UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934
For the fiscal year ended December 31, 2015
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____
Commission file number 0-28475
Zendex Holdings, Inc.
(Name of registrant as specified in its charter)
Nevada 87-0635270
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
P.O. Box 58052, Salt Lake City, Utah 84158
(Address of principal executive offices) (Zip Code)
Issuer’s telephone number (801) 904-3855
Securities registered under Section 12(b) of the Exchange Act:
Title of each class Name of each exchange on which registered
None Not Applicable
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, par value $0.001 per share
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act
Yes [ ]
No [ X]
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act
Yes [ ]
No [X]
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 past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant 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 [X] No [ ]
Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K is not contained herein, and not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]
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 definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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Large Accelerated filer ¨
Accelerated filer ¨
Non-accelerated filer ¨ (Do not check if a smaller reporting company)
Smaller reporting company x
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No [X]
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked prices of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter: The bid on June 30, 2015, was $0.60 giving the shares held by non-affiliates a market value of $143,125.
As of March 2, 2016, the Registrant had 1,903,519 shares of common stock issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
If the following documents are incorporated by reference, briefly describe them and identify the part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) any annual report to security holders; (2) any proxy or information statement, and (3) any prospectus filed pursuant to Rule 424(b) or (c) of the Securities Act of 1933 (“Securities Act”). The listed documents should be clearly described for identification purposes: None
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PART I
Item 1. Business
Organization and Corporate History
Zendex Holdings, Inc. (the “Company” or “Zendex”) was incorporated in Nevada in May 1985 and its initial business endeavors were not successful. In December 2011, the Company acquired Zendex from its sole shareholder for 15,000,000 shares of the Company’s common stock. As a result of the acquisition, Zendex business became the Company’s primary focus.
Zendex was incorporated in the state of Utah in March 2011 to create an online platform for the sale of art. Zendex management had previous experience in the art business and believed an opportunity existed for the creation of a site dedicated to bringing buyers and sellers of art together. Zendex believes it can act as a consignment seller of the art. In addition to the art sales, Zendex will create content on its site aimed at both the artist and the general public covering news related to the art world and featuring different artists. As the website’s popularity grows, the site will seek to obtain additional revenue through advertisements.
Products and Services
Management has focused on the sale of art through consignment sales over the last year. Management would like to be able to expand into an online business but has had difficulty in creating a website with the security and interactive capability to verify and authenticate art works which would be sold on the site. As such, management has had to rely on its core business of art consignment until it is able to revamp its online business model and is investigating limiting sales only to existing galleries or known dealers. Until a site is developed which can work with existing galleries and dealers, management will work on expanding its existing consignment business.
Marketing Strategy
Our marketing efforts will center on online efforts including social media marketing on Facebook, twitter and other similar sites. We rely extensively on word of mouth and have focused on niche markets where customers can be identified based on prior purchases. We may, once we obtain additional capital, use pay per click marketing on a limited basis.
Regulations
We do not believe we face extensive regulations. Essentially we will operate as a consignment seller or occasionally as a reseller and provide information content.
Description of Property
We currently utilize the office space provided by our CEO on a rent free basis. We believe this space will be sufficient for next six to twelve months.
Technology
We currently have no technology that separates us from any competitor.
Competitors
We face intense competition from other companies including other galleries as well as companies such as eBay with online presence. Without additional funding, it will be difficult for us to compete in this marketplace and our future success will be dependent on both additional capital and our ability to differentiate our offerings from competitors most of whom are better financed, have longer operating histories and established clientele.
Concentration of Customers
We do not have any long-term existing clients but rely on new buyers for the art we offer. Our clients will typically be smaller consumers and we do not anticipate any concentration of customers.
Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements or Labor Contracts, including Duration
We have no patents or trademarks. We also have no franchises, concessions, royalty agreements or labor contracts.
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Research and Development Costs During the Last Two Fiscal Years
We have not engaged in any research and development in the last two years.
Employees
Zendex does not have any employees other than its officers. We intend to focus on outsourcing most of our technology needs in the initial stages and will rely on our officers, Josh Turner and Alex Demitrev, until we are able to obtain additional capital. Our officers are not receiving any salary at this time.
Item 2. Properties
The Company does not maintain an administrative office but utilizes the office of its officer. For the foreseeable future, Zendex does not believe office space will be a priority as its business will be online, primarily through consignment and drop shipping.
Item 3. Legal Proceedings
None.
Item 4. Mining Safety Disclosures
Zendex has no mining operations.
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market information – The principal market for the Company's common stock is the Over the Counter Bulletin Board. The following high and low bid prices for the Company's Common Stock are based on over-the-counter quotations that reflect inter-dealer prices, without retail mark-up, mark-down or commissions, and may not necessarily represent actual transactions. Furthermore, the Company’s common stock has traded sporadically and in small volume. Consequently, the information provided below may not be indicative of the Company's common stock price under different conditions. The Company completed a 1 for 10 reverse split in 2015 and prices for the June 2015 quarter and on reflect such reverse split.
Quarter Ended
High Bid
Low Bid
December 2015
$0.51
$0.45
September 2015
$0.60
$0.51
June 2015
$0.60
$0.07
March 2015
$0.18
$0.07
December 2014
$0.25
$0.02
September 2014
$0.46
$0.02
June 2014
$0.03
$0.01
March 2014
$0.05
$0.03
December 2013
$0.05
$0.02
September 2013
$0.023
$0.02
June 2013
$0.021
$0.02
March 2013
$0.02
$0.01
The prices above are based on very limited volume and wide spreads between the bid and ask prices. Investors should not rely on the historical quotes as a guide to the direction of the Company’s stock given the low volume and wide spreads. On March 2, 2016, the bid price was $0.45 per share. The Company’s shares of common stock have limited trading and the bid and ask price may not be indicative of the actual price a shareholder would receive if they tried to sell their shares.
Holders – At March 2, 2016, the Company had approximately 370 stockholders based on information obtained from the Company’s transfer agent and NOBO lists.
Dividends – Since its inception, the Company has not paid any dividends on its common stock and the Company does not anticipate that it will pay dividends in the foreseeable future.
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Recent Sales of Unregistered Securities
The Company has not sold any securities during the last two completed fiscal years.
Item 6. Selected Financial Data
Summary of Financial Information
For the year ended December 31, 2015, we had revenue of $83,250. We had a net loss of $11,269 for the year ended December 31, 2015. At December 31, 2015, we had cash and cash equivalents of $850 and a negative working capital of $111,377.
The following table shows selected summarized financial data for the Company at the dates and for the periods indicated. The data should be read in conjunction with the financial statements and notes included herein beginning on page F-1.
STATEMENT OF OPERATIONS DATA:
| | |
| For the Year Ended December 31, 2015 | For the Year Ended December 31, 2014 |
Revenues | $ 83,250 | $ 40,000 |
Cost of sales | 63,900 | 29,000 |
General and Administrative Expenses | 22,424 | 17,871 |
Other Income and Expense | 8,195 | 8,067 |
Net Income (Loss) | (11,269) | (14,938) |
Basic Loss per Share | 0.00 | 0.00 |
Diluted Loss per Share | 0.00 | 0.00 |
BALANCE SHEET DATA: | | |
| December 31, 2015 | December 31, 2014 |
Total Current Assets | $ 850 | $ 1,023 |
Total Assets | 850 | 1,023 |
Total Current Liabilities | 112,227 | 101,131 |
Working Capital | (111,377) | (100,108) |
Stockholders’ Equity (Deficit) | (111,377) | (100,108) |
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Certain statements in this Report constitute “forward-looking statements.” Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Factors that might cause such a difference include, among others, uncertainties relating to general economic and business conditions; industry trends; changes in demand for our products and services; uncertainties relating to customer plans and commitments and the timing of orders received from customers; announcements or changes in our pricing policies or that of our competitors; unanticipated delays in the development, market acceptance or installation of our products and services; changes in government regulations; availability of management and other key personnel; availability, terms and deployment of capital; relationships with third-party equipment suppliers; and worldwide political stability and economic growth. The words “believe,” “expect,” “anticipate,” “intend” and “plan” and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made.
Critical Accounting Policies and Estimates
The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the Financial Statements and accompanying notes. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from these estimates under different assumptions or conditions.
Zendex’ accounting policies are more fully described in Note 1 of the audited financial statements. As discussed in Note 1, the preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions about the future events that affect the amounts reported in the financial statements and the accompanying notes. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual differences could differ from these estimates under different assumptions or conditions. Zendex believes that the following addresses Zendex’ most critical accounting policies.
We recognize revenue in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 104, “Revenue Recognition” (“SAB 104”). Under SAB 104, revenue is recognized at the point of passage to the customer of title and risk of loss, when there is persuasive evidence of an arrangement, the sales price is determinable, and collection of the resulting receivable is reasonably assured.
We account for income taxes in accordance with FASC 740-20, “Accounting for Income Taxes”. Under FASC 740-20, deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets will be reflected on the balance sheet when it is determined that it is more likely than not that the asset will be realized.
LIQUIDITY AND CAPITAL RESOURCES
On December 31, 2015, Zendex had current assets of $850 with liabilities of $112,227. We had negative working capital of $111,377 on December 31, 2015. In comparison, on December 31, 2014, we had current assets of $1,023 with liabilities of $101,131. We had a negative working capital of $100,108 on December 31, 2014. We will have to obtain additional capital to execute our business plan. Our revenue was generated from art brokerage. Without additional capital we will not be able to execute on our business model. Additionally, with the ongoing reporting requirements of Zendex, we anticipate our overall operational costs to increase.
We anticipate the need for capital to help fund ongoing costs and do not believe debt financing will be available given the new direction we are taking with the business. We believe the online art business will prove to offer more opportunities and better profit margins than the current brokering business due to the ability of economies of scale not present in our current market. Our current reliance on word-of-mouth marketing will not be sufficient to support the successful implementation and growth of an online model.
RESULTS OF OPERATIONS
For the year ended December 31, 2015, Zendex had revenues of $83,250 with cost of sales of $63,900. Zendex general and administrative expenses were $22,424 for the year ended December 31, 2015 resulting in a net loss of $11,269 for the year ended December 31, 2015. For the year ended December 31, 2014, Zendex had revenues of $40,000 with cost of sales of $29,000. Zendex’ general and administrative expenses were $17,871 for the year ended December 31, 2014 resulting in net loss of $14,938 for the year ended December 31, 2014. We are working to change our business model and focus more on online sales as a way of generating revenue in the future.
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Item 8. Financial Statements and Supplementary Data
The Company’s financial statements are presented immediately following the signature page to this Form 10-K.
Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure
The Company has had no disagreements with its principal independent accountants with respect to accounting practices or procedures or financial disclosure.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, including our Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were not effective such that the information required to be disclosed by us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our Principal Executive and Principal Financial Officer, as appropriate to allow timely decisions regarding disclosure.
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.
Our management evaluated the effectiveness of our internal control over financial reporting as of December 31, 2015. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control - Integrated Framework, 1992. Based on this evaluation, our management concluded that, as of December 31, 2015, our internal control over financial reporting were effective base on those criteria.
This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm since the Company is not an accelerated filer or large accelerated filer.
Changes in internal control over financial reporting
There have been no changes in internal control over financial reporting that occurred during the last fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the internal control over financial reporting.
Item 9B. Other Information
None.
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PART III
Item 10. Directors, Executive Officers, and Corporate Governance
The following table sets forth the name, age, and position of each executive officer and director and the term of office.
Name
Age
Position
Director or Officer Since
Alex Demitriev
48
Secretary, Treasurer,
Director
2006
Josh Turner
34
President, Director
2011
Set forth below is certain biographical information regarding the Company's executive officer and director.
Mr. Demitriev has been self-employed over the last five years owning a part interest in an art gallery in Park City, Utah as well as engaging in the importation of art, primarily from Russia. Mr. Demitriev is also an investor in real estate projects in Utah and several foreign countries. At the present time, Mr. Demitriev has not entered into any employment or other compensation arrangements with Zendex Holdings, Inc. and will serve on a part-time, as needed basis. Mr. Demitriev is not an officer or director in any other companies that file reports with the SEC.
Mr. Turner formed Zendex in March 2011 and has focused on developing the Zendex business plan throughout 2011. Prior to forming Zendex, Mr. Turner worked in the art brokering industry as a private consultant during the prior five years and for various artists as a consultant. Mr. Turner started in the art industry as a broker for Russian Art and has represented several artists as a private consultant. Mr. Turner had no relationship to Zendex prior to the acquisition of Zendex.
Summary Compensation Table
| | | | | | | | | |
Name and Principal Position | Year | Salary | Bonus | Stock Awards | Option Awards | Non-Equity Incentive Plan Compensation | Nonqualified
Deferred
Compensation
Earnings | All Other Compensation | Total |
Josh Turner, CEO | 2015 | -- | -- | -- | -- | -- | -- | -- | -- |
| 2014 | -- | -- | -- | -- | -- | -- | -- | -- |
To the knowledge of management, during the past five years, no present or former director, or executive officer of the Company:
(1) Has filed a petition under the federal bankruptcy laws or any state insolvency law, nor had a receiver, fiscal agent or similar officer appointed by a court for the business or property of such person, or any partnership in which he or she was a general partner at or within two years before the time of such filing, or any corporation or business association of which he or she was an executive officer at or within two years before the time of such filing;
(2) Was convicted in a criminal proceeding or named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);
(3) Was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from or otherwise limiting, the following activities:
(i) Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, associated person of any of the foregoing, or as an investment advisor, underwriter, broker or dealer in securities, or as an affiliate person, director or employee of any investment company, or engaging in or continuing any conduct or practice in connection with such activity;
(ii) Engaging in any type of business practice;
(iii) Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of federal or state securities laws or federal commodities laws;
(4) Was the subject of any order, judgment, or decree, not subsequently reversed, suspended, or vacated, of any federal or state
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authority barring, suspending, or otherwise limiting for more than 60 days the right of such person to engage in any activity described above under this Item, or to be associated with persons engaged in any such activity;
(5) Was found by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission to have violated any federal or state securities law, and the judgment in such civil action or finding by the Securities and Exchange Commission has not been subsequently reversed, suspended, or vacated.
(6) Was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated.
Compliance With Section 16(A) Of The Exchange Act
The Company is not aware of any late reports filed by officers, directors and ten percent stockholders.
Item 11. Executive Compensation
Cash Compensation – No cash compensation was paid to any director or executive officer of the Company during the fiscal years ended December 31, 2015 and 2014.
Bonuses and Deferred Compensation – None
Compensation Pursuant to Plans – None
Pension Table – None
Other Compensation – None
Compensation of Directors – None
Termination of Employment and Change of Control Arrangement
There are no compensatory plans or arrangements, including payments to be received from the Company, with respect to any person named in Cash Compensation set out above which would in any way result in payments to any such person because of his resignation, retirement, or other termination of such person's employment with the Company or its subsidiaries, or any change in control of the Company, or a change in the person's responsibilities following a changing in control of the Company.
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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table sets forth as of December 31, 2015, the name and the number of shares of the Company's common stock, par value $0.001 per share, held of record or beneficially by each person who held of record, or was known by the Company to own beneficially, more than 5% of the 1,903,519 issued and outstanding shares of the Company's common stock, and the name and stockholdings of each director and of all officers and directors as a group.
Amount and Nature of
Title of Class
Name of Beneficial Owner
Beneficial Ownership (1)
Percent of Class
Common
Josh Turner
1,500,000
78.80%
4764 South 900 East
Salt Lake City, UT
Common
Michelle Turpin
4764 South 900 East
Salt Lake City, UT
143,678
7.55%
Name of Officer, Director
Amount and Nature of
Title of Class
and Nominee
Beneficial Ownership (1)
Percent of Class
Common
Alex Demitriev
21,300
1.1%
Common
Josh Turner
See Above
Common
All Officers and Directors
as a Group
1,521,300
79.92%
(1) Ms. Turpin owns 110,000 directly and through her management and ownership of Micvic, LLC is beneficially deemed to own the 33,678 shares held by Micvic, LLC. The owners of Micvic, LLC are Michelle Turpin and Judy Wiles, the mother of Ms. Turpin.
ITEM 13. Certain Relationships and Related Transactions and Director Independence.
Transactions with management and others
During the year ended December 31, 2015 and 2014, the president and sole director loaned $0 and $6,650, respectively, to the Company. Interest of 6% was computed on the balance of the related party payable and recorded as $1,087 and $906 of accrued interest as of December 31, 2015 and 2014, respectively. Thus the principal balance as of December 31, 2015 and 2014 is $18,103 and $18,103 with accrued interest of $3,564 and $2,478, respectively. The Company also has an unsecured promissory note bearing interest of 18% per annum with a stockholder. The principal balance as of December 31, 2015 and 2014 is $42,323 and $39,323 with accrued interest of $41,272 and $34,162, respectively. During 2015 and 2014 this stockholder paid accounts payable of $3,000 and $127, respectively, on the Company’s behalf which was then added to the stockholder’s loan amount.
Item 14. Principal Accountant Fees and Services
(1) Audit Fees - The aggregate fees billed in each of the last two fiscal years for professional services rendered by the Company’s principal accountant for the audit of the annual financial statements and review of financial statements included in the Form 10K or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years are $10,600 for 2015 and $8,744 for 2014.
(2) Audit-Related Fees - The aggregate fees billed in each of the last two fiscal years for assurance and related services by the Company’s principal accountant that are reasonably related to the performance of the audit or review of the financial statements and are not reported in (1) Audit Fees: $0 for 2015 and $0 for 2014.
(3) Tax Fees - The aggregate fees billed in each of the last two fiscal years for professional services rendered by the Company’s principal accountant for tax compliance, tax advice, and tax planning: $0 for 2015 and $0 for 2014.
(4) All Other Fees - The aggregate fees billed in each of the last two fiscal years for products and services provided by the Company’s principal accountant, other than the services reported in (1) Audit Fees; (2) Audit-Related Fees; and (3) Tax Fees: $0 for 2015 and $0 for 2014.
(5) The Company does not have an audit committee.
(6) Not Applicable.
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ITEM 15. Exhibits, Financial Statement Schedules.
Financial Statements – the following financial statements are included in this report:
Title of Document
Page
Report of Independent Registered Public Accounting Firm
F-1
Consolidated Balance Sheets
F-2
Consolidated Statements of Operations
F-3
Consolidated Statements of Changes in Stockholders’ Deficit
F-4
Consolidated Statements of Cash Flows
F-6
Notes to Financial Statements
F-8-10
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Financial Statement Schedules – There are no financial statement schedules are included as part of this report
Exhibits – The following exhibits are included as part of this report:
Exhibit
Reference
Number
Number
Title of Document
Location
3.01
3
Amended and Restated Articles of Incorporation
Incorporated by reference*
31.01
31
CEO certification Pursuant to 18 USC
Section 1350, as adopted pursuant to
Section 302 of Sarbanes-Oxley Act of 2002
This Filing
31.02
31
Principal Financial Officer certification Pursuant to 18 USC
Section 1350, as adopted pursuant to
Section 302 of Sarbanes-Oxley Act of 2002
This Filing
32.01
32
CEO and CFO Certification pursuant to Section 906
This Filing
101.INS
XBRL Instance
101.XSD
XBRL Schema
101.CAL
XBRL Calculation
101.DEF
XBRL Definition
101.LAB
XBRL Label
101.PRE
XBRL Presentation
* Incorporated by reference from the Company's information statement on schedule 14c filed with the SEC on June 6, 2015.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Zendex Holdings, Inc.
By: /s/ Josh Turner
Josh Turner, Principal Executive Officer
By: /s/ Alex Demitriev
Alex Demitriev, Principal Financial Officer
Date: March 25, 2016
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the registrant and in the capacities and on the dates indicated.
By: /s/ Josh Turner
Josh Turner, Director
By: /s/ Alex Demitriev
Alex Demitriev, Director
Date: March 25, 2016
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PRITCHETT, SILER & HARDY, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
A PROFESSIONAL CORPORATION
1438 N. HIGHWAY 89 STE. 130
FARMINGTON, UTAH 84025
_______________
(801) 447-9572 FAX (801) 447-9578
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
Zendex Holdings, Inc.
Salt Lake City, Utah
We have audited the accompanying balance sheet of Zendex Holdings, Inc. as of December 31, 2015 and 2014 and the related statements of operations, stockholders’ deficit and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Zendex Holdings, Inc. as of December 31, 2015 and 2014 and the results of its operations and cash flows for the years then ended in conformity with generally accepted accounting principles in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has suffered recurring losses and has no significant ongoing operations which raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Pritchett, Siler & Hardy, P.C.
Pritchett, Siler & Hardy, P.C.
Farmington, Utah
March 11, 2016
F - 1
ZENDEX HOLDINGS, INC.
Balance Sheets
| | | | | |
Assets: | | December 31, 2015 | | | December 31, 2014 |
Current Assets: | | | | | |
Cash in bank | $ | 850 | | $ | 927 |
Prepaid expense | | - | | | 96 |
Total Assets | $ | 850 | | $ | 1,023 |
Liabilities and Stockholders' Deficit: | | | | | |
Accounts payable | $ | 6,965 | | $ | 6,965 |
Income tax payable | | - | | | 100 |
Related party note payable | | 60,426 | | | 57,426 |
Related party interest payable | | 44,836 | | | 36,640 |
Total Current Liabilities | | 112,227 | | | 101,131 |
Stockholders' Deficit: | | | | | |
Preferred stock, $0.001 par value, 10,000,000 share authorized, 1 shares issued and outstanding | | - | | | - |
Common stock, $0.001 par value, 100,000,000 shares authorized, 1,903,519 and 1,903,519 shares issued and outstanding, respectively | | 1,904 | | | 1,904 |
Paid in capital | | (72,089) | | | (72,089) |
Accumulated deficit | | (41,192) | | | (29,923) |
Total Stockholders' Deficit | | (111,377) | | | (100,108) |
Total Liabilities and Stockholders' Deficit | $ | 850 | | $ | 1,023 |
The accompanying notes are an integral part of these financial statements.
F - 2
ZENDEX HOLDINGS, INC.
Statements of Operations
| | | | | |
| | For the Year Ended December 31, |
| | 2015 | | | 2014 |
Revenue | $ | 83,250 | | $ | 40,000 |
Cost of Sales | | 63,900 | | | 29,000 |
Gross Profit | | 19,350 | | | 11,000 |
| | | | | |
Expenses: | | | | | |
General and administrative | | 22,424 | | | 17,871 |
Total Expense | | 22,424 | | | 17,871 |
| | | | | |
Income (Loss) from Operations | | (3,074) | | | (6,871) |
| | | | | |
Other Expense | | | | | |
Interest expense | | 8,195 | | | 7,967 |
Total other expense | | 8,195 | | | 7,967 |
| | | | | |
Income (loss) before provision for income taxes | | (11,269) | | | (14,838) |
| | | | | |
Income tax expense | | - | | | (100) |
| | | | | |
Net Income (Loss) | $ | (11,269) | | $ | (14,938) |
| | | | | |
Basic and diluted income (loss) per share | $ | (0.01) | | $ | (0.01) |
| | | | | |
Basic and diluted weighted average common shares Outstanding | | 1,903,519 | | | 1,903,519 |
The accompanying notes are an integral part of these financial statements.
F - 3
ZENDEX HOLDINGS, INC.
Statements of Changes in Stockholders’ Deficit
For the Years ended December 31, 2015 and 2014
| | | | | | | | | |
| Common | | Paid in Capital | | Accumulated Deficit | | Total Stockholders’ Deficit |
| Shares | | Amount |
Balance, January 1, 2014 | 1,903,519 |
$ | 1,904 |
$ | (72,089) |
$ | (14,985) |
$ | (85,170) |
Net loss for the year ended December 31, 2013 | - | | - | | - | | (14,938) | | (14,938) |
Balance, December 31, 2014 | 1,903,519 | | 1,904 | | (72,089) | | (29,923) | | (100,108) |
Net loss for the year ended December 31, 2015 | - | | - | | - | | (11,269) | | (11,269) |
Balance, December 31, 2015 | 1,903,519 | $ | 1,904 | $ | (72,089) | $ | (41,192) | $ | (111,377) |
The accompanying notes are an integral part of these financial statements.
F - 4
ZENDEX HOLDINGS, INC.
Statements of Cash Flows
| | | | | |
| | For the Year Ended December 31, |
| | 2015 | | | 2014 |
Operating Activities: | | | | | |
Net loss | $ | (11,269) | | $ | (14,938) |
Adjustments to reconcile net loss to net cash position: | | | | | |
Changes in Prepaid expense | | 96 | | | (96) |
Accounts payable | | - | | | 1 |
Income tax payable | | (100) | | | 100 |
Related party accrued interest | | 8,196 | | | 7,966 |
Net cash used for operating activities | | (3,077) | | | (6,967) |
Cash flows from Investing Activities: | | - | | | - |
Financing Activities: | | | | | |
Net proceeds from related party note payable | | 3,000 | | | 6,777 |
Net cash provided from financing activities | | 3,000 | | | 6,777 |
Net increase (decrease) in cash | | (77) | | | (190) |
Cash and cash equivalents at beginning of year | | 927 | | | 1,117 |
Cash and cash equivalents at end of year | $ | 850 | | $ | 927 |
| | | | | |
Supplement disclosure of cash flow information | | | | | |
Income tax | $ | - | | $ | - |
Interest | $ | - | | $ | - |
| | | | | |
Non-cash investing and financing activities: None | | | | | |
The accompanying notes are an integral part of these financial statements.
F - 5
Zendex Holdings, Inc.
Notes to Financial Statements
December 31, 2015 and 2014
Note 1 – Organization and Summary of Significant Accounting Policies
Organization – Zendex was incorporated in the state of Utah in March 2011 to create an online platform for the sale of art. Zendex management had previous experience in the art business and believed an opportunity existed for the creation of a site dedicated to bringing buyers and sellers of art together. Zendex believes it can act as a consignment seller of the art. In addition to the art sales, Zendex will create content on its site aimed at both the artist and the general public covering news related to the art world and featuring different artists. As the website’s popularity grows, the site will seek to obtain additional revenue through advertisements.
Accounting method – The Company’s financial statements are prepared using the accrual method of accounting. The Company has elected a December 31 year end.
Use of estimates – These financial statements are prepared in conformity with accounting principles generally accepted in the United States of America and require that management make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. The use of estimates and assumptions may also affect the reported amounts of revenues and expenses. Actual results could differ from those estimates or assumptions.
Revenue recognition – We recognize revenue in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 104, “Revenue Recognition” (“SAB 104”). Under SAB 104, revenue is recognized at the point of passage to the customer of title and risk of loss, when there is persuasive evidence of an arrangement, the sales price is determinable, and collection of the resulting receivable is reasonably assured. During the year ended December 31, 2015 we received revenue of $83,250 from the brokering of pieces of artwork and paid out $63,900 in commissions resulting in a gross profit of $19,350.
Cash and cash equivalents – The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The Company’s cash balance held at a single institution at times may be in excess of the federally insured maximum of $250,000.
Recently enacted accounting pronouncements – The Company has reviewed all recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on its results of operation, financial position or cash flows. Based on that review, the Company believes that none of these pronouncements will have a significant effect on its current or future earnings or operations.
Income taxes – The Financial Accounting Standards Board (FASB) has issued FASB ASC 740-10 (Prior authoritative literature: Financial Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - An Interpretation of FASB Statement No. 109 (FIN 48). FASB ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements in accordance with prior literature FASB Statement No. 109, Accounting for Income Taxes. This standard requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than- not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements. As a result of the implementation of this standard, the Company performed a review of its material tax positions in accordance with recognition and measurement standards established by FASB ASC 740-10.
Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry-forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
F - 6
Zendex Holdings, Inc.
Notes to Financial Statements
December 31, 2015 and 2014
Note 1 – Organization and Summary of Significant Accounting Policies (continued)
Income taxes – continued
Deferred tax asset and the valuation account are as follows at December 31, 2015 and 2014:
| | | | | |
| | 2015 | | | 2014 |
| | | | | |
Net operating loss carryforward | $ | 12,470 | | $ | 11,930 |
Nondeductible interest | | 5,901 | | | 4,200 |
Valuation allowance | | (18,371) | | | (16,130) |
| | | | | |
Deferred tax asset | $ | - | | $ | - |
The components of income tax expense are as follows:
| | | | | |
| | 2015 | | | 2014 |
| | | | | |
Current federal tax | $ | (1,690) | | $ | (2,240) |
Current state tax | | (563) | | | (740) |
| | | | | |
Change in valuation allowance | | 2,253 | | | 2,980 |
| | | | | |
| $ | - | | $ | - |
The Company has adopted FASB ASC 740-10 to account for income taxes. The Company currently has no issues creating timing differences that would mandate deferred tax expense. Net operating losses would create possible tax assets in future years. Due to the uncertainty of the utilization of net operating loss carry forwards, an evaluation allowance has been made to the extent of any tax benefit that net operating losses may generate. A provision for income taxes has not been made due to net operating loss carry-forwards of approximately $63,000 and $59,000 as of December 31, 2015 and 2014, respectively, which may be offset against future taxable income through 2034. No tax benefit has been reported in the financial statements.
The Company did not have any tax positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase or decrease within the next 12 months.
The Company includes interest and penalties arising from the underpayment of income taxes in the statements of operations in the provision for income taxes. As of December 31, 2015 and 2014 the Company had no accrued interest or penalties related to uncertain tax positions.
Tax years open to examination by the IRS are 2012 through 2015.
F - 7
Zendex Holdings, Inc.
Notes to Financial Statements
December 31, 2015 and 2014
Note 1 – Organization and Summary of Significant Accounting Policies (continued)
Basic and Diluted Earnings Per Share - Basic earnings per share is computed by dividing net income attributable to common shares by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income attributable to common shares for the period by the weighted average number of common and potential common shares outstanding during the period. Potential common shares, composed of incremental common shares issuable upon the exercise of stock options and warrants, are included in the calculation of diluted net income per share to the extent such shares are dilutive.
The following table sets forth the computation of basic income per share for the period ended December 31, 2015 and 2014:
| | | | | |
| | 2015 | | | 2014 |
| | | | | |
Income (loss) (numerator) | $ | (11,269) | | $ | (14,938) |
Shares (denominator) | | 1,903,519 | | | 1,903,519 |
| | | | | |
Net income (loss) per share – basic and diluted |
$ |
(.00) | |
$ |
(.00) |
Fair value of financial instruments – On March 9, 2011 (inception), the Company adopted FASB ASC 820-10-50, “Fair Value Measurements”. This guidance defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows:
•Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets
or liabilities in active markets.
•Level 2 inputs the valuation methodology include quoted prices for similar assets and liabilities
in active markets, and inputs that are observable for the asset or liability, either directly or indirectly,
for substantially the full term of the financial instrument.
•Level 3 inputs to valuation methodology are unobservable and significant to the fair measurement.
The carrying amounts reported in the balance sheet for the cash and cash equivalents and current liabilities each qualify as financial instruments and are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The carrying value of the related party payable approximates fair value because negotiated terms and conditions are consistent with current market rates as of December 31, 2014.
Note 2 – Concentrations of Risk
The Company’s operations to date have consisted of only seven significant revenue transactions. Future transactions remain uncertain.
Note 3 – Going Concern
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has a limited operating history and their operations thus far have consisted of only five significant transactions. These factors, among others, may indicate that the Company will be unable to continue as a going concern for a reasonable period of time.
The financial statements do not include any adjustments relating to the recoverability and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis and ultimately to attain profitability. The Company intends to seek additional funding through equity offerings to fund its business plan. There is no assurance that the Company will be successful in raising additional funds.
F - 8
Zendex Holdings, Inc.
Notes to Financial Statements
December 31, 2015 and 2014
Note 4 – Equity Transactions
The Company is authorized to issue a total of 110,000,000 shares consisting of 10,000,000 shares of preferred stock and 100,000,000 shares of common stock having a par value of $0.001 per share.
During the year ended December 31, 2015, the Company authorized a reverse split in its issued and outstanding shares of common stock, so that the shares currently issued and outstanding were reverse split on a 1 for 10 basis. Stockholders will receive one share of the post-split common stock for each 10 shares of common stock held. Fractional shares were rounded up. No shareholder who currently had 100 or more shares was reduced below 100 shares. The reverse split did not result in any modification of the rights of stockholders and had no effect on the stockholders’ equity of the Company. Total shares outstanding after the reverse split was 1,903,519.
Note 5 – Related Party Transactions
The Company has an unsecured payable to the president and sole director with a balance of $18,103 and $18,103 at December 31, 2015 and 2014, respectively. Interest of 6% was computed on this balance of the related party payable. Accrued interest is $3,564 and $2,478 as of December 31, 2015 and 2014, respectively.
The Company also has an unsecured promissory note bearing interest of 18% per annum with a stockholder. During the year s ended December 31, 2015 and 2014, the stockholder loaned an additional $3,000 and $6,777, respectively. The principal balance as of December 31, 2015 and 2014 is $42,323 and $39,323, with accrued interest of $41,272 and $34,163, respectively.
Note 6 – Subsequent Events
The Company has evaluated all subsequent events from the balance sheet date through the date the financial statements were issued, and determined there are no material transactions that have not been disclosed.
F - 9
