XOTC:MEDL Quarterly Report 10-Q/A Filing - 3/31/2012

Effective Date 3/31/2012

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D. C. 20549
 
FORM 10-Q/A
(Amendment No. 1)
 
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2012

o 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 333-166343

MEDL MOBILE HOLDINGS, INC
 (Exact name of registrant as specified in its charter)

NEVADA
(State or other jurisdiction of incorporation or organization)
 
80-0194367
 (I.R.S. Employer Identification No.)

 18475 Bandilier Circle
Fountain Valley, California 92708
(Address of principal executive offices)

(714) 617-1991
(Issuer's telephone number)

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 o

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 (§232.405 of this chapter) during the preceding 12 months (or for such 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 o
Accelerated filer o
   
Non-accelerated filer o
Smaller reporting company x
(Do not check if a smaller reporting company)

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

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 43,509,209 shares as of May 3, 2012
 
 
 

 
 
Explanatory Note

This Amendment No. 1 on Form 10-Q/A (“Amendment No. 1”) amends the Quarterly Report for MEDL Mobile Holdings, Inc. filed on Form 10-Q for the quarter ended March 31, 2012, as initially filed with the Securities and Exchange Commission (the “SEC”) on May 15, 2012 (the “Original Report”). The sole purpose of amendment of the Original Report is to correct a typographical error in the Consolidated Statement of Operations for the three months ended March 31, 2012 on the line item for “Total expenses” which now reads $2,183,591 instead of $2,653,459. This Amendment No. 1 otherwise describes conditions as of the date of the Original Report and has not been updated to disclose events that may have occurred at a later date.

 
 
 

 
 
NOTE REGARDING FORWARD-LOOKING STATEMENTS

Our disclosure and analysis in this Report contains forward-looking statements which provide our current expectations or forecasts of future events.  Forward-looking statements in this Report include, without limitation:

 
information concerning possible or assumed future results of operations, trends in financial results and business plans, including those related to earnings, earnings growth, revenue and revenue growth;
 
statements about the level of our costs and operating expenses relative to our revenues, and about the expected composition of our revenues;
 
statements about expected future sales trends for our products and services;
 
statements about our future capital requirements and the sufficiency of our cash and cash equivalents;
 
other statements about our plans, objectives, expectations and intentions;
 
and other statements that are not historical fact.

           Forward-looking statements generally can be identified by the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “intends, “plans,” “should,” “seeks,” “pro forma,” “anticipates,” “estimates,” “continues,” or other variations thereof (including their use in the negative), or by discussions of strategies, plans or intentions.  Such statements include but are not limited to statements under Part I, Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations in this Report, and elsewhere in this Report.  A number of factors could cause results to differ materially from those anticipated by such forward-looking statements. The absence of these words does not necessarily mean that a statement is not forward-looking.  Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Our actual results could differ materially from those anticipated in the forward-looking statements for many reasons.

You should not unduly rely on these forward-looking statements, which speak only as of the date of this Report.  We undertake no obligation to publicly revise any forward-looking statement to reflect circumstances or events after the date of this Report, or to reflect the occurrence of unanticipated events.  You should, however, review the factors and risks we describe in the reports we file from time to time with the Securities and Exchange Commission.
 
 
 

 

 
Table of Contents

   
Page
 
PART I
 
Item 1.
Financial Statements.
 
 
Consolidated Balance Sheets as of March 31, 2012 (unaudited) and December 31, 2011
1
 
Consolidated Statements of Operations for the three months ended  March 31, 2012 and 2011 (unaudited)
2
 
Consolidated Statements of Cash Flows for the three months ended March 31, 2012 and 2011 (unaudited)
3
 
Notes to Consolidated Financial Statements (unaudited)
4
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operation.
14
Item 3.
Quantitative and Qualitative Disclosures About Market Risk.
17
Item 4.
Controls and Procedures.
17
 
PART II
 
Item 1.
Legal Proceedings.
18
Item 1A.
Risk Factors.
18
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds.
18
Item 3.
Defaults Upon Senior Securities.
18
Item 4.
Mine Safety Disclosures.
18
Item 5.
Other Information.
18
Item 6.
Exhibits.
19
SIGNATURES
   
 
 
 

 

 
ITEM 1. FINANCIAL STATEMENTS.

MEDL MOBILE HOLDINGS, INC.
           
CONSOLIDATED BALANCE SHEETS
           
   
March 31, 2012
   
December 31, 2011
 
ASSETS
 
(unaudited)
       
Current assets:
           
Cash
  $ 2,395,053     $ 1,075,307  
Accounts receivable, less allowance for doubtful accounts of $148,936 and $108,000 respectfully
    443,055       479,176  
Prepaid expenses
    89,282       9,800  
    Total current assets
    2,927,390       1,564,283  
                 
Fixed assets, net of depreciation:
    75,589       63,997  
                 
Other assets:
               
  Security deposits
    26,528       19,857  
  Intangible Asset-Customer Base
    144,000       -  
   Total other assets:
    170,528       19,857  
                 
Total  assets:
  $ 3,173,507     $ 1,648,137  
                 
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
               
Current liabilities:
               
Accounts payable and accrued expenses
  $ 283,374     $ 219,569  
Accrued  compensation expenses
    139,007       63,360  
  Total current liabilities:
    422,381       282,929  
                 
Long term liabilities:
               
    Deferred lease
    13,283       10,249  
                 
Total liabilities:
    435,664       293,178  
                 
Stockholders' equity
               
Preferred stock, $0.001 par value; 10,000,000 shares authorized; none issued and outstanding.
    -       -  
Common stock, $0.001 par value, 500,000,000 shares authorized; 43,509,209 issued and outstanding at March 31, 2012 and 40,025,000 issued and outstanding at December 31, 2011
    43,510       40,025  
Additional paid-in capital
    5,909,843       3,122,520  
Accumulated deficit
    (3,215,510 )     (1,807,586 )
                 
Total stockholders' equity
    2,737,843       1,354,959  
                 
Total liabilities and stockholders' equity
  $ 3,173,507     $ 1,648,137  
 
The accompanying notes are an integral part of these financial statements
 
 
1

 

 
MEDL MOBILE HOLDINGS, INC.
           
CONSOLIDATED STATEMENTS OF OPERATIONS
           
UNAUDITED
           
   
For the three months ended March 31, 2012
   
For the three months ended March 31, 2011
 
Revenues
  $ 1,149,998     $ 378,655  
                 
Cost of goods sold
    374,331       182,593  
                 
Gross profit
    775,667       196,062  
                 
Expenses:
               
Selling, general  and administrative
    2,183,591       175,138  
    Total expenses
    2,183,591       175,138  
                 
                 
Net (loss) income
  $ (1,407,924 )   $ 20,924  
                 
                 
NET LOSS PER COMMON SHARE
               
  Basic and Diluted
  $ (0.03 )   $ 0.00  
                 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
               
  Basic and Diluted
    40,325,592       7,401,500  
 
The accompanying notes are an integral part of these financial statements
 
 
2

 

 
MEDL MOBILE HOLDINGS, INC.
           
CONSOLIDATED STATEMENTS OF CASH FLOWS
       
UNAUDITED
           
             
   
For the three months ended March 31, 2012
   
For the three months ended March 31, 2011
 
             
Cash flows from operating activities:
           
  Net (loss) income
  $ (1,407,924 )   $ 20,924  
   Adjustments to reconcile net (loss) income to net cash (used in) provided
               
    by operating activities:
               
  Depreciation
    7,684       1,234  
  Stock based compensation on options granted
    44,837       -  
  Warrants expense
    1,002,200          
Common stock issued for services
    37,500       -  
Increase in allowance for doubtful accounts
    40,936       -  
Changes in operating assets and liabilities:
               
  (Increase) decrease in accounts receivable
    (4,815 )     19,497  
  (Increase) in prepaid expenses
    (2,210 )     -  
 (Increase) in security deposits
    (6,672 )     -  
 Increase in Deferred lease
    3,034       -  
  Increase in accounts payable and accrued expenses
    139,452       3,570  
      Net cash provided by (used in) operating activities
    (145,978 )     45,225  
                 
Cash flows from investing activities:
               
  Purchase of office equipment
    (19,276 )     (14,209 )
      Net cash used in investing activities
    (19,276 )     (14,209 )
                 
Cash flows from financing activities:
               
  Repayment of shareholder loans
    -       (40,534 )
  Proceeds from issuance of common stock
    1,485,000       -  
     Net cash provided by (used in) financing activities
    1,485,000       (40,534 )
                 
Net increase (decrease) in cash
    1,319,746       (9,518 )
                 
Cash at beginning of period
    1,075,307       40,682  
                 
Cash at end of period
  $ 2,395,053     $ 31,164  
                 
SUPPLEMENTAL CASH FLOW INFORMATION:
               
  Cash paid during year for interest
               
    Interest
  $       $    
    Income taxes
  $ 800     $ 800  
                 
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
               
Value of shares issued for Acquisition
  $ 221,272          
Acquisition of a software company-intangible asset- customer base
    (144,000 )        
Prepaid consulting fees related to Acquisition
  $ (77,272 )        
 
The accompanying notes are an integral part of these financial statements
 
 
3

 
 
MEDL MOBILE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2012
(Unaudited)

NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION

The unaudited financial statements included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).  The financial statements and notes are presented as permitted on Form 10-Q and do not contain information included in the Company’s annual statements and notes.  Certain information and footnote disclosure normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.  It is suggested that these financial statements be read in conjunction with the audited financial statements and accompanying notes thereto for the year ended December 31, 2011 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 30, 2012.  While management believes the procedures followed in preparing these financial statements are reasonable, the accuracy of the amounts are in some respects dependent upon the facts that will exist, and procedures that will be accomplished by the Company later in the year.

These unaudited financial statements reflect all adjustments, including normal recurring adjustments which, in the opinion of management, are necessary to present fairly the operations and cash flows for the periods presented.

MEDL Mobile Holdings, Inc. (the “Registrant”) through its wholly owned subsidiary, MEDL Mobile, Inc. (“MEDL” and together with the Registrant, “we”, “our”, “us”, or the “Company”) is a developer, incubator, marketer and aggregator of mobile application software, or “Apps”.

The Registrant, formerly known as Resume in Minutes, Inc. was incorporated in Nevada on May 22, 2008.  On June 24, 2011, the Registrant completed a share exchange with MEDL, a California corporation, and the shareholders of MEDL (the “MEDL Shareholders”) according to which the MEDL Shareholders transferred all of the issued and outstanding capital stock of MEDL to the Registrant in exchange for the issuance to the MEDL Shareholders of an aggregate of 20,000,000 shares of common stock of the Registrant.  As a result of the share exchange, MEDL became a wholly owned subsidiary of the Registrant and the business of MEDL became the sole line of business of the Registrant.

The share exchange was accounted for as a reverse-merger and recapitalization. MEDL is the acquirer for financial reporting purposes and MEDL Mobile Holdings, Inc. is the acquired company. Consequently, the assets and liabilities and the operations reflected in the historical financial statements prior to the share exchange are those of MEDL and recorded at the historical cost basis of MEDL, and the consolidated financial statements after completion of the share exchange include the assets and liabilities of the Registrant and MEDL, historical operations of MEDL and operations of Registrant from the closing date of the share exchange.

On February 28, 2012, the Company acquired Inedible Software, LLC (“Inedible”), a developer of mobile apps and related mobile app technologies. As a result, Inedible became a wholly owned subsidiary of the Company. The results of operations of Inedible are included on a going forward basis from the date of acquisition.
 
 
4

 

 
MEDL MOBILE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2012
(Unaudited)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of all of the entities that make up the Company.  All significant inter-company balances and transactions have been eliminated.

Reclassification

The Company has made certain reclassifications to conform to prior periods’ data to the current presentation.  These reclassifications had no effect on reported losses, operating ratios or ROI measurements.

Basis of Accounting

The accompanying unaudited interim financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the United States Securities and Exchange Commission for interim financial information. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, stockholders’ equity or cash flows. It is management's opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation.

The results of operations for the three months ended March 31, 2012 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2012. The accompanying statements should be read in conjunction with the more detailed financial statements, and the related footnotes thereto, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 30, 2012.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent 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, the Company evaluates its estimates, including, but not limited to, those related to investment tax credits, bad debts, income taxes and contingencies. The Company bases its estimates on historical experience and on various other assumptions 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 could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments and other short-term investments with maturity of three months or less, when purchased, to be cash equivalents.  The Company maintains cash and cash equivalent balances at one financial institution that is insured by the Federal Deposit Insurance Corporation.  Any amounts of cash in financial institutions over FDIC insured limits, exposes the Company to cash concentration risk.

Fair Value of Financial Instruments (other than Derivative Financial Instruments)

The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, and accounts payable approximate fair value because of the immediate or short-term maturity of these financial instruments.
 
 
5

 

 
MEDL MOBILE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2012
(Unaudited)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Revenue Recognition

Recurring revenues are earned on a monthly basis and include software application license and support fees as well as Application (also referred to as “Apps”) hosting fees. Monthly recurring fees billed in advance and the revenue is recognized in the month in which the fees are applicable. Nonrecurring revenues from implementation fees for new client installation and consulting and training fees for existing clients are recognized as the services are performed. Nonrecurring revenues related to perpetual license sale with multiple elements are recognized in accordance with the guidance on software revenue recognition. When the arrangement with a customer includes significant production, modification, or customization of the software, we recognize the related revenue using the percentage-of-completion method in accordance with the accounting guidance for construction-type and certain production-type contracts.

The Company receives a deposit of up to fifty (50%) percent of the proposed project contract at the time that the contract is signed.  Significant work has been done by the Company at this time and the deposit is non-refundable and therefore is recognized as revenue to the Company.  Another twenty five (25%) percent of the contract is billable per stated terms of the contract and revenue is recognized at that time.  Upon completion of the project to the client the remaining twenty five (25%) percent is billed to the client and recognized as revenue to the Company.  Apps projects are generally delivered within several weeks.

Accounts Receivable

Accounts receivable are stated at the amounts management expects to collect from outstanding balances.  Management provides for probable uncollectible amounts through a charge to earnings and a credit to a valuation allowance based on its assessment of the current status of individual accounts.  Balances outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to trade accounts receivable.  Management has determined that the allowance for doubtful accounts at March 31, 2012 and December 31, 2011 is $148,936, and $108,000 respectively.

Accounts receivable will generally be due within 30 to 90 days and collateral is not required.

Income Taxes

Income taxes are accounted for under the asset and liability method in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740, Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial carrying amounts of existing assets and liabilities and their respective tax bases as well as operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the periods in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance to the extent that the recoverability of the asset is unlikely to be recognized.

The Company follows ASC 740 rules governing uncertain tax positions, which provides guidance for recognition and measurement. This prescribes a threshold condition that a tax position must meet for any of the benefits of the uncertain tax position to be recognized in the financial statements. It also provides accounting guidance on derecognization, classification and disclosure of these uncertain tax positions.
 
 
6

 

 
MEDL MOBILE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2012
(Unaudited)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Uncertainty in Income Taxes

Under ASC 740-10-25 recognition and measurement of uncertain income tax positions is required using a “more-likely-than-not" approach.  Management evaluates their tax positions on an annual basis and has determined that as of March 31, 2012 no additional accrual for income taxes is necessary.

Research and Development

The Company incurs costs on activities that relate to research and development of new technology and products.  Research and development costs are expensed as incurred.

Property and equipment

Property and equipment are stated at cost.  Expenditures that materially increase the life of the assets are capitalized.  Ordinary maintenance and repairs are charged to expense as incurred.  When assets are sold or otherwise disposed of, the cost and the related accumulated depreciation and amortization are removed from the accounts and any realized gain or loss is recognized at that time.

Depreciation is computed primarily on the straight line method for financial statement purposes over the following estimated useful lives:

Computer equipment                                                      3-5 years

Furniture and fixtures                                                     3-5 years

Fair Value of Financial Instruments (Other Than Derivative Financial Instruments)

The Company adopted ASC 820, Fair Value Measurements and Disclosures, for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing US GAAP that requires the use of fair value measurements which establishes a framework for measuring fair value and expands disclosure about such fair value measurements.

ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:

 
Level 1:
Observable inputs such as quoted market prices in active markets for identical assets or liabilities
 
Level 2:
Observable market-based inputs or unobservable inputs that are corroborated by market data
 
Level 3:
Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.

The carrying amounts reported in the balance sheet for cash, accounts payable, and accrued liabilities approximate their estimated fair market value based on the short-term maturity of this instrument.

In addition, FASB ASC 825-10-25 Fair Value Option was effective for January 1, 2008. ASC 825-10-25 expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value.
 
 
7

 
 
 
MEDL MOBILE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2012
(Unaudited)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Earnings (Loss) Per Share of Common Stock

Basic net earnings (loss) per common share is computed using the weighted average number of common shares outstanding. Diluted earnings per share ("EPS") include additional dilution from common stock equivalents, such as stock issuable pursuant to the exercise of stock options and warrants. Common stock equivalents were not included in the computation of diluted earnings per share on the consolidated statement of operations for the period ended March 31, 2012 due to the fact that the Company reported a net loss and to do so would be anti-dilutive for that period presented.

The following is a reconciliation of the computation for basic and diluted EPS:

Net (Loss) Profit Per Share of Common Stock
           
   
For the three months ended March 31, 2012
   
For the three months ended March 31, 2011
 
Net (loss) profit
  $ (1,407,924 )   $ 20,924  
Weighted-average common shares
               
Outstanding (Basic)
    40,325,592       7,401,500  
                 
Weighted-average common stock
               
Equivalents
               
Stock options
    0       0  
                 
Weighted-average commons shares
               
Outstanding (Diluted)
    40,325,592       7,401,500  
                 
NET (LOSS) PROFIT PER COMMON SHARE
               
  Basic and Diluted
  $ (0.03 )   $ 0.00  

Diluted net loss per share reflects the potential dilution that could occur if the securities or other contracts to issue common stock were exercised or converted into common stock.

Goodwill and Other Intangible Assets

In accordance with ASC 350-30-65 (formerly SFAS 142, Goodwill and Other Intangible Assets), the Company assesses the impairment of identifiable intangibles whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Intangible assets were comprised of website assets. Factors the Company considers to be important which could trigger an impairment review include the following:

 
1.
Significant underperformance relative to expected historical or projected future operating results;

 
2.
Significant changes in the manner of use of the acquired assets or the strategy for the overall business; and

 
3.
Significant negative industry or economic trends.

When the Company determines that the carrying value of intangibles may not be recoverable based upon the existence of one or more of the above indicators of impairment and the carrying value of the asset cannot be recovered from projected undiscounted cash flows, the Company records an impairment charge. The Company measures any impairment based on a projected discounted cash flow method using a discount rate determined by management to be commensurate with the risk inherent in the current business model. Significant management judgment is required in determining whether an indicator of impairment exists and in projecting cash flows. The Company did not consider it necessary to record any impairment charges during the period ended March 31, 2012.
 
 
8

 

 
MEDL MOBILE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2012
(Unaudited)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Stock Based Compensation

The Company applies ASC 718-10 and ASC 505-50 (formerly SFAS 123R) in accounting for stock options issued to employees. The amount of compensation cost for share-based payments is measured based upon the fair value on the grant date of the equity instruments issued.  For stock options issued to non-employees, the Company applies the same standard.

Recent Accounting Pronouncements

In September 2011, the FASB issued Accounting Standards Update (“ASU”) No. 2011-08, Intangibles — Goodwill and Other (Topic 350). This Accounting Standards Update amends FASB ASC Topic 350. This amendment specifies the change in method for determining the potential impairment of goodwill. It includes examples of circumstances and events that the entity should consider in evaluating whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The amendments are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. The adoption does not have any material impact on the Company’s consolidated financial position and results of operations.

In December 2011, FASB issued Accounting Standard Update No. 2011-12, Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income (ASU 2011-12) , which indefinitely defers certain provisions of ASU 2011-05 issued earlier in June 2011and will be further deliberated by the FASB at a future date. The new ASU affects entities that report items of comprehensive income in any period presented. During the deferral period, entities will still need to comply with the existing requirements in U.S. GAAP for the presentation of reclassification adjustments. Specifically, ASC 220 gives entities the option of (1) presenting reclassification adjustments out of accumulated other comprehensive income on the face of the statement in which comprehensive income is presented or (2) disclosing reclassification adjustments in the footnotes to the financial statements. ASU 2011-12 and ASU 2011-05 share the same effective date. This guidance is effective for our interim and annual periods beginning after December 15, 2011. The adoption does not have any material impact on the Company’s consolidated financial statements, as it only requires a change in the format of presentation. Other accounting standards that have been issued or proposed by the FASB that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption.

NOTE 3 – PROPERTY AND EQUIPMENT

Fixed assets as of March 31, 2012 (unaudited) and December 31, 2011 were as follows:

PROPERTY AND EQUIPMENT
                 
                   
   
Estimated Useful Lives (Years)
   
March 31, 2012
   
Dcember 31, 2011
 
Computer Equipment
    3-5     $ 91,400     $ 72,124  
Furniture and fixtures
    3-5       8,453       8,453  
              99,853       80,577  
                         
Less: accumulated depreciation
            (24,264 )     (16,580 )
Fixed assets, net
          $ 75,589     $ 63,997  

There was $7,684 and $0 charged to operations for depreciation expense for the three months ended March 31, 2012 and March 31, 2011, respectively.
 
 
9

 

 
MEDL MOBILE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2012
(Unaudited)

NOTE 4 - PROVISION FOR INCOME TAXES

The provision (benefit) for income taxes for the three months ended March 31, 2012 differs from the amount which would be expected as a result of applying the statutory tax rates to the income (losses) before income taxes due primarily to changes in the valuation allowance to fully reserve net deferred tax assets and also due to the fact that MEDL was taxed as a S Corporation from January 1, 2011 to June 23, 2011, resulting in no tax benefit or deferred tax asset during this period.  Accordingly, all of the losses of MEDL flow through to the shareholders of the S Corporation and the Company has no deferred tax assets or loss carryforwards from this period.

Realization of deferred tax assets is dependent upon sufficient future taxable income during the period that deductible temporary differences and carry-forwards are expected to be available to reduce taxable income.  As the achievement of required future taxable income is uncertain, the Company recorded a valuation allowance.
 
   
As of
March 31,2012
 
 Deferred tax assets:
     
 Net Operating Loss
  $ (1,407,924 )
 Tax Rate
    34 %
 deferred tax assets 2012
  $ 122,702  
 deferred tax assets 2011
  $ 367,420  
 Total deferred tax assets
  $ 490,122  
 Less Valuation allowance
  $ (490,122 )
         
 Net deferred tax assets
  $ -  

Reconciliation of the differences between the statutory tax rate and the effective tax rate is:

  
 
March 31,
 2012
 
Federal statutory tax rate
    34 %
Effective Tax Rate
    34 %
Valuation Allowance
    (34 %)
Net Effective Tax Rate
    0 %

As of March 31, 2012, the Company has a net operating loss carry forward of $1,441,533 expiring through 2032. The Company has provided a valuation allowance against the full amount of the deferred tax asset due to management’s uncertainty about its realization. Furthermore, the net operating loss carry forward may be subject to further limitation pursuant to Section 382 of the Internal Revenue Code.

NOTE 5 - RELATED PARTY TRANSACTIONS

The Company has entered into a sub-lease with a company in which the Company’s CEO and his family are shareholders.  The sublease is for approximately 4,500 square feet.  The term of the sub-lease is from January 1, 2011 and ends at November 30, 2015. (See also Note 6)
 
 
10

 

 
MEDL MOBILE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2012
(Unaudited)

NOTE 6 - COMMITMENTS AND CONTINGENCIES

Lease

The Company is party to three non-cancelable lease agreements for office space through 2015. The first agreement is for approximately 4,500 square feet of space located at 18475 Bandilier Circle, unit A, Fountain Valley, CA.  The term of the sub-lease is from January 1, 2011 and ends at November 30, 2015.  The second lease is for approximately 4,786 square feet and is located at 18350 Mt. Langley Street, Fountain Valley, CA.  The term of this lease is from September 1, 2011 and ends at February 28, 2013.  The third agreement is for approximately 6,034 square feet of space located at 18475 Bandilier Circle, unit B, Fountain Valley, CA.  The term of the sub-lease is from May 1, 2012 and ends at November 30, 2015.

At March 31, 2012, aggregate future minimum payments under these leases, is as follows:

2012
 
$
124,240
 
2013
   
160,084
 
2014
   
153,676
 
2015
   
150,712
 
Total
 
$
588,712
 

Litigation

The Company is not presently involved in any litigation.

NOTE 7 – STOCKHOLDERS’ EQUITY (DEFICIT)

Preferred Stock

 The authorized preferred stock of the Company consists of 10,000,000 shares of preferred stock at a par value of $0.001.  As of March 31, 2012, the Company had no outstanding shares of preferred stock.

Common Stock

The authorized common stock of the Company consists of 500,000,000 shares of common stock with a par value of $0.001.

On April 20, 2011, MEDL sold an aggregate of $300,000 secured 5% bridge notes to certain accredited investors in a private placement transaction.  The bridge notes were to mature upon the earlier to occur of a private placement of at least $2,200,000 and simultaneous reverse merger or on October 20, 2011.  The principal amount of the bridge notes automatically exchanged into shares of common stock of the Company in the Private Placement (as defined below) at a price per share of $0.25.

On June 3, 2011, the board of directors of the Registrant authorized a 37.39716 for one forward split of its outstanding common stock in the form of a dividend, whereby an additional 36.39716 shares of common stock, par value $0.001 per share, were issued for each one share of common stock held by each shareholder of record on June 23, 2011.
 
 
11

 

 
MEDL MOBILE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2012
(Unaudited)

NOTE 7 – STOCKHOLDERS’ EQUITY (DEFICIT) (CONTINUED)

On June 24, 2011, the Company completed a share exchange (the “Share Exchange”) with MEDL, a California corporation, and the shareholders of MEDL (the “MEDL Shareholders”) according to which the MEDL Shareholders transferred all of the issued and outstanding capital stock of MEDL to the Company in exchange for the issuance to the MEDL Shareholders of an aggregate of 20,000,000 shares of common stock of the Company.  The Share Exchange caused MEDL to become a wholly-owned subsidiary of the Company.

In connection with the closing of the share exchange, the Company sold 10,000,000 shares of common stock at a purchase price of $0.25 per share in a private placement to accredited investors, resulting in aggregate gross proceeds of $2,500,000 (including the exchange of bridge notes in the aggregate principal amount of $300,000) (the “Private Placement”).  Accrued interest of $2,712 in respect of the bridge notes was not paid at the closing and is included in accounts and accrued expenses payable at March 31, 2012 and December 31, 2011, respectively.

Two business days following the closing of the Share Exchange and the Private Placement, under an Agreement of Conveyance, Transfer and Assignment of Assets and Assumption of Obligations (the “Conveyance Agreement”),  the Company transferred all of its pre-Exchange assets and liabilities to its newly formed wholly-owned subsidiary, Resume in Minutes Holdings, Inc. (“SplitCo”). Thereafter, pursuant to a stock purchase agreement (the “Stock Purchase Agreement”), the Company transferred all of the outstanding capital stock of SplitCo to certain of its former shareholders in exchange for the cancellation of 94,824,263 shares of its common stock that they owned (the “Split-Off”), with 10,000,000 shares of its common stock held by persons who acquired such shares prior to the Share Exchange remaining outstanding.  These 10,000,000 shares constitute the Company’s “public float” and are its only shares of registered common stock and accordingly are its only shares available for resale without further registration or under an applicable exemption from registration.

On December 23, 2011, the Company issued 25,000 shares of common stock for investor relations services at a price per share of $.80 for total expense of $20,000.

On January 2, 2012, the Company issued 41,667 shares of common stock for advisory services at a price per share of $.90 for total expense of $37,500.

On February 28, 2012, the Company acquired Inedible Software, LLC, a developer of mobile apps and related mobile app technologies. The purchase consideration paid was 442,542 shares of common stock of the Company to the sellers, half of which are being held in escrow for one year to secure against any claims of indemnification. The Company accounted for the value under ASC 805-50-30-2 “Business Combinations” whereby if the consideration is not in the form of cash, the measurement is based on either the cost which shall be measured based on the fair value of the consideration given or the fair value of the assets (or net assets) acquired, whichever is more clearly evident and thus more reliably measurable. The fair value of the shares issued amounted to $221,272, which was allocated between intangible assets – customer base for $144,000, and $77,272 to prepaid consulting fees.

On March 28, 2012, the Company issued to an accredited investor 3,000,000 shares of common stock and a warrant to purchase 1,000,000 shares of common stock for an aggregate purchase price of $1,500,000. The warrant has a three year term and may be exercised at an exercise price of $0.90 per share, subject to adjustment in the case of stock splits, distributions, reorganizations, recapitalizations and the like, and may be exercised on a cashless basis under certain circumstances. The warrant contains full ratchet anti-dilution protection in the case of a share issuance for consideration less than the then exercise price of the warrant, subject to customary exceptions.

As of March 31, 2012, the Company has 43,509,209 shares of common stock issued and outstanding.

Warrants

The Company has warrants outstanding to purchase 1,000,000 shares of common stock at $0.90 per share as of March 31, 2012, and no warrants were outstanding at December 31, 2011. There was warrant expense of $1,002,200 related to the issuance of the warrants for the three months ended March 31, 2012.
 
 
12

 

 
MEDL MOBILE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2012
(Unaudited)

NOTE 7 – STOCKHOLDERS’ EQUITY (DEFICIT) (CONTINUED)

Share-Based Compensation and Options Issued to Consultants

2011 Equity Incentive Plan

The board of directors adopted the 2011 Equity Incentive Plan, as amended, (the “Plan”) of Medl Mobile Holdings, Inc. (Nevada) that provided for the issuance of a maximum of 6,000,000 shares of common stock.   As of March 31, 2012, there were options issued to purchase 5,222,000 shares under the plan. Of this amount, there are vested options exercisable into 3,495,000 shares of common stock of which options exercisable for 2,118,500 shares of common stock have been issued to employees and options exercisable for 1,376,500 shares of common stock have been issued to non-employees. As of March 31, 2012, the Company had approximately 778,000 shares reserved for future grant under its Plan and there were no shares exercised during the three months ended March 31, 2012.

The Company generally grants stock options to employees and directors at exercise prices equal to the fair market value of the Company's stock at the dates of grant. Stock options are typically granted throughout the year and generally vest over five years of service thereafter and expire ten years from the date of the award, unless otherwise specified. The Company recognizes compensation expense for the fair value of the stock options over the requisite service period for each stock option award.

Total share-based compensation expense included in the consolidated statements of operations for the three months ended March 31, 2012 and March 31, 2011 was $44,837 and $0 respectively. At March 31, 2012, compensation expense included in selling, general and administration is $33,898. Compensation expense included in cost of goods sold is $10,939.

There was no capitalized share-based compensation cost as of March, 31, 2012 and there were no recognized tax benefits during the three months ended March 31, 2012 or March 31, 2011.

Share-Based Compensation and Options Issued to Consultants

Employee share option activity for the three months ended March 31, 2012 was as follows:

               
Weighted Average
       
         
Weighted
   
Remaining
   
Aggregate
 
         
Average
   
Contractual
   
Intrinsic
 
   
Options
   
Exercise Price
   
Life (Yrs.)
   
Value
 
                         
Options outstanding at December 31, 2011
    4,892,000       0.28       9.49       3,239,330  
Granted
    410,000       0.28       9.49       270,600  
Exercised
                               
Forfeited or cancelled
    (80,000 )     0.25               (60,000 )
Expired
                               
Options outstanding at March 31, 2012
    5,222,000       0.28       9.24       3,780,050  
Options expected to vest in the future at March 31, 2012
    1,726,458       0.31       9.25       1,199,644  
Options exercisable at March 31, 2012
    3,495,542       0.26       9.23       2,580,406  
Options vested, exercisable and options expected
                               
to vest at March 31 ,2012
    5,222,000       0.28       9.24       3,780,050  

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted price of the Company's common stock for those awards that have an exercise price currently below the closing price.
 
 
13

 

 
MEDL MOBILE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2012
(Unaudited)

NOTE 7 – STOCKHOLDERS’ EQUITY (DEFICIT) (CONTINUED)

Unvested share activity for the three months ended March 31, 2012 was as follows:

   
Unvested
   
Weighted
 
   
Number of
   
Average Grant
 
   
Options
   
Fair Value
 
Unvested balance at December 31, 2011
    1,980,416        
Granted
             
Vested
    (238,958 )     0.15  
Forfeited
    (15,000 )     0.15  
Unvested balance at March 31, 2012
    1,726,458       0.22  

At March 31, 2012, there was $326,327 of unrecognized share-based compensation expense related to unvested employee share options with a weighted average remaining recognition period of 2.3 years.
 
 
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Forward Looking Statements

Some of the statements contained in this Form 10-Q that are not historical facts are "forward-looking statements" 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. We urge you to be cautious of the forward-looking statements, that such statements, which are contained in this Form 10-Q, 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.

All written forward-looking statements made in connection with this Form 10-Q that are attributable to us or persons acting on our behalf, are expressly qualified in their entirety by these cautionary statements. Given the uncertainties that surround such statements, you are cautioned not to place undue reliance on such forward-looking statements.

Overview

We are primarily engaged in the monetization of mobile application software or “Apps” through four revenue generating platforms: (i) development of customized Apps for third parties to monetize their particular intellectual property, persona or brand, (ii) incubation of Apps in partnership with third parties and from a library of more than 75,000 original Apps concept submissions, (iii) sale of advertising and sponsorship opportunities directly to brands via mobile advertising networks, and (iv) acquisition of Apps from other developers and use of a proprietary application programming interface, or API, to make Apps recommendations for our user base.

Share Exchange

On June 24, 2011, we completed a share exchange pursuant to which we acquired all of the capital stock of MEDL Mobile, Inc., a California corporation (“MEDL”), which became our wholly owned subsidiary.  In connection with this share exchange, we discontinued our former business and succeeded to the business of MEDL as our sole line of business.  The share exchange is accounted for as a recapitalization.  MEDL is the acquirer for accounting purposes and we are the acquired company.  Accordingly, MEDL’s historical financial statements for periods prior to the acquisition have become those of the Registrant retroactively restated for, and giving effect to, the number of shares received in the share exchange.  The accumulated earnings of MEDL were also carried forward after the acquisition. Operations reported for periods prior to the share exchange are those of MEDL.

Critical Accounting Policies

We do not believe that the adoption of any recently issued, but not yet effective, accounting standards will have a material effect on our financial position and results of operations.
 
 
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Results of Operations

Three Months Ended March 31, 2012 Compared to Three Months Ended March 31, 2011 (unaudited)

The following table presents our results of operations for the three months ended March 31, 2012 compared to the three months ended March 31, 2011.
 
   
Three Months Ended March 31, 2012
   
Three Months Ended March 31, 2011
   
$ Change
   
% Change
 
                         
Revenue
  $ 1,149,998     $ 378,655     $ 771,343       204 %
                                 
Cost of Goods Sold
    374,331       182,593       191,738       105 %
                                 
Gross Profit
    775,667       196,062       579,605       296 %
                                 
Expenses:
                               
Selling, General & Administration
    2,183,591       175,138       2,008,453       1147 %
                                 
Net (Loss) Profit
  $ (1,407,924 )   $ 20,924     $ (1,428,848 )     -6829 %
 
Revenues

Revenues for the three months ended March 31, 2012 increased to $1,149,998 as compared to $378,655 for the three months ended March 31, 2011, an increase of $771,343 or 204%. The increase is primarily attributable to growth of our customer base through our expanded sales force and referrals from existing customers. The revenue increase was driven by the demand for the development of customized mobile applications for third parties to monetize their particular intellectual property, persona or brand.

Cost of Goods Sold

Cost of goods sold for the three months ended March 31, 2012 increased to $374,331 as compared to $182,593 for the three months ended March 31, 2011, an increase of $191,738 or 105%. The increase is primarily due to the addition of additional employees and outside contractors to fulfill customer orders for new mobile applications. The additional employees included developers, project managers, visual architects, and graphic designers.

Gross Profit

Gross profit for the three months ended March 31, 2012 increased to $775,667 as compared to $196,062 for the three months ended March 31, 2011, an increase of $579,605 or 296%. The gross profit increased due to the additional business and related revenue generated which utilized both existing employees and new employees in producing the mobile applications finished product for our customers.

Operating Expenses

Operating expenses for the three months ended March 31, 2012 increased to $2,183,591 as compared to $175,138 for the three months ended March 31, 2011, an increase of $2,008,453 or 1,147%. The increase is primarily attributable to salaries paid to our officers, who had previously not been paid in the prior year, the increase in support staff, sales and marketing staff, costs of moving into new corporate offices as well as costs associated with being a public company which include legal and accounting costs, stock option expense, investor relations and public relations expense, and  $1,002,200 of warrant expense incurred during the quarter.

Net Loss

Net loss for the three months ended March 31, 2012 was ($1,407,924), as compared to a net income of $20,924 for the three months ended March 31, 2011, a decrease of $1,428,848. The loss was a result of the increase in costs at a faster rate than the revenue growth of the company could support these increased costs as discussed above.
 
 
15

 

 
Liquidity and Capital Resources

Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Significant factors in the management of liquidity are funds generated by operations, levels of accounts receivable and accounts payable and capital expenditures.

Our business is still in the early stages, having commenced operations on March 4, 2009. At March 31, 2012 and December 31, 2011, we had cash of $2,395,053 and $1,075,307, respectively and working capital of $2,505,009 and $1,281,354, respectively.
 
Net cash used in operating activities for the three months ended March 31, 2012 was $145,978 compared to net cash provided in operating activities of $45,225 for the three months ended March 31, 2011.  The increase in net cash used in operating activities was primarily attributable to the $1,407,924 net loss for the period, offset by noncash options and warrant share based expense of $1,047,037.  Net cash used in investing activities for the three months ended March 31, 2012 was $19,276 as compared to net cash used in investing activities of $14,209 for the three months ended March 31, 2011.  Net cash provided by financing activities for the three months ended March 31, 2012 was $1,485,000 as compared to net cash used in financing activities $40,534 for the three months ended March 31, 2011. Net cash provided by financing activities was the result of $1,485,000 of net proceeds from a private placement described below that closed on March 28, 2012.

To date we have financed our operations through internally generated revenue from operations, the sale of our equity, the issuance of notes and loans from a shareholder.
 
In connection with the closing of the share exchange on June 24, 2011, we sold 10,000,000 shares of our common stock at a purchase price of $0.25 per share in a private placement to accredited investors, resulting in aggregate gross proceeds of $2,500,000 (including the exchange of bridge notes in the aggregate principal amount of $300,000).
 
On March 28, 2012, we entered into a securities purchase agreement with an accredited investor whereby we sold an aggregate of 1,000,000 units (the “Units”), each Unit comprised of three shares of our common stock and a warrant to purchase one share of our common stock at a price per Unit of $1.50. As a result of the sale, which closed on the same day as entering into the securities purchase agreement, we issued to the investor 3,000,000 shares of our common stock and a warrant to purchase 1,000,000 shares of our common stock for an aggregate purchase price of $1,500,000. The warrant has a three year term and may be exercised at an exercise price of $0.90 per share, subject to adjustment in the case of stock splits, distributions, reorganizations, recapitalizations and the like, and may be exercised on a cashless basis under certain circumstances. The warrant contains full ratchet anti-dilution protection in the case of a share issuance for consideration less than then exercise price of the warrant, subject to customary exceptions. The securities purchase agreement also grants the investor demand registration rights, piggyback registration rights and a right of participation in certain future offerings.

We do not have any material commitments for capital expenditures during the next twelve months. Although our net revenues and proceeds from the above described private placement are currently sufficient to fund our operating expenses, we may be required to raise additional funds in the future particularly if we are unable to generate positive cash flow as a result of our operations or require additional capital to expand our operations. Therefore our future operations may be dependent on our ability to secure additional financing.  Financing transactions may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms. However, the trading price of our common stock and a downturn in the U.S. equity and debt markets could make it more difficult to obtain financing through the issuance of equity or debt securities. Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses, fail to collect significant amounts owed to us, or experience unexpected cash requirements that would force us to seek alternative financing. Furthermore, if we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our common stock. The inability to obtain additional capital may restrict our ability to grow and may reduce our ability to continue to conduct business operations. If we are unable to obtain additional financing, we may have to curtail our marketing and development plans and possibly cease our operations.

Off Balance Sheet Arrangements

We do not engage in any activities involving variable interest entities or off-balance sheet arrangements.

Recent Accounting Pronouncements

We do not believe that the adoption of any recently issued accounting standards will have a material effect on our financial position and results of operations.
 
 
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ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 4. CONTROLS AND PROCEDURES.

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e)) under the Exchange Act) that is designed to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time specified in the Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer's management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Pursuant to Rule 13a-15(b) under the Exchange Act, the Company carried out an evaluation with the participation of the Company's management, including the Company's Chief Executive Officer ("CEO") and the Company's Chief Financial Officer ("CFO"), of the effectiveness of the Company's disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the quarter ended March 31, 2012. Based upon that evaluation, the Company's CEO and CFO concluded that the Company's disclosure controls and procedures were not effective as of March 31, 2012 due to the Company’s limited internal resources and lack of ability to have multiple levels of transaction review.

Management is in the process of determining how best to change our current system and implement a more effective system to insure that information required to be disclosed in this quarterly report on Form 10-Q has been recorded, processed, summarized and reported accurately. Our management acknowledges the existence of this issue, and intends to developed procedures to address them to the extent possible given limitations in financial and manpower resources. While management is working on a plan, no assurance can be made at this point that the implementation of such controls and procedures will be completed in a timely manner or that they will be adequate once implemented.

CHANGES IN INTERNAL CONTROLS

Our management, with the participation our CEO and CFO, performed an evaluation to determine whether any change in our internal controls over financial reporting occurred during the three month period ended March 31, 2012. Based on that evaluation, our CEO and our CFO concluded that no change occurred in the Company's internal controls over financial reporting during the quarter ended March 31, 2012, that has materially affected, or is reasonably likely to materially affect, the Company's internal controls over financial reporting.
 
 
17

 

 
  PART II--OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we may become involved in various lawsuits and legal proceedings that arise in the ordinary course of business. Litigation is, however, subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe would or could have, individually or in the aggregate, a material adverse effect on us.

ITEM 1A. RISK FACTORS

 We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

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

On February 28, 2012, we acquired Inedible Software, LLC, a developer of mobile apps and related mobile app technologies. In consideration, we issued 442,542 shares of our common stock to the sellers, half of which are being held in escrow for one year to secure against any claims of indemnification.

The shares were offered and sold pursuant to an exemption from the registration requirements under Section 4(2) of the Securities Act of 1933, as amended since, among other things, the transactions did not involve a public offering and the securities were acquired for investment purposes only and not with a view to or for sale in connection with any distribution thereof.

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

 None.

ITEM 4- MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5 - OTHER INFORMATION

(a) Form 8-K Information

None.

(b) Director Nomination Procedures

We do not have a standing nominating committee nor are we required to have one. We do not have any established procedures by which security holders may recommend nominees to our Board of Directors, however, any suggestions on directors, and discussions of board nominees in general, is handled by the entire Board of Directors.
 
 
18

 

 
ITEM 6 - EXHIBITS.

31.1
 
Section 302 Certification of Principal Executive Officer
31.2
 
Section 302 Certification of Principal Financial Officer
32.1*
 
Section 906 Certification of Principal Executive Officer
32.2*
 
Section 906 Certification of Principal Financial Officer
101**
 
The following materials from MEDL Mobile Holdings, Inc.’s Quarterly Report on Form 10-Q/A for the quarter ended March 31, 2012 are formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Cash Flow, and (iv) Notes to Consolidated Financial Statements tagged as blocks of text.

*
In accordance with Item 601of Regulation S-K, this Exhibit is hereby furnished to the SEC as an accompanying document and is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933.

**  
In accordance with Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

 
 
19

 

 
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.

 
MEDL Mobile Holdings, Inc.
 
       
       
May 21, 2012
By:  
/s/ Andrew Maltin
 
   
Andrew Maltin
Chief Executive Officer
(Principal Executive Officer)
 
       
       
May 21, 2012
By:  
/s/ Paul Caceres
 
   
Paul Caceres
Chief Financial Officer
(Principal Financial and Accounting Officer)
 

 
 
20

 

 
EXHIBIT INDEX

Exhibit No.
 
Description
     
31.1
 
Section 302 Certification of Principal Executive Officer
31.2
 
Section 302 Certification of Principal Financial Officer
32.1
 
Section 906 Certification of Principal Executive Officer
32.2
 
Section 906 Certification of Principal Financial Officer
101
 
The following materials from MEDL Mobile Holdings, Inc.’s Quarterly Report on Form 10-Q/A for the quarter ended March 31, 2012 are formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Cash Flow, and (iv) Notes to Consolidated Financial Statements tagged as blocks of text.

 

XOTC:MEDL Quarterly Report 10-Q/A Filling

XOTC:MEDL Stock - Get Quarterly Report SEC Filing of XOTC:MEDL stocks, including company profile, shares outstanding, strategy, business segments, operations, officers, consolidated financial statements, financial notes and ownership information.

XOTC:MEDL Quarterly Report 10-Q/A Filing - 3/31/2012
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