Filing identity and reporting period
The supplied filing is Zev Ventures, Inc.’s Form 10-K for the fiscal year ended December 31, 2017—not a filing identified as Ondas Inc. or a quarterly report. The company describes a ticket-resale business. Treat this summary as relating to Zev Ventures, Inc.; verify the issuer and filing before relying on it.
Business context and financial results
Zev Ventures buys sporting-event tickets for resale through online marketplaces. It reported inventory of $4,068 at year-end and said it had begun generating revenue. Its stated resale strategy targets markups of 5%–20%, potentially higher for unusually high-demand events; these are business-plan estimates, not reported realized margins.
| Metric (US$) | 2017 | 2016 |
|---|---|---|
| Revenue | 2,846 | 5,512 |
| Cost of sales | 9,073 | 12,422 |
| Gross loss | 6,227 | 6,910 |
| Operating expenses | 38,436 | 27,670 |
| Net loss | 44,663 | 34,580 |
| Cash used in operating activities | 45,602 | 28,992 |
Revenue fell about 48%; the gross loss narrowed, but operating expenses rose about 39% and the net loss widened about 29%. No positive profit or margin was reported.
Liquidity, debt, and cash flow
At December 31, 2017, cash was $3,410, total assets $8,127, and total liabilities $85,633, versus $2,382, $5,660, and $60,503, respectively, at December 31, 2016. Current liabilities consisted of $8,500 of accounts payable and accrued expenses and a $77,133 related-party loan. The loan is unsecured, non-interest-bearing, and repayable on demand. Working capital was negative $77,506, and stockholders’ deficit was $77,506.
Operating cash outflow was funded by $46,630 of financing cash flow: $24,630 in additional related-party advances and $22,000 from stock issuance. Year-end cash increased by $1,028. The auditor and management disclosed substantial doubt about the company’s ability to continue as a going concern; management planned to seek additional public or private equity financing, with no assurance of adequacy.
Outlook, risks, and other notable disclosures
- No quantified financial guidance was provided. Management said expansion would require funding for marketing and inventory and that the company may need financing to pursue its business plan.
- The business faces low barriers to entry, numerous ticket-reseller competitors, competition from primary ticket vendors for events that do not sell out, and greater financial and marketing resources at larger competitors.
- The company had no employees; its sole officer and director donated time. The sole director also performed board and audit-committee functions; there was no audit committee financial expert or code of ethics.
- Management concluded disclosure controls and procedures were ineffective at the reasonable-assurance level. The company did not obtain an audit of internal control effectiveness.
- The financial statements received an unqualified GAAP audit opinion, accompanied by a going-concern emphasis. The filing states there were no material subsequent events and no significant off-balance-sheet arrangements.
- Shares traded on OTC Pink under ZVVT, with limited trading. The company reported 5,760,000 common shares outstanding as of March 19, 2018 and no preferred shares. It did not expect to pay dividends in the foreseeable future.
Most important facts to verify
- Confirm issuer identity: the filing names Zev Ventures, Inc., not Ondas Inc.
- Confirm period: this is an annual report for the year ended December 31, 2017, not a standalone Q4 filing.
- Review the going-concern disclosure, negative working capital, and demand terms of the related-party loan.
- Reconcile the reported revenue, cost of sales, and inventory activity, and assess whether the ticket-resale business generated sustainable unit economics.
- Check share issuance, the July 2017 stock split and cancellation, and ownership disclosures against the company’s capitalization records.