UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

(Mark One)

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 June 30, 2012

 

OR

 

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

 

For the transition period from __________________ to __________________

 

Commission file number: 000-33035

 

VOIS INC.

(Name of registrant as specified in its charter)

 

Florida		95-4855709
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

 

22900 Shaw Road, Suite 111, Sterling, VA		20166
(Address of principal executive offices)		(Zip Code)

 

(571) 287-2380

(Registrant's telephone number, including area code)

 

__________________________________________________________________

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

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ 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.

 

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	þ
(Do not check if smaller reporting company)

 

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

 

Yes ¨ No þ

 

Indicated the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date, 20,406,045 shares of common stock are issued and outstanding as of August 9, 2012.

 

 

VOIS INC.

FORM 10-Q

June 30, 2012

 

TABLE OF CONTENTS

 

			Page No.
PART I. - FINANCIAL INFORMATION
Item 1.	Financial Statements.			3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.			16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.			20
Item 4T.	Controls and Procedures.			20
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings.			21
Item 1A.	Risk Factors.			21
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.			21
Item 3.	Defaults Upon Senior Securities.			21
Item 4.	Submission of Matters to a Vote of Security Holders.			21
Item 5.	Other Information.			21
Item 6.	Exhibits.			22

 

CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION

 

Certain statements in this report contain or may contain forward-looking statements that are subject to known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements were based on various factors and were derived utilizing numerous assumptions and other factors that could cause our actual results to differ materially from those in the forward-looking statements.  These factors include, but are not limited to, our ability to implement our business plan and generate revenues, access to sufficient capital to fund our operations, economic, political and market conditions and fluctuations, government and industry regulation, U.S. and global competition, and other factors.  Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described in connection with any forward-looking statements that may be made herein. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. Readers should carefully review this in its entirety, including but not limited to our financial statements and the notes thereto. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events.

 

OTHER PERTINENT INFORMATION

 

When used in this report, the terms “VOIS”, "we", "our", and "us" refers to VOIS Inc., a Florida corporation, and our subsidiary.  In September 2007 we changed our fiscal year end from December 31 to September 30.  When used in this report, “fiscal 2011” means the year ended September 30, 2011 and "fiscal 2012" means the year ending September 30, 2012.  The information which appears on our website is not part of this report.

 

 

PART I - FINANCIAL INFORMATION

 

ITEM 1.

FINANCIAL STATEMENTS.

VOIS INC.

(A Development Stage Company)

BALANCE SHEETS

 

		June 30, 2012  (Unaudited)				September 30, 2011 (1)
CURRENT ASSETS:
Cash		$	532			$	667
Total Current Assets		$	532			$	667
OTHER ASSETS:
Property and equipment, net of accumulated depreciation of $29,822 and $28,761, respectively			3,757				4,818
Website development costs, net of accumulated amortization of $507,960 and $504,892, respectively			-				2,668
Other Assets			-				6,084
Total Assets		$	4,289			$	14,237
CURRENT LIABILITIES:
Accounts payable and accrued liabilities		$	1,157,333			$	1,073,338
Notes payable			352,516				330,766
Total Liabilities			1,509,849				1,404,104
Stockholders' Deficit
Preferred Stock ($.001 par value; 10,000,000 shares authorized)
Common stock $.001 par value; 1,000,000,000 shares authorized; 20,406,045 shares issued and outstanding and 17,106,045 shares issued and outstanding, respectively)			20,407				17,107
Additional paid in capital			28,201,161				28,171,461
Accumulated deficit			(29,727,1289	)			(29,578,435	)
Total Stockholders' Deficit			(1,505,560	)			(1,389,867	)
Total Liabilities and Stockholders’ Deficit		$	4,289			$	14,237

 

(1) derived from audited financial statements

 

See Notes to Unaudited Financial Statements.

 

 

VOIS INC.

(A Development Stage Company)

STATEMENTS OF OPERATIONS

(Unaudited)

 

		Three month period ended June 30, 2012				Three month period ended June 30, 2011				Nine month period ended June 30, 2012				Nine month period ended June 30, 2011				Cumulative For the Period From May 19, 2000 (Inception) to June 30, 2012
																		(Unaudited)
Revenues		$	—			$	—			$	—			$	—			$	36,139
Operating expenses:
Selling, general and administrative			29,994				105,006				122,164				369,942				25,870,016
Total operating expenses			29,994				105,006				122,164				369,942				25,870,016
Operating loss			(29,994	)			(105,006	)			(122,164	)			(369,942	)			(25,833,877	)
Other (income) expense:
Interest income			—				—				—				—				(4,572	)
Loss on investment in A.D. Parma			—				—				—				—				125,000
Interest expense			8,843				8,860				26,530				26,555				699,038
Interest expense - related party			—				—				—				—				13,391
			8,843				8,860				26,530				26,555				832,857
Loss from continuing operations			(38,837	)			(113,866	)			(148,694	)			(396,497	)			(26,666,735	)
Loss from discontinued operations			—				—				—				—				(3,060,393	)
Net loss		$	(38,837	)		$	(113,866	)		$	(148,694	)		$	(396,497	)		$	(29,727,128	)
Per share data - basic and diluted:
Loss from continuing operations		$	(0.00	)		$	(0.01	)		$	(0.01	)		$	(0.03	)
Loss from discontinued operations			—				—				—				—
Net loss		$	(0.00	)		$	(0.01	)		$	(0.00	)		$	(0.03	)
Basic and diluted weighted average common shares outstanding			20,406,045				17,096,045				18,214,074				15,846,228

 

See Notes to Unaudited Financial Statements.

 

 

VOIS INC.

(A Development Stage Company)

STATEMENTS OF CASH FLOWS

(Unaudited)

 

		Nine Month Period Ended June 30,								Cumulative For the Period From May 19, 2000 (Inception) June 30,
		2012				2011				2012
Cash flows from operating activities:
Net loss		$	(148,694	)		$	(396,497	)		$	(29,727,128	)
Less loss from discontinued operations			—				—				(3,060,394	)
Loss from continuing operations			(148,694	)			(396,497	)			(26,666,734	)
Adjustments to reconcile loss from continuing operations to net cash used by continuing operating activities
Fair value of options granted and shares issued to directors, employees, and consultants			—				—				17,504,299
Fair value of rights issued pursuant to notes payable			—				—				117,112
Fair value of shares issued for services			—				36,750				2,325,838
Loss on extinguishment of debt			—				—				1,711
Amortization of deferred financing costs			—				—				16,693
Loss on investment in A.D. Parma			—				—				125,000
Depreciation			1,061				3,808				29,822
Amortization			—				44,137				504,892
Amortization of deferred compensation			—				—				1,507,138
Changes in operating assets and liabilities
Other asset			8,752				—				10,865
Deferred tax asset			—				—				(77,500	)
Accrued interest			37,685				29,717				249,262
Accrued interest-related party			—				—				5,474
Accounts payable and accrued expenses			68,062				230,135				2,100,579
Deferred tax liability			—				—				77,500
Total adjustments to loss from continuing operations			115,559				344,547				24,498,684
Net cash flows from continuing operating activities			(33,134	)			(51,950	)			(2,168,049	)
Net operational cash flows from discontinued operations			—				—				(2,088,117	)
Net cash provided (used) by operating activities			(33,134	)			(51,950	)			(4,256,166	)
Cash flows used in investing activities:
Investment in A.D. Parma			—				—				(125,000	)
Website development costs			—				—				(507,560	)
Capital expenditures			—				—				(108,477	)
Acquisition and purchases of intangible and other assets			—				—				(8,197	)
Net cash used in investing activities			—				—				(749,234	)
Cash flows from financing activities:
Proceeds from issuance of notes payable			—				—				979,519
Repayment of notes payable			—				—				(438,769	)
Exercise of options			—				—				119,595
Repayment from notes payable- related party			—				—				38,500
Issuance of notes receivable-related party			—				—				(38,500	)
Proceeds from sale of royalty agreement			—				—				50,000
Equipment loans			—				—				(32,481	)
Advance from executive officers			—				—				204,500
Payments of financing costs			—				—				(182,140	)
Proceeds from issuance of shares of common stock			33,000				50,100				4,632,688
Offering costs and fees			—				—				(326,980	)
Net cash provided by financing activities			33,000				50,100				5,005,932
Net increase (decrease) in cash			(135	)			(1,850	)			531
Cash, beginning of period			667				3,469				—
Cash, end of period		$	532			$	1,619			$	531
Supplemental disclosures of cash flow information:
Cash paid for interest			—				—				32,443
Cash paid for taxes			—				—				—
Non-cash investing and financing activities:
Issuance of shares pursuant to conversion of advances from executive officers			—				—			$	204,500
Forfeiture of executive compensation			—				—			$	630,848
Fair value of shares issued to satisfy notes payable and accrued interest			—				—			$	834,231
Deferred financing and offering costs			—				—			$	249,689
Deferred compensation			—				—			$	(274,450	)
Equipment financed			—				—			$	34,120

 

See Notes to the Unaudited Financial Statements

 

 

VOIS Inc.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

June 30, 2012

 

NOTE 1 - PLAN OF ORGANIZATION

 

Organization, Presentation of Financial Statements, Going Concern, and Change in Control

 

VOIS Inc. (the “Company”) was incorporated in the State of Delaware on May 19, 2000 as Medical Records by Net, Inc. On October 17, 2000, its name was changed to Lifelink Online, Inc. In January 2001, its name was changed to MedStrong Corporation and on March 9, 2001 the Company name was changed to MedStrong International Corporation. Finally, on March 30, 2008, the Company’s name was changed to VOIS Inc.

 

Through June 30, 2012, the Company was in the development stage and has not carried any significant operations and has generated minimal revenues. The Company has incurred losses since inception aggregating to $29,727,128.  These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.  The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

 

These matters, among others, raise substantial doubt about the ability of the Company to continue as a going concern. These financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern.

 

Principal Business Activity

 

On January 31, 2007, our Board of Directors approved an agreement to acquire certain assets from Vois Networking, Inc. (a privately held, Florida corporation) controlled by two of our directors and officers. We purchased fixed assets in the form of furniture, fixtures and equipment as well as certain intangible assets.

 

In January, 2010, the Company launched a new portal within its existing website to provide testing and development, and created code and data repositories for both contract and freelance software developers working to build next generation cloud application software.  

 

In January, 2012 we focused our efforts primarily on identifying companies or technologies that would be suitable merger candidates. We are in the final stages of negotiating a merger agreements, however there can be no assurances given that we will successfully conclude a merger transaction. The Company’s offices are located in Sterling, Virginia.

 

Basis of Presentation

 

The Company is currently a development stage enterprise reporting under the provisions of FASB ASC 915-10. The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America.

 

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and such adjustments are of a normal recurring nature.  These financial statements should be read in conjunction with the financial statements for the year ended September 30, 2011 and notes thereto and other pertinent information contained in Form 10-K the Company has filed with the Securities and Exchange Commission (the “Commission”).

 

The results of operations for the three and nine-months ending June 30, 2012 are not necessarily indicative of the results for the full fiscal year ending September 30, 2012.

 

 

VOIS Inc.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

June 30, 2012

 

NOTE 2 - SUMMARY OF CRITICAL AND SIGNIFICANT ACCOUNTING POLICIES

 

Revenue Recognition

 

Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collectability is probable.

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results will differ from those estimates.

 

Cash and Cash Equivalents

 

The Company considers all highly liquid temporary cash investments with an original maturity of three months or less when purchased, to be cash equivalents.

 

Concentrations of Risks

 

The Company is subject to concentrations of credit risk primarily from cash.  At June 30, 2012, the FDIC insured deposits up to $250,000 and provided unlimited coverage for non-interest bearing transaction accounts.  While the Company periodically evaluates the credit quality of the financial institutions in which it holds deposits, it cannot reasonably alleviate the risk associated with the sudden possible failure of such financial institutions.

 

Property and Equipment

 

Property and equipment are stated at cost less accumulated depreciation. When assets are sold or retired, the cost and related accumulated depreciation are eliminated from the accounts, and any resulting gain or loss is reflected in income for the period. The cost of maintenance and repairs are charged to expense as incurred. Significant renewals and replacements, which substantially extend the lives of the assets, are capitalized. Depreciation is provided by the straight-line method over the estimated useful lives of the related assets ranging from 3 to 7 years.

 

Website Development Costs 

 

We account for software development costs in accordance with several accounting pronouncements, including FASB ASC 730, Research and Development, FASB ASC 350-40, Internal-Use Software,FASB ASC 985-20, Costs of Computer Software to be Sold, Leased, or Marketed and FASB ASC 350-50, Website Development Costs. As of June 30, 2012, we had capitalized certain internal use software and website development costs amounting to approximately $507,560. The estimated useful life of costs capitalized is evaluated for each specific project and is currently being amortized over two years.  These costs were fully amortized and expensed as of December 31, 2011.

 

Income Taxes

 

The Company adopted FASB ASC 740, Income Taxes, at its inception. Under FASB ASC 740, the deferred tax provision is determined under the liability method. Under this method, deferred tax assets and liabilities are recognized based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities using presently enacted tax rates.

 

 

VOIS Inc.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

June 30, 2012

 

NOTE 2 - SUMMARY OF CRITICAL AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

Share-based Payment

 

We record share based payments under the provisions of FASB ASC 718, Compensation - Stock Compensation. Under FASB ASC 718, companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation arrangements include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. In March 2005 the SEC issued Staff Accounting Bulletin No. 107, or “SAB 107”. SAB 107 expresses views of the staff regarding the interaction between FASB ASC 718 and certain SEC rules and regulations and provides the staff's views regarding the valuation of share-based payment arrangements for public companies. FASB ASC 718 permitted public companies to adopt its requirements using one of two methods. On April 14, 2005, the SEC adopted a new rule amending the compliance dates for FASB ASC 718. Companies may elect to apply this statement either prospectively, or on a modified version of retrospective application under which financial statements for prior periods are adjusted on a basis consistent with the pro forma disclosures required for those periods under SFAS 123.  Effective with its fiscal 2006 year, the Company adopted the provisions of FASB ASC 718 and related interpretations as provided by SAB 107 prospectively. As such, compensation cost is measured on the date of grant as its fair value.   Such compensation amounts are amortized over the respective vesting periods of the options granted.

 

Earnings Per Share

 

The Company adopted FASB ASC 260, Earnings Per Share. Basic earnings per share is based on the weighted effect of all common shares issued and outstanding and is calculated by dividing net income (loss) available to common stockholders by the weighted average shares outstanding during the period. Diluted earnings per share is calculated by dividing net income available to common stockholders by the weighted average number of common shares used in the basic earnings per share calculation plus the number of common shares, if any, that would be issued assuming conversion of all potentially dilutive securities outstanding. For all periods diluted earnings per share is not presented, as potentially issuable securities are anti-dilutive.

 

The following securities have been excluded from the calculation of diluted earnings (loss) per share, as their effect would be anti-dilutive.

 

		June 30,
		2012				2011
Stock Options			266,667				1,937,346
Warrants			—				—
Rights Issued to Note Holders			7,934				7,934
Total			274,601				1,945,280

 

Advertising Costs

 

The Company expenses advertising costs as incurred. Advertising expense amounted to $0 and $0 during the three and nine-month periods ending June 30, 2012 and 2011, respectively.

 

Recent accounting pronouncements

 

In May 2011, the FASB and International Accounting Standards Board (“IASB”) (collectively the “Boards”) issued ASU No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (“ASU 2011-04”). ASU 2011-04 created a uniform framework for applying fair value measurement principles for companies around the world and clarified existing guidance in US GAAP. ASU 2011-04 is effective for the first reporting annual period beginning after December 15, 2011 and shall be applied prospectively. We do not expect this standard to have any material effect on our consolidated financial statements.

 

In June 2011, the FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220), Presentation of Comprehensive Income. This update is intended to increase the prominence of other comprehensive income in the financial statements by requiring public companies to present comprehensive income either as a single statement detailing the components of net income and total net income, the components of other comprehensive income and total other comprehensive income, and a total for comprehensive income or using a two statement approach including both a statement of income and a statement of comprehensive income. The option to present other comprehensive income in the statement of changes in equity has been eliminated. The amendments in this update, which should be applied retrospectively, are effective for public companies for fiscal years, and interim periods beginning after December 15, 2011. The adoption of this guidance will not have any impact on the Company's condensed consolidated financial statements.

 

During September 2011, the FASB issued Accounting Standards Update (ASU) No. 2011-08, Intangibles – Goodwill and Other (Topic 350): Testing Goodwill for Impairment, ("ASU Update No. 2011-08). ASU Update No. 2011-08 is intended to simplify how entities, both public and nonpublic, test goodwill for impairment. ASU Update No. 2011-08 permits an entity to first assess qualitative factors to determine whether it is "more likely than not" that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in Topic 350, Intangibles - Goodwill and Other. The more-likely-than-not threshold is defined as having a likelihood of more than 50%. ASU Update No. 2011-08 is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted, including for annual and interim goodwill impairment test performed as of a date before September 15, 2011, if an entity's financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made for issuance. The adoption of this guidance will not have any impact on the Company's condensed consolidated financial statements.

 

During November 2011, the FASB issued ASU No. 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities, (ASU Update No.2011-11). ASU Update No. 2011-11, requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. Offsetting, otherwise known as netting, is the presentation of assets and liabilities as a single net amount in the statement of financial position (balance sheet). An entity is required to apply the amendments for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. We will be adopting ASU Update No. 2011-11 during our first quarter of fiscal 2014.

 

Management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying consolidated financial statements.

 

 

VOIS Inc.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

June 30, 2012

 

NOTE 2 - SUMMARY OF CRITICAL AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

In July 2010, the FASB issued an ASU which amended accounting guidance for receivables to require further disaggregated disclosures that improve financial statement users’ understanding of (i) the nature of an entity’s credit risk associated with its financing receivables and (ii) the entity’s assessment of that risk in estimating its allowance for credit losses as well as changes in the allowance and the reasons for those changes. The new and amended disclosures as of the end of a reporting period are effective for interim and annual reporting periods ending on or after December 15, 2010. The Company has adopted this standard with no material effect as the Company determined financing receivables subject to disclosure are immaterial.

 

In December 2010, the FASB issued a new accounting standard that provided guidance on supplementary pro forma information for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. While not impacting the disclosure of pro forma information, the new standard changes the way such information is calculated. Specifically, consolidated revenue and earnings would be determined as if the business combination occurred as of the beginning of the comparable prior annual reporting period. This method is consistent with guidance set forth by the SEC. Additionally, the standard required qualitative disclosures around the nature and amount of material, nonrecurring pro forma adjustments directly attributable to business combinations. The Company has elected to early adopt this standard.

 

NOTE 3 - WEBSITE DEVELOPMENT COSTS

 

Website development costs, net of accumulated amortization are as follows:

 

		June 30, 2012				September 30, 2011
Website development costs		$	507,560			$	507,560
Less: accumulated amortization			(507,560	)			(504,892	)
Website development costs, net		$	-			$	2,668

 

Amortization expense of the website development costs amounted to $2,668 and $38,437 during the nine-month periods ending June 30, 2012 and 2011, respectively.

 

NOTE 4 - PROPERTY AND EQUIPMENT

 

Property and Equipment are comprised of the following:

 

		June 30, 2012				September 30, 2011
Continuing Operations
Computer equipment		$	14,563			$	14,563
Furniture and fixtures			9,388				9,388
Leasehold improvements			5,586				5,586
Equipment			4,042				4,042
			33,578				33,578
Accumulated depreciation			(29,821	)			(28,761	)
Property and equipment, net		$	3,757			$	4,818

 

Depreciation expense of the property and equipment amounted to $1,061 and $3,808 during the nine-month periods ending June 30, 2012 and 2011, respectively.

 

 

VOIS Inc.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

June 30, 2012

 

NOTE 5 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES

 

Accounts payable and accrued expenses as of June 30, 2012 and September 30, 2011 are comprised of the following:

 

		June 30, 2012				September 30, 2011
Trade payables and accrued expenses		$	1,061,334			$	977,338
Accrued compensation and related benefits			96,000				96,000
Total		$	1,157,333			$	1,073,338

  

NOTE 6 - NOTES PAYABLE

 

At June 30, 2012 we owed an aggregate of $145,000 principal amount under the terms of unsecured promissory notes which were due between December 2002 and February 2003, together with accrued but unpaid interest of approximately $207,516. Messrs. Edward Spindel and Michael Spindel elected not to participate with the holders of other promissory notes, including our executive officers, in the exchange of those notes for equity which occurred during January 2008. The outstanding notes due to Messrs. Edward Spindel and Michael Spindel, which were issued at the time they were members of our Board of Directors, remain past due.  See Note 8 – LEGAL PROCEEDINGS.

 

June 30, 2012

 

$145,000 notes payable, bearing 15% interest rate per annum, due as extended, ranging from June 23, 2004 to December 31, 2004. The Company owes $207,516 in accrued interest and penalty at June 30, 2012. The notes payable are unsecured and currently in default.

 

The interest and penalty expenses associated with the aforementioned notes amounted to $21,750 during the nine-month period ending June 30, 2012.

 

The total amount due on the notes payable is as follows:

 

		June 30, 2012
Principal		$	145,000
Interest and Penalty			207,516
Total		$	352,516

 

 

VOIS Inc.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

June 30, 2012

 

NOTE 6 - NOTES PAYABLE (Continued)

 

September 30, 2011

 

$145,000 notes payable, bearing 15% interest rate per annum, due as extended, ranging from June 23, 2004 to December 31, 2004. The Company owed $185,766 in accrued interest and penalty at September 30, 2011. The notes payable are unsecured and currently in default.

 

The total amount due on the notes payable is as follows:

 

		September 30, 2011
Principal		$	145,000
Interest and Penalty			185,766
Total		$	330,766

  

NOTE 7 - CAPITAL STOCK

 

Stock Options

 

We currently have three stock option plans, our 2002 Stock Option Plan, as amended (the "2002 Plan"), our 2007 Equity Compensation Plan (the "2007 Plan") and our 2009 Equity Compensation Plan (the “2009 Plan”).  The purpose of each of these plans is to enable us to offer to our employees, officers, directors and consultants whose past, present and/or potential contributions to our company have been, or will be important to our success, an opportunity to acquire a proprietary interest in our company.  All of these plans are administered by our Board of Directors.

 

2002 Plan

 

The effective date of the 2002 Plan was August 9, 2002 and the maximum number of shares which could be initially issued over the term of the 2002 Plan was 1,000,000 shares.  The 2002 Plan was amended on August 12, 2003 to increase the number of shares available for issuance thereunder to 3,000,000 shares. While the shares underlying outstanding options and the exercise price automatically adjust for all stock splits, the actual number of shares reserved under the 2002 Plan does not adjust.  As of June 30, 2012, options and stock rights covering an aggregate of 225,034 shares of our common stock have been granted (giving effect to the 75:1 stock split in July 2009 and the 1:200 stock split in November, 2010) and 2,774,966 shares remain available for issuance under the 2002 Plan.  At June 30, 2012 we have no outstanding options to purchase shares of our common stock.  The 2002 Plan will terminate on August 8, 2012, unless earlier terminated by our Board of Directors.

 

The 2002 Plan authorizes the grant of:

 

	●	options which qualify as "incentive stock options" ("ISOs") under Section 422(b) of the Internal Revenue Code of 1986, as amended (the "Code");
	●	options which do not qualify as ISOs ("Non-Qualified Options" or "NSOs");
	●	awards of our common stock; and
	●	rights to make direct purchases of our common stock which may be subject to certain restrictions.

 

The stock rights granted under the 2002 Plan will be authorized but unissued shares of our common stock or shares of common stock reacquired by us in any manner.  If any stock rights granted under the 2002 Plan should expire or terminate for any reason without having been exercised in full or shall cease for any reason to be exercisable in whole or in part, the shares of common stock subject to such stock rights will again be available for grants of stock rights under the 2002 Plan.

 

 

VOIS Inc.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

June 30, 2012

 

NOTE 7 - CAPITAL STOCK (Continued)

 

The exercise price per share for each Non-Qualified Option granted, and the purchase price per share of stock granted in any award or authorized as a purchase, cannot be less than the minimum legal consideration required therefore under the laws of any jurisdiction in which we or our successors in interest may be organized. The exercise price per share for each ISO granted cannot be less than the fair market value per share of common stock on the date of such grant.  In the case of an ISO to be granted to an employee owning stock possessing more than 10% of the total combined voting power of all classes of our company, the price per share cannot be less than 110% of the fair market value per share of common stock on the date of grant.

 

Subject to earlier termination, each option will expire on the date specified by the Board of Directors, but not more than 10 years from the date of grant in the case of options generally and five years from the date of grant in the case of ISOs granted to an employee owning stock possessing more than 10% of the total combined voting power of all classes of our stock.  Unless otherwise specified in the agreements relating to such ISOs, if an ISO optionee ceases to be employed by us other than by reason of death, disability, voluntary termination or a breach of his or her employment agreement, no further of his or her ISOs will become exercisable, and his or her ISOs shall terminate on the earlier of 90 days after the date of termination of his or her employment, or their specified expiration dates.  Stock rights granted to members of the Board of Directors will be identical to those granted to other eligible persons.  Members of the Board of Directors who either are eligible to receive grants of stock rights pursuant to the 2002 Plan or have been granted stock rights may vote on any matters affecting the administration of the 2002 Plan or the grant of any stock rights pursuant to the 2002 Plan, except that no such member can act upon the granting to himself or herself.  The shares of common stock which a recipient of an authorization to make a purchase may be subject to specified restrictions, to be determined by the Board, and may include the requirement of continued employment with our company or a subsidiary or achievement of certain performance objectives, among other conditions.  Awards of the common stock may be made to a recipient as a bonus or as additional compensation, as determined by the Board of Directors.

 

2007 Plan

 

On October 3, 2007, our Board of Directors authorized the 2007 Plan covering 1,500,000 shares of common stock.  The 2007 Plan was required to be approved by our shareholders prior to October 3, 2009.  As we did not submit the 2007 Plan to our shareholders for approval prior to that date, incentive stock options may not be awarded under the 2007 Plan and any incentive stock options previously awarded under the 2007 Plan have been converted into non-qualified options upon terms and conditions determined by the Board, as nearly as is reasonably practicable in its sole determination, the terms and conditions of the incentive stock options being so converted.  As of June 30, 2012, options and stock rights covering an aggregate of 600,000 shares of our common stock have been granted and 150,000 shares remain available for issuance under the 2007 Plan.  At June 30, 2012 we have no outstanding options to purchase shares of our common stock. The 2007 Plan will terminate on October 3, 2017, unless earlier terminated by our Board of Directors.

 

In the event of any stock split of our outstanding common stock, the Board of Directors in its discretion may elect to maintain the stated amount of shares reserved under the 2007 Plan without giving effect to such stock split.  Subject to the limitation on the aggregate number of shares issuable under the 2007 Plan, there is no maximum or minimum number of shares as to which a stock grant or plan option may be granted to any person.  Plan options may either be ISOs or NSOs.  In addition, the 2007 Plan allows for the inclusion of a reload option provision, which permits an eligible person to pay the exercise price of the option with shares of common stock owned by the eligible person and receive a new option to purchase shares of common stock equal in number to the tendered shares.  Any ISO granted under the 2007 Plan must provide for an exercise price of not less than 100% of the fair market value of the underlying shares on the date of grant, but the exercise price of any ISO granted to an eligible employee owning more than 10% of our outstanding common stock must not be less than 110% of fair market value on the date of the grant.  The 2007 Plan further provides that with respect to ISOs the aggregate fair market value of the common stock underlying the options which are exercisable by any option holder during any calendar year cannot exceed $100,000.  Any NSO granted under the 2007 Plan must provide for an exercise price of not less than the par value of our common stock.  The term of each plan option and the manner in which it may be exercised is determined by the Board of Directors or the compensation committee, provided that no option may be exercisable more than 10 years after the date of its grant and, in the case of an incentive option granted to an eligible employee owning more than 10% of the common stock, no more than five years after the date of the grant.

 

2009 Plan

 

On April 17, 2009, our Board of Directors authorized the 2009 Plan covering 5,000,000 shares of common stock.  The 2009 Plan was required to be approved by our shareholders prior to April 17, 2010. As we did not submit the 2009 Plan to our shareholders for approval prior to that date, incentive stock options may not be awarded under the 2009 Plan and any incentive stock options previously awarded under the 2009 Plan have been converted into non-qualified options upon terms and conditions determined by the Board, as nearly as is reasonably practicable in its sole determination, the terms and conditions of the incentive stock options being so converted.  Following the adoption of the 2009 Plan our Board granted options to purchase an aggregate of 970,000 shares of our common stock with exercise prices ranging from $0.70 to $1.40 per share.

 

 

VOIS Inc.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

June 30, 2012

 

NOTE 7 - CAPITAL STOCK (Continued)

 

In the event of any stock split of our outstanding common stock, the Board of Directors in its discretion may elect to maintain the stated amount of shares reserved under the 2009 Plan without giving effect to such stock split.  Subject to the limitation on the aggregate number of shares issuable under the 2009 Plan, there is no maximum or minimum number of shares as to which a stock grant or plan option may be granted to any person.  Plan options may either be (i) ISOs, (ii) NSOs (iii) awards of our common stock or (iv) rights to make direct purchases of our common stock which may be subject to certain restrictions.  Any option granted under the 2009 Plan must provide for an exercise price of not less than 100% of the fair market value of the underlying shares on the date of grant, but the exercise price of any ISO granted to an eligible employee owning more than 10% of our outstanding common stock must not be less than 110% of fair market value on the date of the grant.  The 2009 Plan further provides that with respect to ISOs the aggregate fair market value of the common stock underlying the options which are exercisable by any option holder during any calendar year cannot exceed $100,000.  The term of each plan option and the manner in which it may be exercised is determined by the Board of Directors or the compensation committee, provided that no option may be exercisable more than 10 years after the date of its grant and, in the case of an incentive option granted to an eligible employee owning more than 10% of the common stock, no more than five years after the date of the grant.

 

The fair value of the options was based on the Black Scholes Model using the following assumptions:

 

		2012				2011
Exercise price:		$	0.70			$	0.70
Market price at date of grant:		$	0.60			$	0.60
Volatility:			542%-551	%			542%-551	%
Expected dividend rate:			0	%			0	%
Risk-free interest rate:			0.31%-0.34	%			0.31%-0.34	%

 

A summary of the status of the Company’s outstanding stock options as of June 30, 2012 and changes during the period ending on that date is as follows:

 

						Weighted
		Number				Average
		of Options				Exercise Price
Stock options
Balance at beginning of year			266,667			$	0.97
Granted			—				—
Exercised			—				—
Forfeited			—				—
Balance at end of period			266,667			$	0.97
Options exercisable at end of period			266,667			$	0.97
Weighted average fair value of options granted during the year						$	—

 

 

VOIS Inc.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

June 30, 2012

  

NOTE 7 - CAPITAL STOCK (Continued)

 

The following table summarizes information about employee stock options outstanding at June 30, 2012:

 

Options Outstanding

Options Exercisable

Weighted

Number

Average

Weighted

Number

Weighted

Range of

Outstanding at

Remaining

Average

Exercisable at

Average

Exercise

June 30,

Contractual

Exercise

June 30,

Exercise

Price ($)

2012

Life

Price ($)

2012

Price ($)

0.70

150,000

2.65 years

.070

150,000

0.70

1.32

116,667

2.38 years

1.32

116,667

1.32

266,667

266,667

0.97

 

The Company's policy is to issue shares pursuant to the exercise of stock options from its available authorized but unissued shares of common stock. It does not intend to issue shares pursuant to the exercise of stock options from its treasury shares.

 

NOTE 8 - LEGAL PROCEEDINGS

 

On April 30, 2008 we filed a complaint against two former members of our Board of Directors alleging breach of fiduciary duty, waste of corporate assets and unjust enrichment.  The complaint, styled VOIS Inc., Plaintiff, vs. Edward Spindel and Michael Spindel, Defendants, Case No. CA012201XXXXMB, in the Circuit Court for the 15th Judicial District in and for Palm Beach County, Florida,alleges that during 2002 and 2003 while the company, which at that time known as Medstrong International, was under significant financial distress the defendants caused the company to issue demand promissory notes charging excessive and/or usurious interest rates with the knowledge that the company would be unable to repay the notes upon any demand.  The defendants, who are brothers, were members of the Medstrong International Board of Directors until their resignations in April 2006.

 

The complaint further alleges that the defendants engaged in a repeated systematic scheme to defraud our company by continuing to restructure the promissory notes while they were members of the prior Board of Directors at such excessive and usurious interest rates that the defendants violated their fiduciary duties and responsibilities and approved debt obligations that benefited them and not the company and that their wrongful actions and omissions resulted in their unjust enrichment.  We sought damages in excess of $968,000.

 

On June 18, 2009, the defendants removed the lawsuit from Palm Beach Circuit Court (State) to the United States District Court for the Southern District of Florida (Federal).  Thereafter, the defendants sought to have the case transferred to the United States District Court in New York.  On October 27, 2009, the judge denied the defendant’s Motion to Transfer.  On October 28, 2009 the defendants filed their Answer and Defenses to the Complaint.  The defendants did not file a counterclaim at that time.  On November 12, 2009, the Court entered a Scheduling Order and a Notice of Trial for December 2009.  On December 4, 2009, the Court selected a mediator.  In February 2010, the defendants changed law firms and sought leave from the Court to file a counterclaim.  At that time, the defendants also served discovery in the form of interrogatories, request for production and request for admission.  The defendant’s counterclaim was filed on February 17, 2010 and we filed our Answer on March 13, 2010.  Over the course of the next several months we responded to the discovery requests.

 

 

VOIS Inc.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

June 30, 2012

 

NOTE 8 - LEGAL PROCEEDINGS (Continued)

 

On November 13, 2009, the parties attended a pretrial hearing to address legal issues related to our complaint and the defendants’ counterclaim.  Based upon questions posed by the Court and the argument of counsel, the Court struck the defense of usury and additionally dismissed our complaint without prejudice, providing us 10 days to file an amended complaint.  The defendants were also provided 10 days to file an Amended counterclaim.  Based upon the rulings, the matter was then removed from the Court’s December 2009 trial docket.  We have decided that it is not cost effective or beneficial to pursue our affirmative claims in this matter and have, accordingly, elected not to file an amended complaint.

 

On July 19, 2010, the counter–plaintiffs, Edward and Michael Spindel filed a motion for summary judgment.  Vois Inc. filed a response in opposition on August 5, 2010.  The Spindels filed a reply on September 9, 2010. The court held a hearing on September 16, 2010 and at the hearing granted summary judgment in favor of the Spindels.  Final judgment was ordered on November 16, 2010 in the amount of $287,266 plus post judgment interest.   Attorney’s fees of $172,304 were also awarded.  On December 6, 2010 we filed an appeal to the judgment. On July 13, 2011 the United States Court of Appeals for the Eleventh Circuit issued an opinion in favor of VOIS Inc.  This Opinion was made final when the Court issued its mandate on August 15th, 2011. This ruling effectively reversed the Summary Judgment previously granted to the Spindels by the District Court on November 4, 2010 in the amount of $287,266.

 

The outstanding notes due to the defendants in the aggregate amount of $145,000, which are unsecured and were issued at the time they were members of our Board of Directors, remain past due.  The defendants elected not to participate with the holders of other promissory notes, including our then executive officers, in the exchange of those notes for equity which occurred during January 2009.  At June 30, 2012 our liabilities as reported in our financial statements contained elsewhere in this report reflect the principal amount of the notes together with $200,266 in accrued interest and penalties.

 

We were a defendant in two actions, each entitled 951 Yamato Acquisition Company, LLC versus VOIS Inc. both as filed in December 2009 the Circuit Court of the 15th Judicial Circuit in and for Palm Beach County, Florida under case numbers 502010CA040121XXXXMB and 502010CC19027XXXXBBRS, which are related to the lease agreements for our former office space.  A combined summary judgment was entered in April, 2010 against VOIS in the amount of $106,231.  At June 30, 2012 our liabilities as reported in our financial statements contained elsewhere in this report reflect the principal amount of the judgment together with $12,748 in accrued interest.

 

NOTE 9 - SUBSEQUENT EVENTS

 

Other than disclosures shown, management did not identify any events or transactions that should be recognized or disclosed in the accompanying financial statements.

 

 

ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 

We are a social commerce website where people can easily find and do business with buyers and sellers of on-demand work or manufacturing around the world. We make doing business simple, using our online social networking platform. This innovative platform works to liberate individuals and businesses by allowing work and manufacturing opportunities to become globally borderless. With VOIS, business can be done anywhere, anytime removing other boundaries such as location, socio-economic status, pedigree, race, age, gender or qualification.

 

We are a development stage company.  During fiscal 2008 and continuing through fiscal 2011 we completed certain technology milestones which were necessary to the full launch of our business, including our new User Interface Design, Usability Testing and Site Evaluation. We believe that designing an effective User Interface Design, which determines how easily users can complete their tasks and accomplish their goals, is critical to product success. Usability Testing puts a prototype or application in the hands of potential users in order to gain their direct feedback on how a design can be improved and Site Evaluation identifies where a site succeeds and how it can be improved. In December 2009, as a result of these efforts, we soft launched the new social sourcing version of VOIS launch of the Alpha version of the website was launched in February 2010.  We are incorporating a “freemium” component in our revenue model.  "Freemium" is a term used to describe a free version supported by a paid premium version.  This model uses free as a form of marketing to put the product in the hands of the maximum number of people, converting just a small fraction to paying customers. We are currently utilizing the freemium services as a way to build our user base while the Alpha version of the website is active.

 

We plan to also generate revenue by offering a limited number of virtual credits to members for free to represent sponsors or special occasions as well as online advertising. Just for joining each member is given a free set of credits to introduce the member to the credit system. Following that, the member will receive loyalty credits for each day the member logs into VOIS.  We intend to generate revenue by introducing a credit-based purchasing model whereby members buy virtual credits to be applied towards the purchase of various services including but not limited to:

 

●	Match-maker fees
●	Sponsored listings
●	Sponsored bidding
●	Virtual gifts
●	Icons
●	Additional bids
●	Additional posts
●	Additional categories

 

Credits may be purchased individually or in multiples. Larger credit purchases provide members with discounts. Credits may contain different values and express different levels of significance. Members may choose between these credit amounts in the credit purchasing interface. Because our business model is essentially a decentralized system with a centralized host, we have been able to maximize our available resources. We currently operate with a small staff in Sterling, Virginia and outsource as much as possible to third parties. We direct and manage our product development and maintenance internally, while our outsourced team provides creative, website development, maintenance and hosting services as well as customer service.  As a result of our strategies, we anticipate our operating costs will remain relatively stable for the foreseeable future.

 

In order to accomplish the foregoing, we will need to implement an effective marketing program designed to build brand awareness and expand our membership base and we will need to raise additional capital to fund these costs.  Initially, it was our intent to raise between $3 million and $5 million of additional capital through a private placement and utilize the proceeds of this offering to undertake a comprehensive marketing program.  However, like many small, early stage companies, during fiscal 2010 and 2011 we encountered difficulties in our efforts to raise capital.  As an alternative, we have chosen to complete the development of our website with the strategy of undertaking a private placement during fiscal 2012 when the capital markets might be more receptive to our company.

 

We do not have any firm commitments to provide capital. Accordingly, we cannot assure you that additional working capital will be available to us upon terms acceptable to us. If we do not raise funds as needed, our ability to market our company will be limited and we may never be able to achieve profitable operations. In that event, our ability to continue as a going concern is in jeopardy and you could lose all of your investment in our company.

 

 

Going Concern

 

We have generated minimal revenues since inception. Our revenues alone are insufficient to pay our operating expenses and our ability to continue as a going concern is dependent upon our ability to obtain the necessary financing to meet our obligations and repay our current and future liabilities when they become due until such time, if ever, that we are able to generate sufficient revenues to attain profitable operations. We have experienced losses and negative cash flows from operations since inception and at June 30, 2012 we had a working capital deficit of $1,509,318 and an accumulated deficit of $29,727,128.  The report of our independent registered public accounting firm on our financial statements for fiscal 2011 contained an explanatory paragraph regarding our ability to continue as a going concern. There can be no assurance that acceptable financing to fund our ongoing operations can be obtained on suitable terms, if at all. If we are unable to obtain the financing necessary to support our operations, we may be unable to continue as a going concern. In that event, we may be forced to cease operations and our stockholders could lose their entire investment in our company.

 

Results of Operations

 

Nine month period ended June 30, 2012

 

During the nine months ended June 30, 2012 and for the prior fiscal year we had no revenue.

 

General and administrative expense. For the nine months ended June 30, 2012, general and administrative expenses were $122,164 as compared to $369,942 for the nine months ended June 30, 2011, a decrease of $247,778. For the nine months ended June 30, 2012 and 2011 general and administrative expenses consisted of the following:

 

		Fiscal Q2				Fiscal Q2
		2012				2011
Consulting			86,000				90,290
Employee compensation			—				132,750
Professional fees			25,130				88,517
Product development			—				9,617
Depreciation and amortization			3,729				47,945
Other			7,305				823
		$	122,164			$	369,942

 

	●	For the nine months ended June 30, 2012, Consulting expense decreased to $86,000 as compared to $90,290, as a result of decreased business development efforts versus the prior year.
	●	For the nine months ended June 30, 2012, salaries and related expenses decreased to $0 as compared to $132,750.  Employee compensation is lower due to the officers of the company not receiving compensation during the current fiscal year.
	●	For the nine months ended June 30, 2012, Professional fee expense decreased to $25,130 as compared to $88,517.  Professional fee expense decreased primarily due to decreased legal fees from on-going litigation, as compared to the prior year.
	●	For the nine months ended June 30, 2012, Product development expense amounted to $0 as compared to $9,617 for the nine months ended June 30, 2011.  We have discontinued our product development efforts pending receiving funding.
	●	For the nine months ended June 30, 2012, Other expense amounted to $7,305 as compared to $823 for the nine months ended June 30, 2011.  The increase is due to the write off of certain assets in the current fiscal year.

 

 

Three Month Period ended June 30, 2012

 

During the three months ended June 30, 2012 and for the prior fiscal year we had no revenue.

 

General and administrative expense. For the three months ended June 30, 2012, general and administrative expenses were $42,793 as compared to$84,518 for the three months ended June 30, 2011, a decrease of $41,725. For the three months ended June 30, 2012 and 2011 general and administrative expenses consisted of the following:

 

		Fiscal Q2				Fiscal Q2
		2012				2011
Consulting		$	20,000			$	48,000
Professional fees			8,808				50,250
Depreciation and amortization			353				6,756
Other			833				—
		$	29,994			$	105,006

 

	●	For the three months ended June 30, 2012, Consulting expense decreased to $20,000 as compared to $48,000, a decrease of $48,000, or 58.3% for the three months ended June 30, 2011.
	●	For the three months ended June 30, 2012, Professional fee expense decreased to $8,808 as compared to $50,250.  Professional fee expense decreased primarily due to decreased legal fees from on-going litigation as compared to the prior year.
	●	For the three months ended June 30, 2012, Depreciation and amortization expense amounted to $354 as compared to $6,756 for the three months ended June 30, 2011.  The decrease is primarily due to the fact that website development costs were fully amortized during the fiscal first quarter of 2012.
	●	For the three months ended June 30, 2012, Other expense amounted to $833 as compared to $0 for the three months ended June 30, 2011.

 

If our operations remain at the same level, we anticipate that our general and administrative expenses will remain constant during the balance of fiscal 2012, excluding the stock based compensation expense.  We will continue our business development and marketing efforts.  Our ability to significantly implement our marketing program is dependent on our ability to raise sufficient capital to fund the costs.

 

 

Liquidity and Capital Resources

 

Liquidity is the ability of a company to generate adequate amounts of cash to meet its needs for cash.  The following table provides certain selected balance sheet comparisons between June 30, 2012 (unaudited) and September 30, 2011:

 

		June 30,				September 30,				$				%
		2012				2011				Change				Change
Working Capital		$	(1,509,318	)		$	(1,403,437	)		$	(105,881	)			7.5	%
Cash			532				667				135				(20.2	)%
Total current assets			532				667				135				(20.2	)%
Total assets			3,757				14,237				(9,948	)			(69.9	)%
Accounts payable and accrued liabilities			1,157,333				1,073,338				83,996				7.8	%
Notes payable and accrued interest			352,516				330,766				21,750				6.6	%
Total current liabilities			1,509,849				1,404,104				105,746				7.5	%
Total liabilities			1,509,849				1,404,104				105,746				7.5	%
Accumulated deficit			(29,727,128	)			(29,578,434	)			(148,694	)			0.5	%
Stockholders’ deficit			(1,505,560	)			(1,389,867	)			(115,693	)			8.3	%

 

At June 30, 2012 our working capital decreased as compared to September 30, 2011 primarily as a result of an increase in accrued interest payable and other accrued liabilities.

 

Operating activities

 

Net cash used in continuing operating activities for the nine months ended June 30, 2012 was $33,135 as compared to cash used in operations of $51,950 for the nine months ended June 30, 2011.  For the nine months ended June 30, 2012 we had a net loss of $148,694 offset by non-cash items totaling $115,559 contributing to the net cash provided from continuing operating activities for the nine months ended June 30, 2012 which included:

 

	●	$21,750 of accrued interest on notes payable,
	●	$1,061 of depreciation and amortization
	●	$8,752 in write-offs of other assets

 

In addition, we had an increase in our accounts payable and accrued expenses for the nine months ended June 30, 2012 of $83,997.

 

For the nine months ended June 30, 2011 we had a net loss of $396,497 offset by non-cash items totaling $344,547 contributing to the net cash used in continuing operating activities for the nine months ended June 30, 2011 which included:

 

	·	$36,750 related to the expense associated with the issuance of restricted stock to consultants for services,
	·	$44,137 of depreciation and amortization.

 

In addition, we had an increase in our accounts payable and accrued expenses during the quarter of $230,135.

 

 

Investing activities

 

Net cash used in investing activities for the nine months ended June 30, 2012 and 2011 was $0.

 

Financing activities

 

Net cash provided by financing activities was $33,000 for the nine months ended June 30, 2012 as compared to $50,100 for the nine months ended June 30, 2011.  During the fiscal 2012 period we generated cash from the sale of our securities of $33,000. During the fiscal 2011 period we generated cash from the sale of our securities of $50,100.

 

Critical Accounting Policies

 

Web site Development Costs

 

We capitalized certain internal use software and Web site development costs. We use judgment in estimating the useful life of the costs capitalized for each specific project which is two years.

 

Share-Based Payments

 

In December 2004, the FASB issued ASC Topic 718, “Compensation – Stock Compensation (Formerly SFAS No. 123 (R), “Share-Based Payments," which replaces SFAS No. 123 and supersedes APB Opinion No. 25. Under ASC Topic 718, companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation arrangements include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. In March 2005 the SEC issued SAB 107. SAB 107 expresses views of the staff regarding the interaction between SFAS ASC Topic 718 and certain SEC rules and regulations and provides the staff's views regarding the valuation of share-based payment arrangements for public companies. ASC Topic 718 permits public companies to adopt its requirements using one of two methods. On April 14, 2005, the SEC adopted a new rule amending the compliance dates for ASC Topic 718. Companies may elect to apply this statement either prospectively, or on a modified version of retrospective application under which financial statements for prior periods are adjusted on a basis consistent with the pro forma disclosures required for those periods under ASC Topic 718. Effective with our fiscal 2006, we adopted the provisions of ASC Topic 718 and related interpretations as provided by SAB 107 prospectively. As such, compensation cost is measured on the date of grant as its fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant.

 

Recent accounting pronouncements

 

In May 2011, the FASB and International Accounting Standards Board (“IASB”) (collectively the “Boards”) issued ASU No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (“ASU 2011-04”). ASU 2011-04 created a uniform framework for applying fair value measurement principles for companies around the world and clarified existing guidance in US GAAP. ASU 2011-04 is effective for the first reporting annual period beginning after December 15, 2011 and shall be applied prospectively. We do not expect this standard to have any material effect on our consolidated financial statements.

 

In June 2011, the FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220), Presentation of Comprehensive Income. This update is intended to increase the prominence of other comprehensive income in the financial statements by requiring public companies to present comprehensive income either as a single statement detailing the components of net income and total net income, the components of other comprehensive income and total other comprehensive income, and a total for comprehensive income or using a two statement approach including both a statement of income and a statement of comprehensive income. The option to present other comprehensive income in the statement of changes in equity has been eliminated. The amendments in this update, which should be applied retrospectively, are effective for public companies for fiscal years, and interim periods beginning after December 15, 2011. The adoption of this guidance will not have any impact on the Company's condensed consolidated financial statements.

 

During September 2011, the FASB issued Accounting Standards Update (ASU) No. 2011-08, Intangibles – Goodwill and Other (Topic 350): Testing Goodwill for Impairment, ("ASU Update No. 2011-08). ASU Update No. 2011-08 is intended to simplify how entities, both public and nonpublic, test goodwill for impairment. ASU Update No. 2011-08 permits an entity to first assess qualitative factors to determine whether it is "more likely than not" that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in Topic 350, Intangibles - Goodwill and Other. The more-likely-than-not threshold is defined as having a likelihood of more than 50%. ASU Update No. 2011-08 is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted, including for annual and interim goodwill impairment test performed as of a date before September 15, 2011, if an entity's financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made for issuance. The adoption of this guidance will not have any impact on the Company's condensed consolidated financial statements.

 

During November 2011, the FASB issued ASU No. 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities, (ASU Update No.2011-11). ASU Update No. 2011-11, requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. Offsetting, otherwise known as netting, is the presentation of assets and liabilities as a single net amount in the statement of financial position (balance sheet). An entity is required to apply the amendments for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods.

 

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.

 

Not applicable to a smaller reporting company.

 

ITEM 4T.

CONTROLS AND PROCEDURES.

 

Evaluation of disclosure controls and procedures. Our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) have evaluated the effectiveness of our disclosure controls and procedures (as defined in the Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by the Quarterly Report (the “evaluation date’). They have concluded that, as of the evaluation date, these disclosure controls and procedures were effective to ensure that material information relating to us and our consolidated subsidiaries would be made known to them by others within those entities and would be disclosed on a timely basis.

 

Changes in internal control over financial reporting. There were no changes to internal controls over financial reporting that occurred during the three months ended June 30, 2012, that have materially affected, or are reasonably likely to materially impact, our internal controls over financial reporting.

 

 

PART II. OTHER INFORMATION

 

ITEM 1.

LEGAL PROCEEDINGS.

 

None.

 

ITEM 1A.

RISK FACTORS.

 

Not applicable for a smaller reporting company.

 

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

 

None.

 

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES.

 

None.

 

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

 

None.

 

ITEM 5.

OTHER INFORMATION.

 

None.

 

 

ITEM 6.

EXHIBITS.

 

Exhibit No.		Description
31.1		Rule 13a-14(a)/15d-14(a) certification of Chief Executive Officer, principal executive officer
31.2		Rule 13a-14(a)/15d-14(a) certification of Chief Financial Officer, principal financial and accounting officer
32.1		Section 1350 certification of Chief Executive Officer, principal executive officer
32.2		Section 1350 certification of Chief Financial Officer, principal financial and accounting officer

 

EX-101.INS		XBRL Instance Document
EX-101.SCH		XBRL Taxonomy Extension Schema
EX-101.CAL		XBRL Taxonomy Extension Calculation Linkbase
EX-101.DEF		XBRL Taxonomy Extension Definition Linkbase
EX-101.LAB		XBRL Taxonomy Extension Label Linkbase
EX-101.PRE		XBRL Taxonomy Extension Presentation Linkbase

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

	VOIS INC.
August 9, 2012	By:	/s/ Mark B. Lucky
		Mark B. Lucky
		CEO, President, principal executive officer