MobiVentures Inc. - Quarter Report: 2008 March (Form 10-Q)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[X]  Quarterly Report Under Section 13 or 15(D) of the Securities Exchange Act of 1934

for the quarterly period ended March 31, 2008

[   ] Transition Report Under Section 13 or 15(D) of the Securities Exchange Act of 1934

for the transition period from _____ to  _____

Commission File Number: 000-51855

MOBIVENTURES INC.
(Name of small business issuer in its charter)

Indicate by check mark whether the registrant (1) has 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 [X]   No [   ]

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,” “non-
accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

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

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable
date. 175,846,332 shares of common stock as of May 13, 2008.

MOBIVENTURES INC.

Quarterly Report On Form 10-Q
For The Quarterly Period Ended
March 31, 2008

INDEX

FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q contains forward-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 (the “Exchange Act”). These forward-looking statements involve risks and uncertainties, including statements regarding our capital needs, business plans and expectations. Such forward-looking statements involve risks and uncertainties regarding our ability to achieve commercial levels of sales of our products, our ability to successfully market our products, our ability to continue development and upgrades to the our software and technology, availability of funds, government regulations, common share prices, operating costs, capital costs and other factors. Forward-looking statements are made, without limitation, in relation to our operating plans, our liquidity and financial condition, availability of funds, operating costs and the markets in which we compete. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential” or “continue”, the negative of such terms or other comparable terminology. Actual events or results may differ materially. In evaluating these statements, you should consider various factors, including the risks outlined below, and, from time to time, in other reports we file with the SEC. These factors may cause our actual results to differ materially from any forward-looking statement. We disclaim any obligation to publicly update these statements, or disclose any difference between our actual results and those reflected in these statements. The information constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

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PART I – FINANCIAL INFORMATION

Item 1.        Financial Statements

The following unaudited condensed consolidated interim financial statements of MobiVentures Inc. (the “Company”) are included in this Quarterly Report on Form 10-Q:

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MOBIVENTURES INC.

(Formerly Mobilemail (US) Inc.)

(A Development Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2008

(Unaudited)

Contingency (Note 1)
Commitments (Notes 2, 4, 5 and 9)
Subsequent Events (Note 10)

- See Accompanying Notes -

- See Accompanying Notes -

- See Accompanying Notes -

Supplemental cash flow information (Note 8)

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The purchase price was allocated to M2M’s assets acquired and liabilities assumed based upon their respective fair values at the date of acquisition. The remaining unallocated acquisition cost resulted in excess of assets over liabilities and was allocated to the investments. The allocation took into consideration intangible assets and pre-acquisition contingencies acquired at closing. Estimated direct transaction costs of $121,208 were accrued by the Company in relation to investment banking fees, legal, consulting, accounting, regulatory fees and taxes and other miscellaneous direct costs associated with the acquisition. In addition, a stamp duty of $21,000 was accrued based on the purchase price. Investments of $ 4,555,000 are valued using an average of a discounted cash flow method and an equity valuation method which is assumed to represent the fair value of the investments. The amount attributed to investments is based on an independent third party valuation.

M2M is a UK-based consulting business that specializes in assisting businesses and entrepreneurs to develop wireless applications for their existing or proposed business applications. M2M provides management services, including product management, financial, commercial and other support to selected start-up and early stage ventures in the wireless and mobile space industry.

Equity to be paid in 5 year warrants. Warrant pricing will be at a 15% discount to the 10 day average market price at closing of the Company’s common stock on the date of completion of such acquisition or sale.

Item 2.        Management’s Discussion and Analysis or Plan of Operation.

The following discussion of our financial condition, changes in financial condition and results of operations for the six month period ended March 31, 2008 should be read in conjunction with our unaudited consolidated interim financial statements and related notes for the six month period ended March 31, 2008 through which we carry out our business.

Overview

MobiVentures Inc. (“we”, “us”, “our” or the “Company”) is engaged in the business of providing multi-media mobile content, applications and services. We are presently the owner of four wholly-owned subsidiaries through which we carry out our business:

• Mobiventures Limited (formerly “Mobilemail Limited”), a United Kingdom company (“Mobilemail UK”), acquired on August 31, 2005,

• Oy Tracebit AB, a Finnish company (“Tracebit”), acquired on February 6, 2007,

• Move2Mobile Limited, a United Kingdom company (“M2M”), acquired on March 31, 2008, and

• Purepromoter Ltd., a United Kingdom company (“Purepromoter”), acquired on April 28, 2008.

We were originally engaged in the business of commercializing our MobileMail software. In 2007, we identified an opportunity to grow through the strategic consolidation of fast growing companies operating within the mobile content and service industry. In line with this strategy, we acquired Tracebit, a Finnish mobile games and content company, and held discussions with a number of other companies as acquisition targets in the U.S., Europe and South East Asia.

Subsequent to the acquisition of Tracebit, we have acquired M2M and Purepromoter. These acquisitions have been completed as part of our business strategy to develop our existing business through acquisitions and internal growth in order to become an established provider of leading edge multi-media mobile content, applications and services with clients across the United Kingdom, Europe, Asia and North America.

We believe we have assembled a strong management team both through the acquisition of Tracebit, M2M and Purepromoter and by engaging with seasoned executives from the mobile industry who have a proven track record in creating sustainable and profitable ventures within the mobile sector, both in Europe and the U.S.

We are also the owner of a suite of software applications that we refer to as the MobileMail software which provide a platform for enabling users to send Short Message Service (“SMS”) messaging traffic to wireless devices using the Internet and to, in turn, receive SMS messages from wireless devices through the Internet. The SMS short message service refers to an industry adopted standard for sending and receiving text messages to and from mobile telephones. Our MobileMail messaging solutions allow network operators and enterprises to offer their customers SMS messaging on their Internet home pages and the ability to send SMS messages from their personal computers.

Our Corporate Organization

We were incorporated on April 1, 2005 under the laws of the State of Nevada. We carry out our business operations through our wholly owned subsidiaries, Mobilemail UK, Tracebit, M2M and Purepromoter.

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MobileMail UK, M2M and Purepromoter are each incorporated and headquartered in the United Kingdom. Tracebit is incorporated and headquartered in Finland. Our principal office is located at Sunnyside, Brinkworth, Chippenham, Wiltshire, England SN15 5BY. Our telephone number is +44 (0)7740 611413 and our fax number is +44 (0) 845 2 99 1729.

Effective July 30, 2007, we increased our authorized capital from 100,000,000 shares to 300,000,000 shares with a par value of $0.001 per share. Effective August 2, 2007, we completed a change of our corporate name from “Mobilemail (US) Inc.” to “MobiVentures Inc.”.

Acquisitions

Acquisition of OY Tracebit AB

On February 6, 2007, we completed the acquisition (the “Tracebit Acquisition”) of all of the issued and outstanding shares in the capital of Tracebit pursuant to an Equity Share Purchase Agreement dated January 31, 2007 among the Company and Capella Capital OU, Pollux OU and Tracebit Holding OY (collectively, the “Vendors”) and Tracebit in consideration for the issuance of an aggregate of 8,224,650 shares of our common stock to the Vendors.

Tracebit was incorporated under the laws of Finland in October 1996. Initially, the core business of Tracebit was IT consulting. However, in 2001, Tracebit divested its IT consulting business and entered the mobile sector, first by selling ring tone and logo editor products created by it and later the same year focusing on emerging J2ME mobile games market.

Tracebit has developed more than 30 original games and applications for mobile phones and simultaneously created a global network of customers consisting of over 150 agreements including sales channels with global mobile carriers, service providers and content distributors, ensuring delivery to a global audience. Tracebit licenses well-known brands to attach to the products it makes in order to differentiate from other products in the marketplace.

We appointed three new directors to our board of directors upon the completion of the Tracebit Acquisition, each of whom was a principal shareholder of Tracebit. The business of Tracebit has been our primary business subsequent to the completion of the Acquisition.

Acquisition of Move2Mobile Limited

On March 31, 2008, we completed the acquisition (the “M2M Acquisition”) 100% of the share capital of M2M comprising of 16809 Ordinary Shares, with a par value of £0.01 per share (the “M2M Shares”), in consideration for a purchase price of $4,200,000 (the “Purchase Price”) pursuant to an equity share purchase agreement dated March 14, 2008 with the shareholders of M2M (the “M2M Shareholders”). Upon completion of the M2M Acquisition, we have appointed Danny Wootton, a director of M2M, as a member of our board of directors. Further details of this transaction are as set forth in our current reports on Form 8-K filed with the SEC on March 20, 2008 and April 4, 2008.

M2M was incorporated in October 2002 and has operated as a virtual company based in the UK. M2M was established as a consulting and management company to identify, invest in, and, accelerate start-up and early stage businesses in the wireless and mobile related industries. M2M provides management, financial, commercial and other support to selected start-up and early stage ventures in the wireless and mobile space. Management believes that M2M is well positioned to capitalize on its niche position as an accelerator for early stage wireless and mobile related companies.

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M2M has a strong and entrepreneurial management team with proven technological, commercial and financial skills and experience in a wide range of industries, but in particular in the telecommunications and wireless related sectors – the companies within M2M’s portfolio operate in mobile entertainment; mobile applications; telematics; and wireless platforms. To date, M2M has worked with over 150 companies/entrepreneurs since it was founded and is currently continuing to work with many of those.

M2M has generated or is generating investments in 11 privately held start up companies through the supply of services in exchange for equity in these companies. These equities range from 0.5% to 20% of the start up company.

Acquisition of Purepromoters Ltd.

On April 28, 2008, we completed the acquisition (the “Purepromoter Acquisition”) of all of the issued share capital of Purepromoter Ltd. (“Purepromoter”), comprised of 100 A Ordinary Shares at £1.00 per share and 365 B Ordinary Shares at £1.00 per share, pursuant to the terms of a share purchase agreement dated April 4, 2008 between our company and the shareholders of Purepromoter. The completion of the Purepromoter Acquisition is a condition to the completion of a $2,000,000 convertible debenture financing with Trafalgar Capital Specialized Investment Fund, Luxembourg. Upon completion of the Purepromoter Acquisition, we appointed Stuart Hobbs, a director and principal shareholder of Purepromoter, as a member of our board of directors. Further details of this transaction are as set forth in our current reports on Form 8-K filed with the SEC on April 4, 2008 and May 2, 2008.

Purepromoter provides comprehensive software solutions and associated services to companies looking to maximise the benefits of using electronic forms of direct communication for sales, marketing and information broadcasts purposes. Electronic forms of communication, which include Email, Electronic Brochures, Mobile Text Messaging (SMS) and Mobile Picture Messaging (MMS), offer cost savings over traditional paper based alternatives. The core component of Purepromoter’s e-marketing solutions is a software application which has been developed and is wholly owned by Purepromoter and forms the intellectual property of the company. To date, Purepromoter has focused on the software and support for Email and Electronic Brochures which provides approximately 95% of its revenues, compared to the emerging market of mobile text messaging which accounts for only approximately 5% of its revenues.

Purepromoter was founded in 2002 and currently operates from leased office accommodation in Brighton UK. Purepromoter employs 37 people, all of whom are situated in Brighton. Purepromoter has a client base of around 800 customers as at March 2008 which has grown from around 400 since December 2006

Trafalgar Capital Specialized Investment Fund, Luxembourg - Debenture Financing

On April 28, 2008, concurrent with the completion of the Purepromoter Acquisition, we completed $2,000,000 of secured convertible redeemable debentures (the “Debentures”) for a total purchase price of $2,000,000 (the “Purchase Price”) from Trafalgar Capital Specialized Investment Fund, Luxembourg (“Trafalgar”) pursuant to a Securities Purchase Agreement between the Company and Trafalgar dated March 31,2008. Pursuant to the Securities Purchase Agreement, the Purchase Price was used by the Company to acquire Purepromoter Ltd. as outlined above. The Debentures were issued by the Company to Trafalgar in reliance upon an exemption from securities registration pursuant to Section 4(2) and/or Rule 506 of Regulation D of the Act. The Debentures mature on March 31, 2010 and if we default on our mandatory redemption obligation under the Debentures, Trafalgar will have the right to convert the Debentures into shares of our common stock at a conversion price equal to 85% of the market price at the time of conversion. Further details of this transaction are as set forth in our current reports on Form 8-K filed with the SEC on April 4, 2008 and May 2, 2008.

Froggie S.L. and Norris Marketing S.L.

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Partnership Agreement

We entered into a partnership agreement with Froggie S.L. (“Froggie”) and Move2Mobile Limited (“M2M”) on October 31, 2007. The partnership agreement contemplates the creation of a business to be operated in partnership between us and Froggie pursuant to which the net income derived from the business will be split equally between us and Froggie on a 50/50 basis. In addition, Froggie has agreed to provide “bridge financing” to us to an agreed maximum of 120,000 Euros. To date, Froggie has supplied “bridge financing” of 30,000 Euros and Mobiventures has no expectation of any further investment from Froggie.

The acquisition of M2M by Mobiventures will not affect the partnership between Mobiventures (now including M2M) and Froggie.

Letter of Intent

The execution of the partnership agreement follows the execution of a letter of intent with Froggie, Norris Marketing S.L. (“Norris”) and Tom Horsey dated July 17, 2007 and a further letter of intent between us and M2M, Nigel Nicholas and Danny Wootton dated August 13, 2007.

Froggie is a provider of mobile telephony marketing systems with operations in Argentina and Spain. Norris is a company incorporated in the BVI which provides premium SMS and bulk SMS solutions into Spain. Tom Horsey is the principal shareholder of Froggie and Norris. The letter of intent contemplates the Company’s acquisition of up to 100% of the shares of Froggie and Norris from Tom Horsey. To date, no definitive agreement has been executed for the acquisition contemplated in the letter of intent. The parties have entered into the partnership agreement pending the continuation of negotiations on a definitive acquisition agreement. There is no assurance that any definitive agreement for the acquisition by us of an interest in Froggie or Norris will be executed.

Planned Business

Under the partnership agreement, we, Froggie and M2M have agreed to actively work together to grow our current mobile phone applications business that provides content, applications and services to customers via their mobile phones.

The objective of the parties is to generate revenues using content and services through the live channels that each party has generated. We, Froggie and M2M have agreed on a management team that will be devoted to the launching of the business.

Bridge Financing

Froggie has provided us with 120,000 Euros of bridge financing, which loan has been converted into 1,367,412 shares of our common stock based on a conversion price of $0.032174 per share. No further bridge financing is expected from Froggie under this agreement.

Plan of Operations

Our plan of operations for each of our operating subsidiaries for the next twelve months is outlined below. We will require additional financing in order to implement these plans of operations, as more fully discussed below under “Liquidity and Capital Resources – Plan of Operations”.

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Plan of Operations for Mobiventures Group

Below is a table that lists the progress that we have recently made against the targets that we have previously disclosed for the period up to 31st March 2008. This demonstrates that to the date of the publication of this Form 10-Q quarterly report, we have made significant progress on all targets other than the acquisition of Froggie and Norris.

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Mobiventures plan of operations for the next twelve months is outlined below as a group and further below we identify the specific targets for the subsidiary companies. We will require additional financing in order to implement these plans of operations, as more fully discussed below under “Liquidity and Capital Resources – Plan of Operations”.

Phase I – until Q4 2007/2008

• identify and complete further acquisition targets within the mobile community;

• develop relationships and partnerships either directly or indirectly with at least two advertising/marketing agencies for delivery of mobile applications – receive briefs for mobile advertising or marketing campaigns from these partnerships

• initiate online and mobile marketing campaigns through affiliate marketing agencies and pay per click campaigns; online search engines to increase traffic to and the user base of the portal;

• begin the integration of acquired companies into the Mobiventures Group without negatively impacting on the successful stand alone companies that have been/will be acquired

• fund raise to support further growth;

• update and distribute marketing material to reflect additional product offerings to support sales efforts.

Phase II – 2008/2009

• complete the integration of already acquired companies to further increase the EBITDA of the group by synergistic and complementary offerings to existing customers within the group

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• establish an operational centre in the United States and expand the South American offices acquired through the Froggie acquisition, if completed;

• expand into North America by signing up partnership deals with US and Canadian based mobile service providers to capture opportunities in the growing mobile content market in US and Canada;

• establish an operational centre in Asia and expand the existing European sales offices;

• achieve full operation of and revenue generation from North American and Asian sales offices;

• complete full launch of branded multimedia content and messaging portal in Europe;

• sign further contracts with a number of large media agencies to source advertising inventory;

• complete a new multi-interaction mobile application, to attract new users as this application enhances the product offering of the portal.

Plan of Operations for Tracebit

Our objectives for Tracebit is focused on:

• the pursuit of complimentary technologies and additional mobile content to sell through our sales channels; and

• the creation of an aggregated content provision service managed through an interactive community based web-portal through the pursuit of a number of acquisitions of established mobile service providers to add to our portfolio of mobile applications.

Plan of Operations for M2M

Our objectives for M2M are to build value for shareholders through its integrated business model combining its revenue-earning consulting and management business with its capital-growth venture management business. As part of this business strategy, our plan of operations for M2M includes the following elements subject to our achieving the necessary financing:

• M2M will continue to develop the companies in which it has equity positions sometimes increasing its investment in that company through the provision of services in exchange for further shares.

• M2M will identify, and subject to the approval of our directors, those companies in which it will plan to exit and realise the value for its shareholdings in the years 2009 and 2010. It will put detailed plans of action into effect together with the management of the incubate company in order to deliver on each of these goals.

• M2M will seek further companies that require the services that M2M provides and will seek to take equity positions in those companies in exchange for the services provided.

• We will identify and request M2M to nurture those companies in which M2M has or will obtain investments in the next 12 months in order to potentially fully acquire those companies at a later date.

Plan of Operations for Purepromoter

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Our plan of operations for Purepromoter is to build value for shareholders through continuing to expand its operational base and hence its revenue growth and earnings. In that regard, our plans for Purepromoter include the following subject to our achieving the necessary financing:

• Increase its sales staff to 20 people by March 2009, with the objective of increasing revenues and earnings.

• Begin to offer the Mobiventure’s applications to existing major account and marketing agencies customers in addition to the Purepromoter email messaging software, with the objective of increasing the revenue generated from each of these customers.

• Begin to market Purepromoter services through Mobiventure’s existing channels, with the objective of developing Purepromoter’s business outside the UK.

Plan of Operations for MobileMail

The MobileMail SMS messaging technology is no longer the core product in relation to our current and future operational plans. As such, we do not envisage proceeding with any further developments of the messaging technology. Support will continue to current customers but no resources will be allocated to extend the sales and marketing of the current SMS messaging platform.

Presentation of Financial Information

Effective August 31, 2005, we acquired 100% of the issued and outstanding shares of MobileMail UK by issuing 12,000,000 shares of our common stock. Notwithstanding its legal form, our acquisition of MobileMail UK has been accounted for as a reverse take-over, since the acquisition resulted in the former shareholders of MobileMail UK owning the majority of our issued and outstanding shares. Because Maxtor Holdings Inc. (now MobiVentures Inc.) was a newly incorporated company with nominal net non-monetary assets, the acquisition has been accounted for as an issuance of stock by MobileMail UK accompanied by a recapitalization. Under the rules governing reverse takeover accounting, the results of operations of MobiVentures Inc. are included in our consolidated financial statements effective August 31, 2005. Our date of inception is the date of inception of MobileMail UK, being August 21, 2003, and our financial statements are presented with reference to the date of inception of MobileMail UK. Financial information relating to periods prior to August 31, 2005 is that of MobileMail UK.

On February 6, 2007, we completed the acquisition of Tracebit. Our financial statements for the year ended September 30, 2007 include the results of operations of Tracebit from February 6, 2007 to September 30, 2007.

On March 31, 2008, we completed the acquisition of M2M. Our financial statements for the six months ended March 31, 2008 consolidate the results of operations of M2M effective March 31, 2008.

On April 28, 2008, we complete the acquisition of Purepromotor. Our financial statements for the six months ended March 31, 2008 do not include the results of operations of Purepromoter for any period.

Critical Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to make certain estimates and assumptions that affect the reported amounts and timing of revenues and expenses, the reported amounts and classification of assets and liabilities, and disclosure of contingent assets and

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liabilities. The Company’s actual results could vary materially from management’s estimates and assumptions.

Revenue Recognition

Revenues are recognized when all of the following criteria have been met: persuasive evidence for an arrangement exists; delivery has occurred; the fee is fixed or determinable; and collection is reasonably assured. Revenue derived from the sale of services is initially recorded as deferred revenue on the balance sheet. The amount is recognized as income over the term of the contract.

Revenue from time and material service contracts is recognized as the services are provided. Revenue from fixed price, long-term service or development contracts is recognized over the contract term based on the percentage of services that are provided during the period compared with the total estimated services to be provided over the entire contract. Losses on fixed price contracts are recognized during the period in which the loss first becomes apparent. Payment terms vary by contract.

Mobile Games

In accordance with Emerging Issues Task Force, or EITF, No. 99-19, Reporting Revenue Gross as a Principal Versus Net as an Agent, the Company recognizes as revenues the net amount the carrier reports as payable upon the sale of its games, which is net of any service or other fees earned and deducted by the carriers. The Company may estimate some revenues from mobile operators/VARs in the current period when reasonable estimates of these amounts can be made. Some mobile operators/VARs provide reliable interim preliminary reporting and others report sales data within a reasonable time frame following the end of each month, both of which allow the Company to make reasonable estimates of revenues and therefore to recognize revenues during the reporting period when the end user licenses the game. Determination of the appropriate amount of revenue recognized involves judgments and estimates that the Company believes are reasonable, but it is possible that actual results may differ from the Company’s estimates. If the Company is unable to reasonably estimate the amount of revenues to be recognized in the current period, the Company recognizes revenues upon the receipt of a mobile operator/VAR revenue report and when the Company’s portion of the game licensed revenues are fixed or determinable and collection is probable. If the Company deems a mobile operator/VAR not to be creditworthy, the Company defers all revenues from the arrangement until the Company receives payment and all other revenue recognition criteria have been met.

The Company recognizes the cost of payments to the content providers or brand owners/license holders as a cost of revenues, these costs are usually a fixed percentage of the revenue of the related games. Mobiles games cost of revenues includes all third-party hosting and testing, these costs are incurred on a monthly basis and are primarily fixed in nature regardless of the revenue generated by the related games.

Foreign Currency Translations

The Company’s functional currencies are the British Pound Sterling (“GBP”) and the Euro (“EUR”). The Company’s reporting currency is the U.S. dollar. All transactions initiated in other currencies are re-measured into the functional currency as follows:

• Monetary assets and liabilities at the rate of exchange in effect at the balance sheet date,

• Non-monetary assets and liabilities, and equity at historical rates, and

• Revenue and expense items at the average rate of exchange prevailing during the period.

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Gains and losses on re-measurement are included in determining net income for the period.

Translation of balances from the functional currency into the reporting currency is conducted as follows:

• Assets and liabilities at the rate of exchange in effect at the balance sheet date,

• Equity at historical rates, and

• Revenue and expense items at the average rate of exchange prevailing during the period.

Translation adjustments resulting from translation of balances from functional to reporting currency are accumulated as a separate component of shareholders’ equity as a component of comprehensive income or loss. Upon sale or liquidation of the net investment in the foreign entity the amount deferred will be recognized in income.

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Results Of Operations – Six month periods ended March 31, 2008 and 2007

References to the discussion below to fiscal 2008 are to our current fiscal year which will end on September 30, 2008. References to fiscal 2007 and fiscal 2006 are to our fiscal years ended September 30, 2007 and September 30, 2006 respectively.

Sales

We generated our sales from sales of games developed by Tracebit of $86,442 during the six month period of fiscal 2008 compared to $31,291 during the first six month period of fiscal 2007. We generated revenues from sales of games developed by Tracebit of $30,160 during the second quarter of fiscal 2008 compared to $27,810 during the second quarter of fiscal 2007. Sales for the first half of fiscal 2008 were comprised primarily of sales attributable to our Tracebit business, whereas sales in the first quarter of

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fiscal 2007 were attributable to sales from our MobileMail business and from our Tracebit business from the date of acquisition of February 6, 2007. These revenues were comprised of royalty fees and licenses fees earned for the sales of games through Tracebit’s distribution and re-seller agreements.

Cost of Sales

Cost of sales are comprised of license fees paid to brand owners for the sale of games with their brand attached.

Cost of sales were:

• $18,465 during the first six month period of fiscal 2008, representing 21.4% of our sales, compared to $3,062 during the first six month period of fiscal 2007, representing 9.8% of our sales, and

• $7,462 during the second quarter of fiscal 2008, representing 24.7% of our sales, compared to $3,062 during the second quarter of fiscal 2007, representing 11.1% of our sales.

Accounting and Auditing

Accounting and auditing expenses are attributable to the preparation and audit of our financial statements.

Accounting and auditing expenses increased to $81,397 during the first six month period of fiscal 2008 form $61,688 during the first six month period of fiscal 2007. Accounting and auditing expenses decreased slightly to $31,090 during the second quarter of fiscal 2008 from $32,009 during the second quarter of fiscal 2007. These fees are attributable mainly to auditing, accounting and regulatory compliance expenses and are anticipated to increase over the balance of fiscal 2008

Intellectual Property

We did not incur any expenses on any intellectual property during the first six month period of fiscal 2008 nor during fiscal 2007.

Financing Fees

We incurred financing fees of $368,630 in the second quarter of 2008 in connection with the arrangement of the convertible debenture financing that we secured to enable us to complete the acquisition of Purepromoter.

Investor Relations

Investor relations expenses are primarily comprised of fees paid to public relations firms for writing press releases and of costs for releasing them and other public relation activities.

Investor relations expenses decreased to $17,215 during the first six month period of fiscal 2008 from $27,574 during the first six month period of fiscal 2007. Investor relations expenses decreased to $11,845 during the second quarter of fiscal 2008 from $22,880 during the second quarter of fiscal 2007.

Legal

Legal expenses are attributable to legal fees paid to our legal counsel in connection with the Company’s statutory obligations as a reporting company under the Exchange Act including the preparations and filings of our quarterly and annual reports with the SEC.

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Legal expenses increased to $41,481 during the first six month period of fiscal 2008 from $35,329 during the first six month period of fiscal 2007 as a result of legal expenses incurred in connection with our acquisition and financing transactions. Legal expenses decreased slightly to $28,233 during the second quarter of fiscal 2008 from $29,930 during the second quarter of fiscal 2007. Legal expenses are expected to increase substantially during the balance of fiscal 2008 as a result of legal expenses incurred in connection with the acquisition of Purepromoter and the convertible debenture financing and to be incurred in connection with the registration statement to be filed by us in connection with the convertible debenture financing.

Management and Consulting

Management and consulting expenses are primarily comprised of consulting fees that we pay to our directors and/or officers and to other consultants on account of consulting services and expensed stock, warrant and option issues. Management and consulting expenses increased significantly to $476,665 during the first six month period of fiscal 2008 from $239,902 during the first six month period of fiscal 2007, which increase reflects the consulting agreements that we have entered into during that period. We have signed new agreements and/or amendments to current agreement with management and consultants in the first half of fiscal 2008 compared to the first half of fiscal 2007, which has significantly increased our expenses.

Office and Information Technology

Office and information technology expenses include expenses associated with the development and testing of the MobileMail software and rent for Tracebit Office.

Rent

We did not incur any rent expenses during the first six month period of fiscal 2008 compared to rent expenses of $5,805 incurred during the first six month period of fiscal 2007. The company has moved its main office address to Sunnyside, Brinkworth, Chippeham, Wiltshire in the UK and there are no rent charges for this office address.

Research and Development Costs

Research and development costs are primarily comprised of salaries paid to Tracebit’s development personnel and contract developers which relates to the development of games by Tracebit.

Research and development costs decreased significantly to $10,583 during the first six month period of fiscal 2008 from $32,594 during the first six month period of fiscal 2007. Research and development costs were a minimal amount of $269 during the second quarter of fiscal 2008 compared to $32,594 for the second quarter of fiscal 2007, reflecting substantially reduced game development activities by Tracebit.

Salaries and Wages

Our salaries and wages decreased to $Nil during the first six month period of fiscal 2008, from $5,165 during the first six month period of fiscal 2007, as we no longer pay any salaries and wages.

Sales and Marketing

We incurred $25,725 in sales and marketing expenses during the first six month period of fiscal 2008 as a result of salaries paid to Tracebit’s sales and marketing personnel and other expenses related to Tracebit sales and marketing.

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Net Loss

We incurred a net loss of $1,016,795 during the first six month period of fiscal 2008, compared to $491,860 during the first six month period of fiscal 2007 and a net loss of $5,416,041 from inception to the first six month period of fiscal 2008. Our net loss for the second quarter of 2008 was $750,024 compared to $351,344 for the second quarter of 2007. The increases in losses were primarily the result of increased management and consulting fees and financing fees incurred in connection with our acquisition of Purepromoter.

Liquidity and Financial Resources

We had cash of $25,954 and a working capital deficit of $3,111,644 as at March 31, 2008. We had cash of $27,123 and a working capital deficit of $1,085,799 as at our fiscal year ended September 30, 2007.

Our cash at March 31, 2008 included restricted cash of $2,000,000 from the convertible debenture financing that were held in escrow pending closing of our acquisition of Purepromoter and which have since been released to enable us to pay a portion of the closing price for this acquisition.

Plan of Operations

We estimate that our total expenditures over the next twelve months will be approximately $7,000,000. While this amount will be offset by revenues generated from our Mobiventures, Tracebit, M2M and Purepromoter business operations, we anticipate that our cash and working capital will not be sufficient to enable us to undertake our plan of operations over the next twelve months without our obtaining additional financing. We anticipate that we will require additional financing in the approximate amount of $1,000,000 in order to enable us to sustain our operations for the next twelve months. There can be no assurance that we will be able to obtain such financing on terms favourable to us or at all.

We believe that debt financing will not be an alternative for funding our plan of operations as we do not have tangible assets to secure any debt financing. We anticipate that additional funding will be in the form of equity financing from the sale of our common stock. However, we do not have any financing arranged and we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund our plan of operations. Even if we are successful in obtaining equity financing to fund our plan of operations, there is no assurance that we will obtain the funding necessary to pursue the plan of operations.

M2M

M2M’s cash and working capital position was as follows as of January 31, 2008 and October 31, 2007 ($USD:£GBP as of January 31, 2008 1,9888:1 and as of October 31, 2007 2,0718:1):

Total expenditures over the next 12 months are estimated to be approximately £300,000. While this amount may be offset by revenues by M2M’s from revenues, it is anticipated that M2M’s cash and

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working capital will not be sufficient to enable it to undertake its plan of operations over the next 12 months without obtaining additional financing. Accordingly, our plan of operations for M2M is subject to our raising additional financing, of which there is no assurance.

Purepromoter

Purepromoter’s unaudited cash and working capital position was as follows as of December 31, 2007 and March 31, 2007 ($USD:£GBP as of December 31, 2007 2,0074:1 and as of March 31, 2007 1,9591:1):

Total expenditures over the next twelve months are estimated to be approximately £1,600,000. This amount may be offset by revenues earned by Purepromoter from its business. It is anticipated that Purepromoter’s cash and working capital will be sufficient to enable it to undertake its plan of operations over the next 12 months without obtaining additional financing. However, there can be no assurance of this and additional financing may be required.

Convertible Debentures

We will be required to make repayments of the debt owing under the convertible debentures during the following 12 months on a monthly basis in a total amount of $950,248, interest of $157,230 and redemption premium of $142,537. These payments will be made from the cash flow the business is generating and/or from raising additional equity or debt financing. However, there can be no assurance of this and additional financing may be required.

Ahman Promissory Note

We borrowed 612,000 Euros from Peter Ahman, our president, in order to enable us to complete the acquisition of Purepromoter. This amount is due and payable on May 30, 2008. We plan to repay this loan with a dividend paid from Purepromoter to Mobiventures Inc. at the end of May 2008.

Cash used in Operating Activities

We used cash of $159,591 in operating activities during the first six month period of fiscal 2008 compared to cash used of $144,569 during the six month period of fiscal 2007.

We have applied cash generated from financing activities to fund cash used in operating activities.

Cash from Investing Activities

We used cash of $2,026,202 during the first six month period of fiscal 2008 as a result of:

• restricted cash of $2,000,000 attributable to our convertible debenture financing, and

• bank indebtedness of $26,202 assumed on our acquisition of M2M on March 31, 2008.

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Cash from Financing Activities

We generated cash of $2,198,537 from financing activities during the first six month period of fiscal 2008 compared to cash of $150,627 generated from financing activities during the first six month period of fiscal 2007. Cash generated from financing activities during these periods was primarily attributable to advanced from related parties and shares issued for cash, plus $2,000,000 proceeds from our convertible debenture financing.

Going Concern

We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive business activities. For these reasons our auditors stated in their report that they have substantial doubt we will be able to continue as a going concern.

Future Financings

We anticipate continuing to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to our existing stockholders. There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or other financing to fund our planned activities.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

Item 3.        Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4.        Controls And Procedures

As required by Rule 13a-15 under the Exchange Act, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2008, being the date of our most recently completed quarter. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer, Mr. Nigel Nicholas and our Chief Financial Officer, Mr. Peter Åhman. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the rules and forms of the Securities and Exchange Commission (the “SEC”).

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

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During the fiscal quarter ended March 31, 2008, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to affect, our internal control over financial reporting during the quarter ended March 31, 2008.

The term “internal control over financial reporting” is defined as a process designed by, or under the supervision of, the registrant’s principal executive and principal financial officers, or persons performing similar functions, and effected by the registrant’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

PART II – OTHER INFORMATION

Item 1.        Legal Proceedings

We currently are not a party to any material legal proceedings and to our knowledge, no such proceedings are threatened or contemplated.

Item 1A.     Risk Factors

The following sets forth some of the risks relating to our business. If any of the following risks occurs, our business, financial condition or results of operations could be seriously harmed. We face additional risks as disclosed in our Annual Report on Form 10-KSB for the year ended September 30, 2007 and our other filings with the Securities and Exchange Commission.

Risks Related to Our Business

We have a limited operating history in an emerging market, which may make it difficult to evaluate our business.

Tracebit was incorporated in 1996 but began selling mobile games in 2002. Accordingly, we have only a limited history of generating revenues in the mobile entertainment industry, and the future revenue potential of our business in this emerging market is uncertain. As a result of our short operating history, we have limited financial data that can be used to evaluate our business. Any evaluation of our business and our prospects must be considered in light of our limited operating history and the risks and uncertainties encountered by companies in our stage of development. As an early stage company in the emerging mobile entertainment industry, we face increased risks, uncertainties, expenses and difficulties, any of which could materially harm our business, operating results and financial condition.

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We have incurred losses in certain periods and may incur substantial net losses in the future and may not achieve profitability.

We have incurred losses in certain periods since inception. We expect to continue to increase expenses as we implement initiatives designed to continue to grow our business, including, among other things, the development and marketing of new games, further international expansion, expansion of our infrastructure, acquisition of content, and general and administrative expenses associated with being a public company. If our revenues do not increase to offset these expected increases in operating expenses, we will continue to incur losses and will not become profitable. In future periods, our revenues could decline. Accordingly, we may not be able to achieve profitability in the future.

Our financial results could vary significantly from quarter to quarter and are difficult to predict.

Our revenues and operating results could vary significantly from quarter to quarter because of a variety of factors, many of which are outside of our control. As a result, comparing our operating results on a period-to-period basis may not be meaningful. In addition, we may not be able to predict our future revenues or results of operations. We base our current and future expense levels on our internal operating plans and sales forecasts, and our operating costs are to a large extent fixed. As a result, we may not be able to reduce our costs sufficiently to compensate for an unexpected shortfall in revenues, and even a small shortfall in revenues could disproportionately and adversely affect financial results for that quarter. Individual games and carrier relationships represent meaningful portions of our revenues and net loss in any quarter. We may incur significant or unanticipated expenses when licenses are renewed. In addition, any payments due to us from carriers for revenues that are recognized on a cash basis may be delayed because of changes or issues with those carriers’ processes.

The markets in which we operate are highly competitive, and many of our competitors have significantly greater resources than we do.

The development, distribution and sale of mobile games is a highly competitive business. For end users, we compete primarily on the basis of brand, game quality and price. For wireless carriers, we compete for deck placement based on these factors, as well as historical performance and perception of sales potential and relationships with licensors of brands and other intellectual property. For content and brand licensors, we compete based on royalty and other economic terms, perceptions of development quality, porting abilities, speed of execution, distribution breadth and relationships with carriers. We also compete for experienced and talented employees.

Our primary competitors include Digital Chocolate, Electronic Arts (EA Mobile), Gameloft, Hands-On Mobile, I-play, Namco and THQ, among others. In the future, likely competitors include major media companies, traditional video game publishers, content aggregators, mobile software providers and independent mobile game publishers. Carriers may also decide to develop, internally or through a managed third-party developer, and distribute their own mobile games. If carriers enter the mobile game market as publishers, they might refuse to distribute some or all of our games or might deny us access to all or part of their networks.

Some of our competitors’ and our potential competitors’ advantages over us, either globally or in particular geographic markets, include having significantly greater revenues and financial resources, stronger brand and consumer recognition, the capacity to leverage their marketing expenditures across a broader portfolio of mobile and non-mobile products, pre-existing relationships with brand owners or carriers, greater resources to make acquisitions, lower labor and development costs, and broader distribution.

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If we are unable to compete effectively or we are not as successful as our competitors in our target markets, our sales could decline, our margins could decline and we could lose market share, any of which would materially harm our business, operating results and financial condition.

Failure to renew our existing brand and content licenses on favorable terms or at all and to obtain additional licenses would impair our ability to introduce new mobile games or to continue to offer our current games based on third-party content.

Even if mobile games based on licensed content or brands remain popular, any of our licensors could decide not to renew our existing license or not to license additional intellectual property and instead license to our competitors or develop and publish its own mobile games or other applications, competing with us in the marketplace. Many of these licensors already develop games for other platforms, and may have significant experience and development resources available to them should they decide to compete with us rather than license to us.

We currently rely on wireless carriers, content aggregators and value added resellers to market and distribute our games and thus to generate our revenues. The loss of or a change in any of these significant carrier, content aggregator or value added reseller relationships could cause us to lose access to their subscribers and thus materially reduce our revenues.

Our future success is highly dependent upon maintaining successful relationships with the wireless carriers, content aggregators and value added resellers with which we currently work and establishing new relationships in geographies where we have not yet established a significant presence. Our failure to maintain our relationships with these carriers, content aggregators and value added resellers would materially reduce our revenues and thus harm our business, operating results and financial condition.

If any of our carriers, content aggregators and value added resellers decides not to market or distribute our games or decides to terminate, not renew or modify the terms of its agreement with us or if there is consolidation among carriers, content aggregators and value added resellers generally, we may be unable to replace the affected agreement with acceptable alternatives, causing us to lose access to that carrier’s, content aggregator’s and value added reseller’s subscribers/customers and the revenues they afford us, which could materially harm our business, operating results and financial condition.

End user tastes are continually changing and are often unpredictable; if we fail to develop and publish new mobile games that achieve market acceptance, our sales would suffer.

Our business depends on developing and publishing mobile games that wireless carriers, content aggregators and value added resellers will place on their decks and end users will buy. We must invest significant resources in licensing efforts, research and development, marketing and regional expansion to enhance our offering of games and introduce new games, and we must make decisions about these matters well in advance of product release in order to implement them in a timely manner. Our success depends, in part, on unpredictable and volatile factors beyond our control, including end-user preferences, competing games and the availability of other entertainment activities. If our games and related applications are not responsive to the requirements of our carriers, content aggregators and value added resellers or the entertainment preferences of end users, or they are not brought to market in a timely and effective manner, our business, operating results and financial condition would be harmed. Even if our games are successfully introduced and initially adopted, a subsequent shift in our carriers, content aggregators and value added resellers or the entertainment preferences of end users could cause a decline in our games’ popularity that could materially reduce our revenues and harm our business, operating results and financial condition.

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Inferior deck placement would likely adversely impact our revenues and thus our operating results and financial condition.

Wireless carriers provide a limited selection of games that are accessible to their subscribers through a deck on their mobile handsets. The inherent limitation on the number of games available on the deck is a function of the limited screen size of handsets and carriers’ perceptions of the depth of menus and numbers of choices end users will generally utilize. Carriers typically provide one or more top level menus highlighting games that are recent top sellers, that the carrier believes will become top sellers or that the carrier otherwise chooses to feature, in addition to a link to a menu of additional games sorted by genre. We believe that deck placement on the top level or featured menu or toward the top of genre-specific or other menus, rather than lower down or in sub-menus, is likely to result in games achieving a greater degree of commercial success. If carriers choose to give our games less favorable deck placement, our games may be less successful than we anticipate, our revenues may decline and our business, operating results and financial condition may be materially harmed.

We have depended on no more than 20 mobile games for a majority of our revenues in recent fiscal periods.

In our industry, new games are frequently introduced, but a relatively small number of games account for a significant portion of industry sales. Similarly, a significant portion of our revenues comes from a limited number of mobile games, although the games in that group have shifted over time. We expect to release a relatively small number of new games each year for the foreseeable future. If these games are not successful, our revenues could be limited and our business and operating results would suffer in both the year of release and thereafter.

If we are unsuccessful in establishing and increasing awareness of our brand and recognition of our mobile games or if we incur excessive expenses promoting and maintaining our brand or our games, our potential revenues could be limited, our costs could increase and our operating results and financial condition could be harmed.

We believe that establishing and maintaining our brand is critical to retaining and expanding our existing relationships with wireless carriers, content aggregators, value added resellers and content licensors, as well as developing new relationships. Promotion of the Tracebit brand will depend on our success in providing high-quality mobile games. Similarly, recognition of our games by end users will depend on our ability to develop engaging games of high quality with attractive titles. However, our success will also depend, in part, on the services and efforts of third parties, over which we have little or no control. For instance, if our carriers fail to provide high levels of service, our end users’ ability to access our games may be interrupted, which may adversely affect our brand. If end users, branded content owners and carriers do not perceive our existing games as high-quality or if we introduce new games that are not favorably received by our end users and carriers, then we may be unsuccessful in building brand recognition and brand loyalty in the marketplace. In addition, globalizing and extending our brand and recognition of our games will be costly and will involve extensive management time to execute successfully. Further, the markets in which we operate are highly competitive and some of our competitors, such as Glu Mobile, already have substantially more brand name recognition and greater marketing resources than we do. If we fail to increase brand awareness and consumer recognition of our games, our potential revenues could be limited, our costs could increase and our business, operating results and financial condition could suffer.

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Our business and growth may suffer if we are unable to hire and retain key personnel, who are in high demand.

We depend on the continued contributions of our senior management and other key personnel. The loss of the services of any of our executive officers or other key employees could harm our business. We do not maintain a key-person life insurance policy on any of our officers or other employees.

Our future success also depends on our ability to identify, attract and retain highly skilled technical, managerial, finance, marketing and creative personnel. We face intense competition for qualified individuals from numerous technology, marketing and mobile entertainment companies. Qualified individuals are in high demand, and we may incur significant costs to attract them. We may be unable to attract and retain suitably qualified individuals who are capable of meeting our growing creative, operational and managerial requirements, or may be required to pay increased compensation in order to do so. If we are unable to attract and retain the qualified personnel we need to succeed, our business would suffer.

If we fail to deliver our games at the same time as new mobile handset models are commercially introduced, our sales may suffer.

Our business is dependent, in part, on the commercial introduction of new handset models with enhanced features, including larger, higher resolution color screens, improved audio quality, and greater processing power, memory, battery life and storage. We do not control the timing of these handset launches. Some new handsets are sold by carriers with one or more games or other applications pre-loaded, and many end users who download our games do so after they purchase their new handsets to experience the new features of those handsets. Some handset manufacturers might give us access to their handsets prior to commercial release. If one or more major handset manufacturers were to cease to provide us the opportunity to access new handset models prior to commercial release, we might be unable to introduce compatible versions of our games for those handsets in coordination with their commercial release, and we might not be able to make compatible versions for a substantial period following their commercial release. If, because of game launch delays, we miss the opportunity to sell games when new handsets are shipped or our end users upgrade to a new handset, or if we miss the key holiday selling period, either because the introduction of a new handset is delayed or we do not deploy our games in time for the holiday selling season, our revenues would likely decline and our business, operating results and financial condition would likely suffer.

Wireless carriers, content aggregators and value added resellers generally control the price charged for our mobile games and the billing and collection for sales of our mobile games and could make decisions detrimental to us.

Wireless carriers, content aggregators and value added resellers generally control the price charged for our mobile games either by approving or establishing the price of the games charged to their subscribers/customers. Some of our carrier, content aggregator and value added reseller agreements also restrict our ability to change prices. In cases where carrier, content aggregator or value added reseller approval is required, approvals may not be granted in a timely manner or at all. A failure or delay in obtaining these approvals, the prices established by the carriers, content aggregators and value added resellers for our games, or changes in these prices could adversely affect market acceptance of those games. A failure or delay by these carriers in adjusting the retail price for our games, could adversely affect sales volume and our revenues for those games.

Carriers and other distributors also control billings and collections for our games, either directly or through third-party service providers. If our carriers, content aggregators and value added resellers or their third-party service providers cause material inaccuracies when providing billing and collection

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services to us, our revenues may be less than anticipated or may be subject to refund at the discretion of the carrier. This could harm our business, operating results and financial condition.

We may be unable to develop and introduce in a timely way new mobile games, and our games may have defects, which could harm our brand.

The planned timing and introduction of new original mobile games and games based on licensed intellectual property are subject to risks and uncertainties. Unexpected technical, operational, deployment, distribution or other problems could delay or prevent the introduction of new games, which could result in a loss of, or delay in, revenues or damage to our reputation and brand. If any of our games is introduced with defects, errors or failures, we could experience decreased sales, loss of end users, damage to our carrier relationships and damage to our reputation and brand. Our attractiveness to branded content licensors might also be reduced. In addition, new games may not achieve sufficient market acceptance to offset the costs of development, particularly when the introduction of a game is substantially later than a planned “day-and-date” launch, which could materially harm our business, operating results and financial condition.

If we fail to maintain and enhance our capabilities for porting games to a broad array of mobile handsets, our attractiveness to wireless carriers and branded content owners will be impaired, and our sales could suffer.

Once developed, a mobile game may be required to be ported to, or converted into separate versions for, more than 100 different handset models, many with different technological requirements. These include handsets with various combinations of underlying technologies, user interfaces, keypad layouts, screen resolutions, sound capabilities and other carrier-specific customizations. If we fail to maintain or enhance our porting capabilities, our sales could suffer, branded content owners might choose not to grant us licenses and carriers might choose to give our games less desirable deck placement or not to give our games placement on their decks at all.

Changes to our game design and development processes to address new features or functions of handsets or networks might cause inefficiencies in our porting process or might result in more labor intensive porting processes. In addition, we anticipate that in the future we will be required to port existing and new games to a broader array of handsets. If we utilize more labor intensive porting processes, our margins could be significantly reduced and it might take us longer to port games to an equivalent number of handsets. This, in turn, could harm our business, operating results and financial condition.

If our independent, third-party developers cease development of new games for us and we are unable to find comparable replacements, we may have to reduce the number of games that we intend to introduce, delay the introduction of some games or increase our internal development staff, which would be a time-consuming and potentially costly process, and, as a result, our competitive position may be adversely impacted.

We rely on independent third-party developers to develop our games. If our developers terminate their relationships with us or negotiate agreements with terms less favorable to us, we may have to reduce the number of games that we intend to introduce, delay the introduction of some games or increase our internal development staff, which would be a time-consuming and potentially costly process, and, as a result, our business, operating results and financial condition could be harmed.

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If we do not adequately protect our intellectual property rights, it may be possible for third parties to obtain and improperly use our intellectual property and our competitive position may be adversely affected.

Our intellectual property is an essential element of our business. We rely on a combination of copyright, trademark, trade secret and other intellectual property laws and restrictions on disclosure to protect our intellectual property rights. To date, we have not sought patent protection. Consequently, we will not be able to protect our technologies from independent invention by third parties. Despite our efforts to protect our intellectual property rights, unauthorized parties may attempt to copy or otherwise to obtain and use our technology and games. Monitoring unauthorized use of our games is difficult and costly, and we cannot be certain that the steps we have taken will prevent piracy and other unauthorized distribution and use of our technology and games, particularly internationally where the laws may not protect our intellectual property rights as fully as in the United States. In the future, we may have to resort to litigation to enforce our intellectual property rights, which could result in substantial costs and diversion of our management and resources.

Third parties may sue us for intellectual property infringement, which, if successful, may disrupt our business and could require us to pay significant damage awards.

Third parties may sue us for intellectual property infringement or initiate proceedings to invalidate our intellectual property, either of which, if successful, could disrupt the conduct of our business, cause us to pay significant damage awards or require us to pay licensing fees. In the event of a successful claim against us, we might be enjoined from using our or our licensed intellectual property, we might incur significant licensing fees and we might be forced to develop alternative technologies. Our failure or inability to develop non-infringing technology or games or to license the infringed or similar technology or games on a timely basis could force us to withdraw games from the market or prevent us from introducing new games. In addition, even if we are able to license the infringed or similar technology or games, license fees could be substantial and the terms of these licenses could be burdensome, which might adversely affect our operating results. We might also incur substantial expenses in defending against third-party infringement claims, regardless of their merit. Successful infringement or licensing claims against us might result in substantial monetary liabilities and might materially disrupt the conduct of our business.

Indemnity provisions in various agreements potentially expose us to substantial liability for intellectual property infringement, damages caused by malicious software and other losses.

In the ordinary course of our business, most of our agreements with carriers and other distributors include indemnification provisions. In these provisions, we agree to indemnify them for losses suffered or incurred in connection with our games, including as a result of intellectual property infringement and damages caused by viruses, worms and other malicious software. The term of these indemnity provisions is generally perpetual after execution of the corresponding license agreement, and the maximum potential amount of future payments we could be required to make under these indemnification provisions is generally unlimited. Large future indemnity payments could harm our business, operating results and financial condition.

We may need to raise additional capital to grow our business, and we may not be able to raise capital on terms acceptable to us or at all.

The operation of our business and our efforts to grow our business further will require significant cash outlays and commitments. We need to seek additional capital, potentially through debt or equity financings, to fund our growth. We may not be able to raise needed cash on terms acceptable to us or at all. Financings, if available, may be on terms that are dilutive or potentially dilutive to our stockholders,

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and the prices at which new investors would be willing to purchase our securities may be lower than the initial public offering price. The holders of new securities may also receive rights, preferences or privileges that are senior to those of existing holders of our common stock. If new sources of financing are required but are insufficient or unavailable, we would be required to modify our growth and operating plans to the extent of available funding, which would harm our ability to grow our business.

Risks Relating to Our Industry

Wireless communications technologies are changing rapidly, and we may not be successful in working with these new technologies.

Wireless network and mobile handset technologies are undergoing rapid innovation. New handsets with more advanced processors and supporting advanced programming languages continue to be introduced. In addition, networks that enable enhanced features, such as multiplayer technology, are being developed and deployed. We have no control over the demand for, or success of, these products or technologies. The development of new, technologically advanced games to match the advancements in handset technology is a complex process requiring significant research and development expense, as well as the accurate anticipation of technological and market trends. If we fail to anticipate and adapt to these and other technological changes, the available channels for our games may be limited and our market share and our operating results may suffer. Our future success will depend on our ability to adapt to rapidly changing technologies, develop mobile games to accommodate evolving industry standards and improve the performance and reliability of our games. In addition, the widespread adoption of networking or telecommunications technologies or other technological changes could require substantial expenditures to modify or adapt our games.

The complexity of and incompatibilities among mobile handsets may require us to use additional resources for the development of our games.

To reach large numbers of wireless subscribers, mobile entertainment publishers like us must support numerous mobile handsets and technologies. However, keeping pace with the rapid innovation of handset technologies together with the continuous introduction of new, and often incompatible, handset models by wireless carriers and handset manufacturers may require us to make significant investments in research and development, including personnel, technologies and equipment. We may be required to make substantial investments in our development if the number of different types of handset models continues to proliferate. In addition, as more advanced handsets are introduced that enable more complex, feature rich games, we anticipate that our per-game development costs will increase, which could increase the risks associated with the failure of any one game and could materially harm our operating results and financial condition.

If wireless subscribers do not continue to use their mobile handsets to access games and other applications, our business growth and future revenues may be adversely affected.

We operate in a developing industry. Our success depends on growth in the number of wireless subscribers who use their handsets to access data services and, in particular, entertainment applications of the type we develop and distribute. New or different mobile entertainment applications, such as streaming video or music applications, developed by our current or future competitors may be preferred by subscribers to our games. In addition, other mobile platforms such as the iPod and dedicated portable gaming platforms such as the PlayStation Portable and the Nintendo DS may become more widespread, and end users may choose to switch to these platforms. If the market for our games does not continue to grow or we are unable to acquire new end users, our business growth and future revenues could be adversely affected. If end users switch their entertainment spending away from the games and related applications that we publish, or switch to portable gaming platforms or distribution where we do not have

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comparative strengths, our revenues would likely decline and our business, operating results and financial condition would suffer.

Our industry is subject to risks generally associated with the entertainment industry, any of which could significantly harm our operating results.

Our business is subject to risks that are generally associated with the entertainment industry, many of which are beyond our control. These risks could negatively impact our operating results and include: the popularity, price and timing of release of games and mobile handsets on which they are played; economic conditions that adversely affect discretionary consumer spending; changes in consumer demographics; the availability and popularity of other forms of entertainment; and critical reviews and public tastes and preferences, which may change rapidly and cannot necessarily be predicted.

A shift of technology platform by wireless carriers and mobile handset manufacturers could lengthen the development period for our games, increase our costs and cause our games to be of lower quality or to be published later than anticipated.

End users of games must have a mobile handset with multimedia capabilities enabled by technologies capable of running third-party games and related applications such as ours. Our development resources are concentrated in the Java platform, and we have experience developing games for the BREW platforms. If one or more of these technologies fall out of favor with handset manufacturers and wireless carriers and there is a rapid shift to a technology platform such as Adobe Flash Lite or a new technology where we do not have development experience or resources, the development period for our games may be lengthened, increasing our costs, and the resulting games may be of lower quality, and may be published later than anticipated. In such an event, our reputation, business, operating results and financial condition might suffer.

System or network failures could reduce our sales, increase costs or result in a loss of end users of our games.

Mobile game publishers rely on wireless carriers’ networks to deliver games to end users and on their or other third parties’ billing systems to track and account for the downloading of their games. In certain circumstances, mobile game publishers may also rely on their own servers to deliver games on demand to end users through their carriers’ networks. Any failure of, or technical problem with, carriers’, third parties’ or our billing systems, delivery systems, information systems or communications networks could result in the inability of end users to download our games, prevent the completion of billing for a game, or interfere with access to some aspects of our games or other products. If any of these systems fails or if there is an interruption in the supply of power, an earthquake, fire, flood or other natural disaster, or an act of war or terrorism, end users might be unable to access our games. Any failure of, or technical problem with, the carriers’, other third parties’ or our systems could cause us to lose end users or revenues or incur substantial repair costs and distract management from operating our business. This, in turn, could harm our business, operating results and financial condition.

The market for mobile games is seasonal, and our results may vary significantly from period to period.

Many new mobile handset models are released in the fourth calendar quarter to coincide with the holiday shopping season. Because many end users download our games soon after they purchase new handsets, we may experience seasonal sales increases based on the holiday selling period. However, due to the time between handset purchases and game purchases, most of this holiday impact occurs for us in our first quarter. If we miss these key selling periods for any reason, our sales will suffer disproportionately. Likewise, if a key event to which our game release schedule is tied were to be delayed or cancelled, our

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sales would also suffer disproportionately. Further, for a variety of reasons, including roaming charges for data downloads that may make purchase of our games prohibitively expensive for many end users while they are traveling, we may experience seasonal sales decreases during the summer, particularly in Europe. If the level of travel increases or expands to other periods, our operating results and financial condition may be harmed.

Our business depends on the growth and maintenance of wireless communications infrastructure.

Our success will depend on the continued growth and maintenance of wireless communications infrastructure internationally. This includes deployment and maintenance of reliable next-generation digital networks with the speed, data capacity and security necessary to provide reliable wireless communications services. Wireless communications infrastructure may be unable to support the demands placed on it if the number of subscribers continues to increase, or if existing or future subscribers increase their bandwidth requirements. Wireless communications have experienced a variety of outages and other delays as a result of infrastructure and equipment failures, and could face outages and delays in the future. These outages and delays could reduce the level of wireless communications usage as well as our ability to distribute our games successfully. In addition, changes by a wireless carrier to network infrastructure may interfere with downloads of our games and may cause end users to lose functionality in our games that they have already downloaded. This could harm our business, operating results and financial condition.

Changes in government regulation of the media and wireless communications industries may adversely affect our business.

It is possible that a number of laws and regulations may be adopted in the United States and elsewhere that could restrict the media and wireless communications industries, including laws and regulations regarding customer privacy, taxation, content suitability, copyright, distribution and antitrust. Furthermore, the growth and development of the market for electronic commerce may prompt calls for more stringent consumer protection laws that may impose additional burdens on companies such as ours conducting business through wireless carriers. We anticipate that regulation of our industry will increase and that we will be required to devote legal and other resources to address this regulation.

Risks Related to M2M’s Business

There is no assurance that M2M will ever be able to liquidate its investments in its portfolio companies.

M2M is the owner of minority interests in a number of companies, all of which are presently private companies. There is no assurance that M2M will be able to liquidate its investments in these companies. Further, there is no assurance as to the proceeds that M2M will be able to obtain for these investments. The amount of these proceeds may be substantially less than the cost to M2M of its investments in the companies.

We have a limited operating history in an emerging market, which may make it difficult to evaluate our business.

M2M has only a limited history of generating revenues. As a result of its short operating history, there is limited financial data that can be used to evaluate M2M’s business. Any evaluation of M2M’s business and prospects must be considered in light of M2M’s limited operating history and the risks and uncertainties encountered by companies in our stage of development. As an early stage company, M2M faces increased risks, uncertainties, expenses and difficulties, any of which could materially harm its business, operating results and financial condition.

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We have incurred losses in certain periods and may incur substantial net losses in the future and may not achieve profitability.

M2M incurred losses in certain periods since inception. We expect to continue to increase expenses as we implement initiatives designed to continue to grow M2M’s business. If M2M’s revenues do not increase to offset these expected increases in operating expenses, M2M will continue to incur losses and will not become profitable. In future periods, M2M’s revenues could decline. Accordingly, M2M may not be able to achieve profitability in the future.

M2M’s financial results could vary significantly from quarter to quarter and are difficult to predict.

M2M’s revenues and operating results could vary significantly from quarter to quarter because of a variety of factors, many of which are outside of our control. As a result, comparing M2M’s operating results on a period-to-period basis may not be meaningful. In addition, we may not be able to predict M2M’s future revenues or results of operations. We plan to base M2M’s current and future expense levels on our internal operating plans and sales forecasts, and our operating costs are to a large extent fixed. As a result, we may not be able to reduce M2M’s costs sufficiently to compensate for an unexpected shortfall in revenues, and even a small shortfall in revenues could disproportionately and adversely affect financial results for that quarter.

The markets in which we operate are highly competitive, and many of our competitors have significantly greater resources than we do.

M2M competes in a very competitive business environment. Some of our competitors’ and our potential competitors’ advantages over us, either globally or in particular geographic markets, include having significantly greater revenues and financial resources, stronger brand and consumer recognition, the capacity to leverage their marketing expenditures across a broader portfolio of mobile and non-mobile products, pre-existing relationships with brand owners or carriers, greater resources to make acquisitions, lower labor and development costs, and broader distribution.

If we are unable to compete effectively or we are not as successful as our competitors in our target markets, our sales could decline, our margins could decline and we could lose market share, any of which would materially harm our business, operating results and financial condition.

Our business and growth may suffer if we are unable to hire and retain key personnel, who are in high demand.

We will depend on the continued contributions of M2M’s senior management and other key personnel. The loss of the services of any of our executive officers or other key employees could harm M2M’s business. We do not maintain a key-person life insurance policy on any of our officers or other employees.

Our future success also depends on our ability to identify, attract and retain highly skilled technical, managerial, finance, marketing and creative personnel. We face intense competition for qualified individuals from numerous technology, marketing and mobile entertainment companies. Qualified individuals are in high demand, and we may incur significant costs to attract them. We may be unable to attract and retain suitably qualified individuals who are capable of meeting our growing creative, operational and managerial requirements, or may be required to pay increased compensation in order to do so. If we are unable to attract and retain the qualified personnel we need to succeed, our business would suffer.

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Risks Related to Purepromoter’s Business

Purepromoter has a limited operating history, which may make it difficult to evaluate its business.

Purepromoter has only a five year history of generating revenues. As a consequence of the relatively short operating history is that there is only limited financial data which can be used to evaluate Purepromoter’s business. Any evaluation of Purepromoter’s business and prospects must be considered in light of Purepromoter’s limited operating history and the risks and uncertainties encountered by companies in its stage of development. As an early stage company, Purepromoter faces increased risks, uncertainties, expenses and difficulties, any of which could materially harm its business, operating results and financial condition.

Purepromoter has supplier, computer hardware and internet reliability related risks.

To run the software and services it suppliers, Purepromoter rents servers located at hosting centers and purchases SMS bandwidth from portals in the UK.

Although, it spreads the risk of computer hardware failure across multiple servers in multiple hosting centers and, to date, its supplier’s records have been good, there is no assurance of continuity of supply. An event resulting in a hosting centre going off-line for any significant period of time may result in significant loss of revenues and therefore materially harm Purepromoter’s business, operating results and financial condition.

Similarly, events stopping the servers from communicating over the internet will also have the same consequences.

Purepromoter faces ISP reputation related risks.

By far the largest proportion of Purepromoter’s revenue is currently derived by charging a price per email for sending marketing emails on behalf of commercial marketing departments. The largest volume senders of emails tend to be companies sending to consumers. Consequently some of Purepromoter’s largest customers send large numbers of emails to consumers.

The EU anti-spam regulations and US CAN_SPAM laws place restrictions on what and when companies are allowed to send marketing emails to consumers. Purepromoter rents the use of its software and servers for customers to upload their own email lists and send their own email marketing campaigns. Purepromoter does not own lists or process other people’s data and is therefore not directly liable for any breaches of the EU or US anti-spam regulations. However, where customers are considered by email recipients to be sending unwanted emails, there is an inherent mechanism within most email clients to make a complaint against the sender. The level or number of complaints is recorded by the larger ISP’s (Hotmail, Yahoo, etc) against the IP address of the server sending the email. This record of complaint rate acts as a “reputation” for the IP address.

Purepromoter closely audits the complaint rates for each of its customers and reacts quickly and accordingly to stop rogue campaigns. However if too many new customers were to create and send campaigns which attracted high complaint rates, the reputation of its sending servers could be diminished. This diminished reputation could affect Purepromoter’s ability to win large new customers and therefore significantly affect its planned growth in revenues.

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Purepromoter’s financial results could vary from quarter to quarter and are difficult to accurately predict.

Purepromoter’s revenues and operating results largely depend on the number of emails and SMS messages sent by the marketing departments of its customers. Although marketing spent on email is predicted to increase, any downturn in marketing budgets could significantly affect Purepromoters revenues

As a result, comparing Purepromoter’s operating results on a period-to-period basis may not provide an accurate financial picture of its results and financial condition. In addition, we may not be able to accurately predict Purepromoter’s future revenues or results of operations.

The markets in which Purepromoter operates are highly competitive, and many of its competitors have significantly greater resource.

Purepromoter competes in a very competitive business environment. Some of its competitors and potential competitors have advantages over it in software development and globally in terms of coverage of geographic markets. There are number of competitors who generate significantly greater revenues, have larger financial resources and stronger brand recognition. Their capacity to leverage their marketing expenditures across a broader range of potential customers, form relationships with brand owners or make acquisitions of complimentary products inherently increases the risk to Purepromoter’s business model.

If Purepromoter is unable to compete effectively or it is not as successful as its competitors in its target markets, sales growth could fall short of expectations, margins could decline and it could lose market share, any of which would materially harm its business, operating results and financial condition.

The business and growth of Purepromoter may suffer if it is unable to hire and retain key personnel, who are in high demand.

Purepromoter depends on the continued contributions of Purepromoter’s senior management and other key personnel. The loss of the services of any of these executive officers or other key employees could harm Purepromoter’s business. Purepromoter does not maintain a key-person life insurance policy on any of its officers or other employees.

The future success of Purepromoter also depends on its ability to identify, attract and retain highly skilled technical, managerial and sales personnel. Purepromoter faces intense competition for qualified individuals from numerous technology and marketing companies. Qualified individuals are in high demand, and Purepromoter may incur significant costs to attract them. Purepromoter may be unable to attract and retain suitably qualified individuals who are capable of meeting growing operational and managerial requirements, or may be required to pay increased compensation in order to do so.

Although, to date, Purepromoter has a good record of attracting staff at fair salary levels, if it is unable to attract and retain the qualified personnel needed to succeed, its business would suffer.

Item 2.        Unregistered Sales of Equity Securities and Use of Proceeds

We completed sales of equity securities in transactions that have not been registered under the Act during the three months ended March 31, 2008 as reported in our current reports on Form 8-K as filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934 (the “Exchange Act”) as follows:

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Since March 31, 2008, we have completed sales of equity securities in transactions that have not been registered under the Act as reported in the following current reports on Form 8-K as filed with the Securities and Exchange Commission pursuant to the Exchange Act:

Item 3.        Defaults Upon Senior Securities

None.

Item 4.        Submission of Matters to a Vote of Securities Holders

No matters were submitted to our security holders for a vote during the three month period ended March 31, 2008.

Item 5.        Other Information

None.

Item 6.        Exhibits

The following exhibits are included with this Quarterly Report on Form 10-Q:

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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.

MOBIVENTURES INC.

By:      /s/ Nigel Nicholas 
            _______________________________
            Nigel Nicholas
            Chief Executive Officer

            Date: May 15, 2008

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