FLASR, Inc.

FLASR, Inc. (“FLASR”) was incorporated in the State of Delaware on February 13, 2013 to engage in the business of selling portable tobacco flasks. Mr. Everett Dickson owned all of the issued and outstanding shares of common stock of FLASR and was its President and Chief Executive Officer, Secretary and Treasurer and sole director.

Language Arts Corp.

The Language Arts Corp. (“Language Arts”) was incorporated in the State of Nevada on April 22, 2013 to design, develop and launch an online language learning and translation service via the Internet but never commenced such planned operations, had limited start-up operations, and generated no revenues.

Basis of Presentation

The accompanying condensed financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and notes required by US GAAP for complete financial statements.

The Company has elected a March 31 fiscal year end.

The accompanying condensed consolidated financial statements at December 31, 2014 and March 31, 2014 and for the three-month and nine-month periods ended December 31, 2014 and 2013 contain all normally recurring adjustments considered necessary for a fair presentation of the Company’s financial position, results of operations, and cash flows for such periods. Operating results for the three and nine month periods ended December 31, 2014 are not necessarily indicative of the results that may be expected for the year ending March 31, 2015.

These consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in the FLASR’S audited financial statements for the year ended March 31, 2014, attached as Exhibit 99.1 to the Form 8-K filed with the SEC on September 18, 2014.

The Company's financial statements are prepared using US GAAP applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has limited operating history and a working capital deficit. These factors raise substantial doubt about the Company's ability to continue as a going concern.

The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations. In order to continue as a going concern, the Company will need, among other things, additional capital resources. 

Management plans to raise money by selling stock, and expects additional cash flows from sales in future periods. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Stock Purchase

On July 23, 2014, pursuant to a stock purchase agreement with Language Arts, Mr. Everett Dickson and FLASR, Mr. Dickson consummated the purchase of 6,000,000 (pre-split, as described below) shares of common stock, par value $0.001 per share, of the Language Arts from Maria del Pilar Jaen which represented 63.15% of the issued and outstanding shares of Language Arts on a fully diluted basis. The purchase price for the shares of $30,000 is payable by Mr. Dickson to Ms. Jaen on January 23, 2015.

Effective July 23, 2014, in connection with the closing of the stock purchase agreement, Ms. Jaen resigned as the sole officer and director of Language Arts and Mr. Dickson was appointed President, Chief Executive Officer, Chief Financial Officer and sole director of Language Arts. Mr. Dickson took control with the intention of merging FLASR into Language Arts. 

Stock Split, Equity Transactions, and Reorganization

On July 30, 2014, Language Arts’ board of directors approved the implementation of a stock dividend payment, effective on September 22, 2014, in the form of a 1:6 forward stock split whereby each holder of record on August 28, 2014 of the 9,500,000 issued and outstanding shares of common stock automatically received shares at the rate of 1 for 5, without any action on the part of the stockholders. Accordingly, there were an additional 47,500,000 shares of common stock issued and outstanding on the said date.

Effective September 22, 2014, Language Arts, having amended and restated its articles of incorporation with the Secretary of State of Nevada; (i) changed its name to FLASR, Inc.; (ii) increased the amount of authorized shares of common stock from 75,000,000 to 150,000,000; and (iii) authorized the issuance of 5,000,000 shares of blank check preferred stock. In addition, Language Arts changed its ticker symbol from “LGUA” to "FLSR".

FLASR Acquisition

On September 16, 2014, Language Arts acquired all of the outstanding capital stock (the “Shares”) of FLASR pursuant to a stock purchase agreement with FLASR and its sole stockholder Everett Dickson. As a result, FLASR became a wholly owned subsidiary of Language Arts.

In exchange for the Shares, Language Arts issued an aggregate of 50,000,000 shares (post-split) of its common stock to Mr. Dickson, resulting in Mr. Dickson owning 80.4% of the 107,000,000 issued and outstanding share capital of Language Arts (after adjusting for the 1:6 forward stock split as described above).

Reverse Capitalization

The acquisition of FLASR by Language Arts was treated as a reverse capitalization, with FLASR deemed the accounting acquirer and Language Arts deemed the accounting acquiree under the purchase method of accounting. The reverse merger is deemed a recapitalization and the accompanying financial statements represent the continuation of the financial statements of FLASR (the accounting acquirer/legal subsidiary) except for its capital structure, and the accompanying financial statements reflect the assets and liabilities of FLASR recognized and measured at their carrying value before the combination and the assets and liabilities of Language Arts (the legal acquiree/legal parent). The equity structure reflects the equity structure of Language Arts, the legal parent, and the equity structure of FLASR, the accounting acquirer, as restated to reflect the number of shares of the legal parent. The merged entity is referred to herein as “the Company”. 

The following table reflects the net change in authorized, issued and outstanding shares of common and preferred stock of Language Arts, FLASR and the Company as a result of the reverse capitalization (as described in Note 2):

* The Company's post reverse capitalization share balances. The par value on ending common and preferred shares is $0.001.

Issuance of Common Shares During Third Quarter of 2015

On November 19, 2014, the company in consideration for services previously rendered, the company issued an additional 5,350,000 common shares to third party investors. The shares were valued at the market price on the respective dates of issuance, and the fair value of the shares was determined to be $2,942,500 and is recorded as stock base compensation for the nine months ended December 31, 2014. The common shares issued and outstanding totaled 112,350,000 on December 31, 2014.

The Company owns the FLASR trademark, which is used to market its products. As of December 31st, 2014 and March 31, 2014, the total capitalized cost related to our trademark was $4,837 and $4,678, net of accumulated amortization of $288 and $164, respectively. Management determined that trademark has a 10 year useful life and it is being amortized over this period using the straight-line method.

Loans from shareholders represents a net short term payable that resulted from operating activities between the FLASR, the Company and Everett Dickson, FLASR’s founder and primary shareholder, and EMDI, LLC., FLASR’s affiliate owned 100% by Everett Dickson.

As of December 31, 2014 and March 31, 2014, the Company and FLASR, respectively, had outstanding notes payable to related parties of $168,599 and $248,864, respectively. These notes are unsecured, payable upon demand and have no stated interest rate.

During the first quarter of 2015, the Company incurred in a notes payable with a third party for $50,000, 12% of interest rate and maturity date of March, 10, 2015.

During the second quarter of 2015, the Company incurred in a note payable with a third party for $75,000, 10% of interest rate and maturity date of September 2, 2015.

During the second quarter of 2015, the Company repaid $5,000 outstanding on FLASR’s note payable with a third party.

During the third quarter of 2015, the Company incurred in a note payable with a third party for $75,000, 10% of interest rate and maturity date of April 29, 2015.

During the third quarter of 2015, the Company incurred in a note payable with a third party for $20,000, 10% of interest rate and maturity date of October 7, 2015.

During the third quarter of 2015, the Company incurred in a note payable with a third party for $55,000, 10% of interest rate and maturity date of October 13, 2015.

During the third quarter of 2015, the Company incurred in a note payable with a third party for $75,000, 10% of interest rate and maturity date of December 10, 2015.

During the third quarter of 2015, the Company incurred in a note payable with a third party for $75,000, 10% of interest rate and maturity date of December 18, 2015.

During the third quarter of 2015, the Company repaid $14,000 outstanding on FLASR’s note payable with a third party.

The following table reflects the net change in authorized, issued and outstanding shares of common and preferred stock of Language Arts, FLASR and the Company as a result of the reverse capitalization (as described in Note 2):