Delaware
|
95-4439334
|
(State or other jurisdiction of
|
(I.R.S. Employer
|
incorporation or organization)
|
Identification No.)
|
Raleigh, North Carolina
|
27607
|
(Address of principal executive offices)
|
(Zip Code)
|
Page No.
|
||
PART I – FINANCIAL INFORMATION
|
||
Item 1.
|
Financial Statements
|
|
Condensed Balance Sheets as of September 30, 2013 (unaudited) and December 31, 2012
|
3
|
|
Condensed Statements of Operations (unaudited) for the three and nine months ended September 30, 2013 and 2012
|
4
|
|
Condensed Statements of Cash Flows (unaudited) for the nine months ended September 30, 2013 and 2012
|
5
|
|
Statement of Stockholders' Deficit as of September 30, 2013 (unaudited) and December 31, 2012
|
6
|
|
Notes to Financial Statements (unaudited)
|
7
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
12
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
16
|
Item 4.
|
Controls and Procedures
|
16
|
PART II – OTHER INFORMATION
|
||
Item 5.
|
Other Information
|
17 |
Item 6.
|
Exhibits
|
18
|
Signatures
|
19
|
September 30,
|
December 31,
|
|||||||
2013
|
2012
|
|||||||
(unaudited)
|
||||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 236,745 | $ | 58,458 | ||||
Restricted cash
|
198,423 | 131,103 | ||||||
Accounts receivable
|
78,899 | 36,050 | ||||||
Prepaid expenses and other current assets
|
65,331 | 96,670 | ||||||
Total current assets
|
579,398 | 322,281 | ||||||
Property and equipment, net
|
87,288 | 149,107 | ||||||
Capitalized software, net
|
818,387 | 618,557 | ||||||
Intangible assets, net
|
132,868 | 130,057 | ||||||
Other assets
|
53,864 | 19,440 | ||||||
Assets of discontinued operations
|
- | 15,834 | ||||||
TOTAL ASSETS
|
$ | 1,671,805 | $ | 1,255,276 | ||||
LIABILITIES AND STOCKHOLDERS DEFICIT
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 71,005 | $ | 217,174 | ||||
Notes payable
|
5,025,142 | 5,041,741 | ||||||
Deferred revenue
|
144,178 | 82,308 | ||||||
Settlement related financial instrument liability
|
1,917,500 | 2,065,000 | ||||||
Accrued interest
|
288,502 | 221,404 | ||||||
Other accrued liabilities
|
385,046 | 148,936 | ||||||
Liabilities of discontinued operations
|
- | 5,638 | ||||||
Total current liabilities
|
7,831,373 | 7,782,201 | ||||||
Long-term liabilities:
|
||||||||
Notes payable-Related Party
|
14,557,051 | 14,557,051 | ||||||
Notes payable - Other
|
9,205,570 | 6,075,267 | ||||||
Deferred revenue
|
- | 1,028 | ||||||
Total long-term liabilities
|
23,762,621 | 20,633,346 | ||||||
Total liabilities
|
31,593,994 | 28,415,547 | ||||||
Commitments and contingencies
|
||||||||
Stockholders’ deficit:
|
||||||||
Preferred stock, $0.001 par value, 5,000,000 shares authorized, no shares issued and outstanding at
|
- | - | ||||||
September 30, 2013 and December 31, 2012
|
||||||||
Common stock, $0.001 par value, 45,000,000 shares authorized, 18,352,542 shares issued and
|
18,353 | 18,353 | ||||||
outstanding at September 30, 2013 and December 31, 2012
|
||||||||
Additional paid-in capital
|
90,321,324 | 67,157,841 | ||||||
Accumulated deficit
|
(120,261,866 | ) | (94,336,465 | ) | ||||
Total stockholders’ deficit
|
(29,922,189 | ) | (27,160,271 | ) | ||||
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
|
$ | 1,671,805 | $ | 1,255,276 | ||||
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
September 30,
|
September 30,
|
|||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||
REVENUES:
|
||||||||||||||||
Mobile Platform License and Services Fees
|
$ | 102,326 | $ | 29,405 | $ | 227,534 | $ | 94,328 | ||||||||
Total revenues
|
102,326 | 29,405 | 227,534 | 94,328 | ||||||||||||
COST OF REVENUES
|
120,939 | 44,976 | 396,166 | 90,585 | ||||||||||||
GROSS PROFIT (LOSS)
|
(18,613 | ) | (15,571 | ) | (168,632 | ) | 3,743 | |||||||||
OPERATING EXPENSES:
|
||||||||||||||||
Sales and marketing
|
214,428 | 206,287 | 766,881 | 599,638 | ||||||||||||
Research and development
|
195,660 | 40,363 | 585,876 | 73,625 | ||||||||||||
General and administrative
|
317,049 | 427,398 | 1,081,558 | 968,749 | ||||||||||||
Loss on disposal of fixed assets | 72,016 | - | 110,952 | - | ||||||||||||
Total operating expenses
|
799,153 | 674,048 | 2,545,267 | 1,642,012 | ||||||||||||
LOSS FROM OPERATIONS
|
(817,766 | ) | (689,619 | ) | (2,713,899 | ) | (1,638,269 | ) | ||||||||
OTHER (EXPENSE):
|
||||||||||||||||
Interest expense, net
|
(611,082 | ) | (428,726 | ) | (1,592,780 | ) | (1,203,037 | ) | ||||||||
Gain on legal settlements and insurance claims | 51,030 | 3,713 | 56,265 | 3,815 | ||||||||||||
Loss on debt extinguishment
|
- | - | (21,793,055 | ) | - | |||||||||||
Change in market value of settlement related financial instrument
|
147,500 | - | 147,500 | (442,500 | ) | |||||||||||
Total other expense
|
(412,552 | ) | (425,013 | ) | (23,182,070 | ) | (1,641,722 | ) | ||||||||
LOSS FROM CONTINUING OPERATIONS
|
(1,230,318 | ) | (1,114,632 | ) | (25,895,969 | ) | (3,279,991 | ) | ||||||||
DISCONTINUED OPERATIONS
|
||||||||||||||||
Income (loss) from discontinued operations
|
(14,941 | ) | 46,207 | (14,778 | ) | 110,726 | ||||||||||
Impairment of assets of discontinued operations
|
- | - | (14,654 | ) | - | |||||||||||
NET LOSS
|
$ | (1,245,259 | ) | $ | (1,068,425 | ) | $ | (25,925,401 | ) | $ | (3,169,265 | ) | ||||
NET LOSS PER COMMON SHARE:
|
||||||||||||||||
Basic and fully diluted from continuing operations
|
$ | (0.07 | ) | $ | (0.06 | ) | $ | (1.41 | ) | $ | (0.18 | ) | ||||
Basic and fully diluted from discontinued operations
|
$ | (0.00 | ) | $ | 0.00 | $ | (0.00 | ) | $ | 0.01 | ||||||
WEIGHTED-AVERAGE NUMBER OF SHARES USED IN COMPUTING NET LOSS PER COMMON
|
||||||||||||||||
SHARE:
|
||||||||||||||||
Basic and fully diluted
|
18,352,542 | 18,352,542 | 18,352,542 | 18,352,542 |
Nine Months Ended
|
||||||||
September 30,
|
September 30,
|
|||||||
2013
|
2012
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net loss
|
$ | (25,925,401 | ) | $ | (3,169,265 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Depreciation and amortization
|
113,308 | 76,425 | ||||||
Loss on disposal of fixed assets
|
125,606 | - | ||||||
Non cash amortization of debt discount
|
72,364 | - | ||||||
Equity-based compensation
|
35,624 | 26,109 | ||||||
Loss on debt extinguishment
|
21,793,055 | - | ||||||
Changes in assets and liabilities:
|
||||||||
Accounts receivable
|
(42,849 | ) | (91,408 | ) | ||||
Contracts receivable
|
(6,200 | ) | ||||||
Prepaid expenses
|
31,339 | (85,706 | ) | |||||
Other assets
|
(34,424 | ) | (168 | ) | ||||
Accounts payable
|
(146,169 | ) | 92,351 | |||||
Deferred revenue
|
55,206 | 217,806 | ||||||
Accrued and other expenses
|
155,708 | 394,385 | ||||||
Net cash used in operating activities
|
(3,766,633 | ) | (2,545,671 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Purchases of property and equipment
|
(21,834 | ) | (25,530 | ) | ||||
Purchase of software license
|
- | (75,000 | ) | |||||
Capitalized patent development costs
|
(14,440 | ) | (17,248 | ) | ||||
Capitalized software
|
(287,628 | ) | (749,160 | ) | ||||
Net cash used in investing activities
|
(323,902 | ) | (866,938 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Restricted cash used to pay IDB interest expense
|
135,566 | 152,904 | ||||||
Deposit of cash to IDB restricted account
|
(202,886 | ) | (281,341 | ) | ||||
Proceeds from debt borrowings
|
4,375,000 | 3,639,253 | ||||||
Repayments of debt borrowings
|
(38,858 | ) | (12,172 | ) | ||||
Net cash provided by financing activities
|
4,268,822 | 3,498,644 | ||||||
NET DECREASE IN CASH AND CASH EQUIVALENTS
|
178,287 | 86,035 | ||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
|
58,458 | 165,139 | ||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD
|
$ | 236,745 | $ | 251,174 | ||||
Supplemental disclosures of cash flow information:
|
||||||||
Cash paid during the period for interest
|
$ | 1,525,682 | $ | 748,778 | ||||
Non-cash investing and financing activities:
|
||||||||
Financed purchase of office furniture
|
$ | 40,000 | $ | - | ||||
Recorded debt discount associated with beneficial conversion feature
|
$ | 1,334,804 | $ | - |
Common Stock
|
Additional
|
|||||||||||||||||||
Shares
|
Paid-In
|
Accumulated
|
Totals
|
|||||||||||||||||
Par Value
|
Capital
|
Deficit
|
||||||||||||||||||
BALANCES, DECEMBER 31, 2012
|
18,352,542 | $ | 18,353 | $ | 67,157,841 | $ | (94,336,465 | ) | $ | (27,160,271 | ) | |||||||||
Equity-based compensation
|
12,181 | 12,181 | ||||||||||||||||||
Net loss
|
(1,427,804 | ) | (1,427,804 | ) | ||||||||||||||||
BALANCES, MARCH 31, 2013
|
18,352,542 | 18,353 | 67,170,022 | (95,764,269 | ) | (28,575,894 | ) | |||||||||||||
Equity-based compensation
|
11,917 | 11,917 | ||||||||||||||||||
Beneficial conversion feature recorded as a result of June 27, 2013 debt modification
|
22,218,055 | 22,218,055 | ||||||||||||||||||
Net loss
|
(23,252,338 | ) | (23,252,338 | ) | ||||||||||||||||
BALANCES, JUNE 30, 2013
|
18,352,542 | 18,353 | 89,399,994 | (119,016,607 | ) | (29,598,260 | ) | |||||||||||||
Equity-based compensation
|
11,526 | 11,526 | ||||||||||||||||||
Beneficial conversion feature recorded as a result of issuance of convertible debt
|
909,804 | 909,804 | ||||||||||||||||||
Net loss
|
(1,245,259 | ) | (1,245,259 | ) | ||||||||||||||||
BALANCES, SEPTEMBER 30, 2013
|
18,352,542 | $ | 18,353 | $ | 90,321,324 | $ | (120,261,866 | ) | $ | (29,922,189 | ) | |||||||||
●
|
Licensing of our SaaS (“Software as a Service”) Mobile App Development Platform to our customers who design and build their own apps;
|
●
|
Custom mobile application design and development services provided by the Company;
|
●
|
Mobile application marketing services;
|
●
|
Mobile strategy implementation consulting; and
|
●
|
Cloud-based software hosting and management services.
|
September 30,
2013
|
December 31,
2012
|
|||||||
Capitalized software
|
$ | 952,139 | $ | 672,359 | ||||
Less accumulated amortization
|
(133,752 | ) | (53,802 | ) | ||||
Capitalized software, net
|
$ | 818,387 | $ | 618,557 |
Note Description
|
September 30,
|
December 31,
|
|||||||||||
2013
|
2012
|
Maturity
|
Rate
|
||||||||||
IDB Bank
|
$ | 5,000,000 | $ | 5,000,000 |
May-14
|
4.0 | % | ||||||
Insurance premium note
|
- | 23,987 |
Jun-13
|
6.9 | % | ||||||||
Capital lease obligations - Noteholder lease
|
136,893 | 150,072 |
Aug-19
|
8.0 | % | ||||||||
Capital lease obligations - Office furniture
|
38,310 | - |
Sep-18
|
9.8 | % | ||||||||
Convertible notes - Related parties
|
14,557,051 | 14,557,051 |
Nov-16
|
8.0 | % | ||||||||
Convertible notes, net of discount
|
9,055,509 | 5,942,949 |
Nov-16
|
8.0 | % | ||||||||
Total debt
|
28,787,763 | 25,674,059 | |||||||||||
Less: current portion of long term debt
|
|||||||||||||
Capital lease obligations
|
25,142 | 17,754 | |||||||||||
IDB Bank
|
5,000,000 | 5,000,000 | |||||||||||
Insurance premium note
|
- | 23,987 | |||||||||||
Total current portion of long term debt
|
5,025,142 | 5,041,741 | |||||||||||
Debt - long term
|
$ | 23,762,621 | $ | 20,632,318 | |||||||||
●
|
a maturity date of November 16, 2016;
|
●
|
an interest rate of 8% per year;
|
●
|
optional conversion at a Noteholders’ request;
|
●
|
the borrowing commitment was increased by $10 million to $33.3 million;
|
●
|
a conversion price that is the greater of (i) 80% of the lowest closing price of the Common Stock in the twelve-month period immediately preceding the date of conversion or (ii) $0.50; and
|
●
|
if at the time any particular requested conversion the Company does not have the number of authorized shares of Common Stock sufficient to allow for such particular conversion, the Noteholders may request that the Company call a special meeting of the stockholders specifically for the purpose of increasing the number of the authorized shares of Common Stock to cover the remaining portion of the Notes outstanding.
|
●
|
volatility of stock price was determined to be 47% and was based on the volatility of the Company’s stock price as quoted on the Over-the-Counter Bulletin Board (the “OTCBB”) for the period of 3.4 years, which approximates the period remaining until maturity of the convertible instrument;
|
●
|
the risk free rate of 1.41%;
|
●
|
the credit spread over the risk free rate was determined to be approximately 20%, which was derived from a combination of the credit spread of CCC rated bonds with added premium for lack of marketability of the convertible instrument;
|
●
|
the nodes of the binomial model were extended for 3 years, which approximates the time period until maturity of the convertible instrument; and
|
●
|
the conversion ratio varied from approximately 1.39 to .56 shares per dollar, depending on the node of the conversion tree. The conversion ratio varied due to projected change in value of the stock driven by historical volatility of 47%.
|
Year:
|
||||
2013
|
$ | 9,818 | ||
2014
|
39,259 | |||
2015
|
39,259 | |||
2016
|
39,259 | |||
2017
|
39,259 | |||
Thereafter
|
53,601 | |||
220,455 | ||||
Less amount representing interest
|
(45,252 | ) | ||
Capital lease obligations
|
$ | 175,203 |
Year:
|
||||
2013
|
$ | 897 | ||
2014
|
119,775 | |||
2015
|
162,528 | |||
2016
|
165,678 | |||
2017
|
167,786 | |||
Thereafter
|
216,500 | |||
Total
|
$ | 833,164 |
Number of Shares
|
Weighted Average Exercise Price
|
Weighted Average Remaining Contractual
Term
|
Aggregate
Intrinsic
value
|
|||||||||||||
Outstanding, December 31, 2012
|
450,900 | $ | 2.02 | |||||||||||||
Cancelled
|
(164,900 | ) | 1.53 | |||||||||||||
Issued
|
249,370 | 1.62 | ||||||||||||||
Outstanding, September 30, 2013
|
535,370 | $ | 1.96 | 5.2 | 24,300 | |||||||||||
Vested and exercisable, September 30, 2013
|
191,750 | $ | 2.76 | 4.9 | 17,825 | |||||||||||
●
|
Release of MobileSmith™ 3.0 platform, which includes improvements to the user interface and streamlined workflow;
|
●
|
Release of iPad AppCanvas™ on July 19, 2013. With this release our platform can produce native iPad apps with the same ease and agility as the iPhone and Android phone apps. Tablets are currently driving mobile app usage and MobileSmith™ became one of the first SaaS app platforms to accommodate this trend;
|
●
|
Introduction of Enterprise App Versioning (EAV), which allows for more structured ways of app version development and release to internal and public app stores. EAV also allows managing of multiple live app versions without forcing users to download a new version of an app; and
|
●
|
In September of 2013, we added Device Content Management (DCM) functionality, which allows customer’s data to be easily integrated in our platform. DCM allows for development of apps that use content from existing databases. DCM enabled apps are not only able to receive push updates from the servers, but can also push data updates back to the servers. DCM functionality significantly increases the range and sophistication of apps that can be built on our platform.
|
●
|
the cost of professional services that include consulting and training was approximately $64,000, compared to zero during the same period of last year; and
|
●
|
outsourced hosting fees associated with the MobileSmith™ platform were approximately $21,000, compared to $9,000 during the same period of last year.
|
●
|
the absence of breach related expenses in the third quarter of 2013 as compared to the third quarter of 2012. Such expenses amounted to approximately $52,000 for the three month period ended September 30, 2012;
|
●
|
the decrease in legal fees of approximately $27,000; and
|
●
|
the decrease in board member fees of approximately $23,000.
|
●
|
the cost of developers servicing the platform and its components was approximately $65,000 compared to approximately $10,000 during the same period of last year;
|
●
|
the cost of professional services that include consulting and training amounted to approximately $165,663 compared to zero during the same period of last year;
|
●
|
the amortization of capitalized software included in cost of revenue was approximately $96,000 compared to $62,000 for the same period of last year; and
|
●
|
outsourced hosting fees associated with the MobileSmith™ platform were approximately $53,000 compared to $30,000 during the same period of last year.
|
●
|
an increase in sales team payroll costs of approximately $72,000;
|
●
|
an increased presence at tradeshows, which resulted in an increase in related expenses of approximately $40,000; and
|
●
|
an increase in costs associated with advertising and promotion of the our platform of approximately $41,000.
|
●
|
additional legal, consulting and other professional fees resulting from the compromise of our internal corporate network in June 2012. During the nine-month period ended September 30, 2013, we continued to incur such expenses, which totaled approximately $73,000;
|
●
|
increase in rent of approximately $18,000;
|
●
|
increase of $71,000 in executive compensation; and
|
●
|
an absence of a $30,000 gain related to the recovery of receivable balance previously written off. This balance was included in general and administrative expense for the nine month period ended September 30, 2012; offset by decreases in IT related expenses of $38,000 and Board member compensation fees of $33,000 due to a decrease in the number of Board members.
|
Exhibit No.
|
Description
|
3.1
|
Amended and Restated Certificate of Incorporation, dated January 4, 2005, as amended to date (incorporated herein by reference to Exhibit 3.1 to our Quarterly Report on Form 10-Q, as filed with the SEC on August 14, 2013)
|
3.2
|
Seventh Amended and Restated Bylaws, effective July 1, 2013 (incorporated herein by reference to Exhibit 3.3 to our Quarterly Report on Form 10-Q, as filed with the SEC on August 14, 2013)
|
10.1
|
Partner Agreement, dated May 24, 2013, by and between Smart Online, Inc. and Jon Campbell (Filed herewith)
|
Certification of Principal Executive Officer Pursuant to Rule 13a-14(a) (Filed herewith)
|
|
Certification of Principal Executive Officer Pursuant to Rule 13a-14(a) (Filed herewith)
|
|
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350 (Furnished herewith)
|
|
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 (Furnished herewith)
|
|
101.1
|
The following materials from the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2013, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Balance Sheets, (ii) the Condensed Statements of Operations, (iii) the Condensed Statements of Cash Flows, (iv) the Statement of Stockholders’ Deficit and (v) related notes to these financial statements, tagged as blocks of text and in detail (Filed herewith)
|
MOBILESMITH, INC.
|
||
By:
|
/s/ Amir Elbaz
|
|
November 25, 2013
|
Amir Elbaz
|
|
Chief Executive Officer
|
||
By:
|
/s/ Gleb Mikhailov
|
|
November 25, 2013
|
Gleb Mikhailov
|
|
Chief Financial Officer
|
h.
|
each Party will provide the other with such information and assistance as may be reasonably requested from time to time in connection with the Program.
|
a.
|
They have the full legal right and corporate power and authority to enter into and perform all of their obligations under this Agreement and to comply with all terms and conditions of this Agreement;
|
b.
|
They will require their employees, agents and contractors to comply with the terms of this Agreement;
|
c.
|
They will comply with all applicable federal, state and local laws in the performance of obligations under this Agreement; and
|
d.
|
They will conduct their respective businesses in a legal and ethical manner, and shall commit no act that would reflect unfavorably on the other. Neither party shall misrepresent the other’s prices, services or products.
|
To Partner at:
|
With a copy to:
|
||
To Smart Online at:
|
|||
Smart Online, Inc.
|
|||
4505 Emperor Blvd.
Suite 320
Durham, NC 27703
|
|||
Attn: Robert Hancock
|
By: |
/s/ Jon W. Campbell
|
By: |
/s/ Robert Hancock
|
||
Name: Jon W. Campbell
|
Name: Robert Hancock
|
||||
Title: PRES/CEO
|
Title: VP Sales
|
||||
Dated: May 24, 2013 | Dated: May 24, 2013 |
·
|
Specific activities that the partner will undertake to market and sell Smart Online products and services. These will be identified during the initial 30 days after partnership is initiated through signing of this document. This will be known as the “go to market plan”.
|
·
|
Partner will provide, at Smart Online’s request, a list of any ongoing opportunities along with their status.
|
·
|
In the case of a sales conflict (both parties are talking to the same opportunity) the companies will rely on a first contact rule to resolve the conflict. Smart Online reserves the right to reject this at its own convenience.
|
·
|
All proposals and pricing submissions to prospective clients will be approved by Smart Online in advance of submission to the prospective client.
|
·
|
Pricing schedules etc.. will be completed on a case by case basis for each opportunity. Should a firm pricing schedule be created it will be added as an addendum to this agreement in the future.
|
1.
|
|
I have reviewed this Quarterly Report on Form 10-Q /A of MobileSmith, Inc.;
|
||
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|||
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|||
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|||
a)
|
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
||
b)
|
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
||
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|||
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
|
|||
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|||
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|||
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Amir Elbaz
|
|
Amir Elbaz
|
|
Chairman and Chief Executive Officer
|
1.
|
|
I have reviewed this Quarterly Report on Form 10-Q /A of MobileSmith, Inc.;
|
||
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|||
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|||
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|||
a)
|
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
||
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|||
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|||
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
|
|||
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|||
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|||
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Gleb Mikhailov
|
|
Gleb Mikhailov
|
|
Chief Financial Officer
|
|
(1)
|
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Amir Elbaz
|
|
Amir Elbaz
|
|
Chairman and Chief Executive Officer
|
|
(1)
|
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Gleb Mikhailov
|
|
Gleb Mikhailov
|
|
Chief Financial Officer
|
4. COMMITMENTS AND CONTINGENCIES (Tables)
|
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company's future obligations under its capital leases | The table below summarizes Companys future obligations under its capital leases:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company's future obligation under the new office and vehicle leases | Table below summarizes Companys future obligation under the new office and vehicle leases:
|
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