The accompanying notes are an integral part of these unaudited financial statements.
The accompanying notes are an integral part of these unaudited financial statements.
The accompanying notes are an integral part of these unaudited financial statements.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
NOTE 1: BASIS OF PRESENTATION
Basis of Presentation
The unaudited interim financial statements of Moms Online, Inc. (the Company) have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial information in accordance with Securities and Exchange Commission (SEC) Regulation S-X rule 8-03. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, the unaudited interim financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position and the results of operations and cash flows for the interim periods presented herein. The financial data and other information disclosed in these notes to the interim financial statements related to the period are unaudited. The results for the three and nine month period ended September 30, 2016 are not necessarily indicative of the results to be expected for any subsequent quarters or for the entire year ending December 31, 2016. These financial statements should be read in conjunction with the financial statements of the Company for the year ended December 31, 2015.
Reclassifications
Certain prior year amounts have been reclassified to conform to the current year presentation.
NOTE 2: GOING CONCERN AND CONTINGENCIES
Going Concern
As shown in the accompanying financial statements, we have incurred losses in each year since inception and have an accumulated deficit of $827,447 as of September 30, 2016. These conditions raise substantial doubt as to our ability to continue as a going concern. In response to these conditions, we may raise additional capital through the sale of equity securities, through an offering of debt securities or through borrowings from financial institutions or individuals. The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern. The company did raise $328,150 during the nine months ended September 30, 2016 through the sale of 367,534 shares of its common stock, which is greater than the loss of $271,431 recorded for the nine months ended September 30, 2016.
Repayment of investment from Sister Corp
There is an informal agreement between Social Quotient, Inc. (SQI), the companys affiliate (sister corp.) and the Company that calls for the company to give recognition to SQI for the equity contributed to the company from inception to the future date in which the company might be engaged in a merger or change in control. The amount of consideration contingently due from the company was $95,224 and $96,650 as of September 30, 2016 and 2015, respectively. This contingent liability amount can be satisfied in cash (minimum), or currently $.02 per share; debt; or equity conversion in the event of a merger or transaction in which there is a change in Control.
NOTE 3: RELATED PARTY TRANSACTIONS AND RELATIONSHIPS
All directors of the company are related parties. IceLounge Media, Inc. ILMI funded 100% of the development of the
Momscorner.com
website prior to December 31, 2013. ILMI spun off the website to the Company. All amounts due to related parties were converted to stock in 2013 by prior agreement. The stock fair value was determined to be $0.5168 per share, based on the fair values of the website and the anticipated public filing.
During the nine months ended September 30, 2016 and 2015, ILMI paid certain expenses for and on behalf of the Company of $13,665 and $68,538 respectively, which were accounted for as amounts due to parent and are due on demand. As of September 30, 2016 and December 31, 2015, the outstanding amounts due to parent were $159,331 and $145,666, respectively.
In addition, Social Quotient Inc. paid $6,228 and $15,706 of expenses, respectively, for and in behalf of the Company, for the nine months ended September 30, 216 and 2016, respectivelywhich were accounted for as paid in capital. Also, the Company re-paid SQI $15,000 and $0, during the nine months ended September 30, 2016 and 2015, respectively, which was accounted for as a reduction of paid-in capital.
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On June 6, 2016 the Board of Directors of IMLI agreed to transfer from its own holdings of the companys common stock, 25,000 shares to a company shareholder because he was the first to invest in all three of the IMLI family of companies.
The Company licenses its technology platform from ILMI, under an Agreement which calls for an automatic 12 month renewal each year on October 1, and a monthly lease payment of $4,167. The company accrued $37,500 for platform lease expense for each of the nine month periods ended September 30, 2016 and 2015.
WB Capital, a related party with common principal ownership, provides Merger & Acquisition and project management services to the Company as a consultant. There is no written agreement governing the relationship. The Company accrued $2,500 a month for these services. Due to the Companys lack of available cash, the amounts were not paid during either of the nine months ended September 30, 2016 or September 30, 2015. Consequently the Company recorded an additional liability of $22,500 as of September 30, 2016 for a total of $52,500 as of the same date. The Company owed WB Capital $30,000 as of December 31, 2015.
Scott E. Lybbert, Acting CFO and Director, provides accounting and reporting services to the Company as a consultant. There is no written agreement governing the relationship. The Company paid Mr. Lybbert $1,000 and $6,250 for the nine months ended September 30, 2016 and 2015, respectively. Mr. Lybbert hired support staff to ensure a more proper segregation of duties. Consequently, in addition to accruing $1,250 a month (for nine months), an additional $375 (for three months), and $208 (for an intern) has been accrued for these services. Consequently, the company recorded an additional liability of $12,708 as of September 30, 2016 for a total of $18,958 as of the same date. The Company owed Mr. Lybbert $6,250 as of December 31, 2015.
The company pays a financial services consultant, who began working for the company at the end of the first quarter of 2016. The company has accrued invoices from this consultant in the amount of $13,200 for the nine months ended September 30, 2016, of which $6,800 have been paid, leaving a balance payable of $6,400 as of September 30, 2016.
NOTE 4: WEBSITE AND INTANGIBLE ASSETS
Since inception, most of the Companys resources have been focused on creating its business model and related website. Certain costs incurred in development of our website were capitalized with a total of $86,486 allocated to our website development by December 31, 2014. The Company capitalized no cost ($0) for the nine months ended September 30, 2016 or 2015. The Company began amortizing its capitalized website costs over a three year period, beginning January 1, 2015 since development had been completed. Amortization expense for the nine months ended September 30, 2016 and 2015 was $21,622. Accumulated amortization as of September 30, 2016 was $50,450.
NOTE 5: EQUITY
Common stock
The authorized capital stock of the Company consists of 75,000,000 shares of Common stock, par value $.001 per share, of which 4,773,446 were outstanding as of September 30, 2016.
The holders of Common Stock are entitled to one vote per share on each matter submitted to a vote at any rights and, therefore, a majority of the shares of outstanding Common Stock will be able to elect the entire board of directors and, if they do so, minority shareholders would not be able to elect any persons to the board of directors. Moms Onlines bylaws provide that a majority of the issued and outstanding shares of Moms Online constitutes a quorum for shareholders meetings.
Shareholders of Moms Online have no preemptive rights to acquire additional shares of Common Stock or other securities. The Common Stock is not subject to redemption and carries no subscription or conversion rights. In the event of liquidation of Moms Online, the shares of Common Stock are entitled to share equally in corporate assets after satisfaction of all liabilities.
Holders of Common Stock are entitled to receive such dividends, as the board of directors may from time to time declare out of funds legally available for the payment of dividends. Moms Online seeks growth and expansion of its business through the reinvestment of profits, if any, and does not anticipate that we will pay dividends in the foreseeable future.
During the nine months ended September 30, 2016 the company sold 367,534 shares of the Companys common stock for $328,150 at prices ranging from $.75 - $1.00 per share, respectively, to one existing and 27 new shareholders.
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The company also recognized $9,370 of deferred stock compensation during the nine months ended September 30, 2016 to recognize two quarters of a four year stock compensation agreement calling for the payment of 100,000 shares, valued at the time of agreement (October 30, 2015) at $.50 a share, over a four year period to a consultant. These shares have not been issued yet due to a yet unfulfilled vesting clause, and are accounted for as a deferred compensation component of paid in capital. The company also recognized $4,998 of deferred stock compensation during the nine months ended September 30, 2016 to recognize one month of a two year stock compensation agreement calling for the payment of 40,000 shares, valued at the stated price and stock value at the time of agreement (June 1, 2016) at $.75 a share, over a two year period to a second consultant/shareholder. These shares have not been issued yet due to a yet unfulfilled vesting clause, and are accounted for as a deferred compensation component of paid in capital.
The company recognized a one-time expense of $23,438 for the issuance of 31,250 shares to M. Kevin Ghim, the companys President, for services rendered.
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