Attached files

file filename
EX-32 - ZOOM COMPANIES INC.bdf10qjune302015v11ahtmlex32.htm
EX-31 - ZOOM COMPANIES INC.bdf10qjune302015v11ahtmlex31.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 June 30, 2015


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


For the transition period from


Commission File No. 333-167249


BALLROOM DANCE FITNESS, INC.

 (Exact name of registrant as specified in its charter)

 Florida

(State or other Jurisdiction of Incorporation or Organization)

26-3994216

(I.R.S. Employer Identification No.)

 

5280 North Ocean DR Suite 2-F

Riviera  Beach, Florida


33404

(Address of Principal Executive Offices)

(Zip Code)

 

Issuer's Telephone Number: (954) 684-8288


111 U.S. Highway One

North Palm  Beach,  Florida 33408

(Former name, former address and former

Fiscal quarter, if changed since last report)


Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days

[X] Yes      [   ] No


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§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




1

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer, "non-accelerated filer" and smaller reporting company 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 Exchange Act).

[    ] Yes      [X] No


State the number of shares outstanding of each of the issuer's classes of common equity, as of the last practicable date:  As of August 19, 2015, there were 24,392,286 shares of common stock, par value $0.0001 per share, of the Registrant issued and outstanding.  










 


2

 

TABLE OF CONTENTS





 

Page

PART I - FINANCIAL INFORMATION

 

Item 1.

Condensed Consolidated Financial Statements

4

Item 2.

Managements Discussion and Analysis of Financial

Condition and Results of Operations

14

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

18

Item 4.

Controls and Procedures

18

PART II - OTHER INFORMATION

 

Item 1.

Legal Proceedings

18

Item 1A.

Risk Factors

18

Item 2.

Unregistered Sale of Equity Securities and Use of Proceeds

19

Item 3.

Defaults Upon Senior Securities

19

Item 4.

Mine Safety Disclosures

19

Item 5.

Other Information

19

Item 6.

Exhibits

19

SIGNATURES

20

 






3

 

PART I - FINANCIAL INFORMATION


Item 1.      Condensed Consolidated Financial Statements


BALLROOM DANCE FITNESS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS





 


June 30,


December 31,

 


2015


2014

 


(Unaudited)



 

ASSETS




 

CURRENT ASSETS:




 

Cash

 $               12,904


 $                 9,644

 

TOTAL CURRENT ASSETS:

                  12,904


                    9,644

 





 

PROPERTY AND EQUIPMENT - NET

               187,400


               102,695

 





 

OTHER ASSETS




 

Security Deposit

                  28,755


                 18,085

 

Prepaid Expenses

                           -   


                 17,820

 

Website Development

                  71,386


                 11,216

 

Video Production

                  71,528


                 71,180

 

Intangible assets

               395,500


                 20,000

 

Goodwill

               356,235


               356,235

 

TOTAL ASSETS

 $          1,123,208


 $            606,875

 





 

LIABILITIES AND STOCKHOLDERS' DEFICIENCY




 





 

LIABILITIES:




 

Accounts Payable

 $                   2,187


 $                1,854

 

Bank Overdraft

                  11,312


                    3,153

 

Deferred Rent

                  21,692


                 14,077

 

Obligation for acquisition of intangible assets

112,500


-

 

Due to Stockholders

            1,346,217


               654,344

 

TOTAL CURRENT LIABILITIES:

            1,493,908


               673,428

 

 




 

COMMITMENTS AND CONTINGENCIES




 

 




 

STOCKHOLDERS' DEFICIENCY:




 





 

Preferred stock, $1 par value; 10,000,000 shares authorized; 200 shares issued and outstanding at June 30, 2015 and December 31, 2014

                       200


                       200

 

Common stock, $.0001 par value; 100,000,000 shares authorized; 24,352,286 and 17,682,286 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively

                    2,435


                    1,768

 

Additional paid in capital

               878,531


               612,398

 

Deferred compensation

                (76,000)   


                  (3,000)

 

Accumulated deficit

          (1,175,366)


             (677,919)

 

TOTAL STOCKHOLDERS' DEFICIENCY

              (370,200)


                (66,553)

 

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY

 $         1,123,208


 $            606,875

 





 





 

                               See accompanying notes to the condensed consolidated financial statements.




4

BALLROOM DANCE FITNESS, INC.

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

(UNAUDITED)

 










 



Three Months Ended


Six Months Ended

 



June 30,


June 30,


June 30,


June 30,

 



2015


2014


2015


2014

 










 

Revenue


 $             45,905


 $           36,571


 $          120,520


 $           76,693

 

Cost of Sales


             (18,862)


           (14,937)


           (69,294)


            (38,167)

 



 




 



 

Gross Profit


                 27,403


             21,634

 

            51,226


             38,526

 










 

Expenses:









 

Rent


               50,216


             20,670


          112,492


             41,340

 

Personnel Costs


               25,398


               4,997


            63,508


                8,129

 

Professional Fees


               62,836


             10,225


          162,586


             30,325

Interest Expense


               28,741


               4,165


            38,970


                8,330

 

Other General and Administrative Expenses


            88,891


             32,341


          171,116


             58,968

 

Total Expenses


            256,082


             72,398


548,672


           147,092

 

Net Loss


 $        (229,039)


 $        (50,764)


 $       (497,446)


 $       (108,566)

 










 

Basic and diluted loss per common share


 $              (0.01)


 $            (0.01)


 $             (0.03)


 $             (0.01)

 










 

Weighted average common shares outstanding


       17,908,879


     13,292,786


    17,796,842


     13,261,709

 










 










 

See accompanying notes to the condensed consolidated financial statements

 

 

5

 

 

BALLROOM DANCE FITNESS, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS DEFICIENCY

(UNAUDITED)












Preferred Stock

 Common Stock

Additional

Deferred

Accumulated




Shares

Amount

Shares

Amount

Paid-In Capital

Compensation

Deficit


Total











Balance December 31, 2014

   200

 $     200

         17,682,286

 $          1,768

 $        612,398

 $          (3,000)

 $          (677,919)


 $      (66,553)











Stock Issued for Prepaid Services

                     -   

                -   

             -   

                 -   

                       -   

               3,000

                          -   


             3,000











Stock Issued for Consulting Services

      -

            -

3,060,000

306

             122,0904

(76,000)

-


           44,000











Stock Issued for Intangible Asset Acquisitions

      -

            -

3,600,000

360

           143,640

-

-


         144,000











Stock issued to settle stockholder debt

-

-

10,000

1

399

-

-


400

Net loss

                     -   

                -   

             -   

                 -   

                       -   

                      -   

             (497,446)


 $    (497,446)

Balance June 30, 2015

   200

 $     200

         24,352,286

 $           2,435

 $        878,531

 $       (76,000)   

 $      (1,175,365)


 $    (370,200)





















See accompanying notes to the condensed consolidated financial statements

 

 

6

 


BALLROOM DANCE FITNESS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)
















Six Months Ended







June 30,


June 30,







2015


2014

Cash flows from operating activities:





Net Loss



 $             (497,446)


 $         (108,566)


Adjustments to reconcile net loss to net






cash used in operating activities:






Depreciation and amortization


                    33,500


                 6,389



Stock based compensation


                    46,400


                 2,000



Changes in assets and liabilities:







Decrease in Prepaid Expenses

                    17,820


-




Increase in Bank Overdraft

                       8,159


-




Increase in Deferred Rent

                       7,615


-




Decrease Deferred Stock Compensation

                       3,000


-




Increase in due from related party



                   (495)




Increase in accounts payable

                        (1,266)


             (15,955)

Cash flows used in operations activities

                (382,218)


           (116,627)










Cash flows used in investing activities:





Purchase of Fixed Assets


                (112,205)


             (61,234)


Website development costs


                   (60,170)


-


Video production costs


                        (350)


-


Payment of security deposit


                   (10,670)


                (3,250)


Payment of cash for intangible asset-license

                (125,000)


             (20,000)

Cash flows used in investing activities:

                (308,395)


             (84,484)










Cash flows provided from financing activities:





Advances from stockholder


                  693,873


             231,807

Cash flows provided from financing activities:

                  693,873


             231,807










Net change in cash and cash equivalents

                       3,260


               30,696










Cash and cash equivalents, beginning of period

                       9,644


                     665










Cash and cash equivalents, end of period

 $                 12,904


 $             31,361










SUPPLEMNTAL DISCLOSURE OF CASH FLOW INFORMATION:



Interest  paid



 $                          -   


 $                     -   

Taxes paid



 $                          -   


 $                     -   

SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:




Common stock issued for acquisition of intangible assets

$               144,000


$                       -

Common stock issued to settle stockholder debt

$                       400


$                       -










See accompanying notes to the condensed consolidated financial statements.


 



7

 

 

BALLROOM DANCE FITNESS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 (UNAUDITED)


NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES


Organization


Ballroom Dance Fitness, Inc. was organized January 2, 2009 under the laws of the State of Florida. The Company has earned revenues from providing private dance lessons and fitness dance classes in South Florida and operates a ballroom dance venue in North Palm Beach, Florida. In October 2013, the Company acquired the assets of Plaza Ballroom and Event Centre and on April 18, 2014, acquired a license from the National Dance Council of America to operate ballroom dance competitions in the county of Palm Beach, Florida.


The Company has created three wholly owned subsidiaries under the laws of the state of Florida: Palm Beach Dance Challenge, LLC for the purpose of marketing dance competitions in Palm Beach, Florida; Plaza Ballroom  & Event Centre, LLC to operate a ballroom dance hall and event center in Palm Beach, Florida; and Pro Arena Rugby, Inc. for the purpose of the formation of a World Arena Rugby League.


During the three months ended June 30, 2015, the Company, through its wholly owned subsidiaries, acquired the rights to 1) the World Arena Rugby League for consideration of 3,000,000 shares of common stock, 2) a 70% interest in the Great American Divas for consideration of 600,000 shares of common stock, and 3) a 50% in the net profits of Kobra and the Lotus for cash consideration of $237,500.  See note 5.  The World Arena Rugby League is a concept to form a new indoor Rugby league.  The Great American Divas is a Broadway style show featuring music and production of the 70s era. The Company plans to produce and promote a series of Live Concert events featuring the Great American Divas in 2015, with the ultimate goal of securing residency in casino showrooms nationwide in 2016. It is the Companys intention to franchise the production and expand its presence globally. The Company through its licensing agreement has secured the recording, touring, and merchandising rights.  Kobra and the Lotus is a Canadian recording artist scheduled to perform 90 plus shows in 2015 throughout Canada, USA, and Europe, and plans to release a new record in the second quarter of 2016.


The Company is broadening its business plan with investments, acquisitions, new products and joint ventures creating a diversified Entertainment Company that has multiple divisions and subsidiaries in the Music Industry, Merchandising Industry, Professional Sports Industry, Fitness Industry, Dancing Industry and Special Events Venue.


The Company has not only changed the business plan, it is in the process of changing its name to ZOOM Companies, Inc. and is waiting for FINRA to assign a new trading symbol.


Basis of Accounting


The accompanying unaudited condensed consolidated financial statements have been prepared by the Company without audit.  In the opinion of management, all adjustments necessary to present the financial position, results of operations and cash flows for the stated periods have been made.  Except as described below, these adjustments consist only of normal and recurring adjustments. Certain information and note disclosures normally included in the Companys annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with a reading of the Companys financial statements and notes thereto included in the Companys Form 10-K annual report filed with the



8

 

Securities and Exchange Commission (SEC) on April 15, 2015.  Interim results of operations for the six months ended June 30, 2015 are not necessarily indicative of future results for the full year. 


Principle of Consolidation


The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.


Use of Estimates


The preparation of financial statements in conformity with generally accepted accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.  Actual results could differ from those estimates


Fair Value of Financial Instruments


The Companys consolidated balance sheets include certain financial instruments. The carrying amounts of accounts payable and due to stockholder approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization.


Cash and Cash Equivalents


 Cash and cash equivalents includes all cash deposits and highly liquid financial instruments with an original maturity of three months or less.


Intangible Assets

 

Intangible assets, which are composed of music rights, rights to dance competitions, sports leagues, music acts and goodwill. Intangible assets with indefinite lives, which are not amortized but are reviewed for impairment at least annually. All intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable.  The Companys rights to a recording artist are being amortized over the estimated life of 10 years.  An impairment loss is recognized if the carrying amount of the asset exceeds its fair value.  No impairment loss has been recognized during the six months ended June 30, 2015 and year ended December 31, 2014.


Stock-based Compensation


Share-based payments to employees, including grants of employee stock options are recognized as compensation expense in the financial statements based on their fair values, in accordance with FASB ASC Topic 718.  That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).  The Company had no common stock options or common stock equivalents granted or outstanding for all periods presented.  The Company may issue shares as compensation in future periods for employee services.


The Company may issue restricted stock to consultants for various services.  Cost for these transactions will be measured at the fair value of the services provided or the fair value of the equity instruments issued, whichever is more reliably measurable.  The value of the common stock is to be measured at the earlier of:  (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached, or (ii) the date at which the counterparty's performance is complete.  The Company may issue shares as compensation in future periods for services associated with the registration of the common shares.




9

 

Revenue recognition


The Company leases its studio to third parties, who collect and retain fees for events and lessons.  The Company recognizes revenues related to these arrangements during the period in which the events are held or lessons are given.  Ancillary revenues related to events, including music concerts, sporting tickets, food and beverage sales, are recognized during the period in which the events are held.


Income taxes


We account for income taxes in accordance with ASC 740, Accounting for Income Taxes, as clarified by ASC 740-10, and Accounting for Uncertainty in Income Taxes.  Under this method, deferred income taxes are determined based on the estimated future tax effects of differences between the financial statement and tax basis of assets and liabilities given the provisions of enacted tax laws. Deferred income tax provisions and benefits are based on changes to the assets or liabilities from year to year. In providing for deferred taxes, we consider tax regulations of the jurisdictions in which we operate, estimates of future taxable income, and available tax planning strategies. If tax regulations, operating results or the ability to implement tax-planning strategies vary, adjustments to the carrying value of deferred tax assets and liabilities may be required. Valuation allowances are recorded related to deferred tax assets based on the more likely than not criteria of ASC 740.


ASC 740-10 requires that we recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.


Loss per share


Basic loss per share calculations are determined by dividing the net loss by the weighted average number of common shares outstanding during the period.  Diluted loss per share calculations are determined by dividing the net loss by the weighted average number of common shares plus any potentially dilutive shares.  The Company has not issued any potentially dilutive securities since its inception.


Recent Accounting Pronouncements


The Company has reviewed the FASB issued Accounting Standards Update (ASU) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporations reported financial position or operations in the near term.  The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration.


NOTE 2: GOING CONCERN


The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern.  Going concern contemplates the realization of assets and the satisfaction of liabilities in the normal course of business over a reasonable period of time.  The Company had a loss of $497,446 for the six months ended June 30, 2015 and working capital deficit of $1,481,004 and accumulated deficit of $1,175,366 as of June 30, 2015.  The future of the Company is dependent on its ability to obtain funding from the sale of common stock pursuant to its S-1 registration statement, which was declared



10

 

effective by the SEC on August 10, 2012.  These conditions raise substantial doubt about the Companys ability to continue as a going concern. There have been no adjustments to the financial statements that may be necessary should the Company be unable to continue as a going concern.

Although the Company plans to pursue its equity funding, there can be no assurance that the Company will be able raise sufficient working capital to maintain its operations.  If the Company is unable to raise the necessary working capital through the equity funding it will be forced to continue relying on cash from operations and loans from stockholder in order to satisfy its working capital needs.  There can be no assurance that the Company will be able rely on these sources to maintain its operations.

NOTE 3: DUE TO STOCKHOLDER

The Company has received advances from an officers and stockholders for working capital purposes.  These advances are due on demand and accrue interest at an annual rate of 4%.  Interest expense totaled $10,229 for the six months ended June 30, 2015. At June 30, 2015 and December 31, 2014, the amount due to the stockholders was $1,346,217 and $654,344, respectively.

NOTE 4:  PROPERTY AND EQUIPMENT-NET



Estimated Useful Lives


 


(Years)

June 30, 2015

December 31,  2014

Furniture and Fixtures

5

$        30,997

$        28,832

Machinery and Equipment

Video Equipment

5

  5  

    18,353

 43,110

    18,353

43,110

Leasehold Improvements

5

       142,900

       32,860



$      235,360

$      123,155

Less accumulated depreciation


     (47,960)

     (20,460)



$      187,400

$      102,695

Depreciation expense amounted to $27,500 and $6,389 for the six months ended June 30, 2015 and 2014, respectively.


NOTE 5: INTANGIBLE ASSETS


During the six months ended June 30, 2015, the Company acquired the following intangible assets.  


In June 2015, the Company acquired the rights to a concept to form a new indoor rugby league for consideration of 3,000,000 shares of common stock.  The Company recorded the rights to the concept as an intangible asset based on the fair value of the common stock of $.040 per share, or $120,000.  The Company considers these rights to have an indefinite life. The Company also issued an additional 3,000,000 shares of common stock, for an aggregate of 6,000,000 shares, for consulting services related to the creation, financing, and operation of the rugby league.  See note 7.  


In April 2015, the Company acquired a 50% interest in the net profits (as defined in the agreement) of an agreement with a recording artist for cash consideration of $237,500, of which $125,000 was paid during the three months ended June 30, 2015.  The remaining balance of $112,500 is payable by November 1, 2015 and is reflected as Obligation for acquisition of intangible asset on the accompanying condensed consolidated balance sheet.  The recording contract provides for a license period of seven years following the release of each album, as defined in the agreement.  The agreement requires the release of one album and an additional three albums at



11

 

the option of the licensee.  The Company estimates the life of the agreement to be 10 years and is amortizing these rights over 10 years using the straight line method.  The Company recorded amortization of $6,000 for the three and six months ended June 30, 2015.


In May 2015, the Company acquired a 70% interest in two musical acts for consideration of 600,000 shares of common stock.  The Company recorded the rights to the musical acts as an intangible asset based on the fair value of the common stock of $.04 per share, or $24,000.  The Company considers these rights to have an indefinite life.


NOTE 6:  INCOME TAXES

As of June 30, 2015, the Company had approximately $1,200,000 of operating loss carry forwards available to offset future taxable income, beginning to expire in 2030.

NOTE 7: STOCKHOLDERS DEFICIENCY

On January 9, 2014 the Board of Directors approved issuing common stock as prepayment for legal services to Corporate counsel for $25,000 of services; stock valued at $.02 a share based on the value of services to be provided. The Company recorded the fair value of $25,000 as deferred compensation to be expensed as services are provided, of which $2,000 was applied to accounts payable that was due as of December 31, 2013. Total shares of 125,000 were issued. During the year ended December 31, 2014 the Company expensed $20,000 leaving a remaining balance of $3,000 that is reflected as deferred stock compensation on the accompanying condensed  consolidated balance sheet. During the six months ended June 30, 2015, the remaining $3,000 was recognized as stock compensation expense.


The Company acquired a 70% interest in two musical acts in exchange for 600,000 shares of Company stock, valued at $.04 per share for a total purchase price of $24,000, which is included in intangible assets as of June 30, 2015.


In June 2015, the Company acquired the rights to a concept to form a new indoor rugby league for consideration of 3,000,000 shares of common stock.  The Company recorded the rights to the concept as an intangible asset based on the fair value of the common stock of $.040 per share, or $120,000.  The Company also issued an additional 3,000,000 shares of common stock, for an aggregate of 6,000,000 shares, for consulting services related to the creation, financing, and operation of the rugby league.  Of the 3,000,000 shares issued for consulting services, 1,700,000 shares are not subject to any performance criteria, and 1,300,000 are subject to performance criteria, none of which have been met.  The recorded compensation expense of $68,000 for the three and six months ended June 30, 2015 and deferred stock compensation of $76,000 as of June 30, 2015.


 On May 6, 2015 The Company issued 10,000 shares of common stock with a fair value of $400 in settlement of stockholder advance totaling $2,000.  


On June 16, 2015 The Company issued 60,000 shares of common stock to three consultants for services rendered. The Company recorded the fair value of the shares, or $2,400 as consulting expense for the three and six months ended June 30, 2015.


The Company has entered into an agreement with a consultant for a term from June 2015 through December 2015. As part of the agreement the consultant will receive 20,000 shares of common stock, which are valued at $.04 per share, for a total value of $800. This will be recognized as consulting expense over the term of the agreement.



12

 

NOTE 8: COMMITMENTS AND CONTINGENCIES


Plaza Lease Agreement


As a result of the October 2013 acquisition, the Company assumed a three-year lease for its dance facility. The lease requires monthly payments of $5,500 commencing on November 1, 2012 increasing by 5% on each anniversary date through October 2015. On August 1, 2014 the lease was amended to include additional space for events and competition. The new rate was increased to $6,500 through the balance of the lease term, October 2015.

As of June 30, 2015, future minimum rental payments under the lease are as follows:

Year Ending December 31, 2015

$  94,500

Rent expense for the six months ended June 30, 2015 including operating expenses charged by the landlord, totaled $112,492.

Acquisition of Rights to Recording Artist

The Company is obligated to pay $112,500 by November 2015 pursuant to its acquisition of rights to a recording artist.

Employment Agreements

Effective January 1, 2009, the Company entered into employment agreements with both Mr. William Forhan and Mr. Sean Forhan.  The agreements are the same for both officers and are for a term of four years and shall automatically renew for one-year terms thereafter unless terminated by either party at least 90 days prior to the next term.  Under the agreements, each employee shall receive a base salary of $72,000 per year and an annual bonus of 10% of EBITDA, but no wages shall be accrued until such time the Company has adequate cash flow.  The Officers shall also receive a car allowance of $600 per month.  The employment agreements provide for health and life insurance and four weeks paid vacation.  Since inception, no amounts have been paid or accrued under the aforementioned employment agreements; however, the Company has agreed to begin paying these amounts, effective August 1, 2015.

Legal Matters

From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. As of August 26, 2015, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of our operations and there are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial stockholder, is an adverse party or has a material interest adverse to our interest.


NOTE 9: SUBSEQUENT EVENTS


On July 20, 2015 the Company agreed to issue 20,000 shares of common stock to a third party in exchange for reduction of $400 debt owed to its chief executive officer.  As of the date of this filing, these shares had yet to be issued.


In July 2015, the Company issued 40,000 shares of common stock to two Consultants for $16,000 in services rendered.




13

 

Item 2.       Management's Discussion and Analysis of Financial Condition and Results of Operations.


Forward-Looking Statements


This Report contains statements that we believe are, or may be considered to be, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this Report regarding the prospects of our industry or our prospects, plans, financial position or business strategy, may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking words such as may, will, expect, intend, estimate, foresee, project, anticipate, believe, plans, forecasts, continue or could or the negatives of these terms or variations of them or similar terms. Furthermore, such forward-looking statements may be included in various filings that we make with the SEC or press releases or oral statements made by or with the approval of one of our authorized executive officers. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot assure you that these expectations will prove to be correct. These forward-looking statements are subject to certain known and unknown risks and uncertainties, as well as assumptions that could cause actual results to differ materially from those reflected in these forward-looking statements. Readers are cautioned not to place undue reliance on any forward-looking statements contained herein, which reflect managements opinions only as of the date hereof. Except as required by law, we undertake no obligation to revise or publicly release the results of any revision to any forward-looking statements. You are advised, however, to consult any additional disclosures we make in our reports to the SEC. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained in this Report.


Unless stated otherwise, the words we, us, our, the Company, or Ballroom Dance Fitness, Inc. in this section collectively refer to BDF.


Overview

General: Ballroom Dance Fitness, Inc. was incorporated in the State of Florida on January 2, 2009. We filed a registration statement on Form S-1 with the Securities and Exchange Commission. The Securities and Exchange Commission declared our registration statement effective on August 10, 2012. We obtained a trading symbol and commenced trading on the OTC Markets QB of our shares of common stock on April 22, 2014.  


The Company initially competed in the weight loss and ballroom dance business and operates a dance study for lessons and competition in Palm Beach, Florida. Ballroom Dance Fitness, Inc. was organized January 2, 2009 under the laws of the State of Florida.  Today the Company is diversified and is an Entertainment Company with the following portfolio:

1.

Ballroom Dance Fitness  DVD

The Ballroom Dance Fitness (BDF) is a DVD designed for individuals that want to lose weight and also learn Ballroom Dance steps while exercising. The DVDs will be marketed via 26 minute TV infomercials, 1 and 2 minute TV ads, and Internet marketing. The DVD features six different ballroom dances: the Cha-Cha, Swing, Salsa, Merengue, Rumba and Waltz.   The program is to promote Fun Exercise to Ballroom Dance and fitness enthusiasts.


   2.

Certified Fitness Instructors: We intend to offer fitness trainers and ballroom dance instructors the opportunity to become certified as a Ballroom Dance Fitness instructor after completing a six hour training session with Sean Forhan, the Companys Founder.  The certified trainer will offer Ballroom Dance Fitness



14

 

classes in his/her city and keep all of the revenue.  It is intended that the instructors will pay a one-time fee of $250 to become certified.  There will be an annual renewal fee of $175 to keep the certification active.  


3.

Pro Arena Rugby: The Company has formed a wholly owned subsidiary which shall own and operate Pro Arena Rugby, Inc. (PAR). The Company concept is introducing Rugby 7s in the in-door arena format. Following the nationwide success of Arena Football, PAR is developing a professional Rugby league, looking to launch its inaugural season in the second quarter of 2016. Initially, the Company looks to start the Pro Arena Rugby League with sixteen professional teams, June 1, 2016, expanding to twenty by 2017. PAR will have 8 teams in  both the Eastern and Western Conferences, competing for a Conference  play-off of four teams. The Conference Champions will compete for the PAR Championship game between the East Conference and West Conference Champions on September 10, 2016.  PAR will own the merchandise license for all of the jersey, hats, shirts and imprinted specialties, including league teams and retail stores; all must be bought from PAR. PAR will host a Rugby Challenge in Las Vegas October 24 - 25, 2015 at the Orleans Hotel Casino to eight  rugby teams to compete in a 3 game competition with the winner earning $25,000 cash; all of the owners of pro teams from the NFL, MLB, NBA and NHL can see why they should invest in PAR.


4.

Kobra and the Lotus: The Company has entered into a Joint Venture with Titan Music & Entertainment, LLC. Titan owns and operates all revenue streams in reference to the global music artist Kobra and the Lotus along with a worldwide distribution agreement with EMI / Caroline / Universal record distribution. Kobra and the Lotus is a Canadian Artist originally signed to Gene Simmons (KISS), under a Canadian production agreement. Titan Music & Entertainment, LLC. acquired an exclusive rights contract, spanning a ten year recording and ancillary rights agreement, in June 2014 and then formed a Joint Venture partnership with the Company to exploit the artist worldwide. Currently, Kobra and the Lotus have a new CD and bonus EP in the marketplace and are scheduled to tour 90 plus shows in 2015 ( Canada, USA, and Europe). Kobra new record will be released in second quarter 2016.


5.

Great American Divas; The Company has entered into a licensing agreement with controlling interest in Great American Divas, a Broadway style show & musical journey into the world of the 70s era featuring many musical female giants of our time. The Company will produce and promote a series of Live Concert events featuring Great American Divas in 2015, with the ultimate goal of securing residency in casino showrooms nationwide in 2016. It is our intention to franchise the production and expand its presence globally. The Company through its licensing agreement has secured the recording, touring, and merchandising rights on an exclusive basis.

 

6.

The Plaza Ballroom:  The Company brags that it has the largest dance floor in Florida (40ft. x 60 ft.).

The Plaza operates a 13,000 sq. ft. and a 5,500 sq. ft. (adjacent), multi-purpose venue in North Palm Beach Florida. The Ballroom functions as a multi-use venue for live entertainment: a dance studio teaching ballroom  lessons, wedding receptions for 350 guests. musical concerts for 425, and  private parties for 350 guests; plus a second venue that serves up to 150 additional guests. The venue has 2 parking lots for 400 cars. The Company has a liquor license and caters to private parties. The Plaza also hosts ballroom Dance Competitions for Sanctioned Dance Competitions.




15

 

7.

Professional Ballroom Competitions: The Company has acquired a license for Sanctioned Dance Competitions sponsored by The National Dance Council of America for the county of Palm Beach, Florida. The license is for two events a year: hosted in September and January, yearly. The event will draw over one hundred professionals competing for trophies and money. The week- end competitions include dance couples made up of professional dancers and students. The event has three dance judges that determine and announce the winners at the Awards Dinner Dance. The Company earns money for producing and directing the week-end activities that includes dance competitions for 2 nights, registration fee and dance fees for each dance (heat) they enter.


8.

Delray Tennis Center: The Company has entered into a Joint Venture with Titan Music & Entertainment, LLC. The core business is management of the city owned facility as to all music events and act in the capacity of venue promoter for all music entertainment productions for 7,500 music fans. Currently, the inaugural concert / event is scheduled for November 14, 2015. The Company is scheduled to promote ten musical concert / events in 2016  ranging from 1,000-7,500 enthusiasts.


9.

Plaza National Musical Concerts The Plaza offers National Musical Concerts featuring the original bands from the 60s - 90s  Era, the music that many people grew up with; last week the Plaza hosted the band known as FireFall to a sold out performance, forth coming is Jefferson Airplane and Little River Band from Australia. The Plaza is a unique venue offering close seats for all 425 musical fans; paying $45-$90 a person.


Results of Operations:


The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes that appear elsewhere in this Quarterly 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 Quarterly Report. Our financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.


Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.

 

We will require additional capital to meet our long-term operating requirements. We expect to raise additional capital through, among other things, the sale of our products and through equity or debt securities.



Three Month Period Ended June 30, 2015 Compared to Three Month Period Ended June 30, 2014


Revenues

Revenues for the three months ended June 30, 2015 were $45,905 and revenues for the three months ended June 30, 2014 were $36,571. Revenues increased in 2015 primarily due to additional Plaza Event sales from dance lessons and fund raising events.



16

 

Operating Expenses

Operating expenses for the quarter ended June 30, 2015 were $256,082 as compared to $72,398 for the quarter ended June 30, 2014. The increase in expenses during 2015 is due to rent expense of $50,216 and $87,961 of professional fees for the quarter paid to the auditor and consultants.

Net Loss

Net loss for the quarter ended June 30, 2015 was $229,039 compared to a net loss of $50,764 for the quarter ended June 30, 2014. The net loss for 2015 is after increased expenses from professional fees, video production and fees related to the Plaza operations.


Six Month Period Ended June 30, 2015 Compared to Six Month Period Ended June 30, 2014


Revenues

Revenues for the six months ended June 30, 2015 were $120,520 and revenues for the three months ended June 30, 2014 were $76,693. Revenues increased in 2015 were primarily due to additional Plaza Event sales from dance lessons and fund raising events.

Operating Expenses

Operating expenses for the six months ended June 30, 2015 were $548,672 as compared to $147,092 for the quarter ended June 30, 2014. The increases in expenses during 2015 are due to increased rent expense of $112,492 and $187,711 of additional professional fees for the quarter and other fees to consultants.

Net Loss

Net loss for the six months ended June 30, 2015 was $497,446 compared to a net loss of $108,566 for the quarter ended June 30, 2014. The net loss for 2015 is after increased expenses from video production and professional fees to the Plaza operations.

Liquidity and Capital Resources

The Company used cash in operations of $382,218 for the six months ended June 30, 2015 as compared to $116,627 used in six months ended June 30, 2014. Increases in cash used is mainly a result of the net loss for the quarter offset by stock issued for services and depreciation during the year.

The Company used $308,395 if cash for investing activities. Increases were primarily due to the purchase of fixed assets of $112,205 and purchase of licenses for $125,000.

During the six months ended June 30, 2015 the Company was provided cash from financing activities of $693,873 as compared to $231,807 provided for the six months ended June 30, 2014. The increase was a result of additional advances from our CEO for the period.

Off Balance Sheet Operations


We do not have any off-balance sheet operations.




17

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk.


Not applicable.


Item 4. Controls and Procedures.


Evaluation of Disclosure Controls and Procedures

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed under the supervision of our Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external purposes in accordance with U.S. generally accepted accounting principles.


With respect to the period ending June 30, 2015, under the supervision and with the participation of our management, we conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934.  


Based upon our evaluation regarding the period ending June 30, 2015, the Companys management, including its Chief Executive Officer and Chief Financial Officer, has concluded that its disclosure controls and procedures were not effective.  The following material weaknesses were identified:


·

The Company does not have a full time CFO and is dependent on outside consultants for the day to day accounting and disclosure requirements, and;


·

The Company does not have an independent audit committee that can provide oversight of management activities.


The Companys disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives.  However, the Companys management, including its Chief Executive Officer, does not expect that its disclosure controls and procedures will prevent all error and all fraud.  A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.  Further, the design of a control system must reflect the fact that there are resource constraints, and the benefit 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, within the Company have been detected.


PART II

PART II - OTHER INFORMATION


Item 1.  Legal Proceedings.


Not applicable.


Item 1A. Risk Factors.


Not applicable.




18

 

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.


On May 29, 2015 the Company issued 600,000 non-registered shares for the purchase of a 70% in two musical acts.

On June 1, 2015 the Company issued 3,000,000 unregistered shares to a consultant, pursuant to its acquisition of rights to a concept for an indoor rugby league.

During May and June 2015, the Company issued at total of 60,000 unregistered shares for consulting services to four different individuals.

Item 3.   Defaults upon Senior Securities.


Not applicable.

 

Item 4.  Mine Safety Disclosures


Not applicable.


Item 5.  Other Information.


Not applicable.


Item 6.   Exhibits.



Exhibit No.:

Description:

31.1

Certification by William G. Forhan, Principal Executive Officer  of Ballroom Dance Fitness Inc., pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended

32.1

Certification by William G. Forhan, Principal Executive Officer of Ballroom Dance Fitness  Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002





19

 

SIGNATURES


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







 

Ballroom Dance Fitness  Inc.

 

 

 

 

Date:  August 26, 2015

By: 

/s/ William G. Forhan

 

 

 

William G. Forhan, CEO, and Chairman

(Principal Executive Officer)

 





20