10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended August 31, 2012

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission File Number:   000-53770

Mobile Integrated Systems, Inc.

(Exact Name of Registrant as Specified in its Charter)

Nevada	27-0156048
(State or other jurisdiction of	(IRS Employer
incorporation or organization)	Identification No.)

Suite 502, 25 Adelaide Street

Toronto, Ontario, Canada M5C 3A1

(Address of principal executive offices)

(416) 479-0880

(Registrant’s Telephone Number, Including Area Code)

N/A

(Former Name, Former Address and Former Fiscal Year,

if Changed Since Last Report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Sec.323.405 of this chapter) during the preceding 12 months (or shorter period that the registrant was required to submit and post such files).  Yes x   No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer	¨	Accelerated Filer	¨
Non-Accelerated Filer	¨	Smaller reporting company	x

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

As of October 25, 2012, the Issuer had 163,251,722 shares of its Common Stock outstanding.

TABLE OF CONTENTS

PART I: FINANCIAL INFORMATION
Item 1: Financial Statements	1
Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operation	8
Item 3: Quantitative and Qualitative Disclosures about Market Risk	13
Item 4: Controls and Procedures	14
PART II: OTHER INFORMATION
Item 1: Legal Proceedings	14
Item 1A: Risk Factors	14
Item 2: Unregistered Sales of Equity Securities and Use of Proceeds	15
Item 3: Defaults Upon Senior Securities	15
Item 4: Mine Safety Disclosures	15
Item 5: Other Information	15
Item 6: Exhibits	16
SIGNATURES	17

PART I FINANCIAL INFORMATION

	August 31, 2012			May 31, 2012
	UNAUDITED
CURRENT ASSETS:
Cash	$	813,883		$	30,907
Accounts receivable		-			27,675
Prepaid expense		37,560			-
TOTAL CURRENT ASSETS		851,443			58,582
Loan receivable		125,370			-
Property and equipment, net		3,852			5,862
TOTAL ASSETS		980,665			64,444
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
CURRENT LIABILITIES:
Accounts payable and accrued liabilities		269,655			199,253
Accounts payable - related party		-			10,578
Notes payable - related party		-			752,597
CURRENT LIABILITIES AND TOTAL LIABILITIES		269,655			962,428
STOCKHOLDER'S EQUITY (DEFICIENCY):
Common stock, par value $0.0001
300,000,000 shares authorized
162,701,722 and 154,133,130 issued and outstanding
as of August 31, 2012 and May 31, 2012		16,269			15,412
Additional paid-in capital		5,214,003			3,185,256
Other comprehensive loss		458			1,429
Accumulated deficit		(4,519,720	)		(4,100,081	)
TOTAL STOCKHOLDERS' EQUITY (DEFICIENCY)		711,010			(897,984	)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)	$	980,665		$	64,444

1

	Three Months Ended August 31, 2012		Three Months Ended August 31, 2011		From Inception  (September 16, 2008) to August 31, 2012
	UNAUDITED		UNAUDITED		UNAUDITED
REVENUE	$	-	$	-	$	71,782
EXPENSES
General and administrative expenses		412,298		195,350		4,504,794
OPERATING LOSS		412,298		195,350		4,433,012
OTHER EXPENSE
Interest expense, net		7,341		4,765		86,708
NET LOSS	$	419,639	$	200,115	$	4,519,720
Net loss per common share	$	0.00	$	0.00
Basic and fully diluted weighted average
common shares outstanding		154,334,903		183,300,000

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	Shares			Amount			Additional Paid-In Capital			Deficit Accumulated During Development Stage			Other Comprehensive Loss			Total
BALANCE - SEPTEMBER 16, 2008
Capital contribution in connection with formation of Mobilotto, Inc.							91										91
Net loss											(10,979	)					(10,979	)
Sale of 20,000,000 shares		100,000,000			10,000			10,000									20,000
Shares issued in connection with Acquisition of Mobilitto, Inc.	100,000,000				10,000			(10,000	)								0
BALANCE - MAY 31, 2009		200,000,000			20,000			91			(10,979	)		0			9,112
Sale of shares		75,000,000			7,500			142,500									150,000
Cancellation of Founders' shares		(5,000,000	)		(500	)		400									(100	)
Sale of  shares		2,864,815			286			859,157									859,443
Other comprehensive loss resulting from foreign exchange transactions														(598	)		(598	)
Net loss											(1,122,792	)					(1,122,792	)
BALANCE - MAY 31, 2010		272,864,815			27,286			1,002,148			(1,133,771	)		(598	)		(104,935	)
Other comprehensive gain / (loss) resulting from foreign exchange conversions														(9,448	)		(9,448	)
Issuance of shares for Consulting services	1,000,000				100			149,900									150,000
Sale of  shares		7,000,000			700			1,049,300									1,050,000
Cancellation of Founders' shares		(6,062,960	)		(606	)		485									(121	)
Issuance of shares to certain existing shareholders	2,864,815				286			(286	)								0
Cancellation of shares issued for Consulting services	(1,000,000		)		(100	)		(149,900	)								(150,000	)
Net loss											(1,322,635	)					(1,322,635	)
BALANCE - May 31, 2011		276,666,670			27,666			2,051,647			(2,456,406	)		(10,046	)		(387,139	)
Other comprehensive gain / (loss) resulting from foreign exchange conversions														11,475			11,475
Sale of  shares, net of expense		2,803,500			280			386,603									386,883
Cancellation of Founders' shares		(107,500,000	)		(10,750	)		11,062									312
Exercise of Stock options		100,000			10			14,990									15,000
Cancellation of shares issued for Consulting services		(24,000,000	)		(2,400	)		(45,600	)								(48,000	)
Stock based compensation								767,160									767,160
Share reinstatement		6,062,960			606			(606	)								-
Net loss											(1,643,675	)					(1,643,675	)
BALANCE - May 31, 2012		154,133,130		$	15,412		$	3,185,256		$	(4,100,081	)	$	1,429		$	(897,984	)
Other comprehensive gain / (loss) resulting from foreign exchange conversions														(971	)		(971	)
Sale of  shares, net of expense		6,350,000			635			1,269,146									1,269,781
Cancellation of Founders' shares		(1,753,500	)		(175	)		175
Debt repayment		3,972,092			397			609,752									610,149
Stock based compensation								59,500									59,500
Cancellation of note payable								90,174									90,174
Net loss											(419,639	)					(419,639	)
BALANCE - August 31, 2012		162,701,722		$	16,269		$	5,214,003		$	(4,519,720	)	$	458		$	711,010

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	For the Three Months Ended August 31, 2012			For the Three Months Ended August 31, 2011			From Inception  (September 16, 2008) to August 31, 2012
OPERATING ACTIVITIES:
Net loss for the period	$	(419,639	)	$	(200,115	)	$	(4,519,720	)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation		2,010			2,010			27,208
Stock based compensation		59,500			-			826,660
Common stock issued for services		-			-			150,000
Cancellation of Common stock issued for services		-			-			(150,000	)
Conversion of debt to equity		(662,423	)		-			(662,423	)
Changes in operating assets and liabilities:
Other current assets		27,675			90,962			-
Accounts payable and accrued liabilities		59,824			85,589			336,009
NET CASH USED IN OPERATING ACTIVITIES		(970,613	)		(21,554	)		(4,029,826	)
INVESTING ACTIVITIES:
Acquisition of property & equipment		-			-			(31,060	)
NET CASH USED IN INVESTING ACTIVITIES		-			-			(31,060	)
FINANCING ACTIVITIES:
Cancellation of shares		-			-			102,312
Proceeds from related party loans		-			-			686,122
QAT loan receivable		(125,370	)		-			(125,370	)
Issuance (net of redemption) of common stock		1,879,930			(49,879	)		4,211,247
NET CASH PROVIDED FROM INVESTING ACTIVITIES		1,754,560			(49,879	)		4,874,311
Effect of exchange rates on cash		(971	)		15,592			458
INCREASE (DECREASE) IN CASH		782,976			(55,841	)		813,883
CASH - BEGINNING OF PERIOD		30,907			153,162			-
CASH - END OF PERIOD	$	813,883		$	97,321		$	813,883

4

MOBILE INTEGRATED SYSTEMS, INC.

(formerly known as Loto Inc. – A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AUGUST 31, 2012

NOTE 1 – BASIS OF PRESENTATION

The attached consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. As a result, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. The Company believes that the disclosures made are adequate to make the information presented not misleading. The consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Form 10-K as filed with the Securities and Exchange Commission on or about October 19, 2012.

NOTE 2 – PREPAID EXPENSE

The prepaid expense relates to Harmonized Sales Taxes paid in Ontario, Canada.

NOTE 3 –  LOAN RECEIVABLE

Pursuant to an agreement with the Company and Quantitative Alpha Trading, Inc. (“QAT”), a related party, the Company has agreed to provide a bridge loan to QAT for up to $800,000.  The bridge loan carries an annual interest rate of 12% and is secured by first fixed and specific mortgage on the QAT assets. As of August 31, 2012, the balance due from QAT was $125,000.

NOTE 4 – ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

	August 31, 2012		May 31, 2012
Programming and systems testing	$	102,302	$	102,302
Legal		129,593		33,000
Audit		9,250		33,400
Rent		–		5,356
Consulting		15,500		22,171
General and administrative		13,010		3,024
Total	$	269,655	$	199,253

NOTE 5 –  NOTES PAYABLE - RELATED PARTIES

	August 31, 2012		May 31, 2012
Note payable on demand bearing interest at Prime+2% per annum	$	–	$	382,122
Note payable due September 19, 2012 bearing interest at 5% per annum collateralized by certain assets of the Company		–		220,301
Note payable due on demand bearing interest at Prime+2%		–		90,174
Note payable due on demand and is non-interest bearing		–		60,000
	$	–	$	752,597

5

NOTE 6 – STOCKHOLDERS’ DEFICIENCY

In July 2010, the Company issued 1,000,000 shares of the Company’s common stock to a consulting company in consideration for assistance in listing on the Frankfurt Stock Exchange.  The shares were valued at $0.75 per share, the effective last sales price of the Company’s common stock. On February 3, 2011, the consulting company agreed to return the 1,000,000 shares to the Company as a result of its inability to perform all of the services contracted.

Between August 2009 and May 2010, the Company sold an aggregate of 2,864,815 shares of our restricted common stock in a private placement with thirteen accredited investors at a purchase price of $0.30 per share for an aggregate purchase price of $859,443. On September 1, 2010, the Board of Directors determined that it was in the Company’s best interests to sell additional shares at a purchase price of $0.15 per share, and to modify the sales price paid by previous investors to reflect a new sales price of $0.15 per share. The aggregate number of shares sold and issued pursuant to this private placement was correspondingly increased by 2,864,815 shares, with no additional proceeds associated with such transaction.

During October and November 2010, the Company sold 7,000,000 shares of common stock at a price of $0.15 per share for a total purchase price of $1,050,000. Such shares were sold in private placements to foreign persons in reliance on the exemption from securities registration under Section 4(2) of the U.S. Securities Act of 1933, as amended (the “Securities Act”), and Regulation S promulgated thereunder.  Such shares are restricted from trading, and may only be sold pursuant to a valid registration statement or pursuant to an exemption from the Securities Act.

On November 30, 2010 pursuant to an agreement to cancel common shares two shareholders cancelled a total of 6,062,960 common shares.  These shares were subsequently reinstated.

On June 16, 2011 the Company entered into a Share Cancellation Agreement with one of the founders and his company, A Few Brilliant Minds Inc. (AFBMI). The founder desired to pursue other business interests and submitted his resignation from the Company's Board together and tendered for cancellation 97,000,000 common shares owned by AFBMI.

In addition, the Company also entered into Share Cancellation Agreements dated June 20, 2011 with two shareholders to cancel 24,000,000 common shares in return for the original purchase price of $48,000.

On November 18, 2011, the Company sold 1,833,500 shares of the Company’s common stock to nine purchasers (the “Purchasers”) for a purchase price of $0.15 per share.  In addition, each of the Purchasers has received Warrants to purchase such number of shares of the Company’s common stock equal to the number of shares purchased by such shareholder, at an exercise price of $0.20 per share.  The Company paid a finder’s fee in connection with these sales of the Company’s securities, consisting of (i) $22,002; and (ii) Warrants to purchase 146,680 shares of the Company’s common stock, at an exercise price of $0.20 per share.

On March 7, 2012, a shareholder of the Company tendered for cancellation 10,500,000 shares of the Company’s common stock, pursuant to an agreement with the Company.  The Company did not receive any payment for the cancellation of such shares.

On March 27, 2012, the Company affected a 5-for-1 stock split of the stock of the Company.

On April 9, 2012, the Company sold 670,000 shares of the Company’s common stock to three purchasers (the “Purchasers”) for a purchase price of $0.15 per share.  In addition, each of the Purchasers has received Warrants to purchase such number of shares of the Company’s common stock equal to the number of shares purchased by such shareholder, at an exercise price of $0.20 per share.  The Company paid a finder’s fee in connection with these sales of the Company’s securities, consisting of (i) $8,040; and (ii) Warrants to purchase 53,600 shares of the Company’s common stock, at an exercise price of $0.20 per share.

6

On May 10, 2012, the Company issued 100,000 shares of the Company’s common stock to a director of the company as part of an exercise of options for a strike price of $0.15 per share.

On May 22, 2012, the Company sold 300,000 shares of the Company’s common stock to two purchasers (the “Purchasers”) for a purchase price of $0.15 per share.  In addition, each of the Purchasers has received Warrants to purchase such number of shares of the Company’s common stock equal to the number of shares purchased by such shareholder, at an exercise price of $0.20 per share.  The Company paid a finder’s fee in connection with these sales of the Company’s securities, consisting of (i) $3,600; and (ii) Warrants to purchase 24,000 shares of the Company’s common stock, at an exercise price of $0.20 per share.

On June 27, 2012, pursuant to an agreement with a shareholder, 1,753,500 shares of the Company’s common stock were cancelled.

During the period ended August 31, 2012, the Company completed formalities related to the issuance of 5,250,000 shares of the Company’s common stock as part of a private placement.  All of the shares were sold at a price of $0.20 per share.

In addition, during the period ended August 31, 2012, holders of certain warrants to purchase shares of the Company’s common stock exercised their rights to acquire 1,100,000 shares of the Company’s common stock at an exercise price of $.20 per share.

During the period ended August 31, 2012, the Company eliminated all of its outstanding long-term liabilities pursuant to agreements to convert outstanding debt into 3,972,092 shares of common stock of the Company, at a conversion price of $.15 per share.

NOTE 7 – COMMITMENTS

The Company is obligated under a lease agreement to lease the premises at 25 Adelaide Street in Toronto, Ontario, Canada until November 29, 2013. The minimum payments due are as follows:

2012 – $ 30,260

2013 – $ 66,572

NOTE 8 – SUBSEQUENT EVENTS

On October 8, 2012, the Company announced that it has signed a customer contract to implement and operate an SMS lottery for Movil Game Solutions C.A., a Venezuelan nationally licensed lottery operator, for a percentage of the gross sales of the lottery operator.

On October 16, 2012, the Company provided an additional $85,000 to Q AT under the Bridge Loan Agreement between the two companies.

On October 24, 2012, the Company issued 550,000 shares of common stock sold in a private placement for $.20 per share.

7

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OFOPERATIONS

Forward Looking Statements

The following discussion of the financial condition and results of operations of the Company should be read in conjunction with the financial statements and the related notes thereto included elsewhere in this Report.  Some of the statements contained in this Report that are not historical facts are "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 (the “Exchange Act”), which can be identified by the use of terminology such as "estimates," "projects," "plans," "believes," "expects," "anticipates," "intends," or the negative or other variations, or by discussions of strategy that involve risks and uncertainties. However, as the Company intends to issue “penny stock,” as such term is defined in Rule 3a51-1 promulgated under the Exchange Act, the Company is ineligible to rely on these safe harbor provisions. We urge you to be cautious of the forward-looking statements.  All such forward-looking statements, which are contained in this Report, reflect our current beliefs with respect to future events and involve known and unknown risks, uncertainties and other factors affecting our operations, market growth, services, products and licenses. No assurances can be given regarding the achievement of future results, as actual results may differ materially as a result of the risks we face, and actual events may differ from the assumptions underlying the statements that have been made regarding anticipated events. Factors that may cause actual results, our performance or achievements, or industry results, to differ materially from those contemplated by such forward-looking statements include without limitation:

● Our ability to attract and retain management, and to integrate and maintain technical information and management information systems;

● Our ability to raise capital when needed and on acceptable terms and conditions;

● The intensity of competition;

● General economic conditions; and

● Changes in government regulations.

The Company disclaims any obligation to update any such factors or to announce publicly the results of any revisions of the forward-looking statements contained or incorporated by reference herein to reflect future events or developments.

Unless otherwise provided in this Report, references to the "Company," the "Registrant," the "Issuer," "we," "us," and "our" refer to Mobile Integrated Systems, Inc.

Critical Accounting Policies and Estimates

The Management's Discussion and Analysis of Financial Condition and Results of Operations section discusses our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments, including those related to revenue recognition, accrued expenses, financing operations, and contingencies and litigation. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different conditions.

Plan of Operation

The Company is a development stage software company that operates horizontally across a variety of industry sectors.  Prior to the period covered by this Report, the Company developed software for use in lotteries; during the period covered by this Report, the Company commenced plans to enter into new businesses.  The Company develops and operates proprietary mobile software platforms in the areas of lottery, financial services and parking, and intends to expand into other verticals.  Mobile phones offer advanced capabilities, often with personal computer-like functionality, such as e-mail, Internet access and other applications that can be used as infrastructure by many industries.

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The Company’s different forms of software are at different levels of development.  To date, the Company has had insignificant revenues, all of which were in the lottery field. The Company's proprietary technology for facilitating the purchase of lottery tickets addresses all elements of lottery play, including secure player registration and authorization, number selection, settlement, winning number notification and other direct-to-customer marketing opportunities.   It is the Company’s intention to license and operate our lottery software to governments and other lottery operators as a primary source of revenue. The Company has no intention to become a lottery operator nor does it intend to enter the gaming space. The Company’s lottery software application has not yet been utilized by any lottery operator.

The Company's parking software will be sold to parking site operators to offer mobile payment systems to their users.  This line of business is in the prototype phase.

On August 21, 2012, the Company and Quantitative Alpha Trading, Inc. announced the execution of a definitive agreement dated August 20, 2012, providing that the Company will acquire all of the outstanding common shares of Quantitative Alpha Trading, Inc. on the basis of 0.2222 of a share of Mobile Integrated Systems’ common stock in exchange for each outstanding share of Quantitative Alpha Trading.  The parties also announced the execution of a perpetual worldwide licensing and commercialization agreement to develop and market all of QAT’s products.  The software to be acquired through such acquisition will be sold to securities traders.  This software provides an algorithmic stock signals intelligence system that predicts future stock behavior.  It is the Company's intention to license our financial software to financial organizations and individuals as a primary source of revenue.  The Company has no intention of becoming a broker-dealer or any other type of finance company or engage in any type of regulated activity.  The Company's financial software is expected to be distributed through software app stores and distribution agreements.  The Company has not received any payment for the use of its financial software as of the date of this Report.

The Company now owns and operates several development stage properties under the brand “MOBI”.  All products we develop and sell now benefit from the brand “MOBI” appended to the name of the underlying business.  For instance our Lottery product is called MobiLotto.  Our mobile parking solution is called MobiPark.  Our financial software, acquired recently, will be branded MobiInvest.  Mobile Integrated Systems, Inc. will continue to develop or acquire new families of products to ensure that we have a diversified portfolio of software families.  We will also ensure that the products that we build or acquire have common underlying requirements so as to benefit from economies of scale which will ultimately increase our profit margins.

It is anticipated that each of the business owned by the Company will generate revenue through software licensing.  The Company intends to offer two forms of licensing.  One is transaction based and the other is based on the number of users.  The Company anticipates that revenue models will be as follows:

MobiLotto:  This family of cloud-based software products will be sold to lottery operators through a license that entitles MobiLotto to a percentage of total lottery sales.

MobiPark:  This family of cloud-based software products will be sold via license to parking operators that wish to replace last generation parking infrastructure with our mobile offering.  Revenue will be transaction based.  The more people park, the more revenue the license will generate.

MobiInvest:  This family of products was just recently acquired and we are in the process of defining the revenue model.  Initial estimates indicate that we will utilize a per seat/user model.

9

Results of Operations

The Company was incorporated in the state of Nevada on April 22, 2009, and our wholly-owned subsidiary Mobilotto was incorporated in the province of Ontario in September 2008.  On May 13, 2009, the Company acquired all of the issued and outstanding shares of Mobilotto (which included all intellectual property of the mobile lottery purchase system).  We have concentrated our efforts on developing our business strategy and obtaining private financing.  We have working models ready for demonstration and we have commenced our initial sales and marketing program.  We have had early stage meetings with some lottery operators in Canada and we are actively pursuing other opportunities in Canada and elsewhere.  Our mobile lottery software application has now been developed and tested, but has not yet been utilized by any lottery operators and we have not yet derived any revenues from our technology.  In addition, we are now expanding into additional fields.  These new areas will require additional financial and management resources in order to develop.  There is no guarantee that we will be able to successfully launch our technology or that it will generate sufficient revenue to sustain our operations.

Assets and Liabilities

As of August 31, 2012, the Company had total assets of $980,665, including total current assets of $851,443.  The Company’s total current assets consisted of cash in the amount of $813,883, prepaid expenses in the amount of $37,560.  The Company’s total assets as of August 31, 2012 included a loan receivable in the amount of $125,370.  In addition, as of August 31, 2012, the Company owned net property and equipment in the amount of $3,852.  The Company’s total assets and total current assets have increased since May 31, 2012, at which time the Company’s total assets were $64,444, including total current assets of $58,582.  The Company’s total current assets as of May 31, 2012 consisted of cash in the amount of $30,907 and accounts receivable in the amount of $27,675.  In addition, as of May 31, 2012, the Company owned net property and equipment in the amount of $5,862.

On July 30, 2012, one of the Company’s note holders cancelled its note to the Company for $90,714, including both principal and interest.

In addition, during the period ended August 31, 2012, the Company eliminated all of its outstanding long-term liabilities in the amount of $760,323, including accrued interest of $7,726, through a combination of debt conversion and debt cancellation, with the issuance of 3,972,092 shares of common stock of the Company.

The Company’s current liabilities and total liabilities decreased to $269,655 at August 31, 2012 from $962,428 at May 31, 2012.  The Company’s current liabilities and total liabilities at August 31, 2012 included accounts payable and accrued liabilities of $269,655. The Company’s current liabilities and total liabilities at May 31, 2012 included accounts payable and accrued liabilities of $199,253, accounts payable-related party of $10,578, and notes payable-related party of $752,597.

Liquidity and Capital Resources

As of August 31, 2012, the Company had $813,041 in cash, which was an increase from $30,907 at May 31, 2012. As a development stage company, we have limited capital and limited operating resources.

During the period ended August 31, 2012, the Company raised $1,049,146 pursuant to the closing of a private placement of 5,250,000 shares of Company common stock at a purchase price of $0.20 per share. The proceeds of the private placement will be used for general corporate purposes.  From inception through August 31, 2012, the Company raised $3,380,463 in initial funding and private placements of restricted common stock. The funds raised in the prior private placements will not be sufficient to meet our projected cash flow deficits from operations or to fund the development of our technology and products.

The cash on hand in our bank accounts is not sufficient to maintain our operations. We estimate our total overhead, costs and expenses related to completion of a commercially deployable version of our mobile lottery application, obtaining certification of our system by the Gaming Standards Association (GSA), and initiating full rollout of our products to our target markets over the next twelve months will be approximately $1,000,000.  We need additional amounts of funding in order to expand our operations.

10

Management believes that without obtaining additional financing or developing an ongoing source of revenue, we will not launch successfully. Although we have actively been pursuing new business opportunities, we cannot give assurance that we will succeed in this endeavor, or be able to enter into necessary agreements to pursue our business on terms favorable to us. Should we be unable to generate additional revenues or raise additional capital, we could eventually be forced to cease business activities altogether.

Results of Operations for the Three Months Ended August 31, 2011 and August 31, 2012

Income

We are a development stage company and now also a deployment stage company. For the three months ending August 31, 2012 the Company had revenue of $0. To date, the Company has received $71,782 in revenue, all of which was received in the fiscal year ended May 31, 2012.  We have concentrated our efforts on developing our business strategy and obtaining financing.  We have working models ready for demonstration and we have commenced our initial sales and marketing program.  We have had early stage meetings with some lottery operators in Canada and we are actively pursuing other opportunities in Canada and elsewhere. Our mobile lottery software application has not yet been utilized by any lottery operators and we have not yet derived any revenues from our technology.  There is no guarantee that we will be able to successfully develop and launch our technology or that it will generate sufficient revenue to sustain our operations.

Expenses

During the three months ended August 31, 2012, we incurred $412,298 in general and administrative expenses.  This was an increase from the three month period ended August 31, 2011 during which we incurred general and administrative expenses of $195,350.  Since the Company’s inception on September 16, 2008, the Company has incurred general and administrative expenses of $4,504,794.

Our Plan of Operation for the Next Twelve Months

Our path to revenue is based upon completing the following work plan over the next twelve months:

1.    Completion of the patent and trademark registrations.

2.    Adherence to our Marketing Plan (see section below).

3.    Completion of the systems development to ensure we have a robust product and all the required modules for end-to-end lottery play (including player registration, numbers selection, authorization, settlement, and player communication / marketing).  

4.    As opportunities arise, partner with existing suppliers of games to lottery operators in order to mobilize existing lottery games.

5.    Remain flexible in our business model to operate as a lottery retailer/distributor, license the technology for use, or sell the technology for use in a pre-defined jurisdiction, preferably in that order, as conditions deem appropriate.

6.    Complete appropriate certifications in promising jurisdictions to become a lottery retailer/distributor and/or supplier to specific lottery operators.

7.    Partner with the emerging internet gaming suppliers and new lottery licensees to mobilize their offerings.

11

8.    Proactively communicate and present our product and brand to prospective lottery operators, and understand their needs for new sources of revenue.

Marketing Plan

Our marketing plan is a combination of branding, lottery association participation, communication, presentations, and meetings with lottery operators, public messaging, and partnership initiatives with other corporate entities. Specifically, our plan calls for:

1.    Attending and participating in lottery association events / tradeshows in order to meet prospective clients, speak about mobile lottery opportunities, and present the Mobi and Mobilotto brands. These would include the World Lottery Association as well as the North American Association of State & Provincial Lotteries, among others.

2.    Review each geographical region to justify the development of a mobile gaming environment. Prioritization would be given to those countries with a combination of material lottery revenues, a high penetration of smart phone devices, favorable internet gaming regulations, and operators who express an interest in our product and service.

3.    On a prioritized country basis, study the local lottery regulations, understand global and specific country lottery issues, and contact the lottery operators for visitation and demonstration of Mobi products.  Currently, opportunities appear to be strong in Canada, Africa, Mexico, Asia, and Europe.  Also, the U.S. may become a market for Mobi should existing restrictions on internet lottery be changed, or Mobi’s geo-locational restrictions be confirmed.

4.    While brand and product marketing will be supported by the lottery operators and by the mobile network operators, we intend on pursuing additional local marketing efforts including mass awareness campaigns, cause support, and seeking specific customer input.

5.    Develop relationships with existing internet gaming companies to “mobilize” their product offerings.

6.    Once the Mobi product is developed and contracts in place, generate incremental sales through direct to customer marketing through their mobile devices.

Working Capital

While we do not have in-place working capital to fund normal business activities, we are actively seeking private financing in the amount of $1,000,000.

Contractual Obligations and Other Commercial Commitments

The sole on-going commitment we have is for the rental of our head office, which runs to the end of November 2013 at a rate that approximates $6,100 per month.

Common Stock

On June 27, 2012, pursuant to an agreement with a shareholder, 1,753,500 shares of the Company’s common stock were cancelled.

During the period ended August 31, 2012, the Company completed formalities related to the issuance of 5,250,000 shares of the Company’s common stock as part of a private placement.  All of the shares were sold at a price of $0.20 per share.

In addition, during the period ended August 31, 2012, holders of certain warrants to purchase shares of the Company’s common stock exercised their rights to acquire 1,100,000 shares of the Company’s common stock at an exercise price of $.20 per share.

12

During the period ended August 31, 2012, the Company eliminated all of its outstanding long-term liabilities pursuant to agreements to convert outstanding debt into 3,972,092 shares of common stock of the Company, at a conversion price of $.15 per share.

Employees

We currently have three full-time employees, one full-time contractor and one part-time contractor.  We expect to hire additional full time employees in the coming year as necessities dictate.  We have engaged additional consultants for accounting, legal, and other part-time and occasional services.

Off-Balance Sheet Arrangements

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

Subsequent Events

On October 8, 2012, the Company announced that it has signed a customer contract to implement and operate an SMS lottery for Movil Game Solutions C.A., a Venezuelan nationally licensed lottery operator, for a percentage of the gross sales of the lottery operator.

On October 16, 2012, the Company provided an additional $85,000 to Q AT under the Bridge Loan Agreement between the two companies.

On October 24, 2012, the Company issued 550,000 shares of common stock sold in a private placement for $.20 per share.

Item 3.  Qualitative and Quantitative Disclosure About Market Risk

Not applicable.

13

Item 4. Controls and Procedures

Management's Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process, under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer, designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external purposes in accordance with United States generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that:

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

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

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

Our management conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). That evaluation disclosed that the Company has material defects in its internal control over financial reporting. Specifically they determined that there is a lack of expertise in U.S. GAAP among the Company’s management personnel. They also determined that the size of the Company’s accounting staff and low number of supervisory personnel prevented an appropriate segregation of accounting functions. Accordingly, based on this evaluation, management concluded that the Company’s internal control over financial reporting was not effective as of August 31, 2012.

Subsequent to the period covered by this Report, the Company initiated new procedures regarding internal controls over financial reporting and disclosure controls and procedures.  The Company anticipates that such controls and procedures will be effective in the future for purposes of recording, processing, summarizing, and reporting information required to be disclosed, within the time periods specified in the SEC's rules and forms.  We intend to further upgrade the amount of financial and personnel resources we spend on our accounting function as our operations develop and expand. 

Changes in Internal Control over Financial Reporting

There was no change in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) during the quarter ended August 31, 2012 that has materially affected or is reasonably likely to materially affect the Company’s internal control over financial reporting.

PART II.  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

The Company is not, and has not been during the period covered by this Quarterly Report, a party to any legal proceedings.

ITEM 1A.  RISK FACTORS

Not Applicable.

14

ITEM 2:  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the period ended August 31, 2012, the Company completed formalities related to the issuance of 5,250,000 shares of the Company’s common stock as part of a private placement.  All of the shares were sold at a price of $0.20 per share.

In addition, during the period ended August 31, 2012, holders of certain warrants to purchase shares of the Company’s common stock exercised their rights to acquire 1,100,000 shares of the Company’s common stock at an exercise price of $.20 per share.

During the period ended August 31, 2012, the Company eliminated all of its outstanding long-term liabilities pursuant to agreements to convert outstanding debt into 3,972,092 shares of common stock of the Company, at a conversion price of $.15 per share.

Both the shares sold pursuant to the debt conversion and the shares sold pursuant to the private placement were sold to foreign persons in reliance on the exemption from securities registration under Section 4(2) of the U.S. Securities Act of 1933, as amended and Regulation S promulgated thereunder.

Subsequent to the period covered by this Report, the Company issued 550,000 shares of common stock sold in a private placement for $.20 per share.  Such shares were also sold to foreign persons in reliance on the exemption from securities registration under Section 4(2) of the U.S. Securities Act of 1933, as amended and Regulation S promulgated thereunder.

ITEM 3:  DEFAULTS UPON SENIOR SECURITIES

Not Applicable.

ITEM 4:  MINE SAFETY DISCLOSURES

Not Applicable.

ITEM 5:  OTHER INFORMATION

Not Applicable.

15

ITEM 6.   EXHIBITS

Exhibit	Description
Exhibit 10.24	Stock Option Agreement, by and between 2238646 Ontario Inc. and Emlyn David, dated as of April 25, 2012, incorporated by reference to Exhibit 10.24 to the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on October 19, 2012.
Exhibit 10.25	Employment Agreement, by and between the Company and Murray Simser, dated as of May 14, 2012, incorporated by reference to Exhibit 10.25 to the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on October 19, 2012.
Exhibit 10.26	Stock Option Agreement, by and between 2238646 Ontario Inc. and Murray Simser, dated as of May 14, 2012, incorporated by reference to Exhibit 10.26 to the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on October 19, 2012.
Exhibit 10.27	Arrangement Agreement, by and between the Company, Quantitative Alpha Trading Inc. and 2338584 Ontario Inc., dated as of August 20, 2012 incorporated by reference to Exhibit 10.27 to the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on October 19, 2012.
Exhibit 31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.1	Certification of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.2	Certification of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

16

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

MOBILE INTEGRATED SYSTEMS, INC.
By:	/s/ Murray Simser
	Name:	Murray Simser
	Title:	Chief Executive Officer (Principal Executive Officer)
By:	/s/ Emlyn David
	Name:	Emlyn David
	Title:	Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

Dated:      October 26, 2012

17

EX-31.1

Exhibit 31.1

OFFICER'S CERTIFICATION PURSUANT TO SECTION 302

I, Murray Simser, certify that:

1.  I have reviewed this quarterly report on Form 10-Q of Mobile Integrated Systems, 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; and

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.

October 26, 2012

By:	/s/ Murray Simser
	Name:	Murray Simser
	Title:	Principal Executive Officer

EX-31.2

Exhibit 31.2

OFFICER'S CERTIFICATION PURSUANT TO SECTION 302

I, Emlyn David, certify that:

1.  I have reviewed this quarterly report on Form 10-Q of Mobile Integrated Systems, 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; and

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.

October 26, 2012

By:	/s/ Emlyn David
	Name:	Emlyn David
	Title:	Principal Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATIONS PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Mobile Integrated Systems, Inc. on Form 10-Q for the quarter ended August 31, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Murray Simser, Principal Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge that:

(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.

Date: October 26, 2012

By:	/s/ Murray Simser
	Name:	Murray Simser
	Title:	Principal Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATIONS PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Mobile Integrated Systems, Inc. on Form 10-Q for the quarter ended August 31, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Emlyn David, Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge that:

(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.

Date: October 26, 2012

By:	/s/ Emlyn David
	Name:	Emlyn David
	Title:	Principal Financial Officer

XML

Subsequent Events (Details) (USD $)	1 Months Ended	3 Months Ended
	Oct. 31, 2012	Aug. 31, 2012	Oct. 24, 2012	Oct. 16, 2012	May 22, 2012	May 10, 2012	Apr. 09, 2012	Nov. 30, 2011	Nov. 30, 2010	Jul. 31, 2010	May 31, 2010
Subsequent Events (Textual)
Bridge loan amount to QAT		$ 800,000		$ 85,000
Shares issued under private placement	550,000	5,250,000
Share price		$ 0.20	$ 0.20		$ 0.20	$ 0.15	$ 0.15	$ 0.15	$ 0.15	$ 0.75	$ 0.30

XML

Prepaid Expenses

3 Months Ended

Aug. 31, 2012

Prepaid Expense [Abstract]

PREPAID EXPENSE

NOTE 2 – PREPAID EXPENSE

The prepaid expense relates to Harmonized Sales Taxes paid in Ontario, Canada.

XML

Basis of Presentation

3 Months Ended

Aug. 31, 2012

Basis Of Presentation [Abstract]

BASIS OF PRESENTATION

NOTE 1 – BASIS OF PRESENTATION

The attached consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. As a result, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. The Company believes that the disclosures made are adequate to make the information presented not misleading. The consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Form 10-K as filed with the Securities and Exchange Commission on or about October 19, 2012.

XML

Consolidated Balance Sheet (USD $)	Aug. 31, 2012	May 31, 2012
CURRENT ASSETS:
Cash	$ 813,883	$ 30,907
Accounts receivable		27,675
Prepaid expense	37,560
TOTAL CURRENT ASSETS	851,443	58,582
Loan receivable	125,370
Property and equipment, net	3,852	5,862
TOTAL ASSETS	980,665	64,444
CURRENT LIABILITIES:
Accounts payable and accrued liabilities	269,655	199,253
Accounts payable - related party		10,578
Notes payable - related party		752,597
CURRENT LIABILITIES AND TOTAL LIABILITIES	269,655	962,428
STOCKHOLDER'S EQUITY (DEFICIENCY):
Common stock, par value $0.0001 300,000,000 shares authorized 162,701,722 and 154,133,130 issued and outstanding as of August 31, 2012 and May 31, 2012	16,269	15,412
Additional paid-in capital	5,214,003	3,185,256
Other comprehensive loss	458	1,429
Accumulated deficit	(4,519,720)	(4,100,081)
TOTAL STOCKHOLDERS' EQUITY (DEFICIENCY)	711,010	(897,984)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)	$ 980,665	$ 64,444

XML

Consolidated Statement of Stockholder's Equity (Deficiency) (Parenthetical)	9 Months Ended
	May 31, 2009
Statement Of Stockholders' Equity [Abstract]
Sale of shares	20,000,000

XML

Notes Payable-Related Party (Details Textual)	3 Months Ended
	Aug. 31, 2012
Notes payable [Member]
Notes Payable - Related party (Textual)
Description of interest rate on notes payable	(Prime+2%)
Notes payable one [Member]
Notes Payable - Related party (Textual)
Debt instrument, Maturity date	Sep. 19, 2012
Interest rate on notes payable	5.00%
Notes payable two [Member]
Notes Payable - Related party (Textual)
Description of interest rate on notes payable	(Prime+2%)

XML

Commitments (Details) (USD $)	Aug. 31, 2012
Operating leases, Future minimum payments
2012	$ 30,260
2013	$ 66,572

XML

Consolidated Statement of Cash Flows (USD $)	3 Months Ended		47 Months Ended
	Aug. 31, 2012	Aug. 31, 2011	Aug. 31, 2012
OPERATING ACTIVITIES:
Net loss for the period	$ (419,639)	$ (200,115)	$ (4,519,720)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	2,010	2,010	27,208
Stock based compensation	59,500		826,660
Common stock issued for services			150,000
Cancellation of Common stock issued for services			(150,000)
Conversion of debt to equity	(662,423)		(662,423)
Changes in operating assets and liabilities:
Other current assets	27,675	90,962
Accounts payable and accrued liabilities	59,824	85,589	336,009
NET CASH USED IN OPERATING ACTIVITIES	(970,613)	(21,554)	(4,029,826)
INVESTING ACTIVITIES:
Acquisition of property & equipment			(31,060)
NET CASH USED IN INVESTING ACTIVITIES			(31,060)
FINANCING ACTIVITIES:
Cancellation of shares			102,312
Proceeds from related party loans			686,122
QAT loan receivable	(125,370)		(125,370)
Issuance (net of redemption) of common stock	1,879,930	(49,879)	4,211,247
NET CASH PROVIDED FROM INVESTING ACTIVITIES	1,754,560	(49,879)	4,874,311
Effect of exchange rates on cash	(971)	15,592	458
INCREASE (DECREASE) IN CASH	782,976	(55,841)	813,883
CASH - BEGINNING OF PERIOD	30,907	153,162
CASH - END OF PERIOD	$ 813,883	$ 97,321	$ 813,883

XML

Consolidated Balance Sheet (Parenthetical) (USD $)	Aug. 31, 2012	May 31, 2012
Statement Of Financial Position [Abstract]
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	300,000,000	300,000,000
Common stock, shares issued	162,701,722	154,133,130
Common stock, shares outstanding	162,701,722	154,133,130

XML

Notes Payable-Related Party (Tables)

3 Months Ended

Aug. 31, 2012

Notes Payable - Related Party [Abstract]

Schedule of notes payable to related parties

	August 31, 2012		May 31, 2012
Note payable on demand bearing interest at Prime+2% per annum	$	–	$	382,122
Note payable due September 19, 2012 bearing interest at 5% per annum collateralized by certain assets of the Company		–		220,301
Note payable due on demand bearing interest at Prime+2%		–		90,174
Note payable due on demand and is non-interest bearing		–		60,000
	$	–	$	752,597

XML

Document and Entity Information	3 Months Ended
	Aug. 31, 2012	Oct. 25, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	Mobile Integrated Systems, Inc.
Entity Central Index Key	0001464766
Document Type	10-Q
Document Period End Date	Aug. 31, 2012
Amendment Flag	false
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--05-31
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		163,251,722

XML

Commitments (Tables)

3 Months Ended

Aug. 31, 2012

Commitments [Abstract]

Operating leases, Future minimum payments

The minimum payments due are as follows:

2012 – $ 30,260

2013 – $ 66,572

XML

Consolidated Statement of Operations (USD $)	3 Months Ended		47 Months Ended
	Aug. 31, 2012	Aug. 31, 2011	Aug. 31, 2012
Income Statement [Abstract]
REVENUE			$ 71,782
EXPENSES
General and administrative expenses	412,298	195,350	4,504,794
OPERATING LOSS	412,298	195,350	4,433,012
OTHER EXPENSE
Interest expense, net	7,341	4,765	86,708
NET LOSS	$ 419,639	$ 200,115	$ 4,519,720
Net loss per common share	$ 0.00	$ 0.00
Basic and fully diluted weighted average common shares outstanding	154,334,903	183,300,000

XML

Notes Payable-Related Party

3 Months Ended

Aug. 31, 2012

Notes Payable - Related Party [Abstract]

NOTES PAYABLE - RELATED PARTIES

NOTE 5 –  NOTES PAYABLE - RELATED PARTIES

	August 31, 2012		May 31, 2012
Note payable on demand bearing interest at Prime+2% per annum	$	–	$	382,122
Note payable due September 19, 2012 bearing interest at 5% per annum collateralized by certain assets of the Company		–		220,301
Note payable due on demand bearing interest at Prime+2%		–		90,174
Note payable due on demand and is non-interest bearing		–		60,000
	$	–	$	752,597

XML

Accounts Payable and Accrued Liabilities

3 Months Ended

Aug. 31, 2012

Accounts Payable and Accrued Liabilities [Abstract]

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

NOTE 4 – ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

	August 31, 2012		May 31, 2012
Programming and systems testing	$	102,302	$	102,302
Legal		129,593		33,000
Audit		9,250		33,400
Rent		–		5,356
Consulting		15,500		22,171
General and administrative		13,010		3,024
Total	$	269,655	$	199,253

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Stockholders' Deficiency (Details) (USD $)	1 Months Ended									2 Months Ended	3 Months Ended	9 Months Ended	10 Months Ended	12 Months Ended
	Oct. 31, 2012	Jun. 30, 2012	May 31, 2012 Purchaser	Apr. 30, 2012 Purchaser	Mar. 31, 2012	Nov. 30, 2011 Purchaser	Jun. 30, 2011 Shareholder	Feb. 28, 2011	Jul. 31, 2010	Nov. 30, 2010 Shareholder	Aug. 31, 2012	May 31, 2009	May 31, 2010 Investor	May 31, 2012	May 31, 2011	May 31, 2010	Oct. 24, 2012	May 22, 2012	May 10, 2012	Apr. 09, 2012	Sep. 01, 2010
Stockholders' Deficiency (Textual)
Issuance of shares for Consulting services (Shares)									1,000,000
Share price						$ 0.15			$ 0.75	$ 0.15	$ 0.20		$ 0.30			$ 0.30	$ 0.20	$ 0.20	$ 0.15	$ 0.15
Cancellation of shares issued for Consulting services (Shares)								1,000,000
Sale of restricted common stock										$ 1,050,000,000			$ 859,443			$ 859,443
Sale of restricted common stock (Shares)										7,000,000			2,864,815
Share price for sale of additional shares																					$ 0.15
Number of accredited investors													13
Sale of shares											1,269,781	20,000		386,883	1,050,000	150,000
Sale of common stock (Shares)			300,000	670,000		1,833,500
Cancellation of shares (Shares)		1,753,500			10,500,000					6,062,960
Cancellation of Founders' shares (Shares)							97,000,000
Number of shareholders							2			2
Number of shares cancelleble as per agreement							48,000,000
Number of shares cancelleble as per agreement, shares							24,000,000
Number of purchasers			2	3		9
Warrant excercise price			$ 0.20	$ 0.20		$ 0.20					$ 0.20
Finder fees on sales of company securities			$ 3,600	$ 8,040		$ 22,002
Common stock issuable upon exercise of warrants			24,000	53,600		146,680
Stock split of stock of company					5-for-1
Common stock issued to director			100,000
Shares issued under private placement	550,000										5,250,000
Common stock shares purchased upon excercise of warrants											1,100,000
Conversion of debt into common stock, shares											3,972,092
Debt conversion price											$ 0.15

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Loan Receivable (Details) (USD $)	Oct. 16, 2012	Aug. 31, 2012
Loan Receivable (Textual)
Bridge loan amount to QAT	$ 85,000	$ 800,000
Anual interest rate on bridge loan		12.00%
Amount due from QAT		$ 125,000

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Subsequent Events

3 Months Ended

Aug. 31, 2012

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 8 – SUBSEQUENT EVENTS

On October 8, 2012, the Company announced that it has signed a customer contract to implement and operate an SMS lottery for Movil Game Solutions C.A., a Venezuelan nationally licensed lottery operator, for a percentage of the gross sales of the lottery operator.

On October 16, 2012, the Company provided an additional $85,000 to Q AT under the Bridge Loan Agreement between the two companies.

On October 24, 2012, the Company issued 550,000 shares of common stock sold in a private placement for $.20 per share.

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Stockholders' Deficiency

3 Months Ended

Aug. 31, 2012

Stockholders Deficiency [Abstract]

STOCKHOLDERS’ DEFICIENCY

NOTE 6 – STOCKHOLDERS’ DEFICIENCY

In July 2010, the Company issued 1,000,000 shares of the Company’s common stock to a consulting company in consideration for assistance in listing on the Frankfurt Stock Exchange.  The shares were valued at $0.75 per share, the effective last sales price of the Company’s common stock. On February 3, 2011, the consulting company agreed to return the 1,000,000 shares to the Company as a result of its inability to perform all of the services contracted.

Between August 2009 and May 2010, the Company sold an aggregate of 2,864,815 shares of our restricted common stock in a private placement with thirteen accredited investors at a purchase price of $0.30 per share for an aggregate purchase price of $859,443. On September 1, 2010, the Board of Directors determined that it was in the Company’s best interests to sell additional shares at a purchase price of $0.15 per share, and to modify the sales price paid by previous investors to reflect a new sales price of $0.15 per share. The aggregate number of shares sold and issued pursuant to this private placement was correspondingly increased by 2,864,815 shares, with no additional proceeds associated with such transaction.

During October and November 2010, the Company sold 7,000,000 shares of common stock at a price of $0.15 per share for a total purchase price of $1,050,000. Such shares were sold in private placements to foreign persons in reliance on the exemption from securities registration under Section 4(2) of the U.S. Securities Act of 1933, as amended (the “Securities Act”), and Regulation S promulgated thereunder.  Such shares are restricted from trading, and may only be sold pursuant to a valid registration statement or pursuant to an exemption from the Securities Act.

On November 30, 2010 pursuant to an agreement to cancel common shares two shareholders cancelled a total of 6,062,960 common shares.  These shares were subsequently reinstated.

On June 16, 2011 the Company entered into a Share Cancellation Agreement with one of the founders and his company, A Few Brilliant Minds Inc. (AFBMI). The founder desired to pursue other business interests and submitted his resignation from the Company's Board together and tendered for cancellation 97,000,000 common shares owned by AFBMI.

In addition, the Company also entered into Share Cancellation Agreements dated June 20, 2011 with two shareholders to cancel 24,000,000 common shares in return for the original purchase price of $48,000.

On November 18, 2011, the Company sold 1,833,500 shares of the Company’s common stock to nine purchasers (the “Purchasers”) for a purchase price of $0.15 per share.  In addition, each of the Purchasers has received Warrants to purchase such number of shares of the Company’s common stock equal to the number of shares purchased by such shareholder, at an exercise price of $0.20 per share.  The Company paid a finder’s fee in connection with these sales of the Company’s securities, consisting of (i) $22,002; and (ii) Warrants to purchase 146,680 shares of the Company’s common stock, at an exercise price of $0.20 per share.

On March 7, 2012, a shareholder of the Company tendered for cancellation 10,500,000 shares of the Company’s common stock, pursuant to an agreement with the Company.  The Company did not receive any payment for the cancellation of such shares.

On March 27, 2012, the Company affected a 5-for-1 stock split of the stock of the Company.

On April 9, 2012, the Company sold 670,000 shares of the Company’s common stock to three purchasers (the “Purchasers”) for a purchase price of $0.15 per share.  In addition, each of the Purchasers has received Warrants to purchase such number of shares of the Company’s common stock equal to the number of shares purchased by such shareholder, at an exercise price of $0.20 per share.  The Company paid a finder’s fee in connection with these sales of the Company’s securities, consisting of (i) $8,040; and (ii) Warrants to purchase 53,600 shares of the Company’s common stock, at an exercise price of $0.20 per share.

On May 10, 2012, the Company issued 100,000 shares of the Company’s common stock to a director of the company as part of an exercise of options for a strike price of $0.15 per share.

On May 22, 2012, the Company sold 300,000 shares of the Company’s common stock to two purchasers (the “Purchasers”) for a purchase price of $0.15 per share.  In addition, each of the Purchasers has received Warrants to purchase such number of shares of the Company’s common stock equal to the number of shares purchased by such shareholder, at an exercise price of $0.20 per share.  The Company paid a finder’s fee in connection with these sales of the Company’s securities, consisting of (i) $3,600; and (ii) Warrants to purchase 24,000 shares of the Company’s common stock, at an exercise price of $0.20 per share.

On June 27, 2012, pursuant to an agreement with a shareholder, 1,753,500 shares of the Company’s common stock were cancelled.

During the period ended August 31, 2012, the Company completed formalities related to the issuance of 5,250,000 shares of the Company’s common stock as part of a private placement.  All of the shares were sold at a price of $0.20 per share.

In addition, during the period ended August 31, 2012, holders of certain warrants to purchase shares of the Company’s common stock exercised their rights to acquire 1,100,000 shares of the Company’s common stock at an exercise price of $.20 per share.

During the period ended August 31, 2012, the Company eliminated all of its outstanding long-term liabilities pursuant to agreements to convert outstanding debt into 3,972,092 shares of common stock of the Company, at a conversion price of $.15 per share.

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Commitments

3 Months Ended

Aug. 31, 2012

Commitments [Abstract]

COMMITMENTS

NOTE 7 – COMMITMENTS

The Company is obligated under a lease agreement to lease the premises at 25 Adelaide Street in Toronto, Ontario, Canada until November 29, 2013. The minimum payments due are as follows:

2012 – $ 30,260

2013 – $ 66,572

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Accounts Payable and Accrued Liabilities (Tables)

3 Months Ended

Aug. 31, 2012

Accounts Payable and Accrued Liabilities [Abstract]

Summery of accounts payable and accrued liabilities

	August 31, 2012		May 31, 2012
Programming and systems testing	$	102,302	$	102,302
Legal		129,593		33,000
Audit		9,250		33,400
Rent		–		5,356
Consulting		15,500		22,171
General and administrative		13,010		3,024
Total	$	269,655	$	199,253

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Notes Payable-Related Party (Details) (USD $)	Aug. 31, 2012	May 31, 2012
Notes Payable
Notes payable - related party		$ 752,597
Notes payable [Member]
Notes Payable
Notes payable - related party		382,122
Notes payable one [Member]
Notes Payable
Notes payable - related party		220,301
Notes payable two [Member]
Notes Payable
Notes payable - related party		90,174
Notes payable three [Member]
Notes Payable
Notes payable - related party		$ 60,000

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Consolidated Statement of Stockholders' Equity (Deficiency) (USD $)	Total	Common Stock	Additional Paid-In Capital	Deficit Accumulated During Development Stage	Other Comprehensive Loss
BEGINNING BALANCE at Sep. 16, 2008
Capital contribution in connection with formation of Mobilotto, Inc.	91		91
Sale of shares	20,000	10,000	10,000
Sale of shares, (Shares)		100,000,000
Shares issued in connection with Acquisition of Mobilitto, Inc.	0	10,000	(10,000)
Shares issued in connection with Acquisition of Mobilitto, Inc. (Shares)		100,000,000
Net loss	(10,979)			(10,979)
BALANCE at May. 31, 2009	9,112	20,000	91	(10,979)	0
BALANCE SHARES, at May. 31, 2009		200,000,000
Other comprehensive gain / (loss) resulting from foreign exchange transactions/conversions	(598)				(598)
Sale of shares	150,000	7,500	142,500
Sale of shares, (Shares)		75,000,000
Cancellation of Founders' shares	(100)	(500)	400
Cancellation of Founders' shares (Shares)		(5,000,000)
Sale of shares	859,443	286	859,157
Sale of shares (Shares)		2,864,815
Net loss	(1,122,792)			(1,122,792)
BALANCE at May. 31, 2010	(104,935)	27,286	1,002,148	(1,133,771)	(598)
BALANCE SHARES, at May. 31, 2010		272,864,815
Other comprehensive gain / (loss) resulting from foreign exchange transactions/conversions	(9,448)				(9,448)
Issuance of shares for Consulting services	150,000	100	149,900
Issuance of shares for Consulting services (Shares)		1,000,000
Sale of shares	1,050,000	700	1,049,300
Sale of shares, (Shares)		7,000,000
Cancellation of Founders' shares	(121)	(606)	485
Cancellation of Founders' shares (Shares)		(6,062,960)
Issuance of shares to certain existing shareholders	0	286	(286)
Issuance of shares to certain existing shareholders (Shares)		2,864,815
Cancellation of shares issued for Consulting services	(150,000)	(100)	(149,900)
Cancellation of shares issued for Consulting services (Shares)		(1,000,000)
Net loss	(1,322,635)			(1,322,635)
BALANCE at May. 31, 2011	(387,139)	27,666	2,051,647	(2,456,406)	(10,046)
BALANCE SHARES, at May. 31, 2011		276,666,670
Other comprehensive gain / (loss) resulting from foreign exchange transactions/conversions	11,475				11,475
Sale of shares	386,883	280	386,603
Sale of shares, (Shares)		2,803,500
Cancellation of Founders' shares	312	(10,750)	11,062
Cancellation of Founders' shares (Shares)		(107,500,000)
Exercise of Stock options	15,000	10	14,990
Exercise of Stock options, (Shares)		100,000
Cancellation of shares issued for Consulting services	(48,000)	(2,400)	(45,600)
Cancellation of shares issued for Consulting services (Shares)		(24,000,000)
Stock based compensation	767,160		767,160
Share Reinstatement		606	(606)
Share Reinstatement (Shares)		6,062,960
Net loss	(1,643,675)			(1,643,675)
BALANCE at May. 31, 2012	(897,984)	15,412	3,185,256	(4,100,081)	1,429
BALANCE SHARES, at May. 31, 2012		154,133,130
Other comprehensive gain / (loss) resulting from foreign exchange transactions/conversions	(971)				(971)
Sale of shares	1,269,781	635	1,269,146
Sale of shares, (Shares)		6,350,000
Cancellation of Founders' shares		(175)	175
Cancellation of Founders' shares (Shares)		(1,753,500)
Debt repayment	610,149	397	609,752
Debt repayment (Shares)		3,972,092
Stock based compensation	59,500		59,500
Cancellation of note payable	90,174		90,174
Net loss	(419,639)			(419,639)
BALANCE at Aug. 31, 2012	$ 711,010	$ 16,269	$ 5,214,003	$ (4,519,720)	$ 458
BALANCE SHARES, at Aug. 31, 2012		162,701,722

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Loan Receivable

3 Months Ended

Aug. 31, 2012

Loan Receivable [Abstract]

LOAN RECEIVABLE

NOTE 3 –  LOAN RECEIVABLE

Pursuant to an agreement with the Company and Quantitative Alpha Trading, Inc. (“QAT”), a related party, the Company has agreed to provide a bridge loan to QAT for up to $800,000.  The bridge loan carries an annual interest rate of 12% and is secured by first fixed and specific mortgage on the QAT assets. As of August 31, 2012, the balance due from QAT was $125,000.

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Accounts Payable and Accrued Liabilities (Details) (USD $)	Aug. 31, 2012	May 31, 2012
Summery of accounts payable and accrued liabilities
Programming and systems testing	$ 102,302	$ 102,302
Legal	129,593	33,000
Audit	9,250	33,400
Rent		5,356
Consulting	15,500	22,171
General and administrative	13,010	3,024
Total	$ 269,655	$ 199,253