---

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 FORM 10-Q

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

FOR THE QUARTERLY PERIOD ENDED: March 31, 2017

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

Commission File Number 0-50584

 (Exact name of registrant as specified in its charter)

Registrant's telephone number, including area code: (419) 873-1111

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

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

As of May 25, 2017, 25,840,351 shares of Common Stock issued and outstanding and 974,156 preferred shares outstanding.

 

Transitional Small Business Disclosure Format (check one): Yes [  ] No [X]

 

 

 

LD Holdings, Inc.

 

		Three Months Ended
		March 31,
		2017				2016
Sales - related party		$	15,000			$	15,000
Cost of Sales			4,105				2,737
Gross Profit			10,895				12,263
Selling, General &
Administrative Expenses			109,581				107,695
Operating Loss			(98,686	)			(95,432	)
Other Income (Expense)
Interest expense			(66,637	)			(23,917	)
Total Other Income (Expense)			(66,637	)			(23,917	)
Loss from continuing operations			(165,323	)			(119,349	)
Net Loss		$	(165,323	)		$	(119,349	)
Loss from continuing operations		$	(0.01	)		$	-
Loss from discontinued operations		$	-			$	-
Loss per share, basic and diluted		$	(0.01	)		$	-
Weighted Average Common Shares Outstanding			25,840,351				25,840,351

 

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

 

LD Holdings, Inc.

		Three Months Ended
		March 31,
		2017				2016
Cash Flows From Operating Activities:
Net Loss		$	(165,323	)		$	(119,349	)
Adjustments to Reconcile Net Loss to Net Cash Used by Operating Activities
Operating Activities:
Depreciation			-				-
Shares issued for services			-				-
Amortization of debt discount-beneficial conversion features			1,657				854
Changes in Operating Assets and Liabilities
Prepaid Expense			-				3,912
Accounts payable and accrued expenses			40,000				(10,255	)
Accrued interest payable			9,348				2,281
Accrued interest payable - related parties			51,538				16,663
Net Cash (Used) by Operating Activities			(62,780	)			(105,894	)
Cash Flows From Financing Activities
Proceeds from Notes Payable			20,000				2,500
Proceeds from Common Stock Subscriptions			-				100,500
Advances (repayments) from related party - Net			40,819				4,587
Net Cash Provided by Financing Activities			60,819				107,587
Net Increase/(Decrease) in Cash and Equivalents			(1,961	)			1,693
Cash and Equivalents at Beginning of Year			7,336				9,738
Cash and Equivalents at End of Year		$	5,375			$	11,431
Supplemental Disclosure of Cash Flow Information:
Cash paid during the year for:
Interest		$	5,750			$	4,119
Income taxes		$	-			$	-
Non Cash Financing and Investing Activities
Recognition of Settlement of Liabilities to be settled in stock		$	200,000			$	-

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

 

 

 

1. 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 it plans  to open 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.

2. Summary of Significant Accounting Policies

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").

The condensed balance sheet at December 31, 2016 was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. The other information in these condensed financial statements is unaudited but, in the opinion of management, reflects all adjustments necessary for a fair presentation of the results for the periods covered. All such adjustments are of a normal recurring nature unless disclosed otherwise. These condensed financial statements, including notes, have been prepared in accordance with the applicable rules of the Securities and Exchange Commission and do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America for complete financial statements. These condensed financial statements should be read in conjunction with the financial statements and additional information as contained in our Annual Report on Form 10-K for the year ended December 31, 2016.

Revenue Recognition

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

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 the three (3) months or less.

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.

Reclassifications

Certain prior year amounts have been reclassified for consistency with the current period adjustments.

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.

 

 

3. 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 $165,323 during the three months ended March 31, 2017.  Also, as of March 31, 2017, the Company had $5,375 in cash, and current liabilities exceeded its current assets by $5,709,472. These matters raise substantial doubt about the Company's 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.

 

4. 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 was $7,500 and $7,500 for the three months ended March 31, 2017 and 2016, respectively.

A judgment creditor has obtained an order to issue corporation unissued shares.  There are no unissued shares to issue at March 31, 2017.  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.

5. Stockholders' Impairment

 

During the first quarter of 2016 the Company issued 1,000,000 common stock subscriptions for $ 0.10 per share. The total amount received for the subscriptions was $100,000.

During the first quarter of 2017 the Company settled the liabilities to be settled in stock at $0.10 per share for a total of $200,000 recorded as Additional Paid in Capital.

6. Convertible Notes

In the first quarter of 2017, the Company issued a total of $20,000 in a new class of promissory notes payable. The notes bear interest at 10% per year, computed annually and payable quarterly.  The 2017 note matures December 31, 2019. The notes are convertible and have a conversion price of $0.15 per share.

In the first quarter of 2016 and for the year ended December 31, 2015, the Company issued a total of $2,500 and $245,000, respectively, in promissory notes payable.  The notes bear interest at 10% per year, compounded annually and payable quarterly.  The 2016 note matures December 31, 2018.  The other 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 $8,373 for the beneficial conversion feature underlying these notes during 2015.  Any accrued interest may also be converted at the fixed conversion price; therefore it represents a contingent beneficial feature.  A total of $1,657 of the debt discount was amortized to interest expense during the three months ended March 31, 2017.

A total of $6,550 of interest was accrued under these notes during the three months ended March 31, 2017.

7. Recent Issued and Newly Adopted Accounting Pronouncements

In May 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-09, "Revenue from Contracts with Customers" which requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services.  The new guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract.  In July 2015, the FASB voted to delay the effective date of ASU 2014-09 by one year to the first quarter of 2018 to provide companies sufficient time to implement the standards.  Early adoption will be permitted, but not before the first quarter of 2017.  Adoption can occur using one of two prescribed transition methods.  In March and April 2016, the FASB issued ASU 2016-08, "Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net)" and ASU 2016-10, "Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing" which provide supplemental adoption guidance and clarification to ASC 2014-09, ASU 2016-08 and ASU 2016-10 must be adopted concurrently with the adoption of ASU 2014-09.  The Company is currently evaluating the impact of these new standards.

LD Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

7. Recent Issued and Newly Adopted Accounting Pronouncements (continued)

 

In June 2014, the FASB issued ASU No. 2014-12 Compensation – Stock Compensation (Topic 718), Accounting for Share-Based Payments.  When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period.  A performance target in a share-based payment that affects vesting and that could be achieved after the requisite service period should be accounted for as a performance condition under Accounting Standards Codification (ASC) 718, Compensation – Stock Compensation.  As a result, the target is not reflected in the estimation of the award's grant date fair value.  Compensation cost would be recognized over the required service period, if it is probable that the performance condition will be achieved.  The guidance is effective for annual periods beginning after December 15, 2015 and interim periods within those annual periods.  Early adoption is permitted.  The Company adopted the provision of this standard, but it did not have a material effect on its results of operations.

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity's Ability to continue as a Going Concern.  The amendments require management to assess an entity's ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards.  Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management's plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management's plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued).  The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter.  Early application is permitted.  The adoption of ASU 2014-15 is not expected to have a material impact on the Company's financial position or results of operations.

ASU 2015-03 and ASU 2015-15 – In April 2015, the FASB issued ASU No. 2015-03, Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, or ASU No. 2015-03.  The amendments of ASU No. 2015-03 were issued to reduce complexity in the balance sheet presentation of debt issuance costs.  ASU No. 2015-03 requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts or premiums.  The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this standard.  Additionally, in August 2015, the FASB issued ASU No. 2015-15, Interest – Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements, or ASU 2015-15, as ASU No. 2015-03 did not specifically address presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements.  ASU No. 2015-15 allows an entity to defer issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement.  The guidance in ASU No. 2015-03 and ASU No. 2015-15 is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years.  Early adoption is permitted for financial statements that have not been previously issued.  The Company adopted this standard at January 1, 2016, but it did not have a material effect on the accompanying financial statements.

In February 2016, the FASB issued ASU No. 2016-02, "Leases".  The standard requires lessees to recognize a lease liability and a lease asset for all leases, including operating leases, with a term greater than 12 months on its balance sheet.  The update also expands the required quantitative and qualitative disclosures surrounding leases.  ASU 2016-02 is effective for fiscal years beginning December 15, 2018, including interim periods within those fiscal years.  Early adoption is permitted.  The Company is currently evaluating the impact of the new standard.

In March 2016, the FASB issued ASU No. 2016-09, "Improvements to Employee Share-based Payment Accounting".  ASU 2016-09 simplifies several aspects of the accounting for employee share-based transactions for both public and nonpublic entities, including for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows.  ASU 2016-09 is effective for annual periods beginning after December 15, 2017, and interim periods within annual periods beginning December 15, 2018.  Early adoption is permitted.  The Company is currently evaluating the standard and the impact on its consolidated financial statements and footnote disclosures.

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

Management does not believe these would have been a material effect on the accompanying consolidated financial statements had any other yet effective accounting standards been adopted in the current period.

 

8.  Subsequent Event

 

In accordance with ASC 865-10, the Company has analyzed its operations subsequent to March 31, 2017 to the date these financial statements were issued, and has determined that it does not have any other material subsequent events to disclose in these financial statements.

 

9.  Related Party

 

A related party, Capital First Management, Inc., is funding the Company with loans of $2,238,490 as of March 31, 2017.

 

 Item 2.  Management's Discussion and Analysis

When used in this Form 10-Q and in future filings by LD Holdings, Inc. (hereinafter "LD Holdings") with the Securities and Exchange Commission, the words or phrases "will likely result," "management expects," "LD Holdings expects," "will continue," "is anticipated" or similar expressions are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.  Readers are cautioned not to place undue reliance on any such forward-looking statements, each of which speaks only as of the date made. These statements are subject to risks and uncertainties, some of which are described below. Actual results may differ materially from historical earnings and those presently anticipated or projected.  LD Holdings has no obligation to publicly release the results of any revisions that may be made to any forward-looking statements to reflect anticipated events or circumstances occurring after the date of such statements.

Introduction

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 be 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 its business plan, we will have to raise capital.  If we are unsuccessful in raising capital, our business will not grow.

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

 

Critical Accounting Policies

The Company does consulting work for Capital First Management Inc. by sourcing clients for Capital First Management and uses its shareholder base and other leads to help build Capital First's website nanocapnation.com.  The Company also consults with Capital First's other businesses.  The services are performed under contract and revenue is recognized as services are performed.

 

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.

 

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:

 

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.

Results of Operations

Three Months Ended March 31, 2017 and 2016:

For the three months ended March 31, 2017 and 2016, LD Holdings had revenues of $15,000 and $15,000, respectively, all from a related party.  For the three months ended March 31, 2017 and 2016 LD Holdings incurred cost of sales of  $4,109 and $2,737, respectively..  LD Holdings had a working capital shortage and did not emphasize current operations.  Management has elected to devote all of its time seeking financing partners to further implement its Business Plan.

For the three months ended March 31, 2017 and 2016, LD Holdings incurred selling, general and administrative expenses of $109,581 and $107,595, respectively, of which $30,000 and $30,000, respectively, represents the fee for the services of John R. Ayling, Chairman and CEO.  Mr. Ayling's fees have been accrued until the operations of the company permit payment, or the Chairman and CEO determines to take his fee in the form of stock.  The total operating expenses resulted in an operating loss from continuing operations for the three months ended March 31, 2017 and 2016 of $98,686 and $95,432, respectively.  Funding of these expenses was from short term loans from principal shareholders and the issuance of common stock.

For the three months ended March 31, 2017 and 2016, LD Holdings incurred interest expense of $66,637 and $23,917, respectively.  Interest expense was accrued, and will be paid when the operations of the company permit payment.

For the three months ended March 31, 2017 and 2016, the Company had a loss from continuing operations of $165,323 and $119,349, respectively. 

Liquidity and Capital Requirements

LD Holdings had a working capital deficit, at March 31, 2017, of $5,709,472. The working capital requirements of LD Holdings have been funded primarily with loans from shareholders, convertible promissory notes and through the issuance of common stock subscriptions.

 

LD Holdings is seeking additional financing to continue developing its business plan and to begin its implementation. Management believes this amount will be substantial.

Quantitative and Qualitative Disclosures about Market Risk.

Not Applicable.

 

Evaluation of Disclosure Controls and Procedures

An evaluation of the effectiveness of the Company's disclosure controls and procedures as of March 31, 2017 was made under the supervision of John R. Ayling, the Chairman/Chief Executive Officer/Chief Accounting Officer.  Based on that evaluation, 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.

During the most recently completed fiscal quarter, there has been no significant change in the Company's internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting.

Part II - OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 2. Unregistered sales of equity securities and use of proceeds.

Item 3. Defaults Upon Senior Securities

None.

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

None.

Item 5. Other Information

 

 

 

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.

 

 

 

---