Home Bistro, Inc. /NV/ - Quarter Report: 2013 June (Form 10-Q)

f10q0613_falexploration.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2013

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: 333-170715

FAL EXPLORATION CORP.

(Name of Registrant as specified in its charter)

NEVADA		27-1517938
(State or other jurisdiction of incorporation of organization)		(I.R.S. Employer Identification No.)

431 Fairway Drive – Suite 260

Deerfield Beach, FL 33441

(Address of principal executive office)

(732) 530-1267

(Registrant’s telephone number)

APPS GENIUS CORP.

(Former Name, 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 þ 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 þ 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.

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer (Do not check if smaller reporting company)	o	Smaller reporting company	þ

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

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. There are 36,738 shares of common stock, par value $0.001 per share, issued and outstanding as of August 9, 2013.

FAL EXPLORATION CORP.

(FORMERLY APPS GENIUS CORP.)

FORM 10-Q

June 30, 2013

TABLE OF CONTENTS

		Page No.

PART I. - FINANCIAL INFORMATION
Item 1.	Financial Statements.	3
	Balance Sheets as of June 30, 2013 (Unaudited) and December 31, 2012	3
	Statements of Operations for the Three and Six Months Ended June 30, 2013 and 2012 (Unaudited)	4
	Statements of Cash Flows for the Six Months Ended June 30, 2013 and 2012 (Unaudited)	5
	Notes to Unaudited Financial Statements.	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.	15
Item 3	Quantitative and Qualitative Disclosures About Market Risk.	21
Item 4	Controls and Procedures.	21
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings.	22
Item 1A.	Risk Factors.	22
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	22
Item 3.	Defaults Upon Senior Securities.	22
Item 4.	Mine Safety Disclosures.	22
Item 5.	Other Information.	22
Item 6.	Exhibits.	23

FORWARD LOOKING STATEMENTS

This report contains forward-looking statements regarding our business, financial condition, results of operations and prospects. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions or variations of such words are intended to identify forward-looking statements, but are not deemed to represent an all-inclusive means of identifying forward-looking statements as denoted in this report. Additionally, statements concerning future matters are forward-looking statements.

Although forward-looking statements in this report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, without limitation, those specifically addressed under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our annual report on Form 10-K, in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Form 10-Q and in other reports that we file with the SEC. You are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this report.

We file reports with the SEC. The SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us. You can also read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. You can obtain additional information about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this report, except as required by law. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this quarterly report, which are designed to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.

FAL EXPLORATION CORP.

(FORMERLY APPS GENIUS CORP.)

BALANCE SHEETS

	June 30,			December 31,
	2013			2012
	(Unaudited)
ASSETS

CURRENT ASSETS:
Cash	$	3,272		$	77,716
Accounts receivable		113			815

Total Current Assets		3,385			78,531

PROPERTY AND EQUIPMENT, net		2,276			3,057

Total Assets	$	5,661		$	81,588

LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY

CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	57,084		$	43,933
Accounts payable - related party		30,000			9,000
Accrued salaries		55,000			10,000

Total Current Liabilities		142,084			62,933


STOCKHOLDERS' (DEFICIT) EQUITY:
Preferred stock ($0.001 par value; 20,000,000 shares authorized; No shares
issued or outstanding at June 30, 2013 and December 31, 2012)		-			-
Common stock ($0.001 par value; 100,000,000 shares authorized;
36,738 and 36,448 shares issued and outstanding
at June 30, 2013 and December 31, 2012, respectively)		37			37
Additional paid-in capital		2,560,201			2,555,518
Accumulated deficit		(2,696,661	)		(2,536,900	)

Total Stockholders' (Deficit) Equity		(136,423	)		18,655

Total Liabilities and Stockholders' (Deficit) Equity	$	5,661		$	81,588

See notes to unaudited financial statements

FAL EXPLORATION CORP.

(FORMERLY APPS GENIUS CORP.)

STATEMENTS OF OPERATIONS

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2013			2012			2013			2012
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)

REVENUES	$	349		$	1,248		$	1,042		$	4,974

OPERATING EXPENSES:
Licensing fees and expenses		-			78,358			-			132,944
Research and development		35			69,445			16,368			110,210
Administrative compensation		42,000			40,000			84,000			59,000
Professional fees		17,230			235,823			45,731			374,999
Other selling, general and administrative		3,548			83,269			14,593			110,964

Total Operating Expenses		62,813			506,895			160,692			788,117

LOSS FROM OPERATIONS		(62,464	)		(505,647	)		(159,650	)		(783,143	)

OTHER INCOME (EXPENSE):
Interest expense		(4	)		-			(4	)		(560	)
Interest expense - related party		-			-			-			(79	)
Loss on disposal of property and equipment		-			-			(115	)		-
Interest income		-			295			8			362

Total Other Income (Expense)		(4	)		295			(111	)		(277	)

NET LOSS	$	(62,468	)	$	(505,352	)	$	(159,761	)	$	(783,420	)

NET LOSS PER COMMON SHARE:
Basic and diluted	$	(1.70	)	$	(15.06	)	$	(4.37	)	$	(24.91	)

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic and diluted		36,734			33,560			36,590			31,452

See notes to unaudited financial statements

FAL EXPLORATION CORP.

(FORMERLY APPS GENIUS CORP.)

STATEMENTS OF CASH FLOWS

	For the Six Months Ended June 30,
	2013			2012
	(Unaudited)			(Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(159,761	)	$	(783,420	)
Adjustments to reconcile net loss from operations to net cash
used in operating activities:
Stock-based compensation and fees		4,683			345,007
Loss on disposal of property and equipment		115			-
Depreciation		666			673
Changes in assets and liabilities:
Accounts receivable		702			1,425
Prepaid expenses		-			23,259
Security deposit		-			(675	)
Accounts payable and accrued expenses		13,151			(13,916	)
Accrued salaries		45,000			-
Accounts payable - related party		21,000			(6,000	)
Due to related parties		-			(1,871	)

NET CASH USED IN OPERATING ACTIVITIES		(74,444	)		(435,518	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable		-			7,500
Payment of notes payable		-			(108,650	)
Payment of notes payable - related party		-			(10,000	)
Payment of insurance premium finance payable		-			(5,859	)
Proceeds from sale of common stock		-			1,000,000
Payment of placement costs and fees		-			(161,850	)

NET CASH PROVIDED BY FINANCING ACTIVITIES		-			721,141

NET (DECREASE) INCREASE IN CASH		(74,444	)		285,623

CASH - beginning of year		77,716			7,728

CASH - end of period	$	3,272		$	293,351

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for:
Interest	$	-		$	2,637
Income taxes	$	-		$	-

Non-cash investing and financing activities:
Issuance of common stock and warrants for services charged to prepaid expenses	$	-		$	396,471
Common stock issued for accounts payable- related party	$	-		$	12,000
Deferred offering cost offset against equity raise	$	-		$	7,500

See notes to unaudited financial statements.

FAL EXPLORATION CORP.

(FORMERLY APPS GENIUS CORP.)

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

For the Six Months Ended June 30, 2013

(Unaudited)

	Preferred Stock				Common Stock				Additional					Total
	Number of				Number of				Paid-in		Accumulated			Stockholders'
	Shares		Amount		Shares		Amount		Capital		Deficit			Equity (Deficit)

Balance, December 31, 2012						36,448		37		2,555,518		(2,536,900	)		18,655

Issuance on warrants and options for services		-		-		-		-		783		-			783

Issuance of common stock for services		-		-		290		-		3,900		-			3,900

Net loss, For the six months ended June 30, 2013		-		-		-		-		-		(159,761	)		(159,761	)

Balance, June 30, 2013		-		-		36,738		37		2,560,201		(2,696,661	)		(136,423	)

See notes to unaudited financial statements.

FAL EXPLORATION CORP.

(FORMERLY APPS GENIUS CORP.)

NOTES TO UNAUDITED FINANCIAL STATEMENTS

JUNE 30, 2013

NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

FAL Exploration Corp. (the “Company”), formerly named Apps Genius Corp., was incorporated in the State of Nevada on December 17, 2009. On July 9, 2013, the Company changed its name to FAL Exploration Corp. The Company’s business was creating innovative social games and mobile applications that let people play together with real-world friends and family using the currently available infrastructure built by both social and mobile networks. Beginning in January 2013, the Company changed the focus of its business plan to develop and operate a crowdfunding platform. Crowdfunding describes the collective cooperation, attention, and trust by people who network and pool their resources, usually via the Internet, to support efforts initiated by other people or organizations. The Company currently has two vertical websites which have been released and are operational.

On July 22, 2013, the Company received approval from the Financial Industry Regulatory Authority (“FINRA”) to effectuate a reverse split of 1000 to 1 (the “Reverse Split”) in which each shareholder will be issued 1 share of common stock in exchange for 1000 shares of their currently issued common stock, which became effective as of July 22, 2013. The Reverse Split had been previously approved and authorized by the board of directors and majority holders of the Company. All share and per share values for all periods presented in the accompanying unaudited financial statements are retroactively restated for the effect of the Reverse Split.

Basis of presentation and going concern

Management acknowledges its responsibility for the preparation of the accompanying interim financial statements which reflect all adjustments, consisting of normal recurring adjustments, considered necessary in its opinion for a fair statement of its financial position and the results of its operations for the interim period presented. These financial statements should be read in conjunction with the summary of significant accounting policies and notes to financial statements included in the Company’s Form 10-K annual report for the year ended December 31, 2012. The accompanying unaudited financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (the “U.S.”) for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole.

As reflected in the accompanying unaudited financial statements, the Company had a net loss and net cash used in operations of $159,761 and $74,444, respectively, for the six months ended June 30, 2013 and working capital deficit, stockholder’s deficit and an accumulated deficit of $138,699, $136,423 and $2,696,661 respectively at June 30, 2013 and has minimal revenues. These matters raise substantial doubt about the company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to further implement its business plan, raise additional capital, and generate more revenues. Management intends to attempt to raise additional funds by way of a public or private offering. While the Company believes in the viability of its strategy to raise additional funds, there can be no assurances to that effect. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Use of estimates

The preparation of the financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures at the date of the financial statements and during the reporting period. Actual results could materially differ from these estimates. Significant estimates in the six months ended June 30, 2013 and 2012 include the useful life of property and equipment, allowance for doubtful accounts receivable, assumptions used in assessing impairment of long-term assets, valuation of deferred tax assets, and the value of stock-based compensation and fees.

Cash and cash equivalents

For purposes of the statement of cash flows, the Company considers all highly liquid instruments purchased with a maturity of three months or less and money market accounts to be cash equivalents.

FAL EXPLORATION CORP.

(FORMERLY APPS GENIUS CORP.)

NOTES TO UNAUDITED FINANCIAL STATEMENTS

JUNE 30, 2013

NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Concentrations

Concentration of credit risk

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash. The Company maintains cash and cash equivalent balances at one financial institution that is insured by the Federal Deposit Insurance Corporation. The Company’s account at this institution is insured by the Federal Deposit Insurance Corporation ("FDIC") up to $250,000. The Company has not experienced any losses in such accounts through June 30, 2013. There were no balances in excess of FDIC insured levels as of June 30, 2013.

Concentration of revenue and geographic area

The Company sells its products to its customers through revenue sharing arrangements. The following represents identifiable concentrations for any arrangement where revenue exceeded 10% of the total revenues for the six months ended June 30, 2013 as follows:

Arrangement		Percentage of total revenues For the six months ended June 30, 2013		Percentage of accounts receivable balance at June 30, 2013
1		51.9%		-

The Company has customers in countries other than USA. During the six months ended June 30, 2013 and 2012, customers located in the USA represented substantially all of the Company’s total revenues.

Accounts receivable

Accounts receivable are presented net of an allowance for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses. The Company reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, customer’s historical payment history, its current credit-worthiness and current economic trends. Accounts are written off after exhaustive efforts at collection. At June 30, 2013 and December 31, 2012, the Company does not, based on a review of its outstanding balances, have an allowance for doubtful accounts.

Fair value measurements and fair value of financial instruments

The Company adopted ASC Topic 820, Fair Value Measurements. ASC Topic 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

*	Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.
*	Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other then quoted prices that are observable, and inputs derived from or corroborated by observable market data.
*	Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.

The carrying amounts reported in the balance sheets for cash, accounts receivable, accounts payable, and amounts due to related party approximate their fair market value based on the short-term maturity of these instruments. The Company did not identify any assets or liabilities that are required to be presented on the balance sheets at fair value in accordance with ASC Topic 820.

Property and equipment

Property and equipment are carried at cost and are depreciated on a straight-line basis over the estimated useful lives of the assets. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. The Company examines the possibility of decreases in the value of fixed assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable.

FAL EXPLORATION CORP.

(FORMERLY APPS GENIUS CORP.)

NOTES TO UNAUDITED FINANCIAL STATEMENTS

JUNE 30, 2013

NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Software development costs

Costs incurred in connection with the development of software products are accounted for in accordance with the Financial Accounting Standards Board Accounting Standards Codification ("ASC") 985 “Costs of Software to Be Sold, Leased or Marketed.” Costs incurred prior to the establishment of technological feasibility are charged to research and development expense. Software development costs are capitalized after a product is determined to be technologically feasible and is in the process of being developed for market. Amortization of capitalized software development costs begins upon initial product shipment. Capitalized software development costs are amortized over the estimated life of the related product (generally thirty-six months), using the straight-line method. The Company evaluates its software assets for impairment whenever events or change in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of software assets to be held and used is measured by a comparison of the carrying amount of the asset to the future net undiscounted cash flows expected to be generated by the asset. If such software assets are considered to be impaired, the impairment to be recognized is the excess of the carrying amount over the fair value of the software asset. During the six months ended June 30, 2013 and 2012, the Company did not capitalize any software development costs.

Impairment of long-lived assets

In accordance with ASC Topic 360, the Company reviews, long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. The Company did not record any impairment charges during the six months ended June 30, 2013 and 2012.

Revenue recognition

The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the purchase price is fixed or determinable and collectability is reasonably assured. For all revenue sources discussed below, in accordance ASC 605-45 “Principal Agent Considerations”, the Company recognizes revenue net of amounts retained by third party entities pursuant to revenue sharing agreements. The Company’s specific revenue recognition policies are as follows:

The Company recognizes revenue from the sale of its social games and mobile applications (“Apps”) when the App is sold and downloaded by the customer and collection is reasonably assured.

The Company recognizes revenues from the placement of banner ads on its social games and mobile applications upon placement of the banner and when collection is reasonably assured.

Some of the Company’s social games contain a virtual currency or point systems that allow users to increase their game playing levels and gain special privileges. Users collect points by moving through the levels, buying them or by completing offers from third-party advertisers that convert into points or virtual currency. When a user completes an offer for one of our third-party advertisers, the advertiser pays the Company a commission. The commission is recognized as revenue upon completion of the offer and the receipt by the Company of an electronic confirmation from the advertiser and when collection is reasonably assured. Virtual currency revenue for the six months ended June 30, 2013 and 2012 was insignificant. For revenues generated through Facebook, Facebook enables payments to the Company through their users. Facebook users can make payments on the Facebook Platform by using credit cards or other payment methods available on its website. The primary process for these transactions is through the purchase of Facebook virtual currency. Facebook users then use this virtual currency to purchase virtual and digital goods in games and apps from developers on the Facebook Platform. When a user engages in a payment transaction utilizing the virtual currency to purchase the Company’s applications or games, Facebook will remit to the Company an amount that is based on the total amount of virtual currency redeemed less the processing fee that Facebook charges the Company for the service performed. At such time as the revenue is earned, the Company records as revenue the net amount of the transaction due to the Company from Facebook.

We recognize revenues from our Crowdfunding platforms when the projects are funded and the funds are dispersed to the participants. Our revenues consist of commissions and are paid out of proceeds raised on each respective project.

FAL EXPLORATION CORP.

(FORMERLY APPS GENIUS CORP.)

NOTES TO UNAUDITED FINANCIAL STATEMENTS

JUNE 30, 2013

NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Income taxes

The Company is governed by the Income Tax Law of the United States. The Company utilizes ASC Topic 740, "Accounting for Income Taxes," which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

Under ASC Topic 740, the evaluation of a tax position is a two-step process. The first step is to determine whether it is more likely than not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigation based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50% likelihood of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. ASC Topic 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures, and transition.

Stock-based compensation

The Company accounts for stock-based instruments issued to employees in accordance with ASC Topic 718. ASC Topic 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity based compensation issued to employees. The Company accounts for non-employee share-based awards in accordance with ASC Topic 505-50.

Advertising

Advertising is expensed as incurred and is included in selling, general and administrative expenses on the accompanying statements of operations. For the six months ended June 30, 2013 and 2012, advertising expense was $567 and $315, respectively.

Research and development

Research and development costs which consist primarily of salaries and fees paid to third parties for the development of software and applications are expensed as incurred. For the six months ended June 30, 2013 and 2012, research and development costs were $16,368 and $110,210, respectively.

Net loss per share of common stock

Basic net loss per common share is computed by dividing net loss available to common shareholders by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. Potentially dilutive common shares consist of common stock warrants (using the treasury stock method). These common stock equivalents may be dilutive in the future. All potentially dilutive common shares were excluded from the computation of diluted shares outstanding as they would have an anti-dilutive impact on the Company’s net losses and consisted of the following:

	Six Months Ended June 30,
	2013		2012
Warrants		7,914		8,414
Stock options		525		525
Total		8,439		8,939

FAL EXPLORATION CORP.

(FORMERLY APPS GENIUS CORP.)

NOTES TO UNAUDITED FINANCIAL STATEMENTS

JUNE 30, 2013

NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Recent accounting pronouncements

Accounting standards that have been issued or proposed by 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 2 - PROPERTY AND EQUIPMENT

At June 30, 2013 and December 31, 2012, property and equipment consisted of the following:

	Useful Life	June 30, 2013			December 31, 2012
Office equipment and furniture	7 Years	$	-		$	214
Computer equipment	5 Years		6,581			6,581
			6,581			6,795
Less: accumulated depreciation			(4,305	)		(3,738	)
		$	2,276		$	3,057

For the six months ended June 30, 2013 and 2012, depreciation expense amounted to $666 and $673, respectively. In March 2013, the Company disposed its office equipment and furniture with a net book value of $115 realizing a loss on disposal of property and equipment of $115.

NOTE 3 – RELATED PARTY TRANSACTIONS

As of June 30, 2013 and December 31, 2012, the Company owed $30,000 and $9,000, respectively, to a company owned by its chief financial officer for services rendered.

NOTE 4 – STOCKHOLDERS’ (DEFICIT) EQUITY

Preferred stock

The Company authorized 20,000,000 preferred shares. Preferred shares may be designated by the Company’s board of directors. There were no shares designated as of June 30, 2013.

Equity incentive plan

On September 23, 2010, the Company’s board of directors adopted, and the Company’s stockholders approved the FAL Exploration Corp. Equity Incentive Plan (the “Plan”), which covers 5,000,000 shares of common stock. The purpose of the Plan is to advance the interests of the Company by enhancing the ability of the Company to (i) attract and retain employees and other persons or entities who are in a position to make significant contributions to the success of the Company and its subsidiaries; (ii) reward such persons for such contributions; and (iii) encourage such persons or entities to take into account the long-term interest of the Company through ownership of shares of the Company’s common stock, par value $.001 per share. The Plan is intended to accomplish these objectives by enabling the Company to grant awards in the form of incentive and nonqualified stock options, stock appreciation rights, restricted stock, deferred stock, or other stock based awards. The Plan will be administered by the Board of Directors of the Company or, upon its delegation, by the Compensation Committee of the Board of Directors. The Plan became effective on September 23, 2010 and will terminate on September 23, 2020.

Subject to adjustment as provided in the Plan, the aggregate number of shares of common stock reserved for issuance pursuant to awards granted under the Plan shall be five million (5,000,000) shares; provided, however, that within sixty (60) days of the end of each fiscal year following the adoption of the Plan, the Board, in its discretion, may increase the aggregate number of shares of Common Stock available for issuance under the Plan by an amount not greater than the difference between (i) the number of shares of Common Stock available for issuance under the Plan on the last day of the immediately preceding fiscal year, and (ii) the number of shares of Common Stock equal to 15% of the shares of Common Stock outstanding on the last day of the immediately preceding fiscal year. As of June 30, 2013, no instruments have been granted under the Plan.

FAL EXPLORATION CORP.

(FORMERLY APPS GENIUS CORP.)

NOTES TO UNAUDITED FINANCIAL STATEMENTS

JUNE 30, 2013

NOTE 4 – STOCKHOLDERS’ (DEFICIT) EQUITY (continued)

Common stock

On July 22, 2013, the Company received approval from FINRA to effectuate a reverse split of 1000 to 1 in which each shareholder will be issued 1 share of common stock in exchange for 1000 shares of their currently issued common stock, which became effective as of July 22, 2013. The Reverse Split had been previously approved and authorized by the board of directors and majority holders of the Company. All share and per share values for all periods presented in the accompanying unaudited financial statements are retroactively restated for the effect of the Reverse Split.

In March 2013, the Company issued 90 post-split (89,820 pre-split) shares of its common stock to a consultant for payment of public relations services rendered. The Company valued these common shares at the fair value of $16.70 post-split ($0.0167 pre-split) per common share (see Note 5) based on the quoted trading price of the common stock on the grant date which is the measurement date and recorded stock-based compensation of $1,500 during the six months ended June 30, 2013.

In April 2013, the Company issued 200 post-split (200,000 pre-split) shares of its common stock to two consultants for services rendered in April 2013 and May 2013. The Company valued these common shares at the fair value of $12 post-split ($0.012 pre-split) per common share based on the quoted trading price of the common stock on the grant date which is the measurement date. In connection with issuance of these common shares, the Company recorded stock-based consulting of $2,400.

Common stock warrants

On January 16, 2013, the Company entered into an Advisory Board Agreement (the “Agreement”). Pursuant to the Agreement, the Company issued warrants exercisable for the purchase of 100 post-split (100,000 pre-split) shares of the Company’s common stock at an exercise price equal to $50 post-split ($0.05 pre-split) per share. The warrants will be exercisable until January 2016. The Company accounted for the equity instruments issued pursuant to the Agreement in accordance with ASC 505-50, “Equity Based Payments to Non-Employees”.

The Company calculated the fair value of the 100 post-split (100,000 pre-split) warrants granted using the Black-Scholes option pricing model and recorded the fair value of $783. In applying the Black-Scholes method, the Company calculated volatility using actual historical volatility, utilized discount rates obtained from the Federal Reserve Statistical Release for treasury instruments of the same duration, and an expected term based on the estimated contractual term of the warrants of 3 years. The value of the warrant on the grant date was based upon the following Black-Scholes assumptions; exercise prices of $50 post-split ($0.05 pre-split), actual historical volatility of 123%, expected term of 3 years and discount rate of 0.39%. In connection with these warrants, the Company recorded stock-based consulting expense of $783 during the six months ended June 30, 2013.

Warrant activities for the six months ended June 30, 2013 are summarized as follows:

	Number of Warrants			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Balance at December 31, 2012		8,914		$	260.0
Issued		100			50.0
Exercised/forfeited		(1,100	)		310.0
Balance at June 30, 2013		7,914		$	246.9		2.94	$	-
Warrants exercisable at June 30, 2013		7,339		$	248,.2		3.17	$	-

FAL EXPLORATION CORP.

(FORMERLY APPS GENIUS CORP.)

NOTES TO UNAUDITED FINANCIAL STATEMENTS

JUNE 30, 2013

NOTE 4 – STOCKHOLDERS’ (DEFICIT) EQUITY (continued)

Stock option activities for the six months ended June 30, 2013 are summarized as follows:

	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Balance at December 31, 2012		525	$	140.00
Granted		-		-
Exercised/forfeited		-		-
Balance at June 30, 2013		525	$	140.00		3.53	$	-
Options exercisable at June 30, 2013		525	$	140.00		3.53	$	-

The weighted-average grant-date fair value of options granted to employees/consultants during the six months ended June 30, 2013 was none. As of June 30, 2013, there were total unrecognized compensation costs related to non-vested share-based compensation arrangements of $0.

NOTE 5 – COMMITMENT AND CONTINGENCIES

Licensing Agreements

NEP Snooki Enterprises, LLC

On October 17, 2011 (the “Effective Date”), the Company entered into an exclusive, worldwide licensing agreement (the “License Agreement”) with NEP Snooki Enterprises, LLC (the “NEP”) and Starz Management & PR (“Starz”), which granted the Company the right to use Nicole Polizzi’s (known by the stage name “Snooki”) name and likeness in the development, manufacture, marketing, sale and distribution of social applications and social games (the “Apps”) to be released and offered on the Android, Apple's iOS, Facebook, and Google+ platforms. Pursuant to the License Agreement, the Company was to develop a total of four Apps within one year of the Effective Date (the “Initial Term”). Through June 2012, the Company released three Apps and will not issue the fourth App. The term of the License (the “Term”) was one year from the earlier of (i) the Release Date of fourth App described above or (ii) eight months after the Effective Date. Accordingly, the License agreement expired in June 2013 and the Company will not renew this agreement, in consideration for the exclusive license granted by NEP during the Initial Term, the Company paid a non-refundable license fee of $55,000 (the “Cash Fee”). The Company shall be entitled to recover the Cash Fees or Additional Cash Fees from any revenue generated by the sale of the products related to the License Agreement by deducting the Cash Fee (or Additional Cash Fees, if applicable) prior to the payment of any royalties, as described below; provided, however, the Company shall only be entitled to deduct a maximum of $13,750 for each product.

The Company shall pay NEP non-returnable royalties (“Royalties”) in an amount equal to 50% of the revenue generated, directly or indirectly, from the virtual sale of the Products, advertising sponsorship, commercial tie-ins and/or product placement related to the licensed property, and shall pay Starz Royalties equal to 10% of the revenue generated from the sale of the products related to the licensed property. The revenue shall be calculated as the gross revenue less any mandatory third party commissions, including fees from all sites that sell and market the products and any additional marketing or advertising expenses, and any recovery of Cash Fees as permitted, as discussed above.

FAL EXPLORATION CORP.

(FORMERLY APPS GENIUS CORP.)

NOTES TO UNAUDITED FINANCIAL STATEMENTS

JUNE 30, 2013

NOTE 5 – COMMITMENT AND CONTINGENCIES (continued)

Licensing Agreements (continued)

In addition, on the Effective Date, the Company issued NEP or assignees warrants exercisable for the purchase of 1,100 post-split (1,100,000 pre-split) shares of the Company’s common stock at an exercise price equal to $310 post-split ($0.31 pre-split) per share on a for-cash or cashless exercise basis (the “Warrants”) and 70 post-split (70,000 pre-split) shares of the Company’s common stock were issued to Starz. The Warrants were exercisable by Licensor until the later of (i) one hundred fifty (150) days following the end of the Term (and any extensions thereto) or (ii) eighteen (18) months following the Effective Date. The warrants expired in April 2013.

Mike Sorrentino and MPS Entertainment LLC

On February 9, 2012 (the “Effective Date”), the Company entered into an exclusive, worldwide licensing agreement (the “MPS License Agreement”) with Mike Sorrentino and MPS Entertainment LLC (“MPS”) and Starz Management & PR (“Starz”), which granted the Company the right to use Mike Sorrentino’s (known by the stage name “The Situation”) name and likeness in the development, manufacture, marketing, sale and distribution of social applications and social games (the “Apps”) to be released and offered on the Android, Apple's iOS, Facebook, and Google+ platforms. Pursuant to the MPS License Agreement, the Company will develop a total of four Apps within 18 months of the Effective Date (the “Initial Term”). The Company issued one App in May 2012 and has not released and does not intend to release any additional Apps under the MPS License Agreement. The MPS License Agreement expired in August 2013.

The Company shall pay MPS non-returnable royalties (“Royalties”) in an amount equal to 42.5% of the revenue generated, directly or indirectly, from the virtual sale of the Products, advertising sponsorship, commercial tie-ins and/or product placement related to the licensed property, and shall pay Starz Royalties equal to 15% of the revenue generated from the sale of the products related to the licensed property. The revenue shall be calculated as the gross revenue less any mandatory third party commissions, including fees from all sites that sell and market the products and any bonus payments made. The Company shall pay a bonus to Licensor equal to $10,000 per 100,000 active users up to 1,000,000 active users. The bonus is fully recoupable by the Company against future revenues.

In consideration for the exclusive license granted by Licensor during the Term, the Company issued Licensor warrants exercisable for the purchase of 1,000 post-split (1,000,000 pre-split) shares of the Company’s common stock at an exercise price equal to $230 post-split ($0.23 pre-split) per share (the “Situation Warrants”) and the Company has issued Starz warrants exercisable for the purchase of 100 post-split (100,000 pre-split) shares of the Company’s common stock at an exercise price equal to $230 post-split ($0.23 pre-split) per share (the “Starz Warrants”). The Situation Warrants are exercisable by Licensor until the later of (i) one hundred fifty (150) days following the end of the Term (and any extensions thereto) or (ii) eighteen (18) months following the Effective Date. The Situation warrants can be exercised as follows: 500 post-split (500,000 pre-split) warrants on the Effective date, and 167 post-split (166,667 pre-split) on the release of the second game, 167 post-split (166,667 pre-split) upon release of the third game and 167 post-split (166,666 pre-split) upon release of the fourth game. The Starz Warrants shall vest upon the release of each game at 25 post-split (25,000 pre-split) warrants per game.

Consulting Agreement for Public Relations Services

On February 6, 2013, the Company entered into a 5 month consulting agreement for public relations services. Pursuant to the consulting agreement, the Company shall pay the consultant (a) $1,250 per month and (b) $750 per month payable in the Company’s common stock equal to either the previous months running average of the daily close price or $16.70 post-split ($0.0167 pre-split), whichever is greater. In March 2013, the Company issued 90 post-split (89,820 pre-split) shares of its common stock to such consultant which represents payment for February and March 2013 services. The consulting agreement maybe cancelled in writing by either party with at least 30 days notice. Effective March 31, 2013, the Company cancelled this consulting agreement. The Company has paid its obligation under this consulting agreement.

NOTE 6 – SUBSEQUENT EVENTS

On July 9, 2013, the Company filed a Certificate of Amendment to its Articles of Incorporation (the “Amendment”) to change its name from “Apps Genius Corp” to “FAL Exploration Corp.” (the “Name Change”). The Amendment was effective as of July 9, 2013

On July 22, 2013, the Company received approval from the Financial Industry Regulatory Authority to effectuate a reverse split of 1000 to 1 (the “Reverse Split”) in which each shareholder was issued 1 share of common stock in exchange for 1000 shares of their currently issued common stock. The Reverse Split became effective as of July 22, 2013. The Reverse Split had been previously approved and authorized by the Board and majority holders of the Company and, as a result, the issued and outstanding Common Stock shall decrease from 36,739,192 to 36,739.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto. This section includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.

Overview

We were incorporated in the State of Nevada on December 17, 2009 as Apps Genius Corp. On July 9, 2013, we changed our name to FAL Exploration Corp.

Initially, the Company developed, marketed, published and distributed social games and software applications that consumers could use on a variety of platforms. Included were such platforms as social networks, wireless devices such as cellular phones and smart phones including the Apple iPhone™ and standalone websites. We released several applications including ‘Bruisers’, a game application for Facebook, ‘My Mad Millions’, a game application for Facebook™, Drama Llama, an application for Facebook™, ‘Slap a Friend’, a game application for the Apple Iphone™, Bed Bug Alert, a utility application for Apple Iphone™ and Crazy Dream Application for Facebook™, Snookify Me! application for Iphone and Android, and Snooki’s Match Game Application for Facebook amongst other games and apps.

Plan of Operations

Beginning in January 2013, we changed the focus of our Business Plan to develop and operate a crowdfunding platform. We currently have two vertical sites which have been released and are in operation.

On April 19, 2012, we acquired the domain name “GetFunded.com” in order to explore potential opportunities in crowdfunding. “Crowdfunding” describes the collective cooperation, attention, and trust by people who network and pool their resources, usually via the Internet, to support efforts initiated by other people or organizations. Crowdfunding can occur for a wide variety of purposes, both for-profit and not-for-profit, including mobile app development, disaster relief, citizen journalism, support of artists by fans, political campaigns, startup company funding, movie or software development, and scientific research. Crowdfunding has experienced a sudden increase in popularity and could become a viable means for start-up companies to raise capital from investors because of the Jumpstart Our Business Startups Act or “JOBS” Act, which was signed into law by President Obama on April 5, 2012. The JOBS Act eases certain securities regulations, particularly for smaller issuers of securities, and creates an exemption from registration under the Securities Act of 1933 for crowdfunding, subject to certain restrictions and qualifications. The SEC had until December 31, 2012 to enact a regulatory system for crowdfunding, but this could potentially be extended until a later date. However, the SEC still has not enacted a regulatory system or set up compliance rules and regulations with respect to crowdfunding. We are unsure when these rules and regulatory system will be set forth by the SEC.

Initially, our Beta version of www.GetFunded.com was open for registration to all businesses. The GetFunded.com platform initially allowed users to donate financially to the development of a wide range of products and services. In our initial release, GetFunded.com allowed users to contribute to a project in exchange for services or products. We have since moved to restrict GetFunded.com to be used solely for the purpose of raising funds for the benefit of 503C non-profit corporations that benefit animals.

Additionally, in late December 2012 we launched our second vertical of our crowdfunding platform, www.GetGayFunded.com which is dedicated to the Lesbian Gay Bisexual Transgendered community and their causes.

Our website, www.GetFunded.com will position us to be part of crowdfunding when the SEC regulations become effective and entrepreneurs are able to solicit capital from investors through these channels. Crowdfunding has already received a large amount of publicity.

Both of our crowdfunding platforms use Amazon payments to process pledges made to individual projects listed on our sites. Our revenue is earned when a project is funded, and Amazon sends us our fees at that time.

Limited Operating History

We have generated a limited financial history and have not previously demonstrated that we will be able to expand our business. Our business is subject to risks inherent in growing an enterprise, including limited capital resources and possible rejection of our business model and/or sales methods.

Critical Accounting Policies and Estimates

While our significant accounting policies are more fully described in Note 1 to our financial statements for the six months ended June 30, 2013, we believe that the following accounting policies are the most critical to aid you in fully understanding and evaluating this management discussion and analysis.

Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We continually evaluate our estimates, including those related to bad debts, recovery of long-lived assets, income taxes, and the valuation of equity transactions. We base our estimates on historical experience and on various other assumptions that we believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Any future changes to these estimates and assumptions could cause a material change to our reported amounts of revenues, expenses, assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of the financial statements.

Software development costs

Costs incurred in connection with the development of software products are accounted for in accordance with the Financial Accounting Standards Board Accounting Standards Codification ("ASC") 985 “Costs of Software to Be Sold, Leased or Marketed.” Costs incurred prior to the establishment of technological feasibility are charged to research and development expense. Software development costs are capitalized after a product is determined to be technologically feasible and is in the process of being developed for market. Amortization of capitalized software development costs begins upon initial product shipment. Capitalized software development costs are amortized over the estimated life of the related product (generally thirty-six months), using the straight-line method. The Company evaluates its software assets for impairment whenever events or change in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of software assets to be held and used is measured by a comparison of the carrying amount of the asset to the future net undiscounted cash flows expected to be generated by the asset. If such software assets are considered to be impaired, the impairment to be recognized is the excess of the carrying amount over the fair value of the software asset. We have not capitalized any software development costs.

Impairment of long-lived assets

In accordance with ASC Topic 360, we review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. We recognize an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. We did not record any impairment charges during the six months ended June 30, 2013 and 2012.

Revenue recognition

We recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the purchase price is fixed or determinable and collectability is reasonably assured. For all revenue sources discussed below, in accordance ASC 605-45 “Principal Agent Considerations”, we recognize revenue net of amounts retained by third party entities pursuant to revenue sharing agreements. Our specific revenue recognition policies are as follows:

We recognize revenue from the sale of our social games and mobile applications (“Apps”) when the App is sold and downloaded by the customer and collection is reasonably assured.

We recognize revenues from the placement of banner ads on social games and mobile applications upon placement of the banner and when collection is reasonably assured.

Some of the our social games contain a virtual currency or point systems that allow users to increase their game playing levels and gain special privileges. Users collect points by moving through the levels, buying them or by completing offers from third-party advertisers that convert into points or virtual currency. When a user completes an offer for one of our third-party advertisers, the advertiser pays us a commission. The commission is recognized as revenue upon completion of the offer and the receipt by us of an electronic confirmation from the advertiser and when collection is reasonably assured. Virtual currency revenue for the six months ended June 30, 2013 and 2012 was insignificant. For revenues generated through Facebook, Facebook enables payments to the Company through their users. Facebook users can make payments on the Facebook Platform by using credit cards or other payment methods available on its website. The primary process for these transactions is through the purchase of Facebook virtual currency. Facebook users then use this virtual currency to purchase virtual and digital goods in games and apps from developers on the Facebook Platform. When a user engages in a payment transaction utilizing the virtual currency to purchase the Company’s applications or games, Facebook will remit to the Company an amount that is based on the total amount of virtual currency redeemed less the processing fee that Facebook charges the Company for the service performed. At such time as the revenue is earned, the Company records as revenue the net amount of the transaction due to the Company from Facebook.

We recognize revenues from our Crowdfunding platforms when the projects are funded and the funds are dispersed to the participants. We recognize revenues from our Crowdfunding platforms when the projects are funded and the funds are dispersed to the participants. Our revenues consist of commissions and are paid out of proceeds raised on each respective project.

Stock-based compensation

We account for stock-based instruments issued to employees in accordance with ASC Topic 718. ASC Topic 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity based compensation issued to employees. We account for non-employee share-based awards in accordance with ASC Topic 505-50.

Recent accounting pronouncements

Accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption.

Results of Operations

Comparison of the Three and Six Months Ended June 30, 2013 and 2012

Revenues

For the six months ended June 30, 2013 and 2012, we recognized revenues of $1,042 and $4,974, respectively, a decrease of $3,932 or 79%. For the three months ended June 30, 2013 and 2012, we recognized revenues of $349 and $1,248, respectively, a decrease of $899 or 72%. The decrease in revenues was mainly attributable to a decrease in the sale of previously developed applications and advertising revenues and a lack in the development of new games and applications due to a lack of working capital and development activities. In addition, we changed the focus of our business plan to develop and operate a crowdfunding platform. Our revenues for the three and six months ended June 30, 2013 was mainly attributable to our crowdfunding business. During the remainder of fiscal 2013, we do not plan on further developing any new games or applications.

Operating Expenses

For the three months ended June 30, 2013 and 2012, operating expenses amounted to $62,813 and $506,895 respectively, a decrease of $444,082 or 88%. For the six months ended June 30, 2013 and 2012, operating expenses amounted to $159,650 and $783,143 respectively, a decrease of $623,493or 80%. Changes in operating expenses consisted of the following:

	For the Three Months ended June 30, 2013		For the Three Months ended June 30, 2012		For the Six Months ended June 30, 2013		For the Six Months ended June 30, 2012

Licensing fees and expenses	$	-	$	78,358	$	-	$	132,944
Research and development		35		69,445		16,368		110,210
Administrative compensation		42,000		40,000		84,000		59,000
Professional fees		17,230		235,823		45,731		374,999
Other selling, general and administrative		3,548		83,269		14,593		110,964
Total	$	62,813	$	506,895	$	160,692	$	788,117

For the three months ended June 30, 2013 and 2012, license fees and expenses amounted to $0 and $78,358, respectively. For the six months ended June 30, 2013 and 2012, license fees and expenses amounted to $0 and $132,944, respectively. We did not incur license fees and expenses in connection with our social games and mobile applications during the three and six months ended June 30, 2013 as we have changed the focus of our business plan to develop and operate a crowdfunding platform.

*	Research and development expenses consist primarily of salaries and fees paid to third parties for the development of software and applications as well as the development of the “Get Funded.com” website. For the three months ended June 30, 2013, research and development expenses decreased by $69,410 or 100% as compared to the three months ended June 30, 2012. For the six months ended June 30, 2013, research and development expenses decreased by $93,842 or 85% as compared to the six months ended June 30, 2012. During the three and six months ended June 30, 2013, we substantially decreased development activities until we generate sufficient revenues from our current portfolio of products or we were able to raise additional working capital funds from debt or equity financing or loans. During the remainder of fiscal 2013, we expect research and development activities to decrease due to limited working capital.
*	For the three months ended June 30, 2013, administrative compensation increased by $2,000 or 5% as compared to the three months ended June 30, 2012. For the six months ended June 30, 2013, administrative compensation increased by $25,000 or 42% as compared to the six months ended June 30, 2012. The increase is primarily attributable to an increase in wages of our Chief Executive Officer. We expect administrative salaries to increase in 2013 as we increase our operations.
*	For the three months ended June 30, 2013, professional fees decreased by $218,593 or 93% as compared to the three months ended June 30, 2012. For the six months ended June 30, 2013, professional fees decreased by $329,268 or 88% as compared to the six months ended June 30, 2012. During the three and six months ended June 30, 2013, the decrease is primarily attributable to a decrease in consulting and investor relations fees. We expect professional fees to increase as we incur significant costs associated with our public company reporting requirements, costs associated with newly applicable corporate governance requirements, including requirements under the Sarbanes-Oxley Act of 2002 and other rules implemented by the Securities and Exchange Commission.
*	For the three months ended June 30, 2013, other selling, general and administrative expenses decreased by $79,721 or 96% as compared to the three months ended June 30, 2012. For the six months ended June 30, 2013, other selling, general and administrative expenses decreased by $96,371 or 87% as compared to the six months ended June 30, 2012. During the three and six months ended June 30, 2012, we incurred web development expense of approximately $60,350 in connection with our crowdfunding business as compared to $0 for the 2013 period. Additionally, for the three and six months ended June 30, 2013, travel expenses also decreased as compared to the 2012 period.

Other Income

For the three months ended June 30, 2013 and 2012, we recognized other income (expense) of ($4) and $295, respectively. For the six months ended June 30, 2013 and 2012, we recognized other expense of $111 and $277, respectively. The decrease in interest income was attributable to having a lower cash balance with which to earn interest on. Additionally, for the six months ended June 30, 2013 and 2012, we incurred aggregate interest expense of $4 and $560 related to outstanding notes payable and related party notes, respectively, and in the six months ended June 30, 2013 we lost $115.00 in the disposal of furniture.

Net Loss

As a result of the factors described above, our net loss for the three months ended June 30, 2013 and 2012 was $62,468 and $505,352, or a net loss per common share of $1.70 and $15.06 (basic and diluted), respectively. Our net loss for the six months ended June 30, 2013 and 2012 was $159,761 and $783,420, or a net loss per common share of $4.37 and $24.91 (basic and diluted), respectively.

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. To date, we have funded our operations through the sale of our common stock. Our primary uses of cash have been for salaries and fees paid to third parties for the development of our products. All funds received have been expended in the furtherance of growing the business and establishing brand portfolios. The following trends are reasonably likely to result in a material decrease in our liquidity over the near to long term:

●	An increase in working capital requirements to finance additional product and App development,

●	Addition of administrative and sales personnel as the business grows,

●	Increases in advertising, public relations and sales promotions for existing and new brands as the company expands within existing markets or enters new markets,

●	The cost of being a public company, and

●	Capital expenditures to add additional technology.

Our net revenues are not sufficient to fund our operating expenses. At June 30, 2013, we had a cash balance of $3,272. Since inception we have funded our operations as follows:

●

In 2010, we raised net proceeds of $652,000 from the sale of common stock to fund our operating expenses, pay our obligations, and for working capital purposes.

●

In 2011, we borrowed $111,150 ($101,150 from third parties and $10,000 from our chief executive officer) pursuant to note agreements. In January 2012, we borrowed an additional $7,500 from third parties. These funds were used for working capital purposes and to pay the fee for the License Agreement. These notes were unsecured, had interest at 6.0% per annum and were generally due with one year or less of the original note date or within three business days of the closing of a private placement of certain equity securities offered by the Company. In February 2012, the Company raised net proceeds of approximately $830,000 in a private placement as discussed below and these notes and all accrued interest were repaid out of the net proceeds.

●

On February 9, 2012, we entered into a securities purchase agreement (the “Securities Purchase Agreement”) with certain accredited investors (the “Investors”) relating to the sale and issuance by us to the Investors of an aggregate of 5,714,286 units, each unit consisting of (i) one share of common stock, par value $0.001 per share (“Common Stock”), of the Company, and (ii) a five-year warrant to purchase one share of Common Stock at an exercise price of $0.25 per share (each, a “Warrant,” and collectively, the “Warrants”). Each unit was sold at a price of $0.175. Pursuant to the Securities Purchase Agreement, on February 14, 2012 (the closing date), we issued 5,714,286 shares of common stock and issued 5,714,286 Warrants for net proceeds to us from the sale of the units, after deducting the placement agent’s fees and offering expenses, of approximately $830,000. We conducted the Offering pursuant to a registration statement on Form S-1 which was declared effective by the Securities and Exchange Commission on February 9, 2012.The Securities Purchase Agreement contains provisions that restrict the Company from issuing, except pursuant to certain exceptions, any Common Stock or Common Stock equivalents involving a Variable Rate Transaction (as that term is defined in the Securities Purchase Agreement) until five years from the closing.

We currently have no material commitments for capital expenditures. We will need to raise additional funds, particularly if we are unable to generate positive cash flow as a result of our operations. We estimate that based on current plans and assumptions, that our available cash will be insufficient to satisfy our cash requirements under our present operating expectations. Other than working capital and funds received pursuant to the Securities Purchase Agreement, we presently have no other alternative source of working capital. We have used these funds to fund our operating expenses, pay our obligations, grow our company, and to develop products as required by our License Agreement and for the development of new Apps, games, and the development of our crowd funding sites. We will need to raise significant additional capital to fund our operations and to provide working capital for our ongoing operations and obligations. We do not anticipate we will be profitable in 2013. Therefore our future operations is 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 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 will be required to cease our operations.

We anticipate that depending on market conditions and our plan of operations, we may incur operating losses in the foreseeable future. Therefore, our auditors have raised substantial doubt about our ability to continue as a going concern on their audit opinion for the year ended December 31, 2012.

Our liquidity is negatively impacted by the significant costs associated with our public company reporting requirements, costs associated with newly applicable corporate governance requirements, including requirements under the Sarbanes-Oxley Act of 2002 and other rules implemented by the Securities and Exchange Commission. We expect all of these applicable rules and regulations to significantly increase our legal and financial compliance costs and to make some activities more time consuming and costly.

Our estimates use of cash flow forecast within 12 months is outlined below:

Description	Estimated Cost
Selling and marketing expenses	$	5,000

Professional fees		65,000
General and administrative		70,000
Total	$	140,000

Professional fee - Primarily includes professional fees associated with becoming a public company as summarized as follows:

	Amount
Auditing fees	$	25,000
Legal fees		30,000
Other professional fees		10,000
Total	$	65,000

General and administrative – Over the next 12 months, we estimate that we will incur general and administrative expenses as follows:

	Amount
Administrative salaries and benefits	$	60,000
Other		10,000
Total	$	70,000

Our operating funds are not sufficient, therefore we will have to scale back our operating plans and it will be unlikely that we will be able to pursue our overall business plan without raising additional working capital.

Operating activities

For the six months ended June 30, 2013, net cash flows used in operating activities amounted to $74,444 and was primarily attributable to our net losses of $159,761 offset by the add back of non-cash items such as depreciation expense of $666, loss on disposal of property and equipment of $115 and stock based compensation and fees of $4,683, and changes in operating assets and liabilities of $79,853.

For the six months ended June 30, 2012, net cash used in operations of $435,518 was primarily attributable to our net losses of $783,420 offset by the add back of non-cash items such as depreciation expense of $673 and stock based compensation and fees of $345,007, and changes in operating assets and liabilities of $2,222.

Financing activities

For the six months ended June 30, 2013 and 2012 net cash flows provided by financing activities was $0 and $721,141, respectively. During the six months ended June 30, 2012, we received net proceeds from sale of common stock of $838,150 and proceeds from notes payable of $7,500 offset by the payments of notes payable $118,650 and the payment of insurance premium finance payable of $5,859.

Contractual Obligations

In the normal course of business, we may have certain fixed contractual obligations and commitments that include future estimated payments. Changes in our business needs, cancellation provisions, changing interest rates, and other factors may result in actual payments differing from the estimates. We cannot provide certainty regarding the timing and amounts of payments. At June 30, 2013, we did not have any material contractual obligations that would require us to pay cash in future periods.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk.

Not required for smaller reporting companies.

Item 4.

Controls and Procedures.

Evaluation of disclosure controls and procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), as of June 30, 2013. Based on this evaluation, our principal executive officer and principal financial officers have concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act are recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules.

Changes in Internal Controls

There were no changes (including corrective actions with regard to significant deficiencies or material weaknesses including a lack of segregation of duties) in our internal controls over financial reporting that occurred during the quarter ended June 30, 2013 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1.

Legal Proceedings.

We are not a party to, and none of our property is the subject of, any pending legal proceedings. To our knowledge, no governmental authority is contemplating any such proceedings.

Item 1A.

Risk Factors.

Not required to be provided by smaller reporting companies.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

These issuances were exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(2) of that Act. Each person to whom the shares were issued was an accredited investor and acquired the shares for investment and not with a view to the sale or distribution and received information concerning us, our business and our financial condition, and the stock certificates bear an investment legend. No brokerage fees were paid in connection with any of these stock issuances.

Item 3.

Defaults Upon Senior Securities.

None.

Item 4.

Mine Safety Disclosures.

Not applicable

Item 5.

Other Information.

None.

Item 6.

Exhibits.

Exhibit No.	Description

31.1*	Rule 13a-14(a)/15d-14(a) certification of Chief Executive Officer

31.2*	Rule 13a-14(a)/15d-14(a) certificate of Principal Financial Officer

32.1**

Section 1350 certification of Chief Executive Officer and Chief Financial Officer

101.INS†	XBRL Instance Document

101.SCH †	XBRL Taxonomy Schema

101.CAL †	XBRL Taxonomy Calculation Linkbase

101.DEF †	XBRL Taxonomy Definition Linkbase

101.LAB †	XBRL Taxonomy Label Linkbase

101.PRE †	XBRL Taxonomy Presentation Linkbase

* Filed herewith.

** In accordance with SEC Release 33-8238, Exhibit 32.1 and 32.2 are furnished and not filed.

† Furnished herewith. XBRL (eXtensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

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.

	FAL EXPLORATION CORP.

Date: August 9, 2013	By:	/s/ Adam Kotkin
		Adam Kotkin, Chief Executive Officer (Principal Executive Officer)

Date: August 9, 2013	By:	/s/ Adam Wasserman
		Adam Wasserman, Chief Financial Officer and Principal Financial Officer and Principal Accounting Officer