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NOTE 1 ORGANIZATION AND OPERATIONS
The Company
Your Internet Defender Inc. ("Your Internet Defender", the "Company", "we", "us" or "our") was incorporated on May 4, 2011 under the laws of the State of Nevada. The Company originally intended to engage in online brand management, focusing on offsite search engine optimization (SEO), social media reputation monitoring, and specialized brand reputation marketing. The Company intend to develop a full range of services, proprietary methodology and systems that will assist companies, professionals and individuals to protect and promote their brands in the most favorable manner, while attracting traffic to their desired web locations.
Change in Control
On June 30, 2014, Susan Coyne entered into private transactions with and executed stock purchase agreements with Lisa Grossman and Gabriel Solomon, our former officer and directors on the date thereof, and other unaffiliated shareholders, pursuant to which she purchased an aggregate of 31,119,300 shares of our common stock, representing 59.8% of the 52,000,000 issued and outstanding shares on that date. Other than as specifically mentioned herein, there are no arrangements or understandings among members of the former and new control groups and their associates with respect to election of directors or other matters.
Change in Officers and Director
In conjunction with the change of control mentioned hereinabove, Leah Hein was appointed as our sole officer and director and we accepted the resignations of Lisa Grossman (as President and director) and Gabriel Solomon (as Secretary, Treasurer and director). Lisa Grossman agreed to continue her employment with us as an employee.
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NOTE 2 BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
Interim Financial Statements
The accompanying unaudited interim condensed financial statements of Your Internet Defender Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, such financial statements include all adjustments (consisting solely of normal recurring adjustments) necessary for the fair statement of the financial information included herein in accordance with GAAP and the rules and regulations of the Securities and Exchange Commission (the "SEC"). The balance sheet at March 31, 2014 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Actual results could differ from those estimates. Results of operations for interim periods are not necessarily indicative of results for the full year. The accompanying condensed financial statements should be read in conjunction with the audited financial statements and related notes included in our Annual Report on Form 10-K for the year ended March 31, 2014 as filed with the SEC on June 30, 2014.
Fair Value of Financial Instruments
The carrying amount of the Company's accounts receivable, accounts payable and accrued expenses approximate fair value due to the relatively short period to maturity for these instruments.
Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated.
Earnings (Loss) Per Share
We calculate earnings (loss) per share ("EPS") in accordance with GAAP, which requires the computation and disclosure of two EPS amounts, basic and diluted. Basic EPS is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted EPS is computed based on the weighted average number of common shares outstanding plus all potentially dilutive common shares outstanding during the period under the treasury stock method. Such potential dilutive common shares consist of stock options, warrants and convertible debt. There were no potentially outstanding dilutive shares for the reporting periods ended June 30, 2014 or 2013.
Recently Issued and Newly Adopted Accounting Pronouncements
In April 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. The amendments in this Update change the requirements for reporting discontinued operations in Subtopic 205-20. Under the new guidance, a discontinued operation is defined as a disposal of a component or group of components that is disposed of or is classified as held for sale and "represents a strategic shift that has (or will have) a major effect on an entitys operations and financial results." The ASU states that a strategic shift could include a disposal of (i) a major geographical area of operations, (ii) a major line of business, (iii) a major equity method investment, or (iv) other major parts of an entity. Although "major" is not defined, the standard provides examples of when a disposal qualifies as a discontinued operation. The ASU also requires additional disclosures about discontinued operations that will provide more information about the assets, liabilities, income and expenses of discontinued operations. In addition, the ASU requires disclosure of the pre-tax profit or loss attributable to a disposal of an individually significant component of an entity that does not qualify for discontinued operations presentation in the financial statements. The ASU is effective for public business entities for annual periods beginning on or after December 15, 2014, and interim periods within those years.
In June 2014, the FASB issued ASU No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation. The amendments in this Update remove the definition of a development stage entity from the Master Glossary of the Accounting Standards Codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage that in prior years it had been in the development stage.
The amendments also clarify that the guidance in Topic 275, Risks and Uncertainties, is applicable to entities that have not commenced planned principal operations. Finally, the amendments remove paragraph 810-10-15-16. Paragraph 810-10-15-16 states that a development stage entity does not meet the condition in paragraph 810-10-15-14(a) to be a variable interest entity if (1) the entity can demonstrate that the equity invested in the legal entity is sufficient to permit it to finance the activities that it is currently engaged in and (2) the entitys governing documents and contractual arrangements allow additional equity investments. The amendments in this Update also eliminate an exception provided to development stage entities in Topic 810, Consolidation, for determining whether an entity is a variable interest entity on the basis of the amount of investment equity that is at risk. The amendments to eliminate that exception simplify GAAP by reducing avoidable complexity in existing accounting literature and improve the relevance of information provided to financial statement users by requiring the application of the same consolidation guidance by all reporting entities. The elimination of the exception may change the consolidation analysis, consolidation decision, and disclosure requirements for a reporting entity that has an interest in an entity in the development stage. The amendments related to the elimination of inception-to-date information and the other remaining disclosure requirements of Topic 915 should be applied retrospectively except for the clarification to Topic 275, which shall be applied prospectively. For public business entities, those amendments are effective for annual reporting periods beginning after December 15, 2014, and interim periods therein. Early application of each of the amendments is permitted for any annual reporting period or interim period for which the entitys financial statements have not yet been issued (public business entities) or made available for issuance (other entities). Upon adoption, entities will no longer present or disclose any information required by Topic 915.
Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.
Reclassifications
Certain March 31, 2014 amounts and amounts for the three month period ended June 30, 2013 have been reclassified to conform to the current period presentation.
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NOTE 3 GOING CONCERN
The financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. As reflected in the financial statements, the Company had deficit accumulated at June 30, 2014, a net loss and net cash used in operating activities for the interim period then ended. These factors raise substantial doubt about its ability to continue as a going concern.
While the Company is attempting to commence operations and produce sufficient sales, the Companys cash position may not be sufficient to support the Companys daily operations. While the Company believes in the viability of its strategy to commence operations and produce sales volume and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent on the Company's ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
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NOTE 4 NOTES PAYABLE
Notes payable consist of the following:
June 30, 2014 | March 31, 2014 | |||||||
Note payable, issued November 9, 2012, interest at 3% per annum, principal and interest due on demand | $ | 27,000 | $ | 27,000 | ||||
Note payable, issued January 13, 2013, interest at 3% per annum, principal and interest due on demand | 4,500 | 4,500 | ||||||
Note payable, issued March 13, 2013, interest at 3% per annum, principal and interest due on demand | 10,000 | 10,000 | ||||||
Note payable, issued March 27, 2013, interest at 3% per annum, principal and interest due on demand | 2,000 | 2,000 | ||||||
Note payable, issued June 5, 2013, interest at 3% per annum, principal and interest due on demand | 3,300 | 3,300 | ||||||
Notes payable | $ | 46,800 | $ | 46,800 |
On July 7, 2014, all notes payable and accrued interest thereto were paid in full.
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NOTE 5 RELATED PARTY TRANSACTIONS
Notes Payable
Notes payable with Lisa Grossman, the former President of the Company and stockholder consist of the following:
June 30, 2014 | March 31, 2014 | |||||||
Note payable, issued April 17 2013, interest at 3% per annum, principal and interest due on demand | $ | 13,000 | $ | 13,000 | ||||
Notes payable, issued between May 6 2013 and March 10, 2014, interest at 10% per annum, principal and interest due on demand | 80,182 | 80,182 | ||||||
Note payable, issued June 30, 2014, interest at 2% per annum, principal and interest due on demand | 248,832 | | ||||||
Notes payablerelated party | $ | 342,014 | $ | 93,182 |
On July 7, 2014, the notes payable and accrued interest thereto dated April 17, 2013 and May 6, 2013 were paid in full.
Advances
During the three months ended June 30, 2014, Mrs. Grossman made advances of $19,652 to the Company for working capital purposes. These advances were unsecured, non-interest bearing and due on demand. On July 7, 2014, the advances of $19,652 were paid in full.
Consulting Agreement
On July 30, 2012, the Company executed a four-year Consulting Agreement for $12,000 per month with Yitz Grossman, husband of Mrs. Grossman, commencing upon the earlier of (i) the consummation by the Company of equity financings (including financings with an equity component) resulting in gross proceeds to the Company of no less than $500,000 or (ii) September 1, 2012. The agreement calls for an automatic renewal for an additional three years if the Company has raised in total a minimum of two million in gross capital from any and all sources. On October 1, 2012, the agreement was modified whereby the compensation under the consulting agreement was waived for the period from October through December 2012.
Consulting expenses recognized for the reporting period ended June 30, 2014 and 2013 totaled $36,000 and $36,000, respectively.
On July 2, 2014, we entered into a Debt Settlement Agreement with Mr. Grossman pursuant to which, on July 7, 2014, we paid Mr. Grossman $40,108 and he forgave the remaining balance of $187,892. In connection therewith, Mr. Grossman also agreed to terminate the Consulting Agreement.
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NOTE 6 STOCKHOLDERS DEFICIT
Preferred Stock
At June 30, 2014 and March 31, 2014, we had 1,000,000 shares of Preferred Stock, $0.0001 par value, authorized with zero shares issued and outstanding.
Common Stock
At June 30, 2014 and March 31, 2014, we had 150,000,000 shares of Common Stock, $0.0001 par value, authorized with 52,000,000 shares issued and outstanding.
In-Kind Contribution
For the interim reporting periods ended June 30, 2014 and 2013, two shareholders of the Company contributed services having a fair value of $2,600.
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NOTE 7 SUBSEQUENT EVENTS
Termination of Consulting Agreement
On July 30, 2012, we entered into a four-year Consulting Agreement with Yitz Grossman under which we agreed to pay him $12,000 per month for his services. As of July 2, 2014, we owed $288,000 to Mr. Grossman thereunder. On July 2, 2014, we entered into a Debt Settlement Agreement with Mr. Grossman pursuant to which, on July 7, 2014, we paid him $40,108 and he forgave the remaining balance of $187,892. In connection therewith, Mr. Grossman also agreed to terminate the Consulting Agreement. Mr. Grossman is the husband of Mrs. Grossman, our former President.
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Interim Financial Statements
The accompanying unaudited interim condensed financial statements of Your Internet Defender Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, such financial statements include all adjustments (consisting solely of normal recurring adjustments) necessary for the fair statement of the financial information included herein in accordance with GAAP and the rules and regulations of the Securities and Exchange Commission (the "SEC"). The balance sheet at March 31, 2014 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Actual results could differ from those estimates. Results of operations for interim periods are not necessarily indicative of results for the full year. The accompanying condensed financial statements should be read in conjunction with the audited financial statements and related notes included in our Annual Report on Form 10-K for the year ended March 31, 2014 as filed with the SEC on June 30, 2014.
Fair Value of Financial Instruments
The carrying amount of the Company's accounts receivable, accounts payable and accrued expenses approximate fair value due to the relatively short period to maturity for these instruments.
Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated.
Earnings (Loss) Per Share
We calculate earnings (loss) per share ("EPS") in accordance with GAAP, which requires the computation and disclosure of two EPS amounts, basic and diluted. Basic EPS is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted EPS is computed based on the weighted average number of common shares outstanding plus all potentially dilutive common shares outstanding during the period under the treasury stock method. Such potential dilutive common shares consist of stock options, warrants and convertible debt. There were no potentially outstanding dilutive shares for the reporting periods ended June 30, 2014 or 2013.
Recently Issued and Newly Adopted Accounting Pronouncements
In April 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. The amendments in this Update change the requirements for reporting discontinued operations in Subtopic 205-20. Under the new guidance, a discontinued operation is defined as a disposal of a component or group of components that is disposed of or is classified as held for sale and "represents a strategic shift that has (or will have) a major effect on an entitys operations and financial results." The ASU states that a strategic shift could include a disposal of (i) a major geographical area of operations, (ii) a major line of business, (iii) a major equity method investment, or (iv) other major parts of an entity. Although "major" is not defined, the standard provides examples of when a disposal qualifies as a discontinued operation. The ASU also requires additional disclosures about discontinued operations that will provide more information about the assets, liabilities, income and expenses of discontinued operations. In addition, the ASU requires disclosure of the pre-tax profit or loss attributable to a disposal of an individually significant component of an entity that does not qualify for discontinued operations presentation in the financial statements. The ASU is effective for public business entities for annual periods beginning on or after December 15, 2014, and interim periods within those years.
In June 2014, the FASB issued ASU No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation. The amendments in this Update remove the definition of a development stage entity from the Master Glossary of the Accounting Standards Codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage that in prior years it had been in the development stage.
The amendments also clarify that the guidance in Topic 275, Risks and Uncertainties, is applicable to entities that have not commenced planned principal operations. Finally, the amendments remove paragraph 810-10-15-16. Paragraph 810-10-15-16 states that a development stage entity does not meet the condition in paragraph 810-10-15-14(a) to be a variable interest entity if (1) the entity can demonstrate that the equity invested in the legal entity is sufficient to permit it to finance the activities that it is currently engaged in and (2) the entitys governing documents and contractual arrangements allow additional equity investments. The amendments in this Update also eliminate an exception provided to development stage entities in Topic 810, Consolidation, for determining whether an entity is a variable interest entity on the basis of the amount of investment equity that is at risk. The amendments to eliminate that exception simplify GAAP by reducing avoidable complexity in existing accounting literature and improve the relevance of information provided to financial statement users by requiring the application of the same consolidation guidance by all reporting entities. The elimination of the exception may change the consolidation analysis, consolidation decision, and disclosure requirements for a reporting entity that has an interest in an entity in the development stage. The amendments related to the elimination of inception-to-date information and the other remaining disclosure requirements of Topic 915 should be applied retrospectively except for the clarification to Topic 275, which shall be applied prospectively. For public business entities, those amendments are effective for annual reporting periods beginning after December 15, 2014, and interim periods therein. Early application of each of the amendments is permitted for any annual reporting period or interim period for which the entitys financial statements have not yet been issued (public business entities) or made available for issuance (other entities). Upon adoption, entities will no longer present or disclose any information required by Topic 915.
Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.
Reclassifications
Certain March 31, 2014 amounts and amounts for the three month period ended June 30, 2013 have been reclassified to conform to the current period presentation.
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Notes payable consist of the following:
June 30, 2014 | March 31, 2014 | |||||||
Note payable, issued November 9, 2012, interest at 3% per annum, principal and interest due on demand | $ | 27,000 | $ | 27,000 | ||||
Note payable, issued January 13, 2013, interest at 3% per annum, principal and interest due on demand | 4,500 | 4,500 | ||||||
Note payable, issued March 13, 2013, interest at 3% per annum, principal and interest due on demand | 10,000 | 10,000 | ||||||
Note payable, issued March 27, 2013, interest at 3% per annum, principal and interest due on demand | 2,000 | 2,000 | ||||||
Note payable, issued June 5, 2013, interest at 3% per annum, principal and interest due on demand | 3,300 | 3,300 | ||||||
Notes payable | $ | 46,800 | $ | 46,800 |
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Notes payable with Lisa Grossman, the former President of the Company and stockholder consist of the following:
June 30, 2014 | March 31, 2014 | |||||||
Note payable, issued April 17 2013, interest at 3% per annum, principal and interest due on demand | $ | 13,000 | $ | 13,000 | ||||
Notes payable, issued between May 6 2013 and March 10, 2014, interest at 10% per annum, principal and interest due on demand | 80,182 | 80,182 | ||||||
Note payable, issued June 30, 2014, interest at 2% per annum, principal and interest due on demand | 248,832 | | ||||||
Notes payablerelated party | $ | 342,014 | $ | 93,182 |
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