Attached files
| file | filename |
|---|---|
| EXCEL - IDEA: XBRL DOCUMENT - FrogAds, Inc. | Financial_Report.xls |
| EX-31.1 - CERTIFICATION - FrogAds, Inc. | imobolis_10q-ex3101.htm |
| EX-32.1 - CERTIFICATION - FrogAds, Inc. | imobolis_10q-ex3201.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended June 30, 2011
o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from ______to _________.
Commission file number: 333-167077
Imobolis, Inc.
(Exact name of registrant as specified in its charter)
|
Nevada
|
27-2028734
|
|
|
(State or other jurisdiction of incorporation or organization)
|
(IRS Employer Identification No.)
|
|
4946 Haskel Ave.
Encino, CA
|
91436
|
|
|
(Address of principal executive offices)
|
(Zip Code)
|
(310) 281-6094
(Issuer’s telephone number)
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. Yes x No o
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 o
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. (Check one):
|
Large accelerated filer
|
o
|
Accelerated filer
|
o
|
|
Non-accelerated filer
|
o
|
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) Yes o No x
The number of shares outstanding of the Registrant’s Common Stock on August 12, 2011 was 18,000,000.
IMOBOLIS, INC.
FORM 10-Q
|
Page
|
||
|
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
|
||
|
PART I. FINANCIAL INFORMATION
|
3 | |
|
Item 1.
|
Financial Statements (Unaudited)
|
3 |
|
Balance Sheets as of June 30, 2011 and March 31, 2011
|
3 | |
|
Statements of Operations for the Three Months ended June 30, 2011 and 2010
|
4 | |
|
Statements of Cash Flows for the Three Months ended June 30, 2011 and 2010
|
5 | |
|
Notes to the Condensed Financial Statements (Unaudited)
|
6 | |
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
11 |
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
14 |
|
Item 4.
|
Controls and Procedures
|
14 |
|
PART II. OTHER INFORMATION
|
15 | |
|
Item 1.
|
Legal Proceedings
|
15 |
|
Item 1A.
|
Risk Factors
|
15 |
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
15 |
|
Item 3.
|
Defaults Upon Senior Securities
|
15 |
|
Item 5.
|
Other Information
|
15 |
|
Item 6.
|
Exhibits
|
15 |
|
SIGNATURES
|
16 | |
2
PART I – FINANCIAL INFORMATION
Item 1 - Financial Statements
IMOBOLIS, INC.
CONDENSED BALANCE SHEETS
|
June 30,
2011 |
March 31,
2011 |
|||||||
|
ASSETS
|
(Unaudited)
|
|||||||
|
Current assets:
|
||||||||
|
Cash
|
$ | 16,979 | $ | 85,359 | ||||
|
Prepaid expenses
|
6,645 | 6,623 | ||||||
|
Total current assets
|
23,624 | 91,982 | ||||||
|
Property and equipment, net
|
9,395 | 9,926 | ||||||
|
Total assets
|
$ | 33,019 | $ | 101,908 | ||||
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
|
Current liabilities:
|
||||||||
|
Accounts payable
|
$ | 934 | $ | 4,434 | ||||
|
Accrued expenses
|
39,531 | 34,781 | ||||||
|
Note payable
|
10,000 | 10,000 | ||||||
|
Total current liabilities
|
50,465 | 49,215 | ||||||
|
Stockholders' equity:
|
||||||||
|
Preferred stock, $0.001 par value, 10,000,000 shares
authorized, no shares issued and outstanding
|
- | - | ||||||
|
Common stock, $0.001 par value, 90,000,000 shares
authorized, 18,000,000 shares issued and outstanding
|
18,000 | 18,000 | ||||||
|
Retained earnings (deficit)
|
(35,446 | ) | 34,693 | |||||
|
Total stockholders' equity (deficit)
|
(17,446 | ) | 52,693 | |||||
|
Total liabilities and stockholders' equity (deficit)
|
$ | 33,019 | $ | 101,908 | ||||
See accompanying notes to financial statements.
3
IMOBOLIS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
|
For the three months ended
June 30, |
||||||||
|
2011
|
2010
|
|||||||
|
Revenue
|
$ | - | $ | - | ||||
|
Operating expenses:
|
||||||||
|
Advertising
|
17,583 | - | ||||||
|
Depreciation
|
531 | - | ||||||
|
General and administrative
|
38,109 | 1,360 | ||||||
|
Professional fees
|
13,717 | 12,500 | ||||||
|
Total operating expenses
|
69,940 | 13,860 | ||||||
|
Net operating (loss)
|
(69,940 | ) | (13,860 | ) | ||||
|
Other (expense)
|
||||||||
|
Interest expense
|
(199 | ) | - | |||||
|
Net income (loss)
|
$ | (70,139 | ) | $ | (13,860 | ) | ||
|
Weighted average number of common shares outstanding - basic and fully diluted
|
18,000,000 | 18,000,000 | ||||||
|
Net income (loss) per share - basic and fully diluted
|
$ | - | $ | - | ||||
See accompanying notes to financial statements.
4
IMOBOLIS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
|
For the three months ended
June 30, |
||||||||
|
2011
|
2010
|
|||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||
|
Net loss
|
$ | (70,139 | ) | $ | (13,860 | ) | ||
|
Adjustments to reconcile net loss to net cash (used in) operating activities:
|
||||||||
|
Depreciation
|
531 | - | ||||||
|
(Increase) decrease in assets:
|
||||||||
|
Prepaid expenses
|
(22 | ) | - | |||||
|
Increase (decrease) in liabilities:
|
||||||||
|
Accounts payable
|
(3,500 | ) | 2,500 | |||||
|
Accrued expenses
|
4,750 | - | ||||||
|
Net cash (used in) operating activities
|
(68,380 | ) | (11,360 | ) | ||||
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||
|
Proceeds from related party loans
|
1,141 | - | ||||||
|
Payments on related party loans
|
(1,141 | ) | - | |||||
|
Proceeds from sale of common stock, related party
|
- | 6,680 | ||||||
|
Net cash provided by financing activities
|
- | 6,680 | ||||||
|
NET CHANGE IN CASH
|
(68,380 | ) | (4,680 | ) | ||||
|
CASH AT BEGINNING OF YEAR
|
85,359 | 5,000 | ||||||
|
CASH AT END OF YEAR
|
$ | 16,979 | $ | 320 | ||||
|
SUPPLEMENTAL DISCLOSURES:
|
||||||||
|
Interest paid
|
$ | - | $ | - | ||||
|
Income taxes paid
|
$ | - | $ | - | ||||
See accompanying notes to financial statements.
5
Imobolis, Inc.
Notes to Condensed Financial Statements
(Unaudited)
Note 1 – Nature of Business and Basis of Presentation
Imobolis (“The Company”) was formed in the state of Nevada on February 11, 2010 to establish an internet bulletin board site whereby visitors can list items for sale or trade, read news articles, or find service providers. Imobolis expects to generate a large inventory of classified ads. The listings are free to the seller and buyer, however, Imobolis sells “advertisements’ or “banner ads” on its internet site directed toward internet users and vehicle buyers. The Company generates its corporate revenue from the sale of such advertisements.
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. The Company follows the same accounting policies in the preparation of interim reports.
The Company has adopted a fiscal year end of March 31st.
The interim condensed 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. 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 not make the information presented misleading.
These statements reflect all adjustments, which in the opinion of management, are necessary for fair presentation of the information contained therein. Except as otherwise disclosed, all such adjustments are of a normal recurring nature. It is suggested that these interim condensed financial statements be read in conjunction with the financial statements of the Company for the fiscal year ended March 31, 2011 and notes thereto included in the Company's 10-K annual report. The Company follows the same accounting policies in the preparation of interim reports.
Recent Accounting Pronouncements
In June 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income” (ASU 2011-05), which is effective for annual reporting periods beginning after December 15, 2011. ASU 2011-05 will become effective for the Company on April 1, 2012. This guidance eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. In addition, items of other comprehensive income that are reclassified to profit or loss are required to be presented separately on the face of the financial statements. This guidance is intended to increase the prominence of other comprehensive income in financial statements by requiring that such amounts be presented either in a single continuous statement of income and comprehensive income or separately in consecutive statements of income and comprehensive income. The adoption of ASU 2011-05 is not expected to have a material impact on our financial position or results of operations.
In May 2011, the FASB issued ASU 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs” (ASU 2011-04), which is effective for annual reporting periods beginning after December 15, 2011. This guidance amends certain accounting and disclosure requirements related to fair value measurements. Additional disclosure requirements in the update include: (1) for Level 3 fair value measurements, quantitative information about unobservable inputs used, a description of the valuation processes used by the entity, and a qualitative discussion about the sensitivity of the measurements to changes in the unobservable inputs; (2) for an entity’s use of a nonfinancial asset that is different from the asset’s highest and best use, the reason for the difference; (3) for financial instruments not measured at fair value but for which disclosure of fair value is required, the fair value hierarchy level in which the fair value measurements were determined; and (4) the disclosure of all transfers between Level 1 and Level 2 of the fair value hierarchy. ASU 2011-04 will become effective for the Company on April 1, 2012. We are currently evaluating ASU 2011-04 and have not yet determined the impact that adoption will have on our financial statements.
In April 2011, the FASB issued ASU 2011-02, “Receivables (Topic 310): A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring”. This amendment explains which modifications constitute troubled debt restructurings (“TDR”). Under the new guidance, the definition of a troubled debt restructuring remains essentially unchanged, and for a loan modification to be considered a TDR, certain basic criteria must still be met. For public companies, the new guidance is effective for interim and annual periods beginning on or after June 15, 2011, and applies retrospectively to restructuring occurring on or after the beginning of the fiscal year of adoption. The Company does not expect that the guidance effective in future periods will have a material impact on its consolidated financial statements.
6
Imobolis, Inc.
Notes to Condensed Financial Statements
(Unaudited)
In December 2010, the FASB issued ASU 2010-29, “Business Combinations (Topic 805): Disclosure of supplementary pro forma information for business combinations.” This update changes the disclosure of pro forma information for business combinations. These changes clarify that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. Also, the existing supplemental pro forma disclosures were expanded to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. This ASU is effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. We are currently evaluating the impact of this ASU; however, we do not expect the adoption of this ASU to have a material impact on our financial statements.
In December 2010, the FASB issued ASU 2010-28, “Intangible –Goodwill and Other (Topic 350): When to perform Step 2 of the goodwill impairment test for reporting units with zero or negative carrying amounts.” This update requires an entity to perform all steps in the test for a reporting unit whose carrying value is zero or negative if it is more likely than not (more than 50%) that a goodwill impairment exists based on qualitative factors, resulting in the elimination of an entity’s ability to assert that such a reporting unit’s goodwill is not impaired and additional testing is not necessary despite the existence of qualitative factors that indicate otherwise. This ASU is effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. We are currently evaluating the impact of this ASU; however, we do not expect the adoption of this ASU to have a material impact on our financial statements.
In April 2010, the FASB issued ASU No. 2010-18 regarding improving comparability by eliminating diversity in practice about the treatment of modifications of loans accounted for within pools under Subtopic 310-30 – Receivable – Loans and Debt Securities Acquired with Deteriorated Credit Quality (“Subtopic 310-30”). Furthermore, the amendments clarify guidance about maintaining the integrity of a pool as the unit of accounting for acquired loans with credit deterioration. Loans accounted for individually under Subtopic 310-30 continue to be subject to the troubled debt restructuring accounting provisions within Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors. The amendments in this Update are effective for modifications of loans accounted for within pools under Subtopic 310-30 occurring in the first interim or annual period ending on or after July 15, 2010. The amendments are to be applied prospectively. Early adoption is permitted. The adoption of this ASU did not have a material impact on our financial statements.
In April 2010, the FASB issued ASU 2010-13, "Compensation—Stock Compensation (Topic 718) - Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades (A consensus of the FASB Emerging Issues Task Force)" (“ASU 2010-13”). ASU 2010-13 clarifies that a share-based payment award with an exercise price denominated in the currency of a market in which a substantial portion of the entity’s equity securities trades should not be considered to contain a condition that is not a market, performance, or service condition. Therefore, such an award should not be classified as a liability if it otherwise qualifies as equity. This clarification of existing practice is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010, with early application permitted. We are currently evaluating the impact of this ASU; however, we do not expect the adoption of this ASU to have a material impact on our financial statements.
In February 2010, the FASB issued ASU No. 2010-09 regarding subsequent events and amendments to certain recognition and disclosure requirements. Under this ASU, a public company that is a SEC filer, as defined, is not required to disclose the date through which subsequent events have been evaluated. This ASU is effective upon the issuance of this ASU. The adoption of this ASU did not have a material impact on our financial statements.
In January 2010, the FASB issued ASU No. 2010-06 regarding fair value measurements and disclosures and improvement in the disclosure about fair value measurements. This ASU requires additional disclosures regarding significant transfers in and out of Levels 1 and 2 of fair value measurements, including a description of the reasons for the transfers. Further, this ASU requires additional disclosures for the activity in Level 3 fair value measurements, requiring presentation of information about purchases, sales, issuances, and settlements in the reconciliation for fair value measurements. This ASU is effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. We are currently evaluating the impact of this ASU; however, we do not expect the adoption of this ASU to have a material impact on our financial statements.
7
Imobolis, Inc.
Notes to Condensed Financial Statements
(Unaudited)
Note 2 – Going Concern
As shown in the accompanying financial statements, the Company has produced net loss of $70,139 and 13,860 for the three months ended June 30, 2011, and 2010, respectively, has retained earnings (deficit) of ($35,446) and 34,693 at June 30, 2011 and March 31, 2011, respectively, and cash on hand of $16,979 as of June 30, 2011. The Company’s cash on hand is insufficient to sustain operations for the next twelve months. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management is currently seeking additional sources of capital to fund short term operations. The Company, however, is dependent upon its ability to secure equity and/or debt financing and there are no assurances that the Company will be successful, therefore, without sufficient financing it would be unlikely for the Company to continue as a going concern.
The financial statements do not include any adjustments that might result from the outcome of any uncertainty as to the Company’s ability to continue as a going concern. The financial statements also do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.
Note 3 – Related Party
On January 1, 2011, the Company entered into an employment agreement with the Company’s founder and CEO, Julian Spitari. The initial term of the agreement covers fifteen months, until March 31, 2012. Thereafter the agreement is automatically renewable for one year terms until terminated by either party. The employment agreement calls of an annual base salary of $120,000, with a three percent (3%) annual increase upon renewal.
From time to time the Company’s founder and CEO, Julian Spitari has advanced short term loans to the Company to fund operations. During the three months ended June 30, 2011, Mr. Spitari advanced a total of $1,141 to the Company, which was repaid in full prior to June 30, 2011. The principal balances of the short term loans were $-0- and $-0- at June 30, 2011 and March 31, 2011, respectively.
Note 4 – Fair Value of Financial Instruments
The Company adopted FASB ASC 820-10 upon inception at February 11, 2010. Under FASB ASC 820-10-5, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under GAAP, certain assets and liabilities must be measured at fair value, and FASB ASC 820-10-50 details the disclosures that are required for items measured at fair value.
The Company doesn’t have any financial instruments that must be measured under the new fair value standard. The Company’s financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy. The three levels are as follows:
Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. The fair value of the Company’s cash is based on quoted prices and therefore classified as Level 1.
Level 2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).
Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.
8
Imobolis, Inc.
Notes to Condensed Financial Statements
(Unaudited)
Note 5 – Property and Equipment
Property and Equipment consists of the following:
|
June 30,
2011 |
March 31,
2011 |
|||||||
|
Computer equipment
|
$ | 10,629 | $ | 10,629 | ||||
|
Less accumulated depreciation
|
(1,234 | ) | (703 | ) | ||||
| $ | 9,395 | $ | 9,926 | |||||
Depreciation and amortization expense totaled $531 and $-0- for the three months ended June 30, 2011, and 2010, respectively.
Note 6 – Accrued Expenses
As of June 30, 2011 and March 31, 2011 accrued expenses included the following:
|
June 30,
2011 |
March 31,
2011 |
|||||||
|
Accrued Payroll, Officers
|
$ | 15,003 | $ | 14,638 | ||||
|
Accrued Payroll Taxes
|
6,356 | 2,170 | ||||||
|
Accrued Interest
|
486 | 287 | ||||||
|
Accrued Income Taxes
|
17,686 | 17,686 | ||||||
| $ | 39,531 | $ | 34,781 | |||||
Note 7 – Due to Officer, Related Parties
Officer loan consists of the following at June 30, 2011 and March 31, 2011, respectively:
|
June 30,
2011 |
March 31,
2011 |
|||||||
|
Unsecured promissory note to Julian Spitari, founder and CEO, carries an 8% interest rate, due on demand
|
$ | - | $ | - | ||||
The Company’s founder and CEO, Julian Spitari has advanced loans to the Company to fund operations totaling $1,141 and $23,484 for the three months ended June 30, 2011 and the fiscal year ended March 31, 2011, which were subsequently repaid in full prior to each corresponding balance sheet date.
The Company recorded interest expense in the amount of $-0-and $40 related to the officer loan for the three months ended June 30, 2011 and March 31, 2011, respectively.
Note 8 – Note Payable
Note payable consists of the following at June 30, 2011 and March 31, 2011, respectively:
|
June 30,
2011 |
March 31,
2011 |
|||||||
|
Unsecured promissory note, carries an 8% interest rate, due on demand
|
$ | 10,000 | $ | 10,000 | ||||
The Company recorded interest expense in the amount of $199 and $-0- related to the note payable for the three months ended June 30, 2011 and June 30, 2010, respectively.
9
Imobolis, Inc.
Notes to Condensed Financial Statements
(Unaudited)
Note 9 – Changes in Stockholders’ Equity (Deficit)
On February 11, 2010, the founders of the Company established 90,000,000 authorized shares of common stock. Additionally, the Company founders established 10,000,000 authorized shares of preferred stock.
Common Stock
As of June 30, 2011 the Company has 18,000,000 shares of common stock issued and outstanding. No common stock was issued or cancelled during the three months ended June 30, 2011.
Note 10 – Subsequent Events
There have been no reportable subsequent events to report.
10
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
SPECIAL NOTE REGARDING FORWARD—LOOKING STATEMENTS
On one or more occasions, we may make forward-looking statements in this Quarterly Report on Form 10-Q regarding our assumptions, projections, expectations, targets, intentions or beliefs about future events. Words or phrases such as “anticipates,” “may,” “will,” “should,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “targets,” “will likely result,” “will continue” or similar expressions identify forward-looking statements. Readers are cautioned that these forward-looking statements are only predictions and are subject to risks, uncertainties, and assumptions that are difficult to predict, including those identified in our Annual Report on Form 10-K. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. However, your attention is directed to any further disclosures made on related subjects in our subsequent annual and periodic reports filed with the Securities and Exchange Commission on Forms S-1, 10-K, 10-Q and 8-K and Proxy Statements on Schedule 14A.
Unless the context requires otherwise, references to “we,” “us,” “our,” and the “Company” refer specifically to Imobolis, Inc.
OVERVIEW AND OUTLOOK
Imobolis was formed in the state of Nevada on February 11, 2010 to establish an internet bulletin board site whereby visitors can list items for sale or trade, read news articles, or find service providers. Imobolis expects to generate a large inventory of classified ads. On November 26, 2010 we purchased a software platform which gave the company the ability to offer online posting of classified ads free to the public, where you can find automobiles, boats, jobs and services of all kinds. We are offering free online classified ads that we believe is redefining the way consumers buy and sell products and services. For consumers, the goal is to provide the most effective and economical posting of classified ads. Consumers can post classified ads for free on the Imobolis.com website for products and services. Consumers can also view all posted classified ads at no charge. Companies pay to post banner advertisements on the website. We expect to generate a large inventory of product and service ads over the next year. The listings are free to the seller and buyer, however, we sell “advertisements’ or “banner ads” on our internet site directed towards the internet users. We generate our revenue from the sale of such advertisements.
We are an operating company with a limited history of operations. We plan to market Imobolis through a combination of direct sales, referrals and networking within the industry. Our first revenues were earned on November 26, 2010 with the first sale of banner ads. From November 26, 2010 through March 31, 2011 we generated a total of $248,000 of revenues through the sale of banner ads to a total of five advertisers; (Barclay, GregLoring, Kiwibox, AquilaVision Corporation, and RSTECHNIK). The banner ads ran for thirty days each under our standard contractual agreements.
Over the next twelve months, we plan to build our reputation and develop a network in the internet based bulletin board service which will provide free listings of products and services for sale to the general public thereby attracting new advertisers to the bulletin board.
Management feels the Company’s continuation as a going concern depends upon its ability to obtain additional sources of capital and financing. Specifically, management intends to raise additional permanent capital through debt instruments such as bank loans, or private financing. The goal of this effort is to provide working capital for the next year. Our twelve month operating plan is dependent on raising additional permanent capital through debt instruments such as bank loans, or private financing in the amount of $175,000. Presently we do not have any existing sources or plans for financing.
11
Results of Operations for the Three Months Ended June 30, 2011 and 2010:
|
For the three
months ended |
For the three
months ended |
|||||||
|
Revenue
|
$ | - | $ | - | ||||
|
Operating expenses:
|
||||||||
|
Advertising
|
17,583 | - | ||||||
|
Depreciation
|
531 | - | ||||||
|
General and administrative
|
38,109 | 1,360 | ||||||
|
Professional fees
|
13,717 | 12,500 | ||||||
|
Total operating expenses
|
69,940 | 13,860 | ||||||
|
Net operating loss
|
(69,940 | ) | (13,860 | ) | ||||
|
Interest expense
|
(199 | ) | - | |||||
|
Net loss
|
$ | (70,139 | ) | $ | (13,860 | ) | ||
The Company was established on February 11, 2010 and had no operations during the period from February 11, 2010 (inception) through June 30, 2010, as such, there were no revenues and limited expenses for the three months ended June 30, 2011.
Advertising:
Advertising expenses were $17,583 for the three months ended June 30, 2011 compared to $-0- for the three months ended June 30, 2010, an increase of $17,583 or 100%. Our advertising expenses increased due to the commencement of our operations during 2011 and consisted primarily of costs associated with marketing our Company through television and internet advertising, as well as, local advertising campaigns utilizing automobile graphics.
Depreciation:
Depreciation expenses for the three months ended June 30, 2011 and the three months ended June 30, 2010 was $531 and -0- respectively, representing an increase of $531 or 100%. The increase was a result of purchasing assets with which to operate our business and generate revenues and subsequently depreciating those assets as they were put into service.
General and Administrative:
General and administrative expenses rose from $1,360 for the three months ended June 30, 2010, to $38,109 for the three months ended June 30, 2011. This resulted in an increase of $36,749, or 2,702%. The increase in general and administrative expenses consisted of $30,000 of officer compensation, $4,184 of payroll taxes and penalties, $45 of bank fees, and $3,880 of computer, internet and office supplies, compared to $1,360 of stock services expenses, consisting of costs incurred to establish an account with a transfer agent to handle our stock servicing needs, and filing costs associated with our filings with the Securities and Exchange Commission (“SEC”) during the comparative three months ended June 30, 2010.
Professional Fees:
Professional fees increased from $12,500 during the three months ended June 30, 2010, to $13,717 for the three months ended June 30, 2011, which represents an increase of $1,217, or 10%. The increase was a result of $9,000 of increased professional fees related to launching our internet presence that was offset by a reduction of approximately $7,500 of legal and accounting costs incurred during the three months ended June 30, 2010 to create the entity and file our financial reports with the Securities and Exchange Commission (SEC) that was not incurred during the three months ended June 30, 2011.
12
Net Operating Loss:
Net operating loss for the three months ended June 30, 2011 was $69,940 compared to a net operating loss of $13,860 for the three months ended June 30, 2010, an increase of $56,080. Net operating loss increased as a result of our commencement of operations on our website during the three months ended June 30, 2011, and the establishment of officer compensation of $10,000 per month, along with a consulting agreement consisting of monthly payments of $3,000 that had not yet been established during the three months ended June 30, 2011.
Total Other Expense:
Total other expense was $199 for the three months ended June 30, 2011 compared to $-0- for three months ended June 30, 2010, an increase of $199 or 100%. The increase in total other expense was due to interest incurred on a promissory note payable related to the purchase of a website platform during the three months ended June 30, 2011 that was not present in the comparative period.
Net Loss:
The net loss for the three months ended June 30, 2011 was $70,139, compared to a net loss of $13,860 for the three months ended June 30, 2010, an increased net loss of $56,279. Net loss increased primarily as a result of our commencement of operations on our website during the three months ended June 30, 2011, and the establishment of officer compensation of $10,000 per month, along with a consulting agreement consisting of monthly payments of $3,000 that had not yet been established during the three months ended June 30, 2011.
LIQUIDITY AND CAPITAL RESOURCES
The following table summarizes total assets, total liabilities, retained earnings, accumulated deficit, stockholders’ equity and working capital at June 30, 2011 compared to March 31, 2011.
|
June 30, 2011
|
March 31, 2011
|
|||||||
|
Total Assets
|
$ | 33,019 | $ | 101,908 | ||||
|
Total Liabilities
|
$ | 50,465 | $ | 49,215 | ||||
|
Retained Earnings (Deficit)
|
$ | (35,446 | ) | $ | 34,693 | |||
|
Stockholders’ Equity (Deficit)
|
$ | (17,446 | ) | $ | 52,693 | |||
|
Working Capital (Deficit)
|
$ | (26,841 | ) | $ | 42,767 | |||
Our principal source of operating capital has been derived from private sales of our common stock, loans from our officer and revenues from operations. At June 30, 2011, we had a working capital deficit of $(26,841). As we continue to implement our business plan and attempt to expand operational activities, we expect to continue to experience net negative cash flows from operations in amounts not now determinable, and will be required to obtain additional financing to fund operations through common stock offerings and debt borrowings to the extent necessary to provide working capital. We have and expect to continue to have substantial capital expenditure and working capital needs. We do not now have funds sufficient to fund our operations at their current level for the next twelve months. We need to raise additional cash to fund our operations and implement our business plan. We expect that the additional financing will (if available) take the form of a private placement of equity, although we may be constrained to obtain additional debt financing in lieu thereof. We are maintaining an on-going effort to locate sources of additional funding, without which we will not be able to remain a viable entity. No financing arrangements are currently under contract, and there are no assurances that we will be able to obtain adequate financing. If we are able to obtain the financing required to remain in business, eventually achieving operating profits will require substantially increasing revenues or drastically reducing expenses from their current levels or both. If we are able to obtain the required financing to remain in business, future operating results depend upon a number of factors that are outside of our control.
During the three months ended June 30, 2011 the Company received short term, unsecured, bridge loans totaling $1,141, from the Company’s CEO, Julian Spitari. These loans were repaid in full during the three months ended June 30, 2011. There is no guarantee that the founder and CEO, Julian Spitari will be willing to commit any further loans to the Company at this time.
Satisfaction of our Cash Obligations for the Next 12 Months
As of June 30, 2011, our cash balance was $16,979. Our plan for satisfying our cash requirements for the next twelve months is through sales-generated income, sale of shares of our common stock, third party financing, and/or traditional bank financing. We anticipate sales-generated income during that same period of time, but do not anticipate generating sufficient amounts of revenues to meet our working capital requirements. Consequently, we intend to make appropriate plans to secure sources of additional capital in the future to fund growth and expansion through additional equity or debt financing or credit facilities.
13
Going Concern
Our financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplate the realization of assets and liquidation of liabilities in the normal course of business. We have produced net losses of $70,139 and $13,860 for the three months ended June 30, 2011 and 2010, respectively, has retained earnings (deficit) of ($35,446) and $34,693 at June 30, 2011 and March 31, 2011, respectively, and cash on hand of $16,979 as of June 30, 2011. The Company’s cash on hand is insufficient to sustain operations for the next twelve months. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management is currently seeking additional sources of capital to fund short term operations. The Company, however, is dependent upon its ability to secure equity and/or debt financing and there are no assurances that the Company will be successful, therefore, without sufficient financing it would be unlikely for the Company to continue as a going concern. The Company’s ability to continue as a going concern must be considered in light of the problems, expenses, and complications frequently encountered by entrance into established markets and the competitive nature in which we operate.
Our ability to continue as a going concern is dependent on our ability to generate sufficient cash from operations to meet our cash needs and/or to raise funds to finance ongoing operations and repay debt. There can be no assurance, however, that we will be successful in our efforts to raise additional debt or equity capital and/or that our cash generated by our future operations will be adequate to meet our needs. These factors, among others, indicate that we may be unable to continue as a going concern for a reasonable period of time.
Item 3. Quantitative and Qualitative Disclosures About Market Risks
Not applicable.
Evaluation of Disclosure Controls and Procedures
Our CEO, Julian Spitari, carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a – 15(c) and 15d – 15(e)). Based upon that evaluation, our principal executive officer concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were not effective to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer, as appropriate to allow timely decisions regarding required disclosure. Based on the evaluation, Mr. Spitari concluded that our disclosure controls and procedures are not effective in timely alerting him to material information relating to us (including our consolidated subsidiaries) required to be included in our periodic SEC filings and ensuring that information required to be disclosed by us in the reports we file or submit under the Act is accumulated and communicated to our management, including our chief financial officer, or person performing similar functions, as appropriate to allow timely decisions regarding required disclosure, for the following reasons:
| ● |
The Company does not have an independent board of directors or audit committee or adequate segregation of duties.
|
|
| ● |
We do not have an independent body to oversee our internal controls over financial reporting and lack segregation of duties due to the limited nature and resources of the Company.
|
Inherent Limitations of Internal Controls
Our Principal Executive Officer does not expect that our disclosure controls or internal controls will prevent all error and all fraud. Although our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented if there exists in an individual a desire to do so. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting, other than those stated above, during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
14
PART II – OTHER INFORMATION
From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are not presently a party to any material litigation, nor to the knowledge of management is any litigation threatened against us, which may materially affect us.
Not applicable.
None
None
None
Item 6. Exhibits
|
31.1
|
Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
|
|
|
32.1
|
Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
|
|
| 101.INS | XBRL Instance Document* | |
| 101.SCH | XBRL Schema Document* | |
| 101.CAL | XBRL Calculation Linkbase Document* | |
| 101.DEF | XBRL Definition Linkbase Document* | |
| 101.LAB | XBRL Labels Linkbase Document* | |
| 101.PRE | XBRL Presentation Linkbase Document* |
* Filed herewith.
15
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this Report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.
| Imobolis, Inc. | |||
|
Date: August 15, 2011
|
By:
|
/s/ Julian Spitari | |
| Julian Spitari | |||
| Chief Executive Officer | |||
| (Principal Executive Officer and Principal Financial Officer) | |||
16