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, 2015

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: 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 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 o 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 o No x

As of April 1, 2016, 30,594,194 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.

FLASR INC.

(Formerly: Language Arts Corp.)

BALANCE SHEETS

The accompanying notes are an integral part of these financial statements. 
  

FLASR INC.
(Formerly: Language Arts Corp.)

STATEMENTS OF OPERATIONS

The accompanying notes are an integral part of these financial statements. 

FLASR INC.

(Formerly: Language Arts Corp.)

STATEMENTS OF CASH FLOWS

The accompanying notes are an integral part of these financial statements.

FLASR Inc.

(Formerly: Language Arts Corp.)

Notes to Financial Statements

NOTE 1 – HISTORY AND ORGANIZATION OF THE COMPANY

We were incorporated on April 22, 2013 in the State of Nevada under the name "Language Arts Corp." to design, develop and launch an online language learning and translation service but never commenced such planned operations and had limited start-up operations and generated no revenues.

On July 23, 2014, Everett Dickson consummated the purchase of 6,000,000 shares of common stock of the Company representing 63% of the issued and outstanding shares of the Company on a fully diluted basis. The purchase price for the shares of $30,000 was payable on January 23, 2015.

Effective July 23, 2014, in connection with the closing of the Purchase Agreement, the sole officer and director of the Company resigned and Mr. Dickson was appointed President, Chief Executive Officer, Chief Financial Officer and sole director of the Company.

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. 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 Company sells portable waste solutions for consumers of moist tobacco products. We have created the FLASR™, a discreet, considerate, convenient and reusable spittoon system.

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

Basis of Presentation

The accompanying 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 financial statements at December 31, 2015 and March 31, 2015 and for the three and nine-month periods ended December 31, 2015 and 2014 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 months and nine months ended December 31, 2015 are not necessarily indicative of the results that may be expected for the year ending March 31, 2016.

These financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company's audited financial statements for the year ended March 31, 2015, to the form 10-K filed with the SEC on June 29, 2015.

FLASR Inc.

(Formerly: Language Arts Corp.)

Notes to Financial Statements

Recent Accounting Pronouncements

In May 2014, Financial Accounting Standards Board ("FASB") issued guidance that introduces a new five-step revenue recognition model in which an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance also requires disclosures sufficient to enable users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative disclosures about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. In April 2015, the FASB decided to delay the effective date for the guidance. The guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period. The Company is currently evaluating the new guidance to determine the impact it will have on its financial statements.

In June 2014, the FASB issued amended guidance on the accounting for certain share-based employee compensation awards. The amended guidance applies to share-based employee compensation awards that include a performance target that affects vesting when the performance target can be achieved after the requisite service period. These targets are to be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award and compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved. The amendments are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. The Company does not expect adoption will have a material impact on its financial statements.

In February 2015, the FASB issued amended guidance on the consolidation of legal entities including limited partnerships and limited liability corporations. The guidance modifies the consolidation models to be analyzed in determining whether a reporting entity should consolidate certain types of legal entities. The guidance must be applied using one of two retrospective application methods and will be effective for fiscal years beginning after December 15, 2015, and for interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period. The Company does not expect adoption will have a material impact on its financial statements.

In April 2015, the FASB issued guidance in order to simplify the presentation of debt issuance costs. The guidance requires that debt issuance costs related to a recognized debt liability be presented as a direct deduction from the carrying amount of the debt liability rather than as a deferred charge asset as required under current guidance. The guidance also requires that the amortization of debt issuance costs be reported as interest expense. The guidance is effective for the Company starting January 1, 2016 and must be applied on a retrospective basis. Early adoption is permitted. The Company has chosen to early adopt this guidance as of the interim period ended March 31, 2015. No retrospective application was deemed necessary, as the Company did not have any debt issuance costs prior to the three and nine months ended December 31, 2015. Approximately $23,521 of net debt issuance costs have been deducted from the carrying amount of debt as of December 31, 2015.

In June 2015, the FASB issued Accounting Standards Update No. 2015-10: Technical Corrections and Improvements (ASU 2015-10). ASU 2015-10 is part of an initiative to clarify the Accounting Standards Codification (Codification), correct unintended application of guidance, and make minor improvements to the Codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. ASU 2015-10 covers a wide range of topics in the Codification and is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015; early adoption is permitted. The Company is currently evaluating the provisions of this accounting update and assessing the impact, if any, it may have on its financial position and results of operations.

In July 2015, the FASB issued accounting guidance regarding simplifying the measurement of inventory. The new guidance applies only to inventory for which cost is determined by methods other than last-in, first-out and the retail inventory method, which includes inventory that is measured using first-in, first-out or average cost. Inventory within the scope of this standard is required to be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The new standard will be effective for us on January 1, 2017. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

FLASR Inc.

(Formerly: Language Arts Corp.) 

Notes to Financial Statements

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 – ISSUANCE OF NEW SHARES

During the nine months ended December 31, 2015, in consideration for services previously rendered, the Company issued an additional 430,000 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 $72,256 and is recorded as advertising expense and cost of equity for the [nine] months ended December 31, 2015.

On August 13, 2015, the Company entered into a consulting agreement with a consulting group whereas the consulting group will provide various corporate consulting services over a six month period. As consideration for the consulting services, the Company issued 2,000,000 shares of common stock. The fair value of these shares was measured as of the date the shares were issued and amounted to $230,000 and were recognized as a prepaid expense to be amortized over the life of the agreement. On November 11, 2015, this agreement was terminated, and all fees and expenses were reversed

On August 17, 2015, the Company entered into an Equity Purchase Agreement (Note 6) with Premier Venture Partners, LLC, a California Limited Liability Company (the "Investor") whereas the Company can require the Investor to invest up to $3.0 million to purchase the Company's common stock. In exchange for this option, the Company issued 473,784 common shares as partial consideration. The fair value of these shares as of the date of issuance were $75,805 and were charged as Equity Purchase Agreement Fees on the Company's Statement of Operations.

On September 18, 2015, the Company amended the Auctus Fund, LLC Note (defined in Note 5) to exclude the obligation that the Company shall include on the next registration statement the Company files with the SEC all shares issuable upon conversion of this note. As consideration for this amendment, the Company issued the Auctus Fund, LLC an additional 30,000 common shares. These shares were included as deferred financing costs at their fair value of $3,000 as of the date of issuance.

The common shares issued and outstanding totaled 297,038,096 on December 31, 2015.

FLASR Inc.

(Formerly: Language Arts Corp.)

Notes to Financial Statements

NOTE 5 – DERIVATIVES AND SHORT-TERM DEBT

Derivatives

During the first nine months of fiscal year 2016, the Company entered into several Security Purchase Agreements for convertible debt which contain the following embedded derivatives: (i) rights to convert principal and interest payable into shares of the Company's common stock under specific circumstances for each Note; and (ii) conversion prices that varies depending on the stock prices at the time of the conversion.

Accounting standards define fair value, outline a framework for measuring fair value, and detail the required disclosures about fair value measurements. Under these standards, 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 in the principal or most advantageous market. Standards establish a hierarchy in determining the fair market value of an asset or liability. The fair value hierarchy has three levels of inputs, both observable and unobservable. Standards require the utilization of the highest possible level of input to determine fair value.

Level 1 – inputs include quoted market prices in an active market for identical assets or liabilities

Level 2 – inputs are market data, other than Level 1, that are observable either directly or indirectly. Level 2 inputs include quoted market prices for similar assets or liabilities, quoted market prices in an active market, and other observable information that can be corroborated by market data.

Level 3 – inputs are unobservable and corroborated by little or no market data.

While the Company believes that its valuation methods, as set forth below, are appropriate and consistent with other market participants, it recognizes that the use of different methodologies or assumptions to determine the fair value of certain instruments could result in a different estimate of fair value at the reporting date.

The Company estimated the fair value of the embedded derivatives based upon Level 3 inputs as described below.

Convertible Notes

The Company estimated the fair value of the Convertible Notes using the Black-Scholes approach. The fair value of the derivatives at December 31, 2015 is valued at $0, as the stock price is valued at $0, and therefore the derivatives have no value at December 31, 2015.

The Company recorded Deferred financing fees of $58,200 during the first quarter of 2015 and $36,450 during the second quarter. They also recorded amortization of the fees of $16,254 during the first quarter and $54,875 during the second quarter.

During the first quarter of fiscal year 2016, the Company entered into a Securities Purchase Agreement with Vis Vires Group, Inc. ("Vis Vires") for the sale of a convertible promissory note (the "Vis Vires Note") in the principal amount of $38,000. On April 1 2015, Vis Vires executed the Securities Purchase Agreement and funded the Company pursuant to the terms thereof. The note bears an interest rate of 8% and is due on December 27, 2015. The note holder shall have the right to convert the note to the Company common stock beginning on the date which is 180 days from the date of this note and the conversion price is 58% multiplied by the average of the lowest three trading prices during the 10 trading day period prior to the conversion date. The note converted fully into common stock during the third quarter 2015. Total options converted are 6,658,872.

During the first quarter of fiscal year 2016, the Company executed a 12% convertible note (the "JSJ Note") in the principal amount of $57,000 with JSJ Investments Inc., a Texas corporation ("JSJ"). The JSJ Note, which is due on October 1, 2015, bears interest at the rate of 12% per annum. The note holder shall have the right to convert the note to the Company common stock at any time and the conversion price is 55% multiplied by the average of the lowest 20 trading prices prior to the conversion date. The note partially converted into common stock with 8,075,252 options converted, leaving the remaining debt value at $28,672 during the third quarter 2015. The estimated Warrants total 603,222,249, and are valued at $0.0001 each as of December 31, 2015.

FLASR Inc.

(Formerly: Language Arts Corp.)

Notes to Financial Statements

The following table sets forth the inputs to the Black-Scholes model that was used to value the embedded derivative at December 31, 2015:

During the first quarter of fiscal year 2016, the Company entered into a Securities Purchase Agreement with LG Capital Funding, LLC, a New York limited liability Company ("LG") for the sale of two convertible notes (the "LG Note") in the principal amount of $157,500 ($78,750 each). The notes bear an interest rate of 8% and are due on April 1, 2016. Interest is payable in cash only. The note holder shall have the right to convert the Second Note to the Company common stock once the Buyer Note is paid off in cash. The conversion price is 60% multiplied by the average of the lowest 20 trading prices prior to the conversion date. The note was $71,976 at December 31, 2015, and 5,044,739 options were converted to common stock. The estimated Warrants total 1,199,598,009, and are valued at $0.0001 each as of December 31, 2015.

The following table sets forth the inputs to the Black-Scholes model that was used to value the embedded derivative at December 31, 2015:

During the first quarter of fiscal year 2016, the Company entered into a Securities Purchase Agreement with Adar Bays, LLC, a Florida limited liability Company ("Adar Bays") for the sale of two convertible notes (the "Adar Bays Note") in the principal amount of $150,000 ($75,000 each). The notes bear an interest rate of 8% and are due on April 2, 2016. Interest is payable in cash only. The note holder shall have the right to convert the Second note to the Company common stock once the Buyer Note is paid off in cash. The conversion price is 60% multiplied by the average of the lowest 20 trading prices prior to the conversion date. The note was $43,545 at December 31, 2015 and 45,998,030 options were converted to common stock. The estimated Warrants total 725,752,311, and are valued at $0.0001 each as of December 31, 2015.

FLASR Inc.

(Formerly: Language Arts Corp.)

Notes to Financial Statements

The following table sets forth the inputs to the Black-Scholes model that was used to value the embedded derivative at December 31, 2015:

During the first quarter of fiscal year 2016, the Company entered into a Securities Purchase Agreement with Union Capital, LLC, Nevada Limited Liability Company ("Union Capital") for the sale of two convertible notes (the "Union Capital Note") in the principal amount of $100,000 ($50,000 each). The notes bear and interest rate of 8% and are due on April 15, 2016. Interest is payable in cash only.The note holder shall have the right to convert the Second Note to the Company common stock once the Buyer Note is paid off in cash. The conversion price is 60% multiplied by the average of the lowest 20 trading prices prior to the conversion date. The note was $11,579 at December 31, 2015, and 30,927,853 options were converted to common stock. The estimated Warrants total 241,736 and are valued at $0.0001 each as of December 31, 2015.

The following table sets forth the inputs to the Black-Scholes model that was used to value the embedded derivative at December 31, 2015:

During the first quarter of fiscal year 2016, the Company entered into a Securities Purchase Agreement with Black Forest Capital, LLC, a New York Limited Liability Company ("Black Forest") for the sale of two convertible notes (the "Black Forest Note") in the principal amount of $150,000 ($75,000 each). The notes bear an interest rate of 10% and are due on March 8, 2016. Interest is payable only in cash. The note holder shall have the right to convert the Second note to the Company common stock once the Buyer Note is paid off in cash. The conversion price is 58% multiplied by the lowest bid price of the last 10 trading prices prior to the conversion date. The note was $61,966 at December 31, 2015, and 23,074,570 options were converted to common stock. The estimated Warrants total 1,068,386,586 and are valued at $0.0001 each as of December 31, 2015.

FLASR Inc.

(Formerly: Language Arts Corp.) 

Notes to Financial Statements

The following table sets forth the inputs to the Black-Scholes model that was used to value the embedded derivative at December 31, 2015:

During the second quarter of fiscal year 2016, the Company entered into a Securities Purchase Agreement with Auctus Fund, LLC, a Massachusetts Limited Liability Company, for the sale of a convertible redeemable note (the "Auctus Fund, LLC Note") in the principal amount of $51,000. The note bears an interest rate of 10% and is due on April 28, 2016. The note holder shall have the right to convert the notes to the Company common stock at any time and the conversion price is the lesser of 55% multiplied by the lowest trading price for the previous 25 days ending on the last complete trading day prior to the date of this Note or the variable trading price which is 55% multiplied by the lowest 25 trading prices ending on the latest complete trading day prior to the conversion date subject to equitable adjustments for stock splits, stock dividends, or right offerings. The Company amended this agreement during the second quarter of fiscal 2015 to exclude the obligation that the Company shall include on the next registration statement the Company files with the SEC all shares issuable upon conversion of this Note. As consideration for this amendment, the Company issued the Auctus Fund, LLC an additional 30,000 common shares as discussed in Note 4. The note plus accrued interest was $53,180 at December 31, 2015. The estimated Warrants total 966,904,110 and are valued at $0.0001 each at December 31, 2015.

The following table sets forth the inputs to the Black-Scholes model that was used to value the embedded derivative at December 31, 2015:

During the second quarter of fiscal year 2016, the Company entered into a Securities Purchase Agreement with Vis Vires for the sale of a convertible promissory note (the "2016 Vis Vires Note") in the principal amount of $48,000. The note bears an interest rate of 8% and is due on March 8, 2016. The note holder shall have the right to convert the note to the Company common stock beginning on the date which is 180 days from the date of this note and the conversion price is 58% multiplied by the average of the lowest three trading prices during the 10 trading day period prior to the conversion date. The note plus accrued interest was $48,153 at December 31, 2015. The estimated Warrants total 830,224,451, and are valued at $0.0001 each at December 31, 2015.

FLASR Inc.

(Formerly: Language Arts Corp.)

Notes to Financial Statements

The following table sets forth the inputs to the Black-Scholes model that was used to value the embedded derivative at [December 31], 2015:

During the second quarter of fiscal year 2016, the Company entered into a Securities Purchase Agreement with GW Holdings Group, LLC, a New York Limited Liability Company, for the sale of a convertible promissory note (the "GW Holdings Note") in the principal amount of $37,000. The note bears an interest rate of 8% and is due on July 14, 2016. The note holder shall have the right to convert the note to the Company common stock beginning on the date which is 180 days from the date of this note and the conversion price is 57.5% multiplied by the lowest trading price during the 20 trading days up to the conversion date. The note plus accrued interest was $38,379 at December 31, 2015. The estimated Warrants total 667,595,473, and are valued at $0.0001 each as of December 31, 2015.

The following table sets forth the inputs to the Black-Scholes model that was used to value the embedded derivative at December 31, 2015:

During the second quarter of fiscal year 2016, the Company entered into a Securities Purchase Agreement with Essex Global Investment Corp for the sale of a convertible promissory note (the "Essex Global Note") in the principal amount of $50,000. The note bears an interest rate of 10% and is due on August 7, 2016. The note holder shall have the right to convert the note to the Company common stock beginning on the date which is 180 days from the date of this note and the conversion price is 58% multiplied by the lowest trading price during the 10 trading day period prior to the conversion date. The note plus accrued interest was $52,000 at December 31, 2015. The estimated Warrants total 896,551,724, and are valued at $0.0001 each as of December 31, 2015.

FLASR Inc.

(Formerly: Language Arts Corp.)

Notes to Financial Statements

The following table sets forth the inputs to the Black-Scholes model that was used to value the embedded derivative at December 31, 2015:

During the second quarter of fiscal year 2016, the Company entered into a Securities Purchase Agreement with Premier Venture Partners, LLC, for the sale of a convertible promissory note (the "Premier Venture Note") in the principal amount of $75,000. The note bears an interest rate of 5% and is due on February 6, 2016. The note holder shall have the right to convert the note to the Company common stock beginning on the date which is 180 days from the date of this note and the conversion price is 70% multiplied by the volume weighted average price during the 10 trading day period prior to the conversion date. The note plus accrued interest was $76,397 at December 31, 2015. The estimated Warrants total 1,091,389,432, and are valued at $0.0001 each as of December 31, 2015.

The following table sets forth the inputs to the Black-Scholes model that was used to value the embedded derivative at December 31, 2015:

During the second quarter of fiscal year 2016, the Company entered into a Securities Purchase Agreement with Yoshar Trading, LLC, a Florida limited liability company, for the sale of a convertible promissory note (the "Yoshar Note") in the principal amount of $40,000. The note bears an interest rate of 10% and is due on August 11, 2016. The note holder shall have the right to convert the note to the Company common stock beginning on the date which is 180 days from the date of this note and the conversion price is 57.5% multiplied the lowest trading price during the 20 trading day period up to the conversion date. The note plus accrued interest was $41,556 at December 31, 2015. The estimated Warrants total 722,715,902 and are valued at $0.0001 each at December 31, 2015.

FLASR Inc.

(Formerly: Language Arts Corp.)

Notes to Financial Statements

The following table sets forth the inputs to the Black-Scholes model that was used to value the embedded derivative at December 31, 2015:

During the second quarter of fiscal year 2016, the Company entered into a Securities Purchase Agreement with Beaufort Capital Partners, LLC, for the sale of a convertible promissory note in the principal amount of $40,000. The note bears no interest rate and is due on April 14, 2016. The note holder shall have the right to convert the note to the Company common stock at any time from the date of this note and the conversion price is 40% multiplied the lowest trading price. The note partially converted into common stock with 34,510,127 options converted, leaving the remaining debt value at $22,874 during the third quarter 2015. The estimated Warrants total 326,773,947, and are valued at $0.0001 each as of December 31, 2015.

The following table sets forth the inputs to the Black-Scholes model that was used to value the embedded derivative at December 31, 2015:

The Company reserved 23,625,000 shares of common stock for issuance upon full conversion of convertible debt.

NOTE 6 – EQUITY PURCHASE AGREEMENT

On August 17, 2015, the Company entered into an Equity Purchase Agreement (the "Purchase Agreement") with the Investor, pursuant to which the Company has the ability and option to sell and issue shares of its common stock, par value $0.001 per share (the "Common Stock"), to the Investor in an aggregate amount of up to $3 million. Pursuant to the terms of the Purchase Agreement, during a 36-month period beginning the first trading day following the date upon which the SEC declares effective a registration statement covering the resale of the Common Stock to be sold under the Purchase Agreement, the Company may periodically deliver notices requiring the Investor to purchase shares of the Common Stock (each a "Put Notice"). The number of shares subject to each Put Notice must be at least $10,000 worth of the shares and may not exceed four hundred percent (400%) of the average daily trading volume of the Common Stock for the five trading days prior to the date such Put Notice is received by the Investor. The purchase price for the shares of Common Stock under each Put Notice will be ninety percent (90%) of the lowest closing price of the Common Stock during the 10-trading day period following the date upon which the shares of Common Stock subject to such Put Notice are electronically deposited in the Investor's trading account. Per the Purchase Agreement the amount of shares of the Company's Common Stock to be purchased by the Investor is limited to 4.99% of the Company's total outstanding shares of common stock.

FLASR Inc. 

(Formerly: Language Arts Corp.) 

Notes to Financial Statements

In conjunction with the signing of this agreement, the Company issued 473,784 common shares as partial consideration. The fair value of these shares as of the date of issuance was $75,805 and were charged as fees in conjunction with share purchase agreement on the Company's Statement of Operations. As other partial consideration, the Company issued a $75,000 convertible note payable (also discussed in Note 5) to the Investor and charged as fees in conjunction with share purchase agreement on the Company's Statement of Operations.

NOTE 7 – INCOME TAXES

Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. Deferred tax assets are recognized to the extent that the realization of the related tax benefit through future taxable profits is probable. The Company provided a full valuation allowance on the net deferred tax asset, consisting of net operating loss carry forwards, because management has determined that it is more likely than not that the Company will not earn income sufficient to realize the deferred tax assets during the carry forward period.

The Company applies recognition thresholds and measurement attributes for the financial statement recognition and of a tax position taken or expected to be taken in a tax return as it relates to accounting for uncertainty in income taxes. In addition, it is the Company's policy to recognize interest accrued and penalties, if any, related to unrecognized benefits as income tax expense in its consolidated statement of operations.

NOTE 8 – COMMITMENTS AND CONTINGENCIES

From time to time, the Company is a party to various legal proceedings arising in the ordinary course of business. While the Company is unable to predict the outcome of these lawsuits, it believes that the ultimate resolution will not have, either individually or in the aggregate, a material adverse effect on the Company's consolidated financial position, cash flows, or results of operations.

NOTE 9 – SUBSEQUENT EVENTS

Management evaluated the events subsequent to December 31, 2015 through the date these financials were able to be issued.

In February 2016, FLASR Inc. entered into a Convertible Note agreement with GW Holdings Group, LLC for $15,500. GW Holdings converted the Note into common stock shares at $.0001 par value.

In February 2016, FLASR Inc. entered into a Convertible Note agreement with Essex Global Investment Corp for $25,000. The Note matures on February 3, 2017 and accrued interest at 12.% per annum. The Note includes conversion provision with derivative provisions to convert into common shares equal to 50% of the lowest trading price as reported on the National Quotations Bureau OTCQB exchange.

On February 23, 2016, the Company filed an Amended and Restated Certificate of Designation and Preferences of Series A Convertible Preferred Stock (the "Series A Certificate of Designation") with the Secretary of State of the State of Nevada (the "Secretary of State") to reduce the number of authorized shares of Series A Convertible Preferred Stock thereunder to 2,500,000 shares and adjust each of the dividend, conversion and voting rights to a 2,000-to-1 ratio relative to the common stock of the Company, par value $0.001 per share (the "Common Stock").

FLASR Inc. 

(Formerly: Language Arts Corp.) 

Notes to Financial Statements

On February 23, 2016, the Company filed a Certificate of Designation and Preferences of Series A-1 Convertible Preferred Stock (the "Series A-1 Certificate of Designation") with the Secretary of State designating 2,500,000 shares of preferred stock of the Company having a par value of $0.001 per share as "Series A-1 Convertible Preferred Stock" (the "Series A-1 Preferred Stock").Each share of the Series A-1 Preferred Stock will receive 160 times the dividends declared and paid with respect to each share of Common Stock. The holders of the Series A-1 Preferred Stock will have the right to convert their Series A-1 Preferred Stock into fully paid and nonassessable shares (subject to certain adjustments as provided in the Series A-1 Certificate of Designation) of Common Stock at a conversion rate of 160 shares of Common Stock for each share of Series A-1 Preferred Stock.

On January 11, 2016, the Company filed a Certificate of Amendment (the "Certificate of Amendment") to the Company's Articles of Incorporation with the Secretary of State of the State of Nevada to effect a 1-for-500 reverse stock split of all outstanding shares of common stock of the Company, par value $0.001 per share.

On January 12, 2016, Hallco Unlimited Inc. purchased a $40,000 Note agreement originally issued to Backenald Trading Company in March, 2015. The rights, title and ownership in and conversion rights have also been irrevocably sold, assigned and transferred. On February 24, 2016, Big Wave Stocks, Inc. purchased $3,000 of a $35,000 Note agreement originally issued to Backenald Trading Company in March, 2015. The Company issued a Notice of Conversion on March 8, 2016 and converted the $3,000 into 3,000,000 shares.

On February 24, 2016, Brett Rosen, purchased $5,000 of a $35,000 Note agreement originally issued to Backenald Trading Company in March, 2015. The Company issued a Notice of Conversion on March 8, 2016 and converted $3,000 into 3,000,000 shares, leaving $2,000 of purchased debt.

On February 24, 2016, Surf Financial Group, LLC purchased $7,000 of a $35,000 Note agreement originally issued to Backenald Trading Company in March, 2015. The Company issued a Notice of Conversion on March 8, 2016 and converted $3,000 into 3,000,000 shares, leaving $4,000 of purchased debt.

On February 24, 2016, Hallco Unlimited Inc. purchased $20,000 of a $35,000 Note agreement originally issued to Backenald Trading Company in March, 2015. The Company issued a Notice of Conversion on March 8, 2016 and converted $3,000 into 3,000,000 shares, leaving $17,000 of purchased debt.

There were no further subsequent events that required disclosure recognition.

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 FLASR Inc. 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 was payable by Mr. Dickson to Ms. Jean on January 23, 2015.

Effective July 23, 2014, in connection with the closing of the Purchase Agreement, Ms. Jaen resigned as the sole officer and director of the Company and Mr. Dickson was appointed President, Chief Executive Officer, Chief Financial Officer and sole director of the Company.

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 Company's board of directors 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 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 which became effective in September 2014. 
  

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. 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 Corp. (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".

On May 19, 2015, the Company filed a Certificate of Amendment with the Secretary of State of the State of Nevada increasing the amount of authorized shares of common stock of the Company from 150,000,000 to 500,000,000 shares.

Results of Operations

For the three months ended December 31, 2015 and December 31, 2014

Revenues

The Company generated $6,255 in revenues during the three months ended December 31, 2015, as compared to $11,331 in the prior corresponding period. This is due to a decrease in sales.

Total operating expenses

For the three months ended December 31, 2015, total operating expenses were ($112,442), consisting of general and administrative expenses of ($121,344), product advertising costs of $8,818, and amortization expense of $85. For the three months ended December 31, 2014, total operating expenses were $3,151,917, consisting of $3,008,176 in general and administrative expenses, $4,819 in preproduction costs, and $138,922 in product marketing costs. Operating expenses decreased $3,264,359 primarily due to reduced consulting, product advertising and preproduction expenses of $3,009,209, $130,104 and $4,819 respectively. The reduction is due to an overall decrease in spending and issuing stock for services.

Interest Expense

For the three months ended December 31, 2015, interest expense was $63,786 as compared to $7,395 in the prior corresponding period. The increase is primarily related to the increased amount of outstanding short-term debt and amortization of related debt issuance costs. 

Unrealized loss on derivatives for convertible debt

For the three months ended December 31, 2015, unrealized loss on derivatives for convertible debt were $230,436 compared to $ - for the prior corresponding period. This is primarily due to the value of the stock decreasing to $.0001, requiring a reversal of the gain recorded in the prior quarter.

Cost of debt

For the three months ended December 31, 2015 expenses related to the cost of debt were $13,750 compared to $0 in the prior period. This is due to expenses related to short term notes during the quarter ended December 31, 2015.

Equity purchase agreement fees

There were no equity purchase agreement fees for the three months ended December 31, 2015 or for the prior corresponding period.

Net loss

For the three months ended December 31, 2015, the Company had a net loss of $185,649, as compared to a net loss for the three months ended December 31, 2014 of $3,156,182.

For the nine months ended December 31, 2015 and December 31, 2014

Revenues

The Company generated $9,359 in revenues during the nine months ended December 31, 2015, as compared to $15,061 in revenues for the prior corresponding period. This is due to a decrease in sales.

Total operating expenses

For the nine months ended December 31, 2015, total operating expenses were $324,461, consisting of general and administrative expenses ("SG&A") of $297,392, product advertising costs of $26,628, and amortization expense of $440. For the nine months ended September 30, 2014, total operating expenses were $3,260,880, consisting of $3,070,557 in general and administrative expenses, $45,169 in preproduction costs, $143,848 in product advertising costs, $1,182 in research and development, and $124 in amortization. Operating expenses decreased $2,936,419 primarily due to a decrease in general and administrative, product advertising, preproduction and research and development costs of $2,773,165, $117,220, $45,169 and $1,182 respectively and an increase of $316 in amortizations costs. The reduction is due to an overall decrease in spending and issuing stock for services. 
  

Interest Expense

For the nine months ended December 31, 2015, interest expense was $157,056 as compared to $11,590 in the prior corresponding period. The increase is primarily related to the increased amount of outstanding short-term debt and amortization of related debt issuance costs.

Unrealized loss on derivatives for convertible debt

For the nine months ended December 31, 2015, unrealized gain on derivatives for convertible debt was $0 as well as for the corresponding period. This is because the decrease in stock price resulted in the conversion feature to no longer be beneficial to the company.

Cost of debt

For the three months ended December 31, 2015 expenses related to the cost of debt were $13,750 compared to $0 in the prior period. This is due to expenses related to short term notes during the quarter ended December 31, 2015.

Equity purchase agreement fees

During the second quarter, the Company entered into an Equity Purchase Agreement pursuant to which the Company has the ability and option to sell and issue shares of its common stock to a certain investor in an aggregate amount of up to $3,000,000.

In conjunction with the signing of this agreement, the Company issued 473,784 common shares as partial consideration. The fair value of these shares as of the date of issuance was $75,805 and were charged as fees in conjunction with share purchase agreement on the Company's Statement of Operations. As other partial consideration, the Company issued a $75,000 note payable to the Investor to pay for fees in conjunction with the share purchase agreement and recorded on the Company's Statement of Operations.

Net loss

For the nine months ended December 30, 2015, the Company had a net loss of $640,916 as compared to a net loss of $3,267,619 in the prior corresponding period.

Liquidity and Capital Resources

As of December 31, 2015, the Company had approximately $488 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 a result of the notes issued by the Company within the last several months, the Company has an aggregate of $1.2 million due and payable as short-term debt as of December 31, 2015. These convertible debentures mature throughout 2016.

As of December 31, 2015, the Company and its wholly owned subsidiary FLASR, had outstanding notes payable to Everett Dickson, the Company's sole officer and director, of $71,335. These notes are unsecured, payable upon demand and have no stated interest rate.

Going Concern

As of December 31, 2015, the Company had a total stockholders' deficit of approximately $(1,195,525) million. The ability of the Company to continue as a going concern is dependent on the Company obtaining net sales and 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

In May 2014, Financial Accounting Standards Board ("FASB") issued guidance that introduces a new five-step revenue recognition model in which an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance also requires disclosures sufficient to enable users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative disclosures about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. In April 2015, the FASB decided to delay the effective date for the guidance. The guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period. The Company is currently evaluating the new guidance to determine the impact it will have on its financial statements.

In June 2014, the FASB issued amended guidance on the accounting for certain share-based employee compensation awards. The amended guidance applies to share-based employee compensation awards that include a performance target that affects vesting when the performance target can be achieved after the requisite service period. These targets are to be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award and compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved. The amendments are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. The Company does not expect adoption will have a material impact on its financial statements.

In February 2015, the FASB issued amended guidance on the consolidation of legal entities including limited partnerships and limited liability corporations. The guidance modifies the consolidation models to be analyzed in determining whether a reporting entity should consolidate certain types of legal entities. The guidance must be applied using one of two retrospective application methods and will be effective for fiscal years beginning after December 15, 2015, and for interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period. The Company does not expect adoption will have a material impact on its financial statements. 
  

In April 2015, the FASB issued guidance in order to simplify the presentation of debt issuance costs. The guidance requires that debt issuance costs related to a recognized debt liability be presented as a direct deduction from the carrying amount of the debt liability rather than as a deferred charge asset as required under current guidance. The guidance also requires that the amortization of debt issuance costs be reported as interest expense. The guidance is effective for the Company starting January 1, 2016 and must be applied on a retrospective basis. Early adoption is permitted. The Company has chosen to early adopt this guidance as of the interim period ended March 31, 2015. No retrospective application was deemed necessary, as the Company did not have any debt issuance costs prior to the three and nine months ended December 31, 2015. Approximately $(23,521) of net debt issuance costs have been deducted from the carrying amount of debt as of December 31, 2015. 
  

In June 2015, the FASB issued Accounting Standards Update No. 2015-10: Technical Corrections and Improvements (ASU 2015-10). ASU 2015-10 is part of an initiative to clarify the Accounting Standards Codification (Codification), correct unintended application of guidance, and make minor improvements to the Codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. ASU 2015-10 covers a wide range of topics in the Codification and is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015; early adoption is permitted. The Company is currently evaluating the provisions of this accounting update and assessing the impact, if any, it may have on its financial position and results of operations.

In July 2015, the FASB issued accounting guidance regarding simplifying the measurement of inventory. The new guidance applies only to inventory for which cost is determined by methods other than last-in, first-out and the retail inventory method, which includes inventory that is measured using first-in, first-out or average cost. Inventory within the scope of this standard is required to be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The new standard will be effective for us on January 1, 2017. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

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, 2015, 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, 2015.

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.

From time to time, the Company is a party to various legal proceedings arising in the ordinary course of business. While the Company is unable to predict the outcome of these lawsuits, it believes that the ultimate resolution will not have, either individually or in the aggregate, a material adverse effect on the Company's consolidated financial position, cash flows, or results of operations.

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.

During the nine months ended December 31, 2015, the Company in consideration for services previously rendered, issued an additional 430,000 shares of common stock. Such shares were issued in reliance upon an exemption from registration pursuant to Section 4(2) under the Securities Act of 1933, as amended.

On August 17, 2015, the Company entered into an Equity Purchase Agreement with Premier Venture Partners, LLC, a California Limited Liability Company. In conjunction with the signing of this agreement, the Company issued 473,784 common shares as partial consideration. Such shares were issued in reliance upon an exemption from registration pursuant to Section 4(2) under the Securities Act of 1933, as amended.

On September 18, 2015, the Company amended the Auctus Fund, LLC Note. As consideration for this amendment, the Company issued the Auctus Fund, LLC an additional 30,000 common shares. Such shares were issued in reliance upon an exemption from registration pursuant to Section 4(2) under the Securities Act of 1933, as amended.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not Applicable.

Item 5. Other Information

None. 
  

Item 6. Exhibits.

* Incorporated herein by reference to the indicated filing. 
  

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.

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