for the year ended December 31, 2013 as compared
with a net loss of $2,059 for the year ended December 31, 2012. This
improvement was largely due to an increase in product sales and a decrease in
The Company's revenues in any given period is significantly affected the demand
for the advertising and other services provided by the Company and by the
working capital the Company has available to it
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 or
capital expenditures or capital resources that is material to an investor in our
Our operating results are not affected by seasonality.
Our business and operating results are not affected in any material way by
Critical Accounting Policies
The Securities and Exchange Commission issued Financial Reporting Release No.
60, "Cautionary Advice Regarding Disclosure About Critical Accounting Policies"
suggesting that companies provide additional disclosure and commentary on their
most critical accounting policies. In Financial Reporting Release No. 60, the
Securities and Exchange Commission has defined the most critical accounting
policies as the ones that are most important to the portrayal of a company's
financial condition and operating results, and require management to make its
most difficult and subjective judgments, often as a result of the need to make
estimates of matters that are inherently uncertain. The nature of our business
generally does not call for the preparation or use of estimates. Due to the fact
that the Company does not have any operating business, we do not believe that we
do not have any such critical accounting policies.
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