UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q /A
Amendment
No. 1
☒ QUARTERLY REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the quarterly period ended December 31, 2014
☐ TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the transition period from ____________ to____________
Commission
File No. 000-49652
FONU2
Inc.
(Exact
name of registrant as specified in its charter)
Nevada |
|
65-0773383 |
(State
or other jurisdiction of
incorporation
or organization) |
|
(I.R.S.
Employer
Identification No.) |
135
Goshen Road Ext, Suite 205
Rincon,
GA 31326
(Address
of principal executive offices)
(912)
655-5321
(Registrant’s
telephone number, including area code)
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the 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 ☒ No ☐
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 ☒ No ☐
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 definition of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated
filer ☐ |
Accelerated filer ☐ |
Non-accelerated
filer ☐ |
Smaller reporting company ☒ |
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
Indicate
the number of shares outstanding of each of the Registrant’s classes of common stock, as of the latest practicable date:
June 30,
2015 - Common – 239,683,331
June 30,
2015 - Preferred – 6,250
Explanatory
Note
This
amendment to the Form 10-Q/A for the three months ended December 31, 2014, as originally filed February 20, 2015, is being filed
solely to account for a restatement of Film Production Contract as well as due to a PCAOB registration issue of our former auditor.
No other changes have been made, and the document has not been updated to include events that occurred after the original filing.
FONU2,
INC.
FORM
10-Q
For
the quarterly period ended December 31, 2014
INDEX
|
|
Page |
PART
1 – FINANCIAL INFORMATION |
|
|
|
|
Item 1. |
Financial
Statements (Unaudited) |
4 |
Item 2. |
Management's
Discussion and Analysis of Financial Condition and Results of Operations |
15 |
Item 3. |
Quantitative
and Qualitative Disclosure About Market Risk |
18 |
Item 4. |
Controls
and Procedures |
18 |
|
|
|
PART II – OTHER INFORMATION |
|
|
|
|
Item 1. |
Legal Proceedings |
20 |
Item 1A. |
Risk Factors |
20 |
Item 2. |
Unregistered
Sales of Equity Securities and Use of Proceeds |
20 |
Item 3. |
Defaults upon Senior Securities |
21 |
Item 4. |
Mine Safety Disclosures |
21 |
Item 5. |
Other Information |
21 |
Item 6. |
Exhibits |
22 |
|
|
|
|
SIGNATURES |
23 |
PART
1. FINANCIAL INFORMATION
ITEM
1. FINANCIAL STATEMENTS (UNAUDITED)
The
financial statements of the registrant required to be filed with this Quarterly Report on Form 10-Q were prepared by management
and commence below, together with related notes. In the opinion of management, the financial statements fairly present the financial
condition of the registrant.
FONU2, INC. AND SUBSIDIARY
Consolidated Balance Sheets
| |
December 31,
2014
(Restated) | | |
September 30,
2014 | |
| |
(Unaudited) | | |
| |
ASSETS | |
| | |
| |
CURRENT ASSETS | |
| | |
| |
| |
| | |
| |
Cash | |
$ | 44,793 | | |
$ | 15,643 | |
Inventory | |
| 7,510 | | |
| 9,007 | |
Prepaid expenses | |
| 10,263 | | |
| 31,516 | |
Total Current Assets | |
| 62,566 | | |
| 56,166 | |
| |
| | | |
| | |
PROPERTY AND EQUIPMENT, net | |
| 13,029 | | |
| 14,157 | |
| |
| | | |
| | |
OTHER ASSETS | |
| | | |
| | |
Film production contract | |
| 259,062 | | |
| - | |
Security deposits | |
| 2,285 | | |
| 2,285 | |
Total Other Assets | |
| 261,347 | | |
| 2,285 | |
TOTAL ASSETS | |
$ | 336,942 | | |
$ | 72,608 | |
| |
| | | |
| | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |
| | | |
| | |
| |
| | | |
| | |
CURRENT LIABILITIES | |
| | | |
| | |
Accounts payable and accrued expenses | |
$ | 15,342 | | |
$ | 7,866 | |
Accrued interest payable | |
| 30,689 | | |
| 32,208 | |
Payroll and payroll tax liabilities | |
| 11,662 | | |
| 10,002 | |
Derivative liability | |
| 43,568 | | |
| 247,880 | |
Notes payable | |
| 89,000 | | |
| 19,000 | |
Convertible notes payable, net | |
| 61,887 | | |
| 195,320 | |
Related party payable | |
| 18,000 | | |
| 18,000 | |
Total Current Liabilities | |
| 270,148 | | |
| 530,276 | |
| |
| | | |
| | |
NON-CURRENT LIABILITIES | |
| | | |
| | |
Notes payable | |
| 25,000 | | |
| 25,000 | |
Total Non-Current Liabilities | |
| 25,000 | | |
| 25,000 | |
TOTAL LIABILITIES | |
| 295,148 | | |
| 555,276 | |
| |
| | | |
| | |
STOCKHOLDERS' EQUITY | |
| | | |
| | |
Preferred stock series A; 20,000,000 shares authorized, | |
| | | |
| | |
at $0.01 par value, -0- and -0- | |
| | | |
| | |
shares issued and outstanding, respectively | |
| - | | |
| - | |
Preferred stock series B; 20,000,000 shares authorized, | |
| | | |
| | |
at $0.01 par value, 6,250 and -0- | |
| | | |
| | |
shares issued and outstanding, respectively | |
| 6 | | |
| - | |
Common stock; 2,000,000,000 shares authorized, | |
| | | |
| | |
at $0.001 par value, 2,703,924 and 312,284 | |
| | | |
| | |
shares issued and outstanding, respectively | |
| 2,704 | | |
| 312 | |
Additional paid-in capital | |
| 40,871,071 | | |
| 39,918,053 | |
Deficit accumulated during the development stage | |
| (40,831,987 | ) | |
| (40,401,033 | ) |
Total Stockholders' Equity | |
| 41,794 | | |
| (482,668 | ) |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | |
$ | 336,942 | | |
$ | 72,608 | |
The accompanying notes are an integral part
of these unaudited financial statements.
FONU2, INC. AND SUBSIDIARY
Consolidated Statements of Operations
(Unaudited)
| |
For the Three
Month Ended
| |
| |
December 31, | |
| |
2014 | | |
2013 | |
| |
| | |
| |
REVENUES | |
$ | 117,285 | | |
$ | 85,096 | |
COST OF SALES | |
| 42,955 | | |
| 32,864 | |
| |
| | | |
| | |
GROSS PROFIT | |
| 74,330 | | |
| 52,232 | |
| |
| | | |
| | |
OPERATING EXPENSES | |
| | | |
| | |
| |
| | | |
| | |
Depreciation | |
| 1,128 | | |
| 1,128 | |
Product development | |
| 4,124 | | |
| 235,819 | |
Compensation | |
| 42,052 | | |
| 38,870 | |
Professional fees | |
| 59,217 | | |
| 108,385 | |
General and administrative | |
| 56,412 | | |
| 26,829 | |
| |
| | | |
| | |
Total Operating Expenses | |
| 162,933 | | |
| 411,031 | |
| |
| | | |
| | |
LOSS FROM OPERATIONS | |
| (88,603 | ) | |
| (358,799 | ) |
| |
| | | |
| | |
OTHER EXPENSES | |
| | | |
| | |
| |
| | | |
| | |
Interest expense | |
| (104,615 | ) | |
| (112,623 | ) |
Gain on settlement of debt | |
| 2,090 | | |
| 5,719 | |
Gain (loss) on derivative liability | |
| (239,826 | ) | |
| 673,835 | |
| |
| | | |
| | |
Total Other Expenses | |
| (342,351 | ) | |
| 566,931 | |
| |
| | | |
| | |
INCOME (LOSS) BEFORE INCOME TAXES | |
| (430,954 | ) | |
| 208,132 | |
PROVISION FOR INCOME TAXES | |
| - | | |
| - | |
| |
| | | |
| | |
NET INCOME (LOSS) | |
$ | (430,954 | ) | |
$ | 208,132 | |
| |
| | | |
| | |
BASIC AND DILUTED INCOME (LOSS) | |
| | | |
| | |
PER SHARE | |
$ | (0.37 | ) | |
$ | 1.19 | |
| |
| | | |
| | |
WEIGHTED AVERAGE NUMBER OF | |
| | | |
| | |
COMMON SHARES OUTSTANDING | |
| 1,172,298 | | |
| 174,831 | |
The accompanying notes are an integral part
of these unaudited financial statements.
FONU2,
INC. AND SUBSIDIARY
Consolidated
Statements of Cash Flows
(Unaudited)
| |
For the Three Months Ended | |
| |
December 31, | |
| |
2014 (Restated) | | |
2013 | |
OPERATING ACTIVITIES | |
| | | |
| | |
Net income (loss) | |
$ | (430,954 | ) | |
$ | 208,132 | |
Adjustments to reconcile loss to cash flows from
operating activities: | |
| | | |
| | |
Depreciation | |
| 1,128 | | |
| 1,128 | |
Amortization of debt discount | |
| 98,904 | | |
| 89,320 | |
Gain on derivative liability | |
| 239,826 | | |
| (673,835 | ) |
Stock-based compensation | |
| 14,739 | | |
| - | |
Gain on settlement of debt | |
| (2,090 | ) | |
| (5,719 | ) |
Changes in operating assets and liabilities | |
| | | |
| | |
Inventory | |
| 1,497 | | |
| - | |
Prepaid expenses | |
| 21,344 | | |
| 70,274 | |
Accounts payable & accrued liabilities | |
| 14,756 | | |
| 2,208 | |
| |
| | | |
| | |
Net Cash Used in Operating Activities | |
| (40,850 | ) | |
| (308,492 | ) |
| |
| | | |
| | |
INVESTING ACTIVITIES | |
| | | |
| | |
Purchase of fixed assets | |
| - | | |
| (4,919 | ) |
| |
| | | |
| | |
Net Cash Used in Investing Activities | |
| - | | |
| (4,919 | ) |
| |
| | | |
| | |
FINANCING ACTIVITIES | |
| | | |
| | |
Cash received on convertible notes payable | |
| 70,000 | | |
| - | |
Repayments on convertible notes payable | |
| - | | |
| (53,000 | ) |
Cash received on notes payable | |
| - | | |
| 195,000 | |
Common stock issued on exercise of warrants | |
| - | | |
| 90,000 | |
Common and preferred stock issued for cash | |
| - | | |
| 130,000 | |
| |
| | | |
| | |
Net Cash Provided by Financing Activities | |
| 70,000 | | |
| 362,000 | |
| |
| | | |
| | |
NET INCREASE (DECREASE) IN CASH | |
| 29,150 | | |
| 48,589 | |
| |
| | | |
| | |
CASH AT BEGINNING OF YEAR | |
| 15,643 | | |
| 54,197 | |
| |
| | | |
| | |
CASH AT END OF YEAR | |
$ | 44,793 | | |
$ | 102,786 | |
| |
| | | |
| | |
SUPPLEMENTAL CASH FLOW INFORMATION: | |
| | | |
| | |
CASH PAID FOR: | |
| | | |
| | |
Interest | |
$ | - | | |
$ | - | |
Income taxes | |
$ | - | | |
$ | - | |
| |
| | | |
| | |
NON-CASH INVESTING ACTIVITIES: | |
| | | |
| | |
Common stock issued for convertible notes payable and other debts | |
$ | 237,477 | | |
$ | - | |
Write off of derivative liability into additional paid in capital | |
$ | 444,138 | | |
$ | - | |
Preferred stock issued in acquisition of subsidiary | |
$ | 259,062 | | |
$ | - | |
The
accompanying notes are an integral part of these unaudited financial statements.
FONU2,
INC. and Subsidiary
Notes
to the Consolidated Financial Statements
December
31, 2014
(Restated
and Unaudited)
NOTE
1 – RESTATEMENT OF FILM PRODUCTION CONTRACT
On
December 7, 2014 the Company issued 6,250 shares of Series B preferred stock in order to complete the acquisition of Studioplex
City, LLC. The shares were valued at $400.00 per share. The sole asset of Studioplex City, LLC was a two picture deal with the
director Penny Marshall.
Previously
this Film Production Contract was accounted for at the full value of $2,500,000.
These
preferred shares carried super voting rights of 500 per share i.e. 1,250,000,000 votes. At the date of the transaction 659,608,217
(pre-split) common stock was issued, trading at $0.0006. Therefore the Company had a market capitalization of $395,765 and the
Preferred Stock Series B had 65% of voting rights in the Company.
Accordingly
the Company, has recognized a correction of the value of the film assert to 65% of the value of the Company i.e. $259,062. Additional
Paid In Capital has similarly been reduced by $2,240,938 being the amount of the write down.
NOTE
2 – CONDENSED FINANCIAL STATEMENTS
The accompanying
financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include
only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at
December 31, 2014 and for all periods presented herein, have been made.
Certain
information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles
generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial
statements be read in conjunction with the financial statements and notes thereto included in the Company's September 30, 2014
audited financial statements. The results of operations for the periods ended December 31, 2014 are not necessarily indicative
of the operating results for the full year.
NOTE
3 – GOING CONCERN
The Company's
financial statements are prepared using generally accepted accounting principles in the United States of America applicable to
a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business.
The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue
as a going concern. During the three months ended December 31, 2014 the Company realized a net loss of $430,954, used $40,850
in cash from operating activities and had a working capital deficit of $207,582. The ability of the Company to continue as a going
concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company
is unable to obtain adequate capital, it could be forced to cease operations.
In order
to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is
to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet
its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that
the Company will be successful in accomplishing any of its plans.
The ability
of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in
the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial
statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
NOTE
4 – CONVERTIBLE NOTES PAYABLE
As of December
31, 2014 and September 30, 2014, the Company had total of $61,887 and $195,320 in outstanding convertible notes payable respectively:
| |
| |
| |
December 31, 2014 | | |
September 30, 2014 | |
Convertible Debt | |
Note Date | |
Maturity Date | |
Face value | | |
Discount
| | |
Net | | |
Face value | | |
Discount
| | |
Net | |
| |
| |
| |
| | |
| | |
| | |
| | |
| | |
| |
Loan #1 | |
11/6/2013 | |
8/8/2014 | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | 51,560 | | |
$ | - | | |
$ | 51,560 | |
Loan #2 | |
1/24/2014 | |
10/28/2014 | |
| 16,265 | | |
| - | | |
| 16,265 | | |
| 78,500 | | |
| (23,290 | ) | |
| 55,210 | |
Loan #3 | |
4/11/2014 | |
4/11/2014 | |
| 29,500 | | |
| (12,122 | ) | |
| 17,378 | | |
| 103,000 | | |
| (54,463 | ) | |
| 48,537 | |
Loan #4 | |
11/13/2013 | |
11/12/2015 | |
| 49,948 | | |
| (21,704 | ) | |
| 28,244 | | |
| - | | |
| - | | |
| - | |
| |
| |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Long-term | |
| |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Loan # 5 | |
| |
| |
| - | | |
| - | | |
| - | | |
| 94,990 | | |
| (54,977 | ) | |
| 40,013 | |
| |
| |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| |
| |
| |
$ | 95,713 | | |
$ | (33,826 | ) | |
$ | 61,887 | | |
$ | 328,050 | | |
$ | (132,730 | ) | |
$ | 195,320 | |
NOTE
4 – CONVERTIBLE NOTES PAYABLE (Continued)
On
November 6, 2013 the Company entered into a convertible promissory note with an unrelated third party whereby the Company borrowed
$128,500, with initial debt discount of $18,500. The principal accrues interest at a rate of eight percent per annum and is due
in full on August 8, 2014. The note became convertible on May 5, 2014 at a 42 percent discount to the average of the three lowest
closing prices during the ten day period prior to conversion. The note will accrue interest at a rate of 22 percent per annum
should the Company default. The Company analyzed the conversion option for derivative accounting consideration under ASC 815-15
“Derivatives and Hedging” and determined that the derivative instrument should be classified as a liability once the
conversion option becomes effective due to there being no explicit limit to the number of shares to be delivered upon settlement
of the above conversion options. During the year ended September 30, 2014 the lender converted $76,940 of the note principal into
15,415,891 shares of the Company’s common stock. As of September 30, 2014 the remaining principal balance on this note was
$51,560. During the three months ended December 31, 2014 the lender converted the remaining $51,560 note principal plus $5,140
in accrued interest into a total of 115,816,546 shares of the Company’s common stock. Pursuant to this transaction, the
Company recorded a gain on settlement of debt in the amount of $2,090.
On
November 13, 2013 the Company entered into a promissory note with an unrelated third party whereby the Company agreed to borrow
a maximum of $300,000. Each borrowing under the terms of the note, along with specific accrued interest is due two years from
the date the specific funds are received by the Company. All borrowings under the terms of this note are subject to a 10% original
issue discount such that the consideration due back to the lender is equal to cash proceeds actually received plus ten percent
of the amount borrowed. Through September 30, 2014, the Company had borrowed $137,500, with initial debt discount of $12,500 pursuant
to this promissory note. The note is exempt from interest for the 90 days after the note date; after 90 days the unpaid principal
balance shall accrue interest at a rate of 12 percent per annum. The note became convertible into shares of the Company’s
common stock on May 12, 2014 at 60 percent of the lowest trade price in the 25 trading days previous to the conversion. The Company
analyzed the conversion option for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging”
and determined that the derivative instrument should be classified as a liability once the conversion option becomes effective
due to there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options.
During the year ended September 30, 2014 the lender converted $42,510 of the note principal into 9,700,000 shares of the Company’s
common stock. As of September 30, 2014 the remaining principal balance on this note was $94,990. During the three months ended
December 31, 2014 the lender converted $45,042 of note principal into 185,700,000 shares of the Company’s common stock.
As of December 31, 2014 the remaining principal balance of the note was $49,948, with $10,661 in accrued interest.
On
April 11, 2014 the Company entered into a convertible promissory note with an unrelated third party, wherein the Company borrowed
$103,000. The principal accrues interest at a rate of eight percent per annum and is due in full on April 11, 2015. The note is
convertible at the option of the holder at any point after the note date at a 40 percent discount to the average of the three
lowest closing prices during the ten day period prior to conversion. The note will accrue interest at a rate of 22 percent per
annum should the Company default. The Company analyzed the conversion option for derivative accounting consideration under ASC
815-15 “Derivatives and Hedging” and determined that the derivative instrument should be classified as a liability
when the conversion option became effective after the note date due to there being no explicit limit to the number of shares to
be delivered upon settlement of the above conversion options. As of September 30, 2014 the principal balance on this note remained
at $103,000. During the three months ended December 31, 2014, the lender converted $73,500 in note principal into 283,529,413
shares of common stock. As of December 31, 2014 the remaining principal balance on the note was $29,500, with $1,336 in accrued
interest.
On
January 24, 2014 the Company entered into a Securities Purchase Agreement with an unrelated third-party entity in connection with
a convertible note whereby the Company borrowed $78,500. The note principal bears interest at a rate of eight percent per annum
and will accrue interest at a rate of 22 percent per annum should the Company default. The note principal and any unpaid accrued
interest is due in full on or before October 28, 2014. The note is convertible at the option of the holder at any point at least
180 days from the note date at a 42 percent discount to the average of the three lowest closing prices during the ten day period
prior to conversion. As of September 30, 2014 the full principal balance, along with accrued interest of $4,284, remained outstanding.
During the three months ended December 31, 2014, the lender converted $62,235 in note principal into 341,825,080 shares of common
stock. As of December 31, 2014, the remaining principal balance of the note was $16,265, with $5,240 in accrued interest.
During
the year ended September 30, 2014, the Company recorded debt discounts totaling $516,794, and amortized a total $416,125 to interest
expense, leaving total unamortized debt discounts of $132,730 as of September 30, 2014. During the three months ended December
31, 2014, the Company recorded no new debt discounts and amortized a total of $98,904 to interest expense, leaving total unamortized
debt discounts of $33,826 as of December 31, 2014.
NOTE
5 - NOTES PAYABLE
As of December
31, 2014 and September 30, 2014, the Company had total of $114,000 and $44,000 in outstanding notes payable respectively.
| |
| |
| |
December 31, 2014 | | |
September 30, 2014 | |
Notes Payable | |
Note Date | |
Maturity Date | |
Face value | | |
Discount
| | |
Net
| | |
Face value | | |
Discount | | |
Net | |
Current | |
| |
| |
| | |
| | |
| | |
| | |
| | |
| |
Loan # 1 | |
5/1/2012 | |
Demand | |
| 19,000 | | |
| - | | |
| 19,000 | | |
| 19,000 | | |
| - | | |
| 19,000 | |
Loan # 2 | |
12/22/2014 | |
12/22/2015 | |
| 50,000 | | |
| - | | |
| 50,000 | | |
| - | | |
| - | | |
| - | |
Loan # 3 | |
12/31/2014 | |
12/31/2015 | |
| 20,000 | | |
| - | | |
| 20,000 | | |
| - | | |
| - | | |
| - | |
| |
| |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Long-Term | |
| |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Loan # 4 | |
8/26/2014 | |
8/25/2017 | |
| 25,000 | | |
| - | | |
| 25,000 | | |
| 25,000 | | |
| - | | |
| 25,000 | |
| |
| |
| |
| 114,000 | | |
| - | | |
| 114,000 | | |
| 44,000 | | |
| - | | |
| 44,000 | |
On May 1,
2012 the Company entered into a loan agreement with an unrelated third party. The note principal bears interest at a rate of 10
percent per annum and due on demand. At September 30, 2014 the entire $19,000 principal balance remained outstanding, along with
$3,800 in accrued interest. As of December 31, 2014 accrued interest on the note totaled $4,758.
On
December 22, 2014 the Company entered into a Convertible Redeemable Note Agreement with an unrelated third party. Pursuant to
the terms of the note, the Company borrowed $50,000 from the lender, which accrues interest at a rate of eight percent per annum,
and is due on December 22, 2015. The note is convertible at the option of the lender at any time after the six month anniversary
of the note, at the lower of 70 percent of the thirty-day volume weighted average trading price of the Company’s common
stock, or $0.0003 per share. As of December 31, 2014 the outstanding principal balance on the note was $50,000, with accrued interest
of $99.
On
December 31, 2014 the Company entered into a Convertible Redeemable Note Agreement with an unrelated third party. Pursuant to
the terms of the note, the Company borrowed $20,000 from the lender, which accrues interest at a rate of eight percent per annum,
and is due on December 31, 2015. The note is convertible at the option of the lender at any time after the six month anniversary
of the note, at $0.001 per share. As of December 31, 2014 accrued interest on the note totaled $39.
On
August 26, 2014 the Company entered into a $25,000 convertible debenture note agreement with an unrelated third party. The note
accrues interest at a rate of 12 percent per annum and is due on August 25, 2017. Pursuant to the terms of the note, the principal
can be converted into shares of the Company’s common stock, at the option of the lender, at any time after six months and
up to one year from the note date at a 20 percent discount to the market price of the shares. The discount will be 25 percent
if converted between one and two years, and will be 30 percent if converted after two years. The maximum conversion price will
be $0.50 per share. As of December 31, 2014, the entire principal balance remained outstanding and accrued interest on the note
totaled $379.
NOTE
6 – RELATED PARTY NOTES PAYABLE
On
August 5, 2014 the Company borrowed $18,000 from a related party in the form of a note payable. The note accrues interest at a
rate of 12 percent per annum, is unsecured, and is due on demand.
NOTE
7 – FAIR VALUE MEASUREMENTS
As defined
in FASB ASC 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date (exit price). The Company utilized the market data of similar
entities in its industry or assumptions that market participants would use in pricing the asset or liability, including assumptions
about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated,
or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. FASB ASC 820
establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives highest priority
to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and lowest priority to
unobservable inputs (level 3 measurement).
The
three levels of the fair value hierarchy are as follows:
Level
1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets
are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information
on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities
and listed equities.
Level 2
– Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly
observable as of the reported date.
Level 3
– Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may
be used with internally developed methodologies that result in management’s best estimate of fair value.
The following
table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted
for at fair value as December 31, 2014.
Recurring Fair Value Measures | |
Level 1 | | |
Level 2 | | |
Level 3 | | |
Total | |
LIABILITIES: | |
| | | |
| | | |
| | | |
| | |
Derivative liability | |
| -- | | |
| -- | | |
| 43,568 | | |
| 43,568 | |
NOTE
8 – DERIVATIVE INSTRUMENTS
During
2013, the Company issued debt instruments that were convertible into common stock at a 42 percent discount to the average of the
three lowest closing prices during the ten day period prior to conversion. During the year ended September 30, 2014 the Company
issued additional debt instruments under the same terms, as well as additional debt instruments convertible into common stock
at a 40% discount to the lowest trading price in the 25 trading days previous to conversion, 60% discount to the average of the
three lowest closing prices during the ten day period prior to conversion. The conversion options embedded in these instruments
contain no explicit limit to the number of shares to be issued upon settlement and as a result are classified as liabilities under
ASC 815. Additionally, because the number of shares to be issued upon settlement is indeterminate, all other share settle-able
instruments must also be classified as liabilities. A debt discount of $168,902 was recorded as a result of these derivative liabilities,
$136,841 of which was amortized into interest expense for the year ended September 30, 2013. During the period ended September
30, 2014, debt discount of $516,794 was recorded as a result of new derivative liabilities, $416,125 of which was amortized into
interest expense for the period ending September 30, 2014. During the three months ended December 31, 2014, $98,904 of the debt
discount was amortized to interest expense.
During
the year ended September 30, 2014 and the three months ended December 31, 2014, certain notes payable were converted resulting
in settlement of the related derivative liabilities. The Company re-measured the embedded conversion options at fair value on
the date of settlement and recorded these amounts to additional paid-in capital.
The
following table summarizes the changes in the derivative liabilities during the period ended December 31, 2014:
Ending
balance as of September 30, 2014 | |
$ | 247,880 | |
Additions due to new convertible debt and warrants issued | |
| - | |
Reclassification of derivative liabilities to additional paid-in capital due to conversion of debt | |
| (444,138 | ) |
Change in fair value | |
| 239,826 | |
Ending balance
as of December 31, 2014 | |
$ | 43,568 | |
The
Company uses the Black Scholes Option Pricing Model to value its derivatives based upon the following assumptions: dividend yield
of -0-%, volatility of 196-472%, risk free rate of 0.11-0.18% and an expected term of 0.10 to one year.
NOTE
9 – EQUITY ACTIVITY
Common
Stock
During
the three months ended December 31, 2014, the Company issued an aggregate of 2,317,178 post-split shares (926,871,039 pre-split
shares) of common stock of common stock upon the conversion and partial conversion of $237,477 in convertible debts. In addition,
the Company issued an aggregate of 74,463 post-split shares (29,785,000 pre-split shares) of common stock for $14,739 in services
rendered.
Preferred
Stock
On
December 7, 2014 the Company authorized the creation of Series B preferred stock. The Series B preferred stock has liquidation
preference, and each share of Series B preferred stock carries voting rights equivalent to that of five hundred shares of common
stock. In addition, the Series B preferred stock is convertible into shares of common stock at the option of the shareholder at
a rate of ten common shares for every share of Series B preferred stock.
On
December 7, 2014 the Company issued 6,250 shares of Series B preferred stock in order to complete the acquisition of Studioplex
City, LLC. The shares were valued at $400.00 per share. These preferred shares carried super voting rights of 500 per share i.e.
1,250,000,000 votes. At the date of the transaction 659,608,217 (pre-split) common stock was issued, trading at $0.0006. Therefore
the Preferred Stock Series B had 65% of the voting rights in the Company.
Reverse
Stock-Split
On
December 22, 2014 the Company authorized a reverse-split of its outstanding common stock on a one-share-for-400-shares basis.
All references to common stock in these financial statements have been retroactively restated so as to account for the effects
of this reverse-split.
NOTE
10 – ACQUISITION OF STUDIOPLEX CITY, LLC
On
December 7, 2014 the Company issued 6,250 shares of Series B preferred stock in order to complete the acquisition of Studioplex
City, LLC. The shares were valued at $400.00 per share. The sole asset of Studioplex City, LLC was a two picture deal with the
director Penny Marshall.
These
preferred shares carried super voting rights of 500 per share i.e. 1,250,000,000 votes. At the date of the transaction 659,608,217
(pre-split) common stock was issued, trading at $0.0006. Therefore the Company had a market capitalization of $395,765 and the
Preferred Stock Series B had 65% of voting rights in the Company.
Accordingly,
the value of the film asset has been recorded at $259,062, being 65% of the then market capitalization of the Company.
NOTE
11 – SUBSEQUENT EVENTS
On
February 10, 2015 the Company entered into a Lease Purchase and Assignment Agreement with Medient Studios, Inc (a/k/a Moon River
Studios) whereby the Company purchased a land lease relating to property predominantly in Effingham County, GA, along with various
other assets of Medient. As consideration for this purchase, the Company agreed to issue ten million shares of the Company’s
common stock, and the Company’s assumption of $10,000,000 of Medient liabilities.
Subsequent
to December 31, 2014 the Company issued 2,515,960 post-split shares of common stock upon the conversion and partial conversion
of $55,603 in convertible notes payable.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
In addition to historical information,
this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. From time to time, we may also provide oral or written forward-looking
statements in other materials we release to the public. Such forward-looking statements are subject to the safe harbor created
by the Private Securities Litigation Reform Act of 1995. The forward-looking statements are not historical facts but rather are
based on current expectations, estimates and projections about our business and industry, and our beliefs and assumptions, and
include, but are not limited to, statements under the headings “Management's Discussion and Analysis of Financial Condition
and Results of Operations” and Outlook. Words such as “anticipate,” “believe,” “estimate,”
“expects,” “intend,” “plan,” “will” and variations of these words and similar expressions
identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties
and other factors, many of which are beyond our control, are difficult to predict and could cause actual results to differ materially
(both favorable and unfavorably) from those expressed or forecasted in the forward-looking statements. These risks and uncertainties
include, but are not limited to, those described in “Risk Factors” and elsewhere in this report, and those described
from time to time in our past and future reports filed with the Securities and Exchange Commission, including in our Annual Report
on Form 10-K for the year ended September 30, 2014. Forward-looking statements that were believed to be true at the time made may
ultimately prove to be incorrect or false. We undertake no obligation to revise or publicly release the results of any revision
to these forward-looking statements. Given these risks and uncertainties, readers are cautioned not to place undue reliance on
such forward-looking statements.
Overview
We are a film production and social
commerce company that is developing a precision sales and marketing platform that integrates into the social media networks. Functioning
like an order reservations and booking system, the FONU2 platform offers members list, buy, sell, and trade services locally in
any neighborhood and anywhere in the world.
Plan of Operations
The Company operates a comic book and
collectibles business. The retail operation continues to operate at on a non profitable basis. The Company plans to
dispose of these operations to concentrate on areas of higher growth and greater returns on investment.
The Company still believes that its
Social Commerce website offers potential for future income. However, this application requires significant further
investment to commercialize this operation. The Company is reviewing a number of potential synergistic acquisitions
that could benefit from the social marketing platform.
On December 8, 2014, the Company has
recently acquired Studioplex City, LLC (“Studioplex City”) and on February 10, 2015 acquired the lease to the 1,560
acre property in Effingham County, Georgia from Moon River Studios, Inc. The Company has established a film division to build
and operate a large scale full service movie studio and produce major motion pictures. For its first project the company
has hired Penny Marshall to direct and Wendy Laski to co-produce the movie project “Effa”.
Recent Developments & Subsequent
Events
On December 8, 2014, the Company entered
into a purchase agreement with Studioplex City, a Georgia limited liability company and Jake Shapiro, the owner of all membership
interests of Studioplex City. Pursuant to this agreement, the Company paid Jake Shapiro $2,500,000 in the form of 6,250 post-split
Series B convertible preferred shares (2,500,000 pre-split shares), which were issued to him on December 12, 2014. In return,
the Company received 100% of the membership interests of Studioplex City. As part of the purchase agreement, the Company has created
Studioplex City Acquisition Corp., which is a wholly owned subsidiary of the Company. Mr. Shapiro signed a volunatary three
year lock up on the Preferred Shares.
On February 10, 2015, the Company acquired
the 1,560 lease located in Effingham County, Georgia from Moon River Studios, Inc. (“Moon River”). The purchase price
was $10,000,000 and 10,000,000 post-split shares of FONU2 common stock. Terms of the purchase agreement require that the
FONU2 shares be registered and distributed to all Moon River shareholders as of record date February 10, 2015. In addition
to the lease, the FONU2 has acquired certain intellectual property and trademarks associated with the project. The property has
an independently appraised value in excess of $22,000,000. Included under terms of the original lease, Memorandum of Understanding
and supplemental agreement (i) the Company is responsible for an agreed amount of job creation and capital investment in the property,
(ii) All property taxes for the property have been waived for the term of the lease, (iii) the property may be purchased at any
time with no prepayment penalties, (iv) at the end of the lease, the property may be purchased for $100. FONU2 has assumed
the $10,000,000 note secured by the property. The note has an interest rate of zero percent with a 20 year term.
On February 12, 2015, the Company acquired
the worldwide distribution rights for the movie Yellow. The movie is written and directed by Nick Cassavetes ( The
Notebook, The Other Woman…), and stars Heather Wahlquist ( Alphadog, The Notebook… ), Sienna Miller (
American Sniper, Foxcatcher… ), Melanie Griffith ( Working Girl, Bonfire of the Vanities… ), Ray Liotta
( Goodfellas , Terminator 2… ) and others.
Under terms of the agreement, FONU2
will receive a ten percent distribution fee, and a twenty percent return on all funds expended associated with the acquisition
of the rights, print and advertising, marketing, and other expenses associated with the release of the movie. As consideration,
FONU2 has committed to provide these costs and fees, along with the assumption of $540,000 of costs associated with the movie.
Results of Operations
Three months ended December
31, 2014 compared to the three months ended December 31, 2013
For the three months ended December
31, 2014, we earned revenues of $117,285. We incurred $42,955 on cost of sales, earning a gross margin of $74,330. We had depreciation
expense of $1,128, general and product development expenses of $4,124. We incurred $42,052 in compensation and $59,217 on professional
fees, investment banking fees and the other professional services. We incurred general and administrative expenses of $56,412.
We incurred an interest expense of $104,615, a gain on settlement of debt of $2,090 and a loss on derivative liability of $239,826.
As a result, we had a net loss of $430,954 for the period ended December 31, 2014.
Comparatively, for the period ended
December 31, 2013, we earned revenues of $85,096. We incurred $32,864 on cost of sales, earning a gross margin of $52,232.
We recorded depreciation expense of $1,128 and product development expenses of $235,819. We incurred $38,870 on compensation and
$108,385 on professional fees. We incurred general and administrative expenses of $26,829. We incurred interest expense of $112,623,
a gain on settlement of debt of $5,719 and a gain on derivative liability of $673,835. As a result, we had net income of $208,132
for the period ended December 31, 2013. The increase in net loss between the three months ended December 31, 2014 and 2013
is primarily due to a decreased gain on derivative liability.
Capital Resources and Liquidity
The Company currently finances its
operations through investment capital from a number of accredited investors. The primary use of the funds is funding the
Company’s operations. Over the next twelve months, the Company’s cash requirement for operations is expected to be
in excess of $7,000,000. This requirement is expected to be funded by institutional investor capital. The Company has had
a number of high level discussions for these financing needs, however, there can be no assurance that we will be able to raise
capital, if at all, upon terms acceptable to the Company. The Company currently has no written agreements, arrangements or understandings
with respect to obtaining the necessary capital and there can be no assurance that the Company will be able to raise the required
funds.
The Company’s current and future
sources of capital are from investors, along with the distribution fees earned from the film Yellow. If the Company was
unsuccessful at raising additional capital this could lead to the Company’s termination of operations.
For the three months ended December
31, 2014, we used cash in operations of $40,850, consisting primarily of our net loss, partially offset by a loss on derivative
liability. Additionally we received $70,000 from notes payable. As a result we had a net cash inflow from financing
activities of $70,000.
For the three months ended December
31, 2013, we used cash in operations of $308,492 and cash used in investing activities from the purchase of fixed assets of $4,919.
Additionally, we received $195,000 from notes payable, $220,000 from common and preferred stock issued for cash. We repaid $53,000
to related party. As a result we had cash provided from financing activities of $362,000.
We currently have no firm commitments
for capital expenditures within the next year.
For the three months ended December
31, 2014, we had a net loss of $430,954. We had the following adjustments to reconcile loss to cash flows from operating
activities: $1,128 increase due to depreciation, a $98,904 increase due to amortization of debt discount, a $239,826 increase due
to a loss on derivative liability, a $14,739 increase due to stock-based compensation, and a $2,090 decrease due to a gain on settlement
of debt. We had the following changes in operating assets and liabilities: a $1,497 increase due to inventory, a $21,344
increase due to prepaid expenses, and a $14,756 increase due to accounts payable and accrued liabilities. As a result, we
had net cash used in operating activities of $40,850 for the three months ended December 31, 2014.
For the three months ended December
31, 2013, we had a net income of $208,132. We had the following adjustments to reconcile loss to cash flows from operating
activities: a $1,128 increase due to depreciation, a $89,320 increase due to the amortization of debt discount, a $673,835 decrease
due to a gain on derivative liability, and a $5,719 decrease due to a gain on settlement of debt. We had the following changes
in operating assets and liabilities: we had an increase of $70,274 due to prepaid expenses and a $2,208 increase in accounts payable
and accrued liabilities. As a result, we had net cash used in operating activities of $308,492 for the three months ended
December 31, 2013.
We did not pursue any investing activities
during the three months ended December 31, 2014.
For the three months ended December
31, 2013, we used $4,919 for the purchase of fixed assets, resulting in net cash used in investing activities of $4,919 for the
three months ended December 31, 2013.
For the three months ended December
31, 2014, we received $70,000 for cash received on notes payable, resulting in net cash provided by financing activities of $70,000
for the period.
For the three months ended December
31, 2013, we spent $53,000 on repayments on convertible notes payable. We received $195,000 from cash received on notes payable,
$90,000 from common stock issued on exercise of warrants, and $130,000 from common and preferred stock issued for cash. As
a result, we had net cash provided by financing activities of $362,000 for the three months ended December 31, 2013.
Off - Balance Sheet Arrangements
The Company had no material off-balance
sheet arrangements as of December 31, 2014 or September 30, 2014.
ITEM 3. QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
Not applicable for smaller reporting
companies.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls
and Procedures:
Based on Our evaluation as of the end
of the period covered by this Form 10-Q, Our principal executive officer and Our principal financial officer concluded that Our
disclosure controls and procedures as of the end of the period covered by this Form 10-Q were not effective such that the information
required to be disclosed by the Company in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported
within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to Our management, including
Our principal executive officer and Our principal financial officer, as appropriate to allow timely decisions regarding disclosure.
This material deficiency is due to a lack of adequate internal controls and the lack of an audit committee.
Management’s Annual Report
on Internal Control over Financial Reporting:
The Company’s management is responsible
for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange
Act). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes of accounting
principles generally accepted in the United States.
The Company’s management, with
the participation of the principal executive officer and the principal financial officer, evaluated the effectiveness of the Company’s
internal control over financial reporting as of December 31, 2014. In making this assessment, the Company’s management
used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal
Control – Integrated Framework. Based on this evaluation, Our management, with the participation of the principal executive
officer and principal financial officer, concluded that, as of December 31, 2014, Our internal control over financial reporting
was not effective, due primarily to lack of adequate internal controls and the lack of an audit committee. The most significant
material weaknesses that led management to this conclusion are the lack of segregation of duties, and failure in the operation
of controls over stock based compensation and derivative liabilities.
This Form 10-Q 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 pursuant to rules of the Commission
that permit the Company to provide only management’s report in this Form 10-Q
Evaluation of Changes in Internal
Control over Financial Reporting:
There have been no changes in internal
control over financial reporting during the first quarter of the fiscal year covered by this Form 10-Q that have materially affected,
or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 1A. RISK FACTORS
Not applicable for
smaller reporting companies.
ITEM 2. UNREGISTERED SALES OF
EQUITY SECURITIES AND USE OF PROCEEDS
Except as indicated below, during the
quarterly period ended December 31, 2014, we have not issued any unregistered securities that have not already been disclosed in
a Current Report on Form 8-K.
During the three months ended December
31, 2014, the Company issued to Asher Enterprises, Inc., a Delaware corporation (“Asher”), an aggregate total of 1,144,104
post-split shares of common stock (457,641,626 pre-split shares) in consideration of Asher’s multiple conversions and partial
conversion of the Company’s outstanding Convertible Notes. The total principal converted during the period was
$118,935. These shares were issued in reliance on the exemption from registration provided by Rule 4(a)(1) of the Securities
Act of 1933, as amended, and Rule 144 of the Securities and Exchange Commission.
During the three months ended December
31, 2014, the Company issued to JMJ Financial (“JMJ”), an aggregate total of 464,250 post-split shares of common stock
(185,700,000 pre-split shares) in consideration of JMJ’s partial conversions of the Company’s outstanding $300,000
Promissory Note dated November 13, 2013, as amended. The total principal converted during the period was $45,042. These
shares were issued in reliance on the exemption from registration provided by Rule 4(a)(1) of the Securities Act of 1933, as amended,
and Rule 144 of the Securities and Exchange Commission.
During the three months ended December
31, 2014, the Company issued to Magna Group, LLC (“Magna”), an aggregate total of 708,824 post-split shares of common
stock (283,529,413 pre-split shares) in consideration of Magna’s partial conversion of the Company’s outstanding Eight
Percent (8%) Convertible Note dated April 11, 2014 (initially entered into between the Company and Hanover House), in the original
principal amount of $103,000. The total principal converted during the period was $73,500. These shares were issued
in reliance on the exemption from registration provided by Rule 4(a)(1) of the Securities Act of 1933, as amended, and Rule 144
of the Securities and Exchange Commission.
On the dates indicated below, the Company
issued the following “unregistered” and “restricted” shares as indicated (all share figures are post-split).
Name | |
No. of Shares | | |
Issuance Date | |
Consideration |
| |
| | |
| |
|
Jeff Olweean | |
| 73,500 | | |
12-7-14 | |
(1) |
Robert Lees | |
| 250 | | |
12-31-14 | |
(3) |
Roger Miguel | |
| 250 | | |
12-31-14 | |
(3) |
Adam Kruger | |
| 125 | | |
12-31-14 | |
(3) |
Nicole Leigh | |
| 88 | | |
12-31-14 | |
(3) |
Eric Gill | |
| 125 | | |
12-31-14 | |
(3) |
Jeff Brown | |
| 63 | | |
12-31-14 | |
(3) |
Melissa Miguel | |
| 63 | | |
12-31-14 | |
(3) |
Jake Shapiro | |
| 6,250 Preferred | | |
12-08-14 | |
(2) |
(1) These shares were
issued in consideration of services related to the Company’s acquisition of Studioplex City, LLC.
(2) These shares were
issued as consideration for the Studioplex City LLC acquisition.
(3) These shares were
issued as consideration for general and administrative services rendered.
These shares were issued in reliance
on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506 of Regulation
D.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable
ITEM 5. OTHER INFORMATION
During the quarterly
period ended December 31, 2014, there were no material changes to the procedures by which security holders may recommend nominees
to the Company’s Board of Directors.
The Company is delinquent
in meeting its payroll tax obligations and is working to correct this as soon as possible.
ITEM 6. EXHIBITS
Exhibit 31* |
- |
Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|
|
|
Exhibit 32* |
- |
Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
|
|
|
101.INS** |
|
XBRL Instance Document |
|
|
|
101.SCH** |
|
XBRL Taxonomy Extension Schema Document |
|
|
|
101.CAL** |
|
XBRL Taxonomy Extension Calculation Linkbase Document |
|
|
|
101.DEF** |
|
XBRL Taxonomy Extension Definition Linkbase Document |
|
|
|
101.LAB** |
|
XBRL Taxonomy Extension Label Linkbase Document |
|
|
|
101.PRE** |
|
XBRL Taxonomy Extension Presentation Linkbase Document |
* Filed herewith
**XBRL (Extensible Business Reporting
Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11
or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act
of 1934, as amended, and otherwise is not subject to liability under these sections.
SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto
duly authorized.
Dated: June 30, 2015 |
FONU2, Inc. |
|
|
|
/s/ Roger Miguel |
|
June 30, 2015 |
|
Roger Miguel |
|
Chief Executive Officer |
Pursuant to the
requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated.
|
/s/ Roger Miguel |
|
June 30, 2015 |
|
Roger Miguel |
|
Chief Executive Officer |
|
/s/ Graham Bradstreet |
|
June 30, 2015 |
|
Graham Bradstreet |
|
Chief Financial Officer |
|
/s/ Jake Shapiro |
|
June 30, 2015 |
|
Chairman of the Board |
23
Exhibit 31
302 CERTIFICATION
I, Roger Miguel, certify that:
1. I have reviewed this
quarterly report on Form 10-Q of FONU2 Inc.;
2. Based on my knowledge,
this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by
this report;
3. Based on my knowledge,
the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. I am responsible for
establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a. Designed such
disclosure controls and procedures, or caused such disclosure controls and procedures, to be designed under my supervision, to
ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others
within those entities, particularly during the period in which this report is being prepared;
b. Designed
such internal control over financial reporting, or caused such internal control over financial reporting to be designed under
my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles;
c. Evaluated
the effectiveness of the registrant's disclosure controls and procedures and presented in this report my conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
and
d. Disclosed
in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s
most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. I have disclosed, based
on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee
of the registrant’s board of directors (or persons performing the equivalent functions):
a. All significant
deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b. any fraud, whether
or not material, that involves management or other employees who have a significant role in the registrant's internal control over
financial reporting.
Date: June 30, 2015 |
/s/ Roger Miguel |
|
Roger Miguel |
|
Chief Executive Officer |
|
|
|
/s/ Graham Bradstreet |
|
Graham Bradstreet |
|
Chief Financial Officer |
Exhibit 32
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
The undersigned officer of FONU2 Inc. (the
"Company"), hereby certifies, to such officer's knowledge, that the Company's Quarterly Report on Form 10-Q for the
three months ended December 31, 2014 (the "Report") fully complies with the requirements of Section 13(a) of the Securities
Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial
condition and results of operations of the Company.
Date: June 30, 2015 |
/s/ Roger Miguel |
|
Roger Miguel |
|
Chief Executive Officer |
|
Chief Financial Officer |
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