14-Jan-2014
Annual Report
ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS
The following discussion of the financial condition and results of operations should be read in conjunction with the financial statements included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future.
YEAR ENDED SEPTEMBER 30, 2013 AND 2012 AND FOR THE PERIOD FROM MAY 9, 2007 (INCEPTION) TO SEPTEMBER 30, 2013:
REVENUE
The Company generated limited gross revenues from its prior business of $1,434 during the period from inception to September 30, 2010, no revenues during the years ended September 30, 2012 or 2011, and $987 for the year ended September 30, 2013. The Company has commenced commercial operations as of September 30, 2013.
During the development stage, the Company has been primarily focused on corporate organization and development of our web site and mobile application. We do not anticipate earning significant revenues until such time that we have sufficient capital to market our services.
EXPENSES
During the year ended September 30, 2012, total operating expenses for the Company were $379,494 compared to $444,040 for the year ended September 30, 2013. The majority of the operating expenses incurred during both years were
consulting, legal, professional and general and administrative costs, and website development. Total operating expenses for the period from inception through September 30, 2013 were $900,690.
NET LOSS
Our net loss for the year ended September 30, 2012 was $379,562 as compared to a net loss of $444,040 for the year ended September 30, 2013. Our accumulative net loss for the period from inception to September 30, 2013 was $898,674.
LIQUIDITY AND FINANCIAL CONDITION
As of September 30, 2013, the Company had current assets of $75,393 consisting solely of cash and current liabilities of $58,683.
The Company believes it currently does not have sufficient funds to execute its business plan. We anticipate that additional capital will be required to implement our business plan to pay for marketing efforts to support our revenue forecast for 2014. In order to obtain the necessary capital, the Company may need to sell additional shares of common stock or borrow funds from private lenders.
Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses, fail to collect significant amounts owed to us or experience unexpected cash requirements that would force us to seek alternative financing. Further, if we issue additional equity or debt securities as a means of raising additional capital, stockholders may experience dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of common stock.
PLAN OF OPERATIONS
We launched our website in 2013 at www.psychicfriendsnetwork.com.
Our plan is to take a multi-faceted approach towards marketing. This will include both online and offline marketing.
Our Online marketing will include a robust pay per click campaign with google, bing and yahoo. So that we can hit the ground running we have contacted experts in the PPC field. We will also do affiliate marketing on a CPA (Cost per Acquisition) basis. Using this model, we will only pay the affiliated for a paid customer, and they pay for their own marketing, so it is a very targeted brand of marketing. We will also be doing some banner ads and contextual marketing, where we can serve people ads only after they express some sort of interest in psychics or horoscopes.
Regarding our offline advertising, this is our true strength, as witnessed from our previous run of success. We already have new television spots produced that we expect to perform extremely well. These spots were all produced by the same team that produced the original Psychic Friends Network infomercials.
In addition, we are expecting our mobile app to be finished during the first half of 2014. We believe that our mobile app will be the most successful of all of our platforms. Mobile advertising has the best ROI, of all forms of advertising simply because the market is still relatively new, and as such is not near a saturation point. Furthermore, mobile applications are truly tailor made for Psychic Friends. For the first time ever we can contact our customer in their pockets or purses. We can let them know about promo offers, or send them a horoscope or with them a happy birthday with a discount code. And, the customer is just a few clicks away from connecting to one of our hand chosen psychics anytime or anywhere that they have their mobile smart phones.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
See Note 2 to the notes to our financial statements.
OFF-BALANCE SHEET ARRANGEMENTS
None. http://biz.yahoo.com/e/140114/pfni10-k.html
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