SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
(Amendment No. 2)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
September 6, 2011
Date of Report (Date of Earliest Event Reported)
AMWEST IMAGING INCORPORATED
(Exact name of registrant as specified in its charter)
Nevada 001-35014 27-2336038
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
815 John Street, Suite 210K
Evansville, IN 47713
(Address of principal executive offices)
(812) 250-4210
(Registrant's telephone number, including area code)
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[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
EXPLANATORY NOTE
References throughout this Amended Current Report on Form 8-K to "we,"
"our," "us," "the Company," "the Registrant," "Amwest," and similar terms refer
to Amwest Imaging Incorporated., unless otherwise expressly stated or the
context otherwise requires. This Current Report contains summaries of the
material terms of the agreements executed in connection with the transactions
described herein. The summaries of these agreements are subject to, and
qualified in their entirety by, reference to those agreements.
On September 7, 2011, we filed a Current Report on Form 8-K to report that
we completed the transactions contemplated by a Share Exchange Agreement of
September 6, 2011, by and amount Amwest and the shareholders of Instant Website
Technology, Inc. We acquired all of the issued and outstanding shares of Instant
Website Technology, Inc., in exchange for the issuance in the aggregate of
6,060,000 shares of our common stock. As a result of the Share Exchange
Agreement, Instant Website Technology, Inc., became a wholly-owned subsidiary of
Amwest.
On October 13, 2011, we filed a Quarterly Report for the quarter ended
August 31, 2011 and on November 4, 2011 we filed an Amendment to the Quarterly
Report for that quarter then ended which contained our financial statements
which included Instant Website Technology, Inc. The Amendment to the Quarterly
Report was solely to furnish Exhibit 101 to the Form 10-Q. Exhibit 101 provides
the financial statements and related notes from the Form 10-Q formatted in XBRL
(Extensible Business Reporting Language). No other changes had been made to the
Form 10-Q. The Amendment No. 1 to the Form 10-Q continued to speak as of the
original filing date of the Form 10-Q, and did not reflect events that may have
occurred subsequent to the original filing date, and did not modify or update in
any way disclosures made in the original Form 10-Q.
On November 30, 2011, we filed an Amended Current Report on Form 8-K/A to
amend the Current Report of November 7, 2011 regarding the completion of the
transactions contemplated by a Share Exchange Agreement of September 6, 2011 and
including specific disclosures generally applicable to reverse mergers and shell
companies. Item 5.01 of Form 8-K requires a company to provide specified
information (including financial information which was contained in our Form
10-Q for the quarter ended August 31, 2011) at the time of the initial Current
Report. We did not file all required information at the time of our initial
Current Report or as a part of that Amended Current Report.
STATUS AS A SHELL COMPANY
At the time of closing the Share Exchange Agreement, we were in the
development stage and had nominal operations and limited assets, which makes us
a "shell company" as defined in Rule 12b-2 of the Securities Exchange Act of
1934, as amended ("Exchange Act"). We were not a "blank check company" as
defined by Rule 419 of the Securities Act of 1933, as amended ("Securities
Act").
AMENDMENT TO THE FORM 8-K
This Amendment to the Current Report on Form 8-K filed on September 7, 2011
is to provide disclosures that are required when an issuer, like us, (i) reports
a reverse merger and similar transactions and ceases to be a shell company and
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(ii) to address comments from the staff of the Securities and Exchange
Commission.
This Amendment to the Current Report on Form 8-K filed on September 7, 2011
speaks as of the filing date of said Current Report and does not reflect events
that may have occurred subsequent to the filing of that report, unless
specifically referring to a later date.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Amended Current Report on Form 8-K contains forward-looking
statements. All statements other than statements of historical fact are
"forward-looking statements," including, but not limited to, any perceived
benefits as the result of the Share Exchange Agreements referenced herein, any
projections of earnings, revenue or other financial items; any statements of the
plans, strategies and objections of management for future operations; any
statements concerning proposed new services or developments; any statements
regarding future economic conditions or performance; any statements or belief;
and any statements of assumptions underlying any of the foregoing.
This Amended Current Report includes statements regarding our plans, goals,
strategies, intent, beliefs or current expectations. These statements are
expressed in good faith and based upon a reasonable basis when made, but there
can be no assurance that these expectations will be achieved or accomplished.
These forward-looking statements can be identified by the use of terms and
phrases such as "believe," "plan," "intend," "anticipate," "target," "estimate,"
"expect," and the like, and/or future-tense or conditional constructions
("will," "may," "could," "should," etc.). Items contemplating or making
assumptions about actual or potential future sales, subscriptions, market size,
collaborations, and trends or operating results also constitute such
forward-looking statements.
Although forward-looking statements in this Amended Current Report reflect
the good faith judgment of management, forward-looking statements are inherently
subject to known and unknown risks, business, economic and other risks and
uncertainties that may cause actual results to be materially different from
those discussed in these forward-looking statements. You are urged not to place
undue reliance on these forward-looking statements, which speak only as of the
date of this report. We assume no obligation to update any forward-looking
statements in order to reflect any event or circumstance that may arise after
the date of this report, other than as may be required by applicable law or
regulation. You are urged to carefully review and consider the various
disclosures made by us in our reports filed with the Securities and Exchange
Commission which attempt to advise interested parties of the risks and factors
that may affect our business, financial condition, results of operation and cash
flows. If one or more of these risks or uncertainties materialize, or if the
underlying assumptions prove incorrect, our actual results may vary materially
from those expected or projected.
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On September 6, 2011, Amwest Imaging Incorporated completed the
transactions contemplated by the Share Exchange Agreement of September 6, 2011,
by and amount Amwest Imaging and the shareholders of Instant Website Technology,
Inc. Accordingly, Amwest acquired all of the issued and outstanding shares of
Instant Website Technology, Inc., in exchange for the issuance in the
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aggregate of 6,060,000 shares of our common stock. As a result of the Share
Exchange Agreement, Instant Website Technology, Inc. became our wholly-owned
subsidiary.
Instant Website Technology, Inc.'s primary business is providing
relationship building tools and processes that help any business cultivate
profitable relationships with customers, all through web-based solutions.
These web based solutions were created by us specifically for businesses in
need of a website and related online marketing tools. The primary component of
this web based solution, an on-demand fold out turn-key website for immediate
use.
The websites designed are highly advanced, niche creations that exceed the
needs of small businesses in the target market. All of the websites developed
are custom made from the design to the coding used.
Amwest derives our revenues by charging a basic monthly fee of $49.99 for
anyone wanting to build, develop and maintain a website. Following the website
creation, design, and listing online, the client can utilize additional online
tools to develop a marketing plan for its customer base implementing SMS
technology ("texting") and email marketing to address today's social networking
environment.
It is our goal to provide a high end turnkey solution to any businesses web
presence that both increases the quality of the website as well as vastly reduce
the cost by eliminating the need for a dedicated web designer.
The client can properly train their staff to maintain and grow the website
as needed. Ultimately what we are doing is providing a high quality solution
that will eliminate unknown costs to the small business and empower them to
maintain an online web presence.
ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS
On September 6, 2011, Amwest Imaging Incorporated acquired all of the
issued and outstanding shares of Instant Website Technology, Inc., thereby
making Instant Website Technology, Inc. a wholly-owned subsidiary of Amwest
Imaging Incorporated.
The information required by Item 2.01(f), not otherwise contain herein, is
disclosed in Item 8.01 below.
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ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
FINANCIAL PERFORMANCE HIGHLIGHTS
The following summarizes certain key financial information from inception
to the period ended June 30, 2011:
OVERVIEW
Instant Website Technology, Inc. ("ITWI" or the "Company") was incorporated in
the State of Nevada on January 14, 2010 and commenced business on July 26, 2010.
ITWI's primary business is providing relationship building tools and processes
that help any business cultivate profitable relationships with customers, all
through web based solutions. ITWI provides internet marketing through turnkey
solutions, primarily through its website: MyRestaurantWeb.com.
MyRestaurantWeb.com strives to provide powerful web presence technology to
businesses that rely on customer communication and interactivity with their web
properties.
FINANCIAL PERFORMANCE HIGHLIGHTS
The following summarizes certain key financial information for the inception
period ended June 30, 2011:
* REVENUES: Our revenues were $489,140 for the inception period ended June
30, 2011.
Our primary source of revenue was derived from our offering of website
marketing, on a monthly subscription basis. The Company derives its revenue
by charging a basic monthly fee of $49.99 for anyone wanting to build,
develop and maintain a website. Following the website creation, design, and
listing online, the client can utilize additional online tools to develop a
marketing plan for its customer base implementing SMS technology
("texting") and email marketing which is a must-have in today's social
networking environment. We charge our customers on a monthly service
program. Our program is designed to help our customers marketing efforts
through website technology developed. We do not pre-bill our customers on
annual or other basis, instead we bill on monthly basis, through credit
card or direct payments, for the purpose of limiting our liabilities. We
have considered annual payment programs to help cash flows; however that
policy has not been instituted. We derived $35,940 from these recurring
customers.
During the year we sold our program platform to two unrelated industries,
in the aggregate of $453,200. These sales were to unrelated parties in
unrelated industries. These sales had no modification requirement or post
service contract requirements. These amounts were collected, as the sale
was final. We do not anticipate that this will be a recurring source of
revenue, but may consider similar offers as they are presented.
* OPERATING EXPENSES: We have no information for the purpose of comparison.
Our general and administrative expenses were incurred for our initial
infrastructure and organization, consisting primarily of compensation and
benefits to our general management, finance and administrative staff,
professional advisor fees and other expenses incurred in connection with
general operations. The general and administrative expenses were $122,339
for the inception period ended June 30, 2011. We incurred costs for our
product development in the amount of $288,984. These costs were incurred in
the betterment of our turn-key process, after the initial software
development and after the marketing our product, therefore expensing the
costs incurred. We do anticipate that there will be ongoing development, as
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we add additional offerings and as technology advances. Professional
expenses, in the amount of $70,771 were related to management consultant
and legal, related to our sales contracts and public efforts, including
costs involved with the reverse merger.
* NET LOSS: Net loss was $ 165,890 for the inception period ended June 30,
2011.
LIQUIDITY AND CAPITAL RESOURCES
As reflected in the accompanying financial statements, the Company has incurred
a loss, resulting in an accumulated deficit of $165,890 for the initial period
ended June 30, 2011. The Company has had a net cash used in operating activities
of $18,183. The Company has working capital of $9,839. The Company believes that
the current increasing revenues, the potential for additional sales of platform,
the reduction in future development costs, and temporary financial support from
the majority shareholder are positive factors that remove substantial doubt
about the ability of the Company to continue as a going concern. Management
emphasizes that although it is currently implementing its business plan, the
Company is seeking additional sources of equity or debt financing and there is
no assurance these activities will be successful.
As of June 30, 2011, we had $19,885 cash and cash equivalents. We believe that
the cash available will be sufficient for only one month and is relying on
recurring revenues and financial support to maintain operations. The following
table provides detailed information about our net cash flow for all financial
statement periods presented in this report. To date, we have financed our
operations primarily through cash flows from operations and short-term
borrowings from related party.
CASH FLOW
For Inception
Period Ended
June 30,
2011
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Net cash used in operating activities $(18,183)
Net cash used in investing activities (1,932)
Net cash provided by financing activities (40,000)
Net increase (decrease) in cash and cash equivalents 19,885
Cash and cash equivalents at beginning of the year --
Cash and cash equivalents at end of the year 19,885
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OPERATING ACTIVITIES
Net cash provided by operating activities was $19,885 for the inception period
ended June 30, 2011. The net cash provided by operating activities is primarily
generated from the net income earned during the period. During the year we
benefited from advances from our majority shareholder in the amount of $10,046.
As this amount occurred in the payment of expenses on behalf of the Company, the
amount is considered as an operating activity for cash flow purposes. This
amount is non-interest bearing and has no repayment terms.
FINANCING ACTIVITIES
Net cash provided by financing activities was $40,000 for the inception period
ended June 30, 2011. The net cash provided by financing activities is primarily
due to cash received from the sale of our common stock to unrelated parties.
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OBLIGATIONS UNDER MATERIAL CONTRACTS
We have no obligations to pay cash or deliver cash to any other party.
INFLATION
Inflation and changing prices have not had a material effect on our business and
we do not expect that inflation or changing prices will materially affect our
business in the foreseeable future. However, our management will closely monitor
price changes in our industry and continually maintain effective cost controls
in operations.
OFF BALANCE SHEET ARRANGEMENTS
We do not have any off balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity or
capital expenditures or capital resources that is material to an investor in our
securities.
CRITICAL ACCOUNTING POLICIES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires our management to make
assumptions, estimates and judgments that affect the amounts reported, including
the notes thereto, and related disclosures of commitments and contingencies, if
any. We have identified certain accounting policies that are significant to the
preparation of our financial statements. These accounting policies are important
for an understanding of our financial condition and results of operation.
Critical accounting policies are those that are most important to the portrayal
of our financial conditions and results of operations and require management's
difficult, subjective, or complex judgment, often as a result of the need to
make estimates about the effect of matters that are inherently uncertain and may
change in subsequent periods. Certain accounting estimates are particularly
sensitive because of their significance to financial statements and because of
the possibility that future events affecting the estimate may differ
significantly from management's current judgments. We believe the following
critical accounting policies involve the most significant estimates and
judgments used in the preparation of our financial statements:
* ACCOUNTS RECEIVABLE, CREDIT
The Company currently supplies their web solutions on a monthly basis,
billing on the month of services and collection on customer accounts
through credit cards or direct payments. The Company does not issue credit
on services provided, therefore there are no accounts receivable. No
allowance for doubtful accounts is considered necessary to be established
for amounts that may not be recoverable, since there has been no credit
issued.
* SOFTWARE DEVELOPMENT COSTS AND CAPITAL TECHNOLOGY
The Company accounts for software development costs in accordance with
several accounting pronouncements, including FASB ASC 730, Research and
Development, FASB ASC 350-40, Internal-Use Software, FASB 985-20, Costs of
Computer Software to be Sold, Leased, or Marketed and FASB ASC 350-50,
Website Development Costs. The Company has capitalized the cost of the
technology license purchased from an unrelated third party. At the time of
purchase the technology was available to be marketed. As such additional
costs to customize, modify and betterment to the existing product was
charged to expense as it was incurred
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Capitalized software costs are stated at cost. The estimated useful life of
costs capitalized is evaluated for each specific project and is currently
being amortized over five years. Amortization is computed on a straight
line basis. The carrying amount of all long-lived assets is evaluated
periodically to determine if adjustment to the amortization period or the
unamortized balance is warranted. Based upon its most recent analysis, the
Company believes that no impairment of the proprietary software existed at
June 30, 2011.
* REVENUE RECOGNITION
The Company recognizes revenue on arrangements in accordance with FASB ASC
No. 605, Revenue Recognition. In all cases, revenue is recognized only when
the price is fixed or determinable, persuasive evidence of an arrangement
exists, the service is performed and collectability is reasonably assured.
Consideration for future services are made by customers in advance of those
services being provided. All accounts are currently on a month to month
service, therefore revenue is recognized ratably over the period that the
services are subscribed, the current month. The Company does not offer
annual or other term agreements; therefore there is no unearned portion or
deferral of revenue. Services are billed in advance of the period those
services are provided.
The Company has not issued guarantees or other warrantees on the
advertising subscription success or results. The Company has not
experienced any refund requests or committed to any adjustments for
terminated subscriptions. The Company does not believe that there is any
required liability.
The Company has sold their bundled platform to two customers during the
period ended June 30, 2011. These sales were without recourse. There were
no provisions for licensing terms, modifications, training or other post
service contract arrangements. Since sale was final, revenue was recognized
on delivery.
ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES
Effective as of September 6, 2011, pursuant to the terms of the Share
Exchange Agreement described in Items 1.01, 2.01 and 5.01, we issued 6,060,000
shares of our common stock to the sole shareholder of Instant Website
Technology, Inc., in exchange for all of the issued and outstanding capital
stock of Instant Website Technology, Inc.
The shares of common stock issued under the Share Exchange Agreement were
not registered under the Securities Act, and bear restrictive legends that
reflect this status. The securities were issued in a private placement in
reliance on the exemption from registration provided by Section 4(2) of the
Securities Act. We did not engage in any general solicitation or advertisement
for the issuance of these securities.
In connection with this issuance, Jason Gerteisen represented that the
securities that he was acquiring cannot be resold except pursuant to a effective
registration under the Securities Act or in reliance on an exemption from the
registration requirements of the Securities Act, and that the certificates
representing such securities bear a restrictive legend to that effect and he
intends to acquire the securities for investment only and not with a view to the
resale thereof.
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ITEM 4.01 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
We have had no disagreements with our accountants on accounting and
financial disclosures.
On June 6, 2011, we dismissed Seale and Beers, CPAs, our independent
registered public accounting firm. On the same date, June 6, 2011, the
accounting firm of Peter Messineo, CPA was engaged as our new independent
registered public accounting firm. None of the reports of Seale and Bees, CPAs
on our financial statements for either of the past two years or subsequent
interim period contained an adverse opinion or disclaimer of opinion, or was
qualified or modified as to uncertainty, audit scope or accounting principles,
except that the Registrant's audited financial statements contained in its Form
S-1 from inception period April 7, 2010 to audit dated April 30, 2010 a going
concern qualification in our audited financial statements.
During our two most recent fiscal years and the subsequent interim periods
thereto, there were no disagreements with Seale and Beers, CPAs whether or not
resolved, on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which, if not resolved to
Seale and Beers, CPA's satisfaction, would have caused it to make reference to
the subject matter of the disagreement in connection with its report on the
registrant's financial statements and there were no reportable events as defined
in Item 304(a)(1)(v) of Regulation S-K.
We filed a Current Report on Form 8-K to reflect the change in auditors.
ITEM 5.01 CHANGE IN CONTROL OF REGISTRANT
On August 29, 2011, as part of the transaction contemplated by the Share
Exchange Agreement, we received the resignation of Patrick Moore as the
Company's President, Secretary, and Treasurer. Concurrently on August 29, 2011,
our Board of Directors elected Mr. Jason Gerteisen to fill a vacancy on the
Board of Directors and he was also appointed President, Secretary and Treasurer.
Thereafter, Patrick Moore resigned leaving Jason Gerteisen as the sole director
of Amwest.
We know of no arrangements which may result in a change in control of
Amwest. No officer, director, promoter, or affiliate of Amwest has, or proposes
to have, any direct or indirect material interest in any asset proposed to be
acquired by us through security holdings, contracts, options, or otherwise.
The information required by Item 5.01(a)(8), not otherwise contained
herein, is disclosed in Item 8.01 below.
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ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; APPOINTMENT OF CERTAIN
OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS
GENERALLY
On August 29, 2011, as part of the transaction contemplated by the Share
Exchange Agreement, we received the resignation of Patrick Moore as the
Company's President, Secretary, and Treasurer. Concurrently on August 29, 2011,
our Board of Directors elected Mr. Jason Gerteisen to fill a vacancy on the
Board of Directors and he was also appointed President, Secretary and Treasurer.
Thereafter, Patrick Moore resigned leaving Jason Gerteisen as the sole director
of Amwest.
Our sole officer and director may be deemed a parent and promoter of Amwest
as those terms are defined by the Securities Act.
Our by-laws provide that all directors hold office until the next annual
stockholders' meeting or until their death, resignation, retirement, removal,
disqualification, or until their successors have been elected and qualified. Our
officers serve at the will of the Board of Directors.
There are no agreements or understandings for any officer or director of
the Company to resign at the request of another person and none of the officers
or directors is acting on behalf of or will act at the direction of any other
person.
BACKGROUND INFORMATION
The following is information about our sole officer and director:
Jason Gerteisen Age 28 President and Secretary, Director
Mr. Gerteisen, of Evansville, Indiana, is a successful leader in sales and
management, with a focus on technology and web-based businesses.
As the Campaign Manager for Jim Tomes for Senate in Indiana, he designed
and ran campaign that resulted in a huge win for the republican candidate of a
seat that had been held by democrats for over 15 years. While studying Global
Business Management at the University of Phoenix, he managed many quality and
successful projects as a Project Manager of companies in the construction
industry.
Jason Gerteisen continued to develop his skills in web design and internet
marketing. Utilizing these skills, he helped to create and market several
successful websites.
As the former CEO of his own tech support company, Jason Gerteisen has
guided the way for others in his industry utilizing social marketing tools, web
design, and internet marketing to help create a global network of clients and
business builders.
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COMPENSATION
Jason Gerteisen, our sole director and executive officer currently receives
no compensation for his services as a director. Jason Gerteisen is paid a
monthly salary as our executive officer of $2,500. As of August 29, 2011, we
agreed to pay to Jason Gerteisen, 1,000,000 shares of common stock. These shares
of stock were issued pursuant to Rule 144 and Jason Gerteisen will not able to
sell the shares until (1) we have ceased to be a "shell company; (2) we are
subject to Section 13 or 15(d) of the Exchange Act and have filed all of our
required periodic reports for at least the previous one year period prior to any
sale pursuant to Rule 144; and (3) a period of at least twelve months has
elapsed from the date "Form 10 information" has been filed with the Commission
reflecting the company's status as a non-"shell company." He will be required to
comply with all of the requirements of Rule 144, if applicable, and he will be
subject to the Securities Act and the rules and regulations promulgated
thereunder.
We have not adopted any retirement, pension, profit sharing, stock option
or insurance programs or other similar programs for the benefit of our
directors, officers and/or employees.
ITEM 8.01 OTHER EVENTS
We are providing below the additional information to that reported above
that would have been be included in a Form 10 as if were to file a Form 10.
Please note that the information provided below relates to the current
operations acquired thorough the closing of the Share Exchange Agreement
referred to in Item 1.01 and Item 2.01 above.
DISCRIPTION OF OUR BUSINESS
As a result of the closing of the Share Exchange Agreement referred to in
Item 1.01 and Item 2.01, we are in the process of establishing ourselves as a
web site design, e-commerce and mobile platform development and maintenance
company.
We intend to promote our business utilizing personal contacts by us and by
various search engines and to purchase high result web placements by using our
analytics to develop competitive bids to maximize referrals to the company (pay
for click business model). Once the referral is directed to our company, the
referral will see that our web site design, e-commerece and mobile platform
development is competitively priced. We currently own various templates and
programs developed by Jason Gerteisen that we believe will give us a competitive
edge for the business owner looking for an Internet - web presence.
The information set forth herein is only a summary of our business plans.
RISK FACTORS
Prior to investing in our shares, a prospective investor should consider
carefully the following risks and highly speculative factors that may affect our
business. Any prospective investors should carefully consider, among other
factors, the following:
1. THE SUCCESS OF OUR BUSINESS DEPENDS ON CONTINUED GROWTH OF THE INTERNET AS A
BUSINESS TOOL FOR SMALL AND MEDIUM-SIZED BUSINESSES.
Expansion in the sales of our web services and products will depend on the
continued acceptance of the Internet as a communications and commerce platform
for small and medium-sized businesses. The use of the Internet as a business
tool could be adversely affected by delays in the development or adoption of new
standards and protocols to handle increased demands of Internet activity,
security, reliability, cost, ease-of-use, accessibility, and quality of service.
The performance of the Internet and its acceptance as a business tool have been
harmed in the past by viruses, worms, and similar malicious programs, and the
Internet has experienced a variety of outages and other delays as a result of
damage to portions of its infrastructure. If for any reason the Internet does
not remain a widespread communications medium and commercial platform or
businesses do not continue to become Internet enabled and maintain an online
presence, the demand for our services and products would be significantly
reduced, thereby significantly affecting our sales and the success of our
business.
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2. IF ECONOMIC OR OTHER FACTORS NEGATIVELY AFFECT THE SMALL AND MEDIUM-SIZED
BUSINESS SECTORS, OUR CUSTOMERS MAY BECOME UNWILLING OR UNABLE TO PURCHASE OUR
WEB SERVICES AND PRODUCTS, WHICH MAY CAUSE OUR REVENUE TO DECLINE AND IMPAIR OUR
ABILITY TO OPERATE PROFITABLY.
Our existing and target customers are small and medium-sized businesses.
These businesses are more likely to be significantly affected by economic
downturns than larger, more established businesses. Additionally, these
customers often have limited discretionary funds, which they may choose to spend
on items other than our Web services and products. If small and medium-sized
businesses experience economic hardship, they may be unwilling or unable to
expend resources to develop their Internet presences, which would negatively
affect the overall demand for our services and products and could cause our
revenue to decline.
3. OUR OPERATING RESULTS ARE DIFFICULT TO PREDICT AND FLUCTUATIONS IN OUR
PERFORMANCE MAY RESULT IN VOLATILITY IN THE MARKET PRICE OF OUR COMMON STOCK.
Due to our limited operating history, our evolving business model, and the
unpredictability of our emerging industry, our operating results are difficult
to predict. We expect to experience fluctuations in our operating and financial
results due to a number of factors, such as:
our ability to retain and increase sales to existing customers, attract new
customers, and satisfy our customers' requirements;
the renewal rates for our services;
changes in our pricing policies;
the introduction of new services and products by us or our competitors;
our ability to hire, train and retain members of our sales force;
the rate of expansion and effectiveness of our sales force;
technical difficulties or interruptions in our services;
general economic conditions;
additional investment in our services or operations; and
our success in maintaining and adding strategic marketing relationships.
4. WE FACE INTENSE AND GROWING COMPETITION. IF WE ARE UNABLE TO COMPETE
SUCCESSFULLY, OUR BUSINESS WILL BE SERIOUSLY HARMED.
The market for our web services and products is competitive and has
relatively low barriers to entry. Our competitors vary in size and in the
variety of services they offer. We encounter competition from a wide variety of
company types, including:
web site design and development service and software companies;
Internet service providers and application service providers;
Internet search engine providers;
Local business directory providers; and
web site domain name providers and hosting companies.
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In addition, due to relatively low barriers to entry in our industry, we
expect the intensity of competition to increase in the future from other
established and emerging companies. Increased competition may result in price
reductions, reduced gross margins, and loss of market share, any one of which
could seriously harm our business. We also expect that competition will increase
as a result of industry consolidations and formations of alliances among
industry participants.
Moreover, many of our current competitors have longer operating histories,
significantly greater financial, technical, marketing and other resources, and
greater brand recognition and, we believe, a larger installed base of customers.
These competitors may be able to adapt more quickly to new or emerging
technologies and changes in customer requirements. They may be able to devote
greater resources to the promotion and sale of their services and products than
we can. If we fail to compete successfully against current or future
competitors, our revenue could increase less than anticipated, or even decline,
and our business could be significantly harmed.
5. OUR FAILURE TO ESTABLISH BRAND AWARENESS TO EITHER AMWEST OR INSTANT WEBSITE
TECHNOLOGY, INC., WITHIN A SHORT PERIOD OF TIME COULD COMPROMISE OUR ABILITY TO
COMPETE AND TO GROW OUR BUSINESS.
As a result of the anticipated increase in competition in our market, and
the likelihood that some of this competition will come from companies with
established brands, we believe brand name recognition and reputation will become
increasingly important. Our planned strategy which includes relying
significantly on third-party strategic marketing relationships to find new
customers may impede our ability to build brand awareness, as our customers may
mistakenly believe our web services and products will be those of the parties
with which we have strategic marketing relationships. If we do not continue to
build brand awareness, we could be placed at a competitive disadvantage to
companies whose brands are more recognizable than ours.
6. IF WE CANNOT ADAPT TO TECHNOLOGICAL ADVANCES OUR SERVICES AND PRODUCTS MAY
BECOME OBSOLETE AND OUR ABILITY TO COMPETE WOULD BE IMPAIRED.
Changes in our industry occur very rapidly, including changes in the way
the Internet operates or is used by small and medium-sized businesses and their
customers. As a result, our web services and products could become obsolete
within a short time period. The introduction of competing products employing new
technologies and the evolution of new industry standards could render our
existing products or services obsolete and unmarketable. To be successful, our
web services and products must keep pace with technological developments and
evolving industry standards, address the ever-changing and increasingly
sophisticated needs of our customers, and achieve market acceptance. If we are
unable to develop new web services or products, or enhancements to our web
services or products, on a timely and cost-effective basis, or if new web
services or products or enhancements do not achieve market acceptance, our
business would be seriously harmed.
13
7. PROVIDING WEB SERVICES AND PRODUCTS TO SMALL AND MEDIUM-SIZED BUSINESSES
DESIGNED TO ALLOW THEM TO INTERNET-ENABLE THEIR BUSINESSES IS A NEW AND EMERGING
MARKET; IF THIS MARKET FAILS TO DEVELOP, WE WILL NOT BE ABLE TO GROW OUR
BUSINESS.
Our success depends on a significant number of small and medium-sized
business outsourcing web site design, hosting, and management as well as
adopting other online business solutions. The market for our web services and
products is relatively new and untested. Custom web site development has been
the predominant method of Internet enablement, and small and medium-sized
businesses may be slow to adopt our template-based web services and products.
Further, if small or medium-sized businesses determine that having an Internet
presence is not giving their businesses an advantage, they would be less likely
to purchase our web services and products. If the market for our web services
and products fails to grow or grows more slowly than we currently anticipate, or
if our web services and products fail to achieve widespread customer acceptance,
our business would be seriously harmed.
8. WE MAY NEED ADDITIONAL FINANCING TO SUPPORT OUR BUSINESS GROWTH, IF WE DO NOT
OBTAIN THIS FINANCING, OUR GROWTH MAY BE impaired.
We intend to continue to make investments to support our business growth
and may require additional funds to respond to business challenges, including
the need to develop new services and products or enhance our existing web
services, enhance our operating infrastructure and acquire complementary
businesses and technologies.
In order to expand our business operations, we anticipate that we may have
to raise additional funding. If we are not able to raise the capital necessary
to fund our business expansion objectives, we may have to delay the
implementation of our business plan. We do not currently have any arrangements
for other financing.
9. IF WE ARE UNABLE TO OBTAIN KEY PERSONAL OR RETAIN JASON GERTEISEN, THIS MAY
COMPROMISE OUR ABILITY TO SUCCESSFULLY MANAGE OUR BUSINESS AND PURSUE OUR GROWTH
STRATEGY.
We depend on the services of our sole director and officer, Jason
Gerteisen, for the future success of our business. The loss of his services
could have an adverse effect on our business, financial condition and results of
operations. We do not carry any key personnel life insurance policies on Jason
Gerteisen and we do not have a contract for his services.
10. OUR SOLE OFFICER AND DIRECTOR OWNS CONTROLLING INTEREST IN OUR OUTSTANDING
SHARES OF STOCK AND THEREFORE HAS CONTROL OVER ALL OF OUR CORPORATE DECISIONS.
HE MAY MAKE BUSINESS DECISIONS THAT ARE DISADVANTAGEOUS TO OUR MINORITY
SHAREHOLDERS.
14
Jason Gerteisen has a controlling interest in our shares of common stock.
Accordingly, he will have significant influence in determining the outcome of
all corporate transactions or other matters, including the election of
directors, mergers, consolidations and the sale of all or substantially all of
our assets, as well as the power to prevent or cause a change in control. The
interests of Jason Gerteisen may differ from the interests of the other
investors and may result in corporate decisions that are disadvantageous to
other shareholders.
11. GOVERNMENT REGULATION INVOLVING THE TRANSMISSION OF INFORMATION OVER THE
INTERNET IS EVOLVING AND WE MAY FACE LIABILITY IN CONNECTION WITH THE
INFORMATION THAT WE USE OR TRANSMIT USING OUR SERVICES AND PRODUCTS.
The legal framework that applies to the Internet is continually evolving.
Laws relating to the Internet have been, and likely will continue to be, enacted
that address issues of privacy, security, pricing, taxation, quality and
substance of services and products, and other issues. Because our web services
and products allow customers to transmit information over the Internet on their
own web sites, and because we develop many of these web sites, we may be found
to be liable for any improper information that our customers transmit. We may
face liability for defamation, negligence, copyright, patent or trademark
infringement, and other claims based on the nature and content of the materials
being transmitted by our web services. Although we retain discretion to cancel
the web services being provided to customers if we learn such content is being
transmitted, there can be no guarantee that our customers will refrain from such
transmission or that we will not be deemed responsible for the content being
transmitted or hosted using our web services or products. Government regulations
also could affect the cost of communicating on the Internet and could negatively
affect the demand for our web services and products, and our business could
thereby be harmed.
12. WE WERE A "SHELL COMPANY" AND WE WERE REQUIRED TO PROVIDE CERTAIN
INFORMATION TO THE PUBLIC PURSUANT TO THE EXCHANGE ACT. WE ARE RESPONSIBLE FOR
THE ADEQUACY AND ACCURACY OF ALL OF OUR DISCLOSURES. THE FILING OF THIS
AMENDMENT TO THE CURRENT REPORT DOES NOT FORECLOSE THE SECURITIES AND EXCHANGE
COMMISSION FROM TAKING ANY ACTION WITH RESPECT TO OUR FILINGS.
The Securities and Exchange Commission adopted Rule 405 of the Securities
Act and Rule 12b-2 of the Exchange Act which defines a shell company as a
registrant that has no or nominal operations, and either (a) no or nominal
assets; (b) assets consisting solely of cash and cash equivalents; or (c) assets
consisting of any amount of cash and cash equivalents and nominal other assets.
At the time that we acquired Instant Website Technology, Inc., we were a shell
company. The rules prohibit shell companies from using a Form S-8 to register
securities pursuant to employee compensation plans. However, the rules do not
prevent us from registering securities pursuant to registration statements.
Additionally, the rule regarding Form 8-K requires shell companies to provide
more detailed disclosure upon completion of a transaction that causes it to
cease being a shell company. We must file a Current Report on Form 8-K
containing the information required pursuant to Regulation S-K and in a
registration statement on Form 10, within four business days following
completion of certain transactions. We are no longer a shell and we did not
timely file the Current Report. This Amendment to the Current Report on Form 8-K
filed on September 7, 2011 is intended to supply the required information. We
have been advised that the Division of Enforcement has access to all information
we have provided to the staff of the Division of Corporation Finance in
connection with our filings with the Securities and Exchange Commission.
15
The Securities and Exchange Commission adopted a new Rule 144 effective
February 15, 2008, which makes resales of restricted securities by shareholders
of a shell company more difficult. See discussion in Risk Factors titled
Shareholders who hold unregistered shares of our common stock are subject to
resale restrictions pursuant to Rule 144, due to our status as a "shell
company."
14. SHAREHOLDERS WHO HOLD UNREGISTERED SHARES OF OUR COMMON STOCK ARE SUBJECT TO
RESALE RESTRICTIONS PURSUANT TO RULE 144, DUE TO OUR PRIOR STATUS AS A "SHELL
COMPANY."
Pursuant to Rule 144 of the Securities Act, we were a "shell company." As
such, sales of our unregistered securities pursuant to Rule 144 are not able to
be made until (1) we have ceased to be a "shell company; (2) we are subject to
Section 13 or 15(d) of the Exchange Act and have filed all of our required
periodic reports for at least the previous one year period prior to any sale
pursuant to Rule 144; and a period of at least twelve months has elapsed from
the date "Form 10 information" has been filed with the Commission reflecting the
company's status as a non-"shell company." Because none of our non-registered
securities can be sold pursuant to Rule 144, until at least one year after we
cease to be a "shell company," any non-registered securities we sell in the
future or issue to consultants or employees, in consideration for services
rendered or for any other purpose will have no liquidity until and unless such
securities are registered with the SEC and/or until a year after we cease to be
a "shell company" and have complied with the other requirements of Rule 144, as
described above. As a result, it may be harder for us to fund our operations and
pay our consultants with our securities instead of cash. Furthermore, it will be
harder for us to raise funding through the sale of debt or equity securities
unless we agree to register such securities with the Securities and Exchange
Commission, which could cause us to expend additional resources in the future.
15. AMWEST'S AUDITOR HAS EXPRESSED DOUBTS AS TO OUR ABILITY TO CONTINUE AS A
GOING CONCERN.
In the opinion of our auditor as reflected in our last audited financial
statements, since we have not generated revenue from operations, it raises
substantial doubt about Amwest's ability to continue as a going concern. There
is no assurance that our auditor will not continue to express doubts on our
ability to continue as a going concern even after the closing of our acquisition
of Instant Website Technology, Inc.
16. JASON GERTEISEN HAS NO EXPERIENCE RELATED TO PUBLIC COMPANY MANAGEMENT. AS A
RESULT, WE MAY BE UNABLE TO MANAGE OUR PUBLIC REPORTING REQUIREMENTS.
Our operations depend entirely on the efforts of our sole officer and
director. While he has expertise with which we will rely upon to grow and manage
our business operations, he has no experience related to public company
management or as a principal accounting officer. Because of this, we may be
unable to develop and manage our public reporting requirements. There is no
assurance that we will overcome these obstacles.
16
17. YOU WILL NOT RECEIVE DIVIDEND INCOME FROM AN INVESTMENT IN THE SHARES AND AS
A RESULT, THE PURCHASE OF THE SHARES SHOULD ONLY BE MADE BY AN INVESTOR WHO DOES
NOT EXPECT A DIVIDEND RETURN ON THE INVESTMENT.
We have never declared or paid a cash dividend on our shares nor will we in
the foreseeable future. We currently intend to retain future earnings, if any,
to finance the operation and expansion of our business. Accordingly, investors
who anticipate the need for immediate income from their investments by way of
cash dividends should refrain from purchasing any of our securities. As we do
not intend to declare dividends in the future, you may never see a return on
your investment and you indeed may lose your entire investment.
18. OUR SHARES OF COMMON STOCK ARE DEEMED TO BE "PENNY STOCKS" WITH A POTENTIAL
LIMITED TRADING MARKET.
Our shares of common stock will, in all likelihood, be subject to the
"penny stock rules" adopted pursuant to Section 15(g) of the Exchange Act. The
penny stock rules apply to non-NASDAQ companies whose common stock trades at
less than $5.00 per share or companies which have tangible net worth of less
than $5,000,000 ($2,000,000 if the company has been operating for three or more
years). Such rules require, among other things, that brokers who trade "penny
stock" to persons other than" established customers" complete certain
documentation, make suitability inquiries of investors and provide investors
with certain information concerning trading in the security, including a risk
disclosure document and quote and other information under certain circumstances.
Many brokers have decided not to trade "penny stock" because of the requirements
of the penny stock rules and, as result, the number of broker-dealers willing to
act as market makers in such securities is limited. In the event that we remain
subject to the "penny stock rules" for any significant period, there may develop
an adverse impact on the market, if any, for our securities. Because our
securities are subject to the "penny stock rules," investors will find it more
difficult to dispose of our securities. Further, for companies whose securities
are traded in the "Pink Sheets" and/or in the Over-the-Counter Bulletin Board
System, it is more difficult: (i) to obtain accurate quotations, (ii) to obtain
coverage for significant news events because major wire services, such as the
Dow Jones News Service, generally do not publish press releases about such
companies, and (iii) to obtain needed capital.
19. FUTURE SALES OF RESTRICTED SHARES COULD DECREASE THE PRICE A WILLING BUYER
WOULD PAY FOR SHARES OF OUR COMMON STOCK, COULD CAUSE OUR PRICE TO DECLINE AND
COULD IMPAIR OUR ABILITY TO RAISE CAPITAL.
Future sales of common stock by Jason Gerteisen or other unregistered
shares of stock under exemptions from registration or through a subsequent
registered offering could materially adversely affect the market price of our
common stock and could materially impair our future ability to raise capital
through an offering of equity securities. We are unable to predict the effect,
if any, that market sales of these shares, or the availability of these shares
for future sale, will have on the prevailing market price of our common stock at
any given time.
17
20. WE WILL INCUR PROFESSIONAL FEES IN CONNECTION WITH BEING A REPORTING COMPANY
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
Amwest is subject to the reporting requirements of the Exchange Act and as
such, we are required to file Form 10-Ks, Form 10-Qs and Form 8-Ks and other
reports with the SEC. We will incur professional fees (i.e., attorney, auditors
and filing agents) in connection with the preparation and filing of such reports
and we currently anticipate such costs to range from $30,000 to $50,000 per
year. If we are unable to file such reports, we will be delinquent in our
filings which could adversely affect the marketability of our shares of common
interest.
21. THE FAILURE TO COMPLY WITH THE INTERNAL CONTROL EVALUATION AND CERTIFICATION
REQUIREMENTS OF SECTION 404 OF SARBANES-OXLEY ACT COULD HARM OUR OPERATIONS AND
OUR ABILITY TO COMPLY WITH OUR PERIODIC REPORTING OBLIGATIONS.
As a reporting company under the Exchange Act, we are required to comply
with the internal control evaluation and certification requirements of Section
404 of the Sarbanes-Oxley Act of 2002. We are in the process of further
determining whether our existing internal controls over financial reporting
systems are compliant with Section 404. This process may divert internal
resources and may take a significant amount of time, effort and expense to
complete. If it is determined that we are not in compliance with Section 404, we
may be required to implement new internal control procedures and reevaluate our
financial reporting. We may experience higher than anticipated operating
expenses as well as outside auditor fees during the implementation of these
changes and thereafter. Further, we may need to hire qualified personnel or
consultants in order for us to be compliant with Section 404. If we are unable
to implement these changes effectively or efficiently, it could harm our
operations, financial reporting or financial results and could result in our
being unable to obtain an unqualified report on internal controls from our
independent auditors, which could adversely affect our ability to comply with
our periodic reporting obligations under the Exchange Act.
SALES AND MARKETING STRATEGY
GENERALLY
Our objective is to become a leading provider of web design services for
small to medium-sized businesses. Key elements of our strategy include:
Continuing to Target the Small and Medium-Sized Business Market Segment. We
believe the small and medium-sized business market offers us the best
opportunity to continue building a leading national web services company. We
believe this is an attractive market because it is large and because these
businesses need a comprehensive, affordable solution to their web design
services requirements. Our web design services meet critical business needs of
these businesses that they often do not have the time, resources, or technical
skills to fulfill themselves.
Developing or Acquiring Complementary Services and Technologies. We market
and sell web services that are essential to an effective Internet presence such
as local and regional lead generation, search engine optimization, web site
search tools, affiliate marketing networks, and web analytics. While we intend
to
18
provide many of these services through our relationships with other vendors or
contractors, we will seek opportunities to internally develop some or all of
these services and products.
Expanding our Distribution Channels. To sell our web services and products
cost efficiently, we plan to establish strategic marketing relationships with
organizations that have strong brand recognition with small and medium-sized
businesses. We also plan to undertake marketing and sales activities so that a
larger proportion of our customers are acquired through increased direct sales
and new reseller programs.
Selling Additional Services and Products to Existing Customers. As
customers build their Internet presence, we believe that we can demonstrate the
value of the additional premium services and products we offer, which can
increase our average revenue per customer and improve our revenue growth. For
example, we can provide paid search and e- commerce capabilities to our current
customers' web sites, enabling additional sources of revenue for them while also
contributing to a measurable return on their investment.
Strengthening Customer Retention. We are dedicated to enhancing customer
retention and building lasting relationships with our customers. We believe it
is critical to customer retention to target small and medium-sized businesses
that already understand the value of the Internet to their success. Improving
customer retention also requires maximizing customer loyalty. Therefore, we are
focused on customer satisfaction, consistent communication, web service and
product enhancements, and high quality customer service. Additionally, we
believe that by educating our existing and prospective customers about the value
of our services to their businesses we can build lasting customer relationships.
SHARE OF MARKET
The web design services market is an extremely competitive and
price-sensitive sector and it is difficult to determine our expected market
share in this market. However, due to the vast size of this market in Canada and
the United States, our market share will likely be less than one percent.
COMPLIANCE WITH GOVERNMENT REGULATION
We do not believe that any current government regulations will have a
material impact on the way we conduct our business.
RESEARCH AND DEVELOPMENT EXPENDITURES
We have not incurred any other research or development expenditures since
our incorporation.
EMPLOYEES
As of September 7, 2011 and November 30, 2011, we had seven (7) independent
contractors selling our services on a commission basis. In addition, we had one
(1) part time administrative person who also assists in sales, who is paid a
monthly salary of $1,000. As our business develops, we expect to develop a
compensation program for all of our personnel, subject to the approval by our
Board of Directors. We further expect that the specific direction, emphasis and
components of an executive compensation program will evolve. Factors that may
affect our compensation policies include the hiring of full-time employees,
converting our independent contractors to employees, our future revenue growth
and profitability and the increasing complexity of our business operations.
19
UNRESOLVED STAFF COMMENTS
As of the filing of the Amendment to the Current Report on Form 8-K on
November 30, 2011, we had no unresolved staff comments from the Securities and
Exchange Commission.
[As of December 6, 2011, the staff of the Securities and Exchange
Commission had made a preliminary review of our previously filed Current Reports
on Form 8-K of September 7, 2011 and November 30, 2011 and indicated to us that
there may be a potential lack of compliance with the applicable reporting
requirements for a Form 8-K if we concluded that we were a shell company. We
have concluded that we were a shell company at the time of the reverse merger as
defined in the Exchange Act. The staff of the Securities and Exchange Commission
also inquired as to how we intended to account for the acquisition of Instant
Website Technology, Inc. in future filings. We have been informed by our current
auditor that the Instant Website Technology, Inc. acquisition will be accounted
for as a reverse acquisition with us being the surviving entity. For accounting
purposes, Instant Website Technology, Inc. will be treated as the accounting
acquirer and, accordingly, will be presented as the continuing entity. Instant
Website Technology, Inc. had commenced business in April 2010. There has been no
continuation of the prior business operation of Amwest.]
PROPERTIES
Our offices are located at 815 John Street, Suite 210K, Evansville,
Indiana. We have a Lease Agreement which expires on September 30, 2012 for
approximately 140 square feet at a monthly rental of $260. We are responsible,
with others, for common area maintenance. We believe that the space is adequate
for our current operations and additional space is available, if required, at
approximately the same cost and expense.
LEGAL PROCEEDINGS
We are not currently a party to, nor is any of our property currently the
subject of, any material legal proceeding. None of the Company's directors,
officers or affiliates is involved in a proceeding adverse to our business or
has a material interest adverse to our business.
In the ordinary course of business, we may be from time to time involved in
various pending or threatened legal actions. The litigation process is
inherently uncertain and it is possible that the resolution of such matters
could have a material adverse effect upon our financial condition and/or results
of operations.
20
ITEM 9.01 FINANCIAL SATEMENTS AND EXHIBITS
INSTANT WEBSITE TECHNOLOGY, INC.
Financial Statements
For the Years Ended June 30, 2011 and 2010
Page
----
Financial Statements:
Report of Independent Registered Public Accounting Firm 22
Balance Sheet 23
Statement of Operations 24
Statement of Changes in Stockholders' Equity 25
Statement of Cash Flows 26
Notes to Audited Financial Statements 27
21
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CERTIFIED PUBLIC ACCOUNTANT
1982 OTTER WAY PALM HARBOR FL 34685
PETER@PM-CPA.COM
T 727.421.6268 F 727.674.0511
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders:
Instant Website Technology, Inc.
Bradenton, Florida
I have audited the balance sheets of Instant Website Technology, Inc. as of June
30, 2011 and 2010 and the related statement of operations, changes in
stockholder's equity, and cash flows for the year ended June 30, 2011 and the
period January 14, 2010 (date of inception) through June 30, 2010. These
financial statements are the responsibility of the Company's management. My
responsibility was to express an opinion on these financial statements based on
my audits.
I conducted my audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that I plan
and perform the audits to obtain reasonable assurance about whether the
financial statements were free of material misstatement. The Company was not
required to have, nor was I engaged to perform, an audit of its internal control
over financial reporting. My audit included consideration of internal control
over financial reporting as a basis for designing audit procedures that were
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, I express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. I believe that my audit provide a reasonable basis for
my opinion.
In my opinion, the financial statements, referred to above, present fairly, in
all material respects, the financial position of Instant Website Technology,
Inc. as of June 30, 2011 and 2010, and the results of its operations and its
cash flows for the year ended June 30, 2011 and for the period January 14, 2010
(date of inception) through June 30, 2011, in conformity with accounting
principles generally accepted in the United States of America.
/s/ Peter Messineo, CPA
---------------------------------
Peter Messineo, CPA
Palm Harbor, Florida
November 16, 2011
|
22
Instant Website Technology, Inc.
Balance Sheets
June 30, June 30,
2011 2010
---------- ----------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 19,885 $ --
---------- ----------
TOTAL CURRENT ASSETS 19,885 --
---------- ----------
Property and equipment, net of accumulated
depreciation of $161 and $0, respectively 1,771 --
Intangible assets, net of accumulated
Amortization of $137,500 and $0, respectively 612,500 --
---------- ----------
TOTAL ASSETS $ 634,156 $ --
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ -- $ --
Loans from shareholder 10,046 --
---------- ----------
TOTAL CURRENT LIABILITIES 10,046 --
---------- ----------
TOTAL LIABILITIES 10,046 --
---------- ----------
STOCKHOLDERS' EQUITY
Common stock: 10,000,000 authorized; $0.001 par
value 21,060,043 and 0 shares issued and
outstanding, respectively 21,060 --
Additional paid in capital 768,940 --
Accumulated deficit (165,890) --
---------- ----------
TOTAL STOCKHOLDERS' EQUITY 624,110 --
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 634,156 $ --
========== ==========
|
See auditor's report and notes to the audited financial statements
23
Instant Website Technology, Inc.
Statements of Operation
For the Period
January 14, 2010
For the Year (date of inception)
Ended through
June 30, June 30,
2011 2010
------------ ------------
REVENUES $ 489,140 $ --
------------ ------------
OPERATING EXPENSES
Marketing and sales
Compensation 35,275 --
Professional 70,771 --
General and administrative 122,339 --
Research and development 288,984 --
Depreciation and amortization 137,661 --
------------ ------------
TOTAL OPERATING EXPENSES 655,030 --
------------ ------------
NET LOSS $ (165,890) $ --
============ ============
Basic and diluted loss per share $ (0.01) $ --
============ ============
Weighted average number of
shares outstanding 16,481,224 --
============ ============
|
See auditor's report and notes to the audited financial statements
24
Instant Website Technology, Inc.
Statement of Stockholders' Equity
Common Stock Additional
----------------------- Paid in Accumulated
Shares Amount Capital Deficit Total
------ ------ ------- ------- -----
Balance as of January 14, 2010 -- $ -- $ -- $ -- $ --
----------- ----------- ----------- ----------- -----------
Common shares issued:
July 26, 2011, to founders
for cash 18,000,000 18,000 7,000 25,000
August 1, 2010in exchange
for technology, at $.25
per share 3,000,000 3,000 747,000 750,000
October 8, 2011, for cash,
at $.25 per share 40,000 40 9,960 10,000
October 8, 2011, for cash,
at $.25 per share 20,043 20 4,980 5,000
Net loss (165,890) (165,890)
----------- ----------- ----------- ----------- -----------
Balance, June 30, 2011 21,060,043 $ 21,060 $ 768,940 $ (165,890) $ 624,110
=========== =========== =========== =========== ===========
|
See auditor's report and notes to the audited financial statements
25
Instant Website Technology, Inc.
Statements of Cash Flows
For the Period
January 14, 2010
For the Year (date of inception)
Ended through
June 30, June 30,
2011 2010
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) $ (165,890) $ --
Adjustment to reconcile Net Income to net
cash provided by operations:
Depreciation and amortization 137,661 --
Changes in assets and liabilities:
Accounts payable and accrued expenses -- --
Advances by shareholder 10,046 --
---------- ----------
NET CASH USED IN OPERATING ACTIVITIES (18,183) --
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment (1,932) --
---------- ----------
NET CASH USED IN INVESTING ACTIVITIES (1,932) --
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock for cash 40,000 --
---------- ----------
NET CASH PROVIDED BY FINANCING ACTIVATES 40,000 --
---------- ----------
Net increase (decrease) in cash and cash equivalents 19,885 --
Cash and cash equivalents, beginning of period -- --
---------- ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 19,885 $ --
========== ==========
Supplemental Cash Flow Information:
Cash paid for interest $ -- $ --
========== ==========
Cash paid for taxes $ -- $ --
========== ==========
Non-cash transactions:
Issuance of shares for intangible assets $ 750,000 $ --
========== ==========
|
See auditor's report and notes to the audited financial statements
26
INSTANT WEBSITE TECHNOLOGY, INC.
Notes to the Financial Statements
For the Years Ended June 30, 2011
1. NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS
Instant Website Technology, Inc. ("ITWI" or the "Company") was incorporated in
the State of Nevada on January 14, 2010 and commenced business on July 26, 2010.
ITWI's primary business is providing relationship building tools and processes
that help any business cultivate profitable relationships with customers, all
through web based solutions. ITWI provides internet marketing through turnkey
solutions, primarily through its website: MyRestaurantWeb.com.
MyRestaurantWeb.com strives to provide powerful web presence technology to
businesses that rely on customer communication and interactivity with their web
properties.
BASIS OF PRESENTATION
The Financial Statements and related disclosures have been prepared pursuant to
the rules and regulations of the Securities and Exchange Commission ("SEC"). The
Financial Statements have been prepared using the accrual basis of accounting in
accordance with Generally Accepted Accounting Principles ("GAAP") of the United
States. In the opinion of management, these financial statements include all
adjustments necessary in order to make them not misleading.
USE OF ESTIMATES
The Financial Statements have been prepared in conformity with U.S. GAAP, which
requires using management's best estimates and judgments where appropriate.
These estimates and judgments affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements. The estimates and judgments will also affect the
reported amounts for certain revenues and expenses during the reporting period.
Actual results could differ materially from these good faith estimates and
judgments.
FINANCIAL INSTRUMENTS
The Company's balance sheet includes certain financial instruments. The carrying
amounts of current assets and current liabilities approximate their fair value
because of the relatively short period of time between the origination of these
instruments and their expected realization.
Financial Accounting Standards Board (FASB) Accounting Standards Codification
(ASC) 820 "Fair Value Measurements and Disclosures" (ASC 820) defines fair value
as 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 on the
measurement date.. ASC 820 also establishes a fair value hierarchy that
distinguishes between (1) market participant assumptions developed based on
market data obtained from independent sources (observable inputs) and (2) an
entity's own assumptions about market participant assumptions developed based on
the best information available in the circumstances (unobservable inputs). The
fair value hierarchy consists of three broad levels, which gives the highest
priority to unadjusted quoted prices in active markets for identical assets or
liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).
The three levels of the fair value hierarchy are described below:
27
* Level 1 - Unadjusted quoted prices in active markets that are accessible at
the measurement date for identical, unrestricted assets or liabilities
* Level 2 - Inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly or indirectly,
including quoted prices for similar assets or liabilities in active
markets; quoted prices for identical or similar assets or liabilities in
markets that are not active; inputs other than quoted prices that are
observable for the asset or liability (e.g., interest rates); and inputs
that are derived principally from or corroborated by observable market data
by correlation or other means.
* Level 3 - Inputs that are both significant to the fair value measurement
and unobservable.
Fair value estimates discussed herein are based upon certain market assumptions
and pertinent information available to management as of June 30, 2011. The
respective carrying value of certain on-balance-sheet financial instruments
approximated their fair values due to the short-term nature of these
instruments.
The Company applied ASC 820 for all non-financial assets and liabilities
measured at fair value on a non-recurring basis. The adoption of ASC 820 for
non-financial assets and liabilities did not have a significant impact on the
Company's financial statements.
As of June 30, 2011 the fair values of the Company's financial instruments
approximate their historical carrying amount.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents includes all cash deposits and highly liquid financial
instruments with a maturity of three months or less.
ACCOUNTS RECEIVABLE, CREDIT
The Company currently supplies their web solutions on a monthly basis, billing
on the month of services and collection on customer accounts through credit
cards or direct payments. The Company does not issue credit on services
provided, therefore there are no accounts receivable. No allowance for doubtful
accounts is considered necessary to be established for amounts that may not be
recoverable, since there has been no credit issued.
SOFTWARE DEVELOPMENT COSTS AND CAPITAL TECHNOLOGY
The Company accounts for software development costs in accordance with several
accounting pronouncements, including FASB ASC 730, Research and Development,
FASB ASC 350-40, Internal-Use Software, FASB 985-20, Costs of Computer Software
to be Sold, Leased, or Marketed and FASB ASC 350-50, Website Development Costs.
The Company has capitalized the cost of the technology license purchased from an
unrelated third party. At the time of purchase the technology was available to
be marketed. As such additional costs to customize, modify and betterment to the
existing product was charged to expense as it was incurred
Capitalized software costs are stated at cost. The estimated useful life of
costs capitalized is evaluated for each specific project and is currently being
amortized over five years. Amortization is computed on a straight line basis.
The carrying amount of all long-lived assets is evaluated periodically to
determine if adjustment to the amortization period or the unamortized balance is
28
warranted. Based upon its most recent analysis, the Company believes that no
impairment of the proprietary software existed at June 30, 2011.
LONG-LIVED ASSETS AND INTANGIBLE PROPERTY:
Long-lived assets such as property, equipment and identifiable intangibles are
reviewed for impairment whenever facts and circumstances indicate that the
carrying value may not be recoverable. When required impairment losses on assets
to be held and used are recognized based on the fair value of the asset. The
fair value is determined based on estimates of future cash flows, market value
of similar assets, if available, or independent appraisals, if required. If the
carrying amount of the long-lived asset is not recoverable from its undiscounted
cash flows, an impairment loss is recognized for the difference between the
carrying amount and fair value of the asset. When fair values are not available,
the Company estimates fair value using the expected future cash flows discounted
at a rate commensurate with the risk associated with the recovery of the assets.
The Company did not recognize any impairment losses for any periods presented.
SHARE-BASED PAYMENTS
Share-based payments to employees, including grants of employee stock options
are recognized as compensation expense in the financial statements based on
their fair values, in accordance with FASB ASC Topic 718. That expense is
recognized over the period during which an employee is required to provide
services in exchange for the award, known as the requisite service period
(usually the vesting period). The Company had no common stock options or common
stock equivalents granted or outstanding for all periods presented. The company
may issue shares as compensation in the future periods for employee services.
The Company may issue restricted stock to consultants for various services. Cost
for these transactions will be measured at the fair value of the consideration
received or the fair value of the equity instruments issued, whichever is more
reliably measurable. The value of the common stock is to be measured at the
earlier of (i) the date at which a firm commitment for performance by the
counterparty to earn the equity instruments is reached or (ii) the date at which
the counterparty's performance is complete. The company has issue shares as
compensation in the future period for services associated with the registration
of the common shares.
REVENUE RECOGNITION
The Company recognizes revenue on arrangements in accordance with FASB ASC No.
605, Revenue Recognition. In all cases, revenue is recognized only when the
price is fixed or determinable, persuasive evidence of an arrangement exists,
the service is performed and collectability is reasonably assured.
Consideration for future services are made by customers in advance of those
services being provided. All accounts are currently on a month to month service,
therefore revenue is recognized ratably over the period that the services are
subscribed, the current month. The Company does not offer annual or other term
agreements; therefore there is no unearned portion or deferral of revenue.
Services are billed in advance of the period those services are provided.
The Company has not issued guarantees or other warrantees on the advertising
subscription success or results. The Company has not experienced any refund
requests or committed to any adjustments for terminated subscriptions. The
Company does not believe that there is any required liability.
29
The Company has sold their bundled platform to two customers during the period
ended June 30, 2011. These sales were without recourse. There were no provisions
for licensing terms, modifications, training or other post service contract
arrangements. Since sale was final, revenue was recognized on delivery.
ADVERTISING
The costs of advertising are expensed as incurred. Advertising expense was $0
for the year ended June 30, 2011. Advertising expenses, when incurred are to be
included in the Company's operating expenses.
RESEARCH AND DEVELOPMENT
The Company expenses research and development costs when incurred. Research and
development costs include engineering and testing of product and outputs.
Indirect costs related to research and developments are allocated based on
percentage usage to the research and development. Research and development costs
were $288,984 for the year ending June 30, 2011.
INCOME TAXES
The Company accounts for income taxes under the Financial Accounting Standards
Board ("FASB") Accounting Standards Codification ("ASC") No. 740, Income Taxes
("ASC 740"). Under ASC 740, deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settled. Under
ASC 740, the effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the enactment date.
EARNINGS (LOSS) PER SHARE
Basic earnings (loss) per share calculations are determined by dividing net
income (loss) by the weighted average number of shares outstanding during the
year. Diluted earnings (loss) per share calculations are determined by dividing
net income (loss) by the weighted average number of shares. The Company does not
have any potentially dilutive instruments and, thus, anti-dilution issues are
not applicable.
2. RECENT ACCOUNTING PRONOUNCEMENTS
In May 2011, the FASB issued ASU No. 2011-04, "Fair Value Measurement (Topic
820): Amendments to Achieve Common Fair Value Measurement and Disclosure
Requirements in U.S. GAAP and IFRSs", which is intended to improve comparability
of fair value measurements presented and disclosed in financial statements
prepared in accordance with U.S. generally accepted accounting principles and
International Financial Reporting Standards. This standard clarifies the
application of existing fair value measurement requirements including (1) the
application of the highest and best use valuation premise, (2) the methodology
to measure the fair value of an instrument classified in a reporting entity's
shareholders' equity, (3) disclosure requirements for quantitative information
on Level 3 fair value measurements and (4) guidance on measuring the fair value
of financial instruments managed within a portfolio. In addition, the standard
30
requires additional disclosures of the sensitivity of fair value to changes in
unobservable inputs for Level 3 securities. This standard is effective for
interim and annual reporting periods ending on or after December 15, 2011. The
adoption of this guidance is not expected to have a significant impact on the
Company's financial statements.
In June 2011, the FASB issued ASU No. 2011-05, "Presentation of Comprehensive
Income", which requires that comprehensive income be presented either in a
single continuous statement of comprehensive income or in two separate but
consecutive statements. The standard also requires entities to disclose on the
face of the financial statements reclassification adjustments for items that are
reclassified from other comprehensive income to net earnings. This standard no
longer allows companies to present components of other comprehensive income only
in the statement of equity. This standard is effective for interim and annual
reporting periods beginning after December 15, 2011. The adoption of this
guidance is not expected to have a significant impact on the Company's financial
statements other than the prescribed change in presentation.
Except for rules and interpretive releases of the SEC under authority of federal
securities laws and a limited number of grandfathered standards, the FASB
Accounting Standards Codification(TM) ("ASC") is the sole source of
authoritative GAAP literature recognized by the FASB and applicable to the
Company. Management has reviewed the aforementioned rules and releases and
believes any effect will not have a material impact on the Company's present or
future financial statements.
3. CAPITALIZED ASSETS
PROPERTY AND EQUIPMENT consists of the following, as of June 30:
2011 2010
-------- --------
Computer equipment $ 1,932 $ --
Less accumulated depreciation 161 --
-------- --------
$ 1,771 $ --
======== ========
|
Depreciation expense was $161 and $0 for the year ended June 30, 2011 and for
the period January 14, 2010 (date of inception) through June 30, 2010,
respectively.
INTANGIBLE ASSETS
The Company has capitalized the cost of acquiring their technology for internal
and external use. The purchase price was valued at the agreed upon price with
the unrelated party. Acquired software costs consist of the following, as of
June 30:
June 30, December 31,
2011 2009
-------- --------
Software: Asset Central $750,000 $ --
Less accumulated amortization 137,500 --
-------- --------
$612,500 $ --
======== ========
31
|
Future amortization:
2012 $150,000
2013 150,000
2014 150,000
2015 150,000
2016 and thereafter 12,500
--------
$612,500
========
|
Amortization expense was $137,500 and $0 for the year ended June 30, 2011 and
for the period January 14, 2010 (date of inception) through June 30, 2010,
respectively.
4. INCOME TAXES
The Company utilizes the liability method of accounting for income taxes. Under
the liability method deferred tax assets and liabilities are determined based on
the differences between financial reporting basis and the tax basis of the
assets and liabilities and are measured using enacted tax rates and laws that
will be in effect, when the differences are expected to reverse. An allowance
against deferred tax assets is recognized, when it is more likely than not, that
such tax benefits will not be realized.
The Company has not recognized an income tax benefit for its operating losses
generated from operations, based on uncertainties concerning its ability to
generate taxable income in future periods. The tax benefit for the periods
presented is offset by a valuation allowance established against deferred tax
assets arising from operating losses and other temporary differences, the
realization of which could not be considered more likely than not. In future
periods, tax benefits and related deferred tax assets will be recognized when
management considers realization of such amounts to be more likely than not.
Deferred tax assets resulted from the net operating losses generated by the
Company. The Company provides for income taxes, for the periods ended June 30,
is as follows:
2011 2010
-------- --------
CURRENT PROVISION
Income tax provision (benefit) at
statutory rate $(56,400) $ --
State income tax expense (benefit),
net of federal benefit (6,100) --
-------- --------
subtotal (62,500) --
Valuation allowance 62,500 --
-------- --------
$ -- $ --
======== ========
|
Under the Internal Revenue Code of 1986, as amended, these losses can be carried
forward twenty years. As of June 30, 2011 the Company has no net operating loss
carry forwards, as the Company commenced operations during the year ended June
30, 2011.
The Company is currently open to audit under the statute of limitations by the
Internal Revenue Service for the short year ending June 30, 2010 (year of
32
inception). The Company recognizes interest and penalties related to income
taxes in income tax expense. The Company had incurred no penalties and interest
for the years ended June 30, 2011.
5. RELATED PARTY TRANSACTIONS
LOANS FROM SHAREHOLDER
In support of the Company's efforts and cash requirements, it is relying on
advances from related parties until such time that the Company can support its
operations or attains adequate financing through sales of its equity or
traditional debt financing. Amounts represent advances or amounts paid in
satisfaction of certain liabilities as they come due. The advances are
considered temporary in nature and have not been formalized by a promissory
note. Notes are considered payable on demand and is non-interest bearing. The
Company owed $10,046 and $0 to its majority shareholder as of June 30, 2011 and
2010, respectively. No interest has been accrued or imputed on these debts, as
management believes that interest expense would be immaterial.
The majority shareholder has pledged his support to fund continuing operations;
however there is no written commitment to this effect. The Company is dependent
upon the continued support of this member.
The Company does not have employment contracts with its key employees, including
the majority shareholder who is the Chief Executive and Chief Technical Officer.
The amounts and terms of the above transactions may not necessarily be
indicative of the amounts and terms that would have been incurred had comparable
transactions been entered into with independent third parties.
6. EQUITY
The total number of shares of capital stock which the Company shall have
authority to issue is one hundred million (100,000,000) common shares with a par
value of $.01, of which 48,400,000 have been issued to founders. The Company
intends to issue additional shares in an effort to raise capital to fund its
operations. Common shareholders will have one vote for each share held.
No holder of shares of stock of any class is entitled as a matter of right to
subscribe for or purchase or receive any part of any new or additional issue of
shares of stock of any class, or of securities convertible into shares of stock
of any class, whether now hereafter authorized or whether issued for money, for
consideration other than money, or by way of dividend.
The Company is currently engaged in the registration of its equity, for the
purpose of raising cash through the issuance of common shares. Subsequent to the
year-end an additional 2 million shares were issued to investors for cash. The
Company through its proposed equity raise anticipates issuing an additional 2
million shares.
33
There are no preferred shares authorized or outstanding. There have been no
warrants or options issued or outstanding.
7. COMMITMENTS
The Company utilizes space provided by the majority shareholder without charge.
Rent was $0 for all periods presented.
8. CONTINGENCIES
Some of the officers and directors of the Company are involved in other business
activities and may, in the future, become involved in other business
opportunities that become available. They may face a conflict in selecting
between the Company and other business interests. The Company has not formulated
a policy for the resolution of such conflicts.
From time to time the Company may become a party to litigation matters involving
claims against the Company. Management believes that there are no current
matters that would have a material effect on the Company's financial position or
results of operations.
9. SUBSEQUENT EVENTS
Management has evaluated subsequent events and is not aware of any significant
events that occurred subsequent to the balance sheet date but prior to the
issuance of this report on November 16, 2011 that should be disclosed.
34
FINANCIAL STATEMENTS
AMWEST IMAGING INCORPORATED
Table of Contents
PAGE
----
BALANCE SHEETS 36
STATEMENTS OF OPERATIONS 37
STATEMENS OF STOCKHOLDERS' EQUITY 38
STATEMENTS OF CASH FLOWS 39
NOTES TO THE UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS 40
|
35
AMWEST IMAGING INCORPORATED
(Previously a Development Stage Company)
Condensed Balance Sheets
November 30, February 28,
2011 2011
---------- ----------
(unaudited) (audited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 44,461 $ 20,067
---------- ----------
TOTAL CURRENT ASSETS 44,461 20,067
---------- ----------
Property and equipment, net of accumulated
depreciation of $276 and $0, respectively 1,656 --
Intangible assets, net of accumulated
amortization of $200,000 and $0, respectively 550,000 --
---------- ----------
TOTAL ASSETS $ 596,117 $ 20,067
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ -- $ 297
Loans from shareholder 93,143 --
---------- ----------
TOTAL CURRENT LIABILITIES 93,143 297
---------- ----------
STOCKHOLDERS' EQUITY
Preferred stock: 5,000,000 authorized; $0.001 par value
0 shares issued and outstanding -- --
Common stock: 595,000,000 authorized; $0.001 par value
495,560,000 and 338,000,000 shares issued and outstanding* 495,560 338,000
Additional paid in capital 260,335 (289,000)
Accumulated deficit (252,921) (29,230)
---------- ----------
TOTAL STOCKHOLDERS' EQUITY 502,974 19,770
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 596,117 $ 20,067
========== ==========
|
* retroactively restated for 26:1 forward stock split effective November 7,
2011.
The accompanying notes are an integral part of the interim
condenses financial statements.
36
AMWEST IMAGING INCORPORATED
(Previously a Development Stage Company)
Unaudited Condensed Statements of Operation
For the Three and Nine Month Period Ended November 30, 2011 and 2010
For the Three Months Ended For the Nine Months Ended
November 30, November 30,
-------------------------------- --------------------------------
2011 2010 2011 2010
------------ ------------ ------------ ------------
REVENUES $ 55,213 $ --. $ 560,066 $ --
------------ ------------ ------------ ------------
OPERATING EXPENSES
Marketingandsales -- -- 6,650 --
Compensation 4,000 -- 35,275 --
Professionalandconsulting 64,030 -- 108,753 --
Generalandadministrative 46,182 2,150 98,513 2,989
Researchanddevelopment 14,535 -- 363,520 --
Depreciationandamortization 37,569 -- 200,276 --
------------ ------------ ------------ ------------
TOTAL OPERATING EXPENSES 166,316 2,150 812,987 2,989
------------ ------------ ------------ ------------
NET LOSS $ (111,103) $ (2,150) $ (252,921) $ (2,989)
============ ============ ============ ============
Basic and diluted loss per share $ (0.00) $ (0.00) $ (0.00) $ (0.00)
============ ============ ============ ============
Weighted average number of
Shares Outstanding* 483,440,000 234,000,000 386,127,418 234,000,000
============ ============ ============ ============
|
* retroactively restated for 26:1 forward stock split effective November 7,
2011.
The accompanying notes are an integral part of the interim
condenses financial statements.
37
AMWEST IMAGING INCORPORATED
(Previously a Development Stage Company)
Unaudited Condensed Statement of Stockholder's Equity
From inception (April 7, 2010) to November 30, 2011
Common Stock* Additional
------------------------ Paid in Accumulated
Shares Amount Capital Deficit Total
------ ------ ------- ------- -----
BALANCE AS OF APRIL 07, 2010 -- $ -- $ -- $ -- $ --
------------ --------- --------- --------- --------
Common shares issued:
Cash, April 9, 2010, $.001 per share 234,000,000 234,000 (225,000) 9,000
Cash, December 28, 2010, $.01 per share 104,000,000 104,000 (64,000) 40,000
Net loss (29,230) (29,230)
------------ --------- --------- --------- --------
BALANCE AS OF FEBRUARY 28, 2011 338,000,000 338,000 (289,000) (29,230) 19,770
Common shares issued for acquired
assets in reverse merger,
September 7, 2011 157,560,000 157,560 549,335 29,230 736,125
Net loss (unaudited) (252,921) (252,921)
------------ --------- --------- --------- --------
BALANCE, NOVEMBER 30, 2011 495,560,000 $ 495,560 $ 260,335 $(252,921) $502,974
============ ========= ========= ========= ========
|
* retroactively restated for 26:1 forward stock split effective November 7,
2011.
The accompanying notes are an integral part of the interim
condenses financial statements.
38
AMWEST IMAGING INCORPORATED
(Previously a Development Stage Company)
Unaudited Condensed Statements of Cash Flows
For the Nine Month Period Ended November 30, 2011 and 2010
November 30,
-------------------------------
2011 2011
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (252,921) $ (2,989)
Adjustment to reconcile Net Income to net
cash provided by operations:
Depreciation and amortization 200,276 --
Changes in assets and liabilities:
Accounts receivable -- --
Accounts payable and accrued expenses (297) 2,184
---------- ----------
NET CASH USED IN OPERATING ACTIVITIES (52,942) (805)
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquistion of property and equipment (1,932) --
Development of software -- --
---------- ----------
NET CASH USED IN INVESTING ACTIVITIES (1,932) --
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments for security deposits -- --
Advances from related parties 79,268 --
Issuance of common stock -- --
---------- ----------
NET CASH PROVIDED BY FINANCING ACTIVATES 79,268 --
---------- ----------
Net increase (decrease) in cash and cash equivalents 24,394 (805)
Cash and cash equivalents, beginning of period 20,067 2,076
---------- ----------
Cash and cash equivalents, end of period $ 44,461 $ 1,271
========== ==========
Supplemental Cash Flow Information
Cash paid for interest $ -- $ --
========== ==========
Cash paid for taxes $ -- $ --
========== ==========
Non-cash transactions:
Net assets acquired through reverse merger $ 750,000 $ --
========== ==========
|
The accompanying notes are an integral part of the interim
condenses financial statements.
39
AMWEST IMAGING INC.
(Previously a Development Stage Company)
NOTES TO THE UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS
November 30, 2011
NOTE 1. BUSINESS DESCRIPTION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF BUSINESS AND ORGANIZATION
Amwest Imaging Incorporated (the "Company"), was incorporated in the State of
Nevada on April 7, 2010.
The Company's original principal business objective was to provide document
digitization services to businesses. On September 6, 2011, registrant completed
the transactions of the Share Exchange Agreement of September 6, 2011, between
Amwest Imaging Incorporated, a Nevada corporation, and the shareholders of
Instant Website Technology, Inc. ("IWTI"). Accordingly, registrant acquired all
of the issued and outstanding shares of Instant Website Technology, Inc., in
exchange for the issuance in the aggregate of 6,060,000 shares of common stock
of the registrant. As a result of the Share Exchange Agreement, Instant Website
Technology Inc., Inc. became a wholly-owned subsidiary of registrant.
Instant Website Technology, Inc.'s primary business is providing relationship
building tools and processes that help any business cultivate profitable
relationships with customers, all through web-based solutions. These web based
solutions were created by the Company specifically for businesses in need of a
website and related online marketing tools. The primary component of this web
based solution, an on-demand fold out turn-key website for immediate use. The
websites designed are highly advanced, niche creations that exceed the needs of
small businesses in the target market. All of the websites developed are custom
made from the design to the coding used.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
The accompanying interim condensed 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 November 30, 2011,
and for all periods presented herein, have been made.
All subsidiaries of the Company have been consolidated into these statements
with intercompany transactions being eliminated.
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 February 28,
2011 audited financial statements. The results of operations for the periods
ended November 30, 2011 are not necessarily indicative of the operating results
for the full years.
USE OF ESTIMATES
The Financial Statements have been prepared in conformity with U.S. GAAP, which
requires using management's best estimates and judgments where appropriate.
These estimates and judgments affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements. The estimates and judgments will also affect the
reported amounts for certain revenues and expenses during the reporting period.
Actual results could differ materially from these good faith estimates and
judgments.
FINANCIAL INSTRUMENTS
The Company's balance sheet includes certain financial instruments. The carrying
amounts of current assets and current liabilities approximate their fair value
because of the relatively short period of time between the origination of these
instruments and their expected realization.
Financial Accounting Standards Board (FASB) Accounting Standards Codification
(ASC) 820 "Fair Value Measurements and Disclosures" (ASC 820) defines fair value
as the exchange price that would be received for an asset or paid to transfer a
40
liability (an exit price) in the principal or most advantageous market for the
asset or liability in an orderly transaction between market participants on the
measurement date.. ASC 820 also establishes a fair value hierarchy that
distinguishes between (1) market participant assumptions developed based on
market data obtained from independent sources (observable inputs) and (2) an
entity's own assumptions about market participant assumptions developed based on
the best information available in the circumstances (unobservable inputs). The
fair value hierarchy consists of three broad levels, which gives the highest
priority to unadjusted quoted prices in active markets for identical assets or
liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).
The three levels of the fair value hierarchy are described below:
* Level 1 - Unadjusted quoted prices in active markets that are
accessible at the measurement date for identical, unrestricted assets
or liabilities
* Level 2 - Inputs other than quoted prices included within Level 1 that
are observable for the asset or liability, either directly or
indirectly, including quoted prices for similar assets or liabilities
in active markets; quoted prices for identical or similar assets or
liabilities in markets that are not active; inputs other than quoted
prices that are observable for the asset or liability (e.g., interest
rates); and inputs that are derived principally from or corroborated
by observable market data by correlation or other means.
* Level 3 - Inputs that are both significant to the fair value
measurement and unobservable.
Fair value estimates discussed herein are based upon certain market assumptions
and pertinent information available to management as of November 30, 2011. The
respective carrying value of certain on-balance-sheet financial instruments
approximated their fair values due to the short-term nature of these
instruments.
As of November 30, 2011 the fair values of the Company's financial instruments
approximate their historical carrying amount.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents includes all cash deposits and highly liquid financial
instruments with a maturity of three months or less.
ACCOUNTS RECEIVABLE, CREDIT
The Company currently supplies their web solutions on a monthly basis, billing
on the month of services and collection on customer accounts through credit
cards or direct payments. The Company does not issue credit on services
provided, therefore there are no accounts receivable. No allowance for doubtful
accounts is considered necessary to be established for amounts that may not be
recoverable, since there has been no credit issued.
SOFTWARE DEVELOPMENT COSTS AND CAPITAL TECHNOLOGY
The Company accounts for software development costs in accordance with several
accounting pronouncements, including FASB ASC 730, Research and Development,
FASB ASC 350-40, Internal-Use Software, FASB 985-20, Costs of Computer Software
to be Sold, Leased, or Marketed and FASB ASC 350-50, Website Development Costs.
The Company has capitalized the cost of the technology license purchased from an
unrelated third party. At the time of purchase the technology was available to
be marketed. As such additional costs to customize, modify and betterment to the
existing product was charged to expense as it was incurred
Capitalized software costs are stated at cost. The estimated useful life of
costs capitalized is evaluated for each specific project and is currently being
amortized over five years. Amortization is computed on a straight line basis.
The carrying amount of all long-lived assets is evaluated periodically to
determine if adjustment to the amortization period or the unamortized balance is
warranted. Based upon its most recent analysis, the Company believes that no
impairment of the proprietary software existed at November 30, 2011.
LONG-LIVED ASSETS AND INTANGIBLE PROPERTY:
Long-lived assets such as property, equipment and identifiable intangibles are
reviewed for impairment whenever facts and circumstances indicate that the
carrying value may not be recoverable. When required impairment losses on assets
to be held and used are recognized based on the fair value of the asset. The
fair value is determined based on estimates of future cash flows, market value
41
of similar assets, if available, or independent appraisals, if required. If the
carrying amount of the long-lived asset is not recoverable from its undiscounted
cash flows, an impairment loss is recognized for the difference between the
carrying amount and fair value of the asset. When fair values are not available,
the Company estimates fair value using the expected future cash flows discounted
at a rate commensurate with the risk associated with the recovery of the assets.
The Company did not recognize any impairment losses for any periods presented.
SHARE-BASED PAYMENTS
Share-based payments to employees, including grants of employee stock options
are recognized as compensation expense in the financial statements based on
their fair values, in accordance with FASB ASC Topic 718. That expense is
recognized over the period during which an employee is required to provide
services in exchange for the award, known as the requisite service period
(usually the vesting period). The Company had no common stock options or common
stock equivalents granted or outstanding for all periods presented. The company
may issue shares as compensation in the future periods for employee services.
The Company may issue restricted stock to consultants for various services. Cost
for these transactions will be measured at the fair value of the consideration
received or the fair value of the equity instruments issued, whichever is more
reliably measurable. The value of the common stock is to be measured at the
earlier of (i) the date at which a firm commitment for performance by the
counterparty to earn the equity instruments is reached or (ii) the date at which
the counterparty's performance is complete. The company has issue shares as
compensation in the future period for services associated with the registration
of the common shares.
REVENUE RECOGNITION
The Company recognizes revenue on arrangements in accordance with FASB ASC No.
605, Revenue Recognition. In all cases, revenue is recognized only when the
price is fixed or determinable, persuasive evidence of an arrangement exists,
the service is performed and collectability is reasonably assured.
Consideration for future services are made by customers in advance of those
services being provided. All accounts are currently on a month to month service;
therefore revenue is recognized ratably over the period that the services are
subscribed, the current month. The Company does not offer annual or other term
agreements; therefore there is no unearned portion or deferral of revenue.
Services are billed in advance of the period those services are provided.
The Company has not issued guarantees or other warrantees on the advertising
subscription success or results. The Company has not experienced any refund
requests or committed to any adjustments for terminated subscriptions. The
Company does not believe that there is any required liability.
The Company has sold their bundled platform to two customers during the period
ended November 30, 2011. These sales were without recourse. There were no
provisions for licensing terms, modifications, training or other post service
contract arrangements. Since sale was final, revenue was recognized on delivery.
ADVERTISING
The costs of advertising are expensed as incurred. Advertising expense was $0
for the nine months ended November 30, 2011 and 2010. Advertising expenses, when
incurred are to be included in the Company's operating expenses.
RESEARCH AND DEVELOPMENT
The Company expenses research and development costs when incurred. Research and
development costs include engineering and testing of product and outputs.
Indirect costs related to research and developments are allocated based on
percentage usage to the research and development. Research and development costs
were $14,535, $0, $363,520 and $0 for the three and nine months ending November
30, 2011.
INCOME TAXES
The Company accounts for income taxes under the Financial Accounting Standards
Board ("FASB") Accounting Standards Codification ("ASC") No. 740, Income Taxes
("ASC 740"). Under ASC 740, deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in
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which those temporary differences are expected to be recovered or settled. Under
ASC 740, the effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the enactment date.
EARNINGS (LOSS) PER SHARE
Basic earnings (loss) per share calculations are determined by dividing net
income (loss) by the weighted average number of shares outstanding during the
year. Diluted earnings (loss) per share calculations are determined by dividing
net income (loss) by the weighted average number of shares. The Company does not
have any potentially dilutive instruments and, thus, anti-dilution issues are
not applicable.
NOTE 2. 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. 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.
As of November 30, 2011, the Company has an Accumulated Deficit.
NOTE 3. RECENT ACCOUNTING PRONOUNCEMENTS
Except for rules and interpretive releases of the SEC under authority of federal
securities laws and a limited number of grandfathered standards, the FASB
Accounting Standards Codification(TM) ("ASC") is the sole source of
authoritative GAAP literature recognized by the FASB and applicable to the
Company. Management has reviewed the aforementioned rules and releases and
believes any effect will not have a material impact on the Company's present or
future consolidated financial statements.
NOTE 4. INCOME TAXES
The Company accounts for income taxes under FASB Codification Topic 740 which
requires use of the liability method. Topic 740 provides that deferred tax
assets and liabilities are recorded based on the differences between the tax
bases of assets and liabilities and their carrying amounts for financial
reporting purpose, referred to as temporary differences. Deferred tax assets and
liabilities at the end of each period are determined using the currently enacted
tax rates applied to taxable income in the periods in which the deferred tax
assets and liabilities are expected to be settled or realized.
A valuation allowance has been applied against the net deferred tax assets and
any provision for tax benefit, due to the uncertainty of its ultimate
realization.
NOTE 5. EQUITY TRANSACTIONS
On October 18, 2011, the Board of Directors of the Registrant adopted a
resolution effective as of the same date to a forward stock split of the
Company's issued and outstanding shares of common stock on a one (1) old for
twenty-six (26) new basis, such that its authorized capital has increased from
75,000,000 shares of common stock with a par value of $0.001 to 600,000,000
shares of common stock with a par value of $0.001 and, correspondingly, its
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issued and outstanding shares of common stock have increased from 19,060,000
shares of common stock to 495,560,000 shares of common stock. Each shareholder's
percentage ownership in the Company (and relative voting power) will remain
essentially unchanged as a result of the forward split. The resolution provides
that fractional shares will be rounded up. The Effective Date of the Forward
Split was November 7, 2011. Prior year share information has been retroactively
restated for comparative purposes.
SUBSEQUENT EVENTS
On December 12, 2011, the Board of Directors (the "Board") of Amwest Imaging
Incorporated, a Nevada Corporation (the "Company") received the resignation of
Mr. Jason Gerteisen as the Company's Treasurer.
Effective December 12, 2011, the Board of Directors (the "Board") of the
Company, elected Mr. Pat Kadlec as the new Treasurer and Director of the
company. Mr. Kadlec will be issued 100,000 common shares of the Company as
initial compensation.
PRE APPROVAL OF SERVICES BY THE INDEPENDENT AUDITOR
We have established policies and procedures for the approval and
pre-approval of audit services and permitted non-audit services. The Board of
Directors has the responsibility to engage and terminate our independent
registered public accountants, to pre-approve their performance of audit
services and permitted non-audit services and to review with our independent
registered public accountants their fees and plans for all auditing services.
All services provided by and fees paid to Seale and Beers to June 6, 2011
were pre-approved by the Board of Directors. All services to be provided by
Peter Messineo are or will be pre-approved.
AUDIT COMMITTEE
Our board of directors has not established a formal audit committee. In
addition, we do not have any other compensation or executive or similar
committees. We will not, in all likelihood, establish an audit committee until
such time as the Company generates a positive cash flow of which there can be no
assurance. We recognize that an audit committee, when established, will play a
critical role in our financial reporting system by overseeing and monitoring
management's and the independent auditors' participation in the financial
reporting process. At such time as we establish an audit committee, its
additional disclosures with our auditors and management may promote investor
confidence in the integrity of the financial reporting process.
Until such time as an audit committee has been established, the full board
of directors will undertake those tasks normally associated with an audit
committee to include, but not by way of limitation, the (i) review and
discussion of the audited financial statements with management, and (ii)
discussions with the independent auditors the matters required to be discussed
by the Statement On Auditing Standards No. 61 and No. 90, as may be modified or
supplemented.
CODE OF ETHICS
We have not adopted a code of ethics that applies to our principal
executive officer, principal financial officer, principal accounting officer and
persons performing similar functions.
ITEM 9.01 FINANCIAL STATEMENT AND EXHIBITS.
There are no reports on Form 8-K incorporated herein by reference.
We are a reporting company pursuant to the requirements of the Exchange Act
and we file quarterly, annual and other reports with the Securities and Exchange
Commission. The reports and other information filed by us will be available for
inspection and copying at the public reference facilities of the Securities and
Exchange Commission, 100 F. Street, N.E., Washington, D.C. 20549.
44
Copies of such material may be obtained by mail from the Public Reference
Section of the Securities and Exchange Commission at 100 F. Street, N.E.,
Washington, D.C. 20549, at prescribed rates. Information on the operation of the
Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. In
addition, the Securities and Exchange Commission maintains a World Wide Web site
on the Internet at http://www.sec.gov that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Securities and Exchange Commission.
The following exhibit is filed as part of this Amended Current Report.
2.1 Share Exchange Agreement of September 6, 2011, by and amount Amwest
Imaging and the shareholders of Instant Website Technology, Inc.
45
SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Amwest Imaging Incorporated
Dated: January 27, 2012 By: /s/ Jason Gerteisen
------------------------------
Jason Gerteisen, President
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