UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
Form 10-Q/A
Amendment No. 2
(Mark one)
þ Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period September 30, 2013
Transition Report under Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from ______________ to _____________
Commission file number 333-127389
ZD VENTURES CORPORATION
(Exact name of registrant as specified in its charter)
WEBTRADEX INTERNATIONAL CORPORATION
(Former name or former address, if changes from last report)
| Nevada | 99-0381956 | |
| (State or other jurisdiction of incorporation) | (IRS Employer Identification No.) |
47 Avenue Road, Suite 200
Toronto, ON Canada M5R 2G3
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code: (416) 929-1806
Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act 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 þ 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 (ss.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 þ No
Indicate by check mark whether the registrant is an accelerated filer, a non-accelerated filer, or a smaller reporting company.
| Large accelerated filer | Accelerated filer |
| Non-accelerated filer | Smaller reporting company þ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No þ
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:
As of November 11, 2013, there were approximately 15,943,300 shares of the Issuer's common stock, par value $0.001 per share outstanding.
EXPLANATORY NOTE
This Amendment is being filed to revise the financial statements and certain disclosures relating to the treatment of the acquisition of the B’Wished website, which was original accounted for as a business acquisition and has now been corrected to reflect an acquisition of assets in the financial statements for the year ended March 31, 2013 (see 10-K/A Amendment #3 filed on February 27, 2014.)
The Amendment sets forth the original filing on Form 10-Q and subsequent first Amendment Filing on Form 10-Q/A, filed with the Securities and Exchange Commission on November 12, 2013 in their entirety. Except as described above, the Amendment does not modify or update the disclosures presented in, or exhibits to, the original filing in any way.
The Amendment continues to speak as of the date of the original filing. Furthermore, the Amendment does not reflect events occurring after the filing date of the original filing. Accordingly, the Amendment should be read in conjunction with the Company’s filings made with the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act subsequent to the original filing date of the Form 10-Q.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this quarterly report on Form 10-Q contain or may contain forward-looking statements that are subject to known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements were based on various factors and were derived utilizing numerous assumptions and other factors that could cause our actual results to differ materially from those in the forward-looking statements. These factors include, but are not limited to, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk, U.S. and global competition, and other factors including the risk factors set forth in our Form 10-K. Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described in connection with any forward-looking statements that may be made herein. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. Readers should carefully review this quarterly report in its entirety, including but not limited to our financial statements and the notes thereto. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events. For any forward-looking statements contained in any document, we claim the protection of the safe harbour for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
| INDEX | |
| PART I | FINANCIAL INFORMATION |
| Item 1 | Condensed 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 | Legal Proceedings |
| Item 1A | Risk Factors |
| Item 2 | Unregistered Sales of Equity Securities and Use of Proceeds |
| Item 3 | Defaults upon Senior Securities |
| Item 4 | Mine Safety Disclosures |
| Item 5 | Other Information |
| Item 6 | Exhibits |
| Signature |
PART I
FINANCIAL INFORMATION
Item 1 – Financial Statements
INDEX TO FINANCIAL STATEMENTS
| Condensed Balance Sheets | F-2 |
| Condensed Statements of Operations | F-3 |
| Condensed Statements of Cash Flows | F-4 |
| Notes to Condensed Financial Statements | F-5 |
ZD Ventures Corporation
f/k/a Webtradex International Corporation
(A development stage enterprise)
Balance Sheets
| September-30-2013 | March-31-2013 | ||||
(Unaudited) (Restated) | (Audited) (Restated) | ||||
| ASSETS | |||||
| CURRENT ASSETS | |||||
| Cash | $ | 2,544 | $ | 3,657 | |
| Total Current Assets | 2,544 | 3,657 | |||
| Intangible assets | 502,516 | 502,516 | |||
| Total Assets | $ | 505,060 | $ | 506,173 | |
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | |||||
| CURRENT LIABILITIES | |||||
| Accounts payable and accrued liabilities | $ | 22,442 | $ | 42,459 | |
| Advances from stockholder | 198,079 | 160,842 | |||
| Note payable | - | 325,000 | |||
| Total Current Liabilities | 220,521 | 528,301 | |||
| LONG-TERM LIABILITIES | |||||
| Note payable | 325,000 | - | |||
| Total Long-Term Liabilities | 325,000 | - | |||
| Total Liabilities | 545,521 | 528,301 | |||
| STOCKHOLDERS’ DEFICIT | |||||
| Common stock, $0.001 par value, authorized 200,000,000 shares; | |||||
| 15,943,300 shares issued and outstanding at September 30, 2013 and March 31, 2013. | 15,943 | 15,943 | |||
| Additional paid-in capital | 70,157 | 70,157 | |||
| Accumulated other comprehensive income (loss) | (393) | 614 | |||
| Deficit accumulated during the development stage | (126,168) | (108,842) | |||
| Total Stockholders’ Deficit | (40,461) | (22,128) | |||
| Total Liabilities and Stockholders’ Deficit | $ | 505,060 | $ | 506,173 | |
The accompanying notes are an integral part of the financial statements.
ZD Ventures Corporation
f/k/a Webtradex International Corporation
(A development stage enterprise)
Statements of Operations
(Unaudited)
| Three months ended | Six months ended | ||||||
| September 30, | 2013 | 2012 | 2013 | 2012 | Cumulative from February 23, 2005 (inception) to September 30, 2013 | ||
| REVENUES | $- | $- | $- | $- | $- | ||
| OPERATING EXPENSES: | |||||||
| General and admin expenses | 2,023 | 2,998 | 3,492 | 3,762 | 62,090 | ||
| Professional fees | 1,500 | 13,297 | 5,500 | 14,297 | 140,535 | ||
| Travel and promotions | - | 1,294 | 3,526 | 1,294 | 14,526 | ||
| Geological, mineral, prospecting costs | - | - | - | - | 9,740 | ||
| Total expenses | 3,523 | 17,589 | 12,518 | 19,353 | 226,891 | ||
| Loss from operations | (3,523) | (17,589) | (12,518) | (19,353) | (226,891) | ||
| Gain on disposition of debt | - | - | - | - | 120,638 | ||
| Interest expense | (757) | (3,339) | (4,808) | (3,339) | (19,915) | ||
| Net loss | (4,280) | (20,928) | (17,326) | (22,692) | (126,168) | ||
| Other comprehensive loss | (4,397) | (592) | (1,007) | (571) | (393) | ||
| Comprehensive loss | $(8,677) | $(21,520) | $(18,333) | $(23,263) | $(126,561) | ||
| Basic and diluted loss per weighted average common share | $(0.00) | $(0.00) | $(0.00) | $(0.00) | |||
| Number of weighted average common shares outstanding | 15,943,300 | 15,536,087 | 15,943,300 | 15,510,000 | |||
The accompanying notes are an integral part of the financial statements.
ZD Ventures Corporation
f/k/a Webtradex International Corporation
(A development stage enterprise)
Statements of Cash Flows
(Unaudited)
| Six months ended September 30, | 2013 | 2012 | Cumulative from February 23, 2005 (inception) to September 30, 2013 |
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||
| Net loss | $(17,326) | $(22,692) | $(126,168) |
| Adjustments to reconcile net loss to net cash used by operating activities: | |||
| Forgiveness of debt | - | - | (120,638) |
| Common stock issued for services | - | - | 5,500 |
| Amortization of note payable discount | - | - | 3,665 |
| Amortization of prepaid interest | - | - | 6,549 |
| Changes in operating assets and liabilities | |||
| Increase (decrease) in accounts payable and accrued liabilities | (20,017) | 21,597 | 20,816 |
| Net cash (used) by operating activities | (37,343) | (1,095) | (210,276) |
| CASH FLOWS FROM (INTO) INVESTING ACTIVITIES: | |||
| Development costs incurred | - | (47,384) | (117,016) |
| Net cash (used in) investing activities | - | (47,384) | (117,016) |
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||
| Common stock issued for cash | - | - | 20,100 |
| Advances from stockholder | 37,238 | 56,948 | 198,080 |
| Proceeds from notes payable | - | - | 117,050 |
| Payments on notes payable | - | - | (5,000) |
| Net cash provided by financing activities | 37,238 | 56,948 | 330,230 |
| Effects of other comprehensive income | (1,007) | (571) | (393) |
| Net increase in cash | (1,113) | 7,898 | 2,544 |
CASH, beginning of year | 3,657 | 188 | - |
CASH, end of period | $2,544 | $8,086 | $2,544 |
| SUPPLEMENTAL DISCLOSURES | |||
| Non-Cash Investing Activities: | |||
| Debt settled in common shares | $- | $60,500 | $65,500 |
| Intangibles acquired for debt | $- | $385,500 | $385,500 |
The accompanying notes are an integral part of the financial statements.
ZD Ventures Corporation
f/k/a Webtradex International Corporation
(A development stage enterprise)
Three and six months ended September 30, 2013
NOTES TO CONDENSED FINANCIAL STATEMENTS
NOTE 1 – BUSINESS DESCRIPTION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
| (A) | Business Description |
ZD Ventures Corporation, formerly Webtradex International Corporation, (the “Company”), incorporated on February 23, 2005 under the laws of the state of Nevada, is a development stage corporation, and operates from its executive office in Toronto, Ontario, Canada. The Company is currently in the development stage as defined under Financial Accounting Standards Board Accounting Standards Codification (“ASC”) 915-10, “Development Stage Entities". All activities of the Company to date relate to its organization, initial funding and share issuances.
In July 2012, the Company acquired certain intellectual properties related to a social website under development (Note 4). The company plans to complete the design and development of this web site and to launch it commercially as soon as possible.
| (B) | Basis of Presentation |
The unaudited interim financial statements as of and for the three and six months ended September 30, 2013 have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting. These financial statements are unaudited and, in the opinion of management, include all adjustments (consisting of normal recurring adjustments and accruals) necessary to present fairly the balance sheets, operating results and cash flows for the periods presented in accordance with accounting principles generally accepted in the United States of America. Operating results for the three and six months ended September 30, 2013 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2014. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted in accordance with the SEC’s rules and regulations for interim reporting.
| (C) | Use of estimates |
The financial statements have been prepared in conformity with generally accepted accounting principles (GAAP). In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the statement of financial position and revenues and expenses for the year then ended. Actual results may differ significantly from those estimates.
| (D) | Intangible assets |
The Company evaluates intangible assets for impairment annually or more frequently when an event occurs or circumstances change that indicate that the carrying value may not be recoverable. Intangible assets are tested for impairment by first comparing the book value of net assets to the fair value. If the fair value is determined to be less than the book value, a second step is performed to compute the amount of impairment as the difference between the estimated fair value and the carrying value. The fair value is estimated using discounted cash flows.
Forecasts of future cash flows are based on management’s best estimate of future net sales and operating expenses, based primarily on estimated category expansion, market segment share and general economic conditions.
ZD Ventures Corporation
(A development stage enterprise)
Three and six months ended September 30, 2013
NOTES TO CONDENSED FINANCIAL STATEMENTS
| (E) | Foreign Currency Translation |
The Company’s functional and reporting currency is the United States Dollar. Assets and liabilities recorded in currencies other than US dollars are translated into USD at the prevailing exchange rates in effect at the end of the reporting period, the historical rate for stockholders’ equity (deficiency) and revenues, expenses, gains and losses shall be translated at the exchange rate on the dates on which these elements are recognized, or if found to be impractical, the average exchange rate for the period may be used to translate these elements. Adjustments that arise from translation into the reporting currency are recorded as an exchange gain or loss and are recognized as a component of other comprehensive income.
| (F) | Income taxes |
The Company accounts for income taxes under FASB Codification Topic 740 which requires use of the liability method. Topic 740 provides that deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purpose, referred to as temporary differences. Deferred tax assets and liabilities at the end of each period are determined using the currently enacted tax rates applied to taxable income in the periods in which the deferred tax assets and liabilities are expected to be settled or realized. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.
It is management's opinion that all adjustments necessary for a fair statement of the results of the interim periods have been made, and all adjustments are of a normal recurring nature.
NOTE 2 - GOING CONCERN
The Company’s financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.
In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital from significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. As of September 30, 2013, the Company has an accumulated deficit amount of $126,168.
ZD Ventures Corporation
(A development stage enterprise)
Three and six months ended September 30, 2013
NOTES TO CONDENSED FINANCIAL STATEMENTS
NOTE 3 – RECENT ACCOUNTING PRONOUNCEMENTS
The management has evaluated all recently issued accounting pronouncements through to the filing date of these financial statements and believes that these pronouncements, although for the current filing date, will not have a material effect on the Company’s position and results of operations may have effects in future.
In July 2012, the FASB issued Accounting Standards Update No. 2012-02 “Testing Indefinite-Lived Intangible Assets for Impairment” (ASU 2012-02), which is included in ASC Topic 350 (Intangibles—Goodwill and Other). ASU 2012-02 gives entities the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of an intangible asset is less than its carrying amount. If greater than 50 percent likelihood exists that the fair value is less than the carrying amount then a quantitative impairment test as described in Subtopic 350-30 must be performed. The amendments are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. The adoption of this guidance does not have a material effect on the Company’s financial statements as of this date.
In July 2013, the FASB issued Accounting Standards Update No. 2013-11 “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists” (ASU 2013-11), which is included in ASC Topic 740 (Income Taxes). ASU 2013-11 requires an entity to net its liability for unrecognized tax positions against a net operating loss carryforward, a similar tax loss or a tax credit carryforward when settlement in this manner is available under the tax law. The provisions of this new guidance are effective for reporting periods beginning after December 15, 2013. We are currently evaluating the impact of the new guidance on our financial statements.
NOTE 4 – INTANGIBLE ASSETS (RESTATED)
The following were the movements in the intangible assets:
| September 30, 2013 | March 31, 2013 | |
| Balance, beginning of the period | $ 502,516 | $ - |
| Amounts relating to acquisition during the period | - | 385,500 |
| Development costs incurred during the period | - | 117,016 |
| Balance, end of the period | $ 502,516 | $ 502,516 |
Development costs are comprised of fees paid to various consultants for content development, design and editorial work on the B’Wished website.
The B’Wished website is currently undergoing certain technical changes with new features such as wire-framing the new User Experience and the uploading facilities of direct product details for suppliers. The revised and updated website is scheduled to launch by early December 2013.
Management reviewed the intangible assets for potential impairment in their carrying costs. Given the on-going work and scheduled launch date to be within the next few months, management has concluded that current carrying costs should be revisited for potential impairment in December 2013.
No amortization is applied to the carrying cost of the intangible assets since they are still under development.
ZD Ventures Corporation
(A development stage enterprise)
Three and six months ended September 30, 2013
NOTES TO CONDENSED FINANCIAL STATEMENTS
NOTE 5 – ADVANCES FROM STOCKHOLDERS
| September 30, 2013 | March 31, 2013 | |
| Balance, beginning of the period | $ 160,842 | $ 35,422 |
| funds advanced | 37,237 | 125,420 |
| Balance, end of the period | $ 198,079 | $ 160,842 |
Funds were advanced from time to time by Current Capital Corporation (“CCC”), a Canadian based private company in Ontario, fully owned by Mr. John Robinson, a shareholder of the Company. Advances are repayable on demand and carry no interest; they have therefore been classified as current liabilities.
Kam Shah, the CEO of the Company, provides accounting services to CCC.
NOTE 6 – NOTE PAYABLE
The note payable issued to Birthday Slam Corporation (“BSC”), matured for payment on July 17, 2013. However, the Company negotiated a five-year extension up to July 17, 2018. The note holder agreed that no further interest is to be accrued after the original maturity date of July 17, 2013 and that BSC will be entitled to receive 5% of the gross revenue earned by the Company until full settlement of the Note.
Total interest accrued on this note payable up to July 17, 2013 is $16,250.
NOTE 7 – STOCKHOLDERS’ EQUITY
At September 30, 2013, the Company has 200,000,000 common shares of par value $0.001 common stock authorized. During the year-ended March 31, 2013, the Company issued common stock as a part of the purchase agreement for the acquisition of the assets of BSC and in settlement of consulting fees. As at September 30, 2013 and March 31, 2013 the Company had a total of 15,943,300 common shares outstanding.
Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with our Financial Statements and Notes thereto appearing elsewhere in this Report on Form 10-Q as well as our other SEC filings.
Overview
We were incorporated on February 23, 2005 under the laws of the state of Nevada. We have had several changes in our officers and directors since inception up to March 9, 2010 when Mr. Kam Shah became our chairman of the board of directors, president, secretary, treasurer and chief executive officer. On June 28, 2013, the Company changed its name from Webtradex International Corporation to ZD Ventures Corporation (“ZDV”, the “Company”).
We do not have any subsidiaries. Our principal office is located at 47 Avenue Road, Suite 200, Toronto, Ontario, Canada M5R 2G3. Our telephone number is (416) 929-1806. Our fiscal year end is March 31.
ZDV’s current business strategy involves developing a social website aimed at driving traffic for various sellers of products and services which can generate revenue through commissions from the associated sellers and advertisements, as well as other related sources for the Company. The Company is a developmental stage corporation and has not yet generated or realized significant revenues from business operations.
In July 2012, the Company acquired all intellectual property related to the development of B’Wished, including all related URLs, designs, concepts and software codes which it plans to use in the continuous development of an interactive website - B’Wished - and generate business in the social e-commerce sector.
The following discussion and analysis should be read in conjunction with the financial statements and accompanying notes of the Company for the three and six months ended September 30, 2013 and the audited financial statements and notes for the year ended March 31, 2013.
Business Plan and Strategy
B´Wished is an interactive, social website dedicated to helping its visitors find the perfect gift for someone on any occasion. By combining social media with e-commerce, B’Wished fills an important gap in the increasingly popular social shopping industry. Through an emphasis on what a person wants instead of what companies offer, B’Wished will enhance the personal satisfaction experienced through giving.
The Company is working towards commercially developing B’Wished, an intelligent and intuitive gift giving platform which will use interactive tools, including personal profiling, in an effort to attract more visitors and revenues. Based on the work done and to be done, the Company expects the commercial launch in early December 2013. These planned activities are however subject to the Company being successful in raising the required capital either through a private placement or from the existing shareholders.
Results of operations
The Company did not have any operating income since its inception on February 23, 2005 through September 30, 2013. For the period from inception through to the quarter ended September 30, 2013, the Company has recognized a net loss of $126,168.
General and administrative expenses were approximately the same for the three and six months ended September 30, 2013 and September 30, 2012. As previously mentioned, the B’Wished website remains under development as updates take place in preparation for the commercial launch targeted for the end of 2013.
Professional Fees
Professional fees for the three and six months ended September 30, 2013 include the quarterly fees charged by the independent accountant. Professional fees for the three and six months ended September 30, 2012 decreased from $14,297 to $5,500 for the six months ended September 30, 2012 and 2013, respectively and from $13,297 to $1,500 for the three months ended September 30, 2012 and 2013, respectively. Professional fees were comprised of fees charged by the independent accountant as well as fees paid to a consultant who acted as the chief operating and investment officer. The contract with this consultant was terminated on September 13, 2012, resulting in the decrease compared to 2013.
The company’s CEO currently does not charge any fees.
Travel and Promotional Expenses
The travel and promotion expenses for the six month period ended September 2013 and September 2012 were charged by two independent consultants, related to travel, hotel and meal expenses in while in Europe, meeting with potential investors. For the six months ended September 2012, travel and promotional expenses were charged by the Company’s chief operating and investment officer, for travel and meal expenses while meeting with potential investors overseas.
Interest Expense
Interest expense for the six month period ended September 30, 2013 totalled $4,808, compare to $3,339 for the six month period ended September 30, 2012 and $757 compared to $3,339 for the three months ended September 30, 2013 and 2012, respectively.
The minor difference in the interest expense between the two periods is due to the fact that the interest for the six month period ended September 30, 2013 ended on the 17th of July.
No interest was accrued after July 17, 2013, due to the negotiated five year extension of the note payable without any further interest to be charged. BSC will be entitled to receive 5% of the gross revenue earned by ZD Ventures until the full settlement of the note.
Financial Condition, Liquidity and Capital Resources
For the three and six months ended September 30, 2013 and 2012, the Company has not generated cash flow from operations. Consequently, the Company has been dependent upon its shareholders and associates to fund its cash requirements.
Our present material commitments are professional and administrative fees and expenses associated with the preparation of our filings with the U.S. Securities and Exchange Commission (“SEC”) and other regulatory requirements and the debt associated with the acquisition of B’Wished.
As of September 30, 2013, the Company had cash of $2,544. The Company's total assets decreased from $506,173 as of March 31, 2013 to $505,060 as at September 30, 2013. Total liabilities increased from $528,301 as of September 30, 2012 to $545,521 as of September 30, 2013. These increases are attributable to additional borrowing to pay operating expenses.
The Company continues to seek advances from its shareholders and also looks for opportunities to raise money through private equity. There is however no guarantee that the Company will be successful in these efforts. In the event that the Company is unable to raise the required funding, it may have to abandon its project.
Intangible Assets
On July 17, 2012, the Company acquired all intellectual property related to the development of B’Wished; from BSC, an Ontario, Canada incorporated Private Corporation, which is owned by a shareholder of the Company. The acquisition included all assets comprising of a website and related applications for commercial use under development at a total purchase price of $385,500. The purchase price was allocated to the intangible assets based on their estimated fair value on the acquisition date. The fair value assigned to identifiable intangible assets acquired has been determined primarily by using the income and cost approach. Purchased identified intangible assets which comprise a website and related applications under development of B’Wished, are included as intangible assets and will be amortized on a straight line basis over their useful life, considered to be five years upon commencement of their commercial usage.
The purchase price includes a $325,000 note payable, bearing a 5% interest rate and assumed four BSC loans totaling $60,500 from non-related parties to be settled by the issuance of 400,000 restricted common shares of the Company. As of July 17, 2013, the note payable matured and its terms were re-negotiated between the Company and the note holder. The note was extended for five-years, with a maturity date of July 17, 2018, without any further interest to be charged. BSC will be entitled to receive 5% of the gross revenue earned by ZD Ventures until the full settlement of the note.
The Company has entered into agreements with various affiliate partners whose products and services will be promoted to the visitors of the B’Wished website. The affiliation does not involve any commitments on either party except that when a sale is generated through the B’Wished website with any of the affiliated partners, the Company will be entitled to a commission fixed as a percentage of the value of the sales.
Currently, the new innovation and design team of the B’Wished project is working on the completion of wire-framing the new user experience. Upon completion of this step, the project will be handed off to the front end designer for graphics and CSS for the coding team. Our touch point for B’Wished will be mobile focused, but we will maintain our web based presence. We have added one very important feature to be developed and implement prior to the full launch – the B’Wished API, allowing suppliers to upload products and merchandise. Our target date is early December 2013, so that we will be able to monetize and observe and test user traffic from the Christmas buying season.
Since the acquisition, direct development costs incurred total $117,016, which have been capitalized up to and including September 30, 2013. These costs were comprised of fees paid to various consultants for content development, design and editorial work on the B’Wished website.
The B’Wished website is currently undergoing certain technical changes with new features being added, as previous mentioned in this report. The key shareholders have indicated their willingness to support the financing of the proposed development work. The revised and updated website is scheduled to launch by early December 2013.
Management reviewed the intangible assets for potential impairment in their carrying costs. Given the on-going work and scheduled launch date to be within the next few months, management has concluded that current carrying costs should be revisited for potential impairment in December 2013.
No amortization is applied to the carrying cost of the intangible assets since they are still under development.
Going Concern
The accompanying financial statements have been prepared assuming that we will continue as a going concern. We have a stockholders deficit of $126,168 and a working capital deficiency of $217,977 at September 30, 2013, and net losses from operations of $17,326 and $22,692, respectively, for the six month period ended September 30, 2013 and 2012. These conditions raise substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.
Off-balance sheet arrangements
The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect or change on the Company’s financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
Item 3 - Quantitative and Qualitative Disclosures about Market Risk
As a smaller reporting company, as defined in Rule 12b-2 of the Exchange Act, we are not required to provide the information required by this item.
Item 4T - Controls and Procedures
Our management, with the participation of our Chief executive officer who is also our financial officer, carried out an evaluation of the effectiveness of our “disclosure controls and procedures” (as defined in the Exchange Act Rules 13a-15(e) and 15-d-15(e)) as of the end of the period covered by this report (the “Evaluation Date”). Based upon that evaluation, the chief executive and financial officer concluded that as of the Evaluation Date, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (ii) is accumulated and communicated to our management, including our chief executive and financial officer, as appropriate to allow timely decisions regarding required disclosure.
Our management, including chief executive and financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, management’s evaluation of controls and procedures can only provide reasonable assurance that all control issues and instances of fraud, if any, within ZD Ventures Corporation have been detected.
PART II
OTHER INFORMATION
Item 1: Legal Proceedings
None.
Item 1A: Risk Factors
No material changes in previously disclosed risk factors presented in Form 10-K, filed on July 9, 2013.
None.
Item 3: Defaults upon Senior Securities
None.
Item 4: Mine Safety Disclosures
None.
None.
Item 6: Exhibits
(a) The following sets forth those exhibits filed pursuant to Item 601 of Regulation S-K:
Exhibit
Number Descriptions
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10.6 Asset Purchase Agreement, incorporated herein by reference to Form 8-K filed on July 19, 2012.
| 31.1 | *Certification of the Chief Executive and Financial Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002. |
| 32.1 | *Certification of the Chief Executive and Financial Officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002. |
| 101 | *The following financial information from our Quarterly Report on Form 10-Q/A for the quarter ended September 30, 2013 has been formatted in Extensible Business Reporting Language (XBRL): (i) Balance Sheet, (ii) Statement of Operations, (iii) Statement of Cash Flows, and (iv) Notes to Financial Statements |
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* Filed herewith.
(b) The following sets forth the Company's reports on Form 8-K that have been filed during the quarter for which this report is filed:
None.
SIGNATURE
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.
ZD Ventures Corporation
By: /s/ Kam Shah
Kam Shah
Chief Executive Officer,
President and Chairman of the Board*
Date: April 2, 2014
* Kam Shah has signed both on behalf of the registrant as a duly authorized officer and as the Registrant's principal accounting officer.