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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
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED: June 30, 2010
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 0-50584
LD Holdings, Inc.
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(Exact name of registrant as specified in its charter)
Nevada 98-0335555
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(State of Incorporation) (IRS Employer Identification No.)
1070 Commerce Drive
Building II, Suite 303
Perrysburg, OH 43551
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(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (419) 873-1111
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the 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 [ ]
As of August 16, 2010 17,775,061 shares of Common Stock were issued and
outstanding and 974,156 preferred shares outstanding. Transitional Small
Business Disclosure Format (check one): Yes [ ] No [X]
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
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Part 1. Financial Information
LD Holdings, Inc. & Subsidiaries
Consolidated Condensed Balance Sheets
June 30, December 31
2010 2009
(Unaudited)
------------- -------------
Assets
Current Assets
Cash $ - $ -
------------- -------------
Total Assets $ - $ -
============= =============
Liabilities and Stockholders' Impairment
Current Liabilities
Accounts payable and accrued expenses 1,311,090 1,247,284
Accrued interest payable 169,937 195,951
Accrued interest payable - related parties 319,028 285,498
Promissory notes payable 178,940 178,940
Promissory notes payable - related parties 1,162,844 1,103,688
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Total Current Liabilities 3,141,839 3,011,361
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Stockholders' Impairment
Common stock, par value $0.001;
900,000,000 shares authorized
17,775,061 (June 30, 2010) and
16,575,061 (December 31, 2009)
issued and outstanding 17,775 16,575
Preferred stock, par value $0.001;
974,156 shares issued and outstanding 9,742 9,742
Additional paid in capital 4,046,935 4,038,535
Accumulated deficit (7,216,291) (7,076,213)
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Total Stockholders' Impairment (3,141,839) (3,011,361)
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Total Liabilities and Stockholders'
Impairment $ - $ -
============= =============
The accompanying notes are an integral part of these
consolidated financial statements.
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LD Holdings, Inc. & Subsidiaries
Consolidated Condensed Statements of Operations
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2010 2009 2010 2009
--------------------------- -----------------------------
Net Sales -
Related Party $ 15,000 $ 15,000 $ 30,000 $ 30,500
Cost of Sales - - - -
----------- ------------- ------------- -------------
Gross Profit 15,000 15,000 30,000 30,500
Selling, General &
Administrative
Expenses 95,143 40,029 162,692 210,787
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Operating Loss (80,143) (25,029) (132,692) (180,287)
Other Income
(Expense)
Interest expense (18,401) (26,758) (36,801) (52,924)
Gain from
Settlement - - 29,290 -
----------- ------------- ------------- -------------
Total Other Income
(Expense) (18,401) (26,758) ( 7,511) (52,924)
----------- ------------- ------------- -------------
Net Loss $ (98,544) $ (51,787) $ (140,203) $ (233,211)
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Loss per share,
basic and diluted $ (.01) $ (.00) $ (.01) $ (.01)
=========== ============= ============= =============
Weighted Average
Common Shares
Outstanding 17,208,028 16,575,061 16,893,293 16,024,227
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The accompanying notes are an integral part of these
consolidated financial statements.
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LD Holdings, Inc. & Subsidiaries
Consolidated Statements of Cash Flows
Six Months
Ended June 30,
2010 2009
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Cash Flows From Operating Activities:
Net Loss $ (140,203) $ (233,211)
Adjustments to Reconcile Net Loss to
Net Cash Used by Operating Activities
Operating Activities:
Gain from Settlement (29,290) -
Shares issued for services 9,600 60,108
Changes in Operating Assets and Liabilities
Accounts payable and accrued expenses 63,806 62,448
Accrued interest payable 2,401 33,395
Accrued interest payable - related parties 33,530 19,006
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Net Cash Provided (Used) by
Operating Activities (60,156) (58,254)
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Cash Flows From Financing Activities
Proceeds from related party notes 60,156 58,254
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Net Cash Provided (Used) by
Financing Activities 60,156 58,254
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Net Increase (decrease) in Cash and Equivalents - -
Cash and Equivalents at Beginning of Year - -
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Cash and Equivalents at End of Quarter $ - $ -
============= =============
Cash Paid for Income Taxes $ - $ -
Cash Paid for Interest $ - $ -
The accompanying notes are an integral part of these
consolidated financial statements.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
For further information, refer to the financial statements and footnotes thereto
included in the Company's annual report for Form 10-K for the year ended
December 31, 2009. In the opinion of management, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the six month period ended June 30, 2010
are not necessarily indicative of the results that may be expected for the year
ended December 31, 2010.
Revenue Recognition Policy
Revenue is recognized at the time the service is rendered.
Going Concern
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company incurred a loss of
$140,203 during the six months ended June 30, 2010. Also, as of June 30, 2010,
the Company had no assets and current liabilities exceeded current assets by
$3,141,839.
Management's plans include raising additional funding from debt and equity
transactions that will be used to acquire additional point of sale outlets that
should in turn create sales. Also, the implementation of strong cost management
practices and an increased focus on business development should result in the
elimination of the operating losses suffered and improvement of cash flows.
However, any results of the Company's plans cannot be assumed. These financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
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Stockholders' Equity
During the second quarter ending June 30, 2010 the Company issued 1,200,000
shares of common stock at market value of $9,600 as consideration of consulting
services.
During the first quarter ended March 31, 2009, the Company issued 1,736,933
shares of common stock at market value of $60,108 as consideration of current
and accrued consulting services.
Litigation
In 2006, John Leo, "lender" commenced action against the Company for outstanding
obligations owed by the Company. A consent judgment was awarded to the lender
for the sum of $200,000. This amount is included in accrued interest and notes
payable. The Company had accrued interest in excess of the judgment. Excess
accrued interest in the amount of $29,290 was recorded as a gain on settlement.
Item 2. Management's Discussion and Analysis
When used in this Form 10-Q and in future filings by LD Holdings, Inc.
(hereinafter "LD Holdings" or LDHI") with the Securities and Exchange
Commission, the words or phrases "will likely result," "management expects,"
"LDHI expects," "will continue," "is anticipated" or similar expressions are
intended to identify "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Readers are cautioned not to
place undue reliance on any such forward-looking statements, each of which
speaks only as of the date made. These statements are subject to risks and
uncertainties, some of which are described below. Actual results may differ
materially from historical earnings and those presently anticipated or
projected. LD Holdings has no obligation to publicly release the results of any
revisions that may be made to any forward-looking statements to reflect
anticipated events or circumstances occurring after the date of such statements.
Introduction
This document contains forward-looking statements, including statements
regarding the Company's strategy, plans for growth and anticipated sources of
capital and revenue. The Company's actual results may differ dramatically from
those anticipated in these forward-looking statements. The differences may be
result from one or more of the risk factors described below or from events that
we have not foreseen.
Risk Factors
- LD Holdings Inc has very limited financial resources. In order to
implement our business plan we will have to raise capital. If we
are unsuccessful in raising capital, our business will not grow.
- Because of its limited operating history, LD Holdings has little
historical financial data on which to base its plans for future
operations. Management will have to budget capital investment and
expenses based, in large part, on its expectation of future
revenues. If those expectations are not met, LD Holdings Inc may
exhaust its capital resources before it achieves operational
stability.
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Corporate Strategy
LD Holdings, Inc., (OTCBB: Symbol LDHL), has adopted a business model that seeks
to capitalize on the massive transfer of generational assets as the
"Baby-Boomer" generation transitions from the ownership of small businesses into
retirement. The Baby-Boomer generation is represented by individuals born
between 1946 and 1964. There are currently about 80 million Boomers in this age
group.
Over the next 20 years as these Baby-Boomers are retiring, there are going to be
businesses worth trillions of dollars that need to be sold by this Boomer
generation. Baby-Boomers make up at least 25% of the population in every state
except Utah.
Historically, the sellers typically wanted to provide minimal or no financing to
the buyer. These types of transactions were too large for most individuals to
finance, too risky for banks based upon the company's individual merits (as
opposed to the buyer's personal balance sheet) and too small to interest most
institutional investors (hedge funds and private equity groups) to consider. The
lack of liquidity made it difficult to raise funds privately from anyone but
relatives.
The company seeks to take a seemingly negative funding situation and turn it
into a positive one. Many of these Baby Boomer businesses being sold, whether
the sellers want to or not, will be forced to provide a major portion, or all,
of the financing in order to sell their businesses or will be forced to sell
them below their true market value in order to get the business sold.
The company plans to focus its efforts on becoming a "known buyer" of small
companies that meet its acquisition criteria, which it intends to widely
distribute to business sellers directly and to others on its websites. The
5-Year Plan is to accumulate at least 45 of these small companies and to slowly
meld them into cohesive business units whenever possible. Using $10 million of
revenues as an average, this will result in consolidated total revenues of $420
Million by the end of the five year plan.
The company's objective, through aggressive use of the Internet, is to put an
outside investor base in place that shares the company's vision and objectives
while the search for acquisitions is being conducted. The company will stress on
its affiliated websites and in its investor information that it is looking for
long-term investors who are willing to hold their positions for a year or more.
In our first full year of operations, the company plans to acquire at
least 3 companies with $25 million sales and EBITDA of $2.5 million. At 15 X
EBITDA this would place a market capitalization of $37 million on the company.
In order to accomplish its objectives, and as explained in this Business Plan,
the company has developed a 5-Step Process.
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Current Business Operations
LD Holdings, Inc., (OTCBB: Symbol LDHL), is a Financial and Management Holding
Company that has identified a significant business opportunity that will fill a
void in the small business world. That void is the sale and transfer of
businesses from one generation (the Baby Boomer) to the next.
With over 25 million small businesses in the USA and 15 trillion dollars worth
of businesses to be sold over the next 15-20 years, there will be many
opportunities for wealth generation. The following services will be needed:
1* There will be a need for Marketing, Sales and other Business
Services to prepare the businesses for sale.
2* There will be a need for buyers for these businesses.
3* There will be a need for entrepreneur managers to manage these
businesses.
4* There will be a need for the financing of these businesses.
5* There will be a need for competent money managers to manage the
money of these business sellers.
LD Holdings, Inc., as a Financial and Management Holding Company, will take
advantage of this opportunity with its two operating divisions under the parent
holding company. These divisions are the Financial Services Division (LD
Financial, Inc.) and the Operating Division that will manage the portfolio
companies in which LD Holdings, Inc. will have varying percentages of ownership.
The Financial Services Division (LD Financial, Inc.) will concentrate on
businesses with sales between $2 million and $20 million and EBIT between
$500,000 and $3 million. This is where the real void exists. Owners of these
businesses have a difficult time getting full value because the financing of
these companies is too large for most individuals to finance, too risky for
banks based upon the company's individual merits (as opposed to the buyer's
personal balance sheet) and too small to interest most institutional investors
(hedge funds and private equity groups) to consider. The lack of liquidity make
it difficult to raise funds privately from anyone but relatives.
The Financial Services Division provides the following services:
1* The Marketing, Sales and Other Business Services represent specifically
target services to position client companies for both sales and profit growth in
preparation for their eventual sale. The lead service involves the client
company outsourcing some portion of the sales function to us as an Independent
Sales Organization (ISO). This enhances the value of the company because it is
no longer dependent upon the selling management's relationship with the
company's customers. We provide this service under a variety of formats and
compensation arrangements. Typically, these are long-term joint-venture
marketing efforts that result in recurring revenue streams to the company. The
auxiliary consulting services provided include helping the client company to
finance its growth and to prepare it for sale under the most advantageous terms
possible to the client. In many cases, we will participate in the incremental
value created.
2* Financial Services will maintain an ongoing data base of businesses for sale.
This allows the company to look for synergistic opportunities to combine one or
more acquisition candidates at some future date. This database also provides the
company with a historical perspective of different industries and distribution
channels along with any type of geographical variation in the valuation of
businesses. If a business in its data base is acquired by a party other than LD
Holdings, then Financial Services will act as an agent in the acquisition and
receive a fee.
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3* Financial Services maintains a database of individuals with specific
backgrounds and expertise that will be available for both acquisition
evaluation, and strategizing the post-acquisition business model for each
potential acquisition candidate, once the financial aspects of the transaction
are determined. Particular attention will be given to developing relationships
with those entrepreneurs and managers that want to perform in a results-driven
environment, which has the associated incentives in place to create personal
wealth for them and an above average return for the company's stockholders. What
distinguishes these individuals is that they are looking for a career
opportunity and are not focused on just having a job, benefits or entitlements.
4* Financial Services maintains an ongoing data base of investors that share the
company's vision and objectives. The company is looking for long-term investors
who are willing to hold their positions for a year or more for superior rates of
return. Investors that want to participate in ground floor investment
opportunities that the company's Business Model represents have a special wealth
building vehicle available to them. The company's stock is thinly traded with a
relatively small float. This will allow the company to look for synergistic
opportunities to combine one or more acquisition candidates at some future date.
This database also provides the company with a historical perspective of
different industries and distribution channels along with any type of
geographical variation in the valuation of businesses. If a business in its data
base is acquired by a party other than LD Holdings, then Financial Services will
act as an agent in the acquisition and receive a fee.
5* The Wealth Management department of the Financial Services offers both
proprietary financial and portfolio management services and has available
tightly screened third party sources that offer specific money managers that
offer alternative management styles and expertise in certain assets classes. We
will generate fee income either on a direct basis or from the referral.
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Six Months Ended June 30, 2010 and 2009
For the six months ended June 30, 2010 and 2009 LD Holdings had revenues of
$30,000 and $30,500 respectfully. Management has elected to devote all of
it's time seeking financing partners to further implement its Business Plan. The
2010 revenue was generated from consulting services.
Because of the several acquisition opportunities available to LD Holdings, the
company has elected to devote all of its time and resources seeking financial
partners for these acquisitions.
For the six months ended June 30, 2010 and 2009 LD Holdings incurred selling,
general and administrative expenses of $162,692 and $210,787 respectively, of
which $60,000 represents the fee for the services of John R. Ayling,
Chairman and CEO. The fees have been accrued until the operations of the company
permit payment, or the Chairman and CEO determines to take his fee in the form
of stock. The total operating expenses resulted in an operating loss for the six
months ended June 30, 2010 and 2009 of $140,203 and $233,211, respectively.
Funding of these expenses was from short term loans from principal shareholders.
For the six months ended June 30, 2010 and 2009, LD Holdings incurred interest
expense of $36,801 and $52,924, respectively. Interest expense was accrued, and
will be paid when the operations of the company permit payment.
Liquidity and Capital Requirements
LD Holdings had a net operating working deficit, at June 30, 2010, of
$3,141,839. The working capital requirements of LD Holdings have been funded
primarily with loans from shareholders.
LD Holdings is seeking additional financing to continue to develop its business
plan and to begin its implementation. Management believes this amount will be
substantial.
Item 3. Quantitative and Qualitative Disclosures about market risk.
Not Applicable.
Item 4. Evaluation of Disclosure Controls and Procedures
An evaluation of the effectiveness of the Company's disclosure controls and
procedures as of June 30, 2010 was made under the supervision of John R. Ayling,
the chief executive officer. Based on that evaluation, Mr. Ayling concluded that
the Company's disclosure controls and procedures are not effective to ensure
that information required to be disclosed by the Company in reports that it
files or submits under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported within the time periods specified in
Securities and Exchange Commission rules and forms. During the most recently
completed fiscal quarter, there has been no significant change in the Company's
internal control over financial reporting that has materially affected, or is
reasonably likely to materially affect, the company's internal control over
financial reporting.
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Part II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Unregistered sales of equity securities and use of proceeds.
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
LD Holdings filed an 8-K on May 20, 2010
Item 6. Exhibits
31.1 Rule 13a-14(a) Certification
32 Rule 13a-14(b) Certification
SIGNATURES
Pursuant to the requirements 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.
LD Holdings, Inc.
Date: August 16, 2010 /s/ John R. Ayling
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John R. Ayling, Chief Executive Officer
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