Longwen Group Corp. - Quarter Report: 2012 March (Form 10-Q)

f10q0312_paymobile.htm

United States

Securities and Exchange Commission

Washington, D.C. 20549

Form 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended: March 31, 2012 Commission file no.: 0-11596

PAY MOBILE, INC.

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(Name of Small Business Issuer in its Charter)

	Nevada	95-3506403
	(State or other jurisdiction of incorporation or organization)	(I.R.S.Employer Identification No.)

	24 Ripley Avenue, Toronto, Ontario, Canada	M63 3N9
	(Address of principal executive offices)	(Zip Code)

Issuer’s telephone number: (561) 228 - 6148

Securities registered under Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered

None	None

Securities registered under Section 12(g) of the Act:

Common Stock, $0.0001 par value per share

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(Title of class)

Indicate by Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 o No x

Indicate by check mark whether the registrant is an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer o

Accelerated filer o

Non-accelerated filer o

Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

o Yes

|x No

APPLICABLE ONLY TO CORPORATE ISSUERS:

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:

As of March 31, 2012, there were 130,514,138 shares of voting stock of the registrant issued and outstanding.

PART I

ITEM 1.

FINANCIAL STATEMENTS

INDEX TO FINANCIAL STATEMENTS

Balance Sheets	F-2

Statements of Operations	F-3

Statements of Stockholders’ Equity	F-4

Statements of Cash Flows	F-5

Notes to Financial Statements	F-6

F-1

PAY MOBILE, INC.

Balance Sheets

	UNAUDITED			AUDITED
	March 31, 2012			December 31, 2011

ASSETS
CURRENT ASSETS
Cash and equivalents	$	112,436		$	34,517
Accounts receivable		1,990			45,171
Prepaid Insurance		3,503			8,760

Total current assets		117,929			88,448

OTHER ASSETS
Deposits (Note 2)		525,750			25,750


Total Assets	$	643,679		$	114,198

LIABILITIES AND STOCKHOLDERS’ DEFICIENCY

CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	406,443		$	438,771
Short term loan payable (Note 3)		250,000			0

Total liabilities		656,443			438,771

STOCKHOLDERS’ DEFICIENCY
Preferred stock, $0.0001, authorized 50,000,000 shares, 0 issued and outstanding		0			0
Common stock $0.0001, authorized 500,000,000 shares; 130,514,138 (2011 – 129,114,138) issued and outstanding		13,051			12,911
Additional paid in capital		1,274,006			574,146

Deficit		(1,299,821	)		(911,630	)

Total stockholders’ deficiency		(12,764	)		(324,573	)

Total Liabilities and Stockholders’ Deficiency	$	643,679		$	114,198

The accompanying notes are an integral part of the financial statements

F-2

PAY MOBILE, INC.

Statements of Operations

	UNAUDITED Three Months Ended March 31,
	2012			2011

REVENUES
Card manufacturing	$	0		$	0

OPERATING EXPENSES		0			0
General and administrative		127,032			17,613
Processing fees		68,832			0
Consulting		192,327			0

Total expenses		388,191			17,613


Net loss	$	(388,191	)	$	(17,613	)

Basic net loss per weighted average share	$	(0.00	)	$	(0.00	)

Weighted average number of shares		129,580,072			94,964,138

The accompanying notes are an integral part of the financial statements

F-3

PAY MOBILE, INC.

Statements of Stockholders’ Equity

UNAUDITED

	Number of Common Shares		Common Stock		Add’tl Paid in Capital in Excess of Par		Deficit			Total Stockholders’ Equity (Deficit)

Balance March 9, 2009		126,190,138		12,619		114,838					127,457
Sale of shares		24,000		2		9,598					9,600
Net loss 2010								(139,512	)		(139,512	)
Balance December 31, 2010		126,214,138		12,621		124,436		(139,512	)		(2,455	)

Sale of shares July 21, 2011		2,500,000		250		249,750					250,000
Sale of shares Sept. 30, 2011		400,000		40		199,960					200,000
Net Loss 2011								(772,118	)		(772,118	)
Balance December 31, 2011		129,114,138		12,911		574,146		(911,630	)		(324,573	)

Sale of shares Feb.14, 2012		400,000		40		199,960					200,000
Sale of shares March 3, 2012		1,000,000		1000		499,000					500,000
Net Loss March 31, 2012								(388,191	)		(388,191	)
Balance March 31, 2012		130,514,138		13,951		1,273,106		(1,299,821	)		(12,764	)

The accompanying notes are an integral part of the financial statements

F-4

PAY MOBILE, INC.

(Statements of Cash Flows)

	UNAUDITED
	Three Months Ended March 31,
	2012			2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(388,191	)	$	(17,613	)
Adjustments to reconcile net loss to net cash used by operating activities:

Changes in operating assets and liabilities:
Decrease in prepaid expenses		(5,256	)		0
Decrease in accounts receivable		(43,181	)		0
Increase (decrease) in accounts payable and accrued liabilities		64,547			(12,087	)

Net cash used by operating activities		(372,081	)		(29,700	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Deposit held in trust for acquisition		(500,000	)		0

Net cash used in investing activities		(500,000	)		0

CASH FLOWS FROM FINANCING ACTIVITIES:
Draw on line of credit		0			40,000
Short term loan		250,000
Proceeds from issuance of common stock		700,000			0
Net cash provided by financing activities		950,000			40,000
Net increase in cash		77,919			10,300

CASH, beginning of period		34,517			1,589
CASH, end of period	$	112,436		$	11,889

The accompanying notes are an integral part of the financial statements

F-5

PAY MOBILE, INC.

Notes to Financial Statements

(1) Summary of Significant Accounting Policies

History and business description

Pay Mobile, Inc., (Paymobile or the Company), was incorporated on March 31, 1980, under the laws of the State of California as Expertelligence, Inc. On June 26, 2006, the Company reincorporated in Nevada. On March 24, 2011, the Company amended its Articles of Incorporation to change its name to Pay Mobile, Inc.

On March 24, 2011, the Company entered into a Share Exchange Agreement (the Agreement) with Paymobile, Inc., a Delaware corporation and its shareholders pursuant to which the company issued 80,000,000 shares of its restricted common stock in exchange for 100% of the issued and outstanding shares of Pay Mobile, Inc., a Delaware corporation. In addition, at closing, two shareholders agreed to cancel 50,000,000 shares owned by them and the Company agreed to change the name to Pay Mobile, Inc. The Company also forward split the Company’s common stock 2-1.The transaction closed on May 16, 2011.

Pay Mobile, Inc. was incorporated on March 9, 2009 in the State of Delaware as Bluufish Networks Inc. and changed its name to Pay Mobile, Inc. on February 24, 2011. During the fourth quarter of 2011 Paymobile began commercial sales of its products and service and is a no longer considered a development stage company as defined by current authoritative literature. The Company sells products and services related to reloadable VISA cards, (“Cards”) and all business activities ancillary or related thereto.

In October, the Company approved a 1 for 2 reverse share split effectively cancelling the forward 2 for 1 split previously completed in May 2011. On March 31, 2012 the Company had 130,514,138 common shares outstanding.

Basis of Consolidation

These consolidated financial statements include the accounts of Paymobile its wholly-owned subsidiary, Paymobile Inc. (Canada), which was incorporated in Ontario, Canada on January 18, 2010. On January 19, 2010, Paymobile purchased Paymobile Inc. (Canada). This transaction has been accounted for as a transaction between entities under common control in accordance with authoritative guidance issued by the Financial Accounting Standards Board. Accordingly, the net assets were recognized in the consolidated financial statements at their carrying amounts in the accounts of Paymobile Inc. (Canada) at the transfer date and the results of operations of Paymobile Inc. (Canada) are included as though the transaction had occurred at the beginning of the period.

Accounting Estimates

The preparation of the financial statements in conformity with generally accepted accounting principles 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. Actual results could differ from those estimates.

F-6

Cash and Cash Equivalents

The Company considers all highly liquid instruments with an original maturity or remaining maturity at the date of purchase of three months or less to be cash equivalents. The Company maintains cash balances at various financial institutions in Canada. Accounts at each institution are insured by the Canada Deposit Insurance Corporation up to $100,000. The Company's accounts at these institutions may, at times, exceed the insured limits. The Company has not experienced any losses in such accounts.

Property and Equipment

Property and equipment are stated at cost less accumulated amortization. Amortization is calculated on a straight-line basis over the expected useful life as follows:

Computer equipment	3 years
Office furniture and equipment	5 years
Leasehold improvements	term of the lease

Repairs and maintenance expenditures are charged to operating expense as incurred. Replacements and major renewals are capitalized.

Accounting for the Impairment or Disposal of Long-Lived Assets

Long-lived assets are reviewed for impairment when circumstances indicate the carrying value of the asset may not be recoverable. For assets that are to be held and used, impairment is recognized when the estimated undiscounted cash flows associated with the asset, or group of assets, is less than their carrying value. If impairment exists, an adjustment is made to write the asset down to its fair value, and a loss is recorded as the difference between the carrying value and the fair value. Fair values are determined based on quoted market values, discounted cash flows, or internal and external appraisals, as applicable. Assets to be disposed of are carried at the lower of carrying value or estimated net realizable value.

Revenue Recognition

Revenue is recognized when it is realized or realizable and earned. Revenue is realized or realizable when there is persuasive evidence of an arrangement, prices are fixed or determinable, services or products are provided to the customer, and collectability is probable and reasonably assured depending upon the applicable revenue recognition guidance followed. The following are specific revenue recognition policies:

Paymobile will enter into contracts with customers to provide reloadable Cards. Upon delivery of the Cards to the Customer for transfer of value to the Cards, Paymobile will invoice for the service fee.

Fees and service revenues include card set up fees, transaction fees, service fees, and fees for processing transactions and are recognized at the point of sale.

Revenue from the customization of software as required under a sales contract is recognized on the percentage of completion method of accounting, based on the ratio of costs incurred to estimated costs to complete.

Foreign Currency Translation

The Company’s functional and reporting currency is the United States Dollar. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Revenue and expense accounts are translated at average exchange rates during the period. Equity accounts are translated using historical exchange rates. Gains and losses arising on settlement of foreign currency denominated transactions or balances are included in the determination of income. Foreign currency transactions are primarily undertaken in Canadian dollars. The Company has not, to the date of these financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

F-7

Income Taxes

Income tax expense is based on pre-tax financial accounting income. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit carry-forwards, and liabilities are measured using enacted tax rates expected to apply to taxable income in the years 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 income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. The components of the deferred tax assets and liabilities are individually classified as current and non-current based on their characteristics. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Basic and Diluted Net (Loss) Per Common Share (“EPS”)

Basic net (loss) per share is computed by dividing the net loss attributable to the common stockholders by the weighted average number of common shares outstanding during the reporting period. Diluted net income per common share includes the potential dilution that could occur upon exercise of warrants or conversion of debt to acquire common stock. The computation of Diluted EPS does not assume exercise or conversion of securities that would have an anti-dilutive effect on net income per common share.

Fair Value of Financial Instruments

The Company’s financial instruments include cash and accrued liabilities. The fair value of these financial instruments approximates their carrying values due to their short maturities.

Stock-Based Compensation

The Company records expense for stock-based compensation to directors, employees, and consultants using the fair value method. Occasionally, the Company may issue shares of stock and stock warrants in exchange for services. The Company values the issuance of shares based on the fair value of its stock on the date of issuance. The Company values the warrants it issues using the Black-Scholes model.

(2) Deposits:

The Company maintains a $25,750 deposit with the financial Institution that issues the VISA Cards used by its customers.

(3) Short Term Loan Payable:

The Company borrowed $250,000 from a non-related individual in March. The loan was non-interest bearing and was repaid In May 2012.

(4) Stockholders Equity:

On September 23, 2011 the Company filed Amended Articles of Incorporation to increase its authorized Common Stock, par value $0.0001 from 300,000,000 shares to 500,000,000 shares and to increase its authorized Preferred Stock, par value $0.0001 from 25,000,000 shares to 50,000,000 shares.

In February of 2012, the Company issued 400,000 shares for $200,000. In March of 2012, the Company issued 1,000,000 shares for $500,000.

F-8

(5) Going Concern:

The financial statements have been prepared assuming that the Company will continue as a going concern. The Company’s’ financial position and operating results raise substantial doubt about the Company’s’ ability to continue as a going concern, as reflected by the Company’s Stockholders’ Deficiency of $12,764 at March 31, 2012. The ability of the Company to continue as a going concern is dependent upon commencing operations, developing sales and obtaining additional capital and financing. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The Company is currently seeking additional capital to allow it to begin its planned operations.

(6) Commitments:

The Company is obligated under contract to pay a Credit Union a monthly fee to allow the customers of Paymobile Inc. to have access to reloadable cards. The Credit Union is entitled to share in fees charged to merchants for use of the cards. In addition the Credit Union earns interest income on the unspent balance on the cards. The minimum payments due are as follows:

2012 - $ 189,000

2013 - $ 252,000

2014 - $ 63,000

Total $ 504,000

(7) Subsequent Events:

Management has evaluated events occurring after the date of these financial statements through the date that these financial statements were issued, and other than discussed below, there were no material subsequent events as of that date.

The Company completed convertible debt financings of $1,225,000 from accredited investors in May 2012.

On March 12, 2012 the Company signed a letter of intent to enter into an exclusive technology license agreement for a complimentary business. The terms of the letter of intent required Paymobile to put a refundable deposit of $500,000 in trust. The transaction closed on May 3, 2012 and Paymobile paid a further $500,000 and is obligated to pay a further $1,000,000 90 days from closing.

F-9

ITEM 2.

MANAGEMENTS DISCUSSION AND ANALYSIS OF PLAN OF OPERATION

DESCRIPTION OF BUSINESS

Introduction

Paymobile is in the business of providing truly integrated payment solutions for consumers and corporate clients by incorporating its proprietary mobile payment technology with the issuance of open-loop prepaid Visa cards.

Many payment platforms in the market today fail to deliver a satisfactory customer experience. Paymobile differs from these online and legacy platforms in that customers enjoy instant access to their funds after receiving social payments, deposits or remittances to their account. Cardholders will be able to make purchases online or anywhere Visa is accepted worldwide in addition to being able to withdraw cash from any ATM.

Paymobile’s primary focus will be on providing end-to-end payment solutions targeting multiple sales verticals including government disbursements, payroll, corporate incentives, gift, and consumer spend, social payments, remittance and more. Open-loop stored-value cards offer significant benefits to consumers and corporations alike and, when integrated with mobile technologies, can become a powerful financial tool.

Paymobile’s mobile technology will allow customers to download a Paymobile app for their Smartphone or use SMS messaging to perform functions such as viewing their account balance and transaction history, sending and receiving fund transfers in real-time and more. Phase two of our mobile solution will be the launch of the Paymobile ‘PayKEY’. PayKEY will simplify online and mobile purchases by linking the cardholder’s mobile phone to their Paymobile open-loop card account which allows for the instant, secure completion of the merchant checkout process.

Paymobile’s integrated money-transfer feature will allow cardholders to transfer funds over their mobile device to another cardholder anywhere in the world in real-time over the Visa Money Transfer platform. Immigrants can send money back home to their families faster, more inexpensively, and more securely than previously possible.

Paymobile also plans to partner with existing retail distribution channels and reload networks to facilitate real-time cash reloads to the customer’s account.

Paymobile generates revenues from the following sources among others:

	Card sales and activation fees
	Reload fees

	Private brand and co-brand fees
	Program setup fees

	Float interest
	Interchange

	Transaction fees
	ATM fees

	Monthly card fees
	Data mining fees

	Money transfer fees

Our marketing plan in year one will focus on supporting the rollout of Paymobile card programs across multiple market segments by leveraging existing relationships.

Corporate Development

Reverse Acquisition of Paymobile

On May 15, 2011, we completed a reverse acquisition transaction through a share exchange with whereby we acquired all of the issued and outstanding shares of common stock of Paymobile, Inc. Delaware in exchange for 80,000,000 shares of our common stock, par value $0.0001 per share. Contemporaneous with this transaction, our past President and National Business Investors each agreed to collectively cancel 50,000,000 shares of our common stock. Subsequent to the transactions described herein, the Company had a total of 126,214,138 shares of common stock issued and outstanding and Paymobile's former shareholders became the majority shareholders of the Company, holding shares which constituted approximately 63.4% of the then issued and outstanding shares. As a result of the reverse acquisition, Paymobile, Inc. became our wholly owned subsidiary and its stockholders became our controlling stockholders. The share exchange transaction with Paymobile was treated as a reverse acquisition, with Paymobile as the accounting acquirer and the Company as the legal survivor. Unless the context suggests otherwise, when we refer in this report to business and financial information for periods prior to the consummation of the reverse acquisition, we are referring to the business and financial information of Paymobile.

Also upon the closing of the reverse acquisition of Paymobile, the board of directors increased its size from one (1) to two (2) members and Mr. Gino Porco and Mr. Peter Strang were appointed to fill the vacancies created by the resignation of Mr. Terreforte and such increase. In addition, the board of directors appointed Mr. Porco to serve as our President, Chief Executive Officer and as our Chief Financial Officer.

As a result of our acquisition of Paymobile, Paymobile Inc. became our wholly owned subsidiary and we have assumed the business and operations of Paymobile.

Current Status of our Business

As of the date of this Report, the Company has signed contracts with two customers for the deployment of prepaid VISA cards. The Company has also been named as a Program Manager with an affiliated company to issue reloadable cards for a municipal city.

During the next twelve months, we intend to focus our efforts on launching our existing customers and acquiring new customers. We will have to concentrate further efforts on raising capital to support our new deployment as well and development plans. We expect the sales cycle with customer to take approximately six months, covering the period from initiation of our sales solicitation through technical demonstrations, testing, negotiations and closing of contracts to successful launch of Cards. We will continue our sales and marketing program.

Comparison of Operating Results for the Three Months Ended March 31, 2012 to the Three Months Ended March 31, 2011

Revenues

The Company did not generate any revenue from operations for the three months ended March 31, 2012 or 2011.

Operating Expenses

Operating expenses were $388,191 for the three months ended March 31 2012 and mainly consisted of fees paid to Consultants in the amount of $192,327 and Processing fees of $68,834. General and administrative expenses totaled $127,032 and included system development expenses of $37,400, computer software expenses of $19,782, telephone expenses were $10,518 and legal expenses were $10,696. Operating expenses for the three months ended March 31, 2011 were $17,613 and included legal fees of $8,980 general and administrative of 7,411 and interest expense of $1,222.

Net Loss

Our net loss was $388,191 for the three months ended March 31 2012 compared to a net loss of $17,613 for the three months ended March 31, 2011.

At March 31 2012, our accumulated deficit was $1,299,821.

Assets and Liabilities

Our total assets were $643,679 at March 31 2012, consisting of $112,436 in cash, a security deposit of $25,750, prepaid insurance of $3,503, receivables of $1,990. The Company also had a $500,000 deposit to purchase the assets of a complimentary business. The terms of the letter of intent required Paymobile to put a refundable deposit of $500,000 in trust. The transaction closed on May 3, 2012

Total Current Liabilities are $656,443 at March 31 2012. Our accounts payable total $406,443 and the company borrowed $250,000.

Financial Condition, Liquidity and Capital Resources

At March 31 2012, we had cash of $112,436. Our working capital is not sufficient to fund the business plan of the Company. There can be no assurance that our financial condition will improve. We have not generated cash flows from operations. Consequently, we have been dependent upon our financing efforts and our line of credit to fund our cash requirements. We have raised $700,000 through sales of Common stock during the quarter ended March 31,2012 and a further $1,225,000 of Convertible debt financing in May 2012.

As of March 31 2012, we had a working capital deficit of $538,514.

No trends have been identified which would materially increase or decrease our results of operations or liquidity.

Plan of Operation

On March 24, 2011, we entered into a Stock Exchange Agreement (the “Agreement”), with the Company as the Issuer, and Paymobile, Inc., a Delaware corporation (“Paymobile Delaware”) and its shareholders. The material terms of the Agreement provided that the Paymobile Delaware shareholders would be issued a total of 80,000,000 shares of common Stock of the Issuer and simultaneously therewith, the Issuer’s past President and National Business Investors have agreed to collectively return to treasury and cancel 50,000,000 of their shares of Common Stock. In connection with the consummation of the Agreement, Francisco Terreforte resigned as sole officer and director of the Company and Gino Porco was appointed as a Director, President, CEO and CFO of the Company and Peter Strang was appointed as a Director of the Company. We completed the Agreement on May 16, 2011. We are currently developing our technology and pursuing a number of revenue opportunities. We recognized our first revenue in the fourth quarter of 2011 from our first corporate customer and have signed two additional corporate customers. On March 12, 2012 the Company signed a letter of intent to purchase the assets of a complimentary business. The terms of the letter of intent required Paymobile to put a refundable deposit of $500,000 in trust. The transaction closed on May 3, 2012 and Paymobile paid a further $500,000 and is obligated to pay a further $1,000,000 90 days from closing. We intend on fully integrating the purchase within 90 days as well as raising additional financing of $2,000,000.

Item 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is not subject to any specific market risk other than that encountered by any other public company related to being publicly traded.

Forward-Looking Statements

This Form 10-Q includes Aforward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included or incorporated by reference in this Form 10-Q which address activities, events or developments which the Company expects or anticipates will or may occur in the future, including such things as future capital expenditures (including the amount and nature thereof), finding suitable merger or acquisition candidates, expansion and growth of the Company’s business and operations, and other such matters are forward-looking statements. These statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments as well as other factors it believes are appropriate in the circumstances. However, whether actual results or developments will conform with the Company’s expectations and predictions is subject to a number of risks and uncertainties, general economic market and business conditions; the business opportunities (or lack thereof) that may be presented to and pursued by the Company; changes in laws or regulation; and other factors, most of which are beyond the control of the Company. Consequently, all of the forward-looking statements made in this Form 10-Q are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequence to or effects on the Company or its business or operations. The Company assumes no obligations to update any such forward-looking statements.

ITEM 4.

CONTROLS AND PROCEDURES

As required by Rule 13a-15 under the Exchange Act, within the 90 days prior to the filing date of this report, the Company carried out an evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of the Company's management, including the Company's President, Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, the Company's President, Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective. There have been no significant changes in the Company's internal controls or in other factors, which could significantly affect internal controls subsequent to the date the Company carried out its evaluation.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in Company reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in Company reports filed under the Exchange Act is accumulated and communicated to management, including the Company's Chief Executive Officer and Chief Financial Officer as appropriate, to allow timely decisions regarding required disclosure.

PART II - OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS.

The Company knows of no legal proceedings to which it is a party or to which any of its property is the subject which are pending, threatened or contemplated or any unsatisfied judgments against the Company.

ITEM 2.

Unregistered Sales of Equity Securities and Use of Proceeds

As previously reported in our 8-K’s, in February 2012, the Company issued 400,000 shares of restricted common stock for $200,000. In March 2011, the Company issued 1,000,000 shares of restricted common stock for $500,000.

ITEM 3.

DEFAULTS IN SENIOR SECURITIES

None

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

No matter was submitted during the quarter ending March 31, 2012, covered by this report, to a vote of the Company's shareholders, through the solicitation of proxies or otherwise.

ITEM 5.

OTHER INFORMATION

None

ITEM 6.

EXHIBITS

(a) The exhibits required to be filed herewith by Item 601 of Regulation S-K, as described in the following index of exhibits, are incorporated herein by reference, as follows:

Exhibit No. Description

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31.1 * Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002.

32.1 * Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002.

* Filed herewith

SIGNATURES

In accord with Section 13 or 15(d) of the Securities Act of 1933, as amended, the Company caused this report to be signed on its behalf by the undersigned, thereto duly authorized.

May 10, 2012

By:

PAY MOBILE, INC.

/s/ Gino Porco

---------------------------

Gino Porco

Chief Executive Officer,

Chief Financial Officer