Overview

Our company was formed on January 1, 2012, by MM Inc. the Founding Member, through a contribution of assets. The organization, as governed by the Written Operating Agreement dated January 1, 2012, was formed for the purpose of engaging in the business of conceiving, developing, selling, marketing, implementing and/or otherwise providing services, systems, platforms and products in the areas of mobile, social, digital and traditional marketing to and for businesses and organizations, and conducting services and functions incidental to the operation of such business. Effective January 1, 2017 and March 1, 2017, we granted a thirty percent (30%) and ten percent (10%) interest to Villanta and Digital Advize, respectively, in consideration of services to be provided to us.

We are an involvement marketing service agency, whose mission is to become one of the most well-respected marketing service agencies in the industry capable of involving people with Fortune 500 brands that designs, creates and develops branding and marketing campaigns, primarily for large corporate clients with category-leading brands. We specialize in getting consumers and customers to take an action that leads to brand awareness, trial, loyalty, and ultimately advocacy. Our conversion initiatives facilitate the involvement of more of the "right customers" with the brands of our clients. Our programs can take on various forms, including creating and managing digital content, designing campaign websites/landing pages, social media and viral campaigns, mobile marketing initiatives, brand communications and search engine optimization. We deliver innovative, result-producing campaigns to meet the business objectives of each client through any number, or combination thereof, or cutting-edge marketing initiatives.

Our most important assets in delivering the highest-quality involvement marketing services to our clients are our highly talented and experienced people made up of technologists, strategists, account service, paid media and creatives who work together and represent a cross-discipline of experts. We pride ourselves in a culture of mutually-shared support and teamwork. We ensure that our team is provided the best-in-class research, equipment, technology and training in all disciplines within our proven delivery process to deliver cutting-edge initiatives the get results. We are very competitive and have a winning culture that is present throughout the work we do for our clients and their brands.

Our organization has been structured in a manner to ensure a broad range of thinking, facilitate work flow, and deliver unparalleled marketing initiatives and service to our clients. This is proven by strong and long-lasting relationships with our clients and tenure of our key executives. We have a proven, five-step cyclical approach to every client engagement that ensures learning from every campaign execution is used to optimize future campaigns.

After more than 35 years of experience in delivering innovative involvement marketing campaigns, including more than nine years since our formation in January 2012, we believe our business model is market tested and poised for growth. While executing on our business strategy, we believe we have assembled a diverse and experienced team of senior managers, account executives and creative and analytical directors; developed and executed on involvement marketing campaigns which we believe have added value to our clients; and created our own brand-recognition in the marketing service agency industry. Key elements of our strategy to accelerate revenue growth and continue penetration of the marketplace include organic growth, strategic partnerships, recruitment of talented executives, and accretive acquisitions.

We have relationships with what we believe to be some of the industry's most innovative companies, including Fortune 500 companies, in a diverse spectrum of industries possessing what we believe to be well-known brands. We believe the client relationships established within these diverse industries provide us with a competitive edge over the broader market in the adoption of new strategies and leading technologies. We generate revenues from project/campaign-based fees charged to our clients pursuant to client-specific service agreements.

Through the efforts of our business development team, we identify potential clients having well-known brands as well as leveraging relationships with brands with whom our team is familiar. In addition to identifying potential clients, our senior management team is responsible for nurturing and maintaining existing relationships to ensure customer satisfaction and to promote follow-up campaign opportunities. Our business development team is composed of industry innovators in the communications business with deep connections and experience in digital, social media, technology, promotions, mobile, analytics and campaign development, implementation and management. Our business development team is led by award-winning executives who are frequent contributors to all-things digital on television, radio, conferences and webinars.





Fiscal Year

Our fiscal year ends on September 30. Reference in this annual report on Form 10-K to a fiscal year is reference to the fiscal year ended September 30. For example, references to "fiscal 2022" or our "2022 fiscal year" refer to the fiscal year ended September 30, 2022.





Critical Accounting Policies

Our significant accounting policies are summarized in Note 2 to our financial statements. However, certain of our accounting policies require the application of significant judgment by our management, and such judgments are reflected in the amounts reported in our financial statements. In applying these policies, our management uses its judgment to determine the appropriate assumptions to be used in the determination of estimates. Those estimates are based on our historical experience, terms of existing contracts, our observance of market trends, information provided by our strategic partners and information available from other outside sources, as appropriate. Actual results may differ significantly from the estimates contained in our financial statements.






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Results of Operations

Fiscal Year Ended September 30, 2022 vs. September 30, 2021





                                          Years Ended
                                         September 30,
                                      2022            2021           Change            %
Revenue                           $  4,540,060     $ 3,827,721     $  712,339            18.6 %
Gross profit                         3,005,662       2,329,196        676,466            29.0 %
Total operating expenses             2,267,369       2,344,601        (77,232 )         (3.3) %

Income (loss) from operations 738,293 (15,405 ) 753,698 4,892.6 % Total other income

                       1,697         782,145       (780,448 )        (99.8) %
Income before provision                                                                 (3.5) %
(benefit) for income taxes             739,990         766,740        (26,750 )
Provision (benefit) for income                                         51,799         9,810.4  %
tax                                     51,271            (528 )
Net income after tax              $    688,719     $   767,268     $  (78,549 )        (10.2) %




Revenues

Revenues for the year ended September 30, 2022 were $4,540,060 as compared with $3,827,721 for the comparable prior year period, an increase of $712,339 or 19%. The increase is primarily attributable to post pandemic rebound of client projects that had previously been delayed, the timing of project work being completed, and also the revenue being recognized for direct expenses (media, influencer fees, etc.) attributable to jobs. These fluctuations in work accomplished and revenue being recognized for direct expenses are normal occurrences in our business.






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Gross Profit

Gross profit for the year ended September 30, 2022 was $3,005,662 or 66% of revenues, compared with $2,329,196 or 61% of revenues, for the comparable prior year period. The increase in gross profit dollars was a result of higher revenues, including higher gross margins in the current period. The increase in gross margin percentage is primarily a result of the Company having more projects with lower direct expenses in the year ended September 30, 2022, compared to same period of last year. Direct cost includes expenses for media, sponsorship fees, etc. Gross margin will fluctuate from year to year based on the types of work assigned to the Company by its clients.





Operating Expenses

Total operating expenses for the year ended September 30, 2022 were $2,267,369 as compared with $2,344,601 for the comparable prior year period, a decrease of $77,232 or 3%. The decrease was primarily a result of a decrease in wages and benefits of $285,854, as a result of increases of in-house versus external work, along with decreases in other general and administrative costs of $114,000, offsetting by increases in management consulting fees of $130,500, and increases in professional fees (including public company expenses) of $192,122 primarily due to a new litigation occurred in fiscal year 2022.

Income before provision (benefit) for income taxes

Income before provision (benefit) for income taxes for the year ended September 30, 2022, was $739,990 as compared to $766,740 for the comparable prior year period, which included a gain on PPP loan forgiveness of $780,288. Excluding the gain on PPP loan forgiveness, the Company incurred a $15,405 loss from operations in fiscal 2021 and increased income from operations by $753,698 during fiscal 2022.

Other Income or Expense, net

Other income, net for the year ended September 30, 2022, was $1,697 as compared to $782,145 for the comparable prior year period, which included a gain on PPP loan forgiveness of $780,288.

Provision (benefit) for Income Tax

Provision for income tax for the year ended September 30, 2022 was $51,271 as compared to an income tax benefit of $528 for the comparable prior year period. The increase in income tax expense is primarily due to an increase in income from operations of $753,698 as compared to the same prior year period. Provision (benefit) for income tax is estimated quarterly applying both federal and state tax rates.

Liquidity and Capital Resources





                       September 30,       September 30,
                           2022                2021            Change         %
Cash                  $     1,735,140     $     1,075,188     $ 659,952       61.4 %

Current assets        $     3,326,379     $     2,445,114     $ 881,265       36.0 %
Current liabilities   $       551,733     $       425,601     $ 126,132       29.6 %
Working capital       $     2,774,646     $     2,019,513     $ 755,133       37.4 %

As of September 30, 2022, we had cash of $1,735,140, an increase of $659,952, or 61% when compared with a balance of $1,075,188 as of September 30, 2021.





                                              Years Ended
                                             September 30,
                                          2022           2021          Change           %
Cash provided by (used in) operating                                                       446 %
activities                              $ 675,605     $ (195,223 )   $  870,828
Cash used in investing activities       $ (15,653 )   $  (15,389 )   $     (264 )            2 %

Cash provided by financing activities $ - $ 478,538 $ (478,538 ) (100) % Net Change in Cash During Period $ 659,952 $ 267,926 $ 392,026

            146 %





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During the year ended September 30, 2022, $675,605 was provided by operating activities as compared with net cash used in operating activities of $195,223 for the comparable prior year period. Our uses of cash for operating activities have primarily consisted of salaries and wages for our employees; costs incurred in connection with performance on client projects; facility and facility-related costs, material, management consulting and professional fees. The sources of our cash flows from operating activities have consisted primarily of payments received from clients in connection with the performance on contractually agreed-upon projects. Net cash flows from operating activities for the current year were a result of the net income after tax of $688,719, depreciation expense of $23,144, change of deferred tax of $78,531, offset by stock compensation expense reversal of $13,500, and changes in operating assets and liabilities of $101,289.

During the year ended September 30, 2021, we used $195,223 in operating activities, which were a result of the net income after tax of $767,268, stock compensation expense of $77,000 and depreciation expense of $21,722, offset by the gains on the PPP loan forgiveness of $780,288, change of deferred tax of $1,278 and changes in current assets and liabilities of $279,647.

During the years ended September 30, 2022, and 2021, net cash used in investing activities were $15,653 and $15,389, respectively, and were a result of the purchase of computers and office equipment.

During the year ended September 30, 2022, the Company did not have any cash flow activity from financing activities and September 30, 2021, we received $478,538 related to amounts received under the Paycheck Protection Program.

The ability to attract additional capital investments for more rapid expansion in the future will depend on many factors, including the availability of credit, rate of revenue growth, ability to acquire new client opportunities, the timing of new service product introductions and enhancements to existing services/products, and the opportunities to acquire complimentary businesses that may be made available to us from time-to-time. We believe that as of September 30, 2022, our cash position and cash flows from our operations will be sufficient to fund our working capital and planned strategic activities, excluding acquisitions, if any, for at least the next twelve months.

Any potential future sale of equity or debt securities may result in dilution to our stockholders, and we cannot be certain that additional public or private financing will be available in amounts or on terms acceptable to us, or at all. If we are required to raise additional financing, but are unable to obtain such financing, we may be required to delay, reduce the scope of, or eliminate one or more aspects of our operations or business development activities.

The ongoing pandemic related issues from the coronavirus could adversely impact our liquidity and capital resources, especially if our customers are negatively impacted by the decrease in economic activity caused by the virus. If our customers fail to reach budgeted revenue projections and reduce their expenditures proportionally, we could experience lower than expected growth in revenue or lower overall revenue. We could also experience delays or declines in revenue and new business and implementations of marketing campaigns if customers or potential customers delay or cancel their plans due to the economic slowdown caused by the virus. Additionally, our operations could be impacted, and we could experience higher costs if, despite our mitigation and prevention efforts, the virus spread prevents affected employees from performing key duties.

This annual report on Form 10-K contains certain statements that are "forward-looking" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Litigation Reform Act"). These forward-looking statements and other information are based on our beliefs as well as assumptions made by us using information currently available.

Off-Balance Sheet Arrangements

As of September 30, 2022, we did not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.

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