UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
Form 10-Q
(Mark one)
[X] Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period June 30, 2016
[ ] 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)
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) 860-0211
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 [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 ST (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 [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
Large accelerated filer [ ] | Accelerated filer [ ] |
Non-accelerated filer [ ] | 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]
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 August 10, 2016, there were 34,307,116 shares of the Issuer's common stock, par value $0.001 per share outstanding.
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. 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.
2
INDEX
3
PART I. FINANCIAL INFORMATION
Item 1 - Financial Statements
INDEX TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
F-2 | |
|
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F-3 | |
|
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F4 | |
|
|
F-5 | |
|
|
F-6 |
4
ZD Ventures Corporation
Condensed Balance Sheets
| June 30, 2016 |
| March 31, 2016 | ||
| (Unaudited) |
|
| ||
ASSETS |
|
|
| ||
CURRENT ASSETS |
|
|
| ||
Cash | $ | 7,846 |
| $ | 8,488 |
Prepaid expenses |
| 408 |
|
| 583 |
Total current assets |
| 8,254 |
|
| 9,071 |
Total Assets | $ | 8,254 |
| $ | 9,071 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT |
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
Accounts payable and accrued liabilities | $ | 104,681 |
| $ | 95,052 |
Convertible debt |
| 8,000 |
|
| 28,000 |
Total Current Liabilities |
| 112,681 |
|
| 123,052 |
Total Liabilities |
| 112,681 |
|
| 123,052 |
|
|
|
|
|
|
STOCKHOLDERS’ (DEFICIT) EQUITY |
|
|
|
|
|
Common stock, $0.001 par value, authorized 200,000,000 shares; 34,307,116 shares issued and outstanding at June 30, 2016 and 33,517,461 at March 31, 2016, respectively |
| 34,307 |
|
| 33,517 |
Additional paid-in capital |
| 3,056,843 |
|
| 3,030,633 |
Accumulated other comprehensive income |
| 68,428 |
|
| 68,269 |
Accumulated deficit | $ | (3,264,005) |
| $ | (3,246,400) |
Total Stockholders’ deficit |
| (104,427) |
|
| (113,981) |
Total Liabilities and Stockholders’ deficit | $ | 8,254 |
| $ | 9,071 |
The accompanying notes are an integral part of the condensed financial statements.
F-1
ZD Ventures Corporation
Condensed Statements of Operations and Comprehensive Loss
(Unaudited)
Three months ended June 30, | 2016 |
| 2015 | ||
|
|
|
|
|
|
REVENUES | $ | - |
| $ | - |
|
|
|
|
|
|
OPERATING EXPENSES: |
|
|
|
|
|
General and administrative expenses |
| 1,696 |
|
| 4,603 |
Professional fees |
| 1,100 |
|
| 6,000 |
Consulting fees |
| 14,250 |
|
| 16,680 |
Travel, meals and promotions |
| - |
|
| 6,155 |
Total expenses |
| 17,046 |
|
| 33,438 |
Loss from operations |
| (17,046) |
|
| (33,438) |
Interest expense |
| (559) |
|
| (21,954) |
Net loss |
| (17,605) |
|
| (55,392) |
Other comprehensive gain |
| 159 |
|
| (1,411) |
Comprehensive (loss) | $ | (17,446) |
| $ | (56,803) |
|
|
|
|
|
|
Net loss per share, basic and dilutive | $ | (0.00) |
| $ | (0.00) |
Number of weighted average common shares outstanding |
| 34,307,116 |
|
| 25,868,848 |
The accompanying notes are an integral part of the condensed financial statements.
F-2
ZD Ventures Corporation
Condensed Statement of Shareholders’ Equity
(Unaudited)
| Number of shares | Common stock | Additional paid-in capital | Accumulated deficit | Accumulated Other Comprehensive Income | Total Stockholders' Equity | |||||
BEGINNING BALANCE, April 1, 2015 | 25,686,848 | $ | 25,868 | $ | 2,127,759 | $ | (2,525,343) | $ | 34,692 | $ | (337,024) |
Convertible loans with BCF exceeding face value |
|
|
|
| 30,000 |
|
|
|
|
| 30,000 |
CEO fee forgiven |
|
|
|
| 15,000 |
|
|
|
|
| 15,000 |
Translation differences |
|
|
|
|
|
|
|
| (1,411) |
| (1,411) |
Net loss |
|
|
|
|
|
| (55,392) |
|
|
| (55,392) |
ENDING BALANCE, June 30, 2015 | 25,686,848 | $ | 25,868 | $ | 2,172,759 | $ | (2,580,735) | $ | 33,281 | $ | (348,827) |
BEGINNING BALANCE, April 1, 2016 | 33,517,461 | $ | 33,517 | $ | 3,030,633 | $ | (3,246,400) | $ | 68,269 |
| (113,981) |
Shares issued in settlement of fee | 100,000 |
| 100 |
| 6,900 |
|
|
|
|
| 7,000 |
shares issued in settlement of convertible loan | 689,655 |
| 690 |
| 19,310 |
|
|
|
|
| 20,000 |
Translation differences |
|
|
|
|
|
|
|
| 159 |
| 159 |
Net loss |
|
|
|
|
|
| (17,605) |
|
|
| (17,605) |
|
|
|
|
|
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|
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ENDING BALANCE, June 30, 2016 | 34,307,116 | $ | 34,307 | $ | 3,056,843 | $ | (3,264,005) | $ | 68,428 | $ | (104,427) |
The accompanying notes are an integral part of the condensed financial statements.
F-3
ZD Ventures Corporation
Condensed Statements of Cash Flows
(Unaudited)
Three months ended June 30, | 2016 |
| 2015 | ||
|
|
|
| ||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
| ||
Net loss | $ | (17,605) |
| $ | (55,392) |
Adjustments to reconcile net loss to net cash used by operating activities: |
|
|
|
|
|
Furniture written off |
| - |
|
| 4,673 |
Consulting fee settled in shares |
| 7,000 |
|
|
|
CEO fee forgiven |
| - |
|
| 15,000 |
Amortization of note payable discount |
| - |
|
| 19,397 |
Changes in operating assets and liabilities |
|
|
|
|
|
Decrease in prepaid expenses |
| 175 |
|
| - |
Decrease in prepaid rent |
| - |
|
| 8,326 |
(Increase) in note receivable |
| - |
|
| (2,000) |
Increase (decrease) in accounts payable and accrued liabilities |
| 9,629 |
|
| (15,771) |
Net cash used by operating activities | $ | (801) |
| $ | (25,767) |
|
|
|
|
|
|
CASH FLOWS FROM (INTO) INVESTING ACTIVITIES |
|
|
|
|
|
Investments available for sale |
| - |
|
| (1,750) |
Net cash (used in) investing activities | $ | - |
| $ | (1,750) |
|
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|
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|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
Advances from stockholder |
| - |
|
| 4,532 |
Proceeds from convertible loan |
| - |
|
| 30,000 |
Net cash provided by financing activities | $ | - |
| $ | 34,532 |
|
|
|
|
|
|
Effects of exchange rates on cash | $ | 159 |
| $ | (1,411) |
|
|
|
|
|
|
Net (decrease) increase in cash |
| (642) |
|
| 5,604 |
Cash, beginning of period |
| 8,488 |
|
| 21,271 |
Cash, end of period | $ | 7,846 |
| $ | 26,875 |
|
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SUPPLEMENTAL DISCLOSURES |
|
|
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Cash paid during the period |
|
|
|
|
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Income taxes | $ | - |
| $ | - |
Interest paid | $ | 559 |
| $ | 2,552 |
|
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Non-Cash financing Activities: |
|
|
|
|
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Beneficial conversion feature on convertible debt | $ | - |
| $ | $30,000 |
Convertible note converted into common shares | $ | 20,000 | $ | - | |
The accompanying notes are an integral part of the condensed financial statements.
F-4
ZD Ventures Corporation
Three months ended June 30, 2016
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - BUSINESS DESCRIPTION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(A) Business Description
ZD Ventures Corporation (the “Company”), incorporated on February 23, 2005 under the laws of the state of Nevada, operates from Barcelona, Spain. Most of the activities of the Company to date relate to its organization, funding, and seeking business opportunities in the emerging technologies.
The Company has not yet been able to conclude satisfactorily on several business negotiations. The management continues its efforts in reviewing business opportunities that will meet its criteria.
(B) Basis of Presentation
The unaudited interim financial statements as of and for the three months ended June 30, 2016 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 months ended June 30, 2016 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2017. 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.
The unaudited interim financial statements should be read in conjunction with the Company’s Annual Report filed on Form 10-K for the year ended March 31, 2016. The significant accounting policies followed are same as those detailed in the said Annual Report.
(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.
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.
F-5
ZD Ventures Corporation
Three months ended June 30, 2016
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
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 June 30, 2016, the Company has an accumulated deficit amount of approximately $3,264,005.
NOTE 3 - RECENT ACCOUNTING PRONOUNCEMENTS
In August 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40)-Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”). ASU 2014-15 provides guidance to United States Generally Accepted Accounting Principles ("U.S. GAAP") about management’s responsibility to evaluate whether there is a substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. Specifically, ASU 2014-15 (1) defines the term substantial doubt, (2) requires an evaluation of every reporting period including interim periods, (3) provides principles for considering the mitigating effect of management’s plan, (4) requires certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) requires an express statement and other disclosures when substantial doubt is not alleviated, and (6) requires an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in this update are effective for annual periods beginning after December 15, 2016 and interim periods within those reporting periods. Earlier adoption is permitted. This ASU is not anticipated to have a material impact on the Company's financial statements and notes to the financial statements.
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers.” This ASU is the result of a convergence project between the FASB and the International Accounting Standards Board. The core principle behind ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods and services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for delivering those goods and services. This model involves a five-step process that includes identifying the contract with the customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction prices to the performance obligations in the contract and recognizing revenue when (or as) the entity satisfies the performance obligations. The guidance in the ASU supersedes existing revenue recognition guidance and is effective for annual reporting periods beginning after December 15, 2017 with early application not permitted. The ASU allows two methods of adoption; a full retrospective approach where three years of financial information are presented in accordance with the new standard, and a modified retrospective approach where the ASU is applied as a cumulative effect adjustment as of the date of adoption. The company will evaluate the impact of adopting the new standard once it begins generating revenue.
In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest. ASU No. 2015-03 changes the presentation of debt issuance costs in financial statements. Under the new guidance, an entity presents such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the costs is reported as interest expense. This guidance is effective beginning in the first quarter of fiscal year 2017 and early adoption is permitted in an interim period with any adjustments reflected as of the beginning of the fiscal year that includes that interim period. The company does not believe the guidance will result in a material impact to its financial statements.
In November 2015, the FASB issued Accounting Standards Update ("ASU") 2015-17, "Balance Sheet Classification of Deferred Taxes" ("ASU 2015-17"), which will require entities to present all deferred tax liabilities and assets as noncurrent on the balance sheet instead of separating deferred taxes into current and noncurrent amounts. The standard is effective for annual reporting periods beginning after December 15, 2016, and interim periods within those annual periods. Early application is permitted. The standard can be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. This ASU is not anticipated to have a material impact on the Company's financial statements and notes to the financial statements.
F-6
ZD Ventures Corporation
Three months ended June 30, 2016
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which provides guidance for the recognition, measurement, presentation, and disclosure of financial assets and liabilities. This ASU will be effective for the Company beginning in the first quarter of fiscal year 2019. The Company is evaluating the effects of the adoption of this ASU to its financial statements.
In March 2016, the FASB issued an update (ASU 2016-09) to the standard on Compensation-Stock Compensation, which simplifies several aspects of the accounting for employee share-based payment transactions including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. For public business entities, the amendments in this update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted for any entity in any interim or annual period. Upon adoption, entities will be required to apply a modified retrospective, prospective or retrospective transition method depending on the specific section of the guidance being adopted. The Company is currently evaluating the effect the update will have on its financial statements and related disclosures.
The Company evaluates new pronouncements as issued and evaluates the effect of adoption on the Company at the time. The Company has determined that the adoption of recently adopted accounting pronouncements will not have an impact on the financial statements.
NOTE 4 - CONVERTIBLE DEBTS
|
| June 30, 2016 |
| March 31, 2016 | ||
Balance, at beginning of period |
| $ | 28,000 |
| $ | 4,836 |
Converted to additional paid in capital | i |
| (19,310) |
|
| (30,000) |
Converted to common stock | i |
| (690) |
|
| (40,000) |
BCF amortization of discount |
|
| -- |
|
| 63,164 |
Unsecured loans |
|
| -- |
|
| 30,000 |
|
| $ | 8,000 |
| $ | 28,000 |
i.
On April 11, 2016, a convertible debt holder of $38,000 loan having a balance of $28,000 as at April 1, 2016, converted $20,000 of the loan into 689,655 common shares as per the terms of the agreement.
The 8% convertible note for $38,000 is covered by a Securities Purchase Agreement dated February 24, 2015 with an independent lender and repayable on November 26, 2015. The note holder, at their discretion, shall have a right to convert the principal amount of the note and interest accrued thereon at any time after 180 days from the date of the issuance of the note into common shares of the Company at a price which is 58% of the market price, being the average of the lowest three trading prices for the Company’s common shares during the ten trading days prior to the conversion date. After the expiry of the repayment date, interest rate went up to 22%. Total interest accrued for three months ended June 30, 2016 was $559.
F-7
ZD Ventures Corporation
Three months ended June 30, 2016
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 5 - COMMON STOCK
|
| June 30 |
| March 31 |
|
|
| 2016 |
| 2016 |
|
|
| # | $ | # | $ |
Balance, beginning of period |
| 33,517,461 | 33,517 | 25,868,848 | 25,868 |
Fees settled in shares | i | 100,000 | 100 |
|
|
Conversion of convertible debt | Note 4.i | 689,655 | 690 | 878,161 | 878 |
Settlement of unsecured debts |
| -- | -- | 11,770,452 | 11,771 |
Cancellation of previously issued shares |
| -- | -- | (5,000,000) | (5,000) |
Balance, end of period |
| 34,307,116 | 34,307 | 33,517,461 | 33,517 |
i.
A consultant was issued 100,000 common shares for services rendered during the three months ended June 30, 2016. These shares were valued at $7,000, based on the quoted market price of $0.07 per common share on the date of issuance. The par value of these shares of $100 has been included in the common stock and the balance of $6,900 in additional paid-in capital.
NOTE 6. RELATED PARTY TRANSACTIONS
ADVANCES FROM STOCKHOLDERS
| June 30, 2016 |
| March31, 2016 | ||
Balance, beginning of period | $ | - |
| $ | 344,145 |
Funds advanced (net) |
| - |
|
| 174 |
Fee payable transferred from account payable |
| - |
|
| 6,000 |
Exchange difference |
| - |
|
| (30,510) |
Debt assumed by CEO |
| - |
|
| (319,809) |
Balance, end of period | $ | - |
| $ | - |
CONSULTING FEES
Three months ended June 30 | 2016 |
| 2015 | ||
Fee charged by a consultant holding over 5% equity interest in the Company | $ | 7,000 |
| $ | (3,745) |
Fee charged by the management | $ | 6,250 |
| $ | - |
Other consulting fees ( Note 5.i) |
| 1,000 |
|
| 20,425 |
|
|
|
|
|
|
| $ | 14,250 |
| $ | 16,680 |
The fees of $7,250 are included in the accounts payable and accrued liabilities as at June 30, 2016 ($ nil as at March 31, 2016).
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Includes $36,000 charged by an entity owned by a shareholder of the Company. The Company has however not accepted this charge and negotiating the amount charged.
NOTE 7 - SUBSEQUENT EVENTS
The Company has evaluated subsequent events from the balance sheet date through the date these financial statements were issued and concluded that there are no events to disclose.
F-8
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
The Company was incorporated on February 23, 2005 under the laws of the state of Nevada. Effective July 15, 2015, Mr. Terence Robinson was appointed as the Chairman of the Board of directors and is also the Chief Executive Officer and Chief Financial officer of the Company.
On June 28, 2013, the Company changed its name from Webtradex International Corporation to ZD Ventures Corporation (“ZDV”, the “Company”).
The Company has no subsidiaries. The Company has no formal lease commitments. Its operations are handled by the CEO from his residence in Barcelona, Spain but its administrative matters are handled from the Toronto office of Current Capital Corp.,at 47 Avenue Road, Suite 200, Toronto, ON M5R 2G3 Canada. Current Capital Corp. is owned by one of the shareholders related to the CEO. Our telephone number is (416) 840-0211. Our fiscal year end is March 31.
The following discussion and analysis should be read in conjunction with the financial statements and accompanying notes of the Company for the three months ended June 30, 2016 and the audited financial statements and notes for the year ended March 31, 2016.
Business Plan and Strategy
ZDV’s business strategy until March 2015 involved developing a social website, B’ Wished, however, at the end of March 31, 2015, the Management concluded that this was not a commercially viable business and decided to expense all the costs related to this project. The Company continues to review new business opportunities but has been unable to successfully negotiate any closure on any of these deals and is currently continuing its efforts at finding a suitable business proposal that would meet with its business model and attract the investors.
Results of operations
The Company did not have any operating income since its inception on February 23, 2005 through June 30, 2016. For the three months ended June 30, 2016, the Company recognized a net loss of $17,605 compared to net loss of $55,392 for the three months ended June 30, 2015.
Overall operating expenses declined significantly during the 2017 fiscal quarter compared to 2016 fiscal quarter. During the 2016 fiscal quarter, the Company incurred significant interest cost of approximately $22,000 compared to interest of $559 charged during the fiscal quarter 2017. There were travel costs incurred of $6,155 in the fiscal quarter 2016 compared to nil during the fiscal quarter 2017.
Professional Fees
Professional fees for the three months ended June 30, 2016 were $ 1,100 compared to $6,000 for the three months ended June 30, 2015. The fees for the three months ended June 30, 2015 included audit fee for the annual audit for fiscal 2015. Similar fee for fiscal 2016 was however accrued and accounted for in that fiscal year and so fee for the three months ended |March 31, 2016 included only the review cost for this quarter.
Consulting fees
Consulting fee for the three months to June 30, 2016 includes accrual of $6,250 fee for the CEO based on an annual estimate of $ 25,000 and $ 7,000 fee charged by a shareholder holding over 5% equity.
5
Fee of $ 6,000 was charged by the ex-CFO and no fee was charged by the CEO during the three months ended June 30, 2015. Approximately $ 14,500 was charged by three other consultants. These consultants are not currently providing any services. $ 15,000 fee for the previous quarter charged by CEO was forgiven and as a result was reversed to additional paid in capital.
General and administrative expenses
General and administrative costs for the three months ended June 30, 2016 included regulatory filing fee of $ 500 and transfer agent’s fee of $ 795.
These costs for the three months ended June 30, 2015 include furniture written off of $4,673 due to closure of Barcelona office, reversal of fee of $ 2,800 previously provided for annual renewal of the Company’s membership to hedge fund which the management decided to cancel effective January 1, 2015, reversal of fee charged by Current Capital Corp for investor relations of $ 6,000 in the previous period, which CCC decided to forgive and agreed for cancelation of their contract without any further charges.
Interest Expense
During the three months ended June 30, 2016, there was only one loan of $ 8,000 outstanding and interest cost thereon was 559.
Interest expense for the three-month period ended June 30, 2015 totalled $21,954, and included interest of $2,552 relating to three convertible loans and amortization of convertible feature of these loans of $19,402.
Financial Condition, Liquidity and Capital Resources
For the three months ended June 30, 2016, the Company generated a negative cash flow from operations of approximately $800 (three months to June 30, 2015: negative cash flow of $25,767) , which was primarily met from existing cash. In absence of any potential revenue in the near future, the Company will continue to be 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
As of June 30, 2016, the Company had cash of $7,846 (as at March 31, 2016: $8,488). The Company's total assets decreased marginally from $9,071 as at March 31, 2016 to $8,254 as at June 30, 2016. Total liabilities also reduced from $123,052 as of March 31, 2016 to $112,681 as of June 30, 2016, mainly due to conversion of convertible debt by $ 20,000, partly offs et by increase in the accruals.
The Company is seeking to raise capital to implement the Company's business strategy. In the event additional capital is not raised or alternatively debt financing is not available from our shareholders, the Company may seek a merger or outright sale.
Going Concern
The accompanying financial statements have been prepared assuming that we will continue as a going concern. We have an accumulated deficit of approximately $ 3.3 million. The Company realized a net loss from operations of $17,046 and $33,438, respectively, for the three months ended June 30, 2016 and 2015. These conditions raise substantial doubt about our ability to continue as a going concern. The Company continued to secure additional convertible loans and is currently negotiating with others to raise equity funding needed. However, there is no guarantee that such negotiations will success or result in the availability of the required funding. Particularly, if the Company is unable to negotiate a viable business, it may fail to attract further funding. The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.
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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 4 - Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management which currently basically comprises our Chief Executive and 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 not 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.
Changes in Internal Control Over Financial Reporting
Our CEO is the only executive acting as CEO, CFO and corporate secretary and is the sole director. The Company does not consider hiring any other staff at this stage cost effective. Thus, our CEO would continue to be controlling all aspects of the Company’s affairs on a part time basis. These changes are reasonably likely to materially affect, adversely, our internal control over financial reporting.
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PART II. OTHER INFORMATION
Item 1 - Legal Proceedings
None.
Item 1A - Risk Factors
As a “smaller reporting company” as defined by Rule 229.10(f)(1), we are not required to provide the information required by this Item 1A.
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3 - Defaults upon Senior Securities
None
Item 4 - Mine Safety Disclosures
None
Item 5 - Other Information
None
Item 6 - Exhibits
(a) The following sets forth those exhibits filed pursuant to Item 601 of Regulation S-K:
Exhibit |
|
Number | Descriptions |
|
|
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 for the quarter ended June 30, 2016 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 |
------------
* 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.
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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/ Terence Robinson
Terence Robinson
Chief Executive and Financial Officer,
President and Chairman of the Board*
Date: August 10, 2016
* Terence Robinson has signed both on behalf of the registrant as a duly authorized officer and as the Registrant's principal accounting officer.
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