UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





FORM 10-Q




(Mark One)





x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the quarterly period ended June 30, 2012





o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





Commission File No. 000-54119




OverNear, Inc.


(Exact name of registrant as specified in it charter)





Nevada

27-3101494(State or other jurisdiction of incorporation or organization)

(IRS Employer Identification No.)





9595 Wilshire Blvd., Suite 900


Beverly Hills, CA 90212


(Address of principal executive offices) (Zip Code)





(310) 744-6060


(Registrant's telephone number, including area code)





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15 (d) of the Securities Exchange Act of 1934 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. x  Yes    o 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 than the registrant was required to submit and post such files). o  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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.





Large accelerated filer o

Accelerated filer oNon-accelerated filer o (do not check if a smaller reporting company)

Smaller reporting company x





Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes    x No





APPLICABLE ONLY TO CORPORATE ISSUERS:





52,782,447shares of the issuer’s common stock are issued and outstanding as of August 20, 2012.











OVERNEAR, INC.




TABLE OF CONTENTS


TO QUARTERLY REPORT ON FORM 10-Q


FOR QUARTER ENDED JUNE 30, 2012





PagePART I - FINANCIAL INFORMATIONItem 1.

Financial Statements

F-1 to F-13Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

2Item 4.

Controls and Procedures

6PART II - OTHER INFORMATIONItem 2.

Unregistered Sales of Equity Securities and Use of Proceeds

7Item 6.

Exhibits

7Signatures

8




1







PART I - FINANCIAL INFORMATION





Item 1.  Financial Statements.




OVERNEAR, INC.
 
 CONDENSED BALANCE SHEETS
 June 30,


December 31,2012


2011(Unaudited)ASSETSCurrent AssetsCash

$
467,370


$
181,995Employee advances


26,000



-Prepaid expenses


85,949



51,975Total Current Assets


579,319



233,970Furniture and equipment, net


11,949



11,993Software development in progress


285,137



133,068Other assets


5,252



3145TOTAL ASSETS

$
881,657


$
382,176LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)Current LiabilitiesAccounts payable

$
302,103


$
265,398Accrued expenses


206,035



138,359Current portion of legal settlement payable


75,000



75,000Total Current Liabilities


583,138



478,757Legal settlement payable, net of current portion


112,500



150,000Total Liabilities


695,638



628,757CommitmentsStockholders' Equity (Deficit)Common stock, $0.001 par value; 150,000,000shares authorized; 52,590,447 and 46,619,962 shares issued and outstandingat June 30, 2012 and December 31, 2011, respectively


52,590



46,620Preferred stock, $0.001 par value; 50,000,000 shares authorized, none issued


-



-Paid-in capital


3,038,562



1,847,339Accumulated deficit


(2,905,133
)


(2,140,540
)Total Stockholders' Equity (Deficit)


186,019



(246,581
)TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

$
881,657


$
382,176
  The accompanying notes are an integral part of these condensed financial statements
  F-1
  OVERNEAR, INC.
 
 CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
  Three


Three


Six


Sixmonths ended


months ended


months ended


months endedJune 30, 2012


June 30, 2011


June 30, 2012


June 30, 2011Sales

$
-


$
-


$
-


$
-Cost of  Sales


-



-



-



-Gross Profit


-



-



-



-Selling, General and Administrative Expenses


400,225



279,321



762,639



634,015Operating Loss


(400,225
)


(279,321
)


(762,639
)


(634,015
)Interest Expense


(353
)


(2,495
)


(1,154
)


(5,359
)Loss before Income Taxes


(400,578
)


(281,816
)


(763,793
)


(639,374
)Provision for Income Taxes


-



-



(800
)


(800
)Net Loss

$
(400,578
)

$
(281,816
)

$
(764,593
)

$
(640,174
)Loss Per Share-Basic and Diluted

$
(0.01
)

$
(0.01
)

$
(0.02
)

$
(0.02
)Weighted Average Number of Shares


51,867,098



36,604,750



50,248,371



30,531,673
  The accompanying notes are an integral part of these condensed financial statements
  F-2
  OVERNEAR, INC.
 
 CONDENSED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT) (UNAUDITED)
  Preferred Stock


Common Stock


Paid-in


Accumulated


Total Stockholders’Shares


Amount


Shares


Amount


Capital


Deficit


Equity (Deficit)Balance at January 1, 2012


-


$
-



46,619,962


$
46,620


$
1,847,339


$
(2,140,540
)

$
(246,581
)Private placement of common stock


-



-



5,428,000



5,428



821,620



-



827,048Fair value of warrants issued in connection with private placement


-



-



-



-



154,952



-



154,952Issuance of common stock for consulting services


-



-



502,485



502



104,513



-



105,015Fair value of warrants issued in connection with consulting agreement


-



-



-



-



1,178



-



1,178Issuance of common stock in payment of settlement of accounts payable


-



-



40,000



40



3,960



-



4,000Stock based compensation


-



-



-



-



105,000



-



105,000Net Loss for the six months ended June 30, 2012


-



-



-



-



-



(764,593
)


(764,593
)Balance at June 30, 2012


-


$
-



52,590,447


$
52,590


$
3,038,562


$
(2,905,133
)

$
186,019
  The accompanying notes are an integral part of these condensed financial statements
  F-3
  OVERNEAR, INC.
 
 CONDENSED STATEMENT OF CASH FLOWS (UNAUDITED)
  Six

months ended June 30, 2012


Six

months ended June 30, 2011Cash Flow from Operating Activities:Net loss

$
(764,593
)

$
(640,174
)Adjustments to reconcile net loss tonet cash used in operating activities:Depreciation


2,570



2,160Amortization of production costs


-



61,909Issuance of stock in lieu of officer compensation


-



100,000Issuance of stock warrant for consulting services


1,178Stock based compensation


105,000



105,000(Increase) Decrease in operating assets:Employee advances


(26,000
)


-Prepaid expenses


71,041



14,684Other assets


(2,107
)Increase (Decrease) in operating liabilities:Legal settement payable


(37,500
)


-Accounts payable


36,705



22,438Accrued expenses


71,676



184,057Net Cash used in Operating Activities


(542,030
)


(149,926
)Cash Flow from Investing Activities:Due to stockholders


-



(125
)Purchase of equipment


(2,526
)


-Software development in progress


(152,069
)


-Note payable, stockholder


-



(10,099
)Net Cash Used in Investing Activities


(154,595
)


(10,224
)Cash Flow from Financing Activities:Proceeds from private placement of common stock


982,000



185,000Net Increase in Cash


285,375



24,850Cash Balance at Beginning of Period


181,995



400Cash Balance at End of Period

$
467,370


$
25,250Supplemental Disclosures:Interest Paid

$
1,154


$
5,219Taxes Paid

$
1,600


$
-
  The accompanying notes are an integral part of these condensed financial statements
  F-4
  OVERNEAR, INC.
 
 CONDENSED STATEMENT OF CASH FLOWS (UNAUDITED)
  Non cash activities during six months ended June 30, 2012:
 
 The Company issued 40,000 shares of its common stock valued at $4,000 in payment of settlement of accounts payable.
 
 The Company issued 502,485 shares of its common stock valued at $105,015 as pre-payment for consulting services.
 
 Non cash activities during six months ended June 30, 2011:
 
 The Company issued 1,341,247 shares of its common stock valued at $51,094 as retainer for professional services.
 
 The Company issued 1,405,332 shares of its common stock valued at $53,402 in lieu of settlement of accounts payable.
 
 The Company issued 7,416,987 shares to its officers valued at $185,425 in lieu of settlement of deferred compensation.
 
 Note payable to an unrelated party in the amount of $6,273 was reclassified as note payable, stockholder.
  The accompanying notes are an integral part of these condensed financial statements
 
 F-5
  OVERNEAR, INC.
 
 NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
 NOTE 1 – NATURE OF OPERATIONS
 
 OverNear, Inc. (“the Company”) was incorporated on July 22, 2010 in the State of Nevada as Awesome Living, Inc. On June 20, 2011, the name of the corporation was changed to be OverNear, Inc. The Company’s headquarters are located in Beverly Hills, California.
 
 The Company is in the process of developing a location-based social networking and mobile advertising platform.
 
 The Company’s predecessor business developed and marketed a proprietary branded fitness DVD series that targets individuals who seek to enrich their physical, spiritual, and mental wellness. Through infomercials and other marketing initiatives, the predecessor launched its products. The Company plans to monetize the fitness DVD series assets by either selling or licensing the intellectual property and associated products. However, the Company is not certain about achieving success in this line of business.
 
 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Basis of Presentation: The accompanying unaudited interim condensed financial statements and information have been prepared in accordance with accounting principles generally accepted in the United States and in accordance with instructions for Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, these condensed financial statements contain all normal and recurring adjustments considered necessary to present fairly the financial position, results of operations and cash flows for the periods presented. The results for the three and six months ended June 30, 2012 are not necessarily indicative of the results to be expected for the full year. These condensed financial statements should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2011 which are included in the Form 10 K filed by the Company on July 19, 2012.
 
 Use of Estimates: The preparation of the accompanying financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that directly affect the results of reported assets, liabilities, revenue, and expenses. Actual results may differ from these estimates.
 
 Revenue Recognition: The Company generally recognizes product revenue when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collectability is probable.  There was no revenue during each of the three and six months ended June 30, 2012 and June 30, 2011.
 
 Inventories: Inventories consist of DVDs and are stated at the lower of cost or market, using the first-in, first-out method. Market is determined by comparison with recent purchases or net receivable value. Management determines the reserve for slow-moving inventory based on historical trends and forecast of sales of the Company’s products, and accordingly recorded a reserve for slow-moving inventory for the full amount of $18,092 at June 30, 2012 and December 31, 2011.
 
 Furniture and Equipment: Furniture and equipment are stated at cost. Depreciation is computed on the straight-line method based on the estimated useful lives of the assets, generally 5 to 7 years. Maintenance and repairs are charged to expense as incurred; major renewals and betterments that extend the useful lives of furniture and equipment are capitalized. When furniture and equipment are sold or retired, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is recognized.
 
 F-6
 
 OVERNEAR, INC.
 NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
 
 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 
 Software Development Costs: Research and development costs are charged to expense as incurred. However, the costs incurred for the development of computer software that will be sold, leased, or otherwise marketed are capitalized when technological feasibility has been established. These capitalized costs are subject to an ongoing assessment of recoverability based on anticipated future revenues and changes in hardware and software technologies. Amortization of capitalized software development costs begins when the product is available for general release to customers. Amortization is computed as the ratio of current gross revenues for a product to the total of current and anticipated future gross revenues for the product. As of June 30, 2012 and December 31, 2011, the Company had capitalized software development costs of $285,137 and $133,068, respectively, for the development of a location-based social networking and mobile advertising platform to connect people to people and merchants to shoppers. Since the capitalized software is not yet available for general release to customers, no amortization of product development costs was incurred for each of the three and six months ended June 30, 2012 and 2011.
 
 Impairment of Long-lived Assets: The long-lived assets held and used by the Company are reviewed for impairment no less frequently than annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In the event that facts and circumstances indicate that the cost of any long-lived assets may be impaired, an evaluation of recoverability is performed. Management has determined that there was no impairment in the value of long-lived assets during the three and six months ended June 30, 2012 and 2011.
 
 Intangible Assets: Intangible assets consist of a trademark stated at cost which is amortized on a straight-line basis over its statutory life and is included in other assets in the accompanying condensed financial statements as of June 30, 2012 and December 31, 2011.
 
 Fair value of financial instruments: All financial instruments are carried at amounts that approximate estimated fair value.
 
 Income Taxes : The Company accounts for income taxes in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740 “Income Taxes” (“FASB ASC 740”). Under FASB ASC 740, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial statement reported amounts at each period end, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The provision for income taxes represents the tax expense for the period, if any, and the change during the period in deferred tax assets and liabilities. At June 30, 2012 and December 31, 2011, the Company has established a full reserve against all deferred tax assets.
 
 FASB ASC 740 also provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax positions. A tax benefit from an uncertain position may be recognized only if it is “more likely than not” that the position is sustainable upon examination by the relevant taxing authority based on its technical merit.
 
 Net Loss Per Share : The Company applies FASB ASC 260, “Earnings per Share.” Basic earnings (loss) per share is computed by dividing earnings (loss) available to common stockholders by the weighted-average number of common shares outstanding. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include additional common shares available upon exercise of stock options and warrants using the treasury stock method, except for periods for which no common share equivalents are included because their effect would be anti-dilutive.
 
 Stock Based Compensation :  The Company applies FASB ASC 718, “Stock Compensation,” when recording stock based compensation. The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option valuation model. Generally, all options granted expire ten years from the date of grant. Compensation expense in the amount of $52,500 and $105,000 related to stock option grants was recognized for each of the three and six months ended June 30, 2012 and 2011, respectively.
 
 F-7
 OVERNEAR, INC.
 
 NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
 
 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 
 The Company accounts for stock issued to non-employees in accordance with the provisions of FASB ASC 505-50 “Equity Based Payments to Non-Employees”. FASB ASC 505-50 states that equity instruments that are issued in exchange for the receipt of goods or services should be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The measurement date occurs as of the earlier of (a) the date at which a performance commitment is reached or (b) absent a performance commitment, the date at which the performance necessary to earn the equity instruments is complete (that is, the vesting date).
 
 New Accounting Pronouncements: Management does not believe that any recently issued, but not yet effective, accounting standards, if adopted, will have a material effect on the financial statements.
 
 NOTE 3 – GOING CONCERN
 
 The Company's financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. In the near term, the Company expects operating costs to continue to exceed funds generated from operations. As a result, the Company expects to continue to incur operating losses, and the operations in the near future are expected to continue to use working capital.
 
 Management of the Company is actively seeking financing to continue the development of its location-based mobile platform and to launch its product and service.  Subsequent to June 30, 2012, the Company was able to raise equity of $40,000 under a private placement of common stock. (Also see Note 14). The ability of the Company to continue as a going concern is dependent on its ability to meet its financing arrangements and the success of its future operations. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The report from the Company’s independent registered public accounting firm relating to the year ended December 31, 2011 states that there is substantial doubt about the Company’s ability to continue as a going concern.
 
 NOTE 4 – PREPAID EXPENSES
 
 Prepaid expenses consisted of the following:
 
 June 30,


December 31,2012


2011(Unaudited)Offering Costs

$
22,500


$
--Consulting and Professional Fees


61,517



45,375Rent and Other


1,932



6,600Total Prepaid Expenses

$
85,949


$
51,975
 
 F-8
 
 OVERNEAR, INC.
 
 NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
 
 NOTE 5 – FURNITURE AND EQUIPMENT
 
 Furniture and Equipment consisted of the following:
 
 June 30,


December 31,2012


2011(Unaudited)Furniture and Equipment

$
20,486


$
17,960Accumulated Depreciation


(8,537
)


(5,967
)Furniture and Equipment, net

$
11,949


$
11,993
 
 NOTE 6 – ACCRUED EXPENSES
 
 Accrued expenses consisted of the following:
 
 June 30,


December 31,2012


2011(Unaudited)Accrued Salaries and Related Expenses

$
163,480


$
125,801Accrued Income Tax


1,600



2,400Accrued Professional Fees


40,955



10,158Total Accrued Liabilities

$
206,035


$
138,359
 NOTE 7 – LEGAL SETTLEMENT PAYABLE
 
 In November 2011, the Company settled a legal dispute for the total amount of $275,000, of which $50,000 was paid on December 15, 2011 with the remainder payable in monthly installments of $6,250 through December 7, 2014.
 
 Total settlement payable, as of June 30, 2012

$
187,500Current portion of settlement payable


(75,000
)Settlement payable, net of current portion

$
112,500
 
 F-9
 
 OVERNEAR, INC.
 
 NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
 NOTE 7 – LEGAL SETTLEMENT PAYABLE (continued)
  The following schedule represents maturities of the settlement payable for the twelve months ending June 30:
 
 2013

$
75,0002014


75,0002015


37,500$
187,500
 
 NOTE 8 – STOCKHOLDERS’ EQUITY
 
 During the six months ended June 30, 2012, the Company approved: (1) the issuance to an investor in a private placement, in consideration of $250,000, of an aggregate 2,500,000 shares of the Company’s common stock in conjunction with the sale of units consisting of common stock and warrants which had a value of $0.10 per unit, (2) the issuance to investors in a private placement, in consideration of $732,000, of an aggregate 2,928,000 shares of the Company’s common stock in conjunction with the sale of units consisting of common stock and warrants which had a value of $0.25 per unit, (3) the issuance of warrants to purchase 5,428,000 shares of the Company’s common stock in connection with the private placement, the fair value of which was determined to be $154,952 (see Note 11), (4) the issuance of an aggregate 502,485 shares of the Company’s common stock with a value of $105,015 for consulting services, (5) the issuance of 40,000 shares of the Company’s common stock with a value of $4,000 in payment of settlement of accounts payable, and (6) the issuance of 25,000 warrants with a value of $18,840 for consulting services to be vested on September 20, 2012, of which $1,178 was expensed during the six months ended June 30, 2012 (See Note 11).
 
 NOTE 9 – NET LOSS PER SHARE
 
 The following table sets forth the computation of basic and diluted net loss per share:
 
 For the three months ended


For the six months endedJune 30


June 302012


2011


2012


2011(Unaudited)


(Unaudited)


(Unaudited)


(Unaudited)Numerator:Net Loss

$
(400,578
)

$
(281,816
)

$
(764,593
)

$
(640,174
)Denominator:Weighted Average of  Common Shares


51,867,098



36,604,750



50,248,371



30,531,673Basic and Diluted Net Loss per Share

$
(0.01
)

$
(0.01
)

$
(0.02
)

$
(0.02
)
 
 There were no dilutive securities for the three and six months ended June 30, 2012 and 2011.
 
 30,454,000 warrants and stock options were excluded from the calculation of diluted net loss per share for the three and six months ended June 30, 2012 and 16,850,000 warrants and stock options were excluded from the calculation of diluted net loss per share for the three and six months ended June 30, 2011, because they were anti-dilutive.
 
 NOTE 10 – 2010 STOCK OPTION PLAN
 
 During 2010, the Board of Directors approved and adopted the 2010 Stock Option, Deferred Stock and Restricted Stock Plan (the “Plan”) to provide for the issuance of non-qualified and/or incentive stock options to employees, officers, directors and consultants and other service providers. The Plan was subsequently amended on various dates. Generally, all options granted expire ten years from the date of grant. It is the policy of the Company to issue new shares for stock options exercised, rather than issue treasury shares. Options generally vest over ten years. There were 25,000,000 shares of common stock reserved for issuance under the Plan as of June 30, 2012. Effective July 1, 2012, the total number of shares of common stock reserved for issuance was reduced to 15,000,000 shares, subject to annual increase up to an amount equal to 15% of the then outstanding fully diluted shares of common stock of the Company and any such increase can not be made until the fully-diluted shares of common stock outstanding exceeds 100,000,000 shares.
 
 F-10
 
 OVERNEAR, INC.
 
 NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
 
 NOTE 10 – 2010 STOCK OPTION PLAN (continued)
 
 A summary of the status of stock options issued by the Company as of June 30, 2012 is presented in the following table:
 
 For the six months ended

June 30, 2012

(unaudited)Number of Shares


Average PriceOutstanding at the beginning of period


15,000,000


$
0.025Granted/Exercised/Expired/Cancelled


-



N/AOutstanding at the end of period


15,000,000


$
0.025Exercisable at the end of period


6,000,000


$
0.025Shares available for future grant


--



N/A
 
 The following table sets forth additional information about stock options outstanding at June 30, 2012:
 
 WeightedAverage


WeightedRange of




Remaining


AverageExercise

Options


Contractual


Exercise


OptionsPrices

Outstanding


Life


Price


Exercisable$
0.025


15,000,000



8.17


$
0.025



6,000,000
 
 As of June 30, 2012, there was $630,000 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Plan.  That cost is expected to be recognized over a weighted average period of 3 years.
 
 NOTE 11 – STOCK WARRANTS
 
 During the six months ended June 30, 2012, the Company issued stock purchase warrants to investors in private placements for the right to purchase 2,500,000 and 2,928,000 shares of the Company’s common stock at $0.25 and $0.75 per share, respectively.  The warrants vest immediately and have a term of five years from the date the warrants were issued.  The warrants were valued at $46,000 and $108,952, respectively using the Black-Scholes option pricing model.
 
 F-11
 OVERNEAR, INC.
 
 NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
 
 NOTE 11 – STOCK WARRANTS(continued)
  On March 20, 2012, the Company entered into a consulting agreement pursuant to which warrants to purchase 200,000 shares of the Company’s common stock at $0.25 per share were issued. The warrants have a cashless exercise feature and vest as follows: (a) 25,000 shares after six months after the date of the agreement, (b) 100,000 shares after twelve months after the date of the agreement, and (c) 75,000 shares after eighteen months after the date of the agreement. This warrant was valued at $18,840, of which $1,178 was expensed during the six months ended June 30, 2012, and the remaining amount will be expensed ratably over the remaining period of the services to be provided.
 
 The assumptions used in the Black-Scholes option pricing model are as follows:
 
 Six months ended6/30/2012(unaudited)Risk-free interest rate


0.27-0.73
%Expected dividend yield


0
%Expected lives

2.5 - 3.35 yearsExpected volatility


70
%
 
 Warrants to purchase an aggregate of 15,254,000 shares of the Company’s common stock with exercise prices ranging from $0.01 to $0.75 were outstanding as of June 30, 2012.
 
 NOTE 12 – EMPLOYMENT AGREEMENTS
 
 On August 3, 2010, the Company entered into a 5-year (“Term”) agreement with Bill Glaser for his services as Chief Executive Officer.  The agreement was amended on March 15, 2011 to change his title from Chief Executive Officer to President.  Per the second amendment to the agreement dated August 8, 2011, Mr. Glaser is compensated with an annual salary of $180,000. Mr. Glaser’s annual salary will increase to $250,000 in the event that either (i) OverNear raises an aggregate $5,000,000 in debt or equity financing after August 8, 2011 or (ii) OverNear recognizes $5,000,000 in cumulative gross revenues. The annual salary will increase to $360,000 in the event that either (i) OverNear raises an aggregate $10,000,000 in debt or equity financing after August 8, 2011 or (ii) OverNear recognizes $10,000,000 in cumulative gross revenues. Mr. Glaser will receive a bonus of 5% of OverNear’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). His agreement also provides for options to purchase 5,000,000 shares of common stock under the 2010 Stock Option, Deferred Stock and Restricted Stock Plan (the “Plan”) at an exercise price of $0.025 per share, of which 500,000 shares became exercisable on December 31, 2010 and the remainder of which will become exercisable on the following schedule: 500,000 shares at the end of each subsequent six month period. The options expire 10 years after grant.
 
 In the event of a change of control of OverNear prior to the one month anniversary of Mr. Glaser’s termination, Mr. Glaser will be due the greater of (i) the remainder of his annual salary during the Term or (ii) $250,000. All unvested stock options will become vested, and any unexercised stock options will be paid out as cash in the amount equal to the difference between the consideration paid to OverNear on a per share basis less the exercise price of the stock option, the value of which is multiplied by the number of options held by Mr. Glaser.
 
 In the event Mr. Glaser’s termination by OverNear is without cause, Mr. Glaser will be paid the lesser of (i) the remainder of his annual salary during the Term and (ii) one year’s salary, and all stock options held by Mr. Glaser under the Plan will immediately vest in full and remain outstanding and exercisable until ten years from the grant date.
 
 On September 13, 2010, the Company entered into a 5-year (“Term”) agreement with Fred E. Tannous for his services as Chief Financial Officer. The agreement was amended on March 15, 2011 to add the additional title of Chief Executive Officer.  Per the second amendment to the agreement dated August 8, 2011, Mr. Tannous is compensated with an annual salary of $180,000. Mr. Tannous’ annual salary will increase to $250,000 in the event that either (i) OverNear raises an aggregate $5,000,000 in debt or equity financing after August 8, 2011 or (ii) OverNear recognizes $5,000,000 in cumulative gross revenues. The annual salary will increase to $360,000 in the event that either (i) OverNear raises an aggregate $10,000,000 in debt or equity financing after August 8, 2011 or (ii) OverNear recognizes $10,000,000 in cumulative gross revenues.
 
 As a signing bonus, Mr. Tannous was issued shares of OverNear’s common stock valued at $50,000. Mr. Tannous will also receive a bonus of 5% of OverNear’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). His agreement also provides for options to purchase 10,000,000 shares of common stock under the Plan at an exercise price of $0.025 per share, of which 1,000,000 shares became exercisable on December 31, 2010 and the remainder of which will become exercisable on the following schedule: 1,000,000 shares at the end of each subsequent six month period. The options expire 10 years after grant.
  In the event of a change of control of OverNear prior to the one month anniversary of Mr. Tannous’ termination, Mr. Tannous will be due the greater of (i) the remainder of his annual salary during the Term or (ii) $250,000. All unvested stock options will become vested, and any unexercised stock options will be paid out as cash in the amount equal to the difference between the consideration paid to OverNear on a per share basis less the exercise price of the stock option, the value of which is multiplied by the number of options held by Mr. Tannous.
  In the event of Mr. Tannous’ termination without cause by OverNear, Mr. Tannous will be paid the lesser of (i) the remainder of his annual salary during the Term and (ii) one year’s salary, and all stock options held by Mr. Tannous under the Plan will immediately vest in full and remain outstanding and exercisable until ten years from the grant date.
  F-12
 OVERNEAR, INC.
 
 NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
 NOTE 12 – EMPLOYMENT AGREEMENTS (continued)
 
 The following table summarizes the Company's minimum obligations under employment agreements as of June 30, 2012:
 
 Twelve Months Ending

June 30,2013

$
360,0002014


360,0002015


360,0002016


255,000$
1,335,000
 
 NOTE 13 – LEASE COMMITMENTS
 
 The Company leases its office from an unrelated party pursuant to a lease agreement expiring on October 31, 2013. The lessor agreed to waive three months of rental fees to the Company.  The Company’s rent expense for the three and six months ended June 30, 2012 was approximately $7,000 and $14,000, respectively.
 
 The following table summarizes the Company's obligation under the lease as of June 30, 2012:
 
 Twelve Months Ending

June 30,2013

$
23,1002014


6,600$
29,700
 
 NOTE 14 – SUBSEQUENT EVENTS
 
 Subsequent to June 30, 2012, the Company raised a total of $40,000 in a private placement of its common stock. The Company issued 160,000 shares of common stock and warrants to purchase 160,000 shares of its common stock in connection with this private placement. The Company also issued an aggregate of 32,000 shares of common stock to its consultant in consideration for consulting services. These shares were valued at $8,000.
 
 F-13





Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.





The following discussion should be read in conjunction with our financial statements as of, and for the quarters ended, June 30, 2012 and 2011 and the related notes included therein. References to the “Company,” “we,” “our,” or “us” in this section refers to OverNear, Inc.





Overview





We were formed as Awesome Living, Inc. in Nevada in July 2010 as a wholly owned subsidiary of uKarma Corporation, a Nevada corporation (“uKarma”). uKarma developed and marketed proprietary branded personal health and wellness products, including a proprietary branded fitness DVD series (Xflowsion). On August 9, 2010, the assets of uKarma’s operating health and wellness business, including its Xflowsion DVD series, and its liabilities were transferred into Awesome Living, Inc. pursuant to a Contribution Agreement. Therefore, our historical financial results are those of uKarma’s health and wellness business. uKarma subsequently changed its name to Innolog Holdings Corporation (“Innolog”), and issued 10,700,000 shares of Awesome Living, Inc. common stock to our management. This, along with other subsequent issuances of our common stock, reduced Innolog’s percentage ownership of our common stock to 19.98%.




The Contribution Agreement anticipated a pro-rata spin-off of the Awesome Living, Inc. common stock owned by uKarma to uKarma’s shareholders of record as of August 12, 2010. We intend to complete to the spin-off as soon as practicable.





Following the transfer of our assets into Awesome Living, Inc., we made a decision to change the focus of our business from personal health and wellness products to developing a location-based social networking and mobile advertising platform.  We are in the early stages of this development.  On June 20, 2011, we changed our name from Awesome Living, Inc. to OverNear, Inc. to better reflect our new business.  To date, we have generated no revenues from our planned social networking and mobile advertising service and we are not certain that revenues will be generated from this business in the future.  Our limited history of operations makes prediction of future operating results difficult, and we believe that period-to-period comparisons of our operating results should not be relied on as predictive of our future results.





Critical Accounting Policies and Estimates





Our management’s discussion and analysis of our financial condition and results of operations are 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 assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported net sales and expenses during the reporting periods. On an ongoing basis, we evaluate our estimates and assumptions. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates under different assumptions or conditions.





2





The following accounting policies, which are also described in Note 2 to our financial statements, are critical to aid the reader in fully understanding and evaluating this discussion and analysis:





Revenue Recognition: The Company generally recognizes product revenue when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collectability is probable.  There was no revenue during each of the three and six months ended June 30, 2012 and June 30, 2011.




Inventories: Inventories consist of DVDs and are stated at the lower of cost or market, using the first-in, first-out method. Market is determined by comparison with recent purchases or net receivable value. Management determines the reserve for slow-moving inventory based on historical trends and forecast of sales of the Company’s products, and accordingly recorded a reserve for slow-moving inventory for the full amount of $18,092 at June 30, 2012 and December 31, 2011.




Furniture and Equipment: Furniture and equipment are stated at cost. Depreciation is computed on the straight-line method based on the estimated useful lives of the assets, generally 5 to 7 years. Maintenance and repairs are charged to expense as incurred; major renewals and betterments that extend the useful lives of furniture and equipment are capitalized. When furniture and equipment are sold or retired, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is recognized.




Software Development Costs: Research and development costs are charged to expense as incurred. However, the costs incurred for the development of computer software that will be sold, leased, or otherwise marketed are capitalized when technological feasibility has been established. These capitalized costs are subject to an ongoing assessment of recoverability based on anticipated future revenues and changes in hardware and software technologies. Amortization of capitalized software development costs begins when the product is available for general release to customers. Amortization is computed as the ratio of current gross revenues for a product to the total of current and anticipated future gross revenues for the product. As of June 30, 2012 and December 31, 2011, the Company had capitalized software development costs of $285,137 and $133,068, respectively, for the development of a location-based social networking and mobile advertising platform to connect people to people and merchants to shoppers. Since the capitalized software is not yet available for general release to customers, no amortization of product development costs was incurred for each of the three and six months ended June 30, 2012 and 2011.




Impairment of Long-lived Assets: The long-lived assets held and used by the Company are reviewed for impairment no less frequently than annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In the event that facts and circumstances indicate that the cost of any long-lived assets may be impaired, an evaluation of recoverability is performed. Management has determined that there was no impairment in the value of long-lived assets during the three and six months ended June 30, 2012 and 2011.




Intangible Assets: Intangible assets consist of a trademark stated at cost which is amortized on a straight-line basis over its statutory life and is included in other assets in the accompanying condensed financial statements as of June 30, 2012 and December 31, 2011.




Fair value of financial instruments: All financial instruments are carried at amounts that approximate estimated fair value.




Income Taxes: The Company accounts for income taxes in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740 “Income Taxes” (“FASB ASC 740”). Under FASB ASC 740, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial statement reported amounts at each period end, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The provision for income taxes represents the tax expense for the period, if any, and the change during the period in deferred tax assets and liabilities. At June 30, 2012 and December 31, 2011, the Company has established a full reserve against all deferred tax assets.




3





FASB ASC 740 also provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax positions. A tax benefit from an uncertain position may be recognized only if it is “more likely than not” that the position is sustainable upon examination by the relevant taxing authority based on its technical merit.




Net Loss Per Share: The Company applies FASB ASC 260, “Earnings per Share.” Basic earnings (loss) per share is computed by dividing earnings (loss) available to common stockholders by the weighted-average number of common shares outstanding. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include additional common shares available upon exercise of stock options and warrants using the treasury stock method, except for periods for which no common share equivalents are included because their effect would be anti-dilutive.




Stock Based Compensation:  The Company applies FASB ASC 718, “Stock Compensation,” when recording stock based compensation. The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option valuation model. Generally, all options granted expire ten years from the date of grant. Compensation expense in the amount of $52,500 and $105,000 related to stock option grants was recognized for each of the three months ended June 30, 2012 and 2011, and for each of the six months ended June 30, 2012 and 2011, respectively.




The Company accounts for stock issued to non-employees in accordance with the provisions of FASB ASC 505-50 “Equity Based Payments to Non-Employees”. FASB ASC 505-50 states that equity instruments that are issued in exchange for the receipt of goods or services should be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The measurement date occurs as of the earlier of (a) the date at which a performance commitment is reached or (b) absent a performance commitment, the date at which the performance necessary to earn the equity instruments is complete (that is, the vesting date).




New Accounting Pronouncements: Management does not believe that any recently issued, but not yet effective, accounting standards, if adopted, will have a material effect on the financial statements.




Results of Operations





Following are the results of the Company's operations for the three and six months ended June 30, 2012 and 2011.





Comparison of Three Months Ended June 30, 2012 and June 30, 2011





Sales. We had no sales during the second quarter of 2012 and 2011.  We did not sell our Xflowsion DVDs while developing our mobile app software and business strategy.





Gross Profit.  We had no gross profit during each of the quarters ended June 30, 2012 and June 30, 2011, as we had no sales.





Selling, General and Administrative (SGA).  During the second quarter of 2012, our SGA expenses were $400,225, while total SGA expenses during the second quarter of 2011 were $279,321, representing an increase of over 43%.  The Company incurred approximately $173,000 in increased accounting, consulting, compensation, rent and public relations expenses due to increased activities in mobile application development and approximately $17,000 in increased travel and related expenses due to increased travel for fund raising, offset by approximately $44,000 in decreased legal fees due to the settlement of litigation in December 2011 and approximately $31,000 in decreased amortization of production cost which were fully amortized as of December 31, 2011.  The remaining $6,000 increase is due to various other general expenses.





Net Loss. We had a net loss of $400,578 during the second quarter of 2012 compared to a net loss of $281,816 during the second quarter of 2011due to the various selling, general and administrative expenses increase as described above.





4





Comparison of Six Months Ended June 30, 2012 and June 30, 2011





Sales. We had no sales during the first half of 2012 and 2011. We did not sell our Xflowsion DVDs while developing our mobile app software and business strategy.





Gross Profit.  We had no gross profit during each of the six months ended June 30, 2012 and June 30, 2011, as we had no sales.





Selling, General and Administrative (SGA).  During the first half of 2012, our SGA expenses were $762,639, while total SGA expenses during the first half of 2011 were $634,015, representing an increase of approximately 20%.  The Company incurred approximately $220,000 in increased accounting, consulting, rent, computer and public relations expenses due to increased activities in mobile application development and approximately $27,000 in increased travel and related expenses due to increased travel for fund raising, offset by approximately $59,000 in decreased legal fees due to the settlement of litigation in December 2011 and approximately $62,000 in decreased amortization of production cost which were fully amortized as of December 31, 2011.  The remaining $3,000 increase is due to various other general expenses.





Net Loss. We had a net loss of $764,593 during the first half of 2012 compared to a net loss of $640,174 during the first half of 2011,due to the various selling, general and administrative expenses increase as described above.





LIQUIDITY





Cash Flows





Net cash used in operating activities was $542,030 for the six months ended June 30, 2012 while net cash used in operating activities was $149,926 for the six months ended June 30, 2011. The increase in cash used in operating activities is due primarily to fees related to services provided by consultants and payments made in accordance with the terms of the legal settlement.





Net cash used in investing activities was $154,595 for the six months ended June 30, 2012 while net cash used in investing activities was $10,224 for the six months ended June 30, 2011. The increase in cash used in investing activities is primarily due to $152,069 we paid during the six months ended June 30, 2012 for the development of software.





Net cash provided by financing activities was $982,000 for the six months ended June 30, 2012 compared to $185,000 provided during the six months ended June 30, 2011. The increase in cash flow from financing activities is due to proceeds from additional issuance of our securities in private placements during the first six months in 2012.





CAPITAL RESOURCES





As ofJune 30, 2012, we had negative working capital of $3,819.  To satisfy current working capital needs, we raised $982,000 through private placements of our securities during the first six months of 2012.  Subsequent to June 30, 2012, we raised an additional $40,000 from the sale of our equity securities in a private placement.  There is no guarantee that we will be able to meet current working capital needs if we do not receive additional infusions of cash through loans, stock sales, revenues, or other sources. We expect to incur substantial losses over the next two years.





As of June 30, 2012, we had cash of $467,370.  We have obtained additional capital through an equity financing and intend to continue raising capital through debt or equity financings.





We plan to engage outside contractors and consultants who are willing to be paid in stock rather than cash or a combination of stock and cash.  Expenses incurred that cannot be paid in stock, such as auditors' fees, will be paid in cash. There are no assurances that we will be able to meet our capital requirements through year-end or that our capital requirements will not increase. If we are unable to raise necessary capital to meet our capital requirements, we may not be able to successfully develop and market our location-based mobile platform and/or sell, joint venture, or license our Xflowsion DVD series.





Our financial statements were prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.  In the near term, we expect operating costs to continue to exceed funds generated from operations.  As a result, we expect to continue to incur operating losses, and the operations in the near future are expected to continue to use working capital.





5




Our management is actively seeking financing to continue the development of our location-based mobile platform and, once the platform is developed, to launch it.  Our ability to continue as a going concern is dependent on our ability to arrange for the financing to meet these goals and on the success of our future operations.  The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern. The report from our independent registered public accounting firm relating to the year ended December 31, 2011 states that there is substantial doubt about our ability to continue as a going concern.





OFF-BALANCE SHEET ARRANGEMENTS





We have not entered into any other financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as stockholders’ equity or that are not reflected in our financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.





CONTRACTUAL OBLIGATIONS





We have certain fixed contractual obligations and commitments that include future estimated payments. Changes in our business needs, cancellation provisions, changing interest rates, and other factors may result in actual payments differing from the estimates. We cannot provide certainty regarding the timing and amounts of payments.





The following table summarizes our contractual obligations as of June 30, 2012:





Payments Due by PeriodTotal


Less than

1 year


1-3 Years


3-5 Years


5 years +Contractual Obligations:Legal Settlement Payable

$
187,500


$
75,000


$
112,500


$
-


$
-Employment Agreements

$
1,335,000


$
360,000


$
720,000


$
255,000


$
-Office Leases Expense

$
29,700


$
23,100


$
6,600


$
-


$
-





Item 4.  Controls and Procedures.





As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended. Based on that evaluation, our CEO and CFO concluded that, as of June 30, 2012, our disclosure controls and procedures were not effective at the reasonable assurance level to ensure that the information required to be disclosed by the Company in reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and (ii) is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosures, due to the material weaknesses described below.





6





A material weakness is a control deficiency (within the meaning of the Public Company Accounting Oversight Board (PCAOB) Auditing Standard No. 2) or combination of control deficiencies that result in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. Our management identified the following material weaknesses in our disclosure controls and procedures:




1.
We do not have written documentation of our internal control policies and procedures. Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act.


2.
We do not have sufficient segregation of duties within accounting functions, which is a basic internal control. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. To the extent possible, however, separate individuals should initiate transactions, have custody of assets, and record transactions.


3.
We do not have adequate review and supervision procedures for financial reporting functions. The review and supervision function of internal control relates to the accuracy of financial information reported. The failure to review and supervise could allow the reporting of inaccurate or incomplete financial information. Due to our size and nature, review and supervision may not always be possible or economically feasible. Management evaluated the impact of the significant number of adjustments as a result of our review and concluded that the resulting control deficiency represented a material weakness.





To address these material weaknesses, management performed additional analyses and other procedures during the quarter ended June 30, 2012 to ensure that the financial statements included herein fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented.





Changes in Internal Control over Financial Reporting





There was no change in our internal control over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.





PART II - OTHER INFORMATION





Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.





During the six months ended June 30, 2012, we issued 502,485 shares of our common stock, with a value of $105,015 as a pre-payment for consulting services and 40,000 shares of our common stock, with a value of $4,000, in payment of settlement of accounts payable.  These issuances were exempt from registration requirements in reliance on section 4(2) of the Securities Act.


During the six months ended June 30, 2012, we issued an aggregate 5,428,000 shares of our common stock to  investors in a private placement.  As part of this offering, we also issued warrants to purchase an aggregate 5,428,000 shares of our common stock.  The aggregate consideration paid by these investors was $982,000.  This issuance was exempt from registration requirements in reliance on section 4(2) of the Securities Act and Rule 506 of Regulation D, based in part by representations made by the investors in subscription agreements.





Item 6.  Exhibits





Exh. No.

Exhibit Description2.1

Contribution Agreement between uKarma and Awesome Living (1)3.1

Articles of Incorporation (2)3.2

Bylaws of Awesome Living (1)31.1

Section 302 Certification by the Registrant’s Principal Executive Officer *31.2

Section 302 Certification by the Registrant’s Principal Financial Officer *32.1

Section 906 Certification by the Registrant’s Principal Executive Officer and Principal Financial Officer *101.INS

XBRL Instance Document (3)101.SCH

XBRL Taxonomy Extension Schema (3)101.CAL

XBRL Taxonomy Extension Calculation Linkbase (3)101.DEF

XBRL Taxonomy Extension Definition Linkbase (3)101.LAB

XBRL Taxonomy Extension Label Linkbase (3)101.PRE

XBRL Taxonomy Extension Presentation Linkbase (3)





* Filed herewith.





(1)
Filed on September 15, 2010 as an exhibit to our Registration Statement on Form 10, and incorporated herein by reference.(2)
Filed on August 5, 2011 as an exhibit to our Quarterly Report on Form 10-Q, and incorporated herein by reference.(3)
Pursuant to Rule 405(a)(2) of Regulation S-T, the registrant is relying upon the applicable 30-day grace period for the initial filing of its first Interactive Data File required to contain detail-tagged footnotes or schedules. The registrant intends to file the required detail-tagged footnotes or schedules by the filing of an amendment to this Quarterly Report on Form 10-Q within the 30-day period.





7




SIGNATURES





Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.





OVERNEAR, INC.(Registrant)Date: August 20, 2012
By:
/s/ Fred E. TannousFred E. TannousChief Executive Officer (Principal Executive

Officer) and Chief Financial Officer

(Principal Financial & Accounting Officer)