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.