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EX-31.1 - FOMO CORP.ex31-1.htm
EX-31.2 - FOMO CORP.ex31-2.htm
EX-32.1 - FOMO CORP.ex32-1.htm

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

(Mark One)
 
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
   
For the Quarterly Period Ended June 30, 2013
 
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 No. 0-19227

 

ZEGARELLI GROUP INTERNATIONAL, INC.

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

 

CALIFORNIA   7929   95-4040591
(State or other jurisdiction of   (Primary Standard Industrial   (I.R.S. Employer
incorporation or organization)   Classification Code Number)   Identification No.)

 

80679 CAMINO SANTA ELISE

INDIO, CALIFORNIA 91352

(Address of principal executive offices)

 

(760) 345-9205

(Registrant’s telephone number, including area code)

 

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 [  ]

 

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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

 

Yes [X] No [  ]

 

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

 

Large accelerated filer [  ] Accelerated filer [  ]
Non-accelerated filer  [  ] Smaller reporting company [X]

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). 

 

Yes [X] No [  ]

 

The number of shares of Common Stock, no par value, of the registrant outstanding at August 13, 2013, was 22,248,337.

 

 

 

 
 

 

ZEGARELLI GROUP INTERNATIONAL, INC.

 

QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDED June 30, 2013

 

TABLE OF CONTENTS

 

      PAGE
       
Part I. FINANCIAL INFORMATION:   F-1
       
  Item 1. Financial Statements:   F-1
       
  Condensed Balance Sheets as of June 30, 2013 (unaudited) and December 31, 2012   F-1
       
  Condensed Statements of Operations (unaudited) for the Three and Six Months ended June 30, 2013 and 2012   F-2
       
  Condensed Statements of Cash Flows (unaudited) for the Six Months ended June 30, 2013 and 2012   F-3
       
  Notes to Condensed Financial Statements (unaudited)   F-4
       
  Item 2. Management’s Discussion and Analysis and Plan of Operation   3
       
  Item 3. Controls and Procedures   6
       
Part II. OTHER INFORMATION:   7
       
  Item 5. Other Information   7
       
  Item 6. Exhibits   7
       
SIGNATURES   8

 

2
 

 

PART I

 

ITEM 1. FINANCIAL STATEMENTS

 

ZEGARELLI GROUP INTERNATIONAL, INC.
BALANCE SHEETS
         
   June 30, 2013    
   (Unaudited)   December 31, 2012 
         
ASSETS:  $-   $- 
           
LIABILITIES AND STOCKHOLDERS’ DEFICIT          
           
Advances from majority stockholder   32,962    17,228 
Accrued interest expenses   3,041    1,625 
Convertible note payable   47,199    47,199 
           
TOTAL CURRENT LIABILITIES  $83,202   $66,052 
           
COMMITMENTS AND CONTINGENCIES          
           
STOCKHOLDERS’ DEFICIT          
Preferred stock - $.01 par value, 1,000,000 shares authorized, 0 shares issued and outstanding  $-   $- 
Common stock, no par value, 25,000,000 shares authorized, 22,248,337 shares issued and outstanding   7,436,101    7,436,101 
Contributed capital   918,231    918,231 
Accumulated deficit   (8,437,534)   (8,420,384)
           
TOTAL STOCKHOLDERS’ DEFICIT   (83,202)   (66,052)
           
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT  $-   $- 

 

SEE ACCOMPANYING NOTES TO FINANCIALS

 

F-1
 

 

ZEGARELLI GROUP INTERNATIONAL, INC.
STATEMENTS OF OPERATIONS (Unaudited)
                 
   Three Months Ended June 30,   Six Months Ended June 30, 
   2013   2012   2013   2012 
                 
REVENUES  $-   $-   $-   $- 
                     
EXPENSES                    
Administrative   1,046    -    1,278      
Professional fees   3,069    -    13,656    475 
                     
TOTAL EXPENSES   4,115    -    14,934    475 
                     
OTHER EXPENSES                    
Interest expense   708    -    1,416      
                     
LOSS BEFORE TAXES   (4,823)   -    (16,350)   (475)
                     
INCOME TAX EXPENSE   -    -    800    800 
                     
NET LOSS  $(4,823)  $-   $(17,150)  $(1,275)
                     
NET LOSS PER COMMON SHARE                    
Basic and diluted  $-   $-   $-   $- 
                     
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING   22,248,337    22,248,337    22,248,337    22,248,337 

  

SEE ACCOMPANYING NOTES TO FINANCIALS

 

F-2
 

 

ZEGARELLI GROUP INTERNATIONAL, INC.
STATEMENTS OF CASH FLOWS (Unaudited)
         
   Six Months Ended 
   June 30, 2013   June 30, 2012 
         
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net loss  $(17,150)  $(1,275)
           
Changes in liabilities:          
Increase in accrued expenses   1,416    - 
           
Net cash used in operating activities   (15,734)   (1,275)
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Advances from stockholder   15,734    1,275 
           
Net cash provided by financing activities   15,734    1,275 
           
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS   -    - 
           
Cash and cash equivalents at beginning of period   -    - 
           
Cash and cash equivalents at end of period  $-   $- 
           
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION     
           
Income taxes paid  $800   $800 
           
Interest paid  $-   $- 

 

SEE ACCOMPANYING NOTES TO FINANCIALS

 

F-3
 

 

ZEGARELLI GROUP INTERNATIONAL, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

 

1. OPERATIONS AND BASIS OF PRESENTATION

 

Zegarelli Group International, Inc. (the “Company”) was incorporated on February 27, 1990. The Company manufactured cosmetic products for private label distributions throughout the United States. The Company ceased operations and has been inactive since 2002. The Company was publicly-traded company listed on the OTC Bulletin Board (“pink-sheets”). On November 9, 1998, the Company filed a Form 15 with the Securities and Exchange Commission (“SEC”) terminating its registration under Section 12(g) of the Securities Act of 1934, which relieved the Company of its requirement to file reports with the SEC. Even though the Company has not made any further filings with the SEC since 1998, the Company has had some minimal stock trading activity.

 

The Company’s board is now considering merging with another entity that has viable operations. As such, the existing company is not going to continue as a going concern after any merger. The financial statements do not contain any adjustments that would be necessary should the Company not continue as a going concern.

 

During interim periods, we follow the accounting policies set forth in Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012 and apply appropriate interim financial reporting standards for a fair statement of Company’s operating results and financial position in conformity with accounting principles generally accepted in the United States of America, as codified by the Financial Accounting Standards Board (FASB) in the Accounting Standards Codification (ASC) (referred to herein as U.S. GAAP), as indicated below. Users of financial information produced for interim periods are encouraged to read this Quarterly Report on Form 10-Q in conjunction with Company’s financial statements and notes thereto filed with the Securities and Exchange Commission (SEC) in Company’s 2012 Annual Report on Form 10-K.

 

Interim financial reporting standards require management to make estimates that are based on assumptions regarding the outcome of future events and circumstances not known at that time. Inevitably, some assumptions will not materialize, unanticipated events or circumstances may occur which vary from those estimates and such variations may significantly affect Company’s future results. 

 

The accompanying unaudited condensed financial statements have been prepared in accordance with the SEC’s requirements for Form 10-Q and, in the opinion of management, contain all adjustments, of a normal and recurring nature, which are necessary for a fair statement of; (i) the condensed statements of operations for the six month periods ended June 30, 2013 and 2012; (ii) the condensed balance sheets at June 30, 2013 and December 31, 2012; and (iii) the condensed statements of cash flows for the six month periods ended June 30, 2013 and 2012. However, the accompanying unaudited condensed financial statements do not include all information and notes required by U.S. GAAP. The condensed consolidated balance sheet, included in this report, as of December 31, 2012 was derived from Company’s 2012 audited financial statements, but does not include all disclosures required by U.S. GAAP.

 

2. GOING CONCERN

 

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States (GAAP) that contemplate continuation of the Company as a going concern. During the six months ended June 30, 2013 and 2012, the Company incurred a net loss of $12,327 and $800, respectively. In addition, the Company had an accumulated deficit of $8,437,534 as of June 30, 2013. The Company has not earned any significant revenues since inception. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

 

The Company’s ability to continue in existence is dependent on its ability to develop additional sources of capital, and/or achieve profitable operations and positive cash flows. Management’s plan is to aggressively pursue its present business plan. Since inception the Company has funded its operations through the issuance of common stock and related party loans and advances, and will seek additional debt or equity financing as required. However, there can be no assurance that the Company will be successful in raising such additional funds. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

F-4
 

 

ZEGARELLI GROUP INTERNATIONAL, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

 

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Use of EstimatesThe preparation of 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 revenues and expenses during the reported period. Actual results could differ from those estimates.

 

Cash and Cash Equivalents – Cash equivalents consist of highly liquid investments with original maturities of three months or less.

 

Revenue Recognition – The Company recognizes revenue upon concluding that all of the fundamental criteria for revenue recognition have been met. The criteria are usually met at the time products are shipped. The Company performs ongoing credit evaluations of its customers’ financial condition and records a reserve for sales returns and allowances based on the historical rate of returns on its products.

 

Research and Development Costs – The Company expenses research and development costs as incurred. The Company had no such expenses for the six months period ended June 30, 2013 and 2012.

 

Advertising Costs – Costs incurred for producing and communicating advertising are expensed when incurred and included in selling general and administrative expenses. Advertising expense amounted to $0 for the six months ended June 30, 2013 and 2012, respectively.

 

Property and Equipment – Property and equipment are stated at cost. Major renewals and improvements are charged to the asset accounts while replacements, maintenance and repairs, which do not improve or extend the lives of the respective assets are expensed. At the time property and equipment are retired or otherwise disposed of, the asset and related accumulated depreciation accounts are relieved of the applicable amounts. Gains or losses from retirements or sales are credited or charged to income. Property and equipment are depreciated over the useful lives of the asset using the straight line method.

 

Earnings Per ShareBasic earnings per share are computed by dividing earnings available to common stockholders by the weighted average number of outstanding common shares during the period. Diluted earnings per share is computed by dividing net income by the weighted average number of shares outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if the potentially dilutive securities had been issued. For the six months ended June 30, 2013 and 2012, the Company has incurred losses; therefore the effect of any Common Stock equivalent would be anti-dilutive during those periods.

 

Impairment of Long-Lived Assets and Assets – The Company reviews long-lived assets to be held and used for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the sum of the expected future undiscounted cash flows is less that the carrying amount of the asset, an impairment loss is recorded. No impairment losses were recognized for the six months ended June 30, 2013 and 2012.

 

Income Taxes – The Company accounts for income taxes in accordance with FASB Codification, “Accounting for Income Taxes.” This statement requires an asset and liability approach for accounting for income taxes. The accounting principles generally accepted in the United States of America provides accounting and disclosure guidance about positions taken by an entity in its tax returns that might be uncertain.

 

The accounting principles generally accepted in the United States of America provides accounting and disclosure guidance about positions taken by an organization in its tax returns that might be uncertain. Management has considered its tax positions and believes that all of the positions taken by the Company in its Federal and State tax returns are more likely than not to be sustained upon examination. The Company files income tax returns in the U.S. and various state jurisdictions. The Company is subject to examinations by U.S. Federal and State tax authorities from 2010 to the present, generally for three years after they are filed.

 

F-5
 

 

ZEGARELLI GROUP INTERNATIONAL, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

 

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

Fair Value of Financial Instruments – The carrying values of cash equivalents, accounts receivable, accounts payable, short-term debt to a related party and accrued liabilities and those potentially subject to valuation risk at June 30, 2013 and December 31, 2012 approximated fair value due to their short maturity or nature.

 

Concentration of Credit Risk – Financial instruments, which potentially subject the company to concentrations of credit risk, consist principally of cash and cash equivalents. At June 30, 2013 and December 31, 2012 the Company had no cash and cash equivalents.

 

4. RELATED PARTY TRANSACTIONS

 

The majority stockholder has advanced the Company funds to bring it into compliance with various regulations and tax laws. During the six months period June 30, 2013 and 2012, this stockholder advanced $15,734 and $1,275, respectively. The advances are due upon demand and bear no interest.

 

5. CONVERTIBLE NOTE PAYABLE

 

On September 14, 2012, the Company acknowledged and formalized monies advanced to the Company over the past three years by entering into a 6% convertible promissory note in favor of Alfred Booth, Jr. in the principal amount of $47,199, which was the outstanding balance owed to Mr. Booth as of June 30, 2012. The entire note balance plus accrued interest of $3,041 was outstanding as of June 30, 2013.

 

F-6
 

 

Item 2. Management’s Discussion and Analysis or Plan of Operation.

 

This 10−Q contains forward-looking statements. Our actual results could differ materially from those set forth as a result of general economic conditions and changes in the assumptions used in making such forward-looking statements. The following discussion and analysis of our financial condition and results of operations should be read together with the audited consolidated financial statements and accompanying notes and the other financial information appearing elsewhere in this report. The analysis set forth below is provided pursuant to applicable Securities and Exchange Commission regulations and is not intended to serve as a basis for projections of future events. Refer also to “Risk Factors” and “Cautionary Note Regarding Forward Looking Statements” in Item 1 above.

 

The Company has been inactive since April 1, 2000. The Company has not had any revenues from operations during the last seven fiscal years nor any interim period in the current fiscal year for which financial statements are furnished in this Registration or amendments thereto. Therefore, the Company is not able to nor required to provide comparative period-to-period analysis of its operations pursuant to Item 303 of Regulation B.

 

Plan of Operations

 

We are currently investigating to acquire a target company or business seeking the perceived advantages of being a publicly held corporation. Our principal business objective for the next six months and beyond such time will be to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings. The Company will not restrict our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.

 

The Company does not currently engage in any business activities that provide cash flow. The costs of investigating and analyzing business combinations and administering the Company’s business for the next six months are established to be as follows:

 

(i) filing of Exchange Act reports, (approximately $10,000) and

 

(ii) costs relating to consummating an acquisition (approximately $10,000).

 

We believe we will be able to meet these costs through additional amounts, as necessary, to be loaned to or invested in us by our stockholders, management or other investors. During the six months ended June 30, 2013, our CEO and President, Alfred Booth, loaned us $15,734.

 

The Company may consider a business which has recently commenced operations, is a developing company in need of additional funds for expansion into new products or markets, is seeking to develop a new product or service, or is an established business which may be experiencing financial or operating difficulties and is in need of additional capital. In the alternative, a business combination may involve the acquisition of, or merger with, a company which does not need substantial additional capital, but which desires to establish a public trading market for its shares, while avoiding, among other things, the time delays, significant expense, and loss of voting control which may occur in a public offering.

 

None of our officers or directors has had any preliminary contact or discussions with any representative of any other entity regarding a business combination with us. Any target business that is selected may be a financially unstable company or an entity in its early stages of development or growth, including entities without established records of sales or earnings. In that event, we will be subject to numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. In addition, we may effect a business combination with an entity in an industry characterized by a high level of risk, and, although our management will endeavor to evaluate the risks inherent in a particular target business, there can be no assurance that we will properly ascertain or assess all significant risks.

 

Our management anticipates that it will likely be able to effect only one business combination, due primarily to our limited financing, and the dilution of interest for present and prospective shareholders, which is likely to occur as a result of our management’s plan to offer a controlling interest to a target business in order to achieve a tax-free reorganization. This lack of diversification should be considered a substantial risk in investing in us, because it will not permit us to offset potential losses from one venture against gains from another.

 

3
 

 

The Company anticipates that the selection of a business combination will be complex and extremely risky. Because of general economic conditions, rapid technological advances being made in some industries and shortages of available capital, our management believes that there are numerous firms seeking even the limited additional capital that we will have and/or the perceived benefits of becoming a publicly traded corporation. Such perceived benefits of becoming a publicly traded corporation include, among other things, facilitating or improving the terms on which additional equity financing may be obtained, providing liquidity for the principals of and investors in a business, creating a means for providing incentive stock options or similar benefits to key employees, and offering greater flexibility in structuring acquisitions, joint ventures and the like through the issuance of stock. Potentially available business combinations may occur 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.

 

Sources of Business Opportunities

 

The Company intends to use various sources in its search for potential business opportunities including its officers and directors, consultants, special advisors, securities broker-dealers, venture capitalists, members of the financial community and others who may present management with unsolicited proposals. Because of the Company’s limited capital, it may not be able to retain on a fee basis professional firms specializing in business acquisitions and reorganizations. The Company will most likely have to rely on outside sources, not otherwise associated with the Company that will accept their compensation only after the Company has finalized a successful acquisition or merger. The Company will rely upon the expertise and contacts of such persons use notices in written publications and personal contacts to find merger and acquisition candidates, the exact number of such contacts are dependent upon the skill and industriousness of the participants and the conditions of the marketplace. To date the Company has not engaged nor entered into any definitive agreements nor understandings regarding retention of any consultant to assist the Company in its search for business opportunities, nor is management presently in a position to actively seek or retain any prospective consultants for these purposes.

 

The Company does not intend to restrict its search to any specific kind of industry or business. The Company may investigate and ultimately acquire a venture that is in its preliminary or development stage, is already in operation, or in various stages of its corporate existence and development. Management cannot predict at this time the status or nature of any venture in which the Company may participate. A potential venture might need additional capital or merely desire to have its shares publicly traded. The most likely scenario for a possible business arrangement would involve the acquisition of, or merger with, an operating business that does not need additional capital, but which merely desires to establish a public trading market for its shares. Management believes that the Company could provide a potential public vehicle for a private entity interested in becoming a publicly held corporation without the time and expense typically associated with an initial public offering.

 

Evaluation

 

Once the Company has identified a particular entity as a potential acquisition or merger candidate, management will seek to determine whether acquisition or merger is warranted or whether further investigation is necessary. Such determination will generally be based on management’s knowledge and experience, (limited solely to working history) or with the assistance of outside advisors and consultants evaluating the preliminary information available to them. Management may elect to engage outside independent consultants to perform preliminary analysis of potential business opportunities. However, because of the Company’s limited capital it may not have the necessary funds for a complete and exhaustive investigation of any particular opportunity. Management will not devote full time to finding a merger candidate, will continue to engage in outside unrelated activities, and anticipates devoting no more than an average of five (5) hours weekly to such undertaking.

 

In evaluating such potential business opportunities, the Company will consider, to the extent relevant to the specific opportunity, several factors including potential benefits to the Company and its shareholders; working capital, financial requirements and availability of additional financing; history of operation, if any; nature of present and expected competition; quality and experience of management; need for further research, development or exploration; potential for growth and expansion; potential for profits; and other factors deemed relevant to the specific opportunity.

 

4
 

 

Because the Company has not located or identified any specific business opportunity as of the date hereof, there are certain unidentified risks that cannot be adequately expressed prior to the identification of a specific business opportunity. There can be no assurance following consummation of any acquisition or merger that the business venture will develop into a going concern or, if the business is already operating, that it will continue to operate successfully. Many of the potential business opportunities available to the Company may involve new and untested products, processes or market strategies which may not ultimately prove successful.

 

Form of Potential Acquisition or Merger

 

Presently the Company cannot predict the manner in which it might participate in a prospective business opportunity. Each separate potential opportunity will be reviewed and, upon the basis of that review, a suitable legal structure or method of participation will be chosen. The particular manner in which the Company participates in a specific business opportunity will depend upon the nature of that opportunity, the respective needs and desires of the Company and management of the opportunity, and the relative negotiating strength of the parties involved. Actual participation in a business venture may take the form of an asset purchase, lease, joint venture, license, partnership, stock purchase, reorganization, merger or consolidation. The Company may act directly or indirectly through an interest in a partnership, corporation, or other form of organization however, the Company does not intend to participate in opportunities through the purchase of minority stock positions.

 

Because of the Company’s current status of inactivity since 2000 and its concomitant lack of assets and relevant operating history, it is likely that any potential merger or acquisition with another operating business will require substantial dilution to the Company’s existing shareholder’s interests. There will probably be a change in control of the Company, with the incoming owners of the targeted merger or acquisition candidate taking over control of the Company. Management has not established any guidelines as to the amount of control it will offer to prospective business opportunity candidates, since this issue will depend to a large degree on the economic strength and desirability of each candidate, and the corresponding relative bargaining power of the parties. However, management will endeavor to negotiate the best possible terms for the benefit of the Company’s shareholders as the case arises. Management may actively negotiate or otherwise consent to the purchase of any portion of their common stock as a condition to, or in connection with, a proposed merger or acquisition. In such an event, existing shareholders may not be afforded an opportunity to approve or consent to any particular stock buy-out transaction.

 

Management does not have any plans to borrow funds to compensate any persons, consultants, or promoters in conjunction with its efforts to find and acquire or merge with another business opportunity. Management does not have any plans to borrow funds to pay compensation to any prospective business opportunity, or shareholders, management, creditors, or other potential parties to the acquisition or merger. In either case, it is unlikely that the Company would be able to borrow significant funds for such purposes from any conventional lending sources. In all probability, a public sale of the Company’s securities would also be unfeasible, and management does not contemplate any form of new public offering at this time. In the event that the Company does need to raise capital, it would most likely have to rely on the private sale of its securities. Such a private sale would be limited to persons exempt under the Commissions’ Regulation D or other rule, or provision for exemption, if any applies. However, no private sales are contemplated by the Company’s management at this time. If a private sale of the Company’s securities is deemed appropriate in the future, management will endeavor to acquire funds on the best terms available to the Company. However, there can be no assurance that the Company will be able to obtain funding when and if needed, or that such funding, if available, can be obtained on terms reasonable or acceptable to the Company. The Company does not anticipate using Regulation S promulgated under the Securities Act of 1933 to raise any funds any time within the next year, subject only to its potential applicability after consummation of a merger or acquisition.

 

In the event of a successful acquisition or merger, a finder’s fee, in the form of cash or securities of the Company, may be paid to persons instrumental in facilitating the transaction. The Company has not established any criteria or limits for the determination of a finder’s fee, although most likely an appropriate finder’s fee will be negotiated between the parties, including the potential business opportunity candidate, based upon economic considerations and reasonable value as estimated and mutually agreed upon at that time. A finder’s fee would only be payable upon completion of the proposed acquisition or merger in the normal case, and management does not contemplate any other arrangement at this time. Current management has not in the past used any particular consultants, advisors or finders. Management has not actively undertaken a search for, or retention of, any finder’s fee arrangement with any person. It is possible that a potential merger or acquisition candidate would have its own finder’s fee arrangement, or other similar business brokerage or investment banking arrangement, whereupon the terms may be governed by a pre-existing contract; in such case, the Company may be limited in its ability to affect the terms of compensation, but most likely the terms would be disclosed and subject to approval pursuant to submission of the proposed transaction to a vote of the Company’s shareholders. Management cannot predict any other terms of a finder’s fee arrangement at this time. If such a fee arrangement was proposed, independent management and directors would negotiate the best terms available to the Company so as not to compromise the fiduciary duties of the representative in the proposed transaction, and the Company would require that the proposed arrangement would be submitted to the shareholders for prior ratification in an appropriate manner.

 

5
 

 

Employees

 

Apart from management, we have no employees. Mr. Booth, our Chairman, President and Chief Executive Officer, Ms. Zegarelli, our Vice-President and Secretary, and Ms. Booth our Chief Financial Officer, will be responsible for managing our administrative affairs, including our reporting obligations pursuant to the requirements of the Exchange Act. It is anticipated that management will engage consultants, attorneys and accountants as necessary for us to conduct our business operations and to implement and successfully complete our business plan. Our directors and officers are engaged in outside business activities and anticipate that they will devote very limited time to our business until the acquisition of a successful business opportunity has been identified.

 

Competition

 

The Company will remain an insignificant participant among the firms which engage in the acquisition of business opportunities. There are many established venture capital and financial concerns that have significantly greater financial and personnel resources and technical expertise than the Company. In view of the Company’s extremely limited financial resources and limited management availability, the Company will continue to be at a significant competitive disadvantage compared to the Company’s competitors.

 

Item 3. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

As of the end of the period covered by this report on Form 10-Q, our President (principal executive officer) and our Chief Financial Officer performed an evaluation of the effectiveness of and the operation of our disclosure controls and procedures as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Exchange Act. Based on that evaluation, our President and Chief Financial Officer each concluded that as of the end of the period covered by this report on Form 10-Q, our disclosure controls and procedures are effective in timely alerting them to material information relating to Zegarelli Group International, Inc. required to be included in our Exchange Act filings.

 

Changes in Internal Control Over Financial Reporting

 

There have been no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or Rule 15d-15 under the Exchange Act that occurred during the quarter ended June 30, 2013 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

6
 

 

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.

 

Not applicable.

 

Item 4. Submission of Matters to a Vote of Security Holders.

 

None.

 

Item 5. Other Information.

 

None.

 

Item 6. Exhibits.

 

(a) Exhibits.

 

Exhibit   Item
     
31.1 *   Certification of Chief Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002
     
31.2 *   Certification of Chief Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002
     
32.1 *   Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

* Filed herewith.

 

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SIGNATURES

 

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  ZEGARELLI GROUP INTERNATIONAL, INC.
   
Date: August 14, 2013 /s/ Alfred E. Booth
 

Alfred E. Booth, President

(Principal Executive Officer)

   
Date: August 14, 2013 /s/ Marie Booth
 

Marie Booth, Chief Financial Officer

(Principal Financial and Accounting Officer)

 

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