UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-K
(Mark
One)
[X] |
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the fiscal year ended December 31, 2014
or
[ ] |
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission
File Number 000-18656
RAPID
FIRE MARKETING, INC.
(Exact
Name of Registrant as Specified in Its Charter)
Nevada
|
|
26-0214836 |
(State
or other jurisdiction of |
|
(I.R.S.
Employer |
incorporation
or organization) |
|
Identification
No.) |
311
West Third Street, Suite 1234
Carson
City, NV 89703
Telephone:
(775) 461-5127
(Address
and telephone number of Registrant’s principal executive offices)
Nevada
Business Center, LLC
311
West Third Street
Carson
City, NV 89703
Telephone:
(775) 461-5127
(Name,
address, and telephone number of agent for service)
Copies
of communications to:
Gregg
E. Jaclin, Esq.
Szaferman,
Lakind, Blumstein & Blader, P.C.
101
Grovers Mill Road
Lawrenceville,
New Jersey 08648
Tel.
No.: (609) 275-0400
Fax
No.: (609) 275-4511
Securities
registered under Section 12(g) of the Exchange Act:
Common
Stock, Par Value $0.001 Per Share
(Title
of Class)
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ]
No [X]
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes [X] No
[ ]
Indicate
by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [ ]
Indicate
by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K (§ 229.405) is not contained herein,
and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated
by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See definitions of a “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check One)
[ ]
Large Accelerated Filer |
[ ]
Accelerated Filer |
|
|
[ ]
Non-accelerated Filer (do not check if smaller reporting company) |
[X]
Smaller Reporting Company |
Indicate
by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No
[X]
The
aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at
which the common equity was last sold on the OTC Bulletin Board on June 30, 2014, was $6,641,624.
Indicate
by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the
Exchange Act subsequent to the distribution of securities under a plan confirmed by a court. Yes [X] No [ ]
As
of March 25, 2015, the Company had 6,556,071,515 shares of its common stock, $0.001 par value per share, outstanding.
DOCUMENTS
INCORPORATED BY REFERENCE
None.
RAPID
FIRE MARKETING, INC.
ANNUAL
REPORT ON FORM 10-K
FOR
THE YEARS ENDED DECEMBER 31, 2014 and 2013
TABLE
OF CONTENTS
PART
I
ITEM
1. BUSINESS
Overview
Rapid
Fire Marketing, Inc. (“Rapid Fire,” “RFMK” or the “Company”) was incorporated under the laws
of the state of Delaware in 1989 as G.D.E. Search Corporation. In 1990, the Company changed its name to Ponder Industries, Inc.
In 2001, the Company changed its name to N-Vision Technology. On May 30, 2007, the Company merged with and into Rapid Fire Marketing,
Inc., a Nevada Corporation (the “Merger”). As a result of the Merger, the Company became a Nevada corporation and
changed its name to Rapid Fire Marketing, Inc. The Company’s current business plan is to sell vaporizers which includes
a new dry herb vaporizer which will be available in early to mid 2015.
Principal
Products and Services
The
CANNAcig and Cumulus Vapor Inhalers
On
November 29, 2011, we began development of a new product for the medical cannabis business. This product would be, in effect,
an electronic cigarette that instead of vaporizing nicotine would vaporize THC (Tetrahydrocannabinol). A trademark for this product
was filed in January of 2012 but on our trademark attorney’s advice, the trademark application was not pursued because the
USPTO would deny the trademark. The Company began development of the CANNAcig Vapor Inhaler in April 2012, and currently obtains
the product through outsourced manufacturers who have been selected and retained by the Company.
The
CANNAcig and Cumulus Vapor Inhalers are for smokers and medical marijuana users around the world. The device uses vaporizer technology
which makes the unit discreet, and we believe it may be a healthier alternative to actual smoking.
The
CANNAcig and Cumulus Vapor Inhalers are smokeless. A user is able to consume vapor without all of the harmful effects of actual
smoke. It is also nearly odor free, and can be used in public places. The consumer will no longer need to find a quiet and private
place to “smoke.”
The
CANNAcig and Cumulus Vapor Inhalers allow the user to “draw” as much “smoke” as desired without the unit
heating up and getting too hot, nor under normal circumstances will it leak or create a mess for the user. The biggest benefit
of the CANNAcig/Cumulus vaporizer is the ability for the user to get the effect of smoking medical marijuana without the health
and social risks involved with smoking. It closely simulates smoking and still delivers potent results, can be used in non-smoking
areas, and overall costs significantly less compared to any type of traditional smoking activity. THC oils and other viscous liquids
are typically available at medical marijuana collectives and are less expensive to use than obtaining rolling papers and dried
cannabis. Unlike conventional cigarettes, vaporizers only contain nicotine or other active
ingredient, as opposed to the hundreds of other harmful chemicals found in actual smoking.
Vapor
inhalers consist of three components: a battery, an atomizer and a loadable cartridge. The battery transfers energy to the atomizer.
The atomizer heats the air drawn into the electronic device to a high enough temperature that it vaporizes the active agent in
the replaceable cartridge. The vapor is then inhaled into the mouth and lungs fully simulating the smoking experience and delivering
the essential components. The simulated “smoke” is just water vapor that evaporates in a few seconds which leaves
no lingering odor.
The
products are priced competitively with the industry. The only consumable items which will require replacement are the batteries
and cartridges. The batteries are rechargeable but will need to be replaced after normal use in 3-6 months’ time. The cartridges
that are pre-loaded for medical marijuana patients will need to be replaced by the user.
Pocket
Puffer Dry Herbal Vaporizer
In
February of 2013, in response to CANNAcig and Cumulus user feedback, the Company began development of the Pocket Puffer Dry Herbal
Vaporizer. This unit has been in development and testing throughout 2013and 2014 and is expected to reach the market by early
to mid 2015.
The
rationale for development of a unique, feature-rich dry herbal vaporizer was twofold; dry herbs and dried blends are less expensive
and easier to obtain than oils and waxes, and the lack of availability of quality dry herbal vaporizers. The Pocket Puffer is
a superior, feature-rich unit and will be priced competitively.
The
unique features of the Pocket Puffer Dry Herbal vaporizers are the large proprietary battery which provides the user with long
battery life without the need to charge the unit frequently, two chambers for dried herbs or dried blends and three heat settings
for use depending on the vaporization temperature of the specific dried herb or blend in use.
Bionic
Cigs
In
January 2010, Rapid Fire Marketing created the Bionic Cigs electronic cigarette division. The Company was looking to take advantage
of the growing popularity of electronic cigarettes as a smoking cessation device. An electronic cigarette is defined as follows:
An
electronic cigarette (or e-cigarette), personal vaporizer (PV), or electronic nicotine delivery system (ENDS) is an electronic
inhaler meant to simulate and substitute for tobacco smoking. It generally utilizes a heating element that vaporizes a liquid
solution. Some release nicotine, while some merely release-flavored vapor. They are often designed to mimic traditional smoking
implements, such as cigarettes or cigars, in their use and/or appearance.
The
benefits and risks of electronic cigarette use are currently uncertain, but they are likely safer than smoking tobacco. Laws vary
widely concerning their use and sale, and are the subject of pending legislation and ongoing debate.
The
Bionic Cigs division and website was closed in early 2014.
Distribution
Methods of our Products
Since
September 2012, online sales have been conducted through an independent contractor who owns the domain “theCANNAcig.com”.
New
Products
Late
in 2012 and into early 2013, many users of the CANNAcig expressed interest on “theCANNAcig.com” in a “dry”
vaporizer. A “dry vaporizer” is a special unit which will vaporize plant material rather than oil. Considering that
plant material is accessible much easier less expensive than oil, Rapid Fire Marketing decided to work with HexCorp to develop
a dry vaporizer unit.
Pocket
Puffer Dry Herbal Vaporizer
In
February of 2013, in response to CANNAcig and Cumulus user feedback, the Company began development of the Pocket Puffer Dry Herbal
Vaporizer. This unit has been in development and testing throughout 2013 and 2014 and is expected to reach the market by early
to mid 2015.
The
rationale for development of a unique, feature rich dry herbal vaporizer was twofold; dry herbs and dried blends are less expensive
and easier to obtain than oils and waxes and the lack of availability of quality dry herbal vaporizers. The Pocket Puffer is a
superior, feature rich unit and will be priced competitively.
The
unique features of the Pocket Puffer Dry Herbal vaporizers are the large proprietary battery which provides the user with long
battery life without the need to charge the unit frequently, two chambers for dried herbs or dried blends and three heat settings
for use depending on the vaporization temperature of the specific dried herb or blend in use.
Competition
Our
products, the CANNAcig and Cumulus vapor inhalers, are as small and discreet as most other vaporizers on the market. Some of our
competitors have products that are larger and heavier than our vaporizers and require energy sources to operate. All vaporizers
work in a similar way. Consequently, competition is based on brand development and recognition and price. The internet marketplace
for smaller vaporizers is very competitive with many brands being offered. Examples of the major competitive brands that we compete
against are:
|
● |
Cannabee
and the eJoint ®. |
|
|
|
|
● |
Grenco
Science™ and the G Pen and Micro G. |
|
|
|
|
● |
Atmos
Raw Vape. |
Below
are links to three competitors and their disposable lines:
|
● |
http://www.cannabee.com/ |
|
|
|
|
● |
http://www.grencoscience.com/ |
|
|
|
|
● |
http://www.atmosrawvaporizer.com/ |
Intellectual
Property
We
anticipate that over time, with the development of our new line of products, the Company will implement more stringent procedures
to protect our trademarks, copyrights and intellectual property. Currently, the Company is in the process of developing a trademark
for the Pocket Puffer Dry Herb Vaporizer.
We
intend to enter into confidentiality agreements with our employees, consultants, vendors and customers. We also intend to enter
in to non-disclosure agreements with partners seeking to do business with us, represent us, distribute our products or help us
in capitalization and public awareness.
Governmental
Regulation
Currently,
there are twenty three states plus the District of Columbia that have laws and regulations that recognize in varying circumstances
the legitimate medical uses for cannabis and consumer use of cannabis in connection with medical treatment. Many other states
are considering legislation to similar effect. As of the date of this writing, the policy and regulations of the Federal government
and its agencies is that cannabis has no medical benefit and a range of activities including cultivation and use of cannabis for
personal use is prohibited on the basis of federal law and may or may not be permitted on the basis of state law. Active enforcement
of the current federal regulatory position on cannabis on a regional or national basis may directly and adversely affect the willingness
of customers of Rapid Fire to invest in or buy products from Rapid Fire. Active enforcement of the current federal regulatory
position on cannabis may thus adversely affect revenues and profits of the Company. Rapid Fire Marketing does not handle or sell
any marijuana/cannabis products. Our products consist of herbal vaporizers.
In
the future, the manufacturing, processing, testing, packaging, labeling and advertising of the products that we distribute may
be subject to regulation by one or more U.S. federal agencies, including the Food and Drug Administration, the Federal Trade Commission,
the CSA and UL in North America, the United States Department of Agriculture, the Environmental Protection Agency, the standards
provided by the United States Public Health authority and the World Health Organization for Drinking Water. These activities may
also be regulated by various agencies of the states, localities and foreign countries in which consumers reside.
Research
and Development
In
2014 and 2013, the Company spent $40,625 and $110,175 on research and development of new products, respectively. We believe that
as a result of the money we are devoting to research and development, our products are more now competitive, easier to use than
earlier products, and more inexpensive to manufacture.
Employees
As
of March 25, 2015, our sole officer and director, Thomas Allinder, is our only full time employee.
Executive
Offices
Our
principal executive offices are located at 311 West Third St., Suite 1234, Carson City, NV, 89703. Our telephone number is 775-461-5127.
ITEM
1A. RISK FACTORS
Smaller
reporting companies are not required to provide the information required by this item.
ITEM
2. PROPERTIES
The
principal offices of Rapid Fire are located at 311 West Third St., Suite 1234, Carson City, NV, 89703. The Nevada Business center
is contracted by Rapid Fire Marketing to forward mail to management, accounting and administrative personnel within the
Company. The Nevada Business center also aids the Company with annual reports to the Nevada Secretary of State as well as other,
smaller, administrative tasks. The Company has no assets within the Nevada Business Center.
ITEM
3. LEGAL PROCEEDINGS
We
know of no material, existing or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceeding
or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial
shareholder, is an adverse party or has a material interest adverse to our company.
ITEM
4. MINE SAFETY DISCLOSURE
Not
applicable.
PART
II
ITEM
5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market
Information
As
of March 25, 2015, the closing price of our common stock was $0.0004.
Our
common stock is listed to trade on the OTC Pink Limited tier of the OTC Markets under the symbol “RFMK.” The following
table reflects the high and low bids for our common stock for periods indicated. The quotations reflect high and low bid price
on a daily basis and reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual
transactions.
| | |
High | | |
Low | |
Fiscal
year ended December 31, 2013 | | |
| | | |
| | |
January
1 to March 31, 2013 | | |
$ | 0.0038 | | |
$ | 0.0013 | |
April
1 to June 30, 2013 | | |
$ | 0.0017 | | |
$ | 0.0008 | |
July
1 to September 30, 2013 | | |
$ | 0.0010 | | |
$ | 0.0004 | |
October
1 to December 31, 2013 | | |
$ | 0.0005 | | |
$ | 0.0002 | |
Fiscal
year ended December 31, 2014 | | |
| | | |
| | |
January
1 to March 31, 2014 | | |
$ | 0.0200 | | |
$ | 0.0003 | |
April
1 to June 30, 2014 | | |
$ | 0.0090 | | |
$ | 0.0015 | |
July
1 to September 30, 2014 | | |
$ | 0.0035 | | |
$ | 0.0007 | |
October
1 to December 31, 2014 | | |
$ | 0.0017 | | |
$ | 0.0004 | |
Holders
As
of March 25, 2015, there were approximately 132 holders of record of our common stock, and an indeterminate number of holders
of unrestricted shares.
Dividends
We
have not declared cash dividends on our common stock since our inception and we do not anticipate paying any cash dividends in
the foreseeable future. Our current policy is to retain earnings, if any, for use in our operations and in the development of
our business. Our future dividend policy will be determined from time to time by our board of directors.
Unregistered
Sales of Equity Securities
The
following is a summary of transactions by us during the year ended December 31, 2014, involving sales of our securities that were
not registered under the Securities Act. Each sale was exempt from registration under either Section 4(2) of the Securities Act
or Section 3(a)(9) of the Securities Act because (i) the securities were offered and sold only to accredited investors; (ii) there
was no general solicitation or general advertising related to the offerings; (iii) each investor was given the opportunity to
ask questions and receive answers concerning the terms of and conditions of the offering and to obtain additional information;
(iv) the investors represented that they were acquiring the securities for their own account and for investment; and (v) the securities
were issued with restrictive legends where required.
Convertible
Notes
As
of January 28, 2014, the Company had incurred amounts of $82,500 owed to Pyrenees Investments, LLC for service rendered. On January
28, 2014, the indebtedness was sold to Iconic Holdings, LLC, a third party. In connection with this sale, the Company issued an
$82,500 convertible note to the third party. The convertible note incurs interest at 10% per annum and is due January 24, 2015.
At any time the note may be converted into shares of common stock, at the lower of $0.0006 or 50% discount off the lowest trading
price for the Company’s common stock within the twenty (20) days preceding the conversion. During the year ended December
31, 2014, the holder converted $50,000 into shares of common stock.
In
February 2014 and October 2014, the Company borrowed $100,000 and $25,000, respectively, as evidenced by a convertible note issued
to Iconic Holdings as part of a total note agreement of $165,000, including a $15,000 on issuance discount, which was entered
into on January 28, 2014. The Company has yet to receive the remaining $25,000 in proceeds in which an additional $2,500 of an
issuance discount will be recorded. The convertible note incurs interest at 10% per annum and is due January 28, 2015. At any
time the note may be converted into common stock, at the lower of $0.0006 or 50% discount off the lowest trading price for the
Company’s common stock within the twenty (20) days preceding the conversion. During the year ended December 31, 2014, the
holder converted $55,000 into shares of common stock.
Series
A2 Preferred Stock
On
October 5, 2012, the Company filed a Certificate of Designation of Series A2 Convertible Preferred Stock (“Series A2”)
with the Secretary of State of Nevada. Pursuant to the Series A2 Certificate of Designation, the Company designated 300 shares
of its blank check preferred stock as Series A2 . The Series A2 ranks senior to the common stock and any subsequently created
series of preferred stock that does not expressly rank pari passu with or senior to the Series A2 (the “Junior Stock”).
The Series A2 can be converted at anytime and has a fixed conversion price of $0.00225 per common share. The Series A2 is entitled
to minimum six years worth of dividends accruing at a rate of 8.5% per annum potentially increasing to 18% per annum under certain
circumstances such as a significant decrease in the price of the Company’s common stock. Dividends are payable in cash or
in shares of common stock valued at 85.0% of the closing market price of the Company’s common stock for any trading day
following the issuance date of the Series A2.
On
January 8, 2014, the holder converted 10 Series A2 shares into 44,444,444 shares of common stock. In addition, under the terms
of the Series A2 the holder was entitled to immediate payment of dividends on the $100,000 stated value of the Series A2 at an
annual dividend rate of 18% rate, which is an increase over the stated 8.5% due to adjustments related to the decrease in the
fair market value of the Company’s common stock, for a period of six years resulting in dividends payable of $108,000. The
holder elected to convert the dividends to common stock based upon 85% of the closing market price as disclosed above resulting
in a conversion price of $0.00017 with 635,294,118 common shares being issued. On the date of conversion, the fair market value
of the dividend shares issued was $1,334,118 based upon the closing market price of the Company’s common stock. Thus, the
Company recorded additional expense of $1,334,118 in connection with the dividend shares issued.
On
February 11, 2014, the holder converted 15 Series A2 shares into 66,666,666 shares of common stock. In addition, under the terms
of the Series A2 the holder was entitled to immediate payment of dividends on the $150,000 stated value of the Series A2 at an
annual dividend rate of 18% rate, which is an increase over the stated 8.5% due to adjustments related to the decrease in the
fair market value of the Company’s common stock, for a period of six years resulting in dividends payable of $162,000. The
holder elected to convert the dividends to common stock based upon 85% of the closing market price as disclosed above resulting
in a conversion price of $0.00017 with 952,941,176 common shares to be issued. On the date of conversion, the fair market value
of the dividend shares issued was $3,144,706 based upon the closing market price of the Company’s common stock.
Series
C Preferred Stock
On
March 27, 2014, the Company filed a Certificate of Designation of Series C Convertible Preferred Stock (“Series C”)
with the Secretary of State of Nevada. Pursuant to the Series C Certificate of Designation, the Company designated 5,000 shares
of its blank check preferred stock as Series C. The Series C ranks senior to the common stock and any subsequently created series
of preferred stock that does not expressly rank pari passu with or senior to the Series C (the “Junior Stock”) and
pari passu in rights to dividends and liquidation to the Series A2 and junior to all existing and future indebtedness of the Company.
The Series C can be converted at anytime and has a fixed conversion price of $0.01 per common share. The Series C is entitled
to minimum six years worth of dividends accruing at a rate of 8.5% per annum potentially increasing to 18% per annum under certain
circumstances such as a significant decrease in the price of the Company’s common stock. Dividends are payable in cash or
in shares of common stock valued at 85.0% of the closing market price of the Company’s common stock for any trading day
following the issuance date of the Series C.
During
the year ended December 31, 2014, the Company issued 5,000 shares of Series C for a subscription receivable of $5,000,000. During
the year ended December 31, 2014, the Company accrued dividends related to the Series C shares of $320,430 of which were also
included within accounts payable and accrued liabilities on the accompanying financial statements.
Common
Stock
During
the year ended December 31, 2014, the Company issued 1,754,386 shares of common stock valued at $4,737 based upon the closing
market price of the Company’s common stock on the date of the agreement to a third party for the rights to future royalties
related to Global Specialty Products, Inc.’s MicroRoasters brand.
Additionally,
during the year ended December 31, 2014, the Company issued 50,000,000 shares of common stock valued at $135,000 based upon the
closing market price of the Company’s common stock on the on the date of the agreement to a third party for sales and marketing
services.
Additionally,
during the year ended December 31, 2014, the Company issued 50,000,000 shares of common stock valued at $135,000 based upon the
closing market price of the Company’s common stock on the on the date of the agreement to a third party for sales and marketing
services.
On
January 27, 2014, the Company entered into a settlement with the prior management whereby prior management agreed to return 60,000,000
shares of the Company’s common stock previously issued to them for services rendered. In return, the Company has agreed
to release prior management from any claims related to all costs deemed of a non-business nature. The Company accounted for the
shares at their par value of $60,000 reducing common stock by that amount with the reclass to additional paid in capital. Upon
return, the common stock was cancelled by the transfer agent and reflected in our calculation of weighted average shares for the
year ended December 31, 2014 as of the date of the agreement.
ITEM
6. SELECTED FINANCIAL DATA
Not
applicable as we are a smaller reporting company.
ITEM
7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Except
for the historical information, the following discussion contains forward-looking statements that are subject to risks and uncertainties.
We caution you not to put undue reliance on any forward-looking statements, which speak only as of the date of this report. Our
actual results or actions may differ materially from these forward-looking statements for many reasons. Our discussion and analysis
of our financial condition and results of operations should be read in conjunction with the financial statements and related notes
and with the understanding that our actual future results may be materially different from what we currently expect.
Our
Business
The
core business of Rapid Fire Marketing is the development and sale of vapor inhalers. The vapor inhaler is the base technology
for the CANNAcig and Cumulus product. At this time, we are developing additional products based on vapor inhaler technology including
primarily the Pocket Puffer. The Pocket Puffer has been in development and tested throughout 2013and 2014 and is expected to reach
the market in early to mid 2015. We believe vapor inhalers have a greater opportunity in the retail markets where it is sold without
the active ingredient. Accordingly, we do not sell any products with active ingredients.
We
are a vapor inhaler development and sales company that provides the best solution for vaporizing herbs, oils, waxes, nicotine,
and herbs for casual users. We believe our technology is a healthier alternative for smokers and herbal users all around the world.
Our
target customer is an individual who uses nicotine and a variety of herbs for vaporization. Our units are set up and ready to
use right out of the box.
The
Company’s objectives are consumer focused:
|
(a) |
Create
and continue to create the most innovative vaporizer products on the market. |
|
|
|
|
(b) |
Develop
customer and brand loyalty, by creating the most innovative cost-effective products on the market, and using such customer
loyalty to develop renewable payment revenue streams through sales of accessories, parts and new units as they are developed
or acquired. |
|
|
|
|
(c) |
To
establish a dominant market presence by reaching profitability quickly and using that profit as re-investment into new product
development, market share strategies and customer loyalty programs. |
The
key day-to-day processes that our business performs to serve our customers are as follows:
|
(a) |
Product
Development: The CANNAcig has been fully developed and tested by the former CEO, Michael Amezquita and former consultant,
Judah Nieditch. They developed the CANNAcig using twenty random consumers to help test the design. Feedback was gathered by
these consumers and incorporated into the design before it was submitted to HexCorp, for manufacturing.. |
|
|
|
|
(b) |
Sales:
Initially, the product was sold in retail smoke shops in Arizona and California, as well as online. A one-time sale through
a distributor (GotVape.com) was conducted as well. However at this time, all sales are being conducted online through an independent
contractor who owns theCANNAcig.com website |
|
|
|
|
(c) |
Marketing:
Our primary marketing methods include internet marketing, social media, E-mail, news
and press releases among others. All internet marketing, email and social media marketing
is conducted through “inbound marketing.” Inbound marketing means that people
must subscribe to receive marketing materials through the Company website or through
social media platforms maintained by the Company. Email marketing materials are only
provided to those customers who opt-in as it is illegal under the CANSPAM Act to transmit
email that is unsolicited. PR Newswire and MacReport Media were used to transmit news
releases regarding Company and product development.
|
|
|
|
|
|
Our
relevant market is large enough for our company to enjoy potential success given the current size of the electronic cigarette
and vaporizer markets. Although there are many competitors on the internet marketplace, we believe that if we are successful
in developing brand recognition, we can develop a large share of the market. |
|
(d) |
Customer
Service: Customer Service is managed directly in-house to resolve any customer questions or concerns. |
Management
believes that our company’s relevant market is large enough for us to enjoy potential success given the current size and
popularity of the electronic cigarette and vaporizer markets. We believe we can be successful in capturing a portion of market
share in the electronic cigarette and vaporizer industries.
Plan
of Operation
As
we have limited cash flow from operations, our ability to maintain normal operations is entirely dependent upon obtaining adequate
cash to finance operations and our research and development activities. . Since inception, we have raised capital to finance operations
through sale of equity, short-term debt in which our obligations were paid immediately, product financing and issuance of equity
for services. It is unknown when, if ever, we will achieve a level of revenues adequate to support our costs and expenses. Our
independently registered public accounting firm included in their most recent audit opinion that there was substantial doubt regarding
our going concern.
There
is considerable doubt that the Company will be able to obtain additional financing if needed. The Company spends approximately
$40,000 per month currently on salaries, consultants, sub-contractors and professional fees, and projects. We will need approximately
$1,200,000 in the next twelve months to support normal operations. Our ability to meet our cash requirements for the next twelve
months depends on our ability to obtain such financing. Even if financing is obtained, any such financing will likely involve
additional fees and issuance of additional debt, which may significantly reduce the amount of cash we will have for our operations.
Accordingly, there is no assurance that we will be able to implement its plans in the future.
In
order for us to meet our basic financial obligations, including salaries and normal operating expenses, we plan to sell additional
units of our products and to seek additional equity or debt financing. We have commitments for $750,000 remaining on the purchase
of Series A2 Preferred Stock and approximately $4,950,000 for the purchase of Series C Preferred Stock in financing from Ironridge
Global, an international fund. To date, we have received $800,495, with approximately subsequent 117 tranches remaining of $50,000,
or $5,715,505, which includes $16,000 receivable due to an over issuance of common stock. The receipt of this funding is dependent
upon the Company maintaining a sufficient number of authorized shares, etc. We cannot assure this will be adequate financing to
meet our needs over the next 12 months or through the years of scheduled payments due in connection with the financings.
We
are continuing our efforts to obtain customers for our products, expand sales efforts worldwide and expand the industries we target
for possible customers. We also have plans to develop additional products and revisions or modifications to our current products.
As a result, we intend to hire additional personnel who have industry experience and training so that they can be immediately
effective in the building of our company and brand. We retain most design, product configuration and technical engineering resources
“in-house.” We will continue to develop new products over the next twelve months and plan to invest a certain amount
of funds to product development, although at this time, we do not believe that will be a considerable amount in relation to the
overall expenses of our company.
We
do not plan on a large equipment purchase or a significant change to the number of employees over the next twelve months. We do
plan to implement a contract sales force to help distribute its products through retail outlets in the 17 states where its products
are legally sold.
Results
of Operations
Our
audited operating results are presented for the years ended December 31, 2014 and 2013 below:
| |
Year
Ended | | |
Year
Ended | |
| |
December
31, 2014 | | |
December
31, 2013 | |
Sales | |
$ | 4,563 | | |
$ | 21,834 | |
Costs
of sales | |
| 92,456 | | |
| 7,525 | |
Gross
profit (loss) | |
| (87,893 | ) | |
| 14,309 | |
| |
| | | |
| | |
Operating
expenses: | |
| | | |
| | |
Sales
and marketing | |
| 178,720 | | |
| 107,029 | |
General
and administrative | |
| 854,214 | | |
| 538,782 | |
Research
and development | |
| 40,625 | | |
| 110,175 | |
Stock
for services | |
| 254,737 | | |
| 2,490,218 | |
Total
operating expenses | |
| 1,328,296 | | |
| 3,246,204 | |
Other
income (expense) | |
| (5,199,776 | ) | |
| (536,964 | ) |
Net
loss | |
$ | (6,615,965 | ) | |
$ | (3,768,859 | ) |
| |
| | | |
| | |
Net
loss per share form operations | |
$ | (0.00 | ) | |
$ | (0.00 | ) |
Basic
weighted average number of shares of common stock outstanding | |
| 4,480,344,580 | | |
| 2,169,422,459 | |
Year
ended December 31, 2014 Compared to Year ended December 31, 2013
Sales
for the year ended December 31, 2014, were $4,563, a decrease of $17,271 or 79%, as compared to $21,834 for the year ended December
31, 2013. The decrease was due to limited funds available for marketing, as well as our inability to fully maintain and staff
the sales function, and the related marketing support. In addition, we have reduced our marketing of the CANNAcig and Cumulus
and have focused our efforts to getting the Pocket Puffer to market. We also incurred direct costs of $92,456 and $7,525 related
to sales during the year ended December 31, 2014 and 2013, respectively. The increase of $84,931 or 1,128.7% between the 2014
and 2013 years was a result of an inventory obsolescence reserve of $89,563 recorded during 2014. We recorded an obsolescence
reserve in 2014 due to lack of current sales and our an anticipated new product line to be issued in 2015.
Sales
and marketing expenses were $178,720 for year ended December 31, 2014, an increase of $71,691 or 67.0% over the prior year of
$107,029. The increase in sales and marketing expense was primarily due to stock based compensation related to common stock we
issued to an individual in which was assisting us with sales of product. Actual capital expenditures for sales and marketing expenses
decreased from 2013 due to limited funds available for marketing and our emphasis on bringing our new product, Pocket Puffer,
to market.
General
and administrative expenses were $854,214 for the year ended December 31, 2014, an increase of $315,432 or 58.5% over the prior
year of $538,782. The increase in general and administrative expense was due to an increase in professional fees related to professional
fees incurred in connection with our public filings in which these costs were not incurred during the prior comparable period.
In addition, we recorded $209,810 of fees paid in connection with an equity line of credit in which the proceeds weren’t
received and thus amounts were recorded as expense rather than an offset to the expected proceeds.
Research
and development expenses were $40,625 for the year ended December 31, 2014, a decrease of $69,550 or 63.1% over the prior year
of $110,175. Research and development consists of costs incurred with developing prototypes for our new product, Pocket Puffer.
A large portion of the initial development was done in 2013 whereby services performed in 2014 related to refining and trouble
shooting.
Stock
for services expense was $254,737 for the year ended December 31, 2014, as compared to $2,490,218 for the year ended December
31, 2013, a decrease of $2,235,481 or 89.8%. The decrease in stock for services expense during the current year was a result of
a significant expense in the prior year related to the issuance of Series B Preferred stock to the Chief Executive Officer, whereby
no shares were issued in the current year.
Other
income and (expense) was ($5,199,776) for the year ended December 31, 2014, an increase of $4,662,812 or 868.4% over the prior
period of ($536,964). The significant increase was due to various non-cash factors including the increase in the fair market value
of our derivative liabilities recorded in connection with convertible debt issued during the current period. The convertible notes
have conversion features which adjust based on market price. In addition, under the terms of the Series A2 preferred stock agreement
with Ironridge, they receive six (6) years worth of dividends upon conversion of their Series A2 into preferred stock. The loss
on common shares issued during the year ended December 31, 2014 is related to the conversion of 25 Series A2 shares into common
stock. The Company records the common shares issuable for the dividends at the fair market value of the common stock on the date
of conversion.
Liquidity
and Capital Resources
We
used cash of $722,921 in our operating activities in the year ended December 31, 2014, compared to $358,871 in the same period
in 2013. During the year ended December 31, 2014, the use of cash was primarily related to the net loss incurred due to our limited
revenue generating operations offset by non-cash charges related to the issuance of common stock for preferred stock dividends
of $4,478,824 stock based compensation of $389,737. Net changes in other operation accounts such as inventory were insignificant
due to the limited sales of our product during the current year. During the year ended December 31, 2013, our use of cash was
offset by $398,333 of stock based compensation, loss on shares issued of $424,741 in connection with the issuance of common stock
in settlement of amounts due to Ironridge and the value of Series B of $2,091,885 issued to our Chief Executive Officer. Decrease
in prepaid expenses was related to the amortization of these amounts due to the related services being provided. In addition,
the increase in accounts payable was due to amounts payable to our Chief Executive Officer for payroll and accruals for a consultant
who was providing marketing and public relation services in which we did not have sufficient capital on hand to satisfy the obligations
as they were incurred.
Our
financing activities provided cash of $725,000 in the year ended December 31, 2014 compared to $359,500 in the same period in
2013. During the year ended December 31, 2014, we received proceeds of $600,000 from stock subscription receivable, and $125,000
from issuance of convertible notes payable. We continue to be dependent upon the sale of debt and equity instruments to fund our
operations. As costs have increased during the year ended December 31, 2014 due in part by the expansion of operations and costs
related to being a public company, we have had the need to obtain additional financing.
During
the year ended December 31, 2014, the we funded operations through the receipt of $125,000 in convertible notes payable, $550,000
in connection with proceeds received in connection with the sale of Series A2 Convertible Preferred stock and $50,000 in connection
with the sale of Series C Convertible Preferred stock. As of December 31, 2014, the Company still have subscriptions receivable
from sales of Series A2 Convertible Preferred stock and Series C Convertible Preferred stock of $566,000 and $4,950,000, respectively.
Subsequent to year end, the Company has received $100,000 in proceeds related to Series A2 Convertible Preferred stock. Management’s
plans include collecting on the remaining sales of Series A2 Convertible Preferred stock and Series C Convertible Preferred stock,
selling its equity securities and obtaining debt financing to fund its capital requirement and ongoing operations; however, there
can be no assurance the Company will be successful in these efforts.
Off-Balance
Sheet Arrangements
We
do not have any off balance sheet arrangements that are reasonably likely to have a current or future effect on our financial
condition, revenues, and results of operations, liquidity, or capital expenditures.
Disagreements
with Prior Management Team
Prior
to 2013, we believe our prior management team may have engaged in activities that were outside the scope of the Company’s
business. Prior management has disagreed with these findings. On January 27, 2014, the Company entered into a settlement with
the prior management regarding these issues. As a result of the settlement agreement, prior management has agreed to return 60,000,000
shares of the Company’s common stock previously issued to them for services rendered and in return the Company has agreed
to release prior management from any claims related to all costs deemed of a non-business nature.
Increase
in Authorized Number of Shares
On
November 7, 2014, the Company filed an Amendment to the Certificate of Incorporation in the state of Nevada that increased the
number of authorized shares of the Company from 5 billion to 20 billion.
Critical
Accounting Policies
Our
discussion and analysis of our financial condition and results of operations is based on our financial statements, which have
been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial
statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses
for each period. The following represents a summary of our critical accounting policies, defined as those policies that we believe
are the most important to the portrayal of our financial condition and results of operations and that require management’s
most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effects of matters
that are inherently uncertain.
Use
of Estimates
The
preparation of financial statements in conformity with generally accepted accounting principles in the United States requires
management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates. Significant estimates include collectability of
accounts receivable, accounts payable, sales returns, and recoverability of long-term assets.
Revenue
Recognition
Revenues
from product sales are recorded when all four of the following criteria are met: (i) persuasive evidence of an arrangement exists;
(ii) delivery has occurred or services have been rendered; (iii) our price to the buyer is fixed or determinable; and (iv) collectability
is reasonably assured. Our policy is to report our sales levels on a net revenue basis, with net revenues being computed by deducting
from gross revenues the amount of actual sales returns and the amount of reserves established for anticipated sales returns.
Our
policy for shipping and handling costs billed to customers is to include these costs in revenue in accordance with ASC Topic 605,
“Revenue Recognition,” which requires that all shipping and handling billed to customers should be recorded as revenue.
Accordingly, we record our shipping and handling amounts within net sales and operating expenses.
Income
Taxes
We
account for income taxes in accordance with ASC Topic 740, “Income Taxes”. ASC 740 requires a company to use the asset
and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences,
and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between
the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when,
in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized.
Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Under
ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would
be sustained in a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is
greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not”
test, no tax benefit is recorded.
Stock-Based
Compensation
We
record stock-based compensation in accordance with ASC Topic 718, “Compensation - Stock Compensation.” ASC Topic 718
requires companies to measure compensation cost for stock-based employee compensation at fair value at the grant date and recognize
the expense over the employee’s requisite service period. Under ASC Topic 718, volatility is based on the historical volatility
of our stock or the expected volatility of the stock of similar companies. The expected life assumption is primarily based on
historical exercise patterns and employee post-vesting termination behavior. The risk-free interest rate for the expected term
of the option is based on the U.S. Treasury yield curve in effect at the time of grant.
We
use the Black-Scholes option-pricing model, which was developed for use in estimating the fair value of options. Option-pricing
models require the input of highly complex and subjective variables including the expected life of options granted and the expected
volatility of our stock price over a period equal to or greater than the expected life of the options. Because changes in the
subjective assumptions can materially affect the estimated value of our employee stock options, it is management’s opinion
that the Black-Scholes option-pricing model may not provide an accurate measure of the fair value of our employee stock options.
Although the fair value of employee stock options is determined in accordance with ASC Topic 718 using an option-pricing model,
that value may not be indicative of the fair value observed in a willing buyer/willing seller market transaction.
Earnings
Per Share
Earnings
per share is calculated in accordance with the ASC Topic 260, “Earnings Per Share.” Basic net income or loss per share
is computed by dividing the net income or loss available to common stockholders by the weighted average number of common shares
outstanding. Diluted net income per share is based on the assumption that all dilutive convertible shares and stock options and
warrants were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and
warrants that are deemed “in the money” are assumed to be exercised at the beginning of the period (or at the time
of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during
the period. Also, under this method, convertible notes and preferred stock are treated as if they were converted at the beginning
of the period.
ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As
a smaller reporting company, we are not required to provide this information.
ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
RAPID
FIRE MARKETING, INC.
INDEX
TO FINANCIAL STATEMENTS
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Board of Directors and Stockholders of Rapid Fire Marketing, Inc.
We have audited the accompanying balance sheet
of Rapid Fire Marketing, Inc. (the “Company”) as of December 31, 2014, and the related statements of operations, stockholders’
equity (deficit), and cash flows for the year then ended. These financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with
the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform
the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company
is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits
included consideration of internal control over financial reporting as a basis for designing audit procedures that are 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, we express no such opinion. An audit also 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. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred
to above present fairly, in all material respects, the financial position of Rapid Fire Marketing, Inc. as of December 31, 2014,
and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally
accepted in the United States of America.
We Also audited the adjustments described
in Note 9 that were applied to restate the 2013 financial statements to correct and error. In our opinion, such adjustments are
appropriate and have been properly applied. We were not engaged to audit, review or apply any procedures to the 2013 of the Company
other than with respect to the adjustments and, accordingly, we don not express an opinion or any other form of assurance on the
2013 financial statements taken as a whole.
The accompanying financial statements have been prepared assuming that the Company will
continue as a going concern. As discussed in Note 1 to the financial statements, the Company has negative working capital and
has incurred losses from operations. These factors raise substantial doubt about the Company’s ability to continue as a
going concern. Management’s plans with regard to these matters are described in Note 1. The accompanying financial statements
do not include any adjustments that might result from the outcome of this uncertainty.
/s/
KLJ & Associates, LLP |
|
|
|
KLJ
& Associates, LLP |
|
St.
Louis Park, MN |
|
April
13, 2015 |
|
1660 Highway 100 South
Suite 500
St . Louis Park, MN 55416
630.277.2330
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
Rapid Fire Marketing, Inc.
Rochester, Michigan
We
have audited, before the effects of the adjustments for the correction of the errors described in Note 9, the accompanying balance
sheet of Rapid Fire Marketing, Inc. as of December 31, 2013, and the related statements of operations, stockholders’ equity,
and cash flows for the year then ended (the 2013 financial statements before the effects of the adjustments discussed in Note
9 have been withdrawn and are not presented herein). The 2013 financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with
the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company
has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial
reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures
that are 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, we express no such opinion. An audit includes examining on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion, except for the errors described
in Note 9, the financial statements referred to above present fairly, in all material respects, the financial position of Rapid
Fire Marketing, Inc. as of December 31, 2013, and the results of its operations and cash flows for the year then ended, in conformity
with accounting principles generally accepted in the United States of America.
We were not engaged to audit, review, or apply any procedures to the adjustments for
the correction of the errors described in Note 9 and, accordingly, do not express an opinion or any other form of assurance about
whether such adjustments are appropriate and have been properly applied. Those adjustments were audited by KLJ & Associates,
LLP.
/s/
Silberstein Ungar, PLLC |
|
Silberstein
Ungar, PLLC |
|
|
|
Bingham
Farms, Michigan |
|
April
11, 2014 |
|
RAPID
FIRE MARKETING, INC
Balance
Sheets
As
of December 31, 2014 and 2013
| |
December
31, 2014 | | |
December
31, 2013 | |
Assets: | |
| | | |
| (as
restated) | |
Cash
and cash equivalents | |
$ | 4,430 | | |
$ | 2,351 | |
Accrued
interest | |
| 52,179 | | |
| 16,744 | |
Accounts
receivable | |
| - | | |
| - | |
Inventory | |
| 40,373 | | |
| 130,814 | |
Deposit
on inventory | |
| 104,000 | | |
| 104,000 | |
Prepaid
expense | |
| 22,500 | | |
| - | |
Current
assets | |
| 223,482 | | |
| 253,909 | |
Total
assets | |
$ | 223,482 | | |
$ | 253,909 | |
| |
| | | |
| | |
Liabilities
and Stockholders’ Equity (Deficit): | |
| | | |
| | |
Current
liabilities | |
| | | |
| | |
Accounts
payable and accrued liabilities | |
$ | 670,959 | | |
$ | 305,680 | |
Convertible
notes payable, net discount of $25,767 and $0 | |
| 112,733 | | |
| 23,500 | |
Derivative
liabilities | |
| 177,323 | | |
| - | |
Current
liabilities | |
| 961,015 | | |
| 329,180 | |
Total
liabilities | |
| 961,015 | | |
| 329,180 | |
| |
| | | |
| | |
Commitments
and contingencies | |
| | | |
| | |
| |
| | | |
| | |
Stockholders’
Equity (Deficit): | |
| | | |
| | |
Series
A1 Convertible Preferred stock, $0.001 par value, 25,000,000 shares authorized, 2,790,000 and 7,790,000 issued and outstanding
at December 31, 2014 and December 31, 2013, respectively | |
| 2,790 | | |
| 7,790 | |
Series
A2 Convertible Preferred Stock, $0.001 par value, 300 shares authorized, 125 and 150 shares issued and outstanding at December
31, 2014 and December 31, 2013, respectively | |
| - | | |
| - | |
Series
B Preferred Stock, $0.001 par value, 16,000,000 and 16,000,000 shares authorized, issued and outstanding at December 31, 2014
and December 31, 2013, respectively | |
| 16,000 | | |
| 16,000 | |
Series
C Preferred Stock, $0.001 par value, 5,000 shares authorized, 5,000 and 0 shares issued and outstanding at December 31, 2014
and December 31, 2013, respectively | |
| 5 | | |
| - | |
Common
Stock,$0.001 par value 20,000,000,000 shares authorized, 4,609,208,217 and 2,789,513,042 shares issued and outstanding at
December 31, 2014 and December 31, 2013, respectively. 500,000,000 shares reserved for issuance at December 31, 2014 | |
| 4,960,208 | | |
| 2,789,513 | |
Stock
to be issued | |
| 1,014,906 | | |
| 10,000 | |
Additional
paid-in capital | |
| 22,094,591 | | |
| 14,991,494 | |
Stock
subscription receivable | |
| (5,516,000 | ) | |
| (1,116,000 | ) |
Deferred
stock compensation | |
| - | | |
| (80,000 | ) |
Accumulated
deficit | |
| (23,310,033 | ) | |
| (16,694,068 | ) |
Total
stockholders’ equity (deficit) | |
| (737,533 | ) | |
| (75,271 | ) |
Total
liabilities and stockholders’ equity (deficit) | |
$ | 223,482 | | |
$ | 253,909 | |
The
accompanying notes are an integral part of these financial statements.
RAPID
FIRE MARKETING, INC
Statements
of Operations
For
the Years Ended December 31, 2014 and 2013
| |
Year
Ended
December 31, 2014 | | |
Year
Ended
December 31, 2013 | |
| |
| | |
(as
restated) | |
| |
| | |
| |
Sales | |
$ | 4,563 | | |
$ | 21,834 | |
| |
| | | |
| | |
Costs
of sales | |
| 92,456 | | |
| 7,525 | |
| |
| | | |
| | |
Gross
profit (loss) | |
| (87,893 | ) | |
| 14,309 | |
| |
| | | |
| | |
Operating
expenses: | |
| | | |
| | |
Sales
and marketing | |
| 178,720 | | |
| 107,029 | |
General
and administrative | |
| 854,214 | | |
| 538,782 | |
Research
and development | |
| 40,625 | | |
| 110,175 | |
Stock
for services | |
| 254,737 | | |
| 2,490,218 | |
Total
operating expenses | |
| 1,328,296 | | |
| 3,246,204 | |
| |
| | | |
| | |
Loss
from operations | |
| (1,416,189 | ) | |
| (3,231,895 | ) |
| |
| | | |
| | |
Other
income (expense) | |
| | | |
| | |
Interest
income | |
| 45,992 | | |
| 14,591 | |
Interest
expense | |
| (636,789 | ) | |
| (126,814 | ) |
Day
one charge and change in fair value of derivative liabilities | |
| (130,155 | ) | |
| - | |
Loss
on common shares issued | |
| (4,478,824 | ) | |
| (424,741 | ) |
Total
other income (expense) | |
| (5,199,776 | ) | |
| (536,964 | ) |
| |
| | | |
| | |
Net
loss before income taxes | |
| (6,615,965 | ) | |
| (3,768,859 | ) |
| |
| | | |
| | |
Provision
for income taxes | |
| - | | |
| - | |
| |
| | | |
| | |
Net
loss | |
$ | (6,615,965 | ) | |
$ | (3,768,859 | ) |
| |
| | | |
| | |
Basic
net loss per share | |
$ | (0.00 | ) | |
$ | (0.00 | ) |
Diluted
net loss per share | |
$ | (0.00 | ) | |
$ | (0.00 | ) |
Basic
weighted average number of shares of common stock outstanding | |
| 4,480,344,580 | | |
| 2,169,422,459 | |
Diluted
weighted average number of shares of common stock outstanding | |
| 4,480,344,580 | | |
| 2,169,422,459 | |
The
accompanying notes are an integral part of these financial statements.
RAPID
FIRE MARKETING, INC
Statement
of Stockholders’ Equity
For
the Years Ended December 31, 2014 and 2013
| |
Series A1
Preferred Stock | | |
Series A2
Preferred Stock | | |
Series
B
Preferred Stock | | |
Series C
Preferred Stock | | |
Common stock | | |
Additional
Paid-in | | |
Shares
to | | |
Stock
Subscription | | |
Deferred
Stock | | |
Accumulated | | |
Total
Stockholder’s | |
| |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Capital | | |
be
Issued | | |
Receivable | | |
Compensation | | |
Deficit | | |
Equity | |
| |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
December
31, 2012 | |
| 10,790,000 | | |
$ | 10,790 | | |
$ | 150 | | |
$ | - | | |
| - | | |
$ | - | | |
| - | | |
$ | - | | |
| 1,575,113,736 | | |
$ | 1,575,114 | | |
$ | 12,686,416 | | |
$ | 571,518 | | |
$ | (1,450,000 | ) | |
$ | (40,000 | ) | |
$ | (12,925,209 | ) | |
$ | 428,629 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common
stock issued for services and stock based compensation | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 150,000,000 | | |
| 150,000 | | |
| 288,333 | | |
| - | | |
| - | | |
| (40,000 | ) | |
| - | | |
| 398,333 | |
Conversion
of preferred stock into common stock | |
| (3,000,000 | ) | |
| (3,000 | ) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 90,000,000 | | |
| 90,000 | | |
| (87,000 | ) | |
| - | | |
| | | |
| - | | |
| - | | |
| - | |
Preferred
stock issued for cash | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 334,000 | | |
| - | | |
| - | | |
| 334,000 | |
Preferred
stock issued to Chief Executive Officer | |
| - | | |
| - | | |
| - | | |
| - | | |
| 16,000,000 | | |
| 16,000 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 2,075,885 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 2,091,885 | |
Common
stock issued to Ironridge Global IV LTD | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 974,399,306 | | |
| 974,399 | | |
| 27,860 | | |
| (561,518 | ) | |
| - | | |
| - | | |
| - | | |
| 440,741 | |
Net
loss | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (3,768,859 | ) | |
| (3,768,859 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
December 31, 2013
(as restated) | |
| 7,790,000 | | |
| 7,790 | | |
| 150 | | |
| - | | |
| 16,000,000 | | |
| 16,000 | | |
| - | | |
| - | | |
| 2,789,513,042 | | |
| 2,789,513 | | |
| 14,991,494 | | |
| 10,000 | | |
| (1,116,000 | ) | |
| (80,000 | ) | |
| (16,694,068 | ) | |
| (75,271 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Conversion
of Series A1 preferred stock into common stock | |
| (5,000,000 | ) | |
| (5,000 | ) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 150,000,000 | | |
| 150,000 | | |
| (145,000 | ) | |
| - | | |
| | | |
| - | | |
| - | | |
| - | |
Conversion
of Series A2 preferred stock into common stock | |
| - | | |
| - | | |
| (25 | ) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 1,435,738,562 | | |
| 1,435,738 | | |
| 2,173,180 | | |
| 869,906 | | |
| - | | |
| - | | |
| - | | |
| 4,478,824 | |
Preferred
stock issued for cash | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 5,000 | | |
| 5 | | |
| - | | |
| - | | |
| 4,999,995 | | |
| - | | |
| (4,400,000 | ) | |
| - | | |
| - | | |
| 600,000 | |
Common
stock issued for convertible notes | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 410,984,849 | | |
| 410,985 | | |
| (305,985 | ) | |
| - | | |
| - | | |
| - | | |
| - | | |
| 105,000 | |
Reclass
of derivative liability upon conversion of corresponding note | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 170,332 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 170,332 | |
Common
stock issued for services and stock based compensation | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 151,754,386 | | |
| 151,754 | | |
| 22,983 | | |
| 135,000 | | |
| - | | |
| 80,000 | | |
| - | | |
| 389,737 | |
Common
stock issued for financing | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 82,217,378 | | |
| 82,218 | | |
| 127,592 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 209,810 | |
Common
stock returned from prior management | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (60,000,000 | ) | |
| (60,000 | ) | |
| 60,000 | | |
| - | | |
| | | |
| - | | |
| - | | |
| - | |
Net
loss | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (6,615,965 | ) | |
| (6,615,965 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
December
31, 2014 | |
| 2,790,000 | | |
$ | 2,790 | | |
| 125 | | |
$ | - | | |
| 16,000,000 | | |
$ | 16,000 | | |
| 5,000 | | |
$ | 5 | | |
| 4,960,208,217 | | |
$ | 4,960,208 | | |
$ | 22,094,591 | | |
$ | 1,014,906 | | |
$ | (5,516,000 | ) | |
$ | - | | |
$ | (23,310,033 | ) | |
$ | (737,533 | ) |
The
accompanying notes are an integral part of these financial statements.
RAPID
FIRE MARKETING, INC
Statements
of Cash Flows
For
the Years Ended December 31, 2014 and 2013
| |
Year
Ended
December 31, 2014 | | |
Year
Ended
December 31, 2013 | |
CASH
FLOWS FROM OPERATING ACTIVITIES: | |
| | | |
| (as
restated) | |
Net
loss | |
$ | (6,615,965 | ) | |
$ | (3,768,859 | ) |
Adjustments
to reconcile net loss to net cash used in operating activities: | |
| | | |
| | |
Day
one charge and loss on change in fair market value of derivative liabilities | |
| 130,155 | | |
| - | |
Common
stock issued for services and stock based compensation | |
| 389,737 | | |
| 398,333 | |
Series
B preferred stock issued for services | |
| - | | |
| 2,091,885 | |
Fair
market value of common stock issued in connection with Series A preferred stock dividends | |
| 4,478,824 | | |
| - | |
Amortization
of discount on convertible notes payable | |
| 194,233 | | |
| - | |
On
issuance discount on convertible notes payable | |
| 10,000 | | |
| - | |
Loss
on shares issued in excess of liabilities settled | |
| - | | |
| 424,741 | |
Changes
in operating assets and liabilities: | |
| | | |
| | |
Accrued
interest receivable | |
| (35,435 | ) | |
| (12,732 | ) |
Prepaid
expenses | |
| (22,500 | ) | |
| 182,904 | |
Inventory | |
| 90,441 | | |
| 14,712 | |
Deposits on Inventory | |
| - | | |
| 110,175 | |
Other
assets | |
| 209,810 | | |
| - | |
Accounts
payable and accrued liabilities | |
| 447,779 | | |
| 199,970 | |
Net
cash used in operating activities | |
| (722,921 | ) | |
| (358,871 | ) |
| |
| | | |
| | |
CASH
FLOWS FROM FINANCING ACTIVITIES: | |
| | | |
| | |
Proceeds
from convertible notes payable | |
| 125,000 | | |
| 9,500 | |
Proceeds
received from stock subscription | |
| 600,000 | | |
| 350,000 | |
Net
cash provided by financing activities | |
| 725,000 | | |
| 359,500 | |
| |
| | | |
| | |
Change
in cash and cash equivalents | |
| 2,079 | | |
| 629 | |
Cash
and cash equivalents, beginning of period | |
| 2,351 | | |
| 1,722 | |
Cash
and cash equivalents, end of period | |
$ | 4,430 | | |
$ | 2,351 | |
| |
| | | |
| | |
Supplemental
disclosures of cash flow information: | |
| | | |
| | |
Cash
paid for interest | |
$ | - | | |
$ | - | |
Cash
paid for income taxes | |
$ | - | | |
$ | - | |
| |
| | | |
| | |
Non-cash
investing and financing activities: | |
| | | |
| | |
Conversion
of notes payable to common stock | |
$ | 105,000 | | |
$ | - | |
Conversion
of preferred stock into common stock | |
$ | 5,000 | | |
$ | 3,000 | |
Conversion
of accounts payable into convertible note | |
$ | 82,500 | | |
$ | - | |
Issuance
of common stock accounted for as deferred offering costs | |
$ | 209,810 | | |
$ | - | |
Increase
in subscription receivable | |
$ | 5,000,000 | | |
$ | - | |
Discount
on convertible notes payable | |
$ | 217,500 | | |
$ | - | |
Issuance
of common stock accounted for as a prepaid | |
$ | 135,000 | | |
$ | - | |
The
accompanying notes are an integral part of these financial statements.
RAPID
FIRE MARKETING, INC
Notes
to Financial Statements
December
31, 2014 and 2013
Note
1 – Organization and Description of Business
Organization
Rapid
Fire Marketing, Inc. (the “Company” or “RFMK”) was incorporated under the laws of the state of Delaware
in 1989 as G.D.E. Search Corporation. In 2001, the Company changed its name to N-Vision Technology. In July 2007, the Company
changed its name to Rapid Fire Marketing, Inc.
Description
of Business
The
Company is a developer and reseller of herbal vaporizers. The core strategy is to maximize revenues in the rapidly expanding vaporizer
industry. The Company currently sells the CANNAcig and Cumulus personal vapor inhalers. Beginning in February of 2013, the Company
began developing a dry herbal vaporizer. The dry herbal vaporizer was in development and testing as of the end of June 30, 2014
and is expected to be available by early to mid 2015.
Going
Concern
The
Company has limited working capital, has incurred losses in each of the past two years, and has not yet received material revenues
from sales of products or services. These factors create substantial doubt about the Company’s ability to continue as a
going concern. The financial statements do not include any adjustment that might be necessary if the Company is unable to continue
as a going concern.
The
ability of RFMK to continue as a going concern is dependent on the Company generating cash from the sale of its common stock and/or
obtaining debt financing and attaining future profitable operations. During the year ended December 31, 2014, the Company funded
operations through the receipt of $100,000 in convertible notes payable, $550,000 in connection with proceeds received in connection
with the sale of Series A2 Convertible Preferred stock and $50,000 in connection with the sale of Series C Convertible Preferred
stock. As of December 31, 2014, the Company still have subscriptions receivable from sales of Series A2 Convertible Preferred
stock and Series C Convertible Preferred stock of $566,000 and $4,950,000, respectively. Subsequent to year end, the Company has
received $100,000 in proceeds related to Series A2 Convertible Preferred stock. Management’s plans include collecting on
the remaining sales of Series A2 Convertible Preferred stock and Series C Convertible Preferred stock, selling its equity securities
and obtaining debt financing to fund its capital requirement and ongoing operations; however, there can be no assurance the Company
will be successful in these efforts.
The
financial statements have been prepared on a going concern basis which contemplates the realization of assets and the settlement
of liabilities in the normal course of business. The financial statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets and liabilities that might result from the outcome of this uncertainty.
Risks
and Uncertainties
The
Company has a limited operating history and has not generated significant revenues from our planned principal operations.
The
Company’s business and operations are sensitive to general business and economic conditions in the U.S. and worldwide. These
conditions include short-term and long-term interest rates, inflation, fluctuations in debt and equity capital markets and the
general condition of the U.S. and world economy. A host of factors beyond the Company’s control could cause fluctuations
in these conditions, including the political environment and acts or threats of war or terrorism. Adverse developments in these
general business and economic conditions, including through recession, downturn or otherwise, could have a material adverse effect
on the Company’s financial condition and the results of its operations.
The
Company currently has minimal sales and limited marketing and/or distribution capabilities. The Company has limited experience
in developing, training or managing a sales force and will incur substantial additional expenses if we decide to market any of
our current and future products. Developing a marketing and sales force is also time consuming and could delay launch of our future
products. In addition, the Company will compete with many companies that currently have extensive and well-funded marketing and
sales operations. Our marketing and sales efforts may be unable to compete successfully against these companies. In addition,
the Company has limited capital to devote sales and marketing.
The
Company’s industry is characterized by rapid changes in technology and customer demands. As a result, the Company’s
products may quickly become obsolete and unmarketable. The Company’s future success will depend on its ability to adapt
to technological advances, anticipate customer demands, develop new products and enhance our current products on a timely and
cost-effective basis. Further, the Company’s products must remain competitive with those of other companies with substantially
greater resources. The Company may experience technical or other difficulties that could delay or prevent the development, introduction
or marketing of new products or enhanced versions of existing products. Also, the Company may not be able to adapt new or enhanced
products to emerging industry standards, and the Company’s new products may not be favorably received. Nor may we have the
capital resources to further the development of existing and/or new ones.
The
Company’s operations are subject to new innovations in product design and function. Significant technical changes can have
an adverse effect on product lives. Design and development of new products are important elements to achieve and maintain profitability
in the Company’s industry segment. The Company may be subject to federal, state and local environmental laws and regulations.
The Company does not anticipate expenditures to comply with such laws and does not believe that regulations will have a material
impact on the Company’s financial position, results of operations, or liquidity. The Company believes that its operations
comply, in all material respects, with applicable federal, state, and local environmental laws and regulations
Note
2 – Summary of Significant Accounting Policies
Basis
of Presentation
The
financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United
States of America and are presented in US dollars.
Use
of Estimates
The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Cash
and Cash Equivalents
The
Company considers all cash on hand and in banks, including accounts in book overdraft positions, certificates of deposit and other
highly- liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents.
Inventory
Inventory
consists of two finished products, the CANNAcig Vapor Inhaler and the Cumulus Vapor Inhaler, which are valued at the lower of
cost or market valuation under the first-in, first-out method of costing. In addition, deposits on inventory consist of monies
advanced to the contract manufacturer in connection with the production of our new dry herbal vaporizer which expected to be put
into production in early 2015.
Product
obsolescence may be caused by changes in technology, discontinuance of a product line, replacement products in the marketplace
or other competitive situations. The Company maintains a reserve on inventories that are considered to be slow moving or obsolete,
to reduce the inventory to their net estimated realizable value. Once specific inventory is written-down, the write-down is permanent
until the inventory is physically disposed of. During the year ended December 31, 2014, the Company recorded an obsolescence reserve
of $89,563 due to lack of current sales and our an anticipated new product line to be issued in 2015.
Property
and Equipment
Property
and equipment are stated at cost. Major improvements and betterments are capitalized. Maintenance and repairs are expensed as
incurred. Depreciation is computed using the straight-line method over the estimated useful life. At the time of retirement or
other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any resulting
gain or loss is reflected in the statements of operations as other gain or loss, net.
Revenue
Recognition
The
Company generates revenue from the product sales of the CANNAcig Vapor Inhaler and the Cumulus Vapor Inhaler product sales of
Bionic cigarettes revenue is recognized when the purchase is complete and shipment has occurred.
Shipping
and handling fees and costs incurred are included as an offset to general and administrative expenses. The amount of revenue received
for shipping and handling is less than 5% of revenues for all periods presented.
Sales
tax collected from customers is not recorded as revenue. Sales tax collected is included in accounts payable until remitted to
the taxing authorities.
Research
and Development
All
research and development costs, including licensing costs, are charged to expense as incurred. In accordance with this policy,
all costs associated with the design, development and testing of the Company’s products have been expensed as incurred.
Stock-Based
Compensation
The
Company follows ASC 718-10, “Stock Compensation”, which addresses the accounting for transactions in which an entity
exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee
services in share-based payment transactions. ASC 718-10 requires measurement of the cost of employee services received in exchange
for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). Incremental compensation
costs arising from subsequent modifications of awards after the grant date must be recognized. The Company has not adopted a stock
option plan and has not granted any stock options. The Company granted stock awards, at market value, to its advisors for services
rendered. Accordingly, stock-based compensation has been recorded to date.
Income
Taxes
Income
taxes are provided in accordance with ASC 740, “Income Taxes”, which requires an asset and liability approach for
the financial accounting and reporting of income taxes. Current income tax expense (benefit) is the amount of income taxes expected
to be payable (receivable) for the current year. A deferred tax asset and/or liability is computed for both the expected future
impact of differences between the financial statement and tax bases of assets and liabilities and for the expected future tax
benefit to be derived from tax loss and tax credit carry forwards. Deferred income tax expense is generally the net change during
the year in the deferred income tax asset and liability. Valuation allowances are established when necessary to reduce deferred
tax assets to the amount expected to be “more likely than not” realized in future tax returns. Tax rate changes and
changes in tax law are reflected in income in the period such changes are enacted.
Fair
Value of Financial Instruments
Fair
value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants as of the measurement date. The guidance also establishes a hierarchy for inputs
used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring
that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing
the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs
are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or
liability. The guidance establishes three levels of inputs that may be used to measure fair value:
Level
1. Observable inputs such as quoted prices in active markets;
Level
2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
Level
3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
The
Company did not have any level 1 or level 3 financial instruments at December 31, 2014 and 2013. As of December 31, 2014, the
derivative liabilities were considered a level 2 item; see Note 3. As of December 31, 2013, the Company had no level 2 financial
instruments.
The
carrying amounts reported in the accompanying financial statements for current assets and current liabilities approximate the
fair value because of the immediate or short term maturities of the financial instruments.
Earnings
(Loss) per Share
Basic
earnings (loss) per share are computed by dividing the net income (loss) by the weighted-average number of shares of common stock
and common stock equivalents (primarily outstanding shares of convertible debt, preferred stock, options and warrants). Common
stock equivalents represent the dilutive effect of the assumed exercise of the outstanding stock options and warrants, using the
treasury stock method. The calculation of fully diluted earnings (loss) per share assumes the dilutive effect of the exercise
of outstanding convertible debt, preferred stock, options and warrants at either the beginning of the respective period presented
or the date of issuance, whichever is later. As of December 31, 2014 and 2013, the Company’s dilutive securities consisted
of convertible notes payable and Series A1, Series A2 and Series C preferred stock. If the holders of the convertible notes payable,
Series A1 Preferred Stock, Series A2 Preferred Stock and Series C Preferred Stock all converted, the Company would be in excess
of their authorized shares. The outstanding dilutive securities have been excluded from the calculation of diluted net loss per
share because the effect would have been anti-dilutive for the years ended December 31, 2014 and 2013.
Note
3 – Convertible Notes Payable and Derivative Liabilities
As
of January 28, 2014, the Company had incurred amounts of $82,500 owed to Pyrenees Investments, LLC for service rendered. On January
28, 2014, the indebtedness was sold to Iconic Holdings, LLC, a third party. In connection with this sale, the Company issued a
$82,500 convertible note to the third party. The convertible note incurs interest at 10% per annum and is due January 24, 2015.
If a default is called by the lender after failure to repay principal or interest when due, among other default provisions including
untimely filings with the SEC, a default interest rate of 20% per annum is triggered and retrospectively applied from the note’s
inception date on the unpaid amount, and in addition the principal balance is increased by 150% of the face amount of the note
deemed in default. At any time the note may be converted into shares of common stock, at the lower of $0.0006 or 50% discount
off the lowest trading price for the Company’s common stock within the twenty (20) days preceding the conversion. The Company
recorded a discount totaling $82,500 related to the beneficial conversion feature embedded in the note upon issuance. See below
for discussion of derivative liabilities related to the conversion feature due to the absence of a conversion floor. In connection
with this agreement, the Company reserved 250,000,000 shares of its common stock with the transfer agent. During the year ended
December 31, 2014, the holder converted $50,000 into shares of common stock, see below for additional information.
In
February 2014 and October 2014, the Company borrowed $100,000 and $25,000, respectively, as evidenced by a convertible note issued
to Iconic Holdings as part of a total note agreement of $165,000, including a $15,000 on issuance discount, which was entered
into on January 28, 2014. The Company has yet to receive the remaining $25,000 in proceeds in which an additional $2,500 of an
issuance discount will be recorded. The convertible note incurs interest at 10% per annum and is due January 28, 2015. If a default
is called by the lender after failure to repay principal or interest when due, among other default provisions including untimely
filings with the SEC, a default interest rate of 20% per annum is triggered and retrospectively applied from the note’s
inception date on the unpaid amount, and in addition the principal balance is increased by 150% of the face amount of the note
deemed in default. At any time the note may be converted into common stock, at the lower of $0.0006 or 50% discount off the lowest
trading price for the Company’s common stock within the twenty (20) days preceding the conversion. The Company recorded
a discount totaling $137,500, which included $12,500 for the on issuance discount, related to the beneficial conversion feature
embedded in the note upon issuance. See below for discussion of derivative liabilities related to the conversion feature due to
the absence of a conversion floor. In connection with this agreement, the Company reserved 250,000,000 shares of its common stock
with the transfer agent. During the year ended December 31, 2014, the holder converted $55,000 into shares of common stock, see
below for additional information.
During
the year ended December 31, 2014, the holder converted $105,000 of principal into 410,984,849 shares of common stock. In connection
with these conversions, derivative liabilities of $170,332 were reclassed to additional paid-in capital. During the year ended
December 31, 2014, the Company amortized $194,233 of the discount to interest expense. As of December 31, 2014, a discount of
$25,767 remained which will be recognized during the year ended December 31, 2015.
Derivative
Liabilities
The
Company calculated the derivative liability using the Black-Scholes pricing model for each note upon inception and recorded the
fair market value of the derivative liability as a discount to the note. When a derivative liability associated with a convertible
note is in excess of the face value of the convertible note, the excess of fair value of derivative is charged to the statement
of operations.
During
the year ended December 31, 2014, the Company issued convertible debt with principal and OID amounts totaling $220,000. At the
inception of these notes, they were fully discounted due to value of the associated derivative liabilities. At December 31, 2014,
the aggregate remaining discounts on convertible notes to be accreted over the life of each respective note using the straight
line method are $25,767. For the year ended December 31, 2014, interest expense from accretion of the discount was $194,233.
Aggregate
derivative liabilities associated with remaining convertible notes were $177,323 as of December 31, 2014. Based on this revaluation
at year end and the revaluation of derivative liabilities measured during the period immediately before extinguishment of associated
convertible notes, the Company recognized a loss related to the day one value of the derivative liabilities of $1,045,882 and
a loss (gain) in the change of fair value of derivative liability of ($915,727) during the year ended December 31, 2014.
The
following are the weighted average variable used in determining the fair market value of the Company’s derivative liabilities
during the year ended December 31, 2014:
Date | |
January
28, 2014 | | |
February
28, 2014 | | |
September
30, 2014 | | |
December
31, 2014 | |
Closing
stock price of common stock | |
$ | 0.0017 | | |
$ | 0.0017 | | |
$ | 0.0005 | | |
$ | 0.0005 | |
Conversion
price | |
$ | 0.0002 | | |
$ | 0.0006 | | |
$ | 0.0002 | | |
$ | 0.0002 | |
Expected
life in years | |
| 1.00 | | |
| 1.00 | | |
| 0.33 | | |
| 0.08 | |
Risk
free rate | |
| 0.11 | % | |
| 0.11 | % | |
| 0.03 | % | |
| 0.03 | % |
Expected
annual volatility | |
| 294.70 | % | |
| 301.70 | % | |
| 309.90 | % | |
| 248.00 | % |
Dividend
percentage | |
| 0.00 | % | |
| 0.00 | % | |
| 0.00 | % | |
| 0.00 | % |
Note
4 – Subscriptions Receivables
As
of December 31, 2014 and 2013, the Company held 11 and 29 notes receivable (the “Series A2 Notes”) from Ironridge
Global IV, Ltd totaling $550,000 and $1,100,000, respectively, related to the sale of Series A2 Convertible Preferred Stock (see
below for rights and preferences). The principal balance outstanding under the Series A2 Notes bears interest at the rate of 1.0%
per annum. The entire unpaid principal balance, interest and any other charges due and payable under these Series A2 Notes will
become due and payable 29 months from the date of issuance (September 21, 2012) and is recorded as a reduction to Stockholders’
Equity (Deficit) on the accompanying balance sheets. The Series A2 Notes shall be deemed not due and payable should the Company
not have either 1) a registration statement on file and effective with the SEC covering the underlying common shares issuable
as a result of the Preferred Shares, or 2) that the underlying common shares are eligible for trading under the then current Rule
144 as promulgated by the Securities of Act of 1933, as amended. The Company is also required to maintain adequate coverage of
authorized shares, and must have the ability to issue common shares to the holder of the preferred shares in electronic format.
Other customary events of default also apply. As of December 31, 2014 and 2013, approximately $550,000 and $1,100,000, respectively,
of the Series A2 Notes balance remained unpaid. During the years ended December 31, 2014 and 2013, the Company received $550,000
and $350,000, respectively, in proceeds related to the payment of the Series A2 Notes and recorded interest income of $8,155 and
$12,322, respectively. In addition, subscription receivables includes $16,000 in excess common stock in which was issued to the
holders of Series A2 Notes which needs to be remitted by the holder.
On
March 27, 2014, the Company entered into an agreement with the same party discussed above for the issuance of 100 notes receivable
(the “Series C Notes”) from one issuer totaling $5,000,000 related to the sale of Series C Convertible Preferred Stock
(see below for rights and preferences). The principal balance outstanding under the Series C Notes bears interest at the rate
of 1.0% per annum. The entire unpaid principal balance, interest and any other charges due and payable under these Series C Notes
will become due and payable 82 weeks from the date of issuance and is recorded as a reduction to Stockholders’ Equity on
the accompanying balance sheet. The Series C Notes deemed not due and payable should the Company not have either 1) a registration
statement on file and effective with the SEC covering the underlying common shares issuable as a result of the preferred shares,
or 2) that the underlying common shares are eligible for trading under the then current Rule 144 as promulgated by the Securities
of Act of 1933, as amended. The Company is also required to maintain adequate coverage of authorized shares, and must have the
ability to issue common shares to the holder of the preferred shares in electronic format. Other customary events of default also
apply. As of December 31, 2014, $4,950,00 of the Series C Notes balance remained unpaid. During the year ended December 31, 2014,
the Company received $50,000 in proceeds related to the payment on the Series C Notes. Additional, proceeds are dependent upon
the Company maintaining sufficient authorized shares.
Note
5 – Stockholders’ Equity
Preferred
Stock
Series
A1 Preferred Stock
On
September 6, 2011, the Company filed a Certificate of Designation of Series A1 Convertible Preferred Stock (“Series A1”)
with the Secretary of State of Nevada. Pursuant to the Series A1 Certificate of Designation, the Company designated 25,000,000
shares of its blank check preferred stock as Series A1 Preferred Stock. The Series A1 Preferred Stock ranks senior to the common
stock (the “Junior Stock”). The Series A1 Preferred Stock can be converted at anytime into 30 common shares per one
preferred share. In the event of a liquidation, the Series A1 Preferred Stock will be entitled to a liquidation at the same as
common stock. The Series A1 Preferred Stock has no voting rights.
Series
A2 Preferred Stock
On
October 5, 2012, the Company filed a Certificate of Designation of Series A2 Convertible Preferred Stock (“Series A2”)
with the Secretary of State of Nevada. Pursuant to the Series A2 Certificate of Designation, the Company designated 300 shares
of its blank check preferred stock as Series A2 . The Series A2 ranks senior to the common stock and any subsequently created
series of preferred stock that does not expressly rank pari passu with or senior to the Series A2 (the “Junior Stock”).
The Series A2 can be converted at anytime and has a fixed conversion price of $0.00225 per common share. The Series A2 is entitled
to minimum six years worth of dividends accruing at a rate of 8.5% per annum potentially increasing to 18% per annum under certain
circumstances such as a significant decrease in the price of the Company’s common stock. Dividends are payable in cash or
in shares of common stock valued at 85.0% of the closing market price of the Company’s common stock for any trading day
following the issuance date of the Series A2. In the event of a liquidation, the Series A2 will be entitled to a payment of the
Stated Value of $10,000 per share plus any accrued but unpaid dividends prior to any payments being made in respect of the Junior
Stock. The holders of Series A2 do not have voting rights, except for shares in which have already been converted into shares
of common stock.
On
January 8, 2014, the holder converted 10 Series A2 shares into 44,444,444 shares of common stock. In addition, under the terms
of the Series A2 the holder was entitled to immediate payment of dividends on the $100,000 stated value of the Series A2 at an
annual dividend rate of 18% rate, which is an increase over the stated 8.5% due to adjustments related to the decrease in the
fair market value of the Company’s common stock, for a period of six years resulting in dividends payable of $108,000. The
holder elected to convert the dividends to common stock based upon 85% of the closing market price as disclosed above resulting
in a conversion price of $0.00017 with 635,294,118 common shares being issued. On the date of conversion, the fair market value
of the dividend shares issued was $1,334,118 based upon the closing market price of the Company’s common stock. Thus, the
Company recorded additional expense of $1,334,118 in connection with the dividend shares issued.
On
February 11, 2014, the holder converted 15 Series A2 shares into 66,666,666 shares of common stock. In addition, under the terms
of the Series A2 the holder was entitled to immediate payment of dividends on the $150,000 stated value of the Series A2 at an
annual dividend rate of 18% rate, which is an increase over the stated 8.5% due to adjustments related to the decrease in the
fair market value of the Company’s common stock, for a period of six years resulting in dividends payable of $162,000. The
holder elected to convert the dividends to common stock based upon 85% of the closing market price as disclosed above resulting
in a conversion price of $0.00017 with 952,941,176 common shares to be issued. On the date of conversion, the fair market value
of the dividend shares issued was $3,144,706 based upon the closing market price of the Company’s common stock. Thus, the
Company recorded additional expense of $3,144,706 in connection with the dividend shares issued. During the year ended December
31, 2014, the Company has issued 756,000,000 shares of common stock relieving the “Shares to Be Issued” account by
$2,341,467. As of December 31, 2014, the Company has recorded within stockholders’ equity “Shares to Be Issued”
of $869,906 as 263,607,842 common shares have not been delivered due to the 9.99% ownership limitation placed on the shareholders.
During the years ended December 31, 2014 and 2013, the Company accrued dividends related to the Series A2 shares of $104,543 and
$126,140, respectively. As of December 31, 2014 and 2013, accrued Series A2 dividends recorded within accounts payable and accrued
liabilities on the accompanying balance sheet were $230,683 and $126,140, respectively.
Series
B Preferred Stock
On
February 28, 2013, the Company filed a Certificate of Designation of Series B Convertible Preferred Stock (“Series B”)
with the Secretary of State of Nevada. Pursuant to the Series B Certificate of Designation, the Company designated 16,000,000
shares of its blank check preferred stock as Series B. The Series B ranks senior to the common stock and any subsequently created
series of preferred stock that does not expressly rank pari passu with or senior to the Series B (the “Junior Stock”).
The Series B cannot be converted into any other securities and does not receive dividends. Each share of Series B shall have voting
rights equal to that of 2,000 shares of common stock. In the event of a liquidation, the Series B will be entitled to net assets
on a pro rata basis.
On
March 1, 2013, the Company issued its Chief Executive Officer 16,000,000 shares of Series B Preferred Stock. The only rights the
holder under the Series B has relates to voting control of the Company, which prior to the issuance the Chief Executive Officer,
was the only officer and Board of Director member and already could make significant decisions, however, the Chief Executive Officer
lacked voting control due to limited equity holdings in the Company. The issuance transferred voting control of the Company to
the Chief Executive Officer. The Company determine the fair market value of the Series B to be $2,091,885 based upon the 61.65%
of the Company’s market capitalization on the date of the issuance. The percentage used in the calculation reflects a fully
diluted basis at the time of the agreement.
Series
C Preferred Stock
On
March 27, 2014, the Company filed a Certificate of Designation of Series C Convertible Preferred Stock (“Series C”)
with the Secretary of State of Nevada. Pursuant to the Series C Certificate of Designation, the Company designated 5,000 shares
of its blank check preferred stock as Series C. The Series C ranks senior to the common stock and any subsequently created series
of preferred stock that does not expressly rank pari passu with or senior to the Series C (the “Junior Stock”) and
pari passu in rights to dividends and liquidation to the Series A2 and junior to all existing and future indebtedness of the Company.
The Series C can be converted at anytime and has a fixed conversion price of $0.01 per common share. The Series C is entitled
to minimum six years worth of dividends accruing at a rate of 8.5% per annum potentially increasing to 18% per annum under certain
circumstances such as a significant decrease in the price of the Company’s common stock. Dividends are payable in cash or
in shares of common stock valued at 85.0% of the closing market price of the Company’s common stock for any trading day
following the issuance date of the Series C. In the event of a liquidation, the Series C will be entitled to a payment of the
Stated Value of $10,000 per share plus any accrued but unpaid dividends prior to any payments being made in respect of the Junior
Stock. The holders of Series C do not have voting rights, except for shares in which have already been converted into shares of
common stock. During the year ended December 31, 2014, the Company issued 5,000 shares of Series C for a subscription receivable
of $5.0 Million; see Note 4 for additional information. During the year ended December 31, 2014, the Company accrued dividends
related to the Series C shares of $320,430 of which were also included within accounts payable and accrued liabilities on the
accompanying financial statements.
Common
Stock
On
November 3, 2014, the State of Nevada approved to increase the Company’s authorized shares from 5 billion to 20 billion.
During
the year ended December 31, 2014, the Company issued 1,754,386 shares of common stock valued at $4,737 based upon the closing
market price of the Company’s common stock on the date of the agreement to a third party for the rights to future royalties
related to Global Specialty Products, Inc.’s MicroRoasters brand.
In
addition, the Company amortized $60,000 of deferred compensation related to common stock granted during the year ended December
31, 2013 which is being expensed over the service period. As of December 31, 2014, the Company had $0 of amortization remaining.
Additionally,
during the year ended December 31, 2014, the Company issued 50,000,000 shares of common stock valued at $135,000 based upon the
closing market price of the Company’s common stock on the on the date of the agreement to a third party for sales and marketing
services. The fair market value of the common stock issued was recorded as prepaid expenses and is being amortized over the contract
period of one year. During the year ended December 31, 2014, the Company amortized $112,500 to sales and marketing on the accompanying
statement of operations. As of December 31, 2014, the remaining prepaid is $22,500. In addition, as of the date of this filing
the common stock has not been issued and thus the value of $135,000 is recorded within stock to be issued on the accompanying
balance sheet.
On
January 27, 2014, the Company entered into a settlement with the prior management whereby prior management agreed to return 60,000,000
shares of the Company’s common stock previously issued to them for services rendered. In return, the Company has agreed
to release prior management from any claims related to all costs deemed of a non-business nature. The Company accounted for the
shares at their par value of $60,000 reducing common stock by that amount with the reclass to additional paid in capital. Upon
return, the common stock was cancelled by the transfer agent and reflected in our calculation of weighted average shares for the
year ended December 31, 2014 as of the date of the agreement.
During
the years ended December 31, 2014 and 2013, the Company recorded compensation expense of $170,000 and $318,333, respectively related
to common stock issued under the Chief Executive Officer’s employment agreement. During the year ended December 31, 2014,
the Company issued 100,000,000 shares of common stock due under the employment agreement. The shares were valued on date of the
agreement being amortized over the term. Expected future compensation to be recorded during the years ended December 31; $170,000
for 2015 and $56,667 for 2016.
During
the year ended December 31, 2014, the Company issued 150,000,000 shares of common stock in connection with the conversion of 5,000
shares of Series A1 Preferred Stock with a carrying value of $5,000 held by the former Chief Executive Officer.
During
the year ended December 31, 2013, the Company issued 780,000,000 shares of common stock. Of this amount 43,089,214 shares were
issued for services; 90,000,000 shares of stock were issued from the conversion of 3,000,000 shares of preferred stock, and the
balance of 646,910,786 shares were issued for a settlement of debt valued at $561,518 of which $349,355 was recorded as a loss
on shares issued.
Ironridge
Global IV, Ltd.
On
September 19, 2012, the Supreme Court of the State of California for the County of Los Angeles Central District (the “Court”),
entered an order (the “Order”) approving, among other things, the fairness of the terms and conditions of an exchange
pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended (the “Securities Act”), in accordance with
a stipulation of settlement (the “Settlement Agreement”) between the Company, and Ironridge Global IV, Ltd. (“Ironridge”),
in the matter entitled Ironridge Global IV, Ltd. v. Rapid Fire Marketing, Inc., Case No. BC 490059 (the “Action”).
Ironridge commenced the Action against the Company to recover an aggregate of $643,133 of past-due accounts payable of the Company,
plus fees and costs (the “Claim”). The Order provides for the full and final settlement of the Claim and the Action.
The Settlement Agreement became effective and binding upon the Company and Ironridge upon execution of the Order by the Court
on September 19, 2012. The amounts due to Ironridge had previously been recorded within accounts payable but were reclassed to
common stock to be issued within stockholders’ equity upon settlement as the obligation was to be settled in shares of common
stock. Upon issuance of common stock, the Company determines the fair market value of the common shares issued based upon the
closing market price of the Company’s common stock. The fair value of the common stock issued in excess of the reduction
of the liability is recorded as a loss on common shares issued. The Company periodically issued common shares to Ironridge (up
to their ownership percentage so as not to exceed 9.99%) until all amounts were paid in full.
The
issuance of common stock to Ironridge pursuant to the terms of the Settlement Agreement approved by the Order is exempt from the
registration requirements of the Securities Act pursuant to Section 3(a)(10) thereof, as an issuance of securities in exchange
for bona fide outstanding claims, where the terms and conditions of such issuance are approved by a court after a hearing upon
the fairness of such terms and conditions at which all persons to whom it is proposed to issue securities in such exchange shall
have the right to appear. See Note 4 for discussion of additional transactions with Ironridge.
In
connection with the Ironridge matter described above, as well as other negotiated settlements, the Company recognized a loss on
the share issuance in the amount of $424,741 during the year ended December 31, 2013 in connection with the issuance of 974,399,306
shares of common stock. As of December 31, 2013, no additional common shares were issuable as the settlement amount had been fully
satisfied.
Equity
Line of Credit
On
February 28, 2014, the Company, entered into an Equity Line of Credit (the “Equity Line of Credit”) with Iconic Holdings,
LLC (“Iconic”). Pursuant to the Equity Line of Credit, Iconic committed to purchase up to $2,000,000 of the Company’s
common stock over twenty-four months from the first day following the effectiveness of a registration statement, subject to certain
conditions.
As
soon as the Company has an effective registration statement in place, the Company may draw on the facility from time to time,
as and when it determines appropriate in accordance with the terms and conditions of the related Equity Line of Credit. The Company
has not yet filed a registration statement registering the shares and therefore, it has not yet sold any shares under the Equity
Line of Credit. The purchase price will be 85% of the lowest trading price of the Company’s common stock during the five
(5) consecutive trading day period beginning on the trading day immediately following the date of delivery of the applicable put
notice. The maximum amount that the Company is entitled to put in on any one notice shall be any amount up to the greater of 1)
the average of the trading dollar volume of the Company’s common stock during the ten (10) trading days preceding the request
or 2) $100,000. Iconic is not obligated to purchase shares if its total number of shares beneficially held at that time would
exceed 4.99% of the number of shares of the Company’s outstanding common stock as determined in accordance with Rule 13d-1
of the Securities Exchange Act of 1934, as amended. In addition, the Company is not permitted to draw on the facility unless there
is an effective registration statement to cover the resale of the shares, which it does not currently have in place.
Pursuant
to the terms of a Registration Rights Agreement between the Company and Iconic, the Company is obligated to file a registration
statement with the SEC to register the resale by Iconic of shares of the common stock underlying the Investment Agreement and
it has not yet done so.
In
addition, under the terms of the Equity Line of Credit the Company was required to issue Iconic 10% of the total commitment amount
in restricted common stock as a commitment fee. To date the Company issued 82,217,378 shares of common stock valued at $209,810
based upon the closing market price of the Company’s common stock on the date of the agreement. The Company initially recorded
the value of such common stock as a deferred offering cost and expected to offset the amount against future proceeds received
in connection with Equity Line of Credit. As of December 31, 2014, no proceeds have been received under the Equity Line of Credit
and the Company determined that future proceeds were not probable. Thus, the amount was written off as general and administrative
expense at December 31, 2014.
Note
6 – Related Party Transactions
On
March 28, 2013, the Company executed a 3% convertible note with a shareholder for $9,500 due within one year. The note is convertible
into the Company’s common stock at a rate of $0.001 per share subject to various adjustments due to stock splits, change
in control, etc. As of December 31, 2014, the note was in default, however, a demand for payment has not been received.
On
November 29, 2012, the Company executed a 3% convertible note with a shareholder for $14,000 due within one year. The note is
convertible into the Company’s common stock at the lesser of $0.001 per share (subject to various adjustments due to stock
splits, change in control, etc) or a 20% discount to the current bid price on the date of conversion. As of December 31, 2014,
the note was in default, however, a demand for payment has not been received.
As
of December 31, 2014, amounts due to our Chief Executive Officer for salary payable recorded within Accounts Payable on the accompanying
balance sheet were $30,430.
See
Note 5 for Series B and common stock issued to the Chief Executive Officer.
Note
7 – Commitments
The
Company neither owns nor leases any real or personal property. The Company’s Chief Executive Officer provides office services
without charge. There is no obligation for the officer to continue this arrangement. Such costs are immaterial to the financial
statements and accordingly are not reflected herein. The officers and directors are involved in other business activities and
most likely will become involved in other business activities in the future. In addition, the Company uses a third party fulfiller
to house and procure their sales based upon a monthly fee schedule.
Note
8 – Income Taxes
For
the years ended December 31, 2014 and 2013, the Company has incurred net losses before and, therefore, has no tax liability. The
net deferred tax asset generated by the loss carry-forward has been fully reserved. The cumulative net operating loss carry-forward
from is approximately $15,570,000 and $14,158,000 at December 31, 2014 and 2013, respectively, and will expire beginning in the
year 2028. The primary difference between the Company’s statutory and effective tax rate relates to permanent differences
for items in which are not deductible for tax purposes.
The
provision for Federal income tax consists of the following for the years ended December 31, 2014 and 2013:
| |
December
31, 2014 | | |
December
31, 2013 | |
Federal
income tax benefit attributable to: | |
| | |
| |
Current
operations | |
$ | 480,009 | | |
$ | 419,050 | |
Less:
valuation allowance | |
| (480,009 | ) | |
| (419,050 | ) |
Net
provision of income taxes | |
$ | - | | |
$ | - | |
The
cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows as
of December 31, 2014 and 2013:
| |
December
31, 2014 | | |
December
31, 2013 | |
Deferred
tax asset attributable to: | |
| | | |
| | |
Net
operating loss carryforward | |
$ | 5,293,630 | | |
$ | 4,813,621 | |
Less:
valuation allowance | |
| (5,293,630 | ) | |
| (4,813,621 | ) |
Net
deferred tax asset | |
$ | - | | |
$ | - | |
Due
to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards of approximately $15,570,000
for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating
loss carry forwards may be limited as to use in future years.
The
Company has identified the United States Federal tax returns as its “major” tax jurisdiction. The United States Federal
return years 2010 through 2014 are still subject to tax examination by the United States Internal Revenue Service; however, we
do not currently have any ongoing tax examinations. The Company is subject to examination by the California Franchise Tax Board
for the years ended 2010 through 2014 and currently does not have any ongoing tax examinations.
Note
9 – Restatement
The
Company has amended the year ended December 31, 2013 for the following transactions:
The
Series A2 is entitled to dividends accruing at a rate of 8.5%. During the year ended December 31, 2013, the Company did not accrue
the dividends. Thus, the Company recorded an adjustment of $126,140 to accounts payable and accrued liabilities with interest
expense as the offset during the year ended December 31, 2013 to correct this error.
On
March 1, 2013, the Company issued its Chief Executive Officer 16,000,000 shares of Series B Preferred Stock. The Company determine
the fair market value of the Series B to be $2,091,885, see Note 5 for additional information. The transactions wasn’t initially
accounted for during the year ended December 31, 2013.
The
Company incorrectly accounted for shares to be issued under the Chief Executive Officer’s employment agreement. To correct,
the Company recorded compensation expense of $318,333 during the year ended December 31, 2013. See Note 5.
Balance
Sheet:
| |
Originally
Filed | | |
| | |
As
Restated | |
| |
Year
Ended | | |
| | |
Year
Ended | |
| |
December
31, 2013 | | |
Adjustments | | |
December
31, 2013 | |
| |
| | |
| | |
| |
Accounts
payable and accrued liabilities | |
$ | 179,540 | | |
$ | 126,140 | | |
$ | 305,680 | |
Total
liabilities | |
$ | 203,040 | | |
$ | 126,140 | | |
$ | 329,180 | |
| |
| | | |
| | | |
| | |
Preferred
stock | |
$ | 7,790 | | |
$ | 16,000 | | |
$ | 23,790 | |
Additional
paid in capital | |
| 12,597,276 | | |
| 2,394,218 | | |
| 14,991,494 | |
Accumulated
deficit | |
| (14,157,710 | ) | |
| (2,536,358 | ) | |
| (16,694,068 | ) |
Total
stockholders’ equity (deficit) | |
$ | 50,869 | | |
| (126,140 | ) | |
$ | (75,271 | ) |
Statement
of Operations:
| |
Originally
Filed | | |
| | |
As
Restated | |
| |
Year
Ended | | |
| | |
Year
Ended | |
| |
December
31, 2013 | | |
Adjustments | | |
December
31, 2013 | |
Stock
for services | |
$ | 80,000 | | |
$ | 2,410,218 | | |
$ | 2,490,218 | |
Interest
expense | |
| 674 | | |
| 126,140 | | |
| 126,814 | |
Net
loss | |
$ | (1,232,501 | ) | |
$ | (2,536,358 | ) | |
$ | (3,768,859 | ) |
Basic
and diluted loss per share | |
$ | (0.00 | ) | |
$ | - | | |
$ | (0.00 | ) |
Weighted
average shares outstanding | |
| 2,169,422,459 | | |
| - | | |
| 2,169,422,459 | |
Statement
of Cash Flows:
| |
Originally
Filed | | |
| | |
As
Restated | |
| |
Year
Ended | | |
| | |
Year
Ended | |
| |
December
31, 2013 | | |
Adjustments | | |
December
31, 2013 | |
Net
loss | |
$ | (1,232,501 | ) | |
| (2,536,358 | ) | |
$ | (3,768,859 | ) |
Stock
for services | |
| 80,000 | | |
| 2,410,218 | | |
| 2,490,218 | |
Accounts
payable and accrued liabilities | |
| 73,830 | | |
| 126,140 | | |
| 199,970 | |
Net
cash used in operating activities | |
$ | (358,871 | ) | |
$ | - | | |
$ | (358,871 | ) |
Note
10 – Subsequent Events
Subsequent
to year end, the Company received $100,000 in proceeds related to Series A2 Convertible Preferred stock.
Subsequent
to year end, the Company issued 562,941,177 shares of common stock in connection with conversions of Series A2. Of these 66,666,667
shares of common stock was owed under a February 2014 conversion.
Subsequent
to year end, the Company issued 251,166,667 shares of common stock in connection with conversions of Series A1.
Subsequent
to year end, the Company issued 831,755,454 shares of common stock in connection with conversions of convertible notes payable.
In
accordance with ASC 855-10, the Company has analyzed its operations subsequent to December 31, 2014 through the date these financial
statements were issued and has determined that it does not have any material subsequent events to disclose in these financial
statements other than the events described above.
ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
On
July 28, 2014, Silberstein Ungar, PLLC (the “Former Accountant”) notified the Company that its principals joined the
accounting firm of KLJ & Associates, LLP. As a result of the transaction, on July 28, 2014, the Former Accountant resigned
as the Company’s independent registered public accounting firm and the Company engaged KLJ & Associates, LLP (the “New
Accountant”) as the Company’s independent registered public accounting firm. The engagement of the New Accountant
was approved by the Company’s Board of Directors.
The
Former Accountant’s audit reports on the financial statements of the Company for the fiscal years ended December 31, 2013
and 2012 contained no adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope
or accounting principles.
During
the fiscal years ended December 31, 2013 and 2012, and through the interim period ended July 28, 2013, there were no “disagreements”
(as such term is defined in Item 304 of Regulation S-K) with the Former Accountant on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedures, which disagreements if not resolved to the satisfaction of the
Former Accountant would have caused them to make reference thereto in their reports on the financial statements for such periods.
During
the fiscal years ended December 31, 2013 and 2012, and through the interim period ended July 28, 2014, there were the following
“reportable events” (as such term is defined in Item 304 of Regulation S-K). As disclosed in Part I, Item 4 of the
Company’s Form 10-Q for the quarterly period ended March 31, 2014, the Company’s management determined that the Company’s
internal controls over financial reporting were not effective as of the end of such period due to the existence of material weakness
related to the following:
|
● |
inadequate
personnel for documenting and execution of processes related to accounting for transactions; |
|
|
|
|
● |
inadequate
segregation of duties due to the limited size of the accounting department; and |
|
|
|
|
● |
a
lack of experienced personnel with relevant accounting experience, due in part to our limited financial resources. |
These
material weaknesses have not been remediated as of the date of this Current Report on Form 10-K. Other than as disclosed above,
there were no reportable events during the fiscal years ended December 31, 2013 and 2012, and through the interim period ended
July 28, 2014. The Company’s Board of Directors discussed the subject matter of each reportable event with the Former Accountant.
The Company authorized the Former Accountant to respond fully and without limitation to all requests of the New Accountant concerning
all matters related to the audited period by the Former Accountant, including with respect to the subject matter of each reportable
event.
Prior
to retaining the New Accountant, the Company did not consult with the New Accountant regarding either: (i) the application of
accounting principles to a specified transaction, either contemplated or proposed, or the type of audit opinion that might be
rendered on the Company’s financial statements; or (ii) any matter that was the subject of a “disagreement”
or a “reportable event” (as those terms are defined in Item 304 of Regulation S-K).
ITEM
9A. CONTROLS AND PROCEDURES
Evaluation
of Disclosure Controls and Procedures
As
of the end of the period covered by this Annual Report on Form 10-K, we carried out an evaluation, under the supervision and with
the participation of senior management, including our Chief Executive Officer (“CEO”) of the effectiveness of the
design and operation of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under
the Exchange Act. Based upon that evaluation, our CEO concluded that our disclosure controls and procedures were not effective
in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by us in the reports
that we file or submit under the Exchange Act due to the material weaknesses in our internal control over financial reporting.
A discussion of the material weaknesses in our internal control over financial reporting is described below.
Management’s
Annual Report on Internal Control Over Financial Reporting
Management
is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial
reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, is a process designed by, or under
the supervision of, our CEO, or persons performing similar functions, and effected by our board of directors, management or other
personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting principles. Our management, with the participation of our
CEO, has established and maintained policies and procedures designed to maintain the adequacy of our internal control over financial
reporting, and include those policies and procedures that:
|
● |
pertain
to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions
of our assets; |
|
|
|
|
● |
provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with
authorizations of our management and directors; and |
|
|
|
|
● |
provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets
that could have a material effect on the interim or annual Consolidated Financial Statements. |
Management
has used the framework set forth in the report entitled Internal Control – Integrated Framework published by the
Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) to evaluate the effectiveness of our internal
control over financial reporting. Management was unable to implement its remediation plans during 2014 due to cost considerations.
As a result of the material weaknesses described below, management has concluded that our internal control over financial reporting
was not effective as of December 31, 2014.
Management
has determined that, as of the December 31, 2014 measurement date, there were deficiencies in both the design and the effectiveness
of our internal control over financial reporting. Management has assessed these deficiencies and determined that there were various
material weaknesses in our internal control over financial reporting. The existence of a material weakness or weaknesses is an
indication that there is a more than remote likelihood that a material misstatement of our financial statements will not be prevented
or detected in a future period.
Management
has assigned a high priority to the short-and long-term improvement of our internal control over financial reporting. We have
listed below the nature of the material weaknesses we have identified:
|
● |
inadequate
personnel for documenting and execution of processes related to accounting for transactions; |
|
|
|
|
● |
inadequate
segregation of duties due to the limited size of the accounting department; and |
|
|
|
|
● |
a
lack of experienced personnel with relevant accounting experience, due in part to our limited financial resources. |
We
intend to design and implement policies and procedures to remediate the material weaknesses in our internal control over financial
reporting in fiscal 2015, including the implementation of a new accounting system and related internal procedures, and pending
the financial resources, the hiring of a Chief Financial Officer as a full time employee.
Management
does not believe that any of our annual or interim financial statements issued to date contain a material misstatement as a result
of the aforementioned weaknesses in our internal control over financial reporting.
Changes
in Internal Control over Financial Reporting
There
have been no changes in our internal controls over financial reporting or in other factors during the fourth fiscal quarter ended
December 31, 2014, that materially affected, or is likely to materially affect, our internal control over financial reporting.
Our Chief Financial Officer resigned during the quarter, and we installed an Acting Chief Financial Officer who was previously
and is now a member of our board of directors, and retained the services of an outside firm for interim support related to the
closing and review of our financial statements and required reports.
Limitations
on Internal Controls
Because
of its inherent limitations, internal control over financial reporting may not prevent or detect all errors or misstatements and
all fraud. Therefore, even those systems determined to be effective can provide only reasonable, not absolute, assurance that
the objectives of the policies and procedures are met. Also, projections of any evaluation of effectiveness to future periods
are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
ITEM
9B. OTHER INFORMATION
None.
PART
III
ITEM
10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Set
forth below are our present directors and executive officers as of March 25, 2015. Note that there are no other persons who have
been nominated or chosen to become directors nor are there any other persons who have been chosen to become executive officers.
There are no arrangements or understandings between any of the directors, officers and other persons pursuant to which such person
was selected as a director or an officer. Directors are elected to serve until the next annual meeting of stockholders and until
their successors have been elected and have qualified. Officers serve at the discretion of the Board of Directors.
Name |
|
Age |
|
Present
Position and Offices |
|
|
|
|
|
Thomas
Allinder |
|
54 |
|
Chief
Executive Officer and Sole Director |
Set
forth below are brief accounts of the business experience during the past five years of each director and executive officer of
the Company.
Thomas
Allinder has served as our Chief Executive Officer and Director since March 15, 2012. Prior to joining us, Mr. Allinder served
as the President of Wall Street Branding from June 2010 to March 2012, where he represented Rapid Fire Marketing with regard to
public and investor relations. From January 2007 to June 2010 Mr. Allinder served as Founder and President at New River Financial
Group, LLC, for publicly traded companies including financing, reverse mergers, investor relations and public relations. During
January 2007 to June 2010, Mr. Allinder did consulting work for publicly traded companies, such as Bebida Beverage Company (OTC:
BBDA), Cord Blood America (OTCBB: CBAI) and Axiologix, Inc. (OTC: AXLX). Mr. Allinder was chosen to serve on our Board because
of his management and operational skills from his past management positions, as well as his public relations knowledge and experience
advising public companies on strategic matters.
Involvement
in Certain Legal Proceedings
To
the best of our knowledge, neither of our sole director and executive officer or our promoter and control person (as identified
under “Certain Relationships and Related Transactions”) has, during the past ten years:
|
● |
been
convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other
minor offenses); |
|
|
|
|
● |
had
any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or
business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or
within two years prior to that time; |
|
|
|
|
● |
been
subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction
or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement
in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities,
or to be associated with persons engaged in any such activity; |
|
|
|
|
● |
been
found by a court of competent jurisdiction in a civil action or by the SEC or the Commodity Futures Trading Commission to
have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated; |
|
|
|
|
● |
been
the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently
reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an
alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial
institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement
or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or
any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or |
|
|
|
|
● |
been
the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory
organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section 1(a)(29) of
the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority
over its members or persons associated with a member. |
Except
as set forth in our discussion below in “Certain Relationships and Related Transactions,” none of our directors or
executive officers has been involved in any transactions with us or any of our directors, executive officers, affiliates or associates
which are required to be disclosed pursuant to the rules and regulations of the SEC.
Committees;
Audit Committee Financial Expert
Our
board does not have an Audit Committee or other committees.
Changes
in Nominating Procedures
None.
Significant
Employees
We
have no employees who are not executive officers, but who are expected to make a significant contribution to our business. We
intend in the future to hire independent contractors on an as needed basis.
Family
Relationships
None
of the directors and officers is related to any other director or officer of the Company.
ITEM
11. EXECUTIVE COMPENSATION
The
following table sets forth information concerning the total compensation paid during the years ended December 31, 2014 and 2013
for (i) our Chief Executive Officer, Thomas Allinder. There were no individuals in which required disclosure.
Position | |
Fiscal
Year | | |
Salary
($) | | |
Bonus
($) | | |
Stock
Awards
($) | | |
Option
Awards
($) | | |
Non-equity
Incentive
Plan
Compensation | | |
Non-qualified
Deferred
Compensation Earnings
($) | | |
All
Other Compensation
($) | | |
Total
($) | |
Thomas
Allinder | |
| 2014 | | |
| 150,000 | | |
| - | | |
| 170,000 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 320,000 | |
CEO | |
| 2013 | | |
| 150,000 | | |
| - | | |
| 170,000 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 320,000 | |
|
(1) |
In
each of the years ended December 31, 2013 and 2014, Mr. Allinder vested in 50,000,000 shares of common stock of the Company.
The shares are issuable under his employment agreement, see the notes to the financial statements for additional disclosure,
and valued at $0.0034 per share on the date of the agreement. The shares were issued during 2014. |
Narrative
Disclosure to Summary Compensation Table.
Employment
Agreement with Thomas Allinder.
In
March 2012, we entered into an employment agreement with Mr. Allinder as the Company’s Chief Executive Officer. Mr. Allinder’s
employment agreement provides for a five-year term and an annual salary of $150,000 and 50 million shares of restricted stock.
At the beginning of each successive 12-month period over the term of this Agreement thereafter, this annual salary shall be increased
over the next 12 months by a sum equal to or greater than 7.5% of the annual salary for the preceding 12-month period, provided
that the Board of Directors approves such increase.
Other
than as described above, we have no plans or arrangements with respect to remuneration received or that may be received by our
named executive officers to compensate such officers in the event of termination of employment (as a result of resignation, retirement,
change of control) or a change of responsibilities following a change of control.
Outstanding
Equity Awards at December 31, 2014.
In
connection with Mr. Allinder’s employment contract he has the ability to receive an additional 100,000,000 shares of common
stock. The shares vest in tranches of 50 million each May 1st.
Narrative
Disclosure of Compensation Policies and Practices as they Relate to the Company’s Risk Management.
We
believe that our compensation policies and practices for all employees, including executive officers, do not create risks that
are reasonably likely to have a material adverse effect on us.
Compensation
of Directors
No
cash compensation was paid to our directors for their services as directors since our inception. We have no standard arrangement
pursuant to which our directors are to be compensated for their services in their capacity as directors except for the granting
from time to time of incentive stock options. The board of directors may award special remuneration to any director undertaking
any special services on behalf of our company other than services ordinarily required of a director. Other than indicated above,
no director received and/or accrued any compensation for his services as a director, including committee participation and/or
special assignments.
ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The
following table sets forth certain information as of March 25, 2015 regarding the beneficial ownership of our common stock by
(i) each stockholder known by us to be the beneficial owner of more than 5% of our common stock, (ii) by each of our directors
and executive officers and (iii) by all of our executive officers and directors as a group. Each of the persons named in the table
has sole voting and investment power with respect to common stock beneficially owned. A person is also deemed to be a beneficial
owner of any securities of which the person has the right to acquire beneficial ownership within 60 days.
Name
of Beneficial Owner | |
Number
of Shares Beneficially Owned | | |
Percentage
Owned (1) | |
Thomas
Allinder | |
| 150,000,000 | | |
| 2.2 | % |
All
directors and named executive officers as a group (1 individual) | |
| 150,000,000 | | |
| 2.2 | % |
5%
or More Shareholders
N/A
| * | Except
as otherwise indicated, the address of each of the following persons is c/o Rapid Fire
Marketing, Inc., 311 West Third St., Suite 1234, Carson City, NV 89703. |
|
|
|
|
(1) |
Percentage
of beneficial ownership is based on the 6,556,071,515 shares of common stock outstanding as of March 25, 2015. |
Change
in Control
There
are no present arrangements known to the Company, including any pledge by any person of the Company’s securities, the operation
of which may at a subsequent date result in a change in control of the Company.
ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Prior
Management Activities
During
the periods reported, we believe our prior management team may have engaged in activities that were outside the scope of the Company’s
business. Prior management has disagreed with these findings. On January 27, 2014, the Company entered into a settlement with
the prior management regarding these issues. As a result of the settlement agreement, prior management has agreed to return 60,000,000
shares of the Company’s common stock previously issued to them for services rendered and in return the Company has agreed
to release prior management from any claims related to all costs deemed of a non-business nature.
Director
Independence
Our
Common Stock is not quoted or listed on any national exchange or interdealer quotation system with a requirement that a majority
of our board of directors be independent and therefore, the Company is not subject to any director independence requirements.
Under NASDAQ Rule 5605(a)(2)(A), a director is not considered to be independent if he or she also is an executive officer or employee
of the corporation. Under such definition our sole officer and director, Thomas Allinder, would not be considered an independent
director.
Related
Party Transactions
Except
as otherwise indicated herein, there have been no other related party transactions, or any other transactions or relationships
required to be disclosed pursuant to Item 404 and Item 407(a) of Regulation S-K.
ITEM
14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Fees
Aggregate
fees for professional services rendered to us by our independent registered public accounting firm engaged to provide accounting
services for the years ended December 31, 2014 and 2013 were:
| |
Year
Ended December 31, 2014 | | |
Year
Ended December 31, 2013 | |
Audit
fees | |
$ | 26,200 | | |
$ | 13,000 | |
Audit
related fees | |
| 0 | | |
| 0 | |
Tax
fees | |
| 0 | | |
| 0 | |
All
other fees | |
| 0 | | |
| 0 | |
Total | |
$ | 26,200 | | |
$ | 13,000 | |
Policy
on Pre-Approval of Audit and Permissible Non-audit Services of Independent Auditors
Consistent
with the SEC policies regarding auditor independence, our Board of Directors has responsibility for appointing, setting compensation
and overseeing the work of the independent auditor. In recognition of this responsibility, our Board of Directors has established
a policy to pre-approve all audit and permissible non-audit services provided by the independent auditor.
Prior
to engagement of the independent auditor for the next year’s audit, management will submit an aggregate of services expected
to be rendered during that year for each of the following four categories of services to the Board of Directors for approval.
1.
Audit services include audit work performed in the preparation of year-end financial statements, as well as work
that generally only the independent auditor can reasonably be expected to provide, including comfort letters, statutory audits,
and attest services, assistance reviewing our quarterly financial statements and SEC filings, and consultation regarding financial
accounting and/or reporting standards.
2.
Audit-Related services are for assurance and related services that are traditionally performed by the independent
auditor, including due diligence related to mergers and acquisitions, employee benefit plan audits, and special procedures required
to meet certain regulatory requirements.
3.
Tax services include all services performed by the independent auditor’s tax personnel except those services
specifically related to the audit of the financial statements, and includes fees in the areas of tax compliance, tax planning,
and tax advice.
4.
Other Fees are those associated with services not captured in the other categories.
ITEM
15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a)
The following documents are filed as part of this Annual Report on Form 10-K.
Exh.
No. |
|
Exhibit
Description |
3.1 |
|
Articles
of Incorporation, incorporated by reference |
3.2 |
|
By-laws,
incorporated by reference |
10.4 |
|
Employment
Agreement between the Company and Mr. Tom Allinder, incorporated by reference |
31.1 |
|
Section
302 Certification by the Registrant’s Principal Executive Officer |
32.1 |
|
Section
906 Certification by the Registrant’s Principal Executive Officer |
101.INS* |
|
XBRL
Instance Document |
101.SCH* |
|
XBRL
Taxonomy Extension Schema |
101.CAL* |
|
XBRL
Taxonomy Extension Calculation Linkbase |
101.DEF* |
|
XBRL
Taxonomy Extension Definition Linkbase |
101.LAB
* |
|
XBRL
Taxonomy Extension Presentation Linkbase |
101.PRE* |
|
XBRL
Taxonomy Extension Presentation Linkbase |
*In
accordance with Regulation S-T, the XBRL-related information in Exhibit 101 to this report shall be deemed “furnished”
and not “filed.”
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Exchange Act, the Registrant caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
|
Rapid
Fire Marketing, Inc. |
Date:
April 13, 2015 |
|
|
By: |
/s/
Tom Allinder |
|
|
Tom
Allinder |
|
|
Chief
Executive Officer |
Exhibit
31.1
CERTIFICATION
OF PRINCIPAL EXECUTIVE OFFICER
I, Tom Allinder,
certify that:
1.
I have reviewed this Annual Report on Form 10-K of Rapid Fire Marketing, Inc.;
2.
Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading
with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this report;
4.
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined
in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on
such evaluation; and
(d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that
has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial
reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors
(or persons performing the equivalent functions):
(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;
and
(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
Date: April 13,
2015 |
|
|
By: |
/s/
Tom Allinder |
|
|
Tom Allinder |
|
|
Chief Executive
Officer, Principal Executive Officer, and
Principle Accounting or Financial Officer |
EXHIBIT
32.1
Certification
of Principal Executive Officer
Pursuant
to U.S.C. Section 1350
As
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Pursuant
to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States
Code), the undersigned officer of Rapid Fire Marketing, Inc. a Nevada corporation (the “Company”), does hereby certify,
to such officer’s knowledge, that:
The
Annual Report on Form 10-K for the period ending December 31, 2014 of the Company (the “Form 10-K”) fully complies
with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and the information contained in the Form
10-K fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: April 13,
2015 |
|
|
By: |
/s/
Tom Allinder |
|
|
Tom Allinder |
|
|
Chief Executive
Officer, Principal Executive Officer, and
Principal Accounting and Financial Officer |