Wally World Media, Inc - Annual Report: 2014 (Form 10-K)

UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

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

For the fiscal year ended September 30, 2014

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

For the transition period from ___________ to ___________

Commission File Number:  333-185694

.

Wally World Media, Inc.

 (Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code: (732) 246-0439  

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes  o     No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes  x     No  o

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 preceding 12 months (or for such shorter period that the registrant was required to file such reports), 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.   o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, 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.

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

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter as of March 31, 2014 was $13,026,000.

As of December 18, 2014 the registrant had 38,600,000 shares of its common stock outstanding.

Documents Incorporated by Reference: None.

WALLY WORLD MEDIA, INC.

FORM 10-K

TABLE OF CONTENTS

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K (this “Report”) contains “forward-looking statements” within the meaning of the Section 27A of the Securities Act, and Section 21E of the Exchange Act. Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. These forward-looking statements are found at various places throughout this Report and include information concerning possible or assumed future results of our operations; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future operations, future cash needs, business plans and future financial results, and any other statements that are not historical facts.

From time to time, forward-looking statements also are included in our other periodic reports on Forms 10-Q and 8-K, in our press releases, in our presentations, on our websites and in other materials released to the public.  Any or all of the forward-looking statements included in this Report and in any other reports or public statements made by us are not guarantees of future performance and may turn out to be inaccurate. These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors.  Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Report. All subsequent written and oral forward-looking statements concerning other matters addressed in this Report and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Report.

Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.

PART I

Overview

Wally World Media, Inc. was incorporated in the State of Nevada on May 17, 2012.  We are a start-up business and are still working on our software and platform. We have developed a social media website that we refer to as “YouPop.” Our “YouPop” platform launched for public use in April 2013. On March 19, 2014, we launched reShoot™, a free mobile video camera app for Apple’s iPhone and iPad. reShoot features patent-pending “on the fly” video editing technology to rewind and re-shoot unwanted portions of video. Portions of our YouPop technology have been incorporated into the reShoot app. The reShoot app includes proprietary functionality which allows users to pause recordings (even when the app is closed), live preview of videos, record new footage into existing videos, and insert clips from the camera roll. reShoot provides a mobile video recording and editing studio within a user-friendly app.

The YouPop Platform 

In April 2013, we launched our YouPop Platform. The following is how the YouPop platform operated. Users are permitted to register on our website and place job offerings for a service. For example, a user will be able to post a job offer to provide a video of a specific content (i.e. personalized birthday wish, practical joke, dares, etc.).  Other users will be able to view that offer and fulfill that offer by contacting the person and agreeing to provide that service. If the offer is accepted, the person who posted the job will provide us with their credit card information and we will hold the information until the service provider successfully completes the work.  It is intended that upon acceptance of the completed task, we will charge the credit card the amount that was to be paid plus a service fee and credit the service provider’s account with the agreed upon amount.  We will generate revenue by charging both the person looking for services to be provided and the service provider with a transaction fee or service charge of up to 15% from each party.

Our payment processing is being set up and structured as a conditional payment system. We expect to get a customer’s authorization to charge his or her credit card at some future time when the services are complete. This method of payment pre-authorizes the charge but we do not actually charge the credit card until the services are completed. In the event that services are completed and we attempt to charge the credit card but it is rejected or the financial institution does not accept the charge, if possible, the services will be blocked and will not be delivered. We will not guarantee payment and this is a risk that the service provider takes. If the payment is not made at the end of the services, then the service provider does not get paid and the person requesting the service will not get access to the material he or she requested.

In order to resolve any disputes that may arise between two contracting parties as to whether service was successfully completed, we will be implementing dispute resolution policies and procedures. These policies will include a process for the service provider to submit a request for review by an independent panel consisting of officers of the Company that will review, arbitrate and mediate any dispute. We recognize and understand that there may be disputes and disagreements between parties and we will do our best to resolve them. But, in the event there is no resolution, each party bears the risk of non-performance or non-payment.

We expect that YouPop will be attractive for both businesses and individuals. We expect that people will use our service to complete specific micro-services, such as:

Once operational, we do recognize that it is possible that some users may try to use our platform for unlawful transactions. We plan to implement the following steps to try to prevent, or limit, unlawful transactions or acts, from occurring on or through the platform. We will have a procedure for manual review of each posting and a reporting mechanism for users of the site to notify us of any inappropriate content that may appear. While we will do our best to prevent these unlawful postings, we do recognize that they may occur and it is possible that we could potentially incur substantial liability if these unlawful postings do occur.

reShoot™

On March 19, 2014 the Company launched reShoot™, a free mobile video camera app for Apple’s iPhone and iPad. reShoot features patent-pending “on the fly” video editing technology to rewind and re-shoot unwanted portions of video. Additional proprietary functionality allows users to pause recordings (even when the app is closed), live preview of videos, record new footage into existing videos, and insert clips from the camera roll. reShoot provides a mobile video recording and editing studio within a user-friendly app.

Users can record and save videos of any length and post them to social networks and video sharing platforms such as Facebook, Twitter and YouTube. reShoot also features an auto-pause function that allows users to receive a phone call while recording without losing the video.

reShoot was developed to solve two very significant problems with mobile digital video. The first being that there was no easy way to correct a mistake without having editing skills. The second problems was on the iPhone, every time you started and stopped the video camera, it created a new file. With reShoot you can add new video to a previously existing video clip. Our videoArc™ capability allows you to pause and resume recording and you can import a saved clip from your camera roll and resume recording, thus eliminating the problem of many little video clips. Instead of capturing dozens of clips, videoArc provides a single video stream or montage that can be edited and extended. There are no restrictions on video length other than the available storage of the device. This feature makes it easy to organize videos captured at concerts, vacations, parties, sporting events, meetings and other activities into one cohesive stream that is easy to share with friends, family and colleagues. reShoot enables almost anyone to be a film producer without requiring editing skills; and by doing this we have unlocked mobile video’s real potential. Whether you need to make a video to sell your car or want to create a video invitation, it’s now easy with reShoot. It is how we believe all video cameras should work.

Key Features:

reShoot’s “on the fly” video recording and editing tools provide the following capabilities:

Pricing & Availability

reShoot is a free app available in the iTunes store for Apple iPhones and iPads running iOS 7 or above.

Emoji Cam

On July 31, 2014 we launched the Emoji Cam Photo & Video Camera app for Apple’s iPhone and iPad. Emoji Cam, featuring patent pending Emoji Everything, can turn any picture on a user’s camera roll into an Emoji or Sticker that can be added anywhere in a photo or video shot with Emoji Cam, or imported from your Camera Roll. Emoji Cam is a comprehensive photo and video app featuring our Patent Pending “Edit On the Fly” technology that enables users to edit, add special effects, speech bubbles, sound effects and music tracks to their photos and video. Emoji Cam  was renamed reShoot Video & Photo Camera in October 2014 and is a free app on Apple’s iTunes store for Apple iPhones and iPads running iOS 8, or at reshoot.com. The Emoji Everything, Emoticons, Speech Bubbles and Sound effects in-app purchases are also currently offered for free as part of a special introductory offer. reShoot with Emoji Everything offers users an assortment of shapes and options to customize any picture on their camera roll into an emoji that can be placed anywhere in a photo or video.

Custom Emojis that the user creates can also be saved for later use. In addition to Emoji Everything, Emoji Cam comes packed with ready to use emoticons, stickers, customizable speech bubbles and sound effects to create personalized photos and videos that can be shared via Facebook, Instagram, Twitter and other social networks. Emoji Cam’s video camera is powered by reShoot Technology that allows you to record video, rewind, pause, preview, reShoot, edit and add special effects with Emoji Cams. "On the Fly" editing tools let you move easily between recording and editing video. Our Pause Recording feature lets you stop and start recording on the same file as often as you want, and our Auto Save protects your video from loss. The Video Arc features allow you to import a video from your camera roll and seamlessly continue recording on it. Emoji Cam with Emoji Everything adds a new dimension of fun and flexibility for regular mobile camera users who want to create interesting and professional photos and videos without any editing skills.

Other Events

On April 20, 2014, Vape Shop Holdings, Inc. (“Vape Shop”), a wholly-owned subsidiary of the Company signed a Joint Venture Agreement (the “JV Agreement”) with Vapir, Inc., a California company (“Vapir”). Under the terms of the JV Agreement, Vape Shop would make available its technology platforms and other expertise to Vapir in the legal cannabis industry and use its best efforts to market, promote, sell and distribute any products that are developed. As consideration, Vape Shop would receive 1.5 million shares of common stock of Vapir and warrants for another 1.5 million shares.  The JV Agreement had a term of 18 months from the date thereof and can be terminated by either party by giving 30 days prior written notice.

In June 2014, this joint venture was terminated by mutual consent. We did not issue any shares of common stock or warrants to Vapir, Inc. and do not owe Vapir, Inc. any further consideration under the terms of the joint venture or its termination.

Patents and Trademarks

On October 19, 2013 the Company filed a provisional patent application with the United States Patent and Trademark Office. The provisional patent is titled “Process and System for Real-Time Mobile Video Editing.” The invention relates to a process and system for conducting real-time video editing on mobile devices, such as smart phones or tablets.

On October 29, 2013, we filed a trademark application for reShoot with the United States Patent & Trademark Office under IC 009. US 021 023 026 036 038. G & S: Audio and video recordings featuring real-time video editing.  

In December 2013 we completed initial development of our reShoot video technology, a new video camera app for Apple iPhones and iPads running iOS 7.   Featuring its patent pending “on the Fly video editing technology,” reShoot makes it easy to correct videos while you are recording them by rewinding and reshooting over the part you do not want.  Utilizing the iPhone’s camera, reShoot provides the capability to record, rewind, pause, annotate and reshoot videos, and post them to social networks and video sharing platforms such as Facebook, Twitter or YouTube.

We have not filed any other patents or trademarks but may in the future, determine it is advisable to file trademarks for enhancements to our current applications or new applications we may develop.

Revenue Model

We have not yet completed the design and implementation of our internet platform, YouPop. However, we intend to generate revenue through the use of a transaction fee once a job is completed. We expect that we will charge our users a percentage of the cost of completing a task. The exact percentage has not been determined yet, however, we expect to charge each party a certain percentage of up to 15% of the total cost of the services, or a total of up to 30% of the cost of the services provided from both parties combined.  

We will also raise revenue from the users of our reShoot app with the in-app purchases we offer including Emoji Everything, Emoticons, Speech Bubbles and Sound effects. In the future, we may also generate revenue from in-app marketing services .

Competition

We expect that our chief competition will be from the rapidly growing crowdsourcing and crowdfunding industry. As a result, the number and sophistication of competitors are also rapidly increasing. We hope to distinguish ourselves from those competitors by the combination of services we offer and the high quality of our website.

There are currently hundreds of active sites that could compete with our business, with new ones being launched on a regular basis.  Crowdsourcing sites such as Fiverr.com, oDesk.com and Guru.com are just a few that offer substantial competition.  Additionally, traditional online marketplaces such as ebay.com and craigslist.org are additional competition.  

As a mobile video editing application, we are subject to intense competition from providers of similar services as well as potential new types of online services, including interest-based social products. These services include various mobile applications, such as Weixin and Mobile QQ.

Many companies worldwide are dedicated to video creating and editing. We expect more companies to enter this industry. Our competitors vary in size from small companies to very large companies with dominant market shares and substantial financial resources. The Company’s app will be in competition with these companies, such as Videoshop, Magisto, and others. Many of our competitors have significantly greater financial, marketing and development resources than we have. As a result, we may not be able to devote adequate resources to develop, acquire or license new technologies, undertake extensive marketing campaigns, adopt aggressive pricing policies or adequately compensate our developers to the same degree as certain of our competitors. As video editing apps in our markets are relatively new and rapidly evolving, our current or future competitors may compete more successfully as the industry matures. In particular, any of our competitors may offer products and services that have significant performance, price, creativity and/or other advantages over our games and technologies. These products and services may significantly affect the demand for our services. In addition, any of our current or future competitors may be acquired by, receive investments from or enter into other strategic relationships with larger, longer-established and better-financed companies and therefore obtain significantly greater financial, marketing and technology licensing and development resources than we have.

Employees

As of September 30, 2014 we had five (5) full-time employees consisting of our Chief Executive Officer, our Director of Marketing and three programmers, and one (1) part-time employee consisting of our Chief Financial Officer. Each full-time employee spends approximately 40 hours per week on Company matters.

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is vStock Transfer, LLC. The transfer agent’s address is 77 Spruce Street, Suite 201, Cedarhurst, New York 11516.

Risks Related to Our Business

OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM HAS EXPRESSED SUBSTANTIAL DOUBT AS TO OUR ABILITY TO CONTINUE AS A GOING CONCERN.

The audited consolidated financial statements included in the registration statement have been prepared assuming that we will continue as a going concern and do not include any adjustments that might result if we cease to continue as a going concern. We have incurred significant losses since our inception. We have funded these losses primarily through the sale of securities.

Based on our financial history since inception, in their report of independent registered public accounting firm on the consolidated financial statements for the year ended September 30, 2014, our independent registered public accounting firm has expressed substantial doubt as to our ability to continue as a going concern.

There can be no assurance that we will have adequate capital resources to fund planned operations or that any additional funds will be available to us when needed or at all, or, if available, will be available on favorable terms or in amounts required by us. If we are unable to obtain adequate capital resources to fund operations, we may be required to delay, scale back or eliminate some or all of our operations, which may have a material adverse effect on our business, results of operations and ability to operate as a going concern.

IF WE ARE UNABLE TO SECURE ADDITIONAL CAPITAL, WE MAY BE UNABLE TO CONTINUE OPERATING AND DEVELOPING OUR ONLINE PLATFORMS AND MAY BE FORCED TO CEASE OPERATIONS.

The development of our intellectual property, websites and services will require the commitment of substantial resources to implement our business plan. We expect that we would need a minimum of approximately an additional $150,000 in order to be in a position to fund our operations for a period of one year. Based on our current cash on hand, we estimate that we have sufficient cash to allow us to operate our business for a period of two (2) months. Currently, we have no established bank-financing arrangements. Therefore, it is likely we would need to seek additional financing through subsequent future private offering of our equity securities, or through strategic partnerships and other arrangements with corporate partners. We have no current plans for additional financing.

We cannot give you any assurance that any additional financing will be available to us, or if available, will be on terms favorable to us. The sale of additional equity securities will result in dilution to our stockholders. The occurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financing covenants that would restrict our operations. Additionally, if we are successful in obtaining additional funding, the terms of that additional financing may be disadvantageous to investors in the current offering. If adequate additional financing is not available on acceptable terms, we may not be able to implement our business development plan or continue our business operations.

WE HAVE NOT GENERATED ANY REVENUE AND OUR PLATFORMS ARE NOT YET FULLY OPERATIONAL, IF OUR WEBSITES AND SOCIAL NETWORKS DO NOT BECOME OPERATIONAL OR IF THEY FAIL TO GAIN MARKET ACCEPTANCE, WE MAY NOT HAVE SUFFICIENT CAPITAL TO PAY OUR EXPENSES AND TO CONTINUE TO OPERATE.

Our ultimate success will depend on generating revenues from micro-service transactions. In the future, we plan on developing advertising, and affiliate programs to generate revenue.  We have no direct advertising sales of our own. All of our advertising revenue is dependent on independent third parties. We have not generated any revenue and have not completed our platforms and, as a result, if we never become operational or if we do not generate enough users, once we are operational, we may be unable to generate sufficient revenues from user transactions. We may not achieve and sustain market acceptance sufficient to generate revenues or to attract advertising revenue sufficient to cover our costs and allow us to become profitable or even continue to operate.

WE OPERATE IN A HIGHLY COMPETITIVE INDUSTRY AND COMPETE AGAINST MANY LARGE COMPANIES WHICH COULD HARM OUR BUSINESS.

Many companies worldwide are dedicated to social networking and similar services related to the purchase and sale of virtual products. We expect more companies to enter this industry. Our competitors vary in size from small companies to very large companies with dominant market shares and substantial financial resources. Many of our competitors have significantly greater financial, marketing and development resources than we have. As a result, we may not be able to devote adequate resources to develop, acquire or license new technologies, undertake extensive marketing campaigns, adopt aggressive pricing policies or adequately compensate our developers to the same degree as certain of our competitors. As virtual products in many of our proposed markets are relatively new and rapidly evolving, our current or future competitors may compete more successfully as the industry matures. In particular, any of our competitors may offer products and services that have significant performance, price, creativity and/or other advantages over our technologies. These products and services may significantly affect the demand for our services. In addition, any of our current or future competitors may be acquired by, receive investments from, or enter into other strategic relationships with larger, longer-established and better-financed companies and therefore obtain significantly greater financial, marketing and technology licensing and development resources than we have. If we are unable to compete effectively in our principal markets, our business, financial condition and results of operations could be materially and adversely affected.

WE MAY INCUR SIGNIFICANT COSTS TO BE A PUBLIC COMPANY TO ENSURE COMPLIANCE WITH U.S. CORPORATE GOVERNANCE AND ACCOUNTING REQUIREMENTS AND WE MAY NOT BE ABLE TO ABSORB SUCH COSTS.

We may incur significant costs associated with our public company reporting requirements, costs associated with newly applicable corporate governance requirements, including requirements under the Sarbanes-Oxley Act of 2002 and other rules implemented by the Securities and Exchange Commission. We expect these costs to be approximately $125,000 per year. We expect all of these applicable rules and regulations to significantly increase our legal and financial compliance costs and to make some activities more time consuming and costly. We also expect that these applicable rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our board of directors or as executive officers. We are currently evaluating and monitoring developments with respect to these newly applicable rules, and we cannot predict or estimate the amount of additional costs we may incur or the timing of such costs. In addition, we may not be able to absorb these costs of being a public company which will negatively affect our business operations.

WE ARE AN “EMERGING GROWTH COMPANY,” AND ANY DECISION ON OUR PART TO COMPLY ONLY WITH CERTAIN REDUCED DISCLOSURE REQUIREMENTS APPLICABLE TO “EMERGING GROWTH COMPANIES” COULD MAKE OUR COMMON STOCK LESS ATTRACTIVE TO INVESTORS.

We are an “emerging growth company,” as defined in the JOBS Act, and, for as long as we continue to be an “emerging growth company,” we expect and fully intend to take advantage of exemptions from various reporting requirements applicable to other public companies but not to “emerging growth companies,” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We could be an “emerging growth company” for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our annual gross revenues exceed $1 billion, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period.

In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.  We have elected to opt in to the extended transition period for complying with the revised accounting standards. We have elected to rely on these exemptions and reduced disclosure requirements applicable to “emerging growth companies” and expect to continue to do so.

OUR FUTURE SUCCESS IS DEPENDENT, IN PART, ON THE PERFORMANCE AND CONTINUED SERVICE OF DARIN MYMAN, OUR CHIEF EXECUTIVE OFFICER AND SOLE DIRECTOR, AND ADAM WASSERMAN, OUR CHIEF FINANCIAL OFFICER.

Our future ability to execute our business plan depends upon the continued service of our executive officers, including Darin Myman, Chief Executive Officer, and Adam Wasserman, our Chief Financial Officer.  Mr. Myman currently does not have any employment agreement with us. We have signed an engagement letter with Mr. Wasserman through CFO Oncall, Inc., a business partially owned by Mr. Wasserman that provides CFO services to various companies.  If we lost the services of one or more of our key personnel, or if one or more of our executive officers or employees joined a competitor or otherwise competed with us, our business may be adversely affected. In particular, the services of key members of our research and development team would be difficult to replace. 

OUR KEY PERSONNEL MAY NOT PROVIDE MORE THAN TWENTY HOURS OF TIME PER WEEK TO OUR BUSINESS, WHICH MAY CAUSE OUR BUSINESS TO FAIL.

Our future ability to execute our business plan depends upon the continued service of our executive officers, Darin Myman, our Chief Executive Officer and Chairman, Adam Wasserman, Chief  Financial Officer, and other key technology, marketing, sales and support personnel or other employees.   Mr. Wasserman is Chief Executive Officer of CFO Oncall, Inc. and CFO Oncall Asia, Inc. (collectively “CFO Oncall”), where he owns 80% and 100% of such businesses, respectively.  All compensation paid to Mr. Wasserman is paid to CFO Oncall, Inc. CFO Oncall, Inc. provides chief financial officer services to various companies. Mr. Wasserman also serves as chief financial officer of Cleantech Solutions International, Inc., Oriental Dragon Corp. and Vapir Enterprises, Inc. In addition to Mr. Wasserman’s time, CFO Oncall has full-time dedicated, professional employees that also assist Mr. Wasserman with our Company’s financial matters and communication needs.   As such, Mr. Wasserman may be limited in the amount of time he can devote to the Company.  

WE MAY BE SUBJECT TO CLAIMS WITH RESPECT TO THE INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHT OF OTHERS, WHICH COULD RESULT IN SUBSTANTIAL COSTS AND DIVERSION OF OUR FINANCIAL AND MANAGEMENT RESOURCES TO DEFEND SUCH CLAIMS AND/OR LAWSUITS AGAINST US AND COULD HARM OUR BUSINESS.

We cannot be certain that our proprietary technologies will not infringe upon patents, copyrights or other intellectual property rights held by third parties. While we know of no basis for any claims of this type, the existence of and ownership of intellectual property can be difficult to verify and we have not made an exhaustive search of all patent filings. Additionally, most patent applications are kept confidential for twelve to eighteen months, or longer, and we would not be able to be aware of potentially conflicting claims that they make. We may become subject to legal proceedings and claims from time to time relating to the intellectual property of others in the ordinary course of our business. If we are found to have violated the intellectual property rights of others, we may be enjoined from using such intellectual property, and we may incur licensing fees or be forced to develop alternative technology or obtain other licenses. In addition, we may incur substantial expenses in defending against these third party infringement claims and be diverted from devoting time to our business and operational issues, regardless of the merits of any such claim. Successful infringement or licensing claims against us may result in substantial monetary damages, which may materially disrupt the conduct of our business and have a material adverse effect on our reputation, business, financial condition and results of operations.

WE COULD BE LIABLE FOR FRAUDULENT OR UNLAWFUL ACTIVITIES OF PLATFORM USERS.

The law relating to the liability of providers of online platforms is currently unsettled. In addition, governmental agencies could require changes in the way this business is conducted. Under our platform, we may be unable to prevent users from undertaking fraudulent or unlawful activities when users solicit or agree to undertake unlawful activities or violate the proprietary rights of others.  As such, we could face civil or criminal liability for unlawful activities by our users that could negatively impact our Company.

THE FAILURE OF SMARTPHONE PROVIDERS TO KEEP PACE WITH TECHNOLOGICAL AND MARKET DEVELOPMENTS IN SMARTPHONE DESIGN MAY NEGATIVELY AFFECT THE DEMAND FOR OUR TECHNOLOGY.

We are developing our technology to run on Apple’s iPhone and iPad. Our future success will depend on Apple’s ability to design and manufacture smartphones that meet the demands of subscribers. If we do not modify our technology to be compatible with new smartphones in a timely and efficient manner before the initial commercial launch of the smartphone, revenue may suffer. In addition, if our users select smartphones that are incompatible with our technology, we will incur additional time and expenses to further modify our technology to those smartphones, which may cause us to incur unanticipated operating expenses and miss product launch windows. Because of short product life cycles in the wireless communications industry, if we fail to integrate our technology on a smartphone prior to its commercial launch or if it is preloaded with a competitor’s technology, we may lose a substantial opportunity to gain end users who purchase that device and our revenue may suffer.

CHANGES IN GOVERNMENT REGULATION OF THE WIRELESS COMMUNICATIONS INDUSTRY MAY ADVERSELY AFFECT OUR BUSINESS.

Currently, other than business and operations licenses applicable to most commercial ventures, we are not required to obtain any governmental approval for our business operations. However, there can be no assurance that current or new laws or regulations will not, in the future, impose additional fees and taxes on us and our business operations.

It is possible that a number of laws and regulations may be adopted in the United States and elsewhere that could restrict the wireless communications industry, including laws and regulations regarding lawful interception of personal data, use of smartphones while driving, privacy, taxation, content suitability, copyright and antitrust. Management anticipates that regulation of the industry will increase and that we will be required to devote legal and other resources to address this regulation. Changes in current laws or regulations or the imposition of new laws and regulations in the United States or elsewhere regarding the wireless communications industries may lessen the growth of wireless communications services and may adversely impact the financial results of our business operations.

WE MAY INCUR SUBSTANTIAL DEBT WHICH COULD ADVERSELY AFFECT OUR FINANCIAL CONDITION.

It is possible that we may incur substantial debt in order to expand our business, which could adversely affect our financial condition. Incurring a substantial amount of debt may require us to use a significant portion of our cash flow to pay principal and interest on such debt, which will reduce the amount available to fund working capital, capital expenditures and general corporate purposes. Our indebtedness may negatively impact our ability to operate our business and limit our ability to borrow additional funds by increasing our borrowing costs, and impact the terms, conditions and restrictions contained in possible future debt agreements, including the addition of more restrictive covenants; impact our flexibility in planning for and reacting to changes in our business as covenants and restrictions contained in possible future debt arrangements may require that we meet certain financial tests; and place restrictions on the incurrence of additional indebtedness and place us at a disadvantage compared to similar companies in our industry that have less debt.

REPORTING REQUIREMENTS UNDER THE EXCHANGE ACT AND COMPLIANCE WITH THE SARBANES-OXLEY ACT OF 2002, INCLUDING ESTABLISHING AND MAINTAINING ACCEPTABLE INTERNAL CONTROLS OVER FINANCIAL REPORTING, ARE COSTLY AND MAY INCREASE SUBSTANTIALLY.

The rules and regulations of the SEC require a public company to prepare and file periodic reports under the Exchange Act, which will require that the Company engage legal, accounting, auditing and other professional services. The engagement of such services is costly. Additionally, the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) requires, among other things, that we design, implement and maintain adequate internal controls and procedures over financial reporting. The costs of complying with the Sarbanes-Oxley Act and the limited technically qualified personnel we have may make it difficult for us to design, implement and maintain adequate internal controls over financial reporting. In the event that we fail to maintain an effective system of internal controls or discover material weaknesses in our internal controls, we may not be able to produce reliable financial reports or report fraud, which may harm our overall financial condition and result in loss of investor confidence and a decline in our share price.

As a public company, we will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act of 2010 and other applicable securities rules and regulations. Despite recent reforms made possible by the JOBS Act, compliance with these rules and regulations will nonetheless increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources, particularly after we are no longer an “emerging growth company.” The Exchange Act requires, among other things, that we file annual, quarterly, and current reports with respect to our business and operating results.

We are working with our legal, independent accounting and financial advisors to identify those areas in which changes should be made to our financial and management control systems to manage our growth and our obligations as a public company. These areas include corporate governance, corporate control, disclosure controls and procedures and financial reporting and accounting systems. We have made, and will continue to make, changes in these and other areas. However, we anticipate that the expenses that will be required in order to adequately prepare for being a public company could be material. We estimate that the aggregate cost of increased legal services; accounting and audit functions; personnel, such as a chief financial officer familiar with the obligations of public company reporting; consultants to design and implement internal controls; and financial Edgarization alone will be a few hundred thousand dollars per year and could be several hundred thousand dollars per year. In addition, if and when we retain independent directors and/or additional members of senior management, we may incur additional expenses related to director compensation and/or premiums for directors’ and officers’ liability insurance, the costs of which we cannot estimate at this time. We may also incur additional expenses associated with investor relations and similar functions, the cost of which we also cannot estimate at this time. However, these additional expenses individually, or in the aggregate, may also be material.

In addition, being a public company could make it more difficult or more costly for us to obtain certain types of insurance, including directors’ and officers’ liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. The impact of these events could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers.

The increased costs associated with operating as a public company may decrease our net income or increase our net loss, and may cause us to reduce costs in other areas of our business or increase the prices of our products or services to offset the effect of such increased costs. Additionally, if these requirements divert our management’s attention from other business concerns, they could have a material adverse effect on our business, financial condition and results of operations.

WE ARE SUBJECT TO THE INFORMATION AND REPORTING REQUIREMENTS OF THE SECURITIES AND EXCHANGE ACT OF 1934, AS AMENDED (THE “EXCHANGE ACT”), AND OTHER FEDERAL SECURITIES LAWS, INCLUDING COMPLIANCE WITH THE SARBANES-OXLEY ACT OF 2002 (THE “SARBANES-OXLEY ACT”).

The costs of preparing and filing annual and quarterly reports and other information with the Securities and Exchange Commission and furnishing audited reports to stockholders will cause our expenses to be higher than they would have been if we were privately held.

It may be time consuming, difficult and costly for us to develop, implement and maintain the internal controls and reporting procedures required by the Sarbanes-Oxley Act. We may need to hire additional financial reporting, internal controls and other finance personnel in order to develop and implement appropriate internal controls and reporting procedures.

IF WE FAIL TO ESTABLISH AND MAINTAIN AN EFFECTIVE SYSTEM OF INTERNAL CONTROL, WE MAY NOT BE ABLE TO REPORT OUR FINANCIAL RESULTS ACCURATELY OR TO PREVENT FRAUD. ANY INABILITY TO REPORT AND FILE OUR FINANCIAL RESULTS ACCURATELY AND TIMELY COULD HARM OUR REPUTATION AND ADVERSELY IMPACT THE TRADING PRICE OF OUR COMMON STOCK.

Effective internal control is necessary for us to provide reliable financial reports and prevent fraud. If we cannot provide reliable financial reports or prevent fraud, we may not be able to manage our business as effectively as we would if an effective control environment existed, and our business and reputation with investors may be harmed. As a result, our small size and any current internal control deficiencies may adversely affect our financial condition, results of operation and access to capital. As of September 30, 2014, management has concluded that our internal control over financial reporting is effective, there can be no assurance that our internal control over financial reporting will remain effective.

Risk Related To Our Capital Stock

WE MAY NEVER PAY ANY DIVIDENDS TO SHAREHOLDERS.

We have never declared or paid any cash dividends or distributions on our capital stock. We currently intend to retain our future earnings, if any, to support operations and to finance expansion and therefore we do not anticipate paying any cash dividends on our common stock in the foreseeable future.

The declaration, payment and amount of any future dividends will be made at the discretion of the board of directors (which currently only consists of Darin Myman), and will depend upon, among other things, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors as the board of directors considers relevant. There is no assurance that future dividends will be paid, and, if dividends are paid, there is no assurance with respect to the amount of any such dividend. 

OUR ARTICLES OF INCORPORATION PROVIDE FOR INDEMNIFICATION OF OFFICERS AND DIRECTORS AT OUR EXPENSE AND LIMIT THEIR LIABILITY WHICH MAY RESULT IN A MAJOR COST TO US AND HURT THE INTERESTS OF OUR SHAREHOLDERS BECAUSE CORPORATE RESOURCES MAY BE EXPENDED FOR THE BENEFIT OF OFFICERS AND/OR DIRECTORS.  

Our articles of incorporation and applicable Nevada law provide for the indemnification of our directors, officers, employees, and agents, under certain circumstances, against attorney’s fees and other expenses incurred by them in any litigation to which they become a party arising from their association with or activities on our behalf. We will also bear the expenses of such litigation for any of our directors, officers, employees, or agents, upon such person’s written promise to repay us if it is ultimately determined that any such person shall not have been entitled to indemnification. This indemnification policy could result in substantial expenditures by us which we will be unable to recoup.

We have been advised that, in the opinion of the SEC, indemnification for liabilities arising under federal securities laws is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification for liabilities arising under federal securities laws, other than the payment by us of expenses incurred or paid by a director, officer or controlling person in the successful defense of any action, suit or proceeding, is asserted by a director, officer or controlling person in connection with the securities being registered, we will (unless in the opinion of our counsel, the matter has been settled by controlling precedent) submit to a court of appropriate jurisdiction, the question whether indemnification by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. The legal process relating to this matter if it were to occur is likely to be very costly and may result in us receiving negative publicity, either   of which factors is likely to materially reduce the market and price for our shares, if such a market ever develops.    

YOU WILL EXPERIENCE DILUTION OF YOUR OWNERSHIP INTEREST BECAUSE OF THE FUTURE ISSUANCE OF ADDITIONAL SHARES OF OUR COMMON STOCK AND OUR PREFERRED STOCK.

In the future, we may issue our authorized but previously unissued equity securities, resulting in the dilution of the ownership interests of our present stockholders. We are currently authorized to issue an aggregate of 550,000,000 shares of capital stock consisting of 500,000,000 shares of common stock, par value $0.0001 per share, and 50,000,000 shares of preferred stock, par value $0.0001 per share.

We may also issue additional shares of our common stock or other securities that are convertible into or exercisable for common stock in connection with hiring or retaining employees or consultants, future acquisitions, future sales of our securities for capital raising purposes, or for other business purposes. The future issuance of any such additional shares of our common stock or other securities may create downward pressure on the trading price of our common stock. There can be no assurance that we will not be required to issue additional shares, warrants or other convertible securities in the future in conjunction with hiring or retaining employees or consultants, future acquisitions, future sales of our securities for capital raising purposes or for other business purposes, including at a price (or exercise prices) below the price at which shares of our common stock will be quoted on the OTCBB.

OUR COMMON STOCK IS CONSIDERED A PENNY STOCK, WHICH MAY BE SUBJECT TO RESTRICTIONS ON MARKETABILITY, SO YOU MAY NOT BE ABLE TO SELL YOUR SHARES.

If our common stock becomes tradable in the secondary market, we will be subject to the penny stock rules adopted by the Securities and Exchange Commission that require brokers to provide extensive disclosure to their customers prior to executing trades in penny stocks. These disclosure requirements may cause a reduction in the trading activity of our common stock, which in all likelihood would make it difficult for our shareholders to sell their securities.

Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system). Penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. The broker-dealer must also make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a security that becomes subject to the penny stock rules. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in our securities, which could severely limit the market price and liquidity of our securities. These requirements may restrict the ability of broker-dealers to sell our common stock and may affect your ability to resell our common stock.

Smaller reporting companies are not required to provide the information required by this item.

Our principal office is located at 65 Church Street, Second Floor, New Brunswick, New Jersey 08901 and our telephone number is (732) 246-0439.  Our base rent is $2,100 per month plus common area charges. We believe that this facility is adequate to meet our current needs.

From time to time, we may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.

Not applicable.

PART II

Market Information

Our Common Stock is quoted on the OTCQB operated by OTCMarkets.com under the symbol “WLYW.”

Price Range of Common Stock

Our stock began trading on November 29, 2013. The table below sets forth the high and low closing price per share of our common stock for each quarter since December 31, 2013.  These prices represent inter-dealer quotations without retail markup, markdown, or commission and may not necessarily represent actual transactions.

Holders of Capital Stock

As of December 23, 2014 there were approximately 76 shareholders of record of our common stock. Because shares of our common stock are held by depositaries, brokers and other nominees, the number of beneficial holders of our shares is substantially larger than the number of stockholders of record.

Stock Option Grants

On August 1, 2013, the Company’s board of directors adopted, and the Company’s stockholders approved the Wally World Media, Inc. Equity Incentive Plan (the “Plan”), which covers 8,000,000 shares of common stock.  The purpose of the Plan is to advance the interests of the Company by enhancing the ability of the Company to (i) attract and retain employees and other persons or entities who are in a position to make significant contributions to the success of the Company and its subsidiaries; (ii) reward such persons for such contributions; and (iii) encourage such persons or entities to take into account the long-term interest of the Company through ownership of shares of the Company’s common stock, par value $.0001 per share. The Plan became effective on August 1, 2013 and will terminate on September 30, 2023.

Subject to adjustment as provided in the Plan, the aggregate number of shares of common stock reserved for issuance pursuant to awards granted under the Plan shall be eight million (8,000,000) shares; provided, however, that within sixty (60) days of the end of each fiscal year following the adoption of the Plan, the Board, in its discretion, may increase the aggregate number of shares of Common Stock available for issuance under the Plan by an amount not greater than the difference between (i) the number of shares of Common Stock available for issuance under the Plan on the last day of the immediately preceding fiscal year, and (ii) the number of shares of Common Stock equal to 15% of the shares of Common Stock outstanding on the last day of the immediately preceding fiscal year.

As of September 30, 2014, 3,850,000 stock options have been granted or issued under the Plan.

In April 2014, the Company granted 50,000 three year options to purchase shares of common stock exercisable at $0.50 per share to an employee of the Company. The options shall vest 25% every 90 days from the date of grant. The 50,000 options were valued on the grant date at approximately $0.31 per option or a total of $15,645 using a Black-Scholes option pricing model with the following assumptions: stock price of $0.33 per share (based on the quoted trading price on the grant date), volatility of 234% (based from volatilities of similar companies), expected term of 3 years, and a risk free interest rate of 0.82%.

Dividend Policy

Since inception we have not paid any dividends on our ordinary shares. We currently do not anticipate paying any cash dividends in the foreseeable future on our ordinary shares. Although we intend to retain our earnings, if any, to finance the exploration and growth of our business, our Board of Directors will have the discretion to declare and pay dividends in the future. Payment of dividends in the future will depend upon our earnings, capital requirements, and other factors, which our Board of Directors may deem relevant.

Recent Unregistered Sales of Equity Securities 

On October 23, 2014, the Company closed a financing transaction by entering into a Securities Purchase Agreement dated October 23, 2014 (the “Securities Purchase Agreement”) with certain funds and investors signatory to such Securities Purchase Agreement (the “Purchasers”) for an aggregate subscription amount of $160,000 (the “Purchase Price”). Pursuant to the Securities Purchase Agreement, the Company issued the following to the Purchasers: (i) 10% Convertible Promissory Notes with an aggregate principal amount of $160,000 (the “Notes”), (ii) Class A Warrants to purchase an aggregate of 4,266,656 shares of the Company’s common stock, par value $0.01 per share, for an exercise price of $0.05 per share for a period of five (5) years from the effective date of the registration statement (the “Class A Warrants”), and (iii) Class B Warrants to purchase an aggregate of 4,266,656 shares of the Company’s common stock, par value $0.01 per share, for an exercise price of $0.25 per share for a period of five (5) years from the effective date of the registration statement (the “Class B Warrants”, and together with the Class A Warrants, the “Warrants”).

The terms of the Notes and the Warrants are as follows:

10% Convertible Promissory Notes

The total principal amount of the Notes are $160,000. The Notes accrue interest at a rate equal to 10% per annum and have a maturity date of April 23, 2015. The Notes are convertible any time after the issuance date of the Notes. The Purchasers have the right to convert the Notes into shares of the Company’s common stock at a conversion price equal to the lesser of (i) $0.0375, and (ii) 75% of the lowest closing bid price for the 20 consecutive trading days preceding a Conversion Date, subject to standard adjustments and price protection on the conversion price as discussed below. The Notes can be redeemed under certain conditions and the Company can force the conversion of the Notes in the event certain equity conditions are met. As long as any portions of this Note remains outstanding, unless the holders of at least 51% in principal amount of the then outstanding Notes shall have otherwise given prior written consent, the Company shall not, and shall not permit any of the Subsidiaries to, directly or indirectly enter into certain transactions as defined in section 7 of the promissory note agreement.

In the event of default, the Purchasers have the right to require the Company to repay in cash all or a portion of the Notes at a price equal to 115% of the aggregate principal amount of the Notes plus all accrued but unpaid interest.

Warrants

The Warrants are exercisable in whole or in part, at an initial exercise price per share of $0.05 for the Class A Warrants and $0.25 for the Class B Warrants, subject to adjustment. The exercise price and number of shares of the Company’s common stock issuable under the Warrants (the “Warrant Shares”) are subject to adjustments for stock dividends, splits, combinations, subsequent rights offerings, pro rata distributions and any issuance of securities below the exercise price of the Warrants. Any adjustment to the exercise price shall similarly cause the number of warrant shares to be adjusted so that the total value of the Warrants may increase. The warrants also contain a cashless exercise provision.

Smaller reporting companies are not required to provide the information required by this item.

The following plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto. This section includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.

Overview

Wally World Media, Inc. was incorporated in the State of Nevada on May 17, 2012.  We are a start-up business and are still working on our software and platform. We have developed a social media website that we refer to as “YouPop.” Our “YouPop” platform launched for public use in April 2013. On March 19, 2014, we launched reShoot™, a free mobile video camera app for Apple’s iPhone and iPad. reShoot features patent-pending “on the fly” video editing technology to rewind and re-shoot unwanted portions of video. Portions of our YouPop technology have been incorporated into the reShoot app. The reShoot app includes proprietary functionality which allows users to pause recordings (even when the app is closed), live preview of videos, record new footage into existing videos, and insert clips from the camera roll. reShoot provides a mobile video recording and editing studio within a user-friendly app.

The YouPop Platform

In April 2013, we launched our YouPop Platform. The following is how the YouPop platform operated. Users are permitted to register on our website and place job offerings for a service. For example, a user will be able to post a job offer to provide a video of a specific content (i.e. personalized birthday wish, practical joke, dares, etc.).  Other users will be able to view that offer and fulfill that offer by contacting the person and agreeing to provide that service. If the offer is accepted, the person who posted the job will provide us with their credit card information and we will hold the information until the service provider successfully completes the work.  It is intended that upon acceptance of the completed task, we will charge the credit card the amount that was to be paid plus a service fee and credit the service provider’s account with the agreed upon amount.  We will generate revenue by charging both the person looking for services to be provided and the service provider with a transaction fee or service charge of up to 15% from each party.

Our payment processing is being set up and structured as a conditional payment system. We expect to get a customer’s authorization to charge his or her credit card at some future time when the services are complete. This method of payment pre-authorizes the charge but we do not actually charge the credit card until the services are completed. In the event that services are completed and we attempt to charge the credit card but it is rejected or the financial institution does not accept the charge, if possible, the services will be blocked and will not be delivered. We will not guarantee payment and this is a risk that the service provider takes. If the payment is not made at the end of the services, then the service provider does not get paid and the person requesting the service will not get access to the material he or she requested.

In order to resolve any disputes that may arise between two contracting parties as to whether service was successfully completed, we will be implementing dispute resolution policies and procedures. These policies will include a process for the service provider to submit a request for review by an independent panel consisting of officers of the Company that will review, arbitrate and mediate any dispute. We recognize and understand that there may be disputes and disagreements between parties and we will do our best to resolve them. But, in the event there is no resolution, each party bears the risk of non-performance or non-payment.

We expect that YouPop will be attractive for both businesses and individuals. We expect that people will use our service to complete specific micro-services, such as:

We do recognize that it is possible that some users may try to use our platform for unlawful transactions. We plan to implement the following steps to try to prevent, or limit, unlawful transactions or acts, from occurring on or through the platform. We will have a procedure for manual review of each posting and a reporting mechanism for users of the site to notify us of any inappropriate content that may appear. While we will do our best to prevent these unlawful postings, we do recognize that they may occur and it is possible that we could potentially incur substantial liability if these unlawful postings do occur.

ReShoot Technology

The Company has developed an app for the iPhone and iPad based on its reShoot technology.  reShoot, a video camera app for Apple iPhones and iPads running iOS 8.   Featuring its patent- pending “on the Fly” video editing technology, reShoot makes it easy to correct videos while recording. It provides the capability to rewind and reshoot over unwanted footage.  Utilizing the iPhone’s camera, reShoot provides the capability to record, rewind, pause, annotate and reshoot videos of any length, and post them to social networks and video sharing platforms such as Facebook, Twitter, Vimeo, YouPop and Dropbox.  reShoot’s  videoArc feature, users can add new footage to existing video recordings stored in their VideoArc or camera roll. Instead of capturing dozens of clips, VideoArc provides a single video stream or montage that can be edited and extended.

With the Insert reShoot features users can record new video into video they have already taken.  It also allows users to insert new footage into a previously recorded VideoArc clip or clip from their camera roll.

The Company has changed its focus to concentrate its efforts on the reShoot technology which is developing new features such as video sound effects, thought bubbles, video emoticons and adding sound to traditional photographs.

Plan of Operations

We have commenced limited operations and our reShoot App has been available in the iTunes Store since March 18, 2014.

Our principal business intends to focus on creating a large user base for our reShoot technology that includes adding new features, new ways to monetize the mobile app through In-App purchases of special features, creating specific genre based videos entertainment and licensing the technology.   We plan to use the YouPop platform we have developed to connect the reShoot app and allow its users to share long form videos without exchanging the files using our cloud.

We have a limited operating history for investors to evaluate the potential of our business development. As such, we have not built our customer base or our brand name. In addition, our sources of cash are not adequate for the next 12 months of operations. If we are unable to raise additional cash, we will have to reduce our expansion plans.

Limited Operating History

We have generated limited financial history and have not previously demonstrated that we will be able to expand our business. Our business is subject to risks inherent in growing an enterprise, including limited capital resources and possible rejection of our business model and/or sales methods.

Critical Accounting Policies and Estimates 

While our significant accounting policies are more fully described in Note 1 to our financial statements for the year ended September 30, 2014, we believe that the following accounting policies are the most critical tool to aid you in fully understanding and evaluating this management discussion and analysis.

Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated 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. We continually evaluate our estimates, including those related to recovery of long-lived assets, income taxes, and the valuation of equity transactions. We base our estimates on historical experience and on various other assumptions that we 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. Any future changes to these estimates and assumptions could cause a material change to our reported amounts of revenues, expenses, assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of the financial statements.

Software development costs

Costs incurred to develop internal-use software, including website development costs, during the preliminary project stage are expensed as incurred. Internal-use software development costs are capitalized during the application development stage, which is after: (i) the preliminary project stage is completed; and (ii) management authorizes and commits to funding the project and it is probable the project will be completed and used to perform the function intended. Capitalization ceases at the point the software project is substantially complete and ready for its intended use, and after all substantial testing is completed. Upgrades and enhancements are capitalized if it is probable that those expenditures will result in additional functionality. Amortization is provided for on a straight-line basis over the expected useful life of three years of the internal-use software development costs and related upgrades and enhancements. When existing software is replaced with new software, the unamortized costs of the old software are expensed when the new software is ready for its intended use.

Impairment of long-lived assets

In accordance with ASC Topic 360, we review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. We recognize an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. For the year ended September 30, 2014 and 2013, we incurred impairment expense of $0 and $35,000 respectively.

Revenue recognition

The Company will recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the purchase price is fixed or determinable and collectability is reasonably assured. For all revenue sources discussed below, in accordance ASC 605-45 “Principal Agent Considerations”, the Company recognizes revenue net of amounts retained by third party entities pursuant to revenue sharing agreements. The Company’s specific revenue recognition policies are as follows:

Users that register on the Company’s website may place job offerings for a service on the Company’s “Youpop” platform, a social media website (the “Job Offeror”). The Job Offeror will offer cash payments for a specific service to be completed. For example, the Job Offeror may require another user to provide a video of a specific content (i.e. personalized birthday wish, practical joke, dares, etc.). Other users that are looking to fulfill job postings (the “Job Offeree”) apply for the job. Once the Job Offeree applies, the Job Offeror can view the applicants profile, past jobs, user rating and ask direct questions. Once the Job Offeror engages a Job Offeree, the Company will charge the Job Offeror’s credit card for the service fee including its transaction fee of up to 30% of the transaction amount and the Company will hold the money until the work is completed by the job offeree and uploaded to Youpop for review and acceptance. At such time, the Company will record deferred revenue for the amount of the transaction fee and a customer deposit for the amount received from the Job Offeror. Upon acceptance of the completed task by the Job Offeror, the money is moved to the Job Offeree’s account and the Company will recognize transaction fee revenue. Job Offerees may request the funds be sent to them or they may leave it on account. Upon completion of the job, the Company recognizes revenue which consists of a transaction fee of up to 30% of the transaction amount with 50% paid by the Job Offeror and 50% by the Job Offeree.

Stock-based compensation

We account for stock-based instruments issued to employees in accordance with ASC Topic 718. ASC Topic 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity based compensation issued to employees. We account for non-employee share-based awards in accordance with ASC Topic 505-50.

Recent Accounting Pronouncements

We have reviewed accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term.  The applicability of any standard is subject to the formal review of our consolidated financial management and certain standards are under consideration.  Those standards have been addressed in the notes to the consolidated financial statement and in this, our Annual Report, filed on Form 10-K for the year ended September 30, 2014.

Results of Operations

The following table presents a summary of operating information for the years ended September 30, 2014 and 2013: 

Revenues

For the years ended September 30, 2014 and 2013 we generated no revenue.

Operating Expenses

Operating expenses for the year ended September 30, 2014 were $1,744,830, an increase from  the year ended September 30, 2013 of $750,590. The difference in the change of $994,240 was primarily due to increase in compensation and professional expenses, described in the table below: 

 Net Loss

As a result of the factors described above, we incurred a net loss for the year ended September 30, 2014 of $1,745,454.  This is an increase from $750,138 in net loss for the year ended September 30, 2013.

Liquidity and Capital Resources

Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. We have been funding our operations through the sale of our common stock.

Our primary uses of cash have been for salaries and fees paid to third parties for the development of our products. All funds received have been expended in the furtherance of growing the business and establishing brand portfolios. The following trends are reasonably likely to result in a material decrease in our liquidity over the near to long term:

We are not aware of any known trends or any known demands, commitments or events that will result in our liquidity increasing or decreasing in any material way. We are not aware of any matters that would have an impact on future operations.

Our net revenues are not sufficient to fund our operating expenses.  At September 30, 2014 we had a cash balance of $0. During the year ended September 30, 2014, we raised approximately $832,000 from the sale of common stock to fund our operating expenses, pay our obligations, and grow our company. Additionally, in October 2014, we received gross proceeds of $160,000 from the issuance of convertible promissory notes. We currently have no material commitments for capital expenditures. We may be required to raise additional funds, particularly if we are unable to generate positive cash flow as a result of our operations.   We estimate that based on current plans and assumptions, that our available cash will not be sufficient to satisfy our cash requirements under our present operating expectations, without further financing, for up to 12 months. We presently have no other alternative source of working capital. We may not have sufficient working capital to fund the expansion of our operations and to provide working capital necessary for our ongoing operations and obligations. We will need to raise significant additional capital to fund our operating expenses, pay our obligations, and grow our company. We do not anticipate we will be profitable in fiscal 2015.  Therefore our future operations will be dependent on our ability to secure additional financing.  Financing transactions may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms. However, the trading price of our common stock and a downturn in the U.S. equity and debt markets could make it more difficult to obtain financing through the issuance of equity or debt securities. Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses, fail to collect amounts owed to us, or experience unexpected cash requirements that would force us to seek alternative financing. Furthermore, if we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our common stock. The inability to obtain additional capital will restrict our ability to grow and may reduce our ability to continue to conduct business operations. If we are unable to obtain additional financing, we will likely be required to curtail our marketing and development plans and possibly cease our operations.  

We anticipate that depending on market conditions and our plan of operations, we may incur operating losses in the foreseeable future. Therefore, our auditors have raised substantial doubt about our ability to continue as a going concern.

Our liquidity may be negatively impacted by the significant costs associated with our public company reporting requirements, costs associated with newly applicable corporate governance requirements, including requirements under the Sarbanes-Oxley Act of 2002 and other rules implemented by the Securities and Exchange Commission. We expect all of these applicable rules and regulations to significantly increase our legal and financial compliance costs and to make some activities more time consuming and costly.

Our business plan within 12 months is outlined below:

If we continue to develop the reShoot technology and YouPop website and we receive a positive reaction from the market, we will attempt to raise additional money through a private placement, public offering or long-term loans to continue development and marketing our web sites and mobile app to attract larger numbers of users. We will also continually refine our web sites and optimize our marketing efforts from the market feedback we receive during the initial marketing phase and from our user’s feedback. We do not at this time have an estimate of time or cost for this stage.

If we are unable to maintain our web site or reShoot app, or successfully launch our marketing efforts because we don't have enough money, we will cease our development and/or marketing operations until we raise money. Attempting to raise capital after failing in any phase of our development plan could be difficult. As such, if we cannot secure additional proceeds we will have to cease operations and investors would lose their entire investment.  At the present time, we have not made any arrangements to raise additional cash. However, we intend to raise additional capital through private placements.  If we need additional cash but are unable to raise it, we will either suspend marketing operations until we do raise the cash, or cease operations entirely. Other than as described in this paragraph, we have no other financing plans.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Contractual Obligations

We have certain potential commitments that include future estimated payments. Changes in our business needs, cancellation provisions, changing interest rates, and other factors may result in actual payments differing from the estimates. We cannot provide certainty regarding the timing and amounts of payments. We have presented below a summary of the most significant assumptions used in our determination of amounts presented in the tables, in order to assist in the review of this information within the context of our financial position, results of operations, and cash flows.

The following tables summarize our contractual obligations as of September 30, 2014, and the effect these obligations are expected to have on our liquidity and cash flows in future periods:

Not applicable because we are a smaller reporting company. 

WALLY WORLD MEDIA, INC.

CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2014

 
CONTENTS

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of:

Wally World Media, Inc.

We have audited the accompanying consolidated balance sheets of Wally World Media, Inc. as of September 30, 2014 and 2013 and the related consolidated statements of operations, changes in stockholders' equity, and cash flows for each of the two years in the period ended September 30, 2014.  These consolidated financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Wally World Media, Inc. as of September 30, 2014 and 2013 and the consolidated results of its operations and its cash flows for each of the two years in the period ended September 30, 2014, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern.  As discussed in Note 1 to the consolidated financial statements, the Company reported a net loss and cash used in operations for the fiscal year ended September 30, 2014 of $1,745,454 and $917,504, respectively, and as of September 30, 2014 had a working capital deficit, stockholders’ deficit, and accumulated deficit of $53,107, $44,707 and $2,596,791, respectively, and has no revenues.  These matters raise substantial doubt about the Company’s ability to continue as a going concern.  Management’s plans as to these matters are also described in Note 1.  The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 /s/ Salberg & Company, P.A.

SALBERG & COMPANY, P.A.

Boca Raton, Florida

December 23, 2014

2295 NW Corporate Blvd., Suite 240 • Boca Raton, FL 33431-7328

Phone: (561) 995-8270 • Toll Free: (866) CPA-8500 • Fax: (561) 995-1920

www.salbergco.com • info@salbergco.com

Member National Association of Certified Valuation Analysts • Registered with the PCAOB

Member CPAConnect with Affiliated Offices Worldwide • Member AICPA Center for Audit Quality

See accompanying notes to consolidated financial statements.

See accompanying notes to consolidated financial statements.

WALLY WORLD MEDIA, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

See accompanying notes to consolidated financial statements.

WALLY WORLD MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014 

NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

Wally World Media, Inc. (the “Company”) was incorporated in the State of Nevada on May 17, 2012 and established a fiscal year end of September 30.  The Company’s principal business is focused on creating an internet crowd-sourcing, virtual, micro service network that allows users that register on the Company’s website to place job offerings for a service on the Company’s “youpop” platform, a social media website. Services may include a video of a personalized birthday wish, a practical joke, a dare, etc.  Additionally, the Company’s registered website users may post events such as a bachelor party or anniversary on the Company’s “Party Crowd” platform. Users may accept donations from people who are attending the event. 

On March 10, 2014, the Company formed a new wholly owned subsidiary Vape Shop Holdings Inc. which was incorporated in the state of Nevada. 

Going concern

As reflected in the accompanying consolidated financial statements, the Company has a net loss and net cash used in operations of $1,745,454 and $917,504, respectively, for the year ended September 30, 2014.  Additionally the Company has a working capital deficit, stockholder’s deficit, and accumulated deficit of $53,107, $44,707 and $2,596,791, respectively, at September 30, 2014 and no revenues. The ability of the Company to continue as a going concern is dependent on the Company’s ability to further implement its business plan, raise capital, and generate revenues. Currently, management is seeking capital to implement its business plan.   Management believes that the actions presently being taken provide the opportunity for the Company to continue as a going concern. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.  

Principles of consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned inactive subsidiary. All intercompany transactions and balances are eliminated at consolidation.

Use of estimates

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures at the date of the financial statements and during the reporting period. Actual results could materially differ from these estimates. Significant estimates include the valuation of deferred tax assets, valuation of assets purchased from a related party and the value of stock-based compensation and fees.

Cash and cash equivalents

The Company considers all highly liquid debt instruments and other short-term investments with maturity of three months or less, when purchased, to be cash equivalents.  The Company maintains cash and cash equivalent balances at one financial institution that is insured by the Federal Deposit Insurance Corporation. The Company’s account at this institution is insured by the Federal Deposit Insurance Corporation ("FDIC") up to $250,000. As of September 30, 2014, the Company has not reached bank balances exceeding the FDIC insurance limit. To reduce its risk associated with the failure of such financial institution, the Company evaluates at least annually the rating of the financial institution in which it holds deposits.

Prepaid expenses

Prepaid expenses of $15,382 and $5,200 at September 30, 2014 and 2013, respectively, consist primarily of costs paid for future services which will occur within a year. Prepaid expenses include prepayments in cash and equity instruments for consulting, public relations and business advisory services, advertising and accounting fees which are being amortized over the terms of their respective agreements.

WALLY WORLD MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Fair value measurements and fair value of financial instruments

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants.  The Company classifies assets and liabilities recorded at fair value under the fair value hierarchy based upon the observability of inputs used in valuation techniques.  Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. The fair value measurements are classified under the following hierarchy:

The estimated fair value of certain financial instruments, including cash and cash equivalents and accounts payable are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.

Software development costs

The Company develops software and applications which are being provided to customers for free in order to deliver revenue producing products. Costs incurred to develop internal-use software, including website development costs, during the preliminary project stage are expensed as incurred.   Internal-use software development costs are capitalized during the application development stage, which is after:   (i) the preliminary project stage is completed; and (ii) management authorizes and commits to funding the project and it is probable the project will be completed and used to perform the function intended.   Capitalization ceases at the point the software project is substantially complete and ready for its intended use, and after all substantial testing is completed.   Upgrades and enhancements are capitalized if it is probable that those expenditures will result in additional functionality.   Amortization is provided for on a straight-line basis over the expected useful life of three years of the internal-use software development costs and related upgrades and enhancements.   When existing software is replaced with new software, the unamortized costs of the old software are expensed when the new software is ready for its intended use. The Company has been expensing all of its software development cost during the development stage. Software developments cost consisted of compensation of software programmers in the amount of approximately $327,000 and $159,000 during the years ended September 30, 2014 and 2013, respectively. During the 2014 and 2013 periods, the Company did not capitalize any software development costs.

Patents and trademarks

For internally developed patents and trademarks, all costs incurred to the point when applications are to be filed are expensed as incurred. Patent and trademark application costs, generally legal costs, are expensed in legal fees until such time as the future economic benefits of such patents and trademarks become more certain. The Company incurred legal fees related to patents and trademarks of approximately $3,000 and $0 for the years ended September 30, 2014 and 2013, respectively.

Impairment of long-lived assets

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. The Company recorded impairment loss in the amount of $0 and $35,000 during the years ended September 30, 2014 and 2013, respectively (see Note 2).

Revenue recognition

The Company will recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the purchase price is fixed or determinable and collectability is reasonably assured. For all revenue sources discussed below, in accordance with ASC 605-45 “Principal Agent Considerations”, the Company recognizes revenue net of amounts paid to third parties. The Company’s specific revenue recognition policies are as follows:

WALLY WORLD MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Users that register on the Company’s website may place job offerings for a service on the Company’s “Youpop” platform, a social media website (the “Job Offeror”). The Job Offeror will offer cash payments for a specific service to be completed. For example, the Job Offeror may require another user to provide a video of a specific content (i.e. personalized birthday wish, practical joke, dares, etc.). Other users that are looking to fulfill job postings (the “Job Offeree”) apply for the job. Once the Job Offeree applies, the Job Offeror can view the applicants profile, past jobs, user rating and ask direct questions. Once the Job Offeror engages a Job Offeree, the Company will charge the Job Offeror’s credit card for the service fee including its transaction fee of up to 30% of the transaction amount and the Company will hold the money until the work is completed by the job offeree and uploaded to Youpop for review and acceptance. At such time, the Company will record deferred revenue for the amount of the transaction fee and a customer deposit for the amount received from the Job Offeror. Upon acceptance of the completed task by the Job Offeror, the money is moved to the Job Offeree’s account and the Company will recognize transaction fee revenue. Job Offerees may request the funds be sent to them or they may leave it on account. Upon completion of the job, the Company recognizes revenue which consists of a transaction fee of up to 30% of the transaction amount with 50% paid by the Job Offeror and 50% by the Job Offeree.

Income taxes

The Company is governed by the Income Tax Law of the United States. The Company utilizes ASC Topic 740, "Accounting for Income Taxes," which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

Under ASC Topic 740, the evaluation of a tax position is a two-step process. The first step is to determine whether it is more likely than not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigation based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements.

A tax position is measured at the largest amount of benefit that is greater than 50% likelihood of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. ASC Topic 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures, and transition.

Stock-based compensation

The Company accounts for stock-based instruments granted to employees in accordance with ASC Topic 718. ASC Topic 718 requires companies to estimate and recognize the grant-date fair value of stock based awards issued to employees and directors. The Company recognizes compensation on a straight-line basis over the requisite service period for each award.     The Company accounts for non-employee stock-based awards in accordance with the measurement and recognition criteria under ASC Topic 505-50.

Advertising

Advertising is expensed as incurred and is included in general and administrative expenses in the accompanying statements of operations. For the year ended September 30, 2014 and 2013, advertising expense was $56,144 and $450 respectively.

Research and development

Research and development costs are expensed as incurred. For the year ended September 30, 2014 and 2013, research and development costs were $0.

WALLY WORLD MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Net loss per share of common stock

Basic net loss per share is computed by dividing the net loss by the weighted average number of common shares during the period. Diluted net loss per share is computed using the weighted average number of common shares and potentially dilutive securities outstanding during the period. At September 30, 2014 and 2013, the Company has 3,850,000 and 0 respectively, potentially dilutive securities outstanding in connection with stock options that may dilute any future earnings per share.

Recent accounting pronouncements

In June 2014, the FASB issued ASU 2014-10, “Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements”. ASU 2014-10 eliminates the distinction of a development stage entity and certain related disclosure requirements, including the elimination of inception-to-date information on the statements of operations, cash flows and stockholders’ equity. The amendments in ASU 2014-10 will be effective prospectively for annual reporting periods beginning after December 15, 2014, and interim periods within those annual periods, however early adoption is permitted. The Company evaluated and adopted ASU 2014-10 for the annual reporting period ended September 30, 2014.

Accounting standards which were not effective until after September 30, 2014 are not expected to have a material impact on the Company’s financial position or results of operations.

NOTE 2 – RELATED PARTY TRANSACTIONS

The following related parties from time to time, provided advances to the Company for working capital purposes. At September 30, 2014 and 2013, the Company had a payable to these individuals of $5,000 and $7,675, respectively. These advances were short-term in nature and non-interest bearing.

During the year ended September 30, 2013, the Company’s CEO paid certain office expenses amounting to $7,488 on behalf of the Company and there were amounts due of $8,133 for working capital the CEO previously advanced to the Company during the period from May 17, 2012 to September 30, 2012. During the year ended September 30, 2013, the Company repaid $12,946 to the Company’s CEO, leaving a balance of $2,675 at September 30, 2013. This was repaid during the year ended September 30, 2014.

On October 22, 2012, the Company paid $35,000 to Robb Knie, the Company’s majority stockholder at that time and employee and former chief executive officer (the “Seller”) for the purchase of certain intellectual properties consisting URL’s, trademarks and programming code (the “Purchased Assets”). In connection with the acquisition of the Purchased Assets, the Company recorded intellectual properties of $35,000, which is less than the Seller’s original cost basis. The Company recorded an impairment loss in the amount of $0 and $35,000 during the years ended September 30, 2014 and 2013, respectively.

During the year ended September 30, 2014, the Company paid $6,100 to a family member of the CEO for office administrative services performed.

NOTE 3 – STOCKHOLDERS’ (DEFICIT) EQUITY

Preferred stock

The Company authorized 50,000,000 preferred shares.  Preferred shares may be designated by the Company’s board of directors.  There were no shares designated as of September 30, 2014 and 2013.

WALLY WORLD MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

NOTE 3 – STOCKHOLDERS’ (DEFICIT) EQUITY (continued)

Common stock

Between October 1, 2012 and December 31, 2012, the Company sold 4,000,000 shares of its common stock at $0.10 per common share for proceeds of $400,000.

On February 19, 2013, the Company issued 250,000 vested shares of its common stock to a consultant in connection with a 12 month consulting agreement (see Note 5). The Company valued these common shares at the fair value of $0.10 per common share or $25,000 based on the sale of common stock in a private placement at $0.10 per common share. In connection with the issuance of these common shares, the Company recorded stock-based compensation of $25,000 for the year ended September 30, 2013 as the contract was terminated in June 2013.

On April 1, 2013, the Company issued 100,000 vested shares of its common stock to a consultant in connection with a 12 month consulting agreement (see Note 5). The Company valued these common shares at the fair value of $0.10 per common share or $10,000 based on the sale of common stock in a private placement at $0.10 per common share. In connection with the issuance of these common shares, the Company recorded stock-based compensation of $10,000 for the year ended September 30, 2013 as the contract was terminated in May 2013.

On May 2, 2013, the Company issued 240,000 shares of its common stock at $0.10 per common share to a company owned by its Chief Financial Officer as payment for accounting services rendered pursuant to an engagement letter. The Company valued these common shares at the fair value of $0.10 per common share based on the sale of common stock in a private placement at $0.10 per common share. In connection with issuance of these common shares, the Company recorded stock-based compensation of $24,000.

In June 2013 the Company collected from various investors $33,000 in connection with the anticipated purchase of 330,000 shares of the Company’s common stock subject to the Company’s acceptance and due diligence.  In July 2013, the company accepted the subscriptions and issued 330,000 shares of the Company’s common stock at a per share purchase price of $0.10.  

On July 1, 2013, the Company issued 90,000 shares of its common stock at $0.10 per common share to a company owned by its Chief Financial Officer as payment for accounting services rendered pursuant to an engagement letter. The Company valued these common shares at the fair value of $0.10 per common share based on the sale of common stock in a private placement at $0.10 per common share. In connection with issuance of these common shares, the Company recorded stock-based compensation of $9,000.

On July 23, 2013, the Company sold 400,000 shares of the Company’s common stock to a certain number of accredited investors at a per share purchase price of $0.10 and raised gross proceeds of $40,000.

On August 1, 2013 and August 7, 2013, the Company entered into 2 separate subscription agreements with 2 additional accredited investors for the sale of 1,000,000 shares of common stock to each investor at a per share purchase price of $0.10 and the Company raised gross proceeds of $200,000.

In October 2013, the Company issued 90,000 shares of its common stock at $0.10 per common share to a company owned by its Chief Financial Officer as payment for accounting services rendered pursuant to an engagement letter. The Company valued these common shares at the fair value of $0.10 per common share based on the contemporaneous sale of common stock in a private placement at $0.10 per common share. In connection with issuance of these common shares, the Company recorded stock-based compensation of $9,000.

In December 2013, the Company sold 3,565,000 shares of its common stock at $0.10 per common share for proceeds of $356,500.

Between January 2014 and March 2014, the Company sold 4,750,000 shares of the Company’s common stock at a per share purchase price of $0.10 and raised gross proceeds of $475,000.

On January 13, 2014, the Company issued an aggregate of 1,025,000 vested shares of its common stock to three employees for services rendered. The Company valued these common shares at the fair value of $0.10 per common share based on the contemporaneous sale of common stock in a private placement at $0.10 per common share. In connection with issuance of these common shares, the Company recorded stock-based compensation of $102,500 for the year ended September 30, 2014.

WALLY WORLD MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

NOTE 3 – STOCKHOLDERS’ (DEFICIT) EQUITY (continued)

On January 13, 2014, the Company issued an aggregate of 850,000 vested shares of its common stock to three consultants for services rendered. The Company valued these common shares at the fair value of $0.10 per common share based on the contemporaneous sale of common stock in a private placement at $0.10 per common share. In connection with issuance of these common shares, the Company recorded stock-based compensation of $85,000 for the year ended September 30, 2014.

On January 24, 2014, the Company issued 500,000 vested shares of its common stock to a consultant in connection with a 12 month investor relations consulting agreement. The Company valued these common shares at the fair value of $0.10 per common share based on the contemporaneous sale of common stock in a private placement at $0.10 per common share. In connection with the issuance of these common shares, the Company recorded stock based consulting of $50,000 for the year ended September 30, 2014. Additionally, the Company paid $100,000 pursuant to the consulting agreement.

On March 18, 2014, the Company issued 500,000 vested shares of its common stock to a consultant for consulting and business advisory services rendered. The Company valued these common shares at the fair value of $0.10 per common share based on the contemporaneous sale of common stock in a private placement at $0.10 per common share. In connection with issuance of these common shares, the Company recorded stock-based compensation of $50,000 for the year ended September 30, 2014.

On March 18, 2014, the Company issued 180,000 shares of its common stock at $0.10 per common share to a company owned by its Chief Financial Officer as payment for accounting services rendered pursuant to an engagement letter. The Company valued these common shares at the fair value of $0.10 per common share based on the contemporaneous sale of common stock in a private placement at $0.10 per common share. In connection with issuance of these common shares, the Company recorded stock-based compensation of $18,000 for the year ended September 30, 2014.

In April 2014, the Company issued 500,000 vested shares of its common stock to a consultant in connection with a 6 month investor relations consulting agreement. The Company valued these common shares at the fair value of approximately $0.33 per common share or $165,000 based on the quoted trading price on the grant date. In connection with the issuance of these common shares, the Company recorded stock based consulting of $151,250 in 2014 and prepaid expenses of $13,750 as of September 30, 2014 to be amortized over the remaining term of the consulting agreement.

In April 2014, the Company issued 150,000 vested shares of its common stock to two consultants in connection with investor relations services rendered. The Company valued these common shares at the fair value of approximately $0.33 per common share or $49,500 based on the quoted trading price on the grant date. In connection with issuance of these common shares, the Company recorded stock-based consulting of $49,500 for the year ended September 30, 2014.

Stock options

On August 1, 2013, the Board of Directors and holders of a majority of the Company’s outstanding capital stock of the Company approved the Company's 2013 Equity Incentive Plan, which reserves 8,000,000 shares of common stock for issuance to the Company's officers, directors, and employees.

On January 13, 2014, the Company granted an aggregate of 1,650,000 three year options to purchase shares of common stock exercisable at $0.25 per share to four employees of the Company. The options shall vest 25% every 90 days from the date of grant. The 1,650,000 options were valued on the grant date at approximately $0.09 per option or a total of $155,450 using a Black-Scholes option pricing model with the following assumptions: stock price of $0.10 per share (based on the contemporaneous sale of common stock in a private placement), volatility of 240% (based from volatilities of similar companies), expected term of 3 years, and a risk free interest rate of 0.74%.

On January 13, 2014, the Company granted an aggregate of 3,000,000 three year options to purchase shares of common stock exercisable at $1.00 per share to the Chief Executive Officer of the Company. The options shall vest 25% every 90 days from the date of grant. The 3,000,000 options were valued on the grant date at approximately $0.09 per option or a total of $268,457 using a Black-Scholes option pricing model with the following assumptions: stock price of $0.10 per share (based on the contemporaneous sale of common stock in a private placement), volatility of 240% (based from volatilities of similar companies), expected term of 3 years, and a risk free interest rate of 0.74%.

In April 2014, the Company granted 50,000 three year options to purchase shares of common stock exercisable at $0.50 per share to an employee of the Company. The options shall vest 25% every 90 days from the date of grant. The 50,000 options were valued on the grant date at approximately $0.31 per option or a total of $15,645 using a Black-Scholes option pricing model with the following assumptions: stock price of $0.33 per share (based on the quoted trading price on the grant date), volatility of 234% (based from volatilities of similar companies), expected term of 3 years, and a risk free interest rate of 0.82%.

WALLY WORLD MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

NOTE 3 – STOCKHOLDERS’ (DEFICIT) EQUITY (continued)

During the year ended September 30, 2014, the Company recorded stock based compensation expense related to vested options granted in fiscal 2014 in the amount of $276,848. As of September 30, 2014, there were total unrecognized compensation costs related to non-vested share-based compensation arrangements of $99,720.

Stock option activities for the period ended September 30, 2014 are summarized as follows: 

The weighted-average grant-date fair value of options granted to employees/consultants during the year ended September 30, 2014 was $0.09.

NOTE 4 – INCOME TAXES

The Company has incurred aggregate net operating losses of approximately $953,356 for income tax purposes for the year ended September 30, 2014. The net operating loss carries forward for United States income taxes, which may be available to reduce future years’ taxable income. These carry forwards will expire, if not utilized, through 2034. Management believes that the realization of the benefits from these losses appears not more than likely due to the Company’s limited operating history and continuing losses for United States income tax purposes. Accordingly, the Company has provided a 100% valuation allowance on the deferred tax asset to reduce the asset to zero. Management will review this valuation allowance periodically and make adjustments as warranted.

The Company’s income tax expense (benefit) differs from the “expected” tax expense for Federal income tax purposes computed by applying a Federal corporate tax rate of 34% to loss before income taxes as follows:

The tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities at September 30, 2014 and 2013 are as follows:

The valuation allowance at September 30, 2014 was $694,430.  The increase during 2014 was $409,943. The Company has identified its federal income tax return as its major tax jurisdiction. The fiscal 2013 and 2014 years are still open for examination.

WALLY WORLD MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

NOTE 5 – COMMITMENTS AND CONTINGENCIES

On February 19, 2013 the Company entered into a one year renewable contract (the “Agreement”) with a consultant to recruit approved celebrities to be featured on the Company’s website and in accordance with the Company’s standard written terms and conditions which are set forth on the website.    The consultant’s compensation agreement is as follows:

With respect to any approved celebrity that becomes an activated celebrity during the Term and/or for a period of twelve (12) months after the termination of this Agreement (the “Tail Period”), the Company shall pay the consultant the following compensation (which shall be non-refundable notwithstanding the termination of this Agreement):

The Company may terminate this Agreement with 30 days prior written notice to the consultant (provided that the consultant shall still be entitled to the cash, stock and bonus compensation they had previously earned). On June 19, 2013, the Company terminated the contract and the consultant agreed to waive the minimum payment of $2,500 per month (See Note 3).

WALLY WORLD MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

NOTE 5 – COMMITMENTS AND CONTINGENCIES (continued)

On April 1, 2013, the Company executed a lease agreement for approximately 1,400 square feet of office space located in Brunswick, New Jersey, which shall serve as the Company’s permanent offices.    The initial term of the lease shall be for 36 months, with one option to renew for an additional 36 months.    The base monthly rental for the premises is $2,100 plus common area maintenance charges.    In addition, the lease required a security deposit and one month of prepaid rent in the amount of $8,400 and $2,100, respectively.

Future minimum rental payments required under this operating lease are as follows:

Rent expense was $31,209 and $14,462 for the year ended September 30, 2014 and 2013, respectively.

On April 1, 2013, the Company entered into a consulting agreement (the “Agreement”) with a consultant to recruit and sign celebrities and entertainers who will offer services on the Company’s website. In consideration of this contract, on April 1, 2013 the Company issued 100,000 shares of its common stock to consultants for services. The Company valued these common shares at the fair value of $0.10 per common share based on the sale of common stock in a private placement at $0.10 per common share. The term of this Agreement shall be for a period of (12) twelve months from the date of this Agreement (the “Term”). Upon the expiration of the Term, this Agreement shall be automatically renewed for successive 12 month terms unless either party shall send written notice to the other party of its intention not to renew this Agreement at least thirty (30) days prior to the expiration of the then current Term. The consultant’s compensation shall be as follows:

With respect to any approved entertainer that becomes an activated entertainer during the Term and/or for a period of twelve (12) months after the termination of this Agreement, the Company shall pay the consultant the following compensation (which shall be non-refundable notwithstanding the termination of this Agreement):

The Company may terminate this Agreement with 30 days prior written notice to the consultant (provided that the consultant shall still be entitled to the cash, stock and bonus compensation they had previously earned). On May 1, 2013, the Company terminated the contract and the consultant agreed to waive the minimum payment of $2,500 per month (See Note 3).

WALLY WORLD MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2014

NOTE 6 – SUBSEQUENT EVENTS

On October 23, 2014 (the “Closing Date”), the Company closed a financing transaction by entering into a Securities Purchase Agreement dated October 23, 2014 (the “Securities Purchase Agreement”) with certain funds and investors signatory to such Securities Purchase Agreement (the “Purchasers”) for an aggregate subscription amount of $160,000 (the “Purchase Price”). Pursuant to the Securities Purchase Agreement, the Company issued the following to the Purchasers: (i) 10% Convertible Promissory Notes with an aggregate principal amount of $160,000 (the “Notes”), (ii) Class A Warrants to purchase an aggregate of 4,266,656 shares of the Company’s common stock, par value $0.01 per share, for an exercise price of $0.05 per share for a period of five (5) years from the effective date of the registration statement (the “Class A Warrants”), and (iii) Class B Warrants to purchase an aggregate of 4,266,656 shares of the Company’s common stock, par value $0.01 per share, for an exercise price of $0.25 per share for a period of five (5) years from the effective date of the registration statement (the “Class B Warrants”, and together with the Class A Warrants, the “Warrants”). The Company paid legal fees associated with the issuance of the Notes of $10,000 which was recognized as debt discount to be amortized over the terms of the Note.

The terms of the Notes and the Warrants are as follows:

10% Convertible Promissory Notes

The total principal amount of the Notes are $160,000. The Notes accrue interest at a rate equal to 10% per annum and have a maturity date of April 23, 2015. The Notes are convertible any time after the issuance date of the Notes. The Purchasers have the right to convert the Notes into shares of the Company’s common stock at a conversion price equal to the lesser of (i) $0.0375, and (ii) 75% of the lowest closing bid price for the 20 consecutive trading days preceding a Conversion Date, subject to standard adjustments and price protection on the conversion price as discussed below. The Notes can be redeemed under certain conditions and the Company can force the conversion of the Notes in the event certain equity conditions are met. As long as any portions of this Note remains outstanding, unless the holders of at least 51% in principal amount of the then outstanding Notes shall have otherwise given prior written consent, the Company shall not, and shall not permit any of the Subsidiaries to, directly or indirectly enter into certain transactions as defined in section 7 of the promissory note agreement. One of those transactions is that the Company may not borrow or guarantee funds or assume any indebtedness in excess of $100,000 in the aggregate other than incurring trade payables in the ordinary course of business.

In the event of default, the Purchasers have the right to require the Company to repay in cash all or a portion of the Notes at a price equal to 115% of the aggregate principal amount of the Notes plus all accrued but unpaid interest.

Warrants

The Warrants are exercisable in whole or in part, at an initial exercise price per share of $0.05 for the Class A Warrants and $0.25 for the Class B Warrants, subject to adjustment. The exercise price and number of shares of the Company’s common stock issuable under the Warrants (the “Warrant Shares”) are subject to adjustments for stock dividends, splits, combinations, subsequent rights offerings, pro rata distributions and any issuance of securities below the exercise price of the Warrants. Any adjustment to the exercise price shall similarly cause the number of warrant shares to be adjusted so that the total value of the Warrants may increase. The warrants also contain a cashless exercise provision.

Since the Company determined that the terms of the Notes and Warrants include a down-round provision under which the conversion price and exercise price could be affected by future equity offerings undertaken by the Company under the provisions of FASB ASC Topic No. 815-40, “Derivatives and Hedging - Contracts in an Entity’s Own Stock”, the embedded conversion options and the warrants were accounted for as derivative liabilities at the date of issuance and adjusted to fair value through earnings at each reporting date. In accordance with ASC 815, the Company has bifurcated the conversion feature of the convertible notes, along with the free-standing warrant derivative instruments and recorded derivative liabilities on their issuance date. The Company uses the Black-Scholes option pricing model to value the derivative liabilities. Included in the model to value the derivative liabilities of the above Notes and Warrants are the following assumptions: stock price at valuation date of $0.02, exercise/conversion price ranging from $0.015 to $0.05, dividend yield of zero, years to maturity of 0.50 – 5.00, a risk free rate of 0.04% - 1.55%, and expected volatility of 193% - 215%. The Notes were all discounted in full based on the valuations and the Company recognized an additional derivative expense of $151,646 upon recording of the derivative liabilities. The total debt discount of $160,000 consisted of legal fees related to the Notes of $10,000 and the valuation of the warrants of $150,000 to be amortized over the terms of the Note. At issuance date, the Company recorded warrant derivative liability of $163,243 and note derivative liability of $138,403. These derivative liabilities will then be revalued on each reporting date.

There are not and have not been any disagreements between us and our accountants on any matter of accounting principles, practices or financial statement disclosure.

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 our management, including the Company’s Chief Executive Officer (“CEO”) (the Company’s principal executive officer) and Chief Financial Officer (“CFO”) (the Company’s principal financial and accounting officer), 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 CEO and CFO concluded that the Company’s disclosure controls and procedures are 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 CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

Management’s Annual Report On Internal Control Over Financial Reporting

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting for the Company.  Our internal control system was designed to, in general, provide reasonable assurance to the Company’s management and board regarding the preparation and fair presentation of published financial statements, but because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management assessed the effectiveness of the Company’s internal control over financial reporting as of September 30, 2014.  The framework used by management in making that assessment was the criteria set forth in the document entitled “ Internal Control – Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that assessment, our management has determined that as of September 30, 2014, the Company’s internal control over financial reporting was effective for the purposes for which it is intended.

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm as we are a smaller reporting company and not required to provide the report.

Changes in Internal Controls over Financial Reporting

There were no changes (including corrective actions with regard to significant deficiencies or material weaknesses) in our internal controls over financial reporting that occurred during the quarter ended September 30, 2014 that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

Our management, including the Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud.  A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.  Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

None.

PART III

The following table sets forth the name and age of officers and director as of December 23, 2014. Our executive officers are elected annually by our Board of Directors (which currently consists solely of Darin Myman). Our executive officers hold their offices until they resign, are removed by the Board, or his successor is elected and qualified.

Set forth below is a brief description of the background and business experience of our executive officer and director for the past five years.

Darin Myman, Chief Executive Officer and Director

Mr. Myman is a co-founder of Wally World and has served as the Chief Operating Officer of Wally World since its inception on May 17, 2012. On December 3, 2012 Mr. Myman became the Chief Executive and President of Wally World.  He has served as CEO and a member of PeopleString Corporation’s Board of Directors. Mr. Myman has held these positions from January 2009 until May 17, 2013. Mr. Myman developed extensive Internet skills through a variety of positions. He has executive management and founder experience having served as a co-founder and CEO of BigString Corporation, a publicly traded company, since October 2005. He also has corporate governance and board experience having served as a member of BigString’s Board of Directors since BigString’s inception.

Adam Wasserman, Chief Financial Officer

Mr. Wasserman has been our Chief Financial Officer since November 2012. Since 1999, Mr. Wasserman is chief executive officer for CFO Oncall, Inc. and CFO Oncall Asia, Inc. (collectively “CFO Oncall”), where he owns 80% and 100% of such businesses, respectively. CFO Oncall provides chief financial officer services to various companies where he is an integral member of executive management responsible for financial and accounting matters. He has a strong background in financial reporting, budgeting and planning, mergers and acquisitions, auditing, accounting, automated systems, banking relations and internal controls. Mr. Wasserman has substantial experience with SEC filings such as initial public offerings, 10-Ks and 10-Qs. Mr. Wasserman has a strong background in serving companies located internationally and has been extensively involved in managing private-to-public projects and providing consulting services to public companies in the USA, China and other countries since 1999.

Mr. Wasserman serves as the Chief Financial Officer of Oriental Dragon Corp. since June 2010, Vapir Enterprises Inc. since January 2010, and Cleantech Solutions International, Inc. since December 2012. Mr. Wasserman has also served as chief financial officer for other companies all under the terms of a consulting agreement with CFO Oncall, Inc.

Mr. Wasserman holds a Bachelor of Science in Accounting from the State University of New York at Albany. He is a member of The American Institute of Certified Public Accountants, is a director, treasurer and an executive board member of Gold Coast Venture Capital Association, Inc.

Family Relationships

There are no family relationships among any of our officers or directors.

Involvement in Certain Legal Proceedings

To the best of our knowledge, none of our directors or executive officers has, during the past ten years:

Except as set forth in our discussion below in “Certain Relationships and Related Transactions,” none of our directors or executive officers has been involved in any transactions with us or any of our directors, executive officers, affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the Commission.

Code of Ethics

We have not adopted a code of ethics that applies to our principal executive officer, or principal financial officer or persons performing similar functions, because of the small number of persons involved in the management of the Company.

Term of Office

Our directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors (which currently consists solely of Darin Myman) and hold office until removed by the board.

Section 16(a) Beneficial Ownership Reporting Compliance

The Company does not have a class of securities registered under the Exchange Act and therefore its directors, executive officers, and any persons holding more than ten percent of the Company’s common stock are not required to comply with Section 16 of the Exchange Act.

Corporate Governance

Due to its size, at this time the Company does not have a nominating nor audit committee of the board of directors. The board of Directors consists of one director. The Company receives no revenues. At such time that the Company has a larger board of directors and generates revenue, the Company will propose creating committees of its board of directors, including both a nominating and an audit committee. Accordingly, the Company does not have an audit committee financial expert.

Compensation of Directors

Directors are permitted to receive fixed fees and other compensation for their services as directors. The Board of Directors (which currently consists solely of Darin Myman) has the authority to fix the compensation of directors. No amounts have been paid to, or accrued to, directors in such capacity.

The following table summarizes the overall compensation earned during the period ended September 30, 2014 and 2013 by (1) each person who served as our principal executive officer; and (2) our two most highly compensated executive officers.  The value attributable to any Stock Awards reflects the grant date fair values of stock awards calculated in accordance with FASB Accounting Standards Codification Topic 718, as described further in Note 3 – Stockholders’ Equity to our year-end financial statements.

The following summary compensation table sets forth all compensation awarded to, earned by, or paid to the named executive officers paid by us during the period ended September 30, 2014 and 2013: 

SUMMARY COMPENSATION TABLE