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Organization
Your Internet Defender Inc. was incorporated under the laws of the State of Nevada on May 4, 2011, to engage in online brand management, focusing on offsite search engine optimization (SEO), social media reputation monitoring, and specialized brand reputation marketing. We 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.
During the three months ended December 31, 2011 activities during the development stage include developing the business plan and raising capital.
Basis of Presentation
The accompanying unaudited condensed financial statements are presented in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal occurring accruals) considered necessary in order to make the financial statements not misleading, have been included.
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 could effect 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 revenue and expenses during the reported period. Actual results could differ from those estimates.
Cash and Cash Equivalents
For purposes of the cash flow statements, the Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. At December 31, 2011 the Company did not have any balances that exceeded FDIC insurance limits.
Revenue Recognition
The Company recognizes revenue in accordance with FASB ASC No. 985-605, Revenue Recognition. In all cases, revenue is recognized as the services are performed and when the price is fixed and determinable, persuasive evidence of an arrangement exists, and collectability of the resulting receivable is reasonably assured. For services where we do not have a contract, revenue is generally recognized when the services are performed and accepted by the customer and the amounts are earned and collection is reasonably assured. We recognize revenue under contracts agreements where we have a fixed term of service using the straight line method over the term of the agreement.
Allowance for Doubtful Accounts
Accounts receivable consist of trade receivables recorded at original invoice amount, less an estimated allowance for uncollectible accounts. Trade credit is generally extended on a short-term basis; thus, trade receivables do not bear interest, although finance charges may be applied to receivables that are past due. Trade receivables are periodically evaluated for collectability based on past credit history with customers and their current financial condition. Changes in the estimated collectability of trade receivables are recorded in the results of operations for the period in which the estimate is revised. The Company does not generally require collateral for trade receivables.
At December 31, 2011 management considers all accounts receivable collectable and has not made a provision for doubtful accounts.
Website Development Costs
The Company capitalizes its costs to develop its website and internal-use software when preliminary development efforts are successfully completed, management has authorized and committed project funding, and it is probable that the project will be completed and the software will be used as intended. Such costs are amortized on a straight-line basis over the estimated useful life of three years. Costs incurred prior to meeting these criteria, together with costs incurred for training and maintenance, are expensed as incurred. As of December 31, 2011, the Company capitalized $26,950 of website development costs. Amortization expense from inception of May 4, 2011 through December 31, 2011 totaled $3,689.
Income Taxes
The Company accounts for income taxes under FASB Codification Topic 740-10-25 (ASC 740-10-25). Under ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
Business Segments
The Company operates in one segment and therefore segment information is not presented.
Fair Value of Financial Instruments
The carrying amounts 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.
Concentration of Credit Risk
The Companys financial instruments that are exposed to the concentrations of credit risk consist primarily of cash and cash equivalents and trade accounts receivables. The Companys places its cash with high quality institutions. At times, such investments may be in excess of the FDIC insurance limit. Cash and cash equivalents held in a bank may exceed federally insured limits at year end and at various points during the year.
The Company routinely assesses the financial strength of its customers and, as a consequence, believes that its trade accounts receivable credit risk exposure is limited.
During the three months ended December 31, 2011, five customers made up sales of 35%, 28%, and 22%, 11% and 4% of our total sales, respectively.
As of December 31, 2011, four customers made up 54%, 18%, 17% and 12% of the companys accounts receivable, respectively.
Loss Per Share
Basic and diluted net loss per common share is computed based upon the weighted average common shares outstanding as defined by FASB Accounting Standards Codification Topic 260, Earnings Per Share. As of December 31, 2011 there were no common share equivalents outstanding.
Recent Accounting Pronouncements
ASU No. 2011-02; A Creditors Determination of Whether a Restructuring Is a Troubled Debt Restructuring (TDR). In April, 2011, the FASB issued ASU No. 2011-02, intended to provide additional guidance to assist creditors in determining whether a restructuring of a receivable meets the criteria to be considered a troubled debt restructuring. The amendments in this ASU are effective for the first interim or annual period beginning on or after June 15, 2011, and are to be applied retrospectively to the beginning of the annual period of adoption. As a result of applying these amendments, an entity may identify receivables that are newly considered impaired. Early adoption is permitted. The Company adopted the methodologies prescribed by this ASU by the date required, and it did not have any impact upon adoption.
ASU No. 2011-03; Reconsideration of Effective Control for Repurchase Agreements. In April, 2011, the FASB issued ASU No. 2011-03. The amendments in this ASU remove from the assessment of effective control the criterion relating to the transferors ability to repurchase or redeem financial assets on substantially the agreed terms, even in the event of default by the transferee. The amendments in this ASU also eliminate the requirement to demonstrate that the transferor possesses adequate collateral to fund substantially all the cost of purchasing replacement financial assets.
The guidance in this ASU is effective for the first interim or annual period beginning on or after December 15, 2011. The guidance should be applied prospectively to transactions or modifications of existing transactions that occur on or after the effective date. Early adoption is not permitted. The Company will adopt the methodologies prescribed by this ASU by the date required, and does not anticipate that the ASU will have a material effect on its financial position or results of operations.
ASU No. 2011-04; Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. In May, 2011, the FASB issued ASU No. 2011-04. The amendments in this ASU generally represent clarifications of Topic 820, but also include some instances where a particular principle or requirement for measuring fair value or disclosing information about fair value measurements has changed. This ASU results in common principles and requirements for measuring fair value and for disclosing information about fair value measurements in accordance with U.S. GAAP and IFRSs. The amendments in this ASU are to be applied prospectively. For public entities, the amendments are effective during interim and annual periods beginning after December 15, 2011. Early application by public entities is not permitted.
The Company will adopt the methodologies prescribed by this ASU by the date required, and does not anticipate that the ASU will have a material effect on its financial position or results of operations.
ASU No. 2011-05; Amendments to Topic 220, Comprehensive Income. In June, 2011, the FASB issued ASU No. 2011-05. Under the amendments in this ASU, an entity has the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. This ASU eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders' equity. The amendments in this ASU do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income.
The amendments in this ASU should be applied retrospectively. For public entities, the amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. Early adoption is permitted, because compliance with the amendments is already permitted. The amendments do not require any transition disclosures. Due to the recency of this pronouncement, the Company is evaluating its timing of adoption of ASU 2011-05, but will adopt the ASU retrospectively by the due date.
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On June 2, 2011 a related party loaned $10,000 to the Company for initial start-up costs. The note was unsecured, carried an interest rate of 5% per annum, and matured on September 30, 2011. The Company repaid the note payable on August 16, 2011 and paid interest of $42 on the note payable. (See note 4).
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(A) Preferred Stock
In June 2011, the Company amended its Articles of Incorporation to authorize 1,000,000 shares of preferred stock with a par value of $0.0001 with rights and preferences to be determined by the Board of Directors.
(B) Common Stock
In June 2011, the Company amended its Articles of Incorporation to authorize 150,000,000 shares of common stock with a par value of $0.0001.
On July 25, 2011, the Company issued 9,400,000 to three founders at $0.0001 price per share for cash of $940.
During the period of July 28th, 2011 and August 18, 2011, the company issued 42,600,000 shares of common stock to individuals for cash of $106,500 ($0.0025 per share).
(C) In-Kind Contribution
For the period from May 4, 2011 (Inception) through December 31, two shareholders of the Company contributed services having a fair value of $6,800 (See Note 4).
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On June 2, 2011 a related party loaned $10,000 to the Company for initial start-up costs. The note is unsecured, carries an interest rate of 5% per annum, and matured on September 30, 2011. The note was repaid in full with accrued interest of $42 on August 16, 2011 (See Note 2).
For the period from May 4, 2011 (Inception) through December 31, 2011, two shareholders of the Company contributed services having a fair value of $6,800 (See Note 3(C)).
On July 25, 2011, the Company issued 9,400,000 to three founders at $0.0001 price per share for cash of $940.
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As reflected in the accompanying financial statements, the Company is in the development stage with a net loss since inception of $30,485 and used cash in operating activities through inception of $20,593. This raises substantial doubt about its ability to continue as a going concern. 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.
Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern.
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The Company has evaluated subsequent events and transactions for potential recognition or disclosure in the financial statements through February 14, 2012 the date which the financial statements were issued