UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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 [X] No [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] 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 (Check one):

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 59,740,000 shares of common stock as of August 1, 2012.

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Mister Goody, Inc.

Table of Contents

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PART I – FINANCIAL INFORMATION

Forward-Looking Information

This report on Form 10-Q contains forward-looking statements. Forward-looking statements involve risks and uncertainties, such as statements about our plans, objectives, expectations, assumptions or future events. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “we believe,” “we intend,” “may,” “should,” “will,” “could” and similar expressions denoting uncertainty or an action that may, will or is expected to occur in the future. These statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from any future results, performances or achievements expressed or implied by the forward-looking statements.

Examples of forward-looking statements include:

· the timing of the development of future products;

· projections of costs, revenue, earnings, capital structure and other financial items;

· statements of our plans and objectives;

· statements regarding the capabilities of our business operations;

· statements of expected future economic performance;

· statements regarding competition in our market; and

· assumptions underlying statements regarding us or our business.

The ultimate correctness of these forward-looking statements depends upon a number of known and unknown risks and events. We discuss our known material risks under “Risk Factors” contained in the Company’s Registration Statement on Form S-1. Many factors could cause our actual results to differ materially from the forward-looking statements. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

The forward-looking statements speak only as of the date on which they are made, and, except as required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.

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Mister Goody, Inc.

Consolidated Balance Sheets

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

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Mister Goody, Inc.

Consolidated Statements of Operations

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

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Mister Goody, Inc.

Statements of Consolidated Cash Flows

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

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Note 1:  Organization and Basis of Presentation

Mister Goody, Inc. (“the Company”) was incorporated on March 1, 2011 in the State of Florida.  The Company’s wholly-owned subsidiaries consist of Mister Goody Deals, LLC and Mister Goody Freelancers, LLC.

Mister Goody provides businesses with access to independent freelancers who provide a wide array of creative, marketing and technology services, at fixed rates. The independent freelancers specialize in social media marketing, search engine optimization, Internet marketing, content creation, website development and public relations among other services. This on-demand workforce allows businesses to have services completed when they are needed, saving time and money. Mister Goody retains a fee for each successful transaction between client and freelancer.

Basis of presentation

The accompanying unaudited condensed consolidated financial statements have been prepared by management in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting only of normal and recurring adjustments considered necessary for a fair statement, have been included. The reported results of operations are not necessarily indicative of the results that may be expected for the full year. These condensed consolidated financial statements should be read in conjunction with the audited financial statements and accompanying notes for year ended March 31, 2012.

Note 2:  Going Concern

The accompanying condensed financial statements have been prepared assuming the Company will continue as a going concern.  The Company has incurred losses, has had negative operating cash flows since inception, and has had minimal revenues.  The future of the Company is dependent upon future profitable operations and the development of the business plan.  Management expects to need to raise additional funds via equity offerings; however, no assurances can be given that we will obtain access to capital markets in the future or that adequate financing to satisfy the cash requirements of implementing our business strategies will be available on acceptable terms.   

These conditions raise substantial doubt about the Company's ability to continue as a going concern. These consolidated financial statements do not include any adjustments that might arise from this uncertainty.

Note 3:  Summary of Significant Accounting Policies

Use of Estimates

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

Cash and Cash Equivalents

The Company considers all highly liquid investments with maturities from date of purchase of three months or less to be cash equivalents. Cash consists of deposit with domestic banks which are insured by the Federal Deposit Insurance Corporation (FDIC). Special insurance coverage applies to deposits maintained in non-interest bearing transaction accounts beginning December 31, 2010 and ending December 31, 2012. Under such special coverage, balances maintained in non-interest bearing transaction accounts are insured in full by the FDIC.

Revenue Recognition

The Company recognizes revenue from its services when it is probable that the economic benefits associated with the transactions will flow to the Company and the amount of revenue can be measured reliably. This is normally demonstrated when: (i) persuasive evidence of an arrangement exists; (ii) the fee is fixed or determinable; (iii) performance of service has been delivered; and (iv) collection is reasonably assured.

Net Loss per Share

Basic net loss per share is computed using the weighted average number of common shares outstanding during the period. As the Company is in a net loss position, there are no outstanding potentially dilutive securities that would cause diluted earnings per share to differ from basic earnings per share.

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Income Taxes

The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the condensed consolidated financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company has established a valuation allowance for all deferred tax assets (consisting of net operating loss carry-forwards and stock compensation) as of June 30, 2012 as it has not determined that such assets are likely to be realized.

Management has conducted an evaluation of the Company's tax positions taken on returns that remain subject to examination and has concluded that there are no uncertain tax positions, as defined in ASC 740, that require recognition or disclosure in the financial statements.

Fair Value of Financial Instruments

U.S. GAAP establishes a fair value hierarchy which has three levels based on the reliability of the inputs to determine the fair value. These levels include: Level 1, defined as inputs such as unadjusted quoted prices in active markets for identical assets or liabilities; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for use when little or no market data exists, therefore requiring an entity to develop its own assumptions.

The Company’s financial instruments consist of cash and accounts payable. The carrying amount of each of these approximates fair value because of the short-term nature of the item.

Note 4:  Shareholders’ Equity

On April 2, 2012, Brendan Vogel, the owner of 6,000,000 shares of common stock of the Company, returned 500,000 common shares to the Company for cancellation in exchange for no consideration.  Subsequent to the cancellation, the Company had 59,740,000 shares issued and outstanding, of which Mr. Vogel owns 5,500,000 common shares or 9.21%.

In April 2012, the Company granted a new sales consultant 500,000 stock option awards with an exercise price of $0.10 per share and a contractual life of 10 years.

Note 5:  Related Party Transactions

The Company’s shareholders paid $6,377 and $1,782 for Company-related expenses during the three months ended June 30, 2012 and 2011, respectively.  Such amounts were repaid to the shareholders as of June 30, 2012 and June 30, 2011, respectively.

Management services

During the three months ended June 30, 2012 and 2011, the Company paid $15,000 and $30,425, respectively, to individuals for management services rendered to the Company. Some of these individuals were also shareholders of the Company.

Note 6:  Commitments and Contingencies

The Company may from time to time be involved in legal proceedings arising from the normal course of business.  There are no pending or threatened legal proceedings as of June 30, 2012.

The Company has no noncancellable operating leases.  

Note 7:  Stock-Based Compensation

From time to time, the Company grants stock option awards to officers and employees. Such awards are valued based on the grant date fair value of the instruments, net of estimated forfeitures, using a Black-Scholes option pricing model with the following assumptions:

The volatility used was based on historical volatility of similar sized companies due to lack of historical data of the Company’s stock price. The risk free interest rate was determined based on treasury securities with maturities equal to the expected term of the underlying award. The expected term was determined based on the simplified method outlined in Staff Accounting Bulletin No. 110. Stock option awards are expensed on a straight-line basis over the requisite service period. During the three months ended June 30, 2012 and 2011 the Company recognized $48,524 and $1,150 respectively, of compensation expense. No future stock compensation expense will be recognized related to options outstanding at June 30, 2012 as there will be no future vesting of those options.  

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The following summarizes stock option activity for the three months ended June 30, 2012:

Note 8: Subsequent Events

The Company entered into a consulting agreement, dated April 1, 2011, with Brendan Vogel, pursuant to which Mr. Vogel was to be paid $2,500 per month for services provided to the Company. On August 2, 2012, the Company and Mr. Vogel amended the agreement whereby Mr. Vogel shall be paid a 10% commission on sales he generates during each calendar quarter.

The Company entered into a consulting agreement, dated April 1, 2011, with Joel Arberman, pursuant to which Mr. Arberman was to be paid $2,500 per month for services provided to the Company. On August 2, 2012, the Company and Mr. Arberman amended the agreement whereby Mr. Arberman shall be paid a 10% commission on sales he generates during each calendar quarter.

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Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations.

Except for the historical information contained in this report on Form 10-Q, the matters discussed herein are forward-looking statements. Words such as “anticipates,” “believes,” “expects,” “future,” and “intends,” and similar expressions are used to identify forward-looking statements. These and other statements regarding matters that are not historical are forward-looking statements. These matters involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include without limitation those discussed below as well as those discussed elsewhere in this report. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s analysis only as of the date hereof. We assume no obligation to update these forward-looking statements to reflect actual results or changes in factors or assumptions affecting such forward-looking statements. This information should also be read in conjunction with our audited historical financial statements which are included in our Form 10-k for the fiscal year ended March 31, 2012, filed with the Securities and Exchange Commission on July 13, 2012.

Background Overview

Mister Goody provides businesses with access to independent freelancers who provide a wide array of creative, marketing and technology services, at fixed rates. The independent freelancers specialize in social media marketing, search engine optimization, Internet marketing, content creation, website development and public relations among other services. This on-demand workforce allows businesses to have services completed when they are needed, saving time and money. Mister Goody retains a fee for each successful transaction between client and freelancer.

Results of Operations

From the three months ended June 30, 2012 and 2011:

Revenues: We generated $3,000 and $0, respectively, in revenues.

Operating Expenses: Our operating expenses consisted of $71,637 and $17,763, respectively, of general and administrative expenses and $15,000 and $30,425, respectively, of management services expenses. Our general and administrative expenses were for legal and professional fees, software development, telecommunications, internet access, internet server hosting, office supplies and other expenses complying with our obligations as a reporting issuer and the trading of our securities.

Net Loss: We had a net loss of $83,637 and $48,188, respectively, of which $48,524 and $1,150, respectively, was non-cash stock-based compensation.

The results of operations for three months ended June 30, 2012 and 2011 are not indicative of the results for any future interim period. During this initial period, we were primarily focused on raising investment capital, recruiting and retaining management, business planning and initial software development.

We expect to considerably increase our operating expenses in the future, particularly expenses in sales, marketing, accounting and legal fees.

Plans of Operation

Mister Goody provides businesses with access to independent freelancers who provide a wide array of creative, marketing and technology services, at fixed rates. The independent freelancers specialize in social media marketing, search engine optimization, Internet marketing, content creation, website development and public relations among other services. This on-demand workforce allows businesses to have services completed when they are needed, saving time and money. Mister Goody retains a fee for each successful transaction between client and freelancer.

We promote awareness of our services through social media outreach, community involvement, Internet marketing, affiliates and business development partnerships.  Our marketing budget depends on a number of factors, including our results of operations, effectiveness of each marketing approach and availability of capital.  

To be successful, we must establish and strengthen the awareness of the Mister Goody brand.  We believe that maintaining and enhancing our brand recognition is an important aspect of our efforts to generate revenue. We also believe that the importance of brand recognition will increase due to the relatively low barriers to entry in the Internet market.  Successful promotion of our brand will depend largely on the effectiveness of our marketing efforts and on our ability to offer members discounts and special offers for a wide range of products and services.

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We participate in a highly competitive and fragmented industry with low barriers to entry. Privately-backed and public companies could choose to enter our space and compete directly with us, or indirectly by offering substitute offerings.  With the introduction of new technologies and the influx of new entrants to the market, we expect competition to persist and intensify in the future, which could harm our ability to increase sales and generate a profit. Many companies and individuals are engaged in the same or similar businesses. We compete with numerous industry participants to attract clients, affiliates, freelancers and marketing partners.

We may pursue acquisition opportunities in the future. We have not made any material acquisitions to date and, therefore, our ability as an organization to make and integrate significant acquisitions is unproven. Any future acquisition, investment or business relationship may result in unforeseen operating difficulties and expenditures. In particular, we may encounter difficulties assimilating or integrating the acquired businesses, technologies, products, personnel or operations of the acquired companies, particularly if the key personnel of the acquired company choose not to work for us and we may have difficulty retaining the customers of any acquired business due to changes in management and ownership. Acquisitions may also disrupt our ongoing business, divert our resources and require significant management attention that would otherwise be available for ongoing development of our business. In connection with one or more of those transactions, we may issue additional equity securities that would dilute our stockholders or incur debt on terms unfavorable to us or that we are unable to repay.

Liquidity and Capital Resources

Our balance sheet as of June 30, 2012 reflects cash assets of $103,691, other current assets of $20, no other assets and no liabilities. Cash and cash equivalents from inception to date have been sufficient to provide the operating capital necessary to operate to date.

Our cash came from the issuance of shares in 2011 private placements in which we raised $327,800.

Over the next 12 months, we anticipate needing at least $50,000 for sales, marketing and for other operating expenses. We may need to raise additional funds for these expenses in the event we allocate available cash for other purposes.

In the future, we plan to try and raise additional capital through the issuance of additional common shares or Preferred Shares. If we issue additional common shares, our then-existing shareholders may face substantial dilution. If we issue Preferred Shares, we would be obligated to pay a substantial amount of interest which would reduce our cash available for working capital, property acquisitions and renovations. In addition, holders of Preferred Shares would be entitled to be paid out of any assets we have in the event of any liquidation, dissolution or winding up of the corporation, before the holders of common share would be paid anything.

Currently, we do not have any arrangements for any financing, whether it be through the sale of common shares or the sale of Preferred Stock or any other method of financing, and we can provide no assurances to investors that we will be able to obtain any financing when required. The only cash currently available to us is the cash in our bank account. We have no other sources of capital.

No assurance can be given that we will obtain access to capital markets in the future or that adequate financing to satisfy the cash requirements of implementing our business strategies will be available on acceptable terms. Our inability to gain access to capital markets or obtain acceptable financing could have a material adverse effect upon the results of our operations and financial condition. Our failure to raise additional funds if needed in the future will adversely affect our business operations, which may require us to suspend our operations and lead you to lose your entire investment.

It is likely that our operating losses will increase in the future and it is very possible we will never achieve or sustain profitability. We may be unable to adjust spending in a timely manner to compensate for any unexpected revenue shortfall or other unanticipated changes in our industry. Any failure by us to accurately make predictions would have a material adverse effect on our business, results of operations and financial condition.

Critical Accounting Policies

Our critical accounting policies, including the assumptions and judgments underlying them, are disclosed in the Notes to the Financial Statements. We have consistently applied these policies in all material respects. We do not believe that our operations to date have involved uncertainty of accounting treatment, subjective judgment, or estimates, to any significant degree.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Item 3.

Quantitative and Qualitative Disclosure About Market Risk

Not applicable.

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Item 4.

Controls and Procedures.

Evaluation of Disclosure Controls and Procedures. The Company’s management, with the participation of the Company’s Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of June 30, 2012. Based on this evaluation, the Company’s Principal Executive Officer and Principal Financial Officer concluded that, as of June 30, 2012 the Company’s disclosure controls and procedures were effective, in that they provide reasonable assurance that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and is accumulated and communicated to the Company’s management, including the Company’s Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

This quarterly report does not include a report of management’s assessment regarding internal control over financial reporting due to a transition period established by rules of the Securities and Exchange Commission for newly public companies.

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PART II – OTHER INFORMATION

Item 1.

Legal Proceedings.

Not applicable.

Item 1A.

Risk Factors.

Not Applicable.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

Securities issued for services

On April 2, 2012, the Company acquired from Brendan Vogel, an affiliate, 500,000 shares of common stock in exchange for no consideration. The shares were subsequently cancelled by the Company. This was a one-time private transaction that occurred solely between the Company and Mr. Vogel.  Presently, the Company has no other plans to acquire or purchase additional shares from Mr. Vogel or any other shareholder

Item 3.

Defaults Upon Senior Securities.

Not Applicable.

Item 4.

Mine Safety Disclosures.

Not Applicable.

Item 5.

Other Information.

Not Applicable.

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Item 6.

Exhibits.

* Incorporated by reference to Form 8-K filed on August 3, 2012.

All other Exhibits called for by Rule 601 of Regulation S-K are not applicable to this filing. Information pertaining to our common stock is contained in our Certificate of Incorporation and By-Laws.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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 on August 14, 2012.

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