Business Context and Reporting Period
This is a Form 10-Q for the quarter ended March 31, 2017. The filing identifies the registrant as Zev Ventures, Inc., a Nevada company whose stated business plan is buying and reselling sports-event tickets online. This does not match the requested company, Ondas Inc.; the filing should be verified as belonging to the intended issuer. The statements are unaudited and in U.S. dollars.
Key Financial Metrics
| Metric | Q1 2017 / March 31, 2017 | Comparable period / December 31, 2016 |
|---|---|---|
| Revenue | $5,512 | $741 in Q1 2016 |
| Cost of sales | $12,422 | $1,124 in Q1 2016 |
| Gross profit (loss) | $(6,910); gross margin approximately -125% | $(383); approximately -52% gross margin |
| Operating expenses | $6,516 | $2,752 in Q1 2016 |
| Net loss | $(7,404); loss per share shown as $(0.00) | $(3,135) in Q1 2016 |
| Cash and cash equivalents | $548 | $2,382 |
| Total assets | $6,681 | $5,660 |
| Total liabilities | $68,928 | $60,503 |
| Working capital | $(62,247) | Not stated for the comparable date |
| Operating cash flow | $(6,884) | $(2,550) in Q1 2016 |
| Financing cash flow | $5,050, from related-party advances | $0 in Q1 2016 |
The filing reports no investing cash flow. The related-party loan was $57,553, unsecured, non-interest-bearing, and repayable on demand.
Material Changes Versus the Prior Comparable Period
- Revenue increased to $5,512 from $741, but cost of sales exceeded revenue by $6,910, versus a $383 gross loss a year earlier.
- Operating expenses rose to $6,516 from $2,752, and net loss widened to $7,404 from $3,135.
- Cash used in operations increased to $6,884 from $2,550. Related-party financing of $5,050 partially funded the quarter’s cash needs.
- Compared with December 31, 2016, cash fell by $1,834 and total liabilities increased by $8,425.
Outlook, Risks, and Other Disclosures
- Management states that additional financing will be needed and intends to seek funds through public or private placements. It warns that financing may be insufficient for 2017 capital expenditures, working capital, and other cash requirements.
- The filing says the company has not generated sufficient revenue to cover operating costs and reports a $62,247 working capital deficit. It concludes that these conditions raise substantial doubt about the company’s ability to continue as a going concern. The financial statements include no adjustments for the outcome of this uncertainty.
- No specific revenue, earnings, or cash-flow guidance is provided. Management cautions that interim results are not necessarily indicative of full-year results.
- Management reported disclosure controls effective at a reasonable-assurance level and no material changes in internal control during the quarter. The filing reports no known material legal proceedings or material subsequent events.
Important Facts for Investors to Verify
- Confirm issuer identity: the filing names Zev Ventures, Inc., not Ondas Inc.
- Resolve share-count discrepancy: the cover states 2,000,000 shares outstanding as of March 31, 2017, while the balance sheet reports 3,000,000 issued and outstanding at that date.
- Confirm the reporting-period description: the filing labels the interim statements “for the nine months ended March 31, 2017,” but the presented operating and cash-flow statements cover the three months ended March 31.
- Assess the company’s ability to obtain financing and address the demand-repayable related-party loan, given minimal cash and the disclosed going-concern uncertainty.