JERRICK MEDIA HOLDINGS, INC., 10-Q filed on 11/7/2013
Quarterly Report
Document and Entity Information
9 Months Ended
Sep. 30, 2013
Nov. 7, 2013
Document and Entity Information
 
 
Entity Registrant Name
LILM, Inc. 
 
Document Type
10-Q 
 
Document Period End Date
Sep. 30, 2013 
 
Amendment Flag
false 
 
Entity Central Index Key
0001357671 
 
Current Fiscal Year End Date
--12-31 
 
Entity Common Stock, Shares Outstanding
 
7,883,750 
Entity Filer Category
Smaller Reporting Company 
 
Entity Current Reporting Status
Yes 
 
Entity Voluntary Filers
No 
 
Entity Well-known Seasoned Issuer
No 
 
Document Fiscal Year Focus
2013 
 
Document Fiscal Period Focus
Q3 
 
Entity Incorporation, State Country Name
Nevada 
 
Entity Incorporation, Date of Incorporation
Dec. 30, 1999 
 
CONSOLIDATED BALANCE SHEETS (USD $)
Sep. 30, 2013
Dec. 31, 2012
Current Assests
 
 
Cash
$ 1,493,003 
$ 447 
Inventory
112 
1,168 
Total Current Assets
1,493,115 
1,615 
Equipment-Production Mold, Net
765 
1,020 
Total Assets
1,493,880 
2,635 
Current Liabilities
 
 
Accounts Payable and Accrued Expenses
 
33,355 
Note Payable- Related Party
 
52,756 
Total Current Liabilities
 
86,111 
Stockholders' Equity (Deficiency)
 
 
Common Stock 7,633,750 shares issued and outstanding at September 30, 2013 and 2,633,750 shares issued and outstanding at December 31, 2012
7,634 
2,634 
Capital in excess of par value
1,742,561 
147,561 
Accumulated deficit during development stage
(256,315)
(233,671)
Total Stockholders' Equity (Deficiency)
1,493,880 
(83,476)
Total Liabilities and Stockholders' Equity (Deficiency)
$ 1,493,880 
$ 2,635 
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
Sep. 30, 2013
Dec. 31, 2012
CONSOLIDATED BALANCE SHEETS (Parenthetical)
 
 
Common stock par value
$ 0.001 
$ 0.001 
Common stock shares authorized
25,000,000 
25,000,000 
Common stock shares issued
7,633,750 
2,633,750 
Common stock shares outstanding
7,633,750 
2,633,750 
CONSOLIDATED STATEMENT OF OPERATIONS (USD $)
3 Months Ended 9 Months Ended 197 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Revenue
 
 
 
 
 
Sales
$ 558 
$ 5,024 
$ 13,269 
$ 13,513 
$ 82,037 
Cost of Goods Sold
(42)
(451)
(1,056)
(1,442)
(5,452)
Gross Profit
516 
4,573 
12,213 
12,071 
76,585 
Operating Expenses
 
 
 
 
 
General and administrative
6,832 
8,715 
32,752 
23,817 
298,877 
Royalties
46 
115 
146 
801 
Depreciation and amortization
85 
85 
255 
255 
29,585 
Total Expenses
6,923 
8,846 
33,122 
24,218 
329,263 
Other (Income) Expense:
 
 
 
 
 
Interest expense
592 
486 
1,735 
1,416 
3,637 
Net Loss
$ (6,999)
$ (4,759)
$ (22,644)
$ (13,563)
$ (256,315)
Net Loss Per Common Share
 
 
 
 
 
Basic and diluted
   
   
   
   
 
Weighted Average Outstanding Shares
 
 
 
 
 
Basic and diluted
2,960,000 
2,634,000 
2,744,000 
2,634,000 
 
CONSOLIDATED STATEMENT OF CASH FLOWS (USD $)
9 Months Ended 197 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Cash Flows From Operating Activities
 
 
 
Net Loss
$ (22,644)
$ (13,563)
$ (256,315)
Adjustments to reconcile net loss to net cash used in operating activities:
 
 
 
Expenses paid by shareholders
8,024 
 
26,948 
Issuance of common stock for expenses
 
 
8,700 
Depreciation and amortization
255 
255 
29,585 
Changes in operating assets and liabilities:
 
 
 
Change in inventory
1,056 
857 
(112)
Change in accounts payable and accrued expenses
(33,355)
9,913 
(3,221)
Net Cash Flows (Used in) Operations
(46,664)
(2,538)
(194,415)
Cash Flows From Investing Activities
 
 
 
Purchase of patent
 
 
(28,650)
Purchase of Equipment-Production Mold
 
 
(1,700)
Purchase office equipment
 
 
(2,096)
Net Cash Flows (Used in) Investing Activities
 
 
(32,446)
Cash Flows From Financing Activities
 
 
 
Notes Payable from related party
16,845 
2,725 
62,063 
Payments to related party
(77,625)
(187)
(88,911)
Proceeds from issuance of common stock
1,600,000 
 
1,746,712 
Net Cash Flows provided by Financing Activities
1,539,220 
2,538 
1,719,864 
Net Change in Cash
1,492,556 
 
1,493,003 
Cash at Beginning of Period
447 
 
 
Cash at End of Period
1,493,003 
 
1,493,003 
SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING ACTIVITIES
 
 
 
Issuance of 922,900 common shares for a patent- 2000
 
 
$ 11,963 
1. Organization
1. Organization

1.  ORGANIZATION

 

LILM, Inc. (the “Company”) was incorporated under the laws of the state of Nevada on December 30, 1999 with authorized common stock of 25,000,000 shares with a par value of $0.001 per share. The principal business activity of the Company is to manufacture and market the LiL Marc urinal used in the training of young boys.

 

During January 2005 the Company organized LiL Marc, Inc., in the state of Utah, and transferred all its assets, liabilities, and operations to LiL Marc Inc. in exchange for all of the outstanding stock of LiL Marc, Inc. for the purpose of continuing its operations in a subsidiary.

 

LiL Marc, Inc. (predecessor) was incorporated under the laws of the state of Nevada on April 22, 1997 for the purpose of marketing and sales of the LiL Marc training urinal for use by young boys. The marketing and sales activity was transferred to LILM, Inc. on December 30, 1999.

 

Included in the following financial statements are the combined statements of operations of LiL Marc, Inc. (predecessor) for the period April 22, 1997 to December 30, 1999 and LILM, Inc., and its subsidiary, for the period December 30, 1999 to September 30, 2013.

 

The accompanying unaudited balance sheet of LILM, Inc and Subsidiary (development stage company) as of the September 30, 2013 and related unaudited statements of operations for the three and nine  months ended September 30, 2013 and 2012, and the period April 22, 1997 (date of inception) to September 30, 2013, and related unaudited statements of cash flows for the  nine months ended September 30, 2013 and 2012, and the period April 22, 1997 (date of inception) to September 30, 2013, have been prepared in accordance with the requirements for unaudited interim periods, and consequently do not include all disclosures required to be in conformity with accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the nine month period ended September 30, 2013, are not necessarily indicative of the results that can be expected for the fiscal year ending December 31, 2013 or any other subsequent period.

2. Summary of Significant Accounting Policies
2. Summary of Significant Accounting Policies

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Accounting Method

 

The Company recognizes income and expenses based on the accrual method of accounting.

 

Dividend Policy

 

The Company has not yet adopted a policy regarding payment of dividends.

 

Income Taxes

 

The Company utilizes the liability method of accounting for income taxes.  Under the liability method deferred tax assets and liabilities are determined based on the differences between financial reporting and the tax bases of the assets and liabilities and are measured using the enacted tax rates and laws that will be in effect, when the differences are expected to reverse.  An allowance against deferred tax assets is recorded, when it is more likely than not, that such tax benefits will not be realized.

 

Cash and Cash Equivalents

 

Cash and cash equivalents consist of cash in banks and highly liquid investments with original maturities of three months or less at the date of acquisition.

 

Long-lived Assets

The Company reviews its long-lived assets and intangibles periodically to determine potential impairment by comparing the carrying value of the long-lived assets with the estimated future cash flows expected to result from the use of the assets, including cash flows from disposition. Should the sum of the expected future cash flows be less than the carrying value, the Company would recognize an impairment loss. An impairment loss would be measured by comparing the amount by which the carrying value exceeds the fair value of the long-lived assets and intangibles. To date, management has determined that no impairment of long-lived assets exists.

 

Revenue Recognition

 

Revenue is recognized upon the completion of the sale and shipment of the training urinal product. The product is sold via the internet and is delivered to customers or to wholesale resellers using a ground courier service.

 

Advertising and Market Development

 

The company expenses advertising and market development costs as incurred. The Company incurred $0 in advertising and market development costs for the nine month periods ended September 30, 2013 and 2012.

 

Financial Instruments

 

The carrying amounts of financial instruments, including cash and accounts payable, are considered by management to be their estimated fair values due to their short term maturities.

 

Basic and Diluted Net Income (Loss) Per Share

 

Basic net income (loss) per share amounts are computed based on the weighted average number of shares actually outstanding. Diluted net income (loss) per share amounts are computed using the weighted average number of common shares and common equivalent shares outstanding as if shares had been issued on the exercise of any common share rights unless the exercise becomes antidilutive and then the basic and diluted per share amounts are the same. As of September 30, 2013 and 2012, there were no common stock equivalents outstanding.

 

Financial and Concentrations Risk

 

The Company does not have any concentration or related financial credit risk.

 

Estimates and Assumptions

 

Management uses estimates and assumptions in preparing financial statements in accordance with accounting principles generally accepted in the United States of America.  Those estimates and assumptions affect the reported amounts of the assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses.  Actual results could vary from the estimates that were assumed in preparing these financial statements.

 

Principles of Consolidation

 

The accompanying consolidated financial statements include the accounts of the Company and its subsidiary from its inception. All significant intercompany accounts and balances have been eliminated in consolidation.

 

Recent Accounting Pronouncements

 

The Company does not expect that the adoption of recent accounting pronouncements will have a material impact on its financial statements.

3. Inventory
3. Inventory

3.  INVENTORY

 

The LiL Marc urinal is a standalone product made of plastic consisting of a urinal produced in California using a blow mold and a stand and base produced in China with an injection mold.  All inventory components are shipped to The Villages, Florida, and stored in a small warehouse.  The product is sold via the internet, is assembled at time of shipping by the Company, and is delivered to customers or to wholesale resellers using a ground courier service.  Inventory is reported at the lower of cost or net realizable value. As of September 30, 2013 and 2012, all inventory was finished goods.

4. Equipment - Production Mold
4. Equipment - Production Mold

4.  EQUIPMENT – PRODUCTION MOLD

 

On August 2, 2010, the Company purchased an injection mold from a China consortium for $1,700 to produce the base and stand for the LiL Marc training urinal.  The Company has determined the mold went into service on or about January 1, 2011 and is being depreciated, using the straight-line method, over a 5 year period. Depreciation expense for the nine months ended September 30, 2013 and 2012 was $255, for each period. Equipment is carried at cost, net of depreciation.

5. Patent
5. Patent

5.  PATENT

 

The Company acquired a patent from a related party, for the LiL Marc training urinal and was recorded at the predecessor cost, less amortization. The patent was issued on July 16, 1991 and has been fully amortized.

 

The terms of the acquisition of the patent includes a royalty of $0.25, due to the inventor, on the sale of each training urinal.

6. Stockholders' Deficiency
6. Stockholders' Deficiency

6.  STOCKHOLDERS’ DEFICIENCY

 

As of September 30, 2013, the Company had 25,000,000 common shares authorized ($.001 par value), and 7,633,750 common shares issued and outstanding.

 

On September 25, 2013 the Company sold 5,000,000 shares of its unregistered common stock $0.001 par at $0.32 per share for an aggregate purchase price of $1,600,000 to Kent Campbell, the Company’s Chief Executive Officer.

8. Subsequent Events
8. Subsequent Events

8.  SUBSEQUENT EVENTS

 

Stock issuances, ordering an additional production mold, real property acquisitions, etc.

 

On or about October 15, 20132013-10-15, the Company sold to: (i) Sarah Campbell, its recently appointed Chief Administrative Officer, 100,000 shares of its restricted common stock for a purchase price of $0.32 per share for a total of $32,000, and (ii) Thomas G. Campbell 150,000 shares of its restricted common stock for a purchase price of $0.32 per share for a total purchase price of $48,000.

 

On October 16, 2013 the Company entered into a lease with an unaffiliated third party for a warehouse for a term of one year. The lease may be terminated by the Company with 30 days notice within the first 6 months of the lease term.  The warehouse occupies approximately 1,250 square feet of space with a monthly rent of $960 for the first six months and $1,065 per month thereafter.

 

On October 21, 2013, the Company purchased all of the outstanding membership units of Ashland Holdings, LLC ("Ashland") from our CEO Kent Campbell for a purchase price of $20,000.  At the time of purchase Ashland's sole asset consisted of $19,000 in cash. 

 

On October 29, 2013, our wholly-owned subsidiary, Ashland, entered into an Agreement for the Purchase and Sale of Real Estate (the “Agreement”) with TD Bank pursuant to which Ashland agreed to purchase .90 acres of real estate, including an office building thereon, located in Wildwood, Florida (the “Property”).

 

The purchase price for the Property is $47,500 (the “Purchase Price”).  Ashland paid to American Home Title Insurance, as escrow agent, a $4,750 earnest money deposit to be applied to the Purchase Price at closing.  Unless otherwise extended, the closing under the Agreement is required to take place no later than 15 days after completion of the investigation period of the Property, which investigation must be completed within 30 days from the date of the Agreement.

2. Summary of Significant Accounting Policies: Accounting Method (Policies)
Accounting Method

Accounting Method

 

The Company recognizes income and expenses based on the accrual method of accounting.

2. Summary of Significant Accounting Policies: Dividend Policy (Policies)
Dividend Policy

Dividend Policy

 

The Company has not yet adopted a policy regarding payment of dividends.

2. Summary of Significant Accounting Policies: Income Taxes (Policies)
Income Taxes

Income Taxes

 

The Company utilizes the liability method of accounting for income taxes.  Under the liability method deferred tax assets and liabilities are determined based on the differences between financial reporting and the tax bases of the assets and liabilities and are measured using the enacted tax rates and laws that will be in effect, when the differences are expected to reverse.  An allowance against deferred tax assets is recorded, when it is more likely than not, that such tax benefits will not be realized.

2. Summary of Significant Accounting Policies: Cash and Cash Equivalents (Policies)
Cash and Cash Equivalents

Cash and Cash Equivalents

 

Cash and cash equivalents consist of cash in banks and highly liquid investments with original maturities of three months or less at the date of acquisition.

2. Summary of Significant Accounting Policies: Long-lived Assets (Policies)
Long-lived Assets

Long-lived Assets

The Company reviews its long-lived assets and intangibles periodically to determine potential impairment by comparing the carrying value of the long-lived assets with the estimated future cash flows expected to result from the use of the assets, including cash flows from disposition. Should the sum of the expected future cash flows be less than the carrying value, the Company would recognize an impairment loss. An impairment loss would be measured by comparing the amount by which the carrying value exceeds the fair value of the long-lived assets and intangibles. To date, management has determined that no impairment of long-lived assets exists.

2. Summary of Significant Accounting Policies: Revenue Recognition Policy (Policies)
Revenue Recognition Policy

Revenue Recognition

 

Revenue is recognized upon the completion of the sale and shipment of the training urinal product. The product is sold via the internet and is delivered to customers or to wholesale resellers using a ground courier service.

2. Summary of Significant Accounting Policies: Advertising and Market Development Policy (Policies)
Advertising and Market Development Policy

Advertising and Market Development

 

The company expenses advertising and market development costs as incurred. The Company incurred $0 in advertising and market development costs for the nine month periods ended September 30, 2013 and 2012.

2. Summary of Significant Accounting Policies: Financial Instruments Policy (Policies)
Financial Instruments Policy

Financial Instruments

 

The carrying amounts of financial instruments, including cash and accounts payable, are considered by management to be their estimated fair values due to their short term maturities.

2. Summary of Significant Accounting Policies: Basic and Diluted Net Income (loss) Per Share Policy (Policies)
Basic and Diluted Net Income (loss) Per Share Policy

Basic and Diluted Net Income (Loss) Per Share

 

Basic net income (loss) per share amounts are computed based on the weighted average number of shares actually outstanding. Diluted net income (loss) per share amounts are computed using the weighted average number of common shares and common equivalent shares outstanding as if shares had been issued on the exercise of any common share rights unless the exercise becomes antidilutive and then the basic and diluted per share amounts are the same. As of September 30, 2013 and 2012, there were no common stock equivalents outstanding.

2. Summary of Significant Accounting Policies: Financial and Concentrations Risk Policy (Policies)
Financial and Concentrations Risk Policy

Financial and Concentrations Risk

 

The Company does not have any concentration or related financial credit risk.

2. Summary of Significant Accounting Policies: Estimates and Assumptions Policy (Policies)
Estimates and Assumptions Policy

Estimates and Assumptions

 

Management uses estimates and assumptions in preparing financial statements in accordance with accounting principles generally accepted in the United States of America.  Those estimates and assumptions affect the reported amounts of the assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses.  Actual results could vary from the estimates that were assumed in preparing these financial statements.

2. Summary of Significant Accounting Policies: Principles of Consolidation Policy (Policies)
Principles of Consolidation Policy

Principles of Consolidation

 

The accompanying consolidated financial statements include the accounts of the Company and its subsidiary from its inception. All significant intercompany accounts and balances have been eliminated in consolidation.

2. Summary of Significant Accounting Policies: Recent Accounting Pronouncements Policy (Policies)
Recent Accounting Pronouncements Policy

Recent Accounting Pronouncements

 

The Company does not expect that the adoption of recent accounting pronouncements will have a material impact on its financial statements.

1. Organization (Details) (USD $)
9 Months Ended
Sep. 30, 2013
Dec. 31, 2012
Dec. 31, 1999
Details
 
 
 
Entity Incorporation, State Country Name
Nevada 
 
 
Entity Incorporation, Date of Incorporation
Dec. 30, 1999 
 
 
Common stock shares authorized
25,000,000 
25,000,000 
25,000,000 
Common stock par value
$ 0.001 
$ 0.001 
$ 0.001 
2. Summary of Significant Accounting Policies: Advertising and Market Development Policy (Details) (USD $)
9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Details
 
 
Advertising and Market Development
$ 0 
$ 0 
4. Equipment - Production Mold (Details) (USD $)
3 Months Ended 9 Months Ended 197 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Aug. 2, 2010
Details
 
 
 
 
 
 
Property, Plant and Equipment, Other, Gross
 
 
 
 
 
$ 1,700 
Depreciation and amortization
$ 85 
$ 85 
$ 255 
$ 255 
$ 29,585 
 
5. Patent (Details) (USD $)
9 Months Ended
Sep. 30, 2013
Details
 
Royalty due to inventor
$ 0.25 
6. Stockholders' Deficiency (Details) (USD $)
Sep. 30, 2013
Sep. 25, 2013
Dec. 31, 2012
Dec. 31, 1999
Details
 
 
 
 
Common stock shares authorized
25,000,000 
 
25,000,000 
25,000,000 
Common stock shares outstanding
7,633,750 
 
2,633,750 
 
Common stock shares sold
 
5,000,000 
 
 
Sale of Stock, Price Per Share
 
$ 0.32 
 
 
Purchase Price of common stock shares sold
 
$ 1,600,000 
 
 
8. Subsequent Events (Details) (USD $)
9 Months Ended 1 Months Ended 1 Months Ended
Sep. 30, 2013
Sep. 25, 2013
Oct. 30, 2013
Sarah Campbell
Oct. 15, 2013
Sarah Campbell
Oct. 30, 2013
Thomas G. Campbell
Sep. 30, 2013
Thomas G. Campbell
Oct. 15, 2013
Thomas G. Campbell
Sale of Stock, Transaction Date
Oct. 15, 2013 
 
 
 
 
 
 
Sale of Stock, Number of Shares Issued in Transaction
 
 
100,000 
 
150,000 
1,466,225 
 
Sale of Stock, Price Per Share
 
$ 0.32 
 
$ 0.32 
 
 
$ 0.32 
Sale of Stock, Consideration Received on Transaction
 
 
$ 32,000 
 
$ 48,000 
 
 
8. Subsequent Events: Warehouse Lease (Details) (USD $)
1 Months Ended 6 Months Ended
Oct. 31, 2013
Oct. 16, 2014
Apr. 16, 2014
Details
 
 
 
Lease Terms
On October 16, 2013 the Company entered into a lease with an unaffiliated third party for a warehouse for a term of one year. The lease may be terminated by the Company with 30 days notice within the first 6 months of the lease term. The warehouse occupies approximately 1,250 square feet of space with a monthly rent of $960 for the first six months and $1,065 per month thereafter. 
 
 
Operating Leases, Rent Expense, Minimum Rentals
 
$ 1,065 
$ 960 
8. Subsequent Events: Ashland (Details) (USD $)
Oct. 21, 2013
Details
 
Purchase Price of Ashland
$ 20,000 
Ashland's sole asset
$ 19,000 
8. Subsequent Events: Purchase of Property (Details) (USD $)
Oct. 29, 2013
Details
 
Purchase Price of Property
$ 47,500 
Earnest money deposit to be applied to the Purchase Price at closing
$ 4,750