Zentric, Inc. - FORM 10-Q - November 14, 2012

Attached files

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EXCEL - IDEA: XBRL DOCUMENT - Zentric, Inc.	Financial_Report.xls
EX-31.1 - CERTIFICATION - Zentric, Inc.	zentric_ex311.htm
EX-32.1 - CERTIFICATION - Zentric, Inc.	zentric_ex321.htm

U.S. 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 September 30, 2012

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

Commission File No. 333-140236

ZENTRIC, INC.

(Exact name of small business issuer as specified in its charter)

Nevada
(State or other jurisdiction of Incorporation or organization)		(I.R.S. Employer Identification No.)

Unit C2, 802 Southdown Road,

Mississauga, Ontario, Canada, L5J 2Y4

(Address of Principal Executive Offices)

(416) 245-8000

(Issuer’s telephone number)

(Former name, address and fiscal year, if changed since last report)

Check whether the issuer (1) has 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 issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15 (d) of the Exchange Act subsequent to the distribution of securities under a plan confirmed by a court. Yes o No x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act (Check one):

Large Accelerated Filer o Accelerated Filer o Non-Accelerated Filer o Smaller Reporting Company x

State the number of shares outstanding of each of the issuer’s classes of common equity, as of November 14, 2012: 111,175,827 shares of common stock.

Transitional Small Business Disclosure Format Yes o No x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). o Yes x No

TABLE OF CONTENTS

PART I FINANCIAL INFORMATION

Item 1.	Financial Statements
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3	Quantitative and Qualitative Disclosures About Market Risk	14
Item 4T.	Control and Procedures	14

PART II-- OTHER INFORMATION

Item 1	Legal Proceedings	15
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	15
Item 3.	Defaults Upon Senior Securities	15
Item 4.	Mine Safety Disclosures	15
Item 5.	Other Information	15
Item 6.	Exhibits and Reports on Form 8-K	16

ZENTRIC, INC.

(A Development Stage Company)

BALANCE SHEETS

	September 30, 2012			December 31, 2011
	(unaudited)
ASSETS
Current Assets
Cash	$	57,183		$	1,446
Total Current Assets		57,183			1,446

Deposit		88,348			-
Total Assets	$	145,531		$	1,446

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable and accrued liabilities	$	76,274		$	47,305
Advances from shareholder		150,113			127,151
Accrued salaries		185,000			78,800
Note payable – Related party		171,336			7,018

Total Liabilities		582,723			260,274

Stockholders' Deficit
Common stock, $0.001 par value, 500,000,000 shares authorized; 111,175,827 and 99,575,827 shares issued and outstanding as of September 30, 2012 and December 31, 2011, respectively		111,177			99,577
Additional paid-in capital		1,577,832			1,292,919
Stock Payable		75,000			20,000
Subscription receivable		-			-
Deficit accumulated during the development stage		(2,201,201	)		(1,671,324	)

Total Stockholders' Deficit		(437,192	)		(258,828	)

Total Liabilities and Stockholders' Deficit	$	145,531		$	1,446

The accompanying notes are an integral part to these financial statements.

ZENTRIC, INC.

(A Development Stage Company)

STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended September 30, 2012			Three Months Ended September 30, 2011			Nine Months Ended September 30, 2012			Nine Months Ended September 30, 2011			For The Period From Inception to September 30, 2012

REVENUE	$	-		$	-		$	-		$	-		$	-
EXPENSES
Office and General		25,357			9,029			77,539			25,604			176,904
Professional fees		2,000			1,748			6,900			6,300			72,872
Consulting and subcontracting		102,612			243,233			394,369			295,724			1,460,734
R&D expense		-			-			20,000			-			58,758
Bank charges		1,221			72			3,043			207			4,148
Operating Expenses		131,190			254,082			501,851			327,835			1,773,416

Other expenses
Interest Expense		9,272			1,854			26,377			11,355			77,860
Impairment on investment		-			-			-			-			233,333
Loss on Conversion of debt		-			-			-			-			114,943
Foreign exchange translation		175			-			1,649			-			1,649
Total other expense		9,447			1,854			28,026			11,355			427,785

Net Loss	$	140,636		$	255,936		$	529,877		$	339,190		$	2,201,201
Net Loss		(140,636	)		(255,936	)		(529,877	)		(339,190	)		(2,201,201	)
LOSS PER WEIGHTED NUMBER OF SHARES OUTSTANDING BASIC AND DILUTED		(0.00	)		(0.00	)		(0.00	)		(0.00	)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING BASIC AND DILUTED		111,175,827			90,282,349			110,274,367			90,282,349

The accompanying notes are an integral part to these financial statements.

ZENTRIC, INC.

(A Development Stage Company)

STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended September 30, 2012			Nine Months Ended September 30, 2011			For The Period From Inception to September 30, 2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(529,877	)	$	(357,857	)	$	(2,201,201	)
Adjustment to reconcile net loss to net cash provided by operating activities:
Common stock issued for services		25,000			232,500			844,365
Options issued for services		6,036						15,781
Impairment on investment								233,333
Loss on conversion of debt		-			41,622			114,943
Imputed interest on advance from shareholder		25,477			4,556			53,532
Amortization on note discount		-			-			2,125
Changes in operating assets and liabilities:
Prepaid Expenses		-			100			-
Accounts payable and accrued liabilities		135,139			35,525			281,399
NET CASH USED IN OPERATING ACTIVITIES		(338,225	)		(43,554	)		(655,723	)
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for downpayment of solar panel		(88,348	)		-			(88,348	)
CASH USED FOR INVESTING ACTIVITIES		(88,348	)		-			(88,348	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock		295,000			-			321,795
Advances from related party		220,306			40,290			382,437
Borrwings on debt - related party		-			-			130,018
Principal Payment on debt		(32,996	)		-			(32,996	)
CASH FLOWS (USED IN) PROVIDED BY FINANCING ACTIVITIES		482,310			40,290			801,254
NET DECREASE IN CASH		55,737			(3,264	)		57,183
CASH, BEGINNING OF PERIOD		1,446			3,367			-
CASH, END OF PERIOD	$	57,183		$	103		$	57,183

NON-CASH ACTIVITIES
Shares accrued in prior period and issued in current	$	20,000		$	-		$	20,000

The accompanying notes are an integral part to these financial statements.

ZENTRIC, INC.

(A Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

September 30, 2012 (unaudited)

1. ORGANIZATION AND BASIS OF PRESENTATION

Constant Environment, Inc. (the "Company"), was incorporated on July 21, 2008, under the laws of the State of Nevada as an early stage product and services company that provides microclimate systems to specialty markets, who have a need to protect and preserve rare and/or valuable items.

On December 16, 2009 the Board of Directors of Constant Environment, Inc. (the “Company”) filed a Certificate of Amendment to the Articles of Incorporation with the Secretary of State of Nevada changing the Company’s name to Zentric, Inc

On, November 16, 2011, Zentric, Inc. established a wholly-owned subsidiary in Hong Kong, China. During the period ended September 30, 2012, the Company transferred $90,000 USD to its subsidiary company. Out of the balance transferred, $88,348 was used to as a down payment to purchase solar panels.

2. GOING CONCERN

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America with the assumption that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. The Company suffered a net loss from operations and has a net deficiency, which raises substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments to the amounts and classifications of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.

The Company's ability to continue as a going concern is contingent upon its ability to complete public equity financing and generate profitable operations in the future. Management's plan in this regard is to secure additional funds through equity financing and through loans made by the Company's stockholders.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a)	Basis of Presentation and Principles of Consolidation

The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) and are expressed in U.S. dollars. The financial statements include the accounts of the Company and its subsidiary, Zentric HK Limited, a limited liability company in Hong Kong. All significant intercompany transactions have been eliminated as part of the consolidation. The Company’s fiscal year-end is December 31.

b)	Use of Estimates

The preparation of financial statements in conformity with US 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 and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

c)	Cash and cash equivalents

The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents. As at September 30, 2012 and December 31, 2011, the Company had no cash equivalents.

d)	Basic and Diluted Net Loss per Share

Basic net loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding for the period and, if dilutive, potential common shares outstanding during the period. Potentially dilutive securities consist of the incremental common shares issuable upon exercise of common stock equivalents such as stock options and convertible debt instruments. Potentially dilutive securities are excluded from the computation if their effect is anti-dilutive. As a result; the basic and diluted per share amounts for all periods presented are identical.

e)	Development Stage Company

The Company is currently considered a development stage company as defined by FASB ASC 915-10-05. As a development stage enterprise, the Company discloses the deficit accumulated during the development stage and the cumulative statements of operations and cash flows from inception to the current balance sheet date. An entity remains in the development stage until such time as, among other factors, revenues have been realized. To date, the development stage of the Company’s operations consists of developing the business model and marketing concepts.

f)	Fair Value of Financial Instruments

Pursuant to ASC 820, Fair Value Measurements and Disclosures, an entity is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:

Level 1

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or Liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

The Company’s financial instruments consist principally of cash, accounts payable, accrued liabilities, and amounts due to related parties. Pursuant to ASC 820, the fair value of our cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. We believe that the recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.

g)	Income Taxes

Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted ASC 740 “Accounting for Income Taxes” as of its inception. Pursuant to ASC 740, the Company is required to compute tax asset benefits for net operating losses carried forward. The potential benefits of net operating losses have not been recognized in this financial statement because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.

h)	Foreign Currency Translation

The Company’s functional and reporting currency is the United States dollar. Foreign currency transactions from subsidiary are primarily undertaken in Hong Kong Dollar. Foreign currency transactions are translated to United States dollars in accordance with ASC 830, Foreign Currency Translation Matters, using the exchange rate prevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. As of September 30, 2012, the company recorded a loss of $1,649 due to foreign exchange translation in the income statement under other expenses.

i)	Stock-Based Compensation

The Company adopted FASB guidance on stock based compensation upon inception at November 29, 2010. Under FASB ASC 718-10-30-2, all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative. The Company has not had any stock and stock options issued for services and compensation for the nine months ended September 30, 2012 and 2011.

j)	Recent Accounting Pronouncements

In October 2012, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2012-04, “Technical Corrections and Improvements” in Accounting Standards Update No. 2012-04. The amendments in this update cover a wide range of Topics in the Accounting Standards Codification. These amendments include technical corrections and improvements to the Accounting Standards Codification and conforming amendments related to fair value measurements. The amendments in this update will be effective for fiscal periods beginning after December 15, 2012. The adoption of ASU 2012-04 is not expected to have a material impact on our financial position or results of operations.

In August 2012, the FASB issued ASU 2012-03, “Technical Amendments and Corrections to SEC Sections: Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 114, Technical Amendments Pursuant to SEC Release No. 33-9250, and Corrections Related to FASB Accounting Standards Update 2010-22 (SEC Update)” in Accounting Standards Update No. 2012-03. This update amends various SEC paragraphs pursuant to the issuance of SAB No. 114. The adoption of ASU 2012-03 is not expected to have a material impact on our financial position or results of operations.

In July 2012, the FASB issued ASU 2012-02, “Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment” in Accounting Standards Update No. 2012-02. This update amends ASU 2011-08, Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment and permits an entity first to assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test in accordance with Subtopic 350-30, Intangibles - Goodwill and Other - General Intangibles Other than Goodwill. The amendments are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual and interim impairment tests performed as of a date before July 27, 2012, if a public entity’s financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance. The adoption of ASU 2012-02 is not expected to have a material impact on our financial position or results of operations.

In December 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2011-12, “Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05. This update defers the requirement to present items that are reclassified from accumulated other comprehensive income to net income in both the statement of income where net income is presented and the statement where other comprehensive income is presented. The adoption of ASU 2011-12 is not expected to have a material impact on our financial position or results of operations.

In December 2011, the FASB issued ASU No. 2011-11 “Balance Sheet: Disclosures about Offsetting Assets and Liabilities” (“ASU 2011-11”). This Update requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The objective of this disclosure is to facilitate comparison between those entities that prepare their financial statements on the basis of U.S. GAAP and those entities that prepare their financial statements on the basis of IFRS. The amended guidance is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The Company is currently evaluating the impact, if any, that the adoption of this pronouncement may have on its results of operations or financial position.

In September 2011, the FASB issued ASU No. 2011-08, Intangibles – Goodwill and Other (Topic 350): Testing Goodwill for Impairment. The guidance in ASU 2011-08 is intended to reduce complexity and costs by allowing an entity the option to make a qualitative evaluation about the likelihood of goodwill impairment to determine whether it should calculate the fair value of a reporting unit. The amendments also improve previous guidance by expanding upon the examples of events and circumstances that an entity should consider between annual impairment tests in determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Also, the amendments improve the examples of events and circumstances that an entity having a reporting unit with a zero or negative carrying amount should consider in determining whether to measure an impairment loss, if any, under the second step of the goodwill impairment test. The amendments in this ASU are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted, including for annual and interim goodwill impairment tests performed as of a date before September 15, 2011, if an entity’s financial statements for the most recent annual or interim period have not yet been issued. The adoption of this guidance did not have a material impact on the Company’s financial position or results of operations.

4. STOCKHOLDERS' EQUITY

On May 18, 2011 the Company received Conversion Notice from note holder to settle outstanding debt of $25,000 principal and $4,749 accrued interest by issuing 1,982,258 shares of common stock at a price of $0.015 per share. The total fair value of the shares was $41,627 based on the closing price per share, resulting in a loss of extinguishment of debt of $11,899.

On May 18, 2011 the Company received Conversion Notice from note holder to settle outstanding debt of $50,000 principal and $14,903 accrued interest by issuing 4,326,876 shares of common stock at a price of $0.015 per share. The total fair value of the shares was $90,864 based on the closing price per share, resulting in a loss of extinguishment of debt of $25,961.

On May 18, 2011 the Company received Conversion Notice from note holder to settle outstanding debt of $8,000 principal and $1,402 accrued interest by issuing 626,807 shares of common stock at a price of $0.015 per share. The total fair value of the shares was $13,163 based on the closing price per share, resulting in a loss of extinguishment of debt of $3,761.

On July 20, 2011, Zentric, Inc. (“Company”) completed its Share Exchange Agreement with Ontex Holdings Limited, a Hong Kong Company (“Ontex”), pursuant to which the Company agreed to issue to Ontex 10,000,000 shares of common stock. In exchange, Ontex will issue to the Company 2,000,000 shares of Alpha Lujo, Inc. held by Ontex. Alpha Lujo, Inc.’s common stock is publicly traded on the OTC-BB. The share exchange was valued at $140,000 as an investment by the Company. On the same day the Company also completed the Share Exchange Agreement with Alpha Lujo, Inc. (“Alpha Lujo”), pursuant to which the Company agreed to issue to Alpha Lujo 6,666,667 shares of its common stock in exchange for 800,000 shares of common stock of Alpha Lujo. Based on Alpha Lujo’s most recent filing of their period ended March 31, 2011, the company has a total of 200,000,000 shares authorized and 23,244,000 shares issued and outstanding. Based on the 2,800,000 shares the Company received, that equates to 1.4% of total authorized and 12% of total outstanding. In both instances, it is less than 20% of total equity of Alpha Lujo’s shares, therefore, does not warrant consolidation treatment of the two companies and should be accounted for as an investment and evaluated for impairment periodically.

The share exchange was valued at $93,333 as an investment by the Company. The share exchange does not change the control of the Company. The total value of $233,333 as of the July 20, 2011 was value as an investment assets and evaluated for impairment as of December 31, 2011. Based on evaluation, the company found it appropriate to impair the assets based on the following reason:

-	Company had negative cash flow; and

-	Company only assets is Cash; and

-	Low volume in share trading for the past 12 months; and

-	Company has no revenue stream

On July 14, 2011, the Company completed and authorized the issuance of 15,000,000 common shares for services. The total fair value of the common stock was $232,500 based on the closing price of the Company’s stock on the date of grant.

On December 20, 2011, Zentric, Inc. entered into a subscription agreement to issue 11,000,000 common shares for $220,000 cash investment into the Company. The company received $20,000 as of December, 2011 and the remaining $200,000 was collected during the quarter ended March 31, 2012.

On February 13, 2012, the Company completed and authorized the issuance of 200,000 common shares for services. The total fair value of the common stock was $25,000 based on the closing price of the Company’s stock on the date of grant. As of September 30, 2012 the shares has not been issued and recorded as a stock payable.

During fiscal year 2011, the company granted to an officer/director of the company to acquire 3,000,000 common shares, 1,000,000 vested December 31, 2011 at $0.03 per share; the remaining 2,000,000 will vest on December 31 2012 and 2013 at price of $0.10, and $0.25 per share, respectively. The options have a vesting period of three years or ninety days from termination of employment. The company valuated such options using the Black-Scholes Valuation Model. The options have an expected volatility rate of 282.71% calculated using the Company stock price for a two-year period beginning December 31, 2011. A risk free interest rate of 0.19% was used to value the options. The total value of these options was $25,841, out of the total value the company expensed $9,745 and $6,036 as of December 31, 2011 and September 30, 2012, respectively. As of September 30, 2012, the remaining $10,060 remains unvested.

On March 7, 2012, Zentric, Inc. entered into a subscription agreement to issue 400,000 common shares for $20,000 cash investment into the Company. During the period ended September 30, 2012, the Company received the total $20,000 towards this agreement.

On March 14, 2012, Zentric, Inc. entered into a subscription agreement to issue 1,250,000 common shares for $25,000 cash investment into the Company. As of September 30, 2012, the shares has not been issued and recorded as a stock payable.

On September 1, 2012, Zentric, Inc. entered into a subscription agreement to issue 25,000,000 common shares for $50,000 cash investment into the Company. As of September 30, 2012, the shares has not been issued and recorded as a stock payable.

5. RELATED PARTY TRANSACTIONS

Related party transactions are in the normal course of operations and are recorded at amounts established and agreed between the related parties. Related party transactions not disclosed elsewhere in these financial statements are as follows:

Since inception through period ended September 30, 2012 Company advanced from shareholder is $150,113 and incurred a related party borrowing balance of 171,336. The Company have received, during the nine months period, cash advanced of $220,306 and $382,437 from inception to September 30, 2012, respectively from directors and shareholders. The advances had no stated interest rate and maturity date; as such interest has been imputed at 15% resulting in interest expense of $25,477 and $45,354 for the nine months ended September 30, 2012 and from July 21, 2008 (Inception) to September 30, 2012 respectively.

6. NOTES PAYABLE

During the period ended September 30, 2012 the company has a accumulated related party borrowing of $171,336.

Interest accrual for all loans outstanding as of September 30, 2012 and December 31, 2011 are $1,652 and $752 respectively.

7. CONTINGINCIES

No legal proceedings are currently pending or, to our knowledge, threatened against us that, in the opinion our management, could reasonably be expected to have a material adverse effect on our business or financial conditions or results of operations.

8. DEPOSIT

During the nine months ended September 30, 2012, the Company paid approximately 5% in deposit for solar panels. The total purchase price is $1,740,000, whereby, the Company has to remit the remaining 95% payment prior to completion and shipment of the solar panels. As of September 30, 2012, the Company paid $88,313 and recorded as a long-term asset in the balance sheet. The solar panels will be used toward a project to build an 800KW solar power plant in Leicester, North Carolina.

9. IMPAIRMENT AVAILABLE-FOR-SALE SECURITIES

-	Company had negative cash flow; and

-	Company only assets is Cash; and

-	Low volume in share trading for the past 12 months; and

-	Company has no revenue stream

As of December 31, 2011, due to the above factors, the company has recorded a loss on impairment of securities available-for-sale in the amount of $233,333 under other expense in the statement of operations.

10. SUBSEQUENT EVENTS

In accordance with ASC 855-10 Company management reviewed all material events through the date of this report and there are no material subsequent events to report.

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 appearing elsewhere in this report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to those discussed below and elsewhere in this report. Our financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

Zentric, Inc. (the "Company"), was incorporated on July 21, 2008, under the laws of the State of Nevada as Constant Environment, Inc. and changed it’s name to Zentric, Inc. on December 16, 2009. The company is an advanced battery technology company based on a new and revolutionary technology that incorporates high voltages dual electrolytes to produce higher voltages and power.

On, November 16, 2011, Zentric, Inc. established a wholly-owned subsidiary in Hong Kong, China. Zentric, Inc. has become actively involved in solar project development through this subsidiary. On April 10, 2012, Zentric, Inc. has entered into an Agreement to purchase Innovative Solar I LLC and Innovative Solar II, LLC, each the owner/developer of separate 800KW solar power plants in Leicester, North Carolina valued at $4 million each to build.

Business Division

The business of “Constant Environment” remains as a division of Zenrtic. The division is a separate business that provides microclimate systems to specialty markets, who have a need to protect and preserve rare and/or valuable items.

Employees

Presently our two officers are contributing their services without payment and certain consultants have accepted shares for services.

In the future, we plan to hire five full time employees and two part-time employees. From time to time, we may employ additional independent contractors to support our development, marketing, sales, support and administrative organization. We also intend to hire 2 sales/marketing staff, 1 administrative assistant, and 2 microclimate technicians. Competition for qualified personnel in the industry in which we compete is intense. We believe that our future success will depend in part on our continued ability to attract, hire or acquire and retain qualified employees.

RESULTS OF OPERATIONS FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2012 AND SEPTEMBER 30, 2011.

The Company did not generate any revenues for the three months and nine months ended September 30, 2012 and September 30, 2011.

Professional fees include legal and accounting fees and filing fees. Professional fees for the three months ended September 30, 2012 and September 30, 2011 was $2,000 and $1,748 respectively. Professional fees for the nine months ended September 30, 2012 and September 30, 2011 was $6,900 and $6,300 respectively.

Consulting and subcontracting fees for the three months ended September 30, 2012 and September 30, 2011 was $102,612 and $243,233 respectively. Consulting and subcontracting fees for the nine months ended September 30, 2012 and September 30, 2011 was $394,369 and 295,724 respectively.

Office and general expense for the three months ended September 30, 2012 and September 30, 2011 was $25,357 and $9,029 respectively. Office and general expense for the nine months ended September 30, 2012 and September 30, 2011 was $77,539 and $25,604 respectively.

Interest expense for the three months ended September 30, 2012 and September 30, 2011 was $9,272 and $1,854 respectively. Interest expense for the nine months ended September 30, 2012 and September 30, 2011 was $26,377 and $11,355 respectively.

Research and development expense for the three months ended September 30, 2012 and September 30, 2011 was nil and nil respectively. Research and development expense for the nine months ended September 30, 2012 and September 30, 2011 was $20,000 and nil respectively.

Foreign exchange translation for the three months ended September 30, 2012 and September 30, 2011 was $175 and nil respectively. Foreign exchange translation for the nine months ended September 30, 2012 and September 30, 2011 was $1,649 and nil respectively.

Bank charges expense for the three months ended September 30, 2012 and September 30, 2011 was $1,221 and $72 respectively. Bank charges expense for the nine months ended September 30, 2012 and September 30, 2011 was $3,043 and $207 respectively.

Net loss for the three months ended September 30, 2012 and September 30, 2011 was $140,636 and $255,936 respectively. Net loss for the nine months ended September 30, 2012 and September 30, 2011 was $529,877 and $339,190 respectively. The loss was primarily due to the consulting fees.

Loss per share was $0.00 for the three months ended September 30, 2012 and September 30, 2011. Loss per share was $0.04 and $0.00 respectively for the nine months ended September 30, 2012 and September 30, 2011.

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2012, we had a working capital deficiency of $525,540, which represented a working capital decrease of $266,712 as compared to the working capital deficiency position of $258,828 as of December 31, 2011. The decrease is mainly due to the increase of our accounts payable, advances from related party, and accrued salaries.

Cash flows used in operating activities for the nine month period ended September 30, 2012 and 2011 was $(338,225) and ($43,554) respectively.

Cash flows used in investing activities for the nine month period ended September 30, 2012 and 2011 was $(88,348) and nil respectively.

Cash flows used in financing activities for the nine month period ended September 30, 2012 and 2011 was $482,310 and $40,290, respectively, which was due to loans.

GOING CONCERN

Due to the uncertainty of our ability to meet our current operating and capital expenses, in their report on our audited financial statements for the period ended December 31,2011, our independent registered public accountants included an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our most critical accounting policies, which are those that require significant judgment, include: income taxes and revenue recognition. In-depth descriptions of these can be found in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011. There have been no material changes in our existing accounting policies from the disclosures included in our 2011 Annual Report on Form 10-K.

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any off-balance sheet guarantees, interest rate swap transactions or foreign currency contracts. We do not engage in trading activities involving non-exchange traded contracts.

Item 3. Quantitative and Qualitative Disclosures about Market Risks

We conduct our business in United States dollars. Our market risk is limited to the United States domestic, economic and regulatory factors.

Item 4T. Controls and Procedures

Management's evaluation of disclosure controls and procedures

The management of the company is required to maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer (one individual) as appropriate, to allow timely decisions regarding required disclosure.

In designing and evaluating disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute assurance of achieving the desired objectives. Also, 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, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. The design of any system of controls is based, in part, upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

As of the end of the period covered by this report, the Company conducted an evaluation, under the supervision and with the participation of its principal executive officer and principal financial officer, of the Company’s disclosure controls and procedures. Based on their evaluation, the principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures need improvement and were not adequately effective as of September 30, 2012 to cause the information required to be disclosed in reports that the Company files or submits under the Exchange Act to be recorded, processed, summarized and reported within the time periods prescribed by the SEC, and that such information is accumulated and communicated to management, including the principal executive officer and principal financial officer, as appropriate, to ensure timely decisions regarding required disclosure. Management is in the process of identifying deficiencies with respect to the Company’s disclosure controls and procedures and implementing corrective measures.

Changes in Internal Controls

There was no change in our internal controls over financial reporting identified in connection with the requisite evaluation that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

None

Item 2. Changes in Securities.

None

Item 3. Defaults Upon Senior Securities.

None

Item 4. Mine Safety Disclosures.

None.

Item 5. Other Information

None

Item 6. Exhibits and Reports on Form 8-K

(A) Exhibits

31.1	Certification Pursuant to 18 U.S.C Section 1350, As adopted pursuant to Section 302 of the Sabanes-Oxley Act of 2002

32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, As adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS **	XBRL Instance Document

101.SCH **	XBRL Taxonomy Extension Schema Document

101.CAL **	XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF **	XBRL Taxonomy Extension Definition Linkbase Document

101.LAB **	XBRL Taxonomy Extension Label Linkbase Document

101.PRE **	XBRL Taxonomy Extension Presentation Linkbase Document

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

(B) Reports on Form 8-K

SIGNATURES

In accordance with Section 13 or 15 (d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, there unto duly authorized.

	ZENTRIC, INC.
	Registrant

Date: November 14, 2012	By:	/s/ Jeff Mak
		Jeff Mak
		Chairman, Chief Financial Officer,
		Principal Accounting Officer and Director

Zentric, Inc. - FORM 10-Q - November 14, 2012

Attached files

Zentric, Inc. Reports