Mobile Lads Corporation: No Assets, No Revenue, And A $65 Million Market Cap

| About: Mobile Lads (MOBO)
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Summary

Mobile Lads Corporation has substantially no assets, no revenue, and no plans to invest in R&D.

Over 80% of the company's common stock is held by one former employee.

Management openly admits to spending only 7-10 hours per week on the business.

Buying shares of the company's common stock represents purchasing ownership of practically nothing.

Mobile Lads Corporation (OTCPK:MOBO) is a penny stock that has been promoted through paid advertisements via email. It is an astounding example of a company that has virtually no assets (save for just over $1300 in prepaid expenses), no history of revenue, no plans to invest in R&D, and yet has a market capitalization of $65 million.

Business Plan

The company's Plan of Operations in its 10-Q states that its business plan is as follows:

"Our business is advertising of products and services using SMS technology. We believe that traditional advertising has been undergoing a shift from being dominant; and mobile advertising is quickly becoming one of the most effective ways to reach target audiences anytime and anywhere."

The section goes on to state that the company expects to provide the following products/services: Mobile-friendly websites, SMS text messaging, and QR codes.

There is more in-depth description in the full filing, but it is pretty vague overall. Fair enough, but how realistic is this?

Financials

According to MOBO's most recent 10-Q filed on September 15, 2014, the company has $0 in cash and $1,256 in prepaid expenses, for a grand total of $1,256 in total assets as of July 31, 2014. Other notable features include a stockholders' deficit of $13,014. Additionally, it is important to note that there are 4.125 billion shares authorized and 233.5 million shares currently issued and outstanding. The company's income statement is not much better, showing no revenue for the quarter or the same quarter last year. The income statement also demonstrates that there has been substantial dilution of MOBO's common equity, as there are 233.5 million shares currently outstanding compared to 192.5 million shares outstanding in the same quarter last year. Net loss for the quarter was $13,014. Not surprisingly, the company displayed a similar figure in its cash flows, generating a cash outflow of $14,300.

This is the only company that I have looked that actually has $0 in cash on the books and such a paltry amount of spending going on - a lemonade stand probably has a more substantial balance sheet! And yet, it has a market cap of over $65 million!

No R&D, no employees besides the two executives

In the company's most recent 10-K (which was filed late), there is a curious note which reads:

"We have not spent any amounts on research and development activities during the year ended April 30, 2014. We anticipate that we will not incur any expenses on research and development over the next 12 months."

So the company admits that it has not spent any money on R&D, yet it boasts that it is developing mobile technology.

Just below the R&D statement, the 10-K states:

"At present, we have no employees other than our two officers and directors who each devote approximately 7-10 hours a week to our business."

14-20 man hours a week to develop and implement a tangible business seems just a bit optimistic, especially a business that has no assets.

Insider Ownership

Given that the company has dismal financial statements and half-hearted promotional material, one would expect that the company's stock ownership were concentrated within a few executives of the company. This is correct, however not in the way that I would expect. In the company's 10-K, it states that none of the executives receive any monetary compensation or warrants. However, it does state that Iouri Baltchougov, former president, CEO, secretary, treasurer, CFO and principal executive officer currently holds 192,500,000 shares, or 82.4% of the outstanding shares. That number seems familiar... where have we seen that before? Oh yes, in the company's filings for the previous year, in which it had 192.5 million shares outstanding.

Insider History

In MOBO's Form 10-K, the backgrounds of the directors are listed. Of particular interest is that of Alpha Pang, the current CFO:

"Alpha Pang has been CFO, Principal Accounting Officer, Secretary, Treasurer and a Director of our company since June 24, 2014. Since June 2004 to present, Mr. Pang has been working as a Business Consultant at ABP Financials, a private company. Since May 2011 to present, Mr. Pang has been the President and Director of Gold Cap Resources, a public company listed on NYSE EURONEXT PARIS, Marche Libre exchange. From September 2007 to June 2011 Mr. Pang was a director and the CFO of Angstrom Microsystems Inc., a public company. From November 2010 to May 2011, Mr. Pang was a director at Alaska Pacific Corp., a public company."

A quick search for the publicly listed companies reveals that all of them are trading at $0.00 or very close to it - probably not the kind of leadership that I would want to be in charge of a company that I am investing in.

Promotion

The promotion for this stock is less in-your-face than those of some others that I have covered, such as IFAN Financial (OTCPK:IFAN) and New Media Insight Group (OTC:NMED), and I have not heard of a hard mailer for it yet. However, it is still being promoted through paid email campaigns through PennyStockCircle.com, as demonstrated in the "Disclaimer and Release of Liability" statement below:

"We [PennyStockCircle.com] are engaged in the business of advertising and promoting companies for monetary compensation... PennyStockCircle.com is owned and operated by Micro-Cap Consultants LLC. Micro-Cap Consultants LLC has been compensated up to Thirty-Thousand Dollars Cash via Bank Wire Transfer by a third party (Micro-Cap Innovations) for a 1 Day Marketing Program regarding MOBO."

While the compensation amount for the one-day promotion is substantially less than for some of other hard mailers that I have seen, it is nevertheless a ridiculous promotion, claiming that the company "designs and delivers secure, wide-area wireless transaction software solutions for the consumer finance, web and health payment processing sectors." Sound familiar? We have seen many of these "mobile payment" penny stock pumps come and go, and this one is no exception. As expected, there is no mention of PennyStockCircle.com, Micro-Cap Consultants LLC, or Micro-Cap Innovations in MOBO's filings.

Conclusion

Of all of the penny stocks that I have looked at so far, none have had such a large market cap ($65 million as of this writing) with so little on the balance sheet. The company has no cash, no revenue, and admits to not planning to spend ANYTHING on R&D, and yet it claims that it has a business model. The only two employees are the senior executives, and over 85% of the common stock is held by a former senior executive, who held 100% of it until it was diluted last year. Buying shares of the company's common stock represents purchasing ownership of practically nothing - there are no assets, no history of revenue, and no expectation of future cash flows.

Note: 10-K available here, 10-Q available here. A copy of the email promotion available here.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

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