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MOMO > SEC Filings for MOMO > Form 10-Q on 17-May-2013All Recent SEC Filings

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Form 10-Q for MOPALS.COM, INC.


17-May-2013

Quarterly Report


Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following is management's discussion and analysis of the consolidated financial condition and results of operations of Mopals.com, Inc. ("Mopals", the "Company", "we", and "our") for the three month period ended March 31, 2013. The following information should be read in conjunction with the consolidated interim financial statements for the period ended March 31, 2013 and notes thereto appearing elsewhere in this Form 10-Q.

Overview

Mopals was incorporated under the laws of Delaware on February 6, 2003 as MagnaData, Inc. In February 2005, articles of amendment were filed with the State of Delaware changing the name of our Company to MortgageBrokers.com Holdings, Inc. and thereafter operated as a mortgage brokerage in Canada. On March 26, 2013 articles of amendments were filed with the State of Delaware changing the name of our Company to Mopals.com, Inc. pursuant to execution of an asset spin out and shareholder loan cancellation agreement and subsequent execution of a share exchange agreement. Pursuant to the terms of the exchange agreement, the Company acquired 100% of the issued and outstanding equity securities of Mopals Inc., a Nevada private corporation, in exchange for the issuance of 50,000,000 shares of the Company's common stock.

Mopals carries out business through its wholly owned subsidiary, Mopals Canada Inc. Mopals Canada Inc. (formerly IQIC.com Inc.) was incorporated federally in Canada on August 7, 2012.

Mopals is a development stage internet and mobile brand loyalty social media company.

As at March 31, 2013, our Company had one (1) full-time employee and nine (9) independent contractors.

The Company's corporate offices are located at 294 Richmond Street East, Suite 200, Toronto, Ontario, CANADA, M5A 1P5. Our current contact information for our Ontario office is telephone number: (416) 362-4888. Our internet website can be found under the domain name: www.mopals.com.

Results of Operations

Three months ended March 31, 2013

Consistent with the launch of a development stage company, Mopals had no reported revenue in our first quarter in 2013.

The Company's reported operating expenses during the period were $204,652. The primary components that comprise our operating expenses were salaries and consultant/contractor fees, general and administrative expenses and occupancy costs which are explained in detail as follows:

? 65% of the operating expenses in the reporting period were associated with salaries, contractor expenses and Consulting fees.

? 19% of the operating expenses in the reporting period were associated with general and administrative expenses.

? 14% of our operating expenses in the reporting period were associated with occupancy costs associated with an office lease.

Liquidity and Capital Resources

At March 31, 2013, we had $34,807 in cash, $50,518 in prepaid expenses and $51,657 in equipment, computer software, computer hardware and furniture for a total of $136,981 in assets. Comparatively as at December 31, 2012, we had $175,799 in cash and $32,317 in prepaid expenses and $55,322 in equipment and furniture for a total of $263,438 in assets.


At March 31, 2013, we had $19,383 in accounts payable and accrued liabilities, $14,924 in accruals for stock-based compensation associated with former discontinued operations, $129 in subscription payables for common stock of the Company and $437,511 in loans payable to the Company's principal shareholder for a total of $471,947 in liabilities. Comparatively as at December 31, 2012, we had $20,348 in accounts payable and accrued liabilities and $364,315 in loans payable to the Company's principal shareholder for a total of $384,663 in liabilities.

Management makes the following comments regarding the most significant factors affecting the Company's liquidity and capital resources and their measured trends over the reporting period:

? The Company's cash position decreased by approximately 80% over the first three months of 2013 associated with the following:

o the Company lost $205,012 in cash from operating activities over the first three months of 2013. As a development stage company, Mopals has no revenue yet while it is building its products and services , hires software development, marketing and sales staff and establishes market partners to help our business; and,

o the Company gained $62,991 in cash from financing activities over the first three months of 2013 as we received funds from our principal shareholder.

The Company reported a net loss from operations for the first three months of 2013 of $204,652 with a net decrease in cash from operating and investing activities of $142,021 during the same period. The Company needs to raise additional capital to fund our development stage company activities and to position the company for a market launch of its planned products and services.

In the event that the Company runs out of available working capital resources or experiences an unforeseen impact to cash flow, our Company will need to rely upon the issuance of common stock and additional capital contributions from shareholders and/or loans from shareholders and third-party lenders to meet its working capital needs.

Off-Balance Sheet Arrangements

None.

Critical Accounting Policies

The financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States ("GAAP"). GAAP requires the use of estimates, assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue, and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.

Going Concern

The Company's consolidated financial statements are presented on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

For the three months reporting period ended March 31, 2013, the Company reported a net loss from operations of $204,652 with a net decrease in cash from operating, investing and financing activities of $140,972 during the same period. Since inception to March 31, 2012, the Company reported a net loss from operations of $367,889. Certain conditions noted below raise doubt about the Company's ability to continue as a going concern.

As a development stage company, the Company's ability to continue as a going concern is contingent upon its ability to secure additional debt or equity financing. Management's plan is to secure additional working capital funds through future debt or equity financings.

The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.


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