On June 11, 2015, the holder of the convertible note dated January 31, 2013 elected to convert $600 of accrued interest into 60,000 shares of common stock at a rate of $0.01 per share.
On June 19, 2015, the holder of the convertible note dated January 31, 2013 elected to convert $400 of accrued interest into 40,000 shares of common stock at a rate of $0.01 per share.
On June 25, 2015, the holder of the convertible note dated January 31, 2103 elected to convert the remaining $68,447 of principal and accrued interest into 684,467 shares of common stock at a rate of $0.10 per share.
On July 1, 2015, two holders of the convertible note dated January 31, 2103 elected to convert $1,200 of principal and accrued interest into 120,000 shares of common stock at a rate of $0.01 per share.
On July 10, 2015, the holder of the convertible note dated January 31, 2013 elected to convert $450 of principal and accrued interest into 45,000 shares of common stock at a rate of $0.01 per share.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
On the Move Systems Corp. (“we”, “us”, “our”, “OMVS”, or the “Company”) was incorporated in Nevada on March 25, 2010. We reincorporated into Nevada on February 17, 2015. Our business focus is transportation services. We are currently exploring the on-demand logistics market by developing a network of logistics partnerships. Our year-end is February 28. The company is located at 701 N. Green Valley Parkway, Suite 200, Henderson, NV 89074. Our telephone number is (702) 990-3271.
Critical Accounting Policies
We prepare our Consolidated financial statements in conformity with GAAP, which requires management to make certain estimates and apply judgments. We base our estimates and judgments on historical experience, current trends, and other factors that management believes to be important at the time the condensed Consolidated financial statements are prepared. On a regular basis, we review our accounting policies and how they are applied and disclosed in our condensed Consolidated financial statements.
While we believe that the historical experience, current trends and other factors considered support the preparation of our condensed consolidated financial statements in conformity with GAAP, actual results could differ from our estimates and such differences could be material.
For a full description of our critical accounting policies, please refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report for the year ended February 28, 2015 on Form 10-K.
Results of Operations
Three months ended May 31, 2015 compared to the three months ended May 31, 2014.
Revenue
Revenue increased to $2,250 for the three months ended May 31, 2015, compared to $0 for the three months ended May 31, 2014 due to the commencement of race car advertising sales in June 2014.
Expenses related to joint ventures and other business development agreements
We recognized expenses related to joint ventures and other business development agreements of $0 for the three months ended May 31, 2015, compared to $23,786 during the comparable period of 2013. The decrease is because we have not made additional contribution to our Xperience joint venture this year.
General and Administrative Expenses
We recognized general and administrative expenses in the amount of $151,994 and $198,799 for the three months ended May 31, 2015 and ended 2014, respectively. The decrease was driven by a $55,326 reduction in professional fees, which was offset by small increases in other general and administrative expenses.
Interest Expense
Interest expense increased from $61,900 for the three months ended May 31, 2014 to $187,639 for the three months ended May 31, 2015. Interest expense for the three months ended May 31, 2015 included amortization of discount on convertible notes payable of $147,100, compared to $36,337 for the comparable period of 2014. There was a small $401 increase in interest expense related to our capitalized race car lease. The remaining amount is the result of the Company entering into interest-bearing convertible notes payable.
Net Loss
We incurred a net loss of $337,383 for the three months ended May 31, 2015 as compared to $298,761 for the comparable period of 2014. The decrease in the net loss was primarily the result of the increase in interest expense.
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Liquidity and Capital Resources
At May 31, 2015, we had cash on hand of $7,154. The company has negative working capital of $1,118,189 . Net cash used in operating activities for the three months ended May 31, 2015 was $59,532. Cash on hand is adequate to fund our operations for less than one month. We do not expect to achieve positive cash flow from operating activities in the near future. We will require additional cash in order to implement our business plan. There is no guarantee that we will be able to attain fund when we need them or that funds will be available on terms that are acceptable to the Company. We have no material commitments for capital expenditures as of May 31, 2015.
Additional Financing
Additional financing is required to continue operations. Although actively searching for available capital, the Company does not have any current arrangements for additional outside sources of financing and cannot provide any assurance that such financing will be available.
Off Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
This item is not applicable to smaller reporting companies.
ITEM 4. CONTROLS AND PROCEDURES
Management’s Report on Internal Control over Financial Reporting
We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of May 31, 2015. Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of May 31, 2015, our disclosure controls and procedures were not effective to ensure that information required to be disclosed in reports filed by us under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
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| 1. | As of May 31, 2015, we did not maintain effective controls over the control environment. Specifically we have not developed and effectively communicated to our employees our accounting policies and procedures. This has resulted in inconsistent practices. Further, the Board of Directors does not currently have any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K. Since these entity level programs have a pervasive effect across the organization, management has determined that these circumstances constitute a material weakness. |
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| 2. | As of May 31, 2015, we did not maintain effective controls over financial statement disclosure. Specifically, controls were not designed and in place to ensure that all disclosures required were originally addressed in our financial statements. Accordingly, management has determined that this control deficiency constitutes a material weakness. |
Our management, including our principal executive officer and principal financial officer, who is the same person, does not expect that our disclosure controls and procedures or our internal controls will prevent all error or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.
Change in Internal Controls Over Financial Reporting
There was no change in our internal controls over financial reporting that occurred during the period covered by this report, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.
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PART II — OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We know of no material, active or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceedings or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered beneficial shareholder are an adverse party or has a material interest adverse to us.
ITEM 1A. RISK FACTORS
This item is not applicable to smaller reporting companies.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
On April 1, 2015, we issued 1,000,000 shares of common stock upon conversion of $100,000 of a convertible note.
On April 22, 2015, we issued 50,000 shares of common stock upon conversion of $500 of a convertible note.
On April 23, 2015, we issued 50,000 shares of common stock upon conversion of $500 of a convertible note.
On May 20, 2015, we issued 55,000 shares of common stock upon conversion of $550 of a convertible note.
On May 20, 2015, we issued 110,000 shares of common stock upon conversion of $1,100 of a convertible note.
On May 21, 2015, we issued 25,000 shares of common stock upon conversion of $500 of a convertible note.
On June 11, 2015, we issued 60,000 shares of common stock upon conversion of $600 of a convertible note.
On June 19, 2015, we issued 40,000 shares of common stock upon conversion of $500 of a convertible note.
On June 25, 2015, we issued 685,467 shares of common stock upon conversion of $68,447 of a convertible note.
On July 1, 2015, we issued 120,000 shares of common stock upon conversion of $1,200 of a convertible note.
Each issuance of securities was issued without registration in reliance of the exemption from registration Section 3(a)9 of the Securities Act of 1933.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
The Company has not defaulted upon senior securities.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable to the Company.
ITEM 5. OTHER INFORMATION
None.
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ITEM 6. EXHIBITS
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3.1 | Articles of Incorporation (1) |
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3.2 | Bylaws (1) |
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14 | Code of Ethics (1) |
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21 | Subsidiaries of the Registrant (2) |
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31.1 | Rule 13(a)-14(a)/15(d)-14(a) Certification of principal executive officer and principal financial and account officer. (2) |
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32.1 | Section 1350 Certification of principal executive officer and principal financial accounting officer. (2) |
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101 | XBRL data files of Financial Statement and Notes contained in this Quarterly Report on Form 10-Q. (3),(4) |
__________
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(1) | Incorporated by reference to our Form S-1 filed with the Securities and Exchange Commission on April 14, 2010 |
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(2) | Filed or furnished herewith |
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(3) | In accordance with Regulation S-T, the Interactive Data Files in Exhibit 101 to the Quarterly Report on Form 10-Q shall be deemed “furnished” and not “filed.” |
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(4) | To be submitted by amendment |
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.
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| On the Move Systems Corp. |
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Date: July 17, 2015 | BY: /s/ Robert Wilson |
| Robert Wilson |
| President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer, Treasurer and Director |
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