4M Carbon Fiber Corp. - FORM 10-Q

Attached files

file	filename
EX-32 - SECTION 1350 CERTIFICATION BY CFO - 4M Carbon Fiber Corp.	ex_32-2.htm
EX-32 - SECTION 1350 CERTIFICATION BY CEO - 4M Carbon Fiber Corp.	ex_32-1.htm
EX-31 - RULE 13A-14(A) CERTIFICATION BY CFO - 4M Carbon Fiber Corp.	ex_31-2.htm
EX-31 - RULE 13A-14(A) CERTIFICATION BY CEO - 4M Carbon Fiber Corp.	ex_31-1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


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

	For the Quarterly Period Ended March 31, 2016

o	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: 000-55401

WOODLAND HOLDINGS CORPORATION

(Exact name of registrant as specified in its charter)


Delaware		80-0379897
(State of incorporation)		(I.R.S. Employer Identification No.)

13101 Preston Road, Suite 510
Dallas, Texas 75240
(Address of principal executive offices)

(888) 837-3910

(Registrant’s telephone number including area code)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes X No ____

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, 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.

Large accelerated filer ____ Accelerated filer ____ Non-accelerated filer ____ Smaller reporting company X

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

The number of shares outstanding of the registrant’s common stock, $0.001 par value per share, as of May 12, 2016 was 4,655,338.

WOODLAND HOLDINGS CORPORATION

INDEX


Item Number		Page

	PART I. FINANCIAL INFORMATION

1	Financial Statements (Unaudited):

	Condensed Consolidated Balance Sheets as of March 31, 2016 and December 31, 2015 (Audited)	1

	Condensed Consolidated Statements of Operations for the Three Month Period Ended March 31, 2016 and 2015	2

	Condensed Consolidated Statement of Stockholders’ Equity for the Three Month Period Ended March 31, 2016	3

	Condensed Consolidated Statements of Cash Flows for the Three Month Period Ended March 31, 2016	4

	Notes to Condensed Consolidated Financial Statements	5

2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10

3	Quantitative and Qualitative Disclosures about Market Risk	12

4	Controls and Procedures	12

	PART II. OTHER INFORMATION

1	Legal Proceedings	13

1A	Risk Factors	13

2	Unregistered Sales of Equity Securities and Use of Proceeds	13

3	Defaults Upon Senior Securities	13

4	Mine Safety Disclosures	13

5	Other Information	13

6	Exhibits	13

	Signatures	14

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

Woodland Holdings Corporation

Condensed Consolidated Balance Sheets


	March 31, 2016			December 31, 2015
	(unaudited)
Assets
Current assets:
Cash	$	1,604		$	13,967
Accounts receivable, net		11,258			17,587
TOTAL ASSETS	$	12,862		$	31,554

Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable	$	10,765		$	9,378
Total liabilities		10,765			9,378

Commitments and Contingencies		—			—

Stockholders’ equity (deficit):
Common stock, $0.01 par value, 100,000,000 shares authorized; 100 shares issued and outstanding, December 31, 2015 and 2014, respectively		—			—
Additional paid-in capital		(12,083,676	)		(12,083,676	)
Retained earnings		12,085,773			12,105,852
Total stockholders’ equity (deficit)		2,097			22,176
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	12,862		$	31,554

See Notes to Condensed Consolidated Financial Statements.

- 1 -

Woodland Holdings Corporation

Condensed Consolidated Statements of Operations

(unaudited)


	For the Three Months Ended March 31,
	2016			2015

Sales, net	$	21,334		$	30,621

Costs of goods sold		4,278			6,523

Gross profit		17,056			24,098

Expenses:
Selling, general and administrative expenses		41,136			(56,528	)
Depreciation		—			907
Total Operating Expenses		41,136			(55,621	)
Operating income (loss)		(24,080	)		79,719

Other income (expense), net:
Other income (expense), net		4,001			(180	)
Total other expense, net		4,001			(180	)
Income (loss) from continuing operations before income taxes		(20,079	)		79,539
Income taxes		—			—
Income (loss) from continuing operations		(20,079	)		79,539
Income (loss) from discontinued operations, net of tax		—			15,777
Gain from discontinued operations, net of tax		—			—
Net income (loss)	$	(20,079	)	$	95,316

Basic and diluted earnings loss per share from continuing operations	$	0.00		$	0.02
Basic and diluted earnings per share from discontinued operations	$	0.00		$	0.00
Basic and diluted earnings (loss) per share	$	0.00		$	0.02

Basic and diluted weighted average number shares outstanding		4,655,338			4,655,338

See Notes to Condensed Consolidated Financial Statements.

- 2 -

Woodland Holdings Corporation

Condensed Consolidated Statements of Stockholders’ Equity

(unaudited)


					Additional						Total
	Common Shares				Paid-in			Accumulated			Stockholders’
	Shares		Amount		Capital			Deficit			Equity (Deficit)

Balance, December 31, 2015		4,655,338	$	—	$	(12,083,676	)	$	12,105,852		$	22,176
Net income		—		—		—			(20,079	)		(20,079	)
Balance, March 31, 2016		4,655,338	$	—	$	(12,083,676	)	$	12,085,773		$	2,097

See Notes to Condensed Consolidated Financial Statements.

- 3 -

Woodland Holdings Corporation

Condensed Consolidated Statements of Cash Flows

(unaudited)


	For the Three Months Ended March 31,
	2016			2015

Cash Flows from Operating Activities
Net income (loss)	$	(20,079	)	$	95,316
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Provision for doubtful accounts		14,581			12,408
Depreciation		—			907
Changes in operating assets and liabilities, net of acquisitions and divestitures:
Accounts receivable		(8,252	)		(17,626	)
Prepaid expenses and other current assets		—			38,497
Accounts payable		1,387			(61,874	)
Accrued expenses		—			(11,872	)
Changes in assets and liabilities of discontinued operations		—			(23,582	)
Net cash provided by (used in) operating activities		(12,363	)		32,174

Cash Flows from Financing Activities
Payments on capital leases		—			(892	)
Return of capital to shareholder		—			(8,301	)
Net cash used in financing activities		—			(9,193	)

Net increase (decrease) in cash		(12,363	)		22,981
Cash at beginning of period		13,967			3,021
Cash at end of period	$	1,604		$	26,002

Cash paid for:
Interest	$	—		$	—
Income taxes	$	—		$	—

See Notes to Condensed Consolidated Financial Statements.

- 4 -

Woodland Holdings Corporation

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2016

1. Basis of Presentation

Interim Unaudited Condensed Consolidated Financial Statements

The unaudited interim condensed consolidated financial statements of Woodland Holdings Corporation (“Woodland” or the “Company”) as of March 31, 2016 and for the three month period ended March 31, 2016 and 2015 contained in this Quarterly Report (collectively, the “Unaudited Interim Condensed Consolidated Financial Statements”) were prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for all periods presented. The results of operations for the three month period ended March 31, 2016 is not necessarily indicative of the results that may be expected for the entire fiscal year.

The accompanying Unaudited Interim Condensed Consolidated Financial Statements have been prepared in accordance with the regulations for interim financial information of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the disclosures required by U.S. GAAP for complete financial statements. In the opinion of management, the unaudited accompanying statements of financial condition and related interim statements of operations, cash flows, and stockholders’ deficit include all adjustments (which consist only of normal and recurring adjustments) considered necessary for a fair presentation in conformity with U.S. GAAP. These Unaudited Interim Condensed Consolidated Financial Statements should be read in conjunction with the Woodland Holdings consolidated financial statements as of and for the year ended December 31, 2015, as filed with the SEC on Form 10-K.

Organization

The Company was incorporated in the State of Delaware, on January 21, 2009.

The Company is a holding company with three telecommunications services companies as subsidiaries. The Company’s subsidiaries, as explained in more detail below, seek to take advantage of opportunities created from the increased accessibility of content across mobile, television and internet platforms.

Spinoff

The Company was originally a wholly owned subsidiary of CornerWorld Corporation (“CWC”), a Nevada corporation publicly traded on the OTCQB exchange. On August 13, 2015, CWC’s Board of Directors formally approved a plan whereby Woodland and its wholly owned subsidiaries were to be spun off in their entirety. On October 14, 2015, the US Securities and Exchange Commission (the “SEC”) formally informed Woodland that its registration statement had become effective, clearing the way for the spin-off. Finally, on December 31, 2015, CWC’s Board of Directors spun-off Woodland to CWC’s shareholders of record as of December 31, 2015 (the “Record Date”). CWC shareholders, as of the Record Date, received shares in Woodland equal to their pro-rata ownership percentage of CWC. For every share owned by CWC’s shareholders as of the Record Date, those same shareholders were issued 1 share of Woodland’s common stock. Woodland is in the process of taking the necessary actions whereby Woodland’s shares will be free-trading on the OTCXB exchange.

Operations

The Company provides telephony and internet services through its wholly owned subsidiaries Phone Services and More, L.L.C., doing business as Visitatel (“PSM”) and T2 Communications, L.L.C. (“T²”). As a provider of Internet and voice over Internet protocol (“VoIP”) services, T² delivers traditional telecommunications services via VoIP to business customers in Texas. Offerings include: phone lines, internet connections, long distance and toll-free services. T² is a Competitive Local Exchange Carrier (CLEC) that generates revenues via the sale of long-distance minutes to its wholesale carrier customers and the provision of dial-tone to its end users for a monthly fee. T² also generates commissions from its carrier partners related to the provision of long-distance minutes to its customers. PSM, also a CLEC, is a wholesale long distance service provider to the carrier community and large commercial users of minutes. PSM generates revenues via earning commissions from serving as a broker for services provided by T². T²and PSM’s CLEC licenses permit them to operate in the lucrative telecommunications industry but their respective business models do not require any significant investments in property plant and equipment due to the fact that they are able to outsource all switching and technology needs to third party providers. T²and PSM’s businesses could be adversely impacted should these third party providers change the rates they charge to T²and PSM or if they ceased operations requiring T²and PSM to locate other providers.

- 5 -

Woodland Holdings Corporation

Notes to the Unaudited Interim Condensed Consolidated Financial Statements – (Continued)

TinyDial, LLC (“TinyDial”) was previously a wholly-owned subsidiary of CWC. TinyDial is a mobile telecommunications application that is free to its users. CWC contributed 100% of its ownership of TinyDial stock to the Company on September 30, 2015 for no consideration as TinyDial had no accounts, no operations and no customers. TinyDial holds a telecommunications patent and is a development stage company whose core focus is enabling its users to conduct unlimited free conference calls, direct dialing via the use of short codes, instant messaging and contact management, among other mobile telecommunications services. It is anticipated that it will ultimately generate revenues based on a minutes of use (“MOU”) model whereby, as its users make conference calls, they generate MOU’s which TinyDial can then bill to its carrier partners. At this time, the Company does not have future research and development plans related to TinyDial nor does it plan on allocating further resources on the TinyDial mobile application or patent.

2. Summary of Significant Accounting Policies

This summary of significant accounting policies is presented to assist in understanding the Company’s consolidated financial statements. The consolidated financial statements and notes are representations of the Company’s management who is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles (“GAAP”) in the United States of America and have been consistently applied in the preparation of the consolidated financial statements. The consolidated financial statements are stated in United States of America dollars.

Receivables

Accounts receivable include uncollateralized customer obligations due under normal trade terms requiring payment within 30-60 days from invoice date. Payments of accounts receivable are allocated to the specific invoices identified on the customer’s remittance advice or, if unspecified, are applied to the earliest unpaid invoices.

The carrying amount of accounts receivable is reduced by a valuation allowance for doubtful accounts that reflects management’s best estimate of the amounts that will not be collected based on historical collection trends. The allowance for doubtful accounts was $60,927 and $48,011 as of March 31, 2016 and December 31, 2015.

Fair Value of Financial Instruments

ASC No. 850 requires disclosure of fair value information about financial instruments when it is practicable to estimate that value. The carrying amount of the Company’s cash and cash equivalents, accounts receivable, accounts receivable-related party, accounts payable, accounts payable-related party and accrued liabilities approximate their estimated fair values due to their short-term maturities. Notes payable are carried at their face value net of their issuance costs which management believes is a reasonable approximation for their fair value. Warrants with put features are carried at their minimum cash put value discounted for the time value of money. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these consolidated financial statements.

Income Taxes

The Company accounts for income taxes in accordance with ASC No. 740 which requires the use of the asset and liability method of accounting of income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the consolidated financial statements carrying amounts of existing assets and liabilities and their respective tax bases. 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.

Basic and Diluted Earnings (Loss) Per Share

In accordance with ASC 260, basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding. Diluted earnings (loss) per share, if any, is computed similar to basic earnings (loss) per share except that the denominator is adjusted for the potential dilution that could occur if stock options, warrants, and other convertible securities were exercised or converted into common stock. The Company had no dilutive securities outstanding at any reporting period.

- 6 -

Woodland Holdings Corporation

Notes to the Unaudited Interim Condensed Consolidated Financial Statements – (Continued)

Revenue Recognition

The Company recognizes revenue in accordance with Staff Accounting Bulletin (“SAB”) No. 101, “Revenue Recognition in Financial Statements,” as revised by SAB 104. As such, the Company recognizes gross revenue when persuasive evidence of an arrangement exists, the price is fixed or readily determinable and collectability is probable. The Company does not provide sales discounts to its customers. For PSM and T², the revenue is derived service contracts for the phone and internet services used by each customer or via the carrier access billing derived from customer minutes being processed through T²’s outsourced providers. Revenue is recognized as the services are provided.

Use of Estimates

The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments with an original maturity of three (3) months or less to be cash equivalents.

Property and Equipment

Property and equipment are recorded at cost and depreciated over their estimated useful lives using the straight-line method as follows:


Computer equipment	3 years
Office furniture	5 years
Computer software packages	3 years
Capitalized software development	3 years
Leasehold improvements	3 years

Depreciation expense for property and equipment for the three months ended March 31, 2016 and 2015 was $0 and $907, respectively. As of March 31, 2016, all of the Company’s fixed assets have become fully depreciated at this time. Expenditures for maintenance and repairs which do not materially extend the useful lives of property and equipment are charged to operations. When property or equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the respective accounts with the resulting gain or loss reflected in operations.

Long-Lived Assets

The Company accounts for its long-lived assets in accordance with ASC 360. The Company’s primary long-lived assets are property and equipment. ASC 360 requires a company to assess the recoverability of its long-lived assets whenever events and circumstances indicate the carrying value of an asset or asset group may not be recoverable from estimated future cash flows expected to result from its use and eventual disposition. As previously noted, all of the Company’s long-lived assets have become fully depreciated.

Return of Capital to Shareholder

The Company has never declared or paid dividends of any type. As a wholly-owned subsidiary of CWC, however, the Company contributed to CWC’s operations in the form of cash moved to its former parent in the form of inter-company transactions. On the statement of changes in stockholders’ equity, “Return of Capital to Shareholder” represents cash payments made to CWC by the Company in the form of inter-company transfers.

- 7 -

Woodland Holdings Corporation

Notes to the Unaudited Interim Condensed Consolidated Financial Statements – (Continued)

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Woodland Holdings Corporation, its wholly owned subsidiaries and entities determined to meet the definition of Variable Interest Entities. All significant intercompany transactions and balances have been eliminated in consolidation.

Concentrations of Cash and Cash Equivalents

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Federal Deposit Insurance Corporation (FDIC) currently insures accounts at each institution for up to $250,000. At times, cash balances may exceed the FDIC insurance limit of $250,000. At March 31, 2016 and December 31, 2015 the Company had no concentrations that were in excess of that which is insured by the FDIC.

Recent Accounting Pronouncements

There were various accounting standards and interpretations issued during the year ended December 31, 2015, none of which are expected to have a material impact on the Company’s consolidated financial position, operations, or cash flows.

Reclassifications

Certain prior year accounts have been reclassified to conform to the current year’s presentation.

3. Discontinued Operations

T2 Communications, LLC

The Company completed the sale of T²’s Michigan operations on March 31, 2015 for $15,000; we recognized no gain on the sale. T²’s Michigan operations have been reclassified as discontinued operations for its operations up to the date of sale for the years ended December 31, 2015 and 2014 and the eight-month period ended December 31, 2013. The following is a summary of the operating results of T²’s discontinued operations.


	For the Three Months Ended March 31,
	2016		2015

Sales, net	$	—	$	39,185

Income (loss) from discontinued operations before income taxes		—		15,777
Income taxes		—		—
Net income from discontinued operations	$	—	$	15,777

The Company had no assets or liabilities of discontinued operations as of March 31, 2016 or December 31, 2015.

4. Leases

The Company had a capital lease on telecom equipment. The lease expired of its own accord on March 1, 2015 and the Company made the final payment on this capital lease on that date.

- 8 -

Woodland Holdings Corporation

Notes to the Unaudited Interim Condensed Consolidated Financial Statements – (Continued)

5. Commitments and Contingencies

Litigation

The Company is occasionally involved in other litigation matters relating to claims arising from the ordinary course of business. The Company’s management believes that there are no claims or actions pending or threatened against the Company, the ultimate disposition of which would have a material adverse effect on our business, results of operations and financial condition.

6. Related Party Transactions

The Company operates at no cost from office space that CWC leases from 13101 Preston Road, LP. Trusts managed by the control party of the Company’s largest shareholder along with trusts controlled by the family of the Company’s CEO own the building from which the Company currently operates. The lease expired on January 31, 2016 and CWC paid $2,500 and $7,500 in rent during the three month periods ended March 31, 2016 and 2015, respectively. As of March 31, 2016, the Company had recorded a liability of $17,500 for unpaid rent on its office space.

7. Subsequent Events

There were no events that took place subsequent to March 31, 2016 up through the date of the filing of these financial statements that had a material impact on these financial statements.

- 9 -

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

Overview

Woodland is a telecommunication services company providing services for the increased accessibility of content across mobile and Internet platforms. The Company is a holding company whose wholly owned subsidiaries operate in the rapidly changing telecommunications services industry.

Our key assets are our CLEC’s along with their respective licenses as well as TinyDial, our patented mobile telecommunications application.

Three Months ended March 31, 2016 Highlights:


	·	CWC completed the spin-off of the Company to CWC’s shareholders of record as of December 31, 2015. Effective January 1, 2016, Woodland became its own operating and reporting company.

Critical Accounting Policies and Estimates

Use of Estimates and Critical Accounting Policies

In preparing our Unaudited Condensed Consolidated Financial Statements, we make estimates, assumptions and judgments that can have a significant effect on our revenues, income (loss) from operations, and net income (loss), as well as on the value of certain assets on our consolidated balance sheet. We believe that there are several accounting policies that are critical to an understanding of our historical and future performance as these policies affect the reported amounts of revenues, expenses and significant estimates and judgments applied by management. While there are a number of accounting policies, methods and estimates affecting our financial statements, areas that are particularly significant include allowance for doubtful accounts, impairment of long-lived assets (including goodwill), revenue recognition and stock-based compensation. In addition, please refer to Note 2 of the Notes to the Unaudited Interim Condensed Consolidated Financial Statements for further discussion of our accounting policies.

Allowance for Doubtful Accounts

We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. The allowance for doubtful accounts is based on an estimate of buckets of customer accounts receivable, stratified by age, that, historically, have proven to be uncollectible; in addition, in certain cases, the allowance estimate is supplemented by specific identification of larger customer accounts and our best estimate of the likelihood of potential loss, taking into account such factors as the financial condition and payment history of major customers. We evaluate the collectability of our receivables at least quarterly. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. The differences could be material and could significantly impact cash flows from operating activities.

Impairment of Long-Lived Assets

The Company’s management assesses the recoverability of its long-lived assets by determining whether the depreciation of long-lived assets over their remaining lives can be recovered through projected undiscounted future cash flows. The amount of long-lived asset impairment is measured based on fair value and is charged to operations in the period in which long-lived asset impairment is determined by management.

Income Taxes

The Company accounts for income tax in accordance with ASC No. 740 which requires the use of the asset and liability method of accounting of income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. 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.

- 10 -

Revenue Recognition

It is the Company’s policy that revenue from product sales or services will be recognized in accordance with Staff Accounting Bulletin No. 104, “Revenue Recognition” (“SAB No. 104”), which superseded Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements” (“SAB No. 101”). SAB No. 104 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management’s judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company will defer any revenue for which the product was not delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required.

Recent Accounting Pronouncements

There were various accounting standards and interpretations issued during the three month period ended March 31, 2016, none of which are expected to have a material impact on the Company’s consolidated financial position, operations, or cash flows.

Results of Operations

Comparison of the three months ended March 31, 2016 to the three months ended March 31, 2015

Revenues:

We had revenues totaling $21,334 for the three month period ended March 31, 2016 as compared to $30,621 for the corresponding period during the prior year. The decrease in revenue is due to a decrease in carrier access billing resulting from decrease in telecommunications traffic at our CLEC’s largest customer.

Cost of Sales:

We had cost of sales totaling $4,278 for the three month period ended March 31, 2016 as compared to $6,523 for the corresponding period during the prior year. The decrease of $2,245 or 34.4% is due to the fact that we re-routed our telecommunications traffic to a significantly cheaper provider.

Selling, General and Administrative Expenses:

We had Selling, General and Administrative Expenses (“SG&A”) totaling $41,136 for the three month period ended March 31, 2016 as compared to a credit of $56,528 for the corresponding period during the prior year. The significant increase of $97,664 is due to the fact that in the prior year we collected a long overdue account receivable that reversed bad debt expense and we settled several accounts payable and accrued liabilities at a discounted rate. The current year expenses include amounts paid to CWC in exchange for CWC’s provision of accounting and management services; at this time, there is no formal agreement between the Company and CWC with respect to accounting and management services.

Depreciation and Amortization:

Our communications services segment had depreciation and amortization expenses totaling $0 for the three month period ended March 31, 2016 versus $907 for the corresponding period in the prior year. The decrease is due to all of our telecom assets becoming fully depreciated.

Income (Loss) from Continuing Operations Before Taxes and Net Income (Loss):

Loss from Continuing Operations Before Taxes totaled $20,079 for the three month period ended March 31, 2016 as compared to Income from Continuing Operations Before Taxes totaling $79,539 for the corresponding period in the prior year. As previously noted, the decrease of $99,618 is primarily due to the fact that in the prior year we collected a long overdue account receivable and we settled several accounts payable and accrued liabilities at a discounted rate.

- 11 -

Net Income (Loss):

Net Loss totaled $20,079 for the three month period ended March 31, 2016 as compared to Net Income totaling $95,316 in the corresponding period of the prior year. Prior year’s results include $15,777 of income from the T²’s divested Michigan operations.

Liquidity and Capital Resources

As of March 31, 2016, we had positive working capital totaling $2,097 including cash of $1,604. As we have consolidated our telecommunications operations and moved to a model whereby all of our services are outsourced, we have eliminated our need for significant amounts of investing or financing capital. Accordingly, our operating cash flows are the lone driver and funding sources of our operations. Our operating cash flows consist entirely of the collection of our billed services revenues offset by the cost of providing these revenues on an outsourced basis. Furthermore, the Company has settled all its long outstanding payables and receivables and it anticipates the continued ability to generate cash flow from the margins it earns on the provision of wholesale telecommunications minutes to its customers, As previously noted, due to its small size and limited pricing power, there can be no guarantee the Company will be able to continue to maintain its operating margins.

The Company is currently debt free and has no financial commitments outside of trade payables due in the normal course of business.

We had no investing or financing activity for the three month period ended March 31, 2016.

We have no other bank financing or other external sources of liquidity. There can be no assurance that, going forward, our operations will generate positive operating cash flow.

Off-balance sheet arrangements

We have not entered into any off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) or 15d-15(e)) designed to ensure that information required to be disclosed in reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in its reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

The Company’s management, with the participation of its principal executive officer and its chief financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in the Exchange Act Rules 13a-15(e) or 15d-15(e)) as of March 31, 2016. Based on that evaluation, the Company’s chief executive officer and chief financial officer concluded that, as of that date, the Company’s disclosure controls and procedures, were not effective at a reasonable assurance level.

Management’s Remediation Plan

Management determined that a material weakness existed due to an inability to appropriately segregate duties in the accounting department due to the number of personnel in the accounting department. Management has included additional reviews and controls to mitigate the size of the accounting department and the overlap of responsibilities. Management believes the foregoing efforts will effectively remediate this material weakness but the Company can give no assurance that the additional controls will be effective. As the Company continues to evaluate and work to improve its internal control over financial reporting, management may determine to take additional measures to address control deficiencies or determine to modify the remediation plan described above. We cannot assure you that, as circumstances change, any additional material weakness will not be identified.

- 12 -

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

Not applicable.

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 following exhibits are filed as part of this report:


Exhibit Numbers	Description	Method of Filing

31.1	Rule 13a-14(a) Certification by our chief executive officer	(1)
31.2	Rule 13a-14(a) Certification by our chief financial officer	(1)
32.1	Section 1350 Certification by our chief executive officer	(2)
32.2	Section 1350 Certification by our chief financial officer	(2)
101	Interactive Data Files of Financial Statements and Notes.	(3)

__________


(1)	Filed herewith.
(2)	Furnished (and not filed) herewith pursuant to Item 601(b)(32)(ii) of Regulation S-K under the Exchange Act.
(3)	To be submitted by amendment.

- 13 -

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.


	WOODLAND HOLDINGS CORPORATION
	Registrant

May 19, 2016	/s/ V. Chase McCrea III
	V. Chase McCrea III
	Chief Financial Officer

- 14 -

4M Carbon Fiber Corp. - FORM 10-Q - May 19, 2016

Attached files

4M Carbon Fiber Corp. Reports