0001213900-13-000292.txt : 20130122 0001213900-13-000292.hdr.sgml : 20130121 20130122160541 ACCESSION NUMBER: 0001213900-13-000292 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 12 CONFORMED PERIOD OF REPORT: 20121130 FILED AS OF DATE: 20130122 DATE AS OF CHANGE: 20130122 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Mobile Integrated Systems, Inc. CENTRAL INDEX KEY: 0001464766 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 000000000 STATE OF INCORPORATION: NV FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-53770 FILM NUMBER: 13540375 BUSINESS ADDRESS: STREET 1: 25 ADELAIDE STREET EAST STREET 2: SUITE 502, CITY: TORONTO STATE: A6 ZIP: M5C 3A1 BUSINESS PHONE: 416-479-0880 MAIL ADDRESS: STREET 1: 25 ADELAIDE STREET EAST STREET 2: SUITE 502, CITY: TORONTO STATE: A6 ZIP: M5C 3A1 FORMER COMPANY: FORMER CONFORMED NAME: Loto Inc. DATE OF NAME CHANGE: 20090522 10-Q 1 f10q1112_mobileint.htm QUARTERLY REPORT f10q1112_mobileint.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended November 30, 2012

¨ 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:   000-53770

Mobile Integrated Systems, Inc.
(Exact Name of Registrant as Specified in its Charter)

Nevada
 
27-0156048
(State or other jurisdiction of
 
(IRS Employer
incorporation or organization)
 
Identification No.)

Suite 502, 25 Adelaide Street
Toronto, Ontario, Canada M5C 3A1
 (Address of principal executive offices)

(416) 479-0880
(Registrant’s Telephone Number, Including Area Code)

N/A
(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Sec.323.405 of this chapter) during the preceding 12 months (or shorter period that the registrant was required to submit and post such files).  Yes x   No o
  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer
¨
Accelerated Filer
¨
Non-Accelerated Filer
¨
Smaller reporting company
x
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o    No x

As of November 30, 2012, the Issuer had 163,791,722 shares of its Common Stock outstanding.
 


 
 
 
 
 
TABLE OF CONTENTS

PART I: FINANCIAL INFORMATION
 
   
Item 1: Financial Statements
3
Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operation
11
Item 3: Quantitative and Qualitative Disclosures about Market Risk
15
Item 4: Controls and Procedures
16
   
PART II: OTHER INFORMATION
 
   
Item 1: Legal Proceedings
16
Item 1A: Risk Factors
16
Item 2: Unregistered Sales of Equity Securities and Use of Proceeds
17
Item 3: Defaults Upon Senior Securities
17
Item 4: Mine Safety Disclosures
17
Item 5: Other Information
17
Item 6: Exhibits
18
   
SIGNATURES
19
 
 
2

 
 
PART I FINANCIAL INFORMATION
 
MOBILE INTEGRATED SYSTEMS, INC.
(Formerly known as LOTO INC.)
(A Development Stage Company)

CONSOLIDATED BALANCE SHEET
 
   
November 30,
2012
UNAUDITED
   
May 31,
2012
 
 
             
CURRENT ASSETS:
           
             
Cash
  $ 430,765     $ 30,907  
Accounts receivable
    37,560       27,675  
Prepaid expense
    120,606       -  
TOTAL CURRENT ASSETS
    588,931       58,582  
                 
Note Receivable - Related Party (Note 3)
    301,635       -  
Property and equipment, net
    2,603       5,862  
                 
TOTAL ASSETS
    893,169       64,444  
                 
                 
  LIABILITIES and STOCKHOLDERS' EQUITY (DEFICIENCY)
               
                 
CURRENT LIABILITIES:
               
                 
Accounts payable and accrued expenses
    245,397       199,253  
Accounts payable - related party
    -       10,578  
Notes payable - related party
    -       752,597  
                 
CURRENT LIABILITIES AND TOTAL LIABILITIES
    245,397       962,428  
                 
                 
STOCKHOLDER'S EQUITY (DEFICIENCY):
               
Common stock, par value $0.0001
               
    300,000,000 shares authorized
               
    162,701,722 and 154,133,130 issued and outstanding
               
    as of August 31, 2012 and May 31, 2012
    16,377       15,412  
Additional paid-in capital
    5,431,716       3,185,256  
Other comprehensive loss
    458       1,429  
Accumulated deficit
    (4,800,780 )     (4,100,081 )
                 
TOTAL STOCKHOLDERS' EQUITY (DEFICIENCY)
    647,772       (897,984 )
                 
  TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
  $ 893,169     $ 64,444  
                 
 
See notes to the consolidated financial statements
 
 
3

 
 
MOBILE INTEGRATED SYSTEMS, INC.
(Formerly known as LOTO INC.)
(A Development Stage Company)

CONSOLIDATED STATEMENT OF OPERATIONS
 
   
Three Months Ended
November 30,
 2012
   
Three Months Ended
November 30,
 2011
   
Six Months Ended
November 30,
2012
   
Six Months Ended
November 30,
2011
   
From Inception 
(September 16, 2008) to
November 30,
2012
 
                               
   
UNAUDITED
         
UNAUDITED
         
UNAUDITED
 
                               
REVENUE
                    $ -     $ 78,479  
                                   
EXPENSES
                                 
General and administrative expenses
    302,252       201,620       710,650       396,970       4,851,645  
OPERATING LOSS
    302,252       201,620       710,650       396,970       4,773,166  
                                         
OTHER EXPENSE
                                       
Interest (income) expense, net
    (6,313 )     6,518       1,028       11,283       27,614  
                                         
NET LOSS
  $ (295,939 )   $ (208,138 )   $ (711,678 )   $ (408,253 )   $ (4,800,780 )
                                         
Net loss per common share
  $ (0.00 )   $ (0.01 )   $ (0.00 )   $ (0.01 )        
                                         
Basic and fully diluted weighted average
                                 
common shares outstanding
    163,791,722       31,861,863       163,791,722       34,199,815          
 
See notes to the consolidated financial statements
 
 
4

 
 
MOBILE INTEGRATED SYSTEMS, INC.
(Formerly known as LOTO INC.)
(A Development Stage Company)

CONSOLIDATED STATEMENT OF CASH FLOWS
 
   
For the Six Months Ended
November 30,
2012
   
For the Six Months Ended
November 30,
2011
   
From Inception 
(September 16, 2008) to
 November 30,
2012
 
                   
                   
OPERATING ACTIVITIES:
                 
Net loss for the period
  $ (711,678 )   $ (408,253 )   $ (4,800,780 )
Adjustments to reconcile net loss to net cash
                       
  used in operating activities:
                       
     Depreciation
    3,259       4,018       28,457  
     Stock based compensation
    59,500       -       826,660  
     Common stock issued for services
    9,833       -       159,833  
     Cancellation of Common stock issued for services
    -       -       (150,000 )
     Accrued Interest
            11,283          
Changes in operating assets and liabilities:
                       
     Other current assets
    (130,491 )     99,401       (158,166 )
     Accounts payable and accrued liabilities
    46,144       (24,617 )     322,329  
                         
NET CASH USED IN OPERATING ACTIVITIES
    (760,993 )     (318,168 )     (3,809,227 )
                         
                         
INVESTING ACTIVITIES:
                       
     Acquisition of property & equipment
    -       -       (31,060 )
                         
NET CASH USED IN INVESTING ACTIVITIES
    -       -       (31,060 )
                         
                         
FINANCING ACTIVITIES:
                       
                         
    Cancellation of shares
    -       -       102,312  
    Issuance (net of redemption) of common stock
    1,410,785       203,144       4,032,757  
(Repayment )or Proceeds from related party loans
    (248,963 )     201,880       135,524  
                         
NET CASH PROVIDED FROM INVESTING ACTIVITIES
    1,161,822       405,024       4,270,593  
 
                       
     Effect of exchange rates on cash
    (971 )     4,726       459  
                         
              201,880       -  
                         
INCREASE IN CASH
    399,858       91,582       430,765  
                         
CASH - BEGINNING OF PERIOD
    30,907       153,162       -  
                         
CASH - END OF PERIOD
  $ 430,765     $ 244,744     $ 430,765  
                         
                         
Supplemental disclousure of cash flow Information:
                 
     Conversion of related party debt to equity
  $ 662,423                  
                         
 
See notes to the consolidated financial statements
 
 
5

 
 
MOBILE INTEGRATED SYSTEMS, INC.
(formerly known as Loto Inc. – A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
November 30, 2012

NOTE 1 – BASIS OF PRESENTATION

The attached consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. As a result, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. The Company believes that the disclosures made are adequate to make the information presented not misleading. The consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Form 10-K as filed with the Securities and Exchange Commission on or about October 18, 2012.

NOTE 2 – PREPAID EXPENSE
 
The prepaid expenses relate to (i) Harmonized Sales Taxes paid in Ontario, Canada; and (ii) the payment of shares with an amortized value of  $10,000 to 2238646 Ontario Inc., the Company’s majority shareholder, pursuant to a Corporate Development Agreement dated as of November 1, 2012.
 
NOTE 3 – NOTE RECEIVABLE – RELATED PARTY

Pursuant to an agreement with the Company and Quantitative Alpha Trading, Inc. (“QAT”), a related party, the Company has agreed to provide a bridge loan to QAT for up to $800,000.  The bridge loan carries an annual interest rate of 12% and is secured by first fixed and specific mortgage on the QAT assets. On October 16, 2012, the Company provided an additional $170,000 to QAT under this agreement. As of November 30, 2012, the balance due from QAT was $301,635, made up of $295,000 principal and $6,635acccrued interest.

NOTE 4 – ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
 
   
November 30,
2012
   
May 31,
2012
 
Programming and systems testing
  $ 107,303     $ 102,302  
Legal
    116,522       33,000  
Audit
            33,400  
Rent
            5,356  
Consulting
    21,793       22,171  
General and administrative
    2,737       3,024  
Total
  $ 248,355     $ 199,253  

 
6

 
 
NOTE 5 – NOTES PAYABLE - RELATED PARTIES

   
November 30,
2012
   
May 31,
 2012
 
Note payable on demand bearing interest at Prime+2% per annum
  $     $ 382,122  
Note payable due September 19, 2012 bearing interest at 5% per annum collateralized by certain assets of the Company
          220,301  
Note payable due on demand bearing interest at Prime+2%
          90,174  
Note payable due on demand and is non-interest bearing
          60,000  
    $     $ 752,597  
 
NOTE 6 – STOCKHOLDERS’ DEFICIENCY

In July 2010, the Company issued 1,000,000 shares of the Company’s common stock to a consulting company in consideration for assistance in listing on the Frankfurt Stock Exchange.  The shares were valued at $0.75 per share, the effective last sales price of the Company’s common stock. On February 3, 2011, the consulting company agreed to return the 1,000,000 shares to the Company as a result of its inability to perform all of the services contracted.

Between August 2009 and May 2010, the Company sold an aggregate of 2,864,815 shares of our restricted common stock in a private placement with thirteen accredited investors at a purchase price of $0.30 per share for an aggregate purchase price of $859,443. On September 1, 2010, the Board of Directors determined that it was in the Company’s best interests to sell additional shares at a purchase price of $0.15 per share, and to modify the sales price paid by previous investors to reflect a new sales price of $0.15 per share. The aggregate number of shares sold and issued pursuant to this private placement was correspondingly increased by 2,864,815 shares, with no additional proceeds associated with such transaction.

During October and November 2010, the Company sold 7,000,000 shares of common stock at a price of $0.15 per share for a total purchase price of $1,050,000. Such shares were sold in private placements to foreign persons in reliance on the exemption from securities registration under Section 4(2) of the U.S. Securities Act of 1933, as amended (the “Securities Act”), and Regulation S promulgated thereunder.  Such shares are restricted from trading, and may only be sold pursuant to a valid registration statement or pursuant to an exemption from the Securities Act.

On November 30, 2010 pursuant to an agreement to cancel common shares two shareholders cancelled a total of 6,062,960 common shares.  These shares were subsequently reinstated.

On June 16, 2011 the Company entered into a Share Cancellation Agreement with one of the founders and his company, A Few Brilliant Minds Inc. (AFBMI). The founder desired to pursue other business interests and submitted his resignation from the Company's Board together and tendered for cancellation 97,000,000 common shares owned by AFBMI.

In addition, the Company also entered into Share Cancellation Agreements dated June 20, 2011 with two shareholders to cancel 24,000,000 common shares in return for the original purchase price of $48,000.

On November 18, 2011, the Company sold 1,833,500 shares of the Company’s common stock to nine purchasers (the “Purchasers”) for a purchase price of $0.15 per share.  In addition, each of the Purchasers has received Warrants to purchase such number of shares of the Company’s common stock equal to the number of shares purchased by such shareholder, at an exercise price of $0.20 per share.  The Company paid a finder’s fee in connection with these sales of the Company’s securities, consisting of (i) $22,002; and (ii) Warrants to purchase 146,680 shares of the Company’s common stock, at an exercise price of $0.20 per share.
 
 
7

 
 
On March 7, 2012, a shareholder of the Company tendered for cancellation 10,500,000 shares of the Company’s common stock, pursuant to an agreement with the Company.  The Company did not receive any payment for the cancellation of such shares.

On March 27, 2012, the Company affected a 5-for-1 stock split of the stock of the Company.

On April 9, 2012, the Company sold 670,000 shares of the Company’s common stock to three purchasers (the “Purchasers”) for a purchase price of $0.15 per share.  In addition, each of the Purchasers has received Warrants to purchase such number of shares of the Company’s common stock equal to the number of shares purchased by such shareholder, at an exercise price of $0.20 per share.  The Company paid a finder’s fee in connection with these sales of the Company’s securities, consisting of (i) $8,040; and (ii) Warrants to purchase 53,600 shares of the Company’s common stock, at an exercise price of $0.20 per share.

On May 10, 2012, the Company issued 100,000 shares of the Company’s common stock to a director of the company as part of an exercise of options for a strike price of $0.15 per share.

On May 22, 2012, the Company sold 300,000 shares of the Company’s common stock to two purchasers (the “Purchasers”) for a purchase price of $0.15 per share.  In addition, each of the Purchasers has received Warrants to purchase such number of shares of the Company’s common stock equal to the number of shares purchased by such shareholder, at an exercise price of $0.20 per share.  The Company paid a finder’s fee in connection with these sales of the Company’s securities, consisting of (i) $3,600; and (ii) Warrants to purchase 24,000 shares of the Company’s common stock, at an exercise price of $0.20 per share.

On June 27, 2012, pursuant to an agreement with a shareholder, 1,753,500 shares of the Company’s common stock were cancelled.

On August 31, 2012, the Company issued 6,350,000 shares of the Company’s common stock as part of a private placement and related to warrant exercises. All of the shares were issued at a price of $0.20 per share.

On August 31, 2012, the Company eliminated all of its outstanding long-term liabilities with the issuance of 3,972,092 shares of common stock of the Company at a price of $0.15 per share to convert $662,423 in outstanding debt.

During the period ended November 30, 2012, the Company issued 550,000 shares of common stock sold in a private placement for $.20 per share.

In addition, during the period ended November 30, 2012, the Company issued 540,000 shares of common stock to 2238646 Ontario Inc., the Company’s majority shareholder, pursuant to a Corporate Development Agreement dated as of November 1, 2012 (the “Corporate Development Agreement”).  2238646 Ontario Inc. will provide the Company with consulting and other advisory services for a term of three years, with additional one year renewals if neither party gives notice of termination.  Pursuant to the Corporate Development Agreement, the Company has agreed to issue an additional 540,000 shares on each of November 1, 2013 and November 13, 2014.

NOTE 7 – COMMITMENTS

The Company is obligated under a lease agreement to lease the premises at 25 Adelaide Street in Toronto, Ontario, Canada until November 29, 2013. The minimum payments due are as follows:

2012 – $ 30,260
2013 – $ 66,572
 
 
8

 
 
NOTE 8 – SUBSEQUENT EVENTS

Management has evaluated events occurring after the date of these financial statements through the date these financial statements were issued.  There were no material subsequent events as of that date other than disclosed below.

On December 13, 2012, the Company entered into a marketing services agreement (the “Marketing Services Agreement”) with Capital C Partners LP (“Capital C”) to provide web development, web based marketing, press management, marketing materials development and other related services to the Company.

The Marketing Services Agreement may be terminated by either the Company or Capital C on sixty (60) days notice. The Company has agreed to pay Capital C fees on a project by project basis at an hourly rate, pursuant to an agreed schedule, plus a monthly retainer of $20,000 CND.  The Company anticipates that the total amount due pursuant to the Marketing Services Agreement shall be approximately $500,000- $550,000 CND.  Fifty Percent (50%) of all fees under the Marketing Services Agreement will be invoiced on commencement of a project, with the remainder of the fees due upon completion of the project.
 
 
9

 
 
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OFOPERATIONS

Forward Looking Statements

The following discussion of the financial condition and results of operations of the Company should be read in conjunction with the financial statements and the related notes thereto included elsewhere in this Report.  Some of the statements contained in this Report that are not historical facts are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which can be identified by the use of terminology such as "estimates," "projects," "plans," "believes," "expects," "anticipates," "intends," or the negative or other variations, or by discussions of strategy that involve risks and uncertainties. However, as the Company intends to issue “penny stock,” as such term is defined in Rule 3a51-1 promulgated under the Exchange Act, the Company is ineligible to rely on these safe harbor provisions. We urge you to be cautious of the forward-looking statements.  All such forward-looking statements, which are contained in this Report, reflect our current beliefs with respect to future events and involve known and unknown risks, uncertainties and other factors affecting our operations, market growth, services, products and licenses. No assurances can be given regarding the achievement of future results, as actual results may differ materially as a result of the risks we face, and actual events may differ from the assumptions underlying the statements that have been made regarding anticipated events. Factors that may cause actual results, our performance or achievements, or industry results, to differ materially from those contemplated by such forward-looking statements include without limitation:

 
Our ability to attract and retain management, and to integrate and maintain technical information and management information systems;
 
Our ability to raise capital when needed and on acceptable terms and conditions;
 
The intensity of competition;
 
General economic conditions; and
 
Changes in government regulations.

The Company disclaims any obligation to update any such factors or to announce publicly the results of any revisions of the forward-looking statements contained or incorporated by reference herein to reflect future events or developments.

Unless otherwise provided in this Report, references to the "Company," the "Registrant," the "Issuer," "we," "us," and "our" refer to Mobile Integrated Systems, Inc.

Critical Accounting Policies and Estimates

The Management's Discussion and Analysis of Financial Condition and Results of Operations section discusses our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments, including those related to revenue recognition, accrued expenses, financing operations, and contingencies and litigation. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different conditions.
 
 
10

 

Plan of Operation

The Company is a development stage software company that operates horizontally across a variety of industry sectors.  The Company’s initial business model was to develop software for use in lotteries; in August of 2012, the Company commenced plans to enter into new businesses.  The Company develops and operates proprietary mobile software platforms in the areas of lottery, financial services and parking, and intends to expand into other verticals.  Mobile phones offer advanced capabilities, often with personal computer-like functionality, such as e-mail, Internet access and other applications that can be used as infrastructure by many industries.

The Company’s different forms of software are at different levels of development.  To date, the Company has had insignificant revenues, all of which were in the lottery field. The Company's proprietary technology for facilitating the purchase of lottery tickets addresses all elements of lottery play, including secure player registration and authorization, number selection, settlement, winning number notification and other direct-to-customer marketing opportunities.   It is the Company’s intention to license and operate our lottery software to governments and other lottery operators as a primary source of revenue. The Company has no intention to become a lottery operator nor does it intend to enter the gaming space. The Company’s lottery software application has not yet been utilized by any lottery operator.

The Company's parking software will be sold to parking site operators to offer mobile payment systems to their users.  This line of business is in the prototype phase.

On August 21, 2012, the Company and Quantitative Alpha Trading, Inc. announced the execution of a definitive agreement dated August 20, 2012, providing that the Company will acquire all of the outstanding common shares of Quantitative Alpha Trading, Inc. on the basis of 0.2222 of a share of Mobile Integrated Systems’ common stock in exchange for each outstanding share of Quantitative Alpha Trading.  The parties also announced the execution of a perpetual worldwide licensing and commercialization agreement to develop and market all of QAT’s products.  The software to be acquired through such acquisition will be sold to securities traders.  The parties have agreed to extend the outside closing date of MIBI's acquisition of QAT to June 30, 2013.  This extended period allows the companies time to focus their combined resources on the continued integration of the businesses and the further development and commercialization of QAT's software.

During the period covered by this Report, the Company also entered into a corporate development agreement with 2238646 Ontario Inc. to assist the Company in developing its international business and to consult the Company on financing, marketing, sales, and strategic business planning.

The Company now owns and operates several development stage properties under the brand “MOBI”.  All products we develop and sell now benefit from the brand “MOBI” appended to the name of the underlying business.  For instance our Lottery product is called MobiLotto.  Our mobile parking solution is called MobiPark.  Our financial software, acquired recently, will be branded MobiInvest.  Mobile Integrated Systems, Inc. will continue to develop or acquire new families of products to ensure that we have a diversified portfolio of software families.  We will also ensure that the products that we build or acquire have common underlying requirements so as to benefit from economies of scale which will ultimately increase our profit margins.

It is anticipated that each of the business owned by the Company will generate revenue through software licensing.  The Company intends to offer two forms of licensing.  One is transaction based and the other is based on the number of users.

Results of Operations

The Company was incorporated in the state of Nevada on April 22, 2009, and our wholly-owned subsidiary Mobilotto was incorporated in the province of Ontario in September 2008.  On May 13, 2009, the Company acquired all of the issued and outstanding shares of Mobilotto (which included all intellectual property of the mobile lottery purchase system).  We have concentrated our efforts on developing our business strategy and obtaining private financing.  We have working models ready for demonstration and we have commenced our initial sales and marketing program.  We have had early stage meetings with some lottery operators in Canada and we are actively pursuing other opportunities in Canada and elsewhere.  Our mobile lottery software application has now been developed and tested, but has not yet been utilized by any lottery operators and we have not yet derived any revenues from our technology.  In addition, we are now expanding into additional fields.  These new areas will require additional financial and management resources in order to develop.  There is no guarantee that we will be able to successfully launch our technology or that it will generate sufficient revenue to sustain our operations.

 
11

 
 
Assets and Liabilities

As of November 30, 2012, the Company had total assets of $893,169, including total current assets of $588,931.  The Company’s total current assets consisted of cash in the amount of $430,765, prepaid expenses in the amount of $120,606.  The Company’s total assets as of November 30, 2012 included a related party loan receivable in the amount of $301,635.  In addition, as of November 30, 2012, the Company owned net property and equipment in the amount of $2,603.  The Company’s total assets and total current assets have increased since November 30, 2011, at which time the Company’s total assets were $64,444, including total current assets of $58,582.  The Company’s total current assets as of November 30, 2011 consisted of cash in the amount of $30,907 and accounts receivable in the amount of $27,675.  In addition, as of May 31, 2012, the Company owned net property and equipment in the amount of $5,862.

On July 30, 2012, one of the Company’s note holders cancelled its note to the Company for $90,714, including both principal and interest.

In addition, during the period ended November 30, 2012, the Company eliminated all of its outstanding long-term liabilities in the amount of $760,323, including accrued interest of $7,726, through a combination of debt conversion and debt cancellation, with the issuance of 3,972,092 shares of common stock of the Company.

The Company’s current liabilities and total liabilities decreased to $245,397 at November 30, 2012 from $962,428 at May 31, 2012.  The Company’s current liabilities and total liabilities at November 30, 2012 included accounts payable and accrued liabilities of $245,397.  At November 30, 2011, the Company’s current liabilities and total liabilities included accounts payable and accrued liabilities of $199,253, accounts payable to a related party of $10,578 and notes payable to a related party of $752,597.

Liquidity and Capital Resources

As of November 30, 2012, the Company had $430,765 in cash, which was a decrease from $813,883 at August 31, 2012. As a development stage company, we have limited capital and limited operating resources.

During the period ended November 30, 2012, the Company raised $977,208 pursuant to the closing of a private placement of 6,900,000 shares of Company common stock at a purchase price of $0.20 per share. The proceeds of the private placement will be used for general corporate purposes.  From inception through November 30, 2012, the Company raised $5,040,811 in initial funding and private placements of restricted common stock. The funds raised in the prior private placements will not be sufficient to meet our projected cash flow deficits from operations or to fund the development of our technology and products.

The cash on hand in our bank accounts is not sufficient to maintain our operations. We estimate our total overhead, costs and expenses related to completion of a commercially deployable version of our mobile lottery application, obtaining certification of our system by the Gaming Standards Association (GSA), and initiating full rollout of our products to our target markets over the next twelve months will be approximately $1,000,000.  We need additional amounts of funding in order to expand our operations.

Management believes that without obtaining additional financing or developing an ongoing source of revenue, we will not launch successfully. Although we have actively been pursuing new business opportunities, we cannot give assurance that we will succeed in this endeavor, or be able to enter into necessary agreements to pursue our business on terms favorable to us. Should we be unable to generate additional revenues or raise additional capital, we could eventually be forced to cease business activities altogether.
 
 
12

 
 
Three Months and Six Months Ended November 30, 2012 and November 30, 2011

Income

We are a development stage company and now also a deployment stage company. For the three and six months ending November 30, 2012 the Company had revenue of $0. To date, the Company has received $78,479 in revenue, all of which was received in the fiscal year ended May 31, 2012.  We have concentrated our efforts on developing our business strategy and obtaining financing.  We have working models ready for demonstration and we have commenced our initial sales and marketing program.  We have had early stage meetings with some lottery operators in Canada and we are actively pursuing other opportunities in Canada and elsewhere. Our mobile lottery software application has not yet been utilized by any lottery operators and we have not yet derived any revenues from our technology.  There is no guarantee that we will be able to successfully develop and launch our technology or that it will generate sufficient revenue to sustain our operations.
  
Expenses
 
During the three months ended November 30, 2012, we incurred $302,252 in general and administrative expenses.  This was an increase from the three month period ended November 30, 2011 during which we incurred general and administrative expenses of $201,620.  During the six months ended November 30, 2012, we incurred $710,650 in general and administrative expenses.  This was an increase from the six month period ended November 30, 2011 during which we incurred general and administrative expenses of $396,970.  Since the Company’s inception on September 16, 2008, the Company has incurred general and administrative expenses of $4,851,645.

Net Loss

During the three months ended November 30, 2012, we incurred $295,939 in net losses, consisting of $302,252 in operating loss and interest income of $6,313.  This net loss was an increase from the three month period ended November 30, 2011 during which we incurred net losses of $208,138, consisting of $201,620 and interest expenses of $6,518.  During the six months ended November 30, 2012, we incurred $711,678 in net losses, consisting of $710,650 in operating losses and $1,028 in interest expenses.  This net loss was an increase from the six month period ended November 30, 2011 during which we incurred net losses of $408,253, consisting of $396,970 in operating losses and $11,283 in interest expenses. Since the Company’s inception on September 16, 2008, the Company has incurred net losses of $4,800,780, consisting of operating losses of $4,773,166 and $27,614 in interest expenses.

Our Plan of Operation for the Next Twelve Months

Our path to revenue is based upon completing the following work plan over the next twelve months:

1.        Completion of the patent and trademark registrations.

2.        Adherence to our Marketing Plan (see section below).

3.        Completion of the systems development to ensure we have a robust product and all the required modules for end-to-end lottery play (including player registration, numbers selection, authorization, settlement, and player communication / marketing).  
 
4.        As opportunities arise, partner with existing suppliers of games to lottery operators in order to mobilize existing lottery games.

5.        Remain flexible in our business model to operate as a lottery retailer/distributor, license the technology for use, or sell the technology for use in a pre-defined jurisdiction, preferably in that order, as conditions deem appropriate.

 
13

 
 
6.        Complete appropriate certifications in promising jurisdictions to become a lottery retailer/distributor and/or supplier to specific lottery operators.

7.        Partner with the emerging internet gaming suppliers and new lottery licensees to mobilize their offerings.

8.        Proactively communicate and present our product and brand to prospective lottery operators, and understand their needs for new sources of revenue.

Marketing Plan

Our marketing plan is a combination of branding, communication, presentations, and meetings with potential customers, public messaging, and partnership initiatives with other corporate entities. Specifically, our plan calls for:

1.
Commercialization of the exclusive licence agreement signed with Quantitative Alpha Trading Inc.
2.
Face to face sales to potential corporate customers.
3.
Internet sales through search engine optimization (SEO), banner ads and press work.
4.
Implement a demand generation engine that will provide the technical infrastructure to sell our software direct to users on the www.mobileintegratedsystems.com website.

Working Capital
 
While we do not have in-place working capital to fund normal business activities, we are actively seeking private financing in the amount of $1,000,000.
 
Contractual Obligations and Other Commercial Commitments
 
The sole on-going commitment we have is for the rental of our head office, which runs to the end of November 2013 at a rate that approximates $6,100 per month.

Employees

We currently have three full-time employees, one full-time contractor and one part-time contractor.  We expect to hire additional full time employees in the coming year as necessities dictate.  We have engaged additional consultants for accounting, legal, and other part-time and occasional services.

Officers and Directors

Donald Ziraldo, a member of the Company’s Board of Directors, has resigned from the Company’s audit committee, but shall continue to serve as a director of the Company.

Off-Balance Sheet Arrangements

There are no off balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Subsequent Events

On December 13, 2012, the Company entered into a marketing services agreement (the “Marketing Services Agreement”) with Capital C Partners LP (“Capital C”) to provide web development, web based marketing, press management, marketing materials development and other related services to the Company.

The Marketing Services Agreement may be terminated by either the Company or Capital C on sixty (60) days notice. The Company has agreed to pay Capital C fees on a project by project basis at an hourly rate, pursuant to an agreed schedule, plus a monthly retainer of $20,000 CND.  The Company anticipates that the total amount due pursuant to the Marketing Services Agreement shall be approximately $500,000- $550,000 CND.  Fifty Percent (50%) of all fees under the Marketing Services Agreement will be invoiced on commencement of a project, with the remainder of the fees due upon completion of the project.
 
During the month of December, 2012, the Company loaned QAT an additional $50,000.

Item 3.   Qualitative and Quantitative Disclosure About Market Risk

Not applicable
 
 
14

 
 
Item 4.    Controls and Procedures

Management's Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process, under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer, designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external purposes in accordance with United States generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that:

Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and the Board of Directors; and

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

Our management conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). That evaluation disclosed that the Company has material defects in its internal control over financial reporting. Specifically they determined that there is a lack of expertise in U.S. GAAP among the Company’s management personnel. They also determined that the size of the Company’s accounting staff and low number of supervisory personnel prevented an appropriate segregation of accounting functions. Accordingly, based on this evaluation, management concluded that the Company’s internal control over financial reporting was not effective as of November 30, 2012.

Subsequent to the period covered by this Report, the Company initiated new procedures regarding internal controls over financial reporting and disclosure controls and procedures.  The Company anticipates that such controls and procedures will be effective in the future for purposes of recording, processing, summarizing, and reporting information required to be disclosed, within the time periods specified in the SEC's rules and forms.  We intend to further upgrade the amount of financial and personnel resources we spend on our accounting function as our operations develop and expand. 

Changes in Internal Control over Financial Reporting

There was no change in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) during the quarter ended November 30, 2012 that has materially affected or is reasonably likely to materially affect the Company’s internal control over financial reporting.

PART II. 
OTHER INFORMATION

ITEM 1. 
LEGAL PROCEEDINGS
 
The Company is not, and has not been during the period covered by this Quarterly Report, a party to any legal proceedings.
 
ITEM 1A. 
RISK FACTORS
 
Not Applicable.
 
15

 
 
ITEM 2: 
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 
During the period ended November 30, 2012, the Company issued 550,000 shares of common stock sold in a private placement for $.20 per share.  Such shares were sold to foreign persons in reliance on the exemption from securities registration under Section 4(2) of the U.S. Securities Act of 1933, as amended and Regulation S promulgated thereunder.

In addition, during the period ended November 30, 2012, the Company issued 540,000 shares of common stock to 2238646 Ontario Inc., the Company’s majority shareholder, pursuant to a Corporate Development Agreement dated as of November 1, 2012 (the “Corporate Development Agreement”).  2238646 Ontario Inc. will provide the Company with consulting and other advisory services for a term of three years, with additional one year renewals if neither party gives notice of termination.  Pursuant to the Corporate Development Agreement, the Company has agreed to issue an additional 540,000 shares on each of November 1, 2013 and November 13, 2014. The shares issued pursuant to the Corporate Development Agreement were issued to a foreign person in reliance on the exemption from securities registration under Section 4(2) of the U.S. Securities Act of 1933, as amended and Regulation S promulgated thereunder.

ITEM 3: 
DEFAULTS UPON SENIOR SECURITIES

Not Applicable.
 
ITEM 4: 
MINE SAFETY DISCLOSURES
 
Not Applicable.
 
ITEM 5: 
OTHER INFORMATION

Not Applicable.
 
 
16

 
  
ITEM 6.  
 
EXHIBITS
     
Exhibit
 
Description
     
Exhibit 10.28
 
Corporate Development Agreement, by and between the Company and 2238646 Ontario Inc., dated as of November 1, 2012.
     
Exhibit 31.1
 
Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
     
Exhibit 31.2
 
Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
     
Exhibit 32.1
 
Certification of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
     
Exhibit 32.2
 
Certification of the 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 Extension Schema
     
101.CAL
 
XBRL Taxonomy Extension Calculation Linkbase
     
101.DEF
 
XBRL Taxonomy Extension Definition Linkbase
     
101.LAB
 
XBRL Taxonomy Extension Label Linkbase
     
101.PRE
 
XBRL Taxonomy Extension Presentation Linkbase
 
 
17

 
  
SIGNATURES

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

 
MOBILE INTEGRATED SYSTEMS, INC.
     
 
By:
/s/ Murray Simser
 
   
Murray Simser
 
   
Chief Executive Officer (Principal Executive Officer)
 
       
 
By:
/s/ Emlyn David  
 
Name: 
Emlyn David
 
 
Title:
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
 
 
Dated:      January 22, 2013
 
 
18
EX-10.28 2 f10q1112ex10xxviii_mobileint.htm CORPORATE DEVELOPMENT AGREEMENT Unassociated Document
Exhibit 10.28
Mobile Integrated Systems, Inc.
Corporate Development Agreement
 
THIS CORPORATE DEVELOPMENT AGREEMENT (the “Agreement”) is made as of the date set forth on the signature page hereto, by and between
 
2238646 Ontario Inc., (“BarrsCo”), and Mobile Integrated Systems, Inc. (the “Company”).
 
WHEREAS, BarrsCo, by and through its officers, employees, agents, representatives and affiliates, has expertise in the areas of international corporate management, financing, marketing, sales consulting, strategic business planning, enhancing shareholder value, investment structuring, asset acquisition and disposition, and other matters relating to global corporate development; and
 
WHEREAS, the Company desires to avail itself of the expertise of BarrsCo in the aforesaid areas.
 
NOW, THEREFORE, in consideration of the foregoing recitals and the covenants and conditions herein set forth, which the parties expressly acknowledge and agree is adequate and sufficient in all respects, the parties hereto agree as follows:
 
1.            Appointment.
 
The Company hereby appoints BarrsCo to render the advisory and consulting services described herein for the term of this Agreement.
 
2.            Services.
 
(a)           During the term of this Agreement, BarrsCo shall render to the Company, by and through such of BarrsCo’s officers, directors, employees, agents, representatives and affiliates, as BarrsCo in its sole discretion shall designate, the following consulting and other advisory services for the Company (collectively, the “Advisory Services”):  developing strategic plans for operations, corporate management, strategic planning, domestic and international marketing and sales, financial advice, recommendations of candidates for senior management positions of the Company and its subsidiaries, prospective strategic alliance partners, acquisition growth plans, prospective merger and acquisition candidates, development of value propositions for the Company, analyzing financial implications of potential transactions, advising on negotiations regarding terms and conditions of various transactions, advising in respect of due diligence matters and due diligence processes, introductions to prospective customers, selection of investment bankers or other financial advisors or consultants, and advice with respect to the capital structure of the Company, equity participation plans, employee benefit plans and other incentive arrangements for certain key executives of the Company.  All Advisory Services to be rendered hereunder shall be made by BarrsCo solely on a discretionary basis as determined in its sole discretion and solely within the scope of its knowledge and abilities. Nothing herein shall be construed to deem BarrsCo to be acting as a fiduciary to the Company or its shareholders, or as an officer or director of the Company, and nothing herein shall be deemed to grant BarrsCo any authority to act on behalf of the Company or to supersede the authority of any and all of the officers and directors of the Company.  The officers and directors of the Company shall at all times retain sole authority to accept or decline such advice offered by BarrsCo and only the officers and directors may bind the Company in respect of any advice given by BarrsCo.
 
 
 

 
 
Corporate Development Agreement

 
(b)           BarrsCo may also form time to time render advisory services in respect of investment banking and finance consulting to the Company (collectively, the “Special Services”).  The scope of BarrsCo Special Services shall include services rendered only outside of the United States and only to non-U.S. persons.  The Special Services may include, without limitation, introductions to qualified and registered investment banking, financial advisory or any other third-party service providers in connection with any public or private financing of the Company, advice regarding mergers, acquisitions and divestitures by the Company or any of its subsidiaries, the acquisition or disposition of assets of the Company, by merger, consolidation, amalgamation or otherwise, involving stock or assets, and/or the acquisition or disposition of any subsidiary or division of the Company, and/or any and all financing or transactions involving assets or liabilities of the Company.  All Advisory Services and Special Services are collectively referred to herein as the “Services.”
 
(c)           The Company agrees to undertake any and all of its own due diligence with respect to any and all recommendations made by BarrsCo.  No reliance shall be made upon BarrsCo as having satisfied separate and independent due diligence obligations of the Company with respect to any and all transactional matters involving the Company.
 
3.            Fees.
 
(a)           In consideration of the rendering of the Advisory Services contemplated by Section 2(a) hereof, the Company agrees to pay to BarrsCo (i) a services fee of 540,000 shares per year, payable each year for the period commencing as of November 1, 2012 and continuing until the third anniversary thereof (the “Advisory Services Fee”). The Advisory Services Fee and all other payments hereunder, except out-of-pocket expenses, shall be delivered in the form of stock certificate.  The annual Advisory Services Fee payment will be made in advance on the anniversary of the agreement.  The first payment will be made concurrently with the signature of this agreement.  The second payment will be made on the first anniversary of this agreement.  The third payment will be made on the second anniversary of this agreement.
 
4.            Out-of-Pocket Expenses
 
In addition to the compensation payable to BarrsCo pursuant to Section 3 hereof, the Company shall, at the request of BarrsCo, upon presentation of reasonable receipts and documentation evidencing Out-of-Pocket Expenses, pay directly, or reimburse BarrsCo for, its reasonable Out-of-Pocket Expenses. For the purposes of this Agreement, the term “Out-of-Pocket Expenses” shall mean the amounts actually paid by BarrsCo in cash in connection with its performance of the Services, including, without limitation, reasonable (i) fees and disbursements of any independent auditors, outside legal counsel, consultants, third-party investment bankers, financial advisors and other independent professionals, organizations and consultants; (ii) costs of any outside services or independent contractors such as financial printers, couriers, business publications or similar services and (iii) transportation, per diem, telephone calls, word processing expenses or any similar expense not associated with its ordinary operations. All reimbursements for Out-of-Pocket Expenses shall be made promptly upon or as soon as practicable after presentation by BarrsCo to the Company of the statement in connection therewith.  Any and all Out-of-Pocket Expenses shall require pre-approval in writing of a duly authorized officer of the Company.
 
 
2

 
 
Corporate Development Agreement

 
5.            Indemnification
 
The Company will indemnify and hold harmless BarrsCo and its officers, directors, employees, agents, shareholders, attorneys, accountants, representatives and their respective affiliates (each being an “Indemnified Party”) from and against any and all losses, costs, expenses, claims, damages and liabilities (the “Liabilities”) to which such Indemnified Party may become subject under any applicable law, or any claim made by any third party, or otherwise, to the extent they relate to or arise out of the performance of the Services contemplated by this Agreement or the engagement of BarrsCo pursuant to, and the performance by BarrsCo of the Services contemplated by, this Agreement. The Company will reimburse any Indemnified Party for all reasonable costs and expenses (including reasonable attorneys’ fees and expenses) as they are incurred in connection with the investigation of, preparation for or defense of any pending or threatened claim for which the Indemnified Party would be entitled to indemnification under the terms of the previous sentence, or any action or proceeding arising therefrom, whether or not such Indemnified Party is a party hereto, provided that, subject to the following sentence, the Company shall be entitled to assume the defense thereof at its own expense, with counsel satisfactory to such Indemnified Party in its reasonable judgment. Any Indemnified Party may, at its own expense, retain separate counsel to participate in such defense, and in any action, claim or proceeding in which the Company, on the one hand, and an Indemnified Party, on the other hand, is, or is reasonably likely to become, a party, such Indemnified Party shall have the right to employ separate counsel at the Company’s expense and to control its own defense of such action, claim or proceeding if, in the reasonable opinion of counsel to such Indemnified Party, a conflict or potential conflict exists between the Company, on the one hand, and such Indemnified Party, on the other hand, that would make such separate representation advisable. The Company agrees that it will not, without the prior written consent of the applicable Indemnified Party, settle, compromise or consent to the entry of any judgment in any pending or threatened claim, action or proceeding relating to the matters contemplated hereby (if any Indemnified Party is a party thereto or has been actually threatened to be made a party thereto) unless such settlement, compromise or consent includes an unconditional release of the applicable Indemnified Party and each other Indemnified Party from all liability arising or that may arise out of such claim, action or proceeding. Provided that the Company is not in breach of its indemnification obligations hereunder, no Indemnified Party shall settle or compromise any claim subject to indemnification hereunder without the consent of the Company. The Company will not be liable under the foregoing indemnification provision to the extent that any loss, claim, damage, liability, cost or expense is determined by a court, in a final judgment from which no further appeal may be taken, to have resulted solely from the gross negligence or willful misconduct of BarrsCo. If an Indemnified Party is reimbursed hereunder for any expenses, such reimbursement of expenses shall be refunded to the extent it is finally judicially determined that the Liabilities in question resulted solely from the gross negligence or willful misconduct of BarrsCo.
 
 
3

 
 
Corporate Development Agreement

 
6.            Term
 
This Agreement shall be in effect on the date hereof and shall continue until the third anniversary of the date hereof (the “Initial Term”).  This Agreement shall automatically renew on each anniversary thereafter and continue and remain in effect for additional one year periods (each a “Renewal Term”) unless either party gives not less than ninety (90) days’ advance written notice.  This Agreement may be terminated at any time upon mutual consent of the parties.  This Agreement may be terminated by the Company upon determination of (i) any act of fraud or dishonesty, willful misconduct or gross negligence by BarrsCo in connection with its obligations under this Agreement (ii) breach of any contractual duty of BarrsCo to the Company under this Agreement.  This Agreement may be terminated by BarrsCo in the event of any non-performance of the duties and obligations of the Company.  This Agreement may be terminated at any time for any reason by BarrsCo upon not less than thirty (30) days’ advance written notice to the Company.  Any and all provisions of this Agreement pertaining to any and all outstanding unpaid compensation due and payable to BarrsCo shall survive termination of this Agreement and the provisions of Sections 5, 7 and 8 and otherwise as the context so requires shall survive the termination of this Agreement.
 
7.            Other Activities
 
Nothing herein shall in any way preclude BarrsCo or its officers, directors, employees, agents, shareholders, attorneys, accountants, representatives and their respective affiliates from engaging in any and all other business activities or from performing services for its or their own respective account or for the account of others, including for companies that may do business with the Company or have interests which are substantially similar to the business conducted by the Company.  Where BarrsCo has an ownership interest in any companies or organizations with whom the Company directly engages in business relationships (“Interested Transactions”) BarrsCo undertakes to disclose such relationships in writing to the corporate governance officer of the Company or another duly authorized officer of the Company.  Nothing herein shall be construed as an undertaking of unique or exclusive services of BarrsCo solely on behalf of the Company.  The Company expressly waives any and all actual or potential conflicts with respect to BarrsCo’s past, present or future relationships of any nature or kind with any and all Company officers, directors, shareholders, agents, accountants, counsel or third parties and their respective affiliates with whom BarrsCo has, or has had, dealings or business relationships of any nature or kind.
 
8.            General.
 
(a)           No amendment or waiver of any provision of this Agreement, or consent to any departure by either party from any such provision, shall be effective unless the same shall be in writing and signed by the parties to this Agreement, and, in any case, such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.
 
 
4

 
 
Corporate Development Agreement

 
(b)           This Agreement and the rights of the parties hereunder may not be assigned without the prior written consent of the parties hereto; provided, however, that BarrsCo may assign or transfer its duties or interests hereunder to a BarrsCo affiliate at the sole discretion of BarrsCo.  Subject to the foregoing, this Agreement shall inure to the benefit of, and be binding upon, BarrsCo and the Company (including any and all present and future subsidiaries of the Company that are not signatories hereto) and their respective successors and assigns.
 
(c)           Any and all notices hereunder shall, in the absence of receipted hand delivery, be deemed duly given upon confirmation of receipt or refusal of delivery, if the same shall be sent by registered or certified mail, return receipt requested, or by internationally recognized courier and the mailing date shall be deemed the date from which all time periods pertaining to a date of notice shall run. Notices shall be addressed to the parties at the registered address of record and may be changed upon Notice as provided herein to the other party regarding such change of address.
 
(d)           This Agreement shall constitute the entire agreement between the parties with respect to the subject matter hereof, and shall supersede all previous oral and written (and all contemporaneous oral) negotiations, commitments, agreements and understandings relating hereto.
 
(e)           All controversies arising out of or in connection with this Agreement shall be finally settled pursuant to binding arbitration under the Rules of Arbitration of the Chamber of Commerce of Toronto by a single arbitrator appointed and conducted in accordance with the Rules of Arbitration. The Arbitration shall be conducted in English by a single arbitrator appointed by mutual consent of the Parties within 10 days of demand, or absent such mutual consent, such disputes shall be finally resolved by arbitration pursuant to the National Arbitration Rules of the ADR Institute of Canada, Inc.  Any award, verdict or settlement issued under such arbitration may be entered by any Party for order of enforcement by any court of competent jurisdiction.  The prevailing Party shall be reimbursed for all fees, costs, expenses and disbursements by the non-prevailing Party.
 
(f)           All information provided by the Company to be relied upon by BarrsCo will be, when and as delivered to BarrsCo, and on the closing date of all transactions, complete and correct in all material respects and will not knowingly contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading.  The Company shall advise BarrsCo immediately of the occurrence of any event or circumstance that results in any Company document containing untrue statement of a material fact or omitting to state a material fact required to be stated therein or necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading, and shall furnish to BarrsCo copies of amended or supplemented documents that correct such statement or omission in such quantities as BarrsCo may from time to time reasonably request. All financial or other projections of the Company will be prepared in good faith on the basis of reasonable assumptions. The Company acknowledges that BarrsCo (i) will be using and relying on all Company information without independently verification of the same, (ii) does not assume responsibility for the accuracy or completeness of such information; (iii) will not make any appraisal of any assets of the Company or (iv) will not render any fairness opinions.  Except as otherwise provided herein, nothing herein shall require BarrsCo to deliver to the Company any reports, memoranda or other documentation of any nature or kind except as determined by BarrsCo.
 
 
5

 
 
Corporate Development Agreement

 
(g)           The Company has full corporate power and authority to execute and deliver this Agreement on behalf of itself and its affiliates and to perform its obligations hereunder, and all consents, authorizations, approvals and orders required in connection with the execution, delivery and performance hereof have been obtained. This Company represents and warrants to the BarrsCo that the Agreement is a valid and binding obligation of the Company, enforceable in accordance with its terms and that the execution, delivery and performance of this Agreement by the Company and the BarrsCo will not conflict with, result in a breach of any of the terms or provisions of or constitute a violation or a default under any laws, rules or regulations applicable to the Company and the BarrsCo pertaining to the subject matter herein or under any material agreement or instrument to which the Company is a party or by which the Company is bound. Nothing herein shall be construed as an undertaking of unique or exclusive services of the BarrsCo solely on behalf of the Company.  The Company agrees to undertake any and all of its own due diligence with respect to any and all prospective Investors and proposed corporate development activities.  The Company expressly waives any and all actual or potential conflicts with respect to the Primes past, present or future relationships of any nature or kind with any Investors or their respective affiliates.
 
(h)           BarrsCo shall be entitled to fully rely upon all documents and materials provided by the Company as true and correct in all respects and the Company shall indemnify and hold harmless BarrsCo and its officers, directors, employees and agents for any and all losses incurred by BarrsCo as a result of any material misstatement or omission in such marketing materials, which losses shall include, without limitation, all fees, costs, expenses and disbursements of counsel defending BarrsCo against claims for such losses as well as enforcement of this Agreement.  The officers and directors of the Company shall independently review and confirm the validity of all facts in all materials prepared by BarrsCo.
 
(i)           No advice rendered by BarrsCo pursuant to this Agreement may be disclosed publicly in any manner without BarrsCo’s prior written approval, except as may be required by law, regulation or court order but subject to the limitation below.  If the Company is required or reasonably expects to be required to disclose any advice, the Company shall provide BarrsCo with prompt notice thereof so that BarrsCo may seek a protective order or other appropriate remedy and take reasonable efforts to assure that all of such advice disclosed will be covered by such order or other remedy.  Whether or not such a protective order or other remedy is obtained, the Company will and will cause its affiliates to disclose only that portion of such advice that the Company is so required to disclose.
 
(j)           The Company shall not directly or indirectly or through any third party take any action to circumvent this Agreement or the rights of BarrsCo set forth herein.  The Company undertakes and promises that it will not circumvent the BarrsCo by dealing directly with any prospective counterparties introduced by the BarrsCo to the Company, unless authorized by the BarrsCo in writing to deal directly with them.
 
 
6

 
 
Corporate Development Agreement

 
(k)           If any provision(s) of this Agreement or the application thereof to any person or circumstance shall be invalid or unenforceable to any extent, the remainder of this Agreement and the application of such provisions to other persons or circumstances shall not be affected thereby and shall be enforced to the fullest extent permitted by law.
 
(l)            Numbered and titled article and section headings and defined terms are for convenience only and shall not be construed as amplifying or limiting any of the provisions of this Agreement.  This Agreement has been fully negotiated and jointly drafted by the parties and nothing herein shall be construed against either party as the draftsperson thereof.
 
(m)          The waiver by any party of any breach of this Agreement shall not operate as or be construed to be a waiver by such party of any subsequent breach.
 
(n)          This Agreement may be executed by the parties to this Agreement in separate counterparts, each of which when so executed shall be deemed to be an original and both of which taken together shall constitute one and the same instrument and Agreement.  This Agreement may be executed and delivered via facsimile or any other means of electronic delivery which shall be fully binding upon the parties to the same and full extent as the original exemplar thereof.
 
(o)          The Confidentiality Agreement attached hereto as Exhibit A is hereby incorporated herein by reference thereto and BarrsCo hereby agrees to be bound all terms and conditions of such Confidentiality Agreement.
 
[Signature Page Follows]
 
 
7

 
 
Corporate Development Agreement

 
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered as of this 1st day of November 2012 by their duly authorized officers or agents as set forth below.
 
2238646 Ontario Inc.
 
By:
/s/ J. Randall Barrs  
  Name: J. Randall Barrs  
 
Title:   President
 
 
Address for Notices:
 
 
Mobile Integrated Systems, Inc.
 
By:
/s/ Murray P.J.B. Simser  
 
Name: Murray P.J.B. Simser
 
 
Title:   Chief Executive Officer
 
 
Address for Notices:
 
Suite 502, 25 Adelaide Street
 
Toronto, Ontario, Canada M5C 3A1
 
 
8

 
 
Exhibit A
 
Mobile Integrated Systems, Inc.
Confidentiality & Nondisclosure Agreement

This Confidentiality & Nondisclosure Agreement (the "Agreement"), effective as of ___________________ _____, 20___ (the "Effective Date"), by and between Mobile Integrated Systems, Inc., a Nevada corporation (“Disclosing Party”), having a principle business address as set forth below, and 2238646 Ontario Inc. (“Receiving Party”), having the principal address as set forth below, is hereby entered into to protect the Disclosing Party’s Confidential Information (as defined herein).
 
1.     Definitions and Exclusions. "Party" means each of Disclosing Party or Receiving Party individually and "Parties" means Disclosing Party and Receiving Party collectively. “Confidential Information” means any and all information of, or concerning, the Disclosing Party obtained by the Receiving Party or to which the Receiving Party has direct or indirect access, whether marked as confidential or not, in any and all forms, formats or media, including information obtained from representatives of the Disclosing Party, oral or other transitory means, unless expressly and specifically indicated at the time of disclosure to be non-confidential. Confidential Information shall include but is not limited to: all corporate matters, all business matters and operations (past, present, future, contingent or otherwise), all plans, all negotiations, all legal matters, all regulatory matters, all trade secrets, know-how, computer programs, mathematical formulae, theories, techniques, procedures, processes, strategies, methods, systems, designs, the identity of, and all information concerning, financiers, partners, joint-ventures, alliances, affiliates, customers, suppliers, service providers, consultants, advisers, development models and information, methods and sources, marketing and sales information, all information received from others that the Disclosing Party is obligated to treat as confidential or proprietary, and any and all other information that together with all other available information would be material to the Disclosing Party. Notwithstanding the foregoing, Confidential Information shall exclude information that: (i) was lawfully in the public domain at the time of disclosure; (ii) lawfully becomes part of the public domain after disclosure through no fault of the Receiving Party; (iii) was already in the Receiving Party’s possession free of any confidentiality obligation at the time of disclosure; (iv) was received after disclosure to the Receiving Party from a third party who had a lawful right to disclose such information without any obligation to restrict its further use or disclosure; or (v) was developed by the Receiving Party independently of, and without exposure to, the Disclosing Party’s Confidential Information. All Confidential Information is provided “as is.” Disclosing Party makes no warranties, express, implied or otherwise, regarding the accuracy, completeness or performance or its Confidential Information.
   3.     Term. The term of this Agreement shall commence upon the Effective Date and survive without termination. At any time, upon the written request of the Disclosing Party, the Receiving Party shall promptly return to the Disclosing Party or destroy all documents and other tangible materials representing or embodying the Disclosing Party’s Confidential Information and all copies thereof, and shall immediately cease any further use thereof. Upon written request, Receiving Party shall furnish a written officer’s certificate attesting to the complete return or destruction of the Disclosing Party’s Confidential Information.

4.     Assignment; Amendments; Waivers. Neither Party may assign, transfer, delegate or sublicense any rights, duties or obligations under this Agreement without the prior written consent of the other Party.  Any and all amendments and waivers of this Agreement must be in writing signed by the Parties hereto.

5.     Notices. All notices required under this Agreement shall be in writing and shall be delivered by personal delivery, electronic mail, facsimile transmission or by certified or registered mail, return receipt requested, and shall be deemed given upon personal delivery, five days after deposit in the mail, or upon acknowledgment of receipt of electronic transmission. Notices shall be sent to the respective address set forth below or to such other address as such Party may specify in writing as delivered to the other Party in the aforementioned manner.  The Receiving Party shall immediately notify the Disclosing Party upon discovery of any loss or unauthorized disclosure of the Disclosing Party’s Confidential Information.

6.     Irreparable Harm. Each Party acknowledges that breach of this Agreement will cause irreparable harm to the Disclosing Party and hereby agrees that the Disclosing Party shall be entitled to seek injunctive relief under this Agreement for such breach or threatened breach, as well as such further relief as may be granted by a court of competent jurisdiction. Neither Party may raise any defense based on adequate remedy at law.
     
2.     Nature of Obligation and Limited Right to Use. Except as otherwise approved in writing, Receiving Party shall: (a) hold and maintain the Disclosing Party’s Confidential Information in strict confidence, exercising no less than commercially reasonable care to the full extent necessary to assure protection of sensitive material non-public confidential information; (b) not disclose such Confidential Information to any third party unless authorized by the Disclosing Party to do so with such further reasonable action taken for the protection of such Confidential Information; and (c) use the Confidential Information for no purpose other than evaluating or pursuing an investment or other business relationship with the Disclosing Party or acting on behalf of the Disclosing Party in an authorized manner. Nothing herein shall be construed as granting any property, license or use of rights to any Confidential Information, and Receiving Party shall not make, have made, offer, market, use or sell the Confidential Information or any product or service using, incorporating, relying on, or derived from the Disclosing Party’s Confidential Information except to the extent expressly authorized by the Disclosing Party or an authorized representative of the Disclosing Party. Receiving Party shall not communicate any information to the Disclosing Party in violation of such Party’s confidentiality obligations to a third party, and Receiving Party shall not knowingly communicate any information to the Disclosing Party in violation of the proprietary rights of any third party.  Confidential Information may not be reproduced unless authorized in writing.
  7.     Dispute Resolution. All controversies arising out of or in connection with this Agreement shall be finally settled pursuant to binding arbitration under the Rules of Arbitration of the Chamber of Commerce of Toronto by a single arbitrator appointed and conducted in accordance with the Rules of Arbitration.  The award of arbitration may be entered as judgment in any court of competent jurisdiction.

8.     General. This Agreement is the entire and complete Agreement between the Parties with respect to the subject matter hereof and supersedes any prior or contemporaneous agreements or understandings between the Parties, whether written or oral, and may not be modified in any way unless by means of written addendum, signed and dated by duly authorized representatives of both Parties. If any portion of this Agreement is found to be invalid or unenforceable, the remaining provisions shall remain in effect and the Parties shall immediately begin negotiations to replace any invalid or unenforceable portions that are essential parts of this Agreement. If either Party fails to enforce any right or remedy hereunder, such failure shall not be deemed a waiver of such right or remedy.
 
THE RECEIVING PARTY WILL NOT TRADE IN THE SECURITIES OF DISCLOSING PARTY OR ANY OTHER PUBLIC COMPANY WITH RESPECT TO CONFIDENTIAL INFORMATION, OR PERMIT OR CAUSE ANY PERSON TO TRADE ANY SECURITIES ON BEHALF OF THE RECEIVING PARTY, DURING ANY PERIOD IN WHICH THE RECEIVING PARTY IS IN POSSESSION OF CONFIDENTIAL INFORMATION OR ANY OTHER MATERIAL NON-PUBLIC INFORMATION CONCERNING THE DISCLOSING PARTY OR ITS SUBSIDIARIES OR AFFILIATES.  

In Witness Whereof, the Parties hereto have executed this Agreement on and as of the day and year first above written.
 
Mobile Integrated Systems, Inc.:   Receiving Party: 2238646 Ontario Inc.  
           
By:
/s/ Murray P.J.B. Simser
  By:
/s/ J. Randall Barrs
 
Name:
Murray P.J.B. Simser
 
Name:
J. Randall Barrs
 
Title: 
Chief Executive Officer
 
Title: 
President
 
Address: Suite 502, 25 Adelaide Street, Toronto, Ontario, Canada M5C 3A1   Address:    

 
 9

EX-31.1 3 f10q1112ex31i_mobileint.htm CERTIFICATIONS f10q1112ex31i_mobileint.htm
Exhibit 31.1
OFFICER'S CERTIFICATION PURSUANT TO SECTION 302

I, Murray Simser, certify that:

1.  I have reviewed this quarterly report on Form 10-Q of Mobile Integrated Systems, Inc.;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.  The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)  Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)  Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.  The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

January 22, 2013
 
By:
/s/ Murray Simser
 
 
Name:
Murray Simser
 
 
Title:
Principal Executive Officer
 
 
EX-31.2 4 f10q1112ex31ii_mobileint.htm CERTIFICATIONS f10q1112ex31ii_mobileint.htm
Exhibit 31.2
OFFICER'S CERTIFICATION PURSUANT TO SECTION 302

I, Emlyn David, certify that:

1.  I have reviewed this quarterly report on Form 10-Q of Mobile Integrated Systems, Inc.;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.  The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)  Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)  Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.  The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

January 22, 2013
 
By:
/s/ Emlyn David
 
 
Name:
Emlyn David
 
 
Title:
Principal Financial Officer
 

EX-32.1 5 f10q1112ex32i_mobileint.htm CERTIFICATIONS f10q1112ex32i_mobileint.htm
Exhibit 32.1
CERTIFICATIONS PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Mobile Integrated Systems, Inc. on Form 10-Q for the quarter ended November 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Murray Simser, Principal Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge that:

(1)  The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: January 22, 2013

By:
/s/ Murray Simser
 
 
Name:
Murray Simser
 
 
Title:
Principal Executive Officer
 
 
 
 
 


EX-32.2 6 f10q1112ex32ii_mobileint.htm CERTIFICATIONS f10q1112ex32ii_mobileint.htm
Exhibit 32.2
CERTIFICATIONS PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Mobile Integrated Systems, Inc. on Form 10-Q for the quarter ended November 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Emlyn David, Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge that:

(1)  The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: January 22, 2013

By:
/s/ Emlyn David
 
 
Name:
Emlyn David
 
 
Title:
Principal Financial Officer
 
 
 
 
 


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font-size: 10pt;">The prepaid expenses relate to (i) Harmonized Sales Taxes paid in Ontario, Canada; and (ii) the payment of shares with an amortized value of &#160;$10,000 to 2238646 Ontario Inc., the Company&#8217;s majority shareholder, pursuant to a Corporate Development Agreement dated as of November 1, 2012.</font></div> <div style="text-align: justify; text-indent: 0pt; display: block;">&#160;</div> 301635 3972092 0.15 48000 24000000 301635 662423 662423 <div align="left" style="text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt; font-weight: bold;">NOTE 3 &#8211; NOTE RECEIVABLE &#8211; RELATED PARTY</font></div> <div style="text-indent: 0pt; display: block;">&#160;</div> <div style="text-align: justify; text-indent: 0pt; display: block; margin-left: 0pt; margin-right: 0pt;"><font style="display: inline; font-family: times new roman; font-size: 10pt;">Pursuant to an agreement with the Company and Quantitative Alpha Trading, Inc. 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Accounts Payable and Accrued Liabilities
6 Months Ended
Nov. 30, 2012
Accounts Payable and Accrued Liabilities [Abstract]  
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
NOTE 4 – ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
 
   
November 30,
2012
   
May 31,
2012
 
Programming and systems testing
  $ 107,303     $ 102,302  
Legal
    116,522       33,000  
Audit
            33,400  
Rent
            5,356  
Consulting
    21,793       22,171  
General and administrative
    2,737       3,024  
Total
  $ 248,355     $ 199,253  
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