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Table of Contents

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

 

þ   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
     
For the quarterly period ended March 31, 2016
OR    
     
¨   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from __________ to __________

 

Commission file number:  001-13621

 

UPD HOLDING CORP.

(Exact name of Registrant as specified in its charter)

 

Nevada

  13-3465289
(State or other jurisdiction of incorporation or organization)   (I.R.S. Employer Identification No.)
 

 

75 Pringle Way, 8th Floor, Suite 804

Reno, Nevada 89502

(Address of principal executive offices, including zip code)

 

775-829-7999

(Registrant’s telephone number, including area code)

 

 

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

 

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ 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 þ No ¨

 

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” 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  þ   
  (Do not check if a smaller reporting company)    

 

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

 

As of May 9, 2016, the issuer had 78,766,636 shares of Common Stock outstanding, par value $.005 per share.

1

 

UPD HOLDING CORP.

 

TABLE OF CONTENTS

 

    Page No.
     
Cautionary Note Regarding Forward-Looking Statements   3
     
PART I.  FINANCIAL INFORMATION
       
Item 1. Financial Statements   4
       
  Consolidated Balance Sheets – March 31, 2016 (Unaudited) and June 30, 2015   4
  Consolidated Statements of Operations – Three and Nine months ended March 31, 2016 and 2015 (Unaudited)   5
  Consolidated Statements of Cash Flows –Nine months ended March 31, 2016 and 2015 (Unaudited)   6
  Notes to Consolidated Financial Statements   7
       
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations   9
Item 3. Quantitative and Qualitative Disclosures About Market Risk   12
Item 4. Controls and Procedures   12
       
PART II.  OTHER INFORMATION    
       
Item 1. Legal Proceedings   13
Item 1A. Risk Factors   13
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds   13
Item 3. Defaults Upon Senior Securities   13
Item 4. Mine Safety Disclosures   13
Item 5. Other Information   13
Item 6. Exhibits   13
       
SIGNATURES   14

 

2

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

 

The statements contained in this Quarterly Report on Form 10-Q that are not historical fact are forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995), within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  The forward-looking statements contained herein are based on current expectations that involve a number of risks and uncertainties.  These statements can be identified by the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “should,” or “anticipates,” or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties.  Investors are cautioned that these forward-looking statements that are not historical facts are only predictions.  No assurances can be given that the future results indicated, whether expressed or implied, will be achieved. Because of the number and range of assumptions underlying the Company’s projections and forward-looking statements, many of which are subject to significant uncertainties and contingencies that are beyond the reasonable control of the Company, some of the assumptions inevitably will not materialize, and unanticipated events and circumstances may occur subsequent to the date of this report.  These forward-looking statements are based on current expectations and the Company assumes no obligation to update this information.  Therefore, the actual experience of the Company and the results achieved during the period covered by any particular projections or forward-looking statements may differ substantially from those projected.  The inclusion of projections and other forward-looking statements should not be regarded as a representation by the Company or any other person that these estimates and projections will be realized, and actual results may vary materially.  There can be no assurance that any of these expectations will be realized or that any of the forward-looking statements contained herein will prove to be accurate.

 

3

 

PART I. FINANCIAL INFORMATION
   
Item 1. Financial Statements

 

UPD HOLDING CORP.

AND SUBSIDIARIES

 

CONSOLIDATED BALANCE SHEETS

 

 

   March 31,   June 30, 
   2016   2015 
   (Unaudited)     
ASSETS        
CURRENT ASSETS:        
Cash and cash equivalents  $14,094   $64,638 
           
Total current assets   14,094    64,638 
           
TOTAL ASSETS  $14,094   $64,638 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)          
           
CURRENT LIABILITIES:          
Accounts payable  $20,983   $11,788 
Accrued liabilities   5,760    5,760 
           
Total current liabilities   26,743    17,548 
           
TOTAL LIABILITIES  $26,743   $17,548 
           
STOCKHOLDERS’ EQUITY (DEFICIT):          
Common stock, $.005 par value 200,000,000 authorized: 78,766,636 and 78,766,636 issued and outstanding as of March 31, 2016 and June 30, 2015, respectively   393,833    393,833 
Preferred stock, $.01 par value 100,000,000 authorized: none issued and outstanding as of March 31, 2016 and June 30, 2015, respectively        
Additional paid-in capital   (285,405)   (285,405)
Accumulated deficit   (121,077)   (61,338)
           
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)   (12,649)   47,090 
           
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)  $14,094   $64,638 

 

The accompanying notes are an integral part of the unaudited consolidated financial statements.

 

4

 

UPD HOLDING CORP.

AND SUBSIDIARIES

 

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited) 

 

 

  

Three Months Ended

March 31,

  

Nine Months Ended

March 31,

 
   2016   2015   2016   2015 
                 
OPERATING EXPENSES:                    
General and administrative  $6,351   $5,412   $17,640   $14,149 
Legal and Accounting fees   16,615    1,050    42,115    1,050 
Total Operating Expenses   22,966    6,462    59,755    15,199 
                     
LOSS FROM OPERATIONS   (22,966)   (6,462)   (59,755)   (15,199)
                     
OTHER INCOME:                    
Interest income   2        16     
Total Other Income   2        16    
                     
NET LOSS  $(22,964)  $(6,462)  $(59,739)  $(15,199)
                     
BASIC AND DILUTED PER SHARE DATA:                    
Net Loss per common share, basic and diluted  $(0.00)  $(0.00)  $(0.00)  $(0.00)
                     
Weighted Average Common Shares Outstanding, basic and diluted   78,766,636    63,127,773    78,766,636    60,893,794 

 

The accompanying notes are an integral part of the unaudited consolidated financial statements.

 

5

 

UPD HOLDING CORP.

AND SUBSIDIARIES

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited) 

 

 

   Nine Months Ended 
   March 31, 
   2016   2015 
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net loss  $(59,739)  $(15,199)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:          
Prepaid expenses       4,662 
Accounts payable   9,195    6,000 
           
Net Cash Used In Operating Activities   (50,544)   (4,537)
           
CASH FLOWS FROM INVESTING ACTIVITIES:          
Cash received from ESIO in reverse merger       89,615 
           
 Net Cash Provided By Investing Activities       89,615 
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Proceeds from sale of common stock       7,200 
Proceeds from contributed capital       9,100 
           
Net Cash Provided By Financing Activities       16,300 
           
NET CHANGE IN CASH AND CASH EQUIVALENTS   (50,544)   101,378 
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD   64,638    5,912 
CASH AND CASH EQUIVALENTS, END OF PERIOD  $14,094   $107,290 
           
SUPPLEMENTAL DISCLOSURES:          
Net assets assumed in reverse merger  $   $4,237 

 

The accompanying notes are an integral part of the unaudited consolidated financial statements.

 

6

 

UPD HOLDING CORP.

AND SUBSIDIARIES

 

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

 

 

Note 1 - Basis of Presentation

 

Business, Operations and Organization 

 

Esio Water & Beverage Development Corp. was incorporated in Nevada in June 1988 as Richard Barrie Fragrances, Inc. Over the years, the Company changed its name several times, most recently from Esio Water & Beverage Development Corp to UPD Holding Corp. (“UPDH”). UPDH is the parent company of its wholly-owned subsidiaries United Product Development Corp. (“UPDC”) and iMetabolic Corp. (“IMET”), which are both Nevada corporations. UPDH, UPDC, and IMET are hereinafter collectively referred to as the “Company.”

 

On March 16, 2015, the Company issued to the IMET 16 shareholders of record an aggregate of 60,000,000 shares, or 76.2% of the Company’s common stock. Prior to the close of the reverse merger, IMET had 10,000,000 common shares outstanding immediately prior to the merger and net liabilities of $20,500. Prior to closing, the predecessor company had 18,566,636 shares outstanding and net assets of $85,378, of which $89,615 was cash and $4,237 was non-cash. As a result of the closing of this transaction, UPDC is now a wholly owned subsidiary of the Company, IMET and its business and operations represent those of the Company

 

For accounting purposes, this transaction is being accounted for as a reverse merger and has been treated as a recapitalization of the Company with IMET considered the accounting acquirer, and the financial statements of the accounting acquirer become the financial statements of the registrant. This transaction is hereinafter referred to as the “Reverse Merger.” The Company did not recognize goodwill or any intangible assets in connection with the transaction. The 60,000,000 common shares issued to the shareholders of IMET in conjunction with the share exchange transaction have been presented as outstanding for all periods.

 

On December 30, 2015, the Company filed Articles of Merger (the “Merger”) with the Nevada Secretary of State. The Merger was between the Company and our wholly-owned subsidiary, UPD Holding Corp. (the “Subsidiary”). Pursuant to Nevada corporate law, we amended our Articles of Incorporation by the Merger to change our name to UPD Holding Corp. We believe our new name more properly indicates our current lines of business because the Company has not been in the water and beverage industry since 2012. “UPD” stands for United Product Development.

 

Unaudited Interim Financial Statements

 

The accompanying unaudited interim consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with generally accepted accounting principles (“GAAP”), pursuant to the rules and regulations of the Securities and Exchange Commission, and are unaudited. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary for a fair presentation of the results for the interim periods presented have been made. The results for the nine month period ended March 31, 2016, may not be indicative of the results for the entire year. These financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2015.

 

The preparation of the Company’s unaudited interim consolidated 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 expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however, actual results could differ materially from these estimates. 

 

7

 

UPD HOLDING CORP.

AND SUBSIDIARIES

 

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

 

 

Going Concern

 

The Company’s unaudited interim consolidated financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenue sufficient to cover its operating costs and allow it to continue as a going concern.  The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable.  If the Company is unable to obtain adequate capital, it could be forced to cease operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

 

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plans to obtain such resources for the Company include (i) obtaining capital from management and significant stockholders sufficient to meet its minimal operating expenses; (ii) obtaining funding from outside sources through the sale of its debt and/or equity securities; and (iii) completing a merger with or acquisition of an existing operating company. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. 

 

8

 

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

 

The following management discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited interim consolidated financial statements and related notes which are included in Item 1 of this Quarterly Report on Form 10-Q, and with our audited financial statements included in our Form 10-K for the fiscal year ended June 30, 2015, filed with the Securities and Exchange Commission (“SEC”) on October 13, 2015.

 

Overview

 

Acquisition of iMetabolic Corp.

 

On December 31, 2014, we entered into an Agreement of Share Exchange and Plan of Reorganization (the “Share Exchange Agreement”) and consummated a share exchange (the “Share Exchange”) with iMetabolic Corp. (“IMET”), a Nevada corporation.  The Effective Date of the transaction was March 16, 2015 (the “Effective Date”) and resulted in the acquisition of IMET (the “Acquisition”).  Pursuant to the terms of the Share Exchange Agreement, we acquired all of the outstanding capital stock of IMET from the 16 IMET shareholders for an aggregate of 60,000,000 shares, or 76.2% of the Company’s common stock.

 

As a result of the Share Exchange Agreement, the IMET shareholders transferred all their interest in IMET to the Company and, as a result, IMET became a wholly owned subsidiary of the Company.

 

As a further condition of the Share Exchange Agreement, the then current officers of the Company resigned on March 16, 2015 and Mark W. Conte was appointed President, CEO and a director of the Company, Kevin J. Pikero as CFO, Treasurer, Secretary, and a director and Andrew D. Smith as a director.

 

The IMET acquisition is discussed more fully in the Form 8-K we filed with the Securities and Exchange Commission (“SEC”) on March 20, 2015. Included as an exhibit to that Form 8-K is a copy of the Share Exchange Agreement.

 

Name Change

 

On December 30, 2015, the Company filed Articles of Merger (the “Merger”) with the Nevada Secretary of State. The Merger was between the Company and our wholly-owned subsidiary, UPD Holding Corp. (the “Subsidiary”). Pursuant to Nevada corporate law, we amended our Articles of Incorporation by the Merger to change our name to UPD Holding Corp. We believe our new name more properly indicates our current lines of business because the Company has not been in the water and beverage industry since 2012. “UPD” stands for United Product Development which is the name of one of our wholly-owned subsidiaries. We will be applying to FINRA to have our common stock traded under the new name and for a new trading symbol as soon as possible.

 

IMET Products

 

IMET was  formed on July 1, 2013 for the purpose of marketing products under the brand “iMetabolic” that were previously being sold by the brand’s licensor, International Metabolic Institute LLC (“IMI”), as well as to develop new products that would be specifically suited for a national marketing plan.  IMI transferred certain product and trademark rights to IMET on July 22, 2013 (the “License”).  The License was amended on March 16, 2015 to clarify IMET’s and IMI’s future rights. See “IMET License Agreement” below. The mission of IMET is to build upon preexisting brand equity and the expert copy and other literature authored by Dr. Kent Sasse as applied to the national launch of products with extraordinary profitability and novel market appeal.

 

A pre-existing line of five (5) soft-bound books authored by the founder of the iMetabolic brand, Dr. Kent Sasse, is available for sale under the brand “A Sasse Guide” on both the www.imetabolic.com and www.sasseguide.com websites. These books are titled: (i) Life-Changing Weight Loss; (ii) Doctor’s Orders – 101 Medically Proven Tips for Losing Weight; (iii) Outpatient Weight Loss Surgery – Safe and Successful Weight Loss with Modern Bariatric Surgery; (iv) Weight-Loss Surgery – Which One is Right for You?; and (v) After Weight Loss Surgery.  Pursuant to the terms of the License Amendment these books will continue to be the property of and sold by IMI. 

 

9

 

 

A pre-existing line of products, including, but not limited to, proprietary blend meal replacements, dietary specialty foods, and nutraceuticals, have been sold by IMI at IMI’s company store / doctor’s office pursuant to a reservation of rights in the License and online at www.imetabolic.com.  An amendment to the License provides that after IMI has sold its entire inventory existing or ordered on March 16, 2015, IMI will not sell any more products which may be deemed to compete with IMET’s products.

 

IMET has developed the following four new products to be marketed:

 

  A new product concept to be marketed under the name iMetabolic “Catalyst”, which is intended to provide the essential vitamins and plant compounds that are necessary to aid in metabolic functions. Such ingredients include broad spectrum B-Complex Vitamins, as well as Green Tea Extract and Resveratrol (polyphenols).

 

  A new product concept to be marketed under the name iMetabolic “Mini-Meal”, which is intended to provide the essential whey protein isolate intake for a person who is on a four-to-five meal per day diet or needs a snack that will act as a low-calorie, high nutritional value appetite suppressant.

 

  A new product concept to be marketed under the name iMetabolic “Multi-Pro”, which is intended to provide the essential broad-spectrum vitamins and minerals that are typically marketed as “multi-vitamin supplements;” however, this product is specifically tailored to dovetail with the “Catalyst” so as to virtually eliminate the duplicate consumption of overlapping ingredients that routinely plagues supplement users.

 

  A new product concept to be marketed under the name iMetabolic “BittX.” This product is premised on the scientific theory that modern horticulture and food producers have systematically promoted foods that are sweet or lack bitterness, which is the flavor typically associated with foods that have the greatest health benefits. Accordingly, this product is intended to reform the body’s disposition toward bitter foods in a subtle, inoffensive way.

 

We believe IMET’s current four products can be successfully marketed through the use of infomercials and have made progress with identifying a creator and producer for an infomercial to sell the products. Additionally, the Company is building a new website with e-commerce capabilities and plans to use SEO (search engine optimization), social media, e-mail marketing, and PPC (pay for click) venues as well to drive the business. However, there is no assurance IMET’s infomercial marketing strategy will be successful.

 

We have also investigated using regional distributors for our products and may use them in the future, on a region by region basis as working capital permits. The Company has identified some prospects and is working to move those prospects forward.

 

We believe IMET has located experienced nutrition and supplemental manufacturers who have indicated an interest and an ability to manufacture IMET’s initial four products.  We have received written cost quotations from these manufactures and production timetables, as well. The Company is in the process of evaluating the best venue to move forward.

 

The Company was hopeful that it was going to be able to secure its new website, marketing program, and product manufacturing schedules to begin marketing our products within six months of the closing of the Exchange. In reality, these details are taking more time to prepare and thus the Company is now targeting some initial product and marketing launches in 2016.

 

IMET License Agreement

 

IMET entered into a license with IMI, a Nevada limited liability company, on July 22, 2013 (the “License”).  In the License, IMI granted to IMET the exclusive licenses to use, produce, market and sell: (i) five marks (the “Licensed Marks”); (ii) four books written by Dr. Sasse (the “Licensed Content”); and (iii) approximately 150 supplements and foods created and previously sold by IMI (the “Licensed Articles”).  The Licensed Marks include the trademark “iMetabolic”; the domain name “www.imetabolic.com”; the trademark “iMetabolic Catalyst”; and a trademark and domain name related to Dr. Sasse.  The License had a term of three years, commencing on July 1, 2013 (the “Initial Term”), with a provision stating that the term of the License would automatically become perpetual if IMET sold $3.0 Million of Licensed Content or Licensed Articles before July 1, 2016. IMET is to bear all expenses of the creation and sale of the Licensed Content and Licensed Articles.  The License contains other provisions standard in licenses.

 

10

 

 

In conjunction with closing the Exchange, on March 16, 2015 IMI and IMET executed an amendment to the License (the “License Amendment”). In the License Amendment: (i) IMET returned to IMI all rights to the Licensed Content (Dr. Sasse’s books), the two Dr. Sasse Licensed Marks and all revenues from the sale of the Licensed Articles since July 1, 2013 through the date of closing the Exchange; (ii) the Initial Term was increased from three to four years; (iii) a provision was added stating that after the closing of the Exchange, IMI shall not sell any more of the Licensed Articles or any other products IMET deems as competing with the Licensed Articles; (iv) a provision was added stating that upon reaching the $3.0 Million milestone, IMI shall transfer and or assign to IMET the three remaining Licensed Marks; and (v) a provision was added stating that upon completion of the Initial Term, IMET shall have all rights, obligations, and burdens of enforcing the Licensed Marks.

 

During 2014, the trademark “iMetabolic” expired at the U.S. Patent and Trademark Office.  In conjunction with the closing of the Exchange, IMI re-applied for that trademark and the service mark "iMetabolic" on December 16, 2014.  In May 2015, we engaged Drinker, Biddle & Reath, LLP to correspond with the U.S. Patent and Trademark Office regarding our application.  We are currently in discussions with an opposer of our publication dated December 29, 2015. We hope to know more soon of our next steps to clear the mark for future marketing efforts, possible infomercial, and distribution of products as mentioned above. If this trademark issue cannot be resolved in the near future, we will be forced to either rename our products under a different trademark or seek out a new business activity.

 

RESULTS OF OPERATIONS

 

General and Administrative Expenses

 

For the three months ended March 31, 2016 and 2015, we have recorded operating expenses of $22,966 and $6,462, respectively.

 

For the nine months ended March 31, 2016 and 2015, we have recorded operating expenses of $59,755 and $15,199, respectively.

 

Our operating expenses for both the three and nine months ended March 31, 2016 consisted primarily of general and administrative expenses along with legal and accounting fees, all of which are associated with maintaining the Company as a publicly traded entity.

 

Net Loss

 

For the three months ended March 31, 2016 and 2015, we have recorded a net loss of $22,964 and $6,462, respectively.

 

For the nine months ended March 31, 2016 and 2015, we have recorded a net loss of $59,739 and $15,199, respectively.

 

Liquidity and Capital Resources

 

At March 31, 2016, the Company does not currently engage in any business activities that generate cash flow. As of March 31, 2016, the Company had $14,094 in cash which is not enough capital to commence our product marketing efforts. Without additional capital during the remainder of fiscal 2016, we anticipate our operating expenses will include: (i) general and administrative expenses, (ii) any officer, director and/or consulting fees, and (iii) costs associated with maintaining the Company as a publicly traded entity, including the filing of Exchange Act reports under the Securities Exchange Act of 1934. We believe we will be able to meet these costs through the use of existing cash and cash equivalents or additional amounts, as necessary, to be loaned by or invested in us by our stockholders, management or other investors. However, no assurance can be given that we will be able to raise additional capital, when needed or at all, or that such capital, if available, will be on acceptable terms. In the absence of obtaining additional financing, we may be unable to fund our operations. Accordingly, the Company’s financial condition could require that it seek the protection of applicable reorganization laws in order to avoid or delay actions by third parties, which could materially adversely affect, interrupt or cause the cessation of its operations. As a result, the Company’s independent registered public accounting firm has issued going concern opinion on the consolidated financial statements of the Company for the fiscal year ended June 30, 2015.

 

11

 

 

Off-balance sheet arrangements

 

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

 

Critical Accounting Policies

 

Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, which require us to make estimates and judgments that significantly affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Our significant accounting policies are described in the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2015, which are reviewed by management on a regular basis. 

 

New Accounting Pronouncements

 

Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

Our exposure to market risks is limited to changes in interest rates. We do not use derivative financial instruments as part of an overall strategy to manage market risk. We have no debt outstanding nor do we have any investment in debt instruments other than highly liquid short-term investments. Accordingly, we consider our interest rate risk exposure to be insignificant at this time.

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this quarterly report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2016, our disclosure controls and procedures were effective.

 

Changes in Internal Control Over Financial Reporting

 

During the quarter ended March 31, 2016, there have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

12

 

PART II. OTHER INFORMATION

 

Item 1. Legal Proceedings

 

As of the date of this report, the Company is not currently involved in any legal proceedings.

 

Item 1A. Risk Factors

 

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item. However, the risks associated with our Company are set forth in the "Risk Factors" section of our Form 8-K filed with the SEC on March 20, 2015.

 

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

 

None.

 

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information

 

None.

 

Item 6. Exhibits

 

The exhibits listed below are filed herewith.

 

Exhibit

Number

  Description
     
10.1   Agreement of Share Exchange and Plan of Reorganization dated December 31, 2014 between the Company and iMetabolic Corp. (Incorporated by reference to Exhibit 2.1 of the Current Report on Form 8-K filed on March 20, 2015)
2.1   Articles of Merger filed with the Nevada Secretary of State on December 30, 2015 (Incorporated by reference to Exhibit 2.1 of the Current Report on Form 8-K filed on January 22, 2016)
2.2   Agreement of Merger between the Company and its wholly-owned subsidiary, UPD Holding Corp. (Incorporated by reference to Exhibit 2.2 of the Current Report on Form 8-K filed on January 22, 2016)
31.1*   Certification of President and Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*   Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*   Certification of President and Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*   Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*   XBRL Instance Document**
101.SCH*   XBRL Extension Schema Document**
101.CAL*   XBRL Extension Calculation Linkbase Document**
101.DEF*   XBRL Extension Definition Linkbase Document**
101.LAB*   XBRL Extension Labels Linkbase Document**
101.PRE*   XBRL Extension Presentation Linkbase Document**

___________________

* Filed herewith.
** In accordance with Rule 406T of Regulation S-T, this information is deemed not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

 

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SIGNATURES

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  UPD HOLDING CORP.
     
     
Dated:   May 9, 2016 By: /s/  Mark W. Conte
   

Mark W. Conte

President and Chief Executive Officer

(Principal Executive Officer)

 

   
     
Dated:   May 9, 2016 By: /s/  Kevin J. Pikero
   

Kevin J. Pikero

Chief Financial Officer

(Principal Financial and Accounting Officer)

     

 

 

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