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EX-31 - RULE 13A-14(A) CERTIFICATION - LD HOLDINGS, INC.exh31.htm
EX-32 - RULE 13A-14(B) CERTIFICATION - LD HOLDINGS, INC.exh32.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
  Washington, D.C. 20549
 
FORM 10-K
 
[X] Annual Report under Section 13 or 15(d) of the Securities Exchange Act of 1934
 
For the fiscal year ended December 31, 2015

Commission file number 0-50584
 
LD Holdings Inc
(Formerly Leisure Direct, Inc.)
(Name of Small Business Issuer in Its Charter)
 
 
Nevada
98-0335555
(State or Other Jurisdiction of Incorporation or Organization)
(I.R.S. Employer Identification No.)
 
1070 Commerce Drive, Building II, Suite 303, Perrysburg, OH 43551
(Address of Principal Executive Offices) (Zip Code)
 
(419) 873-1111
(Issuer's Telephone Number, Including Area Code)
 
Securities registered under Section 12(b) of the Exchange Act: None.
 
Securities registered under Section 12(g) of the Act:
 
Common Stock, $.001 par value
(Title of Class)
 
Check whether the issuer is not required to file reports pursuant to Section 13
or 15(d) of the Exchange Act. [ ]
 
Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 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       No   ¨
 
Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-K contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. |X|
 
Indicate by checkmark whether the registrant is a ____ large accelerated filer, ____an accelerated filer, ____a non accelerated filer, or     X     a smaller reporting company in Rule 12b-2 of the Exchange Act.
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes____ No   X  
 
State the aggregate market value of the voting and non-voting common equity held by non-affiliates, computed by reference to the price at which the common equity was sold, or the average bid and ask prices of such common equity, as of a specified date within the past 60 days.
 
The aggregate market value of our common shares held by non-affiliates of the registrant on June 30, 2015 was approximately $6,010,811.
 
As of April 14, 2016, 25,280,351 shares of Common Stock issued and outstanding, and 974,156 Preferred Stock issued and  outstanding.
 
Transitional Small Business Disclosure Format (check one): Yes [  ] No [X]   
 

 PART I
 
Item 1. Description of Business
 
Forward-Looking Statements
 
This document contains forward-looking statements, including statements regarding the Company's strategy, plans for growth and anticipated sources of capital and revenue.  The Company's actual results may differ dramatically from those anticipated in these forward-looking statements.  The differences may result from one or more of the risk factors described below or from events that we have not foreseen.
 
Risk Factors

LD Holdings has very limited financial resources.  In order to implement our business plan, we will have to raise capital.  If we are unsuccessful in raising capital, our business will not grow.

Because of our limited operating history, LD Holdings has little historical financial data on which to base our plans for future operations.  Management will have to budget capital investment and expenses based, in large part, on our expectation of future revenues.  If those expectations are not met, LD Holdings Inc. may exhaust its capital resources before it achieves operational stability.

Corporate Strategy

LD Holdings, Inc., (symbol LDHL), has developed a business model that seeks to capitalize on the massive transfer of generational assets as the "Baby-Boomer" generation transitions from the ownership of small businesses into retirement.  The Baby-Boomer generation is represented by almost 78 million individuals born between 1946 and 1964.  Over the next 20 years as these Baby-Boomers are retiring, there are going to be businesses worth trillions of dollars that need to be sold by this Boomer generation.

Historically, the sellers typically wanted to provide minimal or no financing to the buyer.  These types of transactions were too large for most individuals to finance, too risky for banks based upon the company's individual merits (as opposed to the buyer's personal balance sheet) and too small to interest most institutional investors (hedge funds and private equity groups) to consider.  The lack of liquidity makes it difficult to raise funds privately from anyone but friends and relatives.

The company seeks to take a seemingly negative funding situation and turn it into a positive one.  Many of these Baby Boomer businesses being sold, whether the sellers want to or not, will be forced to provide a major portion, or all, of the financing in order to sell their businesses or will be forced to sell them below their true market value in order to get the business sold.

The company plans to focus its efforts on becoming a "known buyer" of small companies that meet its acquisition criteria, which it intends to widely distribute to business sellers directly and to others on its websites.  The 5-Year Plan is to accumulate at least 45 of these small companies and to slowly meld them into cohesive business units.  Using $8.33 million of revenues as an average in years 1 through 3, and $10 million of revenues as an average in years 4 and 5, would result in consolidated total revenues of $420 Million by the end of year 5.

The company's objective, through aggressive use of the Internet, is to put an outside investor base in place that shares the company's vision and objectives while the search for acquisitions is being conducted.  The company will stress on its affiliated websites and in its investor information that it is looking for long-term investors who are willing to hold their positions for a year or more.
  
The company plans to acquire at least 3 companies with $25 million sales and EBIT of $2.5 million.   At 15 x EBIT, this would place a market capitalization of $37 million on the company.  In order to accomplish its objectives, and as explained in the next section, the company has developed a 4-Step Process in which to accomplish its plans.
 
The company is establishing an Area Sales Director Business Model in a three state area (Ohio, Michigan and Indiana) initially.  If this three state model proves successful, a national rollout would follow.

1

Current Business Operations

LD Holdings, Inc., (Symbol LDHL), is a Financial and Management Holding Company that has identified a significant business opportunity that will fill a void in the small business world.  That void is the sale and transfer of businesses from one generation (the Baby Boomer) to the next.

With over 25 million small businesses in the USA and 15 trillion dollars of businesses to be sold over the next 15-20 years, there will be many opportunities for wealth generation.  The following services will be needed:
 
 
1*
There will be a need for Marketing, Sales and other Business Services to prepare the businesses for sale.
 
 
 
 
2*
There will be a need for buyers for these businesses.
 
 
 
 
3*
There will be a need for entrepreneur managers to manage these businesses.
 
 
 
 
4*
There will be a need for the financing of these businesses.
 
LD Holdings, Inc., as a Financial and Management Holding Company, will take advantage of this opportunity and manage the portfolio companies in which LD Holdings, Inc. will have varying percentages of ownership.

LD Holdings, Inc. will concentrate on businesses with sales between $2 million and $20 million and EBIT between $500,000 and $3 million.  This is where the real void exists.   Owners of these businesses have a difficult time getting full value because the financing of these companies is too large for most individuals to finance, too risky for banks based upon the company's individual merits (as opposed to the buyer's personal balance sheet) and too small to interest most institutional investors (hedge funds and private equity groups) to consider.  A lack of liquidity makes it difficult to raise funds privately from anyone but friends and relatives.

LD Holdings, Inc. will provide the following services:

1* The Marketing, Sales and Other Business Services represent specifically target services to position client companies for both sales and profit growth in preparation for their eventual sale.  The lead service involves the client company outsourcing some portion of the sales function to us as an Independent Sales Organization (ISO).  This enhances the value of the company because it is no longer dependent upon the selling management's relationship with the company's customers.  We provide this service under a variety of formats and compensation arrangements.  Typically, these are long-term joint-venture marketing efforts that result in recurring revenue streams to the company.  The auxiliary consulting services provided include helping the client company to finance its growth and to prepare it for sale under the most advantageous terms possible to the client.  In many cases, we will participate in the incremental value created.

2* LD Holdings, Inc. maintains an ongoing data base of businesses for sale.  This allows the company to look for synergistic opportunities to combine one or more acquisition candidates at some future date.  This database also provides the company with a historical perspective of different industries and distribution channels along with any type of geographical variation in the valuation of businesses.

3* LD Holdings, Inc. maintains a database of individuals with specific backgrounds and expertise that will be available for both acquisition evaluation, and strategizing the post-acquisition business model for each potential acquisition candidate, once the financial aspects of the transaction are determined.  Particular attention will be given to developing relationships with those entrepreneurs and managers that want to perform in a results-driven environment, which has the associated incentives in place to create personal wealth for them and an above average return for the company's stockholders.  What distinguishes these individuals is that they are self-motivated, looking for a rewarding opportunity and are willing to put in whatever time is needed.

4* LD Holdings, Inc. maintains an ongoing data base of investors that share the company's vision and objectives.  The company is looking for long-term investors who are willing to hold their positions for a year or more for superior rates of return.  Investors that want to participate in ground floor investment opportunities that the company's Business Model represents have a special wealth building vehicle available to them.  The company's stock is thinly traded with a relatively small float.  This will allow the company to look for synergistic opportunities to combine one or more acquisition candidates.

Boomer's Diner, Inc., a Michigan corporation and wholly owned subsidiary of LD Holdings, Inc. (LDHL), opened for business in Monroe, Michigan in October 2010.  On August 28, 2011, the company closed its Monroe, Michigan diner, and on October 17, 2011, the company opened a Boomers Diner in Toledo, Ohio.  In January 2014, the Company closed its Toledo, Ohio diner.

This subsidiary's business plan complements the business plan of LDHL, which is to help facilitate the transfer of "Baby Boomer" businesses in the $2-$20 million annual sales range to younger generations.  Collaboration of business resources, lead generation and other business services will expand and leverage the footprint of LDHL.
2

Personnel
 
LD Holding's principal, John R. Ayling, Chairman, Chief Executive Officer and Chief Accounting Officer, spent a material amount of time working on behalf of the Company during the year.  The company expects to hire from time to time, independent consultants and contractors during the stages of implementing our business plan.  As the Company grows, it will develop a group of full time employees that will be supplemented with temporary labor.

Item 2. Description of Property
 
The Company's executive offices and corporate offices are currently located at 1070 Commerce Drive, Building II, Suite 303, Perrysburg, Ohio 43551.  The Company shares a portion of an office complex located at this address with Capital First Corporation, a shareholder of the Company.  The Company currently pays rent of $2,500 under a sublease agreement with Capital First for this location.  Effective January 1, 2015 the lease payment of $2,500 is on a month to month basis.
 
Item 3. Legal Proceedings
 
A judgement creditor has obtained an order to issue corporation unissued shares.  There are no unissued shares to issue at year end.  The Company believes it is contrary to law and will be reversed on appeal.  The Company has accrued an amount of $200,000 in prior years toward this obligation and does not believe it will incur further exposure beyond this. 
 
Item 4. Submission of Matters to a Vote of Security Holders
 
None.
 
3

 
PART II
 
Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters, and Small Business Issuer Purchases of Equity Securities
 
(a) Market Information
 
The Company's common stock has been quoted on the OTC Bulletin Board under the symbol "LDHL" since November, 2008. Prior to that date, the Company's common stock was quoted on the OTC Bulletin Board under the symbol "LDTI". Set forth below are the high and low bid prices for the fiscal quarters in 2015. The reported bid quotations reflect inter-dealer prices without retail markup, markdown or commissions, and may not necessarily represent actual transactions.

Quarter Ended
 
High Bid
   
Low Bid
 
December 31, 2015
 
$
.23
   
$
.15
 
September 30, 2015
 
$
.26
   
$
.16
 
June 30, 2015
 
$
.28
   
$
.20
 
March 31, 2015
 
$
.30
   
$
.21
 
 
(b) Shareholders
 
On April 14, 2016, there were 167 holders of record of the Company's common stock.
 
(c) Dividends

The Company has not paid cash dividends since inception.  The Company intends to retain all of its earnings, if any, for use in its business and does not anticipate paying any cash dividends in the foreseeable future.  The payment of any future dividends will be at the discretion of the board of directors and will depend upon a number of factors, including future earnings, the success of the company's business activities, capital requirements, the general financial condition and future prospects of the company, general business conditions and such other factors as the board of directors may deem relevant.
 
(d) Recent Sales of Unregistered Securities
 
The Company did not sell any securities during 2015 that were not registered under the Securities Act.
 
(e) Repurchase of Equity Securities
 
The Company did not repurchase any of its equity securities that were registered under Section 12 of the Securities Act during 2015.
 
Item 6 . Selected Financial Data

Except for historical information, the Company's reports to the Securities and Exchange Commission on Form 10-K and 10-Q and periodic press releases, as well as other public documents and statements, contain "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934.  Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by the statements.  These risks and uncertainties include general economic and business conditions, development and market acceptance of the Company's products, current dependence on the willingness of investors to continue to fund operations of the Company and other risks and uncertainties identified in the Company's reports to the Securities and Exchange Commission, periodic press releases, or other public documents or statements.
4

Readers are cautioned not to place undue reliance on forward-looking statements.  The Company undertakes no obligation to republish or revise forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrences of unanticipated events.
 
The selected financial information presented below under the captions "Statement of Operations" and "Balance Sheet" for the years ended December 31, 2015 and 2014 is derived from the financial statements of the Company and should be read in conjunction with the financial statements and notes thereto.
 
The financial data are those of LD Holdings, Inc. and its wholly owned subsidiaries.  All intercompany accounts and transactions have been eliminated in consolidation.  

BALANCE SHEET

 
 
2015
   
2014
 
Total assets
 
$
25,281
   
$
20,776
 
Current Liabilities
   
(5,259,059
)
   
(5,108,947
)
Long-term debt
   
(238,802
)
   
-
 
Working capital (deficiency)
   
(5,233,778
)
   
(5,088,171
)
Shareholders' equity (deficit)
   
(5,472,580
)
   
(5,088,171
)
 
STATEMENT OF OPERATIONS

 
For the years ended
 
 
December 31,
 
 
2015
 
2014
 
Total revenues
 
$
60,000
   
$
60,000
 
Net (loss)
   
(622,166
)
   
(419,741
)
Net loss per common share
   
(.02
)
   
(.02
)
Number of shares used in Computing per share data
   
25,223,527
     
24,385,351
 
 
 
5

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
 
Results of Operations
 
For the years ended December 31, 2015 and 2014 LD Holdings had revenues of $60,000 and $60,000, respectfully. The 2015 and 2014 revenues are for consulting services from a related party. LD Holdings had a working capital shortage throughout 2015 and did not emphasize current operations.  Management has elected to devote all of its time seeking financing partners to further implement its Business Plan.
 
LD Holdings gross margin was $40,800 and $36,000 in 2015 and 2014, respectively.  Consulting costs of $19,200 and $24,000 related to the affiliate revenue above were incurred in 2015 and 2014, respectively.

During 2015 LD Holdings incurred general and administrative expenses of $576,909 compared to $360,504 in 2014.  The increase is primarily due to an increase in consulting from $155,577 in 2014 to $348,181 in 2015, or $192,604.  The increase is due to the due diligence in the potential acquisition of a new business.
 
The Company's net loss for 2015 was $622,166 compared to $419,741 in 2014.  The majority of the 2015 net loss stems from management fees, consulting fees, accounting and auditing fees and interest expense.  Funding of the company came from loans from LD Holdings' principal shareholder and the issuance of private placement notes payable.
 
The Company had a loss for tax purposes in 2015 and 2014.  The Company did not recognize a deferred tax asset for tax loss carry forwards as the Company cannot determine when, if ever, it will be able to use the tax loss carry forwards.
 
Liquidity and Capital Resources
 
The Company had cash of $9,738 as of December 31, 2015.  
 
LD Holdings had a working capital deficit of $5,233,778 at December 31, 2015.  The working capital requirements of LD Holdings have been funded primarily with loans from shareholders and through the issuance of notes payable.

6

 
Application of Critical Accounting Policies
 
In preparing our financial statements we are required to formulate working policies regarding valuation of our assets and liabilities and to develop estimates of those values.  In our preparation of the financial statements for 2015, there was one estimate made which was (a) subject to a high degree of uncertainty and (b) material to our results.  This estimate was our determination, detailed in the Footnotes to the Financial Statements on Income Taxes, that we should record a valuation allowance for the full value of the deferred tax asset created by our net operating loss carry forward.  The primary reason for the determination was our lack of certainty as to whether LDHL will carry on profitable operations in the future.  Revenue for consulting services is recognized at the time the service has been rendered.

We made no material changes to our critical accounting policies in connection with the preparation of financial statements for 2015.
 
Impact of Accounting Pronouncements
 
There were no recent accounting pronouncements that have had or are likely to have a material effect on the Company's financial position or results of operations.
 
Off-Balance Sheet Arrangements
 
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition or results of operations.
 
Item 8. Financial Statements and Supplementary Data
 
The financial statements of the Company, together with notes and the Report of Independent Certified Public Accountants, are set forth immediately following Item 14 of this Form 10-K.
 
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
 
There have been no changes or disagreements with our Independent Registered Public Accounting Firm during the year.  

Item 9A. Controls and Procedures
 
Evaluation of Disclosure Controls and Procedures

The period covered by this Annual Report, is under the supervision of John R. Ayling, the Chairman/Chief Executive Officer/Chief Accounting Officer.  Based on the performance of the evaluation of the Company's internal controls, Mr. Ayling concluded that the Company's disclosure controls and procedures are not effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.
7

Management's Report on Internal Control Over Financial Reporting

The Company's management is responsible for establishing and maintaining effective internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. The Company's internal control over financial reporting is designed to provide reasonable assurance to the Company's management and Board of Directors regarding the preparation and fair presentation of published financial statements in accordance with United States' generally accepted accounting principles ("GAAP"), including those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and that receipts and expenditures are being made only in accordance with authorizations of the Company's management and directors and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the financial statements.

Management conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.  Management's assessment included an evaluation of the design of the Company's internal control over financial reporting and testing of the operational effectiveness of our internal control over financial reporting.  Based on this evaluation, management has determined that as of December 31, 2015, there were material weaknesses in our internal control over financial reporting.  The material weakness identified during management's assessment were (i) a lack of sufficient internal accounting expertise to provide reasonable assurance that our financial statements and notes thereto are prepared in accordance with GAAP and (ii) lack of segregation of duties to ensure adequate review of financial statement preparation.  In light of these material weaknesses, management has concluded that, as of December 31, 2015, the Company did not maintain effective internal control over financial reporting.  As defined by the Public Company Accounting Oversight Board Auditing Standard No. 5, a material weakness is a deficiency or a combination of deficiencies, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected.  In order to ensure the effectiveness of the Company's disclosure controls in the future the Company intends on adding financial staff resources to our accounting and finance department.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

This Annual Report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting.  Managements' report was not subject to attestation by the Company's registered public accounting firm pursuant to rules of the SEC that permit the Company to provide only management's report in this Annual Report.

Changes in Internal Control over Financial Reporting

There have been no significant changes in the Company's internal control over financial reporting during the most recently completed fiscal quarter ended December 31, 2015 that have materially affected, or is reasonable likely to materially affect, the Company's internal control over financial reporting.
8

PART III
 
Item 10. Directors and Executive Officers of the Registrant
 
The persons listed below are the current directors and officers of the Company:

 
 
 
 
 
 
Director
Name
 
Age
 
Position
 
Since
John R. Ayling
 
  72
 
CEO/CAO and Director Chairman of the Board
 
2003
 
John R. Ayling -CEO and Chairman of the Board/Chief Accounting Officer. John R. Ayling, 72, has been CEO of the Company since October of 2003.  Since 1989 to present, he has served as President of Capital First Management, Inc., a Perrysburg, Ohio money management firm.  From 1983 to 1988, he served as a Vice President at Otherwise Securities.  From 1969 to 1982, he managed accounts for individuals and institutions with Bell & Beckwith, a Toledo, Ohio financial investment broker.  From 1966 to 1968, he served as a Captain with the U.S. Army, and served in Vietnam as a company commander with the 23rd Infantry, American Division.  Mr. Ayling has helped launch several start-up operations and financed several business enterprises and provided management support and development for all phases of management, with an emphasis on business integration and financial controls.

AUDIT COMMITTEE
 
The Board of Directors has not appointed an Audit Committee of the Board.  The Board of Directors has determined that John R. Ayling is qualified to serve as an "audit committee financial expert", as defined in the Regulations of the Securities and Exchange Commission, by reason of his work and educational experience.  Mr. Ayling is not an "independent director", as defined in the Regulations of the Securities and Exchange Commission.
 
CODE OF ETHICS
 
The Company has not adopted a written code of ethics applicable to executive officers.  The Board of Directors has determined that a code of ethics is not needed at this time until its management staff is grown.
 
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
 
None of the directors, officers, or beneficial owners of more than 10% of our common stock failed to file on a timely basis reports required during 2015 by Section 16(a) of the Exchange Act.
 
Item 11. Executive Compensation
 
In both 2015 and 2014, no officer or director received any cash compensation from the Company.
 
This table itemizes the compensation earned by John Ayling, who served as Chief Executive Officer/Chief Accounting Officer during 2015 and 2014.  Mr. Ayling's compensation was not paid but booked as an expense for these years and also as a payable.  Mr. Ayling has the option to take all or part of his compensation in stock at $0.28 (2015) and $0.48 (2014) per share, the share price at the commitment date. There was no other officer whose salary and bonus for services rendered during the year ended December 31, 2015 exceeded $100,000.

Compensation
 
 
 Year
Mgmt Fee
 
Stock Grant
 
 
 
 
 
John Ayling
2015
 
$
120,000
     
0
 
John Ayling
2014
 
$
120,000
     
0
 
 
9

The following tables set forth certain information regarding the stock options acquired by the Company's Chief Executive Officer during the years ended December 31, 2015 and 2014.
 
Option Grants in the Last Fiscal Year

       Potential realizable  
    
Percent
of total
 
value at
assumed
 
 
Number of
options
 
annual rates of
 
 
Securities
granted to
Exercise
appreciation of
 
 
Underlying
employees
Price
Expiration for
 
 
Option
in fiscal
($/share) 
option term
 
Name
Granted
year
Date
   
5
 
%
   
10
%
John Ayling
    0
   N/A
      N/A
   
N/A
 
 
   
N/A
 
  
Aggregated Fiscal Year-End Option Values

 
Number of
securities
underlying
 
Value of
unexercised
in-the-money
 
 
unexercised
options at fiscal
 
options at
fiscal
 
Name
year-end (#)
(All exercisable)
 
year-end ($)
(All exercisable)
 
John Ayling
   
0
     
0
 
 
Item 12. Security Ownership of Certain Beneficial Owners and Management
 
The following table shows the beneficial shareholdings of the Company's officers and directors and the holders of 5% or more of the Company's outstanding voting securities as of December 31, 2015.
 
 
Name and Address
of Beneficial Owner (1)
     
Common
(2) 
     
Percentage
of Common 
     
Preferred
     
Percentage
of
Preferred 
 
John R. Ayling
     
2,747,847
(3)     
15.5
%
   
974,156
     
100
%
 
                                 
All Officers and Directors As a Group
     
2,747,847
(3)    
15.5
%
   
974,156
     
100
%
 
(1) The address of Mr. Ayling is c/o LD Holdings, Inc., 1070 Commerce Drive, Building II, Suite 303, Perrysburg, OH 43551
 
(2) All shares are owned of record unless otherwise indicated.
 
(3) The shares beneficially owned by Mr. Ayling include 974,156 preferred shares owned by Capital First Corporation, LLC, and 1,133,437 common shares owned by Olympic Pools, Inc., and 1,028,410 common shares owned by DABE, Inc. all of which are owned and managed by Mr. Ayling.  
 
10

 
Item 13. Certain Relationships and Related Transactions
 
Olympic Pools, Inc. (OPI) is a shareholder of the Company. OPI is wholly owned by John Ayling, President and Chairman of the Company. The Company is indebted to OPI for loans made to the Company.
 
During 2015 and 2014, the Company had demand notes outstanding to DABE, Inc., with interest accruing at a rate of 10% per annum, computed on a 360-day basis.  Any and all of these notes are guaranteed by a security interest in all present and hereafter acquired inventory, receivables, equipment, general intangibles, chattel paper, documents and contract rights of the Company as collateral.  Mr. Ayling is the sole shareholder of DABE, Inc.  
 
Item 14 Principal Accountant Fees and Services
 
Audit Fees
 
Rosenberg Rich Baker Berman & Co. billed $27,000 and $27,000 to the Company for professional services rendered for the audit of our 2015 and 2014, respectively, financial statements and review of the financial statements included in our 10-Q filings for the first three quarters of 2015 and 2014.

Audit-Related Fees
 
Rosenberg Rich Baker Berman & Co. billed $0 to the Company in 2015 and 2014 for assurance and related services that are reasonably related to the performance of the 2015 audit or review of the quarterly financial statements.
 
Tax Fees
 
Rosenberg Rich Baker Berman & Co. billed $0 to the Company in 2015 and 2014 for professional services rendered for tax compliance, tax advice and tax planning.
 
All Other Fees
 
Rosenberg Rich Baker Berman & Co. billed $0 to the Company in 2015 and 2014 for services not described above.

It is the policy of the Company's Board of Directors that all services other than audit, review or attest services, must be pre-approved by the Board of Directors.  All of the services described above were approved by the Board of Directors.
11

 
PART IV
 
Item 15. Exhibit List and Reports
 
(a) Financial Statements
 
(b) Exhibits
 
 
 
 
 
Incorporated By
 
 
 
 
Exhibit
 
 
 
Reference from
 
 
No. in
 
Number
 
Description
 
Document
 
 
Document
 
 
3.1
 
Certificate of Incorporation
 
 
A
 
 
 
3.1
 
 
3.2
 
Bylaws
 
 
A
 
 
 
3.2
 
 
4.1
 
Form of Common Stock Certificate
 
 
A
 
 
 
4.1
 
 
31
 
Rule 13a-14(a) Certification
 
 
 
 
 
 
 
 
 
32
 
Rule 13a-14(b) Certification
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
101 INS
 
XBRL Instance Document*
 
 
 
 
 
 
 
 
 
101 SCH
 
XBRL Schema Document*
 
 
 
 
 
 
 
 
 
101 CAL
 
XBRL Calculation Linkbase Document*
 
 
 
 
 
 
 
 
 
101 LAB
 
XBRL Labels Linkbase Document*
 
 
 
 
 
 
 
 
 
101 PRE
 
XBRL Presentation Linkbase Document*
 
 
 
 
 
 
 
 
 
101 DEF
 
XBRL Definition Linkbase Document*
 
 
 
 
 
 
 
 
 
 The XBRL related information in Exhibit 101 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.
 
A. Registrant's Registration Statement on Form SB-2 (Registration Statement No. 333-53186).
 
(c) Reports on Form 8-K. None.
 
Date:  April 14, 2016
/s/  John R. Ayling
 
John R. Ayling, Chief
 
Executive Officer/Chief Accounting Officer
 
12

SIGNATURES
 
In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
LD HOLDINGS, INC.
 (Registrant)
 
Dated:  April 14, 2016
 
 
By:    /S/ John R. Ayling
 
Name:  John R. Ayling
 
Title: Chairman and CEO/Chief Accounting Officer
 
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
 
Name
 
Title
Date
/S/ John R. Ayling
Chairman & CEO, Director/Chief Accounting Officer
April 14, 2016
 John R. Ayling
 
 
 
13

 
 
Report of Independent Registered Public Accounting Firm
 
Consolidated Balance Sheets
 
Consolidated Statements of Operations
 
Consolidated Statements of Changes in Stockholders' Impairment
 
Consolidated Statements of Cash Flows
 
Notes to the Consolidated Financial Statements
 
 
14

 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 

 
To the Board of Directors and Stockholders of LD Holdings, Inc.
 
We have audited the accompanying consolidated balance sheets of LD Holdings, Inc. as of December 31, 2015 and 2014 and the related consolidated statements of operations, changes in stockholder's impairment and cash flows for each of the two years in the two-year period ended December 31, 2015.  These consolidated financial statements are the responsibility of the Company's Management.  Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
 
We conducted our audits in accordance with auditing standards established by the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.  Accordingly, we express no such opinion.   An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.
 
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of LD Holdings, Inc. as of December 31, 2015 and 2014 and the results of its operations, changes in shareholder's impairment and cash flows for each of the two years in the two-year period ended December 31, 2015 in conformity with accounting principles generally accepted in the United States of America.
 
The accompanying consolidated financial statements have been prepared assuming that LD Holdings, Inc. will continue as a going concern.  As more fully described in the notes to the consolidated financial statements, the Company has suffered recurring losses from operations and has a working capital deficiency as of December 31, 2015.  These conditions raise substantial doubt about its ability to continue as a going concern.  Management's plans in regard to these matters are also described in the notes.  These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
/s/ Rosenberg Rich Baker Berman & Company
 
Somerset, New Jersey
April 14, 2016
15

 
LD Holdings, Inc.
 
Consolidated Balance Sheets
 
 
 
   
 
 
 
December 31,
   
December 31,
 
 
 
2015
   
2014
 
Assets
 
   
 
 
 
   
 
Current Assets
 
   
 
  Cash
 
$
9,738
   
$
151
 
  Prepaid expenses
   
15,543
     
20,625
 
 
               
    Total Current Assets
   
25,281
     
20,776
 
 
               
Total Assets
 
$
25,281
   
$
20,776
 
 
               
  Liabilities and Stockholder's Impairment
               
 
               
Current Liabilities
               
 Accounts payable and accrued expenses
 
$
2,153,675
   
$
2,104,842
 
  Accrued interest payable
   
165,734
     
152,800
 
  Accrued interest payable - related parties
   
685,677
     
618,865
 
  Promissory notes payable
   
147,897
     
147,897
 
  Promissory notes payable - related parties
   
2,106,076
     
2,084,543
 
 
               
Total Current Liabilities
   
5,259,059
     
5,108,947
 
                 
Convertible promissory notes, net of unamortized discount
   
238,802
     
-
 
                 
Total Liabilities
   
5,497,861
     
5,108,947
 
 
               
Stockholders' Impairment
               
Preferred stock, par value $0.001; 974,156 shares authorized, issued and outstanding as of December 31, 2015 and 10,000,000 shares authorized and 974,156 shares issued and outstanding as of December 31, 2014
   
9,742
     
9,742
 
Common stock, par value $0.001; 25,280,351 authorized, issued and outstanding as of December 31, 2015 and 900,000,000 shares authorized and 24,460,351 shares issued and outstanding as of December 31, 2014
   
25,280
     
24,460
 
Additional paid in capital
   
4,661,570
     
4,424,633
 
Accumulated deficit
   
(10,169,172
)
   
(9,547,006
)
 
               
Total Stockholders' Impairment
   
(5,472,580
)
   
(5,088,171
)
 
               
Total Liabilities and Stockholders' Impairment
 
$
25,281
   
$
20,776
 
 
The attached notes are an integral part of these consolidated financial statements.
16

 
LD Holdings, Inc.
 
Consolidated Statements of Operations
 
 
 
 
Year ended
 
 
 
December 31,
 
 
 
2015
   
2014
 
 
 
   
 
Sales - related party
 
$
60,000
   
$
60,000
 
 
               
Cost of Sales
   
19,200
     
24,000
 
 
               
  Gross Profit
   
40,800
     
36,000
 
 
               
Selling, General & Administrative Expenses
   
576,909
     
360,504
 
Operating Loss
   
(536,109
)
   
(324,504
)
 
               
Other Income (Expense)
               
  Interest expense
   
(86,057
)
   
(70,073
)
  Total Other Income (Expense)
   
(86,057
)
   
(70,073
)
 
               
Loss from continuing operations
   
(622,166
)
   
(394,577
)
Loss from discontinued operations
   
( -
)
   
(25,164
)
 
               
  Net Loss
 
$
(622,166
)
 
$
(419,741
)
 
               
Loss from continuing operations
 
$
(0.02
)
 
$
(0.02
)
Loss from discontinued operations
 
$
-
   
$
-
 
Loss per share, basic and diluted
 
$
(0.02
)
 
$
(0.02
)
 
               
Weighted Average Common Shares Outstanding, basic and diluted
   
25,223,527
     
24,385,351
 
 
The attached notes are an integral part of these consolidated financial statements.
 
17

 
LD Holdings, Inc.
 
Consolidated Statements of Cash Flows
 
 
 
 
 
 
Year ended December 31,
 
 
 
2015
   
2014
 
Cash Flows From Operating Activities:
 
   
 
Net Loss
 
$
(622,166
)
 
$
(419,741
)
Adjustments to Reconcile Net Loss to Net Cash Used by Operating Activities
               
 Operating Activities:
               
  Depreciation
   
-
     
2,628
 
  Stock based compensation
   
229,540
     
50,000
 
  Loss from Fixed Asset Disposal
   
-
     
11,612
 
  Amortization of debt discount-beneficial conversion feature
   
2,019
     
-
 
                 
Changes in Operating Assets and Liabilities
               
  Prepaid expense
   
5,082
     
1,875
 
  Inventory
   
-
     
5,080
 
  Accounts payable and accrued expenses
   
46,814
     
253,346
 
  Accrued interest payable
   
12,934
     
3,421
 
  Accrued interest payable - related parties
   
66,812
     
66,889
 
    Net Cash (Used) by Operating Activities
   
(256,946
)
   
(24,890
)
                 
Cash Flows From Financing Activities
               
  Advances from related party
   
21,533
     
25,041
 
  Proceeds from Notes Payable
   
245,000
     
-
 
 
               
    Net Cash Provided by Financing Activities
   
266,533
     
25,041
 
 
               
Net Increase in Cash and Equivalents
   
9,587
     
151
 
 
               
Cash and Equivalents at Beginning of Year
   
151
     
-
 
Cash and Equivalents at End of Year
 
$
9,738
   
$
151
 
 
               
Supplemental Disclosure of Cash Flow Information:
               
Cash paid during the year for:
               
     Interest
 
$
4,672
   
$
-
 
     Income taxes
 
$
-
   
$
-
 
 
               
Non Cash Financing and Investing Activities
               
 
               
Settlement of Lease Obligation by Abandonment of Property
 
$
-
   
$
8,100
 
Issuance of common stock for future services
 
$
-
   
$
22,500
 
Recognition of debt discount from beneficial conversion features   $ 8,217     $ -  
                       
The attached notes are an integral part of these consolidated financial statements.
18

 
LD Holdings, Inc.
 
Consolidated Statement of Changes in Stockholders' Impairment
 
Years Ended December 31, 2015 and 2014
 
 
 
   
   
   
   
   
   
 
 
 
   
   
   
   
Additional
   
   
Total
 
 
 
Common Stock
   
Preferred Stock
   
Paid in
   
Retained
   
Stockholders'
 
 
 
Shares
   
Amount
   
Shares
   
Amount
   
Capital
   
(Deficit)
   
Impairment
 
 
 
   
   
   
   
   
   
 
Balance, January 1, 2014
   
24,385,351
   
$
24,945
   
$
974,156
   
$
9,742
   
$
4,402,208
   
$
(9,127,265
)
   
(4,690,930
)
 
                                                       
Shares cancelled
                                                       
 
                                                       
Shares issued for services
   
75,000
     
75
                     
22,425
             
22,500
 
 
                                                       
Net loss, 2014
                                           
(419,741
)
   
(419,741
)
 
                                                       
Balance, December 31, 2014
   
24,460,361
   
$
24,460
     
974,156
   
$
9,742
   
$
4,424,633
   
$
(9,547,006
)
 
$
(5,088,171
)
 
                                                       
Shares issued for services
   
820,000
     
820
                     
228,720
             
229,540
 
                                                         
Intrinsic value of beneficial conversion
                                   
8,217
             
8,217
 
                                                         
Net loss, 2015
                                           
(622,166
)
   
(622,166
)
 
                                                       
Balance, December 31, 2015
   
25,280,361
   
$
25,280
     
974,156
   
$
9,742
   
$
4,661,570
   
$
(10,169,172
)
 
$
(5,472,580
)

The attached notes are an integral part of these consolidated financial statements.
19

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
Nature of Organization
 
LD Holdings, Inc. (the Company),  formerly Leisure Direct, Inc., was formed on January  1, 2000 under the name of ePoolSpas.com, Inc. The formation was effected by the issuance  of 1,750,000 shares of the Company's common stock for the intangible assets of the former operating companies,  Olympic Pools, Inc.  and Preferred Concrete Placement,  Inc.  The Company is located  in Perrysburg, Ohio. The Company plans to acquire companies in a three (3) state area and then eventually roll out nationally.  In October 2010, as part of a broader  plan, the Company opened  the first of a series of diners planned in the Midwest.It closed its diner  in Monroe, Michigan  at the end of August,  2011 and opened a new diner in Toledo, Ohio in October 2011.  The diners catered to the baby boomer generation  with a family orientation. In early  2014, the last of the diners closed.

Basis of Presentation

The accompanying financial statements included herein have been prepared in conformity with accounting principles generally accepted in the United States of America and pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC").

Use of Estimates

The 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  revenue and expenses  during the reporting period. Actual results could differ from those estimates.
 
Fair Value of Financial Instruments
 
The fair values of accounts payable and other short-term obligations approximate their carrying values because of the short-term maturity of these financial instruments.
 
Cash and Cash Equivalents
 
For the purpose of the statements of cash flows, cash equivalents include time deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months or less.
 
20

Property and Equipment

Amortizable and depreciable assets are reported at original cost less accumulated depreciation or amortization.  Amortization and depreciation is provided for in amounts sufficient to relate the cost of such assets to operations over their service lives by the straight-line method.  Leasehold improvements are amortized over the life of the lease.  For federal income tax purposes, amortization and depreciation is computed using the modified accelerated cost recovery system.  The cost of assets sold or retired and the accumulated amortization or depreciation are removed from the accounts in the year of disposal and any gain or loss is included in operations.  Maintenance, repairs, and minor improvements are charged to operations as incurred while betterments which substantially extend service lives are capitalized.

Impairment of Long-lived Assets

The Company evaluates its long-lived assets for impairment when events or changes in the circumstances indicate, in management's judgment, that the carrying value of such assets may not be recoverable.  The determination of whether an impairment has occurred is based on management's estimate of undiscounted future cash flows attributable to the assets as compared to the carrying value of the assets.  If an impairment has occurred, the Company determines the amount of the impairment by estimating the fair value of the assets and recording a loss for the amount that the carrying value exceeds the estimated fair value.  No impairment losses were recognized during the years ended December 31, 2015 and 2014.

Revenue Recognition
 
Revenue for consulting services is recognized at the time the service has been rendered. 
 
Advertising Expense

The Company expenses advertising costs as incurred.  Advertising expenses for the years ended December 31, 2015 and 2014, were $247 and $1,905 respectively.

21

Income Taxes
 
The Company accounts for income taxes using the asset and liability method.  Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The Company adopted authoritative guidance relating to the accounting for uncertainty in income taxes.  The impact of an uncertain income tax provision on the income tax return must be recognized at the largest amount that is more likely than not to be sustained upon audit by the relevant taxing authority. An uncertain tax position will not be recognized if it has a less than 50% likelihood of being sustained.  There are no unrecognized tax benefits included in the Company's balance sheet at December 31, 2015 and 2014.
 
The Company's income tax returns are subject to examination by the appropriate tax jurisdictions.  As of December 31, 2015, the Company's federal and various state tax returns generally remain open for the last three years.
 
Principles of Consolidation
 
The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries.  All intercompany transactions and balances have been eliminated in consolidation.
 
Stock-Based Compensation
 
The Company's Board of Directors adopted the Employee/Consultant Stock Compensation Plan (the "Plan").  The Plan was established to further the growth of the Company by allowing the Company to compensate employees, consultants and other persons who provide bona-fide services to the Company through the award of Common Stock.
 
We recognize expense for our share-based compensation based on the fair value of the awards at the time they are granted.  We estimate the value of stock option awards on the date of grant using the Black-Scholes-Merton option-pricing model (the"Black-Scholes model").  The determination of the fair value of share-based payment awards on the date of grant is affected by our stock price as well as assumptions regarding a number of complex and subjective variables.  These variables include our expected stock price volatility over the term of the awards, expected term, risk-free interest rate, expected dividends and expected forfeiture rates.  The forfeiture rate is estimated using historical option cancellation information, adjusted for anticipated changes in expected exercise and employment termination behavior.  Our outstanding awards do not contain market or performance conditions therefore we have elected to recognize share-based employee compensation expense on a straight-line basis over the requisite service period.
 
Net Loss Per Share

FASB Accounting Standards Codification ("ASC") 260-10 ("Earnings Per Share") requires the presentation of basic earnings per share ("basic EPS") and diluted earnings per share ("diluted EPS").

Basic net loss per share attributable to common stockholders is computed by dividing the net loss by the weighted-average number of common shares outstanding during the period.  Diluted loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding during the period, including common stock equivalents, such as conversions, exercise or contingent exercise of securities. There are 980,000 common stock equivalents that may be converted from outstanding convertible notes at December 31, 2015 and none at December 31, 2014.

2. GOING CONCERN
 
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company incurred a loss of $622,166 and $419,741 during the years ended December 31, 2015 and 2014, respectively. Also, as of December 31, 2015, the Company had $9,738 in cash, and current liabilities exceeded current assets by $5,233,778. These factors all raise substantial doubt about the ability of the Company to continue as a going concern. In their report for the fiscal year ended December 31, 2015, our auditors have expressed an opinion that, as a result of the conditions noted, there is substantial doubt regarding our ability to continue as a going concern.

Management's plans include raising additional funding from debt and equity transactions that will be used to acquire point of sale outlets that should in turn increase sales. Also, the implementation of strong cost management practices and an increased focus on business development should result in the elimination of the operating losses suffered and improvement of cash flows; however, any results of the Company's plans cannot be assumed. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
3.  PROPERTY AND EQUIPMENT
 
 
 
12/31/2015
   
12/31/2014
 
 
 
   
 
Equipment & Fixtures
 
$
-
   
$
-
 
 
               
Leasehold Improvements
   
-
     
-
 
 
               
Computer Equipment
   
-
     
-
 
 
               
Less accumulated amortization and depreciation
   
-
     
-
 
 
               
 
 
$
-
   
$
-
 
 
Depreciation and amortization expense for the years ended December 31, 2015 and 2014 were $0 and $2,628, respectively. In early 2014, the fixed assets were transferred to the owner of the leased property formerly occupied by the last diner in settlement of back rent.  There was a loss recognized for $11,612.
 
4.  RELATED PARTY TRANSACTIONS

Notes payable at December 31, 2015 and 2014 consist of the following:

 
 
2015
   
2014
 
 
 
   
 
Notes payable – DABE, Inc. – with interest accruing at 10% per annum and due on demand.  The notes are guaranteed by a security interest in inventory, receivables, intangibles, chattel paper and contract rights.  John Ayling, the CEO Leisure Direct, Inc. is the sole shareholder of DABE, Inc.
 
$
343,652
   
$
343,652
 
 
               
Note payable – Capital First Management, Inc. – secured, and due on demand.  The notes are guaranteed by a security interest in inventory, receivables, intangibles, chattel paper and contract rights.  John Ayling, the CEO Leisure Direct, Inc. is the sole shareholder of Capital First Management, Inc.
   
1,443,498
     
1,421,965
 
 
               
Notes payable – former president.  The former president has advanced $290,000 with various notes bearing interest at 12%.
   
290,000
     
290,000
 
 
               
Notes payable – OPI, PCPI; OMC and LD LLC – non-interest bearing and due on demand.  John Ayling, the CEO of Leisure Direct, Inc., is the sole member of OPI & PCPI.
   
28,926
     
28,926
 
 
               
 
 
$
2,106,076
   
$
2,084,543
 
 
 
23

 
A related party was issued 240,000 shares of common stock and signed a Consulting Agreement in exchange for the shares which wss valued at $0.25 per share, and will be earned at a rate of 20,000 shares per month starting January 2, 2015.  The Consultant is to provide services for 1 year commencing on the date of the agreement.

A related party Capital First Management, Inc. is funding the Company with loans in 2015 of $141,877 and was repaid $117,500 by the Company from monies made available from the issuance of promissory notes payable throughout the year.

Consulting costs of $19,200 and $24,000 to a related party were incurred in 2015 and 2014, respectively.
 
Revenues of $60,000 in 2015 and 2014 were for consulting services performed for a related party.
 
5.  PROMISSORY NOTES PAYABLE                                                                

Notes payable at December 31, 2015 and 2014 consist of the following:

 
 
2015
   
2014
 
 
 
   
 
Notes payable - $100,000 bearing interest at 30% due March 9, 2006.  The loan is currently in default.
 
$
100,000
   
$
100,000
 
 
               
Notes payable – unsecured bearing interest at 6%.  Payment was due March 24, 2008 in full plus unpaid interest.  The note is currently in default.
   
15,000
     
15,000
 
                 
Notes payable – Bank – line of credit of $25,000 bearing interest at prime plus 6 ½%.  The loan is currently in default.
   
11,897
     
11,897
 
 
               
Notes payable – Individuals at 10% - 12%.  Notes are currently in default. 
   
21,000
     
21,000
 
 
               
 
 
$
147,897
   
$
147,897
 
 
6.  STOCKHOLDERS' IMPAIRMENT
 
During the first quarter of 2015, the Company issued 820,000 shares to four (4) individuals as compensation for services rendered to the Company. The total compensation was valued at $229,540 ($0.28 per share) based on the commitment date share value.  At December 31, 2015, a balance of $15,543 in these fees remained as a prepaid expense.


24

On December 1, 2014, LD Holdings, Inc. entered into an agreement with an Investment Banking firm and issued 75,000 shares as compensation. The total compensation was valued at $0.30 per share based on the commitment date share value. For the year ended December 31, 2015, $22,500 was recorded as consulting expense.

On November 15, 2013, LD Holdings, Inc. signed a consulting agreement with an Independent Consultant.  Under this agreement, the Consultant, will provide services through his investment website, blog and personal contacts to promote the Company's common stock and assist in the promotion and fundraising activities in exchange for 100,000 shares of the Common Stock of the Company.  The agreement was through December 31, 2014.   The Company recognized $37,500 in consulting expense under the contract for the year ended December 31, 2014.

On July 15, 2015, the Directors of LD Holdings, Inc., signed a corporate resolution to reduce the number of authorized preferred shares, $0.001 par value, to 974,156 and the number of authorized common shares, $0.001 par value, to 25,840,351. Although the exercise or conversion of dilutive instruments would require share issuances in excess of the authorized common share limit, the Chief Executive Officer has a majority share ownership and therefore the share issuances are within the control of the Company.

7. CONVERTIBLE NOTES

In 2015, the Company issued a total of $245,000 in promissory notes payable to individuals. The notes bear interest at 10% per year, compounded annually and payable quarterly. The notes mature on December 31, 2017. The Company may prepay the notes upon written notice to the holders. The notes are convertible at any time by the holder at a conversion price of $0.25 per share. Based on this fixed conversion ratio on the respective commitment dates, the Company recognized a debt discount of $8,217 for the beneficial conversion feature underlying certain of these notes. Any accrued interest may also be converted at the fixed conversion price; therefore it represents a contingent beneficial conversion feature. A total of $2,019 was amortized to interest expense during the year ended December 31, 2015.

The quarterly interest incurred under the promissory notes payable has been paid.
25


8.  INCOME TAXES
 
The differences between income tax provisions in the financial statements and the tax expense (benefit) computed at the U.S. Federal Statutory rate are as follows:

 
Year Ended December 31,
 
 
2015
 
2014
 
 
 
 
Tax provision at the U. S. Federal Statutory rate
   
34
%
   
34
%
Valuation allowance
   
(34
)%
   
(34
)%
 
               
Effective tax rates
   
-
%
   
-
%
 
The Company's provision for income taxes differs from applying the statutory U.S. federal income tax rate to income before income taxes.  The primary differences result from recognition of net operating loss carry forwards and from deducting goodwill impairment/amortization expense for financial statement purposes but not for federal income tax purposes.
 
Those amounts have been presented in the Company's financial statements as follows:

 
 
December 31,
 
 
 
2015
   
2014
 
 
 
   
 
Deferred tax asset, non-current
 
$
3,920,698
   
$
3,820,833
 
Total valuation allowance recognized for deferred taxes
   
(3,920,698
)
   
(3,820,833
)
 
               
Net deferred tax asset
 
$
-
   
$
-
 
 
The valuation allowance was established to reduce the net deferred tax asset to the amount that will more likely than not be realized.  This reduction is necessary due to uncertainty of the Company's ability to utilize the net operating loss and tax credit carry forwards before they expire.
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The Company has available net operating loss carry forwards which may be used to reduce Federal and State taxable income and tax liabilities in future years as follows: 
 
 
 
Federal
   
State
 
Available Through
 
   
 
     2020
   
262,952
     
262,952
 
     2021
   
121,232
     
121,232
 
     2022
   
127,017
     
127,017
 
     2023
   
3,020,391
     
3,020,391
 
     2024
   
1,014,436
     
1,014,436
 
     2025
   
1,064,000
     
1,064,000
 
     2026
   
406,645
     
406,645
 
     2027
   
274,414
     
274,414
 
     2028
   
388,876
     
388,876
 
     2029
   
341,725
     
341,725
 
     2030
   
491,682
     
491,682
 
     2031
   
464,318
     
464,318
 
     2032
   
596,818
     
596,818
 
     2033                                           
   
557,836
     
557,836
 
 2034
   
233,489
     
233,489
 
 2035                                                 
   
435,914
     
435,914
 
    Total
 
$
9,801,745
   
$
9,801,745
 
 
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9.  COMMITMENTS AND CONTINGENCIES

The Company leases its office space from a related party, through common management and ownership, on a month-to-month basis.  Rent expense for the years ended December 31, 2015 and 2014 was $30,000 each year.  Effective January 1, 2015 the lease payment of $2,500 per month is on a month to month basis.
 
Also subsequent to the year ended December 31, 2015, the Company sold 1,000,000 shares of its common stock to existing shareholders at $0.10 for proceeds of $100,000.
 
A judgement creditor has obtained an order to issue corporation unissued shares.  There are no unissued shares to issue at year end.  The Company believes it is contrary to law and will be reversed on appeal.  The Company has accrued an amount of $200,000 in prior years toward this obligation and does not believe it will incur further exposure beyond this. 
 
10. SUBSEQUENT EVENTS

Subsequent to the year ended December 31, 2015, the Company issued convertible promissory notes totaling $2,500, carrying interest at 10% due December 31, 2017.
 
On March 16, 2015 the Company entered into an agreement with an individual consultant to develop marketing, sales, business development and communication service.  The agreement was subsequently cancelled in June 2015.

 
 
 
28