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U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(MARK ONE)
[ ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended December 31, 2003
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from __________ to __________
Commission File Number 000-28585
Mobile Nation, Inc.
(formerly Wolfstone Corporation)
(Name of small business issuer in its charter)
Nevada 68-0427395
- ------------------------------- ----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2647 Douglas Circle
Henderson, NV 89074
(Address of principal executive offices)
Issuer's telephone number (including area code): (702) 914-9824
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
The number of shares outstanding of the registrant's only class of
common stock, $0.001 par value per share, was 4,735,000 (restated) on
December 31, 2003 (after giving affect of the July 3, 2003 and November 14,
2003 stock splits) and 5,735,000 shares as of March 1, 2004.
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<page>1
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Item 1. Financial Statements................................................3
Balance Sheet (unaudited)...........................................4
Statements of Operations (unaudited)................................5
Statements of Cash Flows (unaudited)................................6
Notes to Financial Statements.......................................6
Item 2. Management's Discussion and Analysis of Plan
of Operation.......................................................7
Item 3. Controls and Procedures..............................................10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings..................................................10
Item 2. Changes in Securities and Use of Proceeds..........................10
Item 3. Defaults upon Senior Securities....................................11
Item 4. Submission of Matters to a Vote
of Security Holders...............................................11
Item 5. Other Information..................................................11
Item 6. Exhibits and Reports on Form 8-K...................................12
Signatures...................................................................12
<page>2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS AND EXHIBITS
MOBILE NATION, INC
(formerly Wolfstone Corporation)
(A Development Stage Company)
BALANCE SHEETS
December 31, 2003 March 31, 2003
(unaudited) (audited)
Assets
Current assets:
Cash $ 19,843 $ -
Prepared Expenses 9,050 4,580
----------- --------------
Total current assets 28,893 4,580
----------- --------------
Total assets $ 28,893 $ 4,580
=========== ==============
Liabilities and Shareholders' Deficit
-------------------------------------
Current liabilities:
Accounts payable, related party 309 -
Accrued interest 4,245 -
----------- --------------
Total current liabilities 4,554 -
------------ --------------
Note payable, convertible, related party 75,000 -
Note payable, related party 50,000 -
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Total liabilities 129,554 -
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Commitments and contingencies - -
Shareholders' Deficit
Preferred stock, par value
$40.00 per share, 10,000 shares
authorized; No shares
issued and outstanding,
respectively; no rights or - -
privileges designated
Common stock, par value $.001 per share,
20,000,000 shares authorized;
5,735,000 and 735,000 (restated) issued
and outstanding, respectively 5,735 735
Additional paid-in capital 214,399 224,339
Deficit accumulated during the
development stage (320,795) (220,554)
------------- ------------
Total shareholders' equity (deficit) (100,661) 4,580
------------- ------------
Total liabilities and shareholders'
equity $ 28,893 $ 4,580
============= ============
The accompanying notes are an integral part of the financial statements
<page>3
<table>
MOBILE NATION, INC
(formerly Wolfstone Corporation)
(A Development Stage Company)
STATEMENTS OF OPERATIONS
------------------------
For the For the From
Three months ended Nine months ended March 15, 1990
December 31, December 31, (Inception) to
2003 2002 2003 2002 December 31, 2003
--------- ---------- ----------- ---------- =================
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Revenues $ - $ - $ - $ - $ -
Operating expenses:
General and administrative 25,555 2,746 110,241 4,101 320,795
------------ ----------- ------------ ---------- -----------
Total operating expenses 25,555 2,746 110,241 4,101 320,795
------------ ----------- ------------ ---------- -----------
Loss before income taxes (25,555) (2,746) (110,241) (4,101) (320,795)
------------ ----------- ------------ ---------- -----------
Provisions for income taxes - - - - -
------------ ----------- ------------ ---------- -----------
Net loss (25,555) (2,746) (110,241) (4,101) (320,795)
Net loss per share:
Basic $ (0.01) $ (0.03) $ (0.03) $ (0.06) $ (1.35)
Diluted $ (0.01) $ (0.01) $ (0.03) $ (0.01) $ (1.35)
Weighted Shares Outstanding
(restated)
Basic 5,676,304 108,109 3,941,545 62,745 238,442
Diluted 5,676,304 418,109 3,941,545 372,745 238,442
The accompanying notes are an integral part of the financial statements.
</table>
<page>4
MOBILE NATION, INC
(formerly Wolfstone Corporation)
(A Development Stage Company)
STATEMENT OF CASH FLOWS
<table>
For the For the From
Nine Months Nine Months March 15, 1990
ended ended (Inception) to
December 31, 2003 December 31, 2002 December 31, 2003
------------------ ------------------ ------------------
(unaudited) (unaudited) (unaudited)
Cash flows from operating activities:
Net loss ($ 110,241) ($ 4,101) ($ 320,795)
Adjustment to reconcile net loss to net
cash used in operating activities:
(Increase) decrease in prepaid expenses (4,470) - (9,050)
Increase (decrease) in accounts payable,
related party 309 (15,274) 309
Increase (decrease) in accrued interest 4,245 - 4,245
Fair value of salaries donated as capital - - 151,500
Common stock issued for services 5,000 10,000 23,253
-------------- ------------- ----------------
Net cash used in operating activities (105,157) (9,375) (150,538)
Cash flows from investing activities : - - -
Cash flows from financing activities :
Note payable, convertible, related party 75,000 - 75,000
Note payable, related party 50,000 - 50,000
Contributed Capital - - 22,656
Advances form stockholders - 9,375 22,725
--------------- -------------- -----------------
Net cash provided by financing activities 125,000 9,375 170,381
Net increase in cash 19,843 - 19,843
Cash at beginning of period - - -
---------------- ------------------ ----------------
Cash at end of period $ 19,843 $ - $ 19,843
================ ================= ================
Supplemental Schedule of Non-Cash Investing
and Financing Activities
-------------------------------------------
Fair value of salaries donated as capital $ - $ - $ 151,500
Issuance of common stock in exchange
for services $ 5,000 $ 10,000 $ 23,253
Conversion of stockholder advances to
additional paid-in capital $ - $ - $ 22,725
The accompanying notes are an integral part of the financial statements.
</table>
<page>5
Mobile Nation, Inc
(formerly Wolfstone Corporation)
(a Development Stage Company)
Notes
Note 1 - Basis of Presentation
The interim financial statements included herein, presented in accordance with
United States generally accepted accounting principles and stated in US
dollars, have been prepared by the Company, without audit, pursuant to the
rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although the
Company believes that the disclosures are adequate to make the information
presented not misleading.
These statements reflect all adjustments, consisting of normal recurring
adjustments, which, in the opinion of management, are necessary for fair
presentation of the information contained therein. It is suggested that these
interim financial statements be read in conjunction with the
financial statements of the Company for the year ended March 31, 2003 and
notes thereto included in the Company's 10-KSB annual report. The Company
follows the same accounting policies in the preparation of interim reports.
Results of operations for the interim periods are not indicative of annual
results.
Note 2 - Going concern
These financial statements have been prepared in accordance with
generally accepted accounting principles applicable to a going concern that
contemplates the realization of assets and the satisfaction of liabilities and
commitments in the normal course of business. As at December 31, 2003, the
Company has not recognized revenue to date and has accumulated operating
losses of approximately $321,000 since inception. The Company's ability to
continue as a going concern is contingent upon the successful completion of
additional financing arrangements and its ability to achieve and maintain
profitable operations. Management plans to raise equity capital to finance
the operating and capital requirements of the Company. Amounts raised will be
used to further development of the Company's products, to provide financing
for marketing and promotion, to secure additional property and equipment, and
for other working capital purposes. While the Company is expending its best
efforts to achieve the above plans, there is no assurance that any such
activity will generate funds that will be available for operations.
These conditions raise substantial doubt about the Company's ability to
continue as a going concern. These financial statements do not include any
adjustments that might arise from this uncertainty.
Note 3 - Related party transactions
The Company does not lease or rent any property. Office services are
provided, without charge, by a director. Such costs are immaterial to the
financial statements and, accordingly, have not been reflected therein. The
officers and directors of the Company are involved in other business
activities and may, in the future, become involved in other business
opportunities. If a specific business opportunity becomes available, such
persons may face a conflict in selecting between the Company and their other
business interests. The Company has not formulated a policy for the
resolution of such conflicts.
<page>6
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATIONS
Company History
Our original business was to operate a direct mail business. Our original
company name was Integrated Direct, Inc. (Integrated Direct), and was
incorporated in the state of Delaware on March 15, 1990. It filed for
protection under Chapter 11 of the bankruptcy code on September 22, 1992. On
June 8, 1994, the case was converted to Chapter 7 and on December 17, 1998,
Integrated Direct was discharged from its debts as it emerged from bankruptcy.
On February 23, 1999, Integrated Direct reincorporated in the state of Nevada
and simultaneously changed its name to Wolfstone Corporation (Wolfstone).
There were no assets or liabilities prior to this transaction.
Between April 1999 and August 2003, Wolfstone attempted three
merger/acquisition transactions, however, Wolfstone was not able to raise
sufficient capital to support any of the planned mergers/acquisition. In each
instance, the parties agreed to rescind any transactions with all securities
issued by the parties being returned.
The last aborted merger/acquisition occurred in June 2003 between Wolfstone
and Mobile Nation, Inc., (Mobile Nation) was issued 4,000,000 shares of common
stock. The new business plan for the Company involved the vision of providing
portable wireless broadband services, utilizing "advanced wireless"
technologies. The management of Mobile Nation assumed substantial control of
Wolfstone and the company's name was changed to Mobile Nation, Inc.
On July 3, 2003, prior to the Board consummating the merger transaction with
Mobile Nation, Inc, the technology company, the Registrant affected a 50 to 1
reverse split of its common stock. The par value and authorized share count
of the common stock was not affected by the reverse split.
In September 2003, Mobile Nation was unable to secure key assets essential to
its original plan of deployment and operations. As a result, on October 13,
2003, the parties to the above purchase transactions returned all the
securities issued with no claims or rights to the assets optioned in the
original plan, effectively rescinding the transaction. Members of the
technology group continue to look for the resources from the limited holders
of spectrum required to launch the operation. Because there can no assurance
that the required spectrum will never be available, key technology principals
moved on the other projects.
At this same time in October, 2003, five of the then directors tendered their
resignations A new director was added to the remaining two-man Board of
Directors to pursue alternative business opportunities, a 10-for-1 stock split
was affected and members of the Board of Directors retained the 480,000 pre-
stock split shares (4,800,000 post split shares) of restricted common stock
for management services rendered and to be rendered over the balance of the
calendar year.
In November, the new director was granted 200,000 shares post stock split for
services to be rendered for the balance of the calendar year.
On October 27, 2003 a note payable was issued to a company director, C.W.
Gilluly for $50,000 loaned to the company. The note is at an interest rate of
six percent (6%) per annum and is due in full with accumulated interest on
December 31, 2004.
In connection with the rescission, a note payable issued to Affinity Financial
Group, Inc.for $75,000 was assumed by the Company for proceeds expended in
the reorganization effort of the Company by the former Mobile Nation. The
note is at an interest rate of ten percent (10%) and is due in full with all
accumulated interest on April 1, 2005. The Note is convertible, at the
holder's option, into the Company's common stock at a conversion rate of 80%
of the market price of the stock at the time of the conversion.
<page>7
Company Overview
We were incorporated in the State of Nevada on March 15, 1990. Because there
was no change in the stockholder ownership interests as a result of the
previously filed bankruptcy proceeding, when we emerged from bankruptcy it did
not qualify for fresh start accounting. Accordingly, we have a limited
operating history upon which an evaluation of our current business and its
prospects, can be based ---each of which must be considered in light of the
risks, expenses and problems frequently encountered by all companies in the
early stages of development, and particularly by such companies entering new
and rapidly developing markets. We are considering various business plans and
are currently developing other business strategies.
There can be no assurance that we will have, or create, the ability to manage
our operations, including the ability to meet the amount and timing of capital
expenditures and other costs relating to the expansion of our operations,
compete with the introduction and development of different or more extensive
approaches to the market by direct and indirect our competitors, including
those with greater financial, technical and marketing resources, or overcome
our inability to attract, retain and motivate qualified personnel and address
general economic conditions.
We have not achieved profitability to date, and anticipate that we will
continue to incur losses for the foreseeable future. As of December 31, 2003
we had an accumulated deficit of approximately $321,000. There can be no
assurances that we can achieve or sustain profitability or that our operating
losses will not increase in the future.
We are currently assessing various options and strategies. The analysis of new
businesses opportunities and evaluating new business strategies will be
undertaken by the board and senior management. In analyzing prospective
businesses opportunities, management will consider, to the extent applicable,
the available technical, financial and managerial resources of any given
business venture. Management will also consider the nature of present and
expected competition; potential advances in research and development or
exploration; the potential for growth and expansion; the likelihood of
sustaining a profit within given time frames; the perceived public recognition
or acceptance of products, services, trade or service marks; name
identification; and other relevant factors. We anticipate that the results of
operations of a specific business venture may not necessarily be indicative of
the potential for future earnings, which may be impacted by a change in
marketing strategies, business expansion, modifying product emphasis, changing
or substantially augmenting management, and other factors.
We will analyze all relevant factors and make a determination based on a
composite of available information, without reliance on any single factor.
The period within which we will decide to participate in a given business
venture cannot be predicted and will depend on certain factors, including the
time involved in identifying businesses, the time required us to complete our
analysis of such businesses, the time required to prepare appropriate
documentation and other circumstances.
Going Concern - We have experienced operating losses since our inception on
March 15, 1990 through the period ended December 31, 2003. The financial
statements have been prepared assuming we will continue to operate as a going
concern that contemplates the realization of assets and the settlement of
liabilities in the normal course of business. No adjustment has been made to
the recorded amount of assets or the recorded amount or classification of
liabilities which would be required if we were unable to continue our
operations. (See Financial Footnote 2) We believe we can provide enough
funds to operate for the next twelve (12) months without the need to raise
additional capital to meet its obligations in the normal course of business.
<page>8
Results of Operations
During the three month period ended December 31, 2003, we did not generate
any revenues. In addition, we do not expect to generate any profit during the
balance of the fiscal year ending March 31, 2004.
In our most recent nine month operating period ended December 31, 2003, we did
not generate any revenues. During the nine months ended December 31, 2003 we
had no business activity and had a net loss of $(110,241) as compared to net
loss ($4,101) for the same period ending December 31, 2002. For the Quarter
ended December 31, 2003, the Company had a net loss of $(25,555) as compared
to a net loss of $(2,746) for the same period last year. All of these
expenses represented general and administrative expenses, particularly
accounting and audit fees to maintain our reporting status, and accrued
interest on note payable of $2,375 and $4,245 for the quarter and nine-month
periods ended December 31, 2003, respectively.
A substantial portion of these general and administrative expenses was for
services rendered and to be rendered by the officers and directors in managing
the affairs of the Company, paid for with 480,000 shares of the Company's
common stock retained after the mutual cancellation of the wireless technology
transaction, said services covering the period July through December, 2003
valued at $5,000.
During the Quarter ended December 31, 2003, we contracted to merger with
Mobile Nation, Inc., an agreement that was subsequently rescinded in August
2003. Since our inception, on March 15, 1990, we have experienced a net lost
$(320,795) through the period ending December 31, 2003.
Plan of Operation
We have scaled operations down to a minimum. We are now searching for a merger
candidate and/or significant acquisition.
In our opinion, we do not have available funds to satisfy our working capital
requirements. We need to raise additional capital immediately to conduct our
operations. Such additional capital may be raised through public or private
financing, as well as borrowings and other sources. We cannot guaranty that
additional funding will be available on favorable terms, if at all. If
adequate funds are not available, we may have to contemplate a plan of
reorganization and/or liquidation in the event that we do not acquire
financing.
We are not currently conducting any research and development activities, other
than the search for a merger candidate. We do not anticipate conducting any
other such activities in the next three months.
We do not anticipate that we will hire any employees in the next three to six
months, unless we acquire financing. We believe our future success depends in
large part upon the success in finding a qualified merger candidate.
Liquidity and Capital Resources
We show little cash available to operate and will rely on the current
officers and directors to provide monies as needed to maintain our operations
as we seek and evaluated business opportunities.
We have had limited other financial resources available, which has had an
adverse impact on our liquidity, activities and operations. These limitations
have adversely affected our ability to obtain certain projects and pursue
additional business. Without realization of additional capital, it would be
unlikely for us to continue as a going concern. In order for us to remain a
going concern we will need to find additional capital. Additional working
capital may be sought through additional debt or equity private placements,
additional notes payable to banks or related parties (officers, directors or
stockholders), or from other available funding sources at market rates of
interest, or a combination of these. The ability to raise necessary financing
will depend on many factors, including the nature and prospects of any
business to be acquired and the economic and market conditions prevailing at
the time financing is sought. No assurances can be given that any necessary
financing can be obtained on terms favorable or at all.
<page>9
As a result of our current limited available cash, only one officer received
$2,500 in compensation through the three month ended December 31, 2003.
Officers /directors have received stock as compensation since our inception
through December 31, 2003 for services and operating capital contributions
totaling $23,253 in value ($200 of which occurred in the this
quarter), with other salaries paid in early years with shares totaling
$151,500 in value at the time. Officers and directors have contributed $22,725
to pay necessary expenses over the last few years, said contributions were
subsequently forgiven by the parties and are reflected as additional paid-in
capital. We may continue to use shares of our common stock to pay for services
rendered and products provided. We do not have employment agreements in place
with each of our officers.
Effect of Inflation
Inflation did not have any significant effect on the operations of the Company
during the quarter ended December 31, 2003. Further, inflation is not
expected to have any significant effect on future operations of the Company.
Impact of New Accounting Pronouncements
During the past several fiscal years and for the nine months ended December
30, 2003, there were several new accounting pronouncements issued by the
Financial Accounting Standards Board (FSAB) the most recent of which was
Statements on Financial Accounting Standards (SFAS) No. 150, Accounting for
Certain Financial Instruments with Characteristics of both Liabilities and
Equity and FASB Interpretation No. 46, Consolidation of Variable Interest
Entities. Each of these pronouncements, as applicable, has been or will be
adopted by the Company. Management does not believe the adoption of any of
these accounting pronouncements has had or will have a material impact on the
Company's financial position or operating results.
Item 3. Controls and Procedures
Our Chief Executive Officer and Chief Financial Officer (our principal
executive officer and principal financial officer, respectively) have
concluded, based on their evaluation as of December 31, 2003, that the design
and operation of our "disclosure controls and procedures" (as defined in Rule
13a-15(e) under the Securities Exchange Act of 1934, as amended, or the
Exchange Act) are effective to ensure that information required to be
disclosed by us in the reports filed or submitted by us under the Exchange Act
is accumulated, recorded, processed, summarized and reported to our
management, including our Chief Executive Officer and Chief Financial Officer,
as appropriate to allow timely decisions regarding whether or not disclosure
is required.
During the quarter ended December 31, 2003, there were no changes in our
"internal controls over financial reporting" (as defined in Rule 13a- 15(f)
under the Exchange Act) that have materially affected, or are reasonably
likely to materially affect, our internal controls over financial reporting.
<page>10
PART II OTHER INFORMATION
ITEM 1. Legal Proceedings
The Company is not a party to any legal proceedings.
ITEM 2. Changes in Securities and Use of Proceeds
On July 3, 2003 the Board and shareholders effected a 1-for-50-share reversal
resulting in a total of 73,500 shares of common stock outstanding after giving
effect for fractional shares. Additionally, the Board issued 4,000,000 shares
to Mobile Nation, Inc. The merger that caused the 4,000,000 share issuance was
formally rescinded in October, with two of the existing directors remaining
with the Company. 3,520,000 shares associated with this merger were returned
to the treasury and canceled. Simultaneous with this rescission, a 10-for-1
stock split was approved and the remaining directors retained a total of
4,800,000 shares, post stock split, together with 200,000 post split shares
issued in November to the new director for services rendered and to be
rendered over the balance of the calendar year in pursuing and assessing
various options and strategies for the Company. The resulting shares
outstanding as a result of these events totaled 5,735,000 shares as of
December 31, 2003. All "per share" amounts reflected in the accompanying
financial statements have been restated to give retroactive effect for the
above referenced stock splits on July 3, 2003 and November 14, 2003.
ITEM 3. Defaults upon Senior Securities
None.
ITEM 4. Submission of Matters to a Vote of Security Holders
On February 3rd, 2003 two of the then shareholders, comprising a majority of
the company's voting shares and acting in accordance with the corporation's
by-laws and the Nevada Revised Statutes, removed and terminated all the
Freegolfstats.com officers and directors citing abandonment. The majority
shareholders assumed control of the company until successors could be duly
elected.
ITEM 5. Other Information
On October 13th, 2003 the Board of Directors accepted the resignations of Rob
Roy, Michael McGhee, Curt Miller, Mike Borden, and John Pretto.
Rex Morden and Neal Armstrong remain as directors; C.W. Gilluly was added as a
director in October, 2003.
<page>11
ITEM 6. Exhibits and Reports on Form 8-K
a) Exhibits
Exhibit
Number Title of Document
----------------------------------------------------------------
31.1 Certifications of the Chief Executive Officer and Chief Financial
Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 Certifications of Chief Executive Officer and Chief Financial
Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
b) Reports on Form 8-K
July 21, 2003 and July 31, 2003.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Dated: March 17, 2004 MOBILE NATION, INC.
BY: /S/ REX A. MORDEN
------------------------
Rex A. Morden
President, Chief Executive Officer,
and Director (principal and
executive officer)
Dated: March 17, 2004 BY: \S\ NEAL ARMSTRONG
------------------------
Neal Armstrong
Chief Financial Officer and Director
(principal financial and
accounting officer)
<page>12
EXHIBITS FILED WITH THIS REPORT ON FORM 10-QSB
Exhibit No. Description
------------- ------------------------------------------------------
31.1 Certifications Required by Rule 13a-14(a) of the
Securities Exchange Act of 1934, as amended, as
Adopted Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
31.2 Certification of Chief Executive Officer and Chief
Financial Officer Pursuant to 18 U.S.C. Section 1350,
as Adopted Pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002
<page>13