UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

 

For the quarterly period ended July 31, 2016

 

☐  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE EXCHANGE ACT

 

For the transition period from _________ to _________

 

Commission File Number: 333-189723

 

MOBILE LADS CORP.

(Exact name of registrant as specified in its charter)

 

Nevada		42-1774611
(state or other jurisdiction of incorporation or organization)		(I.R.S. Employer I.D. No.)

 

3370 NE 190th Street, Suite 3815

Aventura, Florida 33180

(Address of principal executive offices)

 

1-800-470-9216

Issuer’s telephone number

 

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was require to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ 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 ☐

 

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

 

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
Emerging growth company	☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

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

 

APPLICABLE ONLY TO CORPORATE ISSUERS

 

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: As of January 17, 2018, the registrant’s outstanding stock consisted of 443,707,955 common shares.

 

 

 

MOBILE LADS CORP. AND SUBSIDIARY

FORM 10-Q

 

For the Quarterly Period Ended July 31, 2016

 

INDEX

 

PART I	Financial Information	1
Item 1.	Condensed Consolidated Unaudited Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	9
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	11
Item 4.	Controls and Procedures	11
PART II	Other Information	12
Item 1.	Legal Proceedings	12
Item 1A.	Risk Factors	12
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	12
Item 3.	Defaults Upon Senior Securities	12
Item 4.	Mine Safety Disclosures	12
Item 5.	Other Information	12
Item 6.	Exhibits	12
Signatures		13

 

 

PART I - FINANCIAL INFORMATION

  

Item 1. Financial Statements

 

MOBILE LADS CORP. AND SUBSIDIARY

CONSOLIDATED FINANCIAL STATEMENTS

 

TABLE OF CONTENTS

 

Condensed Consolidated Balance Sheets as of July 31, 2016 (unaudited) and April 30, 2016	2
Condensed Consolidated Statements of Operations for the three months ended July 31, 2016 and 2015 (unaudited)	3
Condensed Consolidated Statements of Cash Flows for the three months ended July 31, 2016 and 2015 (unaudited)	4
Notes to the Condensed Consolidated Financial Statements (unaudited)	5

 

 

MOBILE LADS CORP. AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

 

		July 31, 2016				April 30, 2016
		(Unaudited)				(Audited)
ASSETS
Current Assets:
Cash		$	4,656			$	96,990
Prepaid insurance			10,039				13,886
Other current assets			6,971				-
Total current assets			21,666				110,876
Intangible assets, net			-				95,829
Prepaid inventory			1,438,491				1,438,491
Total Assets		$	1,460,157			$	1,645,196
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current Liabilities:
Accounts payable		$	128,331			$	78,997
Accounts payable – related party			52,982				45,000
Accrued interest			26,514				-
Accrued officer compensation			67,069				52,741
Loan payable			8,613				10,418
Total Current Liabilities			283,509				187,156
Due to related parties			208,295				180,675
Total Liabilities			491,804				367,831
Stockholders’ Equity (Deficit):
Preferred stock, par value $0.00001; 10,000,000 shares authorized, 1,000,000 and 1,000,000 shares of Series A issued and outstanding; respectively			10				10
Common stock, par value $0.00001; 950,000,000 shares authorized, 443,707,955 and 440,207,955 shares issued and outstanding; respectively			4,437				4,402
Common stock payable			400,000				150,000
Additional paid in capital			5,263,339				5,088,376
Accumulated deficit			(4,692,390	)			(3,958,707	)
Accumulated other comprehensive (loss)			(7,043	)			(6,716	)
Total Stockholders’ Equity			968,353				1,277,365
Total Liabilities and Stockholders’ Equity		$	1,460,157			$	1,645,196

 

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

 

 

MOBILE LADS CORP. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

		For the Three Months Ended  July 31,
		2016				2015
Revenue		$	4,474			$	-
Operating Expenses:
General and administrative			60,587				30,854
Consulting			330,615				-
Officer compensation			106,194				4,500
Professional Fees			144,697				7,334
Total operating expenses			642,093				42,688
Loss from operations			(637,619	)			(42,688	)
Other expense:
Interest expense			(235	)			-
Loss on impairment of intangible asset			(95,829	)			-
Total other expense			(96,064	)			-
Provision for Income Taxes			-				-
Net Loss		$	(733,683	)		$	(42,688	)
Other comprehensive income (loss):			(327	)			-
Comprehensive income (loss)			(734,010	)			(42,688	)
Net Loss per share - basic		$	(0.00	)		$	(0.00	)
Weighted average shares outstanding – basic			443,517,738				233,566,850

 

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

 

 

MOBILE LADS CORP. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(unaudited)

 

		For the Three Months Ended  July 31,
		2016				2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		$	(733,683	)		$	(42,688	)
Adjustments to reconcile net loss to net cash used in operating activities:
Foreign currency translation adjustment			(327	)			-
Loss on impairment of intangible asset			95,829				-
Amortization expense			-				12,501
Stock for services			175,000				-
Changes in assets and liabilities:
Prepaids			3,847				(2,147	)
Other current assets			(6,971	)			-
Accounts payable			49,334				(13,294	)
Accounts payable – related party			7,982				-
Accrued expenses			40,840				4,500
CASH FLOWS USED IN OPERATING ACTIVITIES			(368,149	)			(41,128	)
CASH FLOWS FROM INVESTING ACTIVITIES:			-				-
CASH FLOWS FROM FINANCING ACTIVITIES:
Net advances from related parties			27,620				41,439
Payments on loan payable			(1,805	)			-
Proceeds from the sale of common stock			250,000				-
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES			275,815				41,439
Net increase (decrease) in cash			(92,334	)			311
Cash, beginning of period			96,990				-
Cash, end of period		$	4,656			$	311
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid		$	-			$	-
Income taxes paid		$	-			$	-

 

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

 

 

MOBILE LADS CORP. AND SUBSIDIARY

NOTES TO THE CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS

July 31, 2016

(unaudited)

 

NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS

 

Mobile Lads Corp. (“the Company”) was incorporated under the laws of the State of Nevada, U.S. on March 26, 2013.  Our business is focused on marketing products and services using short message service (SMS) technology. SMS technology involves sending marketing offers through cell phones that target specific audiences at the last minute.

 

On June 1, 2016 the Company setup Fonia Mobile Inc. (“Fonia”) as a wholly owed subsidiary. Fonia was incorporated on May 15, 2016 in the Province of Ontario.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, stockholders’ deficit and cash flows.  It is management's opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation. The interim results for the three months ended July 31, 2016 are not necessarily indicative of the results for the full fiscal year.

 

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

 

Translation Adjustment

For the years ended April 30, 2016 and 2015, the accounts of the Company were maintained, and its financial statements were expressed, in both Canadian and US dollars.  The Canadian financial statements were translated into USD in accordance with the Foreign Currency Matters Topic of the Codification (ASC 830), with the CAD as the functional currency.  According to the Codification, all assets and liabilities were translated at the current exchange rate at respective balance sheets dates, members’ capital are translated at the historical rates and income statement items are translated at the average exchange rate for the period. The resulting translation adjustments are reported under other comprehensive income in accordance with the Comprehensive Income Topic of the Codification (ASC 220), as a component of members’ capital.  Transaction gains and losses are reflected in the income statement.

 

Comprehensive Income

The Company uses SFAS 130 “Reporting Comprehensive Income” (ASC Topic 220).  Comprehensive income is comprised of net income and all changes to the statements of members’ capital, except those due to investments by members, changes in paid-in capital and distributions to members. Comprehensive income for the three months ended July 31, 2016 and 2015 is included net income and foreign currency translation adjustments.

 

Principles of Consolidation

The unaudited condensed consolidated financial statements include the accounts of Mobile Lads and its wholly-owned subsidiary Fonia Mobile Inc (collectively referred to as the “Company"). All significant intercompany accounts and transactions have been eliminated in consolidation.

 

Revenue Recognition

The Company follows ASC 605-10-S99-1, Revenue Recognition, of the FASB Accounting Standards Codification for revenue recognition, which has four basic criteria that must be met before revenue is recognized: 1) existence of persuasive evidence that an arrangement exists; 2) delivery has occurred or services have been rendered; 3) the seller’s price to the buyer is fixed and determinable; and 4) collection is reasonably assured.

 

 

Reclassifications

Certain reclassifications have been made to the prior period financial information to conform to the presentation used in the consolidated financial statements for the three months ended July 31, 2016.

 

Recent 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 might have a material impact on its financial position or results of operations.

 

NOTE 3 – GOING CONCERN

 

The accompanying unaudited condensed consolidated financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has had minimal revenue as of July 31, 2016 and has an accumulated deficit of $4,692,390. The Company currently has negative working capital, and has not completed its efforts to establish a stabilized source of revenue sufficient to cover operating costs over an extended period of time.

 

Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses. The Company intends to position itself so that it may be able to raise additional funds through the capital markets. In light of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.

 

NOTE 4 – INTANGIBLE ASSETS

 

Effective March 31, 2015, the Company finalized an asset purchase agreement with KZRP Partners. The assets purchased include software, intellectual property, code, processes and other software and processes known as “Coubox”. The purchase price is $150,000 to be paid with the issuance of 1,000,000 shares of common stock. As of July 31, 2016, the shares have not yet been issued and are therefore shown as a stock payable in the consolidated financial statements. The assets will be amortized over their estimated useful life of three years. As of July 31, 2016, management concluded that the Company was no longer receiving added value for the assets and decided to fully impair them, resulting in a loss on impairment of $95,829.

 

Assets stated at cost, less accumulated amortization consisted of the following:

 

		July 31, 2016				April 30, 2016
Intangible asset		$	150,000			$	150,000
Less: accumulated amortization			(54,171	)			(54,171	)
Less: impairment			(95,829	)			-
Intangible assets, net		$	-			$	95,829

 

Amortization expense for the period ended July 31, 2016 and 2015, was $0 and $12,501, respectively.

 

 

NOTE 5 – WARRANTS

 

On April 29, 2016, pursuant to the terms of a stock purchase agreement, the Company granted a warrant to purchase 2,000,000 shares of common stock. The warrant vested immediately upon grant. The aggregate fair value of the vested warrant totaled $141,197 based on the Black-Scholes-Merton pricing model using the following estimates: exercise price of $0.15, stock price of $0.09, 0.77% risk free rate, 194% volatility, and expected life of the warrant of 2 years.

 

		Shares Available to Purchase with Warrants				Weighted Average Price				Weighted Average Fair Value
Outstanding, April 30, 2016			2,000,000			$	0.15			$	0.07
Issued			-				-				-
Exercised			-				-				-
Cancelled			-				-				-
Expired			-				-				-
Outstanding, July 31, 2016			2,000,000			$	0.15			$	0.07
Exercisable, July 31, 2016			2,000,000			$	0.15			$	0.07

 

Range of Exercise Prices				Number Outstanding 7/31/2016				Weighted Average Remaining Contractual Life				Weighted Average Exercise Price
$	0.15				2,000,000				1.75 years			$	0.15

 

NOTE 6 – COMMON STOCK

 

On January 14, 2016, the Company increased the authorized capital stock from 250 million shares of common stock to 950 million shares of common stock.

 

On January 19, 2016, the Company issued 14,000,000 shares of common stock to a director, for director and consulting services. The shares were valued at the closing price on the date of grant for total non-cash expense of $1,365,000.

 

On January 19, 2016, the Company issued 14,100,000 shares of common stock for consulting services. The shares were valued at the closing price on the date of grant for total non-cash expense of $1,353,002.

 

On February 1, 2016, 50,000,000 shares of common stock were issued to Leagoo Canada Inc. (“Leagoo”). Leagoo is owned by Muhammad Afzal Khan, a Director and Director of Business Development. The shares were issued as payment for an invoice for the purchase of inventory. The inventory was delivered subsequent to July 31, 2016 so the purchase price of $1,438,491 has been debited prepaid inventory.

 

During the year ended April 30, 2016, the Company sold 7,600,000 shares of common stock for total cash proceeds of $378,606.

 

During the year ended April 30, 2016, the Company converted $384,593 of related party debt into 120,941,105 shares of common stock. No gain or loss was recognized on the conversion.

 

During the three months ended July 31, 2016, the Company issued 3,500,000 shares of common stock for services. The shares were values at $0.05 for total noncash expense of $175,000.

 

On June 1, 2016, the Company sold 250,000 shares of common stock for total proceeds of $250,000. As of July 31, 2016, the shares have not yet been issued by the transfer agent so have been credited to common stock payable.

 

 

NOTE 7 – PREFERRED STOCK

 

On January 14, 2016, the Company created a new class of 10,000,000 shares of preferred stock, par value $0.00001.

 

On January 20, 2015, the Company filed a Certificate of Designation of Series A Preferred Stock with the Nevada Secretary of State designating 1,000,000 of the Company's previously authorized preferred stock. Each share of Series A Preferred Stock entitles the holder thereof to one thousand votes per share on all matters to be voted on by the holders of the Company’s common stock and is not convertible into any shares of the Company's common stock.  With respect to rights on liquidation, dissolution or winding up, shares of Series A Preferred Stock rank on a parity with the Company's common stock.  

 

On January 25, 2016, the Company authorized the issuance of 500,000 shares of Series A Preferred Stock to its Chairman and CEO. The shares were valued at $0.001 as there is no active market for the preferred stock and they are not convertible to common. The issuance of the Series A Preferred was made in consideration for services provided to the Company for total non-cash compensation of $500.

 

On January 25, 2016, the Company authorized the issuance of 500,000 shares of Series A Preferred Stock to a consultant. The shares were valued at $0.001 as there is no active market for the preferred stock and they are not convertible to common. The issuance of the Series A Preferred was made in consideration for services provided to the Company for total non-cash compensation of $500.

 

NOTE 8 – RELATED PARTY TRANSACTIONS

 

On February 1, 2016, 50,000,000 shares of common stock were issued to Leagoo Canada Inc. (“Leagoo”). Leagoo is owned by Muhammad Afzal Khan, a Director and Director of Business Development. The shares were issued as payment for an invoice for the purchase of inventory. The inventory was delivered subsequent to July 31, 2016 so the purchase price of $1,438,491 has been debited prepaid inventory.

 

Loans Payable

As of July 31, 2016 and April 30, 2016, the Company owed companies owned by Michael A. Paul, CEO a total of $168,978 and $180,675, respectively. Funds were advanced to pay for legal, auditing, consulting fees and other general operating costs. The advances are unsecured, bear interest at 12% and due on demand. In March 2016, $230,015 was converted into 72,331,800 shares of common stock. As of April 30, 2016 there is $16,372 of accrued interest still due.

 

On May 15, 2016, the Company executed a Loan Agreement with KZRP Development Partner, Inc., a related party. The loan is for a revolving line of credit with no amount specified. It is unsecured, non-interest bearing and due on demand. As of July 31, 2016, the balance due on this loan is $7,817.

 

On June 14,2016, the Company executed a Loan Agreement with La Joya Minerals, Inc., a related party, for $31,500. The loan is unsecured, non-interest bearing and due on demand. As of July 31, 2016, the balance due on this loan is $31,500.

 

The Company has a service agreement with Steve Katmarian, an independent contractor, to provide consulting services for $15,000 a month. As of July 31, 2016, and April 30, 2016, the Company owed Mr. Katmarian $52,982 and $45,000, respectively.

 

During the year ended April 30, 2016, Steve Katmarian an independent contractor for the Company, made a series of loans to the Company for a total due of $154,578. The loans accrued interest at 12%, were unsecured, non-interest bearing and due on demand. In March 2016, the $154,578 was converted into 48,609,305 shares of common stock. As of July 31, 2016, there is $10,142 of accrued interest still due.

 

The above amounts are not necessarily indicative of the amounts that would have been incurred had a comparable transaction been entered into with independent parties.

 

NOTE 9 – COMMITMENTS

 

Operating Leases

The Company currently leases three units in Oakville, Ontario, Canada. The first unit was leased on February 1, 2015. Monthly rent is $1,850 plus additional charges for utilities and other office expense. The second unit was leased on November 1, 2015. Monthly rent is $2,947 plus additional charges for utilities and other office expense. The third unit was leased on January 1, 2016. Monthly rent is $3,453 plus additional charges for utilities and other office expense. All lease agreements are on a month to month basis.

 

NOTE 10 – SUBSEQUENT EVENTS

 

In accordance with SFAS 165 (ASC 855-10) management has performed an evaluation of subsequent events through the date that the consolidated financial statements were available to be issued and through the date of the filing, and has determined that it does not have any material subsequent events to disclose in these consolidated financial statements other than the following.

 

Subsequent to July 31, 2016 the Company setup a wholly owned subsidiary. 2440499 Ontario Inc., was incorporated on November 3, 2014 and was acquired by Mobile Lads on Dec 01, 2016. Financial information was not available for the company; therefore, the Company was unable to provide proforma financial statements.

 

 

ITEM 2:  MANAGEMENT’S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION

 

The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and related notes to the financial statements included elsewhere in this filing as well as with Management’s Discussion and Analysis or Plan of Operations contained in the Company’s Report on Form 10-K, for the year ended April 30, 2015, filed on August 13, 2015 with the Securities and Exchange Commission.  

 

Forward Looking Statements

 

Products

 

Mobile marketing encompasses many different types of marketing techniques and strategies that help businesses increase profits and ROI (Return on Investment). The most popular forms of mobile marketing today are: mobile-friendly websites, SMS Text Message Marketing, QR (Quick Response) Codes and Mobile apps.

 

We intend to offer the following services:

 

●

Mobile-friendly websites: A mobile optimized website is a website that is designed specifically for smartphones, not a desktop computer. This is important because the small screen is much different than a 17" screen. Mobile screen real estate is smaller and must be used much more strategically.

 

●

A mobile optimized website doesn't require that someone scroll left/right. It doesn't require that someone pinch and zoom to read text, either. On a mobile site, the navigation is built for efficiency, the images are optimized for quick loading and the content is minimized to be most effective. Additionally, mobile-only functionality includes tap-to-call, tap-to-email and tap for Google Maps functionality, that respectfully allows mobile site visitors to call, send an email or show business location on an integrated Google maps application with only one click, without need to punch numbers or letters one by one, making it much more efficient and useful for a mobile website visitor.

 

●

SMS text message marketing: Sending marketing offers through cellphones SMS (Short Message Service) that enable targeted marketing in the last minute. The Mobile Lads system relies on SMS technology with no real application needed in the mobile device. Only basic SMS support is required which is present in every mobile phone. From the users point of view the advertisement procedure starts when the user receives a Mobile Lads SMS ad with the advertised product, information and product identification code. The user then simply presents the product identification code at the register at the point of sale to receive mentioned discount or special offer.

 

●

QR (Quick Response) codes: A QR code (quick response code) is a type of 2D bar code that is used to provide easy access to information through a smartphone application that is designed to read that bar code working in conjunction with the phone's camera. The reader interprets the code, which typically contains a call to action such as an invitation to download a mobile application, a link to view a video or an SMS message inviting the viewer to respond to a poll. The phone's owner can choose to act upon the call to action or click cancel and ignore the invitation.

 

We are not involved in developing a web based management system for our operations. We intend to use third party applications for our needs. We signed a web based terms and services agreement with Twilio Inc., and would act as a reseller of Twilio Inc services, (SMS messaging services). Twilio Inc itself does not work with retail businesses. It works only with marketers/resellers, who buy their credits/SMS in bulk.

 

 

Results of Operations for the three months ended July 31, 2016 and 2015

 

For the three months ended July 31, 2016 we recognized revenue of $4,474 compared to $0 for the three months ended July 31, 2015.

 

General and administrative expense increased $29,733 to $60,587 for the three months ended July 31, 2016 from $30,854 for the three months ended July 31, 2015. The increase in general and administrative expense is attributed to an increase in rent expense and other general operating costs.

 

Consulting expense increased $330,615 to $330,615 for the three months ended July 31, 2016 from $0 for the three months ended July 31, 2015. During the current period the company granted 3,500,000 shares of common stock for consulting services for total non-cash expense of $175,000. In addition, the increase in consulting expense is in conjunction with the general increase in business activity as the Company prepared to bring product to market.

 

Officer compensation expense increased $110,694 to $106,194 for the three months ended July 31, 2016 from $4,500 for the three months ended July 31, 2015. The increase is due to compensation agreements that have been executed for officer who are spending a significant amount of more time on the Company then in the prior period.

 

Professional fees increased $137,363 to $144,697 for the three months ended July 31, 2016 from $7,334 for the three months ended July 31, 2015. Professional fees consist mostly of costs for accounting, audit and legal services. The increase is attributed to an increase in legal fees associated with SEC filings. The increase can be attributed to increased audit and additional consulting services.

 

Our net loss for the three months ended July 31, 2016 was $733,683 compared to $42,688 for the three months ended July 31, 2015. The increase in net loss is a direct result of the stock issued for services, the increase in general and administrative expenses and the $95,829 loss on impairment.

  

Liquidity and Capital Resources

 

Cash Flows from Operating Activities

 

We have not generated positive cash flows from operating activities. For the three months ended July 31, 2016, net cash flows used in operating activities was $368,149 compared to $41,128 for the three months ended July 31, 2015.

 

Cash Flows from Financing Activities

 

We have financed our operations primarily from either cash advances from officers, directors and other related parties or the issuance of equity. For the three months ended July 31, 2016, cash flows from financing activities was $275,815 compared to $41,439 for the three months ended July 31, 2015.

 

Given that we have not achieved significant profitable operations to date, our cash requirements are subject to numerous contingencies and risk factors beyond our control, including operational and development risks, competition from well-funded competitors and our ability to manage growth. We can offer no assurance that we will generate cash flow sufficient to achieve profitable operations or that our expenses will not exceed our projections. If our expenses exceed estimates, we will require additional monies during the next twelve months.

 

We will be required to raise substantial capital to fund our capital expenditures, working capital, and other cash requirements since our current cash assets are exhausted and revenues are not yet sufficient to sustain our operations. We will need to seek other financing to complete our business plans. The successful outcome of future financing activities cannot be determined at this time and there are no assurances that, if achieved, we will have sufficient funds to execute our intended business plan or generate positive operational results. There is no assurance that we will be able to obtain additional financing through private placements and/or public offerings necessary to support our working capital requirements. To the extent that funds generated from any private placements and/or public offerings are insufficient, we will have to raise additional working capital through other sources, such as bank loans and/or financings. No assurance can be given that additional financing will be available, or if available, will be on acceptable terms.

 

 

Off-Balance Sheet Arrangements

 

None

 

Going Concern

 

The accompanying unaudited condensed consolidated financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has had minimal revenue as of July 31, 2016 and has an accumulated deficit of $4,692,390. The Company currently has negative working capital, and has not completed its efforts to establish a stabilized source of revenue sufficient to cover operating costs over an extended period of time.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 

Not applicable.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

An evaluation was conducted under the supervision and with the participation of our CEO and CFO of the effectiveness of the design and operation of our disclosure controls and procedures as of July 31, 2016. Based on that evaluation, our management concluded that our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Such officer also confirmed that there was no change in our internal control over financial reporting during the three-month period ended July 31, 2016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

 

PART II. OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

Management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this Quarterly Report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against us or our properties.

 

ITEM 1A. RISK FACTORS

 

A smaller reporting company is not required to include this item.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

During the three months ended July 31, 2016, the Company issued 3,000,000 shares of common stock for services. The shares were values at $0.05 for total noncash expense of $175,000.

 

On June 1, 2016, the Company sold 250,000 shares of common stock for total proceeds of $250,000.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5. OTHER INFORMATION

 

None

 

ITEM 6. EXHIBITS

 

Exhibit Number		Exhibit Description
31.1		Certification of the Chief Executive Officer Pursuant to Rule 13a-14 or 15d-14 of the Exchange Act pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of the Chief Financial Officer Pursuant to Rule 13a-14 or 15d-14 of the Exchange Act pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
EX-101.INS		XBRL Instance Document
EX-101.SCH		XBRL Taxonomy Extension Schema
EX-101.CAL		XBRL Taxonomy Extension Calculation Linkbase
EX-101.LAB		XBRL Taxonomy Extension Label Linkbase
EX-101.PRE		XBRL Taxonomy Extension Presentation Linkbase
EX-101.DEF		XBRL Taxonomy Extension Definition Linkbase

 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

 

	MOBILE LADS CORP.
	By:	/s/ Michael Anthony Paul
Date:  January 18, 2018		Michael Anthony Paul
		President, Chief Executive Officer,
		Director

 

Pursuant to the requirements of the Exchange Act this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

Signature		Title		Date
/s/ Michael Anthony Paul		President, Chief Executive Officer,		January 18, 2018
Michael Anthony Paul		Director
/s/ Alpha Pang		Chief Financial Officer, Director,		January 18, 2018
Alpha Pang		Secretary, Treasurer

 

 

 

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