MOPALS.COM, INC. - FORM 10-K

Attached files

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EX-31.1 - CERTIFICATION - MOPALS.COM, INC.	f10k2015ex31i_mopalscominc.htm
EX-32.1 - CERTIFICATION - MOPALS.COM, INC.	f10k2015ex32i_mopalscominc.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

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

For the fiscal year ended December 31, 2015

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

For the transition period from ______________ to ______________

Commission File number: 333-105778

MOPALS.COM, INC.

(Exact name of registrant as specified in its charter)

DELAWARE		05-0554486
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

109 Atlantic Avenue, Suite 308 Toronto, Ontario, CANADA,		M6K 1X4
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (416) 362-4888

Securities registered under Section 12(b) of the Exchange Act:

Title of each class:		Name of each exchange on which registered:
None		None

Securities registered under Section 12(g) of the Exchange Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 the Securities Act. Yes o No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes þ No o

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 o No þ

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

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.

(Do not check if a smaller reporting company)

Smaller reporting company.

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

There was no active public trading market as of the last business day of the Company’s second fiscal quarter, so there was no aggregate market value of common stock held by non-affiliates.

Number of the registrant’s common stock outstanding as of April 26, 2016: 52,200,700

TABLE OF CONTENTS

PART I

ITEM 1.	BUSINESS	1
ITEM 1A.	RISK FACTORS	7
ITEM 1B.	UNRESOLVED STAFF COMMENTS	7
ITEM 2.	PROPERTIES	7
ITEM 3.	LEGAL PROCEEDINGS	7
ITEM 4	MINE SAFETY DISCLOSURES	7

PART II

ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	8
ITEM 6.	SELECTED FINANCIAL DATA	10
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	10
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	13
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	13
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	13
ITEM 9A	CONTROLS AND PROCEDURES	13
ITEM 9B.	OTHER INFORMATION	14

PART III

ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	15
ITEM 11.	EXECUTIVE COMPENSATION	17
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	17
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	18
ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES	20

PART IV

ITEM 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES	21

SIGNATURES		23

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K (this “Report”) contains “forward-looking statements” within the meaning of the Section 27A of the Securities Act, and Section 21E of the Exchange Act. Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. These forward-looking statements are found at various places throughout this Report and include information concerning possible or assumed future results of our operations; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future operations, future cash needs, business plans and future financial results, and any other statements that are not historical facts.

From time to time, forward-looking statements also are included in our other periodic reports on Forms 10-Q and 8-K, in our press releases, in our presentations, on our website and in other materials released to the public. Any or all of the forward-looking statements included in this Report and in any other reports or public statements made by us are not guarantees of future performance and may turn out to be inaccurate. These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Report. All subsequent written and oral forward-looking statements concerning other matters addressed in this Report and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Report.

Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.

PART I

Item 1. Business

Overview

MoPals.com, Inc. (f/k/a MortgageBrokers.com Holdings, Inc. which was f/k/a MagnaData, Inc.) (the “Company”, “we”, “our”, “us” or “Mopals”), a development stage company, was incorporated under the laws of Delaware on February 6, 2003. In February 2005, we filed articles of amendment with the State of Delaware changing the name of our Company from MagnaData, Inc. to MortgageBrokers.com Holdings, Inc. On March 26, 2013, we filed articles of amendment with the State of Delaware changing the name of our Company to MoPals.com, Inc.

Discontinued Operations of Mortgage Brokerage Business

Prior to March 26, 2013, the Company operated as a mortgage brokerage in Canada through its four subsidiaries: MortgageBrokers.com Inc. (an Ontario Canada provincially incorporated company that held licensure for operating as a mortgage broker in the Province of Ontario); MortgageBrokers.com Financial Group of Companies Inc. (a Canadian federally incorporated company, which held licenses for operating as a mortgage broker in the Provinces of Newfoundland, Nova Scotia, New Brunswick, Prince Edward Island, Alberta and British Columbia); MBKR Holdings Inc. (a Canadian federally incorporated company through which the Company centralized back office services in Canada); and, MBKR Franchising Inc. (a Canadian federally incorporated company, through which the Company acted as a franchisor in Canada of the MortgageBrokers.com business system).

All business activities of the Company in the first quarter of 2013 were related to privatizing the mortgage brokerage business; activities related to the administration of the publicly reporting entity; and administration of the business including management of trades payables.

On March 26, 2013, the Company entered into an agreement of sale (the “Agreement of Sale”) pursuant to which the Company transferred to MortgageBrokers.com Canada Inc., a Canadian Corporation under the control of Alex Haditaghi, the Company’s sole officer, director and principal shareholder, all of the Company’s equity interest in the Company’s former mortgage brokerage business and MortgageBrokers.com Canada Inc. agreed to assume any and all liabilities associated with the Company’s former mortgage broker business, including, but not limited to all commitments, liabilities and contingent liabilities. Pursuant to the Agreement of Sale, Mr. Haditaghi forfeited all rights to any monies owed to Mr. Haditaghi by the Company associated with a shareholder loan of approximately $25,000.

Plan of Operations

MoPals is a development stage company which currently devotes all of its resources developing its core technology and platform, business, sales and marketing plans, acquiring users and retail customers, raising investment capital and building the sales and software development team.

The primary focus of our plan of operations is to raise capital to fund day to day business expenses and to fuel sales activities which management believes will result in revenue generation. Current management has also identified the need to add to the existing management team in the areas of operations and finance/accounting.

MoPals Service, Distribution and Market

MoPals is building an internet and mobile brand loyalty application and service that the Company believes will bridge the gap between social media and loyalty rewards. It is management’s opinion that our service will be unique as the world’s first community-driven, crowd sourced loyalty platform. With a mobile-based, experiential and Big Data-driven platform, it is our intent to reward our members for both social and transactional behaviors. It is our plan that MoPals will use an exclusive digital currency, called ‘MoCoins™’, to foster a community where consumers are rewarded for making purchases at participating businesses, as well as engaging in a wide range of social media activities that enhance brand value.

Our consumer behavior incentives are centered around MoCoins™ which are earned by members for a number of online and ‘in-store’ behaviors within a consumer’s social network including rewards for promotional participation; ‘liking’, sharing or reviewing an experience at a business; referring business promotions; creating content driving polls; or referring friends to join the MoPals community. MoPals aims to be a leader in how brands inspire customer loyalty, driving online brand enhancing behavior and sales.

It is our aim that our technology platform will enable businesses to connect with their customers, giving businesses a cost effective means to encourage and reward brand enhancing behavior. It is our intent that our proprietary platform under development will also allow businesses to receive data associated with their consumer’s behavior from which they might target promotional offers and marketing strategies.

Following our service launch, our plan is that MoPals will generate revenue from:

participating merchant subscriptions to receive ongoing consumer data; and

receiving a percentage of promotion-based sales revenue from participating businesses.

In addition to the financial condition and results of operations of the Company, it is management’s belief that growth of our Company will also, in part, be demonstrated through the metrics of MoCoins™ issued or accrued, the number of registered members, number and types of promotional items sold, member retention via repeat engagement and the number of retail businesses who sign on to and offer promotions through the MoPals community.

Market Conditions

The Company believes that MoPals bridges both the ‘Social Media’ and ‘Loyalty Program’ market places.

Social Media

The Company has observed significant growth in sales and users for market dominant social media companies over the past three to five years. Facebook Inc., for example, has seen their gross revenue grow from $1.97 billion in 2010 to $7.87 billion in 2013 (Annual Financial Reports, Facebook Inc., 2010 – 2013) – approximately 300% over three years. Twitter Inc.’s gross revenue has grown from $106 million in 2011 to $665 million in 2013 (Annual Financial Reports, Twitter Inc., 2011 – 2013) - approximately 525% over two years.

According to emarketer.com in a June 18, 2013 on-line article, social media company sales and profits are closely linked to the number of users on the platform. The amount of global social network users was estimated at 1.73 billion people in 2013, up 18% from 2012. Social networking reaches nearly one in four people around the world. According to Emily Adler as published on businessinsider.com on January 5, 2014, social media users are highly engaged. Social media is now the top Internet activity: Americans spend an average of 37 minutes daily on social media, a higher time-spend than any other major Internet activity including email.

Loyalty Programs

The Company believes that the loyalty program industry, a generally mature market space, can be characterized by high growth rates and innovative ideas.

According to an article by McKinsey & Company published in Business Insider on March 21, 2014, the loyalty program industry growth rate still remains strong, even with customers already belonging to a large amount of programs. In the United States alone, loyalty memberships have been increasing by the annual compound rate of 8.7% since 2000 and the total loyalty program members in the U.S. are estimated at 2.5 billion in 2012. However, the amount of active loyalty memberships (meaning members had engaged at least once in the past 12 months) appears to be declining and was measured at 44% in 2012.

According to McKinsey & Company, many companies have been successfully innovating in the loyalty space. One such example is Target Corporation, which uses the data gained from their loyalty program to focus on highest-value consumers such as future moms. Another example is Sainsbury PLC, which built partnerships among many different retailers to deliver strong value to its loyalty program members. Both companies’ success in the loyalty space is attributed to their innovations.

Competitive Market Conditions

In industries as valuable as Social Media and Loyalty, there are many large competitors with dominant market share positions.

The four main competitors to MoPals are Yelp Inc., Foursquare Labs, Inc., Alliance Data Systems Corporation (Air Miles) and Aimia Inc. (Aeroplan).

Yelp

Yelp, Inc. is a multinational corporation headquartered in San Francisco, California that operates an "online urban guide" and business review site. According to Wikipedia.com, the company's website (www.yelp.com) began as an email service for exchanging local business recommendations and later introduced social networking features, discounts, and mobile applications.

Foursquare

Foursquare is a location-based social networking website for mobile devices, such as smartphones. Users "check in" at venues using a mobile website, text messaging or a device-specific application by selecting from a list of venues the application locates nearby. Each check-in awards the user points and sometimes "badges". The user who ‘checks in’ most often to a venue becomes the "mayor," and users regularly vie for "mayorships".

In an article written by Sarah Frier for Bloomberg Businessweek on April 11, 2013, Foursquare received a $41 million investment from private equity fund Silver Lake Partners and venture capital firms Andreessen Horowitz, Union Square Ventures, O’Reilly AlphaTech Ventures, and Spark Capital in early April of 2014. Early investment rounds valued the company at $600 million.

Aimia

Aeroplan is a coalition loyalty program owned by Aimia Inc., a global loyalty management company. The Aeroplan program was created in July 1984 by Air Canada as an incentive program for its frequent flyer customers. There are approximately 4.6 million active members in the program. In recent years, Aeroplan has evolved into a loyalty marketing program with retail partners such as Esso, Home Hardware, Rona, Birks, Sobeys, Thrifty Foods, Nestle Canada and others.

Alliance Data (Air Miles)

Alliance Data Systems Corporation is a publicly traded provider of loyalty and marketing solutions, such as private label credit cards, coalition loyalty programs, and direct marketing services, derived from the capture and analysis of transaction-rich data.

Strategic Market Positioning

Management believes that there is presently an overall lack of recent innovation and customer engagement in the loyalty program industry and view it as an opportunity to leverage the innovative strength and tools of social media in the brand loyalty market place. Company management also believe that the strength of the current market dominant competitors and the ongoing elevated degree of acquisitions in the social media and brand loyalty marketplaces may afford MoPals additional opportunities for growth.

The Company feels it has an advantage being a later entrant into the social media and brand loyalty markets which allows it to see what has worked for competitors in each market and how to improve upon it leveraging successes from one market into the other. The Company also feels that building a ‘Big-Data’ member platform can now be accomplished very cost effectively by outsourcing to off-shore developers.

MoPals Technology Platform & Service

MoPals’ software is planned to be multi-platform and will aim to integrate with all major social media sites, such as Facebook, Twitter, LinkedIn, Instagram, and Pinterest. Our product development approach is centered on building the most useful tools that enable users to connect, share, discover, and communicate with each other. Our services for users are free of charge to consumers and available on the internet and mobile platforms.

The MoPals’ proprietary software allows merchants to send customized and targeted brand promotions to our MoPals’ members using the wealth of information that is being volunteered over social media sites.

Our service will include:

	i.	Promotional offers. We will be featuring promotional offers from our national and local merchants and distributing them by email to our MoPals’ members.

	ii.	Self-Service Deals. Our merchants can use our self-service platform to create and launch deals at their discretion on our site.

	iii.	Member-Generated Polls. Our members will be able to create and generate polls and send them to their friends.

	iv.	Member-Generated Surveys. Our members will be able to create surveys and send them to their friends.

	v.	Our merchants will be able to create polls or surveys to be posted on the MoPals’ site.

	vi.	Our members can earn MoCoins™ for joining, liking a brand, purchasing a promotion, sharing their promotion and creating and responding to surveys.

Intellectual Property

We protect our core technology and intellectual property rights by relying on federal, state/provincial and common law rights, as well as contractual restrictions. We control access to our proprietary technology by entering into confidentiality agreements with our employees, contractors and third parties.

In addition to these contractual arrangements, we may also rely on a combination of trade secrets, copyrights, trademarks, service marks, trade dress, domain names and patents to protect our intellectual property. We may pursue the registration of certain copyrights, trademarks, service marks and domain names in Canada and the United States and potentially in certain locations outside these areas.

Regulatory Matters and Compliance

We are subject to a number of Canadian federal and provincial, as well as American federal and state laws and regulations affecting companies conducting business on the internet. As we expand, we may be subject to similar laws and regulations in jurisdictions outside of Canada and the United States. These laws are constantly evolving and being tested in courts and could be interpreted in a variety of ways that could harm our business. These laws and regulations may involve such areas as taxation, tariffs, privacy and protection of personal data, rights of publicity, content, intellectual property, distribution, electronic contracts and other communications, on-line sweepstakes and contests, competition, protection of minors, consumer protection, and the provision of online payment services, among other areas.

It is not clear how existing laws governing issues such as property ownership, sales and other taxes, libel and personal privacy apply to the internet as the vast majority of these laws were adopted prior to the advent of the internet and do not contemplate or address the unique issues raised by the internet or e-commerce.

We are also subject to federal, state, provincial and foreign laws regarding privacy and protection of user data. Foreign data protection, privacy, and other laws and regulations are often more restrictive than those in the United States. U.S. federal and state and foreign laws and regulations are constantly evolving and can be subject to significant change. In addition, the application and interpretation of these laws and regulations are often uncertain, particularly in the new and rapidly-evolving industry in which we operate. There are also a number of legislative proposals pending before the U.S. Congress, various state legislative bodies, and foreign governments concerning data protection which could affect us. For example, a revision to the 1995 European Union Data Protection Directive is currently being considered by legislative bodies that may include more stringent operational requirements for data processors and significant penalties for non-compliance.

We post our Privacy Policy and Terms of Service online, in which we describe our practices concerning the use, transmission and disclosure of user data. Any failure by us to comply with our posted privacy policy or privacy related laws and regulations could result in proceedings against us by governmental authorities or others, which could harm our business. In addition, the interpretation of data protection laws, and their application to the Internet is unclear and in a state of flux. There is a risk that these laws may be interpreted and applied in conflicting ways from state to state, province to province, country to country, or region to region, and in a manner that is not consistent with our current data protection practices. Complying with these varying international requirements could cause us to incur additional costs and change our business practices. Further, any failure by us to adequately protect our players’ privacy and data could result in a loss of player confidence in our services and ultimately in a loss of players, which could adversely affect our business.

Offers and/or MoCoins™ may be considered gift cards, gift certificates, stored value cards or prepaid cards and therefore governed by, among other laws, the CARD Act and state and provincial laws governing gift cards, stored value cards and coupons. Many of these laws contain provisions governing the use of gift cards, gift certificates, stored value cards or prepaid cards, including specific disclosure requirements and prohibitions or limitations on the use of expiration dates and the imposition of certain fees. If Offers and/or MoCoins™ are subject to the CARD Act, the value of the Offer and/or Miles must not expire before the later of (i) five years after the date on which the Offer and/or MoCoins™ were issued; and (ii) the Offer and/or MoCoins™’ expiration date (if any).

In addition, certain states and foreign jurisdictions have requirements for disclosure and service terms and conditions, including expiration dates and permissible fees that might apply to Mopals. Some states and foreign jurisdictions also include gift cards under their unclaimed and abandoned property laws which require companies to remit to the government the value of the unredeemed balance on the gift cards after a specified period of time (generally between one and five years) and impose certain reporting and recordkeeping obligations. We do not remit any amounts relating to unredeemed Offers and/or MoCoins™ based upon our assessment of applicable laws. The analysis of the potential application of the unclaimed and abandoned property laws to Offers and/or MoCoins™ is complex, involving an analysis of constitutional and statutory provisions and factual issues, including our relationship with customers and merchants and our role as it relates to the issuance and delivery of an Offer and/or MoCoins™.

Many states have passed laws requiring notification to subscribers when there is a security breach of personal data. There are also a number of legislative proposals pending before the U.S. Congress, various state legislative bodies and foreign governments concerning data protection. In addition, data protection laws in Europe and other jurisdictions outside the United States may be more restrictive, and the interpretation and application of these laws are still uncertain and in flux. It is possible that these laws may be interpreted and applied in a manner that is inconsistent with our data practices. If so, in addition to the possibility of fines, this could result in an order requiring that we change our data practices, which could have an adverse effect on our business. Furthermore, the Digital Millennium Copyright Act has provisions that limit, but do not necessarily eliminate, our liability for linking to third-party websites that include materials that infringe copyrights or other rights, so long as we comply with the statutory requirements of this act.

Various laws and regulations in the United States, Canada, and abroad, such as the Bank Secrecy Act, the Dodd-Frank Act, the USA PATRIOT Act, and the Credit CARD Act impose certain anti-money laundering requirements on companies that are financial institutions or that provide financial products and services. For these purposes, financial institutions are broadly defined to include money services businesses such as money transmitters, check cashers and sellers or issuers of stored value. Examples of anti-money laundering requirements imposed on financial institutions include customer identification and verification programs, record retention policies and procedures and transaction reporting. We do not believe that we are a financial institution subject to these laws and regulations based, in part, on the characteristics of the offers and/or MoCoins™ and our role with respect to the distribution of the offers and/or MoCoins™ to customers. However, the Financial Crimes Enforcement Network, a division of the U.S. Treasury Department tasked with implementing the requirements of the Bank Secrecy Act, recently proposed amendments to the scope and requirements for parties involved in stored value or prepaid access, including a proposed expansion of the definition of financial institution to include sellers or issuers of prepaid access. In the event that this proposal is adopted as proposed, it is possible that an offer and/or the MoCoins™ could be considered a financial product and that we could be a financial institution.

Additionally, the Personal Information Protection and Electronic Documents Act (“PIPEDA”) (Canada) requires organizations to take reasonable steps to safeguard the personal information in their custody or control from such risks as unauthorized access, collection, use, disclosure, copying, modification, disposal or destruction. The first step in developing reasonable safeguards is to collect only the personal information that is needed for a particular purpose. If it is not needed, organizations should not collect it. But if they do, they need to take appropriate precautions.

In addition, because our services are accessible worldwide, certain foreign jurisdictions have claimed and others may claim that we are required to comply with their laws, including in jurisdictions where we have no local entity, employees, or infrastructure.

Employees & Independent Contractors

As of April 26, 2016, we had one (1) full-time employee and ten (10) independent contractors. None of these employees are represented by collective bargaining agreements. The Company considers its relations with its employees and independent contractors to be in good standing.

Corporate Information

The Company’s corporate headquarters is located at a leased office space located at 109 Atlantic Avenue, Suite 308, Toronto, Ontario, CANADA, M6K 1X4. Our telephone number is (416) 362-4888. Our website is www.mopals.com.

Item 1A. Risk Factors

We are exempt from this reporting because we are a smaller reporting company.

Item 1B. Unresolved Staff Comments

We are exempt from this reporting because we are a smaller reporting company.

Item 2. Properties

The Company’s corporate headquarters is located at a leased office space located at 109 Atlantic Avenue, Suite 308, Toronto, Ontario, CANADA, M6K 1X4. The sub-lease is for a term of fifty (‘50’) months which commenced on March 1, 2013 and ends on April 29, 2018. The lease payment obligations were approximately $14,000 per month in 2015.

Item 3. Legal Proceedings

We are currently not involved in any litigation that we believe could have a materially adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our company’s or our company’s subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

Item 4. Mine Safety Disclosures

Not applicable.

PART II

Item 5. Market For Registrant’s Common Equity, Related Stockholder Matters And Issuer Purchases Of Equity Securities

Market Information

Our shares of common stock are approved for quotation on the OTC Bulletin Board under the symbol “PALS.”

Price Range of Common Stock

The following table represents the closing high and low bid information for our common stock during the last two fiscal years as reported by the OTC Bulletin Board. The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions. The market for our common stock is sporadic and our stock is thinly traded.

2015	High		Low
First Quarter	$	0.88	$	0.26
Second Quarter	$	0.74	$	0.36
Third Quarter	$	0.74	$	0.36
Fourth Quarter	$	0.74	$	0.20

2014	High		Low
First Quarter	$	1.01	$	0.15
Second Quarter	$	0.98	$	0.41
Third Quarter	$	0.95	$	0.41
Fourth Quarter	$	0.93	$	0.35

Holders

As of April 26, 2016, there were 120 registered beneficial shareholders of record for our outstanding common stock.

Authorized Capital Stock

Our authorized share capital consists of 100,000,000 shares of common stock, par value $0.0001 per share, and 0 shares of preferred stock, par value $0.01 per share. As of April 26, 2016, an aggregate of 52,200,700 shares of common stock and no shares of preferred stock were issued and outstanding.

Common Stock

All outstanding shares of common stock are of the same class and have equal rights and attributes. The holders of common stock are entitled to one vote per share on all matters submitted to a vote of stockholders of the Company. All stockholders are entitled to share equally in dividends, if any, as may be declared from time to time by the Board of Directors out of funds legally available. In the event of liquidation, the holders of common stock are entitled to share ratably in all assets remaining after payment of all liabilities. The stockholders do not have cumulative or preemptive rights.

Preferred Stock

Our Articles of Incorporation does not authorize any preferred stock.

Dividends

We have not paid any cash dividends to our shareholders. The declaration of any future cash dividends is at the discretion of our board of director and depends upon our earnings, if any, our capital requirements and financial position, our general economic conditions, and other pertinent conditions. It is our present intention not to pay any cash dividends in the foreseeable future, but rather to reinvest earnings, if any, in our business operations.

Securities Authorized for Issuance under Equity Compensation Plan

The following table summarizes those securities authorized for issuance in 2015 in accordance with an equity compensation plan including individual compensation arrangements:

Plan Category	Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants & Rights		Weighted Average Exercise Price of Outstanding Options, Warrants & Rights		Number of Securities remaining Available for Future Issuance under Equity Compensation Plans (excluding Securities reflected in Column (a))
	(a)		(b)		(c)
Equity Compensation Plans Approved by Security Holders		1,150,000	$	0.41		0
Equity Compensation Plans not Approved by Security Holders		0		0		0

On February 6, 2003 and as amended on February 14, 2003, the Company adopted the 2003 Equity Compensation Plan to attract and retain high quality personnel. The adequacy of this plan is evaluated annually by Company management. As of December 31, 2015, 900,000 options had been outstanding under this plan to the Company’s former board of directors and 250,000 options to the landlord.

On March 1, 2005 the Company had adopted the Service Compensation Plan ("the Service Plan"), the purpose of which is to enhance the Company’s stockholder value and maximize the available capital resources of the company through allowing non-monetary transactions whereby the issuance of stock is granted for services rendered. Under the Service Plan, service providers, consultants, and strategic alliance partners who provide services to the Company may be granted common stock, options or warrants to acquire restricted stock of the Company. The total number of shares reserved for issuance under the Service Plan is 166,667, the adequacy of which is evaluated annually. On September 19, 2013, the Company issued 275,000 shares to 1014864 Ontario Limited pursuant to an advertising billboard signage lease agreement executed on September 18, 2013.

Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities

On October 30, 2014, a director of the Company delivered $223,350 to purchase 1,000,000 common shares of the company issued at $0.25 per share. As of December 31, 2014, these common shares had not been issued.

On February 9, 2015, a director of the Company delivered $24,467 to purchase 100,000 common shares of the Company issued at $0.25 per share.

On March 9, 2015, a director of the Company delivered $102,000 and settled $78,000 of accrued director fees to exercise 600,000 stock options into common shares of the Company at a weighted average exercise price of $0.30 per share.

On July 27, 2015, the Company entered into a stock purchase agreement with Kuusamo Capital, Ltd, pursuant to which the Company issued 306,816 shares of the company’s common stock at a purchase price of $0.25 per share for total proceeds to the Company of $76,704.

On September 3, 2015, the Company entered into a stock purchase agreement with Vito Gallo, pursuant to which the Company issued 1,000,000 shares of the company’s common stock at a purchase price of $0.25 per share for total proceeds to the Company of $250,000.

On November 5, 2015, the Company issued 1,389,000 common shares valued at $0.25 per common share based on the current stock price in the most recent private placement to settle director fees, consultant and employee compensation.

During the year ended December 31, 2015, the Company agreed to grant 2,109,000 common shares to certain employees. Of these common shares, 675,000 vest over 12 months, 750,000 vest over 18 months and the remaining 684,000 vest immediately. These shares were valued at $527,250 based on the current stock price at the date of grant of $0.25 and an estimated forfeiture rate of 56%, of which $214,947 was accrued at December 31, 2015 and recorded as stock based compensation on the consolidated statements of operations.

Section 4(2) of the Securities Act

The Company issued restricted shares of its common stock. They were issued in reliance on the exemption under Section 4(2) of the Securities Act of 1933, as amended (the “Act”). These shares of our common stock qualified for exemption under Section 4(2) of the Securities Act of 1933 since the issuance shares by us did not involve a public offering. The offering was not a “public offering” as defined in Section 4(2) due to the insubstantial number of persons involved in the deal, size of the offering, manner of the offering and number of shares offered. We did not undertake an offering in which we sold a high number of shares to a high number of investors. In addition, this shareholder had the necessary investment intent as required by Section 4(2) since they agreed to and received share certificates bearing a legend stating that such shares are restricted pursuant to Rule 144 of the 1933 Securities Act. This restriction ensures that these shares would not be immediately redistributed into the market and therefore not be part of a “public offering.” Based on an analysis of the above factors, we have met the requirements to qualify for exemption under Section 4(2) of the Securities Act of 1933 for these transactions.

Item 6. Selected Financial Data

We are exempt from reporting this item as a smaller reporting company.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following is management’s discussion and analysis of the consolidated financial condition and results of operations of MoPals.com, Inc. for the fiscal years ended December 31, 2015 and 2014. The following information should be read in conjunction with the audited consolidated financial statements for the period ending December 31, 2015 and notes thereto appearing elsewhere in this Form 10K.

Mopals.com, Inc. is a development stage internet and mobile brand loyalty social media company. It is Mopal’s plan to earn revenue from business subscriptions and transaction fees to receive ongoing consumer data and as well as from receiving a percentage of promotion-based sales revenue from participating businesses couponing engine.

Results of Operations

Our Company had the following comparative results from operations for the fiscal years ended December 31, 2015 and 2014:

No reported revenue in 2015 or 2014.

Operating expenses in 2015 were $2,149,388 as compared with $2,293,734 in 2014. Most of the year over year operating expense difference was related to a 13.6% foreign exchange increase in 2015 over 2014 as most of the Company’s expenses are incurred in Canadian dollars; and,

Loss from operations of $2,149,388 in 2015 as compared to a loss of $2,293,734 in 2014. Most of the year over year loss from operations difference was related to a 13.6% foreign exchange increase in 2015 over 2014 as most of the Company’s expenses are incurred in Canadian dollars.

Revenue Trend Analysis

Our development stage Company had no revenue reported in 2015 or 2014.

Expense Trend Analysis

All expense trends, on a year over year basis, have been affected by a 13.6% foreign exchange increase in 2015 over 2014 as most of the Company’s expenses are incurred in Canadian dollars.

On a U.S. dollar basis, our expenses have decreased 6.3% in 2015 to $2,149,388 as compared to our second full year of operations in 2014 at $2,293,735. On a Canadian dollar basis, our expenses were relatively flat year over year, having increased 8.47% in 2015 over 2014.

Expense trends noted by management over the past two years are as follows:

	●	our cost of labour associated with employees and consultants decreased by 11.5% to $1,199,834 in 2015 as compared to $1,355,922 in 2014. This was primarily due to the net effect of a relatively flat year over year expense in Canadian dollars (increased 2.4% in 2015 as compared to 2014) and 13.6% foreign exchange increase in 2015 over 2014;

	●	our general and administrative expenses increased 5.2% to $386,815 in 2015 from $367,614 in 2014. This was primarily due to the net effect of a 21.8% increase in 2015 Canadian dollar expenses as compared to 2014 associated with advertising and business development expense increases and a 13.6% foreign exchange increase in 2015 over 2014;

	●	our occupancy costs regionally decreased 6.3% to $132,132 from $141,022 in 2014. This was primarily due to the net effect of an 8.5% increase in 2015 Canadian dollar expenses as compared to 2014 associated with an office lease rent increase that commenced in August of 2015 and a 13.6% foreign exchange increase in 2015 over 2014;

	●	share-based compensation decreased 0.9% to $414,877 in 2015 from $418,827 in 2014. This was primarily due to the net effect of a 14.7% decrease in 2015 Canadian dollar expenses as compared to 2014 associated with cancellation of all share-based compensation accruals for the board of directors who all resigned in the early part of 2015 and a 13.6% foreign exchange increase in 2015 over 2014;

Since inception to the end of the reporting period, the Company accumulated a deficit of $6,147,574.

Liquidity

At December 31, 2015, we had $6,079 in cash and $295,253 in prepaid expenses and other assets for a total of $301,332 in current assets. Comparatively, at December 31, 2014, we had $143,482 in cash and $243,964 in prepaid expenses for a total of $387,446 in current assets.

At December 31, 2015, we had $231,726 in accounts payable and accrued liabilities, $832,831 in employee tax deductions payable, $2,644 in accrued MoCoins™ liability, $14,924 in accrued stock-based compensation and $1,429,055 in loans from shareholders for a total of $2,511,180 in liabilities. Comparatively as of December 31, 2014, we had $255,078 in accounts payable and accrued liabilities, $500,139 employee tax deductions payable, $1,855 in accrued MoCoins™ liability, $14,924 in accrued stock-based compensation and $1,125,671 in loans from shareholders for a total of $1,897,667 in liabilities.

Management makes the following comments regarding the most significant factors affecting Company liquidity and their measured trends over the reporting period as compared to 2014:

Cash and cash equivalents associated with continuing operations has decreased 95.8% to $6,079 in 2015 from $143,482 in 2014. This is a result of ongoing operations with no revenue and limited investment capital.

The Company has a Canadian harmonized sales tax refund accrual of $136,359 as a receivable owing to them from the Canadian federal government.

Accounts payable and accrued liabilities decreased 9.2% to $231,726 in 2015 as compared to $255,078 in 2014. This is associated primarily with a decrease in board of director fee accruals as five members of board resigned in early 2015.

Employee tax deductions payable grew 66.5% to $832,831 in 2015 as compared to $500,139 in 2014. The Company is in arrears on the tax withholdings related to employee source deductions on salaries due to Canada Revenue Agency.

Stock-based compensation accruals fluctuate year to year. The accrual is valued based on stock prices at the end of the period, grant prices and vesting terms for which the Company has no direct influence. Thus, it is difficult to analyze related trends. The Company anticipates that it will continue to negotiate stock-based compensation arrangements to maximize working capital resources.

Capital Resources

Our Company had no reported revenue in fiscal year ended December 31, 2015, 2014, or since inception.

The Company decreased its total cash and cash equivalent position at the end of 2015 to $6,079 from $143,482 the previous year as a direct result of a net cash flow out of the Company from operating activities during the reporting period of $1,330,196, a net cash flow into the Company of $980,103 as a result of financing activities during the reporting period and $3,883 of cash used in investing activities. As at December 31, 2015, with no means to generate revenue and until such time as our operating expenses are augmented with revenue, the Company relies upon loans from shareholders and the purchase and sale of common stock via investor subscription agreements to fund our development stage operations. There is no guarantee that there will be a market for the Company’s common stock, an ability to raise investment capital, or an ability to procure shareholder loans in the future to fund our future operations.

Off-Balance Sheet Arrangements

None.

Significant Accounting Policies and New Pronouncements

The preparation of financial statements in conformity with generally accepted accounting principles requires management to select appropriate accounting policies and to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. The following is the most significant accounting policy that has a substantive impact on the underlying discussions and analysis:

Stock-based Compensation

The Company maintains a stock-based compensation plan under which incentive stock options to buy common stock may be granted to directors, officers and employees. Pursuant to ASC 718, the Company recognizes expense for its stock-based compensation based on the fair value of the awards that are granted. The fair values of stock options are estimated at the date of the grant using the Black-Scholes option pricing model, that require the input of highly subjective assumptions. Measured compensation cost is recognized ratably over the vesting period of the related stock-based compensation award. The amount recognized as expense is adjusted to reflect the number of stock options expected to vest. When exercised, stock options are settled through the issuance of common stock and are therefore treated as equity awards. The expected volatility of our commons stock is estimated based on the historical performance of the stock.

The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flow.

In February 2016, the FASB issued ASU 2016-02, Leases, which supersedes ASC Topic 840, Leases, and creates a new topic, ASC Topic 842, Leases. ASU 2016-02 requires lessees to recognize a lease liability and a lease asset for all leases, including operating leases, with a term greater than 12 months on its balance sheet. ASU 2016-02 also expands the required quantitative and qualitative disclosures surrounding leases. ASU 2016-02 is effective for the Company beginning January 1, 2019. Early adoption is permitted.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

We are exempt from reporting this item as a smaller reporting company.

Item 8. Financial Statements and Supplementary Data

The financial statements of the Company appear at the end of this report beginning with the Index to Financial Statements on page F-1.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, 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 (the “Exchange Act”)). Based on their evaluation of the Company’s disclosure controls and procedures, the Company’s principal executive officer and principal financial officer, with the participation of the Company’s management, have concluded that the Company’s disclosure controls and procedures were not effective as of December 31, 2015, to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is(a) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (b) accumulated and communicated to management, including the Company’s principal executive officer and principal financial officer, as appropriate to allow for timely decisions regarding required disclosure.

Specifically, our management identified certain matters involving internal control and our operations that it considered to be material weaknesses. As defined in the Exchange Act, a material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the registrant’s annual or interim financial statements will not be prevented or detected on a timely basis. The material weakness identified by our management as of December 31, 2015, is described below:

●

We did not maintain sufficient personnel with an appropriate level of technical accounting knowledge, experience and training in the application of GAAP commensurate with our complexity and our financial accounting and reporting requirements. This control deficiency is pervasive in nature. Further, there is a reasonable possibility that material misstatements of the financial statements including disclosures will not be prevented or detected on a timely basis as a result.

As a result of the material weakness identified above, our internal control over financial reporting was not effective as of December 31, 2015.

Management’s Annual Report on Internal Controls Over Financial Reporting

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Our internal control system was designed to, in general, provide reasonable assurance to the Company’s management and board regarding the preparation and fair presentation of published financial statements, but because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2015. The framework used by management in making that assessment was the criteria set forth in the document entitled “Internal Control – Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that assessment, our management has determined and concluded that, as of December 31, 2015, the Company’s internal controls over financial reporting were not effective.

Management’s assessment identified several material weaknesses in our internal control over financial reporting. A “material weakness” is defined under SEC rules as a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis by the company’s internal controls. Our management concluded that we had material weaknesses in our control environment and financial reporting process consisting of the following as of the evaluation date:

	1)	lack of a functioning audit committee due to a lack of a majority of independent members and a lack of a majority of outside directors on our Board of Directors, resulting in ineffective oversight in the establishment and monitoring of required internal control and procedures;
	2)	lack of accounting personnel with adequate experience and training; and
	3)	ineffective controls over period end financial disclosure and reporting processes.

As of the date of this report, the Company does not intend to remedy the foregoing and therefore such material weaknesses in our control environment and financial reporting process will continue. A system of controls, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the system of controls are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

This Report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management's report in this annual report.

Changes in Internal Control Over Financial Reporting

There have been no changes in the Company’s internal controls over financial reporting during our fourth quarter ended December 31, 2015, or in other factors that could significantly affect these controls, that materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

Item 9B. Other Information

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

Director and Executive Officer

The following table sets forth, as of April 26, 2016, the name and age of our directors and executive officer. The directors hold such office until the next annual meeting of shareholders and until their successor has been elected and qualified.

Name		Age		Position
Alex Haditaghi		46		President, Chief Executive Officer, Chief Financial Officer and Director

The following summarizes the occupation and business experience of our executive officer and director:

Alex Haditaghi, President, Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer and Director

Alex Haditaghi is the founder and Chief Executive Officer, Chief Financial Officer and sole director of MoPals. He has been working in the mortgage industry in Canada since 1999 and has experience in both residential and commercial mortgages. He is currently the founder and chairman of Pacific Mortgage Group Inc., a company with net revenue exceeding $21 million in 2014. Mr. Haditaghi is responsible for the business vision, expansion, capital resources, hiring the executive management team, establishing corporate policy and providing overall leadership at Mopals.

Employment Agreements

The Company has no employment agreement with its founding chief executive officer and director.

Family Relationships

None.

Corporate Governance

The Board has not adopted corporate governance principles. Currently, the Company’s Chief Executive Officer also holds the position of Chairman of the Board of Directors. In the future, however, the Board may reconsider whether its Chief Executive Officer should also serve as Board Chairman.

Audit Committee and Financial Expert

We do not have a standing audit committee of the Board of Directors. Management has determined not to establish an audit committee at present because of our limited resources and limited operating activities do not warrant the formation of an audit committee or the expense of doing so. We do not have a financial expert serving on the Board of Directors.

Compensation Committee and Nominating Committee

We currently do not have a compensation committee or a nominating committee. Our board of directors is responsible for determining compensation for our officers and directors. Nominations for election to our board of Directors may be made by the Board of Directors or by any stockholder entitled to vote for the election of directors in accordance with our bylaws and Delaware law.

Code of Ethics

The Company has adopted a Code of Ethics applicable to its Chief Executive Officer and Chief Financial Officer which has been filed as an exhibit to our Annual Report on Form 10-KSB on March 31, 2005.

Involvement in Certain Legal Proceedings

To the best of our knowledge, our director/executive officer has not, during the past ten years:

	i.	been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

	ii.	had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time;

	iii.	been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity;

iv.

been found by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;

	v.	been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

	vi.	been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

Except as set forth in our discussion below in “Certain Relationships and Related Transactions,” our director/ executive officer has not been involved in any transactions with us or our director/executive officer, affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the Commission.

Promoters and Control Persons

None.

Board of Directors and Committees

The Company currently has one director.

Our directors shall be elected at the annual meeting of the stockholders or at a special meeting called for that purpose. Each director shall hold such office until his successor is elected and qualified or until his earlier resignation or removal. Any vacancy occurring on the board of directors and any directorship to be filled by reason of an increase in the board of directors may be filled by the affirmative vote of a majority of the remaining directors, although less than a quorum, or by a sole remaining director. Such newly elected director shall hold such office until his successor is elected and qualified or until his earlier resignation or removal.

Section 16(a) Beneficial Ownership Reporting Compliance

Under Section 16(a) of the Exchange Act, our directors and certain of our officers, and persons holding more than 10 percent of our common stock are required to file forms reporting their beneficial ownership of our common stock and subsequent changes in that ownership with the United States Securities and Exchange Commission.

Item 11. Executive Compensation

Summary Compensation Table

The following summary compensation table sets forth all compensation awarded to, earned by, or paid to the named executive officers paid by us during the years ended December 31, 2015, and 2014.

SUMMARY COMPENSATION TABLE
Name and principal position (a)	Year (b)	Salary ($) (c)		Bonus ($) (d)		Stock Awards ($)		Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		Nonqualified Deferred Compensation Earnings ($)		All Other Compensation ($)		Total ($)
Alex Haditaghi,	2015		0		0		0		0		0		0		60,000		60,000
Chief Executive Officer, Chief Financial Officer and Director	2014		0		0		0		0		0		0		60,000		60,000

Compensation of Directors & Director Agreements

On April 20, 2015, Todd Halpern resigned from the Company’s board of directors. On May 13, 2015, Steve Gupta resigned from the Company’s board of directors. On May 14, 2015, Ralph Lean, Luce Veilleux and Greivis Vasquez resigned from the Company’s board of directors. The above members of the Company’s board of directors resigned because of a disagreement between these board members and the Company’s management over the strategic direction of the company, and the Company’s Chief Executive Officer, being the majority shareholder, would have the right to dismiss the board members.

Alex Haditaghi, Chief Executive Officer, remains the sole member of the board of directors.

Mr. Haditaghi receives $60,000 per year and he does not have a director agreement.

Stock Option Grants in the Past Fiscal Year

No stock options were granted in 2015.

During 2015, 1,300,000 stock options were forfeited due to director resignations.

Compensation of Directors

Our sole member of the Board of Directors did not receive compensation during fiscal year 2015.

Employment Contracts, Termination of Employment, Change-in-Control Arrangements

As of December 31, 2015, there are no employment contracts or change in control arrangements in place,

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth certain information regarding our shares of common stock beneficially owned as of April 26, 2016, for (i) each stockholder known to be the beneficial owner of 5% or more of our outstanding shares of common stock, (ii) each named executive officer and director, and (iii) all executive officers and directors as a group. A person is considered to beneficially own any shares: (i) over which such person, directly or indirectly, exercises sole or shared voting or investment power, or (ii) of which such person has the right to acquire beneficial ownership at any time within 60 days through an exercise of stock options or warrants. Unless otherwise indicated, voting and investment power relating to the shares shown in the table for our directors and executive officers is exercised solely by the beneficial owner or shared by the owner and the owner’s spouse or children.

For purposes of this table, a person or group of persons is deemed to have “beneficial ownership” of any shares of common stock that such person has the right to acquire within 60 days of April 26, 2016. For purposes of computing the percentage of outstanding shares of our common stock held by each person or group of persons named above, any shares that such person or persons has the right to acquire within 60 days of April 26, 2016 is deemed to be outstanding, but is not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. The inclusion herein of any shares listed as beneficially owned does not constitute an admission of beneficial ownership.

Name of Beneficial Owner and Address (1)	Amount and Nature of Beneficial Ownership of Common Stock			Percent of Common Stock (2)
5% Shareholders
8412910 Canada Inc.		41,000,000	(3)		79.93	%
8413037 Canada Inc.		4,500,000			8.77	%
Directors and Executive Officers
Alex Haditaghi		41,857,800	(4)		81.16	%
All directors and officers as a group (1 person)		41,857,800			81.16	%

(1)	Unless otherwise provided, the address of all beneficial owners is c/o MoPals.com, Inc., 109 Atlantic Avenue, Suite 300, Toronto, Ontario, M6X 1X4.
(2)	Based on 52,200,700 shares of common stock outstanding of April 26, 2016.
(3)	Equity interest in 8412910 Canada Inc. is wholly-owned by Alex Haditaghi, controlling shareholder Chief Executive Officer, and director of the Company.
(4)	Includes: (1) 857,800 shares of the common stock held directly by Mr. Haditaghi; and (2) Mr. Haditaghi’s beneficial ownership of 41,000,000 shares of common stock held by 8412910 Canada Inc.

Item 13. Certain Relationships and Related Transactions and Director Independence

Sale of unregistered securities

On February 9, 2015, a director of the Company delivered $24,467 to purchase 100,000 common shares of the Company issued at $0.25 per share.

On November 5, 2015, the Company issued 1,389,000 common shares valued at $0.25 per common share based on the current stock price in the most recent private placement to former directors of the Company to settle director fees, consultant and employee compensation.

Section 4(2) of the Securities Act

Advances

As of December 31, 2015, the controlling shareholder and Chief Executive Officer of the Company and a company controlled by this same individual had advanced $1,429,055 (as at December 31, 2014 - $1,125,671) to fund the working capital of the Company. The advances are unsecured, non-interest bearing and due on demand.

Shared Services

During 2013, Pacific Mortgage Group Inc. (“PMGI”), charged the Company rent of $89,576 (2012 - $21,608). PMGI and the Company are under common control.

Director Independence

Because our common stock is not currently listed on a national securities exchange, we have used the definition of “independence” of The NASDAQ Stock Market to make this determination. NASDAQ Listing Rule 5605(a)(2) provides that an “independent director” is a person other than an officer or employee of the Company or any other individual having a relationship which, in the opinion of the Company’s board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The NASDAQ listing rules provide that a director cannot be considered independent if:

●

the director is, or at any time during the past three years was, an employee of the company;

●

the director or a family member of the director accepted any compensation from the company in excess of $120,000 during any period of 12 consecutive months within the three years preceding the independence determination (subject to certain exclusions, including, among other things, compensation for board or board committee service);

●

a family member of the director is, or at any time during the past three years was, an executive officer of the company;

●

the director or a family member of the director is a partner in, controlling stockholder of, or an executive officer of an entity to which the company made, or from which the company received, payments in the current or any of the past three fiscal years that exceed 5% of the recipient’s consolidated gross revenue for that year or $200,000, whichever is greater (subject to certain exclusions); or

●

the director or a family member of the director is employed as an executive officer of an entity where, at any time during the past three years, any of the executive officers of the company served on the compensation committee of such other entity; or the director or a family member of the director is a current partner of the company’s outside auditor, or at any time during the past three years was a partner or employee of the company’s outside auditor, and who worked on the company’s audit.

We currently have no independent directors. We do not have an audit committee, compensation committee or nominating committee.

Item 14. Principal Accounting Fees and Services

Audit Fees

For the Company's fiscal year ended December 31, 2015, we had incurred $50,000 for professional services rendered for the audit and reviews of our financial statements.

For the Company's fiscal year ended December 31, 2014, we had incurred $27,500 for professional services rendered for the audit and reviews of our financial statements.

Audit Related Fees

For the Company's years ended December 31, 2015 and 2014, there were no other audit related fees.

Tax Fees

The Company has accrued no expenses in 2015 for professional services rendered for Canadian tax compliance, tax advice, and tax planning.

All Other Fees

None.

Effective May 6, 2003, the Securities and Exchange Commission adopted rules that require that before our auditor is engaged by us to render any auditing or permitted non-audit related service, the engagement be:

- approved by our audit committee; or

- entered into pursuant to pre-approval policies and procedures established by the audit committee, provided the policies and procedures are detailed as to the particular service, the audit committee is informed of each service, and such policies and procedures do not include delegation of the audit committee's responsibilities to management.

We do not have an audit committee. Our board of director pre-approves all services provided by our independent auditors.

The pre-approval process has just been implemented in response to the new rules. Therefore, our Board of Director does not have records of what percentage of the above fees were pre-approved. However, all of the above services and fees were reviewed and approved by the Board of Director either before or after the respective services were rendered.

PART IV

Item 15. Exhibits, Financial Statement Schedules

(a) The following documents are filed as part of this report:

(1)	Financial Statements:

The audited balance sheet of the Company as of December 31, 2015 and December 31, 2014, the related consolidated statements of operations, changes in stockholders’ deficiency and cash flows for the years then ended, the footnotes thereto and the report of McGovern, Hurley, Cunningham, LLP, independent auditors, are filed herewith.

(2)	Financial Schedules:

None.

Financial statement schedules have been omitted because they are either not applicable or the required information is included in the financial statements or notes hereto.

(3)

Exhibits:

The exhibits listed in the accompanying index to exhibits are filed or incorporated by reference as part of this Report.

(a) The following are exhibits to this Report and, if incorporated by reference, we have indicated the document previously filed with the SEC in which the exhibit was included.

Certain of the agreements filed as exhibits to this Report contain representations and warranties by the parties to the agreements that have been made solely for the benefit of the parties to the agreement. These representations and warranties:

●

may have been qualified by disclosures that were made to the other parties in connection with the negotiation of the agreements, which disclosures are not necessarily reflected in the agreements;

●

may apply standards of materiality that differ from those of a reasonable investor; and

●

were made only as of specified dates contained in the agreements and are subject to subsequent developments and changed circumstances.

Accordingly, these representations and warranties may not describe the actual state of affairs as of the date that these representations and warranties were made or at any other time. Investors should not rely on them as statements of fact.

The following documents are included as exhibits to this report pursuant to Item 601 of Regulation S-K.

Exhibit No.		Description
3.1		Certificate of Incorporation (1)
3.2		First Amendment to Certificate of Incorporation (1)
3.3		Bylaws (1)
10.1		2003 Equity Compensation Plan (1)
14.1		Code of Ethics (2)
10.1		Share Exchange Agreement by and between MortgageBrokers.com Holdings, Inc., MoPals, Inc., Alex Haditaghi, and the MoPals Shareholders dated March 26, 2013. (3)
10.2		Agreement of Sale by and between MortgageBrokers.com Holdings, Inc., MortgageBrokers.com Canada, Inc. and Alex Haditaghi, dated March 26, 2013. (3)
10.3		Private Placement Engagement Letter, dated October 9, 2014 by and among Mopals.com, Inc., Amarok Financial, LLC and Cabrillo Broker, LLC. (4)
10.4		Stock Purchase Agreement with Kuusamo Capital, Ltd., dated July 27, 2015. (5)
10.5		Stock Purchase Agreement with Vito Galloro, dated September 3, 2015. (5)
31.1		Certification of Principal Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 +		Certification of Principal Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS *		XBRL Instance Document

101.SCH *		XBRL Taxonomy Schema

101.CAL *		XBRL Taxonomy Calculation Linkbase

101.DEF *		XBRL Taxonomy Definition Linkbase

101.LAB *		XBRL Taxonomy Label Linkbase

101.PRE *		XBRL Taxonomy Presentation Linkbase

	(1)	Filed as an exhibit on Form SB-2 with the Securities and Exchange Commission on June 2, 2003.

	(2)	Filed as an exhibit on Form 10-KSB with the Securities and Exchange Commission on March 31, 2005.

	(3)	Filed as an exhibit on Current Report to Form 8-K with the Securities and Exchange Commission on March 26, 2013.

	(4)	Filed as an exhibit on Current Report to Form 8-K with the Securities and Exchange Commission on October 14, 2014.

	(5)	Filed as an exhibit on Current Report to Form 8-K with the Securities and Exchange Commission on September 11, 2015.

+ In accordance with SEC Release 33-8238, Exhibit 32.1 is being furnished and not filed.

* Furnished herewith.

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, there unto duly authorized.

	MOPALS.COM, INC.

	By:	/s/ Alex Haditaghi
		Alex Haditaghi
		President and Chief Financial Officer

		Dated: April 27, 2016

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

NAME	TITLE	DATE

/s/ Alex Haditaghi	President (Duly authorized Principal Executive Officer, Principal Financial Officer and Chairman of the Board of Directors)	April 27, 2016
Alex Haditaghi

MOPALS.COM, INC.

AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2015 AND 2014

AUDITED

MOPALS.COM, INC. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2015 AND 2014

CONTENTS

Report of Independent Registered Public Accounting Firm	F-2

Consolidated Balance Sheets	F-3

Consolidated Statements of Operations and Comprehensive Loss	F-4

Consolidated Statements of Cash Flows	F-5

Consolidated Statements of Stockholders' Deficit	F- 6 to F-7

Notes to Consolidated Financial Statements	F-8 to F-16

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and
Stockholders of Mopals.com, Inc.

We have audited the accompanying consolidated balance sheets of Mopals.com, Inc. as of December 31, 2015 and 2014, and the related consolidated statements of operations and comprehensive loss, cash flows and stockholders’ deficit for each of the years in the two year period ended December 31, 2015. Mopals.com, Inc.’s management is responsible for these consolidated financial statements. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to examine management’s assertion about the effectiveness of Mopals.com, Inc’s internal control over financial reporting as of December 31, 2015 and, accordingly, we do not express an opinion thereon. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Mopals.com, Inc. as of December 31, 2015 and 2014, and the results of its operations and its cash flows for each of the years in the two year period ended December 31, 2015, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

			McGOVERN, HURLEY, CUNNINGHAM, LLP

			Chartered Accountants Licensed Public Accountants

TORONTO, Canada
April 26, 2016

F-2

MOPALS.COM, INC.

CONSOLIDATED BALANCE SHEETS

	December 31,			December 31,
	2015			2014
ASSETS
Cash	$	6,079		$	143,482
Prepaid & Other Assets (Note 4)		295,253			243,964
Total Current Assets		301,332			387,446

Equipment, net (Note 5)		16,768			32,713
Total Assets	$	318,100		$	420,159

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Accounts Payable & Accrued Liabilities		231,726			255,078
Employee Tax Deductions Payable		832,831			500,139
MoCoins™ Liability		2,644			1,855
Share Based Accrual		14,924			14,924
Loans from Shareholder (Note 6)		1,429,055			1,125,671
Total Current Liabilities	$	2,511,180		$	1,897,667

Commitments & Contingencies (Note 7)

Capital Stock; par value $0.0001, 100,000,000 shares authorized, 52,200,700 shares issued and outstanding on December 31, 2015 (2014 – 45,804,884) (Note 8)		5,220			4,580
Shares Subscribed (Note 9)		-			1,503,775
Share Subscriptions Receivable (Note 9)		-			(1,503,775	)
Shares to be Issued (Note 8(d))		-			300
Additional Paid In Capital		3,469,078			2,376,105
Deficit		(6,147,574	)		(3,998,186	)
Foreign Currency Translation		480,196			139,693
Total Stockholders’ Deficit	$	(2,193,080	)	$	(1,477,508	)

Total Liabilities and Stockholders’ Deficit	$	318,100		$	420,159
Going Concern (Note 2)

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

F-3

MOPALS.COM, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

	For the Year Ended			For the Year Ended
	December 31, 2015			December 31, 2014

EXPENSES
Salaries, Consultants & Contractors		1,199,834			1,355,922
General & Administrative Expenses		386,814			367,613
Occupancy Costs		132,132			141,022
Share Based Compensation (Note 10)		414,877			418,827
Depreciation		15,731			10,350
Total Operating Expense		2,149,388			2,293,734

Loss from Operations		(2,149,388	)		(2,293,734	)

Other Income		-			149,980
Net Loss		(2,149,388	)		(2,143,754	)

Foreign currency translation adjustment, net of taxes		(340,503	)		(85,634	)
Other Comprehensive Income		(340,503	)		(85,634	)

Total Comprehensive Loss		(1,808,885	)		(2,058,120	)

Loss per common share (Note 11):
Basic:
Net (Loss) from operations		(0.04	)		(0.05	)
Net (Loss) per common share		(0.04	)		(0.05	)
Diluted:
Net (Loss) from operations		(0.04	)		(0.05	)
Net (Loss) per common share		(0.04	)		(0.05	)

Weighted Average Number of Shares Outstanding - Basic During the Year		47,733,425			45,684,825

Weighted Average Number of Shares Outstanding - Diluted During the Year		47,733,425			45,684,825

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

F-4

MOPALS.COM, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the Year Ended			For the Year Ended
	December 31, 2015			December 31, 2014
Cash Flows used in Operating Activities
Net (Loss)	$	(2,149,388	)	$	(2,143,754	)
Adjustments to reconcile net (loss) income to net cash from operating activities:
Depreciation		15,731			10,350
Stock-based compensation expense		414,877			418,827
Increase (Decrease) in net assets:
Increase in Prepaids & Other Assets		(74,131	)		34,168
Increase in MoCoins™ liability		1,411			1,707
Increase in Accounts Payable & Accrued Liabilities and employee tax deductions payable		461,304			574,088
Net Cash Flows used in Operating Activities		(1,330,196	)		(1,104,614	)

Cash Flows from Financing Activities
Shares Issued		201			10
Shares to be issued		-			100
Additional Paid In Capital		452,970			249,715
Increase in Shareholders’ Loan		526,932			473,038
Net Cash Flows from Financing Activities		980,103			722,863

Cash Flows used in Investing Activities
Purchases of Equipment		(3,883	)		(1,768	)
Sale of Equipment		-			381
Net Cash Flows used in Investing Activities		(3,883	)		(1,387	)

Net Cash Flows		(353,976	)		(383,138	)

Effects of Exchange Rate on Cash		216,573			88,970

Cash and Cash Equivalents – Beginning of Year		143,482			437,650
Cash and Cash Equivalents – End of Year	$	6,079		$	143,482


Supplemental Cash Flow Information
Interest Paid	$	-		$	-
Income Taxes Paid		-			-
Shares issued for rent deposit		-			62,500

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

F-5

MOPALS.COM, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

																		Accumulated
					Shares					Share			Additional					other		Total
	Common Stock				to be		Shares			Subscriptions			Paid in		Accumulated			Comprehensive		Shareholders
	Shares		Amount		Issued		Subscribed			Receivable			Capital		Deficit			Income		Deficit

Balance, January 1, 2014		45,448,993	$	4,545	$	200	$	1,530,250		$	(1,530,250	)	$	1,585,192	$	(1,854,432	)	$	54,059	$	(210,436	)

Issuance of shares to landlord (Note 8)		250,000		25		-		-			-			62,475		-			-		62,500

Shares subscribed (Note 8)		105,891		10		-		(26,475	)		26,475			26,465		-			-		26,475

Shares to be issued (Note 8)		-		-		100		-			-			223,250		-			-		223,350

Shares granted to employees (Note 10)		-		-		-		-			-			7,808		-			-		7,808

Issuance of stock options (Note 10)		-		-		-		-			-			470,915		-			-		470,915

Foreign currency translation		-		-		-		-			-			-		-			85,634		85,634

Net Loss				-		-		-			-			-		(2,143,754	)		-		(2, 143,754)

Balance, December 31, 2014		45,804,884	$	4,580	$	300	$	1,503,775		$	(1,503,775	)	$	2,376,105	$	(3,998,186	)	$	139,693	$	(1,477,508	)

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

F-6

MOPALS.COM, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

																				Accumulated
					Shares						Share			Additional						other		Total
	Common Stock				to be			Shares			Subscriptions			Paid in			Accumulated			Comprehensive		Shareholders
	Shares		Amount		Issued			Subscribed			Receivable			Capital			Deficit			Income		Deficit

Balance, January 1, 2015		45,804,884	$	4,580	$	300		$	1,503,775		$	(1,503,775	)	$	2,376,105		$	(3,998,186	)	$	139,693	$	(1,477,508	)

Shares subscribed (Note 8)		1,406,816		141		-			-			-			351,030			-			-		351,171

Stock options exercised (Note 8)		600,000		60		-			-			-			179,940			-			-		180,000

Shares to be issued (Note 8)		3,000,000		300		(300	)		-			-			-			-			-		-

Shares granted to employee (Note 10)		-		-		-			-			-			269,639			-			-		75,978

Options forfeited (Note 10)		-		-		-			-			-			(54,747	)		-			-		(54,747	)

Shares granted to employees, consultants and directors (Note 10)		1,389,000		139		-			-			-			347,111			-			-		347,250

Write off of shares subscription receivable (Note 9)		-		-		-			(1,503,775	)		1,503,775			-			-			-		-

Foreign currency translation		-		-		-			-			-			-			-			340,503		340,503

Net Loss				-		-			-			-			-			(2,149,388	)		-		(2,149,388	)

Balance, December 31, 2015		52,200,700	$	5,220	$	-		$	-		$	-		$	3,469,078		$	(6,147,574	)	$	480,196	$	(2,193,080	)

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

F-7

MOPALS.COM, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2015 and 2014

1.	NATURE OF OPERATIONS AND ORGANIZATION

Nature of Operations

Mopals, Inc. ("Mopals" or the “Company”) was incorporated August 7, 2012 and was organized under the laws of the State of Nevada.

Mopals’ operations are presently conducted through the Company’s wholly owned subsidiary, Mopals Canada Inc. (an Ontario, Canada company). The planned operations of the Company consist of becoming a social media rewards platform in Canada and the United States.

On March 26, 2013, (the “Closing Date”), MortgageBrokers.com Holdings, Inc. (“MBKR”) entered into a share exchange agreement (the “Exchange Agreement”) by and among (i) MBKR; (ii) MoPals, Inc., a Nevada corporation (“MoPals (Nevada)”); (iii) Alex Haditaghi (“Company Principal Shareholder”); and (iv) the shareholders of MoPals (Nevada) (“MoPals Nevada Shareholders”). Pursuant to the terms of the Exchange Agreement, MBKR acquired 100% of the issued and outstanding equity securities of MoPals (Nevada) in exchange for the issuance of 50,000,000 shares of MBKR’s common stock, par value $0.0001 per share (each a “Share” and collectively, the “Common Stock”)(the “Share Exchange”). On March 26, 2013, the Company filed articles of amendment with the State of Delaware changing the name of our Company to MoPals.com, Inc.

Immediately prior to and concurrent with execution of the Share Exchange, MBKR entered into a certain Agreement of Sale dated March 26, 2013 (the “Agreement of Sale”) pursuant to which the Company transferred to MortgageBrokers.com Canada Inc., a Canada Corporation, all of the Company’s equity interest in the Company’s mortgage brokerage business and MortgageBrokers.com Canada Inc. agreed to assume any and all liabilities associated with the Company’s mortgage brokers business, including, but not limited to the commitments, liabilities and contingent liabilities, effective immediately prior to closing of the Share Exchange. Pursuant to the Agreement of Sale, the MBKR Principal Shareholder forfeited all rights to any monies owed to the Company Principal Shareholder by the Company associated with a shareholder loan of approximately $25,000 (the “Spin Out and Cancellation.”)

The Company’s activities are subject to significant risks and uncertainties, including failing to secure additional funding to operationalize the Company’s current technology before another company develops similar technology.

2.	GOING CONCERN

These financial statements have been prepared assuming the Company will continue on a going-concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. The Company is in the development stage and has not yet realized profitable operations and has relied on non-operational sources to fund operations. The Company has suffered recurring losses and additional future losses are anticipated as the Company has not yet been able to generate revenue. The Company has incurred losses since inception and the ability of the Company to continue as a going-concern depends upon its ability to develop profitable operations and to continue to raise adequate financing. Accumulated losses from inception to December 31, 2015 total $6,147,574 (2014 - $3,998,186) and the Company has a working capital deficiency of $2,209,848 (2014 - $1,510,221). In order for the Company to meet its liabilities as they come due and to continue its operations, the Company is solely dependent upon its ability to generate such financing. The Company will continue to seek additional forms of debt or equity financing, but it cannot provide assurances that it will be successful in doing so. These circumstances raise substantial doubt as to the ability of the Company to meet its obligations as they come due and accordingly, the appropriateness of the use of accounting principles applicable to a going concern. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company isunable to continue as a going concern. Such adjustments could be material.

3.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting policies of the Company are in accordance with accounting principles generally accepted in the United States of America. Presented below are those policies considered particularly significant:

Basis of Consolidation and Presentation

The accompanying consolidated financial statements include the accounts of the Company, and its wholly-owned subsidiaries, Mopals, Inc. and Mopals Canada Inc. All inter-company transactions and balances have been eliminated upon consolidation.

F-8

MOPALS.COM, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2015 and 2014

3.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Method of Accounting

The Company maintains its books and prepares its financial statements on the accrual basis of accounting.

Cash and Cash Equivalents

The Company maintains cash and cash equivalents at financial institutions which may exceed federally insured amounts.

Comprehensive Income or Loss

The Company adopted ASC 220-10, which establishes standards for reporting and presentation of comprehensive income and its components in a full set of financial statements. Comprehensive income is presented in the statements of stockholders’ deficit, and consists of foreign currency translation adjustments. ASU 2011-05 requires the presentation of other comprehensive income to be in a single, continuous statement or in two separate, but consecutive statements. The Company presents in a single, continuous statement.

Earnings (Loss) Per Share

The Company accounts for earnings (loss) per share pursuant to ASC 260-10-05, Earnings per Share, which requires disclosure on the financial statements of "basic" and "diluted" earnings (loss) per share. Basic earnings (loss) per share are computed by dividing net income (loss) by the weighted average number of common stock outstanding for the period. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common stock outstanding plus common stock equivalents (if dilutive) related to stock options and warrants for each period. There were no dilutive financial instruments for the years ending December 31, 2015 and 2014.

Financial Instruments

In accordance with ASC 825-10-50, “Disclosures About Fair Value of Financial Instruments" ("SFAS No. 107"), the estimated fair value of financial instruments has been determined by the Company using available market information and valuation methodologies. Considerable judgment is required in estimating fair value. Accordingly, the estimates may not be indicative of the amounts the Company could realize in a current market exchange. As of December 31, 2015, the carrying values of accounts payable and accrued liabilities, employee tax deductions payable and loans from shareholder approximate the fair value attainable because of the short-term maturity of these instruments.

In accordance with ASC 820-10, “Defining Fair Value Measurement”, the Company adopted the standard which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements.

F-9

MOPALS.COM, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2015 and 2014

3.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Equipment

Equipment is stated at cost. Depreciation is calculated using the following annual rates and methods based on the estimated useful lives of the assets:

	Computer Hardware			30% declining
	Computer Software			30% declining
	Furniture and Equipment			20% declining

Stock-based Compensation

The Company maintains a stock-based compensation plan under which incentive stock options to buy common stock may be granted to directors, officers and employees. Pursuant to ASC 718, the Company recognizes expense for its stock-based compensation based on the fair value of the awards that are granted. The fair values of stock options are estimated at the date of the grant using the Black-Scholes option pricing model, that require the input of highly subjective assumptions. Measured compensation cost is recognized ratably over the vesting period of the related stock-based compensation award. The amount recognized as expense is adjusted to reflect the number of stock options expected to vest. When exercised, stock options are settled through the issuance of common stock and are therefore treated as equity awards. The expected volatility of our common stock is estimated based on the historical performance of the stock.

Income Taxes

The Company accounts for income taxes pursuant to ASC 740-10, “Accounting for Income Taxes.” Deferred tax assets and liabilities are recorded for differences between the financial statements and tax basis of the assets and liabilities as well as the loss carry-forward that will result in taxable or deductible amounts in the future based on enacted tax laws and rates. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is recorded for the amount of income tax payable or refundable for the period increased or decreased by the change in deferred tax assets and liabilities during the year.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. These estimates are reviewed periodically, and, as adjustments become necessary, they are reported in earnings in the period in which they become known. The accounting estimate that requires management’s most significant judgment is the measurement of accrued liabilities and stock based compensation.

Foreign Currency Translation

Exchange differences arising on the translation of non-monetary items carried at fair value are included in profit or loss for the period except for the differences arising on the translation of non-monetary items in respect of which gains and losses are recognized directly in equity. Exchange differences arising from such non-monetary items are also recognized directly in equity. The Company’s functional and presentation currency is the United States Dollar.

F-10

MOPALS.COM, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2015 and 2014

3.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Recent Accounting Pronouncements

The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flow.

4.	PREPAID AND OTHER ASSETS

	2015		2014
Prepaid Assets	$	158,894	$	122,302
Harmonized Sales Tax recoverable		136,359		121,662
Total	$	295,253	$	243,964

The Harmonized Sales Tax (“HST”) is a federal - provincial harmonized sales tax that applies to the supply of most property and services in Canada. Generally, HST registrants must charge and account for the HST on taxable supplies of property and services made in Canada. The HST rate in Ontario is 13%. Registrants collect the HST on certain sales and pay HST on purchases they make to operate their business. They can claim an input tax credit, to recover the HST paid or payable on the purchases they use in their commercial activities.

5.	EQUIPMENT

The net book value of equipment as of December 31, 2015 was as follows:

	Cost		Depreciation		Net Book Value
Computer hardware	$	20,247	$	12,308	$	7,939
Computer Software		23,387		17,936		5,451
Furniture & Equipment		7,225		3,847		3,378
Total	$	50,859	$	34,091	$	16,768

The net book value of equipment as of December 31, 2014 was as follows:

	Cost		Depreciation		Net Book Value
Computer hardware	$	19,961	$	7,437	$	12,524
Computer Software		27,462		13,027		14,435
Furniture & Equipment		8,620		2,866		5,754
Total	$	56,043	$	23,330	$	32,713

Depreciation expense for the years ending December 31, 2015 and 2014 was $15,731 and $10,350, respectively.

F-11

MOPALS.COM, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2015 and 2014

6.	ADVANCES FROM SHAREHOLDER

As of December 31, 2015, the controlling shareholder and Chief Executive Officer of the Company had advanced $1,429,055 (2014 - $1,125,671) to fund the working capital of the Company. The advances are unsecured, non-interest bearing and due on demand.

7.	COMMITMENTS & CONTINGENCIES

On February 10, 2014, the Company entered into a lease agreement for office space. The schedule below outlines the expected remaining lease payments over the life of the lease.

2016	$	127,753
2017	$	130,781
2018	$	44,485

In the normal course of business, the Company becomes involved in various legal actions seeking compensatory and occasionally punitive damages, including actions brought on behalf of various purported classes of claimants and claims relating to employee and third-parties.

8.	CAPITAL STOCK

a) Authorized

100,000,000 Common Shares with a par value of $0.0001.

b) Issued

On February 10, 2014, 250,000 common shares were issued to the landlord as a guarantee for the lease of the premises and valued at $62,500 based on the current stock price on the date of issuance of $0.25. An additional 105,891 common shares were issued against a share subscription at a price of $0.25 per common share during the year ended December 31, 2014. On February 9, 2015, a director of the Company delivered $24,467 to purchase 100,000 common shares of the Company issued at $0.25 per share. On March 9, 2015, a director of the Company delivered $102,000 and settled $78,000 of accrued director fees to exercise 600,000 stock options into common shares of the Company at a weighted average exercise price of $0.30 per share. On July 29, 2015, a private investor delivered $76,704 to purchase 306,816 common shares of the Company issued at $0.25 per share. On September 11, 2015, another private investor delivered $250,000 to purchase 1,000,000 common shares of the Company issued at $0.25 per share. On November 5, 2015, the Company issued 1,389,000 common shares valued at $0.25 per common share based on the current stock price in the most recent private placement to settle director fees, consultant and employee compensation.

F-12

MOPALS.COM, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2015 and 2014

8.	CAPITAL STOCK (continued)

c) Stock Options

In July, 2013, options were issued to three directors who signed Directors Agreements allowing them to purchase 300,000 shares each at a strike price of $0.25 per share in year one, $0.35 in year two, and $0.40 in year three. These were signed on July 1, July 3, and July 6 respectively. On December 7, 2013, an additional director was hired with the same option plan. In February, 2014, options were issued to a landlord allowing them to purchase 250,000 shares at a strike price of $1.00 per share for a period of four years. On October 25, 2014, an additional director was hired and granted stock options allowing him to purchase 400,000 common shares each at a strike price of $0.35 per share in year one, $0.55 in year two, and $0.65 in year three. As of December 31, 2015, 600,000 of these stock options had been exercised. Gross proceeds of $102,000 were received and accrued directors fees of $78,000 were settled for total consideration of $180,000. During the year ended December 31, 2015, 1,300,000 stock options were forfeited due to director resignations. Upon resignation, directors are entitled to exercise vested stock options for a period of twelve months. These option plans also contain options that will be granted in the second and third years of employment with Mopals, the details of the total option plans are outlined below:

2013 Director Agreements

Year	Options		Strike Price
1		1,200,000	$	0.25
2		1,200,000	$	0.35
3		1,200,000	$	0.40

2014 Director Agreement

Year	Options		Strike Price
1		400,000	$	0.35
2		500,000	$	0.55
3		500,000	$	0.65

d) Shares to be issued

On December 3, 2013, investors delivered a total of $498,862 to purchase 2,000,000 common shares of the Company issued at $0.25 per share. On October 30, 2014, a director of the Company delivered $223,350 to purchase 1,000,000 common shares of the Company issued at $0.25 per share. On November 5, 2015, all of the 3,000,000 shares to be issued were granted. As of December 31, 2015, these were no unissued common shares.

F-13

MOPALS.COM, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2015 and 2014

9.	SHARE SUBSCRIPTIONS RECEIVABLE

On December 21, 2012, the Company agreed to issue 9,000,000 shares of the Company to private investors for subscriptions receivable of $2,250,000. On December 31, 2015, the balance of the subscription receivable of $1,503,775 was written off as it was considered not collectable.

10.

STOCK-BASED COMPENSATION

The Company’s Stock Option Plan is currently being established in order to enable the Company to attract and retain the services of highly qualified and experienced directors, officers, employees and consultants, and to give such persons an interest in the success of the Company and its subsidiaries. The options and awards will be granted at the discretion of the Board of Directors. The fair value of each option granted is estimated at the time of grant using the Black-Scholes option pricing model using the following weighted average assumptions:

2014 Options Granted

Fiscal Year ended December 31, 2014

Exercise Price	$	0.44
Risk-free interest rate		0.49	%
Expected term (years)		3.15
Expected volatility		243	%
Expected dividend yield		0	%

During the year ended December 31, 2014, the Company agreed to grant 100,000 common shares to certain employees. These common shares vest over 12 months. These shares were valued at $16,666 based on the current stock price at the date of grant of $0.25 and an estimated forfeiture rate of 33%, of which $7,808 was accrued at December 31, 2014 and recorded as stock based compensation on the consolidated statements of operations.

During the year ended December 31, 2015, the Company agreed to grant 2,109,000 common shares to certain employees. Of these common shares, 675,000 vest over 12 months, 750,000 vest over 18 months and the remaining 684,000 vest immediately. These shares were valued at $527,250 based on the current stock price at the date of grant of $0.25 and an estimate forfeiture rate of 56%, of which $214,947 was accrued at December 31, 2015 and recorded as stock based compensation on the consolidated statements of operations. During the year ended December 31, 2015, 50,000 common shares were issued in accordance with an employment agreement and valued at $12,500.

As at December 31, 2015, the Company had 704,000 (2014 – nil) vested share grants. As at December 31, 2015, the number of unvested share grants expected to vest (including the impact of expected forfeitures) had been estimated at 1,425,000 (2014 – 100,000). As at December 31, 2015, the total fair value of future expense to be recorded in subsequent periods (assuming no forfeiture occurs) is $254,802 (2014 - $17,192). The weighted average time remaining for these share grants to vest is 0.86 years (2014 – 0.5 years).

F-14

MOPALS.COM, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2015 and 2014

10.

STOCK-BASED COMPENSATION (Continued)

All of the director stock options begin vesting immediately over 12 months and expire on the third anniversary of the grant date. The Company granted 1,600,000 stock options to directors in 2014 and 250,000 stock options to the landlord in 2014. The following table summarizes the stock option activities of the Company:

	Number of Options			Weighted Average Exercise Price
Balance, December 31, 2013		1,200,000			0.25
Granted		1,850,000			0.44
Balance, December 31, 2014		3,050,000			0.36
Granted		-			-
Exercised		(600,000	)		0.30
Options Forfeited		(1,300,000	)		0.35
Balance, December 31, 2015		1,150,000			0.41

The Company’s computation of expected volatility for the years ended December 31, 2015 and 2014 is based on the Company’s market close price over the historical period equal to the expected life of the options. The Company’s computation of expected life reflects actual historical exercise activity and assumptions regarding future exercise activity of unexercised, outstanding options.

The Company’s expected dividend yield is 0%, since there is no history of paying dividends and there are no plans to pay dividends. The Company’s risk-free interest rate is the Canadian Treasury Bond rate for the period equal to the expected term.

The total number of options outstanding as at December 31, 2015 was 1,150,000 (2014 – 3,050,000).

As at December 31, 2015, the Company had 1,150,000 (2014 – 1,450,000) vested options. As at December 31, 2015, the number of unvested options expected to vest (including the impact of expected forfeitures) had been estimated at nil (2014 – 1,600,000) with a weighted average contractual life of n/a years (2014 – 3 years) and exercise price of $n/a (2014 - $0.35). As at December 31, 2015, the total fair value of future expense to be recorded in subsequent periods (assuming no forfeiture occurs) is $nil (2014 - $259,253). The weighted average time remaining for these options to vest is n/a years (2014 – 0.67 years).

The Company recognizes compensation expense for the fair values of stock options and shares using the graded vesting method over the requisite service period for the entire award.

F-15

MOPALS.COM, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2015 and 2014

10.

STOCK-BASED COMPENSATION (Continued)

The following table presents information relating to stock options outstanding and exercisable at December 31, 2015.

Options Outstanding					Options Exercisable
Number of Options	Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)
900,000		0.64	$	0.25		900,000	$	0.25		0.64
250,000		2.32		1.00		250,000		1.00		2.32
1,150,000		1.01	$	0.41		1,150,000	$	0.41		1.01

The Company recorded a recovery of ($54,747) in employment expenses for share-based compensation expense as a result of stock option forfeitures and $nil as a prepaid expense related to the deposit on the leased premises for the year ended December 31, 2015 (2014 – expense of $418,827 and $59,802, respectively) with the corresponding credits to Additional Paid in Capital.

11.

LOSS PER SHARE

The Company calculates basic loss per common share using net loss divided by the weighted-average number of common shares outstanding. The Company calculates diluted loss per common share in the same manner as basic, except the Company uses the weighted-average number of diluted common shares outstanding in the denominator, when the stock options and warrants are not anti-dilutive.

	December 31, 2015		December 31, 2014
Weighted average number of common shares outstanding		47,733,425		45,684,825
Weighted-average number of diluted common shares outstanding		47,733,425		45,684,825

12.

INCOME TAXES

The Company accounts for income taxes in accordance with ASC 740-20, (formerly SFAS No. 109). ASC 740-20 prescribes the use of the liability method whereby deferred tax asset and liability account balances are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates. The effects of future changes in tax laws or rates are not anticipated.

Under ASC 740-20 income taxes are recognized for the following: a) amount of tax payable for the current year, and b) deferred tax liabilities and assets for future tax consequences of events that have been recognized differently in the financial statements than for tax purposes.

As of December 31, 2015, the Company did not have any amounts recorded pertaining to uncertain tax positions. Deferred taxes as at December 31, 2015 and 2014 have not been recorded due to the fact that they are fully reserved.

All relevant tax years remain open to examination by the Internal Revenue Service and the Canada Revenue Agency.

13.

RELATED PARTY TRANSACTIONS

During the year ended December 31, 2014, a director of the Company delivered $223,350 to purchase 1,000,000 common shares of the Company issued at $0.25 per share. These common shares were recorded as shares to be issued as at December 31, 2014 and were subsequently issued during the year ended December 31, 2015.

See Notes 6, 8b) and 8d).

F-16

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