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 SECs rules and regulations for interim reporting.
The unaudited interim financial statements should be read in conjunction with the Companys 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 Companys 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. Managements 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 Entitys 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 managements responsibility to evaluate whether there is a substantial doubt about an entitys 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 managements plan, (4) requires certain disclosures when substantial doubt is alleviated as a result of consideration of managements 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 Companys 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