ACPS AC Partners Inc (PK)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

 

For the quarterly period ended: March 31, 2015

 

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 No. 000-54562

 

IGLUE, INC.

(Exact name of registrant as specified in its charter)

 

Nevada		731602395
(State or other jurisdiction of incorporation)		(IRS Employer Identification No.)

 

Soroksari ut 94-96

1095 Budapest, Hungary

(Address of principal executive offices)

 

+36-1-456-6061

(Registrant’s telephone number, including area code)

 

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 past 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

 

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 x No o

 

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

 

Large accelerated filer	o		Accelerated filer	o
Non-accelerated filer	o		Smaller reporting company	x

 

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

 

As of May 14, 2015 there were 11,919,370 shares outstanding of the registrant’s common stock.

 

 

TABLE OF CONTENTS

 

PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements.	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	21
Item 4.	Controls and Procedures.	21
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings.	22
Item 1A.	Risk Factors.	22
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds.	22
Item 3	Defaults Upon Senior Securities.	22
Item 4.	Mine Safety Disclosures.	22
Item 5.	Other Information.	22
Item 6.	Exhibits.	22
Signatures		23

 

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

iGlue, Inc. (formerly Hardwired Interactive, Inc.)

(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEET

Amounts in USD

		March 31, 2015	December 31, 2014
ASSETS
Current Assets
Cash		$525	$563
Other receivables	3	17,602	18,873
Total Current Assets		18,127	19,436
Intangible assets, net	4	89	188
Fixed assets, net	5	193	233
Total Non-Current Assets		282	421
Total Assets		18,409	19,857
LIABILITIES
Current Liabilities
Accounts payable and accrued expenses	6	101,879	103,537
Note payable	7	750,000	750,000
Other liabilities	8	357,819	338,371
Total Current Liabilities		1,209,698	1,191,908
Stockholders’ Deficit
Common stock, $0.11 par value; 11,919,370 and 11,919,370 shares issued and outstanding	9	1,311,131	1,311,131
Preferred stock, $0.001 par value 1,000,000 Series A issued and outstanding		1,000	1,000
Preferred stock, $0.001 par value 886,000 Series B issued and outstanding
Additional Paid-In Capital Deficit accumulated during development stage Other Comprehensive Income	9	9,661,926 (12,275,192)   109,846	9,661,926 (12,251,834)   105,726
Total Stockholders’ Deficit		(1,191,289)	(1,172,051)
Total liabilities and stockholders’ deficit		18,409	19,857

May 15, 2015

iGlue, Inc. (formerly Hardwired Interactive, Inc.)

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF OPERATIONS

 

Amounts in USD

	Notes	For the three months ended March 31, 2015		For the three months ended March 31, 2014
Net Sales		$-		$-
Research and development		0		0
General administration	10	1,166		51,932
Operating expenses		1,166		51,932
Loss from operations		(1,166)		(51,932)
Interest expenses and exchange gains	11	(22,192)		(22,192)
Net loss		(23,358)		(74,124)
Basic loss per share Weighted average number of shares outstanding – Basic and diluted		(0.00)   11,599,152		(0.06   11,599,152

 

May 15, 2015

 

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF STOCKHOLDERS’ DEFICIT AND COMPREHENSIVE INCOME

Amounts in USD

 

		Common and Preferred Stocks		Accumulated Deficit During Developmental Stage	Additional Paid In Capital	Other Comprehensive Income	Total	Comprehensive Income/ (Loss)
Balance at December 31, 2014		1,312,131		(12,251,834)	9,661,926	105,726	(1,172,051)	(202,151)
Net loss for the period				(23,358)			(23,358)	(23,358)
Currency Translation Adjustment						4,120	4,120	4,120
Balance at March 31, 2015		1,312,131		(12,275,192)	9,661,926	109,846	(1,191,289)	(221,389)

iGlue, Inc. (formerly Hardwired Interactive, Inc.)

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CASH FLOWS

Amounts in USD

		For the period ended March 31, 2015	For the period ended March 31, 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		(23,358)	(74,124)
Adjustments to reconcile net loss to net cash used in operating activities:
Interest accrued		22,192	22,192
Stock based payments		-	48,000
Recapitalisation under reverse merger
Depreciation and amortization		116	247
Changes in operating assets and liabilities:
(Increase) Decrease in other current assets		1,271	(1,655)
(Decrease) Increase in accounts payable other and accrued liabilities		(4,379)	2,706
Net cash (used)/surplus in operating activities		(4,158)	(2,634)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of non-current assets		0	0
Net cash used in investing activities		0	0
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from stockholders		0	0
Net cash from financing activities		0	0
Effect of exchange rate changes on cash		4,120	2,395
Net (decrease) increase in cash		(38)	(239)
Cash at beginning of period		563	3,636
Cash at end of period		$525	$3,397
Supplemental disclosure of cash flow information:
Cash paid for:
Interest		-	-
Taxes		-	-

iGlue, Inc. (formerly Hardwired Interactive, Inc).

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

 

NOTE 1 - GENERAL INFORMATION

In4 Ltd. was incorporated in Budapest, Hungary on September 19, 2007, with the objective to develop Web 3.0 internet technologies based on natural language processing and semantic analysis The company is located at Soroksari út. 94-96, Budapest, 1095 Hungary.

 

Going Concern and Management’s Plan

 

These financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company has an accumulated deficit since inception of $122,275,192 and negative working capital of $(1,191,571). The Company has not generated any revenues to date, and its ability to continue as a going concern is contingent upon the successful completion of additional financing arrangements and its ability to achieve and maintain profitable operations. Management plans to raise equity capital to finance the operating and capital requirements of the Company although no specific plans or commitments are currently in place.  Amounts raised will be used for further development of the Company’s product, to provide financing for marketing and promotion and for other working capital purposes.  While the Company is putting forth its best efforts to achieve the above plans, there is no assurance that any such activity will generate funds that will be available for operations.

 

These conditions raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

Reverse merger

On November 3, 2011, the Company entered into a securities exchange agreement with Park Slope, LLC (the “Hardwired Majority Shareholder”), In4, Ltd., and all of the shareholders of In4 Ltd. On November 11, 2011, pursuant to the terms of the Exchange Agreement, the In4 Ltd shareholders transferred and contributed all of their shares to the Company, resulting in an acquisition of all of the outstanding In4 Ltd shares. In return, the Company issued to the In4 Ltd. shareholders, their designees or assigns, an aggregate of 1,000,000 shares of Series A convertible preferred stock, par value $0.001 per share of the Company (the “Series A Preferred Stock”), and 886,000 shares of Series B convertible preferred stock, par value $0.001 per share of the Company (the “Series B Preferred Stock”, and together with the Series A Preferred Stock the “Hardwired Exchange Shares”). The foregoing issuances of the Hardwired Exchange Shares to the In4 Ltd shareholders, their designees or assigns, constituted 100% of the issued and outstanding preferred stock of In4 Ltd. as of and immediately after the consummation of the transactions contemplated by the Exchange Agreement.

Following the acquisition the former stockholders of In4 Ltd. owned a majority of the issued and outstanding common stock of iGlue, Inc. and the management of In4 Ltd. controlled the Board of Directors of iGlue, Inc. and its wholly-owned Hungarian subsidiary In4 Ltd.. Therefore the acquisition has been accounted for as a reverse merger (the “Reverse Merger”) with In4 Ltd. as the accounting acquirer of iGlue. The Company has changed its prior name of Hardwired Inc. to iGlue, Inc. The accompanying consolidated financial statements of the Company reflect the historical results of In4 Ltd., and the consolidated results of operations of iGlue, Inc. subsequent to the acquisition date. In connection with the Exchange Agreement, iGlue, Inc. adopted the fiscal year end of In4 Ltd. as December 31.

All reference to shares and per share amounts in the accompanying consolidated financial statements have been restated to reflect the aforementioned shares exchange.

 

iGlue, Inc. (formerly Hardwired Interactive, Inc).

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

Business

Through In4, the Company aims to build the world’s largest semantic micro-search and content organizer (curation) company based around our Award Winning iGlue software. The Company considers iGlue to be one of the first and major Web 3.0 initiatives currently under development The Company’s focus is to utilize iGlue’s natural language processing and semantic micro-search capabilities to bring value added content to words on web pages. Rather than doing a search to find more information on a given topic (word) the software brings value added multimedia information as presented in a pop-up window. Images, videos, text, geographic locations, tweets, links, etc. The Company’s strategy is to deploy iGlue across the internet as a standalone, free consumer facing product, and at the same time provide value added corporate versions based around a subscription based business model and advertising revenue sharing.
 

The Company intends to provide iGlue in the following versions:

 

·

free, consumer facing plug-in version;

·

value added semantic advertising platform;

·

corporate version with semantic advertising and recommendation engine built in;

 

The Company expects to be world leaders in semantic technology, by having iGlue to be a unique ‘system’ of several interwoven computational principles the end result of which is the world’s best Web 3.0 search content organizer and search technology.

Basis of presentation

The accompanying consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America for financial information have been condensed pursuant to such rules and regulations. In the opinion of management, the accompanying financial statements include all adjustments (consisting of normal recurring accruals) considered necessary to make the financial statements not misleading as of and for the periods ended March 31, 2015, March 31, 2014 and for the period from September 19, 2007 (date of inception) to March 31, 2015.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies adopted in preparation of the financial statements are set out below.

Use of Estimates:

The preparation of the financial statements in conformity with (US) GAAP requires management to make estimates, judgments and assumptions that affect amounts reported herein. Management believes that such estimates, judgments and assumptions are reasonable and appropriate. However, due to the inherent uncertainty involved, actual results may differ from those based upon management’s judgments, estimates and assumptions. Critical accounting policies requiring the use of estimates are depreciation and amortization and share-based payments

 

iGlue, Inc. (formerly Hardwired Interactive, Inc).

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

Revenue Recognition:

Sales are recognized when there is evidence of a sales agreement, the delivery of the goods or services has occurred, the sales price is fixed or determinable and collectability is reasonably assured, generally upon shipment of product to customers and transfer of title under standard commercial terms. Sales are measured based on the net amount billed to a customer. Generally there are no formal customer acceptance requirements or further obligations. Customers do not have a general right of return on products shipped therefore no provisions are made for return.

Accounts Receivable and Allowance for Doubtful Accounts:

Accounts receivable are stated at historical value, which approximates fair value. The Company does not require collateral for accounts receivable. Accounts receivable are reduced by an allowance for amounts that may be uncollectible in the future. This estimated allowance is determined by considering factors such as length of time accounts are past due, historical experience of write offs, and customers’ financial condition.

Inventories:

Inventories are stated at the lower of cost, determined based on weighted average cost or market. Inventories are reduced by an allowance for excess and obsolete inventories based on management’s review of on-hand inventories compared to historical and estimated future sales and usage.

Fixed assets:

Fixed assets are stated at cost or fair value for impaired assets. Depreciation and amortization is computed principally by the straight-line method. Asset amortization charges are recorded for long lived assets. In the related periods, no asset impairment charges were accounted for.

Depreciation is recorded commencing the date the assets are placed in service and is calculated using the straight line basis over their estimated useful lives.

The estimated useful lives of the various classes of long-lived assets are approximately 3-7 years.

Pensions and Other Post-retirement Employee benefits:

In Hungary, pensions are guaranteed and paid by the state or by pension funds, therefore no pensions and other post-retirement employee benefit costs or liabilities are to be calculated and accounted by the Company.

Product warranty:

The Company accrues for warranty obligations for products sold based on management estimates, with support from sales, quality and legal functions, of the amount that eventually will be required to settle such obligations. At March 31, 2015 the Company had no warranty obligations..

Advertising costs:

Advertising and sales promotion expenses are expensed as incurred.

 

iGlue, Inc. (formerly Hardwired Interactive, Inc).

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

Research and development:

In accordance with ASC 730-10-25 “Accounting for Research and Development Costs,” all research and development (“R&D”) costs are expensed when they are incurred, unless they are reimbursed under specific contracts. Assets used in R&D activity, such as machinery, equipment, facilities and patents that have alternative future use either in R&D activities or otherwise are capitalized.

Income taxes:

The Company accounts for income taxes in accordance with ASC 740-10-25, “Accounting for Income Taxes”. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

Valuation allowances are provided against deferred tax assets to the extent that it is more likely than not that the deferred tax assets will not be realized.

Comprehensive Income (Loss):

ASC 220-10-25, “Accounting for Comprehensive Income,” establishes standards for reporting and disclosure of comprehensive income and its components (including revenues, expenses, gains and losses) in a full set of general-purpose financial statements. The items of other comprehensive income that are typically required to be disclosed are foreign currency items, minimum pension liability adjustments, and unrealized gains and losses on certain investments in debt and equity securities. Accumulated other comprehensive income, at March 31, 2015 is $109,846.

Translation of Foreign Currencies:

The U.S. dollar is the functional currency for all of the Company’s businesses, except its operations in Hungary. Foreign currency denominated assets and liabilities for this unit is translated into U.S. dollars based on exchange rates prevailing at the end of each period presented, and revenues and expenses are translated at average exchange rates during the period presented. The effects of foreign exchange gains and losses arising from these translations of assets and liabilities are included as a component of equity, under other comprehensive income.

Loss per Share:

Under ASC 260-10-45, “Earnings Per Share”, basic loss per common share is computed by dividing the loss applicable to common stockholders by the weighted average number of common shares assumed to be outstanding during the period of computation. Diluted loss per common share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period. There were no common stock equivalents or potentially dilutive securities outstanding during the periods ended March 31, 2015 and March 31, 2014, respectively. Accordingly, the weighted average number of common shares outstanding for the periods ended March 31, 2015 and March 31, 2014, respectively, is the same for purposes of computing both basic and diluted net income per share for such years.

 

 

iGlue, Inc. (formerly Hardwired Interactive, Inc).

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

 

Business Segment:

ASC 280-10-45, “Disclosures About Segments of an Enterprise and Related Information,” establishes standards for the way public enterprises report information about operating segments in annual financial statements and requires reporting of selected information about operating segments in interim financial statements regarding products and services, geographical areas and major customers. The Company has determined that under ASC 280-10-45, there are no operating segments since substantially all business operations, assets and liabilities are in Hungarian geographic segment.

 Recent Accounting Pronouncements:

There are no recent accounting pronouncements affecting the Company.

NOTE 3 - OTHER RECEIVABLES

 

		March 31, 2015				December 31, 2014
Taxes receivable		$	17,602			$	18,873
Total			17,602				18,873

NOTE 4 - INTANGIBLE ASSETS

Intangibles consisted of the followings at March 31, 2015 and December 31, 2014:

 

		March 31, 2015				December 31, 2014
Rights and software		$	12,979			$	12,979
Total			12,979				12,979
Less: Accumulated amortization			(12,890	)			(12,791	)
Net intangibles			89				188

 

 

iGlue, Inc. (formerly Hardwired Interactive, Inc).

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

 

NOTE 5 - FIXED ASSETS

Net property and equipment consisted of the followings at March 31, 2015 and December 31, 2014:

 

		March 31, 2015				December 31, 2014
Computers and office equipments		$	38,761			$	38,761
Total			38,761				38,761
Less: Accumulated depreciation			(38,568	)			(38,528	)
Net property and equipment			193				233

NOTE 6 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES

 

		March 31, 2015				December 31, 2014
Accounts payable		$	10,200			$	10,937
Accrued expenses			91,679				92,600
Total			101,879				103,537

 

 

iGlue, Inc. (formerly Hardwired Interactive, Inc).

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

 NOTE 7 - NOTE PAYABLE

 

On November 3, 2011, the Company authorized and issued a debenture to the order of Park Slope, LLC.  The debenture must be paid in full by the maturity date and accrued interest on the outstanding amount of the loan at a rate of twelve percent (12%) per annum in one lump sum payable on the original maturity date of December 31, 2012. The Note was extended to December 31, 2015. The accrued loan interest amounts to $306,740 at March 31, 2015.

As such note payable was issued immediately prior to the reverse merger, such issuance was recorded as additional compensation by the Company prior to the reverse merger. Accordingly, such compensation is reflected in the accompanying consolidated balance sheet as the accumulated deficit of the Company, and will not be reflected in the Statement of operations, as such compensation expense was structured as an expense prior to the recapitalization.

At any time between the original issue date and the maturity date (December 31, 2015) unless previously repaid by the Company, this Debenture shall be convertible into shares of common stock of the Company, par value $0.001 per share, at the option of the holder, in whole or in part. The holder shall effect conversions by delivering to the Company the form of Notice of Conversion specifying therein the amount of the loan plus interest to be converted. The date which the Company receives the Notice of Conversion shall be the conversion date.

On any conversion date, the loan, or any portion thereof, is convertible into shares of the Company’s common stock at a conversion price equal to the average of the immediately preceding three closing bid prices prior to receipt by the Company of the Notice of Conversion to the Company.

 

iGlue, Inc. (formerly Hardwired Interactive, Inc).

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

NOTE 8 - OTHER LIABILITIES

 

		March 31, 2015				December 31, 2014
Liabilities to employees		$	2,900			$	329
Accrued loan interest			306,740				284,548
Other			48,179				53,494
Total			357,819				338,371

 

NOTE 9 - STOCKHOLDERS’ EQUITY

 

Stock based compensations

 

The Company does not currently have any outstanding options.

 

Warrants

 

On June 11, 2012, the Company issued a Common Stock Purchase Warrant to PDV Consulting, Kft (“PDV”) Under the terms of the warrant, PDV can acquire a total of 1,500,000 shares of our common stock at a per share price of $10.00. The warrant expires on June 12, 2017. The warrants were issued as part of the cost of raising equity.

 

The company evaluated the warrants based on essential features that would qualify the warrants as liability. Because the warrants did not include any of the qualifying features, the warrants were classified as equity. As such the Company did not capitalize these warrants because the accounting entries would not have an impact on the financial statements. Instead, the Company will expense these warrant valued at the date of issuance unless these warrants are exercised within one year after the date of issuance.

 

As of March 31, 2015, the Company has four common stock purchase warrants each with a term of five years after their issuance date and an exercise price of $5.00, $7.00, $9.00 and $10.00 per share, respectively. The $5.00, $7.00 and $9.00 warrants entitle the holder to purchase from the Company up to 1,000,000 warrant shares each, while the $10.00 warrant holder can acquire up to 1,500,000 shares. As of December 31, 2012 the Company has four Warrants outstanding that are exercisable for an aggregate of up to 4,500,000 shares of its common stock.

 

As of March 31, 2015,, there were 1,000,000 shares of Series A Preferred Stock issued and outstanding held by the Company’s former President Peter Vasko. Commencing on January 1, 2013, and continuing until December 31, 2017, Mr. Vasko may convert 200,000 shares of Series A Preferred Stock per calendar year into shares of Common Stock at the conversion ratio of 3,000,000 shares of Common Stock for each 200,000 shares of Series A Preferred Stock. Mr. Vasko is entitled to vote together with the holders of the Common Stock and has 42 votes for every share of Series A Preferred Stock held by Mr. Vasko at the time Mr. Vasko may make such vote.

 

The fair value of the liability using Black-Scholes valuation at March 31, 2015 is nil which is classified at short term liabilities. The fair value of the liability is established as a Level 3 fair value measurement.

iGlue, Inc. (formerly Hardwired Interactive, Inc).

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIODS ENDED DECEMBER 31, 2012 AND DECEMBER 31, 2011

 

NOTE 9 - STOCKHOLDERS’ EQUITY (Continued)

 

Stock split

 

As of February, 2012, there were 1,000,000 shares of Series A Preferred Stock issued and outstanding held by the Chief Executive Officer and sole director, Peter Vasko. Commencing on January 1, 2013, and continuing until December 31, 2017, Mr. Vasko may convert 200,000 shares of Series A Preferred Stock per calendar year into shares of Common Stock at the conversion ratio of 3,000,000 shares of Common Stock for each 200,000 shares of Series A Preferred Stock. Mr. Vasko is entitled to vote together with the holders of the Common Stock and has 42 votes for every share of Series A Preferred Stock held by Mr. Vasko at the time Mr. Vasko may make such vote.

 

iGlue, Inc. (formerly Hardwired Interactive, Inc).

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

 

NOTE 10 - GENERAL AND ADMINISTRATION

 

		For the period ended March 31, 2015				For the period ended March 31, 2014
Material expenses		$	—			$	—
Stock based compensation			—				48,000
Cost of services			1,050				3,685
Depreciation and amortization			116				247
Other expenses
Total			1,166				51,932

 

 

iGlue, Inc. (formerly Hardwired Interactive, Inc).

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

 

NOTE 11 - FINANCIAL EXPENSES AND GAINS, NET

 

 

		For the period ended March 31, 2015				For the period ended March 31, 2014
Interest expense		$	22,192			$	22,192
Interest income			—				—
Exchange gains, net			—				—
Total			22,192				22,192

 

NOTE 12 - SUBSEQUENT EVENTS

No subsequent events incurred.

 

 

 

 

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

This quarterly report on Form 10-Q and other reports filed by the Company from time to time with the SEC contain or may contain forward-looking statements and information that are (collectively, the “Filings”) based upon beliefs of, and information currently available to, the Company’s management as well as estimates and assumptions made by Company’s management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the Filings, the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan,” or the negative of these terms and similar expressions as they relate to the Company or the Company’s management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including the risks contained in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, filed with the SEC, relating to the Company’s industry, the Company’s operations and results of operations, and any businesses that the Company may acquire. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.

 

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

 

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates and actual results. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result. The following discussion should be read in conjunction with our consolidated financial statements and notes thereto appearing elsewhere in this report.

 

Plan of Operation

 

Our Company has developed an internet semantic search and content organizer application called iGlue. iGlue makes sense of search results based on context by using automatic annotation of web pages with the entities present in iGlue’s proprietary semantic database. iGlue extracts information from the annotated page and stores it, thereby automatically expanding the iGlue database.

 

iGlue functions by determining the specific meaning a given phrase uses. For example, “Smith” may refer to a profession or a given name, “JFK” may mean the president, the airport, or the space center. iGlue works by disambiguating between these different connotations and assigning the correct meaning to the word automatically. The iGlue system then displays relevant information such as facts, pictures, videos, geographic locations, related links, products, and advertisements about the word or entity within an appealing compact pop up window containing multimedia enhancements.

 

As of March 31, 2015, the Company has completed development of iGlue and has released its first version to the general public. As of March 31, 2015 we have removed iGlue from the public website because of server relocation and redesign of some of its functions based on user feedback. We plan on relaunching the application in Q2 of 2015. Upon relaunch we will focus on international expansion and growth of our product.

 

Upon relaunch we plan to implement an international marketing campaign aimed at raising iGlue’s user base, increase our employee numbers for further development work, launch a mobile version of iGlue on the iPad and open a new sales and marketing office in the United States. We intend to launch the administrator interface of our advertising system and increase the size of our semantic database to 500 million entities while adding 4 more languages including Spanish, Russian, German and French.

 

Results of Operations

 

For the Three Months Ended March 31, 2015 Compared to the Three Months Ended March 31, 2014

 

		For the Three Months Ended March 31,								September 19, 2007 (inception) through March 31,
		2015				2014				2015
Net sales		$	—				—				—
Gross profit		$	—				—				—
General and administrative expenses		$	1,166				51,932				9,138,278
Loss from operations		$	1,166				51,932				11,190,080
Interest Expenses and Exchange Gains		$	22,192				22,192				325,112
Net loss		$	23,358				74,124				11,515,192

 

Revenue

For the three months ended March 31, 2015 and 2014, the Company had no revenues.

 

Research and development

For the three months ended March 31, 2015 and March 31, 2014 research and development expenses were nil . The Company ceased researched and development activities in 2013.

 

General, selling and administrative expenses

For the three months ended March 31, 2015 general, selling and administrative expenses were $1,166 as compared to $51,932 for the three months ended March 31, 2014. Decrease in General, selling and administrative expenses are attributable toshare based payments made in the amount of USD 48,000 by March 31, 2014

Liquidity and Capital Resources

 

The following table summarizes total current assets, liabilities and working capital at March, 2015 and December 31, 2014.

 

		March 31, 2015				December 31, 2014
Current Assets		$	18,127			$	19,436
Current Liabilities		$	1,209,698			$	1,191,908
Working Capital Deficit		$	1,191,571			$	1,172,472

 

At March 31, 2015, the company had a working capital deficit of $1,191,571, as compared to a working capital deficit of $1,172,472, at December 31, 2014, an increase of $19,099. The increase in working capital deficit is primarily related to an increase in debt financing and operating liabilities.

 

Loss from operations for the three months ended March 31, 2015 and 2014, was $1,166 and $51,932, respectively. The net loss for the three months ended March 31, 2015 and 2014, was $23,358 and $74,124 respectively. Cash used in operating activities for the three months ended March 31, 2015 and 2014 was primarily for legal and professional fees.

 

Going concern

 

On the Company’s Annual Report on Form 10-K, filed on April 15, 2015, our auditors have expressed their substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to generate future profitable operations and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. Our management has no formal plan in place to address this concern but considers that we will be able to obtain additional funds by equity financing and/or related party advances; however there is no assurance of additional funding being available.

 

Our resources are currently insufficient to fund our operations and capital requirements. Management has determined that additional capital will be required in the form of equity or debt securities. In addition, if we cannot raise additional short term capital we will be forced to continue to further accrue liabilities due to our limited cash reserves. There are no assurances that management will be able to raise capital on terms acceptable to the Company. If we are unable to obtain sufficient amounts of additional capital, we may be required to reduce the scope of our planned development, which could harm our business, financial condition and operating results. If we obtain additional funds by selling any of our equity securities or by issuing common stock to pay current or future obligations, the percentage ownership of our stockholders will be reduced, stockholders may experience additional dilution, or the equity securities may have rights preferences or privileges senior to the common stock. If adequate funds are not available to us when needed on satisfactory terms, we may be required to cease operating or otherwise modify our business strategy.

 

Critical Accounting Policies

 

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements require the use of estimates and assumptions that affect the reported amounts of assets and liabilities and the 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. Our management periodically evaluates the estimates and judgments made. Management bases its estimates and judgments on historical experience and on various factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates as a result of different assumptions or conditions.

 

The methods, estimates, and judgment we use in applying our most critical accounting policies have a significant impact on the results we report in our financial statements. The SEC has defined “critical accounting policies” as those accounting policies that are most important to the portrayal of our financial condition and results, and require us to make our most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based upon this definition, our most critical estimates relate to the fair value of warrant liabilities. We also have other key accounting estimates and policies, but we believe that these other policies either do not generally require us to make estimates and judgments that are as difficult or as subjective, or it is less likely that they would have a material impact on our reported results of operations for a given period. For additional information see Note 2, “Summary of Significant Accounting Policies” in the notes to our reviewed financial statements appearing elsewhere in this report. Although we believe that our estimates and assumptions are reasonable, they are based upon information presently available, and actual results may differ significantly from these estimates.

 

Off-Balance Sheet Arrangements

 

We do not have any off-balance sheet arrangements.

 

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

 

We do not hold any derivative instruments and do not engage in any hedging activities.

 

Item 4. Controls and Procedures.

 

(a) Evaluation of Disclosure Controls and Procedures

 

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Principal Executive Officer (“PEO”) and Principal Financial Officer (“PFO”), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s PEO and PFO concluded that the Company’s disclosure controls and procedures were not effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s PEO and PFO, as appropriate, to allow timely decisions regarding required disclosure. Disclosure controls are not effective due to the material weakness in internal control over financial reporting disclosed in our annual report on Form 10-K for the year ended December 31, 2014

 

(b) Changes in Internal Control over Financial Reporting

 

There have been no changes in the Company’s internal control over financial reporting during the latest fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

 

Item 1A. Risk Factors.

 

We believe there are no changes that constitute material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2014, filed with the SEC on April 15, 2015.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

 

Item 3. Defaults Upon Senior Securities.

 

There were no defaults upon senior securities during the quarter ended March 31, 2015.

 

Item 4. Mine Safety Disclosures.

 

Not applicable.

 

Item 5. Other Information.

 

There is no other information required to be disclosed under this item which has not been previously disclosed.

 

Item 6. Exhibits.

 

Exhibit No.		Description
31.1		Certification of Principal Executive Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 302 of 2002*
31.2		Certification of Principal Financial Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 302 of 2002*
32.1		Certification of Principal Executive Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
32.2		Certification of Principal Financial Officer, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

 

* Filed herewith

 

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.

 

	IGLUE, INC.
	(Registrant)
Dated: May 15, 2015
	By:	/s/ Peter Boros
		Name:	Peter Boros
		Title:	Principal Executive Officer and Chief Financial Officer

 

 

 

Exhibit 31.2

Certification of Principal Accounting Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
and Securities and Exchange Commission Release 34-46427

I, Peter Boros, certify that:

 

1.	I have reviewed this Form 10-Q of iGlue, Inc.;

 

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

Date: May 15, 2015	/s/ Peter Boros
	Peter Boros
	Principal Financial Officer

 

Exhibit 31.2

Certification of Principal Accounting Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
and Securities and Exchange Commission Release 34-46427

I, Peter Boros, certify that:

 

1.	I have reviewed this Form 10-Q of iGlue, Inc.;

 

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

Date: May 15, 2015	/s/ Peter Boros
	Peter Boros
	Principal Financial Officer

 

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of iGlue Inc. (the “Company”) on Form 10-Q for the period ending March 31, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Peter Boros, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

 

(1)	the Report fully complies with the requirements of Section 13 (a) or 15 (d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

 

(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: May 15, 2015

 

	/s/ Peter Boros
	Peter Boros
	Title:    President & Chief Executive Officer

 

 

This certification accompanies this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of iGlue Inc. (the “Company”) on Form 10-Q for the period ending March 31, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Peter Boros, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

 

(1)	the Report fully complies with the requirements of Section 13 (a) or 15 (d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

 

(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: May 15, 2015

 

 

	/s/ Peter Boros
	Peter Boros
	Title:  Principal Financial Officer

 

 

This certification accompanies this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.