<pre>
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U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(MARK ONE)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended December 31, 2007
[ ] 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.
(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.)
8463 W. Lake Mead Blvd.
Las Vegas, NV 89123
(Address of principal executive offices)
Issuer's telephone number (including area code): (702) 354-1358
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 573,500 shares as of January
31, 2008.
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<page>1
PART I - FINANCIAL INFORMATION
PAGE
----
ITEM 1. FINANCIAL STATEMENTS
Item 1. Financial Statements...............................................F-1
Balance Sheet (unaudited)..........................................F-1
Statements of Operations (unaudited)...............................F-2
Statements of Cash Flows (unaudited)...............................F-3
Notes to Financial Statements....................................F-4-7
Item 2. Management's Discussion and Analysis of Plan
of Operation........................................................3
Item 3. Controls and Procedures................................................9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings....................................................9
Item 2. Changes in Securities and Use of Proceeds............................9
Item 3. Defaults upon Senior Securities......................................9
Item 4. Submission of Matters to a Vote
of Security Holders.................................................9
Item 5. Other Information....................................................9
Item 6. Exhibits and Reports on Form 8-K....................................10
Signatures....................................................................11
<page>2
PART I. FINANCIAL INFORMATION
MOBILE NATION, INC
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
-------------
December 31, 2007
-------------
(Unaudited)
Assets
------
Current assets:
Cash $ 21,954
------------
Total current assets 21,954
-------------
Total assets $ 21,954
=============
Liabilities and Stockholders' Equity (Deficit)
---------------------------------------------
Current liabilities:
Accounts payable, trade $ -
Accounts payable, related party -
Accrued interest, related parties 20,963
Note payable, directors 25,000
Note payable, AFG, a related party 80,000
Convertible note payable, AFG a related party 75,000
------------
Total current liabilities 200,963
------------
Total liabilities 200,963
------------
Stockholders' Equity (Deficit):
Preferred stock, 10,000 shares authorized,
no shares issued and outstanding, no rights
or privileges designated -
Common stock, $.001 par value, 20,000,000
shares authorized, 573,500 shares
issued and outstanding 574
Paid-in capital in excess of par 221,960
Deficit accumulated during the
development stage (401,543)
------------
Total Stockholders Equity (Deficit) (179,009)
------------
Total Liabilities and
Stockholders Equity (Deficit) $ 21,954
============
The accompanying notes are an integral part of the financial statements.
<page>F-1
<table>
MOBILE NATION, INC
(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
2007 2006 2007 2006 December 31, 2007
---------- ----------- ----------- --------- ------------------
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Revenues $ - $ - $ - $ - $ -
Operating expenses:
General and administrative 2,883 12,281 19,663 23,227 425,756
------------ ------------ ------------ ------------ --------------
Operating loss (2,833) (12,281) (19,663) (23,227) (425,756)
Other income (expense)
Merger income - 50,000 105,000 50,000 165,000
Merger expense - - (25,000) - (80,000)
Interest expense (3,600) (4,787) (10,987) (14,300) (60,787)
------------ ------------ ------------ ------------ --------------
Total other income (expense) (3,600) 45,213 69,013 35,700 24,213
Income (loss) before (6,483) 32,932 49,350 12,473 (401,543)
Income taxes
Provisions for income taxes - (13,577) (16,779) (4,241) -
Federal income tax benefit
from utilization of net
operating carryforwards. - 13,577 16,779 4,241
------------- ------------ ------------ ------------ --------------
Net Income (loss) $ (6,483) $ 32,932 $ 49,350 $ 12,473 $ (401,543)
============= ============ ============ ============ ===============
Net loss per share:
Basic $ (0.01) $ 0.06 $ 0.09 $ 0.02
Diluted $ (0.01) $ 0.06 $ 0.09 $ 0.02
Weighted Average Shares Outstanding
Basic 573,500 573,500 573,500 573,500
Diluted 573,500 573,500 573,500 573,500
</table>
The accompanying notes are an integral part of the financial statements.
<page>F-2
<table>
MOBILE NATION, INC
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
-----------------------
For the From
Nine months ended March 15, 1990
December 31, (Inception) to
2007 2006 December 31, 2007
---------- ----------- ------------------
(unaudited) (unaudited) (unaudited)
Cash flows from operating activities:
Net income (loss) $ 49,350 $ 12,473 $ (401,543)
Adjustment to reconcile net income(loss)to net
cash provided by (used in) operating activities:
(Increase) decrease in prepaid expenses 25,000 - -
Increase (decrease) in accounts payable - (2,500) -
(Increase) decrease in accrued interest (28,837) 14,300 20,963
Fair value of salaries donated as capital - - 151,500
Common stock issued for services - - 25,053
(Increase) decrease in non-refundable
Deposits (100,000) (100,000)
------------ ------------ -------------
Net cash provided by operating activities 54,487 24,273 (304,027)
------------ ------------ --------------
Cash flows from investing activities:
------------ ------------ --------------
Net cash provided by investing activities - - -
------------ ------------ --------------
Cash flows from financing activities:
Advances from stockholders - - 22,725
Contributed capital - - 23,256
Proceeds from non-refundable deposits - - 100,000
Proceeds from notes payable, AFG 25,000 7,500 107,500
Repayments of note payable, AFG (7,500) - (27,500)
Proceeds from convertible note payable - - 77,700
Repayments of convertible note payable - - (2,700)
Proceeds from note payable, directors - 10,000 67,500
Repayment of note payable, directors - - (42,500)
------------ ------------ --------------
Net cash provided by financing activities 17,500 17,500 325,981
------------ ------------ --------------
Net increase (decrease) in cash (36,997) (5,500) 21,954
Cash at beginning of period 58,941 6,953 -
------------ ------------ --------------
Cash at end of period $ 21,954 $ 1,453 $ 21,954
============ ============ ===============
The accompanying notes are an integral part of the financial statements
</table>
<page>F-3
MOBILE NATION, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and business
Mobile Nation, Inc. (the Company) was incorporated in the state of Delaware on
March 15, 1990 under the name Integrated Direct, Inc. (IDI). IDI operated a
direct mail business until 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 IDI was discharged from its debts and it
emerged from bankruptcy. On February 23, 1999, IDI reincorporated in the state
of Nevada and issued 40 common stock shares in exchange for all of the 5,905,735
common stock shares of IDI, effecting a 20 to 1 reverse stock split and changing
its domicile from Delaware to Nevada. On that date, IDI changed its name to
Wolfstone Corporation (Wolfstone). There were no assets or liabilities of IDI
prior to this transaction. Between April 1999, and August 2003, Wolfstone
attempted three merger/acquisitions but was not able to raise sufficient capital
to support the transactions. In June 2003, an attempted merger with Mobile
Nation, Inc. was established by issuing 4,000,000 shares of common stock. Mobile
Nation, Inc.'s management assumed substantial control of Wolfstone and the
Company's name was changed to Mobile Nation, Inc. In October 2003, the parties
in the above transaction returned 3,520,000 securities issued with no claims or
rights to the assets optioned in the original plan, effectively rescinding the
transaction. The Company is in the development stage and is currently assessing
various business options and strategies.
2. BASIS OF PRESENTATION
The accompanying unaudited financial statements and related footnotes have been
prepared in accordance with accounting principles generally accepted in the
United States of America for interim financial statements and pursuant to the
rules and regulations of the Securities and Exchange Commission for Form 10QSB.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with the above 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. Accordingly, they do not include all of the
information and footnotes required by accounting principles generally accepted
in the United States of America for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included. For
further information read the financial statements and footnotes thereto included
in the Company's Annual Report on Form 10-KSB for the year ended March 31, 2007.
The results of operations for the three months ended December 31, 2007, are not
necessarily indicative of the operating results that may be expected for the
year ending March 31, 2008.
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 of December 31, 2007, the Company has not
recognized any substantial revenue to date and has accumulated operating losses
of approximately $425,756 since its 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 for
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.
<page>F-4
MOBILE NATION, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
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.
Development stage activities
Since the Company's bankruptcy filing in September 1992, the Company has not
conducted any business operations. All of the Company's operating results and
cash flows reported in the accompanying financial statements from its inception
are considered to be those related to development stage activities and represent
the 'cumulative from inception' amounts from its development stage activities
required to be reported pursuant to Statements of Financial Accounting Standards
(SFAS) No. 7, Development Stage Enterprises.
Use of Estimates
In preparing financial statements in conformity with accounting principles
generally accepted in the United States of America, management is required to
make estimates and assumptions that effect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements and revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Recent accounting pronouncements
Management does not believe that any recently issued, but not yet effective,
accounting pronouncements if currently adopted would have a material effect on
the accompanying financial statements.
3. RELATED PARTY TRANSACTIONS
Advances from stockholder
During the period March 15, 1990 (inception) through December 31, 2007, the
Company received $22,725 of non-interest bearing advances from its
stockholders/officers. The advances were due upon demand as funds were available
and were unsecured. On March 31, 2003 all of these advances were contributed to
the Company as additional paid-in capital.
In August, 2007 the company received $25,000 of non-interest bearing advances
from its stockholders/officers. The advance is due upon demand as funds were
available and are unsecured. This advance was converted into a note in December
2007.
Notes payable, directors
During the year ended March 31, 2004, the Company received $50,000 from a
director. This note bears interest at 6% per annum, is unsecured and had an
original due date of December 31, 2005. On January 4, 2007, this note was
renewed with the same terms and a due date of December 31, 2008. On March 12,
2007 a payment of $25,000 was made on the principal amount. As of December 31,
2007, accrued interest payable totaled $11,250.
<page>F-5
MOBILE NATION, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
During the year ended March 31, 2005, the Company received $5,000 from the
Company's President and director. This note had an interest rate of 8% per
annum, was unsecured and had an original due date of December 31, 2005. On
January 25, 2007, the principal amount of the note was paid in full. The
interest was paid in full in May 2007.
During the year ended March 31, 2006, the Company received $2,500 from the
Company's President and director. This note had an interest rate of 10% per
annum, was unsecured and due on or before December 31, 2006. On January 25,
2007, the principal amount of the note was paid in full. The interest was paid
in full in May 2007.
In April 2006, the Company received $10,000 from the Company's president and
director. This note had an interest rate of 10% per annum, was unsecured and
was due on or before December 31, 2006. On January 25, 2007, the principal
amount of the note was paid in full. The interest was paid in full in May 2007.
Notes payable, AFG
During the year ended March 31, 2005, the Company received a total of $17,500
from Affinity Financial Group, Inc. (AFG). AFG is wholly owned by Rex A.
Morden, a director and officer of the Company. The notes have an interest rate
of 8% per annum, are unsecured and had an original due date of December 31,
2005. On January 4, 2007, this note was renewed with the same terms and a due
date of December 31, 2007. On January 25, 2007, a payment of $12,500 was applied
to the principal amount. At December 31, 2008, accrued interest payable totaled
$200.
During the year ended March 31, 2006, the Company received and repaid a total of
$7,500 from AFG. The note bears interest at 8% per annum, is unsecured and due
on or before December 31, 2006. The interest was paid in full in May 2007.
During the year ended March 31, 2006, the Company received $50,000 from AFG in
exchange for a note payable. The note bears interest at 10% per annum, is
unsecured and due on or before December 31, 2006. On April 12, 2007, this note
was renewed with the same terms and a due date of December 31, 2008. At
December 31, 2007, accrued interest payable totaled $2,500.
On July 31, 2006 a note payable (Affinity Note) was issued to Affinity Financial
Group, Inc. for $7,500 loaned to the Company. The Affinity Note was at an
interest rate of ten percent (10%) per annum and had an original due date of
December 31, 2006. On January 4, 2007, this note was renewed with the same terms
and a due date of December 31, 2007. In July 2007, the principal and interest
amount of the note was paid in full in July 2007.
On December 28, 2006 a note payable (Affinity Note) was issued to Affinity
Financial Group, Inc. for $25,000 loaned to the Company. The note bears interest
at an interest rate of ten percent (10%) per annum, is unsecured and due on or
before December 31, 2008. At December 31, 2007, accrued interest payable totaled
$-0-.
Convertible note payable, AFG
During the year ended March 31, 2004, the Company received $77,700 from AFG in
exchange for a convertible note payable. During the year ended March 31, 2005,
$2,700 of this amount was repaid. The Affinity Note is at an interest rate of
ten percent (10%) per annum. The note is unsecured, due upon demand and is
convertible, at the option of the holder, into common shares at 80% of the then
current market price at any time prior to the repayment of the principal and any
accumulated accrued interest. On January 4, 2007, the due date on this note was
extended to December 31, 2007. At Decemeber 31, 2007, accrued interest payable
totaled $3,750.
<page>F-6
MOBILE NATION, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
Consulting agreement with AFG
During the year ended March 31, 2006, AFG billed the Company $25,000 for
consulting fees related to the possible merger with Dental Spas LLC. The Company
paid the balance in full on December 15, 2006.
Potential Merger and Acquisition Candidates
On February 27, 2006, the Company entered into a letter of intent ("LOI") with
Dental Spas LLC., (Dental Spas) as a potential merger candidate. Pursuant to the
terms of the agreement the "LOI" expired on May 1, 2006. The proposed
transaction was never consummated. The agreement was terminated as outlined in
the terms of the agreement.
On December 8th, 2006, the Company entered into a letter of intent ("LOI") with
The World Series of Golf, Inc., ("WSG") as a potential merger candidate.
Pursuant to the terms of the agreement or the "LOI" the Company received $50,000
as a non-refundable deposit, and WSG received a 90 day exclusivity period to
close. The $50,000 has been reflected in other income.
<pageF-7
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATIONS
Company History
The original business of Mobile Nation, Inc. was to operate a direct mail
business and at that time the Company was called Integrated Direct, Inc.
(Integrated Direct), and was incorporated in the state of Delaware on March 15,
1990. Integrated Direct 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 unable to raise sufficient capital to
support any of these planned mergers or acquisitions. In each instance, the
parties agreed to rescind all of the proposed transactions, with all securities
issued by the parties being returned.
The last aborted merger/acquisition occurred in July 2003 between Wolfstone and
Mobile Nation, Inc., (Mobile Nation); wherein 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 by utilizing "advanced
wireless" technologies. In July 2003, 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 Wolfstone Board consummating the merger
transaction with Mobile Nation, Wolfstone 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. With the resigning members of the Board
of Directors continuing to seek the resources from the limited holders of
spectrum required to launch the operation. Because there was no assurance that
the required spectrum would ever become available, these key personnel decided
to leave the Company and to focus on other projects outside the activity of the
Company.
At this same time in October 2003, five of the 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 connection with the rescission of the transaction, a note payable (Affinity
Note) in the amount of $75,000 was issued to Affinity Financial Group, Inc. for
monies loaned to Mobile Nation during this period. The Affinity Note is at an
interest rate of ten percent (10%) per annum and is due in full with all
accumulated interest on December 31, 2008. The Affinity 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.
On October 27, 2003 a note payable (Gilluly Note) was issued to a Company
director, C.W. Gilluly, for $50,000 loaned to the Company. The Gilluly Note
bears interest at 6% per annum, is unsecured and had an original due date of
December 31, 2005. On December 28, 2007, this note was renewed with the same
terms and a due date of December 31, 2008. A principle payment of $25,000
towards the principle amount of this note was paid on March 12, 2007.
In November 2003, the new director was granted 200,000 shares post stock split
for services to be rendered for the balance of the calendar year.
<page>3
On August 10, 2004 a note payable (Affinity Note) was issued to Affinity
Financial Group, Inc. for $5,000 loaned to the Company. The Affinity Note bears
interest at 8% per annum, is unsecured and had an original due date of December
31, 2005. On December 28, 2007, this note was renewed with the same terms and a
due date of December 31, 2008.
On September 24, 2004 a note payable (Morden Note) was issued to a Company
director Rex A. Morden for $5,000 loaned to the Company. The Morden Note is at
an interest rate of eight percent (8%) per annum and is due in full with all
accumulated interest on December 31, 2007. The principle amount of this note was
paid in full on January 25th, 2007.
On February 16, 2005 the board of Directors voted to effect a 1:10 reverse
split, with an effective date of March 1, 2005.
On March 21, 2005 a note payable (Affinity Note) was issued to Affinity
Financial Group, Inc. for $12,500 loaned to the Company. The Affinity Note was
at an interest rate of eight percent (8%) per annum and is due in full with all
accumulated interest on December 31, 2006. The principle amount of this note was
paid in full on January 25th, 2007.
On March 30, 2005 the Company directors adopted a code of ethics.
On September 26, 2005 a note payable (Morden Note) was issued to a Company
director Rex A. Morden for $2,500 loaned to the Company. The Morden Note is an
interest rate of eight percent (8%) per annum and is due in full with all
accumulated interest on December 31, 2007. The principle amount of this note was
paid in full on January 25th, 2007.
On October 7, 2005, the Company entered into a letter of intent ("LOI") with a
potential merger candidate. In accordance with the terms of the LOI the Company
received a non-refundable deposit in the amount of $10,000. The proposed
transaction was never consummated. The agreement was terminated after a 30 day
time period as outlined in the terms of the agreement.
On February 27, 2006, the Company entered into a letter of intent ("LOI") with
Dental Spas LLC., (Dental Spas) as a potential merger candidate. Pursuant to the
terms of the agreement the "LOI" expired on May 1, 2006. The proposed
transaction was never consummated. The agreement was terminated as outlined in
the terms of the agreement.
On February 27, 2006 a note payable (Affinity Note) in the amount of $50,000 was
issued to Affinity Financial Group, Inc. for monies loaned to the Company. The
Affinity Note is at an interest rate of ten percent (10%) per annum and had an
original due date of December 31, 2006. On December 28, 2007, this note was
renewed with the same terms and a due date of December 31, 2008.
On February 28, 2006 Affinity Financial Group, Inc. invoiced the Company $25,000
for consulting fees related to the possible merger with Dental Spas. The balance
due was paid on December 15th, 2006.
On April 25, 2006 a note payable (Morden Note) was issued to a Company director
Rex A. Morden for $10,000 loaned to the Company. The Morden Note was at an
interest rate of ten percent (10%) per annum and was due in full with all
accumulated interest on December 31, 2006. The principle amount of this note was
repaid on January 25, 2007.
On July 31, 2006 a note payable (Affinity Note) was issued to Affinity Financial
Group, Inc. for $7,500 loaned to the Company. The Affinity Note was at an
interest rate of ten percent (10%) per annum and had an original due date of
December 31, 2006. The principle amount of this note was repaid in July, 2007.
On December 8th, 2006, the Company entered into a letter of intent ("LOI") with
The World of Series of Golf, Inc., as a potential merger candidate. In
accordance with the terms of the LOI, the Company received a non-refundable
deposit in the amount of $50,000. The agreement expired on March 8th, 2007. The
Company never received a response to notices, and the proposed transaction was
never consummated. The agreement was terminated as outlined in the terms of the
agreement.
<page>4
On March 9th, 2007 the Company entered into a letter of intent ("LOI") with
M633, Inc., as a potential merger candidate. In accordance with the terms of the
LOI, the Company received a non-refundable deposit in the amount of $100,000.
The "LOI" expired on June 9th, 2007. However, on June 25, 2007 the Company
agreed to extend the proposed closing date to September 30, 2007. The extension
is subject to a non-refundable deposit of $25,000 being paid to the Company on
or before July 31, 2007. The Company received an initial payment of $5000
towards the extension on June 26, 2007. Once payment is received in full the
Company will execute a new "LOI". The proposed extension was never consummated
and the "LOI" agreement was terminated on August 2, 2007.
On April 12th, 2007 the annual meeting of the shareholders was held. The
majority shareholders re-elected Rex A. Morden as Chairman of the board of
directors, and Chancey White, and Dr. Christopher William Gilluly were re-
elected as Directors for the coming year.
On December 28, 2007 a note payable (Affinity Note) was issued to Affinity
Financial Group, Inc. for $25,000 loaned to the Company. The Affinity Note bears
interest at 10% per annum, is unsecured and has a due date of December 31, 2008.
On December 28, 2007 the note holders, Affinity Financial Group, Inc, and C.W.
Gilluly, extend the due dates on all notes to December 31, 2008.
Subsequent Event
On February 11th, the Company's President Rex A. Morden tendered his
resignation. Dr. Christopher William Gilluly assumed the position of interim
President and CEO, with Chancey White acting as the principle accounting
officer. Mr. Morden will continue to be available for service to the board of
directors as a consultant if needed.
On February 8th, 2008 a note payable (Gilluly Note) was issued to a Company
director, C.W. Gilluly, for $15,000 loaned to the Company. The Gilluly Note
bears interest at 12% per annum, is unsecured and has a due date of December 31,
2008..
Company Overview
We were incorporated in the State of Delaware 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, all 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, 2007 we had an
accumulated deficit of $425,756. 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.
<page>5
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, 2007. 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>6
Results of Operations
During the nine month period ended December 31, 2007, we did not generate any
substantial revenues.
In our most recent nine month operating period ended December 31, 2007, we did
not generate any revenues other than the receipt of a non-refundable deposit.
During the nine months ended December 31, 2007 we had diminutive business
activity and had a net gain of $49,350 as compared to a net gain of $12,473 for
the same period ending December 31, 2006. All of these expenses represented
general and administrative expenses, particularly accounting and audit fees to
maintain our reporting status, and accrued interest on notes payable of $3,600
and $4,787 for the quarters ended December 31, 2007 and 2006, respectively.
Plan of Operation
We have scaled operations down to a minimum and have focused our efforts to
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>7
Effect of Inflation
Inflation did not have any significant effect on the operations of the Company
during the quarter ended December 31, 2007. Further, inflation is not expected
to have any significant effect on future operations of the Company.
Impact of New Accounting Pronouncements
Recent Accounting Pronouncements
During 2005, 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. 153, Exchanges of
Nonmonetary Assets. 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.
In December 2004, the FSAB issued SFAS No. 123R, Share-Based Payments, revising
to SFAS No. 123, Accounting for Stock-Based Compensation, and superseding
Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to
Employees. SFAS No. 123R establishes standards for the accounting of
transactions in which an entity exchanges its equity instruments for goods or
services, including obtaining employee services in share-based payment
transactions. SFAS No. 123R applies to all awards granted after the required
effective date and to awards modified, purchased or canceled after that date.
Adoption is effective as of the beginning of the first interim or annual
reporting period that begins after June 15, 2005. Management does not believe
the adoption of this accounting pronouncement will have a material impact on the
Company's financial position or operating results.
In 2006, the Financial Accounting Standards Board issued the following:
- SFAS No. 155: Accounting for Certain Hybrid Financial Instruments
- SFAS No. 156: Accounting for Servicing of Financial Assets
- SFAS No. 157: Fair Value Measurements
- SFAS No. 158: Employers' Accounting for Defined Benefit Pension and Other
Postretirement Plans
Management has reviewed these new standards and believes that they have no
impact on the financial statements of the Company.
<page>8
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, 2007, 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, 2007, 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.
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
None.
ITEM 3. Defaults upon Senior Securities
None.
ITEM 4. Submission of Matters to a Vote of Security Holders
None.
ITEM 5. Other Information
None.
<page>9
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
None.
<page>10
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: February 12, 2008 MOBILE NATION, INC.
BY: /S/ C.W. GILLULY
------------------------
C.W. Gilluly
Interim President, Chief Executive
Officer, and Director (principal and
executive officer)
Dated: February 12, 2008 BY: \S\ CHANCEY WHITE
--------------------------
Chancey White
Secretary and Director
(principal accounting officer)
<page>11
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>12