UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



☑QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June
30, 2012



☐TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934

For the transition period from ______
to _______



Commission file number: 333-152952



MOBILE STAR CORP.

(Exact name of registrant as specified
in its charter)



|Delaware                                                       | 98-0565411                
|-------------------------------------------------------------- | --------------------------
|(state or other jurisdiction of incorporation or organization) | (I.R.S. Employer I.D. No.)





|c/o George Ivakhnik 433 N. Camden Dr., Fourth Floor Beverly Hills, CA. 90210
|----------------------------------------------------------------------------
|(Address of principal executive offices)                                    



310-279-5282(Issuer's telephone number)





Indicate by check mark whether
the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.

☑Yes☐No



Indicate by check mark whether
the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post such files).

☐Yes☐
No (Not required)



Indicate by check mark whether
the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company"
in Rule 12b-2 of the Exchange Act.



Large Accelerated Filer	☐
Accelerated Filer☐



Non-Accelerated Filer 	☐Smaller Reporting Company☑







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

☐  Yes☑No



As of June 30, 2012, there were 22,161,278shares
of the registrant’s $0.0001 par value common stock issued and outstanding.









MOBILE STARE CORP.

TABLE OF CONTENTS



|                                  |  |                                                                                               |  | PAGE
|--------------------------------- |  | --------------------------------------------------------------------------------------------- |  | ----
|PART I                            |  | FINANCIAL INFORMATION                                                                         |  |     
|ITEM 1.                           |  | FINANCIAL STATEMENTS                                                                          |  |     
|ITEM 2.                           |  | MANAGEMENT’S DISCUSSION AND ANALYSIS
        OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |  |     
|ITEM 3.                           |  | QUANTITATIVE AND QUALITATIVE DISCLOSURES
        ABOUT MARKET RISK                            |  |     
|ITEM 4.                           |  | CONTROLS AND PROCEDURES                                                                       |  |     
|PART II                           |  | OTHER INFORMATION                                                                             |  |     
|                                  |  |                                                                                               |  |     
|ITEM 1.
        
        ITEM 1A. |  | LEGAL PROCEEDINGS
        
        RISK FACTORS                                               |  |     
|ITEM 2.                           |  | UNREGISTERED SALES OF EQUITY SECURITIES
        AND USE OF PROCEEDS                           |  |     
|ITEM 3.                           |  | DEFAULTS UPON SENIOR SECURITIES                                                               |  |     
|ITEM 4.                           |  | [REMOVED AND RESERVED]                                                                        |  |     
|ITEM 5.                           |  | OTHER INFORMATION                                                                             |  |     
|ITEM 6.                           |  | EXHIBITS                                                                                      |  |     



Special Note Regarding
Forward-Looking Statements



Information
included in this Form 10-Q contains forward-looking statements that may involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or achievements ofMobile Star Corp.(the “Company”), to be materially different from future results, performance or achievements expressed or implied by
any forward-looking statements. Forward-looking statements, which involve assumptions and describe future plans, strategies and
expectations of the Company, are generally identifiable by use of the words “may,” “will,” “should,”
“expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project”
or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are
based on assumptions that may be incorrect, and there can be no assurance that these projections included in these forward-looking
statements will come to pass. Actual results of the Company could differ materially from those expressed or implied by the forward-looking
statements as a result of various factors. Except as required by applicable laws, the Company has no obligation to update publicly
any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.



*Please note that throughout this Quarterly Report, and
unless otherwise noted, the words "we," "our," "us," the "Company," or "MBST"
refers to Mobile Star Corp.PART I - FINANCIAL INFORMATION



ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS









INDEX TO FINANCIAL STATEMENTS

JUNE 30, 2012





|Financial Statements-                                                      |    
|-------------------------------------------------------------------------- | ---
|                                                                           |    
|Balance Sheets as of June 30, 2012 and December 31, 2011                   | F-1
|                                                                           |    
|Statements of Operations for the Three Months and Six Months Ended         |    
|June 30, 2012, and 2011 and Cumulative from Inception                      | F-2
|                                                                           |    
|Statements of Cash Flows for the Six Months Ended June 30, 2012 and        |    
|2011 And Cumulative from Inception                                         | F-3
|                                                                           |    
|Statement of Changes in Stockholders’ Equity for the Period from Inception |    
|Through June 30, 2012                                                      | F-4
|                                                                           |    
|Notes to Financial Statements                                              | F-5



















MOBILE STAR CORP.

(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEETS

AS OF JUNE 30, 2012 AND DECEMBER 31,
2011







|                                                                
|----------------------------------------------------------------
|                                                                
|ASSETS                                                          
|                                                                
|                                                                
|                                                                
|                                                                
|Current Assets:                                                 
|Cash and cash equivalents                                       
|Prepaid expenses                                                
|                                                                
|Total current assets                                            
|                                                                
|Other Assets:                                                   
|Patent pending                                                  
|Assignment of invention rights                                  
|                                                                
|Total other assets                                              
|                                                                
|Total Assets                                                    
|                                                                
|LIABILITIES AND STOCKHOLDERS' (DEFICIT)                         
|                                                                
|Current Liabilities:                                            
|Accounts payable and accrued liabilities                        
|Loans from related parties - Directors and stockholders         
|Convertible notes payable, net of discount                      
|                                                                
|Total current liabilities                                       
|                                                                
|Total liabilities                                               
|                                                                
|Commitments and Contingencies                                   
|                                                                
|Stockholders' Equity (Deficit):                                 
|Series B preferred convertible stock, par value $.001 per share,
|0 shares issued and outstanding                                 
|Common stock, par value $.0001 per share, 1,000,000,000 shares  
|authorized; 22,161,278 and 752,320 shares                       
|issued and outstanding, respectively                            
|Additional paid-in capital                                      
|Stock subscriptions receivable                                  
|(Deficit) accumulated during the development stage              
|                                                                
|Total stockholders' equity (deficit)                            
|                                                                
|Total Liabilities and Stockholders' Equity (Deficit)            
|                                                                







The accompanying notes to financial
statements are an integral part of these statements.



F-1







MOBILE STAR CORP.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS AND SIX MONTHS
ENDED JUNE 30, 2012 AND 2011

AND CUMULATIVE FROM INCEPTION (SEPTEMBER
25, 2007)

THROUGH JUNE 30, 2012

(Unaudited)







|                                           
|-------------------------------------------
|                                           
|                                           
|                                           
|                                           
|                                           
|                                           
|                                           
|Revenues                                   
|                                           
|Expenses:                                  
|Research and development                   
|Professional fees                          
|Consulting fees                            
|Management fees                            
|Investor relations                         
|Legal - incorporation                      
|Director fees                              
|Travel                                     
|Other                                      
|                                           
|Total general and administrative expenses  
|                                           
|(Loss) from Operations                     
|                                           
|Other Income (Expense)                     
|Foreign currency transaction gains         
|Foreign currency transaction losses        
|Interest expense                           
|Other income (expense)                     
|                                           
|Provision for Income Taxes                 
|                                           
|                                           
|Net (Loss)                                 
|                                           
|(Loss) Per Common Share:                   
|(Loss) per common share - Basic and Diluted
|                                           
|Weighted Average Number of Common Shares   
|Outstanding - Basic and Diluted            
|                                           





The accompanying notes to financial
statements are an integral part of these statements.



F-2





MOBILE STAR CORP.

(A DEVELOPMENT STAGE COMPANY)

CONDENSED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2012
AND 2011,

AND CUMULATIVE FROM INCEPTION (SEPTEMBER
25, 2007)

THROUGH JUNE 30, 2012

(Unaudited)







|                                                                          
|--------------------------------------------------------------------------
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Operating Activities:                                                     
|Net (loss)                                                                
|Adjustments to reconcile net (loss) to net cash                           
|(used in) operating activities:                                           
|Common stock issued for services                                          
|Amortization of beneficial conversion feature                             
|Changes in net assets and liabilities-                                    
|Prepaid expenses                                                          
|Accounts payable and accrued liabilities                                  
|                                                                          
|Net Cash Used in Operating Activities                                     
|                                                                          
|Investing Activities:                                                     
|Purchase of patent pending                                                
|                                                                          
|Net Cash Used in Investing Activities                                     
|                                                                          
|Financing Activities:                                                     
|Proceeds from common stock issued                                         
|Proceeds from convertible note payable                                    
|Payments of shareholder loans                                             
|Proceeds from shareholder loans                                           
|                                                                          
|Net Cash Provided by Financing Activities                                 
|                                                                          
|Net (Decrease) Increase in Cash                                           
|                                                                          
|Cash - Beginning of Period                                                
|                                                                          
|Cash - End of Period                                                      
|                                                                          
|Supplemental Disclosure of Cash Flow Information:                         
|Cash paid during the period for:                                          
|Interest                                                                  
|Income taxes                                                              
|                                                                          
|Supplemental schedule of non-cash investing and financing activities:     
|Assignment of invention rights acquired through additional paid-in capital
|Stock issued to settle shareholder loans                                  
|Stock issued to settle convertible debts and interest                     
|                                                                          











The accompanying notes to financial
statements are an integral part of these statements.

F-3





MOBILE STAR CORP.

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF CHANGES IN STOCKHOLDERS'
EQUITY (DEFICIT)

FOR THE PERIOD FROM INCEPTION (SEPTEMBER
25, 2007)

THROUGH JUNE 30, 2012

(Unaudited)





|                                                        |            |   |                  |   |              |   |                    |   |                |   |                 |  | 
|------------------------------------------------------- | ---------- | - | ---------------- | - | ------------ | - | ------------------ | - | -------------- | - | --------------- |  | 
|                                                        |            |   |                  |   |              |   |                    |   |                |   |                 |  | 
|                                                        |            |   |                  |   |              |   |                    |   |                |   | (Deficit)       |  | 
|                                                        |            |   |                  |   |              |   |                    |   |                |   | Accumulated     |  | 
|                                                        |            |   |                  |   |              |   | Additional         |   | Stock          |   | During the      |  | 
|                                                        |            |   | Common stock     |   | Paid-in      |   | Subscriptions      |   | Development    |   |                
|                                                        | Shares     |   | Amount           |   | Capital      |   | Receivable         |   | Stage          |   | Totals         
|                                                        |            |   |                  |   |              |   |                    |   |                |   |                 |  | 
|                                                        |            |   |                  |   |              |   |                    |   |                |   |                 |  | 
|Balance - January 1, 2008                               | -          | $ | -                | $ | -            | $ | -                  | $ | -              | $ | -              
|Common stock issued for cash                            | 112,000    |   | 11               |   | 789          |   | -                  |   | -              |   | 800            
|Assignment of invention rights                          | -          |   | -                |   | 5,000        |   | -                  |   | -              |   | 5,000          
|Net (loss) for the year                                 | -          |   | -                |   | -            |   | -                  |   | (18,019)       |   | (18,019)       
|Balance - December 31, 2008                             | 112,000    |   | 11               |   | 5,789        |   | -                  |   | (18,019)       |   | (12,219)       
|Common stock issued for cash                            | 28,000     |   | 3                |   | 159,997      |   | -                  |   | -              |   | 160,000        
|Net (loss) for the period                               | -          |   | -                |   | -            |   | -                  |   | (154,818)      |   | (154,818)      
|Balance - December 31, 2009                             | 140,000    | $ | 14               | $ | 165,786      | $ | -                  | $ | (172,837)      | $ | (7,037)        
|Common stock issued as compensation                     | 20,000     |   | 2                |   | 24,998       |   | -                  |   | -              |   | 25,000         
|Convertible note discount                               | -          |   | -                |   | 24,545       |   | -                  |   |                |   | 24,545         
|Convertible note discount                               | -          |   | -                |   | 22,091       |   | -                  |   |                |   | 22,091         
|Net (loss) for the period                               | -          |   | -                |   | -            |   | -                  |   | (150,787)      |   | (150,787)      
|Balance - December 31, 2010                             | 160,000    | $ | 16               | $ | 237,420      | $ | -                  | $ | (323,624)      | $ | (86,188)       
|Common stock issued to extinguish debt                  | 24,000     |   | 2                |   | 48,998       |   | -                  |   | -              |   | 49,000         
|Common stock issued upon conversion of convertible debt | 148,320    |   | 15               |   | 77,222       |   | -                  |   | -              |   | 77,237         
|Convertible note discount                               | -          |   | -                |   | 55,227       |   | -                  |   | -              |   | 55,227         
|Common stock issued as compensation                     | 60,000     |   | 6                |   | 25,494       |   | -                  |   | -              |   | 25,500         
|Common stock issued as compensation                     | 360,000    |   | 36               |   | 107,964      |   | -                  |   | -              |   | 108,000        
|Net (loss) for the period                               | -          |   | -                |   | -            |   | -                  |   | (305,245)      |   | (305,245)      
|Balance - December 31, 2011                             | 752,320    |   | $             75 |   | $    552,325 |   | $                - |   | $    (628,869) |   | $      (76,469)
|Common stock issued as compensation                     | 500,000    |   | 50               |   | 177,450      |   | -                  |   | -              |   | 177,500        
|Common stock issued upon conversion of convertible debt | 66,555     |   | 7                |   | 8,593        |   | -                  |   | -              |   | 8,600          
|Common stock issued as compensation                     | 61,228     |   | 6                |   | 894          |   | -                  |   | -              |   | 900            
|Common stock issued as compensation                     | 1,875,000  |   | 188              |   | 27,938       |   | -                  |   | -              |   | 28,126         
|Common stock issued as compensation                     | 1,875,000  |   | 188              |   | 27,937       |   | -                  |   | -              |   | 28,125         
|Common stock issued for cash                            | 16,531,175 |   | 1,653            |   | 248,347      |   | (40,000)           |   | -              |   | 210,000        
|Common stock issued as compensation                     | 500,000    |   | 50               |   | 7,450        |   | -                  |   | -              |   | 7,500          
|Net (loss) for the period                               | -          |   | -                |   | -            |   | -                  |   | (631,208)      |   | (631,208)      
|Balance - June 30, 2012                                 | 22,161,278 | $ | 2,216            | $ | 1,050,934    | $ | (40,000)           | $ | (1,260,077)    | $ | (246,926)      









The accompanying notes to financial
statements are an integral part of these statements.





F-4











Note 1-Summary
of Significant Accounting Policies



Basis of Presentation and Organization



Mobile Star Corp. (“Mobile Star”
or the “Company”) is a Delaware corporation in the development stage and has not commenced operations. The Company
was incorporated under the laws of the State of Delaware on September 25, 2007 and began activity in January 2008. The business
plan of the Company is to develop a commercial application of a self-operated computerized karaoke recording booths. The Company
also intends to obtain approval of its patent application, and manufacture and market the product and/or seek third party entities
interested in licensing the rights to manufacture and market the device. The accompanying financial statements of Mobile Star were
prepared from the accounts of the Company under the accrual basis of accounting.



Unaudited Interim Financial Statements



The interim financial statements of the
Company as of June 30, 2012, and for the periods then ended, and cumulative from inception, are unaudited. However, in the opinion
of management, the interim financial statements include all adjustments, consisting of only normal recurring adjustments, necessary
to present fairly the Company’s financial position as of June 30, 2012, and the results of its operations and its cash flows
for the periods ended June 30, 2012 and cumulative from inception. These results are not necessarily indicative of the results
expected for the calendar year ending December 31, 2012. The accompanying financial statements and notes thereto do not reflect
all disclosures required under accounting principles generally accepted in the United States. Refer to the Company’s audited
financial statements as of December 31, 2011, filed with the SEC, for additional information, including significant accounting
policies.



Cash and Cash Equivalents



For purposes of reporting within the statement
of cash flows, the Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties, and all
highly liquid debt instruments purchased with a maturity of three months or less to be cash and cash equivalents.



Revenue Recognition



The Company is in the development stage.
Once the Company has commenced operations, it will recognize revenues when delivery of goods or completion of services has occurred
provided there is persuasive evidence of an agreement, acceptance has been approved by its customers, the fee is fixed or determinable
based on the completion of stated terms and conditions, and collection of any related receivables is probable.



Loss per Common Share



Basic loss per share is computed by dividing
the net loss attributable to the common stockholders by the weighted average number of shares of common stock outstanding during
the period. Fully diluted loss per share is computed similar to basic loss per share except that the denominator is increased to
include the number of additional common shares that would have been outstanding if the potential common shares had been issued
and if the additional common shares were dilutive. Common stock equivalents were not included in the computation of diluted earnings
per share in the statement of operations due to the fact that the Company reported a net loss and to do so would be anti-dilutive
for the periods presented.



Income Taxes



Deferred tax assets and liabilities are
determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting
purposes. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets
and liabilities generating the differences.



The Company maintains a valuation allowance
with respect to deferred tax assets. The Company establishes a valuation allowance based upon the potential likelihood of realizing
the deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current
period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carry forward
period under the federal tax laws.



Changes in circumstances, such as the
Company generating taxable income, could cause a change in judgment about the realizability of the related deferred tax asset.
Any change in the valuation allowance will be included in income in the year of the change in estimate.



Fair Value of Financial Instruments



The Company estimates the fair value of
financial instruments using the available market information and valuation methods. Considerable judgment is required in estimating
fair value. Accordingly, the estimates of fair value may not be indicative of the amounts the Company could realize in a current
market exchange. As of June 30, 2012, the carrying value of accounts payable, accrued liabilities, and loans from directors and
stockholders approximated fair value due to the short-term nature and maturity of these instruments.



Patent and Intellectual Property



The Company capitalizes the costs associated
with obtaining a Patent or other intellectual property associated with its intended business plan. Such costs are amortized over
the estimated useful lives of the related assets.



Deferred Offering Costs



The Company defers the direct incremental
costs of raising capital as other assets until such time as the offering is completed. At the time of the completion of the offering,
the costs are charged against the capital raised. Should the offering be terminated, deferred offering costs are charged to operations
during the period in which the offering is terminated.



Impairment of Long-Lived Assets



The Company evaluates the recoverability
of long-lived assets and the related estimated remaining lives when events or circumstances lead management to believe that the
carrying value of an asset may not be recoverable. For the period ended June 30, 2012, no events or circumstances occurred for
which an evaluation of the recoverability of long-lived assets was required.



Common Stock Registration Expenses



The Company considers incremental costs
and expenses related to the registration of equity securities with the SEC, whether by contractual arrangement as of a certain
date or by demand, to be unrelated to original issuance transactions. As such, subsequent registration costs and expenses are expensed
as incurred.



Estimates



The financial statements are prepared
on the basis of accounting principles generally accepted in the United States. The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts
of assets, liabilities and expenses. Actual results could differ from those estimates made by management.



Recent Accounting Pronouncements



In May 2011, the FASB issued ASU 2011-04,
"Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S.
GAAP and International Financial Reporting Standards ("IFRSs")." Under ASU 2011-04, the guidance amends certain
accounting and disclosure requirements related to fair value measurements to ensure that fair value has the same meaning in U.S.
GAAP and in IFRS and that their respective fair value measurement and disclosure requirements are the same. ASU 2011-04 is effective
for public entities during interim and annual periods beginning after December 15, 2011. Early adoption is not permitted. The Company
does not believe that the adoption of ASU 2011-04 will have a material impact on the Company's results of operation and financial
condition.



In June 2011, the FASB issued ASU No.
2011-05, "Comprehensive Income (ASC Topic 220): Presentation of Comprehensive Income," ("ASU 2011-05") which
amends current comprehensive income guidance. This accounting update eliminates the option to present the components of other comprehensive
income as part of the statement of shareholders' equity. Instead, comprehensive income must be reported in either a single continuous
statement of comprehensive income which contains two sections, net income and other comprehensive income, or in two separate but
consecutive statements. ASU 2011-05 will be effective for public companies during the interim and annual periods beginning after
Dec. 15, 2011 with early adoption permitted. The Company does not believe that the adoption of ASU 2011-05 will have a material
impact on the Company's results of operation and financial condition.



There were various other updates recently
issued, most of which represented technical corrections to the accounting literature or application to specific industries.  None
of the updates are expected to a have a material impact on the Company's financial position, results of operations or cash flows.



Note 2-Development
Stage Activities and Going Concern



The Company is currently in the development
stage, and has limited operations. The business plan of the Company is to develop a commercial application of a self-operated computerized
karaoke recording booth. The Company also intends to obtain approval of its patent application, and manufacture and market the
product and/or seek third party entities interested in licensing the rights to manufacture and market the device.



In January 2008, the Company entered into
a Assignment Agreement whereby the Company acquired all of the rights, title and interest in the invention known as the “Self
operated computerized karaoke recording booth” for consideration of royalties ranging from 1% to 5% based on the net income
of the Company for 30 years from the date of the Company's incorporation. On February 20, 2008 the Company filed PCT and U.S. patent
applications for the invention.



The Company commenced a capital formation
activity to submit a Registration Statement on Form S-1 to the Securities and Exchange Commission (“SEC”) to register
and sell in a self-directed offering 28,000 (post reverse stock split) shares of newly issued common stock for proceeds of up to
$200,000. The Registration Statement on Form S-1 was filed with the SEC on August 12, 2008 and declared effective on September
8, 2008. The Company has issued 28,000 (post reverse stock split) shares of common stock pursuant to the Registration Statement
on Form S-1, and received proceeds of $200,000.



The accompanying financial statements
have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate
continuation of the Company as a going concern. The Company has limited revenue to cover its operating costs, and as such, has
incurred an operating loss since inception. Further, as of June 30, 2012, the cash resources of the Company were insufficient to
meet its current business plan. These and other factors raise substantial doubt about the Company’s ability to continue as
a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on
the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible
inability of the Company to continue as a going concern.



Note 3-Patent Pending



In January 2008, the Company entered into
an Assignment Agreement whereby the Company acquired all of the rights, title and interest in the invention known as the “Self
operated computerized karaoke recording booth” for consideration of royalties ranging from 1% to 5% based on the net income
of the Company for 30 years from the date of the Company's incorporation. On February 20, 2008 the Company filed PCT and U.S. patent
applications for the invention.



Note 4-Loans from
Related Parties - Directors and Stockholders



As of June 30, 2012, loans from related
parties amounted to $25,134, and represented working capital advances from officers who are also stockholders of the Company. The
loans are unsecured, non-interest bearing, and due on demand.



On May 23, 2012, the Company signed a $200,000
convertible promissory note with a related party.  The note bears interest at 8% per annum and was due on May 23, 2013.  The
note has conversion rights that allow the holder of the note to convert after 180 days all or any part of the remaining principal
balance into the Company’s common stock at the current trading price.



Note 5-Convertible
Notes Payable



On January 6, 2011,
the Company signed a $35,000 convertible promissory note with a third party.  The note bears interest at 8% per annum and
was due on October 10, 2011.  The note has conversion rights that allow the holder of the note to convert after 180 days all
or any part of the remaining principal balance into the Company’s common stock at a price equal to 55% of the average of
the lowest three trading prices for the Common Stock during the most recent ten day period. As ofJune 30,
2012 this note was reduced by $24,300 upon conversion to shares.



On April 11, 2011, the Company signed a $32,500
convertible promissory note with a third party.  The note bears interest at 8% per annum and was due on January 18, 2012.
 The note has conversion rights that allow the holder of the note to convert after 180 days all or any part of the remaining
principal balance into the Company’s common stock at a price equal to 55% of the average of the lowest three trading prices
for the Common Stock during the most recent ten day period.



On May 23, 2012, the Company signed a $50,000
convertible promissory note with a third party.  The note bears interest at 8% per annum and is due on May 23, 2013.  The
note has conversion rights that allow the holder of the note to convert after 180 days all or any part of the remaining principal
balance into the Company’s common stock at the current trading price.



On May 23, 2012, the Company signed a $200,000
convertible promissory note with a related party.  The note bears interest at 8% per annum and is due on May 23, 2013.  The
note has conversion rights that allow the holder of the note to convert after 180 days all or any part of the remaining principal
balance into the Company’s common stock at the current trading price.



In accordance with ASC 470, the Company has
analyzed the beneficial nature of the conversion terms and determined that a beneficial conversion feature (BCF) exists.  The
Company calculated the value of the BCF using the intrinsic method as stipulated in ASC 470. The BCF has been recorded as a discount
to the notes payable and to Additional Paid-in Capital.



As ofJune
30, 2012, the balance of convertible notes payable is $293,200.



For the period endedJune 30, 2012the Company recognized $4,120 in interest expense related to the notes and has
amortized $1,738 of the beneficial conversion features which has been recorded as interest expense.



Note 6-Common Stock



On February 4, 2008, the Company issued
112,000 (post reverse stock split) shares of its common stock to founders of the Company, some of whom were directors and officers,
for proceeds of $800.



The Company has commenced a capital formation
activity to submit a Registration Statement on Form S-1 to the SEC to register and sell in a self-directed offering 28,000 (post
reverse stock split) shares of newly issued common stock for proceeds of up to $200,000. The Registration Statement on Form S-1
was filed with the SEC on August 12, 2008 and declared effective on September 8, 2008. The Company has issued 28,000 (post reverse
stock split) shares of common stock pursuant to the Registration Statement on Form S-1, and received proceeds of $200,000. The
Company incurred $40,000 of deferred offering costs related to this capital formation activity.



On June 26, 2009, the Company implemented
a 7 for 1 forward stock split on its issued and outstanding shares of common stock to the holders of record as of June 24,
2009. As a result of the split, each holder of record on the record date automatically received six additional shares of the Company’s
common stock. After the split, the number of shares of common stock issued and outstanding were 70,000,000 shares. The accompanying
financial statements and related notes thereto have been adjusted accordingly to reflect this forward stock split.



On May 26, 2010, the Company issued 20,000
(post reverse stock split) shares of its common stock to a Director for services valued at $25,000 based on the current market
price of the stock minus a discount for the restricted trading.



On February 25, 2011, the Company issued
24,000 (post reverse stock split) shares of its common stock to Directors for repayment of loans of $49,000 based on the current
market price of the stock minus a discount for the restricted trading.



On August 26, 2011, the Company issued
360,000 (post reverse stock split) shares of its common stock to Directors for services valued at $108,000 based on the current
market price of the stock minus a discount for the restricted trading.



On September 8, 2011, the Company issued
60,000 (post reverse stock split) shares of its common stock for services valued at $25,500 based on the current market price of
the stock minus a discount for the restricted trading.



From January 1, 2011 to December 31, 2011,
the Company issued 148,320 (post reverse stock split) shares of its common stock valued at $77,237 to retire convertible debt and
accrued interest of $5,437.



On October 7, 2011, the Company filed
a certificate of amendment of certificate of incorporation with the state of Delaware to increase the amount of authorized common
stock to 1,000,000,000 shares.



On January 4, 2012, the Company issued
100,000 (post reverse stock split) shares of its common stock to a consultant for services valued at $35,500.



On February 2, 2012, the Company issued
400,000 (post reverse stock split) shares of its common stock to two directors for services valued at $142,000.



On March 2, 2012, the Company implemented
a 1 for 500 reverse stock split on its issued and outstanding shares of common stock to the holders of record. After the reverse
split, the number of shares of common stock issued and outstanding were 1,318,868 shares. The accompanying financial statements
and related notes thereto have been adjusted accordingly to reflect this reverse stock split.



On June 5, 2012, the Company issued 1,875,000
shares of its common stock to a consultant for services valued at $28,125.



On June 5, 2012, the Company issued 1,875,000
shares of its common stock to an additional consultant for services valued at $28,125.



On June 5, 2012, the Company issued 16,531,175
to an investor for $250,000.



On June 21, 2012, the Company issued 500,000
shares of its common stock to a consultant for services valued at $7,500.



From January 1, 2012 to June 30, 2012,
the Company issued 127,783 shares of its common stock valued at $9,500 to retire convertible debt and accrued interest.



Note 7-Income Taxes



The provision (benefit) for income taxes
for the periods ended June 30, 2012 and 2011 was as follows (assuming a 23% effective tax rate):



|                               |  | 2012 |          | 2011
|------------------------------ |  | ---- | -------- | ----
|                               |  |      |          |     
|Current Tax Provision:         |  |      |          |     
|Federal-                       |  |      |          |     
|Taxable income                 |  | $-   |          | $-  
|                               |  |      |          |     
|Total current tax provision    |  | $-   |          | $-  
|                               |  |      |          |     
|Deferred Tax Provision:        |  |      |          |     
|Federal-                       |  |      |          |     
|Loss carryforwards             |  | $    | 145,178  |     
|Nondeductible interest expense |  |      | (400     | )   
|Change in valuation allowance  |  |      | (144,778 | )   
|                               |  |      |          |     
|Total deferred tax provision   |  | $    | —        |     



The Company had deferred income tax assets
as of June 30, 2012 and December 31, 2011 as follows:





|                              |  | 2012 |            | 2011
|----------------------------- |  | ---- | ---------- | ----
|                              |  |      |            |     
|Loss carryforwards            |  | $    | 266,389    |     
|Less - Valuation allowance    |  |      | (266,389   | )   
|                              |  |      |            |     
|Total net deferred tax assets |  | $    | —          |     
|                              |  |      |            |     
|                              |  |      |            |     
|                              |  |      |            |     
|FS loss carryforward          |  |      | (1,260,077 | )   
|amort of discount             |  |      | 101,863    |     
|tax loss carryforward         |  |      | (1,158,214 | )   





The Company provided a valuation allowance
equal to the deferred income tax assets for the periods ended June 30, 2012 and December 31, 2011, because it is not presently
known whether future taxable income will be sufficient to utilize the loss carry-forwards.



As of June 30, 2012, the Company had approximately
$1,158,000 in tax loss carry-forwards that can be utilized in future periods to reduce taxable income, and expire in the year 2032.



The Company did not identify any material
uncertain tax positions.  The Company did not recognize any interest or penalties for unrecognized tax benefits.



The Company has filed income tax returns
in the United States. All tax years are closed by expiration of the statute of limitations.



Note 8-Related Party
Transactions



On February 4, 2008, the Company issued
38,080 (post reverse stock split) shares of common stock to directors of the Company, for $272.



As described in Note 5, on May 26, 2010,
the Company issued 20,000 (post reverse stock split) shares of its common stock to a Director for services valued at $25,000.



On February 25, 2011, the Company issued
24,000 (post reverse stock split) shares of its common stock to Directors for repayment of loans of $49,000 based on the current
market price of the stock minus a discount for the restricted trading.



On August 26, 2011, the Company issued
360,000 (post reverse stock split) shares of its common stock to Directors for services valued at $108,000 based on the current
market price of the stock minus a discount for the restricted trading.



On February 2, 2012, the Company issued
400,000 (post reverse stock split) shares of its common stock to two directors for services valued at $142,000.



During the six months ended June 30, 2012
the Company paid fees to related parties amounting to $405,625.



Note 9- Commitments



On June 15, 2008, the Company entered
into a Transfer Agent and Registrar Agreement with Nevada Agency and Trust Company ("NATCO"). Under the Agreement, the
Company agreed to pay to NATCO an annual fee of $1,500 for the first year and $1,800 for every year thereafter. NATCO will act
as the Company’s transfer agent and registrar.



As described in Note 3, in January 2008,
the Company entered into a Assignment Agreement whereby the Company acquired all of the rights, title and interest in the invention
known as the “Self operated computerized karaoke recording booth” for consideration of royalties ranging from 1% to
5% based on the net income of the Company for 30 years from the date of the Company's incorporation.



Note 10-Concentration
of Credit Risk



The Company’s cash and cash equivalents
are invested in a major bank in Israel and are not insured. Management believes that the financial institution
that holds the Company’s investments is financially sound and accordingly, minimal credit risk exists with respect to these
investments.





ITEM 2.	MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION



Certain statements contained in this Quarterly
Report, including statements regarding the anticipated development and expansion of our business, our intent, belief or current
expectations, primarily with respect to the future operating performance of Mobile Star Corp and the services we expect to offer
and other statements contained herein regarding matters that are not historical facts, are “forward-looking” statements.
Future filings with the Securities and Exchange Commission, future press releases and future oral or written statements made by
us or with our approval, which are not statements of historical fact, may contain forward-looking statements, because such statements
include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements.



All forward-looking statements speak only as
of the date on which they are made. We undertake no obligation to update such statements to reflect events that occur or circumstances
that exist after the date on which they are made.



This Management’s Discussion and Analysis
or Plan of Operations (“MD&A”) section of this Report discusses our results of operations, liquidity and financial
condition, and certain factors that may affect our future results. You should read this MD&A in conjunction with our audited
financial statements and accompanying notes included in this Report. This plan of operation contains forward-looking statements
that involve risks, uncertainties, and assumptions. The actual results may differ materially from those anticipated in these forward-looking
statements as a result of certain factors, including, but not limited to, those presented under “Risk Factors” or elsewhere
in this Report.



Plan of Operation



We were incorporated in Delaware on September
25, 2007 and are a development stage company. We began operations on January 1, 2008. Our Principal executive offices are located
at 433 N Camden Dr Fourth Floor , Beverly Hills, CA 90210.



Our registered office in Delaware is located
at 113 Barksdale Professional Center, Newark, DE 19711, and our registered agent is Delaware Intercorp. Our fiscal year end is
December 31.



We have engaged a US manufacturer to develop
a fully operational prototype of the Technology. The product has been developed and is running as a test pilot in an amusement
center in New York. We estimate it would take an additional three to six months to bring this product to the market on a full scale
basis. The product is to run parallel as a test pilot during the Company’s further efforts to bring the product to the market
on a full scale basis.



Liquidity and Capital Resources



As of June 30 2012 we had cash on hand of $284.
Our cumulative net loss since inception is $1,260,077 which is comprised entirely of general and administrative and research and
development expenses.



On January 6, 2011, the Company signed a $35,000
convertible promissory note with a third party. The note bears interest at 8% per annum and was due on October 10, 2011. The note
has conversion rights that allow the holder of the note to convert after 180 days all or any part of the remaining principal balance
into the Company’s common stock at a price equal to 55% of the average of the lowest three trading prices for the Common
Stock during the most recent ten day period. As of September 30, 2011 this note was reduced by $14,800 upon conversion of shares.



On April 11, 2011, the Company signed a $32,500
convertible promissory note with a third party. The note bears interest at 8% per annum and was due on January 18, 2012. The note
has conversion rights that allow the holder of the note to convert after 180 days all or any part of the remaining principal balance
into the Company’s common stock at a price equal to 55% of the average of the lowest three trading prices for the Common
Stock during the most recent ten day period.



The Company does not believe that its cash
resources will be sufficient to fund its expenses over the next 12 months. There can be no assurance that additional capital will
be available to the Company. The Company currently has no agreements, arrangements, or understandings with any person to obtain
funds through bank loans, lines of credit, or any other sources. Since the Company has no such arrangements or plans currently
in effect, its inability to raise funds for the above purposes will have a severe negative impact on its ability to remain a viable
company.



RESULTS OF OPERATIONS



For the Three Month Period Ended
June 30, 2012 versus June 30, 2011



Revenues



The Company had revenues for the three
month period ended June 30, 2012 of $0 and general and administrative costs of $571,350
as compared to the three month period ended June 30, 2011 of revenues of $6,381 and general and administrative costs of $35,190.



Operating Expenses and Net Loss.



The Company’s net loss of $574,361
for the three month period ended June 30, 2012 was comprised of general and administrative expenses of $571, 350 Professional fees
to a related party in the amount of $45,100 Consulting fees in the amount of $356,250and Director Fees of $170,000. The Company also had $3,011 in
net interest expense. In comparison to the three month period ended June 30, 2011, the Company’s net loss of $49, 907 for
the three month period ended June 30, 2011 was comprised of general and administrative expenses of $41,570 Research and Development
fees in the amount of 26,030, Professional fees to a related party in the amount of $10,452 and other Fees of $5,
089. The Company also had $98 in Foreign Currency transaction, $25,619 in net interest expense and other income in the amount
of $11,000.



For the Six Month Period Ended
June 30, 2012 versus June 30, 2011



Revenues



The Company had revenues for the six
month period ended June 30, 2012 of $0 and general and administrative costs of $625,350
as compared to the six month period ended June 30, 2011 of revenues of $6,381 and general and administrative costs of $85,901.



Operating Expenses and Net Loss.



The Company’s net loss of $631,208
for the six month period ended June 30, 2012 was comprised of general and administrative expenses of $625, 350, Professional fees
to a related party in the amount of $49,100, consulting fees in the amount of $406,250and Director Fees of $170,000. The Company also had $5,858 in
net interest expenses. In comparison to the six month period ended June 30, 2011, the Company’s net loss of $119,927 for
the six month period ended June 30, 2011 was comprised of general and administrative expenses of $85,901, Research and Development
fees in the amount of $39,313, Professional fees to a related party in the amount of $24,185, consulting fees in the amount of
$6,383, investor relations fees in the amount of $3,500 and other Fees in the amount of $12,
520. The Company also had $98 in Foreign Currency transaction, $51,309 in net interest expenses and other income in the
amount of $11,000.



Cumulative From Inception



Revenues



The Company had revenues since inception
of $6,381 and general and administrative costs of $1,165,282.



Operating Expenses and Net Loss.



The Company’s net loss of $1,260,077
since inception was comprised of general and administrative expenses of $1,165,282. Research and development fees in the amount
of $137,092, Professional fees to a related party in the amount of $221,798 consulting fees in the amount of $462,780,
Management fees in the amount of 133,500, Investor relations fees $9, 991, Legal incorporation fees in the amount of $2,350Director
Fees of $170,000, Travel fees of $24,750 and Other fees in the amount
of $3,101. The Company also had $ 5,161 in foreign currency transaction gains and $3,646 in Foreign currency transaction losses,
$113,691 in net interest expense and other income in the amount $11,000.



Liquidity and Capital Resources



Three and Six Month Period Ended June
30, 2012



As at June 30, 2012, our total assets
were $97,584 compared to $12,585 in total assets at December 31, 2011. Total assets were comprised of $284 in cash as of June 30,
2012 compared to $285 at December 31, 2011. As at June 30, 2012, our current liabilities were $344,511 compared to $89,054 at December
31, 2011. Stockholders’ equity was a deficit of $246,927 as of June 30, 2012 compare to stockholders' equity deficit of $76,469
as of December 31, 2011.



Cash Flows from Operating Activities



We have not generated positive cash flows
from operating activities. For the six month period ended June 30, 2012, net cash flows used in operating activities was $(480,102).
Net cash flows used in operating activities was $(83,484) for the six month period ended June 30, 2011. Net cash flows used in
operating activities was $(811,850) since inception.



Cash Flows from Investing Activities



Since inception, including the three and
six month period ended June 30, 2012, the Company has not generated any cash flows from investing activities.



Cash Flows from Financing Activities



We have financed our operations primarily
from either advancements or the issuance of equity. For the six month period ended June 30, 2012 net cash provided by financing
activities was $480,100. For the six month period ended June 30, 2011 net cash provided by financing activities was $67,500.For
the period from inception to June 30, 2012, net cash provided by financing activities was $819,434.



QUARTERLY EVENTS



On April 27, 2012 the Company issued
a press release announcing the designation of Series B Preferred Convertible shares which is designed to allow current and prospective
shareholders to participate in the Company ownership through a different class of stock but one that is still convertible to common
shares with voting rights.

On June 1, 2012 MBST announced
in a press release the appointment of Mr. George Ivakhnik as the Company's new President, Secretary, and Treasurer, effective immediately.
Mr. Ivakhnik was appointed as the CEO of the Company in February of 2012.

The Board also authorized the issuance
of preferred A and C class shares. Class A and C preferred shares are designed for specific deal objectives.

On June 08, 2012 the Company issued
a press release announcing an agreement entered into to acquire interest in two projects: 1.) Four-season NY-based land resort
development and 2.) Up to 49% of Star-Show, Inc., a worldwide karaoke booth manufacturer and distributor.

On June 8, 2012, Mobile Star Corp. (the
“Company”) caused to be issued 20,281,175 newly issued shares of common stock in execution of a Subscription Agreement
(the “Agreement”) and for consulting services. As discussed further herein 16,531,175 of these shares were issued pursuant
to the Agreement. The remaining 3,750,000 shares were issued for consulting services as follows; 1,875,000 to private consultant,
Asher Zwebner and 1,875,000 shares to consulting firm, OTZAROT TARSHISH NECHASIM VEHASHKAOT LTD.



On June 8, 2012 The Company issued restricted
shares of common stock in connection with the Agreement, which was entered between the Company and Arm Fund Partners, Inc. (“Arm
Fund”). Therefore, on June 8, 2012, Arm Fund acquired control of 16,531,175 shares of the Company’s issued and outstanding
common stock, which represents approximately 66% of the Company’s total issued and outstanding common stock at the time.
Pursuant to the Agreement, Arm Fund paid an aggregate purchase price of two hundred and fifty thousand dollars ($250,000) in exchange
for the shares.



On June 8, 2012 Ruth Katz resigned
from the position of Secretary, Treasurer and Accounting Officer with the Company, but not before appointing George Ivakhnik to
take over his position as President, Secretary, Treasurer, and Accounting Officer. The resignation was not the result of any disagreement
with the Company on any matter relating to the Company’s operations, policies or practices. Mr. Ivakhnik already holds the
positions of Chief Executive Officer and is a member of the Board of Directors of the Company.

On June 8, 2012 Judah Steinberger resigned
from his directorship position, as his last remaining post with the Company. The resignation was not the result of any disagreement
with the Company on any matter relating to the Company’s operations, policies or practices.



On June 12, 2012 MBST issued a
press release announcing an agreement entered into to provide construction completion funds to a Long Beach, CA based Venue known
as “The Vault,” a 22,000 square foot entertainment venue facility being built with state of the art sound and stage
equipment and will be an attraction for Long Beach's burgeoning entertainment district.

Off-Balance Sheet Arrangements.



We have no off-balance sheet arrangements.



ITEM 3.	QUANTITATIVE AND QUALITATATIVE
DISCLOSURES ABOUT MARKET RISK



We are a smaller
reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information
under this item.



ITEM 4.	CONTROLS AND PROCEDURES



Evaluation of Disclosure Controls
and Procedures



Disclosure controls
and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports
filed 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 by our company in the reports that it files or submits under the Exchange Act is accumulated and communicated
to our management, including its principal executive and principal financial officers, or persons performing similar functions,
as appropriate to allow timely decisions regarding required disclosure. Our management carried out an evaluation under the supervision
and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design
and operation of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange
Act of 1934 ("Exchange Act").



Changes in Internal Control over
Financial Reporting



There have been no
changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d)
of Exchange Act Rules 13a-15 or 15d-15 that occurred during our last fiscal quarter that have materially affected, or are reasonably
likely to materially affect, our internal control over financial reporting.



PART II — OTHER INFORMATION



ITEM 1.	LEGAL PROCEEDINGS



None.



ITEM 1A.	 RISK FACTORS



We are a smaller
reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information
under this item.



ITEM 2. 	UNREGISTERED SALES OF EQUITY SECURITIES AND
USE OF PROCEEDS



| | 1. | Quarterly Issuances:
| | -- | --------------------



On June 8, 2012, Mobile Star
Corp. (the “Company”) caused to be issued 20,281,175 newly issued shares of common stock in execution of a Subscription
Agreement (the “Agreement”) and for consulting services. As discussed further herein 16,531,175 of these shares were
issued pursuant to the Agreement. The remaining 3,750,000 shares were issued for consulting services as follows; 1,875,000 to private
consultant, Asher Zwebner and 1,875,000 shares to consulting firm, OTZAROT TARSHISH NECHASIM VEHASHKAOT LTD.



On June 8, 2012 The Company
issued restricted shares of common stock in connection with the Agreement, which was entered between the Company and Arm Fund Partners,
Inc. (“Arm Fund”). Therefore, on June 8, 2012, Arm Fund acquired control of 16,531,175 shares of the Company’s
issued and outstanding common stock, which represents approximately 66% of the Company’s total issued and outstanding common
stock at the time. Pursuant to the Agreement, Arm Fund paid an aggregate purchase price of two hundred and fifty thousand dollars
($250,000) in exchange for the shares.



| | 2. | Subsequent Issuances:
| | -- | ---------------------

Subsequent to the quarter, we did not issue any
unregistered securities other than as previously disclosed.



ITEM 3. 	DEFAULTS UPON SENIOR SECURITIES



None.



ITEM 4. 	MINING SAFETY DISCLOSURE



NOT APPLICABLE



ITEM 5. 	OTHER INFORMATION



Quarterly Events:



On April 27, 2012 the Company issued
a press release announcing the designation of Series B Preferred Convertible shares which is designed to allow current and prospective
shareholders to participate in the Company ownership through a different class of stock but one that is still convertible to common
shares with voting rights.

On June 01, 2012 MBST announced
in a press release the appointment of Mr. George Ivakhnik as the Company's new President, Secretary, and Treasurer, effective immediately.
Mr. Ivakhnik was appointed as the CEO of the Company in February of 2012.

The Board also authorized the issuance
of preferred A and C class shares. Class A and C preferred shares are designed for specific deal objectives.

On June 08, 2012 the Company issued
a press release announcing an agreement entered into to acquire interest in two projects: 1.) Four-season NY-based land resort
development and 2.) Up to 49% of Star-Show, Inc., a worldwide karaoke booth manufacturer and distributor.

On June 8, 2012, Mobile Star Corp. (the
“Company”) caused to be issued 20,281,175 newly issued shares of common stock in execution of a Subscription Agreement
(the “Agreement”) and for consulting services. As discussed further herein 16,531,175 of these shares were issued pursuant
to the Agreement. The remaining 3,750,000 shares were issued for consulting services as follows; 1,875,000 to private consultant,
Asher Zwebner and 1,875,000 shares to consulting firm, OTZAROT TARSHISH NECHASIM VEHASHKAOT LTD.



On June 8, 2012 The Company issued restricted
shares of common stock in connection with the Agreement, which was entered between the Company and Arm Fund Partners, Inc. (“Arm
Fund”). Therefore, on June 8, 2012, Arm Fund acquired control of 16,531,175 shares of the Company’s issued and outstanding
common stock, which represents approximately 66% of the Company’s total issued and outstanding common stock at the time.
Pursuant to the Agreement, Arm Fund paid an aggregate purchase price of two hundred and fifty thousand dollars ($250,000) in exchange
for the shares.



On June 8, 2012 Ruth Katz resigned
from the position of Secretary, Treasurer and Accounting Officer with the Company, but not before appointing George Ivakhnik to
take over his position as President, Secretary, Treasurer, and Accounting Officer. The resignation was not the result of any disagreement
with the Company on any matter relating to the Company’s operations, policies or practices. Mr. Ivakhnik already holds the
positions of Chief Executive Officer and is a member of the Board of Directors of the Company.

On June 8, 2012 Judah Steinberger resigned
from his directorship position, as his last remaining post with the Company. The resignation was not the result of any disagreement
with the Company on any matter relating to the Company’s operations, policies or practices.



On June 12, 2012 MBST issued a
press release announcing an agreement entered into to provide construction completion funds to a Long Beach, CA based Venue known
as “The Vault” 22,000 square foot entertainment venue facility being built with state of the art sound and stage equipment
and will be an attraction for Long Beach's burgeoning entertainment district."









Item 6. Exhibits





|3.1   |  | Articles of Incorporation (Filed as Exhibit 3.1 to Registration Statement on Form S1, filed with the Securities and Exchange Commission on August 8, 2008)
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------
|3.2   |  | Bylaws of the Company (Filed as Exhibit 3.2 to Registration Statement on Form S1, filed with the Securities and Exchange Commission on August 8, 2008)    
|31.01 |  | Certification of Principal Executive Officer Pursuant to Rule 13a-14 (Filed herewith)                                                                     
|31.02 |  | Certification of Principal Financial Officer Pursuant to Rule 13a-14(Filed herewith)                                                                      
|32.01 |  | CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act(Filed herewith)                                                                       
|32.02 |  | CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act(Filed herewith)                                                                       



SIGNATURES



In accordance with the requirements of the Securities Exchange
Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



Mobile Star, Corp.

A Delaware corporation



|August 15, 2012 | By:  | /S/ George Ivakhnik                                                      
|--------------- | ---- | -------------------------------------------------------------------------
|                |      | George Ivakhnik                                                          
|                | Its: | CEO, Treasurer&                                                          
|                |      | Principal Accounting and Financial Officer
        Secretary and Director





Exhibit 31.01



CERTIFICATION OF THE PRINCIPAL EXECUTIVE
OFFICER PURSUANT TO RULE 13a-14



I, George
Ivakhnik, certify that:



1. 	I have reviewed this quarterly report on Form
10-Q of Mobile Star Corp.;



2.
	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with
respect to the period covered by this report;



3. 	Based on my knowledge,
the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;



4. 	The
registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined
in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:



(a)         Designed
such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;



(b)	Designed
such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, 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;



(c)         Evaluated
the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
and



(d)         Disclosed
in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s
most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected,
or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and



5. 	The registrant’s
other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting,
to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing
the equivalent functions):



(a)         All
significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;
and



(b)         Any
fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.





|August 15, 2012 | By:  | /S/ George Ivakhnik                                                      
|--------------- | ---- | -------------------------------------------------------------------------
|                |      | George Ivakhnik                                                          
|                | Its: | CEO, Treasurer&                                                          
|                |      | Principal Accounting and Financial Officer
        Secretary and Director





| |  | 
| |  | 





Exhibit 31.02



CERTIFICATION OF PRINCIPAL FINANCIAL
OFFICER PURSUANT TO RULE 13a-14



I, George
Ivakhnik, certify that:



1. 	I have reviewed this
quarterly report on Form 10-Q of Mobile Star Corp.;



2.
	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with
respect to the period covered by this report;



3. 	Based on my knowledge,
the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;



4. 	The registrant’s
other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have:



(a)         Designed
such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;



(b)	Designed
such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, 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;



(c)         Evaluated
the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
and



(d)         Disclosed
in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s
most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected,
or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and



5. 	The registrant’s
other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting,
to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing
the equivalent functions):



(a)         All
significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;
and



(b)         Any
fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.







|August 15, 2012 | By:  | /S/ George Ivakhnik                                                      
|--------------- | ---- | -------------------------------------------------------------------------
|                |      | George Ivakhnik                                                          
|                | Its: | CEO, Treasurer&                                                          
|                |      | Principal Accounting and Financial Officer
        Secretary and Director







Exhibit 32.01



CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY
ACT OF 2002



In connection with the Quarterly Report
of Mobile Star Corp. (the “Company”) on Form 10-Q for the period ending June 30, 2012 as filed with the Securities
and Exchange Commission on the date hereof (the “Report”), I, George Ivakhnik, certify,
pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to
the best of my knowledge and belief:



(1)        The
Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and



(2)        The
information contained in the Report fairly presents, in all material respects, the financial condition and result of operations
of the Company.







|August 15, 2012 | By:  | /S/ George Ivakhnik                                                      
|--------------- | ---- | -------------------------------------------------------------------------
|                |      | George Ivakhnik                                                          
|                | Its: | CEO, Treasurer&                                                          
|                |      | Principal Accounting and Financial Officer
        Secretary and Director



A signed original of this written statement
required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed
form within the electronic version of this written statement has been provided to the Company and will be retained by the Company
and furnished to the Securities and Exchange Commission or its staff upon request.





Exhibit 32.02



CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY
ACT OF 2002



In connection with the Quarterly Report of Mobile Star Corp.
(the “Company”) on Form 10-Q for the period ending June 30, 2012 as filed with the Securities and Exchange Commission
on the date hereof (the “Report”), I, George Ivakhnik, certify, pursuant to 18 U.S.C.
§ 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and
belief



(1)        The
Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)        The
information contained in the Report fairly presents, in all material respects, the financial condition and result of operations
of the Company.





|August 15, 2012 | By:  | /S/ George Ivakhnik                                                      
|--------------- | ---- | -------------------------------------------------------------------------
|                |      | George Ivakhnik                                                          
|                | Its: | CEO, Treasurer&                                                          
|                |      | Principal Accounting and Financial Officer
        Secretary and Director



A signed original of this written statement
required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed
form within the electronic version of this written statement has been provided to the Company and will be retained by the Company
and furnished to the Securities and Exchange Commission or its staff upon request.