Business context and reporting period
The supplied filing is a Form 10-Q for the quarter and six months ended June 30, 2017. It identifies the registrant as Zev Ventures, Inc., a Nevada company whose stated business is buying and reselling tickets to sporting events online. This does not match the request metadata naming Ondas Inc.; verify the issuer before relying on this summary. Financial statements are unaudited and in U.S. dollars.
Financial performance and position
- Revenue: Q2 2017 revenue was $1,355, versus $859 in Q2 2016. Six-month revenue was $1,656, versus $1,600.
- Gross results and margins: Cost of sales exceeded revenue in both periods. The six-month gross loss was $2,834 in 2017 and $2,841 in 2016; Q2 gross loss was $1,946 and $2,458, respectively.
- Expenses and net loss: Six-month operating expenses were $9,408, down from $12,466; net loss was $12,242, compared with $15,307. Q2 operating expenses were $2,892, versus $9,715, and net loss was $4,838, versus $12,173.
- Cash flow: Six-month operating cash use was $9,273 in 2017. Financing provided $28,550, comprising $21,000 from common stock issuance and $7,550 in related-party advances. Cash increased from $2,382 at year-end 2016 to $21,659 at June 30, 2017. The cash flow statement reports 2016 operating cash use of $18,061 and financing inflow of $19,200.
- Liquidity and liabilities: At June 30, cash was $21,659 and total assets were $24,968, versus total liabilities of $71,053. The filing reports a $46,085 working-capital deficit and stockholders’ deficit. Related-party debt was unsecured, interest-free, and repayable on demand; the balance sheet reports $60,053.
- Shares: The filing reports 3,420,000 common shares outstanding at June 30 and a June issuance of 420,000 shares for $21,000.
Changes, outlook, and risks
Revenue increased modestly year over year for the six-month period, while operating expenses and net loss declined. The company reported that it relies on financing and may need additional funding as it expands. Management disclosed substantial doubt about the company’s ability to continue as a going concern: revenues have not covered operating costs, and management planned to seek public or private equity financing that might not be sufficient for 2017 needs. The filing gives no quantified revenue or earnings guidance. Management said disclosure controls were effective and reported no material change in internal control during the quarter. It reported no material legal proceedings, defaults on senior securities, or significant off-balance-sheet arrangements.
A subsequent event note says that on July 26, 2017 the company effected a four-for-one stock split and cancelled 8,000,000 shares. The filing does not clearly reconcile these actions with the reported share counts.
Important facts to verify
- Confirm issuer identity: the filing is for Zev Ventures, Inc., not Ondas Inc.
- Reconcile related-party loan disclosures: the balance sheet and Note 3 report $60,053, while Note 6 reports $60,503.
- Reconcile inventory: the balance sheet reports $3,309, while the note says $2,748.
- Check cash-flow comparison figures: the statements show 2016 operating cash use of $18,061 and financing inflow of $19,200, while MD&A cites $2,754 and $19,000, respectively.
- Check the six-month 2016 net-loss figure: the statement reports $15,307, while MD&A contains an apparent typographical error.
- Confirm the post-quarter stock split and cancellation effects on shares outstanding, and assess the company’s funding needs and demand-repayable related-party loan.