UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
| [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXC HANGE ACT OF 1934. |
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2015.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
COMMISSION FILE NUMBER: 000-54159
Z Holdings Group Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 84-1209978 | |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
25 Broadway 9th Floor, New York, NY | 10004 | |
| (Address of principal executive offices) | (Zip Code) | |
Telephone: (347) 690-5187
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the 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. [X ]Yes [ ] No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 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). [ X]Yes [ ] 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. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | [ ] | Accelerated filer | [ ] | |||
| Non-accelerated filer | [ ] (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). [X ]Yes [ ] No
State the number of shares outstanding of each of the issuer's classes of common equity, as of August 5, 2015 99,750,097 shares of common stock.
TABLE OF CONTENTS
Z HOLDINGS GROUP, INC.
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| ITEM 1 |
Z HOLDINGS GROUP, INC.
| June 30, | December 31, | |||||||
| 2015 | 2014 | |||||||
| (Unaudited) | (Audited) | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Prepaid expenses | $ | 7,500 | $ | 795 | ||||
| Total Current Assets | 7,500 | 795 | ||||||
| Software, net of accumulated amortization of $2,331 | - | 664 | ||||||
| TOTAL ASSETS | $ | 7,500 | $ | 1,459 | ||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | 5,292 | $ | 643 | ||||
| Accrued expenses | 4,300 | 9,243 | ||||||
| Accrued interest - related party | 988 | 39 | ||||||
| Note payable - related party | 39,795 | 3,078 | ||||||
| Total Current Liabilities | 50,375 | 13,003 | ||||||
| TOTAL LIABILITIES | 50,375 | 13,003 | ||||||
| Commitments and Contingencies (Note 9) | - | - | ||||||
| Stockholders' Deficit | ||||||||
| Preferred stock: 50,000,000 authorized; $0.000006 par value; no shares issued and outstanding | - | - | ||||||
| Common stock Class A: 1,000,000,000 authorized; $0.000006 par value; 99,750,097 shares issued and outstanding | 599 | 599 | ||||||
| Common stock Class B: 200,000,000 authorized; $0.000006 par value; no shares issued and outstanding | - | - | ||||||
| Additional paid-in capital | 41,209 | 41,209 | ||||||
| Accumulated deficit | (84,683 | ) | (53,352 | ) | ||||
| Total Stockholders' Deficit | (42,875 | ) | (11,544 | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ | 7,500 | $ | 1,459 | ||||
The accompanying notes are an integral part of these condensed, unaudited financial statements.
Z HOLDINGS GROUP, INC.
(Unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Revenues | $ | - | $ | - | $ | - | $ | - | ||||||||
| Operating Expenses | ||||||||||||||||
| General and administrative | 4,819 | 1,906 | 8,161 | 4,308 | ||||||||||||
| Professional fees | 14,939 | - | 21,557 | - | ||||||||||||
| Depreciation and amortization | - | 250 | 250 | 500 | ||||||||||||
| Total operating expenses | 19,758 | 2,156 | 29,968 | 4,808 | ||||||||||||
| �� | ||||||||||||||||
| Net loss from operations | (19,758 | ) | (2,156 | ) | (29,968 | ) | (4,808 | ) | ||||||||
| Other expense | ||||||||||||||||
| Interest expense | (836 | ) | - | (949 | ) | - | ||||||||||
| Loss on abandonment of assets | - | - | (414 | ) | - | |||||||||||
| Total other expense | (836 | ) | - | (1,363 | ) | - | ||||||||||
| Net loss before taxes | (20,594 | ) | (2,156 | ) | (31,331 | ) | (4,808 | ) | ||||||||
| Income tax benefit | - | - | - | |||||||||||||
| Net loss | $ | (20,594 | ) | $ | (2,156 | ) | $ | (31,331 | ) | $ | (4,808 | ) | ||||
| Basic and dilutive loss per share | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | ||||
| Weighted average number of shares outstanding | 99,750,097 | 99,750,097 | 99,750,097 | 99,750,097 | ||||||||||||
The accompanying notes are an integral part of these condensed, unaudited financial statements.
| Six Months Ended | ||||||||
| June 30, | ||||||||
| 2015 | 2014 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | (31,331 | ) | $ | (4,808 | ) | ||
| Adjustments to reconcile net loss to net cash provided by operations: | ||||||||
| In-kind contributions | - | 5,008 | ||||||
| Depreciation and amortization | 250 | 500 | ||||||
| Loss on abandonment of assets | 414 | - | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses | (6,705 | ) | 195 | |||||
| Accounts payable | 4,649 | - | ||||||
| Accrued expenses | (4,943 | ) | (895 | ) | ||||
| Accrued interest | 949 | - | ||||||
| Total adjustments | (5,386 | ) | 4,808 | |||||
| Net Cash Used in Operating Activities | (36,717 | ) | - | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Net Cash (Used in) Investing Activities | - | - | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Note payable - related party | 36,717 | - | ||||||
| Net Cash Provided By Financing Activities | 36,717 | - | ||||||
| Net increase (decrease) in cash and cash equivalents | - | - | ||||||
| Cash and cash equivalents, beginning of period | - | - | ||||||
| Cash and cash equivalents, end of period | $ | - | $ | - | ||||
| Supplemental cash flow information | ||||||||
| Cash paid for interest | $ | - | $ | - | ||||
| Cash paid for taxes | $ | - | $ | - | ||||
The accompanying notes are an integral part of these condensed, unaudited financial statements.
Z HOLDINGS GROUP, INC.
JUNE 30, 2015
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
"Z Holdings Group" or LMIC, Inc. began its existence as the Pacific Development Corporation which was incorporated under the laws of the State of Colorado on September 21, 1992. On March 23, 2000, Pacific and Cheshire Holdings, Inc. were merged into a single corporation existing under the laws of the State of Delaware, with Cheshire Holdings, Inc. being the surviving corporation. The name of the surviving corporation was changed to Cheshire Distributors, Inc. On July 17, 2003, Cheshire Distributors, Inc. changed its name to LMIC, Inc. Z Holdings Group, Inc. sometimes referred to as ZHLD or Z Holdings Inc. adopted fresh start accounting on May 6, 2005 with an objective to acquire or merge with an operating business.
Big Time Acquisition (BTA) was organized as a vehicle to investigate, and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation. BTA's principal business objective for the next 12 months and beyond such time was to achieve long-term growth potential through a combination with a business ("Business Combination") rather than immediate, short-term earnings.
Immediately before the effective time of merger, any and all outstanding shares of Big Time Acquisition, Inc. held by Z Holdings Group, Inc. were canceled, and at the closing of the Merger Agreement, ZHLD issued a total of 90,000 restricted Class A common shares to the former shareholders of Big Time Acquisition, Inc., for their then outstanding shares of Big Time common stock. ZHLD received in the share exchange, 90,000 shares of Big Time common stock representing 100% of the issued and outstanding shares of Big Time which are deemed to be canceled. As a result of the Merger Agreement, ZHLD is now the surviving company of the Merger pursuant to Delaware General Corporate Law (DGCL), and deemed to be Successor Registrant. The issuance of such shares was exempt from registration pursuant to Section 4(2) of, and Regulation D promulgated under, the Securities Act.
On October 29, 2012 the respective Boards of Directors and requisite majority shareholders of ZHLD and Big Time Acquisition, Inc. by written consent in lieu of a shareholder meeting pursuant to DGCL approved the merger of Big Time Acquisition, Inc. into ZHLD with ZHLD as the surviving corporation. ZHLD was a shell company immediately before the merger and continues to be a shell company as of the date of this filing.
On July 15, 2015, the Company's Board of Directors approved to amend the Articles of Incorporation to change the Company's name to Ariel Clean Energy Inc.
Z Holdings Group, Inc. has a December 31 year end.
Shell Company Status
We are considered a shell company as defined in Rule 12b-2 of the Exchange Act. Rule 12b-2 of the Exchange Act defines a "shell company" as a registrant that has "no or nominal operations"; and, either "no or nominal assets, assets consisting solely of cash and cash equivalents; or, assets consisting of any amount of cash and cash equivalents and nominal other assets." Our shell company status prevents investors from reselling our shares under Rule 144(i) unless and until 12 months after we are no longer considered a shell company. We caution investors as to the highly illiquid nature of an investment in our shares.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Regulation S-X.
Accordingly, these condensed financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and such adjustments are of a normal recurring nature. These financial statements should be read in conjunction with the financial statements for the year ended December 31, 2014 and notes thereto and other pertinent information contained in our Form 10-K the Company has filed with the Securities and Exchange Commission (the "SEC").
The results of operations for the period ended June 30, 2015 are not necessarily indicative of the results for the full fiscal year ending December 31, 2015.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amount of revenues and expenses during the reporting period. Actual results could differ from these estimates.
Cash Flow Reporting
The Company follows ASC 230, "Statement of Cash Flows," for cash flow reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category. The company uses the indirect or reconciliation method ("Indirect method") as defined by ASC 230, "Statement of Cash Flows," to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments.
Cash and Cash Equivalents
The Company follows ASC 305, "Cash and Cash Equivalents". For the purpose of the financial statements cash equivalents include all highly liquid investments with an original maturity of three months or less. Cash and cash equivalents at June 30, 2015 and December 31, 2014 were $0.
Fair Value of Financial Instruments
The Company follows ASC 820, "Fair Value Measurements and Disclosures," which defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity's own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:
| | Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. |
| | Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. |
| | Level 3 - Inputs that are both significant to the fair value measurement and unobservable. |
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as at June 30, 2015. The respective fair value of certain on-balance-sheet financial instruments would approximate their carrying values due to the short-term nature of these instruments. These financial instruments include accounts payable, accrued expenses, related party note payable and, accrued interest.
Commitment and Contingencies
The Company follows ASC 450-20, "Loss Contingencies," to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. There were no commitments or contingencies at June 30, 2015 and December 31, 2014.
Share-based Expense
ASC 718, "Compensation – Stock Compensation," prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).
The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, "Equity – Based Payments to Non-Employees." Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.
There were no share-based expenses for the periods ended June 30, 2015 and 2014.
Income Taxes
The Company accounts for income taxes under ASC 740, "Income Taxes." Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs.
A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. No deferred tax assets or liabilities were recognized as at June 30, 2015 and December 31, 2014.
Earnings (Loss) Per Share
The Company computes basic and diluted earnings per share amounts in accordance with ASC 260, "Earnings per Share" ("EPS"). Basic EPS is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the reporting period. Diluted EPS reflects the potential dilution that could occur if stock options and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company. The Company does not have any potentially dilutive instruments as at June 30, 2015 and 2014; therefore, anti-dilution issues are not applicable.
Related Parties
The Company follows ASC 850, "Related Party Disclosures," for the identification of related parties and disclosure of related party transactions.
NOTE 3 - GOING CONCERN
The Company's financial statements are prepared using accounting principles generally accepted 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 a source of revenue. As a result, the Company has continued net losses, negative operating cash flows, an accumulated deficit, and a capital deficiency. The ability of the Company to continue as a going concern for the next twelve months is dependent on the Company being able to fund current operations until it achieves a successful merger or acquisition. If the Company is unable to obtain sufficient funding, it could be forced to cease operations. These factors raise substantial doubt about its ability to continue as a going concern.
It is management's plan to fund current operations, which consists primarily of maintaining registration status, with loans and capital contributions from management, directors, and shareholders. Some of these loans will be from related parties. With no principal operations or revenues, traditional financing and equity sales are not readily available as viable options and therefore not part of management's plan.
There is no assurance that the Company will be able to obtain sufficient additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to the Company. Management cannot provide any assurance that the Company will be successful in accomplishing any of its plans.
The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
NOTE 4 – RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, we believe that the impact of recently issued standards that are not yet effective will not have a material impact on our financial position or results of operations upon adoption. At this time we have no plans to early adopt any of the recently issued accounting pronouncements.
Except for rules and interpretive releases of the SEC under authority of federal securities laws and a limited number of grandfathered standards, the FASB Accounting Standards Codification™ ("ASC") is the sole source of authoritative GAAP literature recognized by the FASB and applicable to the Company. Management has reviewed the aforementioned rules and releases and believes any effect will not have a material impact on the Company's present or future financial statements
NOTE 5 – PREPAID EXPENSE
Prepaid expense totaled $7,500 at June 30, 2015 and consisted solely of the OTC Market annual fee. Prepaid expense totaled $795 at December 31, 2014 and consisted solely of a prepaid software maintenance contract.
NOTE 6 – STOCKHOLDERS' EQUITY
Preferred Stock
The authorized preferred stock consists of 50,000,000 shares with a per share par value of $0.000006.
There were no shares of preferred stock issued and outstanding at June 30, 2015 and December 31, 2014.
Any series of new preferred stock may be designated, fixed, and determined as provided by the board of directors by the affirmative vote of a majority of the voting power of all the then outstanding shares of Class B Common Stock.
Common Stock
Class A
The authorized common stock consists of 1,000,000,000 shares of Class A Common Stock at a par value of $0.000006 per share. There were 99,750,097 shares of class A common stock issued and outstanding at June 30, 2015 and December 31, 2014. Each share of Class A common stock is entitled to one vote. The number of authorized shares of Class A common stock may be increased or decreased (but not below the number of shares outstanding) by the affirmative vote of the holders of capital stock representing a majority of the voting power of the outstanding shares of capital stock of the company entitled to vote.
Class B
The authorized common stock consists of 200,000,000 shares of Class B Common Stock, $0.000006 par value per share. There are no shares of class B Common Stock issued and outstanding at June 30, 2015 and December 31, 2014. Each share of Class B of Common Stock is entitled to 10 votes. The number of authorized shares of Class B common stock may be increased or decreased (but not below the number of shares outstanding) by the affirmative vote of the holders of capital stock representing a majority of the voting power of the outstanding shares of capital stock of the company entitled to vote.
Additional Paid in Capital
Related parties prior to the September 2014 change in control funded operating expenses of $18,579 and forgave their related party debt of $22,360 for a total contribution to capital of $41,209. Current related parties fund operating expenses with loans to the company. (Note 8) These loans accrue interest at an annual rate of 12%
NOTE 7 - INCOME TAXES
The Company has not recognized an income tax benefit for its operating losses generated based on uncertainties concerning its ability to generate taxable income in future periods. The tax benefit for the periods presented is offset by a valuation allowance established against deferred tax assets arising from the net operating losses (NOL) and other temporary differences, the realization of which could not be considered more likely than not. In future periods, tax benefits and related deferred tax assets will be recognized when management considers realization of such amounts to be more likely than not. As at June 30, 2015 and December 31, 2014, the Company has net operating loss carry forwards of approximately $84,700 and $53,400, respectively. The NOLs begin expiring in 2030. The loss results in deferred tax assets of approximately $28,800 and $18,100 at June 30, 2015 and December 31, 2014, respectively, at effective statutory rates totaling 34%. The deferred tax asset has been off-set by an equal valuation allowance.
| June 30, | December 31, | |||||||
| 2015 | 2014 | |||||||
| Deferred tax asset, generated from net operating loss at statutory rates | $ | 28,800 | $ | 18,100 | ||||
| Valuation allowance | (28,800 | ) | (18,100 | ) | ||||
| $ | - | $ | - | |||||
The reconciliation of the effective income tax rate to the federal statutory rate is as follows:
| Federal income tax rate | 34% |
| Increase in valuation allowance | (34%) |
| Effective income tax rate | 0.0% |
Income taxes for the years 2011 through 2014 remain subject to examination.
NOTE 8 - RELATED PARTY TRANSACTIONS
Note Payable
During the period ended June 30, 2015, a corporation controlled by the company's officers paid operating expenses totaling $39,795. Unpaid balances are due on demand and accrue an annual interest rate of 12%.
| Note payable – | Accrued interest – | |||||||
| Nexus BioFuel | Nexus BioFuel | |||||||
| Balance, December 31, 2014 | $ | 3,078 | $ | 39 | ||||
| Increase | 36,717 | 949 | ||||||
| Balance, June 30, 2015 | $ | 39,795 | $ | 988 | ||||
The Company plans to pay the note payable and accrued interest as cash flows become available.
Other
The controlling shareholder has pledged their support to fund continuing operations. However, there is no written commitment to this effect.
The Company does not own or lease property or lease office space. The office space used by the Company was arranged by management of the Company to use at no charge.
The Company does not have any employment contracts with any of its related parties.
NOTE 9 – COMMITMENTS AND CONTINGENCIES
The Company has no commitments or contingencies as at June 30, 2015 and December 31, 2014.
Litigation
From time to time the Company may become a party to litigation matters involving claims against the Company. Management believes that there are no current matters that would have a material effect on the Company's financial position or results of operations.
NOTE 10 - SUBSEQUENT EVENTS
Management has evaluated subsequent events through the date the financial statements were issued. Based on our evaluation no events have occurred requiring adjustment or disclosure.
Forward-Looking Statements
Except for historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve risks and uncertainties, including, among other things, statements regarding our business strategy, future revenues and anticipated costs and expenses. Such forward-looking statements include, among others, those statements including the words "expects," "anticipates," "intends," "believes" and similar language. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed herein as well as in the "Description of Business – Risk Factors" section in our Annual Report on Form 10-K, as filed on April 15, 2015. You should carefully review the risks described in our Annual Report and in other documents we file from time to time with the Securities and Exchange Commission. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report. We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances after the date of this document.
Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements.
All references in this Form 10-Q to the "Company," "Z Holdings," "ZHLD," "we," "us," or "our" are to Z Holdings Group, Inc.
Our unaudited financial statements are stated in United States Dollars and are prepared in accordance with United States generally accepted accounting principles.
Current Business
We are currently seeking new business opportunities with established business entities for merger with or acquisition of a target business. In certain instances, a target business may wish to become our subsidiary or may wish to contribute assets to us rather than merge. We have not yet begun negotiations or entered into any definitive agreements for potential new business opportunities, and there can be no assurance that we will be able to enter into any definitive agreements.
We may seek a business opportunity with entities who have recently commenced operations, or entities who wish to utilize the public marketplace in order to raise additional capital in order to expand business development activities, to develop a new product or service, or for other corporate purposes. We may acquire assets and establish wholly-owned subsidiaries in various businesses or acquire existing businesses as subsidiaries.
In implementing a structure for a particular business acquisition or opportunity, we may become a party to a merger, consolidation, reorganization, joint venture, or licensing agreement with another corporation or entity. We may also acquire stock or assets of an existing business. Upon the consummation of a transaction, it is likely that our present management will no longer retain a majority control of our company. In addition, it is likely that as part of the terms of the acquisition transaction, one or more new officers and directors, would join the Company.
We anticipate that the selection of a business opportunity in which to participate will be complex and without certainty of success. We believe that there are numerous firms in various industries seeking the perceived benefits of being a publicly registered corporation. Business opportunities may be available in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex. Business opportunities that we believe are in the best interests of our company may be scarce or we may be unable to obtain the ones that we want. We can provide no assurance that we will be able to locate compatible business opportunities.
We have not yet entered into any definitive agreements for potential new business opportunities. There can be no assurance that we will be able to identify an appropriate business opportunity or acquire the financing necessary to enable us to pursue a transaction if an appropriate opportunity is identified.
Currently, we do not have a source of revenue. We are not able to fund our cash requirements through our current operations. Historically, we have been able to raise a limited amount of capital through loans from a company controlled by our management, but we are uncertain about our continued ability to raise additional funds privately. We believe that our company may have difficulties raising capital until we locate a prospective business opportunity through which we can pursue our plan of operation. Further, we expect that any new acquisition or business opportunities that may become available to our company will require additional financing. There can be no assurance that we will be able to acquire the financing necessary to enable us to pursue our plan of operation. If our company requires additional financing and we are unable to acquire such funds, our business may fail. If we are unable to secure adequate capital to continue our acquisition efforts, our shareholders may lose some or all of their investment and our business may fail.
RESULTS OF OPERATIONS
Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation. We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.
Three months ended June 30, 2015 and 2014
Revenue
During the three months ended June 30, 2015 and 2014, we did not earn any revenue as the company has no revenue sources.
Expenses
During the three months ended June 30, 2015 we incurred $20,594 in operating expenses compared to $2,156 in the three months ended June 30, 2014. The increase is primarily attributable to professional fees: for services not previously used: legal and accounting. Additionally there were fee increases for audits and reviews and new public company filing expenses.
Six months ended June 30, 2015 and 2014
Revenue
During the six months ended June 30, 2015 and 2014, we did not earn any revenue as the company has no revenue sources.
Expenses
During the six months ended June 30, 2015 we incurred $31,331 in operating expenses compared to $4,808 in the six months ended June 30, 2014. The increase is primarily attributable to professional fees: for services not previously used: legal and accounting. Additionally there were fee increases for audits and reviews and new public company filing expenses.
Cash Flows
| Six Months Ended | ||||||||
| June 30, | ||||||||
| 2015 | 2014 | |||||||
| Net Cash Used in Operating Activities | $ | (36,717 | ) | $ | - | |||
| Net Cash Used in Investing Activities | - | - | ||||||
| Net Cash Provided By Financing Activities | 36,717 | - | ||||||
| Net Increase (Decrease) in Cash During Period | $ | - | $ | - | ||||
Cash Flows from Operating Activities
We have not generated positive cash flows from operating activities. For the period ended June 30, 2015, net cash flows used in operating activities was $36,717, compared to $0 for the period ended June 30, 2014. The increase in cash used in operating activities was attributed to the increase in operating losses offset by increased operating liabilities owed and unpaid at June 30, 2015. Operating expenses for the six months ended June 30, 2014 were funded entirely by additional paid in capital as opposed resulting in no cash flows.
Cash Flows from Investing Activities
During the period ended June 30, 2015 and 2014, we have not used any cash for investing activities.
Cash Flows from Financing Activities
In the past we financed our operations solely from contributions to capital. For the period ended June 30, 2015, a related party paid directly to our vendors operating expenses totaling $36,717. Since we have no current operations or revenues and no likely sources to contribute capital we anticipate an increase in cash proceeds and no cash payments from financing activities.
Liquidity
We have no known demands or commitments and are not aware of any events or uncertainties as of June 30, 2015 that will result in or that are reasonably likely to materially increase or decrease our current liquidity.
Capital Resources
We had no material commitments for capital expenditures as of June 30, 2015 and December 31, 2014.
Critical Accounting Policies
We prepare our condensed financial statements in conformity with GAAP, which requires management to make certain estimates and assumptions and apply judgments. We base our estimates and judgments on historical experience, current trends and other factors that management believes to be important at the time the financial statements are prepared and actual results could differ from our estimates and such differences could be material. We have identified below the critical accounting policies which are assumptions made by management about matters that are highly uncertain and that are of critical importance in the presentation of our condensed financial statements. Due to the need to make estimates about the effect of matters that are inherently uncertain, materially different amounts could be reported under different conditions or using different assumptions. On a regular basis, we review our critical accounting policies and how they are applied in the preparation our condensed financial statements.
Use of Estimates
The preparation of condensed financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
For a full description of our critical accounting policies, please refer to Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2014 Annual Report on Form 10-K.
Off Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
Not applicable to a smaller reporting company.
Evaluation of Disclosure Controls and Procedures.
We carried out an evaluation, under the supervision and with the participation of our management, including our president and chief financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were not effective to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Material weaknesses noted were: lack of a functioning audit committee due to a lack of a majority of independent members; lack of a majority of outside directors on the board of directors, inadequate segregation of duties consistent with control objectives and affecting the functions of authorization, recordkeeping, custody of assets, and reconciliation; ineffective oversight of the entity's financial reporting and internal control by management and those charged with governance; and, management dominated by a single individual/small group without adequate compensating controls.
Limitations on Systems of Controls
Our management consisting of our chief executive officer and chief financial officer, who is the same individual, does not expect that our disclosure controls and procedures or our internal controls will prevent all error or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, 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. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. To address the material weaknesses identified in our evaluation, we performed additional analysis and other post-closing procedures in an effort to ensure our consolidated financial statements included in this annual report have been prepared in accordance with generally accepted accounting principles. Accordingly, management believes that the financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.
Changes in Internal Control over Financial Reporting.
There were no changes in our internal control over financial reporting that occurred during the six months ended June 30, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Presently, there are not any material pending legal proceedings to which the Registrant is a party or as to which any of its property is subject, and no such proceedings are known to the Registrant to be threatened or contemplated against it.
Not applicable to a smaller reporting company.
We did not sell any equity securities during the quarter ended June 30, 2015
None.
Not applicable.
None.
| Exhibit Number | Description of Exhibit | Location |
| 3.1 | Articles of Incorporation | * |
| 3.1 (a) | Restated Articles of Incorporation | * |
| 3.2 | By Laws | * |
| 3.2 (a) | Restated By Laws | * |
| 31.1 | Certification of Principal Financial Officer pursuant to Rule 13a-14 and Rule 15d 14(a), promulgated under the Securities and Exchange Act of 1934, as amended.* | ** |
| 32.1 | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer).* | ** |
| 101.INS | XBRL Instance Document ** |
| 101.SCH | XBRL Taxonomy Extension Schema ** |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase ** |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase ** |
| 101.LAB | XBRL Taxonomy Extension Label Linkbase ** |
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase ** |
____________________
| * | Incorporated by reference. Merger Agreement by and among Big Time Acquisition, Inc. and Z Holdings Group, Inc. filed as Exhibit 2.1 to Form 8K filed on November 2, 2012. Articles of Incorporation filed as Exhibit 3.1 to Form 10-12G filed October 15, 2010. Restated Articles of Incorporation filed as Exhibit 3.1 to Form 8K filed on November 2, 2012. The Bylaws filed as Exhibit 3.2 to Form 10-12G filed October 15, 2010. Restated Bylaws filed as Exhibit 3.2 to Form 8K filed on November 2, 2012. |
| ** | Furnished with this 10-Q. Users of this data are advised that, pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Exchange Act of 1934 and otherwise are not subject to liability. |
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, there unto duly authorized.
Z Holdings Group, Inc.
(Registrant)
By: /s/ Robert Morrison
Robert Morrison
President and Chief Financial Officer
(Principal Executive and Financial Officer)
Dated: August 7, 2015
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