10QSB 1 form10qsb.htm QUARTERLY REPORT FOR THE PERIOD ENDED MARCH 31, 2007 Filed by Automated Filing Services Inc. (604) 609-0244 - Coloured (US) Inc.- Form 10-QSB

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-QSB

[ X ] Quarterly Report Under Section 13 or 15(D) of the Securities Exchange Act of 1934
for the quarterly period ended March 31, 2007

[    ] Transition Report Under Section 13 or 15(D) of the Securities Exchange Act of 1934
for the transition period from _____to _____

Commission File Number:  000-52152

COLOURED (US) INC.
(Name of small business issuer as specified in its charter)

NEVADA N/A
(State or other jurisdiction of incorporation or (IRS Employer Identification No.)
organization)  

Suite 5.12, 130 Shaftesbury Avenue, London, England WID 5EU
(Address of principal executive offices)

+44 (0) 20 7031 1189
Issuer's telephone number

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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[ X ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes[ X ] No[    ]

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date. 30,648,666 shares of common stock as of June 20, 2007.

Transitional Small Business Disclosure Format (check one): Yes[    ] No[ X ]

i

FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-QSB contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements involve risks and uncertainties, including statements regarding our capital needs, business plans and expectations. Such forward-looking statements involve risk and uncertainty regarding our ability to achieve commercial levels of sales of our Coloured Mobile Games, our ability to successfully market our Coloured Mobile Games, our ability to continue development and upgrades to the Coloured Mobile Games and our mobile games technology, availability of funds, government regulations, common share prices, operating costs, capital costs and other factors. Forward-looking statements are made, without limitation, in relation to our operating plans, our liquidity and financial condition, availability of funds, operating costs and the market in which we compete. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expect", "plan", "intend", "anticipate", "believe", "estimate", "predict", "potential" or "continue", the negative of such terms or other comparable terminology. Actual events or results may differ materially. In evaluating these statements, you should consider various factors, including the risks outlined in our registration statement on Form SB-2, filed with the Securities and Exchange Commission (the “SEC”) on April 24, 2006, as amended, this quarterly report on Form 10-QSB, and, from time to time, in other reports we file with the SEC. These factors may cause our actual results to differ materially from any forward-looking statement. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

ii

COLOURED (US) INC.

Quarterly Report On Form 10-QSB
For The Quarterly Period Ended
March 31, 2007

INDEX

PART I – FINANCIAL INFORMATION      1
   Item 1. Financial Statements      1
   Item 2. Management’s Discussion and Analysis 2
   Item 3. Controls and Procedures 8
     
PART II – OTHER INFORMATION 9
   Item 1. Legal Proceedings 9
   Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 9
   Item 3. Defaults Upon Senior Securities 9
   Item 4. Submission of Matters to a Vote of Securities Holders 9
   Item 5. Other Information 9
   Item 6. Exhibits 9

iii

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

The following unaudited consolidated financial statements of Coloured (US) Inc. (the “Company”) are included in this Quarterly Report on Form 10-QSB:

  Page
   
Consolidated Balance Sheets as at March 31, 2007 (unaudited) and September 30, 2006 (audited) F-1
   
Consolidated Statements of Operations for the three and six months ended March 31, 2007 and 2006 and for the period from incorporation (May 2, 2003) to March 31, 2007 F-2
   
Consolidated Statements of Cash Flows for the six months ended March 31, 2007 and 2006 and for the period from incorporation (May 2, 2003) to March 31, 2007 F-3
   
Notes to Consolidated Financial Statements  F-4

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COLOURED (US) INC.

(dba CI Mobile Gaming)

(Formerly Emcor Holdings Inc.)

(A Development Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007

(Unaudited)

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED STATEMENTS OF OPERATIONS

CONSOLIDATED STATEMENTS OF CASH FLOWS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Coloured (US) Inc.
(dba CI Mobile Gaming)
(Formerly Emcor Holdings Inc.)
(A Development Stage Company)
Consolidated Balance Sheets

    March 31,     September 30,  
    2007     2006  
ASSETS   (Unaudited)     (Audited)  
Current            
 Cash $  4,543   $  6,695  
 Accounts receivable   -     509  
 VAT receivable   2,597     3,490  
 Prepaids   3,518     -  
    10,658     10,694  
             
Rights and Technology   10,468     14,981  
  $  21,126   $  25,675  
             
             
LIABILITIES            
Current            
 Accounts payable $  117,443   $  42,328  
 Accrued liabilities   32,892     30,787  
 Due to related parties (Note 2)   133,018     66,036  
    283,353     139,151  
             
             
STOCKHOLDERS’ DEFICIENCY            
Capital Stock (Note 3)            
Common Stock            
     Authorized: 100,000,000 shares with $0.001 par value            
     Issued: 30,623,660 (March 31, 2007 and September 30, 2006)   30,624     30,624  
     Additional paid-in capital   3,465,485     3,465,485  
Preferred stock            
     Authorized: 5,000,000 shares with $0.001 par value            
     Issued: Nil   -     -  
Accumulated Comprehensive Loss   (16,474 )   (13,139 )
Deficit – Accumulated during the development stage   (3,741,862 )   (3,596,446 )
    (262,227 )   (113,476 )
  $  21,126   $  25,675  

Contingency (Note 1)

The accompanying notes are an integral part of these consolidated financial statements

F-1

Coloured (US) Inc.
(dba CI Mobile Gaming)
(Formerly Emcor Holdings Inc.)
(A Development Stage Company)
Consolidated Statements of Operations
(Unaudited)

                            Cumulative  
                            From  
                            Incorporation  
    For the Three     For the Three     For the Six     For the Six     May 2,  
    Months Ended     Months Ended Months Ended     Months Ended     2003 to  
    March 31,     March 31,     March 31,     March 31,     March 31,  
    2007     2006     2007     2006     2007  
General and Administrative                              
Expenses                              
   Accounting and auditing $  16,942   $  43,055   $  44,165   $  80,510   $  254,226  
   Advertising   -     -     -     -     1,890  
   Amortization   2,548     2,337     5,159     4,669     19,698  
   Consulting   33,445     3,364     66,510     8,862     162,504  
   Filing fees, net of recovery   1,643     -     (2,562 )   -     8,655  
   Information technology   2,488     682     2,488     1,926     22,425  
   Intellectual property   -     3,000,000     -     3,000,000     3,000,000  
   Investor relations   18,250     -     18,250     -     18,250  
   Legal   2,328     27,209     4,834     47,856     88,394  
   Office and miscellaneous   -     39     -     39     5,135  
   Rent   2,931     2,629     5,805     5,253     38,571  
   Salaries and wages   -     1     -     1,847     104,196  
   Transfer agent fees   125     -     235     -     2,250  
   Travel, net of recovery   (557 )   -     -     -     6,248  
Total General and Administrative                              
Expenses   80,143     3,079,316     144,884     3,150,962     3,732,442  
                               
Loss from Operations   (80,143 )   (3,079,316 )   (144,884 )   (3,150,962 )   (3,732,442 )
                               
Other Income (Expense)                              
   Interest income (expense)   (166 )   (1,528 )   (530 )   (3,389 )   (6,765 )
   Foreign exchange loss   6     -     (2 )   -     (2,869 )
   Miscellaneous income (expense)   (62 )   (4 )   -     (10 )   214  
                               
Net Loss $  (80,365 ) $  (3,080,848 ) $  (145,416 ) $  (3,154,361 ) $  (3,741,862 )
                               
                               
Weighted Average Shares                              
Outstanding – basic and diluted   30,623,660     21,978,860     30,623,660     19,804,627        
                               
Loss per Share – Basic and Diluted $  (0.00 ) $  (0.14 ) $  (0.00 ) $  (0.16 )      

The accompanying notes are an integral part of these consolidated financial statements

F-2


Coloured (US) Inc.                  
(dbas CI Mobile Gaming)                  
(Formerly Emcor Holdings Inc.)                  
(A Development Stage Company)                  
Consolidated Statements of Cash Flows              
(Unaudited)               Cumulative  
                From  
                Incorporation  
    For the Six     For the Six     May 2, 2003  
    Months Ended     Months Ended     to  
    March 31,     March 31,     March 31,  
    2007     2006     2007  
Operating                  
   Net Loss $  (145,416 ) $  (3,154,361 ) $  (3,741,862 )
   Items not involving an outlay of cash:                  
         Amortization   5,159     4,669     19,698  
         Shares for consulting services   -     -     6,816  
         Interest expense on promissory notes   -     2,429     2,429  
         Shares for intellectual properties   -     3,000,000     3,000,000  
   Changes in non-cash working capital items:                  
         Accounts receivable   509     -     -  
         VAT receivable   893     -     (2,597 )
         Prepaid expense   (3,518 )   (510 )   (3,518 )
         Accounts payable   75,115     38,065     117,443  
         Accrued liabilities   2,105     (13,648 )   20,257  
    (65,153 )   (123,356 )   (581,334 )
Investing                  
   Acquisition of rights and technology   -     -     (28,403 )
   Cash acquired on purchase of Emcor Holdings                  
           Inc.   -     -     127,705  
    -     -     99,302  
Financing                  
   Amounts due to related parties   66,982     (3,054 )   133,018  
   Loan from related party   -     -     206,722  
   Convertible promissory note   -     1,000     1,000  
   Share issuances for cash   -     50,500     164,072  
    66,982     48,446     504,812  
Effect of exchange rate changes   (3,981 )   (936 )   (18,237 )
    (3,981 )   (936 )   (18,237 )
                   
Net Increase (Decrease) in Cash   (2,152 )   (75,846 )   4,543  
Cash – Beginning   6,695     102,725     -  
Cash – Ending $  4,543   $  26,879   $  4,543  
Income Taxes Paid $  -   $  -   $  -  
Interest Paid $  -   $  -   $    

The accompanying notes are an integral part of these consolidated financial statements

F-3


Coloured (US) Inc.
(dba CI Mobile Gaming)
(Formerly Emcor Holdings Inc.)
(A Development Stage Company)
Notes to Consolidated Financial Statements
March 31, 2007
US Funds
(Unaudited)
 

1.

Basis of Presentation

Going Concern and Liquidity Considerations

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. As at March 31, 2007, the Company has a working capital deficiency of $272,695, an accumulated deficit of $3,741,862 and has incurred an accumulated operating cash flow deficit of $581,334 since incorporation. The Company intends to fund operations through future sales and equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the next fiscal year.

Thereafter, the Company will be required to seek additional funds, either through sales and/or equity financing, to finance its long-term operations. The successful outcome of future activities cannot be determined at this time, and there is no assurance that, if achieved, the Company will have sufficient funds to execute its intended business plan or generate positive operating results. In response to these conditions, management intends to raise additional funds through future private placement offerings.

These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Unaudited Interim Consolidated Financial Statements

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with United States generally accepted accounting principals for interim financial information and with the instructions to Form 10-QSB of Regulation S-B. They do not include all information and footnotes required by generally accepted accounting principles for complete financial statements. However, except as disclosed herein, there have been no material changes in the information disclosed in the notes to the consolidated financial statements for the year ended September 30, 2006 included in the Company’s report on Form 10-KSB filed with the Securities and Exchange Commission. The unaudited interim consolidated financial statements should be read in conjunction with those consolidated financial statements included in the Form 10-KSB. In the opinion of management, all adjustments considered necessary for a fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the six months ended March 31, 2007 are not necessarily indicative of the results that may be expected for the year ending September 30, 2007.

F-4


Coloured (US) Inc.
(dba CI Mobile Gaming)
(Formerly Emcor Holdings Inc.)
(A Development Stage Company)
Notes to Consolidated Financial Statements
March 31, 2007
US Funds
(Unaudited)
 

2.

Related Party Balances and Transactions
       

Related party transactions not disclosed elsewhere in these financial statements are as follows:
       
a)

The amounts due to related parties of $133,018 (September 30, 2006 - $66,036) are non-interest bearing and due on demand. Included in amounts due to related parties are $27,169 (September 30, 2006 - $25,924) owing to a corporate shareholder, $96 (September 30, 2006 - $92) owing to the Managing Director, $7,597 (September 30, 2006 - $7,249) and $20,606 (September 30, 2006 - $14,045) owing to two separate companies with directors in common with a corporate shareholder of the Company, and $77,550 (September 30, 2006 - $18,726) owing to a company with an officer in common with a corporate shareholder of the Company.
       
b)

By employment agreement dated August 15, 2003 and amended July 20, 2004, the Company agreed to pay to the Managing Director $38,450 (GBP24,000) per annum plus 234,785 shares every three months to a maximum of 1,408,721 common shares. When the Company accepted a take- over offer, the balance of the 1,408,721 shares were issued. During the current period, $Nil (March 31, 2006 - $1,800) was paid to the Managing Director in cash.
       
c)

During the six months ended March 31, 2007, the Company paid or accrued the following fees:
       
i)

$5,805 (March 31, 2006 - $5,253) for rent to a company with a director in common with a corporate shareholder of the Company; and
       
ii)

$58,825 (March 31, 2006 - $Nil) for consulting services to a company with an officer in common with a corporate shareholder of the Company.

The above transactions, occurring in the normal course of operations, are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.

3.

Capital Stock
   

The Company’s capitalization is 100,000,000 common shares with a par value of $0.001 per share.
   

There were no shares issued during the current period.
   

There were no warrants or stock options granted during the current period and none were outstanding as at March 31, 2007 and September 30, 2006.
   
   
4.

Subsequent Event
   

On April 20, 2007, the Company issued 25,000 restricted shares to an unrelated party for consulting services.


Item 2. Management’s Discussion and Analysis

The following discussion of our financial condition, changes in financial condition and results of operations for the six months ended March 31, 2007 should be read in conjunction with our unaudited consolidated interim financial statements and related notes for the six months ended March 31, 2007.

Overview of Our Business

We were incorporated on April 5, 2005 under the laws of the State of Nevada. We carry out our business operations through our wholly owned subsidiary, Coloured Industry Limited ("Coloured UK"), located in the United Kingdom. Our principal executive office is located at Suite 5.12, 130 Shaftesbury Avenue, London, England, W1D 5EU. Our telephone number is +44(0)20 7031 1189 and our fax number is +44(0)20 7031 1199.

We are the owner of six mobile games designed to be played on GSM-network mobile phones using the Short Message Service (“SMS”) features of these phones. The SMS short message service refers to an industry adopted standard for sending and receiving text messages to and from mobile telephones and other mobile devices. Our games are played entirely via regular text messages sent back and forth between players via the servers on which our games are stored. Text messages are relatively short and easily translated into virtually any language.

All of our games are multi-player games which allow players to interact with and play against others located in the player’s vicinity. And all of our games support optional value-added features such as location-based services (LBS) where the actual location of each player has an effect of the outcome, and Multimedia Messaging Services (MMS) which facilitates the inclusion of graphics in each text message. Players send their commands to our server by way of text message. Our server receives the messages, integrates the commands within the context of the game being played, and automatically sends responses by text message to each player. Three of our games will utilize support from our website, where players may check their individual playing statistics, view high scores and get tips and strategies on improving their skills. Our mobile games may also be played without the LBS feature for networks which do not support it.

The primary target market for our games are teenage and young adult mobile phone users. Our games have been designed with the objective that they are quick to learn, enjoyable to play and may be played in a relatively short period of time over many sessions. Text messages are relatively short and easily translated into a variety of languages for distribution into major foreign language markets. Each of our games has been fully developed and is ready for commercial deployment. We plan further developments to these games as our future resources permit. Specifically, we plan to develop software, which players may choose to download onto mobile phones which support the technology, that will enable our games to integrate more advanced graphics and video into our games in a way that will further increase their playability.

We intend to market and distribute our games through a number of different “gateway owners”, or companies that sell mobile phone products and services to the general public. Gateway owners include wireless network providers (such as Vodafone, Orange, T-Mobile, Sprint), Internet portals (MSN and Lycos) and media companies that publish or distribute products in which mobile services are generally advertised (Bertelsmann and Bonnier). To assist us in marketing our games to these gateway owners, we have established and intend to build relationships with various agents and resellers located in Europe, America and Asia whom we intend to partner with to distribute our games worldwide. We intend to expand our dealings to include gateway owners in North America and eventually South America and

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Australasia. Each of these regions has shown growth in the use of text-messaging among mobile phone users in recent years.

We have not earned revenues to date. Our plan of operations is, as described below, to partner with gateway owners, either directly or indirectly through third party resellers, in the marketing and distribution of our mobile games.

Plan Of Operations

We plan to exploit our mobile games in their present form. While our strategy in each geographic market will vary according to a number of factors including the maturity of the local mobile gaming market and the telecom infrastructure available, our overall objective is to establish greater awareness of our mobile games in each marketplace in order to generate initial revenues. We plan to achieve this objective by undertaking sales and marketing campaigns in each market directed at local gateway owners. We will also continue creating relationships with strategic partners/resellers in different markets where we have few direct contacts. We also anticipate proceeding with the continued enhancement of our mobile games with a view to increasing their features and functionality.

Our plan of operations for the next twelve months is to complete the following objectives within the time periods and within the budgets specified:

1.

We plan to intensify our sales and marketing efforts for our applications and games with the objective of securing sales to gateway owners and entering into further agreements with resellers. We anticipate that marketing activities will be carried throughout the course of the next twelve months. We anticipate that we will spend approximately $7,000 per month on sales and marketing activities during the next twelve months, for a total anticipated expenditure of $84,000.

   
2.

We anticipate spending approximately $20,000 over the next twelve months on the development of new features for our mobile games, which may include one or more of those as outlined in our registration statement on Form SB-2, as filed with the SEC, under the heading "Current Status Development and Future Plans".

   
3.

We anticipate spending approximately $2,000 in ongoing general and administrative expenses per month for the next twelve months, for a total anticipated expenditure of $24,000 over the next twelve months. The general and administrative expenses for the year will consist primarily of rent and office services, technical support and hosting services and general office expenses.

   
4.

We anticipate spending approximately $40,000 in complying with our obligations as a reporting company under the Securities Exchange Act of 1934. These expenses will consist primarily of professional fees relating to the preparation of our financial statements and completing our annual report, quarterly report, current report and proxy statement filings with the SEC.

We had cash of $4,543 and working capital deficit of $272,695 as at March 31, 2007. Our planned expenditures over the next twelve months in the amount of $168,000 will exceed our current cash reserves and working capital. As a result, we anticipate that we will require financing in the amount of approximately $450,000 in order to carry out our plan of operations for the next twelve months and to cover our working capital deficit. We have not completed any financings since March 31, 2007 and need immediate financing in order for us to continue our operations.

During the twelve month period following the date of this quarterly report, we anticipate that we will not generate revenues that exceed our operating costs. We anticipate based on our current cash and working capital and our planned expenses that we will be able to continue our plan of operations for three more

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months without additional financing. We believe that we will require substantial additional financing in order to commercialize our mobile games in order to earn revenues that exceed our operating expenses. We believe that debt financing from third parties will not be an alternative for funding of our planned activities as we do not have tangible assets to secure any debt financing. We anticipate that additional funding will be in the form of equity financing from the sale of our common stock or sales of convertible promissory notes that are convertible into shares of our common stock. We may also seek to obtain additional financing in the forms of loans from our principal shareholders, although none of our shareholders have committed to advance any shareholder loans to us. If we do not obtain the necessary additional financing, we will be forced to abandon our plan of operations and our business activities.

Presentation Of Financial Information

Effective September 30, 2005, we acquired 100% of the issued and outstanding shares of Coloured UK by issuing 12,000,000 shares of our common stock. Notwithstanding its legal form, our acquisition of Coloured UK has been accounted for as a reverse acquisition, since the acquisition resulted in the former shareholders of Coloured UK owning the majority of our issued and outstanding shares. Because Emcor Holdings Inc. (now Coloured (US) Inc.) was a newly incorporated company with nominal net non-monetary assets, the acquisition has been accounted for as an issuance of stock by Coloured UK accompanied by a recapitalization. Under the rules governing reverse acquisition accounting, the results of operations of Coloured (US) Inc. are included in our consolidated financial statements effective September 30, 2005. Our date of inception is the date of inception of Coloured UK, being May 2, 2003, and our financial statements are presented with reference to the date of inception of Coloured UK. Financial information relating to periods prior to September 30, 2005 is that of Coloured UK.

Critical Accounting Policies

Development Stage Company

We are a development stage company as defined by Financial Accounting Standards No. 7. We are presently devoting all of our present efforts to establishing a new business. All losses accumulated since inception have been considered as part of our development stage activities.

Revenue Recognition

We recognize revenue when all of the following criteria have been met: persuasive evidence for an arrangement exists; delivery has occurred; the fee is fixed or determinable and collection is reasonably assured. Upfront contract payments received from the sale of services not yet earned are initially recorded as deferred revenue on the balance sheet. The amount is recognized as income over the term of the contract.

Revenue from time and material service contracts is recognized as the services are provided. Revenue from fixed price, long-term service or development contracts is recognized over the contract term based on the percentage of services that are provided during the period compared with the total estimated services to be provided over the entire contract. Losses on fixed price contracts are recognized during the period in which the loss first becomes apparent. Payment terms vary by contract.

Foreign Currency Translations

Our functional currency is pounds sterling (“₤”). Our reporting currency is the U.S. dollar. All transactions initiated in other currencies are translated into U.S. dollars as follows:

(i)

assets and liabilities at the rate of exchange in effect at the balance sheet date;

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(ii)

equity at historical rates; and

   
(iii)

revenue and expense items at the average rate of exchange prevailing during the period.

Unrealized exchange gains and losses arising from such translations are deferred until realization and are included as a separate component of shareholder’s equity as a component of comprehensive income or loss. Upon realization, the amount deferred is recognized as income in the period when it is realized.

Results Of Operations – Three and Six months ended March 31, 2007 and 2006

References to the discussion below to fiscal 2007 are to our current fiscal year which will end on September 30, 2007. References to fiscal 2006 and fiscal 2005 are to our fiscal years ended September 30, 2006 and 2005, respectively.

                            Cumulative  
                            From  
                            Incorporation  
    For the Three     For the Three     For the Six     For the Six     May 2,  
    Months Ended     Months Ended     Months Ended     Months Ended     2003 to  
    March 31,     March 31,     March 31,     March 31,     March 31,  
    2007     2006     2007     2006     2007  
                               
General and Administrative Expenses                              
     Accounting and auditing $  16,942   $  43,055   $  44,165   $  80,510   $  254,226  
     Advertising   -     -     -     -     1,890  
     Amortization   2,548     2,337     5,159     4,669     19,698  
     Consulting   33,445     3,364     66,510     8,862     162,504  
     Filing fees, net of recovery   1,643     -     (2,562 )   -     8,655  
     Information technology   2,488     682     2,488     1,926     22,425  
     Intellectual property   -     3,000,000     -     3,000,000     3,000,000  
     Investor relations   18,250     -     18,250     -     18,250  
     Legal   2,328     27,209     4,834     47,856     88,394  
     Office and miscellaneous   -     39     -     39     5,135  
     Rent   2,931     2,629     5,805     5,253     38,571  
     Salaries and wages   -     1     -     1,847     104,196  
     Transfer agent fees   125     -     235     -     2,250  
     Travel   (557 )   -     -     -     6,248  
Total General and Administrative                              
Expenses   80,143     3,079,316     144,884     3,150,962     3,732,442  
                               
Loss from Operations   (80,143 )   (3,079,316 )   (144,884 )   (3,150,962 )   (3,732,442 )
                               
Other Income (Expense)                              
     Interest income (expense)   (166 )   (1,528 )   (530 )   (3,389 )   (6,765 )
     Foreign exchange loss   6     -     (2 )   -     (2,869 )
     Miscellaneous income (expense)   (62 )   (4 )   -     (10 )   214  
                               
Net Loss For the Period $  (80,365 ) $  (3,080,848 ) $  (145,416 ) $  (3,154,361 ) $  (3,741,862 )

Revenue

We have not generated revenues from sales of our Coloured mobile games to date.

Intellectual Property

We did not incur any expenses on any intellectual property during the first six months of fiscal 2007. We have determined that the cost of the intellectual property purchased during our fiscal 2006 does not meet the criteria for capitalization as set out in SFAS No. 86.

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Accounting and Auditing

Accounting and auditing expenses are attributable to the preparation and audit of our financial statements.

Accounting and auditing expenses decreased to $44,165 during the first six months of fiscal 2007 compared to $80,510 during the first six months of fiscal 2006. Accounting and audited expenses in fiscal 2006 were attributable to the completion of our audited annual and unaudited interim financial statements prepared in connection with the filing of a registration statement with the SEC during fiscal 2006. Current accounting and auditing expenses are attributable to compliance by us with our reporting obligations under the Securities Exchange Act of 1934.

Amortization

We incurred $5,159 in amortization expenses for the first six months of fiscal 2007 compared to $4,669 for the first six months of fiscal 2006 as a result of our commencing the amortization of the server and software platform we needed to host and operate the Coloured Mobile Games (excluding Mobile Warrior, which is hosted by agreement with TrackWell). We purchased the server and platform in 2005, and it was slated to be amortized over a three year period.

Consulting Fees

Consulting Fees are primarily comprised of consulting fees that we pay to Debondo Capital Limited on account of consulting services.

Our consulting fees increased significantly to $66,510 for the first six months of fiscal 2007 compared to $8,862 for the first six months of fiscal 2006, which increase reflects the consulting agreement that we entered into with Debondo Capital on August 1, 2006.

Information Technology

Information and Technology expenses increased to $2,488 during the first six months of fiscal 2007 compared to $1,926 during the first six months of fiscal 2006.

Legal

Legal expenses are attributable to legal fees paid to our legal counsel in connection with the Company’s statutory obligations as a reporting company under the Securities Exchange Act of 1934 including the preparations and filings of our quarterly reports with the SEC.

Rent

Our rent expense is attributable to amounts paid to Azuracle on account of our rent of share office premises in London, England. Our rent expenses increased to $5,805 for the first six months of fiscal 2007 compared to $5,253 for the first six months of fiscal 2006. The minor increase resulted from an increase in the foreign exchange rate of the U.S. dollar in terms of the Great Britain pound.

Salaries and Wages

Salaries and wages were primarily comprised of salary paid to Lars Brannvall, our sole executive officer and employee. Our salaries and wages decreased to $nil for the first six months of fiscal 2007 compared to $1,847 for the first six months of fiscal 2006 as a result of Mr. Brannvall ceasing to draw a salary from us since October 1, 2006.

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Loss from Operations

Our loss from operations for the first six months of fiscal 2007 decreased significantly to $144,884 compared to $3,150,962 during the first six months of fiscal 2006, primarily as a result of our not incurring any intellectual property expense during fiscal 2007.

Liquidity And Capital Resources

We had cash of $4,543 and working capital deficit of $272,695 as at March 31, 2007, compared to cash of $6,695 and a working capital deficiency of $128,457 as at September 30, 2006.

Plan of Operations

We estimate that our total expenditures over the next twelve months will be approximately $168,000, as outlined above under the heading “Plan of Operations”. We anticipate that our cash and working capital will not be sufficient to enable us to undertake our plan of operations over the next twelve months without our obtaining additional financing. We presently require immediate financing in order that we have the cash necessary for us to continue our operations. We anticipate that we will require additional financing in the approximate amount of $450,000 in order to enable us to sustain our operations for the next twelve months.

Cash used in Operating Activities

We used cash of $65,153 in operating activities during the first six months of fiscal 2007 compared to cash used of $123,356 in operating activities during the first six months of fiscal 2006.

We have applied cash generated from financing activities to fund cash used in operating activities.

Cash from Investing Activities

We did not use any cash in investing activities during the first six months of fiscal 2007 or the first six months of fiscal 2006.

Cash from Financing Activities

We generated cash of $66,982 from financing activities during the first six months of fiscal 2007 compared to cash of $48,446 generated from activities during the first six months of fiscal 2006.

Going Concern

We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive business activities. For these reasons our auditors stated in their report that they have substantial doubt we will be able to continue as a going concern.

Future Financings

We anticipate continuing to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to our existing stockholders. There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or other financing to fund our planned activities.

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Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

Item 3. Controls and Procedures

As required by Rule 13a-15 under the Securities Exchange Act of 1934 (the “Exchange Act”), we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2007, being the date of our most recently completed quarter. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, Mr. Lars Brannvall. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the rules and forms of the Securities and Exchange Commission (the “SEC”).

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted 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 in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and our Chief Financial Officer, to allow timely decisions regarding required disclosure.

During the fiscal quarter ended March 31, 2007, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to affect, our internal control over financial reporting during the quarter ended March 31, 2007.

The term “internal control over financial reporting” is defined as a process designed by, or under the supervision of, the registrant’s principal executive and principal financial officers, or persons performing similar functions, and effected by the registrant’s board of directors, management and other personnel, 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 and includes those policies and procedures that:

(a)

Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the registrant;

   
(b)

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the registrant are being made only in accordance with authorizations of management and directors of the registrant; and

   
(c)

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the registrant’s assets that could have a material effect on the financial statements.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

We currently are not a party to any material legal proceedings and to our knowledge, no such proceedings are threatened or contemplated.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

We did not complete any sales of securities without registration under the Securities Act of 1933 during the quarter ended March 31, 2007. Subsequent to March 31, 2007, we issued the following securities without registration under the Securities Act of 1933:

  • We issued 25,000 shares of our common stock to a consultant on April 17, 2007 pursuant to a consultant agreement in consideration for services provided by the consultant at a deemed price of US$0.25 per share. We completed this offering in an “offshore transaction” pursuant to Rule 903 of Regulation S of the Securities Act on the basis that: (i) the consultant was outside of the United States at the time the offer to acquire the shares was made; (ii) we did not engage in any directed selling efforts, as defined in Regulation S, in the United States, and (iii) the consultant represented to us that the consultant was not a U.S. person, as defined in Regulation S, and was not acquiring the shares for the account or benefit of a U.S. Person. Appropriate legends will be affixed to the shares in accordance with Regulation S confirming that the shares cannot be resold or transferred other than pursuant to Regulation S, registration under the Securities Act or an exemption from the registration requirements of the Securities Act. None of the securities were sold through an underwriter and, accordingly, there were no underwriting discounts or commissions involved. No registration rights were granted to the consultant.
Item 3. Defaults Upon Senior Securities
   
None.  
   
Item 4. Submission of Matters to a Vote of Securities Holders
   
No matters were submitted to our security holders for a vote during the three months ended March 31, 2007.
 
Item 5. Other Information
   
None  
   
Item 6. Exhibits
   
The following exhibits are included with this Quarterly Report on Form 10-QSB:

Exhibit  
Number Description of Exhibit
3.1(1) Articles of Incorporation
3.2(1) Certificate of Amendment to Articles of Incorporation
 3.3(1) By-Laws
10.1(1) Agency Exploitation Agreement dated March 31, 2003, between The Mobile Warrior Technology Partnership LLP and LDC Network Limited

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Exhibit  
Number Description of Exhibit
   
10.2(1) Letter Agreement dated effective April 2, 2004, between LDC Network Limited and Coloured UK
   
10.3(1) Agency Exploitation Agreement dated August 6, 2003, between The Coloured Industry Technology Partnership and Coloured UK
   
10.4(1) Employment Agreement between Coloured UK and Lars Brannvall dated August 6, 2003
   
10.5

(1) Loan Agreement dated October 8, 2003, between Coloured UK and CII
   
10.6

(1) Debt Settlement Agreement dated April 26, 2005, between Coloured UK and CII
   
10.7

(1) Share Exchange Agreement dated May 23, 2005, as amended, among Emcor Holdings Inc., Coloured UK and the stockholders of Coloured UK
   
10.8(1) Asset Purchase Agreement dated January 31, 2006, between Coloured (US) Inc. and CII (Coloured Mobile Games)
 
10.9(1) Asset Purchase Agreement dated January 31, 2006, between Coloured (US) Inc. and ABS Capital (Mobile Warrior Game)
 
10.10(1) Debt Conversion Agreement dated February 28, 2006, between Emcor Holdings Inc. and CISA Holdings APS
 
10.11(1) Debt Conversion Agreement dated February 28, 2006, between Emcor Holdings Inc. and Dan Simmons
 
10.12(1) Termination and Release Agreement dated February 28, 2006, among Coloured UK and the Coloured Industry Technology Partnership LLP
 
10.13(1) Termination and Release Agreement dated February 28, 2006, among Coloured UK and The Mobile Warrior Technology Partnership LLP
 
10.14(1) Debenture Agreement dated October 8, 2003 between Coloured UK and CII evidencing The indebtedness of Coloured UK under the Loan Agreement
 
10.15(1) Service Agreement dated August 4, 2004, between Coloured UK and Outlander Management
 
10.16(1) Reseller Agreement dated February 19, 2004, between Coloured UK and Mtertainment Korea covering the territory of Asia, with exclusivity in Singapore
 
10.17(1) Reseller Agreement dated February 20, 2004, between Coloured UK and Tele-Publishing UK Ltd. (also known as G8wave) covering the territory of the United Kingdom
 
10.18(1) Worldwide Reseller Agreement dated February 20, 2004, between Coloured UK and Mocondi Ltd.
 
10.19(1) Reseller Agreement dated March 13, 2004, between Coloured UK and Mobiletones Asia Pte Ltd. covering the territory of Asia, excluding Singapore
 
10.20(1) Reseller Agreement dated March 10, 2005, between Coloured UK and Net People International Inc. covering the territory of Latin America (South & Central America), Mexico and the Caribbean

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Exhibit  
Number Description of Exhibit
10.21(1) Reseller Agreement dated April 19, 2004, between Coloured UK and Mobilkraft covering the territory of Sweden
 
10.22(1) Reseller Agreement dated September 27, 2004, between Coloured UK and Nostromo ICT covering the territory of the Czech Republic
 
10.23(1) Reseller Agreement dated November 25, 2004, between Coloured UK and Voicelock Ltd. (also known as Trust5) covering the territory of the United Kingdom and Ireland
 
10.24(1) Worldwide Reseller Agreement dated December 12, 2004, between Coloured UK and Tracebit Ltd
 
10.25(1) Reseller Agreement dated December 22, 2004, between Coloured UK and Mobile Minds covering the territory of Hungary, Slovakia, Czech Republic and Pakistan
 
10.26(1) Reseller Agreement dated February 3, 2005, between Coloured UK and iTech Solutions India PVT Ltd covering the territory of India and the Indian Subcontinent
 
10.27(1) Subscription agreement between the Company and Sharon Cocker dated April 8, 2005 relating to the Company’s private offering of 500,000 shares
 
10.28(1) Form of subscription agreement relating to the Company's May 31, 2005 private offering of 4,500,000 common shares at $0.01 per share
 
10.29(1) Administration Agreement dated July 1, 2005 between Coloured UK and Azuracle Limited
 
10.30(1) Closing Agreement dated September 30, 2005 amongst Emcor Holdings Inc., and the shareholders of Coloured UK
 
10.31(1) Form of subscription agreement and amendment agreement relating to the Company’s September 30, 2005 private offering of 677,660 common shares at $0.05 per share
 
10.32(1) Form of subscription agreement relating to the Company’s March 13, 2006 private offering of 202,000 common shares at $0.25 per share
 
10.33(2) Consulting agreement dated August 1, 2006 between the Company and DeBondo Capital Limited
 
31.1(3) Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act
 
32.1(3) Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(1)

Filed as an exhibit to the original registration statement on Form SB-2 filed with the Securities and Exchange Commission on April 24, 2006.

   
(2)

Filed as an exhibit to our annual report on Form 10-KSB filed with the Securities and Exchange Commission on January 4, 2007.

   
(3)

Filed as an exhibit to this quarterly report on Form 10-QSB.

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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

COLOURED (US) INC.

By: /s/ Lars Brannvall
  _________________________________
  Lars Brannvall
  Chief Executive Officer and Chief Financial Officer
  Date: June 20, 2007

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