UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q/A
(Amendment
No.1)
☑
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the quarterly period ended June 30, 2012
☐
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
OF
1934
For
the transition period from ______ to _______
Commission
file number: 333-152952
MOBILE
STAR CORP.
(Exact
name of registrant as specified in its charter)
Delaware
|
98-0565411
|
(state
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer I.D. No.)
|
c/o
George Ivakhnik 433 N. Camden Dr., Fourth Floor Beverly Hills, CA. 90210
|
(Address
of principal executive offices)
|
310-279-5282
(Issuer's telephone number)
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
☑
Yes
☐
No
Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
☐Yes ☐
No (Not required)
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Large
Accelerated Filer
☐
Accelerated Filer
☐
Non-Accelerated
Filer
☐
Smaller Reporting Company
☑
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
☐
Yes
☑
No
As
of June 30, 2012, there were 22,161,278
shares of the registrant’s $0.0001 par value common stock issued and
outstanding.
Explanatory
Note
The sole purpose of this Amendment to the Registrant’s Quarterly Report on Form 10-Q for the period ended June 30, 2012
(the “10-Q”), is to furnish the Interactive Data File exhibits required by Item 601(b)(101) of Regulation S-K,
and correct Note 7 of the Notes to Financials which pertains to Income Taxes. The three bottom entries of the Income Tax financial
table were inadvertently included in the file and does not apply to this Quarterly filing. This Amendment has not been updated
to reflect events occurring subsequent to the filing of the 10-Q.
MOBILE
STARE CORP.
TABLE
OF CONTENTS
|
|
PAGE
|
PART
I
|
FINANCIAL
INFORMATION
|
|
ITEM 1.
|
FINANCIAL
STATEMENTS
|
|
ITEM
2.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
ITEM
3.
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
|
ITEM
4.
|
CONTROLS
AND PROCEDURES
|
|
PART
II
|
OTHER
INFORMATION
|
|
|
|
|
ITEM 1.
ITEM
1A.
|
LEGAL
PROCEEDINGS
RISK
FACTORS
|
|
ITEM 2.
|
UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
|
ITEM 3.
|
DEFAULTS
UPON SENIOR SECURITIES
|
|
ITEM 4.
|
[REMOVED AND
RESERVED]
|
|
ITEM 5.
|
OTHER INFORMATION
|
|
ITEM 6.
|
EXHIBITS
|
|
Special
Note Regarding Forward-Looking Statements
Information
included in this Form 10-Q contains forward-looking statements that may involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or achievements of
Mobile Star Corp.
(the “Company”), to be materially different from future results, performance or achievements expressed or implied
by any forward-looking statements. Forward-looking statements, which involve assumptions and describe future plans, strategies
and expectations of the Company, are generally identifiable by use of the words “may,” “will,” “should,”
“expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project”
or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements
are based on assumptions that may be incorrect, and there can be no assurance that these projections included in these forward-looking
statements will come to pass. Actual results of the Company could differ materially from those expressed or implied by the forward-looking
statements as a result of various factors. Except as required by applicable laws, the Company has no obligation to update publicly
any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.
*
Please
note that throughout this Quarterly Report, and unless otherwise noted, the words "we," "our," "us,"
the "Company," or "MBST" refers to Mobile Star Corp.
PART I - FINANCIAL INFORMATION
ITEM
1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
INDEX
TO FINANCIAL STATEMENTS
JUNE
30, 2012
Fin
ancial
Statements-
|
|
|
|
Balance Sheets as of June 30, 2012 and
December 31, 2011
|
F-1
|
|
|
Statements of Operations for the Three
Months and Six Months Ended
|
|
June 30, 2012, and 2011 and Cumulative
from Inception
|
F-2
|
|
|
Statements of Cash Flows for the Six Months
Ended June 30, 2012 and
|
|
2011 And Cumulative from Inception
|
F-3
|
|
|
Statement of Changes in Stockholders’
Equity for the Period from Inception
|
|
Through June 30, 2012
|
F-4
|
|
|
Notes to Financial Statements
|
F-5
|
MOBILE
STAR CORP.
(A
DEVELOPMENT STAGE COMPANY)
BALANCE
SHEETS
AS
OF JUNE 30, 2012 AND DECEMBER 31, 2011
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
As of
|
|
As of
|
|
|
|
|
|
|
|
June 30,
|
|
December 31,
|
|
|
|
|
|
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
(Unaudited)
|
|
(Audited)
|
|
Current Assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
284
|
|
$
285
|
|
Prepaid expenses
|
|
|
|
|
85,000
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
|
|
85,284
|
|
285
|
|
|
|
|
|
|
|
|
|
|
|
Other Assets:
|
|
|
|
|
|
|
|
|
Patent pending
|
|
|
|
|
7,300
|
|
7,300
|
|
Assignment of invention rights
|
|
|
|
5,000
|
|
5,000
|
|
|
|
|
|
|
|
|
|
|
|
Total other assets
|
|
|
|
|
12,300
|
|
12,300
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
|
|
|
$
97,584
|
|
$
12,585
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' (DEFICIT)
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
|
$ 26,177
|
|
$ 33,058
|
|
Loans from related parties - Directors and stockholders
|
25,134
|
|
5,034
|
|
Convertible notes payable, net of discount
|
|
|
293,200
|
|
50,962
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
|
344,511
|
|
89,054
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
|
|
344,511
|
|
89,054
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity (Deficit):
|
|
|
|
|
|
|
|
Series B preferred convertible stock, par value $.001
per share,
|
|
|
|
|
0 shares issued and outstanding
|
|
|
|
-
|
|
-
|
|
Common stock, par value $.0001 per share, 1,000,000,000
shares
|
|
|
|
|
authorized; 22,161,278 and
752,320 shares
|
|
|
|
|
|
issued and outstanding, respectively
|
|
|
2,216
|
|
75
|
|
Additional paid-in capital
|
|
|
|
1,050,934
|
|
552,325
|
|
Stock subscriptions receivable
|
|
|
|
(40,000)
|
|
-
|
|
(Deficit) accumulated during the development stage
|
(1,260,077)
|
|
(628,869)
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders' equity (deficit)
|
|
|
(246,927)
|
|
(76,469)
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders'
Equity (Deficit)
|
$
97,584
|
|
$
12,585
|
|
|
|
|
|
|
|
|
|
|
|
The
accompanying notes to financial statements are an integral part of these statements.
F-1
MOBILE
STAR CORP.
(A
DEVELOPMENT STAGE COMPANY)
STATEMENTS
OF OPERATIONS
FOR
THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2012 AND 2011
AND
CUMULATIVE FROM INCEPTION (SEPTEMBER 25, 2007)
THROUGH
JUNE 30, 2012
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
Six Months
Ended
|
|
Cumulative
|
|
|
|
June
30,
|
|
June
30,
|
|
From
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
Inception
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
-
|
|
6,381
|
$
|
-
|
$
|
6,381
|
$
|
6,381
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
-
|
|
26,030
|
|
|
|
39,313
|
|
137,092
|
Professional fees
|
|
45,100
|
|
10,452
|
|
49,100
|
|
24,185
|
|
221,798
|
Consulting fees
|
|
356,250
|
|
-
|
|
406,250
|
|
6,383
|
|
462,780
|
Management fees
|
|
-
|
|
-
|
|
-
|
|
-
|
|
133,500
|
Investor relations
|
|
-
|
|
-
|
|
-
|
|
3,500
|
|
9,911
|
Legal - incorporation
|
|
-
|
|
-
|
|
-
|
|
-
|
|
2,350
|
Director fees
|
|
170,000
|
|
-
|
|
170,000
|
|
-
|
|
170,000
|
Travel
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
24,750
|
Other
|
|
|
-
|
|
5,089
|
|
-
|
|
12,520
|
|
3,101
|
|
|
|
|
|
|
|
|
|
|
|
|
Total general and administrative expenses
|
|
571,350
|
|
41,571
|
|
625,350
|
|
85,901
|
|
1,165,282
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) from Operations
|
|
(571,350)
|
|
(35,190)
|
|
(625,350)
|
|
(79,520)
|
|
(1,158,901)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense)
|
|
|
|
|
|
|
|
|
|
|
Foreign currency transaction gains
|
|
-
|
|
|
|
-
|
|
|
|
5,161
|
Foreign currency transaction losses
|
|
-
|
|
(98)
|
|
-
|
|
(98)
|
|
(3,646)
|
Interest expense
|
|
(3,011)
|
|
(25,619)
|
|
(5,858)
|
|
(51,309)
|
|
(113,691)
|
Other income (expense)
|
|
-
|
|
11,000
|
|
-
|
|
11,000
|
|
11,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for Income Taxes
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (Loss)
|
$
|
(574,361)
|
$
|
(49,907)
|
$
|
(631,208)
|
$
|
(119,927)
|
$
|
(1,260,077)
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) Per Common Share:
|
|
|
|
|
|
|
|
|
|
|
(Loss) per common share - Basic and Diluted
|
$
|
(0.08)
|
$
|
(0.23)
|
$
|
(0.15)
|
$
|
(0.61)
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Number of
Common Shares
|
|
|
|
|
|
|
|
|
|
|
Outstanding - Basic and Diluted
|
|
7,222,268
|
|
221,620
|
|
4,200,910
|
|
197,173
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
accompanying notes to financial statements are an integral part of these statements.
F-2
MOBILE
STAR CORP.
(A
DEVELOPMENT STAGE COMPANY)
CONDENSED
STATEMENT OF CASH FLOWS
FOR
THE SIX MONTHS ENDED JUNE 30, 2012 AND 2011,
AND
CUMULATIVE FROM INCEPTION (SEPTEMBER 25, 2007)
THROUGH
JUNE 30, 2012
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
Cumulative
|
|
|
|
|
|
|
June
30,
|
|
From
|
|
|
|
|
|
|
2012
|
|
2011
|
|
Inception
|
|
|
|
|
|
|
|
|
|
|
|
Operating Activities:
|
|
|
|
|
|
|
|
|
Net (loss)
|
|
|
|
$
|
(631,208)
|
$
|
(119,927)
|
$
|
(1,260,077)
|
Adjustments to reconcile net (loss) to net cash
|
|
|
|
|
|
|
(used in) operating activities:
|
|
|
|
|
|
|
|
|
Common stock issued for services
|
|
|
241,250
|
|
3,389
|
|
399,750
|
Amortization of beneficial conversion feature
|
|
1,738
|
|
47,825
|
|
101,863
|
Changes in net assets and liabilities-
|
|
|
|
|
|
|
|
Prepaid expenses
|
|
|
|
|
(85,000)
|
|
-
|
|
(85,000)
|
Accounts payable and accrued liabilities
|
|
|
(6,882)
|
|
(14,771)
|
|
31,614
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash Used in Operating
Activities
|
|
(480,102)
|
|
(83,484)
|
|
(811,850)
|
|
|
|
|
|
|
|
|
|
|
|
Investing Activities:
|
|
|
|
|
|
|
|
|
Purchase of patent pending
|
|
|
|
-
|
|
-
|
|
(7,300)
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash Used in Investing
Activities
|
|
|
-
|
|
-
|
|
(7,300)
|
|
|
|
|
|
|
|
|
|
|
|
Financing Activities:
|
|
|
|
|
|
|
|
|
Proceeds from common stock issued
|
|
|
210,000
|
|
-
|
|
370,800
|
Proceeds from convertible note payable
|
|
|
250,000
|
|
67,500
|
|
374,500
|
Payments of shareholder loans
|
|
|
|
|
|
-
|
|
(14,300)
|
Proceeds from shareholder loans
|
|
|
20,100
|
|
-
|
|
88,434
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash Provided by Financing
Activities
|
|
480,100
|
|
67,500
|
|
819,434
|
|
|
|
|
|
|
|
|
|
|
|
Net (Decrease) Increase in
Cash
|
|
|
(1)
|
|
(15,984)
|
|
284
|
|
|
|
|
|
|
|
|
|
|
|
Cash - Beginning of Period
|
|
|
|
285
|
|
18,513
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Cash - End of Period
|
|
|
$
|
284
|
$
|
2,529
|
$
|
284
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Disclosure of
Cash Flow Information:
|
|
|
|
|
|
|
Cash paid during the period for:
|
|
|
|
|
|
|
|
Interest
|
|
|
|
|
$
|
-
|
$
|
-
|
$
|
-
|
Income taxes
|
|
|
|
$
|
-
|
$
|
-
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental schedule of
non-cash investing and financing activities:
|
|
|
|
|
Assignment of invention rights acquired through additional
paid-in capital
|
$
|
-
|
$
|
-
|
$
|
5,000
|
Stock issued to settle shareholder loans
|
|
$
|
-
|
$
|
$
49,000
|
$
|
49,000
|
Stock issued to settle convertible debts and interest
|
$
|
9,500
|
$
|
52,389
|
$
|
86,737
|
|
|
|
|
|
|
|
|
|
|
|
The
accompanying notes to financial statements are an integral part of these statements.
F-3
MOBILE
STAR CORP.
(A
DEVELOPMENT STAGE COMPANY)
STATEMENT
OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
FOR
THE PERIOD FROM INCEPTION (SEPTEMBER 25, 2007)
THROUGH
JUNE 30, 2012
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Deficit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|
Additional
|
|
Stock
|
|
During the
|
|
|
|
|
|
Common
stock
|
|
Paid-in
|
|
Subscriptions
|
|
Development
|
|
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Receivable
|
|
Stage
|
|
Totals
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance - January 1, 2008
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
Common stock issued for cash
|
112,000
|
|
11
|
|
789
|
|
-
|
|
-
|
|
800
|
Assignment of invention rights
|
-
|
|
-
|
|
5,000
|
|
-
|
|
-
|
|
5,000
|
Net (loss) for the year
|
-
|
|
-
|
|
-
|
|
-
|
|
(18,019)
|
|
(18,019)
|
Balance - December 31, 2008
|
112,000
|
|
11
|
|
5,789
|
|
-
|
|
(18,019)
|
|
(12,219)
|
Common stock issued for cash
|
28,000
|
|
3
|
|
159,997
|
|
-
|
|
-
|
|
160,000
|
Net (loss) for the period
|
-
|
|
-
|
|
-
|
|
-
|
|
(154,818)
|
|
(154,818)
|
Balance - December 31, 2009
|
140,000
|
$
|
14
|
$
|
165,786
|
$
|
-
|
$
|
(172,837)
|
$
|
(7,037)
|
Common stock issued as compensation
|
20,000
|
|
2
|
|
24,998
|
|
-
|
|
-
|
|
25,000
|
Convertible note discount
|
-
|
|
-
|
|
24,545
|
|
-
|
|
|
|
24,545
|
Convertible note discount
|
-
|
|
-
|
|
22,091
|
|
-
|
|
|
|
22,091
|
Net (loss) for the period
|
-
|
|
-
|
|
-
|
|
-
|
|
(150,787)
|
|
(150,787)
|
Balance - December 31, 2010
|
160,000
|
$
|
16
|
$
|
237,420
|
$
|
-
|
$
|
(323,624)
|
$
|
(86,188)
|
Common stock issued to extinguish debt
|
24,000
|
|
2
|
|
48,998
|
|
-
|
|
-
|
|
49,000
|
Common stock issued upon conversion of convertible
debt
|
148,320
|
|
15
|
|
77,222
|
|
-
|
|
-
|
|
77,237
|
Convertible note discount
|
-
|
|
-
|
|
55,227
|
|
-
|
|
-
|
|
55,227
|
Common stock issued as compensation
|
60,000
|
|
6
|
|
25,494
|
|
-
|
|
-
|
|
25,500
|
Common stock issued as compensation
|
360,000
|
|
36
|
|
107,964
|
|
-
|
|
-
|
|
108,000
|
Net (loss) for the period
|
-
|
|
-
|
|
-
|
|
-
|
|
(305,245)
|
|
(305,245)
|
Balance - December 31, 2011
|
752,320
|
|
$
75
|
|
$
552,325
|
|
$
-
|
|
$
(628,869)
|
|
$
(76,469)
|
Common stock issued as compensation
|
500,000
|
|
50
|
|
177,450
|
|
-
|
|
-
|
|
177,500
|
Common stock issued upon conversion of convertible
debt
|
66,555
|
|
7
|
|
8,593
|
|
-
|
|
-
|
|
8,600
|
Common stock issued as compensation
|
61,228
|
|
6
|
|
894
|
|
-
|
|
-
|
|
900
|
Common stock issued as compensation
|
1,875,000
|
|
188
|
|
27,938
|
|
-
|
|
-
|
|
28,126
|
Common stock issued as compensation
|
1,875,000
|
|
188
|
|
27,937
|
|
-
|
|
-
|
|
28,125
|
Common stock issued for cash
|
16,531,175
|
|
1,653
|
|
248,347
|
|
(40,000)
|
|
-
|
|
210,000
|
Common stock issued as compensation
|
500,000
|
|
50
|
|
7,450
|
|
-
|
|
-
|
|
7,500
|
Net (loss) for the period
|
-
|
|
-
|
|
-
|
|
-
|
|
(631,208)
|
|
(631,208)
|
Balance - June 30, 2012
|
22,161,278
|
$
|
2,216
|
$
|
1,050,934
|
$
|
(40,000)
|
$
|
(1,260,077)
|
$
|
(246,926)
|
The
accompanying notes to financial statements are an integral part of these statements.
F-4
Note
1-
Summary of Significant Accounting Policies
Basis
of Presentation and Organization
Mobile
Star Corp. (“Mobile Star” or the “Company”) is a Delaware corporation in the development stage and has
not commenced operations. The Company was incorporated under the laws of the State of Delaware on September 25, 2007 and began
activity in January 2008. The business plan of the Company is to develop a commercial application of a self-operated computerized
karaoke recording booths. The Company also intends to obtain approval of its patent application, and manufacture and market the
product and/or seek third party entities interested in licensing the rights to manufacture and market the device. The accompanying
financial statements of Mobile Star were prepared from the accounts of the Company under the accrual basis of accounting.
Unaudited
Interim Financial Statements
The
interim financial statements of the Company as of June 30, 2012, and for the periods then ended, and cumulative from inception,
are unaudited. However, in the opinion of management, the interim financial statements include all adjustments, consisting of
only normal recurring adjustments, necessary to present fairly the Company’s financial position as of June 30, 2012, and
the results of its operations and its cash flows for the periods ended June 30, 2012 and cumulative from inception. These results
are not necessarily indicative of the results expected for the calendar year ending December 31, 2012. The accompanying financial
statements and notes thereto do not reflect all disclosures required under accounting principles generally accepted in the United
States. Refer to the Company’s audited financial statements as of December 31, 2011, filed with the SEC, for additional
information, including significant accounting policies.
Cash
and Cash Equivalents
For
purposes of reporting within the statement of cash flows, the Company considers all cash on hand, cash accounts not subject to
withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less
to be cash and cash equivalents.
Revenue
Recognition
The
Company is in the development stage. Once the Company has commenced operations, it will recognize revenues when delivery of goods
or completion of services has occurred provided there is persuasive evidence of an agreement, acceptance has been approved by
its customers, the fee is fixed or determinable based on the completion of stated terms and conditions, and collection of any
related receivables is probable.
Loss
per Common Share
Basic
loss per share is computed by dividing the net loss attributable to the common stockholders by the weighted average number of
shares of common stock outstanding during the period. Fully diluted loss per share is computed similar to basic loss per share
except that the denominator is increased to include the number of additional common shares that would have been outstanding if
the potential common shares had been issued and if the additional common shares were dilutive. Common stock equivalents were not
included in the computation of diluted earnings per share in the statement of operations due to the fact that the Company reported
a net loss and to do so would be anti-dilutive for the periods presented.
Income
Taxes
Deferred
tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for
income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the financial
statement classification of the assets and liabilities generating the differences.
The
Company maintains a valuation allowance with respect to deferred tax assets. The Company establishes a valuation allowance based
upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company’s financial
position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence
of sufficient taxable income within the carry forward period under the federal tax laws.
Changes
in circumstances, such as the Company generating taxable income, could cause a change in judgment about the realizability of the
related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change in estimate.
Fair
Value of Financial Instruments
The
Company estimates the fair value of financial instruments using the available market information and valuation methods. Considerable
judgment is required in estimating fair value. Accordingly, the estimates of fair value may not be indicative of the amounts the
Company could realize in a current market exchange. As of June 30, 2012, the carrying value of accounts payable, accrued liabilities,
and loans from directors and stockholders approximated fair value due to the short-term nature and maturity of these instruments.
Patent
and Intellectual Property
The
Company capitalizes the costs associated with obtaining a Patent or other intellectual property associated with its intended business
plan. Such costs are amortized over the estimated useful lives of the related assets.
Deferred
Offering Costs
The
Company defers the direct incremental costs of raising capital as other assets until such time as the offering is completed. At
the time of the completion of the offering, the costs are charged against the capital raised. Should the offering be terminated,
deferred offering costs are charged to operations during the period in which the offering is terminated.
Impairment
of Long-Lived Assets
The
Company evaluates the recoverability of long-lived assets and the related estimated remaining lives when events or circumstances
lead management to believe that the carrying value of an asset may not be recoverable. For the period ended June 30, 2012, no
events or circumstances occurred for which an evaluation of the recoverability of long-lived assets was required.
Common
Stock Registration Expenses
The
Company considers incremental costs and expenses related to the registration of equity securities with the SEC, whether by contractual
arrangement as of a certain date or by demand, to be unrelated to original issuance transactions. As such, subsequent registration
costs and expenses are expensed as incurred.
Estimates
The
financial statements are prepared on the basis of accounting principles generally accepted in the United States. The preparation
of financial statements in conformity with generally accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities and expenses. Actual results could differ from those estimates
made by management.
Recent
Accounting Pronouncements
In
May 2011, the FASB issued ASU 2011-04, "Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement
and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards ("IFRSs")." Under ASU
2011-04, the guidance amends certain accounting and disclosure requirements related to fair value measurements to ensure that
fair value has the same meaning in U.S. GAAP and in IFRS and that their respective fair value measurement and disclosure requirements
are the same. ASU 2011-04 is effective for public entities during interim and annual periods beginning after December 15, 2011.
Early adoption is not permitted. The Company does not believe that the adoption of ASU 2011-04 will have a material impact on
the Company's results of operation and financial condition.
In
June 2011, the FASB issued ASU No. 2011-05, "Comprehensive Income (ASC Topic 220): Presentation of Comprehensive Income,"
("ASU 2011-05") which amends current comprehensive income guidance. This accounting update eliminates the option to
present the components of other comprehensive income as part of the statement of shareholders' equity. Instead, comprehensive
income must be reported in either a single continuous statement of comprehensive income which contains two sections, net income
and other comprehensive income, or in two separate but consecutive statements. ASU 2011-05 will be effective for public companies
during the interim and annual periods beginning after Dec. 15, 2011 with early adoption permitted. The Company does not believe
that the adoption of ASU 2011-05 will have a material impact on the Company's results of operation and financial condition.
There
were various other updates recently issued, most of which represented technical corrections to the accounting literature or application
to specific industries. None of the updates are expected to a have a material impact on the Company's financial position,
results of operations or cash flows.
Note
2-
Development Stage Activities and Going Concern
The
Company is currently in the development stage, and has limited operations. The business plan of the Company is to develop a commercial
application of a self-operated computerized karaoke recording booth. The Company also intends to obtain approval of its patent
application, and manufacture and market the product and/or seek third party entities interested in licensing the rights to manufacture
and market the device.
In
January 2008, the Company entered into a Assignment Agreement whereby the Company acquired all of the rights, title and interest
in the invention known as the “Self operated computerized karaoke recording booth” for consideration of royalties
ranging from 1% to 5% based on the net income of the Company for 30 years from the date of the Company's incorporation. On February
20, 2008 the Company filed PCT and U.S. patent applications for the invention.
The
Company commenced a capital formation activity to submit a Registration Statement on Form S-1 to the Securities and Exchange Commission
(“SEC”) to register and sell in a self-directed offering 28,000 (post reverse stock split) shares of newly issued
common stock for proceeds of up to $200,000. The Registration Statement on Form S-1 was filed with the SEC on August 12, 2008
and declared effective on September 8, 2008. The Company has issued 28,000 (post reverse stock split) shares of common stock pursuant
to the Registration Statement on Form S-1, and received proceeds of $200,000.
The
accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United
States of America, which contemplate continuation of the Company as a going concern. The Company has limited revenue to cover
its operating costs, and as such, has incurred an operating loss since inception. Further, as of June 30, 2012, the cash resources
of the Company were insufficient to meet its current business plan. These and other factors raise substantial doubt about the
Company’s ability to continue as a going concern. The accompanying 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.
Note
3-
Patent Pending
In
January 2008, the Company entered into an Assignment Agreement whereby the Company acquired all of the rights, title and interest
in the invention known as the “Self operated computerized karaoke recording booth” for consideration of royalties
ranging from 1% to 5% based on the net income of the Company for 30 years from the date of the Company's incorporation. On February
20, 2008 the Company filed PCT and U.S. patent applications for the invention.
Note
4-
Loans from Related Parties - Directors and Stockholders
As
of June 30, 2012, loans from related parties amounted to $25,134, and represented working capital advances from officers who are
also stockholders of the Company. The loans are unsecured, non-interest bearing, and due on demand.
On
May 23, 2012, the Company signed a $200,000 convertible promissory note with a related party. The note bears interest at
8% per annum and was due on May 23, 2013. The note has conversion rights that allow the holder of the note to convert after
180 days all or any part of the remaining principal balance into the Company’s common stock at the current trading price.
Note
5-
Convertible Notes Payable
On
January 6, 2011, the Company signed a $35,000 convertible promissory note with a third party. The note bears interest at
8% per annum and was due on October 10, 2011. The note has conversion rights that allow the holder of the note to convert
after 180 days all or any part of the remaining principal balance into the Company’s common stock at a price equal to 55%
of the average of the lowest three trading prices for the Common Stock during the most recent ten day period. As of
June
30
, 2012 this note was reduced by $24,300 upon conversion to shares.
On
April 11, 2011, the Company signed a $32,500 convertible promissory note with a third party. The note bears interest at
8% per annum and was due on January 18, 2012. The note has conversion rights that allow the holder of the note to convert
after 180 days all or any part of the remaining principal balance into the Company’s common stock at a price equal to 55%
of the average of the lowest three trading prices for the Common Stock during the most recent ten day period.
On
May 23, 2012, the Company signed a $50,000 convertible promissory note with a third party. The note bears interest at 8%
per annum and is due on May 23, 2013. The note has conversion rights that allow the holder of the note to convert after
180 days all or any part of the remaining principal balance into the Company’s common stock at the current trading price.
On
May 23, 2012, the Company signed a $200,000 convertible promissory note with a related party. The note bears interest at
8% per annum and is due on May 23, 2013. The note has conversion rights that allow the holder of the note to convert after
180 days all or any part of the remaining principal balance into the Company’s common stock at the current trading price.
In
accordance with ASC 470, the Company has analyzed the beneficial nature of the conversion terms and determined that a beneficial
conversion feature (BCF) exists. The Company calculated the value of the BCF using the intrinsic method as stipulated in
ASC 470. The BCF has been recorded as a discount to the notes payable and to Additional Paid-in Capital.
As
of
June 30
, 2012, the balance of convertible notes payable is $293,200.
For
the period ended
June 30, 2012
the Company recognized $4,120 in interest expense related to
the notes and has amortized $1,738 of the beneficial conversion features which has been recorded as interest expense.
Note
6-
Common Stock
On
February 4, 2008, the Company issued 112,000 (post reverse stock split) shares of its common stock to founders of the Company,
some of whom were directors and officers, for proceeds of $800.
The
Company has commenced a capital formation activity to submit a Registration Statement on Form S-1 to the SEC to register and sell
in a self-directed offering 28,000 (post reverse stock split) shares of newly issued common stock for proceeds of up to $200,000.
The Registration Statement on Form S-1 was filed with the SEC on August 12, 2008 and declared effective on September 8, 2008.
The Company has issued 28,000 (post reverse stock split) shares of common stock pursuant to the Registration Statement on Form
S-1, and received proceeds of $200,000. The Company incurred $40,000 of deferred offering costs related to this capital formation
activity.
On
June 26, 2009, the Company implemented a 7 for 1 forward stock split on its issued and outstanding shares of common stock
to the holders of record as of June 24, 2009. As a result of the split, each holder of record on the record date automatically
received six additional shares of the Company’s common stock. After the split, the number of shares of common stock issued
and outstanding were 70,000,000 shares. The accompanying financial statements and related notes thereto have been adjusted accordingly
to reflect this forward stock split.
On
May 26, 2010, the Company issued 20,000 (post reverse stock split) shares of its common stock to a Director for services valued
at $25,000 based on the current market price of the stock minus a discount for the restricted trading.
On
February 25, 2011, the Company issued 24,000 (post reverse stock split) shares of its common stock to Directors for repayment
of loans of $49,000 based on the current market price of the stock minus a discount for the restricted trading.
On
August 26, 2011, the Company issued 360,000 (post reverse stock split) shares of its common stock to Directors for services valued
at $108,000 based on the current market price of the stock minus a discount for the restricted trading.
On
September 8, 2011, the Company issued 60,000 (post reverse stock split) shares of its common stock for services valued at $25,500
based on the current market price of the stock minus a discount for the restricted trading.
From
January 1, 2011 to December 31, 2011, the Company issued 148,320 (post reverse stock split) shares of its common stock valued
at $77,237 to retire convertible debt and accrued interest of $5,437.
On
October 7, 2011, the Company filed a certificate of amendment of certificate of incorporation with the state of Delaware to increase
the amount of authorized common stock to 1,000,000,000 shares.
On
January 4, 2012, the Company issued 100,000 (post reverse stock split) shares of its common stock to a consultant for services
valued at $35,500.
On
February 2, 2012, the Company issued 400,000 (post reverse stock split) shares of its common stock to two directors for services
valued at $142,000.
On
March 2, 2012, the Company implemented a 1 for 500 reverse stock split on its issued and outstanding shares of common stock
to the holders of record. After the reverse split, the number of shares of common stock issued and outstanding were 1,318,868
shares. The accompanying financial statements and related notes thereto have been adjusted accordingly to reflect this reverse
stock split.
On
June 5, 2012, the Company issued 1,875,000 shares of its common stock to a consultant for services valued at $28,125.
On
June 5, 2012, the Company issued 1,875,000 shares of its common stock to an additional consultant for services valued at $28,125.
On
June 5, 2012, the Company issued 16,531,175 to an investor for $250,000.
On
June 21, 2012, the Company issued 500,000 shares of its common stock to a consultant for services valued at $7,500.
From
January 1, 2012 to June 30, 2012, the Company issued 127,783 shares of its common stock valued at $9,500 to retire convertible
debt and accrued interest.
Note
7-
Income Taxes
The
provision (benefit) for income taxes for the periods ended June 30, 2012 and 2011 was as follows (assuming a 23% effective tax
rate):
|
|
2012
|
|
2011
|
|
|
|
|
|
Current Tax Provision:
|
|
|
|
|
Federal-
|
|
|
|
|
Taxable
income
|
|
$-
|
|
$-
|
|
|
|
|
|
Total
current tax provision
|
|
$-
|
|
$-
|
|
|
|
|
|
|
|
|
|
Deferred Tax Provision:
|
|
|
|
|
|
|
|
|
Federal-
|
|
|
|
|
|
|
|
|
Loss carryforwards
|
|
$
|
145,178
|
|
|
$
|
27,583
|
|
Nondeductible interest expense
|
|
|
(400
|
)
|
|
|
(11,000
|
)
|
Change in valuation
allowance
|
|
|
(144,778
|
)
|
|
|
(16,583
|
)
|
|
|
|
|
|
|
|
|
|
Total deferred tax
provision
|
|
$
|
—
|
|
|
$
|
—
|
|
The
Company had deferred income tax assets as of June 30, 2012 and December 31, 2011 as follows:
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
|
Loss carryforwards
|
|
$
|
266,389
|
|
|
$
|
121,611
|
|
Less - Valuation allowance
|
|
|
(266,389
|
)
|
|
|
(121,611
|
)
|
|
|
|
|
|
|
|
|
|
Total net deferred
tax assets
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
The
Company provided a valuation allowance equal to the deferred income tax assets for the periods ended June 30, 2012 and December
31, 2011, because it is not presently known whether future taxable income will be sufficient to utilize the loss carry-forwards.
As
of June 30, 2012, the Company had approximately $1,158,000 in tax loss carry-forwards that can be utilized in future periods to
reduce taxable income, and expire in the year 2032.
The
Company did not identify any material uncertain tax positions. The Company did not recognize any interest or penalties for
unrecognized tax benefits.
The
Company has filed income tax returns in the United States. All tax years are closed by expiration of the statute of limitations.
Note
8-
Related Party Transactions
On
February 4, 2008, the Company issued 38,080 (post reverse stock split) shares of common stock to directors of the Company, for
$272.
As
described in Note 5, on May 26, 2010, the Company issued 20,000 (post reverse stock split) shares of its common stock to a Director
for services valued at $25,000.
On
February 25, 2011, the Company issued 24,000 (post reverse stock split) shares of its common stock to Directors for repayment
of loans of $49,000 based on the current market price of the stock minus a discount for the restricted trading.
On
August 26, 2011, the Company issued 360,000 (post reverse stock split) shares of its common stock to Directors for services valued
at $108,000 based on the current market price of the stock minus a discount for the restricted trading.
On
February 2, 2012, the Company issued 400,000 (post reverse stock split) shares of its common stock to two directors for services
valued at $142,000.
During
the six months ended June 30, 2012 the Company paid fees to related parties amounting to $405,625.
Note
9- Commitments
On
June 15, 2008, the Company entered into a Transfer Agent and Registrar Agreement with Nevada Agency and Trust Company ("NATCO").
Under the Agreement, the Company agreed to pay to NATCO an annual fee of $1,500 for the first year and $1,800 for every year thereafter.
NATCO will act as the Company’s transfer agent and registrar.
As
described in Note 3, in January 2008, the Company entered into a Assignment Agreement whereby the Company acquired all of the
rights, title and interest in the invention known as the “Self operated computerized karaoke recording booth” for
consideration of royalties ranging from 1% to 5% based on the net income of the Company for 30 years from the date of the Company's
incorporation.
Note
10-
Concentration of Credit Risk
The
Company’s cash and cash equivalents are invested in a major bank in Israel and are not insured. Management
believes that the financial institution that holds the Company’s investments is financially sound and accordingly, minimal
credit risk exists with respect to these investments.
ITEM
2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
Certain
statements contained in this Quarterly Report, including statements regarding the anticipated development and expansion of our
business, our intent, belief or current expectations, primarily with respect to the future operating performance of Mobile Star
Corp and the services we expect to offer and other statements contained herein regarding matters that are not historical facts,
are “forward-looking” statements. Future filings with the Securities and Exchange Commission, future press releases
and future oral or written statements made by us or with our approval, which are not statements of historical fact, may contain
forward-looking statements, because such statements include risks and uncertainties, actual results may differ materially from
those expressed or implied by such forward-looking statements.
All
forward-looking statements speak only as of the date on which they are made. We undertake no obligation to update such statements
to reflect events that occur or circumstances that exist after the date on which they are made.
This
Management’s Discussion and Analysis or Plan of Operations (“MD&A”) section of this Report discusses our
results of operations, liquidity and financial condition, and certain factors that may affect our future results. You should read
this MD&A in conjunction with our audited financial statements and accompanying notes included in this Report. This plan of
operation contains forward-looking statements that involve risks, uncertainties, and assumptions. The actual results may differ
materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited
to, those presented under “Risk Factors” or elsewhere in this Report.
Plan
of Operation
We
were incorporated in Delaware on September 25, 2007 and are a development stage company. We began operations on January 1, 2008.
Our Principal executive offices are located at 433 N Camden Dr Fourth Floor , Beverly Hills, CA 90210.
Our
registered office in Delaware is located at 113 Barksdale Professional Center, Newark, DE 19711, and our registered agent is Delaware
Intercorp. Our fiscal year end is December 31.
We
have engaged a US manufacturer to develop a fully operational prototype of the Technology. The product has been developed and
is running as a test pilot in an amusement center in New York. We estimate it would take an additional three to six months to
bring this product to the market on a full scale basis. The product is to run parallel as a test pilot during the Company’s
further efforts to bring the product to the market on a full scale basis.
Liquidity
and Capital Resources
As
of June 30 2012 we had cash on hand of $284. Our cumulative net loss since inception is $1,260,077 which is comprised entirely
of general and administrative and research and development expenses.
On
January 6, 2011, the Company signed a $35,000 convertible promissory note with a third party. The note bears interest at 8% per
annum and was due on October 10, 2011. The note has conversion rights that allow the holder of the note to convert after 180 days
all or any part of the remaining principal balance into the Company’s common stock at a price equal to 55% of the average
of the lowest three trading prices for the Common Stock during the most recent ten day period. As of September 30, 2011 this note
was reduced by $14,800 upon conversion of shares.
On
April 11, 2011, the Company signed a $32,500 convertible promissory note with a third party. The note bears interest at 8% per
annum and was due on January 18, 2012. The note has conversion rights that allow the holder of the note to convert after 180 days
all or any part of the remaining principal balance into the Company’s common stock at a price equal to 55% of the average
of the lowest three trading prices for the Common Stock during the most recent ten day period.
The
Company does not believe that its cash resources will be sufficient to fund its expenses over the next 12 months. There can be
no assurance that additional capital will be available to the Company. The Company currently has no agreements, arrangements,
or understandings with any person to obtain funds through bank loans, lines of credit, or any other sources. Since the Company
has no such arrangements or plans currently in effect, its inability to raise funds for the above purposes will have a severe
negative impact on its ability to remain a viable company.
RESULTS
OF OPERATIONS
For
the Three Month Period Ended June 30, 2012 versus June 30, 2011
Revenues
The
Company had revenues for the three month period ended June 30, 2012 of $0 and general and administrative costs of
$571,350
as compared to the three month period ended June 30, 2011 of revenues of $6,381 and general and administrative costs of
$35,190
.
Operating
Expenses and Net Loss
.
The
Company’s net loss of $574,361 for the three month period ended June 30, 2012 was comprised of general and administrative
expenses of $571, 350 Professional fees to a related party in the amount of $45,100 Consulting fees in the amount of
$356,250
and Director Fees of
$170,000
. The Company also had $3,011 in
net interest expense. In comparison to the three month period ended June 30, 2011, the Company’s net loss of $49, 907 for
the three month period ended June 30, 2011 was comprised of general and administrative expenses of $41,570 Research and Development
fees in the amount of 26,030, Professional fees to a related party in the amount of $10,452 and other Fees of
$5,
089
. The Company also had $98 in Foreign Currency transaction, $25,619 in net interest expense and other income in the
amount of $11,000.
For
the Six Month Period Ended June 30, 2012 versus June 30, 2011
Revenues
The
Company had revenues for the six month period ended June 30, 2012 of $0 and general and administrative costs of
$625,350
as compared to the six month period ended June 30, 2011 of revenues of $6,381 and general and administrative costs of
$85,901
.
Operating
Expenses and Net Loss
.
The
Company’s net loss of $631,208 for the six month period ended June 30, 2012 was comprised of general and administrative
expenses of $625, 350, Professional fees to a related party in the amount of $49,100, consulting fees in the amount of
$406,250
and Director Fees of
$170,000
. The Company also had $5,858 in
net interest expenses. In comparison to the six month period ended June 30, 2011, the Company’s net loss of $119,927 for
the six month period ended June 30, 2011 was comprised of general and administrative expenses of $85,901, Research and Development
fees in the amount of $39,313, Professional fees to a related party in the amount of $24,185, consulting fees in the amount of
$6,383, investor relations fees in the amount of $3,500 and other Fees in the amount of
$12,
520
. The Company also had $98 in Foreign Currency transaction, $51,309 in net interest expenses and other income in the
amount of $11,000.
Cumulative
From Inception
Revenues
The
Company had revenues since inception of $6,381 and general and administrative costs of
$1,165,282.
Operating
Expenses and Net Loss
.
The
Company’s net loss of $1,260,077 since inception was comprised of general and administrative expenses of $1,165,282. Research
and development fees in the amount of $137,092, Professional fees to a related party in the amount of $221,798 consulting fees
in the amount of
$462,780, Management fees in the amount of 133,500, Investor
relations fees $9, 991, Legal incorporation fees in the amount of $2,350
Director Fees of
$170,000
,
Travel fees of $24,750 and Other fees in the amount of $3,101. The Company also had $ 5,161 in foreign currency transaction gains
and $3,646 in Foreign currency transaction losses, $113,691 in net interest expense and other income in the amount $11,000.
Liquidity
and Capital Resources
Three
and Six Month Period Ended June 30, 2012
As
at June 30, 2012, our total assets were $97,584 compared to $12,585 in total assets at December 31, 2011. Total assets were comprised
of $284 in cash as of June 30, 2012 compared to $285 at December 31, 2011. As at June 30, 2012, our current liabilities were $344,511
compared to $89,054 at December 31, 2011. Stockholders’ equity was a deficit of $246,927 as of June 30, 2012 compare to
stockholders' equity deficit of $76,469 as of December 31, 2011.
Cash
Flows from Operating Activities
We
have not generated positive cash flows from operating activities. For the six month period ended June 30, 2012, net cash flows
used in operating activities was $(480,102). Net cash flows used in operating activities was $(83,484) for the six month period
ended June 30, 2011. Net cash flows used in operating activities was $(811,850) since inception.
Cash
Flows from Investing Activities
Since
inception, including the three and six month period ended June 30, 2012, the Company has not generated any cash flows from investing
activities.
Cash
Flows from Financing Activities
We
have financed our operations primarily from either advancements or the issuance of equity. For the six month period ended June
30, 2012 net cash provided by financing activities was $480,100. For the six month period ended June 30, 2011 net cash provided
by financing activities was $67,500.For the period from inception to June 30, 2012, net cash provided by financing activities
was $819,434.
QUARTERLY
EVENTS
On
April 27, 2012 the Company issued a press release announcing the designation of Series B Preferred Convertible shares which is
designed to allow current and prospective shareholders to participate in the Company ownership through a different class of stock
but one that is still convertible to common shares with voting rights.
On
June 1, 2012 MBST announced in a press release the appointment of Mr. George Ivakhnik as the Company's new President, Secretary,
and Treasurer, effective immediately. Mr. Ivakhnik was appointed as the CEO of the Company in February of 2012.
The
Board also authorized the issuance of preferred A and C class shares. Class A and C preferred shares are designed for specific
deal objectives.
On
June 08, 2012 the Company issued a press release announcing an agreement entered into to acquire interest in two projects: 1.)
Four-season NY-based land resort development and 2.) Up to 49% of Star-Show, Inc., a worldwide karaoke booth manufacturer and
distributor.
On
June 8, 2012, Mobile Star Corp. (the “Company”) caused to be issued 20,281,175 newly issued shares of common stock
in execution of a Subscription Agreement (the “Agreement”) and for consulting services. As discussed further herein
16,531,175 of these shares were issued pursuant to the Agreement. The remaining 3,750,000 shares were issued for consulting services
as follows; 1,875,000 to private consultant, Asher Zwebner and 1,875,000 shares to consulting firm, OTZAROT TARSHISH NECHASIM
VEHASHKAOT LTD.
On
June 8, 2012 The Company issued restricted shares of common stock in connection with the Agreement, which was entered between
the Company and Arm Fund Partners, Inc. (“Arm Fund”). Therefore, on June 8, 2012, Arm Fund acquired control of 16,531,175
shares of the Company’s issued and outstanding common stock, which represents approximately 66% of the Company’s total
issued and outstanding common stock at the time. Pursuant to the Agreement, Arm Fund paid an aggregate purchase price of two hundred
and fifty thousand dollars ($250,000) in exchange for the shares.
On
June 8, 2012 Ruth Katz resigned from the position of Secretary, Treasurer and Accounting Officer with the Company, but not before
appointing George Ivakhnik to take over his position as President, Secretary, Treasurer, and Accounting Officer. The resignation
was not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or
practices. Mr. Ivakhnik already holds the positions of Chief Executive Officer and is a member of the Board of Directors of the
Company.
On
June 8, 2012 Judah Steinberger resigned from his directorship position, as his last remaining post with the Company. The resignation
was not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or
practices.
On
June 12, 2012 MBST issued a press release announcing an agreement entered into to provide construction completion funds to a Long
Beach, CA based Venue known as “The Vault,” a 22,000 square foot entertainment venue facility being built with state
of the art sound and stage equipment and will be an attraction for Long Beach's burgeoning entertainment district.
Off-Balance
Sheet Arrangements.
We
have no off-balance sheet arrangements.
ITEM
3. QUANTITATIVE AND QUALITATATIVE DISCLOSURES ABOUT MARKET RISK
We
are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide
the information under this item.
ITEM
4. CONTROLS AND PROCEDURES
Evaluation
of Disclosure Controls and Procedures
Disclosure
controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our
reports filed under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the
SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure
that information required to be disclosed by our company in the reports that it files or submits under the Exchange Act is accumulated
and communicated to our management, including its principal executive and principal financial officers, or persons performing
similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management carried out an evaluation
under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness
of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934 ("Exchange Act").
Changes
in Internal Control over Financial Reporting
There
have been no changes in our internal control over financial reporting identified in connection with the evaluation required by
paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during our last fiscal quarter that have materially affected,
or are reasonably likely to materially affect, our internal control over financial reporting.
PART
II — OTHER INFORMATION
ITEM
1. LEGAL PROCEEDINGS
None.
ITEM
1A. RISK FACTORS
We
are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide
the information under this item.
ITEM
2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
On
June 8, 2012, Mobile Star Corp. (the “Company”) caused to be issued 20,281,175 newly issued shares of common stock
in execution of a Subscription Agreement (the “Agreement”) and for consulting services. As discussed further herein
16,531,175 of these shares were issued pursuant to the Agreement. The remaining 3,750,000 shares were issued for consulting services
as follows; 1,875,000 to private consultant, Asher Zwebner and 1,875,000 shares to consulting firm, OTZAROT TARSHISH NECHASIM
VEHASHKAOT LTD.
On
June 8, 2012 The Company issued restricted shares of common stock in connection with the Agreement, which was entered between
the Company and Arm Fund Partners, Inc. (“Arm Fund”). Therefore, on June 8, 2012, Arm Fund acquired control of 16,531,175
shares of the Company’s issued and outstanding common stock, which represents approximately 66% of the Company’s total
issued and outstanding common stock at the time. Pursuant to the Agreement, Arm Fund paid an aggregate purchase price of two hundred
and fifty thousand dollars ($250,000) in exchange for the shares.
Subsequent
to the quarter, we did not issue any unregistered securities other than as previously disclosed.
ITEM
3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM
4. MINING SAFETY DISCLOSURE
NOT
APPLICABLE
ITEM
5. OTHER INFORMATION
Quarterly
Events:
On
April 27, 2012 the Company issued a press release announcing the designation of Series B Preferred Convertible shares which is
designed to allow current and prospective shareholders to participate in the Company ownership through a different class of stock
but one that is still convertible to common shares with voting rights.
On
June 01, 2012 MBST announced in a press release the appointment of Mr. George Ivakhnik as the Company's new President, Secretary,
and Treasurer, effective immediately. Mr. Ivakhnik was appointed as the CEO of the Company in February of 2012.
The
Board also authorized the issuance of preferred A and C class shares. Class A and C preferred shares are designed for specific
deal objectives.
On
June 08, 2012 the Company issued a press release announcing an agreement entered into to acquire interest in two projects: 1.)
Four-season NY-based land resort development and 2.) Up to 49% of Star-Show, Inc., a worldwide karaoke booth manufacturer and
distributor.
On
June 8, 2012, Mobile Star Corp. (the “Company”) caused to be issued 20,281,175 newly issued shares of common stock
in execution of a Subscription Agreement (the “Agreement”) and for consulting services. As discussed further herein
16,531,175 of these shares were issued pursuant to the Agreement. The remaining 3,750,000 shares were issued for consulting services
as follows; 1,875,000 to private consultant, Asher Zwebner and 1,875,000 shares to consulting firm, OTZAROT TARSHISH NECHASIM
VEHASHKAOT LTD.
On
June 8, 2012 The Company issued restricted shares of common stock in connection with the Agreement, which was entered between
the Company and Arm Fund Partners, Inc. (“Arm Fund”). Therefore, on June 8, 2012, Arm Fund acquired control of 16,531,175
shares of the Company’s issued and outstanding common stock, which represents approximately 66% of the Company’s total
issued and outstanding common stock at the time. Pursuant to the Agreement, Arm Fund paid an aggregate purchase price of two hundred
and fifty thousand dollars ($250,000) in exchange for the shares.
On
June 8, 2012 Ruth Katz resigned from the position of Secretary, Treasurer and Accounting Officer with the Company, but not before
appointing George Ivakhnik to take over his position as President, Secretary, Treasurer, and Accounting Officer. The resignation
was not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or
practices. Mr. Ivakhnik already holds the positions of Chief Executive Officer and is a member of the Board of Directors of the
Company.
On
June 8, 2012 Judah Steinberger resigned from his directorship position, as his last remaining post with the Company. The resignation
was not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or
practices.
On
June 12, 2012 MBST issued a press release announcing an agreement entered into to provide construction completion funds to a Long
Beach, CA based Venue known as “The Vault” 22,000 square foot entertainment venue facility being built with state
of the art sound and stage equipment and will be an attraction for Long Beach's burgeoning entertainment district."
Item
6. Exhibits
3.1
|
|
Articles
of Incorporation (Filed as Exhibit 3.1 to Registration Statement on Form S1, filed with the Securities and Exchange Commission
on August 8, 2008)
|
3.2
|
|
Bylaws
of the Company (Filed as Exhibit 3.2 to Registration Statement on Form S1, filed with the Securities and Exchange Commission
on August 8, 2008)
|
31.01
|
|
Certification
of Principal Executive Officer Pursuant to Rule 13a-14 (
Filed herewith)
|
31.02
|
|
Certification
of Principal Financial Officer Pursuant to Rule 13a-14
(Filed herewith)
|
32.01
|
|
CEO
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act
(Filed herewith)
|
32.02
|
|
CFO
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act
(Filed herewith)
|
SIGNATURES
In accordance
with the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
Mobile
Star, Corp.
A
Delaware corporation
August 17, 2012
|
By:
|
/S/
George Ivakhnik
|
|
|
George Ivakhnik
|
|
Its:
|
CEO, Treasurer&
|
|
|
Principal
Accounting and Financial Officer
Secretary
and Director
|
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