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United states

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

(Mark One)

 

[ X ] quarterly report under section 13 0r 15(d) of the securities exchange act of 1934

 

For the quarterly period ended October 31, 2011

 

[    ] transition report under section 13 0r 15(d) of the securities exchange act of 1934

 

For the transition period from to

 

Commission file number 000-52958

 

 

Mobile data corp.
(Exact name of registrant as specified in its charter)

 

Nevada

(State or other jurisdiction of incorporation or organization)

00-0000000

(I.R.S. Employer Identification No.)

 

 

2033 Gateway Place, 5th Floor, San Jose, California

(Address of principal executive offices)

 

95110

(Zip Code)

206-338-2649

(Registrant’s telephone number, including area code)

n/a

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

 

Indicate by check mark whether the registrant (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.

[ X ] 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 preceeding 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, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company in Rule 12b-2 of the Exchange Act.

 

Larger accelerated filer            [     ] Accelerated filer                                                      [     ]

Non-accelerated filer [ ]

(Do not check if a smaller reporting company)

Smaller reporting company                 [ X ]

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

[ X ] 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.

 

Class

 

Outstanding at December 14, 2011
common stock - $0.001 par value 33,516,528

 

part I – financial information

 

Item 1. Financial Statements.

 

 

Mobile data corp.

(A Development Stage Company)

 

 

FINANCIAL STATEMENTS

 

(Unaudited)

 

OctOber 31, 2011

 

 

 

 

 

 

Table of Contents: Index

 

 

Balance Sheets F-1

 

Statements of Operations F-2

 

Statements of Cash Flows F-3

 

Notes to the Financial Statements F-4

 

 

 

 
 

 

MOBILE DATA CORP.

(A Development Stage Company)

BALANCE SHEETS

     
     
  October 31,  July 31,
  2011 2011
  (unaudited)  
 
ASSETS
     
CURRENT    
Cash $          5,104 $             510
Prepaid expenses           11,469           10,275
            16,573           10,785
     
Intellectual property         121,918                     -
    $      138,491 $        10,785
     
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
CURRENT    
Accounts payable and accrued liabilities $        53,333 $        88,803
Promissory notes payable 60,000 -
Due to related parties 20,234 19,304
  133,567 108,107
     
STOCKHOLDERS’ EQUITY
Common stock    
Authorized:    
75,000,000 common shares, $0.001 par value    
Issued and outstanding:    
   33,516,528 common shares (July 31, 2011 – 31,016,528) 31,017 31,017
Obligation to issue shares 125,000 -
Additional paid-in capital 879,648 879,648
Deficit accumulated during the development stage      (1,030,741)         (1,007,987)
              4,924          (97,322)
     
  $      138,491 $        10,785

 

Subsequent event (Note 4)

   
       

 

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

 

 

 

 

 

 

 

 

F-1

 
 

 

MOBILE DATA CORP.

(A Development Stage Company)

STATEMENTS OF OPERATIONS (unaudited)

       
       
      Cumulative from
  Three months Three months July 13, 2005
  ended ended (Inception) to
  October 31, October 31, October 31,
  2011 2010 2011
       
Expenses      
   Amortization of intellectual property $           3,082 $            6,417 $            48,299
   Development costs                5,601             15,739             177,531
   Finance charges                       -                 17,381             400,254
   Mineral property costs                       -                      -               45,358
   Office and other administration expenses               14,071             33,320  327,516
       
Net loss before other items             (22,754)           (72,857)         (998,958)
Other item      
   Impairment of intellectual property                        -      - 31,783
       
Net loss $       (22,754) $        (72,857) $    (1,030,741)
Net loss per share - basic and diluted $           (0.00) $            (0.00) $             (0.01)
         
Weighted average number of shares outstanding - basic and diluted

 

31,016,528

23,940,900   
       

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

F-2

 
 

MOBILE DATA CORP.

(A Development Stage Company)

STATEMENTS OF CASH FLOWS (unaudited)

      Cumulative from
 

Three months

ended

October 31,

Three months

ended October 31,

July 13, 2005 (Inception) to October 31,
  2011 2010 2011
       
Cash Flow From Operating Activities      
Net loss $         (22,754) $         (72,857) $      (1,030,741)
Non-cash items:                                      
Amortization of intellectual property 3,082 6,417 48,299
Foreign exchange                         -    - (8,489)
Financial charges                         -   17,381 400,254
   Impairment of intellectual property                         -   -                31,783
Working capital changes:                                         
Prepaid expenses (1,194) (6,367) (11,469)
Accounts payable and accrued liabilities (35,470)        8,565 53,333
   Due to related parties                     930                         -                  6,914
Net cash used in operations              (55,406)              (46,861)            (510,116)
       
Cash Flow From Investing Activities      
Acquisition of intellectual property -  - (5,000)
Acquisition of mineral property -      - (288,824)
Net cash used in investing activities                         -                        -            (293,824)
       
Cash Flow From Financial Activities      
Advances from related party - - 13,320
Long-term debt, net   - - 218,916
Issuance of capital stock  - - 166,800
Repurchase shares for cancellation - - (1)
Proceeds from promissory notes payable 60,000 55,000 410,009
Net cash provided by financing activities 60,000 55,000 809,044
       
Increase in cash                 4,594                 8,139 5,104
       
Cash, beginning 510 8,759 -
       
Cash, ending $              5,104 $          16,898 $            5,104
       
Supplemental cash flow information      
Cash paid for:      
   Interest $                   - $                   - $                   -
      Income taxes $                   - $                   - $                   -
       
Non-cash item:                                      
Shares issued for mineral property  $                     -  $                     -  $       7,000,000
Shares issued on conversion of debt  $                     -  $                     -  $          355,564
Shares issued for acquisition of intellectual property $         125,000  $                     -  $         197,000

 

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

 

F-3

 
 

MOBILE DATA CORP.

(A Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

October 31, 2011 (unaudited)

 

1. BASIS OF PRESENTATION

 

Unaudited Interim Financial Statements

 

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission. They may not include all information and footnotes required by generally accepted accounting principles for complete financial statements. However, except as disclosed herein, there has been no material changes in the information disclosed in the notes to the financial statements for the year ended July 31, 2011, included in the Company’s Form 10-K filed with the Securities and Exchange Commission. The unaudited interim financial statements should be read in conjunction with those financial statements included in the Form 10-K. In the opinion of Management, all adjustments considered necessary for a fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the three months ended October 31, 2011 are not necessarily indicative of the results that may be expected for the year ending July 31, 2012.

 

 

2. CONVERTIBLE PROMISORY NOTES PAYABLE

 

Balance at July 31, 2011     $                 -
October 5, 2011 convertible promissory note issued            30,000
October 5, 2011 convertible promissory note issued            30,000
Balance at October 31, 2011     $       60,000

 

On October 5, 2011, the Company issued a convertible promissory note with a principal amount of $30,000. The note is unsecured, payable on demand and does not bear any interest. The note, or any part thereof, can be converted to one share of the Company for each $0.03 outstanding in principal. At conversion, the maximum number of shares that will be issued is 1,000,000. There was no beneficial conversion feature resulting from this issuance as the conversion price equalled the market price on the issuance date.

 

On October 5, 2011, the Company issued a convertible promissory note with a principal amount of $30,000. The note is unsecured, payable on demand and does not bear any interest. The note, or any part thereof, can be converted to one share of the Company for each $0.03 outstanding in principal. At conversion, the maximum number of shares that will be issued is 1,000,000. There was no beneficial conversion feature resulting from this issuance as the conversion price equalled the market price on the issuance date.

 

 

 

 

 

 

 

 

 

 

 

 

 

F-4

 
 

MOBILE DATA CORP.

(A Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

October 31, 2011 (unaudited)

 

3. INTELLECTUAL PROPERTY

 

On August 9, 2011, the Company entered into an agreement with Beet Company Ltd. (“BEET”) to acquire the following intellectual property from BEET:

 

a)      All software rights to the LiveJive Broadcaster Software and related intellectual property including any related technology or applications to be developed.

 

b)      Domain name: livejive.com

 

The purchase price consisted of the issuance of 2,500,000 shares of the Company with a market value of $125,000 which has been capitalized and recorded as obligation to issue shares at the period end, and an annual royalty of 20% of gross revenues.

 

The carrying value of intellectual property is amortized over its estimated useful life of three years and $3,082 was expensed for the three months ended October 31, 2011.

 

 

4. SUBSEQUENT EVENT

 

Subsequent to October 31, 2011, the Company issued 2,500,000 shares of its common shares for the purchase of the intellectual property assets from BEET (Note 3).

 

The Company evaluated subsequent events through the date of filing these financial statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

F-5

 
 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation.

 

THE FOLLOWING PRESENTATION OF MANAGEMENT’S DISCUSSION AND ANALYSIS OF Mobile Data Corp. SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION INCLUDED HEREIN.

 

Overview

 

Mobile is a development stage company in the business of acquiring new technologies for development and marketing. Mobile’s focus is to identify and assess new projects for acquisition purposes that are more global in nature and technology-based.

 

Mobile was incorporated in the State of Nevada on July 13, 2005. On January 6, 2010, the company changed its name from “Endeavor Explorations Inc.” to “Mobile Data Corp.”

 

LiveJive Broadcaster Software

 

On August 4, 2011 Mobile Data Corp. entered into a letter agreement with BEET Company Ltd. for the acquisition of the assets of the business of BEET, including all software rights to the LiveJive Broadcaster Software, the domain name livejive.com, intellectual property, equipment, and technology used in and related to the business of BEET, and including any related technology or Facebook applications to be developed (collectively, the “LiveJive Assets”). Included in the LiveJive Assets were all the copyrights, trademarks, patents, designs, know-how, trade secrets, equipment, and contracts that embody in whole or in part the LiveJive Assets. See Exhibit 10.7 – Letter Agreement for more details.

 

After conducting its due diligence on the LiveJive Assets, Mobile entered into an asset purchase agreement dated August 9, 2011 with BEET Company Ltd. for the purchase and sale of the LiveJive Assets. Mobile paid a purchase price of $250,000 to BEET for the LiveJive Assets payable by the issuance and delivery of 2.5 million restricted shares of Mobile in the name of BEET at a deemed price of $0.05 per share and the granting of an annual royalty payment equal to 20% of the gross revenues generated by Mobile in the utilization of the LiveJive Assets in its business. See Exhibit 10.8 – Asset Purchase Agreement for more details.

 

The LiveJive Broadcaster is proprietary software that can be downloaded or authorized for use on various social media platforms, the first design of which is for use on Facebook. Once authorized, the LiveJive Broadcaster allows the user to stream video live, and in real time, directly from their computer through their own Facebook page to an audience that has requested and been given access to it. The application allows for remote real time viewing of an event for any type of purpose, such as a product demonstration, musical exhibition or corporate presentation, etc. The LiveJive Broadcaster is intended to increase user communication capabilities, collect data and create an archive of video information for future use and reference.

 

MDC GPS Technology

 

In October 2009, Mobile acquired from Spidex Technologies all of the right, title and interest in a mobile data technology for Smartphones (the “MDC GPS Technology”), that can run on GPS enabled Smartphones including Blackberry Storm 2, Apple iPhone, Palm Pre, and Google Andriod devices. The MDC GPS Technology is a software application that will run in the background and will collect and transmit location data to a server. Server applications will include location monitoring of vehicles, children and members of social networking groups.

 

The focus of the research and development of the MDC GPS Technology has been on developing a software system whereby a GPS enabled smartphone will send location based information to a server. The server will receive and store this location based information and web applications on the server can be developed to provide various consumer and business web services. Mobile has targeted BlackBerry SmartPhones.

 

 

Mobile has developed its MDC GPS Technology and created MDC-KidTracker based on the MDC GPS Technology. In March 2011, MDC-KidTracker was released and all visitors to Mobile’s website, who registered for the product at www.mdctracker.com/registration.aspx, received the MDC-KidTracker application for a 30-day free evaluation. After the 30-day free evaluation period, the MDC-KidTracker will be available through Mobile’s website, www.mobiledatacorp.com , at a cost of $4.99 per month.

 

The MDC-KidTracker gives parents the ability to know the location of their child’s BlackBerry SmartPhone at any given time, and by extension, the location of that child. Mobile has developed the MDC-KidTracker so that parents have access to critical information data points to help ensure the safety, and have knowledge of the whereabouts, of their children. As administrators of a child’s phone, parents have the ability to access Mobile’s Website and set geographic location parameters within which their child may move without concern, as well as, speed parameters. Should the child go outside of the boundaries or exceed the set speed limit set by the parent, they will automatically be notified that the child’s BlackBerry SmartPhone has moved outside of the set parameters. Such notification will take the form of an instant e-mail alert. Parents can then go to the administration page through mobile’s website to find out the current location as well as direction and speed the child is travelling, if that’s the case.

 

The MDC-Tracker is a software application that tracks the location history of a BlackBerry SmartPhone over programmable specified time frames for business and human asset management reporting and accountability protocols.

 

For the development of the MDC GPS Technology, Mobile agreed to retain Spidex for a period of 12 months and to pay Spidex a monthly consulting fee of $12,000 to provide services to Mobile for the purpose of developing and advancing the MDC GPS Technology to a point where it can be sold commercially. For the fiscal period ended July 31, 2010, $36,000 was paid to Spidex and recorded as development costs. As of April 8, 2010, Mobile cancelled the services with Spidex. Pursuant to the terms of the Asset Purchase Agreement, Mobile is obligated to issue Spidex a license to utilize the intellectual property in the event Mobile terminates the service agreement. The terms of the license agreement is to be negotiated between Mobile and Spidex. As of November 14, 2011, the terms of the license agreement have not been negotiated and Mobile has not yet granted Spidex the license.

 

Finally, pursuant to the terms and conditions of the asset purchase agreement, Spidex will be entitled to a partial royalty or partial payment if Mobile sells its interest in the MDC GPS Technology.

 

Since April 2010, Mobile has retained independent consultants to further develop the Technology.

 

See Exhibit 10.3 – Letter of Intent and Exhibit 10.4 – Asset Purchase Agreement for more details.

 

Plan of Operation

 

Mobile has not had any significant revenues generated from its business operations since inception. Mobile expects that the revenues generated from its business for the next 12 months will not be enough for its required working capital. Until Mobile is able to generate any consistent and significant revenue it may be required to raise additional funds by way of equity or debt financing.

 

At any phase, if Mobile finds that it does not have adequate funds to complete a phase, it may have to suspend its operations and attempt to raise more money so it can proceed with its business operations. If Mobile cannot raise the capital to proceed it may have to suspend operations until it has sufficient capital. Mobile expects to raise the required funds for the next 12 months with equity or debt financing.

 

To become profitable and competitive, Mobile needs to develop and advance the MDC GPS Technology and the LiveJive Assets to a point where they can be sold commercially. To achieve this goal, management has prepared the following phases for its plan of operation for the next 12 months.

 

 

 

Phase 1 - Develop the LiveJive Assets (3 months)

 

The LiveJive Broadcaster requires final software encoding and testing prior to its launch. This requires approximately $20,000 in direct technical costs and will take 60-90 days. The product will first be introduced and made available through Facebook as an application and then the product will be adapted to other social networking sites which will require potential tweaks to the software in order to work seamlessly with additional software platforms.

 

Phase 2 – Implement marketing strategy for LiveJive Assets (3-6 months)

 

In Phase 2, the LiveJive Assets will be marketed and an awareness campaign initiated primarily through Facebook to direct potential users to the application and have them become members of the LiveJive page where archived content will eventually be stored and retrieved. As part of the campaign, users will be asked to use and evaluate the product and provide reviews of the application. As the number of users who join the page and authorize the application increases, Mobile will continue to use the social media site to keep the name in front of them and educate them about different ways to use the application. These users will be integrated into the company’s database and provided with ongoing development efforts and other product offerings as they become available.

 

As part of the social media marketing and awareness campaign, it is anticipated that an expert consultant in the area of social media marketing and public relations will be retained to continually ensure that the plan is carried out and to measure effectiveness. It is anticipated that this will cost approximately $2,000 per month for a minimum of three months.

 

The specifics of the ongoing marketing plan require refining and market segmentation determination. Depending on user feedback and how the application is being utilized, Mobile will determine the most appropriate avenues to further market the product. The revenue model for the application is a possible combination of advertising and purchase after an initial trial period. The product will be available to free use for a specified time frame after which it must be purchased outright. It is expected that free use will be 30 days, after which the user will pay for the product. It is anticipated the cost will be somewhere in the range of $1.99 to $3.99. However, should it be determined that associating a cost to the application is unpopular, the option of pricing it will be reviewed.

 

Advertising revenue is dependent on how many users utilize and view the various video streams, both live and archived. As the Facebook page for LiveJive is a portal to www.livejive.com, Mobile will receive revenue based on industry rates for the number of viewers over a specific period of time, the results of which will be tracked and calculated per well understood practices.

 

Mobile has budgeted approximately $250,000 for this phase and expects it to take six months to complete with completion expected within the first nine months of Mobile’s plan of operation.

 

Phase 3 - Implement marketing strategy for the MDC GPS Technology (6 months)

 

In Phase 3, Mobile plans to (1) hire personnel for sales, marketing and customer service, (2) create a marketing strategy for the MDC GPS Technology and its products, and (3) implement its marketing strategy on its target market.

 

Mobile has budgeted approximately $250,000 for this phase and expects it to take six months to complete with completion expected within the final six months of Mobile’s plan of operation.

 

Risk Factors

 

An investment in Mobile’s common stock involves a number of very significant risks. Prospective investors should refer to all the risk factors disclosed in Mobile’s Form S-1 filed on December 3, 2010.

 

Financial Condition

 

As at October 31, 2011, Mobile had a cash balance of $5,104. Management does not anticipate generating any revenue for the foreseeable future. When additional funds become required, the additional funding will come from equity financing from the sale of Mobile’s common stock or sale of its products. If Mobile is successful in completing an equity financing, existing shareholders will experience dilution of their interest in Mobile. Mobile does not have any financing arranged and Mobile cannot provide investors with any assurance that Mobile will be able to raise sufficient funding from the sale of its common stock or its products. In the absence of such financing or revenue, Mobile’s business will fail.

 

Based on the nature of Mobile’s business, management anticipates incurring operating losses in the foreseeable future. Management bases this expectation, in part, on the fact that very few technology companies in the development stage ultimately develop, market, and successfully sell their products. Mobile’s future financial results are also uncertain due to a number of factors, some of which are outside its control. These factors include, but are not limited to:

 

·       Mobile’s ability to raise additional funding;

·       the competitive market for similar technology and the pricing of such technology;

·       the results of Mobile’s proposed research and development on its technology; and

·       Mobile’s ability to find joint venture partners for the development of its technology

 

Due to Mobile’s lack of operating history and present inability to generate revenues, Mobile’s auditors have stated their opinion that there currently exists a substantial doubt about Mobile’s ability to continue as a going concern. Even if Mobile completes its proposed phases of its plan of operation, and it is successful in developing and marketing the technology, Mobile will have to spend substantial funds on further research and development and marketing before it will know whether is plan of operation will be successful.

 

Liquidity

 

Mobile’s internal sources of liquidity will be loans that may be available to Mobile from management. Management has previously loaned Mobile donated services and rent. Though Mobile has no written arrangements with any of its directors or officers, Mobile expects that the directors or officers will provide Mobile with internal sources of liquidity, if it is required.

 

Also, Mobile’s external sources of liquidity will be private placements for equity conducted outside the United States. During the quarter covered by this quarterly report, Mobile did not complete any definitive arrangements for any external sources of liquidity.

 

Capital Resources

 

As of October 31, 2011, Mobile had total assets of $138,491, consisting of $5,104 in cash, $11,469 in prepaid expenses, and $121,918 in intellectual property, and total current liabilities of $133,567 for a net working capital of $4,924, compared with a net working capital of $(97,322) as of July 31, 2011. The liabilities consisted of $53,333 in accounts payable and accrual liabilities, $60,000 in promissory notes payable, and $20,234 due to related parties.

 

There are no assurances that Mobile will be able to achieve further sales of its common stock or any other form of additional financing. If Mobile is unable to achieve the financing necessary to continue its plan of operations, then Mobile will not be able to continue its exploration programs and its business will fail.

 

Net Cash Used in Operating Activities

 

For the three month period ended October 31, 2011, net cash used in operating activities increased to $55,406 compared with $46,861 for the same three month period in the previous fiscal year.

 

At October 31, 2011, Mobile had cash of $5,104. During the three month period ended October 31, 2011, Mobile used $55,406 in cash for operating activities. This was primarily a result of non-cash items of $3,082 in amortization of intellectual property and the non-cash working capital items of $(1,194) in prepaid expenses, $(35,470) in accounts payable and accrual liabilities, and $930 due to related parties.

 

Net Cash Used in Investing Activities

 

Net cash used by investing activities was $nil for the three month period ended October 31, 2011, as compared with $nil used for the same three month period in the previous fiscal year for the acquisition of the intellectual property.

 

Net Cash Provided By Financing Activities

 

Net cash flows provided by financing activities increased to $60,000 for the three month period ended October 31, 2011 as compared with financing activities of $55,000 for the same three month period in the previous fiscal year, solely as a result of proceeds from promissory notes payable of $60,000, as compared to $55,000 from proceeds from promissory notes payable for the same three month period in the previous fiscal year.

 

Results of Operation for the Period Ended October 31, 2011

 

Mobile has had no operating revenues since its inception on July 13, 2005, through to October 31, 2011. Mobile’s activities have been financed from the proceeds of share subscriptions and from proceeds from promissory notes. From its inception, on July 13, 2005, to October 31, 2011 Mobile has raised a total of $166,800 from private offerings of its common stock and a total of $410,009 from proceeds from promissory notes payable.

 

Mobile has not attained profitable operations and is dependent upon obtaining financing to pursue future acquisitions. For these reasons, there is substantial doubt that Mobile will be able to continue as a going concern. References to the discussion below to fiscal 2011 are to Mobile’s fiscal year ended on July 31, 2011. References to fiscal 2010 are to Mobile’s fiscal year ended July 31, 2010.

 

 

Three months ended

October 31, 2011

$

Three months ended

October 31, 2010

$

Accumulated from July 13, 2005 (Date of Inception) to

October 31, 2011

$

  (unaudited) (unaudited) (Audited)
Revenue
       
Expenses      
       
Amortization of intellectual property 3,082 6,417 48,299
Development costs 5,601 15,739 177,531
Finance charges - 17,381 400,254
Mineral property costs - - 45,358
Office and other administration expenses 14,071 33,320 327,516
Impairment of intellectual property - - 31,783
       
Net Loss (22,754) (72,857) (1,030,741)
       

 

Development Costs

 

Development costs include costs for software development and testing.

 

Finance Charges

 

Finance charges include the beneficial conversion features of $17,381 for the promissory note.

 

Office and Administration Expenses

 

Office and other administration expenses includes office rent and professional expenses, which include legal, accounting and auditing expenses associated with Mobile’s corporate organization, the preparation of Mobile’s financial statements and Mobile’s continuous disclosure filings with the Securities and Exchange Commission.

 

Off-balance Sheet Arrangements

 

Mobile has no off-balance sheet arrangements including arrangements that would affect its liquidity, capital resources, market risk support and credit risk support or other benefits.

 

Material Commitments for Capital Expenditures

 

Mobile had no contingencies or long-term commitments at October 31, 2011.

 

Tabular Disclosure of Contractual Obligations

 

Mobile is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.

 

Overview and Anticipated Expenses

 

Management anticipates spending approximately $520,000 on the research, development, and marketing of the technology in the next 12 months. However, the amount to be spent on the technology will depend on whether Mobile can develop the technology to a point where it is marketable.

 

Management intends to continue to have Mobile’s outside consultant assist in the preparation of its quarterly and annual financial statements and have these financial statements reviewed or audited by its independent auditor. Mobile’s outside consultant is expected to charge Mobile approximately $1,250 to prepare its quarterly financial statements and approximately $1,750 to prepare its annual financial statements. Mobile’s independent auditor is expected to charge approximately $2,500 to review its quarterly financial statements and approximately $12,000 to audit its annual financial statements. In the next 12 months, management anticipates spending approximately $25,000 to pay for Mobile’s accounting and audit requirements.

 

Additionally, management expects to incur legal costs of approximately $4,000 per quarter to support three quarterly 10-Q filings and $4,000 to support one annual 10-K filing. In the next twelve months, management anticipates spending approximately $16,000 for legal costs to pay for three quarterly filings and one annual filing.

 

Forward Looking Statements

 

The information in this quarterly report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements involve risks and uncertainties, including statements regarding Mobile’s capital needs, business strategy and expectations. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential” or “continue”, the negative of such terms or other comparable terminology. Actual events or results may differ materially. In evaluating these statements, you should consider various factors, including the risks outlined from time to time, in other reports Mobile files with the Securities and Exchange Commission. These factors may cause Mobile’s actual results to differ materially from any forward-looking statement. Mobile disclaims any obligation to publicly update these statements, or disclose any difference between its actual results and those reflected in these statements. The information constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

 

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

 

Mobile is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.

 

Item 4. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

Management maintains “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed in Mobile’s Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to management, including Mobile’s Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

 

In connection with the preparation of this quarterly report on Form 10-Q, an evaluation was carried out by management, with the participation of the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of Mobile’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of October 31, 2011.

 

Based on that evaluation, management concluded, as of the end of the period covered by this report, that Mobile’s disclosure controls and procedures were not effective in recording, processing, summarizing, and reporting information required to be disclosed, within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information was not accumulated or communicated to management to allow timely decisions regarding required disclosure, for the reasons listed in the “Management’s Report on Internal Control Over Financial Reporting” in Mobile’s Form 10-K for 2010. The matters involving internal controls and procedures that management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee and lack of a majority of outside directors on Mobile’s board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent with control objectives; (3) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements; and (4) ineffective controls over period end financial disclosure and reporting processes.

 

Changes in Internal Controls over Financial Reporting

 

As of the end of the period covered by this report, there have been no changes in Mobile’s internal controls over financial reporting during the quarter ended October 31, 2011, that materially affected, or are reasonably likely to materially affect, Mobile’s internal control over financial reporting subsequent to the date of management’s last evaluation.

 

Part II – Other Information

 

Item 1. Legal Proceedings.

 

Mobile is not a party to any pending legal proceedings and, to the best of Mobile’s knowledge, none of Mobile’s property or assets are the subject of any pending legal proceedings.

 

Item 1A. Risk Factors.

 

Mobile is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.

 

 

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

 

During the quarter of the fiscal year covered by this report, (i) Mobile did not modify the instruments defining the rights of its shareholders, (ii) no rights of any shareholders were limited or qualified by any other class of securities, and (iii) Mobile did not sell any unregistered equity securities.

 

Item 3. Defaults Upon Senior Securities.

 

During the quarter of the fiscal year covered by this report, no material default has occurred with respect to any indebtedness of Mobile. Also, during this quarter, no material arrearage in the payment of dividends has occurred.

 

Item 4. (Removed and Reserved).

 

Item 5. Other Information.

 

During the quarter of the fiscal year covered by this report, Mobile reported all information that was required to be disclosed in a report on Form 8-K.

 

Mobile has adopted a code of ethics that applies to all its executive officers and employees, including its CEO and CFO. See Exhibit 14 – Code of Ethics for more information. Mobile undertakes to provide any person with a copy of its financial code of ethics free of charge. Please contact Mobile at info@Mobiledatacorp.com to request a copy of Mobile’s code of ethics. Management believes Mobile’s code of ethics is reasonably designed to deter wrongdoing and promote honest and ethical conduct; provide full, fair, accurate, timely and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting of code violations; and provide accountability for adherence to the code.

 

Item 6. Exhibits

 

(a)               Index to and Description of Exhibits

 

All Exhibits required to be filed with the Form 10-Q are included in this quarterly report or incorporated by reference to Mobile’s previous filings with the SEC, which can be found in their entirety at the SEC website at www.sec.gov under SEC File Number 000-52958 and SEC File Number 333-140779.

 

Exhibit Description Status
3.1 Articles of Incorporation of Mobile Data Corp., filed as an Exhibit to Mobile’s Form SB-2 (Registration Statement) on February 16, 2007, and incorporated herein by reference. Filed
3.2 Bylaws of Mobile Data Corp., filed as an Exhibit to Mobile’s Form SB-2 (Registration Statement) on February 16, 2007, and incorporated herein by reference. Filed
3.3 Certificate of Amendment dated January 6, 2010, filed as an Exhibit to Mobile’s Form 8K (Current Report) on January 12, 2010, and incorporated herein by reference. Filed
10.1 Mineral Property Purchase Agreement dated July 28, 2006 between Ainslie Corrigan and Mobile Data Corp., filed as an Exhibit to Mobile’s Form SB-2 (Registration Statement) on February 16, 2007, and incorporated herein by reference. Filed
10.2 Mineral Property Purchase Agreement dated January 18, 2008 between Rod Dubnick and Mobile Data Corp., filed as an Exhibit to Mobile’s Form 8-K (Current Report) on January 24, 2008, and incorporated herein by reference. Filed
10.3 Letter of Intent dated September 29, 2009 between Spidex Technologies and Mobile Data Corp., filed as an Exhibit to Mobile’s Form 8-K (Current Report) on October 2, 2009, and incorporated herein by reference. Filed
10.4 Asset Purchase Agreement dated October 27, 2009 between Mobile Data Corp. and Spidex Technologies, filed as an Exhibit to Mobile’s Form10-K (Annual Report) on November 2, 2009, and incorporated herein by reference. Filed
10.5 Promissory Note dated December 16, 2009 given to Blue Cove Holdings Inc. by Endeavor Explorations Inc., filed as an Exhibit to Mobile’s Form 8K (Current Report) on December 22, 2009, and incorporated herein by reference. Filed
10.6 Promissory Note dated December 16, 2009 given to Tiger Ventures Group, Ltd. by Endeavor Explorations Inc., filed as an Exhibit to Mobile’s Form 8K (Current Report) on December 22, 2009, and incorporated herein by reference. Filed
10.7 Letter Agreement dated August 4, 2011 between Mobile Data Corp. and BEET Company Ltd., filed as an Exhibit to Mobile’s Form 8K (Current Report) on August 15, 2011, and incorporated herein by reference. Filed
10.8 Asset Purchase Agreement dated August 9, 2011 between Mobile Data Corp. and BEET Company Ltd., filed as an Exhibit to Mobile’s Form 8K (Current Report) on August 15, 2011, and incorporated herein by reference. Filed
14 Code of Ethics, filed as an Exhibit to Mobile’s Form 10-Q (Quarterly Report) on March 17, 2008, and incorporated herein by reference. Filed
31 Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Included
32 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Included
101 * Financial statements from the quarterly report on Form 10-Q of Mobile Data Corp. for the quarter ended October 31, 2011, formatted in XBRL:  (ii) the Balance Sheets, (ii) the Statements of Operations; and (iii) the Statements of Cash Flows Included

* In accordance with Rule 406T of Regulation S-T, the XBRL (“eXtensible Business Reporting Language”) related information is furnished and not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections

 
 

 

 

Signatures

 

In accordance with the requirements of the Securities Exchange Act of 1934, Mobile Data Corp. has caused this report to be signed on its behalf by the undersigned duly authorized person.

 

 

Mobile Data Corp.

 

Dated: December 20, 2011

By: /s/ Belkis Jimenez Rivero

Name: Belkis Jimenez Rivero

Title: Director and CEO and CFO

(Principal Executive Officer and

Principal Financial Officer)