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| MDRM > SEC Filings for MDRM > Form 10-Q on 11-May-2011 | All Recent SEC Filings |
11-May-2011
Quarterly Report
Forward-Looking Statements and Associated Risks.
The following discussion should be read in conjunction with the financial statements and the notes to those statements included elsewhere in this Quarterly Report on Form 10-Q. This Quarterly Report on Form 10-Q contains certain statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Certain statements contained in the MD&A are forward-looking statements that involve risks and uncertainties. The forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about our industry, business and future financial results. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed in other sections of this Quarterly Report on Form 10-Q.
Plan of Operation
Modern Mobility Aids, Inc. (the "Company") is a Nevada corporation in the development stage and is involved in selling and distribution of products for mobility challenged individuals. The Company was incorporated under the laws of the State of Nevada on December 19, 2007 under the name Glider Inc. The Company changed its name to Modern Mobility Aids, Inc. on April 22, 2010.
References in this Report to "Modern Mobility Aids" refer to Modern Mobility Aids Inc. and its subsidiary, on a consolidated basis, unless otherwise indicated or the context otherwise requires. The Company's consolidated financial statements for the nine months ended March 31, 2011, and 2010, include the accounts of its wholly owned subsidiary Modern Mobility Aids, Inc., an Ontario, Canada, based company. The subsidiary was incorporated on September 2, 2009, during the year ended June 30, 2010.
The Company to date has funded its initial operations through the issuance of 9,774,000 shares of capital stock for the net proceeds of $47,425 and revenue from sales of $9,506. Due to the uncertainty of our ability to generate sufficient revenues from our operating activities and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due, in their report on our financial statements for the year ended June 30, 2010, our registered independent auditors included additional comments indicating concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that led to this disclosure by our registered independent auditors. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Results of Operations
For the nine months ended March 31, 2011 compared to nine months ended March 31, 2010
Our results of operations, as reported in our consolidated financial statements, incorporate results of operations of our wholly owned Canadian subsidiary. All significant intercompany balances and transactions have been eliminated on consolidation.
During the nine months ended March 31, 2011 we have generated $1,656 (March 31, 2010: $Nil) in revenues from sales and incurred $46,160 (March 31, 2010: $572) in losses. During the period from December 19, 2007 (inception), through March 31, 2011, we have generated $9,506 in revenues from sales and incurred $56,704 in losses.
To date our revenue has been from sales of scooters and scooter accessories, uplift electric chairs, walkers and bikes. The increase in revenue was attributable to the introduction of new products. Our cost of revenues consisted of the cost of the items we had sold and freight expenses.
We purchased the products we sold from various independent resellers/suppliers in North America. We will continue purchasing and selling mobility products in small quantities from various suppliers until we find products with highest profit margin. Once the products are determined, we plan to establish a wholesale account with the manufacturer/reseller of the products as our "principal" supplier. As of the date of this report we have not setup a wholesale account with a principal supplier. There is no guarantee that our application for wholesale accounts will be approved by the manufacturers. We may not be able to purchase products at favorable wholesale prices, which will negatively impact our business.
We intend to distribute our products through a network of local distributors in Russia. As of the date of this report we have signed a broker agreement with OOO Elite Moto ("Elite Moto"), a company based in Moscow, Russia. Elite Moto represents our products in the Moskovskaya Oblast' region, which includes Moscow and the surrounding suburbs. We depend on Elite Moto, as our major customer, in generating revenues from sales of mobility products and accessories in Moscow region of the Russian market.
During the nine months ended March 31, 2011, we incurred $46,878 (March 31, 2010: $572) in operating costs including $12,250 for accounting fees; $4,500 for officer compensation, $5,500 for consulting fees, $3,220 for legal fees, $12,155 for transfer agent fees and $9,253 for other general and administrative costs. Other general and administrative costs consist of bank charges of $299, filing fees of $2,920, office expenses of $596, product sample purchases of $307, rent expense of $2,310 and travel and promotion expenses of $2,821.
Since inception, we have sold 6,500,000 shares of common stock at $0.001 per share to our Directors for total proceeds of $6,500. During the nine months ended March 31, 2011, the Company's Registration Statement on the Form S-1/A filed with the Securities and Exchange Commission was declared effective. The Company has sold 3,274,000 common shares at $0.0125 per share for total proceeds of $40,925 pursuant to this Registration Statement.
We have reserved the domain name www.modernmobilityaids.com in anticipation of future expansion. We have not developed our website as of the date of this report.
Liquidity and Capital Resources
We have incurred $56,704 in operating losses since inception. As of March 31, 2011, we had $1,122 in cash compared to $2,902 at June 30, 2010. As of March 31, 2011, we had a working capital deficiency of $(9,279), compared to a working capital deficiency of $(4,044) as of June 30, 2010.
Net cash used in operating activities for the nine months ended March 31, 2011 was $47,205, compared with net cash used of $Nil for the prior year period. The majority of the increase in net cash used was due to an increase in operating losses due to higher operating expenses. No cash was used in investing activities during the nine months ended March 31, 2011 and 2010. Net cash provided by financing activities for the nine months ended March 31, 2011 was $45,425, and consisted of proceeds of $40,925 from sale of 3,274,000 shares of common stock and loans from directors of $4,500. No cash was provided by financing activities in the prior year period.
The Company must raise additional funds or increase revenues from sales in order to fund our continued operations. We may not be successful in our efforts to raise additional funds or achieve profitable operations. Even if we are able to raise additional funds through the sale of our securities or through the issuance of debt securities, or loans from our directors or financial institutions our cash needs could be greater than anticipated in which case we could be forced to raise additional capital.
At the present time, we have no commitments for any additional financing, and there can be no assurance that, if needed, additional capital will be available to us on commercially acceptable terms or at all. These conditions raise substantial doubt as to our ability to continue as a going concern, which may make it more difficult for us to raise additional capital when needed. If we cannot get the needed capital, we may not be able to become profitable and may have to curtail or cease our operations.
Recent Accounting Pronouncements
See Note 6 to the Financial Statements.
Off Balance Sheet Arrangements
None.
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