Filing identity and reporting period
This Form 10-Q covers the quarter ended September 30, 2017, and reports results for the three and nine months ended that date. The supplied filing identifies the registrant as Zev Ventures, Inc., a Nevada company whose stated business is buying and reselling sports-event tickets—not Ondas Inc. This is a material identity mismatch with the request metadata.
Financial results and liquidity
Amounts are in U.S. dollars. Interim financial statements are unaudited.
| Metric | Three months ended Sept. 30, 2017 | Three months ended Sept. 30, 2016 | Nine months ended Sept. 30, 2017 | Nine months ended Sept. 30, 2016 |
|---|---|---|---|---|
| Revenue | $1,042 | $2,094 | $2,698 | $3,694 |
| Cost of sales | $1,556 | $3,211 | $6,046 | $7,653 |
| Gross profit/(loss) | $(514) | $(1,117) | $(3,348) | $(3,959) |
| Operating expenses | $18,164 | $2,689 | $27,572 | $15,155 |
| Net loss | $(18,678) | $(3,806) | $(30,920) | $(19,114) |
Gross margin was negative in both reported 2017 periods because cost of sales exceeded revenue. The filing does not provide a clear separate operating-margin figure. Basic and diluted loss per share was $(0.01) for the 2017 quarter and nine-month period; weighted-average shares were 3,000,000.
At September 30, 2017, cash was $3,908, total assets $6,870, total liabilities $70,633, and stockholders’ deficit $(63,763). Current assets were $6,870 and current liabilities $70,633, implying a working-capital deficit of $63,763. The related-party loan was $68,133, unsecured, non-interest-bearing, and payable on demand. Nine-month operating cash outflow was $36,104; financing cash inflow was $37,630, comprising $15,630 of related-party borrowing and $22,000 from stock issuance. Cash increased by $1,526 from $2,382 at year-end 2016.
Changes, outlook, risks, and unusual items
- Year-over-year quarterly revenue declined by about half, while quarterly net loss increased substantially, alongside higher operating expenses. Nine-month revenue also declined and net loss increased.
- Operating expenses included $14,611 in filing fees and $7,200 in legal fees for the first nine months of 2017, compared with $2,377 and $750, respectively, in the prior-year period.
- The company issued shares for $22,000 in 2017, completed a 4-for-1 stock split, and canceled 8,000,000 shares. The balance sheet reports 5,760,000 shares outstanding at September 30, while the cover reports 3,420,000 at November 14; the filing text does not explain this difference.
- Management says operations depend on financing and intends to seek additional funds through public or private offerings. The filing provides no quantified forecast or specific operating guidance.
- Management and the independent accountant identify substantial doubt about the company’s ability to continue as a going concern. The accountant performed an interim review, not an audit, and stated that the financial statements do not include adjustments that might result if the company cannot continue.
- The filing reports no material legal proceedings, defaults on senior securities, or material off-balance-sheet arrangements. Management judged disclosure controls effective and reported no material change in internal control during the quarter.
Important facts to verify
- Confirm whether this filing belongs to Ondas Inc.; the document names Zev Ventures, Inc. and describes a ticket-resale business.
- Reconcile nine-month 2017 revenue: the financial statements show $2,698, but MD&A states $6,698. The financial-statement figure is used above.
- Reconcile the reported working-capital deficit: the balance-sheet figures imply $63,763, while a note states $63,793.
- Reconcile total assets at December 31, 2016: the balance sheet reports $5,660, while MD&A states $5,600.
- Confirm the share-count changes and the difference between 5,760,000 shares reported at September 30 and 3,420,000 reported at November 14.
- Assess the company’s near-term funding needs, demand repayment exposure on the related-party loan, and the going-concern uncertainty.