VOIS INC. - 10-K/A - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Edgar Glimpses Via Acquire Media NewsEdge) We were a social commerce website designed so that people could easily find and
do business with buyers and sellers of on-demand work or manufacturing around
the world. Our goal was to make doing business simple, using our online social
We were a development stage company through fiscal 2012. During fiscal 2008 and
continuing through fiscal 2012 we completed certain technology milestones which
were necessary to the full launch of our business, including our new User
Interface Design, Usability Testing and Site Evaluation. We believe that
designing an effective User Interface Design, which determines how easily users
can complete their tasks and accomplish their goals, is critical to product
success. Usability Testing puts a prototype or application in the hands of
potential users in order to gain their direct feedback on how a design can be
improved and Site Evaluation identifies where a site succeeds and how it can be
improved. In December 2009, as a result of these efforts, we soft launched the
new social sourcing version of VOIS launch of the Alpha version of the website
was launched in February 2010. We are incorporating a "freemium" component in
our revenue model. "Freemium" is a term used to describe a free version
supported by a paid premium version. This model uses free as a form of marketing
to put the product in the hands of the maximum number of people, converting just
a small fraction to paying customers.
On October 19, 2012, VOIS Inc. (the "Company", or "VOIS") entered into an
Agreement and Plan of Merger (the "Merger Agreement") with Mind Solutions, Inc.,
a Nevada corporation ("MSI"), Mind Solutions, Inc., an Ontario corporation
("MSIC") and Mind Solutions Acquisition Corp., a Nevada corporation ("MSAC")
which is a wholly-owned subsidiary of our company formed for this transaction.
Under the terms of the Merger Agreement, MSAC was merged into MSI and MSI became
a wholly-owned subsidiary of VOIS (the "Merger") The stockholders of MSI were
issued a total of 196,000,000 shares of the Company's common stock in exchange
for 100% of the outstanding shares of MSI.
Our business and operations are now the business and operations of MSI.
We have generated minimal revenues since inception. Our revenues alone are
insufficient to pay our operating expenses and our ability to continue as a
going concern is dependent upon our ability to obtain the necessary financing to
meet our obligations and repay our current and future liabilities when they
become due until such time, if ever, that we are able to generate sufficient
revenues to attain profitable operations. We have experienced losses and
negative cash flows from operations since inception and at September 30, 2012 we
had a working capital deficit of $806,194 and an accumulated deficit of
$30,819,609. The report of our independent registered public accounting firm on
our financial statements for fiscal 2012 contained an explanatory paragraph
regarding our ability to continue as a going concern. There can be no assurance
that acceptable financing to fund our ongoing operations can be obtained on
suitable terms, if at all. If we are unable to obtain the financing necessary to
support our operations, we may be unable to continue as a going concern. In that
event, we may be forced to cease operations and our stockholders could lose
their entire investment in our company.
Results of Operations
Year ended September 30, 2012
During the years ended September 30, 2012 and 2011we had no revenue. We are
aggressively looking for ways to leverage our technology to develop revenue
Selling, general and administrative expense. For the year ended September 30,
2012, selling, general and administrative expenses increased approximately 75.6%
as compared to the year ended September 30, 2011. For the year ended September
30, 2012 and 2011 general and administrative expenses consisted of the
Consulting $ 554,100 $ 393,290
Employee compensation - 132,750
Professional fees 210,223 98,198
Product development - 9,617
Depreciation and amortization 4,082 51,711
Other 8,414 952
Finance expense 428,981 -
$ 1,205,800 $ 686,518
· For the year ended September 30, 2012, consulting expense increased to
$554,100 as compared to $393,290, primarily as a result of a limited use of
consultants versus the prior year.
· For the year ended September 30, 2012, we had no employee compensation and
accrued no salaries and issued no common stock options for employees, as
compared to accrued salaries and related expenses of $132,750 in the prior
· For the year ended September 30, 2012, professional fee expense increased
to $210,223 as compared to $98,198. Professional fee expense increased
primarily due to increased legal fees from on-going litigation and other
general business activity, as compared to the prior year.
· For the year ended September 30, 2012, product development expense amounted
to $0 as compared to $9,617 for the year ended September 30, 2011. The
decreasewas due to limited resources for product development activities.
· For the year ended September 30, 2012, depreciation and amortization
expense amounted to $4,082 as compared to $51,711 for the year ended
September 30, 2011, a decrease of $47,629, or 92%. The decrease is due
primarily to capitalized web development costs which were fully amortized
during fiscal 2011.
· For the year ended September 30, 2012, Other expense which includes repairs
and maintenance, postage, dues and subscriptions, supplies, and the write
off of other assets, amounted to $8,414 as compared to
$952 for the year ended September 30, 2011.
For the year ended September 30, 2012, finance expense from the loss on
conversion of debt, amounted to $428,981 as compared to $0 for the year
ended September 30, 2011.
Interest expense. For the year ended September 30, 2012, interest expense
increased to $35,374 as compared to $32,217 for the year ended September 30,
2011. The increase was due to additional interest expense incurred related to
the amount owed on legal judgments which occurred during fiscal 2011.
Liquidity and Capital Resources
Liquidity is the ability of a company to generate adequate amounts of cash to
meet its needs for cash. The following table provides certain selected balance
sheet comparisons between September 30, 2012 and September 30, 2011:
September 30, September 30, $ %
2012 2011 Change Change
Working Capital $ (806,195) $ (1,403,437) $ 597,242 (42.6 )%
Cash 58 667 (609) (91.3)%
Total current assets 58 667 (609) (91.3)%
Total assets 3,461 14,237 (10,766) (75.7)%
Accounts payable and accrued
liabilities 446,487 1,073,338 (626,851 ) (58.4 )%
Notes payable and accrued
interest 359,766 330,766 29,000 8.8 %
Total current liabilities 806,252 1,404,104 (597,851 ) (42.6 )%
Total liabilities 806,252 1,404,104 (597,851 ) (42.6 )%
At September 30, 2012 our working capital deficit decreased as compared to
September 30, 2011 primarily as a result of a decrease in current liabilities of
$597,851, offset by a decrease in cash resulting from operational losses.
Net cash used for continuing operating activities during fiscal 2012 was $33,609
as compared to $52,902 for fiscal 2011. Items totaling approximately $1,019,982
contributing to the net cash used in continuing operating activities for fiscal
• $591,000 representing the value of shares issued to consultants and
• an increase in accrued interest payable of $29,000
• a decrease in accounts payable and accrued liabilities of $577,398,
• $4,083 of depreciation and amortization, which included
approximately $2,668 in amortization of web development costs.
• $6,084 in the write down of certain assets.
Net cash used for continuing operating activities during fiscal 2011 was
$52,902. Items totaling approximately $665,833 contributing to the net cash used
in continuing operating activities for fiscal 2011 include:
• $36,750 representing the value of shares issued to officers and employees,
• an increase in accrued interest payable of $36,967
• an increase in accounts payable and accrued liabilities of $540,405, and
• $51,711 of depreciation and amortization, which included approximately
$47,137 in amortization of web development costs.
Net cash used in investing activities was $0 for both fiscal 2012 and 2011.
Net cash provided by financing activities was $33,000 during fiscal 2012 as
compared to $50,100 for fiscal 2011. During the fiscal 2012 period we generated
$33,000 from the sale of our common stock.
During the fiscal 2011 period we generated $50,100 from the sale of 800,000
shares of our common stock.
Critical Accounting Policies
Website Development Costs
We account for software development costs in accordance with several accounting
pronouncements, including FASB ASC 730, Research and Development, FASB ASC
350-40, Internal-Use Software, FASB ASC 985-20, Costs of Computer Software to be
Sold, Leased, or Marketed and FASB ASC 350-50, Website Development Costs. As of
September 30, 2012, we have capitalized certain internal use software and
website development costs amounting to approximately $507,560. The estimated
useful life of costs capitalized is evaluated for each specific project and is
currently being amortized over two years.
In December 2004, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 123(R), "Share-Based Payment," which replaced SFAS No. 123 and superseded
Accounting Principles Board ("APB") Opinion No. 25. Under SFAS No. 123(R) now
FASB ASC 718, Compensation-Stock Compensation, companies are required to measure
the compensation costs of share-based compensation arrangements based on the
grant-date fair value and recognize the costs in the financial statements over
the period during which employees are required to provide services. Share-based
compensation arrangements include stock options, restricted share plans,
performance-based awards, share appreciation rights and employee share purchase
plans. In March 2005 the SEC issued Staff Accounting Bulletin No. 107, or "SAB
107". SAB 107 expresses views of the staff regarding the interaction between
FASB ASC 718 and certain SEC rules and regulations and provides the staff's
views regarding the valuation of share-based payment arrangements for public
companies. FASB ASC 718 permitted public companies to adopt its requirements
using one of two methods. On April 14, 2005, the SEC adopted a new rule amending
the compliance dates for FASB ASC 718. Companies may elect to apply this
statement either prospectively, or on a modified version of retrospective
application under which financial statements for prior periods are adjusted on a
basis consistent with the pro forma disclosures required for those periods under
SFAS 123. Effective with its fiscal 2006 year, we adopted the provisions of
FASB ASC 718 and related interpretations as provided by SAB 107 prospectively.
As such, compensation cost is measured on the date of grant as its fair value.
Such compensation amounts are amortized over the respective vesting periods of
the options granted.
Accounting Pronouncements Recently Adopted
In February 2010, the FASB issued ASU No. 2010-09, "Subsequent Events (Topic
855)" ("ASU 2010-09") which provides an update to Topic 855, "Subsequent
Events". This update clarifies that an SEC filer is required to evaluate
subsequent events through the date that the financial statements are issued and
removes the requirement for SEC filers to disclose the date through which
subsequent events have been evaluated. This guidance became effective upon
issuance and has been adopted by the Company.
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