##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-QSB
 QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
 Commission File # 0-33473
 MOLIRIS CORP.
  FLORIDA
    
    06-1655695(State or other jurisdiction
    
    (IRS Employer Identification Number)of incorporation or organization)
 4710 KINGSWAY, SUITE 1424
BURNABY, BC, CANADA V5H 4M2
 (604) 628-8900
 None
 Common Stock, $0.001 Par Value
 þ o
  ̈ þ
 
   ̈ þ




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##### 



MOLIRIS CORP.
 FORM 10-QSB
 Table of Contents
  
 PART I  FINANCIAL INFORMATIONItem 1  Financial Statements
    4Item 2  Managements Discussion and Analysis or Plan of Operation
    16Item 3  Controls and Procedures
    21PART II  OTHER INFORMATIONItem 1  Legal Proceedings
    23Item 2  Unregistered Sales of Equity Securities and Use of Proceeds
    23Item 3  Defaults upon Senior Securities
    23Item 4  Submission of Matters to a Vote of Security Holders
    24Item 5  Other Information
    24Item 6  Exhibits and Reports on Form 8-K
    24SIGNATURES
    25Certification of Principal Executive OfficerCertification of Principal Financial OfficerCertifications of Principal Executive and Financial OfficerCertification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO Pursuant to Section 906Certification of CFO Pursuant to Section 906
  2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
   Page No.Consolidated Balance Sheet at March 31, 2006 (unaudited)
    
    
    4Consolidated Statements of Operations (unaudited) for the three months ended March 31, 2006 and 2005
    
    
    5Consolidated Statement of Cash Flows (unaudited) for the three months ended March 31, 2006 and 2005
    
    
    6Notes to Financial Statements
    
    
    7-15
 3




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MOLIRIS CORP.
(A Development Stage Corporation)
 
 CONSOLIDATED BALANCE SHEET
 (Unaudited)
 March 312006ASSETSCash and cash equivalents
    
    $
    42,291Other receivable
    
    
    11,860Inventories
    
    
    5,228Prepaid expenses
    
    
    107,669Total current assets
    
    
    167,048Leasehold Improvements, Software and Equipment, Net of
accumulated depreciations of $150,508
    
    
    1,452,902TOTAL ASSETS
    
    $
    1,619,950LIABILITIES AND STOCKHOLDERS DEFICITLIABILITIESAccounts payable
    
    
    882,506Notes payable in default
    
    
    233,655Guarantee of bank note payable in default
    
    
    138,451Accrued expenses
    
    
    714,828Shares subscriptions liabilities
    
    
    40,000Due to Related Parties
    
    
    194,974Loans from shareholders
    
    
    509,365Total current liabilities
    
    
    2,713,779COMMITMENTS AND CONTINGENCIESSTOCKHOLDERS DEFICITCommon stock, $0.001 par value, (2004: $2.02 par value),
50,000,000 (2004: 2,000) shares authorized:22,653,600 issued and outstanding at March 31, 2006 and
100 issued and outstanding at March 31, 2005
    
    
    22,653Class B common stock, no par value, 1,000,000 shares authorized:none issued and outstanding
    
    
    Additional paid in capital
    
    
    1,853,742Accumulated other comprehensive income (loss)
    
    
    36,393Deficit accumulated during the development stage
    
    
    (3,006,617
    )TOTAL STOCKHOLDERS DEFICIT
    
    
    (1,093,829
    )TOTAL LIABILITIES AND STOCKHOLDERS DEFICIT
    
    $
    1,619,950
  4




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MOLIRIS CORP.
(A Development Stage Corporation)
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (Unaudited)
 Cumulative PeriodThree Month
    
    
    Three Month
    
    
    from InceptionEnded
    
    
    Ended
    
    
    (Sept. 9, 2004) toMarch 31, 2006
    
    
    March 31, 2005
    
    
    Mar 31, 2006OPERATING EXPENSES:Accounting and Audit
    
    $
    19,362
    
    
    $
    
    
    
    $
    211,521Salaries, wages and commissions
    
    
    194,559
    
    
    
    
    
    
    
    424,362General and administrative
    
    
    96,488
    
    
    
    69,913
    
    
    
    714,227Legal
    
    
    105,260
    
    
    
    16,034
    
    
    
    462,881Rent
    
    
    41,360
    
    
    
    
    
    
    
    92,137Depreciation
    
    
    47,163
    
    
    
    
    
    
    
    150,511Sales and Marketing
    
    
    106,829
    
    
    
    
    
    
    
    584,799Research and development
    
    
    108
    
    
    
    
    
    
    
    239,308Travel
    
    
    18,138
    
    
    
    13,279
    
    
    
    196,063TOTAL OPERATING EXPENSES
    
    
    629,267
    
    
    
    99,226
    
    
    
    3,075,809LOSS BEFORE OTHER INCOME (EXPENSE)
    
    
    (629,267
    )
    
    
    (99,226
    )
    
    
    (3,075,809
    )OTHER INCOME (EXPENSE):Interest expense
    
    
    (1,940
    )
    
    
    
    
    
    
    (7,837
    )Interest income
    
    
    23
    
    
    
    9
    
    
    
    175Foreign currency Gain/(Loss)
    
    
    
    
    
    
    311
    
    
    
    (3,681
    )Gain on settlement of liabilities
    
    
    
    
    
    
    
    
    
    
    80,536TOTAL OTHER INCOME (EXPENSE)
    
    
    (1,917
    )
    
    
    320
    
    
    
    69,193LOSS FROM OPERATIONS
    
    
    (631,184
    )
    
    
    (98,906
    )
    
    
    (3,006,616
    )Income tax expenses
    
    
    
    
    
    
    
    
    
    
    NET (LOSS)
    
    $
    (631,184
    )
    
    $
    (98,906
    )
    
    $
    (3,006,616
    )NET (LOSS) PER SHARE  BAISC and DILUTED:Net (Loss)
    
    $
    (0.03
    )
    
    $
    (0.01
    )WEIGHTED AVERAGE NUMBER OF COMMON SHARES: BASIC and DILUTED
    
    
    22,550,933
    
    
    
    12,347,400
  5




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MOLIRIS CORP.
(A Development Stage Company)
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)
 Cumulative PeriodThree months
    
    
    Three months
    
    
    from InceptionEnded
    
    
    Ended
    
    
    (Sep. 9, 2004) toMarch 31, 2006
    
    
    March 31, 2005
    
    
    March 31, 2006CASH FLOWS FROM OPERATING ACTIVITIES:Net loss
    
    $
    (631,184
    )
    
    $
    (98,906
    )
    
    $
    (3,006,616
    )Adjustments to reconcile net loss to net cash provided by (used
in) operating activities:Depreciation
    
    
    47,163
    
    
    
    
    
    
    
    150,508Common Stock issued for services rendered
    
    
    
    
    
    
    
    
    
    
    5,200Changes in operating assets and liabilities:Accounts receivable
    
    
    44,262
    
    
    
    (4,465
    )
    
    
    959,515Inventories
    
    
    (1,608
    )
    
    
    (4,465
    )
    
    
    (5,228
    )Prepaid & other current assets
    
    
    (41,690
    )
    
    
    (24,474
    )
    
    
    (83,304
    )Accounts payable
    
    
    (9,957
    )
    
    
    11,478
    
    
    
    373,374Accrued expenses
    
    
    10,938
    
    
    
    15,209
    
    
    
    (1,894
    )Due to related party
    
    
    
    
    
    
    11,096
    
    
    
    (27,502
    )NET CASH PROVIDED (USED) BY CONTINUING OPERATING ACTIVITIES
    
    
    (582,076
    )
    
    
    (94,886
    )
    
    
    (1,635,947
    )CASH FLOW FROM INVESTING ACTIVITIESPurchase of Leasehold improvements, software and equipment
    
    
    (203,612
    )
    
    
    (180,303
    )
    
    
    (1,603,410
    )Payable from Purchase of Property and Equipment
    
    
    
    
    
    
    
    
    
    
    59,282NET CASH (USED) IN INVESTING ACTIVITIES
    
    
    (203,612
    )
    
    
    (180,303
    )
    
    
    (1,544,128
    )CASH FLOWS FROM FINANCING ACTIVITIESIssuance of common stock, for cash
    
    
    541,400
    
    
    
    
    
    
    
    2,636,608Subscription of common stock
    
    
    (40,000
    )
    
    
    
    
    
    
    (40,000
    )Proceeds from loan
    
    
    220,882
    
    
    
    278,533
    
    
    
    509,365NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES
    
    
    802,282
    
    
    
    278,533
    
    
    
    3,185,973Effect of Foreign currency translation on cash and cash equivalents
    
    
    (7,023
    )
    
    
    (6,005
    )
    
    
    36,393NET INCREASE (DECREASE) IN CASH
    
    
    9,571
    
    
    
    (2,661
    )
    
    
    42,291CASH AT BEGINNING OF PERIOD
    
    
    32,720
    
    
    
    5,092
    
    
    
    0CASH AT END OF PERIOD
    
    $
    42,291
    
    
    $
    2,431
    
    
    $
    42,291SUPPLEMENTAL CASH FLOW DISCLOSURES:Cash paid during the period for:Interest
    
    $
    1,940
    
    
    $
    
    
    
    $
    7,992Non-cash investing and financing activities:Liabilities assumed, reverse merger
    
    $
    
    
    
    $
    
    
    
    $
    765,413Common shares issued for services
    
    $
    
    
    
    $
    
    
    
    $
    5,200
  6




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MOLIRIS CORP.
(A Development Stage Company)
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2006
 NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Organization
      Principles of Consolidation
  Basis of Presentation
  7




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MOLIRIS CORP.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2006
 NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
  NOTE 2: SIGNIFICANT ACCOUNTING POLICIES
 Nature of Business
  Income Taxes
  Use of Estimates and Assumptions
  Accounts Receivable
   Software Development
  Inventories
  8




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MOLIRIS CORP.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2006
 NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 Leasehold Improvements, Software and Equipment
  Furniture and fixtures
    
    
    20
    %Computers
    
    
    33
    %Nodes
    
    
    33
    %Equipment
    
    
    20
    %Software
    
    
    100
    %Capitalized software (1)
    
    
    20
    %
 
 (1)
    
    No provision for depreciation is taken until the assets are put into use. Impairment of Long-Lived Assets
  Foreign Exchange Translation
   Fair Value of Financial Instruments
  9




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MOLIRIS CORP.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2006
 NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 Environmental Matters
  Revenue Recognition
  Loss per Common Share
  Accumulated Other Comprehensive Income
  Recent Accounting Pronouncements
   10




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MOLIRIS CORP.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2006
 NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
  NOTE 3: GOING CONCERN
  NOTE 4: LEASEHOLD IMPROVEMENTS, SOFTWARE AND EQUIPMENT
  March 31,2006Leasehold improvements
    
    $
    150,316Furniture & fixtures
    
    
    18,028Computers
    
    
    85,194Software
    
    
    57,683Capitalized Software
    
    
    776,987Equipment
    
    
    252,251Nodes
    
    
    262,9521,603,410Accumulated Depreciations
    
    
    (150,508
    )$
    1,452,902
  11




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MOLIRIS CORP.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2006
 NOTE 4: LEASEHOLD IMPROVEMENTS, SOFTWARE AND EQUIPMENT (CONTINUED)
  NOTE 5: STOCKHOLDERS EQUITY AND STOCK TRANSACTIONS
  
    
    50,000,000 shares of our common stock with par value of $.001 (2004: 2,000 shares
with par value of $2.02 each).
    
    1,000,000 shares of our Class B common stock with no par value.
  AdditionalNumber
    
    
    
    
    
    
    Paid InIssued
    
    
    Par Value
    
    
    Capital
    
    
    TotalSeptember 9, 2004 (date of inception) and
December 31, 2004
    
    
    100
    
    
    $
    202
    
    
    $
    38,506
    
    
    $
    38,708Reverse capitalization and share exchange
with Digifonica
    
    
    20,740,300
    
    
    
    20,538
    
    
    
    (785,951
    )
    
    
    (765,413
    )Post acquisition balance  Dec. 31, 2004
    
    
    20,740,400
    
    
    
    20,740
    
    
    
    (747,445
    )
    
    
    (726,705
    )March 30, 2005 private placement for cash
issued on November 29, 2005
    
    
    581,000
    
    
    
    581
    
    
    
    289,919
    
    
    
    290,500September 12, 2005 private placement for cash
    
    
    19,000
    
    
    
    19
    
    
    
    28,481
    
    
    
    28,500October 14, 2005 private placement for cash
    
    
    970,000
    
    
    
    970
    
    
    
    1,696,530
    
    
    
    1,697,500October 18, 2005 compensation for services
rendered on March 9, 2005; valued at $5,200
    
    
    520,000
    
    
    
    520
    
    
    
    4,680
    
    
    
    5,200November 16, 2005 Cancellation of Mycobis
transaction
    
    
    (520,000
    )
    
    
    (520
    )
    
    
    520
    
    
    
    November 23, 2005 private placement for
cash, issued March 2006
    
    
    20,000
    
    
    
    20
    
    
    
    39,980
    
    
    
    40,000Balance at December 31, 2005
    
    
    22,330
    
    
    
    22,330
    
    
    
    1,312,665
    
    
    
    1,334,995March 16, 2006 private placement for cash
with warrants
    
    
    218,200
    
    
    
    218
    
    
    
    436,182
    
    
    
    436,400March 29 and 30, 2006 warrants exercised at
$1.00 each
    
    
    105,000
    
    
    
    105
    
    
    
    104,895
    
    
    
    105,000Total
    
    
    22,653,600
    
    
    $
    22,653
    
    
    $
    1,853,742
    
    
    $
    1,876,395
 12




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MOLIRIS CORP.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2006
 NOTE 6: STOCKHOLDERS EQUITY AND STOCK TRANSACTIONS (CONTINUED)
          th th
  Number ofWarrants
    
    Exercise Price
    
    Expiry Date300,000
    
    
    $
    1.00
    
    
    April 17, 2006150,500
    
    
    $
    1.00
    
    
    November 29, 200697,000
    
    
    $
    2.30
    
    
    May 11, 2006167,500
    
    
    $
    2.30
    
    
    May 11, 2007485,000
    
    
    $
    2.30
    
    
    October 10, 2007119,100
    
    
    $
    3.00
    
    
    March 16, 20081,319,100
   NOTE 7: LEASE COMMITMENTS
  13




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MOLIRIS CORP.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2006
 NOTE 7: LEASE COMMITMENTS (CONTINUED)
  Year
    
    Amount2006
    
    $
    64,6752007
    
    
    86,2332008
    
    
    86,2332009
    
    
    86,233$
    323,374
 NOTE 8: COMMITMENTS CONTINGENCIES & LITIGATION
       DIL Yinbo JV Company
  14




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MOLIRIS CORP.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2006
 NOTE 9: SUBSEQUENT EVENTS
    15




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.
       16




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GENERAL
      OVERVIEW OF COMPANY
   CRITICAL ACCOUNTING ESTIMATES AND POLICIES
  17




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GOING CONCERN
  GUARANTEE OF NOTE PAYABLE
   18




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##### Table of Contents



RESULTS OF OPERATIONS
  Cumulative PeriodThree Month
    
    
    Three Month
    
    
    from InceptionEnded
    
    
    Ended
    
    
    (Sept. 9, 2004) toMarch 31, 2006
    
    
    March 31, 2005
    
    
    Mar 31, 2006OPERATING EXPENSES:Accounting and Audit
    
    $
    19,362
    
    
    $
    
    
    
    $
    211,521Salaries, wages and commissions
    
    
    194,559
    
    
    
    
    
    
    
    424,362General and administrative
    
    
    96,488
    
    
    
    69,913
    
    
    
    714,227Legal
    
    
    105,260
    
    
    
    16,034
    
    
    
    462,881Rent
    
    
    41,360
    
    
    
    
    
    
    
    92,137Depreciation
    
    
    47,163
    
    
    
    
    
    
    
    150,511Sales and Marketing
    
    
    106,829
    
    
    
    
    
    
    
    584,799Research and development
    
    
    108
    
    
    
    
    
    
    
    239,308Travel
    
    
    18,138
    
    
    
    13,279
    
    
    
    196,063TOTAL OPERATING EXPENSES
    
    
    629,267
    
    
    
    99,226
    
    
    
    3,075,809LOSS BEFORE OTHER INCOME (EXPENSE)
    
    
    (629,267
    )
    
    
    (99,226
    )
    
    
    (3,075,809
    )OTHER INCOME (EXPENSE):Interest expense
    
    
    (1,940
    )
    
    
    
    
    
    
    (7,837
    )Interest income
    
    
    23
    
    
    
    9
    
    
    
    175Foreign currency Gain/(Loss)
    
    
    
    
    
    
    311
    
    
    
    (3,681
    )Gain on settlement of liabilities
    
    
    
    
    
    
    
    
    
    
    80,536TOTAL OTHER INCOME (EXPENSE)
    
    
    (1,917
    )
    
    
    320
    
    
    
    69,193LOSS FROM OPERATIONS
    
    
    (631,184
    )
    
    
    (98,906
    )
    
    
    (3,006,616
    )Income tax expenses
    
    
    
    
    
    
    
    
    
    
    NET (LOSS)
    
    $
    (631,184
    )
    
    $
    (98,906
    )
    
    $
    (3,006,616
    )
 19




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##### Table of Contents



THREE MONTHS ENDED MARCH 31, 2006 AND 2005
         LIQUIDITY AND CAPITAL RESOURCES
     20




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SHORT-TERM DEBT
  $200,000 note payable, dated Oct. 28, 2003, bearing interest
at zero percent per annum, payable monthly with final payment
due Sept. 1, 2008, in default since December 31, 2004
    
    $
    178,500$32,265 note payable, dated Dec. 12, 2001, bearing interest
at 5.9% per annum, payable monthly with final payment due
Dec. 12, 2006, net of repossession value, in default since
December 31, 2004
    
    
    4,766$18,013 note payable, dated October 1, 2004, bearing interest
at 4% per annum, payable monthly with final payment due April
1, 2006 in default since December 31, 2004
    
    
    17,889$27,500 note payable, dated November 19, 2004, bearing
interest at 12.0% per annum, payable monthly with final
payment due February 19, 2005, in default since December 31,
2004
    
    
    27,500$5,000 note payable, dated November 19, 2004, bearing
interest at 12.0% per annum, payable monthly with final
payment due February 19, 2005, in default since December 31,
2004
    
    
    5,000Total
    
    $
    233,655Loan from Shareholders are payable on demand with no specific term, no interest and unsecured
    
    $
    509,365SHORT-Term Debt Plus Shareholder Loans Total
    
    $
    743,020
 LONG-TERM DEBT
  LIQUIDITY
    
 ITEM 3. EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES.
  21




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22




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PART II
 
 ITEM 1. LEGAL PROCEEDINGS
     
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
   
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
     23




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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
  
 ITEM 5. OTHER INFORMATION
  
 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
  Exhibit
    
    Description31.1
    
    Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    Certification of Principal Executive pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.1
    
    Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
   24




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SIGNATURES
  Moliris Corp.A Florida corporationDate: June 8, 2006
    
    /s/ Michael BowermanMichael Bowerman, PresidentPrincipal Executive Officer/s/ Benjamin TamBenjamin TamPrincipal Financial Officer
 25