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VOIS INC. - 10-K/A - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS(Edgar Glimpses Via Acquire Media NewsEdge) We were a social commerce website designed so that people could easily find and do business with buyers and sellers of on-demand work or manufacturing around the world. Our goal was to make doing business simple, using our online social networking platform. We were a development stage company through fiscal 2012. During fiscal 2008 and continuing through fiscal 2012 we completed certain technology milestones which were necessary to the full launch of our business, including our new User Interface Design, Usability Testing and Site Evaluation. We believe that designing an effective User Interface Design, which determines how easily users can complete their tasks and accomplish their goals, is critical to product success. Usability Testing puts a prototype or application in the hands of potential users in order to gain their direct feedback on how a design can be improved and Site Evaluation identifies where a site succeeds and how it can be improved. In December 2009, as a result of these efforts, we soft launched the new social sourcing version of VOIS launch of the Alpha version of the website was launched in February 2010. We are incorporating a "freemium" component in our revenue model. "Freemium" is a term used to describe a free version supported by a paid premium version. This model uses free as a form of marketing to put the product in the hands of the maximum number of people, converting just a small fraction to paying customers. On October 19, 2012, VOIS Inc. (the "Company", or "VOIS") entered into an Agreement and Plan of Merger (the "Merger Agreement") with Mind Solutions, Inc., a Nevada corporation ("MSI"), Mind Solutions, Inc., an Ontario corporation ("MSIC") and Mind Solutions Acquisition Corp., a Nevada corporation ("MSAC") which is a wholly-owned subsidiary of our company formed for this transaction. Under the terms of the Merger Agreement, MSAC was merged into MSI and MSI became a wholly-owned subsidiary of VOIS (the "Merger") The stockholders of MSI were issued a total of 196,000,000 shares of the Company's common stock in exchange for 100% of the outstanding shares of MSI. Our business and operations are now the business and operations of MSI. 10 Going Concern We have generated minimal revenues since inception. Our revenues alone are insufficient to pay our operating expenses and our ability to continue as a going concern is dependent upon our ability to obtain the necessary financing to meet our obligations and repay our current and future liabilities when they become due until such time, if ever, that we are able to generate sufficient revenues to attain profitable operations. We have experienced losses and negative cash flows from operations since inception and at September 30, 2012 we had a working capital deficit of $806,194 and an accumulated deficit of $30,819,609. The report of our independent registered public accounting firm on our financial statements for fiscal 2012 contained an explanatory paragraph regarding our ability to continue as a going concern. There can be no assurance that acceptable financing to fund our ongoing operations can be obtained on suitable terms, if at all. If we are unable to obtain the financing necessary to support our operations, we may be unable to continue as a going concern. In that event, we may be forced to cease operations and our stockholders could lose their entire investment in our company. Results of Operations Year ended September 30, 2012 During the years ended September 30, 2012 and 2011we had no revenue. We are aggressively looking for ways to leverage our technology to develop revenue streams. Selling, general and administrative expense. For the year ended September 30, 2012, selling, general and administrative expenses increased approximately 75.6% as compared to the year ended September 30, 2011. For the year ended September 30, 2012 and 2011 general and administrative expenses consisted of the following: 2012 2011 Consulting $ 554,100 $ 393,290 Employee compensation - 132,750 Professional fees 210,223 98,198 Product development - 9,617 Depreciation and amortization 4,082 51,711 Other 8,414 952 Finance expense 428,981 - $ 1,205,800 $ 686,518 · For the year ended September 30, 2012, consulting expense increased to $554,100 as compared to $393,290, primarily as a result of a limited use of consultants versus the prior year. · For the year ended September 30, 2012, we had no employee compensation and accrued no salaries and issued no common stock options for employees, as compared to accrued salaries and related expenses of $132,750 in the prior year. · For the year ended September 30, 2012, professional fee expense increased to $210,223 as compared to $98,198. Professional fee expense increased primarily due to increased legal fees from on-going litigation and other general business activity, as compared to the prior year. · For the year ended September 30, 2012, product development expense amounted to $0 as compared to $9,617 for the year ended September 30, 2011. The decreasewas due to limited resources for product development activities. · For the year ended September 30, 2012, depreciation and amortization expense amounted to $4,082 as compared to $51,711 for the year ended September 30, 2011, a decrease of $47,629, or 92%. The decrease is due primarily to capitalized web development costs which were fully amortized during fiscal 2011. · For the year ended September 30, 2012, Other expense which includes repairs and maintenance, postage, dues and subscriptions, supplies, and the write off of other assets, amounted to $8,414 as compared to $952 for the year ended September 30, 2011. · For the year ended September 30, 2012, finance expense from the loss on conversion of debt, amounted to $428,981 as compared to $0 for the year ended September 30, 2011. 11 Interest expense. For the year ended September 30, 2012, interest expense increased to $35,374 as compared to $32,217 for the year ended September 30, 2011. The increase was due to additional interest expense incurred related to the amount owed on legal judgments which occurred during fiscal 2011. Liquidity and Capital Resources Liquidity is the ability of a company to generate adequate amounts of cash to meet its needs for cash. The following table provides certain selected balance sheet comparisons between September 30, 2012 and September 30, 2011: September 30, September 30, $ % 2012 2011 Change Change Working Capital $ (806,195) $ (1,403,437) $ 597,242 (42.6 )% Cash 58 667 (609) (91.3)% Total current assets 58 667 (609) (91.3)% Total assets 3,461 14,237 (10,766) (75.7)% Accounts payable and accrued liabilities 446,487 1,073,338 (626,851 ) (58.4 )% Notes payable and accrued interest 359,766 330,766 29,000 8.8 % Total current liabilities 806,252 1,404,104 (597,851 ) (42.6 )% Total liabilities 806,252 1,404,104 (597,851 ) (42.6 )% At September 30, 2012 our working capital deficit decreased as compared to September 30, 2011 primarily as a result of a decrease in current liabilities of $597,851, offset by a decrease in cash resulting from operational losses. Operating activities Net cash used for continuing operating activities during fiscal 2012 was $33,609 as compared to $52,902 for fiscal 2011. Items totaling approximately $1,019,982 contributing to the net cash used in continuing operating activities for fiscal 2012 include: • $591,000 representing the value of shares issued to consultants and officers, • an increase in accrued interest payable of $29,000 • a decrease in accounts payable and accrued liabilities of $577,398, and • $4,083 of depreciation and amortization, which included approximately $2,668 in amortization of web development costs. • $6,084 in the write down of certain assets. Net cash used for continuing operating activities during fiscal 2011 was $52,902. Items totaling approximately $665,833 contributing to the net cash used in continuing operating activities for fiscal 2011 include: • $36,750 representing the value of shares issued to officers and employees, • an increase in accrued interest payable of $36,967 • an increase in accounts payable and accrued liabilities of $540,405, and • $51,711 of depreciation and amortization, which included approximately $47,137 in amortization of web development costs. Investing activities Net cash used in investing activities was $0 for both fiscal 2012 and 2011. Financing activities Net cash provided by financing activities was $33,000 during fiscal 2012 as compared to $50,100 for fiscal 2011. During the fiscal 2012 period we generated $33,000 from the sale of our common stock. During the fiscal 2011 period we generated $50,100 from the sale of 800,000 shares of our common stock. 12 Critical Accounting Policies Website Development Costs We account for software development costs in accordance with several accounting pronouncements, including FASB ASC 730, Research and Development, FASB ASC 350-40, Internal-Use Software, FASB ASC 985-20, Costs of Computer Software to be Sold, Leased, or Marketed and FASB ASC 350-50, Website Development Costs. As of September 30, 2012, we have capitalized certain internal use software and website development costs amounting to approximately $507,560. The estimated useful life of costs capitalized is evaluated for each specific project and is currently being amortized over two years. Share-based Payment In December 2004, the Financial Accounting Standards Board ("FASB") issued SFAS No. 123(R), "Share-Based Payment," which replaced SFAS No. 123 and superseded Accounting Principles Board ("APB") Opinion No. 25. Under SFAS No. 123(R) now FASB ASC 718, Compensation-Stock Compensation, companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation arrangements include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. In March 2005 the SEC issued Staff Accounting Bulletin No. 107, or "SAB 107". SAB 107 expresses views of the staff regarding the interaction between FASB ASC 718 and certain SEC rules and regulations and provides the staff's views regarding the valuation of share-based payment arrangements for public companies. FASB ASC 718 permitted public companies to adopt its requirements using one of two methods. On April 14, 2005, the SEC adopted a new rule amending the compliance dates for FASB ASC 718. Companies may elect to apply this statement either prospectively, or on a modified version of retrospective application under which financial statements for prior periods are adjusted on a basis consistent with the pro forma disclosures required for those periods under SFAS 123. Effective with its fiscal 2006 year, we adopted the provisions of FASB ASC 718 and related interpretations as provided by SAB 107 prospectively. As such, compensation cost is measured on the date of grant as its fair value. Such compensation amounts are amortized over the respective vesting periods of the options granted. Accounting Pronouncements Recently Adopted In February 2010, the FASB issued ASU No. 2010-09, "Subsequent Events (Topic 855)" ("ASU 2010-09") which provides an update to Topic 855, "Subsequent Events". This update clarifies that an SEC filer is required to evaluate subsequent events through the date that the financial statements are issued and removes the requirement for SEC filers to disclose the date through which subsequent events have been evaluated. This guidance became effective upon issuance and has been adopted by the Company. |