UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-Q
[X] QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the quarterly period ended: June 30, 2015
[ ] TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission
File Number 000-18656
RAPID
FIRE MARKETING, INC.
(Exact Name of Registrant as Specified in Its Charter)
Nevada |
|
26-0214836 |
(State
or Other Jurisdiction of
Incorporation
or Organization) |
|
(I.R.S. Employer
Identification No.) |
|
|
|
311
West Third Street, Suite 1234
Carson
City, NV |
|
89703 |
(Address of Principal Executive Offices) |
|
(Zip Code) |
(775)
461-5127
(Issuer’s
Telephone Number, Including Area Code)
Former
name, former address and former fiscal year, if changed since last report
Indicate
by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [ ]
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See definitions of a “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check One)
[ ]
Large Accelerated Filer |
[ ]
Accelerated Filer |
|
|
[ ]
Non-accelerated Filer (do not check if smaller reporting company) |
[X]
Smaller Reporting Company |
Indicate
by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
As
of August 17, 2015, the Company had 9,012,284,776 shares of its common stock, $0.001 par value per share, outstanding.
RAPID
FIRE MARKETING, INC.
PART
I – FINANCIAL INFORMATION
ITEM
1. FINANCIAL STATEMENTS (UNAUDITED)
RAPID
FIRE MARKETING, INC
BALANCE
SHEETS
(unaudited)
| |
June 30, 2015 | | |
December 31, 2014 | |
Assets: | |
| | | |
| | |
Cash and cash equivalents | |
$ | 459 | | |
$ | 4,430 | |
Accrued interest | |
| 75,212 | | |
| 52,179 | |
Inventory | |
| 40,157 | | |
| 40,373 | |
Deposit on inventory | |
| 104,000 | | |
| 104,000 | |
Prepaid expense | |
| - | | |
| 22,500 | |
Current assets | |
| 219,828 | | |
| 223,482 | |
| |
| | | |
| | |
Property and equipment, net | |
| 89,250 | | |
| - | |
Total assets | |
$ | 309,078 | | |
$ | 223,482 | |
| |
| | | |
| | |
Liabilities and Stockholders’ Deficit: | |
| | | |
| | |
Current liabilities | |
| | | |
| | |
Accounts payable and accrued liabilities | |
$ | 904,663 | | |
$ | 670,959 | |
Convertible notes payable, net discount of $19,952 and $25,767 | |
| 110,198 | | |
| 112,733 | |
Derivative liabilities | |
| 75,094 | | |
| 177,323 | |
Current liabilities | |
| 1,089,955 | | |
| 961,015 | |
Total liabilities | |
| 1,089,955 | | |
| 961,015 | |
| |
| | | |
| | |
Commitments and contingencies | |
| | | |
| | |
| |
| | | |
| | |
Stockholders’ Deficit: | |
| | | |
| | |
Series A1 Convertible Preferred stock, $0.001 par value, 25,000,000 shares authorized, 2,790,000 issued and outstanding at June 30, 2015 and December 31, 2014 | |
| 2,790 | | |
| 2,790 | |
Series A2 Convertible Preferred Stock, $0.001 par value, 300 shares authorized, 95 and 125 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively | |
| - | | |
| - | |
Series B Preferred Stock, $0.001 par value, 16,000,000 shares authorized, issued and outstanding at June 30, 2015 and December 31, 2014 | |
| 16,000 | | |
| 16,000 | |
Series C Preferred Stock, $0.001 par value, 5,000 shares authorized, 5,000 shares issued and outstanding at June 30, 2015 and December 31, 2014 | |
| 5 | | |
| 5 | |
Common Stock, $0.001 par value 20,000,000,000 shares authorized, 8,195,618,109 and
4,960,208,217 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively. 2,856,694,932 shares
reserved for issuance at June 30, 2015 | |
| 8,195,619 | | |
| 4,960,208 | |
Stock to be issued | |
| 1,014,906 | | |
| 1,014,906 | |
Additional paid-in capital | |
| 19,675,354 | | |
| 22,094,591 | |
Stock subscription receivable | |
| (5,350,000 | ) | |
| (5,516,000 | ) |
Accumulated deficit | |
| (24,335,551 | ) | |
| (23,310,033 | ) |
Total stockholders’ deficit | |
| (780,877 | ) | |
| (737,533 | ) |
Total liabilities and stockholders’ deficit | |
$ | 309,078 | | |
$ | 223,482 | |
See
accompanying notes to financial statements.
RAPID
FIRE MARKETING, INC
STATEMENTS
OF OPERATIONS
(unaudited)
| |
Three Months
Ended June 30, 2015 | | |
Three Months
Ended June 30, 2014 | | |
Six Months
Ended June 30, 2015 | | |
Six Months
Ended June 30, 2014 | |
| |
| | |
| | |
| | |
| |
Sales | |
$ | 932 | | |
$ | 844 | | |
$ | 1,595 | | |
$ | 1,703 | |
| |
| | | |
| | | |
| | | |
| | |
Costs of sales | |
| 1,463 | | |
| 588 | | |
| 2,190 | | |
| 1,269 | |
| |
| | | |
| | | |
| | | |
| | |
Gross profit (loss) | |
| (531 | ) | |
| 256 | | |
| (595 | ) | |
| 434 | |
| |
| | | |
| | | |
| | | |
| | |
Operating expenses: | |
| | | |
| | | |
| | | |
| | |
Sales and marketing | |
| 8,436 | | |
| 26,094 | | |
| 60,487 | | |
| 46,786 | |
General and administrative | |
| 99,588 | | |
| 194,335 | | |
| 219,496 | | |
| 428,043 | |
Research and development | |
| - | | |
| 40,625 | | |
| - | | |
| 40,625 | |
Stock for services | |
| 42,500 | | |
| 30,000 | | |
| 85,000 | | |
| 80,737 | |
Total operating expenses | |
| 150,524 | | |
| 291,054 | | |
| 364,983 | | |
| 596,191 | |
| |
| | | |
| | | |
| | | |
| | |
Loss from operations | |
| (151,055 | ) | |
| (290,798 | ) | |
| (365,578 | ) | |
| (595,757 | ) |
| |
| | | |
| | | |
| | | |
| | |
Other income (expense) | |
| | | |
| | | |
| | | |
| | |
Interest income | |
| 13,377 | | |
| 2,120 | | |
| 26,703 | | |
| 4,573 | |
Interest expense | |
| (131,830 | ) | |
| (106,581 | ) | |
| (312,837 | ) | |
| (135,067 | ) |
Day one charge and change in fair value of derivative liabilities | |
| 140,813 | | |
| 1,328,026 | | |
| 152,229 | | |
| (343,932 | ) |
Loss on common shares issued | |
| - | | |
| - | | |
| (526,035 | ) | |
| (4,478,824 | ) |
Total other income (expense) | |
| 22,360 | | |
| 1,223,565 | | |
| (659,940 | ) | |
| (4,953,250 | ) |
| |
| | | |
| | | |
| | | |
| | |
Net income (loss) before income taxes | |
| (128,695 | ) | |
| 932,767 | | |
| (1,025,518 | ) | |
| (5,549,007 | ) |
| |
| | | |
| | | |
| | | |
| | |
Provision for income taxes | |
| - | | |
| - | | |
| - | | |
| - | |
| |
| | | |
| | | |
| | | |
| | |
Net income (loss) | |
$ | (128,695 | ) | |
$ | 932,767 | | |
$ | (1,025,518 | ) | |
$ | (5,549,007 | ) |
| |
| | | |
| | | |
| | | |
| | |
Basic net income (loss) per share | |
$ | (0.00 | ) | |
$ | 0.00 | | |
$ | (0.00 | ) | |
$ | (0.00 | ) |
Diluted net income (loss) per share | |
$ | (0.00 | ) | |
$ | 0.00 | | |
$ | (0.00 | ) | |
$ | (0.00 | ) |
Basic weighted average number of shares of common stock outstanding | |
| 7,621,107,947 | | |
| 3,541,361,020 | | |
| 6,788,408,600 | | |
| 3,459,829,181 | |
Diluted weighted average number of shares of common stock outstanding | |
| 7,621,107,947 | | |
| 5,151,449,853 | | |
| 6,788,408,600 | | |
| 3,459,829,181 | |
See
accompanying notes to financial statements.
RAPID
FIRE MARKETING, INC
STATEMENTS
OF CASH FLOWS
(unaudited)
| |
Six Months
Ended June 30, 2015 | | |
Six Months
Ended June 30, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |
| | | |
| | |
Net loss | |
$ | (1,025,518 | ) | |
$ | (5,549,007 | ) |
Adjustments to reconcile net loss to net cash used in
operating activities: | |
| | | |
| | |
Day one charge and (gain) loss on change in fair market value of derivative liabilities | |
| (152,229 | ) | |
| 343,932 | |
Common stock issued for services and stock based compensation | |
| 107,500 | | |
| 109,737 | |
Depreciation | |
| 750 | | |
| - | |
Fair market value of common stock issued in connection with Series A preferred stock dividends | |
| 425,331 | | |
| 4,478,824 | |
Amortization of discount on convertible notes payable | |
| 62,065 | | |
| 74,122 | |
On issuance discount on convertible notes payable | |
| - | | |
| 10,000 | |
Loss on shares issued in excess of liabilities settled | |
| 100,704 | | |
| - | |
Changes in operating assets and liabilities: | |
| | | |
| | |
Accrued interest receivable | |
| (23,033 | ) | |
| 1,424 | |
Inventory | |
| 216 | | |
| 345 | |
Accounts payable and accrued liabilities | |
| 300,243 | | |
| 31,179 | |
Net cash used in operating activities | |
| (203,971 | ) | |
| (499,444 | ) |
| |
| | | |
| | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |
| | | |
| | |
Proceeds from convertible notes payable | |
| 50,000 | | |
| 100,000 | |
Proceeds received from stock subscription | |
| 150,000 | | |
| 400,495 | |
Preferred stock issued for cash | |
| - | | |
| 16,000 | |
Net cash provided by financing activities | |
| 200,000 | | |
| 516,495 | |
| |
| | | |
| | |
Change in cash and cash equivalents | |
| (3,971 | ) | |
| 17,051 | |
Cash and cash equivalents, beginning of period | |
| 4,430 | | |
| 2,351 | |
Cash and cash equivalents, end of period | |
$ | 459 | | |
$ | 19,402 | |
| |
| | | |
| | |
Supplemental disclosures of cash flow information: | |
| | | |
| | |
Cash paid for interest | |
$ | - | | |
$ | - | |
Cash paid for income taxes | |
$ | - | | |
$ | - | |
| |
| | | |
| | |
Non-cash investing and financing activities: | |
| | | |
| | |
Conversion of notes payable and accrued interest to common stock | |
$ | 145,120 | | |
$ | - | |
Conversion of preferred stock into common stock | |
$ | 300,000 | | |
$ | 250,000 | |
Conversion of accounts payable into convertible note | |
$ | - | | |
$ | 82,500 | |
Issuance of common stock accounted for as deferred offering costs | |
$ | - | | |
$ | 88,757 | |
Increase in subscription receivable | |
$ | - | | |
$ | 5,000,000 | |
Discount on convertible notes payable, including OID | |
$ | 56,250 | | |
$ | 192,500 | |
Assets purchased with note payable | |
$ | 90,000 | | |
$ | - | |
See
accompanying notes to financial statements.
RAPID
FIRE MARKETING, INC
Notes
to Financial Statements
June
30, 2015
Note
1 - Organization and Description of Business
Rapid
Fire Marketing, Inc. (the “Company” or “RFMK”) was incorporated under the laws of the state of Delaware
in 1989 as G.D.E. Search Corporation. In 2001, the Company changed its name to N-Vision Technology. In July 2007, the Company
changed its name to Rapid Fire Marketing, Inc.
The
Company is a developer and reseller of herbal vaporizers. The core strategy is to maximize revenues in the rapidly expanding vaporizer
industry. The Company currently sells the CANNAcig and Cumulus personal vapor inhalers. Beginning in February of 2013, the Company
began developing a dry herbal vaporizer. As of July, 2015, The PocketPuffer™ was in production and is on target for a late
August or September delivery from the factory in China.
Asset
Acquisition and Land Lease
On
June 15, 2015, the Company entered into an asset purchase agreement with Black Ice Advisors, LLC (“Black Ice”), pursuant
to which the Company agreed to purchase from Black Ice the following assets: (1) a 2,000 gallon water truck, (2) a 25,000 gallon
steel water tank and (3) a 2005 John Deere skip loader tractor (together, the “Assets”). As consideration for the
Assets, the Company executed a convertible promissory note in the principal amount of $90,000 that matures on December 10, 2015
and carries no interest, see Note 3 for additional information related to the convertible note payable. On the date of acquisition,
the Company allocated the purchase price of $90,000 to the assets received based upon the assets relative fair market values.
Additionally, on June 15, 2015, the Company entered into a land lease commencing on July 1, 2015 with Black Ice. The lease is
for an initial period of five years at $2,000 per month.
The
Company is acquiring the Assets in connection with the development of a new business division in industrial hemp farming. The
Company recently leased sixty six acres of farmland in the Inland Empire region of California. We are currently in the process
of beginning preparation of the farmland for industrial hemp farming. The land will be cleared of rocks and debris, then plowed
to enable the Company to begin planting immediately upon receiving a permit from the State of California Department of Agriculture.
California is currently putting the infrastructure in place to facilitate the permit process. Therefore, we cannot be certain
as to when we will be able to begin growing. The Company is actively recruiting labor to commence industrial hemp farming once
we receive the requisite permit from the State of California.
Note
2 - Summary of Significant Accounting Policies
The
financial statements included herein, presented in accordance with United States generally accepted accounting principles and
stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.
These
statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary
for fair presentation of the information contained therein. It is suggested that these interim financial statements be read in
conjunction with the financial statements and notes thereto for the Company for the year ended December 31, 2014 included in the
Company’s Annual Report on Form 10-K. The financial statements for the six months ended June 30, 2015 are not necessarily
indicative of the results expected for the year ending December 31, 2015.
Going
Concern
The
Company has limited working capital, has incurred losses in each of the past two years, and has not yet received material revenues
from sales of products or services. These factors create substantial doubt about the Company’s ability to continue as a
going concern. The financial statements do not include any adjustment that might be necessary if the Company is unable to continue
as a going concern.
The
ability of RFMK to continue as a going concern is dependent on the Company generating cash from the sale of its common stock and/or
obtaining debt financing and attaining future profitable operations. During the six months ended June 30, 2015, the Company funded
operations through the receipt of $150,000 in net proceeds from stock and $25,000 from the issuance of convertible notes payable.
As of June 30, 2015, the Company has subscriptions receivable from sales of Series A2 Convertible Preferred stock and Series C
Convertible Preferred stock of $400,000 and $4,950,000, respectively. Subsequent to quarter end, the Company has received $50,000
in proceeds related to Series A2 Convertible Preferred stock. Management’s plans include collecting on the remaining sales
of Series A2 Convertible Preferred stock and Series C Convertible Preferred stock, selling its equity securities and obtaining
debt financing to fund its capital requirement and ongoing operations; however, there can be no assurance the Company will be
successful in these efforts.
The
financial statements have been prepared on a going concern basis which contemplates the realization of assets and the settlement
of liabilities in the normal course of business. The financial statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets and liabilities that might result from the outcome of this uncertainty.
Risks
and Uncertainties
The
Company has a limited operating history and has not generated significant revenues from our planned principal operations.
The
Company’s business and operations are sensitive to general business and economic conditions in the U.S. and worldwide. These
conditions include short-term and long-term interest rates, inflation, fluctuations in debt and equity capital markets and the
general condition of the U.S. and world economy. A host of factors beyond the Company’s control could cause fluctuations
in these conditions, including the political environment and acts or threats of war or terrorism. Adverse developments in these
general business and economic conditions, including through recession, downturn or otherwise, could have a material adverse effect
on the Company’s financial condition and the results of its operations.
The
Company currently has minimal sales and limited marketing and/or distribution capabilities. The Company has limited experience
in developing, training or managing a sales force and will incur substantial additional expenses if we decide to market any of
our current and future products. Developing a marketing and sales force is also time consuming and could delay launch of our future
products. In addition, the Company will compete with many companies that currently have extensive and well-funded marketing and
sales operations. Our marketing and sales efforts may be unable to compete successfully against these companies. In addition,
the Company has limited capital to devote sales and marketing.
The
Company’s industry is characterized by rapid changes in technology and customer demands. As a result, the Company’s
products may quickly become obsolete and unmarketable. The Company’s future success will depend on its ability to adapt
to technological advances, anticipate customer demands, develop new products and enhance our current products on a timely and
cost-effective basis. Further, the Company’s products must remain competitive with those of other companies with substantially
greater resources. The Company may experience technical or other difficulties that could delay or prevent the development, introduction
or marketing of new products or enhanced versions of existing products. Also, the Company may not be able to adapt new or enhanced
products to emerging industry standards, and the Company’s new products may not be favorably received. Nor may we have the
capital resources to further the development of existing and/or new ones.
The
Company’s operations are subject to new innovations in product design and function. Significant technical changes can have
an adverse effect on product lives. Design and development of new products are important elements to achieve and maintain profitability
in the Company’s industry segment. The Company may be subject to federal, state and local environmental laws and regulations.
The Company does not anticipate expenditures to comply with such laws and does not believe that regulations will have a material
impact on the Company’s financial position, results of operations, or liquidity. The Company believes that its operations
comply, in all material respects, with applicable federal, state, and local environmental laws and regulations
Use
of 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 affect 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 revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Inventory
Inventory
consists of two finished products, the CANNAcig Vapor Inhaler and the Cumulus Vapor Inhaler, which are valued at the lower of
cost or market valuation under the first-in, first-out method of costing. In addition, deposits on inventory consist of monies
advanced to the contract manufacturer in connection with the production of our new dry herbal vaporizer which expected to be put
into production in early 2015 to be delivered in mid 2015.
Product
obsolescence may be caused by changes in technology, discontinuance of a product line, replacement products in the marketplace
or other competitive situations. The Company maintains a reserve on inventories that are considered to be slow moving or obsolete,
to reduce the inventory to their net estimated realizable value. Once specific inventory is written-down, the write-down is permanent
until the inventory is physically disposed of.
Revenue
Recognition
The
Company generates revenue from the product sales of the CANNAcig Vapor Inhaler and the Cumulus Vapor Inhaler product sales of
Bionic cigarettes revenue is recognized when the purchase is complete and shipment has occurred. Shipping and handling fees and
costs incurred are included as an offset to general and administrative expenses. The amount of revenue received for shipping and
handling is less than 5% of revenues for all periods presented. Sales tax collected from customers is not recorded as revenue.
Sales tax collected is included in accounts payable until remitted to the taxing authorities.
Research
and Development
All
research and development costs, including licensing costs, are charged to expense as incurred. In accordance with this policy,
all costs associated with the design, development and testing of the Company’s products have been expensed as incurred.
Fair
Value of Financial Instruments
The
Company follows Accounting Standards Codification (“ASC”) 825 Fair Value Measurements and Disclosures, except as it
applies to the nonfinancial assets and nonfinancial liabilities subject to ASC 825. ASC 825 clarifies that fair value is an exit
price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions
that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 825 establishes
a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:
Level
1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level
2 - Include other inputs that are directly or indirectly observable in the marketplace.
Level
3 - Unobservable inputs which are supported by little or no market activity.
Fair-value
estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of June
30, 2015 and December 31, 2014. The respective carrying value of certain on-balance-sheet financial instruments approximated their
fair values. These financial instruments include cash, prepaids, accounts payable, accrued liabilities, and convertible notes
payable. Fair values for these items were assumed to approximate carrying values because of their short term nature or because
they are payable on demand. As of June 30, 2015 and December 31, 2014, the Company’s derivative liabilities were considered
Level 2. See Note 3 for discussion regarding the determination of the fair market value.
Earnings
(loss) Per Share
Basic
earnings (loss) per share are computed by dividing the net income (loss) by the weighted-average number of shares of common stock
and common stock equivalents (primarily outstanding shares of convertible debt, preferred stock, options and warrants). Common
stock equivalents represent the dilutive effect of the assumed exercise of the outstanding stock options and warrants, using the
treasury stock method. The calculation of fully diluted earnings (loss) per share assumes the dilutive effect of the exercise
of outstanding convertible debt, preferred stock, options and warrants at either the beginning of the respective period presented
or the date of issuance, whichever is later. As of June 30, 2015 and 2014, the Company’s dilutive securities consisted of
convertible notes payable and Series A1, Series A2 and Series C preferred stock. If the holders of the convertible notes payable,
Series A1 Preferred Stock, Series A2 Preferred Stock and Series C Preferred Stock all converted, the Company would be in excess
of their authorized shares. The outstanding dilutive securities have been excluded from the calculation of diluted net loss per
share because the effect would have been anti-dilutive for the three and six months ended June 30, 2015 and the six months ended
June 30, 2014.
The
following is a summary of outstanding securities which have been included in the calculation of diluted net income per share and
reconciliation of net income available to common stock holders for the three months ended June 30, 2014:
| |
Three Months Ended | |
| |
June 30, 2014 | |
Weighted average common shares outstanding used in calculating basic earning per share | |
| 3,541,361,020 | |
Effect of convertible preferred stock | |
| 1,289,255,500 | |
Effect of convertible notes payable | |
| 320,833,333 | |
Weighted average common and common equivalent shares outstanding used in calculating diluted earning per share | |
| 5,151,449,853 | |
| |
| | |
Net income as reported | |
$ | 932,767 | |
Add: Interest on convertible notes payable | |
| 4,813 | |
Add: Amortization of discount on convertible notes payable | |
| 50,104 | |
Net income available to common stockholders | |
$ | 987,684 | |
Note
3 - Convertible Notes Payable and Derivative Liabilities
Convertible
Notes Payable - Cash Proceeds Received
As
of January 28, 2014, the Company had incurred amounts of $82,500 owed to Pyrenees Investments, LLC for service rendered. On January
28, 2014, the indebtedness was sold to Iconic Holdings, LLC, a third party. In connection with this sale, the Company issued a
$82,500 convertible note to the third party. The convertible note incurs interest at 10% per annum and is due January 24, 2015.
If a default is called by the lender after failure to repay principal or interest when due, among other default provisions including
untimely filings with the SEC, a default interest rate of 20% per annum is triggered and retrospectively applied from the note’s
inception date on the unpaid amount, and in addition the principal balance is increased by 150% of the face amount of the note
deemed in default. At any time the note may be converted into shares of common stock, at the lower of $0.0006 or 50% discount
off the lowest trading price for the Company’s common stock within the twenty (20) days preceding the conversion. The Company
recorded a discount totaling $82,500 related to the beneficial conversion feature embedded in the note upon issuance. See below
for discussion of derivative liabilities related to the conversion feature due to the absence of a conversion floor. In connection
with this agreement, the Company reserved 250,000,000 shares of its common stock with the transfer agent. As of June 30, 2015
and December 31, 2014, the principal balance of the note was $53,772 and $57,500, respectively.
In
January 2014, the Company entered into a $165,000 convertible note agreement with Iconic Holdings. Under the terms of the agreement
the Company was to receive $150,000, in proceeds. The Company received proceeds of $100,000 in February 2014, $25,000 in October
2014, and $25,000 February 2015 resulting in a total on issuance discount of $15,000. The convertible note incurs interest at
10% per annum and was due January 28, 2015. If a default is called by the lender after failure to repay principal or interest
when due, among other default provisions including untimely filings with the SEC, a default interest rate of 20% per annum is
triggered and retrospectively applied from the note’s inception date on the unpaid amount, and in addition the principal
balance is increased by 150% of the face amount of the note deemed in default. At any time the note may be converted into common
stock, at the lower of $0.0006 or 50% discount off the lowest trading price for the Company’s common stock within the twenty
(20) days preceding the conversion. The Company recorded a discount totaling $165,000, which included $15,000 for the on issuance
discount, related to the beneficial conversion feature embedded in the note upon issuance. See below for discussion of derivative
liabilities related to the conversion feature due to the absence of a conversion floor. In connection with this agreement, the
Company reserved 250,000,000 shares of its common stock with the transfer agent. As of June 30, 2015 and December 31, 2014, the
principal balance of the note was $11,400 and $30,000, respectively.
In
March 2015, the Company entered into a $230,000 convertible note agreement with Iconic Holdings. Under the terms of the agreement
the Company was to receive $200,000, in proceeds. The Company received $25,000 in proceeds in March 2015 resulting in an on issuance
discount of $3,750. The convertible note incurs interest at 10% per annum and is due March 10, 2015. If a default is called by
the lender after failure to repay principal or interest when due, among other default provisions including untimely filings with
the SEC, a default interest rate of 20% per annum is triggered and retrospectively applied from the note’s inception date
on the unpaid amount, and in addition the principal balance is increased by 150% of the face amount of the note deemed in default.
At any time the note may be converted into common stock, at a 50% discount off the lowest trading price for the Company’s
common stock within the twenty five (25) days preceding the conversion. The Company recorded a discount totaling $28,750, which
included $3,750 for the on issuance discount, related to the beneficial conversion feature embedded in the note upon issuance.
See below for discussion of derivative liabilities related to the conversion feature due to the absence of a conversion floor.
As of June 30, 2015, the principal balance of the note was $28,750.
During
the six months ended June 30, 2015, the holder converted $131,100 of principal and $14,020 of accrued interest into 2,149,135,382
shares of common stock. In addition, during the six months ended June 30, 2015 and 2014, $62,065 and $74,122 of the convertible
note discounts were amortized to interest expense, respectively. As of June 30, 2015, discounts of $19,952 remain and will be
amortized within the year ended December 31, 2015.
Convertible
Notes Payable - Assets Acquired
On
June 15, 2015, the Company entered into an asset purchase agreement with Black Ice Advisors, LLC (“Black Ice”), pursuant
to which the Company agreed to purchase from Black Ice the following assets: (1) a 2,000 gallon water truck, (2) a 25,000 gallon
steel water tank and (3) a 2005 John Deere skip loader tractor (together, the “Assets”). As consideration for the
Assets, the Company executed a convertible promissory note in the principal amount of $90,000 that matures on December 10, 2015
and carries no interest. If upon maturity, the Company is unable to repay the Note, Black Ice may convert the note into shares
of the Company’s common stock at a fifty percent (50%) discount to the lowest intraday bid price during the preceding twenty
(20) days from the Notice of Conversion. Since the conversion of the note is dependent upon a triggering event, the Company will
not record the beneficial conversion feature and/or derivative liability until the event is triggered.
Derivative
Liabilities
The
Company calculated the derivative liability using the Black-Scholes pricing model for each note upon inception and recorded the
fair market value of the derivative liability as a discount to the note. When a derivative liability associated with a convertible
note is in excess of the face value of the convertible note, the excess of fair value of derivative is charged to the statement
of operations.
During
the six months ended June 30, 2015, the Company received proceeds of $50,000 from convertible debt with principal stated amounts
of $56,250. At the inception of these notes, they were fully discounted due to value of the associated derivative liabilities.
In addition, due to the value of the derivative liabilities being in excess of the principal stated amount a day one charge of
$124,041 was recorded.
Aggregate
derivative liabilities associated with remaining convertible notes were $75,094 as of June 30, 2015. Based on this revaluation
at quarter end the Company recognized a loss (gain) in the change of fair value of derivative liability of ($140,813) and ($152,229)
during the three and six months ended June 30, 2015, respectively.
The
following are the weighted average variable used in determining the fair market value of the Company’s derivative liabilities:
Date | |
February 9, 2015 | | |
March 10, 2015 | | |
March 31, 2015 | | |
June 30, 2015 | |
Closing stock price of common stock | |
$ | 0.0005 | | |
$ | 0.0004 | | |
$ | 0.0003 | | |
$ | 0.0002 | |
Conversion price | |
$ | 0.0002 | | |
$ | 0.0001 | | |
$ | 0.0001 | | |
$ | 0.0001 | |
Expected life in years | |
| 0.50 | | |
| 1.00 | | |
| 0.50 to 0.90 | | |
| 0.50 | |
Risk free rate | |
| 0.11 | % | |
| 0.11 | % | |
| 0.03 | % | |
| 0.03 | % |
Expected annual volatility | |
| 247.00 | % | |
| 221.00 | % | |
| 215% to 247 | % | |
| 418.00 | % |
Dividend percentage | |
| 0.00 | % | |
| 0.00 | % | |
| 0.00 | % | |
| 0.00 | % |
Note
4 - Subscriptions Receivables
As
of June 30, 2015, the Company held nine (9) notes receivable (the “Series A2 Notes”) from Ironridge Global IV, Ltd
totaling $400,000 related to the sale of Series A2 Convertible Preferred Stock (see below for rights and preferences). The principal
balance outstanding under the Series A2 Notes bears interest at the rate of 1.0% per annum. The entire unpaid principal balance,
interest and any other charges due and payable under these Series A2 Notes will become due and payable 29 months from the date
of issuance (September 21, 2012) and is recorded as a reduction to Stockholders’ Equity on the accompanying balance sheet.
The Series A2 Notes shall be deemed not due and payable should the Company not have either 1) a registration statement on file
and effective with the SEC covering the underlying common shares issuable as a result of the preferred shares, or 2) that the
underlying common shares are eligible for trading under the then current Rule 144 as promulgated by the Securities of Act of 1933,
as amended. The Company is also required to maintain adequate coverage of authorized shares, and must have the ability to issue
common shares to the holder of the preferred shares in electronic format. Other customary events of default also apply. During
the six months ended June 30, 2015 and 2014, the Company received $150,000 and $350,000 in proceeds related to the payment of
the Series A2 Notes and recorded interest income of $2,156 and $4,573, respectively. In addition, subscription receivables previously
included $16,000 in excess common stock in which was issued to the holders of Series A2 Notes. The corresponding shares were remitted
during the three months ended June 30, 2014.
On
March 27, 2014, the Company entered into an agreement with the same party discussed above for the issuance of 100 notes receivable
(the “Series C Notes”) from one issuer totaling $5,000,000 related to the sale of Series C Convertible Preferred Stock
(see below for rights and preferences). The principal balance outstanding under the Series C Notes bears interest at the rate
of 1.0% per annum. The entire unpaid principal balance, interest and any other charges due and payable under these Series C Notes
will become due and payable 82 weeks from the date of issuance and is recorded as a reduction to Stockholders’ Equity on
the accompanying balance sheet. The Series C Notes deemed not due and payable should the Company not have either 1) a registration
statement on file and effective with the SEC covering the underlying common shares issuable as a result of the preferred shares,
or 2) that the underlying common shares are eligible for trading under the then current Rule 144 as promulgated by the Securities
of Act of 1933, as amended. The Company is also required to maintain adequate coverage of authorized shares, and must have the
ability to issue common shares to the holder of the preferred shares in electronic format. Other customary events of default also
apply. As of June 30, 2015, $4,950,000 of the Series C Notes balance remained unpaid. During the six months ended June 30, 2015
and 2014, the Company received $0 and $50,495 in proceeds related to the payment on the Series C Notes. Additional, proceeds are
dependent upon the Company maintaining sufficient authorized shares.
Note
5 - Stockholders’ Equity
Preferred
Stock
Series
A1 Preferred Stock
On
September 6, 2011, the Company filed a Certificate of Designation of Series A1 Convertible Preferred Stock (“Series A1”)
with the Secretary of State of Nevada. Pursuant to the Series A1 Certificate of Designation, the Company designated 25,000,000
shares of its blank check preferred stock as Series A1 Preferred Stock. The Series A1 Preferred Stock ranks senior to the common
stock (the “Junior Stock”). The Series A1 Preferred Stock can be converted at anytime into 30 common shares per one
preferred share. In the event of a liquidation, the Series A1 Preferred Stock will be entitled to a liquidation at the same as
common stock. The Series A1 Preferred Stock has no voting rights.
Series
A2 Preferred Stock
On
October 5, 2012, the Company filed a Certificate of Designation of Series A2 Convertible Preferred Stock (“Series A2”)
with the Secretary of State of Nevada. Pursuant to the Series A2 Certificate of Designation, the Company designated 300 shares
of its blank check preferred stock as Series A2 . The Series A2 ranks senior to the common stock and any subsequently created
series of preferred stock that does not expressly rank pari passu with or senior to the Series A2 (the “Junior Stock”).
The Series A2 can be converted at anytime and has a fixed conversion price of $0.00225 per common share. The Series A2 is entitled
to minimum six years worth of dividends accruing at a rate of 8.5% per annum potentially increasing to 18% per annum under certain
circumstances such as a significant decrease in the price of the Company’s common stock. Dividends are payable in cash or
in shares of common stock valued at 85.0% of the closing market price of the Company’s common stock for any trading day
following the issuance date of the Series A2. In the event of a liquidation, the Series A2 will be entitled to a payment of the
Stated Value of $10,000 per share plus any accrued but unpaid dividends prior to any payments being made in respect of the Junior
Stock. The holders of Series A2 do not have voting rights, except for shares in which have already been converted into shares
of common stock.
On
January 8, 2014, the holder converted 10 Series A2 shares into 44,444,444 shares of common stock. In addition, under the terms
of the Series A2 the holder was entitled to immediate payment of dividends on the $100,000 stated value of the Series A2 at an
annual dividend rate of 18% rate, which is an increase over the stated 8.5% due to adjustments related to the decrease in the
fair market value of the Company’s common stock, for a period of six years resulting in dividends payable of $108,000. The
holder elected to convert the dividends to common stock based upon 85% of the closing market price as disclosed above resulting
in a conversion price of $0.00017 with 635,294,118 common shares being issued. On the date of conversion, the fair market value
of the dividend shares issued was $1,334,118 based upon the closing market price of the Company’s common stock. Thus, the
Company recorded additional expense of $1,334,118 in connection with the dividend shares issued.
On
February 11, 2014, the holder converted 15 Series A2 shares into 66,666,666 shares of common stock. In addition, under the terms
of the Series A2 the holder was entitled to immediate payment of dividends on the $150,000 stated value of the Series A2 at an
annual dividend rate of 18% rate, which is an increase over the stated 8.5% due to adjustments related to the decrease in the
fair market value of the Company’s common stock, for a period of six years resulting in dividends payable of $162,000. The
holder elected to convert the dividends to common stock based upon 85% of the closing market price as disclosed above resulting
in a conversion price of $0.00017 with 952,941,176 common shares to be issued. On the date of conversion, the fair market value
of the dividend shares issued was $3,144,706 based upon the closing market price of the Company’s common stock. Thus, the
Company recorded additional expense of $3,144,706 in connection with the dividend shares issued. During the six months ended June
30, 2015, the Company issued zero shares of common stock relieving the “Shares to Be Issued” account by $0. As of
June 30, 2015, the Company has recorded within stockholders’ equity “Shares to Be Issued” of $1,014,906 as 263,607,842
common shares have not been delivered due to the 9.99% ownership limitation placed on the shareholders.
On
January 6, 2015, the holder converted 30 Series A2 shares into 133,333,333 shares of common stock. In addition, under the terms
of the Series A2 the holder was entitled to immediate payment of dividends on the $300,000 stated value of the Series A2 at an
annual dividend rate of 18% rate, which is an increase over the stated 8.5% due to adjustments related to the decrease in the
fair market value of the Company’s common stock, for a period of six years resulting in dividends payable of $324,000, of
which $51,140 had been accrued as of the date of conversion. The holder elected to convert the dividends to common stock based
upon 85% of the closing market price as disclosed above resulting in a conversion price of $0.00034 with 952,941,176 common shares
to be issued. On the date of conversion, the fair market value of the dividend shares issued was $476,471 based upon the closing
market price of the Company’s common stock. Thus, the Company recorded additional expense of $425,331, fair market value
of shares less dividends already accrued of $51,140, in connection with the dividend shares issued. During the six months ended
June 30, 2015, the Company issued 1,086,274,509 shares of common stock relieving the “Shares to Be Issued” account
by $776,471, the entire amount due.
During
the six months ended June 30, 2015 and 2014, the Company accrued dividends related to the Series A2 shares of $39,369 and $53,667,
respectively. As of June 30, 2015 and December 31, 2014, accrued Series A2 dividends recorded within accounts payable and accrued
liabilities on the accompanying balance sheet were $220,912 and $232,683, respectively.
Series
B Preferred Stock
On
February 28, 2013, the Company filed a Certificate of Designation of Series B Convertible Preferred Stock (“Series B”)
with the Secretary of State of Nevada. Pursuant to the Series B Certificate of Designation, the Company designated 16,000,000
shares of its blank check preferred stock as Series B. The Series B ranks senior to the common stock and any subsequently created
series of preferred stock that does not expressly rank pari passu with or senior to the Series B (the “Junior Stock”).
The Series B cannot be converted into any other securities and does not receive dividends. Each share of Series B shall have voting
rights equal to that of 2,000 shares of common stock. In the event of a liquidation, the Series B will be entitled to net assets
on a pro rata basis.
On
March 1, 2013, the Company issued its Chief Executive Officer 16,000,000 shares of Series B Preferred Stock. The only rights the
holder under the Series B has relates to voting control of the Company, which prior to the issuance the Chief Executive Officer,
was the only officer and Board of Director member and already could make significant decisions, however, the Chief Executive Officer
lacked voting control due to limited equity holdings in the Company. The issuance transferred voting control of the Company to
the Chief Executive Officer.
Series
C Preferred Stock
On
March 27, 2014, the Company filed a Certificate of Designation of Series C Convertible Preferred Stock (“Series C”)
with the Secretary of State of Nevada. Pursuant to the Series C Certificate of Designation, the Company designated 5,000 shares
of its blank check preferred stock as Series C. The Series C ranks senior to the common stock and any subsequently created series
of preferred stock that does not expressly rank pari passu with or senior to the Series C (the “Junior Stock”) and
pari passu in rights to dividends and liquidation to the Series A2 and junior to all existing and future indebtedness of the Company.
The Series C can be converted at anytime and has a fixed conversion price of $0.01 per common share. The Series C is entitled
to minimum six years worth of dividends accruing at a rate of 8.5% per annum potentially increasing to 18% per annum under certain
circumstances such as a significant decrease in the price of the Company’s common stock. Dividends are payable in cash or
in shares of common stock valued at 85.0% of the closing market price of the Company’s common stock for any trading day
following the issuance date of the Series C. In the event of a liquidation, the Series C will be entitled to a payment of the
Stated Value of $10,000 per share plus any accrued but unpaid dividends prior to any payments being made in respect of the Junior
Stock. The holders of Series C do not have voting rights, except for shares in which have already been converted into shares of
common stock. During the three months ended June 30, 2015, the Company accrued dividends of $208,625 on the Series C. As of June
30, 2015 and December 31, 2014, total accrued dividends were $524,055 and $320,430, respectively.
Common
Stock
2015
Issuances
In
2014, the Company entered into an agreement to issue 50,000,000 shares of common stock valued at $135,000 based upon the closing
market price of the Company’s common stock on the on the date of the agreement to a third party for sales and marketing
services. The fair market value of the common stock issued was recorded as prepaid expenses and is being amortized over the contract
period of one year. During the six months ended June 30, 2015, the Company amortized $22,500 to sales and marketing on the accompanying
statement of operations. As of June 30, 2015, the remaining prepaid is $0. In addition, as of the date of this filing the common
stock has not been issued and thus the value of $135,000 is recorded within stock to be issued on the accompanying balance sheet.
During
the six months ended June 30, 2015, the Company recorded compensation expense of $85,000 related to common stock to be issued
under the Chief Executive Officer’s employment agreement. The shares were valued on date of the agreement being amortized
over the term. Expected future compensation to be recorded during the years ended December 31; $85,000 for remainder of 2015 and
$56,667 for 2016.
During
the six months ended June 30, 2015, the Company issued 251,166,667 shares of common stock in connection with a settlement agreement
with the former Chief Executive Officer. The Company valued the shares of common stock at $125,583 based upon the closing market
price of the Company’s common stock on the date of the agreement. The Company recorded a loss of $100,704 due to the excess
fair market value of common stock issued in excess forgiven notes payable of $23,500 and accrued interest of $1,379.
2014
Issuances
During
the six months ended June 30, 2015, the Company issued 1,754,386 shares of common stock valued at $4,737 based upon the closing
market price of the Company’s common stock on the date of the agreement to a third party for the rights to future royalties
related to Global Specialty Products, Inc.’s MicroRoasters brand.
The
Company amortized $60,000 of deferred compensation related to common stock granted during the six months ended June 30, 2014,
which was being expensed over the service period.
On
January 27, 2014, the Company entered into a settlement with the prior management whereby prior management agreed to return 60,000,000
shares of the Company’s common stock previously issued to them for services rendered. In return, the Company has agreed
to release prior management from any claims related to all costs deemed of a non-business nature. The Company accounted for the
shares at their par value of $60,000 reducing common stock by that amount with the reclass to additional paid in capital. Upon
return, the common stock was cancelled by the transfer agent and reflected in our calculation of weighted average shares for the
three months ended June 30, 2015 as of the date of the agreement.
Equity
Line of Credit
On
February 28, 2014, the Company, entered into an Equity Line of Credit (the “Equity Line of Credit”) with Iconic Holdings,
LLC (“Iconic”). Pursuant to the Equity Line of Credit, Iconic committed to purchase up to $2,000,000 of the Company’s
common stock over twenty-four months from the first day following the effectiveness of a registration statement, subject to certain
conditions.
As
soon as the Company has an effective registration statement in place, the Company may draw on the facility from time to time,
as and when it determines appropriate in accordance with the terms and conditions of the related Equity Line of Credit. The Company
has not yet filed a registration statement registering the shares and therefore, it has not yet sold any shares under the Equity
Line of Credit. The purchase price will be 85% of the lowest trading price of the Company’s common stock during the five
(5) consecutive trading day period beginning on the trading day immediately following the date of delivery of the applicable put
notice. The maximum amount that the Company is entitled to put in on any one notice shall be any amount up to the greater of 1)
the average of the trading dollar volume of the Company’s common stock during the ten (10) trading days preceding the request
or 2) $100,000. Iconic is not obligated to purchase shares if its total number of shares beneficially held at that time would
exceed 4.99% of the number of shares of the Company’s outstanding common stock as determined in accordance with Rule 13d-1
of the Securities Exchange Act of 1934, as amended. In addition, the Company is not permitted to draw on the facility unless there
is an effective registration statement to cover the resale of the shares, which it does not currently have in place.
Pursuant
to the terms of a Registration Rights Agreement between the Company and Iconic, the Company is obligated to file a registration
statement with the SEC to register the resale by Iconic of shares of the common stock underlying the Investment Agreement and
it has not yet done so.
In
addition, under the terms of the Equity Line of Credit the Company was required to issue Iconic 10% of the total commitment amount
in restricted common stock as a commitment fee. In connection with the agreement, the Company issued 82,217,378 shares of common
stock valued at $209,810 based upon the closing market price of the Company’s common stock on the date of the agreement.
The Company initially recorded the value of such common stock as a deferred offering cost and expected to offset the amount against
future proceeds received in connection with Equity Line of Credit. At December 31, 2014, the Company determined that future proceeds
were not probable. Thus, the amount was written off as general and administrative expense at December 31, 2014.
Note
6 - Related Party Transactions
On
March 28, 2013, the Company executed a 3% convertible note with a shareholder for $9,500 due within one year. The note is convertible
into the Company’s common stock at a rate of $0.001 per share subject to various adjustments due to stock splits, change
in control, etc. See Note 5 for discussion related to the conversion of this note into common stock.
On
November 29, 2012, the Company executed a 3% convertible note with a shareholder for $14,000 due within one year. The note is
convertible into the Company’s common stock at the lesser of $0.001 per share (subject to various adjustments due to stock
splits, change in control, etc) or a 20% discount to the current bid price on the date of conversion. See Note 5 for discussion
related to the conversion of this note into common stock.
As
of June 30, 2015, amounts due to our Chief Executive Officer for salary payable recorded within Accounts Payable on the accompanying
balance sheet were $40,809.
Note
7 - Subsequent Events
In
accordance with ASC 855-10, the Company has analyzed its operations subsequent to June 30, 2015 through the date these financial
statements were issued and has determined that it does not have any material subsequent events to disclose, other than the ones
noted below, in these financial statements.
Subsequent
to quarter end, the Company received approximately $25,000 in proceeds related to Series A2 Convertible Preferred stock.
Subsequent
to quarter end, the Company issued 0 shares of common stock in connection with conversions of Series A2. All of these shares were
due under previous conversions of Series A2 into common stock.
Subsequent
to quarter end, the Company received $27,000 in proceeds from a convertible note payable. The terms of the note payable are similar
to those disclosed in Note 3.
ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Except
for the historical information, the following discussion contains forward-looking statements that are subject to risks and
uncertainties. We caution you not to put undue reliance on any forward-looking statements, which speak only as of the date of
this report. Our actual results or actions may differ materially from these forward-looking statements for many reasons. Our
discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial
statements and related notes and with the understanding that our actual future results may be materially different from what
we currently expect.
Our
Business
Vapor
Inhaler
The
core business of Rapid Fire Marketing is the development and sale of vapor inhalers. The vapor inhaler is the base technology
for the CANNAcig and Cumulus product. At this time, we are developing additional products based on vapor inhaler technology including
primarily the PocketPuffer™. The PocketPuffer™ has been in development and tested throughout 2013 and 2014 and is
expected to reach the market in late August or September of 2015. We believe vapor inhalers have a greater opportunity in the
retail markets where it is sold without the active ingredient. Accordingly, we do not sell any products with active ingredients.
We
are a vapor inhaler development and sales company that provides the best solution for vaporizing herbs, oils, waxes, nicotine
and herbs for casual users. We believe our technology is a healthier alternative for smokers and herbal users all around the world.
Our
target customer is an individual who uses nicotine and a variety of herbs, for vaporization. Our units are set up and ready to
use right out of the box.
The
Company’s objectives are consumer focused:
|
(a) |
Create and continue to create the most innovative
vaporizer products on the market. |
|
|
|
|
(b) |
Develop customer and brand loyalty, by creating the most innovative
cost-effective products on the market, and using such that customer loyalty to develop renewable payment revenue streams through
sales of accessories, parts and new units as they are developed or acquired. |
|
|
|
|
(c) |
To establish a dominant market presence by reaching profitability
quickly and using that profit as re-investment into new product development, market share strategies and customer loyalty
programs. |
The
key day-to-day processes that our business performs to serve our customers are as follows:
|
(a) |
Product Development: The CANNAcig has been fully
developed and tested by the former CEO, Michael Amezquita and former consultant, Judah Nieditch. They developed the CANNAcig
using twenty random consumers to help test the design. Feedback was gathered by these consumers and incorporated into the
design before it was submitted to HexCorp, for manufacturing. |
|
|
|
|
(b) |
Sales: Initially, the product was sold in retail smoke shops in
Arizona and California, as well as online. A one-time sale through a distributor (GotVape.com) was conducted as well. However
at this time, all sales are being conducted online through an independent contractor who owns theCANNAcig.com website. |
|
|
|
|
(c) |
Marketing:
Our primary marketing methods include internet marketing, social media, E-mail, news and press releases among others.
All internet marketing, email and social media marketing is conducted through “inbound marketing.” Inbound
marketing means that people must subscribe to receive marketing materials through the Company website or through social
media platforms maintained by the Company. Email marketing materials are only provided to those customers who opt-in as
it is illegal under the CANSPAM Act to transmit email that is unsolicited. PR Newsire and MacReport Media were used to
transmit news releases regarding Company and product development.
Our
relevant market is large enough for our company to enjoy potential success given the current size of the electronic cigarette
and vaporizer markets. Although there are many competitors on the internet marketplace, we believe that if we are successful
in developing brand recognition, we can develop a large share of the market. |
|
|
|
|
(d) |
Customer Service: Customer Service is managed directly in-house
to resolve any customer questions or concerns. |
Management
believes that our relevant market is large enough for us to enjoy potential success given the current size and popularity of the
electronic cigarette and vaporizer markets. We believe we can be successful in capturing a portion of market share in the electronic
cigarette and vaporizer industries.
Industrial
Hemp
On
June 15, 2015, the Company entered into an asset purchase agreement with Black Ice Advisors, LLC (“Black Ice”), pursuant
to which the Company agreed to purchase from Black Ice the following assets: (1) a 2,000 gallon water truck, (2) a 25,000 gallon
steel water tank and (3) a 2005 John Deere skip loader tractor (together, the “Assets”). As consideration for the
Assets, the Company executed a convertible promissory note in the principal amount of $90,000 that matures on December 10, 2015
and carries no interest, see Note 3 for additional information related to the convertible note payable. On the date of acquisition,
the Company allocated the purchase price of $90,000 to the assets received based upon the assets relative fair market values.
Additionally, on June 15, 2015, the Company entered into a land lease commencing on July 1, 2015 with Black Ice. The lease is
for an initial period of five years at $2,000 per month.
The
Company is acquiring the Assets in connection with the development of a new business division in industrial hemp farming. The
Company recently leased sixty six acres of farmland in the Inland Empire region of California. We are currently in the process
of preparations to begin preparation of the farmland for industrial hemp farming. The land will be cleared of rocks and debris,
then plowed to enable the Company to begin planting immediately upon receiving a permit from the State of California Department
of Agriculture. California is currently putting the infrastructure in place to facilitate the permit process. Therefore, we cannot
be certain as to when we will be able to begin growing. The Company is actively recruiting labor to commence industrial hemp farming
once we receive the requisite permit from the State of California.
Industrial
hemp is a variety of Cannabis sativa and is of the same plant species as marijuana. However, hemp is genetically different and
distinguished by its use and chemical makeup. Hemp has long been cultivated for non-drug use in the production of industrial and
other goods. It can be grown as a fiber, seed, or other dual-purpose crop. Hemp fibers are used in a wide range of products, including
fabrics and textiles, yarns and raw or processed spun fibers, paper, carpeting, home furnishings, construction and insulation
materials, auto parts, and composites. The interior stalk (hurd) is used in various applications such as animal bedding, raw material
inputs, low-quality papers, and composites. Hemp seed and oilcake are used in a range of foods and beverages, and can be an alternative
food protein source. Oil from the crushed hemp seed is an ingredient in a range of body-care products and also nutritional supplements.
Hemp seed is also used for industrial oils, cosmetics and personal care, and pharmaceuticals, among other composites.
Plan
of Operations
We
have limited cash flow from operations, our ability to maintain normal operations is entirely dependent upon obtaining adequate
cash to finance operations and our research and development activities. Since inception, we have raised capital to finance operations
through sale of equity, short-term debt in which our obligations were paid immediately, product financing and issuance of equity
for services. It is unknown when, if ever, we will achieve a level of revenues adequate to support its costs and expenses. Our
independently registered public accounting firm included in their most recent audit opinion that there was substantial doubt regarding
our going concern.
There
is considerable doubt that the Company will be able to obtain additional financing if needed. The Company spends approximately
$40,000 per month currently on salaries, consultants, sub-contractors and professional fees, and projects. We will need approximately
$1,200,000 in the next twelve months to support normal operations. Our ability to meet our cash requirements for the next twelve
months depends on our ability to obtain such financing. Even if financing is obtained, any such financing will likely involve
additional fees and issuance of additional debt, which may significantly reduce the amount of cash we will have for our operations.
Accordingly, there is no assurance that we will be able to implement its plans in the future.
In
order for us to meet our basic financial obligations, including salaries and normal operating expenses, we plan to sell additional
units of our products and to seek additional equity or debt financing. We have commitments for $400,000 remaining on the purchase
of Series A2 Preferred Stock and $4,950,000 for the purchase of Series C Preferred Stock in financing from Ironridge Global, an
international fund. To date we have received approximately $1,150,000 with approximately subsequent 107 tranches remaining of
$50,000, or $5,350,000. The receipt of this funding is dependent upon the Company maintaining a sufficient number of authorized
shares, etc. The Company cannot assure this will be adequate financing to meet our needs over the next 12 months or through the
years of scheduled payments due in connection with the financings.
We
are continuing our efforts to obtain customers for our products, expand sales efforts worldwide and expand the industries we target
for possible customers. We also have plans to develop additional products and revisions or modifications to our current products.
As a result, we intend to hire additional personnel who have industry experience and training so that they can be immediately
effective in the building our company and brand. We retain most design, product configuration and technical engineering resources
“in-house.” We will continue to develop new products over the next twelve months and plan to invest a certain amount
of funds to product development, although at this time, we do not believe that will be a considerable amount in relation to the
overall expenses of our company.
We
do not plan on a large equipment purchvase or a significant change to the number of employees over the next twelve months. We do
plan to implement a contract sales force to help distribute its products through retail outlets in the 17 states where its products
are legally sold.
Results
of Operations
Six
Months Ended June 30, 2015 Compared to Six Months Ended June 30, 2014
Sales
for the six months ended June 30, 2015, were $1,595, a decrease of $108 or 6.34%, as compared to $1,703 for the six months ended
June 30, 2014. The decrease was due to limited funds available for marketing, as well as our inability to fully maintain and staff
the sales function, and the related marketing support. In addition, we have reduced our marketing of the CANNAcig and Cumulus
and have focused our efforts to getting the PocketPuffer™ to market. We also incurred direct costs of $2,190 and $1,269
related to sales during the six months ended June 30, 2015 and 2014, respectively. The increase of $921 or 72.58% between the
2015 and 2014 same periods was a result of additional costs paid to our product fulfillment center.
Sales
and marketing expenses were $60,487 for the six months ended June 30, 2015, an increase of $13,701 or 29.3 % over the prior period
of $46,786. The increase in sales and marketing expenses was related to stock based compensation of $22,500 provided to an individual
providing sales and marketing services. In general, we have limited funds to sales and marketing activities. General and administrative
expenses were $219,496 for the six months ended June 30, 2015, a decrease of $208,547 or 48.7% over the prior period of $428,043.
The decrease in general and administrative expense was due to an decrease in professional fees related to filing our Form 10,
as amended, and our annual report on Form 10-K in which these costs were not incurred during the current comparable period. Research
and development expenses were $0 for the six months ended June 30, 2015, an decrease of $40,625 or 100.0% over the prior period
of $40,625. The decrease in research and development expenses was due to costs associated with developing prototypes for our new
product, PocketPuffer™, which were not present during the current comparable period. Stock for services expense was $85,000
for the six months ended June 30, 2015, as compared to $80,737 for the six months ended June 30, 2014, an increase of $4,263 or
5.3%. The increase in stock for services expense during the current period was a result of increased amortization of deferred
compensation and the value of common stock issued for services.
Other
income and (expense) was ($659,940) for the six months ended June 30, 2015, a decrease of $4,293,310 or 86.7% over the prior period
of ($4,953,250). The significant decrease was due to the fair market value of derivative liabilities recorded in connection with
convertible debt issued during the prior period. The convertible notes have conversion features in which adjust based on market
price. In addition, under the terms of the Series A2 preferred stock agreement with Ironridge they receive six (6) years worth
of dividends upon conversion of their Series A2 into preferred stock. The loss on common shares issued during the six months ended
June 30, 2015 is related to the conversion of 25 Series A2 shares into common stock. The Company records the common shares issuable
for the dividends at the fair market value of the common stock on the date of conversion.
Three
Months Ended June 30, 2015 Compared to Three Months Ended June 30, 2014
Sales
for the three months ended June 30, 2015, were $932, an increase of $88 or 10.4%, as compared to $844 for the three months ended
June 30, 2014. We have limited funds available for marketing, as well as our inability to fully maintain and staff the sales function,
and the related marketing support. In addition, we have reduced our marketing of the CANNAcig and Cumulus and have focused our
efforts to getting the PocketPuffer™ to market which is now available for presale. We also incurred direct costs of $1,463
and $588 related to sales during the three months ended June 30, 2015 and 2014, respectively. The increase of $875 or 148.8% between
the 2015 and 2014 same periods was a result of a different mix of product sales in which the cost is different and additional
costs paid to our product fulfillment center.
Sales
and marketing expenses were $8,436 for the three months ended June 30, 2015, a decrease of $17,658 or 67.7% over the prior period
of $26,094. The decrease in sales and marketing expenses was due to the amortization of stock based compensation in the three
months ended June 30, 2014 as compared to the current period where there was none. We continue to have limited funds available
for marketing. General and administrative expenses were $99,588 for the three months ended June 30, 2015, a decrease of $94,747
or 48.8% over the prior period of $194,335. The decrease in general and administrative expense was due to an increase in professional
fees related to filing our Form 10, as amended, and our annual report on Form 10-K in which these costs were incurred during the
prior comparable period and not during the current period. Due to our cash flow restrictions we continually try to manage our
expenses. Stock for services expense was $42,500 for the three months ended June 30, 2015, as compared to $30,000 for the three
months ended June 30, 2014, an increase of $12,500 or 41.7%. The increase in stock for services expense during the current period
was a result of timing differences related to the amortization of the stock based compensation.
Other
income and (expense) was $22,360 for the three months ended June 30, 2015, a decrease of $1,201,205 or 98.2% over the prior period
of $1,223,565. The significant decrease was due to the fair market value of derivative liabilities recorded in connection with
convertible debt issued during the prior period had higher values due to a significant difference between the conversion rate
and the fair market value of our stock at quarter end. The convertible notes have conversion features in which adjust based on
market price. The increase interest expense during the current three months relates to dividends accrued on Series C preferred
stock, which was issued in March 2014, for the entire quarter whereby there was none in the prior comparable quarter.
Liquidity
and Capital Resources
As
of June 30, 2015 we had cash on hand of $459. We had net a working capital deficit of $870,127 as of June 30, 2015, compared to
a net working capital deficit of $737,533 as of December 31, 2014. Our principal uses of cash during the six months ended June
30, 2015 were funding our operations.
The
Company’s financial statements are prepared using accounting principles generally accepted in the United States of America
applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course
of business. For the six months ended June 30, 2015, the Company recorded minimal revenues, incurred an operating loss of $362,443
and a net loss of $1,025,518 indicating substantial doubt regarding the Company continuing as a going concern.
We
used cash of $203,971 in our operating activities in the six months ended June 30, 2015, compared to $499,444 in the same period
in 2014. During the six months ended June 30, 2015, the use of cash was primarily related to the net loss incurred due to our
limited revenue generating operations offset by non-cash charges related to day one charge and loss on change in fair value of
derivative liabilities of ($152,229) and accounts payable and accrued liabilities of $300,243. Net changes in other operation
accounts such as inventory were insignificant due to the limited sales of our product during the current quarter. The increase
in accounts payable was due to amounts payable to our Chief Executive Officer for payroll and accruals of preferred stock dividends.
Our
financing activities provided cash of $200,000 during the six months ended June 30, 2015 compared to $516,495 in the same period
in 2014. During the six months ended June 30, 2015, we received proceeds of $150,000 from stock subscription receivable, and $50,000
from issuance of convertible notes payable. We continue to be dependent upon the sale of debt and equity instruments to fund our
operations.
Off-Balance
Sheet Arrangements
We
do not have any off balance sheet arrangements that are reasonably likely to have a current or future effect on our financial
condition, revenues, and results of operations, liquidity or capital expenditures.
Critical
Accounting Policies
Our
discussion and analysis of our financial condition and results of operations is based on our financial statements, which have
been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial
statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses
for each period. The following represents a summary of our critical accounting policies, defined as those policies that we believe
are the most important to the portrayal of our financial condition and results of operations and that require management’s
most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effects of matters
that are inherently uncertain.
Use
of Estimates
The
preparation of financial statements in conformity with generally accepted accounting principles in the United States requires
management to make certain estimates and assumptions that affect 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 revenues and expenses
during the reporting period. Actual results could differ from those estimates. Significant estimates include collectability of
accounts receivable, accounts payable, sales returns, and recoverability of long-term assets.
Revenue
Recognition
Revenues
from product sales are recorded when all four of the following criteria are met: (i) persuasive evidence of an arrangement exists;
(ii) delivery has occurred or services have been rendered; (iii) our price to the buyer is fixed or determinable; and (iv) collectability
is reasonably assured. Our policy is to report our sales levels on a net revenue basis, with net revenues being computed by deducting
from gross revenues the amount of actual sales returns and the amount of reserves established for anticipated sales returns.
Our
policy for shipping and handling costs billed to customers is to include these costs in revenue in accordance with ASC Topic 605,
“Revenue Recognition,” which requires that all shipping and handling billed to customers should be recorded as revenue.
Accordingly, we record our shipping and handling amounts within net sales and operating expenses.
Stock-Based
Compensation
We
record stock-based compensation in accordance with ASC Topic 718, “Compensation - Stock Compensation.” ASC Topic 718
requires companies to measure compensation cost for stock-based employee compensation at fair value at the grant date and recognize
the expense over the employee’s requisite service period. Under ASC Topic 718, volatility is based on the historical volatility
of our stock or the expected volatility of the stock of similar companies. The expected life assumption is primarily based on
historical exercise patterns and employee post-vesting termination behavior. The risk-free interest rate for the expected term
of the option is based on the U.S. Treasury yield curve in effect at the time of grant.
We
use the Black-Scholes option-pricing model, which was developed for use in estimating the fair value of options. Option-pricing
models require the input of highly complex and subjective variables including the expected life of options granted and the expected
volatility of our stock price over a period equal to or greater than the expected life of the options. Because changes in the
subjective assumptions can materially affect the estimated value of our employee stock options, it is management’s opinion
that the Black-Scholes option-pricing model may not provide an accurate measure of the fair value of our employee stock options.
Although the fair value of employee stock options is determined in accordance with ASC Topic 718 using an option-pricing model,
that value may not be indicative of the fair value observed in a willing buyer/willing seller market transaction.
Earnings
Per Share
Earnings
per share is calculated in accordance with the ASC Topic 260, “Earnings Per Share.” Basic net income or loss per share
is computed by dividing the net income or loss available to common stockholders by the weighted average number of common shares
outstanding. Diluted net loss per share is based on the assumption that all dilutive convertible shares and stock options and
warrants were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and
warrants that are deemed “in the money” are assumed to be exercised at the beginning of the period (or at the time
of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during
the period. Also, under this method, convertible notes and preferred stock are treated as if they were converted at the beginning
of the period.
Quantitative
and Qualitative Disclosures About Market Risk
As
a smaller reporting company, we are not required to provide this information.
ITEM
3. PROPERTIES.
The
Company uses The Nevada Business Center, located at 311 West Third St., Suite 1234, Carson City, NV, 89703 for mailing, accounting
and administrative personnel within the Company. The Nevada Business Center also aids the Company with annual reports to the Nevada
Secretary of State as well as other, smaller, administrative tasks. The Company has no assets within the Nevada Business Center.
ITEM
4. CONTROLS AND PROCEDURES.
Disclosure
of Controls and Procedures.
As
required by Rule 13a-15 or Rule 15d-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
our management, including our principal executive officer and principal accounting officer carried out an evaluation of the effectiveness
of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based
on the foregoing evaluation, we have concluded that our disclosure controls and procedures were not effective as of June 30, 2015
and that they do not allow for information required to be disclosed by the Company in the reports that it files or submits under
the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange
Commission (“SEC”) rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures
designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act
is accumulated and communicated to the Company’s management, including its Chief Executive Officer as appropriate to allow
timely decisions regarding required disclosure.
The
material weaknesses were first identified by us in our audited financial statements filed on Form 10-K on April 13, 2015 for the
years ended December 31, 2014 and 2013 in which related to the following:
●
Inadequate personnel for documenting and execution of processes related to accounting for transactions;
●
Inadequate segregation of duties due to the limited size of the accounting department; and
We
intend to design and implement policies and procedures to remediate the material weaknesses in our internal control over financial
reporting as soon as sufficient financing is available, including the implementation of a new accounting system and related internal
procedures, and pending the financial resources, the hiring of a Chief Financial Officer as a full time employee.
Changes
in Internal Controls over Financial Reporting.
There
were no changes in our internal control over financial reporting that occurred during the period covered by this Quarterly Report
on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial
reporting.
CAUTIONARY
NOTE ON FORWARD-LOOKING STATEMENTS
Certain
information set forth in this Quarterly Report on Form 10-Q, including in Item 2, “Management’s Discussion and Analysis
of Financial Condition and Results of Operations” (and the “Liquidity and Capital Resources” section thereof)
and elsewhere may address or relate to future events and expectations and as such constitutes “forward-looking statements”
within the meaning of the Private Securities Litigation Act of 1995. Such forward-looking statements involve significant risks
and uncertainties. Such statements may include, without limitation, statements with respect to our plans, objectives, projections,
expectations and intentions and other statements identified by words such as “projects,” “may,” “could,”
“would,” “should,” “believes,” “expects,” “anticipates,” “estimates,”
“intends,” “plans” or similar expressions. These statements are based upon the current beliefs and expectations
of our management and are subject to significant risks and uncertainties, including those detailed in our filings with the SEC.
Actual results, may differ significantly from those set forth in the forward-looking statements. Such forward-looking statements
also involve other factors which may cause our actual results to materially differ from any future results, performance, or achievements
expressed or implied by such forward-looking statements and to vary significantly from reporting period to reporting period. Although
management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there
is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual future results will not be different
from the expectations expressed in this Quarterly Report. We undertake no obligation to publically update any forward-looking
statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
PART
II – OTHER INFORMATION
ITEM
1. LEGAL PROCEEDINGS
None.
ITEM
2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM
3 - DEFAULTS UPON SENIOR SECURITIES
None.
ITEM
4. MINE SAFETY DISCLOSURE
None.
ITEM
5. OTHER INFORMATION
None.
ITEM
6. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
The
following exhibits are filed as part of this quarterly report on Form 10-Q:
Exhibit
No. |
|
Description |
|
|
|
3.1 |
|
Series A Convertible Preferred Stock designation (Incorporated
by reference to the Company’s Form 10-Q, as filed with the SEC on May 20, 2014). |
|
|
|
3.2 |
|
Series A2 Convertible Preferred Stock designation Incorporated
by reference to the Company’s Form 10-Q, as filed with the SEC on May 20, 2014). |
|
|
|
3.3 |
|
Series B Preferred Stock designation Incorporated by reference
to the Company’s Form 10-Q, as filed with the SEC on May 20, 2014). |
|
|
|
3.4 |
|
Series C Convertible Preferred Stock designation Incorporated by
reference to the Company’s Form 10-Q, as filed with the SEC on May 20, 2014). |
|
|
|
31.1 |
|
Certification by the Chief Executive Officer and Principal Financial
Officer of Rapid Fire Marketing, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)). |
|
|
|
32.1# |
|
Certification by the Chief Executive Officer and Principal Financial
Officer of Rapid Fire Marketing, Inc. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350). |
|
|
|
101.INS |
|
XBRL Instance Document |
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document. |
|
|
|
101.CAL |
|
XBRL Taxonomy Extension Calculation Linkbase Document. |
|
|
|
101.DEF |
|
XBRL Taxonomy Extension Definition Linkbase Document |
|
|
|
101.LAB |
|
XBRL Taxonomy Extension Labels Linkbase Document. |
|
|
|
101.PRE |
|
XBRL Taxonomy Extension Presentation Linkbase Document. |
#
This certification is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (Exchange
Act), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing
under the Securities Act of 1933, as amended (Securities Act), or the Exchange Act.
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Exchange Act, the Registrant caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
Dated: August 17, 2015 |
RAPID FIRE MARKETING,
INC. |
|
|
|
|
By: |
/s/ Thomas Allinder |
|
Name: |
Thomas Allinder |
|
Title: |
President, Principal
Executive Officer and Principal Financial Officer |
Exhibit
31.1
CERTIFICATION
PURSUANT TO RULE 13A-14(a) OR 15D-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY
ACT OF 2002
I,
Thomas Allinder, certify that:
1.
I have reviewed this report on Form 10-Q of Rapid Fire Marketing, Inc. for the period ending June 30, 2015;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect
to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this report;
4.
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined
in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
(b)
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting procedures;
(c)
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on
such evaluation; and
(d)
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the
Company’s most recent fiscal quarter (the Company’s fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
and
5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors
(or persons performing the equivalent functions):
(a)
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;
and
(b)
any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s
internal control over financial reporting.
Date: August 17, 2015 |
|
|
|
/s/ Thomas Allinder |
|
Thomas Allinder |
|
Chief Executive Officer |
|
Principal Financial Officer |
|
Exhibit
32.1
CERTIFICATION
PURSUANT TO
18
U.S.C. SECTION 1350,
AS
ADOPTED PURSUANT TO
SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002
In
connection with the Report of Rapid Fire Marketing, Inc. (the “Company”) on Form 10-Q for the period ended June 30,
2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Thomas Allinder,
Chief Executive Officer and acting Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section. 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:
1.
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations
of the Company.
Date: August 17, 2015 |
|
|
|
/s/ Thomas Allinder |
|
Thomas Allinder |
|
Chief Executive Officer |
|
Principal Financial Officer |
|