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ZFLO > SEC Filings for ZFLO > Form 10-Q on 17-Feb-2017All Recent SEC Filings

Show all filings for ZLATO INC.

Form 10-Q for ZLATO INC.


17-Feb-2017

Quarterly Report


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following information should be read in conjunction with our financial statements and related notes appearing elsewhere in this Form 10-Q, together with the more detailed business information and the March 31, 2016 audited financial statements included in the Company's Annual Report on Form 10K (File No. 000-55023), as filed with the SEC on July 8, 2016. It also includes our detailed expenditures and plan of operations described herein. Statements in this section and elsewhere in this Form 10-Q that are not statements of historical or current fact constitute "forward-looking" statements.

General Overview

Our Company was incorporated in the State of Nevada on February 25, 2013 to engage in the development and sale of electronic medical record ("EMR") software for small and medium sized physician offices and clinics. Our principal executive offices are located at Mlynska 28, 040 01 Kosice, Slovak Republic. Our phone number is (646) 875-5747. We are a development stage company and we have no subsidiaries. Our common shares are posted for trading on the OTC Markets under the symbol "ZFLO".

We completed a registered offering and raised $50,000 in 2014, which we used to complete development of our basic EMR software and for the launch of our website. You can view the website and register to view and use our EMR software at www.zlatoinc.com.

Our basic EMR software collects and captures patient data electronically, and stores it in a format that enables efficient access and viewing, and distribution by printing or email. Our planned second phase product development will focus on interconnectivity of our EMR software with various third party vital signs monitors, such as blood pressure monitors or temperature monitors.

We currently have no revenues, no operating history, and no users or revenues for our software. We currently have little cash and a net working capital deficit. Therefore, our business will fail without immediate funding. We currently estimate that we will need an additional $10-15,000 just to maintain our corporate existence and meet our regulatory requirements over the next 12 months. Our director has indicated that she will fund our existing working capital deficit and minimum required expenditures the next quarter with a loan, but there are no arrangements thereafter.

We cannot guarantee we will be successful in doing so or with planned our business operations. Our business is subject to all of the risks inherent in the establishment of a new business enterprise and revenue generation from our basic EMR software product is dependent on additional financing as noted herein.

Going Concern

We have very limited operations and no revenues. We have incurred losses from operations since inception. No revenues are anticipated until we complete and successfully commercialize our planned EMR software. The ability of our Company to continue as a going concern is dependent on raising capital to fund our business plan and ultimately to attain profitable operations. Accordingly, these factors raise substantial doubt as to the Company's ability to continue as a going concern.

Our activities to date have been financed from the proceeds of share subscriptions and a loan from our director. From our inception to the present we have raised a total of $65,000 in gross proceeds from the issuance of our common stock. Our director also lent us $32,608 in aggregate for our operations. We require significant additional financing to develop our business. There is no guarantee that we will be able to raise any additional funds.


12 Month Plan of Operation

We cannot guarantee we will be successful in our business operations. Our business is subject to all of the risks inherent in the establishment of a new business enterprise and we are a number of months away from generating any revenue, if at all.

Our plan of operations over the next 12 month period is focused exclusively on raising additional capital for our survival and the commercial launch of our basic EMR software and development of an interoperability kit with third party monitoring equipment. We currently have little cash and a net working capital deficit. Therefore, our business will fail without immediate capital. We currently estimate that we will need an additional $10-15,000 just to maintain our corporate existence and meet our regulatory requirements over the next 12 months. Our director has indicated that she will only fund our existing working capital deficit and minimum required expenditures for the next quarter, and there are no arrangements thereafter. We currently estimate we will require an additional $200,000 for the commercial launch of our basic EMR software and another 8-10 months and $50,000 to develop the software development kit for interoperability with third parties. We do not have any arrangements in place for this additional financing.

Our commercial launch budget also includes approximately $20,000 for the development of an automated software deployment system which will enable us to either run the software for licensed users on our servers, or sell our software to clients via the internet. Fixes and updates should be easily deployed through this system, ensuring that all of our clients are running on the latest version. We also plan to hire a contract sales consultant at a monthly cost of $3,000. His or her initial responsibilities will focus on the selection of several beta test clients to test our software prior to commercial sale.

Ms. Gallovicova is responsible for all financing activities, and developing all job specifications for our third party contract software developers or firms. She will also be responsible for hiring the sales consultant, and will oversee the sales consultant in their role specifically as beta test subjects are selected and the marketing plan is developed.

Without additional financing on a timely basis, our business will fail.

Results of Operations

We incurred a loss of $2,767 and $2,840 for the three month periods ended December 31, 2016 and 2015 respectively. This three month loss includes $1,002 for general and administrative costs (2015 - $1,075) and $1,765 (2015 - $1,765) for professional fees.

We incurred a loss of $10,764 and $10,834 for the nine month periods ended December 31, 2016 and 2015 respectively. This nine month loss includes $3,169 for general and administrative costs (2015 - $3,239) and $7,595 (2015 - $7,595) for professional fees.

From inception on February 25, 2013 to December 31, 2016 we have incurred cumulative losses of $100,268. We believe we will continue to incur losses into the foreseeable future as we develop our business.

Revenues

We have not generated any revenues since February 25, 2013 (inception). Future revenue generation is dependent on obtaining the necessary financing to commercially launch our product.


Liquidity and Capital Resources

Historically, we have financed our cash flow and operations solely from the sale of $65,000 of common stock. Our director has also lent our Company $32,608 for working capital purposes. The loan does not bear interest and there are no specified repayment terms. She has indicated that she will not seek repayment until we have sufficient resources to do so. All of the funds we have raised were used for operating activities since our inception on February 25, 2013. As of December 31, 2016, our resultant cash balance was $434 and our net working capital deficit was $35,268.

We currently do not have the cash resources to continue with our business or maintain our existence. Our director has indicated that she will fund the estimated cash shortfall for the next quarter, but there are no further arrangements in place. We must also raise significant additional funding to launch our EMR product and develop interoperability.

These funds will have to be raised through equity financing, debt financing, or other sources, which may result in the dilution in the equity ownership of our shares. We will also need more funds if the costs of commercialization and further development are greater than we have budgeted. We will also require additional financing to sustain our business operations if we are ultimately not successful in earning revenues. We currently do not have any arrangements in place regarding our current offering or any subsequent offering for further financing and we may not be able to obtain financing when required. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

There are no assurances that we will be able to obtain further funds required for our continued operations. Even if additional financing is available, it may not be available on terms we find favorable. At this time, there are no anticipated sources of additional funds in place. Failure to secure the needed additional financing will have an adverse effect on our ability to remain in business.

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