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 December 31, 2014

¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission file number: 0-55270

1075 Peachtree Street NE, Suite 3650

Atlanta, GA 30309

(Address of principal executive offices)

409-965-376

 (Registrant’s telephone number, including area code)

____________________________________________________________ 

(Former name, former address and former fiscal year, if changed since last report)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data file required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

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

As of February 12, 2015, 112,246,664 shares of common stock, par value $0.001 per share, were issued and outstanding.

TABLE OF CONTENTS

PART I FINANCIAL INFORMATION

Item 1. Financial Statements.

See Accompanying Notes to Unaudited Condensed Financial Statements

See Accompanying Notes to Unaudited Condensed Financial Statements

See Accompanying Notes to Unaudited Condensed Financial Statements

FLASR, Inc.

(Formerly: Language Arts Corp.) 

Notes to Condensed Financial Statements 

(Unaudited)

NOTE 1 – HISTORY AND ORGANIZATION OF THE COMPANY

FLASR, Inc.

FLASR, Inc. (“FLASR”) was incorporated in the State of Delaware on February 13, 2013 to engage in the business of selling portable tobacco flasks. Mr. Everett Dickson owned all of the issued and outstanding shares of common stock of FLASR and was its President and Chief Executive Officer, Secretary and Treasurer and sole director.

Language Arts Corp.

The Language Arts Corp. (“Language Arts”) was incorporated in the State of Nevada on April 22, 2013 to design, develop and launch an online language learning and translation service via the Internet but never commenced such planned operations, had limited start-up operations, and generated no revenues.

NOTE 2 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying condensed financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and notes required by US GAAP for complete financial statements.

The Company has elected a March 31 fiscal year end.

The accompanying condensed consolidated financial statements at December 31, 2014 and March 31, 2014 and for the three-month and nine-month periods ended December 31, 2014 and 2013 contain all normally recurring adjustments considered necessary for a fair presentation of the Company’s financial position, results of operations, and cash flows for such periods. Operating results for the three and nine month periods ended December 31, 2014 are not necessarily indicative of the results that may be expected for the year ending March 31, 2015.

These consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in the FLASR’S audited financial statements for the year ended March 31, 2014, attached as Exhibit 99.1 to the Form 8-K filed with the SEC on September 18, 2014.

NOTE 3 – GOING CONCERN

The Company's financial statements are prepared using US GAAP applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has limited operating history and a working capital deficit. These factors raise substantial doubt about the Company's ability to continue as a going concern.

The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations. In order to continue as a going concern, the Company will need, among other things, additional capital resources.

Management plans to raise money by selling stock, and expects additional cash flows from sales in future periods. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 4 – EQUITY RECAPITALIZATION AND ISSUANCE OF NEW SHARES

Stock Purchase

On July 23, 2014, pursuant to a stock purchase agreement with Language Arts, Mr. Everett Dickson and FLASR, Mr. Dickson consummated the purchase of 6,000,000 (pre-split, as described below) shares of common stock, par value $0.001 per share, of the Language Arts from Maria del Pilar Jaen which represented 63.15% of the issued and outstanding shares of Language Arts on a fully diluted basis. The purchase price for the shares of $30,000 is payable by Mr. Dickson to Ms. Jaen on January 23, 2015.

Effective July 23, 2014, in connection with the closing of the stock purchase agreement, Ms. Jaen resigned as the sole officer and director of Language Arts and Mr. Dickson was appointed President, Chief Executive Officer, Chief Financial Officer and sole director of Language Arts. Mr. Dickson took control with the intention of merging FLASR into Language Arts. 

Stock Split, Equity Transactions, and Reorganization

On July 30, 2014, Language Arts’ board of directors approved the implementation of a stock dividend payment, effective on September 22, 2014, in the form of a 1:6 forward stock split whereby each holder of record on August 28, 2014 of the 9,500,000 issued and outstanding shares of common stock automatically received shares at the rate of 1 for 5, without any action on the part of the stockholders. Accordingly, there were an additional 47,500,000 shares of common stock issued and outstanding on the said date.

Effective September 22, 2014, Language Arts, having amended and restated its articles of incorporation with the Secretary of State of Nevada; (i) changed its name to FLASR, Inc.; (ii) increased the amount of authorized shares of common stock from 75,000,000 to 150,000,000; and (iii) authorized the issuance of 5,000,000 shares of blank check preferred stock. In addition, Language Arts changed its ticker symbol from “LGUA” to "FLSR".

FLASR Acquisition

On September 16, 2014, Language Arts acquired all of the outstanding capital stock (the “Shares”) of FLASR pursuant to a stock purchase agreement with FLASR and its sole stockholder Everett Dickson. As a result, FLASR became a wholly owned subsidiary of Language Arts.

In exchange for the Shares, Language Arts issued an aggregate of 50,000,000 shares (post-split) of its common stock to Mr. Dickson, resulting in Mr. Dickson owning 80.4% of the 107,000,000 issued and outstanding share capital of Language Arts (after adjusting for the 1:6 forward stock split as described above).

Reverse Capitalization

The acquisition of FLASR by Language Arts was treated as a reverse capitalization, with FLASR deemed the accounting acquirer and Language Arts deemed the accounting acquiree under the purchase method of accounting. The reverse merger is deemed a recapitalization and the accompanying financial statements represent the continuation of the financial statements of FLASR (the accounting acquirer/legal subsidiary) except for its capital structure, and the accompanying financial statements reflect the assets and liabilities of FLASR recognized and measured at their carrying value before the combination and the assets and liabilities of Language Arts (the legal acquiree/legal parent). The equity structure reflects the equity structure of Language Arts, the legal parent, and the equity structure of FLASR, the accounting acquirer, as restated to reflect the number of shares of the legal parent. The merged entity is referred to herein as “the Company”.

The following table reflects the net change in authorized, issued and outstanding shares of common and preferred stock of Language Arts, FLASR and the Company as a result of the reverse capitalization (as described in Note 2):

* The Company's post reverse capitalization share balances. The par value on ending common and preferred shares is $0.001.

Issuance of Common Shares During Third Quarter of 2015

On November 19, 2014, the company in consideration for services previously rendered, the company issued an additional 5,350,000 common shares to third party investors. The shares were valued at the market price on the respective dates of issuance, and the fair value of the shares was determined to be $2,942,500 and is recorded as stock base compensation for the nine months ended December 31, 2014. The common shares issued and outstanding totaled 112,350,000 on December 31, 2014.

NOTE 5 – INDEFINITE-LIVED INTANGIBLE ASSETS

The Company owns the FLASR trademark, which is used to market its products. As of December 31st, 2014 and March 31, 2014, the total capitalized cost related to our trademark was $4,837 and $4,678, net of accumulated amortization of $288 and $164, respectively. Management determined that trademark has a 10 year useful life and it is being amortized over this period using the straight-line method.

NOTE 6 – RELATED PARTY TRANSACTIONS

Loans from shareholders represents a net short term payable that resulted from operating activities between the FLASR, the Company and Everett Dickson, FLASR’s founder and primary shareholder, and EMDI, LLC., FLASR’s affiliate owned 100% by Everett Dickson.

As of December 31, 2014 and March 31, 2014, the Company and FLASR, respectively, had outstanding notes payable to related parties of $168,599 and $248,864, respectively. These notes are unsecured, payable upon demand and have no stated interest rate.

NOTE 7 – NOTES PAYABLE

During the first quarter of 2015, the Company incurred in a notes payable with a third party for $50,000, 12% of interest rate and maturity date of March, 10, 2015.

During the second quarter of 2015, the Company incurred in a note payable with a third party for $75,000, 10% of interest rate and maturity date of September 2, 2015.

During the second quarter of 2015, the Company repaid $5,000 outstanding on FLASR’s note payable with a third party.

During the third quarter of 2015, the Company incurred in a note payable with a third party for $75,000, 10% of interest rate and maturity date of April 29, 2015.

During the third quarter of 2015, the Company incurred in a note payable with a third party for $20,000, 10% of interest rate and maturity date of October 7, 2015.

During the third quarter of 2015, the Company incurred in a note payable with a third party for $55,000, 10% of interest rate and maturity date of October 13, 2015.

During the third quarter of 2015, the Company incurred in a note payable with a third party for $75,000, 10% of interest rate and maturity date of December 10, 2015.

During the third quarter of 2015, the Company incurred in a note payable with a third party for $75,000, 10% of interest rate and maturity date of December 18, 2015.

During the third quarter of 2015, the Company repaid $14,000 outstanding on FLASR’s note payable with a third party.

Item 2. Management’s Discussion and Analysis or Plan of Operations.

As used in this Quarterly Report on Form 10-Q, references to the “Company,”, “we,” “our” or “us” refer to Language Arts Corp. unless the context otherwise indicates.

Forward-Looking Statements

The following discussion should be read in conjunction with the financial statements of the Company which are included elsewhere in this Form 10-Q. Certain statements contained in this report, including statements regarding the anticipated development and expansion of our business, our intent, belief or current expectations, primarily with respect to the future operating performance of the Company and other statements contained herein regarding matters that are not historical facts, are "forward-looking" statements. Future filings with the Securities and Exchange Commission, future press releases and future oral or written statements made by us or with our approval, which are not statements of historical fact, may contain forward-looking statements. Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. All forward-looking statements speak only as of the date on which they are made. We undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made, except as required by federal securities and any other applicable law.

Plan of Operation

History

On July 23, 2014, Everett Dickson consummated the purchase of 6,000,000 shares of common stock of the Company from Maria del Pilar Jaen. The shares represented 63% of the issued and outstanding shares of the Company on a fully diluted basis. The purchase price for the shares of $30,000 is payable by Mr. Dickson to Ms. Jean on January 23, 2015. Everett Dickson, the majority stockholder and sole officer and director of the Company, took control of the Company with the intention of merging his private, solely owned company "FLASR Inc." into the Company. The Board approved the implementation of a stock dividend payment in the form of a 1:6 forward stock split whereby shares of common stock held by each stockholder of record on August 28, 2014 automatically received shares at the rate of 1 for 5, without any action on the part of the stockholders. Accordingly, there were an additional 47,500,000 shares of common stock issued and outstanding. The Company has also filed an application with FINRA to (i) change the ticker symbol of the Company to "FLSR", (ii) change the name of the Company to FLASR Inc., (iii) increase the authorized share shares of common stock from 75,000,000 to 150,000,000 and (iv) increase the authorized share capital of the Company by providing for the adoption of 5,000,000 shares of blank check preferred stock.

Pursuant to the closing of the Purchase Agreement on September 16, 2014, the Company acquired all of the issued and outstanding capital stock of FLASR Inc. from Mr. Dickson for 50,000,000 shares of the Company’s common stock and FLASR became a wholly-owned subsidiary of the Company. As a result of the acquisition, management intends to focus the Company’s business on FLASR’s development and sale of the portable FLASRs for tobacco by products.

The acquisition of FLASR by the Company was treated as a reverse capitalization, with FLASR deemed the accounting acquirer and the Company deemed the accounting acquiree under the purchase method of accounting. The reverse merger is deemed a recapitalization and the accompanying financial statements represent the continuation of the financial statements of FLASR (the accounting acquirer/legal subsidiary) except for its capital structure, and the accompanying financial statements reflect the assets and liabilities of FLASR recognized and measured at their carrying value before the combination and the assets and liabilities of Language Arts (the legal acquiree/legal parent). The equity structure reflects the equity structure of Language Arts, the legal parent, and the equity structure of FLASR, the accounting acquirer, as restated to reflect the number of shares of the legal parent. The merged entity is referred to herein as “the Company”.

Results of Operations

For the three months ended December 31, 2014 and December 31, 2013

Revenues

The Company generated $11,331 in revenues during the three months ended December 31, 2014, as compared to $16,477 in revenues for the three months ended December 31, 2013.

Total operating expenses

For the three months ended December 31, 2014, total operating expenses were $3,151,917, consisting of product marketing costs of $138,922, general and administrative expenses of $3,008,176, and preproduction costs of $4,819. For the three months ended December 30, 2013, total expenses were $44,990, which is attributable to $29,041 in product marketing costs, $14,699 in general and administrative expenses and $1,250 in research and development costs. Operating expenses increased $3,106,927, or approximately 6906%, primarily due to $2.9 million of stock base compensation expense.

Net loss

For the three months ended December 31, 2014, the Company had a net loss of $3,156,182, as compared to a net loss for the three months ended December 31, 2013 of $36,165.

Comparison of Nine Months Ended December 31, 2014 and 2013

Revenues

The Company generated $15,061 in revenues for the nine months ended December 31, 2014, as compared to $16,477 in revenues for the nine months ended December 31, 2013.

Total operating expenses

During the nine months ended December 31, 2014 and 2013, total operating expenses were $3,260,880 and $156,576, respectively. This increase of $3,104,304 was primarily as a result of the increase in product marketing costs of $82,482 for the nine months ended December 31, 2013 as compared to $143,848 for the nine months ended December 31, 2014, and general and administrative expenses increasing from $38,291 for the nine months ended December 31, 2013 as compared to $3,070,557 for the nine months ended December 31, 2014. Preproduction costs increased from $6,250 for the nine months ended December 31, 2013 to $45,169 for the nine months ended December 31, 2014. Research and development expenses decreased from $29,553 to $1,182, and no amortization expenses in the nine months ended December 31, 2013, for the nine months ended December 31, 2014 amortization expenses was $124.

Net loss

During the nine months ended December 31, 2014 and 2013, the net loss was $3,267,619 and $147,751, respectively.

Liquidity and Capital Resources

As of December 31, 2014, the Company had approximately $31,864 in cash. We estimate that within the next 12 months we will need approximately $1,500,000 for the next twelve months to develop our business. We cannot be certain that the required additional financing will be available or available on terms favorable to us. If additional funds are raised by the issuance of our equity securities, such as through the issuance of additional shares and the issuance and exercise of warrants, then existing stockholders will experience dilution of their ownership interest. If adequate funds are not available or not available on acceptable terms, we may be unable to fund our operations. The Company currently has no agreements, arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources.

As of December 31, 2014, the Company and its wholly owned subsidiary FLASR, had outstanding notes payable to Everett Dickson, the Company’s sole officer and director, of $168,599. These notes are unsecured, payable upon demand and have no stated interest rate. There is an additional aggregate amount of $411,000 payable within the next 12 months, with interest accruing at rates at either 10% or 12%.

Going Concern

As of December 31, 2014, the Company has total stockholders’ deficit of $620,200 and total liabilities. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations. In order to continue as a going concern, the Company will need, among other things, additional capital resources. Our auditors have issued a going concern opinion on our financial statements. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay for our expenses. This is because we have not generated sufficient revenues. There is no assurance we will ever reach this point. Accordingly, we must raise sufficient capital from sources. Our only other source for cash at this time is investments by others. We must raise cash to stay in business. In response to these problems, management intends to raise additional funds through public or private placement offerings.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Critical Accounting Policies

Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in the notes to our financial statements. In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.

Recently Issued Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that may have a material impact on its financial position or results of operations.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

As a “smaller reporting company”, we are not required to provide the information required by this Item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president (our principal executive officer, principal financial officer and principal accounting officer) to allow for timely decisions regarding required disclosure. As of December 31, 2014, we carried out an evaluation, under the supervision and with the participation of our president (our principal executive officer, principal financial officer and principle accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president (our principal executive officer, principal financial officer and principal accounting officer) concluded that our disclosure controls and procedures were effective as of December 31, 2014.

Changes in Internal Controls over Financial Reporting

There were no changes in our internal controls over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II OTHER INFORMATION

Item 1. Legal Proceedings.

There are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company. The Company’s property is not the subject of any pending legal proceedings.

Item 1A. Risk Factors

As a “smaller reporting company”, we are not required to provide the information required by this item.

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

On November 19, 2014, the Company issued an aggregate of 5,350,000 shares of common stock to three consultants in consideration for services provided to the Company. The shares were issued in reliance on the exemption from registration provided by Section 4(2) of the Act, for transactions by an issuer, not involving a public offering.

Purchases of equity securities by the issuer and affiliated purchasers.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not Applicable

Item 5. Other Information

None  

Item 6. Exhibits. 

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.

17