FREEBUTTON, INC.
(Formerly Secured Window Blinds, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION
The Company was incorporated on November 27, 2006 under the laws of the State of Nevada and extra-provincially registered under the laws of the Province of Ontario on February 2, 2007. On September 28, 2012, the Company with a majority of the shareholders and directors changed its name from Secured Window Blinds, Inc. to Freebutton, Inc.
Freebutton, Inc. has ceased the business of offering window blind system products and now intends to operate, through “TheFreeButton.com”, as an instant-win promotion online site where users can click the “Free Button” to instantly win the products offered on the Company’s homepage without entering their email.
Going concern
To date the Company has generated no revenues from its business operations and has incurred operating losses since inception of $292,657. As at March 31, 2013, the Company has a working capital deficit of $205,541. The Company requires additional funding to meet its ongoing obligations and to fund anticipated operating losses. The ability of the Company to continue as a going concern is dependent on raising capital to fund its initial business plan and ultimately to attain profitable operations. Accordingly, these factors raise substantial doubt as to the Company’s ability to continue as a going concern. The Company intends to continue to fund its business by way of private placements and advances from related parties as may be required. As of March 31, 2013 the Company has issued 150,000,000 founders shares at $0.0000667 per share for net proceeds of $10,000 to the Company and 9,300,000 private placement shares at $0.001666 per share for net proceeds of $15,500 and 100,000 private placement shares at $0.025 per share for net proceeds of $25,000 to the Company. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
Unaudited Financial Statements
The accompanying unaudited financial statements have been prepared in accordance with U.S. generally accepted accounting principles for financial information and with the instructions to Form 10-Q. They do not include all information and footnotes required by United States generally accepted accounting principles for complete financial statements. However, except as disclosed herein, there has been no material changes in the information disclosed in the notes to the financial statements for the year ended December 31, 2012 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission. The unaudited financial statements should be read in conjunction with those financial statements included in the Form 10-K. In the opinion of Management, all adjustments considered necessary for a fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the three months ended March 31, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013.
Segmented Reporting
FSAB ASC 280, “Disclosure about Segments of an Enterprise and Related Information”, changed the way public companies report information about segments of their business in their quarterly reports issued to shareholders. It also requires entity-wide disclosures about the products and services the entity provides, the material countries in which it holds assets and reports revenues and its major customers.
Comprehensive Loss
“Reporting Comprehensive Income,” establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at March 31, 2013, the Company has no items that represent a comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.
FREEBUTTON, INC.
(Formerly Secured Window Blinds, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Use of Estimates and Assumptions
Preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain 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 period. Accordingly, actual results could differ from those estimates.
Financial Instruments
All significant financial assets, financial liabilities and equity instruments of the Company are either recognized or disclosed in the financial statements together with other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit risk. Where practical the fair values of financial assets and financial liabilities have been determined and disclosed; otherwise only available information pertinent to fair value has been disclosed.
Website Development Costs/Domain Names
The Company accounts for its Development Costs in accordance with ASC-350-50, “Accounting for Website Development Costs.” The Company’s website comprises multiple features and offerings that are currently developed with on-going refinements. In connection with the development of its products, the Company has incurred external costs for hardware, software, and consulting services, and internal costs for payroll and related expenses of its technology directly involved in the development. All hardware costs are capitalized as fixed assets. Purchased software will be capitalized in accordance with ASC codification 350-50-25 related to accounting for the costs of computer software developed or obtained for internal use. All other costs are reviewed to determine whether they should be capitalized or expensed.
Pursuant to ASC 360, the Company periodically evaluates, at least annually, whether facts or circumstances indicate that the carrying value of its depreciable assets to be held and used may not be recoverable. Domain names are generally not amortized. If such circumstances are determined to exist, an estimate of undiscounted future cash flows produced by the long-lived asset, or the appropriate grouping of assets, is compared to the carrying value to determine whether impairment exists. In the event that the carrying amount of long-lived assets exceeds the undiscounted future cash flows, then the carrying amount of such assets is adjusted to their fair value. The Company reports an impairment cost as a charge to operations at the time it is recognized
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Impairment of Long-Lived Assets
Long-lived assets, such as property and domain names and website development costs are reviewed for impairment when recoverability of assets to be held and used is measured by comparison of the carrying amount of an asset to estimated undiscounted future cash flows expecting an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset
Fixed Assets
Fixed assets are carried at cost less accumulated depreciation. Depreciation is provided over their estimated useful lives, using the straight-line method. Estimated useful lives of the plant and equipment are as follows:
The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the statement of income. Accumulated depreciation to date on office equipment is $411
Loss per Common Share
Basic earnings (loss) per share includes no dilution and is computed by dividing income (loss) available to common stockholders by the weighted average number of common shares outstanding for the period. Dilutive earnings (loss) per share reflect the potential dilution of securities that could share in the earnings of the Company. Because the Company does not have any potential dilutive securities, the accompanying presentation is only on the basic loss per share.
FREEBUTTON, INC.
(Formerly Secured Window Blinds, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Income Taxes
The Company follows the liability method of accounting for income taxes. Under this method, 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 balances and tax loss carry-forwards. Deferred tax assets and liabilities are measured using enacted or substantially enacted tax rates expected to apply to the taxable income in the years in which those differences are expected to be recovered or settled. 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. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of enactment or substantive enactment.
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 is a revision to SFAS No. 123, "Accounting for Stock-Based Compensation," and supersedes Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees," and its related implementation guidance. 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. On February 25, 2013, the Board of Directors of the Company adopted a new equity incentive award plan, named the FreeButton, Inc. 2013 Equity Incentive Award Plan (the “2013 Plan”), which has been approved by a majority, or approximately 65% of outstanding shareholders of the Company on February 25, 2013.The new plan is an “omnibus plan” under which stock options, stock appreciation rights, performance share awards, restricted stock and restricted stock units can be awarded. The 2013 Plan’s initial share reservation will be 3,500,000 shares. The term of the plan is for 10 years from the date of its adoption. As of March 31, 2013 the Company has issue 7,000 common shares. (Refer Note 3)
Recent Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
NOTE 3 – STOCKHOLDERS’ EQUITY/DEFICIT
The Stockholders’ Equity/Deficit section of the Company contains the following classes of Capital Stock as of March 31, 2013.
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Common stock $0.001 par value: 75,000,000 shares authorized: 33,411,620 shares issued and outstanding.
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On December 15, 2006, the Company issued 105,000,000 common shares at $0.0000666 per share to the sole director and President of the Company for cash proceeds of $7,000.
On May 12, 2008, the Company issued 45,000,000 common shares at $0.0000666 per share to the sole director and President of the Company for cash proceeds of $3,000.
From September to August, 2008, the Company issued 9,300,000 shares through private placements at $0.001666 per share for net proceeds to the Company of $15,500.
On June 26, 2012, the President of the Company forgave all debts owing to him by the Company for all advances/shareholders loans totalling $54,742. All these sums are reflected as a credit to additional-paid-in-capital.
On August 15, 2012, two shareholders of the Company returned 126,000,000 (pre-split 8,400,000) restricted shares of common stock to treasury and the shares were cancelled by the Company. The shares were returned to treasury for no consideration to the shareholder. Following the cancellation the Company now has 33,300,000 (pre-split 2,220,000 shares of common stock outstanding.
FREEBUTTON, INC.
(Formerly Secured Window Blinds, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 3 – STOCKHOLDERS’ EQUITY/DEFICIT (continued)
On August 22, 2012 a majority of shareholders and the directors approved a special resolution to undertake a forward split of the common stock of the Company on a 15 new shares for 1 old share, which was effected on October 1, 2012, increasing the outstanding shares from 2,220,000 to 33,300,000.
On February 25, 2013, the Company issued 100,000 common shares through a private placement at $0.25 per share for net proceeds to the Company of $25,000.
On February 25, 2013 the Company issued under the 2013 Plan a total of 7,000 common shares to one individual and two companies. Total value received for services rendered was $4,430 (refer Equity Incentive Award Plan)
All references in these financial statements to number of common shares, price per share and weighted average number of common shares outstanding prior to the 15:1 forward split have been adjusted to reflect the stock split on a retroactive basis, unless otherwise noted.
Equity Incentive Award Plan
On February 25, 2013, the Board of Directors of the Company adopted a new equity incentive award plan, named the FreeButton, Inc. 2013 Equity Incentive Award Plan (the “2013 Plan”), which has been approved by a majority, or approximately 65% of outstanding shareholders of the Company on February 25, 2013.
The new plan is an “omnibus plan” under which stock options, stock appreciation rights, performance share awards, restricted stock and restricted stock units can be awarded. The 2013 Plan’s initial share reservation will be 3,500,000 shares. The term of the plan is for 10 years from the date of its adoption.
On February 25, 2013 the Company issued under the 2013 Plan a total of 7,000 common shares to one individual and two companies. Total value received for services rendered was $4,430.
NOTE 4 – RELATED PARTY TRANSACTIONS
On December 15, 2006 the Company issued 105,000,000 shares of common stock at $0.0000666 per share to its sole director and President of the Company for cash proceeds of $7,000. On May 12, 2008 the Company issued 45,000,000 shares of common stock at $0.0000666 per share to its sole director and President of the Company for cash proceeds of $3,000. During the nine months ending September 30, 2012 the President of the Company paid outstanding payables owed by the Company of $28,400. On June 26, 2012, the President of the Company forgave all debts owing to him by the Company for all advances/shareholders loans totalling $54,742. All these sums are reflected as a credit to additional-paid-in-capital.
On August 15, 2012, two shareholder of the Company returned 126,000,000 (pre-split 8,400,000) restricted shares of common stock to treasury and the shares were cancelled by the Company. The shares were returned to treasury for no consideration to the shareholder. Following the cancellation, as of December 31, 2012 there was 33,300,000 (pre-split 2,220,000) shares of common stock outstanding.
As at March 31, 2013 the Company has a shareholders loan in the amount of $4,072 owed to the President of the Company. The amounts due to the related party are unsecured and non- interest-bearing with no set terms of repayment.
During the three month period ended March 31, 2013, the Company paid $33,000 in total to two managers as management fees.
FREEBUTTON, INC.
(Formerly Secured Window Blinds, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 5 – CONVERTIBLE PROMISSORY NOTE
On August 9, 2012 the Company signed a Convertible Promissory Note for $110,000, with an interest rate of 8% with a maturity date of August 9, 2013. The issuer of the Convertible Promissory Note has the option to convert all or portion of the Promissory Note into common shares of the Company. The Conversion price share would be $0.10, unless the Company has, between the issue date of the Promissory Note and its Maturity date, sold its capital stock in financing in which the Company received gross proceeds of an excess of $1,000,000 at a differing price.
On November 20, 2012 the Company signed a Convertible Promissory Note for $25,000, with an interest rate of 8% with a maturity date of May 20, 2013. The issuer of the Convertible Promissory Note has the option to convert all or portion of the Promissory Note into common shares of the Company. The Conversion price share would be $0.10, unless the Company has, between the issue date of the Promissory Note and its Maturity date, sold its capital stock in financing in which the Company received gross proceeds of an excess of $225,000 at a differing price.
On December 13, 2012 the Company signed a Convertible Promissory Note for $10,000, with an interest rate of 8% with a maturity date of June 13, 2013. The issuer of the Convertible Promissory Note has the option to convert all or portion of the Promissory Note into common shares of the Company. The Conversion price share would be $0.10, unless the Company has, between the issue date of the Promissory Note and its Maturity date, sold its capital stock in financing in which the Company received gross proceeds of an excess of $90,000 at a differing price.
On January 7, 2013 the Company signed a Convertible Promissory Note for $13,500, with an interest rate of 8% with a maturity date of October 3, 2013. The issuer of the Convertible Promissory Note has the option to convert all or portion of the Promissory Note into common shares of the Company. The Conversion price share would be $0.10, unless the Company has, between the issue date of the Promissory Note and its Maturity date, sold its capital stock in financing in which the Company received gross proceeds of an excess of $121,500 at a differing price.
On March 18, 2013 the Company signed a Convertible Promissory Note for $25,000, with an interest rate of 8% with a maturity date of September 18, 2013. The issuer of the Convertible Promissory Note has the option to convert all or portion of the Promissory Note into common shares of the Company. The Conversion price share would be $0.10, unless the Company has, between the issue date of the Promissory Note and its Maturity date, sold its capital stock in financing in which the Company received gross proceeds of an excess of $225,000 at a differing price.
The Company has adopted the FASB for reporting purposed. As of March 31, 2013 the Company had net operating loss carry forwards of approximately $288,227 that may be available to reduce future years’ taxable income and will expire beginning in 2026. Availability of loss usage is subject to change of ownership limitations under Internal Revenue Code 382. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the future tax loss carryforwards.
NOTE 7 – SUBSEQUENT EVENTS
On April 25, 2013 the Company signed a Convertible Promissory Note for $25,000, with an interest rate of 8% with a maturity date of October 25, 2013. The issuer of the Convertible Promissory Note has the option to convert all or portion of the Promissory Note into common shares of the Company. The Conversion price share would be $0.10, unless the Company has, between the issue date of the Promissory Note and its Maturity date, sold its capital stock in financing in which the Company received gross proceeds of an excess of $225,000 at a differing price.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operation
This Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to provide a reader of our financial statements with a narrative from the perspective of our management on our financial condition, results of operations, liquidity, and certain other factors that may affect our future results. The following discussion and analysis should be read in conjunction with our consolidated financial statements and the accompanying notes thereto included in “Item 1. Financial Statements.” In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. See “Forward-Looking Statements.” Our results and the timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors.
Business Overview
We operate sweepstakes websites featuring free giveaways of premier consumer products to users by participating in online games. Our partner companies provide premier consumer products in various categories, such as sports, electronics, travel, gaming, style, bags, etc for free giveaway, and in return, receive a series of benefits including product exposure, advertising space and sales leads. We also operate an eCommerce website where the users can purchase products of our partner companies.
The Company was engaged in the business of offering window blind system products and ceased such operation upon the consummation of a change of control in August 2012. Since then, current management has been building the Company to be a platform for marketing and advertising initiatives and a marketplace for consumer products.
Plan of Operations
During the next twelve months we anticipate implementing:
We plan to launch two additional websites, FreeButtonGaming.com & FreeButtonPlus.com.
FreeButtonPlus.com
FreeButtonPlus.com is designed to offer unique benefits to member users upon signing up our “Free+” program and paying for a fee. “Free+” program provides member users with benefits including, gifts with purchase, exclusive giveaways for members only, no CAPTCHA system prior to play, special offers from partner companies, ending- soon alerts, monthly attempt rewards, double donation values. We plan to launch FreeButtonPlus.com in the near future.
FreeButtonGaming.com.
FreeButtonGaming.com. is intended for giveaway events with enhanced changes of winning, to be participated by limited number of paid users playing skill-required games. The number of participating users and the amount each user required to pay will be determined depending on the cost of winnable items. The participating users will be sent a link to enter a skill-required online game, such as “breakout” or “jewel mania”. The user with the highest score in each game will win the product. Additionally, we plan to build an Application Programming Interface (API) and license the API to other website publishers to be utilized for their own “play-to-win” games. We plan to launch FreeButtonGaming.com in approximately July 2013.
Integration Site
We plan to integrate all four discussed websites into one main website FreeButton.com, upon completion of beta testing to our satisfaction. We estimate that we will complete the integration in approximately August 2013.
Our President, Chief Executive Officer and Secretary, James Lynch, builds partnerships with consumer products manufacturer, drives sales, perform other functions of an executive, managerial or administrative nature.
Our Vice President and Treasury, Dallas Steinberger, is responsible for our website construction and assist with marketing and generating traffic to our websites.
Results of Operation
We did not generate any revenue during the quarter ended March 31, 2013 and has not generated any revenue since inception November 27, 2006. Total expenses for the quarter ended March 31, 2013 were $88,227 resulting in an operating loss of $88,227 as compared to total expenses of $4,634 resulting in an operating loss of $4,634 for the quarter ended March 31, 2012. The increase in total expenses accompanied the commencement of our new business operation upon the consummation of a change of control occurred in August 2012. The operating loss for the quarter ended March 31, 2013 is a result of office and general expenses in the amount of $22,836, management fee of $33,000, marketing expenses of $10,567 and professional fees in the amount of $21,824 as compared to office and general expenses in the amount of $134, management fee of nil, marketing expenses of nil and professional fees in the amount of $4,500 for the quarter ended March 31, 2012. For the quarter ended March 31, 2013, we incurred a loan interest of $3,206 as compared to loan interest of nil for the quarter ended March 31, 2012
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Capital Resources and Liquidity
As of March 31, 2013, we had $6,326 of cash as compared to $21,674 of cash for the year ended December 31, 2012. We anticipate that our current cash and cash equivalents and cash generated from financing activities will be insufficient to satisfy our liquidity requirements for the next 12 months. To date the Company has generated no revenues from its business operations and has incurred operating losses since inception of $292,657. As at March 31, 2013, the Company has a working capital deficit of $205,541.
The Company requires additional funding to meet its ongoing obligations and to fund anticipated operating losses. Our auditor has expressed substantial doubt about our ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on raising capital to fund its initial business plan and ultimately to attain profitable operations. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.
We expect to incur product development, marketing and professional and administrative expenses as well expenses associated with maintaining our SEC filings. We will require additional funds during this time and will seek to raise the necessary additional capital. If we are unable to obtain additional financing, we may be required to reduce the scope of our business development activities, which could harm our business plans, financial condition and operating results. Additional funding may not be available on favorable terms, if at all. The Company intends to continue to fund its business by way of equity or debt financing and advances from related parties.
If we raise additional capital through the issuance of equity or convertible debt securities, the percentage ownership of our company held by existing shareholders will be reduced and those shareholders may experience significant dilution. In addition, new securities may contain certain rights, preferences or privileges that are senior to those of our common stock. In the event we are unsuccessful in raising additional capital through the issuance of equity or convertible debt securities, we will seek to raise additional capital through the issuance of debt or its equivalents. Issuance of debt or its equivalents will result in increased interest expense.
We are a development stage company with no revenues to date, and therefore we may have to pay high cost in securing a financing. We cannot assure you that we will be able to raise the working capital as needed in the future on terms acceptable to us, if at all. Any delay to raise capital as needed would have a material adverse effect on our business, financial condition and results of operations.
If we cannot raise additional fund, we will have to cease business operations. As a result, investors in the Company’s common stock would lose all of their investment.
Off Balance Sheet Arrangements
There are no off-balance sheet arrangements currently contemplated by management or in place that are reasonably likely to have future effect on the business, financial condition, revenue or expenses and/or result of operations.
Recent Accounting Pronouncements
We have implemented all new accounting pronouncements that are in effect and that may impact its financial statements. We do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK
Smaller reporting companies are not required to provide the information required by this item.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, including our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act as of the end of the period covered by this report. Our management does not expect that our disclosure controls and procedures will prevent all error and all fraud. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.
Based on the evaluation as of March 31, 2013, for the reasons set forth below, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were not effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control our financial reporting as of March 31, 2013, the Company determined that the following items constituted a material weakness:
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The Company does not have an independent audit committee in place, which would provide oversight of the Company’s officers, operations and financial reporting function.
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The Company’s disclosure controls and procedures do not provide adequate segregation of duties;
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The Company does not have effective controls over period end financial disclosure and reporting processes.
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Management believes that the above material weaknesses could result in a material misstatement in our financial statements in future periods.
Management believes that the appointment of one or more outside directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on our Board.
We will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements when our financial position permits.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) or 15d-15(f)) during the quarter ended March 31, 2013 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
To the best of our knowledge, there are no material pending legal proceedings to which we are a party or of which any of our property is the subject.
ITEM 1A. RISK FACTORS
Smaller reporting companies are not required to provide the information required by this item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
On February 25, 2013, the Company issued a total of 7,000 shares of the Company’s commons stock under the 2013 Equity Incentive Award Plan, to three service providers, at a price of $0.633 per share. Total value received for services rendered was $4,430. The issuance of these shares was exempt from the registration requirements of the Securities Act, pursuant to Section 4(2) thereof as a transaction by an issuer not involving a public offering.
On February 25, 2013, the Company issued 100,000 shares of the Company’s commons stock to an investor at a price of $0.25 per share, in exchange for proceeds of $25,000. The issuance of these shares was exempt from the registration requirements of the Securities Act pursuant to Section 4(2) thereof as a transaction by an issuer not involving a public offering.
On January 7, 2013 the Company issued promissory note of a principal amount of $13,500, with a maturity date of October 3, 2013 and an interest of 8%. The holder is entitled to convert any portion of the outstanding and unpaid amount into our common stock at conversion price of $0.10 per share, subject to adjustments if the Company issues shares in a financing for gross proceeds exceeding $121,500 within the term of the note. The issuance of these shares was exempt from the registration requirements of the Securities Act, pursuant to Section 4(2) thereof as a transaction by an issuer not involving a public offering.
On March 18, 2013, the Company issued a six-month promissory note of a principal amount of $25,000, with an interest of 8%. The holder is entitled to convert any portion of the outstanding and unpaid amount into our common stock at conversion price of $0.10 per share, subject to adjustments if the Company issues shares in a financing for gross proceeds exceeding $225,000 within the term of the note. The issuance of these shares was exempt from the registration requirements of the Securities Act, pursuant to Section 4(2) thereof as a transaction by an issuer not involving a public offering.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
ITEM 5. OTHER INFORMATION
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
On April 25, 2013 the Company issued a six-month promissory note of a principal amount of $25,000, with an interest of 8%. The holder is entitled to convert any portion of the outstanding and unpaid amount into our common stock at conversion price of $0.10 per share, subject to adjustments if the Company issues shares in a financing for gross proceeds exceeding $225,000 within the term of the note.
ITEM 6. EXHIBITS
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10.1
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FreeButton, Inc. 2013 Equity Incentive Award Plan, incorporated by reference to Exhibit 99.1 to Current Report on Form 8-K filed on March 28, 2013.
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31.1
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Certification of Principal Executive Officer and Principal Accounting Officer pursuant to 18 U.S.C 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
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32.1*
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Certification of Principal Executive Officer and Principal Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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101.INS*
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XBRL Instance Document
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101.SCH*
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XBRL Taxonomy Extension Schema Document
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101.CAL*
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XBRL Taxonomy Extension Calculation Linkbase Document
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101.DEF*
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XBRL Taxonomy Extension Definition Linkbase Document
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101.LAB*
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XBRL Taxonomy Extension Label Linkbase Document
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101.PRE*
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XBRL Taxonomy Extension Presentation Linkbase Document
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† Management contract or compensatory plan arrangement
*In accordance with the SEC Release 33-8238, deemed being furnished and not filed.
**Furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise not subject to liability under these sections.
SIGNATURES
Pursuant to the requirements of the Exchange Act or 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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FreeButton, Inc.
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Dated: May 15, 2013
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By:
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/s/ James Edward Lynch, Jr.
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James Edward Lynch, Jr.
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President, Chief Executive Officer and Secretary
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(Duly Authorized Officer, Principal Executive Officer and Principal Accounting Officer)
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