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ON THE MOVE SYSTEMS CORP. - 10-Q/A - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS(Edgar Glimpses Via Acquire Media NewsEdge) Overview On the Move Systems Corp. ("we", "us", "our", "OMVS", or the "Company") was incorporated in Florida on March 25, 2010. The Company's business focus is the mobile electronics market, but is it currently exploring the specialized travel and transportation market by developing a network of niche travel, destination lodging, and international logistics partnerships. The Company's year-end is February 28. The company is located at 3001 North Rocky Point East, Suite 200, Tampa, FL 33607. Our telephone number is (813) 367-7748. Critical Accounting Policies We prepare our Consolidated financial statements in conformity with GAAP, which requires management to make certain estimates and apply judgments. We base our estimates and judgments on historical experience, current trends, and other factors that management believes to be important at the time the condensed Consolidated financial statements are prepared. On a regular basis, we review our accounting policies and how they are applied and disclosed in our condensed consolidated financial statements. While we believe that the historical experience, current trends and other factors considered support the preparation of our condensed consolidated financial statements in conformity with GAAP, actual results could differ from our estimates and such differences could be material. For a full description of our critical accounting policies, please refer to Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report for the year ended February 28, 2014 on Form 10-K. Results of Operations Three months ended May 31, 2014 compared to the three months ended May 31, 2013. Revenue Revenue increased to $25,530 for the three months ended May 31, 2014, compared to $21,855 for the three months ended May 31, 2013 due to higher mobile equipment installation activity. Cost of Goods Sold Cost of Goods Sold increased to $17,730 for the three months ended May 31, 2014, compared to $14,763 for the comparable period in 2013. This increase is consistent with the increase in revenue. Gross Profit Gross profit increased to $7,800 for the three months ended May 31, 2014, compared to $7,092 for the three months ended May 31, 2013. This increase is consistent with the increase in revenue. Expenses related to joint ventures and other business development agreements We recognized expenses related to joint ventures and other business development agreements in the amount of $23,786 for the three months ended May 31, 2014. There were no such expenses during the comparable period of 2013. These expenses are related to our beginning to operate our XPerience segment. General and Administrative Expenses We recognized general and administrative expenses in the amount of $220,875 and $89,743 for the three months ended May 31, 2014 and ended 2013, respectively. The increase was due to increased professional fees. - 15 - --------------------------------------------------------------------------------Interest Expense Interest expense increased from $7,088 for the three months ended May 31, 2013 to $61,900 for the three months ended May 31, 2014. Interest expense for the three months ended May 31, 2014 included amortization of discount on convertible notes payable in the amount of $36,337, compared to $0 for the comparable period of 2013. The remaining amount is the result of the Company entering into interest-bearing convertible notes payable. Net Loss We incurred a net loss of $298,761 for the three months ended May 31, 2014 as compared to $89,739 for the comparable period of 2013. The increase in the net loss was primarily the due to the increases in professional fees, development of our specialty travel and transportation segment, and interest expense. Liquidity and Capital Resources At May 31, 2014, we had cash on hand of $35,307. The company has negative working capital of $805,357. Net cash used in operating activities for the three months ended May 31, 2014 was $95,427. Cash on hand is adequate to fund our operations for less than one month. We do not expect to achieve positive cash flow from operating activities in the near future. We will require additional cash in order to fully implement our business plan. There is no guarantee that we will be able to attain fund when we need them or that funds will be available on terms that are acceptable to the Company. We have no material commitments for capital expenditures as of May 31, 2014. Additional Financing Additional financing is required to continue operations. Although actively searching for available capital, the Company does not have any current arrangements for additional outside sources of financing and cannot provide any assurance that such financing will be available. Off Balance Sheet Arrangements We do not have any 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 investors. |